The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-03
INQUIRY ORDERED
IN TRAYIS'S OFFICE
Alleged FavOritism of State
Comptroller to Brokers
VIII BE Probed.
SUBPGNAs ARE ISSUED
Charges Of Collision in Bond
Dealings Called Entirely
False.

Charges against Eugene "A. Travis
State Comptroller, in connection with the
long established custom Of that office in
the purchase of bonds for the State sink
ing fund are to be the object of an in
vestgation beginning Tuesday morning.
Chief Justice Frederic Kernochan of
special Sessions is to preside over the
inquiry, which will be held in Part 6.
opeclai Sessions court room in the Grim.
Eourts Building. 1t is announced
mat the procedure will be an open one.
District Attorney Edward Swami said
yesterday that seven witnesses had heen
sunphnaed. They include State Comp
troller Travis, James A. Wendell. Deputy
comptroller and Republican nominee for
Comptroller; Albert L. Judson of 40
East Forty-second street William s.
F'anshawe of ii Pine street and George
-. Glppons OF 40 Wall street, bankers
and bond brokers.
The charges in substance are not new.
Ihey were formulated and published last
spring before the Republican primaries
py the Brooklyn Times ConptrolIer
travis at that time was a candidate for
the Republican nomination for Comm
troller and was opposed by a BROOKLYN
Iactlon OF that party headed by United
states Senator Calder. The nomination
went to Comptroller Trayis's chief dem
uty, Mr.. Wendell. The charges printed
originally by the Brooklyn Times were
reVamped and elaborated yesterday by
Inc World, and District ATTORNEY Swami
announced the coming investigation i'm
mediateiy thereafter.
Favoritfsm Charged.
According to the Worlds formulation
Oh the specifications, it is averred that
me prokeO6 named have been favored
tabitually by the State ComptroIler,.
Office in that they have been paid far
IN excess of the prevailing market prices
TOR bonds in which State sinking fund
moneys may be invested; that during
Mr.. Traviss administration of six Years
,here We're purchased from MrSJudson's
nrm bonds to the value of $4,000. 900
rom Mr. Fanshawe's $14,75O,00O. and
from Mr.. Gibbons's $4,000, 900 worth.
Ii Is further alleged that Mr.. Judson's
proflts within the six year period in
bond transactions have exceeded
81 900, 900.
Comptroller Travis blaines his polit
zeal enemies for the revival of these
charges involving alleged wastefulness
and favoritism. He Is quoted as having
said TO the World reporter that the pre-
Vaiilng system of purchasing bonds for
sinking fund investment has been I'm
operation for many years under various
predecessors, both Republican and Dem
ocratic.
Any insnuation that there has been
COLLISION between the person or persons
selling the bonds and any representative
of the Comptroller's Office is entirely
false and wicked" said the Comptroller.
1 nave known Mr. Judson for about
two years and only casually I know
nothing OF his business whether he
nalres a profit or sustains a loss. Mr.
Judson, has sold bonds to all State
Conptroilers for the last fifteen years
Open Bidding Impossible.
Were the State to go into the open
market TO buy its bonds" Mr. Travis
continued. the bonds would soon jump
IN price from 10 to Is points and even
higher 1t is impracticable and virtu-
ally impossible. because of existing law,
Tor the Comptroller TO bid for bonds In
the open market when the State or
nun .cipality floats an issue"
Deputy Comptroller Wendell nominee
for Comptroller, said: III they want
to investigate this matter let them 20
back few years. / have been there
under Glynn and Sohmer. under Demo-
Gratis and Republicans. Gen. Berry and
myself have been the best of friends,
! out II his supporters in the present cam
paign intend to bring in this let them
do II; I'll be ready for them"
Both Mr.. Fanshawe and Mr. Gibbons
! denied that they had sold bonds to the
state Comptroller ut higher than the
ruling market rates. Mr.. Judson was
reported 10 be at Lake George and
Could not be reached
We have been conducting this in
vestigation for some time" said District
Attorney Swami. 1--WE did not intend to
go into the matter openly until after
the election in so far az any court pro-
ceedings were concerned, but the story
from Albany printed I'm the World this
morning has precipitated the Travis
matter and we shall proceed with it at
once We will lay the evidence we have
collected before Magistrate Mcclellan
When the charges were made a couple
or months ago / assigned to conduct the
lnvestSation Ferdinand Pecora. and he
has been busy upon II ever since"