73. Letter dated May 3, 1932, from Seton Porter, president National Distillers Products Corporation, to Redmond & Co----- 74. Letter dated April 28, 1933, from National Distillers Products Cor- 75. Letter dated April 28, 1933, from Seton Porter, president National Distillers Products Corporation, to Illinois Glass Consolidated 76. Letter dated April 28, 1933, from Seton Porter, president National Distillers Products Corporation, to Redmond & Co-- 77. Copy of draft of letter, April 27, 1933, National Distillers to Red- 78. Copies of options given to Redmond & Co., 1929 to 1933, 6281-- 79. Letter dated August 4, 1933, from Goldman, Sachs & Co. to secre- tary committee on Business Conduct, New York Stock Exchange-- 80. Application of Kelsey-Hayes Wheel Co., dated February 1, 1933, to committee on Stock List, New York Stock Exchange, 6284--- 81. Letter dated February 7, 1933, from Goldman, Sachs & Co., and Lehman Bros. to committee on stock list, New York Stock Ex- 82. Minutes of meeting of February 6, 1933, of committee on stock 83. An excerpt from the monthly letter on economic conditions to the executive committee of Henry L. Doherty & Co. for December 1928- 84. Printed document entitled "Confidential. Monthly Letter on Eoco- nomic Conditions to the Executive Committee, Henry L. Doherty 85. Paper entitled "Further Developments in Brokers' Loans' 86. Letter dated November 1, 1933, from W. A. Jones to Ferdinand Pecora, together with accompanying data, 6319-- 87. Letter dated November 9, 1933, from A. C. Ray, treasurer Electric Bond & Share Co., to Ferdinand Pecora, counsel, Committee on 88. Letter dated November 9, 1933, from A. C. Ray, treasurer American 6310 6361 89. Copy of communication, November 3, 1933, Teagle to Pecora, 6332__ 90. Statement entitled " 'Interest on Jesup & Lamont deposit account 92. The recapitulation made by members of the investigating staff of the committee, entitled "Total number and amount of street loans made by private corporations for the year 1929 in the call money 100. Return made by the International Nickel Co. of Canada, Ltd., 6343 101. Return made by the Pan American Petroleum & Transport Co. to the Not printed because of length or for reasons given in text. 107. Return to questionnaire, dated November 6, 1933, from L. H. Seagrave, president American Founders Corporation, to Ferdinand Pecora, counsel, Committee on Banking and Currency, and supplemental return from L. H. Seagrave to Ferdinand Pecora, dated February 21, 1934, 6346_-. 108. Constitution, rules, together with amendments thereto, of the New 113. Document entitled "Answers Submitted by the New York Stock Ex- change to the Questions Asked of It by Counsel for the United States Senate Committee on Banking and Currency, 6416–. 114. Letter dated November 27, 1933, from Charles E. Hudson, president San Francisco Mining Exchange, to Ferdinand Pecora, together 6389 115. Document purporting to be statement of Mr. Richard Whitney before the House Committee on Interstate and Foreign Commerce, 6419--- (**) 116. Document purporting to be final proof of statement or proposal of Mr. Richard Whitney before the House Committee on Interstate and Not printed because of length or for reasons given in text. STOCK EXCHANGE PRACTICES WEDNESDAY, FEBRUARY 21, 1934 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D.C. The committee met at 10:30 a.m., pursuant to adjournment on yesterday, in room 301 of the Senate Office Building, Senator Duncan U. Fletcher presiding. Present: Senators Fletcher Fletcher (chairman), (chairman), Barkley, Costigan, Adams, Townsend, Couzens, and Kean. 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 committee will please come to order. Mr. Pecora, who will you have first this morning? Mr. PECORA. Mr. Brown will resume the stand. TESTIMONY OF RUSSELL R. BROWN, CHAIRMAN OF THE BOARD, AMERICAN COMMERCIAL ALCOHOL CORPORATION, NEW YORK CITY-Resumed Mr. PECORA. Mr. Brown, during the month of July 1933, was an application filed with the New York Stock Exchange by and on behalf of the American Commercial Alcohol Corporation for a third additional listing of its capital common stock? Mr. BROWN. Yes, sir. Mr. PECORA. Have you a copy of that application? Mr. BROWN. No, sir. Mr. PECORA. I show you what purports to be a printed copy thereof, which has been furnished