The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-07
J. P. MORGAN IS
PUT ON SPOT BY
SENATE PR0BERS
Flnancier Denies Loans to
Allies Dragged u. S.
Into Conflict.
BLAMES GERMAN ACTS
Nye Committee Accuses
Banker of Making
Stump Speech
By United Press

The Senate Munitions Com
mittee today unfolded an out
line of the history of wartime
finances as drawn from the
testimony Of J. Pierpont Nor
gan, who sought to give
every lawful aid to the allies, and
from secret memoranda of the Will
son Administration which sought to
remove obstacles impeding credits
to belligerents.
"The bankers had nothing to do
with settling the laws of neutrality, y
the head of the House of Morgan
told the committee as he edged for
ward in a big red-leather chair to
give his version of how America got
into the world conflict and how to
keep out of the next one.
When the government changed
its policy, we turned our toes around,
too"
The 68-year- old Morgan, crush
ing a prepared statement of policy
in his hands, insisted that it was
German insults and injuries" rather
than loans to the allied nations that
drew the United States into the
World War.
He and his partners sharply con-
tradicted Senators who accused him
of trying to make stump
speech" in relating his pride in aid
ing the allied cause.
Mr.. Morgan was read a quotation
from William Jennings Bryan that
money is the worst of all contra
band because it can buy all other
contraband,' and asked if he
agreed.
No, I don't think So" he replied.
Mr. Bryan exaggerated the impor-
lance of money"
Reads Long Statement
Mr. Morgan and his partner
Thomas w. Lamont, insisted that
the financial house was most scrup-
ulous in its dealings with all gov
ernments during the war. The Co.
year-old financier read long state
ment outlining his company'S posi-
ton and pride in aiding the Allies,
but the committee accused him of
making stump speech and fire.
quently interrupted his reading.
When he had finished, the ques-
tioning by Chairman Gerald P. Nye
and other members swung quickly
to the intricate maze of high
finance at the outbreak of the war
Senator Nye developed that, three
days after the war started, Roths-
child's queried Morgan 81 Co., ask
ing if they could raise $100,000,000
for France.
Sent Cable in Cipher
On Aug. I, Morgan's replied to
their Paris branch. Morgan Harjes
Co, that they couldn't handle the
loan Immediately, due to the ex-
change situation, but that later it
probably would be possible and an
excellent plan"
The Paris house replied, sending
cable in cipher through the cour-
tesy of the French finance minister.
Cipher use had been suspended for
private individuals due to the war.
Mr.. Nye said Lets get this clear.
Three days after Frances enrty into
the war, the question of loans TO
belligerents arose. And on Aug. 4
it seemed to Morgan 81 Co. that the
idea was possible and excellent"
Anxious to Help France
Morgan Harjes warned the New
York house that if it didn't act
quickly Kuhn, Loeb or some other
house may provide credit to the
other nation"
What other nation is that?"
Morgan: Probably Germany.
Lamont: Of course. Senator, you
realize that Morgan Harjes was in
terested in doing everything posi-
BILE for France.
Have No Recollection
Nye-Yes, and Morgan & Co. was
largely interested in the Paris house.
Morgan-Our New York firm was
a partner in the Paris house but
each had its own territory
Mr.. Nye asked about the period
of uncertainty over the wisdom of
making loans to belligerents.
Which member of your firm con-
tacted the State Department in re-
gard to that situation?" he asked.
Morgan smiled, scratched his
head.
Really" he replied. I'VE have no
recollection on that and we have no
way of getting recollection up"
Reads Bryan Telegram
Nye read telegram from Bryan
to the Morgan Co. on Aug. l, 1914,
declaring that loans to belligerents
were inconsistent with the trus
spirit of neutrality"
That was the first word we re-
ceived OF the governments attitude"
Mr.. Lamont said, adding that Nor
gan, Harjes g. Co. in Paris was in
formed Immediately that there could
be no loan to the French govern
ment.
The statement declared President
Wilson made clear" in his protests
TO Germany that submarine war
fare was the basic cause that drove
this country toward the brink OF
the conflict