The New York herald., 1922-05-16
HOOKING POOL CRASH
CAUSESFRAUD Sldf
Stockholders Ask Accounting
Of Coal and Iron Company
Affairs Decade Ago.
J. R. KEENE RAN CLIQUE
$6,000,000 Property Is Said to
Have Been Leased in Per-.
petuity for $780, 900. .sss

Another chapter in the litigation
growing out of the wrecking of the Cp-s
lumbus and Hooking Coal and Iron Conn
pany by the James r. Keene poolJdn
1910 was written in the Supreme Court
in Brooklyn yesterday when a group Of
stockholders brought suit for an ac-
counting. alleging misuse of funds by
the reorganization committee and the
voting trustees more than ten years ago.
The defendants are Alexander Gilbert,
Frank 3. Keech and Frank n. B. Close,
named as the reorganization COMMITTEES,
and Nicholas Biddle and Justin Dup.
Whiting. voting trustees. of t~
The plaintiffs in the present action
are James w. Murphy, William r.
Earle. A. n. Ridegeley and Alex c. Sas-
sen. Their suit is somewhat sinrlaifato
one brought in 1913 by Sidney S. Sclus-
Ter and other stockholders against BID
die, White and Close. They alleged that
after the Hooking pool had collapsed and
the company had been r-eorganized an
the Hooking Valley Products Company,
property valued at $6.000,000 was
leased In perpetuity for $1S5.000 to the
CHARTERS Oil Company, which took over
the company's 10000 acres of land in
Ohio and all its gas and oil equipment.
Similar to Old Allegations
Attorneys for neither side would as
cuss the suit filed yesterday. but It .ap-
pears to be continuation Of the action
brought in 1913, the allegations being
almost precisely similar. 1t is alleged
that the present plaintiffs and other
stockholders raised $4,000 to rehabili-
tate the company after the collapse%ot
the pool. which had been under the man
agemeat OF James r. Keene, who was
reported to have made profits of several
hundred thousand dollars The pool an
cidentally, caused the wrecking of tliree
big Wall Street brokerage houses and
created tremendous excitement in the
financial district ~
In the suit fied yesterday as insths
1913 litigation. it is alleged that the re-
organization committee, instead of re-
habiltating the company and proceeding
to earn dividends by operating it's coal
oil and gas properties created subsidiary
companies and elected as officers and ,di-
rectors men who were neither stockhoid-
ers In the Columbus and Hooking Conn
pany nor in the subsidiary companies.
In the 1913 suit it was alleged that
within week after this was done the
valuable oil and gas properties OF the
company were leased to the CHARTERS
Oil Company. Charges Of fraud were
made at that time with respect to the ac-
tions of Talfour p. Lynn, who while act
ing as one OF the trustees of the Hock-
ing Valley Products Company was al
legged to have been the paid attorney for
the oil company. He also was named
as the men who negotiated the lease.eo
Defendants to Make Denfals.
The members of the reorganization
committee and the voting trustees who
were named as defendants yesterday
denied the charges and said through
their attorneys that the stockholders Of
the Columbus and Hooking Company
surrendered their certificates to the
Hooking Valley Products Company. The
reorganization committee made its cac-
counting to the directors of The products
company and the account was approved
and the committee discharged. The de-
fense obtained from Justice Fawcett
yesterday an order for the PLAINTIFF to
reply TO the separate defenses of the
answer to the suit.
Prior to the litigation OF 1918, in June
of 1912 certain stockholders and bond
holders of the Hooking company sued
the same men who are nemed In yester-
days action. demanding an accounting
OF the affairs of the CHARTERS OIL Com
paf.y. and that the lease OF the Hooking
oil and gas lands TO this company be SET
aside a@ fraudulent. go4
The collapse of the Hooking pool in
1910 was the second huge financial
scheme OF James r. Keenc to 60 astray.
Two firms collapsed on the first day,
with liabilities of $4,000, 900. and another
went to the wall later. When the pool
took hold and employed Mr. Keene as
manager the stock was selling at 20, hut
IL was boosted TO better than. 81 within
a short time. When the resources of the
pool were exhausted Hooking stock
dropped rapidly and TO such depths tifaS
the failures followed. su