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The Commoner.
VOLUME 13,NUMBER 9
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The Commoner.
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AX INTERESTING STOKY
In another column appears an article entitled,
"The Story of a White House Deal." The Com
moner of October 23, LOOS, printed tho follow
ing editorial:
"Daniel J. iCeofe, sixth vice president of the
American Federation, of Labor, after helping to
formulate tho political plan of tho federation and
supporting Bryan for months, announced his
support of Taft last week. Tho announcement
camo immediately after a conference between
President Koosovelt and several labor leaders,
ono of tho latter being Keefe. Only a few days
before this conference Keefe had authorized
tho signing of his name to a report of the execu
tive committeo reaffirming its support of the
political program outlined, that program carry
ing an indorsement of Bryan and the labor
planks of tho Denver platform. It was immedi
ately charged by other labor leaders, among
thorn Timothy Ilealcy, that Keefe had been
promised the olllce of commissioner of immigra
tion, lately made vacant by the death of Frank
P. Sargent. Ilealey declared that the compact
was made known to him by a reliable man, who
got it from a cabinet official. Secretary Loeb
has issued a statement denying tho report. Com
ing so soon after Keefo's re-afllirmation of the
federation's, position, and his conference with
tho president, labor leaders who are standing
by tho federation program insist that something
moro than a perfunctory denial by the presi
dent's secrotno is noeded to remove suspicion."
Theodoro Roosovelt will havo something to
think about when he reads of tho developments
In this case. P'd he really have reason to be
lieve that under the circumstances tho public
would obtain faithful sorvice at the hands of
ono who had betrayed his friends in exchange
for an office? Can Mr. Roosevelt entirely escape
responsibility for the humiliating conclusion of
the Daniel J. Keefe story?
GOOD WORK
John H. WoodwaTd, Jefferson City, Mo. I
am now sending your paper to five other persons
and as soon as the Missouri legislature of which
I am a member adjourns I will send in some
new subscribers. I wish you success and will
do all in my power to advance the progressive
democracy.
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AVOODROW WILSON'S NEW BOOK
"THE NEW FREEDOM" '
In anticipation of tho large demand
for Woodrow Wilson's new book, "Tho
Now Freedom," just issued, The Com
moner made special arrangements with
the publishers to supply its readers
direct. All orders sent now will be filled
without delay. This book is handsomely
bound in cloth, and printed in large
clear type on line book paper. Every
American who believes in progressive
measures will receive inspiration and
help from this great work. See special
offer to Commoner readers on page 16.
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Th
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Following is an Associated Press report:
Washington, Feb. 28. Three divergent reports
were reported to tiro houBe today by the mem
bers of tho committee which conducted tho
money trust investigation. The majority re
port, signed by Chairman Pujo and the six other
democratic members of tho committee, found
that a money trust exists, according to their
understanding of the term. This report names
as "tho most active agents in bringing about
the concentration of money and credit," J. P.
Morgan & Co., First National and National City
banks and Kuhn, Loeb & Co., New York; Lee
Higginson & Co. and Kidder, Peabody & Co., of
Boston. Two bills accompanied the report, one
forbidding the use of the mails to stock ex
changes which fail to observe prescribed strin
gent regulations as to the conduct of their busi
ness, and the other prescribing rigid rules for
tho conduct .of national banks, their officers and
clearing house associations to which they belong.
This report is substantially in accord 'with the
conclusions presented to the committee by
Samuel Unt&rmyer, counsel.
Tho first minority report, signed by Repre
sentative Hayes of California, Representative
Heald of Delaware and Representative Guernsey
of Maine, republicans, set forth that tho Investi
gation "has not disclosed the existence of any
so-called money trust," but added: "It has,
however, disclosed a dangerous concentration of
credit in New York city and to some extent in
Boston and Chicago.
"While agreeing .substantially with the ma
jority," said the report, "on many of the abuses
to be corrected in the financial system, the stock
exchangee and the clearing house associations,
the undersigned have doubts as. to the wisdom
of some of the remedies proposed by the ma
jority." This report further sets forth the belief that
beforo legislation, testimony should be taken
covering more fully the effect of the various
changes in the laws that have been suggested.
"It is manifestly impossible," the report con
cludes, "that any of the proposed legislation can
be considered by this congress and it seems to
us wise to leave the matter of recommending
complete remedial legislation to those who will
be charged with the responsibility of formulat
ing and reporting such legislation to congress."
An individual minority report filed by Repre
sentative McMorcan of Michigan, republican, was
a flat, detailed disagreement with tho recom
mendations and findings of the majority.
