Exhibit No. 54, Dec. 22, 1933 ", and will be found printed in full at the end of today's transcript.)

Mr. PECORA. While you are still on the stand, Mr. Lord, I show you this other document which purports to be a photostatic reproduction of the annual report for the year 1931 filed by the Guardian Detroit Union Group, Inc., with the Michigan Securities Commission, in accordance with the laws of the State of Michigan, and ask you if you recognize it to be a true and correct copy of such report. Mr. LORD. I would judge so. It has my signature.

Mr. PECORA. The signature appearing thereon reading "Robert 0. Lord" is in your handwriting?

Mr. LORD. Yes, sir.

Mr. PECORA. That is, it is a reproduction of your handwriting? Mr. LORD. It is.

Mr. PECORA. I offer it in evidence.

The CHAIRMAN. Let it be admitted.

(Photostatic reproduction of Annual Report of Guardian Detroit Union Group, Inc., for the year 1931, filed with the Michigan Securities Commission, was received in evidence, marked "Committee's Exhibit No. 55, Dec. 22, 1933 ", and will be found printed in full at the end of this transcript.)

Senator CouZENS. What did it show?

Mr. PECORA. It showed a deficit of $288,930.33.

I want to show you this other document that purports to be a photostatic copy of the annual report for the year 1932 filed by and on behalf of the Guardian Detroit Union Group, Inc., with the Michigan Securities Commission in accordance with the laws of the State of Michigan. Will you look at it and tell me if you recognize it to be a true and correct copy of such a report so filed?

Mr. LORD. That is not my signature.

Mr. PECORA. Is that a true and correct copy of the report?
Mr. LORD. I assume it is; I do not know.

Mr. PECORA. I offer it in evidence.

The CHAIRMAN. Let it be admitted.

(Photostatic copy of Annual Report for the year 1932 filed by the Guardian Detroit Union Group, Inc., with the Michigan Securities Commission, was received in evidence, marked "Committee Exhibit No. 56, Dec. 22, 1933," and will be found printed in full at the end of this transcript.)

The CHAIRMAN. Whose signature is it, Mr. Lord?

Mr. LORD. I have no idea.

Senator ADAMS. Whose name is it?

Mr. LORD. My name is signed, but it is not my signature.

Mr. PECORA. There is a signature on this report reading "Robert O. Lord" over the printed word "President", and also a signature on this report reading " C. H. Haberkorn, Jr." over the printed word "Secretary." You say the signature reading "Robert O. Lord" is not in your handwriting?

Mr. LORD. Yes.

Mr. PECORA. Do you recall signing the annual report?

Mr. LORD. I do not recall signing it. I may have signed an annual report, but I did not sign that. That is not my writing.

"C. H.

Mr. PECORA. Do you recognize the signature reading Haberkorn, Jr.," as being in the handwriting of Mr. Haberkorn? Mr. LORD. It is not.

Mr. PECORA. Do you know in whose handwriting the signature reading "Robert O. Lord" is?

Mr. LORD. I do not.

Mr. PECORA. Or the signature reading "C. H. Haberkorn, Jr."? Mr. LORD. No, sir; I do not.

Senator ADAMS. Did you authorize anybody to sign your name

to those documents?

Mr. LORD. I don't recall it. That may possibly be an office copy that was simply filed.

Mr. PECORA. This we obtained from the county clerk's office, where the original is on file.

Mr. LORD. That is not my signature.

Senator ADAMS. Is that a verified signature?

Mr. PECORA. Yes, sir. This report is sworn to under date of February 28, 1933. I am referring now to the 1932 report. It is sworn to before Pauline P. Mosher, notary public. Do you know Pauline P. Mosher?

Mr. LORD. Mrs. Mosher, I believe, was Mr. Haberkorn's secretary, but that is not my signature, nor is it Mr. Haberkorn's signature. Mr. PECORA. Do you recognize any of the handwriting of those signatures?

Mr. LORD. May I look at it again? [After examining paper.] I do not know Mrs. Mosher's signature, so I could not say I recognize it.

Mr. PECORA. You know that under the laws of the State of Michigan you, as president of this Group, were required to sign and verify and file with the commission, and in the county clerk's office, an annual report?

Mr. LORD. I have always understood so.

