Evening star., 1933-05-25
COOLIDGE AMONG
! FAVORED CLIENTS
Former President on List
of Buyers-BeIoW-
From Morgan.
Continued From First Page.)

of 1000 pounds and approximately
similar amounts for 1891 and 1892 The
English income tax includes tax on
the rental value of property owned
which the owner uses and which would
have increased his income had he
rented it.
1T does not include any capital
gains and losses"
After concluding the written part,
Morgan added:
II take great pains and have all my
life to pay all the taxes I am called
upon to pay by the various govern
ments-not to underpay and not to
overpay."
"Then the fact that you paid no in
come tax here in 1881 and 1882 is be-
cause your losses were greater than
your income" he was asked.
That's it," Morgan replied, my
losses were greater than my income"
He added with chuckle:
I'm not responsible for these figures.
view them with great regret when I
60 to pay them
The financier's last remark referred
apparently to his British payment.
"If the English law had held here you
would have paid income taxes in 1881
and 1892" asked Pecora.
ITO quite considerable amount"
Morgan replied, but I wouldn't have
paid as much in 1928 and 1929"
THE tax paid over there has no
relation to the tax in the United
States?"
None at ALL" Morgan said.
Senator McAdoo, Democrat, Of Cali
fornia, on the list of favored investors
revealed yesterday, formally denied at
the opening of the inquiry that he was
q preferred client" of Morgan.
He submitted figures to show he had
lost S2,565 on three purchases he had
been invited to make by the Morgans,
although he disclosed a $4,000 proht
on the 500 shares of Allegheny stock
he had been allowed to buy.
from nc the ue' Banking AMI Committee room to
the huge caucus room in the Senate
Office Building, and spectators throngeo
these expansive quarters as readily as
they had the first.
Will Rogers, humorist, had chair
back Of the press tables
Just behind him was Mrs. Eugene
Meyer, wife of the former governor Of
the Federal Reserve Board.
Senator McAdoo opened the hearing
with his prepared statement, IN which
he said: -
when the United States entered the
World War, in 1917, I selected Russell
c. Lefingwell of New York to be counsel
for the Liberty Bond issues.
He was a member of a prominent
law firm in New York, versed in these
particular matters.
"I had known him as a young man
his family and mine having lived across
the street from each other at Yonkers,
~ Y.
subsequently, because of Mr.. Lef-
fingwell's ability, I made him an As
sistant Secretary of the Treasury,
place he filled with great ability and
distinction
when I left the Treasury in 1918,
Mr.. Lefingwell remained with my sue
cessor, Mr.. Carter Glass, and also
believe with Mr.. Glass successor. Mr..
David r. Houston.
AFTER leaving the Treasury, he be-
came q partner of the firm OF J. P.
Morgan g. Co.
Ten years after I resigned as Sec
retary of the Treasury, and four years
before L became United States Sena- !
tor from California. Mr.. Lehhngwel Of |
fered me the opportunity of making |
three investments through his firm, !
j. p Morgan & Co.:
81. February, 1929, 500 shares of the |
stock of the Allegheny Corporation.
which paid for in cash and which I
sold at net profit of $4,000.
'.2. January, 1929, $50 shares Of COM
mon and $50 shares of preferred stock
OF the United Corporation, which was
sold at loss of approximately $400.
"3. September, 1929, 1000 shares of
Standard Brands, which was sold at
loss of $7,065.
"The net loss on these three trans
actions was s2,565.
"I have never been preferred
client of j. P. Morgan & Co.
THE participations to which I have
reference came to me solely through
my friendship with Mr.. Leffingwell.
Prior to this time I had never had a
transaction with the firm of j. P.
Morgan g. Co., nor have / had any
transaction with that firm since
"I have never borrowed from j. P.
Morgan e. Co., and therefore, have
never owed them anything"
No Strings Attached.
When he concluded, Pecora questioned
Whitney about the sale of the Allegllany
stock to special list, including McAdoo
and Woodin.
There was so much noise In the hall
that Chairman Fletcher shouted:
Keep quiet or get out. All these
chairs scraping makes 1t SOUND IKE
q railroad train going through the hall.
Pecora asked Whitney whether Morgan
and Co. had any list of "the names q
close friends who were given an oppor-
tunity to subscribe to various issues
mo, sir" Whitney said.
He then asked permission to clear
SPECIAL NOTICES.