Mr. WILKIN. I beg pardon, Mr. Pecora? Mr. PECORA. What is at the present time your business or occupation? Mr. WILKIN. I am liquidating the Highland Park State Bank and am also employed by Governor Groesbeck, the receiver for the Guardian Detroit Union Group. Mr. PECORA. You are employed by him as such receiver in what capacity and to do what kind of work? Mr. WILKIN. Liquidating those companies that have been spoken about here, as to securities and investments. The CHAIRMAN. Would you call it the work of a conservator? Mr. PECORA. He has employed you to assist him in the work of liquidation? Mr. WILKIN. Yes, sir. Mr. PECORA. Prior to the receivership of the Group Co., were you connected with the Group Co. as an officer, director, or otherwise? Mr. WILKIN. Yes, sir. I was executive vice president of the Guardian Detroit Union Group. Mr. PECORA. Were you a director of it? Mr. WILKIN. Yes, sir. Mr. PECORA. When did you first become a director of it? Mr. WILKIN. I think in 1931. Mr. PECORA. Do you remember what month? Mr. WILKIN. It was around September. Mr. PECORA. Were you also a member of any committee of the board of that bank, or of the group, rather? Mr. WILKIN. Yes, sir; I was a member of-well, I beg pardon, it was in 1930 that I was elected a director, and in 1931 I became a member of the executive committee. Mr. PECORA. At the time you became a director in 1930, or I mean after that time, did you continue to serve as a director until the receivership was ordered? Mr. WILKIN. Yes, sir. Mr. PECORA. And also from the time when you became a member of the executive committee of the board of the group, did you continue to serve as a member of the executive committee until the company was placed in receivership? Mr. WILKIN. Yes, sir; I did. Mr. PECORA. Were you also connected in any capacity with any banking unit of the group? Mr. WILKIN. Latterly I was connected with the Union Guardian Trust Co. Mr. PECORA. In what capacity? Mr. WILKIN. As a vice president. Mr. PECORA. From that time on until when? Mr. WILKIN. I believe I was elected a vice president in October of 1932 and I continued until the bank holiday. Mr. PECORA. Were you also an officer or director of any other banking unit of the group? Mr. WILKIN. I was a director of the First National Bank of Kalamazoo and also of the City National Bank of Battle Creek. Mr. PECORA. You heard the testimony Colonel Walsh gave here in the last half hour, did you? Mr. WILKIN. Yes, sir. Mr. PECORA. You heard the testimony he gave concerning the process by which the Union Industrial Trust & Savings Bank of Flint, which was one of the unit banks of the group, wiped out bills payable amounting to $1,800,000 as of December 31, 1931, did you? Mr. WILKIN. I did; yes, sir. Mr. PECORA. Do you know anything about that transaction? Mr. PECORA. Tell us all about it then. Mr. WILKIN. Well, we were called-that is, our bank was called, on the phone, and I was the operating head of the Union Industrial Bank at that time. Our funds were transferred by telephone from Detroit. We were called and told there was a credit of $600,000 placed in our account, or that it would be placed in our account, at the Guardian- Mr. PECORA (interposing). Who told you that? Mr. WILKIN. I cannot say, but it was a call in the regular course of business. So we reduced our bills payable by $600,000 with this money upon our books. Well, then, when we got the statement of the bank on the day after the first of January, this $600,000 deposit had not gone to our credit. So I immediately tried to get in touch with Patterson, who was the vice president of the group, and the one they told me had arranged this credit. That was at the time that the National Bank of Commerce and the Guardian Detroit Bank consolidated, over that year end. But I could not get Patterson. So I got a fellow by the name of-well, he was a vice president anyway, in charge of the bank's accounts there. So later on in the day he called me and told me that due to the press of the consolidation they had not got this credit through, and to just cancel that transaction. So that is the story about the $600,000. Mr. PECORA. Well, what was the