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MARCH 7, 1913
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Btitutiona. This takes no account of the per
sonal .fortunes of these gentlemen.
"Closely allied with this group and indeed
related to them practically as partners in many
of their larger financial enterprises, are the
powerful international houses of Lee, Hlggln
son & Co., and Kidder, Peahody & Co., with
three afllliated banks in Boston.
"In New York city the international banking
house of Messrs. Kuhn, Loeb & Co., with its
large foreign clientele and connections, whilst
only qualifiedly allied with the inner group, yet
through its closo relations with the National
City bank and the National Bank of Commerce
and other financial institutions, with which it
was recently allied itself, has many interests in
common, conducting large joint account trans
actions with them, especially in recent years and
having what virtually amounts to an under
standing not to compete, which Is defended as a
principle of 'banking ethics.' Together they
have, with a. few exceptions, pre-empted the
banking business of the important railways of
the country.
"In Chicago this inner group associates with
and makes issues of securities in joint account,
or through underwriting participations pri
marily with the First National bank and the
Illinois Trust and Savings bank, and has more
or less friendly business relations with the Con
tinental and Commercial National bank, which
participates in the underwriting of security
issues by the inner group. These are the three
largest financial institutions in Chicago, with
combined resources of $501,000,000."
Discussing the control of securities by this
so-called money trust the report said:
"Through their power and domination over
so many of the largest institutions, which, as
buyers, underwriters, distributors or investors,
constitute the principal first outlets for security
issues, the inner group and its allies have drawn
to themselves practically the sole marketing of
the issues of the greater railroad, producing and
trading and public utility corporations, which,
in consequence, have no open market to which
to appeal and in this position of vantage forti
fied by the control exerted by them through
voting trusts, representation in directorates,
stockholdings, fiscal agencies and other rela
tions, they have been able to turn to direct
benefit the deposits tfnd other patronage of such
corporations to these same financial institu
tions, they have been able to turn to direct
through which they work."
The report condemned interlocking direc
torates and consolidations and devoted consider
able space to a statement showing the develop
ment of control through these agencies in New
York institutions.
"It is manifestly improper," said the report,
"and repugnant to the theory and practice of
competition that the same person or members
of the same firm shall undertake to act in such
inconsistent capacities."
The report condemns the use of voting trusts
in the control of financial Institutions, and criti
cises private bankers in the capacity of deposi
tories for interstate corporations. Tho recom
mendations of the committee as set forth in the
report and as embraced in the bills accompany
ing the report urged the following reforms:
"Clearing house associations of which na
tional banks are members should be required
to become bodies corporate of the states in
which they are located and every solvent and
properly managed bank or trust company should
have the right, enforceable at law, to become
and remain a member.
"Regular periodical examinations of members
by a committee of the clearing house association
should be prohibited and instead of all such
examinations should be conducted by public
authorities."
The committee would give the government
supervision of clearing house certificates and
would prohibit the fixing of rates by olearing
houses for the collection of out-of-town checks,
discount or interest on deposits. .
As to the New York stock exchange the com
mittee recommended that congress "prohibit the
transmission by the mails or by telephone from
one state to another of. orders to buy or sell or
quotations or other information concerning
transactions on any stock exchange and also
prohibit national banks from buying or selling
or lending upon the security of stocks or bonds
listed in any stock exchange unless such ex
change were a body corporate of the state or
territory In which it is located.
"Require corporations whose securities itthp
stock exchange) lists," the report' continues, "to
make a complete disclosure of their affairs, in
particular any commission paid to promoters,
The Commoner. - 5
Rivals of Europe as well as Rivals of the
United States
General Rafael Reyes In the Now York
Times: Up to a few years ago tho immonse
region of the South American continent which
extends from the central mass of the Andes, to
the Atlantic, and which in its makeup has an
extent comparable to that of tho ocean between
America and Europe, was completely unknown
at many points. One of these regions, and one
of the largest In extent, fs between Columbia and
Brazil. Through It run the great Putumayo
and CaqUeta rivers, both affluents of the
Amazon.
From childhood I felt myself attracted by the
mystery of the Immense forests. T used to
cherish plans for exploring them, and of open
ing across them a communication with the
Atlantic, thus giving new channels for commerce
and for the glory of my fatherland.
"My first exploration was made accompanied
only by the savages of those territories. My two
brothers, Henry and Nestor, wore with me when
I made the next explorations. On our travels
my two brothers lost their lives; the younger
one, Nestor, was devoured by the Putumayo
cannibals; Henry perished as a victim of yellow
fever.
We started from Pasto, on the summit of tho
Andes.
"We traversed the Cordillera of the Andes,
rising more than twelve thousand feet above
sea level up to the region of perpetual snow.
Where this ceases there are immense plains upon
which there grow neither trees nor flowers, and
where animal life completely disappears.
After marching for a month through this
frigid desert we reached the limits of the soli
tary pampas. An ocean of light and verdure
appeared before us, in marked contrast to the
shadows and solitudes which we had just tra
versed. In the forests the luxurious tropical
flora exhibits itself in all its beauty. The trees
appeared peopled with birds of all colors.
For fifteen" days we marched through these
virgin forests, inhabited by vipers and wild
beasts, which fortunately did not cause us any
harm. We crossed tho torrents over bridges of
trees which we threw across them on foot.
