Omaha daily bee., 1918-07-21

| been misrepresented to them by the
| bankers who had foated the original
issue.
Bankers Make Report.
The bankers had not been idle in the
face OF the unsatisfactory rumors. and
on May 9, 1918, they we reable to re-
port that the board of directors OF
the M. Rumley company had been
completely reorganized; that Clarence
S. Funk, previously general mana
ger of the International Harvester
corporation, had been elected presi-
dent; that John H. Guy had been
elected vice president in charge of
finances, and that all of the former
executives of the company, including
General Manager Edward A. Rumley
and his uncle, A. ]. Rumley, presi-
dent, had rendered their designations,
which had been accepted. A para
graph or two from the report Of the
bankers to the governors of the stock
exchange, on May 9, 1913, seemed to
throw light on situation that is
otherwise somewhat obscure. The
bankers said:
1T is impossible at present to make
any accurate forecast of the earnings
for the year. The profits will, un-
doubtedly, suffer from the mistakes
of the late management For these
reasons, and to maintain as strong
cash position as possible, the direc-
tors have determined to take no action
in respect to dividends on the pre-
ferred stock until the outcome of the
business for the present year is
known.
Gas late as December, 1912, the
company furnished balance sheet
as OF September 30, 1912, showing
upward of $2,l00,000 earned for the
first nine months of the year. In re-
lance upon these and subsequent
statements and feeling that we had
every reason to believe that the COM
pany's business, while expanding rap
idly, was actually showing liberal
profits, and in order that the COM
pany might be in a position to ham
die its increased volume of business,
we purchased from it in February
last $l0,000,000 of two-year per cent
notes, convertible into common stock
at par. We were then assured that
with the proceeds of these notes and
moderate seasonal borrowing from
the banks the company would have
sufficient funds to handle the volume
of business then contemplated. Sub
sequently we were led to believe that
neither we nor the accountants whom
we had employed had received full
or reliable information from the Off
GERS of the company regarding its
true manufacturing and financial po-
sition."
Reorganization Does Not Save 1t.
The reorganization did not save the
M. Rumely Company from bankrupt
cy, even though production was cut
down and the selling force increased
under the new management. On jan
uary Is, 1915, Finley P. Mount was
appointed receiver and later, with the
sanction of the court, sold
the remaining assets to the Advance
Rumcly company, of which he is
president, and which is doing large
and profitable business. The receiver
ship still continues. With DR.. Rune
/ ly out of the management and the
Rumely interests in the company that
bears the family name entirely wiped
out, the affairs Of the agricultural i'm
4 plement business have no further
bearing on the present narrative. II
| is of interest, however, to inquire
into the nature of the mistakes to
which the bankers attributed the
crash.
| ! have referred to DR.. Rumely as an
enthusiast. He is all of that. When he
becomes possessed of a new idea
nothing will suit him but to see it put
into execution at once. | have re-