Evening Star Newspaper, May 26, 1933, Page 1

WEATHER. (U. 8. Weather Bureau Forecast.) A . Closing N. Y. Markets, Pages 14 and 15 No. 32,532. post office, Entered as second class matte: Washington, D. C. The WASHINGTON, D. C., FRIDAY, MAY 26, 1933—FORTY-EIGHT PAGES. ROOSEVELT ASKS LAW TO GO OFF T_ | STATUTE REMOVING U.5.FROM METALLIC STANDARD SOUGHT BY ADMINISTRATION President Asks House Bank- ing Committee Chairman to Offer Resolution to Define Present Status of Country. MEASURE TAKES METAL BACKING FROM BONDS \ Bteagall Terms Proposal One of Greatest Steps Toward Stabili- zation of Money So Far Taken. Early Hearings on Bill Will| Be Held. By the Associated Press. President Roosevelt has decided that the United States should go | off the gold standard by statute. He requested Chairman Steagall of the House Banking Committee today to introduce a resolution to place the United States off the standard by law. The Alabama Democrat had conferred with the President at the White House. Later Steagall called newspa- permen to his office and read a copy of the resolution which he said “declares the United States is off the gold standard by statute. “It repeals the ‘gold standard act.’” Steagall said. Adding that under the resoluticn no bonds, no obligations of the Federal Government and no obligations of any form would have to be paid in gold or | g:ld currency upon the enactment .of | the measure. P i He said it would be possible for the foreign debtors to pay the United States | their war debts in any legal money. “This bill frees the United States L3 Here’s What Gold Standard Repeal Will Mean to U.S. By the Associated Press. money regardless of whether the original contract stipulated gold. The war debts owed by foreign countries can be paid in any legal money, gold mot being necessary. It will be unlawful to stipu- late gold, in contracts made | Government bonds need not hereafter, as the medium of pay- ment be redeemed in gold, but can be paid in any legal money. Private debts, such as mort- gages, can be paid in any legal All coins and currency legally | issued will become legal tender for payment of public or private debts. COMBAT DISABLED FACE 30 PER CENT COMPENSATION cut | Revelation Brings Criticism of Administration by Caucus of House Democrats. | Although assurance was given that veteran economies proposed by the ad- ministration would not affect the com- bat disabled World War veterans whose disabilitles were incurred on the bat- | tiefields of France, these veterans stand | today slated for approximately 50 per jcent cut in the compensations granted them by the Government. Shortly after this statement -was culled from the records of the Veterans’ Administration yesterday, House Demo- crats convened in a secret caucus on Capitol Hill and assailed the adminis- tration of the national economy act as 1t affects veterans. They authorized the Steering Com- mittee to name a group to wait on Pres- ident Roosevelt to demand a relaxing of the regulations. Speaker Rainey and Representative Woodrum of Virginia asked the members to support the Pres- ident in the administration of the econ- omy act, but many of them sald “they didn’t get’ much response.” However, responding to an appeal by Rainey that no resolutions be izing the tion lhnmeehcuclumdhmdluplofm.ow gold standard,” he declared. | “It is an administraticn bill and a part of President Roosevelt’s emergency | relief program.” Held Greatest Step. | In addition Steagall said the law | would make it unnecessary for Presi- dent Roosevelt to devaluate the gold dollar under the inflation provisions of the farm relief act. Steagall termed the measure one Of the greatest steps toward stabilizing money in the United States. Al legal money under this act, he asserted, wuc)luld meet all obligations pay- le in gold. ‘bchntrgnn Fletcher of the Senate Banking Committee will introduce an identical resolution in the Senate. Decision Is Sudden. The decision by the President to seek the gold legislation came suddenly. The first inkling was this morning when he talked with Steagall. They conferred but_briefly. ! Later the President consulted with his economic delegation and then with Secretary Woodin, who announced he soon would explain the action. It was regarded in Washington as another move to give the President an absolutely free hand in his economic negotiations with