The Birmingham age-herald., 1913-03-01


called 10 grave deficiencies in our finan-
cial laws, 1 also believe that a sinister
light has been thrown over banking prac-
tees which was not justified by the facts,
that no effort has been made to show
the reasonable and commendabe explain
ations of these practices, and that in
many cases an impression has been given
to the country as to the character and
motives of leading bankers which is al
together unfair. A sentiment has beea
created throughout the country against
Wall street and many OF our good cit-
zens do not realize what 1t means that
New York has become one of the world
leading money markets, and that the
banks of New York and their associates
are now able to handle large transac-
ticns which they were unable to handle
only a few years since. ! feel that every
American citizen should be proud of the
fact that we have city where there is
sufficient capital to handle these enter
prises, and should take pride also in the
character and integrity of the men who
are at the head of its financial institu-
tions."
Mr.. McMorran declared the proposed
scheme for regulating stock exchanges
drastic and unwarranted'' and that there
was mo real evil in. interlocking director
ates.''
The majority report after declaring the
existence of money trust, said that the
increased concentration of control of
money and credit had been effected prin-
cipaly as follows:
Charge Sympathetic Management
First, through consultations of COM
pettivet or potentially competitive banks
and trust companies, which consultations
in turn have recently been brought under
sympathetic management
Second, through the same powerful in
terests becoming large stockholders in po-
tentially competitive banks and trust
companies. This is the simplest way of
acquiring control but since it requires
the largest investment of capital. ii is
the least used although the recent invest
ments in that direction for that apparent
purpose amount to tens of millions of dol
lars In present market values
Third, through the confederation of
potentially competitive banks and trust
companies by means of the system of in
terlocl<ing directorates. -
Fourth, through the influence which the
more powerful banking houses, banks and
trust companies have secured in the man.
agement of insurance companies rail
roads, producing and trading corporations
and public utility corpora tons, by means
of stock holdings, voting trusts, fiscal
agency contracts, or representation upon
theiro boads of directors, or through sup
plying the money requirements of rail-
way, industrial and public utilities cor
porations. and thereby being enabled to
participate in the determination of their
financial and business policies.
Firth, through partnership or joint ac-
count arrangements between few of the
leading banking houses, banks and trust
companies in the purchase of security is
such of the great interstate corporations,
accompanied by understandings of recent
growth--sometimes called banking ethics
which have had the effect of etfectually
destroying competition between such
houses, banks and trust companies in the
struggle for business or In the purchase
and sale of large issues of such Sc
curities"
The report, as submitted to- the
House is largely the work of Samuel
untermyer, counsel for the committee
who composed the original draft of the
report and who drew the bills pre-
sented On the question Of the exist
ence of money trust, the report Is
specific and detailed.
Money Trust Explained
1t would of course be absurd" said
the report. ito suggest that control
of the bulk of the widely distributed
wealth Of great nation can be cor
rallied by any set of men. If that is
what Is meant by gentlemen who deny
the existence of a money trust, your
committee agrees with them. Such a
thing OF course would be impossible
and its suggestion is ridiculous. 1t is
not however, necessary that a group
of men shall directly control the small
savings In the banks nor the scattered
resources of the country in order to
monopolze the great financial trans
actions or to be able to dictate the
credits that shall be extended or with
held from the more important con-
spicuoue enterprises This Is substan-
tally what has been accomplished and
fairly represents the existing condi-
lion"
zhe great bank or banker with ac-