The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-06-01
QUIZ TO TRACE
J. P. MORCAN'S
POLITICS PATH
PeCOra Prepares Powerful
Attack on Defense of
Cut-in Lists.
BY RAY TUCKER
Times Special Writer

WASHINGTON, June 1.-Ferdi-
nand Pecora is preparing a powerful
attack on the defense of the Nor
gans cut-in lists presented so vigor-
ously by George Whitney, partner in
the Wall Street firm.
Whitney, a capable financier of
only ten years experience with the
Morgans, has given hours to eX-
planning that the special ALLEGATION
of stock to politicians and promi-
nent industrialists at bargain rates
was not an effort TO buy influence
or favors.
He has insisted that they were
straight business transactions in an
attempt to underwrite gigantic
flotations. Privately and publicly
the young partner, said to be the
firms coming man." has begged his
hearers to believe this theory.
But Pecora and his aids are
understood to feel that whitney
"outsmarted" himself several times,
and that his explanation needs ex-
PLANTATION.
Doubt Politics Link Denials
Several committee members open
ly show disbelief in the argument
that the ground floor rates had no
connection with the past or future
political influence of the men bene-
fitted.
The case of General John j, Per-
shing is believed to break down the
Whitney argument, which was that
the ALLEGATIONS were made to men
who knew the risks they were TAX
ing. and had plenty of funds to take
a chance.
General Pershing, according to
the witness, got to know several
partners well during the war. After
the war he asked them to look after
his investments, "as he did not know
much about business"
This is held to weaken the con-
tention that these inside" investors
fully we're aware they were taking
a chance.
Why Friends" Took Risks
When Whitney first told of these
cut-ins, ne referred to recipients as
friends" The letter to John j..
RaSkob said they wanted him to
know I'VE are thinking of you"
After sensing the bad impression
the revelations had made on the
public mind, Whitney described the
favors as a regular part of the "un-
derwriting game"
Now Pecora wants to know why
friends" we're subjected to risks.
Whitney also said the men re-
Ceiving these stocks we're supposed
to hold them as an investment. They
were not handed out, r" insists, so
that the beneficiaries could sell i'm
mediately, and take a profit.
But the letter to RaSkob empha-
sized that there are no strings to
this Offer" meaning the securities
could be sold at any time. The
that the stock was selling at a much
higher figure.
SkepticiSm Is Voiced
Senator Robert R. Reynolds
Dem., N. c. showed great Skepti-
cism at the insiStence that there
was no connection between high fin
ance and high politics in these ar
rangementS.
He developed that some recipients
were in Office at the time, others
had been, and it was likely that
others would be-
He also described the politicians
who benefited as "semi-public Off
Gals then eXerting great influence
in framing party platforms and
holding opinion.
Whitney made no denial of this,
but added that it did not destroy his
original contention that only one
Dwight Morrow, then ambassador
to MeXico) was in public Office
when placed on the list"
Sensational Developments Seen
Pecora also drew admissions from
Whitney that Morgan's ownership
of large blocks of stock in numer-
Gus corporations gave him nominal
control. The partner conceded that
20 per cent ownership furnished a
good iumping-otf place toward
control"
Questioning returns again and
& again to these two points-the al
legged Morgan control of American
economic and political life.
With more sensational revelations
expected, it is understood Pecora
plans to paint picture of Nor
gan financial hegemony still only
limited at.