The New York herald., 1922-05-17


as the accountant showed on questioning
by Arthur G. Hayes received much more
on the interest account than on the COM
missions account. but had to pay nearly
all of It to other brokers In order to
have the orders executed.
Dier Got 100000 In Year.
The gross receipts from commissions
and interest for the year were $492,824.
For executing orders Dier paid In COM
missions and interest to other houses
$4,000, leaving an actual net income
Of S22,824. Yet testimony at previous
hearings was that in the same period
Dier drew $310. 900 in cash. and the other
partners likewise had drawing accounts
involving large sums.
OF the $492.S24 actually earned $780,
900 was obtained In commissions from
customers The interest charges totaled
1927, 900. The total expenses being more
than S2,5O0,o00 and the failure having
been for about $4,000 the record is
clear for about half the amount inr
voived in the failure.
Under a general heading of admins
tratiye expenses" prepared by Mr.. Refs
and totaling S1,600,000 1t was shown
that almost 100000 went for the main
tenance of branch houses. There was
one lump sum charge Of $115.000. The
salary item. which was separate and dis
tinct from the money DER and the other
partners drew, totaled $465,000. In con-
nection with the $4,000 for lunches--in
one year---it was noted by Mr.. Refs un-
der Mr.. Hayes's direction that this was
in addition to about $4,000 charged for
lunches In the petty expense account
sDividendsv Were $1Os,OOO.
1t already had been shown that DER
& Co sold the securities of their GUS
toners. The customers. believing their
stocks to be still in Diers hands. ex-
pected to receive dividends. which as
a matter of fact the concern could not
collect. The firm was therefore forced
to make payments of dividends when
due ou. of its cash on hand. The total
of these payments for the year. said Mr..
Refs, was s10S.o00. which. Of course. was
a net loss.
The errors and defalcations account.
with its total OF $210.237, had been
charged with mahy stocks and bonds.
according to .he testimony. but they
had disappeared" said the witness. He
also found an item in this account Of
s7.022 charged against William Tab
lonsky. In explanation the witness said
he understood there had been a defalca-
tion in the uptown Office of Dier & Co.,
but this was not explained.
The witness said the expenditures Of
$2.500. 900 did not include the speculative
losses of the firm. A put and CALI
account was included. and this showed
loss to the Arm of s4,395 for the year.
Mr.. Reis said that his totals did not
show the amounts paid by DER to
brokers belonging 20 the New York Stock
Exchange for the purchase OF listed
securities on which DER & Co. made no
money. since II had to pay out all 1t
received for commissions.
Despite the volume Of business and
the large expenditures. the firm was
said to have paid only $500 In Federal
taxes and $3.50 State taxes. On the
other hand 1t paid out s55.0oo for coun-
sci fees. All told, Mr.. Reis said. he be-
lieved the total OF losses will be much
nearer tho s4.000.000 mentioned in the
first estimate than s3.o00.000.
The accountant also had gone into the
finances of the El Progresso gold mines
In Mexico, which Dier had utilized to
reassure uneasy customers and which
he contended would supply funds whore
CouttuueN nm pa0e EI0ht