Newspaper Page Text
THE SUN, FRIDAY. JANUARY 10, 1913.
lions Hint iMt emended over ii I mi:
rTiod of ve.irs.
Mr. I'titerimer he-an hl ouitiiliiiitlnn
of Mi. li.il.fi- In (Ml.mq up tin- tomnrl.
able pioipeilu of tin- first National
Hank hIiji'i' Mi l'.,il(or liocjini' ItM presl-
'dent in l v 7 l 'I'Im lunik's capital at that
time wiim jr.oii.niii) iitnl Its pulpitis: n ml
nmlli iilril i.i.itiM v-l iioo.
In t!ai the r.tpll.il or tin" hank w-.it
Increased t ?lii,mni.oon, the entire In-
:ctense of V riiiJ,iiiH li,iliu: boon brought
nhotil throimh I h- ! 'In r.i I i. li nf n divi
dend Tills dividend Will fifliv alflll In
l.'h'.n per ii'tit mi ii,.- ciplial viiii lt. ntnl
nftci' pa.Min; Unit dividend nut of the
VurpltiH there u.is .i li.ilami' li-fi nf $11.
;hll,IL'l, Willi Ii W:i I'tpiiv alt III In iibintt
I'.IOfi pi r i .Mil on tin. .it Uiln.il i upltul
. 'I'lw r" ird of ilh Idi iuN ftoni io.
when tile inpl:al uns Iiu iciimmI In llit,
COO.O'in, a ii" follows
inOi, I fin:! I'mm. JO p-r tent, iin;,,
"B'4 pel I ' III . ISini, 'JO1. 1'1'f (('lit..
IPO". pt up' I'm-., in:1 p,. i. 'lit..
.130!". pi'i ni . lit I (i. per cent ;
,l?ll. p. i n'lii , l'l:'. ;i.l p. r d in
1 Tin- loial dl Idcmls of Hi,- I, iMt foiirj
Vcars were L'l' p.-i tent . or U'l' iiuimiimi i
. JMr. linker ospliilni'il " ,il tin- l.iin Iota:
I fit 1 f0 s was iin.' i.io cl.'i'laial.oii of ,111
' rxtrn dhiditnl .1 Ion pci cent, or l'i,
I jnnn.iiftn, for tlin purpose of orKiini.liii; I
the llrt Sncutlu I'onip.iin '
' Ktplntns Net t'oitirtaii , I
' Mr. Interimer then tool; ni VMi Mr
Tlaker the -Mull of tlio organization of
, that comptinv 11.- tend Into tho record
m circular "lit mil b Hi- rirst Nti
i tlnnal limiK in lO'K explaining tin pur-
jiose mid plan of tin- new toinp.uiy
Tlll Is the circular
n,.r. Mr H i iI'imupiI to b for Hi-
fjntetct of to,'i,holili'n of thw luni. iliit
! a seinritv oiiip,iiit smli n has pioved
advantageous 111 lli. .'lis,, of sexct.il nlticl
I bunks should in orcimed foi the putpnsc'
In pal' of trar,.o tmc for us patrons 'ne
of profitable hii.iness winch though often
I transacted hv li.tnUers at,' not ,iires
Included within the inrpoiate ponci o'
i lintlon.il hanks Stnoiie these ,n the
acquiring .1 ml linlrime of rp.il pt.iti io,'ks
and otlvr pro..'rt v
To tlil nnd i' u (liirtd to Kri'itrn tin'
M"!! 'n " 'mi; of our tnpklinlilr to a
plnn of m cull! ""tic , ((iintv , oini.iti
I utiilir the name of Hi," l irst Sni'tintv i "in
fmn nltli n 1 .) i c I u)i ,i pit ii t of Hii.ihio.imiii
j h. to'U to f issiicil .to and lnM l
t trnt',. w ho shall ln tli pr.'ldotit. ir .-prp-ldont
and tli" r.islilor of tln Paul,
I Th irnstpps oxf'ri'ir th' powrrs of
th'.m n.-r-lup o' Hip stork and shall pppt tl.
ani' lioaid of iprpriois a th.it of tin- li.mk
. hall ollr. t .ill ilni'l-ntl' and pa thps,nii.
