have a copy of it at home, I don't know, but I haven't seen it since. If you had read it within the last 24 hours you know more about what I said than I do.

Mr. PECORA. I simply asked you if you recalled having expressed any opinions that were stated by you in the course of your exami nation.

Mr. MURFIN. Oh, yes. I expressed several opinions.

Mr. PECORA. And do you adhere to those opinions today, or have you had any occasion to revise them in any way!

Mr. MURFIN. If you will ask me about the particular opinion you want to know about I will answer.

Mr. PECORA. Can't you tell me generally whether or not the opin ions you entertained when you testified before that one-man grand jury proceeding, are the opinions that you have today on those subjects?

Mr. MURFIN. Insofar as my testimony went affecting the solvency of the bank on the 14th of February 1933, I am still firmly of the opinion that the bank was thoroughly solvent and should have been allowed to go on in business. I haven't changed my mind on that question one particle.

Mr. PECORA. Have you made a study of the condition of the bank upon which you based that opinion?

Mr. MURFIN. I thought at the time I knew something about it. Since that time we have had no access whatever to a single docu ment, not one.

Mr. PECORA. Well, haven't you

Mr. MURFIN (Continuing). In fact, the Comptroller of the Currency refused to let Mr. Leyburn even talk to me.

Mr. PECORA. Had you made prior to the time when you testified in that 1-man grand-jury proceeding a study of the bank's condi tion and situation of affairs upon which you based the opinion that you then testified to and which you have repeated here?

Mr. MURFIN. If you mean going through with an auditor or ac countant, no. But I thought I knew the condition of the bank. I thought my service on the executive committee gave me a general idea as to its situation. I had these reports from time to time at committee meetings, from the various officers, which reports I be lieved. I had been shown in the early part of January, and I have forgotten whether it was by Mr. Sweeny or by Mr. Mills, a statement showing that the bank had earned over $6,000,000 the preceding year.

Mr. PECORA. That is, in the year 1932?

Mr. MURFIN. Yes, sir.

Mr. PECORA. Yes. Go ahead.

Mr. MURFIN. I knew of the very large charge-offs that had been made. I had been informed, but I was not present at the meeting, that the Comptroller asked for a charge-off of $6,000,000, I think in December, and that it was immediately made. I knew that very large charge-offs had been made. I knew that the past dues had ceased to accumulate. They accumulated, irrespective, for a while, but I knew they had ceased to accumulate. I thought we were getting it licked, I mean the past-due paper. I knew of the economies in operation that had been made; and I knew that

Mr. PECORA (interposing). Well-but go ahead. I beg your pardon.

Mr. MURFIN (continuing). And I knew of the situation in that general way. That is what I predicated my opinion on.

Mr. PECORA. All economies in operation would be reflected in the earnings.

Mr. MURFIN. Yes, sir.

Mr. PECORA. You said you had been told in January of 1933 by Mr. Mills

Mr. MURFIN (interposing). Or by Mr. Sweeny, and I am not sure which.

Mr. PECORA (Continuing). Or by Mr. Sweeny, who were then, respectively, chairman of the board and president of the bank. Mr. MURFIN. Right.

Mr. PECORA. Of the bank having had earnings in excess of $6,000,000 during the preceding year.

Mr. MURFIN. Right.

Mr. PECORA. Were you told what the charge-offs were that were made in that year?

Mr. MURFIN. I knew at the time; yes.

Mr. PECORA. What were they?

Mr. MURFIN. Oh! I don't remember now, Mr. Pecora. And I will say that I have the poorest memory for figures and details you can imagine. I just hate details.

Mr. PECORA. Well, you seem to recall at least the figures relating to earnings that were reported to you for the year.

Mr. MURFIN. That is true.

Mr. PECORA. Well, now, I wonder why you do not recall the amount of the charge-offs that were reported to you as having been made during the year.

Mr. MURFIN. The psychology of the question probably is that the earnings pleased me more than the charge-offs, and that is the reason why I remember them better. I do not know, but that is just a guess.

Mr. PECORA. What is your best guess about that?

Mr. MURFIN. The charge-offs were very, very large.

