The Waterbury Democrat., 1931-12-10
Big Men in Banking Inter- ests May Be Investi- gated = Threw Billion Across Water and Sold Bonds Here -B m q Owners Are Left Hold ing the Bag
BY PAUL R. MALLON

United Press Stan Corrcspondent) Washington, Dec. 10.-(UP).- American bankers who threw bill lions into investments abroad and sold bonds here to cover the deals, were threatened to-day with a senatorial investigation. All factions in the senate were rallying around the Johnson resolu- tion, designed to dig up interna- tional banking facts which may have a bearing on hte Hoover one- year debt moratorium.
 If the senate adopts the resolu- tions, such figures in world finance as Thomas W. Lamont of J. P. Morgan & Co.,, Otto Kahn and rep resentatives of the Chase National bank will be subpoenaed.
 The resolution was given prior status in the senate by a favorable report from the audit and control committee. Senator Hiram Johnson, republican, California. has an- nounced he will press for its adop- tion before night. No opposition has appeared. Johnson's primary purpose IS to get the big figures of the banking world before the senate finance committees. for questioning. He wants to know how their invest ments stand as res.lt of Presi- dent Hoover's proposal to waive European obligation for the next year. He is in hurry because he | wants to use the evidence in op- position to the moratorium ratifica- ton bill which will come up for action next week.
 The surprising support he has re- ceived in administration quarters Is built upon the hope that the evidence he gets will prove their point instead of his. They believe the evidence will show that the bankers passed their investments in large measure to American citizens.
 The large army of American in- vestors would suffer, instead of the bankers, if anything was done to interfere with American holdings, according to the view these sena- tors take.
 This view was partly borne out recently by high authority in the commerce department, who out lined the procedure by which for eign loans are fioated in this coun- try. A powerful bank or group of banks, he said. puts up the credit, takes the foreign country's bonds, then peddles the bonds through several groups of middle men" to the ultimate investor. The middle men" are the small banks. he ex- plained, who agree to dispose Of certain number of the bonds. If they fail they, not the big banks, are left holding the bonds.
 Johnson would have to move swiftly to get much evidence in time for the moratorium debate. Present arrangements call for con- sideration of that matter in the senate Monday and not more than half a dozen senators have so far signified their intentions of oppos- ing ratification. Still, they may string the fight out for a week. Re- publican leaders want the bill passed before Dec. 15, the date the first payments are to be waived.
 American investments abroad now are estimated between $15, 5,OO0.OOO,- and S17,OO0, 100000. The commerce department fixed them at maxi- mum of $15.40O. 900. 900 at the end of 1880. In addition. there are war debts amounting to S11 ,0OO. 900 900.
 South American loans would be included in the scope of the pro- posed inquiry. but they are not what the investigators are after. Johnson and his friends are con- cened primarily with the European situation.
 "What I want" Johnson said. "is to subpoena such men as Thomas w. Lamont of J. F. Morgan & Co.,. representative of the Chase Na- tional bank, and Otto Kahn" New York, Dec. 1O.-(UPC.- American investors who put their money in foreign bonds sold in this country hnve lost moro than S9.- 900. 900 ,OOO in deprecinted value of their holdings on the bond market. survey by the United Pess showed to-day.
 According to figures released by the New York stock exchange. the market value Of oil listed foreign bonds on Dec. 1 totaied st0s02bs-