Arizona republican., 1922-06-04
BANKER NEAR
CLASH WITH
kTT0RNEY IN
STEEL PROBE
Untermeyer Warns Banker
He Might Go To Jail For
Refusing To Answer
Questions Of Combine
rRenuhlican A. P. leased Wirel

lRepuDiiCdn n. r LSdScu WlFSl
NEW YORK, June 3.-The sparks
flew again today at the Lockwood
committee investigation of the latest
steel merger, with Samuel Inter
nlyer, committee counsel, swinging
on the anvil and Mortimer L. Schiff,
of Kuhn, Loeb and Company, flaring
in anger at his interrogations. Their
verbal fusillade got so hot at one
time that Untermyer warned the
banker he might go to Jail for refus-
ing to answer questions. Schiff
quickly intimated that if he did,
Untermyer would keep him company
behind the bars.
The discussion centered around the
part Kuhn, Loeb and Company are
to take in merging the Republic,
Midyale and Inland companies into
the North American Steel Corpora
ton. Schiff insisted the relationship
of his firm was purely one OF bank
ing. They were financially Tather-
ing the enterprise, he said, and were
to head the syndicate, underWrlle
S25.00c.000 in preferred stock at S3o
and $44. 100000 in common at S45, ana
then raise another $20,000,000 IN cash
to purchase additional Midvale paper.
JTnterlnyer contended that the
bankers intended to create a mar
ket," for the stock of the new corpo-
ration with this S20,000,000 cash, and
that they were likely to manipulate
prices to favorable levels by Buying
and selling securities.
Hot with resentment, Schiff called
on Chairman Lockwood to make
Untermyer cease asking unfair
questions.
After he had admitted that the
bank might both buy and sell the
stock, the question that set off the
fireworks was put to Mr.. Schlff IN
these words:
$50 that whilst with one hand the
syndicate is selling stock to the pub
lie. with the other hand it is buying
stock from the public"
Schiff said this was not true be-
cause the transactions were not
simultaneous, and when the lawyer
inquired how he knew, he shouted:
ssWe do not wash stock, and / re-
sent that implication
Looking for Facts
"All these resentn cnts, you know,
don't count" Unternyer remarked.
"The facts are what we are looking
for"
"Then put the question in the way
so that they are facts, and don
twist things suggested the banker.
"Mr- Chairman" continued the
banker. "Mr. Untermyer is trying to
nut words in. my mouth that we are
manipulating stock, and l will not
do it. / refuse to answer another
question"
Then came the Jail threat.
"Mr. Untermyer twists words IN
my mouth" said the banker.
mo- cannot get in your mouth.
Untermyer assured him. If could,
I would close it.
In moment they were at it again,
Untermyer insisting that the syndl-
cate was a buying and selling one,
and Schiff agreeing that all syndl-
Gates We're of that nature. but that
purchases and sales We're not mace
at the same time.
'You may have had experience in
that way but l haven't" the banker
said to the lawyer. Il know some
thing in Bethlehem.n
Schiff Demands Retraction
Don't tell me about your expert
ences or mine," Untermyer barked
back. 81 think / know yours and l
do not think you know mine. If you
think you know any of mine, you are
at liberty to state them now from
the witness stand and not dare to
make these contemplate insinua-
tons"
81 resent the word contemplate
Schiff replied.
"They are contemplate because
they are not true" said Untermyer.
Schiff demanded a retraction from
Untermyer on the published state
ment quoting the counsel as saying
the $40 900 was to be used for
trading in the market so that when
the stock reached a high level, the
.'insiders could unload and the out
siders could load up," but Untermyer
merely remarked that the statement
was not in the record of committee
proceedings and let it go at that.
Thomas L. Chadbourne, the lawyer
who promoted the syndicate, refused
to turn over any of the papers to the
committee today. although he was
ordered to do so in a subpoena. 1t
was testified his compensation for
merging the three companies would
be the privilege of buying at $40 a
share $25,500 shares of the common
stock to be offered at $43, while
Kuhn. Loeb and Company would be
privileged to buy $500 shares at SO
and also receive Is per cent commits
sion on the profits from floating the