The Courier News from Blytheville, Arkansas on October 25, 1934 · Page 7
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The Courier News from Blytheville, Arkansas · Page 7

Blytheville, Arkansas
Issue Date:
Thursday, October 25, 1934
Page 7
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THURSDAY, OCTOBER 25, 1934 PUTS SPOTLIGHT ON ILL STREET Stock Market Inquiry The Most Searching Ever Conducted by Senate A revealing picture of the conduct of the Sena'le's investigation of no-longer sacrosanct Wall Street is contained In the following article, the fourth in a series of six MTitten for Ibis newspaper by John T. Flynn, famed economist and journalist. In preceding articles, Flynn has looked backward at llic stock market crash anil ils causes, the depression years and events leadin; up to a governmental Investigation of Wall Street activities :. BLYTHEVILLE. (ARK.)' COURIER NEWS Turning on the Light BY JOHN T. FLYNN NEW YORK, Oct. 25.—The Sen- alt's Pecora-conductcd Inquiry Into Wall Street was the most Important and fruitful invcstigaton In our legislative history. It went deeper Into fundamentals than the famous Pujo money trust inquiry. It iiad more substantial consequences. The hearings began April 11 1932. They ended on May 1, 1934 Before Ferdinand Pecora passed in doleful procession such an array of industrial and financial barons ns has adorned no other similar spectacle. As I watched this amazing parade I could not resist the feeling Uiat society, like nature, has a way of paying off all scores. Here was Ferdinand Pecora, small, swarthy, born in Sicily, the son of a shoemaker, calling before him one by one the giants of the land to answer for their stewardships. There were men .on that Senate Committee who did not relish the scene— men who resented the spectacle of an exalted figure like J. P. Morgan, a pure-blooded American, subjected to seizure and search by this little Sicilian shoemaker's son. That resentment explains many things which happened on the committee. And yet to me one of the startling contrasts of the hearings was the quiet, dignified, patient and never- failing courtesy of the shoemaker's son compared with the boorish, violent and abusive conduct of at least one or the aristocratic senators who continually balked him. • ". » • V • - A word here-about the teehnique of-the".investigation. When Charles Mitchell ,-was on.the'stana "Peco'ra : asked'-him! innocently about his Income tax return. Mitchell answered completely, .revealing the facts upon which he was later Indicted. . Why ,did he do it, many asked at the hearing? The 1 answer fs that Mitchell knew Pecora' had in :his hand ' when' he'-: asked his question a-complete report on Mi£' chell's personal 'affaifs.- Pecora' never put-a .witnesVqh'.the.-starid'urUU he had-made -an.exhaustive exani-- ination- of the, subject'.that witness \vould .testify, to.. '.'..' ', .' ' ' . He had. a large number qi'-eji- perts of all sorts^accountarits, statisticians,-, "lawyers, • ecoriqmlsts Investigators. ' They spent a whole summer in. ' Ihe Chase." National Bank.- When-Albert-Wiggin went on the stand Pecora had his whole history as:head of-the great Chose bank in his hands. • Here are ; two hitherto untold yet important incidents. .Pecora's investigators could go into the National City Bank but they couldn't go Into Mitchell's private accounts While.Pecora was delving into the bank's affairs, Mitchell decided he wanted to have a little vacation in Europe. But he was under subpoena from Pecora. His counsel took him to Pecora's office. Pecora very blandly and innocently observed that it would be all right, but that from time to time he would want information which only Mitchell could give and if Mr. Mitchell would leave word with his secretary to make his private flies available, it would be quite oil right. Mitchell, In his eagerness to°go away for a little rest, agreed That sfip was his downfall. That was the most costly vacation any man *' " W ° S thcse papcrs whlch up the damning facts about ,,, V. 0 "" 10 ta t and personal prof- hk * Isc 1 tlre >y Po^Nc that had this damaging testimony not been brought out the investigation migh" have been suppressed •.