the other world | powers. Of course, already the United States| is off the gold standard, but by repeal of the gold act Mr. Roosevelt will be free to negotiate any standard he sees fit In the joint communiques issued after his conferences with representatives of the forelgn nations the President joined with the foreign spokesmen in urging an | early return to the gold standard. Secretary Woodin did say the pur- pose of the move was not simply cne test to the Chief Executive. Administration Assailed. Instead, Representative Crosser of Ohio, chairman of the Steering Com- mittee, was authorized to select a committee to see Mr. Roosevelt some- time during today. Describi the caucus, Representative Shannon of Missouri, said: “There were a number of speakers and they all assailed the administration of the economy act and the treatment the veterans are-receiving. The senti- ment of the members was that they had been bunked into voting for this economy act and that they all regret it.” Budget Direetor Lewis Douglas in drafting the independent offices ap- propriation bill, cut, in conformity with the administration’s desire, the pension allowance for World War veterans from $372,800,000 in the 1934 bill, which was pocket-vetoed by - President Hoover, to $103,786,000 in the new measure. Gen. Frank T. Hines, veterans’ ad- ministrator, upon demand, it was learned authoritatively, has supplied the Senate Appropriations Committee with the following breakdown of pen- sions for all wars: | ‘World War, $103,786,000. Spanish-American War, $41,659,644. Civil War, $74,141,390. Other wars, $4,070,966. Peace time, $8,072,000. In a letter to the Senate Committee, | Gen. Hines further classified the item | of $103,786,000 for the World War as | follows: Disability compensation (war con- mected injuries, which the 1934 bill ve- | toed by President Hoover allowed $221,- | | 739,879). $64,902,000. Disability allowance (non-service con- nected injuries which the Hoover vetoed bill allowed $101,642,010), $9,884,000. Emergency officers’ retirement y (which the 1934 vetoed bill allowed to permit a lowering of the gold content of the dollar. Congress recently gave the President power to do that. Even before Steagall made his brief | but significant announcement to re- porters it had been reported he would | soon introduce a very important measure drafted with utmost secrecy. Declines to Discuss Bill. Steagall said the measure had been wvirtually completed late last night, but | that its final text was not approved until today. Questioned as to the reason why the President desired this legislation, Steagall waved his hand and replied, | “You'll have to ask the President.” He declined to discuss any of the | details of the formulation of the pro- | 1 Subsequently, Steagall sajd he did not think it was necessary to hold hearings before his committee, but that it would consider the resolution and geport it for action next week. Representative Goldsborough, Demo- crat, of Maryland, with Steagall during his conference with newspaper men, said this legislaticn was the final step needed to improve domestic conditions and fo start the flow of credit from anks. “This bill eliminates all of the buga- boo nbout the gold standard,” he averred. Resolution Quoted. 1l immediately introduced the bill in the House and made the 1ounw-‘ ing statement: | 81 | 0.029,826), $3,300,000. World War death compensations (which the 1934 vetoed bill allowed | $39,389,000), $25,700,000. | Figures Are Guarded. Gen. Hines' letter has been guarded with extreme precaution to prevent | these figures becoming public ~before | action is taken on the independent of- | fices bill, probably next week. The ad- ministrator’s letter explained the rea- |son_as follows: “We have been extremely loath to | give out information concerning the breakdown of these items, as it is felt that only through the review now being made may we arrive at a reasonably accurate distribution of pension ex- pense, especially in view of the fact that but one appropriation covers pen- sions of all types and there probably (Continued on Page 2, Column 3.) fme—l Lightning Also Kills Daughter. GAFFNEY, S. C., May 26 (#).—FPour years after her father had been killed | by lightning, Idelle Porter. 