New-York tribune., 1908-06-07
RTCkETED HIS ORDERS
ppOKER'S STRANGE DEALS
couse of Failure of Coster, Knapp
4 Co. Disclosed at Hearing.

h IL
denomination going on for about fortnight
80 Tinted States Commissioner Alexander
,,x brought out many facts explaining the sui
-ss NJ Charles Coster last April apd the fall
the Stock Exchange firm Of Coster. Knapp
8 90. Of which he was the senior partner, dis
-l,e,as. among other things. that the firm had
L. made a practice Of 'fbucketing" orders.
~. hearings before Commissioner Alexander
-.,cb will pc resumed on Tuesday. are in bank
-r,rcv proceedings, having their object the
sr-oxe-v OF assets Of the failed firm. The
.r,,-s was for about S2.oo0Oo0. and most Of the
x51I -sI UPON about a half dozen customers
The -ctsl list o. the customers Of the house was
OILY about fifteen
The members Of the firm were the late Charles
ooster and John VI. Knapp. the latter having
,.s, the stock Exchange member. W. B. Coster
ras formerly the senior partner. but retired
.-o-, the firm few weeks before the disaster
EA returned from Europe on the day after the
e,,cide Of his brother. The attorneys for the
-scsive- are anxious 10 examine him in relation
n the firms affairs. and have been trying. with
aid Of detectives. 10 find him, so that papers
-zv be served on him. At Shery's where he
has apartments. it was said yesterday that Mr.
rosrer had sailed for Europe three weeks ago.
ACTION IN SUPREME COURT.
Another legal proceeding arising out Of the
--oubles Of Coster. Knapp & Co. vas recently in
r4ttuted in the Supreme Court by William Lit
,sDsr. brother Of ex-Representative Lucius "
Isrsuer Charles Coster. it is alleged. got from
Marshall Spade- & Co z loan Of 100000 on
collateral worth s15o.0o0 , longing to Mr.. Lit
tsusr and the latter IS now endeavoring TO get
his securities back
The witnesses thus far examined before Com
missioner Alexander have been John NJ Knapp,
me surviving member Of the firm: Joseph D.
Lawrence II the chief clerk: Hicks Lawrence.
lis brother also employed at various times by
TIE firm; william Vogel the bookkeeper. and
John TcFnsend- In the examination Of the
Witnesses the names Of the principal customers
have not been mentioned, but they have been
designated as No /" NO. ." and SO on. and
oths-zlse by their initials wv. l." H. ]. B"
Fs" g brother-ir-law OF the late Mr.. Coster:
TRK" and e C. P" Some Of these Gus
toners il appeared. were interested with Coster
in john accounts
NJ Knapp testified that Mr.. Coster had told
hin thai No 3" was interested with him in
ore CT these accounts and would help him. Mr..
Knapp knew that there was q loss OF perhaps
100000 on that account. but was not worried
for Mr. Coster had told him that the five men
referred 70 were behind the account After the
failure NC o. OF H J. B." had told Mr. Knapp
tst he had suffered a tremendous loss, ap-
1ruxirnately 100000. Coster, It is alleged.
'bucketed" al margin orders, and was accus-
tunaed 70 hrpothecate the collateral given by
customers and use the proceeds Of the loans in
trading on his own account, being sometimes
ons OF short Of the market TO the extent Of from
5000 TO $4,000 shares
ALI, CONFIDENCE IN COSTER-
Both Krapp and Lawrence testified that they
had implicit confidence in Coster, who was prac-
tcaIly tie dictator Of the business. Nj. Knapp.
although & partner, deferred in everything 10
NJ Cosrer The examining attorney said:
NOW NJ. Knapp, from my examination OF
you I have practically come TO the conclusion
that YOU did hardly anything; in fact did moth
ing around the Office
Very little, except signing checks and attend
Ing 10 different things that NJ Coster asked
ne 10 at different times" replied Mr. Knapp
When he happened 70 be IN the cage" look
ing over az account, he continued, MI Coster
as e rule told me 10 90 out OF the cage and not
bother anybody II it
Did not his unwiIlingness TO have you look
a the books create any suspicion IN your ulind?
was asked
No, because they were generally busy IN the
cage or the cage was SO srnaIl," replied MI
Knapp
ASKED i he had ever examined the books 70
- how the firm was secured the j. O.
Marshall account or had ever made inquiry, he
fs1Aed that be had not, as he trusted Mt Cos
ter implicitly.
You know now that the practice Of the firm
vas II q customer came in and asked for or
save an order TO buy 1000 shares Of stock, 70
SCI Immediately LOCO shares short for the Ar1n'
Conf you?"
This present time do know it?" asked MI
Knapp.
III Lawrence, the chief clerk testified that
&c &c nFst idea he had that anything was wrong
-. the firm was on the day on which MI Cos
W Killed himself
s'St sou lou knew OF this large debit balance in the
Rev go UNI a. the time OF the formation OF tne
o. Al knew there was 4 debit there-
ecr, Knew the firm insolvenf then, dldn
q thinTs e cldnt know anything about the status
ai1k Gid you think about it? Al didn't
tsith az oh4y followed my orders had per1ect
og he confidence IL NJ. Coster, and only carried
OiosfA' and thai what was paid IoI
N. <pFil 30, when the books were balanced.
s,s lawrence said. the joint account Of w. 3.
ooster owed the firm S66 lib. Examined