Evening Star Newspaper, June 27, 1933, Page 2

THE EV ITNGT( TUESDAY, ' JUNE 27, 1933 KAHN DESCRIBES PRIVATE BANKING Likens Business to Practice of Physicians—Do Not Go After Clients. » BY G. GOULD LINCOLN, Otto H. Kahn, Kuhn, Loeb & Co., today opened the second act of the Senate Banking Com mittee’s investigation into the practices | and operations of the great private banking houses of the country. J. Pler- | pont Morgan, jr, and the partners of | the Morgan firm had starred in the first act, which closed more than two weeks ago. 1 Mr. Kahn, patron of the arts and| more particularly of the opera, under | the questioning of Ferdinand Pecora, | the committee’s chief counsel, gave his | conception of the functions which a | private banker, particularly engaged in the underwriting of securities for cor- porations, sheuld perform The private banker, such as a banker | «f the firm of Kuhn, Loeb & Co., which | has been in existence for 65 years or moje and has run through three gen- erations, is, according to Mr. Kahn, a | kind of financial physiclan to whom clients—or patients~go for treatment. Clients Come to Them. Like physicians, such bankers as Kuhn, Loeb & Co. do not go out after clients—or patients. Their cliests come to them. “Our business can succeed,” suggest- ed Mr. Kahn, “only as long as we have the confidence of our customers. Our good name is our show window. If our good name goes, then our business 1s gone.” For the better part of two hours Mr. Pecora sought to draw from Mr. Kahn a categoricdl admission that bankers, particularly private bankers and invest- ment bankers, never seek to take clients away from each other after the clients have been firmly attached to any one bank. J Mr. Kahn, with much patience, again and ag: xplained to the ‘committee’s counsel that his firm did not go out after clients, but that they came to Kuhn, Loeb & Co. He Insisted that his firm would not go in search of the clients of other bankers. Indeed, he expressed horror at the thought. Would Give Assistance. Mr. Kahn pointed out, however, that if the clients of other bankers became convinced that Kuhn, Loeb & Co. gave good service, better service than they had received at the hands of other bankers, there was nothing to prevent those clients from appealing to Kuhn Loeb & Co., for assistance in working out their problems of financing. Indeed, Mr. Kahn said, such clients would be made entirely welcome, pro- vided they had severed their connec- tion with their former bankers. ‘The senior partner of Kuhn, Loeb & Co. and Mr. Pecora sparred for a long time over the question whether it was to the advantage of railroad corpora- senior partner of | During Bank Hearing Tilt SENATOR ORDERS ATTORNEY TO SIT DOWN. ENATOR Y F. ASHURST (left). chairman of the Senate subcommit- tee investig: ng delay in . prosecutions of alleged defalcations in the Harriman National Bank & Trust Co., instructing Nugent Dodds, former Assistant United States Attorney General, to “sit down” following & heated moment in which Dodds Virginia nearly exchanged blows. UHN, LOEB CLINTS NAMED AT INQUIRY 37 Corporations, With De- posits of More Than $50,000 Each, Listed at Probe. (Continued From First Page.) the committee will investigate, Pecora said, were railroad and industrial securi- ties, including those of the Pennroad Corporation, railroad holding company. Pecora hopes to conclude the present phase of the Kuhn, Loeb & Co. inquiry by the end of this week. The committee then will decide whether to procéed immediately with Dillon, Read & Co. or let that go until later. In the Fall the committee expects to wind up its dnvestigation with inquiries into holding companies, investment trusts and stock exchange practices and to scrutinize operations of the Chase National Bank. and Senator Mathew M. Neely of West ‘The scene ensued yesterday when Neely, a i mefmber of the committee, accused Dodds of attempting to “whitewash” the | Harriman matter after Dodds, a witness at the hearing in New Yor { assumed full responsibility for the delay. Y. ., had P. Photo. TAXES FROM BEER MINIMIZED BY DRYS Prohibition Foundation De- clares Revenue Is Falling Below Estimate. By the Assoclated Press. Federal revenue from 3.2 beer “is sharply disappointing to the brewers | i | and their political backers,” the Ameri- | can Business Men's Prohibition Founda- | tion said in a statement yesterday. From April 7 to the end of that month beer taxes yielded $9,138,863 and the May figure was $11,536,026. The statement continues: ’ “This represents an average daily de- crease in beer revenue for May as com- pared to April of $8.658, and if this de- cline should continue, even at the same rate, the total revenue for the first 12 months of re-legalized beer would fall short of $136,000,000. Kahn, small and well dressed, walked | “As an offset to this comparatively into the committee room, accompenied | small total when contrasted with the by associates, 20 