New Britain herald., 1929-10-22
AUDITOR TESTIFIES
 FIRM OVERDRAWN
ParEer-Smith Officers Depleted
 Cash tO Save Selves"
TRIAL CONTINUES TODAY
One Day Alone Showed SlG,OOO Inn
 properly Banked. Coates Says --Hartford Man Describes Actions
 state Is Prosecuting.

New Haven. Oct. % LP-A story of how the three officers of the Iarkcr-Smith company sought to save themselves when they saw, from their own books and the rec ordS Of their banks that they were facing ruin, was told on the stand in criminal superior court today by Charles F. Coates of the Hartford accounting firm which audited the Parkcr-Smith books after the con- ccrn was forced into rrccivcrship.
 Coates. studying the itemized audit his firm had made, showed how from day to day the Parker-S Smith con- pany had record of enormous over drafts in it's banks and, seeking to make good' one of their treasury accounts, drew check from segregat- ed mortgage trust deposits in the HCme Bank and Trust company of West Haven and entered them into their own accounts which were in the Second National Bank and the Tradesman's National Bank and Trust company, both Of New Haven. SiG,0C0 One Day
 On one day alone the company s books showed over drafts on the treasury account in the Second Na- tional bank of S4G,00o. on another, the Ovcrdrafts totaled $S9,00O. In one instance the company deposited q $500 check from a segregated ac- count-which contained money that should have been paid to notehold- ers-in its treasury when the bank records showed overdrafts of S1.S27 and the firms books S19,2S7. Coates explained the discrepancy between l the banks overhaul record and the company's overhaul record as being caused by the slow process of clear ing checks.
 Previous 10 the testimony of , Coates, States Attorney Hoyt placed 1 in evidence the directors minute book showing that from June 2S. 1927. to May %, 1929, the date of rcceivcrship, no minutes were made of directors meetings. Charles J. ! Martin of defense counsel said these meetings were held regularly, never 1 thelcsS.
 Coates, working on a day by day record of the Parker smith books, made an audit of accounts dating from January 1, this year, to the rcccivership day May 20.
 When asked by Hoyt whether at any time the companys books did not show an overhaul, Coates an sWcrcd, There were very few days when the treasury accounts in both banks were not oVerdrawn.'
 Coates said that mortgage trust accounts were depleted to build up the company's treasury account. Withdrawals from segregated ac- counts were made on innumerable checks, signed mostly by Clarence smith, secretary, his brother, sign ed a few, but the other defendant, John F, Parker. president, signed none of the checks.
 Begun in September, 1928
 The segregated accounts, all of ! which were in the Home Bank X Trust company in West Haven, were begun in September, 1928, i though Hoyt pointed out they ! should have been started at the 1 time, in 1922, when the company began operating. Into the scgre- gated accounts were deposited money paid by mortgagcrs for H. quidation of notes held in mortgage trusts. Last week, Iloyt showed how noteholders in these accounts failed to receive payment and
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