gotten what it was. I read something in the paper about Dr. Davis how me having written a letter or sent a telegram down here to you gentlemen.

here p Ow, this s

have a se lot of the

The CHAIRMAN. Yes.

Senator COUZENS. He wrote a letter to the chairman of the committee.

Mr. PECORA. Judge Murfin, did you find as a member of this that the special committee after inquiring into the confidential memorandum of Mr. Verhelle, that substantially all the statements appearing as statements of fact were warranted on the basis of the actual facts?

Mr. MURFIN. Substantially that is an accurate statement. But the difficulty with that was, as we lawyers know, they were half truths and quarter truths. They were statements it would have been so Is easy to have checked up and verified and thereby showed a complete absence of wrongdoing in any particular. That was the reason we thought there was something back of this report.

Senator COUZENS. Did you find whether there was anything back of the report?

Mr. MURFIN. I think nearly everything in the report was true, but it did not tell one third of it. That was the difficulty.

Senator COUZENS. Why did you think there was animus back of the report?

Mr. MURFIN. Because it was such an unfair report, such an unfair comment. He had access to all the facts, and yet he only put the worst foot forward, just as I take it an investigating committee does sometimes.

Senator COUZENS. Well, why didn't you call in Mr. Verhelle and ask him about it?

Mr. MURFIN. Well, we had the chief auditor of the bank. He knew more about it than anybody.

Senator COUZENS. I know, but he had not made the report.
Mr. MURFIN. That is true.

Senator COUZENS. It seems to me if I had been on the committee, I would have asked what prompted Mr. Verhelle to make such a statement as you allege he made.

Mr. MURFIN. Well, we did not do it. made. It never occurred to any of us. can give you.

The suggestion was never
That is the only answer I

Mr. PECORA. Were you referring to this committee when you said. just now:

Just as I take it an investigating committee does sometimes?

Mr. MURFIN. Partly so; yes.

Mr. PECORA. What basis have you for that statement?

Mr. MURFIN. Because I think this committee so far has just produced the worst side of our picture instead of the good side of the picture.

Mr. PECORA. Well, let me tell you, Judge Murfin, if you are not familiar with the complete record of these hearings, that there has scarcely been a witness examined before the committee who has not been asked, as Mr. Stair was this afternoon in your hearing

Mr. MURFIN (interposing). I can hear you all right, Mr. Pecora.
Mr. PECORA. Yes; I know it, and I want to make sure that you

can.

'

Mr. MURFIN. I can hear you all right.

Mr. PECORA, Who has not been asked before he was finally cused, if there was any statement he wanted to make to the mittee, or anything further that he wanted to bring to the noti of the committee, without the necessity of being questioned spearcally about it?

Mr. MURFIN. All right.

Mr. PECORA. And that wherever a witness has indicated a desir to lay other matters before the committee he has been accommodate in that desire?

Mr. MURFIN. That does not change my opinion a particle, not: particle.

Mr. PECORA. And the committee has been open to anybody, your self included, to present any evidence that you may want to present Judge Murfin, with regard to the situation that the committee is inquiring into now.

and

Mr. MURFIN. I shall cheerfully answer any of your questions, an give you any information I have that you want that might be helpful.

Mr. PECORA. Do you think you have more information with regar to the matters I have questioned Mr. Stair about this afternoon than he showed?

Mr. MURFIN. Please do not ask me to answer that question. It is not fair to ask one witness to characterize the testimony of any other witness and, as you know, it is not allowed in court.

Mr. PECORA. Do you think it is fair of you to characterize the conduct of the investigation by this committee with the apparently limited knowledge you have of the record made here?

Mr. MURFIN. I have a pretty fair knowledge of this record.
Mr. PECORA. Are you familiar with the entire record?
Mr. MURFIN. I am pretty familiar.

Mr. PECORA. Do you know anything in the record that has been presented so far that is not in accordance with the facts? Mr. MURFIN. I am not going into that.

Mr. PECORA. By the way, Judge Murfin, did you, as a member of this special investigating committee that passed upon Mr. Ver helle's private and confidential memorandum, ascertain the facts and circumstances with regard to the transaction referred to therein that related to the discounting of a note by the bank, a note that was dated 3 weeks after the death of the maker of the note!

