jpmorgan testmony 1912
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The
Justification
of
all
Street
Compliments o
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Testimony of
J. P
Morgan
Before the
ank
and Currency Committee of the
House of Representatives, at
Washington,
D.
C.
Appointed for the Purpose of Investigating
an
Alleged Money Trust in
"Wall Street."
Cross-Examined by Samuel Untermyer, Attorney
for the Committee.
December
18
and 19 1912.
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,
morgan Epigrams
have absolute faith in the patriotism and public spirit of the
Stock Exchange.
The moral responsibility has to be defended as long as you live.
Securities do not always prove good.
I t is difficult to get stockholders to take active interest in their
companies.
do not believe could carry any question through any board
against the views of the other directors.
like a little competition but I should rathe r have co-operation.
Without actual control you can do nothing.
I want to control nothing.
There is nothing in the world by which you can make a money
trust.
do not feel that I nave vast power.
I
do not think have
power in any department of industry; am not seeking it either.
All the money and all the banks in Christendom cannot control
credit.
My firm is not run by me;
I
am not the final authority.
I believe in divided as against concentrated responsibility.
do not compete for deposits.
do not care whether they
ever come but they do come.
A bank if it transacts its business right will get its share of
the business.
Nobody wants to put money into a new railroad in these times.
I always assist young men.
If it is good business for the interests of the count ry I do it.
'
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If
I should attempt t o tell where the money is in every transac-
tion
I
make, I shou d have a ha rd time of it.
I
did it because I though t it was the thing t o do.
I
should not allow a man to be associated with me that
I
thought was a fraud, simply because he owned a bank which at
that moment was solvent.
Money is gold, and nothing else.
If a man had the credit, and
I
had the money, his customer
would be badly off.
I have given a man a check for a million when I knew he had
not a cent in the world.
The first thing is character, before money or property or any-
thing else.
man
I
do not trust could not get money from me on all the
bonds in Christendom.
never heard of a ban k being controlled by anyb ody who gave
it business.
The first thing is to get the business, and the next thing is the
way you transact your business.
I
think manipulation is always bad.
never sold short in my life that know of, but do not see
how you will get along without it.
I t is a principle of life, think.
I would not favor legislation that would reduce the volume of
speculation.
You cannot prevent the public buying a thing that
they think is low, or selling a thing that they think is high
You cannot in a bank in which you are a director, not in any
first-class bank, at any rate, go and find out how much
I have got
in that bank.
You can get combinatio ns that can control business, but you
cannot control money.
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PREFACE
A
C ' O l l l l
IT l liIC
of
Co ng ress , chasing w ha t soi ile, folks say
is a c l i imera , has e l ic itet l f ro m ~ )e r l la ps he m ost re~ iow net l
\ \ : i t l less in the country 's his tory the most vi ta l tcs t i inony.
\\'a ll S t r e e t w a s o n t ri al . S u n d r y r e p u ta t io n ~ ? l i t ~ ~ e s s e s
liatl nlatle a fee ble showitig. 'L'lie l iun tcr s of t l ie m ys teri ou s m oney
t r u s t w e r e e la te d . T h e i r l ~ r i l l ' a n tcounsel , wlio coul t l say with
-2eneas that l ie olice l iatl 11een part ~vliereofhe spoke , wa s mou ld ing
the case as a sc r~ lp tor -1:lays tt-icks with clay . scjuatl of ex p er t
acco~in tants ) i l e t l
u p
tables
of
mill ions ant1 bi ll ions, l ike Ja l~ a n e se
jugglers .
'I 'lle s ta r witn ess hat1 I>eeii s t~ m m on se t l . Chief serv i tor of the
t emple of t h e ~no ney-c hang e r swa s he-a f igure of lo v ia n m ajes ty ,
magnificetlt , inscrutable, si lent.
lc
r iva led t he S l~ l i i t ix . O nly twice .
in t l ic nlemol-y of t l ie marl te t , hat1 he casual ly ta lked of current
tl ii ~ lg s. I'acll tim e
h c
gru ff iy eni it te t l a n epigram . I I e c liagnosetl
t lie ailm ent of th e rich m en 's panic of 9 as a ca se of untligested
secu ri ti es . A f t e r t he Su pre m e Co ur t had s t a r t ed i t s a l l ti - tru s t
vivisection,
l ie tersely suggestetl the t lifficulty of un scr am bli ng eggs.
(7t l ier~ \ l isc , e l -p et~ia l i lence.
Tl i is unc ro~ viiet l
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\ \ a s per ional antl au thor i ta t ive ,
T h e m oney-k ing , vho hat1 \early
dealt in liuntlretls of millioas of tlollars ant1 not even a hanclful of
words , now d~ scu sse d ree ly an d f rank ly the technique , the code, the
e th ic s ant1 t h e ~ l ~ o r a l s ,f m oney mark et and s tock market .
What he said of private vs. public banking, of inter locked
I
t l irectorates, of m erg ers, of vo ting t ru sts , of spectulation, of cret11t
and of money, ha d behind i t his own prest ige ant1 personal i ty. I l is
yes or
11
meant pages in themselves.
Going fur ther , Mr . Morgan la id down wi th the force of unt l i s -
puted authori ty some of t l ie basic tei lets of f inance. H is t lef int t~on
I
f credit alone sufficetl to lay th e gho st of the "n ~ o n ey rus t li5
observat ions on the funct ions and the faul t s o ic banker and broker
i
set fo rth the essent ial service, while no t bl i i lki~lg the incit lental
blemishes, of the country 's ap pa ratu s f o r invest i llent an d speculat~o n.
I
H e appra iset l an d expla ine t l W al l S t ree t . H e d id not have to tle fend
i t ; he just if ied i t. I
The last ing v alue of h is s taten lent an d i ts ful l s ignificance were
i
n o t t o b e hat1 f r o l l ~ f ir st ca su al r e a d ~ n g n cont lensed and hu~-r ie( l
press not ices. I n the bel ie f tha t i t deserves a w ider an d lnore ca re fu l
at tent ion, this coinpi lat ion of Mr. Morgan's test imony is here pre-
sen ted in a m ore com plete and p e rm anen t f a r m .
I
4
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T I - I E J q O Y S E
OF
L I O R G X N
Q
IVl-lere
d o
you res ide , Mr . RIo rgan?
A . S e w Y ork .
Q A re you sei iior m em l~ e r f the pa r tne r sh ip o r f irm of J P.
h l o r g a n 8r Co. , bankers , o f New York C i ty?
A . I am, s i r .
Arc you a l so a pa r tne r in o the r bank ing houses in th i s
coun t ry an t l e l sewhere?
A. K O , I a m n o t.
Q A re you not i ii terestet l in the Philat lelphia f ir i l l?
A . T h a t
is the same th ing .
Q That is the same fir111 with the same membership? A . Yes .
Q
Is that t ru e a lso o f th e L,ontlon an t l Pa r is hou ses ?
A .
T h e
firm in K ew Yo rk ar e pa rtn er s in the I 'ar is hous e ant1 in the Loilt lon
house.
Q W i l l y o ~ i a m e t h e p a r tn e r s i n t h e X e w Y o r k a n d P li il ad e l-
1 )h ia hou ses ?
A . I d o n ot k n o w ; I th ink you have them.
A I R . S1co1.1.:
I f you wi ll rea tl tl lem over , l l r . Un te rm eyer , M r .
R ' l o r g a ~ ~i l l te l l you whether they are correct o r no t .
AIR.hlor
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4.
They are not there as ind iv i t l t~a ls .
The fir111 of
J. 1
l l o r g a n
Co. ant1 the firm of D re xe l
Co.
are p ar tner s as such , as a firm
Q
In both the London house an ti the P ar i s h ou se?
\ 111
both
the Lond on house ant1 the Pa ris house, yes.
2
i \ n t l at l t le t l to that , I suppose, are other par tners , i esldents
in T,ontlon or l'aris?
A .
Yes, tha t i s so .
Q.
Does you r S e w Y ork ho use ( lo a genera l banking l )us iness?
A. W e t ry to , s i r.
Q
Do you take t l epos i ts ? A . W e do .
I
Yl;u t lo the business that is done by a banker?
Exactly,
as fa r as we can .
Q
And you honor cl iecks against t leposi ts , just as a bank
tloes?
A .
\ I re do, excep t with u s checks d o not go throl lgli the
Clearing Iouse
11s
Dr-srx~ssMIITHOLIS
2. You c l ea r t hem ove r your coun te r , do you?
A .
W e d ra w
checks on the banks and then check through-
Q (In terr up t ing . ) Checks against yo ur fir111 ar e presentet l a t
your of f ice?
A. They n lus t be presented a t our of f ice .
Q
And you g ive checks on banks in r e tu rn?
A .
a bank
f o r t he m .
O
your fore ign houses a l so ac t as bankers in tha t sa lne
way and accept depos i t s?
A .
T he y d o ; not t o any g r e ~ t xtent 1)llt
they (lo whenever necessary.
Q Is t he re a ny business th at y o u r fir111 do es no t (lo in the biay
of the banking bus i t le i s tha t i s done by any Sta te or Kat iona l bank,
except to receive Government t leposi t i? A . K O , w e tlo not lsslle
Q
But apart from your inabili ty to issue bank notes ant1 yoL1r
inabi li ty t o receive Go vernm ent d eposi ts , you a ct as a bank with the
same power as any banking ins t i tu t ion organized under a corpora te
l a w ?
A
W e
do.
Q. Ant1 you rece ive a s ban kers in tha t way depos it s of in te r -
S ta t e co rpora t ions , do you no t?
