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First National Bank-On deposit-$565,263, interest rate 1%. This will be continued as our active Class A Trust Fund Account in Detroit. It is advisable that we maintain a balance of about this amount. Windsor

Canadian Bank of Commerce On deposit $19,145, interest rate 142%. To be left as is inasmuch as it is necessary to the conduct of certain Trust Accounts. Pontiac

First National Bank & Trust C0.-On deposit $6,970, interest rate 142%. To be left as is inasmuch as it is the active account for the Title Company in Pontiac. Grosse Pointe

Grosse Pointe Savings Bank-On deposit $17,207, interest rate 1%. To be left as is because it is the active operating account for the Grosse Pointe School.

SUNDRY CERTIFICATES OF DEPOSIT

This is made up of Certificates of Deposits as follows: Detroit Trust Company--

$235, 000 Michigan Industrial Bank.

144, 000 As soon as our Certificates of Deposit are cashed at the Michigan Industrial Bank this sum will be available for disposition elsewhere. Certificates of Deposit at the Detroit Trust Company can remain as is.

BANK ACCOUNTS GENERAL FUNDS New York

J. P. Morgan Co.-on deposit $3,557. This is a hangover from an old deposit relationship with the Guardian Trust Company. It is suggested that this account be closed out.

Guaranty Trust Co.-As before referred to, it is suggested that this be made our Class A General Account in New York and that $200,000 be transferred from the Chemical Bank & Trust Company which will build this balance up to $216,166. Interest rate is 12%.

National City Bank & Trust C0.-On deposit $5,765, interest rate 12%. Unless there are good reasons to the contrary, it would seem that this account could be closed out. Chicago

City National Bank & Trust Co.-On deposit $5,227, interest rate 13%. This is our active B Account in Chicago. It seems that borrowing relationships at times in the past have been very satisfactory with this Institution. As soon as our B Funds become a little more plentiful, perhaps it would be well to build this balance up to possibly $25,000. Detroit

Guardian National Bank of Commerce-On deposit $617,204, rate of interest 1%. This represents our general working account on Class B accounts in Detroit. Unless there are serious objections to the contrary, perhaps it should remain as is. Mt. Clemens

Mt. Clemens Savings Bank-On deposit $5,986. Inasmuch as this Bank is closed, it is recommended that the balance be transferred to Accounts Receivable. Highland Park

Highland Park State Bank-Running balance in this account seldom exceeds $2,500 inasmuch as it is only used for our pay roll account. Monroe

Dansard State Bank-This Bank is closed. It is recommended that the balance of $1,909 be transferred to Accounts Receivable. Birmingham

First State Savings Bank-On deposit $11,838. Bank Closed, recommend transfer of balance to Accounts Receivable,

Fowlerville

Commercial State Bank of Fowlerville, Balance $4,500. Should be transferred to Accounts Receivable.

(Signed) E. C. Harris ECH: EMB CC-Messrs. C. Longley

J. Stalker, Senator COUZENS. Mr. Longley, what was Mr. Stalker's position in the Trust Co.?

Mr. Longley. What was the date of that memorandum, Mr. Pecora?

Mr. PECORA. The date is January 16, 1933.

Mr. LONGLEY. I think he had just become vice chairman, Senator Couzens. I don't know whether that memorandum was before or after the meeting, but at any rate in January he became vice chairman of the board.

The CHAIRMAN. And what was Mr. Harris' position?

Mr. LONGLEY. He was treasurer at that time. Doesn't the memorandum indicate that fact?

Mr. PECORA. Do you mean of the Union Guardian Trust Co.?
Mr. LONGLEY. Yes.
Senator COUZENS. And you were chairman at that time?
Mr. LONGLEY. No; I was president.
Senator COUZENS. Who was the president; was it Mr. Bodman?

Mr. LONGLEY. If it was after the January meeting he was the chairman, and I was the president. I think the meeting was held on the 13th of January.

Mr. PECORA. Now, Mr. Longley, I show you what purports to be a photostatic copy of another so-called “intra-group and interoffice memorandum”, addressed to Mr. Frank J. Maurice, from Mr. E. C. Harris, dated January 12, 1933. Will you kindly look at it and tell me if you recognize it to be a true and correct copy of such memorandum passing from Mr. Harris to Mr. Maurice on or about that date.

Mr. LONGLEY (after reading the memorandum). It seems to be.
Mr. PECORA. Mr. Chairman, I offer it in evidence.
The CHAIRMAN. Let it be admitted.

