The Birmingham age-herald., 1913-01-25


dependent absolutely" replied Dawson.
He added he know of no bank in New
York controlled by another institution.
Witness distinguished between control Of
stock and control of the management of
banks. Mr.. Dawson reiterated that a law
preventing interlocking directors would
set the country hack a quarter of CEN
tury. He agreed with Mr.. Untermyer
that it might be well to cut down the size
of boards of directors
II want to say this" Dawson continued
There is situation in this country which
will be remedi I'd only when the currency
sy stem Is reformed. This concentration
rot only Is not a peril, but it has been
benefit to the country under present con-
ditions."
Then you think it ought to be ex-
tended?"
II decline to arswer.e
would you say that IL would be
greater benefit If all the banks of New
York were consoiidated?'
THAT could not be DONE" witness re-
Piled II say the situation in New York
today is a benefit and not a menace. This
concentration. however, will continue to
increase until the currency laws are re-
formed"
And you would aid it to increase?'
We would do what Isl best for the
country"
Mr.. Dawson made this reply with en-
phass.
"You mean what you believe is best
for the country?'
Yes: what I'VE believe is for the best"
''If all the reserves in New York were
concentrated in the hands of Mr.. Morgan,
Mr.. Stillman, Mr.: Baker, and their asso-
ciates. would not that increase the con-
centration of credits in their hands?'
Concentration of General Credit
Witness said 1t would undoubtedly re-
suit in the concentration of the resources
in their hands. but would not increase re-
sources or the concentration of general
credit Mr.. Dawson was not opposed TO
the system of cumulative voting in cor
porations, but was inclined TO believe
there should be some restriction in the
case of financial corporations. He SAID
he approved a law prohibiting bank Off
GERS from borrowing from their own
banks but was opposed to barring direc-
| tors from borrowing from their institu-
| tions
| Witness said he would favor a law en-
| forcing complete publicity of intermediate
profits made by financiers in floating So
curites and woad approve of forbidding
| bank officers and banks from participa-
ton in syndcates formed for floating Sc
| curities.
| Mr. Jyntermyer brought out that jan
uary IA J. p. Morgan & Co. had deposits
of $12s, 100000 and had in various banks
| $16 O00, 600.
Witness offered a long list relative to
| concentration, but the committee with
held 1t from the record until it could be
examined. When Mr.. Dawson was ex-
cused, James j. Hill was called.
Mr. Hill opened his testimony with 4
list of his directorates in New York and
Chicago banks. and in the Great North
ern and Burlington railroads, saying that
the Great Northern and the Northern Pa
cific railroads were common carriers and
creditors.
when the Northern Securities COM
rany was dissolved" he said, we re-
ceived 1000 shares of Great Northern
and $1,000 shares of Northern Pacific
He now has 20 900 shares of Great North
EN- and Louis w. Hill. his son, has 1850
| shares.
Mr.. Hill testified he was director in
the First National bank of st. Paul. one
Of the largest institutions IN the north
west.
He disagreed with Untermyer's sugges-
ton that minority stockholders be given
representation in directorates through
cumulative voting. He said that such
system might allow competitors to secure
corpora tions secrets by securing a
place on it's board.
On the question of nterlocking directors,
Mr. Hill said that ne held that the pro-
p1;ety of the practice rested entirely upon
the character of the individual.
Condition of Country Responsible
In this connection it is important to
note that the country as a whole has
leen growing so rapidly that as whereas
in 1900 New York city banks represented
cS.2 per cent of the banking resources of
II e United States, they now only repre-
MT only a n
solidation and cooperation of banking in
stitutions, which has been noted in New
i ork and In only less degree in Chicago
and other financial centers, this has taken
place chiefly since 1907. In that year
the country was swept by disastrous
panic which in New York and elsewhere
under our weak bank system was stayed
only by the united efforts of the banks
driven thereto in order to preserve them
selves and to avert widespread calamity.
An additional factor tending toward con-
soidation into larger financial digits lies
In the rapidly increasing demands of this
country for development and commerce.
In every other commercial country banks
have adapted themselves far more rapidly
10 such demands and the enlargement and
consolidation of banking institutions has
ev erywhere else proceeded at rate not
even remotely approached in the United
States. At the invitation of your commit
tee your firm mas cO-OpeTdteQ IN lnlS IN
aalry, has furnished intimate details of
its business and has placed at your dis
pnsal all the information available. 1t be-
lIeyes that there is no such thing, either
in FORM or in fact, as a money trust
It believes, as its senior member has tes-
t.fied on this stand, that the only perma-
rent influence possessed by men promi-
nent In financial affairs Is that due to the
confidence of the public in their character
and record. We believe that the country
Will continue to be subject to financial
Ills and disturbances until it possessed
strong and more scientific banking and
currency system. To secure prompt and
correct legislation in these matters our
flrm, and We believe bankers throughout
the country, hold the same conviction,
their power could be augmented by CO.
Operating with Congress
Mr. Hill was excused after a brief exam
ination. Robert Windsor of kidder, Pea
tody & Co. of Boston, the first witness
ct the second session, was questioned in
detail as to the bond and stock issues
in which his firm had been interested
jointly with j. p Morgan & Co., the
First National bank, the City National
hank and other New York firms. He said
his house did not usually offer partici-
patton in bond syrdicates to national
hanks or their officers. but he could see
nc reason for prohibiting this practice.
Gardner NJ Lane of Lee, Higginson a.
Co., Boston, was questioned along sim
l&- lines. He opposed the principle of
C. mulative voting by stockholders.