(2 of 3)
Two other partners were admitted last January: Hugh Knowlton, onetime vice president of the Manhattan Co.'s International Acceptance Bank, and Elisha Walker, once allied with Amadeo Peter Giannini who later ousted him as head of famed Transamerica Corp. As novices in K. L. they can, however, tell the Senate little, though they know well the general business of the house they serve, a house that stands next to Morgan in reputation but that is apt to tackle different jobs.
For straight banking is not one of its jobs. It carries accounts for merchants but no checking accounts. Its primary business has been securities, railroad securities in particular. Kuhn, Loeb railroads include the North Western, the Delaware & Hudson, Illinois Central, Norfolk & Western, Pennsylvania, Southern Pacific, Paris-Lyon-Mediteranée. Kuhn, Loeb's railroad reorganizations include such famed roads as the B. & O., St. Paul, MOP.
In 1901 Loeb backed E. H. Harriman against Hill (backed by Morgan) in the struggle for control of the Northern Pacific. Jacob Schiff, dining in London dur ing the Russo-Japanese War, met Korekiyo Takahashi (now at 78 Finance Minister of Japan), and on the strength of an eve ning's conversation became Japan's banker, sold $200,000,000 of her bonds in the U. S. (biggest international loan prior to the World War). Since then K. L. has floated leans for Sweden, Holland, Austria, Argentina, for Antwerp. Paris. Marseilles and many another state and city.
Not ancient history, however, but mod ern instances concerned Kuhn, Loeb partners last week. Well could they foresee questioning about their financing of Penn-road Corp., of Paramount Publix. on whose board they seated Sir William Wiseman (last week absent in Europe) long before Depression made bankers common in the movie business.
The first to be called was Partner Kahn. Suave, precise, faultlessly attired, he told the Committee:
1) That Kuhn, Loeb's capital was $21,250,000.
2) That Kuhn, Loeb's assets shrank from $120,400,000 at the end of 1929 to $66,970,000 on Dec. 31, 1931.
3) That Kuhn, Loeb's deposits of $88,550,000 at the end of 1929 shrank to $29,100,000 on Dec. 31, 1931; that on the latter date it had more than $40,000,000 in cash & Governments.
4) That "the company buys and sells securities, accepts deposits . . . but is not in the business of soliciting deposits, and buys and sells securities for its clients."
5) That Otto Kahn and three other unnamed partners control the firm.