New-York tribune., 1917-06-12
Seek
Missing 100000
AS Banker Sails
Hungarian Funds Were In
trusted to Kennedy,
Mitchell & Co.

An involuntary petition of bank
ruptcy was filed yesterday afternoon in
the United States District Court
against the firm of Kennedy, Mitchell
e. Co., Inc, of 35 Wall Street, whose
president, William A. Kennedy, is now
on his way to Spain, and whose affairs
are in the hands of District Attorney
Swami and the State Banking Depart
ment These officials are now awaiting
cablegram from Budapest that will
show whether 100000, which had been
intrusted to Kennedy, Mitchell & Co.
by Hungarian banks in this country,
has been delivered to the Hungarian
Banking and Trading Company of
Budapest.
The bankruptcy petitioners were
Frederick A. De Pills, of Mattoax, Va,
with claim of s2l ,240; Mrs. Georgia
B. Pratt, Of Chicago, who claims $500,
and the Mutual Alliance Trust Company
of New York, with claim of Sl,362. A
creditors committee was organized yes
terday, with Daniel w. Blumenthal, an
attorney, of 35 Nassau Street, as chief
counsel
According TO Assistant District Attor-
ney Dooling, Peter Nemeth, the Hun
garian vice-president Of Kennedy,
Mitchell & Co., is sure that the ex-
pected cablegram will show that the
money has been received IN Budapest.
Mr. Dooling also said that Mr.. Nemeth
has produced copies Of contracts signed
by representatives of the French gov.
ernment which bind Kennedy, Mitchell
e. Co. TO expend as high as 6OO,OOO,Ooo
francs in rebuilding parts Of the dew
astated sections of France.
Kennedy, the president, who is now
nearing Spain under the surveillance
Of an agent for the Department OF Jus
tice, is en- Englishman. thirty-eight
years old. He is cripple. He came
here in 1915. and with Curtis s.
Mitchell. of Pittsburgh; Herman Win
ter, former general manager of the
Cunard Line, and Hewitt S. West. of
Glens Falls. n. Y. organized the com
pany in 1916, with an authorized CAPT
talization of s1.0O0.0O0, for foreign ex-
change business. The Offices were ad-
joining those of j. p. Morgan & Co..
and eighty clerks were soon employed.
Kennedy made repeated attempts to
establish state, or national, or even
a private bank, and in this connection
he obtained the Endorsements OF Dep
uty City Controller +. ID. Fisher and
Dock Commissioner r. A. c. smith;
Last November. after about 100000
had been actually received from the
sale of stock. the capitalization was in
creased TO sl0,000.000. A few months
later Mitchell. West and Winter, one
after another. withdrew from the di-
rectorste. Kennedy was receiving a
salary of $4,000 and Nemeth was draw
ing $4,000.
According to the District Attorney,
literature sent by Kennedy through the
mails soliciting purchases of stock rep
resented that about s5.500,000 had been
subscribed abroad. The books showed
that many subscribers in this country
had been permitted to make cash pay
ments of 10 per cent and give their
notes for the balance. II was the eX-
animation of the books by the State
Banking Department that showed that
of $500 900 transferred 10 foreign
countries, 100000 had not been paid.
Kennedy is supposed to have left TINS
city for Havana several weeks ago.
| His wife. who is with him. sailed on
steamer from this city on June /. ina,
steamer touched at Havana and Ken
nedy Joined his wife. The steamer
should reach Spain in few days. Mr..
Dooling's investigation shows that
when Kennedy left New York the al
fairs of the concern were being liqul-
dated, and Kennedy said he was going
! to France to look out for his contracts
there. Regarding these contracts. Mr.
Blumenthal, for the creditors, said last
night:
-Four weeks ago told the representa-
tive of Kennedy, Mitchell & Co. that |
was in possession of information which
led me TO believe that the statement
given out by Kennedy. Mitchell q 90.
70 the effect that it had made contract
for construction work with France call
ing for more than 75,000,000 francs was
looked upon by my clients who held
more than $4,000 worth OF claims
against Kennedy, Mitchell & Co. with
grave suspicion and that my clients
were under the impression that this
information was given out BY kennedy'
Mitchell & Co. in order 70 give Mr
kennedy, the president of the corpora
,ion. an opportunity to leave this coun-
10 Nth a million dollars in cash"