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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (Dec. 20, 1912)
thk lMORMXi: flKKfrllNIAN. FRIDAY. UJiCiiJIJiii'K '40, , 'kJ"r"' MONEY CANNOT BE CAMERA STUDIES OF WORLD'S FINANCIAL KING, WHO STARRED AS WITNESS IN MONEY TRUST PROBE. KRYPTOI STORE OPEN EVENINGS UNTIL CHRISTMAS Our Great Year -End LtYwtsj(Ttmvyj FAR VJO 1 j I l , . ' CORNERED mm y 23 J 1 y" Financier Tells Committee Abuse of Power Means Loss Without Recourse. CREDITS ARE "PERSONAL" Loan to Wrong Man Would Be Can crllrd, Kvcn Though It Was Se eiirrd by United States Bonds. Is Declaration. c ontinud From First Pagf. "I m not seeking it either." "This consolidation and amalgams tlon of svstems and industries and banks does not look to any concentra tion does it?" asked Mr. Untermyer, wuh a smile. "No, sir."' answered the witness, i '"It li for the purpose of coneentrat ing the interests that you do amalga. mate, is it not?"- - "If It is good business for the inter' esta of the country to do it. I do it" 'But. Mr. Morgan, is not a man like ly, quite subconsciously, to imagine that things are for the Interests of the country when they are good business "No, sir." -you think that you are able Justly and impartially to differentiate where your own interests are concerned Just as clearly as though you bad no inter est at stake, do you?" continued Mr. Cntermyer. "Kxaetly, sir," replied the witness. "And you are acting on that assump tion all the time, are you notr' "I always do." "Of course there is a possibility of your Judgment's being mistaken, there not?" Judo-meat In Defraded. "Oil. I may be wrong In my Judg ti.pnL but I do not think It leads in that direction." "Does it not go somewhat on the the ory that the wish may be father to the thought?" "tVhat is your question?" 'That the wish to bring these Inter ! tnerther mar lead you to believe the country Is not Injured by that sort of concentration." "I do not th!uk so." Later Mr. Untermyer touched upon the basis of money control. -The control of credit involves the cuntiol of money, does it not?" he asked. "No." said Mr. Morgan. "What I call money is the basis of banking." "But the basis of banking Is credit Is it not?" Meaey la Gold ! KUe. "Not always." said the witness. "That Is an evidence of banking, but It Is not the money Itself... The money Is gold and nothing else." Out of the discussion that followed, Mr. I'ntcrmyer drew the fact that com paratively, little money exists for the vast superstructure of credit which it supports. "Jf you had the control of all that represents the assets in the banks 01 New York, you would have control of all that money." he suggested. "No. you would not," answered Mr. Morgan. "If a man controlled the credit of a country he would control all Its af fairs." said Mr. Untermyer. "tie might have that view." retorted the financier, "but he would not have the money. If lie had the credit and 1 had the money, his customer would be badly off." Mr. Morgan again declared that money could not be controlled. He f added that many men had great credit who had no money. "Is it no because it is believed they have money back of them?"' asked Mr. I'ntcrmyer. "No. sir. it is because people believe In the man. I have known a man to come into my office and I have given him a check for ll.000.000. when I , knew lie had not a cent in the world." Mr. Morgan was led at some length Into a statement of his viewa on com bination and concentration of financial affair. Mr. Morgan reiterated that he was an advocate of combination and co-operation, although he did not ob ject to the competition. "Without you have control," he said, "you cannot do anything." "Is that the reason you want to control everything?" asked Mr. Unter myer. "I want to control nothing." retorted the financier. "There Is no way one man can get a monopoly on money?" asked Mr. Un termyer. Credit Xot rBtrollabtr. "Or control of it" replied Mr. Mor gan. "He can make a try at it?" "No, sir. he cannot He may have all the money in Christendom, but he can not do it." VI f you owned all the banks of New York, with all their resources, would you not come pretty near having a control of credit."' asked Mr. Unter myer. "No. sir: not at all." "Suppose you owned all 'the banks and trust companies, or controlled them, and somebody wanted to start up in the steel business against the United States Steel Corporation and wanted a vast amount "of capital and It was a pood business. New York would be the natural market for money, would it not?" "Yes." - "I wanted to know whether. If you controlled all those banks and a com petitor came along or a potential com petitor, who wanted to compete, whether he would get the money from these baaks you control?" asked Mr. Untermyer. Cnmpelltar Could Uel Money. . "Yes, he would." replied the finan cier. "Some other man who might control might not take the view you have?" susaeMed the lawyer. "He would not have the control.' re plied Mr. Morgan. "Your idea is that when a man has sot a vast power, such as you have you admit you have, do you not?" "I do not know It. sir." "You admit you have, do you not?" "I do not think 1 have." said Mr. Morgan. "You do not feel It at all?" asked Mr. Untermyer. "No. I do not feel It at all," replied the bunker. "Well, assuming that you had It. your !'! I that when a man abuses it he loiej it?" "Ves. and he never Rets it back asti:. cither." "Have yoj any instance in your mind any jncli man who has had such r:;:, ( -li 1 l j l power and control in order to experi ment with it?" Ctaeatlom of Coatrol la Peraoaal. 