New-York tribune., 1920-10-22
Gibbons Denies
Sharing Profits
With .Judson
Declares His Firm Kept All
Money Made on $6,OOO,-
600 Bonds Sold to Travis
ON Sinking Fund Account

George e. Gibbons, head Of the
brokerage firm Of Gibbons & Co., was
the principal witness yesterday when
Assistant District Attorney Pecora con-
tinued the John Dos inquiry into the
methods employed by the State Comp
troller's Office in purchasing securities
for sinking fund purposes. Yesterday
was the eleventh day Of the investiga-
ton, and when Justice Frederic Ker-
nochan ordered an adjournment until
to-day there was nothing to indicate
that the end was in sight
The investigation is being conducted
IN an effort to ascertain whether
crime has been committed in the buy
ing of bonds for the sinking funds. It
New York bond trader, made profits
of nearly $1,0O0,0OO on the sale of
securities to the Comptroller's office.
Gibbons Talks Frankly
All but very few of the bond pur-
Ghases made by Comptroller Eugene M.
Travis since be took Office in 1915 we're
transacted through w. S. Fanshawe 4
Co., acting for Judson, or through Glib
bons q Co. Mr.. Pecora has endeavored
to show that the blocks of securities
obtained through these houses could
have been had from other concerns at
prices which would have yielded the
state greater return.
Gibbons was frank in his statements
TO Mr.. Pecora yesterday and Indicated
that, while his firm had conducted
negotiations with the Comptroller's Of
tlce with the idea of profiting by the
hOn6 n cot In
Colonel Fairservis, had anything to
conceal
Mr. Pecora delved into every sale
made by Gibbons & Co. to the Comp
troller since 1915 and found the wit
ness willing to provide any informa-
ton he lacked. The testimony devel-
oped that the firm had sold to the Comp
troller's Office bonds to the par value
of more than $6,O00,0OO.
The prices and yields in nine Of the
sales were compared by Mr.. Pecora
with the prices and yields offered by
Gibbons g. Co. to the public on the
same bonds sold to the state These
offers to the public were made in print
ed circulars and in many cases showed
that the yield offered was higher than
that which accrued when the Comp
troller bought the bonds.
Firm Kept All Profits
Mr.. Gibbons explained that in most
cases the. circulars used as basis of
comparison were issued by his firm
month or more before the sales men
toned by Mr.. Pecora were made. He
declared that the bond market fuctuat-
ed from day to day, so that while the
prices quoted may have prevailed when
the circulars were issued, they had
probably advanced or fallen by the
time the sales were made to the Comp
troller.
Mr.. Gibbons denied that any person
outside of his firm ever had an interest
in the profits made from the sales
to the state and insisted that no part
of this money was disbursed to others
than those connected with the concern.
The witness said that Comptroller
Travis had bought stocks and bonds for
his personal account from the firm and
carried an account from June, 1916, to
July. 1920, when it was closed at the
suggestion of Colonel Fairservii. The
stocks bought through the firm by Mr..
Travis, the witness said, resulted in
loss to the Comptroller
The investigation will be continued
this morning, when Comptroller Travis
will be recalled to the stand.