The Alternative is Worse
Mr. Pujo submitted the following resolution, which was referred to the Committee on Rules and ordered to be printed:
Whereas H. Res. 429 was heretofore passed for the purpose of directing the conduct
of an investigation into certain of the matters covered by this resolution, and it has
since been ascertained that said H. Res. 429 is insufficient in the delegation of its
powers to permit of the scope of inquiry which is believed to be necessary as a basis
for remedial legislation on the subjects covered by this resolution:
Resolved, That H. Res. 429 is hereby amended so that the same shall read as follows:
"Whereas legislation is now pending involving important changes in our national
currency and monetary system and vitally affecting our national banks and other
financial institutions, and various bills have also been introduced, and are now under
consideration by Congress having for their purpose the amendment and supplementing
of the Act approved July second, eighteen hundred and ninety, entitled 'An Act to
protect trade and commerce against unlawful restraints and monopolies,' generally
known as the Federal antitrust law; and
"Whereas bills are also pending or under consideration to regulate industrial cor-
porations engaged in interstate commerce through Federal incorporation, supervision,
and otherwise, and legislation is believed to be necessary to further control the incor-
poration, management, and financial operations of railroad corporations that are now
subject to the jurisdiction of the Interstate Commerce Commission, including,among
other things, the regulation of the issue and sale of their securities and the protection
of minority stockholders; and
"Whereas it has been charged, and there is reason to believe, that the management
of the finances of many of the great industrial and railroad corporations of the country
engaged in interstate commerce is rapidly concentrating in the hands of a few groups
of financiers in the city of New York and their associates in New York and other cities, nd that these groups, by reason of their control over the funds of such corporations
and the power to dictate the depositories of such funds, and by reason of their relations
with the great life insurance companies with headquarters in New York City, and
by other means, have secured domination over many of the leading national banks and
other moneyed institutions and life insurance companies in the city of New York
and in other cities to which they direct such patronage and over the vast deposits of
money and of the.other assets of such institutions, thus enabling them and their asso-
ciates to direct the operations of the latter in the use of the money belonging to their
depositors and the stockholders and in the purchase and sale of securities and loans
of money by such banks and other moneyed institutions and life insurance companies,
and that these institutions and their funds are being used to further the enterprises
and increase the profits of these groups of individuals from such transactions and to
augment their power over the finances of the country and to control the money, ex-
change, security, and commodity markets, and prevent competition with the enter-
prises in which they are interested, to the detriment of interstate commerce and of the
general public; and
"Whereas it has been further charged and is generally believed that these same
groups of financiers have so intrenched themselves in their control of the aforesaid
financial and other institutions and otherwise in the direction of the finances of the
country that they are thereby enabled to use the funds and property of the great
national banks and other moneyed corporations in the leading money centers to control
the security and commodity markets; to regulate the interest rates for money; to
create, avert, and compose panics; to dominate the New York Stock Exchange and
the various clearing-house associations throughout the country, and through such
associations and by reason of their aforesaid control over the aforesaid railroads, indus-
trial corporations, and moneyed institutions, and others, and in other ways resulting
therefrom, have wielded a power over the business, commerce, credits, and finances
of the country that is despotic and perilous and is daily becoming more perilous to the
public welfare; and
"Whereas the national banks and other moneyed institutions controlled as aforesaid
are charged to have been, and to be, engaged in the promotion, underwriting, and
exploitation of speculative enterprises and in the purchase and sale of securities of
such enterprises, and in acquiring, directly or indirectly, stocks of other banking
institutions and absorbing competitors and in using their corporate funds and credit
for such purposes, either alone or in conjunction with those by whom they are con-
trolled; and
"Whereas it is deemed advisable to gather the facts bearing on the aforesaid condi-
tions and charges or in any way relating thereto or to any of the subjects above men-
tioned as a basis for remedial and other legislative purposes: Therefore be it
"Resolved, That the Members now or hereafter constituting the Committee on
Banking and Currency, bv a subcommittee consisting of the eleven members thereof
already appointed under H. Res. 429 and by such substituted members as may be
from time to time selected from the members of the said committee to fill vacancies
in the subcommittee, is authorized and directed—
"First. To fully investigate and inquire into each and all of the above-recited
matters and into all matters and subjects connected with or appurtenant to or bearing
upon the same.
