Evening star., 1938-03-14
WH|TNEYPLEADS
GUILTY |NLARCENY
Ex-Head of Stock Exchange
Reads Confession-Five
to 10 Years Likely.
By the Associated Press.

BY the Associated Press.
NEW YORK, March 14.-Richard
Whitney, 40, five times president of
the New York Stock Exchange and
head of the bankrupt Wall Street
brokerage firm of Richard Whitney &
Co., pleaded guilty today to grand
larceny in the theft of $l05,000 worth
Of securities from a trust fund.
Turning deep crimson under a
healthy coat of tan, the socially
prominent financier read a statement
to the court in which he made full
confession of guilt and said he was
ready to pay the penalty,
In numerous instances, he said. he
had pledged securities without author
ity of customers who owned them,
using the proceeds in firm business.
Whitney, whose firm handled many
of the J. P. Morgan & Co. brokerage
accounts. may be sentenced to serve
from to 10 years in prison for first
degree grand larceny. Sentence will
be pronounced in two weeks.
Whitney read his statement with a
choked voice. At the conclusion,
bailiffs led him away through the
prisoners gate to a room below where
he was booked and fingerprinted.
Accused in 100000 Theft.
In addition to the grand jury indict-
ment to which Whitney pleaded guilty
today, procured by District Attorney
Thomas E. Dewey, he has also been
accused of the theft of 100000 worth
of securities from the New York
Yacht Club, of which he was treasurer.
The second indictment was brought
by State Attorney General John ].
Bennett, jr.
Shortly after Whitney made his
confession Of guilt, Gregory F. Noon
an, crime chief of the United States
attorneys office, said that Mrs. Mar
torie Pyle Montgomery, wealthy
widow, of Wilmington, Del. related
by marriage to the Du Points, had been
questioned by Federal agents regaid-
Ing affairs in the Whitney concern.
Mr.. Noonan said he did not know
whether the vivacious Mrs. Mcnt-
gomery would be called before Fed
eral grand jury for further question:
ing.
Mrs. Montgomerys husband vas
killed in an airplane crash in 1882.
The charge to which Whitney
pleaded guilty concerned his activities
as trustee for the Sheldon trust fund,
in which his wife, Mrs. Gertrude
Sheldon Whitney. and her sister, Mrs.
Mary Sheldon Murphy, were the main
beneflciaries
District Attorney Dewey. in re-
sponse to request by Defense Coun-
sci Charles Tuttle, said he had no
objection to continuing Whitney at
liberty on $4,000 bail.
Il have no objection" he said, upon
the condition-and solely upon the
condition-that Whitney co-operates
with my Office. the State attorney gen.
eral, Federal attorneys and all other
authorities investigating the failure of
Whitney & Co., while he is out on
such ball.
Whitney also is under $4,000 bail
on the Bennett indictment.
Text Of Statement.
Following is the text of Whitney's
statement In court today:
with your permission, your honor.
I should like to read this statement to
the court.
"On last Wednesday on March 9,
at pm, I issued public statement
that stood ready to make full an
swers to all questions concerning those
actions in connection with the failure
of my firm which I considered to be
wrong and for which assumed full
and sole responsibility.
presumably, because of the subse-
quent indictment and subsequent
charge have not been called for
Interrogation. In consequence. de-
sire on this occasion Immediately to
make the facts available in a clear
manner, so that there may be no mis-
understanding or failure of informa-
ton in any quarter.
ION January rs, 1888, had an ac-
count in my firm, in which there were
certain securities, list of which is in
the possession of the authorities. Some
of these securities were the property
of Mary S. Baird, the estate of Ella
Haggin Mckee, the New York Yacht
Club and the estate of George r.
Sheldon. 1
Pledged the Securities"
CT tharo |
we're no debit balances. they were free
and clear Without the authority of
these customers, I pledged their Sc
curities In demand loan made to
me on my personal note, dated jan
uary 26, 1888, by the Public National
Bank g. Trust Co. The proceeds of
this loan were deposited in my firm.
At the time of the failure of my firm,
on March 8, 1888, the amount Of this
loan was $280,000.
"On January T. 1898, and pre-
viously had possession of certain
other securities, list Of which is in
the possession of the authorities
These securities were free and clear
and were the property of the estate of
George r. Sheldon.
Without the authority Of the estate
these securities were pledged by my
authority in a demand loan made to
my firm by the Corn Exchange Bank
&Trust Co., dated January 7, 1898.
At the date of the failure Of the firm
the approximate loan value Of these
securities was $65.000.
"1n January, 1888, Samuel s. Sands
had an account in my firm in which
there were certain securities, the value
Of which largely exceeded the debit
balance in his account then appearing
on the books.
Shown in Records.
These securities were pledged by
my authority in various loans to my
firm without his authority and were
sold during the latter part Of January
or the early part Of February, 1888,
with the result that these loans to my