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TABLE IV.- Detail of loan authorizations to companies in the iron and steel industry through June 30, 1940

To pay delinquent taxes, to assist in Direct loan; repaid in full, October

financing the purchase of polishing 1942.
machines, rolls, reels, etc., and for

working capital.
To pay outstanding indebtedness, to Direct loan; authorization reduced to

pay delinquent taxes, and for work. $100,000 in March 1935 at request of
ing capital.

borrowers; disbursements totaled
$60,000; undisbursed portion of au-
thorization canceled; repaid in full,

January 1940.
(The first loan was an immediate par-

ticipation in which the bank's share

was $10,000; the second and third
To pay delinquent taxes, to rehabili loans were direct loans; all loans were

tate blast furnace, and for working fully disbursed; the borrower was
capital.

placed in receivership in December For working capital..

1937; the collateral securing these
.do.

loans was acquired by RFC at fore-
closure sale and subsequently sold
for more than enough to recover the

funds adranced.
The first loan was an NRA loan made

to Pennsylvania-Maryland Mort

gage Corp. for relending to borrower
To improve current financial position

named; the note was transferred to
and for purchase of sprinkler system.

RFC in January 1937 and was re

paid in full in April 1937, the second
For working capital

and third loans were direct loans,
For new equipment and for working

and were fully disbursed; company
capital.

was placed in receivership in Decem ber 1938; the collateral was sold by the

receiver and a loss to RFC resulted.
Loan was part of a reorganization plan; Deferred participation loan; bank's

included in proceeds were funds for share $250,000; repaid in full in April
acquisition of 2 cold reduction mills, 1945.
a skin-pass mill, and an electrolytic
cleaning and shearing line together

with auxiliar equipment.
To refund bonded indebtedness, for Direct loan; no disbursements were

working capital, and to purchase a made on this loan and the authorizaForen tube rolling mill.

tion was canceled in May 1936.

Follansbee Steel Corp., Pitts

burgh, Pa.

Hot rolled bars.

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Hind Steel Co., Union, N. J... Cold-rolled strip.
Ivins' (Ellwood) Steel Tube Cold-drawn seamless tubing

Works, Oak Lane, Pa.
Janson Steel & Iron Co., Co-Hot-rolled bars.

lumbia, Pa.
Kilby Steel Co., Inc., Anniston, Ingots, hot-rolled bars, and
Ala.

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Hot- and cold-rolled strip

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Medart (Fred) Manufacturing Turned and polished shaft

Co., St. Louis, Mo. (now ing. gray iron castings.

Medart Co.).
Mercer Tube & Manufacturing Steel pipe and tubing.

Highland Iron & Steel, Inc.,

Terre Haute, Ind.

forgings.

McLouth Steel Corp., Detroit,

Mich.

Co., Sharon, Pa.

To provide working capital and to Direct loan; borrower was newly or

assist in financing the purchase of ganized for purpose of acquiring and plant facilities.

operating idlo facilities owned by American Chain & Cable Co., repaid

in full in December 1942. To refund debt, to purchase new Direct loan; repaid in full in November

machinery, and for working capital. 1941. For payment of delinquent taxes and Direct loan; no disbursements made; for working capital.

company requested that authoriza

tion be canceled in September 1936. To assist in reorganization plan. Direct loan; no disbursements were

made and authorization was subse

quently canceled. To refund bank debt and for working Deferred participation; bank's share capital.

$60,000; repaid in full in November

1941. To improve current position through Direct loan; repaid in full in December

payment of notes and other accounts 1939.

due. To retire bond issue and for working Direct loan; $176,250 of this authorizacapital.

tion was disbursed, balance was
canceled; disbursed portion repaid in

April 1939.
To improve current position through Direct loan; borrower was in receiver-

payment of mortgage and other ship at the time loan was authorized;
accounts due.

unrepaid balance of $75,000 was

refunded by second loan.
To refund balance of first loan, to pay Deferred participation; bank's share
bank debt, and for working capital. $50,000; bank requested termination

of participation agreement in August

1942. To assist in reorganization plan by Direct loan; authorization reduced to

payment of delinquent laxes, provi. $315,000 in Feb., 1937; disbursed porsion of working capital, and for mod- tion of loan repaid in full in Septemernization of acetic acid plant.

ber, 1943. For additional working capital.. Direct loan; $22,500 disbursed; balance

of authorization cancelled; disbursed

portion repa id in full in Oct. 1939. Toimprove current position by replen. Deferred participation; bank's share

ishing fundsexpended for capital im. $150,000; repaid in full in Oct., 1939. provements, to add a 30-ton electric furnace, and for working capital.

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Newberry Lumber & Chemical Charcoal pig iron, lumber,
Co., Newberry, Mich.

and wood chemicals.

50,000

March 1938.

Rotary Electric Steel Co., De Ingots, hot rolled products, troit, Mich.

and cold finished bars.

750,000

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TABLE IV.- Detail of loan authorizations to companies in the iron and steel industry through June 30, 1940Continued

Tennessee Products Corp., | Ferro alloys, charcoal pig

Nashville, Tenn. (now Ten. iron, coke, coal, and chem. nessee Products & Chemical icals. Corp.)