"Second. To fully inquire into and investigate among other things whether and to
what extent—
'' (a) Individuals, firms, national banks, and other moneyed corporations are engaged
in or connected with the management of financial affairs of interstate railroad or indus-
trial corporations, or life insurance companies, and what potential or other power they
have or exercise over such corporations, and how and to what uses the bankable funds
of such interstate railroad or industrial or other corporations are applied.
" (b) The marketing of the securities that have been from time to time issued by
interstate railroad and industrial corporations has been by competitive bidding or
otherwise.
"(c) Changes have been procured in the general laws of any of the States under
which such interstate corporations are organized in the interest or upon the procure-
ment of such corporations, and for what reason and by what methods and influences
such changes were accomplished.
"(d) Individuals, films, national banks, and other moneyed corporations interested
in or in anywise connected with such interstate corporations are enabled by reason of
their relations or connection with other interstate corporations or with other individu-
als, firms, national banks, moneyed corporations, or life insurance companies, or other-
wise to prevent or suppress competition in the interest of such interstate corporations,
or to protect or assist the latter in preventing or suppressing competition.
To Be Continued
Whereas H. Res. 429 was heretofore passed for the purpose of directing the conduct
of an investigation into certain of the matters covered by this resolution, and it has
since been ascertained that said H. Res. 429 is insufficient in the delegation of its
powers to permit of the scope of inquiry which is believed to be necessary as a basis
for remedial legislation on the subjects covered by this resolution:
Resolved, That H. Res. 429 is hereby amended so that the same shall read as follows:
"Whereas legislation is now pending involving important changes in our national
currency and monetary system and vitally affecting our national banks and other
financial institutions, and various bills have also been introduced, and are now under
consideration by Congress having for their purpose the amendment and supplementing
of the Act approved July second, eighteen hundred and ninety, entitled 'An Act to
protect trade and commerce against unlawful restraints and monopolies,' generally
known as the Federal antitrust law; and
"Whereas bills are also pending or under consideration to regulate industrial cor-
porations engaged in interstate commerce through Federal incorporation, supervision,
and otherwise, and legislation is believed to be necessary to further control the incor-
poration, management, and financial operations of railroad corporations that are now
subject to the jurisdiction of the Interstate Commerce Commission, including,among
other things, the regulation of the issue and sale of their securities and the protection
of minority stockholders; and
"Whereas it has been charged, and there is reason to believe, that the management
of the finances of many of the great industrial and railroad corporations of the country
engaged in interstate commerce is rapidly concentrating in the hands of a few groups
of financiers in the city of New York and their associates in New York and other cities, nd that these groups, by reason of their control over the funds of such corporations
and the power to dictate the depositories of such funds, and by reason of their relations
with the great life insurance companies with headquarters in New York City, and
by other means, have secured domination over many of the leading national banks and
other moneyed institutions and life insurance companies in the city of New York
and in other cities to which they direct such patronage and over the vast deposits of
money and of the.other assets of such institutions, thus enabling them and their asso-
ciates to direct the operations of the latter in the use of the money belonging to their
depositors and the stockholders and in the purchase and sale of securities and loans
of money by such banks and other moneyed institutions and life insurance companies,
and that these institutions and their funds are being used to further the enterprises
and increase the profits of these groups of individuals from such transactions and to
augment their power over the finances of the country and to control the money, ex-
change, security, and commodity markets, and prevent competition with the enter-
prises in which they are interested, to the detriment of interstate commerce and of the
general public; and
"Whereas it has been further charged and is generally believed that these same
groups of financiers have so intrenched themselves in their control of the aforesaid
financial and other institutions and otherwise in the direction of the finances of the
