The New York herald., 1922-06-25

finally accepted the stock which was
offered to him in the guise of security
for debt against Dier. This took place
on the afternoon of January 16, the
receiver being appointed on the morning
of that day. The examination COLI
tinued:
Q. You are clear about this, aren't
you, that Dier was trying to make away
with this stock in the AZ New Street
Corporation? Let us have the truth
about it. A. 1 can only give you my
personal opinion.
Gaines Saw Plot in Transfer.
@. Yes? A My opinion was that
there was an attempt to cover up the
stock so Elsenlohr would have it, and
then Eisenlohr would be available for
additional money in the future.
Q. Who told you that-Dier? A. No,
that was just my thought on the mat
ter.
Later the witness restated his view
OF the transaction as follows:
HE Dier) figured that with Eisen
lohr having it. Eisenlohr being pro-
tected on the moneys he had advanced.
he would be available for more money.
He could get money from him, either
through the sale OF the building or
however 1t would be. or course he
knew that he could never have the
stock. | think 1t was quite plainly an
attempt to plant the stock"
@. SO that he could. after his bank
ruptcy proceedings. come around to
Eisenlohr and get the balance of the
yes.
@. So that Dier conceived the plan
of borrowing $1,000 from Eisenlohr and
giving him all this stock as security
for it? a. Well, the stock was sup
posedly put up to secure Eisenlohr for
his prior loans-one Of $4,000 and one
of $4,000
EisenlOhr Hears of Plan.
The witness said that he had told
Eisenlohr of the firms condition and
that this was the only way he could
protect himself. The witness thought
he might have told Eisenlohr. referring
to the Dier firm, that 'the jig was
up"
Gaines testified that Hughes & Dier
did great business through Bell & Co.
and explained how they crossed sales.
giving an order to buy and a few fSin-
utes later an order to sell the same
amount OF the same stock. He made a
distinction between this and old fash
ioned bucketing Of orders. He called II
explained that in every case involving
100 shares DER & Co. had to pay s30
in commissions. though actually there
was no trading of bona fide nature.
At the end of the day virtually no stocks
would be carried. he explained. With
this state of affairs the house could only
make money through trading against ac-
counts. His examination continued:
@. And you say that during ALI the
four years you were with Hughes & Dier
they were constantly offsetting the Gus
toners accounts? A. They might in
some conditions of the market go long
with the stocks and carry them up and
then sell them out. and they might buy
them back again, but I don't think they
bought so many of them back.
Q. During the entire four years you
were with them Bell & Co. of the New
York Stock Exchange were handling |
these transactions? A. That I couldn't |
say. whether they were doing 1t exclu-
sively.
Hayden and stone Take out Wire. |
O. Who else was doing II? A. Be-
cause they had at one time a wire with |
Hayden & Stone. but they discontinued
Hayden & Stone discontinued, I think
as soon as Hayden & Stone ascertained |
the nature of the business they took the |
out. And they had at one |
time wire with Block Moloney & Co.
no, it was Finley, Barrell & Co., that |
was the old firm. They cut II out. Ward |
& Trantor too-they discontinued their |
service-but Bell & Co. had us right to |
the last
Q. What was the real connection be- |
tween Hughes & Dier and Bell & Co..
what was the secret deal? A. That I |
have never been able to ascertain.
Q. You know something about It? A. |
Whether Walter Humphreys-you see |
here Is no Bell--whe.her Walter |
was depending on mis- COM |
was told in one year they |
we're s175,O00-----
Q. Who is Walter Humphreys? A. |
he is the head OF Bell & Co.
q. Is there any one else in the COM |
Dany? A. don't know whether Hickey |
IS a member or not.
Hunts Secret Arrangement.
Q. What was the secret arrangement,
Z any, between Humphreys and DER? |
] don't know IL there were any re-
told me he got some Liberty |
bonds at one time as a present from |
Bell & Co.
@. How much? A. 1 think abou:
$780, 900.
Q. How long ago did he get them? A. |
That I don't remember.
Q. What did Hughes e. Dier get for |
hrowing AL of this business to Bell n |
Co.? A. That | wouldn't be In a posi- /
ion to say wouldn't know.
q. What did Dier ever tell you? a. l |
,ould surmise they were getting fnan-
,ial help--they might have been getting /
financial help in the way OF loans.
Q. What kind Of loans? A. Cash |
oans--they borrowed money from Bell |
Go. when they got in a jam.
Q. slow much in those four years was
actually paid to Bell & Co. for interest |
Ind commissions,? A. That / wouldn't |
snow.
@. approximately A. You see, Hughes |
would never m------ Hughes always fig- |
ired that l was pretty close to Dier. |
lie tried TO keep all the information /
away from me that he could. had no |
Of the brokerage business as |
. the cage and things of that kind only |
what could pick up. DER had no |
OF the brokerage business. /
Dicr was promoter. Hughes was n /
member OF the Exchange--the Philadel- |
,hia Exchange
@. There mus. have been something |
going on between Hughes & Dier and |
isn't that 80? A. would |
suppose 30.
Q. Now what was III A. That I |
wouldn't be able to tell you. because |
wouldn't know. would surrnise that
they were getting something back.
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