Then, going on down, the 10 little Reed companies, the Midwest Refining Co. was organized and did business, and this was divided up in proportion as the stock was held by Schuyler, Shoup, Hopkins, and Reed. The Reed companies simply existed really as a unit. Then these companies were all merged for convenience, as to Mr. Schuyler's testimony, which is elsewhere, to keep them together into the Wyoming Associated Oil Corporation. The SECRETARY. What became of the tenth Reed company? Mr. BOUTON. They took some patented lands. Then, after the incorporation of this company, its stock was owned by another corporation not mentioned, which was to have 48 per cent, and 52 per cent went to the Salt Creek Producers Association. It represented the consolidation of some other titles, and prior to this time had purchased Schuyler's and Shoup's interests. The SECRETARY. Then the Salt Creek Producers conveyed to the Wyoming? Mr. BOUTON. No; the Salt Creek Producers owns 52 per cent of the stock of the Wyoming Associated. The SECRETARY. That still exists? Mr. BOUTON. No; it was converted into the Mountain Producers' Association, which he mentioned, that took over from the Salt Creek Producers' Association this 52 per cent of the stock; their purpose was to get money, of course. The SECRETARY. That was to enable their people to share in the profits? Mr. BOUTON. Possibly. That brings the situation right down to this situation, and I think that clearly points out that they did not know these workings, Just a point as to the construction placed on that contract by the parties. They assumed that William G. Henshaw had a three-fourths interest, and whatever Fitzhugh had, three-fourths of that belonged to Henshaw. It would be necessary to make tender; it may be that they offered tender, but that is not shown. It was shown in the Schoonmaker contract, so-called, for which the Midwest Oil Co. had paid $52,000 to William M. Fitzhugh, William G. Henshaw claimed an allowance under the contract of July 24, 1913, on account of the Schoonmaker contract. As a result of those proceedings the Midwest deposited something like $23,000 for two months, May and June, 1913; afterwards this company taking 19 per cent as a result of the California-Wyoming Oil suit. It settled this for $39,000, and it was held that William G. Henshaw had a full threefourths interest and that the company was entitled to a full three-fourths of that contract. They speak of Henshaw representing 12 or 14 different people and really acting as their agent because they had to get eight names to get locations. That construction also is not correct. It won't stand. You take a 160-acre tract and you use eight names, and you use William and Mary E. Fitzhugh to constitute two-eighths, or which is equal to one-fourth of the names, but to get that construction you must read this not as a contract of 120-acre tracts, because the associates were different and on different locations. Further, it so happens that one location was made for 120 acres by six names; then, if the contract is applied as to one-fourth and three-fourths, William G. Henshaw had 90 acres and Fitzhugh 30 acres; which clearly made it illegal as to that location. The same thing would apply to the 80-acre and the 160-acre tracts. These 17 persons more or less could not be parties to the contracts; there could be only the two parties in interest there. But in the case where they located the southeast of 11 as being a patented 40-acre tract, they used six names, and if you divide one-fourth and three-fourths, it would make it illegal. Mr. TALLMAN. Did they use both Fitzhughs on that? Mr. BOUTON. Yes; and I think Tyler and F. W. Henshaw. Senator WALSH. Just what was the nature, generally speaking, of what transpired there? Mr. FINNEY. Mr. Bell, having joined in the report or adverse, whatever you might call it, with Mr. Bouton, was asked to present his views orally, and he did so at considerable length. Senator WALSH. Does the stenographic report give his argument? Mr. FINNEY. Yes, sir. He summarizes his contentions-if I may read it; it consists of only 8 or 10 lines. Senator WALSH. If you please. Mr. FINNEY (reading): In my opinion, those applications should be rejected: First, because we are of the opinion that the applicants are guilty of fraud, had reasonable grounds to