Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-15
WALL STREET BANKS
Resources Represented by
Stupendous Figures.
BIG BANKING "CHAINS"
MORGAN AND ROCKEFELLER
LEADERS OF MONEY WORLD.
Power Must Be Rightly Used or the
Greatest Leader Will Lose
Power.
BIG BANKING "CHAINS"


Written for The Evening Star by Serene S. Pratt.
On the editorial page of influential
western paper / find these words: wall
street has for several years been gaining
control of the money supplies of the coun-
try. There was a great outcry made about
Cleveland's pet banks. and the deposit of
United States funds in them. but there is
ten times as much of the national funds on
deposit now in national banks. and most of
it is in Wall street banks. The same in
terests are now trying to force asset cur
rency and loans of government funds on
other than national securities. and if they
succeed their control of the business of the
country will be such that they can make
panic at will. Very few people doubt that
they would do so if it would help them out
in stock speculation"
In view of such statements this in rep
utable newspapers throughout the country,
for the quotation given is only one out of
many that might be cited, a plain, impair
tial account of the banks of Wall street
and the place they occupy in the mechan-
ism of the financial center may be of in
terest. and certainly is important.
Vast Loaning Power.
There are no more banks in New York
according to population than there are in
other parts of the country. In fact 1 be-
lieve that to Iowa belongs the distinction
of having more banks per capita than any
other state. But when comes to con-
slider the capital and resources of the New
York banks he is fairly staggered at the
figures While the sentences just quoted
from the western newspaper betray preju-
dice and ignorance. it is perhaps not
strange that there is fear felt at the money
power of Wall street. For the control of
the vast sums of loanable credit concen-
trated in New York unauestionably con-
stitutes great power. and that power
lirrIf tvr,v,n RI
best interests of the country if 1t should
pass into the hands of INSCRIPTIONS men
who would make panic at will if it
would help them out in stock speculation
But as it is the banks of New York are con-
servative forces. and they have more than
once stood between the country and panic.
There are more than one hundred banks
and nearly fifty trust companies in the city
of New York. More than third of these
located in the financial district to
which Wall street gives its name. Some of
them occupy magnificent buildings. One of
them, the Hanover, has recently con-
structed one of the two or three tallest
buildings in the world and another, the
National City. has purchased the custom
house in Wall street, and will erect thereon
mammoth bank building. The Wall
street banks the strongest and most
important in the city. The other institu-
tons are more local in character meeting
the special needs of certain sections of the
metropolis.
In addition to these Incorporated nstitu-
tons of credit, there many private
banking houses, several of them ranking
among the strongest in the world and hav-
ing important connections with London,
Paris and Berlin Moreover, some of the
large European bankers have representa-
tves in Wall street. Three of the big in
surance companies loan extensively on
stock collateral as well on real estate.
Some of the railroad and industrial corpo
ratiOns are at times large lenders of credit
Individual capitalists like Russell Sage.
and mercantile houses like the Arbuckles.
the coffee merchants, are in such command
of money that they have occasionally been
small factors in the loan market. More
over, as has been shown in a previous arti-
Gle banks and trust companies in the in
terror often make direct loans in Wall
street
Three of the banks viz the Bank of New
York, the Manhattan Bank and the Mer
chants Bank, We're established more than
one hundred years ago, the Bank of New
York dating back to 1874. Its charter was
drawn by Alexander Hamilton, who also
performed the same service for the Mer-
chants Bank. Oliver Wolcott who sue
seeded Hamilton as secretary of the treas
ury. became the first president of thu lat
ter bank, and Aaron Burr active in the
organization of the Manhattan Bank Thir-
ty-three banks and three trust companies
of New York were established more than
fifty years ago. which is striking testimony
to their stability. Age in a financial insti-
tuition is evidence of conservative manage
ment.
Banks Immense Wealth.
Thirty-nine national and seventeen state
banks are members of the clearing house
which is the backbone of the banking sys-
tenn of New York. These fifty-six banks
have capital stock aggregating S1O9 500 100
and surplus and undivided profits of S129-
O593o0 making the aggregate capital in
vested 390O0,U00 One bank has a capital
of S21.oJ0OC0 and a surplus of SO. S2s. 600.
Three other banks have capitals of $40 OOo-
oo0 each and two of these are soon to CON
solidate so to make another SO 600 COO
bank, with surplus of about $10OO0,C00.
Then there will be two banks in New York
whose net deposits will amount to more
than S1OJo000O0 each. The fifty-six clear
ing house banks pay dividends aggregating
more than SlOOoo0O year, and loan
nearly $10000G0 600 all the time During
most of the past four years their specie
holdings have exceeded those of the Bank
of England. Their aggregate transactions
amounted last year to the sum of $40 123-
1Si,3662 "a. and any one who cares to NAV
take day off and try to comprehend what
that sum means.
New York. together with Chicago and CT
Louis. are, under the national banking act
central reserve cities-that is to saw their
national banks. while obliged to keep cash
reserves in their vaults of % per cent of
their deposits. are entitled to receive as de-
posits one-half of the legal reserves of the
other national banks of the country AS
the banks pay per cent interest on such
deposits, there is a large accumulation of
banking funds in these centers The forty
four national banks in New York, accord
ing to the report made to the controller of
the currency on June 8, held S334, 400 200 of
the reserves of other banks and trust com
panies. This sum shows how great is the
volume of money of the rest of the country.
which is voluntarily on deposit In New
York Much of 1t is there to facilitate the
transactions of trade, but more of it is there
in order to get advantage of the Wall street
money market. Mr.. Cannon of Illinois
who is to be Speaker of the next House of
Representatives, was quoted recently as
saying that there need of financial
legislation at the next session, because
there would be trouble in business il
the Wall street banks would reduce their
loans of the deposits of western banks But
if the Wall street banks to pay per
cent interest on deposits of the western
banks il follows that they must loan these
deposits to their customers in order to make
profits. If the western institutions think
that the volume of Wall street loans should
be reduced their quick remedy would be to
withdraw their deposits. AS long as they
keep their reserves in Wall street, accept.
ing interest thereon, they are in the truest
sense partners in the Wall street loans
This is only another Illustration of the in
innate relations that exist between Wall
street and the country.
There have been several notable develop
ments in Wall street banking In the past six
Ono hoe aIr du haa,