Imperial Valley press., 1933-06-27
STATES DAVIS
PROF|TED BY
BOND BUYING
Kahn Says Roosevelt's Person
al Ambassador Got Commits
sions From Bankers.
BLAMES COOLIDGE BOARD
New York Financier Testifies
Easy Money Responsible For
Boom Years.
BY LYLE c. WILSON
United Press Staff Correspondent

Onttu fTeSS StdII Correspondent
WASHINGTON. June 81. U.P)--
Otto Kahn, head of Kuhn, Loeb
and company, told senate stock
market investigators today that
Norman II. Davis, President Roose-
Welt S European ambassador at
large, had received commissions ag-
gregating $35, 900 for assisting in ne
Gotiations of South American loans.
Kahn said Davis received $25 900
for aid rendered in negotiating a
100000 issue Of securities for
the Mortgage Bank of Chile. OF
this sum, Kahn said, the Guaranty
Trust company contributed $4,000
and others OF the underwriting
syndicate contributed $4,000.
Kahn added that Davis subSe-
quently received an additiona!
$4,000.
The Davis evidence was given by
the suave banker after he had
charged earlier in the afternoon
session that the federal reserve
hoard of the Coolidge administra-
ton was responsible for the easy
money and mania for speculation
and expansion that marked the
boom years of 1927-28-2S
"That is a sore point with us, -
Kahn remarked as Ferdinand Pc
cora, committee counsel, inquired
If he recalled the Chile Mortgage
bank.
The banker explained that the
soreness was caused by the fact
that the loan was in default al
though he said that when it was
issued in 1925 it was vouched for by
the United States depar tment of
commerce.
In testifyins on the ''easy
money! era, Kahn said: 1.-THE
damage was done in 1927
"Money was made too easy by
the federal reserve he said Ear
" in 1929 the Chicago Federal Re
serve bank tried to raise its rate
but the reserve board in Washing
ION forbade it,
but didn u the private bankers
help along the mania with brok-
crs' loans in unprecedented
iunounts?n demanded Ferdinand
Pecora, committee counsel.
ono countered Kahn, Ito put
it mildly the bankers couldn't help
themselves. The unprecedented in
fluence of the buying public made
it impossible for us to stop the
. movement.
WASHINGTON, June 27 - Otto
II. Kahn, head of Kuhn, Loeb and
Co, charged today before the SEN
ate stock market investigating COM
mittee that in 1.-TWO mad years.
from 1926 to 1928 American inter-
national bankers went in foolish,
reckless bidding spree for foreign
bonds to the detriment of the Am
erican investors who ultimately
bought the securities.
"Who were those bankers?' de-
manded Senator CoStigan Dem)
Colorado.
81 hope you will not ask me to
say whether the. leading bankers
were represented there Kahn
replied and when pressed pleaded
II am six years older now than I
was then and my memory is not
what it was -
81 know of my own knowledge
that at one time in those mad
wears there were Is American bank
crs at Belgrade, Jugo-Slavia, bid
ding for a bond issue.
"There were times when doz-
en- were in Central American and
Latin American states outbidding
each other in a foolish, reckless
search for business to the detriment
of the public. The price bid was
not determined by the value of the
security but by the eagerness of
the bidders to get business.
WAS your bank represented at
Beigrade?' asked Costigan.
ut was not, - Kahn replied, des-
cribing the activities of the bank
ers at Belgrade as ian undignified
scramble"