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Mr. RESOR. That is what they loan in every case.

Mr. PECORA. I think that is all of this witness. Have you any statement you would like to make to the committee, or information to convey to the committee, without being questioned ?

Mr. RESOR. I would like just to make this plain, Mr. Pecora. I came to New York in 1908, and we were loaning money then. Probably it had been the practice of the company for years before that. We are loaning it today, and that is a practice not because of the speculation that brought more money in 1929 out into the market, but it is our practice to always keep a large line of call money out so that we can have it any minute we want it.

The CHAIRMAN. How is the demand today?
Mr. RESOR. It is not so high.
Mr. PECORA. It is not nearly so high.

Mr. RESOR. I have no objection to telling you that we have only about $11,000,000 out today.

Mr. PECORA. As compared with a daily average of $69,000,000 in 1929.

The CHAIRMAN. What interest do you get today?
Mr. RESOR. One percent, less commission, and sometimes less.

The CHAIRMAN. It was the higher interest that made these loans attractive to you at that time?

Mr. RESOR. But, Senator, we keep it out at the low rates, as I say, because it is just a matter of principle to us, to have money available when we can get it at any minute.

Mr. PECORA. I think that is all of this witness.
The CHAIRMAN. You may be excused.
(Witness excused.)

Mr. PECORA. There are other witnesses, Mr. Chairman, but the usual hour of recess has arrived. I suggest that we take a recess at this time.

The CHAIRMAN. The committee will now take a recess until 2 o'clock.

(Whereupon, at 1 p.m., Friday, Feb. 23, 1934, a recess was taken until 2 p.m., of the same day.)

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AFTERNOON SESSION

The committee resumed at 2 p.m. at the expiration of the recess.
The CHAIRMAN. The committee will please come to order.
Mr. PECORA. Mr. Sinclair.
Mr. SINCLAIR. Do you wish me to be sworn ?

Mr. PECORA. No; you have heretofore been sworn and are now being recalled.

TESTIMONY OF HARRY F. SINCLAIR, GREAT NECK, LONG ISLAND.

N.Y., CHAIRMAN OF THE EXECUTIVE COMMITTEE OF CONSOLIDATED OIL CORPORATION, NEW YORK CITY-Resumed

Mr. PECORA. Mr. Sinclair, you have heretofore testified before this committee, and in connection with the testimony then given by you it appeared that you were connected with a corporation known as the Consolidated Oil Corporation, I believe.

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Mr. SINCLAIR. Yes, sir.

Mr. PECORA. Now, during the year 1929 what was the corporate name of that corporation!

Mr. SINCLAIR. Sinclair Consolidated Oil Corporation.

Mr. PECORA. You were connected with that corporation that year, were you?

Mr. SINCLAIR. Yes, sir. Mr. PECORA. In what capacity? Mr. SINCLAIR. Chairman of the board. Mr. PECORA. Now, in the year 1929 did the Sinclair Consolidated Oil Corporation make call loans to brokers in New York City? Mr. SINCLAIR. They did.

Mr. PECORA. Did the Corporation make such loans generally throughout that year?

Mr. SINCLAIR. They did.

Mr. PECORA. I show you what purports to be a statement in writing signed by Mr. G. T. Stanford, general counsel of the Consolidated Oil Corporation, entitled :

Questionnaire propounded by the Honorable Ferdinand Pecora, Counsel to the Committee on Banking and Currency, to Consolidated Oil Corporation, and answers thereto by said Corporation.

Will you look at it, Mr. Sinclair, and tell me if you can identify it as a correct statement or answers to the questions propounded in this questionnaire, that was submitted to your corporation ?

Mr. SINCLAIR (after looking at the papers). I do.
Mr. PECORA. Mr. Chairman, I now offer these papers in evidence.
The CHAIRMAN. Let then be admitted.

(The answers made by the Consolidated Oil Corporation to the questionnaire sent by the committee, marked “ Committee Exhibit No. 91, February 23, 1934 ", will be found at the end of the day's proceedings.)

Mr. PECORA. The document has been received as committee exhibit no. 91 of this date and will be spread in full on the record of the hearings. I want to point out that, according to this exhibit, and the schedule attached thereto and forming a part thereof, the Sinclair Consolidated Oil Corporation, as it was called during the year 1929, and its affiliated and subsidiary corporations named therein, made call loans during the year 1929 aggregating in amount $211,000,000. Those loans were made through various commercial banks, the names of which are set forth in this exhibit or the schedule annexed to it and made a part thereof; and that such loans were made in behalf of and by the Sinclair Consolidated Oil Corporation, Sinclair Automobile Service Corporation, Sinclair Pipe Line Co., Sinclair Crude Oil Purchasing Co., and the Venezuelan Petroleum Co.

