Evening star., 1933-05-29
President Believed Satisfied
With Pecora'S Work
in Inquiry.
Continued From First Page.l

19ou-So- 9oOiVOV.
Morgan officials testified in the IN
veStigation last week that all together
they paid only $4,000 income tax IN
1890 and none in 1881 or 1882. Proflts
for 1892 were not included in the ng-
llres presented by Ferdinand Pecora'
the committee counsel.
Demands for changes in the income
tax laws have echoed in Congress since
the revelation that the Morgan part
r1ers have escaped payments during the
last two years, ~,
The House in passing new tax Dill
last week eliminated the carry-oVer
loss provision of the law, ana Repre-
sentative Vinson. Democrat, OF Ken
tucky, announced yesterday tnaI tHe
WAYS and Means Committee, OF Whlcn
he is a member, will soon begin an
investigation to find ana close otiiei
"loopholes' in the statute.
Pecora's figures showed that for the
fve-year period, 1927 to 1881, inclusive,
the Morgan firm made more than SIS
600 600 from the sale OF securities.
Morgan partners testified during last
weeks inquiry that the investment
business was a comparatively minor
part of their operations.
In addition to their profits from the
sale and underwriting Of securities, the
Morgan partners reported to the COM
mlttee profits running into the NIL
lions from operations in joint accounts
or syndicates, but the total was untabu-
lated. In 1890. they reported a proht
of sl,853959 from one OF these opera
tions alone, in Proctor & Gamble stock.
Also the profits from underwriting
ventures were not complete, because In
MANY cases the firms retained blocks
of stock, which were not estimated in
cash.
The records. drawn from hitherto Sc
cret Morgan files, disclosed that in 1929
the firm made $1,272 900 from issues it
managed, and STA, 900 from issues man
aged by others, while Drexel made
Sl95 900 from issues it managed, $4,000
from issues managed by others, and
1852 900 from underwritings.
In 1880 Morgan made 4,074, 900 from
issues it managed, $4,000 from issues
managed by others and 81 1896 from
undertakings, while Drexel made
S6s4 900 from issues they managed and
$267 900 on issues originated by others.
Figures for 1881.
The figures for 1881 showed these
profits, respectively, for Morgan as
sI,261 900, $2eo,eoO and $4,000. and
Drexel as 81 1881 600 and $l54,000
While these figures were coming out,
Pecora and his staff were in New York
preparing for resumption Of the open
investigation. .
The reports now before the commit
tee show that three more favored client
lists were sold stock at bargain prices
by the Morgan firm, besides the two
already made public, which included
some of the Nations best known fig
ures, among them Secretary of the
Treasury Woodifl. who. after a boat
trip yesterday with President Roosevelt,
announced he viii stay in the Treasury
despite clamor in and out of Congress
for his custer.
Little information about the Gus
toner lists is given in the Morgan re-
ports. For instance, in telling of their
operations in Standard Brands. Inc,
which they sold at bargain prices to
many. including former President Cool
idge. they merely said:
'On or about September 5, 1929,
722,6O0 shares were disposed of at 80
to selected list"
Moves for Probe Of Davis.
The report disclosed, however. that
in January, 1929, the Morgan firm sold
S15,o7o units Of United Corporation
stock to 291 individuals at $75 unit,
when testimony has shown it was SELL
ing on the market at 500.
At the same time 202 $50 shares were
disposed Of at the same price through
Bonbright & Co. and 81, 900 through
Drexel g. Co.
Meanwhile Tinkham announced he
would introduce today his resolution
calling for an investigation Of the busi-
ness relations of Davis.
The Massachusetts, Representative,
noted as big game hunter, charged
that Davis has been under personal
obligation to j. Pierpont Morgan & Co.,
the fiscal agent of the British govern
ment."
The stock syndicate and joint ac-
count operations of the Morgan firm
were submitted to Pecora in answer
to a question put forward by him at
the beginning of the inquiry. but the
reply became available Saturday for the
first time.
Thousands of Shares Involved.
Pecora asked for lists of all pools,
ioint accounts, and or syndicates in
which either of said firms Morgan &
Co. or its Philadelphia affiliate, Drexel
81 Co.. or representatives participated,
giving the names of securities involved,
names of all participants and all details
with respect to the amount Of the par
ticipation and profits and losses therein" )"
Some of the operations reported in
answer to this question were Of a minor
nature, but others involved thousands
of shares in some of the Nations biggest
corporations.
Probably the biggest was the bankers
pool" organized after the crash OF 1929
to stabilize the market, in which 1t was
disclosed Saturday the total profits to
participants were reported as 81 OCT .355.
Committee investigators are inquirlng
into this operation further, to determine,
if possible, how the trading was done
md where the 1,l46,609 shares traded
ln were obtained.
F. S. Moseley & Co. had 80 per cent
interest in this account, in which 1885,
900 shares were traded.
Most Of the operations were con-
Quoted in 1929, the peak year on the
stock market, and we're closed out that
same year.
Larger Operations Summarized.
A summary of the larger operations
follows:
American Super-Power Corporation
and United Corpora ton, 1929; profit to
Morgan, $50, 1925; Asiel & Co., the
same.
Anaconda Copper Mining Co. stock,
1929, profit, $ll3,765, divided equally
between the Morgan and Asiel COM
panies.
Commonwealth and Southern Cor
poration common stock and number
of other issues 1929; profit, $78,228:
Morgan and Asiel each getting S3l ,29l
and United Corporation. Morgan sub
sidiary, S15,645.
Fleischmann Co. common stock, 1929
profit, $l246l3, divided equally between
Morgan and Asiel.
General Motors Corporation. 7 per
cent preferred, 1927; when the account
was closed Morgan obtained 2,8l9