Milford chronicle., 1913-01-17
5 MEN CONTROL
S4OO,OOO,OOO
PrObaTS Hear How Morgan In
tIuenGG Helps Banks.
GET MONEY FROM COUNTRY

New York Clearing House Official Ex
plains That High Call Rates Are to
Get Money Needed For Speculation.
The first testimony regarding "con-
centration of credit" was heard by the
house banking and currency commit.
tee in its investigation of the so-called
money trust in Washington.
W. E. Frew, president of the Corn
Exchange bank, Of New York, and
chairman of the New York clearing
house committee, occupied the stand
and was put through a grilling exami-
nation by Samuel Untermyer, counsel
for the committee.
Through Mr. Frw Mr.. Untermyer
put into the record evidence Of trust
agreements by which five men control
two of New York's greatest financial
institutions. the Bankers Trust COM
pany and the Guarantee Trust com
pany, with aggregate deposits of near
ly S400, 100000.
The Bankers Trust company. Mr.
Frew said. was controlled by H. P.
Dawson, George b. Case and Daniel
G. Reid; the Guarantee company by
H. P. Dawson. George F. Baker and
William Porter
These men hold and vote all Of the
stock of the companies except enough
to allow a board of directors to quail
fly, and under the trust agreements
have absolute authority over the af-
fairs Of the companies, even to the ac-
quisitiOn or merger of other institu-
tions.
Mr.. Untermyer also secured from
Mr.. Frew a description of the method
by which money was attracted to New
York when small country merchants
and farmers demand funds for the
moving Of crops or the accommoda-
ton of their business affairs.
Mr.. Frew said that the money was
needed on the New York stock ex-
change for speculative purposes; that
country banks kept large sums on de-
posit in New York, and that when
the home demand for money be-
came strong the New York price Of
money rose, and the country banks, in
order to gain the big interest charges,
put their money out in call loans on
the New York stock exchange. All Of
these loans are based on stock ex-
change collateral. Mr. Untermyer
ELECTED from the witness.
When Mr.. Untermyer endeavored to
attribute the enormous growth of the
Bankers Trust company to the infiu-
ence of J. p. Morgan & Co., Mr.. Frew
objected, and the lawyer grew bitter.
He finally pinned the witness down to
the admission that the Morgan inhu-
ence" might have aided the company
Mr.. Unoermyer connected up Messrs.
Dawson. Case and Porter with the
Morgan company.
Mr.. Untermyer questioned Mr. Frew
-ather sharply as to how he classified
he cost of collecting out-of-tOwn
.hecks Mr. Frew said it was loss"
,ut the lawyer insisted upon calling
[ an expense.
What YOU want TO 90 is to make
he customer pay the expense of con
ucting your business. after he has
iveu you the use of his money" Mr.
Intermyer observed.
"The Morgan influence" formed the
asis for most of the days session
ir Untermyer first took up the Bank
rs Trust company Mr.. Frew said its q
was held by a trust COM
littee. composed of II. P. Dawson.
gorge B. Case and Daniel G. Reid.
Mr.. Dawson is associated with J. P.
Iorgan 4 Co, and Mr. Reid is a di- T
sctor in the United States Steel cor l
oration. Mr. Frew said the three
zen administered the affairs of the
1mpany. elected its board of directors o
nd controlled its operations. o