10, met death in the same fashion while play- |ing in the yard of her home near to create a committee of seven to pro-| taxation spu < HOUSE PLANS BAN ON TAX DEDUCTIONS BEYOND ONE YEAR Committee 0. K.’s Amend- ment to Income Levy After Morgan Disclosures. |VOTE ON INDUSTRIAL BILL EXPECTED DURING TODAY Bacharach Hopes to Send Measure Back for Inclusion of Sales Revenue. Sales tax advocates today sud- denly shifted their tactics in the House and designated a Democrat— Representative McCormack of Mas- sachusetts—to make a motion to re- commit the industrial recovery bill for insertion of a 2%; per cent gen- eral manufacturers’ levy, exempting food, clothing and medicine. By the Associated Press. An amendment to the administra- tion’s public works-industrial control measure to limit deductions from capi- tal losses to one year in making out income tax returns was approved today by the House Ways and Means Com- mittee. The proposal, an outgrowth of testi- mony before the Senate Banking Com- mittee that J. P. Morgan had paid no income tax in this country in the last two years, was approved as the House neared a vote on the huge measure. A final roll call was expected before ad- Jjournment. Meanwhile, the committee disclosed it was studying the testimony of Mor- gan and his associates in the investi- gation being conducted by the Senate Banking Committee. Can’t Carry Over Loss. As explained by experts of the com- mittee, the amendment will prevent the carryover of net losses from one year to another in arriving at a base for the payment of taxes. Representative Bacharach, Republi- | can, of New Jersey, meanwhile, an- nounced that his motion to send the bill back to the Ways and Means Com- mittee for the substitution of a sales tax instead of the committee’s program for boosting income and gasoline taxes, ‘would e for a 2% per cent levy Ehpline food. clothing and mediciies 3 and medicines. Indications Fir sales tax issue would be close. Fury at esca) mor rich :lnen from e hast) ging of the income tax law hole :h cl‘luhu left the burden on those of small means. The revelations of the Morgan juir; Drought & stream of protests Trom back home upon 'S8, The pressu; its highest tensity in the House due to the fact the public works-industrial control bill carries a new, highly-onerous schedule of high income taxes. Stiffest Opposition. The tax protest was mingled with a block of opposition to suspending anti- trust laws—necessary to the industrial program for combinations to boost prices, cut production and raise wages— pro the measure the stiffest op- position yet faced by a Roosevelt bill. The party leaders had to work their hardest, but were confident of victory after hastily deciding to amend the biil to prevent holders of securities from carrying over part of a year’s losses to cancel the income tax they would other- wise pay the next year. That has been the system so far. Until last year, in fact, they could carry over such losses for two years. The reaction already had hastened Senate passage of the Glass bank re- form bill, a measure which will strip Congress, re reached J._P. Morgan & Co. of much of its| (Continued on Page 5, Column 1. e HARRIMAN’S STOCK SALE CALLED FRAUD Supreme Court Justice Finds Fic- titious Market for Securities Maintained. NEW YORK, May 26 (#).—Supreme Court Justice Bernard L, Shientag ruled today that Joseph W. Harriman | and the Harriman National Bank per- petrated a fraud upon depositors when it sold them stock at $1,500 a share. In accordance with the ruling he awarded full judgment in the suit—the first of a number of the same kind— of Mrs. Margaret Singleton. Mrs. Sin gleton sued for the difference between the amount she paid for two shares of the bank stock and what she alleged to be its true value, $200 a share. The bank has been closed since the President’s March holiday and Harri- man, its chairman, is under indictment for alleged false entries in the books of the_institution. The court found that the bank had maintained a fictitious market for its stock to peg the price at $1,500 while selling it as an “investment” to de- positors. Harriman, who recently attempted suicide after wandering away from a nursing home, was not in court and was not represented on the first day of the trial. An attorney appearing for him on the last two days explained that .his absence was due to a misunder- i Gaflney yesterday. “I give it as my humble judgment | that this bill marks a final, definite and | determinate