An E. F. Hutton & Co. manager testified yesterday that "company policy" caused him to engage in the aggressive cash-management practices that led the brokerage firm's Alexandria branch to overdraw its United Virginia Bank checking account by an average of $9 million a day in November 1981.

But Perry H. Bacon, now manager of Hutton's branch at 1825 I St. NW, told the House Judiciary subcommittee on crime that "no one" at Hutton had directed him to engage in such overdrafting. Rather, he said, he perceived the company policy mainly in memos from executives, "oral communications," and meetings. "It never occurred to me there was anything wrong with it," he said.

On a single day -- Nov. 2, 1981 -- the Alexandria branch deposited customer funds of $70,629 in its account in the local UVB office while drawing $9,953,000 from the same account. This was "check-kiting," subcommittee chairman William J. Hughes (D-N.J.) charged.

"I completely disagree," Bacon replied. He gave two reasons: he was executing company policy, and we "we had liquid funds at all times" to cover any checks that might bounce.

Hughes ridiculed the liquidity defense, saying that what matters is what's in an account, not other assets a depositor may own.

Bacon also said that UVB was "fully aware" of his practices and that the bank's branch manager had told him at lunches in the period in question -- late 1981 and early 1982 -- -that Hutton's account was profitable and he was pleased to have it.

The explanation for that, Hughes countered, was simply that UVB, like many other banks, was being deceived: it had not grasped that it was making unintended, huge no-interest loans to Hutton that were concealed by the firm's intricate cash-concentration system.

Bacon was the last of five present and former Hutton managers who appeared in the third of a series of hearings on what role, if any, senior executives played in illegal abuses of the system, and on a Justice Department prosecution in which no individual was made a defendant.

Hutton pleaded guilty May 2 to 2,000 counts of mail and wire fraud and signed an agreement to make restitution to victimized banks and to abandon questionable cash-management practices beyond those in the criminal charges.

Last night, Hutton attorney Terry Adamson said that "the company has and continues to accept a severe punishment and has established safeguards to ensure that such practices will never occur again. The question of individual responsibility . . . is a subject of former attorney general Griffin Bell's independent internal investigation . . . ".

Hutton's Alexandria and District branches are in the firm's central region, based in Kansas City, Mo. Regional manager Ernest C. Dippel and Bacon gave apparently conflicting sworn accounts of who knew what and when.

Dippel said that in 1981, then-president George L. Ball was putting out memos chiding the central region for lagging behind all others in earning interest income. One of Dippel's remedial steps was to refer branch managers to Hutton's "money mobilizer," Thomas Morley, for guidance on how to improve earnings on the "float" in bank accounts.

In August 1981, according to a Dippel memo, interest income soared to 70.7 percent of the Alexandria branch's gross income -- which Hughes said was "astounding" -- compared with a low of 5.1 percent at the St. Louis branch. Branch managers received 10 percent of their branch's gross income.

Dippel, hoping to find out how the Alexandria branch achieved such a high return so that he could help his other branches, phoned Morley, he said, only to be told that Alexandria had a nontransferable, unspecified "special pocket of availability" -- an apparent reference to the UVB account. Dippel said that he learned nothing more and dropped the matter.

By contrast, Bacon testified that "Mr. Dippel was aware that we were drawing down $9 million on some days," and that in late 1981 or early 1982, he had discussed his overdraft policies with Dippel and another official, Richard G. Genin, now senior vice president for trading operations.

Bacon stressed a statement in an April 1982 private memo: "Our objective is not to steal money from the banks."

Three other witnesses drew incredulous reactions from subcommittee members by claiming ignorance and innocence of improprieties.

William T. Sullivan Jr., who developed the cash-concentration system, testified that the abuses came into being after he resigned in May 1980. The criminal charges covered a 2 1/2-year period starting in July 1980.

The other witnesses were Arthur Jensen, Hutton's Atlantic region operations manager, and John Holland, manager of the region's Wilkes-Barre office when Jensen transferred the checking accounts of three New York branches to Wilkes-Barre. In New York, the branches had complained, their checks were being cashed only a day after issuance, decreasing their float.