The Birmingham age-herald., 1912-12-20

was led by Mir Untermeyer into dis Icussion of the various banks in whicl members of the firm of J. F. Morgan i& Go. appear as directors, You do not watch the details as tt the management of any of these banks do you?'i he asked.
 l "Who attends to the questions of man agement that come Up with respect U
 these banks with which You are identified in your fiim?"
 Amy one of the firm who happens t
 know. about that particular business"
 You are doing everything you can t protect the prosperity of these institu tions in which the members of your firm
 are directors are you not?p
 We do not bother ourselves mucf about that They look after themselvesa | Why do members of your firm, in some | instances two members of your firm, ano in some instances three members of youl firm go on the board?"
 Because we have a large interest tc protect.
 Tn the, proteetions of that large inter 1 est, do you not look after the banks al I all2 asked MT. untermeyer.
 Not. to any extent"
 Tt takes the time of your partners does it not?"
 Yes. have already remarked on that | a great many times.
 But still they remain there, do they not?''
 "They do"
 May ask what they are there for, tc protect your interest?" | That is what they are there for"
 Lengthy Discussion of Voting Trust l The general subject of the power and privileges of voting trusts holding the stock of corporations elicited a lengthy ] discussion, in the course of which Mir. Untermyer got into the records state- ments regarding a series of voting trusts held by members of the firm of Morgan & | Co. for years.
 With respect to all these voting trusts the voting trustees in all these cases have power have they not, and it is their duty | to name the directors who shall conduct the company" he asked. "Yes, sir" answered MT. Morgan. And those directors in turn name the | officers?'
 Yes, sir"
 Can you name any instance in which l the board of directors thus named in | these various voting trusts has undergone any considerable change after the expir- alton of the voting trust from the way In | which it was constituted under the voting | trust except that where deaths occur the vacancy were filled?'
  You think they generally continue along the same board?" "Yes. They are generally pretty well l satisfied with what they do.' "Who?" asked Mr. Untermeyer. "The stockholders, sir" Have you ever known an instance | in the history of corporations in this country where the stock was largely scattered in which the stockholders, however dissatisfied, have ever suc- ceeded in procuring a change of man. agement?
 T do not recall any at the mo- ment.H
 "Is it not true that in this country, unlike other coun tries, 1t is difficult to get the stockholders to take any &C., tive interest in their company? That is very true. That is the req son why a voting trust is so desirable, . said Mir. Morgan. That is the reason for this paternal- ism on the part of the financial gen. tlemen who reorganized the company" asked the lawyer. That is the reason why, in reorgan- izing company, we employ that meth ok-so that it can be protected said Mir Morgan.
 Railroad Activities of Firm The activities of J. P. Morgan & Co.,, as fiscal agents for railroads and other interstate corporations formed the basis for another lengthy phase of the ex- , animation. MT. Morgan placed in the record the agreements by which the firm handles the securities of the New York Central and the New York, New Haven and Hartford railroads. The general policy of private banks hand l ling big issues of securities also was taken up.
 <F n state railway companies are in vast sums, are they not, running into the hundreds of millions of dollars year." asked Mir. Untermeyer.
 "Yes sir" answered Mir. Morgan.
 Do you not think it would be en- tirely feasible that securities of such corporations should be openly marketed and should be sold by competition, just as securities of the United States gov ernment and state governments and city administration and municipal bonds are sold?'
 "I do not" said Mr. Morgan.
 Do you not think there should be some competition for them between the oank- ing houses or between the original pur- chaser and the company
 "No, l should think not"
 Do you not think the company should be in a position to have other banking houses compete for these securities and perhaps get a higher price than you might think they were worth?" MT. Un- termeyer asked
 "I have no doubt that could be done occa sionally but it would not be often, said MT. Morgan.
 Do you not think it ought to be done--that they ought to be open to that field?"
 q do not; not for the interests oe the company"
 There is another point about it" vol unteered Mir. Morgan, and that is this:
 You must remember that securities that are issued and sold do not always prove good. I do not say that often happens. but it sometimes does"
 "The banking. house assumes TO le- gal responsibility for the value of the bonds. does t?" asked MT. untermeyer.
 NO sir; but it assumes something else that Is still more important, and that is the moral responsibility which has to be defended as long as you live
 will you name any instance of rail- road bond issued by your firm that proved bad, where the property was reorganized and your company personally put up any money to make the bond good, that it did. not get back?"