The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1938-12-09
U, S,LAUNCHES
JURY PROBE OF
M'KESSON FIRM
Treasurer Says Loss
May Hit $4,000

I.N.S.) The Federal Govern
ment today ordered a Grand
jury investigation of the affairs
of the McKeSsOn and Robbins
Drug Company.
NEW YORK, Dec. 9 1N.SD.
A fantastic story that rivals any
fiction mystery was reported un-
folding today in the SiXWay in
vestigation into the bankruptcy
of the $86.500,OOO McKesson &
Robbins Drug Company
Assets of between 10 and 20
millions of dollars are allegedly
missing from the crude drug
trading department over which
the president, F. Donald COster,
and an assistant, George Dietrich,
have control.
Charges made by the treasurer
and counsel of the firm before
New York Stock Exchange lnvesti
eating committee thus far have
touched on:
Forged Dunn g. BradStreet re-
ports on affiliated trading and
warehouse companies.
FAKE" WAREHOUSES;
Warehouses apparently are non
existent.
Supposedly worldwide trading
companies that had only small Of
fices presided over by lone women
secretaries or at most two or
three individuals.
Detailed reports on income and
outgo of inventories from alleged
ly non-existent warehouses.
On top of this, officers of the
company hint at even wider rami
ficationS. which may include an
illegal alcohol business.
SHORTAGE MOUNTING
The assets of the drug trading
department are carried on the
companys books at $1,000 900
and w. j. Cummings, director
and counsel for the drug firm
told the stock exchange a Cana
dian drug company might be
involved to the extent of a couple
OF million more"
How much there are. he
added. I'VE do not know
In his testimony Cummings re
vealed the receiver will ask the
court to appoint auditors to ascer-
tain the loss. Continuing, he said:
Mr.. CoSter told the receiver
that he knew nothing about 1t,
that it was the greatest surprise
to him as we'll as to everybody
else. Mr.. Dietrich, who was a
$4,000 employe in charge of
this department. according to
the receivers, shoulders the en-
tire blame.
TOTAL LOSS UNKNOWN
1--WE have Mr.. Dietrich'S state
ment that the loss is in excess of
$10,000,000. 1t may be the whole
thing is just a hollow balloon,
just shell. There may be 10th
ing there That is the worst of
the picture.
There is no involvement of
any other department of the
business. There is no involve
ment of the wholesale business
and no involvement of the manu-
featuring and drug business or
liquor business or the wholesale
of those liquors
Irregularities were turned up by
j. F. Thompson, treasurer of the
company, in a check-up few days
ago on insurance on the allegedly
non-eXistent warehouses.
TREASURER MYSTIFIED
He told the Stock Exchange,
speaking of the crude drug trading
department:
1T could be an entire balloon.
On the other hand, it could be
possible that there are assets
somewhere which we may or
may not be able to find. There
may be substantial assets COM
pletely masked by this thing,
because the thing is so incon-
ceivable.'
1t was Thompson who intimated
the case may have even wider
ramificatiOns than already indi-
Gated WhCn he testified:
I have heard some rumors in
this checking in the last two
weeks and we might be in the
alcohol business in a big way.
Whether that is conceivable or
not do not know"
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