•••' When Pecora started to probe the Chase, officials of the bank went to him and announced that they had. begun an investigation of their own. Also they promised they would deliver to Pecora the results of their examination Wle- gin had retired on a hundred thousand dollar a year pension. The men who took charge were not his friends. Pecora made his investigation and the chase officials made theirs In their own bank. But when the hearings began and Pe- GHONE 134 FARMERS BANK & TRUST CO. INStTKANCK MPT. Wall,'street feels the probing fingers of the Pecora committee. cora started to reveal the amazing schemes and speculations of wig- gin In' the stock market, the Chase officials' were themselves astounded. Pecora had found out more ibout- their bank.'than they had learned themselves. '. . . . Kis method was to give -iiis investigators a free, hand, merely keeping in touchVwith what, they, were doing and offering occasional suggestions and .directions. When finished they were required to make complete .reports, . compreheiisive financial statements, summaries of what-each witness could tell, etc. Each day, . after the .exhausting hearings, Pecora 'would \yalk with members ot 'his/staff to his hotel where he' would sleep until about seven. Then'-with his closest ad- 'isers he would go to dinner. Thai was always a gay, happy meal, lasting perhaps until' ten o'clock, with hardly any reference to the investigation unless some of its.'rnore humoroiis aspects. Theri back to the hotel and perhaps a'little card game until .eleven. ,..'-. .. '•,•.• • • .v - ':' . A, dozen'investigators would : be waiting. About eleven'Pecora would BO into a. huddle; with these-'men lasting until- two or' three in 'the morning. 'Next day he would question the witnesses with an assurance and a knowledge of the subject which .continually.. astounded his assistants.-: :He never gota iiam& or a-ligurc *'rong.;.:His':(!oi6'ssa'l jbb was - made.; possible;-, becaiisfe' 'of : li is amazing memory.'. ,v"-j.-: •••;,•• '• .' ....... -_., ... .:..,.,-. ,, ; , . , , .,_; •'. Tile ire'cqrd; of .'tlif \invesfigatibii comprises 23 .volumes-of 9,316 :pagcs And there,will- be-aiiother volume or two. It is one ,of the most valuable, most Illiimlnatin'g and most important documents ' in ou'r economic and social'History. ' "'' Here are some of its more important fruits in the field of flnan- cial and economic- knowledge. • • .1. Short selling, rtr the first time a mass of dnta about short iing, hitherto - unknown, was brought to light. There were bear raiders in the market in 1931, but it was fairly clearly shown that they -were not responsible for the irresistible declines. This was the result of the disintegrating business situaaon 2 - Pools. Exchnnge officials havej always officially pretended to be unaware hi the 'existence of i»ols. This hypocritical mask was completely taken from these pious countenances. One of the Radio pools, managed by Mike Median, an exchange broker and specialist In Radio, was completely 1 exposed. Not only that, but the participation of many leading bankers 'iitid distinguished cor- poration'executives in this pool was described. . Numerous other pools. In Indin,n Motorcycle. Anaconda Copper, Cel- otex.. Bor» Warner, Warner Bros U. S. Finishing, American Commercial. Alcohol, National Distillers and many other issues were completely studied-and-rcveated for the edification of.the.public.and the enlightenment of the student. It was shown conclusively-that .these pools were-participated In by brokers and specialists, on the Exchange who were supposed to protect their clients. ^. Investment bankers. For' years it has been urged, Uiat ^investment banking .and commercial bankius should be separated. ;Thls invest!