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General Examination of
November 23, 1921
In the District Court of the United States For the Eastern District of Michigan Southern Division.
In the matter of Universal Book Stores, a Michigan Corporation, Bankrupt
In Bankruptcy. No. 4946.
General examination of Albert Winslow Ryerson, at Detroit, Michigan, November 23, 1921. Before George A. Marston, Referee.
Appearances: E. G. Wasey attorney for bankrupt, Clark, Emmons, Bryant, Klein & Brown Lawhead & Kenney and Grover L. Morden attorneys for trustee and creditors.
Albert Winslow Ryerson, being duly sworn, testified as follows:
Examined by Mr. Morden.
Q: How long have you lived in Detroit?
A: Oh, probably 25 years.
Q: What was your business previous to going into the Book Store?
A: I was the representative for an Eastern Rubber Company.
Q: When did you—Did you purchase a book store from Homer Adair?
A: I did.
Q: In 1917?
A: I did.
Q: Where was the book store located?
A: 131 Grand River Avenue West.
Q: What were the terms of purchase of those book stores from Homer Adair?
A: I don't remember. I have a copy of the contract in my office. It was something to the effect of around $1,000 in cash and an automobile valued at a certain sum—I think of $800—and the balance in notes, I think.
Q: How much was the balance?
A: The whole purchase price was around $4,000. I don't know definitely. I think somewhat less than $4,000.
Q: When were the Universal Book Stores incorporated, if you remember the date?
A: I think it was in January 1918; January 15, 1918.
Q: Who were the incorporators of the Universal Book Stores?
A: Reverend Hugh Jack, Albert W. Ryerson and Doctor Gordon Hill.
Q: And how much was it incorporated for?
A: $15,000, I believe.
Q: $15,000. I ask you if you know what this is, Exhibit 1?
A: Articles of Association, in large type. I will have to look at the smaller with my glasses. Yes, sir: Articles of Association, incorporation papers.
Q: That is the original Articles.
A: Yes, sir.
Mr. Morden: I offer this in evidence: the original Articles. Is there any objection?
Mr. Wasey: No, no objection. I would like to look it over.
Q: Mr. Morden: The original incorporation was for $25,000, was it not?
A: Well now, I don't remember whether it was $15,000 paid in. Yes, I think it was.
Q: Just read that. Is that your writing?
A: No, I think that is Frank T. Lodge's writing. That was done in his office. Yes, $15,000 and $10,000 preferred.
Q: $25,000 was the incorporation. Now, how much of that was paid in cash?
A: Well, I don't remember just now. I would have to look up my checks.
Q: Well, you signed this, did you not?
A: Yes, you see, this is quite a long while ago and I have been mixed up in other affairs, so that I can answer your questions a great deal better after I get on to what I want to refresh my memory.
Q: Well, it says here $15,000 in cash. Is that correct?
A: I think I have the checks—
Q: Well, I know, but you signed this, Mr. Ryerson. This speaks for itself. Was there $15,000 paid in?
A: There was $15,000 paid in, yes.
Q: Who paid the $15,000 in?
A: Well, I paid the larger portion of it.
Q: How much did you pay in?
A: I think around $13,000. I don't remember just exactly.
Q: Did Doctor Hugh Jack pay $1,000?
A: $1,000.
Q: Did Doctor Gordon Hill pay $1,000?
A: Yes. Doctor Hugh Jack, of course, was the third. Doctor Jack was given his stock.
Q: Well then, who paid the other $1,000?
A: I did.
Q: Well then you paid $14,000?
A: Yes.
Q: And Doctor Gordon W. Hill?
A: $1,000.
Q: This is cash. This says cash here?
A: Well, it was cash. Yes, that is right.
Q: Did you pay $14,000 cash of your own at that time?
A: Well, cash and—
Q: Just answer the question as to cash, Mr. Ryerson. Yes or no?
A: Well, I don't just—I had—I should prefer to look at my checks and records.
Q: You said these articles of incorporation that $15,000 in cash was paid in?
A: Yes. Well, I think I can produce the checks to show that. I think I can show you the checks. I think I have the checks to show that.
Q: I show you this Exhibit 2 and ask you if that is your signature?
A: Yes, sir.
Q: And the second signature?
A: Yes, sir.
Q: I ask you if you know what that is Mr. Ryerson?
A: This is the minutes of the first organization meeting of the stockholders of the Universal Book Stores, December 22, 1917. The title is on the paper there.
Q: I ask you, Mr. Ryerson, if you remember—
Mr. Wasey: I thought there was a book with this stuff in it.
A: I have the book, Mr. Wasey, but not the one with the meetings. The directors' meetings were not written in the book. They were written in pencil and thrown in the book. I have the book here, if you want to look at it. I will have that typewritten also. The original as was made up—Whoever wrote that, I don't know the handwriting of the different individuals.