"While I believe that attention has been
called to grave deficiencies in our financial laws
I also believe that a sinister light has been
thrown over banking practices which was not
justified by the facts, that no effort has been
made to show the reasonable and commendable
explanations of theso practices and that in many
cases an impression has been given to the conn
try as to tho character and motives of leading
bankers which is altogether unfair. A senti
ment has been created throughout tho country
against Wall street and many of our good citi
zens do not realize what it means that New
York has become one of the world's leading
money markets and that the banks of New
York and their associations now are able to
handle large transactions which they were un
able to handle only a few years since. I feel
tho feI6fryAmerica? cltIzen snould b Proud of
the fact that we have a city where there la
wil?n cpItal,V) handI thesQ enterprisesrand
should take pride also in tho character and
integrity of the men who are at the head of
its financial institutions." d f
nfI?CTorn? ?eclared the proposed scheme
of regulating stock exchanges "drastic and nr.
warranted" and that there was no "real evil"
interlocking directorates.
JJe mJorIty renort ater declaring tho exis
tence of a money trust, said that the Increased
concentration of control of money and credit
'7 eected .Prlnc,pal,y as follows: dit
'"t in rough concessions of potentials
competitive banks and trust companies which
concessions in turn havo recently been brought
under sympathetic management. wougnt
SecondThrough the samo powerful in
temta becoming largo stockholders in pote
This a the simplest way of acquiring control
but since it requires tho largest investment i
capital, it Is tho least used although th !
investments in that direction for fha anoSSS
oney Trust
9.
"Third The confederation of potentially
competitive -banks and trust companies by
means of the system of interlocking directorates.
"Fourth Through the influence which the
more powerful banking houses, banks and trust
companies have secured in the management .of
insurauco companies, railroads, producing and
trading corporations and public trusts, fiscal
agency contracts or representation upon their
boards of directors or through supplying the
money requirements of railway, industrial and
public utilities corporations and thereby being
able to participate in their financial and busi
ness policies.
"Fifth Through partnerBhip or joint account
arrangements between a few of the leading
banking houses, banks and trust companies in
the purchase of security issues of the great
interstate corporations accompanied-by under
standings of recent growth sometimes called
'banking ethics' which had the effect of effec
tually destroying competition between such
banking houses, banks and trust companies, in
the struggle for business or in the purchase and
sale of large issues of such securities.'
On the question of the existence of a money
trust, the report is specific and detailed.
"It would, of course, be absurd," said the re
port, "to suggest that control of the bulk of tho
widely distributed, wealth of a great nation can
he corralled by any set of men. If that is what
is meant by gentlemen who deny the existence
of a money trust, your committee agrees with
them. It is not, bowevej, necessary that a group
of men shall control directly the small savings
in the banks .nor the scattered resources of the
country in order to monopolize the great finan
cial transactions or to be able to direct credits
to be extended or withheld from business enter
prises. "The great bank "or banker, with access to
the main springs of the concentrated resources
of other people's money," the report declares,
can handle the vast issues of securities -now de
manded by the commercial and industrial de
velopment of the country, but the bank resene
system, it is further contended, concentrates a
large part of the funds of the smaller banks in
New York where a group of men have strength
ened their interest in the various banking in
stitutions the report said.
"If, therefore, by a 'money trust' is meant an
established and well defined identity 'and com
munity of interest between a few leaders of
finance which has been created and held to
gether through stockholders, interlocking direc
torates and other forms of domination over
banks, trust companies, railroads, public ser
vice and industrial corporations, and which has
resulted in a vast and growing concentration of
the control of money and credit in the hands of
a comparatively few men your committee has
no hesitation in asserting that the condition
thus described exists in this country today.
"To say that the domination of this group
ovejr the money and credit of tbe country con
trolled by our largest financial Institutions, and
tnat is available for financing large security
issues for the current needs of our principal
interstate corporations and of the individuals
conducting great enterprises and for stock ex
change loans, is at least as effective as, for in
stance, Is the control of the United States Steel
corporation over the steel industry, is an under-
S5S lnV of th0 situation, although, the
methods by which this control Is effected and
f,5L toge?er ai"o of course, essentially dif-
charactear?" a mre loose and intanSibl0
tT,Ce?iing this as the lng-sought "money
as follows3- Committee outlined the membership
ntn3wParties to thiB combination or undcr
S? if r community of Interest, by whatever
cSnir. maybe called' may oo conveniently
fnnr ' he PurPose of differentiation, into
can the inner group, consists of J. P. Morgan &
F?w LeT0Ernized Naders, and George P.
,aild ?mea Stillman In their Individual
nnn?rii eS, a?d ? tnelr oint administration and
r?5L0if ? FBt Naonal bank, the National
ChL ba15k;,tno National Bank of Commerce, tno
3 ?atIcma 1", tho Guaranty Trust com
K' and tho Bankers' Trust company, with
nw Wn resourcos, in theso corporations
SlimSn ,0XCe8a of H.300.000,000, and of a
number of smaller but important financial In-
