2168. Swartzell, Rheem & Hensey (Washington, DC)

Bank Information

Episode Type: Suspension → Closure
Bank Type: private
Start Date: January 27, 1931
Location: Washington, District of Columbia (38.895, -77.036)

Metadata

Model: gpt-5-mini
Short Digest: dea54f5e

Response Measures

None

Description

Swartzell, Rheem & Hensey was a mortgage banking house (not a depositor commercial bank). It filed a voluntary petition in bankruptcy and receivers were appointed (late Jan 1931). There is no mention of a depositor run or suspension of a bank paying deposits — the firm went into receivership/voluntary bankruptcy and remains in receivership/closed. I corrected no names/dates beyond interpreting yesterday in article dated Jan 28, 1931 as Jan 27, 1931. Included an other event for the arrest of Edmund D. Rheem (embezzlement charge).

Events (5)

1. January 27, 1931 Receivership

Newspaper Excerpt: receivers were appointed yesterday. The receivers, Julius I. Peyser and Henry P. Blair, went to the company's office on Fifteenth street yesterday and took possession of its books and records.
Source: newspapers

2. January 30, 1931 Other

Newspaper Excerpt: Three receivers for the new Shoreham Hotel, which consented to a receivership petition brought by creditors, were appointed today. The hostelry was originally financed by Swartzell, Rheem & Hensey, bankrupt mortgage banking house.
Source: newspapers

3. January 31, 1931 Other

Newspaper Excerpt: The receivers ... announced today they had discovered that mortgages had been released on four large properties financed through the mortgage banking concern. ... The receivers also announced they had taken over operation of the Hay-Adams House.
Source: newspapers

4. February 4, 1931 Other

Newspaper Excerpt: Edmund D. Rheem, vice president of Swartzell, Rheem & Hensey, was arrested yesterday on a warrant charging him with embezzling $162,000.
Source: newspapers

5. February 26, 1931 Other

Newspaper Excerpt: A bankruptcy schedule listing assets in excess of liabilities was filed today by Swartzell, Rheem & Hensey, mortgage banking house, now in the hands of receivers.
Source: newspapers

Newspaper Articles (9)

1. January 28, 1931 Evening Star Washington, DC

Article from Evening Star, January 28, 1931

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AUDIT OF BANKRUPT FIRM UNDERTAKEN Department of Justice Men Scan Books of Swartzell, Rheem & Hensey. The Department of Justice today began its audit of the books of Swartzell, Rheem & Hensey, mortgage banking house, for which receivers were appointed yesterday. The investigation is being made under instructions from United States Attorney Leo A. Rover, who announced yesterday he had received "reliable information of the possibility of a violation of law growing out of the conduct of the affairs of the company." It was also learned today that special agents of the Bureau of Investigation, Department of Justice, will be assigned to the case as soon as the audit is completed. It is expected this will require several days. The receivers, Julius I. Peyser and Henry P. Blair, went to the company's office on Fifteenth street yesterday and took possession of its books and records The receivers were appointed by Justice William Hitz after the firm had filed a petition in voluntary bankruptcy. In the petition filed with the court by the company, the volume of its business was fixed at $18,000,000. The details of the investigation are in the hands of Neil Burkinshaw, assistant United States attorney, who assisted in the prosecution of F. H. Smith Co. officials recently. Aside from legal developments in the case of the firm of Swartzell, Rheem & Hensey, one of the first effects of its voluntary petition in bankruptcy was the halting of construction work on the new buildings of the Westchester Apartment development and the New Shoreham Hotel. Builders Await Settlement. The bankrupt mortgage banking firm acted in the original financing on both of these projects, and due to the bankruptcy proceedings the builders of these two projects, both decided to stop construction work pending settlement of the resulting legal tangles, or until some satisfactory arrangements had been made. Gustave Ring, president of the Westchester Development Corporation, announced today that work had been halted on the new building of the huge apartment development along Cathedral avenue between Thirty-ninth street and Glover Parkway. Plans for the resumption of work there, he said, now are under way and construction may be renewed shortly, after certain arrangements have been completed. In this case, it is said, Swartzell, Rheem & Hensey handled the original financing, running to $1,350,000. After this project was under way, it is reported, the property was refinanced by means of a loan from a large national insurance company, by which the first loan was paid off. Harry M. Bralove, builder of the New Shoreham Hotel, large residential hotel project on Calvert street, between Connecticut avenue and Twenty-eighth street, announced that work had been stopped on the new unit of this building. This project was financed through Swartzell, Rheem & Hensey.

