Evening star., 1933-06-29
Says Sale of Stocks at End
of Year Is "Sort of An
nuaI Custom"
GOVERNMENT GAMBLING
ON ITS OWN PROSPERITY
Admits He Sold Shares to Members
of Family in 1880 and
Other Years.


Committee may make some inquiry
into the Roosevelt boom market"
but it would not be done now. Il
think it is simply based on antici-
patton Of what prices may be under
the new governmental program"
Fletcher said of the stock market
rise
By the Associated Press.
Testifying that sale of stocks at the
end Of the tax year was sort of an
annual custom" Otto H. Kahn, senior
partner Of Kuhn, Loeb g. Co., recon-
mended to Senate investigators today
repeal Of the capital gains clause of the
tax law.
Kahn said the clause made the Gov
ernment gamble" on the prosperity Of
the Nation and caused the market to
be depressed at the end of the year.
Senator Barkley, Democrat. of Ken
lucky said Kahn was the first witness
to tell of bear raids" on the market.
Kahn asserted that Congress would
perform a great service" if it would
find a means to regulate speculation.
Must Adjust Selves.
The witness contended the admins
tration's new DEAL must be given a
fair chance.
I'VE all must adjust ourselves to
new day. he said. Whether reaction
ary or progressive, We must attempt to
give this new legislation a new deal.
mo one" he continued, lis prepared
10 say now whether it is wholly or
partly right or wholly or partly wrong.
We must give little time to test the
thing out and ascertain later what sug-
gestions could be made without pull
ing out half cooked"
Kahn had told the committee he sold
stock to members of his family at the
end Of 1890 as well as other years
He admitted this after saying secur-
reacquired from his daughter three
months later, though the exchange was
dated the following day.
Deducted $4,000 Loss.
He said he could not remember how
often he had sold stock at the end of
a year or whether he bought the stock
back each time
Kahn said the stocks sold in Deem
ber 1880, caused him loss of $4,000,
which he deducted in making out his
income tax return.
Government agents contended the
stock was bought back in less than 30
days and therefore was not deductable.
In prepared statement, Kahn said
he obtained similar stock from his
daughter, Maud E. Marriott, in March,
1881, but the exchange was dated De-
cember 81, 1880, on the advice of at
torneys.
The weary Senators plan a quick
wind-up of the current inquiry into
Kuhn, Loeb & Co. Hoping to COM
plete the present hearings by tomor-
row night, the committee announced
the current inquiry would be confined
to the income tax evidence and one or
two large Kuhn, Loeb financial opera
tions
Decision to resume the investigation
in the Fall, beginning with j. P. Morgan
q Co., with the date fixed tentatively
for October 3, quieted fears of some
that the inquiry was to be choked off,
or hurried through.
Delay'was sought by committee men,
bers who want Ferdinand Pecora, COM
mlttee counsel, to have adequate time
In which to prepare his cases.
Sold Stock to Daughter.
As Kahn took the stand today Pecora
asked if he had been able to refresh
his memory about the stock sales he
was questioned about yesterday.
The banker said he had sold the
block Of more than 5000 shares of stock
in various companies, on December 80,
1880.
Kahn testified the stock was sold
directly to his daughter.
He then asked permission to read
from memorandum prepared by his
counsel overnight.
With the committees permission. he
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