The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1913-03-06
MON TRUST is
REM IND
is IT'S PROPHET

tlemen.
CLOSELY allied with this inner or
primary group and indeed related
to them practically as partners in
many Of their large financial enter
prises, are the powerful international
banking houses of Lee, Higginson q
Company, and kidder, Peabody &
Company, with three affiliated banks
in Boston.
In New York City the i|nternation-
al banking house Of Messrs. Kuhn,
Loebe & Company, with its large for
eign clientele and connections. whilst
only qualifiedly allied with the in
ner group, yet through its close re-
l%ations with the National City bank
and the National Bank Of Commerce
and other financial institutions. with
which it has recently allied itself,
has many interests in common, con
Quoting largely joint account tran
sactions with them, especially in re-
cent years, and have what virtually
amounts to an understanding o
to compete, which is defended as IA
principle OF banking ethics Togeth-
er they ave with a few exceptions
pre-empted the banking business OF
the important railways Of the coun-
Try.
Branch i'm Chicago.
In Chicago this inner group as
sociates with and makes issues OF
securities in joint account, or through
underwriting participations primar-
lily with the First National bank and
the Illinois Trust and Savings bank,
and has more OF less friendly bust
ness relations with the Continental
and Commercial National bank,
Which participates in the under
writing securities by the inner
group. These are the three largest
financial institutions in Chicago, with
combined resources of $56l ,000, 900.
groups and closely affiliated with
them are smaller but important bank
ing houses, such as Kissel, Kinnicut
& Company, White, Weld & Company
and Harvey Fisk & Sons. who re-
ceive large and lucrative patronage
from the dominating groups and are
used by the latter as jobbers or dis
tributors of securities, the issuing of
which they control, but which for
reasons OF their own they prefer not
to have issued or distributed under
their own names. Messrs. Lee, Hig-
ginson & Company, besides being
parners with the inner group. are also
frequently utilized in this service be-
cause of their facilities as distribut-
ors of securities.
l., Beyond these inner groups and
fsub-groups are banks and bankers
Throughout the. country who cooper
ate With them in underwriting or
guaranteeing the sale OF securities
offered to The public and who also
Aact jas distributors OF such securi-
ItiessF
= eThe patronage thus proceeding
from the inner group and its sub
groups Is ofsSgreat value to these
ltanks and bankers. who are thus tied
hby s~elf-interest to the great issuing
houses ands2mays be regarded as d
Tpark OF this vast financial %orsaniza-
tion.''
III Too Much Power. As2
concluding its findings as to the
existenre OF Il money trust, the ON
mittee said: a4 TgE.394 fflfs
o committee is convinced thai
however we'll founded may be the
assurances of good intentions by
those now holding the places OF pow
Ell which have been thus created, the
situation is fraught with too great
peril to our institutions to be toler-
ated."
Discussing the control of issues OF
securities by this so-called money
trust, the report said;
Through their power aud dom
nation over so many of the largest
financial Institutions. which, as buy
ers, underwriters. distributors, or in
vestors, constitute the principal first
outlets for security issues, the innel
group and its allies have drawn to
themselves practically the sole mark
etlng of the sue of the great cor
porations, which in consequence have
no open market to which to appeal;
and from this position of vantage,
fortified by the control eNerted by
them through voting trusts, repre-
s%ention in directorates, stock hold
ings. fiscal agencies, and other rela-
tons, they have been able to turn to
direct the deposits and other patron
age Of such corporations to these
same financial institutions, thereby
strengthening the Instruments thro-
ugh which they work.
Against In%terlocking Dircctoratcs
The report condemned interlock-
ing di~rectorates and consultations.
and devoted considerable space to a
statement showing the development
of control through those agencies in
New York institutions.
1t is manifestly improper" said
the report, and repugnant to the
theory and practice of competition
that the same person or members of
the same firm shall undertake to act
in such Inconsistent capacities