U.S. BANK INQUIRY

Hokitika Guardian, 26 May 1933, Page 5

U.S. BANK INQUIRY

FAVOURED CLIENTS MORGAN AND PRIVATE SYSTEM. 3 (United Press Association—By Electrio Telegraph—Copyright/ WASHINGTON, Ma y 24. j -'ll' J- Pi-erpout Morgan to-day re- , sinned his testimony before tlie Com- , niictee of the olined States Senate ' who are. investigating the affairs of the J. P. Morgan Banking Company. , He said that he saw no reason lor any special legislation which would pemut of the examination and tho control of private banking institutions similar to tlie control that was exercised over tlie National Banks. He claimed that the private bank failures had been few, compared to others. He explained disadvantages associated with priI vale banking as a reason wily such banking should have the benefit of freedom from inspection. Richard "Whitney, one of the Morgan firm’s partners, admitted that loans had been made-to th 2 , partners in the company. They were now, he said, being “carried” by the other partners. He also revealed that the Company had made loans to about twentyfive bank officials. The majority of these loans are unpaid. Among important items that were brought out was the fact that the firm paid eleven million dollars in income tax in 1929, and that, although they have not paid any American income taxes for 1931 or 1932, Mr J. P, Morgan did pay income tax in England. There was also th. 3 , fact- that more than sixty prominent public men secured loans from tho firm immediately j after the stock market collapse in I 1929, these including Norman Davis ; (ex-MBlister), John W. Davis, and General Dawes and Charle-s Mitchell 1 (Bank President). It was also dis- | closed that Secretary Woodin, Sena- ( tor Me A c)o o, Colonel Lindbergh, Charles Francis Adams (who was Secretary to the U.S. Navy in the Hoover Administration), Owen Young, and R. B. Mellon (now U.S.A. Ambassador to Britain, and formerly United States i Treasurer under Mr Hoover) were 1 allowed to make purchases of certain stock floated by Morgan’s at twenty' 's dollars, whereas the price charged to the public was, 35 dollars. Air William Woodin, now the Secretary to the United States Treasury, was mentioned as being one of a favoured few who were allowed to purchase stocks through a special arrangement. Senator William McAdoo, of Cali- , fomia, was also, mentioned. i BORAH DEMANDS RESIGNATION. ; WASHINGTON, May 24. .. ; The admission of the inclusion of i U.S. Treasurer Woodin among the select clients of J. P. Morgan’s Coin- 1 puny immediately drew fire from Son- ; ator Borah, who strongly intimated j that Mr Woodin should resign from ( the Treasury. * 4

MORE FAVOURED PURCHASERS

WELL-KNOWN PERSONALITIES.

(Received May 26 at 9.5 a.m.) WASHINGTON, May 25. Senator McAdo told the Senate Banking Committee, to-day that he had only three-transactions with Morgan and Coy, in' which* he lost- 3565 dollars. The enormous business dealings of the -Morgan firm were vividly portrayed by evidence that it sold more than six billion dollars in securities to the public since the war days, of which more tinan 1 two billion have been retired.

George Whitney, one of Morgan’s partners testified that he made more than 140, C0D dollars profit on the salp of 14,000 shares in Alleghany stock. He was especially allowed to purchase through the firm. The former President, Mr Calvin Coclidge, was contained in the list of favoured purchasers. Mr Newton Baker, former Secretary of War, whose name appeared on tho select list of Morgan purchasers, said to-day that he ■ had not made any profit. He added that the only preference granted by the banking firm was tile sale of stock, at no profit to themselves-

MR DAVIS’ ADMISSION. GENEVA, May 25. Mi- Davis admitted, in an interview, borrowing £IO,OOO from Morgans cn ample security, and about £2OOO was still owing. “I have no apology to offer regarding the affair,” lie s;v j'd. ‘ The debt was due entirely to the fact that I had been spending my own money in the country’s service and had not been reimbursed.”