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constituted and appointed, and does hereby make, constitute and appoint Russell R. Brown, Richard H. Grimm, William S. Kies, and Philip Publicker, or any one or more of them, with full power of substitution, the true and lawful attorneys in fact and proxies of the undersigned at the special meeting of stockholders to be held July 21, 1933, at the office of the Corporation, Room 1628 Baltimore Trust Building, No. 10 Light Street, Baltimore, Maryland, or at any adjournment or adjournments of said meeting, and at any such meeting or meetings to vote the shares of stock of said Corporation owned and held by the undersigned, in favor of the proposed amendments of the charter and the certificate of incorporation and by-laws of the Corporation; and the ratification of the proceedings of the Board of Directors, Executive Committee, and officers of the Corporation, all as set forth in the notice of said special meeting, dated July 10, 1933, a copy of which the undersigned has received; and upon any and all other matters which may come before said meeting, pursuant to said notice, and to do any and all acts and things which the undersigned might or could do if personally present, hereby ratifying and confirming all that said attorneys and proxies of the undersigned, or either of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

A majority of said attorneys and proxies shall be present and act at such meeting, or if only one shall be present and act, then he may have and exercise all powers hereunder.

In witness whereof the undersigned this day of July, 1933.

And then there is a space for the signature of the stockholder, and space for the signature of a witness.

Now, Mr. Brown, who appointed the four men who were named as proxies or attorneys for the stockholders in this form of proxy?

Mr. Brown. I assume they were appointed at the board meeting.

Mr. PECORA. They were appointed at the board meeting by whom?

Mr. Brown. By me, I imagine. Mr. PECORA. You say by you? Mr. Brown. Yes, sir. Mr. PECORA. The board meeting to which you refer and as to which said appointments were made, was the board meeting held on June 30, 1933, was it not?

Mr. Brown. I think that is correct; yes sir.

Mr. PECORA. And was this form of notice of this special meeting of stockholders that I have read into the record, together with the form of proxy attached, presented and approved at that board meeting?

Mr. Brown. I should assume so; yes, sir.

Mr. PECORA. As bearing on that let me read from the minutes of the board meeting held on June 30, 1933, the following extract:

Form of notice of meeting of stockholders to be held July 21, 1933, as aforesaid, with said form of proxy attached thereto, was presented and approved, and a copy of said notice and proxy, marked Exhibit A" are attached to the minutes.

The secretary was directed to notify the New York Stock Exchange of a proposed meeting, and the record date of stockholders entitled to vote thereat in accordance with this corporation's agreement with said exchange. Enclosed is a copy of notice of meeting above referred to. Do you recall that action? Mr. Brown. Yes, sir.

Mr. PECORA. Let me read further what is inserted in the minutes of the meeting of your board held on June 30, last, as follows:

In accordance with the authority conferred by the board of directors of the American Commercial Alcohol Corporation at a meeting held June 30, 1933, I hereby appoint Russell R. Brown, Richard H. Grimm, W. S. Kies, and Philip

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stitute.

Publicker as proxies and attorneys in fact, to receive proxies from the stockholders, and to act on their behalf and on behalf of the corporation, at the special meeting of stockholders to be held on July 21, 1933.

And this is signed Russell R. Brown, chairman of the board. Is the signature reading “Russell R. Brown” in your handwriting, Mr. Brown? Mr. Brown (after looking at the paper). Yes, sir. Mr. Pecora. Now, I show you, or rather I first ask you, if this printed notice of the special meeting of stockholders was in due course sent to all stockholders of record ? Mr. Brown. I assume so; yes, sir. Mr. PECORA. With the attached form of proxy? Mr. Brown. I assume so; yes, sir. Mr. PECORA. Did you attnd this special meeting of stockholders on July 21, last? Mr. BROWN. I do not think so; no, ir. Mr. PECORA. Do you know who did attend it? Mr. Brown. I think Mr. Page did. Mr. PECORA. What was that? Mr. Brown. I say, I think Mr. Cecil Page attended. Mr. Pecora. Mr. Page was not one of the proxies or attorneys in fact named in the proxies, was he? Mr. Brown. But as I understand, the proxy provides for a subMr. PECORA. Yes; the form of proxy provides “ with full power of substitution." Mr. BROWN. Yes, sir. Mr. PECORA. Was such substitution given by all four of the proxies and attorneys in fact named in the form of proxy? Mr. Brown. If I remember correctly, yes, sir.

