Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1913-03-06
AMERICA IN GRIP
Of MONEY TRUST
Majority Of Pujo Committee
Find That Morgan Heads
Inner Ring

u.N NC SuIoeu ny stringent Iederal
regulations as to the conduct of ma
tlonal banks. clearing houses and stock
exchanges were the findings of the
Rouse money trust committee, set
forth In the majority of Its investiga-
lions filed in the House.
The report, signed by Chairman Pujo
and the SIX other democratic members
OF the subcommittee which conduct
ed the money trust PROBE was accom-
panied by. two bills. one to regulate
stock exchanges through forbidding
the malls to exchanges that do not
comply with federal regulations, and
the other to regulate clearing house as
soclatlons through forbidding national
banks TO join such associations unless
FEDERAL regulations are observed. In
the latter bill. proposed as an amend
ment TO the national banking act. the
conduct of national bank officers and
directors is closely restricted.
Money Trust Defined.
On the question of the existence of a
money trust, the report is specific and
detailed.
1T would, Of course, be absurd, %
said the report, Ito suggest that con-
trol OF the bulk of the widely distrib-
uteo wealth of a great nation can be
corralled by any set Of men. If that
IS what is meant by gentlemen. who
deny the existence of q money trust.
your committee agrees with them. 1t
is not, however, necessary that group
OF men shall control directly the small
savings in the banks nor the scattered
resources of the country in order to
~monopol1ze the great financial trans
actions or to be able to direct credits
to be extended or withheld from busi-
ness enterprises
Inc great bank or banker, with ac
cess to the main springs of the con-
of 9th 49,.
money! the report declares, can han
ole the vast issues of securities now
demanded by the commercial and in
dustrlal development of the country.
put the bank reserve system, it is
further commended, concentrates a large
part OF the funds of the smaller banks
IN New York, where a group of men
nave strengthened their interest in the
various banking institutions, the re-
port said
How System Works.
IT. therefore. by a money trust is
meant an established and we'll defined
identity and community of interest be-
tween few leaders of finance which
has been created and held together
through stockholdings, interlocking di-
-rectorates and other forms of domino
ton over banks, trust companies. rail-
reads public service and Industrial cor
porations and which has resulted in
vast and growing concentration of
the control of money and credit in the
hands OF comparatively few men,
your committee has no hesitation in
asserting that the condition thus des-
crlped exists in this country today
TO say that the domination of this
group over the money and credit Of
the country controlled by our largest
hnanclal institutions and that is avail
able for financing large security issues
le.F<
interstate corporations and of the in
dlvlduals conducting great enterprises
ana for stock exchange loans, is at
least as effective as, for instance, is
the control of the United States Steel
corporation over the steel industry. is
an understatement of the situation, al
though the methods by which this con-
troll is effected and together are. of
course. essentially different, and of a
more loose and intangible character. !"
Morgan Is Its Head.
!, Accepting this as the long sought
money trust" the committee outlined
the membership as follows:
The parties to this combinat ton or
understanding. or community of inter-
est by whatever name IL may be called
may be conveniently classified, for the
purpose of differentiation. into four
separate groups. The first which we
VIII call the inner group, consists of
j. P. Morgan & Co, the recognized
leaders, and George F. Baker and
James Stillman in their individual ca
pacities and in their joint adlninistra-
ton and control of the First National
bank. the National City bank, the Ma
tional Bank of Commerce. the Chase
National bank, the Guaranty Trust
company and the Bankers Trust com
company. with total known resources.
IN these corporations alone, in excess
n -
smaller but important financial insti-
tut1ons. This takes no account of the
personal fortunes of these gentlemen.
CLOSELY allied with this inner group
ana indeed related to them practical
ly as partners in many of their larger
hnanclai enterprises. are the powerful
International banking houses of Lee.
Hlgglnson & Co.. and Kidder, Peabody
& CO.. with three affiliated banks in
Boston.
Banking Ethics"
In New York city the internationa,
banking house of Messrs Kuehn. Loeb
Co. with its large foreign clientele
ana connections, whilst only qualifiedly
allied with the inner group. vet through
Its close relations with the National
City bank and the National Bank of
commerce and other financial institu-
tons with which it has recently al
lied Itself. has many interests in COM
mon. conducting large joint account
transactions with them, especially in
recent years and having what Virtually
appoints to an understanding not to
compete. which is defended as prin
ciple of banking ethics Together they
have, with few exceptions, pre-
empted the banking business of the i'm
portant railways of the country.
In Chicago this inner group assoc
c1ates with and makes issues OF Sc
eurities in joint account, or through un-
aerwriting participations primarily
with the First National bank and the
illinois Trust and Savings bank and
has more or less friendly business re-
lations with the Continental and Com
mercial National bank, which partici-
pates in the underwriting of security
Issues by the inner group. These are
the three largest financial institutions
In Chicago. with combined resources of
1851. O10, 900. d
Some Smaller Concerns.
"Radiating from these principal
groups and closely affiliated with them
are smaller but important banking
houses. such as Kissel, Kinnicut & Co:
White