Full text of Commercial and Financial Chronicle : November 20, 1920 : American Bankers' Convention Section, Vol. 111, No. 2891

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S E C T I O N

GIVING PROCEEDINGS OF THE

Convention of Am
erican Bankers’ Association
Held at WasMngton, D. C., Oct 18, 19, 20, 21 and 22, 1920

in d e x t o

P«*e
EDITORIAL ARTICLE—
Problems Before tbe B*nklnf Conummlt,..

BANKING MOTION—
ADDRESSES ** ** •*#* *» * » **
■
*•••*•
COMMITTEE REPORTS .........
122
NATIONAL BANK

A ktouM O ti................
COMMITTEE REPORTS

.. 147
.. 164

t h is

S e c t io

.
P ifi

CLEARING HOUSE SECTION—
ADDRESSES •*•«.** . *•... r •••A*... f **
SAVINGS BANK SE C TIO N ADDRESSES
COMMITTEE R E P O R T S ...................... .1TB
STATE BANK SECTION . . . . . . . . . . . . . . . A m
TRUST COMPANY SECTION—
ADD RES SES . .»*••««. . . . . •••.»... *•
COMMITTEE REPORTS
........... .

F or Index to Advertisement* see pages 89 and 90

W ILLIAM

B. D A N A

COMPANY,

P U B L 1S H E B S ,

t* u r n T rn rlfif t» A H * o m n m , by WILLIAM B. DANA COMPANY, In oflk» * U b n x U a *

199

Chartered 1 $ 3 $

, , 1$ prepared to serve as: Executor, Adm inistrator,
., Trustee, Guardian, Assii
l R eceiver; Financial Agent
for Individuals or Corporations and as D epositary under Plans o f
Reorganization. Assumes entire charge o f Real Estate. Allows
Interest on D eposits.

BROAD A N D CH E STN U T STR E E TS. PH ILAD ELPH IA
Gtpital
d Surplu*
$10,000,000

EFFINGHAM JB. MORRIS
PRESIDENT

m < . — t. ...
g . J -------1
iviwiiuBi rvcaoras

1812

1920
W f»
J JTU
L Sr

Pennsylvania C o m p a n y
for Insurances on Lives and Granting Annuities
T R U ST

AND

SA FE

D E P O SIT

COM PANY

C ap ital an d S u rp lu s

broad s t o u t

$7,800,600

caw .

not ■

rwna—t

617 C h estn u t S treet
P h ila d elp h ia

1 to act as executor, administrator, trusts*,
tm
agen t,etc., hi
4nuda and other states.
Interest allowed on individual and corporation accounts
subject fo
■

M anber o f Federal Reserve System

S ?§
S1

“w «T •_ * s
f
* &

Kidder, Peabody & Co.
115 Devonshire Street

Broad

Boston

Street

New York

Investment Securities

Foreign Exchange
Letters

Credit

Correspondents

BARING

BROTHERS & CO., Ltd.
LONDON

PWBM

DISCOUNT CORPORATION OF NEW YORK
Established

at Fifty-Two Wall Street, New York
City, January 2,1919, under the Investment
Banking Laws of New York, with paid up capital and surplus of $6,000,000, has discounted

and resold

investors—banks, individuals,

United States since

January 1, 1920,

firms

aggregate

and

over

corporations — throughout the
$1,350,000,000 of acceptances.

Its
a

resources and
energies are devoted to the development of the
feature of banking absolutely essential to America's success as

It discounts

approved

acceptances at

the best market

discount market—

open
a

world financial

power.

and offers investment oppor¬
yields consistent with safety and soundness.
rates

tunities for temporary funds at the
highest
Quotations and special offerings sent upon request.

DIRECTORS

STATEMENT—SEPTEMBER 30, 1920
ASSETS

Francis L. Hine, President First National Bank

Acceptances Discounted.

Edwin S. Marston, President Farmers Loan & Trust Com-

........

U. S. Government Securities

Pany

Gates W. McGarrah, President Mechanics & Metals National

•

350,000.00

Other Government Securities......
Cash and Due from Banks...... V.

Sundry Debits

—

...

Bank

985.00

1,413,917.77

8,759.68

$53,542,021.90

John McHugh
I

$51,768,359.45

LIABILITIES

Capital
Surplus

T
P MnrrSnn
J. P. Morgan, J. P. Morgan A Cn
& Co.
roan

Seward Prosser, President

Bankers Trust Company

...........

1,000,000.00

Undivided Profits..

Charles H. Sabin. /Wen, Guaranty Trust
with

Eugene V. R. Thayer, President Chase Natianal Bank
Geo. W. Davison, President Central Union Trust
•

563,231.35

6,563,231.35

CamPany

James A. Stillman, President National City Bank

"•

$5,000,000.00

Endorsement.

26,545,179.52

SuiS^redite """iV.Y.'.!!2

Company
.

S
$53,542,021.90

•
.

'
_

■

*•

}

•

OFFICERS
John.McHugh, President

E. C. Wagner, Vice-President

Jerome Thralls, Secretary and Treasurer
Alexander T. Stephan, Assistant Treasurer

Dudley H. Mills, Assistant Secretary

BROWN BROTHERS 6?

CO.

Established 1818

Boston

NEW YORK

Philadelphia

HROUGH

abroad,

our

we are

long established connections
in a position to render complete

Our correspondents

foreign service to banks.
include the strongest

banks overseas. We shall be
and offer the following facilities:

and private

tutions
to

and most progressive insti¬

co-operate

Travelers' Letters of

Credit.

pleased

Banks and bankers in all important

issue these letters in- dollars or in sterling
signature.
Brown Brothers 6? Co.1s Letters are

cities may arrange to
over

their

own

the oldest and best known

among

abroad.

Drafts under our commercial credits are

Imports and Exports.

purchased at favorable discount rates by bankers everywhere,
being negotiable in London as prime bankers1 acceptances, and
"eligible11 acceptances in New York, Boston and Philadelphia.
Those of banks, corporations, firms and indh
favorable terms in New York, Philadelphia,
London.
We solicit the deposits of firms and corpo"

Deposit Accounts.
viduals received
Boston and
rations

doing

international business.
bought and
Maturing investments collected.
Advice
Listed and unlisted securities

Investment Securities.

sold

given

commission.

as to

Credit

the exchange of securities.

Reports.

The standing of firms and corporations at

and abroad indicated

home

request.

Foreign Exchange Bought and Sold. Funds transmitted to domestic
and foreign points. Drafts issued payable in all parts of the world.
Collections made everywhere at favorable terms.
"A

BROWN,

Century of Service'

SHIPLEY 6? COMPANY
Established

Founders Court,

1810

Lothbury

•

LONDON, E. C.

123

Office for Travelers

Pall Mall, LONDON, S. W.

Nassau Street

New York

/.-.v.v ; ;•

Investment Securities

Foreign Exchange
Letters of Credit

Throgmorton Street, London, E. C.

Securities
For Conservative Investment

Bonds

Railroad

Municipal Bonds
Public Utility Bonds

Industrial Bonds
•

Preferred Stocks

Issues Suitable

for

Insurance

Companies, 'trustees,

anf Individual investors

White, Weld & Co.
14

wall

street

DEVONSHIRE

Boston

New York

ST,

It is

our

aim

have constantly available for the investment

of National Banks,

Sayings Banks, Trust Companies and

Corporations, Short Term Investments which will
profitable

employment

for

funds

Security of principal, adequate interest
suit

individual

and

afford

will

combine:

return, and

maturity to

requirements.

BANK AND

BANKERS' ACCEPTANCES

LIBERTY AND VICTORY BONDS
U.

TREASURY CERTIFICATES
#

MUNICIPAL NOTES

SHORT TERM RAILROAD AND INDUSTRIAL SECURITIES

EQUIPMENT MORTGAGES

We iwill be

pleased to send
upon

our

daily quotation sheets

application.

Discount House

Salomon Bros. & Hutzler
Members New York Stock

PINE STREET

NEW YORK CITY, N. Y.
TELEPHONE JOHN 6300

Exchange

CONGRESS STREET

BOSTON, MASS.
TELEPHONE FORT HILL 6640

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Incorporated 1889

The New York Trust Company
Fifth Avenue Office

NEW YORK

CAPITAL

Fifth Avenue and 57th Street

$3,000,000

SURPLUS and PROFITS
v

•

Designated

Depositary

11,000,000

Bankruptcy and

Court

Trust

and

Funds

Trustees

BANNARD

OTTO

READING BERTRON
A. BLAIR

JAMES

MORTIMER N. BUCKNER

JAMES C. COLGATE
ALFRED A. COOK
ARTHUR J.

CUMNOCK

ROBERT W.

de FOREST

JOHN

DENNIS

PHILIP T. DODGE

GEORGE

DOUBLEDAY

SAMUEL

JOHN A.

GARVER

FISHER

BENJAMIN

GUINNESS

F. N. HOFFSTOT

BUCHANAN
PERCY

HOUSTON

JENNINGS

WALTER JENNINGS

DARWIN P. KINGSLEY

JOHN

McCALL

OGDEN L. MILLS
JOHN J. MITCHELL

JAMES

PARMELEE

HENRY C. PHIPPS

NORMAN P.

REAM

SAGE

DEAN

JOSEPH J.
MYLES

SLOCUM

TIERNEY

CLARENCE M. WOOLLEY

OFFICERS
OTTO

BANNARD, Chairman of the Board

MORTIMER N. BUCKNER,
FREDERICK

II.

HORNE, Vice-President
JAMES DODD, Vice-President
HERBERT W. MORSE, Vice-President
EDWARD

WILLIAM
G.

LEWIS,

WALTER

SIDNEY

Assistant Treasurer

IRVING

BIRDSALL, Assistant Treasurer

HAYDOCK, Vice-President and
JOSEPH A. FLYNN, Assistant Secretary
Member of the New

SILLECK, Assistant Secretary

L. BENNETT, Assistant

WILLIAM

Fifth

Assistant Secretary

Assistant Secretary
Assistant Secretary

MacNAUGHTEN,

LINDSAY BRADFORD,

CURTS, Secretary

CHARLES

Assistant Secretary

AUGUSTUS C. DOWNING, JR.,

HARRY FORSYTH, Treasurer

BOYD

President
WALTER SHAW,

TAFT,

Secretary

2nd, Assistant Secretary

Avenue Office

Manager

MRS.

KEY

CAMMACK, Assistant Secretary

RUSSELL V. WORSTELL, Assistant

York Clearing House Association and of

Secretary

the Federal Reserve System

ESTABLISHED 18*7

NEW

YORK

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AMERICAN

FOREIGN

INVESTMENT

SECURITIES

CABLE

TRANSFERS

EXCHANGE

LETTERS

CREDIT

Wall

Street

New York

Commercial Paper

Foreign Exchange
Letters of Credit
Investment Securities

137 So. La Salle St.

Boston

Chicago
14

421 Chestnut St.

Montgomery St.

San Francisco,

Congress St.

Philadelphia

Cal.

411 Olive St.

24 Marietta St.

St. Louis

Atlanta, Ga.

Title

Insurance

Los

Building

Angeles, Cal.

Clark, Dodge & Co.
—ESTABLISHED

Government, Railroad, Public
Utility

Industrial

and

Bonds

Specialists

suitable

investments

for the needs of individuals,
and

security

trustees

institutions

issues

underwritten

fiscal agents

....

-..

..V.

STATISTICAL

INFORMATION
ON

FURNISHED

REQUEST

51 Wall Street, New
790 BROAD

York

NEWARK, N. J.

ST.,

Banking and Investment Service
As members of the New

Stock

York, Boston and Philadelphia

Exchanges, with correspondents in all the leading

markets in this country and
and bonds on commission.

Our Investment

Europe,

buy and sell stocks

Department is prepared

offerings of bonds and investment stocks,
latest statistical information

furnish the

all issues, and to

clients advised of any developments
We

submit selected

keep

affecting their holdings.

investigate and negotiate the purchase of entire issues

Railway, Public Utility and Industrial securities of

proven

merit.

act

fiscal agents for

corporations and conduct

general Domestic and Foreign banking business.

our

Hayden, Stone & Company
25

Broad

New

Street

87 Milk Street

York, N. Y.

Boston,

(

BRANCH OFFICES
180

Middle

387

Maine

Street,
Street,

PORTLAND,

SPRINGFIELD,

Cable Address "

MAINE

MASS.

Haystone"

Mass.

Our

Foreign Department

prepared

submit in detail

information regarding any in¬
ternal loan of any'

of the

European nations

important

one

own

and offer

Railroad

Municipal
Public

Industrial

Utility

Investment Bonds

Leach & Co.,

Inc.

Investment Securities
62

Cedar

Street, New York

Chicago

Philadelphia

Buffalo

Minneapolis

Boston

Cleveland

12
J

Baltimore
Pittsburgh

Back of l(bur Business

handling

any

: ": ;

banking

arise the Bankers Trust

Company is
customers

the
ex-

We offer you not only the
an

worldwide
sonal

dimensions, but also the

interest

obtain the best

this

working equip¬

institution that does business of

and

organization whose

Let

pre¬

Company and the

perience of its staff.

.^v-.;vy

matter that may

pared to place back of its
full facilities of the

ment

c-^rv:-:"

co-operation

results

Company

effort

constant

for

stand

its

Strength" back of your business.

per¬

customers.

"Tower

Bankers Trust Company
Member Federal Reserve System
As tar Trust Office:

5th Avenue

42nd Street

Specialists in Bonds legal for New
York, Connecticut, Massachusetts.
Private wires to

Philadelphia, Pitts¬

burgh, Boston, Baltimore, Richmond,
(ir

and New Haven.

Members

New

York

Stock

Ex¬

change.

52 Broadway

15 Center St.

New York

New Haven

Members New York Stock
111

Broadway, New York

Exchange

The Rookery, Chicago, 111.

UPTOWN NEW YORK OFFICE—WALDORF-ASTORIA

St.

Louis

Milwaukee

London

Liverpool

Paris

Listed and Unlisted Bonds and Stocks in All Markets

Railroad Bonds

Railroad Guaranteed Stocks

Industrial

Industrial Preferred Stocks

Public

Bonds

Utility Bonds

Public Utility Stocks

Foreign Government Bonds

Standard Oil Stocks

Bank and Trust Co.

Common Stocks

Stocks

Foreign Exchange

Private Wire Connections

Chicago

Philadelphia

Boston

Baltimore

Detroit

Toledo

Milwaukee

Minneapolis

Toronto

St. Louis

St.

Paul

Montreal

Cleveland

Washington

Winnipeg

BANKERS AND BROKERS

are

invited to avail themselves of

our

Exceptional Facilities

•

......

•

"•

•

••

.•

-.v.

•«

'■

■Y'-.-

/ - \

' •••

•

Foreign Exchange
and correspondents of
leading European banks we
are
in an exceptional position to
execute orders for checks and cable
A S agents

■

transfers

especially for

Y<-Y

■

(

YY :Y'.'' Y%Yv.'.:'.::,:V

Polish. Marks
Austrian

Kronen

Hungarian Kronen

Czeeho-Slovakian Kronen

"•

! -1.

Y-

■

:•

Jugo-Slavian Kronen
■.

offer

We
banks

and

trust

special facilities for
rectly

on our

•'

•

companies
checks di¬

accounts abroad.

;;.i:

■

!
•

PACAT FINANCE
CORPORATION
42

•
.

BROADWAY, NEW YORK

■

•

■
.

■

Middle States Oil
Corporation
^■1

'L'r';

Producer of Crude Petroleum

Capital stock outstanding, $8,600,000; par value $10.
Daily settled production, over 7,000 barrels; flush production
varies

widely, but brings the daily average well above this

amount.

Gross

earnings in 6 months to June 30, 1920, $4,560,448, com¬

pared with $20,588 in 6 months beginning March 1, 1917.
Net

earnings, after reserves for Federal taxes, in 6 months to
June 30,1920, $3,545>38o, equivalent to $4.54 a share on the

$7,800,000 stock then outstanding.
DIVIDENDS AND STOCK ALLOTMENTS
In July, 1918, $1,000 par value of Middle States stock purchased for
$1,250 and held to date gives the following dividend and stock allot¬
ment

results:

Cash Div.

v-.-.,,''Vv

Money $10.00

Aug. 1, 1918
K

Nov.
Dec.

Jan.
Feb.

$40.00 Par.

Stock

$83.00

Stock

$89.00

Stock $121.00

Stock

$133.00

Stock $146.00

Stock

10.40

Sept.
Oct.

■

Stock

10.40

10.60

11.23
11.23

1919
a

11.23

Mch.

12.07

Apr.

12.12
a

May
June
July
Aug.
Sept.
Oct.

12.32

13.33
tt

13.33

13.63
a

14.66

Nov.

14.66

Dec.

Jan.

15.26

1920

16.12

Feb.

16.12
«<

Mch.

1652

$322.00

19.74

Apr.

After April 1,

1920, cash dividends made

quarterly and increased
July

16%

$78.96

1920

118.44

Oct.

$475.70

Stock

annually
Stock $987.00

Listed

$1921.00

New York Stock Exchange

Inquiries invited:

Address Dept. F. C.

Middle States Oil Corporation
347 Madison

Avenue, New York City

STRAIGHT

METHODS

LINE

Your Facts and Your Figures
Credit is the expression of trust—the belief in a

his financial

obligations.

In business,

man's abilitv to meet

in all human relations, trust

is the

inspiration to large accomplishments.

merchant, credit is largely

But to

the

exact science.
may

Only

facts, deducted from, and supported by, figures

own.

Safety, these days, is the
is the

judge.

new

Your facts and your figures are

and

able to present them—clearly, fully?

figures.

well

his guides—

only laws.

Are you

The Banker

law of business preservation.

In extending credit he must follow conservative as

constructive policies.

his

and collections.

matter of rating

the Banker safely extend the credit desired—safely for your welfare,

safely for his

Banker, in the financing of business, credit must be an

They

vital

are

your

You cannot avoid facts

business,

and con¬

protective

structive.

Thru
thru

monthly Balance Sheets, Operating Statements and, above all,
well-planned Business Budget, showing close observance and

frequent checking,
in the

you

make the laws which your Banker must

obey

granting of credit.

In this

connection, the

ERNST & ERNST
offer

superior service.

They

by trained experts—men

are

applied to

particular business

your

thoroughly versed in the principles of Ac¬

counting and Cost Finding, with long experience in
lines of

business, nation-wide in

They

scope.

are

many

and varied

operative individu¬

ally and collectively in 25 cities.

ERNST & ERNST
AUDITS
TAX

SYSTEMS

SERVICE

NEW YORK

CHICAGO

CLEVELAND

CINCINNATI

NEW

PHILADELPHIA

MINNEAPOLIS

BUFFALO

INDIANAPOLIS

DALLAS

ORLEANS

BOSTON

ST. PAUL

PITTSBURGH

TOLEDO

FORT

PROVIDENCE

ST. LOUIS

DETROIT

ATLANTA

HOUSTON

WASHINGTON

KANSAS CITY

GRAND RAPIDS

RICHMOND

DENVER

STRAIGHT

LINE

METHODS

WORTH

Giving

Correspondent Really

Personal Service in
I

T is for you to say whether the service of your New York Banking
shall be mainly routine or truly personal and intimate.
The Bank of the Manhattan

Comp any has always prided itself

New York
CAPITAL, $5,000,000

Connection

SURPLUS

on a

knowledge of the loChl situation in which its correspondent operates.

UPTOWN
Union

This

knowledge enables

assurance

that

are

give to our correspondent the very comfortable
all times acting with full knowledge of the factors

us to

involved.
It enables

us to

It enables

give

often

prompter service

give

lean backward because of lack of

than is usually offered.

liberal service.

a more

are never

precise information.

and

obliged to

UNDIVIDED

PROFITS, $16,146,49430

thorough

OFFICE:

Square, New York

OFFICES IN QUEENS BOROUGH:

Jamaica, Flushing, Long Island
City,
Far
Rockaway,
Rockaway
Beach, Seaside, Richmond Hill,
Elmhurst, Corona, College Point,
Woodhaven,
Ridgewood,
Fresh
Pond.

BROOKLYN

OFFICES:

St. John's Place and Cypress Hills

For 121 years
and

commercial
entire

the Bank of the Manhattan Company has been engaged in
industrial banking.
Its experience covers practically the

period of American

progress

STEPHEN BAKER, President

and finance.

RAYMOND

Company is big enough to provide you all the
in New York.
v;

First

The Bank of the Manhattan

facilities of banking

JAMES McNEIL, Vice-President
B. D. FORSTER, Vice-President
HARRY

■C Yet it is

never so

large

to lose sight

of the value of

single account.

When

give

correspondence, we do so knowing that we shall be able
business the personal understanding and attention of our Officers.

invite your

your

HALL, Vice-President

EDWIN S. LAFFEY, Vice-President
P.

E. JONES

Vice-President

ROWLEY, Vice-President
D. H. PIERSON, Vice-President
FRANK L. HILTON, Vice-President
V. W. SMITH, Vice-President
JOHN STEWART BAKER,
Vice -Presiden t

Bank of

the Manhattan Company

PAYNTER,

Cashier

MOORE, Ass't Cashier
I. S. GREGORY, Ass't. Cashier
H. M. BUCKLIN, Ass't Cashier
W. A. RUSH, Ass't Cashier
GEO. S. DOWNING, Ass't Cashier
E. S. MACDONALD, Ass't Cashier
O. G. ALEXANDER, Ass't Cashier
W.

Established 1799

Wall Street

The American Audit

Company

PUBLIC ACCOUNTANTS

Investigations

Audits

Examinations

F. W. LAFRENTZ,

C. P. A.

President

HARRY M. RICE,

A. F. LAFRENTZ

C. P. A. (Ga.)

Secretary and Treasurer

Vice-President
CHAS. W.

GOETCHIUS

Manager, Bank Examination Dep't
Home
100

Office

BROADWAY, NEW YORK
Branches

YORK, 33rd St. and Fifth Ave.
CHICAGO, Marquette Building
WASHINGTON, Colorado Building
NEW

PHILADELPHIA, Bellevue Court Building
SCRANTON, County Bank Building
NEW ORLEANS, Maison Blanche Building

BOSTON, Post Office Sq. Building
ATLANTA, Fourth NatT. Bank Bldg.
RICHMOND, American Nat'l. Bank Building
BALTIMORE, Garrett Building
MILWAUKEE, Loan & Trust Building
LOS ANGELES, Herman W. Hellmau Building

LONDON, ENGLAND

IMMlMIIiM

t
MAIN OFFICE:

EQUITABLE BUILDING
120

BROADWAY, NEW YORK

FIFTH AVENUE OFFICE:

580 FIFTH

LONDON OFFICE:

AVE., Cor. 47th St.

THREADNEEDLE ST., E. C.

DIRECTORS

COLEMAN

du PONT, Chairman

LE ROY W. BALDWIN, President

WILLIAM O. ALLISON

WILLIAM C. HEPPENHEIMER

JULES S. BACHE

ROBERT E. JENNINGS

WILLIAM

MINOR C. KEITH

A. BARBER

C. VANDERBILT BARTON

PERCY R. PYNE, 2nd

F. DONALDSON BROWN

H. P. ROBBINS

WILLIAM

CHARLES M. SCHWAB

A. BRADFORD

•

PHILIP DE RONDE

ALFRED P. SLOAN, Jr.

WILLIAM H. ENGLISH

THOMAS F. SMITH

HENRY S. FLEMING

HENRY P. TALMADGE

AUGUST HECKSCHER

CHARLES H. ZEHNDER
==

This

Company is the Fiscal Agent of the State of New York for
the sale of Stock Transfer Tax

Stamps

BOLAND & PREIM
FOUNDED

1852

Complete Financial
Service
CONSERVATIVE
In All Parts of the World

INVESTMENTS
Built up
est

over many years

earn¬

devoted effort.

Tested in

every

detail by time and

experience.

Ready

serve

promptly and

efficiently.

