The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-03-01
MAJORITY FINDS
MONEY OCTOPUS
REALLY EXISTS
CONTINUED from First Page

TIE country controlled by our largest
financial institutions and that 1t is
available for financing large security
issues for the current needs OF our
principal interstate corporations ana
or the individuals conducting great
enterprises and for stock exchange
loans Is at least as effective as. for
Instance. is tho control of the United
States Steel Corporation over the steel
Industry. is All understatement of the
| situation, although the methods by
which this control is erected and held
together, are OF course, essentially dir
fcrent and OF more loose and in
tangible character
Its Mcmbership.
Accepting this as the long sought
money trust the committee out
lined the membership as follows:
The parties to this combination or
understanding or community of in
terest by whatever name it may be
called. may be conveniently CLASSIFIED,
for the purpose of differentiation. into
four separate groups.
The first, which for convenience nj
statement. we Will call the inner
group. consists of j. p. Morgan & Co.,
the recognized leaders, and George T..
Baker and James Stillman in their in
dividual capacities, and in their joint
administration and control OF tho First
National Bank, the National CITY Bank,
the National Bank of Commerce,
the Chase National Bank the
Guaranty Trust Company and the
Bankers Trust Company. with total
known resources in these corporations
alone in cNcess OF $1,000. 000, 900, and
of n number of smaller but important
financial institutions. This takes no
| account OF tho personal fortunes oil
these gentlemen
Closely aligned with this inner or
primary group and. indeed, related to
them practically as partners i'm many
[ of their larger financial enterprises.
are the nowcrful international hunis'-c
houses OF Leo. Higginson & Co., ana
itidder. reaboay Il Co, with three 49,
lated banks in Boston,
In New York City the international
/ banking house Of Mcssrs. Kuhn. Loeb
e Co, with its large foreign clientele
and connections. whilst only quaiincdly
allied With tho inner group yet
through it's close relations with the
National City Bank and the National
, Bank OF Commerce and other financial
I Institutions. with which it has recently
allied itself. has many interests in
common, conducting large Joint ac-
count transactions with them, cspe
cially in recent years, and having
what virtually amounts to an under
standing not To compete, which is de-
Tended AS principle OF banking
ethics. Together they have with IL
few exceptions, pre-cmptcd the bank
ing business Of the important railways
of the country
The Chicago Group.
'ln Chicago, this inner group asso-
ciates with and makes Issues of Sc
curities in joint account. or through
lnr Il Iii,
with the First National Banll and the
Illinois Trust and Savings Bank, and
has more or less friendly business re
lations with the Continental and Com
merciai National Bank. which partici-
pates in the underwriting of security
issues by the inner group.
These arc the three largest financial
institutions in Chicago, with combined
resources of 1851. 900, 600
"Radiating from these PRINCIPAL
groups and closely affiliated with
them are smaller but important bank
ing houses. such as Kissell, Kinnicut &
Co, White Weld & Co, and Harvey
FISK " Sons, who receive large and lu-
cratiNc patronage from tho dominat-
ing groups, and arc used by the lattor
as loDhers or distributors OF securi-
Ties the issuing OF which they control.
but which for reasons OF their own
they prefer not to have issued or dis
tributed under their own names.
Messrs. Lee, llgCinson & Co. besides
being partners with the inner group,
are also frequently utilized in this SER
vice because OF their facilities as dis
trlbutors OF securities
Beyond these inner groups and sinh
groups are banks and bankers through
out the country who cooperate with
them in underwriting or guaranteeing
inc sale of securities offered 10 the
! public. and who also act AS distribu-
tors OF such securities
The patronage thus proceeding from
inc inner group and its subgroups Is OF
great value to these banks and banll-
ers. who arc thus tied by self-interest
10 the great issuing houses. and may
be regarded as part of this vast II
| nancial organizations"
Situation of Peril.
Concluding it's findings as to the ex
! istencc OF money trust the committee
I said
Your committee is convinced that
+ however well founded may be the as
suiances of good intentions by those
now holding the places of power which
I nave been thus created, the situation
Z 's irauSht win too great II peril to
our institutions TO be tolerated.
Discussing the control OF issues OF
! securities by this so-called monev
! trust. the report said
I Through their power and domina
I tion over so many of the largest fl
! hahciai institutions. which as buv
ers' Underwriters. distributors or in
'estors' constitute the principal first
outlets for security issues tho inno,.
Sroup and its allies have drawn 10
themselves practically the sole market
,he Oh Tie issues of the greater rail
/ 'oad' producing and trading, and pub-
"c ut'iitN corporations. which in con
sequence nave no open market to which
! 40 appeal; and from this position of
Hntage fortified by the control exert
Ell by them through voting trusts
representation in directoratos. stock
aoidinSs fiscal agencies and other re-
.atiohs. they have been able in turn ia
ttreci me deposits and other patronage
lahciai institutions. thereby strenptb-
sning the instruments through which
! .hey work" N"