-' gallon-showed how the firm of Morgan, among others, maintained what was called their preferred list This was a list of leadin^ bankers corporation executives and many prominent statesmen who were glv- enitlie.opportunity to get In on the .ground: floor ..when they were ready tO:.dl5(rlbute;a< new. issue of stocks r, iTniSi: .was: part< of., the. evidence showing the .control exercised'by in- ivestnieot .bankers:,- over ;induslrlM corporations, -.Investment' companies .and, banks:-...- •:-.:-.,,.-. . .4..:Baniss.-The:commlttec investigated- the,. National city and the Chase .National, Banks of Neiv York, the Detroit.Bankers Corporation and the Guardian Detroit Union banks in Detroit and the union'Trust •.Company and Guardian Trust Company in Cleveland The evils, exposed were chiefly three, .(ir The baleful influence of Threatened and Beat Bride : BELLAIRE, O. (UP) — Herman Wells threatened ' twice to throw 1 , li \ brldc of lfl st 'February into the aathtub and evenlually beat her badly, Maymc Wclll charged hi a suit for alimony filed 'in. common pleas court here. ' ' HOTEL NOBF,E ' Is Now Agent For American Airlines, inc. Call 835 For / Information and Reservations COWS THE. RZGHT PLAN of f «* and the right f ce<J Cttl> make a cow > money-maker today. We have bo come in and let's talk h over. holding company bunking under which promoters have gotten control of banks just as they have gotten control of utility compare ies. Under tills system banks were run as rieparlmenls In the rackets of promoters. (2) The perils Q' the bank iifllllnlc, such ns 111? affiliates of the National city and the Chase. These ninilnles served the same purpose as putting property In your wile's name. It w:is 'Jon; to evade the laws passed to proloct depositors. (3) The danger of per- milling bankers lo speculate ,nud i:se the funds of their banks. Albert Wiggiii, chairman of Die Chnsc, wns shown to have maintained secret personal corporations, to which hi! loaned Hie bnnk'3 money in order to permit them to speculate In the stock market. In the bank's stocks with the bank's .funds. 5, Investment trusts. The Dillon. Read trusts and the (nsull trusts were studied. In the first'the shameful c/fecls or permitting investment bankers, who are sellers of securities, to get possession ol iveslment trusts which are was, glaringly shown.'. buy-; As Baiiptmann Watched Legal Battle --*- '^•^•^•^^^•a ^ ^^^»i i C. Speculation. Tha whole subject I speculation was submitted to the lost searching study that has ever,- ,.been made of the subject, while [ , *»j dramatic hearings were in progress. a corps of investigators,' accountants, lawyers and economists made nn elaborate study of nil the slock exclumges of the country Students interested in (His subject should try to' secure Volumes 13 Id 17 of the reports where these extensive studies are. printed. • The most Interesting' points do; 'eloped were (1) complete studies )f several pools, following thcnj .from beginning to cud, through' scores of brokerage offices; their daily tradings, methods of acciimu- atlon and boosting prices and un^ oading. ( 2 ) Pncjs ft b D11 t the fimfc-' lions of brokers. Pecora showed for Instance, that practically all' Ihe stock gambling Is done by not more than people and not "the wliole population" as the exchange contended and that, most of It is done by brokers themselves Mr their own account. (3) That the exchange was under the dominion of Its gambling clement. (4) That It made no real effort lo protect the public and that listing meant almost nothing, of l»reat Investigation. Fruics of Clear Lake News Mr. uncl Mrs. Jlminle Alford spent, Sunday with Mr. and Mrs Marvin Crouch. Miss Cluribrl Hast spent the week, end with relatives nt Die l.ukc. Mrs. Mamie Hancock spent the week cucl with Mr. nnd Mrs. Glenn Alexander of Lone Oak. Miss lionise Via spent Saturday night with Miys Olive East. Homer Lewis, of licclfuot Lake Is vlslllng Mr. nnd Mrs. Mclvin' Whitcliead. Mr. niul