Evening Star Newspaper, January 12, 1933, Page 5

RS FAME T MSLED EXCHANGE & Altschul Asks Law for Inde- “pendent Audits of Stock Companies. (Continued From First Page.) Michigan, asked the purpose of the sub- stitution clause. “Kreuger & Toll were doing business in every part of the world,” the econ- omist explained, “and it might have been necessary for them to put other bonds in_this portfolio. “French bonds were dwithdnvm le-pr!u; 1930, he said, “and en equa ?;lue of Yugoslavia bonds were substi- ed. tuted. # “At that time Prench bonds were re- ded as secure, while Yugoslavian g:fls were regarded as distinctly in- ferior.” Couzens asked if there was no “legis- lative remedy” for such practices. “At the moment, I don’t think there is,” Winkler replied. “Wouldn't it help to put the inter- national bankers and accountants 112 jail who permit these things to go on? Couzens asked. Cites Foreign Laws. ‘Winkler replied that Congress might €opy some of the better laws of foreign countries, suggesting the British com- pany act, which makes companies liable for misrepresentation in a prcspectus on_securities. Questioned againyby Marrinan, Win- kler testified that if the collateral back of the Kreuger bonds had not been sub- stituted they would ‘worth about $24,500,000 instead of about $7,000,000. “Do you believe Lee-Higginson & Co. (which' marketed the bonds in this| country) did their full duty to their accounts of the el Y 'S . Durant also was a witness yesterday, he had known Kreuger was sick 80, but he had no definite ons that a disaster was impend- An attorney for Lee, Higginson & Co. in a statement last night said the news was not published immediately, as a matter protection to all security holders. or aj Durant said he was in Paris for con- ferences with Kreuger when he commit- ted suicide. “When did you g:‘mm his business integrity for the time?” Senator Costigan asked. ‘After his suicide,” Durant replied. “Is there any possible basis for the rumor that he is still altve?” “Not in my judgment.” Asked why the news of Kreuger's | death was not given out immediately, Durant_said he cabled the information to his firm in this country, but advised | that it be withheld until the suicide was | announced by the Paris authorities. | He cabled, he said, about 8:30 or 9 |am., New York time, but it was not | given out until after the stock market | closed. Senator Reynolds, Democrat, of North | Carolina, seriously criticized Durant for not making the information public. | Replying to Reynold's questions, Du- | rant said he had not viewed Kreuger's | body but “believed” he was dead becau-- |of information he had received from | associates. | Durant testified that no stock was |sold after his cablegram informing his firm of the death had been opened. Birning told of going to Berlin and Stockholm to check up on the match empire and Kreuger's stories about it, and while this was going on word came that Kreuger had killed himself. mittee’s investigation as a man who bad a leading part in the ‘circum- | stances crowding in on Kreuger when | he put the gun to his head.” Birning waz referred to by the com- | | THE EVENING STAR, \\';\SHINGTOfi, D. C, THURSDAY, JANUARY 12, 1933. = POLICEMEN HELD ONASSAULT COUNT Druggis( Accuses Two Offi- cers of Making Threats With Weapon. A warrant charging two Ninth Pre- cinct policemen with assault with a dangerous weapon was issued by As- sistant United States Attorney Michael F. Keogh in Police Court this afternoon. ‘The men, Privates Luther C. Wise and Jeremiah J. J. Cullinane, are charged with assaulting Dr. George W. Beasley, colored druggist, 241 Virginia avenue southeast, with service revolvers December 8. The alleged