A -
.6 A
THE OMAHA SUNDAY BEr: JULY 4, 1 IPSO.
CAPPER AD MEN
FIND CROPS GOOD
IN TOUROF VEST
Wheat Yield Surpassed Expec
tations While Bankers Are
Optimistic, Kansas Mo
torists Say.
i
. Heartily enthusiastic about Ne
hratlca and the state's crop prospect,
a score of dusty travelers, members
of the second Capper "see" party,
drove up to the Fontenelle hotel
yesterday faternoon, several hours I
behind their schedule.
Their arrival was delayed by an
overhauling given their cars at Lin
coln Friday night and yesterday
morning. Because of the late hour
v hen they reached the cjty a pro
posed tour of industrial districts
was abandoned. Included in the
party were representatives of Chi
cago advertising agencies, the
guests of the Capper publications.
H. O. Alderman, of the LeRoy A.
Kling Co., declared that wherever
he asked, farmers, merchants and
country bankers told him that they
were optimistic for a better money
situation as soon as the crops be
in moving.
Wheat Crop is Larger
"All along our route the crops
looked fine," Mr. Alderman ex
plained. "Around Manhattan, Kan.,
and at Beatrice, I found that wheat
is showing five bushels more to the
acre than was txpected. The coun
ty agent of Gagt county said he had
never seen such large heads as are
on this year's crop. Everyone be
lieves that money will loosen up
when the crop reaches the markets."
The system followed on the first
"see" trip, rules on this one, B. P.
BartletK manager of -to. nrr'"
lion of the Capper interests, said.
The agency men take their timi:
about investigating conditions, and
interview merchants, bankers and
farmers wherever they find them.
All have manifested surprise at act
ual conditions in the states tra
versed, he declared. The use of
modern convenience?1., including
electric lights and appliances, and
the demand for nationally adver
tised goods, has been a surprise
to most of the "trippers."
Tour Iowa Today.
The party was entertained at din
ner at the Carter Lake flub in the
Aivinmn Thar nlfinnfH leaving
this morning for Fremont, and from
there expected to diive to Sioux
City, stopping at several towns on
the way. Tomorrow they will re
turn to Council Bluffs, via the
Iowa side of the Missouri river, and
continue on into Missouri.
Those in the narty are C. L. Hel
fnch, Erwin Wasey r Co.; C. J.
Eastman, Williams & Cunningham;
L. E. Bullis, Lord & Thomas; L. H.
Brownholtz, Thomas M. Bowers
Co.; Philip J. Sodercren, Mitchell
&. Faust; Elbert E. Rogers, Rogers
& Smith; Fred P. Thurrrfan, Brandt
A A .... . f T AJnme
U V 1 1 II i H (5 .Igllljr , 1,1. . luuiiui
Frank Seaman Co.; V. C. Breyts
praak, Breytspraak Co.; H. O. Al
derman, LeRoy A. Kline; Co.: L. W.
partrige. The Fred M. Randall
Co.; j. R. Liebcr. The Van Pattern
Agency; George Dougherty, Critch
field & Co.; J. L. Jones, H. W.
Heegstra. Inc.; Fred A. Slateu. Ben
sen, Gamble & Slatcn; P. R. Finlav,
Slack Advertising Agency; R. F.
Record, Albert Frank Co.; L. J.
Sholty, McKinney Agency, and
Stanley Clague, jr., Henri, Hurst &
McDonald.
Several representatives of the
Copper publications accompanied
them.
Keith County Crop Prospect
Fine, Says Keystone Marrt
Tes Silicon, a farmer anil stoc'.:
niser of Keystone, Neb., who (was al
visitor ?t the Omaha yards last
week with five loads of mixed stock,
,aid the prospect for all crops in
Keith county were the best he had
ever seen and that all indications
promise a wonderful wheat crop.
He sairL the alfalfa crop was the
heaviest in years and the first cutting
was far above the average. Accord
ing to Mr. Silason. the corn crop is
a lirtle backward in his section, but
that the recent warm weather and
occasional rains were bringing the
corn to the front in good shape.