EQUIPMENTS

(RAIL C81, MARINE)
RAILROADS

Investment Securities
Letters of

MUNICIPALS

Credit
Travelers'

IND USTRIALS

Checks

Foreign Exchange
Domestic

and

Drafts and

Foreign Collections

Money Orders

Knauth Narliou ocKuiiur
MEMBERS

NEW

Equitable

YORK

STOCK

Building,

EXCHANGE

N£w

York

25 BROAD STREET
NEW YORK CITY

of NWYorlc
Total 'Resources

than

HARVEY D.

$125,000,000

GIBSON, President

DIRECTORS
JAMES L.
FRANK

ASIILEY,

Treas.

BETHELL,

JOSEPH A.
EDMUND

DOUBLEDAY,
H. DUNHAM.

HENRY J.

FULLER.
D.

THOMAS

LYMAN

New York
Ingersoll-Rand Co.
Pres. Hercules Powder Co.
Vice Pres. Fairbanks, Morse & Co.

GIBSON,
GILLESPIE,
HILLES,
Vice

HINE

FREDERICK

EDWARD

LOOMIS,

II.

Co.

President.

JEREMiAH
EDWARD

GRA YSON

MILBANK,

HVOSLEF,

MacNEILL.

MAXWELL,

President.

Chairman, T.
Pres.

A. Gillespie Co.
Dwight & Hilles.

American

Cotton

Oil

Co.

Bennett. Hvoslef & Co.
Pres. Lehigh Valley R. It. Co.

|
President, Utah Copper Co.
Vice Pres. Atlas Portland Cement Co.

Foreign

New

MOORE

CONVERSE,

HARVEY

CHARLES

Nickel

White Oil Cori.oration
Vice

GFIORGE
RUSSELL

International

Vice Pres.

BOWER.

York.

New York.

MURPHY,

Foreign Commerce Corp. of America.

President

ALEXANDER R. NICOL. Pres. Atl.,
ALEXANDER V. OSTROM,

DAKflEL E.
SEWARD

POMEROY*,

PROSSER

DANIEL G.

G. & W. I. S. S. Lines.
Vice President
Vice Pres. Bankers Trust Co
President, Bankers Trust Co.

REID,

CHARLES

Vice

President.

Vice

President.

RIECIvS,

President Guaranty Trust Co.
SABIN,
E. A. CAPPELEN SMITH,
Guggenheim Brothers.
ERNEST STAUFFEN, JR.,
Vice President.
CHARLES H. STOUT,
New York.
CHARLES H. WARREN,
Treasurer Mutual Life Ins. Co.

Government

Bonds

Josephthal & Co.
120

Broadway

New York

PHONE RECTOR 5000

Members
New

PRIVATE WIRES TO

York Stock Exchange

PRINCIPAL

ALDRED
40

c o.

&
NEW

Wall Street

CITIES

YORK

CITY

CORPORATION

•

FINANCING

■nmnmB.mniwm.m.mat.mnmMm.niiiiiuil.timniniiiiiiiniiiimiiiiiiuiHnwillllMlliifflllillllllitinilllllllHItllffllUglllltllllllfli

SECURITIES

INVESTMENT

—iiMtininiiiiniininnniifniifiiriimmminTTtmiiimiTmnnmimTnitmimimimiimiiiinnniniTmiimimninnntnTimTmiimiTiT

New

Members
and

York,

Boston

Stock Exchanges

Chicago

Direct Private Wires to All

Principal

Markets

BOSTON

NEW YORK

CHICAGO

PROVIDENCE

PORTLAND

DETROIT

ESTABLISHED

MAC

QUOID & COADY

MEMBERS OF THE NEW YORK STOCK

Tels. Rector

14 WALL STREET, N. Y.

EXCHANGE

9970-9975

STOCKS AND BONDS

Bought and Sold for Cash

Carried

Conservative Terms

Department for execution of orders
in

unlisted

and

inactive

securities

George H. Burr & Co,
Commercial Paper
Investment Securities

120

New York

Broadway

Boston

Pittsburgh

Scranton

San Francisco

Chicago

Philadelphia

St. Louis

Hartford

Richmond

Los Angeles

Atlanta

Dallas

Cleveland

Seattle

Portland, Ore.

SOLICIT
For

v"■,

i: V;

CORRESPONDENCE

the Purchase and Sale of

MUNICIPAL

■

R.
31

BONDS

GRANT & CO.

Nassau Street
NEW

Devonshire

YORK

314

Street

BOSTON

North
ST.

Broadway

111

West

LOUIS

Monroe

Street

CHICAGO

Municipal Bonds
EXEMPT FROM ALL FEDERAL

We specialize in the
and

Municipal

issues

Our

■

purchase and sale of Government

Bonds.

Communities

latest

r
.

revised list

•

TAXES

Our diversified
in

all

of selected

parts

issues sent

•

list

includes

the

country.

request

upon

•
.

•

William R.fompton Company
NEW YORK

INVESTMENT

BONDS

14 Wall Street
■'

CHICAGO
105 S. La Salle Street

ST. LOUIS

Compton Bldg.
NEW ORLEANS
203 St.

Charles

St.

CINCINNATI
305 Union Trust

Bldg.

FOLDS & CO.

HATHAWAY, SMITH,
45

Wall Street, New

PHILADELPHIA

CLEVELAND

HARTFORD

BOSTON

SCRANTON

RICHMOND

SEATTLE

SAN FRANCISCO

DENVER

ST. LOUIS

MINNEAPOLIS

CHICAGO

York

PITTSBURGH

ATLANTA

DALLAS

PORTLAND

WHY PUBLIC UTILITIES PROSPER
One of the

leading operators has prepared

showing why

some

Public Utility Companies

Sent upon request.

Broadway, New York

article

prosper.

Ask for pamphlet CF-355

A. H. Bickmore &
111

Company

Shawmut Building, Boston, Mass.

CHARTERED

J 853

Doited Sidles Trust Soiany ol lew Toil
45

and
-1

CAPITAL

47 WALL STREET
-

SURPLUS AND UNDIVIDED PROFITS

EDWARD W.
WILLIAM

FREDERIC
CHARLES

WORCESTER,
W.

ROBBERT,
EDWARDS,

...

JOHN

Rockefeller

Lyman

John J.
Lewis

Phelps

Cass

Ledyard

ROBERT

GREEN,

WILLIAM

Secretary.

Frank

PELL,' Vice-President.

Secretary.

WILLIAM G.

William

SHELDON, President.

Assistant Secretary.
Assistant

$14,616,928.30

KINGSLEY. First Vice-President.

WILLIAMSON
WILFRED J.

$2,000,000.00

OSBORNE,

LEE,

THOMAS H. WILSON,

Assistant

Secretary.

Assistant Secretary.

RUSTEES

A. STEWART

Chairman of the Boar it

Lyman J. Gage

Arthur Curtiss James

Cornelius N.

Payne Whitney

William M.

Henry W.

3£dward W.

William

Sheldon

Chauncey Keep

Kingsley

Stewart

Tod

Bliss, Jr.

de Forest

William Vincent Astor

Ogden Mills

William Sloane

No. 374

THE FIRST NATIONAL BANK
OF JERSEY CITY, N.J.

Capital, - - - - - - Surplus and Undivided Profits,
Deposits, - - - - - -

-$1,376,653.66

$400,000.00

$13,613,497.34

OFFICERS

EDWARD I. EDWARDS. President

ROBERT E. JENNINGS, Vice-President

HENRY BROWN, Jr., Cashier

JACOB R. WORTENDYKE, Asst. Cashier
DIRECTORS

Charles

Siedier,

George T. Smitn,

*
-

Robert E. Jennings,

Henry E. Niese,

Arthur G. Hoffmann

Edward L. Young,

Edward I. Edwards,

Lyman N. Hine.

OFFICERS

COLUMBIA
WILLARD

TRUST

BENJ.

COMPANY

Trust

FRED

ALLEN,

MARSTON,
L

Vice-President

CURRAN,

KIMBALL,

JUDD

JOHN

Officer

IN.

HAZELTINE

Trust

HARRIS
WILLARD

MASON

Trust

SAMUEL

Harlem Branch

Asst.

MILLERD

MORGAN

WILLIAM
V.

TERRY

BERRY

FRED

DALY

Manager
ALFRED

DOBBIN

ATKINSON

Assistant

Manager

Treasurer

WEISS

HARRY

FURMAN,

Assistant Manager

Secretary.

Assistant

Assistant Trust Officer

CARROLL

Bronx Branch

Officer

Assistant

ELFB

Manager

Assistant Manager

Secretary

Assistant

Assistant Trust Officer

Assistant

ATKINS

Trust

ARTHUR

Officer

BAKER

HERBERT

Vice-President
Vice-President

KANE,

HENRY

Manager

Treasurer

DUNN,

SPERRY

Officer

SPEDON

Trust

MELVILLE

Auditor

VERNON

Uptown Office

Officer

Secretary

Assistant

KELLY,

JR.

MATTHEWS,

Assistant

WAGSTAFF,

HERBST

Treasurer

Assistant

PFIZENMAYER,

Vice-President

FREDRICK

Secretary

Assistant

RIDER,

Foreign Department
STERN,

Controller

WOLFF,

HUTCHINS,

MILLS,

COLSSON

Treasurer

WARREN

Trust

Assistant

Manager

ORRIN

Assistant

OLIVER

Vice-President

Department

Assistant

Vice-President

ARTHUR

HOWARD

WALTER

EARLE

ARTHUR

CHARLES

President

Vice-President

GEORGE

NEW YORK

GEO.

KING,

BATNE,

ROBERT

HOWARD

DIRECTORS
CHARLES H.
of

Chairman

Copper

ALLEN

Jj.

BENJ.

Vice-President

Board

the

GEORGE

Company

Best

HOWARD
Vice-President

the

Seaboard

UNION

Redmond

New

A.
President

BAYNE
National

JOSEPH

Bank

Co.,

Ins.

New

Charles

Barney & Co., Bankers
BARTON HEPBURN

Chairman

Corporation

CARLTON

President

Co.

Bank

National

Chase

WILLARD

the

Sachs

Tucker,

Blair

Peters,

White

Bankers
TUCKER
Co.,

A Co., Bankers
WALKER

FREDERICK

Company

Bankers

STRAUSS
A

Anthony
ELISHA

President

KING

Co.,

Sellgman

WILLIAM

O*.

Law
SACHS

FREDERICK

Law

Pennsylvania

ARTHUR
Goldman

J. HORACE HARDING
Co.

C. ROGERS

Attorney

Bankers

Co.,

York

NOAH

GIFFORD

Attorney

Sugar

Pres., Western Union Telegraph

Estate

AUGUSTUS G. PAINE, JR.
Pres't

Law

at Law
DELANO

Bankers

MARLING

Real

Banker*

Service Corp.

Jersey
LEHMAN

Brothers,

ALFRED

COTTON

Brothers

JAMES

CARLTON

Holly

NEWCOMB

Lehman

KUSER

New

PHILIP

JR.

CORNELL

MOREAU
Brown

Life

CLARK,

Attorney

BUCKNER

York

Attorney at

York

THOMAS
Vice-Pres.

Weld

EDWARD

Q. BROWN
Co., Bankers

Corporation

Dodge & Co., Bankers
BENJAMIN CLARK

White,

Company

BETHELL

N<?w
FRANKLIN

Public

Vice-President,

HAROLD

Co.

BAYNE

SAMUEL
President

Pasco

Cerro

CRAWFORD

Clark,

ANCELL IL BALL
President

ANTHONY

CLARK

EDWABD

KEEP

Co., Inc.,
W.

Bankers

WHITE

Company, Chemicals

MEMBER OF THE FEDERAL RESERVE SYSTEM

Bank and Bankers'

Acceptances

Bought and Sold

F. S. Smithers & Co.
ESTABLISHED

1857

19 Nassau Street

New York

INVESTMENT

BONDS
New

SECURITIES

HERRICK
■M embers

New

York

New York

Foreign

State

City

Government

BENNETT

York

66 BROADWAY

City

Stock

Exchange
NEW YORK

BRANCH OFFICE: 51

EAST 42nd STREET

The Other Fellow's

Viewpoint

In the

handling of correspondent accounts it is of the utmost import¬
appreciate the other fellow's viewpoint.
This is especially
true when the two institutions are
widely separated and prompt,
independent action must be taken without the opportunity of

ance

conference.

;•

Y.•".■•c"-

Our dealings with and for our correspondents are featured by a
constant effort to sense their wishes and to
anticipate their require¬
ments

far

possible.

other

way

believe full service

be rendered.

can

Financial institutions,

Corporations and

individuals seeding New Yor\ connections
are
invited to write us for particulars.

UNITED .STATES

MORTGAGE 6JRUST COMPANY
Capital and Surplus $6,000,000
NEW YORK
Member of
Federal Reserve

Member of

System

ESTABLISHED

BANKERS AND

Y. Clearing House Assn.

I860

BROKERS

Equitable Bldg., 120 Broadway,
Members New York

New York

Stock Exchange

ESTABLISHED 1882

J. S. FARLEE & CO.
66

BROADWAY, NEW YORK

INVESTMENT SECURITIES

Specialists in Bonds
and

Slow

New

Securities

Securities for Conservative
Investment Always on Hand

England and Pennsylvania Securities—Special Attention
27

Dependability
in

Banking Service

important
by the depositor
DEPENDABILITY in banking service has always been the
problems
factor that is demanded

his funds and business

making

and

with

invites

your

financial

one recognized

bank in handling

nature.

banking connection it should be done with the greatest care,
of the record and standing of the institution which

consideration

your

business,

well

the service it is able

render

you.

The Seaboard National Bank with

a record of
thirty-seven years of practical
banking, with resources of more than seventy million dollars,—offers you a bank¬
ing service that is dependable, broad and comprehensive in its scope and especially
adapted to meet your every particular financial requirement.

The

Seaboard

National

of the City of New York
Capital, Surplus and Profits Over Five Millions

Bank

THE

Goal

Iron National Bank

and

OF THE CITY OF NEW TORI

Capital

Surplus and
Resources

$1,500,000.00

Profits

over

1,590,770.00

(Earned)

26,000,000.00

JOHN T. SPROULL, President

ADDISON H. DAY, Cashier

DAVID

WM. H. JAQUITH, Asst. Cashier

TAYLOR, Vice-President

ALLISON DODD,

WALLACE A. GRAY, Asst. Cashier.

Vice-President

A. A. G. LUDERS,

Trust Officer

New York Clearing House

Member

Association

BOND &

Commercial Paper

Acceptances and Investment
Securities

BOSTON

SAN FRANCISCO

PHILADELPHIA

NEW YORK

SEATTLE

PITTSBURGH

CHICAGO

PORTLAND, ORE.

ATLANTA

MINNEAPOLIS

LOS ANGELES

BUFFALO

HARTFORD

SUTRO

KANSAS CITY

BROS.

CO.

BANKERS
120

BROADWAY

NEW

57 ST.

YORK

FRANCIS XAVIER ST.
MONTREAL

DOMESTIC AND FOREIGN SECURITIES

FOREIGN EXCHANGES

LONDON AGENTS:
LONDON COUNTY, WESTMINSTER & PARR'S BANK
UNION

BANK OF SCOTLAND, LTD.

NATIONAL

PROVINCIAL

AND

UNION

BANK

ENGLAND

RAPHAEL &

SPECIAL CORRESPONDENTS IN
PHILADELPHIA
SAN

SONS

FRANCISCO

THE BATTERY PARK NATIONAL BANK
OF

CAPITAL

AND

SURPLUS

N EW

YORK

$3,000,000

OFFICERS

Elias A.
r.

Lima,

DIRECTORS
Edward

President

c. coenee,

Vice

Caehabt,

Vice

Merry,

S. Baiz

President

Elias

Vice

President
Bros. &
President

Corner

Lima,
George M. Dexter,

President

Frank

Asst.

Fuelling, Jr.,

c.
A.

Cashier

Carpenter, Inc.
Dillingham, Rounds, Hatch, Dillingham &

Edward

Asst.

George

Cashier

Edward Flash

Flash, Jr.,

Frederick

Cashier

Asst.

c. Probst,

William

Hasleb,

Zellers,
de

Asst.

Lima,

Cashier

William

Whitney & Co.
Bodman

& Co.

Mailer &

Ring,
Romer,
George F. D. Trask,

Manager Foreign Department

Milmine

Kemp,

Welding

Co.

Hasler Bros.

Hay,

Alfred

Ernest A.

Co.

Dexter &

Debevoise

Asst.

Geo. S. Talbot,
Wm.

Carhart,
C. Corner,

Richard

Cashier

Quereau
Company
Colonel, United States Army
Willcox, Peck & Hughes
Shults Bread

Willcox,

MERRILL, LYNCH & CO.
120

Broadway

NEW YORK
Members New

CITY

York Stock

Exchange

COMMERCIAL
Bonds

Notes

Detroit

Chicago

PAPER
Stocks

Denver

Los

Angeles

A. D. Converse &, Co.
PHILADELPHIA,
COMMERCIAL TRUST BLDG.

Information

for

guidance of

in¬

vestors is

NASSAU
NEW

STREET,

YORK

BALTIMORE,

CITY

GARRETT

BONDS

Our Statistical Dept.
is

the

service

AND

always

available.

BLDG.

banks, trustees and

PREFERRED

individuals.

SHARES
INDUSTRIAL AND PUBLIC

UTILITY

SECURITIES
Codes: Western

Cable Address:
"Adconco"

Diversified list of offerings furnished

application.

Union

Montgomery
Hartfield

U NION EXCHANGE NATIONAL BANK

o/'NEW YORKo,
AVE-.fi" 21st- ST.^ J
Commercial Bank

SYDNEY H. HERMAN, President

GEORGE B. CONNLEY, Cashier

LOUIS J. WEIL, Vice-President
FRANK

WILLIAM MINTON, Ass't Cashier

WHEELER, Vice-President

ARTHUR D. WOLF, Vice-President

EDWARD J. DONAHUE, Ass't Cashier

EXCHANGE

FOREIGN

DOMESTIC AND FOREIGN

AND

LETTERS OF CREDIT

ACCEPTANCES

ISSUED

DEALT IN

Cf)E panfe of flmteb States!
MEMBER FEDERAL RESERVE SYSTEM
OFFICES:

FIFTH AVENUE AT 32nd
77-79

STREET

LIABILITIES

RESOURCES

Cash in Vault and in

Liability

Customers
ances..

........

...

116th Street

September 30, 1920

United States Government Bonds
and Other Investments
Loans and Discounts.

Avenue

Madison

Delancey Street

.....

$759,839.84

Unearned Discount..

...25,114,300.03

Banks......
...

Accrued Interest Receivable.

5,228,683.63

penses

Deposits.

550,687.05

....

37,248.04

.;.

for

Reserved

Accept¬

on
....

Capital.............. $1,500,000.00
681,861.69
Surplus and Undivided Profits..
Taxes,

225,526.61

............

28,464,239.14

and Dividend.........
.

....

...

250,718.74

.......

Interest Ex¬
.

None

Bills Payable and Rediscounts
Acceptances Outstanding.......

568,412.40

$31,690,758.58

$31,690,758.58
OFFICERS

JOSEPH S. MARCUS, President
BERNARD K. MARCUS,

Vice-President

HERMAN J. RASENER, Assistant Cashier

■

EDWARD ROSS McELRATH, Assistant Cashier

HENRY MECKAUEIi, Vice-President
CHARLES A. HORNE.
LOUIS

Vice-President

OLIVER I. PILAT, Credit Manager

P. F. W. AHRENS,

Manager. Foreign Department

DIRECTORS
MAX H.

FRIEDMAN. J.

Friedman & Co.

SADOWSKY, President R. Sadowsky, Inc.

STEPHEN

J. HOFFMAN, Vice-Pres. Totacco Products Corp.

GEO.

HENRY LOEB

STEPHANO, Stephano Bros.

STORM,

Razor

Corp.

MAX WEINSTEIN.

PHILLIPS
President

Safety

GEO. C. VAN TUYL, JR.. Banker

MARCUS. Vice-President

I. L.

Board.

Chairman
American

J. S. MARCUS, President
B.

Co., Inc.

SAUL SINGER. Singer Bros. & Day

GILMAN. I. Gilman & Co.

H. PLANTEROTH, Assistant Cashier

K IIYDE, Cashier

Weinstein Bros. Coat House, Inc

Philips-J ones Corp.

The

Bank

Mutual

West 33rd Street, New York

49-51

CHARLES A. SACKETT,

President

HUGH N. KIRKLAND, Vice-Pre.ident & Culler

EUGENE GALVIN, Assistant

~
,

Cashier

D 1RECTORS

Richard

Delafield, Chairman

Otto M. Eidlitz

A. P. W.

Kinnan

Charles S. McVeigh

Thomas F. Vietor

Joseph H. Emery

Hugh N. Kirkland

Charles A. Sackett

Isadore

Saks

Dominick & Dominick
ESTABLISHED 1870
MEMBERS

BONDS

the

NEW

YORK

PREFERRED

STOCK

EXCHANGE

STOCKS

NOTES

New York

Cincinnati

115 Broadway

Wiggin*

Block

Canadian
Government and
Our lists
and

comprise the highest grade Municipal

Government

Municipal Bonds

Bonds

obtainable

Canada.

Correspondence invited.

Wood, Gundy & Co.
INCORPORATED

14 Wall
Toronto

Montreal

Street, New York

London, Eng.

Winnipeg

Saskatoon

A. E. MASTEN & CO.
BROKERS
Members New York Stock

Stock

Exchange,

Chicago

Exchange, Boston Stock Exchange, Pittsburgh
Stock

Exchange,

New York Cotton

PITTSBURGH, PA.

Chicago

Board

Trade

Exchange

Branch Office: Wheeling, W. Va.

HENRY L. FINCH

WILBUR S. TARBELL

WM. C. WILSON

■

FINCH & TARBELL
Members of

the New York Stock

Exchange

New York

Equitable Building, 120 Broadway,

BONDS

AND

STOCKS

Bought and sold for cash, or

carried

conservative terms

on
I

■

unlisted securities

Inactive and

Inquiries Invited

•

Changing Business Conditions

HIIMILJON TRU^I

demand

|#%Co)pjjNy

if the

and banks

men

best interests of each are to

served.

l91Montague St
Brooklyn,flEv/York City

between

co-operation

business

This bank's

policy has been one
co-operation in times of
business
depression
and
of
prosperity.
Our counsel has
of

Allows Interest

Accounts Subject to

RATES

SPECIAL

Acts

Profits, $1,550,000.

and

Surplus

Capital,

TIME

Check

been of value

DEPOSITS

Executor and Trustee

customers

our

busi¬

and

solving banking
problems.

ness

OFFICERS
Willard E. Edmister,
C.

Walter

John

Anderson,

Hadden,

George

We
you toinvite
con¬

President

Robert

Jos.

officers

our

Vice-Pres.
3d

Vice-Pres.

Girling,

with

fer

1st Vice-Pres.

Humstone,

Hecker,

George

& Sec.

FIRST

Sec.

Asst.

Jr.,

Pierce,

Sec.

Asst.

BANK

NATIONAL

Sec.

BROOKLYN

TRUSTEES

Established 1852
Edwin

George

Ames.

John

David

Charles E.

Bushnell

Willard

Alvah

Creem

Ecker

JOHN

Miller

Edmister

WILLIAM

Frank Sullivan Smith

Assistant

IRISH

VERITY

Cashier

AUSTIN

WILLIAM
Trust

IRISH
Cashier

TOBEY,

Assistant

Vice-President

ANSEL

Meier Stelnbrick

Cashier

Assistant

RUSSELL C.

WEBER

Vice-President

Frederick H. Webster

Folger

KRUEGER

FRED.

President

Frederick H. Pouch

Davenport

Frederick

OFFICERS
HUBER

JOSEPH

John C. McGuire

Charles Cooper
Daniel

Keator

Lafrentz

Charles J. McDermott

Chllds

Eversley

Butcher

Broadway and Havemeyer St

Humstone

Walter C.

Anderson

Ezra

Hadden

Jr.

