New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-03-01
principal cities throughout this and
foreign countries.


principal cities throughout thi. and
foreign countries
Patronage Of Value.
The patronage thus proceeding from
the inner group ana its sue-sroups. the
report continues. is Of great value 70
these banks ard bankers. who are thus
tied :: self-interest u the great ISSUING
houses and may be rcSe rded IS 2 part q,
this vast inancisi orsan.zation such
patronage viclds 10 incors. siderable part
OF the income OF these bsnks and bankers
and without much risk on account OF the
facilities OF the principal groups for plac-
Ing issue. OF securities through Their
domination OF great banks ana trust COM
pan.es AID ;helr other domestic anna
tons and their foreign connections
IN concluding it's findings as TO the eS-
.stencc or 8 "noney trust" the committee
ssys:
Your cemmittss 10 convinced thai
however we'll founded may Be the as
suraness Of good intentions by tnese
now holding the places Of power when
have been thus created. che situatisn
10 fraueht with tee greet peril TO cur
Institutions to % tolerated.
Discussing TIC contro! o! .s:ues o. Sc
curties b. tbs money trust the report
continues:
through tAe.' power a:d do.nlnlt.oE
over 50 nan, o. The la!ges! tI1rc!al m
st!tut:ons. Which,. ~ Buyers, uAder"r.t-
ers dist-or;crs. or invcstors. constitute
the principal first outlets for sec;:r'ty ~
sues. Tho inner grou, and !ts allies asVe
drawn 10 themselves practically the sole
No fkct.Eg OF the iss.es Of tie greater
i-.nrosd. producing AID tIaL.na. tnd p-o-
lie Ut...r corporations, w...cn in cohsc-
queacc hcVe 20 oecn .narH', % "h'eh %
appeal
ARD from Ills position CT vantage
fortified oy the control eXsrssd by
them through voting trusts. -eprssen'
txtion in 5irectorstss. steckhoidiras'
fisca! agencies and other relations. they
have been able in turn to direct the
deposits ans ether patronage OF such
CORPORATIONS 70 thsss Same fnAncia! in
stitutiers. thereby strengthening the
instruments through which they work.
NO railroad system o. Industrial cor
pe-ation FOR which either Of the houses
r..nei Nas acted az banke. could th!i'
~ business fror' one 20 another. mere
or. has MADE an lssue OF securities Tor 2
CORPORATION the other will 70; bid fof
subseqncn, ISSUES OF the same eorpa'F' =
ton Their c-equen; and extensive reia-
tons IN the io!D' issues Of securities nave
mad. sich a nodus vivendi Inevitable.
This inner group and allies thus
have no competition. either from 9TH
ers Or among themselves. Tor those
security issues, and are accordingly
FREQ 10 e1ac. .heir own tsrr-s IN most
cases.
Your committee has no evidence that
this power 10 being used spprsssively
and no means Of ascsrtsinins the facts
50 Iona as their profits are und'seicssd'
Directors Net Free Agents.
Tn. suggestion that because these cor
poration. have boards o. directors coH'-
posed CT men Of standing thev are inde-
perde,.t. seems 10 ~ d!sinEenuous. Thry
ar. the nominees Of IN. banking house
s,o s,,b,ec, 70 removal BY !, ~ any
election They are not sccouHtah'e 20 the
shareholders but 20 Mcssir. Morgan an"
Baker and are not free agents. no MAJ
,er how en.,rently respectable snd as
tinsuashcd they NAV be.
Met only does this domination o.
GREAT banks and trust companies enable
the inner group and their allies 70 con-
troll tho disposition of now security ~
sues through control Of the nam out
lets therefor. but i also enables them
70 say what and whose securities shall
not bs bought and 81 enforcing the re-
tention in these institutions Of sseur''
tie, issued by them which an 'nds'
o.odsnt management might consider IT
wise 20 dispose OF.
Tn. committee defines the distinction
between buying tho contro! OK oana III
o, q railroad or industrial as follows;
9TH. distinction between buy!ng coh'3''
OF n bank or trust conpan" ara OF ~
industrial COMPANY or railroad - NhcS-
mental In tie after case the p4fcha-e'
s.ts only The use or the assets that ''-
long 70 IL. corpora ton. IL the former
We bargains ,or and sets the Use OF "ti'--
n.op.e'p money. The change o! control
m the .or7,!e. ir,A:ests only the pa"'c,
10 tho transaction. II does not cohccr"
10 pLol:o. Ia the lat,er Gaze The &C.
posters and the public are very mie.l
interested, as must ne apparent "h"n we
consider .he effect os the acquisition oil
these banks ard trT!s, companies sfocks
in connection with the purchases b. ihese
gentlemen IN other OF The great New 20. "
Institutions a. about that time and On
cieent With ;he establishment ana re-
nova Of voting t..gsts IN still Others.
lrtsrieekins Directories.
T.h.n. W tie question OF .nterlocN.Ex
dI.ectoratss AID co.sciinau oEs tie eonl-
mites SAYS.
TIC s~.d..cs dea.onst-s,es ma: I'll.
ME. g-oup and the tahks ara trus, CON
pau.es With which they are Affiliated
through stock oVnerIhir. repressni st:oa
IN directories and otherwise, dornLt'
the rnoaey market Tor loans o.: the stock
ercnanse and on stock exchange secur.-
ties. Thcy Tenn 10: only their own money
and .he none % their depositors. tne,Gd'
ng the depositors OF the oDt-of-to"n
banks, bu; taat OF their CORES pohdcn;v
on terms and security satisfactory Il
them (tte New YORK banks. II Is ~
their peye- b. cooperation primarily 70
fix the call rate from 6ay TO day and &c
determine what constitutes satisfactsrs
collateral.
..This do~s no, roeAn thai al! tnt Lam