Evening star., 1933-06-10
TAX CHANGES SEEN
RESULT Of MORGAN
PROBE AS IT ENDS
Firms Head Condemns "Un-
fair Criticism" of Clients
Who Bought Stock.
PUBLICITY ON INCOME
RETURNS is FIRST STEP
Huey Long Seeks to Tie Up Article
Attacking Him With Lamont
as Inquiry Closes.

BY the Associated Press
The Senate's investigation of j. p,
Morgan & Co. is over, for the present
at least, but developing today was a
train of consequences which will seri-
ously affect the country's income tax
payers.
Publicity for all tax returns was voted
by the Senate last night in an amend
ment to the industrial control bill, and
there was every indication that this
removal of secrecy would be made law.
A drive to prevent loss-showing stock
sales designed to "evade or reduce" In
come tax payments was announced by
Guy T. Helvering, the new commits
sioner Of internal revenue.
Both were direct results of the Nor
gan inquiry's disclosures and of previous
Banking Committee investigation re-
suits. The Morgan partners paid no
income tax in 1881 and 1892, and
hardly any In 1890, because of losses
established from shrinkage of security
values. Charles E. Mitchell, former
chairman of the National City Bank, is
on trial now on a tax evasion charge
resulting from previous senatorial in
vestigation.
La Toilette Proposes Publicity.
Senator La Toilette, Republican, of
Wisconsin, in moving the adoption of
the publicity amendment, had asked:
Does any one suppose that these
evasions which have been revealed
would ever have taken place If the
taxpayer had known as he sat down
to make out his return that it is to
become matter of public record?"
Helyering said the senatorial investi-
cations had caused many people to SUBJ
nit additional tax returns and that his
agents were going over with extreme
care all returns showing loss establish
ing transactions.
The Senate Banking Committee to-
day turned over to subcommittee the
decision whether to proceed during the
Summer with the investigation of pri-
vate bankers, or defer it until Fan.
VIII Survey Situation.
Chairman Fletcher said the subcom-
mittee would meet Tuesday with Ferdi-
nand Pecora. counsel, to survey the
inquiry of Kuhn, Loeb q Co. and Dill
lon. Read & Co.
At the same time, Fletcher said, the
will consider with Pecora
the work he should do during the
Summer IN preparation for future
hearings.
Fletcher announced the appointment
of Senators GoldSborough, Republican,
Of Maryland, and Steiwer, Republican,
of Oregon, as temporary members OF
The subcommittee in charge of the In
luiry in place of Senators Couzens,
of Michigan, and Norbeck,
of South Dakota.
Couzens is on his way to London to
attend the Economic Conference and
Norbeck has been in Ill health.
The long Morgan inquiry ended with
q parting shot from the central figure,
j. P. Morgan, in which he condemned
what he called unjust criticism lev
eled at the selected clients to whom his
firm sold stocks at bargain prices.
Morgan's statement was read to the
just after they had been
presented with two more lists of such
customers, clients, who obtained Johns
Manville stock at $40 and $50 below
market prices.
Again included were such names as
William H. Woodin, Norman H. Davis,
Owen D. Young and John j. Raskob.
The sales were long before Woodin or
Davis entered official life
They were the last of a series of
lists. To all named Morgan g. Co. had
sold stock, from 1927 to 1929. at prices
On which the buyers could have reaped
almost immediate profits of nearly $685.
100000. Testimony at the close
showed there had been similar Morgan
sales in 1920 and 1924, prior to. the
period covered in the present inveSti-
CATION.
Morgan Deposits Drop.
In the final evidence was a balance
sheet of the Morgan house showing
that from the first of the year to
March 81, its deposits had dropped from
,340, 900 900 to $238, 900 600; its holdings
If U. S. securities dropped from s224.-
100000 to STAG, 1000, 900, and of State or
bonds from $4,000 to ST.
100000.
Most of the final day was spent
stock transactions of three
Morgan partners and the effect on their
income tax return. Near the end Pc
,ora began to question Thomas w.
Lamont, also, but when he failed to re-
member details, Pecora told him to be
'eady to answer in the Fall
Two of the partners, it developed
Thomas S. Lamont and Harold STAN
income tax reductions
through stock losses in sales to their
vives The other, William Ewing, de-
allied an involved story whereby he
md his wife loaned stock to trust ac-
counts for their children and obtained
money which was held non-taxable.
Late in the afternoon Senator Cos
.igan, Democrat, of Colorado, cues
ioned Thomas w. Lamont almost an
lour about the influence of the Morgan
irm and its many corporate activities.
ie said a recent book had stated that
dorgan through interlocking director
ties and other means controlled one
ourth the corporate assets of the
ountry.
"I think you would have to reach
ONE far-fetched conclusions to reach
like that figure" Lamont
miled
"I know these men who arrive at
ome. Of these far-fetched figures may
e perfectly sincere" he added, but I
hink they have to bring In remote con-
ections or no connections at. all. In
ther words, think there is a popular
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