The Waterbury Democrat., 1940-05-16

lips through R. F. Griggs was under fire with Corcoran saying that It's preparation was a tough job, com ,rable to making a spring hat look good in the fall.
 Boosting Of Good Will
 The boosting of the goodwill Of the cmpany from $l00,000 to $600,- 900 was picked on by the prosecutor, He pointed out that an auditing firm, c. H. Rankin Co, originally estimated good will at Sl00,0O0, but that the company finally consented to the larger figure when 1t was pointed out that this would make a far better picture for the public to see. It was better picture, but a wrong one, said Corcoran.
 The public was deceived by Mer- win and Phillips, Corcoran charged and the public was "milked", be- cause, he explained the good will oi the company later went down to Sl This, he said, Is proof enough of the original deception.
 Way To Get Money
 Back in 1927, he said, McKessons in Connecticut only had $270,00 ir its till and money was needed badly This was provided, he said, through the sale of rights by Phillips ant Merwin which brought in $300,000
 Corcoran claimed that fraud wa committed in the sale of stock ir McKessons, Ltd, and that George Dietrich had testified that tho Limited was formed because McKes. sons in Connecticut needed money ofter the merger with uirard Com. pany, Costcr was handicapped with out money, said Corcoran, so he turned to Phillips and Merwin ano in one year they had voted three is. sues of stock for him.
 The formation of the Canadian branch was described by Corcorar as well as activities of Phillips ane Merwin in this same connection. Il was termed the act of wrapping ur new package.
 Returning directly to his attack on Phillips the prosecutor said that the Waterbury broker in all his talking and use of fine English on the witness stand and in his read ing of all the long letters that were offered in evidence never was able to explain away one word "ges- ture,' Merwin couldn't do It, either said Corcoran.
 One of Gestures
 A gesture" went to a Sl ,000, ,00C corporation in one month, the prosecutor said, while Phillips, Mer- win, and other directors worked under pressure to get the issue on the market before a decline could set in. The sale of the stock said the U. s. Attorney, was landslide
 Turning directly to the members of the jury, he said, stocks don't sell themselves, ladies and gentle men, The evidence is that the pros- pectus written by Phillips was used In the sale of this stock. All during this trial Phillips has been trying to get away from this prospectus. But like flNaper 1t sticks to his fingers, He spent hours trying to explain about 1t, but he didn't suc- ceed very well. The stock was sold on representations of the prospectus and if 1t was sold, then fraud exists"
 Sold In Conn. Valley
 Corcoran also told the jury that 1t was important to note that much Of the stock was sold throughout the Connecticut Valley, as well as in the larger cities of the state. He said there was only ono way to look at the prospectus and Shat was the way investors regarded it. They would interpret it literally and If 1t mentioned manufacturing by the Canadian plant would believe this, the prosecutor claimed.
 From 1927 to 1888, when the crash came, Corcoran charged, there was no earnest effort made to carry out the original plan and start manu- featuring in Canada. He said the public was not the only one deceived by Phillips and Merwin, but that their own associates were taken in.
 He ridiculed the fact that a mil- lion dollar corporation was merely selling a few crude drugs, yet its directors could talk about spending $25 900 to build factory in Canada, but wouldn't actually do 1t. He pointed out that dividends from Mo- Kesson, Ltd. kept flowing all the time to satisfy the unsuspecting stockholders.