The daily banner. (Cambridge, Md.) 1897-2008, 1913-01-10
BIC BANKER IS
SHARPLY QU I'D
eoorge f, Baker Defends Sure.
ties Company.
DENIES EVAOING THE Law

Declares It Was Organized to Do Busi
ness Bank Was Not Authorized t
Do-To Prosecute Henry For Cor
tempt
Washington. Jan. 10. - George F
Baker, chairman of the board of direc
tors of the First National Bank of New
York, and described as a power il
Anancial affairs second only to J. P
Morgan, was quizzed sharply by tht
house money trust investigating
committee on the transactions of tn,
much attacked First Security com
pany.
Mr.. Baker was questioned also abou
the control of the Chase Nationa
bank, which recently was disposed o.
by him. This he declared he obtained
personally in the interest of the First
National
He denied that he considered the
purpose or transactions of the Firsl
Security company either illegal or i'm
proper, although he admitted that II
was organized to purchase and sell
stocks In the interest of the First Ma
tional, although the bank itself could
not do 80 under the national banking
act.
After q protest, Mr.. Baker supplied
the probers with list of other bank
stocks held by his company, and part
Of the list was read into the record. He
testified that In 1874 the capital of the
First National bank was 100000 and
was increased in 1901 to 10000, 900 by
the payment of q dividend of $780,
900, which left undivided profits and
surplus of $11,641,0OO. He went over
the yearly dividends since then. They
ranged from 20 to 126 per cent.
I'm the last four years have divi-
dends of 226 per cent been paid?''
asked Mr.. Untermyer. YES" was the
reply. s-.-......s.
In 1905, he added. a regular dividend
Of 30 per cent was paid, and an extra
dividend of 100 per cent for organizing
the First Security company to do busi-
ness not authorized by the national
bank act. He said the company did
little business in stocks.
'The First Security company was
organized" said Baker, because of
the complaint of the treasury depart
ment against banks carrying railroad
stock. We felt that the security com
pany would meet this objection"
"Do you not know that the attorn6
general has protested against the4oi
ganixation Of the First Secuf1f
pguy Uniy rexd tnzt ID t6e as
pers." ss-'
"Your purpose in organizing the
First Security company was to do
things which the bank could not law
fully do?" Il would say rather that it
was what the bank was not authorized
to do. The First National bank was
organized to deal in bonds, which it
has done since the Civil War;"
when did you receive the complaint
about stock buying?" About ten
years ago."
How long afterward did you con.
tinue to buy stock?" For several
years. We were finally told that we
must not do it and then the First Sc
curity company was organized" 6
"Is not the First Security company
Q mere evasion of the banking act?..
y would not regard 1t So"
cit cannot sell or buy without the
aid Of the bank?" THAT is correct"
"And the bank lends the security
company money!" THAT is true"
The security company, he said, had
. capital of about $4,O00,00O, had de-
clared dividends of II per cent and
had accumulated a 40 per cent sur
plus.
The witness said he had declined to
furnish list of the assets of the bank.
He considered the details of q banks
assets confidential and that a bank
would be embarrassed If they were
made public" He thought the public
should be willing to do business "on
the confidence 1t has In the men at the
head Of the bank" He said, however.
he could see no injury to any one from
the publication of banks assets.
why do you oppose it, then?" ask
ed Mr.. Untermyer. Because I can
see no good to come of It," answered
the witness.
Because he refused to give to the
probers the names of twenty-four ma
tional bank officers who profited in d
syndicate formed to market stock Of
the California Petroleum company,
George G. Henry, Of Solomon & c..
New York bankers, was certified to the
speaker of the house for contempt.
Mr.. Henry testified several days ago
that national banks and national bank
officers participated in the California
Petroleum syndicate to the extent OF
e1,085,000. and without putting up any
money or taking over any stock re.
ceived about $4,000 profits. He main.
tanned that his confidential relations
with his customers would not allow
him to furnish the names of the par.
ttcfpantS