Indianapolis Times, Volume 44, Number 295, Indianapolis, Marion County, 20 April 1933 — Page 5

APRIL 20, 1033.

U. S. STEEL, FIRST ‘BILLION DOLLAR BABY,’ CREATED BY GREAT HOUSE OF MORGAN Financial Colossus Played Leading- Role in War Loans, Then Expanded Into Other Leading- World Fields. Thi* l th- fourth of ix itoriei on thr Home of Morran. *oon to be the subject of senatorial inquiry. BY WILLIS THORNTON’, NEA Service Writer NEW YORK, April 20.—As the Twentieth Century dawned, the House of Morgan rose to Its most spectacular height in creation of the first “Bil-lion-Dollar Baby,” the United States Steel Corporation. Steel had by this time replaced the railroads as a sort of green pastures of financial juggling. The steel speculator, less rough house, but more adroit than his railroad predecessor, operated along this line: He bought up a string of small steel mills; often paying excessive prices; he combined these under a magnetic title, and sold stock to the public, thoroughly watering it first. The public loved it.

‘‘Bet-a-Million” John W. Gates was typical of these gentry, rigging together his American Steel and Wire Cos. His plunger proclivities were steadied, however, by his general counsel, the pious, rigid Elbert H. Gary. When J. P. Morgan plunged into the steel game by setting up the Federal Steel Cos., he met Gary and hired him to preside over Fedral. Carnegie Waits for Morgan Andrew Carnegie, the former Pittsburgh bobbin boy, watched closely. His steel interests were wide and varied. He knew Morgan would want them some day, and Carnegie was getting old. Rockefeller nibbled at the Carnegie properties, but would not meet the price. Carnegie waited for Morgan. Knowing Morgan’s intense personal dislike for him, Carnegie sent the magnetic Charles Schwab, his personal protege, to feel out Morgan and Gary. Then he announced that it was “buy or fight” and began a series of projects to compete with Morgan and Gates which well might have ruined both. Morgan bought. He paid the equivalent of $447,000,000 in cash and securities in the new corporation. It was more than twice what Rockefeller had refused to pay. Stock Sells Fast Stock in the new corporation was eagerly bought in every crossroads town. Gary was put in charge, and his effective management produced both dividends and industrial strife. In 1903 the fall of Steel stock to Sand an order by the supreme court in 1904 dissolving Morgan's Northern Securities Company, one of the first holding companies, shook the throne temporarily. But Morgan, never wavering, went on to form the International Mercantile Marine Company, absorbing the White Star. American, Red Star and Leyland Lines. International Harvester came next, a huge combine of makers of farm machinery. Morgan and other houses began to take an interest in life insurance firms, Morgan specializing in New York Life. The death of E. H. Harriman, Morgan's rival in railroad promotion. left Morgan free to buy into Guaranty Trust and Mutual Life.

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He also got Thomas Fortune Ryan's interest in Equitable Line. Elder Morgan Dies The year 1913, as the world paused on the brink of a war that was to bring an end to many things, brought the end of J. P. Morgan. He died in Rome, the Eternal City, which had always held a strange fascination for him. His mantle fell directly on his son, the present J. P. Morgan, whose long apprenticeship with the firm enabled him to carry on its affairs without a break. Strangely pnough, within a year of the elder’s death, the son was fated to earn,’ through a loan transaction more than trice as large as any of his father's. The desperate need of the allies for war supplies necessitated a huge American loan. A distinguished Anglo - French mission, headed by Lord Reading, arrived and conferred with Morgan. They were going to ask a billion dollars, a sum never before even mentioned in international finance. Gets Half Billion Morgan lit one of his long black cigars. “Reading,” he said, “I wouldn't ask for a billion if I were you. I think you'd be wiser to limit your first large bond issue to half a billion.” So half a billion it was, and successfully sold in America through a Morgan syndicate of 2,200 banks. The House of Morgan became fiscal agent for the British government, and Edward Stettinius <later to become a partner) became purchasing agent for all the allies. Firms associated with the House naturally got their share of the fat contracts. When the United States entered the war, the government's titanic financial operations temporarily eclipsed the House of Morgan and all other privately run banks. In 1914, Morgan and his partners resigned thirty directorships, citing the burden of attending meetings and public clamor against them. Back in Limelight The w’ar over, and the United States established as the moneylender of the world, the House of Morgan again emerged. Between 1919 and 1926. it handled bond issues in the United States for Bel-

Hamburg’s Business Wrecked by Nazis’ Anti-Jewish ‘Crusade’

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gium, France, England, Italy, Sv.’itzerland, Norway, Austria, Germany, Japan, Australia, Chile and Cuba, totaling a billion and a half. Gross profits to the house from sale of foreign bonds in the United States from sale of foreign bonds in the United States from 1919-1932 officially w r ere reported by the firm as $10,383,626. When the German reparations fell through, it was a Morgan group (Morgan himself, Owen D. Young, T. W. Lamont and T. N. Perkins) which made the readjustment and established the Bank for International Settlements. Under Morgan leadership the influence of exported American capital extended further over the Caribbean, Central America and the far east. Through Kennecott Copper its influence was felt in the mines of Peru and Chile. Into Mexico it w’ent with Continental Oil’s concessions. Other huge promotions were in the offing. In 1920, the W. C. Durant interest in General Motors w’ent to Morgan, and Morgan partners went on the G. M. board. The Morgan organization of Radio Corporation, only recently divorced from General Electric and Westinghouse by court order, gave it a hold on the communications field, for G. E. controls Canadian, German and other European affiliates. Into the new’er utilities field plunged the House, with organization of United Corporation, giant Other diverse interests felt the Morgan touch. * Montgomery-Ward (mail orders) was reorganized in 1921, and Johns-Manville (asbestos) in 1927-28. In 1929 the House entered the food field by organization of Standard Brands. In each case Morgan representatives remained on the board.

