Press enter after choosing selection

Grave Charges Against A. W. Hamilton

Grave Charges Against A. W. Hamilton image
Parent Issue
Public Domain
OCR Text

On Monday last, the Aun Arbor Water Company was put in the hands of a receiver. The reason for this action was the discovery that the company owed $27,000 floating indebtedness more than had been been shown by the reports of A. W. Hamilton while superintendent and president. The petition under which the receivership was granted, set forth that Hamilton had by his peculations, fraudulent acts and mismanagement bankrupted and wrecked the company. The petition makes very ugly charges against Mr. Hamilton, whose downfall is most complete. Our eaders about the county will remember him as the republican canidate for senator in this district ast fa 11, when he was run as the usiness men's candidate. The alegations of the bül show what kind of a business man he was. Dr. A. Kent Hale, the principal tockholder in the company, was on Vtonday afternoon appointed by udge Kinne receiver of the comany. The petition for the apjointment of a receiver was made y Herman Hutzel, who is both a tockholder and creditor of the cotnlany. The petition sets forth the ollowing state of facts: The Ann Arbor Water Company was organized April 9, 1885, with a capital stock of 50,000, which was afterwards increased to $100,000, all of which has been subscribed for excepting $2,500. The companyat resent supplies 1,400 householders vith water. The gross income of the corporation is over $24,000 per annum, while the expense of conductng the business economically wil] not exceed the sum of $6,000 per annum. The Mcompany issued first mortgage bonds for 150,000, October 1, 1885, payable. in twenty years, with interest at six per cent. In May, 1891, the company authorized an issue of $40,000 second mortgage bonds, of which 12,000 have been sold at par, and the balance of these last bonds are unsold, but pledged as colla'teral security. The total amount expended by the corporation in the purchase of real estáte, construction of reservoirs and buildings, the purchase of engines, pumps, machinery, and the laying of pipes since its organization, is $260,000. Hamilton was elected one of the directors on the organization of the company, and on May 3, 1887, was elected president, and was appointed superintendent, and that in fact he has had the entire control and management of the affairs of the corporation since its organization until about Aujust 20, 1893. The bill charges that during this time A. W. Hamilton "has deliberately and intentionally injured and defraudad said Corporation," in the following particulars: "That in the year 1886 said Hamilton purchased from William Birnie and Charles L. Goodhue, two of the original incorporators of said corporation, some $12,000 of stock, and that $6,000 of the money paid for the said stock was obtained by the said Hamilton upon promissory notes signed by him as president of said Corporation, a.nd which he resented to be the notes and obligations of said Corporation, which notes he negotiated to third parties whose names are unknown to your orator, and thereby obtained from them the S6,ooo in. money paid for said stock to Goodhue and Birnie. Said notes have been from time to time renewed and the indebtedness shifted and changed, but no part of it has ever been paid and discharged." "That since the year 1886 said Hamilton has purchased the stock of the said Corporation amounting to about $10,000, as near as your orator can ascertain from the books of said Corporation, and your orator charges that said Hamilton did not use a single dollar of his own money in making such purchases, but that all the money used by him for that purpose was obtained upon promissory notes signed by him as president of said Corporation, and represented by him to be coporation indebtedness; that he paid for the last mentioned stock purchased by him about Sio, 000, and that no part of said Sio,ooo, purporting to be corporation indebtedness, has been paid and that it now constitutes a part of the floating indebtedness of said corporation. " "That falsely pretending that such stock belonged to himself, said Hamilton in 1889 and 1890 issued to himself stock dividends to the amount of 6,800." "That in addition to said sums of S6,ooo and $10,000, said Hamilton, at divers times between May 3, 1887, and September 1, 1893, nas lently negotiated promissory notes signed by him as president of said Corporation and represented by him to be Corporation paper and has ronverted to his own use the entire proceeds of the same amounting in the aggregate to over $10,000 and that the aggregate of the indebtedness of said Hamilton to said corporation through said fraudulent transactions amounted on September 1, 1893 to over $27,000." The making of these notes was concealed from the directors and in January last in his official report he reported that the floating indebtedness of the corporation was $23,339,24 when it was over $50,000. All of the stock thus obtained by Hamilton has been hypothecated to the banks and private persons to secure his private indebtedness to the amount of about $15,000. The bill further goes on to charge Hamilton with hypothecating $5,500 of the second mortgage bonds of the company to secure the payment of his own indebtedness without the consent or knowledge of the directors and continúes with the following stinging charge: "That the said Hamilton has unlawfully, in addition to the sums above mentioned, embezzled and appropriated to his own use over $2,400 of the money of said corporation as appears from a statement in writing made by said Hamilton to the directors of said corporation." Hamilton is also charged with crediting up people indebted to the water company with the amounts he owed them without accounting to the corporation and the bill winds up the charges as follows: "That said Hamilton has, in addition to the several fraudulent acts above specified, kept the books of the corporation since he was president and superintendent in such a manner that it is now exceedingly difficult if not impossible to ascertain the true amounts received and expended in its behalf ; that he has allowed the machinery, pumps, and engines to get out of repair and has provided the city of Ann Arbor and its inhabitants with such an inadequate supply of water that he has seriouslv iniured the corporation; that he has incurred unnecessary debts and obligations on behalf of the Corporation and failed to meet promptly debts incurred for material and running expenses whereby he has greatly injured the credit of the Corporation, in short that said Hamilton has by reason of his fraudulent acts, peculatious and mismanagement bankrupted and wrecked the said Corporation, so that the capital stock of said corporation which was supposed to be worth par, and in some cases has been sold ata premium and now would be worth par had it not been for the said frauds, peculations and mismanagement of said Hamilton, has no market valué." The franchises real estáte and personal property are valued at $300,000 and the bonded indebtedness is placed at $162,000 and the floating indebtedness at upwards of $50,000. The bill of complaint is drawn bv John F. Lawrence, with Thompson, Harriman & Thompson of counsel. %


Ann Arbor Argus
Old News