New-York tribune., 1900-01-25
QUEER STOCK BUSINESS.
DISCHARGE OF A. L. AND ]. NJ SEYMOUR,
JR.. AS BANKRUPTS OPPOSED.

TESTIMONY BEFORE THE REFEREE AN Ex-
POSITION OF THE SYSTEM OF cop
PERING" STOCKS
Allen Lewis Seymour and James NJ Seymour.
jr-, of the firm of Seymour Brothers, which
made assignment on September 10, 1897.
with liabilities Of S3SS 975 60. and no assets.
have made application under the Federal Bank
ruptcy act to be discharged as banl1rupts, with
the intention, it is said, OF re-engaging in busi-
ness as brokers in Wall Street. The testimony
taken before F. w. Leonard. the referee with
reference to the causes leading up to the failure
Of the firm is being used by Colonel George A.
Miller, who is associated with Carter & Led
yard, Of No. 81 Wall-st, counsel for number
of the creditors of the firm. to prevent their
being discharged as bankrupts. The referee is
expected TO make his report in a few days in
the United States District Court in New-Jersey.
The brief submitted to the referee by Colonel
Miller tells a novel story of Wall Street stock
manipulation. 1t is denied in part by Judge
Frederick F. Guild. of Newark. counsel for the
Seymours.
The firm. which had Offices in the Johnston
Building, No. 80 Broad-st., when it went to the
wall included Edwin N. Cox. a member Of the
Stock Exchange. but Mr. Cox does not appear
in the present proceedings. When the seymours
made the assignment it was supposed that their
liabilities would prove to be about 100000 and
their assets at least $4,000. It soon became
known that about all OF the money handled by
the firm rad disappeared. The testimony offered
before Mr. Leonard. the referee discloses the
following payments made between January l.
1897, and September Is. the day of the failure:
To J. NJ Seymour, sr.. about $4,000; to J. NJ.
Seymour. jr.. about $4,000; TO A. L. Seymour.
10 & Gaxr r5ov- Of faf
ure, $780, TO Caroline s. Seymour, mother of the
partners, $G,T00-a total Of $95,4O0 within a
period Of eight months Little If any Of this
money, according to Colonel Miller, has been
satisfactorily accounted for by the members of
the firm. According to the testimony before
the referee the transactions Of the firm are per
haps the completest exposition of the system
of "coppering' stock afforded in the history OF
Wall Street
THE FATHER WOULD SELL SHORT.
Allen Lewis Seymour testified that customer
would direct the firm to purchase stock for his
account. Then James NJ. Seymour. sr, who ap-
pears to have been the brains Of the concern
would be informed Of the order and he would
Immediately instruct the firm that he would sell
short corresponding amount Of the same
stock By far the larger amount of the business
was transacted in this manner. The father Of
the brothers was not compelled to put up any
margin, like the other customers a simple
charge being made against his account The
ledger shows that the firm at one time owed him
$1,T00,000, but he was not charged with the bal
ance Of which he short In the account
which would Ia Fe 1eft his credit balance about
I 100000. The son, Allen testified that when the
firm received order to purchase. and a corre-
spending order to SELL one order substantially
cancelled the other that actual transfer
Of certificates was made necessary. No one ex-
cept James NJ Seymour, sr., the father, was
allowed to transact business in this manner
Outside customers had TO put up their margins.
They were charged with the full amount Of the
purchase money of the stock and interest on
the balance While ali the customers. now cred
itors Of the firm, were thus putting up margin
/ and paying interest. James NJ Seymour, ST.. was
"coppering' the orders. il is said and putting
up nothing His debit balance of about $500 600
at the time Of the failure seems to have been
absolutely unprotected Instead Of paying any
thing on his transactions, he actually drew
about $4,000 from the firm IN the nine months
Immediately preceding the failure. A L. Sey-
mour testified that his father never paid any
money TO the firm. his commissions being
charged in his account. His testimony this
point taken from the official minutes before the
referee is as follows:
Q.-wtat was this money paid TO him O.. NJ
Seymour. sr) for? Ale just asked for it and
Odd you treat any other customer that way?
A-No: I can't remember of any other customer
Ole got whatever he asked for? A-Yes. he did
in those cases.
A L. Seymour testified that the firm required
just as much margin from short" customers
on their transactions as from long"
LARGEST CUSTOMER AND MANAGER
The counsel for the creditors charges that
James NJ. Seymour, ST., was the man who actu-
ally conducted the business Of Seymour Broth
ers. and that secretly he was the largest Gus
TONER while ostensibly the manager, thus oc-
/ cupying a place both sides Of the transac-
tons It is charged that after the failure A. L.
Seymour wrote to all the creditors. offering in
settlement the firms notes indOrsed by James
NJ Seymour. sr The counsel for the creditors
asserts that the loan of $4,000 alleged TO have
| been made to the firm by Caroline 3 Seymour,
mother Of the Seymour brothers, was raised on
a mortgage on house in Orange bought and
paia for by James NJ. Seymour. sr., the title
payments by the firm to Mrs. Seymour averaged
$1,000 q month.
Counsel for the creditors says in brief:
In reality each transaction of purchase was SO
handled that purchase al all was made, a simu-
lated sale for the same security being performed
which. under the machinery OF the STOCK tx
necessary either the receipt of security or the pay
ment Of money
When Judge Guild seen last night at his
home in Newark he said:
Yes I have seen Mr.. Millers brief in the Sey-
mour bankruptcy proceedings, and ne says things
f s i,ry he rni1tt he "a r9oTe3 Dsrhaps Tor
making the strong statements he does. but II IS
hardly permissible before referee. am sur
prised at the tone Of his brief and do not under
stand him. 1t Is more Ike Fourth Of July ora
@ slon d SIn Se5fe1ber X 1877 nearly sl6S 600 was
taken out of the firms business by the Seymours
that 10000 OF the 100000 went to James Seymour
S6.lt