THE INDIANAPOLIS TIMES

Hamburg, one of Europe's greatest seaports, already partially paralyzed by world trade conditions, suffers anew from the Hitlerists’ anti-Jew Campaign. Great Steamship Lines of Leading Seaport Hard Hit by Campaign. Following is the fourth article br Milton Bronner. London correspondent of | the Newspaper Enterprise Association, describing conditions in German cities. BY MILTON BRONNER NEA Service Writer LONDON, April 20.—Hamburg, a city of a million people, and one of the greatest seaports of the world, seems stricken as though by a plague by the business depression. It depends for Its existence upon export and import trade. This business had fallen low enough, and then came the finishing touch—the Hitler anti-Jew’ish campaign. The great shipping lines of Hamburg and Bremen frankly admit wholesale cancellations of both passenger and freight business. The outlook for the future is not promising. They know’ that in the light of what is now Germany’s national policy, Jew’s quietly will start patronizing British, American and French rivals of the German steamship lines. Hotels Nearly Empty At this time of year the hotels of Hamburg and Bremen are usually filled with American travelers |on various religious pilgrimages. [ My observation of a few’ days ago, j however, was that the hotels w’ere j virtually empty. The Hamburg of today, like j Leipsic and Frankfort, which I also I visited, is plastered w’ith ’ For Rent” j signs. The most active business is the Nazi business of suppressing the Jew’s, Socialists, and Communists. The city, in many w’ays, has a conquered air. The pressure upon the Jewish stores did not end w’ith the boycott, but has been continued with the demand that department stores drop all Jewish directors. Once Ruled by Socialists Before the days of Hitler, Hamburg w’as ruled by the Socialists. Bloody and often fatal encounters between Nazis and Communists w’ere almost daily occurrences over a period of months. Now, however, all is quiet. Nazi troopers are thick throughout the city. They are prominent even at the railway stations. Many of their Communist enemies are in jail. There was little good humor displayed in carrying out the one-day boycott in Hamburg. Armed Nazi troopers blocked the doorway to every Jewish business or professional establishment. Prospective customers were warned away, if they persisted in their desire to enter a store or office, their j picture was taken to be filed away for future reference. When they emerged they were greeted with angry shouts from the guards. Parade Assails Jews On Sunday, following the boycott, a great procession of automobiles swept through the streets of Hamburg, bearing banners urging good ! Germans to cpntinue to abstain j from buying from Jews. I understand from reliable 1

sources that prominent German Christians and big business bodies of Hamburg, greatly alarmed at the strong possibility of business repercussions, protested as vigorously as they dared against eliminating Jews from various business organizations. The protests, however, brought no ! response. What is to happen to the big steamship corhpanies and the shipping business? The logical conclusion is that the companies w’ill be thoroughly Hitlerized. The general belief in shipping circles is that the Nazis will put some of their own men on the directorates of the Hamburg and Bremen lines. There then will be developed something akin to a big ; shipping trust, similar to Lust Hansa. the great air passenger and freight trust, and the steamship lines will be given increased financial support by the govern- | ment. | Further efforts w’ill be made to j help German foreign trade by conI tinuing the policy of fixing low’er railway freight charges for export j goods than for goods carried for internal consumption. Next—Concluding article by Mr. Bronner . . . The future of ism.‘CLEAN UP' TO BE STRESSED BY MAYOR Sullivan Will Talk Tonight at Meeting. Tradesmen and others interested in the modernization campaign to be held from Saturday to May 5, I will meet at 8 o’clock at the Rhodius | park community house. I Mayor Reginald H. Sullivan will speak. Dr. W. E. Arbuckle, coroner, and Dr. Walter E. Hemphill have charge of the meeting. Emphasis was giver the campaign Wednesday with announcement that loans designed for repairs and remodeling will be given special attention by the federal home loan of Indianapolis. “The board of the Heme Loan bank system at Washington has urged that special attention be paid by all member associations to re- i quests for loans so- remodeling and j repairs,” said Fermor S. Cannon, board of directors chairman of the Indianapolis bank. BOUND TO U. S. JURY Two Held on Counterfeit Charge Waive Federal Examination. Examination before Fae W. Patrick. United States commissioner, was waived Wednesday by Mrs. Lena Ferber and George Mathews, charged with passing counterfeit S2O bills. They were bound to the federal grand jury under SIO,OOO bonds. Boy, 6, Suffers Broken Arm James Beekman, 6, son of Fred Beekman, 2105 North Linwood avenue, suffered fractures of both bones in his left forearm Wednesday while wrestling with a playmate at his cme.

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