Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1914-06-25
QAF[|N I CO. FAILS
OWING $35,00.0OO
GREAT DRY GOODS HOUSE OWN
ING LARGE STRING OF STORES
GOES TO WALL.
TWO RECEIVERS NAMED,
BRANCH STORES CLOSED
Financing Of Numerous Branches In.
wolves Firm Financially and Suffi.
cient cash Could Not Be Raised-
Reorganization contempIated-Lars-
est Failure in History Of Trade.

New York, June 25.-The great dry
goods house of H. B. C latin Company
failed today, with liabilities Of $685.
100000. The assets are estimated at
$40, 900 900.
Two proceedings-friendly and un-
friendly-threw the firm into bank
ruptcy and two receivers were named
under bonds of 100000 each.
The Clafiin company controls or Is
affiliated with some thirty retail stores
thruout the United States, and it was
the Endorsement of Their paper held by
more than 5000 banks here and in in
terror cities that caused the crash.
The United Dry Goods Companies
and the Associated Merchants Com
pany, tho affiliated with the Claf1in
company thru stock control. were !c
no way involved in the failure.
Reorganization Contemplated.
Unless blocked by creditors reor-
gan;zation of the failed firm Is contem-
plated according to the following
statement issued by John Claflin, the
president:
The unprecedented shifting OF trade
centers in New York has caused great
loss to many interests. In the case OF
the II. B. Claf1in Company the up
town movement of business has seri-
cusly curtailed our wholesale prohts
and has compelled us to rely mainly on
the profits from financing retail stores
thruout the country. Their rapidly ex-
panding business has occasioned large
capital requirements which %e nave
not been able to meet. receiversnlp
has therefore become necessary pend
ing the readjustment of the affairs OF
the company. A plan Of rcorganiza-
ton for the II. B. Claflin Company will
soon be presented which, we hope will
prove acceptable both to creditors and
to stockholders.
"The Associated Merchants Com
pany and the United Dry Goods Com
panies are not themselves borrowers OF
money. They are in an exceedingly
strong financial position and the sue
cess of their retail stores is assured
Note Holders Form Committee.
b A note holders protective committee
has been formed to look after the in
terests Of the creditors. Most of the
banks concerned will be represented on
this committee. of which ]. S Alexan-
der, president of the National Bank OF
Commerce. will be chairman.
New York banks are said to have
made large advances to the Clatiin
company recently with the hope of
averting financial embarrassment. New
York banking interests. 1t Is under
stood, have agreed to offer such as
sistance as may be necessary to some
of the independent retail stores at
fected. Interested merchants were
closeted with ]. P. Morgan and other
prominent bankers day and night for
the last week in an attempt to avert
the failure. 1t is understood that $780,
100000 was necessary.
Morgan Offer Aid.
"Mr. Morgan and others were most
generous" said one who participated
in the conferences, but 1t was qucs-
ton Of raising the whole amount or
none at all"
Joseph B. Martindale, president Of the
Chemical National Bank. and Frederick
Juilliard, a Wholesale dry goods mer-
chant, were the receivers appointed
They were named in the friendly pro-
ceedings-two suits in equity-one
brought by John c. Eames. vice presl'
dent of the H. B. Claflin Company, the
other by William P. O'Dell.
There were also involuntary pro.
ceedings which sought the appointment
of different receivers and alleged thai
the company was insolvent These
proceedings were instituted by smal
creditors.
Dry Goods Trade Hit.
Receivers Martindale and Juilliari
said that the failure was of such tire
| mendous proportions that 1t would b.
several weeks before 1t would be pos
sible to know where they stand.
The failure Is perhaps the most i'm
portant in the history of the dry good!
trade in this country, New York bank
ers predict that the chief and herhap!
only potent general effect will b,
temporary decentralization in the DIR.
| goods trade.
Announcement Of the failure caused
| general decline in the opening of tn,
stock market, but losses were not heavy
and succeeding transactions caused ;
| reaction to some extent.
John Claflin had been associated
| with the dry goods business for NOR,
than forty years. He is regarded as th'
| A. T. Stewart of his time. At the age o
| 20 he entered the employ of his father!
| firm, then known as II. 3. Clafiin & Co.
] three years later becoming a membe
of the firm, and in 1890 formed the cor
poration which went under today. H,
| Is a trustee Of many financial and char
table organizations.
Other Stores to Close
Announcement was made this after
| noon that all the so-called Claflil
stores strictly speaking would be closet
pending adjustment of the company
(! affairs.
Hope to Realize on Assets.
Mr.. Alexander, chairman of the pro
tective committee. made the following
| statement:
I'll B. Claflin Company discounte'
| with banks in New York and sold thr'
note brokers to banks thruout Americ'