The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1913-12-13
TRUST COMPETITION
EASILY DESTROYED
If Single Man Serves on Boards OF
Directors Of Two Different Corpor
atoms Such is The Case
SHOULD PUT END TO PRACTICE
Impossible to Break the Money Trust
With this Fault In Practice Opinion
Of Harpers Weekly Writer

v OF Harpers Weekly Writer
From Congressman G. H. Tavenner.
Washington, December. 13.-The
rod and staff of the Money Trust is
the interlocking directorate. II a
single man serves on the boards of
directors of two essentially Compel
ing corportions, competition between
those corporations is destroyed. 1t is
by having it's agents acting as direc-
tors on corporations having capita.
1ization of ,twenty-six billions of dol
lars that the Money Trust maintains
it's throttling hold on American CIV
1lization. 49,.
"Interlocking directorates must he
prohibited, because it is impossible to
break the Money Trust without put
ting am end to the practice in the
larger corporations" says Louis D.
Brandeis in his Illuminating series of
articles in Harper's Weekly.
There is every precedent in law
and justice for legislation prescrib-
ing strict penalties for the destruc-
ton of competition in this subtle
way. Suppose, for instance, that a
trustee for fund or an estate were
to deal with himself in making in
vestments with his trust funds. He
would be instantly stopped by the
courts if discovered, or perhaps sew
erely punished. No principle Of law
is better orcognized by courts than
this one.
The director of a corporation is a
trustee-he is the representative in
the management of the stockholders.
But if this corporation makes a con-
tract with another corporation in
which the same director is also di-
rector, so that the director shares in
the profits of the transaction, such a
contract is now recognized by the
courts.
By bubble the courts have held
that in neither corporation was the
single director responsible for the
contract it had to be voted by a
majority of members of each board.
Therefore, the vote of the interested
director was unnecessary.
The truth, of course, is that it is
not the directors vote but his in
fluence that counts in the directors
meeting. This is especially true if
the director who interlocks two COM
peting boards happens to be the
agent of the Money Trust-a partner
for instance, in the firm Of J. P Nor
gan & Co.-to whom both corpora
tions must go for aid in time of need.
His influence can outweigh the COM
bined opposition of all the other d.
rectors.
This system Of finance which has
grown up possesses fearful potentiali-
ties for Sitting American initiative,
independence and progress. Even
though the few men who now mani
pulate the credit of the country act
fairly in all cases, their system should
be speedily destroyed because of it's
possibilities for evil. Although be-
lief claimed, and perhaps honestly, to
the Pujo committee their belief that
they are administering their absolut-
ism with justice to al, the public
knows that their power has become
oppressive.
Suppose some inventor were to dis
cover a process that might revolu-
tionise the production Of steel. He
would have one, and only one, pos
sible customer to whom he might
sell his invention-the United States
Steel CORPORATE on Suppose he tried
to organize an independent corpora
ton to exploit his process. He
would at once need money for financ-
ing his plan, and right there is where
stop him. No bank in the country,
no matter how able to supply the
money, would give him aid.
For the steel Corporation and the
banks are bound to the same in
fluence by interlocking directorates
running through the Morgans.
Eleven Strikers Convicted.