2. January 30, 1931 Evening Star Washington, DC

Article from Evening Star, January 30, 1931

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SHOREHAM HOTEL RECEIVERS NAMED Federal Probe of "Possible Criminal Activity" Nears Completion. Three receivers for the new Shoreham Hotel, which consented to a receivership petition brought by creditors, were appointed today by Justice William Hitz in District Supreme Court. The hostelry was originally financed by Swartzell, Rheem & Hensey, bankrupt mortgage banking house, and operated by the Shoreham Hotel Corporation. The receivers named to take over the property are Francis H. Duehey, John E. Laskey and Spencer Gordon. They were required to furnish bond of $25,000 each. Federal Probe Near Completion. Meanwhile, there were indications that the Government's investigation of "possible criminal activities" in connection with the conduct of the affairs of Swartzell, Rheem & Hensey was nearly completed. Nugent Dodds, Assistant Attorney General in charge of the inquiry, said that the findings would not be announced until the investigation is completed, however. Auditors employed by the receivers for the mortgage house, Julius 1 Peyser and Henry P. Blair, were continuing their examination of the company's books under the direction of Wayne Kendrick. It is expected that a thorough audit of the books may require several weeks, and in all probability there will be no official announcement as to the intrinsic value of the various securities sold by the firm until this examination has been completed. Schedule Proving Difficult. The auditors were also encountering considerable difficulty in drawing up a schedule of assests and liabilities of the mortgage house, and it may be several weeks before this is ready for filing. It was pointed out, however, that unless this schedule is filed the company will not receive the benefits which would otherwise accrue to it under the bankruptcy laws. It is understood the examination to date has disclosed assets in excess of $2,000,000. The Government investigation, under the general supervision of Mr. Dodds and Assistant United States Attorney Neil Burkinshaw, is being conducted by Special Agents Louis Loebl, Charles T. Malone, Aaron W. Jacobson and E. J. Armbruster of the Bureau of Investigation, Department of Justice.