step that will bring a re-| vival of business and a restoration of | prosperity and happiness to the Ameri- | can people.” The resolution is entitled, “To assure uniform value to the coins and curren- cles of the United States,” and reads as | Zollows: “Whereas, The holding of or dealing in gold affects the public interest, and are therefore subject to proper tion and restriction; and “Whereas, the existing em ney has losed that provisions offl;‘:w of entertaining personal Sunday’s Star. standing. Do Your Guests Feel at Home? Mrs. Franklin D. Roosevelt will tell her theory and official guests in a special article in the Society Section of next This is one of a series of articles written es- pecially for The Sunday Star and the North American Newspaper Alliance. & | were that the vote on the | o - i ‘WITH SUNDAY MORNING BDITION pening Sar. * “From Press to Home Within an Hour” ‘The Star’s Carrier system coversevery block and edition Yesterday’s Circulation, 120,792 . TWO CENTS. GOLD ok | B8 1o g D T BRITONLAUDSU.3. EFFORT AT PEAGE Sir John Simon Declares Co- operation to Avert War Is an Important Step. By the Associated Press. LONDON, May 26.—The new Amer- | ican policy of co-operation with other | nations to avert any threat of war was hailed as an important step today by Sir John Simon, the Foreign Secretary, and Sir Austen Chamberiain, ane of his | predecessors in that post. Sir John, speaking in the House of Commons, asserted the new American | doctrine, as explained by Norman H. Davis, American Ambassador at large, | at the Geneva Disarmament Confer- | ence amounted to abandonment of the | idea “‘of standing with folded arms as a mere spectator from afar of s les between two other states, one of which was in the wrong.” Sir Austen Chamberlain said no more important declaration had been made by any government than the Davis declaration. ‘The Forelgn Secretary informed the House that Britain intends to assume no new continental obligations. Speak- ing of the commitments of Britain under the League of Nations Covenant and the Locarno Pacts, he declared: “These obligations we shall strive to perform, but our friénds on the con- tinent well understand, and it cannot be too clearly understood, that it is no part of the policy of Britain to as- sume fresh and additional obligations.” Enumerates 5-Point Policy. He enunciated a five-point British disarmament policy: 1. Cordial response to President Roosevelt's peace message. | 2. Because of immense arms reduc- | tions already made, Britain cannot go | further without a general agreement. 3. Britain recognizes the validity of | the concern which lies behind demands of certain states for security. 4. Britain is ready, with the United States, to join in world consultation to promote security. | 5. Britain considers restoration of | confidence and elimination of rivalry and suspicion to be & necessary condi- tion for effective disarmament. ‘What the American Government and the President were doing now, declared the foreign secretary, was to make an effort to co-operate .“in a piece of world work, and to abandon a tradition which the Afherican people have most jeal- ously guarded, while, of course, cir- cumscribing most strictly and clearly ime limits within which they undertook 80" | Disjurbing Signals at Geneva. This seemed to him, he declared, to make a fundamental change in prospect | | in American influence being effectively | exerted “if unhappily hereafter we are faced with a conflict where one side is | Judged by the American people, in com- | mon with ourselves, to be a party which should be discouraged, and as far as | possible put under pressure which neu- | trals might exert.” Sir John said it could be claimed that real progress was being made at Geneva, but at the same time that there (Continued on Page 6, Column 1.) (CHARLES D. BOYER | GETS THREE YEARS e TR | ‘Fomer Federal-American Cashier | Sentenced by Justice 0'Donoghue. Charles D. Boyer, former cashier of the Federal-American National Bank & Trust Co., was sentenced to serve from three to three and a half years impris- onment today for the embezziement of approximately $25,000 from the banking | institution. Sentence was in | District Supreme Court by Justice |Daniel W. O'Donoghue. Previously | Boyer had pleaded guilty to six counts | of an indictment charging him with embezzling the money. i It was contended by the Government | indictment, however, charged him the embezzlement of only $25,000. His s Ve Yo T, it court for 3 the defendant had pleaded guilty.to the Pastor Threatens Death Fast Unless Home Is Returned By the Associated Press. MEMPHIS, Tenn., May 26.