Mr. PECORA. Do you recall having signed, sworn to, and caused to be filed an annual report, as president of the Group, for the year 1931?

Mr. LORD. I do not recall one way or the other.

Mr. PECORA. What is that?

Mr. LORD. I do not recall it; no.

The CHAIRMAN. Can you look at that report and signify whether now you think it is a correct report?

Mr. LORD. I do not know, Senator. I assume it is a photostatic copy of the record that was filed.

Mr. PECORA. This report, if the committee please, reports a deficit for the Group for the year 1932 of $714,331.26.

Now, have you any reason to doubt the correctness of the statement appearing on committee's exhibit 56, which is the annual report for 1932 filed on behalf of the Group, and which shows a deficit of $714,331.26 for the year 1932?

Mr. LORD. NO; I have not any reason to doubt it.

Mr. PECORA. Have you reason to doubt the accuracy of the figures shown on the annual report for 1931, which is marked "Committee's Exhibit No. 55", and which reports a deficit of $288,930.33 for the year?

Mr. LORD. No; I have no reason to doubt it.

Mr. PECORA. Have you any reason to doubt the accuracy of the statement shown in the annual report for 1930, which is marked "Committee's Exhibit No. 54?"

Mr. LORD. No.

Mr. PECORA. And which reports a deficit for that calendar year of $39,387.57.

Mr. LORD. No; I have not any reason to doubt it.

Mr. PECORA. Mr. Lord, were any of these deficits reported to the stockholders of the Group in any report or statement issued by the Group to them?

Mr. LORD. I would have to check that very carefully. I would say not.

Mr. PECORA. Why not? Why wasn't it done?

Mr. LORD. Mr. Pecora, I would have to go over the entire statement and check it to be able to answer it properly. The figures for the annual report, and the figures of that report those that I signed-were prepared by the Group's accounting department, competent men, and I had no reason to question the accuracy of the figures.

Mr. PECORA. What figures are you talking about now, the figures shown in the printed annual reports issued to stockholders?

Mr. LORD. I am talking about both the figures in the printed annual report and the figures in the report to the State of Michigan. Senator COUZENS. After signing the report to the State commission showing a loss, when you came to sign the 1930 annual report, would you not notice that there was nothing shown in the report to indicate that the Group had suffered a loss?

Mr. LORD. I do not recall the date of that report for 1930.

Mr. PECORA. Are you referring to the report filed with the Michigan Securities Commission?

Mr. LORD. Yes. I do not recall the date of it.

Senator COUZENS. It was for the calendar year, was it not?

Mr. PECORA. I will give you the date of it. [After examining papers.] I will have to take that statement back. The report does not have any date, nor does it appear to have been sworn to, for the year 1930. That is another thing that somewhat mystifies me, although the printed form furnished by the Michigan Securities Commission required to be filled out, requires its being sworn to by the officers signing it. Do you know why you did not swear to the 1930 report filed with the Michigan Securities Commission?

Mr. LORD. I have no idea. The reports are prepared in the accounting department, and brought to me for signature, and I sign them.

The CHAIRMAN. This report, exhibit 56, was the last you made. Mr. LORD. I did not hear you, Senator.

The CHAIRMAN. This exhibit no. 56

Mr. LORD. What year is that?

The CHAIRMAN. It is sworn to the 27th day of February 1933. Mr. LORD. That was the last report that was made so far as I know.

Mr. PECORA. Let me read this portion of the form of the printed annual report for 1930, which the Michigan Securities Commission

required to be signed and sworn to by the president and secretary of your company [reading]:

We, the president and secretary of the Guardian Detroit Union Group, Inc., do solemnly swear that the above statement is true to the best of our knowledge and belief, and that this report has been carefully filled out and fully and correctly exhibits the true state of the several matters contained, as shown by the books of the company.

You signed that report immediately under that portion of the statement that I have read to you. When you signed it, did you know the report to correctly exhibit the true state of the several matters that are set forth in the report?

Mr. LORD. I assumed it did.

Mr. PECORA. The form of the oath required to be taken, or the form of verification, rather, required by this form

-

Mr. LORD. To the best of my knowledge and belief it was a correct statement, Mr. Pecora.

