HARDWOOD RECORD 



35 



paid from the profits realized from tlie plantation, whereas, in tact, 

 there were no profits realized from the plantation,, and the eight per 

 rent per annum paid upon the said stock has, since the beginning of the 

 company, been paid from the moneys realized from the subscribers to 

 the stock of the corporation ; and the corporation has paid out of such 

 money, up to Feb. 21), 1912, the sum of $1,500,000, representing that the 

 Slim consisted of profits resultius; from the business of the said cor- 

 poration. 



"That William H. .\rrastrong, Jr., son of the president of the defend- 

 iint corporation, was appointed general agent of the same for the pur- 

 pose of acting as general manager of the defendant corporation, attend- 

 ing to the management of the offices of the company, and also as general 

 sales agent for the capital stock of the corporation. And by a con- 

 tract made at the time of the organization of the company the com- 

 pany agreed to pay to him the sum of $50 on each share of the capital 

 stock which might be subscribed for, with the understanding that the 

 moneys should be u.sed for the payment of salaries and olflce expenses. 



$1,000,000 in Salaries 



"William H. Armstrong, Jr., assigned the contract to Charles M. Mc- 

 Mahon, secretary and treasurer of the company, and since the organi- 

 zation of the corporation there has been paid under this contract either 

 to Armstrong or McMahon. the sum of .?1.0iiii.iiOO. which has been used 

 in part for the payment of salaries to officers of the company, although 

 the public and stockholders, by repeated advertisements and notices, have 

 been informed that no salaries whatsoever were drawn by any officers 

 of the corporation. 



"Your orators fuither aver that the corporation, through its officers 

 and directors, has failed and refused to inform the public and stocK- 

 holders of the essential covenants of the contracts aforesaid, between 

 the corporation and Markley & Jliller ; the contract between the cor- 

 poration and William H. Armstrong, Jr.. and the contract or assignment 

 between William H. Armstrong, Jr., and Charles M. McMahon, and have 

 never disclosed the same either to the public or to their stockholders. 

 and your orators' averments in reference to the contracts are made by 

 reason of oral statements secured from the defendants or some of 

 them within the last two months. 



Illegal Stock-Selling Contract 

 "That the Philadelphia Real Estate and Securities Company, a cor- 

 poration organized under the laws of the state of Delaware, having its 

 offices and principal place of business in the Drexel building, by its 

 officers and directors did enter into unlawful agreement and conspiracy 

 with certain officers and directors of the International Lumber and 

 Development Company, who are included herein as parties defendant, 

 whereby it was agreed l>etween tbem that certain shares of the cai.)ital 



stock of the International Lumber and Development Company should 

 be sold by the Philadelphia Ueal Estate and Securities Company to the 

 prejudice and harm of the stockholders of the International company and 

 for the sole benefit and advantage of themselves. 



"And in pursuance of said unlawful agreement, the Philadelphia Real 

 Estate and Securities Company, by its officers and directors, or either 

 or both of them, did obtain certain certificates of the shares of the 

 1 apital stock of the International Lumber and Development Company 

 from Charles M. McMahon. one of the defendants herein, on which shares 

 large sums of money had been paid by subscribers who subsequently de- 

 faulted In the payment of tjeir installments, and the profits derived 

 from the resale of stock were appropriated to the use and benefit of the 

 Philadelphia Real Estate and Securities Company and Charles M. Mc- 

 Mahon and others acting under theui. 



Scheme to Defraud 



"Your orators further aver that the International Lumber and De- 

 velopment Company was organized by Markley and Miller as a scheme 

 to defraud the public ; in the first place, by unloading on the corpora- 

 tion the aforesaid land at the price of .$600,000, which land had been 

 originally sold by the said Markley for $180,000, and that the corpora- 

 tion thus organized for a fraudulent purpose has been, since its In- 

 ception, carried on fraudulently and for the purpose of obtaining money 

 from the public and stockholders by false representation, and its officers 

 linve paid dividends to the amount of $1..")00.000 from the moneys which 

 haw h,en paid into the corporation by the stockholders. 



