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Mr. LORD. On that State chart?
The CHAIRMAN. Yes.

Mr. PECORA. That is the chart which has been presented by Mr. Lord and marked “ Committee Exhibit No. 2".

Mr. LORD. I cannot tell you, Senator. It has been a changing situation. There has been a very substantial number of State banks reopened on a reorganization or on a partial withdrawal basis.

Senator COUZENS. There is one statement I would like to have you clarify, and that is you say that this sum of $27,000,000 was advanced for the purpose of protecting the depositors. Is that quite an accurate statement?

Mr. LORD. For either protecting the depositors directly or stabilizing the situation which was so disturbing to the depositors, Senator.

Senator Couzens. Have you any figures to segregate that money that was put up for the protection of the stock in the group or the banks, as distinguished from that money that was put up for the protection of the depositors?

Mr. LORD. Yes. May I take a minute to give you the approximate figure? Senator COUZENS. Yes.

Mr. LORD. I would say that Mr. Mott's contribution in Flint was for the protection of the depositors; wouldn't you? He made good a defalcation in a bank of which he was president.

Senator COUZENS. I should say so; yes.

Mr. Lord. That is $3,595,000. Do you want me to eliminate the loan of Mr. Edsel Ford to the securities company? Would you not consider that for the protection of the whole situation?

Senator COUZENS. I understood that was used for the purpose of taking up doubtful securities in these institutions.

Mr. LORD. No; I mean where he loaned some of his personal collateral to the security company.

Senator COUZENS. I do not know whether you can trace back to the purpose of that, the purpose for which it was used, or not, but I do not think it is in accord with your statement a while ago as to what it was used for.

Mr. LORD. It was loaned by the Guardian Detroit Co. to the securities company to enable them to carry their inventory.

Senator Couzens. That would hardly be for the protection of depositors.

Mr. Lord. Not directly for depositors, but for the protection of the whole situation.

Senator, I would say that for the direct protection of the stockholders over 12 million went in, and the balance to stabilize the general situation.

Senator COCZENS. So that out of about 27 million about 12 million went for the protection of depositors and the balance for the protection of the stockholders?

Mr. Lord. First for the depositors, Senator. You know when the stock of the banks dropped how disturbed the depositor was!

Senator COUZENS. Oh, yes. You can only get the best estimate of how the money reacted, but I was trying to arrive at the purpose that first suggested the putting up of the money.

first year.

Mr. Lord. Senator, these purchases of stock to stabilize the general situation were not made by any stockholder with an idea of wanting the stock or for gain. It was for the one purpose.

Senator COUZENS. I understand that. I was not going back into the motive. I was just trying to get the purpose for which the money was used.

Mr. PECORA. Mr. Lord, I show you what purports to be a printed copy of the Annual Report for the year 1929 of the Guardian Detroit Union Group, which appears to have been issued to the stockholders over your signature as president. Will you look at it, particularly the portion of it which purports to give the names of the officers and directors for the first year of the Guardian Detroit Union Group, appearing at pages 2 and 3 and 4?

Mr. LORD. May I look at your copy? Mr. Pecora. Certainly (handing document to Mr. Lord). And tell me if those pages correctly set forth the names of the officers and directors of the Guardian Detroit Union Group, Inc., for the

Mr. LORD. I would assume so.
Mr. Pecora. Yes. Well, I want the record to show those things.
Mr. Lord. I haven't any reason to believe it is not correct.

Mr. Pecora. I offer in evidence that report, particularly those three pages enumerated pages 2, 3, and 4.

The CHAIRMAN. Let it be admitted. You do not want the whole report, but just those pages showing the officers and directors?

Mr. Pecora. I merely want to show the names of the officers and directors of the first holding company during the first year of its operations.

Mr. LORD. Mr. Pecora, might I say this, that this may not be the names of the officers and directors during the first year of operation. The report is dated as of January 28, after the annual meeting of 1930 which was held. See the point?

Mr. PECORA. Those names are the names of the original officers and directors of this holding company?

Mr. LORD. I do not know whether they are the original ones, because I haven't that list with me. But the point is this

Senator Adams (interposing). They are the names at the beginning of the second year, as I get it?

Mr. LORD. They are the names of the officers and directors after the annual meeting of the corporation which was held in the latter part of January.

Mr. PECORA. Of 1930?

Mr. LORD. Of 1930. In other words, these men may not have served as officers and directors during the period covered by this report, but as of the date of the report. That is my understanding.

Mr. Pecora. With that explanation I will offer that list in evidence.

The CHAIRMAN. Let it be admitted and entered on the record.

(P. 2, 3, an, 4 of Annual Report of Guardian Detroit Union Group for 1929 were thereupon designated “ Committee Exhibit No. 3, Dec. 19, 1933.")

