The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-08
TRAVIS BOUGHT
BONDS ISSUED BY
REYNOLDS TOWN
Large Profit On Securities
of Long Beach, Which
Contractor Rules.
MARGIN OF 20 POINTS
Col. Fa,rservis Of Brook
lyn Sold Millions to the
State Sinking Fund.
GIBBONS & co. FORTUNATE
Amount Not Stated, but Said
to Eclipse $850,000 Cred
tied as Juds0n's Gains.
MARGIN OF 20 POINTS
GIBBONS & co. FORTUNATE

Eugene NJ. Travis. State Comptroller.
is no easy mark" TO sell bonds to, ac-
cording to Col. Thomas Fairservis.
principal witness at yesterdays SEES
sion Of the John Doe inquiry to de-
termine possible crime in the manner
in which the Comptroller bought bonds
FOR the State sinking fund.
Nevertheless. II developed from the
Colonel's testimony that George q.
Gibbons & Co., bond dealers. in which
Col. F'airservls is partner. succeeded in
selling to the State Several million
dollars worth" of municipal bonds Tor
sinking fund purposes, on which the
firms profit ranged from nothing to
very large sum--eighteen, nineteen,
twenty points"
This admission placed the Colonel and
Gibbons & Co. on an even higher plane
than Albert l.. Judson. whose transac-
tons with the State Comptroller's office
were shown at preceding sessions TO
have given to him a profit OF almost
$4,000. For although Judson's profits
may have looked larger In figures, they
represented only about 3 per cent. on
the par value OF the bonds he sold to
the state. The usual commission of
bond dealer. according to Ferdinand
Pecora, Assistant District Attorney.
who is conducting the proceedings. is
less than per cent.
Col. Fairservis Is commander OF the
Twenty-third Infantry in Brooklyn. He
IS prominent resident. OF that Dor
cugh, whence came lot of Travis
support when he has been running Tor
office but where, incidentally, origi-
ated the charges OF favoritisnn toward
certain brokers that led to the John Doe
inquiry. Mr.. Pecora brought II out
early in his examination that Col. Fair
servis did not enter the bond business
himself. as a partner in q firm. until
July l. l3l4, six months after Comp
troller Travis assumed that office
The militia commander, in describing
his occasional confabs with Comptroller
Travis on the subject OF Lond buying,
rema rk ed that "whenever l offered him
an issue / mentioned a lower yieid 10
PIN than / know the Issue would give
, .cause l had an idea he'd try to beat
10 down."
Vow Enters Long Beach, L. 1.
The exact total of the transactions
between Gibbons & Co. and the State
Conptl oller WAS not disclosed, Mr.. Pc
cora striving most of ali TO uncover the
"details OF how the company acquired and
Gfterward sold TO the State bond issues
of the village of Long Beach. l.. l., where
ex-senator william III. Reynolds Is VIII
lage president.
The first purchase discussed was that
CT $3.50, 900 worth. In December. 1919
Col. Ealrservis testified the Gibbons
bid on which they got the bonds was
lOO.19. Mr., Pecora asked IL they bought
FOR themselves or for "a pool Tho wit
ness dtfuurred against answering, but
Chief Justice Frederic Kernochan OF
Special Sessions, who Is sitting as Mag
istrate in the proceedings, directed that
Lo must reply.
He then related that Gibbons & Co.
bought the bonds for "jooint account"
the others In II being A. Il. Leach & Co..
Hornblower & Weeks. Il J. Van Iigen
e. Go. and Sherwood & Meirifield, and
that there were no other bidders. He
could not remember. he said, IL Senator
Reynolds was present when the bids
we're opened.
In answer to further questions Col
E'airservis said Gibbons & co. bought
out the others III the POOL few days
later. paying them for their fourflfths
interest at the rate OF 1US.1e. and that
carly in January of this year $4,000
worth of the bonds were sold to the
Comptroller at 1855 for $4,000 worth
ana l17.2 for the $4,000 others. Asked
how those figures compared with the
market price. ne said there was no mar
Net price. as they owned all the issue
Odd could make their own price.
Mr.. Pecora sought to and out 10 whom
and at what price the balance Of the
100000 block was sold. Col Fair
fcrvis gave the names OF three banks.
rho price was lower than that paid by
tho state Comptroller, he admitted, hut.
NO pointed out, the bonds had shorter
maturity and consequently were not
worth so much
shut Mouth Essential I'm Trade
1.-THE essence of the bond business"
Tairservis said when Mr.. Peoora was
trying TO get the names OF tho banks.
els to Keep your mouth shut
Another State purchase of Long Beach
bonds TO which the Witness testified was
IN February. 1920, which Gibbons &c Co.
bought at par for $4,000 and cold at
HALO. dr. Pecora then sought TO in-
troduce AZ evidence hook containing
copies OF the circulars sent to their GUS
toners by Gibbons q Co. He eaid he
expected to show that the firm had Of
fered bonds to it's other customers at
lower prices than those at which they
we're offered to the State.
Col william Rand. counsel for Col.
Tairservis objected unless the District
Attorney meant that the Identical bonds
we're so offered. Justice Kcrnochan de-
cided that the book would just be identl-
fled now. and then later certain pages
tending 10 prove Mr.. PecoTa's contention
might be introduced as evidence
The examination OF the Brooklyn milf
tia leader opened with his signing a
waiver OF immunity. after Col. Rand had
told hirp II would be all right
That Albert Ia Judsons present bank
accounts are negligible at the institu-
fions he used as clearing houses IN his
,ieals with the Comptroller was testified
10 by officials OF them
George G.. Van Tuyl. IL. president OF
the Metropolitan Trust Company, who
enld he had been n close friend OF Jud-
son for thirty years. identified that
BANKS record OF his account This
nhoryed he withdrew his big profits n
few days after he made them, and Ber-
trem Cruger treasurer OF the company
sessIfled Judson's balance is now s2.45.