Evening star., 1933-02-15

market CloSeu, "JaIuAIy ~, 1898:
Pacora asked.
II don't remember" insult replied
But you were a party to the con-
tract. What impelled the company to
make that agreement with your father?''
None of us knew it was going to
sell at anything like $50 share
Were you snrprised?"
I'VE were"
You thought it was eXcessive?"
Yes, We thought it was high. My
guess was it would go to about 500 a
share in few months"
When the contract was being ne
gotiated insult said somebody told his
father he was q darn fooF' not to take
all the stock himself.
Brookhart wanted to know If the
stock was worth $149.
1T don't know" insult said.
you did nothing to warn the pub
lic?" Brookhart asked.
insult said his father had had a
peculiar experience in 1925 when he is
sued statement saying some un-
named stock was too high.
Paid No Dividends. E
Gossip started that my father was
short" he laughed, "and the stock i'm
mediately went up."
He explained when the stock sold
for 149 it did not pay any dividends,
but subsequently paid 6 per cent divi-
dend in stock.
. "The market opened at 9 o'clock,
January IT, 1929,"' Pecora said. Some
time that day the company made a
written agreement with your father to
sell him 250,000 shares at $12. Was
that entered into before the opening
or later, while the market was in
progress?"
insult said he did not remember and
insisted also that he could not recall
where the contract was signed.
Who proposed the agreement"
"I don't know. 1t was in the draft
circular of the company in December
and January" insult said.
The only discussion remember was
that father said he should be bound to
buy It; whether it went up or down."
"You don't believe It was signed be-
fore the market opened?"
II don't know. All know is it was
verbally agreed to by all concerned sew
eral days before"
Father Didn't Control.
insult said most of the directors of
the investment trust were officers of
insult company,
Companies your father controlled?"
Pecora said. ~.
NO" insult replied. 'He didn't cont
troll them" 4-.sA @xS
Didn't he refer to his control9" Z
No, sir" E
Pecora asked if any of the directors
had any real financial interest in the
company at the time they voted the
agreement.
IT don't know" insult replied.
Didn't 1t resolve itself into your fa-
ther, your uncle and yourself entering
these rights at SIS and the shares at
s12?"
mo" insult said, 'the obligation of
the directors to see that the Transaction
was proper was not increased or de-
creased by the financial interest"
"You don't remember anything being
said about benefits to the company"
mo, but that doesn't mean that it
wasn't. That was a long time ago, and
a lot has passed since"
Senator Blaine, Republican of Wis
consin, asked why Judge Cook had re-
ceived large blocks of stock at the $l2
price, suggesting that Cook, as a mem
Der OF the State Supreme Court, had
rendered an opinion costing Chicagoans
Sl0.0O0,000 in over r-charges by the Peo-
ple's Gas Co., an insult concern.
insult said he did not remember the
case, except vaguely.
Went Down With Ship.
do you recall that Cook became
counsel for the Peoples Gas Co. shortly
after he resigned from the bench?"
Blaine asked.
mo" insult replied. "All know is
that he was counsel when became as
sociated with the company in 1928"
insult testified he obtained an option
when the investment trust was formed
to buy 29.600 common shares at SIS
within two years.
He exercised the option, he said, in
December, 1929, when the market price
was about S65.
it to the Corporation Securities Co.,
for about $40," insult added.
You bought it when it was worth
$l,SS6,o00 for less than 25 per cent of
that?" Pecora said.
Yes" insult replied, "but I turned
some of it over to an affiliated COM
pany for $40 a share and still hold
most of the rest.
I've held this stock and today I'm
busted. Granted it was worth S65, but
you can't cut off the transaction at any
one point. I went down with the ship
But you could have sold it at any
time"
Legally, but as a director I felt
morally bound not to sell it,
insult said he had lost $4,000 in
hard cash" on securities he gave up
Tor the rights to the stock
The committee recessed until 10 am.
tomorrow, when insult will continue and
Young probably will be heard also.