The Waterbury Democrat., 1938-12-17
Stockholders Stand
 To Lose Millions In
 Big Drug Co. Scandal
Continued nom Page D

Ter. the Swedish match king; Alex endre Stavisky, the Frehchman whose swindle nearly brought down the third French republic.
 Presnt indications were that the borthers, Philip at least, had caused an $18,00O 900 shortage in the listed assets of the firm. This was the valuation of the crude drugs depart ment which was found to be norl- existent except in name. Its assets were supposed to include six ware houses stocked with supplies in Canada, worth $1O,OO0,000 assets of the company. However, some of this money might be located, or recov- cred from the personal property of the Musicas.
 Over The Counter
 Although trading in McKesson- Robbins stock has been suspended on the New York Exchange, it is still being traded over-the-counter and on the basis of yesterdays quo tat.ons, the three issues of stock have dropped $33,783,887 in value since the suspension.
 Coster -Musica had the confidence of the shrewdest financiers; they had floated stock issues for him and much of it had reached the small fry" of the nations investors. They stood to lose most or all of their common stock - 1,282, ,983 shares of 1t. The effect on 6O5 ,954 shares of preferred stock was in doubt. In addition, there was outstanding $l5 ,834,000 worth of convertible bonds or debentures.
 Four Separate Probes
 As the affairs of McKesson & Rob- bins and the Musica brothers devel- oped in scope today, four federal agencies were at work. The justice was concerned with va rious fraudulent aspects; federal grand jury already had indicted Coster-Musica, George Dietrich Mu- sica and Vernard -Musica, and was still hearing evidence. The post office sought evidence that the mails had been used to defruad. The of agriculture an- lounced it had been Investigating the adulteration of drugs for three months. The securities and ex- ,hange commission was deeply en- neshed in the firms market trans actions.
 Ambrose V. Mccall, state assistant attorney general conducting @ public nearing of the scandal, developed he munitions phase and said it night involve living persons" That vas after Coster-Musica's suicide. He said the next public session would oe Monday, after secret testimony vas taken over the weekend which night be of too alarming 8 nature o publish at once.
 It was reported that Coster-Musi- a had been financial packer of the ship Mar Cantabrico, which was captured two years ago y Spanish Nationalists while trying ,o run blockade to LoyaliSt Spain.
 Quinine Sub Standard
 P. M. M. Wharton, eastern divi- sion director of the agriculture de- oartment's food and drug adminis- ration, said the government had seized 84 bottles of McKesson & Robbins quinine tablets in New Jer- sey on September 26 and found them to be sub-standard, and that on. Co., toher 5, in Albany, N. Y, 576 bottles of the same type had been seized. He said that 8 formal hearing of the case is pending.
 The supposition was that these nefarious businesses might have been conducted by Coster-M -Musica and possibly others, without the knowledge of the majority of di- -ectorS and stockholders. The crude drugs department was a blind for them.
 It was believed that the depart nent might have assets somewhere, concealed because of their illegiti- mate nature. In such event, money night be recovered for stockholders. It was certain, also, that authorities would seize the Coster-MuSica 20- room mansion in Fairfield, his 1OO- foot ocean going yacht, and what ever of his money and goods might De available. Already, a $100,000 brokerage account carried in the name of Mrs. Coster, has been tied ID along with an account in the name of John Jenkns, Mrs. Coster's brother, that had returned $137,00o asst year. Testimony at the attor- 1ey generals hearing indicated that Coster-Musca had owned both ac- counts.
 May Have No Assets
 On the other hand, it was possible that the crude drugs department mad no assets, that it had been used to drain $150,000 a year in faked from McKesson & Rob- pins.
 The drugs firm, third largest in the world, proceeded with business as usual today in its offices and stores throughout the country. Its ! 500 employees were not affected, di- rectors reported that saies had not declined and that except for the crude drugs department, the firm would show 8 profit for the year.
 The effect on stockholders was em- ohasized in over-the-counter trad ng, however. Common stock, that had sold at $7.50 share on Decem- per 5, day before the suspension, brought 75 cents a share. Preferred stock, quoted at 36 1-2 n Decem- per 5, was 2 bid, 2 3-4 asked.
 Three creditors of the firm filed bankruptcy proceedings in Con- necticut yesterday, but for the pres snt the directors were still in con-