promptly upon completion of negotiations, and can satisfy the committee with regard to the possible application of the securities law, there is no objection to the listing requested.

Now, Mr. Altschul, was the appearance before the committee which in this comment by Mr. Tirrell had been arranged actually consummated ?

Mr. ALTSCHUL. Yes, sir. Mr. PecoRA. And who appeared before the committee in behalf of the American Commercial Alcohol Corporation?

Mr. ALTSCHUL. According to my record here, sir, Mr. Brown.
Mr. PECORA. Mr. Russell R. Brown?

Mr. ALTSCHUL. I take it for granted Mr. Russell R. Brown-yes, Mr. Russell R. Brown. And Mr. Egginton and Mr. Heiss of Larkin, Rathbone & Perry.

Mr. PECORA, Mr. Egginton and Mr. Heiss are connected with the law firm of Larkin, Rathbone & Perry.


Mr. PECORA. Have you any minutes of the proceedings had before your committee in connection with that appearance?

Mr. ALTSCHUL. I have a copy, yes, sir, of the original, which is in your hands.

Mr. PECORA. Have you a copy of the minutes of your committee meeting at which this appearance was made before you?

Mr. ALTSCHUL. Yes, sir.

Mr. PECORA. I have a copy here which you were kind enough to furnish to us, and I will read into the record, if you will kindly follow me while I do so.

Mr. ALTSCHUL. Right.

Mr. PECORA. The minutes with respect to such appearance before your committee, appearing at pages 154 and 155 [reading]:

AMERICAN COMMERCIAL ALCOHOL COMPANY. There appear before the committee Messrs. H. Egginton and Mr. H. Heiss, Messrs. Larkin, Rathbone & Perry, counsel for the corporation, and Russell R. Brown, chairman of the board, and Cecil Page, secretary and director of the corporation.

The CHAIRMAN. The question you are discussing with us is the question of the need of registration under the Securities bill.

Mr. Brown. We have decided to comply with the Act.
The CHAIRMAN. You are going to comply with registration ?

Mr. EGGINTON. We have written an opinion that the Act does not apply. We checked it with our correspondence with the Federal Trade Commission, and they believe that the Act does apply. I think the opinion is entirely erroneous, but they are going to stick to it.

The CHAIRMAN. Then you will make application, I suppose, for approval on notice to this committe that the registration requirements be met with?

Mr. BROWN. That is correct.
Mr. EGGINTON. The listing application would be approved ?

The CHAIRMAx. And you wanted to explain the secrecy in regard to the purchase of the stock until the deal you were interested in is completed, as I understood ?

Mr. Brown. I am perfectly

The CHAIRMAN. At all events, when your final application comes in, if this stock is used, then the purpose for which it is used will be fully set forth?

Mr. BROWN. It will be disclosed.
The CHAIRMAN. Any other questions?

Mr. Hoxsey. No. They are to file a copy of the registration statement with this committee.

Mr. EGGINTON. We will file an opinion of counsel as to the propriety of the issue upon your approval, and also file a copy of the registration when that is concluded.

The CHAIRMAN. As I understand it, you cannot physically issue all the stock until 20 days. So if we pass it on official notice of issuance after the reg. istration requirements have been complied with, then you are protected and we are.

Mr. EGGINTON. Yes. Mr. SEAMAN. You say you are going to file an opinion. That is the opinion you do not think you have to comply?

Mr. EGGINTON. No; we have taken out the other expression of opinion. The CHAIRMAN. I think that leaves no point further to discuss between us, unless you have something, Mr. Brown? Mr. BROWN. No; I have nothing.

Messrs. H. Egginton, F. H. Heiss, Russell R. Brown, and Cecil Page retired. Application A-10,119 of American Commercial Alcohol Corporation approved for recommendation to the governing committee, subject to compliance with registration requirements under Securities Act of 1933 and disclosure of properties to be acquired with the securities issued hereunder.

That completes the minutes of that particular hearing.
Mr. ALTSCHUL. Yes, sir.

Mr. PECORA. And Mr. Seaman who is referred to in these minutes is another member of the stock list committee?

Mr. ALTSCHUL. Yes, sir.
Mr. PECORA. Mr. Hoxsey is the
Mr. ALTSCHUL, Executive assistant.
Mr. PECORA. Executive assistant to the committee?
Mr. ALTSCHUL. Correct.

