The Birmingham age-herald., 1911-08-04
BANK REPORT IS SENT 10 MACYEAGH Believed Security Company
 Idea Is Illegal BANK MUST BE UNIT Attorney General Wickersham Con- ducting Investigation Which May
 Affect National Banks
 Over Entire Country
BANK MUST BE UNIT

] Washington, August s.--Attorney Gen eral WickershaIn's report upon his in- oury into the relations of the National City bank of New York with the recent ly organized National City company was transmitted to Secretary MacVeagh to- day. It probably will be day or two before Secretary MacVeagh reviews the findings and a week or more before he decides what action, if any, the treas- ury department shall take.
 It was learned today that the banking interests are prepared for an adverse de- cison, and complete understanding with the government will be reached without litigation. While the bankers, in organ izing the company, acted with the advice of their lawyers, they are said to be willing to comply with any demands the treasury department may make.
 As Secretary Macveagh's final decision will outline the governments attitude to- ward concentration of control or owner- ship of national banks by the security company method a situation which af- fleets banking interests the country over,
 
 ernments course will be laid out with the greatest deliberation.
 That the security company" idea has grown to national proportions was verified further today by inspection of lists of na- tional bank stockholders which are on file with the comptroller of the currency. Government officials admit they were un- aware of the situation until the Attorrey
 Generals investigation of the National
 City company brought it to light. Approved By Treasury Formation of the First Trust company of Chicago. said to be the Chicago First
 National Banks Security company. was approved by treasury officials, tacitly at least when James B. Forgan conceived 1t several years ago. This was admitted at
 the treasury department today. The organization of the First Security company by the First National bank of
 New York followed soon after. Millions | of dollars in national bank stocks are en- | twined in the organization of these three
 great holding corporations and the 800 or
 more smaller ones which have been dis
 covered.
 One plan for associating already sug-
 rested proposes that the stocks of the
 security companies" be available to
 any purchaser
 At present one must own stock in
 the bank which has formed the "se
 curity company In order to hold stock in the latter. In many instances the stock of the security companies havo be. n paid for with cash dividends upon
 bank stock, and sale of the bank stock has carried with it the transfer l of the security company" stock. | Attorney General Wickersham is said | to have held that such restrictions con meet the security compa nies' so close | ly with the banks as to bring the,1 within a transgression of the national { bank laws, providing that each national bank shall be an integral unit and thd,
 none of its capital stock shall be held directly or indirectly b., another na- tional bank or by any device created | for that purpose.
 | If Secretary MacVeagh's decision <
 made up on the Attorney Generals find iings Q readjustment of the holding ol
 stocks of many of the greatest na. tional banks of the country may b; necessary.