Evening star., 1948-04-27
Witnesses Dispute
Eaton Statements al
Kaiser-Frazer Inquiry
By ths ksxoeiotsd pvess

Two witnesses denied today sew
eral points Of testimony given yes
terday in the Kaiser-Frazer stock
case by Cyrus Eaton, Cleveland
financier.
The witnesses were H. T. Birr,
president Of the First California
Co., San Francisco, and that COM
pany's attorney, Roy A. Bronson.
Their testimony before q Securi-
ties & Exchange Commission inves-
tigation was directly at variance
with Mr.. Eaton's on several mat
ters.
The commission is inquiring into
the collapse OF 4 Kaiser Frazer stock
issue.
On Febraury Otis IL Co. of
Cleveland and the First California
Co. withdrew from a contract to
sell 100000 shares of the motor
company's stock. The majority of
the Otis stock is held by Mr.. Eaton
and his family.
Emphatic in Answers.
Mr.. Birr, questioned by Mr.. Bron-
son today, answered an emphatic
no" as Mr.. Bronson asked him
whether certain things as testified
by Mr.. Eaton had happened.
The questions, all answered mo"
by Mr.. Birr, were:
l. Whether William Daley, Otis
president. had said on February 8
that it would be madness" to 20
ohnod with the coll
KaiSer-Frazer stock had met heavy
selling on February 3 ION that day
Kaiser-Frazer spent $2,500,000 to
stabilize the price of the shares.
2. Whether there was a discussion
on February of figures in the stock
registration statement filed with the
SEC.
3. Whether on that day there had
been a discussion OF Kaiser-Fraze
earnings.
1. Whether at any time Mr.. Eaton
and Mr.. Birr had discussed the
backing up" of Kaiser-Frazer cars
in the hands of dealers.
Mr.. Bronson was then examined
by J. Russell Kelly, SEC attorney in
charge of the investigation.
Mr.. Kelly said Mr. Eaton had
quoted Mr.. Bronson as saying, You
can forget this business :. 1t
is just beyond the power of First
California to do it."
Mr.. Bronson testified, 'it is alb
solutely not true I made any state
ment about the capital of First
California or said that the deal
should be forgotten.
First California was at all times
ready, willing and able to 60
through with it,"
Mr.. Kelly asked whether First
California had money on deposit in
Cleveland to pay for the deal on
February 8.
Mr.. Bronson said $3,88l 900 had
been transferred by First California
from San Francisco to Cleveland on
February to meet its payment on
the deal.
Deal Halted by Suit.
First California at all times in
tended to 60 through with the deal
until we learned of Masterson's
charges" Mr.. Bronson said.
He referred to suit filed in De-
troit on the morning of February 8,
the day the deal was to have been
completed. The suit was filed
against Kaiser Frazer by James F.
Masterson, a Philadelphia lawyer.
The contract for the sale of the
stock stipulated that the deal was
to have been completed provided
no material" lawsuit had been
filed against the motor company.
Mr.. Eaton testified yesterday that
Joseph Frazer, president of KAISER
Frazer. had said things would hap
pen to the banking firm if it cam
celed its contract.
Eaton Quotes Frazer.
Mr.. Eaton said Mr.. Frazer told
him "Otis & Co. has enough active
enemies around the big Wall Street
houses, and II Otis cancels they'll
land on Otis and see they get what's
coming to them"
Mr.. Eaton was questioned at
length about KaiSer-Frazers pur-
chases of its own stock on Febru-
ary 3.
Mr.. Eaton said that while the
company was buying the stock an
avalanche" Of selling developed.
The financier said he decided finally
that the sales were Nation wide
When the heavy selling started,