Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-01-03
OTHER BANKS TAKE
HINT FROM MORGAN
Plan to Follow Lead in With
drawing From Outside
Directorships.
ONE OF REFORMS URGED
BY PUJO'S COMMITTEE
Whether Morgan Will Quit United
States Steel Now Topic for
Wall Street.

Wall Street.
NEW YORK. January 3.-The announce
ment of the retirement OF Z. Morgan
and four of his partners from Thrift O.
in twenty-seven corporations
and Mr.. Morgans reference 10 the chang
in public sentiment In regard to director
ships has directed attention TO the fact
that five important recommendations OF
the Pujo committee were already being
put into effect in advance of legislation
requiring them. They include the aban-
donment of fiscais agency agreements
such as existed between the New Haven
and Morgan & Co.; the abolition OF inter
locking directorates. he abolition or
voting trusts, reforms in the stock ex-
change and reforms In the clearing
house.
Whether Mr.. Morgan will decide 70
withdraw from the directorate OF the
United States Steel Corporation was the
subject of a great deal of speculation to-
day.
The general opinion was that as the So
called steel trust was the greatest OF the
Morgan creations. and was considered by
the elder Morgan the browning achieve
ment of his financial career. his son viii
consider il his duty to remain identihea
with it in an sctive way. especially until
the government suit has been decided one
way or the other.
Most Surprising Feature.
However, the Morgan firm was no less
actively identified with the financial de-
velopment of the New York Contra. lines.
for which Mr.. Morgan was the banking
sponsor throughout the greater part OF
his career. His connection with IL datea
from the time of Commodore Nandelbilt.
and during the time of William III. Van
derbilt il was through Mr.. Morgans in
fluence that English investors placed
enormous sums in the securities of the
road. The resignation of the present y.
P. Morgan from the New York Central
directorate was one of the most surpris-
ing features of his announcement yes
terday.
j. p Morgan's friends say that he has
been not only deeply impressed by the
change in public sentiment during the
last few years, but that he has been
deeply grieved over the criticism OF tine
firm in connection with the affairs OF the
New York, New Haven and Hartford
Railroad Company.
B. S. Lovett's Comment.
Robert s. Lovett, chairman OF the
Union Pacific Railroad Company. ia
commenting TODAY on the Morgan acton.
sad: Il think strong bankers on rsil-
road boards are very desirable-but IL al
depends who represents the railroad on
the board"
A. Barton Hepburn, chairman OF the
Chase National Bank, expressed the
opinion that interlocking directorates
were a good thing SO long as they did
not result in unlawful monopoly. II
have found in my personal experience,
he ADDED. that by being upon the boards
of certain corporations, l am able to get
a much better knowledge OIL their nnan-
cial standing Used for such a purpose.
being a director on one or more cor
porations is by no means injurious or ul-
.amfui. OF course. where the knowledge
acquired through interlocking directorates
IS used for selfish profits. the custom 10
to be decried.'
Baker to Take Similar Action.
The withdrawal of j. p. Morgan & Co.
from more than a score of great corpora
tons was followed shortly afterward by
a statement by George 4. Baker. an al
most equally dominant figure in Amer
lean finance, that he soon would take
similar action.
Mr. Baker announced his intention TO
withdraw. in response to question
whether he intended TO follow the eN-
ample of the Morgan firm. Il intend TO
get out as a director OF all the COM
panies that will let me-" said he. AS
matter of fact. L have been beginning 10
do SO for the past two years
Mr.. Baker is director in more than
than any other one man In the country:
Mr. Baker. who heretofore has adhered
to a policy of silence as risidly as Nj
Morgan. expressed his views IN his tesu-
mony before the congressional Puio com
mittee early last year. Speaking OF the
concentration of money and credit in the
hands of a comparatively few men, he
said: Il think il has gone far enough.
1t might not be dangerous. out stu II
has gone about far enough. in good
hands, do not see that IL would do any
harm. If it got into bad hands IL would
be very bad
Predict Ending of System.
The connections between Mr. Bake
and the Morgan firm. and especially with
the late ]. p. Morgan. wer generally re-
garded as being so close that it is be-
lieved their common decision regarding
withdrawal from interlocking directories
was reached as the result OF concerted
action. There was no evidence that any
general agreement had been reached
among other leading financiers OF Wall
street. Both Kuhn. Loeb & Co, and
James Speyer & Co maintain silence.
1t was predicted. nevertheless. by men
in Wall street who have followed the
trend Of events in finance and politics in
recent times that the days events We're
prophetic of the ending of the system
of interlocking dlrectorates which has
been bitterly attacked for years and lat
terly by members of the present Wash
ington admins tration and members OF
Congress who nave bee.. fighting what
they termed the "racney trust.
In Wall sureI that part of MIR. Nor
gan's statement in which he spoke or
Fan apparent change in public sentiment
in regard to directorships" was referred
to as q sign of the times. One interna-
tional banker, who in the past has served
as a director in many well known cor
porations, had this to say:
Effect Wholesome and Far Reaching.
There isn't the slightest doubt in my
mind that the announcement made BY
]. p. Morgan & Co. is only the fore
runner Of many similar announcements
that will be made in the near future. and
from my point of view the effect will be
wholesome and far reaching. oaly few
days ago the American Telephone and
TELEGRAPH Company showed that IL was
in sympathy with the spirit OF the times
by announcing that it would surrender
control of the Western Union Telegraph
faAa IL