Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-03-09
WH|TNEY'S CALL
FOR STOCKS Barred
Large Blocks Handed Over
at Employers Request,
Cashier Testifies.
BULLETIN.

CdSnler leStlTleS.
BULLETIN.
NEW YORK, March 8 R.-
Richard Whitney. senior partner of
the bankrupt brokerage Arm which
bore his name and five times Presi-
dent of the New York Stock Elk
change, today shouldered full re-
sponsibility for the conditions
which led the sensational failure
Of his company
~ the Associated Press.
NEW YORK, March 9.-Robert j.
Rosenthal cashier of the bankrupt
firm Of Richard Whitney & Co., testi-
fed today he took large blocks of Sc
curities out of accounts held by the
firm for safekeeping and investment
and handed them over in January to
Richard Whitney. former president of
the New York Stock Exchange and
senior partner in the firm.
Mr.. Rosenthal; sworn witness at
. public hearing before Assistant New
York State Attorney General Ambrose
v. Mccall, said two or three blocks
Of securities were from the account of
the New York Yacht Club and the es-
tate of Ella Haggin Mckee.
Records identified by the cashier
who has been with the Whitney firm
since organization in showed
that as Of March 2, 1888, the Mckee
estate had long" position of 1000
shares of Homestake Mining Co. with
present market value of around
$4,000.
The cashier then identified the &C.
Club and said it listed United States
Treasury and other bonds with the ap-
proximate market value of $125,000.
He said he also gave these securities to
MIR. Whitney in January. saying he did
not remember the exact day.
Asked About Receipt.
did you get a receipt from Mr..
Whitney for the securities you gave to
him from these accounts" Mr.. Mccall
asked.
Il don't recall whether I did or
not" Mr.. Rosenthal replied.
Did you have instructions from the
New York Yacht Club or the Mckee
estate to transfer the stock to Mr..
Whitney," Mr.. Mccall asked.
"Only from Mr.. Whitney" the wit
ness replied.
Then, in other words. the transfer
was made without any order from the
yacht club or Mr.. Mckee,"
That's right" Mr.. Rosenthal re-
piled
rs it not a fact that the Mckee
stock is pledged with the Public Ma
tional Bank for loans of Mr.. Whit
ney?" Mr.. Mccall asked.
Il believe it might be-" Mr.. Rosen-
thai replied. Il don't know"
Rejecting reports widely circulated
In the financial district yesterday that
the bankrupt firm had been active in
stock of the Distilled Liquors Corp,
Mr.. Rosenthal was asked to give out
the holdings of the partners in this
stock.
Mr.. Whitney held 6s,735 shares of
Distilled Liquor common in various
accounts and with the holdings of the
other partners a total of 106,037
shares was held in the co-partner-
ship" Mr.. Rosenthal testified.
Manuals indicate there were 14S,750
shares outstanding -as of August 81,
last. F. K. Rodewald, a Whitney part
ner. was listed as a director.
The examination of the cashier on
this phase of the hearing was done by
Max Furman. senior securities &C.
countant of the Attorney Generals
ONCE In charge of the Whitney inves.
tigation by the State.
Would you say that SIS was an
average price per share paid for this
stock by the partners?" Mr.. Furman
asked.
YES" replied Mr. Rosenthal.
1t was further brought out that the
price paid varied from 50 to $32
share.
The first sale since January 10 of
this stOck-made on that day at 50 q
share-was made yesterday on the
New York Curb Exchange at $3.50.
At this point the examination into
the distilled liquors stock transac-
tions was abruptly terminated by Mr..
Mccall, who adjourned the hearing
until late today.
Previously Mr.. Rosenthal offered
the records of the Whitney firms bank
loans and the credit and debit &C.
counts of the partners.
It was disclosed the Arm had secured
loans approximating $1,200,000 from
banks and others and an unsecured
loan of $474,000 from J. p. Morgan
l. Co.
Mr.. Whitney, Mr. Rosenthal said,
owed the firm s6ll,000. Total in
debtedness Of the partners to the firm,
he testified, was $3,911,27l, Offset by
credits to the amount Of $3,093,807.
Only $500 shares of Distilled Liquors
are In the vaults at the present time
the balance Is pledged to loans.
Mr.. Rosenthal appeared at the hear
ing with Henry D. Mygatt, partner and
floor broker for the firm
Prior to his testimony, Mr.. Mygatt
likewise identified the records of the
yacht club and Mckee accounts, and
at Mr.. McCall's request listed the per-
centages Of the partners shares in the
firm.
The articles Of partnership, Mr..
Mygatt said. give Mr.. Whitney 49b
per cent, Edwin d. Morgan, jr., 21h
per cent, F. K. Rodewald 2lh per cent,
Mr.. Mygatt 3 per cent, Daniel g.
Condor per cent, John J. McManus
~ per cent.
Mr.. Mccall said Mr.. whitney,
whose firm not only was suspended
from the stock exchange yesterday.
but went into bankruptcy, with Joseph
Lorenz, an attorney. appointed as re-
ceiver today-had not been served as
yet with . subpoena.
There was some dispute at the OPEN
ing Of the hearing this morning be-