The Washington times., 1933-05-31

GSOIBG Whitney anu mOSL O1
J. p. Morgan's associates were on
hand q quarter of an hour before
the starting Of today's banking
hearing before the Senate Investi.
eating Committee, but the great
banker himself did not come into
The committee room until later.
Whitney and the other Morgan
partners and associates appeared
much rested after their four-day
vacation.
Rested Says whitney
Asked what they all did over
the weekend, the tall, slim, Whit
ney grinned and said:
1--WE just rested; what would
yOu have dOne?"
Morgan arrived about 2 minutes
20 10, smiling as he walked into
the room and looking more in
formal than ever. He attended
the first hearing wearing heavy
clothes, including a vest. AS the
hours of sitting in the hot commit
tee room took their toll, he dis
pensed with the vest. Today he
wore no vest and did not have his
coat buttoned.
The ever present movie cameras
were banked in one corner OF the
room. Binding Kleig lights were
flashed on for a moment.
All available seats in the COM
mittee room we're taken half an
hour before starting time.
Howard First Witness
George H. Howard, president Of
the United Corporation, giant util-
ity holding company, was recalled
to the stand as the hearing re-
sumed.
Howard described briefly the
utility connections Of directors Of
United Corporation.
Howard revealed somewhat in
terlocking directorateS between
the Columbia Gas and Electric
Co., Commonwealth and Southern,
Public Service Corporation Of NJ,
Bonbright and Co., United Gas
Improvement Co., and Niagara
Hudson Power Corporation, with
che United Corporation. Each Of
the United directors held director
ships on one or more Of the other
companies.
Howard said he became presi,
dent Of United Corporation in
1929 following q luncheon con.
YerSation with Landkon K. Thorn
and George Whitney of the
Morgan firm. He was allowed to
purchase 10000 shares of com
mon stock and 100000 option
warrants for $50O,0OO when he
gave up his law firm connections
to take over the United Corpora.
ton post.
Got $55O,OOO in Stock
The United stock sold at $27.5C
while Morgan bought the war
rants at 81 each. Howard re
eeived stock worth $550,00O al
$4,000 below its immediate value
Pecora then recalled Howard's
earlier testimony that the Morgan
firm at the outset Of formation
Of United Corporation acquired
100000 shares of the common
stock at 100000 option war
rants, each emitting the holder tc
buy a share of stock at $27.50
for $10.0O0,O00.
The option warrants had NJ
time limits. Pecora queried:
did you think it was COM
mon practice to issue option
warrants without time limits
early i'm 1892
81 rather think, Mr.. PecOra,
that there had been similar in
stances prior t Othat time"
"H0w many instances do You
know OFF"
II can't think of a single in
stance, but 1 think such In
stances had had occurred"
n The fact that the United war
rents were without limit mean
that the holder Of a warrant coulo
buy United common stock al
&27.50 at any time during thu
corporations existence.
Single Contracts Legal
Pecora asserted there was NJ
law justifying such unlimited
warrants. Howard said they werC
sSingle contracts" and therefore
legal.
The United Corporation wa
created under the laws of Della
ware and Pecora asked:
"DOnt you know that the
Delaware statute authorizing is
euance Of warrants without
TINA limit Huas mt nna nfad nm.