The evening world. Newspaper, April 25, 1922, Page 4

4 a THE EVENING WORLD, TUESDAY, APRIL 25, 1922. substantial part out of money and securities intrusted to the firm by cus- TERY IN VANISHED $4 000 000 LOST =" aval wire bills to the firm's branch offices situated in fourteen of the 1 t} principal cities throughout the country footed up to more than $100,000 a BY 8,000 VICTIMS OF DIER FAILURE year. Office rental totalled approximately $125,000 a year and other items Franklin Simon & Co. A Store of Individual Shops is ett, » #uch as paper, printing and advertising swelled the expense account to ap- proximately $2,000,000 a year. i SAY DIER DREW OUT $4,437 A WEEK. ‘An auditor who went over the books for 1920 for the purpose of making up the firm's income tax statement for that year states that for the period the firm showed a loss, The following year losses were tremendous, yet persons who have recently had access to the books assert they indicate Dier, in 1921, drew out for his personal account $280,708.44, or an average of $4,437 a week. Even persons totally ignorant of the ways of bucketeers can easily imagine what desperate measures It was necessary to adopt to meet this ny in their New York, Chicago and Milwaukee offices. huge expense bill ere has been an element of mystery regarding some of tho vital detalls The commiasion asked by brokers on the New York Stock Exchange for transaction. Since the failure of Dier & Company, A. Stoneham, | buying or selling a medium priced stock Is $16 for each hundred shares. In an order of the Federal Court, was examined by interested attorneys | order for Dicer & Company to meet the expense accoxnt it ts alleged to have ing it, but unlike the many other witnesses in this now famous case! had in 1921 It would have been necessary to ve<sute customers’ orders for mination was held in the seclusion of a room In the Bar Association | nearly 15,000,000 shares of medium priced stoct on the vasts of New York on February 22, a legal holiday, and the fact that such examination | Stock Exchange commissions. was was not made public for some time afterward. Wrath of certain ‘This {s on the assumption that the firm could have retained fir itself the creditors of the defunct Dier firm, who are endeavoring to learn what salvage | commissions It charged its customers, But it appears that the bulk of Dier's might be saved from the wreck was thereby rekindled by what they con. t may seem, was in stocks and bonds listed on the Stock sidered the unseemly consideration shown a person who, they allege, trans. nd sell these securities Dier & Company had to turn over ferred their accounts to the Dier firm without first obtaining their express all the commiasion received on New York Stock Ex- rom its clients, [ze ahy rate, It now appears that for turning over the accounts fn: his Tho only profit it could secure from its customers on Stock Exchange New? York, Chicago and Milwaukee offices, together with- the debit balances) stocks was to charge customers Interest on debit balances. For Instance, if a a to them, Stoneham rocelved as remuneration $210,000. urchase say 600 shares of United States Steel at 90 he would ‘TIt is stated by an auditor who checked up the transaction between Stone- tas margin $5,000. To make this purchase Dier & Com- as Compuny and Dier & Company that the latter firm received from} pany, like all other brokerage houses, would have to put up or loan the cus- to than FIFTH AVENUE, 37th and 38th STS. (Continued From First Page.) $, or immediately prior to the time the New York Stock Exchange ripped ticker service, Charles A. Stoneham & Company, who had decided to of the brokerage business, made an arrangement with Dier & Com- PARFAIT FOOTWEAR For eMadame and Mademoiselle lee Fifty Different Models At One Price EVERY FOOTWEAR FASHION THAT HAS BEEN TRIED OUT ON FIFTH AVENUE Is WAITING TO BE TRIED ON IN THE SHOE SHOP All With Hand-Turned Soles Strap Pumps STEP-IN PUMPS STRAP SANDALS TONGUE PuMPsS Cut-ouT Pumps OPERA Pumps change busine Figured Silk Zoathorcrope Focks for Misses Quaint, charming am securities valued at $3,178,882. Because of the objection raised by] tomer tho balance of the purchase price, which, in this instance, would be Customers at the time $194,717 of securities had to be retransferred | $49,000, or loaning this money there would be charged the customer Interest Sesion cuue pals or sedan wore ian Naninaiecraly, #118t0;000 less }at the rate of from 6 to 10 per cent., depending largely on money market con- or asset postion of the firm) was increased about $1,700,000, ditions. But it was the practice of Dier & Company to charge customers in. ere Is no greater mystery attached to Dier & Company's business than rounding the disposition of these securities after they wore trans- } to the Dier firm. Investigation thus far pursued throws little light on } ject. The $1,700,000 added to Dier's asset position was in some un- able manner almost immediately dissipated. doubtedly, part of it went to Philadelphia to meet the demands of ws who made run on the firm following the announcement that Hughes had been expelled from the Philadelphia Stock Exchange. It een the custom of the organisation at that time to keep the accounts Me New York and Philadelphia offices separate, but apparently because Speculation in the Philadelphia office, which was under the direct sion of Colonel Hughes, that office was unable successfully to meet theidemand of customers and it became necessary to ship $700,000 from the ‘ork to the Philadelphia office. D STRONG INFLUENCE TO HELP. while matters in the New York office were going from bad to worse perate measures were adopted to rehabilitate the firm's standing. the main objectives was to have tickers giving New York Stock Ex- juotations