Evening star., 1933-05-31
WOOD|N, M'ADOO
|DlN,|NEW 0 PROBE LIST
.AEB s-.
Shares Sold by Morgan Firm
at $1,000, 900 Below
-, Market Price.

- rContinued From First Page.)
have the committee know where the
counsel was heading.
Howard. the president of United Cor
poration. was called as the first wit
ness. He was on the stand when the
committee recessed last week.
Morgan moved forward to sit beside
George Whitney, back of the witness
Nearly all the committee members
were around the table as Pecora began
the questioning. Senator Glass was
next to Pecora.
Pecora inquired about the members
Of the United Corporation Board.
Identifies Directors.
Howard said Floyd L. Carlisle, men,
ber Of United, was director and chair
man of the Board of Consolidated Gas
of New York and also Of Niagara
Hudson
IN addition, he said, Carlisle is an
oficial of Columbia Gas g. Electric
Corporation. United Gas Improvement
Co, Mohawk Hudson and New YORK
Power g. Light.
B. C Cobb, of the United Board. is
an official of the Commonwealth and
Southern, Columbia Gas g. Electric,
and Mohawk Hudson.
Howard testified in a clear. sharp
voice, comforting frequently with aides
seated nearby. He leaned back into a
corner OF. the chair, as he faced Pecora,
frequently smiling.
Continuing with identifying director
ship affiliations of the United Corpor-
atoms Board members, questions by
Pecora and answers by Howard listed
the following:
Philip G. Gosler-United Corporation,
also United Corporation of New York,
and Columbia Gas & Electric.
Edward Hopkinson, jr.-United Cor
poration, United Corporation of New
York, United Gas Improvement Co.,
partner J. P. Morgan q Co., Philadel-
phia Electrical Corporation, United
Engineers g. Construction Corporation.
Harold -Stanley-Columbia Gas g.
Electric, Niagara Hudson, Mohawk
Hudson, United Corporation of New
York. partner ]. P. Morgan & Co.
Langdon K. Thorn-Commonwealth
and Southern, Niagara Hudson, Mo-
hawk Hudson, Public Service of New
Jersey, Bonbright 81 Co.
John E. Zimmerman-Niagar -Hud-
son, Mohawk Hudson, United Gas I'M
proyement, Philadelphia Electric, Pub
lie Service Of New Jersey and United
Engineering g. Construction Corpora
ton.
Testimony Retraced.
After several minutes, Glass rose and
went out of the room after jovially
humping Senator Adams, Democrat, of
Colorado, in the back.
Pecora retraced steps detailed last
Friday whereby Morgan g. Co. and Bon
bright 81 Co. formed United Corpora
ton
Howard said he was a member Of a
law firm at the time he was approached
by q "Mr. Thorn of Bonbright, and
Whitney of the Morgan flrrn and asked
whether he would be willing to head
United.
Howard said he acquired 200, 900
shares of common stock and loo, 900 In
option warrants, which entitled him to
exercise an option to purchase 100, 900
additional shares Of common stock for
$500, 900.
The counsel then went into the ar
rangement by which Morgan and Bon
bright acquired many shares of stock
and option warrants for $4,000, 900
FOR $4,000, 900 cash. Pecora asked,
Morgan g. Co. received 100000 shares
of United Common and 100000 option
.warrants?"
"Yes', ~
You. said. last week the issuance of
option warrants without time limita-
tiops was common practice?"
u think the history Of some seven
or eight years preceding would show
many cases. Howard said. II can't
cite an instance at this moment"
When was a statute passed to au-
thorize such an issuance?
II don't know
Didn't you know that Delaware
passed such a statute in March, 1929,
two months after incorporation Of the
Tnited?'
Il did not" ....,.. .-
Press Release Cited.
did you not know that at the time
of issuance of the option warrants
there was no statute to authorize it?"
II did not" ",---- --- ..--. -
Each of the option warrants en-
titled the holder to buy one share Of
common for $27.5o?" .:
Yes
Howard then voluntarily returned
TO the option warrants, saying THE
oPbAOAA uolA dAAb was q NOl1JAuSt dilNl O1ldO
contract was good under the law
who SO advised you?"
Howard said he had discussed it with
various attorneys. including a lawyer
in the Office of John w. Davis
Ibid the stockholders know of the
warrants?" asked Couzens
yes, there was public announce
ment at the time, I believe" Howard
said.
Were the terms of the warrant issue
made public?" Pecora asked.
Whitney then brought forward a
printed press release dated January 9,
1929. which stated in part:
THE United Corporation has been
organized under Delaware laws by
Messrs. ]. P. Morgan g. Co., Drexel &
Co., and Bonbright & Co.. Inc, and
has made arrangements to acquire GER
tain minority interests in the United
Gas improvement Co.; the Public Serv-
Zee Corporation of New Jersey, and the
Mohawk Hudson Power Corporation
held by the organizers and the American
Superpower Corporation.
''The capitalization Of the corporation
Is as follows:
Authorized. emily issued
Shares. Shares
First preferred stock
mo par Valueb b.... 1.O0OUOU None
Preference stock. 49,. 2,uO0.u0O A44.ls7
common stock. -. u 0 100000 3.sl0.s6a
There will also be presently issued
option warrants emitting holders to
purchase at any time without limit no
in excess of 1000, 900 shares Of common
stock at $2750 per share.
1000 900 shares will be reserved
against exercise of option warrants)
The directors of the corporation viii
be Messrs. Thomas S. Gates, Alfred L
Loomis Lanoon K. Thorne and George
whitney
'Pecora read the list.
No Public Offering.
Senator Adams interrupted to COM
ment that a memorandum he had be
fore him showed discrepancy" in th'
amount of stock as compared TO tht
January II newspaper release.
Davis, Morgan counsel, suggested tina
Whitney be allowed to explain"