Evening star., 1933-05-25

I'D some of the things said yesterday"
He said that the trading in Allegheny
CORPORATION stock before February Is,
1929, was a when issued basis"
THE stock was selling around IS,
think" Whitney said, but 1t wasn't
listed till February 15."
| Pecora asked if any restrictions were
placed by Morgan and Co on the
| Allegheny stock sold its favored clients.
There were no strings" Whitney said.
"Then these purchasers. could nave
taken advantage OF that market 10
make a substantial profit?" Pecora
asked.
"They could have on that market
| Whitney said But in the great
| majority of cases the offer was made
and accepted before any market existed
at ALL"
But it was much more tempting in
the letter to Secretary Woodin," Cou-
zens commented.
| Then ensued a sharp tilt between
Davis and Pecora on correspondence re-
lating to favored customers.
Davis said he thought the examiners,
I in the 'three months they went through
these files, got what they wanted"
Pecora said he had asked the Morgan
| firm to produce letters which his ex-
aminers had been unable to get.
"The firm of Morgan & Co. denied
| us permission to remain In their ofnces
until IL o'clock-the only firm which
denied us this privilege" the counsel
"What is wanted?" Senator Byrnes,
Democrat. of South Carolina, asked.
"All letters relating to offers Of par
ticipation in the Allegheny Corporation
issue. the General Motors issue. Stand
ard Brands and Johns-Manville," Pc
cora said. "The Allegheny list has been
made public but the others have not
gone into the record"
VIII Furnish What Is Wanted.
Davis disputed Pecora's Interpretation
of the examination Of the Morgan hles
vigorously.
1--WE will furnish what is wanted. If
we are told what it is," he said.
"The files are too bulky?" asked
Exactly" Davis said. 1.-THE investi-
gators of Mr.. Pecora had all these files.
If the committee wants all correspond
ence files re.ating to this subject, they
will be produced But feel the request
ought to come from the chairman OF
the committee
II don't think the implication should
remain on the record that Morgan g.
! Co. withheld any records" Glass said.
| 81 think Pecora should submit list
of the correspondence wanted" Couzens
said
Pecora charged that because of the
| time limitation imposed on his inveSti-
gators by Morgan & Co. they weren't
able to make the kind Of investigation
| the examiners wanted to make"
The committee counsel caused pro-
| k-z4 L,,D 11r ca{l nc
days elapsed before we would get a
photostatic copy of correspondence de-
sired, though the photostatic machine
was right in the office"
That calls for reply from me-" said
the Morgan counsel adding that the
firm had supplied complete answers to
a list of % questions submitted by
! Pecora.
when his investigators came into the
office" Whitney broke in, they were
| furnished with commcdious room for
work. Our staff was occupied at night
satisfying additional requests made every
day by Mr.. Pecora.
"I told him it would be unfair to
our men assigned to assist him to have
them work with his investigators up
until midnight and then work the rest
of the night fulfilling his ether re-
quests.
1T was reported to me that his COM
plant about the photostats had no real
foundation. In my humble Judgment,
the cooperation with the examiners
could not possibly have been exceeded"
Explains Stock Dealings.
Questioned by Senator Barkley,
Whitney explained his participation in
the Allegheny issue. He said he ac-
quired 14,260 shares at cost Of
S285,5o0.
II sold about 5000 shares in July,
1929" he said, "and 1000 in September.
This profited me about s229, 900.
The average price was about 48.
I'm 1880 l sold about 1000 shares
and later 1000 more, and I still hold
about lis shares. My gross profit was
sl46.250"
Then Whitney discussed the Morgan
Co. relations with the Van Sweringens,
who formed the Allegheny corporation.
i He said the Van Sweringens, railroad
operators. were trying to consolidate
Eastern roads
They first formed the Chesapeake
Corporation" he said, land acquired
the Chesapeake & Ohio. The wisdom
of this has been shown by the fact that
the chesapeake & ONO Is Still one
of the roads that is paying dividends.
I'VE believe the consolidation in the
public interests We had been bankers
for the Van SweringerS for many years.
We had no interest in any of the stocks
they acquired in railroads, with one
minor exception"
He added that the Van SWeringens
acquired the Pere Marquette after the
Morgan firm had helped sell bonds of
the Chesapeake Corporation.
"They desired to consolidate their
holdings" he said. "They decided to
form the Allegheny Corporation for this
purpose"
Morgan and Davis, sitting directly
. behind Whitney, followed his testimony
closely with Thomas w. Lamont, an
other partner, behind them.
. The scraping of chairs on the marble
, floor made continuous squeaking ac-
compartment to the testimony. Morgan
| scanned copy of the statement which
! Whitney read.
! PUT it In the record, we are wasting
too much time" Glass broke In.
, Whitney wanted to read two more
paragraphs
i've no objection" the Virginia
Senator said. But your voice Is min
, gled with the scraping Of these chairs.
J We might as well be in railroad shop I"
when the idea Of forming the Ale
ghany Corporation originated" Whitney
structure"
He went ahead to discuss In . calm