The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-06-26
Biggest Mercantile Failure
in History of the
United States Is
Recorded
RECEIVERS NAMED
FOR SEVERAL OF THE
CLAFLIN STORES
Creditors Composed Mos Bankers
Throughout Country Sc Claflin,
President of Comp 81 Resigns,
and Says Failurs Due to
Shifting Trad iditions

New York. Jup % The biggest
mercantile fnilur c,ss ,e history of the
United states recipitated today
when receivers we.~ appointed for IL.
Il. ChafIin company of this city. The
company, 1t is estimated. owes more
time, IL Is unable to pay. Its assets are
spid to be x44,OOO,0uO.
John Clafin, head of the company, and
its chief individual stockholder, is the
owner of chain of nearly 80 other dry
goods enterprises throughout the coun-
try, which are involved in the failure.
today and similar action, it was an
nounced, would be taken in the case of
the rest. Their business will be con-
tinued under receivers management un-
til their financial affairs have been adj
justed.
From 5000 to 5000 banks in all parts of
the United States composed the bulk of
the Clanin creditors. They hold notes
aggregating the major part of the liza
bilities. These notes are said to have
been issud by the various Claflfn stores.
the proceeds used, when discounted, in
financing their needs.
The United Dry Goods company. a
So, 100000 corporation, financed several
years ago by ]. p Morgan & Co., to take
over other Clahin interests, is not in
volved in the failure. Neither is the As
sociated Merchants company. owned by
the United Dry Goods company, and which
in turn owns one-half of the II. b. Clas-
lin company and other large stores, prin-
cipally in New York.
Mr.. Claflin, who was president of both
the dry goods and Associated Merchants
companies, resigned those positions to-
day and it is understood that when the
II. B. Claflin company is reorganized Its
connection with both the former COM
panies will be severed. Cornelius n
Bliss, son of the late New York dry
goods merchant of that name, was elected
to succeed Mr.. Claflin
Failure Due to Shifting Trade
According to Mr.. Claflin, the failure
was due to the unprecedented shifting OF
trade centers in New York city, which
compelled the concern to rely mainly on
its retail stores in other cities for its
profits.
Their rapidly extending business" he
said. "occasioned large capital require
ments Which we have not been able to
meet"
The crash came today after vain eff
forts had been made by Mr.. Claflin to
induce j. p. Morgan & Co, and other
Wall ha iro IN, u Tim,
money to tide over his embarrassment.
These bankers, it was learned, advanced
the company several million dollars about
two weeks ago. but banks. continued to
press their claims until it became evident
that virtually the whole 900 900 would
have to be raised to save the company
from failure.
Mr.. Claflin at conference lasting un-
til after midnight last night, with j. p,
Morgan, j. S. Alexander president of
the National Bank cf Commerce. Albert
Nj. Wiggin, president of the Chase Ma
tional bank, and other financiers, made
a last appeal. but the decision went
against him. The bankers believed a re-
ceivership and a reorganization of the
II. B. Claflin Co., which would include
its separation from the United Dry Goods
company, and the Associated Merchants
company, was the wisest course At this
meeting Mr. Claflin Is said to have an
HouEceu MS intention to resign from the
two latter concerns.
Today John c. Eames, vice president of
the II. B. Claflin Co., filed a friendly
suit in equity against it. alleging that II
was unable at present to meet it's liabili-
ties. This was admitted by the COM
pany, and Judge Hand in federal court
appointed as receivers Joseph B. Martin
dale, president of the Chemical National
bank. and Frederick A. Juilliard, a dry
goods merchant
Almost simultaneously a petition in
voluntary bankruptcy was filed by the
three merchandise creditors whose at
torneys announced they would seek the
appointment of other receivers. In this
action subpeonas were issued for Mr..
Claflin, Mr. Games and Dexter N. Force,
treasurer of the company. to appear and
show cause on or before July 2, why 1t
should not be adjudged bankrupt.
To Protect Noteholders
Immediate steps to protect the interests
of noteholders and the. merchandise cred