The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-04-28
LIVESTOCK firm OUT 4
FOR BUCKETINGT faint.
Straus & Co., So Broadway,
Suspended for Handling
Unfair Account.
ONE MORE FAILURE,
Head of r. III. McMasters e.
Go. Admits He was Short
on Experience.
GOT $3.50 A WEEK SALARY
Receiver Hopes to Get Flatbush
Home to Help Meet Liza
bilities of 100000.

Seymour l.. Cromwell. president Of
the New York Stock Exchange. an
nounced at the opening of business
yesterday that as a result OF the in
stitution's drive against brokerage
houses which. deaf unfairly with the
public. Straus & Co., So Broadway had
been suspended from the exchange for
a year.
The Straus firm was accused of
doing business for bucket shop, an
act which the governing committee
some months ago put down as "detri-
mental to the best interests Of tie
exchange"
j. o. Straus is the floor member Of
the firm, the other partners being
Charles B. Mergentime and Max
Straus, the latter a special partner.
The firm was admitted to the ex-
change in November. 1919.
The plan announced three weeks ago
by Mr.. Cromwell, under which state
ments OF the financial condition of each
member Of the exchange shall be pre-
sented to 1t at least twice year, has
been worked out and an amendment to
the constitution adopted by the govern
ing committee for submission to the
membership.
Speculation Ban Extended.
The regulation of the exchange which
speculative account for a clerk of the
exchange or Of a member. a bank, &c.
has been extended to cover clerks OF
any corporation in which the exchange
owns the majority of stock. such as the
Stock Clearing Corporation, the New
York Quotation Company, &c.
An involuntary petition In bankruptcy
was filed in the United States District
Court against the ]. A. Haines COM
pany, Inc, securities, of 40 Rector street.
The petition was signed by Harold New
bold. who claimed $3.50.
John l.. Lyttle was appointed receiver
for the bankrupt ctock brokerage house
headed by James J. Kirwan, of SO Broad
street. Bond was fixed at $1,000.
A schedule for J. L. Ross 4 Co..
brokers' Of 1880 Broadway. showed
liabilities of s23,497 and assets of $3.50.
The petitioning creditors include Charles
j. Dorner, who claims $4,000 Carl DEL
hat, $4,000. and Max Nezold. $4,000.
Brokerage Affairs Revealed.
Further revelations on the recent series
OF brokerage failures was obtained
in testimony about the brokerage firm
of r. II. MacMasters & Co, so Broad
street, which failed two days after 1t
had been expelled from the Consolidated
Stock Exchange for alleged bucketing.
The bankruptcy was due to the mex
perience of Roy II. MacMasters and the
withdrawal of the support of his step
father, John f. MacMasters. a veteran
broker OF Wall street and silent partner
in the firm. said the junior MacMasters
at hearing before Robert p. Stephen
son. receiver. Roy MacMasters, It was
learned, took the stand, knowing he was
being sought by the police OF this city
and Richmond, Va. and told how his
stepfather abandoned him when the firm
was heading toward bankruptcy.
Young MacMasters was the only wit
ness at a hearing In the office OF David
w. Kahn, attorney for the receiver. 100
Broadway. MacMasters proudly said he
had acted the man" and that be had
done everything possible to aid the re-
ceiver
The young broker told of the manner
in which MacMasters, ST., raised his
own salary at will from 500 to $3.50 a
week. But the witness admitted his step
father conducted the business AMI that
although he had been understanding the
elder man for two years he had not
learned the business so he could be
self-dependent.
Young MacMasters testified that in
the last days of the business he placed
~
into the firm and said that his step
father had added about $4,000. With
this as nucleus he was able to Dor
row from friends in the Street" sums
varying from $4,000 to $4,000, which
made the total 100000.
When Mr.. Kahn tried to delve into
the house accounts of the firm. execu-
ton Of orders and the allegation that
stocks were sold against the accounts
Of customers he was blocked by Roy
MacMasters. who asserted his constitu-
tional rights. He declined to answer
these questions because OF a pending
criminal action in Virginia.
Trying 20 Get FIatbush Home.
Mr.. Stephenson, it was explained. has
been anxious to establish the RESPONSE
bility of the elder MacMasters. as his
-
said to be valuable and may be sought
as assets OF the firm, which TO date are
between $4,000 and 100000, to meet
liabilities OF 100000.
Roy MacMasters said his salary for
four or five months before the failure
was $3.50 week and previous to that
he drew $500 week. He told of pos
sessing Liberty bonds worth $1,000, but
said these were turned over to the cash
Ter month before the smash. His
automobile, he said. was in the hands
OF the receiver. He admitted receiving
Il scarfpin from II. f.. Bachman & Co..
but denied It was worth $4,000. as he
said he had sold II for S25.
The next hearing viii be at the office
Of Peter Il. Olney, referee. Tuesday
afternoon.
Clarence IT, Haynes, broker, OF so
Linden avenue. Brooklyn. Joseph =.
Boris broker of Croton Falls. ". ",
and william I. Payne. an insurance maj.
OF New Rochelle. were held for trial in
Special Sessions under $1,000 bail each
by Magistrate Simpson in Tombs Court
on n conspiracy charge.
The complainant was Paul " Zim-
norman of Stamford Conn. treasurer
Of the Carlisle Tire Corporation. who
alleged that the defendants nisappro-
priated stock furnished by his firm as
collateral for loan Of 100000. zim-
norman said the defendants sold the