The Washington times., 1933-05-23
MORGAN DENIES PARTNERS FORCE WAY INTO DREcToRsPs

were $4O,s89, 1857 on December 81,
1927; 68,546,325 on December 81,
1928; $64,281, ,479 on December 81,
1929; $57 7,S22,5 on January 2,
1881; $22,607,957 on January 2,
1882, and only $13,875,028 on De
cember 81; 1882.
There were so many :@..SScrroga-
tions from Senators that Senator
Goldsborough finally objected. He
asked that Pecora be allowed to
proceed with his questioning Of
Morgan. Chairman Fletcher
agreed and complained that COM
mittee members were asking too
many questions.
Pecora then asked:
do you recall that in March
of this year / addressed a ques-
tionnaire to your firm"
Morgan replied affirmatively.
Pecora then took up one of the
questions in the QUESTIONABLE
which Morgan answered with a
statement of condition from jan
uary, 1927. to December, 1882.
This was placed in the record.
Morgan took the document,
showed it to Davis and when the
attorney nodded said Eyes, that's
it,"
"Has your firm always pair
interest on deposits?"
"As far as / know"
"YOu know that is SOP"
eyes, for 40 years"
care any of the members of
your firm members of the board
of directors or boards of trus-
tees of banks?"
II got q whole list here"
Morgan took a huge book of
records and began reading the
banking directorships of his part
ners. The list began with Thomas
P. Lamont, a director in the Guar
anty Trust Company almost every
partner was a director or trustee
of a different bank.
Some of DirectOrships
Thomas Cochran is a director
in the Bankers Trust Co.; George
Whitney in the Guaranty Trust;
William Anderson IN the New
York Trust Co.; William Ewing
in the Bankers Trust Co.; and S.
Parker Gilbert in the Bankers
Trust Co., among others. In all
13 partners held such posts.
HAS the banking firm of J.
r. Morgan ever been subject to
power Of inspection by the
banking powers 70 New York;"
There were rules which
exempted u.s."
what were these ruleS?9"
Russell Leffingwell, another
partner, was sworn to answer
Pecora's question about legal
regulation of the firm in New
York State. He said:
'It is, roughly, that private
bankers who do not pay inter
est on deposits under $500
and who do not advertise them.
selves as private bankers for
deposits are not subject to ex.
animation, but the Superin-
tendent of banks is empowered
to make such examinations.
I'm speaking from memory"
Another partner handed Lef-
fingwell copy of the New York
laws. He said the New York
banking commissioner could ex.
anime the books of any private
banker to learn whether regular
examinations were necessary.
Said Leffingwell:
"The practices in that respect
of our firm are such as it
would scarcely arise in the
mind of the commissioner any
necessity to axamine our firm"
Morgan crossed his legs and
leaned back in his seat while LEI
fingwell answered questions. He
listened attentively. Pecora asked:
"The firm of J. p. Morgan
Has always CUuAHnVN wASA VAAVS~
laws that would exempt it from
Inspection"
Leffingwell replied:
II should hardly put it that
way, the nature of our buSi-
ness was such as to exempt U.S."
"Is there any minimum sum
which the firm of J. p. Morgan
would receive as deposits on
drawing accOunts?"
"A couple of thousand dol
lars, but the average is much
more than that"
Morgan said his firm reported
"every year in very, very great
detail to the Federal Reserve
Bank of New York"
"FOr how many years has
your firm submitted such re-
ports to the Federal ReServe?"
''FOr the last five years In
great detail"
"YOu know, of course, they
are submitted in very great
confidence to the Federal Re-
serve?"
eyes, 1 do"