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Coated in Columbia by the Old
WHAT CAUSED IT ALL.
Tho Letter and Proposed Agreement
That liaised thc Hornet's Nest.
Names of Prominent Charleston
ami Columbia Gentlemen Figure
in the Caso.-They All Deny They
i .They Are Guilty,
Tlie commission appointed to wind
up the old State Dispensary, sitting
as ?i court, of Inquiry, held a special
meeting <>n last Wednesday for tho
purpose of making an Investigation
of a certain letter purporting to bo
signed by W. D. Hoy, n prominent
liquor manufacturer of Louisville,
Ky., and addressed to varions cred
itors of the Stale dispensary. Tho
letter, which is published in full
herewith, fell into tho hands of Hon.
W. P. Stevenson, attorney for tho
commission, and ho advised thc coin
mission that lt was a matter which
demanded immediato consideration
at their bands. The matter created
a sensation as tho names of several
prominent genllomon wero connect
ed with lt. The hitter is as follows:
Lotter Hoy Wrote.
"Columbia, 8. C., Dee. 21, l it o7.
'Gentlemen: At a mooting of the
creditors of tho South Carolina Slate
dispensary, held at Cincinnati! Dec
ember !), a committee was appointed
for the pur poso of securing a set
tlement., or al least to arrive at a
tentative basis of settlement with tho
commission in charge. For several
weeks prior to this meeting I had
been here and about effected ar
rangements which, ii* a co-operation
of creditors could be obtained, seem
ed tO mo reasonably promising Of
favorable results. I so aol i lied sev
eral of the creditors, who presented
my proposition at the meeting) und
from tho telegrams sent, mo I sup
posed il had been adopted and that
tho committeo had bren appointed
to carry lt out. I believe that quito
a number at thc meeting were of
tho samo Impression and to (hese 1
wish lo say that not a shadow of
authority was given lo me to aol in
any capacity whatever. Tho com
mittee was represented here by Mr.
Gop. 13. Lester, a member of it, and
goberai counsel for Messrs. Fleisch
man &. Co., who made Charleston
his headquarters when he first roach
the State. 1 met him there, and
whilst somewhat disappointed at
linding no power to act delegated to
mo or my associates, determined not
to let this abridge my efforts to got
our money. 1 went over my plans
With him and gave bim tho names of
gentlemen associated with me, also a
lotter endorsing lhe.se gentlemen
from CJov. D. C. Iloyward and K. W.
Hobertson, in whose bank about half
of tho dispensary money in deposit
ed. Mr. Lester seemed much im
pressed, both with the plans and the
eminent respectability, financially
and otherwise, of the members of my
Organization, sOVOral of the latter be
ing officials or co-directors in banks
with some member ol' tho dispen
"Mr. W. D, Melton, who. with
SOino difllbtllty, was induced to join
us, is the lawyer who was tendered
and declined tho position on tho com
mission now held by Mr. Stevenson.
With these and other connections or
relationships, not prudi nt io men
tion here, Mr. Lister appeared much
pleased, and gave me a letter autho
rizing nie to go ahe ad with my plans.
"Two days later he came to Col
umbia, and at a meeting for the pur
pOSQ i introduced him io three of
my associates; in the discussion
which ensued a difference of techni
cal nature between him and .Mr. Mel
ton, which Culminated as Mr. Les
ter will admit, in quite a display of
temper on his pai l. i\lr. Melton ?
therefore declined to have anything
further lo ilo with tho case, und with
him I lost, forces without which 1
could accomplish noting.
"Before i could patch np the un
fortunate disagreement Mr. Lester
was persuaded by rosy assurance
from another element to adopt
plans al toge tiler independent from
mine. I stuck lo him, however, hop
ing his strong personality might car
ry him through, but knowing (hat he
was pursuing a course into which
others bad been allured only to meet
with failure. He proved no excep
"Now, 1 do not Wish this lo be
construed as a reflection upon Mr.
Loster or (he vigor of his efforts.