—A fast to death was threatened to- day by the Rev. J. A. Vallery, r-y-h.lred social worker, un- less control of a training home he founded in 1916 be returned to him. Vallery said he would begin his fast at 5:30 p.m. tomorrow and eat only an orange a day after that until “death or vic- tory.” The orange is to be eaten, he explained, to enable him to continue his work as long as possible. MEARSAND“FOF GET 2 YEARS EACH New Trials Are Denied in| Lindbergh Ransom Hoax Cases. Gaston B. Means and Norman T. Whitaker, “the Fox,” convicted of con- spiring to steal $35,000 from Mrs. Eva- lyn Walsh McLean in the Lindbergh kidnaping case, were sentenced to serve two years each in the penitentiary in District Supreme Cdurt today. Justice Daniel W. O'Donoghue im- posed sentences after he had denied motions for new trials on behalf of both defendants. Means is already serving a 15-year sentence imposed following his convic- tion on a charge of stealing $104,000 from Mrs. McLean in connection with the same case. His attorney, J. William Tomlinson, asked that the fwo sen- tences be allowed to run concurrently. In imposing sentence today, Justice O'Donoghue did not specify whether the prison terms in the case of Means are to run concurrently or consecutively. It was said, however, that when not specified the sentences run concur- | rently. Accused of Conspiracy. Means and Whitaker were accused of conspiring to obtain the $35,000 from Mrs. McLean, estranged wife of the former publisher of the Washington ! Post, by falsely leading her to believe | they were in a position to ransom the kidnaped son of Col. and Mrs. Charles A. Lindbergh. Means had already been convicted of stealing $104,000 from Mrs. McLean by telling her he was going to use the money to pay a ra..som for the child and incidental expenses. Joseph C. Turco, counsel for Whitaker argued in support of his motion for a new trial that the court had erred in charging the jury that both Means and Whitaker must be either convicted or acquitted. He contended that under| . the evidence, if it had not been for this charge, the jury might have ac- quitted one and convicted the other by finding that Means had conspired with other persons than Whitaker. ‘Whitaker Asks Week’s Delay. In replying to this argument United States Attorney Leo A. Rover contended the evidence which might show there were other conspirators in the case was of such a flimsy nature that the court acted properly in instructing the jury that if they found any conspiracy exist- ed, it must have been between Means and Whitaker. Counsel for Means submitted no argu- ment in support of the motion for a new trial which had been filed in his behalf. Means had nothing to say when sentence was imposed. Whitaker, however, speaking in his own behalf for the first time during the case, asked that the court wait one week before im- gon.ng sentence on him. He said he ad a number of personal matters he wished to dispose of before being sen- tenced. Whitaker also told Justice O'Donoghue that he felt the charge the jury was unfair and that diced his chances of being acquitted. FRANCE MLST PAY SI9MOMIDLEL.S | iHerriot Tells Deputies Roose- ‘ i velt Condition for Debt Settlement. | | By the Associated Press. | PARIS, May 26.—President Roosevelt | made payment of the $19,000,000 war debt interest due last December an es- sential condition of future settlement of | the debts, Edouard Herriot, France's | special envoy for the Roosevelt economic MORGAN PROBE HALTS AS GLASS AND PECORA CLASH OVER INQUIRY Recess Comes After Counsel Develops Banking House’s Control of Utilities. 