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Mr. PECORA. Had you for a number of years prior to that time been identified actively with banking?

Mr. Lord. From August of 1906 until May of 1927 I was connected with the Harris Trust & Savings Bank of Chicago, leaving it as vice president to go to that bank.

Mr. PECORA. When did you sever your connection with the Harris Trust & Savings Bank of Chicago?

Mr. LORD. The last of May 1927.

Mr. PECORA. Where did you go from the Harris Trust & Savings Bank?

Mr. LORD. Direct to Detroit.
Mr. PECORA. With this Bank of Commerce?

Mr. LORD. With the Guardian Detroit Bank, at the time when it was organized.

Senator COUZENS. It was a State at that time, was it not?
Mr. LORD. It was a State bank then, Senator Couzens.

Mr. Pecora. Do you know of an organization or corporation called the Detroit—no; I mean the Guardian Detroit Union Group, Inc.?

Mr. LORD. Yes, sir.
Mr. PECORA. Were you identified with that organization?
Mr. LORD. I was president and a director.

Mr. PECORA. When did you become president of the Guardian Detroit Union Group, Inc. ?

Mr. Lord. I became president of the Guardian Detroit Group, Inc., which was the same corporation as the one of which the name was finally changed to Guardian Detroit Union Group, Inc., in the early summer of 1929, when the group company was organized.

Mr. PECORA. What was the nature or form of that corporation, Mr. Lord ?

Mr. LORD. I am not a lawyer, Mr. Pecora, but as I understand, the corporation was organized under the general corporation laws of the State of Michigan. In other words, it was a Michigan corporation.

Mr. PECORA. As a holding company?
Mr. LORD. As a holding company.

Mr. PECORA. What kind of securities did it acquire and hold in its portfolio?

Mr. Lord. Very largely the stock of banking and trust company institutions.

Mr. PECORA. Were those banking and trust company institutions located exclusively in the State of Michigan?

Mr. LORD. Yes, sir.

Mr. PECORA. Where was the principal office or place of business of the Guardian Detroit Group, Inc.?

Mr. LORD. In the Penobscot Building in Detroit.

Mr. PECORA. Did you become the president of that organization at its inception ?

Mr. LORD. Yes, sir.
Mr. PECORA. And also a director?
Mr. LORD. Yes, sir.
Mr. Pecora. What was the date of the incorporation of that com-

Mr. LORD. I only have the month here, May of 1929. I cannot tell you the exact day of the month.

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Mr. PECORA. That was May 9, 1929, was it not? Mr. LORD. I think that is correct. Mr. PECORA. I show you what purports to be a copy of the articles of association of the Guardian Detroit Group, Inc. Will you kindly look at it and tell me if you recognize it to be a true and correct copy of such articles ?

Mr. LORD (after looking over the paper cursorily). I would think so, Mr. Pecora.

Mr. PECORA. Mr. Chairman, I offer it in evidence, and

Mr. LORD (interposing). Mr. Pecora, I should say that I have not compared it with the papers, but I think so.

Mr. PECORA. Mr. Chairman, I offer it in evidence, and ask that it may be made a part of the record.

The CHAIRMAN. Let it be admitted, and the committee reporter will make it a part of the record.

(The articles of incorporation of the Guardian Detroit Group, Inc., of May 9, 1929, were marked " Committee Exhibit No. 1, Dec. 19, 1933", and will be found at the end of the day's proceedings.)

Mr. Pecora. I won't read the exhibit in its entirety, but I should like to read for the information of the subcommittee the following provision thereof, known as article 3:

The purpose or purposes of this corporation are as follows: To acquire, own, hold, dispose of, and deal in stocks, bonds, and other evidences of indebtedness, and securities, including those issued by any corporation, domestic or foreign, and to possess and exercise in respect thereof all the rights, powers, and privileges of individual owner thereof, including the right to vote the same and to execute proxies therefor.

Now, subsequent to the incorporation of the Guardian Detroit Group, Inc., was its corporate title or name changed to the Guardian Detroit Union Group, Inc.?

Mr. LORD. It was, sir.
Mr. PECORA. Do you recall when that occurred?

Mr. LORD. My recollection is that it was in December, or the latter part of November, of 1929.

