New-York tribune., 1908-02-26
FIRST NATIONALS PLAN
BIG HOLDING COMPANY,
Proposes s1O,OOO,OOO Concern to
Take Orer Stocks and Realty.

George F Baker, president OF the First Ma
tionaI Bank has sent a circular letter to all tle
| hanks stockholders asking them 10 assent 10
| the formation Of a $1O,oo0.0N holding company
! 10 take over and administer the real estate Sc
c1Irities stocks and other property OF the DahA-
| on receiving the assent Of the stockholders the
! hank nurposes to declare an extra dividend OF
100 per cent on It's S1000OOOO capital s'ocA'
which dividend is 10 he applied to the payment
| of the capital stock of the holding company
The name Of the new company is TO be the
First Security Company The circular. which
fully explains the banks plans as to the holding
| company is as follows:
II is deemed to be for the interests OF stock
| holders of this bank that a security company :.
such as has proved advantageous IN the case u
several other banks. should he orgaliztu L,i c,.e
r1IrDOse in part of tranSaCJlng TOR us patrons t
tain lines OF profitable business. which. though
often transacted by bankers, are not expressly
included within the corporate p(-ers VI
rional banks Among these are the actuIi4Hs
and holding of real estate securities stocks ana
To mis- end i is desired 10 secure the assent
in writing of our stockholders to a plan OF
organizing a security company under the name
of the First Security Company, with pald up
capftaI of SlO.000.000 the stock to be issued 10
and held by six trustees, who shall be the preSl-
/ dent vice presidents and the cashier OF @liLe @
bank These trustees shall exercise the powers
Of ownership Of the stock shall elect the S<iIIe ~
hoard of directors as that of the bank. shaIl
, collect all dividends and pay the same over l"
the bank for immediat distribution 20 us SHARE
holders who have assented TO this plan
Irpon receiving the assent % the stockholders
the bank purposes TO make speclaI dNiuehu oI
100 per cent (S10,000.000), TO be received py tie
trustees and to be applied to the payment or the
capital stock Of the security company. whlch
/ stock shall be held by the trustees for the ben
eft of the shareholders of the banK assehths
10 this plan.
The formal agreement for incorporation. as
sent etc has been carefully prepared by our
aT a~rF
( who have assented and recommend your assent assem-
thereto Your prOpOrtionate share or the Dank S
assets will be in wise changed
The First National Bank of Chicago, of which
James b Forgan is president, recently formed a
! similar holding company to administer IT'S stocks
and bonds and called it the First Trust Com
many. 1t was the opinion OF bankers yesterday
that the New York company had been patterned
largely after the Chicago company The direct
ors of the First National Bank. 1t is known.
| have for more than a year had under cOnsidera-
tion the formation of some such company TO
take over the banks large stock and bond ac-
count This amounted on December > TO 500 =
2o1. 76f a., and was carried in the list Of the
banks assets under bonds. securities. etc" ON
the same date the bond and stock account of the
National City Bank amounted to S33. T31 30 2o.
The national banking law allows banks TO own
bonds but makes no provision for the ownership
of stocks or real estate other than the banking
house While there is clause I'm the laws
which expressly forbds a bank to own stocks.
the fact that stocks are not mentioned among
the securities in which national bank may in
vest its funds has been interpreted by the courts
as making the owenrship OF stocks illegal
Charles A Hanna national bank examiner.
was asked yesterday whether any pressure had
been brought to bear the First National Bank
by the Controller of the Currency. which had re-
! suited in the decision the part of the direc-
tors to form the security company and thus
segregate the banks stock and bond holdings
lie denied any knowledge Of such action. but
nued nm four