The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-06-02
ABRUPT RECESS IS
TAKEN IN inquiry
ON MORGAN DEALS

Battle or Question Addressed to
Lamont HaIts Action
Until Monday
Washington, June 2.-(P)-The SELL
ate investigation OF J. p. Morgan and
company was recessed abruptly until
Monday after John w. Davis, counsel
for the firm, protested Friday against
q question directed at Thomas S. La
mont. junior partner, which led up to
his 1880 income tax return.
The white-haired Davis, former
presidential candidate, leaped to his
feet to object when Ferdinand Pecora,
aggressive senate committee counsel,
called young Lamont to the stand and
asked him about sales Of stock De-
cember 30, 1890.
This is not fair play" Davis pro-
tested, asserting that Lamont had not
been advised he would be questioned
about the stocks.
While Lamont sat quietly at the
table, and his senior partner-J. P.
Morgan-listened intently from the
background, Davis and Pecora argued
the question.
Chairman Fletcher finally ruled the
question was pertinent.
Lamont then said he did not recol-
lect about the sales and he was direct
ed to look them up over the week.
end.
Asks Private Meeting
Davis asked Chairman Fletcher for
a meeting of the committee Monday
before the resumption Of the inquiry,
presumably to decide whether Pecora's
question was pertinent.
The sudden cessation of question
and answer. which through several
hours had held the rapt attention of
another crowd because of George
NEUTRALITY-SUSPICIOUS. Morgan partner
giving the inside story of huge market
operations to stem the market fall
of late 1929, caught everybody by sur
prise.
Lamont had been on the stand a
very few minutes before the clash &C.
Cured. He was the third Morgan
partner to be examined
After the recess was taken, Pecora
refused to reply to questions from
newspapermen whether the question
had any connection with the question
of income taxes.
Previous testimony before the COM
mittee had disclosed that the 20 Nor
gan partners paid q total Of $4,000
income tax in 1880.
The committee was taken behind
the scenes of financial drama of the
chaotic days Of late 20 by Whitney
who told In matter-of-fact fashion
how few bankers-with $3.50, 900, 900
at their fingers-supported the crash
ing market.
1t was a profitable operation, too.
Whitney testified that although loss
had been expected, the LAG, 900 shares
purchased were sold for $1,067, 1856
more than the cost, exclusive of in
terest.
The massive purchases lasted some
three weeks.
1T ended, as recall, on November
H. said Whitney quietly.
The Morgan artnership agreement,
finally was made public by the COM
mittee Thursday It showed that J.
p. Morgan himself has the final word
on all vital matters, can Dust partners,
fix the amount of money due them.
and can even dissolve the firm under
certain conditions.
Such power concentrated in one
man raised the question among the
investigators as to whether the bank
ing house should be classed as a part
nership for taxation purposes. Sen
ator Costigan dem. ColoD raised this
issue and it was believed to be among
the important angles now under scrut-
my at the department Of justice and
the bureau of internal revenue.
The operation involving two separ-
ate lists of customers was a distribu-
ton Of Johns-Manville stock, in June,
1927. Those classed by the investiga-
tors as real insiders obtained 343, $50
shares at Nv, the Morgan's purchase
price. Others bought $1,000 shares at
57h.
Cummings Is Investigating
Attorney General Cummins made
known last night that the justice
department was investigating the in
come tax returns filed by the Nor
gan partners. It already was known
that the internal revenue bureau was
examining the long guarded part
nership agreement in connection with
the tax payments.
The point at issue. as described by
investigators, is that the agreement
may legally constitute an employment
contract rather than a partnership,
which would affect deductions allow
able under the income tax laws.
The final hour of Thursdays ques-
tioning developed several important
points. Among them:
Harvey G. Couch, director Of the
reconstruction corporation was listed
as selected purchaser of Morgan's
stock IN 1929 before he took office.
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