Evening star., 1933-10-04
DILLON CO.PROF|IS
REVEALED BY QUIZ
R. J. Christie, Jr., DiscIoses
Stock Bought at 20 Cents
| Sold for $50.
Continued From First Page.)

Continued From First Page)
with only portion Of the 500 900
shares OF common stock In all that
members of the firm obtained at 20
cents share, according to yesterdays
evidence.
Dillon Urges Publicity.
Greater publicity on the operations
OF banks and corporations today was
recommended by Dillon as a protection
to the investing public.
Disclosing that Dillon, Read q Co. Is
considering quarterly portfolio state
ments. the New York banker said in
vestors would be in a better position to
judge the value of securities il corpora
tionS would give out more Of their busi-
ness statistics.
Under examination for the second day
by Ferdinand Pecora, the committee
counsel. Dillon made his suggestion in
hoarse voice that could barely be
heard in the slightly-filled hearing
room.
Not only would such publication Of
information protect the investor he as
serted, but it would steady the market
and prevent violent fluctuations
through pool operations
Senator Glass, Democrat. of Virginia.
most critical member OF the committee
toward the course of the inquiry, at
tended todays session and sat near
Pecora, the counsel. whose conduct he
criticized severely last Spring.
Denies Forcing Sales.
As today's hearing opened. Pecora
leaned forward to PROFOUND questions
dealing with advertisements Offering
stock in the investment trust. which
Dillon said were prepared by his firm.
Describing the machinery of handling
such a stock issue, Dillon said. I'VE al
low a dealer to take what he likes" and
that it was not held against him" If
he did not care to participate.
He had heard stories that big New
York banks forced issues on their cor
respondents by cutting down future al
lotmentS II they did not subscribe to a
given issue, but testified he knew per-
sonally of no such instances.
He conferred with his associates on
almost every question
Explains Syndicates.
Dillon explained there usually were
three selling syndicates. the originating
group, the intermediate or banking
group and the selling syndicate.
Asked If the commission charged by
bankers was not larger on more risky
securities, Dillon said the risk depend
ed more upon STABILITY than intrinsic
value.
Isn't it like the doctor who charges
more for more serious operations. charg-
ing the patient in accordance with the
patients risk" inquired Senator Adams,
Democrat. of Colorado.
Dillon laughed, but said he was not
sure the banker who took risks In
financing industry was rendering
greater public service than the SNUG,
conservative" banker who handled only
gilt-edged stock.
IF they relied on our house, they
probably wouldn't have had an auto
mobile industry in this country because
of our SNUG conservatism" Dillon
added.
Yesterdays High Lights.
Dillon testified all day yesterday.
High lights developed in his testimony
were:
That his company in one transaction
before the stock market crash bought
investment trust stocks for 20 cents a
share that were later sold for an aver
age Of SIS to $50 share.
That. in organizing the investment
trust in 1924, the company obtained for
100000 stock that later was valued on.
the Stock Exchange at $50. 100000.
That by investment of S5.100.000 the
company was able to control two trusts
with total capitalization Of $780,.
900, ,Oo0
That Dillon, Read g. Co. received a
two -million-dollar commission for SELL
ing $50 100000 of stock
That George w. Wickersham. a for
mer United States Attorney General
and head Of the Hoover Law Enforce
ment Commission. was among list Of
the priminent customers Of the COM
pany
OF $4,000 shares of second preferred
stock, Dillon said, $500 shares were
sold to six directors of the investment
trust. including Wickersham.
WickerSham was described as having
paid slO0 each for 100 shares Of the
second preferred and receiving. in addi
ton, 500 shares Of the common.
Each Of the others got 500 shares OF
preferred and $500 shares Of common,
the committee was told They were:
r. Schaffer. Chicago banker
H F. Fleishhacker, a San Francisco
capitalist.
F. H. Ecker, president Of the Metro
politan Life Insurance Co.
j. Sherwin. former president of
Union Trust Co. of Cleveland
A. w. Burchard, former vice chair
man OF the board Of the General Elec-
trio Co
S339,0O0 for Commission.
Pecora brought out that of the s25,-
100000 for the public's preferred stock,
approximately S1000,00O went for ex-
penses of floating the issue, with Dillon
and Read taking $3.50 coo, which Dillon
said represented a per cent commits
Sion on $4,000 shares sold directly by
his banking house
The balance was divided among $50
dealers at the same 4 per cent commits
sion rates, Dillon said 1
Pecora went to great length to bring
out that the passage Of the stock from
the United States and foreign securities,
organized as a Maryland corporation,
to Dillon, Read & Co., was through
]. P. Olcott, identified by Dillon as
bookkeeper for his company. Pecora
asked if Olcott was not dummy"
Well don't know what you mean
by dummy" Dillon replied. smiling
while Senator Couzens guffawed, but
y