The other explanation advanced for the crisis in the company’s affairs came from Secretary William H. Arthur.
“In the panic last fall,” he declared, “poor people, who are the firm’s principal customers, could not afford to buy even the cheapest fish. They became vegetarians. If we could have tided over our financial difficulties until after Lent we would have weathered the storm. Trade was just beginning to pick up.”
Receiver William T. Harrison, learning that fish, oysters, and other sea foods were lying in the cars, took measures to obtain the fullest powers in conducting a business based upon transactions in perishable products.
Four Chicago banks that hold nearly $2,500,000 of the firm’s paper, some of it accepted two months ago, held a conference and discussed reorganization of the company.
Efforts were made to find out what the company did with the proceeds of $1,000,000 worth of preferred stock issued last October. Officials say it was used to take up short term notes and to buy warehouses and plants to prevent competition. Creditors believe exorbitant sums were paid for the plants.
Ancillary receivers were appointed for branch plants of the company in various parts of the country.
Receiver Harrison issues a statement practically exonerating Link brothers for blame for the financial straits of the Company.
An official of one of the four Chicago banks which hold nearly $2,500,000 of the firm’s paper said that the receiver was appointed after the banks had learned that some persons connected with Robert Z. Link & Co. had issued misleading statements concerning its volume of business. The Link brothers are not believed to have known anything about these false statements.
The company, it appears, has a number of ambitious managers of its branch houses in various parts of the country. Each manager gets a percentage on his total sales. Some of them, to obtain the commission, it is asserted, juggled their reports in such a manner that their total sales appeared to be much larger than they really were, and the annual report was in consequence misleading. The company had no system of checking up these reported sales, and it was not until the bankers put an auditing firm upon the books, after they suspected something following the issuance of the last annual statement, that the discrepancies were discovered.