minutes ahead of time. | billion-dollar revenue claims of beer He was accompanied by Sir Willlam | spokesmen in the last Congress, there Wiseman, Benjamin J.” Buttenwieser, | should be taken into consideration the Percy §gewart, syndicate manager, and | fact that even so small an amount of Carl De Gersdorfl, counsel. | revenue reveals a beer consumption of G. 0. P. Chairman Admits Polit- TWO STATES VOTE ON REPEAL TODAY | Drys Fight for “Pivotal”! West Virginia—California Already Wet. By the Associ ress, West Virginia and California voted today on prohibition repeal. | The contest in the little mountain | State overshadowed in interest the fight | in the big State on the West Coast. | West Virginia has been dry 20 years | —7 years longer than the Nation. It| is the first State with strong Southern traditions to vote on repeal. | Therefore both wets and drys re- garded the vote as a “pivotal one’;. prohibition’s foes labored to the last minute to get out a strong vote: its friends conducted many prayer meet- ings. F. Scott McBride, superintendent of the Anti-Saloon Leegue, said that if West Virginia voted nay, repeal would be blocked; leaders of the United Re- peal Council predicted victory by 50,- 000 to 100,000; drys also predicted triumph. California ®Already Wet. California voted its own prohibition law into the discard last November. Fourteen States have voted to date | on repeal, ajl in favor of it. New York State cafled its formal | his hat in acknowledgement to the cheers while en r Herbert Lehman (right) and Mayor John Boyd Thacher, 2d, of Albany (at the left). Former Governor Returns to Albany AL SMITH WARMLY GREETED WHEN HE APPEARS FOR REPEAL CONVENTIO! HRONGS lined Capitol Hill in Albany, N. Y. yesterday and roared a welcome to former Gov. Alfred E. Smith as he arrived from New York City to preside at the Emnire State's repeal convention, which was held today. Waving | te to the capitol, the former Governor is shown with Gov. —A. P. Photo. ratification convention for today in Albany. * Indiana and Massachusetts through this formality yesterday. In Texas both wets and drys moved to prepare for the repeal balloting August 26; they called conventions for at Austin to select slates of dele- gates for and against repeal. Senator Morris Sheppard, co-author of the eighteenth amendment, was named temporary chairman of the anti- repeal group. UIZ RORABACK IN POWER PROBE went INPORT LIMTING ON SUGAR URGED Farm Bureau Federation Rep- resentative Would Expand U. S. Market. By the Associated Press. A recommendation that the American market be expanded for American pro- | ducers by limiting the sugar imports | from Cuba, the Philippines and. Puerto | J. Henry Roraback, chairman of the | Rico was made at a sugar hearing to- Connecticut Republican State Central|day by Chester H. Gray, representative Committee and power company execu- | Cf the American Farm Bureau Federa- tive, testified at a Federal Trade Com- | tion. ) mission hearing today that his political| There is no need for limiting do- position “gave some political influence” | Mestic sugar production, he contended, | when he sought charters for his com- (8nd no need _for imposing processing panies from the Connectigut State Leg- | t8Xes or making benefit payments or ical Position Aided in Ob- taining Charters. By the Associated Press. tions or other corporations, wishing to| Kahn told newspaper men he would |over 2,225000 barels of beer for April float securities, to have them bid for |not have a prepared statement as did | and May. by a number of bankers, Mr. Kahn |J. P. Morgan. “This, at the rate of 496 half-pint insisted that such bidding was in reality a drawback; that it would bene- fit in the end neither corporations nor the public and cegteinly not the bank- ers. Mr. Pecors, on' the other hand, toek the view t such bidding would enable cqrporations to dispose of their securities at greater advantage. Many Interested Spectators. - ‘The investigation of Kuhn, Loeb & Co., despite the hot weather, drew many inte: spectators to the Senate Of- fice Building, where the hearing is be- ing conducted in a huge marble caucus room whose accoustics are frightful, but in which loud speakers have been introduced to order to permit the Sen- ators on the committee as well as the spectators to hear what the witness is #aying Mr. Kahn, the son of a German cit- izen who came to the United States in 1848 after the attempted revolution in Germany and became & naturalized cit- izen of the United States, was himsell born in Germany in 1867. He learned his banking in Germany, spent five years in the Deutsche Bank in Lon- don and came to the United States in 1893, entering the banking house of Speyer & Co. It was in 1897 that he became a_meber of the firm of Kuhn, 0. Speaks With Accent. Mr. Kahn speaks with an accent, | but_with entire fluency and commend of English. Not tall, but well set up, Mr. Kahn carries his 66 years remark- ably