Finally we arrived at tho Putumayo river, navi
gable by canoes, on the shores of which lives
the tribe of the Mocoa Indians.
The most disagreeable experience was not
the heat, nor the fatigue of roving all day, nor
the poor and scanty food, nor the dangers which
we Incurred among cannibals, but it consisted
in the nights which we had to pass on the im
mense river banks, on burning sands, in which
we had to dig a sort of grave to bury ourselves
for protection from tho mosquitoes. To such
an extent do these insects fill tho air that, on
clapping the hands together there remained
between them a solid mass of mosquitoes.
At last, after crossing the Cordlllora and go
ing over the 1,400 miles of the Putumayo rivor,
we arrived at tho Amazon river. Wo had at
tained tho object which Induced us to undertake
this expedition, which was nothing less than
to discover a river navigable for steamers
which could afford a means of communication
between Columbia and tho Amazon.
Although I explored In company with my
brothers, Henry and Nestor, the Amazo.n rivor
and the greater part of its affluents. Thus wo
discovered some unknown rlvors; wo established
steam navigation In others, wo connected by
moans of overland route the rivor navigation
with the towns on the Andes. In many of tho
rivers which at that time were unexplored to
day there are hundreds of steamers carrying
Industry and civilization to tho virgin forests
where cannibals wandered formerly. Tho ex
ploration which is today made posslblo by those
rivers, of rubber alone, which grows wild in the
forest, is worth several million dollars yearly.
When my brothers and myself made theso ex
plorations the Amazon and some of its groat
affluents were hardly navigated by even small
steamers; other braches of tho Amazon wero
navigated only by canoes, and tho Putumayo
and Caqueta rivers wero almost unknown. Tho.
civilized population living in these countries was
sparso and oven tho principal cities contained
hardly ono thousand inhabitants mnny of them
but a few hundreds. No Important commorco
existed, and yellow fever and malaria claimed
one out of every ten persons boTid enough to
penetrate those rogions. oi
Justice Impels mo to declare tlifit credit for
tho greatest and most fruitful conquest of
modern times Is due to the United States that
is to say, the conquest of the tropical regions
by means of sanitation. Formerly yellow fever,
malaria and other Infectious diseases reigned
supreme in Panama, Cuba and Porto Rico, but
now these places are as healthful as New York,
Buenos Aires or Paris. Explorers havo opened
up tropical regions, but modern methods of sani
tation are necessary to make them habitablo
and useful to mankind.
Tho Panama canal, tho most stupendous work
yet accomplished by the human race, will give
so great an Impulse to civilization in tho tropi
cal rogions and in tho countries known in South
America as "A," "B," "C," Argentina, Brazil
and Chili that it will not be long before they
will all be not only rivals of tho United States
but rivals of Europe.
In 1915, when tho Panama canal will be offi
cially opened, tho questions at Issuo between my
fatherland and the United States, I feel sure,
will have been settled in a manner creditable to
tho honor and dignity of tho two countries. And
at that time tho American flag,, will float over
the canal with pride and satisfaction to your
selves as well as with the heartfelt applause of
all tho Latin-American nations. ?
middlemen or bankers, out of any such security
interest or the proceeds thereof. .
"Require a margin of not less than 20 per
cent on all purchases of stock.
"Prohibit as far as possible the execution of
simultaneous or substantially simultaneous
orders proceeding from the same person or per
sons to buy and sell the same security for the
purpose of creating an appearance of activity
therein and any orders, the purpose of which
is to inflate or depress the price of any security.
"Prohibit members' from pledging securities
purchased and carried for a customer for an
amount greater than the unpaid fortune of the
purchase price, whether with or without the
consent of such customer.
"Prohibit members from lending to otlier
members securities carried by tho former for
customers, whether with or without the cus
tomers' consent.
" "State In its charter the conditions on which
issues of securities shall bo admitted or removed
from tho trading list and'provido for a judicial
review of its action in this regard.
"Keep books of account showing the actual
names and transactions of customers "and givo
access thereto to tho postmaster general."
LOOKING BACKWARD
Soon after the election of 1908, William H.
Taftj then president-elect mado the following
statement through a newspaper reporter:
"When I consider all that has come to mo I
wonder, with trembling, If there Is not to bo
some great misfortune to offset It all. Wo have
our health and our children. My parents aro
dead, but they lived to an honored and peaceful
old age. I have not had any grievous sorrow.
Politically, there wore tho Philippines; it was
tho turn of a hand whether I should go there.
If I hadn't I don't suppose I should be the president-elect
at this time. Of course It Is some
times said that opportunity comes to every man
and that it is to his credit that ho slezo It, yet
looking back I can not see that I exercised any
shrewd discrimination. I can not persuade my
self it was my own wisdom that led me into
tho work. Twice came tho offer of a placo on
tho supremo bench. My inclination was to ac
cept, and it was not duo to my judgment after
all that I did not. I have much for which
to bo thankful, and I can not help wondering
if there is not to bo some compensatory sor
row." Americans of all parties aro graceful that no
great sorrow came into Mr. Taft's life during
his service in the White House. Men who
strongly differ with hlra on political questions
liko him personally; and thero will bo ono
general, genuine American wish that the suc
ceeding years may bring Mr. Taft and thoso ho
loves tho highest sort of happiness.
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