Mr. PECORA. I have not one on December 29.

Mr. THOMAS. I do not know what fluctuation there may have been in our cash during that period.

Mr. PECORA. Here is a photostatic reproduction from the general journal of statement of condition of the Detroit Trust Co. as of December 29, 1932, which shows that the deposits of fiduciary funds or trust accounts on that date amounted to $3,961,126.92 in the First Wayne National Bank and $500,000 in the Detroit Savings Bank, or a total on that date of $4,461,126.92.

Mr. THOMAS. That is right; out of a total of $7,260,000. So the condition was a little better on that date than it was as of the end

of the year.

Mr. PECORA. It shows cash on hand in banks December 29, 1932, over and above the deposits representing trust funds or trust accounts, was $2,798,874?

Mr. THOMAS. That is right.

Mr. PECORA. So that if it had not been for this certificate of deposit that you got on December 29, 1932, from the First National Bank of Detroit, your cash would have been almost entirely depleted by the cashing of these four certificates of deposit of the Ford Motor Co.?

Mr. THOMAS. It would have been down to approximately $200,000. Mr. PECORA. Was not that the reason for obtaining this deposit from the First National Bank of Detroit?

Mr. THOMAS. We did not solicit it. The bank may have had that in mind when they deposited that amount with us.

Mr. PECORA. The First National Bank of Detroit?

Mr. THOMAS. Yes.

Mr. PECORA. May have had what in mind?

Mr. THOMAS. The fact that they wanted to make the deposit so that we would have additional working capital.

Mr. PECORA. Well, was the First National Bank of Detroit in possession of complete knowledge of the financial condition of the Detroit Trust Co. on December 29, 1932?

Mr. THOMAS. I don't know.

Mr. PECORA. That would have been necessary in order to have impelled the First National Bank of Detroit to make that deposit if, as you say, it was not solicited by the Trust Co.

Mr. THOMAS. Well, I think perhaps when those certificates of the Ford Motor Co. were cashed and the money was transferred to the bank

Mr. PECORA. The First National Bank?

Mr. THOMAS. The First National Bank-I don't know what use they were going to put it to. If they had additional cash come in to them that day, there is no reason why they should not redeposit with us rather than keep it on deposit with themselves.

Senator COUZENS. That augmented the total deposits, did it not? Or at least it did not diminish the deposits in the Detroit Trust Co.? Mr. THOMAS. No.

Senator COUZENS. But augmented the deposits in the First National?

Mr. THOMAS. No; I do not think it would after they sent the money over to us and purchased our certificates of deposit.

Senator COUZENS. The certificates of deposit they took out from you would not diminish their deposits, would they!

Mr. PECORA. It would enhance their deposits, would it not?

Senator COUZENS. No. It would just make the difference in moneys in other banks.

Mr. THOMAS. That is right.

Senator COUZENS. So it did not diminish the deposits in the Detroit Trust Co., because you got back the amount from the First National.

Mr. THOMAS. Yes.

Senator COUZENS. So that they were then, presumably, on a parity? Mr. THOMAS. Yes.

Senator COUZENS. In the case of the First National, however, the deposits would be augmented to the extent of the Ford Motor Co.'s deposits of those certificates, would they not?

Mr. THOMAS. Yes: I think that is right, unless Ford, of course, drew the money out from them again.

Senator COUZENS. We are only talking about the transactions you know about.

Mr. THOMAS. Yes.

Senator COUZENS. Apparently he did not take it out. Otherwise they would not have put it back into your trust company, as you have just suggested.

Mr. PECORA, I show you what purports to be a printed statement of condition, as of September 30, 1932, of the First National Bank, Detroit. Will you look at it and tell me if you have seen a copy of it before?

Mr. THOMAS. Are you questioning Mr. Stone or me?
Mr. PECORA. No; you, Mr. Thomas.

Mr. THOMAS (after examining document). I do not recall having seen it.

Mr. PECORA. Are you familiar with it, Mr. Stone?

Mr. STONE. No, sir; I am not.

Mr. PECORA. Mr. Stone, as one of the directors of the Detroit Bankers Co., do you mean to say that you did not receive, or see and examine the reports of statement of condition issued periodically by the biggest banking unit of that group, namely, the First National Bank, Detroit?