Q: Mr. Morden: Do you recall at this meeting who was appointed secretary-treasurer?
A: I think Doctor Hill. I think I was president. I think Doctor Hill was secretary-treasurer and Hugh Jack was vice-president.
Q: Do you recall at this meeting the following amendment being made in the Articles as signed by you, Doctor Hugh Jack and Gordon W. Hill?
[ . . . ]
Q: Then you were on a tour in the east, for the purpose of purchasing new and secondhand stock for the new store?
A: Yes, a new stock principally.
Q: Well, it was a new store?
A: Yes.
Q: Where was the new store located?
A: 57 Grand River Avenue, the old number read. Mr. Walker was with us in the east during a portion of that purchasing trip.
Q: How long were you gone?
A: About a month.
Q: Where did you go?
A: New York, Boston and Philadelphia. And Baltimore.
Q: What led you to go on this trip?
A: All merchandise for retail stores is sold to buyers who visit the east. The best market is in the east in the publishing cities, and it is quite essential, in order to get right prices and the right merchandise, to pick your stock personally.
Q: Well, did Mr. Gibson say anything to you that would lead you to want him to go to the east?
A: Mr. Gibson insisted on going also, and we concluded that is was a good plan, from the fact that he was new in the book business and we thought it would give him an education in that line—to help purchase the stock and help buy the goods—and he could market them a good deal easier.
Q: Did Mr. Gibson tell you that if he went east, he would be able to secure someone to invest in stock in the Universal Book Stores?
A: He gave me the impression that his sister-in-law in Baltimore would put in $7,000. In fact he promised me that she would put in $7,000 and desired that I should go to Baltimore with him, and I invited him on the strength of the assurance of getting this $7,000 from this person. When I desired to halt buying after we had expended about $5,000, Mr. Gibson urged me to buy 10 or $12,000 worth of stock for that location, and on the strength of the assurance that he would put in $7,000 we went in debt to that extent.
Q: Well, did you go to Baltimore to see the people?
A: I did.
Q: What did they say?
A: I found the woman an ignorant barmaid, the widow of a former saloon-keeper who had recently sold the business and, through Mr. Gibson's persuasions, was to come to Detroit. And he assured me that she was to put in $7,000. This, however, being a highly specialized, technical business, requiring education and people with some knowledge, I was rather disappointed at what I had to take in as an interested party in the business, as the woman was exceedingly vulgar. She slung beer over to those farmers in the market so long, that that was all she knew, apparently.
Q: Anyway, you did not succeed in getting the money for subscriptions to stock?
A: We had given Mr. Gibson $1,000 of stock.
Q: Who gave Mr. Gibson $1,000 of stock?
A: I think Doctor Jack's interest of $1,000 was transferred to Mr. Gibson. I would have to take that under advice.
Q: Mr. Gibson never paid for this stock?
A: No, but that was his bonus: his premium for getting that $7,000.
Q: Is he still possessed of the $1,000 of stock?
A: Yes.
Q: And he had never paid for it?
A: He has never paid for it.
Q: That stock was worth how much? Do you remember?
A: Well, it was worth par at the time.
Q: $10,000?
A: No, $1,000; 100 shares.
Q: When did you purchase Doctor Buck's library in Cincinnati?
A: I don't remember.
Q: Why didn't you also take in Cincinnati on this trip?
A: I think we did. I think we came home that way. Yes, surely.
Q: Who is Doctor Buck?
A: A very dear friend. who has now passed over: a man interested with me in philosophical and theosophical lines.
Q: And occult lines?
A: Yes.
Q: You purchased the library from Doctor Buck's estate, didn't you?
A: Yes.
Q: What did you do with the library?
A: It was put into the stock of the Universal Book Stores.
Q: And what did you pay for the library?
A: Well, I don't remember. It seems to me $700.
Q: Did you pay cash for it?
A: Well, we paid part cash and part notes.
Q: Have you any of Doctor Buck's books in your library now, that you took from the Universal Book Stores.
A: I have none of Doctor Buck's books that do not belong to me. I have some autographed copies of Doctor Buck's books that were given to me, and Mr. Gibson has some of Doctor Buck's books.
Q: How many books belonging to the estate of Doctor Buck—that is, the property of the corporation—are in the hands of Mr. Gibson?
A: I don't know as I can say. I knew that he was collecting an occult library, and I had information that he had taken the books from the book store.
Q: Do you know of any way that the trustee in this matter may discover how many books Mr. Gibson has belonging to the bankrupt corporation?
A: We purchased on this trip a book called Karmsutra [sic]. That book disappeared shortly after that. After we returned from New York, Mr. Gibson was desirous of having that. There is another book, Secret Symbols of the Rosie Ucrians [sic]. It means "Rose Cross." Another book called Shiva Sandhida [sic], and those books he borrowed or claimed to have borrowed and subsequently claimed that he lost them. Well, there were others. I don't remember them.