Cashier

J. AIIERN
Officer

Kings (Emttthj (Trust dnmgang
342 to 346 Fulton

Street, Borough of Brooklyn, City of New

York

Surplus, $2,000,000.00

Capital, $500,000.00
Undivided Profits, $862,000.00
OFFICERS

JULIAN

WILLIAM
THOMAS

FAIRCHILD

J. WASON,
BLAKE

JULIAN D. FAIRCHILD, President
vice-president

vice-president
secretary

I
I

HOWARD D. JOOST
J. NORMAN CARPENTER
BROWER & BROWEIt

BROWER,

secretary
trcst officer
counsel

asst.

Kings County Trust Company offers to its Depositors every facility and accommodation
modern Banking.
If you are not already availing yourself of the advantages offered by
this Institution, the Kings County Trust Company will be glad t6 have you open an account.
The

known

brooklyn

^ yy:

;

trust company'

CHARTERED 1866

Capital

Surplus

$1,500,000

$2,600,000

Resources
$50,000,000

Member of the Federal Reserve System and the New

AND TRUST SERVICE

COMPLETE BANKING

Main Office

Bedford Branch
1205 Fulton

York Clearing House Association

Manhattan Office

90 Broadway, at Wall St.

177 Montague St.

St., at Bedford Ave.

TRUSTEES
L.

Frank

St.

Walter

George

John

Benedict

Boocock

Francis

II.

David

Lanman

Henry

Legget

Noybs

II.

Rossitbb

Alexander

Robert

Pratt

Frank

Munson

Frank O.

David

Doehler

Clinton

Maxwell

Maynard

Edwin

Hinb

Howard

Jr.

Goetzinger

Harold

Lyman

Frank

Dykman

Emanuel,

Martin

Cullen

Herman

William

Boardman

Samuel
Edgar

Babbott

Walbridgh
D.

Willis

Pierreuont

Tuttle

White

Wood

OFFICERS
P.

Edwin

Maynard

President

Lanman

David II.

Vice-President
Frank

wlllard

„

•

gilbert

sciienck

Charles

h. tliirkield

Assistant

Jr.

McDonald,

Horace

Frederick

Fakrell

Assistant

Secretary

Assistant
Charles

Secretary

Herbert U.

Aldridge

Assistant

Vice-President

Edmund

Silleck

Schmjdt

Assistant

Secretary

Frederic

Secretary
Westcott

Secretary
Cole

Assistant

Vice-President
Frederick

Royoh

Benjamin

Lindsay

Assistant

Secretary

Diller

Vice-President
Willis

Secretary

Secretary
Cortis

Auditor

Secretary

Foreign Credit Corporation
30

Acceptors and International Bankers

UNDER

SUPERVISION

Condensed

■

NEW YORK

PINE STREET

Statement

FEDERAL

RESERVE

September

Cash

Collateral

•

Hand

LIABILITIES

Capital

Securities

Sundry

Loans

and

Belgian

$5,805,131 60
Banks....

447,038.20

Reserves

192,590.54

for

558,040.81

Taxes, Interest, etc.

351,656.17

11,260.03

11,582,026.01

Acceptances

Anticipations

Acceptances.......... 7,887,201.41

Obligations

and

a/c

$28,967,487.85

The
States

local

War

Finance

88,693.91

Cor¬

13,995,598.24

tance

Letters of Credit & Acceptances..

Corporation
and

abroad,

Credits

offers merchants in the United
either direct or through their

domiciled

New

STOCKHOLDING

by means of Accep¬
York

Central

foreign

Chase

banking centers, of financing their transactions, in
the various stages of progress, arising out of the
exportation

tions ;
sistent

importation

Commercial

Letters

all other
with

lines

anty

foreign

Union

delphia

collec¬

of international banking

tion

con¬

National

Boston ;

BANKS

Company, New York;

Bank,
of

Corporation,

National

Pittsburgh.

the scope of the Corporation's business.

Trust

Trust Company

Securities

merchandise.

Credit;

7,887,201.41

$28,967,487.85

Opened for business September, 1919.

bankers, a simple method,

74,437.28

Loans........

Acceptances

poration

♦

1,000.000.00

....
........

Deposits as Security for

arising frour Exports
&

Profits

Credits

Sundry

Customers Liability a/c Letters of
Credit

.$5,000,000.00

....

Undivided

Government... 3,053,500.00

Debits

...

Surplus

Receivable

Notes

1920*

18,

RESOURCES
Bankers' Acceptances
and

BOARD

New
New

York;
York ;

QuabLiberty

New York ; Phila¬
Shawmut Corpora¬
Union Trust Company of
Bank;

THE CONTINENTAL TROST COMPANY
BALTIMORE, MD.

Invites the Reserve Accounts

of State Banks and Trust

Companies

Facilities

Exceptional

for

Handling Bill of Lading
Drafts and other
Collections

CAPITAL, $1,350,000

SURPLUS,

1,350,000

Correspondence Invited
CONTINENTAL TRUST

BUILDING

DAVIES WARFIELD, President

JOHN

EDWARDS
INVESTMENT

COMPANY

SECURITIES

WASHINGTON

RICHMOND
A.

NEW YORK STOCK EXCHANGE

MEMBERS

^ WASHINGTON STOCK EXCHANGE

;

—direct Private Wires TolAll principal Markets

RICHMOND STOCK EXCHANGE

1426

NEW

YORK

WASHINGTON,

NORTHWEST

AVENUE,

L. STOCK

D. C.

CO., Inc.

Investment Securities

Washington, D. C.
'

♦

OFFER

INTERNATIONAL FINANCE CORPORATION
of
9

Washington, D. C.

%
Cumulative Preferred Stock

8% Collateral Trust Notes

Otis & Co.
CLEVELAND
New York

Boston

Toledo

Akron

Detroit

Youngstown

Cincinnati

Denver

Columbus

Colorado Springs

Members of

New

York,

Boston,

the New

Chicago, Cleveland,

York Cotton

BONDS

Columbus

and

Detroit

Stock

Exchanges,

Exchange and the Chicago Board of Trade

ACCEPTANCES

STOCKS

FIDELITY AND COLUMBIA

II; TRUST COMPANY
of LOUISVILLE, KENTUCKY
A

:SPECIAUZED

COMPANY THAT
IN TRUST MATTERS

Capital
$2,000,000

Surplus and Undivided Profits
$890,000

The National Bank

HAMILTON
NATIONAL

of Commerce

BANK

NORFOLK, VA.

CHATTANOOGA, TENN.

Capital
$1,500,000

CAPITAL

$1,000,000

Surplus
and

Surplus and

Profits

$800,000

$1,300,000

MBfci

Resources Over

WE INVITE
YOUR

$19,000,000
Our

'ACCOUNT

Collection Facilities
Are

OFFICERS

Unsurpassed

NATHANIEL

BEAMAN, President
TAYLOR, Vice-President
COHOON, Vice-President
ROBERT P. BEAMAN, Cashier
A. E. WHARTON, Asst. Cashier
C. S. PHILLIPS, Asst. Cashier
F. J. SCHMOELE, Asst. Cashier
J. H. FANSHAW, Auditor
%
TAZEWELL
R.

Prompt Service and Reasonable Rates
T. R. PRESTON, President

G. H. MILLER, Vice-President
C. M. PRESTON, Vice-President

S. A. STRAUSS, Cashier
D. S HENDERSON, Asst. Cashier
E. B. SHADDEN, Asst. Cashier-Auditor

JNO. STAGMA1ER, Vice-President
J. B. F. LOWRY, Vice-President

D. B. HARRIS, Asst. Cashier

L. B. LOCKWOOD,

W. E. HARRELL, Asst. Cashier

MARKED FEATURES

Manager Bond Department

MISS LULA A. STRAIN, Secretary to Board of Directors

Send

your

Promptness, Courtesy, Safety and Reliability

Tennessee Items

Resources

over

$22,000,000.00

and

Charles

Streets

Lexington

BALTIMORE, MD.
VAN, LEAR
BLADEN

SAMUEL

LOWNDES,

HANN, 2nd

RICHARD E.

...

..rr..

..;r.

Vice-Pres.

BLACK,| President

ALFRED

General

Treasurer.

Vice-Pres. and Secretary

HARLAN,

WARFIELD, Trust Officer
,
Treas. and Asst. Se£ y
SCOTT, Asst. Sec'y and Asst.

HOWARD

GEORGE L. MAHLER.

Vice-Pres.

HANSON, Vice-Pres.

J. H. BEATSON,
HENRY

1st

Counsel

,■

STROTT, Assistant Secretary.
WERNSING, Asst. to 1st. Vice-Pres.

HOWARD

EDWARD

v.,-,.

DIRECTORS

black

van lear

President

camden

sprigg d.
Pres.

Dep. Co., Parkersburg,

Un. Tr. &

cAarles
Vice-Pres.

Lt.

Gas Elec.

Con.

& Power Co.

fisher

howell

Hayward Co.

Bartlett

Vice-Pres.

W. Va.

m. cohn

frank

solomon

Capitalist
frank

Corporation

gibbs, jr.

john

furst

The Arundel

Gibbs Preserving

henry

Co.

harlan

Lawyer

house

william

Capitalist

joseph p. kennedy
P.

w.
Vice-Pres.

Foundry Co.

Kennedy
bladen

lowndes

Second Nat'l

B'k, Cumberland

mandelbaum

seymour

Capitalist
gustavus ober, jr.

Company

Sons

Ober &

john walter smith
United

Senator

States

warfield

george

Capitalist

Coal

fidelity

charles

and

sts.,

Operator

thomAs

building

lexington

Fidelity

Pres.

baltimore.

watson

clarence

a. whelan

Deposit

and

of Md.

Co.

Acts
Safe
on

as
Executor, Administrator, Guardian and Trustee, Manages Estates and Collects Incomes, Rents
Deposit^oxes and Receives Valuables on Storage, Does a General Banking Business.
Interest Allowed

Deposits.

Issues Letters of Credit and Travelers' Checks.

•

BANKING, INVESTMENT, TRUST, REAL ESTATE AND FOREIGN DEPARTMENTS
AT

BUSINESS

SEPTEMBER

30,

1920

RESOURCES
Stocks
Loans

Cash

and

Bonds

and Discounts

9,112,241.40

in Vault and Depositories

2,570,863.65

Due from Customers under Letters of Credit

Total

$6,724,856.46

132,390.56

$18,540,352.07

LIABILITIES
-

Capital Stock
Surplus and Undivided Profits
Deposits
Liability under Letters of Credit

1,805,939.62
15,602,021.89
132,390.56

$18,540,352.07

Total

$1,000,00.000

UNITED

STATES

AND

GOVERNMENT

IN/IUIMIOIRAL.

BONDS

high-grade

RAILROAD,

PUBLIC

OTH E1R

UTILITY

AND

CORPORATION

SECURITIES

ESTABLISHED

--L

VAL-UEI

ISSUES

SOUTHERN

offerings

solicit

investment

garrett

SPECIALTY

corre:sronde:nOe:

invite:

we:
and

of"

sound

propositions

building

ROBERT GARRETT &
established

1840

BANKERS

INVESTMENT

BALTIMORE

BALTIMORE TRUST COMPANY

THE

25 EAST BALTIMORE
CAPITAL

STREET, BALTIMORE, MD.
SURPLUS AND PROFITS $2,460,000.00

$1,000,000
Does

general banking and fiduciary business

Credit extended commercial and
cantile customers based

Loans

mer-

made

collateral,

merchandise in transit

statements

including

storage,

of condition.

purchase for

securities

well

our

account entire issues

utility corporations.

industrial

We also purchase

and

Through

our

public

the obliga-

tions of States, Cities, Counties, etc.

own

established

Bond Department this Institution is at all times prepared to give

expert advice on any matter

pertaining to investment securities.

Correspondence and interviews invited
WILLIAM INGLE

ALLEN
G.

ROY

President

H. GALE

Treasurer

TURPIN

Vice-President

MASON

Vice-President

HOWARD N.

MUELLER

Vice-President

ROBERT L. GRAFFLIN

BRADLEY
W.

HAYS

FENHAGEN,

Jr.

LEEKE

Assistant Treasurer
Secretary

•

Assistant Secretary

39
.

CHARTERED

f 864

SAFE DEPOSIT AND TRUST COMPANY
|

■■

BALTIMORE
13 SOUTH STREET

Capital,

Surplus and Profits

:■?

$4,400,000

over

Acts

as Trustee of
Corporation Mortgages. Fiscal Agent for Corporations and Indi¬
viduals, Transfer Agent and Registrar. Depository under plans of reorganization.

Acts
as
Executor, Administrator, Guardian, Trustee, Receiver, Attorney and
Agent, being especially organized for careful management and settlement of estates
of every character.

Fireproof building with latest and best equipment for safety of contents.
Safes for rent in its

lighted

coupon

Securities held

•

large fire and burglar proof vaults, with spacious and well
for use of patrons.

rooms
on

deposit for Out of Town Corporations and Persons.

DIRECTOR S
H.

WALTERS,

WALDO

JOHN J.

Board

NEWCOMER

NORMAN

ISAAC

Chairman

SAM'L

JAMES

CATE

ANDREW
H.

President
SHOEMAKER

GAMMIE, Treasurer
K.-TUCKER, Assistant Treasurer
BOSLEY, Assistant Treasurer
ARTHUR C. GIBSON,
Secretary
WILLIAM R. HUBNER, Assistant
Secretary

NATIONAL

GARRETT

JENKINS

Assistant Secretary

STROBEL,

ROLAND

GEORGE

PAUSCH,

Officer

Estate

Real

Cashier

MILLER, Assistant

Auditor

1804

MARYLAND

BALTIMORE, MARYLAND

Capital, $1,000,000

Resources More Than

PHILLIPS LEE
E.

OPIE,

UNION BANK

ESTABLISHED

EOLIS

ROBERT

GEO.

ALBERT

JOHN W.

THE

JOHN W. MARSHALL, Vice-Pres't

SPAMER, 2nd Vice-President
LEE, 3rd Vice-President
KIRBY, 4th Vice-President

JOSEPH
GEORGE

NELLIGAN.

BLANCHARD RANDALL
ELISHA H. PERKINS

••

$10,000,000

GOLDSBOROUGH, President

BOISSEAU' Vice-President
CREAMER, Assistant Cashier

WALTER

HORACE

W.
R.

BEERS, Cashier

FORI), Assistant

Cashier

DIRECTORS

Philips Lee Goldsborough, President*
Wm.

Edward
&

Marburg, Capitalist

H. Crawford

Black. President

of the

Howard,

Curzon

connections

for

Hoffman,
&

Railway

Gill

Sterett

Co.,

Jr.,

Iron,

Steel

collecting

AND

items

balances

Morgan,

Franklin

Vice-President,
Baltimore

White,

P.
&

Cator

Ward

Attorney-at-law

CORRESPONDENCE

Bank

Boyer

Co.

and

Albert
H.

McKim,

Savings

Merchants

Supplies

John

Attorneys-at-law

ACCOUNTS
Excellent

Lumber

Inc.,

Hoffman

Edwin G. Baetjer, of Venable, Baet-

Gill, of William

Son,

Edmund

Black, Sheridan, Wilson Co., Coal

jer

Cator,

Co.

Bruce,

Hay-

Bartlett

The

Co.

SOLICITED

Southern Atlantic Coast Cities and
maintained by
correspondents with us.
on

Armstrong,

States, at rates depending

upon

MARYLAND TRUST COMPANY
N. W. Corner Calvert and Redwood Sts., Baltimore,

Md.

Capital, $1,000,000
TRANSACTS A GENERAL TRUST AND
L,

BANKING BUSINESS

OFFICERS

Zimmerman, President
Van Ness, Vice-President
Spencer, Jr.,

Robertson

Griswold,

Garroll

Jervis

Vice-President

Vice-President d
James

Treasurer

Geo.

Secretary &

Bird,

Trust

Asst.

Officer
Treasurer

Collars, Asst. Secy & Asst.

Treat.

DIRECTORS
E.

Bankard

Albert

Robert

Frank

Berney

Donaldson

Garrett

Howell

Robertson

Gunther

Theodore

Richard

Griswold,

Gwinn

Richard

John

Brown

Hill

Carroll

Van

Jr.

Griswold

Barry

Mahool

Wilbur

John

James

G.
L.

Herbert

Miller

Arthur

Henry

Rouse

Sellman

Correspondence and Interviews Invited

A.
G.

Straus

Thompson

Ness

Wagner
Wellington

Wilcox

Zimmerman

lhe

National

Exchange Bank

Baltimore, Md.
Capital $11500I000

Profits

$1,000,000

over

WALDO NEWCOMER
President

SUMMERFIELD BALDWIN

PAUL A. SEEGER

Vice-President

CLINTON G. MORGAN

JOS. W. LEFFLER

Vice-President

WM. R. WEBB

Cashier

Asst. Cashier

THE

National Bank of Baltimore
Chartered

1795

"THE OLDEST BANK IN MARYLAND"

Capital, Surplus and
Undivided Profits
Deposits
•'

$2,550,828.73
14,161,243.03

....

Resources

11:..

21,691,968.82
OFFICERS

T.
DEPOSITORY OF THE UNITED STATES,
OF

MARYLAND, CITY

Intimate

Rowland Thomas,

Snowdbn

President

john schoenbwolf.

STATE

BALTIMORE

Vice-President
William

Hoff.

Asst.

Cashier

Theodoee N. Austin,
Asst.
R. Rossiter Rever,

j. Delcheb, Cashier

Cashier

Asst.

OFFICERS

Knowledge of

John M.

Southern Conditions

President
C.

Burnett

Vice-President

gained thru an experience of over half a
century, spent
in
the
development of this
territory, makes valuable a connection with
this strong institution.

Alex.

Ryland

Bates,

Ryland

Vice-President

CAPITAL

Jr.

Vice-President
James

$2,000,000.00

Parker

Assistant

$1,500,000.00

Tyler,

John

J.
■'V'ry
i'J" i

iT'l?'*

%')

imVkWI
?r

i&kni./

:f;| i

i'K'- I
'

•!

H.
S.

RICHMOND, VIRGINIA

Auditor
W.

Pubcell
Trust

Cashier

Tbevvbtt

♦

1
Thos.

Cashier

augustine

Assistant

Cashier

Bowles

Assistant

Cashier

Haw

Assistant

$35,000,000.00

Cashier

Jr.

Assistant

RESOURCES

FIRST NATIONAL BANK

Ball, Jr.
Cashier

SURPLUS

The

Miller, Jr.

Officer

Pittsburgh
PENNSYLVANIA

CAPITAL, SURPLUS AND UNDIVIDED PROFITS

$38,000,000.00
Transacts

General

Trust

Banking and

Company

Business

OFFICERS

McELDOWNEY

ANDREW W.
J.

•

SCHOONMAKER

SCOTT
JOHN

HAYES
A.

IRWIN

EDWARD
L.

WYLIE SMITH
A.

RALPH

2nd Asst. Secretary

•

3rd Asst.

HILL

4th Asst. Secretary

DAVIS

GRINSTEAD

DAVID

Assistant Secretary

BERRYMAN

CARROLL

Assistant Treasurer

ROBINSON

FLORENCE J.

•

Secretary

Trust Officer
Trust Officer

Asst. Trust Officer

PARKINSON
EULER

Treasurer

Assistant Treasurer

WM.

Vice-President

CARR

WM.

CHURCH

Vice-President

.....

CREDE

JAMES S.

Vice-President

President

Vice-President and Secy.

HARVEY EVANS

LIGGETT

Vice-President

•

...

•

MELLON

Auditor

Manager Bond Department

DIRECTORS
JAMES H.
W.

BEAL

HARRY

BROWN

J. FREDERICK

BYERS

BENJ.

JONES,

PHILANDER
JAMES

Jr.

KNOX

LOCKHART

LEWIS A.

PARK

HOWARD

PHIPPS

DAVID

CRAWFORD

ARTHUR V.

DAVIS

ANDREW W.

MELLON

RICHARD

MELLON

GEORGE

HENRY C.

FOWNES

CHILDS FRICK

LOCKHART

McELDOWNEY

WILLIAM
M.

BEED

GEORGE W.

SCHILLER

SCHOONMAKER

FRANK

SHAW
WALLACE

Cleveland
fifth

American

among

value of its. manufactured

draws

cities

the

products.

materials from all the world,

raw

and the world is.its market.

Banks and bankers
land

connection

the

qualifications

which

provides

requiring
invited

are

of
ample

this

Cleve¬

consider

institution
and

resources

complete facilities for handling banking
transactions of every
This

Bank

Trust

one

and

Company

Cleveland

UNION

0}
under

are

ownership

Banking

Unit

COMMERCE

fhCational cBanf^

forming

largest

the

kind.

The

Savings

Citizens

and

CLEVELAND

Ohio.

What Do Our Out-of-Town Correspondents
We think it is Protection and Service.
of proven

worth attests to
Let

The

Emblem

THE

Service

your

PEOPLES

Fifty-five

Pittsburgh business

BANK

NATIONAL

LYON, SINGER & CO.
INVESTMENT
■'

■

Securities of the

•;

•'

•

'BANKERS
'

V..

■

'•,

;

Pittsburgh District—General Market Bonds-

Pennsylvania Municipal Bonds.
COMMONWEALTH

BUILDING

years

We have it.

our statement.

PITTSBURGH, PA.

Resources, $31,000,000

handle

Want?

PITTSBURGH

The Real Estate Trust
of

Co.

Philadelphia

Broad

and Chestnut Streets

CAPITAL

$3,304,700

Solicits Deposits of Firms,

Is
fully
in its

Trust Company,
and Safe Deposit Departments

equipped to handle all Business pertaining to a
Banking, Trust, Real Estate

S. Buckley, Jr., Treasurer

George H. Earle, Jr., President
S. F. Houston, Vice-President

William R. Philler, Secretary
John A. McCarthy, Trust Officer

Edgar Fetherston, Asst.

Treasurer Edw. Y. Townsend, Asst. Trust Officer
Directors

George H.Earle, Jr.

Sullivan

James F.
Cyrus H. K. Curtis

Samuel F. Houston

William A. Patton

/• Levering Jones

George Woodward, M.D.

Louis J. Kolb

Bayard Henry

J. Wallace Hallowe 11-

John Grtbbel

Gustavus W. Cook

Philadelphia,

Pa.

U. S.

Specializ

Liberty Bonds and Victory Notes

u. s.

Free of Normal Federal Income Tax
State and

Member

Boles

Municipal Taxes

Federal

Reserve

System

Westwood

MEMBERS PHILADELPHIA STOCK EXCHANGE

investment
securities

LAND TITLE

BUILDING

PHILADELPHIA

The Oldest Title Insurance

Company in the World

The Real Estate Title Insurance and Trust
of

Company

Philadelphia

Broad Street Office. 45 Sol Broad
(Lincoln Building)
INSURES TITLES
EXECUTES TRUSTS
BECOMES SURETY
RECEIVES DEPOSITS
RENTS SAFE DEPOSIT BOXES*
523

Chestnut St.,

(Opposite

Independence

Hall)

Philadelphia Clearing House

Member of the

Surplus and Undivided Profits, $3,400,000.00

Capital, (Full Paid), $1,500,000.00
FRANCIS A. LEWIS
President

DANIEL HOUSEMAN
Vice-Pre*. and Treasurer

JAMES R. WILSON
CHARLES S. KING
Vice-President
Secretary and A*«t. Treasurer
AARON L. DEETER
WILLIAM McKEE, Jr.
Asst. Trust Officer
Asst. Manager, Title Department

JOHN H. FAIRLAMB
Asst. Treasurer

JEREMIAH N. ALEXANDER
Aaet.

OFFICERS

A. KING DICKSON
Vice-Prea. and Truet Officer

Secretary

DIRECTORS

A- Stevenson

Howard

Charles

Welsh

Trust Funds

Charles T. Quln
Charles E. Heed
John A. Rigg

WlUlam Wood
Samuel M. Freeman
Frank H. Mobs

H. Shelmerdlne

William

kept separate and apart from

Owen J. Roberta
George McCall
Isaae W. Roberts

Walter A. Rigg
Henry M. DuBola
Francis A. Lewis

Assets of Company

$19,514,066.19

FIDELITY TRUST COMPANY
PHILADELPHIA

Surplus $16,000,000

Capital $5,200,000

Pays

Interest on

Executes Trusts of

Deposits

Every Description

Securities and Valuables Taken for
Wills

Safely Kept Without Charge

WILLIAM
J.

