The New York herald., 1922-03-21


! from So to $1,000.
ness was transferred to the DER estab-
lishment, Questioned by Arthur q.
Hays, with l.. Barton Case, Leo Bondy
and Ross i. Robertson present. Mr..
Stoneham told of starting in the brok-
erage business in 1907 and OF taking Mr..
Robertson as his partner In 1911 or
1912. The matter OF transferring the
business To Dicr was discussed. he said.
at the st. Regis. about February I,
1921.
''For about year previous we had
been letting 1t become known that we
were getting out of business" Mr.. Stone
ham testified. ''and Dier approached us
with q proposal to take over our business.
We were about 10 turn over our offices
in Hartford. Clevelsnd and Detroit to
another Stock Exchange house when
Dier & Co. found this out and instituted
now negotiations to take the business
over. We had had several conferences
and never arrived at any satisfactory
arrangement at that time.
After several conferences with der
we arranged to start turning over the
business. starting with the Chicago ac-
counts, and we wanted to do this as rap
idly as possible. The Chicago. Milwau-
kee and New York accounts amounted
to s5,3Sa,000 with debts OF more than
S3.286,000. The stocks were figured at
their market value OF tho date OF the
conference, which do not remember
Got $3,2o0,OOO for Securities.
Later Mr.. Stonehsm was again aske
the basis Of valuation OF the securities
ana contradicted himself. saying thar
the prices were based on those quoted
on the date of delivery TO Dier a Co.
On the negotiations Stopeham testified
that he was to receive s3,200,000 for
SIS. 800, ,0D0 worth OF securities, the rest
70 be carried as balance. Dier would
merely pay the debit balance on the
stocks delivered, he said.
Mr.. Stoneham testified that he figured
the customers equity 40 per cent re-
ceived from Dier. about so per cent OF
the value or the securities. Speaking OF
the trouble with Dier, he continued:
after we had nearly had fight over
the whole thing, a lot OF bitter words
end all, / told them they would have
to take this stock. Dier came to my
office and said he had made other ar
rangements about the stocks, and that
/ could go ahead and sell the stocks
and credit the amounts to his account,
which did. I am still iiquidating some
of the stocks which / bought from
Dier."
=. Possession Not Transferred.
Stoneham's testimony. as shown in
tho transcript, was ir- part:
what was the physical transaction
We're stocks actually delivered by you
to Dier?" he was asked, 80.
.vThey didn't want thsm--I asked
them to take them but they had other
arrangements"
How did you feel toward these other
arrangementsr
II figured IL we turned these stocks
over to them (Dier & Coz and they
threw them on the market they would
owe 100000 or more, and as we were
bitter with each other II would have
been difficult for US to collect, so in.
stead OF liquidating them through DieI
we bought them back and tried to llqui
date them ourselves. In other words,
did not intend to place the liquidation
of those ACCOUNTS in mis- hands to have
large Indebtedness to u.s."
"Did you actually have all of tn,
<5,SSSyo0O OF esecurftiesf. --tt~
I'VE actually had every one. i would
mot attempt to iiquidate otherwise"
when you found that DER e Co. wer,
unable 10 take over all OF those accounts
why did yoa not transfer those accounts
to another house,
Because two thirds Of tbe account:
had been transferred to--thet is. TIVE
thirds of all tho stock had been trans
fnrrod. There Mr.. 7Stoneham hesttatet
at length We could not tranefer. Ir
the beginning we transferred the &C.
counts to Hughes & DER taking indebt'
edness you see there, $500. 900. ms ouI
basis. Our theory and our intention wak
that we would deliver all or the stocks
that belonged to customers and at ths
conclusion we would receive $4,000. 600.
80 the arrangement was that those
stocks which Dicr did not take delivery
Of Dier would sell TO you?"
II would buy from HIM"
"You at all times held this stockY
Every bit OF it,"
ut was not physically transferred tr
Dier G. Co. at any timer
mo"
Then the net result OF that trans
action was that you purchased from
Dier < Co. the stock that was to have
been turned over to Dier on your GUS
toners accountsg"
"Well. l had no means of knowing
how the accounts Stood"
The testimony OF Ross II. Robertson
who also was on tho stand, will be re.
leased to-day by Mr.. Enrich. The next
meeting OF the creditors will take place
90, I.,tda,, ,,,orpfnr a. alnyna n,NlorlS