The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-04-08
SURPLUS WILL co
TO THE RECEIVERS
Question in the SuIly Case
Quickly Disposed of
EDWIN HAWLEY A WITNESS
He Was Again Questioned BY Elihu
Root, Special Counsel for the
Receivers In the Pool Case.
Interesting Testimony.


Interesting Testimony.
New York, April THE disposing of
the surplus, about 1900 bales. of the 5000
bales of cotton that had been pledged by
Sully & Co. with the Corn Exchange bank
was settled quickly today before United
States Commissioner Alexander, sitting as
a special examiner
The commissioner, with the approval of
all the parties to the controversy, de-
cided to recommend to the court that
the bank should turn over the surplus
to the receivers of Sully & Co. with the
understanding that F. w. Reynolds COM
pany of Providence does not waive its
claim because of this disposition of the
matter. The dispute was between the
Sully company creditors and the F. w.
Reynolds company.
The investigation before Commissioner
Alexander, which began a week ago,
brought by the receivers of Sully & Co.
to determine what liability IL any was
held by Edwin Hawley and others In
the cotton pool was then resumed. Mr..
Hawley being the first witness. He was
again questioned by Elihu Root, special
counsel for the receivers. He had his
check book with him and in answe err to
practically repetition of the question at
the first hearing, witness identified many
entries. showing that he drew checks for
various sums in connection with his cot
ton deals. One check was for $4,000
payable to John W. Gates, one was to
g..
w. Burchard for $44SS0.
1t was also shown that Hawley had re-
ceived about $4,000 in connection with
the deal and that much of this had been
paid out by him to others. including
Gates, Weir and Burchard. One profit
payment to Ray according to the check
book was 1885, the witness receiving an
equal amount.
SuIIy Acted as Broker.
On March Z, the witness showed from
the check book Sully and company acted
as broker for Hawley in the purchase of
100 shares of merchants trust COMPANY
stock for $17,500
On March IS, a check for s22,S4o was
paid to Sully and company to balance
cotton account.
The witness could not recall the pur-
pose of check of $4,000 paid to Sully and
company on September 4, 1908
order during the five months including
March of this year, witness Identified
vouchers signed by him or his secretary
Questioned by witness, the witness said
the purchase of cotton by Suliy and COM
pany in which he was concerned were
made without his knowledge He did not
| go to the office of Sully and company
He could not recall any order given from
his office Mr.. Ray however had given
such orders on his (Hawley's) authority
| Hawley said he and Mr.. Ray frequently
met at the Waldorf hotel, and that they
discussed the cotton markets. Some
times John w. Gates was present
To Purchase 10000 Bales Each.
| Mr.. Hawley told of dinner at the WAL
| dorf at which an order TO purchase 50.-
| 900 bales of cotton was given. There
were present, he said, ]. w. Gates, Mr.
Ray, Mr. Sully, Mr.. Burch and himself
Mr.. Gates gave the dinner, he said ard
they talked cotton. AS result of this
| he said, an ORDER was given to purchase
| 10000 bales of cotton for the account of
| each man present.
Mr.. Root took up a transaction known
| es mo s." and asked Mr.. Hawley to
give the conversation he had had with
Mr.. Sully In regard to that transaction.
II authorized 20, 900 bales to my account
l cannot tell where the conversation took
| place. Mr.. Ray was the only other per-
| son present." was the reply.
Witness said he could not repeat exact
der was given.
The day before the Sully failure witness
| told Sully he would furnish enough
money to protect his (1awIeys) account
| Prior to March II nothing about margins
| was done, because it had not been nee
essary. The market always advanced af-
| ter he had purchased for witness.
all xrhot MA
March H."
Would Protect Account.
| SMr. Sully came to my office to walk
| home with me- but returned to his office.
He was to meet me later at the Waldorf
He said at the Waldorf he might need
money. l told him l would protect my
account"
Did Mr.. Sully indicate that he needed
money aside from your account?"
| Yes"
do you know what he needed the
money for?'
| mo"
| Mr.. Hawley said that when he learned
| the condition of Sully's firm he decided
to close his account, because he did not
| like to do business with house that
had done business as Sully did, also he
| did not like the looks of the market. The
witness, Sully and Ray met on the morn
| ing of the failure, and Sully was told the
| cotton he held for them, Hawley and
! Ray, would be transferred to another
| house.
I'VE decided to give him up" said Mr..
| Hawley.
| Sully took the POOLS cotton at the pre-
vailing prices the night before, rather
| than transfer the account to another
| house
Partnership Profits
| The witness said he considered the
vouchers for money received from Sully
& Co. as receipts of partnership profits in
| certain specified deals. Others might call
| them pools or anything else. The ar
rangement and understanding with SulIy
| was that any party to the deal could
| sell as he choose.
| What do you have to go on the record
| as to your understanding of the words
| Joint account as they appear on the
| vouchers you signed?' asked Mr. Root
Witness answered he had no understand
| ing about it., that it might be variously
| interpreted.
"And you a member of the stock ex-
change for ten years?' calculated Mr..
| Root.
| Joint contracts are variously inter-
preted,'' said the witness.
| Julian T. Davis, the witness lawyer,
| objected to his client answering the ques-
| ton directly, contending however the
question might be answered. 1t might be
| detrimental to Mr.. Hawley's interests.
II don't want to put any construction