Evening star., 1933-02-18
STOCKS QUIZ TURNS
TO BANKS AFFAIRS.
Inquiry Into National City
Companies Due After
insult Sensations.
By the Associated Press.

BY the Associated Press. %
The Senate Banking Committee today
turned from the insult Utilities crash
and made plans to wind up its stock
market investigation, with an inquiry
into the National City Bank Of New
York and its affiliate, the National
City Co.
Amazed by the ramifications Of the
insult operations, committee members
also studied suggestions for legislation
to prevent a repetition of that failure,
which Chairman Norbeck estimated
cost American investors $1,000, 900 600.
The committees authority to inves-
tigate stock market practices expires
March 4, with the end of this session
of Congress. Norbeck then will turn his
Craftsmanship over to Democrat, but
he announced today he intends to press
for measures to protect the American
investing public from the 'rackets'
which he said the inquiry had un-
covered.
Norbeck said he has not determined
what form of legislation he will propose,
but most of the suggestions made to the
committee revolve about the idea OF
giving the public better view of the
internal affairs of the companies in
which they are asked to place their
money.
Mitchell Due on Stand.
Norbeck will not make a decision
until after the committee has taken its
final look behind the scenes of high
finance next Tuesday when the National
City Bank inquiry is held. At that time
with Charles E. Mitchell, chairman, on
the stand, an investigation will be made
into the marketing of the banks stock.
The three-day investigation of the
insult collapse was virtually closed last
night with statement by Norbeck that
it had shown up one of the biggest
racketeering games in the United
States
In an effort to give the committee a
cross-section view of insult financing.
this inquiry was confined to one small
part of the vast structure OF intertwined
companies built up by Samuel insult,
now living in Greece.
All CT the evidence dealt with the
promotion and operation of the two big
insult invectment trusts in which the
public lost about $3.50 ,000, ,000-the In
Sull Utility Investments, Incorporated,
and the Corporation Securities Com
pany of Chicago.
The committee learned yesterday that
promoters of the two companies made
uncounted millions of paper profits in
organizing the two companies and then
gave ficticious support to the market
while they sod securities in them to the
public.
Traylor Is Witness.
One of the final witnesses yesterday
was Melvin A. Traylor, who said the
First National Bank of Chicago, which
he heads, had loaned total of Sl8,-
100000 to insult companies.
Ferdinand Pecora, the committee
counsel, asked if this would have vio-
lated the law against placing more than
Is per cent Of a banks capital and
surplus in loans to a single individual
1T would, if 1t had all gone to one
borrower" Traylor replied, but he de-
nieS this was done, because the loans
were made to different insult corpora
tions.
Traylor said his bank had demand
ed more and more collateral from the
insult companies, and it was pointed
out when the companies went into re-
ceiverShip all of their assets had been
used in this way.
Pecora brought out that the insult
companies had issued millions in bonds
to the public with the promise they
would not contract any indebtedness
beyond so per cent of their assets.