Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-02-16
Morgan parfneyship
10 Become Public
Corporation in April
Privote Bonkins House
To Be Trust Company;
Copitol SO. COT, 900
BY the Associated Press.

ay tue AA8OGkHttO EE0S0. "a / L
NEW YORK, Feb. l6.-J. p. Nor
gan & Co., the Nations dominant
private banking house for many
years, win end It's private banking
partnership and incorporate the
business under State laws ~ J. r.
Morgan d Co., Inc.-a trust COM
pany-on April /.
j., p. Morgan will head the new
institution as q public corporation
which will have q paid.in capital
of $40, 900 900 and paid-in surplus
Of $40, 900 900.
Mr.. Morgan broke q precedent OF
long standing yesterday by person.
ally distributing the announcement
to the press. He assured questioners
he had no thought Of retiring and
hoped to take an active part In the
business for many more years.
The announcement said, in part:
"The business Of ]. P. Morgan Il
Co. and its predecessor firms was
established 80 years ago by the late
j. Pierpont Morgan, father Of the
present head Of the house. Through
out the intervening years, the Arm
has continued, on a gradually ex-
banding scale, to conduct q general
banking business. The adoption
now Of the corporate form has been
determined upon by the firm, after
long elaboration, in order to per-
petuate the business and to broaden
its usefulness"
To Quit Stock Exchange.
The present New York partners
win become directors OF the new
Arm. Retirement of the institution
as q Stock Exchange member will
be necessitated by the incorporation.
1t was indicated j. p. Morgan
and his partner son, Junius 8.
Morgan, might continue to hold
their individual stock exchange
memberships for the time being
but not make active use of them.
The way will be opened for public
ownership Of the stock, although no
public Offering Is contemplated at
present. The new firm will be able
to function as trustee, not now pos
sible under State law governing
private bankers.
Drexel & Co. of Philadelphia, con-
stituent part of j. p. Morgan & Co.
since 1871, will become q separate
firm. It will continue all its present
type of business except deposit
banking and will hold membership
Of the New York Stock Exchange,
New York Curb Exchange and Phil
adelphia Stock Exchange. It's main
office will be in Philadelphia, but it
will maintain a New York office.
Under partnership, the death Of
any individual partner dissolves the
firm and necessitates the writing of
a new partnership agreement. Under
the State banking law, an incor-
porated trust company may exist in
perpetuity.
To Continue Foreign Interests.
Partners are individually and sew
orally liable for all obligations OF
the partnership, and the liability il
unltmiteA But under tho corporate
form, the liability Is limited to the
capital contribution Of the individ-
ual security holder. II one Of the
original incorporators dies, his stock
may be sold by the estate to any one
it chooses. NJ
While the Morgan Arm has az
ways been secretiye as to the details
of its articles of partnership, includ.
ing the share Of each partner, it has
long been rumored In Wall Street
that the Morgan family interest had
become relatively small compared
to that Of Thomas w. Lamont and
his son, Thomas S. Another legend
was that the late j. p. Morgan, who
founded the Arm, had imposed on
the successive partnerships an obi
cation to drop the Morgan name II
his heirs ceased to rule the arm.
The proposed corporation viii per-
petuate the firm name indefinitely
Another motive which sources close
to the bank emphasized was that in
keeping with the trend of the
times" the bank wishes to become
known as . public" instead of 4
private" bank.
May Offer Stock Later.
The bank in the past generally
has not welcomed individual &C.
counts Of less than 5000, and II
was generally assumed this policy
would not be greatly altered. Al
time goes on, however, 1t is be-
neved the Morgan bank may grad
ually offer stock to the public, viii