The daily morning journal and courier., 1907-11-30
M0RGAH'S BANKING SYSTEM
FORMING A SYNDICATE
The skillful Management by Which a Panic Was
 Averted.

SaInefeu III bfl6 famous inner OI1ee 9t the corner where Wall street meets Broad The "Old Man" sitting at his broad desk by the window in the office on the corner said it would be neces- sary to raise a $25. 5.000.0 900 money pool -and to raise it quickly. Subscriptions were offered of so much, and so much, and so much. Then one of the cen ferees called several of the others out side and spoke for moment They returned and said they would agree, and so the pool was made, and before the trading closed $25, 5,00O,0O0 of Nor gan money poured into the stock ex- change to "save the situation.' The adjourned, to meet again in the wonderful library museum of the Madison avenue house and do some more saving, as circumstances aae- manded. And so it continued until the danger point was passed.
 The Morgan that Wall street has known in the last few weeks is that ef i a man controlling what seemed to bo l an exhaustless supply of wealth, which he poured forth at will into the banks, into the money market, into the stock market wherever a need and prop CT object turned up. in combination. Sometimes a syndicate was throwm together in a half hour for $25, ,0Ge.- 900 money pool, as in the case we hNve referred to; sometimes "the old mnn" himself appeared to turn oh the gold en stream. But always it was Morgan behind the situation, moving the pieces on the financial chess board at VIII. whether they were kings or pawns.
 Many have asked how he could do lit-how one man. no matter what his { lconnections or associations or his per- Isonal resources, could stem suchS q money panic as that which has just been experienced, and as lndidents to the process carry whole banking in- ! stitutions through their difilculties as Tiff they were no more than children, l to be picked up and lifted across brook that their elders could take
 a single stride. The answer comes
 the fact--not generally appreciated even if 1t is Enown--that J. R. Mor- gan, outside of his private fortune, is a bank all by himself entitled to fourth or fifth place among the bank ing institutions of New. York in point of resources, and with his private re- sources and those of the firm of y F. .i Morgan .& Co added in, aVbank that stands for more. free money in all
 probability than any bank in the United States.
 Of course all figures on the total aid from Morgan sources must be estia
 mates in the absence of such details las Wall street never vouchsafes to I the inquisitive public. But when one
 adds to the $20,000, ,000 put into the
 Trust company of America the Nor
 gan share in the $25,000,0 900 money pool and tho $7,0O0,0O0 money pool l that preceded it, and several millions ] more for the Lincoln trust and few millions for personal assistance stfcllfs as he has always given in time of pen- lie. to say nothing of the investment represented by the support given to the stock market in the days when l things looked blackest, and a total of $50, 0OO,00o would not seem a limit out of reason.
 l Yet for fair understanding of the things that have been done, one must
 bear in mind that the control of so great an amount of ready money has lgiven to J P Morgan the greatest in- vestment opportunity of generation, as we'll as the opportunity of bringing the American financial world through lone of the great crises in it's history. When a. bank is "helped" there are two methods that may be employed, lone is to have other banks shares it's lburden of drafts, as in the case where Ithe clearinghouse comes to the aid of Hits members; the other is to have it lpart with such of it's securities as may lbe available by way of private sale to the people who are lending the aid. N At such. a time the man whose as-
 sets are in a 'liquido state, that is, in cash or what is as good as cash has 1.-the double opportunity that came to }. lP. Morgan in the last two weeks lWhen man is important enough to lhave a deposit with J. P Morgan & Co.,, he does not draw on the account to pay his household bills. The funds lusually represent what may be term led an investment surplus, disposable flor the larger undertakings of a semi lprivate nature, such as syndicate par il lticipations and the like There is a
 double advantage about such an arr arrangement, both to the banker and < sdepositor, for if there is an attractive issue of securities on the carpet for Underwriting, the banker knows pretty
 accurately what amount of the money lof his clients will be immediately available for participation in the sym ldicate to be organized, while the oli-
 ents, on the other hand; are put in on Ethe ground floor because of this imrne-l
 diate availability of their spare cash. lit is the custom of the big houses on
 Wall sstreetSno to spend much time in lasking whether such an such q syndi- Icate participation will be acceptable.
 The allotment is made and the notice
 to the favored one reads: We have
 this day allotted to your account . participation of S-- in tho under
 writing of $- first mortgage bonds
 of the X. Y. 2. railroad. Kindly con- firm to us your acceptance of this al-
 lotment, and oblige." The confrna-
 ton almost always follows AS the
 bank of J. P. Morgan is obliged to
 make no statement either to the ccn-
 troller of the currency or to the state
 banking department one has to de-
 pend upon the understanding of well- informed Wall street men for an idea
 of the aggregate of It's resources. The
 belief is that the deposit accounts
 alone aggregate in the neighborhood Of
 $2eO. 100000, which would place it
 foremost among the biggest financial
 institutions in the eountry.--Nsw York lTriYaae