The Washington times., 1910-03-18
MORGAN At HEAD
Of BANK SCHEME
Plans to WreSt Central and
South American Trade
From Abroad.
COMBINE PLANNED
WITH OIL TRUST
First Stroke Is to Ask Con
gress fo- Right TO Estab-
lish Branches.

liSh Branches.
NEW YORK, March 1S-The Stand
ard OIL and Morgan interests have COM
bined in a colossal scheme TO wrest
from England and Germany the hank
ing business Of Central and South
America.
The project comprehends the estab-
lishment OF complete system Of banks
in the southern republics, to be opcr-
ated in conjunction with those of this
country.
II the scheme as conceived I'm Wall
Street is worked out il will mean. for
one thing, that S5.O00.00O which now
goes to England and German banking
houses every year merely for exchang-
ing money in connection With trade
transactions between the United States
and Central and South America will be
saved to this country. It will also open
up a tremendous general banking busi-
ness by which this country viii i'm
measurably profit
Vanderlip Working Abroad.
Frank Vanderlip. president Of the Ma
tional City Bank-the Standard oil
bank-is abroad. where he is looking
into the advisability Of his bank enter
ing into the ambitious scheme to estab-
lish the system Of American banks I'm
the South American republics. Il was
learned yesterday that the National
City Bank mas been approached by
powerful interests In South America
=. Pierp3nt Morgan, head Of the giant
merger of trust companies. recently
formed on. Of the Guarantee. Fifth Ave.
nue. and Morton Trust Companies
$lfterNN COmbinatlCn-iS iE Italy. and
Henry T. Dawson, who engineered the
trust merger, reaches London this week
Wall Street has heard that Mr. Moran
and Mr.. Dawson, who is Mr. Morgan
chief adviser. are engaged in the same
purpose as Mr. NandcrliD.
Before sailing last week for London.
Mr.. Nanderlip allowed It to be known
that he intends having a conference
with AiT- Morgan IN Rome. He gave
no iutlmatiCn as TO the reason for the
conference. but Wall Street has now
made up It's mind that II is TO consider
the banking system n the TWO southern
republics.
Want Money Here.
For a long time Wall Street has real
ized the urgent necessity Of a banking
system in South America which viii
keep in this country money which is
now diverted to Germany and England
Under the prevailing system q Is I'M
possible for an American importer 10
trade directly with Central or South
American growers. The money circulat-
ed in every business tran=action must 20
through either German or English
banks, which have branches spreading
nTIT ngfh the rlTrrh1|ez
The foreign banks demand one-half OF
per cent FOR the simple process OF ne
Eotiating thiS exchange and. with other
expenses, such aS cable tolls. the cost
10 the American importer is rLn up 10
/ per cent. An idea Of what this means
TO the American importer may be gained
when II is known that the volume of
trade importation from Central and
South America to this country every
wear approNimates $2.Ooa0,oO0. The Am
erlcan importer has 10 pay ! per cent
on ali of this.
Under the national banking laws il is
impossible for any American bank TO
have foreign branch, and this has been
an obstacle up TO this time IN the devel-
uPment OF the plans which has been
quietly under consideration in Wall
Street for the last few months. Wall
Street has been figuring on how TO cir
Cumyent this legal restriction.
May Amend Law.
The bold scheme which is now cor
sidered is tc have the bankers of this
country make a concerted effort 10 have
Congress amend the existing law SO
that they will be able 90 establish the
banking branches in the South American
country, and to prevent the EngIisa
and German banks from getting the ex-
change toll
IL this does not succeed, the Cnlv al
leTn1f1ER LETT n hlu1-n-c
bS 10 establish a system Independent CT
the banks, 10 be backed by the capital
OF J. PierponJ Morgan and the Standard
Oil That this has oecn seriuIslv taken
up has been definitely learned by the
American. Wall Street would nrefe-
publics be an integral part of the hanks
mere, but Il this is impossible of ac-
comoiIshment the other idea is 10 bs
pushed forward.
To Increase Trade.
In the consideration of the new move
the National Bank Of Commerce has
figured. This bank is one Of the Nor
gan system.
In the argument which will be used
with Congress TO obtain an amendment
Of the present restrictive law it will he
pointed out that with the completion OF
the Panama Canal, five years hence. the
rrade with Central and South America
VIII tremendously increase While the
United States now imports 500 ON O0o Of
/ coHee alone from BraZii. the facilities
afforded by the Panama Canal will
enable shippers to Eet coffee here at
nluch less expense That will naturally
mean an increase of trade
The United States, within the last few
years, mas used more than 30 per cent