Evening star., 1933-05-26

that both Houses have passed a securl-
ties bill, the intensive investigation OF
J P. Morgan 81 Co. is to be continued
Senator Fletcher of Florida, chairman
of the Banking Commute, said today
the passage of the bank reform bill
would not in any way halt the continu-
ance of the committees investigation
of the Morgan firm, which is to be fol-
\ lowed by investigation Of Kuhn, Loeb
& Co.. and other private bankers In
New York.
Weathered Other Storms.
Representatives of the House of Nor
! gan, however, have seen this great
/ banking house weather other investiga-
tions by congressional committees, in
cluding the Pujo money trust investi-.
| CATION in 1912 and the investigation OF
the New York. New Haven L. Hartford
Railroad in 1918. 1t is safe to say. how
ever, that never before has there been
such searching inquiry into the opera
ton Of the company as is now under
way.
NIa committee has still to go into the
operation of ]. P. Morgan e. Co. in the
matter of foreign loans and the flotation
of foreign securities in this country.
The committee has developed and
spread on its records the fact that
the Morgan firm is in the process of
making large loans to the officials Of
other banks in New York; that the 20
partners of the Morgan firm are men,
bers of board of directors of the largest
industrial corporation in the country.
1t has also developed that the Nor
gan firm has handed out favors to men
prominent throughout the country by
letting them purchase at "ground-floor
prices securities whose market price at
the time has been many points higher
These favors have been distributed to
leading figures In both the Democratic
and Republican parties. as disclosed by
the two lists of favored clients and
friends already made public during the
investigation.
Impartial in Politics.
On Capitol Hill, if not elsewhere, this
impartiality SO far as politics is con-
has brought the open criticism that
the company seeks control in both par
ties.
The Glass bank reform bill would
compel the Morgan firm to give up
either its commercial banking business,
the acceptance of deposits and the
making of loans, or its hotation Of and
dealing in securities. 1t would go fur
ther and provide that If the Morgan
Company elects to continue as a bank
of deposit it must be subject to ex-
animation by the authorities. an ex-
animation from which 1t is now free
Admittedly. and this view is COIN
cided in by representatives of the Nor
gan firm, the enactment of the Glass
bill as law will give the firm con-
siderable food for thought as to what
its future activities shall be. There
could be no possible doubt, however, it
appears. that under present conditions
the Morgan firm will elect to continue
as a bank rather than as house hand
ling securities. The last few years have
been comparatively lean years in the
matter of issuing new securities. Fur
thermore. it has been testified by Mr.
Morgan himself that the major part of
his firms business has been banking
business.
Political Repercussions.
Developments in the political field
growing out Of the Morgan investi-
CATION may be far reaching. While
it appears that the Morgan firm has
not included in its lists of preferred
clients men actually in the Govern
ment service, it has done these favors
for men who have since entered public
life and men who have held high Offices
in the past, as for example, the late
President Calvin Coolidge, and former
Secretary of War, Newton D. Baker.
Already the fact that Secretary of
the Treasury Woodin several years ago
was favored by the Morgan firm in the
purchase Of securities below the market
price has been a subject of attack from
the Senate floor Whether this attack
will be continued remains to be seen.
1t is expected. however, that the in
vestigation will show Mr. Woodin's
name included in more lists of favored
clients before the investigation is over