The Washington times., 1933-07-03
]. P SUPREME.
= IN j. 8. WORLD
Of FINANCE
Study Of Statistics, Brought
Out by Banking Inquiry,
Gives Comparison
By international News Service

BY International News Service
The powerful private banking
firm Of j. P. Morgan & Com
pany stands alone as the Ameri-
can leader in the world Of
finance.
This was disclosed today when
a study of statistics filed at the
Senate banking inquiry dispelled
the popular belief that the in
ternational banking partnership
Of Kuhn Loeb & Company con-
stituted q formidable rival Of the
Morgan firm. A comparison Of
the two firms balance sheets re-
vealed the Morgan firm as far
superior in capital. assets, buSi-
ness, influence, and profits.
Morgan Supreme 10 Years
The Morgan firm far outclassed
Kuhn-Loeb annually for the last
decade, at least. the records re-
vealed. In the great boom year
Of 1929, the Morgan firm had
four times the capital, fifty times
the cash, five times the deposits,
and nearly six times the assets
Of Kuhn-Loeb.
At the close of 1892, after both
firms had suffered enormous
losses for three successive years,
the Morgans had three times the
capital, IA times the cash, more
than 20 times the deposits, and
IL times the assets.
The two firms ran a close race
In recent years in the flotation Of
securities. Their profits were
nearly even on this phase Of the
varied banking business. Except
for this, the Morgan firm out
classed its only competitor in
every other class Of business.
The Morgan firm rolled up mil
lions Of dollars in profits where
the Kuhn-Loeb firm was satisfied
with thousands. When both firms
entered the railroad world to Gre
ate "iron horse" empires, the
Morgans financed the Allegheny
Corporation, drew down ire
mendous profits, and retained con-
troll Of the railroad empire started
by the Van Sweringen Brothers.
The Kuhn-Loeb firm helped the
Pennsylvania railroad finance the
rival holding company, the Penn
road Corporation, but virtually
stepped out Of the picture after
taking profit Of about $4,000, 900.
The two firms escaped Federal
income taxes in the last few years,
because Of their tremendous bust
ness and security losses. Neither
j. Pierpont Morgan, head of the
one firm, nor Otto H. Kahn, re-
puted head Of Kuhn-Loeb, paid
any personal income taxes in 1880,
1891 or 1882.
1929 q Different Story
In 1929, it was a different
story. The Morgan partners paid
$11,000,0O0 taxes, Of which old
~. p" personally was liable for
about 100000. His taxes alone
equalled all those paid by the
Kuhn-Loeb partnership. Kahn's
share Of the latter was but 1884,
900.
In 1928, another boom year, the
Morgan partners paid $7,00O,0OO,
Just about seven times the taxes
paid by Kuhn-Loeb partners. In
deed, it was said. j. P. alone paid
more than the whole Kuhn-Loeb
partnership.
AS for capital, in 1929, the
Morgans had $11S,6O4,1S3.75 as
compared to but $25, ,000, 900 capi-
tai in Kuhn-Loeb. In 1882, the
Morgan firm had $53,194.076 Of
capital while Kuhn-Loeb had but
$17,50O,000. It was the same
story in deposits.
In 1929, the Morgans held $492,-
2o2, ,666 Of other peoples money
but only $15,210,248 was deposited
with Kuhn-Loeb. In 1882, the
Morgan deposits shrank to $780,.
O47,701, a loss Of $152,000, 900, but
the Kuhn-Loeb deposits totaled
but $15,210,24S.
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