A. Any co rpora t ion .
Q
You mean you have among your t leposi tors large t lepoyi ts
of
inter-St-ate corporat ions- that is , corpo rat ions engaged in ~ n t e r -
8
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I
L
1
I
I
I
i t a t e c o i i i m c ~ - c e ?
A
Yes; T s u l ~ l n s e \re t lo ./ l (lo ~ i o t emelii1,er
;ui \ t l ii t ll ict lon 11etwcenthem .
2 'I'hc b e t n e c n thciii i, th a t c e r ta in ~ i t ~ ~ l c t i o n corl)oi-ations
a re eng aged in co111111el-cehetw een th e Sta te5 ant1 othel-ie ng age d in
c o l i ~ m e ~ - c e F o r in i ta n ce , t h e In te rbo roughlily \v ith itl the S ta te s
C o ~ i i l~ a l l yngages in h ~ i s ~ n e i s t h e S t a t e of N ew Y or k ? n l y \ > ~ t h i ~ i
ii
Yes
*)
\\'lille t h e S o ut he l- n R a il \v a y e n ga ge s i n b u si ne ss h e tw e e n
tlic S t a t e i ?
A .
T h a t is it .
(2
1 OLI tleposits f ro m b oth clai,es of c o rp o r at io n i ?ecelve
\
\Ye r eceive de l) o si ts f r om an y co r l~o r a t lo n ha t we t li lnk good .
2
You have p repa red , have yo11not , a s ta teme nt of the a in oun t
of
mane o n
t l e l ~ o s ~ tv ~ th ou 11y ~n te r - S ta te o rpo r a t ions a t a glven
( l a te? >I
I
t1111ik
\ V C
have.
1
h a v e ~ i ' t h a t , h o \ \ e v e r .
I . T I 1 h a \ c it .
I I I
I
\ \
ill J 011 pro t luce i t , 111-.I , in t la l~ ur y?
I
I T I I
( lo not pro tl~ ice t , hut 1 ou apl)arel it ly have
it
haven ' t i t, with me.
2 .
C a n ) o u tell 11 r e fe r en c e t o t h is p a pe l-, 1 l r 1 10 1- ga ll,h o w
In an y s uc h a cc o un t5 of ~ i i t e r - S t a t e c o r l ~ o r a t i o ~ ~ s o u r fir111 hat1 at
your Sexz York ~ an k ii ighouse on the 1s t of Jan ua ry , 1912 , ant1 how
m aiiy j o u h a d 0x1 th e l \ t of N ov em ber , 1 91 2? A . I woult l l ike to
ask 11etIie1-th a t cannot l ~ c l \en b y s om e o n e m o r e f am i li ar w i th
the ac co u~ i ts han 1an1
( lo iio t k n o w a ~ l y t l i ln g l ~ o u t h e ~ n . A n y
i ta te m e nt t ha t t he) s ~ l b n l ~ to4011, 1 \ \i ll accept.
MIrosr1s
~ I I oration selects t l ie t le-
pository of the cor11o1-atic:n
4 7'he finailce committee.
Q
1\,-11o p11t All-. Frick on kinance committee.
A 1
(l id,
1
\\'ho
pu t M r. f 'erkins at heat1
o f
t l ie f inance comm it tee?
l ie t l i t l i t h imsel f .
1
can ' t reca ll a ll these th ings , M org an
conti i luecl i r r i ta l~ly.
Q
\Yho tlecitletl that
J.
T .
M organ Co . shou ld be the deposi -
tory of the ITni te t l S ta tes S tee l Cor l )ora t ion?
.\. 'Tha t w as ra the r
ex-officin, I thinlc.
2.
You ineali you tleci(led it
1)oth
w a y s ?
.\.
W h e n t h e c o m -
11ally wa sffo i-m et1 1. I f o r g a n
Co.
hat1 th e wl io le com pany a t th a t
t i n ~ e ,a n d 1 t l iink tha t i s th e way it came.
I_ .
Y o u t hough t i t was gootl I~us ine s s , nt1 so you thoug h t you
woultl talce i t?
N o ;
I
(lit1 no t know \v l~ e th e r t was go ing to he
g o ~ i l )usiiiess
or
no t a t t ha t t ime .
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Q I t t ur n ed o u t p r et ty g o o d ?
A . I t did. I 'ery good, intleetl,
s ir .
Q
You clicl not think you were taking any chances on it being
g o o d b u s ~ n e s sw h e n y o t ~ o o k i t
up ,
t h e n ? A . K O ; b ut
I
began to
have doubts when the s tock went to 8 a share .
Q Your doubts c l id no t in ter fere wi th your buy ing I leav i ly?
A .
K o ; I bought a l l I could.
2. Yo u d ~ t l o t have any doub t , clitl you ?
A . Never , no t fo r
one m oment .
2.
You were ge t t ing the advan tage of other people 's t loubts at
t h a t t i m e ? A
Yob ody e ver solt l i t at m y suggest ion, s ir .
Q
K O , I clid not meail
to assu m e that . I t only implies your
collfi tlence in the company at that t im e ? A. I always had i t , s ir .
A3 r . Alorgail coultl not tell w he the r or n ot the Steel Corpora t ion
h a s p ow er t o deal in ~ t s wn shares . H e (lid no t think the co rpora -
t ion actual l j ha t i car r ied on deal ings o f th is character . H e had no
knowledge of the re having been buying an d iel l ing syndicates in steel
stock.
Mr . Un te rmqer t l i sc l a imed any in te~~ t ionf in t imat ing tha t N r .
M~I-gan 's i rm ever had par t ic ipated in any pools o f th is character .
I s . Un te rm yer took u p the matter of untlerwrit ing syutl icates
by the M orga n f i r r i .
Q.
A n d y o u h a v e a l is t of those people whom you invite in to
these syn t lica te part icipations , hav e you no t? A Yei , s i r .
Q.
If you we re is suing an intlustrial se cur ity, you \zlotiltl prob-
ably offer participation to a tlifferent class of untleruriters fro111
that you would o ffer i t to i f you were i s iu ing ra l l road bont l i?
A
Exac t ly ; tha t i s wha t I wan ted to say.
Q I s i t no t a fac t tha t som et imei , when an i ssue i s evi tlen tly
go ing to be ve ry popu la r , you make you r a l lo tn~en t swi thout any
previou s application an d sometim es, whe n you hav e difficulty in
mak ing a synd ica te , you inv i t e app l i ca t~ons?
11
That i s wha t I
wanted to say .
2. Th ere a re lnai ly banks and t r u s t compan ies ill S e w Y ork
wh ich you permi t t o pa r ti c ipate in these un t l e rw r i t~n gs , r e the re
n o t ? A . Y e s , a g r e a t m a n y .
Q.
But 110
~ n su ra nc ecompanies, s ince the law of 190h? A K O .
Q. A nd does your l is t o f un t lerwri ters ex tend t o the o ther
g rea t c i ti e s o f the c oun t ry?
A. All of them
Q.
As a participations haveeneral
t h i n g
t h e s e u n t l e r ~ ~ l i t i u g
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been profitable?
taken.
A . Yes, otherwise you could not get any of them
Q. H av e you a vas t m arke t fo r your secu r it i e s? A . Ve ry o f ten .
Q.
T h e more people you have se ll ing a secur ity , th e worse i t i s?
A .
Yes. T h e ma rket is very ap t to be dead .
/ y . D o you d is t r ibu te these par tic ipations in Ne w Yo rk City to
all the bankin g f irms or only to some of them tha t a r e f r iends of
y o u r s ? A .
Oh
n o Of course i t var ies very much, bu t we d is -
tr ibu te to those w e think will help th e issue.
D o you not 1t11ow that there ar e some in Ne w Y ork w ho a re
never invi ted to par t ic ipate? A. V ery few , s i r .
Do yot i no t know that some of the leading banking f i rms
in N ew Yo rk Ci ty do no t part ic ipate in your unde rwr i t ing ?
A
Yes ,
sir . A g rea t many of them re fuse it .
Mr. U nte rm yer declared tha t Lee , Higginson Co. , o f Boston ,
Firs t Xat ional Bank of Chicago and o ther ins t i tu t ions of ten wanted
to participate.
"The y don ' t wo rk with us , bu t take or refu se an offer we make,"
s a id M r . M o r g an.
Q Th ey don 't o f ten r e fuse , do they . A. Oh, yes , o f ten .
Q.
T he n you of fer them another opportuni ty . A. Yes , s i r .
Mr . Morgan tes t i f ied that h is f i rm always a l lo t ted a par t o f
every la rge i s sue to Eng land , F ran ce and Germany . M r . Morga n
did not believe this wide distr ibution of securit ies necessarily made
a marke t fo r them. O n the con t ra ry , h e though t i t wa s likely to
re ta rd the marke t .
Q Have you a ; iast m arket fo r your secur i ties? A . V e r y o f t en .
Q.
T h e m ore people you ha ve se l ling a secur i ty the worse i t i s?
A . Yes. T h e m ar k e t i s ve ry a p t t o b e d ead .
The New Srork f inancier coultl not give
a
total of the securit ies
tha t we re m arketed on the average by h is f i rm in a year .
Q. H ow many secur it ies
d o
y ou m ar k e t in a y e a r ? A s m u ch a s
billion dollars?
A .
I
th ink the f igures are very much overes t i -
mated .
I can ' t reinember all of them.
I l r . M o r g an ad d ed th a t h e d id n o t th in k i t am o u n ted to fiv e o r
s ix hundred mil l ion dol lars a year , bu t he would have the f igures
prepared.