rest of the story, about the $1,800,000 bills payable that were taken up at that time? Mr. WILKINS. Oh, no, Mr. Pecora. Bills payable were not eliminated at all at that time. They still showed 12 million dollars bills payable after that entry. Mr. PECORA. I show you photostatic reproductions of certain documents, four in number. Will you look at them and tell us if they relate to this transaction, involving this certificate of deposit of $600,000 you have just alluded to? Mr. WILKIN. All right. Mr. PECORA. I am handing them to you to look at. Mr. WILKIN (after looking at the papers). I would say they did, Mr. Pecora, although it is not my writing. Mr. PECORA. What did you say? Mr. WILKIN. It is not my writing, but I would say that is correct. Mr. PECORA. Will you just keep them for a moment as I want to refer to them. Mr. WILKIN. All right. Mr. PECORA. Of what records or documents are these photostatic reproductions? Mr. WILKIN. They are reproductions of items in the files of the Union Industrial Bank at Flint. The CHAIRMAN. What kind of items? Certificates of deposit and so on? Mr. WILKIN. No, sir. These are debit and credit slips. Mr. WILKIN. Yes, sir. Mr. PECORA. Mr. Chairman, I offer them in evidence, and ask they may be marked by consecutive numbers as separate exhibits. The CHAIRMAN. Let them be admitted and made a part of the record. (The four photostats were marked as follows: "Committee Exhibit No. 98, Jan. 19, 1934"; "Committee Exhibit No. 99, Jan. 19, 1934"; Committee Exhibit No. 100, Jan. 19, 1934"; "Committee Exhibit No. 101, Jan. 19, 1934" and are as follows:) COMMITTEE EXHIBIT NO. 98, JANUARY 19, 1934 UNION INDUSTRIAL TRUST AND SAVINGS BANK, Flint, Michigan, Date December 31, 1931. Debit Guardian Detroit Bank. In payment of C.D. issued today, $600,000.00. COMMITTEE EXHIBIT NO. 99, JANUARY 19, 1934 UNION INDUSTRIAL TRUST AND SAVINGS BANK, Credit Demand Crdt. Written, $600,000.00. COMMITTEE EXHIBIT NO. 100, JANUARY 19, 1934 Date December 31, 1931. Debit bills payable. Partial payment to Guardian Detroit Bank to apply on our notes, $600,000.00. COMMITTEE EXHIBIT NO. 101, JANUARY 17, 1934, UNION INDUSTRIAL TRUST AND SAVINGS BANK, Credit Guard an Detroit Bank Applied on our note, $60,000.00. Mr. WILKIN. Mr. Pecora, I might say, or I should like to say, that I have a memorandum here that I procured from the Guardian Bank, which is in the files of the Industrial Bank, in the Guardian. Mr. PECORA. Will you show it to me? Mr. WILKIN. Yes, sir. Mr. PECORA. Mr. Wilkin, the memorandum you have produced was made by whom? Mr. WILKIN. Jacobs was his name. Mr. PECORA. W. P. Jacobs? Mr. WILKIN. Yes, sir. Mr. PECORA. Who was he? Mr. WILKIN. He was the vice president in charge of banks and bankers matters in the National Bank of Commerce. Mr. PECORA. When did this memorandum come into your possession? Mr. WILKIN. I would say 60 days ago. Mr. PECORA. And it came into your possession by virtue of your employment by Governor Groesbeck as receiver of the group? Mr. WILKIN. No, sir; it did not. Mr. PECORA. How did it come into your possession? Mr. WILKIN. My secretary received it from one of the office boys of the Guardian. Mr. PECORA. Of the Guardian National Bank of Commerce? Senator COUZENS. How did the office boy get it? Mr. WILKIN. I suppose he copied it out of the files. Mr. PECORA. He did not do that of his own initiative, did he? Mr. WILKIN. Well, he did not do it on mine. Mr. PECORA. Do you know how he came to do it? Mr. WILKIN. No, sir; I do not, unless my secretary asked him to do it. That was a Mr. PECORA (interposing). Can you suggest any reason why your secretary should have asked this office boy to do that? Mr. WILKIN. Yes; I can. Mr. PECORA. Give it to me. Mr. WILKIN. There was some discussion about this item in Flint. They had a grand jury investigation Mr. PECORA (interposing). Who took part in that discussion? Mr. PECORA. And who was that? Mr. WILKINS. It was Strassler, the fellow who initialed these debit slips here. So I was out of town when this happened, and he went up there and came back and told my secretary what had happened at that investigation, and Mr. PECORA (interposing). What