country that they are thereby enabled to use the funds and property of the great
national banks and other moneyed corporations in the leading money centers to control
the security and commodity markets; to regulate the interest rates for money; to
create, avert, and compose panics; to dominate the New York Stock Exchange and
the various clearing-house associations throughout the country, and through such
associations and by reason of their aforesaid control over the aforesaid railroads, indus-
trial corporations, and moneyed institutions, and others, and in other ways resulting
therefrom, have wielded a power over the business, commerce, credits, and finances
of the country that is despotic and perilous and is daily becoming more perilous to the
public welfare; and
"Whereas the national banks and other moneyed institutions controlled as aforesaid
are charged to have been, and to be, engaged in the promotion, underwriting, and
exploitation of speculative enterprises and in the purchase and sale of securities of
such enterprises, and in acquiring, directly or indirectly, stocks of other banking
institutions and absorbing competitors and in using their corporate funds and credit
for such purposes, either alone or in conjunction with those by whom they are con-
trolled; and
"Whereas it is deemed advisable to gather the facts bearing on the aforesaid condi-
tions and charges or in any way relating thereto or to any of the subjects above men-
tioned as a basis for remedial and other legislative purposes: Therefore be it
"Resolved, That the Members now or hereafter constituting the Committee on
Banking and Currency, bv a subcommittee consisting of the eleven members thereof
already appointed under H. Res. 429 and by such substituted members as may be
from time to time selected from the members of the said committee to fill vacancies
in the subcommittee, is authorized and directed—
"First. To fully investigate and inquire into each and all of the above-recited
matters and into all matters and subjects connected with or appurtenant to or bearing
upon the same.
"Second. To fully inquire into and investigate among other things whether and to
what extent—
'' (a) Individuals, firms, national banks, and other moneyed corporations are engaged
in or connected with the management of financial affairs of interstate railroad or indus-
trial corporations, or life insurance companies, and what potential or other power they
have or exercise over such corporations, and how and to what uses the bankable funds
of such interstate railroad or industrial or other corporations are applied.
" (b) The marketing of the securities that have been from time to time issued by
interstate railroad and industrial corporations has been by competitive bidding or
otherwise.
"(c) Changes have been procured in the general laws of any of the States under
which such interstate corporations are organized in the interest or upon the procure-
ment of such corporations, and for what reason and by what methods and influences
such changes were accomplished.
"(d) Individuals, films, national banks, and other moneyed corporations interested
in or in anywise connected with such interstate corporations are enabled by reason of
their relations or connection with other interstate corporations or with other individu-
als, firms, national banks, moneyed corporations, or life insurance companies, or other-
wise to prevent or suppress competition in the interest of such interstate corporations,
or to protect or assist the latter in preventing or suppressing competition.
To Be Continued
Organic Act 1871 opened the door for all the corporate structures and behaviors
"Fifth. Said committee as a whole or by subcommittee is authorized to sit during
the sessions of the House and during the recess of Congress. Its hearings shall be
open to the public. The committee as a whole or by subcommittee is authorized to
hold its meetings both during the sessions of Congress and throughout the recesses
and adjournment thereof and in such cities and places in the United States as it may
rom time to time designate; to employ counsel, experts, accountants, bookkeeper,
clerical and other assistants; may summon and compel the attendance of witnesses;
may send for persons and papers; and administer oaths to witnesses. The Comptroller
of the Currency, the Secretary of the Treasury, and the Commissioner of the Bureau
of Corporations, and their respective js.-istants and subordinates, are hereby respec-
tively directed to comply with all directions of the commiitee for assistance in its
labors, to place ai the -ervice of the committee all the data and records of their respec-
tive departments, to procure for the committee from time to time such information
as is subject to their control or inspection, and to allow the use of their assistants for
the making of such investigations with respect to corporations under their respective
jurisdictions as the committee or any subcommittee may from time to time request.
