Attempt to Take Over the ADC, 1914-1915

    By late 1914, the Millars’ resourcefulness and determination had left them in a quandary.  They were fighting to hold onto the worst two acres of the entire diamond field, and were rapidly exhausting the surface layer.  The Kimberley Mine up in the hills had very limited value even for promotion.  There was a chance they might manage to secure the bankrupt Ozark Corporation’s property next door; yet, that was still uncertain, considering other financial demands.[1]

    Most frustrating, Sam Reyburn’s Arkansas Diamond Company owned about 90% of the pipe and almost that percentage of the diamond-bearing east side, and seemed to be discrediting the entire diamond field.  Although in financial trouble, the Little Rock group insisted their property remain under the control of Arkansans.


    In November Austin Millar tried to resolve his difficulties by staging a shareholder revolt against the ADC’s leadership.  He thought the company’s current financial situation left it vulnerable to forced receivership, where it could be purchased or at least reorganized favorably.  As the agent for this attempted coup, Millar used one of his directors and stockholders, W. F. Armstrong of St. Louis, head of the Brown Shoe Company and owner of a shoe store in Little Rock.  Gaining standing for a law suit, Armstrong had bought stock in the Arkansas Diamond Company.[2]

    Millar’s lawyer from St. Louis, George B. Webster, filed a federal lawsuit early December 1914 in Little Rock (Armstrong v. Arkansas Diamond Company).  Basically, Millar and Webster wanted to convince the court that officers of the company were using liens to freeze out the stockholders.[3]  Facilitating the action, Millar sent his lawyer names of several other ADC stockholders and suggested they be recruited “to join in the investigation.”[4]

    For months the plotters tried to mobilize a stockholders rebellion, but in the end Armstrong stood alone facing an impending court hearing and worrying about having to bear all expenses due Webster and the judicial system.  Webster was confused as to whether the Kimberlite Company or Armstrong was responsible for payments.  Millar informed his friends the company had no money to spare at the time.  Armstrong, feeling Austin Q. Millar had left him stranded, dropped out of the case by early June 1915, leaving Webster trying to work something out.  When the lawyer quit in late September, the lawsuit failed by default.[5]  



[1] Infra, “Reprieved by the Ozark Purchase.”


[2] Austin Q. Millar to George B. Webster, lawyer, St. Louis, November 25, 1914, I.H.; “Shareholders,” Kimberlite Company, I.W.; Prospectus, Kimberlite Company, 1912- (listing company officials); Report to stockholders, Sam W. Reyburn to W. F. Armstrong, St. Louis, May 1, 1914, I.H (the letter is in Millar’s files).  Millar’s letter informed Webster, his personal lawyer, that Armstrong would call on him “at our request in regard to have you [sic] investigate the condition of the affairs of the Arkansas Diamond Company.  There will be quite a number of other shareholders I think [will] join him in what litigation you may advise.”

    Reyburn’s letter had informed Armstrong and other ADC stockholders of the current difficult in raising funds.  In his straightforward manner, Reyburn pointed out that he and other major creditors of the company had their investments secured by liens on properties, and suggested stockholders also should get liens.  To keep the mining venture going, stockholders were asked to approve a bond issue covering indebtedness and basic operating expenses.  (See supra, “Financial Doldrums.”)

    For further perspective, see W. F. Armstrong, doing business in the name of Armstrong Shoe Company [Little Rock] v. Union Trust Company, Trustee, and A. D. Cohn, December 4, 1913, Pulaski Chancery Court, case no. 16066, Box 716; and “Decree,” Union Trust Company, Trustee, and A. D. Cohn v. W. F. Armstrong, December 4, 1913, Pulaski Chancery no. 16380, Box 716 (all material is in the 16380 packet).  The suit began in Circuit Court, Pulaski Second Division on August 5, 1913, and was transferred to Chancery September 29, 1913.  The suit and countersuit centered upon a store Armstrong leased from Cohn.  In Armstrong’s deposition, October 4, 1913, he stated he was sixty-one years old, a resident of Little Rock, and a “traveling salesman for the Brown Shoe Co.” (7).  He had a manager handling his shoe store in Little Rock, currently at 620 Main Street (7, 24)).


[3] Millar to Webster, April 19, 1915, I.I.


[4] Millar to Webster, December 10, 1914, I.H.


[5] Armstrong stopped cooperating by early June 1915 (Webster to Millar, June 11, 1915, ibid).  The case was set for October 11, 1915, but Webster quit in late September (Webster to Millar, September 28, 1915, ibid.).  Other related letters are in the file, November 1914-October 1915.


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