New-York tribune., 1907-04-29
BOND THEFT, $SOO,OOO.
BENNETT HAD SSOO,O00.
Securities HypOthecated for One
third Face Value.


chow that the total value of securities taken by
~ O. Douglass. the assistant bond clerk. and
hvDothecated by Oliver NJ bennett and Others
,ppposed 10 have been in the scheme. was
carer $4,000 than 100000. OF this amount
100000 not $4,000. at first stated. were
found in the possession of bennett at the Man
haitian Club.
II developed that most OF the bonds on which
,noney was realized We're hypothecated for not
more than one-third OF their face value. The
trust company, in civil suits now being prepared
sor the recovery Of the money it was Obliged to
nav various brokerage houses for the return of
ne securities held by them. VIII. it is under
stood, argue that these brokers might have sus-
pected that something wrong when they
were only asked TO lend one-third of what is
ordinarily lent on gilt-edged collateral.
Another interesting fact told by one of the
prominent directors yesterday was that in addi-
don 70 taking bonds held as collateral on loans
Douglass appropriated large amount of stocks
deposited by customers Of the company and held
a the name Of Douglass. He was able to do
fhis through an arrangement that many trust
companies are said to have with their Gus
toners.
wishing TO take an occasional "hier'' in the
market while travelling they deposit a certain
. snount Of securities IN the trust company to
be drawn needed by their brokers Send
Eng an order TO the broker TO buy stocks on mar
gin. the customer at the same time sends an or
der to the trust company 10 turn over collateral
sufficient to carry the stocks. To facilitate the
transfer Of the collateral deposited with the
trust company the customer has il registered in
the name OF some one IN the trust company
usually the loan clerk or assistant loan clerk
The reason for this method is that in the hands
Of the trust company the securities are less
likely 10 be tied up by a failure than if they
were held by brokerage concern.
DOUGLASS HELD SECURITIES.
Douglass. il IS said. held large number OF
securities of this nature in his name 1t was
IN disposing Of these securities, about the own
ership OF which there seemed TO be no question
that he started in Wall Street speculation. 1t
was only at the last that he dipped into the
collateral held for loans With the 100000
taken on Friday and the $4,000 taken on sat
urday Of the week before last. it is believed
that Douglass intended 10 get out Of the coun-
Try. But he made the mistake Of leaving his
post at lO:45 on Saturday. Whether it was for
the purpose Of raising money on some Of the col
lateral or not is not known. 1t is thought that
he may have just heard from the Manhattan
Club that ex-AIayor Josiah Quincy of Boston
had declined 70 accept a retainer TO act as coun-
sci in an effort 10 get immunity for the return
Of some Of the bonds
II Douglass had stayed through business on
saturday," said a director yesterday "it looks
70 me as If he had a chance 10 get away before
Monday without arousing suspicion"
As IL was. al avenues of escape were watched
after Douglass failed TO return to his cage on
Saturday. The last train for Canada left the
Grand Central Station shortly after midnight
Oakleigh Thorne. president Of the trust com
pany, and other officers who had been watching
there started for home. and. as has been told
Mrs. Douglass and a man were seen getting off
train at the Grand Central Station Of the sub
way. If they had intended 10 get the train
they were late. and went TO the Hotel Portland
BENNETT WITH MRS DOUGLASS.
The identity OF the. third man has not been
toid' but yesterday il was learned that he was
bennett He did not register at the Portland
where Douglass was arrested later. but was
followed 70 the Manhattan Club He probably
had the 100000 IN bonds with him at the time.
but was not molested until he came out Of the
club on Monday morning, a watch having been
Kept there in the mean time Then IL was that
Ar Thorne and the detectives searched his
loom and found the large bundle Of securities
When arrested Douglass had little money al
though some must have been raised on the other
$4,000 in bonds 1t IS thought possible that It
had been placed in the keeping Of a third per-
son, who was 10 forward It when Douglass had
got well away.
II seems that the present loss of the trust
company is Sl65.OOO not $4,000 as has been
inferred from the statement OF President Thorne
mat the maximum could not exceed the latter
hgure. He figuring on getting the $4,000
Tor which Douglass was bonded as a partial
reimbursement. OF the S165 600. S1Oz 600 rep
resents cash taken out Of the company's vaults
to redeem securities by paying to various brok-
- - what they had lent on them. The remaining
sooOO0 represents bonds still in the hands OF
company, would not discuss the criminal end Of
the case yesterday, which he said was entirely
" the hands OF the District Attorney but said
ne was devoting himself TO the civil side. He
would not say when he expected 10 have ready
the civil suits for the recovery of the bonds and
me money paid to recover them.
speaking Of the ease with which Douglass was
ADle 10 take such q large amount OF securities, a
Illustrate how securities are sometimes left in
such institutions during banking hours. 'Sev-
eral years ago another institution. in which
YES trustee, lost a large amount or money
eald the director. THE trustees were called to-
belher. One Of them, who rarely attended the
meetings and not known to many OF the
sixty employees. strolled cut of the board room.
AZ Few minutes he returned, and, to the
aston.shment OF his fellow trustees, pulled out
oI his pockets securities TO the value of nearly
elOU0OO0 which. he said, he had picked up
from various desks without any question"
The director was asked what he knew about
The connection OF eX-Mayor Quincy with the
case Mr.. Quincy has spoken for himself
was the reply. 81 have nothing 20 say about
him"
The directors OF the Trust Company Of Amer
lea and OF the Colonial Trust Company. which 3
10 be merged with It, viii meet at o'clock to-
DAY 20 finish the reorganization. In the new
building Of the consolidated company, now being
built IN Wall street, there VIII dining room
,or the employees. who VIII not be allowed to