Evening star., 1933-06-27
KUHN, LOEB CLIENTS
NAMED AT INQUIRY
81 Corporations, With De-
posits of More Than $50, 900
Each, Listed at Probe.
Continued From First Page.)

CONTINUED From First Page)
| the committee will investigate, Pecora
said, were railroad and industrial securi-
ties, including those Of the Pennroad
| Corporation, railroad holding company.
| Pecora hopes to conclude the present
| phase of the Kuhn. Loeb g. Co. inquiry
| by the end of this week.
The committee then viii decide
whether to proceed Immediately with
| Dillon, Read 8, Co. or let that go until
| later
In the Fall the committee expects to
| wind up its investigation with inquiries
into holding companies, investment
trusts and stock exchange practices and
to scrutinize operations of the Chase
National Bank.
Kahn, small and we'll dressed. walked
into the committee room, accompa MED
by associates, 20 minutes ahead of time
He was accompanied by Sir William
WiSeman, Benjamin J. Buttenwieser,
Percy Stewart, syndicate manager, and
Carl De Gersdorff, counsel.
Kahn told newspaper men he would
not have a prepared statement as did
]. P. Morgan.
II am here to answer questions with
complete frankness and to the best OF
my ability" he said with smile.
Beyond that there is not thing
can tell YOU
Pecora arrived moment later and
posed with Kahn for photographers.
The big marble lined room already
was ucomfortably hot and many coats
were peeled of promptly.
Because OF the poor acoustics OF the
room, a loud speaker system was set
up.
Senator Glass, Democrat of Virginia
was was a frequent critic at the Nor
gan hearings, and Senator Steiwer, Re-
publican Of Oregon, were absent as the
hearing opened.
In contrast to the huge crowd that
stormed the doors Of the Morgan in
quiry, only handful OF spectators
showed up ahead of time today.
The same special police were on
guard, but they had little to do.
The small preliminary audience was
which was used to accommodate the
Morgan crowds.
Half an hour before the hearing open
ed committee aids brought in a big
black trunk full Of evidence gathered
during months Of inquiry.
Handle No Deposits.
Pecora, with a long list OF written
questions. first directed his eXamina-
tion to establish the personnel and prac
tices Of the banking house.
Kahn said the firm had been in
existence IS years and he had been a
partner since 1897.
There are 10 other partners.
Its business, he said, Is the buying
and selling Of securities.
, But we are not engaged In the busi-
ness Of accepting deposits from the
| general public" he added.
| Asked If the firm maintained ofdces
| in the last six years elsewhere than in
New York, Kahn said Gordon Leeds
was partner in London for two years,
| but maintained no Office there.
The witness said his firm had g few
+ private customers, Chiefly inherited
| European clients" of a rather minor
nature. but that its chief business was
with corporations.
/ What kind?" Pecora asked
Railroads and prominent industrial
corporations, Kahn replied.
| we have no public utility affllia-
| tions and never have had unless you
! consider Western Union public util-
| ity or the A. IT. & T. in the financing
of which we have had an interest for
q number Of years"
! Depends on Reputation.
Questioned by Pecora. Kahn said the
majority OF corporations with which his
firm did business were railroads.
Senator SteiWer came in a few min
utes after the session opened.
Kahn said his firm obtained clients
| precisely by the same method as the
lawyer goes to a client" but when Pc
cora said q lawyer is not supposed TO
go TO client. he added:
I'm coming TO that. He gets his
clients by sound advice; SO does a law
yer, SO does an architect; not by chas-
ing after them, but by establishing a
reputation"
After contact is made with a railroad
client seeking financing aid, Kahn said
we give advice as TO the best kind o1
security and our opinion as to fail
price TO the railroad and the public. Il
there is not a fair price, We are liable
to lose the good will Of either or both
We have no show window. Our only
| attractiveneSs is our good name anc
our reputation for sound advice ant
integrity"
Kahn volunteered there had beer
ups and downs in banking prestige,
but expressed hope he would not bt
. asked TO mention any names"
40 yOu ever qliIl the patient COldf
{ Bark!ey CDemocraD Of Kentucky askeC
after Kahn had likened the relation.
ship between railroad clients and banker
. TO doctor and patient.
Kahn said II the patient didn't hv,
; up TO the advice given 1t was the bank
: ers' duty to quit the patient"
: We are not tied to them nor the,
to us by any legal process"
Corporations Revealed,
! Soon thereafter the names OF the 8
} corporations engaged in interstate com
merce with deposits of more thai
$50 600 with Kuhn, Loeb e. Co. durin,
= the fve-year period 1927 to 1881, in
i elusive. were placed in the record
f They are:
Balaban & Katz Corporation, Balti