3. January 31, 1931 Evening Star Washington, DC

Article from Evening Star, January 31, 1931

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MORTGAGES FOUND RELEASED IN FOUR SWARTZELL® DEALS Noteholders Must Look to Assets of Company to Collect Claims. RECEIVERS TAKE OVER HAY-ADAMS HOUSE Department of Justice Probe of Bankrupt Firm Believed Almost Complete. The receivers who have taken over the affairs of Swartzell, Rheem & Hensey, bankrupt mortgage banking house, announced today they had discovered that mortgages had been released on four large properties financed through the mortgage banking concern. These properties, it was said, are the Shoreham Office Building and the Eroadmoor. Ponce de Leon and Westchester apartment developments. This means that the persons holding mortgage notes under the original mortgages on these projects, which have been released, will have to recover as much as they can of the face value of their securities from the assets of the concern after the schedule of assets and liabilities has been determined by the receivers. Note Holders Not Paid. . The receivers said they had not determined how many holders of notes on these properties were not paid when the mortgages were released. Under the practice of many mortgage banking houses the holders of the mortgage notes are paid when the mortgage is released. Many holders of notes on projects financed through Swartzell, Rheem & Hensey have advised the receivers, however. that they were not paid when the mortgages were released. The receivers also announced they had taken over operation of the HayAdams House, which was financed through Swartzell, Rheem & Hensey. Maj. Julius I. Peyser, one of the receivers, said this action was taken to protect the interest of note holders on this property until the title could be thoroughly examined. He said a representative of the receivers had been placed at the hotal, but that there would be no interference with the operation of the hostelry, which is located at Sixteenth and H streets, and is one of the city's most elaborate hotels. Investigation Continues. Meanwhile Special Agents Charles T Malone and E. J. Armbruster of the Bureau of Investigation, Department of Justice, are continuing their examination of the books of the mortgage banking concern to determine whether there was any violation of law in the manner of conducting its affairs. They are expected to submit a report to Nugent Dodds, Assistant Attorney General, in the near future. Two other special agents, Louis Loebl and Aaron W. Jacobson, are working on the investigation, but the precise nature of their work has not been disclosed. The disclosure that some mortgages had been released without payment to the note holders direct gave rise to a complicated situation in the civil side of the case. Several local construction firms were advanced money by Swartzell, Rheem & Hensey to launch building projects. The builders executed mortgages on the particular property to secure the loan. In some cases, the builders say, they paid off the loan and the mortgage was released. The note holders under the mortgage, however, say they were not paid. May Look to Builder. If these holders are unable to secure full payment from the mortgage banking house after the receivers have determined its assets, they may look to the builder for their money, despite the fact that he has paid the money once. If the courts should hold that Swartzell, Rheem & Hensey was acting as the agent of the builder. and not as the agent of the note purchasers, the builder probably would be held liable to make good the loss of the note holders. In the opinion of local lawyers the determination of this question will hinge largely on the interpretation of the clause in the trust agreements which made the mortgages payable "at the office of Swartzell, Rheem and Hensey.' The builders are expected to claim that they were relieved of all responsibility when and if they complied with this stipulation. It is believed, however, that the point will not be settled except after lengthy and involved civil proceedings. Work on the addition to the new Shoreham Hotel, which voluntarily went into receivership two days ago, was resumed today after a meeting of contract and material men interested in the project last night. It was asserted at the meeting that the present structure is fully occupied and that applications are in hand sufficient to fill more than the second unit. which is 95 per cent completed.

4. February 2, 1931 Evening Star Washington, DC

Article from Evening Star, February 2, 1931

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BOND FIRM PROBE AWAITS REPORT BY U.S. ACCOUNTANTS Assistant Attorney General Dodds Expects to Receive and Study Data Today. MORTGAGES RELEASED ON OTHER PROPERTIES Receivers Recently Appointed for Concern Announce Additional List. The investigation of the affairs of Swartzell, Rheem & Hensey, bankrupt mortgage house. was at a standstill today pending completion of the report from Department of Justice accountants. This written report is expected to reach Assistant Attorney General Nugent Dodds this afternoon. After studying its contents Mr. Dodds and Assistant United States Attorney Neil Burkinshaw will determine their future course of action. Charles T. Malone and E. J. Armbruster, special agents of the Bureau of Investigation, are drawing up the report. It is based upon conclusions reached by them as a result of their examination of the books of the company. These two accountants have had access to the books for only a few days, but are understood to have completed their initial study Saturday. Other Mortgage Releases. Maj. Julius I. Peyser and Henry P. Blair, receivers recently appointed for the mortgage house, announced today they had discovered mortgages had been released on the following additional properties: Twenty-one fifteen Pennsylvania avenue, 2019 I street, 1720 Nineteenth street, 1349 Connecticut avenue, 1416 Irving street, an apartment; Thirteenth and Monroe streets, and lots 5, 6 and 7, square 369. All of these are projects financed originally through Swartzell, Rheem & Hensey. Mr. Peyser also reiterated his suggestion that the holders of mortgage notes on the various properties form Bondholders' Committees for their own protection. Investors Seeking Facts. Another situation, which is causing the receivers considerable trouble, developed today. There are numerous persons who dealt with the mortgage house, it was said, who simply placed their funds there for investment and received in return receipts for the amount. In many cases now they have nothing but this receipt, which bears only their name, the amount and the date, to show for their investment. Being without knowledge as to the property in which their money is invested, they are now making strenuous efforts to ascertain this fact. It was pointed out, however, that only a thorough examination of the books will disclose this information. Asks New Receiver. Edward T. Harding, holder of the second trust on the building occupied by Demonet's, Inc., at .5 Riggs court, which is being operated by Mr. Peyser and Mr. Blair as receivers for the bankrupt mortgage house, this afternoon filed a petition in District Supreme Court for appointment of a substitute receiver to take over the building. The suit named George F. Hunt as owner of record and Randall H. Hagner Co. as agent. Hunt was the rental agent for Swartzell, Rheem & Hensey. The petitioner, through Attorney Edmund D. Campbell of the firm of Douglas, Obear & Douglas, tells the court the trust is in default and that the money being collected in rents is not being applied to the mortgage indebtedness. If Mr. Blair and Mr. Peyser are continued in their present capacity, the petition says, the money due Harding will be mingled with the general assets of Swartzell, Rheem & Hensey instead of being paid to him. The court is asked to restrain the receivers from collecting any more rent on the building.