offense oc- §o8 1st, Tourist and | curred when Dr. Beas! reprimanded the officers when he they accosted two colored women in Garfield Park e policemen be bond each for arraignment tomorrow. Telephoned Precinct. According to Dr. Beasley's statement, he saw the men, afterwards identified as Wise and Cullinane, stop the women and, after engaging in brief conversa- | tion, one of the men knocked down one | of fhe women. occurred about midnight, as the druggist and two com- nions, Joseph Dent and Mike Brooks, th colored, were leaving the st Dr. Beasley said he yelled, “Hey, what are you doing?” The men, he said, came toward them with drawn re- volvers, and one of them, placing a | gun against his temple, threatened to | blow out his brains “if you say ‘hey’ again.” Then, according to the drug- gist, he was lined.up against a wall with his companions. One of the men pulled Brooks’ derby down over his ears, ne stated. and brandishing the revolver in the direction of the trio, ordered them to run. They ran in different directions, Dr. Beasley to a telephone, where he told the precinct about the JAN. 20th 3rd Class . . . from New York te England and France. .. Ask your local travel agent. Also: S. S. Paris, Feb. 10; M. S. Lafayette, Jan. 28. French Line James F. Nolan. Gen. St, N.W.. Washington, Tel. Met. 14 1129 Ey D. C. Pass. Act.. 10 happenings, and gave the license num- ber of the car In“vhk:h the men had arrived. Later it was found the tags were listed to Wise. Refused to Make Statements. Lieut. John Maloney subsequently found both men in Cullinane’s home, 1100 block of Morse street northeast. When he asked them for an explana- tion of the doctor’s charges, the lieu- tenant said both men refused to make statements. He told Inspector Albert | e J. Headley about the complaint, and h made a report to Mr. Keogh tod The women, Mattie Fort and Virgie Twogood, 100 block of Heckman street southeast, are listed as witnesses. former told Mr. Keogh that the men pulled alongside of them in the car, and after addressing them in familiar terms, one of the men got out and slap- ped her in the face. Both Wise and Cullinane are veteran members of the force. Textile mills of France are adding more workers, FOR YOUR NEAREST NATION-WIDE STORE PHONE LINC. CHANGES IN $10,494,000 |CITIZENS’ ASSOCIATION BRIDGE CONTRACT MADE ELECTS ARTHUR CARHi Golden Gate Project Agreement to|Real Estate Man Named Head of | Be Signed Today as Result American University Park ‘ of Conference. Group. Arthur Carr, real estate operator, was elected president of the American Uni- ' . o | versity Park Citizens' Association last contract for the Golden Gate bridge|pigpy gycceeding Gilbert L. Roder,| project were announced here today by | orcpitect, who resigned because of il project officials following cmferences!h"uh | with representatives of the McClintic- | 3 Marshal Structural Steel Co, success- | The election was held especially to | fill_the presidency. ’m’!'gledd:xfhcuncement said the contract | Resolutions on the Howell Gas Co. will be signed today. The changes, offi- merger proposal and recommending cials said, include monthly payments|that a site be purchased immedi- to the contractor instead of requiring |ately for an elementary school were, the company to incur approximately | ordered to be drafted by Pierce Lough- $2,500,000 expenses before the first pay- | ran. Rodier explained the proposal of t. Senator Copeland, Democrat, of New | By the Associated Press. SAN PRANCISCO, January 12— Minor changes in the $10.494.000 stecl LA L L L L L L York, for establishing a housing comi~ mission to regulate rents. - Women to Hear Miss Engle. SILVER SPRING, Md., January 13 (Special) —Miss