Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-17
Secretary and Treasurer,
Both Directors, Knew Nothing
of Firms Activities.
BOTH INFORM CREDITORS
EXECUTIVE RAN BUSINESS
Sale Contracts and Checks in Shore
ham Office Building Deal
Are introduced.

Edmund d. Rheem. executive vice
president of Swartzell, Rheem & Hensey.
was pictured by his fellow officers at
today's creditors examination as being
in absolute control of all the ramifica-
tons of the concerns business affairs.
Testimony to this effect was drawn
from George F. Hunt, secretary of the
company before it went into bank
ruptcy, by Attorney George e. Sullivan,
who represents creditors of the defunct
mortgage banking house.
Hunt testified that although he had
been with the Arm 80 years and was a
member of its board of directors, he
knew virtually nothing of its affairs or
policies.
Were Rubber Stamps"
rs it true, Mr.. Hunt. that YOU. Vice
President j. Newton Brewer and Treas
urer John H. Holmead were nothing
more than rubber stamps for Mr..
Rheem?" Attorney Sullivan inquired.
Yes, that substantially was the case"
the witness answered.
Was Luther Swartzell, president of
the company, also rubber stamp"
the attorney demanded.
Hunt replied he did not know whether
SwartzeH was ever consulted by Rheem.
Hunt also said he knew nothing OF
the financial condition of the company
and DID not know voluntary petition
In bankruptcy was contemplated until
the day the paper was filed.
Ignorant Of Releases.
Il knew nothing of the alleged re-
lease OF trusts without payment to note
holders" the company's secretary con-
tinued. II was first apprised of this
alleged condition through reading the
newspapers after the firm had gone into
He said that title to various properties
had been taken in his name, but that
SwartzeH, Rheem & Hensey Co. was
the real owner in every case. Hunt indi-
Gated his willingness to sign deeds con-
veying these properties to the trustees
as assets of the bankrupt.
Another witness, Hoimead, gave SINH
lar testimony. Although nominally the
concerns treasurer and q member of its
board Of directors, he said he had never
attended . directors meeting and did
not know 81 any such meeting ever
having been held. He said that 50 far
as he knew all matters pertaining to the
conduct OF the company's affairs were
handled directly through Mr.. Rheem.
Sale Contract Exhibited.
Reopening the examination with re-
gard to Shoreham Once Building. con-
corning which Rheem was questioned
all day yesterday, Sullivan introduced
as evidence a contract for the sale of
The building which bore the name of
Swartzell, Rheem & Hensey Co. and
Secretary OF War Patrick J. Hurley as
principals.
Sullivan also introduced a SwartzeI.
Rheem & Hensey check, dated July II,
oy which $685. 900 was paid the Riggs
Bank. A little later he introduced two
collateral notes, dated July Is, 1890, one
Tor $780, and the other for S255. 900.
These notes were held by the bank.
Sullivan brought out the fact they were
made payable on or before five DAYS
after date and attempted to elicit from
Rheem substance of any conversation
ne may have had with Robert ". Flem-
ng. president Of Riggs Bank, about the
note.
Sullivan also attempted to learn
whether Mr., Fleming knew the details
of the transaction involving the sale of
the Shoreham Building. Rheem replied
that he could not remember any de-
tails of any conversation he may have
had with the bank president and said
the latter may have known in general
way aobut the sale transaction.
The remaining questions addressed to
Rheem regarding the Shoreham Build
pg dealt with technical matters of
bookkeeping and business policies.
Meeting Is Adjourned.
After the examination of Holmead
had been concluded, Referee in Bank
ruptcy Fred j. Eden ordered the meet
ing adjourned until Tuesday afternoon
1T / 80 o'clock
Attorney Sullivan asked several uues-
lions of Holmead in an attempt to
earn whether any of the note holders
under the original deed of trust on the
5horehan1 Building had been paid aft
er payment of the face amount of the
trust to Swartzell, Rheem 81 Hensey.
Holmead replied he believed some of
he note holders had been paid in cash.
whereas others were given substitute
notes in the nature of reinvestment.
He was also questioned with regard
20 two letters sent out by Rheem to the
at about the time the trust
was released These letters. in sub
stance. advised the security holders
hat the note had been paid to the
trustees.
Hoimead who was represented by
George Hoover, refused to
answer number of questions on the
ground that he was not sufficiently
amiiar with the details of the COM
1any'S business affairs