| Show STOCK PROBE TO CONSIDER RAIL FINANCE Senate Committee Ready to Study Activities of Kuhn Loeb Co By ny LYLE C. C WILSON United Press Staff Correspondent WASHINGTON Juno Senate 26 stock market investigators today completed com corn preparations for Inquiry into banking practices es of ot Kuhn Loeb Co including th underwriting of ot the corporation for which the private bankers received a cash fee of ot Public hearings s begin tomorrow with Otto Kahn music patron and nd philanthropist as the first witness The corporation a a. a railroad railroad rail ran road holding company was organized in the boom timo April of 1929 Inquiry In In- by the house committee on interstate interstate in in- and foreign commerce revealed revealed re rc that interlocking directorates enabled substantially the same mento men mento mento to control both the c tion and the Pennsylvania railroad By Bya a system of voting trust certifIcates certificates cates cafe issued in lieu of stock unlimited unlimited unlimited control of the corporation corporation corporation corpo corpo- ration was vest vested d In a board of trustees trus trus- tees tees tee W. W W. W Atterbury president o ot of the Pennsylvania Railroad company Jay Cooke a director of the railroad and Effingham B. B Morris chairman of the Girard Trust company Philadelphia Philadel Philadel- phia and a director of the railroad RESIGNED IN 1930 Atterbury and Cooke resigned in 1930 and were succeeded by James S. S Alexander chairman of the Guar- Guar ant Trust company of New York and Joseph Wayne Jr president of the Philadelphia National bank Among the fourteen directors and former directors of the corporation corporation cor cor- is Js R. R B. B Mellon brother of Former Secretary of ot Treasury Andrew Andrew An An- drew W. W Mellon Mellons Mellon's directorate expired last year The house committee commit commit- t tee e compiled complIed a list of the corporate connections of ot these fourteen men showing that among them they represented represented corporations and that Mellon Mellon Mel Mel- lon Ion alone was an officer or director of 46 The corporation was authorized authorized au au- to issue 10 shares olno of ol no par common stock It was offered for tor sale to shareholders of the Pennsylvania Pennsylvania Penn Penn- sylvania railroad on a basis of ot one share of for each two shares of Pennsylvania stock An aggregate ag ag- ag of shares represented represented seated by voting trust certificates were issued Records of ot the house Investigation show that in 1930 these certificates were held by from to persons An aggregate of ot voting trust certificates were issued to nominees of Kuhn Kulm Loeb Loch Co Inquiry InQuiry Inquiry In In- is expected to rev reveal l this week whether Kuhn Loeb Co distributed distributed these certificates by the preferred preferred preferred pre list method discovered to have hao been utilized b by br J J. J P. P Morgan Co Co I Secretary of Treasury William H. H Woodin former Secretary of Navy Charles Francis Adams Senator McAdoo McAdoo Mc- Mc Adoo Dem CaL Cat Supreme Court Justice Owen J J. J Roberts and form former r President Coolidge were on the Morgan Mor Mor- gan list in 1929 was None in office at the time Ume The first issue of corpo cot ration mUon certificates numbered offered at 15 to shareholders rs of the Pennsylvania railroad In consideration con con- of ot Kuhn Loeb Loch having acted in an advisory capacity the bankers were given options to purchase purchase pur pur- chase shares in blocks of each at 16 17 18 and 19 Kuhn Loeb also purchased shares share of the first issue at 15 Another L issue ue of shares was authorized in September 1929 at 1650 It was on this latter issue I. I that Kuhn Loeb obtained a cash payment payment payment pay pay- ment of ot for underwriting services As of April 30 1930 the corporation corporation cor cor- had bad issued shares and had received less the payment to Kuhn Loeb With the funds received the Penn Penn- road corporation bought stock or bonds of ot sixteen railroads and stock i In the Bloomfield Hills Country club of Detroit Mich the County club dub stock was to give the president of I the tho Detroit Toledo Ironton Ballway Railway Railway Rail Ball way company membership privileges the house report said |