Mr. MURFIN. I haven't any recollection of that whatever. Mr. PECORA. You have no recollection of it at all? Mr. MURFIN. No; I haven't any recollection of it whatever. Mr. PECORA. Well, it is referred to in some detail in Mr. Verhelle's private and confidential memorandum, which you were to inquire into.

supposed Mr. MURFIN. Which officer did that-Mr. Bodde or Mr. Sweeny! Mr. PECORA. It is included in Mr. Verhelle's private and confidential memorandum.

Mr. MURFIN. Well, I do not know anything about that. I did not get into anything except as to Bodde and Sweeny.

Mr. PECORA. Did you read the entire private and confidential memorandum of Mr. Verhelle?

ht.

before

wanted

Mr. MURFIN. I certainly did, and tried to get myself thoroughly prepared to conduct a fair and impartial investigation of the facts. Mr. PECORA. You do not recall having inquired into that particular anted to item in Mr. Verhelle's private and confidential memorandum, regardof being the discounting by the bank of a note about 3 weeks after the death of the maker of the note?

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Mr. MURFIN. That could not have been in the Bodde or Sweeny part, was it?

Mr. PECORA. It was in Mr. Verhelle's private and confidential memorandum.

Mr. MURFIN. Well, outside of Bodde and Sweeny, I do not remember about it.

Senator COUZENS. Judge Murfin, you testified a while ago that you were familiar with all of the testimony before this committee.. Mr. MURFIN. Well, I am. I read that in the paper. But I do not remember the details of it. And I do not think I said I was familiar with all of it. I said I had been following it very carefully.

The CHAIRMAN. That is one trouble the committee has to deal with, when they get a witness on the stand he does not know anything.

Mr. MURFIN. Well, you still have that trouble.

The CHAIRMAN. Yes. We are trying to get the facts, is all.

Mr. PECORA. Yudge Murfin, is there any evidence you would like to bring to the notice of the committee pertaining to the subject matter of this inquiry?

Mr. MURFIN. I would rather not, for if I started out I would sit here for a week. And I think the sooner this thing is stopped the happier my friends in Detroit are going to be. I do not want to contribute to their unhappiness by stirring things up by a long statement or a short statement or anything else. I would rather not. Mr. PECORA. You say you would rather not?

Mr. MURFIN. I would rather not.

Mr. PECORA. You are invited to do it if you wish.

Mr. MURFIN. I appreciate the invitation, and if you do not mind I will not accept it.

Mr. PECORA. By the way, Judge Murfin, you were one of the stock. holders of the Detroit Bankers Co., weren't you?

Mr. MURFIN. I am sorry to say I was, and much larger than I would have liked.

Mr. PECORA. You were a director of it?

Mr. MURFIN. Not of the Detroit Bankers Co.-now, wait a minute. I was a director of the Detroit Bankers Co. for, I should say, less than a month.

Mr. PECORA. When was that?

Mr. MURFIN. At the annual meeting in 1933, in order to reduce the size of the board of the First National Bank and not hurt the feelings of some charming directors who had been bank directors for a great many years, they took all of the directors of the First National Bank and made them directors of the Detroit Bankers Co., and in that way I became a director of the Detroit Bankers Co. We had two meetings-one meeting at which we elected officers and the next meeting we voted for voluntary dissolution. So that my connection with the Detroit Bankers Co. was practically nil.

Mr. PECORA. You are familiar with the fact, as a stockholder of the Detroit Bankers Co., that the certificates of stock issued by that company bore upon them

Mr. MURFIN (interposing). Yes. I am very familiar with that. It was article 9.

Mr. PECORA. Article 9 of the articles of association or incorpora tion of the company regarding the statutory liability— Mr. MURFIN (interposing). I am very familiar with that. Mr. PECORA (continuing). Of the stockholders of the Detroit Bankers Co.

Mr. MURFIN. Yes; I am very familiar with that.

Mr. PECORA. You are identified at the present time in a professional capacity, not as a party in interest, with litigation now pending in the courts of Michigan, in which the stockholders of the Detroit Bankers Co. are seeking to avoid the liability referred to on those certificates of stock.