Mr. PECORA. What is your best guess as to the amount of them? Mr. MURFIN. Oh! I don't remember. I think it was-Oh! It seems to me it was 20-odd million dollars, but that is a guess. You have asked me to guess and I have guessed.

Mr. PECORA. Was it your opinion that the bank was in better condition at the end of the year 1932 than it was at the end of the year 1931?

Mr. MURFIN. Correct. And that was the opinion of our executive officers. And that opinion was frequently expressed as they were winding up the business. You see, I had been out of touch with everything for many months, and I went down and spent one afternoon, and I asked a lot of questions, and that was the general opinion around the bank, that she was going along in better shape. Senator COUZENS. That was in January of 1933?

Mr. MURFIN. Yes.

Mr. PECORA. Did you know, then, or do you know now, what was the aggregate capital, surplus, and undivided profits of the bank at

the time of the consolidation on December 31, 1931, and what those figures were at the end of the year 1932?

Mr. MURFIN. No. The capital was $25,000,000, and I know that the surplus and undivided profits had been cut into frightfully Yes, they had been cut into frightfully.

year

Mr. PECORA. In the
Mr. MURFIN. Yes, sir.

1932?

Mr. PECORA. And the surplus had been greatly reduced.
Mr. MURFIN. That is correct.

Mr. PECORA. Does that indicate a better condition?

Mr. MURFIN. Why, it indicates that you are cleaning house; yes Mr. PECORA. Does it indicate that the bank was in better position financially at the end of the year 1932 than it was the year before that?

Mr. MURFIN. I think so; yes, sir. Do you want me to tell you why?

Mr. PECORA. I haven't any objection to your telling us why. Mr. MURFIN. Well, if you want my opinion, a lot of those bad loans that have been criticized were old weather-beaten loans Mr. PECORA (interposing). Now, which loans do you refer to! Mr. MURFIN. Oh, the loans you have been criticizing here, a num ber of them.

Mr. PECORA. What loans have I been criticizing here?
Mr. MURFIN. Officers' loans, for example.

Mr. PECORA. What loans have I been criticizing!
Mr. MURFIN. Officers' loans, I have heard you criticize.

Mr. PECORA. I haven't criticized anything. I have merely put into the record criticisms which were criticisms that were made, for instance, by bank examiners.

Mr. MURFIN. Well, perhaps the form of your questions made me think you were critical of them.

Mr. PECORA. I am merely attempting to elicit the facts, Judge Murfin.

Mr. MURFIN. Well, I am trying to help you.

Mr. PECORA. All right.

Mr. MURFIN. But I wish you wouldn't ask me to guess so much. Mr. PECORA. Well, unfortunately, I have to ask you to guess where you cannot give us anything better than a guess. I wish you to give us exact knowledge if you possess it.

Mr. MURFIN. Well, there are so many men better qualified to give you those facts than I am.

Mr. PECORA. Who, for instance, would you recommend as better qualified than you?

Mr. MURFIN. Mr. Mills, Mr. Bodde, Mr. Chittenden, Mr. Sweeny, Mr. McGonegal, Mr. Pipper. And Mr. Mark Wilson, sitting over there, knows more about it than almost anybody.

Mr. PECORA. Mr. Mark Wilson is going to testify. He has been subpenaed here for that purpose.

Mr. MURFIN. He will tell you the truth, and he is a marvelous man, being a master of details, while I hate details, and he was an expert on that matter and was charged with that duty. He can tell you as much about it as anybody I know.

Mr. PECORA. Would you depend on Mr. Wilson's testimony as to the facts?

Mr. MURFIN. I would believe anything that Mr. Wilson said; and I think anybody who knows him would do likewise. He stands very high.

Mr. PECORA. Mr. Mark Wilson is going to be put on the stand. And so will Mr. Mills, and so would Mr. Sweeny if he were able to be here. And if Mr. Bodde wants to come here the stand will be open to him.

Mr. MURFIN. I do not think, Mr. Pecora, that anybody wants to come here. [Laughter.] Have the newspaper boys told you the description of this hearing in Detroit?

Mr. PECORA. What is that?

Mr. MURFIN. In Detroit there is going about the expression, in connection with this committee's hearings, that all of the Detroit bankers have angina Pecora. [Laughter.] That indicates that they do not want to come here.