IN R E L A T I O NO I ~ A N I C S
T h e commit tee then took u p the jo int operat ions between G eorge
F.
Baker , of the F i r s t Na t iona l Bank , and M r . M organ . Mr .
LIorgan testif ied that he was a director and member of the executive
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commit tee of the Firs t Nat ional
Bank ant1 tha t he and Sl r . Baker
were o ld and c lose f r i ends . T he i r f r i en tl sh ip da ted a t l east
f r o m 1873.
Q.
D ur in g t ha t t ime your house has been o f g r e a t aid t o t he
Fi rs t Nat iona l E an k in bui ld ing up the i r grea t prosper ity an d they
have been o f g r ea t aid t o yo u?
A . I
hope so.
Q.
Ts thc re any d atu m obtainable tha t would show t he exten t
of jo in t o r par tnership t ransac t ions be tween t he F i r s t N at iona l
B a n k a n d y o u r f i r m ?
A. I
do not th ink the re i s any wa y of ge t ting
a t t ha t .
Mr . Morgan would not l ikd to say tha t h i s f i rm and the Fi r s t
Nat ional Bank had been associated in near ly every big enterpr ise .
H e could not reca ll any in which th e Fi r s t Nat iona l Hank had been
omit ted, but he fel t sure thcre were some.
M R . RiJoiiclz.
1
al t tavs offered them
any thin^
I had.
Q A n d t he y th e s a m e to y o u ?
I
think they woult l," said M r. Mo rgan , wh o hastened to explain,
however , tha t the Fi r s t Nat ional Ea nk i tse lf cann ot of course go
into s tock operat ions, a l though M r. Baker intl ividually could.
M r . Tn t e rm ye r con ten tl ed , however , tha t bo th t he F i r s t Na-
tional Bank ant1 Mr . Raker were impor tant fac tors in the under -
writ ing of the Steel Corporation securit ies.
/iQ \? 'as not the Fi r s t Nat iona l Ran k an imp or tant fac tor in
underwr i t ing Stee l s tock?
A
Yes,
I
presum e so . ,
Counsel cal led the witness ' a t tent ion to the organizat ion of the
Fi rs t Secur i ty Company and the Ci ty Secur i ty Company, but Mr .
M orga n insis ted th at h e kne w no thing of the details .
M r . Morgan ' s throa t became husky, and he turned to h i s daugh-
te r , M rs . Sa t te r lee , an d asked for a throa t t ab le t. M rs . Sa t te r lee
produced i t f rom a handbag.
"D o you w ant a g lass of wa ter?" asked M r . Vnterm yer .
"No, thanks ," sa id Mr . Morgan.
"If you get t i red," suggested M r. Un terniye r , "don't hesi ta te to
say so.' '
"I 'm not t ired," retu rne d the financier.
RQ You are a l a rge shareholder in the Nat iona l Ci ty Bgnk, a re
you not
A . No, s i r ; not very large .
Q.
You hav e a mil lion dol lars or so in s tock, haven' t y o u ? A. I
think so, bu t
I
do not remem ber exac t ly how m uch.
I
think the f i rm
has more tha n I have. 1wish I had it all./ .
Q. H ave they a n~ i l l i on r so a l so?
A.
No t "a lso." W e have
i t among us .
A4r. M or ga n could not tell w he the r o r not his sot1 was a m em be r
of the execut ive commit tee of the Ci ty Eank.
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nlerce, have
y o u
n o t ? A . I (lo n ot ~ - e ~ ~ i e ~ i i l ) e r ,o t very large, about
a
million dollars,
At th is the crowd i l l the rooin \ \hero the hear ing was held had
a good laugh.
Q You ha\,e a large in teres t in the Sa t io na l Rank of Comm erce,
h av e y o u n o t?
A .
do no t r emember. No t very la rge . Ab ou t a
mill ion dol lars . Y ou hav e th e s ta tem ent there .
2. Y o u h av e $ 1,6 86 ,0 00 . A . H o w mu ch is d o w n th e r e f o r m e ?
Q
T h e f i rm a s a f i rm ant1 th e i i ldiv it lual rne ~n be rs ave $1 ,686,-
000
T h e f irm ha s one m illion a nd the i i ldividual m em bers S686,OOO.
h l r .
I T n t e r m y c r \ ? an t ed t o kn ow if M r . X l o r g ~ n ad n o t m a d e
a considerable purchase in th is bank recent ly ill addi t ion to th e
figure5 which th e coii lmittee Ilacl obtained. Counse l fo r the c om -
m it tee ma de ~ t apparen t h e wa s -eelc ing to find ou t whe ther M r .
h lo rgan ha t1 ob ta ine0 any s tock f rom the Equ i tab le L i fe Assurance
Society af te r he lac1 bou ght into th at insti tution. T h e witness said
Ile coul tl no t tel l anyth ing about the m at te r , as h e was l io t in th is
cou ntry a t the t ime. M r . Alorga1-1 re~i ia i -ketl hat he spent fo u r or
f ive mon th5 ahroatl eac h year ant1 m em bers of his f irm lool
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Q Yo u do no t wa tch the de ta il s a s to the managemen t of any
of these ba nk s?
A.
No.
Q
T o w h om d o yo u r e f e r t h a t in y o u r f i r m ?
'4.
Jl ihoever
hapeens to be the re . Th ey do no t run i t .
Q
You a re do ing every th ing you can to p ro tect the p rosper ity
of thes e inst itu t ions in which the mem bers of your f irm a re directors,
a r e you n o t ?
A .
W e do no t bo ther ou rse lves much abou t tha t .
Th ey look a f t er themselves .
Q
W h y do n iembers o f your f irm, in sol lie ins tances tw o
m e m b e rs , g o o n t h e b o a r d ?
A
nec aus e we l iave a large in teres t to
protect .
Q.
In the p rotect ion of yo ur large in tere i t do you no t look af te r
t h e ba n ks a t a l l ?
A
Not to any ex ten t .
Q
I t t akes the t ime o f you r pa r tne r s , does it no t?
A.
Yes,
I
have a lready remarked on tha t a g rea t many t imes . I t t akes too
much tiine.
Q.
But when they a re the re
I
suppose they do the i r u t n~ os t o
add t o the p rosperi ty o f the in s t i tu t ion?
A.
T h e y a lw a y s d o t h a t ,
I
hope.
Mr. M orga n denied he had been consulted in rega rd t o the estab-
lishment of a vo t ing t ru s t f o r the G l iaran ty T ru s t Company . I t was
done by h is par tners .
Q.
You know , do 17ou no t , tha t tw o of the th ree vo t ing t rus tees
a r e members of you r f i rm? A .
I
do no t know who they a re .
Mr.
M organ tes ti fied he had no knowledge of the fo rm at ion of
the vo ting t ru s t of the Ean kers T ru s t Company .
C O N F I D E N C E
N
PARTNERS
A t th is po in t M r. M org an tu rne d once o r twice towar tl E lenry
P.
Dav ison , hi s pa r tne r , to ask fo r in fo rmat ion .
I bel ieve any th ing M r. Davison says , rem arked M r. h lo r gan ,
and a m wi l ling to sw ear by i t .
Mr. Morgan could not tel l in how many corporat ions he ant1 the
m em bers of 111s firm w ere voting tru ste es .
H e thought the re mere
on ly tw o o i th ree now ou ts t and ing .
M r . Morga n sa id when ques -
t ioned in r egard to the vo t ing t ru s t fo r the In te rna t iona l H arves te r
Company tha t he never had known the re was one un t i l a f ew days
ago when he read i t i n the newspapers . M r . Un te rm yer r ecal led
also th e vo t ing of the In terna t ional Agr icu l tu ra l Corporat ion , o f the
Chicago, Grea t TVestern a nd of th e E rie , Reatl ing ancl Souther11
Rai lways . M r . Un te rm yer contended the re
had
been
a
Bal t imore
and O hio vo t ing t rus t in which M r. Mo rga n h imsel f w as one of the
vo t ing t rus tees , bu t M r. M org an d id no t recal l i t.
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In speal
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~ JOT INGT n n s - r s
FOR
SAPI.:TY
M r. RiIorgan added tha t in the inf anc y of a corporat ion o.r in i ts
incipiency a voting trust , in his opinion, is necessary for the pro-
tection of t he prop erty.
Q B L I ~ou ld you call the f if teen years the incipiency of th e
S o u t h e r n R a i l w a y ?
A.
No.
Q.
Bu t when does it ge t ou t of swaddl ing c lo t lies? A W e have
been trying to g et r id of i t , but they wil l not ta ke i t .
Q.
You mean the s tockholclers wilI no t tak e i t ?
A .
Yes.
Q.
D o you n o t rea lize that these vo t ing t rus ts , pu t t ing in to the
hands o f one o r a few men these g reat sys tems, tends toward enor-
mous concentrat ion and control A . No, s i r .
Q. D o you no t th ink tha t
i f
fo r ins tance , you are the vo t ing
trustee of all the systems of railroads in the 'I 'nitecl States it con-
cen t ra tes a g reat deal
of
contro l in yo u? A . K o, s ir , i t would no t .
T ha t canno t he .
You woult l not have any more control t l ien than
i f
you were
no t vo t ing t ru s tee?
A .
Ko t in t l ie ~ n l l. I t would be a concen tra-
t ion in my han ds, bu t the board of d irectors a re th e control ling force
an d you (lo not ptlt the san le boa rd in every com pan y.
2.
S ~ i n e t i n i e shey
oni
pret ty near i t .
A .
N o,
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Tho se i ns ti tu t ions a ll appeal fo r t he same k ind of busi tle ss ,
do t h e y no t ?
