Evening star., 1933-10-19
Continued From First Page.)

LIE StOCk was SOlQ Dy the nrSt ac-
count. Wiggin said, for $l3,29C 900 at
a profit Of S50000.
What was the purpose of the &C.
count?" Pecora asked.
Hoping to keep a steady market. -"
the banker replied
DO you consider that a good prac-
tice?" Senator Couzens, Republican. of
Michican. asked.
Il think So" Wiggin replied. 1T is
wise to have a market for the stock. j"
What were the associates doing in
the Syndicate?" Chairman Fletcher
asked referring to the outside partici-
pants.
Il assume to make money" the wit
ness said
DO you believe in speculation in
bank stock?" Couzens asked.
Il believe in the purchase ard sale
Of bank stock" Wiggin replied looking
up toward the ceiling as he pondered
his answer.
Not Expert on Definitions.
This led to a discussion between
CouzenS and the witness on the defini-
ton of speculation.
Wlggln said speculation meant "un-
successful investments" to him.
Speculative operations are very often
profitable, aren't they?" Pecora asked
They used to be-" Wiggin replied
solemnly. Il don't mean to pose as an
expert On definitions
Wiggin said one difference between
speculation and investment was pur-
chase on margin and outright pur-
chase
Pecora asked whether the Joint ac-
count was a speculative or investuent
project.
1T was intended as a temporary in
vestment, but not for speculation. !"
Wiggln replied.
Pecora pointed out the syndicate was
originally planned for only go days.
asking if that was not speculation.
Possibly" the banker replied, but
speculation depends upon the resources
OF the investor
Denies Speculation.
Pecora asked if the 6o-dav period
did not stamp it" as a speculation.
1T wouldn't stamp it as a long in
vestment, I agree Wiggin said, "but
IL Wouldnt stamp it as speculation"
Pecora asked the banker again To
distinguish between speculation and in
vestment.
I'D like to answer it as I did be-
fore" Wiggin said
Well, go ahead" Pecora urged
Il can't remember what I said" Wig
gin replied with a smile. Then he
added:
1t was purchase with the expecta-
tion of selling out in the near future 1"
Wiggin said "It was an account
formed for the stabilization of the
stock"
What interest did the other par
tlclpants have in stabilizing the &C
COUNT" Pecora asked.
Il don't think they had any, but the
motive of the Metpotan might have been
different from the Others"
Pecora asked If it was necessary to
trade in 22,217 shares to stabilize the
market.
4 don't know Wiggin replied.
What do you mean by a stable
market?"
"A market that avoids violent fluc-
tuations"
Had the market been marked by vio-
lent fuctuations?"
I don't know" Wiggin then conferred
with hlm associates in an effort to give
a more definite answer.
Sought Wider Distribution.
Finally he replied there were not any
violent fluctuations at the time and
said he was informed the purpose of
the account was not to stabilize the
market but to get wider distribution
of the stock.
How would that get a wider distri-
button of the stock?" Pecora asked.
I don't know" the banker replied
Pecora asked if the other PARTICIPANTS
were interested in wider distributor
Wlggln said they were "in order to
make money" "
Pecora asked if Wiggin or his family
traded In the bank stock during the life
of the syndicate.
After another long conference during
which assistants hurriedly examined
thelr records, Wiggin replied:
The family holdings were increased
1,100 shares"
The family acquisition were partly
through. the Sherman Corporation, q
personal company. Wiggin said.
Questioned by Pecora, Wiggin said
the market price of the stock when the
account was formed was s575 to $3.50
and when the pool was dissolved the
price was 1894 to $694.
Wiggin said the highest the new stock
has risen since the to l split in 1929
was 287, which would represent sl.435
for the old security.
Profits Distributed.
Pecora asked Wiggin to find out later
how many shares of the stock were
actually transferred on record during
the life OF the account, and three other
pools
The profits from the first account,
Wiggin said, we're distributed among its
members, and another pool was organ
lied immediately by the same par
ticipants
1t had the same purpose. wiggin
testified.
What was it?" Pecora asked.
Il don't remember what said be-
fore" Wiggin replied "It was for the
wider distribution of the stock"
Wiggin said that purpose had been
accomplished
The second account, formed April 18,
1928. was limited to long position Of
300 shares and set up for so days with
the right to extend.
This account, Wiggin said. purchased
59,522 shares at a cost of s50,180,175.
The banker testified the pool lasted
until April 9, 1929, and sold the stock
for s50,734,935 for a profit of 1854, ,760
The record showed the second pool
got its first block of stock for $483, but
Senator Adams democrat of Colorado)
pointed out the average price it paid
was $500.
Borrowed From Subsidiary.
He remarked that the POOLS opera
tions must have raised the price Of the
stock
Both accounts were conducted out
Of money advanced by the Metpotan
Corporation and Blair d Co.
Wiggin said the Metpotan q Fpora-