The daily banner. (Cambridge, Md.) 1897-2008, 1912-12-11
5 MEN CONTROL
$4Oo,0O0,0o0
Probers Hear How Morgan In
tiuence Helps Banks.
GET MONEY FROM COUNTRY

New York Clearing House Official Ex.
plains That High Call Rates Are to
Get Money Needed For Speculation.
Washington, Dec. 1.-THE first tes.
timony regarding concentration of
credit was heard by the house bank
Ing and currency committee in its in.
Vestigation of the so-called money
trust.
w. E. Frew, president of the Corn
Exchange bank, of New York, and
chairman OF the New York clearing
house committee, occupied the stand
and was put through a grilling exami-
nation by Samuel Untermyer, counsel
for the committee.
Through Mr.. Frw Mr.. Untermyer
put into the record evidence of trust
agreements by which five men control
two of New York's greatest financial
institutions. the Bankers Trust COM
pany and the Guarantee Trust COM
pany, with aggregate deposits of near.
ly $400,000,0O0.
The Bankers Trust company, Mr.
Frew said, was controlled by H. P.
Dawson, George B. Case and Daniel
G. Reid; the Guarantee company by
H. P. Dawson, George F. Baker and
William Porter
These men hold and vote all of the
stock of the companies except enough
to allow board of directors to quail.
lily, and under the trust agreements
have absolute authority over the af.
fairs Of the companies, even to the &C.
Qu1sition or merger Of other institu-
tions
Mr., Untermyer also secured from
by which money was attracted to New
York when small country merchants
and farmers demand funds for the
moving of crops or the accommoda-
ton of their business affairs.
Mr.. Frew said that the money was
needed on the New York stock ex-
change for speculative purposes; that
country banks kept large sums on de-
posit in New York, and that when
the home" demand for money be-
came strong the New York price of
money rose, and the country banks, in
order to gain the big interest charges,
put their money out in call loans Oh
the New York stock exchange. All OF
these loans are based on stock ev.
change collateral, Mr.. Untermyel
ELECTED from the witness
When Mr.. Untermyer endeavored TO
attribute the enormous growth Of the
Bankers Trust company to the infiu-
ence of j. P. Morgan & Co., Mr.. Frew
objected, and the lawyer grew bitter.
He finally pinned the witness down to
the admission that the Morgan inf1u-
ence" might have aided the company.
Mr.. Untermyer connected up Messrs.
Dawson, Case and Porter with the
Morgan company.
Mr.. Untermyer questioned Mr.. Frew
rather sharply as to how he classified
the cost of collecting out-of-town
checks. Mr. Frew said it was loss"
but the lawyer insisted upon calling
1t an expense"
What you want to do is to make
the customer pay the expense of con-
ducting your business, after he has
given you the use of his money" Mr..
Untermyer observed.
"The Morgan influence" formed the
basis for most of the days session.
Mr.. Untermyer first took up the Bank
ers' Trust company. Mr.. Frew said its
was held by trust COM
mittee. composed Of H. P. Dawson,
George B. Case and Daniel G. Reid.
Mr.. Dawson is associated with J. P.
Morgan & Co., and Mr.. Reid is di-
rector in the United States Steel cor
poration. Mr.. Frew said the three
uen administered the affairs of the
company, elected its board of directors
and controlled its operations.