A . No, bu t t hey a re a l l banks o r t rus t companies .
Q . R u t they a re all appealing f or deposits, a r e th ey n o t?
A .
Yes,
2. An d they a r e a ll supposed to be co il lpe ti ng fo r i t ? A. No,
not necessar ily.
Q
Do you see no th ing improper in hav ing the same men look-
ing in to one another ' s bus iness in compet ing ins t i tu t ions?
A
They
a r e no t look iilg i n to e ach o the r's bus ines s.
T h e d i r e c t o r s d o n o t
see all the de ta il s, a ll the books.
Q I s it no th is bus iness to knoww ha t i s go ing o n ?
A I t may
be h i s business , bu t he canno t do it.
Q
Then he i s a so r t o f f ig t ir ehead?
A . Call h im a f igurehead
if you l ike .
The o f f i ce r s o f t he banks run them, no t t he d i r ec to r s .
1 h a v e b e en i n
a
good ??zany b a ~ z k s nd corporatiojzs, said M Y .
LVorgalz, a ~ z d I e f y any walz to go in to atzy of t lzose boards-even
m y s e l f ,
I
zcrill sa y tha t for tlze sa ke of argum ent-I do n o t belie ve
I could car ry a n y one ques tion tlz~*ouglzi ny one board i n wlzich I \
zvas a dir ec tor , aga ins t tlze viezels of tlze ot he r di re ct or s. I Izave a
g r ~ a t uaizt ity o f cases zuhere
I
could bring in po ofs of this. , T11ere.j
is ~ z o ~tcst iolz o f control unlcss you lzave got a m aj or i t y o f the
d i ~ e c t o r s ll all the banlzs.
C ~ R PORAT I ONETTER
TIIAN
COMPETITION
M r . Un t e rmye r po in te d ou t t h a t s ome of t h e meiilb ers of t h e
Mo rg an firm w e re n ot only n ~ e n ~ b e r s f t h e bo a rd of d ir ec to rs o f
o t her banks bu t of t h e execu ti ve cotnmitte es a s well. M r . Morgan
finally s aid t ha t even a s suming t ha t t hey d id know t he busines s of
compet i tors he coulcl see no objec tion to i t.
Q Do you t hi nk t h a t p romo te s c ompe ti ti on ? A.
It
does no t
prevent it.
Q You a re oppoced to compe ti ti on , a r e you n o t? A. No, I do .
no t mind compe ti ti on .
Q You ~ v o u l d r at he r h av e combinations, would you n o t ?
A .
I
would.
Q You w ould ra th er hav e com bination th an c om pe ti t io n?
A
Yes
Q You a r e a n a dv oc ate of co ru bin atio n a nd c oo pe ra tio n a s
agai ns t compet it ion , a r e you no t ? A. Yes . C oop era tio n I s ho uld
favor .
Q
Combinat ionas agains t compet i t ion? A. I donot objec t to
compet i tion ei ther .
I l ike a l it tle compet i tion.
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Q You l ike a l i t t le if i t does not hu rt you. Competi t ion t ha t
h r ~ r ts ou you d o not bel ieve in ,?
A I do no t mind i t .
N o w ,
anot her point . T h is may be a sensit ive subject .
I do not wail t to
talk of it , T h is is probably th e oilly chance
I
will 'have to speak
'of it, but without yod have control you can do nothing.
Q
LTnless you have control cannot do w h at ? A . Unless you
have got actual control you callnot coil trol anything.
Q W el l , I guess tha t i s r igh t. 1s tha t the rea$on you w ant to
c o i f t r o l e ' v e r y t l ~ i t ~ ~ ?. I want tO control nothing.
MONEYTRUST
IMPOSSIRI~E
Q W h a t i s t h e po in t, M r . M o r g a n , y ou w a n t t o m a k e ?
A .
W h a t
1
say is this
T h a t t h e r e
is
nothi lzg
i z
t h e w o r l d
by
7uhich
yozt calz ~ ~ a k e l~z l s t
~ ~ z o n e y
Q 1ZThat you meal1 is th at the re is no wa y on e mail can get
i t a l l ?
A O r any of i t , or coiltrol of i t .
Q
He can make a try o f i t ?
A.
N o , s i r ; h e c an no t. H e m a y
have a l l the i lloney in Chris tendom , bu t he canno t d o i t .
f you owned a l l the banks of New York wi th a l l the i r
resources would you not Fonle pret ty nea r having a coiltrol of cre dit ?
'A.
No, s ir , not a t a l l .
Q
Supposed you owned a ll the banks and t ru s t com panies, o r
controlled them, and somebody wanted to s tart up in the s teel busi-
ness , you unders tand, against the United Sta tes Steel Corporation.
You would be u 'ilder a du ty , would you no t , to th e Uni ted S ta tes
Steel Corporation to see that i t was not subjected to ruinous com-
pe t i t ion? A . No, s i r .
I t ha s no th ing to do with it .
Q
You would ~ve lco ine com pet i t ion? .A.
I
would ~ ~ e l c o ~ n e
competition.
Q T he n io re'o f it the be t t e r?
A.
Yes.
MR. UNTERMY~R :
h e t h e r t h i s c om p e ti to r w ~ u l d e a ble t o
ge t the money f rom the banks tha t Mr. I forga l l contro l led . '
Yes , he would, sa id M r. Morg an ve ry positively./
.
Tha t i s wha t you wou ld be the re fo r?
A Yes.
Q
Solqe other map who might cotz tro1, inight not take the view
,
you have?
A.
Be
would not have the contro l .
Q Y ou r idea is tha t when a man has got a vas t pow er s ;icb as
you have-you adm it you have, do you n o t?
A . I do no t know
it, s ir.
9
Yo u,aclm it you ha;e, do you n o t?
A. I do not th ink I
have,
Q Y O Udo not feel it a t 411?
4.
No,
I
do not fee l it
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I^_ .
\ \.e ll , asqunling tha t qou hav e i t , ? o u r i tlea is that whet: a
m an a l luse< i t he loses i t '
A . Yes, ant1 l ie never gets i t back again
c i ther
Q
t I a ve you any in s tance in you r n i in tl o f an y such m an w ho
h a s h a d a n y s u c h p o w e r a n d c o n t r o l t o e x p e r i m e n t w i t h ?
A .
N o ,
bu t know f r o m expe rience .
Q
E x p e r i en c e of y o u r o w n ?
A. N o , w h a t I ' m e a n t o s a y i s
th is : the ques t ion of contro l , in th is country a t leas t , in lnoney is
pcrqonal
C AXSOT CONTROL
RI:DIT
Q
TTow about cretlit?
A .
111credit a lso.
Pe r son a l to whotn -to the r nan wh o co n t r o l s ?
A .
S o , no.
I I e ] leve r ha s i t.
E-Ie cann ot buy i t . All the m on ej in Ch ris tcnd oni
ant1 a l l the banks in Chris tendom cannot control i t .
Q
R u t h a v e y o u no t s een m any in s tances
in
th e h is tory of th is
coun t r y of f inancia l men ge t t ing vas t con t ro l and abus ing i t th r ough
n lon g perio tl o f y ears before they lost i t ?
11
K o .
Q I do no t wan t to be i~ id iv idousby s ta t ing i l lu s t ra t ions , bu t
h a v e y o u k n o w n
of
men in some pa r t i cu la r depa r tmen ts , such a s
the r a i lr oad , ge t t ing con t r o l and abus ing tha t con t r o l f o r a s e r ie s of
years before they los t i t ? A. I have , hu t I say tha t I am no t d i s -
cuss ing the ques t ions of ra i l roads or merchant l i se . I am ta!king
about money ant1 credit .
Q
You ad m it tha t men n iay ge t contro l of ra i lroa tls o r bus iness
enterprises
and monopol ize them ant1 so abuse the i r p r iv i lege?
A . Yes.
Q
211d retain that control
A
Yes
Q B y t h e f or ce of t h ei r p o ~ e l - ? \ . Yes .
Q A n d you 5ay tha t so f a r as the con tro l of c re tl i t is concerned
they canno t do the s ame th ing '
1\ f
money , no .
T h e y c a n n o t
contro l i t .
S ~ M I
COMPI-TITIOX
OOD
Q Gu t do you th ink t ha t a compet it ive cont li t ion in the ban k
and t r u s t compan ie s o f K ew Yor k i s m or e o r le s s p r e f e rab le th an
a concentra te t l contro l over those banks ' A . I would r a the r have
competi t ion.
Q W o u l d y o u r a t h e r h a v e i t f r e e r, a n d t h e f r e e r t h e b e t te r '
A . p to a ce r t a in ex ten t
I
woulr l have i t f ree .
Q Le t us see if th e sal iie g ro ups conv erge an d com e toge ther in
C3 Cl~ f the g r ea t banks. Does no t tha t in te r f e r e wi th co~ npe t i t ion
between t h e m ?
A.
K O ,
I
do no t th ink so .
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P
\
'I
t he d ir ec to rs of t he G u a r a n ty T r u s t C o m p a ny w e r e in t he B ~ n k f
Com merc e ; a l so a l a rge num ber of the d i rec to r s o f the G uaran ty
T r u s t Co m p an y wer e i n t h e Ban k e r s T r u s t Co m p an y , an d v i ce
versa . W ith those three ins t i tu t ions located in the same sect ion of
the ci ty R3r. Untermyer wanted to know how there could be com-
peti t ion among them untler such circumstances.
Mr. Morgan content letL that they did not do the same kind of
business, ant1 he ra ther doubted w hether they competed for deposit s .