'No. 1 know from experience." saio. Mr. Morgan. 'Experience of your own? 'No, I am talking about the expe rience of having things. What I mean to say Is this: The question of control n this country at least is personal; that is in money. 'Have you not seen many Instances In the history of this country of finan cial men s-ettlng vast control and abusing- It through a long period of years before they lost It?" asked Mr. Untermver. 'Not one particular line. and. nobody that has what you call a money trust or anything 01 . tnai Kino, saia Mr. Morgan. You admit, do you not. that men may get control of railroads or busi ness enterprises and monopolize them and so abuse their privilege?" Yes." And you say that so far as the control of the credit is concerned they cannot do the same thing?" Of money, no they cannot control t," said Mr. Morgan. CompetKloa la Preferred. "The thing goes back to the question of the control of banks and trust com panies in New York," said Mr. Lnter myer. "Do you think that a competi tive condition In banks and trust com panies in New . York is more or less preferable than a concentrated, control over these banks?" "I would rather have competition.' said Mr. Morgan. After ascertaining the number of voting trusts in ,JVar!uu railroad and ndustrial corporations tnat were neia by members of the firm of J. P. Morgan Co. Mr. Untermyer asKea: , Assuming you were the voting trusts I for all of the great systems or rail-1 roads in the United States It would con- en trate control in you. would it notr It would be a concentration in my and a. but the board of directors are the ones and you do not put the same board in every company, saia r. Morgan. Sometimes they come pretty near It?' said Mr. Untermyer. No, sir. never." said Mr. Morgan. Take the banks of New York. Do you realize the Identity 01 oireciors in the bank?" "I do. but the number of directors s very small in proportion to them all." But do you realize this vast and dangerous concentration through having these same directors in various nstitutionsT 'No. sir, I do not see any danger in t at all." replied the banker. Do you think that competitive in- titutions that ought to be competi tive, should have the same boards?" "Certainly not." "Do you think they ought to have preponderating Influence In each board T' I do not said Mr. Morgan. "Do you see nothing improper in havinsr the same men looking into one another's business in competing institutions?" They are not looking Into each other's business," added the witness. "Geaeral Dlreetor' Doea Not Know. "It is the duty of a director to know what is going on in his bank, is it notr". But a general director ioes not know. He does not see tne dooks, Mr. Morgan said. Mr. Morgan Insisted that witnoui actual control of directorates inter locked directors held no power. "You take three banns, ne saia. and then take three men ana put them in each of these banks. In one bank they are three out of the 25; In another they are three out or z: in another they are three out of 10, if ou like." "But suppose you have named all the other directors," said Mr. 1 nter tnyer. "suppose you have a voting rust and you nave unaer tne power given by that voting trust named the whole board, as nal Deen none in meise ro cases of the Guaranty TruBt and the Bankers' Trust?" I am not talking about voting trusts now; I am passing now upon the question of three directors who go nto three or four or 10 banks. 1 say hat these three directors and I have been in a good many banks ana a good many corporations I defy any man to go Into one of those boards, even myself I will say that for the sake of argument I do not believe I could carry any one question . through any board that I was a director of against the views of the directors." Majority Deelared Eaaeotlal. "Is that all you wanted to say?" "On the contrary, I have a great uantity of cases where I could bring n prooxs 01 11. i nere is no quesuvn of control, unless you have not a ma jority of the Directors, In all DanKs, said Mr. Morgan wun empnasis. Karly In his testimony Mr. Morgan was lead by Mr. Untermyer into a dis cussion of the various banks in which members or the firm or J. f. morgan Co. appear as oirectors. "You do not watch the details as o the management 01 any 01 uicso banks do you?" he asked. "No." "Who attends to the questions of management that come , up with re- pect to these nanus wun wnicn you re Idetified in your urm: "Any one of the firm. "Any one who happens to know bout that particular business?" asked ho lawyer. "Yes." replied Mr. Morgan. "You are doing everything you can I - J 7 J. Plerpont Morgan. Photo copyrighted by Bain News Service,. American Press Association and Montauk Studio. to protect the prosperity of those in stitutions in which the members of vour firm are directors, are you not?" "We do not bother ourselves much about that They look after them selves." "Why do members of your firm, in some instances two members of your firm and in some instances three mem bers of your firm, go on the board?" "Because we have large interests to protect." "In the protection of that large in terest do you not look after the banks at all?" asked Mr. Untermyer. "Not to any extent" "It takes the time of your partners, does it not?" "Yes; I have already remarked on that a great many times. It takes too much time." "But still they remain there, do they notr "They do." "And when they are there I suppose they