Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1904-05-07
JOINT THREE ACCOUNT
d. j. Sully Tells of the Mutual
Arrangement to Buy
Cotton
BURDEN PLACED ON suLLY
The Progress of Events on the Memoir
able Day of March 1s = Became sus-
picious of Ray. One Of the Partners
= Appeal to HawIey for Aid Was in
Vain.


tion in the d. j. Sully & Co. bank
ruptcy proceedings was continued be-
fore United States Commissioner
Alexander, sitting as a special exam
liner. Daniel ]. Sully. the head of the
firm was called 10 the stand and asked
Iby his counsel, Etihu Root to tel
about the orders he received TO make
purchases and sales for what has
been called the Joint three account"
1T was a mutual arrangement be-
tween Mr.. Hawley. Mr. Ray and my
self to buy cotton" said Mr.. Sully.
Can you recall 1T in words -
/ Il think l had instructions verbally
on every occasion. The mutual agree
nent about the last joint account was
mbade while we three were riding in an
automobile about March II
This agreement was to buy May and
July cotton. Mr.. Hawley thought II
would be advisable to have Mr.. Gates
in the pool, said the witness. Il
thought the three Of us sufficient to
|carry 1t through From 10000 TO $780,
900 bales We're considered. Hawley and
i Ray had asked my opinion about the
amount
/ Were your orders on your agree
Iment to purchase for your respec-
! tive selves separately or collective-
/ ly?"
| 1T was for the joint account.
| MIR. Sully said he had discussed his
10 lay NJ
The witness then told how he said to
Hawley that he would have to have
money on March is. and Hawley said
he would give his share.
What WAS the particular reason you
thought you would need money the
next day?''
Il had put UP 100000 on margins
and thought it was time Hawfsy and
Ray did something
Were you at the end OF your re-
sources?"
| mo sir. had about 100000 in cash
and securities and 100000 due from
customers. / thought 1T was time
Hawley and Ray shared with me the
burden. l. was carrying about $4,000
bales OF cotton"
Sully said that at this stage the mar
ket was going down. He told HaWiey
and Ray, however, that it would be
wise to buy on falling market. NO
amount was mentioned but they inti-
mated they would pay what was need
cd. Later" said Suliy, Il showed
them a statement. including state
ment OF my funds. Ray and Hawley
both saw it,"
The joint three accounts were then
CARRYING 10000 to $4,000 bales and
Sully said the money was needed at. !
O'clock the next day. ;,
| nxyhan i saw Ray the following day.
said sully. ..he said a drop of a cent
meant $1.250.000 to margin IL announcer
cent meant another $1.25o.000. He said,
we can't stand it. Somebody mas got
to be sacrificed. 1t might as Wen De
YOU They told me they would close
the margin account at o'clock the
next day. They wanted me to take
over their share of the account at 1919
for Nav and 1886 for July" Contlnu-
ing, he said:
ION March II did not know, but
since / have learned. that l was llapie
for s425, 900 in margins at 10 O'Clock on
March 49, i did not know that the
calls had been made
ION the morning Of the 18th, did
Hawley say anything about carrying
you over?"
mo. only as have stated. Hawley
said they would stay until O'Clock.
They had agreed to furnish money on
nv collaterals and to furnish what
other funds were needed to carry me
over o'clock"
.rhat was one of the conditions to
your assuming the joint three ae-
count?"
Yes. sir"
Did they do IT."
mo, sir.
Suspicious OF Ray.
Sullv said that when Ray left him on
the morning of March Is he had an
oninion as to what was about to hap
men. 81 thought he was going to sell
The market out on me- he said.
"Tremendous and heavy selling from
certain quarters during the forenoon
seemed to indicate to me-" the witness
said that somebody knew what was
going to happen.
where did the heavy selling orders
come from
Some from tne Waiuoll Wy eeis
phone"
was that where Mr. Ray went after
leaving you and Hawley in the car
riage?"
Il don't know; he got out at the
Waldorf"
The witness said he kept Hawley
posted during the morning and told
him he did not fear the market If he
could meet the ! o'clock margin call.
The market had varied only 10 or 90
points when Sully went to see Hawley
at / o'clock Six hundred thousand
dollars in addition to what the firm had
in collateral was needed and Hawley
was so informed.
He said he was very sorry; he said
he did not have the money" said the
witness. He said he had not hear3 |
from Ray"
During the afternoon, Sully said, he
received a letter from Hawley enclos- |
ing $S2,420 as the latters share of one
third of 10000 bales. This letter came |
about or O'clock, but in the mean
time. at las o'clock. Sully had sent
notice to the cotton exchange that he
could rot meet his engagements.
In reply to a series of questions from
Attorney Junkins Mr.. Sully said thlt
when his firm began business in 1903,
ne thought it would be a great moral |
md financial help to have a man like
Hawley associated with him. He hai