5. February 4, 1931 Evening Star Washington, DC

Article from Evening Star, February 4, 1931

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Vice President of Mortgage Company Accused of Embezzling $162,000. INVESTIGATORS CONTINUE STUDY OF FIRM'S AFFAIRS Several Days Expected to Be Needed to Prepare Evidence for Inquisitorial Body. Preparations were being made today to present to the grand jury evidence gathered by the Government against Edmund D. Rheem, vice president of Swartzell, Rheem & Hensey, who was arrested yesterday on a warrant charging him with embezzling $162,000. It was expected, however, that investigators for the Départment of Justice and the United States attorney's office will need several days to complete their study of the company's affairs. The warrant for Rheem's arrest was issued after Department of Justice accountants discovered certain facts which they said indicated that Rheem had used mortgage notes left with him for safekeeping to replace other notes being held by a bank as security for an investment made through his firm. Say Notes Substituted. It was said that the bank had invested $162,000 from funds in the estate of Mr. Rheem's father in mortgage notes on a building project financed through Swartzell, Rheem & Hensey. Last month, it was said, officials of the bank learned that this mortgage had been released. It was understood the notes held by the bank had not been paid, and that officials of the institution went to see Mr. Rheem about the matter. He is then said to have substituted as security notes of unquestionable value which had been left with Swartzell, Rheem & Hensey for safe keeping by purchasers. Rheem and his co-trustee, J. Newton Brewer, today formally resigned their trusteeship under a deed of trust for $75,000 on the Windemere Apartments, 1825 New Hampshire avenue, when Avoub M. Rizik, 1213 F street, filed a petition in District Supreme Court declaring they were "unfit to continue as trustees.' Through Attorneys H. Winship Wheatley and H. Winship Wheatley, jr., Mr. Rizik also obtained a rule on the receivers for Swartzell, Rheem & Hensey to show cause why they should not return to him notes aggregating $25,000 secured on the New Haven Apartments at 412 Third street, which had been left by Mr. Rizik at the office of the bankrupt firm for collection. Justice Jesse C. Atkins signed an order requiring the receivers to furnish Frank Tomlinson, a builder, information as to who holds his notes. Tomlinson, in a petition filed Monday through Attorney Edmund D. Campbell, explained that he had borrowed $200,000 from the bankrupt firm and had given a second deed of trust on certain property, making 370 mortgage notes, which he believed the firm had disposed of to various persons. He said he had received only approximately $75,000 from the firm and that the rest was still due him. Bond Fixed at $25,000. Rheem was released under $25,000 bond after the warrant had been served on him in the office of United States Commissioner Needham C. Turnage. The young financier who directed the affairs of Swartzell, Rheem & Hensey told reporters after his arrest that he was anxious to do all in his power to aid investigators in straightening out the affairs of his company. "I lost every dollar I had trying to keep the company going," he said, "but I am anxious to do anything I can to help." The warrant was issued at the request of Assistant Attorney General Nugent Dodds, United States Attorney Leo A. Rover and Neil Burkinshaw, one of Mr. Rover's assistants. It was sworn to by Louis Loebl and Aaron W. Jacobson, special agents of the Bureau of Investigation, who were among the agents assigned to the investigation by Director J. Edgar Hoover. Notified by Telephone. One of the most difficult phases of the investigation-the audit of the bankrupt company's books-was handled by Agents Charles T. Malone and E. J. Armbruster, the bureau's expert accountants. After the warrant had been prepared, Mr. Rheem was notified by telephone and he came to Commissioner (Continued on Page 2, Column 3.)

