Imperial Valley press., 1933-10-10
SAYS STOCKS
WERE SOLD To
DODGE TAXES
Dillon, Read And Company
President Frankly Admits Pur-
pose In Senate Quiz.
LOSSES OFFSET PROFITS
Millions Paid For Shares Now
Worth Less Than 100000
On Market.
BY LYLE C. WILSON

United Press Staff Correspondent
WASHINGTON, Oct. 10. U.p)-
Sales of huge BLOCKS of railroad
stocks in 1929 by Dillon, Read and
company, and that firms invest
ment trusts were revealed today by
senate stock market Investigations
to have been for the purpose Of
avoiding income tax.
Ernest Bell Tracy president OF
the two investment trusts controll-
ed by Dillon, Read and company
testified regarding the sales.
1.-The sales were to offset profits
and give true picture of the OPP
erations for the year 1929" Tracy
said.
you created loss to offset pro-
fits" said Senator Couzens, Repn.,
Mich.
That's right" Tracy replied.
The securities were common
shares of Rock Island and Frisco
both now in receivership, which
were acquired by Dillon, Read and
the United States and International
Securities corporation in a joint
JladlliS dSSodllC llOul July 10 w
November 9, 1929.
Dillon, Read obtained in that way
1900 Rock Island common and
5000 Frisco. Two days later, with
the market collapsing, Dillon, Read
transferred both blocks to the
United States and foreign securities
corporation at net loss of $627 ,213
That Securities Corporation on
December 81, 1929 sold the securi-
tional for a net loss of approx
mately $4,000. The series of sales
was made on a steadily dec,.Aing
market and during the 1929 panic.
Ferdinand Pecora, committee
counsel, then turned from those
transactions to investment trust
purchases of $746,500 worth of
bonds of the Seaboard Air Line
railway, also now in receivership
Tracy denied the Rock Island
had been purchased originally on
recommendation of Charles Hy-
den, chairman of the Rock Island
board of directors, and also a di-
rector of one of the investment
trusts.
Meanwhile Pecora today an
nounced that an investigation
of the Chase National bank
and the Securities corporation for
merly affiliated with it would be-
gin October IT.
Albert H. Wiggin, former head of
the Chase bank, probably will be
the first witness.
WASHINGTON, Oct. 10. U.P) -
Senate stock market investigators
were to press Dillon, Read g. Co.,
today for an explanation of the
manner in which millions of dol
lars entrusted by the investing
public were poured into railroad Sc
curities now valued at only few
thousand.
Ferdinand Pecora, committee
counsel, has shown that the larg-
est investment of the two invest
ment trusts organized and con-
trolled by Dillon, Read and Co.,
were in two railroad stocks.
The United States and Interna-
tional Securities corporation, one
Of the investment trusts, bought
S11 $4,000 of Rock Island and FRS
co securities. The stock now is
worth approximately $4,000 at
current market quotations.
Pecora is seeking to determine
whether the huge blocks of rail Sc
curitieS were bought at time when
interested or influential individuals
were unloading. Ernest Bell Tracy,
president of both investment trusts,
told Pecora last week that all pur-
chases were in the open market. He
explained the trusts had large
sums on hand and additional sums
coming in for investment and that
the money had to be employed.