Mr. PECORA. Why, Judge Murfin, there are some people who have been collecting royalties on that wisecrack for about 8 months.

Mr. MURFIN. Well, it only reached Detroit when you got there. Mr. PECORA. Did you ever, either as a member of the board of directors of the bank or in any other capacity, discuss with any of the other directors, or with any of the officers of the bank, reports of examinations of the bank made during the years 1931 and 1932 by national bank examiners?

Mr. MURFIN. I discussed with several directors, and with Mr. Sweeney and Mr. Mills, the report that Mr. Leyburn made in December of 1932 of the examination that he started in November of that

same year.

Mr. PECORA. Do you recall that I read into the record, during the process of examining Mr. Stair on yesterday, many remarks, comments, and criticisms embodied in that particular report?

Mr. MURFIN. You told Mr. Stair you were reading from the yellow sheets. We never saw those. Those reports that came to Washington we haven't seen yet.

Mr. PECORA. I am referring to the report that was a part of the report mentioned.

Mr. MURFIN. Well, the situation is that there were two reports, one report that the bank got, and one report that we never saw, and haven't seen yet.

Mr. PECORA. You know that the examiners make reports to the Comptroller of the Currency after making examinations of banks, and that all these reports have included so-called "confidential criticisms" that are designed for the information and guidance of the Comptroller.

Mr. MURFIN. There was not a person connected with the First National Bank who ever heard of that practice until Senator Couzens testified on the subject before the Detroit grand jury, and then it came to Mr. Sweeny, Mr. Mills, and all of us as a distinct shock that the examiner should give the Comptroller one report and give the bank another report. I am shocked at that yet.

Mr. PECORA. Why, Judge Murfin, do not you know that the report given to the Comptroller of the Currency includes the report given to the directors of the bank, plus this so-called "confidential criticism or comment "?

Mr. MURFIN. All that I know about the report given to the Comptroller is what was brought out by Senator Couzens' testimony before the Keidan grand jury, and what you read to Mr. Stair here yesterday. Now, that is all that I know about it.

Mr. PECORA. Have you been under the impression all these years that the report made to the Comptroller of the Currency by national bank examiners consisted merely of what you have referred to as these yellow sheets?

Mr. MURFIN. I assumed that the report of the examination of the bank, which was given to the directors for their information and action, was the same as is given to the Comptroller.

Senator COUZENS. It is the same so far as figures are concerned, and so far as loans are concerned. The only difference is the com ments which the examiners make to the Comptroller of the Currency, which the examiner does not put in writing to the directors, although the reports themselves frequently state that they have dis cussed these matters with the executive board or committee without putting them into the written report.

Mr. MURFIN. Well, that is all news to me. I never knew that be fore. Of course, what the Comptroller of the Currency has I know nothing about.

Senator COUZENS. The Comptroller of the Currency has only the same figures that you have, so far as figures are concerned. He has no different set of figures.

Mr. PECORA. In other words, Judge Murfin, every report of examination given to a bank by the bank examiner is also given to the Comptroller of the Currency, plus the so-called "confidential criticisms or comments."

Mr. MURFIN. The "plus" part is all news to me, Mr. Pecora. I never knew there was any plus about it. And I might say that I went to these expert bankers-and I am not a banker, you understand-I went to Sweeny, I went to Bodde, I went to Livingstone, and asked nearly all of them about it, and they had never heard of such a thing.

Mr. PECORA. I do not quite understand their ignorance as to the practice. It has been well known for years in New York anyway.

I do not know about Detroit.

Mr. MURFIN. I am just telling you what little I know.

Mr. PECORA. Let me read to you, Judge, the following from the general remarks

Mr. MURFIN. Is this from the report to the directors or the report to the Comptroller?

Mr. PECORA. The report to the Comptroller of the Currency by the national-bank examiner of his examination of your bank, made as of the 18th day of November 1932, which, as I understand, it was the last examination made prior to the closing of the bank in February 1933.

Mr. MURFIN. That is my understanding.

Mr. PECORA. The remarks in this report are as follows [reading]:

To comment on the assets of this bank, one must dwell almost wholly in the past, as practically no recent loans are being made which are subject to criticism. The present picture portrays an effort to collect loans representing speculation in the nth degree at a time of evanescent security and no market