Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-10-26
REFEREE HAMILTON MAKES RE.
PORT IN TW,NE COMPANY
LITIGATION.
ALLEGED CONSPIRACY TO
DEFRAuD STOCKHOLDERS
Correspondents Said to Disclose Deal
Between William and Harry Morley
and Conner Machinery Company. Of
Boston, Whereby 1000 Shareholders
Were to Be FIeeced.

Sioux City, Oct. 2s.-William and
Harry Morley. father and son, entered
into deal with the Connor Machinery
Company, OF Boston, to swin6le 2,eee
stockholders of the Morley Twine &
Machinery Company oft OF $4,000, ac-
cording to findings of Referee c. c.
Hamilton His report was iied ii tie
district court Monday.
Both Morleys were indicted last
week by the United States distric,
court grand jury for using the mails
to detraud.
a bench warrant for their arrest was
to be issued today. federal court Off
Gals said.
1t was expected they would appear
at the federal building and furnish
bonds for their appearance at the next
term of court 10 answer the charges.
Father and son We're in the city Mon
day. In addition 10 their difficulties
in the district and the federal courts
here. they were arrested several
months ago at Parker, 5. D.. for al
legged fraud in connection with the sale
of stock in the Sioux Falls Stockyards
Company. Last week the case was tax
en- to the federal court where the con-
stiturionality OF the blue sky law, which
they are charged with violating, Will
be determined.
Reorsanizins Business.
Stockholders of the Irvine and ma
chinery company, who deposed the
Morleys as officers, now are endeav0-
ing 20 reorganize their business in
East Seventh street. Thru the Morleys
the stockholders were tricked out Of
considerable money, Referee Hamilton
reports.
Several months ago an action was
started by NJ. D. Gates to foreclose q
mortgage on the Morley company. a.
C. Strong was named receiver and
large number OF claims were fled Mr..
Hamilton was appointed referee TO
take testimony and report findings Of
fact and conclusions of law 70 the
court. II has taken thirty days to
complete this work.
About twenty-five claims were passed
on. The most serious contention was
the claim of Connor & Co. They fur
nished machinery to the Irvine COM
pany in 1907 and filed a note for sl6,-
600 in 1905 It now amounts to prac-
ticslly $4,000.
Referee Hamilton found that this
note was fraud and that it was fixed
up so that the Morleys and the Con-
nors could split up the profits OF what
they were able TO obtain from the
stockholders of the twine company.
Correspondence Diseloses Fraud.
That it was a prearranged affair was
shown by an investigation of CORE
spondence between the Morleys and the
Conner company, says the report
Testimony showed that every sentry
Of invoice from the Conner company
to the Morleys was changed. 1t also
showed that John Conner came 10
Sioux City in 1908 and had new in
voices made by a public stenographer
who testified that she made them for
him.
The report contains this further in
formation: Four original invoices were
raised. The first was raised from S.
40 to s49.230, the second from s4,340
to $685.. the third from $4,000 to $4,000
and the fourth from s2.790 to S. 100.
This made total of nearly $4,000 that
William Morley gave Conner in the
form of a Irvine company note.
Overehareed For Machinery.
Findings of Mr.. Hamilton show that
the machinery at the plant actually
cost s17,740. Under the deal the stock
holders were charged s31.3s5 for j., the
records showed. Failure to destroy