Evening star., 1933-10-10
Rail Stock Worth So, ,OOO,O 900
Went to Trusts at Time
of Crash.
DILLON, READ HEARING
is RAPIDLY ADVANCING
Witness Says They Absorbed Loss
of Many Thousands on Rock
Island Deal.
BY the Associated Press.

BY the Associated Press.
Testimony that Dillon, Read g. Co.
sold more than 100000 in railroad
stock to its investment trusts in 1929
when the market was sinking rapidly
was given today before the Senate Com
mittee investigating Wall Street.
E. B. Tracy, president of Dillon, Read
& Co.'S investment trusts, disclosed
under questioning by Senator Couzens,
Republican, Of Michigan. and Commit
tee Counsel Ferdinand Pecora that the
trusts paid $3,7sl.0Oo for Rock Island
stock
Frequently conferring with his COL
leagues, Tracy said it had been agreed
by all concerned that the United States
g. International Securities Corporation
and the United States & Foreign Sc
curities Corporation wanted to buy rail-
road stocks.
Clarence Dillon. senior partner of
Dillon, Read & Co.. sat in the back
ground Of the sparsely filled caucus
room Of the Senate Office Building,
listening attentively
Hopson Subpoenaed.
When the hearings were resumed this
morning the Senate Investigators an
nounced they had served a subpoena in
Chicago on H. c. Hopson, vice presi-
dent Of the Associated Gas & Electric
Co. Committee agents had sought him
for weeks at Pecoras direction. The
subpoena is returnable Friday
Pecora said the committee would open
its long projected inquiry into the Chase
Securities Corporation a week from to-
day.
The attorney picked up where he left
of last week. questioning Tracy about
the joint account between Dillon. Read
& Co. and investment trusts through
which the latter acquired large blocks
OF railroad stock.
It was this disclosure that brought
from Senator Couzens the assertion that
some wise guys" were unloading stock
on the investment trusts In which the
public placed $75,000,000.
The bespectacled Tracy sat next to
Senator Townsend. Republican, Dela-
ware; with Senators Adams, Democrat,
Colorado. and Couzens opposite him.
Senator Norbeck, Republican, South Da-
kota, was next to Chairman Fletcher,
at the head Of the table.
Inc pOOl pcIWccIl tllc OultcO OtoVCo
and International Securities Corpora
ton and Dillon, Read & Co. bought
q, 400 shares Of Rock Island Railroad
stock.
Couzens Impatient.
Tracy said he could not tell whether
it was purchased in the name Of the
investment trust.
Couzens expressed impatience at the
IN IL
ing subordinate.
Tracy said he was giving the usual
practice"
That's what we want to flnd out,
the usual practice, so We can break
it up" CouzenS replied sharply.
The witness then testified $3,79l 900
was paid for the Rock Island stock by
the investment trust.
When the joint account was termi-
mated November 8, 1929, Tracy said,
Dillon. Read g. Co. took half the stock
and paid half the purchase price.
Tracy testified that when the pool
was terminated, Dillon, Read & Co. sold
its stock to the other investment trust,
the United States g. Foreign Securities
Corporation, at the market price OF
$114.25.
The stock cost Dillon, Read & Co.
$13806 a share.
Apparently. the witness added. Dillon,
Read & Co. absorbed the loss on the
stock of $328,800.
Calling attention to the absence Of a
meeting of the trusts board at the time
it purchased the stock from Dillon, Read
& Co., Pecora said it must have been
bought without formal approval.
"An Waiting to Buy"
Tracy said he had conferred with as
many of the directors as he could reach
and I'VE all wanted to buy railroad
securities"
Questioned by Adams, Tracy said the
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