Mr. PECORA. So that Mr. Page was the one who acted under whaterer prosies were sent by stockholders of your corporation, to represent them at this special meeting held on July 21 last? Mr. Brown. I think that is correct. Mr. PECORA. Do you know how many stockholders were actually present in person at that meeting? Mr. Brown. No, sir. Mr. PECORA. Have you ever learned? Mr. Brown. I do not remember; no, sir. Mr. PECORA. Well, from your experience with the stockholders of pour corporation, and of other corporations for that matter, would it indicate that only a very few did attend?

Mr. BROWN. That is right. Mr. PECORA. According to the minute book of your corporation which I have before me, the special meeting of stockholders of your corporation, called originally for July 21, was adjourned to August 1. at which time it was held in the office of the corporation in the Baltimore Trust Building, in Baltimore, Md. Do you recall that? Mr. Brown. Yes, sir.

Mr. PECORA. And I have before me the minutes of that special meeting of holders of stock of your corporation, on August 1, 1933, those minutes being embodied in the minute book of the board of directors of your corporation, which has been marked " Committee Exhibit No. 14" for identification. And I will read the following extract from the minutes of that special meeting:

The judges thereupon verified the stock holders present in person, and inspected said certified list of stockholders, and of said proxies, and ascertained and reported to the meeting that there were present in person and by proxy stockholders entitled to vote at the meeting, as follows:

Present in person: None.
Present by proxy: 179,614 shares.
Total shares present in person and by proxy: 179,614.

Out of a total number of 260,512 shares of common stock of the corporation outstanding and entitled to vote, being the only issue of outstanding stock of the corporation.

It appearing that there were present in person and by proxy a majority of the stock outstanding entitled to vote, the chairman declared the meeting open for the transaction of business.

Now, I also want to read the following recital of attendance from the minutes of this special meeting of stockholders of August 1, 1933:

In the absence of the president and of the vice presidents of the Corporation, McKenney W. Edgerton, Esq., called the meeting to order, and was unanimously elected chairman of the meeting.

Mr. Cecil Page, secretary of the Corporation, acted as secretary of the meeting.

Dorothy M. Gaston and Joseph T. Van Pelt were unanimously appointed judges by the affirmative vote of the stockholders present and represented at the meeting, and they being present were duly sworn to faithfully perform their duties, and so forth.

Now, it would appear from those minutes that the only persons attending the meeting were Mr. Page, who held the proxies of the owners of 179,614 shares of the corporation.

Mr. BROWN. That is correct.
Mr. PECORA. There were no stockholders present in person.
Mr. BROWN. No, sir.

Mr. Pecora. Who is Mr. McKenney W. Edgerton, who presided at this meeting?

Mr. Brown. I imagine they are employees of the Trust Co. in Baltimore, in whose office the meeting was held.

Mr. PECORA. Who were Dorothy M. Gaston and Joseph 'T. Van Pelt?

Mr. Brown. They were also employees, I should think.

Mr. PECORA. So that virtually the organization at this stockholders' meeting—that is, the officers of the meeting-were dummies consisting of employees of the Trust Co. in Baltimore, Md: ?

Mr. Brown. I think the Corporation Trust Co. is the statutory agent or something in Maryland, but I am not sure.

Mr. PECORA. They are not employees of the American Commercial Alcohol Corporation, are they?

Mr. BROWN. No, sir; in no way connected with it.

Mr. PECORA. Nor are they stockholders of the American Commercial Alcohol Corporation?

Mr. Brown. Not that I know of; no, sir.

Mr. PECORA. Now, Mr. Brown, I want to read further to you the following extract from the minutes of this special meeting of stockholders held on August 1, last;

The stockholders having examined the minute books heretofore read to the meeting and presented for their inspection, upon motion duly made and seconded a vote by ballot was taken on the following resolutions

Resolved that minutes of meetings of the Executive Committee of the Board of Directors of this Corporation held on April 12th and 26th, May 10th, 17th, 24th and 31st, June 7th, 14th, 21st, and 28th, July 5th, 14th and 19th, 1933, and the minutes of meetings of the Board of Directors of this Corporation held April 27th, May 2nd, May 4th, May 25th, May 31st, June 15th, June 29th, and June 30th, 1933, in the form presented to this meeting, be and the same hereby are in all respects approved, ratified, confirmed and adopted.

Resolved that any and all acts, transactions, and proceedings taken or authorized by the Board of Directors, Executive Committee, and officers of the Corporation, or ratified thereby, were, pursuant to previous authorization by the stockholders of the Corporation, or otherwise, as set forth in the minute books, presented to the meeting, including without in any way limiting the foregoing issuance of common stock of the Corporation in the acquisition of the stock of other corporations as subsidiaries, whether wholly owned or otherwise, hereby are in all respects approved, ratified, confirmed and adopted.