Mr. PECORA. I will first read the names of the directors shown on pages 2 and 3 of this report (reading):

Frank W. Blair, chairman Union Trust Co., Detroit. Arthur C. Bloomfield, president National Union Bank & Trust Co., Jacksoll. Henry E. Bodman, chairman Guardian Trust Co., Detroit. Clarence H. Booth, chairman Motor Bankers ('orporation, Detroit. Ralph H. Booth, president Booth Newspapers, Inc., Detroit. Joseph H. Brewer, president Grand Rapids Trust ('o., Grand Rapids. Walter 0. Briggs, chairman and president Briggs Manufacturing Co., Detroit. Daniel D. Brown, president First National Bank & Trust ('o., Port Huron. Harry C. Bulkley, Campbell, Bulkley & Ledyard, Detroit. Charles S. Campbell, president First National Bank & Trust Co., Kalamazoo. Roy D. Chapin, chairman Hudson Motor Car Co., Detroit. George R. Fink, president Michigan Steel ('orporation, Detroit. William A. Fisher, president Fisher Body Corporation, Detroit. Edsel B. Ford, president Ford Motor Co., Detroit. Frank E. Gorman, vice president Capital National Bank, Lansing. Stephen A. Graham, president Federal Commercial & Savings Bank. Port Huron. John C. Grier, Jr., president Guardian Defroit Co., Detroit. C. H. Haberkorn, Jr., chairman Bank of Detroit, Detroit. Carlton M. Higbie, chairman Keane, Highbie & Co., Detroit. Sherwin A. Hill, Warren, Hill & Hamblen, Detroit.

Charles H. Hodges, vice president American Radiator & Standard Sanitary Corporation. Detroit.

James Inglis, president American Blower ('orporation, Detroit.
Richard P. Joy, director National Bank of Commerce, Detroit.
George B. Judson, president Bank of Detroit, Detroit.
Ernest Kenzler, president Universal Credit Corporation, Detroit.
Jerome J. Keene, director Guardia Detroit Bank, Detroit.
Dvight B. Lee, president and treasurer Motor Products Corporation, Detroit.
Robert 0. Lord, president Guardian Detroit Bank, Detroit.

Alvan Macauley, president and general manager Packard Motor Car Company, Detroit.

Francis C. McMath, director Canadian Bridge Co., Ltd., Detroit.
George B. Morley, chairman Second National Bank & Trust Co., Saginaw.
Charles S. Mott, vice president, General Motors Corporation, Detroit.
Fred T. Murphy, chairman Guardian Detroit Bank, Detroit.
Edwin H. Nelson, president Nelson, Baker & Co., Detroit.
Phelps Newberry, vice president Guardian Detroit Bank, Detroit.
Ransem E. Olds, chairman Reo Motor Car Co., Lansing.
Jerome H. Remick, president Detroit Creamery Co., Detroit.
Herbert S. Reynolds, president Peop'es National Bank, Jackson.
John R. Russel, director Russel Steel Construction Co.
Murray W. Sales, president Murray W. Sales & Co., Detroit.
Henry H. Sanger, president National Bank of Commerce, Detroit.
R. Perry Shorts, president Second National Bank & Trust Co., Saginaw.
Hal H. Smith, Beaumont, Smith & Harris, Detroit.
Oscar W. Smith, president Parke, Davis & Co., Detroit.
John N. Stalker, president Union Trust Co., Detroit.
James L. Wa'sh, vice president Guardian Detroit Bank, Detroit.
Charles Beecher Warren, Warren, Hill & Hamblen, Detroit.
Dudley E. Waters, chairman Grand Rapids National Bank, Grand Rapids.

OFFICERS

Frank W. Blair, chairman of the board.
Henry E. Bodman, chairman executive committee.
Robert 0. Lord, president.
John C. Grier, Jr., vice president.
James L. Walsh, vice president.
Henry H. Sanger, vice president.
Bert K. Patterson, vice president and treasurer.
C. H. Haberkorn, Jr., vice president.
Lewis K. Walker, vice president.
Joel H. Prescott, vice president.
Andrew L. Malott, vice president.
A. A. F. Maxwell, secretary.

H. A. Conner, assistant secretary.
Earnest Kanzler, vice president.
Phelps Newberry, vice president.
John N. Stalker, vice president.
Arthur H. Vogt, vice president and comptroller.
Samuel R. Kingston, vice president.
Charles A. Kanter, vice president.
Harry S. Covington, vice president.
R. Perry Shorts, vice president.
W. J. Penningroth, assistant treasurer.
0. A. Waldow, assistant comptroller.