know fraud, and that they have not in all respects acted honestly and in good faith. I need not call your attention to that portion of section 18, because you are undoubtedly familiar with it. We are further of the opinion that they are seeking to acquire an excess acreage than-a greater acreage in the field than is permitted under the statute. Now, that summarizes his contentions, and he presented quite an argument, citing cases and reading from his report and the contracts between Henshaw and Fitzhugh. He was asked a number of questions by Secretary Payne, who was presiding at the hearing. Then, Mr. Roberts, representing the oil companies, was given an opportunity to reply, which he did. He was also asked a good many questions by the secretary. I think, perhaps, some of the others asked some questions. Mr. Talman asked some. And then Mr. Bouton was called upon to close the argument, presumably on behalf of Bell and Bouton, and he did so, and his statement occupies several pages. Senator WALSH. Well, what conferences, if any, were held then, Mr. Finney? Mr. FINNEY. The next thing in order, there were certain other papers filed by the oil companies. On January 7 they filed what they called a "Memorandum on devolution of stock of the Midwest Oil Co." It was a three-page paper on that subject, and it was placed with the record by the department. Senator WALSH. What is the nature of that paper? Mr. FINNEY. Well, it is sort of a summary of the history of the Midwest Oil Co. and a statement of respective stock holdings, and that sort of thing. Senator WALSH. Was it made under affidavit? Mr. FINNEY. No, sir; it just seems to be a memorandum statement. Senator WALSH. We had better put that in the record, likewise. Mr. FINNEY. Yes, sir. (Said memorandum on devolution of stock of the Midwest Oil Co. is as follows:) MEMORANDUM ON DEVOLUTION OF STOCK OF THE MIDWEST OIL CO. Company organized February 2, 1911. Original issue, 100 per cent to Reed Investment Co. in consideration of property. Reed Investment Co. immediately donated back 10 per cent to treasury, leaving February 3, 1911: Midwest Oil Co__. Reed Investment Co__ Per cent 10 90 Between February 3, 1911, and June 3, 1911, Midwest Oil Co. sold all its treasury stock to scattered French investors for cash, and Reed Investment Co. sold part of its stock for cash and donated certain other shares as a bonus to purchasers of treasury stock, so that situation became, June 3, 1911: Scattered among purchasers__ Reed Investment Co____ Per cent 33% 66% Between June 3, 1911, and December 26, 1911, Reed Investment Co. made additional sales and donations for purpose of financing Midwest Oil Co., so that situation became, December 26, 1911: December 26, 1911, Reed Investment Co. distributed its Midwest stock to its shareholders, resulting, December 27, 1911: Between December, 1911, and present time, the number of shareholders in Midwest Oil Co. has increased to about 985 persons, and sales, gifts, and transfers have changed above list as follows: (1) Stock freely traded in on open market (the greater part of this has ultimately been acquired by Salt Creek Producers Association, a corporation having over 3,000 shareholders): Listed to scattered purchasers above_-_ Listed to Wyoming Security Co. above, but since sold in open Per cent 38.84 1.42 Listed to V. Z. Reed above, but since sold from time to time in 15. 7 Listed to O. H. Shoup above, but since scattered among cash 10.04 Listed to B. H. Hopkins above, but since sold for cash____ (2) Stock used as gifts by V. Z. Reed in his lifetime in favor of his wife and children and now held by these beneficiaries___ (3) Stock now held by estate of V. Z. Reed, being residue of that listed to V. Z. Reed in table above_. (4) Stock still held by Wyoming Securities Co.' Total_ 5.58 2.50 14.53 7.42 3.97 100 Neither Shoup, Hopkins, Schuyler, Warren, Fisher, Johnson, or Wilson now hold any part of the stock listed to them in the above table for December 27, 1911, nor do any of them hold any interest in Salt Creek Producers Association derived from such stock. The scattered stock has been so freely traded in and subject to so many transfers that it is doubtful if any of the present shareholders, excepting only Wyoming Securities Co. were on the stock list at the time of the earlier table. Mr. FINNEY. Then