GEO.

GEST,

Wee-President

NEFF,

KYD,

Safe Keeping

President

LITTLETON,

McMORRIS,

JOS.

Treasurer

Vice-President
Secretary

DIRECTORS

GEST

EDWARD

WALTER CLARK

JENKS,

JONATHAN C.

EDWARD T. STOTESBURY

WILLIAM

JOHN

NEFF

CHARLEMAGNE TOWER

BIDDLE

HENRY W.

SIDNEY

TYLER

DANIEL

WENTZ

MORRIS
G.

JR.

BOCKIUS

COLESBERRY

SAMUEL T.

PURVES

JOSEPH

WIDENER

BODINE

INCORPORATED 1871

GUARANTEE TRUST

AND

SAFE DEPOSIT CO.
"WEST-PHILA. BRANCH
.

CHESTNUT STREET

■,

CENTRAL BRANCH

PHILADELPHIA

.1415

SAMUEL F.

HOWARD
Treasurer

JOSEPH

and
K.

Assistant

ARTHUR M.

H. »

HOUSTON, President

YOUNG

J
Secretary

BORDEN
Secretary

9 South 52d St

HARVEY

JENKINS

C. B. ZTTVTMKRTJNG
Asst. Trust Officer

Treasurer

Assistant

GOODALL,

Treasurer

Street

VLe«-President
WILT/I AM

Assistant

Trust Officer

THOMAS

Assistant

JESSE S. SHEPARD

Chestnut

JAMISON

Treasurer

STEVENSON

EASBY

Superintendent of Vaults

•

Fourth Street
..

•

National

Bank

PHILADELPHIA

$3,000,000

Capital

Surplus and Profits....
E. F.
R.

8,000,000

SHANBACKER, President

J. CLARK, Vice-President and Cashier

C. F. SHAW, Jr., Ass't Cashier

HARDT, Vice-President

G. E. STAUFFER, Ass't Cashier

HUMPHREYS, Vice-President

W. A. BULKLEY, Ass't Cashier

MacNICHOLL, Ass't Cashier

•

■

■'

'■

■

'•

'■

■

•

;

•

;

■

■■

Frazier

•

Co.
1

Broadway

19 South Street

PHILADELPHIA

BALTIMORE

NEW YORK

•

WASHINGTON

■

Broad and Sansom Streets

•

WILKES-BARRE

LEBANON

Harper & Turner
Investment Bankers

Stock

Building

Exchange

Philadelphia
530

Spruce

439

Street

Scranton

Street

Penn

Reading

West End Trust

Company

Broad Street and South Penn

Square

PHILADELPHIA, PA.

$4,000,000

Capital and Surplus

Receives
Acts

Sells

Foreign

Letters

Maintains

and

Deposits

Executor, Administrator, Guardian, Trustee, Agent

Exchange,

Credit,

Travelers*

Express

Checks

Up-to-date Safe Deposit Department

Storage Department for Trunks and Packages

Manages Real Estate, Collects Rents,

etc.

Lends

Money

Approved Collateral Security

We Shall Be Glad

Serve You

LYBRAND, ROSS BROS. & MONTGOMERY
ACCOUNTANTS AND AUDITORS
Members of American Institute of Accountants

Offices:

NEW YORK

BOSTON

PHILADELPHIA

PITTSBURGH

CHICAGO

WASHINGTON

DETROIT

Agencies:
SAN FRANCISCO

KANSAS CITY

NEW ORLEANS

A
This bank
Act.

LOS ANGELES

SEATTLE

DALLAS

LONDON, ENGLAND

Typical Precedent
was

the first bank chartered under the National Bank

It issued the first National Bank Note in the United States.

National Banks and National Bank Notes
stone of

the national financial

ship in their inauguration
institution is

are

today

a corner¬

The assumption of leader¬

structure.

many years ago

by the founders of this

typical of the sound policy that has

ever

since controlled

the administration of its affairs.

First National Bank
Philadelphia

315

chestnut

WM. A.

street

LAW, President.

KENTON WARNE, Vice President

CHAS.

HARRY J.

CARL H. CHAFFEE, Assistant Cashier.

HAAS, Vice President.

THOS. W. ANDREW,

Cashier

HOWARD

JAMES, Assistant

Cashier.

SORDON, Assistant Cashier.

SAMUEL McCREERY

FRANK C. McCOWN, Jr.

M-Cown

Co.

INVESTMENT BANKERS
Members

Philadelphia Stock Exchange

inquiries on all Listed and Unlisted Securities.
Specialize in Pennsylvania Tax Free Securities

We solicit

Land

Title

Building, Philadelphia

Direct Private New York

Telephone

PHILADELPHIA
COMPANY

TRUST

$1,000,000

Capital,

4,000,000

Surplus,
Trust Funds,

Henry G.

Frank

165,000,000

Brengle, President

John C. Wallace, Treasurer

Hardt, Vice-President

T. Ellwood Frame,

Henry L. McCloy, Secretary

Vice-President
Nelson C.

Denney, Trust Officer
DIRECTORS

Samuel M. Vaudain

Ledyard Heckscher

William W. Frazier

J. Franklin McFadden

Benjamin Rush

Edward T.

Thomas S. Gates
^
Adolph G. Rosengarten
Edward Roberts

J. Howell Cummings
Henry G. Brengle

Broad and

Chestnut Streets

John

Story Jenks
Stotesbury

Levi L. Rue
W. W.

Atterbury

415 Chestnut Street

Northeast Corner

PHILADELPHIA

Arthur H. Lea

oanKers

INVESTMENT

SECURITIES

GOVERNMENT

MUNICIPAL, RAILROAD AND
PUBLIC

SERVICE CORPORATION

BONDS

CHESTNUT ST.

306

PHILADELPHIA

Commercial Trust

Company of New Jersey

Jersey City, New Jersey
Capital, Surplus and Profits
GENERAL

BANKING
AND
TRUST
BUSINESS
INTEREST PAID ON CHECK ACCOUNTS

$3,500,000

over

FOUR

PER

POSITED

CENT.

INTEREST

SPECIAL

ON SAVINGS DEDEPOSIT DEPARTMENT

OFFICERS:
JOHN

HARDENBERGH,

WILLIAM

J. FIELD, Vice-President
MORGAN, Vice-President
•
ALBERT I. DRAYTON, Vice-President
JAY S. PERKINS, Sec'y and Treas.
ROBERT S. CARMICHAEL, Asst. Sec'y- and Asst. Treas.
JAMES

President

J. HENRY CASTENS, Asst. Treasurer
CHARLES L. DECKER, Asst. Treasurer
S. LEROY HETRICK, Asst. Secretary
LYMAN H. OPDYCKE, Asst. Secretary
EDWARD HENN, Asst. Secretary

SAFE DEPOSIT VAULTS AT MAIN OFFICE AND FIVE CORNERS BRANCH
MEMBER FEDERAL RESERVE SYSTEM
MEMBER NORTHERN N. J.

CLEARING HOUSE

PATERSON

NATIONAL

BANK

PATERSON, N.J.
a

United States and State Depository

Capital

$300,000

$675,000

...

$5,000,000

Surplus and Profits
Deposits
Hon.

over

JOHN W. GRIGGS. Pr«d«t

ELMER Z HALSTED. Vice-President
Collections

our

Specially.

DANIEL H. MURRAY, Cwhw

Quick remittances and small charges

ACCOUNTS AND CORRESPONDENCE

•

WILLIAM M. TUTTLE, Asrt. Cashier

INVITED

COMPANY

THE PLAINFIELD TRUST
PLAINFIELD, N. J.

Capital, Surplus and Profits, $750,000.00
organization insure efficient service.

strong

Resources

$10,000,000.00
OFFICERS

Waring, President
Augustus V. Hekly, Vice-President
H.

and

connections

broad

institution's

This

F. Irving Walsh,

Asst. Sec'y-Treaa.

Pond, Vice-President
Adele H. Kibby,
Hubbell, Sec'y & Treas.
H.
Douglas Davis, Asst.
Secretary
Russell C. Dobbingeb, Asst. Treas.

Asst. Sec'y-Treas.

DeWitt

MORRISTOWN TRUST COMPANY
Morristown, Morris County, N. J.
MEMBER FEDERAL

RESERVE SYSTEM

$1,035,000

CAPITAL, SURPLUS AND PROFITS
WILLIAM

BOULTON,

DEPOSITS.

$7,500,000

President

DIRECTORS

President

WILLIAM B. BOULTON
G.

FRELINGHUYSEN
Counselor-at-Law, N. Y.

KAHN,
Kuhn, Loeb & Co., Bankers, New York

HENRY F.

TAYLOR

GRANVILLE

WHITNEY,

President, New

York Edison

Co., N.

J. &

Morrisiown, N. J.

Coggeshall & Hicks, Bankers, N. Y.

HENRY N.

Bankers, N. Y.

THE MECHANICS' TRUST COMPANY
BAYONNE

NEW

CARD
Vice-President and Secretary

NEW JERSEY

JERSEY

New Jersey that clears through the

New York Clearing House
DIRECTORS

OFFICERS

DE WITT VAN BUSKIRK,

CHRISTIAN B. ZABRISKIE,
FREDERIC C. EARL,

CHARLES S. NOE', Chairman
WILLIAM G. BESLER
JOSEPH BRADY

President

Vice-President

CHAS.

Vice-President

CHARLES

MAX M0RALLER, Secretary

DALY, Asst. Treas.

J. H. SIEBERT, Asst.

SLUTER
SNEDDON

RANDOLPH

Sec'y

JAMES
DE

Sec'y

WITT

BUSKIRK
ZABRISKIE

VAN

1886
Branch

Assets $12,000,000.00

EARL

HAMPTON

ALEXANDER J. HEMPHILL

CHRISTIAN B.

ORGANIZED

DANA

WILLIAM DONALD
FREDERIC

WILLIAM R. WILDE, Treasurer

W. J.

Gillespie & Sons, N. Y.

FRELINGHUYSEN

MURRAY H. COGGESHALL

STRAUSS

W. Seligman & Co.,

FREDERICK

GILLESPIE
L. C.

SABIN,
President, Guaranty Trust Co. of N.

Engineers, N. Y.

Only Trust Company In

H. B. CORIELL
Vice-President and Trust Officer

JOHN

HULL

Morristown, N. J.

CHARLES

Jr.

The Whitney Company,

NICHOLAS F. BRADY

Morrisiown, N. J.
A.

JOHN

WHITE

Vice-Pres., The Mutual Life Ins. Co., N. Y.
HARRIE

33d
Main

Office,

8th St., Bayonne

Offlee

STREET and

BROADWAY

Richardson, Hill & Co.
Established

1870

INVESTMENT SECURITIES

BOSTON

Members New York, Boston and

Chicago Stock Exchanges

BRANCH OFFICES

New Haven,

Conn

Portland, Me

SHAWMUT BANK

THE NATIONAL

OF BOSTON

OFFICERS
President

Chairman

ALFRED L. AIKEN

WILLIAM A. GASTON

Vice-Presidents

JOHN BOLINGER

NORMAN I. ADAMS

ADDISON L. WINSHIP

ROBERT S. POTTER

FRANK A. NEWELL

BURNHAM, Jr.

W. A.

FRANK C. NICHOLS

•

Cashier

JAMES E. RYDER

Assistant Cashiers

HENRY F. SMITH

WILLIAM S. TOWN

FRANK HOUGHTON

FREDERICK E. JACKSON

GEORGE H. S. SOULE

LEON H. WHITE

GEORGE E. FICKETT

EARL F. FILLMORE

ERNEST H. MOORE

EDWARD A. DAVIS

Auditor

CLARENCE E. DUNAVEN
■

•

•'

•

■

Assistant Managers,

FRANK H. WRIGLEY

The strong

and

its

'' '

•

" v*

■

•

Foreign Department

WILLIAM J. HARTNEY

position of The National Shawmut Bank in resources,
foreign and domestic connections, assure

extensive

complete and effective cooperation with

•.

correspondent banks.

RESOURCES FAR EXCEED $200,000,000

CO.

MEMBERS NEW YORK AND BOSTON STOCK EXCHANGES

15 State Street,

24 Broad Street, New York

Boston

"■

•

'
i

PROVIDENCE

SPRINGFIELD

International Trust
45

Milk Street

Company

Boston, Mass.

Capital $2,000,000

Deposits

over

$25,000,000

115 Summer Street
,

Surplus $2,000,000

WITH DIRECT CONNECTIONS THROUGHOUT THE NEW ENGLAND STATES THE INTERNATIONAL TRUST CO

PLACES AT YOUR DISPOSAL THEIR COLLECTION SYSTEM, ASSURING YOU OF PROMPT RETURNS
AND CREDITS.

CORRESPONDENCE INVITED.

MEMBER FEDERAL RESERVE SYSTEM'

OFFICERS
CHARLES

HENRY L. JEWETT, Vice-Pres.
A.

FRANCIS HAYDEN,

CLIFFORD

and

BANCROFT. President

A. EDWARD GARLAND, Asst. Secretary

Sec.

Vice-President

HOWARD NORTON, Asst. Secretary

GEORGE W. SHEPARD, Asst. Treasurer

WHITNEY. Treasurer
THOMAS

MEGAN,

Asst.

Secretary

BAKER, AYLING & YOUNG
Gas, Electric Light, Water Power

Bonds and Preferred Stocks
'

50 CONGRESS STREET, BOSTON

PHILADELPHIA

SPRINGFIELD

Coffin & Burr
INCORPORATED

Purcha sers
and

Distributers
of

Government,
and

60 STATE

Municipal, Corporation
Bonds

Service

Public

61 BROADWAY

STREET

NEW YORK

BOSTON

HOTCHKIN & CO.
■

•.

;

' i..

,■

STREET

STATE

BOSTON

Cable address TOCKIN

Tel. MAIN 460

SPECIALISTS

MILL STOCKS

Bank

Fourth-Atlantic National
OF

BOSTON

Capital

Resources

Surplus and Profits

$2,000,000

$41,000,000

$3,400,000

OFFICERS

RUSSELL

HERBERT

HALLETT,

PRESIDENT.

WILLIAM N.
VICE

PRESIDENT

ARTHUR
VICE

CASHIER.

HAINES,

PRESIDENT.

HANSCOM,

ASSISTANT

NATHAN

ASSISTANT

CASHIER.

DENISON,
CASHIER.

OFFICERS

GUSTAVE

BLEYLE,

ASSISTANT

CASHIER.

VAREY

PRESIDENT

VICE

EDGAR

SPEAR,

PRESIDENT.

VICE

CHARLES

HOMER,
AND

SAMUEL

ASSISTANT

MYRON

RUGGLES,
CASHIER.

ASSISTANT

LORD,

CASHIER.

Capital,

$1,500,000

Surplus and Undivided Profits,

•

nrrrstrr

$1,535,000

JSanfe & ®ruat (Enmjjattg
WORCESTER, MASS.

MEMBER FEDERAL RESERVE SYSTEM

WM.

LUEY, Chairman
ALVIN J.

Resources

JOHN E. WHITE, President

DANIELS, Treasurer

$33,000,000

over

SPRINGFIELD NATIONAL BANK
SPRINGFIELD,
HENRY H.

RALPH P.

MASSACHUSETTS

BOWMAN, President

ALDEN, Vice-President

PHILIP S. BEEBE, Asst. Cashier

WALLACE V. CAMP, Cashier

ERNEST J. WHEELER, Asst. Cashier

WINSOR B. DAY, Mgr.

Savings Dept.

Capital

$ 500,000.00

SURPLUS AND

UNDIVIDED

PROFITS.

DEPOSITS
Collections

1,000,000.00

9,000,000.00
Springfield and vicinity handled promptly and

One Hundred

and

low rates

Twenty-eight Years Old

Hartford-^tna National Bank
HARTFORD, CONN.

Capital $2,000,000

Surplus and Profits $2,800,000

C. E. CHASE, Chairman of the Board
F. P. FURLONG,

V.-PrestJ

A. SPENCER,

Jr., President

H. T. HOLT, V.-Prest.

A. G. BRAINERD, Cashier

W. S. ANDREWS, Asst. Cash.

E. M. CRAMPTON, Asst. Cash.

D. W. HUBBARD, Asst. Cash.

Total

Resources

Twenty Million Dollars

Birmingham

Co.

Trust &. Savings

BIRMINGHAM, ALABAMA
Organised 1887

Surplus (Earned) $700,000

Capital $500,000

OFFICERS

SMITH, President
BENSON CAIN,
TOM O. SMITH, Vice-President
C. D. COTTBN,
W. H. MANLY, Cashier
E, W. FINCH,
MACLIN F. SMITH, Trust Officer
ARTHUR W.

More Than

Aaa't Caahlet
Ass't Cashier
Ass't Cashier

Thirty Years in Business

Correspondence Invited

ESTABLISHED 1873

FORT WORTH,

TEXAS

Capital $600,000 ($200,000 earned)
Surplus and Profits $1,600,000
K.JM. VAN ZANDT, President
ELMO SLEDD,
R. E.

R. W. FENDER,

Vice Prest.

W. M. MASSIE,

H. P.

Vice Prest.

T. J. CALDWELL,

WE SOLICIT YOUR

v$;

■< . ,'\v .

Cashier]

SANDIDGE, Asst. Cashier

K. V. JENNINGS, Asst. Cashier

Vice Prest.

UNITED

Cashier

RAYMOND C. GEE, Asst.

HARDING, Vice Prest.

STATES

BUSINESS

DEPOSITARY

.> txi ^
k

THE FIRST

NATIONAL BANK

HOUSTON, TEXAS

CAPITAL, $2,000,000

G G. TIMMINS. Ass't Cashier

J. T. SCOTT. President
F.

J. L. RUSSELL. Ass't Cashier

M. LAW. Vice-President
W S. COCHRAN,

Vice-President

F. E. RUSSELL. Cashier
O. W.

WE INVITE

H. B. BR1NGHURST. Ass't Cashier

J. W. HAZARD. Ass't Cashier

JACKSON, Ass't Cashier

CORRESPONDENCE OF BANKS AND BANKERS DESIRING
FACILITIES FOR HANDLING COLLECTIONS ON THE

UNEXCELLED

STATE OF TEXAS.

ORGANIZED 1866

SURPLUS,, $500,000

The

Omaha National Bank
OMAHA, NEBRASKA
Established 1866

Capital

$1,000,000

...

Surplus (Earned)
Resources Over.
J.
WALTER

HEAD,

1,000,000

MILLARD,

Chairman

WARD M. BURGESS,

President

WILCOX, Vice-President

FRANK

ALVISON, Asst. Cashier

DALE

.30,000,000

................

CLARK, Asst. Cashier

BOYD,

Vice-President

CHANGSTROM, Asst. Cashier

EDW. NEALE, Asst. Cashier

\ Blankenhorn./
\ Hunter /
-

Dulin

\Co/

Investment Securities
We

'"'W

Specialize In

Pacific Coast
Municipal and Corporation Issues
Los Angeles

San Francisco
San

Pasadena

Diego

MORRIS BROTHERS, Inc.
The Premier

Municipal Bond House

Pacific Coast

Capital One Million Dollars

GOVERNMENT

AND

Municipal Bonds
A

MUNICIPAL BONDS

Specialty

Morris

Ground Floor, Central Building
SEATTLE, WASH.

Building, 309-311 Stark St.
PORTLAND, ORE.

Merchants Nat'l Bank

Fidelity Building

Building

SAN FRANCISCO, CAL.

TACOMA, WASH.

Ail Investment Service

Founded

Years' Banking Experience
In investment

substitute

for

matters

there is

seasoned

Investment

judgment

Department

Union Trust Company
Capital and Surplus *4.700,000
II South Dearborn St.

CHICAGO

Telephone Central 523

■
.

' '

•'

•

Merrill,Cox

& Co.

'
'

•

v,'V.

'•

:v"!

/•■'!•••'
'r'

•

'■

■

•

COMMERCIAL PAPER
COLLATERAL LOANS
INVESTMENT SECURITIES

CHICAGO

76 WEST MONROE STREET

PORTLAND

NEW YORK
ST. LOUIS

SAN

CHICAGO

OMAHA

ATLANTA

FRANCISCO

LOS ANGELES

CLEVELAND

DALLAS

11j» ^

BANKb||g
mm*

3" iSA ^ WWtfSS.fi K

liMvtaife-t

liiSfS,
||p£fc I'vHl

The First Wisconsin lor

Milwaukee Business
To

banks situated elsewhere the First
Wisconsin
National Bank offers exceptional service
throughout
Milwaukee and the state.

Our
ments

facilities

are

adequate

of modern day

long made it

meet

the

banking routine, and

practice

to co-operate

dite the business of our
colleagues in the

require¬
we

with and

have
expe¬

banking world.

First Wisconsin
national bank
Milwaukee

Boettcher, Porter & Company
INVESTMENT BANKERS

denver

colorado

BOSWORTH, CHANUTE & CO.
Municipal and Corporation Securities
Ground Floor Corner—17th and California Streets

DENVER, COLO

Responsibility of the Pioneer

The

The pioneer in any activity has
opportunity. It is his duty and
ideals upon which his business shall
an

both a responsibility and
privilege to establish the
be developed in the years

to come.

Company was the pioneer trust company

The Union Trust
of Detroit.

Nearly thirty years ago,

when this City was but
was organized to meet

one-fifth its present size, this Company
the local needs for such an institution.
For

sibility

quarter of a century it has grown apace with
of the community, always mindful of its respon¬
pioneer to the city and the state which it serves.

over a

the progress
as a

Company invites you to

The Union Trust

make use of the

facilities which it offers.

(Sompang

Union

Jletrott.TJKcbiapn
HENRY M. CAMPBELL,
Chairman

Board of

Directors

FRANK W. BLAIR,
President.

Municipal Bonds

I>etrohTrhst Company.

Bond Department

DETROIT,

MICHIGAN

THE MICHIGAN TRUST COMPANY
GRAND RAPIDS, MICH.

Capital

$200,000

LEWIS H. WITHEY,
HENRY
F.

Surplus Earned
JOHN

President

GORHAM, 2nd Vice-Pres.

Acts as
etc.

Money

Property.

Secretary

NOYES L.

Secretary

AVERY, 2nd Asst. Secretary

Vice-Pres.

Executor, Administrator, Guardian,
Loans

SCHOUTEN,

$1,250,000

EMERSON W. BLISS, Asst.

IDEMA, 1st Vice-Pres.

CLAUDE HAMILTON, 3d

Real

Audits books.
other

Estate.

Trustee, Receiver, Assignee,
Takes entire charge

Has High Grade Bonds and

Securities

for sale.

Wayne County
and

Home Savings Bank

Harris, Small & Lawson
Investment Securities

Detroit, Michigan

Congress St.,W

Detroit

Organized 1871

Capital $4,000,000

Surplus $5,000,000

Total Assets Over

$90,000,000

OFFICERS

CHARLES
Julius H.

Hugh

Burns

President

Gxobgb

Assistant

Wiley

Wm.

Assistant

Moore

Lyman

Vice-President
Wii.

Geo.

Johnston

Assistant

Eckert

Chas.

Assistant

Loch

Geo.

Rupert

Vice-President
Plbtsch

George

Geo.

Pippeb

Frank

Vice-President

*■

Assistant
John

MUNICIPAL, INDUSTRIAL,

Cashier

PUBLIC UTILITY AND

Burns

Cashier
J,

Cashier

Grosfielii

Assistant
Geo.

Cashier

Buhrer

Assistant

Johnstone

Cashier

Northrop

Vice-President
Arthur

DISTRIBUTERS

Cashier

Vice-President
J.

Rosier

Assistant

Green

Edwin

AND

Cashier

McClenahen

Vice-President
W,

UNDERWRITERS

COLLINS, Chairman

Haass

Cashier

RAILROAD

Schmitt

Auditor

Assistant

Cashier

BONDS AND NOTES

DIRECTORS
A.

Lem

Albbecht
W.