Saunders County Wheat
Harvest Now in Full Swing
Wahoo, Neb.. July 3. (Special.)
The wheat harvest in Saunders coun
ty beean Fridav'and will practically
e cut by Monday. Farmers report
that the wheat has filled in good
shape and report indicate that the
hrgest average yield per acre that
Saunders county -ever produced will
he had this year. The recent rains
' have helped oats and corn; putting
the latter in excellent condition. The
vicld of potatoes also promises to be
Jjeavy.
.
Jollv, la.. Cattle Feeder
Reports Excellent Corn
Homer Meier, who came in from
Jolly. Ia., with a load of fat steers
for the live stock market Saturday,
said the prospects t'or a bumper corn
crop ni his section wcrqr best known
for vears.
"We have had plenty of moisture,
but not too-much," said Mr. Meier.
"'Fields are clean and of the best
color and growing fine. In my sec
tion there is an increase of about 5
per cent in acreage planted over last
season.
Friday th Hottest Day
Of Year; Mercury Is 101
Culbertson, Neb., was the hottest
town in the state yesterday, which
was the hottest day of the year.
The mercury climbed ' to 01 de
grees. '
Holdredge, Neb., was the second
hottest town, with the thermometer
reaching 100. Several other towns
recorded 98nd 99 degrees. Oma-
-ha's maximum temperature Was 96
at 4, o'clock yesterday.
Ord Entertains Neighbors.
Ord. Neb.. July 3. (Special.1)
The Ord Community club enter
tained a large number of fhe citizens
. from North Loup at an informal re
ception and party in the club rooms
iiere. . . . s.
Screech Owls Take
Town Injure Many
Girard, Kan., July 3. Screech
owls moved into Girard and al
most took possession of the town.
The birds assumed' a belligerent
attitude and numerous attacks
upon persons were reported.
With the coming of darkness
the owls went into action. Per
sons sitting on their porches in
the evening or walking on the
streets carried umbrellas for de
fense. Pearl Bond was hit on the back
of the head. Believing he had
been attacked by footpads, he
propped a suitcase and ran. He
found an owl was the assailant.
Mrs. J. W. Miley, wife of the
county superintendent of schools,
while in the Miley back yard was
struck on the forehe.td by one of
the feathered flock. George Duff,
a farmer, was knocked down. He
ran for cover. J. H. McCoy, a
jeweler, was attacked twice at
his home. -
Polish Refugees in
Freemont Explain
Horrors of Pograms
Fremont, Neb., July 3. (Special.)
After a diet of, war bread and wa
ter for the years of the war, Mrs.
Sarah Linkewiescz and her daugh
ters, Dora and ,Liba, who have ar
rived in Fremont from Poland, can
not eat the deli6acies common to
the American table. They had had
nc sugar for three years, no butter,
eggs nor meat, and they speak with
reverence of the Americans who sent
them, after the armistice, milk in
cms.
At the home of Mrs. Ar.:hie Ka
vich of Fremont, daughter of Mrs.
Linkewiescz, the- newccm-irs have
described the suffering of the war.
They assert that-the Poles pursued
a relentless pogrom against them
and other Jews, and that Germans
and Cossacks alike, during te war,
plundered the people of Poland.
They had concealed their silver
ware in a hole in the ground, and
they brought it with them to Fre
mont. Everything else was lost in
the war.
The cloud of bolshevism is hang
ing over Poland, according to these
pec pic, who say the government of
the republic is not yet firmly estab
lished. Norgaard Must Make Report
Today or Face Dismissal
Failure to make a report on al
leged assault on William Helger
son, 2908 Vinton street, at Central
police station Thursday morning,
resulted in the suspension from the
department by Chief 'of Police Eber
'stein last night of Police Chauff-ur
Russell Norgaard, appointed police
man nine months ago for bravery in
paving Mayor Smith's life in the
September riot.
Norgaard was given 24 hours last
night by the chief to give his re
port. He had not appeared at noon
today.
