Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-12-11
FREW ON BANKING.
In Many Clashes With untermyer
Before House Committee.

Washington, Dec. f0.-The first tes-
timony as TO a concentration of
money and credit was heard, today,
by the House banking and currency
committee in its investigation 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
throughout the day and was put
through grilling examination by
Samuel Untermyer, counsel for the
committee. Through Mr.. Frew Mr..
Untermyer put into the record evil
dence of trust agreements by which
five men control two of New York's
greatest financial institutions. the
Bankers Trust Co., and the Guaranty
Trust Co., with aggregate deposits of
nearly $500, 000,000 The Bankers Trust,
Mr.. Frew said, was controlled by II.
p Dawson, George B. Case and Dan
iel G, Reid; the Guaranty Co., by Fl.
Up. Dawson, George f. Baker and Will
liam P. Porter. These men hold and
vote all of the stock of the eompa-
MES. except enough to allow a board
of directors to qualify, and under the
trust agreements have absolute au-
thority over the affairs of the COM
panies, even to the acquisition or or
der of other institutions.
Mr.. Untermyer also secured from
Mr.. Frew a description of the method
by which money is attracted to New
York when small country merchants
land farmers demand funds for the
moving of crops or the accommodation
|of their business affairs. Mr.. Frew
said that the money was needed on
the New York Stock Exchange for
speculative purposes; that country
banks kept large sums on deposit in
New York and that when the Home"
demand for money became 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 on the New
York Stock Exchange. All of these
loans are based on Stock Exchange
collateral, Mr.. Untermyer ELECTED.
Mr.. Untermyer and the witness did
not get along well together, and
throughout the day the colloquy be-
tween the two, time after time, be-
came heated Mr.. Frew insisted upon
led the discussion far from the line
of questioning. Mr.. Untermyer was
pursuing. When Mr. Untermyer en-
deavored to attribute the enormous
growth of the Bankers Trust Co. to
the influence of j. P. Morgan and Co.
Mr.. Frew objected and the lawyer
grew bitter. He finally pinned the
witness down to the admission that
hn ;pH
aided the company. Mr.. Untermyer
connected up Messrs. Dawson, Case
and Porter with the Morgan Co.
The day ended in a discussion in
which Mr. Frew through his counsel,
Charles E. Rushmore, demanded the
opportunity to make certain explana-
tions as to his position in regard to
the clearing house provision whereby
New York banks must charge uni
form rate for the collection of out of
town checks. Mr.. Untermyer charac-
terized this rule as a usurpation of
the power of the officers of the banks
and as tending to eliminate competi-
ton and remarked that the clearing
house might just as we'll prescribe a
uniform rate of interest on deposits.
as is done under the rules of the Salt
Lake City Clearing House. Mr. Frew
said this should BE stopped" but
defended the out-ef- town collection
rate rule.
The committee ordered Mr.. Frew to
submit his request in writing and he
will probably be allowed to resume the
stand, tomorrow, to make further
statement
benjamin Strong president of the
Bankers Trust Co, also probably will
be given an opportunity to explain the
workings of the trust agreement I'M
der which his company is operated. He
demanded that in view of today's tes-
timnoy he be allowed to appear.
Tomorrow, the committee also will
take up the New York Stock Exchange
and representatives of that organiza-
ton will be asked to testify.