The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-07-15
c. J. Kelly Thought Butte Con-
Germ Owed $50, 900, Instead
Of S1,69O,OOO.
MERELY SELLING AGENT
Ignorance Due to Fact That
Real Office Of Owners
Was Here.

Crehitors Oi inc H. -. Cla11in company
were interested yesterday in the publica-
tion of an article relating the sale in this
city OF notes made by the Hennessy Com
pany OF Butte. Mon, a Claim subsidiary.
by John Clanin without the knowledge
of the president and manager OF the store
In Butte. The notes were made by off,
GERS Of the Butte store residing in New
York and were indorsed by the H. u.
Clafiin Company which offered them for
sale through note brokers to the banks
The amount of those notes is 81. 5000
Though Charles J. Kelly. president OF
the Hennessy Corporation. said he knew
nothing about the sale OF the notes. there
was no occasion for his knowing, as John
| Clafiin. owner of the store. and the officers
OF the company were here in New York,
where the books OF the company are kept
and where the financing of the concern
went on.
President Kelly told his story to Judge
John u. McClernan in Butte at the time
that Kelly was appointed receiver for the
concern lie said
The Hennessy stores have been going
along doing n remarkable business and
making splendid profits. We have run
the business very closely and very care
fully. never having any Indebtedness to
speak Of. Al the present time our debts
are about $4,000
Came Like n Bolt, Says Kelly.
II received a telegram from New York
advising me OF the difficulties OF the
Claim interests. who own the Hennessy
business. They suggested a receivership.
! wired back to the New York end that
the Hennessy corporation had no debts to
speak OF and tremendous assets. ! had
no knowledge Of any indebtedness being
contracted by the Clahn interests in the
name OF the Hennessy corporation until
| got a letter from a bank in st. Paul.
holding note for $4,000.
81 was two days getting positive infor-
nation from New York and finally I was
| informed by the treasurer of the Hennessy
Corporation living in New York that notes
to the amount of sl.960.O00 had been
negotiated by the Hennessy Corporation
and indorsed by the II. Il. Clafiln Com
pany, which notes were sold in the market.
The news came to me like a bolt from
| the clear sky. The Clafin interests own
| all the stock OF the Hennessy Corporation.
| II was their business. They chose to have
treasurer In New York and little
drea med that such an arrangement would
result as II has"
The Hennessy Corporation Is capitalized
! a. $1,000. 900 and has been doing bust
ness OF about $4,000. 900 a year
Concerning the notes OF the Claim COM
pany. John Clafin issued the following
tatement:
The notes OF the retail stores indorsed
| by the II. Il. Cahin Company were
Issued by companies OF which I am the
sole owner These notes were in each
and every instance executed by a duly
| authorized oflcer Of the company which
made such notes. and are valid outstand-
| ing obligations of such company Each OF
these companies was financed in New
York and the local officials of each com
| pany were charged only with the obliga-
| ton Of carrying on the retail operations
Of the company and keeping the records
OF such operations which were sent 20 me
At New York"
Real Offices Of stores Here.
Friends of Mr.. Clahin explained mat
| the real offices OF the twenty-six OF the
| twenty seven Clafin cores were in New
York city and that the man at the head
Of any store was merely an operating
| agent, who made his reports 10 the head
quarters in this city. In other words each
store was branch OF the organization
that Mr.. Clafin had built up. with real
headquarters in this city, where the books
were kept. Accordingly any financial
Statement: issued by n local store could
not have been correct because there
might have been other liabilities or assets
on the books OF the company kept in this
city.
II was claimed yesterday by friends OF
Mr.. Clafiin that the assets of the II. p
Claiin Company and OF the retail stores
were much greater than the liabilities
Joseph r. Martindale and F. A. JUL
Hard receivers of the II. Il. Clafiin Com
pany. issued the following statement:
The status OF all notes bearing the
name of the II. r. Clahin Company IL
one OF the matters involved in the ex-
animation upon which the accountants are
still at work. Until we get all of the
facts bearing upon the matter we cannot
OF course make any comment In respect
thereto"
The total amount OF the notes made by
the subsidiary stores and indorsed by the
II. Il, Clafiin Company Is s3l 100000.
The facts and figures of the company
will be laid before the creditors at the
meeting in the Park Avenue Hotel on July
"a next. The meetings OF the creditors
of the H. Batterman Company and the
Bedford Company OF Brooklyn will be
held on July 2s or 90
1t was said in Wall Street yesterday
that banks holding the Claim notes
were marking them at so. This. II was
said, was purely matter Of precaution
and was not based on the knowledge of
the actual facts dlvulged by the receiver
ship
naa.l-ar Snr II AIN