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HEARINGS

BEFORE A

SUBCOMMITTEE OF THE
COMMITTEE ON BANKING AND CURRENCY

UNITED STATES SENATE

SEVENTY-SIXTH CONGRESS

FIRST SESSION

ON

S. 477

A BILL TO PROVIDE FOR THE REGULATION OF THE SALE
OF CERTAIN SECURITIES IN INTERSTATE AND FOR-
EIGN COMMERCE AND THROUGH THE MAILS,
AND THE REGULATION OF THE TRUST
INDENTURES UNDER WHICH THE
SAME ARE ISSUED, AND FOR

OTHER PURPOSES

FEBRUARY 7, 8, AND 9, 1939

Printed for the use of the Committee on Banking and Currency

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ROBERT F. WAGNER, New York, Chairman CARTER GLASS, Virginia

JOHN G. TOWNSEND, JR., Delaware JAMES F. BYRNES, South Carolina

LYNN J. FRAZIER North Dakota
FRANCIS T. MALONEY, Connecticut

ROBERT TAFT, Ohio
JAMES H. HUGHES, Delaware
CLYDE L. HERRING, Iowa
JOHN E. MILLER, Arkansas
SHERIDAN DOWNEY, California

II

LIBRARY OF CONGRESS

MAR 1 o 1939

DIVISION OF DOCUMENTS

A2A5

1939 a

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Statement of-

Page

Amberg, Harold B., vice president and general counsel of the First

National Bank of Chicago, Ill...

72, 73

Anderson, William E., vice president and trust officer of the Central

Trust Co., Cincinnati, Ohio, and president of the Cincinnati Corpo-

rate Fiduciaries Association, Cincinnati, Ohio---

186

Burke, Jr., Edmund, Assistant Director of the Reorganization Divi-

sion, Securities and Exchange Commission, Washington, D. C--

57

Canright G. S., counsel for corporate trust division, Continental Illi-
nois National Bank & Trust Co-------

-- 143, 161
Douglas, Richard S., assistant counsel for the Cleveland Trust Co.,
Cleveland, Ohio----

185

Eicher, Edward C., Commissioner, Securities and Exchange Com-

mission.-

17, 31, 38, 41

Hanes, Robert M., first vice president and formerly chairman, com-

mittee on Federal legislation, American Bankers' Association;

president, Wachovia Bank & Trust Co., Winston-Salem, N. C---- 51

Helffrich, G. R., trust officer, City National Bank & Trust Co.,

Chicago, Ill.

187

Mitchum, Colis, of San Francisco, Calif., member of the Federal legis-

lation committee of the Investment Bankers' Association---

133

Oliver, Fred N., general counsel, National Association of Mutual Sav-

ings Banks, New York City--

55

Page, R. G.,, chairman, committee on mortgage trusteeships of the

trust division of the American Bankers' Association -

69, 188

Starkweather, John K., chairman of the Federal legislation committee

of the Investment Bankers' Association of America---

99

Sullivan, John J., of Sullivan & Co., Security Bunlding, Denver, Colo.,

member of the Investment Bankers' Association, committee on Fed-

eral legislation

123

Exhibits :

Copy of Senate bill 477-

1

Analysis of bill--

19

Summary of defects in trust indentures---

35

Analysis of Securities Act registration statements.

39

Telegram submitted by Mr. Amberg in behalf of the banks in Minne-

apolis, Minn---

94

Telegram submitted by Mr. Amberg in behalf of the City National

Bank & Trust Co. of Columbus, Ohio----

95

Letter submitted by Mr. Amberg by officers of the City National

Bank & Trust Co. of Chicago, Ill---

96

Memorandum on S. 477, submitted by Mr. Starkweather on trust in-

dentures from the Investment Bankers' Association of America- 122

Geographical distribution of trusteeships under Securities Act regis-

trations for 2 years and 8 months ended December 31, 1938---

128

Letter to Hon. Robert F. Wagner from T. Jefferson Coolidge, chair-

man, Old Colony Trust Co., Boston, Mass..

190

Letter to Hon. Robert F. Wagner from the Pittsburgh bankers--

190

Letter to Hon. Robert F. Wagner from H. J. Miller, trust officer,

St. Louis Union Trust Co__

193

Telegram to Hon. Robert F. Wagner from W. H. Thompson, executive

vice president, California Bank, Los Angeles, Calif.

194

Telegram to Hon. Robert F. Wagner from T. C. Scroggs, president,

California Trust Co., Los Angeles, Calif-

194

Telegram to Hon. Robert F. Wagner from V. H. Rossetti, president,

Farmers & Merchants National Bank of Los Angeles, Calif.

194

III

TRUST INDENTURE ACT

TUESDAY, FEBRUARY 7, 1939

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON

BANKING AND CURRENCY,

Washington, D. C. The subcommittee met, pursuant to call, at 10:30 a. m., in the committee room of the Senate Committee on Banking and Currency, 301 Senate Office Building, Senator Robert F. Wagner (chairman) presiding Present: Senators Wagner (chairman),

Glass, Maloney, Hughes, Herring, Downey, Miller, Townsend, and Taft.

Present also: Senator Alben W. Barkley.

The CHAIRMAN. The subcommittee will come to order. This hearing is upon the bill (S. 477) introduced by Senator Barkley. A similar bill was introduced 2 years ago, and received a very thorough hearing by the Committee on Banking and Currency. It was later, after hearings were had upon it, favorably reported by the committee. However, the Senate did not reach the bill in the closing days of its session. The Barkley bill is a bill providing for the regulation of trust indentures.

Before we proceed to hear witnesses, I wish to have printed here, as a part of the record, the bill under consideration, being Senate bill 477.

(Senate bill 477 is as follows:)

[S. 477, 76th Cong., 1st sess.)

A BILL To provide for the regulation of the sale of certain securities in interstate and

foreign commerce and through the mails, and the regulation of the trust indentures under which the same are issued, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act entitled “An Act to provide full and fair disclosure of the character of securities sold in interstate and foreign commerce through the mails, and to prevent frauds in the sale thereof, and for other purposes," approved May 27, 1933, as amended, is amended by adding at the end thereof the following:

"TITLE III

"SEC. 301. This title may be cited as the “Trust Indenture Act of 1939.'

“NECESSITY FOR REGULATION

"SEC. 302. (a) Upon the basis of facts disclosed by the reports of the Securities and Exchange Commission made to the Congress pursuant to section 211 of the Securities Exchange Act of 1934 and otherwise disclosed and ascertained, it is

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