pTpr to Hip Lank for imtncdlati' disiTihu'ion
(o ls hatpholdpts who Imv as.t'tit'd to
t'pon r.'CPiun lh as'pnt of Hi" sto,k
hntdps thp hank pnrposps to tuakp .i spp( i.il
rihldt'tid of inn per i.'iit i$hi.ho.i (kk, hp
rpfppd hv thp triistpps and to l.,- ,ipi.,',
to Hip pawiiPtit of thp i.iintiil siiirl of thn,
p iiritv iotiii,m . whuh spu l, .hall I
lipid 1 Hip trns'.. for tli htMipflt ' Hi.
fimipio!dprs nf Hi. hank apiititu- in tins'
I 'poii p.hIi (prtifiratp of "Vprv as-i'tii m j
sto.'kluililpr of Hip hank tluT" shall lm H.p
IndorspiiiPin that appears on thp lollop nn:
'I hv formal acrppmpnt for Ita-orpor ii ion
' rtpnt. r . h.i Pppti .'.irpttilly prppar-'d I"
our oniivl and has Pceii .ipiroMd Pv out
fliipptois. "ho h.i"p and ipi otiiniPiid ,i.i
ollt pioporlion.itp sliar" of Hip hank's
spis n i n in no wisp ohatnrrd
t Kliiflh i;.-n and i.-tnin piompih Hip
m nrd po.M or i.ill at the haul, and -is'ii
The indor.spnipnt whleh ,u'!i ns.spnt
Inc si,,r.,ii,,,P. .simiPii pnnldpd that
Wh .!iar of 'ltt National li.uil;
ijtoik I ''pi ('.sent oil Ii) III,' .spiel; nf t'll
rir.it Stviiritv i 'oinp.tnv sliould sluri'
tonally and . nu.ih'.v Willi all others In
prollls and dividends ot the Sei mity
foiiipanv . Siu'li ratahle intetept is suh
.lect to s.ii" .in I transfer onlv hv the
iranffer upon the lio.iks of tli.. ImnU
nf one ni ni'irp of tli" shares of the
hank's ?p."U .fl t!;i: to v.,te on
tjir sliares ..f the !'' Sec.irllv I'.tn
Jjaii;. l"il. wftp I'.uisfprred to Triis.
trpf (.leorKe '. llaker. II i' I'ahne.
"totk. ! I, Iline I' Davison. ! I-'
Paket. Ir. and I'harlpp J) H.uUu
Mr. Cnlennver from the heslnnlnc
trlp'l ti oone the linpre.lon that
thr 1'lrst National I'.anl; and thp First
Srourltv Co'iipatiN are In elfert opp ron
rn. the Srrnrltv rompanv Pelni; used
to lomeal assets on wlilcli the hanl;
J"c not want to ropnt :
Mr, Unkrr Oiilllnes I'nrpoars.
Mr. I'.akrr wa ipry franl; In rrciard
tr thp purpn-'p 'if thr ."neurit v cninpanv.
"Tli" company was ord.inli'.ed for do
Ins hti.stieu that was no: specially au
thorized In Hio Pinking at :. W- held
inni j-pcu-ltlps that In the early d.iys
irtp i onsldprpil perfertly proper, hut
under come later divisions of the roiirts
the holding of li.inl; xtorU or oilier
etoi-k wan prohllilU'd . at any rat", tli"
(Vimpttollpr prohihltpd It."
Q a this roinpany fotmed fat thp
riirpos of ptiahlinc von and vom assoeia'es
n, dal inure freplv lu stocks' o huv and
pl stoeki freelv'' Ue nmei did tha'
y The seeuriiy i ompanv does not huv
arid sp) stoeks' I did nut -av not anv,
lint not I'reelj I do not think sinee its
nrcani7ation our purchases of stocks have
everaKed ion sharps a day
() Wtat were Its dealings? What was
tliA character of Iti liuslneiB? A Simply
to hold, the Inveatmenti we had
-Mr. Untermyer then asked Mr. HaUer
what bank Ktocka had been turned over
by the Klrat National to the Sr.
rurlty company. Mt. Halter nald that
no bank stocks had been owned by the
Vlrst National. He personally held at
that time L'8,000 shares or a control of
llio Chase National Hunk. He denied
that these shares ever had Urn bought
with the assets of the First National
bank or had been Included as the prop
erty of that bonk Mt. Haker thntmlit
that he had held the controlling stoi 1,
Interest In the Chase National for five
or Hix yenrs. Mr Haker acknowledKed
that the purchase of the Chase stock
wns in the Interest of the First Na
tional, although Its property was not
used nnd It never Hcnulred ownership
of the stock.
fleneat to torkhslilrra,
"You paid for the Chase and other
bank stockH with the Idea that the
stockholders of the First National Hank
should Bet the benefit of them?" asked
"Indirectly they Rot a benefit from
them and when we organized the He
rurlty company they were turned over
to that company," said Mr. linker.
