The Birmingham age-herald., 1913-01-10
First National Declared Di-
vidends of 1850 Per Cent
on Original Capital
HENRY CASE WILL BE
TAKEN TO COURTS
Interlocking Directorates Are Not
Improper, Thinks Financier--Con-
suits Frequently With Nor
gan and Stillman


Washington, January s.-Enormons
profits by the First National bank OF
New York city were recounted today by
George F.. Baker. chairman of the board
of directors OF the bank, as a witness
before the House money trust commit
tee. Mr.. Baker furnished the committee
with records showing that since It's or
ganzation in 1863 with a capitalization of
100000 the bank has made profits
amounting to more than sso,ooo,ooo.
In the four years since 1908, Mr.. Baker
told the committee, the bank had Paid
dividends of 226 per cent or more than
| twice the total capitalization, which is
now $l0.oOoo00. When the capital was
| increased to that amount in 1901, special
dividend of ss,50o.0o0 was declared. Mr..
Baker said, to enable the stockholders
to take up the additional inveetnent.
In 1908, in order to provide sio,eo0oe0 OF
capital for the organization of he First
Securities company to take over the bust
| ness. (which the bank could not do l n
der the law" Mr.. Baker said a special
dividend of sl0000.ooo was declared. Ths
dividends.
Big Dividends Declared
| Samuel untermeyer, counsel for the
committee from the figures supplied by
Mr. Baker calculated that since he as
sumed the presidency of the First Ma
tional in 1873. that institution has paid
dividends of 1850 per cent on its original
capitalization
Mr. Baker flatly opposed the suggestion
made by MIR. Untermeyer that national
| banks be required to make public their
assets. in order that depostors aud stock
holders might know the nature OF securi-
ties held by the banks. the witness de-
claring that he saw no possible good that
could some of such provision.
That there is no iinproprlety IN one
man holding directorships In two or more
| potentially competitive banks railroads
or industrial corporations. was another
| stand taken by Mr.. Baker Mr. Cnter-
meyer reviewed with him long list OF
| railroads in which he was a director
| some Of which the lawyer held we're
| potentially competing lines. Mr.. Baker
| declared it was rather an ADVANTAGE TO
hold such directorships. "beeause differ
| ences between the companies can thus be
| readily adjusted
| "Such situation" he continued, is
often beneficial to all parties concerned.
What may become a test in the eot,ts
| of the power OF the committee in ilvesti-
| eating affairs of national banks de-
veloped today when the committee and
| the House unanimously directed the
speaker to certify to the district attorney
of the District of Columbia the or
George G. Henry, the New York hankep
who refused to divulge the names OF
|
| flotation of California petroleum. stock
| The district attorney will be asked TO
| proceed against Mr.. Henry for contempt.
the witness did not approve Of tlie
voting trust form of control of corpora
! tons, but said he would not disapprove
of II If stockholders desired It. He fur
! ther said that voting trustees of the
Guaranty Trust company. himself, W. II.
! Porter and II. 7. Dawson had never
| held meeting.
| Election of Directors Perfunctory
Mr. Baker said the election OF direc-
tors by the voting trust of the Guaranty
company was purely informal
| Then the directors are self perpetu-
ating body?" asked Mr.. Untermeyer.
Yes" replied the witness. Things ars
done in New York that way without
much consideration II corporation is
going along all right and is paving divi-
dends there Is no question about the re-
election of the directors
Mr.. Baker stated that his bank and i.
p. Morgan & Co. had three directors in
the National Bank of Commerce.
would you object to giving the com
mittee the list of your individual hold
ings in the various banks and trust conn
panies in New York;" asked Mr.. Inter-
meyer.
Yes replied the witness with some
emphasis, II think the committee has no
INN
BILL"
Isn't 1t the concern of Congress wheth-
er one national bank controls another
| such bank?"
mo. see no reason why one bank
should not control another" declared
the financier.
Mr.. Untermyer argued with the wit
ness at some length and after con-
ference with his counsel Mr. Baker
finally consented to give the list He
said that besides 10000 shares of First
National stock he owned 1900 shares
in tho National Bank of Commerce. 20
shares in the Chase National bank 1900
Bank kers Trust. 1000 Guaranty Trust
$50 New York Trust. 100 Farmers Loan
and Trust, and $50 Astor Trust COM
pany.
Cannot Remember Details
Mr.. Untermyer took up the acquisi-
tion of about $4,000 shares of National
Bank OF Commerce stock by Mr.. Baker
and George Fl. Stillman from the Mu-
tual and Equitable Insurance com
panies. Mr.. Baker said he could not
remember the details of the transac-
tion but that he and J. r. Morgan
and Mr. Stillman had conferred about
| the purchase and that they had tac-
| lily agreed that the stock was to be
divided after the purchase. A part went
| to Mr.. Morgan. Mr.. Baker said The
| purchase of the stock of the Equit-
able Assurance society by Mr.. Morgan
with a contingent interest by Mr.. Ba-
ser and Mr.. Stlllman also was dis
cussed.
| .'oh, Mr. Stillman and [ Just backed
up Mr. Morgan In one of those char
liable things he Is prompted to do
said Mr.. Baker in explaining the trans
action.
| Mr.. Untermyer elected that an at
tempt now was being made to mutual
i ize the company and have the policy
| holders take over the stock interest at
| the price Mr. Morgain paid for 1t. Mr..
Baker said he did not believe, from
his experience with mutual Insurance
companies that the naturalization would
change the management and control OF
the companV He furthar stated he