Evening star., 1933-03-03
SENATE PR0bERS
RECESS STOCK QUIZ
Profits of National City Co.
in Financing Mergers and
Bond Issues Described.
BY the Associated Press.

| By the Associated Press.
Profits made by the National City Co.,
subsidiary Of the National City Bank
in financing mergers and bond issues
in the boom days were described to the
Senate Banking Committee yesterday by
vice presidents and former vice presi-
dents of that concern.
At the close Of yesterdays meeting
the committee recessed its investigation
until the next session of Congress.
There was testimony that the present
market price of a s32,o00,OoO bond is
sue of the Lautaro Nitrate Corporation,
whose parent company is in Chile. is
less than the difference between the
s9375 at which the bonds were received
and the $99 at which they were sold to
the investing public.
Merger Investigated.
Ferdinand Pecora, committee council,
fingered longest yesterday on the cir
cumstances which led to the merger of
three farm implement firms in 1929.
They were the Nichols & Shepard Co.
Of Battle Greek, Mich: the Oliver Chilled
Plow Works of South Bend, Ind, and
the Hart-Parr Co. Of Charles City. Iowa
Out of this consolidation came the
Oliver Farm Equipment Co.
Stanley A. Russell was the vice preSi-
dent who related how this happened,
and he said that Mason B. Starring, jr.,
a director Of the Nichols concern, aided
in beginning the negotiations and that
Starring received q substantial share
Of the profits.
The testimony also showed Samuel
White was director of one of the
| firms and that the company which
White headed, the National Republic
| in profits. The City Co.'S part in
these was about $1,288, 900.
Russell said the City Co. got a, 900
shares of the Farm Equipment Co. s
common stock and put a value Of $40
share on it. Shortly afterward the
stock went on sale on the New York
Curb Exchange at more than four
| times that figure. 1t was testified.
Nitrate Issue Examined.
Participation Of the company in an
issue of Iautaro nitrate bonds, also
f1oated In 1929, was scrutinized.
j. P. Morgan & Co. and Guggenheim
Bros. participated In this financing, al
though the latter turned their 10 per
cent interest over to Lehman Bros,
the firm Of which the present New
York Governor was q member until
1928.
Morgan had q Is per cent interest,
but the concern failed to share in an
additional bonus of $4,000 shares of
Lautaro common stock which the City
Co. received.
There Is nothing to show you told
Morgan about this stock bonus?" julius
Silver, who was conducting the hearing,
told Ronald M. Byrnes, former COM
pany vice president, who was on the
stand.
Not in writing apparently" Byrnes
replied.
He was unable to testify, he said,
whether the Morgan firm knew of it.
The City Co. made about 81 ,000, 900 on
that transaction and Morgan around
$4,000.
Joseph v. Ripley, company vice pres
ident, told of assisting in the consoli-
dation of the Boeing Airplane Co., the
Boeing Air Transport, Inc, and the
Pacific Air Transport into the Boeing
Airplane & Transport Corporation in
the Fall Of 1928.
The company shared in this deal
with the Pacific National Co. of Seattle
and it profited by $244,366, in addition
to 16,200 shares of common in Boeing
Airplane & Transport.