The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-08-04
BANK CONTROL
BY NEW ME- ETHOD.
IS UNDER FIRE
Attorney Generals Report
on National City Company
Placed in Hands of Sec.
retary MacVeagh.
BANKERS EXPECT
ADVERSE RULING
Government Officials I'm
aware of Extent to Which
Security Company"
Idea Had Grown.
BANKERS EXPECT
ADVERSE RULING

NM ney-General Wickersham s. re
Wv port upon his inquiry into the
relation of the National City
bank of New York with the recently
organized National City company was
transmitted TO Secretary MaeNeagh to-
day
1t was learned today that the bank
verse decision by the secretary of the
treasury and that complete under
standing with the government will be.
reached without litigation. While the
bankers, in organizing the company,
acted upon the advice of their lawyers,
they are said to be willing to comply
with any demands the treasury depart
ment might make
AS Secretary MacVeagb s decision
will outline the government attitude
toward concentration of control of ma.
tional banks by the "security com
pany' method. there is every indica.
tion that the government course will
be laid out with the greatest delib-
Grafton The whole question may be
discussed by the cabinet before an
nouncement is made.
Surprising Situation.
That the "securitv company idea
has grown to national proportions was
verified today by inspection of lists
of national bank stockholders on file
with the comptroller Of the currency.
Government officials admit that they
were unaware Of the situation until the
attorney generals Investigation of the
National City company brought it TO
light.
The formation of the First Trust
company of Chicago, said to be the
Chicago First National banks "se-
curity company was approved By
treasury officials, tacitly, at least,
when James B, Forgan conceived it sew
the treasury department today. The
organization of the First Security com.
pany by the First National bank Of
New York followed soon after.
Stocks Entwined.
Millions of dollars in national bank
stocks are entwined in the organization
of the three great holding corpora
tions and the 300 or more smaller ones
that have been discovered.
If Secretary MacN Neagh acts upon
Attorney General Wickersham' find,
ings, treasury officials will share with
the bankers the problem of dissociat-
ing the "securlty companies from the
banks,
One plan suggested proposes that the
stock of the security companies be
available to any purchaser. AT pres
ent one must own stock in the bank
which has formed the security com.
pany' IN order to hold stock in the
latter. In many instances the stock
of the security company has been
paid for with cash dividends upon bank
stock and sale Of the bank stock has
carried with it the transfer of the
security company stock,
Clearly Illegal.
Attorney General Wickersham Is said
to have held that such restrictions
connect the security companies so
closely with the banks as to make them
illegal
His ruling is said to follow close
upon the lines of a decision of the
supreme court which department of
Justice officials say interpreted the
national banking law to mean that each
national bank shall be an integral
unit, and that none of its capital stock
shall be held directly or Indirectly by
another national bank or by any device
created for that purpose,
II Secretary MacVeagh s decision is
made upon the attorney general find
iugs. readjustment of the holdings Of
stocks Of many OF the greatest national
banks of the country may be neces
SnrV