well. His hair, cut rather short, is gray and he wears a gray mustache. He is tanned as though he lives out- | doors a good deal of the time. On the ! witness stand he is alert and ready | with his answers. In the pest he has president the Metropolitan and chairman of its board. | esent he is a director of that com- 2s well as one of the bankers of the country. The firm of Kuhn, Loeb & Co., Mr. Kahn told the committee, has made a of the business o securities. T of his company railroad corporations, although it has | had relations with ot big corpora- tions, among them-the American Tele- | er whim- leading | marketing | principal | he said, are railroad clien to other securities, ting. had offered Kahn and his s about offel s of partnership o securities when perhaps e tem firm made the record t the company. record thel 1at each p ner had. as was done ‘n the case of J. P. Morgan & Co. There was in-| uced into the re 1so the finau house did accepted depc These deposits ran as high &s ¥ balance sheet of the any in December, 1931, showed a 1 of $66974.84546. Th e earlier years ran as high Describes Underwriting. described for the commit- | in which railroad sec the 1 uhn, Loeb & to the kind of the best time for issue and so fort cluding the rate of interest. A price is fixed, at which the banki use 1s to take over the secu pay the corporation. Mr corporation and the price at which the ties were sold to the public ran ? . t0 213 per cant gross <hat spread all the expense of market- ing the securities must come. The In- terstate Commerce Commission in the case of railroad securities, he pointed out, has & veto Power over the prices which are fixed, and particularly over the spread which goes to the under- writing banker. Mr. Kahn banker, after securities has disposed of them to the public, to 8 man who has a bear by the tail and has to get rid of him. The banker was strong in his con- demnation of cut-throat competition among bankers for the privilege of rdcryngu securities, - likened the he has once investmen purchased “I'am here to answer questions with | steins per barrel, is equivalent to 1,103~ complete frankness and to the best of | 600,000 glasses of beer, which at & dime my pbility,” he said with a smile. |a glass would net the beer makers “Beyond that there is mot & thing | $110.360,000 as the gross receipts of I can tell you.” | thelr first 55 days of ‘legal’ beer, Pecora arrived & moment later and | “This represents simply more than posed with Kahn for photographers. $110,000.000 taken out of the people’s The big marble lined room already | pockets and diverted from legitimate in- was ucomfortably hot and many coats | dustry, necessities and wholesome- Jux- Kahn said that | from a corporation until he | were peeled off promptly. Because of the poor acoustics of the room, & loud speaker system was set up. : Senator Glass, Democrat of Virginia, was was & frequefit critic at the Mo gan hearings, and Senator Steiwer, Re- publican of Oregon, were absent as the hearing opened. In contrast to the huge crowd that stormed the doors of the Morgan in- quiry, only & handful of spectators showed up ahead of time today. The same special police were on guard, but they had little to do. The small preliminary audience was | almost lost in the big caucus room which was used to accommodate the Morgan crowds. Half an hour before the hearing open- ed, committee aids brought in & big trunk full of evidence gathered ng months of inquiry. Handle No Deposits. Pecora, with a long list of written questions, first directed his examina- tion to establish the personnel and prac- tices of the banking house. Kahn sald the firm had been in existence 65 years and he had been a partner since 1897. ‘There are 10 other partners. Its business, he said, is the buying and selling of securities. “But we are not engaged in the busi. ness of accepting deposits from the general public,” he added Asked if the firm maintained offices in the last six years elsewhere than in New York, Kahn said Gordon Leeds was & partner in London for two years, but maintained no office there. The witness said his firm had'a few private customers, chieflly “inherited Furopean clients,” of a rather minor nature, but that its chief business was with corporations. “What kind?” Pecora asked “Rallroads and prominent industrial rporations,”” Kahn replied We have no public utility consider Western Union & public util- or the A. T. & T. a number of years” Depends on Reputation. Questioned by Pecora, Kahn said the majority of corporations with which his firm did business were railroads nator Steiwer came in & few min- t er the session opened. Kahn said his firm obtained clients | reci: d a lawyer 1 he added coming to that. ts by sound advice r them, but jor r contact is made with a raflroad | ng financing ald, Kahn said | price to the railroad and the publie. is not a fair price, ose the good will of either or both have no show window