Evening star. [volume] (Washington, D.C.) 1854-1972, 1891-08-15
BACkER OUT ON BAIL.
The Wealthy Note Broker in the Tombs
Court Charged With Fraud.


Court Charged With Fraud.
Abraham Backer, the one-time millionaire
and note broker, whose failure for s., 900, 900
few weeks ago set Wall street in a futter, after
brief examination in the Tombs police court,
in New York, yesterday, was held to await the
action of the grand jury on charge of grand
larceny. The charge was brought by Judge
VIM. Harden Of the city court of Savannah.
Ca, who went all the way to New York city to
institute his suit. Justice OReilly fixed bail
for Backer at $4,000. Frank Rothschild, a
merchant of Canal street, became security for
Backer D appearance before the grand iury
Judge Harden adjourned his court in Savannah
80 as to be present at the examination.
Mr.. Dyett of the firm of Townsend, Dyett &
| Einstein, councillors for Backer conducted
the cross-examination of Judge Harden. His
| story was substantially the same as set forth in
the affidavit upon which Backer's arrest was
\ made.
Judge Harden's story was that on March IA.
| 1891, he delivered to Backer his promissory
| note for $4,000 which Backer was to get dis
| counted and deliver the proceeds to him
| Backer, as condition of negotiation. re-
qulred that Harden should deposit with him
collateral security for the payment of the debt
at maturity. The negotiation of this note was
made through Mohr Brothers of Savannah.
| number of letters were then produced.
which were written by Backer to Mohr Bros
arranging for the discounting of the note
| The judge said that he deposited securities of
the Central Railroad and Banking Company Of
Georgia amounting to the par value of 80 7OO
and certificates representing ninety shares of
the stock Of the Savannah Gaslight Company
with Backer, upon the agreement that the Sc
curities be held for the payment of the debt
represented by the note and that the collateral
should accompany the note and be returned 10
| him upon the payment of the note. Two re-
| neWals of the note were made and Deootio flows
| were pending for afurther renewal when Backer
| Co. assigned for the alleged benefit of his
creditors. When Judge Harden learned Of the
failure he wrote TO D. J. Sullivan, Backer's con-
! tidentiai clerk. He learned from him and also
from the Merchants National Bank and the
National Park Bank that Backer did not use
| the Central railroad debentures at ALL nor
the stock Of the Savannah Gaslight Company
to secure the discount OF the note or the re-
newals OF it. He did learn, though, that Backer
had secured the renewals Of the note from the
| banks without depositing the collaterals which
were given him for the purpose Of holding for
use as security for the payment of the note.
| These collaterals, when Backer assigned, we're
transferred to the Merchants National Bank
upon loan gotten by Backer for his own use
and benefit. Judge Harden said he called on
Backer at his office last Wednesday to inquire
about his securities, not willing to believe that
Backer would bypothecate them. He then
learned from Backer that he had pledged them.
| II asked him how long ago, and he referred
me to Mr.. Sullivan, and there learned for a
certainty that they had been hypothetical"
| Daniel Sullivan, Backer's confidential clerk,
WAS placed on the stand and swors that the first
record he had that the collateral had been hy-
pothecated was on July Is, 1891. There was no
record to show that they were ever taken out.
He said that Backer never used the collaterxls
as securities in discounting the notes.
Lawyer Dyett moved for dismissal on the
ground that no larceny had been proved. The
theory was, he said, that Backer had, by false
and fraudulent representations. taken the noe
to be discounted and appropriated to his own
| use the proceeds. The lawyer cited q number
| OF cases in substantiation of Backer's position.
The matter was between Harden and Backer.
The latter was the Pledge and by rehypothe-
eating the collaterals did not commit larceny.
1T Is a common practice on Wall street," said
the attorney. There was no evidence to show
that he desired to get the note discounted.
backer, he continued, wrote to Mohr Bros,
who wrote him q reply regarding the discount
ing OF Harden's note, that he personally would
make the loan, providing Harden would give
intended to steal the securities. At the time
such thing - failure never entered his mind.
After few remarks by Judge Harden'a
counsel the case was closed and Backer was
held in $4,000, which was furnished, to await
the action Of the grand jury.