Q: Well now, Mr. Ryerson, did he take those from the corporation?
A: Why, yes. One of the books, Shiva Sandhida [sic], we either had or picked up in New York. I had that in my grip. He said, "I want to read this."
Q: Before you turned it over to the store?
A: That is the last I saw of it.
Q: Did you ever make a demand on Mr. Gibson for an inventory of the books purchased from the estate of Doctor Buck?
A: Yes.
Q: Did he refuse to give you this?
A: Yes, sir.
Q: Did he state the reason why he refused?
A: The man was apparently very indignant because he could not get a half interest in the business.
Q: I just want to know, did he refuse?
A: Oh, yes; he refused. I have reason to believe that he has a card catalogue of the Doctor Buck library. I never saw since he took charge of it.
Q: Well, do you believe, Mr. Ryerson, that Mr. Gibson had a substantial amount of books from this library in his possession?
A: I do, because he went into the mail order book business; he and his wife together, I am convinced, from what books he appropriated from the stock.
Q: If I secured from you, Mr. Ryerson, an inventory of the books from the Doctor Buck library, could you pick out from this inventory the books that went into the possession of Mr. Gibson?
A: Well, that would be exceedingly difficult. The library has been in the possession of the store for a long time, and has been sold out of continually.
Q: Well, but this library was a rare library, was it not?
A: Yes. It was used—he was the president of the Theosophical Society. Well, we did not get these rare books. We had a general run of them, because the family took the rare books.
Q: That $700 as the purchase price of this library, was that a very good bargain for the corporation?
A: Considering our clientele at that time, yes. It was all that the library was worth. It was the association of Doctor Buck having owned the book which made the book valuable to a certain picked clientele.
Q: In September 1918, did you take from the corporation moneys to pay for life insurance?
A: I don't remember.
Q: Or to pay interest on your home mortgage?
A: I don't remember. The checks and vouchers will show whatever money that I drew. I put in more than I took out.
Q: Did you take moneys out of the corporation to purchase an automobile?
A: No. The corporation, I think, purchased an automobile from—
Q: I am just asking you, personally.
A: No, I don't know.
Q: Now, over at 57 Grand River—is that the old number?
A: Yes.
Q: The following property was there in—as late as January, 1920, I believe: 2 desks 1 typewriter 1 Burroughs adding machine 1 cash register All of Mr. Lodge's books. Now, did you take into your possession those two desks?
A: I let the company have some money, and the two desks were sold to me in consideration of that.
Q: Does the record show that?
A: Yes. My bookkeeper had a memorandum at the time.
Q: Did that show the purchase from you of the typewriter?
A: The typewriter and some of the other items that you mentioned were sold to B. A. Bruce [Bertha Bruce], to cover money loaned; actual cash loaned the company.
Q: Burroughs adding machine?
A: Yeas, to B. A. Bruce.
Q: And the cash register was also sold?
A: Yes, the chairs and cash register.
Q: Piano?
A: Yes, piano.
Q: $142 worth of chairs?
A: Whatever the item was.
Q: They were all sold to B. A. Bruce?
A: Yes.
Q: What did she pay for them?
A: Well, I think it was the amount of money—how much would it aggregate?
Q: Well, but they were all sold to her?
A: Yes.
Q: They were never in her possession and are not in her possession, nor were they before, were they?
A: Yes, they are—
Q: They have always been in your possession?
A: B. A. Bruce is my wife.
Q: Well, but have they been in your possession?
A: Well, they have been in the possession of the family, naturally.
Q: Well, but they have been in your possession right under your hand? She does not use these desks, does she?
A: Yes, she helps me in my affairs, naturally. I cannot afford to have a bookkeeper.
Q: When did you discontinue your bookkeeper?
A: Well, when the Central States Finance Company took over my income, I had to dispose of my bookkeeper.
Q: Well, these desks, typewriter, adding machine, chairs, piano and rugs are in the possession of B. A. Bruce now in the Ryerson Building? Is that true?
A: Yes, sir. Unless they are sold.
Q: To whom?
A: To me.
Q: What did you pay B. A. Bruce for them?
A: Actual cash and back bonuses. . . . and a lot of torment besides, because when you borrow money from a woman, you have got to pay it back, and it is her money.
Q: Were Lodge's books in your possession?
A: They are intact, nailed up, ready to be delivered to him.
Q: You would be willing to deliver them to the trustee?
A: Doctor Hill and myself were held personally responsible for the safety of those books under a separate agreement.
Q: I admit this is true, from the examination of the contract between Lodge, Ryerson and Hill. The corporation has no right to the possession of those books.
[ . . . ]
Mr. Morden: That is all.
Continued to Monday, December 5th [December 8th], at 9:30 a.m. for further examination.
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