Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-04-03
BANKERS ACCUSED
.OF S7O,O(O,OD0PLOT
AGAINST CONCERN
Chase National, A. H. Wig.
gin and Others Named
at Senate Hearing.
RECEIVERSHIP FORCED,
E. w. BACKUS CHARGES
Halsey, Stuart & Co. Named in
Alleged Effort to Control
Paper Company.

BY the Associated Press.
Edward w. Backus, former presi-
dent of the Minnesota & Ontario
Paper Co, told the Senate Banking
Committee today that number Of
banks headed by the Chase National
of New York conspired to consummate
S70,000,000 steal" of his concern.
Backus said a receivership of the
company was forced in 1881, though
it was solvent, by officials of the
Chase Bank, including Albert H. Wig
gin, and the First National Bank of
Boston.
He asked the committee to make a
thorough inquiry to protect thousands
of investors and workers in the COM
pany.
Schall Asks Hearing.
The Banking Committees stock
market investigating group was called
to hear Backus at the request of Sen
ator Schall, Republican, of Mime
sofa.
Backus submitted a long prepared
statement to support allegations pre-
viously filed with the committee of
financial racketeering" by the bank.
He said the trail of evil" not only
ran through the Chase and First Ma
tional Bank of Boston, but also
through Halsey. Stuart & Co.. Bond
& Goodwin, and the International
Paper g. Power Co.
Backus said he was assured in Feb
ruary, 1881, by Wiggin. then chair
man of the Governing Committee of
the Chase Bank, that a financing plan
in process would be carried through
and the Chase Bank would make
good" any detlcit.
Charges Duress to Bankers.
Later that month, he said, the bank
ers told him a receivership was the
only solution" He added he agreed
under duress" and was made re-
ceiver.
Backus told Of conference in the
Summer of 1881 with Wiggin, A. r
Graustein, president of the Interna-
tional Paper & Power Co., and NAL
colin Chase, at which he said it was
apparent that these interests were
determined to secure our properties
regardless of the methods necessary.
After a few months. Backus added
he was forced to resign as receiver
and was succeeded by r. H. M. Rob-
inson and G. T. Jaffray.
Under their management, he said,
there has been most deplorable
campaign of acknowledgement, eXtrav-
agance. waste and sacrifice of cash
and other assets" which already has
resulted in losses of sl2,000,0o0.
Robinson, throughout, he said, has
been supported by the 'so-called
Bondholders' Protective Committee,
which represented the bankers.
Explains Objective.
The objective of the bankers
Backus said. was to confiscate the
estate. conservatively valued at S75,'
100000 under normal condition. fol
$4,000, 000
UNLESS we can secure the sympa-
thetic interest and assistance of some
Federal tribunal, which has the power
to prevent the successful consuma-
ton of this diabolical STEAL" Backu;
added, "the innocent investors anc
other unprotected creditors will re-
ceive only a small fraction of theil
original investment; and the equity
of myself and minority stockholders
which has been valued at many mil
lions of dollars by the Internal Reve-
nue. Department in their valuation fol-
tax purposes, will be wiped out"
Federal Judge Molyneaux at Mime
apolis signed on the dotted line" for
the receivers, Backus said.
At the conclusion of the testimony
Chairman Fletcher recommended the
case be referred to the Senate COM
mittee investigating bankruptcy pro-
ceedings. The committee agreed.