AMERICA UNDER THE MONEY TRUST.

Taranaki Daily News, Volume LV, Issue 256, 19 March 1913, Page 4

AMERICA UNDER THE MONEY TRUST.

The politic*, public ;u[ministr<!l.ion and business life of the I States in recent veins luivc hern a Hook of lievelations for the lnoih in world. I!ut none of tin' sensational disclosures of civic ,H'!afl. police corruption, food adulteration.. crooked insurance business, or approach, the importance attaching to the riwnt investigation of thi' "Money Trust'' by (lie I'uyo CommiUee at Washington (writes the Nation). It has lon.u' been evident that (he seal of modem economic dominion is occupied no longer by the j;reiit luerclianl. manufacturer or oilier specialised capitalist, lint, by the directors or controllers of general economic power in the lluid form of money and credit. for the profitable conduct —nay. the very existence -of all irreiii: modern industrial and commercial businesses, factories, mines, railways, mercantile businesses, and the like, depends upon free and easy access to the main conduit-pipes of money, alike for (lie supply of capital and of temporary accommodation in the >hape of loans, advance-; and discounts. So if conies about that the financiers, who have the handling of frreal masses of money, are more mid more the masters.

of the business world, determining the development of territories, feeding or starving whole industries, making or marring the fortunes of populations. Equal access to credit upon reasonable terms is as essential to the conduct of any modern business as facilities of transport or of market. These considerations make it evident that a trust or combination which can yet control of the supply of credit, so as to determine the amount, the direction, and the price, of its supply, will be able to exercise a despotic power over business, and to exact an enormous toll from the productive classes. It has long been notorious that' in America, the classic land of industrial evolution, where the logic of ''free competition" has had largest liberty to work itsalf out, a little knot of financiers, controlling the chief banks, insurance companies and trust companies, had wellnigh achie veil this position of monopoly. Ono or two of them, such as Mr. .1. I'. 'Morgan, had always been bankers and financiers. Others had originally been railway men or organisers of some special line of industry or commerce, such as oil, sugar or beef, and were led later into general finance, partly through their private investments, partly by the interests in railroad enterprise which they found it useful to acquire. There was not a complete identity of interests among the members of this- knot of financiers, and tlie particular interests some of them retained J7l special railroads or in other stocks, sometimes split them up and led to acute warfare. But the sense of the solidarity of supreme finance has been growing, and the frank

admissions made to the committee fully justify the grave apprehensions with' which good'citizens and cautious business men are coming to regard the situation. Great audacity and great opportunity have conspired to hand over the keys of economic dominion to a tiny ring of men, among whom it seems- tli.at Mr. .T. P. Morgan. Mr. Stilhnan and Mr G. F. Baker constitute a sort of supreme junta. The control appears to be exercised through various instruments. Some-* times we hear of trust agreements, by means of which five men control two of Xew York's greatest financial institutions —the Bankers' Trust Company and the Guarantee Trust Company, with aggregate deposits amounting to nearly $400,000,000. The organisation of clearing houses is another instrument oi power for the ring in control of its committee, who can either refuse admission to a bank they desire to injure, or can exercise their right to examine the books of banks in competition with those which they control. The more usual machinery of combination is either by means of '■holding companies," in which some general financial corporation acquires a controlling number of shares in other corporations, or else through the device of "interlocking directorates." Evidence was adduced to show that eighteen big financial institutions in Xew York, Chicago and Boston were associated with no fewer than 130 other corporations through interlocking directorates, com trolling capital amounting to the gigantic figure of $-25,325,000.,000. It is pretty clear that, in this supreme and most essential of all markets, effective liberty of competition lias been displaced by combination.

CONTROL NOT COMPETITION. Probably the most conclusive practical evidence of the lion-competitive state of such finance is all'o'rded by the recent dividends paid by the First National l>auk, Varying since 1574 from 20 to 120 per cent., they have reached in the last four years tlx; handsome figure of •22(i per cent. No wonder the management of this bank was described by Mr. Uaker as "a sort of happy family." In bis examination, Mr. Morgan candidly admitted that he preferred "combination to competition." "I like a little competition, but I like combination better. T would like to sav something right here that I may not have a chance to say again. Without control, you can't do a thing. Control is the important thing." Mr.' Morgan could, however; admit no danger in the present state of things, and no reason why the public should want to interfere by way of f!o----vernmental control. To one question of Mr. Untermyer he gave an interesting reply, which sheds clear light upon his genera] attitude of mind. "Yon believe in concentrated power?" he was asked. "Well, that is a question of personal power, of personality," and then he proceeded to explain how, in loaning money, he went not upon technical security so much as on the borrower's "character." Tint the questions pressed upon his colleague. Mr. Baker, bring out the precariousness of such a defence. After admitting that the "concentration" of finance had "gone about far enough." Mr. P.aker was asked, "Von think it would be dangerous to go further?" His replv was, "Tt might not be dangerous, hut still it has gone about far enough. Tn good hands, I do not say that it would do any harm. If it got into bad hands, it would be very bad." "If it got into bad hands, it would wreck the country?" was the following question, to which was given the. evidently reluctant answer, "Yes: but T do not believe it could get into bad hands." Then Mr. Untermyer pressed home the sharp point of his enquiry to an admission which, to every thinking person, is conclusive of the perils of the situation. "I am not speaking of incompetent, hands. We are speakin'i of the cuiieentralion. which has come about, and llie power that it brings with it. getting into Ihe hands of very ambitious men. perhaps not over-scru-pulous. You see a peril in that, do you not?" "Yes." was the reply. "So that the safety, if you think there is safety in the situation, rcallv lies in the personnel of the men?" "Very much." "Do you think," continued Mr. Untermyer, "that, is a comfortable situation for a country to be in?" "Not entirely," said Mr. linker, very slowly.