Evening star., 1933-05-23
D|SSENS|ON ENDS
INQUIRY SESSION
Glass Protests Questioning
of Banker on Income
Tax Return.
Continued From First Page.)

prepared statement, redu py iiiiiI wieAi
q clear precision, Morgan defended the
practice of his firm in permitting Its
partners to serve as directors OF other
Companies in whose securities the bank
ia Interested saying such an arrange
ment was valuable to all concerned.
He criticized the present trend OF
hesitation toward prohibiting such di-
rectorships.
It adds to the strength Of private
banks to accept deposits, he said, aware
that the practice has recently been
much criticized.
In substance, he defended private
banking as "a national asset and not
o national danger.
Huge Crowd Present.
The biggest crowd IN the history OF
Senate investigations jammed the huge
committee room in the Senate once
BuiIding. and overfiowed into surround
a hum of suppressed conversation
neryaded the vicinity, adding 10 tne
Atmosphere of tenseness that had oeen
apparent since arrivals frst stsrIe9
taking seats long before the scheouieo
starting time of 10 am
Senators wives ana social leaoeie W.
CuQlcQ IIldIly oCaeo'
First of the Morgan partners 70 atrive
was George whitney, who Will 1olio"
Morgan on the stand. 10y,
re took a seat in the front row WIN
RUSSELL Lefingwell, another partner.
THE crowd around the door was SO
a.,,se that even the witnesses nao 70
he pushed through the crowd.
Occupy Five Floors.
The Morgan group had spent ens
night at a local hotel wnere II nso s.a
engaged almost five full noors ior 'i'e
duration Of the inquiry -.,.,,
,sa+,,res relaxed as messengers bearing
n trunk full of records pushed past MN.
Ee was dressed In a dark blue suit WIN
A thin white stripe. 49,, -.
senator Townsend, Republican. OF
Delaware, the first committee menneI
to arrive. greeted and chatteo with
Morgan before taking his place
Pecora entered through a side ooor
shook hands with Townsend ana noooeo
to Morgan. Apparently the banker
senator Fletcher, chairman Of the
committee, soon took his seat by Pecora
at the head Of the table.
Morgan Takes Stand.
The pushing, milling excited throng
at the door was almost cut OF controa
despite the efforts OF committee aioeS
and special police. Even senators
found IL difficult TO gain admission.
FinaIly Fletcher raped his gavel for
order and on signal Morgan arose
slowly to make his way to the witness
chair.
IN an extraordinary procedure Cnar-
man Fletcher swore the ofhcial stenog-
raphers faithfully to atranscribe the
testimony.
He then swors Morgan.
"Would YOU like to make prelim-
mary statement" asked Fletcher, while
silence fell.
Il should like TO, Mr.. Chairman, II
might" Morgan said quietly.
20 Memhers Of Firm.
Answering the frst questions from
Pecora, Morgan gave his residence and
business addresses and said he was
member Of the firm OF ]. p. Morgan q
Co. in New York, Drexel g. Co, Phila-
delphia affiliate, and two houses abroad.
Morgan & Co. In Paris and Morgan,
Grenfell g. Co. IN London.
The business of ]. P. Morgan 6 90.
was founded in 1894.
I'VE conduct q general banking busi-
ness such as is conducted under the
laws Of New York for q private bank"
the witness said. -f.. .-.1g.
I'VE take deposits when they are
offered; we take orders, which we have
executed on the Stock Exchange"
But he added, The investment busi-
ness is not the largest part Of our
business"
"How many members has your frm7"
he was asked.
II think it's 20"
rWere they always that many?"
'.Oh, no; We added them as we needed
them"
How long has the firm been consti-
tuted as now exists?"
Since January 2, 1882" Morgan
said, on q prompting from Davis.
Of partnership.
''They are not here" Morgan replied.
All Partners Liable.
There was a negative answer when
the counsel asked whether there was q
copy available.
Pecora said he thought copy Of the
articles was essential to the hearing.
Davis objected, the partners are all
bonded"
"It is a purely private matter and
has no relevancy to this hearing" Davis
said. .....-
There was an exchange, with COM
mittee members participating, and Pc
cora said the articles Of partnership
would show, he felt, such things as the
question Of the relationship of the
partners to the profits. losses and capital
invested in this firm"
Davis insisted all the partners were
liable for liabilities under the New York
laws.
Pecora contended the articles Of CO.
partnership were essential to the hear
ing, but Senator Couzens asked that
this matter be settled in executive
session" and the question was dropped
for the time.
Senator Steiwer, Republican, Oregon
asked Pecora what phase Of the inquiry
would be pertinent to the partnership
information
1T is a question Of liability of this
frm which accepts deposits from the
public" Pecora replied, but he did not
press the matter.
Asked if his formal statement repre-
sented his own views, Morgan replied
Z did. but had been read by his part
ners and none dissented
Does it express the views Of all pri-
vate bankers?" asked Couzens.
"I can only speak for myself Nor
gan said.
Has General Supervision.
"T wanted to make clear that 1t
doesn't stand as a statement for all prl-
vate banks" Couzens commented.
as the business departmentalized
among the members?" Pecora asked
mot in any formal way" Morgan re-
piled. amplifying in reply to further
questions that IF subject comes up
and we have somebody who knows more
about it, he handles it."
What Is assigned to you?"
Nothing. used to be very actiye
but I found had some very good part
nerx and I leave more and more to my