activeness is our good our reputation for integrity Kahu asked 10 “mention any names.” { “Do you ever quit the patient cold?” Out of | Barkley (Democrat) of Kentucky asked ed the relation- | lients and banker |after Kahn had like ship between railroad to doctor and patient | Kahn sald if the patient didnt lve | up to the advice given it was the bank- | ers’ “duty to quit the patient.” | ‘We are not tied to them nor they | to us by any legal process.” Corporations Revealed. merce with deposits of more r afflia- | firm had | tjo;5 and never have had unless you | in the financing | lof which we have had an interest for | He gets his 50 does a law- S0 does an architect; not by chas- ‘i by ‘establishing a > advice as to the best kind of and our opinion as to a fair 1t we are liable our only name and sound advice and | volunteered there had been “ups und downs in banking prestige,” the spread between the price paid the bul express:d hope he would not be Soon thereafter the names of the 37 corporations engaged in interstate com- than $50 000 with Kuhn, Loeb & Co. during ‘urXH to the beer trade.” | more & Ohio Rallroad Co.. Chesapeake & Ohio Railway Co. Chicago, Mil- waukee, St. Paul & Pacific Railroad Co., Chicago & Northwestern Railway Co.. Delaware & Hudson Co., Denver & | Rio Grande Western Railroad Co., Gulf Mobile & Northern Raiiroad Co., Hud- son Coal Co., Hudson-Manhattan Rail- road Co., Illinois Central Railroad Co., Indiana & Illinols Coal Corporation, | Inland Steel Co., International-Great Northern Railroad Co., Kansas City- Southern Railway Co., Mid-Continent Petroleum Corporation, Missouri-Kansas & Texas Railroad Co., Missouri Pacific Railroad Co., National Malleable Steel Castings Co., New Orleans, Texas & Mexico Railway Co., Pacific Oil Co., | Paramount-Famous Lasky Corporation, | Paramount-Publix Corporation, Penn- | road Corporation, Pennsylvania Co., | Pennsylvania Railroad Co., Southern | Pacific Co., Texas & Pacific Railway Co., Transportation JProducts Corpora- | tion, Union Pacific Railroad Co., Utah Fuel Co., Wabash Railway Co. Wes erh Maryland Railway Co., West Union Telegraph Co. Inc.; Westing- house Electric & Manufacturing Co., Westinghouse Lamp Co., Youngstown Sheet & Tube Co. & Balance sheets showing the firm'’s as- sets and total deposits for the five years from 1927 to 1931, inclusive, were placed in the record. | 1931 Balance Sheet. The complete balance sheet for 1931 follows: Cash on hand and in banks, $16,- 295,242, Call loans secured by Stock Exchange collateral, $300,000. | All other loans, $8,378314. | Accounts receivable, $777,409. United States Government Treasury | bills and certificates, $24,919,859. State and municipal bonds, $9,953,051, Other bonds and stocks, $6,350,968. Total assets, $66,974,845. Capital, $21.250.000, Deposits, $29.118,918. | Accounts payable, $16,605927. - | yesterday. | ™m | Total liabilities $66,974,845 Balance sheets for the fiv 1927 to 1931, inclusive assets dropped from $97,244,628 at the beginning of the period. Assets in the other years were: ! 28— 63.970. { ars from 1 ly by the same method as the | committee juwyer goes to a client,” but when Pe- | s not supposed to in total deposits was disclosed by the five yearly balance sheets. For the other years they were: 27—$69,449,016 1929--$88,549.76 1930—$57,032,847. Figures Are Deleted. At the same time the investigators obtained from Kahn a copy of the partnership agreement under which the firm operates. The full copy was accepted for con- sideration in executive session, but a copy was placed in the record with divisions of profits and losses deleted The agreement showed that any loss would be divided in the sgme pro- portion as profits, but five unnamed partners would not share in the loss. Any disagreement over the conduct of the business would be settied by a vote of & majority of four partners whose names were deleted. “No partner,” the agreement said, “shall, without the written consent thereto of the other partners, directly or indirectly speculate or be inter- ested in speculation in stocks or any other article whatsoever.” | The agreement further provided that | no partner could invest in a security | disapproved by a majority of the part- ners. ‘The right to use the name of the firm was confined to five partners, whose names also were deleted. Pecora next laid before the investi- the five-year period 1927 to 1931, in-|gators a list of 6 domestic and 22 for- clusive. They are: were placed in the record. elgn banks with which Kuhn, Loeb & | Co. maintained deposit accounts dur- Balaban & Katz Corporation, Baltl (ing the nve-xflrwéi, R showed total | | | islature. Roraback, president of the Connecti- cut Light & Power Co. and subsidiary companies, controling, he said, more than half the power in the State, was called to the stand in the commission’s investigation of subsidiaries of United Gas Improvement Co. Robert E, Healy, commission counsel, questioned Roraback