restored. . ing to a person In a position to know the facts it was decided to ‘thembership on the New York Cotton Exchange. Membership on this carries with {t considerable prestige, and the move was adopted as ming wedge in a campaign to regain favor with the New York Stock terest on debit balances, although the stock purchased for customers’ account wus immediately sold out and the money was not really loaned. Dier & Com- pany not only took a customer's money for margin, but charged him interest In addition for the use of it. Matters finall yreached such @ state that exnedients were resorted to which were new even to bucketeers. For instance, it became a practice to ship ® block of customer's securities over to an ex-employee for the purpose of plaintive manner, as though being abused: ‘I don't know. I’m not re- sponsible."” And no one has been arrested! Poathercrope is a rich new cre silk with attractive figures in color on a {ld of plain white, ze. nN the application for membership to the New York Cotton Hxchahge ther¥ ‘were indorsements of the firm by men of nation-wide prominence. One thége,'s0 it Is stated, was one of the best known United State: Here is something \ Extraordinary value at A.JAECKEL & CO. Furriers Exclusively No Connection With Any Cther Establishmt in the World Rie bee 8 WOR thi THIRTY-FOURTH STRET Att LEATHERS IN ALL COLORS AND ALLGOMBINATIONS OF LEATHERS AND Coors, INCLUDING SATINS » » Feminine Footwear SHop—Third Floor | | Only a very yung Miss patterns in new, ' youthful modes Of a very pet} Woman arising a loan on them, But t 7’ | securities, so it is sald, were immedt- can be at once ingenuous and sart: So we ately, or as soon As ctieable, sold ¥ a . . . in the market, ment of Dier ‘ are showing these charming frks in sizes & Company was # it is alleged no : * 6 erport was received from this “loan” A ‘ broker fo rweeks prior to the failure. ; n "3 14,15, 16 and 18 " The last measure adopted to avert 4 aN the fast approaching and inevitable re l 2 crash was to attempt to realize on CY JI. stock’ of the Eli Progresso Company, i By ~ owned by Dier. The chief asset of this W | ¢ RAC company !s a disputed title to mining * at property in exico. To opearte this . 5) mine betw 000,000 and $4,000,- r > rr would be required, ‘The pesron & PERCENT OF who, was endeavoring to raise a loan for Dier at the time of the failure has since been asked if he told persons this move soon proved barren of results, Membership on the Cotton | DUYine the stack, thal Vall amounl was not gained and other measures were decided upon. Soneat purpoees” Hid anewir subi: this time panic conditions prevailed within the firm's organization.| Slorisea the code of the Wall Street h a house account known as number 38 and through other numbered] puceteer. It was, ‘One never tells ts, the firm had sold out practically all of the securities it was sup-| that sort of thing to a prospective io be carrying for customers, From the evidence in the case thus far] gtook client." it does not seem to have made much, if any, difference whether these] "ne reply Is no less Interesting and were owned outright by customers or were carried on margin.| equcational than the one given by “nearly all, so it seems, were dumped on the market for the purpose) pier when he was asked where the Brn See crs barepnal ice inces of Dior and to meet the pay-| agsets of his firm and the several mil- d other expenses that were the talk of the Street on account, of their! jjons of dollars of customers intrusted to had disappeared, -He said, in a oe ye 'D TO GET TICKER RESTORED. . was at,this time that Dier called into consultation State Senator Lusk, whom he has said that he had known for about a month:]’ in August after Colonel Hughes had withdrawn from the firm and " decided to organize firm knot hough th i : alien Mi UMAao Asa ee |e ‘FURS Ne Connection With Any Ofhrer Establishment in the World ‘FURS the account af this new firm Dier transferred 260 accounts, with oii J ) FOR ——_ a lea properly checked up against them. The books were shown to REMODELED ED Best & Co. Fifth Avenue ac 35th -Screet Established 1879 tion was. Employees who should have accurate information regarding ter state that the securities in the box were never checked up. ~_ [ng as it may soen affairs were in such state that any one who might THIRTY FOURTH. STREET tn to gain access to the security box could have helped himself without danger of detection through a tally of securities in the box. during all this time, no effort was made, apparently, to retrench in ‘The salary account alone footed up to $1,000,000 a year. Clerks started to work for the firm at from 860 to $100 a week two or three ‘before the crash were drawing down from $12,000 to $20,000-a year ‘from expense money, These, of course, were paid in whol : ator Lusk and an examiner was invited from the Stock Exchange to AND REPAIRED 1% OF. them. \ But the dodge did not work and the tickers were not restored. IN OUR. OWN YUR OWN ! ‘ m Dier & Company management was #0 inefficient that no one can be}: WORKROOMS ‘ VLUATION ! : ho knew in the year prior to the failure how the firm stood, or what ambert Brothers Diamonds, Watches, Jewelry ( Platinum carved Other carved rings ring, $25 $16.50 up. ‘Salting Down” Their Wedding Ring Women's and Missé Coats, Capesand Wraps are offered hee at telling vales. To speak of Value is to think of Worth. And here are values worth speaking of. Women’s Spring Frocks Poifet’Twill Coats Fringed Silk Wrats . . } SPECIAL 29.50 Meet the Advance Mode Wear Smart Fur: Collars A group of Spring and Summer dresses at 3 5 00 at 25 00 in various smart new styles, featuring floating panels, self-folds, pin-tucks. beads and cut embroidery. 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