Evening star., 1933-10-11
M'AD00 IDENTIFIED
AS FIRMS COUNSEL
IN STOCK INQUIRY
Was Attorney for Dillon, Read
in $4,000, 600 Bond Case,
Probers Hear.
AIDED COMPANY FIGHT
TO FLOAT BIG ISSUE
Head Of House Testifes Trusts
Lost on Stocks of Directors
Enterprises.
BY the Associated Press

BY the Associated Press.
Senator McAdoo, Democrat of Cali.
fornia, was named to Senate tnvesti-
gators today by a member Of Dillon,
Read & Co., IS counsel for the concern
when 1t foated a s12,o0o, 900 South
American loan in 1921, now In default,
The bonds, f1oated by Dillon, Read g.
Co., for Rio de Janeiro, are now selling
for SIG, on each s10O par value.
Robert o. Hayward, member Of the
firm, said McAdoo was counsel in
Strengthening out legal difficulty to
permit Dillon, Read g. Co. to handle
the issue.
Clarence Dillon, senior partner Of
Dillon, Read g. Co., testified today that
most of the losses of his firms invest
ment trusts were in stocks in which di-
rectors of the organization were In
terested.
The banker qualified his statement,
however, by saying the investments were
not made in these stocks because the
directors were interested in them, but
because they were regarded as good
securities.
just previously he said it was a gen
eral practice" to sell securities at the
end of the year for tax purposes and
that it had depressing effect" on the
market.
Probe to Be Boardened.
Dillon's testimony climaxed several
days of inquiry by the Senate Commit
tee to determine whether poor stocks
were dumped" on the investment trust
In which the public invested s75,0O0,00O
Meanwhile it developed this morning
that the Senate investigators will broad
en- their inquiry to include all stock and
bond markets throughout the country.
Dillon's testimony in reply to specific
questions from Ferdinand Pecora. coun-
sci for the Banking Committee. sup
ported similar evidence previously given
the committee by other prominent
bankers
Pccora referred to stock sales by one
Of Dillon. Read & Co.'S investment
trusts at the end of 1929 which, he said.
was to cut its taxable income.
Can you tell us whether that Gus
tom has developed under which large
volumes of transfers are made at the
end of the year" Pecora asked.
SAYS Situation Exists.
THAT is the case" Dillon replied.
speaking slowly. People sell stock on
which they have losses"
Does it have depressing effect on
the market?"
"I think it does. The practice has
become general"
A Questionable similar to that sub
mitted last week to the big exchange.
was sent by the Investigating Commit
tee today to IS exchanges throughout
the country. including the curb market
in New York City.
Heretofore. the committee has con-
centrated largely on the operations OF
the New York Stock Exchange, but
Chairman Fletcher indicated in state
ment Monday it probably would recon-
mend Federal regulation of all security
markets.
Whitney to Be Recalled.
It has not been decided whether
officers of the other exchanges will be
called to testify and will not be until
! the results of the questionnaires are
! studied. In fact. the committee plans
to conf1ne its future inquiry into the
New York Stock Exchange to submis-
sion of documentary evidence as far as
possible.
Members of the committee have ex-
pressed the determination, however, to
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