6. February 6, 1931 Evening Star Washington, DC

Article from Evening Star, February 6, 1931

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LITIGATION PENDS IN BANKRUPT CASE 13 More Persons File Suits Against Swartzell, Rheem & Hensey. Although there were no developments today in the investigation of the bankrupt Swartzell, Rheem & Hensey mortgage firm, attorneys interested in the civil aspects of the case were preparing to take the first concerted action against the defunct house. More than 20 lawyers, representing clients interested in the concern, met yesterday in the Fendall Building and decided to devote themselves to simplifying the mass of civil litigation precipitated when the institution failed. Thirteen More Persons Sue. A committee of three, consisting of Arthur C. Keefer, C. C. James and C. T. Clayton, was appointed to devise means of guarding against the filing to duplicate suits and to act. in concert wherever possible. All attorneys representing clients affected by the bankruptcy are invited to join. Thirteen more persons filed suits yesterday for the return of notes left with the mortgage firm for safekeeping. They were ordered to present their cases February 10. The receivers, Julius I. Peyser and Henry P. Blair, said the schedule of assets and liabilities probably would be completed in a week. They also announced that mortgages had not been released on the properties at 1457 Park road and 3620 Sixteenth street. Filings Are Postponed. A group of attorneys representing clients of the mortgage house met today with Michael M. Doyle, attorney for the receivers, and agreed to withhold the filing of any more applications for rules until next Thursday, when Justice Jesse C. Adkins will pass- on all of them. A suit asking that the receivers be required to furnish a list of the noteholders on an apartment project at Connecticut avenue and Brandywine street was filed today by David L. Stern, builder, through Attorney Alvin L. Neumyer. The aggregate of the notes outstanding is $450,000, he says. The court is told that on August 16, last, the builder gave a mortgage for the entire amount, but has received only a part.

7. February 8, 1931 Evening Star Washington, DC

Article from Evening Star, February 8, 1931

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RHEEM CASE DATA SHAPED FOR JURY AS FACTS DEVELOP Early Presentation Forecast After Burkinshaw and Dodds Confer. WESTCHESTER FIRM ASKS FOR PAID NOTES $1,350,000 Papers Uncanceled and Kept, Court Is Told-$25,000 Deal Aired. Early presentation to the grand jury of the Government's case against Edmund D. Rheem, vice president of the bankrupt mortgage firm of Swartzell, Rheem & Hensey, and who is charged with embezzlement, appeared probable last night following a lengthy conference yesterday between Assistant Attorney General Nugent Dodds and Neil Burkinshaw, assistant United States attorney assigned to the prosecution. The Federal prosecutors were known to have made considerable progress in preparing the evidence to be put before the grand jury in connection with the collapse of the widely known investment house. The evidence has been collected by special agents of the Bureau of Investigation, operating under the supervision of J. Edgar Hoover, director of the bureau. Assistant Attorney General Dodds has taken personal charge of the sensational case. Firm Asks "Paid" Notes. Rheem is at liberty under bond of $25,000, following his arrest last week on a warrant charging him with embezzling $162,000 in mortgage notes left with him for safekeeping. The Federal investigation is said to have uncovered many facts not yet divulged publicly, but deemed of great importance to the grand jury inquiry. While the Government attorneys were getting their case into shape yesterday, a new development in the tangle of civil litigation growing out of the firm's crash was presented to the District Supreme Court. The Westchester Development Corporation asked the court to prevent receivers of the bankrupt company from surrendering any notes of the corporation which may be found among the assets of the defunct company and to require the receivers to turn over all such notes to the Westchester Corporation. "Straw Man" Named. Through Attorneys W. Gwynn Gardiner and Howard Boyd, the Westchester Corporation advised the court that in February, 1930, it borrowed from the investment concern $690,000 and sometime later an additional sum of $660,000, giving as security a number of notes payable to John H. Holmead, designated as a "straw man." Both deeds of trust provided that payment at the offices of Swartzell, Rheem & Hensey would suffice to release the trusts. The corporation told the court that, relying on this provision, it obtained new loans, and, through a legal title company, paid at the Swartzell Co.'s office in November a sum sufficient to pay the notes, and that the deeds of trust were released, as recorded November 21. The notes should have been marked "paid and cancelled" at this time, the court was told. No notice was given the maker of the notes, it was stated, that any transfer or sale of any of them to other persons had been made, and if any were sold, the maker was not advised of it. The court was informed that application has been made now to the receivers by persons claiming to hold some of the released notes. Unless the court intervenes, it was stated, the notes may be surrendered and the interests of the Westchester Corporation will be adversely affected. "First" Trust Was Second. The petition asked the court to require the receivers to disclose where the money is that was paid over in November and to disclose the names of persons now holding the notes, and the court is requested to have the receivers surrender the notes to the Westchester Corporation. Another legal angle yesterday was a petition to the District Supreme Court by A. M. Rizik of 1213 F street asking that foreclosure be ordered of a deed of trust for $25,000 on the New Haven Apartments, for which amount he owns a note deposited for collection with the Swartzell, Rheem & Hensey Co. He says the receipt given for the note describes the trust as a first mortgage. He claims that a prior deed of trust has been discovered. He asks that the property be sold, since his trust has matured and has not been paid. Attorneys H. Winship Wheatley and H. Winship Wheatley, jr., reprethe petitioner sented

