Imperial Valley press., 1913-12-15
''Interlocking isl
To be Opposed

NDV congressman u. II. 1dVenneft
Washington, Dec. 15-The ROD and
staff of the money trust is the inter-
locking directorate. If single man
serves on the boards of directors Of
two essentially competing corpora
tions, competition between those cor
porations is destroyed. 1t is by av-
ing it's agents acting as directors on
corporations having a capitalization
Of twenty-six billions of dollars that
the money trust maintains it's throt-
tling hold on American civilization.
"1nterlocking directorates must be
prohibited, because it is impossible to
break the money trust without put
ting an end to the prectice in the larg-
er corporations" said Louis ID. Bran
dies in his Illuminating series of ar
ticles in Harper's Weekly.
There is every precedent in law AMI
justice for legislation prescribing strice
penalties for the destruction of COM
petition in this subtle way. Suppose
for instance, that trustee for a fund
or an estate were to deal with him
self in making investments with his
trust funds. He would be instantly
stopped by the courts if discovered,
or perhaps severely punished. No
principle of law is better recognized
by courts than this one.
The director of a corporation is a
trustee-he is the representative in
the management of the stockholders.
But IT this corporation makes a con-
tract with another corporation in
which the same director is also a di-
rector, so that the director shares in
the profits of the transaction, such a
contract is now recognized by the
courts.
By a bubble the courts have held
that in neither corporations was the
single director responsible for the
contract-it had to be voted by ma
jority of members of the board.
Therefore, the vote of the interested
directors was unnecessary.
The truth, of course, is that it is
not the directors vote but his influence
that counts in the directors meeting.
This is especially true if the director
who interlocks two competing boards
happens to be the agent of the money
trust-a partner, for instance, in the
firm of j. P. Morgan & Co.. to whom
both corporations must go for aid in
time of need. His influence can out
weigh the combined opposition of all
the other directors.
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 manipu-
late the credit of the country act fair
w in all cases, thehir system should be
speedily destroyed because of its pos
sibilities for evil. Although they pro-
claimed, and perhaps honestly, to the
Pulo committee their belief that they
are administering their absolutism
with justice to all, the public knows
that their power has become oppres-
sive.
Suppose some inventor was to dis
cover process that might revolution
ize theh production of steel. He would
have one, and only one, possible Gus
toner to whom he might sell his in
vention-the United States Steel Cor
poration. Suppose he tried to organ
ize an independent corporation to ex-
plot is process. He would at once
need money for financing his plan,
and right there is where the interlock-
ing directorates would 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 influence
by interlocking directorates running
through the Morgans.