Advisory committee: Fred T. Murphy (chairman), James Ingl's (vice chairman), Henry E. Bodman, Roy D. Chapin, Edsel B. Ford, Charles H. Hodges, Ernest Kanzler, Alvan Macauley, George B. Morley, Charles S. Mott, Jerome H. Remick, John R. Russel, Murray W. Sales, Charles B. Warren,

Executive committee: Henry E. Bodman (chairman), Frank W. Blair, Harry C. Bulkley, John C. Grier, Jr., C. H. Haberkorn, Jr., Carlton M. Higbie, Sherwin A. Hill, Richard P. Joy, Ernest Kanzler, Robert 0. Lord, Charles S. Mott, Fred T. Murphy, Edwin N. Nelson, Phelps Newberry, Murray W. Sales, Henry H. Sanger, John N. Stalker, James L. Walsh.

Operating committee: James L. Walsh (chairman), Frank W. Blair, Frank M. Brandon, Joseph II. Brewer, Harry S. Covington, Frank E. Gorman, Stephen A. Graham, John C. Grier, Jr., Carlton M. Higbie, George B. Judson, Charles A. Kanter, Samuel R. Kingston, Robert O. Lord, Duncan J. McNabb, Frank J. Maurice, E. R. Morton, Phelps Newberry, Bert K. Patterson, George R. Paul, Frank E. Quisenberry, Herbert S. Reynolds, Henry H, Sanger, Earl H. Shepherd, R. Perry Shorts, John N. Stalker, Arthur H. Vogt, Herbert R. Wilkin.

Mr. PECORA. Now, Mr. Lord, will you tell the committee what the functions were generally of the advisory committee of the board of directors?

Mr. LORD. I would say that the advisory committee was a policy committee.

Mr. PECORA. Meaning exactly what?

Mr. LORD. To discuss and formulate policies to recommend to the unit banks for their consideration, or to the board of directors of the Group Corporation itself.

Mr. PECORA. And this advisory committee not only formulated policies or proposed policies for the holding company itself, but also for the unit banks?

Mr. LORD. Only as suggestions to the unit banks. You see, on that advisory committee, as I recall it, there were some of the unit heads. I do not remember the list; I have not got it.

Mr. PECORA. What were the functions of the executive committee?

Mr. LORD. May I read here about the executive committee? Perhaps that will clarify it.

Mr. Pecora. What is it that you propose to read?

Mr. LORD. This is from what is known as Bulletin No. 1, issued by the Guardian Detroit Union Group.

Mr. PECORA. All right.
Mr. Lord (reading):

The advisory committee is largely a policy-making committee. Its membership is comparatively small and includes no active operating officers of any unit. This committee has and should have entire freedom in criticising either the policies or handling of any unit or any department of the associated institutions. Its meetings are not held on stated days, but at regular intervals at the call of the chairman. Operating heads of units will from time to time be called to confer with this committee as to any question under consideration.

Senator COUZENS. Did they keep any minutes?

Mr. LORD. I think they did, Senator. Dr. Murphy, I believe, was chairman of the committee.

Senator COUZENS. Have you the minutes here?
Mr. LORD. I have not, sir.

Mr. Pecora. Was it the general purpose of this advisory committee to secure unanimity of action with regard to the general policies of the holding company and its various constituent units?

Mr. LORD. I would not say so, Mr. Pecora, because each unit might have its own problem. It was, so far as I could describe it, just what its name implies—an advisory committee, a committee which would advise with Grand Rapids or Saginaw or Flint over their problems, or would advise with the officers of the group over a group problem.

Senator COUZENS. Have you any evidence of any advice which they sent out?

Mr. LORD. I do not know that they sent it out. There were meetings.

Senator Couzens. Is that where the advice was given-in meetings? Or was it given out in documentary form?

Mr. LORD. I do not know whether Dr. Murphy ever wrote any letters or not as chairman of that committee. I have no records here. I would say that mostly it was conversation at meetings.

Mr. PECORA. The advisory committee would from time to time confer with the executive heads of unit banks with regard to problems peculiar and exclusive to such unit banks!

Mr. LORD. I would think so.

Mr. PECORA. And at the same time would also discuss with heads of units banks problems that were common to all the unit banks represented by the Group?

Mr. Lord. They might.

Mr. PECORA. What were the functions of the executive committee of the board, generally speaking ?

Mr. LORD. I would say that the executive committee's functions of the Group Co. were what any executive committee of a corporation would be, to act on behalf of the board in the intervals between board meetings.

Mr. PECORA. What were the functions of the operating committee of the board ?

Mr. Lord. The operating committee was very largely an educational committee, Mr. Pecora. It was made up-if you will look at the list-to a great extent of the operating men in the units who had meetings every month, or perhaps more frequently, to discuss such matters as transit and various things dealing with the details of bank operation; and there might be some man selected from that committee who would talk on one particular subject, and then discussion would be had. Whether there are any minutes of those meetings I could not say. Colonel Walsh was chairman of the committee and maybe he kept full minutes; I do not know.

Senator COUZENS. Did that operating committee have anything to do with passing upon loans? Mr. LORD. No, sir. Senator COUZENS. Did the executive committee do that?

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