Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1913-03-06


jobbers OF distributors 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.
Beyond these inner groups and sub
groups are banks and bankers through
out the country who cooperate with
them in underwriting or guaranteeing
the sale OF securities offered to the pub
lie and who also act as distributors OF
such securities.
The patronage thus proceeding from
the inner group and its sub groups is
of great value to these banks and
terest to the great issuing houses and
may be regarded as part OF this vast
financial organization.
Fraught With Peril.
Concluding its findings as to the ex-
istence of a money trust, the commit
tee said:
Your committee is convinced that.
however we'll founded may be the as,
surances Of good intentions by those
now holding the places of honor which
have been thus created, the situation. is
fraught with too great perils to our in
situations to be tolerated"
Discussing the control of securities
by this so-called money trust. the re-
port said:
Through their. power and DONNA
ton over SO many Of the largest insti-
buttons which. as buyers. underwriters.
distributors or investors, constitute the
principal first outlets for security is
sues, the. inner group and Its allies have
drawn to themselves practically the
sole marketing of the issues of the
greater railroads, producing and trad
Ing and public utility corporations.
which In consequence have no open
r11aps lot To {nh rs L.. n. H.
position of vantage, fortified by the
control exerted by them through voting
trusts. representation in directorates.
stockholdings, fiscal agencies and other
relations they have been able in turn
to direct the deposits and other pat
ronage OF such corporations to those
same financial institutions, thereby
strengthening the instruments through
which they work"
Condemn Voting Trusts.
The report condemned interlocking
directorates and consultations and de-
voted considerable space to a statement
showing the development of control
through these agencies in New York
institutions.
1T is manifestly improper said the
report, and repugnant to the theory
same person or members of the same
firm shall undertake to act in such in
consistent capacities"
The report condemns the use of vot-
ing trusts in the control OF financial
institutions and criticises private
bankers in the capacity of depositaries
for interstate corporations.
The recommendations of the COM
m1ttee as set forth in the report and
as embraced in the bills accompanying
the report urged the following reforms:
incorporate Clearing Houses.
Clearing house associations of5which
national banks are members should be
required to become bodies corporate
of the states in which they are located
and every solvent and properly man
aged bank or trust company should
have the right enforceable at law, to
become and remain a member.
Regular periodical examinations of
members by committee of the clear
ing house association should be pro-
hibited and instead all such examina-
tons should be conducted by public au-
thorities."
The committee would give the gov
eminent supervision OF clearing house
certificates and would prohibit the fix
ing of rates by clearing houses for the
collection of out of town checks. dis
count or interest OH deposits.
Invoke Lottery Law.
AS to the New York Stock exchange
the committee recommended that con-
gress prohibit the transmission by the
mails or by telegraph or by telephone
from one state to another of orders to
buy or sell or quotations or other in
formation concerning transactions on
any stock exchange and also prohibit
national banks from buying or selling
or lending upon the security of stocks
or bonds listed in any stock exchange
unless such exchange were a body cor
porate of the state or territory in
which it is located.
Require corporations whose securi-
ties 1t Cthe stock exchange) lists" the
report continues, ito make complete
disclosure of their affairs in particu-
lar any commission paid to promo
tiers, middlemen or bankers. out OF
any such security interest or the pro-
ceeds thereof.
Require Larger Margin.
Require margin Of not less than
20 per cent on ali purchases of stock.
Prohibit so far as possible the exc
cution Of simultaneous or substantially
Simultaneous orders proceeding from
the same person or persons to buy and
sell the same security for the purpose
of creating an appearance of activity
therein and any orders, the purpose
of which is to initiate or depress the
price of any security.
Prohibit members from pledging
securities purchased and carried for a
customer for ali amount greater than
the unpaid portion of the purchase
price, whether with or without the
consent of such customer.
Prohibit members from lending to
other members securities carried by
the former for customers, whether with
or without the customers consent
state in Its charter the conditions
on which issues of securities shall be
admitted or removed from the trading
list and provide for judicial review
of it's action in this regard.
Keep books of account. showing the
actual names and transactions Of GUS
toners and give access thereto to the
postmaster general"
Restrict National Banks.
Among the recommendations for the
restriction of national banks, the COM
mittee set forth % regulations. These
were:
The prohibition of the consolidation
of two or more banks without the ap-
proval OF the comptroller of the cur
rency; prohibiting of. directors serving
on the boards Of more than one bank
in the same community or locality;
forbidding ownership Of stock in one