Evening star., 1933-06-05

associates, including J. r. Mutt. now
treasurer of the Republican National
Committee, obtained 25,032 shares OF
first preferred stock in the road, g., ,75O
of second preferred and 62,400 OF
common.
Did you borrow $2,O00,000 10 pay
cash?"
Van Sweringen said as he recalled
the money was provided by the forma-
ton of the Nickel Plate Securities Cor
poration and the sale of the stock.
Did you get loan of $2,000,00
from the Guardian Savings & Trust Co.
of Cleveland?"
we got an interim loan from that
bank while the Securities Corporation
was being formed" Van Sweringen an
swered.
Has Poor Memory.
The operator displayed a poor mem
ory in recalling details Of the 19lt
transaction.
Pecora showed some impatience.
The witness conferred so frequently
with associates and Pecora finally di-
rected him to tell us when 1t is neces-
sary to confer with those about you
so that the record will show it."
Pecora quoted from the report OF DR.
w. M w. Splawn after his railroad in
vestigation for the House Interstate
Commerce Committee, which said that
50 2,000,0 900 of the s8,5o0,000 purchase
price was paid in cash, while 10 prom
issory notes, each payable one yeal
apart. with the first due in five years
were given for the rest of the payment
price.
The report further said the purchased
Nickel Plate stock was pledged with
the Guaranty Trust Co. of New York
for the promissory notes.
Pecora quoted it also as saying that
on July 3, 1916-two days before the
Nickel Plate purchase-the Van Swer-
ingen's borrowed S2,100,000 from the
Guardian Savings e. Trust Co.
You obtained that loan two days
before the Nickel Plate negotiations
were concluded" Pecora asked.
Seemingly so, yes" Van Sweringen
replied.
And the $500, 900 was used for the
cash payment on the Nickel Plate?"
THAT seems to be So"
"You pledged the stock you were pur-
chasing for the 10 promissory notes?'
THAT we did"
Then you borrowed all the money
to make that $2000000 payment to the
New York Central?" Pecora asked.
For the moment" Van Sweringen re-
piled.
How was this repaid?"
Through the sale of the stock in the
Nickel Plate Securities Corporation,
! Van Sweringen replied.
Only Fletcher and Adams remained
at the table, as Pecora dragged from
| Van Sweringen the details Of the oper-
! alton.
Both Pecora and Van Sweringen were
| consulting for details of the transac-
| ton the data gathered by the House
Interstate Commerce Committee.
T Pecora Is Methodical.
Pecora pursued his questioning with
| his usual methodical persistence, tSec'
| ing every step and oftentimes asking
question. in several different ways.
| This apparently held little Interest
| tor the spectators. There were fire.
| quent yawns, but the listeners re.
| manned
| 1t was testified that the Nickel Plate
Securities Corporation was formed II
| December, 1916, and that the Nicke
Plate Securities had additional asset!
in the form of the Cleveland, Youngs
town Railroad and some real estate.
These and the New York Contra
stock were pledged by the Var
Sweringens for the capital stock OF tn
securities corporation.
Common stock of the corporation hat
par value of 2,500.000.
The investigation was recessed fol
lunch shortly before l pm.
Stock Covered Loan.
Pecora had asked a number Of ques
tions regarding whether the Securitie
Corporation had assumed the So, 100 ,00'
Guardian Saving g. Trust debt.
The preferred stock was ussd to TAX
care of the Guardian loan," Val
Sweringen agreed.
Tn return for your holdings in tn
Nickel Plate and also your holdings Il
the Cleveland Terminal Co.. you go
all the common stock value at sl2,
500 ,000?"
Yes"
"An the Securities Corporation ais
assumed the So l00. 900 Guardian loan2
With the proceeds CT the preferre
stock, the result was that way" Val
Sweringen said. The preferred offse
that loan"
And you undertook also to get sub
scriptions for the preferred stock?'
"Yes."
"And did the securities corporation
agree to pay all the liabilities and obli
cations assumed by you in acquiring tn
Nickel Plate?"
They did and should"
Van Sweringen conferred with aide
before replying to nearly every ques
ton. Progress was slow.
100000 Yearly Salary.
A disclosure that some members o
the firm .oYJ. P. Morgan 81 Co ar
, paid q straight salary OF 100000