Mr. Untermyer called on Mr, Haker to
produce it list of bank stocks (hat were
turned over by lilm or his associates to
the First Hecurlty Company Mr. Haker
felt that these should be regarded uu
confidential by the committee, but he
was willing to have the committee select
ny stocks from the list In which It
mlBht have an Interest,
"Anythlnu you really want I shall be
Hla1 to Rive you," said Mr. Haker, "hut
pleae mnke the list as brief aH possl-
Tr. Untermyer then named these as
rpnnE the entries nr. thr. list.
Minneapolis Trust Company, 200
"tares; Minneapolis First National
I'ank, 600 shares; Aelor Trut Com-
GEORGE F. BAKER AND SON LEAVING HEARING
I'opyrlcbt American Pre- Association.
pan.v. ;e0 shares Hankers Trust ' om-
pan L' .".On hliares ltrooklMi Trust
Coinp.in. ."" chares Chase National
Hank. L's i.n shaii.s l.ihertv National
Hank, fes i-li. if. s. National Hani, of
Cummer, e '. ina shares New York
Trust Company. 2."i" shares
Mr Haker testitieil that
certain rail- I
road Mocks owned hv the F.rst Na-
tiotial Lank were transferred to the
Fust Sccuilty Conipan.
'W Had the lirst National Haul; then been
arrvini: r.ulrond and oHier stocks'
y Had anv rnnipliint been taade hv the
I'.'uii tment at Washltutton about their
iMirvini: tuils i sir, and lot that
ih,iiiii we otc.-tni.'il the seiuriiv cmupauv
and tiiiiieit them over t mph with the
regulations We had been 111 business tor
half a 1 "iilui thioeand we never h ive had
any i oiuiil iitit from He. liepartmeht of
anvthnik' that thev thout,iit o'ldit to he
riindifleientlvth.it h,.. not rectified
y The s,.,.iiiv eomanv Itself has been
the sulnei t of 1 ouipl nnt . Ins it noi' A. -No,
y Did vou not l.now that the Attorney
(ieiieral had tendered an opinion as to its
lei;aliti 111 lonneition null the hank''
(III I s,,'v sotiielhllltf about ,t in the p.'tpets,
out Han ti.'et 1 oinptaineil to us
t Sou onlv s;( v. it m Hi,. itlp,rs''
y I his securltv eniiipauv i identical In
Its directoiate with the bank is it not?
y Ihe same officer1 A Some
y The stockholders of the security com
pany, do they have any vote? A. No, they
put their stock In the hands of the trustees.
Q It 1 a perpetual vniinrr trust, U It not?
A I do not remember
y Who are the votlnc trustees on the
first security stock' A The officers of the
hank and the officers nf the company
y Who eter happened to be the then
officers of the hank'' i. r Mr
Hitter Field llnrreil In UnnU.
y IllPtl the put pose of orcinizins the
There Are Sales and Sales
We have a twofold purpose in ours to reduce stocks
to a minimum and, in doing so, to gain new customers
by the value and quality of our offerings.
Gives choice of many desirable Suits and
Overcoats reduced from $22, $25 & $28.
For Overcoats, Ulsters and Suits
that were $30, $32, $35 & $38.