During UH; week I have been I brown
with him my regard for him has
grown daily. ile is a manly fellow
of high attainment, and I think a
lawyer of OXCOptlonnl ability, indeed,
a man who under condition., approx
imatoly normal would succeed iii al
tnosl any undertaking, hut he is
Wholly onl ol' touch willi tb OHO peo
ple down here, nor has ho the tad
to handle this situation. I am semi
lng him a copy of this loller and be
lieve be will confirm ail I have writ
"Now from a standpoint ol* re
source I am perhaps more vitally in
tOl'Ostod Iban any other creditor; ins
claim ls over $40,000 and I want the
money. A concent ral ion of tho
claims or a major part of them is
absolutely nocossary to got it and
I a?kyo?'to^oliL.lft my plana to so
curo a settlement. I ara unable to
give you any flattering 'assurance of
success, but I am freo to say that
your claims will bo in tho hand3 of
mon of unquestionable financial re
sponsibility; mon who 'are aleo tri
close business relationship with
members of tho commission, and If
they cannot get our money for UH no
one ol so can/.
"If you c?fa to join mo please sign
and date tho enclosed agreement and
return it to me, with statement of
your account, by next mail, care of
tho Columbia Hoto!, Columbia, S. C.
Lot mo beg of you also not to insert
any timo limit in this agreement, for
If you do my parties boro Will not
handle your claims. You aro at lib
erty to withdraw when satisfied that
no substantial progress is being
made, and remember I shall stay
righi here on the ground until sonic
cr more, if the worst conies to the
more, if the worst conies to the
worst, and we have to appeal to the
Legislature, or any local tribunal
which that body may establish to
pass upon tho claim, we would have
in my organization tho strongest rep
resentation to bf gotten together in
tho State. Very truly, YV. 1). Key,
President, Delroy Distilling Com
pany, Louisville, Ky."
Accompanying this lotter was the
following proposed bul unsigned
A grce1 m cut Proposed.
'We, the undersigned creditors of
the State dispensary ol South Caro
lina, hereby appoint tho National
Loan and Exchange Hank, of the city
of Columbia, S. C., and W. I). Roy,
of Louisville, Ky., attorneys in fact
for us and in our nanni to represent
us ia the adjustment and collection
or claim and demands against, the
So u t li Carolina Stale dispensary,
and to that end employ such attor
j noys and others and to do all such
j other thing as they may deem neces
sary or advisable with power of sub
stitution. Provided, however, that
no authority is hereby given to In
stitute any proceedings at law with
out lirai referring ii i<> us and ob
taining our consent thereto
"And we do hereby agree to al
low Ibo said National Loan and Ex
change Hank and YY. JJ. Hoy six por
cent, of all sums as may be hereaf
ter collected, or paid, or satisfar.lor
ily secured to be paid on our claim
for such serviros as may he ren
dered by them or other persons oih
i ployed by i hem.
i "And we do hereby authorize and
: empower the said National Loan and
, Kxchange Hank and \V. 1). Hoy for
jus and in our name to collect, ro
I eeiVO and acknowledge receipt for
?all such minis as may be paid on our
? claim, remitting to us the balance
after deducting the said six por cent,
for the services and expenses.
"In tho ('vent disputes or differ
ences shall arise as to tho amount
due on said claims or the prices
charged in said claims and demands,
for as to any other matter effecting
the amount thereof; lt is understood
thal tho same shall bo referred to us
for advice and instruction.
"We also agree to waive interest
on said (Maim and demands if such
will bo found necessary to facilitate
"And we do hereby agree to fur
nish lo our sahl attorneys In fact a
full itemized slaloment verified of
our said (daims and demands, forth
with lip?n the execution of this
agreement by us."
Lyon Questions Hoy.
After the letter had been read Mr.
Roy was questioned as to Its contents
Mr. Lyon asking the questions. Mr.
Hoy said that tho agreement, with the
letter had been signed by pilly four
or live creditors whoso names ho
gave, and that (l?ese claims repre
sented less than $10,00'? altogether.
Ills information as to the deposits of
the commission had been obtained
'from Mr. Melton and Mr. Kulin.
