The Washington times., 1933-05-25
BLOCKED NIGHT
: WORK, SENATE
PROBE TOLD
Made Examiners Quit Office
At 6 P. NJ; More Letters
To Be Subpoenaed
(Continued from Page p

files and see whether your ex-
aminer missed any letter. That,
counsel must know, is not .
proper request"
Senator Byrnes CD Of South
Carolina suggested that Pecora in.
dicate any desired letters. Said
Pecora:
"When our examiners went
into the Morgan offices, we
asked permission to remain in
the offices until midnight. We
were limited to 6 p. m. COnSe-
quentIy, our work was seriously
Curtailed."
Pecora then demanded copies
Of all letters sent out by Morgan
officials offering clients stocks or
bonds. Davis replied:
II am willing to produce
files if the request comes from
the chairman or the committee
ITSELF"
Pecora charged that the Nor
gan firm was the only one which
denied his examiners the right to
remain inside the offices as late
as they wished. He said:
1--WE were not allowed to
make copies Of all the files we
desired to make. The firm Of
J. p. Morgan was the only one
which denied us the right to
remain after 6 p. m.
"Other houses allowed us to
stay until midnight. We had
. to get out Of the firm of J. P.
| Morgan at 6 p. m. For that
reason it was not physically
: possible to get everything we
desired. For that reason, too,
it has been impossible for me
to prepare the detailed kind Of
request that Mr.. Davis de-
mandS."
The exchange between Pecora
and Davis halted all testimony
Davis obviously was angered by
Pecora'S charges. He said:
"This committee doesn't wish
to hear a quarrel between Op-
posing counsel nor a discussion
of a question of veracity be-
tween the committee counsel
and myself, but / can't let these
statements 60 unchallenged."
Morgan's counsel recited how
Pecora's men spent hours each day
in the banking office. He said he
felt it wholly unfair and unneceS-
Sary to ask our men to stay up
with them until midnight"
Told to Prepare List
Chairman Fletcher held that
Pecora should submit a list of
letters he wished from the firm
The chairman told Pecora to pre-
pare the list and the committee
would make Morgan produce it.
Whitney gave details of his own
transactions in Allegheny Cor
poration common stock. He said
he bought 14,260 shares in early
1929 and sold BIAS shares that
year at profit of 100000.
Later he bought and sold 1000
more shares at a loss. He con-
cluded:
"TheSe transactions resulted
in a gross profit Of $146,125."
j. Pierpont Morgan was cast in
the role of a Senate hearing
"fan" while Whitney held the
witness stand. He sat on an un-
dertaker's chair, jammed between
a press table and the committee
table. The portly lord of Wall
Street perspired freely. He fol-
lowed the proceedings with great
interest,
Describes Corporation
Whitney, at the request of
Senator Adams CD of Colorado,
gave detailed picture of the
Allegheny Corporation as a giant
railroad holding company formed
by the Van Sweringens and
financed by j. P. Morgan & Co.
He said:
"The Van SweringenS wished
to effect a consolidation of four
systems and the thing seemed
! to be greatly in the public in.
tereSt to us.
"It seemed to us that the
holding company might serve
rs proper medium to effect
the consultations. We believed
in it and have always gone
along with them simply as
bankers. We had no interest
in any Of the stocks except in
one minor instance.
"The thing was in the minds
Of the Van SweringenS as lar
back as 1916. We have always
believed in it,"
Whitney spoke in a converse.
tional tone, as though explaining
a bond issue to a board of di,
rectors. He continued:
1--WE helped them finance the
Chesapeake and Ohio Corpora
ton which held $4S,OOO,OOO in
bonds of the Chesapeake and
Ohio Railroad. That was in 1927,
TOOK IN ERIE IN 1929
''In 1929, they developed still
further their idea of cOnSOIi-
dating Eastern roads. They
took in the Erie and some other
systems. Then we developed
the idea of the Allegheny Cor
pOratiOn to hold the securities
Of these lines"
Whitney explained that the
Van Sweringen railroad interests
totalled $130.000.G00 in assets.
Againsk these assets. he added, the
f,4.e