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DIRECTORS

Henry E. Bodman, Penobscot Building, Detroit, Mich.
Edsel B. Ford, Ford Motor Co., Dearborn, Mich.
John C. Grier, Jr., Penobscot Building, Detroit, Mich.
Sherwin A, Hill, Union Trust Building, Detroit, Mich.
Ernest Kanzler, Penobscot Building, Detroit, Mich.
Robert 0. Lord, Penobscot Building, Detroit, Mich.
Fred T. Murphy, Penobscot Building, Detroit, Mich.
Phelps Newberry, Penobscot Building, Detroit, Mich.
James L. Walsh, Penobscot Building, Detroit, Mich.

OFFICERS

Henry E. Bodman, chairman of the boa rd, Penobscot Building, Detroit, Mich.
Robert O. Lord, president, Penobscot Building, Detroit, Mich.
John C. Grier, Jr., vice president, Penobscot Building, Detroit, Mich.
James L. Walsh, vice president, Penobscot Building, Detroit, Mich.

Phelps Newberry, vice president and treasurer, Penobscot Building, Detroit, Mich.

Lewis K. Walker, secretary, Penobscot Building, Detroit, Mich.
Arthur H. Vogt, assistant treasurer, Penobscot Building, Detroit, Mich.
Robert C. Lehman, assistant secretary, Penobscot Building, Detroit, Mich.

ARTICLE LX

The holders of the stock of this corporation shall be individually and sererally liable (in proportion to the number of shares of its stock held by them respectively) for any statutory liability imposed upon this corporation by reason of its ownership of shares of the capital stock of any bank or trust company.

This corporation reserves and shall have the right from time to time upon the affirmative vote of three fourths of its directors to issue and dispose of all or any of its unissued or increased stock for the purpose of acquiring stock of banks or trust companies, without offering to the stockholders of this corporation for subscription any of the stock so to be disposed of.

In witness whereof we, the parties designated as provided by law by the parties asscciating, as shown under article VII of these articles, for the purpose of giving legal effect to these articles, hereunto sign our names this 9th day of May, A.D. 1929.

HENRY E. BODMAN,
JOHN C. GRIER, Jr.,

ROBERT O. LORD.
STATE OF MICHIGAN,

County of Wayne, 88: On this 9th day of May, A. D. 1929, before me, a Notary Public in and for said County personally appeared Henry E. Bodman, John C. Grier, Jr., and Robert 0. Lord known to me to be the persons named in, and who executed the foregoing instrument, and severally acknowledged that they executed the same freely and for the intents and purposes therein mentioned.

JOSEPH F. WEBB, Jr.,

Notary Public, Wayne County, Michigan. My commission expires November 19, 1929.

This is to certify that at the organization meeting of the incorporators of Guardian Detroit Group, Inc., a corporation to be formed under Act 84, Public Acts of 1921, of the State of Michigan, as amended, held this 9th day of May, 1929, the following resolution was unanimously adopted and that the under: signed was elected to act and did act as Secretary of said meeting:

Resolved, That Henry E. Bodman, John C. Grier, Jr., and Robert 0. Lord be, and they are hereby, designated to sign and acknowledge the Articles of Association of Guardian Detroit Group, Inc., for themselves and for the remainder of the incorporators of said corporation.

* John C. GRIER, Jr., * Secretary of the Organization Meeting of Guardian Detroit Group, Inc."

STOCK EXCHANGE PRACTICES

WEDNESDAY, DECEMBER 20, 1933

UNITED STATES SEXATE,
SUBCOMMITTEE OF THE COMMITTEE ON

BANKING AND CURRENCY,

Washington, D.C. The subcommittee met at 10:30 a.m., pursuant to adjournment on yesterday, in Room No. 301 of the Senate Office Building, Senator Duncan U. Fletcher presiding.

Present: Senators Fletcher (chairman), Gore (substitute for Barkley), Adams (proxy for Costigan), Norbeck, ('ouzens, and Townsend.

Present also: Ferdinand Pecora, counsel to the committee; Julius Silver and David Saperstein, associate counsel to the committee; and Frank J. Meehan, statistician to the committee. The CHAIRMAX. The subcommittee will come to order, please, You may proceed, Mr. Pecora. Mr. PECORA. Mr. Lord, you will resume the stand. Mr. Lord. Yes, sir.

TESTIMONY OF ROBERT 0. LORD, PENOBSCOT BUILDING,

DETROIT, MICH.Resumed

Mr. PECORA. Mr. Lord, do you recall a transaction involving the purchase of a block of about 1,000 shares of the stock of the Grand Rapids National Bank, in the name of Mr. Joseph H. Brewer? Nr. LORD. Very vaguely. Mr. PECORA. How much do you recall of that transaction? Mr. Lord. Practically nothing, Mr. Pecora. Mr. PECORA. Do you recall that there was such a transaction? Mr. Lord. Not as to the exact number of shares, but that there was some stock purchased in the name of Mr. Brewer.

Mr. PECORA. What, if anything, did you have to do with that transaction?

Mr. LORD. I should say very little.
Mr. PECORA. Well, what was that very little!

Mr. LORD. I knew that Mr. Brewer was buying some of the Grand Rapids National Bank stock.

