The Washington times., 1933-05-23
the Individual affairs of each

fornia observed 1t was a question
to be determined by the commit
tee in Executive session.
Here Morgan and Senator Bark
ley CD of Kentucky engaged in
a brief discussion Of the articles,
Barley asking what they set
forth as to liability. Morgan said
that the articles did not limit
the liability because there isn't
any limit to the liability"
Couzens asked how closely the
Drexel and Morgan firms were
linked.
Davis touched Morgan's shoul.
der and answered the question
for the financier, saying:
perhaps in a strict interpre-
tatiOn of the law, Drexel Com
pany is separate from ]. p. Nor
gan g. Co. There are two jun
iOr partners in Drexel Com
pany, who are not in the Nor
gan Company"
Senator Costigan CD of Col
orado asked whether the "other
partnership agreements were on
file anywhere" referring to the
London branch of J. P. Morgan.
Morgan said yes that the Lon
don partnership was Incorporated.
He then added that the Paris
partnership was complicated"
George Whitney, one OF the
Morgan partners was sworn with
u. P" still on the stand. He
stood beside the committee table
to explain the Pennsylvania law
on co-partnerships. He said
there were 20 partners in both
companies and four more with
interest only in the Drexel firm.
He was asked:
do you set up an entirely
separate financial organization
in Philadelphia"
He replied:
"On our books, yes. But there
is a joint liability on all 20
partners, who are members of
both partnerships"
Morgan was perspiring freely
by this time and sat with eyes
half closed as his partner, Whit
ney, and committee members
talked over intricate details of
the giant finance house.
Pecora asked Morgan when the
fiscal year ended for his com.
pany. He said December 81. His
firm had accepted $34O, 900 900 in
deposits in the last fiscal year,
he added.
what was the capital of
your OrganiZatiOn?"
"$53,194,OOO.
Barkley asked:
do you count deposits as a
liability in your bookkeeping
prOcess?"
Morgan laughingly replied:
II do. That's very neces-
Sary."
On December 81 of 1882, Nor
gan said, his company had on
hand $33,OOO,OO0 in cash, $780,
900 in call loans and 1924 ,000, 900
in Government securities. Cou-
Zens asked:
DO you 9 pay interest on your
depOsits?"
Morgan replied:
rates."
"If we prohibit commercial
banks paying interest on de-
mand deposits, would that
affect private bankers?"
Couzens first said demand
loans and Glass corrected him.
CouzenS retorted he was trying
to get Glass straight on his bill"
Morgan read from the balance
sheet of December 81, 1882, to
supply the information on his
firms business.
The Morgan condition state
ment showed high mark on
January 2, 1881, when the bal
ance reached $7O3, ,9O9, ,4O3 SO.
This compared with 1854 ,292, sos
on December 3, 1927, $629, IT'S, 1922
on December 81, 1928, and $780,
361 1888 on December 81, 1929.
Decline of S271,OOO,OOO
On January 2, 1892, the bal
ance was $432, $3.50, ,788, a decline
of $271, 100000 from the high
mark of the previous year. On
December 81, 1882, it was $424,-
7O8,O95. The firms holdings of
U. S. Government securities in
creased in the last year. The
high mark in ownership of Gov
ernment securities was on Decem-
Der 81, 1882, when the firm held
$224,580.15O. In other years the
firm held:
December 81, 1927, $17s,152, OTIS;
December 81, 1928, $113,397, 1888;
December 81, 1929, $165, ,667, 1894:
January 2, 1881, $19O,739,957:
January 2, 1882, $11O.821, ,189, and
December 81, 1882, 1924, $50, ,15O.
There was a sharp decline in
the firms holdings Of State and
municipal bonds through these
years. Morgan listed these hold
ings as:
$163,14O,854 on December 81
1927; $lO3, ,981,95 on December
81, 1928; $64,577,O05 on December
81, 1929; $82,752,582 on January
2, 1881; $12,173,741 on January
2, 1882. and only $6.745,290 on
December 81, 1882.
Holdings of Bonds
The firm also reduced its hold
ings of corporate bonds and stocks.
The corporate bond holdings were
$26, 6,O19,843 on December 81, 1927;
| &15 7QQ $40 m Dooopohar o. 100o,