at length regard- ing his political affiiliations and also on power company legislation in the | State. The witness was asked, too, about | his stock purchases in other power com- panies and circumstances surroundin the rejection of the nomination of Prof. Richard J. Smith as a member of the Connecticut Public Utilitles Commission in 1831. “Aren’'t you one of those to whom Morgan & Co. sold stock in the United Corporation at a low price?” Healy asked Roraback replied, 1| the “Xes” “and would like to get back what I paid for it.” “When you boyght the stock, did you not know the United Corporation was | deeply interested in the United Gas Improvement Co.?” | Roraback replied he was not aware at the time of the relations between the two companies. . FOREST WORKER PAWED BY BEAR, SHOT BY SOLDIER By the Assoclated Press. THOMPSON FALLS, Mont., June 27. Pawed by a big black bear and wounded by a bullet fired at the animal by & rescuer, George Anderson of Missoula, & member of the Civilian Conservation Corps, was in a serious condition here Anderson, a8 member of the Larch- wood Reforestation Camp on Trout Creek, was tramping in the timber when the bear rushed him. He at- tempted to protect himself with a club, but the bear pawed the weapon out of his hands and grappled with | him. Two Regular Army enlisted men who came upon the scene ran to Anderson’s rescue, but when the bear closed in Sergt. Hardiman was compelled to fire at close range and one of the bullets passed through the animal and then wounded Anderson in the side. The second shot killed the bear. | Gets Year for Postal Fraud. SAN FRANCISCO, June 27 () —Wil- | liam F. Wingfield, 37, of Bowling | Green, Ky, was sentenced to a year | and & day in Federal Penitentiary by | Federal Judge Frank H. Kerrigan yes- terday, following his plea of guilty to | having cashed two postal savings cer- | tMicates made out to Samuel F. John- son of Lincoln, Nebr. Kahn Is Otto H. Kahn, senior partner in Kuhn, Loeb & Co., is shown as he arrived at the Senate Banking Committee inquiry this morning. Kahn (on the left) was Next to him is Percy M. Stewart, syndicate lx:ng:ger for the - first witness uhn, Loeb & Co. | institution of a program of acreage | withdrawal. ‘The American sugar industry, would | be best served—in his opinion—by mak- ing no change in the preferential rate on Cuban imports unless that«change FEDERAL AGENCIES RUSH COMPLETION OF JOB PROGRAMS (Captinued From Pirst Page) in all these groupings. It was thought that the department would not know exactly where it will stand for a couple of weeks yet. Bureaus Plan Savings. The Department of Agriculture, it was learned, also expects to have to use available means for reducing its force, and it was said every bureau is scanning its rolls to find out- just where savings may be made. Here, too, it was said that it would not be possible to simply cut off activities at the first of the new fiscal year, but that 4 decision would have to be made as to where the reduction could be effected with most satisfactory results. Both dismissals and furloughs are in view there, but it was thought a weck would elapse before there would be any- thing definite in this connection. The Treasury Department expects to | make few dismissals in the department proper, but will have to resort to fur- loughs. It was thought, however, that these would not exceed two weeks. Two branches of the Treasury already have been hard hit though, the Bureau of Internal Revenue dropping 600 persons —500 in the field and 100 here—and the Coast Guard cutting off 1500 en- listed men and 150 warrant officers. Fewer Patronage Jobs. ROBINSON PRAISES PARTY'S RECORD Campaign Pledges Fulfilled or Ready for Final Action, He Says. | By the Associated Press. | All the Democratic party's platform | promises either have been fulfilled or | “advanced to a stage which promises early ultimate results,” Senate Demo- | cratic Leader Joseph Robinson said yes- | terday. Robinson praised the adminis- | tration for “an incomparable record” | in keeping campaign pledges. In a statement reviewing the record | of the administration and Congress, the | Arkansas Senator said there were signs of “a decided improvement in business.” Robinson listed the party’s campaign pledges, one by one, with a statement of the action taken on each. | Heading the list was the pledge to cut | governmental expenditures 25 per cent, which he said had been accomplished by effecting annual savings of “about a billion dollars.” This also fulfilled the In Justice, where the prohibition cut ' promise to balance the budget, he as- be to make the Cuban rate the same 85| " )ounced, it has also been made | serted. the world rate. | and Hawali, were attending the sugar | agricultural | board or council which would speak for | Approximately 150 representatives of the suger industry, including producers | from the Philippines, Cuba, Puerto Rico | hearing under the auspices