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Commodity Futures Trading Commission 

CEA CASES 

NAME: PEERS AND COMPANY, HENRY M. PEERS, JR., LEADING EMBROIDERY COMPANY, 

SMITHERMAN COTTON MILLS, INC., AND LEON SALKIND 

DOCKET NUMBER: 61 

DATE: FEBRUARY 16, 1954 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES DEPARTMENT OF AGRICULTURE 

BEFORE THE SECRETARY OF AGRICULTURE 

In re Peers and Company, Henry M. Peers, Jr., Leading Embroidery Company, 

Smitherman Cotton Mills, Inc., and Leon Salkind, Respondents 

CEA Docket No. 61 

Complaint and Notice of Hearing under Section 6(b) of the Commodity Exchange 

Act 

The Secretary of Agriculture has reason to believe that the respondents, 

Peers and Company, Henry M. Peers, Jr., Leading Embroidery Company, Smitherman 

Cotton Mills, Inc., and Leon Salkind, have violated the Commodity Exchange Act 

(7 U.S.C. Chapter 1) and the rules and regulations of the Secretary of 

Agriculture promulgated thereunder. In accordance with the provisions of 

section 6(b) of the Commodity Exchange Act (7 U.S.C. 9), this complaint and 

notice of hearing is issued alleging as follows: 

I 

Respondent Peers and Company, 76 Beaver Street, New York, New York, is a sole 

proprietorship, owned and managed by respondent Henry M. Peers, Jr. At all 

times material to this complaint, the said Peers and Company was a registered 

futures commission merchant under the Commodity Exchange Act and a clearing 

member of the New York Cotton Exchange. 

II 

Respondent Leading Embroidery Company is a partnership organized under the 

laws of the State of New York and registered in the State of New Jersey, with 

offices located at 5620 Bergenline Avenue, West New York, New Jersey. The said 

partnership consists of respondent Leon Salkind, the principal partner, and 

Harold J. Baum and Max Muehlfriedel, not respondents herein. 

III 

Respondent Smitherman Cotton Mills, Inc., is a corporation organized under 

the laws of the State of North Carolina, with offices located at 5620 Bergenline 

Avenue, West New York, New Jersey. The said corporation is wholly owned and 

controlled by the above-described partners of the respondent partnership, 

Leading Embroidery Company. Respondent Leon Salkind is president and a director 

of the said corporation, and the aforementioned Harold J. Baum is secretarytreasurer and a director of such corporation. 

IV 

At all times material to this complaint, respondent Leon Salkind managed and 

controlled the business of the respondent partnership and the respondent 

corporation, and the commodity futures transactions hereinafter described were 

carried out at the direction of the said Leon Salkind in his capacity as 
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principal partner in the respondent partnership and president of the respondent 

corporation. 

V 

At all times material to this complaint, the New York Cotton Exchange was a 

duly designated contract market under the Commodity Exchange Act. 

VI 

On or about September 10, 1952, respondents Leading Embroidery Company and 

Smitherman Cotton Mills, Inc., acting through respondent Leon Salkind, each 

opened a regulated commodity account with respondent Peers and Company, and in 

connection therewith the said Leading Embroidery Company and Smitherman Cotton 

Mills, Inc., each furnished to respondent Peers and Company a letter on a 

standard form of the New York Cotton Exchange, stating that trading in the 

respective account would consist of hedging transactions. By reason of such 

representations, initial margin on opening trades in the said accounts was not 

required under the rules of the New York Cotton Exchange, Such representations 

were untrue, in that most of the transactions executed for these accounts were 

not hedges but constituted speculative trading. 

VII 

On or about September 15, 1952, respondent Leon Salkind ordered respondent 

Peers and Company to buy 4,000 bales of March 1953 cotton futures on the New 

York Cotton Exchange for the account of respondent Leading Embroidery Company 

and simultaneously ordered 

the said Peers and Company to sell 4,000 bales of March 1953 cotton futures for 

the account of respondent Smitherman Cotton Mills, Inc. Respondent Peers and 

Company simultaneously transmitted both orders to Aubrey Wolford, a registered 

floor broker under the Commodity Exchange Act, for execution on the New York 

Cotton Exchange, and the said Aubrey Wolford, acting as floor broker on both 

sides of each of the said orders, purchased 4,000 bales of March 1953 cotton 

futures at 39.31 cents per pound on the floor of the New York Cotton Exchange 

and, as the opposite side of such purchase, sold the same quantity of the same 

future at the same price. The said Aubrey Wolford reported the above-described 

purchase and sale to respondent Peers and Company, and the said Peers and 

Company entered the transactions in its books in the respective accounts of the 

respondent partnership and the respondent corporation, and notified respondent 

Leon Salkind that his orders had been executed. 

