The Bon Homme County independent. [volume] (Tabor, S.D.) 1904-1913, 1911-08-24
Combinations In Banking.


Filled with that fresh enthusiasm
which not infrecuently cheracterizes the
newcomer into :the political field, Gov
ernor Wilson. OF New Jersey, In one OF
the addresses recently made to his fell
low citizens. ventured to hint very briefly
that we are threatened In this country
by combination of credit institutions.
and he warned US against the dangers Of
a combination Of this kind.
A New York newspaper that has greatly
admired the New Jersey governor'at once
took him to task for saying anything so
jejune, and ridiculed the idea that there
could be anything OF the kind. He really
must never again say anything so silly
II he expected seriously to be considered
as a presidential possibility. so far as
we know. the governor meekty accepted
his mentors counsel. ~
Speaking in Faneuil hall. Boston. on In
dependence day. President Charles w.
Eliot. OF Harvard, also counselled against
the dangers of combinations Of credit.
President Eliot has a way OF saying what
he thinks, and perhaps having no political
axes to grind, 1t will be- pretty hard to
make him keep still
Do such combinations exist already?
And IL SO, are they dangerous?
Observers OF banking In most Of the
large cities can not have failed to no
tice that I'm certain matters a group of
banks will always act together. In the
larger cities there may be several OF these
groups 1t Is rare-probably unknown
to see the banks all acting In concert In
handling a big financial deal. One MEM
Der Of a certain group will not come In"
10 any particular transaction unless all
the banks in the group are allowed to par
ticipate. II a particular financial enter
prise does not accord with the policy of
the leaders OF a group. 1t is useless to
seek to interest the other members-they
act in concert or not at all.
In the making Of loans the same prin-
ciple apparently applies. Neither the
standing Of the borrower nor the quality
OF his collateral counts for anything-the
loan simply does not fit In with the policy
Of the group.
II has been said that all banks In the
large cities are not In the same group.
IT should be said also that many banks
are in no group at all but preserve their
autonomy These banks are free to take
IN anything that offers safety and profit.
whether It benefits a particular group or
not. They can also make loans to any
body whose security is good.
. Another form of combination among
credit institutions Is to hamper the or
financial groups may combine to infiu-
ence a bank commissioners. and may even
dictate his appointment. 1t must be said.
however, that there is no apparent lack
of either state or national banks. There
is plenty of bank competition of every
kind. =
And we do not believe that the COM
bination of credit has proceeded TO an
present danger to the country we should
say, lies In the too free granting of credit
| extent as to be dangerous to anybody
| as yet The credit factories seem to
| be turning out a pretty large grist. The
rather than in the curtailment of It.
But the warnings OF Governor Wilson
and President Eliot are nevertheless time
| ly and should be seriously considered OF
all forms of combination and monopoly
none can become more deadly thin a COM
bination Of credit 70 ntvs or 10 with
hold the likelihood of cor hes re merely as
| It benefits or Injuries the investments, en-
terprises and interests of the nsttutions
controlling the granting OF credit-that
would put the country's industry and
| trade at the mercy OF the banks. should
any combination ever beoSms Dovsrful