When the investigating U. S. Senators resumed writing their book of Wall Street Revelations in Washington last week, they had a lot of fun with their swart, persistent Inquisitor Ferdinand Pecora. He had just taken a drubbing as candidate for District Attorney of New York County (see p. 16). Inquisitor Pecora said he was "relieved." Dampened not a whit he ripped into the ever-widening circle of horrid-sounding facts that his staff had delved from Chase National Bank's voluminous books.
On Chase Bank's list of syndicate loans were found the names of Alfred Emanuel Smith and John Jacob Raskob. Not troubling to learn more, the Press whooped that Al Smith had been caught dabbling his fingers in a stock-market pool. That night Mr. Raskob hopped down to Washington as a voluntary witness to set the Senators aright.
Messrs. Smith & Raskob had indeed been members of a syndicate to buy stock of their pet little Manhattan bank, County Trust Co. In fact they had been members of two pools. One dark Friday in November 1929 President James J. Riordan of County Trust had shot himself to death in his home. "We, with the help of Governor Smith, were able to keep the news of his unfortunate death from the news papers until Saturday noon when the bank closed," related Mr. Raskob. President Riordan's suicide had nothing to do with the bank but the directors were fearful that depositors would so interpret it. Among the steps taken to avert a run was the formation by the directors of a syndicate to support County Trust stock. At a cost of $916,000 the syndicate bought 3,794 shares. All but 230 shares were taken up by the members two years later when the syndicate wound up and the loan was paid off.
Another syndicate was formed in 1930 to buy 1,000 shares of County Trust so that the directors could offer the inducement of an option to Orie Kelly whom they wanted as a successor to Mr. Riordan. The stock declined, however, and Mr. Kelly let his option lapse. Once again the members were called upon to take up their stock and the loan was paid off. So suavely precise, so frank with his facts was Mr. Raskob that even the Senators could find no fault with his story.
Cutten & Sinclair. Inquisitor Pecora's next witness was not so explicit as Mr. Raskob, but the Senators eyed him much more curiously. He was not only the manager of a syndicate which had cleared $12,000,000 without putting up I¢ but also the biggest stock and grain speculator that the Senators had yet beheld. Spare, white-haired, slightly deaf Arthur William Cutten sat with his hand cupped behind his ear throughout most of the long interrogation on the great Sinclair Consolidated Oil pool of 1928-29. Unsmiling he peered through his spectacles at Inquisitor Pecora whom he could not hear half the time and who could hear Mr. Cutten's muffled replies less often than that.