Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-12-07
COUGHS DEBTORS
AIDED BY LOANS
Evidence Submitted in Probe
of Stock Deals by R. F.
C. Director.
BY the Associated Press.

Senate stock market investigators
were told today that while Harvey
Couch. a director of the Reconstruc-
ton Finance Corporation, owed money
to the Chase National Bank. the R. F.
G. made loans to railroads that re-
suited in payments of more than $10,-
000, GOO to the bank.
Charles s. Mccain, chairman Of the
bank board, an old friend Of COUGHS,
described to the Banking Committee
half a dozen railroad loans by the
r. F. c. which he said permitted pay
ment by the carriers Of Indebtedness to
the bank
He also disclosed that Couch still
owes the bank $153.000 jointly with an
associate in Arkansas.
Another loan, made individually to
Couch. Mccain said. was under-col-
lateralized for six months in 1881, but
has since been paid
Mccain said the Chase Bank received
the following payments from railroads
as result Of r. F. c. loans:
Wabash. $l,550.000. August. 1882;
Rock Island. $4,000, 900. June, 1892; st.
Louis g. Southwestern, s4,500, 900, April,
1892; Chicago & Northwestern, $1,000
600. September, 1882; Baltimore g.
The loan stfil outstanding by Couch
to the Chase Bank. Mccain testified,
was originally a $625, 900 advance to
Couch and c. n. Moses Of Little Rock.
Another PAID.
Mccain. who said he and Couch we're
old friends. testified they jointly Dor
rowed $625 900 from the Chemical Ma
tional Bank q few years ago but had
repaid it.
He testified he increased his own
Chase loan In 1881 to permit Couch to
retire some Of his undercollateralized
loan
Chairman Fletcher placed in the
record a letter from Couch denying any
"irregularity" in his relations with the
Chase bank. The letter follows:
MY dealings with New York banks
have been in the usual course Of private
business. In that connection my name
has been brought into your record.
Publicity given these routine business
transactions has been of such a nature
as to indicate that there was some ir-
regularity about them.
The letter wrote to Charles S.
Mccain Of the Chase National Bank
will be understood when I tell you that
we were reared together in Arkansas.
It was purely personal letter to my
lifelong friend and business associate.
Owned Bank Sock.
cat one time I owned a substantial
amount Of stock in the Chase Bank.
When I was appointed to the Board
Of the r. F. c., sold my stock at q
loss and severed all official connection
with the bank. My connection with
the r. F. c. was by request and not
by application.
There probably is nothing in this
situation that would justify the COM
mittee in taking the time to hear me,
but I shall be more than willing to
appear If you think 1t desirable"
Committee members said he would
not be called. but could appear If he
No evidence was presented that Couch
had anything to do with the railroad
loans.
The committee produced a letter
written by Couch on r. F. c. stationery
to Charles S. Mccain, chairman of the
bank, telling him loan had been made
to the Wabash, which owed the Chase
Bank 100000
Mccain testified the Wabash. which
obtained 100000 from the r. F. c.,
owed q group of banks $4,000, 900, in
cluding the $4,000, coo to Chase.
He said the R. F. c. also made loans
to other roads that owed money to the
bank, including:
Rock Island, $2,0oo,oo0 st. Louis &
Southwestern. $4,000. 900; Chicago &
Northwestern, 100000
Mccain told the committee the
present value of the loan that had
lacked collateral is $153,000, on which
the bank holds $22O,9O of collateral
Questioned by Ferdinand Pecora, COM
mittee counsel, the witness testified the