The Hellhound of Wall Street by Michael Perino

Author:Michael Perino
Language: eng
Format: epub
Publisher: Penguin Publishing Group
Published: 2010-08-31T04:00:00+00:00

Chapter 10

DAY THREE: MANIPULATION

Next on the stand for Pecora was Hugh Baker, the president of the securities affiliate. Bald and severe in appearance, Baker was fifty-one, the same age as Pecora. He had worked for City Bank for nearly two decades, starting with the bank in 1914 and then becoming a salesman for the affiliate in 1916. Baker became National City Company’s president in 1929 when Mitchell was named chairman. Baker was one of the recipients of the City Bank morale loans, although his financial crisis couldn’t have seemed very acute, at least not to investors who had just been wiped out in the crash. Just a month before Black Tuesday, he purchased the top two floors of a new apartment building going up on Fifth Avenue. At the time, it was the largest cooperative apartment ever sold in New York City.1

Baker had been sitting in Room 301 for two days watching Pecora dismantle Mitchell and Rentschler. Both were still there. Mitchell had temporarily retired to the spectator’s row directly behind Baker. The “personification of American rugged individualism,” one reporter noted, now stayed close to his attorneys, all of them sitting politely and quietly with their hands folded in their laps. It would, the reporter noted, “unquestionably take a steamshovel to get [Mitchell] away from the enclosure of those high-priced, wise looking lawyers.” With the committee room still jammed with spectators, many loitering around the door because they had nowhere to sit, the soft-spoken Baker seemed afraid to answer even the simplest question for fear that Pecora would do to him what he had just done to Mitchell and Rentschler. Within the first few minutes of his testimony, Baker consulted a memorandum handed to him by his lawyers, and Pecora asked an innocuous question about whether the banker had a good or poor memory.

“Well, I would not boast about it,” Baker replied.

Pecora tried again and this time Baker said his memory was “probably about the average.” From there, the interchange between the two men quickly descended to the absurd.

“I do not know what the average is,” the lawyer explained, trying to get Baker to just answer his simple question.

“Neither do I,” Baker responded.

“I merely want to know the state of your recollection,” Pecora persisted. “Is it generally good or is it generally bad?”

“I do not know how to answer that question, Mr. Pecora.”

“You can not tell us whether you think you have a poor memory or a good one, is that it?”

“No; I can not answer that question.”2

It was a fitting start to a laborious day. Baker constantly battled Pecora on every point. Getting nowhere with him, the lawyer brought the company’s corporate secretary, Harry Law, to the stand. He was no more helpful. Law couldn’t answer a question without long pauses and whispered conversations with lawyers and the other executives from the bank. He incessantly twirled company documents in his hands as the whole room waited for his answer. Pecora was sure that Baker in particular was not being

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