New and stylish goods, to
spuritv entnpany was to do thinss that 'or ten people, like thp First National Bank
i the hank ould not lawful. v do' Ves, it-pf was at first We thoueht of first
sir to do ih'ntts Hut thev weie no' slartmr 111" ... uriM ioiiii.inv that way
j s(., ialiv auilioriisl t.i do I he riesMon and tr.itisfprtm and douiir this hiisinesn
jahon' the 'eiraiiu oi lawlulness of a hank s ihiouith u Ih u has alwas been a fairly
liolihm: sio.-k onlv . ame up for i onsnlera- irolltalile iiarl of our hulnes p eon
lion in tlw wav in late ypiis 'he national 1 1 haled, however that eerv shareholder
, hanks were auihorieil-and n was one in i lie l'irt National Hank s-hoiild lane an
of se. reiarv tin-p's hrwht thought, for ! interest in it if he chose l or (hat reason
tne purpose ot iiealttn; in Ponds. I lint i i
what the I irsr National Itink ur.u i.to lu.r. I
i7, f, .,il that was Iheohieit of the imieie-t. piopoilionatelv. as any other
national hank act to deal in bonds and per.oi, or th lamest -t... kholdei I want
,10 bin bonds that they would hold of thelto -a too that the ortlecrs or Hie First
' 'io. cniiieiii in the tune of war The pur- I Naimnal Hank hue i:ien their services
'"-''" 0.00. r 01 nnv inner shicks
1 or yea 1 s nnu yea is as tie! er uue-tloneil liy
the I onip' roller
i) I lit II wliMti' I "nf ii prnhlhly leu
ea t s a i'o
111l for how manv yen- did vou ion
linue 111 eairy stocks in the First National
Hank alter the riuiit 10 do so was .pies,
tioiied' A 1'iohah!) tot live or mi veats,
I should think, hut 11 Her we were told that
we ali-oliitely must not do It we topped 11
U llo oil tint rmrir.t Hit. on.. 1.0 ,.r
this ,-eiurltv .i,iupiin ssa re maslon of
the haukini.' ai t ' iih, no, sir
O ou know that von cannot s.ii u share
of the s,.(.iirltv (oinpanv withoui a share
of the bank 1:01111: nith it, do m,u not'-
I Hi. yes, sir
y Inn know vo. i cannot bus a share of
one ithoiii theother' A Ves. sir
ii t,,,i ii.,, ,ii .r r i.i i
y Anil, as a mal'er or fact, the dentifv
,.,t ,....,.,, ,.r .........i... '"iiu.i
""' t .... .s,,,,, III l-ll- m
till' hallle, is it not ' Ves
y And the inanaBenient l the same?
A Absolutely, yes, sir
IJ The hunk can lend the secutlty com
pany money, can It not? A Oh, certainly
y And the security company Ii a de
positor w ith thehank, I It nor' A Ves, sir
"hare ProBt With All,
Q. Is there any further eiplanatlon vou
wanted to make In that connection? A
Ves, Just a little word. Let me say this.
As to the reason It Ii connected so closely
with the hank when we talked of thl
iii-i. ioe nmiiiai impulse, u we minted to
do It for nui elves, would have li,.,., '1,000 shares. Mr. Iitnont. of the Mor
have It owned hy a small coterie of eight 'sun firm, also Is a stockholder
""J """s... y 'I hen between Miutself, our son,
be sold while the) are new.
w e oruanied it as it was and the man who
I...I.I ...... .1..... ,r .,n..t- 1....I nu .,,,. a.
witnout enaiee tnroutli tlie wnole t tuns'
j no never made anv charge
I y Hut it is practieallv one concern,
iisjinoi? . 1 1 i absolutely the saniPowner
sliip. yes, Mr
y I his was u meiiis ihi'ii of rull 1 arty
1111: on the same business as you had been
i.itrviiit: on helot e without 1 omini; 111
contact with the law' es, str
, When Mr Haker pointed out that the
Fust Security Company had not been
i '"'tlvp ln 'l" ' slocks, that It had
1 not averaccd more than inn shares a
!da, Mr. l'iitcrm er called attention to
I the fact that it paid 17 per cent. In
' dividends last year nnd In the lour
ye.us of Its existence lias ucciiiiuiluted
'a surolus of 40 tier cent . or M.oiHl.niHI.
, , , , ,
y It must do some bus ness then mils'
, i .
, , , r Kjket ' I did not s.iv i li.it it
. . , .
ll does some
business Its liiipidatliii.' wihle is linger
than its surplus, and if it sells some Ms'iint v
that we have had for u lonjj tune thin may
I clve a profit and that noes nuo the pmtlt
and loss account
Mr. Morgin Ilia sbareholder.
Mr. Haker said he owned 20,000
shares of First National Hank stock.