(The memorandum referred to, dated Jan. 12, 1933, to Mr. Frank J. Maurice from Mr. E. C. Harris, was marked " Committee Exhibit No. 87, Jan. 17, 1934 ”, and will be found immediately following where read by Mr. Pecora.)

Mr. LONGLEY. Mr. Pecora, might I see that other paper?
Mr. PECORA. Do you mean the one already received in evidence ?
Mr. LONGLEY. Yes.
Mr. PECORA. Here it is.

Mr. LONGLEY. Mr. Pecora, I cannot make out this date of filing on this particular paper.

Mr. PECORA. Which exhibit do you now refer to?
Mr. LONGLEY. To committee exhibit no. 86.
Mr. PECORA. Do you mean the one I have just read ?

Mr. LONGLEY. Yes. If possible I should like to know whether this is [and then holding up paper to the light]-It is April 19, I believe.

Mr. PECORA. Of 1933 ?

Mr. LONGLEY. Yes. I am trying to bring out that probably, among other papers, this letter that you spoke of on yesterday was filed with a great many other papers of mine when I left the trust company.

Mr. PECORA. The letter you now refer to is the one that Mr. LONGLEY. I am just wondering whether that paper was taken from my copy. That seems to be about that date. You will find, Mr. Pecora, if you examine those files, that a large number of my letters were filed on one day in April of 1933.

Mr. Pecora. Which would indicate, I take it, that as you received those letters and reports, addressed to you, you kept them for a while and that then, on April 16, or some date in April of 1933, they were all transferred to the office files of the trust company.

Ňr. LONGLEY. No. When these memoranda came up to me, when these copies of communications came to me, my secretary filed a great many of them in my own private file in my office, without sending them to the general file. “And then, when I left the trust company, I cleaned out that file, and everything belonging to the trust company went on that date, or about that date, to their files.

Senator COUZENS. Mr. Pecora, what was the last thing that you put in evidence ?

Mr. PECORA. This intragroup and interoffice memorandum, dated January 12, 1933, marked “ Committee Exhibit No. 87" as of this date, and which appears on the letterhead of the Guardian Detroit Union Group, Inc. It reads as follows (reading]:

GUARDIAN DETROIT UNION GROUP, INCORPORATED

INTRA-GROUP AND INTER-OFFICE MEMORANDUM

To Mr. Frank J. Maurice 30

Date Jan. 12, 1933 From Mr. E. C. Harris 251

Accomplishments in the transfer of Class A funds are reported for today as follows:

FARMERS DEPOSIT NATIONAL BANK OF PITTSBURGH

Account opened :

Certificates of Deposit (Trust Accts.) purchased.--
Open account..

$227, 681. 82

32, 318. 18

Total.no

$260, 000.00

CHEMICAL BANK & TRUST COMPANY-NEW YORK

This deposit raised to $500,000 by a transfer of funds today in the amount of $230,000.

And right opposite that last sentence, which sentence appears in typewriting, there also appears the following handwritten notation: Are these A Fund earmarked? And I continue reading the exhibit:

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Account increased to $50,000 by transfer of $43,000.

All of the above resulted in a withdrawal from the Guardian National Bank of Commerce, uptown office, of $1,233,000; certificates of deposit (trust accts.) in Guardian National Bank of Commerce in the amount of $363,082.82 were cashed and placed in our general account in the Guardian National Bank of Commerce. Transfer of these funds will be made tomorrow morning to class A account in the uptown office from which further transfers of funds can be made as decided.

(Signed) E. C. HARRIS. ECH: EMB.

Mr. LONGLEY. May I see that paper again for a minute, Mr. Pecora !

Mr. PECORA. Yes. Here it is.
Mr. LONGLEY (after looking at the paper again). I thank you.

Mr. PECORA. I show you what purports to be a photostatic copy of another so-called “i

intragroup and interoffice memorandum addressed to Mr. F. J. Maurice by Mr. E. C. Harris, dated January 24, 1933. Will you look at it and tell me if you recognize it to be a true and correct copy of such memorandum?

Mr. LONGLEY (after reading the paper). It seems to be, Mr. Pecora.

Mr. PECORA, Mr. Chairman, I offer it in evidence.
The CHAIRMAN. Let it be admitted.

(The photostat of Intra-group and Inter-Office memorandum, dated Jan. 24, 1933, from E. Č. Harris to F. J. Maurice, was marked “ Committee Exhibit No. 88, Jan. 17, 1934 ", and will be found immediately following where read by Mr. Pecora.)

