The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-06-02
Money Kept Rolling In
While Other Fortunes
Were CrumbIing.
PANIC POOL DESCRIBED
Operations to Maintain
Prices During Stocks
Break Revealed.
BY LYLE c. WILSON
United Press staff Correspondent

WASHINGTON, June q
Stock market operations
which showed that j. P. Nor
gan & Co. made money even
during the desperate days of
1929 when fortunes we're lost
in crumbling stock prices
we're made public today in the
senate Morgan investigation.
Some of the market operators
went back to 1926 But questioning
by Ferdinand Pecora, committee
counsel, revived the dramatic cpl
sodes of black October, 1929, when
Morgan partners Joined with Gug-
genheim brothers and five banks in
a panic pool to maintain stock
prices.
Inquiry also revealed a list of
persons who obtained personal loans
from j. P. Morgan & Co. On the
list was Frank w. Stearns of Bos-
ton, one-time confidant of the late
Calvin Coolidge.
The Stearns loan was paid off
May 2, 1880. The amount was not
given.
Kings on Favored List?
Another highlight of the morn
ing was the questioning of Sem
atOr Robert R. Reynolds dem, N.
g., who attempted to elicit from
George Whitney, Morgan partner,
whether any members of the British
royal house, King Albert of the
Belgians and Premier Mussolini of
Italy were on any of the bargain
counter" stock lists of the House of
Morgan.
Whitney said he knew of no such
royal connections.
The market crash" syndicate
bought 1,146,6O9 shares of various
stocks in three weeks of operations
which ended November II, 1929, it
was brought out in Whitney's tes-
timony.
Early in 1880, the syndicate sold
out at profit of $1,067,355.
A list of Morgan pools, joint &C
counts and syndicates, going back
to 1926, showed that Morgan was in
forty-one operations in which there
was but one loss-$90 1896 in stock
of Cellanese Corporation in 1928.
Profits Are Revealed
Profits on the others was $685.
Ola, the largest being 1883, 1886. 18 in
Proctor and Gamble common in a
deal from July Is, 1929, to June 2.
1896.
The next largest profit was $685.
1920 in Allegheny Corporation
representing 60 per cent of syndi-
cate in which the Guaranty Com
pany was 40 per cent participant
The exhibit put in evidence
showed DreXel & Co. made a profit
of S103,874 in six operations, but lost
S28,268 in q Sharp and Dohme syn
dictate in March, 1881.
An example of Morgan operations
during this period was in a common
stock option account with the Ale
ghany Corporation, a railroad hold
ing company.
Panic Pool" Described
On May II, 1929, Morgan & Co.
agreed to loan S9,675,000 to General
Securities Corporation and to o. P.
and M j. Van Sweringen. Recipi-
ents of the loan, with the object
Of liquidating it, offered Morgan
an option to purchase 272, 500 shares
Of Allegheny common stock at s29
per share. The provision was made
that Morgan would pay to the Van
Sweringens any net profits on the
transaction up to but not exceed
ing 81 a share.
J. P. Morgan 81 Co. ceded to the
Guaranty Company 40 per cent
interest in this option upon origi-
nal terms.
The Guaranty Company sold the
272,500 shares. j. P. Morgan e. Co.'S
so per cent of profit amounted to
5000, 929 20.
Whitney said that the panic
pool was organized because all
serious minded people" in the New
York financial world believed it
necessary.
The participants assumed a seri-
GUS risk, he continued, but did so
because they we're members of q
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