Leo

Ohas.

Wm.
Fred

Croul

Green
H.

Y.
l.

Orla

George

McGregor

Mebcieb

Moore

INQUIRIES INVITED

Phelps

Grant

Haass

Ralph

Donaldson

Jenks

John

Collins

Holden

James

Guenther

Julius

Chas.

Burton

Butzel

Frank

John

James

Bowen

Clarence

Race

Seyburn
Stephens
B.

Taylor

'Wiley

THE PEOPLES

STATE BANK.
Member Federal Reserve Bank

OFFICERS
JAMES T.
JOHN

Resources Over

KEENA, Chairman of the Board

STALEY,

A. H. MOODY,
President

Cashier
D.

SCHULTE,

SWEENY,

Vice-President

$140,000,000
Capital and Surplus
$12,500,000

JOHN

Assistant
D.

BODDE,

Assistant Cashier
WILLIAM

BORGMAN,

BRAASCH,

Vice-President

Assistant Cashier
G.

SMYLIE,

BEASLEY,

Vice-President

R. T.

Assistant
CURTIS C.

CUDMORE,
Vice-President

CHARLES H.

I. NORMAN,
Manager Bond

AYERS,

RODERICK

Department

GEORGE T. COURTNEY,
Auditor

WING,

Assistant to

Cashier

BOGAN,
Assistant Cashier

Vice-President
AUSTIN E.

Cashier

LEUTY,

Vice-President

President

FRASER, Manager Foreign Department

DIRECTORS
Russel

George H. Barbour

Fred W. Hodges
J. C. Hutchins

James t.

John

Alger

Barbour
R.

Bodde

Colburn

DuCharme

Borgman

Campbell

Frank J.

Hecker

Ledyard

Robert
Fred

Keena

Mason

Moran

Fred t.

Murphy
Murphy

Howie

Muir

Truman

New¬

berry
Hugo Scherer
F.

Schulte

Angus Smith
R. W. Smylie
John W. Staley
Homer
W.

Warren

Russel

The Canadian Bank
ol Commerce
IF YOU
IN

INTERESTS

HAVE

and

CANADA

banking connections

require
we

can

offer unexcelled facilities and
an

for

organization

experienced

transaction

the

your

business.
523 BRANCHES

IN CANADA

and Newfoundland.

Branches

Francisco, Seattle,

San

Portland, Ore., London, Eng.,
Mexico

City, Havana, Cuba,

Kingston, Jamaica.

RESERVE FUND $15,000,000

PAID-UP CAPITAL $15,000,000
TOTAL ASSETS (as at 30th

September 1920)

NEW YORK
16

■

F. B.

FRANCIS

$472,372,187

AGENCY

Exchange Place
AGENTS:

C. L. FOSTER

C. J. STEPHENSON

We invite correspondence.

ii"^
BRANCHES

THE ROYAL BANK
■JAMAICA
k

OF CANADA

ftipggtonftlottff,.—

...v. ■„-

CANADA

f
^<MCit*ang1IacEtQlj|

iwsiisswtfi«M±52i

698

NEWFOUNDLAND)

WEST INDIES
cemv

CUBA

•

PORTO RICO

OOMINICAN REPUBLIC
HAm

BRITISH WEST INDIES
FRENCH WEST INDIES

CENTRAL ft SOUTH AMERICA
ARGENTINA, BRAZIL 8 URUGUAY

COLOMBIA

VENEZUELA

BRITISH GUIANA

BRITISH HONDURAS

COSTARICA

UNITED STATES
NEW YORK CITY (IS Willitm
llj

EUROPE
LONDON V,uifltl£.t
PARIS (7$ Ku» ¥»

Omn-tt^tvAn) 1

BARCELONA </kn * C«f*U. f)

1
695

SOUTH

ATLANTIC

OCEAN

We Invite
correspondence from Banks, Importers and
Exporters interested in
business
West

the establishment of

trade relations with Canada, the

Indies,

Central

Great Britain, France

and
or

South

America,

Spain.

The Royal Bank

Canada

of
New York

Agency

Head Office

68 William St.

Montreal, Que«

Capital and Reserves,
Total Resources,

$38,000,000

$589,000,000

(INCORPORATED 1832)

RESERVE FUND

CAPITAL PAID-UP

WSM

$9,700,000

$18,000,000

Total Assets Over $235,000,000
GENERAL EXECUTIVE OFFICES:
H. A.

BRANCHES

42 in New Brunswick

j
35 in Western Provinces j

25 in Newfoundland

Indies:

West

Cuba—Havana
Porto RiCO—San Juan; Fajardo; Ponce
Jamaica—Black River, Kingston, Linstead, Mandeville, Montego Bay, Morant
Port Antonio, Port Maria, St. Ann's Bay, Savanna-la-Mar, Spanish Town.
Dominican Republic—Santa Domingo, San Pedro de Macoris

1
1
g|

Boston
|
W. Caldwell, Manager J

I
§f

' 1 gEntS

F. W. Murray,

§§

Bay

Chicago
W. H. Da vies, Manager

New York
H. F. Patterson, }

129 in Ontario

Quebec

General Manager

IN CANADA:

12 in Prince Edward Island

44 in Nova Scotia
22 in

J. A. McLEOD, Asst.

RICHARDSON, General Manager

TORONTO

London, Eng. E. C. Macleod, Manager
=3

Correspondents
GREAT
The London

Joint City & Midland Bank

Limited; The Royal Bank of Scotland.

E=
=3

Credit

Lyonnais;

BRITAIN:

FRANCE:

Comptoir National d'Escompte de
UNITED

STATES:

§|

'Y,C;
Paris.

■

;

The Bank of New

First National

York, N.B.A., New York; National Bank of Commerce, New York;
Bank, Chicago;
Fourth Street National Bank, Philadelphia;
Merchants' National Bank, Boston; Citizens' National Bank, Baltimore;
Security
National Bank,
National Bank, San Francisco; First

First

and

American
National Bank, Seattle.
Minneapolis;

Special facilities for making prompt collections in Canada, New¬
foundland and the West Indies.
Accounts of Banks, Corporations and
Individuals conducted on most favorable terms.

Correspondence Invited

prepared for

development and
expansion
With

area

greater

than the United States and

one-tenth the population,

not

the greatest
her history.

Millions of

period of

acres

Canada to-day faces
and expansion in

progress

of arable land, forests, minerals,

water-powers—these

are

the natural

resources,

immeasurable wealth of which, is awaiting

the

develop¬

ment.

foundation upon which Canadian enterprise
build, there are available the railroads that
the continent, canals, wharves, harbours, grain

may
span

elevators, modern public utilities—tangible assets
made possible in large measure by money borrowed
abroad.

For the construction of these and other necessary

undertakings, $1,200,000,000 has been obtained from
the

financial

Canadian

markets

Government,

the

United

Municipal,

States,

Railroad

and

Industrial Bonds.
CANADIAN

United

INVESTMENT

States

investors

purchased

$204,000,000 of Canadian Bonds last

BANKING

less

than

year.

SERVICE

After

Our Statistical
your

when

Make

service.

use

thinking of Canadian

ities and other
to

Department

matters

is at

secur¬

pertaining

years,

Canada

continuous

effort

during the past fifty
finds herself prepared for one
of the greatest periods of progress in her history—both from the standpoint of population, production
now

and of national wealth.

Canada,

Dominion Securities Corporation
Fv. Wood

G. A. Morrow
J

W. Mitchell

Hod gens

Vice-President

LIMITED.

President

Wlute

Vice'President

J. A. Fraser
Andison

Treasurer

MONTREAL BRANCH
Canada

Life

R. W. Steele
HEAD

Secretary

Ass't Secretary

A»

Established 1901

KING

Building
-

OFFICE:

STREET

EAST

TORONTO

Treasurer

Manager

LONDON. ENG.. BRANCH
No.

Austin

Friars

A. L. Fullerton, Manager

INCORPORATED 1855

MOLSONS BANK

THE

Head Office: MONTREAL
OVER 130 BRANCHES IN CANADA

$4,000,000
5,000,000
90,000,000

Capital Paid Up
Reserve Fund

Total Assets Over
WM. MOLSON

EDWARD C.

MACPHERSON, President

PRATT, General Manager

SPECIAL ATTENTION GIVEN

TO COLLECTIONS

STATES

RECEIVED FROM THE UNITED

ESTABLISHED 1864

Head Office:

MONTREAL

Capital Paid Up

$8,400,000
$8,400,000

Rest

$260,774

Undivided Profits

MONTAGU ALLAN, C.V.O. President

Sir H.

DAWES, Vice-President

A. J.

MACAROW, General Manager

D. C.

MERRETT,

Supt.

Branches

and

Chief Inspector
W.

MELDRUM, General Supervisor

CANADIAN COLLECTIONS
Having 399 Branches and Agencies in Canada, and cor¬

respondents in every town from coast to coast, this Bank's
facilities for making collections throughout the Dominion
are

NEW YORK

AGENCY
W.

unsurpassed-

63-05

RAMSAY and C. J. CROOKALL,
Telephone*, Hanover 8057-8058

LONDON, ENGLAND, OFFICE, 53

Cornhill,

WALL

STREET

Agents
1

J. B. Donnelly, D, S. O., Manager

CANADIAN
Government,

Municipal and Corporation

SECURITIES

A. E. AMES
Members Toronto

Broadway, New York

Harris Trust Bld£HEAD OFFICE—UNION BANK

MONTREAL

& CO.

Stoc\ Exchange

Chicago

BLDG., TORONTO

VICTORIA, B. C.
70

Estfg'8fd

ESTABLISHED 1875

CANADA

^
Capital Paid

PELEG

$7,000,000

J,/;.;;

Reserve Fund $7,500,000

HOWLAND, President

W. MOFFAT,

Gen'l Mgr.

HEAD OFFICE—TORONTO
We solicit the Canadian Business

of American Banks at

any

our

Branches.

Prompt Attention is Assured.
214 BRANCHES IN CANADA
AGENTS
New

York

Bank of the Manhattan

Buffalo

Bank of Buffalo

Company.

Detroit

Boston

First and Old Detroit National Bank

National Shawmut Bank

Chicago

Philadelphia

First

National

Bank,
Corn Exchange National Bank

Fourth Street National Bank,
Great

Britain

Lloyds Bank, Limited, Head Office, Lombard Street, London, E. C.
CORRESPONDENCE INVITED

The BANK OF TORONTO
HEAD OFFICE:

TORONTO, CANADA

INCORPORATED

1855

Capital

Reserves
.

•

$5,000,000

6,794,000

-1
/Complete

facilities

^making
tions

for

prompt collec¬

throughout

Canada

^nd for banking business
of every

description.

Interest Allowed

Deposits
AGENTS
NEW

YORK,

CHICAGO,

UNITED STATES

Nat.

First

Bank of Commerce

National

Bank.

G.
GOODERHAM,
JOSEPH HENDERSON,
W.

THOS.
HEAD

OFFICE:

TORONTO,

HOW,

General

Manager

CANADA

163 Branches in Ontario,
A

President

Vice-Pree.

Quebec and the West

Complete List of Correspondents Throughout Canada
71

BANK

DOMINION

THE

Established 1871

TORONTO

Head Office:

CLARENCE A. BOGERT, General Manager

$6,000,000

Capital Paid Up..... J
Reserve Fund and Undivided

Total Assets,

30th June, 1920

We have Branches

Canadian

Profits, 30th June, 1920

7,700,000

.140,000,000

Agents at every banking point in Canada and our

Branches make

specialty of business sent them from Abroad.

Foreign Exchange—Commercial Credits
Collections receive prompt

attention

Correspondence solicited
London

New York

Eng. Branch:

73 Cornhill E. C. 3

S. L. Jones,

Judge

Manager

Agency:

Broadway
S.

Howard, Agent

Bank's Service

by the Clients It Serves
To succeed

exporter in competition with the
the highest kind of

merchants of the world demands
and financial skill.

commercial

which aim

The Canadian banks

exporters satisfy
clientele in the commercial world.
The

serve

fact

the most exacting

zl-"

that the New York

Agency of the
exchange
transactions of some of the largest manufacturers and
bankers in the United States, is evidence of its ability
to handle Canadian business with
speed and efficiency.
mere

Union Bank of Canada handles the Canadian

"A CANADIAN BANK FOR

CANADIAN

BUSINESS

UNION BANK

^CANADA

T?esoixrces

Over

$160'000'000

49 WALL STREET NEW YORK
72

..:.

THE NATIONAL PROVINCIAL AND

UNION BANK OF ENGLAND Limited
ESTABLISHED

1833.

f$5-£l.)
SUBSCRIBED
CAPITAL:

$199,671,600

PAID-UP

CAPITAL:

$39,034,320

RESERVE
FUND:

$36,195,205

Head Office: 15, BISHOPSGATE, LONDON,E.C. 2

'THE BANK HAS
892

OFFICES IN

EN6LAND & WALES

Current

Accounts

Opened,

Deposits Received
and

Every Description
of

Banking Business
Transacted
MANSION

HOUSE.

PRINCES STREET OFFICE.

BANK OF ENGLAND

AUXILIARY:

LLOYDS AND NATIONAL PROVINCIAL FOREIGN BANK LIMITED.
OFFICES in LONDON (31 Threadneedle Street, E. C. 2,) (71 Haymarkel, S.

W. 1, West End Branch); PARIS (3, Place de I'Opera),

BIARRITZ, BORDEAUX, HAVRE, MARSEILLES, NICE, ANTWERP, BRUSSELS, COLOGNE, ZURICH.

Head Office: 71,

LOMBARD STREET, LONDON, E.C.3.
($5

CAPITAL SUBSCRIBED

CAPITAL PAID UP

RESERVE FUND

DEPOSITS, &c.

ADVANCES, &c.

and

Colonial

The

Agency

Foreign

£1.)

70,679,380
49,886,410

1,621,541,195

821,977,505

THIS BANK HAS ABOUT

$353,396,900

1,500 OFFICES IN ENGLAND &

Foreign

CORNHILL,

17,

Department:

& Colonial

Affiliated

Banks

LONDON,

WALES.
E.C. 3.

undertaken.

LONDON AND RIVER PLATE BANK LTD.

THE NATIONAL BANK OF SCOTLAND LTD.

Auxiliary:

BANK LIMITED.

LLOYDS AND NATIONAL PROVINCIAL FOREIGN

Swiss Bank

Corporation

ESTABLISHED 1872

BASLE, ZURICH, ST. GALL, GENEVA, LAUSANNE,
LA

CHAUX-DE-FONDS, NEUCHATEL.

Capital Authorised

$25,000,000.00

Capital Fully Paid Up

$24,000,000.00

Reserves

$6,600,000,00

Deposits

------

$190,000,000.00

LONDON OFFICE

43, LOTHBURY, E. C. 2

GENERAL MANAGER: X. CASTELLI

The

Corporation having specialised for

tions connected with

foreign trade,

are

glad

years

in all banking transac¬

offer their

numerous

and

exceptional facilities and the fruits of their experience to Bankers and Traders
in America who may

be desirous of extending their foreign business.

ti'

LONDON JOINT CITY & MIDLAND
BANK LIMITED
Chairman:

The

Right Hon. R. McKenna

JOINT MANAGING DIRECTORS:
S.

MURRAY,

Subscribed

Esq., F. HYDE, Esq., E. W. WOOLLEY, Esq.

Capital

£38,096,363

Paid-up Capital

10,840,112

Reserve Fund

10,840,112

Deposits (June 30th, 1920)

367,667,322

HEAD OFFICE: 5, THREADNEEDLE ST., LONDON, E.C.2
OVER 1,460

OFFICES IN ENGLAND AND WALES

OVERSEAS BRANCH: 65 & 66, OLD BROAD STREET,

LONDON, E.C.2

Atlantic Offices;

"Aquitania"
';/•./

"Imperator"

"Mauretania"
-.1,

,,,,

AFFILIATED BANKS:

BELFAST BANKING COMPANY LTD.

THE CLYDESDALE BANK LTD.

OVER 110 OFFICES IN IRELAND

OVER 150 OFFICES IN SCOTLAND

BANCA COMMERCIALE ITALIAN A
CAPITAL LIT. 400.000.000

SURPLUS LIT. 156.000.000

DEPOSITS LIT. 4.371.970.562
HEAD OFFICE: MILAN

Eighty Branches throughout Italy
BRANCHES ABROAD: NEW YORK, LONDON,

NEW

YORK AGENCY:
PHONE:

CONSTANTINOPLE

165 BROADWAY

CORTLANDT 8430 to

8438

Our New York Agents will be glad to confer with Bankers regarding the extension of their activi¬
ties abroad.
AFFILIATED

INSTITUTIONS

BANCA COMMERCIALE ITALIANA (France) Paris, Marseilles and
branches...
.Capital:
BANCA

COMMERCIALE

ITALIANA

BULGARA—Sophia

BANCA

COMMERCIALE

ROMENA—Bucarest

10,000,000

and

Capital: Leva
ITALIANA

branches

.Capital:
UNGARO-ITALIANA—Budapest
Capital:
BANQUE FRANCAISE & ITALIENNE POUR L'AMERIQUE DU SUD
Paris, Buenos Aires, Sao Paolo, Rio de Janeiro and branchesCapital:
BANCA DELLA SVIZZERA ITALIANA—Lugano and branches
Capital:
BANCO ITALIANO—Lima and branches
Capital:
SOCIETA
ITALIANA
DI
CREDITO
COMMERCIALE—Vienna,
Trieste and branches
Capital:
BANCO FRANCES DE CHILE—Santiago, Valparaiso.
Capital:
BANCO FRANCES E ITALIANO DE COLOMBIA—Bogota
Capital:
BANCA

Fs.

and

branches.

Lei
Cr.

50,000,000
350,000,000

Fr.
Fr.
Lp.

50,000,000
5,000,000
400,000

Lit.
$M/C
Pesos

40,000,000

Banca Commerciale Italiana
AGENCY IN NEW YORK.

12,000,000

10,000,000
200,000

rrif

ifi

THE

INDIA

BANK

Limited

Head Office

LONDON

Gracechurch Street

Capital authorized and subscribed

£3,000,000

Capital paid

£1,050,000

Reserve Fund and Undivided

New

York

Profits

£1,146,430

Agents, Bank of Montreal
64 Wall Street

BRANCHES

STRAITS
MALAY

INDIA, BURMA, CEYLON,

SETTLEMENTS,

FEDERATED

STATES, CHINA, and MAURITIUS

NATIONAL BANK OF INDIA, LIMITED
REGISTERED IN LONDON UNDER THE COMPANIES ACT OP

Established in Calcutta, 29th

1862 ON THE 2SRD MARCH, 1866.

September, 1863

Bankers to the Government in British East Africa and

Uganda

Subscribed Capital

£3,000,000

Paid-up Capital

£1,500,000

Reserve Fund

£2,000,000

Number of Shareholders

Head

1,817

Office:—26, BISHOPSGATE, LONDON, E.C. 2.
BRANCHES

CALCUTTA

KANDY

BOMBAY

NEWERA ELIYA

MADRAS

ZANZIBAR

KARACHI

MOMBASA

CAWNPORE

)

NAIROBI

(Kenya

LAHORE

NAKURU

(Colony

AMRITSAR

British
East

Africa

KISUMU

DELHI

ENTEBBE

TUTICORIN

KAMPALA

COCHIN (S. INDIA)

Uganda

JINJA

CHITTAGONG

)

RANGOON

Tangan¬

MANQALAY

TANGA

ADEN

yika

DAR-ES-SALAAM

ADEN POINT

JmitQry

COLOMBO

AGENCIES

GALLE, CEYLON: Messrs. CLARK,
EDINBURGH

Messrs. MONCREIFF &

SPENCE & Co.

HORSBRUGH, 46 Castle St.

GLASGOW: Messrs. MACKENZIE, ROBERTON &

CO., 176 St. Vincent St.

BOARD OF DIRECTORS

ROBERT CAMPBELL, Esq., Chairman
ROBERT WILLIAMSON, Esq.,

H. CHALMERS, Esq.
Sir JOHN P.

Deputy-Chairman

ROBERT MILLER, Esq.
Sir CHARLES C. McLEOD

J. N. STUART, Esq.

HEWETT, G.C.S.I., K.B.E., C.I.E,
J. A. TOOMEY, Esq.
LONDON BANKERS

OF ENGLAND

BANK

NATIONAL

PROVINCIAL
NATIONAL

UNION

AND

The Bank grants Drafts and Telegraphic

collects

and

Securities;
nesa
on

The

Exchange;

undertakes

Is represented; negotiates
Indian Government and other

Transfers on all places where It

the

Purchase

Sale

and generally transacts every description of Eastern
Bank receives Deposits for fixed periods, not exceeding one year, at rates

collects

Pay,

Pensions,

Bank opens Current Accounts,

annum

interest

Banking buslto be obtained

and provided they do not

fall below £200, allows Two per cent

the minimum monthly balances.
OFFICE

HOURS

TO 3

—

SATURDAY

TO 12.

H. CHALMERS, General Manager.

C. NICOLL, London Manager.

ENGLAND, LIMITED

application.
The

per

Bills

BANK OF

BANK OF SCOTLAND, LIMITED

•

...

■

mmmm

Over 500 Branches
in South Africa
BANKING

AND

TRADE

SERVICE

Branches in

CAPE

PROVINCE

TANGANYIKA TERRITORY
KENIA COLONY

NATAL
NYASALAND
ORANGE FREE STATE

PORTUGUESE EAST AFRICA
RHODESIA

PROTECTORATE

SOUTH WEST
SWAZILAND
BASUTOLAND
TRANSVAAL

Our Organization,
to

Resources and Facilities Enable

Offer Efficient Service

in All Branches

of Banking

Resources Exceed $430,000,000.00
ANTWERP, BELGIUM

BOMBAY, INDIA

ST. HELENA AND MAURITIUS

LONDON

Circus
18

St.

Swithin's

OFFICES

Place, London Wall, E. C.

Lane, E.

25 Cockspur

St, S. W.

The National Bank
of South Africa, Ltd.
R.

SAUNDERS,

10 WALL STREET

Agent

NEW YORK
78

Standard Bank of South Africa, Ltd.
HEAD OFFICE
10

CLEMENTS
Authorized

LANE, LOMBARD STREET/LONDON, E. C.

Capital........

^..£10,000,000
£1,562,500
£2,200,000
£4,687,500
£52,010,266
£70,102,909

Paid-up Capital
ReserveFund
Reserve

Liability of Shareholders

Deposits
Total Resources

Bankers

$7,812,500

$11,000,000

$23,437,500
$260,051,330
$350,514,545

the Government of the

Union

Cape

$50,000,000

South

Africa

the

Province;

to the Imperial
Government in South Africa; and
to

Administration

the

Rho¬

desia.
About Five Hundred Branches and

Agencies in Cape Province,
Natal;
Transvaal,
Orange
Free
State, Basutoland,
Rhodesia, British Central Africa,
Uganda, East Africa and South
West Africa ; also Branches at
Amsterdam

and

Rotterdam,

Holland.

W. H. MACINTYRE
AGENT

68 WALL ST.,
Also

NEW YORK

representing

The Bank of New South Wales
with

three

(335)

Bank

Branches throughout

Premises, Cape Town, Africa

Fiji,

hundred

Papua

and

(New

thirty-five
Australasia,

Guinea).

Financing Business with the Far East
THISChina, and at Manila, P. I.,itsis branches inwell fitted to serve importers
American bank, through
the principal trade centers
of
unusually
and exporters,

engaged in business with the Far East, in every requirement of

international banking.
The service rendered is direct; that is to say, we, at every step,
close supervision over

exercise

all transactions, thus assuring their accurate and prompt

negotiation.

The personal

character of the service is another valuable factor, in that our
representatives, both in this country and in the Orient, occupy themselves with
our

JjL

customers' transactions and inquiries in a
We

gaged in,

invite
or

interviews

about

to enter,

spirit of genuine personal interest.

correspondence with importers and exporters

trade with the Far East.

