Evening star., 1926-09-15
MANY IN D. c. HOLD
STOCK UNDER FIRE
U. S. Clerks and Teachers
Among Investors in Firm
Now Facing Trial.

Washington investors put about
$1O0 900 in the stock of a widely ad-
vertised cutlery manufacturing con-
Germ in New York City, which has
Just been charged in a Federal indlct-
ment by the New York grand jury
with use of the mails to defraud ac-
cording to information disclosed here
today Between $800,000 and $1,000
900 is reported to have been the
aggregate capital invested in the con-
Germ which has gone into receivership.
The organization named in the in
dictment is the Cling Cutlery Co.,
which was incorporated in the State
of Delaware in. 1920 and established
Offices in New York. The indictment,
returned several weeks ago and just
made public, charges the company
used the mails in carrying on an al
legedly fraudulent stock selling
scheme.
Defendants named are James VIII
holt. Alfred Littauer and Jacob F..
Rafferty, Littauer, president of the
company, has wide reputation
among the makers of surgical instru-
ments and cutlery and was regarded
by many as an authority.
School Teachers Hold Stock.
Among Washingtonans who are
said to hold stock of the company
are bankers, prominent business
men, Government employees and school
teachers. Other cities where the stock
was sold are said to be Baltimore,
Nd, Wilkes-Barre, Glenlyon, Luzerne
and other Pennsylvania cities. The
names of most of the investors, how
ever, have not been made public.
United States District Attorney
Emery Buckner of New York, who
obtained the indictment, it is said, has
warned all to give out no infOrma-
tion prior to the trial. because of the
nature of the investigation which was
carried on by his office for about two
years before the grand jury was given
the case.
Two Washington men, however. are
known to have been investors. Adolph
j. Schippert, an undertaken, of zoos
/ street said today that he held con-
siderable stock. The other is Peter
w. DorSch, baker, of 4S11 Blagden
avenue. Both declined today to reveal
the names of other investors.
Mr.. Dorsch and Mr.. Schippert sew
eral weeks ago were called to New
York for conferences with Mr.. Buck
ner and other prosecutors in the case,
to explain how the stock was pre-.
sented to Washington investors.
Paid S. to $40 Per Share.
Washington investors are said to
have paid from SIS to $40 per share
for the stock, of which there were
issued 200, 900 shares, according to the
indictment.
The Cling Cutlery Co. was organized
1f 60
selling surgical instruments and cut.
lery.
At the time of it's formation, it is
recalled, wide publicity was given to
the invention Of removable blade for
scissors-which was to be one of the
articles manufactured by the COM
pany.
Prior to January 8, 1923, the indict
ment charges, the defendants devised
scheme which was intended to de
fraud investors of the company.
The indictment charges that, while
the defendants announced through
the mails that they were engaged in
manufacturing and making big profits,
the facts of the case did not support
i the inducements offered.
Specifically, the indictment charges
the following counts against the Cling
Cutlery Co.:
That it advertised, through the
| mails, that it was actually engaged in
| the manufacture of scissors; that its
! selling force was organized and the
company was reaping large profits
| that large orders had already been re.
| ceived.
| In addition to this, it is alleged that
the prospectus also stated the company
had actually contracted for the erec.
| tion of four-story factory.
| Trial of the Cling Cutlery Co. off
cials on the fraud charges has been
| delayed, it was stated by Mr.. Buckner
| by the trial of former Attorney Gen
eral Daugherty in the Federal Court
| there.
The case however, is now being pre-
pared for trial. which is expected to be
| set for some time in October.