Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-08-14
PROBE LINKS DAVIS
TO KREUGER DEAL
Investors Agreed to Pay
U. S. Envoy $4,000 to
Head Protective Group.
By the Associated Press.

By the Associated Press
American investors In Kreuger d
Toll securities agreed to pay Norman
II. Davis, United States Ambassador
at Large, $150.000 to represent their
Interests and head an international
protective committee, 1t was disclosed
yesterday at a public hearing before
the Securities and Exchange Com
mission.
Whether any sum actually was paid
Davis was not revealed. The Ambas-
sador did not appear personally.
The agreement was made, however.
to pay the sum In 1888 and 1884 by
domestic protective committees out Of
$4,000 contributed by New York
banks which had underwritten secur-
tiles sold by the late Ivar Kreuger.
Swedish financier.
Investigation Completed.
The testimony was made public, to-
gether with commission announce
ment that it had completed its inves-
tigation of the reorganization Of
Kreuger g. Toll This reorganization
was undertaken after Kreuger killed
himself and his international f1nan-
cial empire crashed amid disclosures
of bookkeeping falsiflcations and en-
bezzlements. The commission later
will make recommendations to Con-
gress.
The purpose Of the Davis Interna-
tional Committee was to correlate the
work of Kreuger protective commit
tees of various kinds.
Testimony Of John Foster Dulles
New York attorney and counsel for
the Murphy Protective Committee,
said the bankers who contributed the
$4,000 included Lee. Higginson d
Co.: the Guaranty Co. and the Ma
tional City Co.
Commission counsel questioned
Dulles repeatedly about the bankers
support, which was described as very
unusual" Dulles said the bankers felt
they had moral obligation"
REORGANIZATION Is Incomplete.
The agreement was that he would
receive $4,000 as a fiat fee and $751;
UUU dOulIlOlld1 IL 1lC oLOu6Ab " . odS-
cessful conclusion the work of liquidat-
ing the securities in behalf of the
investors. The record did not show
whether Davis still heads the Inter-
national Committee The reorganiza-
tion of Kruger and Toll securities
has not been completed.
The Davis committee was formed
through two other committees. The
first was to protect the holders of
Kreuger and Toll security debentures
It was headed by Grayson M. P.
Murphy, New York flnancier. The
second committee was to protect de-
benture holders of International
Match Co., Kreuger's subsidiary.
A first payment OF $4,000 was
made by the three banks on May IL,
1888, and it was publicly announced
January 6, 1884, that the bankers
were contributing to the support Of
the protective committees.
Davis Delayed in Work.
Commission counsel, noting the
intervening period from the contribu-
tlOll tIlC dcACA Ava
an explanation, and Dulles said:
There was q lapse Of about seven
months between the date we got sthe
money and the date the Davis COM
mittee was able to function. Mr..
Davis had been delayed by his public
work as a disarmament representative
abroad, and his activities were to a
considerable extent superseded and
there was no public announcement
that could be made as to the function
of Davis committee until January,
1884"
The bankers made a second contri-
button Of 100000 in July, 1884, max
ing q total Of $270,00O which was
contributed to the support of the
Davis committee. The additional
$4,000, to make the total Of $310. 900
which was contributed by the bankers,
went to other protective committees.