The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-15
Comptroller Says 1t Would
Be Unwise for Him to
Discard Brokers.
CANNOT BUY SMALL LOTS
Denies State Is Fleeced, AL
though Such Charges Started
Back in 1915.


persons made profits totalling s1,0Oo.-
900 in selling bonds to the State Comp
troller for sinking fund purposes In
the five years that Eugene NJ. Travis
has held that office. Mr.. Travis is still
Of the opinion that he made a mighty
good buy every time he accepted In
behalf Of the State a lot offered by
those persons. He was guided in his
purchases as Comptroller, he said. by
the same principles employed in the
fruit business. which occupied his tall
ents before election.
This information was vouchsafed
yesterday when the Comptroller oc-
cupied the witness stand all day in
the John Doe inquiry being conducted
with Chief Justice Frederic Kernochan
of Special Sessions, as Magistrate. into
the way in which the Comptroller
bought bonds for the sinking fund.
Mr.. Travis assumed full responsibility
for every sale Of bonds to the State
since January 1, 1915. when he assumed
office. but declared he often consulted
his bureau heads and deputies. particu-
larly Wendell and Carney. This contra
dicted James A. Wendell's testimony on
Monday, when he said he never was
asked anything more than Has the
state any money to spend?"
In purchasing bonds through brokers
instead of going into the market himself
Comptroller Travis testified he followed
his predecessors.
Drawbacks to Market Buyins.
''Tne Comptroller has NJ f&cilities to
go into the market himself" he declared
There is no appropriation TO employ
men Of the type Of bond statesmen, who
watch the market closely. keep in touch
w..h various buyers. know where bonds
are obtainable, who holds them and all
that. And don't think It wise to en-
ploy such q man II there were funds II
the Comptroller's man went into the
market every one would Immediately
know that the State was in the market
for municipal bonds and the price would
go up"
But don't you know that Judson has
done just what you say would be inad-
visable for the Comptroller's man to do.
namely, he has gone into the open mar
ket and bought bonds In large quanti-
ties that everybody understood were
being bought for the Slater" asked
Ferdinand Pecora, Assistant District At
torney.
He went there as Mr.. Judson." Comp
troller Travis replied. III I went there
as Comptroller things would be very
different"
"non't you know that the Guaranty
Trust Company. In It's sales to Judson.
thought Il was selling to you through
Judson7''
mo one was authorized to say he was
an agent Of the Comptroller's office"
Mr.. Travis replied.
At numerous points Comptroller
Travis insisted on drawing a distinction
between the market value OF bonds in
small quantities and bonds in large
quantities. The quotations appearing In
fhe daily press and in financial papers.
he said, represent only transactions In
small lots. Though his purchases may
have been several points above printed
figures, he said, he never would concede
that they had been above the market"
because of the size OF the transactions
In which he was concerned.
Mr.. Pecora sought to find out how the
Comptroiler got his knowledge OF the
bond market. Mr.. Travis explained that
he read closely the financial pages of sew
erai newspapers and financial periodicals
and was In the habit of seeking all pos
sible Information In n quiet way from
vario ls securities statesmen who called
on him. as we'll as by consultation with
his assistants
Justice Kernochan wanted to know
why the Comptroller's Office did not buy
bonds in small quantities. so as to OBJ
tain advantage Of what the Comptroller
admitted was lower price. II would
be too difficult to accumulate In that
fashion the millions OF dollars worth Of
bonds that the State requires as invest
ments for its sinking funds, Mr.. Travis
explained.
Mr. Pecora here reminded the witness
Of the ss5o.ooo profit Albert l.. Judson
made in his transactions with the State
and asked him categoricaliy about each
transaction. beginning back in 1915.
when Mr.. Travis assumed Office. The
Continued on Eighth Pooe.