The Bridgeport evening farmer., 1916-05-02


 Through Long Intimacy
 With Bankrupt Banking
 Houses ActiVitieS-Knapp is
 Questioned as to How Ger
 tain Creditors Were Pro-
 tected.
 Trustee Chamberlain Tells
 Referee in Bankruptcy How
 He Game to Write Report For Auditor Who Examined
 Records of Banking House
 Involved Finances of Inter
 locking Projects Keep Inves-
 tigators Busy
 Attorney John c. Chamberlain. trus tee of the bankrupt banking house o1 Burr & Knapp, and for many years closely associated with the business of the bankers through professions activities in the interests of persons dealing with the banking firm, went al great length into the business history ness before Referee in Bankruptcy
 
 He followed on the witness stand Herbert M. Knapp. whose connection with Burr & Knapp, the Watervliet Hydraulic Co.,, and the Georgia Loan 6 Trust Co., was the object of the in quiry of Attorney SpotsWood D. Bow CTS. Attorney Bowers appears in the interest of several creditors of the banking house. and he also has been retained as a special investigator. by States Attorney Homer s. Cummings who has announced his intention of 8 thorough probe of comp 1aints of al legged criminal aspects of the bankine houses activities.
 Knapp was questioned at length as to why certain depositors apparently had been able to save their funds from the wreck; and Chamberlain was questioned too. for a long time as to his knowledge of the banking house s methods of doing business.
 Chamberlain declared that the in- terests of Knapp himself were upper m ost in the financial transactions be- tween the .Watervliet Go. and Knapp; that loans made to the Waterv11et Co. were all in the interest of Knapp him. self.
 Taking up the matter of an audit of the Burr & Knapp business, Bow CTS went at length into the manner in which it was prepared, and finally brought out that the report was writ ten by Chamberlain himself, rather than by the auditor.t This Chamber lain explained to be for the purpose of having the report conform to legal requirements.
 These facts were e1icited from Her bert M. Knapp in addition to- those brought forth in the morning session:
 If any Ietter-books or other books, such as bills receivable or tEtickler," as it is called in banking parlance are missing, they have not been lost through the connivance of Knapp who declared that he has mot taken the first step towards covering up.'
 The account of Elizabeth Johnston, showed a debit of $13,0 900 at the time of failure.
 It was explained upon the fact that she was a large investor and that were constantly changing in amount of interest than did that of depositors that her money might be kept for reinvestment by the firm. It was the practice of Burr & Knapp to pay all investors a larger rate of in Lerest than was paid to depositors-
 Similar conditions surrounded the special account of Alice M. Sawyer, of the day before the failure. to the ex- ent of S2,20O in excess of what she ow- sd Burr & Knapp.
 It was disclosed that the late H. B. seeley had pledged his inheritance from the late P. T. gBarnum for sew sral thousands of dollars with the Burr & Knapp firm before it's failure, which assets have not been included in the schedule of assets filed with the referee
 An effort to include 9 large farm near Depew, N. Y., known as the Sietz property among unlisted assets was 1ot successful for Knapp testified that his was a speculative investment that mad previously been divided into shares only a portion of which are still owned by Burr & Knapp. t Though trial balances were made by he bookkeeping department month V Knapp could not swear that he reg lIarIy studies them to ascertain wheth- sr his firm was solvent or otherwise. 1t was admitted by him that an auto mobile account amounting to liability ,f between $12,00O and 5000. sal try accounts for many years, and loss IS on Canada Corundum Company stock amounting ito $72,0O0, had at east since 1913 been carried as assets ,f- the company when they should have 1een placed in the suspense or liability 
 Inquiry into the number and dispo- ition of insurance policies on the life 1GIDeIL M. -fAIapp 0SNCAOPOO I44oI k1 o. were now z1held@ by the First Bridgeport National bank as collateral, put that two given to the Georgia loan and Trust Company as collateral nave probably been allowed to lapse trough non payment of premiums. An .ffort to place responsibility for this omission was not productive.
 The question of mortgages recorded ,nly by street number and an effort o ascertain whether a mortgage for ,S8, 900 that had previously been turn d down by another banking insti- ution had been substituted by the Burr & Knapp officials the day before allure in place of a gilt edged one took ID considerable time of the inYestiga- or. It developed that this -inforTna- ion could only be obtained from a mortgage register the whereabouts of which is now unknown to officers of he company or the trustee.