The Washington times., 1933-05-31
MORGAN cOMPANY MADE SsqooOoO PROFIT on UkVTEI

Nba
iii March, 1929, two months
after the United Corporation
was fOrmed?"
II didn't know that"
George Whitney then replaced
Howard on the stand to tell the
committee the details of issuance
Of United stock.
''WhO were the subscribers to
this stock? Was 1t q private or
public Offering?"
"It was q private offering.
There was no public offering"
Pecora handed the witness q
list which he asked the Morgan
partner to identify as that to
which the United stock was
privately offered. whitney identi-
fled the list and it was offered
in evidence. Whitney said it was
made up jointly by Bonbright
and Co., and J. P. Morgan and
Co.
To Segregate Names
Many Of the names on this list
were suggested by Bonbright and
Co., Whitney said. He, was asked
by Pecora to segregate the names
into those suggested by each firm
and he said he would try to do
so during the lunch recess.
Whitney agreed. too, to supply
q breakdown Of the $1,000 units
listed in q block offering to the
firms Philadelphia affiliate,
Drexel and Co.
The witness said the offerings
were made to the "favorite cl-
ents" at SIS for a unit Of one
share Of common stock and one
share of the so-called So prefer
ence stock.
Pecora recalled here that Nor
gan acquired 100000 option war
rants with the stock it got in the
United Corporation for $10,000,-
900.
whitney Takes Issue
Whitney took issue with Pecora
when the counsel tried to pin the
United Corporation, j. P. Morgan
Bonbright stock transactions down
to the specific date Of January
II, 1929, when the two finance
houses each turned over $10,O00.-
600 to the United Corporation for
stock and option warrants.
The banker insisted it was
merely completion Of a long.
drawn-out series Of negotiations.
He said that j. p. Morgan g. Co.
started looking into the utilities
field early in 1928.
Pecora than brought out that
in addition to the original trans.
action, j. P. Morgan, through
later transactions, brought its
total United Corporation hold.
ings to 100000 shares of com,
mon stock, 1000, 900 shares Of the
preference stock and 1,714,00O
option warrants.
None Of these option warrants
were included in the offerings to
"favorite clients"
Traded I'm On Jan. 16
Pecora showed Whitney a news
paper saying the United share.
were traded in on the New Yorl
Exchange on January 16. Whit
ney earlier said first trading wa
on January 81 and in PhiladeI
phia, He agreed the shares mus
have been traded in earlier If thl
| papers showed it.
Senator Glass (D.) of Virginia
stepped out Of the room a mo
ment, and when he returned askec
Whitney if the preferred list
had been submitted while he wa!
out. Whitney replied smiling:
1--WE didn't call It that"
Was my name on it?"
''NO."
"At the time Of this offer had
there been any public trading
in this StOck?"
I don't think So"
Then Pecora produced a marke
report, showing the unit given tC
the faVorite clients at $75 sold fol
500 on the Philadelphia exchange
January 81, 1929. Whitney agrees
this was correct.
"DOes that figure Of SIS a
unit at which Morgan & Co.
sold this stock to this list Of
special clients represent the
cost to j. p. Morgan g. Coz"
eyes," according to our books.
Whitney said the common stocl
was listed on the Morgan book
at $25 a share and the preferret
stock at $50 q share. He said tn
Morgan firm did not include tn
optional warrants as 'assetS.
The warrants entitled the holder
| to buy common stock at $27.50.