Newspaper Page Text
THE SUN, FRIDAY, JANUARY 24. 1913.
'1
SUBWAY BONDS
A PHJO PROBLEM
iv' 1'itpC
i' v hi nor'
1 1 T l viiilllt-'i I
i - '"l-llies'l.
(.'in-1
If Ml
inl.es I ii ihtlr V mi I li fn loess.
;1t was nt I i ii.'.nl tliiil Mr. I'nter
fiiyor iimli Im.i!, .m, nn.ilvsls nf the
ptilhliilin ii. nu n wlm organized i
till' ll.ltlY II 'I'' 1 1 1 1 II . I
'-'l IIH M'l' .in.lt tlll-M' .Vllllllg II If 11," I
raid hi' ' I If it nt ttirlil Wlln ap
pears In tnls If mi enterprise Ik Ste
phen Hiil. '. Hi w.i' iiUbMi'iil n( lliu
Uinik nf .M.uili.ifim, wasn't ho1.'"
i"Ves," fnhl Mr. Davison.
!. lit was imt it in) innm mini, was
h" lln.v nl.l w iiiM miii my he was ten
4ur iitfu ' ,.iu,t In,. i initt.v ontig
liCm
;ii. Tin II, xt ' .,11, m in was S.lltHll'l
tt'iM.i'. i", -,ii i.f tiir Si'.iln nM N.i
t'tmai Utah !l, w.q hm'i in ,
l-vt i ir: i ii,. i it il ml. mi. I iln nut
ki'i I', I- W"l II fv,-.
', V, ii I -i. v I ..n V n
Vint fn 'ii.w In icr uiilr'illilr "
A'. Nil. I I'll , l I., 1 (In ll"l
Jij I i ..,i nf hi r tin, uri'it
liitikf i f iv vi n. iiii t lip" A. Vis.
',( The i" t tcie.: in in n'l thr list was
Kfjuaul t' ('ii,,t'- II - is a In, in wrll
nij In yc.fi. li" not'.' Wrll, I was
sm .'iltiiitf ri'iii,.i iilM'h
5.'. lit- I- .i ni.i'i :n the h"lghboihi'od nf
"4, l.'Ti't in ' VI think tint
Jf Will, to ,1,- pn A. I should say ('1
.nf
!.'. Ami li i rdtiiu rtril with the
l.lhett.v , it, .nil P. mk !n li'i'J" A Vis.
hi was pri 'it
1'inieciles V r. It:ilsini Is Vnnni;.
'Pic i t i- f. lift i. Mr
tltn ' V i 'I W l'l In 't lM'lttllO
about ia .mi" i ,iin i ii ut
J'We v ,11 i , i
.iitlllK in in a'l.i n 1
tii tnvi i' r ', . I'' t
thit i.i wete a j
in." was Mr. I n-
li' rein. irked that
Mr lUvi.'u: .H tin 1'ini'vva" vti c-pri s
liltiil i'f I" I " .i""ti.il li.inl:.
?,lf I'nti rt'i;. i (" it't'il out tli.'it the
tiit tiinii' I.itui! II Iv Ki'I'i. pre.
1(1(111 nf tlir i ' miii' t'i'iiil N";it .niiiil Hank
nf i 'hii'iiu". ' ' ! i'l l'i n I'l'inplroller
ofithe t'tirivnrv. Mr li,ivi,in tlivimlu
tttiit (ini.ivi't" A li.irth vva. nl'niit ;ir.
.vtirs nlil I. ! in 'in:!.
."The nrv t man mi the lln," salil Mr.
I'ntermv, r. I v I'.utnti Mepinirn.
Ily vva pii-iil, ni nf the t'liiiM" Natiniial
Haul!, wasn't he',1"
!' can see now" m!;1 the wltneis.
1 t3.:it He w.re tir-lt.l.v tmnet ; we
tlwiiiRlit vm- vv.ri' .vniinu- tnen I'llt it
tlijit w iv I will qii ihfv my former
Mfiteiii' tr "
f'Voa tl ,, rill " mlil.'il Mr. rnter
ni,er. "lii i . im.' all .vutinv ttn'ii
wfco ii ,. tn t p'.,t, . te,t fn,:n
Iiv Wall Stin t.
promoters
J The ,, i, ' 'Mi of ,ii-e r.id not harm
U1 In that tvy 'iil." n.ihI th" vvltneii.
; Wi II. we will li tii 1 nut how much
pijiti i tn'ti miii iii'i (, u " .! hi the eoiin-
?i3 Ini- tin C'liiiiiult.'i' a Ii uitimieil
ti? ni'iuiii al '.t fi- aui-x of Uie or-kIiiUiii.-i
"f t'" HaiiM-rs Tni"t 'oin
p.tiiV. Ml. I ..vi-i.!'. lliiri'l that Mr.
ifrpliinu ,ii tii: ti.-ii,' va 'ilM.'it -tM
i'pir.1 "M ! ii .i in m of wide eper,env
115 I'.inkiin: , ft nt Mr. li.iv!.nn ac-Kgowli-ilKi'il
that William I.nraii, who
vnIs oih nf thi orKiimi'.i'tH, vvhh In tho
llbmivcr .Nitmnil li.inU inul that Mr.
.vC'i larr 1I1. fn "nil nt ef the Leather
Mtin'if.ii ti.n i N.itmmil Hank, vvfts an-
Oslli'l'.