Mrs. Dan Heard spent Saturday nlglit with Mr. and Mrs Ollm Vin. Mi', mid Mrs. Burnett, of Yarbr'.v spent Sunday with Mi and Mis. J. W. Btnllines. Mrs. Allen Hood Is 111 this week. Mr., nnd, Mrs. Urbnh Ilnynos silent Sunday w|th Mr. nnd Mrs. Joliei Taylor. George Gilbert is visiting- relatives at .w'etner. Ark. His tucc ever stolid cm-pi ivlim (,i 1( . s iioi,s about the Undbfri.Ii murder nrom-cd him to fm-y, Bruno Hnmilmami followed Ihstnnly every move in the legal battle over his extradition to New Jersey The cnndld camera reveals the uniformity of his expression no 'muter what his allllude or concern of Ihe moment, whether H ,!« listening lo testimony (above), testifying deft above) or study- Ins the Lindbergh rnnsoin notes (below). -Moon There will be n bingo parly nt .lie Half Moon school Friday night for Ihe benefit, of the Euwor'th League. Everyone Is Invited. Mr. and Mrs. N. J. Jones, Mrs. Wilma 1'eenle.s, and Mrs. H. D. Shaneyrelt attended the Baptist, convention til Little River Suilday "ftenioon. : : ••. Mr. and Mrs. Earl Shaneyfelt nnd son, Billy, spent Sunday night with Mr., and Mrs. T. J. Bnss of Dell. The canning club is sponsoring i chicken dinner anil community air. All members nnd others who used .the canning kitchen 'are Invited lo come and . bring . lunch . baskets. There will be for the kitchen. a shower Head Courier News \yarit Atti. Keiser News Notes 3Q - Piocc «is *"•> to •» u.-ed to help . ilnnnc-c (he girls' drum corps. Those from Kelscr who attended Ihe council of the Methodist church in Luxorn Sunday were Mr. nnd Mrs. Lowe, Mr. nnd Mrs H P. Dimnvant, Mr. j. u. WattK, ami Mr. j. H. Tucker. Alter the 'meet- Ing they and 12 oilier miesls enjoyed u dinner served by Mrs, Nelson. •Several carloads of people- from Hughes were here Friday to witness their lennvs 13 lo 0 victory over the Kctser Ycllowjnckcls. Mr. E. C. Onrrett spent the week-end with his brother, Dr W n. Garrelt, In. Little Rock. Miss Barbara Hnlre visited friends In Memphis Saturday and Sunday. • Plans arc being mode for a Hal- lowe'en Carnival 19 be held In Ihe schoolhousc the night of October .., ,., - , "JMiiu my o' Miss Minnie iJclle Slmw spent ] (be sleeve o the week-end with her brother,[off." Claude Slmw, In Wilson. Paul Potter al WIdmar, Ky. was Ihe guest 0 ; Miss Ezclla Diet/. Sunday. Mrs. Spence Williams, first grade teacher, wns confined to her-home by Illness Mondny. Mrs. Jess Powers acted ns substitute In her place, Rov. Edgar Carney of Joncsboro was reelcctcd as pnstor of Ihe Baptist Church of- Keiser for another year. •. ; A party was given In the school gymnasium Tuesday night for Ihe football players and the drum corps girls. Aboiu thirty-five were present. Bunco and other gnmcs were played. Refreshments consist- Chair Sitting Sleuth Recovered Wrist Watch . BOSTON. (UP)-\Vlthout movin" i from liis clmlr nl W.uicn Avc'nue pollce station, P.itiolman John Haurlhim recovered a v,ilsl watch valued nt $5.006. . : Mis. Dorothy. SpnuUIIng reported she lost her i diamond-encrusted wnlch In 'tv taxi-cab oetween< u Stewnri filreet enrage and > her home. ; . \ "Try turning llic clothes you wore Inside, out,", suggested Hoiiri- hnii. .-. , Lntcr Mrs.' Cplulding ad\ Hm that she had found the iwitch In the lining O f n sleeve of her CTcning wrap. ' "How In the world did you know It was there?" she asked. I "Intuition." replied the policeman, "i remember the time r | found my .bake. Head Courier New-, Wnnt Dr. Floyd D. Howto?, Dentist Announces (lie open- of an office for clenjal practice in the Lynch building / Broadway. on South' / ( Good Taste/ CASH FEED STORE Illl. T6. Amnlrln Tcbimi Coiot JLuckies are round, Luckies are firm, Luckies are fully packed with only the clean center leaves -these are the mildest; leaves-^ •-.', • : r.± they cost more-they taste better. "It's toasted" l/V 1 Y 1 cirr tkroal firottrthit—etatiut irrltttitn — ttfaiit 11 (

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