The gentlemen referred to as assn
lei.'tied with him were Moiton Kohn
and Nelson. Others were Indirectly
interested, as referred to further Oil
In the letter. Pressed by Mr. Lyon
to s.i) what others .vere interested,
either dlrctly or Indirectly, Mr. Roy
said that only the Loan and Ex
change Hank was interested and no
"Who occupied the relationship of
codi rectors with members of the
commission?" asked Mr. Lyon. Kohn
and Moiton," replied Mr. Roy.
Mr. Lyon called Mr. Roy's ntten
tloll to tho fact that in the lotter he!
used the word "banks" in tho plural,
and wanted to know what oth?l
banks wore meant. Mr. Roy said
this was an error of the typewriter, ;
as no other bank was interested.
When askod to tell the plans re
ferred to in the letter Mr. Hoy said
he was glad to do so. He said that
the creditors had received a lotter
from Dr. Murray in September stat
ing no condition as: to bringing tlie
books before the commission, and
later had received circulars saying
the books would bo required, hut
setting no date. Then the panic came
He ((included thal the commission
wanted to aid tin ir banks and he
knew ?t would be a hardship to call
on the banks to pay out the money
at thal lime. Therefore he conceiv
ed the idea ol' forming' an agreement
with the banks so as to solve | lu
sh nation and Iel the money ronnie
on deposit. To do this he surround
ed himself willi men above suspicion.
Ile would iud be fool enough to east
any reflection on me commission, in
whom he had confidence. Mo said
ho lind o'? intention of using undue
Influences on tho commission.
Other Names Mentioned.
1 Mr. Lyon ask0(1 if Mr. Melton was
ono of tho Interested parties referred
to, and Mr. Hoy replied that he hop
ed to got. Mr. Moltou interested, but
"Why did he withdraw?" nskod
i Mr. Lyon.
Mr. Hoy: "I don't h now. Ile ls boro
and can answer.''
Mr. Lyon: "Is it not a fact that
Mr. Melton withdrew bocauso tho
proposition Included tho use of mon
Mr. Hoy: "No, emphatically."
Mr. Lyon: "What was tho $86,000
to bo used for?"
Mr. Hoy. "lt was not that much,
not half that much."
Mr. Lyon: ' What was tho occasion
for raising this fund?"
Mr. Hoy: "lt is a reasonable per
centage for attorney's fees."
Mr. Lyon: "ls Mr. August Kohn an
attorney? ls Mr. T. B. Stack ho USO
an attorney? is Mr. .). L. Mlmaugh
Mr. Hoy could not say positively,
but he did not think the gentlemen
named were attorneys.
Mr. Lyon: "How was the G por
cent tO !><? divided '"
Mr. Roy: "1 do liol know; Mr.
J Nelson is to gel it now, I gel about
Mr. Lyon: "I low much was Melton
i lo gol ?"
Hoy: "I don't know."
Lyon: "What was Ibo occasion for
the disagreement between Melton
Hoy: "li was in regard lo Lester's
Lyon. "Yon introduced tbreo as
sociates who were they?"
Hoy: "Mellon, Kohn and Nelson."
Lyon: "When Melton and Lester
disagreed who else drew out?"
Hoy: "All of them Melton, Ned
son, Kohn and .all the rest."
Lyon: "What force can Kohn and
Um others exert e>n tho commission?"
Roy: "All thai he; showed to me
was a good deal of activity in get
ling malters tn shape te) present to
Mr. Mordecai's Plan.
Queslioneel as to what he meant
by others being urged! ho said h<>
referred to tho plan proposed by Mr.
Ho was asked to u-ii what Mor
decai's plan was, and replied that he
WOllld have- te) give hearsay, as he?
was not prosonl ai Ibo mooting when
Mr. Mordecai slated his plan.
Mr. Roy Sttid I he-re were twei plans
I presented, in the summer a paper
, was sent him to sign, which he? dbl
liol OVOU read ibis paper appoint
ed Mordecai attorney,
i Mr. Mordecai proposed lo secure a
settlement through Mr. Stevensem
provided a commission of twenty per
cent we're paiel. The COmmittCO ol
creditors having a communication
from him (Hoy) el iel not lake Mr
Mordecai up. Ho did not remomuei
details e)f the proposition.