Wiley Refuses to Testify
At Traction Wage Hearing
J. Benjamin Wiley, business agent
for the street car mci's union in
Des Moines, yesterday refused to
appear as a witness at the wage hear
ing being conducted by the State
Railway commission in the federal
building. He said he hid been
brought here in the int-rest of the
union and had been instructed not to
testify at the hearing.
Wiley said men in Des Moines
had been granted a 3-eent increase,
but the company has been unabl : to
pay it as yet.
Saunders County to Honor
American Legion on July 4
Wahoo, Neb.. July 3. (Special.)
The American Legion are all lined
tip for the biggest celebration Mon
day that Wahoo ever held. There
will be a barbecue, fireworks, races,
bands, ball games, wrestling exhibi
tion by Stcckcr and others and
dancing. There will be something,
doing from the time the anvils an
nounce the break "of .day until the
dance breaks up the next morning.
All stores- and restaurants are to be
closed and all proceeds of the day
go to building a home for the Amer
ican Legion.
Macon Man Victor
In Race; Two Prizes
Macon. Mo., July 3. When W.
H. Stanfield made the race for re
election as city marshal he had a
double prize in sight. The most at
tractive was Mrs. Agnes A. Alex
ander,' young and comely widow,
who promised to change her name
to Stanfield if the marshal's race
was successful." Stanfield retained
his office by a large majority. The
widow made good her word.
To the Stockholders of the Skinnef
Company:
Packing
William T. Tilden Defeats
Patterson for Golf Title
Wimbledon, July 3 (By the. As
sociated Press). William T. Tilden
of Philadelphia won the British
Sawn tennis championship in singles
on the courts here today. Titdon !e
frated Gerald L. Patterson of Aus
tralia, the title holder, in the chal
lenge round.
Washington Appointments.
Washington. July 3 (Special Tele
gram.) Dr. J. M. Slhesher has been ap
pointed pension surgeon at Geneva, Neb.,
upon the recommendation of Senator
Uitrhcock.
The Pustorfire department has accepted
proposal of Anna J.. l.uJden to lease
nuarters for the postoffice at Osceola,
.'., for the term of 10 years.
Postmaster appointed: Thomas E.
Nickson, vice Jlr. K. 1". Mersch 'resinned,
Ottosen. Humnolt county. Iowa; Alfred
H. Meyer, vice M. K. Scott, removed.
Whitney, Perklna county, South Dakota.
Name Demonstration Agent.
Wahoo, Neb., July 3. (Special.)
Miss Alice E. Thompson of Minne
apolis has been selected home dem
onstration agent of Saunders county,
filling the vacancy caused by the
resignation of Mrs. Emma McDon
ald. Miss Thompson has spent sev
eral years in this line of work in
Minnesota and Iowa. y
Wahoo Editor Returns.
Wahoo. Neb., July f-f Special )
Will Pickett, editor of the Wahoo
Wasp. is home from his trip with
the National Editorial association
through the eastern states and east
ern Canada . '.
Omaha, Nebraska, July 3, 1920.
TO THE STOCKHOLDERS OF SKINNER PACKING COMPANY:
The Committee of Nine has again repeated the arguments which
they advocated at the meeting of June 26th and upon which, after a
full explanation and discussion thereof they were then overwhelmingly
defeated. N
They state clearly that they base their report "abiolutely on the
invettigation of the state of Nebraska." If they had read that report
they would have seen the following statement made at the very intro
duction by the Examiner: "It should be thoroughly understood that this
examination was not for the purpose of making a complete audit of the
affairs of the Company inasmuch as that would be almost impossible to
make in such short space of time as was covered by this examination
They would have also seen that that report stated that the Skinner Pack
ing Company. was absolutely solvent so by the Committees own confes
sion their report was based on .report which was based on an audit which
the Examiner at the very start admitted was "not a complete audit of the
affairs of the Company." And by their own confession they have urged
that this Company be put in the hands of Trustees, although it is abso
lutely solvent.
In fairness to the stockholders it should be known that the Skinner
Packing Company was not subject to examination by the Bureau of Se
curities, but that the records wer6 willingly ..thrown open to 'their Ex
aminer. It should also be known that this Examiner was not then and
is not now a regular employee of the Bureau of Securities. He was
. . .. V. . ... ii nii tt - i
nired especially tor tnis examination ana ne came irom imnois. ne is
not an accountant of national fame or reputation.