His son, C. F. Haker, Jr., owns 6,000
shares. J, I. Morgan Is the next lara;.
est stockholder to himself. Mr. Mor
gan has 14,noo shares. II. V. Davison,
Mr MnrRnn's partner, has more than
Messrs .Volga!! A to, on own together
about how much of the stock'' A Isome
llilng over i),iki slum's out of inn.ooo
y. Is thern a large pan of the stock of I
l the hank owned by estates of fotmer asso
ciates of our? No, only one lot of nhout
y, la that the I ahnestock Interest? A.
(intlnnd Intetest Mr. I'ahnestock Is still
y. And does Mrs. Thompson own a large
block of stock? A. Ves. I would not call
that an estate, however, would you?
y. Did not that come from her husband?
A. She Inherited It from her husband. She
owns It absolutely clear herself.
y. There is no question Is thern that you
control the First National Hank In Its man
agement and afairs? A. I would not like
to be so conceited ni to say thnt.
y. Would you like to be so honest ns to
ay it? A. es, 1 would like to be honest.
y. There Is no don lit ubout it, Is there?
A. Oh, I think so.
Q. Vou think there Is doubt about what?
A 1 could not control It If I wanted to do
anything that others did not want to have
No nispnte A boa Control,
Q. As a inntter of fact, Mr, linker, do you
not and have on not for many yearn past
controlled the management of that hank?
A Thern has nover been any dispute about
y Thorn has never been nnv rilsnnt
about your control? A. About mine any
more than anybody's,
y. Nobody ha disputed your control?
Spectacles and Eyeglasses
Prompt, Polite Service
We hare dUeoatlnned oar stare at 104 Kaat 38d f. It la
Fifth Avenue at 27th Street
In Old nond St. A tlur serine
A No, sir, nnd I have not disputed anybody
O Who else lias undertaken to control
the bank? A Nobody nnd nobody has
undertaken to control It at nil There Is
no "else" to It
1 I understand. It controls Itself
A Practically. Wo are a ery hnitnonlnns
companv, sir. I ntermjcr, I am happy to
s.iv, and wo cannot et up any inartes
"Well, on the basis of 12i! per
cent In n few years, It oupht to be,
commented Mr. Fntermyer.
Cliaie National Sltnatloii.
Mr, Fntermyer then took tip W,h
the witness the recent sale of 1.1,000
shares of the Chase National stock by
the First Security t'otnpany to A. II,
WlRKln, president of the Clinse Na
tlonnl. Mr. Fntermyer nppurctitly
wanted to show that this sate had been
made because of the nctlvltles of the
Pujo committee, but Mr. Haker con
tended it had been under contempla
tion for n lone time. Mr, linker said
he conducted the neRotliitlnns result
ing In that sale. Mr linker then
asked permission to make a statement.
1 purchased the Chase National Ha nW
shares with an Idea of consolidating It
with thp First National Hank, tho same ns
we did the Hank of the Itepnbllc. that was
the absolute intention of it Lnter on it
prospered so well Itself and the stock be
camo more valuable nnd we concluded that
wns not desirable, thnt our bank was larue
enough of itself and theirs was large enough
of Itself, and we felt rather that we would
like to divest ourselves of some of the re-
iponslbillty of It Mr Wlggin was willing
to make that bank his life work, and It
was to attach him and his associates to
the hank that ln.non shares went Inside
the hank, to be held and kept by them,
to centre their Interest In the Chase Na
tional Hank permanently nnd anchor them
as much as such things can he done
y Where Is the control of the bank now,
since last week? A 1 do not think It has
been changed any It all works right
y Hut where Is tho rontrol now? A
There Is not any In thnt sense
y The rontrol has been scattered, has It?
A Ves, sir
y s there any one Interest that holds
anything like as much ns tho security com
pany still holds In the Chase bank? A.
No, sir, except Mr Wlggln's interest, nnd
I do not know how that Is divided I could
not tell yon
Wanted Shares for Ofleera.
y Do you not know that Mr Wlggin
distributed his Interest nnd did not take
It himself Well, if he did, the under
standing was he wanted to keep 10,000
shares for the officers and employees
in the bank and the other S.ono shares were
to be distributed
y Did you sell It on credit? A It has
been most all paid for.
y Vou thought It was better, did you not,
thnt the First National should not continue
to have the control of another large bank?