of the agri- cultural adjustment administration in an effort to work out a trade agreement | based on a quota system to increase the general price level and stabilize all units of the industry. Representatives of the sugar industry were urged today by Charles J. Brand, co-administrator of the agricultural ad- justment act, to “bury the hatchet of competition” to arrive at a trade agree- ment for the benefit of the industry. Brand said in formulating a trade agreement the problem must be ap- proached from & new angle of “live and let live” and not “dog eat dog.” | “Everybody must make some contri-/ bution,” he said in asserting that any | code entered into would be fairly ad- ministered. Brand outlined the principles of the adjustment act under| which the agreement would be made and suggested the selection of “service committees” from within the various greups to prepare the quota plan. He also suggested a sugar industries the industry as a whole and would work with the Farm Administration. BRITISH TEAM VICTOR OF RYDER CUP MATCH IN SENSATIONAL PLAY (Continued From First Page.) tee shots and ended up in bunkers. Syd | came out with a fine recovery to carry the green with an iron, while Shute’s | second found another bflker to the left | of the green, the ball ®esting in deep sand. He recovered beautifully, but the | match was gone as Easterbrook, his | nerves steady, canned his second putt | to win the hole, 4-5, the match by one | hole and the series, keeping intact the | tradition that the home team always wins the Ryder Cup. Counting the informal matches in 1926, the score nmow stands 3 to 2 in| favor of Great Britain, although the cup has only been played for four times, and there the Americans hold | their own, 2 series to 2. Quizzed £ 4 |are extending warm C0-0) ant United States attorneys and deputy marshals — patronage jobs — employed during the coming year, but there has been no advice yet as to the department service proper. War and Commerce are also still to fix the departmental policy. In the former the plan to be followed is await- ing the return of Secretary Dern. In the latter there has been a drastic slash in the funds for the Bureau of Foreign and Domestic Commerce, while in the highly impertant Bureau of Standards, staffed by selentists, a re- duction also has been announced. At the Post Office Department it has been stated that furloughs will be ap- plied, but the extent .has not been fixed. This department has adhered to the “spread work” principle, and has already fixed nine-day furloughs for- the postal service proper, in addition to other economies, in that way avoiding dismissals. State to Dismiss 62. In the State Department there will be 62 separations the end of this month. Among these are 39 whose husbands or wives are elsewhere in the service, and 4 In the 30-year retirement group. ‘The Navy Departmnt made approxi- mately 200 separations on June 1. The Department of Labor, like the Post Office Department, hopes to make out by use of furloughs, and that prin- ciple will also be followed by the Civil Service Commission, one of the larger independent groups. Meanwhile, today there was a cheer- ing note injected into the situation at the Interstate Commerce Commission, where 613 employes lose their jobs Fri- day night, it being said in a respon- sible quarter that prospects were bright for placing the best part of them in other Government agencies. ‘Two bureaus are effected—Valuation, where 529 lost out, and Accounts, where the reduction is 84. The largest pro- portion of these are in Washington, al- ;‘hi\;sh there is a large number in the eld. ‘The valuation appropriation was cut by $1,750,000 to $1,000,000 as result of the repeal of the recapture law, which the Government found itself unable to enforce against the rallroads, while the Bureau of Accounts suffered a re- duction of $35,000, to $750,000. 613 on Payless Furlough. At present the former has 910 work- ers and the latter 310. The 613 are being put on 90-day payless furloughs, while efforts are made to place them elsewhere, and they were advised in letter today that if these placement efforts fail it will be necessary to drop them from the rolls. Those remaining on a pay status go on the five-day week, with Monday off, starting July 1. This experiment is scheduled to remain ef- fective until November 1. In the furloughed group are en- known that there will be fewer ls'lst-‘ gineers, lawyers, accountants and cleri- | and new Government groups ration in placing them when possible, it was said cal help, It was added in this connection that this did not mean that jobs could be- found in Washington for all those sta- tioned here, as Government activities on the outside were looked to for aid |in the situation. Postal Workers Disturbed. The economy program of the Post Office Department has brought a query and complaint from Thomas F. Dolan, president of the National Association of Post Office Clerks, who has asked Postmaster General Farley if the postal service workers must take the impend- | ing nine-day furlough in addition to the 15 per cent salary cut. Until they know, said Dolan, they are “quite naturally disturbed” and their morale is “upset.” 