The sun., 1908-06-07

whose name ls mentioned on the books pur-
chase such stock1 A. No.
O. Was any commission paid? A. No.
O. Was that regular transaction7 A. As
far as know.
q, You know that II did not 20 through
the Stock Exchange? A. do.
0 Was It not an irregular transaction?
Al don't know.
o. Aren I Irregularities Of that kind called
! bucketing? A. don't know what you call
| buck citing.
| o. Isn't II what lie commonly called bucket
ips9 A. Yrs.
The term No 2 in the frst question is the
method devised to keep secret the names
| Of the frm's customers. Numbers from
| 1 to are used and II is stated In the court
| records that these refer TO men having
| the initials w. L.. H. j. B.. H. g.. V. X. X.
! and Z. c. p. These men all have claims
against the firm. amounting In one case
| William I.ittauer, brother OF ex-Con-
| gressman Littauer. has brought suit through
Page, Crawford a Tuska against Marshall
! Spaner a Co.. who did great deal OF Cos.
Of securities entrusted by him 70 coster
| to be sold. CostSr deposited them with
| Marshall, apader & Co. as collateral for a
| loan OF about 100000. An interesting
situation has arisen on this account. As
innocent parties Marshall. Spader q Co
canpot be forced to return the securities:
! However. they are the only members OF
the New York Stock Exchange with claim
against Coster, aud counsel for Mr. Littauer
are trying to show that for that reason
they should first levy against Coster. Knapp
4 Co.'S seat on the exchange whlcn aG,
| cording to the rules Of the exchange shall
be sold and applied first for the protection
| Of claims Of other mernbers OF the exchange.
Coster will be covered by the sale OF the
seat and only $4,000 of the securities or
| Mr. Littauer will be needed to cover the
eest Of the loan. This will allow mir. i.it-
tauer to regain about $500 OF his stock
!, Mr.. Menken. on the other hand, as repre-
| sentative OF the general creditors maintains
that Mr. Iittauer's collateral was put up
expressly to cover the 500 900 loan and thnt
no levy could be made on the seat unless
| the collateral turned out to be insufficient.
| II Justice BischofY in whose hands the de-
! cison Of this case lies. decides in favor
! Of Mr.. Menken the $70,O00 representing
| the value of the seat will be available for
| the general creditors.
Mr., Meuk en- yesterday gave out the foi-
lowing statement in regard to the position
| of his firm:
| Ineregsrd to Coster. Knapp 4 Co. We would
| say the inquiry we are conducting as counsei
! for Mr.. Werner, the receiver. is simply the
usual bankruptcy proceeding, having tor ns
| object the discovery OF assets.
| The proceeding thus far indicates that al the
! time Of the formation of Coster, knapp& Co.
the Arm was indebted to very large extent
| and that this was concealed from Mr.. Knapp.
who invested practically his entire fortune
| In the business.
| The records Of the methods OF the firms
busn ess ndica ties that the entire AFFAIRS OF the
| firm were dominated by Mr.. Coster. who had
| given instructions to the clerks to give out
| no Offices or any information as to any trans
| action except by his orders and that these
nnrlt In fn H.
mony of the clerks, explicitly obeyed and
! that the Junior partner Mr.. Knapp. was
| evidently kept in ignorance OF the firms
affairs.
Fairness demands that we should say that
| while we have evidence of gross Ignorance
| on the part Of Mr.. Knapp Of the firms affairs
we have brought out no proof OF any knowl-
| edge on his part of the buck citing transaction
referred to, although the evidence ia clear
| that for seven years such transactions were
! repeatedly indulged in.
| The losses arising from the failure will
approx ximate 81. .oO0. 900, and the assets are In
! the neighborhood OF 100000. unless the life
insurance Of si00 Goo on Coster's life is recov-
| erable by the receiver.
1t seems that the premium Of the life In
surance was paid out OF the firms funds.
and we have reason to believe that there is a
| fair chance of the receiver obtaining the
! amount of this INSURANCE.. as under recent
decision in the Court OF Appeals the courts
| have held that where money was stolen from
the firm and invested and used to pay life
insurance premiums the creditors may elect
whether they will take the premium or the
J result OF the payment thereof.
Charles Coster it is shown by the books
! of bis frm, was either short or long OF the
| stock market all the time. He was In the
habit of carrying from 80, 900 to so 900 shares.
The firm had q certification account with
l Natl Dan nj
which was squared up every night. On
| March 81 it had debit balance with Mar
shall, Spader 4 Co. Of .000 secured by
collateral valued at $45O. 600 During the
! next month this balance rose to $3.50 900.
indicating that the sharp upward move
| ment In the market at that time was hitting
Coster harder and harder every day. On
April 28 Lawrence told Coster that the
| Hanover Bank had threatened to close
him out unless he put up more collateral
left the office that day knowing that he was
hopelessy bankrupt. The market was
! going against him more all the time That
| Lawrence went to Coster's home that even
4 fheha not been known before, The inter
view. which Coster presumably hoped might
| ssDw him some way to tide matters over
1 until turn Of the market set him on his
feet again. was. evidently unfavorable,
1 for he shot himself in the temple few
minutes after Lawrence's departure. just
! as his wife had come in the front door Of
| his house and had called to him.
Lawrence in discussing his position with
the firm said that he had gone to work first
t;for S25 a, week. This was subsequently
/ raised gradually to $4,000 year He said
that he sdpposed the sudden advance to
/ 600 year had been given him because
7 he once told Mr.. Coster that he could not
live on less than 500 or $500 q month.
I Receiver Louis Werner is complainant
against George Bowen. arrested last night
ON a charge Of stealing from the office Of
Coster, Knapp 4 Co. two bound volumes
1 of. tho Finareioi Chronicle worth 500.
cor FIGHTS WITH A, BURGLAR.