HEARINGS

BEFORE THE

COMMITTEE ON BANKING AND CURRENCY

UNITED STATES SENATE

SEVENTY-THIRD CONGRESS

SECOND SESSION

ON

S.Res. 84

(72d CONGRESS)

RESOLUTION TO INVESTIGATE PRACTICES OF STOCK

EXCHANGES WITH RESPECT TO THE BUYING AND

SELLING AND THE BORROWING AND LENDING

OF LISTED SECURITIES

AND

S.Res. 56 and S.Res. 97

(73d CONGRESS)

RESOLUTIONS TO INVESTIGATE THE MATTER OF BANKING

OPERATIONS AND PRACTICES, TRANSACTIONS RELATING TO

ANY SALE, EXCHANGE, PURCHASE, ACQUISITION, BORROW-

ING, LENDING, FINANCING, ISSUING, DISTRIBUTING, OR

OTHER DISPOSITION OF, OR DEALING IN, SECURITIES OR

CREDIT BY ANY PERSON OR FIRM, PARTNERSHIP, COMPANY,

ASSOCIATION, CORPORATION, OR OTHER ENTITY, WITH A

VIEW TO RECOMMENDING NECESSARY LEGISLATION, UNDER

THE TAXING POWER OR OTHER FEDERAL POWERS

PART 10

Guardian Detroit Union Group

JANUARY 5 TO JANUARY 23, 1934

Printed for the use of the Committee on Banking and Currency

COMMITTEE ON BANKING AND CURRENCY

DUNCAN U. FLETCHER, Florida, Chairman

CARTER GLASS, Virginia

PETER NORBECK, South Dakota

ROBERT F. WAGNER, New York

PHILLIPS LEE GOLDSBOROUGH, Maryland

ALBEN W. BARKLEY, Kentucky

JOHN G. TOWNSEND, JR., Delaware

ROBERT J. BULKLEY, Ohio

FREDERIC C. WALCOTT, Connecticut

THOMAS P. GORE, Oklahoma

ROBERT D. CAREY, Wyoming

EDWARD P. COSTIGAN Colorado

JAMES COUZENS, Michigan

ROBERT R. REYNOLDS, North Carolina FREDERICK STEIWER, Oregon

JAMES F. BYRNES, South Carolina HAMILTON F. KEAN, New Jersey

JOHN H. BANKHEAD, Alabama

WILLIAM GIBBS MCADOO, California

ALVA B. ADAMS, Colorado

WILLIAM L. HILL, Clerk

R. H. SPARKMAN, Acting Clerk

SUBCOMMITTEE ON STOCK EXCHANGE PRACTICES

DUNCAN U. FLETCHER, Florida, Chairman

CARTER GLASS, Virginia

PETER NORBECK, South Dakota ?

ALBEN W. BARKLEY, Kentucky 1 JOHN G. TOWNSEND, JR., Delaware

EDWARD P. COSTIGAN, Colorado JAMES COUZENS, Michigan

ALVA B. ADAMS, Colorado

1 Alternate, Thomas P. Gore, Oklahoma.

? Alternate, Phillips Lee Goldsborough, Maryland.

CONTENTS

PART 10

Blair, Frank W., Detroit, Mich., president of the Union Joint-Stock Land Page

bank of Detroit..

4759, 4797

Bodman, Henry E., Detroit, Mich.

4965

Bryan, Charles A., 1209 Federal Reserve Building, Chicago, Ill_

4707

Covington, Harry S., New York, N.Y.

4904, 4962

Ford, Edsel B., President, Ford Motor Co., Dearborn, Mich..

4655, 4677

Higbie, Carlton M., investment broker, Detroit, Mich..

4924, 1934

Kanzler, Ernest, 2501 Iroquois Ave., Detroit, Mich-

4587, 4624

Leyburn, Alfred P., Lakeshore Hotel, Cleveland, Ohio; chief national

bank examiner, Fourth Federal Reserve District -- 4615, 4618, 4625, 4641, 4699
Longley, Clifford B., Grosse Pointe Farms, Mich.

4807, 4823, 4860
Loru, Robert O., 3974 Penobscot Building, Detroit, Mich.-

5026
JcKee, John K., Chief of Examiners' Division, R.F.C., Washington,
D.

4722, 4731
Jott, Charles S., Flint, Mich..

4877, 4887
Walsh, James L., Detroit, Mich..

4989
Wilkin, Herbert R., Detroit, Mich---

5017

EXHIBITS-GUARDIAX DETROIT UNION GROUP

[Italics indicate page on which exhibit was admitted into the record; roman type,

exhibit printed]

65. Photostat of letter on letterhead of Second National Bank & Trust

Co. of Saginaw, dated Apr. 28, 1932, from R. Perry Shorts to Ernest

Kanzler---

4604

66. Photostat of letter on letterhead of Guardian National Bank of

C'emmerce of Detroit, dated Apr. 27, 1932, from Ernest Kanzler

to R. Perry Shorts---

4605

67. Letter on letterhead of Guardian Detroit Bank, dated May 5, 1932,

from Fred T. Murphy to Ernest Kanzler...

4605

68. Photostat of letter on letterhead of the Capital National Bank of

Lansing, dated May 23, 1932, from F. E. Gorman, president, to

Ernest Kanzler.

4606

69. A receipt dated Dec. 11, 1930, from the Guardian Detroit Co. for

$5,000,000 of securities loaned by Mr. Ford --

4665

70. A note dated Mar. 9, 1932, for $1,000,000 at 6 months pa yable to the

order of R. O. Lord, agent, by the Guardian Detroit Co--

4666

il. Photostat of a letter on letterhead of Guardian National Bank of

Commerce of Detroit, dated Dec. 22, 1932, from vice president and

cashier to B. J. Craig, secretary Ford Motor Co., Dearborn, Mich. 4671

72. Photostat of copy of letter on letterhead of Ford Motor ('o., dated

Dec. 28, 1932, from Ford Motor Co., by B. J. Craig, secretary and

assistant treasurer, to Guaranty Trust Co. of New York.

