Evening star., 1933-02-23
Officials Admit Position Under
Questioning by Senate
Pr0berS.
BORROWED 10000
SHARES TO COVER SALES
Committee Counsel Alleges Short
Selling While Intensive Drive
Was Being Conducted.
By the Associated Press.

By the Associated Press.
officials of the National City Co. ac-
knowledged under persistent question
ing by Senate stock market investi-
gators today that their company was in
short" position in the stock of the
National City Bank IN the Spring of
1929.
Then" Chairman Norbeck said,
leaning forward in his chair, "since the
bank controlled the company, it was
in effect selling its own stock short
while the public was buying it,"
Officials of the company testified 30,-
900 shares had been borrowed from
Charles E. Mitchell, chairman of the
bank, to cover sales to the public, but
insisted that the transactions did not
actually amount to short selling"
Alleges Short Selling.
They contended that while the COM
pany did not have the stock in New
York, it may have been en- route,
though they were unable to show that
was true. 4
Ferdinand Pecora, committee count
sci, contended that the evidence
showed the company was selling short
in the bank stock at the same period
in which he has asserted it was con-
Quoting an intensive campaign" to sell
the stock to the public as an invest
ment
The evidence disclosed that Mitchell
received interest of more than 100000
for loaning the stock for a few months
to the company of which he is chair
man.
Rights Acquired From Bank.
The committee also learned that on
February Is, 1929, the company ac-
quired rights from the bank to pur-
chase at $100, $1,000 shares of the
bank stock then selling above $500.
Officers of the company said the
rights which expired that day were ac-
quired for customers scattered through
out the world and gave them more time
to exercise the rights.
They said most of the stock rights
were exercised by the shareholders,
but the company retained about 400
AS Hugh B. Baker, president of the
company took the stand, Richard Whit
ney, president of the New York Stock
Exchange, appeared In the committee
room as prospective witness.
Baker said stock in the National City
Bank was included in the securities
sold by his company.
How many shares of the bank stock
were sold to the public In 1922" Pecora
asked.
THE total sold-I cannot differentiate
between the public and dealers-was
1884, 9,000," Baker replied.
Removed From List.
Baker said the stock was not listed on
the exchange after January, 1928, when
it was removed from the trading list at
the banks request. He added under
questioning that the company acquired
the stock from dealers and private in
dividuals.
The company had a 'long position"
in the stock throughout 1929, the wit
ness said.
Brookhart Questions Baker.
Senator Brookhart, Repub blican, of
Iowa, asked what difference there was
between borrowing the stock and "a
1--WE had rights which when exer-
cised would give US certajH number
Of shares of Stock" Baker, Said.
But you we're short at the par
ticular moment insisted NBrookhart;
you hadn't exercised the rights"
"I can't agree to that interpreta-
ton" Baker replied.
After several minutes of consultations
Baker said the rights were issued Jam
uary is and expired February Is, but
that some of them were held open
because of clients all over the world.
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