Chapter XVI Setting Up Lending Agencies

of their legitimate stock, to as much as 168 times their legitimate stock. In 1932-33 Doheney, chief of the Cities Service Gas Stations, issued $30 million in stock, with the usual fraudulent statement: "to extend and improve our service." When the $30 million cheque came in for the stock, Doheney promptly credited his own personal account with $16 million. He bought, with $11 million, the Kansas City Star. It is a common practice now. When a corporation sells a new issue of stock, the officials may cheque that stock out to buy anything from a purple cow to a million dollar addition of equipment. That's phoney, hot-cheque money competing with the people's earned dollars. There could be no lending agencies failures; for every loan they made would be secured by ample chattels; and the Congress would trim the interest rate to that point where the lenders could not take usury from the borrowers. There could be no watered stock sold. Hence there would be no profit in stock exchanges, and they would disappear. Morgan & Company, as with many smaller banks, is a stock-market promoter and gambler first, and banker second. They do not use their banking facilities to stimulate honest, essential industry, but to promote profits through the stock market. Bankers use the stock markets to swell their incomes just as they lend money.