AMERICAN BANK INQUIRY

Taranaki Daily News, 27 May 1933, Page 7

AMERICAN BANK INQUIRY

AMENDING INCOME TAX LAW MORGANS’ DEALS ENORMOUS SELECT CLIENTS EXPLAIN U.S. TREASURER ATTACKED By Telegraph—Press Association. Washington, May 25. An investigation was ordered to-day by the House of Representatives Ways and Means Committee into the gains and losses provisions of the income tax laws, with a view to correcting, by a cause to be inserted in the Public Works Industrial Control Bill, the condition which permitted the J. P. Morgan banking company to avoid income tax payments for the last two years. A sub-committee was appointed to draft the clause. The enormous business dealings of the Morgan firm were vividly portrayed by evidence to-day before the Senate committee investigating its affairs. The firm, it was declared, sold more than £1,200,000 in securities to the public since the war days, of which more than a third had been retired.

Mr. George Whitney, one of the Morgan partners, testified that he had made more than 140,000 dollars profit on the sale of 14,000 shares of Alleghany stock. He was especially allowed to purchase through the firm. Senator William McAdoo told the committee that he had only three transactions with the Morgan company, in which he lost 3656 dollars. Senator Robinson (Republican, Indiana), expressed the opinion ip the Senate to-day that “the usefulness of Mr. William Woodin as Secretary of the Treasury has ended,” as a result of the linking of his name with the stock offerings of the firm. Mr. Newton Baker, former Secretary of War, whose name appeared on the select list of purchasers, said at Cleveland to-day that he had not made any profit. He added that the only preference granted by the firm was the sale of stock at no profit to itself. A Geneva cable states that Mr. Norman Davis, in an interview, admitted borrowing £lO,OOO from the firm on ample security. About £2OOO was still owing. "I have no apology to offer regarding the affair,” he said. “The debt was due entirely to the fact that I have been spending my own money in the country’s service and have not been reimbursed.”