do their utmost to add to the prosperity of the institution?" "They always do that I hope." "That is what they are there for?" "That is what they are there for," agreed Mr. Morgan. The general subject of the power and privileges of "voting trusts" hold ing the stock of corporations elicited a long discussion, in the course of which Mr. Untermyer got into the rec ords statements regarding a series of trusts held by members of the firm of Morgan & Co. for years. "Can you name any instance in which the board of directors in these various voting trusts has undergone any con siderable change after the expiration of the voting trust from the way in which it was constituted under tho voting trust, except that where deaths occur the vacancies were filled? "I think very seldom," said the wit ness. "You think they generally continue the same board?" ' "Yes, they are generally pretty well satisfied with what they do." "Who?" asked Mr. Untermyer. "The stockholders, sir." "Have you ever known an instance in the history of corporations in this country where the stock was largely scattered in which the stockholders, however dissatisfied, have ever suc ceeded in procuring a change of man agement?" "I do not recall any at the moment." "Is it not true that In this country, unlike other countries, it is difficult to get the stockholders to take any active interest in their companies?" "That is -ery true. That is the rea son why a voting trust is so desirable," said Mr. Morgan. "That is the reason of this paternal ism on the part of the financial gentle men who reorganize the company?" asked the lawyer. "That is the reason why tn reorgan- HA m. Lens Beware of Imitation Kryptoks The great success of Kryp toks has caused many infer ior imitations. You are absolutely sure of the genuine Kryptok lenses when you come to us. We Sold Them First We Fit Them Best FACTORY ON PREMISES. THOMPSON OPTICAL INSTITUTE 209-10-11 Corbett Bldg., Fifth . and Morrison, Second Floor. lzing a company we employ tnat meth od so that it can be. protected," said Mr. Morgan. Mr. Morgan had Mr. Untermyer read Into the records the report of the vot ing trustees of the Reading Railroad Company, made in 1904, when the trus tees surrendered the company to the stockholders. Mr. Untermyer read the figures show ing the prosperity voting trustees had brought to the Reading. "How much has the price of coal been raised?" asked Mr. Untermyer. Mr. Moruran said he did not know. "You do not know how much the Reading has Increased the price of coal to secure this prosperity?" asked Mr. Untermyer. "No. I do not know what the price has been," said Mr. Morgan. "The idea is that a voting trust is a necessity to a big company in its Infancy, in order to prdtect the company. - Mr. Untermyer asked whether Mr. Morgan thought competition among banks or concentration would be bet ter. "I'd rather have competition," replied Mr. Morgan when pressed for an an swer. He said he thought several men could be directors in different banks and coniDetition still be maintained be- tween the bankers. He added that he did not believe any one man should run a- great enterprise. "Don't you run your firm?" "No, I do not" He said he did not favor one man control of great enterprises of any kind, even railroads. "You believe in concentrated pow er?" asked Mr. Untermyer. "Well, that Is a question of person al power of personality, replied Mr. Morgan. The activities of J. P. Morgan & Co. as fiscal anents for railroads and other interstate corporations formed the basis for another long phase of the examination. Securities Iaaoea Large. Mr. Morgan placed In the record the agreements by which the firm handles the securities of the New York Central and the New York, New Haven & Hart ford railroads. The general policy or urivate banks handling big issues of securities also was taken up. These issues of securities of inter state railway companies are in vast sums, are tney noi, running raw me hundreds of millions of dollars a year many hundreds of millions of dol lars?" asked Mr. Untermyer. "Yes. sir," answered Mr. Morgan. "For the different companies you is sue many, many nunarea minions year, do you not?' "Yes, sir. "Do you not think it would be en tirely feasible that securities or sucn corporations should be openly market- (Conchlded on Page IS.) Indigestion Gas and Misery VANISH A Fifty Cent Box of MI-O- NA Stomach Tablets Will Keep Your Stomach Feel ing Fine All the Time. Relief in Five Minutes. Probablv your stomach Is upset and needs attention; that's about all that alls most people. You ought to have MI-O-NA Stom ach Tablets with you all the time at home or away from home. 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WITHOUT PKOFIT TO IT &EL.F, the exclusive eutput of bis val uable book for Portland. Cut the above coupon from six conseoutlvs Issues of The Oregonlan and present them with o cents to cover the bar cost of manufacture, freight and handling and a copy will be presented to you without additional ob Hear in mind that this boon has lorn a most carelully written; that ever? chapter. In it Is vouched for by an. authority; that it Is Illustrated frc i photographs taken especially for it; that it is writ ten la large, clear type on fine book paper and bound in heavy cloth la aa attractive, durable manner. A I VALUE FOR 60 cents. Act quickly if you want a copy. Save six consecutive coupons and present them at The Oregonlan office, ilxtli and Alder streets. Each Book by Mail 15c Extra for Postage and Wrapping V