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November 30, 1914



White, McKenna, Holmes, Day, Hughes, Van Devanter, Lamar, Pitney; Mr. Justice McReynolds took no part in the consideration or decision of this case.

Author: Lamar

[ 235 U.S. Page 224]

 MR. JUSTICE LAMAR delivered the opinion of the court.

In the 62nd Congress, the House of Representatives (H. R. 429, 504) adopted a resolution authorizing the members of the Committee on Banking and Currency to investigate and make a report as to the financial affairs and activities of National Banks, interstate corporations and groups of financiers as a basis for remedial and other legislative purposes. To that end the Committee was authorized to send for persons and papers and to swear witnesses.

Among those summoned and sworn was the appellant, George G. Henry, who was examined at length as to many matters relating to the formation of syndicates and the flotation of stock. He testified that he was a member of the firm of Salamon & Co., bankers in New York, who were accustomed to form syndicates for the acquisition and sale of blocks of stock and to grant participation therein to trust companies and national banks -- their directors and corporate officers also being frequently members of the same syndicate. In reference to one of these transactions he testified that Salamon & Co. had agreed to pay $8,215,262 for $22,500,000 preferred and common stock in a California oil company; thereupon Salamon & Co., Lewisohn Bros., Hallgarten & Co., bankers in New York, together with a fourth banking firm (whose name witness did not disclose) had then formed a syndicate for acquiring and disposing of this

[ 235 U.S. Page 225]

     $22,500,000 of oil stock. He testified how the shares were allotted, and that 12 1/2 per cent. went to the unnamed persons in the banking group; that in the subsequent disposition of the stock a number of shares were acquired by 15 individuals, some of whom were officers of National Banks located in New York, Chicago and Detroit. Other shares were allotted to those who were officers in Trust Companies in New York and Chicago. Letters were written offering to allot part of this oil stock to the New York syndicate, but before acceptance of the allotment all of the stock had been sold at a profit of nearly $500,000, a part of which went to the members of the New York syndicate (officers of banks), even though they had not previously accepted the allotment. They thus, in effect, received a present of their share of the profits. He was asked to give the names of those composing the New York syndicate, but claimed to have the right under the Constitution to decline to answer the question, saying also that he "did not want to disclose the names of the participants in the New York syndicate, although he understood it to be the wish of the subcommittee that he should, for the reason that he would consider it dishonorable to reveal the names of his customers unless compelled to do so."

The Committee ordered the fact of his refusal to answer to be reported to the House for action -- majority and minority reports being made. After discussion, the House of Representatives directed that the facts should be laid before the Grand Jury of the District of Columbia. That body returned an indictment against Henry charging him with refusing to answer questions propounded by the Committee. Rev. Stat., ยงยง 101-104. A warrant issued and Henry was arrested in New York and when taken before the Commissioner demanded an examination.

On the hearing and before the introduction of any testimony, he moved for his discharge on the ground that

[ 235 U.S. Page 226]

     the Commissioner was without jurisdiction, since it appeared on the face of the complaint that petitioner was not charged with any offense against the United States.

The motion was denied and, it having been admitted that Henry was the person described in the indictment, the Government introduced the bench warrant and a certified copy of the indictment as sufficient proof of probable cause.

The petitioner then offered in evidence the Resolution defining the scope of the inquiry, with a transcript of his testimony before the Committee -- including the question which he refused to answer and his reasons therefor. Copies of the majority and minority Reports to the House were also incorporated in the record. After argument the Commissioner ordered Henry to be held in custody until the District Judge could issue a ...

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