Evening star., 1933-10-06
HOLDS "WISE GUYS"
DUMPED S11,OOO,OOO
IN RAILWAY STOCKS

CONTINUED From First Page.)
session. When the hearing began
fIracy filed list of present and former
directors Of United States & Interna-
tlonal, including:
United States g. International Secu-
fltieS Corporation-present and former
directors.
Clarence Dillon. Dillon, Read g. Co.
Matthew c. Brush. president Ameri-
can International Corporation.
Charles Hayden, Hayden, Stone g. Co.
j. H. Hillman, jr., president J. H. Hill
man Coal & Coke CO.
Dean Mathey, Dillon, Read & Co.
E. G. Wilmer. retired.
G. NJ Moffett, president Corn Prod
Gcts Refining Co
M. S, Sloan, formerly president New
York Edison Co.
S. z. Mitchell, formerly chairman of
the board, Electric Bond & Share Co.
inquiries Into Stock Value.
Pecora called Tracy's attention to
United States & International's hold
1ngs on December 81, 1882. of As 900
shares of common in the Chicago, Rock
Island & Pacific Railway Co.
They were given a book value" on
the trusts books of SIS 5,566, 1866, but were
listed to have a market value of only
S151,875.
Tracy said the book value was the
cost to the trust on the open market
where the securities were purchased.
The International purchased about
IT IF
United States & Foreign in December
1929. and Senator Couzens, Republican
of Michigan, wanted to know the cir
cumstances.
The witness, leaning over the table
toward Couzens said the purchase
price was Sill a share, the market
level at the time He added, however
he did not remember details of the
purchase.
Tells of Rail Stock Deals.
Tracys testimony dealt with the
largest holdings of the United States
and International Securities Corpora
ton. embracing:
Common stock in the Chicago, Rock
Island & Pacific Railway Co. bought
in the open market beginning in 1929
dI d SOoI VI ONCl OO,OUU,UOU, dllO OkCl
$5800,000 common stock of the St.
Louis & San Francisco Railway Co.
The later market value of the first lot
was placed at only slightly more than
Sl50,000 and that of the second lot at
less than $4,000.
lingering a pencil Tracy said the
syndicate operated by Dillon, Read &
Co. and the United States & Interna-
tional was organized July 13, 1929, and
ended November II, 1929, to deal in
stock of the Rock Island.
do you think that was a proper
function for an investment trust?"
Pecora asked.
There was no harm in it." Tracy
replied.
Questioned by Couzens. Tracy said he
personally had never owned stock in
either railroad. Asked if any other
directors of the trusts had, Tracy said
he believed Charles Hayden, director
of the International, was chairman of
the board of the Rock Island.
Tracy added that F. H. Ecker, a
member of the board of one Dillon,
Read Investment Trust, was "on the
Frisco"
Book Loss of 100000.
Conferring almost continuously with
associates, Tracy said the syndicate in
Rock Island stock showed book loss
of about 100000.
The syndicate bought the stock On
the theory that the price would go Up,
Tracy explained, but when the account
was closed the securities could have
been purchased on the market for
S2,300,0 900 less than had been paid for
them.
The trust and Dillon. Read & Co
divided the loss. the witness said, by
splitting the shares held by the syndi-
cate when it was terminated.
Though the syndicate was formed in
July. 1929, Tracy looked through the
trusts minute books at Pecora's request
and said he could find no reference to
1t until September.