Lavinia Engle, director of the Maryland League of Women Vot= ers and a member of the Montgomery County delegation {g the State Legisla- ture, will discuss measures proposed for tax ‘relief and other pending legisla- tion at a meeting of the Woman's Im- provement Club tonight at 8 o'clock in_the Silver Spring fire house. BELDEN IGNITION CABLES ALL CARS MILLER-DUDLEY/; 1716 144 ST.NW. NORTH 1583 UL L L L LA L 1 1 hid LA b A g e g e RYMRLRY LU 00983 -l customers in this case?” Couzens asked. | After a lengthy pause, Winkler said | *I do not think so0.” | “Why?" the witness was asked. | “It is the duty of those who dis-| tribute bonds to the public to see that | when substitutions are made the sub- stituted collateral is as sound as that | taken away,” Winkler replied. il “They should have made it their| business to get the information on the | substitution.” Winkler testified if the substitution had not been made the income from the | collateral today would be $1,681,000 in- | stead of $628,350 now netted, or equal | to $35 to the bond. | The bonds were sold at 5 per cent,| which would net $50 a year interest. | “If all the provisions of the agree-| ment had been carried out,” Winkler sald, “the investors would have had all the protection they could possibly obtain because the applicant agreed to furnish the exchange the annual earn- ings, any action taken affecting the interest, or to notify the exchange of -‘L N\ Nation-Wide Arrow Specials WHITE STAR PHILLIP’S TUNA FISH PORK and BEANS 2 %% 29¢ & = o CIGARETTES GOBEL’S PURE LARD 1 2 rkst 25€ ot $1.19 3 ix 20c¢ _ ODDS and €NDS ® Friday and Saturday at Washington's Finest Men’s Wear Store MEN’S CLOTHING 8 Hart Schaffner & Marx and Raleigh Suits—Light Spring shades; sizes 35, 36, 37, 38, 40 and 42 in regula and 38 stout; also 4 sport suits with trousers and knick- ers; sizes 35 and 40, 40 stout and 42 medium stout; were originally $29.50 $ 1 4 75 pkgs. to $4600................ 4 Topcoats—Sizes 34, 35 and 36 regular, any changes in collateral.” 'S',Who;e‘gjob was it %0 see . that this +was done?” “The company,” Winkler replied, add- ing that the application was signed “Krueger & Toll, by Donald Durant, djrector. | ‘Thirty substitutions in the collateral back of the bonds were made prior to Kreuger's death. each time of inferior securities, Winkler testified. Marrinan asked if the collateral and assets back of Kreuger securities were not being gathered . in Sweden . while America holds the liabilities. “Kreuger and Toll securities, or rather insecurities, were sold in the American market, whereas the collat- eral was deposited in Sweden,” Winkler replied. He testified that a circular issued by Lee-Higginson & Co. in January, 1932, would clearly violate the British com- pany act to which he had referred. “It is a shrewdly and dishonestly drawn statement,” Senator Couzens re- marked. The circular contended that Kreuger and Toll Ameflcar;d certificates “are cur- rently under-priced.” Altschul followed Winkler. - After being sworn, he described his occupa- tion as.that of an international banker. Originally $25 . 46 medium-stout 6 Suits—Light shades; sizes 8 Hart Schaffner & ‘Marx and Raleig! 39 stout; were $30 and $35 8 Hart Schaffner & Marx Blue Overcoats—Sing sizes 38, 39, 40, 41 and 44; were $35........... 2 Hart Schaffner & Marx Overcoats—Heather-brown mixtures; sizes 36 regular and 42 long; were $35 . X 3 Hart Schaffner & Marx Imported Scotch Plaid O shoulders; Prussian collar; black-and-white and brown; sizes 36 and 37; $29.75 and $25 Hart Schaffner & Marx and Raleigh Suits and Overcoats s1 9.15 40 regular, 38 medium, stout; 39 st $12.75 $19.75 vercoats—Raglan $35 and $30 Hart Schaffner & Marx and Raleigh Suits and Overcoats $23.7s Altschul testified the listing of cecuri- | tles on the exchange gave Mo guarantee of their intrinsic value. | “We have to have evidence they have | $42.50 and $40 Hart Schaffner & Marx and Raleigh Suits and Overcoats $50 and $45 Hart Schaffner & Marx and Raleigh Suits and Overcoats MUELLER’S MACARONI &8 SPAGHETTI . ... 