Evening star., 1933-05-26

rights given? What advantage, II any
was it to United Corporation?"
Well" Howard replied. "it was some
| advantage to have them-the option
warrants-ln the hands of various
people-to pay that much additional
cash into the capital structure If the
company succeeded.
III the company succeeded" Pecors
interposed, wouldn't the public buy?'
They might"
and at the market value?' Pecora
asked
Howard nodded.
Assume that United common
reached $50 on the market" Pecors
| said. Then the holders of the option
warrants could demand the issuance
of common stock at $3.50 a share to
them. Was that to the advantage Of
the corporations"
Glass Interrupts Probe.
THAT would all depend" Howard
was s27.5O.
well, an option holder wouldn't
avail himself of that privilege II the
market was below $27.50?" asked
Pecora.
No"
but II the company needed cash,
suggested Glass. lit was materially to
the advantage of the company TO have
buyers at $27.50."
Howard agreed.
Continuing on the option warrants
Howard said that on the first trans
action Morgan & Co. got 7l4,20O option
warrants On later cash arrange
ment, Morgan g. Co. got l,000. 900 more
option warrants and Bonbright Electrl-
cal Co.. 100000.
Pecora read a letter from Morgan &
Co. to the United Corporation dated
January 8, 1929, IN which 1t offered Il
buy 100000 shares Of common stocs
and 1.COO, 900 option warrants for $10,-
600 900 and noting a similar sales agree
ment with Bonbright Electrical Co.
Howard said no other option war
rants were issued at that time.
Glass threw the room into an up
roar by demand to know what this Is
all about"
This member is entitled to know
some of the things dealt with in this
examination" he said, his voice rising.
Il don't know what this Is all about,
he snapped, looking at Pecora.
Has there been any intimation OF
any violation Of State or Federal law?
he questioned looking about.
without this question being gone into
it was then that Glass brought up re-
tention of the counsel.
This line of examination into the
activities, operations and securities OF
the United Corporation" Pecora said
comes under that language OF the
Senate resolution which directs an IN
veStigation into the issuance oHerlne
and selling of securities
1T already Is shown that this United
Corporation issued hundreds OF millions
OF securities to the investing pubic
The public size and area OF the opera
tions make 1t important enough TO war
rant the attention of this Committee
It has been shown 100000 option
warrants emitting the holder to BUY
common stock at $27.50 share were
sold to j. P. Morgan and Co. at 81
| each.
Already it has been shown that q
few days after this issue prices OF the
common stock on the Exchange were
nearly double S27.50. These securities
were issued at terms certainly against
the interests of the corporation to the
| benefit of a small group OF investors
Crowd Applauds PecOra.
Couldn't you have made this state.
ment to the subcommittee. Glass said
before this public investigations"
If was to come to Washington
every time Pecora began.
"As one member" Glass interrupted
Il wanted to know SO 1 wouldn't waste
the time listening to questions ano
answers Of no Importance to people ol
any intelligence
II submitted QUESTIONABLE to the
committee" Pecora said. Since then
I have received no requests for informa-
ton from any Senator or the commit
tee. Consequently, ! spent my time in
New York. / did net seek this assign
ment. I appreciate the honor OF being
counsel for this committee. But want
to assure the Senator from Virginia that
the compensation Of $255 month l.
no incentive to me to continue
Here came the tremendous burst OF
applause from room crowded with
spectators, and more after Chairman
Fletcher spoke In Pecora's behalf.
In leading up to the give-and-take,
there had been comment by Howard
that the Federal Trade Commission
had examined the United Corporation
in it's long utilities inquiry.
Did the Trade Commission find any
violation of the Sherman antitrust
act?" Glass wanted to know.
mo" from Howard
I'm still in the dark Glass almost
shouted
He again said that the Trade Com
mission had taken no action against
this concern"
Senator Barkley commented that "the
final report of the Trade Commission
on its utilities investigation had not
been made"
"A partial report. I think" Glass
contributed. II insist on knowing what
this is all about Am I going to find
out or not?" he added
Il don't see how we can anticipate
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