An examination of his report from start to finish will convince
any fair-minded person that he drew many conclusions which were un
warranted and which a careful ' investigation on his part would have
proved were misleading. , v
The Bureau of Securities and the Attorney General's office as well
as the Committee of Nine have been mislead by the inaccuracies of this
report. ' , ' " -
On motion to the Supreme Court of the State of Nebraska, permis
sion was granted by tht Court to employ' Arthur Young and Company,
Certified Public Accountants of Chicago, to examine the books for the
purpose of "submitting their report to the stockholders and also to
the Court." '
Arthur Young and Company are leading authorities with a world
wide reputation in accounting. They have accountants ,who have spent
months on the books of,the Skinner Packing Company and are entirely
familiar with these books. One'of the partners of the Chicago firm is at
present personally supervising the audit permitted by the State Supreme
Court.
I have submitted to him a series of questions which raise all of the
points raised by the Committee of Nine in their various reports and
statements as the same affect the Skinner Packing Company. His reply
shows that the special examination of the outside accountants called in
by the Stat is erroneous and has mislead the Committee of Nine as well
as many others.
I do not understand that the Attorney General is taking sides with
anyone or attempting to dictate or claiming he has the right to dictate
the internal policy of this company, and I am satisfied when he sees the
audit of Arthur Young and Company he will realize that the chief rea
son for the litigation which he started does not exist and that the chief
objects of the litigation have been accomplished.
The following clipping from the Nebraska State Journal of July
1st, 1920, would not indicate that the, Attorney General desires to de
stroy the Skinner Packing Company 6r intends to represent any fac
tion as a personal advocate of their particular plan for running the
company: ' , I
"The Attorney General's office has taken the position that it is not
and icannot be the legal representative of the stockholders or of any
group of them, and that it undertook these cases purely for the pur
pose of preserving the corporation from threatened disintegration
through lawsuits, they will not be dismissed until it is quite evident that
the test interests of the corporation have been conserved. The state
cannot and does not attempt to run any of the corporations, but it is
interested in seeing that the laws are obeyed. The attitude of
the Attorney General is not likely to be influenced by any petition of the
stockholders unless in the meantime the legal phases of the matter have
been arranged as he believes they should be." He is fairly well satis
fied with the status of affairs. The main object of the litigation has al
ready been accomplished."
In the foregoing article the Attorney General's office says that' they
believe the objects of tire litigation have been accomplished. Why then,
should any stockholders, minority or; majority, desire that this litigation
be continued? .The facts' are that before the litigation was ever started
its "objects had been accomplished;" for all readjustments of the busi
ness had been made on June 12th, 1920, while the first suit was filed June
15th, 1920, and the suit against the Packing Company on June 2-3d, 1920.
The Committee of Nine have just served me with notice that they
intend to intervene in this case. Evidently they fear the Attorney Gen
eral does not intend to pull their chestnuts out of the fire and does not
wish unnecessarily to force a sale of these properties which the Com
mittee of Nine seems determined to do.
The Committee of Nine's reference to Ben Holland's affidavit as
"positively false" is not borne out by the statements of Mr. J. W. Davis,
the Secretary of said Committee of Nine. Mr. Davis admitted to the
meeting in answer to Mr. Holland's statement which was made to the
Committee was going to ask for over $7,000.00 for their services. If
Ben Holland's affidavit does not state the facts, why does not the Com
mittee of Nine tell what are the facts if they are so anxious to explain
everything in full? ' ,
In' closing I wish to urge every stockholder to read the following
report of Arthur Young and Company because their report proves con
clusively that Paul F. Skinner and Lloyd M. Skinner have been terribly
maligned. The public and the stockholders have been led to believe that
Paul and Lloyd have enriched themselves at the expense of the Packing
Company, whereas the facts show conclusively that in return for twenty
two months' incessant labor, during which time they amassed a huge ag
gregation of-capital at a remarkably small cost, builded a magnificent
packing plant which is a great benefit and credit to Omaha and the stock
raisers of the tributary territory Paul and Lloyd received only their
salary and expenses, Paul receiving $15,290.00 and Lloyd receiving
$21,500.00 and the facts show that there is no watered stock in their
hands nor in the hands of anyone, and yet Paul and Lloyd have been
heaped with vituperation and condemnation instead of being rewarded
by the plaudits of the public as they deserved to be for the monumental
services -they have rendered to the stockholders, to the city and to the
surrounding territory, and I am prepared to show, and will show, if this
case ever comes to trial, that the Committee of Nine and many others
have been duped by a small coterie of men who are behind the scenes,
doing everything in their power to wreck the "plant so that it may eventu
ally come into their control.
