The New York herald., 1922-06-16
Each Took $4,000 Division
Without Consulting
Profit Account.
ROY H. GAVE HIS BACK
Trustee Hopes to Get $4,000
More for Assets From
Backer of House.

The actual head of the Consolidated
Stock Exchange house of r. H. Mac
Masters & Co. of 80 Broad street be-
fore its failure was John +. Mac
Masters; since, his stepson, Roy H.
MacMasters, while nominally the head.
knew little of what was going on and
was ignorant of many OF the funda-
mentals of the brokerage business. it
was shown yesterday.
The disclosures were important. as
David II. Kahn. attorney for the trus-
tee. is Of the opinion that If John F.
MacMasters can be brought in as a
party to the bankruptcy the assets
may be increased by s25,0 or more.
Even at that the creditors will get
little. as the liabilities were approxi-
mately $1,000. 900 and the present as
sets are about S50,000.
Took $4,000 without Accounting.
Young MacMasters. on the stand be-
fore Peter B. Olney. referee. could not
remember whether there ever had been
division of the profits OF the con-
cern. He finally admitted that on one
occasion he had given $1,000 in Liberty
bonds to his father and he presumed"
this was out of profits. At the same
time he had taken $1,000 himself. but
he did not remember that any ex-
animation of the books had been made
to show whether there was an actual
profit to be divided.
II know nothing about books" said
the young broker.
At first the witness was evasive
about the share his stepfather had in
the management. He finally admitted
that his stepfather did direct great
deal of the workings Of the firm."
He was a man of experience in Wall
Street. said the young fellow. Il had
no experience and was naturally guided
by his suggestions"
John +. organized branch houses and
hired all except few of the heads of
departments He virtually set up the
business in the first place.
Refuses to Blame Speculation.
Asked about the house account"
which, the books show, lost the greater
part OF the money involved. young Mac
Masters said he knew nothing about q.
after attempting to fall back on ques-
ton of privilege Intellectually. He
didn't recall" ever talking with John
F. about the buying and selling of Sc
curities for the house. He didn't know
that Nolan. the bookkeeper had been
told by John +. to buy securities. When
asked the cause of the failure. he said:
"It was caused by insidious <propa-
ganda against us from many directions.
which caused -un. and we couidn.
stand it any longer"
Then you don't think 1t was caused
by speculation by members OF the nrm'
mo sir"
Later, when asked again about the
81, 900 "gift'' to his stepfather and
whether II was charged against the gen
eral assets OF the firm. he said he didn't
know, and added:
I'm not very familiar with my own
business. unfortunately"
Treated with Elder Man.
James +. Cochran. who figured as a
PARTNER. though he was only to get
per cent. of the profits, the rest going
to Roy II. with the understanding that
John +. was to get a half OF that also
was witness. He said IL was John f.
who told him he would be admitted to
the firm and added:
He was regarded as having general
supervision and as manager or the en-
tire business"
The witness understood II was the
elder man. too. who gave orders for the
buying and selling of stocks As the
man in charge OF the cashiers depart
ment he remembered Roy asking for
$4,000 at the time OF the gift" to John
T.. but while Roy gave back that sum
when the Arm got into difficulties, the
elder man did not return his gift" He
did, however turn In $4,000 on a call
loan arrangement to help the firm.
Cochran said he received $4,000, or
thereabout as his 5 per cent. share OF
the profits. His pay rose from $50 a
week 10 slT5 n week. so that his salary,
like that OF John f., went upward as
the nrm drifted toward the financial
rocks.
Not Familiar with Margins.
w. T. stock. a lawyer and a creditor.
questioned both men after Mr.. Kahn
had finished He got nothing worth
while from Cochran. He learned that
young MacMasters had been messen-
GER for a. o. Brown years ago and TO
him young MacMasters acknowledged:
arm not very familiar with margins" "
Asked n he knew w. s. Silkworth,
president OF the Consolidated, MacMss-
ters said he did.
was he a party TO the spreading OF
any Of the propaganda you referred tor
mo, sir"
"Did he ever represent TO you or TO
your firm that you were violating the
rules OF the Consolidated Stock Ex-
changer"
mo, sir"
The case was adjourned until July