The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-11-12
.PFAFF.HUGHEL
TOOK $4,000,
LILLY CHARGES
Lost More Than That in
Dealings With Firm,
He Testifies.
BARES $4,000 LOAN
Up to Bethlehem Steel Buy,
He Admits, Transactions
Were Regular
BARES $4,000 LOAN

W ~ ''SSN'eis
Eli Lilly, president of Eli Lilly &
Co, today told a Federal Court jury
he lost more than $4,000 in dealings
with Pfaff & Hughel, defunct city
investment firm.
Mr.. Lilly's testimony was directed
against Walter P. Pfaff, Myron M
Hughel and Robert B. Robinson
officers of the firm, who are charged
with using the mails to defraud. The
indianapolis business and civic
leader was one of eight prosecution
witnesses who testified today.
According to his testimony, Mr.
Lilly ordered 500 shares of Bethle-
hem Steel stock in September, 1884
in a phone conversation with Mr.
Pfaff. The witness said he received
confirmation of the transaction
gave checks amounting to $13,277. 40
but never received the stock or a
refund.
Reveals S20,O00 Loan
Mr.. Lilly also disclosed he had
made a $4,000 unsecured loan to a
member of the firm when the COM
pany was in financial difficulties.
On cross examination Mr.. Lilly
admitted that UP until the time of
the Bethlehem Steel purchase his
dealings with the firm had been
satisfactory.
He conceded, however. in answer
to a question by Val Nolan, District
Attorney. who has charged the
firms crash was a million dollar
fraud that he had expected de-
livery of the steel stock and the
firm had not authority from him
to withhold it.
Others Tell OF Deals
Miss Margaret Kerr and Henry B.
Ostendorf Jr.. both of Vincennes;
Roland A. Crawford, Columbus.
Ind, and August Fodder, Kendall
vile, gave similar testimony reveal
ing purchases that ranged from Sl48
to $524.95.
They were followed just before
noon by Thomas CODY, Blooming
ton; Donald B. Sheimer, Indianapo-
lis manufacturer, and Charles E.
Cliff, Federal Building assistant
custodian. They also paid for stock
they did not receive, they told the
jury.
Questions by defense attorneys
indicated their case is to be that up
until recent financial difficulties of
the firm, dealings with customers
had been, in many instances, prof
table.
Defense Objects Often
Frequent objections by the de-
Tense, however, angered Judge Rob-
ert c. Baltzell at one stage of the
proceedings and he said:
L don't like these frivolous OBJ
jections. This is fraud case and
the question is MATERIAL
The defense had objected to a
question from Mr.. Nolan as TO
whether the witness would have
paid for his stock if he thought it
not to be delivered.
Four government witnesses, DR..
Hubert Pirkle, Rockville: Medford
Burton. Oaktown: DR.. John M. Hale,
Mt. Vernon, and Miss Agnes White,
his assistant, yesterday told the
jury they paid for securities that
never were delivered. Their losses.
they testified. varied from 500 to
more than $1,000.
What Defense Claims
Defense attorneys, in opening
statements. asserted the firm main
tanned a reputation for honesty and
fair dealing, that the corporation
had made money for many of its
customers. The defense also con-
tended it was the desire of some of
these customers for additional profits
that led the firm more deeply into
difficulty and that the defendants
never profited but on the the con-
trary. were pauperized by their
efforts to save the firm.
The eight attorneys representing
defendants were asked by Judge
Robert c. Baltzell to appoint one of
their number to speak for the others
in routine objections and question
ing in order to facilitate progress of
the trial.