Mr. PECORA. When was this meeting of your committee held at which Mr. Brown appeared and Mr. Page, Mr. Egginton, and Mr. Heiss?

Mr. ALTSCHUL. July 24, 1933, sir.

Mr. PECORA. And it was at that same meeting that you had before you the document marked in evidence here as Committee Exhibit No. 64”, which includes the comment for the guidance of the committee by Mr. Tirrell!

Mr. ALTSCHUL. The last part of that I am sure we had before us at that time. I don't remember if the first ones related to that or not. That important part we had before us. [Showing document to Mr. Pecora.] Does this relate to the same thing? Mr. PECORA. Apparently; yes. Mr. ALTSCHUL. Yes, sir.

Mr. PECORA. Apparently up to July 24, 1933, the representations that had been made to your committee and its executive-what do you call him?

Mr. ALTSCHUL. Assistant.
Mr. PECORA. Executive assistant, Mr. Hoxsey-
Mr. ALTSCHUL. And his sta.ff.

Mr. PECORA. By and on behalf of the American Commercial Alcohol Corporation, were that it wanted to issue these additional 25,000 shares to enable it to acquire certain distillery properties in Kentucky?

Mr. ALTSCHUL. I don't want to try to bandy words, but that is not exactly accurate. They wanted to have authority to issue them in connection with the acquisition of the property.

Mr. PECORA. Yes.

Mr. ALTSCHUL. They could not issue it until then.
Mr. ALTSCHUL. I am sure we are quite in accord.

Mr. PECORA. The representations, in other words, which had been made to your committee up to the time that it approved this application on July 24, last, by or on behalf of the American Commercial Alcohol Corporation were to the effect that that corporation contemplated acquiring some distillery properties in the State of Kentucky, and in connection with such acquisition intended to issue additional shares up to 25,000; is that right?

Mr. ALTSCHUL. The purpose of issuing in the application that was before us read:

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 which it is now negotiating and which may be acquired in the near future.

Mr. PECORA. Yes; but in the comment by Mr. Tirrell which is part of exhibit no. 64 that you produced

Mr. ALTSCHUL. That is right.

Mr. PECORA. Mr. Tirrell stated specifically that “the company", meaning the American Commercial Alcohol Corporationhas been very late in submitting this application. For what it considers urgent business reasons, the company wishes to have the application considered by the committee at its meeting Monday. The stock has been fully authorized by its directors to issue up to 25,000 shares in connection with the purchase of assets of distillery properties in Kentucky.

Mr. ALTSCHUL. That is right. You have my only copy of that now, sir, and I did not have that before me. That is right. I did not have that.

Mr. PECORA. So it is quite apparent from this that what has been told to the committee on behalf of the American Commercial Alcohol Corporation as the nature of the assets that it intended to acquire with the issuance of these additional 25,000 shares

Mr. ALTSCHUL. That is right.
Mr. PECORA. Was the distillery property in Kentucky.
Mr. ALTSCHUL. That is correct, sir.

Mr. Pecora. Now, you heard the testimony this morning of Mr. Russell R. Brown, to the effect that what the corporation intended to acquire was the capital stock of a corporation known as the Spirits Corporation, which was in turn to acquire the capital stock of another corporation to be organized, called the Sid Klein Corporation, didn't you?

Mr. ALTSCHUL. Yes, sir.

Mr. PECORA. And that testimony and the testimony given by Mr. Brown with regard to the organization of the Spirits Corporation and the acquisition of its stock by the American Commercial Alcohol Corporation had nothing to do with the acquisition of any distillery property in Kentucky, did it?

Mr. ALTSCHUL. I really cannot answer that question. I don't know whether there were distillery properties in Kentucky that were taken over in corporate form or not. I am not sufficiently familiar with it to know. There may have been.

Mr. PECORA. You heard the testimony of Mr. Brown that within a month after they made this application to your committee the board of directors of his corporation completely abandoned the negotiations or that which it had in mind with respect to acquiring the distillery property in Kentucky?

