Grand Forks herald., 1917-02-06
MILLING CO. IS
SWAMPfD BY
BIG DEFICIT
Cooperative Organization
Is Not successful-Oper-
ated Four Years.

Northwoed: N D.. Feb. s.-culmi-
mating in involuntary bankruptcy
proceedings brought against two
members Of the board of directors by
the John Miller Commission company
Of Duluth, the cooperative assooi-
atlon known as the Northwood Mill
and Light company, faces serious
condition col. ~ which may ultimately re-
suit IN the disorganizing of the con-
Germ. according to facts which have
been brought to light.
During the. period Of operation Of
the flour mill and elevator, little
over four years, deficit of approxi-
mately $42. 900 resulted. This amount
was furnished by the John Miller
commission company to further the
interests Of the Northwood associ-
that efforts are now being made in
federal court to force DR.. o. T. Peter
son Of this city and Samuel Lowe,
Northwood postmaster, into bank
ruptcy.
Organized Four Years.
The association was orRanixed -
little over four years ago by 4 num-
Der OF business men and farmers,
about 40 in all, who incorporated
with $4,000 capitalization. The John
Miller Commission company Of Du-
luth offered further financial aid to
carry on general elevator business
ana. according to the claims made in
the bankruptcy proceedings. a guar
antee Of payment was signed by GER
tain responsible business men. among
whom. it 10 alleged, were DR.. Peter
son and Postmaster Lowe.
When the company was organized
!o1 shares at $50 each were sold.
A board OF directors comprised of flve
members OF the association were
elected and after the first year Of
operation o. K. Myran Of this city
was named manager, but not placed
under bond.
Unable to Cope.
Inability to cope with tho problems
in buying and selling grain, together
with the failure to keep accurate rec
ords. are believed to be responsible
for the heavy financial losses. E.. K.
Spoonheim. stockholder, Is believed to
be the heaviest loser and It is claimed
that his interests aggregated $500.
Otto Rastedious Of Grand Forks, who
z heavy loser and claims that he had
invested In the concern $500.
I Caused . Probe.
Rastedtous, it is claimed, was in
strumental in bringing about tho in
vestsation last spring. when the con-
dltlon OF tho concern was first real
lied. The mill ceased operations in
June
The present members Of the board
OF directors are q. X. Spoonheim,
chairman; Sam Lowe, postmaster: DR..
o. T. Peterson. Narve Narveson,
prominent farmer. and Peter Glasrud,
mayor of Northwood.
The defendants in the bankruptcy
action are represented by Attorney e.
0. Haraldson pf Lansford. Murphy &
Toner. and Bangs, Hamilton & Bangs
Of Grand Forks The defense denies
signing tho guarantee, supposed to be
held by the commission company, de-
MES individual insolvency and will
maintain that the debt was a gamb-
ling one, for which the board Of d.
rectors are not liable.
Non-Assessable Stock.
The stock held by the members Of
the association is worcestershire and
as a result, eliminates all others not
associated with the guarantee from
settlement OF the deficit The only
loss sustained by the members will
be the amount Of their investment,
providing the organization is solvent
The case will be brought up in
federal court in Fargo, but as yet no
definite date has been set.