Mr. PECORA. Thereafter was there a merger with another holding company known as the Union Commerce Corporation?

Mr. LORD. Yes, sir.
Mr. PECORA. When did that merger take place?
Mr. LORD. In the early winter of 1929.
Mr. PECORA. That took place on December 16, 1929, did it not?

Mr. LORD. I believe the merger was declared operative about that date.

Mr. Pecora. What kind of corporation was the Union Commerce Corporation at the time when it was merged with the Guardian Detroit Union Group, Inc.?

Mr. LORD. I have not a copy of their articles, but I would say it was the same kind of corporation.

Mr. Pecora. That is, it was a holding company organized especially for the purpose of acquiring, owning, and holding securities of banking institutions, was it not?

Mr. LORD. I believe so; yes, sir.
Mr. PECORA. And their affiliates ?
Mr. LORD. Yes, sir.

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Mr. PECORA. Now, upon the merger of those two holding companies, under what name did they continue to operate as one company?

Mr. LORD. The Guardian Detroit Union Group, Inc.

Mr. PECORA. Now, Mr. Lord, would you be good enough to look at this chart that is before you, entitled Organization of Guardian Detroit Union Group, Inc.", and tell the subcommittee if in your opinion that chart correctly represents the structure known now as the Guardian Detroit Union Group, Inc., with the various units that enter into that holding company or are represented in its stock acquisitions ?

Mr. LORD. Mr. Pecora, without checking every corporation shown on that chart I could not say that it was absolutely correct. I have seen the chart, and in general I should say it is correct. There are, however, I think some letterings in the chart that show discrepancies as of the present time and that should be checked. For instance, the Flint Bank has been reopened on a partial basis.

Mr. PECORA. Can you point out whatever inaccuracies appear on this chart?

Mr. LORD. The only one that I notice at the moment is that there is no securities company listed up there in connection with the First National Bank of Kalamazoo, That securities company many months ago was liquidated, and that is possibly the reason why you left it off. You will see in the second line to the left the First National Bank & Trust Company of Kalamazoo, and

Mr. PECORA (interposing). Yes; I see it. You mean by that, that at the time of the acquisition of the First National Bank & Trust Co. of Kalamazoo by the Guardian Detroit Group, Inc., a securities affiliate connected with the First National Bank & Trust Co. of Kalamazoo was also acquired?

Mr. LORD. That is my recollection.
Mr. PECORA. And that affiliate does not appear on this chart.
Mr. LORD. It does not appear on the chart.
Mr. PECORA. When did that affiliate cease to operate?

Mr. Lord. I cannot answer that question, but a good many months ago.

Mr. PECORA. And the fact that it had so ceased to operate is the reason why it does not appear on this chart, I take it.

Mr. LORD. I should think so.

Mr. PECORA. Are there any other items that you would like to refer to by way of correction on that chart?

Mr. Lord. Not offhand; I do not see anything offhand, Mr. Pecora.

Mr. PECORA. Now, according to this chart the Guardian Detroit Union Group, Inc., which is the top organization, is made up of a merger of the Guardian Detroit Group, Inc., and the Union Commerce Corporation, two predecessor holding companies, isn't that a fact?

Mr. Lord. That is correct.
Mr. PECORA. And the various banking institutions-

Mr. Lord (interposing). Mr. Pecora, I would not say that the Guardian Detroit was a predecessor company, because it was the ime corporation as I understand it as the Guardian Detroit Union roup, Inc., after the name was changed.

Mr. Pecora. Yes. Now, those two holding companies had been merged into the Guardian Detroit Union Group, Inc., on December 16, 1929, and owned, controlled, or acquired at various times the various banking institutions that are designated and shown on this chart, isn't that a fact?

Mr. LORD. They owned the shares of those banking institutions, with the exception of the qualifying shares of directors, and in some cases a small percentage or minority stockholding.

Mr. PECORA. Now, on this chart also appear various affiliates that, in turn, had been organized or created and were wholly owned subsidiaries of the various banking units to which they are annexed on this chart.

Mr. Lord. I believe so. Mr. Pecora, I have prepared, and if I may hare the forbearance of this committee, it seems to me that if I were to read a statement, which is not very long, it would clarify the minds of the members of this committee in giving something about the history of the matter.