Now, Mr. Sinclair, do you know the highest amount of such call loans outstanding on any one day during that year that were made by or on behalf of those corporations? Mr. SINCLAIR. On October 9, $17,600,000.

Mr. PECORA. What was the daily average amount of those loans made by your companies during the year 1929?

Mr. SINCLAIR. It was $12,595,636.

Mr. PEOORA. Were they made at the call-money rates that were prevailing at the time?

Mr. SINCLAIR. Presumably so.

Mr. Pecora. Are you familiar with the mechanism or procedure by which your companies made those call loans during that year?

Mr. SINCLAIR. The loans were made through our banking connections for us.

Mr. PECORA. Had it been the custom or a part of the business of your companies to make such call loans generally for any period of time prior to 1929?

Mr. SINCLAIR. Yes. We made call loans in 1928, and I do not recall the other years.

Mr. Pecora. Have your companies made such call loans since 1929 ? Mr. SINCLAIR. Yes, sir.

Mr. Pecora. What would you say was the amount of those loans made by your companies during the year 1929, as to this point: Did they far exceed any amount of similar loans made in any other year! År. SINCLAIR. Yes, sir. Mr. PECORA. And what was that due to?

Mr. SINCLAIR. I would say partly on account of interest rates and partly on account of demand. And also the fact that, perhaps, our corporation did not have funds at other times.

Mr. PECORA. During the year 1929, as you recall it, would you say that the amount of speculation in securities far exceeded that which was witnessed in any other year in recent times, or, say, within as much as a decade or two?

Mr. SINCLAIR. I think so.

Mr. PECORA. This paper, which is committee exhibit no. 91, also states that as of June 15, 1929, there were outstanding. 3.563,502 shares of the common capital stock of the Sinclair Consolidated Oil Corporation, and that certificates representing 2,891,805 of those shares were on that date outstanding in the names of brokers or brokerage firms. That is correct, isn't it, Mr. Sinclair?

Mr. SINCLAIR. Yes, sir; I think so.

Mr. PECORA. The questionnaire addressed to your firm in behalf of this committee asked, among other things, for the following information:

1. The total number of shares of the common stock of your corporation transferred on your books from one ownership to another.

Can you give us that figure, Mr. Sinclair?
Mr. SINCLAIR. Yes. It is 8,910,126.

Mr. PECORA. No. That is the total number of shares transferred on the books. But what was the total number of transfers.

Mr. SINCLAIR. We do not have that information here, Mr. Pecora.

Mr. PECORA. But the total number of shares of common stock transferred on the books during the calendar year 1929 was 8,910,126.

Mr. SINCLAIR. Yes, sir.

Mr. PECORA. About two and a half times the total amount of common stock outstanding.

Mr. SINCLAIR. I think so.

Mr. PECORA. Do you know the total amount of trading that was done in the market in the common stock of the company during the year 1929?

Mr. SINCLAIR. I do not.

Mr. PECORA. Have you any figures that would give us that information ?

Mr. SINCLAIR. I have not.

Mr. PECORA. On what securities exchange was the common stock listed at that time? Mr. SINCLAIR. The New York Stock Exchange.

Mr. PECORA. Can you get the figure showing the total amount traded in as to that stock for that year?

Mr. SINCLAIR. I think so.
Mr. PECORA. Will you send it to our office in New York?
Mr. SINCLAIR. All right.

Mr. PECORA. Can you give this committee now the total amount received by these companies affiliated with the Sinclair Consolidated Oil Corporation, and by that corporation itself, in the year 1929 by way of interest on those call loans?

Mr. SINCLAIR. We have the information for all of our companies except the Crude Oil Purchasing Co. and the Sinclair Pipe Line Co., whose books are in Tulsa, Okla., and we did not have time to get it for them.

Mr. PECORA. Will you give us the figures so far as you are in position to do it now?

Mr. SINCLAIR. The figures show $833,593.24.

Mr. PECORA. That is exclusive of interest paid to these other two companies ?

