Evening star., 1934-01-04
BADBANK|NGLOANS
TO JUDGES SHOWN
''PoIicy" Advances to PoIiti-
cal Figures Revealed in
Directors Report.
BY the Associated Press.

BY the Associated Press.
Senate investigators said today they
would seek to identify the judges and
other political figures of Detroit to
whom bad loans" were made by the
National Bank of Commerce.
Their decision followed presentation
Of evidence that a committee of the
banks directors reported in 1881 that
its bad loans included many policy"
loans to Judges Of courts, referees in
bankruptcy and other political officials" :"
The directors also reported they had
found bad loans to officers and directors
of the bank, which were clearly made
to assist or further stock market opera
tions."
Investigators for the committee said
the report showed total of $500 900
in bad loans" to officers and directors
of the Bank of Commerce and other
officials of the Guardian group OF
banks
Ford Deposits Hit 60,000,000.
They said they also had evidence that
Henry Ford, his family and company
had total deposits of about $50, ,OOO.OO
in the Guardian group and the Detroit
bankers group banks when they closed
for the Michigan bank holiday.
The banks which held these deposits
never reopened. but the FordS have re-
ceived part of the money back, lnVestl-
gators said.
Another development in the fast
moving inquiry was announcement Dy
Senator Couzens. Republican. OF Mlch-
igan. that he would propose legislation
to prevent national bank examiners
from accepting jobs with banks Tor TWO
wears after leaving the service.
Co,,zens was aroused by testimony
showing the Guardian group employed
a number of former bank examiners,
Including one whom he said had SUB
mitted reports to the controller OF cur
rency urging lenient treatment for those
institutions.
Loans to Officers Shown.
Evidence in the hands of the commit,
tee did not disclose which judges ano
political officials had received loans from
the Bank of Commerce, but did snow
some of the loans to officers of the oank
and the holding company Whlch con
trolled it. Among them were the fol-
lowing together with the manner III
which the directors classified them:
Frank w. Blair, director OF the group
$40 900 slow and S62,295 doubtful.
Phelps Newberry, son OF former Sena-
tor Newberry and vice president OF tne
bank: 100000 slow; S284,212 doubtful
j. walker Drake. director of the
group: sl26,0OO slow; S127,oo0 doubtful!
G OGDEN Ellis, bank director; sl9SS4'
s85 900 slow; s113.oo doubtful
As today'S hearing began, Robert o
Lord former president of the Guardlal
group, challenged the charge of Sen
ate investigators of ''studious conceal
ment" of losses by the group IN III
reports to stockholders.
Explains Differences.
Referring to previous evidence thai
the reports to stockholders showed
profits, while those to the Michigan
Securities Commission showed losses
Lord said the two were mot comparable
at ALL
He explained the report to the com,
mission included the operations OF tn:
holding company alone. while those tt
| stockholders included the operations o.
the holding company and all its sub
sidiaries.
His contention was sharply chal'
lenged by Ferdinand Pecora, counse
| for the Senate committee.
why were the reports to the stock
holders worded in such way thai
they concealed a deficit in each OF
| these years." Pecora asked.
There was no intent to conceal,
Lord replied. He contended the stock
| holders were interested in the group!
assets and not in the deficits.
Lord said he had been advised b!
representatives Of Price, WaterhouSe &
Co, accounting firm, that the report.
| were properly prepared.
| Pecora said he would like to call the
Price, Waterhouse representative.
In its inquiry into the annual re-
port to stockholders in 1882 the com
mittee called for Ernest Kanzler
former chairman of the board of th'
Guardian Detroit Union Group, Inc
to tell about it.
Kanzler, brother -in-law Of Mrs. Edse
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