Mr. STONE. The directors of the Bankers Co. received combined statements, and I think they did receive statements of the unit banks; yes.

Mr. PECORA. That is one of the statements of one of those unit banks, is it not?

Mr. STONE. Yes; it is.

Mr. PECORA. You are not looking at a copy of that statement for the first time now, are you, Mr. Stone?

Mr. STONE. I cannot state with actual knowledge whether I have seen this statement. I can only say that I presume I did. I presume it was mailed, at any rate, around to all the directors.

Mr. PECORA. What is the amount of total deposits indicated in that statement which you have in your hand, as of September 30,

1932?

Mr. STONE. $43,167,685.05.

Mr. PECORA. What is the number indicated therein of their time deposit accounts!

Mr. STONE. It is stated here as over 600,000 accounts.

Mr. PECORA. Now, I show you what purports to be a printed copy of a statement of condition of the same bank as of December 31, 1932. Will you look at it and tell me if you are familiar with that? Mr. STONE (after examining document). The same answer. I presume I have seen it.

Mr. PECORA. That is a statement of condition at a date 3 months subsequent to the statement of condition to which the first report relates.

Mr. STONE. Yes.

Mr. PECORA. What is the total amount of deposits indicated by the statement of condition as of December 31, 1932?

Mr. STONE. $423,357,897.44.

Mr. PECORA. What is the number of deposit accounts?

Mr. STONE. Over 500,000 accounts.

Mr. PECORA. That is 100,000 less in number than the number reported as of 3 months previous?

Mr. STONE. Yes.

Mr. PECORA. With a reduction of around $7,000,000 in the deposits. Mr. STONE. Yes; a trifle under $7,000,000.

Mr. PECORA. Does that indicate to you that between September and December 1932 steps were being taken by the First National Bank, Detroit, to bolster up its deposit statement!

Mr. STONE. No; I do not see that. It indicates 100,000 accounts were withdrawn, amounting to a little under $7,000,000.

Mr. PECORA. Does it indicate that by December 1932, as compared with the condition shown to exist in September 1932, a situation had arisen that suggested the advisability of the First National Bank, Detroit, doing something to bolster up its resources?

Mr. STONE. I would not understand so. At least I do not know on what such a supposition would be based.

Mr. PECORA. Well, on the condition of affairs, plus the issuance of this certificate of deposit of $2,500,000 that has last been offered in evidence.

Mr. STONE. $2,500,000 out of total deposits of $423,000,000?

Mr. PECORA. $2,500,000 would be a contribution to keeping up the appearance of strength, would it not?

Mr. STONE. I should not think so, in a bank of that size. Two and a half million dollars is a common transaction.

Mr. PECORA. Do you happen to know, as a director of the Detroit Bankers Co., which owned practically all the capital stock of the First National Bank, Detroit, that on the 3d of January 1933 the Ford Motor Co. withdrew from its deposit account in the First National Bank, Detroit, $5,869,000?

Mr. STONE. No.

Mr. PECORA. You do not know that?

Mr. STONE. No, sir.

The CHAIRMAN. Do you know what the deposits were in February 1933, Mr. Stone?

Mr. STONE. Of the First National?

The CHAIRMAN. Yes.

Mr. STONE. No, sir; I do not. I was not an officer at that time. The CHAIRMAN. I knew you were not an officer, but I thought perhaps you might know it. They were $378,000,000.

Mr. PECORA. Mr. Thomas, will you look at these photostatic copies of what purport to be four certificates of deposit issued by the Detroit Trust Co., payable to the Ford Motor Co. on demand, each one dated December 29, 1932, and made for the following respective sums: $1,000,000, $1,000,000, $300,000, $200,000. Tell me if you recognize them as being copies of certificates of deposit so issued by the Detroit Trust Co. to the order of the Ford Motor Co.

Mr. THOMAS (after examining papers). Yes; I would say they

were.

Mr. PECORA. You recognize them?

Mr. THOMAS. Yes.

Mr. PECORA. I offer them in evidence.

The CHAIRMAN. Let them be admitted.

