Mr. DAY. Five thousand four hundred bought and 5,400 sold. Mr. PECORA. Do you know what the resultant profit, if any, was to this pool from this trading? Mr. DAY. According to the statement it was $395,238.12. Mr. PECORA. And that was distributed among the various members of the pool in proportion to their respective participations? Mr. DAY. That is right, sir. Mr. PECORA. I show you a typewritten statement purporting to be a tabulation or compilation of the trading done for the account of this pool and the resultant profits. Do you recognize it to be a true and accurate statement or recapitulation thereof? Mr. DAY. I recognize it as a copy of the one that was given to me by our auditor. Mr. PECORA. And do you believe it to be accurate? Mr. DAY. I have every reason to believe every statement he prepares is. Mr. PECORA. I offer it in evidence. The CHAIRMAN. Let it be admitted. (Tabulation of profits of Libbey-Owens-Ford Syndicate accounts was thereupon designated "Committee Exhibit No. 68, Feb. 21, 1934," and will appear in the record in full at the end of today's proceedings.) Mr. PECORA. Operations of this pool, Mr. Day, were designed to create an agitation in the market in the shares of this stock so as to increase the activity in public trading, were they not? Mr. DAY. The object of this pool was to distribute this stock at a profit. Mr. PECORA. At a profit. And in order to do that it had to make an active market? Mr. DAY. That was left to the floor operators. Mr. PECORA. Yes; and that is what was done, wasn't it? Mr. DAY. There was a great deal of buying and selling. Mr. PECORA. By the pool? Mr. DAY. Both. Mr. PECORA. Yes; and for the purpose of helping to make the market more active? Mr. DAY. For the purpose of distribution of stock of a security that was thought to be undivided. Mr. PECORA. Didn't you say before that the market at the time this option was obtained under date of June 1, last, in Libby-OwensFord Glass Co. stock was inactive? Mr. DAY. Comparatively. Mr. PECORA. And that buying and selling was indulged in by the pool under this option in order to create activity in the market so that the pool might thereby be enabled to distribute, as you call it, the stock it had under this option at a profit? Mr. DAY. Yes, sir. The CHAIRMAN. How was the stock quoted when the pool was formed? What was the quotation? Mr. DAY. Senator, I don't remember exactly, but I think it was within a fraction or a point or something of that kind of the price at which this block of stock was purchased. The CHAIRMAN. Do you remember what that was? Mr. DAY. I think it was somewhere around 20. [Addressing an associate:] Have you it there? Around 27 or 272. I don't know exactly. The CHAIRMAN. What was the quotation when the pool was terminated? Mr. DAY. I am just getting it from the record, sir. (Mr. Day and associates examined records.) Mr. DAY. I have not found the records yet exactly what it is. My recollection is that it was probably somewhere around 322 or 33. The CHAIRMAN. What was the course afterward? Mr. DAY. What was the course? It went up, sir. Mr. PECORA. What was the highest price it reached on the New York Stock Exchange during the period of the pool operation? Mr. DAY. Approximately 37, as I remember it. Mr. PECORA. And what date was that reached, do you remember? July 18, wasn't it? Mr. DAY. I imagine it was somewhere around there. Mr. PECORA. Do you know to what figure it had dropped by July 21? Mr. DAY. Around 22. Mr. PECORA. Around 21, wasn't it? Mr. DAY. Well, 21. And at that time I bought on that decline, if my recollection serves me correct, approximately twenty-odd thousand shares. Mr. PECORA. For your own individual account? Mr. DAY. No, sir. Mr. PECORA. For the account of the pool? Mr. DAY. Yes, sir. Mr. PECORA. Áll of which was subsequently distributed at higher prices, wasn't it? Mr. DAY. Yes, sir. I hope so. I am not sure, but I think so. Mr. DAY. I bought it the other day, Senator, for my wife's investment trust and paid 412 for it, sir. It is approximately in the neighborhood of 40 today, or I mean as of yesterday. The company was carefully studied, full analysis taken of it, its directors talked to. I know them personally. I believed that the company had a great future, which is apparently true. Mr. PECORA. Do you know who the specialist was in this stock on the floor of the New York Stock Exchange during the life of this pool? Mr. DAY. I have heard his name three or four times. I read it in the testimony last night. I don't know him. Mr. PECORA. Was it a member of the firm of Hewitt, Lauderdale & Co.? Mr. DAY. That I don't know, sir. The CHAIRMAN. Does the company pay dividends now? Mr. DAY. Yes, sir. The CHAIRMAN. What dividends? Mr. DAY. My recollection is that they are paying a dollar. Mr. PECORA. Redmond & Co. issue market letters for the information of their customers, don't they? Mr. DAY. Yes, sir. Mr. PECORA. During the period of the activities of this pool were market letters issued recommending this stock by Redmond & Co. to its customers? Mr. DAY. I could not answer that, sir. I don't know. Mr. PECORA. Is there anyone of your associates here that can answer it? Mr. DAY. That I don't know. Mr. PECORA. Well, can't you inquire? Mr. PERRY OSBORN. I don't think we did. Mr. DAY. I have no recollection. Mr. PECORA. Will you check that up? Mr. DAY. With pleasure. Mr. PECORA. Between now and tomorrow morning? Mr. DAY. Yes, sir. If I cannot do it tomorrow morning, why, I will probably be able to hand it to you by tomorrow afternoon, because I think the market letter writer will have probably gone by the time I will get him on the phone. Some people are fortunate. They have short hours. The CHAIRMAN. The committee will take a recess until 10:30 tomorrow morning. All witnesses will report then. (Accordingly, at 4:23 p.m., the committee adjourned until 10:30 o'clock on the following morning.) |