Milford chronicle., 1923-07-27
SUBSIDIARIES
ALLOWED FUNDS
DOlIings Co. Affairs Held To Be In
Hopeless Confusion" " Postpone
Action Or. .iReceivership.


tion on the petition of certain sharehold
ers OF the r. L. Dollings Company
Pennsylvania to have the company plac
ed in the hands of receivers. The court
however, issued a preliminary injunctio
restraining the officers of the compan
from conducting any business or hand
Inns Lie DUOhs, papers, rUCU4us o. an
oeher property. AIe DolIinss CUInpan
cVAluuctS AL investment banking Duslnes
wan U4nEvs az 44AL WaIuuL SLleeL.
LHe court declsion was taken afte
more LiIetu LMO nUutS nau Ueen CUnsu,tte,
Dy MlLneSseS III uescrIDIng the Iransac
tons "a LLe Olucers OI The UOIInsS OOni
pdiiISS VI ONO, Indiana ana RennSyIVa.
ma ana the International NoLe ana mort.
gage Company III pyramloIng the stock.
OLhlle IOur CUrpUIaLIOnS, Oh uOuDnng anC
SOHleIIiiles QutluruplIng the capltanzaLlor
o. SInan lnuusLrla4 corporations IN Wnlcf
tney nau obtained an interest ana o
pouring thousands Oh dOIlarS out OF the
treasures Oh Inc various major Dolhngs
Companies INTO the cOLLerS OIL suDslularlt.s
IN Oruer that the latter might pay dIvI-
0ends.
funds were in the various Dcllings
Companies as the result Oh the prOceeus
Oh saies OF preferred stock, $5,UUU,UUU ot
Wnlch alone was put out by the Pennsyl-
wanna company.
al the conclusion OF the hearing, Judge
Olchlnson SAID that, whIle there seemed
10 De no escape from the appointment OF
ANSSAhNAg Tic 4GCG4fGIS lOH LnG ONO
OolhhSS Company ana that OIL 1nulana, as
Wei as the international Note COMPANY
all three OF Whlcn were placed III the
hands Ot receivers by the Common Pleas
Court, OF Columbus, o., tTlday, as Well
as the subsidiary companies OF the DOLL
lngs Company Oh pennsylvania, should be
noLlted Oh the contemplated acUlOn.
hugh Huntingdon an attorney OF Col
umDus, o., representing the shareholders
oI the International Note and MORTGAGE
COMPANY, When owns al OF Ihe common
STOCK Oh the Ii. l.. Dolllngs Companies OF
ONO, Pennsylvania and Indiana. outlined
tine ratlucaJOnS OI the tour COMPANIES
The courtroom was Wei hued with
shareholders ana attorneys OIL various
OolIlnss Companies, many of the stock
hoioerS being women, when Mont Leakey,
formerly OF Columbus, o., but now reSlu-
ing IN this city, took the stanu ana SAID
the DolnngS company OF Pennsylvania
had advanced money to subsidiaries IN
tins state to pay dividends to their stock
holders. Mr.. Leakey succeeded George u.
Porter, one-tIme director OF Pubhe Sale
" here, as Vlce-preSldent and treasurer
Oh the DoIhngs Company OF Pennsylvania
March Is.
Following Mr.. Leakey on the stand were
a number OF officers OF various subsidiary
companies, who Ielt no obligation 10 re-
pay the loans Unless their companies
earned sufficient profits to declare divi-
dends.
MI. Huntingdon said the Dollings Com
pany OF Ohio had taken over the Ameri- |
can Motor Truck Company for $5OO,OO0 |
and Immediately increased the capital to |
ABOUT S2,0OO.0OO, stock in the company
being sold.
When the three Dollings companies
ran out OF money to pay dividends to |
their own subsidiary companies share
holders he continued, the international |
Note and Mortgage Company was organ
lied, in 1920. 1t lent-money to the Doll
ings Companies in Pennsylvania and In
diana, and they, in turn, lent to their
subsidiaries"
Mr.. Huntingdon said the International
company sold S10,OO0,O00 in stock, the
greater part Of the proceeds of which
eventually reached the subsidiaries for
dividends to their shareholders. ''The
whole thing is in hopeless confusion" the
attorney added.
Thomas Raeburn White, who, with
Councilman Francis F. Burch, represent
ed the petitioning shareholders of the
Pennsylvania corporation, told the Court
a receiver was necessary primarily be-
cause the officers were mismanaging the F.
corporation; that the business here is in
confusion as result of the Ohio receiV-
ership and because the company is un-
able to meet it's obligations.
Mr.. White then called Mr.. Porter to the
stand and asked him to describe the con-
nection between the r. L. DolliugS Com
pany of Pennsylvania and the American
Bronze Company, of Berwyn, Pa. Henry
Smith, assistant secretary of the Bronze
COMPANY said Mr.. Porter had resigned
as vice president of the latter company.
All of the stock of the bronze company
was sold some time ago, MIR. Leakey, the
next witness, said, on commission basis
of Is to 20 per cent. He said that not all !
of the companies had earned dividends
since the Dollings company obtained an !
Interest in them, but that the dividends
were paid through funds furnished by the I
Dollings company.
He Stated that the Dollings company
carries the dividend notes given by sup
sidiary companies as assets, but that the
underlying companies did not carry the e
loans on their books as liabilities be {
cause in every case the agreement was
hat the underlying companies were not II
1bIiged to repay the loans unless their
earnings were sufficient to declare actuaI u
iiVidenda" VI
A balance sheet produced by Mr.: Leakey " "
showed the DollingS Company OF Pennsyl. -
7ania had current liabilities of S594,O0O
md assets of $4,000 cash and cert1h- ~ ~
ate of deposit for $61,00O. He stated M
he company at this time, because the II
sales activity has been destroyed since u
he receivership in Ohio ana there mas y.
cen no chance for a readJustmenI. is is
E. r. Whitney, president OF the Com ~
1ercial Truck Company, another Dollings Y
ubsidiary, said the latter company had III
urchased an interest in the truck con- % ss
ern when it's capital was 100000. After "a
reorganization, S1,750,000 first preferred q
tock, S250,000 second preferred STOCK ana er s
ommon stock OF no par value We're IS %
1ed according to Mr.. Whitney who sald
he company had not earned dividends.
Ie described the financial condition OF
ne company as fundamentally sound,
ut that it did not carry the funds for
ividends advanced by the Dollings COM
any as liability. W;
E. L. Usner, formerly connected with M
ne service department of the Dollings WI
of Ohio, and now president of
le McCambridge Company, of this city, er
lid the company had not earned a divi- gr
end since he became connected with it,
December, 1921, but that it had paid Jo
vidends with money obtained from the
ollings company. We
''Is the McCambridge Company solvent
insolvent?" Mr.. White asked. Hs
'That is a very difficult question to tol
nswer," the witness replied I'VE are rel
aving meeting of our creditors this
'ternoon." Later, the creditors appoint P.
a committee of six to act on a request clo
the company for years extension.
G. Willard Frame, cashier Of the Amer ter
an Bronze Company, said it had not MI
.rned dividends since 1920, but had paid
vidends on $4800 of outstanding cap att
II stock on advances from the Dollings ]
mpany He said the funds for dividends the
ere only to be repaid if earned.
what is the condition OF your COM ed
Lny?" Mr.. White asked. far
1--WE have no difficulty whatever with
editors" replied Mr. Frame. are
William Jay Turner, counsel for the !
ollings Company of Pennsylvania, said qui