The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1945-07-14
BY WEsTBROK PEGLER


ers His articles serve the good purpose
of making people Think
BY wEsTBRoK PEGLER
Copyright, 1945, By King Features Syndicate)
NEW YORK,-Among my occasional reading
these last few years is a book by Judge
Ferdinand Pecora, of the New York County
Supreme Court who served as counsel to the
Senate Banking and Currency investigation of
1884 This concerned quaint practises of
stock exchanges and banks. 1t was souped up
by the early enthusiasts of the new deal press
who delighted in the humblng of ]. P. Morgan
who was tricked into dandlng on his knee a
circus midget whom he mistook for a little
girl.
However, it was an effective expose and
contributed to some honest reforms which the
Roosevelt administration achieved in its early
days.
1t occurs to me that in some way the sit
uation which Judge Pecora investigated was
similar to the operations of Elliott Roosevelt
thus far disclosed in borrowing money on "un-
bankable'' securities with the hearty approval
of his father, and the negotiations by which
Jesse Jones, wrote them off,
Judge Pecora described the great financial
power of j. P. Morgan and Company and its
favoritism toward great financial coterie of
bankers
"Mr Morgan saw no improperly or disad-
vantage in this he wrote 'nor did he re-
spond favorably to the suggestion that ]. P.
Morgan and Company might, by putting all
these powerful and strategically situated men
in their debt, place itself in position to OBJ
tain, in return, special favors from the banks
and corporations they represented"
Later, discussing the spread or commits
sions paid in the issuance of bonds by borrow
ing companies, Judge Pecora explained that
when corporation issues 100000 of
bonds it does not actually receive the full
500, 00O 000
THE long -suffering public pays the entire
accumulated load of commissions, profits,
finders fees Ito persons who have helped
bring in the business in the first place."
IT there is an analogy here it is in reverse
but to me, the moral position of Elliott and
his father and later of Jesse Jones, the chair
man of the Relief Finance Corporation, de-
scrbed by Henry Wallace as ''the most ire
mendous financial power that the world has
ever SEEM" seems no better than that of the
| financiers against W h o m Pecora waged
crusade.
Where Pecora speaks of the Morgan firm
placing other giants in debt and itself in a
position to obtain special favors I try to pic
| ture the mental attitude of a big business
man under government fire or threatened with
government trouble, when son and brother
in-law of the President approach him for a
big loan. believe the business man would
say to himself that this might be way out
of some existing trouble with the administra-
ton or a way to head off future trouble,
especially when the President sings out his
endorsement of the deal and invites the lead
er to come and see him.
| Pecora condemned this equation which he
describes in the banking business The new
deal, then just beginning its rule with high
moral professions was equally scornful We
do not yet know the full story of the financial
operations of number of members of the
Roosevelt family but one easily recalls how
! joyously the new deal group celebrated the
personal embarrassment Of many individuals
when the president by executive ORDER pro-
duced for public inspection their personal tax
returns
Pecora disapproved the payment of ''find-
ers"' fees to men who dug up money for
borrowers but Hall Roosevelt and William
Sirovich, new deal congressman, in floating
$500, 900 loan for Elliott which Jones settled
for $4,000 were finders for Elliott. And one
man has presented document purporting to
be contract with Elliott which, if authentic
clearly defines him as finer
There may be a key to the situation in an
| incident in May, 1943, when President Roose.
welt denounced an American group for lend
ing several million dollars to Bolivia at per
cent interest, minus a finders fee of per
cent. Bolivia, like his son Elliott, default
ed the loan and Mr.. Roosevelt revealed his
own point of view when he apologized to the
President of Bolivia. In other words he had
congratulated a defaulter but on the ground
that the American financiers had used high
pressure to sell Bolivia loan which the coun-
try did not need. In Ellott's case, the high
pressure came from the borrower, not the
lender although, to return to the Pecora
theme, the lender may have felt he was plac-
ing powerful and strategically situated men
in their debt and Mr.. Roosevelt may have
wanted him to think So
El.A.:el