Evening star., 1936-02-04

made. There is no evidence of the
sort now
Morgan Is Present.
Resuming its abruptly interrupted
inquiry into war financing, the COM
mittee today sought to show that some
proceeds of the Liberty Loans were
used to bail out" the house of Morgan
and other f1oaters OF private loans to
the Allies.
With j. P Morgan sitting by in
the role of an uninterrogated witness,
Morgan partners differed vigorously
with this view and declared that out
of the billions loaned the Allies by
the United States, only S640, 900 900
was used to pay off re-existing debts
OF the Allies.
This went not to j. P. Morgan &,
Co, they contended, but to private
investors.
Morgan had not been summoned to
appear, but he decided to sit in while
Chairman Nye and his chief investi-
gator, Stephen Raushenbush, ques-
toned Thomas w. Lamont and Rus
sell C. Leffingwell, Morgan partners,
and Albert Rathbone, wartime Treas
uy expert on foreign loans.
Senator George, Democrat, of Geor-
gia. who joined with Senator Pope.
Democrat, of Idaho in temporarily
withdrawing from the inquiry several
weeks ago in protest to Nye's char
acterization of Woodrow Wilson as
a "falsifier," was on hand when the
hearing was resumed today.
MoAdoo Is Quoted.
The Eye accusation caused rever-
berations On the floor of the Senate
that for a time threatened to cut off
further funos for the inquiry. An ap-
preparation enabling the committee to
continue for 10 days was Forthcoming.
A memol andum was introduced from
the Morgan files quoting Lamont as
saying that Treasury Secretary Nc
Adoo told him in a conference that he
tMcAdool may have made a mistake"
in promising Congress he would not
use Liberty Loan proceeds to take up
existing Obligations of the allies.
The memorandum indicated that
Lamont was seeking cooperation"
of the Treasury in meeting a financial
stringency il the private war loan
market resulting from the Liberty
Loans.
Morgan appeared early with his as
eociates, including Lamont and George
Whitney
Nye summoned Lefingwen and
Rathbone to the witness table and
swore them in.
Rauhenbush started the questioning
OF Leffingwell and Rathbone.
Lefhngwell, in response to a query,
said ne entered the Treasury in May,
1917, as special counsel on Liberty
Loans and was appointed Assistant
Secretary of the Treasury in Octo-
Der of that year. After leaving the
Treasury, he said, he became a part
ner of j. P. Morgan e. Co.
Rathbone said he was appointed to
the War Loans staff of the Treasury
In 1918 and was made Assistant
Treasurer in charge of foreign loans
in September of that year He went
to Paris and London as financial ad-
wiser on peace treaties and was en-
gagged in reparations negotiations
when he resigned in 1920, he told the
committee.
Foreign Loans Reviewed.
At the outset of the examination
the committee placed in the record a
statement showing that foreign loans
outstanding in the United States at
the time We entered the World War
totaled $3.50, 1927 ,544. This sum in
cluded British loans totaling s1,476.-
51l,566 and French loans totaling
s675,315.988. The Anglo-French loans
were arranged by j. P. Morgan & Co.
Taking up events leading to floating
Of the first Liberty loan. the commit