(2 of 5)
1) That his remuneration from National City bank and its affiliates for the year 1927 was $1,081,230; for the year 1928, $1,341,634; for the year 1929, $1,133,868—a grand total for three years service of $3,556,732.
2) That in 1929 National City through its security affiliate National City Co. had put on the most flamboyant high-pressure bank stock selling campaign in all history. By all manner of devices, National City salesmen had sold 1,900,000 shares of National City stock to the public for some $650,000,000.
3) That National City loaned $2,400,000 to a score of its own officers to help them carry their stock (largely National City) after the crash, that only 5% of these loans have since been repaid.
4) That National City employes on the other hand are still paying (from their salaries) for 60,000 shares of National City stock purchased at $200 a share and that these employes still owe more than the present market price ($30).
5) That National City Bank financed its affiliate's pool operations in copper stocks. That National City Co. put on a whirlwind selling campaign in Anaconda copper in 1929, got the public to buy 1,300,000 shares at about $120 a share. Present price: $5½.
6) That through an issue of its own new stock in 1927 National City Co. bought $25,000,000 of stock in General Sugar Corp., boneyard of National City's Cuban sugar properties. With this cash General Sugar "bailed out" National City Bank's bad sugar loans. The Company has since written this investment down to $1.
7) That to avoid payment of a 1929 Federal income tax he sold 18,000 shares of his National City stock to a member of his family at a $2,800,000 loss.*
Senator Couzens, serving one day as temporary chairman, made Mr. Mitchell squirm when he asked him whether he considered himself a better salesman than a financier. "I understand you have quite a reputation as a salesman and a financier both." Mr. Mitchell did not think the question fair, but replied: "I have rarely seen an executive who has to do with the public and the management of a great corporation who might not be called a good salesman." Senator Couzens: "I would judge you a better salesman . . . and that is no disparagement of your financial ability." Snapped Mr. Mitchell: "Thank you for the compliment."
Senator Couzens: Doesn't it [the bonus system] inspire a lack of care in the sale of securities to the public?
Chairman Mitchell: I can readily see . . . that it would seem so. ... At the same time I don't recall seeing it operate that way.
Senator Couzens: You wouldn't. Only the public would see it after they got the securities. How many of the securities you sold are now in default?
Chairman Mitchell: During a ten-year period our sales were about $20,000,000,000 and I think there has been difficulty . . . in something under $1,000,000,000.
It was easy and natural to wonder why, if all these things were true, the directors of National City had permitted Charles Edwin Mitchell to continue as their chief executive for the past three years. Colyumist Heywood Broun sounded more than usual like a popular spokesman when he wrote: "In addition to reform we should have resignations."