I have been in business a great many years in Kew York ,
said he, and I do not coi l lpete for any deposi ts .
I
do no t ca re
whether they ever come,
h u t
t hey do con~e .
Rut , said RIr . U nte rm ye r, everqbocly is not so fortuna te.
The par t ies that have thei r money to deposi t decide that ques-
t ion, sa id M r. h lorg an .
EVEI~Y
GETS
ITSSIIARE. \ X I ~
Q
You r idea i s that the Rank of Comm erce, or any o ther great
inst i tut ion, shoult l not t ry to get business, but just s i t down an?
wai t for i t
to
c o m e ?
A .
T h e Eank of Comm erce, if
i t
t ransacts
its business right, will get i ts share of the business.
Q.
Sul j lmse i t wants more than i t s share? A I t canno t ge t i t .
Q I t o f t en does, does it no t? A . Th en i t ough t no t to have ir.
Q
\ \11at determ ines 1~11at s i ts shar e of th e bu $in ess ?
A T h e
public \\rill decide that./
RTr. I \ lorgan said he had never known of a case of this kind
to
run to excess.
Q
L e t
u s
take
a
cas e li ke t h e Ban k e rs ' T r u s t Co ~ n p a n y , h a t
wen t f r o m
S5
of tleposits to
S168
of deposits i t
nine years.
111tl they get th ere by si t ting th ere ant1 wa it ing fo r t he
business?
A . Th ey g o t i t because peo l~ lewan ted t o send money to
them.
2.
Do you not bel ieve they got i t by going out af ter i t? A. I
do not bel ieve they did.
Q
You d id not help them get i t , d id you?
A.
I
have clone
everytlling I could to help them.
Q
And the sa iue i s t rue wi th r e fe rence to the Guaran ty Trus t
C o m p a n y ?
A. Ycs , bu t that hat1 a l ready grown before I was--
Q. It had g ro ~ v n s co .npared wi th the way i t g rew af t e r you
took holtl of i t , had it?
A .
I helped the banks, yes.
T h e wi tness a t tr ibu te t l t he g rea t g rowth o f the Bankers ' T ru s t
Co. , to the act iv i t ies of a few young men who made the ar range:
men t s .
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Q
Did you he lp them?
A .
I don't know as they neede.1 hclp,
hu t I always assist young men.
Q
I - low about In ternat ional Harves ter?
A .
I n e ve r k n e ~ u n y-
th ing abou t tha t . Pe rk in s managed tha t .
I
did not know 'that ther e
was a voting trust in that corporat ion organized in my office unti l
I
read i t in the papers a shor t t ime ago .
B A N K
~ I CRGERSGOODITOR PUBLIC
Q D o y o u kn o w t h a t t he R a nk e rs ' T r u s t C o ~ n p a n yhas taken
in tw o l arge t ru s t com pan ies?
A
Yes.
Q
S o these tw o insti tu tio i ls represent to-( lay wh at were
formerly nine large, prosperous inst i tu t ions.
You approve of
t h a t
k i n d of c o n c e n t r a t ~ o n ?
A.
Yes.
Q Carrying that on to i ts logical outcome, would you approve
of the i r gather ing in a ll the res t of these banks a nd t r us t com panies?
A.
Certainly not .
Q
H o w m any of the111 would you think they ou ght to ga th er ?
A.
I
th ink they have about enough .
2.
They may have to t ake in some more?
A. Yes .
Q
In o rder to ge t more bus iness? A . N o .
Q They did not take in any of t l ieqe companies ~ I Io r d e r t o
pro tect them, d id they?
A . I
do no t know.
2.
Th ey w ere a ll so lven t ins ti tu tions , were they n o t ?
A .
T l ~ e y
were al l solvent inst i tu t ions at the t ime, yes.
Q
A nd they paid well fo r a ll of th em ?
A . They 17ligEit not
be he rea f t e r .
Q
What would p reven t so lven t ins t i tu t ions , fo r which seven
or e igh t hundret l do l lars a share was paid , to take them in as these
were taken in, fro111 continuing solvent?
A .
I t was p rof i tab le .
Q
ProfitabIe to tak e the111 i n ?
A Yes, and profi table for the
stockholders of the old one, too.
Q You say that they migh t have to take them for some reason
of public policy.
1
a m t ry ing to f ind ou t in what ins tance they have
ever taken in a bank or t rus t company , excep t fo r the p rof i t there
was in i t. W ould you l ike to s top here , 14r . M organ .
A
I do no t
want to stop at al l . I am ready to go r igh t 011
I would like to get
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FOREIGN
ANKS
At the beginning of the aft&-noon session Mr . Un te r~ny er egan
his examination of Mr. Morgan on the system of cumulative voting
of stock in European banks.' In the case of the Bank of England,
each stoclcholder holding 500 shares od stock or more has but one
vote, regardless of the aiuount of his holding. Limitations, more
or less extensive, are imposed on bank stockholders in other Eurcj-
pean countries.
Mr. Morgan, when asked
i
he was familiir with English and
continental laws restricting the voting powers of banks over stocks,
replied that he thought he was. Untermyer, wishing ta refresh his
rncmory, read the regulations of the national banks of England,
I;rance, Scotlantl, Russia and Belgium, which limit the number of
$hares one person niay vote and restrict the classes of stockholders
I
froin which the directors may be chosen. The counsel fo r the
corn~nittee hen asked
Q. Do
they permit cumulative voting op the Pennsylvania rail-
road? A
I
don't know./
2.
Do you
k n ow
tlrat minority representation on boards is hard
to get?
A
Yes.
Don't you think such representation is desirable?
A I
should think so.
a
To a question
by
R4r. IJntermyer,
In your judgment, cumu-
lative voting would be an iinprovenlent upon the present system,
~vould t not?
hlr. Morgan replied.
I
do not think it makes
much difference.
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Q You coult l only vote on a small proport ion of them.
T h e
people who did not choose to give you a voting trust 11 their s tock
would have represen ta t ion in the Board , would they no t?
A .
I d o
not want to suggest such a plan, but they could very easi ly transfer
the shares in to d if feren t nam es so that they could a cco n~p l ish he
salne purpose.
Q
But you know th at over there th is so r t o f hocus pocus does
not go, do you n ot ? A. I th ink the records will show otherwis e, s ir .
Q
DO y o ~ i o t know tha t the l aws the re p reven t the conso l ida -
t ion an t1 concen tra t ion of banking con tro l by p roh ib i t ing d i rect~rs
in one bank f rom be ing d i rec to r s in an o ther ban k?
A .
Y e s ; h u t
I would like to say in reply to that that there is no place xvliere
mergers and consolidat ions and al l that have talren place to the same
ex ten t tha t they have
in
England dur ing the las t twenty years .
Q Xot in the bank ing wor ld , have they? A. In the bank ing
Q D o you know that , qu ite in con tras t wi th o ur sys tems, those
groups over there are absolutely independent of one at lo ther, that
they I iave not any comriion Directors at al l , and are not al lowed to
h a v e ?
A .
I did no t know that tha t wa s so.
CAPITALT O O SCARCE
OR
N E WROADS
Q Is i t not the fact that in th is coti i i t ry there has been a
consistent and continuous and increasing cetneil t ing and concentra-
t ion and conso l idat ion of the g reat ra i l road sys tems? A I thinlt
that i s t rue .
Q D o you a t tr ib ute the absence of com peting rai lroad building
as aga in s t the g rea t s y~ te n i s o the c lo~n inanceof the banking in-
teres ts in those g rea t ra i l road sys te m s? A . I do not .
2.
And do you no t k i io \v that un l ike our own s i tuat ion , i f a
inan has a good pro ject in England and he goes to one g roup ancl
cannot get h is bus iness done, the o ther g ro ups take i t up very read ily ,
and that they have no connec tion w i th one ano ther ? A . O h , tha t is
very possible.
Q
Is no t that a very much m ore heal th fu l condi tion of th ings
than to have the groups in terlocking so tha t if one re fuses the busi-
ness , you cannot get i t ( lone a t a no the r? A. I do no t th ink that
ex i s ts to any e x ten t he re .
Is i t no t a fac t that in th is country there has no t been in
the last ten years , any rai lro ad construct ion of parallel or com peting
ines to any g re a t sy s tem ex i s t ing he re ? A . I unders tan t l tha t to
be s o ; yes.
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Q A I I ~
s
i t no t t he f ac t t ha t i n t h i s coun t ry t he r e ha s been a
coni i s ten t an t l con t inuous and increas ing , cement ing an t l co t icen t ra -
t ion a nd conso li dat ion o f t he g r ea t sy s t ems ?
A . I
t h ink t ha t i s t r ue .
Q. D o you a t t r ib u te th e absence of co inpe ting ra i l road bu i ld ing
t o t h e f a c t th a t
in
th i s co inpara t ive ly new an t1 growing count ry there
iq no t any need fo r any m ore r a i l r oads? A . I t lo not.
Q.
D o you a t t r ibu te i t to the d i ff iculty o f ge t t ing new cap i ta l?
A .
I do.
I th ink it i s ow ing in l a rge tueasure to the fac t o f th e
wa nt o f p ro tec tio i i aga ins t ra i l roa t ls th a t has been cur re n t in th i s
coun t ry f o r t he l a s t ten yea r s .
Q Yo11 mean the want of protect ion to the ra i l roat l5?
.A .
T o
th e r a i l r o a d s ; y ~ s obo (ly wan t s
to
put money into a new rai l roacl
in t l iese t imes.
T h e ra il l-oads a re c lo ing pre t ty wel l , a r e they n o t?
4.
