Lavish Drafts; large sums of money withdrawn from Kalbfleisch's firm, Brookfield owed $60,000

LAVISH DRAFTS.

On the Resources of the Kalbfleisch Firm.

One Member Drawn Over a Hundred Thousand Dollars in Four Months - He Only Knows That $20,000 was Invested In the Electric lighting Company.

A meeting of the creditors of the Martin Kalbfleisch's Sons was held yesterday afternoon. About fifty prominent bankers, lawyers and merchants of New York and Brooklyn were present. It is the duty of the assignee to convert the assets into money and divide the receipts among the creditors. The meeting was called for the purpose of deciding whether this course should be pursued or whether the business operations be continued until the debts are paid. Mr. J. Gates, of the firm of F.F. Potte & Co., of New York, was elected chairman and D.H. Wardwell secretary. The receiver, William Brookfield, was present with his council, Charles R. Alexander, of New York. Mr. Brookfield is a creditor to the amount of $60,000. He was called upon for a financial statement of the condition of the Bushwick Works which he read. A representative of the Park National Bank then introduced a resolution providing that a committee of five be appointed by the Chair to look into the financial condition of the firm, devise a plan of settlement and report at a subsequent meeting. Considerable discussion followed and the resolution was finally amended to read "five creditors" instead of "five persons." The chairman was naming the committee when a banker interrupted him with the objection that it should be appointed by the creditors. Mr. Gates said it made no difference to him, but so long as the duty of appointing had been imposed upon him he would name the committee and if the selections did not suit the meeting other names could be substituted. The following gentlemen were chosen, with the presiding officer of the meeting as chairman ex-officio in compliance with the resolution: W.L. Preston, of the Fulton National Bank, Mr. Gantz, of Gantz, Jones & Co., chemical importers; W.M. Peters, of W. M. Peters & Co. Mr. Armour objected to serving, fearing that a gentlemen named Locke, from Buffalo, would also be a member of the committee. Subsequently, when Mr. Locke was nominated, he declined, saying that he would not serve on a committee with Mr. Armour, as they would be sure to lock horns. The discussion of the firms affairs was then commenced. Mr. Locke, who was present in the interest of Buffalo banks, which he had already taken care to protect with mortgages, was of the opinion that the property was very valuable. It ought to be kept together, and no part of the productive property sold under any consideration. The business, he said, was originally and fundamentally sound and lucrative, but it had been conducted with gross carelessness. If prudently managed now every cent of the indebtedness could be paid. He described the attempt which was made to make a settlement on the trust plan, paying so much now and the balance in a few years from the profits --a plan which would have been adopted but for the stubbornness of a miserly small percentage of the creditors. He, Locke, thought the liabilities should be divided and the merchandise debts, amounting to $92,000, separated from the others, and that the banks should grant an extension. He suggested that the unproductive property should be sold. This would render possible the payment of one quarter of the indebtedness. He referred to the Acetate Co. and the Baltimore Iron Co. as debtors. These companies borrowed money on the endorsement of the Kalbfleisch Sons, and had not done business for two years.

The firm of Kimball & Company owed considerable. As to their ability to pay it was as good as a chattel mortgage on a flock of pigeons. There were $450,000 worth of bad debts and no prospect of collecting any of them. As to the mode of settlement to be adopted, the Buffalo Chemical Works could earn 15 per cent. of the capital stock, beside paying the mortgage on it. The Bushwick Works were making from $50,000 to $60,000 a year and could be made to yield much more. The duties of the receiver were to convert the assets into money and settle with the creditors according to the means at his disposal. But if the creditors allowed the property to be sold now it would go at a mere song, the resources would be wasted and they might whistle for there money.

At this point Mr. Locke was interrupted by a banker with a question as to what had become of all the money represented by the indebtedness.

Mr. Locke replied that no one could tell. He had investigated the matter thoroughly, and knew less when he got through then when he had started. He could get no satisfactory account of the expenditures of the firm from anybody. None of the three Kalbfleisch brothers knew anything about it. He found that one partner had drawn $105,000 in four months, and when asked about it did not know whether he had drawn that amount or not, and could not say what he did with it. He remembered only that he had put $20,000 in the electric light business in Brooklyn, but as for the rest he could say nothing. Mr. Locke said he could not make head or tail of the situation. He believed that $60,000 had been lost in a baking powder enterprise. There was no doubt that a certain individual had realized at least $50,000 or $60,000 out of the firm and the rest had probably gone to waste in factories and personal expenditures of members of the firm. It now remained with the creditors to see that all interest on mortgages and all taxes were stopped and surplus expenses cut off.

A creditor desired to ask what Mr. Locke knew about the assignment.

Mr. Locke replied that he had left the city on October 6, thinking everything was in fair condition. He knew nothing about the assignment until he read it in the paper, neither did the receiver till it was executed.

Mr. Locke was then put through a cross examination as to the part he took in protecting the Buffalo banks he represented.

Chairman Gates was in favor of preserving the productive property, granting an extension of two years and in case that time were insufficient a longer period. As chairman of the committee appointed to devise a plan of settlement his views will have much weight. The meeting lasted two hours and a half. No list of creditors, such as it is customary to furnish at such meeting, was present and the Kalbfleisch Sons were not legally represented. All the creditors seemed to be at sea except Mr. Locke.