Branches in the Far East

SHANGHAI

Above is
the

"chop"

(trademark)
registered

HANKOW

PEKING

HONGKONG

MANILA

TIENTSIN

CANTON

CHANGSHA

in China by

Asia Banking

Corporation

Asia Banking Corporation
Head Office:

35 BROADWAY
^CAPITAL $4,000,000

NEW YORK

SURPLUS AND UNDIVIDED PROFITS $1,489,362.54

en¬

Hongkong

and

Shanghai

Banking Corporation
Incorporated by Special Ordinance of the Legislative Council of

Paid

Hongkong in 1867

Hongkong

Capital,

Currency

$15,000,000

Sterling Reserve Fund, Hong¬
kong Currency

6,000,000

Silver Reserve Fund, Hongkong

Currency

of Proprietors,

Hongkong Currency
Deposits 31

mand, Hongkong Currency

Fixed, Hongkong Currency

Hongkong Currency

Head
cies

J. A. Jeffrey,

ments.

Agent

The Yokohama

105,000,000

1919,
.

Hongkong, 34

425,000,000

Branches and Agen¬

India, Java. Straits

China, Japan,

Settle¬

Philippines and other parts of the Far East;

London, England; Lyons, France; New York

New York

36 Wall Street,

office

232,000,000

1919,

Total Assets December,

Hongkong

15,000,000

1919, De¬

Dec.,

Deposits 31 December,

Head Office,

23,000,000

.......

Reserve Liability

and San

Francisco in the United States,

Specie Bank, Ltd.

Yokohama, Japan

Subscribed

Capital, Yen 100,000,000

Reserve Fund, Yen 50,000,000

Capital Paid-up, Yen 100,000,000

BRANCHES

AND

AGENCIES AT;
Batavia

Newchwang

Bombay

New York

Buenos Ayres
Calcutta

Osaka

Changchun
Darien (Dalny)
Fengtien(Mukden)
Hamburg

Rangoon
Rio de Janeiro
San Francisco

Hankow

Seattle

Peking

Saigon

Harbin

Shanghai

Honolulu

Shimonoseki

Hong Kong
Kai Yuan

Singapore
Sourabaya

Kobe

Sydney

London

Tientsin

Los

Angeles

Tokyo

Lyons

Tsi ngtau

Nagasaki

" i 4

Tsinanfu

Manila

Vladivostock
London Office:

7, Bishopsgate,

London, E.C.2

T. OKUBO. Manager

HEAD OFFICE: YOKOHAMA

Capital Stock

Surplus and Undivided Profits

$5,000,000.00

$8,200,000.00
•WWi

INTERNATIONAL
OWNED BY
HEAD

London
36

BANKING

THE

NATIONAL

OFFICE:

Office:

CITY

WALL

CORPORATION

BANK

STREET,

NEW

PLACE

San Francisco Office:

TOLOZAN

232

H. T. S. GREEN, President and General
1

Far Eastern Branches

Yokohama,

PHILIPPINES:
INDIA:

DUTCH

INDIES:

Cardenas,

for

Sao

Avila,

Norte,

SOUTH

and

fixed

THE

Rosario.
Paulo.

Cienfuegos,

PANAMA:

Panama,

Macoris,

Santo

Colon.

Santiago,

Domingo,
Puerto

San

Plata,

Sanchez, Barahona.

NAT ONAL CITY BANK OF NEW YORK

BELGIUM:

Brussels,

Santiago

Ciudad
Colon,

Bolivar,

Cruces,

Antwerp.

Chile,

BRAZIL:

Valparaiso.

Maracaibo.

Bahia,

Pernambuco, Porto Alegre,
Montevideo, Calle Rondeau
Bayamo, Caibarien, Camaguey,
Manzanillo, Matanzas, Neuvitas, PInar del
URUGUAY:

CUBA:, Artemiso,

Guan tanamo,

Havana,
Spiritus, Santa Clara, Santiago de
Cuba, Union de Reyes,
Ponce, San Juan,
Italy:
Genoa.
RUSSIA:
Moscow,
Petrograd
(tempo¬
Town.
SPAIN: Baroelona, Madrid.
TRINIDAD: Port of Spain.
COLOMBIA:

Sagua

PORTO

Grande,

Sancti

RICO:

Cape

ENGLAND:

Letters
rates

Pedro

Soerabaya.

CHILE:

Caracas,

AFRICA:

Travelers'

periods

Batavia,

Bogota.

Central American

DOMINICAN REPUBLIC:

Rangoon.

Singapore.

Remedios,

Lima.

Barranquilla,

Commercial
ceived

del

PERU:

closed).

Medellln,

Aires,

Santos,

VENEZUELA:

Ciego

Rio. Placetas

Yaguajay.
rarily

Buenos

Janeiro,

(Sub-branch).

REPUBLIC

SETTLEMENTS:
EAST

and

Cebu.

Calcutta,

BRANCHES

Rio

Indian

ST.

Branches

Kobe.

Manila,

Bombay,

STRAITS

ARGENTINA:

West

MONTGOMERY

Manager.

Shanghai, Peking, Tientsin, Hankow,
Hongkong, Canton, Harbin, Tsingtao.

JAPAN:

YORK

Lyons Office:

BISHOPSGATE, E. C.

CHINA:

NEW

Credit,

London.

Bills

ascertained

Exchange

application.

and

Cable

Transfers

bought

and

sold.

Deposits

re¬

Altered fianK of India, Australia and Cftina
Incorporated by Royal Charter, 1853

Capital (Gold)
$10,000,000.00
Reserve Fund

$15,000,000.00
Undivided Profits

$864,150.00
Total Assets

$343,708,475.00
Branches

Philippine

China,

Japan,

Islands,

Java,

Straits Settlements, India and

Burmah, and Agencies in all
the
and

principal cities of Europe *
Australia.

Travelers'

Credits issued, available in all
parts of the world.
Foreign
exchange bought and sold.

CALCUTTA OFFICE

Head Office: 38

WILLIAM

Bishopsgate, LONDON, ENGLAND

BAXTER, Agent, 88 Wall Street, NEW YORK
81

Park>Union
FOREIGN BANKING CORPORATION

J
f'

56 Wall Street, New

York

Capital (fully paid), $4,000,000

Surplus
Undivided Profits,
and
BRANCHES AT

Shanghai

Tokio

Yokohama

Paris

San Francisco

Seattle

Commercial Credits

Acceptances
Transfers of Money
Advances against Collateral for the

Foreign Collections and Cheques

Financing of Foreign Business

Transactions in Exchange

Travelers' Letters of Credit

OFFICERS
Charles A. Holder, President
T. Fred

Aspden, Vice-President

E. B. MacKenzie,

SECURITIES

FOREIGN
Our

Secretary & Treasurer

Foreign Department specializes in

Argentine, French, Italian? Japanese, Swiss and Russian Government
Bonds. ^Bank contract obligations on Marks, Francs and Lire good nine
months from date. ^Foreign Currency (all issues). Foreign Exchange.

Exchange Place

New York

Ttltphontt 8300-16 Hamper

A General International Commercial

Banking Business Transacted

Principal Branches

Through

Brussels, Belgium
Buenos Aires,

abroad

Argentina

our

we are

equipped

aid in the expansion and
of your foreign markets.

Cali, Colombia
Harbin, Manchuria

branches

numerous

offer

every

development

Havana, Cuba

'AMERICAN

Manila, Philippine Islands
Panama

Port

Rio de

Santo

City, Panama
Prince, Haiti

FOREIGN BANKING
CORPORATION

Janeiro, Brazil

Domingo,

Dominican

Republic

Agents and correspondents in
all

the

mercial

other

important

centers

Broadway, New York, U. S. A.

com¬

Capital and\ Surplus $6,500,000

of the world.

Chelsea

Exchange

MAIN OFFICE

266 West 34th St., New York
A.

7th Avenue at 135th St.

STILGER, President

WM. A. LOBB, Vice-President
WALTER L. WILLIAMS, Vice-President

IRVING

Bank

HARLEM BRANCH

GEO. F. EWALD, Asst. Cashier
CHAS. G. RAPP, Asst. Cashier
HARRY S. GROH, Asst. Cashier

SHAW, Vice-President

DEPOSITORY, STATE OF NEW YORK, CITY OF NEW YORK.
LETTERS

CREDIT, TRAVELERS CHECKS, FOREIGN EXCHANGE, MONEY ORDERS

SAFE

DEPOSIT

VAULTS

Strictly Commercial Bank in The Heart of New York

w,'*iwl5Viv%

>T
204 FIFTH
BROADWAY

AVENUE,
and

COMPANY

NEW YORK

LEONARD

ST.

7 WALL
BROADWAY

STREET

and

72nd

St.

OFFICERS
Frank

J. Egan, Chairman
S. Webb,
President

Alexander

Abeam

Frederic

Hyatt, Vice-President
Davis, Vice-President
Moses

Charles
Robert

Calhoun, Secretary
Jones, Asst. Secretary

Harry M.

Nelson F. Griffin, Treasurer
Norman W. Andrews, Asst. Treasurer
W. Hanson,

Ford, Asst. Secretary
Adams, Jr., Asst. Treasurer
Paul H.

Member Federal

Vice-President

Fitzsimmons, Vice-Pres.

S. Lott, Vice-President

Joseph
Joseph

Owen Ward,
William F.

Reserve

Asst. Treasurer

Rogers

W. Gould, Asst. Secretary
Ernest J. Schilling, Mgr. Foreign Dept.

Selchow, Trust Officer
System and

New York

Clearing House

CAPITAL AND SURPLUS, $3,000,000

52 William Street,

ORDERS EXECUTED FOR ALL

AGENTS OF CORPORATIONS

New York

INVESTMENT SECURITIES. ACT AS
NEGOTIATE AND ISSUE LOANS

AND

TELEGRAPHIC
TRANSFERS, LETTERS OF CREDIT ON
BILLS OF EXCHANGE,

The National Provincial & Union Bank of

England, Ltd.

London

;

Messrs. Mallet Freres & Cie., Paris
Banco Nacional de Mexico
■

;Yv

Agents

AND

for ttie

TRAVELERS'

AVAILABLE

ITS

BRANCHES

Bank

of Australasia, etc.

LETTERS OF CREDIT
THROUGHOUT THE UNITED STATES

Casa Fundada

1832

Cablegramas: "Turnurc'

Nueva York,

Callede Wall No. 64

Lawrence Turnure & Co.
Depositos

Cuentas Corrientes.

cargo

del Cobro

venta

de Valores Publicos

Cambio.

Giros, Pagos
otras

Cobro de

Cable

por

Depositos de Valores haciendonos

Remision de Dividendos
Industrials.

Puerto

Rico,

Intereses.

Corhpra

Letras, Cupones, etc.,

Compra

cuenta

por

Santo

agena.

Inglaterra, Francia, Espana,

Domingo,

Centro

Sud

America.

CorrespDnsales:
Londres: The London

Venta de. Letras

Cartas de Credito, sobre la Habanajy

ciudades de Cuba, tambien sobre

Mexico,

Joint City and Midland Bank, Ld.

Paris: Heine

Ca.

Habana: N. Gelats

Puerto Rico: Banco Comercial de Puerto Rico

Espana: Banco Urquijo, Madrid.

Ca«

Banco de Barcelona, Barcelona

Banco Hispano Americano,

Agencias

UTICA TRUST AND DEPOSIT
COMPANY, UTICA, N.
Resources.

$15,000,000.00

OFFICERS

J. FRANCIS DAY
President

GEO. E. DUNHAM

Vice-President

SANFORD F.
SHERMAN
Vice-President

GRAHAM
COVENTRY
Vice-President

and

Secretary

CHARLES

LAMB

Treasurer

CROVER
Asst.

CLARK

Secretary

GEORGE W.
WILLIAMS
***'

,-t

"'.-!***

•

85
j»

■

'J&y

>M*t

■

Asst. Treasurer

Bonds

Government
*

•*

•

■

'.-a".

Lee, Higginson & Co.
NEW

YORK

BOSTON

higginson

CHICAGO

& co.

LONDON

Foreign Exchange
Letters of Credit

Acceptances

Corporation Bonds

Bankers
SECTION
OF

Powmercial

THE

Financial Thronihe.

Copyrighted in 1920 according to Act of Congress by WILLIAM B. DANA COMPANY, in office of Librarian of Congress, Washington,

Vol. 111.

THE

The

NEW YORK,

Commercial

and

CHRONICLE.

Financial

Chronicle

news

weekly

sideration deserve

newspaper

spondents relating to the various matters within its

Richard

Saturday

by telegraph and cable from its own corre¬

Railway and Industrial Section, issued twiceVyear, is furnished

without extra charge to every annual subscriber of the Chronicle.
The

touching

he did

most in the minds

the question which

of all the

Commerce Commission, is also furnished without extra charge to every an¬
nual subscriber.

The

Electric

without

extra

Railway Section, issued twice

charge to

year,

is also furnished

annual subscriber of the Commercial

every

situation; first, that

sworn

each month with the Inter-State

and

State

and

City Section, issued semi-annually, is also furnished

without extra charge to every subscriber of the
The

Bank

and

Chronicle.

bridge into
where

broad

a more

Supplements, others

within

the

Chronicle, includihg all the Supplements,

United

States,

Thirteen and

postage) in Europe, and Eleven and

Half Dollars

are

DANA

Front.

Ten Dollars

(which includes

eminently has "retained
financial
of

Depeyster Streets,

New

the

Advertisements

Page.

AMSTERDAM, HOLLAND.
Pierson & Co...

........

...

American Audit Co......

Atlanta National Bank........
Ernst & Ernst

Goldman, Sachs

Leland (E. F.)

American Audit Co

Baltimore Trust Co

.....

....

Russell Brewster & Co..

Tilden & Tilden, Inc

Union Trust Co

Fidelity Trust Co...

Garrett (Robt.) & Sons..
Leach (A. B.) & Co., Inc

Maryland Trust Co_____

Burr

BIRMINGHAM, ALA.

.55'

.....!

......

Bond & Goodwin

....

Brown Bros. & Co

....

...

H.) Co

Sanger

Estabrook & Co..

.....

...

Ernst & Ernst

Fourth Atlantic National Bank.

Goldman, Sachs & Co.

...

& Co..

Hanchett Bond Co. (The)

...

Hathaway, Smith, Folds & Co
Hayden, Stone & Co

Hornblower & Weeks
Hotchkin

Co.........

Leach (A. B.)

...

& Co., Inc

...

.,.j

Commerce

National

Bank.

Boettcher, Porter & Co

Bosworth, Chanute & Co..
Ernst & Ernst

& Hutzler

White, Weld & Co...

...

206

...

....

......

First National Bank.........
Trust

Co.

Ernst & Ernst.

....

Co..........

BUFFALO,

...

Ernst & Ernst..

........

......

Harris, Small & Lawson.

Hornblower & Weeks....

Peoples State Bank

CAMDEN, N. J.

FORT

Bank

American Audit
Ames (A.

Co.

....

—

...

........

...

;

—

Bank of Nova Scotia

...

Becker (A. G.) & Co., Inc.....

Exchange

National

—

....

Bank..

Curtis
Ernst

&
&

Sanger

Goldman,
Grant

Sachs

(R. M.)

& Co

Hanchett Bond Co

Prince &

HAVEN,

CONN.

Whitely

Clark, Dodge & Co.

...

ORLEANS,

LA.

....

57
NEW YORK CITY.

HOUSTON, TEX.
Ernst & Ernst

Aldred & Co........
American Audit

Ames (A.

Corporation.

Banca Commerciale

Corporation

Italians....

.....

Bankers Trust Co.

......

...

Becker (A. G.) &

Co.

Ernst & Ernst.

Bertron, Griscom & Co.

....

•---

Boissevain & Co_._._-_..

Boland & Priem

LIVERPOOL, ENGLAND.
Pynchon & Co

Bond & Goodwin

.....

Bank

Canadian Bank of Commerce—
Central Union Trust Co.

India,

Chartered

Bank

Brown, Shipley & Co

China

..........

& Co

Baring Brothers & Co

Chartered

Brothers & Co—

Burr (Geo. H.)

Italians

3®

—..—....

Brooklyn Trust Co
Brown

LONDON, ENGLAND.

—

Bickmore (A. H.) & Co...

MO.

Battery Park National Bank
51

.....j

......—...

Bank of United States—.

Commercial Trust Co. of N. J.

KANSAS CITY,

—

Bank of Nova Scotia

70
79

—

Bank of Manhattan Co.

...

83
*

....

........

E.) & Co..

Asia Banking

INDIANAPOLIS, IND.

......

Co.

.......

.............

American Foreign Banking

Banca Commerciale

N. J.

Co.......52

Ernst & Ernst
...

Canadian Bank of Commerce

................

67
—

Trust

NEW

18
64

HONGKONG, CHINA.

...

Royal Bank of Canada—.......
Sutro Bros. & Co.

American Audit Co....

American Audit Co

Cover
61

Ernst

Estabrook

Back

.»■'

Banking Corporation..

Inside
Counselman & Co

...

(The)

...

Compton (Wm. R.) Co
Corn

Merchants Bank of Canada.......

^
....

Hartford Aetna National Bank

Bond & Goodwin
.

...

NEW

H.) & Co...

— ...

CONN.

Estabrook & Co

Asia

Corp...

NEWARK, N. J.

...

HARTFORD,

......— .........

Dominion Securities

HALIFAX, NOVA SCOTIA.

19
70

Bank of Nova Scotia

Burr (Geo.

MONTREAL, CANADA
Ames (A. E.) & Co.

MICH.

First National Bank..

E.) & Co..

30
18

Morristown

RAPIDS,

JERSEY CITY,

......

....

MORRISTOWN,

204

CHICAGO, ILL.

............

.....

Fort Worth National Bank,..

CHATTANOOGA, TENN.
National

— ........

Wood, Gundy & Co.

WORTH, TEX.

Ernst & Ernst

Hamilton

MINNEAPOLIS, MINN
Bond & Goodwin

Molsons Bank

Wayne County & Home Savings Bank... 65

Central Trust Co.

.....—

Pynchon & Co,.......

First National Bank

Deposit & Trust

...

I..

Union Trust Co..

18
—

...

American Audit Co

.......

Hongkong & Shanghai Banking Corp'n.. 80

...

Italians

Ernst & Ernst

Hanchett (The) Bond Co., Inc...

Leach (A. B.) & Co., Inc.

Camden Safe

35
34

...

King's County Trust

Commerciale

.......64

Burr (Geo. H.) & Co

BROOKLYN, N. Y.

Leach (A. B.) & Co., Inc._«..............

Detroit Trust Co

Brooklyn Trust Co
Hamilton

Banca

...

MILAN, ITALY

18
...

DETROIT, MICH.

Stone & Webster

Canadian Bank of Commerce......

Michigan Trust Co

Richardson Hill & Co.

MEXICO

First Wiscorisin National Bank.63

Ernst & Ernst

Salomon Bros.

DENVER, COLO.

...

CITY,

MILWAUKEE, WIS.

Ernst & Ernst

National

Bank

MEXICO

DALLAS, TEXAS.

Lybrand, Ross Bros. & Montgomery..... 49
Shawmut

Fidelity &^Columbia Trust Co

...

....

...

Co....... 59

GRAND

Lee, Higginson & Co..

19
&

LOUISVILLE, ICY.

Kidder, Peabody & Co...

CAL.

Blankenhorn-Hunter-Dulin

International Trust Co.55

LOS ANGELES,

Otis & Co

....

56
....

;

Specie Bank

Otis & Co

...

207

Goldman, Sachs & Co

Ernst

...

Engineering Corp..

American Audit Co

Bickmore (A. H.) & Co

& Co

Leach (A. B.) & Co,, Inc..

Union

Bank of Nova Scotia

Grant (R.M.)

.....

Africa, Ltd

Merrill, Lynch & Co

BOSTON, MASS.

Baker, Ayling & Young....

Standard Bank of South

White (The J. G.)

33
....

Merrill, Cox & Co..

Birmingham Trust & Savings Co

American Audit Co

Becker (A. G.) & Co

Mechanics Trust Co

Swiss Bank Corporation

CLEVELAND, OHIO.

Ernst

Royal Bank of Canada

Wood, Gundy & Co

Ernst

(Geo. H.)

Pynchon & Co..

Yokohama

Otis & Co

Corporation..!

...

Dominick & Dominick
&

Ltd

Ernst

England,

......

62
.......

BAYONNE, N. J.

Curtis &

..60
....

Compton (W. R.) Co

BASLE, SWITZERLAND.

Burr (Geo.

206

Deposit & Trust Co

Coffin & Burr

....

McKinnon

CINCINNATI, OHIO.

...

National Exchange Bank
National Union Bank of Md

Swiss Bank

National Bank of South Africa, Ltd
National Provincial and Union Bank of

National Bank of Baltimore

Safe

National Bank of India, Ltd

...

Slaughter (A. O.) & Co..
&

Lloyds Bank, Ltd

Stone & Webster

Thomson

(Fred'k)...208

London Joint City & Midland
Bank, Ltd.
Mercantile Bank of India, Ltd

....

Pynchon & Co

& Co.

....

International Banking Corporation

Montgomery

& Co...

Continental Trust Co

Huth

Lybrand, Ross Bros.

Converse (A. D.) & Co
Estabrook & Co

Higginson & Co

.....

& Co

Merrill, Lynch

......^

...

Merrill, Cox & Co

BALTIMORE, MD.

Hallgarten & Co__

Empire Trust Co.,,.,.

Hornblower & Weeks..
Leach (A. B.) & Co., Inc

Page.

61
...

Lee, Higginson & Co.

& Co

Page.

...

Hathaway, Smith, Folds & Co

.........

«:

& Co

Holtz (H. T.) & Co,

ATLANTA, GA.

'.*•

Harris, Winthrop

India,

.....

66
6

Australia

&
81

China

Australia
...

Dominion

Dominion^Securities Corporation,.

Bank

Chelsea Exchange

Coal & Iron National Bank.

Coffin & Burr

Columbia Trust Co.

Clark, Dodge & Co

Bank...
...

1®
30

INDEX

ADVERTISEMENTS—Concluded.

Converse (A. D.)

& Co________,:.____.__.,

Corn Exchange Bank

American

Empire Trust Co..

Lloyds Bank.........—

Ernst & Ernst.

Bankers Trust Co...—.......

Pynchort & Co—........

Co........

—

Estabrook & Co..55
Farlee

......

...

Foreign Credit Corporation.....
Garfield

...

National

Bank...

205

(W. R.) & Co.'s Bank......

...205

(R; M.) & Co

.....

Stone & Co.

Paterson National

& Bennett...........:

51
Becker (A. G.)

American Audit Co......

—y--——

Baker, Ayling & Young........
Bertron, Griscom & Co...

...
—

......

„

Fourth

...—

Ernst

—.........—46

Kimball (R. J.) & Co...................

Frazier & Co..

Girard

Girard Trust Co...

...-.-1

Lee, Higginson & Co.

...

(E. F.) & Co

Liberty National Bank

Guarantee Trust

Harper

...

Hathaway,

...

....

...

Lybrand, Ross Bros. & Montgomery..... 49
MacQuoid & Coady..........

& Safe Deposit Co....
-.

Folds & Co...

Smith,

Leach

...

McCown & Co.......

Pennsylvania

......

Merchants' Bank of Canada

...

Merrill, Cox & Co_...................... 61
Merrill, Lynch & Co......

....

Middle States Oil Co...................

Mutual Bank..

National Bank of South Africa, Ltd...

(A. B.) & Co., Inc...

Lives,

—

Insurances

Philadelphia Trust Co

---

....

Real Estate Title Insurance & Trust

Reilly, Brock & Co:
Smith
West

Co.

Trust

—51
,.
28

......

(Edward B.) & Co.....
End

50
44

Real Estate Trust Co.

Corporation..

Compton (Wm. R.) Co

...

Ernst & Ernst

Hathaway, Smith, Folds & Co

Leach (A. B.) & Co.,

Lybrand, Ross Bros. & Montgomery..... 49

Lyon, Singer & Co

...

Royal Bank of Canada

Russell, Brewster & Co.
Salomon Bros. & Hutzler

Sanderson & Porter

207

Schafer Bros

....

(Wm.) & Co.......