S o m e
of t hem a re . T h e o ld ones a r e . Yes .
? ~ I o R ; \ N
SI:I a r t ~ i i e n tof
in t lus t ry in th i s count ry , (lo y o u ?
A .
1 do no t.
Q. N o t t h e s l i g h t e s t ? A . Not t l ie s l ightes t .
A
Q A nd you a r e not l ook ing for a n y ? A .
T
an1 not seeking
i t . e i ther .
Q l his co11solit lat ion ant1 a n ~ a lg am at io nof sys tem s and in -
d ~ ~ s t r i e s n o t to a n y c on ce nt ra tio n , d oe < i t ?nt1 ba nk s does look
A. No. s i r .
Q I t l ookc, I su l~ po se o a d i spe r sal o f i n t e re s t s athe her t h a n
t o a c o n c e n t r a t i o n ?
-4. O h , n o ; it dea l s w i th t h ings a s t hey ex i s t .
Q.
t
i s fo r the purp ose of co ncen t ra t i i ig the in te res t s tha t you
do a tna lgama te , i s i t no t ?
A . f i t i s desi ra ble yes . I f i t i s good
bus ine s s fo r t he i n t e re s t s of t he co un t ry t o d o it , 1 do i t .
Q. Bu t , M r . M organ , i s no t a ma n l ike ly , qu i t e subconsc ious ly ,
to imagine th a t th ing s a re fo r the i li te l-es ts o f the count l -y when they
a re , good bus ine s s ?
A . No, s i r .
Q
Y o u t h i n k t h a t
y o u
are able to j t i s t ly and impart ia l ly t l i f fer-
en t i a te , whe re you r ow n in t e r e s ts a r e conce rned , j u s t a s c l ea r l y a s
though you had no i n t e r e s t a t s t ake , d o y o u ? A . Exac t ly , s i r .
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Q. A nd y ou ar e ac t ing on tha t assuin1)t ion a ll the t ime, a re
y o u n o t ? A . I always do, s i r .
Q
O f c ou rse t he re is a pos sibility of yo ur juclgment be ing 1111s-
t a k e n , i s t h e r e n o t ?
A .
O h ,
I
m ay be w rong in m y judgm ent , bu t
I d o not th ink i t l ies in tha t d i rec t ion .
I_ .
D oes i t no t go som ew ha t on the theory tha t t he wish m ay
b e f a t h e r t o t h e th o u g h t ?
A .
I
do not th ink so .
TIIEEQUIPMEKT
O M P
M r. LJntermyer seemed to ques t ion th is .
took one case as
an il lustration.
A ssum ing , sa id he , t ha t you and M r . R aker and you r f e w
par tners and associa tes doni ina tcd the grea t ra i l road sys tems of the
count ry and you were in teres ted in the Amer ican 1 ,ocomot ive Com-
pany an d the Ealdwin 1 ,ocomot ive C oi i ipan j~ , v l ia t hance woul tl a
new loconiot ive works have ?
They woulcl have plenty of busi~icss, replietl hlr. R'lorgan.
We would not g ive a l l the bus iness to one company. '
Q.
T h a t is t he r eason you have tw o , is i t no t? A . Y es , and i f
t h e r e w a s a n o t h e r o n e w e w o u ld p r o l ~ a h l y s e th a t . W e c a n n o t g et
our locomot ives now.
Q
You is\ued the securities of the Baltlwin 1,ocomotive \Vorks
-your
f irm?
A. Yes. it was (lone in I'hilailelphia. I ( lo not know
the d r t a i l s .
Q. Y o u r N e w Y o r k h o u s e p a r t i c i p a t e d ?
A . Tt is th e s am e
A.
I
d o no t comp lain of anytl .l ing, sir .
Q
The locor l lo t ive m anufac tu re r s o f t he U ni t ed S ta t e s had
con~bine r l nd fo rm ed th e A m er ican 1 ,ocom ot ive C om pany , and the
B a ldw in C om pany w as no t in i t ?
A I t wa s not in tha t combinat ion .
Q Th en you took ho ld of t he B a ldw in C o m p any ?
4
Y e < .
Q A re the re any o the r con ipan ies? A I d o n o t k n o w
Q
D O you know of any tha t ge t any bus iness in ca r s o r l oco-
~ n o t i v e s ?
A .
I
do not know anything about the t ie ta i l s , hut
we
cer ta in ly would not g ive the bus iness a l l to one company or to two
companies.
Q D o you th ink i t is a h ea l t h f~ i l ondit ion ti- , have indu5tr ies
so concent ra te t l tha t the in teres ts in the supply company are a l ike
or s imi lar to the in teres ts in the ra i l road company? rl B u t they
2
Let us see i f they are not .
A re no t t he in t e res t s o f t he
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Baldwin Locomot ive Com pany dominated by th e same in teres ts th at
dominate the ra i l road s i tuat ion?
A
No.
Q. You are responsib le fo r the secur i t ies i ssued?
A .
Morally ,
yes.
Q
W he n t rouble comes, do you no t consider that , a s the i squing
louse of these sec uri t ies , you a re under the du ty to protect the
secur i t ies? A Yes, if they get into trouble.
Q
Suppose they should get in to t rouble th rough threatened new
con ~p e t i t i o n ; o you th ink you ~ vou ld e under no du ty to them
to
t h ro t t l e i t ?
A. No, I do no t . ,
THEREADINGASE
.
A re you fami l iar wi th the ev idence in the Tem ple I r on Com-
pany case, which wa s decided a few days ago-the Re ading road
c a s e ? A . know there was someth ing of that k in t l , bu t I do no t
remember the detai ls
of
it now.
Q D o you renielnber the decis ion a day o r two a go ?
A.
Yes.
D o you remember tha t a t that t ime M r. Bacon conducted the
negotiat ions by which these part ies were taken in and the rai l road
was no t bu i l t? 4. I do not .
Q D o you know those fa cts were proven in that ca se?
I
do not know anyth ing about the case .
Q. You were no t fami l iar wi th the facts in that case? A. N o ,
sir.
A s TO S T I F L I N GC O M P E T I T I O N
Q. Th en you consider your f i rm, as f iscal agents, and as prom ot-
ing and being responsible for securities of the railroad system under
no sort of obl igat ion to discourage or prevent a competing rai l road?
A .
No, sir .
Q You know a compet ing ra i l road might ru in you?
I
could not help that.
Q You wou ld no t t ry to he lp i t ?
A . Som eth ing might occur
that might necessitate i t . I cannot say what
I
would d o, but on
general principles I should not .
I would ra ther have a concrete case , fo r ins tance, l ike the
W est S hor e Road paral le l ing the New York Cent ra l, you thought
the best pol icy was to buy up that competi t ion, did you not?
A.
Yes.
Q These concrete cases are occurr ing f rom t ime to t ime, are
t h e y n o t ?
A The New York Cent ra l wanted to lease i t .
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Q That meant doing away t i i t11 compet i t ion , d id i t n o t ?
Q.
The same pol icy would d ic ta te , woul t l i t no t , buying con-
pe ting indus t r i a ls , o r indus tr i es , and p u t t ing them toge the r?
A .
No.
of record.
Ta ke , fo r in s tance , t he Un i t ed S ta t es S tee l Corpora t ion .To-( lay
I would not buy anyth ing .
Q. I
know, because you have go t en ou g l ~ ow to have a very
cominan t l ing power , have you no t?
A
No, no t tha t , e i the r .
Q.
Yo u d id engage in buy ing up co ~npe t i t ion here in o r tl e r to
fo rm a company , d id you no t?
A .
N o ; I b o u g h t it u p f o r t h e p u r -
pose of having a corporat ion which in i tself could manufacture al l
kinds of steel.
M r . U n t e r n ~ y e r h en b egan t o qu est io n M r . M o r g an ab o u t t h e
TIT
T
T FQ~~ITABT.E
S l
OCK
Q.
You bought the cont ro l of the Eclu i tab le Li fe Insurat ice
Co m p an y , d id y o u n o t ?
A . I
did, sir.
Q. Fro111 w ho m ? A F r o m M r . R y a n a nd M r . H a r r im a n .
Q And what was the amoun t o f the par va lue o f the stock
wh ich y o u b o u g h t ?
A . Five hundred thousand dol lars .
Q
N o , i t w a s 5 1 , 0 0 0 . A. Yes, 51,000.
Q. T h e to ta l cap i ta l o f the company was 100,000, was i t no t '
A I have no t the books wi th me .
Whatever i t was , i t i s
a
m at t e r
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Fifty-one thousand dollars. There were 510 shares of stock?
A. Yes.
Q What is the amount of dividentls to which that stock is
entitled?
4.
The regular dividend is 7 per cent.
Q. That is all it ever has paid-that is, 3,570 a year?
A. Yes.
Q. And you paid how' much for that?
A. I do not k n o ~he
amount.
Q
About 3,000,000, was it not-two and a half millions and
the intereit that had accruetl? A. Somewhere in that neighborhood.
Q. -About 3,000,000. On that investment of 3,000,000 the
return in dividends is 3,570. I t yields a return of about one-eighth
or one-ninth of 1 per cent. a year? A. I believe so.
Q. Are Messrs. Stillman ailtl Eaker as5ociatetl with you or
interested
in
that purchase?
A .
Not as it stands to-(lay.
Q.
Have they never had any interest in that purchase?
A . It
has never been consumn~atetl.
Q
What was the untlerstanding as to their being interestetl \vitli
you in that purchase?
2.
1 cannot tell you that, sir. That is private
business of my clients.