Mr. ALTSCHUL. Mr. Pecora, I might say this-I mean I am not trying to question that at all-I am not familiar enough with Mr. Brown's testimony to be sure that I got all the implications of it, but the authority and purpose of the issue which we felt was before us and on which we acted, the actual document, in other words, is the listing application itself. But the comment of Mr. Terrill we considered in connection with it naturally, but the document which we thought covered the actual authorization and purpose was not, either so far as the company was concerned or so far as we were concerned, limited, in our mind, by Mr. Terrill's comment. I don't know whether that has any bearing on what you are driving at, but I wanted to make that quite clear.

Mr. PECORA. Well, are you overlooking the fact that

Mr. ALTSCHUL (interposing). I am not overlooking the implications of that comment, Mr. Pecora. The point really is that the authorization that we granted was the broad authorization covered by the application, and that at the time we gave that authorization there was that comment before us. So the authorization was not in any sense limited by that comment.

Mr. PECORA. Here is a statement contained in committee exhibit no. 64, which is the document that you produced this morning, reading as follows: The applicant companyThat is, the American Commercial Alcohol CorporationMr. ALTSCHUL. That is right.

Mr. PECORA (continuing) : is negotiating for the purchase of what it regards as one of the important distillery properties in Kentucky. The issue of stock up to 25,000 shares has been authorized by the directors in connection with this proposition.

Mr. ALTSCHUL. I don't know whether the point that I am making has any bearing in connection with what you are leading to or not. So if you don't mind, I would just as leave pass it and see if it has any bearing

Mr. PECORA. Who is the author of that statement which I have just read from committee exhibit no. 64?

Mr. ALTSCHUL. That is Mr. Tirrell, who is our chief examiner.

Mr. PECORA. That indicates to you, doesn't it, that Mr. Tirrell had been informed

Mr. ALTSCHUL. Oh, yes; no doubt of it.

Mr. Pecora. By the American Commercial Alcohol Corporation


Mr. PECORA. That that was the specific purpose which the corporation had in mind in connection with this proposed issue of 25,000 additional shares?

Mr. ALTSCHUL. Oh, no doubt about that at all. My only point was that the authority that we granted was based on broader terms than Mr. Tirrell's information would lead us to think.

Now, for instance, if on the listing application Mr. Tirrell's statement had been made as to the purpose and they had limited them

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selves to that specific purpose, and we had acted upon it in that way, that would have confined the listing to that extent.

My only point is that the manner in which it was acted upon was in conformity with the application of the company, and while we had that information and the information had some influence on our decision, the application itself did not take that form. As I say, I don't know whether that has any bearing on what you are leading up to.

Mr. PECORA. But, Mr. Altschul, when the committee acts on these applications, it acts not only on the statements and representations embodied in the application itself, but also on such reports and information placed before it by its own assistants?

Mr. ALTSCHUL. That is true.
Mr. PECORA. Does it not?
Mr. ALTSCHUL. Oh, yes; that is correct.

Mr. PECORA. And its assistants make, or are supposed to make, an investigation or inquiry and to lay before the stock list committee the results thereof in passing on these applications?

Mr. ALTSCHUL. That is correct.

Mr. PECORA. When applications of this kind come before your committee does your committee ever go behind the application or the report of its examiners and go directly to the corporate proceedings of the corporation !

Mr. ALTSCHUL. We get transcripts of the minute books authorizing the issue. We get a copy of the resolution of the board which authorizes the issue. Beyond that we do not go into the corporate records of the company.

Mr. PECORA. Did you get transcripts of the resolution of the board of directors of the American Commercial Alcohol Corporation with regard to this proposed issue ?

Mr. ALTSCHUL. I think so. I think I have it here some place. . Yes, sir (producing document].

Mr. PECORA. May I have the resolution?

Mr. ALTSCHUL (handing document to Mr. Pecora). There is a copy in your files, sir.

Mr. Pecora. Is this all you got by way of a copy of corporate resolutions ?

Mr. ALTSCHUL. Yes, sir; and that is the resolution that is referred to on the face of the listing application in the authority and purpose to issue.

Mr. PECORA. I offer that document in evidence, the copy of the resolution produced by the witness.

The CHAIRMAN. Let it be admitted.

(Transcript from minutes of executive committee meeting of American Commercial Alcohol Corporation of July 19, 1933, was thereupon designated “ Committee Exhibit No. 65, Feb. 21, 1934 ". and appears in the record in full immediately following, where read by Mr. Pecora.)

Mr. Pecora. The document produced by the witness and just received in evidence as exhibit no. 65 reads as follows (reading]:

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