The New York herald., 1922-06-26
Gaines Contends Pressure
Will Bring Out Big Sums Z
for 10000 Victims.
SPLITTING SPLITS Barred
Dozen Men Could Write Firm S
Checks and Set Their
Own Salaries.

Elmore d. Dier. head of the broker
age firm of T.. D. Dier & Co, whose
failure for more than s4.000,000 has
been under investigation for the last
five months. is believed to have con-
siderable assets in hiding. in addition
to nearly 100000 previously men
toned, according to the testimony of
his Office manager. z. Franklin Gaines,
which was made public yesterday.
Mr.. Gaines testified before Referee
Seaman Miller that Henry d. Hughes,
Dier's former partner, had spent more
than 100000 in two years on art OBJ
jects and expensive furnishings. Gaines
also offered further confederation of
DER is still in financial business in
New York city and is trying to float
mining scheme.
Many details of the lavish expendi-
lures of Hughes and DER were re-
lated by the witness. who told the ex-
aminers. Saul s. Myers and Arthur G.
Hays. that many of the art objects
bought by both Hughes and DER were
not worth one fourth the prices paid
for them In their scramble to outdo
each other in accommodating these
treasures. also jewels, for their re-
spective families.
Many Could Sign Checks.
This race of the two men, aided by
large Withdrawals by almost a dozen
ether Dier men. who could sign checks
giving themselves whatever salaries
they wanted. was described by Mr.
Gaines as the real reason for the ulti-
mate wrecking of the business, caus-
ing more than 10000 persons to lose
their savings.
DER had expensive automobiles,
jewelry. an apartment of luxurious ap-
pointments and free-flowing cash even
after the firm had gone into the hands
Of the receiver. Gaines testified. From
reports. he said, he believed that Dier
had considerable money also.
Asked what he would suggest to OBJ
tain money from DER. Gaines promptly
answered: IL would arrest DER. Then
think he would come clean and keep
out of Jail"
assets are. do you?" Mr.. Myers asked
him. and he replied: well. he knows
what he's got"
Pressed along the same lines the wit
ness added. with regard to Harry Lau-
renee. one of Dier's partners when the
firm was also known in the inner circles
as "Dier. Laurence & Starr"
Says Laurence should Know.
'If there are hidden securities or
money / think Laurence, II anybody out
side OF Dier would know where they
are" He told the examiners that there
was n big loophole that you have not
taken into consideration" namely, the
Withdrawals from all Of the smaller Of
fices at the same time they were going
on in the main offices.
Asked a little later You think
Andrews and DER together have the
bulk OF the missing assets, do your"
Gaines answered: Il don't think there
Is a question about IT,
Gaines then said that the receiver
should check up most carefully the de-
liveries OF securities that came from
Stoneham & Co, and also what happened
to them afterward. saying that he be-
lieved certain persons got the bulk OF
them. A lot of the Stoneham money
was used to make good a shortage in
the Philadelphia office, Gaines said, but
he insisted that Il was more than pos
sible that some of the stocks received
from Stoneham had been spirited away
in the same manner he believes other
assets have gone. by way of with
drawals
"Dld DER ever discuss with you his
relations with any other Stock Exchange
houses besides Carpenter. Caffry IL Co. y
Mr.. Myers asked.
Firms DER Did business With.
II knew he was doing business with
Cohen Carpenter. Caffry & Co.; Sar-
torious. Smith & Loewe," the witness
answered.
O. Didn't he tell you how close he
was with Cohen? A. think he thought
he was lots closer with Cohen than ne
was.
O. Didn't he tell you he was very
close with Sartorious. Smith & Loewe?
A. heard him say that they wanted to
carry an account with him.
q. Wasn't there triangular agree
ment between Carpenter, Caffry & Co.
w W. Cohen and DER? Didn't DER buy
through one house and sell through the
other with the knowledge of both? A.
think both houses knew the class of
business they wero doing.
q. You don't think der allowed these
stock Exchange houses OF W. w. Cohen
& Co, Sartorious, Smith & Loewe to
make huge sums without DER getting
Continued on Page Twelve.