J. P. MORGAN AND TRUSTS.

Manawatu Herald, Volume XXXVI, Issue 1218, 10 March 1914, Page 4

J. P. MORGAN AND TRUSTS.

Wall street was startled recently by the important announcement made by Mr J. P. Morgan, son of the late “Money- King,” to the effect that the great banking company ot which he. became the head after his father’s death had withdrawn from the directorates of fully twenty great corporations with which the firm has been connected for years. Although something of the kind was foreshadowed by the company’s withdrawal from the New York, New Haven and Hartford Railway, after bitter attacks had been made upon the “Money Trust” for its “greed” in arranging for dividends for the shareholders but not providing for the safety of passengers, Wall street had not expected such wholesale resignations. The Morgan company has been directly' connected with 39 corporations, having resources amounting to while indirectly, through interlocking directorates, the company had to do with 134 corporations throughout foe United Slates. These included banks, trust companies, insurance companies, railroads, steamship lines, and industrial corporations, with a total capital of The companies from which the Morgan firm is retiring include the New York Central Railway, with which it has been connected for over a quarter of a century, the “Big Four,” the Michigan Central, the Lake Short, and the New Haven Railways, the Guaranty Trust, the Aslor Trust, the American Telephone and Telegraph Company, the United States Steel Corporation, of which the late Mr Morgan was the founder, and from half a dozen prominent banking companies.

In the announcement of the withdrawal from the directorates of these companies, Mr Morgan gives as a reason for the step that attending the numerous directors’ meetings has proved too great a strain upou the time of the firm's members, which hereafter would be devoted to the company’s banking business.

Wall street looks askance at this explanation, and is inclined to believe that there is something underlying it which has not been made public. It is thought in many quarters that the determination of the Democratic Administration to break up all kinds of trusts and dissolve interlocking corporations has had a great deal to do with the decision.

Financial operators who were friends of the late Mr Morgan declare that “trust busting” would never have daunted the “Money King,” who, when he was asked at the investigation into the “Money Trust” a year ago if he thought all the,great corporations ought to be permitted to make their deposits with a private banker, who more or less controlled them, replied emphatically “Ido.” When one examines the list of the companies from whose directorates the firm has withdrawn, it is seen that they are all interlocking companies, holding shares in each other's concerns, and read in this light it is believed that tie Morgan people have taken this step in order to avoid legal complications, which are certain to arise under the activities of the present Government. Mr Morgan announces that he is retaining his personal directorship of the United Slates Steel Corporation, the Northern Pacific Railroad, the Mercantile, the Marine National Banks and the National Bank of Commerce,

Messrs J. P. Morgan and Co. announce, adds Reuter, that this step has been taken voluntarily in response to “an appropriate change in public sentiment” and on account of “some of the pro* blems of criticisms having to do with so-called interlocking directorates.” The severance is limited 10 resignation from the directorates ot certain companies and does no: imply any cessation of interest in their financial affairs.

Mr J. P. Morgan, the head of the firm, is resigning eighteen directorships, and other members of the firm have withdrawn from the boards of various companies. Mr G. F. Baker, Chairman of the First National Bank and one of the dominant figures in New York finance, is also expected to withdraw from the boards with which he is connected.