Mr. Lyon: "Does the letter refer
red to se-t forth the plan?"
Mr Roy could not say.
Mr. Lyon: ' Von stated Mr. Morde
cai was te) get a settlement th rou gi
Mr. Hoy. "Mr. Mordecai so stat
Mr. Lyon: "Diel he explain hov
Mr. Slovonson was to gel lt?"
Mr. Roy: "I never ini't Mr. Mor
decal on this question."
Mr. Nelson then oxaminod Mr
Hoy and brought emt that no moue;
bael yet been collected by Mr. Hoy te
be used In collecting the claims.
lie asked what. Mr. Hoy knew a
te) how his letter roached the com
mission. Mr. Roy replied he beare
it was sohl by Mr. Mordecai te> Mi
Stevenson and that Mr. Stovonsoi
; bael sent a copy to every mombo
except Mr. Arthur.
Mr. Nelson. "Diel yem nave- an;
I agreement with any but myself as ti
commission for collection?"
Mr. Hoy: "No."
Mr. Nelson: 'Dbl yem expect te
pay Kohn, Moiton en any one
; hut myself?"
Mr. Hoy: "No."
! On tho redlrocl examination. Mr
Lyon again questioned Ro) as te
what his so-called associates we n- ri
receive put e>i the- pian.
Mr. Lyon: "Von said your ot he
associates wore neu to receive any
thing. When Will they receive any
j thing ?"
Mri Roy: "Never."
Mr. Lyon: "When we're- they te? ge>
iU?" ? . ,
Mr. Roy: "I dont know.'
Mr. Lyon: "Ye>u mean Mhnnnugl
Mr. Roy! "I (lld not say that,
nevor saw these gontlomen."
Mr. Lyon: "What was Kohn te
got out e>f it ?"
Mr. Ueiy: "I don't know Can'
give? yem any information at all."
Mr. Lyon "Was this plan dom
with the- knowledge e>f Mr Robert
son ? "
Mr. Iteiy: I elem'! think it was."
Mr Lyon: "Don't yem know wba
Mr. Heiy. "iie> knew nothing bo
yond (hat the? bank was lei be made
ibe- depository. I drew up a paper
ami when Mr. Roborlson saw il hi
was opposed te> having anything ti
?do with the attorney's lVe>s. Ile em
ly wanted tho banks regular eharg
for exchange* and refused lei cute
into the' first agroomont. ile- ne
Copied tho ftgrOOmonl tO e-edle-e't (UV
pay ove r t ho money."
No Improper Moans.
Mr. W. D. Moiton, tho well-know
attorney ?>f columbia, was tho
sworn, and he ?lated that he> had n
objection to lolling what, he- kn<"
aboul this pinn to colled Ibo claim
against the dispensary. Tho prop?
sillon bael boon made lo him lei co
loci the' claims for six per cont, an
he was to employ such RSBOClft)
counsel ?niel assistance ns be mig'
Interesting Statement on Condi
tion of County Dispensaries.
llooltK in (?ood Condition-Coxl of
Omeo Not Heavy-Aggregate Solos
Very Large-Tabulated Statement.
Mr. W. li. Wost, tho Slate dispen
sary auditor, Thursday submitted
his lust report to the general assem
bly, showing the operation of the
county dispensaries stace their es
tablishment, in March. The report
goes Into the work of systematizing
the books in ouch county and ex
plains how oach hook Is kept. All
of these books have been examined
and Mr. West has mot from time to
time with the county boards and ad
vised them as to the management of
the business. The only shortage dis
covered during tho year was in Col
umbia When ene of tilt" dispers?is
wiis $1,500 short in his accounts.
This amount was paid up. Outside
of this case tho books and accounts
have been well kepi.
Mr. West says that "tho cost of
this ofllce Hom tho limo it was open
ed In March lo the :ust day of Dec
ember was $4,100. -17. Tho aggre
gate gross sales made by all the dis
pensarios in the Stale was $2,691,
663.-13. The total net profit was
$695,056.01. Dy a comparison of
these figures il is seen (hat the cost
of maintaining this ellice was 3-20 of
1 per cent, of the gross sales, or 8-5
per cent, ol' Hu- net prolll earned.
