Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-03-25
|Barrage Thrown Out
In Effort To Remove
United Stores Co. From
Danger, Says Official
CONTINUED from Page L.,

"o" AA opSAo .SAAO
state. all Of which are selling mer-
chandise at a price ten per cent above
the wholesale plus freight. according
to officials of the company.
"The organization now holds about
100000 worth Of notes Of its mem
bers, and other assets, including fur
niture. fixtures, etc.. total nearly
100000. Collectors sent out to real
ize on notes were paid two per cent Of
the cash they collected and paid their
travelling expenses out of their own
pockets. Later, when weather condi-
tons made travel difficult in the win
ter. their compensation was raised to
three per cent"
This is the first public statement
ever made Of the affairs of the Con-
sumers' United Stores company John
Hastings. in his testimony before the
blue sky commission. asserted the
company had resources Of $500, 900,
and quick assets Of %$1,250,000. If
there are "a stores established. a fact
which will surprise many people who
have followed the operations Of the
Townley chain store scheme, there
would, under the certificate buyers
agreement. be a maximum of 1915, 600
actually invested in stock, fixtures and
buildings. 1t. is specifically agreed be-
tween the certificate buyers and the
company that not more than $40, 900
OF h funds subscribed by any local
company shall be invested in,the store,
and that $1,000 of this amount shall
be used for promotion. The officials
quoted by the Courier-News indicate
that less than an average of 50, 900
has been invested in each of the "a
stores. and that the whole number
Of Observation-Disclosures Is 10000 instead
OF $4,000, as Hastings evidence would
tend to show.
Wholesalers Alarmed. =, y
The Courier-News quotes Consum-
ers' Store executives as stating that
these "a stores are doing SO much
business that they are cutting in on
the profits Of jobbers and wholesalers
who have as a result planned to raise
a $4,000 fund to fight the Consum-
preston that the action Of the blue
sky commission, composed entirely of
league members of the administra-
ton. is in. line with this campaign.
Arrangements are being made to
use the membership notes to finance
the stocking of the stores in other
lines Of merchandise" says The
Courier News. land in doing so direct
purchases will be made from the, fac
tories. In SO doing it severely threat
ems the high profits of the Twin City
jobbers and wholesalers"
Some Question Here,
So far as car be learned, the Con-
sumers stores have not given even To-
"a retailers in the town where these
stores have been established any very
keen competition. In a majority Of
instances the stores have not carried
a very extensive stock. In many
towns where companies were organ
lied almost a year ago., no stores have
yet been established.
The citizenship and management of
the. Consumers, company has been
frequently changed. Thej business has
been conducted privately, and for
months past has received little atten-
ton from the opposition. There has,
however, been much apparent dissat-
isfaction< within the ranks OF, certifi-
cate-holders. One instance of this wa
the meeting Of Consumers company
certi1cate-holdefs with Townley a
year ago in this city. where the prest-
dent Of the National NonpartiSan
league is reported to have informed
the men who had put up the money
that what became Of the big balance
not actually invested in stores was
none of their business.
President T0Wnley e not appear
to be in q position to sidestep re-
sponsibility. for the Consumers
scheme. Norbert O'Leary, his private
secretary, and H. l. Elliott, state
manager of the league, were among
the original incorporators. Hastings,
Brinton and other men whom Town.
ley has employed in similar schemes,
were until very recently actively
identified with this enterprise. Let
tiers are o n file from Townley in which
he directs. the organization Of stores.
Valley City Deal.
In the Valley City banking deal,
which will have another inning with
the blue sky commission this week,
the Courier-N News on behalf Of, the
league denies all responsibility, de
claring Hastings and Box were act
ing in their private capacity. There
is on record with the blue sky com
mission Hastings testimony to the
effect that he went to Valley City and
undertook the organization Of q
league bank there at the personal di.
rection of Mr.. Townley: that Mr.
Townley was cognizant Of the under
taking At a llstimes. and that he con.
ferred with Hastings on the matter
while the project was under way and
advised the retention Of so. per cent
OF the stock for the league.
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