Evening star., 1939-01-30
Court Hears Plea
OF Bank Of America
To Bar 5. E. {. Quiz
Permanent Injunction
Against U. S. Agency
Sought at Hearing

The Bank of America sought IN
District Court today permanent
Injunction against the Securities
and Exchange Commission to pre-
vent inquiry into its affairs.
The hearing, before Justice Daniel
w. O'Donoghue, was expected to last
all day, with the introduction of
complicated evidence, including a
mass of records and accounting sta
tistics.
Thurman Arnold, Assistant Attor-
ney General of the United States,
entered his appearance in the case,
upon instruction of Attorney Cen
eral Frank Murphy.
Attorney William Stanley, repre-
senting the Bank of America. de-
clared the commission would be
prosecutors and judges and that his
client would have no recourse at law.
Mr.. Stanley said the bank, San
Francisco institution, has 1900 900
depositors, S1,4OO,OO0,O0 900 in deposits,
a capital structure of $115, 5,00O 900,
100000 borrowers and 490 branches
in 300 communities on the West
Coast. The lawyer contended that
a banks reputation is its most val
liable asset and that the District
code makes it a crime to spread de-
rogatory statements concerning a
bank, which is dependent upon pub
lie confidence.
S. C. Authority Questioned.
The commission has no authority
over the bank, Mr.. Stanley MAIN
tanned, adding that the bank is not
party to the proceeding before
the commission and so cannot ap-
peal from any finding.
Mr.. Stanley said the commission
has charged that the Transamerlca
Corp, a holding company that now
owns AZ per cent of the Bank OF
America stock, has made false and
misleading statements and that the
governmental body has ordered pub
lie hearings criticizing the reserves
of the Bank of America, its loans
and accusing it of other irregular.-
ties.
Under an order of November %
1888, the commission proposed to
issue subpoenas for officials of the
bank to determine if it had made
proper reports to the controller of
the currency and wanted records
from January, 1929, relating to
loans. produced, Mr.. Stanley said
He showed the court Is pages of
names of borrowers, regarding which
the commission wants to hold a
public investigation as to whether
the loans are good, he said.
Attorney Stanley asked the court
to restrain the commission. declar-
ing the mere issuance of the SUBJ
poenas were detrimental to the
bank.
Dilatory Tactics Charged.
John Rogge, assistant general
counsel of the commission, charged
that the Bank of America had lei
So days elapse after it received no.
tice without taking any action, but
waited until the day the hearing
was set before seeking Distric
Court injunction. He accused the
bank of dilatory tactics and o.
efforts to prevent the commission
from obtaining the truth.
The banks counsel, Mr.. Rogg,
contended, had made unfounded in.
situations of dissension among tht
different agencies of Government
and declared the commission ha!
reason to believe Trans America ha!
presented a false and misleading
picture of itself and its subsidiaries
although inducing people all ovel
the country to put their money int
the concern. Mr.. Rogge accused tn
bank of trying to stifle an investiga
ton and to ask the court to holt
that the controller of the currenc,
can not impart information to an
other agency of the Government.