Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1915-12-14
TRADING STAMP
FIRM ACCUSED
BY HUTCHINSON
Sperry & Hutchinson Funds Sc
cretly Divided?-Loss Put
at $3.50, 900.
NO RESERVE FUNDS AT
START, PLAINTIFF SAYS
Declares Proceeds Were Raid
ed, but the Concern
Earned Millions.


Fraud amounting to hundreds Of
thousands of dollars was charged
against William NJ. Sperry. of Gran
ford. and the late Thomas A. Sperry
by Shelley NJ. Hutchinson in the
United States District Court yester-
day, Judge Rellstab presiding. The
Sperrys and Hutchinson were part
ners in the trading stamp firm Of
Sperry & Hutchinson for years, and
Hutchinson. said to be a millionaire,
is now head of the Hutchinson Profit
Sharing company
Through his counsel. Martin Con-
boy. of Baldwin, Griggs & Baldwin,
27 Pine street, New York, Hutchinson
sought to have supplemental COM
plant considered. The original suit,
which was started last summer. was
dismissed. Since then. however. it
was claimed that additional informa-
tion had been secured which justi-
fed the charge of deception against
the Sperrys.
Thomas A. Sperry and William NJ
Sperry "raided the treasury of the
Sperry & Hutchinson concern" Mr..
Conboy claimed There were no
dividends. because all the profits
were taken care of by an arrange
ment between the two Sperrys," Mr..
Conboy further set forth, and in par
tial support of this he pointed out
that a salary of 100000 a year was
paid Thomas A. Sperry as president
After the death of the latter, few
years ago. an annual sum of $4,000
was given his wife.
The 1T. A. Sperry Trustee Ac-
count" was charged with being a
fund. the nature of which was kept
from Hutchinson The account con-
itained s450000, 1t was stated, which
was divided between the two Sperrys
and which should have been partici-
pated in by other members of the
Econcern.
Case Dismissed.
The original proceedings started by
Nr. Hutchinson were based on the
grounds that in surrendering 4.970
shares of his 10000 shares of Sperry
& Hutchinson stock In 1904, it was
agreed that some OF the dividends on
1.-The 4.g70 shares would continue to be
paid him. This agreement, he claim
teds was violated. The case was dis
missed.
Mr. Conboy asserted that the addi-
tiosal information. in the supplement-
al complaint was discovered after
some of the employees of the old
Sperry & Hutchinson Company had
been. discharged by its successor, the
Hutchinson Profit Sharing Company.
The executors of the Thomas A.
Sperry estate. represented by Fawkes.
Gallert & Crisp, opposed the admis-
sion of the supplemental complaint
because it introduced an additional
defendant, the executors for Mr.,
@As1 n fsfxf tn n
original bill and who therefore could
not answer the allegations set forth
in the latter 1t was also claimed
that the supplemental bill had been
offered too late to be joined with the
original one
After long argument, however,
Judge Rellstab permitted the Joining
of the supplemental complaint with
the original complaint, and they will
not be brought before him for adjudi
cation. The battle between the
Sperrys and Hutchinson now promises
to be a lengthy one. Mr.. Hutchinson,
if successful. would receive a judg-
ment for hundreds of thousands of
dollars
The supplemental complaint alleges
that by ''the suppression and CONCEAL
ment of facts, and that by means of
improper bookkeeping entries in some
instances and the lack of any entries
at all IN other instances, the defendant,
William NJ. Sperry. and his brother,
Thomas A. SperTy, confined knowl-
edge of the following facts to only a
very few persons in their employ an,
effectually concealed the same from
all Others"
No Reserve Fund
Mr.. Hutchinson. who claims to have
originated the trading stamp idea,
has the following TO say about the
conduct of the Sperry & Hutchinson
business:
THAT during the periods herein
before referred to the said Sperry &
Hutchinson Company issued large
quantities of said trading stamps,
which were sold to merchants pur-
suant to the aforesaid method of husi-
ness and which were redeemable in
merchandise as aforesaid. That no
reserve fund was at any time main-
tanned by the said Sperry & Hutchin-
son Company for the purpose of meet
ing the obligations of redeeming said
stamps in merchandise or otherwise.
THAT the proceeds derived from the
operation of said business, as fast as
they were obtained, were divided be-
tween the said Thomas A. Sperry and
the said defendant, William NJ. Sperry.
who relied largely upon the money
paid into the corporation for the pur-
chase of new stamps to replenish the
merchandise delivered to the mer-
chants customers in the redemption
of stamps That in many instances
the aforesaid divisions of the proceeds
of operation so depleted the cash in
the bank that the said Sperry &
Hutchinsonf Company Immediately
after such distribution was obliged TO
apply for and obtain loans at banks
=. <.,-Sf,x. n, rr1aaf THAR current ObliRa :