The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-05-26


spontaneous origin published herein.
All rights Of republication OF all other
matter herein are also reserved.
The Morgan Probe
Why the powers that be" con-
tinue to be the powers that be is
pretty definitely disclosed by evil
dence presented In the inquiry into
j. P. Morgan and company.
Politicians seeking to curry public
favor by putting this banking firm
on the rack probably will paint the
situation much blacker than 1t
really is and overlook the good points
of the House of Morgan which have
been disclosed.
Despite this tendency toward over
emphasis, however, there are some
things in the system which Morgan
represents which may be i11imical to
the public interest and which the
public should decide If it wants to
continue.
In its primary function as bank,
that of keeping other peoples money
safe so they can get it when they
want it, there can be no criticism
Of the Morgan firm. 1t is one OF
the most highly liquid institutions In
the world, approximately 80 per cent
OF its assets being in items readily
convertible into cash or in cash it.
self. AS q bank 1t is impregnable
and that is to its credit.
The real trouble, and the source
of the firms power, is its relation
ship with other bankers. As a bank
for bankers it has been on the Gin
side of the inside" in most Of the
financial manipulations of the coun-
try. From the sources cultivated by
this method it has obtained informa-
lion we'll in advance Of its dissemina-
lion 10 the general public. It has
seen placed in position to make ire
mendous sums from this source
alone.
Then, too, this banking house has
sponsored many consultations, IA
vorite method Of turning water into
cash at the expense Of the public.
The late ]. Pierpont Morgan engi-
neered the steel trust and his sue
cessors have been following in his
footsteps.
The Allegheny Corporation, organ
lied by Morgan's for the Van Swer-
ingen brothers as holding company
for the Nickel Plate, Erie and other
railroads, is a splendid illustration
The Van Sweringens, Cleveland
promoters, did not have enough
money to swing the purchase of these
properties but it got the necessary
backing from Morgan. Hence Nor
gan's, through the Van Sweringens,
controlled q railroad.
Then the firm sold these securities
to investors everywhere, but control
Of the company was retained by the
men who participated in the inside
deal. It may or may not have been
advantageous to the investor but II
does serve as counter-argument to
the oft-advanced theory that the
public owns the big corporations.
As to the sale Of stock to Secretary
Woodin, Senator McAdoo and others
below current market prices, thers
: may be q reasonable and not alto.
gether unwholesome explanation fol
that. In neither case can it bt
charged as a bride because neithel
held public office when the purchase
was made.
But Woodin was the head of {
great corporation engaged in build
ing railroad cars and making railroad
supplies. BY selling him a substan
tial block of Allegheny stock h
would become interested with tn
Morgans In the railroads which tn
holding company controlled. Their
were pleasant possibilities OF prof
there for Mr.. Woodin in addition t
any dividends he might receive. In
directly there also may have bee
possibilities for additional profits fo
the House Of Morgan. If Mr.. Wood,
for example, had financing to do, b
would hardly 60 elsewhere.
Viewed from past standards thel
was nothing wrong about any Of tn
business. The question now is ha,
standards changed sufficiently
warrant the government in doi1
something about it?
Getting a Bad Break
- IA p,