The Washington herald., 1908-03-18

holdings OF banks Of such securities are
not shown in more recent reports. These
banks have either established connections
with trust companies, or have organized
inside trust companies as a protection
and convenience. The bank and trust
company, though different officers. will be
found welded closely together In its direc
torates. These companies afford a con-
venient cover for the banks in many
ways. Their securities can be shufiied
back and forth. The trust companies can
handle securities which the banks can
not touch. They can underwrite bonds
and float loans for which the banks
could not openly stand sponsor.
Foresees Great Bank Trust.
There are twenty-three directors OF the
National City Bank STANDARD OD: there
are thirty-nIne directors OF the National
Bank Of Commerce CMorgan). Examina
ton of the directors show that the two
groups are being knit together in bust
ness associations. suggesting their future
identification.
Subject TO differences which may arise
between powerful individuals OF these diff
ferent groups. resulting In occasional col
iision. they are practically a monopoly.
and, as far as the public IS concerned.
practically one group The business part
ner Of the head OF the Morgan group is
found on the directorate Of the chief
financial institution which heads the
Standard oil group. One OF the directors
OF the National City Bank STANDARD Old
is a member of the board Of directors Of
the principal financial institution in the
Morgan group
Fourteen Of the directors of the Ma
tional City Bank are at the head OF four
teen great combinations. representing IS
per cent Of the capitalization OF all the
industrial trusts Of the country. The rail-
road lines represented on the board OF
this one bank cover the country like a
network.
Capitalists Flock Together.
1T was inevitable that this massing OF
banking power should attract 10 itself the
resources Of other banks through the
country. Capital attracts capital II in
spires confidence. II appeals 10 the irnagi-
nation. Added to this. the forces back of
this controlling group could offer tempt
ing interest rates. and finally. the Federal
legislation would almost seem TO have
been enacted to augment this power.
But one result could follow. Floating
the stocks and bonds in over-capitalized
transportation, traction, mining. and in
dustrial organizations does not create
wealth. but it does absorb capital.
Through the agency Of these great groups
hundreds OF millions of dollars OF the
wealth OF the country has been tied up.
other hundreds OF millicns have been
drawn upon TO supply these great specu-
lating groups in their steadily increasing
Wall street business.
Commercial Banks VmnishinE.
The plain truth is that legitimate COM
mercial banking is being eaten up by
financial banking. The greatest banks OF
the financial center OF the country have
ceased to be agents Of commerce. and
have become practically agencies Of pro-
motion and speculation. BY merging the
largest banks, trust companies. and in
surance companies, masses Of capital
have been brought under one manage
ment. to be employed, not as the servant
Of commerce. but as It's master: not 10
supply legitimate business and TO facili-
tate exchange. but to subordinate the
commercial demands OF the country upon
the banks. 10 call loans in Wall street.
and 20 finance Industrial organizations.
always speculative, and often unlawful in
character.
with this enormous concentration OF
business it is possible to create artificial
| " periods of prosperity and periods OF
panic. Prices can be lowered or advanced
at the viii of the system. When the
| farmer must move ,his crops. a scarcity
! OF money may be created and the prices
/ lowered. When the crop passes into the
control of the speculator, and artificial
stringency may be relieved and prices
! advanced. and the illegitimate profit
raked off the agricultural industry may
be pocketed in Wall street"
Not Worried by AIdrIch Coup.
Mr.. la Toilette had intended the crush
/ ing weight of his speech for the railroad
bond feature OF the AIdrich currency bill
drawal by Mr.. Aldrich made an emerg-
ency for the Wisconsin Senator He de.
cided to meet 1t by following as nearly as
he could the text of the speech he had
planned. What he had to say on the
point. he observed, was rendered more
pertinent, If possible. by the action Of the
/ Finance Committee. taken to-day" Lead
| ing up to the bond provision OF the cur
rency bill. Senator La Toilette began
with a discussion of railway financial
| operations, saying:
THE lust basis for transportation
charges is well settled. AS a common
/ carrier, the railroad company is entitled
to charge sufficiently high rates 10 pay
operating expenses and a reasonably fan
return upon a fair value Of the property
which it used for the convenience Of tht
public That is the standard, and the
only standard, by which to measure rea-
sOnable rates The Interstate Commerce
Commission has urged II upon the atten-
/ ton Of Congress, and common justice tC
the public interests demand it.
shows Effect of Bond Section.
To-day we are confronted with th5
astounding proposition that Congress
shall hold out legislative inducement
for the exaction of transportation charge:
which shall net a continuous 4 per cent
| dividend on railway capitalization. 1t is
idle to say that this measure is limited
in its scope; that il has reference simply
to limited issue of railway bonds as
| security He Is blind, indeed, who does
not see the ultimate effect of a propo.
sition which. directly or Indirectly. raises
standard for the payment Of a fixed
dividend upon railway capitalization
without regard to the value OF the prop.
erty. The certain effect of this action by
I Congress is 10 stimulate every railway