Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-03-31
STREETDEAL
Why Recently Dissolved Firm Refunded
$750,OOO to a Boston Operator
in Hannibal and st. Joe.
Nearly 81 800. 900 Of Customers Prof.
its Transferred to the Private
Accounts Of His Brokers.
Sew York World

a story about long series of transactions
in Hannibal and St. Joe stock, in which the
firm of Kennedy, Hutchinson & Co. ~ere the
operators, and Mr.. John Il. DUE, Boston
capitalist was a loser, became Known IN w al!
street Yesterday, although those who had had
part in the transactions had made the most
strenuous efforts TO keep me matter from be-
ing made public. The amount involved was
over 81 600 900. The facts, learned last
evening from a well-known broker, whose
relations with all the persons connected with
the affair are soch that he has been informed
of every step taken by Mr.. Duff to secure
return of the money out Of which he claimed
10 have been deprived, are as follows: "Mr.
DuKs father was a man of large capital,
End during many years devoted himself al
most exclusively to railroad construction.
1t was chiefly through his efforts that the
Hannibal and St. Joe road was built. he
died a few years ago, leaving an estate val
ued at s. 100000 more. His son, Mr..
John r. Duff, has dealt extensively in rail-
road stocks. All his business in New York,
which was very large, was done through the
firm of Kennedy, Hutchinson & Co., No. 2
Wall street, the amount of stocks carried
frequently amounting to several millions OF
dollars During last year he dealt particu
larly in Hannibal and St. Joe stocks, regard
ing which he had peculiar and invaluable
sources of information.
PROFITS, But NOT FOR MR.. DUFF.
THE course of the market was in general
what he expected il would be, but his profits
from his enormous transactions did not APP
pear to be what they should be. In fact, on
many of the transactions he found himself
losing heavily, although he was making
large profits on his dealings in other stocks.
Finally, in January, or psssibly early last
mouth, member of the New York Stock
Exchange, close friend of Mr.. Duff, be-
came convinced that the dealings of Ken
needy, Hutchinson & Co. in the matter of the
Hannibal and St. Joe stocks had been irreg-
ular, and informed Mr.. Duff of his suspi-
cions and the reasons for them. The firm
possessed the confidence of the street and
business men generally, and Mr.. Duff was
exceedingly loath to believe that his brokers
had been deceiving him. Although his
losses had been large, and were the more
keenly felt because SO entirely unexpected,
he refused to bring any charges against the
firm or make any efforts to recover until the
proofs that he had been unfairly dealt with
were laid before him. In the mean
while, on January LIST last, the firm of Ken
needy. Hutchinson & Co. was dissolved. The
firm name, however, was continued, and
the business was conducted by the three
head clerks, who had been in the employ of
original firm. Mr.. Kennedy became a special
partner in the new firm, and also a special
partner in the firm of Bowler, Wallace &
Co., putting 100000 into the business in
each case, if my memory is not at fault. Mr..
Kennedy then went South TO Florida, l
think for his health, and has not since re-
turned.
WHERE THE PROFITS WENT To.
Through the new firm the books and ac-
counts OF Mr. Duff with Kennedy, Hutchin-
son d Co., were examined by agents Of Mr..
Duff and the fact conclusively shown that
stocks and profits which legitimately be-
longed to Mr.. Duff, and should have stood tn
his account upon the books, had, in fact,
been transferred to the credit of the firm.
The firm had, in fact, simply mingled the
property and profits of their customer with
their own accounts. No one could have
been more surprised at such disclosures than
/ was | have been dealing with the firm
almost daily for many years and have al
ways found them careful, honorable and
scrupulously exact The books showed,
however, just what had been done. The firm
had absorbed from their customers accounts
a sum amounting in the aggregate to nearly
s., 100000. Mr.. Hutchinson, when the
facts were laid before him, claimed, and his
friends almost unanimously sustain him in
the claim, that he was entirely ignorant of
the fact that such transactions had been car
ried on, and that the transfer of Mr.. Duff's
accounts to the accounts of the firm was done
without the knowledge of the firm, and was
due to the carelessness OF clerks or to some
misinterpretation OF instructions. There are,
perhaps, some circumstances connected with
the matter which make it possible that Mr..
Hutchinson was ignorant of the fact that his
firm was perpetrating such a wholesale error
upon one OF its customers. On their face,
however, the facts in the case hardly appear
to bear out this superstition, and many be-
lieye that the dissolution of the firm at the
Ao,S ~ he and he 81 Of
business to its clerks was caused indirectly,
if not directly, by these transactions.
COMPROMISING FOR $4,000.
"The matter was at once placed by Mr..
Duff in the hands of his attorneys, and after
a thorough investigation of the transactions
themselves and of what would be the imme-
diate and remote results of a suit, it was de-
cided to compromise the affair by the pay
ment to Mr.. Duff of $500 This AMIGA
BILE settlement was reached about three weeks
ago. and last week the sum agreed upon
partly in the shape of stock and partly in
checks, was received by Mr.. Duff"
ARE THERE OTHER LOSERS?
A member of the Stock Exchange, who
was acquainted with the facts in the case, was
seen by World reporter last evening, but
declined to be interviewed, giving as his rea-
sons the fact that the publication of the mat
Ter WOulu Involve gOOu many OlneE persons
than those directly interested, because Ken
needy, Hutchinson & Co. had employed other
brokers in carrying on Mr.. Duf's business,
and also on account of some later transac-
tions of the firm with other persons. The
gentleman said, too, that as the matter had
been spoken of on Change, the standing COM
mittee of the Stock Board must be cogniz ant
of the facts in the case, and as they had not
seen fit to investigate or take action in the
matter he did not feel at liberty TO speak. If
the standing committee should call on him
he would, Of course, be willing to give them