(The copies of four certificates of deposit issued by Detroit Trust Co., payable to Ford Motor Co., dated Dec. 29, 1932, were marked, collectively, "Committee Exhibit No. 124, January 31, 1934," received in evidence and the same will be found at the conclusion of today's proceedings.)

Mr. PECORA. Mr. Thomas, were these certificates of deposit that have just been marked in evidence "Committee Exhibit 124" actually issued on the date which they bear, namely, December 29, 1932? Mr. THOMAS. They should have been.

Mr. PECORA. Were they? We know they should have been.
Mr. THOMAS. So far as I know.

Mr. PECORA. Will you look at this reproduction of the audit record of certificate of deposit register of the Detroit Trust Co. and tell me if you recognize it to be a true and correct duplicate or photostatic reproduction of such audit record [exhibiting a paper to the witness]? Mr. THOMAS (after examining paper). Yes; it appears to be.

Mr. PECORA. Is there anything on that audit record that you have looked at which indicates that on January 3, 1933, there were deposits made to the credit of the Ford Motor Co. aggregating $2,500,000?

Mr. THOMAS. Yes, sir.

Mr. PECORA. Those deposits are represented by certificates of deposit, are they not?

Mr. THOMAS. Yes, sir.

Mr. PECORA. Do they not correspond to these four certificates of deposit that have been marked in evidence as "Committee's Exhibit No. 124 "?

Mr. THOMAS. In amounts, you mean?

Mr. PECORA. In amounts and in every other way.

Mr. THOMAS. Yes.

Mr. PECORA. Does not that indicate that although these four certificates of deposit are dated December 29, 1932, they were not actually issued until January 3, 1933, and were dated back to December 29, 1932?

Mr. THOMAS. Yes; it does.

Mr. PECORA. Why was that done, Mr. Thomas?.
Mr. THOMAS. I don't believe I can tell you.

Mr. PECORA. You were the treasurer of the trust company on those dates, and you say you cannot tell me about that?

Mr. THOMAS. I certainly cannot. I do not know why they would be dated December 29, if they were not issued on that date, unless we were informed that the deposit was to be made with us on the third, and we dated them that date for interest purposes.

Mr. PECORA. That is exactly what you did do, is it not?

Mr. THOMAS. It may have been.

Mr. PECORA. Why was that done?

Mr. THOMAS. I presume so that there would be a correct computation of interest.

Mr. PECORA. Wasn't it done so that the Ford Motor Co. would not lose a single penny in interest on its deposit account in connection with the accommodations it had lent itself to, to both the Detroit Trust Co. and the First National Bank, Detroit?

Mr. THOMAS. I do not know that.

Mr. PECORA. You do not know that.

Mr. THOMAS. I do not think, to my knowledge, that the Ford Motor Co. was ever solicited in this transaction at all, as far as making the withdrawal or the deposit is concerned. As far as I know the Ford Motor Co. sent these certificates in to be cashed on the 29th of December.

Mr. PECORA. Sent which certificates in to be cashed?

Mr. THOMAS. The ones that were cashed.

Mr. PECORA. Those are the ones already in evidence.

Mr. THOMAS. Yes.

Mr. PECORA. Then, on January 3, 1933, these certificates of deposit last offered in evidence were issued by the Detroit Trust Co., payable on demand to the Ford Motor Co., for the aggregate amount of $2,500,000, and dated back to December 29, 1932, were they not? Mr. THOMAS. Yes; for interest purposes.

Mr. PECORA. Why should the Ford Motor Co. get interest from December 29, if all these transactions were in good faith?

Mr. THOMAS. I do not know that I can answer that, unless they had an arrangement with the bank whereby the bank did not pay them interest on their deposit while they had the proceeds of it.

Mr. PECORA. With what officer of the bank would such an arrangement be made?

Mr. THOMAS. It would probably be the cashier.

Mr. PECORA. How about the president?

Mr. THOMAS. I do not know.

Mr. PECORA. Is Mr. Browning here?

Mr. BROWNING. Yes, sir.

Mr. PECORA. Would you come forward, please, Mr. Browning? He has not been sworn. I will ask that Mr. Browning be sworn. The CHAIRMAN. Mr. Browning, 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 commitee, so help you God?

Mr. BROWNING. I do.