Q. Gut it seems to me that t h e question of whether you had or
have associates in that purchase in the form of hl r. Jalnei Stillman
ant1 NIr. George
F.
llaker is not a matter of private business. Did
they not agree to partleipate with you in that business? A.
I
should
like to consult my counsel.
MR. i \ l o ~ ~ . i \ ~af te r consulting with counsel) Mr. Chairman,
neither Mr. Raker nor Mr. Stillman has ever hat1 any interest in i t
but it is understootl that i I want to they will take half of it at any
time I say so.
Q. 1Trhen was that untlerstanding reached?
A.
I
10 not know
;
I think it has practically been so from the beginning.
Q.
F r o n ~he tirue you took it? A. Yes.
Q.
And they a re under obligation, then, to take half of the
interest off your hands? A. If I wish it.
Q
Is there any writing on the subject?
A .
I
tlo not know
wl~ether ny writing has passed on the subject or not. (Af ter con-
sulting with counsel.)
There is a writing on
that subject.
Q. May \ye have it?
A . You
may have
a
copy
of
it ye\, sir.
T:orrc~r,rITOR Goor, O
SITU~TION
Q. You may explain, i you care to, Mr. Morgan, why you
bought from Messrs Ryan and I-Iarriman 51,000 par value of stock
that paid only 3,570 a year for approximately 3,000,000 that could
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yield you only one-eighth or one-ninth of one per cent .
A .
Cecause
I thought it was a des irab le th ing for the s i tua t ion t o do tha t .
T h a t i s v er y g e n e r a l, M r . M o r g a n .
Wil l you speak of the
s i tua t ion? W as no t t ha t s tock sa fe enough in Mr . Ryan s han ( l s ?
A . I
suppose i t was.
I
thought i t was great ly i inproved by being in
the han ds of myself an d these two gent letnen, provided I asked them
H o w
would tha t improve the s i tua t ion over the s i tua t ion
tha t ex is ted when M r . Ry an ant1 XIr. Harr i i l l an he ld the s to ck?
A.
Mr. Ryan d id not have i t a lone .
Q
Yes , bu t do you no t know tha t M r . Ry an o r iginal ly bought
i t a lone , and M r . I3ar r iman ins is ted on having h im give h ltn ha l f ?
A .
I
thought i f he could pay for i t that pr ice,
I
could.
I
t h o u g h t
tha t w as a fa i r pr ice .
Q
170u thou gh t it w as good bus iness , d id y ou ? A . Yes.
Q
You thou ght i t was good bus iness t o buy a s tock tha t pa id
only one-n in th o r one-ten th of one per cent. a ye ar ?
A I
thought so.
Q.
T h e no rma l r a t e o f i n t e re s t t ha t you can ea rn o n money is
abou t five pe r c en t , i s it n o t ? A .
N ot a lways , no .
I
a m n o t t a l ki n g
about i t as a ques t ion of money.
Q. The
norma l r a t e of i n t e re s t wou ld h e f ro m fou r t o five pe r
cent . o rd inar i ly , would i t no t?
I l here is the good busin ess, th en.
in buying a securi ty that oi l ly pays one-ninth of one per cent?
A.
Because
I
t hough t it was be t t e r t he re than i t was w here i t was .
T ha t is a l l .,
Q.
I n w hat respec t would it be be t te r w here i t
is
t h an w i th h i m ?
A. T h a t i s t he way i t s t ruck me .
Q.
I s t ha t a l l you have to s ay abou t i t ? A
That i s a l l I have
to say about i t .
Q
Y o u c a r e t o m a k e n o o t h e r e x p l a n a t io i ~a b o u t i t ? A . N o .
Q.
T h e a s se ts of t he Equ i t ab l e L i f e w ere
504,465,803.01
o n
December
31, 1911.
Did Mr . Ryan o f f e r t h i s s tock to yo t i ? A . I
asked him to sell i t to me.
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2. Ile also soltl the Morton Trust Coinpany, did he not, to the
Guaranty Trust?
A.
I
do not know.
I suppose the stockholders
sold that.
Q
Do you not lcilow that he had control
of
the Morton Trust?
4.
I do not thinlc he had it.
Q. He
was in control at the time of the sale, was he no t?
A
l i e
may have been the negotiator.
I do not know.
I had nothing to do
with those negotiations, so far as he was concerned.
Q. You had nothing to do with the acquisition of the Morton
Trust stock? A. All that I did was to buy Morton's.
Q.
You bought ;\lorton's interest?
A
Yes.
Q IYho bought Mr. Ryan's interest?
A. I do not know. Th e
Guaranty people, I suppose.
Q. After you bought the Morton interest, did you put it into
the Guaranty? A
I
put it in with the others-those who bought the
stock put it into the Guaranty. I have never hat1 any question about
the tlisposition of the Equitable 1,ife stock. My idea has always been
to have it turnetl over to the policyholders.
Q.
Let see about that.
You mean turned over, providetl you
got the
3,000,000
back?
A
Just what I paid for it.
That is all.
Q. You know wliat that means, (lo you not-turning over an
insurance company to policyholdeys?
A
1
do not know how it could
he donc-the ternis of it, at all
IVhatever was to be tloile was to be
done by trustees. The stock was in the hands of the trustees; I have
no c,?ntrol over it, in any way, shape or manner.
Q. IhThatI want to know is this:
Do you not kn o~v , Ir. Mor-
gan, fro111 your experience with life insurance companies, with
inutual companies, that the men who are in the sadtlle are the men
who continue to control a life insurance company, whether it is
mutual or stock? A Ko, not necessarily that.
Q.
Ha ve you ever heard of a case in which the po1ic)~holtlers
have ever been able to take it out of the hands of the men who
control it?
A
Th at has always been my idea.
Q.
IIave you ever heard of a case in which they have been able
to do that? A I do not know.
2. Do you not Icnow the case, for instance, of the AIutual
Iieserve, where the men went to jail, and they could not change the
control of the company? A I do not know anything about that.
am not seeking that occupation.
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I
Q.
D o you not know that the policyholtlers control amounts to
nothing, as against the n~anagemcni, vlio have the agent
Force
under their domination?
A.
I
(lo not know anyt111ng about that.
think the T,egislature of the State of
Kew
York coultl ix that..
Q.
You a re living in hopes of getting back your mo ney? A. S o ,
I do not care any thi t~g bout the money.
Q.
I
do not ~mtlerstandwhy you bought this company A . For
It was the thing to tio for whom A . That is tlie only reason
I
can give. Tha t is the only reason
I
have, in other uortls.
I
am
not t r y~n go keep anything back, you untlerstantl
Q. I understand.
111
other wortli, you have no season at alli
A . That i\ the way you look at it.
I think it ii a very gootl reason.
Some of these days you will agree with me.
Q. You can never tell what may liayl,en. Sonne of these (lays
you may agree with me. l l r . Morgan. 4. \-ery ~vel l. That may he.
If
I
do,
I
shall wait for a good reason.
Q. In the meantime, T wish you would give me a g-ootl reason.
or any reason, why you shoultl have bought that stock, except tlie
fact that you thought it was the thing to (10 4. That is the only
reason
I
hare. The reaion I callctl it u p agaln wa i that 1 wantetl to
call the attention of the inembers of tlie corntniittee ant1 yourself to
the fact that I ditl not buy it to make money
I
did it because
T
thought it was better in tlie Iiantls of these three gentlemen.
STC) .I.ou d o i t n o \ v ?
:\
Y e s ;
I
lano\v. I h a t is all rig ht.
70u
lcnd i t at the 1 ,oan Stand on t l ie Excli ;~nge? \ Yes.
2. ) >
yo11
lino\\r
anything allout to \\-11o11i
rot
l c ~ l tl t ?
:I I
t lo ; a t least , alw ays t li tl .
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1)o
~ o um ean to say tha t \ i~l ien 1)eol) le lentl , a s loan s ni-c
i ~ ~ a t l e Stock l i \ c l iange col la tera l, to tl lc exten t of liunt lre t li ofn
i r i l l io t i s of t lo l la rs , they look to anj t l i~ngexcep t t he co l l a t e ra l ?
A .
I ' es , the) do r ight on tha t point . what
1
d i d , w h a t 1 usetl to (lo,
ant1
I
th in lc i t i s pre t ty wel l (lone n o n , 1s th i s . I f a m an co:~ les n
ant1 T i e e t h e re is a lo an t o l l r . S m i th , T sa y , "Yo11 call th at loa n
r ~ g h t w ay."
I ~ jo u l t l o t have t ha t l oan in t he Imx.
I ~ v o u l t l o t
have tha t l oan .
'1-hat is not the way money is loaned on t l ie Stock
Ex-
c h a n g e ' ,A 'That i i t l le way T loan i t . T f Ixe is not satisfactory to
me, 1 call tlie loan at once, personal ly T a in n o t t a l k ~ n g f a n y -
1~ ot l j lse ' s w a j of c lo ing l )us i~icss , n it
I
t e l l you what I think is the
13asis
o f
1)ui;iness
wan t to k i iow~ f jo u rea l ly \ \ an t us t o ti ii tl ersta ii tl tha t the
great inass ant1 voltlme
o f
loans mat le on Stock Exchange col la tera l
i ron1 (la! to ( lay a rc not mat le ent i rely u ~ )o i i he co l l a te ra l s? Xo ,
Sll-,
Q.
I t lo not \ \ an t to Iznov w hat you ( lo , bu t T \ \ an t t o know t l ie
cou rse of business. 4 O t h e r s
do
i t a l so ; t ha t
I
k i ~ o u r
Q E v e r y b a n k 111 N e w Y o r k , e v e r y g r e a t n a t i o n a l b a n k d o w n
t o ~ v n ,ent15 money on the Stock Exchange, ant1 the th ing they look
to
IS
t h e c o ll at er al . D o y o u t h i n k th e y e v e r l oo k a t t h e n a m e ?
