The Climax-Madisonian. (Richmond, Madison County, Ky.) 1914-1917, 1915-10-20

type samples. mucn OF wnIcn was unnv
to be used in the Factory; that the Man
ager OF the Factory complained to the
President and Executive Committee and
requested them to take the matter up
with Mr. Saunders and request him to
refund the difference between the actual
value OF the tobacco and the purchase
price; it is charged that the President.
the Directors and members OF the Elk
ecutive Committee fraudulentiy refused
TO do so. and that the Manager OF the
tobacco factory afterwards induced Saun-l
ders to return the sum OF $3.50 per hun
bred. whereas the real loss was IS per
hundred pounds, making a net loss to
the Company OF $3.50 on 10000 pounds
OF tobacco.
We, the Committee, went to Elem
ingsburg and Investigated this charge
thoroughly. We placed all the officers
of the warehouse under oath, took
their sworn statements, and the am
davits are filed with this answer. We
found that it was untrue that the mem
bers of the Executive Committee con-
nived at or fraudulently conspired
with this man to accomplish the sale
of this tobacco at an excessive price,
and that the Executive Committee and
officers of the Burnley Tobacco Com
pany had nothing whatever to do with
the transaction. 1t developed that this
tobacco was sold by Mr.. Saunders to
Mr. Preston, of the Factory, by sample,
and upon complaint being made by Mr..
Preston to Mr. Saunders that the to-
bacco did not come up to sample, that
matter was adjusted satisfactorily tol
Mr.. Preston by claim for reclamation,
as is customary in such cases, and Mr..
Preston so testified under oath. We
further found that this tobacco was
purchased by Mr.. Saunders in 1911 be-
fore the opening of the Burnley loose
leaf market at Flemingsburg, and was
sold by him privately to Mr.. Preston,
| the Superintendent of the factory, in
| November, 1912. 1t is our opinion that
there was no fraud upon the part OF
any one in the entire transaction.
XI.
| 1t is also charged that U. C. Saunders
purchased on the Flemingsburg market.
| as agent for the Company. large quanti-
| ties of tobacco and also purchased large
| quantities for himself; that the tobacco
| he purchased for himself he again placed
on the market and would then buy it in
! for the Company at a large increased
price, thereby making for himself large
profits; that this was a fraud upon the
| Company and that the fraud was COM
mitted with the knowledge Of LeBus. 1t
is charged that this viii be shown by an
| examination of the books and records OF
the Company kept at Lexington and the
books kept at the sales warehouse at
! Flemingsburg
We had the books of the Company
at Flemingsburg and Lexington ex-
amined in our presence by an expert
accountant, Mr.. c. w. Banta, of Louis
vile, and we took the sworn testimony
of all those who might have been con-
nected with the transaction in regard
to it, and find that there is no truth
in the charge.
XII.
1t is charged that LeBus purchased
large quantities of tobacco for himself
on the Cynthiana market: that after
making the purchase he would examine
the tobacco and keep for himself the
profitable purchase and turn over to the
Company the Improbable purchase and
have the tobacco which had been pur-
chased by him charged to the Company:
that this was fraud the Company
and was known to some OF the members
of the Board of Directors.
} We went to Cynthiana and took Mr..
c. w. Banta. an expert accountant,
with US, and took the sworn state
| rnaDtc Of tba MapaUar Sacratary apd
Floor Boss of the loose-leaf warehouse
: there. and found that Mr.. LeBus did
not allow one pound of his tobacco to
be sold to the Burley Tobacco Com
: pany; that on the contrary Mr.. LeBus
had given positive and emphatic or
ders that under no circumstances was
any of his tobacco, or tobacco raised
. by his tenants, to be sold to the fac
: tory at Louisville. There is not a
r scintiIla of truth in this charge The
t affidavits referred to are filed with
this report.
XIII.
1t is charged generally that the prop
t erty of the Company is being rapidly dis
sipated and that it will soon be insolvent
D and insufficient to pay the debts OF the
Company.
! in addition to the special report
made to us by Mr.. Banta, the expert
accountant, showing the result of the
4 operation of the Strater Bros Factory.
o we have also caused to made a finan-
o cial report covering the entire business
f of the company, including the factory
Z plant at Louisville. This statement.
!. which is the result of an expert exam
O ination of the books of the Company,
shows the Company to be in good.
c healthy financial condition. We find
that the properties of the Company
, are being carefully preserved, and that,
instead of Sits assets being dissipated
. or wasted. they are being conserva-
n lively managed, and the reports filed
herewith show that the Company is
q now making a profit in all of it's do
4 partments.
In conclusion, this Committee de-
plores greatly the existence of any dis
sension or dissatisfaction among the
stockholders. We condemn the insti-
= tuition of the present suit for dissolu-
!. ton of the Company. The wholesale
charges of fraud made in that suit, we
find are not borne out by the facts, and
they constitute in our judgment a
wreckless SANDER upon the officers of
this Company. The Burley Tobacco