Evening star., 1933-10-25

held by banks were paid of before the
$50, 900 600 held by the public. asserted
that all had now been paid except
1867 900 held by banks.
Associated with Chase in holding the
certificates were the National City
Bank and the Continental Illinois Bank
Trust Co. of Chicago.
Pecora attempted to show Cuba's
financial condition became bad withir
four months after the second $4,000
600 OF serial certificates were sold tC
the public
Chase files, showing in May. 1929. the
Government desired to transfer SO. .OO0,-
600 from collections under the public
works law to other uses.
These funds were back Of the Gov
ernment loans.
Pec0ra Demands Answer
As the discussion of the $50 900 coo in
Cuban certificates continued. Pecora
over and over again demanded that the
witness answer his questions
Morgan said the bankers made pay
mentS to the contractors on Cuba's pub
lic works on certification OF the Cuban
government and without going behind
that certiication.
1t has been publicly charged the pub
, lie WORKS cost the Cuban government al
least so per cent more than the
should" Pecora said
Morgan identified q letter to MIN in
1891 from the Havana branch of the
! Chase Bank reporting the Cuban gov
'ernment had not segregated its special
funds raised for public works and was
using this money for other purposes.
You learned through this letter
: that the Government had not lived up
TO the provisions of its loan agree
ment?" Pecora said.
Morgan replied the agreement mere
ly provided the special revenues would
be set up on the books and not actu-
ally segregated
1t seems a good thing to me that
Chase has gone out of the securities
business. Senator Couzens, Republic
an OF Michigan remarked.
Letter Disclosed.
Pecora read an advertisement to the
public offering the securities saying
the public works funds would be set
aside for repayments.
The letter to Morgan. marked Con
f1dential." said. in part:
AS you know, there has actually
been no segregation of special funds in
the treasury and the government from
time to time has been compelled to use
all funds in hand to meet budgetary
and other pressing payments.
1t has been only with the greatest
difficulty that the Government has been
able to return funds borrowed from
the special public works funds in order
to meet December payments
The letter added the Cuban branch
OF Chase was arranging for the first
Shipment Of gold-one of $1,000, 600
nee the Cuban gold coin was struck.
In order to keep knowledge from the
public Of such large shipment of Gu
ban gold. we are doing all possible to
handle the shipment as secretive as
possible and the Government has estab-
lished customs censorship" the letter
added
Replies Unsatisfactory.
During his examination of Morgan
-'ecora, dissatisfied with the replied said
L wish had judge here to punish
you for contempt"
moment later he added that If II
would help to get the witness to an
sWer. I'll try Establishment, short OF
kissing
The Senate investigators plan to seek
further details of a transaction men,
toned briefly In previous testimony
whereby former President Machado
used 100000 out of a trust fund of
$4,000 900 for some purpose other than
that for which it was intended. with
the knowledge of the American State
Department.
The use of the trust fund money by
Machado was mentioned briefly in a let
ter from one Chase official to another
but the purpose of the fund and the use
to which the money was put by Ma
chado were not brought out
Chase officials said of the stand
however. the money was a government
pension fund and that Machado used it
for other government purposes with the
consent of the Cuban Congress.
The letter mentioning the incident
asserted that Machado and the Ameri-
can State Department were worried
about the matter.