"After having had 10 months ex
perience in the work it is my opinion
thai it can he done' in accordance
with the law if I am given the as
sistance of two competent clerks and
a stenographer, but as it stands now
it is a physical impossibility for mc
io cover the territory lu the limited
lime required by law."
"The gross sales of county dis
pensaries (or tie- month of December
wore as follows:
Abbeville count y.$ I 6,6 I 2.70
Aiken count y. 15,3 I 2
Dam berg county. 9.857.38
Darn wei I county. 21,060.51:
Deauforl roomy.I /1,7 S 0? 7 fi
Derk eloy cob ni y. ft,850.6f.
Chester county.1-1,77 1.O'!
Chesterfield county .. .. 13,917. If
Clarendon county . . . . 8,296.Sf
Co I loto ii county .. .... 10,353.31
Dorchester county .. .. N.?.V.t.l."
Fairfield county. 9,7S2.7G
I Florence county.1 t',,7 1 :!
Georgetown county .. .. 10,707
Hampton county. 7,978.GI
Kershaw county. 15,535.07
Laurens county. 22,582.54
Lee county. 8,969.75
Lexington county. 9.260.32
Orangoburg county.. .. 32,099.03
Williamsburg county. . .. 12,664.90
The total sales of county dispen
saries for quarter, beginning Oct. 1,
and ending December 3 list, 1907,
are as follows:
County. Prollt. Sales.
Abbeville ..$14,600.00 $44,047.63
Aiken. 8,533.87 37,852.59
Dam borg.. .. 5,971.41 26,460,37
Doaufort.. .. 9,305.54 32,222.20
Derkoloy.. ..0,327.44 27,944.02
Harnwell ...16,386.20 G6,180.8G
Charleston ..30,267.00 169,83 LOG
Chester . . .1 0.18.-).70 37,083.13
Chesterfield.. 7.575.02 37,107.82
Clarendon .. 7,359.17 23,375.24
Col loton .. .. 6,280:1 4 22,380.21
Dorchester .. 6.037.94 22.421.7J
Fairfield.. ,. 8,3 10.00 25,730.99
Florence. . ..10,120.5:5 48,207.17
Georgetown. . 14,71 9.39 43.226.8G
Hampton.. .. 5,239.06 21,632.79
Kershaw.. ..1 2,306.98 10,602.4 2
Laurens. . . . I 3.138.24 M.I 06.64
Lee. 7.972.07 20,1 17.27
Lexington . . 5.23 1.3 I 23,286.20
Orangoburg. .24,555.65 s::, i -2 1.50
Richland . . .35,696.1 :! I 49,304.40
Sumter .. . . 24,334.03 6 1,843.64
Williamsburg. I 1,700.27 36,633.48
Totals. ..314.160.06 1,150,719.86
select Ho had several interviews
with Mr. hoy and ono with Mr. Les
ter. After duly considering the mat
ter he had decided not to accept the
Mr. Lyon: "Were you Impressed
that improper means wen- to be us
Mr. Melton: "Never at any time.
There was no suggestion of improper
use of money ol' lllfluonco. I thought
I could ROt a fair hearing before
the commission and there was no
necessity for any proceedings in
Court. I understood that the only
matter ol" difference between the
commission mid tho creditors was the
matter of ovor-chargos, which could
bo adjusted. I got this from Nelson,
and ho from Mr. Stevenson.
Mr. Lyon: "Were you familiar
with the Roy letter?"
Mr. Melton: "I was not. After I
declined to take the casi- Mr. Hoy
asked for an interview with me, and
then Stated he would write a lotter.
I did liol see the letter before ii went
out or while l was. Interested. I have
no connection with the matter now
Mr. Nelson then brought out from
Mr. Melton that he and Mr. Mellon
had been in accord as to how the
case .should bc handled, and (hat the
agreement made by Nelson was (he
[same thal was proposed to he made
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