Mr. PECORA. About the organization of the constituent units of this situation!

Mr. LORD. Yes, sir.
Mr. Pecora. Have you a copy that I may have?
Mr. LORD. Yes, sir.
Mr. PECORA. I should like to look at it as you go along.
Mr. LORD. With your permission may I read it?

Mr. Pecora. Will you just let me have a copy so I may follow your reading of it?

Mr. LORD. Certainly.

Mr. PECORA. And I should like to state that we are having a photographic reproduction made of this chart, I mean the chart to which the witness' attention has been called, and it will be on a smaller scale, and I propose then to make it a part of the formal record here.

The CHAIRMAN. In regard to that matter, Mr. Pecora, as you probably know, we have to have regard to the rules of the Government Printing Office. I suppose you will get it up so that we can have it reproduced there.

Mr. Pecora. We will have inquiries made to enable us to ascertain just what sort of reproduction we will have to make.

The CHAIRMAN. They are not equipped generally to insert illustrations. We will have to go into that with them in order to find out what their requirements are. And, of course, the Government Printing Office cannot show these colors that appear on the chart.

Mr. PECORA. I am sure that it is so prepared that what appears on the chart will be clear in the reproduction by the Government Printing Office.

The CHAIRMAN. All right.

(The chart referred to is reproduced herewith as Committee Exhibit No. 1-A. December 19, 1933.)

Mr. LORD. Shall I now proceed?

Mr. Pecora. Do you now want to read your statement concerning the organization of this holding company!

Mr. LORD. Yes, and
Mr. Pecora (interposing). You may go ahead.

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Mr. Lord. This statement will contain some history of the acquisition of the stock of these banks and trust companies, and I think will enable the committee to follow the matter more clearly.

The CHAIRMAN. May I ask, first, what proportion of the banks in Detroit were involved in this set-up?

Mr. Lord. Senator Fletcher, at the time of the bank holiday there were only 4 banks remaining in Detroit, 1 of them being the Guardian National Bank of Commerce, which was our institution, and the other 3 were the First National Bank, the Detroit Savings Bank, and the Commonwealth Commercial, a State bank.

Senator Couzens. Then there was a little savings bank.

Mr. Lord. And there was the Morris Plan Bank. And there was the United Savings Bank, which was not a member of the clearing house.

The (CHAIRMAX. Do you mean those were the only banks that opened after the bank holiday?

Mr. Lorn. No; those were the only banks in existence before the bank holiday.

The CHAIRMAX. Oh! Before the bank holiday?

Mr. Lord. There were only 4 banks in Detroit then, including, of course, the 2 I have just mentioned, the Morris Plan Bank and the United Savings Bank, which makes 6.

The CHAIRMAX. Are they all included here?
Mr. LORD. No, sir. And we have only one bank in Detroit now.

Mr. PECORA. In order to get that clear let me ask you: The most of the banks shown on this chart as combined in the organization of the Guardian Detroit Union Group, Inc., were located outside of the city of Detroit, but all within the State of Michigan; is that so?

Mr. LORD. Yes, sir. Now, this statement is addressed to the chairman of the committee.

The CHAIRMAN. You may proceed with your statement.

Mr. Lord. As I understand it, and as emphasized to me by representatives of this committee in Detroit, the principal purpose of the investigation into the Detroit banking situation is to obtain information which will serve to suggest banking legislation either in addition to or revising existing laws to strengthen the banking structure of this country, to aid a recovery in business, and at the same time to prevent a repetition of the mistakes and excesses which occurred during the so-called “speculative era " that ended in the lète fall of 1929. I am, of course, glad to be helpful in any possible way.

To go into every minute detail of the history, organization, and growth of the Guardian Detroit Union Group, Inc., would require an unnecessary amount of the time of this committee. It would seem to me, however, that to give the committee the proper understanding of the background of this situation it would be helpful to bring out something of the growth of the city of Detroit and to tell briefly of the history of the Guardian Detroit Union Group, Inc.

The CHAIRMAN. Mr. Lord, will you sit a little closer to the microphone so your voice may be heard?

Mr. LORD. Certainly.

Mr. PECORA. And will you read a little more slowly so that the voice reproducer may carry satisfactorily?

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