REPERCUSSIONS SENATE BANK INQUIRY

Evening Post, Issue 122, 26 May 1933, Page 7

REPERCUSSIONS

SENATE BANK INQUIRY

MORGANS AND PUBLIC MEN

DEALINGS REVEALED

United i'ress Association^By. Electilb Tele crauli—CopsrigUu i (Received May 26, 10 a.m.) WASHINGTON^ May 25. The enormous business dealings of the J. P. Morgan firm wore vividly portrayed, by evidence before the Senate Committee, that it had sold more than six billion dollars in securities to the public since war days, of which more than two billion had been retired. Mr. George "Whitney, a partner in tlio Morgan firm, testified that he had made more than 140,000 dollars' profit on the sale- of fourteen thousand shares of Alleghany stock, which he was especially allowed to purchase through the firm. A former President, the late Mr. Calvin Coolidge, was in the list of favoured purchasers. The name of Mr. William Woodin, the ncv Secretary of the pnited States Treasury, was also mentioned as # one of the favpureel few a!!ow6d to purchase stocks through special arrangement, j SenatoV William McAdoo, of California,1 was mentioned too. Beginning his testimony, Mr. .T. P. Morgan said that he saw no reason for special legislation which would permit: the examination and control of private banking institutions similar to. that exercised over national banks. He claimed that private banking failures were few compared with- others. He explaiacd the disadvantages of private j banking as a reason why it should 'have the benefit of freedom from inspection. Mr. Bichard Whitney, cue of the Morgan partners,' President of the New York Stock Exchange, admitted that loans had been made to the partners. They were now being "carried" by the other partners. He also revealed that the bank had made loans to about twen-ty-five bank officials. The majority were unpaid. Among important items brought out >at today's hearing were the fact that the firm paid eleven million dollars in income tax in 1929, and although it had not paid American income tax for 1931 and 1932, Mr. Mogan did pay income tax ;n England; that more than sixty prominent public men secured loans from the firm immediately after the stock market collapse in 1929, including Mr. Norman Davis, Mr. John W. Davis, General Dawes, and Mr. Charles Mitchell; that the of State, Mr. W. Woodiiij Senator W. G. McAdoo, Colonel Charles Lindbergh, Mr. Charles Francis Adams, Secretary of the Navy in the Hoover Administration, Mr. Owen D. Young, and Mr. E. B. Mellon, brother of Mr. Andrew Mellon, were allowed to make purchases of certain stock floated by Morgans at 20 dollars, whereas the price to the public was 35 dpllars.