Omaha daily bee., 1922-03-02
81, 900, 600 Potash Firm Floated "Shoestring,"
Manager of Plant Testfes at Promoters Trial

How tie Sl,0Oo.o00 Berg Potash
corporation is alleged TO have =
foaled on a shoestFing Pf''
A. L. KFeiss Of jack Nlls,s,
former general manager "
a MeFFiman, Neb.. aud ,,sness
Tor the government. IN the trial
Of William 4. MeWhofter. Charles
Wohlberg, w, g. chipley and Jacob
Masse IN federal court yesterday,
"MeWhorteF told me he didn't
know where 10 get any money 10
make the FIRST payment on S2S,000
Tor leases on potash lakes, but Wohl-
berg said he thought he could get il
from Chipley or Masse. not yet
brought into the concern" said
kreiss.
Stock Offered for Sale.
One OF the first acts when the
company organized May 81. 1918,
was 10 authorize the sale oi 200
shares OF stock, par value 500 per
share, for so cents on the dollar, be-
fore June 10, in order TO have little
cash on hand. he testified.
Important exhibits were introduced
today by A. w. Lane, prosecuting
for the government.
Among them are minutes OF d.
rectors' meetings which, the govern
ment expects to prove, were never
held. A half dozen OF them are
dated May 81, at various hours, such
as 10 a. m.. p. ni.. and 5 p. III.
Copies OF an agreement for tem-
porary pooling OF directors stock,
expected TO figure III later testimony.
and OF a contract by which kreiss
was TO assign back TO McWhorter
100000 out OF 100000 put on the
books 10 Kreiss' credit, also were III
troduced as exhibits.
Stock Deal Described.
A letter from Charles L. pundy
to Kreiss, covering the latter trans
action, including 100000 more stock
to +. w. La Fleische and +. V. II.
Collins, and leaving cnly $4,000 for
Kreiss' share, asks Kreiss to sign all
enclosed contract to this effect.
When Kreiss demurred because his
stock was not sent to him, Dundy
wrote he would send it if you want
it." Kreiss testified he never signed
the document.
McWhortcr first demanded $780,
900 in stock as his share OF the pro-
motion scheme, but Kreiss objected
10 his having more than S2O00OO, it
was testified.
"I considered the blue sky commits
sion's ruling OF 20 per cent for a
81 100000 capitalization TO be legal
commission, though / knew at the
time that the company did not conf
ply otherwise with the blue sky law"
kreiss admitted.
Subscriptions Asked.
Kreiss recalled a meeting OF
prominent citizens at Merriman,
Neb., June IL, 1918, where McWhor-
ter, Wohlberg aud Kreiss made
speeches TO the townspeople about
the potential wealth in nearby lakes
and asked them to subscribe $4,000
in stock Il the pant was built there.
A banker, Comiskey, pledged $IO,-
900, but others demurred.
"Then McWhorter told them he
wouldn't insist on the $75,000 sub
scription," Kreiss said. "He said he
knew he could sell that much or
more to the townspeople on the
projects own merit. Three days |
later I began construction of $780,
900 plant at Merriman, by McWhor-
ter's orders"
This plant never was completed.
Witness Ill.
The total amount alleged to have
been obtained fraudulently by the |
quartet on trial is $4,000 instead of
$456,000, according to revised figures
announced by ]. c. Kinsler. United
States district attorney, yesterday.
Mrs. William Berg, widow Of the
late Berg from whose blacksmithing
supply house the stock promoters
took their name, and whom the gov
ernment expected to put on the stand
is i'll at the Colonial Kins-
Ter stated. Ii necessary. her deposit
ton will be taken in the sickroom,
he said, in order not to delay the |
trial. .--."@