Evening star., 1933-05-31

these companies have remained sub.
stantially unchanged since the Unitet
was formed. We've joined with th'
existing management and watched thu
companies from the point of view o.
substantial stockholders
do these options enable you to con-
troll or coerce the management OF these
companies?" Glass asked.
They have nothing to do with the
United's holdings in these constituent
companies" Whitney said.
If you acquired these warrants, coulc
you acquire an interest enabling you tc
own or control?" Glass asked. m
Certainly not Whitney replied, "it
would not change the percentage OF
stock ownership in the United"
1T has been suggested that inter-
locking directorates would enable you
to control" Glass remarked.
In my Judgment 1t isn't so," Whitney
said. THE United has substantial
but minority interest. The various
members of the United Corporation are
executive heads of these corporations
in which we own interest.
But there is no interlocking director
ate. These companies operate in differ
ent sections of the country. They art
regulated by public commissions in diff
ferent sections of the country"
Not All Morgan Policies.
Costigan said it had been suggested
II per cent of the stock ownership
would enable the holder to direct poll
cies.
"As to what ownership might mean
in executive control, If you wanted to
use it. 1 don't know" Whitney said
There has never been any wish on our
part to control"
Costigan asked If he remembered any
instances where j. P. Morgan e. Cos
advice was disregarded by these utility
companies.
"I think I do" Whitney said. 81
think I could name several. I don't
mean there were any knock-down, drag
out fights. In the final analysis it was
left to the management. 1t hasn't
always been j. P. Morgan g. Co. poll
cies adopted by long shot"
Whitney agreed with Senator Adams
Democrat, of Colorado that with the
present big diversification of stoci
ownership among the general public. 6
consolidated minority of stockholders
often controlled policies
Are any of these executive officer,
who control these various companies
held by United personally indebted tc
your flrm?"
Whitney said he thought not, but
Glass asked him to go down the list
Ito make sure"
List the percentages that United
holds in these companies also" he said
When Whitney reached the United
Gas Improvement Co. of Philadelphia
he asked to be allowed to CHECK"
Then he whispered with those around
him and said that "Mr. Zimmerman
was indebted to our firm"
He promised to obtain the amount
We'll, I'm curious to know how you
could control these companies" Glass
said after Whitney had finished.
II frankly don't know" Whitney
said. Our advice is asked, we sit on
the boards. We try to aid in the
efficient conduct of the business. That
is ALL"
Not Competing Companies.
Are any of these companies in
which United has an interest com
peting companies?" Pecora asked.
NO" Whitney said. II don't think
! So"
Couzens intervened to say that s. z
Mitchell of Electric Bond g. Share
was on the Standard Brands. Inc.
preferred list" for 5000 shares.
Whitney protested mildly at the use
Of preferred list
II didn't coin the word" Couzens
said tartly.
wouldn't that suggest to Mitchell
that he should return the favor?"
CouZens asked
1--WE offered him the stock on june
"a. 1929, at $32 a share" Whitney said
1T was about $33 on the market. He
took some risk with us. The stock
might go up or go down. He was
man of large means and perfectly cap
able of sharing the risk"
II just wonder if spreading these
shares around wouldn't influence people
who got them to reciprocate?" Couzens
asked.
Whitney then explained circumstances
surrounding the issue of the three lists
brought out and the two yet to come.
They were not preferred lists.
Whitney said They were definitely
legitimate business transactions. These
people shared an equity risk with US.
1t is a very old practice and we did
it long before the boom days. 1t was
and is a common practice in England
to have underwriters. That was what
these lists were. These men aided us
in underwriting an issue which We did
not want to sell publicly. You must
remember that we did not offer them
to the public We didn't want to carry
all the stock ourselves. We got people
to aid us in underwriting it."
"Raskob was grateful for being on
one of these lists" Couzens said. Gould
he have suggested that others be put
on it?"
He didn't" Whitney said.
"If the chairman Of the Republican
National Committee had suggested that
you let the Michigan Senator in. he
might have gotten on the list" COM
mented Glass
He was referring, he afterward said
to j. r. Mutt, treasurer of the Repub-
lican National Committee, who was on
one Of the select lists.
II know of cases" Couzens said
where men who owned only 2 or per
cent of q firms stock controlled 1t be-
cause of inside or outside influence"
Glass Asks Meaning.
"It would appear from the news
papers that he had" Whitney said.
What on earth Is the meaning OF
it?" Glass asked caustically. "Mr.
Raskob said he wanted to reciprocate.
and inasmuch as I'm now regarded %
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