Evening star., 1933-05-27
S|XPARTNERS owe
| MORGAN COMPANY
Identity of Debtors Is Not
Disclosed by Senate
Investigators.
(Continued From First Page.)

the international banking house were
these:
II had assets of 425,000, 900 and de-
posits of S340,000,000 at the close OF
1882.
More than so corporations doing in
terstate business maintain with it de-
posits of more than 100000 each.
Members of the firm meet daily, but
keep no minutes of their doings.
Securities were sold to five lists OF
special customers at bargain prices, Two
of the lists, all made public so far, in
cluded the names of the late former
President Coolidge, Secretary of the
Treasury Woodin. Senator McAdoo,
Democrat, of California; Norman H.
Davis. American Ambassador at Large;
John w. Davis, John J. Raskob, Charles
A. Lindbergh, Newton D. Baker and
other celebrities.
None of the 20 members of the Nor
gan firm paid income taxes in 1881 or
1882 and their total in 1880 was only
$4,000 after payment of S11 100000 IN
1929.
Paid Tax in England.
J. p. Morgan, senior partner, paid
income taxes in England during those
wears because the law there does not
permit deduction OF capital losses.
Morgan partners hold directorshlps
in MANY large commercial banks and
scores of the biggest business corpo-
rations of the Nation.
More than so officers and directors OF
banks have been extended personal
loans during recent years by the hrm
and some of them are still outstanding
and undercollateralized.
The Morgan firm and its Philadel-
mia affiliate, DreXel & Co., maintain
deposits of more than $50, 900 600 In
nearly 80 banks throughout the East.
Total securities marketed by the
Arm. in collaboration with others since
January l, 1919, total S6,024, 600, 600, OF
which about one-third have been paid
of
YES are set aside to protect UNDER
collateraliZed loans and are deducted
from its net worth estimates.
George Whitney, a member Of the
firm, made 1889 900 profit in 1929 In
a single transaction of 5000 shares OF
stock in Johns -Manville Corporation, OF
which he is director, in addition to a
profit of $4,000 on Allegheny Cor
poration stock, which went to one OF
the special client lists. :.
Testimony by Morgan that his bank
Is not subject to the usual bank exam
ination because of its nature as prl-
vate bank, and his statement that pr1-
vate banks should not have the same
scrutiny that chartered banks DO, be-
cause their relations with depositors are
more intimate.
Woodin and Davis Hit
A declaration by Morgan that private
banks are national asset" and not
'.nationl danger"
A statement that the Morgan firm
has never employed high pressure
salesmanship' and favors publicity on
underwriting profits in the marketing
of securities.
A letter from Raskob, formerly chair
man of the Democratic National Com
mittee, thanking the Morgan firm for
including him on special client list
and expressing hope he could reclpro-
cate" in the future.
Testimony that the Morgan frm did
not expect beneficiaries of its bargain
prices to reciprocate.
These developments already have
brought repercussions from both sioes
Of the Atlantic. chiefly from the income
tax and special client lists develop
ments.
Scattered demands have been made
In Congress for the retirement OF Sec
retary Woodwin and Ambassador Davis:
Congressional committees have acted
to plug up holes in the income tax laws
and agitation both for and against the
income tax method Of raising revenue
has increased.
Senator McAdoo, member OF the
Investigating Committee, has denied he
was preferred client. Of the Morgan
firm, and said that though he proflted
from one stock transaction, he lost on
three others.
The investigation has attracted Ma
tion-wide interest. Record crowds have
attended every session. Extraordinary
precautions have been taken to guard
the principals and the evidence in the
inquiry, with special police and secret
service men mingling with the crowds
and constantly following the chief
characters in the drama.