The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-06-05
.LUSK EXPLAINS FEE
OF $4,000 FROM DER
Took Retainer 'to Reinstate
Rights of Hughes & Dier to
Quotation Service
THOUGHT FIRM HONEST
Story in the Main Agrees
With That Told of Transac-
ton by Senator Lockwood.

State Senator Clayton r. Lusk yes
terday explained his connection with the
firm of Hughes & DER. for which he
received $4,000 as a retaining fee, as
testified to by Fred Andrews. cashier
OF the firm, at the hearing in the bank
truptcy proceedings resulting from the
failure of e. d. DER & Co. Lusk says
he believed the firm was solvent and
honest.
In the main Lusk's story agrees with
what State Senator Lockwood had to
say regarding the same matter. The
meeting between Andrews and Lusk, to
which the former testified occurred in
Lockwoods office. and Lockwood him
self had been active in behalf of the
brokerage Arm Senator Lusks state
ment was as follows.
Some time in the month of May.
1921, Fred Andrews came to me and
stated that the brokerage firm of
Hughes & DER had had their stock
quotation service taken out by the Stock
Exchange. He stated that the firm en-
ployed about 200 men in its New York
office and had offices in several other
cities. having a total, as l recall it, of
over 1000 employees. He stated that
he understood that this action had been
taken at the instance of competitors of
Hughes & DER in Chicago; that the
arm was perfectly solvent and was
doing a legitimate brokerage business
and was not in any respect bucket
shop. l was afterward informed ~by a
representative of the Stock Exchange
that there was no question about the
solvency of the Arm.
Before Exchange Committee.
II am a practicing attorney. Mr.
Andrews retained me to make an eX-
animation of the law and facts and to
take any action which deemed advisa-
BILE TO secure the rights of Hughes &
DER to quotation service, / told him
that If l took the matter up that
would require a $1,000 retainer to cover
my services and disbursements, which
he paid. / then examined the law and
interviewed different persons in refer
ence to the alleged claim that this ac-
ton had been taken at the instance of
competitors of Hughes & DER
Il went before the Stock Exchange
quotations committee and interviewed
them and obtained copy OF the hearing
which they gave DER before the quota
ton service was taken out, Mr. DER
claiming that he had been away sick
and did not have personal knowledge of
the transaction in question.
II then consulted Mr.. DER and others
In reference to having certified account
ants go through the books OF the con-
Germ and make a detailed certified re-
port as to its business.
1T was my understanding then work
was being done on the books by Two diff
ferent concerns but that because of the
mo would ha in aatf
ing up this detailed report Mr.. DER
wished new firm. consisting of himself
and Mr.. Lawrence and Mr. Starr. to be
formed. ] advised with members of this
proposed firm in reference to it's organi
cation and conferred with the president
Of the Stock Exchange over the telephone
with reference to the manner In which
the new business should be conducted
and arranged to have its books opened
and its business carried on under the
inspection of the Stock Exchange. so
that there could be no question as to
the legitimacy of it's business.
1.-THE new firm was TO take over the
accounts of the old firm as fast as there
were any dealings in the different ac-
counts The new firm was organized
ard did business for a time. ! had re-
peated conferences with Mr.. der and his
associates, coming from Washington and
Cortland. n. Y. on several occasions es-
pecially to confer on these matters. |
was present at the offices of Dicr Law
renee & Starr when the bookkeeper of
the Stock Exchange examined their
books to ascertain If their business was
regular and all right, and he informed
me that everything was being handled
by the new firm in a satisfactory way.
Knew Little of New Firm.
"I never conferred with the president
of the Stock Exchange after the new firm
was formed. but understood that the
quotations committee never acted favor
ably upon the application of the new firm
for quotation service. | never made any
examination of the books and never saw
any report of any accountant and was
always informed and believed that this
was a big brokerage business that was
being run on honest lines.
II never knew anything about any
Withdrawals of moneys or any of the
transactions brought out in the evidence
OF the members and representatives of
the firm"
The bankruptcy hearing is to be con-
tinued this afternoon before Seaman Mil
Ter, referee. at 2 Rector street. While
Andrews is 70 he examined further he
will not be called to the stand to-day
The testimony probably will relate to
Andrews's story that the brokerage firm
paid some persons whom Andrews can
not identify $1,000 to get its advertising
back into THE NEW YORK HERALD. the
the New York Times and one other pa
per which Andrews has not named.
Accountants acting for Saul s. Myers
and Arthur G. HAYS, attorneys for the
trustees. to-day will take possession Of
Andrews's cancelled checks and check
stubs, and through them will proceed to
verify some of the statements Andrews
has made. The cashier, Who is now a
member of the Consolidated Stock FIX
change, acknowledges having Saved
over 500. 900 in two years during which
his salary was only about 100000.