The Washington times., 1933-10-03
REVEALS
HUGE PROFITS
At PROBE
Investment Trust Conducted
BY Firm Returned 43
Per Cent Profit
BY International News Service

An investment trust conducted
by Dillon Read and Company, a
Wall Street investment house, re-
turned profit of 43 per cent on
it's investments in the last eight
years, Clarence Dillon, head Of
the firm, testified today at the
senate's Wall Street inquiry.
Dillon revealed that the United
States and Foreign Securities Cor
poration had paid $13,000,000 in
dividends since 1924 on an invest
ment of $30,000,000. Of this in
vestment, he added, the public
subscribed $25, 900.
Dillon also revealed the type
of investments made by his part
nership. He said % per cent Of
the firms investments were made
in industrial stocks, 20 per cent
in public utilities, and IA per cent
in European holdings.
Company Held Control
He explained the U. S. and
Foreign Securities Corp. had been
organized in 1924 with $25 900 900
of first preferred stock sold to
the public and $5,00O,O0O second
preferred stock held by the firm.
In addition, the corporation
issued 100000 shares Of COM
mon stock, of which 250,000 went
to the first preferred stockhold-
ers while the firm retained $780,
900 shares.
This gave his company control
of the investment trust.
OF the profits, $11,000,000 went
to the first preferred Stockhold-
ers and 100000 went to Dillon,
Read and Company.
Sold Back to Firm
Dillon told how the corporation
was organized by issuing allot-
ment certificates which entitled
the public holder to one share
of first preferred and one share
of common.
In issuing second preferred
stock, though. each certificate
carried five shares of common
stock. Then, he added 100000
shares of common stock were
sold to j. Perry Olcott, the firms
bookkeeper, for 100000. Olcott
promptly resold the stock to
Dillon, Read and Co.
Ferdinand Pecora's, the Senate's
special attorney, asked:
"OIcott was a mere dummy,
wasn't he?"
"WelI, 1 don't know what you
mean by dummy. Mr.. OlcOtt
was the bOOkkeeper in our Of
flee"
Dillon was the first witness at
the resumed inquiry into practices
on the New York Stock Exchange.
At the outset, Pecora credited
officials of the company with ex-
tending the fullest possible
measure of cooperation and as
sistance" to the committee. He
said he wished to pay a public
tribute to the firm and Chairman
Fletcher CD, of Florida, said:
"The committee is pleased to
hear that"
COMPLAINED OF MORGAN
It was recalled that Pecora
complained last spring against
the attitude of officials in ]. P.
Morgan and Company. He charged
Morgan officials were slow IN fur
nishing desired information.
Dillon first described Dillon,
Read and Company as a joint
stock association. He said he
owned a majority Of the outstand-
ing $4,000 shares which have a
par value of 81 each. He called
his concern an investment Sc
curities house" He denied being
private banker, such as j. P.
Morgan and Company.
Senator Couzens (RO, OF Mlch1-
gan. asked Dillon to explain the
difference between the Morgan
firms business and his own. He
said he was not familiar with the
Morgan business, adding:
"You gentlemen probably are
more familiar with the business
of the Morgan firm than am.
I'm very happy to tell you
(cOntinued on Page 4, col. y