MORGAN BANKING INQUIRY

Taranaki Daily News, 29 May 1933, Page 7

MORGAN BANKING INQUIRY

STORY OF REVALUING FUNDS DISCLOSURES BY DIRECTOR PRIVATE HISTORY OF FIRM IMMENSE RAMIFICATIONS By Telegraph—Press Assn.—Copyright Washington, May 25. Giving further evidence before the Senate Banking Committee investigating the affairs of the J. P. Morgan Banking Company, Mr. Richard Whitney, one of the parties, testified that among the foreign financial arrangements was the provision of revolving funds for Governments and banks, the leading item being 200,000,000 dollars to Great Britain, for which Morgans received 11,940 dollars as their share of the one per cent, commission and 500,000 dollars for arranging the transaction. The Bank of Rome revolving fund totalled 25,000,000 dollars. The commission was 1| per cent., and Morgan’s received i per cent, for managing the credit. The Bank of Spain received 58,000,000 dollars and the Yokohama Specie Bank 25,000,000 dollars on terms similar to those of Britain.

The immense ramifications of the underwriting activities of the firm were disclosed by Mr. Whitney. Since 1919 6,024,000,000 dollars in stocks and bonds was floated, 2,232,000,000 of which was foreign obligations. It was interesting to note that while of the foreign securities to date only 13 per cent, was below the issue price and there were no defaults, the principal domestic issues—railway bonds totalling 1,845,000,000 dollars—showed one-third depreciation and 7 per cent, defaults. Mr. J. P. Morgan during the day issued a statement .that under the English law he had paid £7OOO in income taxes in 1930, 1931 and 1932, but explained that if the English rates and system had been the same as the American he would have been compelled to pay much less taxes in America in 1929. A clause limiting deductions in respect to capital losses to one year for income tax returns was approved by the House of Representatives Ways and Means Committee to-day.