The Washington times., 1929-05-02
MELLON TRADE.
AFFILIATIONS
UNDER QUIZ
By w. X. HUTCHINSON
International News Service

A searching investigation into the
participation OF Andrew W. Mellon
in the merger of the Aluminium
Company of America with the Can.
adian Development Company four
years ago probably will be under.
taken by the Senate judiciary Com.
mittee before rendering a verdict on
his eligibility to serve as Secretary
Of the Treasury, it was learned to.
day.
The committee already has pos.
session Of q deposition, made by
Mellon last July I'm a lawsuit grow.
Ing out OF the merger, which has
thrown q new light on his conhec.
ton with the Aluminium Company.
In his deposition, Mellon admitted
he was q factor" in the affairs of
the company and that he was con.
suited on questions regarding the
policy" of the company. 1t showed
he participated in the negotiations,
resulting in the merger, and that
the final terms were not agreed to,
until after they had his approval.
The committee meanwhile re.
sumed It's deliberations behind
locked doors.
beHeVe IL AHekAl
A copy Of the Mellon deposition,
obtained by International News
Service. revealed how Mellon in his
own words had told OF his connec.
tions and activities with the Alumi-
mum Company. II was this con-
nection which led to the present
inquiry, In which q Democratic-In.
surgent coalition contends that Mel
lon holds office az Secretary of the
Treasury in defiance Of law. Ulti.
mately the Senate will have to de-
eide whether Mellon IL violating the
old law. forbidding q Treasury Sec.
retary from being interested or
concerned in the carrying on Of
business in trade or commerce"
In his deposition, taken in a suit
brought by George d. Haskell, a
Springfield, Mass. business man
against the Aluminium Company, Mel.
lon said he had been "interested" in
the concern almost since the In
ception OF the corporation"
Owns Is Per Cent
Mellon testified he owned about
Is per cent of the stock Of the
aluminium company and that his
brother, r. B. Mellon. lowned a
similar share.
The deposition showed that
Arthur v. Davis, q Mellon subordi-
nate, and president of the company,
arranged a dinner at Melons home
here between the Secretary, James
B. Duke, late financier, and George
G. Allen, q Duke subordinate. At
the conference the deposition
showed. Duke sought to interest
Mellon In acquiring the Canadian
concern, which owned q number
OF waterpower sites.
II knew that Mr.. Davis had
been negotiating with Mr.. Duke
at the time OF this dinner" said
Mellon. "It was on account of
Mr.. Dukes interests in Canada, the
water power interests and as
up with the Aluminium Company
and negotiate an aliia nee there 50
that he would have q market for
his water power"
A telegram was inserted in the
deposition showing Mellon had in
vited Duke to the dinner. held here
January 1S. 1925-while Mellon was
ending his first term as Secretary
Of the Treasury.
Can you tell us what was said
by the different people during that
(dinneD interview" Mellon was
asked. 70.
THE conversation was princl.
pally, almost wholly, on the part Of
Mr.. Duke with me" said Mellon
Il do not recall excepting that Mr.
Davis might join in on something
casual. but the conversation was
chiefly between MIR. Duke and
myself"
At another point, asked whether
he had consulted with his brother
about the proposed merger, Mellon
said "Yes, on this question Of
making the reappraisement Of the
aluminium company and making an
exchange with Duke"
The record further disclosed that
on April Z, 1925, Davis wired Allen:
Mr.. A. w. Mellon and Mr.. r. B..
Mellon very much prefer the prior
preference and straight preference
plan that outlined to you yester.
day, as they think it is a much
better set-up for the future COM
pany and equally satisfactory, II
not a little more so, to the stock.
holders than the original plan"
The deal was ultimately nego-
tiated under an arrangement by
which the aluminium company kept
eight-ninths Of the new stock, while
the Duke interests were given one
ninth of the new stock.
In the deposition, he first said he
had signed the merger agreement
but later discovered, to his own
surprise, that he had not signed it,
1t was, shown that only directors
Of the aluminium company had
signed 1t, and that the Secretary
was not q director at that time.
All this testimony by Mellon was
put In the record at the Judiciary
Committees secret hearings. 1t
will form the backbone of the ca Sc
against Mellon when the issue
finally is fought out on the floor
of the Senate.