The Bridgeport evening farmer., 1917-01-17
Creditors Mulcted While
Bribery and Graft Reign,
Chamberlain Tells Court
{continued from Page One

s~o~
ed his connection with the Water
vliet Hydraulic Co.
The company in 1899, said Cham
berlain. was known as the West
Troy Water Co. 1t had obligations
of $46O,00O with first, second and
third mortgages outstanding.
Chamberlain. who previous to study
ing law had been a civil engineer, ex-
amtned the property and found that 1t
was likely to be a most profitable ven
ture. Burr & Knapp and Marsh, 'Mer-
win & Lennon were interested. It
was decided to set subscriptions for
the formation Of new holding COM
pany. Chamberlain collected $4,000
in three weeks. Both Marsh and Burr
were heavily interested. Chamberlain
told Of his carrying over 100000 in
greenbacks to Albany where he bought
up practically all the outstanding
mortgages before the holders became
WISE to the movement, foreclosure
proceedings pending having been
bought off from time to time until the
purchase was effected. Chamberlain
never had one dollars actual invest
ment in the company, he asserts, but
for his services he was paid $14 900,
partly in cash and partly in stock.
Bonds for 100000 and an equal amount
Of stock were issued. Both Burr and
Marsh wanted to become president Of
the new company.
Chamberlain was made preE-
dent. In the further differences the
first mistake was made when the
fnanciers failed to agree to Chamber
lain's proposition to issue stock to
cover the $4,000 cash contributions
rather than issue mortgages and ham
per the company in getting additional
capital.
In the petition to the legislature of
New York to grant the new charter
from the West Troy Co. to the Water
vliet Hydraulic Co., Chamberlain told
Of a trip to Hudson, New York, where
he paid out $4,000 to legislators, 'sone-
half of which was pure graft, to pro-
cure the signature Of the governor to
the bill. That signature was never
placed until the last dollar was paid
by u.s.
Knapp then began upon his own
authority the payments OF enormous
sums into Watervleit Hydraulic, one
payment being as high as $4,000. The
dam broke. Chamberlain was in
Georgia. when a telegram came from
the company officials announcing the
catastrophe. There was no money to
make immediate repairs and Cham
berlain was forced to telegraph:
Tell the people to go down to the
river and draw their water" But
Knapp from his banking funds here
| met the necessity and under Cham
berlain's personal supervision it was
rebuilt. The water wheel went out
and 1t was necessary to replace it at
$4,000 cost. Knapp again furnished
this money and other sums until his
Indebtedness in the water company
piled up to $4,000.
This sum was offset at times by ac-
commodation paper issued to Burr &
Knapp and discounted by them.
chamberlain was made an endorser
upon this paper with an understand
| ing that Knapp would place in Cham
berla1n's private safe deposit box in
the Burr & Knapp bank sufficient COL
lateral to reimburse him for any fail
ure to meet the paper. Chamberlain
was drawn into the affair to the ex-
| tent OF $4,000. When the crash came
| and the safe deposit box was opened
! there was less than $500 security
there. Chamberlain had lost about
$4,000 because of his belief in
Knapp's honesty.
In the note i'll question, Chamber
lain. after asserting that notes came
to his office for endorsement so often
that he did not even look at their face,
asserted that stated e1nphatically that
he did not know what his endorse
ment was upon such a note st did
not endorse it. That note was au-
thorized by the directors. It was
purely for Burr & Knapp's accommo-
dation. I later found my name upon
it,"
at is said that I allowed certain
payments to be made from that col
|! lateral (securities held by the City
National bank from the Watervliet
Hydraulic Co.'S rental.) If I did,
did not know it.
The witness then explained that
Mrs. Rain had charge of the books
and that if she had accepted money
at the window Of Burr & Knapp for a
certain purpose and had entered it in
correctly, she had done so in good
faith for she was the soul of honesty
but the charges of embezzlement
against Knapp and the charges of bad
faith in the management of Burr &
Knapp trusteeship had arisen from
the wrong entry.
Knapp is now spending three
months in Jail for $3.50 he never knew
had been paid In because the girl did
not credit it properly Chamberlain
told the court.
The witness then told Of his trans