Evening star., 1933-06-05
MORGAN AID GIVEN
TOVANSWER|NGENS
Formation of Huge Dominion
of Brothers Outlined at
Senate Inquiry.
Ry the Associated Press.


Members Of the Senate Committee
investigating j. P. Morgan & Co. said
they were told in executive session to-
S. Lamont, young partner in the bank
ing firm, sold stock to his wife which
he later rebought In connection with
his income tax return for 1880, but
that the committee counsel did not
claim 1t YVES Illegal.
Pecora presented his case to the COM
mittee in executive session to deter
mine whether 1t should 60 into the in
come tax question.
John w. Davis, Morgan counsel, told
the committee there was nothing illegal
about the stock transaction and argued
the committee had no authority to SO
into 1t.
Pecora replied, according to members,
that he was not concerned with the
legality, but that he wanted to show
the practice so the committee and
Cohsress could decide whether the In
come tax law needed remodeling.
Mitchell Transaction.
Charles e. Mitchell, former chairman
OF the National City Bank, is now on
trial IN New York for income tax eva
sion resulting from sale of stock to
hts wife, but IN that case the Govern
ment claims 1t was not bonafide sale
Pecora did not attempt to prove to
the committee there was any violation
Of law In the sale he said Lamont made
to his wife,
When Lamont was on the stand last
Friday, Pecora asked him about the sale
Of block of about 5000 shares of
stock December 30, 1880, but the wit
ness said he could not remember.
The evidence, say members of the
committee, shows that only part Of
this was sold to his wife.
The committee will meet again in
executive session tomorrow to decide
whether to 60 into the case, and also
whether to 60 into the personal stock
transactions Of two other Morgan part
ners. William Ewing and Harold Stan
ley.
Formation Of the Van Sweringen
Railroad dominion, with help of j. p.
Morgan & Co., was tersely told to the
Senate investigation of the powerful
banking house today by one Of the two
Cleveland brother railroad operators,
o. P. Van Sweringen.
Summoned to testify by Ferdinand
Pecora, committee counsel, o. p. Van
Sweringen calmly detailed from q pre-
pared statement the relationships be-
tween his interests and the Morgan
concern. His brother, M. j. Van
Sweringen, sat attentively by near the
chair held by J.. P. Morgan, who re-
turned to the hearing, although he had
been excused as witness last week.
Advance of the Van Sweringen rail-
road holdings from $4,000, 900 borrowed
In 1916 to the vast expanse now held
was chronicled by Van Sweringen.
Prodded by Pecora, the Cleveland op-
orator traced the entrance Of himself
and his brother, M. j., into the rail field
to a deal by which they got entree into
the Nickel Plate II years ago.
1t developed that the entire down
payment Of $2,000,000 of the $500 900
price agreed upon was borrowed.
Big Crowd Gathers.
Long before the committee met q
crowd began to gather in the big hear
ing room.
It was so hot that some men removed
their coats. The women, predominant
as usual, were in their Summer clothes.
Beofre any Of the Morgan party ar
rived Pecora's assistants dragged in the
big black trunk In which the evidence
Is stored.
George Whitney, principal witness of
the Morgan firm during the first two
weeks, was an early arrival, with Har-
old Stanley.
Taking the stand as the hearing re-
sumed, o. p. Van Sweringen told how
he and his brother went to the Morgan
house for financing and advice time and
again. They regarded the banking
firm, he said, "as does the world-wise
counselors in matters Of finance" Once
they accepted Morgan caution and
postponed acquisition Of big interests in
the Chesapeake & Ohio, now their most
and successful road.
Tells Of Buying Railroad.
The story the railroad man told be-
gan with the Van Sweringens' acquisi-
ton of the Nickel Plate because Gin
with an undertaking to pro-
vide rapid transit to some portions of
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