Smith (Edward B.) & Co_.

& Co...

—

24
12

...

Inc..

—

43
33
43

Union Trust Co

— -

...........

Ltd

Baker, Ayling & Young—..—

Stone & Webster

206

...

& Co

& Co..

Plainfield Trust Co..

Dominion

Springfield National Bank....

Bank

Union

Ames

Hornblower & Weeks

(The J. G.) Engineering Corp....207
4

208

....

Specie Bank, Ltd..

(Geo. H.) & Co

—

-'I.--.. '70
71

...—

Bank of Nova Scotia.________

Canadian Bank of Commerce

Dominion

Bank.

Dominion Securities Co

Imperial Bank of Canada
Wood, Gundy & Co

j..33
N.

—

D. C.

Edwards

(John L.) & Co

...

Ernst & Ernst..

Co., Inc...... — — — — 36

WHEELING,

22
Masten

W. VA.

PRETORIA, SO. AFRICA
The National Bank of South Africa, Ltd.

PROVIDENCE,

R. I.
18

Hornblower & Weeks

RICHMOND,

First National Bank.

VA.

Bank of Canada......

...

............

Wachovia Bank & Trust Co..

WORCESTER, MASS.
Worcester Bank & Trust Co

...

Union

—

CANADA.

WINSTON-SALEM, N. C.

Ernst & Ernst

Ernst & Ernst
37

(A. E.) & Co
WINNIPEG,

American Audit Co

NORFOLK, VA.
.

—

Bank of Toronto..

Stock (E. L.) &

.....

CANADA.

Commerce..

...

ORE.
66

& Trust Co.... 27

..v

PORTLAND,

Morris Brothers, Inc—....

United States Trust Co

Winslow, Lanier & Co.

(A. E.) & Co

________

OHIO.

Ernst & Ernst

American Audit Co

...

Canadian Bank of Commerce..

United States Mortgage

White, Weld & Co

ME.

PORTLAND,

Hayden, Stone & Co..

Exchange National Bank..

...

72
57

—

Union

— -

y—.

TOLEDO,

...——55

Bank.

WASHINGTON,

Burr

'1,
—

—

UTICA,

McKinnon

....

Hayden, Stone & Co

Utica Trust & Deposit

8
79

N. J.

PLAINFIELD,

.....

Speyer & Co
Standard Bank South Africa,

— ...

Peoples National Bank

iy.

Canada.

(A. E.) &

...

SPRINGFIELD, MASS.

Seaboard National Bank

Wood, Gundy & Co.

Masten

CHINA.

Banking Corporation

TORONTO,

Whitely.

— -

—

24
59

Foreign Banking Corp...... 82

SHANGHAI,
Asia

PA.

....

Park-Union Foreign Banking Corp..

Turnure (Lawrence)

Park Union

PITTSBURGH,

Otis & Co

Pynchon & Co

Morris Bros., Inc

.........

22
...

Estabrook & Co

......Inside Front Cover

&c_...

Co_._-_.-l.

Hathaway, Smith, Folds & Co

48
24

62
30

Goldman, Sachs & Co

—12
49

...

for

Co.

...

—

Bank of Commerce.....

Lybrand, Ross Bros. & Montgomery....

Megargel (R. C.) & Co...........
Mercantile Bank of Indian.

............

McMiiHn (Emerson) & Co..

...

Co......

& Trust

Maitland, Coppell & Co...

Canadian

Inside Front Cover

& Turner.....

Title

Land

Burr (Geo. H.)

--205

•

—

...—y

Bond & Goodwin

—

Bank.—.-

(A. G.) & Co....

----/

Goldman, Sachs & Co...__

Leach (A. B.) & Co., Inc.

——- —

SEATTLE, WASH.
Becker

......

...

National Bank

Street

SCRANTON, PA.
American Audit Co..

—

National

61
82

Bank Corp.;

Park Union Foreign

& Co.31

Knauth, Nachod & Kuhne...

Bank

Co..;

Trust

First National Bank

.......

Kidder, Peabody & Co....

t'.onal

...

(Geo. H.) & Co

Fidelity Trust Co.

—...

Co—

Ernst

Yokohama

—...

Brown Brothers &

White

Canadian Bank of Commerce

(Geo. H.) & Co

Merrill, Cox & Co____...

Burr

Goodwin..

Bond & Goodwin

55
29

Bond

Converse (A. D.)

Thomson

International Banking Corp

International Banking Corporation.

Kidder (A. M.) & Co

Hathaway, Smith, Folds & Co

Commercial

Sutro Brothers

Co..

Smithers (F. S.)

& Co..______

Huth & Co.............................208

Schall

FRANCISCO, CAL.

Boles & Westwood

Hornblower & Weeks

Prince &

MINN.

PAUL,

Bodine, Sons & Co— —

Burr

Pacat Finance

Blankenhorn-Hunter-Dulin

Central National Bank-....

New York Trust Co

Co., Inc..

Bank...-.....----

Lincoln Trust Co

Leach (A. B.) &

Pynchon & Co—_ — -—

PHILADELPHIA, PA.

Leland

SAN

Hongkong & Shanghai Banking Corp

Josephthal & Co

....

M.) & Co.....

Hathaway, Smith, Folds & Co

....

Hathaway, Smith, Folds & Co...
Herrick

....

.....

Harris, Winthrop & Co

Ha yd en,

.......

...

Ernst & Ernst.

Grace (W. R.) & Co....

Hallgarten & Co..

Co...——-

PATERSON, N.

62
22

....

—...

ST.

,.....*.204

Goldman, Sachs & Co

Grant

Blankenhorn-Hunter-Dulin

....

—.1

.....

Ernst & Ernst—

PASADENA, CAL.

Frazier & Co

Grace

——
74
...—15

(J. S.) & Co..................... 27

Finch & TarbelL.........

H.) & Co

Grant (R.

Dunham

G.) & Co....

Goldman, Sachs & Co

FRANCE.

PARIS,

Becker (A.

Compton (William R.) Co..—

Banking Corporation 83

Foreign

....

Bank.».»..i„..

CITY, PANAMA.

PANAMA

Dominick & Dominick..

LOUIS, MO.

Burr (Geo.

Bank.... —59

National

Omaha

205

Discount Corporation of NewYork

Dominion

ST.

OMAHA, NEB.

Curtis & Sanger......

Page.

Page.
Compton (Wm. R.) Co

— ....

19
18

YOKOHAMA, JAPAN.
Yokohama Specie

Bank, Ltd.—

BANKING

SECTION

American Bankers' Association
46th Annual

Convention, Held at Washington, D. C., Oct. 19

INDEX TO

CONVENTION

The Federal Reserve System, Oscar Wells

Government

Finance—The

Page

Financial

Position

Page

Cotton

and

Co-operative

Marketing,

Robinson
The

Henry

Transportation

Act,

Its

Effect

The

Credit,

John
1--

-Page 107

Financing of Big Business, Sol Wexler__

Russia's Lesson
Service

the

World, Fred

Page 110

Kent

Organizations—Their Relation

Page 113

to the

Government

and the Public, Joseph H. Defrees
The Banker's Relation to
Annual Address of

Economic

Page 132

Policy Commission
...

Report of the Committee

the

Con¬

Page 133

Federal Legislation..

Page 133

State Legislation

__Page 134

Report of the Committee of Seven

Page 134

Action of Convention with

Page 134

Report of Committee

Regard to Cotton Financing-

Education

Annual Report of the General

Page 134

Secretary--....

Page 135

....

Report of General Counsel

Page 118

the Public, Fred W. Ellsworth

Page 132

the

Report of Committee

J.
—

vention

-Page 103

Public Relations.-

Association

Report

Pulleyn

Report of Committee

-Page

PROCEEDINGS.

Report of Acceptance Committee of the American Bankers'

Country, David F. Houston
The Banker and Agriculture, Edwin T, Meredith

Grain,

the

22, 1920.

Page 120

Retiring President, Richard S. Hawes.-Page 122

Committee

Protective

Page 137

International

Committee and

Relations

Page 138

Protective Department

Page 140

Report of Special Railroad Committee

Page 141

Page 125

Report of the Insurance Committee-.

Page 141

Representative McFadden

Page 126

Report of American Institute of Banking

Commerce and Marine

Page 127

Report of Committee of Five

Report of the Currency Commission

Page 129

Report of Clearing House Section.

Report of the Committee

Page 129

Report of State Bank Section

Page 130

Approval of Plans for Cotton Export Corporation

Page 144

Resolutions

Page 145

Report of the Gold Bonus Committee
Statement in

Behalf

Report of the Committee

Public and Private Thrift

Report of the Agricultural Commission

Report of Committee

Federal Reserve Membership Cam¬

paign..

Page 131

—

New Officers

The Federal Reserve
Oscar Wells,

By
Mr.

President and

of the

Gentlemen

American

asked

to address

to you

that

Bankers'

Association

been

vital

interest

the

platforms,

during

economists

bankers and

tallization of

this

number of years, even before the passage

need not recall
your

importance of the appeals that went

convention

upon

matter

members

the part played by the committees of

the

greater honor to be invited to talk

Federal Reserve Act.

of the

acknowledge, to

about the Federal Reserve System, for it is

has

Association for

you

gratefully

American

the

subject, but it is

any

which

were

the years

to many

appointment,

from

which

your

leading

contributing toward the

sentiment in favor of the enactment of

crys¬
new

banking currency law and which found its consummation
some

seven

Owen

bill.

represents

years

Perhaps

Congress

when

ago
no

ments, both

other legislation

in and out of Congress,

bankers you

transactions of the Federal

visions of the Act.

subject which
task

feel,

the

It is this

caused

assigned to

preparation,
as

me,

however,

and

sense

premises and

one

modern times
ele¬

does this law.

interested

Reserve banks to

hesitate

even

would lay

whenever

the

achievements.

and

the pro¬

familiarity of yours with

I approach it with

System is involved,
be

Glass-

with the process of fitting

now,
a

after

your

professional
upon

you

wherever

the

fundamentals

Page 144

Convention

Page 146

Responsibility.
your

peculiar,
Is

the

knowledge

Federal

ply
to

the

have

them

I have

so.

America

kind

your

serve
come

Board,

your

you

plain duty

their

upon

believe

the
sup¬

can

is not

only

being accepted.
that you

have

I
not

from such

the

high

dominance

responding to the

the

Federal

Re¬

other institution, even though it may

any

source

that of

Senator of my own political faith.

United States

If, however, the system

purposes for which you

thought it

was

created, taking into full account the varying problems that
have arisen

ness

during its existence,

which

you

are

the

you

render the busi¬

can

authentic

representatives,

important service, by giving to it your whole-hearted stamp
of

approval.

One

banker

friend

mine

expressed

him¬

self recently as being one hundred per cent, for the
system
and

ninety-five

cent,

per

for the administration

need not tell you that a great deal of
the

Federal

constructive
This

aid

theme

Reserve

Board

it.

self-sacrificing talent

and

the officers

among

Reserve banks, whose labors, without your
become

to be opened to

ever

insist

under

unless it

vocational

meeting

If not and you

patience with the charge that the bankers

are

Reserve

and

intimate

halted in the expression of your views and that you will not
do

the Federal

similar

reasonably

System

measures,

but

faith

enough

Federal

Reserve

corrective

offer

responsibility

relationship

demands of economic conditions?

knowledge of it.

and

responsibility is correspondingly great.

your

few weeks of

Page 143

System

undertaking the

because it is and doubtless shall

great

great deal of misgiving

ability to add anything to

obligation

the

not only helped in the making of it, but you

have been intimately connected
the

passed

the combined efforts of ail

Page 143

....

Elected

Bankers'
As

honor,

.....

President First National Bank, Birmingham, Ala.

Association:
It

Adopted by

Page 142

should

too

burdens of intolerable

broad
very

long

covered

one,

and

by
as

proportion.

one

the

address,

subject is

the delegates of the convention I shall, in

recognition of the limitations of the occasion and in defer¬
ence

to those who follow

myself chiefly to

in the discussion of

the functions, policies,

powers

it, confine
and limi¬

tations of the Federal Reserve Board and the Federal Re-

CONVENTION.

BANKERS'

<12

credit. What I shall say
will be in defense of the system and the administration of
it in this particular phase of its operations, not because I
think it needs .defense but because there is seemingly so
much that is misunderstood concerning its purposes as
their relation to

banks in

serve

the expansion and the

they apply both to

control of banking

credit.

in the attitude

than in the difference

operations

the

better exemplified
of the public towards

of human nature are no

The vagaries

during the

Federal Reserve Act.

the

the essential function and the
necessary to restrict the use of the

period when expansion was
when it

time

became

and extravagance

gacy

easily acquired habits while
the results of self denial and

are

thrift and accumulation are

heard nothing

Only a few months ago we

hardships.

some

Profli¬

Federal Reserve System.

expansive power of the

It was a. matter of
unparailed task of not
only financing the war by furnishing the funds required for
the direct expenditure of the Treasury, but that we had
praise of the new banking system.

but

pride that we had accomplished the

industry
of volume,
the functions of the Federal
of commerce and

taken care of the credit needs

greatly beyond our wildest dreams

to an extent

and

giveri the credit to

had

There was no doubt in our

Reserve banks.
the old

and

somewhat keener discretion in

for non-essential

gradual

member banks to
the granting of

of credits by appealing to

readjustment
exercise

policy of a

undertook a

Federal1 Reserve banks

the

orderly

and

and the liquidation in a

purposes

of like

loans

existing

manner

injustice done to many

character, we began to hear of the

directed by those in charge of

quarters and the system as

responsible for all of the ills of a tight

its affairs was held
money

without the

Reserve Board

the Federal

When

of war.

strain

loans

Independent

inelastic currency and

would have suffered a collapse even

reserves

added

system

minds but that

that the contraction will
of credit will be
restored without barm or fear.
But you understand that
under the emergency of war, when much of the expansion
had been occasioned by the needed stimulation of Govern¬
ment financing, that the note issuing function was being
s<if-liquidating commercial paper
be

given for the purchase of
loss liquid.
Under any
condition a system which undertakes to provide for an
expansion of credit must have the means to control it or
else it is robbed of the essential quality of elasticity, but
the curtailment need arrives much earlier if it has al¬
ready assumed obligations more or less fixed in character,
as was the case with the Federal Reserve banks when they

partially supported by the notes

this point of
undertaking to control credit in which the Federal Reserve
Board and the Federal Reserve banks reluctantly engaged,
that the system lias received the greatest censure.
The
advocates of continuously low rates and further expansion
seem to hold to the opinion that to restrict the growth of
credit

before.

ever

It Is more so to-day

and at last

revenue

inspiration,

the

bank

the

either

bears

of banking in its

elasticity in

this

laws

direct

collateral

It was the develop¬

the currency

required

their fine zeal for the

surely follow

seasonal

supply because of the

during the crop moving

our

reserve

for the mobilization

funds except

reservoir

common

but

reserves,

for changing the location

use

that by

they might be

gathering them
used to

take

into

care

abnormal demand for credit, by forming the basis of the

note
is

argued

would not have had any

expanded credit situation, for the two went to¬

issuing power of the federal banking institutions which

the

expansive power of

concerned.
nel

for

credit,

the system

far

credit

Thus we have an elastic currency and a chan¬
greater

Act

Reserve

not

volume

only

of rediscounting.

The

provides the quantitative

Federal

means

but through the definition of the eligibility of re¬

discounts it emphasizes the value of its qualitative feature.
Credit

From
has

the

been

credit.

Federal

Reserve

System

in exercising its function of expanding

engaged

Its

operations

opened

with

the

need

of course is a

law

tion

in Europe.
before
war

the

ticipant, expansion
The

There

was

but little

or no contrac¬

when our
was

own

by the

the need forth again
country

the established

became

par¬

order of the day.

theory of the note issuing power of the Federal Re¬

serve

bank

that

argument

Who among you has not been asked
paid so long as the maker can pre¬
you

in the business of

are

Liquidation in banking is as essential as

solvency and credit

control in Federal Reserve banking is a

concomitant to credit

sound

that

of credit at banks, with which

condition and

lending money?

writing statutes upon the

analogous

books.

solvent

even

expansion.

long as the notes are sustained

Fri th ism.

The criticism of
lie

the Federal Reserve System, or

System, pertaining to its

Reserve

rediscounting or credit

by those who were sincere

giving function, uttered either

opposition to the policies inaugurated

in their

and by con¬

divergent views, through

viction

temperament held to

lack

understanding the impelling purposes,

wilful

who

soundness
desire

and

disobedience

fault

found

their

passed through three distinct stages.
the
gan
too

and

for

Federal

selfishness

Victory notes.

The first was when
banks, be¬

slight increase in rates, the

renewals of loans

frequent

the uninitiated, has

Reserve banks as well as member

to discourage through

those

conception

own

ol!

because

pander to the prejudice of

it may

administration of the Federal

accurate to say the

Liberty bonds

secured by

Very naturally as the need of credit

commercial and productive

purposes

became more ap¬

parent, and bond-secured loans grew less liquid, the banks

Reserve

practice of gradual

The Federal

retirement.

banks were anxious to reduce the volume of note

issues against

this bond-secured paper, gradually substitut¬

standing issues might be lessened through the payment of

business demands stimulated

requirements called

and then, of course,

thing

why a debt should be
sent

reserve,

production, which
altogether to be desired, is like saying

all familiar.

you are

gold

of sustaining an increased

create wealth

can

irrespective

exhausted,

been

lias

for the purpose

because

to retire the emergency currency called out

derangement of the expo'rt market with the outbreak

activity of

credit control should be ignored
of the Federal Reserve banks

until the full lending power

ing therefor paper of a more liquid nature, that such out¬

which

war

yield of production, sufficient both
of maturity.
To my mind, any

time

with

of the

must

the day of reckoning which

argument to the effect that

instituted

Expansion.

beginning the

very

and

volume

reserves.

contraction of debts, not securely sup¬

the

ported by an adequate
as

gold

artificial ease of the moment, they

to take into account

fail

greater

period particularly, but the abnormal demand for currency

gether.

the lowering of

than

industries,

the issuance of

greater menace to the

growth of our municipalities

prosperity of producers, the

more adquate system

country.

demands upon us for that medium

meant

it may be maintained by

Federal Reserve notes constitutes a

and

upon

capacity of supplying credit which

led to the conditions requiring a

banking

source

Most every other

relationship to the question of credit.
ment

the

of the usual transac¬

the justification

tion, particularly in commercial banks.
function

long

self-liquid.

termed

against liquidness in lines

Credit Is the keynote of banking.
than

those

bond-secured loans on a parity with

began to admit
ordinarly

federal
Credits.

hence

and

bonds

Government

that

market.

the normal balance

and

automatic,

the collateral.
erate

This

was

urged by the critics to be

plan to depress the market of

curities, notwithstandig

result

demand

of the

universal

quent increasing rates

delib¬

Government war se¬

decline had already set in

upon

for

credit

and

other securities.

the

conse¬

They

were

being sold in large quantities by those who had bought them
act of

patriotism and who

the alternative of

paying

were

taking their losses

high rate for

money

needed

BANKING

SECTION.

in commercial
enterprises.

For the Federal Reserve banks

to have maintained rates

market

sufficiently low to have held the

the

banks but

non-essentials,

edict

carrying of the Government-secured loans already in

the
and

induced

would have

and

that

these

undeniably

\
should

through

the

prescribed
of

issuance

would

pressed,

almost

both

conclude

publicly

from

and

the

private,

comments

since

ex¬

Federal

the

defeated the elasticity of their own currency as well

Reserve

Board

took

prohibited the needed accommoations to banks for other

reserves

Federal Reserve banks should be protected

purposes.

It is perhaps only fair to say that if any mistake

was made

by the Federal Reserve banks in connection with

credit,

the

absorption

securities

war

the public

and

the

time when

artificial

even

Government

obligations

patriotism

and

governmental

of stimulating the sale of

means

justified.

seemed

the

subse¬

aid

quent cold light of analysis, of a declining market, it is easy
to conclude that the lower

those

maintained

borrow and

rates

the

banks

bonds,

bond-paper,

well

Federal

was

held blamable

and

the argument

went

condition

was

with

agree

the

Federal

forth
to

ours

that

Reserve

that what

the

banks,

needed

was

bring things back to

abundance

Federal

of cheap

undertake

afford

its

the

"to

extend

and

reasonably

The

made with

has

The immediate ob¬

cattle

against

member

due

member

and

depend

regard for

safeguard the situation
of the
about

Federal

Reserve

System and in

stabilization of general

may

be reflected

cost

living.

need

seemed

gravated

the
of

well

doing to bring

refer,

need

were

deflation

production.

irreconcilable.

extravagance

which

The

was

ag¬

have

may

been the result of the relaxation from the tension in which
had

hoped

held

that, by

made

by the anxieties of the

some

natural

one

the

channels

favored

both,

with

the

Many

wages.

creasing
the

tendency

the

cost

further
many

been

exercised

of crdit at

toward

There is

have

now

better

the

upon

effect

were not

the

inflation,

It was,

forcing

mothers

great cost.

vincingly
the

cost

The

that

production

the

and

will

years

substantial

particularly
of

Reserve

System

expansion

of course, natural for

market

that

feel

part of

better price.
the

the

that

price

the

industry
is

now

con¬

under

growing of cotton in

influence

the

inevitable

the season's crop can

be held for

The practical difficulty lies in the fact that

production of the crop has already put

giving

strain upon

powers of the banks in the cotton

produc¬

for them to go without

easy

incurring the dangers of over-extension.
The

rediscounting

machinery

the

Federal

Reserve

banks is, of course, available to the member banks located

within

indications

young

loss of the present unless by the further extension of credit

essential

in¬

market

de¬

herds.

representatives

maintain

subsequent

prices and
the

the

upon

of future

measure

The cotton crop of the South has been
produced this year
at

alarmed

Federal

thereby
the

cattle

of live stock

area

the

being

for

withdrawn,
cattle and

and

because

now

market

open

ing area, beyond which it is not

through

safely

existing conditions of

not

production.

surface

under

the credit

to check the further

earlier date.

might

substantial belief that it

very

its capacity

somewhat

were

contained

situation

prosperity.
would
had

cessation

any

resultant

economy.

had

discounts, ad¬
be

banks."

the increase

caught in the vicious circle of increasing

were

production

means,

lessening of the other, if

natural growth of thrift and

war.

to overtake consumption either
through

the

been

and

ad¬

without

creasing supply of available credit has been in

consequent lower
I

increased

nigh

universal

economic

position

conditions which

which

reserve

business

prices and

time

with

the industrial

situation

lower

At the

frankly confronted
and

it relates to the

undertaking to

legal
to

th<^ claim and de¬

by banks outside of the

the

member bank"

may

which

that

Federal

through

and

such

production

the

directors

any

bank

one

have

save

under

bank

industry is in jeopardy just
to

grown

each

impartially

accommodations

mands of other

banks,

paper sustained

should

facilities

industry

invoked

Federal

banks

Such

urgent

the

power

Reserve

"fairly and

favor

soundly

member

being

affairs

jective of the policy of the Federal Reserve Board and the
Reserve

industry.

rediscounting

lending

Federal

the

affairs

vancements

you

control

application
of

the

cannot

and

regulate prices, but to leave the price level to competition
under the law of supply and demand.

section

fundamental purpose of the

recognized

that

discrimination

province of

crisis,

banks

minister

most

Surely

within the

not

System

credit.

Act

known

obligation

normal

Reserve

contributing to the high cost, of living

in this broad land of

will

approached

diminishing supply of credit

the

Reserve

Even when the need is

for the purpose of preventing the too free use of the

given

Reserve

ing borrowing transactions with local banking institutions.

un¬

Again, the Federal Reserve System with the increase of

privileges

Federal

priority board, of the

through member banks and denies the practice of initiat¬

and

rediscounting

need

type of

through the channels of

by convincing the

sort of financial

distribution

wise.

and

urgent

obtained

the

gold

the

and

buy argument of salesmanship were both

rates fixed in recognition of a

money

mental attitude ignores the

that

had become

Board, acting

atmosphere

May

lending of

much

position last

discriminating policy

that

political influence

earlier,

the

consequent partially inelastic note issue, that it was made

by the Federal Reserve Board.