I have been reluctant heretofore to "try my case in the newspapers,"
but believe that silence has now ceased to be virtue.
Yours truly,
WILLIAM RITCHIE, JR.
Omaha, Neb., July 2, 1920.
Mr. William Ritchie, Jr.,
Attorney for Skinner Packing Company,
Omaha, Nebraska.
Dear Sir: '
In accordance with your ii equest we have prepared answers to a
number of questions- which yau submitted to us in connection with a
report purported to have been issued by a "Committee of Nine" in so
far as said report dwells upon the.' handling of the affairs of the Skinner
Packing Company from the inception of its business to January 31st,
1920. For convenience, we quote your questions and directly thereafter
we make our reply.
QUESTION: The ''Committee of Nine" reports that the Promotion
accounts show the Skinner Packing Company expended a total of
$1,517,176.84 for Prosjtion, which is equal to 22' of the Outstand
ing Capital Stock. From your examination of the Books of the Skinner
Packing Company can you say whether or not the above statement is
correct, and will, you explain the matter clearly?
ANSWER: We have fotnd that the charges to Promotion Expen
ditures consist of Commission paid to Salesmen selling stock, Advertis
ing in connection with the sale of stock, Legal Fees in connection with
the organization of the Company. Office and Clerical Salaries, Office
Expenses, Postage, etc., all of which, in our opinion, are properly dis
tributablfe to Promotion Expenditures, but they were incurred not only
in furthering the saje of Capital Stock, but also in developing and pro
moting the Company. ' k
We show below a detailed analysis vf the Promotion Expenditures Distributable:
as called for on the books of the Skinner Packing Company, January
31st, 1920:
Advertising $ 71,673.77
Appraisals 341.97,.
Bank Exchanges, etc 1,024.55
Salesmen's Commissions 975,302.15
f Insurance 4,072.29
Legal Fees 22,036.67
License Fees, etc 874.94
Misc. Expenditures (unclassified) 314.63
Office Supplies, Stationery, etc 6.044.06
Postage 6,832.70
Rentals 4,035.11
Salaries 58,078.82-
Taxes 545.99
Telephone and Telegrams 2,102.08
Traveling Expenses 2,905.65
Advisory Board 509.17
Auditing 802.57
$1,166,497.12
The "Committee of Nine" in their report show Promotion Expen
ditures of $1,517,176.84, which is made up as follows:
Promotion Expenditures as shown above. ...... .$1,166,497.12
Expenditures, charged to P.' F. Skinner 176,781.89
Expenditures charged to L. M. Skinner 173,897.83
$1,517,176.84
We are of the opinion that Promotion Expenditures to be used in
arriving at the per cent of Capital Stock outstanding used for this
purpose should be $1,034,329.99 arrived at as follows:
Promotion Expenditures as shown above $1,166,497.12
from which are to be deducted the following items:
Interest earned on Securities taken in payment
for Capital, Stock, interest on Notes given for
Capital Stock and Discount received for prompt
payments of purchase invoices 272,602.09
To which is to be added certain items charged to'
the accounts of Paul F. Skinner and Lloyd M.
