New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-01-14

| lup dlleHlpl 10 ONcIIlu' INV f'i"'"'
mandate in Maine.
--<------
THE CONTROL OF CREDIT.
The frankneSS and honesty with
which the men i'm whose hands the
control Of credit for large undertak-
ingS in this country has been conccn-
tratcd have told the public Of their
| rover and the danger from II. if il is
abused, should diSarm attacks upon
them. Mr.. Bakers candid advice TO
the public not to let the concentration
20 any further was not the language
which a conspirator against the inter
cstS Of the people would employ. And
the power which he and his associates
enjoy Is not the result Of con
Spiracy. Some one had 70 do the work
which they have done. and there is no
testimony before the Puio commission
that they have not done il honestly
and well.
There Is nothing 10 Justify President
elect Wilson's remark in Chicago that
there are an inner circle and an outer
circle Of finance and that those in the
inner circle enjoy favor in obtaining
credit 4 certain favoritism is inevita.
bic in human institutions. In n little
village the man whom the local banker
knows personally and has confidence
in has an advantage over the man
whom he does not know so well. II
this kind Of favoritism has been shown
in Wall Street the fact is not surpris-
ing. Such favOritiSm is not in the
nature Of n conspiracy. and there is
nothing TO gain from assaiing il with
suspicion. as the President elect does.
Indeed. no advantage can come from
treating the question raised by Mr..
Bakers declaration on the witness
stand as a personal issue. or from try
ing to make n sensation out Of II or 70
| inject il into politics. Advantage can
come only from considering why such
concentration Of the control Of capital
grew up and how the nation may pro-
tect itself against u further extension.
The growth Of machinery for fnanc-
ing big undertakings was inevitable as
soon as there were hig undertakings to
| he financed. The moment industry he
gan 10 he consolidated and 10 take on
| Il national scope the concentration Of
credit for it began. No one could raise
| S1oO.0O0000 unless there was machin.
| cry big enough TO raise il. And when
! industries ceased 10 he local. their
managers being known by their stock
holders. who could also keep an eye
on the conduct Of the business in
which they put their money. there was
| reed Of some one whose name inspired
confidence who would put the stamp
Of his approval on stock and bond is
! suos-there being no public regulation
| Of these-and who would further he
| represented i'm the direction Of the
| companies whose stock and bonds he
approved 30 see that faith was kept
with those who bought the securities
under his approval.
II is this need which has created the
! intcrlocking directorates over which
Mr. Untermyer tried so hard TO make
3 sensation. But his showing Of 500
000,O0O000 thus controlled is mslead-
| ing If ii is meant to suggest that
| there Is credit TO the amount Of S23.-
000.000,000 at the disposal Of the
money trust which he has been seek
! ing to discover. Those S23. 900. 900 900
are for the most part fixed capital
steel making machinery. railroads and
many other things-and they cannot
he taken out Of the undertakings in
which they are employed TO be at the
! disposal Of the men whose business is
| supplying credit, or cornering credit
as Mr.. Untermyer seems TO he trying
| 10 prove. Even the bank credit in
cluded in the $23.OOO.OOO000 is not
largely available for their purposes
| The credit Of II bank has to flow in
| certain fixed channels. 4 bank has its
| regular customers, whom Il cannot
refuse without good reason. unless il
means to destroy itself The 500
+ 600. 100000 represent great influence
| on the industries Of the country. not
possession Of It's supply of credit. And
that influence has been created by the
/ demand of those who bought stocks
and bonds from Messrs. Morgan. Baker
! and the rest for some assurance of the
future conduct Of the enterprises in
! which they invested. We do not mean
! that there has been no desire for
power on the part Of those 10 whom
/ /; has come. hut merely that they
/ could not have obtained that power if
! there had not been good reason for
! comforting il upon them besides their
own desire for it.
IL Is easy to see the influence which
the lack Of public supervision regard
i1s the issue of securities has had in