4 If the 15 per cent cut is to operate in conjunction with the imposition of the payless furloughs, Dolan’s letter said, 1f would be “surely a backward and dnpunm step.” The letter added: It wi flh:ve a claritying and most salutory effect if you will deem it ad- visable to inform the association * * ¢ whether the nine payless furlough days | are to be the only reduction, or if the 15 per cent, or some portion of it, is to be continued as well.” As announced, this furlough is to be applied in the next three months to spread work among the existing per- sonnel and avert dismissals, while at the same time saving on the appro- Finds No Parallel. | Robinson szid Congress “made a rec- | ord unparalleled for speed and effective | action,” and that he knew “of no other | instance of equal eo-operation by a leg- islative body with the executive.” “There have been differences of opin- ion regarding detail, but they have been | quickly composed and the desired result obtained,” he added. “The Congress has not been a rubber | stamp. The most obvious necessity of | emergency legislation has been a speedy | passport for its enactment, while other measures less urgent, or seemingly so, ;hn\'e been debated in considerable de- | tail.” |~ Among the pledges he claimed had | been fulfilled were farm relief, Federal | aid to the unemployed, spreading em- | ployment, development of water power, protection of the investing public and |a firm foreign policy. VETSREASSURED INRODSEVELT NOTE President Tells Disabled Men Government Wiil Not Forget Them. By the Acsociated Press. CINCINNATI, Ohio, June 27.—The assurance of President Roosevelt that “no man who has been handicapped in after life by his service to his country shall be forgotten or unrewarded to the fullest extent that our financial condition permits.” was before the con- vention of the Disabled American Vet- erans’ today. ou may have no fear,” said the President in a telegram, “that anything has been done which will bar any war sufferer from the grateful recognition of his country.” Meanwhile, delegates pushed toward completion of a convention program that was expected to include a demand for restoration of the cuts for service connected disabilities in Mr. Roosevelt’s economy program. The soldier bonus also was an issue, with leaders urging that no demand for cash payment of adjusted service certificates be made at this time. National Comdr. Willlam Conley of Los Angeles, and Legislative Chairman Thomas Kirby of Washington criticized the Roosevelt policies affecting disabled service men. At the same time, they asked the organization to take a definge stand against such pilgrimages to Wash- ington as the bonus marchers made last year, saying constitutional means should prove more effective. ‘The Women's Auxiliary of the D. A. V. also voiced dissatisfaction with cuts in veterans’ compensation. Its commander, Mrs. Freida Mooney of California, re- minded the members of “the chasm that yawns before the benefits and rights of your loved ones.” LENZ AND LIGGETT WIN BRIDGE HONORS Steal Spotlight by Being Victors With 103 Points in Con- tract Session. By the Associated Press. HANOVER, N. H., June 27.—The vet- eran internationalists, Sidney S. Lenz and his partner, Winfield Liggett, jr., stole the spotlight yesterday in the all round championship by winning the contract session with 103 points at the Twenty-fifth Annual Whist Congress. The team’s advantage over Walter P. ‘Wyman of Boston and Prof. J. P. Rich- ardson of the Dartmouth faculty was 8; points. ‘With the completion of the contract session, the all-round championship, one of the major titles of the tourna- ment, reached the one-third mark. P. Hal Sims and Arthur Ryan of Hartford, Conn., nosed out the veteran Sir Derrick Wernher and F. C. Thwaits of Boston by a half point for fourth place. A Hartford, Conn., combination of Sam O'Connell and James O'Connor, who have played consistent bridge dur- ing the tournament, was in third place with 90 points. Today the major United States fitles in whist will start with a fu'l fleld. The Hamilton Trophy for duplicate whist teams of four will be the first object of contest. The competition for the Cannon, Associated Min- neapolis, New Amste and Manhattan Trophies successive days. SCIENCE WILL END WAR, SAYS MILLIKAN Noted California Professor De- clares Advancement Has De- stroyed Gains of Combat. follow on Defends Money Policy. Commenting on the platform pledge for sound currency and an international | monetary conference. Robinson said: “In the opinion of many, conditions which had not been anticipated by the previous administration made necessary the grant of extraordinary powers to the President with respect to the con- tent of the gold dollar. | _ “Authorization for the issuance of | Treasury notes secured by Government |bonds and for the purchase by the Treasury of Government obligations, is supported by numerous precedents. “Manifestly the platform declaration. which declared for an international monetary conférence to consider the re- habilitation of silver, did not commit the administration to the obligation 0 maintain the gold standard, in spite of the fact that nearly all other commer- cial nations of prominence might abandon it.” \WRECK OF BOMBER BROUGHT TO SHORE | Plane From Langley in Which Four Lost Lives Towed to Naval Base. | By the Associated Press. NORFOLK, Va., June 27.