2. 19¢ WILKINS COFFEE Wrapped CARNATION MILK . GRANULATED SUGAR WHEATENA in Moisture Proof Cellophane 5. JLe PINK SALMON GERBER'S VEGETABLES CORN Shoe Peg BLUE BELL FLAKO For Making Pie Crust 3 cam 25¢ 2 s 25¢ . 10c . e e And KNOX SPARKLING GELATINE BEE BRAND VANILL Cake Pan 3ipni == 200 10-1b. 45c . v 22¢ A Lo |2¢ . | Qe 20-o0z. v 23C FREE QUAKER HOMINY GRITS & YELLOW CORN MEAL, 2 ;... 15¢ earning power,” he added. “In this| case we were mistaken.” | Describes Group’s Functions. Any unusual features in the agree- | ments of an applicant are noted by an er and referred to the com- mittee, Altschul said, describing the | functions of his stock list group. | “Was this usual routine of examina- | tion followed in the Kreuger case?” Marrinan asked. “Was any special attention given the collateral substitution clause?” “Yes, we were told Kreuger was ac- customéd to make great loans to gov- | emments. It was pointed out there | was no market value on these securi- | ties and therefore par value was used. | “It was generally believed that the audit of Kreuger & Toll stood so high that security was not needed and that its capacity for financing governments should not be hampered.” | Altschul pointed out the agreement required that the Stock Exchange be notified of changes of collateral. | “Did the agreement place respon- sibility for reporting changes on Kre & Toll or Lee Higginson?” | was asked. “Kreuger & Toll. This is the first| experience we have had on this mag- nificent scale of a violation of an agree- | ment and we are now working on a| proposal to have American notify us of substitutions.” “When did the Stock Exchange re- | ceive notification of substitution in this collateral?” “After the suicide of Kreuger,” the witness said. Trace Events Before Suicide. At yesterday’s session, the last two weeks of the Swedish match king's life were vividly recited, and the committee was told American buyers had lost $2 000,000 on a single issue of Kreuger & Toll bonds on which collateral had been substituted. Step by step, events leading to the crash of Kreuger's financial empire were related by witnesses. At one point the committee was told that heavy for- eign holdings of Kreuger & Toll were * sold in America before word of Kreu- ger’s suicide in Paris last March was given to the public. One witness, Ronald L. Redmond, counsel for the stock exchange, said his | firm received $25,000 for drafting the | agreement permitting substitution of collateral on the bonds. He agreed the | srrangement was different from any he had written i past, but defended | it against con e criticism. “You can't make rules to guard against dishonesty in high places,” he said. Chairman Norbeck asserted the Stock | Exchange had approved the agreement | under which the substitution was made. | From A. D. Birning of the New York sccounting firm of Ernst & Ernst came the most vivid story of the final weeks of Kreuger’s life. He detailed his grow- ing suspicion of financial irregularities end of an arrangement for an audit of Kreuger's International Match Co. Birning said he talked with Kreuger in New York on February 28, less than two weeks before the financier com- | mitted suicide. Kreuger gave confused | replies, Birning said. when he questioned the former about $50,000,000 of German bonds held by the match company, | “His explanations,” Birning said, | “were either those of a sick man or | m; of one not necessarily in his right He testified that he gave his impres- | 328.75 533.75 1 Hart Schaffner & Marx Full Dress Suit—Tailcoat and Trousers; size 36-long; was $50 .. s $19-75 16 Rli‘ncon-('ombi ion-Topcoats — Tweed on one sid: gabardine on other side; all sizes to 40; were $20 Whole or STR'P BACON Half Strip |5C FRESH SHOULDERS ™ 10c FRESH HAMS 1. 