The Alaska citizen., 1913-06-30

+t'''' ohtN nose boards which the opinion of the investing public re auires them to enter. as an evidence ot good faith that they are willing to have their names publicly asso- cjJtrd with the management.
 FUNCTIONS OF A BANKING
 HOUSE.
 Yet before yuur committee. this natural and eminently desirable re fationship was made 10 appear al most sinister and no testimony whatever was adduced to show the actual working of such relationships r js easy to overlook the fact that practically all the railroad nd in inslrial development of this country has taken place, initially through he medium Of the great banking houses. Were it not for the oppor. rHuilics provided by these houses, it
 ], difficult to imagine how the great fransPgrta'i ion systems and industrial plants ot the country could have been created Many persons fail to realize the variety Of the functions performed by these baHking houses f q trlHsconf!ucntal railway system hu.ldilg ny the wheat tarmS of the west and a1oriing employment to thousands Of workmen. desires 10 obtain $l.el0,0ou for purposes of sill further development. it goes 10 some great banking house or in sli0ation for market for his se- cHrtties The bankers make expert lHgez'igatton of the property agree 'o buy the bonds and thus to make po~si'fl" great and important de yeloPmeut two or three thousand miles away Next the ,nkng house serves the investing communi- tf Thousand of investors are seek iug sound securities fer their say jnGs They have neither the knowl- nd.e nor the opportunity for in rastiealins q great railroad enter prise. They look to banking house to perform those functions 1nd ta give is stamp of approval ,o that railroads securities In this manner the banking house fuflls d double duty to the community.
 HOW SECURITIES ARE HANDLED.
 Another line of your inquiry. cer- tainly pertinent 10 the general sub jecf. was as 10 whether the market ina of ihe securities that from time To fime have been issued by inter state railroads and industrial corpo. ratiens has been by competitive bidding or otherwise. This question is of such importance that there must be general regret that the time of Four committee did not serve for the exhaustive study of the subject which you undoubtedly desired. in cluin" testimony from enough di- verse sources 10 show you the exact situation On this matter we are pleased To submit certain considera- lions which We are confident. are borne cut by the facts: First. in general and over a period of time. he salc of such securities is in variably subject to the competition of market conditions. We have not heard Of an instance where any cor Poration failed 10 secure the benefit ot q price for its issues as excellent as conditions at the time warranted. second. in most Of the leading com mercial states public service com missions pass with great care upon the prices at which The securities of all transportation and public ut lijy corporations are sold Third, competitive bidding. in the sense of having railroad and industrial securi- lies offered practically at pubic que tion as in the case of municipal securities. k seldom or never prac- tctd.
 The reasons against such practices are plain Such corporate issues have neither the security. the stead- ness nor the general confidence pos sessed by municipal bonds, and while in good times it is possible that they might be subscribed for at public auction. in bad times there would be no one to bid for them. It is practi- eally inconceivable that a munich palty should go bankrupt and make permanent default of it's obligations. Quite otherwise is the case with railroad or industrial corporations Should the latter appeal directly to the proverbially timid investor there can be little question that, in times of stress, support would be totally lacking. We should have the spectacle of numberless corporations failing for lack of strong financial or banking support. TO SELL SECURITIES BY AUG
 TON IMPRAcTICA6LE.
 The enlisting of such support in the shape of fiscal agencies or of | other close relations with bankers, | appears sound both in principle and | practice. For their ultimate sue cess. great enterprises depend almost l as much upon wise financial counsel | as ulinn technical management A |