The New York herald., 1922-03-10
H. S. JOSEPH DENIES
DRAWING $650,OOO
Books of Childs & Joseph
Show S1,3OO,OOO in
Payments.
PARTNER I'LL AT HOME
Exporters InsOlyent Long
Ago, Is Charge of Per-
sonal Creditors.
NO COMPLAINT SIGNED
Change of Front on Part OF
Creditors Seen by Credit
Mems Association.
NO COMPLAINT SIGNED

Hugo S. Joseph, partner IN the
bankrupt firm of -Childs & Joseph Of
so wall street, which failed for ap-
proximately s9,o0o.OOO. with frozen"
assets of about s5.000,00o, was exam
ined yesterday before j. J. Townsend.
referee. at hearing for personal cred
itors outside of those with claims
against the partnership.
Joseph, with his partner, Harris Il.
Childs, drew s650,00o each out of the
firms accounts in two years prior TO
the forced bankruptcy on January
last, it was asserted. On the advice OF
his counsel Joseph M. Proskauer,
JcAnph refused to answer questions
rereEding certain transactions and
gif1k with the view of finding out
whether or not the firm was insolvent
at any period before the bankruptcy
proceedings.
II had been expected that Mr.. Childs
would appear. but the signed affidavits
OF two physicians explained that he was
i'll in his home at 149 East Seventy.
eighth street. Mr.. Childs is member
OF the University Club. India House.
Merchants Club and the Riding Club
and well known for his lavish entertain
!nents.
The creditors represented at the hear
ing, which was adjourned until March
II. were the Columbia Bank with a
claim Of SCI, 900; Gordon S. Il. kleeberg
lawyer of 66 Broadway, $4,000; w. & J.
sloane. 5000. and Joseph L. Pani res
taurant owner. $1,000. The Columbia
Bank also has an unsecured claim
against the partnership of $21.5O0.
Says No Assets Are Hidden.
Wilbur A. Ball, counsel for Mr. Klee-
berg. pointed out the Withdrawals by
each partner two years prior to the
bankruptcy and said the creditors
would show that the firm was bankrupt
during that period. Mr. Proskauer said
he bankrupts expect to show there are
no hidden assets. and that the large
Withdrawals did not represent cash but
tho transfer OF debts and credits ana
we're only bookkeeper's figures
Under examination of Arthur l.. Ross,
or counsel for Herman H. Eggers, re-
ceiver. Mr. Joseph said that he had
given to John WillSie one of his attor-
neys. mortgage for $4,000 for services
three weeks before the failure. He said
East Seventy-eighth street, which Jo-
scph had sold some time ago and on
which transaction the buyers mortgage
had been accepted for $4,000.
Joseph testified he had given to
Charles Reigelman, another of his array
OF counsel. personal jewelry--all gifts.
Tho witness said he had given at least
$4,000 TO friends. relatives and en1-
i'oyccs. He was questioned about
$1,000 fur coat he had given to his wife
-; wear and Mr.. Ross asked:
Were YOU insolvent when you made
These gifts"
Sncpt 100000 on Art Works.
The witness refused to answer after
consultation with his counsel. Mr.. Pros
kauer. on the ground that 1t might tend
10 incriminate or degrade him. He said
ether beneficiaries included his brother,
rcnrv. to whom he had given $400
month for a long time. 1t was shown
that Mr.. Joseph had spent 100000 on
art objects and furniture before the fall
urc These goods were in storage, he
said. and the warehouse receipts had
been turned over to the National City
Tank. which has an unsecured claim oil
sao0 600 against Childs & Joseph.
oI joined the firm on my 31st birth
day. i'm 1907" said Mr.. Joseph. my
father, Frederick Joseph. purchased
81 "a per cent. interest. and my part
i.ers were Harris Childs and William
I'arr. whose interests we took over in
1919. My father paid $4,000 for my
interest in the Arm. and since then
nut .sl25.0 900 into the business. At the
time OF the failure ! had no equity
two brokerage firms with whom
had done business. but | did at one
time put up some collateral belonging
10 tho Arm with them"
William A. Matthews, accountant. tes-
tilted he had made an audit or the
Arms books covering period from
january J., 1920. to December 81. 1921.
~ said the books showed that Mr.. Jo-
seph's salary for the two years was
$4,000 and that his living expenses
for the same period amounted to s246.-
o2750 Mr. Matthews said he had found
tho books In a somewhat "muddled"
condition.
Formal Complaints Lacking.
TINS New YORK HERALD on Tuesday
printed the first story OF the larger ram
incations of the Childs & Joseph failure.
The article said that the Federal Re-
eerve Bank had called in the New York
credit Mems Association TO make an in
rcstigaton and the matter was in the
hands OF it's prosecuting committee. The
Federal Reserve Bank had called in re-
discount loans made to banks on the
firms trade acceptance. warehouse re-
ceipts and similar paper. The creditor
banks made payment In full as IL de-
vcloped that much OF the security mer-
chandiso could not be located.
Up to yesterday no formal complaint
had been signed by any OF the cred
itors which would result in possible
prosecution through the New York Credit
Mems Association. That organization
foresees a change OF front on the part
of certain creditors who few days ago
were insistent that the prosecuting COM
mittce 20 ahead. no matter what the re-
suit might be. At the same time there
have been many informal complaints
made to the committee which cannot be-
gin real inquiry until formal signed
complaint Is forthcoming.
s.rr m nnGTnu. uEna