The Barre daily times. (Barre, Vt.) 1897-1959, 1913-03-01

sell, mas many interests IN common, con-
Quoting large joint account transactions
with them, especially in recent years,
and having what virtually amounts to
an understanding not to compete, which
is defended as a principle of banking
ethics Together they have with few
exceptions preempted the banking bus
mess of the important railways of the
country.
''In Chicago this inner group associates
with and makes issues of securities in
Joint account. or through underwriting
participations primarily with the First
National bank and the Illinois Trust &
Savings bank, and has more or less
friendly business relations with the Con-
tinental & Commerce National bank,
which participates in the underwriting
Of security issues by the inner group.
These are the three largest financial in
stitutions in Chicago, with combined
resources of 1851 100000.
"Radiating from these principal groups
and closely affiliated with them are
smaller but important banking houses
such as Kissel, Kinnicut & company,
while Weld & company and Harvey Fisk
& Sons. who receive large and lucrat
tive patronages from the dominating
groups and are used by the latter as
jobbers or distributors of securities the
issuing of which they control. but which
for reasons of their own they prefer
not to have issued or distributed UNI
der their own names. Messrs. Lee, Hig-
ginson g. company, besides being part
ners with the inner group are also
frequently utilized in this service be-
cause of their facilities as distributors
OF securities.
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 bank
ers, who are thus tied by self-interest |
to the great issuing houses and may be
regarded as a part of this vast tinan-
cial organization"
Concluding its findings as to the ex-
istence of 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 power which f
have been thus created. the situation is
fraught with too great peril to our in
situations to be tolerated"
Discussing the control of issues of Sc.
securities by this so-called money trust,
.he report said:
tbair nnuar aud domino. 1
ion over so many of the largest finan-
'ial institutions, which, as buyers, UNI
lerwriters, distributors, or investors,
constitute the principal first outlets for
security issues, the inner group and its
lilies have drawn to themselves practi-
ally the sole marketing of the is ;
ues of the greater railroad, producing
nd trading. and public utility corpora
ions, which in consequence have no :
pen market to which to appeal; and
rom this position of vantage, fortified
" the control exerted by them through :
citing trusts, representation in diree-
crates, stockholdings, fiscal agencies
nd other relations. they have been able :
n turn to direct the deposits and other I.
atronage of such corporations to those (
anne financial institutions, thereby
the instruments through !
rhch they work Z
The report condemned interlocking di-
ectorates and cancellations. and devot.
d considerable space to a statement Z
howing the development of control I
hrough those agencies in New York in !.
titutions.
1T is manifestly improper" said the I
eport, "and repugnant to the theory and !:
ractice of competition that the same =
erson or members of the same firm Z
hall undertake to act in such inconsis- !:
snt capacities
The report condemns the use Of vot- :
" trusts in the control Of financial !:
lsttutions. and criticizes private bank :.
r. in the capacity of depositaries for :
lterstate corporations. I:
The recommendations Of the commit =
,e. as set forth in the report, and as .
nbraced in the bills accompanying the !:
port urged the following reforms: .
stional banks are members, should be /.
-quired TO become bodies corporate Of =
v states in which they are located. .
ID every solvent and properly managed !.
ink or trust company should have tha !:
ght. enforcible az law. to become and y
rain q member. !.
Regular periodical examinations 81 !.
cmbers BY committee Of the Clear
z House association should b. prohibit =
and instead all such examinations -