Senate Revelations 5:2

The U. S. investigating Senators last week continued writing the fifth chapter of their book of revelations--the chapter of Manhattan's Chase National Bank, its Mr. Wiggin and its Mr. Aldrich. Not so much excitement did the sequel make for the U. S. Press but far more excitement for the characters involved. The characters began to speak their minds in no uncertain terms:

Cuba. Swart Inquisitor Pecora brought a number of Chase's vice presidents to the stand and, more interesting, produced their candid correspondence with one another, procured from the Chase's letter files. One letter told that Jose ("Wood Louse") Obregon, son-in-law of President Machado hired by Chase's Havana branch (at $19,000 a year), had turned out to be absolutely useless for any purpose except entertaining clients; that Machado had used up $9,000,000 of a $12,000,000 pension trust fund. Other letters declared that $18,000,000 had been spent unnecessarily in rebuilding the Cuban Cap itol, that the whole Machado Cabinet had big graft in construction of Havana's waterworks. Finally Inquisitor Pecora himself dammed up the flood of epistolary candor, suppressed one paragraph and a whole memorandum because ''it might lead to acts of violence in Cuba."

The Committee's criticisms of the Chase's operations in Cuba: that the Chase had gotten $40,000,000 owed to it by Cuba refunded into Cuban bonds which were then sold to the U. S. public; that the Chase had in effect unloaded on the public, since Cuba then had a deficit of $7,000,000 for the previous year (not mentioned in the prospectus for the bonds); that the Chase and its associates had taken some $3,000,000 for financing and refinancing $80,000,000 in Cuban loans.

Mr. Wiggin. While Inquisitor Pecora was digging into Cuban matters, he paused and, without comment, put into the record a curt letter written the day before:

"To the Board of Directors of the Chase National Bank of the City of New York, N. Y.

"Gentlemen:

"At the time of the agreement to pay me annual compensation of $100,000 it was believed to be in the best interests of the bank. As that agreement has been criticized, I beg to request that it be terminated. Yours sincerely,

"Albert H. Wiggin"

Four days later he had Mr. Wiggin back on the witness stand and developed facts that were bigger news to other Chase officers sitting in the Committee room than they were to the investigating Senators:

In five years (1928-32) while the Chase Securities Corp. through a subsidiary had made $159,000 in dealing in some $860,000,000 of Chase stock, three of Mr. Wiggin's family holding companies had made $10,425,000 dealing in the same stock. Mr. Wiggin's explanation of the discrepancy was that the Chase subsidiary had been operating in & out on a trading basis to distribute stock to the public; his own companies had been operating for the long pull.

Chase bank officers, some of whom had borrowed money to buy stock at the top (and found difficulty in repaying it), listened in surprise at the tale of their onetime chief's profits. They listened grimly while he told how one of his family companies had been short 60,000 shares of bank stock at the Crash in October 1929.

Newshawks who had not noticed that Mr. Wiggin and Mr. Aldrich were not acting like bosom companions during the hearings, suddenly woke up to the fact that Messrs. Wiggin and Aldrich had never found seats together at the Committee table.

When Mr. Wiggin finished for the day, Mr. Aldrich red-faced and grim, stepped forward, spoke succinctly, leaving no doubt of his feelings:

"In order that there shall be no misunderstanding on the part of present stockholders of the bank as to what the attitude of the present management of the bank is with regard to the participation by the affiliates of the bank in trading accounts in bank stock, I would like to state that it is absolutely opposed to such transactions.

"As a matter of fact, today the Metpotan Corp. [subsidiary that took part in pools] does not deal in Chase stock in any way whatever, and as long as I have anything to do with the management of the bank the market in Chase stock will not be an artificial one."

Mr. Wiggin listened without expression. No accusations passed between the two men. Later with the Committee's permission Mr. Aldrich softened the last sentence to read: ". . . The market in Chase stock shall not be affected by the operation of trading accounts by the affiliates of the bank." Thus, with the best of taste, was defined the difference between the Chase's past and the Chase's present.

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