A .
I (lo not kno~zrw h a t t h e b a n k i d o
T k n o w ~ t l i a t ( l o .
Q. I an1 ask ing a l l ou t t he l~anks .
I d o no t kn ow wh a t t lie
IIanki (lo.
13 \ z KS
Sor
I O M I \
\TI.I
y
Or- S I ~ F
N T F R T S T S
Q. 1s i t 01 not a fact that t i iai iy o f t h e g r e a t c o r p o r at io n s a r e
tlominatetl
1 y
m e n n h o h a v e ~ i e i t h e r t oc k n o r o flic es in t h e c o m -
1)any 4 'They ought no t to I )c I tlo not th ink they ar e to any
g r e a t e x t e n t .
2
l l a v e y o ~ i ot a ny instan ces in nl intl in 117hicl1 thev are so
t loininated'
-I 1
(lo not kiio~zrof a l l ) n o ~ z .
_)
s not the b an k 's 1,rosl)erl tj 11el)entlent m or e la rg ely 11poii
p e o l ~ l cn l i o c an g ~ v c t l ~ u s i n e s s h a n u l)o n a n y o t h er o n e f a ct o r
excep t th a t of n ianagement
I.
I
never heart1 of a case of this sor t .
I ne1.e~- ieart l of a case of a n j ba nk being control let l 1)y any bo dy
nllio gave i t burinecs.
Q.
7 ha t a r e t li e l ~ a n k s ook ing fo r-la rge business, l a r g e
t l e p o s ~ t s ?
\ .Yes , t h a t 1s t rue , 1 )u t t hey w an t t o kno w f ihe re i t
com e5 fr on l. T h e f i rs t t h ~ n gs t o ge t th e 1111sineisa n d t h e n e x t t h i n g
is t l le way you t ransact your 1~usine.s .
Q. T h e p eo ple \\rho g iv e la rg e b u s i n e ~ s o a h an k a i ~ t lvho prac-
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t ica lly supply i t s bus iness ant1 a re not s tockho1tle1-s, h a ~ chcy any
TIIESTOCKXCII~INGE
q
Q
H a v e yo u cotlsi tleret l th e q:lestion a s to w h e t l ~ e r r not the
Stoclc TCxcllange ought to
be
put under some sor t of C;ovcrnnie i~ t ;~ l
c o n t r o l ?
A .
I
ha ve neve r consit leretl i t , but oflhan tl
1
slloultl say
n o .
2. If you have not consit lered i t ,
1
(lo n ot thi11lc I ve ca re m uc li
abou t an o f fhand op in ion . A . T h e n
T
do n o t makc any ans\vcv- t o
yo ur ques t ion .
y. Do you not real ize that i t i s important that those Stc:cl ;
Ex ch an ge c luota tions sho111tl represent genuine t ra ~is ac t io ns ?
\.
T
think generally they (lo.
Q
You neve r hea r t1 o f such a t h ing a s ma t~ i l ) i~ l a t i onn Stoclc
Ex cha ng e? A . 011 , yes .
2.
Y o u
d o
not th ink tha t is genuine ,
d o you A.
No, not a t a l l.
Doun.rl;t ~
r ;
Gov~ien.o~~iro.r~iesROPITS SLIOL I.I)E DISCI ,OSIST)
Q You know how r igid the rules are in ISnropean count l - ics a s
t o t l is c losu res of I~a nk e r s an d p romote r s p ro f i t s ? A. Yes.
Q You know in those count r ies the I ) ro8s l )ec tus as to s ta tc a l l
the col l t racts hetween the or iginal vent loi - a n d right tlo\vn t o tlic
sel l ing publ ic?
A .
Yes .
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2. You t li ink tha t i s a wise ant1 \v l io lesome th ing , ( lo yo11n o t ?
A. I t l i ink so , yes , as a ru le .
; Q.
You kno\ v, ( lo you no t, t h a t i n t h is c oun t r y tlie amoun t of
t ha t banker s o r p romo te r s ~ i la l ce n a n en te rp r i se t z~hich hey
o f fe r t o the pub li c a r e cons it le re tl a ma t t e r o f t he i r p r iva t e I~u s in es s?
I ) o you no t t l i i nk t h a t i s w rong? 14 I t h i nk t l i e o t he r way i s I ~ e t t e r .
i \ 'l i e tl ie r youcan ( lo i t in th is cou nt ry ,
I
rathertloul)t. , . i
0
Do
vou no t t h i nk i t wou ltl go p r e tt y f a r i n t h a t t lir ec ti on if
t h e S t o ck E x c h a n g e w e r e recjuired t o h av e t h e c o'n tra cts o n file
before they \voul t l l i s t the secur i t ies?
A .
N o
bu t
T
th in k they ~ ~ ~ u l t l
ge t
u p
ano the r S t ock Exchange .
Q You thinlc i t is a whole som e t h in g , b u t if i t is clone t he y
woult l get
u p
a n o t h e r e x ch ange ?
A 1
( lonot thi t ik yon co ~i l t l lo it .
I ( l o no t t li ink yot i c o ~ ~ l t l a r ry i t out if you t r ied i t .
Q.
Yo u say it is r ig ht an tl o ug h t t o b e clone?
A. I shoult l
fa vo r soi i~ ethi i lg f th at k ind , ant1\zlo~ilt l ss is t i t , 11ut
T
s l~o ul t l h ink
t h e r esu lt wa s r a t he r t l oub t f~ i l .
Q. Have you no f a i t h i l l t h e p a t r i o t i sm a n t l ~ ~ub l i c p i r it of t lie
S t o c k E x c h a n g e ?
I
have , absolute ly .
Q. \Yhy ( lo y o u t h i nk t h ey woult l no t (l o i t ? A. I : ec a ~ ~ sehey
wo uld say i t in terfer et l wit11 th eir 1)usiness.
Q
Do
yo11he l icve th a t t lie secur i ties of a n y c omp an y. o v e r a
p erio d of five o r s ix y e ar s. \ re
\ \ , i l l
s ay , a r e l eg it ima t el y s oltl ove r
f r o i ~ w e nty t o th ir ty t im es a y e a r ?
ij
I shoultl no t h e a t a ll
surpriset l .
9 You
mean t o s p ec t il at or s? A . Spe cul at or s, e it h er l o ng o r
shor t .
(2.
r ln t l so ii ie t imes both way. ;?
.\. Ant1 so1i2c times1)oth.
S ~ ~ ~ c r r . . \ r o ~ s
l
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con t r a r y , ii lie pu t \ up the 10 per cent. , aiitl I hat1 soltl hiin the stocli,
I uoult l se l l l i ly i tock back agaln and get the 10 per cent
S I I O R T
SI I
,TSG
A
NIICESSITY
Q Y o u
me an jo t1 can sel l so i i ie t l~ ing ou have not go t ? D o you
appi-ove of sllo rt sellin g? A .
I
never ditl it ill
m y
life tha t I
k n o ~ v f .
_)
110 4011 app rove o i ~ t ?
2. I
do not l ike i t-not th at
I
wish to criticlsc it at all , beca use
I
do not see h o w you wil l get
a long \vi thout i t .
2
\Vhy
can ?roll not get a long \vi thout a mall ie l l ing some-
thing he ha s not got , in t lie \ \a \ of s toclc 14 That i s a p r inc ip le
of life,
I
th ink .
\Vocr.n SOT SPECUI.I .DUCE ITION
2 D o e i \\ all S t r e e t s l ~ e c u l a t i o n , l r . M o r g a n , d r a w a g r e a t
dea l o f money i r om tllc cotintrq ?
A . th ink they ( lo , yes .
Vould you fa \ ,or any legii lat iori th at wo uld reduce the
volume of specula t ion3 A N o
Q You \voultl let 5j)eculatlorl run riot?
A .
Y e s ; p rov it le tl the
Q Y ou can prevent them , ho \ \~ eve r , ro in nanl ing f ic ti tious o r
ruanipula te t l t r ansac t ions
A. T h a t is ano the r po in t.
Q. I say , there woul t l be less specula t ion? A . S o t a t a ll.
Th ey ou ld ge t the money .
Q.
They \\7ould get the money if they h a d t o d r a w it i r o m t h e
c o un t ry a n j \ \ ~ a y
A . O r f r o m E u r o p e .
Q T h e y ~ v o u l d l o t h a t by paying l i igl i ra tes
A .
Yes .
Q 4
111-ohibit ive ra te nould not s top money iroin coniing
A. Kot in t l ie leas t .
Q
f 4011 had a usury law that wozll t l apply to colla teral loans
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Q
Suppose M r. Mo rgan you or one of your par tners wanted
to ascer ta in the co~umitmentsof a big opera tor on the Street and
the collateral that he had into how m any banks and tru st com-
panies could you delve through your own partners holding connec-
t ion wi th them as d i rectors? A . None of thetn. I do not th ink
they would be al lowed to look at them.
Q They would not be al lowed to know the name.
A No sir .
Q
A director would not?
A.
No you cannot in a bank in
which you a re a director not in any firs t-class bank a t any rate
go and find out how much
I
have got in that bank.
~ U N T E R M Y E R :Wel l M r . Morgan I think th at is al l .
I
am
very much obliged to you.
M r. Morgan had been on the s tand more than three hours when
he finally was excused and the chairman announced that the com-
mittee would take a recess unti l January
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