Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-12-20

control of a directorate, interlocked direc-
tors had no actual power. You take
three banks he said. 'Then take three
men end put them in each of these banks
In one bank they are three out of rs, in
another they are three out of 20. and in
another then are three out of 10, if you
"But suppose you have named all the
other directors. said Mr.. Untermyer
Suppose you have a voting trust, and
you have, under the power givea by that
voting trust. named the whole board as
has been done in these two cases of the
Guaranty Trust and the Bankers Trust"
Il am not talking Sabout voting
trusts, nov; ! am passing now upon
the question of directors, OF three d-
rectors who go into three or four or
10 banks. say that these three direc-
torsAard I'have been in a good many
banks and a good many corporations
/ defy any man to go into any one
of those boards, even myself--1 will
say tlat for the sake of argument-I
do not believe | could carry any ques-
ton through any one board that was
a director IN against the views of the
directors. ,l
"On the contrary, | have Il great
quantity of cases where | coald bring
in proofs of it. There is no question of
contfo! unless YOU have got a majority
of the directors. then, in all banks"
said Mr. Morgan, with emphasis
Early inBllis testimony Mr.. Morgan
was led by Mr.. Untermyer into a dis
cussion of various banks in which
he ID q
Co. appear as directors.
You do not watch the details as to
the management of any of these banks,
dc you?'' he asked. mo-
who attends to the questions of
management that come up with respect
to these banks with which you are
identified in your firm?' amy one of
the firm"
ANY one who happens to know
about that particular business?" asked
the lawyer Yes" replied Mr.. Nor
gan.
You are doing everything you can
I'd protect the prosperity of these in
stitutions in which the members Of
your firm are directors, are you not?'
I'VE do. not bother ourselves much
about that. They look after them
selves"
Why do members of your firm. In
some instances two members of your
firm. and in some instances three
members of your firm. go on the
board?' Because we have a large
interest to protect
In the protection of that large in
terest, do you not look after the banks
at all?" Not to any extent
TT takes the time of your partners
does it not?" Yes, / have already
remarked on that a great many times.
II takes too much time
But still they remain there. do they
not ?" They do
And when they are there I sup
pose they do their utmost to add to
the prosperity of the institution 2"
They always do that, hope.''
THAT it is what they are there for?"
That is what they are there for"
agreed Mr.. Morgan.
The general subject of the power
and privileges of voting trust" hold
ing the stock of corporations elected
a discussion in which Mr.. Untermyer
got into the record statements regard
ing series of trusts held by menu
bers of the firm of Morgan & Co.. for
years.
With respect TO those voting trusts
the voting trustees in all these cases
have powers. have they not? and it
is their duty TO name the directors
who shall conduct tie company? he
asked
Yes, sir. answered Mr.. Morgan.
And those directors in turn name
the officers?p eyes. sir"
Can you name any instance in
which the board of directors thus
named in these various voting trusts
has undergone any considerable
change after the expiration of the
voting trust from the. way in which
it was constituted under the. voting
trust, except that where deaths oc-
cur, the vacancies Were filled?" II
think very seldom said the witness.
You think they generally continue
along the same board?" Yes. They
are generally pretty well satisfied with
what they do"
''Who?'' asked Mr.. Untermyer
1.-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 sue
ceeded in procuring a change of man
agement?" II do not recall any at the
moment"
rs it not true that in this country,
unlike other countries. il is difficult
to get the stockholders to take any
active interest in their companies?"
"That is very true. That is the rea-
son why voting trust is So desir-
able" said Mr.. Morgan.
THAT is the reason for this pater-
naism on the part OF the financial
gentlemen who reorganize the COM
pany?, THAT is the reason why, i'm
re-organizing a company, We employ
that methodist that it can be pro-
tected.''
The activities of ]. P. Morgan &
Co, as fiscal agents for railroads and
other interstate corporations formed
the basis for another lengthy phase of
the examination. Mr.. Morgan placed in
the record the agreements by which
the firm handles the securities of the
New York Central and the New York,