The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1933-09-07

ing it herewith in full:
i THE CHANGING TREND IN BANKING
The development of business in the United States
may be divided into three The first
characterized by free competition between industries
and the exploitation of natural resources; the
second by the growth of industrial monopolies
troled within Industry; and the third by big bank
control not only of credit but of Industry itself.
During the latter era in which still lv-
ing, large banking groups became the virtual owners
of manufacturing and other industries and of
public utilities; and also engaged in huge I'M
dertaking of unloading both public and private
curities upon the investing public. The control of
the credit of the Nation concentrated in fewer
and fewer hands, together with the ownership and
control of the wealth of the Nation. Chain banking
has increased tremendously.
The greatest concentration of industrial and,
banking control is found within the House of Morgan.
The House of Morgan with nineteen partners has 219
directorships in other banks 642 directorships in
miscellaneous corporations 215 directorships in in
companies 425 directorships in manufacture
ing and mining corporations 423 directorships in
transportation companies; 318 drectorships in public
utilities making grand total of 2242 drectorships
in practically every important business. The House
of Morgan has directorships in corporations with
of seventyfour billions, one-fourth of
all the assets in the United States. The House of
Morgan controls $3.50 of the banking resources of the
Nation. AS matter of fact the House of Morgan is
the banking system of this country.
The extreme concentration of control of money
credit disclosed by the holdings of other
banking houses. Twenty-four large New York city
banks have much capitalization all the banks
States. In 1880 percent of the banks controlled
$40 of the total banking With the fail
ure of many small banks, concentration has been
accelerated since that time. The eight large banks
in the city of New York,-the Bank of America Ma
tional Association Bank of Manhattan Trust Co.;
Bankers Trust Company Chase National Bank;
Chemical Bank & Trust Co.; Guaranty Trust Com
pany National City Bank Company and the New
York Trust Company have 3741 directorshps in the
important business enterprises of the United States.
If add the sixteen other banks in New York City
to the eight have just used find that the "a banks
in New York City have $3.50 directorships in banks
and leading business enterprises of the Nation. That
represents financial olgarchy with vengeance!
BY the end of June 1929 there 275 chains
of banks in the United States controlling 1902 unit
banks, of which CAT national banks and 1155
state banks; and of which 108 Federal Reserve
banks. By June go 1890 this number had increased
to 2ss chains in the United States It is remarkable
fact that 1870 of these chains in states with
either prohibitions or no legislation branch bank
ing.
These big banking groups that have heretofore
referred to did not content themselves with purely
banking business. They engaged extensively in the
marketing of foreign securities, and in fosting them
upon the people of the United States. Between 1914
and 1880 about fifteen billion dollars worth
of foreign securities oated in this country Commits
sions of these bankers such transactions aggre-
gated about one billion dollars. These loans
curities deprecated about 500. The foa-
tton of these securities not only involved direct loss
to investors but the means of bringing about the
closing of many small banks which were obliged I'M
der the big bank control system to purchase these
foreign securities for their bond accounts The clos
suspension
States can be traced directly to the impairment of
their bond accounts through the depreciation of the
foreign securities they obliged to buy.
This great concentration of money power not
only destroyed Independent banks and throttled
credit of the country but did represent safety
to the depositors During the ten years which ended
Nation Included among the failures in the 1921 to
1929 period 226 banks with deposits of $1O2
600 belonging to fifty different chains. Within that
same period Al branch banking systems, with de-
posts of $49,OOO,OO0 suspended operations. Since
1929 there have been several chain bank failures
'volving stupendous sums.
not contending that deposits in chain banks
per insecure, but pointing out to you that
the menace of big bank control of money and
credits in the United States has not carried with it
the security of recovery of deposits in such banks
The control through concentration of capital, of
the credit of the Nation has carried with it the
troll of the agencies of government which are set up
by the people for the very purpose of regulating
money and credits. That control has extended
to the Federal Reserve System.
In the agricultural west there was a heavy NOR
tally among banks during the defation period which
commenced in 1920 So far the farmer Of the west
is concerned his economic depression commenced at
that time and not in 1929.
Many of the banks that failed were members of
the Federal Reserve System. Many of these banks
situated in rural communities and dealt al
most exclusively in farm paper It cannot be denied
but that the Federal Reserve Board in 1920 under
took to its with reference to the contrac
ton and expansion Of credit for the purpose Of dea
ton 1t has never been successfully denied but that
it rthlessly singled out Agriculture immediate
fation. 1t said in substance to its member banks:
Call all farm loans and do not renew them" Evil
dence is not wanting that it Disseminated of
speculative stock market and industrial credit as
against farm credit It is fact that the Federal Re
System contrary to the spirit of the Federal
Reserve Act, permitted its funds to be employed in
speculation before and after the deflative
1920 It is fact that the action Of the Federal
Board in demanding collateral for
upon farm property and in refusing to farm
paper forced down the price of farm products by
preventing the farmer from holding his products
al q a ire
mendous surplus of farm products to be thrown upon
the market The condition contributed to by the Fed
eral Reserve System with reference to It's member
banks inevitably spread to nonmember banks in the
agricultural districts. The agricultural banks be-
came frozen with farm paper which could not be