there was also filed-there is no date on it- a certified list of the preferred and common stockholders of the Midwest Oil Co. and a copy of the articles of incorporation. Senator WALSH. A copy of the articles would not be of any particular concern to us, I imagine, but the list of stockholders should go in. Can you furnish us copies of those, Mr. Finney? Issued capital stock of Wyoming Securities Co. was held, 48 per cent by various citizens of France from 1910 to about 1913, and 52 per cent by V. Z. Reed during same period. In 1913, 1914, and 1915 Mr. Reed purchased all stock held by these French shareholders, and now 100 per cent of stock of Wyoming Securities Co. is held by Estate of V. Z. Reed. Mr. FINNEY. Yes, sir; I can do that. Senator WALSH. I will ask you to do so. (The list of stockholders is as follows:) CERTIFIED LIST OF PREFERRED AND COMMON STOCKHOLDERS AND CERTIFIED COPY OF ARTICLES OF INCORPORATION OF THE MIDWEST OIL CO. DENVER, COLO., July 22, 1920. I, J. L. Warren, secretary of the Midwest Oil Co., hereby certify that the following is a true and correct list of all the stockholders of the Midwest Oil Co., as of July 22, 1920. L. L. Titken, 617 First National Bank Building, Denver, Colo.. 200 4.00 14515 Duncan O. Alguire, pay to the Equitable Trust Co. of New York for ac count of above, New York, N. Ý. 14529 May Bell, Utahville, Pa..... Mary E. Bergin, 206 Chamber of Commerce Building, Denver, Colo.. 50 1.00 250 5.00 Brookville Title & Trust Co., trustee of estate of Laura Kutz, Brook- Brookville Title & Trust Co., trustee of estate of Charles Kutz, Brook- H. H. Brooks, trustee, care of J. L. Warren, secretary, 617 First National 659, 975 13, 199. 50 167 3.34 Cyrus V. Dart, Federal System of Bakeries, of America, (Inc.), Daven- 100 2.00 50 1.00 .4548 14549 14731 Theodore G. Daub, 647 Smithfield Street, Pittsburgh, Pa.. 14732 Paul Thierry Delanoue, care of Midwest Oil Co., 4 Boulevard Male- Ella S. Denison, pay dividend to the Colorado National Bank, Denver, R. E. Dunlap & Son, 509 Mercantile Library Building, Cincinnati, Ohio.. 200 4.00 15 .30 14556 Albert J. Egger, pay to the Equitable Trust Co., of New York, for account Margaret Pearl Elkins, 942 Potter Park, care of Schermerhorn Apart- PREFERRED STOCKHOLDERS-Continued. No. 14560 Name and address The Equitable Trust Co. of New York, trustee for Verner Z. Reed and 14561 14563 14564 The Equitable Trust Co. of New York, trustee for Margery Verner Reed under deed of trust dated Jan. 2, 1917, New York, N. Y 14562 The Equitable Trust Co. of New York, trustee for Verner Z. Reed, jr., under deed of trust dated Jan. 2, 1917, New York, N. Y. The Equitable Trust Co. of New York, trustee for Joseph Verner Reed under deed of trust dated Jan. 2, 1917, New York, N. Ÿ. Edmond P. Eurietta, Damar, Kans. 14566 14567 James C. Fairbairn, 32 South Virginia Avenue, Altantic City, N. J. Eugene Fellner, care of Mr. Ashton Carr, State Street Trust Co., Boston, 14569 14570 Thaddeus Firth, jr., 285 Park Place, Brooklyn, N. Y. John B. Flanigan, 5421 Coral Street., Pittsburgh Pa. 100 2.00 14571 Miss Elizabeth Forbes, 423 Duquesne Way, Pittsburgh, Pa. 14572 Harold S. Fowler, pay to the Equitable Trust Co. of New York for account Alfred C. George, care of W. F. Catling, National Biscuit Co., Jackson- G. Levant Hackley, care of Foreman Bros. Banking Co., 30 North La Salle Miss Sophie Hanau, 550 West One hundred and forty-fourth Street, New Daniel Hoctor, 15 King George Apartments, 2152 Park Avenue, Montreal Edward T. Jones, 23 Pastorius Street, Germantown, Philadelphia, Pa. 100 2.00 543 10.86 14601 14602 14603 E. T. Jones, 23 Pastorius Street, Germantown, Philadelphia, Pa... 14613 Fred W. Leidecker, 158 Brady Street, Butler, Pa.. 14604 Carolyn S. Kamp, 106 Delaware Street, Caspar, Wyo.. 14606 John L. Kempf, pay to The Equitable Trust Co. of New York for account of above, New York, N. Y. 14608 14609 14610 14611 A. M. Kidder & Co., 5 Nassau Street, New York, N. Y. Forest W. Kingsbury, 617 Wabash Avenue, Evansville, Ind.. 14612 Mrs. Janet Espy Kutz, Brookville, Pa.. 14617 Harry G. Liebhardt, post-office box 1524, Denver, Colo.. William F. Linn, care of Robert Glendinning & Co., 400 Chestnut Street, Miss Henrietta Livermore, 37 East Thrity-eighth Street, New York, 14622 Evan Lloyd, 1077 Blackadore Avenue, Pittsburgh, Pa.. |