The Bridgeport evening farmer., 1916-04-05
Continued From Page one

upon the stand to testify as to trans actions that appear on the Burr & Knapp books, are matters that are not settled in the minds of the investiga- tors. 4 Herbert M. Knapp is under arrest, on g. civil action alleging fraud, and brought by the Hungarian Sick Ben eft society. He was taken into cus- tody August 8, 1915. It was charged that the society deposited $4,o0O with the firm with the understanding that the Burr & Knapp Co. was to forward the money to members of the society abroad. The funds are alleged never to have reached their destination.
 This is said today to be only one of a series of complaints that number more than half a hundred, each of which will be fully investigated by the officials
 Though there have been runors of such investigations for more than a year, this action upon the part of States Attorney. Cummings is the first definite step to satisfy the mind of the public that the concern transacted business. strictly acord'ng to the bank ing laws.
 Attorney spotswood D. Bowers said today: "The books of The company have been investigated before, but you 3vestigation is completed every fact in connection with the conduct of the Burr & Knapp business for 15 years will be uncovered. I have been told to sift the complaints to the very bottom and I expect that within two days shall be able to make my report
 A ruTnor to the effect that a young woman who formerly worked as book keeper in the Burr & Knapp offices was being sought to e1ucidate matters and that her absence in Europe might prove a serious setback to the investf- gation, was discounted today by MT. Bowers who stated: 'tI am now as- sured by MT. Knapp that this young woman will be brought back to this city and that she will be here when needed
 When the investigation by the states attorneys office in conjunction with demands of clients represented by MT Bowers in his law practice began, MT. Knapp is said to have re- fused permission to view the books Search was made for them without success. Like applications to the trustee met with little result
 An appeal to Referee John W Banks resulted in an order being transmitted from the court to Trus- teet Chamberlain to produce the books They were then located and taken from the barn.of George Cham berIafn, a, brother of the trustee, who said they had been placed in his cus- tody for safe keeping.
 When seen by a Farmer reporter Referee Banks said today. ttI under stand that the investigators met with some difficulty in getting the books from some of Burr & Knapps ex- clerks and from. MT. Knapp himself As soon as I was applied to in the matter I sent MT. Bowers to Trustee Chan1b erlain and the books were released to those now examinging then.''
 sl-a17 H., -.-1,.,+ r,,,,,.,. 41. e.41. 4 coming examination of MT. Knapp would be conducted, Referee Banks said: 'tThe federal laws provide for a hearing whenever a creditor petitions for one. Such a hearing will be held before me and the bankrupt will be facts under oath.''
 Disclosures made today in the of- flee of the referee show that the to- tai claims proved to date amount to $621,6 ,670.40 against which the trus- tee in previous reports has shown as- sets in, cash of only about $25,0OO. As the bankruptcy law provides for pay ment of a first dividend only when the assets total per cent of the i'm debtedness, none of the creditors in this instance have received one penny as result of the failure Referee Banks, however, has ordered Trustee Chamberlain to make another report at once in. the hope that there may be an opportunity to pay some divi- dend to the creditors, many of whom are in actual want as a. result of the failure.
 Investigation by the states attor- ney's office came as the result of more than half a hundred individual complaints, insistent1y demanding that the probe of the conduct of the Burr & Knapp business for the last Is to IS years be made.
 Some of these complaints have caused the authorities to investigate most closely the conduct and status of the business for the last six years. Limitations that reached the states attorney may lead to further federal examination of, the books.
 The question as to whether rela- tions of a, financial character between the Burr & Knapp bank and the sub sidiary concerns, may have led to what is known in banking circles as washing cheeks, is now s11nder ex- animation by the expert accountants in charge of the books.
 < Those in, close touch with the sit uation, while expressing the belief that under the Connecticut statutes, such liability, it would tend to show that a concern practicing such methods would be tconstructive1y inso1vent in the eyes of the federal officers
 The process washing checks as practiced by those having to meet ob- legations at once, while having no bank balance equal to the amount needed is to make a check for the amount, dated ahead. This check is then exchanged for a valid one with someone who will consent to hold the check dated ahead, for few days The check received is banked on the date. of the check, the money drawn upon it and the obligation satisfied. To all appearances the credit of. the person resorting to this method is maintained while in fact he is sub stantialIy bankrupt and but for the wash or exchange of checks would have his notes or other paper go to protest.
 Though complaints warranting in- vestfgation have been received by the