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nydus/Other People's Money, and How the Bankers Use ItPublic

Louis D. Brandeis provides an analysis of the American money trust and the concentration of industrial power. The text examines the business developments and financial practices that emerged following the advancements in steam and electricity.

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CHAPTER VII BIG MEN AND LITTLE BUSINESS

the money of the country to New York. The New York bankers handle the loans of other people’s money on the Stock Exchange; and members of the Stock Exchange receive large amounts from commissions. For instance: There are 5,084,952 shares of United States Steel common stock outstanding. But in the five years ending December 31, 1912, speculation in that stock was so extensive that there were sold on the Exchange an average of 29,380,888 shares a year; or nearly six times as much as there is Steel common in existence. Except where the transactions are by or for the brokers, sales on the Exchange involve the payment of twenty-five cents in commission for each share of stock sold; that is, twelve and one-half cents by the seller and twelve and one-half cents by the buyer. Thus the commission from the Steel common alone afforded a revenue averaging many millions a year. The Steel preferred stock is also much traded in; and there are 138 other industrials, largely trusts, listed on the New York Stock Exchange.

TRUST RAMIFICATIONS

But the potency of trusts as a factor in financial concentration is manifested in still other ways; notably through their ramifying operations. This is illustrated forcibly by the General Electric Company’s control of water-power companies which has now been disclosed in an able report of the United States Bureau of Corporations:

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