VOL. XXI. Eleventh Year SALT LAKE CITY, UTAH, JANUARY 4, 1913 FCents the Copy No. 38 I
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LoROY ARMSTRONG . . Editor
I INFORMATION. OR SENSATION?
THE methods which have been em
ployed and the line of questioning
which has been followed by the
committee investigating the alleged ex
istence of a "money trust" give the
I impression that the purpose is not .0
' much to secure information as to
I create a sensation.
The strongest evidence in support
of this belief is the emphasis which
has been placed upon accumulations
of figures which to the average mind
are incomprehensible and bewildering.
I Charts have been prepared showing
' that certain men affiliated with cer
tain institutions hold directorships in
certain corporations whose aggregate
capitalization amounts to tens of bil
lions of dollars. From these charts it
is intended to convey the idea that a
handful of men actually control this
amount of wealth.
The Boston Commercial says the
' specious character of this argument is
at once apparent when it is noted that
the capitalization of each corporation
is given at par. For instance, the par
! value of the outstanding bonds and
stock of tho International Mercantile
Marine company is about $180,000,000
I but the market value of tho securities
' is less than $70,000,000.
I While this is probably an oxtreme
case, it shows that the Intent is to
pile up big figures rather than actual
facts that tho public mind may be con
vinced of the existence of a centralized
financial power.
I It is introduced in evidence that
180 men connected with 18 different
banks and banking houses as partners
or directors, hold directorships in cor
porations of several kinds. These 180
men art found .to hold 746 director
ships in 134 corporations or an aver,
ago of about one man to each cor
poiation. It is not shown iist what proportion
the members of this group of 180 men
I
bear to the whole number of the board
of directors in each corporation which
they serve. This might not prove to
be strong evidence in support of the
claim which is being built up.
Tho mere fact that one man is a
director in a dozen different corpora
tions proves nothing so far as any
connection between them is concerned.
Theodore N. Vail, president of Ameri
can Telephone, is a director of the
United States Rubber company but no
one claims that there is any connec
tion whatever between the two com
panies. Mr. Vail Is a man of wide business
experience in addition to his connec
tion with the building up of the tele
phone industry from its infancy, and
because of his recognized business
ability he was asked to become a di
rector of the Rubber company in which
he was a large stockholder.
This is a typical case. Men who
have made a notable succesB in busi
ness are often sought as corporation
directors because of the knowledge
and experience which they bring with
them, and not because there is any
financial connection whatever between
the several companies of whose boards
they are members.
In the case now under discussion a
large majority of the 180 men who
have been singled out for the purpose
of proving a concentration of financial
power are men of wealth who have
their Investments divided among many
companies and they are elected to the
boards because of their financial in
terest in the companies.
Who will say that these men are
not better qualified to administer the
affairs of the companies than others
whose Interests are smaller but who
are not also directors in other large
corporations? In general the wider a
man's experience the more valuable
ho is for. advisory purposes.
So far as bank directors are con
cerned, it is a protection to the bank
itself to have members of its own
board on the board, of largo corpora
tions with which the bank is constant
ly having financial relations.
There is no law in this country to
compel a man to invest his money In
any other way than according to the
dictates of his judgment and it is
puerile to claim that because a mau
has chosen to buy 1,000 shares in ten
different corporations and because of
his stock ownership in each is a di
rector, the ten corporations through
him are bound together in a financial
combination.
The fact that there is on deposit
with J. P. Morgan & Co., $81,000,000
belonging to 73 corporations is pointod
out as a very significant thing. Heio
again is sensationalism evident.
This is an a"'"re of only a Httlo
over $1,000,000 r each corporation
and In these days of large corporations
$1,000,000 is a small amount of cash
compared with total cash holdings. It
is good business on the part of cor
porations to deposit their surplus
funds where they will draw a higher
rate of interest than they would in a
national bank or trust company.
It is the practice of corporations to
loan on demand from time to time
their surplus cash at going rates and
this is always done through largo bank
ing houses rather than direct. There
is nothing unusual or significant that
a corporation should have money on
deposit with the house of Morgan.