Mr. fell, In Neil on l.lm,
T1', I., t niiu 111. m 011 the list was
(l",(.-, V. 1 ,. ii- II, m.i ,1 partner uf
.1 M1 ,l ri: i'i A Y' s
iV He w.o 1". msr nn who neided
protect f: tn ',1,1:: . - In the Street?
A. V" ..It s '
") A
IIL'lll
faitk '
1.' T
10 id.
v'nn 1
ri si
,1 VV',',,'ii II Porter i' the next
wi p'isiil, nt ni the ( hi'ink-al
v. v.
'., IM t
11 .
. !' I 1.
t. 1 - ,
'Uiii: man
Daniel O
vi 1" nri-u f, ntleman
1 fi.'ii M.i:mit.'i .11 1
A. You are arulii
flu f.e t, I I II l il'.il-' IIMSHTIH
'' II,- w i . -pi' .. . t.t nf the I.ib-rty
y,mk it tin 11 n ' V Yi .1
"ij Mi W.uj.'i w.u. another of thfse
ecu th in ii. w.i-nt h.' A. Yfs.
1 i.i l n i, ' -pri !dent of th I'ark
Html; .it th 11 t'lie " A Ye.
" ifci And i-' 1 1 V m -', he wa not a verv
yomiK 111 i'i.' A I t'lt.'ik he was over i"
iff the tfi
,,I4. illl I Ili.V I "Ulil'M'tl 11(1 III" I
Sr. Wi.lvertnn, presidin: of the rialla-
Ui. Nafomil Hank, and Kolert Wind-
sir of Kldib'. IVa'Hiily Ar i'o.
' Th" l ist of thise young men.' said
Mr. I'n'i rniM r. "vva senior partner
nf Kidder I ..dv
i'o , was he not?"
"I iinild ll"l .-ay. h
taut p:u tner." was .V
ply.
was an Impnr
1 i.ivison'd re-
Aft' 1 going thf,
!.'!!' 1 1'U'V r v ,"iti d
i::!i this lit Mr. I
in know w ho the '
.Miu.lg men wete trying to protect
tlll'IHM .VI " I
I'pn oii Hunk th.it Is a fair .-ues-
tii til ?" aski d the vvitinss. Then he
lidded. "I think it would be unfortu
nate lo nanii the individuals, here, be
itatise then names have already be
come vei.v notorious "
'. otliiu I'ensl Hnileil I'enr.
Mr. I'nti tiiiM.1' wanted to know when
the fear of 'iliise young men" as re
gards the promoters disappeared, and
Mr. Davison replied:
"Just as hoirn as the voting trust
was created."
. And win 11 the trust eipliid five
years l.f.ir .i' l the f(,n' rivlve? A. It did
not.
Mr. D.ivlsnn eNplalneil that the
voting nusi had not been cancelled, be
I'tniMi it apparently had bfen jropular
and no iU'i."ti wt hud been raised
until1 now ju legird to it.
"So far 11s 1 am 1 mil erned," said he,
"I would be p'li'cctly wiuim; to dlssolvo
II.'1
Mr. Davison eprrsscd the opinion
that In the li,. i,r ihe (iuaranty v well
n.s the linnlo r Trust Company tho
voting tliisiei hlp.s had set veil their
purpiiM'. II' I'liitiiidi .1 that through
out th" r .'M-leiice they Innl exercised
tin lull'! fen ii' e with i he at tual manage
mem of, eitlii r cninpanv.
,"l ,ce no leasiin," said he, "why they
should not be dissolved, but I do see
that in view of the pn.-llil new legls
latlon their desirability might gather 11
pew prominence,"
"The voting trusteeslilpi nf tho two
companies," said Ihe witness, "havu
novel had any more to do with fm in
tern.il wot klngi of the Institutions than
hH tlie Pujo citillilittee."
"Hut we think tho committee has hrn'
ens!, 11 ruble to do with that lately," Haiti
Mr I 'n'ermyer,
"Si 1 tnln.'ly," replied Mr. Davison.
VI ay Mnkp llreiiilililelldalloii,
1 iiiiuly, Mi. 'niomyor asked Ihe
wlliifSH Math if he Would make Hie
ucommeii'l in ui Hint the voting trust of
tho Uanki rs Trusi Company he db
nilved. lit. declined to glvo this flat
prpmlse,
"Mow vou havA lie.iijf,,.'1 jjri
i'ntermyer.
"I don't my I will mako the recom
tnt'iiil.itlnn," replied thn witness, "t fay
1 tuny make such h recommendation."
Tho iiitiimltli'n's counsel took up with
Mr. I),tvlnn tin- question of the pro
priety of ,1. t. Morgan Co. serving
im Mm'mI agents fur compel Ing railroads,
I'le Itihitlon In tile Smith vvifi the "tie
I in which Mr I'ntftityi'r addressed him'
. xi'lf put Hi ulnrly. Mr Davison ncktiowi-
' i..li'ril llml III,. S'nllllioril ltilllu'ill' Ittlil
' III, Allniilie I'.tnut I. In., urn ei.tni 1 1
innl Hint tin' Louisville anil Nashville
competed with tlir Southern at certain
points
I'd nit think It was proper unit le
glltniiitc, In vli'W i1f tin' tcliitlniis of .1 I'
Vltllgall I'll, to till' Southern ItilllttllV
an, I In view nf Mr .Moiguh being ntii' of
Hie V'ltmi; tniHti'iK, that that tlrtu hIhuiIiI
Iiu a 1 oint'i'tltiK line an, I tilth It over to
.1 cmiii'i tltor'.' A. I Mn no Impropriety
In it.