Mr. PECORA. The exhibit just received in evidence as no. 88 of this date, being on the letterhead of the Guardian Detroit Union Group, Inc., reads as follows (reading]:

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GUARDIAN DETROIT UNION GROUP INCORPORATED

INTRA-GROUP AND INTER-OFFICE MEMORANDUM

To Mr. F. J. Maurice 30
From Mr. E. C. Harris 251

Dated January 24, 1933 NEW YORK ACCOUNTS AS OF THE OPENING OF BUS NESS THIS MORNING WERE AS

FOLLOWS: Class A Accounts:

Guaranty Trust Co.-$9,000. This has been our active general account in New York and there is presently on deposit only $9,000. Mr. Badger made ar rangements here through Mr. Edward H. Rawls, Vice President, to purchase Certificates of Deposit at one-half of one per cent on time and one-quarter of one per cent on demand basis. This Bank should, accordingly, be made a Class A Account Bank and the balance should be built up to $250,000. This will be considered an active account and will necessarily carry the open demand rate balance of one-quarter of one per cent. It should be designated as

* Trust Funds Class A" and to presently build up the balance here, it is suggested that we be allowed to transfer from the Chemical Bank & Trust Co.

Chemical Bank & Trust Co., N.Y.—$641,000. Suggest the transfer of $250,000 to Guaranty Trust Co. as above. We will then open an account to be used as our regular Class B General Fund Account in New York in the amount of $100,000. This will be done by a transfer of money from Detroit. This will leave $390,000 to which we will add $10,000 which can be left in a dormant account to be known as 'Trust Funds Class A’ at the highest rate of interest obtainable. It is desirable that this $400,000 be left in dormant account as the $100.000 General Account will be quite active and our balance in it will be comparatively small and would not justify the service to be performed by the Bank otherwise.

Central Hanover Bank & Trust Co., N.Y.—$500,000. This can be left as a dormant deposit at the best rate obtainable.

Manufacturers' Trust Co., N.Y.-$8,000. If this balance is built up it will necessarily have to be done by a transfer of funds from either the Central Hanover Bank & Trust Co. or the Bankers Trust Co.

* Bankers Trust Co., N.Y.-$500,000. Inasmuch as Mr. Badger made arrangements through Mr. B. Thompkins, vice president, to purchase Certificates of Deposit for trust accounts here, this money should be distributed in two accounts both of which will be Trust Funds Class A. Number one account should be for $100,000 to take care of our Certificate of Deposit traffic and number two account may be for $400,000 (unless there is a draw down to build up Manufacturers' Trust which can be left in dormant account at the best rate obtainable. J. P. Morgan & Co, N.Y.-$3,000. To be left as is. National City Bank, N.Y.-$5,000. To remain as is. ECH: EMB

(Signed) E. C. HARRIS. The CHAIRMAN. Mr. Longley, there is where you get your reference to the “ No. 1 account”, and the “No. 2 account.”

Mr. PECORA. No, that is the general account and account no. 2. Isn't that so, Mr. Longley?

Mr. LONGLEY. Yes.

Senator COUZENS. And apparently the No. 2 account was a trust account.

Mr. LONGLEY. I would think so from that letter. The CHAIRMAN. It says a transfer of A funds. Mr. PECORA. Mr. Longley, does it seem to you that the three exhibits last offered in evidence, respectively committee exhibits 86, 87, and 88, and consisting of these intra-group and inter-office memoranda, are explanation of the reasons for some of the transfers of funds regarding which I questioned you this morning?

Mr. LONGLEY. Yes, I think so.

Mr. PECORA. Now, Mr. Longley, I show you what purports to be a photostatic copy of a memoranda addressed to Mr. Henry E. Bodman by Mr. E. C. Harris, dated January 17, 1933, entitled “ Present Distribution of Funds of Union Guardian Trust Co. as of January 16, 1933."

Will you look at it and tell me if you recognize it as being a true and correct copy of such memorandum or communication.

Mr. LONGLEY (after reading the paper). It seems to be, Mr. Pecora.

Mr. PECORA. Mr. Chairman, I offer it in evidence.
Senator COUZENS. Let it be admitted.

(The photostat of paper dated Jan. 17, 1933, to Henry E. Bodman from E. C. Harris, was marked " Committee Exhibit No. 89, Jan.

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