lateral Gold Certificates of the former company therefor, had been holders of shares of stock of some of the companies prior to the inauguration of the plan which was subsequently consummated of transferring them to Asphalt Company of America. In the case of some of the companies, however, some of the vendors who were connected with the organization of Asphalt Company of America as promoters, purchased the whole or some. part of the shares which they exchanged for Collateral Gold Certificates on the above terms, after they, with others, had determined upon such organization and either while it was in process of organization or after it was actually incorporated. The essential purpose of this report is to show to the Court the facts which have come to the Receiver's knowledge as to those purchases, and to recommend action thereon. The organization of Asphalt Company of America appears to have been under consideration as early as March 6, 1899, and to have been entered upon very shortly thereafter. At that time. the following persons appear to have been holders of record of shares of stock of some of the corporations which were subsequently combined in the manner above stated, to about the following amounts: Some of the above named parties then acquired shares of stock of other companies subsequently turned into the combination, and they also acquired more shares of stock of some of the companies in which they already had interests. Some of the shares of stock so acquired were then transferred to Asphalt Company of America, when incorporated, at prices payable in Collateral Gold Certificates in excess of the prices at which they were respectively obtained by the purchasers, and the Receiver believes that further investigation will show that all of said shares were transferred by the said purchasers to Asphalt Company of America at a profit. So far as the Receiver knows, no disclosure to Asphalt Company of America was made by the persons who so transferred their shares of stock to it of the profits received by them. All of the above named parties, it is believed, were beneficially interested in the acquisition of some of said shares, and in their transfer to Asphalt Company of America. The facts in detail for the consideration of the Court follow: As to United Asphalt Company. Amzi L. Barber, Francis V. Greene and George W. Elkins each transferred to Asphalt Company of America 13,325 shares of stock of this company, aggregating 39,975 shares. Amzi L. Barber and George W. Elkins each received therefor $1,223,300, and Francis V. Greene received $1,223,400, in Collateral Gold Certificates of Asphalt Company of America, the said three parties receiving as a whole $3,670,000 of said certificates. At the time of said transfers United Asphalt Company was the holder, either in its corporate name, or by its representatives, of practically the entire capital stock of four corporations known as Columbia Construction Company, of New York; Trinidad Bituminous Asphalt Company, of New Jersey; Standard Asphalt Company, of New Jersey, and Rock Creek Natural Asphalt Company of Kansas. The shares of capital stock of these corporations constituted its entire assets. The evidence in the possession of the Receiver points to the fact that these shares of stock were bought by or under the direction of Amzi L. Barber, Francis V. Greene and George W. Elkins, with money or obligations furnished, or procured, by them to be furnished as follows: For the stock of Columbia Construction Company Trinidad Bituminous Asphalt Company Rock Creek Natural Asphalt Company $250,000 150,000 200,000 18,000 $618,000 Said purchases were made between March 21 and August 4, 1899. In the meantime United Asphalt Company had been organized as a holding company, and on July 12, 1899, 13,325 shares of its capital stock were issued to Amzi L. Barber, Francis V. Greene and George W. Elkins each, making 39,975 shares in the aggregate, issued to them out of a total capital stock of 40,000 shares. The above 39,975 shares were subsequently, on July 15, 1899, transferred to Asphalt Company of America for $3,670,000 of its Collateral Gold Certificates. The first sales of the Temporary Certificates standing for said Collateral Gold Certificates were in August, 1899, in the neighborhood of 90 per cent of par. Taking the value of the Collateral Gold Certificates at 97 per cent of par, the highest price at which said certificates sold, the profit each of the said three parties to said transaction was about $980,601, and to all of them together was about $2,941,803. Taking the value of the said certificates at 89 per cent of par, which was their lowest market price in August, 1899, the profit to each of said parties was about $888,853.50, and to all of them together was about $2,666,560.50. As to Warren-Scharf Asphalt Paving Company. Amzi L. Barber, Francis V. Greene and George W. Elkins each transferred to Asphalt Company of America 3164 shares (George W. Elkins transferring 3165 shares) of stock of Warren-Scharf Asphalt Paving Company, aggregating 9493 shares out of a total capital stock of 9500 shares. They each received therefor $759,360 (George W. Elkins receiving $759,600) in Collateral Gold Certificates. The said three persons received as a whole $2,278,320 par of said certificates. The said three persons had previously purchased from the then owners the said shares of stock at an outlay to them of about $1,500,000, and the said shares were transferred into their names on July 27, 1899. The transfers of said shares by them to Asphalt Company of America were made on July 31, 1899, and the above mentioned temporary certificates of said company were issued to them therefor. Taking the value of the Collateral Gold Certificates at 97 per cent of par, the profit to each of the said three parties to said transaction was about $236,579, and to all of them together was $709,970. Taking the market value of the certificates at 891 per cent of par, the profit to each of the said parties was about $179,627.20, and to all of them together about $539,096. From certain papers in the possession of Receiver it would appear that the moneys necessary to purchase said shares of stock from the preceding holders were contributed by the following parties in the following proportions, and the Receiver believes that distribution of Collateral Gold Certificates was made to said parties in proportion to their contribution to purchase money as follows, and that they shared the profits proportionately: As to The New Trinidad Lake Asphalt Company, Limited. Shortly after the organization of Asphalt Company of America was projected, the Board of Directors of Barber Asphalt Company, which company owned 1718 shares of the capital stock of The New Trinidad Lake Asphalt Company, Limited, caused said shares to be offered for sale to its stockholders. This action was taken pursuant to the authorization of its Executive Committee, acting as a Board of Directors, on March 15, 1899, and was approved by the Board on March 29, 1899, the said Board of Directors being composed at the time of the following persons: J. J. Albright, Amzi L. Barber, Francis V. Greene, Edmund Hayes, C. K. Robinson, George D. Widener, George W. Elkins, E. Burgess Warren, and P. W. Henry. 1638 of the said shares of stock of The New Trinidad Lake Asphalt Company, Limited, were thereupon bought by the stockholders of Barber Asphalt Paving Company at the limit fixed by the Executive Committee in its resolution for their sale, to wit, $48.50 per share. 1515 of the said shares so bought were purchased and paid for by the following persons who were also Directors of Barber Asphalt Paving Company at the rate of $48.50 per share, to wit: After said purchases of said shares of stock at $48.50 per share, they were transferred to Asphalt Company of America at the valuation of $100 per share and Collateral Gold Certificates were received in exchange therefor to the amount in the aggregate at par of $151.500. The Receiver believes it can be established that the said parties shared in the profits of said purchases and sales in proportion to their said holdings. Taking the Collateral Gold Certificates at 97 per cent of par, the profit to said parties from the said purchases and transfers |