Evening Star Newspaper, May 26, 1933, Page 5

HOUSE COMMITTEE TOCUTOEDLETONS Proposed Amendment Limit Credits for Losses to One Year. (Continued Prom FPirst Page.) power by the tight limits it puts on private banking houses. In both Houses, too, had burst out speeches demanding the resignations of Secretary of the Treasury Woodin, of Norman H. Davis. the Ambassador at Large managing the European end of the Roosevelt foreign policy, and of Dean Acheson, new Assistant Secretary of the Treasury. The names of Woodin and Davis were among the many on the Morgan favored lists of men sold stocks below the public price, and Ache- to| One Man Rejected Morgan Offer of Preferred Status By the Associated Press. Ferdinand Pecora, counsel for the committee investigating the Morgan banking house, said to- day he had the name of “one man” who turned down an offer to get on Morgan's select cus- tomer list for an “ethical rea- son.” He said he would later make it public, with the man's letter re- fusing participation in a stock issue. [MORGAN UTILITIES SERVE 55,000,000 PEOPLE OF NATION _(Continued From First Page) ! that both Houses have passed a securi ties bill, the intensive investigation of J P. Morgan & Co. is to be continued. Senator Fletcher of Florida, chairman | "I.\'G STAR, WASHINGTON, DG Pecora Impelled by Innate Curiosity SENATE COUNSEL GAINED FAME AS FACT BY REX COLLIER. | DMONISHED as a boy about the ill fortune that befell a certain curious cat, Ferdinand Pecora —always a most inquisitive | person—has lived to see his doctrine of “getting the facts” vindi- cated before the bar of public opinion. ‘When young J. P. Morgan was grad- ating from Harvard University in 1889, ‘Perdy” Pecora was a tousle-haired, bright-eyed Italian immigrant boy of 7 on the sidewalks of West Side New York. A few years later, as a hustler in a cheap sweatshop which paid him a pit- tance, used by the boy in the family | fight against poverty, the swarthy lad | from Sicily first heard of the awesome | House of Morgan—of its sacrosanct dig- | nity and power and vealth. | The Pecora youth was awed by the majesty of the Morgans just as any other | underprivileged youth would be. But to Ferdinand Pecora things mysterious serve but to whet his innate. curicsity. Not that this curiosity was directed | specifically to the Morgans at that time. | son’s name has also figured in the in- (SEPR 0T g et B0 iite, said today quiry because of his previous business | the' possage of the bank - reform bill affiliations. Stands Pat on Taxes. ‘The administration appeared resolved to ride out this tide, determined to keep its valued officials, and it stood pat on the new high income taxes to finance the $3,300,000,000 public works bond issue. But it interposed no objection to the plan of the House Ways and Means Committce Chairman Representative Doughton (Democrat), North —Caro- lina. to study a thorough overhauling of the tax laws for next session. A study by the committee after the spe- cial session adjourns is due. The biggest hazard to woi publican move to throw the whole thing back into committee to put in a sales tax. The income tax furor was count- ed on by engineers of this move to help them. Especially since the rule for six hours’ debate and no floor amend- ments was voted on yesterday by the narrow 213 to 194 margin. This threw such a scare into the Democratic lead- ers that they hastened to the White House for help in forcing objectors into line today. The only other amendments to get & vote are: The capital losses plug-up, one transferring the present 3 per cent electric tax from consumer to producer (a bill for this already has passed but is snarled in a bad conference mix-up), and one to allocate $400,000,000 of the public works money to the States for highway construction, to be distributed on an apportionment in which popula- tion will count for 50 per cent, area of the State and length of its post roads 25 per cent each. The first voice raised against Secre- | tary Woodin and Norman H. Davis as a | result of the Morgan revelations was| that of Senator Robinson, Republican, of Indiana. He demended to know the public | bill in the House was the Re- | | would not in any way halt the continu- |ance of the committee's investigation of the Morgan firm, which is to be fol- lowed by investigation of Kuhn, Loeb Co., and other private bankers in |New York. | Weathered Other Storms. Representatives of the House of Mor- gan, however, havé seen this great banking house weather other investiga- tions by congressional committees, in- cluding the Pujo moncy trust investi- gation in 1912 and the investigation of | the New York, New Haven & Hartford | | Railroad in 1913. It is safe to say, how- ever, that never before has there been such a searching inquiry into the opera- | tion of the company as is now under Way. | ""@= committee has still to go into the | operation of J. P. Morgan & Co. in the | matter of foreign loans and the flotation | of foreign securities in this country. The committee has developed and spread on its records the fact that the Morgan firm is in the process of making large loans to the officlals of | other banks in New York; that the 20 partners