'HOLDING COMPANY GOT SHARES AT $12,000,000 BELOW MARKET Financier Also Took Options on Shares That Could Have Turned $29,000,000 Profit in 30 Days. By the Associated Press. The Senate investigation of J. P. Morgan & Co. was recessed it,odnly until next. Wednesday after a bitter row over the course of the nquiry. The suppressed tension over the Banking Committee’s inquiry had burst forth in dlsfu'.e in the wake of disclosure that the wealthy banking house controlled the United Corporation—autilities stock hold- ing organization—which in turn is iated with companies doing 22 per cent of the electric and qas output business of the Nation. Senator Carter Glass of Virginia fumed over the tactics of Fer- dinand Pecora, the vigorous New York attorney who, as counsel for the inquiry, has had J. P. Morgan and one of his partners, George Whitney, under stringent examination in the past three days. ‘Today Pecora had drawn further evidence of Morgan activities from George Howard, as oresident of the United Corporation. The tart Virginian demanded, to the excitement of the crowded audience, to know the exact course of the inquiry. He raised ques- tions about Pecora’s retention as counsel, while silence fell on the huge hearing hall. Glass said the minutes of the committee showed no record of Pecora’s retention as counsel. . Pecora returned in kind, drawing applause with the veiled hint that his resignation could be had if the committee asked. Through Howard, he had developed that the United Corporation received from Morgan stocks in various utilities concerns in the 1929 boom dngs at $12,000,000 less than their market value; and that the opulent banking house had in consideration obtained a dominance over affairs of the United Corporation. L I Y Fletcher Defends Pecors. Morgan Utilities Serve 55,000,000 |% People of Nation 000,000 BY G. GOULD LINCOLN. The House of Morgan was today put conversations in Washington, told the Chamber of Deputies in the course of a 00 the spot as & controlling factor in hot debate today. | the public utilities of the Nation at the “ ’ & Co. If Frante agrees to pay the Decem- | investigation of J. P. Morgan ber 15 installment,” M. Herriot said, | bY the Senate Banking Committee. “Mr. Roosevelt told me that negotiations | SWinging into & new line of the inves- | could be undertaken immediately.” tigation conducted into the operations Deputy Fernard Laureta, interpellat- | Of the great banking house, Ferdinand to | tics, it preju- | 1922 at Old ing the Government on its policy for | Pecora, counsel for the comumittee. the World Economic Conference, ex- | pressed astonishment that the debt question was not on the conference agenda, adding that American opinion | |is against a moratorium. “In a proportion of 99 per cent,” in- | terjected Deputy Henry Franklin-Bouil- | |lon. “It must be remembered that Mr. | | Roosevelt is absolutely powerless to of- | |fer us a solution. He is the prisoner | of Congress.” M. Herriot objected to deprecating in jadvance the efforts of the American | President. 'SIX PLEAD GUILTY TO ATTACKING JUDGE| Iowa Farmers Who Figured in Anti-Foreclosure Incident to ! Hear Fate Tomorrow. By the Associated Press. LE MARS, Iowa, May 26.—Six Ply- | mouth County farmers charged with | dragging Judge C. C. Bradley, 53, from his court bench April 27, carrying him into the country and choking him into | unconsciousness with a rope because he | refused to promise not to sign farm | foreclosure proceedings, pleaded guilty | in District Court today. The six who entered pleas were John | Sokolovske, 19; Lawrence Krause, 29; Theodore Hardman, 35; Walter Ideker, 33; Albert Kaiser, 45, and Martin Rose- bu‘gl. 45. | ey entered written pleas of guilty | to charges of assault with intent to | do great bodily harm. Sokolovske and | Krause also pleading guilty to charges of unlawful assembly. Roseburg, alleged | by military officials to have been the | man who dragged Judge Bradley from | his bench, pleaded guilty to the assault | harge and to a charge of interfering with the administration of justice. Judge Earl Peters, before whom the pleas were made, said he would pro- called to the stand George H. Howard, president of United Corporation and New York United Corporation. United Corporation was shown to be a gigantic holding corporation holding securities in public utilities corporations in New York, Pennsylvania, Michigan and Ohio and Illinois, in the South and in New England, serving more than 55,000,000 of the American people. This corporation was organized early in 1929, was brought into existence at the behest of J. P. Morgan & Co., Drexel & Co., which is the Morgan Philadelphia branch, and Bonbright & Co. In Morgan Office. The testimony of Mr. Howard showed two things, first that the actual business of the United Corporation is done in the offices of J. P. Morgan & Co., and