New-York tribune., 1922-10-20
Blind Pool Had
SAYS Auditor
Testimony That Winthrop
Smith & Co., Bankrupt,
Had $3.50, 600 Assets Diff
fers in Receivers Report
Books Said To BE Lost
I'm Goldfield Development
Matter Loser Insists False
Telegram Misrepresented

Testimony that Winthrop Smith &
Co., the "blind pool" stock trading
firm that went into bankruptcy with
the arrest of it's partners by postoffice
inspectors last month, had SA20.000 in
assets standing against liabilities OF
only $4,000 a week before the fail
ure and the contrasting statement Of
the receiver that practically no as
sets have been discovered thus far
were brought out at the bankruptcy
hearing yesterday before Referee John
j. Townsend.
The witness who testified as to the
assets and liabilities, giving figures
that showed the firm to have $4,000
to its credit was Morris Rachmil, an
expert accountant, who has heretofore
refused to testify upon the.ground that
his answers would tend to incriminate
him. Rachmil produced no formal re-
port of his examination of the books,
saying the figures he gave were from
memory. He did, however, read Il long
list of securities which he said Win
throp Smith e. Co. possessed on Au-
gust 20, when he completed his in
formal audit.
Says Books Missing
At the close of Rachmil's testimony
the trustee, Thomas H. Matters, stated
that net only had no assets been found,
but that some Of the books were miss
ing when he took charge of the COM
pany's affairs. After some of the en-
ployees had been questioned the pro-
ceedings were adjourned to October
&c at o'clock.
About fifty creditors of Mosher &
Wallace, some of whom have expressed
dissatisfaction at the slowness with
which the winding up of its affairs has
been conducted. were present yester-
day afternoon in the Office of Rerefee
Peter B. Olney jr, for the hearing of
claims for specific securities found by
the receiver Lee j. Wolfe, an ac-
countant, who went over the books,
was instructed to trace three loan ac-
courts appearing on the books and to
find out what securities went into them
and when, in order to ascertain
whether or not certain securities sent
in by customers as collateral, which
were not found when the receiver took
charge, had been repledged to open
these accounts.
Have you asked the trustee If the
thirty shares of Cities Service stock,
belonging to Claus Lundblom, are not
now standing in the name of a former
employee of Mosher & Wallace 2" Fran
cis> M. Fallon, attorney for creditors,
asked. The accountant said he had
not made the inquiry
Goldfield Development Case
As one outcome of the statement
made by Henry P. Gage, the former
manager for Jerome j. Danzig & Co.,
who pleaded guilty to stealing S115,000
from his employers, Magistrate Levine
yesterday heard attorneys for Sylvan
Witzfelder and Charles s. Herzig, part
ners of Harris g. Co., charged with
making false statements in the sale OF
securities.
The complainant against Harris &
Co. is Victor Grande, a curb broker,
who claimed to have lost $4,000 in
the juggling of Goldfeld Development
Company stock, the floating of which
Gage said he had stolen money to
back Harry Rein and Grande had ce
ceived reoptions on 100000 shares of
the stock. False letters and kilograms
were shown to Kim as to the COM
pany's prospects, Grande alleges.
In behalf of Witzfelder and Herzig,
1T was said Grande was merely trying
to exonerate himself and that Harris
e. Co. had not received any of the
securities alleged to have been stolen
by Gage to push the Goldfield stock.
Magistrate Levine took the case un-
der consideration.