Mr. PECORA. What did you have to do with it! Mr. LORD. In what way, Mr. Pecora ? Mr. PECORA. In any way. Mr. Lord. My recollection is very dim on that transaction, but it took place, as I recall it, in the summer of 1929. Mr. Brewer was at that time connected with the Grand Rapids National Bank. He was very aggressive in the affairs of the bank, very anxious that his bank should become a member of the Group. And I understood that he was purchasing some of the stock. My recollection is that the stock was carried for him by the Guardian Detroit Co.

Mr. PECORA. The Guardian Detroit Co. was the securities affiliate of the Guardian Detroit Bank, wasn't it?

Mr. LORD. Yes, sir.

Mr. PECORA. And you were the president, then, of the Guardian Detroit Bank?

Mr. LORD. It was the security affiliate of the Group. I was then the president of the bank and also of the Group.

Mr. PECORA. And of the Group also?
Mr. LORD. Yes, sir.
Mr. PECORA. Well-

Mr. LORD (continuing). But quite inactive in the securities company. I was vice president of it, as I recall it, and inactive.

Mr. Pecora. Do you recall how much was involved in that transaction in the matter of dollars and cents?

Mr. LORD. No, sir; I do not.

Mr. PECORA. Do you recall that it was in excess of the sum of $850,000?

Mr. LORD. No; I do not recall any figure at all.

Mr. PECORA. Do you recall the circumstances under whicin the Guardian Detroit Co. financed the purchase of that stock for Mr. Brewer?

Mr. LORD. Not in detail. I remember they carried it for him.

Mr. PECORA. Do you recall at whose instance Mr. Brewer purchased the stock?

Mr. LORD. I suppose at his own instance. He was a substantial stockholder at the time in the Grand Rapids National Bank, and I suppose he wanted to acquire additional stock.

Mr. PECORA. At the time of that transaction was the Grand Rapids National Bank one of the unit banks of the group?

Nr. LORD. I would say it was in process of negotiation at the time.

Mr. PECORA. And Mr. Brewer was the president of the Grand Rapids National Bank?

Mr. LORD. I think he was chairman of the board, but am not certain. He and Mr. Waters were associated together. Just what title Mr. Brewer held I do not recall.

Mr. PECORA. But negotiations on behalf of the Group toward acquisition of the Grand Rapids National Bank had progressed to the point where at about the time of this stock transaction it was practically assured that the Group would acquire control of the Grand Rapids National Bank. Is that your recollection?

Mr. LORD. I wouldn't say no, that it was assured, but I would say it was tending favorably in that direction.

Mr. PECORA. Well, all the plans had been completed but not consummated about that time?

Mr. LORD. I am not certain of that, Mr. Pecora.

Mr. PECORA. Do you recall anything more in connection with that transaction than you have just now testified to?

Mr. LORD. As I recall, Mr. Brewer never took up that stock, never was able to, and never paid for it. It therefore belonged to the Guardian Detroit Co.

Mr. Pecora. How long did the Guardian Detroit Co. carry that stock for Mr. Brewer?

Mr. LORD. I do not recall.
Mr. PECORA. Was it a period of more than a year or two?
Mr. LORD. I do not recall the length of time.
Mr. PECORA. Who eventually took up the stock?

Mr. LORD. I would think the Guardian Detroit Co. took up the stock.

Mr. Pecora. And during the time that the Guardian Detroit Co. carried that stock for Mr. Brewer did Mr. Brewer pay interest on the loan?

Mr. LORD. I do not know. Mr. Pecora. Do you recall having had any correspondence with Mr. Brewer in connection with that transaction?

Mr. Lord. I do not recall any personally; no. I might have had, but

Mr. PECORA (interposing). What was that?
Mr. Lord. I say I might have had but I do not recall it.

Mr. Pecora. Well, then, possibly for the purpose of refreshing your recollection, will you look at this paper which I now show you, and which purports to be a photostatic reproduction of a letter addressed by you, under date of August 24, 1929, to Mr. Joseph H. Brewer? Will you look at it and then tell me, first, if you recognize it as a true and correct copy of such letter?

Mr. LORD (after reading the photostat). I would say that that is my letter.

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 letter dated August 24, 1929, addressed to Joseph H. Brewer by Robert O. Lord, was marked " Committee Exhibit No. 15, Dec. 20, 1933", and will be found immediately following where read by Mr. Pecora.)

Mr. PECORA. The letter received in evidence as Committee Exhibit No. 15 of this date, is as follows:

AUGUST 24, 1929.

(Personal) MR. JOSEPH H. BREWER,

Grand Rapids Trust Building, Grand Rapids, Mich. DEAR MR. BREWER: Understanding that there appears to be a movement on the part of outsiders to buy a substantial interest in the Grand Rapids National Bank, and desiring to be of any possible service to Mr. Dudley Waters and his associates in the bank, we are willing to have you buy for us not to exceed

That figure is not clear. I do not know whether that is 1,000 or 1,600 sharesof the stock of the Grand Rapids National Bank, at a price not to exceed $515. a share.

This stock should be bought by you, issued in your name, and endorsed in blank and forwarded to us. We will hold the stock, and you may consider this our commitment for a period of six months from the date of purchase, to return this stock to you or to your order, at its actual cost to us plus interest at the rate of 7% per annum on our investment in the stock.

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