The Washington herald., 1911-11-04
HOLDING COMPANY
TO End EXISTENCE
National City Now Seeking
to Obey the Law.
MADE TROUBLE IN CABINET
wickersham and MacVeaSh Clash
ed Over Legality of Statute
which Big Banking Corporation
Is~Accused of VIolating-Direc-
tors Prominent Financial Men.

New York, Nov. 3.-The National City
Company, the $4,000, 900 holding corpora
ton for stocks and other securities, or
ganized last June by the National City
Bank, has brought to a semi-climax the
controversy as to the legality OF its ex-
Istence between Secretary MacVeagh and
Attorney General Wickersham, by be-
ginning to sell its holdings Of bank stocks
in advance of the decision of President
Taft
Statements to that effect were made
here this afternoon and confirmatory dis
patches were later received from Wash
ington.
Through the National City Company
the National City Bank controls over one
hundred banks, and thus. according to
Attorney General Wickersham. violates
the national banking laws, under. which
national bank is prohibited from main
tanning branches or holding the stocks
of another bank Secretary MacVeagh
has insisted that the National City Com
pany does not contravene these laws.
President Taft is acting as y umpire in
the dispute and his decision Is expected
within a few weeks.
Willing to Meet Objections.
BY selling its bank stocks, it is pointed
out, the company is putting itself in a
position to be able to tell the President
that 1t has met the objections Of the
Attorney General The company will re-
tain its holding in nonbanking corpora
tions. The sale Of stocks has been in
progress for several days. The company
is understood to have disposed of all its
Philadelphia and Chicago holdings and
| part of its stocks in Boston and several
Western banks. One of the most impor-
| tant holdings of the company is a block
| of from one-third to one-half the stock
of the National Bank or Commerce. 1t
is said that this block will 60 to a group
Of men in the National directorate.
The action Of the National City Com
pany is regarded as Of far-reaching i'm
| portance, inasmuch as there are at least
600 security companies in the country
which are owned by national banks or
their stockholders. The First National
Bank Of this city has one and the Con-
tinental and Commercial Bank of Chicago
another. but their security companies are
said not to own stocks Of other banks.
Subject of Inquiry.
| The National City Bank was the sub
ject of an inquiry by Congress soon after
its organization last June, but the matter
was left to the financial and legal de-
rartments. At that time President Van
derlip explained that the purpose Of the
organization was TO do some things the
bank might not do. The institution has
unlimited resources and in its directorate
were some of the most powerful men in
the financial world. The complete list Of
the directors follo0s:
]. ogden Armour, Francis NJ. Bacon.
Cleveland H. Dodge, Henry c. Frick,
( Joseph P. Grace, Cyrus H. Mccormick,
Edwin S. Marston, Gerrish H. Milliken,
]. P. Morgan, jr., Stephen S. Palmer.
| George w. Perkins, James H. Post, NJ.
Taylor Pyne, William Rockefeller. Jacob
! II. Schiff, Samuel Sloan, William Douglas
Sloane, John W. Sterling. James Stillman,
Henry A. C. Taylor, Moses Taylor, P. A.
Valentine, and Frank A. Vanderlip.
Growth Was Rapid.
The growth Of the National City Com
pany could not be less rapid, 1t was
pointed out, than that Of the National
City Bank, whose surplus increased from
1886 to 1911 from s2,OOO,oo0 to $34, ,7O5, ,OOt
and its deposits from s1o,66S, 100 to $685..
9s6,7O
| Wall street did not believe to-day that
the National City Company will termi-
| nate its existence merely because It I;
/ not permitted to hold bank stocks; or
the contrary, the financial district be.
lieves that the company will continue tc
\ operate as a speculative concern, on the
basis of its hldings in non-banking cor
porations, and ultimately become the
greatest organization for the accumula-
ton of money that the world has evel
known.
Its capital is only SO. .oOO, 900, but ever
If the company had been amenable tc
the banking laws in respect to loanine
ability, it would have loaned to four