VIII 

On or about November 12, 1952, respondent Leon Salkind ordered respondent 

Peers and Company to buy 3,500 bales of March 1953 cotton futures on the New 

York Cotton Exchange for the account of respondent Smitherman Cotton Mills, 

Inc., and simultaneously ordered the said Peers and Company to sell 4,000 bales 

of March 1953 cotton 

futures on the said exchange for the account of respondent Leading Embroidery 

Company. Respondent Peers and Company simultaneously transmitted both orders to 

the said Aubrey Wolford for execution on the New York Cotton Exchange, and the 

said Aubrey Wolford, acting as floor broker on both sides of each of the said 

orders, purchased 3,500 bales of March 1953 cotton futures at 36.06 cents per 

pound on the floor of the New York Cotton Exchange and, as the opposite side of 

such purchase, sold the same quantity of the same future at the same price. The 

said Aubrey Wolford reported the above-described purchase and sale to respondent 

Peers and Company, and the said Peers and Company entered the transactions in 

its books in the respective accounts of the respondent corporation and the 
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respondent partnership, and notified respondent Leon Salkind that his orders had 

been executed. 

IX 

On or about November 12, 1952, respondent Leon Salkind ordered respondent 

Peers and Company to buy 4,000 bales of May 1953 cotton futures on the New York 

Cotton Exchange for the account of respondent Smitherman Cotton Mills, Inc., and 

simultaneously ordered the said Peers and Company to sell 4,000 bales of May 

1953 cotton futures on the said exchange for the account of respondent Leading 

Embroidery Company. Respondent Peers and Company simultaneously transmitted 

both orders to the said Aubrey Wolford for execution 

on the New York Cotton Exchange, and the said Aubrey Wolford, acting as floor 

broker on both sides of each of the said orders, purchased 4,000 bales of May 

1953 cotton futures at 36.16 cents per pound on the floor of the New York Cotton 

Exchange and, as the opposite side of such purchase, sold the same quantity of 

the same future at the same price. The said Aubrey Wolford reported such 

purchase and sale to respondent Peers and Company, and the said Peers and 

Company entered the transactions in its books in the respective accounts of the 

respondent corporation and the respondent partnership, and notified respondent 

Leon Salkind that his orders had been executed. 

X 

Respondent Peers and Company accepted the orders described in paragraphs VII, 

VIII, and IX with knowledge of the fact that respondent Leon Salkind controlled 

the trading in the accounts of the respondent partnership and respondent 

corporation. 

XI 

At all times between September 15, 1952, and September 21, 1952, and at all 

times between September 23, 1952, and February 19, 1953, the books of respondent 

Peers and Company showed that the account of respondent Leading Embroidery 

Company had a deficit in excess of $ 10,000, the maximum amount of credit 

permitted to be extended by a 

member of the New York Cotton Exchange under the rules of the said exchange. No 

margin funds were deposited by respondent Leading Embroidery Company or by 

anyone else in its behalf during these periods. On October 23, 1952, and 

thereafter, such deficit exceeded $ 100,000. The transactions of November 12, 

1952, described in paragraphs VIII and IX, closed out the open contract 

positions in both accounts and at the close of business on that day the account 

of respondent Leading Embroidery Company showed a debit balance of approximately 

$ 132,765 and the account of respondent Smitherman Cotton Mills, Inc., showed a 

credit balance of approximately $ 118,340. The said accounts remained in this 

status until on or about February 19, 1953, at which time respondent Peers and 

Company, pursuant to directions from respondent Leon Salkind, applied the said 

credit balance in the account of respondent Smitherman Cotton Mills, Inc., to 

the debit balance in the account of respondent Leading Embroidery Company. 

Shortly thereafter both of the accounts were closed. 

XII 

The cotton futures transactions described in paragraphs VII, VIII, and IX 

could be used for hedging transactions in interstate commerce in cotton or the 

products or by-products thereof, or determining the price basis of transactions 

in interstate commerce in cotton, or delivering cotton sold, shipped, or 

received in interstate commerce. 

XIII 
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By reason of the facts described in paragraphs VII, VIII, and IX, the 

respondents, Peers and Company, Henry M. Peers, Jr., Leading Embroidery Company, 

Smitherman Cotton Mills, Inc., and Leon Salkind, offered to enter into, and 

entered into transactions which were wash sales or fictitious sales, in 

violation of section 4c of the Commodity Exchange Act (7 U.S.C. 60). 

Therefore, the said respondents, Peers and Company, Henry M. Peers, Jr., 

Leading Embroidery Company, Smitherman Cotton Mills, Inc., and Leon Salkind, are 

hereby notified to be and appear at a hearing to be held at 10:00 a.m., Eastern 

Standard Time, on the 30th day of March 1954, in Room 602, Cotton Exchange 

Building, 60 Beaver Street, New York, New York, before a referee designated to 

conduct such hearing and then and there show cause, if any there be, why an 

order should not be made revoking or suspending the registration of respondent 

Peers and Company as a futures commission merchant and directing that all 

contract markets refuse all trading privileges to all the respondents for such 

period of time as may be determined by the Secretary of Agriculture. 

The respondents will have 20 days after the receipt of this notice of hearing 

in which to file with the Secretary of Agriculture, 

in septuplicate, an answer fully and completely stating the nature of the 

defense and admitting or denying specifically end in detail each material and 

relevant allegation of this complaint. Allegations that are not answered will 

be deemed admitted for the purpose of this proceeding. 

It is ordered that this complaint and notice of hearing be served on the 

respondents by delivery of a true copy thereof by an employee of the Department 

of Agriculture, or by registered mail, at least 20 days prior to the date set 

for hearing. 

Done at Washington, D. C. 

this 16 day of Feb., 1954. 

/s/ True D. Morse 

Acting Secretary of Agriculture 

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