The committee1 counsel vviift refer
ring to the relation exIstlnK hetweetl
the Atlantic Coast Une and the Louis
ville ami Nnshvlllo with reference! to
the Southern.
; Siii'i'e nii witc a trticti'i' of one
roail. iln .von think It would he nopir to
he Mipportini; ami win nittlu 11I111; one of
t I'limi'itltiit'" A Vi. I th'iili It would
lii' 11 VV'.S" tlllllK In 'In
i l Unit the principle iit'ini whleli
5 our til 111 worlts? A V e? nlteii
i.i lint 1I01 n't that u 1111, 1 11 tin, in
lllli H"l Von are slllipn! il to prnii-et ' A
No, I IhlllU 11 would Mr.-llKtliell It
'J So nii would 11 until II 111 proper fur
.1. I' Mom'. 111 X Co to attempt to rrpr"
, nl all the ItilltoaiN In the S.iulll" A t
would
.' Vtld oi think thev would do Jnntlee
to nil 1 A 1 do.
l You think it would he ptoper for
them to say when one mail slinul I epand
and another not? A. I don't think It is
pioper for iihlioi1y to do that.
Different In liiiltmlrlttl.
( Appl.VillC tile Millie prltieiple lo lll-
iliHtiiiili. it 1h Mini opinion that It wiitiln
Ii,. ennlsti nt foi .1 I' Mini;, 111 ,'. I'o to
dlrfi" the piille. an I ,e t a" liaiKets for
tun or inure eiiuit'i'titni ' A I ttitnk itial
1m .Piferent. hut I can ciitn'ri of cotult-
t!,, lis iin.l, r w 111, li It would In wie
yr rntermver started to U(Mloti
ir. li.ivlMin In teuard to the linini: on I
the Stoi k i:chatl!-e "f the IleW st- I
iMirity of the Southern Katiwuy after
the votlni; trut had heen ctia'eil Mr.
Davison replied that he was lint la
miliar with the detalN ot the Stock Kx.
chiiime
"We do not seem to he utile to find
any hanker In New York who knows
.inythltiK nhout the StoeK 2chani;i',"
coinmenti'd Mr. I'ntetm.ver.
The point that Mr. I'ntermv cr
wnnted elucidated vvns what effect the
striking of tl.o old Southern shares
from the exelianiie's lint had hail upon
the lmldlims of minority stockholder!
who had refused to assent to the vot
lni; trtit plan. Mr. Davison could
not answer this.
"Hut don't you realize " asked Mr,
1'nteimyer, "that when J. 1. Morgan
. c applied to the Stock F.M'huny.;
to ll"t the new extended voting trust
eel tlilcutes nilil 174.C0U shares of the
old Mock were stricken from the list
it affected the marketability and loan
ability of the old stock1."1
"1 know the minority holders were
paid if .1. 1. Morgan .V; Co. could pro
tect them, heenuse that Is the policy
uf the house," said Mr. Davison.
KnotTM It Unci nr. Yenr.
Q. You know that was the cne luck
In l'.'iiH, althnuKh )vu did not come Into
association with -Moruan A; Co until 1 9 0 ! 7
A. "Yes. I know that back for fifty-five
yeais, which 1 ten years older than I
am.
(J. You knew that hack ten year be.
fore ou were bom? A 1 do
Q. 1 see, why not ru a little further?
A. Well, that wa the beglnnlnc of the
house.
ij. In other words, you know that .1. P.
Moruiin & Co. could do no wronK" A. t
know that J. I1. Morgan & Co. could do
no wrnnK if their endeavors and the eir
iiimMiincet permitted them to do 11s they
w anted In do.
"Can you conceive." asked Mr. I'nter
myer nKuln. "of any situation or clr-
cumstance vvnich it would be proper or
iiermlssible to strike off the llt of
shares 174,000 because they had not
consenieu 10 reip;n tneir rights as
stockholders to the votlni; trustees on
an extension of the votltiK trust?"
Mr. Davison did not answer this ques
tion direct
Mr. 1'ntermver contended that the
I people who had bought thes shares i
did so partly because of faith In the
fact that they were listed and were
mnrlmloi In ,Jj . .. ,
' " , ' l ei, , . V u ' - lr
".',o uTH X, "l" th pTec.t
..t.i, vi,,- ihi.'ii in mi- iuiri mai u siock
is listed.
Mr a 11 a Ileller Klerp.
"There aie a great many people." he
said, "who sleep a good deal better
when they own securities that are not
listed."
Q Then why tin you list them? To
.!,..., I. . ... .I...I- ..I . ....
V. Hut why do people sleep better when
the aie not listed? A. Heeause then
piophi do not seii their stocks go down
over night.
Q. They never see them go up? A.
They neier iste whether thev go up or
down if they get their dividends.
J. So the people who buy stocks do nut
care whether they rlin In value or not?
Is that your Idea? A. I did not say that.
1 sum iney rest netter.
Mr Davison declared that ho re
garded the striking of these shares from
tho list as "most defensible."
I do not know why the house did It."
said he, "but If the house did It It !s
most defensible."
Sl(ehe to Metropolitan t'lnli.
It was rit this point that Mr. I'nter-
mjer sprang a surprise by suddenlv
asking Mr. Davison If he was a mem-
her of the Metropolitan Club of New
ork. .Mr, Davison looked somewhat
startled at this sudden Jump from Wnll
street to upper Fifth avenue.l but re
plied that he was,
"Is Mr. Mine a member of that club?"
