The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-05-23
INTERNAL QUARREL
MARKS PROBE into
HOUSE Of MORGAN
Senators WrangIe Over Ques-
ton About Bank Partner
ship Agreement
BIG BANKER IS WITNESS
Defends Business Of His Firm
and Replies Quietly to
Many Questions
BIG BANKER IS WITNESS

Washington, May 23.-(F-Already |
deep In the Morgan secrets, and quar-
reling over differences dealing with
Morgan income tax returns, the sem
ate committee investigating the inter-
acknowledgement banking house de-
cided Tuesday to ask for its partner
ship agreement and the division of re-
sponsibilities and profits.
In an executive session, forced by
dispute between senator's over ques-
lions thrust at ]. P. Morgan about in
come taxes, this course was taken.
Counsel for the elderly financier OBJ
jected to furnishing the information
sought and protested when Morgan
was questioned as to reduction OF
over $2l 900 900 claimed on an income
tax return for the two days Of JAN
uary and 2. 1881.
Morgan defended the business of
his firm and replied quietly to many
questions bringing to light the secrets
of the business, which he said had
assets of almost $500, 100000.
But when he testified that he knew
nothing of tax matters which the
committee counsel, Ferdinand Pecota,
insisted on asking, dispute arose. The
crowd In the huge committeeroom
pressed forward eagerly to hear every
word.
Glass Opposes 'Badgering'
Senator Glass Dem. Va reminded
the committee counsel that Morgan
had said he knew nothing about the
questions brought up, but Pecora went
on, and Glass objected to the bad
gering of this witness" Senator
Couzens CRep. Mich) joined in the
argument; and before the audience
knew it. the hearing was adjourned
SO the committee could argue it out
in closed meeting.
Glass had protested that the bureau
of internal revenue had fully examin-
ed the Morgan returns, intimating 1t
was not necessary for the committee
to 60 into it.
Couzens heatedly observed they had
also examined the returns of Charles
E. Mitchell, former chairman of the
National City Bank, now on trial for
income tax evasion as result of
previous testimony before the COM
mittee.
Pecora asserted that returns made
by individual members Of the firm
had been accepted without examina-
ton by the income tax agents, refer
ring to return made for Mrs. M. w.
Newbold, OF Philadelphia.
Despite this dispute, no effort was
made at the executive session, follow
ing the public hearing, to check the
income tax inquiry.
The committee only voted to ask the
firm for a copy Of its partnership
agreement, which John w. Davis.
counsel for the banker. had question
ed the committees right to demand.
It was decided to ask for the agree
ment with the understanding a de-
cision will be made later whether It
will be made public.
At the opening of the afternoon ses-
sion the committee learned Morgan
had paid no income taxes for 1881
and 1882.
Assets Are s44, los, 095.56
Placing the deposits held by ]. P
Morgan and company at quarter OF
q billion dollars, the witness also gave
the exact assets as Of December 81.
1892, to the penny-$424, 708, 095.56.
MI ~ksa h4 co{A MIN
meet every weekday except Satur-
day.
rs there any written record or min
utes?" he was asked.
"only the names Of those who at
tended"
There is no record Of the deltber-
atoms or conclusions?"
None"
Morgan said it was decided not to
keep minutes when the partners be-
gan their daily meetings about 30
years ago"
At the opening Of testimony, in
prepared statement read by him. Nor
gan defended the practice Of his firm
in permitting It's partners to serve as
VI OtI1CA NO11Ak'01A1S0 80 ssAs~1~
securities the bank Is interested, say
ing such an arrangement was valuable
to all concerned.
He criticized the present trend OF
legislation toward prohibiting such
directorships.
It adds to the strength Of private
banks to accept deposits, he said.
aware that the practice has recently
been much criticized.
Offers Prepared Statement
would you like to make prelim-
mary statement" asked Chairman
mary statement asked Chairman
stand.
II should like to, Mr.. Chairman, II
I might" Morgan said quietly. Then
he began, saying in part:
THE private banker is a member o.
profession which has been practlced
since the middle ages
I'm the process Of time there has
grown up a code Of professional
ethics and customs. on the observance
Of which depend his reputation, his