"And the corporation has been mismanaged in the fact that it has 

 advertisi'd extensively and notified its stockholders that no salaries were 

 being paid to its olTlcers, whereas, in truth and in fact, enormous sums 

 (■f money as hereinbefore recited, have been subtracted from the moneys 

 paid in. and have been paid over to the officers and directors, agents and 

 attorneys illegally." 



The bill concludes by asking that a receiver be appointed and that 

 the present officers of the International Lumber and Development Com- 

 pany be enjoined from paying out any more money and be required to 

 lurn over all funds and assets of the company to the receiver and to 

 render a full and complete account of all money already expended by 

 them. A. L Wanamaker. general counsel for the company, was in court 

 when the petition was presented. Judge McPherson instructed the law- 

 .vers to agree on a day for a hearing, and the attorneys fixed March 5. 



The four stockholders named in the petition set forth that they are 

 taking this action in behalf of themselves and all other stockholders 

 who may join with them. The stockholders represented are said to have 

 paid about $23,000 into the International Lumber and Development Com- 

 pany. 



ia 5CBc»;;OTarB;ia:;it!K«»TO:t;cattJtm;)ii^^ 



To Save Adirondack Forests 



A determined campaign for Adirondack forest conservation was 

 inaugurated last summer by the Camp Pire Club of America, through 

 its game protection committee. This organization is located in 

 New York City and nimibers among its members men prominent in 

 forestry work and in public and business life. With the idea of 

 getting accurate data on conditions in the Adirondacks, Gifford 

 Pinchot and Overton Price, formerly United States foresters, and 

 several state officials, made a trip into that region. The committee 

 reported on about 3,300,000 acres of land, of which the state owns 

 1,500,000 acres. The remainder is owned by various private and 

 corporate interests. The report of the investigators maintains that 

 practically all the land is useless for anything but tree growing, and 

 points out that the tree growth in this district renders so many 

 valuable services that no similar forest area in the United States is 

 of such high value to so many people. 



In analyzing the Adirondack situation, Gifford Pinchot in his 

 report suggested as the most fundamentally important remedies that 

 additional fire wardens, rangers and lookout stations be provided; 

 that the state control and regulate lumbering on private lands and 

 that there be a constitutional amendment permitting the manage- 

 ment of state forests in accordance with the principles of scientific 

 forestry. 



The principal work before the Camp Pire Club at present is the 

 securing of the passage of the Eoosevelt-Jones bill, in New York 

 state legislature, which contains many valuable clauses and embodies 

 most of the suggestions in the report. A radical movement toward 

 methods of conservation is seen in section 88 of the bill, which pro- 

 hibits the cutting of trees on private lands, below specific sizes, does 



away with clean cutting and provides that certain seed trees be left. 



The report includes the statement that one-quarter of the whole 

 area of the twelve counties in the Adirondacks, investigated, has been 

 burned over, and states that the first duty of the state toward these 

 woods is to protect them from fire. It further outlines specifically 

 liow the state can go about providing for absolute fire protection. 



The question of replanting comes in for no little discussion in the 

 report. Ex-Forester Pinchot claims the Adirondack forests contain 

 120,000 acres of fire denuded timber lands upon which planting is 

 absolutely imperative. 



The feasibility of applied forestry in the Adirondacks is borne out, 

 according to the report, by the results of work done by ex-Porester 

 Pinchot and the present chief forester, Henry S. Graves, in the soft- 

 wood logging operations in the Adirondacks. On two tracts in this 

 section each tree to be cut was marked, and as a rule sound spruce 

 trees below ten inches were left standing. Seed trees were also left, 

 and simple rules were promulgated to prevent waste and injury to 

 young growth. 



The strongest clause of the report is a recommendation by Mr. 

 Pinchot of the passage of the bill requiring lumbermen inside the 

 Adirondack reserve to carry out such a degree of practical forestry 

 on their timber lands as wOl reduce the damage by fire to the lowest 

 practicable point, and secure the perpetuation of the forests, the 

 plan of work to be approved and its execution supervised by the 

 Conservation Commission through the superintendent of state forests. 

 The state should prepare cutting plans for lumbermen, and should 

 give every possible assistance, increasing if necessary the present 

 force of trained foresters. 



