Evening star., 1933-06-01
JUSTICE ROBERTS
ON MORGAN LIST
w. w. Atterbury Also on
Fourth Roster of Pre-
ferred Stock Clients.
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Corporation deal. whitney said it
was correct
He directed ridicule at the figure as
''surmise" of what might have been
done. but wasn't"
Whitney had testified yesterday that
II the firm had sold the securities ii
turned over to the United Corporation
in forming that concern, it would have
made a profit of $57,000,000.
Only few Senators were present for
the public hearing, which again at
tracted an overflow crowd to the huge
hearing hall
The committee voted, II to 8, in
favor of publishing the original part
nerShip agreement made in 1915 with
out subsequent collateral agreements.
The three, Chairman Fletcher said,
igan; Norbeck, Republican, of South
Dakota, and CoStigan, Democrat, of
Colorado, voted to publish everything.
Fletcher said under the committee S
decision the original 1916 agreement will
be placed in the record with the names
embodied in it.
Subsequent agreements when part
ners were added or dropped will not be
made public.
THE committee thought they were
not Of any public interest" he said,
and that the public interest was con-
fined to the basic agreement itself"
Some members of the committee held
it was important to publish the agree
ent because it might have bearing on
the income tax question.
They held that if the partnership
was actually a contract of employment,
rather than co-partnership, it would
prevent the members of the firm from
making certain income tax deductions.
Asked If the agreement was really a
partnership, Fletcher said: "The articles
say it is partnership. I don't know
what viii arise later"
Uses "Suppositions."
With Whitney on the stand, Pecora
resumed the questioning by referring to
a statement put into the record pre-
viously by Whitney showing "the value
of certain holdings at acquisition and
at the high market price of 1929"
by these figures" Pecora said, ST
understand that had your firm not
transferred these utility securities to
the United Corporation, but had held
them until the Summer highs of 1929,
you could have sold them at prices
yielding profit Of S57, ,387 ,379."
THAT is correct" Whitney replied.
"You had said we could have sold our
United option warrants at a $68, 900 900
profit.
THAT was entirely a supposition. I
thought that we would use some sup
positions ourselves. Those figures are
entirely suppoSitions just as your ques-
tions regarding possible profits were
"You did sell 100000 warrants for
So, ,400, 900 and were left with 1,5I4 900
warrants, didn't you?" asked Pecora.
Eyes. Our profit, supposing we had
sold at the high, would be a simple
matter of arithmetic"
In answer to a long series of ques-
tionS, Whitney said the high for United
common stock $50 far as our records
60 was $685. in July, 1929.
Pecora said, eve have information
that it sold at $75 on September 25,
1929" He added that the option war
rapts sold over $40.
''Now If you sold the 1,2oo, 900 shares
OF common stock at $40, you would
have received ss4,00O,oo0, wouldn't
you?" Pecora asked.
IF you are going to surmise on what
would have happened, yes," Whitney
said. But that wouldn't have been
our profit"
NO" Pecora agreed. That's the
gross"
Now, if you had sold the liza, 200
IN option warrants at $40-they sold
higher" Pecora continued, you would
have received $68, ,568, ,000.''
Guessing Contest"
"Still surmising on what would have
happened, yes"
1.-THE total for the common stock and
the option warrants would have been
$152, ,568, ,000?" the counsel asked.
You are not including the preferred
stock in this guessing contest" Whit
ney said.
NO, but I'm willing to-" Pecora said.
whitney was obviously irritated at
the questioning, and some of his an
swers were bit sharp
Now, didn't we pay $25 a share for
the common Stock?" he asked Pecora.
is that what you want me to say?"
I want the facts" the counsel an
swered.
I'VE paid for it in blocks" Whitney
said. II assume the figure you want
Tor the common is $25. At that price
l,2OO,O0 shares Of common would have
been $30,000,000
Whitney explained to Senator Town
send, Republican, of Delaware, how the
Morgan firm had received blocks of
United Securities in return for certain
utility securities 1t had turned over
to United, plus S10,700,000.
"Wp irnrnadiofaIy rocoId cn0 mn ,,nS4s
"a unit consisting of one share Of pref
erence stock and one of common) at
S75 each and at no profit to u.s."
Whitney said
These figures are all a speculation.
1t is a case of If we had done none
OF the things we did do, this Is what
we might have done"
You said the profit on the securities
turned over to the United would at
top prices have been over $57 900 ,000,"
Pecora said.
81 want to show the other side of
the picture-that if you had sold your
United Securities at prices not at the
peak you would have made profit of
$122, sos, ,000."
That checks with my figures"
Whitney assented.
Fletcher asked when the 200, 900
shares of United Option warrants were
sold.
From July to September, 1929"
Whitney said.
Didn't you sell $4,000 common
shares?" Pecora asked.
From that day to this we sold 2e4,-
900 shares"
The witness thereupon told Fletcher
the 1929 prices for option warrants
ranged from AZ high to a 40 low,
while prices received for common stock
that Summer ranged from 73% to Ct
He outlined sales and purchases in
United since at declining prices, the
last sale of 1,700 in January, 1888, going
o. MI