Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1913-03-02

are OF course essentially different and Of
a more loose and intangible character"
Accepting this as the long sought
money trust" the COMMITTEES outlined
the membership as follows:
1.-The parties to this combination or
understanding or community of interest
by whatever, name it may be called, may
be conveniently classified, for the pur-
pose of differentiation, into four separate
groupcs. 4
The first, which for convenience of
statement we will call the inner group.
consists OF J.. p. Morgan & Co., the re-
cognied leaders, and George j.. Baker and
James Stillman in their individual capa-
cities and in their joint administration
and control of the First National bank,
the National City bank, the National
Bank Of Commerce, the Chase National
bank. the Guaranty Trust company anu
the Bankers Trust company, with total
known resources, in these corporations
aloncS in excess of l,300, 900. GOO, and of
a number of smaller but important finan-
the personal fortunes Of these gentlemen.
Closely allied with this inner or pri-
mary group and indeed related to them
practically as partners in many of their
larger financial enterprises, are the pow
erful banking hoises of Lee, Higginson &
Co.., md Kidder, Peabody & Co., with
three affiliated banks in Boston.
In New York City though interna-
tional houses Of Messrs. Kuhn, Locbe &
Co.. with foreign clientele and connec-
tons whilst only qualifiedly allied with
the inner group, yet through it's close re-
lations with the National City bank and
the National Bank Of Commerce and
other financial institutions, with which
it has recently Allied itself, has many in
~terests in common, conducting large joint
account transactions with them, especial
ly in recent years, n having what VIZ
tually amounts to an understanding not
to compete. which is defended as a prin-
ciple Of Ranking ethics Together they
have with a few exceptions pre-empted
the banking business of. the important
railways Of the country.
In Chicago this inner group associates
with and makes issues of securities in
joint account, drc"through underwriting
p~articipations primarily with the First
National bank and the Illinois Trust and
Savings Bank. and has more or less
friendly business relations with the Con-
tinental and Commercial National bank,
rI,;. ,>n, t:o;,o ! ,k, =, t1,o ,t,l1NtUrtsnr nf
security issues by the inner group. These
are the three largest financial institu-
tons in Chicago, with combined resourc-
es Of 1851, 900, 900.
Radiating from these principal groupes
and closely affiliated with them are
smaller but important banking houses,
suclr as Kissel. Kinnicut & Co., White,
Weld & Co., and Harvey Fisk & Sons,
who receive large and lucrative patron
are used by the latter as jobbers or dis
tributors Of securities, the issuing Of
which they control, but which for rea-
sons of their own they prefer not to
have issued or distributed under their
own name. Messrs Lee, Higginson &
Co., besides being partners with the inner
group, are also frequently utilized in this
service because of their facilities as dis
tributors of securities.
Beyond these inner groups n u
groups are banks and bankers through
Que the country who cooperate. with
these in underwriting or guaranteeing
the sale of securities offered to the pub
lie and who act as Its distributors of
such securities.
"The patronage thus preceding from
the inner group and its sub-groups is of
great value to these banks and bankers,
who are thus tied by self interest to the
great issuing houses and may be regard
ed as a rart of this vast financial Or
ganiZation."
Concluding its findings as to the tx
istence of a money trust, the committee
said: -
Your committee is convinced that
however well founded may be the as
surances Of good intentions by those now
holding the places of power which have
been thus created, the situation is frau
ght with too great peril to our institu-
tions to be tolerated"
Dl5CuSSIl6 Tic GUILTY. VI lSSuC VI
securities by this so-caYled money rust,
the report said: ~
Through their power and domination
over as many of; the largest financial in
situations, which, as buyers, underwriters.
distributors, or, investors, constitute the
principal first outlets for security issues,
the inner group n its allies have
drawn to themselves practically the sale
marketing Of the issues Of the great rail
road, producing and trading, and public
utility corporations, which in consequence
of vantage, fortified by the control ex-
erted by them through voting trusts,
representation in directorates, stock hold
ings, financial agencies, and other re-
lations, they have been able in turn to
direct the deposits and other patronage
Of such corporations to these same finan-
cial Institutions, thereby Strengthening
the instruments through which they
, work. Z"
The report condemned interlocking di.
afectorates and consultations, on devot'