Wheatland Tube Co., Philadel Butt weld steel pipe.

phia, Pa. Wickwire Spencer Steel Co., Pig iron, plain and galva

Worcester, Mass. (acquired by nized wire, wire rope, fabColorado Fuel & Iron Corp. in ricated wire items, and 1945).

hardware.

Source: Industrial Analysis Branch, Budget and Reports Division, Ofice of the Controller.

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Table V.-Number and amount of loans authorized to companies in the iron and steel industry through June 9, 1950

Number

Type of authorizations:

Total

55
17

Direct loans
Participation loans.

RFC's share

Banks' share.
Use of proceeds:

Total authorized

I Number count does not include the Kaiser Co. refunding loans.

Includes $11,500,000 of new money authorized in Kaiser Co. refunding loans.
3 Includes 6 authorizations totaling $374,200 which were liquidated through bankruptcy and foreclosure proceedings.
* Includes 2 authorizations totaling $6,350,000 which are only partially disbursed.
Source: Industrial Analysis Branch, Budget and Reports Division, Office of the Controller.

DAVIS, POLK, WARDWELL, SUNDERLAND & KIENDL,

15 BROAD STREET,

New York, N. Y., June 2, 1950. Hon. EARL C. MICHENER, House of Representatives Office Building,

Washington, D. C. DEAR MR. CONGRESSMAN: As one of counsel for the defendants in the so-called investment bankers antitrust suit in the Southern District of New York, I was interested to note in the proceedings of the Judiciary Committee's Subcommittee on the Study of Monopoly Power on April 25th, your success in ascertaining from counsel to the Subcommittee the source of four documents offered by counsel "for the record.” This offer was apparently made at the beginning of the hearing that day, and had no relation to any matters being testified to before the Committee. The colloquy appears at pp. 854–7 of the Stenographic transcript April 25th.

The Government's suit under the antitrust laws against 17 investment bankers was commenced in October 1947 and has not yet been brought to trial, although the defendants attempted to begin trial in April. Various efforts have been made by unidentified persons enjoying some connection with the Department of Justice to try it before Congress in preference to trying it in court. I beg leave particularly to call to your attention the following:

1. The four documents placed in the Subcommittee's record by counsel were exhibits for identification 133 and 143 marked on the deposition of John Schiff of Kuhn, Loeb & Co. and 1189 and 1208 marked on the deposition of Monroe Gut. man, of Lehman Bros. Both of these firms are defendants. Neither deposition has been offered in evidence nor have any of the four documents, since the trial has not yet begun.

2. The four documents are dated at various dates between 1927 and 1936, the oldest thus being 20 years before the suit started and the most recent being 11 years before.

3. The complaint in the Government's suit against the investment bankers is filled with general charges of monopoly and urilawful combination. These charges the defendants have denied and expect to show to be false in all material particulars on the trial of the action. While awaiting trial (which the Government has deferred) we protest against any attempt to try the case before Congressional committees, where the right of confrontation and cross-examination does not exist and where indeed Congress does not want the atmosphere and tactics of a trial because they would be no aid to legislation.

I call attention to the fact that, as shown in the index to the last two volumes of proceedings of your Subcommittee, Serial No. 14, Parts 2A and 2B, the inrest. ment bankers suit has nevertheless been brought into the record by reference at least eight times, sometimes by remarks of the Chairman, sometimes by accusation and charges of Cyrus Eaton, a witness whom we doubt that the Government will venture to bring before Judge Medina.

4. The former chief trial counsel on the Government's staff, Roscoe E. Steffen, who framed the complaint, has left the staff and is now a Professor of Law at the University of Chicago. Mr. Levi, who now places in the record of your Subcommittee identification exhibits from the investment bankers case, is a colleague of Mr. Steffen at the University of Chicago. As an instance of the error and misinformation which is bound to creep into your Subcommittee's record as a result of attempting to try before you a case which belongs in the courts I mention in passing Mr. Levi's statement (SM 854) that Mr. Seward Prosser was associated with Guaranty Trust Company; the fact is that he was never an officer of Guaranty Trust Company but was an oflicer of Bankers Trust Company.

5. On March 9, 1950, the defendants formally. moved before Judge Medina to set the case down for trial April 3rd and to begin trial on that date. At that time some 6,000 pages of testimony had been taken by the Government upon doposition and almost 5,000 documents had been authenticated for use on the trial. Yet Government counsel opposed the motion with the statement that they were not ready and needed more evidence. After further pretrial proceedings in which the Government took many measures to obtain delay, Judge Medina has signed Pre-Trial Order No. 2 dated May 25, 1959 with an accompanying memorandum of which I enclose a copy. The order sets the case down for trial October 9, 1950. The memorandum attached shows the extraordinary and ambitious scope and great expense of the action.

Let me reiterate, respectfully and as emphatically as I can, that the defendants desire to try the case; that on the trial they expect to show the falsity of

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