A I was very glad to get relieved of the
responsibility that attaches to It
y Have you changed the board of di
rectors at all of the Chase bank? A No, sir
y Then the First National has still a
majority of the directors of the Chase board,
has It not' A Ves, sir, they have
y What difference has been accomplished
so far as concerns the ijuestion of actual
management and control? A I did not say
that any had
y A on do not think there has been?
A No, sir
y It ivus not Intended to bring about
nnv difference, was It? A I sliould rather
expect .'hey were trying to get some In
fluential interest to come in there
y Do you understand that It contem
plates any change In the control or manage
ment ' . No, sir I do not
y Have you or have vour board of j "" ",". your asseis aref
directors i o litem plated any action divorcing . U!''v ru"'wted In the confidence
Hi curlty companv irom the hank.' 1 'wy ',1,,vp 1,1 1110 1"n, of Erectors.
A No, sir lfthereshoiililbeanvquestli.il1 ,y I nve you ever heard of that being
come up as to the Illegality or Irregularity ' ''"""I' e sir. but under the manage
of the department, and they so eonstrii.il, , ""'.'i' nle eare having to-day in the Cotnp
we could separate them ina moment (roller s office how often do you hear of
y. There would be nodimculty In separat- I uny ,,.'!"k ""''sing that?
lug them, would there? A No, sir, 1 think not. I , 4 v"rV time there is a failure of a bank,
do you not hear of It ' A Thereare 7,00 hanks.
Wanted to Kaon Assets. When have you ever heard of any number
,. . ., . , , of them having failed? There are abuses
Mr I ntermyer then wanted to know f everything under the sun, I say that
If Mr. Haker saw any objection to stat- I the confidence Is first In the directors, next
ItiK to n (.'impress committee the assets i In the Comptroller or the Currency and In
of his bank, with the exception of loans ' the bank examiners and the Clearing House
and the names of borrowers. Mr. etuniiners, and that this establishes Rom.
linker's bank hnd declined to furnish
such a list.
"I wish," said Mr. Untermyer, "you
would tell tlSi why n bank should not
stnte Its assets, not only to a commit
tee of Congress but to depositors and
stockholders and everybody. Why
should not the assets and the detailed
Our card and filing
equipment has a higher
efficiency value than has
ever been attained by any
In price it is lower than
equipment of the same grade was
ever sold before.
Two reasons why no pur
chasing agent can afford not to
be familiar with it.
Telephone, Franklin sidi.
The highest type of Flllna; Equipment Without
tho Fancy Prices
37 x Broadway
237 FIFTH AVENUE (27th St.)
125 WEST 42nd ST. (Nr. BVay)
680 MADISON AVE. (Cr. 60th St.)
255 LIVINGSTON ST. (Brooklyn)
assets be a matter of public knowl
edge?" "Iluslness would come to rather a
standstill," was the reply.
Q I want yon to explain to the committee
why. A I cannot etplaln It
y. Von mean you can clve us no reason?
A. It would bo eiposlns nil the detnlls of
thnt business to the whole world
y. lo j on inesn ll is expoin the Items
of i our property? A es.
' y And thul you think would paralyse
the business of the bank? A It certainly
would teduce It erv materially.
o Whv should that reduce It.'
! nilht hold n lot of bonds that e would not
ill!.' lu f'Ai'jn w ,,,r ii,",i
y Is not that a prettv good reason whv
people should ipi? No, sir
y. Let us se shout that When oil
Issue vour statement every year you glic
a statement of the total amount of your
assets, tlo ou not? A rn, sir
I, el Them ek Clr71cer.
y Ito you not think people who would
he depositors In bank or Its e'.lstine de
positors nie entitled to know of what that
item of assets consists? If they think
they are thei can come and ask the officers.
y. Vou know the oflhers do not disclose
that, do you not? A If they are not satis
fied they had better take their account
somew here else.
y our answer to the suggestion that a
bank should be tequlred to disclose Its
nssets Is thnt If the depositors do not like It,
they should go elsewhere, Is that It? A
They can. es.
y And that Is your position on It any
way? Ves, that Is my position.
y. Do you not think the stockholders of
the bank ought to he permitted to know of
I what th assets consist In detail? A I
think they should, practically
y When are they ever Informed? A
They are not Informed because they do not
generally care to know,
y. Have you ever given a stockholder
who nas not n director access to your books
to see what the assets are? A No. One
reason Is that they never require It. They
select In our bank fifteen gentlemen to do
that for them, called the directors, and the
stockholder entrusts with Mr Smith nr
Mr. .lone, a director, the authority to do
that for him
No Trouble Finding llnl,
y Hut take the stockholder who is not
one of the majority and who wants to know
what the assets of his bank are, do you
not think he Is entitled to know? A. I
never thought of It before, but If he wanted
to know he would not have any trouble
finding out In the First National Bank.