of the Morgan firm are mem- | bers of board of directors of the largest | g, | industrial corporation in the country. | It has also developed that the Mor- gan firm has handed out favors to men | prominent throughout the country by | letting them purchase at “ground-floor” prices securities whose market price at | the time has been many points higher. | These favors have been distributed to | leading figures in both the Democraticy | and Republican parties, as disclosed by | the two lists of favored clients and | friends already made public during the investigation. Tmpartial in Politics. On Capitol Hill, if not elsewhere, this | impartiality so far as politics is con- His opportunity to pull aside the cloak of mysticism surrounding this fabulous name was to come long afterward. Studied Law at Night. ‘Before that opportunity came to him the irrepressible West Side Sicillan— now thoroughly Americanized—was prej himself by the study of law to “get the facts” ~Still struggling to aid in the support of his parents and six younger brothers and sisters, young Pecora worked long and hard by day and, instead of secking recreation with his friends at Coney Island in the evening, poured over law books. The law had appealed to him more than the ministry—a profession his parents had in mind for him when, earlier, they had induced him to attend St. Stephen’s | College, in New York City. He graduated from the New York Law School in 1909, was admitted to the bar and shortly thereafter became an assistant prosecutor in the district at- torney's office—wherein was to lie his path to fame as a factfinder. One of his earliest factfinding cases of note was the New York State sinking fund scandal of 1920, when he obtained information leading to the indictment of the State controller in connection with administration of the sinking fund. y an interesting, coincidence, one of the first witesses to face Pecora at the opening of the Senate Banking Com- mittee’s investigation was H. C. Syl- vester, a vice president of the P!Atloml City Co., who had been Pecora’s chief informant in the sinking fund case so many Yyears ago. For a dozen years Pecora’s verbal darts and persistent inquisitiveness un- covered carefully concealed facts for the district attorney’s office—to the embar- rassment and grief of many law evaders and violators. In 1923 he conducted a sensational campaign to rid New York City of bucket shops, ending in a score of convictions and the closing of 140 other shops. In 1926 and 1927 he ex- | with resulting sensational prosecutions. ‘When the Senate Banking Committee was casting about for some one qualified to go after and get the facts behind the impressive buttresses of the House of Morgan it gravitated toward the gimlet-eyed Pecora. Invaded House of Morgan. Awed by this assignment? Not the the indominatable Ferdinand. Armed with credentials from the committee as “chief counsel.” he took |a squad of picked investigators right |into the stronghold of the mightiest | private banking concern in the world and set to work. There were raised eyebrows and pained expressions on the faces of many of the | “gadflies” of the Senate of the United | States dared to invade the. privacy of | secret files and to unearth sacred lists of “preferred customers” and other in- | teresting documents—since made pub- | lic in the committee hearings. FERDINAND PECORA. Morgan executives as _these | | cerned on the part of the Morgan Co. posed graft in the Health Department, ' There was no stopping Pecora anq FINDER. —Harris-Ewing Photo. | his aides, however. Nothing was sacred to these nosey individuals, it seemed. But nothing could be done about it— even by the great J. P. Morgan and his austere stafl of partners, assistants, at- torneys and guards. For weeks this sort of prying went on, | and consternation of the house of Mor- | gan increased. ‘Then came the revelations at the Capitol that still are reverberating around the globe. The climax of it all arrived when the one-time immigrant urchin faced the great Morgan himself across the coun- | sel table and subjected him to his first {and only grilling at the bar of the ‘most deliberative body in the world.” “I am unaccustomed to this sort of questioning,” Mr. Morgan protested at one stage of the proceedings. Which is perfectly true, if he re- ferred to the Pecora type of quizzing. It’s an insatiable kind of curiosity— ' admirers of Mr. Pecora point out—often devastating, but always fair. whether Davis was representing the House of Morgan or the United States in Europe, and said Woodin had out- lived his usefulness as Secretary of the ‘Treasury. Resignations Demanded. { In the House, Representative Britten, Republican, of Illinols, protesting sgainst the tax increase proposed for low incomes, pointed to the Morgan in- vestigation and said Davis, Woodin and Acheson should resign. Testimony in the Morgan investiga- tion has shown Davis borrowed money from the Morgan firm several years ago, | most of which he has paid back. There | also was a reference yesterday to the possibility that a member of a law firm with which Acheson once was associated had received preferred stock treatment from the Morgan