Maudlin v. Morgan

Annoyed if not perplexed is Pennsylvania's Governor George Earle by bootleg coal mining, which began about five years ago in the depth of Depression and is now a $30,000,000-a-year industry based squarely on theft but supporting a sizable chunk of his State's population in a manner to which it has become thoroughly accustomed. The coal' leggers rumble ominously about "human rights." After a personal visit to the bootleg fields last year, Governor Earle appointed a five-man Anthracite Commission to find an answer.

After a long succession of disappointingly impersonal reports, the Anthracite Commission last week turned up a genuine old-fashioned villain for George Earle to hiss. Coal operators lay their troubles to high taxes and John L. Lewis. More impartial observers lay them in good measure to the coal operators, who allowed the alert oil industry to invade their market after the great anthracite strike of 1922. Almost inevitably, George Earle's commission had come around to that old favorite, the House of Morgan.

A Washington statistician hired by the commission for the purpose, Cecil Vearl Maudlin, made a survey and joyfully "discovered" that eight of the ten big anthracite producers and seven of the nine anthracite railroads were "controlled" by Morgan interests. In 1920 the Supreme Court ordered the anthracite carriers to divest themselves of their coal properties. According to Mr. Maudlin, the result of that order was that both mines and railroads fell into the hands of Morgan & friends. And Mr. Maudlin reported: "Under such a situation they can forego profits on the production of anthracite and recoup them in high freight rates, thereby forcing the independent companies . . . to operate on a very close margin . . . and preventing them from providing any real competition."

Mr. Maudlin's thesis of Morgan control was supported not by evidence of security ownership but by the debatable theory of interlocking directorships--i. e. if a Morgan partner sits on the board of Guaranty Trust and a Guaranty Trust official sits on the board of a coal company, then the House of Morgan controls the coal company--not to mention the Guaranty Trust. But Governor Earle promptly opened up on "the witch doctors of Wall Street."

Meantime in Manhattan denials popped from nearly every important banking door. A sweeping Morgan denial took in almost everything short of War guilt. Chairman Jackson Reynolds of Manhattan's First National ("The Baker Bank"), an articulate banker, cracked: "A newspaper states that the author of the report is Maudlin. It seems to me that the report also is accurately characterized as maudlin."

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