"Wo do not control that too. do we?"
asked thu witness with a look of sur
prise. 'I hen he added: "Yes, I think
Mr. Illne Is a member."
"I would not be surprised if yml
dlil control It," was Mr. t'ntermy'er's
reply to Mr. Davison'ii expression of
Htirprlse.
"1 would not bo cither If two of us
belonged to It," added tho witness.
Q. W't re .ion in th,. habit of having
meltings at 1 o'clock on Thnisday after
llniill at the .Vli'tinpolltun Club witli J,
I line of thn FliHt National Hank, Mr.
Sluing of the llHiikma Tiust Coinpiui
and Mi. h'alilu of the (iuaianty Tiust
Company? A. .Supposing that wein true.
now would that bear mi this Inquiry?
ii Will oii not ant.wir my question"
A. Will, I never attended any such inert
ing. 1.. Is It not a fact that on Thursday
aft union at I o'clock thero meet at the
Ii'tioii,ltan Club weekly for some time
Hi" lepie.sentatlves of a half dozen 01
tinne backs In Now Ymk and there iIIh.
ciish iii.itteis nf business. A Theie never
have In 1 u Mich meetings In the world
,,,, 1 mum- I nnwr IIUI'IIUCU one
and tlii io Is no foundation for the ques
tion, Mr. I'ntermyer replied that tho com
mlttvi; 1i.ib iciehed infnrmutlon to the
effect that such meetings had been held.
Mr. Untcrmycr then asked the wltncai
Henry P.
If the firm of .1 P Morgan & Co. kept a I
Hit of Individuals, partnerships or cor-
poratlor.s from which thev made selec-
ions to offer participations In heir
... n ' pariicipauons in tiuir
syndicates.
, , , ... ... .any mom y behind thus, bonds. You
I would like to get that lr..,mol ,,1.,. ., ., ,lf ,, ,.,,.
"We do not
on the record," said Mr. Davison
Asks AI11111I uliiiny llonils.
It was at this point that Mr. l.'nter
myer took up the transaction In regard
to the proposed bond Issue of $170,000,-
000 for the construction of subways lnl!'lr' llK'H' Is no Kuaiaiuc-.
Ni'iv York.
J Have there been allotments already
made? A. Yes
li. How many allotments have been
mud"? A. It Is a pure gues. but I would
say perhaps 100 or 12."
Q Have you partners In the enterprise?
A Yes the First National Hank and the
National City Itank.
.Vnmea Other Pnrtlelnnnla.
Are trust companies and other banks
Astor.
'U And the Hank of (Mmtne.ees A. '
rr, IIIPI 'rilil! 1 "III
mit say the Central Trust. 1 will with
draw 1 tint because I do not know
y. You thought you would say It tie.
cause it Is nut In your circular A. You
un cn lilting me with a good Idea.
Q. Hut you take It back? A. I take It
back because 1 do not know.
Q. 1 wanted the bunks and trust com
panics In your circle. A. 1 wondered if It
would not be fair to nk about some thut
are not In the circle, as you term It.
() Tnk the list of the banks with
which you deposit money. I have the list
here. You have most of them III that al
ready The Americun Kxchtipge Hank.
Mr Clark's hank. Is a participant, is it
not' A. I will not guess on these hecause
1 do nut know 1 do not recall Cndouht
edly they are I hope so
t,' Can ou give us any idea of the
numlier of hanks and trust companies
that are participants In that syndicate?
I am ulng that as an illustrative ease,
although 1 understand it Is a larKe Issue
and there are more participants. A Thut
sjndlcate cnveis a very broad territory.
I. Does It take in Huston? A. Yes.
(j. Does It take In Ie, Hlgglnson?
A. Yes.
Q. And Kidder, Peabody? A I am not
sure.
li. It lakes in the Illinois Trust and
Savings Hank of Illinois? A. 1 am nut
sure.
C'iimts n Wide Territory,
Q. And the First National Hank?
A. I
must decline to guess ti these because 1
do not itcall, but I will say that It coiits
a wide ttriltor. Wo have gium West, I
think, In that and South, but there is a
very large Interest In that In Europe.
li. Hut you do not know whether the
entire $1 "u.uOO.OOO of bonds were under
written by those three concerns your
sclvts, the Flint National and the Na
tional City under one underwriting, or
whether each one took Its own under
writing? A. Probably under one under
writing, by consulting; they probably sat
around a table and .
li. Can you tell how many banks and
trust companies are participants in that
deal, approximately" A. I am sorry I
am not familiar enough with the list to
know liecuiise, as I said, I was In Kumpe
whin that "was done, and I do not know.
Q. Kulin, Ixn h & Co. are underwriting
thu Hrooklyn Itapld Transit end of that
deal, ure they not? A. It Is an entirely
separate transaction.
o. Hut that Is tho Hrooklyn end of It
and this Is the New York end? A. No,
it Is tho Hrooklyn Itapld Transit, but it
Is In New York as well as In Hrooklyn.
Q. There ate two systems ; two proposed
routes of subwnys? A. Yes,
U. They have one and you have the
other? A. Well, I do not know that thy
have one and I do not know that we have
the other Wo have tho flnanclng of this
transaction.
14. And they have the financing nf the
other transaction? A, Yen, they and their
associates, 1 understand,
ij. Their transaction Involves raising
about $40,0110,000, does It not? A. That Is
my recollection.
IJ. And yours $170,000,000? A. That is
my recollection.
y. Am 1 right In making the statement,
Mr. Davison, thut the Stato puts In
$70,000,000 bonds behind this $170,000,-
11OO? A. No, you aro not right In that
statement,
Q. Does It not ngrc to do so If
necessary" A. No,
IJ. How much does It agree to put In?
