Newark evening star and Newark advertiser., 1912-12-19

securities and he thought that in th'
last ten years those securities hat
all been handled on a commission
basis.
New Haven SECURITIES.
Mr.. Morgan thought the New Ha
ven. too, had issued securities no
handled by Morgan & Co. in the last
ten years.
Mr.. Untermyer read from the pa.
pers furnished by Mr. Morgan the
proposal from the, Morgan house ac.
cepted by the New Haven. Morgan
& Co. proposed in return for being
made sole fiscal agents for the New
Haven lines 10 loan the New Haver
road 30 per cent. of the agreed sals
price of it's securities at a reason.
able rate of interest" and to give
thereon the benefit Of counsel and
advice,
This propose, was accepted Jan
uary II, 1911, by the Maine Central;
December 2s. 1910, by the Boston and
Maine. and December i9, 1910, by the
New York, New Haven and Hart.
ford, the acceptance in each case be-
ing signed by Charles S. Mellen-
Accounts of stewardship"
Mr. UntermyerA looked at the re-
ports Mr.. Morgan presented and
asked if they we're not arguments
by the voting trustees in behalf OF
their good management" Mr.. Nor
gan replied that they were the re-
ports of the trustees, and Attorney
Lindabury interposed to say they
were accounts of the stewardship OF
the voting trustees"
Don't you think that interstate
corporations should be entirely free
to sell their securities in the oper
market, and not be tied up to one
firm, no matter how just its
methodist" asked Mr.. Untermyer.
mo, not necessarily" replied Mr.
Morgan. Taking up the Southern
railway situation. he said he saw nc
objection to directors appointed by
himself, as a member of a voting
trust, entering into a fiscal agree
ment with his own firm. Mr.. Inter
meyer asked If Mr.. Morgan did not
think securities of interstate corpo-
rations should be sold-in open com
petition, as were United States bonds.
Plenty OF Competition.
!. Il do not" said Mr.. Morgan. He
said there was plenty of competition
for railroad securities.
Mr.. Untermyer asked where there
could be competition between the
New Haven road and Morgan & Co.
in the sale of New Haven securities.
'They may want great deal more
for them than we think they are
WORTH said Mr.. Morgan.
do you think 1t would be better
for the railroad to be able to offer its
securities to another banking house?''
mo, 1 do not returned Mr.. Nor
gan. He added that the position of
the banking house often had much to
do with the stability and success Of
corporations. I'll
There's another point about IT, he
added. "You must remember that all
securities sold and issued are not al
ways good, and when there is re-
sponsible agent there is moral
strength behind them.' I
Security Holders Pay Losses.
Twill you name any instance of a
railroad bond proving bad where
your firm mas had to pay the loss"
asked Mr.. Untermyer.
II can't remember any case, but l
know there have been several" said
Mr.. Morgan.
"All Of that comes out of the Sc
curity holder?"
mo, out of the property"
But that eventually comes out of
the security holders" suggested the
attorney. Look over the whole his
tory of the railroad business and see
If you can find one case where the
banker has had to stand the loss"
well, rye had good deal of rail
roading-" interrupted Mr. Morgan,
with smile.
Yes; that's swhy I'm asking you
about it" rejoined Mr.. Untermyer.
Mr.. Morgan said he could recall no
special case.
Mr.. Untermyer turned to the fiscal
arrangement with the United States
Steel Corporation.
Olun you name lne eHtiie DOdI u
of directors of the United States Steel
Corporation asked Mr.. Untermyer.
II think l passed on it.
But didn't you hand out a slip
containing the names?"
Passed Upon Steel Co. Bond.
IF passing on board is naming it,
am quite willing to assume all the
responsibility, said Mr.. Morgan.
But didn't you say who should
go on and who stay OFF," persisted
the lawyer.
Il possibly did the latter" replied
the financier, and a laugh swept out
from the crowd
Mr.. Morgan said he had not passed
on ali who went on the board of the
steel corporations but said no MEM
bers had ever gone on the board
against his protest.
Mr. ITntermyer asked If Mr. Nor