The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-04-02
United States return fairly good divi-
dends upon the investment
A Concrete Example.

Let US now take a concrete example,
one of the kind which undoubtedly will
be brought to the attention of the in
Vestlgating committee: One of the
larger banks of New York is presumed
to be of the family of one of the great
groups OF money capitalists. Yet upon
the directorate of that bank there is
only one individual who also serves as
director in other banks and is an ex-
ecutive officer in other banks At the
annual meeting of the stockholders of
this bank it almost always happens
that, aside from the president and per-
hapS one other executive officer and
one stakeholder, nobody else is pres
ent. All of the stockholders have sent
in proxies, and these are used in the
most forr~ al and perfunctOry way in
the election of directors. What is true
of this bank is undoubtedly true of the
majority of banks of New York and,
in fact. of the entire country. If the
holdings of stock of those who are
known to be members of what is some
times called the money group, were to
be placed in one list and the holdings
of all the other stockholders in another
list, it would be found that the first
list comprised only a minority of the
stock
This condition is so universal
that it must be accepted as a fact that
the great body of stockholders in the
banks of the United States see no rea-
ed with them are members of the
money groups. They certainly appear
to have no apprehension of a concen-
tration of a money power. In the next
place, there seems to be no power
which can be invoked, either by stat
utory law or appeal to the organic
law of the country, which could for
bid or make illegal the election to the
directorate of a national bank of
person in whom a large stakeholder
had confidence. 1t is, however, recog-
niZed that there is moral side to
this question, one of business ethics,
prevent any one person from serving
as a director in more than one bank.
The comptroller of the currency
warmly recommends as matter of
national banks be chosen as far as
possible from citizens whose homes
are in the districts in which the bank
is located.
Since the agitation began for an in
vestigation of the so-called money
trust it is observed that number of
men who possess great money cap
ital who have heretofore been mem
bers of the directories of various
banks are prone to elect dummy di-
rectors.
There are many advantages which
are wholly beneficial to the commun-
ity arising from the association with
more than one bank of men of money
capital On the other hand, it is pre-
that the Investigating commit
tee will find it very difficult to estab-
lish a charge of unfair action on the
part of a bank toward a corporation
or an individual. 1t is almost an cpl
gram of the banking world that. in
case our money market conditions are
normal, any individual who has rea-
sonable credit and can furnish fair
collateral or any partnership or cor
poration in like manner equipped can, |
without any difficulty, secure banking
accommodations. 1t is also probabIe
that if charges of unfair treatment be |
investigated 1t will be discovered that |
the treatment was due wholly either !
to the impaired credit of the would
be borrowers or to the INSURGENCY
of the collateral which was offered for
security. 1t has been stated emphat-
ically by bankers of great experience
that there is not commercial mouse
in New York, Chicago or any other
city which has main
tanned good standing, good credit and
has promptly met it's obligations
which ever has any difficulty in dis
counting its commercial paper.
In the Panic of 1907.
In the panic of 1907 the attitude of
The banks of this city and of the 9TH
sr cities in which clearing house as
sociations are established toward the
business community furnishes an I'M
Oressive demonstration of the desire
Of the bankers of the United States
20 protect and care for their custom
ers. Customers of every bank of the
United States, according to informa-
ion which has reached our own clear
ng house association, were told IN
hat time of panic and money famine
hat the banks would protect them. Of
course, this protection was extended
lot to outsiders, but to customers. 1t
vas not possible to furnish the Gus
omers with money, but the banks did
credit discounts upon the books
against which customers could draw
,hecks payable exclusively through
he clearing house association.
Had there been such a money
rust as some persons have professed
o believe existed there never would
nave been a better time for 1t to Sc
,ure abnormal gains or to 1orce TO
he wall any persons or corporations
oward which hostility was felt than
n those panic days from OCTOBER TO
ate December, 1907. Instead or DONG
hat. what is called the money trust
nobilized it's resources and utilized
hem in every way to check panic
md. as far as possible, to overcome
he unhappy effect of 1T II
The State Institutions.
In New York city there are today
ixty-six members of the clearing
,ouse association. A majority of this
is made up of banks
which an Investigating committee of
congress has the right to examine.
But the clearing house sheets recent
V issued contain the names OF sixteen
oanking institutions whose aggregate
.esources are enormous, two of which
ire carrying aggregate deposlts OF
,ear1v three hundred and fifty million
lollars. These are trust institutions
which within a year have been admit
ed to the clearing house membership.
The numerical identification of them IS
rom a hundred and two to hundred
nd nineteen. They are state charter
d institutions. Together with other
tate chartered institutions they con-
titute about one-third of the member
hin of the clearing house. How is
here. then, to be an adequate and