Evening star., 1924-11-30
S|LKWORTH FOUND
GUILTY IN FRAUDS
Five Other Brokers Also Con-
.victed in Crash - Hear
Penalty Wednesday.
By the Associated Press.

By the Associated Press
NEW YORK, November evil
liam S. Silkworth, former president
OF the Consolidated Stock Exchange.
was convicted tonight in the United
States district court on a charge of
using the mails to defraud.
Convicted with Silkworth are Biain
j. Nicholas and Earl Truesdell, part
ners. with Dewitt c. Raynor, in the
defunct brokerage firm Of Raynor,
Nicholas & Truesdell; Louis Gilbough,
floor broker on the Consolidated Ex-
change for the Arm and former
member of the ways and means COM
mittee Of the exchange; Edward A.
McQuade and Francis x. Quillan,
members of the former curb broker
age firm of McQuade Bros. & Quillan.
The jury was out nine hours.
c. Peter Owens. who was office
manager for Raynor, Nicholas &
Truesdell, was acquitted.
Clemency Urged for Three.
The jury recommended clemency
for Nicholas. Truesden and Gilbough
At the request Of Peter ]. Mccoy,
assistant United States attorney
who conducted the prosecution. Judge
Augustus \. Hand. who presided al
the trial, set Wednesday for sentence
and motions.
Before the jury was dismissed Mr.
Mccoy requested Judge Hand to in
struct three Jurors to call on him on
Monday. Mr.. Mccoy did not divuige
the reason for this unusual request
but, earlier in the day, 1t was report
ed that three jurors had been called
on the telephone at their homes.
Bail of the defendants was con-
tinued until Wednesday.
Raynor,. Nicholas and Truesdell
one of the largest firms in the mem
bership of the Consolidated Ex-
change, failed for approximately 81.
100000 on February 90. 1922, when
creditors petitioned 1t into involun-
tary bankruptcy. The previous day
Nicholas had been expelled from
membership in the Consolidated Ex-
changed
Firm Was Bucketing.
A series OF referees hearings be-
gun Immediately, developed that he
firm had been bucketing virtually 80
per cent OF it's customers orders,
operating through at least half a
dozen minor brokerage houses. Wit
nesses testified that the greater part
of the bucketing was done through
the firm of McQuade Brothers and
Quillan.
During the referees hearings, a
nation wide search was begun for
Raynor. senior member Of the firm.
from whom several persons had re-
ceived letters, in which he assumed
responsibility for the failure. He
was not found, however, before the
case had been turned over to District
Attorney Hayward on evidence that
extensive use had been made of the
I- tn sob n RI o ~ 4 I
Silkworth's alleged connection with
the others involved also was de-
veloped at the referees hearings,
when witnesses testified that the Con-
solidated Exchange had sent out letters
to prospective customers OF the Ray
nor firm, assuring them that the house
was not only solvent, bat thoroughly
trustworthy.
On February 2s, 1922, the Federal
grand jury returned indictments
against a half dozen Of the defendants,
but these were suspended May 2s. by
indictments against the nine men who
ultimately were brought to trial
Silkworth, Raynor. Nichols, Truesdell,
Owen, the McQuades, Quillan. their
brother-in-law. and Gilbough. Owen
was office manager for the Raynor
firm and Gilbough was floor trader
alleged TO have executed bucketins
orders 1Or the mouse as a tTdOeT Oli Tie
Consolidated Exchange floor.
Trial began three weeks ago after
Silkworth had lost a fight for a sep
arate trial. He did win postpone
ment Of the hearing to permit him to
go to France as a member of the
championship American rifle team.
At the start of the trial, Raynor,
who had given himself into custody
at New Orleans on February 2, 1924,
surprised his eight fellow defendants
by pleading guilty. He later became
a government witness. testifying that
he had shouldered the blame for his
firms actions att he solicitation of his
partners. who. he said,' had promised
to pay his wife s25 weekly If he, Ray
nor, would fee. 1t was when he
learned that only one payment had
himself UP TO the authorities, Raynor
testified.
Rayuor'S testimony involved not
only his partners and others of the
defendants accused Of the actual buc-
keting, but brought Silkworth into
the case as the man who, as presi
dent of the Consolidated Exchange,
had holstered his tottering firm by
sending reassuring letters to pros
pcctive clients. Silkworth, testifying
in his defense, made categorical de-
nial OF the brokers' charges.
At the conclusion of the Govern
ment's case last Monday, Judge Hand
quashed the indictment against John
A. McQuade, holding that no evidence
had been introduced to show his
knowledge of the operations of the
alleged bucketing ring.