New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-07-15
is IT A "M0NEY TRUST?
Department of Justice Looking
Into National City Company.

Washington, July 1.-The Department
of Justice is inquiring into the National
CITY Company, the S1O,OO0,O0O security
corporation recently formed by the Ma
tional City Bank of New York, TO ascer-
tain Il it will be in violation of the fed
eral statutes as bank trust or
money trust" Attorney General Wick
ersham is awaiting complete informa-
ton before determining on action.
The courts have ruled against one na-
tional bank acquiring the stock OF an
other. Government officials consider
that the National City Bank circular of
June 2S contains more or less taclt ad-
mission that the National City Company
means TO engage In business in such
stock3.
When the National City Company was or
,anizad two weeks ago. by the directors
of the National City Bank. It was common
~ taken for granted that it would prove a
competitor of bond and brokerage houses.
few DAYS later, however. it was learned,
ON what should he good authority, that 1t
had been formed for a different and much
more important primary purpose, as a step
I'm the direction of strengthening and con-
solidating the so-called money power of
the country through the concentration OF
the bank stock holdings of the National
| City Bank interests.
II was believed that the new company
would take over the large stock interests
Of the National City Bank inasmuch as the
1 ,aaff nfNql Ia 1ls
7 has no power TO deal I'm miscellaneous
stocks or bonds. The circular issued on
June % invited National City Bank stock
holders to acquire a beneficial interest In
the new company to the extent of two
hfths of the par value OF their bank stock
holdings The circular said that the plan
! had been TO establish a corporation so
organized that it may make investments
and transact other business which, though
often very profitable may not be within
the express corporate powers Of national
| bank"
The National City Company was designed
! to be under the absolute and perpetual con-
| troll of the National City Bank, the capt.
tai stock Of the new corporation to be act
ually held by three trustees. who shall be
| officers or directors Of the bank" the first
| trustees being James Stillman, chairman OF
the board Of the bank: Frank A. NanderIp,
| president and Stephen S. Palmer, a direc-
| tor.
! 1t was pointed out that similar arrange
ment had been made by the First National
| Bank in the case of the First Security
| Company. AS far back as 1898 the National
| Park Bank. through interests connected
! with It. began a policy OF buying large in
! terests i'm other local banks. Since then
| there have been several other transac-
lions Of tho same sort here. The National
| city Bank began similar movement about
the same time, and has been gradually OBJ
! tanning control OF a prosperous chain of
! banking institutions IN this city Its inter
| ests have also been spreading for years
! into many banks throughout the country
and in Europe and South America.
! Through the agency of the National City
! Company II was believed that the bank in
terests could retain for years their con
! troll % these widely scattered banking in
! SfitutiOug