The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-07
JUDSON PROFIT
IN STATE BOND
SALES SS5O,OOO
Fanshawe. Broker, Tells Of
S2.013,000 Deal Above
Market Price.
SELLERS STUNG ONCE
Middleman Still Waits for
$4,000 Alleged to Be Due
in Transaction.
JUDSON IN COURT TODAY
Travis objected to Buying
Some Securities After Quo
tations Dropped.
SELLERS STUNG ONCE
JUDSON IN COURT TODAY

Albert l.. Judson's success as a
"shrewd bond buyer" brought him in
FIVE years a profit Of sS50,0Oo through
his purchase of s3O.OOO,00O worth Of
municipal bonds for the State sinking
fund. That was shown yesterday at
the John Doe inquiry being held be-
fore Chief Justice Frederic Kernochan
of Special Sessions to determine if
there has been anything criminal In
the way the office of Eugene M. Travis,
State Comptroller, acquired bonds for
the sinking fund.
In addition to the transactions be-
tween Judson and the State Comp
troller's office testified to on Monday,
which were cleared through the Met
ropolitan Trust Company and in which
Judson's profit was $3.50, ,315, the testi-
mony of witnesses yesterday dis
closed that in four transactions cleared
through the Mechanics and Metals
National Bank and involving S4404, 900
par value bonds, his profit was $f17,-
775.71, and in five transactions cleared
through the Empire Trust Company,
his profit totalled S431 1857. In the
transactions cleared through the EN-
pire Trust, Judson acted through n
broker, William S. Fanshawe. of WILL
lam S. Fanshawe G. Co, II Pine street.
In all these transactions. II developed.
both Judson and Fanshawe acquired the
millions of dollars worth of securities on
their credit, and because 1t was generally
understood that Judson, at least, was
buying for the Comptroller's office, with
out having to put up any of their own
money or securities as collateral.
Bond Dealer Is Shy in Answering.
Fanshawe. who was the principal wit
ness. gave Ferdinand Pecora, Assistant
District Attorney. considerable difficulty
in getting out the facts In connection
with a sixth transaction with Judson.
AS he took the stand Pecora asked him
to sign a waiver of immunity. Justice
kernochan explaining what it meant.
The bond dealer refused to waive his
constitutional rights. He sought several
times TO refuse to answer questions. but
when the Justice explained that he could
do so only on the ground that the answer
might tend to incriminate him he
changed his mind and replied.
In October, 1916, Fanshawe testified,
Judson informed him the Comptroller
would be ready in about a month to
purchase $4,000, 900 worth of bonds He
busted himself and got them together
within the month. but Judson then in
formed him that the State was out of
funds. The deal dragged along for a
year and was not completed until No
vember. 1917. Fanshawe testified
Then he and Comptroller Travis got
together. the Comptroller agreeing to
purchase s2.013,00O worth at s9h. This
was three OF four points above the pre-
vailing market price. Fanshawe ad-
mitted. municipal bonds having slumped
badly after America entered the war,
but was far below the price Of "a plus
at which he had bought them for JUDI
son and the figure about which they ex-
pected the State would buy them in
November 1916.
Il cannot buy them at that 1915 fig
ure In justice to the State" he recalled
Comptroller Travis said during their
parties. He recalled also that Mr.. Travis
denied that Judson had been commits
stoned to get the $4,000, 900 parcel to-
gether.
A loss of sss,ooo was involved in the
sale of the part Of the $4,000 900 worth
below the purchase price, Pecora brought
out. but finding out who bore the loss
proved difficult He brought out in the
meantime that while Fanshawe had pro-
cured the bonds for Judson and was
holding them for him, Fanshawe was
holding them through the Empire Trust
Company, which had advanced the cash.
Fanshawe testified he gave his notes 10
the trust company to compensate Il and
looked TO Judson for repayment But
he has not been able TO reach the bond
buyer since, except several times by
telephone. when. ne testified. Judson
told him TN try to get Il to you
stiI Holds s1.ss7, 900 I'm bonds.
The s1,ss7,000 worth OF bonds collected
In 1915 and not sold to the State are
still being carried for him by the EN-
pire Trust Company. Fanshawe ad-
mltted. His notes were not renewed.
he acknowledged. but as yet the COM
pany has not taken any steps against
him, and ne in turn has taken no legal
action against Judson.
In answer to Justice Kernochan's sug-
gestion that Il seemed remarkable that
both parties had permitted such a sum
to remain outstanding for so long, Fan
shave said the Empire Trust knew II
would get the money from him any
way, even though he did not succeed
In getting II from Judson.
Bertram Cruger, treasurer Of the
Metropolitan Trust Company, testified
that for handling approximately s10,-
100000 worth of bonds on which Jud-
son made profit OF more than 1890. 900.
the trust company received only $3.50 in
fees--a charge made for services and
applied only on one transaction. Yet
the company had paid out for Judson
and received in his name millions of
dollars