that the advice of United Corporation on major policies is followed by the public utilities ion whose stock it holds. As the Senate Banking and Currency Committee winds up today its first phase of its investigation of the Morgan company until next Wednesday it is clear that a drive is under way to break down a central control and influence of the Morgan company which has stretched into banking, industry, public utilities, and, 1t is charged, into politics. Despite the fact that a sweeping bank retorm bill has been passed by houses of Congress and is likely soon to become a law, the Senate acting on it late yesterday, and despite the fact (Continued on Page 5, Column 2.) Police Captain, Bored, Resigns. NEW YORK, May 26 (#)—Twenty- six years of murders, theater fires, raids and what not have left Police Capt. Amander O. Hayes cold. Resign- ing from command of the white lights district, he said he was bored. “Noth- nounce sentence tomorrow. ing much ever happened to me,” he sighed. BROKEN BY JAIL { By the Associated Press. | LONDON, May 26.—Horatio Bottom- ley“.l founder of the weekly .hl:n a:ll and one-time ular figure o lish public ife, dled today after s long | illness at the age of 73. A career in British poli- and journalism crashed in Bailey Court when he was sentenced to seven years' imprisonment for converting to his own use £5,000 of unds he had TEikefeE HORATIO BOTTOMLEY, PUBLISHER, TERM, DIES AT 73 Once London Figure, Imprisoned for War Fraud, Refused | Aid From Man Who Exposed Him. weekly John Bull one of the feat: § A leatures drives to clean up burlesque, gambling | pointed verbal clash over the inquiry. Pecora explained the purpose and read the resolution authorizing the in- “I have examined the minutes and I don’t find at any time that the em- ployment of Mr. Pecora was author- ized,” Glass insisted. “There is no question of the author- g;y in my mind,” Senator Costigan put “I found no record of the employment, but that is immaterial,” Glass said. “Be- cause I think the committee is satisfied with Mr. Pecora’s employment. But the Senator from Michigan (Couzens), who always likes to dig me, has chal- lenged my rights.” After some of the tumult had sub- sided Glass said: “I want to say I was to the (Pecora) compensation arrangement. “I did not think this committee or the Senate should employ counsel at such a salary. I favored adequate compensation. “I don’t think the counsel is working for $255 a month. I think he's work- ing for something else.” Senator Costigan put in that “I ap- preciate the efficiency of the counsel, I think the investigation to date has been relevant and material.” Under questioning by Pecora, Howard had painstakingly told how three days after the United Corporation was formed, it obtained from Morgan much stock in Mohawk Hudson Power, the United Gas Improvement Co. and Pub- lic Service of New Jersey. In turn, the United Corporation was authorized to issue a total capital stock of 13,000,000 shares consisting of 1,000,- 000 first preferred, 2,000,000 preference shares and 10,000,000 common. His words followed closely by Morgan, Howard told the crowded room no first preferred had been issued, but 600,000 of the $3 preference stock had been is- sued and also 800,000 shares of com- mon, all being taken by Morgan. The firm also received 714,000 option warrants entitling it to buy that num- ber of common stock shares at $27.50 a share. i ;‘;:Ach share had one vote,” Howard said. ‘Who had control?” Pecora asked. “J. P. Morgan & Co.” Howard re- turned, while Senators at the long com- mittee table leaned over to hear. Withholds List of Debts. Howard said the 800,000 shares of common stock gave control without the exercise of the option warrants for | common stock. Pecora asked who the executive offi- cers of the corporation were, and the witness began looking through a num- | ber of files before replying. | “Aren’t you familiar with these de- | Lfll‘lz.’" Pecora asked in an irritated voice. Smiling, Howard replied that he was since he became president of the cor- poration, but not before. Before Howard testified, the investi- gating committee had decided to with- hold the list of debts owed by partners in the firm. was was voiced by com- mittee members at “leaks” which have iblication ;ermmedpu of evidence before was introduced, but no action was Mmmmu;u: Senstars who favored f