Evening star., 1933-07-07
BANK PROBE HALTS;
AGENTS CARRY ON
Pecora and Investigators Go
to New York for Three
Months Work.
BY the Associated Press.

BY the Associated Press.
The Senate Committee investigating
private banking sent its agents back to
New York today to dig for three months
into the records of bankers, brokers
and the stock exchange
Chairman Fletcher announced there
were no plans for further hearings until
october. but served notice the commit
tee was subject to his call and might
be hurried into action If developments
warranted.
Ferdinand Pecora, committee coun-
sci. was already back in New York to
conduct personally the undercover in
vestigaticn preparatory to Fall hearings.
Before he left, he announced the in
curry would be directed into J. P.
Morgan & Co.; Kuhn, Loeb & Co.;
rillon, Read & Co.; the Chase Securi-
ties Corporation and the stock ex-
change.
Recessed Yesterday.
The series Of hearings recessed yes
terday afternoon after Pecora ques-
toned H. H. Lee, president, and A: j..
County. director, OF the Pennroao Cor-
DOTdllOI,
Pecora expressed amazement at
statement by Lee that he did not know
about negotiations by his company Tor
a S3S 10000 block in the Plttsbureh
& west Virginia Railway until they
were consummated.
Frank E. Taplin. Cleveland capitalist,
told the committee he set up trust &C
counts for his children to lessen MS
income tax.
The Statement was made after Pecora
said his Investigation showed Taplln. as
trustee for his son. lowered his income
tax for 1929 by S374.921. In that year
he filed his return as an investor. al
though In 1926 a deduction had peen
claimed as a dealer in securities. 3,
Taplin said he could not recall and
did not know anything about the law re-
garding payments as dealer IN securl-
ties.
Investors Rate Lower.
Pecora said profits to the trust OF
Frank E. Taplin, jr., In l92s from tne
sale If Pittsburgh & West virginia
stock were s2,559.132.
The tax was paid at rate OF 12H2
per cent as an investor, Pecora Salo
while if it had been paid as a dealer
the rate would have been much higher:
Pecora said the trust paid q tax OF
5000 900 instead of $68400
In 1925, he added, loss sustained
in 1925 was claimed in. the trusts IN
come tax return and following some con-
troversy the deduction was allowed.
Questioned by Pecora, Taplin agreed
he created trust accounts in 1913 Tor
his children to lessen his tax.
BY this means, he said, he was able TO
claim deductions which would not De
permitted under the present law because
of changes in the gift provisions.
Taplin said the loan of $1.95O.o00
from Pennroad was made as trustee
for his 11-year-old daughter.
President Lee of Pennroad. recalled
to the stand, told the committee he
had not known of the negotiations with
Taplin until they were concluded.
Agreement Was Oral.
Pointing out that the deal was the
largest single transaction in the cor
poration's history, Pecora asked:
How could negotiations involving
$38, 600, 900 be arried on without you
as president knowing about them?"
Lee replied the negotiations were in
formal until ratified by the Pennroad
board at a meeting he did not attend.
County was called 10 the stand late
in the day.
Pecora was suggesting that his tes-
timony be dispensed with when County
asserted all purchases made by the
Pennroad Corporation were in the in
terests of it's stockholders and the COM
mittee counsel decided to swear him
and question him.
County said no conflict Of interest
had yet arisen between stockholders
of the Pennsylvania Railroad and the
Pennroad Corporation, but that, If 1t
did, he would act for the benefit Of
the latter as q director of the holding
company.
Questioned by Pecora, County said
the Taplin purchase was by word Of
mouth, instead of written, because 1t
was perfectly safe in dealing with q
man of that kind.
II have seen more legal controversies
over written agreements than oral
ones" he told the committee.