investigation do you mean, now? Mr. WILKIN. The investigation in Flint. They had investigated, apparently, this bank at Flint, with this 1-man grand jury. Mr. PECORA. Who made that investigation? Mr. WILKIN. I think it was Judge Black. Now, I am not certain about that. I never was called. Mr. PECORA. Go ahead and complete your answer. Mr. WILKIN. So he returned, and I was out of town, and he told my secretary what he had been questioned about up there. He is the young fellow that I took to Flint with me when I went up there after that big defalcation in that bank. He came back and reported what they had asked him, reported to my secretary. And she was formerly Covington's secretary in the Guardian National Bank. At any rate, she knew or found out that there was such a memorandum in the files of the Guardian. Mr. PECORA. By "she" do you mean your secretary? Mr. WILKIN. Yes, sir. Mr. PECORA. Go ahead. Mr. WILKIN. And she asked this young fellow, whom she knew and whom I didn't know, to get this copy of it for her. And she turned it over to me. Senator COUZENS. Was he working in the bank? Mr. WILKIN. I don't know, Senator Couzens. I imagine he must have been in order to get this. Mr. PECORA. Will you tell the committee the substance of what your secretary told you? I mean about how she had learned about the discussion that you have referred to, and about the investigation. Mr. WILKIN. Well, she told me that while I was gone the deputy sheriff came down and took Strassler out of the Trust Co. and back to Flint to appear before the investigation. Senator COUZENS. Do you mean the grand jury investigation? Mr. WILKIN. Yes, sir. Senator COUZENS. Was that a grand jury investigation or some other kind of investigation? Mr. WILKIN. I don't know. Mr. PECORA. You are not referring to the 1-man grand jury investigation held in Detroit, are you? Mr. WILKIN. No, sir. Mr. PECORA. You are referring to a grand jury investigation held over in Flint? Mr. WILKIN. Yes. Senator COUZENS. Do you mean to say to me that you don't know whether that grand jury proceeding was open or closed? Mr. WILKIN. I don't know; no, sir. Mr. PECORA. Go ahead and complete your statement of what your secretary told you about the matter. Mr. WILKIN. Well, she wanted to see, or she asked this boy to look at, the files over in the bank, to see if there was anything there concerning this matter. And he apparently got this out of the files and gave it to her. That is all I know about it. Senator COUZENS. That isn't the original, is it?. Mr. WILKIN. No, sir; that is a copy. Mr. PECORA, I am going to offer in evidence the document produced by the witness, which is a copy of what this office boy gave your secretary; is that it? Mr. WILKIN. Yes, sir. Mr. PECORA, Mr. Chairman, I offer it. The CHAIRMAN. Let it be admitted, and made a part of the record. (The memorandum dated Jan. 3, 1932, was marked "Committee Exhibit No. 102, Jan. 19, 1934, and will be found immediately following where read by Mr. Pecora.) Mr. PECORA. The memorandum, which is typewritten and unsigned, reads as follows: W.P.J. JANUARY 3, 1932. Mr. H. R. Wilkin telephoned today regarding a deposit of $600,000 which we were supposed to make with him over the year-end in the form of a certificate of deposit. I discussed the matter with Mr. B. K. Patterson of the Guardian Detroit Union Group, Inc., and it seems that due to the confusion incidental to the consolidating of the Guardian Detroit Bank and the National Bank of Commerce, the instructions which he forwarded to us were mislaid. Due, however, to the fact that it was to be a transaction of a few days' duration it was decided that, rather than going to the trouble of making out a certificate of deposit and adjusting the entries on our books, the transaction would be better concluded by the Union Industrial Trust & Savings Bank of Flint making the necessary entries on their books. Now, Mr. Wilkin, does this memorandum, which you say was prepared by Mr. Jacobs, and whose initials are "W. P. J." confirm, according to your recollection of the telephone conversation alluded to therein, and to which you were a participant? Mr. WILKIN. Yes, sir. |