8. February 13, 1931 Evening Star Washington, DC

Article from Evening Star, February 13, 1931

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Holder of 1925 Paper Wants Swartzell's and Rheem's Order Vacated. SAYS RELEASE WAS IMPROPERLY MADE Early Mortgage Debts Past Due, but Financiers Held They Were Paid, He Says. Charging that a first mortgage for $1,200,000 on the Carlton Hotel had been improperly released by Edmund D. Rheem and Luther A. Swartzell, officers of the bankrupt firm of Swartzell, Rheem & Hensey, one of the noteholders today asked the District Supreme Court to appoint a receiver to take over the property and conduct the business. The court is also asked to vacate the release executed by Swartzell and Rheem and recorded on October 3, 1928. The petitioner, George M. Hamilton of Pittsburgh, Pa., charges through Attorney Joseph A. Rafferty that the release was improperly executed and recorded and that the group of bankers involved in the financing were "on notice" that the instrument did not recite the truth in the statement that the indebtedness had been fully paid. The court is asked to re-establish the original deed of trust. Notes Due Not "Released." Hamilton says he owns five notes totaling $2,500 of the issue of notes under the original deed of trust, recorded March 30, 1925, and which was "attempted to be released" October 3, 1928. The notes have matured, he says, and no interest has been paid since September, 1930. Named as defendants are the Wardman Real Estate Properties, Inc.; Swartzell & Rheem, trustees; the Central Hanover Bank & Trust Co., and Frank Wolfe, both of New York, trustees under an authorized bond issue of $16,000,000 placed on a number of properties recently, including the Carlton Hotel. Hamilton says the conduct of the bankers financing the large bond issue and their agents constituted "malfides," and if the money to pay the $1,200,000 first mortgage then on the property was provided by them they were bound to see to its proper application and failure to do so was "negligence of such a character as to negative any right they might otherwise be entitled by law to enjoy under the deed of trust securing their bond issue, which now appears as a first lien on the property." "Protective" Body Formed. Formation of the first "Protective" Bondholders' Committee following the collapse of Swartzell, Rheem & Hensey was announced today. This committee was formed for the benefit of the mortgage note holders on an unfinished apartment in the 1400 block of N street, built by Frank Tomlinson and financed through Swartzell, Rheem & Hensey. In a suit recently filed by Tomlinson against the noteholders it was alleged that, although mortgage notes totaling $200,000 were sold, the builder has received less than $100,000 from the mortgage concern. The committee is composed of attorneys representing the noteholders, with Paul E. Lesh as chairman. Petition Rules Postponed. Referee in Bankruptcy Fred J. Eden yesterday arranged with United States Marshal E. C. Snyder for a room in the District Supreme Court house, to be used for the first meeting of the creditors of the bankrupt mortgage concern. A date for this meeting has not been set. Justice Jesse C. Adkins yesterday continued until March 5 all rules pending on petitions of noteholders and others for the return of securities found among the papers of the bankrupt corporation. Attorney Michael M. Doyle, representing the receivers, answered questions yesterday at the hearing, which was attended by about 60 lawyers. Some sought to have the receivers permit examination of the records, but Attorney Doyle insisted that to do this would retard the work of the receivers and would interfere with the presentation to the court by February 25 of a report of the assets and liabilities of the bankrupt. He offered to aid as far as possible in giving information to lawyers who would write to the receivers, but would have to insist that the receivers make all examinations.