Were you in due course advised of the adoption of these resolutions at this special meeting of stockholders of August 1 last?

Mr. BROWN. Yes, sir.

Mr. PECORA. Now, as a matter of fact, didn't the situation presented by these minutes, or disclosed by them, reveal that at this special meeting of stockholders of your corporation, the meeting virtually consisted of Mr. Cecil Page, one of the members of the board of directors of the corporation, and an attorney, and its secretary?

Mr. BROWN. That is correct, representing the proxies.
Mr. PECORA. He represented the proxies ?
Mr. BROWN. That is correct.

Mr. PECORA. And as the representative of the proxies to the number of 179,000-odd shares of stock, he unanimously voted for this resolution?

Mr. Brown. That is correct; yes, sir.

Mr. PECORA. And this resolution is a blanket ratification of all the acts of the officers, the board of directors, members of the executive committee of the board of directors, of the corporation, is it not?

Mr. Brown. That is correct. The intention of the meeting, however, was to provide for the increase in the authorized capital stock, because at that time, as you will perhaps remember, there were all sorts of things in the air, so to speak, involving the acquisition of additional properties.

Mr. PECORA. Aren't you overlooking another important intention or purpose of the meeting, namely, to ratify the acts of the officers, directors, and members of the executive committee of the board!

Mr. Brown. No; all of the matter prepared in connection with that meeting, and so forth, were prepared by counsel.

Mr. PECORA. It was one purpose of this special meeting also, wasn't it, to have the stockholders ratify all the acts of the officers, directors, and members of the executive committee of the board of directors of the corporation ?

Mr. Brown. Yes; and I think that is usual at these meetings.

Mr. PECORA. Now, the specific acts of the officers and directors and the executive committee of the board, the ratification of which was sought from the stockholders at this special meeting, had to do, among other things, with those corporate acts that you testified to before this committee last week and this morning with respect to Maister Laboratories, Inc., and Noxon, Inc., were they not?

Mr. Brown. Yes, sir.

Mr. PECORA. Now, in the notice that was sent to stockholders in the form authorized by the board of directors of your corporation at this meeting of June 30 last, I notice there is no statement or information conveyed to stockholders as to what those acts were that were to be ratified at this special meeting of stockholders.

Mr. BROWN. Well, I should assume that the stockholders were notified. I haven't the records that you have there, and I don't know what letters or anything else might have been sent out on that matter.

Mr. PECORA. Are you advancing that statement seriously as a sug. gestion that possibly they were notified of the nature of those acts by letter or otherwise ?

Mr. Brown. No; but as I say, all those things are handled by counsel, and I assume they were taken care of properly.

Mr. PECORA. Whether they are handled by counsel or not, the effectuation of these things is by the formal act of the board of directors of the corporation.

Mr. Brown. That is right.
Mr. PECORA. And you were the chairman of the board.
Mr. BROWN. That is correct.

Mr. PECORA. You are not professing ignorance of the kind of notice that was sent to stockholders for this special meeting, are you?

Mr. BROWN. No, sir.

Mr. PECORA, I show you the insertion of a printed letter in the minute book of the board of directors of your corporation, which is addressed to stockholders, and bears date July 10, 1933, signed by Richard H. Grimm as president of the corporation and by yourself as chairman of the board. Will you look at it and tell me if that is a copy of a printed letter sent to stockholders in connection with or at the same time as the printed notice for the special meeting called originally for July 21 last.

Mr. Brown (after looking at the paper). Yes, sir.

Mr. PECORA. Now, do you know of any other information that was ever given or conveyed to your stockholders by the corporation, or by anyone in behalf of the corporation, with regard to the matters set forth in this letter of July 10, 1933 ?

Mr. Brown. No, sir.

Mr. PECORA. I mean the one that you have just identified, and I mean other than that which is contained in this letter.

Mr. Brown. No, sir.

Mr. PECORA. So it is safe to say that the only information the stockholders generally were given by the officers and directors of the company with regard to certain of the acts which the board desired to have the stockholders approve was that contained in this letter?

Mr. Brown. I think that is correct.

Mr. PECORA. I will read the letter into the record. It is a printed form letter.

AMERICAN COMMERCIAL ALCOHOL CORPORATION,

NEW YORK, N.Y., July 10, 1933. To the stockholders:

Since the annual meeting of your company held in April, business conditions have been moving with unanticipated rapidity, making it desirable to bring stockholders' information to date by this general letter.

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