Evening star., 1933-05-24
.PECORA PROPOSES
I NEW LEGISLATION
Fletcher Says Congress May
Use Interstate Clause
for Control.
FINANCIER HITS AT PLAN
Income Tax Regulations Given
Blow Through Testimony
Before Committee.
BY G. GOULD LINCOLN.
Why a private bank?

Why a private bank?
Why the present income tax?
These are the outstanding ques-
tionS developed as the second day
of the Senate investigation of the
House of Morgan swung along
with J. p Morgan, senior partner
of the firm, again on the witness
stand today.
Slant Toward Change.
Questioning of the witness by Ferdi-
nand Pecora, counsel for the Senate
Banking Committee, today took a de-
cided slant toward the need of change
in the laws relating to private banks.
Indeed. they seemed to raise the ques-
tion of the advisability of private banks
as they now exist.
Senator Fletcher, chairman of the
Banking Committee conducting the in
quiry, suggested that Congress might, If
necessary, reach private bankers through
the denial of the use of the mails or
through the interstate commerce clause
of the Constitution.
great banking house has been built up
in the last half century or more as
private institution, said he saw no need
for legislation dealing with private
banks
When it was developed at the hear
ing that Morgan and his score of
partners had paid no income tax in
1881 and 1892, and that the total
amount of income tax paid by Nor
gan and his partners in 1880 was ap-
proximately $4,000, the existing in
come tax laws Immediately took sock
in the jaw in the mind of the man on
the street.
Ask "Who Is Paying?"
The man and woman of moderate
and small income asked the question:
Who is paying these income taxes?"
Their answers were invariably: Il am
paying the taxes"
While it Is quite true that the Morgan
partners did not pay the income tax
because they had the privilege of writ
ing of their losses during the years of
the depression, it is nevertheless true
that al. of these partners continue to
receive large incomes. If the Morgan
partners lid not pay income taxes. it
is pointed 1t, how many other reputed
legally also to avoid the payment of
income taxes in whole or in part?
At time when the House Ways and
Means Committee. in the administration
of the public works and industries bill,
Is preparing to boost the income tax
rates on moderate and small incomes,
the revelation at the Morgan hearing
comes with dull thud. Today those
members of the Senate and House who
are strongly opposed to increasing the
normal ircome tax rates as proposed
by the Ways and Means Committee
took their cue Immediately from the
testimony before the Banking COM
mittee.
Senator Copeland of New York, for
example, who at the time of the pas
sage of the last revenue bill joined with
Senator Walsh of Massachusetts, in
sponsoring the manufacturers sales tax,
said today that he believed such tax
should now be substituted for the in
come tax increases and special taxes
proposed by the Ways and Means
Committee.
Doesn't Advertise.
The House of Morgan hangs out no
sign that it is a bank, nor does it
advertise in any way that it is bank.
If 1t did So Immediately the bank would
be subject to examination by the New
York State bank examiners.
Morgan admitted on the stand today
his house did not advertise itself as a
bank so that 1t would not be compelled
to undergo such examination. He plead
ed that the relations of his firm to its
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