The New York herald., 1921-08-18
Big MEN ACCUSED
OF FALSE PRETENCE
MSTOCK LAND DEAL
Bankers Say They Bought
81, 100000 in Shares Of
Doubtful Value.
UNFOLD VAST SCHEME
j. O. Armour. E. j. Berwind,
A. III. Van Pelt, M. c. Keith
and Others Mentioned.
HOLDINGS IN PARAGUAY
Areas Large as States Claimed
by International Products
Corporation.
UNFOLD VAST SCHEME
HOLDINGS IN PARAGUAY

The granting OF permission yester-
day by Supreme Court Justice O'Malley
to serve papers by publication on Ger
mon F. Sulzberger of Stamford, Conn.
disclosed a suit for 81, 100000 in which
some of the countrys leading business
men are involved as defendants. These
men are alleged to have induced the
plaintiffs, Richardson, Hill & Co., in
vestment bankers. to purchase ST.
100000 worth of stock in the Interna-
tional Products Corporation under
false pretences.
The corporation, according to the
complaint, was alleged to own or con-
troll thousands of square miles and
millions of acres in Paraguay, reputed
to comprise the finest cattle ranges
in the world" on which 100000 head
Of cattle were to wax fat into beef.
What parts of the boundless pampas
were not fit for pasturage were rank
with 100000 tons of quebracho wood,
which would furnish material to tan
all the hides the company's own pack
ing plant could turn out, and leave a
lot over. The project already had
earned 100000 in 1919 and its ex-
pected profits for 1920 were to be 81
10000, the papers state.
But. according to the complaint. these
pictures that the big business men set
before the bankers to induce them to
c.1n ,,,.I draw
deliberately TO get the plaintiffs to pur-
chase the stock and resell 1t to their
clients and the public at large.
Defendants All Prominent.
The defenderts. all directors, who are
accused of making these representations.
are J. Ogden Armour. the late Theodore
N. Vail. Edward J. Berwind. Rodney d.
Chipp, Arthur H Van Pelt. Thomas W.
Streeter, George j. Baldwin. George II.
Olney, Joseph T. stevens, Philip W.
Henry, Miner c. Keith. Percival Far
quhar. william M. Baldwin and Germon
+. Sulzberger. Mr.. Armour. the COM
plant aclsne wedges. has since resigned
his directorate in the International Prod
ucts CORPORATION. but 1t is alleged his
interests are still looked after by Mr.
Van Pelt as agent. In fact. Mr.. Vail
having died April 16. 1920, his executors
are named among the defendants.
"Al the individual defendants were
generally reputcd to be and were be-
lioved by the plaintiffs to be men OF
large pecuniary responsibility and their
connection in the promotion OF the de-
fendant corporation and the sale OF its
stock and their presence upon the board
Of directors were intended to induce the
public. and did induce the plaintiffs. to
give full credence and reliance upon any
statements or representations made by
them" the complaint states.
Some OF the statements alleged to have
been made by the individual defendants
and alleged to be false, were as follows. !.
That the American International Cor
noration-the corporation that built Hog
Island-had bought si.3o0,o00 worth OF
the defendant corporations bonds; I; that
this sum had been used for proper cor
porate purposes or the international
Products Corporation that this detend.
ant corporation had invested sl,2oo.Voo
OF its funds In common stock OF tne
Central Products Company.
R,cb CattIe Lands Claimed.
That the defendant corporation had
acquired upwards Of 100000 acres OF
land In the "chaco' of Paraguay. party
in ouebracho forests. which experts nan
found 20 contain about 100000 tons
az good. merchantable quebracho wood,
the balance being in good pastures FOR
the breeding and fattening or cattle. Inat
the defendant corporation owned oo,ooo
acres OF fattening pastures on the cas-,
yl.sar from
the 900. 900 acre tract. That In addl-
lion TO these the defendant corporation
owned through the Paraguay River basin
. 375 square miles OF rich. well watered
lands and uuebracho forests. where clI-
matte conditions were nearly perfect Tor
the breeding and fattening OF beef
cattle"
THAT the defendant corporation had on
ia property at Puerto Pinasco fully
eouipped auebracho extract plant with
capacity then Of $4,000 tons year. ana
that funds we're already provided to
double the capacity In 1920. and that In
n short period OF FIVE weeks operation,
ending August z. 1919, IL han mace
s1s,01s net profit.
That the area OF cattle land controlled
hv ,he corporation was sufficient to
craze 700, 900 cattle and was 30 rich
a could easily support one animal to
each Ave acres. That $4,000 marketable
cattle and $4,000 breeding animals We're
already on the land that there were IN
wards OF $500 Operatives" or. as they
used 10 he called, cowboys" TO handle
the ranchinR, and that there was avail
able In the National City Bank Of
Buenos Aires credit OF 100000 with
which to purchase more cattle.
That the defendant owned packing
plant at Asuncion. which started opera
tions In January, 1919, killing sixty head
OF cattle the first week and overcoming
all operating difficulties. until by late
summer II was killing 1000 head a
week.
The individual defendants represented
that the corporation had the right to
draw In n form OF revolving credit to
the extent of s950.000 at any one time
on either the cattle business or the
quebracho business, and that anyway
the corporation was completely financed
for all its normal requirements, the COM
plaint continues.
The reason advanced by the directors
Continued on Eleventh Pa1e.