A. Am you nsklng mo for thn character
of the contract between tho city utid
the lnterborough?
I'll ii il of City and Coiopnn)'.
u. I do not want to go Into the details
of that roiupllciiteil transaction. I only
want to know the single met as to how
much tlie city of New York puts back of
jotir $1711.000,(100 of bonds? a. Tho ctm
tract piovitles as 1 recall It that the city
and the fnmpa.iy shall put In l.'iS.ono.noo
nidi pirl pahhu for the construction of thu
suhwav
ij llehlnd our bonds? A. Whut do you
mean by 'behind tho bonds'?
li I mean as a subsequent lien only
and Ihe Intetest lo be paid only after the
Interest and sinking fund aie paid on thn
bin, lis that our 111 111 are to buy, A, To
answer that question I would have to take
up the broad mihjeet because nit answer
to thut question alone would give a false
liiiprcrsloii.
Q. I think that without taking up that
Davison.
"ns transaction, a complicated one, It ought
"' '"H ''or sou to tell 111 how much
io'j me my ot now oik undertakes
"m 1" lm"1 """'' "''" " ""bsequent .
, I answer that the) did not put
1 tl.ii. ultv.,.,,1 LI.. !,.. ..il...-
.No (iiinrantre. He .
Q. I understand that there Is an nr-
ratiKement Kuaranti-eing the present earn-
,lng on the old Inteilioniugh'.'
. No.
l. I mean, piovlded the enrnlmis aie
sutlicli'nt for that purpose. It provides a
pr ferince" A. It Is a preference pin.
vlded the earnings on the new system are
sulllelent.
li Providing the earnings 011 the new
rystem ure found sufficient they are to be
paid tlrst'.' A. Yes,
(J Net the Inter st on your bonds that
you are to take Is to be paid and the
Islnklng fund out of tl arnhms" A. No,
.XZl Tvl
r, ' ," " . .. , i""'"-'"
!! ,.1!!. Vla.!'' 'i'i ,''' lU'''
f tUttl Ui III s-UIl-
prup'v.l oontrnct
,M . , ... ... .-r.fAA.V
ill vii 1. n 1 'in f 1 t .1.- llhllllH IU 4V,OdU,tiui',
and It was provided that out of the earn
ings the Iiiteibuiough company should get
on the old and the new stock an amount
.v, ,,,- '-uiiinm-i iii.ti
they wete '
making on their own private proper! .
tu-duy. That Is the prifeience, and that
Is the only preference, out of that they
pa? the interest on all of their llnanclng
and the clt In giving them the preference
cn'y gives them what they have to-day.
y Yes That is not the point A It Is
a very Important point
(J. After that preference has heen paid
tre next earnings gn to paying the inter
est und sinking fund on the bonds that
ou are to take'.' A. Not at nil.
When Ihe City liels llrlnrn.
Q Does the city get any returns on Its
money that It puts in by way of Inteiesi
and otherwise until after sufficient has
been set aside to pay the full Interes' oil
your bonds" A. The city nets no return
on Its money until the lnterborough n--
celves the interest and sinking fur.d.
Q. Amounting to
per cent, and 1 pir
cent on Its bonds?
A That Is a correct
statement.
CJ. That Includes the bonds 1011 are tak
ing.1 A That Includes the bonds that rue
Issued to build this new work, whapsiit
the amount may be. f
y. That Includes the bonis .vou are Pik
ing? A. Thut Is correct.
y. Is theie any other banking house In
tlm 1'nlted States that would have the
facilities to take that Issue of bonds that
ou are tiiklnn" A. Do you not think it
would be a little presuming In me to say
no.
U We want the facts, Mr. Davison,
even If your sense of inn, Icily Is outraged.
A. That is a matter of opinion
Q. What is our opinion? A. I think It
Is fair to express the opinion. No, 1 am
not sure that there Is no other house In the
country that can do that
Q. Y'ou cannot say so? A. No.
Q. Kulin, Uoob & Co. are financing the
other venture Now, leaving them out, Is
thcru any other house in the country that
could finance those bonds? A. Can 1 not
answer that question by Kaylng that we
are a very large house?
Q. I think you might answer. A. I do
not want to sit here and s.iy thero are no
other banking houses.
CJ. You know that is so, do you not"
A. No, I do not know that Is so by any
manner of mciuis.
O Is not your ability tn finance a
project of that kind due tn some mensure
to your being able tn place these bonds
with banks and financial Institutions?
A. it Is tlue largely to our ability.
(Hit Issues Were siunller.
Mr. Davison acknowledged that J. P.
Morgun & Co. up to live yenrs ago hud
made more issues of securities alone
than now. but they were smaller In
character. Mr. ITulermyer handed Mr,
Davison a list of assets amounting to
$10,900,000 held by tho Hank of Com
merce, und asked him to check off any
securities on tho list which were not
either part of un Issue mado by .1. P,
Morgan & Co. or In which tho First
National Dank or the National City
Hank had participated. Mr, Davison
said that ho was tillable to do this.
Q. Y'ou recognize, do ou not, that thero
is a irreat advantage In having an entree
and an Inteiest In one of those banks
and a icpreseutatlon on the poartiv A.
Theie Is absolutely no auvaningn ai an.
ij Do you think It n disadvantage? A.
At times ; not always.