The committee has brought out lit
tle that it has not been possible for
anyone of an investigative turn of
mind to discover. There are enormous
deposits in the banks of the large
cities of the country. Normally the
banks of New York have in (their
vaults $500,000,000 in cash, one-third
of all the money In the banks of the
country and one-seventh of all the
money in the country.
This sounds interesting to anyone
who reads it for the first time but it
is public information every time tho
comptroller of the currency calls for
the condition of banks. It is not news
and not a new condition.
It must not bo forgotten that the
United States has grown to such an
extent that bond issues of $10,000,000
are an every day occurrence and ot
$100,000,000 not rare. There must be
machinery for handling these issues or
tho development of thr country can
not continue uninterrupted. Tho finan
cing of large enterprise requires large
banks and banking houses.
There is In every large city more or
less of a concentration of banking
power. In Boston there are two or
three groups and In other largo cities
the same. These Interests work In
harmony because uncsor the monetary
system of this country, they are com
pelled tu protect themselves" and the
depositors whom they represent.
In 1907 there was a panic at a time
of general pnce and prospei .y and
the banks were powerless to prevent
it. Since that time there have been
more bank consolidations than before
because the banks have found It neces
sary to stand together to protect them
selves against a recurrence of such
conditions as those from which they
suffered in 1907.
This tendency toward combination
will continue until the congress of the
United States stops playing politics
and gives its unbiased attention to
legislation which will put this country
on a financial basis where it will
cease to be the laughing stock of tho
other large countries of tho world.
The solo question at issue regarding
financial Iconcontration or combina
tion today is whether such as can he
easily proved to exist is used for tho M
welfare or the detriment of the coun- M
try. If it is detrimental, it should bo M
regulated and surrounded with safe- M
guards. If it is necessary for the best H
interests of the country and exists be- M
cause of a lack of governmental action M
on monetary matters, it should be so H
stated that congress may do its duty M
and not leave the protection of the M
public to individual action. H
Tho committee at Washington has H
an opportunity to perform a national M
service, but neither its personnel, the H
utterances of its chairman nor the M
methods of its counsel have up to date M
given any evidence that Its Intention M
is other than to befog the public mind H
and under cover unjustly attempt to H
discredit the financial institutions of M
the country. M
WHEN MARY SHOCKED BOSTON. H
THE morals of the city of Boston M
are looking up. Puritanism has M
taken a fresh hold on the old HH
town. The other night when Mary !
Garden as Floria in the Boston opera M
house was seized by Scarpia in an M
amorous frenzy and thrown upon a M
couch for no chaste purpose, cultured, M
pious Boston was thrilled to the mar- M
row, and the next day when the ex- H
citement of the scene had passed, com- H
plaints were made to Mayor Fltzger- H
aid, who sent word to the manage- H
ment of the opera house that if the M
realism of the performance were not H
toned down the license would bo re- M
called. Director Russell protested, say- M
ing that Scarpia behaved in Boston M
precisely as he had behaved else-
where. But the mayor was inexor- M
able. And man-like he blamed it on the M
woman. In his opinion it was Mary jH
Garden who was too realistic. Per- H
haps he thought that Scarpia cou' "r R
help it. All of which goes to l. ovo l
that sex is a very serious matter in M
Boston. It is one of the curious par- H
adoxes of civilization as Shaw points M
out in one of his prefaces that while, M
generally speaking, the average play H
depends for its dramatic force on ap-
peals to the ex instinct, yet It must H
bo a perfectly genteel play, fit for H
church goers, and the imperiousness of M
the instinct must not be put in evi- M
donee. In other words our mimes are H
not permitted to make a show of lov- M
ers' endearments. As Shaw says, you M
can have conflagrations, murders, exe- W
cutions, all sorts of crimes simulated yfl
on the stage, but the realistic treat- jH
ment of the incidents of sex is quite M
out of the question. The theme may Hj
be love but the exposition of it is H
highly indecorous. Tho playwright 9
must impose celibacy on his art. This H
of course is as it should be, but one M
may sympathize nevertheless with the M
serious, pure-minded author of "Mrs. jH
Warren's Profession" when he finds M
that his play revolts people who aro D