Evening star., 1932-05-21

tanning money for the company was
only one of his purposes.
Gray and Schneider disagreed over
amounts of the sales. The latter said
the sales in March were 3,400, but Gray
said the records showed they were 49,
TOO.
In April, Gray said, the sales were
1900 and purchases 300. Schneider
said the sales we're 1880 in May, but
Gray said 81 200.
Gray developed that dividends of "a
share were abandoned in the latter
part of 1890, but Warner denied he
knew that action was coming.
do you mean that as an ofhcer OF
the company you did not know the
earnings were falling off?"
Not at first"
Gray then called attention to a state
ment published in the press in August
saying earnings were not enough to
cover dividends.
Business Over World.
Warner said the company's business
is spread all over the world and 1t is
not possible to tell what the company
is making.
LAS president, you knew each day the
general run of the business?" Senator
Townsend, Republican, Of Delaware
asked
"Yes," Warner agreed.
"As a matter of fact, you knew in the
Spring that your business was falling
off?" Gray asked.
yes" Warner replied. and then
caught himself and said, Spring? No;
not until the latter part of the year"
We'll, in the Fall you began to buy
back" Gray said.
Schneider testified that in August
rs, 800 shares had been bought and only
100 sold
In September, he said, 74,300 were
bought and $4,000 sold, and in October
112,900 we're bought.
For November. he added, the pur-
chases were 90, 900 and December $4,000.
Schneider said the total sales for the
year were 231 ,055 shares. from which
S12,850, 900 was realized, while the pur-
chases were $40, 400 shares, costing s6,-
932,158
The total profit, Schneider said. was
$5,918, 1872.
Gray said his figures showed that
during the year Warner sold 305,35O
shares, amounting to approximately
what he owned at the beginning OF the
year. The counsel said his records in
dicated 326, 500 shares had been bought.
Questioned by Gray, Warner agreed
the total profit was little more than
81 900. 900, counting stocks that were
accumulated during the transactions.
Senator Glass said, II am beginning
to feel I'm little obtuse because I
haven't got in my mind what this has
to do with the Stock Exchange"
Norbeck Interprets Figures.
Chairman Norbeck said the figures
showed Warner sold for an average OF E
"a and bought back for an averageN
of IS.
Gray said he would present to the
committee newspaper stories showing
Warner values were being boosted until
August 6. After that date, Gray said,
the publicity suddenly turned unfavor-
able.
Senator Couzens asked Warner 'h
it is ethical for the officers of large
corporation to trade back and forth in
the stock of his own company
"I think it's ethical and helpful,
Warner said He added he had not
bought and sold, but had first sold and
then bought it back later.
Then you think 1t is perfectly ethi-
cal for any officer of a corporation with
inside information to buy and sell the
stock?" Couzens said.
Summing up his case, Gray said rec
ords of Schatzkin alone showed War
ner had sold his stock for $16,520. 900
and bought it back for 1854 900 with
a profit of $8,9re ,504. In addition, he
said. stock had been accumulated worth
s274, $50, making the total profits $9,-
251, asa.
The committee then adjourned and
Chairman Norbeck called the Steering
Committee into executive session.
Gray revealed he was also investi-
eating operations in Fox Film stock.
he Is investigating further Warner oper-
atoms through other brokers, saying
hey might have lost in those operations.
Gray corrected the testimony saying
the average price at which Warner
bought was % and the average salea
price 81.