Skinner in error and which should have been
charged to Promotion Expenditures, as shown
in a later analysis of these two accounts
From P. F. Skinner Account. ,$71,290.00
.From L. M. Skinner Account.; 69,144.96
$ 893,895.03
140,434.96
$1,034,329.99
On January 31st, there was outstanding on the books of the Skin
ner Packing Company
8 Participating, Preferred Stock.' $7,023,200.00
Common Stock 41,400.00
to which is to be added the amount received on
Capital Stock sold above the "Par Value" and on
which commissions were paid 979,725.00
Making a total of $8,044,325.00
Received in payment of Capital Stock against
which the Promotion Expenditures are to be com
puted to obtain the per cent of these expenditures
to the total received in payment for Capital Stock.
To the foregoing $8,044,325.00
should be added the sale of stock which for one reason or another were
canceled and on which the salesmen received their commissions. These
accounts are riow being analyzed, but the analysis is not yet completed,
but taking the figures we nowhave the actual Promotion Costs show
to have been 12.85 on January 31st, 1920, which percentage will be
materially reduced when the Gross Sales have been thoroughly analyzed.
We have been unable to reconcile the figures upon which the "Com
mittee of Nine" in their report arrive at 22 of the Capital Stock
Outstanding as having been expended for promotion. We arriv at
19.88rfc, using the exact figures they have used, Viz: $7,640,600.00 of
Capital Stock Outstanding and $1,517,176.84 expended for promotion.
Hor your mtormation we will set forth below figures which show
that at June 30, 1920, the Promotion Expenditures amounted to 12.07
of the amount received for Capital Stock.
Total Capital Stock Outstanding June 30, 1920 .. $7,306,750.00
Premiums Received on Capital Stock 962,779.50
To Promotion Expense Cash Payments $15,290.00
Services of P. D. Askew 56,000.00
To Cost of Trademark (fixed assets) . .
To Capital Stock of the Skinner
Baking Company, held by the Skin
ner Packing Company
To Discount on Bonds to be dis
tributed To remain as a charge against P. F.
Skinner
$71,290.00
739.00
30,000.00
59,908.47
14,844.42
$176,781.89
From the above you will see that Paul F. Skinner only actuallj
received in Cash for his own use $15,290.00 and which amount waf
for salary and expenses from March, 1918, to January 31, 1920.
LLOYD M. SKINNER ACCOUNT
Cash payments s follows:
Nov. 21, 1918 $2,000.00
Dec. 24, 1918 1 1,000.00
Dec. 19, 1918.. 'j, 290.00
June 20, 1919 1,000.00 '
June 30, 1919 500.00 7
July 18, 1919.. v 500.00
Sept. 9, 1919..: 1,000.00
Septr 22, 1919 2,680.00
Oct. 1, 1919 1,167.00
Nov. 11, 1919 972.76
Nov. 11, 1919....:... 1,000.00
Dec. 18, 1919 1,000.00 , .,
Dec. 18, 1919 35.20
Other Charges as follows:
Dec. 22, 1919 One-half of total value
of Liberty Bonds given to P. D. Askew
for Services as Promotor
Dec. 19, 1919 For 300 Shares of Capi
tal Stock of the Skinner Baking
Company temporarily charged to this
account, but purchased for and be
longing to the Skinner Packing Com
pany Dec. 31, 1919 Interest on Notes given
by Lloyd M. Skinner for Capital Stock
"to be paid bv him
Jan. 10th to 17th, 1920 One-half of
loss suffered on account of discount
ing $1,696,000,000 of Liberty Bonds
to obtain funds for Completion of
Plants and to start operations
$ 13,144.96
- 56,000.00
30,000.00
14,844.42
59,908.45
$173,897.83
Promotion Expenditures to June
30, 1920 $1,180,812.12
Deduct Interest earned and Dis
counts taken 353,022.89
Add: To be transferred from
the nccounts of Lloyd M.
Skinner as previously shown . .
$8,269,529.50
857,789.23
140,434.96
Fromotion Expenditures as adjusted...' $ 998,224.19
The er cent of Promotion Expenditures to Capital Stock Outstand
ing at June 30, 1920, on the figures shown is 12.07, which will be ma
terially reduced when we shall have thoroughly analyzed the Gross Sales.
QUESTION: Reference is made to an Account called "Promoti on
Account BT" Have you analyzed this account and included it in the
Statement above rendered?