y, You have never given that Informa
tion, have you? A We never had anybody
y. Do you not recognize that It Is Im
portant to the security of depositors nnd to
fair dealing In banking Institutions that the
assets of the bank should be open to In
spection? A No, sir, I do not
y. So that you do not think there ought
to be any way In which anybody can find
out whether the statement of assets that
Is contained In gross on the balance sheet
represents more or less than the real value?
, A There Is a way In the first place there
i Is a board of directors elected for thnt
purpose Then, taking the First National
Hank In New York city, there are the Clear
ing House examiners that we have had,
-especially of late years. Then we have
the Comptroller, who makes an examination
through his hank examiners twice a year,
and then we send to him a report live times
a year There are eight reports a year of
the assets of the First National Bank,
Protected hy Canddesee.
y But those are only made, are they not,
in a confidential wny to the Government
nuthorltles or your own agents In the Clear
ing House? A. Ves, sir
y How can the public be protected or
the depositors be protected If you Insist
confidence with the people or the de
poilors and the stockholders, and I never
have known of their claiming or asking
for anything different
y. Why should the public do business on
confidence when It can get the facts? A,
There would not be much buslnesi done If
It was not done on confidence,
y. There would be no business done If
the public knew the facts? A 'thetsenuv
be aorne business.
y, But there would not be mtirti (.
A. There would not be so much.
Q. Vou do not mean that, do ro ,
T do mean the people do not nam
business that wny. They tlo not wan' o.
faoU. They do not want a list of m.r .,,
curdles or any other bank's secuiliie-
Q, Then.lt Is your opinion that an i. ii
who wants' to buy stock at a sale choi, i , .
compelled to rely upon his ronfldem e u M
Comptroller's ninmlnatlon nnd the t i,. ,,r,,.
House einmlnatlon, without kiioivm; ,
fnnts?' A. If h wants to ktim (,H
details of It, yes sir.
( reetll la Haste Principle.
Q Knd you nte also of tho opinion
you, Mr linker, that with respect 1 i t he
public generally and th depositor ihiH
Is nothing In tho clnlm that thev might i
know of what the assets consist? 0
sir Mr I ntermyer, thn fundotn-in.ii
principle of hanking perhaps more ttvu,
some others l credit,
y l'y ciedll you mean confidence in
men who nie running the concern
y. Vou think the public should iu.
blindly follow on confidence and should not
know anything about the facts? A 1 .In
not think they do It very hlindlv
1) Vou do not t ti I Ills, they ought lo
you? A. No
y ni do not think they ought to ru
on cotitldenee? Vou think thev oiisM 'o
have the facts, do on not? A N'o, I do iv.i
y. Which tlo you think they should hst.i,
conlldenee or facts, or both'' I th t,,
they ought to have confidence
y. Without the fact? 4 Without tin
fuels in detail
y on think the people who are nun
aging the estates nnd nffalrs of lntnt
ought to reiiulre.lhnt the Investor and i(i
people who deal with thetn -hoilld net
entirely on confidence and not know 'tlm
they are doing? And Ihell faith in tin
t.overnment administration and the lira r.
Ing llou-eailminUtralloti and the ditei 'ntV
administration of it. yc, li
(Ire I'ncls In Ihe tirnu.
y Hut why not give them the Ui t?
A Heenuse we do not want to dlilo 4.11
our fncts W'e do give them In grot.
y. Will you tell us where any Inuirr
would ensue to anybody, the hank ot ant
body else, from ailing people th" fari
ulthout names of the borrnwets' I ihi
not think nf any particular injury to nnv.