company. Britten said the tax program was “merely an addition to what has been | transpiring on Capitol Hill in the last | two days, when a man worth almost half a billion dollars has the effrontery | 1o say that in the last four-years he | bhas not paid a single dollar in taxes.” “Do you realize that this is going to shatter confidence in your Govern- ment?” he asked. H “I say that notwithstanding.the in- | tegrity, the honesty of purpose of your | Becretary of Treasury, he should resign. | “The Assistant Secretary of Treasury, . Mr. Acheson, should resign; Norman H. | Davis, on the other side, another Mor- gan butterfly, should resign and come home. The country has no confidence | in them.” Senator Tydings, Democrat, of Mary- land, who promptly answered Robin- | son’s outburst against Davis, contended that “going to Europe in 1933 is more | calculated in my opinion to keep us out of war” than to get this Nation into conflict and continued: “I think that Mr. Davis, whether he made or did not make a loan (from J. P. Morgan & Co.), has shown a stature of statesmanship for which this world 4s hungry. “The man who attacks an Ambassa- dor abroad when that Ambassador is accomplishing signal success is attack- ing humanity. He is sowing the seed of international hate and ill-will on which wars thrive. “We sent Mr. Davis abroad to nego- tiate a disarmament treaty and he has been the most efficient representative | of n}:}\' government on the face of the earth 82 Democrats Bolted. wo Democrats sloughed away e majority yesterday to join 107 ens and five Farmer-Laborites fon to the 213 Democrats who voted for the rule limiting debate on the bill. Before _the vote was announced by Speaker Rainey, who also voted “aye.” | Representatives Bailey of Texas, Kelly | of Iliinois, Musselwhite of Ohio, and | Malaney and Koppleman, both of Con-‘ necticut, Democrats, changed their votes from “no” to “aye.” | The amendments agreed upo by the s and Means Committee before the House convened helped administration Tollowers to put over the rule. Representative Bacharach declined Jast night to disclose full detafls of his sales tax plans Mfident the sales tax will be Bacharach said. He added ny opponents ef the increased and income taxes were Sup- has brought the open ecriticism that gle company seeks control in both par- es. ‘The Glass bank reform bill would compel the Morgan firm to give up either its commercial banking business, the acceptance of deposits and the making of loans, or its flotation of and dealing in securities. It would go fur- ther and provide that if the Morgan Company elects to continue as a bank of deposit it must be subject to ex- amination by the authorities, an ex- amination from which it is now free. Admittedly, and this view is coin- cided in by representatives of the Mor-| firm, the enactment of the Glass| bill as a law will give the firm con- siderable food for thought as to what its future activities shall be. There could be no possible doubt, however, it appears, that under present conditions the Morgan firm will elect to continue as a bank rather than as a house hand- ling securities. The last few years have been comparatively lean years in the matter of issuing new securities. Fur- thermore, it has been testified by Mr. Morgan himself that the major part of | his firm’s business has been a banking business. i Political Repercussions. Developments in the political field! growing out of the Morgan investi-| gation may be far reaching. While it appears that the Morgan firm has not included in its lists of preferred clients men actualiy in the Govern-| ment service, it has done these favors| for men who have since entered public life and men who have held high offices in the past, as for example, the late President Calvin Coolidge, and_former Secretary of War, Newton D, Baker. Already the fact that Secretary of| the Treasury Woodin several years ago was favored by the Morgan firm in the | purchase of securities below the market | price has been a subject of attack from | the Senate floor. Whether this attack will be continued remains to be seen.! 1t is expected. however, that the in-| vestigation will show Mr. Woodin name included in more lists of favored clients before the investigation is over. Prof. Hering Science Speaker. Prof. Herman S. Hering of Boston. Mass., was scheduled to deliver a lec- ture at noon today in the Nation: Theater on the subject of “Chri Science: Some Rudimental Points." Prof. Hering delivered a similar lecturs | last night at the First Church of Christ Scientist MEMORIAL WREATHS Designed and made by our 6wn artist — wreaths — sprays, cut flowers, or plants. Beautiful de- signs—priced low. Phone us— Free delivery. FLORIST Y@ Atlantic 0162 Hyatts, NURSERYMEN 785 Opposite Ft. Lincoln Cemetery *x *x *x *x Four Stars For Pedicraft Shoes for Boys and Girls— Keeps Ankle Bones Straight! % Strengthens Natural Arch! * Exercises Toes Prop- erly! v Develops Foot Scien- tifically ! $2.00 to $5.00, According to Size Scientific Fitting Miss M. Kruss is in charge of our children’s department BOYCE &LEWIS Custom Fitting Shoes 439-441 7th St. N.W. REQUEST ELIMINATION | OF GRADE CROSSING | | to come Appeal to State