Mr. MURFIN. I have been asked by my associates in that litigation to try that case, and that is one reason I am anxious to get back home and complete my preparation of it. I know that case, I think, by heart now. And we are going to win it.

Mr. PECORA. And you are going to win it?

Mr. MURFIN. We are going to win it.

Mr. PECORA. And by such victory deprive the depositors of those banks of the protection that the statute-at least it was thoughtgave them.

Mr. MURFIN. Ninety odd percent of the depositors are stockhold ers, and they will be more benefited if I win my case than if I should lose it.

Mr. PECORA. Ninety-two percent of the depositors are stockholders of the Detroit Bankers Co.?

Mr. MURFIN. No, sir; of the First National Bank. This suit is not against the stockholders of the First National Bank. It is against the stockholders of the Detroit Bankers Co.

Mr. PECORA. I know that.

Mr. MURFIN. And you would not ask me to try my lawsuit with you here, would you?"

Mr. PECORA. I am neither asking you nor suggesting it, Judge Murfin. I merely wanted to show your interest.

Mr. MURFIN. I am very much interested. Yes; I am very much

interested.

Mr. PECORA. All right. Now, is there anything more you can tell this committee with regard to the investigation that you and Mr. Mills and Mr. Newberry and Mr. Butler and Mr. Pipper made of the allegations and criticisims contained in Mr. Verhelle's private and confidential memorandum?

Mr. MURFIN. I have not. We tried to be as thorough as we could. We had the junior officers before us, and the records and a lot of papers, and we made a report that stated our conclusions. The CHAIRMAN. And you were all personal friends of those people! Mr. MURFIN. Yes, sir; personal friends or business friends is the better way to put it, Senator Fletcher. Here were men, esteemed at home, against whom nothing of any kind before had ever been said. These men had risen from the ranks, from the bottom up,

the facts and you cannot rise from the bottom up unless you are a pretty ificates of a high-grade man. And these charges on their face, although they sounded very serious, yet on investigation were found to have no foundation in fact.

I am rer

es of associa tatutory

Mr. PECORA. Judge Murfin, it will be necessary for you to appear again tomorrow, I am sorry to say.

Mr. MURFIN. So am I. And I hope when we are through tomor

ry far row we won't be sorry again.

Mr. PECORA. I am only sorry because you have to appear again tomorrow.

Mr. MURFIN. Very well. I will be here.

Mr. PECORA. Because you wanted to get away today, and I should like to have accommodated you.

Mr. MURFIN. I will be here.

The CHAIRMAN. The subcommittee will now stand adjourned until 10:30 tomorrow morning.

(Thereupon, at 4:50 p.m., Thursday, Feb. 1, 1934, the subcommittee adjourned until 10: 30 the following morning.)

COMMITTEE EXHIBIT NO. 130, FEBRUARY 1, 1934

EXHIBIT K-1,-ANNUAL REPORT DETROIT BANKERS COMPANY, DETROIT,
DECEMBER 31, 1932

Combined statement of condition of the banking units at close of business,
December 31, 1932

Cash on Hand and in Banks-

RESOURCES

United States Government Securities.......
Other Bonds and Securities--
Stock in Federal Reserve Bank.

Loans, Discounts and Advances

Loans Secured by Mortgages....

Banking Offices and Real Estate..
Accrued Income Receivable............

Customers' Liability on Acceptances and Letters of Credit_.

$80, 643, 226. 09

43, 044, 445. 27 40, 042, 561. 41 1,882, 500.00 178, 851, 033. 13 172, 812, 455, 90 36, 807, 720. 50 4, 758, 284. 68 894, 576. 09

$559, 736, 802.98

$29, 910, 000. 00 29, 140, 000. 00 3, 329, 267. 03 2, 239, 730. 82 901, 065.16 895,232.00 8, 588, 140. 00

Total Liabilities--

484, 733, 367.97

559, 736, 802.98

JANUARY 9, 1933.

To the Stockholders of the Detroit Bankers Company: The year 1932, just passed, is the third full year after the economic upset of 1929. In it, individuals and businesses generally have felt the accumulated effects of three years of depression. Your Company, as banker for many hun