to us by the New York Stock Exchange. Will you look at it and tell me if you can identify it as a true and correct copy of the application in question? Mr. BROWN (after looking at the printed form). Yes, sir. Mr. PECORA. Mr. Chairman, I offer it in evidence, but it need not be spread in full on the record of the committee's hearings. The CHAIRMAN. Let it be admitted and appropriately marked. (An application to the New York Stock Exchange for an additional listing of common stock by the American Commercial Alcohol Corporation, was marked "Committee Exhibit No. 62, Feb. 21, 1934,' and will not be spread in full on the record but retained in the files of the committee.) Mr. PECORA. Mr. Brown, the listing application just referred to has been received in evidence as committee exhibit no. 62 of this date. I want to read into the record the following extracts therefrom, under the caption: AUTHORITY FOR AND PURPOSE OF ISSUE The company proposes to issue, upon due authority of the board of directors, up to 25,000 shares of its common stock, on account of the purchase of assets for which it is now negotiating and which may be acquired in the near future, upon official notice of issuance and payment in full, with the statement of the application of the proceeds for the property acquired. The shares which it is proposed to issue will be registered with the Federal Trade Commission in compliance with the provisions of the Securities Act of 1933. And under the caption " Opinion of Counsel ", the following statement is contained in this application: The legal details in connection with the said issue are subject to the approval of Messrs. Larkin, Rathbone & Perry, No. 70 Broadway, New York City, who are of the opinion that by reason of the authority provided in the certificate of incorporation of said corporation. and upon due authority of the board of directors, said shares of stock may be issued in the absence of fraud, and in the transaction of the purposes specified above, and for such consideration as may be fixed by the board of directors; and when so issued will be lawfully issued, and will be fully paid and nonassessable, and valid in the hands of holders thereof, and will not be liable to any further call or assessment. The application itself is dated July 19, 1933, and is for an additional listing of 25,000 shares of the common stock, of $20 par value, of the American Commercial Alcohol Corporation. It sets forth that the total amount of common stock authorized to be issued by the company is 375,000 shares under its charter; that there were previously authorized to be issued, or rather to be listed, 262,761 shares, of which there were outstanding on July 18, 1933, 260,715 shares, and that the total applied for, that is, for listing, is 287,761 shares; and that this application was authorized by the executive committee of the American Commercial Alcohol Corporation on July 19, 1933. The application is signed in behalf of the American Commercial Alcohol Corporation by Cecil Page as secretary thereof. The exhibit, constituting a copy of said application, contains the following: This committee recommends that the above-mentioned 25,000 shares of common stock, of $20 par value, be added to the list, after final notice of issuance and payment in full with statement of application of proceeds or property acquired, in accordance with the terms of this application, making the total amount authorized to be listed 287,761 shares. That is signed by Frank Altschul, chairman, and J. M. B. Hoxsey. executive assistant to the committee on stock list. It also shows it was adopted by the governing committee on July 26, 1933, being signed by Ashbel Green, secretary. That which I have last read refers, of course, to the committee on stock list of the New York Stock Exchange, and to the governing committee of the New York Stock Exchange. Now, Mr. Brown, has any of the stock covered by this application, namely, 25,000 additional shares, ever been issued? Mr. BROWN. No, sir. Mr. PECORA. Why not? Mr. BROWN. Well, because there were so many delays on the part of the lawyers in the handling of the transaction, that the company was put in a position in the meantime where it handled it by cash; because of the improvement in the business situation it was enabled to handle it by cash. |