Evening star., 1933-10-26
Pecora Asks Vice President
of Bank if Situation
Was Known.
SHEPARD MORGAN SAYS )
THAT HE HAS NO IDEA
Albert H. Wiggin to Be Called
Later to Tell of
Profits.
BY the Associated Press.

BY the Associated Press
Senate investigators today character.
lied as graft conditions a report
from the files OF the Chase National
Bank that $4,000 600 had been spent
Unnecessarily on the Cuban Capitol
Building, construction Of which was
partly financed by loans from the bank.
After reading the report from Chase
files telling of the expenditures, Ferdi-
hand Pecora, counsel for the Stock
Market Committee, asked Shepard
Morgan, Chase vice president, II these
graft conditions" had been known five
months previously when the bank sold
100000 in Cuban bonds to the
public.
Il have no idea" Morgan replied.
But only IS per cent of the public
works expenditures were financed from
the obligations advanced by U.s."
Reference in Letter.
The reference to money wastage vas
in a letter from James Bruce, Chase
official in Havana, to the central bank
July II, 1890.
1t referred to Carlos Miguel dc
Cespedes, secretary of Public Works, as
dangerous to the welfare of the coun-
try"
Albert H. Wiggin, retired chairman
OF the bank, was to be called back to
the stand later to disclose his profits
from sales of Chase stock to pools par
ticipated in by the Chase Securities
Ia n of
shares to single one of nine such pool
operations participated in by the banks
affiliate.
When he last testified, wiggin was
drawing $4,000 year for life under q
contract with the bank as retired chair
man.
Pecora. who disclosed this contract.
yesterday quietly handed newspaper
men copies of a letter from Wiggin to
the bank requesting that the contract
be terminated in view of the criticism
its publication had aroused
Two hours later the board Of direc-
tors in New York accepted his offer.
Money Owed Ignored.
Evidence that the Chase National
Bank, in offering Cuban bonds TO the
public in 1920, ignored SAC. .0OO, 900 owed
by the Republic to the bank and its
associates in listing Cuba's total debt.
was presented as the hearing opened
today
Pecora pointed out in the prospectus
offering s40,000,000 in bonds to the
public statement that Crfba's total
funded debt was s87 1000, 900 outside Of
S20,0OO,0O0 of serial certificates held
by the public
Morgan said the figures were OBJ
70 irad frNr, kn r,,l
treasury and checked by the bank
Pecora asked If the figures included
100000 of Cuban obligations held
by the Chase Bank and associates.
Morgan took the view that these
were existing" but not outstanding"
because they were held by the Cuban
governments bankers.
The banker agreed. however. that the
banks holdings constituted obligations
OF the government.
Inere was no use in referring TO
them in the prospectus, because the
whole purpose of the bend issue was to
refund them Morgan added
A M Williams. Chase counsel. in
terrupted to disagree with Morgan's
contention the obligations we're not
outstanding.
Williams asserted. however, the in
vestor was not miSled, because the
bonds actually retired the obligations to
the banks.
Il don't think the investor could
have been misled by that" Williams
said
Pecora said the circular contained q
seriously misleading" statement.
Yesterday he developed that the
same prospectus failed to mention a
$1,000. 600 deficit in Cuban finances the
previous year. but Chase officials con-
tended it was not known at the time.
This circular was issued to give the
public accurate and comprehensive in
formation on conditions in Cuba?"
Pecora asked.
Yes" Morgan replied
Agreed Debt Was Same.
The banker finally agreed Cuba's debt
was the same before the issuance of the
bonds as afterward He had pre-
viously testified this was STAT 900 600, or
10000. 900 more than indicated In the
prospectus.
Charles F. Batchelder, another vice
president, who Morgan said was in
charge of preparing the prospectus,
took the same view as had his pre-
decessor, that the obligations held by
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SIX KILLED IN FIGHTING