4672

73. Photostat of letter on letterhead of Guaranty Trust Co. of New York,

dated Dec. 29, 1932, from William L. Kleitz to Elbert S. Burns_ 4673

74. Photostat of letter on letterhead of Guardian National Bank of

Commerce of Detroit, dated Dec. 24, 1932, from Elbert S. Burns,

vice president Guardian National Bank of Commerce of Detroit,

to Guaranty Trust Co. of New York ---

4673

175541-pt. 10

III

75. Photostat of letter on letterhead of Guardian National Bank of

Commerce of Detroit, dated Dec. 30, 1932, from vice president and

cashier, to B. J. Craig---

76. An agreement in letter form, dated Dec. 16, 1931, addressed to the

Continental Illinois Bank & Trust Co. of Chicago, and the Bank-

ers Trust Co. of New York City, signed by Guardian Detroit Cnion

Group, Inc.---

77. Photostat of agreement between Ford Motor Co. and Guardian De-

troit Union Group, Inc., dated Dec. 29, 1932_

78. Original pencil sheet of requirements as prepared by Mr. Kanz-

ler 4738_-

79. A tabulated statement headed Status of Loans made by the

R.F.C. to banks in Guardian Detroit Union Group as of Dec. 19.

1933" 4753---

80. Statement referred to, prepared by the witness, and read into the

record by Mr. Pecora -

81. Photostatic copy of letter dated Aug. 21, 1929, from Frank W.

Blair to the stockholders of the Union Commerce Corporation..

82. Photostatic copy of letter dated Aug. 21, 1929, on letterhead of

Union Commerce Corporation, signed by John N. Stalker, secretary,

and addressed to the stockholders of the Union Commerce Cor-

poration ---

83. Letter dated Apr. 26, 1932, addressed by Henry E. Bodman to

Clifford B. Longley, president of the Union Guardian Trust

Co., Detroit.

84. Statement entitled “ General journal and statement of condition

Union Guardian Trust Co., Feb. 11, 1933_-

85. Statement entitled “General journal and statement of condition

Union Guardian Trust Co., Dec. 31, 1932_

86. The intra-Group and interoffice memorandum dated Jan. 16, 1933,

from E. C. Harris to Frank Maurice.

87. Memorandum referred to, dated Jan. 12, 1933, to Mr. Frank J.

Maurice from Mr. E. C. Harris..

88. Photostat of intra-Group and interoffice memorandum, dated Jan.

24, 1933, from E. C. Harris to F. J. Maurice..

89. Photostat of paper dated Jan. 17, 1933, to Henry E. Bodman from

E. C. Harris.

90. Statement entitled “Union Guardian Trust Co., withdrawals and

deposits, Jan. 1, 1933, to Jan. 28, 1933".

91. Photostatic copy of sheet entitled Certificate of deposit with-

drawals (Feb. 1 to Feb. 11, inclusive, 1933)" 4851 -

92. Photostatic copy of report of examining committee of Union Guardian

Trust Co, as of Dec. 13, 1932 4855_-

93. Photostat of hand-written memorandum from A. Quay Beyer to

Frank Maurice, filed Apr. 18, 1933.

94. Letter Oct. 23, 1933, Mott to Covington..

95. Photostatic copy of the opinion rendered by attorney general of Mich-

igan, Jan. 27, 1931 1967-----

96. Photostat of a letter written June 17, 1930, by Henry E. Bodman

to Paul H. King, referee in bankruptcy, Detroit, Mich. 1969_

97. Photostatic copy of intra-Group memorandum dated Aug. 27, 1931,

to Mr. Robert O. Lord and signed by Mr. Henry E. Bodman

98, 99, 100, and 101. Photostats, debit and credit slips-

102. Memorandum dated Jan. 31, 1932_

103. Photostatic copy of report of condition of Union Industrial Savings

& Trust Co., Flint, Mich., of Dec. 31, 1931 5006_-

104, 105. Photostatic copies of documents captioned “Union Industrial

Trust and Savings Bank, Flint, Mich., General Journal

Ledges and statement of Condition " 5007_-.

106. Bulletin no. 2, Jan. 2, 1930, Guardian nion Group, Inc., 5031.

107. Letter Jan. 6, 1930, cashier, Bank of Hamtramck, to Lord.

108. Letter dated Jan. 9, 1930, from Robert O. Lord to W. E. Dingmall.-

109. Intra-Group memorandum, dated Dec. 10, 1930, from B. K. Patterson

66

5056

(1)

4873

4918

5012

4970

4977

5002

5001

()

()

110. Intra-Group memorandum dated Dec. 8, 1930, from B. K. Patterson Page

to Robert 0. Lord_-.

5037

111. Letter dated Mar. 3, 1933, from R. Perry Shorts to S. Sloan Colt_- 5038

112. Photostatic copy of intra-Group memorandum dated Dec. 22, 1930,

addressed by Mr. Lord to the directors of the Group, 5039-

113. Photostatic copy of intra-Group memorandum dated Feb. 25, 1932,

from R. C. Huelsman, on the subject of “ Congress Corporation”. 5043

114. Statement entitled Congress Corporation; assets purchased from

units” 5047

5056

115. Letter dated Jan. 8, 1934, written by Price, Waterhouse & Co.

and addressed to Robert O. Lord, Detroit, Mich. 5047-

5048

116. Statement of views and opinions prepared by Robert O. Lord, 5048_-

* Not printed because of length or for reasons given in text.