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for 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.

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Railroads