ANSWER: Yes. This account consists of the two accounts of
Paul F. Skinner and Lloyd M. Skinner already mentioned and $3,641.94
advances to Paul F. Skinner by the Macaroni Company. The Promotion
Charges included therein are:
Paul F. Skinner. Cash $15,290.00
Services of P. D. Askew 56,000.00 $71,290.00
Lloyd M. Skinner, Cash. . . 13.144.96
Services of P. D. Askew. . 56,000.00
69,144.96
$140,434.96
The Cash Payments to the Skinner Brothers mentioned above are
charged to Promotion in the absence of particulars as to the expenses
and services they cover.,
QUESTION: Do the r Promotion Expenditures and percentages
which you have outlined above include the Cash and Liberty Bonds paid
to Porter D. Askew?
ANSWER: . '
QUESTION: The "Committee of Nine" reports that the Tacking
Company Books show Personal Accounts in the name of Paul F. Skinner
and Lloyd M. Skinner, upon which they drew at will, that the total of
Paul F. Skinner's Account was $176,781:89 and Lloyd M. Skinner's
account totalled $173,897.83. and, that in addition to this, Lloyd M. Skin
ner received approximately $21, 720. 00 as President s salary up to Janu
ary 1, 1920.
Is this true? And is the inference that Paul F. Skinner has drawn
for himself from the Company $176,781.89 true? And is the statement
that Lloyd M. Skinner drew for himself $173,897.83 from the Company
true? And what cash did Paul F. Skinner and Lloyd M. Skinner actually
draw for their own use?
ANSWER: While it is true that the Books of the Skinner Packing
Company contain at January 31, 1920, accbunts of Paul F. Skinner and
Lloyd M.v Skinner as referred to in your question, the analysis of these
accounts develops that they contain the following eharges which were
put therein erroneouslyt After the analysis of eacTi account we show
to what accounts, in our opinion, they should have been charged, to
which they will lsfter be transferred. f
i
PAUL F. SK1XNER ACCOUNT
Cash Payments as follows: j
September 19, 1919, amount paid for
7 Months' Services and Company x
Expenses, March to September. ... $10,000.00
Dec. 18, 1919, Payment for Services. . . 5,290.00
Distributable :
To Promotion Expense Cash Pay
ments $13,144.96
Services of P. D. Askew 56,000.00 $ 69,144.96
,To Capital Stock of the Skinner Bak
ing Company," held by the Skinner
Packing Company 30,000.00
To Discount on Bonds to be dis
tributed 59,908.45
To remain as a charge against L. M.
Skinner 14,844.42
$173,897.83
We have found the payments to Lloyd M. Skinner as President's
salary to January 1, 1920, to be $21,500.00, instead of $21,720.00 as
stated in your question. There had been a payment of $220.00 to Lloyd
M. Skinner, which was later returned to ,the Company, but which was
included in salary paid in the report of the "Committee of Nine."
QUESTION: Were Paul F. Skinner and Lloyd M. Skinner charged
with the interest On the notes which they ga"ve for stock during the time
such notes were outstanding?
ANSWER: Yes they were charged with this interest and these
amounts were not credited back to them when the stock was turned
in and their notes canceled. The charges still remain against them as
showed on their accounts above analyzed.
QUESTION: Have Paul F. Skinner or Lloyd M. Skinner received
anything but their salaries and expenses for their supervision of the
sale of stock, the construction of the Plant and the General Manage
ment thereof?
ANSWER: No.
. QUESTION: The "Committee of Nine" r.ays that "In December,
1918, the Directors paid to the Stockholders out of the Treasury of the
Company $100,000.00 as Dividends."' Was there a Capital Surplus
equivalent to the sum paid in dividends on the date said dividend was
declared? If so, please explain. ,
ANSWER: The Books of the Skinner Packing Company show
that there was in Capital Surplus Account at December 31, 1918, $294
754.12 arrived at as follows: v '
Increase in Property Accounts duv-to appraisal
made in August, 1918 $291,249.35
Net Profit of the Produce Dep't to 12-31-18 3,504.77
$294,754.12
We cannot vouch as to the correctness of the Appraisal Figures.
