Evening star., 1933-12-20
EDSEL FORD FACES
BANK PROBE CALL
Senate Inquirers Seek His
Testimony in Detroit
Investigation.
By the Associated Press.

BY the Associated Press.
Senate investigators disclosed today
that they plan to call Edsel Ford in
the current inquiry into the Detroit
banking collapse.
Although they withheld formal an
nouncement, investigators for the
Senate Banking Committee said the
evidence connected Ford so closely with
the operations OF the half billion dollar
holding company, known as the Guar
dian Detroit Union Group, Inc, that
he would be asked to testify.
The Ford development accompanied
indications that the committee would
inquire into former President Hoover's
activities in connection with the Detroit
banking problem.
Linked to Holding Company.
Ford's name figured prominently in
evidence already presented to the COM
mittee that the big holding company
told its banking subsidiaries what
dividends to declare and that its recon-
mendations we're followed despite OBJ
jections of bank directors.
This procedure was shown to have
been followed in the case of the Union
Guardian Trust Co., in which the Fords
were interested.
- Later this trust company was the
weak link which caused the collapse
of the Detroit banking structure, de-
spite efforts of President Hoover and
other national officials to save it, bring
ing on the Michigan bank holiday,
which was followed by the national
holiday last March.
Officers of the trust company were
shown to have protested that it was not
earning enough to warrant DIVIDENDS
asked by the parent company, so the
latter could pay the dividends it wanted
on its own stock.
Charges Milking"
The same procedure was shown by
the evidence to have been followed in
the case OF the National Bank Of Com
merce, another subsidiary, of which
Ford was a director.
Ferdinand Pecora, committee counsel,
said his evidence showed the holding
company was milking" its subsidiaries
for dividends SO it could pay dividends
on its own stock.
Robert o. Lord, former president 0l
the holding company, denied the bank
directors were Influenced by the "sug-
gestions" of the parent company.
He maintained this stand despite in
PRODUCTION of evidence showing the
after protesting against them.
Repeated denials from Lord that such
a course was followed were counterco
by Pecora, with the introduction oi
letters sent heads Of subsidiaries by
Lord Suggesting" the dividend rate
to be declared.
Lord Letter Exhibited.
The letters said the purpose Of the
dividend was ito provide fer the divi-
dend requirement Of the Guardian De-
troit Union Group, Inc. on the basis
of an annual disbursement Of $500 q
share. The Group was the holding
company for various banking units.
The first letter introduced was from
Lord to John N. Stalker. president o,
the Union Guardian Trust Co.
Pecora exhibited Stalker's reply, pro-
testing against the rate suggested. ant
saying it had not been earned
THE company is setting up no re-
serves" Stalker added, and we feel thai
is not as it should be- There Is no doubI
in my mind that the company will
suffer some losses"
Pecora contended in his questioning
of Lord, that the letters constituted
Command from the throne" Lord was
equally persistent in asserting thai
boards of directors Of the subsidiary
institutions were free to make theil
own decisions.