New-York tribune., 1920-10-30
ALI Evidence
Given Travis.
Broker Swears
W. S. Fanshawe Says Comp
troller Made Surrender
Of Documents Condition
Of State Bond Sales
Produces New Letters
J. A. Wendell Declared to
Have Figured in the
Moral Obligation Deals

William S. Fanshawe, through whom
The State Comptroller's Office made
many of the bond purchases for sink
ing fund purposes which now are un-
der investigation, was the only wit
ness who took advantage yesterday of
the opportunity offered by Justice
Frederic Kernochan to give additional
testimony or amplfy statements al
ready made in the inquiry
Mr. Fanshawe, who was associated
with Albert L. Judson in the sale of
millions of dollars worth of securi-
ties to State Comptroller Travis, Of
fered letters from his own files which
seemed to indicate that Deputy Comp
troller James A. Wendell figured prom
inently in the so-called moral obliga
ton sale in which the state purchased
in 1917 bonds to the par value of
s2,013,000 at price or 7 points in
advance Of the price quoted in the open
market.
Surrendered Evidence
Mr.. Fanshawe's supplementary testi-
mony yesterday indicated that only q
part of the corresp spondence which
passed between his Office, representing
Judson, and the Comptroler's Office
had been produced in court when the
state letter files were subppnaed.
One of the disclosures made yestcr-
day by Mr.. Fanshawe was the fact that
one of the stipulations connected with
the moral obligation sale was the sur
render by Fanshawc to Comptroller
Travis Of all evidence and correspon-
Cence relating to the transaction. The
witness asserted that this condition
was made by Mr.. Travis at the time
the sale was completed.
Assistant District Attorney Pecora,
who is conducting the inquiry, told
Judge Kernochan that in the Comp
troller's files turned over to him for
his inspection he found no such letters
as those which were introduced from
the files of the Fanshawe concern.
No indication of the existence Of any
correspondence other than the two let
ters already introduced in connection
with the moral obligation sale was
mentioned by Mr. Fanshawe in the
testimony he gave two weeks ago.
Yesterday Mr. Fanshawe swole that
in addition to the two formal offers
made by him on June 4, 1917, and No
vcmber 8. 1917, preceding the $2,013,-
sDondence had passed between himself
and Judson and Deputy Comptroller
Wendell.
Only one cf these letters, Mr.. Fan
shave said, RENAME | in his possession,
The others having been turned over TO
Comptrollo.' Travis, in accordance with
The unusuai provisions under which
the moral obligation sale was made.
copy of the single letter held by Mr..
Fanshawe va produced and read into
+tc record b. Mr.. Pecora 1t was dated
October %, 1917, and contained many
references = prior correspondence.
Two Letters Produced
This letter alluded particularly to
one written by Mr.. Wendell to Fan
shave & Co. under date of September
l3, 1917, ana another written week
later.
The letter of September 13, the wit
ness said WAS written to him by
Mr Wendell at his (Fanshawe's) re-
quest and committed the state to the
purchase of approximately S2,OO0,OCo
worth of bpAds at q future date. The
purpose OF this letter was to enable
Fanshawe TO obtain credits on which
to carry the securities at the Empire
Trust Company until the state Nas
ready TO take them up
The Wendell letter of OCTOBER 10,
Mr. farshlwe said, contained denial
Of any agreement on the part of ~
state to purchase the S2,Ol3 900 block
l..
'iell under date Of October %, 1ol
Eanshawe called the Deputy Compt. ol-
,er's attent.'l to the discrepancies be
tween his TWO communications
In several instances the testimony
given by Mr.. Fanshawe esterday did
not jibe with that given by Comp
troller Travis, Mr. Wendell and Jud-
son earlier in the proceedings. Travis
Judson and Wendell had asserted that
the moral obligation sale WAS agreed
upon orally between Judson and Travis
year before ii was actually consum-
mated
Judson declared. when on the stand.
that Mr.. Travis had agreed to take the
bonds in 1916 at "a. but kept postpon-
ing the deal for nearly Il year, during
which time the market dropped to 82
Mr. Travis, in his testimony, said
that while he felt morally oblieei to
NHkc tHt securities at the agreed upon
price of "a, he finally compromised
with Fanshawe at S912, which meant
a loss of some SIS, 900 to the broker
and something in excess of that amount
to the state
MIR. Fanshawe said yesterday that
he merely acted as the broker for
Judson in the moral obligat.oN sale
and that their relations in this tran
Sactlon were exactly the same as those
IN prior bond sales to the state Fan
shave declared that while he had suf-
iered the loss as the result Of the
moral obligation sale he felt that il
should have fallen upon Judson and
intended to make the latter meet it.
He said that during the time he was
negotiating with the state for the tax
ing up of the S2.013,00O worth of bonds
lie was unable TO get in touch with
JudSon, although he tried in every way.
Judge Denies Charges
Mr.. Fanshawe said that in addition to
Mr.. Wendell's letter Of September 10,
accepting the bonds. he had received
numerous letters from Judson relating
TO the oral agreement the latter had
reached with Comptroller Travis in re-
gard 10 the securities. These letters,
he said, had been turned over to the
Comptroller after the bonds had been
raken up at the compromise price OF
S9Az
The attention Of Justice Kernochan
Was called yesterday to Il statement
said to have been issued at Republican,
state headquarters in Albany charging