“SELECT” CLIENTS

Gisborne Times, Volume LXXIII, Issue 11954, 26 May 1933, Page 5

“SELECT” CLIENTS

REVELATIONS AT MORGAN BANK- INQUIRY.

CONCESSIONS TO PROMINENT PEOPLE.: V

SECRETARY OF TREASURY ONE OF • PRIVILEGED FEW. j

THIRTY-FIVE DOLLAR STOCK BOUGHT FOR’ 20 DOLLARS.

NO INCOME TAX PAID FOR TWO YEARS.

SENATOR BORAH URGES MR. WO ODIN’S RESIGNATION. (U.P. A. by. Elec. Tel. Copyright) (Received May" 25, 7.5 p.m.) WASHINGTON, May 24. Mr. William Woodin, now Secretary of tho United States Treasury, was mentioned to the Senate Committee investigating the affairs connected with the J. P. Morgan hanking company, as one of the favoured few allowed to purchase stocks through a special arrangement. The name of Senator William McAdoo, of California, was also mentioned. Resuming his testimony J. P. Morgan said 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. Ho claimed that private bank failures were few compared with others. He explained tho disadvantages of private hanking as a reason why they should have the benefit of freedom from inspection. Richard Whitney, one of the partners, admitted that loans had Leon made to partners and they were now being “carried” by other partners. He also revealed that they had made loans to about twenty-five bank officials, the majority being unpaid. The inclusion of Mr. Woodiu amongst the “select” clients immediately drew fire from Senator Borah, who strongly intimated that Mr. Woodin should resign.

Among the important items brought out during the day’s hearing were the fact that . the, firm paid 11,000,000 dollars income tax in 1929, and although it had not paid American income taxes in 1931 and 1932, Mr. Morgan did pay income tax in England. It was also revealed that more than sixty prominent public men had secured loans from the liirm immediately 'after the stock market collapse in 1929, including Norman Davis, John W. Davis, Dawes and Charles Mitchell; and that the Secretary of State, Mr Woodin, Mr. McAdoo, and Colonel Lindbergh; Charles Francis Adams, secretary of tho Navy in the iloovoi Administration; Owen Young, R. B. Mellon, and his brother Andrew, were allowed to make purchases of certain stock floated by the Morgans at 20 dollars whereas the price to the public was 35 dollars.