Evening star., 1933-05-24
MORGAN OPPOSES
BANKS INSPECTION
Declares Private House Must
Act ConfidentiaIIy for
Clients.
(continued From First Page }

couldn't the Assembly pass law II
investigate or SUPERVISE"
Morgan nodded, and Glass said, II
looks to me that we are including New
York State in this inquisition."
Morgan revealed to the COMMITTEES
that his firm takes new partners with
out requiring them to furnish new
capital.
Place Names in Record.
The committee counsel opened the
hearing today by addressing Morgan:
You were asked yesterday whether
your firm had made any loans to in
dividual officers or directors OF com
mercial banks"
Morgan nodded.
The counsel then recited that the
committee had decided to put the lis'
on record.
After Morgan had identified it by
saving. ct am informed it is correct,
the list went into the record.
Pecora read the names and the wit
ness identified their banks.
The record showed that Dawes and
TAYLOR had paid off their loans.
Mitchell, former chairman Of the
National City Bank, now on trial for
income tax evasion. has disclosed that
the loan to him has $6.000,000 out
standing, though 1t was larger at first
One loan was listed to a joint &C
count participated in by Harvey D.
Gibson. Mortimer N. Buckner and
Artemus L. Dates. 1t was marked as
still unpaid. -,
Morgan testified they were connected
with the New York Trust Co., but no
date of the advance was given.
Pecora asked about the loan to Davis,
now Ambassador-at-large in Europe. :.
Il can't say" Morgan answered.
"I'm not familiar with it.
. George Whitney. partner in the
firm. commented that it was very
small loan."
Doesn't Know Details.
In turn Pecora asked about details of
other loans outstanding, mentioning
r C. Dunaine of the First National
Bank of Boston, and the loan to
Mitchell.
MORGAN said IT don't know"
He suggested that Whitney be called
and smiled as Pecora continued down
the loan list.
It have to give you the same answer
to all those questions about details OF
loans outstanding" he said.
Another clash occurred between COM
mittee members over the course OF the
inquiry.
senator Glass was again protesting,
but Chairman Fletcher insisted the IN
quiry should 60 on as basis Tor oank
legislation. :,
with respect to chartered banks, /"
Pecora asked, you are familiar with the
limits or the amount Of loans to q
single individual?" :,
Il am roughly familiar with 1t,
Morgan said.
such a limitation?
s"I don't know enough about 1t. 1t Is
asmatter of legislation which must De
conformed to by commercial banks.
You have no opinion of Its reason
ableness?"
Il have no opinion. have no
opinion on the reasonableness OF the
law"
Senator Glass interrupted to say that
for 40 years Congress had held the
opinion such loans should be limited 10
10 per cent, land don't believe an
opinion of Mr.. Morgan would alter Con-
gress' opinion"
Relations Confidential.
Have you any opinion OF the wisdom
OF applying such limitations to private
banks?" Pecora asked.
my opinion is it wouldn't 'be neces-
sary,'' Morgan replied.
Pecora asked II J. p Morgan g. Co.
had opposed New York State legislation
for more extensive examination OF prl-
vate banks.
II don't know of my own knowledge" :"
els the failure OF your firm to adver-
tise as bank intended to avoid exami-
nation?"
"Why do you object to this investiga-
ton which is given commercial banks?"
II object because our relations with
our clients are much more confidential
than the relations between q commercial
bank and its customers can be- Nor
gan said
AS to putting private banks under the
same legal regulation as commercial
banks, Pecora asked of Glass whether
he had overlooked that such legisla-
ton has been opposed and that Con-
gress might want to do something on
its own account"
Glass commented that he didn't
think Congress had authority for such
legislation"
Fletcher broke in to say that banks
ol1 dll lLllClobatG puokAACoo, dAAA AAC NAah Y
doubt that Congress had authority.
Glass said nothing had been done, and
Fletcher then shot at him:
Yes, banking subcommittee has
been trying to frame legislation for two
years, but it hasn't done anything"
Glass heads the subcommittee which
has been framing banking legislation.
He flushed and looked over his spec
tacles at Fletcher
Pecora resumed his questioning.
II think the chief reason why our
relation to our depositorS Is more con-
fidential than those of a commercial
bank" Morgan said, lis that we have
no board of directors, no shareholders,
we can work swiftly, do what we want
to dc. Lots OF people don't want di-
Tectors to know their private affairs"
Il think many bank directors don't
know anything about their depositors'
affairs" Couzens commented dryly.
Leaning over the table, Pecora rested
his square chin on his hand and smiled
whenever there was dispute between
committee members.
so you think the chief difference
between the relation of a commercial
and private bank is their depositors
and that the latter have no directors
and shareholders" Pecora asked.
Well, they have certain limitations
by law and get certain privileges, Nor
gan said.
He submitted a prepared statement
as to the differences and that was put
into the record.
Most of the committee members lis
tened without joining in the question
ing, but Glass and Fletcher frequently
interrupted.
Whitney occasionally intervened to
help his chief answer questions.
Morgan would sit motionless ana ex-
pressionless while his associate spoke
from behind him, as though he were
not even listening.
Pecora asked Morgan If his firm ever
had given a depositor statement OF its
position,
"A depositor could have had one
but nobody ever asked for one. MOI
gan replied. My father made ina