body coming from that
y. Then whnt renson i theie foi nt
doing It? A. Ilecatise I do not bclievs
there l nny good In It
y. Have you said all ou want to say un
that subject? A. Ves, sir, and more too
Mr. Cntormyer questioned the wit
ness In regard to the organization of a
votlnc trust for the Guaranty Trust
Mr. Halter Is one of the three vol
Ins trustees. Mr. Ilakcr acknowledged
that he Is a member of the flnntiif
committee of the Mutual Mfe. but he
could not recall the circumstances under
which the Mutual parted with Its tiuai
anty Trust Company stock In 1310. lie
denied that he conducted the negotiations
with the Mutual. lip thought Mr
Davison Invited him to become a voting
trustee. At the time of Ita organiza
tion tinder the votlnc trust Mr. Haker
owned 100 shares In the Guaranty
Trust Company. Now he owns 1,000
Explain. Vnllnax Trail,
y Can you not tell the commlucc tir
this solvent and prosperous trust cin
pany was put under a voting trust' 1
think I can. The flankers Trust iotnpanr
was organized sonio years ago by a do. rn
of the most alert nnd active financial ni'O
downtown. In whom the people have gei
erally reposed a good deal of confident e
nnd they made a very prosperous concent
They were not Astors.nor were they Vnn
derbllts, but they put this stock togctlirr
and after making a prosperous company
they did not want to have somebody -tep
in and buy It and they made a voting trii-l
Later on they thought they would buy thf
Guaranty Trust and consolidate it, the sam
as we contemplated with the Chase Hank
y. Vou mean the Rankers Trust Com
pany wanted to buy the Guaranty Trut
A Ves: and It was bought in their lnterrt
In that way. They proposed to put It.
i' could be handled conveniently, In a voting
y. Then you undentand that theTJuaraniv
Trust Company waa bought In the Intere-t
of the Bankers Trust Company, do you'
A. Ves, sir.
y. From whom waa the Guaranty Tnit
stock bought? A. I think from the Mutual
I.tfe, part of It.
y. Where waa the rest of It bought?
They must have bought It from th lUrrl
man estate or else Mra. Harrlman kept na
Interest In It. I do not know which she did
y, Thnt voting trust of the Guarar.tr
Trust Company waa kept a secret, was It
not' A I did not know that It was
Approve Vatlatr TraU.
y Do you think a voting trust for a greit
financial institution 1 a proper form (
management? A, I do not ee anything
tuproper In It.
I Q. Let us see If ther I not anything
improper In It. Do you not think th publlo
has the right to rely upon th (tatemeat
as to who constl tides the board of directors
as being a statement that they are rrtllr
the selection of the stockholders and that
they are running the Institution? A Ob,
ye, unless that was kept a eecrel, ss yea
say, which I never heard of before,
y. Do you not think It would b wrani
to constitute a secret voting trust, puttlar
the power In two men whooomeln the boirri
of directors from time to time? A I 't
surprised If that waa the condition.
y. Do you not think that would b wrong?
A. I should not do It In that way, but 1
think It waa all done for a (peclflo purpon,
for the purpose of putting Ihoie bank
together, and to facilitate it.
y. Do you not know th Bankers' Trui
has been under a voting trust alnee ion
tlnce It was organized? A I did not kno
Q. That was not done for the speiifli
purpose of putting it together with anylhme
else, was It? A. They cqntemplnted thai
always, I think, for combining with -oin
I other companies when they gathered ihem
y. Why should they need a voting trun
In order to buy other companies? A Inn
not know, 1 never participated In 'Uiit
affairs, I do not know anything about r
Mr. Baker I Shareholder.
Mr, Baker acknowledged that he pet
sonally owned l.fiOO slinrcs In the Hank
ers Trust and 2,500 In the First .Se
y. I would like to know whether t
consider banks and trust companies shou I
have tho right to constitute voting 'rn-'
managements? A. 1 hive never gnen n
any thought. That Is a puestlon for ti"
stockholders to decide for themselves I
never thought anything about It.
y. What good reason Is there that ther
should he a voting trust of nny (Inane l
Institution? A. 1 cannotfaee any good tea"""
why there sliould be for the First Natlonm
Bank. That Is the only thing I nm In
y. Can you see any good reason ln
there should be for any others? A I do
y. In your Judgment should not w
public who are asked to deposit their fun '
in the banks bo Informed as to the eiisteie
of a voting trust? A. Vou surprised mr
lb first time that it ever happened th' .
was not !,
Thr Afternoon Ae.ilnn,
The committee adjourned for an lio i"
for luncheon and then Mr. I'nteniv er
asked for further information In rorr5
to Mr. Bakera duUaa aa a voUu trut-