Evening star., 1931-12-21
KAHN, AT INQUIRY,
ASKS EVEN BREAK
FOR PRIVATE DEBTS
Continued From First Page.)

CONTINUED From First Page)
$4,000. 100000 the total of foreign Sc
curities about whose issuance the COM /
mittee has received testimony in its (
three days of hearings. or these J. I
Morgan & Co. floated Sl,805 100000 /
and the National City Bank S1,O7l ,OOO,- /
000
Kuhn. Loeb & Co. have originated
s577 900 900. of which 100000, 900 have /
been retired. Kahn said. The firm mas /,
participated with J. P. Morgan e. Co. /
in the fiotation of s559,000,0C0, he !
added.
The banker said he could not give
The profits to his firm, but would file !
thcm later.
Kahn said the proposed revival of the !
War Finance Corporation was to pro- |
tect debtors. !
Wicked, He Says.
1T is a wicked thing" he said. Ito !
compel debtors in times Ike these. /
which are beyond his power, to neglect !
going to extremes to make it possible for
them to tide things over"
He added that this should be done by
the Government and everybody elsa, /
"Hoarders OF money should be pub
licly denounced and their names pub
lished, Kahn said.
Hearing Is Resumed. !
Kahns testimony was given as the
Senate Committee resumed its inves ,
ligation Of the flotseion OF foreign Sc
cur!ties. He sat imm -diatCly opposite
Senator Hiram johnson Of California.
who sponsored the inquiry as an oppo-
rent of the moratorium.
Kahn aid tho fret loo r17aSn nv bic
firm following the a-m.stice was an
issue of S25.000,000 for the Swedish gov
ernment, which was also mentioned in
testimony last week. The bonds we're
issued at 99l2 and that government got
9612
Out of the l per cent profit. which.
he said, was divided between Kuhn.
Loeb & Co. end the National City
Sank. We c paid overhead expenses.
The next loan was $50 900, 900 issue,
also for the Swedish government. 4
First Issue Paid OFF.
The first issue. he said has been paid
eff. The second is not collectable until
1894 (
The banker next told of a $4,000 900 |
1920, on which the origin ting profit +.
was 2 FER cent, the underwriting 2i2 /
per cent and that of the selling group
ll2 per cent !
Senator Couzens Republican of
Michigan. said he felt it was "5gainst
the public interest to have the issuing
house act as trustee for the sinking
fund
Kahn said the issuing house has a
double continuing responsibility to its
constituents and to the public.
When there is a default what docs
the issuing house consider its response ,
bility?" Cou2ens asked.
TO do everything possible to re-
establish the solvency of credit of the
property to protect the bondholders,"
Kahn replied.
Kahn said the only foreign failure
his company had been connected with
was the Mortgc &c Bank Cf Chile
Kahn told Of additional loans to the
city of Oslo of 81 100000 and sS,000,O0c, !
respectively.
He was asked ito what extent" the
securities were held by the issuing
houses.
They are in principle all passed on
to the public" Kahn said. AS l stated
before, the essential virtue of bapker
is that he must b. liquid
He added that the issuing house has
permanent moral liability to protect
the bonds.
Kahn said not many foreign bonds
are held by American banks.
They are widely distributed he
added
Questioned. he said the banks did
hold Shortterm securities and esti-
mated that something in excess of
5000 100000 of short-term securities
were held in this country.
Normal Risk. He Says.
II do not consider the amount ex-
orbitant for creditor nation to eX-
tend to country with the capacity Of
Germany" Kahn added. She may be
loaded up tor while, but that Is a
normal risk Of credit"
Senator Reed, Republican, Of Penn |
sylvania said it had been stated on the i
floor of the House that Kahn supported
Herbert Hoover for President and sug-
geSted the moratorium to him.
1T is an absolute falsehood, without
a germ Of truth" Kahn replied. !
Il did not suggest the moratorium
and had no knowledge that 1t was
coming
He said he did not advocate cancella- !
ticns of the debts and was on record
the Uni.el States to get them paid
But, he addci. It must be decided at
the present moment what Is the most
constructive and expedient thing to do.
I'VE should decide in what way,
while maintaining the justice and right
of our cause, We should go. I dent
feel called upon to make categorical
answer. because its a question for
craftsmanship"
Kahn said Paul M. Warburg of his
firm, who had been linked with charges
in the House Of participation in activi-
ties holdings of small country banks
Democrat and had supported Alfred E.
Smith in 1923.
Kahn was questioned further about
public debts
You do not believe a temporary
emergency justifies a permanent re-
duction in these debts?" Reed asked.
Il do not" the witness replied
The committee engaged in a discus
sion of when the investigation should
ha ror,sv4,cd ana frallv voted IN rorocr