QUESTION: The "Committee of Nine" charges that Paul F. and
Lloyd M. Skinner took $60,000.00 from the Packing Company to buy
Baking Company stock and that the Packing Company has nothing for
the $60,000.00 paid out. Is this so? , ' '
ANSWER: The Books of the Skinner Packing Company show
that there were made the following payments for 6 Preferred Stock
of the Skinner Baking Company:
October, 1918 1 $50,000.00
October, 1919 10,000.00
739.00
$15,290.00
June 5, 1919, cost of obtaining Trade Mark No.
6,791 :
Other charges as follows:
December 22, 1919, one-half of total value of Liberty
Bonds given to P. -D. Askew for Services as
Promoter 56,000.00
December 19, 1919, for 300 Shares of Capital Stock
of the Skinner Baking Company temporarily
charged toi this account, but purchased for and f
belonging to the Skinner Packing Company 30,000.00
December 31, 1919 Interest on Notes given by P. F.
Skinner for Capital Stock to be paid by him 14.844.42
January 10 to January 17. 1920. one-half of loss
suffered on account of discounting $1,696,000.00
of Liberty Bonds to obtain funds for completion
of plants and to start operations 59,908.47
. . $176,781.89
$60,000.00
The dividends on this stock for the year ending July 1, 191,
amounting to $3,000.00, were paid to the Skinner Packing Company.
The dividends on this stock for' the year July 1, 1920, have not yet been
received, but will be taken on the Books of the Skinner Packing Com
pany as soon as received. While the value of this stock was temporarily
charged to Paul F. and Lloyd M. Skinner, it has always been considered
the property of the Skinner Packing Company is now in the hands of
this Company and never was the property of Paul F. and Lloyd M.
Skinner.
QUESTION: The "Committee's" circular dated June 26, 1920,
makes numerous references to 167,300 shares of stock issued o Paul
F. and Lloyd M. Skinner in December, 1919. What can you say about
this?
ANSWER: The records of the Minutes of Meetings of the Board
of Directors of the Skinner Company show that 167,300 shares of . the
Capital Stock of the Skinner Company were to be issued to Paul F.
and Lloyd M. Skinner, which was done in January, 1920. The records
further show that on June 12, 1920, before any litigation was started,
and two weeks before the date of the Circular issued by the "Committee
of Nine," that the entire 167,300 shares and the right to vote the same
had been surrendered for cancellation to an agent for the Corporation
by Paul F. and Lloyd M. Skinner, which agent is holding the same and
will deliver the same to the Corporation when the court will permit.
QUESTION: Have you read the' report of the Bureau of Securi
ties to the Governor? Does it pretend to be a thorough analysis of the
Books of the Companies affected:
ANSWER: ies, we have examined this report of the Bureau of
Securities and find it does not purport to be and is not a thorough
analysis of the affairs of the Companyt This question can best be
answered by the report itself which reads as follows:
"This examination was instituted under date of May 3,
and was conducted in the city of Omaha and consisted primarily
of a check in a general way upon the accounts f the Company
and interviews held from time to time with
interested and disinterested parties in the city of Omaha, and
on this basis this report is rendered to your Excellency. It
should be thoroughly understood that this examination was not
for the purpose of making a complete audit of the affairs of
the Company, inasmuch as that would be almost impossible to
make in such short space of time as covered by this examina
tion." QUESTION: Is your examination a General Examination or are
you thoroughly analyzing each account?
The foregoing quotation from the report of the Bureau of Securi
ties to the Governor.
ANSWER: We arc thoroughly analyzing each account to deter
minte the question raised by the Attorney General in regard to Pro
motion Expense, etc. Our auditors are familiar with these Books be
cause this is the fifth auiit we have made of the Skinner Packing Com
pany's Books. Our accountants have at various times Spent months on
these Books. ' , '
The foregoing answers are subject to revision as to minor par
ticulars. Yours truly, ....
ARTHUR YOUNG & CO. .
-AdvejrtiBement. 1