Evening star., 1932-05-21
S9,251,0DO PROFIT
LAID TO WARMERS
Film Brothers Charged With
Manipulating Own Stock,
at Senate Probe.
Continued From First Page

Senator Glass, Democrat, of Virginia
asked
Warner has been in the moving pic
ture business % years and previously
was in the shoe business
Have you made money!" Senator
Couzens, Republican, of Michigan
asked.
We have"
More than in the manipulation Of
stocks?"
Everything We made we made out
OF the development Of pictures" Warner
said.
Stock Purchases Told.
He testified that he had bought stocks
however.
Couzens said he wanted to know
whether they were more interested ir
the manipulation of stocks than devel-
opment of the company.
Gray said he expected to prove
Warner had profted $9.251 900 in 1896
in buying and selling the stocks of his
own company. He said the selling was
when Journals were boosting the value
OF the stock before the public" and the
buying was when the newspapers began
to depresS the price
Il am going to establish" Gray said
that this man, through undercover
channels and by covering up his trans
actions, sold his stock while certain
journals were boosting the value before
the public"
Warner Bros. was organized in 1925
with 550,OoO shares of common stock.
When the Stanley Co., theater- own.
ing corporation, was acquired about
four years later, Warner said, the stocl
was increased to 100000 shares.
The Stanley Co., he said, 'ownec
about zoo theaters in different parts Of
the country"
AS Gray questioned Warner about the
details OF the organization, the witness
calied his counsel, Samuel Schneider
TO his side at the committee table.
Warner estimated the common stock
warner Brothers had out in January
1880. at 2,500,000 shares, and placed his
holdings then at 303,484. He subse-
quently said this represented the
amount held jointly by himself and his
two brothers, Albert and j. L. Warner.
Transactions for Three.
When you bought and sold any of
this stock you bought and sold it for
all three?" inquired Gray.
correct, said the witness
Does that 100000 shares have re-
lation to that $500 000?" asked Sena-
tor Couzens, Republican of Michigan.
Yes"
80 that you controlled the enterprise
WIN little over 10 per cent of that
stock?" Couzens asked.
Warner responded that "the board of
directors" controlled the company.
The three brothers, he said, were
among the IL directors.
There is no doubt, is there?" asked
Gray, that you and your brothers con-
trolled the operation of it?"
We designated the operation of it,
Warner said.
CouzenS asserted "aS a matter of fact
every one of the directors was selected
by Warner Bros. The Warner brothers
and their friends were in control"
warner said his transactions during
1880 were in behalf of his brothers and
himself.
The trades were made through half
dozen different brokers and were
handled through accounts under the
CharnesS.
why did you deal under those
names?" Gray asked.
schneider replied for Warner, that
We found when We traded in the names
OF Harry or Albert Warner it influenced
Others
Not Deceiving Public.
He added that the purpose was to
prevent brokers and not the public from
knowing what they were doing. Most
OF the trading was done through the
brokerage house of Schatzkin g. Co.
The books showed Warner started
selling Warner Brothers stock in Janu-
ary, 1880, Gray said, and during that
month Warner sold $1,000 shares and
bought 1900. February sales were
placed by Gray at 137,950 with none
bought
Schneider corrected him and said
the February total was 1000.
Warner explained that he wanted to
diversity" his holdings.
so you disposed of more than half
your holdings during the months of
January and February" Gray asked.
'Yes."
Warner said another reason for the
sales was that the company needed
,ash.
Did you loan any of the money you
got from the stock to the company"
asked Gray.
Warner replied that he loaned the
$500,0O0 in May, 1880; S40O,-
BOO in June, $4,000, 900 in July and
b465,000 in August, receiving 10-year
Gray asked why, If Warmers pur-
pose was to get money for the COM
oany, he did not borrow on his stocks
,ather than selling them.
Never Borrowed on Stock.
Warner said he never borrowed on
stocks, asked whom he could have bor-
.owed from and said there was no
.eason for me to obligate myself by
money. He added that OBJ