—A com- plete wreck, the bombing plane in which four men from Langley Field lost their lives when the craft crashed in James River, near Rushmere, Isle of Wight | County, Saturday night, was brought to the Norfolk naval operating base on :l!llehtwrecklng barge Mary Anne last ;‘me bodies of three of the victims | of the crash had previously been land- ed at Fort Eustis by the Mary Anne. The fourth body was not recovered. It By the Assoclated Press. ‘WELLESLEY, Mass., June 27.—Dr. Robert A. Millikan, one of America's foremost scientists, last night told the New England Institute of International Relations that “I regard science as the most _effective and deadly foe of war. And I think it is rapidly rendering war obsolete.” Dr. Millikan, professor at the Cali- fornia Institute of Technology, said in an address he did not belleve disarma- ment necessarily meant peace, and cited the comparative unpreparedness of the United States at the beginning of its major conflicts. The significant fact was, he said, that so long as conduct is dictated solely by the emotions, “the law of the Jjungle must and will hold.” The method of science, he held, was rational in- stead of emotional, and it was reason alone that sharply differentiated man from the brutes. Asserting that “science and its appli- cation has changed the nature of war,” Dr. Millikan added: “They have rene dered it more destructive and enor- mously more costly, so that, as the last war showed, the advantages which the victor formerly- hoped to win from war have disappeared. “Intelligent, rational beings cannot fail to read the handwriting on the wall, written there by science. The advance in science has sounded the death-knell of war.” - CUSTOMS MEN SCORE FEDERAL PAY CUTS Association Sees Demoralized Gov- ernment Service Result of Slash and Furloughs. BY the Assoclated Press. NEW YORK, June 27—The Na- tional Customs Service Association, in biennial convention here, rday was seen by the salvage crew on the wrecking barge, but floated away be- 1 fore it could be recovered, naval au- thorities here said. Which of the bodies it was that floated away was not known by Navy men. Those who lost their lives in the crash were: Second Lieut. Lewis Horvath, Air %qrps Reserve, a native of Honey Creek, Second Lieut. H. W. Mackelcan, Air Corps Reserve, a native of Baltimore; Private (First Class) Charles Sayer, jr., aged 22, 49th Squadron, a native of Philadelphia, and Private (First Class) Albert C. Oliver, aged 31, 49th Squadron, a native of Smithfield, N. C. —_— PROPERTY NOT INVOLVED Store at 607 E Street Not Included in Sale to Hecht Co. It was erroneously reported in The Star Saturday that the premises at 607 E street was involved in a sale to the Hecht Co. The address should have been 605'. E street. The store at 607 E street is occupied by the F. W. Bolgiano & Son feed concern, and the property has not changed hands. The Star regrets the Jal unanimously adopted & ‘which it was asserted that vm: develop- ments had “to a great degres demoral- ized the spirit of the employes of the qu\;mment service.” e report, read to the tes by George W. Hill of Bll!lmflfld?u' Vlcg Ppresident, said in part: “The recent curln salary of 15 per cent, the continued agitation of com- pulsory furloughs up to 90 , the compulsory retirement of 30-year em- ployes, some of whom represent the best men in our service, plus the reorgani- zation Dhrg; have to a great degree de- moralized the spirit of the employes of the “(Iiuve:zxme;nc ):ervlce. “We entered the Government service thinking that as long as we efficiently performed our respective duties that we had a place for life, and now, after hav- ing given the pest years of our lives to the service, some are faced with the rospect of being thrown out on' the usiness world where there are approxi- mately 12,000,000 unemployed. There can be no denial of the fact that economic hysteria completely supplanted sound business judgment in the minds of the great majority of our statesmen during the past two years.” Numerous resolutions will be consid- ered by the delegates chief of which is one proposing with the American Federation of Labor. The 10 delegates attending the sessions rep- resent approximately 6,000 empioyes of