Mr. SINCLAIR. Yes, sir.
Mr. PECORA. That is all that I want of Mr. Sinclair, Mr. Chairman.
The CHAIRMAN. Then you are excused, Mr. Sinclair.

Mr. PECORA. Mr. Sinclair, is there anything that you would like to give to the committee on the subject of these call loans at this time without being specifically questioned thereon?

Mr. SINCLAIR. I believe not. Mr. PECORA. All right. That is all. The CHAIRMAN. That is all, Mr. Sinclair, and you are excused. Mr. SINCLAIR. I thank you, gentlemen. (Thereupon the witness was excused.) Nr. PECORA. Now, Mr. Chairman, there were sent questionnaires similar in form to those which have been put in evidence here today, to various other nonbanking corporations. The questionnaire called for information concerning call loans made by the corporations to which they were addressed, during the year 1929, and for certain details with respect to such call loans. We have here the answers made to those questionnaires, which I will put in evidence. But before proceeding directly to put these documents in evidence, I want to offer in evidence a recapitulation of the information conveyed in those questionnaires with respect to Street loans made by these corporations during the year 1929 in the call-money market of New York City. This recapitulation has been prepared from the information embodied in the questionnaires, by members of the investigating staff of the committee, and I believe they will be found to be accurate.

The CHAIRMAN. The statement will be admitted in evidence. (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 market of New York City", was marked " Committee Exhibit No.

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92, Feb. 23, 1934 ", and will be found at the end of the day's proceedings.)

Mr. PECORA. Mr. Chairman, the corporations referred to in this recapitulation, which has been marked in evidence “ Committee Exhibit 92”, are as follows:

American Founders Corporation and subsidiaries; American & Foreign Power Co., Inc., and subsidiaries; American Can Co.; Anaconda Copper Mining Co.; Auburn Automobile Co.; Bethlehem Steel Corporation and subsidiaries, Chrysler Corporation; Cities Service Co.; Consolidated Oil Corporation; Electric Bond & Share Co. and subsidiaries; General Foods Corporation; General Motors Corporation; International Nickel Co., Inc.; Pan American Petroleum & Transport Co.; Radio Corporation of America and subsidiaries; Radio-KeithOrpheum Corporation; Standard Oil Co. of New Jersey and subsidiaries ; Tri-Continental Corporation and affiliated corporations; the United Corpora: tion; the United Gas & Improvement Co. and subsidiaries.

Mr. Chairman, I now offer in evidence and ask to have spread on the record, the answers to the questionnaires submitted to the corporations which I have named, in behalf of this committee, and which give details with regard not only to call loans made in the year 1929 by such corporations, but also give detailed information with respect to the number of shares listed of the capital stock of such companies that were transferred on the books of the companies, respectively, during the calendar year 1929.

The first answer to the questionnaire is that of the American Can Co., which shows a total amount of call loans in 1929 of $149,000,000, with an average amount outstanding of $9,424,000, and with the total number of call loans made, 374. The maximum amount outstanding at any one time was $16,000,000, which was for a period of 8 days, January 17 to January 25, 1929.

The CHAIRMAN. Let it be admitted.

(The answer of the American Can Co. to the committee's questionnaire was marked “ Committee Exhibit No. 93, Feb. 23, 1934", and will be found at the end of the day's proceedings.)

Mr. PECORA. Mr. Chairman, the next one is the return to the questionnaire made by the Anaconda Copper Mining Co., and it shows the total amount of Street loans made in the call money market of New York City was $32,500,000, and that the total number of Street loans made by the corporation was 147.

The CHAIRMAN. Let it be admitted.

(The answer made by the Anaconda Copper Mining Co. to the committee's questionnaire was marked " Committee Exhibit No. 94, Feb. 23, 1934 ", and will be found at the end of the day's proceedings.)

Mr. PECORA. The next one is the answer made by the Auburn Automobile Co., and it shows that the total number of Street loans made was 13, and that the total amount was $1,600,000.

The CHAIRMAN. Let it be admitted.

(The answer by the Auburn Automobile Co. to the committee's questionnaire was marked “Committee Exhibit No. 95, Feb. 23, 1934 ", and will be found at the end of the day's proceedings.)

Mr. PECORA. The next return made is in behalf of the Bethlehem Steel Corporation, and, Mr. Chairman, I might call attention to the fact that in this return to our questionnaire, the Bethlehem Steel Corporation stated that the peak amount of call loans out

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