Mr. Davison to-tlllcd that J. P. Mor-
Cl.sllK'S rKI'ISK F Till; "UtONU"
lh.IOO Tons, one nf the S'eHist, l.nmrst and
Nleinllrsi fiteamt rs la the worm,
'in inn
MEDITERRANEAN
AMI 1 111;
ORIENT
February IS tn April U7 7 1 ly, rnMIng
cnli 1100 und up,
rlt-Kt rliiss. Ini'liiillinr .'ilioie Cieiirslons. fiiildrs.
!!, Iliitii. Drbes, i'le, Ihe tii'inl attractive
Irlp Iru i In I be I', S. this winter.
SI'IXI VI. I T.A I litl'.S Madeira, I'ftitlr, Se.
villi', AIkIitk, Mnltn, III dajs In Kgjpt Mid
the llol.r l-undl Cooituntlnuiile, Athena,
IMinir. Illvlerii, nr.
Tickets irnod to Mop over In Ruropa, return.
Ulff D)' AlBUrClftOM, OIU, 1
rraak U ClMk..Tlmts Uallaia Ntw Yru
nan situe November 1, 1012, harl lssue.d
about $V,,(iii(i,ot) nf bonds and other se
curities, Mr. I'ntcrinyer referred tn a recent
Issue of $67,010,000 by the American
Telephone and TcleRrnph Company, lie
wanted In know what there vvns left for
that company to do except to irlvy the
Issue to .1. I'. Morgan .vi Co and bankers
with whom they are n.snclated under
the ptesent rule of hanking ethics.
J'olllil (ill I. I m'H tiere,
CJ What else was theie left for them
to do? A. They could go to tnah other
houses.
IJ. To whom? A lliown Hios. There
are ten houses In New Yotk city that
could ,;et up 11 Biidlcate In twenty-four
hours. Itieieetlie of ,1. P MorKiili A: I'o.
Kulin. Lin b A. Cn, J. K, Momali A I'o. of
liiidon. Kidder. Peabody & Co. and others
that you hav e nietitloni'il.
.Mr. I'nteim.vei' called upon the wlt
nrs to name one Issue of that magni
tude thut had I eon Moated without re
sort In -licse: blir banking houses or
without their I'oopenillon, Mr. Davison
meiillotted a tS.VOOO.OOII IfSlie of I'talt
Security Corporation notei In 1912
whk h were brought out by the K I co
llie Hiind and Share Company ntnl llay
den, .Stone .V- ('o
Mr Davl-on pre.ented a list which
had been prepared for him, which
showed that In the last live years there
had been security Issues of more than
f in.tKiO.IMIO each, aggregating nil told
1 t a.ts.fmo nun, which had been brought
I mil without the active participation of
.1 l'. Morgan & Co. and the so-called
banking houses that are supposed to
cooperate with them. This list was In
reply ti, Mr. I'ntermyer's contention
that no Issue of securities over 110.-
I 000.000 had be.i floated In recent yearn
j without the aid of .1. P. Morgan & Co.
and the big banking houses that ac
cording to the Pu.lo committee have a
I control of credit. Mr. I'ntermyer riues
' tinned the accuracy of this list, and In-
'amiuh a Mr. Davison could not vouch 1
for !t I, was w.thdrawn at hl request i
from the record
Wllllim 10 l'nlill,.li irH.
.Mr Davison saw no objection to com
I pelllng hanks by law to make their 111-
sets public, but he did not favor tho
compulsory publicity of the record of
stockholders.
U Aie .miii a devotee nf the nrlntlrle
thai character Is the thing that governs?
A. 1 am.
, . Jlr' "n n natmn the
'('f';l ' n holding company, and he could
not see how a monopoly could be pre
vented on the part of three or four or
half a dozen Individuals If they ac
complish It through their own ability
and not through a holding company.
i As an economic question you do not
pcii-M, that ouirht to he pel mltted'' A. 1 1
nuie iii'ut uiuiwii m any case 01 ui.ii
kind that would not correct Itself If In
practice it were wrong. It could not live.
Mr. Davison saw no neceslty for a
law to prevent this situation. He con
i..'..i thn. n e,i, mnnnnt.. ,.,i.i
tw...i,. ...... u .,....,,.v.
break In the making, When questioned ,
In regard to "trusts" Mr. Davison said:
"I think they ore great blessings to the
country."
Q You think they still are a great
blessing? A. Not as great as they were
before they were disturbed
n Tv-. ...... .it ,u. .11 k...i..Dt..un
. . "j ,,uu ill ill i 1 lie 11 in. 11) uainr ntw uvtn .
unwarranted and that it should lie j
stopped" A I do not say unwarranted
I think It Is unfortunate for the people of
the entire world. I do not believe in mo-1
riopoly. I do not nelleve in oppression,
but It Is not all clear, that you can say
arbitrarily : "This Is wrong and that Is
rlKht . fh.H is a matter thnt requires!
, ,.rv i.mi'., ,hH nrf,ii ,..i,i..i
,'. ,.....n.. " , ,j ,
Ihat it was npt wrong in his opinion
for the courts to have interfered with
the trusts if they wore illegal and were
violating the law.
"I lhlnk.1 he added, "It would hav
I been heller lo have approached It the
other way and to have corrected the
law and to navp established a super
vision and control over them. You can
not any more disintegrate those trusts
in effect and fact than you can put
this continent over the other side of
the Pacific Ocean."
