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OCR Page 1 of 12STATESMANSHIP IN FINANCE
We have the spectacle of the "preferred list" and the
"Gratuity list". Under oath, before the Senate Special Committee
investigating Railway Finance, it was testified by Mr. Whitney
that J. P. Morgan and Co. had a "preferred list" of customers
to whom they sold securities. This list consisted of the high
officers and directors of the various great insurance companies
and trust companies of the country. The Metropolitan was
represented by its President and a Director, the New York Life
by three Directors, the Prudential by two Directors, the John
Hancock Life by a Director, the Bank of New York and Trust
Company by a Director, Bankers Trust Company by five Directors,
Chemical Bank and Trust Company by a Director, Chase National
by two Directors, New York Trust Company by its Board Chairman
and two Trustees, Guaranty Trust Company by eight Directors and
its Board Chairman. When Morgan intended to offer an issue of
securities he'd let these gentlemen in on the ground floor, so
to speak, at a price considerably below that at which the issue
setail
was to be started on the New York Stock Exchange.
members
A
of the listing committee of the Exchange, itself, were on this
so-called preferred list, too. That, of course, would make
listing easy. The well of resources from which Morgan, Kuhn,
Loeb, and the other so-called investment bankers drew for the
sale of bond and stock issues, were the reserves of the great
life insurance companies and the funds of the great trust and
savings banks of the country. It is easy to see how very val-
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