"No person shall be excused from giving testimony or from answering any question
or from otherwise disclosing any fact within his knowledge as an individual or as an
officer or director of a corporation, or otherwise, or I'rom producing any book, paper,
or document on the ground that the giving of such testimony or the production of
such book, paper, or document would tend to incriminate him. or for any other reason;
but every person so testifying shall be granted immunity from prosecution with respect
to any matter or thing concerning which he may be interrogated and as to which he
shall truthfully make answer under oath upon such investigation. The Speaker shall
have authority to sign and the Clerk to attest subpoenas during the recess of Congress."
Respectfully, A. P. Pujo, Chairman, Committee on Banking and Currency, 1913, February
" (i) Any national bank or other moneyed corporation, whether directly or indirectly
or whether through or by means of another corporation having substantially the same
officers, management, control, or stockholders, or with stock paid for by the dividends
of a parent or affiliated company, and, whether alone or with others, has acted as an
issuing house or in offering securities to the public or to investors by prospectus, adver-
tisement, solicitation, or otherwise, or has speculated or is speculating in stocks, and
if so, the nature of all such transactions and the profits and all other details thereof.
"(j) The management and operations of the New York Stock Exchange and the
New York Clearing House Association are, or may be. directly or indirectly, domi-
nated, controlled, or otherwise affected by any individuals or groups of individuals
who control or are influential in directing the use or deposit of the funds of national
banks in the city of New York, or of interstate railway or industrial corporations, or
life insurance companies, and the relations that the New York Stock Exchange and
the New York Clearing House bear to such individuals and groups of individuals and
to their financial transactions and to our commercial and financial systems and to
interstate and foreign commerce.
"(k) Any individual, firm, or corporation, or any one or more groups of such indi-
viduals, firms, or corporations, may or can affect the security markets of the country
through the New York Stock Exchange, or can create, avert, or compose panics by
the control of the use and disposition of moneys in the banks and other moneyed or
other corporations that are controlled by such individual, firm, or corporation, or by
other means.
"'(1) There is any connection between the relations of bankers, banking firms, and
their associates to the railroad and industrial corporations engaged in interstate com-
merce, and the relations of such bankers, banking firms, and their associates to the
national banks and other moneyed or other corporations, and the relations of any of
these interests to any of the others that operate to protect such interstate corporations
against competition or are or may be used for that purpose.
"Third. To investigate, find, and report the facts bearing upon the payment of
political contributions to national campaign funds by or in the interest of national
banks and interstate railroad and industrial corporations, and by all persons who are
officers or directors thereof, anf by other persons who are directly or indirectly in
control of or connected with such corporations, together with the amounts of such
contributions and the circumstances attending the same.
•'Fourth. To investigate the methods of financing the cash requirement of inter-
state corporations and of marketing their securities, and the relations of national banks
and others to such transactions.
moneyed corporations are mutually benefited and protected against competition and
otherwise by the relations existing betweea them.
"(f) National banks and other moneyed and other institutions are directly or indi-
rectly owned, dominated, or controlled through their directors or through stock
ownership, official management, patronage, or otherwise by the same persons, inter-
ests, groups of individuals, or corporations that are also directly or indirectly inter-
ested in other national banks or moneyed or other corporations located in the same
city and in interstate corporations that are customers of said national banks and other
moneyed corporations.
"(g) The same individuals are officers or directors of, or were or are directly or
indirectly interested in or dominate or control, or heretofore dominated or controlled,
in any way, more than one national bank or other moneyed corporation.
"(h) The funds or credit of national banks and other moneyed corporations or life
insurance companies are or have been used or employed other than in making current
loans to merchants or on commercial paper, by who?e influence or direction such funds
or credits were so used or employed, and particularly whether and to what extent
such funds are or have been employed: First, in the purchase of securities from
bankers or others in any way interested in or connected with such corporations;
second, in the guaranty or underwriting of securities or syndicate transactions, either
alone or in conjunction with others; third, in loans on notes secured by bonds, stocks,
or other collateral; fourth, in loans on or purchases of stocks of other banks or of any
trust or investment company or financial or moneyed corporation; and, fifth, in any
form of investment alone or in joint account with others.