Q. Do you think they can ever be dis
solved" A. 1 do not think they can.
moiiorioly
jn(. j ,,( ,
W. urn Ul'licil', nirii. .11 o .'u
,? A. 1 do, but generally speak -
not believe in monopoly. I think
there is a line
Q Who will determln" It? A. The pub
lic. They will Intimate to him.
lle Prefers lletjnlnllon.
The witness acknowledged thnt he
would rather have regulation and con
trol thnn competition.
Mr. Davison testified that J. P. Mor
gan & Co.'s stock Interest of $16,000,
000 In the National City Bank ban been
held only a few years. Mr. Davison
testified that If Congress should pass a
law prohibiting the banking Institu
tions In New York nnd the four prent
reserve cities from Interrelations with
other Institutions that are likely to re
sult in a community of Interest It would
set tho Institutions hack twenty-five
years.
When nsked whether or not he was
Life Depends Upon
Twelve Mineral Compounds
They are so important to the body that if deprived of them we
suffer disease or death. They are contained in the right kind of
food.
Read what they are, and how modern methods
of unscrupulous food manufacture extract them
from the foods we eat. It's all told in
STARVING AMERICA
By ALFRED W. McCANN
Who with Dr. Wiley has been conducting a long and relentless
Pure Food Fight against the assaults of unscrupulous food manu
facturers on an unsuspecting and indifferent public.
Published Daily in Serial Form in
In favor of further concentration ot
banking resources In thli country, Mr.
Davison replied that depended entirely
upon I ho development of commerce and
Industry.
"I should say the Kink facilities In
New Vork are quite competent to tnkn
cate of nil business that comes to New
York, 11 he said,
i.i, Would these resources give greater
power In the hands of one man than If
thev were scattered'.' A I think It Is an
uudenl'ible fact that the more the re
Miuiii'B of an Individual Increase the
gt eater his power.
The I'jimlttee did not finish with Mr.
Davison and will examine him further
to-morrow.
VM. ROCKEFELLER SAILS.
I, raves I'nllil llcHCh nml fines III
,le!.l Islflllil.
IlnttN-swicK, tin., Jan. 23. Wlillum
Itockefeller teturned this afternoon to
Jekyl' Island on C. K. (I. Hillings') yacht.
He vs accompanied by bin wife an.l mm,
William tl. Itockefeller, The Itockefellers
lift Palm lleach last night In a special
car
Th"!)' special car leachril I'eriianillnii.
I.i . this morning. The Hillings 111 lit
wan In poll The ItockefellerH at once
hoarded the yacht and It steamed nwav
tor .lek.il Island, when- Mr. Itockefeller
has a winter luune.
There Is no wile service to .lekyl the
only communication being by boat, and It
Is Impossible to get Into c omtnunlcatlon
I with the Island to-night. It Is possible
tint the Itockefellers did not proceed at
once to .Inkyl, but stopped on Cumberland
Island and ure guests at Dungeness, the
winter home of Mrs. Carnegie.
Persons who saw Itockefeller nt Ker
liiindlna this morning as he boatded the
Hillings yacht say that he did not appear
to be 111. II" boarded the yacht without
assistance and seemed to bo In good
spirits.
J. P. MORGAN DEPOSITS.
,r
llavlsoli Jilvm Committer 1, 1st
j of flank.
I W.vstiiMtTO, .Inn. 'J3. A statement
was Introduced by II. P. Davison In
I the course of the Pujo committee hear
, Ing to-day showing the depositories of
.1. P. Morgan & Co. The statement
showed the following lnilances carried
'by Morgan & Co. In the banks named
I November 1. U1S: American Kxchange
National Hank, $.,110,000: Chemical
National Hank, ll,383,U0O: Chase. Na
tional Itank. ,1,290,000; National Hank
of Commerce. $3.'0.000: l'Tr.st National
Hank. $02L,,000; Natlonnl City Hank,
$794,000: National Park Bank, $1,100,
000. Guaranty Trust Company, $1,000,
000; Hankers Trust Company, 51,000,
000; Mechanics and Metals Na
tional Hank. J.r.,000; Liberty .N'a-
tlonal Hank, $B47,"00
Standard Trust
Company, $100,000; Central Trust Com
pany, $100,000; New York Trust Com
pany, $100,000.
The following deposits were shown
In Hoston Imnks: First National. $190,
, A c......l ,ti .1 innnn. Ql,nn..
UUll. -I'llllll. tHllKHIill, f -t,i(uv, n, ,,!-
mut Notional, $247,000, and the
Colony Trust Company, $84,000.
Old
TWELVE FIREBUGS FLEE CITY.
Mm More r.on Inrtlelmenl. Handed
I'P ' firund Jnr.v.
The regular Grand Jury found six
'
more indictments yesterday in arson
casea and the indictments were handed
up to Judge Hosalsky In tho Court of
General Sessions. Two of the Indict-
ments were aililltlonal minings against
Henry C Freeman and George Gruti.
brokers and adjusters, now In the
Tombs In default of heavy ball. Four
were against persons who have not
been arrested.
There ure now sixteen men under
Indictment as a result of the confes
sions of Isltlor Ktelnkreutzer, Izzy the
Painter, and others, who have told As
slstant District Attorney Weller about
the conspiracy to tlefraud the fire In
surance companies. At least twelve
wanted by the District Attorney have
fled from the city. One of thesi Is
a broker and adjuster, aitanlst whom
there are charges similar to the ones on
1 which Freeman was Indicted.
Free-
man's nlnn will h.. mH n.rt Mnna.v
id
1 h f ',. ., . '-'
' hefore Judge Hosalsky.
THREE INDICTED IN CHICAGO.
