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OCR Page 1 of 8for a ARCHIVES 2 "MATIONAL RECORDS AND
STATESMANSHIP IN FINANCE.
We have spectedl 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,
banks, and trust companies ^ of the country.
and other financial interests
The Metropolitan was repre-
sented 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 x let these gentlemen in on the ground floor so
thewhen-issuedpant and below
to speak, at 8 price considerably below that at which the issue
market
was to be started on the New York Stock Exchenge. Several
members 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
valuable such 8 preferred list could become.
Terms
Subject
Railroads
Relations
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