Evening star., 1933-02-16
insult, ,.JR., QU|zzED
ON PROFIT REPORT.
Admits Company Advertised
Earnings, While Reporting
Loss to U. S.
Continued From First Page.)

Continued From First Page)
Halsey. Stuart g. Co.. which fioatec
insult securities, and Paul Fl. Davis
president OF the Chicago Stock Ex-
change
Many noted bankers, including Henry
M Robinson Of Los Angeles, a frienc
OF President Hoover, were in the audi
ence. Robinson said he had just come
to listen.
As the hearing opened, Ferdinand
Pecora, committee counsel, gave out a
statement that securities totaling s237,-
100000 had been sold to the public
through the two insult investment
trusts now being investigated
The trusts are the insult Utility In
vestments, Inc, and the Corporation
Securities Co. of Chicago.
Senator Couzens, Republican, oi
Michigan, announced the Steering
Committee had agreed that George w
Dawson, chairman of the Central Han
over Bank g. Trust Co. Of New York
would not be called this week
THE Michigan and Detroit banking
situation Is such that Davison's pres
ence was desired in Detroit today tC
assist bankers there in working out a
Companies Exceed 100.
Pecora questioned young insult as tc
the number Of corporations embraced
in the insult group of utilities
81 have no estimate" insult said.
do they exceed 1902" asked Pecora
"Yes," insult replied.
"Of how many of them were you ar
off1cer?"
"There were seven groups and was
an officer In all seven and an officer
or director In so of the companies In
the groups"
He said the seven groups were en-
gagged In gas, electric and Transportation
and investment businesses and had
many afiliates in other lines.
insult would not estimate how many
Of them we're operating or holding COM
panies, but said there were at least
three investment companies.
Confined to State Lines.
Senator Fletcher, Democrat, OF Florida
asked why there were so many different
companies
insult replied 1t was done to make
corporate limits coincide with regula jory
limits, for credit reasons, and because
some of the enterprises were OF . Local
nature, while the others were not.
He said the corporations were largely
confined to State lines.
Senator Couzens asked II the purpose
Of the set up of holding companies over
the subsidiaries was not to keep without
the Jurisdiction Of the States"
the Nation by the inability Of local
kp 81, AnNaF1HQn
Telephone and Telegraph Co., Couzens
said.
'It's undoubtedly the collateral ef-
feet and may have been In some cases
the reason for the formation OF the
companies" insult replied.
Salary Reached $113.000.
Pecora asked insult from how many
companies he drew q salary.
II might miss some Of them, Insul
replied. MY aggregate salary IN 1890
was 100000 It reached peak OF
$113,000 in 1891, and my present salary
is $4,000 year"
do you get it?" asked Senator Wat
son, Republican, of Indiana, annie
laughter.
Il get q look at it, Senator" insult
said.
Pecora asked If the insult Utility In
vestments, Inc, and Corporation Sc
curities Co. and the insult Investment
Trust were not formed to enable your
father and his group to control the
operating companies?"
Yes" insult replied.
insult said the Corporation Securi'
ties Co. was organized in October
1929, about 10 months after the othei
investment trust.
Weren't some Of the executive OF.
ficers persons connected with Halsey
Stuart Coz" asked Pecora.
I; Yes" insult replied.
He added under questioning thai
Walter Brewster, a Chicago broker, wa:
a director of both trusts.
Wasn't there a considerable eX-
change of securities between these two
trusts during 1929, 1880 and 1892
asked Pecors.
4 recall one in particular" Insul
replied.
Were they not very frequent?"
Il don't want to quible, very fire.
quent Is very indefinite. ] don't recall
any up to the end of 1890. I recall
one after that and several in 1881 bu
no others"
DeMcS DOOHunS StOcks.
Senator Brookhart, Republican. o
Iowa, asked if the purpose of the ex
changes between the investment trust
was not to boom the insult stocks.
mo, not for that purpose" Insul
replied. Il don't recall any mark-ul
in the exchanges. though there ma!
have been some"
Pecora began questioning insult abou
the income tax returns of the Insul
investment trusts.
do you remember whether the re
turns showed profit or loss?"
NO"
do you recall whether they paid ;
tax?"
insult consulted records. Showing
provision" was made in 1929 for $2l3, As
income tax return by the corporation
securities company; $56,746 for 1890
and S27,456 for 1881.
Pecora showed insult published re
port by the companies for 1881.
insult said the certified auditors state
ment in the report showed $2,569,87
net earnings.
Pecora then handed him photosta
copies of the tax returns for that yeal
showing a $3,463,0 900 loss.
How do you explain the discrep
ancies?" Senator Brcokhart asked.
Can't Explain Difference.