9. February 26, 1931 Evening Star Washington, DC

Article from Evening Star, February 26, 1931

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Counsel for Mortgage Firm Files Schedule in District Supreme Court. SAY LOSS TO CREDITORS LESS THAN ANTICIPATED Assert Local Banks Hold Unsecured Claims Only to Extent of $56,000. A bankruptcy schedule listing assets in excess of liabilities was filed today by Swartzell, Rheem & Hensey, mortgage banking house, now in the hands of receivers. If figures as set forth in the schedules are not changed by subsequent development, it was pointed out, the possible loss to creditors may be much smaller than was at first anticipated. It was believed, however, that it will be some time before a final reckoning can be made. Total liabilities were placed at $6,329,795.40 and total assets fixed at $6,503,253.77, leaving a safety margin of $173,458.37. The schedules, filed in District Supreme Court by Attorneys Tobriner and Graham, counsel for the bankrupt, cover approximately 100 pages. They are accompanied by an explanatory statement that an audit of the company's books could not be made as they are in the hands of accountants for the receivers and representatives of the Department of Justice. Liability Schedule Divided. The schedule of liabilities is divided into priority claims for taxes amounting to $17,444.81, secured claims amounting to $1,238,915.77, and unsecured claims aggregating $5,073,434.86. It was pointed out that the unsecured claims include all released deeds of trust and that local banks appear as unsecured creditors only to the extent of $56,000. All other bank loans, it was said, are amply secured by collateral of a face value more than double the amount of the loans. According to the statement, the unsecured creditors number approximately 1,600. The assets are said to consist of equities in various parcels of real estate, estimated to be worth $1,880,573.92. Included are such properties as the company's handsome office building on Fifteenth street, the Securities Building and the Hurley-Wright Building, both at Nineteenth street and Pennsylvania avenue, and valuable unimproved property. $4,278,791.49 in Realty Notes. Real estate notes owned by the company are scheduled as of the face value of $4,278,791.49, some of which are pledged to secure loans and others being in the vaults of the concern. The schedule of assets also lists debts due the company on open account amounting to $301,026.39, surrender value of life insurance policy of $12,383, and money on deposit in several local banks amounting to $30,478.97. The unimproved property owned by the company includes a tract of land on Massachusetts avenue near Nebraska avenue, containing about 48 acres; corner of Connecticut avenue and Appleton street, containing about 27,912 square feet; several parcels of land in Silver Spring, Md., and unimproved land known as the Huntington Terrace tract. The company reserves the right to file amended schedules, if necessary. when the report of the receivers' accountants is filed. Rheem Gives Information. The statement accompanying the schedules informs the court that much of the information used in their preparation was obtained from Edmund D. Rheem, vice president of the company, and the receivers. Rheem recently was arrested on a warrant charging him with embezzling $162,000 of the company's funds. The schedules list the names of all persons having unsecured claims against the company. One of them is Luther A. Swartzell, president of the company, who holds such a claim in the sum of $15,000. Another is Mrs. Carolyn M. Wilkins of the Shoreham Hotel, who has an unsecured claim of $1,500. Trusts on Office Buildings. The schedules also disclose that there is a first trust on the company's office building of $98,000. The Securities Building is subject to a first trust of $300,000 and a second trust of $100,000. The first trust on the Hurley Wright Building is $260,000 and the second is $90,000. In the report of debts due on open accounts the schedule lists one to E. D. Rheem and F. P. Morse for $1,220.75; one to E. D. Rheem, special, for $64,219.19; one to E. D. Rheem, trustee, Mintwood place, $13,414.63, and one to E. D. Rheem, Second and D streets, for $34,228.33.