HEAVY FINANCIAL LOSSES

Timaru Herald, Volume CXLIV, Issue 20983, 11 March 1938, Page 9

HEAVY FINANCIAL LOSSES

AMERICAN FIRM’S BANKRUPTCY, EFFORTS TO REPAIR FORTUNES READY TO MEET “THE CONSEQUENCES” United Press As Delation—By Electric Telegraph—Copyright (Received March 10, 8.15 p.m.) NEW YORK, March 10 Mr Whitney has issued a statement absolving other members of the firm of Richard Whitney and Company from any responsibility for his bankruptcy, which was announced yesterday. He admitted that he knew certain of his actions were wrong and expressed his readiness to “meet the consequences.” A preliminary examination revealed that he personally withdrew securities valued at 400,000 dollars from the accounts of two of his firm’s customers. It was further revealed that the six partners in their own accounts with those firms had a net debit balance of 817,000 dollars. Mr Whitney’s personal debit balance was 611,000 dollars. No Appreciable Effect on Market The revelations of the company’s affairs has not had any appreciable effect on the market to-day, it being considered that it is a matter involving solely the financial status of one house. It is felt that the chief psychological effect will be to strengthen the hands of the Securities Exchange Commission and the Government contention that Stock Exchange firms must develop a greater sense of public responsibility. “The New York Times” says that the firm’s losses are between 1,000.000 and 2.000,000 dollars. There is no indication as yet of Whitney’s own losses. He had a 495 per cent, interest in the firm. He apparently made many large loans in trying to repair his fortunes. One of these was for 300,000 dollars for which he pledged his country estate. Various Rumours Rife Other newspapers retail various rumours. One is to the effect that members of Whitney’s family and his friends lent him more than 1,000,000 dollars in an effort to rescue him from his predicament. Wall Street gossip also alleges that J. P. Morgan and company was prepared to advance all the necessary funds to rectify the firm’s position when it first indicated that it was facing what might be termed normal bankruptcy. However, when the Stock Exchange investigation began in January and all brokers were compelled to file statements of their condition, it was disclosed that there were irregularities which might be punished criminally and J. P. Morgan and Company declined further assistance.