The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-11-16
HUGHEL, ON STAND,
DEFENDS COMPANY
IN $8OO,O00 DEAL
TeStifieS Firms Handling
of Accounts Always
Was Upright
BLAMES CREDIT SHUTOFF
Accused Former FinanCier
Explains 'DoWnfaI' of
His Organization.
BY GEORGE III. DENNY

BY GEORGE III. DENNY
/ Myron M. Hughel, former
president Of Pfaf & Hughel,
defunct investment firm, to-
day defended his handling Of
the $800,000 account of Mrs.
George Crosley, capitalist
widow, in continuing his defense in
Federal Court to charges Of using
the mails to defraud.
Mr. Hughel also testified as to the
firms extensive dealings in brewery
stocks, a venture which government
testimony has indicated was a big
factor in the firms subsequent col
lapse.
Also on trial is Walter P. Pfaff
also former officer. Robert P
Robinson, former treasurer, was
acquitted by directed verdict of
Judge Robert C. Baltzell yesterday
Mr.. Pfaff is expected to follow
I1I IIuBIl OIl VIC oIdIINs
Insists Dealings Upright
Mr.. Hughel's testimony today was
intended to show the firms affairs
were conducted in an upright man
ner in every transaction, and that it
was circumstances beyond company
control. such as the shutting off
of credit that led to the company s
downfall
MI Hughel declared he personally
did not profit, that when the COM
pany went into bankruptcy it owed
him more than $4,000 in commits
sions and that few days before
the reCeiVership he mortgaged his
home for $4,000 and deposited the
money to the credit Of the firm.
AS to sale of certain of the Cros-
ley holdings in which testimony in
dicated the company had profited
to the extent of some $4,000 on
transactions in which the company
would sell before buying, Mr.. Hughel
said that these deals involved low
grade municipal bonds. They were
difficult to market, he said, and the
company was put to great expense
to dispose of them at all. On S70,-
900 in gilt edge government bonds
his firm realized a profit of only
$3.50. he said.
Recounts Firms History
Mr.. Hughel recounted the firm;
history of dealing in brewery stocks
Customers profted SO handsomely
from a Berghoff issue that there
was clamor for more brewery stock
He said that after investigating q
breweries the firm decided to UNI
derWrite an issue for the Abe
brewery of st. Louis.
An option was taken on 100000
shares of common stock at $637 q
share. Besides their commission
PfaT e. Hughel was to receive q
bonus of $4,000 shares if the financ-
ing proved successful.
But the brewery did not prosper
due to quarrel over policy between
Two Chicago men who held large
holdings in the brewery firm, he
said. Finally he took over 115,00C
shares held by these two men al
"a cents a share. 1t was this stock
he later sold to Mrs. CroSley for 81
a share, but he held this was fan
because the average price he hac
paid for the stock up to thai
time was $3.50 Also he conferred
with Mrs Crosby, he said, and she
told him to do what he thought
was right"
In his two hours on the stant
yestc' day afternoon Mr.. Hughe
traced his firms difficulties, which
he said, began with credit restric.
tons In the fall of 1884 caused BY
closing of a large New York anC
Chicago brokerage concern, subse.
quent efforts to arrange for Other
credit connections, and rumor'
about the condition of Pfaff &
Hughel which he said led to the
bankruptcy.
On Trial on Six Counts
Pfaff. & Hughel losses in the clos
ing of the New York and Chicago
firm were about 100000, Mr.
Hughel said. and efforts to establish
other credit connections caused fur
ther losses.
Shortly before the bankruptcy
realizing they were unable to meet
demands. Pfaff g. Hughel opened
Q No. 2 account at the Indiana Ma
tional Bank to protect accounts OF
all new customers. The bank agreed
to hold funds in the new account
inviolate, Mr.. Hughel said Most
creditors had agreed to be patient
he declared.
Earlier in the day T. P. Burke
president of T P. Burke 81 Co., Inc.
told of a meeting on the day pre-
ceding the bankruptcy attended by
himself and officers of Pfaff &
Hughel. Plans were made, he said
whereby officers and statesmen o.
Pfaff g. Hughel were to work on
of the T. P Burke Offices as sales
men with so per cert of the ne
profits of the merged efforts to &c
into a fund to pay Pfaff & Hughe
creditors.
Subsequent developments made
the arrangement impossible, Mr.
Burke said.
Injured Man Ends Life
n, Tf..ft.d pfces