Adjostrrs Alleged to Br Firebug
In Arson Inquiry.
Chicago, Jan. 23. It was reported to
day that five indictments against three
public fire insurance adjusters had been
voted by the Grand Jury In the arson In
quiry In the Criminal Court Hulldlng. It
Is expected that tho Indictments will bo
returned to-morrow before Judge Hlchard
E. Uurke.
Three Indictments were voted against
one adjuster, according to the report. The
two other men were Indicted on separate
charges of being responsible for Incendiary
fires. The Identity of the men Indicted
was not learned.
These Indictments aro the firat result
ing from a two weeks Inquiry conducted
by State Attorney Johnson.
(Slob?
GRAND JURY TO TAKE
DORIAN CASE TO-DAY
Will Also .Miike HcmH on
Polieeiiiiin's Clmrire'
Affiiiiisf, CiitTiin.
roVK HACK, PACKS Tli!,
Newell, (lie Intliclcil l.iiwvep in
Sipp Case, Whs Cen
Miivil in 10(12.
The Kxlr.'iordlnary (Irani! Jury vv
Is looking Into matters coniuctnl w
the Police Department, will tl
to-d.iy '.he disappearance of Tie n 1
Dorian, maniigtr of the Ainiii 11 ,
lit ll'lth street and l.cxUig'nti n n
This hotel was the Hililc win 11 ,.
A. rilpp owned II. Hefori. 10,11 u
the Uouleviitd.
Dorian lestllled I" fere fir I'u n
Aldermatiio coniinlttce un the ,attn
un which Slpp gave his i, sitmo'ii II 1
told of coittlntU'd payments, of pr
lion money to Pollcetiian i.ug in a,
taken monthly from the.Avoners m . ,.
ury. Then Dorian left town and 'lei
District Attorney's olllce has Informa
tion that Mr.. Dorian has been r 'iti
Ing her husband's weekly salare of
$27.50 since. Doubt ban been expresf-cd
that the hotel Is footing this hill.
Neither Kdwurd .1. Newell, Slpp's for
mcr lawyer, who was Indicted by i'm
Grand Jury on Wcdne.sda.v fur a in -demeanor,
nor his counsel, W M K m
cott, was at the District Attorn, vs
office yesterday. Mr. Newell's fr'nvl
mlvised him on Wednesday thai In ei
the District Ai orney anihlng he i.id
learned In his professional contuuion
with the case as Slpp's attorney rather
than nlbiw himself to be a sc.ipegoa' In
case there was anything wrong In ihu
matter of keeping Sipp out of town P
was rumored yesterday that Newell ha 1
decided to light the Indictment mid not
give any belli to the District Attorney.
Newell .-icted as attorney for Police
man John !!. Neville and Secured Ne
ville's reinstatement In the dcpartine!
a dozen years ago. lie recovered $4,1 IS
back salary and his fee was to he 7I
per cent, of this. Neville sued him and
an Appellate Division opinion handed
down by Justice Ingrnham In 1902
says:
The attorney paid to the petitioner H.5
and kept the balance The petitioner states
that upon his demand for the balance dun
him the attorney stated that he was un
able to pa at that time and lequesteil
the petitioner to take Ills notes then fur.
amounting In the uggregate to 3!'7, piti
able thiee or four months after dale,
which notes the petitioner accepted and
still retains, that after the matuiltv nf
the notes the petitioner demanded pay
men from his attorney of the amount
theieof, which the attorney neglected ,111 1
refused to pay, wheieupoti the petitioner
Instituted this summary ptni ling t"
. compel the attorney to repa him tte
1 amouni tu un note.
There would seem tn be no quest .i,
' 'Ul that there is here disclosed a gn
violation of duty by the attorney In up-
I ,,ropMMlnB llortk,M l)f ,1,,. money th.-t
I he hail collected for his client and which.
1 even under his 75 per tent cntittact, he
1 wn bound tn pay
Much a ree was, in say tne leasi an e
tremely liberal compeiisatlnn fur the ser
vices rendeied. and the fact that the at
torney used the balance, of the money
after he hud received it for his own pur
poses, so that It was "not convenient" for
him to repay It to his client upon demand,
would indicate that the attorney was
guilty of unprofessional conduct, whloli
deserves seveie condemnation.
Policeman Charles K. Koyo reported
at Police Headquarters yesterday morn-
i lnK' ,Ie anl'' 1P 1,a'1 ri'a(l on Wednes
day tnat he nau neen inuicteii nnu nan
been looking around for a bondsman,
Ho was ordered to report to Deputy
Commissioner Dillon for n police trial on
chnrgeH. These charges, brought by
1 William J. Ilarrlgan of 344 Knst 125th
street, allege that Koye struck Hurrlgun,
In the faco with his list In a cellar at
343 Kast 124th street early on the morn
ing of May 19, 1912, nnd again similarly
assaulted him nt 124th Htrcet and
Seventh avenue.
Policeman John J. Skelly, who waa
accused by Mrs. Mary Clootie, was trie!
before Deputy Commissioner Dillon yes
terday for falling to report to the Tot
tenville police station from December 21
to December 27. Decision was reserved.
Police Inspector Cornelius, F. Cahalann
was Ihe only witness hefore the Ctirran
committee yesterday and ho will bn
called to complete his testimony this
afternoon. The Inspector said the pres.
enco of ono woman nf questlonahlii
character docs not make a house a ques
tionable resort. He said he wouldn't
carry any house on his suspected list
unless ho knew that tho house as a
whole was questionable.
