(4 of 5)
Pools. Most reddening to Mr. Wiggin's face were Mr. Pecora's inquiries about pools in Chase's stock. Half a dozen pools, operated by a subsidiary of Chase Securities Corp. and various brokers in the years from 1927 to 1930, had traded in hundreds of thousands of shares of Chase Bank stock. During one pool the shares rose from $483 to $800. "Was that not a scheme for 'churning the market?' " demanded Mr. Pecora. Mr. Wiggin: I think the market was a God-given market. Senator Couzens: That is a new one. Senator Adams: Are you sure as to the source? Mr. Wiggin: No sir. One pool, run in the God-given market of the summer of 1929, was used jointly by the securities company's subsudiary abd by Shermar Corp., † the Wiggin family holding company, to sell holdings of Chase stock. It sold over 50,000 shares of the Wiggin family's stock at boom prices and besides had a cash profit of $1,452,000 from operations. No crime did the investigators attempt to fasten on Mr. Wiggin but the committee's efforts seemed bent on accusing him of a deadly sin: greed.
Cuba. Most of the investigation's fifth chapter of revelations was about Mr. Wiggin rather than his bank, but the bank —and Mr. Aldrich—came into it strongly on the subject of loans to Cuba. In a secret session of the committee Mr. Aldrich, who was not a Chase official when the loans were made, strongly urged that the subject be pigeonholed in view of the seething Cuban situation. It might lead to more bloodshed. His request leaked out and a Washington newspaper reported that ''Wall Street influences" were trying to keep the Senators from their work. Mr. Aldrich, visibly agitated, demanded a prompt and thoroughgoing investigation of all Chase's Cuban deals, to clear the air. He demanded so insistently that Senator Fletcher banged the table with his fist: "We will do as we please about it, Mr. Aldrich." Flustered Mr. Aldrich murmured: "I'm sure you will."
But Mr. Aldrich managed to say that of the $80,000,000 loaned by Chase to Cuba nearly $20,000,000 had been repaid and interest was being paid on the rest. Every bit of $80,000,000 had been paid to contractors (for construction of the new Cuban Capitol and of a highway the length of the island) on work certificates approved by the Secretary of Public Works. Not a cent had been paid to ex-President Machado or other officials. Later Chase Vice President Shepard Morgan admitted that General Enoch Crowder, then U. S. Ambassador to Cuba, had given "a horseback opinion that the $100,000,000 project would be in violation of the Platt Amendment" and that he had "threatened immediate protest to the State Department.'' This particular loan was never made, but not long afterwards while ex-President Machado's son-in-law was a Chase new-business man in Havana on a salary of $19,000 a year, other loans were made. It was also learned that a former business associate of ex-President Machado had been paid $55,000 for his services in connection with Chase loans.
* Mr. Wiggin testified that he now holds 67,000 shares of the bank's stock, his family 50,000 shares additional—a total once worth $33,000,000.