FAVOURED FEW

Rotorua Morning Post, Volume 2, Issue 541, 26 May 1933, Page 5

FAVOURED FEW

(Press Assn.-

STOCK PURCHASES STARTLING REVELATIONS IN MORGAN BANK ENQUIRY PUBLIG MEN INVOLVED

— By Telegraph — Copyright).

Rec. May 26, 7.50 p.m. Washingtpn, May 26. Mr, William W.o.odin, no>y Secretary to tbe Unit.ed States Tfpasury, was mentioned to the State Committep investigating affairs in] connection with the J. P. Morgan Banking Company, as one of tlt.e 'favoured few allowed to purchas.e stock through special larr.angements. The name of Senator William McAdoo, of California was also mentioned. Resuming his testiniony, Mr. J. P. Morgan said he saw no reason for special legislation which would permit the examination and control of hanking institutions similar to th'at exercised for the national banlc. He declared that private bank failure s were few compared with others. He explained disadvantages of private banking as a reason why they should haye the benefit of freedom from inspection. Mr. Richard Whitney, one of the partners, admitted that .a loan had been made to partners, and they were now being "carried" by other partners. He also revealed that they had | made loans to about 25 bank officials, the majority being unpaid. The ■ incjlusion of Mr. W'codiii lamong the select clients immediately drew fire from Senator Borah, who strongly intimated that Mr. Woodin should resign. Among the important items brought out during this hearing were the facts that the firm paid 11,000,000 dollars income tax in 1929, and although it had not paid American income taxes i in 1931-32, Mr. Morgan had paid income tax in England. It was also revealed that more than 60 prominent public men had seeured loans from the firm immediately after the stock market collapse in 1929, including Mr. Norman Davis, Mr. John W. Dawes and Mr. Charles . Mitchell, and that the Secretary of State, Mr. Woodin, and Mr. McAdoo, Colonel Lindbergh, Cr. Charles Francis Adams, Secretary to the Navy in the Hoover Administration, Mr. Owen Young, Mr. R. P. Mellon and his brother Andrew, were allowed to make purchases of certain stock floated by Mr. Morgan, at 20 dollars, whereas the pr-ice to the public was 35 dollars.