New-York tribune., 1908-07-17
W. B. COSTER TESI[FIES
FIRM MADE S1,6OO,OOO.
Used 1t to RecoUer Customers Se-
curities Sold bu Brother.

W. b. COSteT, one or the members OF tIle Idlieu
brokerage firm of Coster, Knapp & Co. and
brother of Charles Coster, the senior member OF
the firm who killed himself in April, was a witness
yesterday at the hearing before Peter B. Olney.
of No. 6s William street the referee appointed 70
examine into the affairs of the firm
The witness began by stating that he never
looked at the books of the company and knew
nothing of the condition of the firm except as told
to him by his brother. He added that the only
specific instance which he could remember or MS
brother telling him of the FIRMS status was on
June l. 1906 when, he said. he met Marshall and
spader of Marshall. Spader & Co. at his brothers
house. when they told him Charles Coster was in
debted to them in the of 100000. They agreed
to take five thousand shares of Steel here ana nVe
thousand shares in London to clear up the ac-
count. he said and the firm bought the shares the
next day, and the account made $4,000 IN ehree
months.
Asked If he had any further conversation with
his brother about the business, he said he de-
rnanded full statement from him the next day as
to the condition of the firm and his brother
showed him statement in which it was seen tnat
the firm in debt s1,-00,00
He had sold the securities of our customers,
said the witness, land speculated on the proceeds
We had a stormy interview, but he promised not
to do anything like that again, so we went on he
had heard of something good in Union Pacific. We
bought in that and Southern Pacific, and In Steel
and between June 1 and December l, 1906, we made
q profit of 81, ,6O0000 I that all the securities
our customers had with were bought back
He added that the statement shown him by MS
brother indicated the Indebtedness of SAO0W to
u c. NJ" account the books. Replying to
question of Harlan F. Stone counsel for William
A. De Long, trustee Mr.. Coster said 1t never oc-
Cured to him that the u. G. NJ account might
he for 7 G. Marshall. of the firm of Marshall, Spa
der & Co. and that far he knew his brother
had no Joint account with Marshall He and his
brother had a joint account in some steel transAc-
tions and in the purchase of Union Pacific and
Southern Pacific in the fall of 1905 he said, but ne
denied any knowledge of the w b e & e q. &C.
count az carried on the books of Coster, Knapp &
Co.
He testified that he left the firm on April II.
1907 and was to get 5000, but did not receive
anything He supposed it had been credited TO him
on the books of the firm. but declared he had re-
cetved no cash at the time of leaving the firm.
Tho witness said he knew of instance while he
was in the firm of the firm ''bucketing,' but said
that since he had returned to the city this time
he had fond by looking over the accounts that
that method had been applied against him in some
transactions he had with the rrh aIter lie seVereu
his connection with 1t.
Asked by Mr.. Stone if he had ever had a Joint
account with Mr.. Gray, he sad
ut was not joint account, but we had a busi-
ness transaction lie is my father-in-law, H. ".
Gray When the exchange was moving into ITS
new quarters got tip that the price of preferred
Steel was going up by the time the exchange
opened. 1t was closed for two days / telephoaed
UP to Mr. Gray and suggested that he buy 1000
shares In London 1 also bought 1000 shares in
London at s6L I sold mine when the ex-
change opened at 1o1 and made 5000. tsle-
phoned hiIi to sell too, but he said he had dined
With Mr. Morgan the night before and that Mr..
Morgan told him Steel was going to lS, so he kept
his and sold later at somewhere around So.'
Mr. Coster stated that he had a joint account
with Mr. Baruth personal friend, and that
thew sometimes speculated together. He said he
had no Joint accounts with Henry ]. Braker, Will
lam Iittauer or William Kittridse. but knew them
all personally
John NJ. Knapp another member Of the defunct
firm. testified that his principal work was to sign
checks and to look after the securities. He said
It was his custom when he went out of the city
10 sign checks in blank to the number Of about
ten a day for the time he to be absent, these
to he filed In and indorsed by the cashier need
ed He was asked to identify check made out to
the New York Life Insurance Company on March
2s but he said he knew nothing about It. except
that he had signed a number OF checks before he
went to Cuba and he supposed it was one OF those.
The hearing will be continued at 1l;Se a. m. Tues