14¢ PURE LARD . . 3 . 20c PRIME RIB ROAST . <= e CHUCK ROAST s alde <= PORK PACK . .5 33c¢ FOUNTAIN .. HAMS. 20c BREAST OF VEAL . . ™ 10c SHOULDER OF VEAL . 15¢ SAUSAGE MEAT, 2 » 29¢ GREEN LINKS . . . = 19¢ Sliced BACON 1. 19¢ FRANKFURTERS . . 23¢ PORK ROAST . . .™ l4c COOK’S CAKES Pound and Marble ELK GROVE CE,IA_&?.MIE“!"‘E!R hnEsEGs RINSO Soaks Clothes Whiter. POTATOES . . 10 17¢c SWEET POTATOES 3 [0c NEW CABBAGE . .. .n 4c .TURNIPS . . 3= 0c CARROTS . . . . 2 vam | 5¢ YELLOW ONIONS . . 3w 10c GREEN KALE ... 3. 14¢ CELERY e e ICEBERG LETTUCE . . 2t |9c Philadelphia Cream Cheese . 2 »= 19¢ LONG HORN CREAM CHEESE » 2l¢ KRAFL CHEESE . . . .2 e | to | Now 47 Union Suits—Were $1.00, $1.15..79¢ 81 Union Suits—Y/erg.$1.35 to SHIRTS 360 Shirts; white, solid shades and fancies; -attached and neck- band styles; were $1.45 to $1.95. 95¢ 78 Union Suits—Were $1.95 to L A R G 115 43 P. 0. Sweaters—Were $2.89 13 P. O. Sweaters—Were § and $4.95 . 3 Steamer Robes—Were $25.00 ..$8.95 MEN’S HATS AND SHOES Now 480 Shirts—Were $1.65 to $2.50 .. 210 Shirts—Were $2.50 to $3.50 30 Belts—Were 85c and $1. ... 46 Belts—Were $1.00 and $1.50 4 Belts—Were $3.00 Pr. Gloves—Were $1.00 Pr. Gloves—Were $1.50 Pr. Gloves—Were $1.75 . Pr. Gloves—Were $3.50 ... Handkerchiefs—Were 35¢, 50c. . .20c Pr. Hose=Were $1.00 .. Pr. Hose—Were $1.50 pkg. ELK GROVE BUTTER - LB. 33¢ GOLD MEDAL BUTTER . . .» 29 67 Raleigh Hats—Were $3.50 and $5.00 . 54 Knox Hats—Were $5.00 . 59 Knox Hats—Were $7.00 . $5.85 37 Knox Hats—Were $10 and $15 $7.85 5 Knox “Forty” Hats— Were $40 5 Knox “T'wenty” Hats— Were §20 . 37 Pairs Hanan p 7A, 7B and 7C. trustees | $2.85 5 Ties—Were $1 and $1. Ties—Were $1.65 and § $13.50 to $16.50 Ties—Were $1.65, $2, $2.50. B 44 Pairs Raleigh “6” Shoes, Bla Dress Ties—Were $1 and $1.50..50c - e Pr. Pajamas—Were $1.19, $1.39.69c 144 Pairs Raleigh * hoes . Pr. PajamasoWere $1.55 to 116 Pairs Sta-Smooth Shoes . s WOMEN’S APPAREL Canes—Were $3 to $15. to $7.50. Raleigh Fur-Trimmed C i aleigh Fur-Trimmed Coats—Blacks and Collar Bag—Was $5.00 browns; tweeds in blues; tans and greens; trimmed in Pointed Sitka Fox, Necktie Case—Was $7.50. Jewelry Box—Was $7.95 , Persian Lamb, Raccoon and Wolf. 26 coats in this group; sizes 14 to Regularly 20c¢ 4 [9c . mne Ges o e 230 2 15¢ 1 Ib. each STAR SOAP . ceees.95¢ Now $1.50 .$1.45 .$1.95 ..95¢ Blue Seal med. size doz. I pkgs. A Pure Vegetable Shortening o Silk Robe—Was $9. 53 Pr. Shorts—Were 39¢ . 76 Pr. Shorts—Were $1.00 CHARGE ACéO 30-DAY CHARGE ACCOUNTS All responsible men and women are cordially In- vlln-ha to enjoy the eonvenlence of & Charge Account with us, 1-Ib. pkgs. 29¢ Jewelry Box—Was $4.95 ..... 45c6,:l.dj::l — 49c ARGO GLOSS STARCH SRS | SRR PR SURAE o vt 0 o Tooth Brush, Comb, etc.— silk crepes; 3-piece l\‘ni:r?”l;:m::}tl | ' r e T e T RSN R O i e 1 Come B oSl ¢ 75 CRISCO i ek B el ke g3 AMUNDSEN KIPPERED HERRING . . 3= 25¢ 20 R s BEARDSLEY'S SHREDDED CODFISH .« l4c e e vewen. SUNSHINE EDGEMONT BUTTER CRACKERS . . ) KRAFT MAYONNAISE . . . . . . % 18¢ 1310 F Street EVERGREEN PAPER NAPKINS . . 3.%.25¢ WAX LUNCH PAPER ed with Kreuger, wi agreed ’:'-m the transactions involving the | German bonds. | Socn after Kreuger and Durant sailed | g0~ T 0~ ond Birning ‘oliowed. While | ‘?nnpg Wwas ip Berlin apd Stockholm