The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1913-01-16
'$80,OOO,OOO MADE
BY SINGLE BANK
IN FIFTY YEARS
Money Grows Fast
With Right Kind of
Influence.
1850 PER CENT
Morgan and Baker Unionize
in Backing Financial Deals
System Good.

Washington, ID. c. Enormous
profits amassed by the FIRST National
Bank OF New York city were recount
ed by George f. Baker, chairman of
It's board of directors, in testifying to-
day befor the House money trust in
v~estigating committee. Mr.. Baker
furnished records showing that since
its organization in 1868 with a capt.
talization OF 100000 the bank had
made more than $4,000, 900 profits.
Samuel untermyer, counsel for the
committee. calculated from the fig
ures supplied by Mr.. Baker that since
he assumed the presidency OF the
bank in 1873 that institution had
paid dividends OF 1880 per cent ON
its original capitalization.
Tells How Law is Outwitted.
In the four years since 1908, Mr..
Baker told the committee, the bank
had paid dividends of 226 per cent,
or more than twice the total capital
ization, which is now $4,000, 600.
When the capital was increased to
that amount in 1901 a special divi-
dend of $1,000, 900 was declared TO
enable stockholders to take up the add
investment.
In 1908, to provide $4,000, 900 of
capital for the organization of the
First Security Company to take over
business (which the bank could not
do under the law" Mr.. Baker said, Il
special dividend of $40, 900 900 was
declared.
This was in addition to the regular
yearly dividends.
Favors Interlocking Directors.
Mr.. Baker flatly opposed a sugges-
ton made by Mr.. Untermyer that ma
tional banks be required TO make pub
lie their assets, that depositors and
stockholders might know the nature
of securities held by the banks. The
witness declared he saw no possible
good that could come through such a
provision.
That there is no improperly in one
man holding directorships in two or
o potentially competitive banks.
railroads or industrial corporations
was another stand taken by Mr.. Bak-
err. Mr.. %Untermyer reviewed with
him a long list of railroads in which
he was a director, some of which,
the lawyer held, We're potentially
competing.
Mr.. Baker declared that it was
rather an advantage to hold such
directorships. because differences be-
tween the companies can thus be
readily adjusted.
SUCH a situation he continued,
is often beneficial to all parties con-
cerned."
The witness did not approve the
voting trust form of control OF
corporations by which stockholders
turn over their voting rights to vot-
ing trustees, but said he would not
%disapprove it if the stockholders de-
sired it. He further said that the
voting trustees of the Guaranty Trust
Company, himself, w. II. Porter and
III. NJ. Davidson, never had held a
Injecting.
Discussing voting trust agreements,
Mr.. Baker said the election of direc-
tors by the voting trust of the Guar
anty Company was purely formal.
Then the directors are a self
perpetuating body asked Mr.. I'm
termyer.
Yes replied the witness. Things
are done in New York that way with
out much consideration. If a corpor-
alton is going along all right and is
paying dividends, there is no question
about the reelection of the direct
ors."
Hold Shares in Other Banks.
Mr.. Baker said his bank and j. p
Morgan & Co. had three directors il
The National Bank of Commerce.
Would you object to giving the
committee the list OF your individual
holdings in the various banks ant
trust companies in New York;" wa,
asked.
Yes" replied the witness. II thinl
the committee has not more concerl
with that than with my tailor's bin.
Isn't it the concern of Congress
wheher one national bank control
another such bank?"
No, ] see no eason why one banl
should not control another" declare,
the tinancier.
: Mr.. Baker finally consented to Civ,
the list. He said he owned 400,
shares in the National Bank, fit
shares in the Chase National Bank
$1,000 Banker Trust 1000, Guanant.
Trust, $50 New York Trust, 10
Farmers Loan and Trust, and 80
/, Aston Trust Company.
. Whips Devil Around Stump
Mr.. Baker admitted he, Mr.. Morga,
and Mr.. Stillman consulted frequent
ly about large financial operations
He was a director in the Burlingto
and Northern Pacific railroads, whic
We're Competitors between certai
points; a director in the New Yor
Central, the Erie, the Lehigh Vale
and the Delaware, Lackawanna an
Western railroads. scompeting b.
: tween New York and Chicago.
:, financial dlu hrdl mfwy hrdluhrt
MIR. untermyer asked about tn
conduct of Goa fields in which NJ
Baker was interested, when the la
forced them to dispose of their col
r troll of the coal mines in the anthr;
4. cite region.
d They just formed a sales con
S pany, sold the mines and the con
IS pany sold the coal to the railroads
d the mines,' said Mr.. Baker.
S, Just whipped the devil around tt
4 = -, - ~ -, y, NJ, -, az