Highway Group| round dance for the benefit of the! Oliver in charge of tickets. zens' Association. Is Voted by Colvin Run Citi- ‘ | Special Dispatch to The Star. | COLVIN RUN, Va, May 26—An| appeal to the State Highway Commis- sion to eliminate the dangerous gnde“ and curve at Hunters Station on the| road between Oeskton and Browns! Chapel was voted last night by the Colvin Run Citizens' Association. In its resolution the association brought to the attention of the com-| | mission that there is a 15-foot fall in grade in the 50 feet south of the tracks of the Washington & Old Dominion | Railway, which, with the curve in the road, makes it impossible for a slow-| moving truck to see an approaching | train until too late to avoid a col-| lison. Last week & train and a truck | hauling stone for the State, which is| now preparing to improve and hard | surface this road, were in collision at this point, the truck being hurled into| a telephone pole and the driver thrown | 30 feet, fortunately escaping without | serious injury. | ‘The association adopted a second FLYING ANTS (Termites) | Cause $10.000.000 Damage An ‘ to Weodwork in Homes and B GUARANTEED TREATMENT Unnecessary—Free Inspection of Washington Tomorrow—Saturday | Roast Leg of Lamb i or Chicken Dinner 50c Other Dinners, 55c, 65¢c, 75¢ Collier Inn AIR-COOLED DINING ROOM 18th and Col. Rd. | resolution calling this condition to the | building indebtedness tomorrow night, attention of the officials of the Wash- | with Mrs. Minnie Coleman as general ington & Old Dominion Railway and chairman, Mrs. Bessie Coulter, Mrs. asking them to require their engineers | J. A. Wheeler, Mrs. Goldie Millard and to a full stop at this crossing | Mis. Will Oliver in charge of refresh- Arrangements were made to give a ments, and James Signor and William *x *x k kx Xk Pay Only 45¢ DOWN 50c WEEKLY ¢ Chas. Schwartz & Son The Ideal W atch FOR THE Graduate Guaranteed 7-Jewel AMERICAN MADE WRIST WATCH 795 LOOK FOR THE SCHWARTZ GOLD CLOCK ON SEVENTH ST. iiz&-Son HOME OF PERFECT DIAMONDS 708 Seventh St. N.W. What gift is more ap- preciated than a hand- reliable watch! Has sturdy bracelet to match. Very special at .... some wrist Motor to Music, Over the Holiday! Philco Auto Radios $39.95 Complete and Installed —Install a radio—make every moment in your car a double pleasure, and get a new thrill in driving. Have music wherever you go—wherever you are— night or day. No need to miss the “good things on the air”—over the holiday and week ends during the Summer. — Philco 5-tube Auto Radios are exclusively ap- proved by 14 of the most promi- nent makes of cars. You May Buy One Now on Convenient Terms RADIO DEPT. #th Floor FRIDAY, MAY 26, 1933. ICHARLES FRANCIS ADAMS l HAS NOTHING TO HIDE Former Secretary of Navy Unwor- ried by Being Preferred Mor- gan Customer. By the Associated Press. BOSTON, May 26—The Boston American says Charles Francis Adams, former Secretary of the Navy, declared ne has nothing to conceal as one of the J. P. Morgan & Co. “favored cus- tomers.” ‘The American quotes Adams’ as say- ing, “There is nothing to conceal. There is nothing unusual about my trans- actions. 1 was given an opportunity | 1 | to purchase stock at a certain figure, | | which appeared to me attractive, and | 1 I invested. How gooc that investment | is I have vet to leamn. “The point I wish to make is that I | did this as a private citizen before I ‘;‘merrd the service as Secretary of the avy.” | Adams now is president of the Union Trust Co. of Boston. His name, with many others, appeared as one of the men’ given prefererrce in buying Mor- gan-controlled stocks. Italy Honors Sculptor. CHICAGO, May 26 (#) .—Lorado Taft. the sculptor, yesterday was deco rated with the insignia of Commenda- tore of the Crown of Italy. The honor | was conferred by Prince Ludovico Spada Potenziani. | th~t were headed for our 30 stocks are going at with two trousers During the last few days, our Special Silver Jubilee Values have melted away, in a wave of enthusiastic buying. We had to have replacements in a hurry. These higher-priced suits had just arrived from our factory. They were made for our 830 selections. Here was our one chance to draft the reinforcements we needed. “Put them in at $20”, were the orders that shot over the telephone — “let ’em go for $10 less”. And we’ve done it! Good business for us, because we keep things humming. because you get Good business for you, super-quality suits at a sizeable saving. Plenty of greys, plaids and chalk stripes —this season’s top favorites. See them at our 25th Birthday Party, today and tomorrow! | lision near | ago. Caldwell claims to have suffered GETS $3,000 DAMAGES Appomattox Man Asked $25,000 for Crash Injuries. Special Dispatch to The Star. FAIRFAX, Va, May 26.—A jury in Circuit Court last night awarded $3,000 damages to W. S. Caldwell of Appo=- mattox, Va., whod sued Arthur E. Camp~ bell of Boston, Mass., for $25,000 dam~ ages as a result of an automobile col- Annandale about & year permanent injuries This was said to be the first suit filed in Virginia against a non-Tesi- dent where service was secured through T. McCall Frazier, director of the divi- sion of motor vehicles.