The Waterbury Democrat., 1939-03-31
Local Broker, Phillips, Claims His Innocence
tContlpueo from Page 1)

OI SOuIlQUcSS, CIle UlQlCtlue1U SCaC6S, assets of the Canadian and parent corporations were inflated by means of false, or paper, purchases and sales of crude drugs.
 To facilitate these false purchases and sales, ~the defendants, it is charged, had the board of directors approve concerns which were non- existent, except as mailing addresses, as the firms foreign buying agents.
 One such concern, "W. w. Smith and Company" MT. Cahill said, was used to divert $150000 8 year from the McKesson & Robbins treasury, the payments being listed on the books as commissions to the firm.
 The Canadian concern, which con- sisted of a name on door, never did penny's worth of business, it is said, yet it sold $1,000,000 worth of stock and paid out almost $70,O00 annually in dividends for ten years to maintain an impression of sound- ness. Funds for the dividends, MT. Cahill state, were taken from the parent corporations treasury.
 The bill shows that until October 31, 1884, the parent company was in- corporated in Connecticut; that in August, 1928, incorporation papers were taken out in Maryland, and that after October 31, 1884, the Maryland corporation replaced the Connecticut corporation as the go- ing concern.
 Claimed No Activity
 Mir. Phillips, at the time when Coster-Musica ended his life by shooting at his Fairfield home last December 16, remarked that he had never been active in the company nor served on its executive commit tee; that he never had drawn a sal- ary or received bonuses. He said that he held about $250,OOO of Mo- Kesson stock at 1929 prices". The common stock sold locally as high as $52.50 a share and dropped to several dollars before the scandal of the false assets amounting to an estimated $21 ,000, ,000 resulted in its removal from the board, then to slightly more than $1 a share.
 The Waterbury broker said that he had visited Coster-Musica at his Fairfield estate a few times but that he had never entertained the McKesson Company president at Waterbury. Coster-Musica didn't play golf or cards, according to MT. Phillips, and seemed only to care for and business.
 Sketch of His Life
 MT. Phillips was born in Brooklyn N. r., November 28, 1890, attended Adelphi High school there, and first engaged in the brokerage business as 8 runner in 1909. Later he was connected with a New York broker age concern, then one in Boston. In 1914 he married Harriette Staples Wheeler, daughter of a Yale pro- lessor, and, a year later, came. to Waterbury to join the Griggs Com pany where he served successively as secretary, then president and then chairman of the board, his brother, Francis T. Phillips, former Republi- can alderman and present treasurer of the Republican town committee, replacing him as active head of the firm recently.
 Prominent In Club Life
 He has been prominent in various clubs and recently was reelected for his 10th term as president of the Waterbury Country Club. He is member of the Waterbury Club, the Madison Beach Yacht, Knick- erbocker Whist and St. Nicholas, New York, and many more.
 He is director of numerous cor porations including the Bridgeport Brass Company, the defunct Vol colt and Beardsley Manufacturing Company, Acoustics, Inc, Water bury Gas Light Company, T. A. D. Jones Company, New Haven, and many more.
 He has been a large contributor to Republican campaigns in Con- necticut and served from 1926 until 1882 as chairman and treasurer of the Republican campaign commit tee.