The New York herald., 1922-03-07
100000 FAILURE
INDICATED IN CRASH
OF EXPORT TRADERS
Childs & Josephs Assets
Dwindle When Traced
to Actual Goods.
CREDITORS WORRIED
Reserve Bank Holds More
Than S2,OOO,OOO in Re-
discounted Paper.
BRITISH BANK CAUGHT
Credit Men Take a Hand in
Tinu;1o@;or 20 Jr;,,,, Nav,
BRITISH BANK CAUGHT
Credit Men Take a Hand in
Liquidation of Firm-Many
Meetings Held.

At the instance of the Fedora! Re-
serve Bank an inquiry has been
started in the affairs of Chids &
Joseph. exporters and importers, OF CT
! Wall street, who failed recently for
liabilities then estimated at $1,000, zoo
and frozen. assets of $5,0o0.o00, I
was learned yesterday.
The liabilities. it is said now, arc
| discovered to be in excess of $4,000
600 and the value of listed assets is
problematical because, being repre-
sented by warehouse receipts. trade
acceptances and similar paper, much
of the security merchandise has not
been located.
II the circumstances, as indicated
by the grounds of the inquiry. prove
TO be true, commercial men said the
Childs & Joseph failure will be one OF
the most disastrous in the history of
New York.
The interest OF the Federal Reserve
Bank was aroused when it found itself
holding between s2.000.O0O and $1,000
600 Of the defunct firms paper indorsed
by banks which had loaned money to
the export house and handed the paper
over for rediscount. When the Federal
Reserve Bank called in the loans, it is
stated. II received payment in full from
the various creditor banks.
Credit Men Investigate.
The Federal Reserve Bank. however,
called into conference representatives OF
the New York Credit Mems Association
| and other agencies Interested in credits,
! and investigation now is being made
by the prosecuting committee of the
Credit Mems Association, Of which
George w. Retz is chairman. Mr.. Retz
Is member OF A. ID. Juilliard & Co. OF
so Worth street. which is not listed
among the creditors or the bankrupt
| concern.
1t is stated on reliable authority that
$2,000,0 900 of the liabilities are repre-
sented by the claims OF New York mer-
| chants The remainder, il is said, Is
represented largely by ciaims of banks
in this country and abroad. The insist
ence of one foreign bank TO whom the
firm owed large sums is said to have
had considerable to do with bringing
the affairs OF Childs & Joseph up for
an airing.
Persons familiar with the case state
frankly. however. that many Of the
creditors are reluctant to press ne in
! quiry, and that attitude is attributed
to a desire not to let it become publicly
known that they could have lost to the
extent indicated by the present status
Of the case.
Chcerfulness yanishcs.
At the time of the filing Of the bank
ruptcy petition while IL was admitted
that liabilities exceeded assets by a
matter of tnillions,a moro or less cheerful
tone was lent by the intimation that the
assets in a short time would be available.
They we're described as frozen" It was
said; because much Of the merchandise
on which loans were obtained was either
In foreign ports or in transit in ships on
the high seas, but IL was expected that
that merchandise would be made avail
able for liquidation within 4 reasonable
period.
The alleged inability Of the receiver to
locate vast amounts OF the merchandise
described as securing papers listed as
assets, It has said, has run up the Ia
bilfties appallngiy and has reduced
much of the commercial paper Of the
firm to the status of unsecured assets.
To just what extent the creditors are
protected has not beeen made known.
III Is known. however. that IN addition TO
whatever may be realized on the Childs
& Joseph securities assets are about
ST, 600 In cash, a small amount ~ office
furniture and real and personal property
owned personally amounting TO several
hundred thousand dollars.
There have been number or cred
itors' meetings, In which the ailegedly
serious turn OF the Chiids & Joseph af-
fairs have been discussed. and at n re-
cent hearing before Judge Mack OF the
United States District Court about 30
per cent. Of the creditors were present.
Bank behind sI,-3f,341.
The National Bank OF South Africa.
Ltd. a British corporation. with a
branch office at A Beaver street. is the
to s2.l49, ,347.50. backed. according 10
court records. with only $4,000 secured
assets, thus leaving a total OF N,TH,-
3I7 80 unsecured.
At the hearing before Judge Mack the
court asked David III. Miller. OF 81
Broadway. counsel for the National
Bank of South Africa, Ltd. for q state
ment concerning the amounts secured
and unsecured. He replied:
ut Is very difficult TO say az this
time. ] can state the security. AS 10
which items II is applicable. there is
some question. The security consists
OF merchandise and warehouse receipts
Of an estimated value OF $4,000; mer-
chandse in East Africa OF an estimated
value of $4,000; so called y. +. bills,
which, your Honor knows. are delivered
on payment OF S126,000.
II hold trust receipts IN large
amount, but we cannot find that there
Is any Of that merchandise in existence.
II do not think that there are any
Continued on Page Three.