Mr. PECORA. Do you know why you did not swear to it?

Mr. LORD. I have not any recollection. There certainly was no intention to avoid swearing to it, not the slightest.

Mr. PECORA. I notice, from exhibit no. 55, that the annual report for 1931, which you say was signed by you, likewise was not sworn to, although the form required that it be sworn to.

Mr. LORD. There was not any reason why it should not have been sworn to, and I do not know why it was not.

Mr. PECORA. I notice that the report for 1932, which bears your name and Mr. Haberkorn's name as secretary-which signatures you say are not the signatures either of yourself or Mr. Haberkornis sworn to, although not signed by you.

Mr. LORD. I have not any idea how it was done, because I did not sign it.

Mr. PECORA. Did you have any attorney or attorneys who prepared these reports for filing with the Michigan Securities Com

mission?

Mr. LORD. I assume the reports are prepared, or were prepared in the accounting department.

Mr. PECORA. Were the formalities of the filing of these reports and the execution by its executive officers, supervised or attended to by attorneys for the company or for you?

Mr. LORD. I do not recall whether they were in those cases or not. Mr. PECORA. I ask you again what I asked you a few minutes ago. Why was not the deficit of $39,387.57 that is shown in the annual report of your group filed with the Michigan Securities Commission, reported to the stockholders of the group?

Mr. LORD. Mr. Pecora, I would have to study the annual report for 1930 and check it with the figures in order to explain the reason why it was not reported.

Senator COUZENS. Does that deficit occur after dividends or before dividends?

Mr. LORD. I do not know, Senator. I would have to consult the officers

Senator COUZENS. May I ask, Mr. Pecora, if that statement filed with the Michigan Securities Commission, showing a deficit of some $39,000, was

Mr. LORD. That is after dividends.

Senator COUZENS. After dividends?

Mr. LORD. Yes.

Senator COUZENS. You said previously that you did not know. Mr. LORD. I did not understand your question. It was after dividends.

Mr. PECORA. It is after dividends, apparently, because the report shows on its face that dividends for the year 1930 were paid in the aggregate sum of $4,930,991.28.

Senator COUZENS. So, the payment of that dividend created a deficit?

Mr. PECORA. Yes.

Senator COUZENS. Does the report show any figures as to what the earnings were of that year?

Mr. PECORA. It shows income as follows: Interest and discount, $39,905.07; dividends received or accrued, $5,123,372.60; profits on sales of securities, $16,796.88. As against those items of income, the following expense items are shown: Miscellaneous expense, $67,155.84; interest paid $121.88; insurance, $1,039.56; stationery, printing, and office supplies, $17,942.26;advertising, $39,900.32; salaries, $86,575.95; taxes, other than Federal income, $75,735.03; dividends, common stock, $4,930,991.28; making a total of expenses, and so forth, of $5,219,462.12.

Mr. LORD. Mr. Pecora, may I try to explain? So far as my understanding is concerned, in the matter of the signatures on these reports, if I understand it, the original report is sent to Lansing, and these office copies which you have here, photostats, I believe, are the ones that are filed in the Detroit office, and I believe that if you go to the Lansing office you will find the report in complete and proper form, so far as the signatures and acknowledgments are concerned. That is the only explanation I could give for those two signatures, which are neither mine nor Mr. Haberkorn's.

Mr. PECORA. That is a plausible explanation, and probably the correct explanation.

Mr. LORD. I think it is the correct explanation.

Senator COUZENS. Would you please explain what you mean in this report by "dividends received or accrued "? are accrued after the declaration, or before?

You mean they

Mr. LORD. Senator, I would have to ask one of the accountants about that. My guess would be that they were all dividends received.

Senator COUZENS. Can someone here explain to me what "dividends accrued means in that report?

TESTIMONY OF W. A. EUBANK, DETROIT, MICH.

The CHAIRMAN. You solemnly swear that you will tell the truth, the whole truth, and nothing but the truth, regarding the matters now under investigation by the committee. So help you God. Mr. EUBANK. I do.

Mr. PECORA. Just one or two preliminary questions, Mr. Eubank Were you at any time connected with the Guardian Detroit Union Group, Inc.?

Mr. EUBANK. Yes, sir; from about August of 1930 until along in the summer of this year.