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helle that he resign. There was a meeting of either the board of directors or the executive committee of the Detroit Bankers Co. It was then determined that we had picked up all the information from the Bankers Co. that we needed, and pursuant to the policy of cutting down expenses of the Bankers Co., and that policy having been adopted at the time, we thought Mr. Verhelle's services could be dispensed with. I sent for Mr. Verhelle.

It was never a pleasant task to suggest to a man that he resign. I asked Mr. Dodge if he would be good enough to come in there. Mr. Dodge was with me at the time, and I said to Mr. Verhelle, I said, “ Joe, it is never a pleasant task that I have before me. You know the policy that has been adopted by the Detroit Bankers Co. to cut down on the expenses of the Detroit Bankers Co. and on its activities. We do not see any future, and it has been suggested by the board or the executive committee that it would be better if you resign.” Then I said to him, “ This cannot be any surprise to you and the matter was dropped. Mr. Dodge was present throughout our conference.

Senator COUZENS. So you did not regret to have to let Mr. Verhelle go?

Mr. Mills. No; frankly, Senator, I did not.

I want to say this for the report, and I am trying to give you gentlemen all the information I have: For instance, regarding a man named Beasley. This I recall quite well. This may illustrate the vice that the committee felt ran through the report. It was stated that Beasley—I would like to go over that part of it, because I remember that and I think it was a small item that illustrates what the committee felt about a large part of it. But you notice some of them, one or two of the officers, we administered a reprimand to. So there was a basis for some of the junior officers in the institution. One of them we did not examine at all because he had previously resigned for entirely different reasons.

And when I say not at all, I went into it with him, we went into it with him, to see if there had been in our judgment at least, no criminal liability, and dropped it when we were satisfied there was not.

Now, here is this thing about Mr. Beasley: You understand I am testifying from my very best recollection. I have no definite record before me. Beasley had a lot of loans which were under water, and he was for the moment sunk-and some mortgages.

Now, it says this: "His account in the month of April indicates payments to Watling, Merchant & Co.”, who, by the way, are brokers,

in the following amounts: April 4, $123; April 5, $62; April 21, $48.25, and also indicates small speculations in Canadian exchange during the month of April 1932."

I leave it to any reasonable man what the inference would be from that. We at least thought that he was running a margin account.

Now, it did not say margin account, but in reading it that was the impression that the committee had.

It also said that "indicated the word used was indicated ”_ did not say he had speculated, but it indicated speculation in Canadian exchange.

Now, the facts seem to be that Mr. Beasley had purchased outright I think it was 10 shares of Detroit Bankers Co. stock, got it from a


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Now, I want to say this: We then, I think, instructed the officers that they were not to take any type of renewal notes ahead of time like that. Even if there was an agreement, it was not good practice to do it

Mr. Prona, Mr. Mills, you took part in conferences and negotiations and discussions some time last year in efforts to obtain a loan from the RF.C., did you not?

Mr. Mills. Of the First National Bank?
Mr. PECORA. Yes.
Mr. MILLS. Yes, sir.
Mr. PECORA. I want to question you about that in the morning.
Mr. MILLS. Yes, sir.

Mr. PECORA. So if you have any memoranda or data that will serve to refresh your recollection, you may bring it with you.

Mr. Mills. Well, I have right here what little I have, and I will have that here.

The CHAIRMAN. We will be glad to have any suggestions you have to offer with reference to any changes or modifications or improvements in the banking laws.

Mr. Mills. Well, I have 4 or 5 that I am very anxious to present if I may, Mr. Chairman.

The CHAIRMAN. Yes; we would like to have them.

Mr. PECORA. I suggest, Mr. Chairman, that Mr. Mills have them here tomorrow so that they may be put in the record at the conclusion of his examination.

Mr. Mills. I will be glad to do that.

The CHAIRMAN. The committee will now take a recess until 10:15 tomorrow morning.

(Accordingly, at 4:45 p.m., the committee adjourned until 10:15 o'clock on the following morning.)





Washington, D.C. The subcommittee met at 10:15 a.m., pursuant to adjournment cn yesterday, in room 301 of the Senate Office Building, Senator Duncan U. Fletcher presiding.

Present: Senators Fletcher (chairman), Adams, Townsend, and Couzens. Present also: Ferdinand Pecora, counsel to the committee; Julius Silver and David Saperstein, associate counsel to the committee; and Frank J. Meehan, chief statistician to the committee.

The CHAIRMAN. The subcommittee will come to order. I will state for the benefit of those present, as well as for the record, that Mr. Pecora is giving his attention today to the preparation of the bill regarding stock exchange practices and so forth, which will probably be introduced in the Senate on Friday. There has been a great deal of work done in connection with it, and the bill is practically finished, but I feel that Mr. Pecora ought to go over it, and he will go over it, and try to get it in shape today. Therefore, Mr. Pecora will be absent this morning, and Mr. Saperstein will take his place in examining the witness this morning.

You may proceed, Mr. Saperstein.



Mr. SAPERSTEIN. Mr. Mills, prior to the consolidation of the Peoples Wayne and the First National Banks you were the chairman of the board of the Peoples Wayne County Bank for a period of time, were you not?

Mr. Mills. Yes.
Mr. SAPERSTEIN. When did you become the chairman of the board ?
Mr. Mills. Of the Peoples Wayne County Bank?

Mr. Mills. I was elected in January of 1931, with the understanding that I was not to take office or assume any duties or receive any compensation until the 1st of March 1931.

Mr. SAPERSTEIN. And on the 1st of March 1931 did you assume the duties of that office ?

Mr. MILLS. Yes.

Mr. SAPERSTEIN. You then became the chief executive officer of the Peoples Wayne Bank, did you not?

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