The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-06-01
POTENTIAL PROFIT
OF $122,50S,000
ON DEAL IS SHOWN
Morgan Partner Says It All Sc.
curities Had Been Sold
That Would Be Result
R|D|CULEs FIGURE, HOWEVER
Says Figure Is "Surmise OF
What Might Have Been
Done But Wasn't"

tial profit Of $122,5oS,ooo for j. p.
Morgan and Company in 1929 If 1t
had sold securities received by 1t In
forming the United Corporation, q
utilities stockholding concern, was
outlined Thursday to the senate in
vestigating committee and agreed to
by George Whitney, partner in the
firm.
This phase Of the inquiry into op-
erations OF the international bank
ing firm was reached after it had
been decided on an II to vote in
closed session Of the committee to
make public the Morgan partnership
agreement, save for names of the
present partners and the percentages
Of their interests.
Ferdinand Pecora, committee coun-
sci now given free rein by the COM
mittee, introduced the potential
profit figure In connection with the
United Corporation deal. Whitney
said 1t was correct.
He directed ridicule at the figure
as q "surmise of what might have
been done but wasn't"
Whitney had testified Wednesday
that If the firm had sold the securi-
ties 1t turned over to the United Cor
poration, in forming that concern, it
would have made profit of $751;
100000.
Three Are Over-Ridden
In the committees executive ses-
sion before the hearing resumed
Senator Couzens Rep., MichD, Nor
beck Rep., S. d. and Costigan
(Dem., Colo) wanted to make all OF
the partnership agreement public;
but we've over-ridden.
Only few senators were present
for the public hearing, which again
attracted an overflow crowd to the
huge hearing hail.
j. P. Morgan kept in the back
ground, sitting near Charm n
Fletcher of the committee and smok-
ing cigar slowly. He listened closely.
John w. Davis, Morgan counsel
who had protested making any of the
partnership agreement public, sat
back of Whitney, passing documents
to him at times.
To Offer New List
This was the immediate objective
Of Ferdinand Pecora. counsel of the
investigating committee, as the in
quiry went into its sixth day.
At least one more list of special
clients invited to buy stock from the
Morgan house at bargain prices was
promised by Pecora during the days
hearing. It was already known that
one name on the list is that Of Owen
j. Roberts, associate justice of the
supreme court.
Testimony has shown that buyers
on the three lists so far laid before
the committee could have realized
profits of $2O,O00,O0O on the basis Of
market prices prevailing soon after
they acquired their stock.
How many did sell has not been
shown, but George Whitney, young
Morgan partner who is bearing the
brunt of the questioning, told the
committee Wednesday these clients
had been invited to buy the stocks in
order to spread the risk of underWrit-
ing the issues. presumably, with the
idea they would hold them.
Draws Hot Fire
This statement drew the Warnest
cross examination to which he has yet
been subjected. The crowd of specta-
called that Whitney had made no such
explanation previously, and the Nor
gan partner replied that was be-
cause II wasn't wise enough to ap-
preciate the impression that would be
created In some quarters by these
lists"
when did you first become aware
Of the impression?" Pecora asked.
When read the newspapers"
Whitney smiled back.
I'm view Of your emphasis on the
business aspect of these transactions"
then asked Senator Costigan, Dem.,
Colo) why did you write one Of
those invited to subscribe: We want
you to know we are thinking of you.' !"
That was John j. Raskob, the form
er Democratic national committee
chairman.
I'VE would have to think of him
to get him on the list" Whitney re-
torted quickly.
Pecora attempted to bring out the
difference between a sale and an I'M
derwriting agreement, and finally,
Whitney with a show of impotence
said:
Il have said they were q direct
sale. But what I'm trying to convey
Is that they had the effect OF an I'M
derwriting arrangement. We wanted
to divide our risk and did divide 1t"
Pecora Hangs On
But Pecora would not let 60. He
pointed out that trustees of Phillips
Exeter academy and Andover acad-
envy were on one of the lists.
"You wouldn't ask the trustees Of
those educational institutions to take
part In the underwriting Of common
Stock?"
mo-" Whitney replied, "but let me
say that preferred stock was included
in the United Corporation units"
Senator Reynolds Dem. N. c. re-
called that Whitney had testified none