New-York tribune., 1922-03-21

proposition and not one of prejudice
Even if the receiver succeeded in rails
ing that 100000 it will mean only 20
or 25 cents on the dollar for you.
Would you rather have that or would
you accept Mr.. Dier's plan. which
would mean a cash payment of 20 or %
cents and then securities TO guarantee
the balance in time payments p
Plan Ready In 10 Days
What arc the securities and what
is the plan?" demanded the creditors
in chorus. Mr. Redwood explained
that the plan would not be ready for
ten days.
Mr.. Myers called upon Mr. lockwood
to produce his client, and after
sounding the name of der several
times asked the referee that the brok-
er's absence be noted and that Ger
tihcatc be issued charging him with
contempt. Mr.. Myers was given the
should Dier fail to appear at the next
meeting Of creditors before the referee
Friday morning.
In his testimony Al the Bar Associa-
tion Stoncham reviewed his relations
with Dier, which, he said, began in
January of last year with a conference
at the st. Regis Hotel, when it was
proposed that the transfer be based on
securities worth s5,363000 and debit
balances Of customers amounting to
$685. 900 in the New York. Chicago
and Milwaukee Offices. This proposition
did not so through, as DER said his
capital was tied up and he could not
move as quickly as he had expected.
Stoneham was asked by Arthur Gar
field Hays, one of the attorneys for
Receiver Enrich, concerning later de
vclopments in the transfer:
"When you found DER E. Co. unable
to take over all of those securities
why did you not transfer the accounts
20 another house?'
Stoneham replied:
Expected to Get s3,200.00O
Because two-thirds of the stock of
all the accounts has been transferred
Our theory and our intention was that
we would deliver all Of the stocks and
at the conclusion we would receive
$3,2O0,0O0."
$50 the arrangement was that these
stocks which der did not take de-
livery of der would sell to you 90
Il would buy from him
you at all times held the stock %
Every bit OF it,
at was not a physical transfer to
DER Co. at any time ?'
"No"
Now, was anything ever said by you
and Dier as to compensation ?"
mo. We were to sell all our lists.
our customers cards and all that for
100000 and expenses"
Stoneham testified that the expenses
Il. 4
his Offices remained open for the trans
fer. He continued: I'VE sold the good
will of our business, which included
customers lists of some 10000 to 40
600 names and 100000 other names
that we had accumulated over q period
of twenty five years. also correspond
cnce showing what stocks they traded
in and what they bought and sold"
Summary of the Deal
Shown paper purporting to be a
copy of a statement of Stoneham &
Co. in accord with DER & Co., indicat-
ing that 10 per cent of equities of Gus
toners amounting to $685. d89 had been
paid to him, Stoneham declared he
had never seen the original or copy.
Stoneham agreed to the following
statement by his attorney, Leo j.
Bondy, as being partial summary Of
his dealings with Dier:
'Dier became indebted TO Stoncham
for the total debit balances Of stone
hams customers and Dier left with
Stoneham, under DER control, ali Of
the shares Of stock of which those
customers were long der had
the right to call for deliveries, paying
Stoncham percentage Of the market
value. AS a result der received ap-
proximately two-thirds of the securi-
ties, leaving onc-third in the hands of
Stoneham These stocks were collateral
security against the balance due to
Stoneham and Stonoham would have
the right to sell them
Stoncham testified that der assured
him at the outset OF the negotiations
that he was worth several million dol
lars and that DER told him he was
applying for membership in the New
York Stock Exchange.
knowing the Stock Exchange to be
very careful about members "at the
time of admission" said Stoneham. ~
naturally supposed that Dier's fnan-
cial condition. was good.'
"You made no further investigation
but relied on what der told YOU 90
asked Mr.. Hays.
"Yes, sir"
And you knew that in April, Nav
or June 192D that the tickcrs were
taken out of Dier's office?
I.