One

creation of others

the

;;

specifically

securities would have meant not only

such

up on

case

left
for

the

territory covered by

industries.

whether

for the

use

The

there

are

of it.

the

sufficient

take

rights

of the

care

years.

important

question

further expansion, to conserve their

clothing in succeeding

these two

remaining

and

either

application

respective needs

uses

for food and

undertake to go beyond*

established facilities vouchsafed through
the

the operation

rediscounting privileges of member banks would be

those charged with the administration of its affairs to have

equivalent to

waited

modities by the use of bank credits.

before

taking

what

would

have

been

regarded

undertaking the

valorization

those

com¬

survey a

little

drastic steps in such a situation.
The

last

stage of criticism

already alluded,
cost to the

that,

constructed;

in the industries may be not

the

that roads

that

funds

Credtt Control.

have

the

provided
the

stock

perma¬

for

housing

investing

market

public
be

con¬
now

market.

those

who

short, that

must

any

pansion of credit should not fall
activities

financing

public buildings may

may

only main¬

the application of credit facilities not

available

money

and

sustained

fluctuation

easily

to the extent of

even

heretofore

trolled through

the

to which

position of the Federal Reserve banks,

improvements;

and that

one

reserve

production

campaigns

the.

the need of further credit at whatever

tained but increased
nent

which

mankind

upon

curtailment

the

burden upon

has

unless perforce it be those engaged in

rely

may

grown

call

the
any

ex¬

accustomed,

the obnoxious traffic

may

have

interesting study for

minutely

this

function

already concluded to be

ments

federal

pans'on.

banking

credit

control

essential

system

among

that

which

Congress confirmed the position

credit

for

Federal

the Federal Reserve

member

discount
A

any

number

visions

banks
be

of
this

satisfactory

banks

establish

borrowings

have

amendment

results.

bank,

Board, to fix

and

applied

the

Reserve

The

with

the

Class

what

year,

consent

basic line of credit

progressive
in

rates

excess

already exercised

with

ex-

have taken

by amending the law, in the early part of the present
authorizing

the ele¬

they

the

pro¬

believe to

banker

thereof.

directors,

representing three groups of member banks, and the bank-

BANKERS' CONVENTION.

94
who

ers

which
districts,
the soundness of the doctrine of
of

members

are

Advisory, Council,

the

from each of the twelve

body

consists of

gave

their sanction to

one

in a conference with the

control after taking part

credit

Federal Reserve Board, at

members of the

subject

whole

discussed,

thoroughly

was

which time the
not alone the

undertaking to induce a more
supply afforded
banks through the rediscounting functions of
Reserve banks, but the opportuneness of the time
methods to be used that credit conditions might

general policy of the system

employment of the credit

discriminating
member

Federal

the

and

be the least

interest

your

seemed to be in agreement:

that conference

(a)

be further

may

contraction

must be followed by

That expansion

and the power of curtail-

through the capacity of control
ment.

That while there is no

(b)

minimum reserve of

virtue in fixing an arbitrary
of soundness,

gold, that, in the interest

low reserve postion

should not be readily

assumed.

gradual and orderly.
(d)
That while curtailment of the volume of loans was
not expected or desired that a further expansion especially
That deflation should be

(c)

secure
as

were

approaching the crop moving period.

Board or the Federal
define non-

undertake to

logically

could

banks

Reserve

Federal Reserve

the

That

(e)

essential production, especially

greater supply for

prevented in order to

should be

credits

non-essential

essential loans, but that

it should be left to individual bank

executives.

responsiveness upon
exercise economy and

That the situation required a

(/)

the part

of banks and the public to

conserve

banking credit.

best

the

That

(g)

picture of credit conditions was
notwithstanding that the peak

exhibited by the fact, that

seasonal

of the

from

three,

requirements had not been reached, that

Federal Reserve banks were then borrowing

of the

seven

of them neither borrowing nor lending,

two

best means of regulating or controlling

That the

(h)

the credit situation is by

advancing the discount rates Of

banks.

the Federal Reserve

The effect of that conference was to

the

direct the attention

the bankers to the economic value of

public and

checking up the too free
result has been that

of banking credit, and the

use

while

have had no liquidation

wholesome

credit

time of its adjournment.

situation

evidences of

the volume of bank loans that we have many

than obtained at

the

The meeting was .followed by the

raising of rates by a number of the Federal Reserve banks,

Government Finance—The

great pleasure and privilege to appear

many achievements to the credit of tBe
I do not believe that any of them are as

system, and while
vital to its fundamental soundness or that their roots are so deeply imbedded in its perpetuity, they are interesting and altogether
worthy of your study of them. One of them, the development of the collection of items which has become known

universal par clearance plan, has been made tbe
subject of a debate at one of the section meetings of this
Convention, thus clearly demonstrating the scope of its
influence. The development of the bank acceptances or
for that matter the emphasis placed upon trade acceptances
are within the purview of the Federal Reserve System and
have been made the subjects of entire addresses. Main-

as the

taining the elasticity of the Federal Reserve note issues,
wholly apart from the relation it bears to the function of
furnishing credit, is a matter which some day must be
threshed out with some definiteness. The abnormal profits
of the Federal Reserve banks are producing a psychological
effect upon the minds of the bankers and the public to such
an extent as to furnish a problem all its own. As valuable
as these may be and however far reaching they may become
as questions to be met and solved, both the present and
the future worth of our new banking and currency law are
immutably bound up with the soundness of the reserve
position of the Federal Reserve banks and the influence
they may exert upon the improved character and greater
liquidness of bank credits.
In conclusion I again bespeak your wider interest, better
understanding and courageous conduct of your conviction
concerning all things pertaining to the greater soundness
of that element of banking, without which there can be
uo assured success, the giving and withholding of credit.

Financial Position of the Country

before this

You and those you repre¬
important position in the financial affairs
Very many people, both here and abroad,

gathering of American bankers.
sent occupy an

the nation.

interested in you and will attach much

are

what you say

and do.

importance to

I shall not presume to speak to you

responsibilities or the funda¬
bear towards the problems of sound

concerning your duties and
relation you

mental
finance

You are a part of a great whole.

banking.

and

You are on the

firing line and for six years you have seen

active service and I have no doubt that

some

heavy and

many

of you could exhibit the scars

the fact that you

But in spite
have aided in

strong and sound in the greatest strain
endured, in making it possible to finance and

keeping this nation
it has

ever

win the war,

and in bearing the

burdens during a trying

readjustment, you wear no decorations and have
few testimonials.
For the first time in its history

period of
received
in

great crisis this

nation

has1 had

an adequate

banking

of the U. S. Treasury.

machinery and system
est
in

orderly fashion.

must be accorded

be,

" nation's

bankers and

and is now proceeding

to the bankers and banks of

this

what the banking laws or machinery

banking cannot be better than its
You have done your part pa¬

business men.

triotically with patience,
have at all

Much of the credit for the happy out¬

nation, for no matter
may

■

and it has passed through the great¬

financial storm of all time safely

come

intelligence and judgment. You
the Treasury and other

times co-operated with

agencies, and I gladly extend to you ex¬
Treasury's appreciation and thanks.
essential that this co-operation and the high spirit

governmental

pressions of the
It

of battle.

have, served, that you

function of the country's

banking system is fixed for all time,
The presentation of only one of the several distinct and
important activities of the Federal Reserve System may
imply that there are no others, that they do not contain
any problems worthy of mention or that they are insignificant in comparison. As a matter of fact there are many
responsibilities to be discharged by, as well as there are

By David F. Houston, Secretary

It is

progressive rates by several

and was supported by an almost universal
resolve of the bankers of the country to do their share
towards maintaining a sound reserve position, that the
prestige of our currency and banking law^ might endure,
This was the first real effort of the Federal Reserve
System to check undue credit expansion and to induce a
normal and healthy liquidation. While the solution of
the problem is yet unfinished, I am constrained to believe
that a very substantial contribution has been made to
the economic advantage of our nation and that the prin-

more of them,

ciples of credit control as a proper

disturbed.

stimulated in this
problem of the Federal Reserve System which is still
unsolved, I shall enumerate some of the things upon which
That

and by the application of the

patriotism persist.

tions to face.

We still have many difficult situa¬
of the woods, so to speak.

We are not yet out

problems. The fighting
remain. The sad thing about
war is that it Is not ended when the fighting ceases.
It
leaves behind It hideous burdens and legacies which Involve
sacrifices for many generations.
And these trying situa-

We still

confront highly abnormal

has ceased

but war problems

BANKING
tions

confronting

rendered in

are

measure

cult than similar situations
during the war for
reason

that

unfortunately

demobilized,
need

about

many people

patriotism quite

patriotism

the

intense

been

has her

the

and wisdom at

require much clear thinking and
citizens.

good

financial
be

field

heavy

fog

the

over

our

political

It will

of all
the

over

cannot

easily

now we are confronted with

exactly the opposite sort,

For at least two years the
public has been excited

abnormally

prices

high

and

the

over

high

cost

living resulting from increased costs, inflation and

travagance.

Our

thoughts have

been

dent measures to bring the nation
war

markets

result

the

world.

For

blame.

The

now

mainly

failure

nation, and the failure of

this

and

war,

circumstances
the

way

seems

better arrangements

farmers that

some

measures

others of which

distressed
of

some

they

being hit first, if not exclusively.

-naturally disturbed and
through

to dqvise

small

They

and

are

seeking

are

which

the

are

not

are

practical

relief
and

suicidal.

are

The

For many months we have been
facing one sort of prob-

prevalence

the

particular

nations everywhere to
date,

dissipated.

lem;

measure

one

for the storage and marketing of farm products.

down

and

situation

command.

settled

conditions of

things

all

courage on the part

has

these

find

active period of transition and it will
require of us all the

patience, moderation

disordered

mjjjst of

war.

are

simple

part

not realizing that peace

difficulties.

many

has

diffi-

SECTION.

conditions,

but

credits which

marked

was

There

The

during the

was

with

pru-

safely back, not to pre-

stable conditions.

with the armistice.

occupied

ex-

expansion

did not end

war

real apprehension every-

way

first impulse of
many who are searching for the
out is to turn to the Government, and
especially to

the Treasury,
salvation.

as the sole

instrumentality for

full economic

This

disposition, well developed before
was reinforced during hostilities by practices of

the war,
the

eminent which became necessary for the successful

cution of the

the

war

and for the preservation of national life,

disposition

same

which

causes

Government for appropriations for
many even of a

rather

than

Gov-

prose-

all

resort

the

sorts of

It is this

purely local character.

enterprises,

disposition,

self-aggrandizing efforts

Federal

Depart-

where that there might be industrial
stagnation,

unemploy-

ments

ment and

that busi-

planation of mounting Federal budgets and of
centralizing
tendencies frequently criticized.
If there is a
fault, and I
think there is, the blame must rest largely on the
public,
which
remains
quiescent
while
interested

reduced

should

ness

whose

forward.

hands

credits

production.

the

appeal

Business

initiative

extended.

were

The

and

men

lay

was

the

responded

banks

liberal

and

Between the armistice and October

to extend their

clamorous.

mated, increased

will be

1920,
steps
the

the

recommendation

credit

threatened with

and
to

billions

seven

than

certain

prices,

expansion;

but

dollars

and

In January,

Reserve

persisted.

Banks,

were

continuance and extension of the cycle of

of demands of

labor

for

additional

wages,

situation which might make it difficult for the banks

give adequate aid in emergencies.

taken and for
worked and

made

Banks

equilibrium

was

established,

January 23, 1920, when the advance

the rediscount

rates

the

Federal

Reserve

per

cept. for commercial paper, to the end of

the

September,
in the

Further steps were

few weeks in the early summer the brakes

something like

Still in the period from
was

$740,000,000.

taken, partly through increased rates, to control

were

undue

rising

than

loans

and

investments

all

the

banks

country, it is estimated, increased approximately one

billion

dollars,

460 millions.

and

billions

Federal

But what

accommodations
commerce,

the

extended

estimated,

dollars

and

Reserve

note

important is the fact that

agriculture,
increased

possibly

circulation

industry
than

four

nearer

and
three

billions,

this

which

the

main

When

the

people

appreciate

extremely manifested

and menacing, and it is of

the

Individuals and communities

return to
We

and

but

have not

concentrated
producers

self-reliance.

whose

products

keted and. whose prices
in

certain

cannot

those

falling,

They ask

sections

normal degree of

demobilized
whose

War Finance Corporation be

the

that

the

Government

Since

the

and

against

stock

season

opened

crop-moving

the loans have increased at
a

rate
A

the

costs,

be in

Reserve

opening for

operate.

and

the

Resistance

of his

own.

high

wave

prices

passed,

industrial

and the

condi-

way

Neither of these things is feasible.

ment purposes.

not be.

The Treasury has no

It is not in the banking business and should

It *s borrowing

rent obligations in

ments, &t

before

the

periodically to meet

money

intervals

between

cost of about 6 per cent.

the

Federal

bad a surplus, did deposit small

when

sums

the

tion is

towards

reduction

the

itself when counter forces began
of the producer

the part

was

Every producer is willing for the

There is

much

Just

desirable that

fall but protests the

human

nature

this,

question that they

difficulties.

They

products

The
come

are

now

confronted with serious

products
in

over

of
a

the
very

farms

short

have

period

The machinery for storage and distribu-

volumes.

yet crude and inadequate and the prices of the

which

normally

marked tendency

such

circumstances

show

to fall are unduly affected owing to the

war

Quickly as possible.
any

is one which

much

agencies

should

The only

possible bearing

cease

power
on

function

make

of the corporation

par-

after

purposes

forward, Congress

advances

Fearing that with

ered the Corporation, in order to promote

foreign nations,

war

the immediate situation

the cessation of exports for military

pre-war

clearly

was

was inserted after the armistice with

armistice, exports might not

was

war.

ticular possible state of facts in view.

Banks in cer-

Furthermore, the War Finance Corporation

they

in great

existence

and

rediscounting for banks in

agency and was created to help win the

tions.

enormous.

emergencies;

was ever deposited for crop-moving purposes by the Secre-

cline,

real

meet

crop-moving sections approximately six times

the chief complaint

are

the

Treasury

of money in banks

interesting to note that at this time Reserve

tain sections of the country

pay-

instituted

was

time

qur-

large tax

On several occasions

System

Reserve

Secretary of the Treasury, at

from the producers of agricultural commodities; and
is

the

money to lend and no money to deposit except for Govern-

which has

normal activities.

the tendency

but not much reasonableness.
comes

been

circulation

decreasing,

products of every other producer

and

note

of adjustment,

process

immediately manifested.

there

of 22 millions

the crest of the

appears,

of living manifested

decline

collateral,

in July of this year

average rate

expansion

seemed

the

Scarcely had
cost

bond

resumed,

tary of the Treasury.

ago,

credit

troubles

Labor

tions

Federal

and

millions.

little while

high

and

week

reduction of loans to

mar-

deposit

activities

but this necessity is obviated by reason of the
and practices of the Federal Reserve System,

shifting of funds following the

demanding that

either

that

satisfactorily
are

dustrial and commercial
the

many

gaze

In the present circumstances

are

the Treasury intervene.

unwholesome

in various sections of «the country

being made possible by

are

there

importance that

have

demobilized

on the Treasury.

highest

self-help

money

fact

remedy and not until then.

This attitude

groups

this

large increase in the accommodations for agricultural, inpurposes

ex-

groups

1, 1920, the loans and investments of all banks, it is estiFederal Reserve notes

functions,

with

commerce

under

the

empow-

certain

condi-

matter of fact, exports not only did not de-

increased at

exports

lions of dollars,

had

astounding

risen to about

and while

in 1918,

war, they were valued at six

in 1919 to 7.9 billions and
the rate of

eight billions,

proximately

consist

are

billions

rate.

two

and

While

the

one-half

bil-

the last year

going forward this

and 50

the

of dollars, they rose

per

cent,

of agricultural products.

year

these

at
ap-

clear

that the condition contemplated by Congress did not arise.

BANKERS'

9(5

judgment,

stated, improvement

Conference correctly

Brussels

recent

appreciation of

of which, as the

prompt peace, upon the full restoration

furthermore, as the same body pointed out,

is the chief obstacle in the way

this obstacle the Government

there has been

of thi,s country cannot remove.

Let

of its own.
would have to borrow the money, and

the Treasury

It at

borrow

of'

cost

forward in such volume as to continue the

their refunding

already existing

productive activities,

their

everywhere,
transportation on land and

tions

with the return of millions of men to

beginnings of more normal conditions

with the

restoration of better

with the
sea,

which

of goods, reverse

Government

this

that

expect

trouble is

over,

with

While business is

the

adequate control

higher

orderly program

of retirement.

The first is

clear:

theoretically

seem

produce what farmers buy should be

Victory notes,

redemption prior to

the debt and to make

over

practicable for the country to follow
things

maturity at

Liberty bonds and

the Treasury of

options to

Treasury

of farm

products.
Several

are

after the principal

maturity, were carefully arranged with a view to give the

derangements,

particularly at this season, in the marketing

that those who

There

reduction.

debt

at a lower rate of interest, but there are

maturities of

The

which must receive the most

consideration.

and sympathetic

fundamentally sound there are large present
and

these sugges¬

that it would tend

rate of interest.

But there is a real problem
earnest

program

instances of refunding of loans

few instances of their refunding before

prices.

movement of

premium before

Fundamental objections to

that refunding is unnecessary,

are

many

world-wide

control a

can

and perhaps go to

par

well-considered

It is unreasonable to

thwart.

can

towards

maturity.

perpetuate the war debt, and would upset the Treasury's

nations once more
forces are operating

and with the fuller contribution of

to the world's stock

interest in the meantime.

There is little doubt that the

obligation will be met.

return

rising tide of costs and prices; and now

checking the

major part of the outstanding bonds will in the near future

No Government succeeded

did control.

That

motion which no Gov¬

During the war forces were set in
ernment could

of the bonds.

It opposed on

obligation of the Government is to pay the principal

The

of the loans at maturity and the

Board and the Federal Reserve Banks.

Reserve

market prices

strongly opposes this bonus proposal for capital.

even

of the powers,

and

forces,

economic

obligations bearing a higher rate of
improve

public grounds the cash bonus proposals for soldiers.

of under¬
policies and
possibilities not only of the Treasury but also of the Federal
representation and misunderstanding of the facts,

lying

of the need of re¬

There are those who advocate

is opposed to any such step.

The Treasury

vast deal of mis¬

there is a

but

perhaps,

urgent

discussion

little

into

order

interest

derangements of international exchange.

Signs are abundant that

been

has

funding the Liberty loans.

stimulate exports which are going

called upon to do this to

less

matters

turn

less important.

There

And it is being

about 6 per cent.

refute the assertion that

contraction of credits.

now

certainly

believe that they

to the satisfaction of every in¬

evidence this disposition and they

The War Finance Corporation has no money
It or

and

of products

to I promote the

widely published and well known to you

Facts

dividual.

of their securing credit and

They will, in

their power

will succeed, although not

borrowing coun¬

sufficient satisfactory securities. This

tries of Europe lack

difficult problem.

the

everything

distribution

orderly

largely depends. And

of the financial position of the world

This is

it is with good

including the member banks, have a keen and sympathetic

world in establishing a

other civilized nations of the

the

Reserve Board.

accord with the facts

out

All the authorities of the Federal Reserve System,

ethics.

itself able to join

This country has not yet found

much

imposed by an unfortunate situ¬

But there are limitations

their unwillingness or inability to extend

loans to the action of the Federal

obtain funds with which to finance exports.

been unable to

ation.

and of ascribing

Individuals or firms have not

financed.

well known in Washington of passing the buck

in the game

in enormous volume and are

Exports have gone forward

being privately

CONVENTION.

There has already been

willing

marked improvement in the pub-

everything in their power to continue production and

to do

incident to falling

sustain their fair part of the burden

contemporaneous reduction of the

prices of all commo¬

dities, and one might be made for a prior

business

ideal

this

Whether

can

part current facts testify.
consistent

and

gradual

since

the

turnover

translated into action

fully

of determining but that it is being

no means

omitted

reduction in the

in
rapid while that of the farmer is seasonal.
products,

manufactured

prices

have

justice

An argument certainly can be made for the

prices.

with

translated

The second is that nothing be

sound

finance

marketing

orderly

all

assist

commodities

the

and

particularly of the farmers' products, which represent the
results of

whole year's operations and but a

That you also do I have no doubt.

recognize this I know.
I

single turn¬

That the authorities of the Federal Reserve System

over.

sure

that

the bankers

of this nation recognize

their

will do

On the

situation.

basis of daily Treasury state¬

ments, the gross debt of the United States

four billions represented loan

On September 30, 1920, the gross debt was

within the year.

$24,087,000,000,
floating debt
000,000

less

reduction of over 2y2 billions, while the

was

than

$2,437,000,000, or approximately $1,G00,August 31,

effected chiefly

were

1919.

These reductions

by the application of the proceeds of

taxation and salvage and were made

possible to some extent

of reduced expenditure
of loan certificates.

ductions in both

and the retirement of large amounts

The Treasury expects that further re¬

gross

and floating debt will be shown at

the end of the current month and

current quarter

;.';'r

crease.

The

there will be a

substantial de¬

present gross

debt of $24,087,000,000 includes $15,-

of Liberty

293,000,000

that by the close of the

niuch

bonds maturing

between 1928 and

maturing in May,

marketing of products, especially in this seasonal period.

1923, approximately 800 millions of war savings

aided

non-member banks of the nation,

wise actoin of the Federal Reserve Banks,

the

must relief be sought and

cannot furnish it.

Board

Federal Reserve

dividuals
the

It is

to lend.

money

The

but

can

rediscount

board
loans

nor

It has

lending power and no

supervisory body and not

Banks have

assist in

member

make,

Bank has

money

any

non-member

banks.

bank.

to lend to in¬

the creation of credit

of eligible paper from

the Reserve

which

decline

The Federal Reserve

furnished.

through

Neither the

discretion
banks may

to the

make or

the rates at which they extend their

accommodation to customers; and may I pause to say that
there are indications

(but I am glad to say of

practice on the part of some banks

relatively few banks,) of indulging

result

by the reductions of Treasury balances effected as a

1947, about 4% billions of Victory notes

the member and

nearly

and tax certificates maturing

everything in their power to aid in the gradual and orderly

From

August 31,

1919, was slightly over 261,£ billion dollars, of which

obligation to see that the fundamental activities of their
several communities are provided for and that they

debt

lie

maturing mainly on January 1,
loan and
a

certificates

1923, and $2,347,000,000 of

tax certificates maturing

within

year.

Within

May, 1923, there
payable about 7Y2 billions of Government obli¬

period of less than three years, ending in

will become

gations, of which approximately

from

taxes

but also to

able part

and

salvage be kept sufficiently high not only

bills, including interest and sinking

to current

year

retire the floating

the

there

fund charges,

indebtedness and a consider¬

of the Victory notes before the close of the

1923.

burdens placed upon the Treasury

Transportation Act.

will

fiscal

Earlier plans and expectations were disarranged

by the unexpectedly large
by

4^4 billions represent Vic¬
receipts

Sound fiscal policy dictates that the

notes.

tory

be paid on

According to the estimates

account of the railroads I during the

BANKING
current fiscal
year

probably

billion dollars, of which

SECTION.
with

quarter billion has
already been called for and paid. It is
obvious that these
payments will limit the progress which
the Government had
expected to make in the retirement
of the

floating debt.

It is expected, however,

rapid

reduction

end of the fiscal

year,

the

floating debt.

may

brought

low

billion

and

half.

the

end

that

reduced

perhaps'a

year

the

sinking-fund operations.
will

then

will

have

mature

should

billion

should

dollars

The remainder,

become

during

Victory loan

half

substantially

the

say

1923,

before

profits taxes.

maturity,

income

Victory loan

that

maturity it would stand at approximately three billions

dollars.

redeemed

the

meantime,

January 1, 1923, the

un¬

savings certificates of the series of 1918 will

war

mature and must be provided for.

The Treasury is commit¬

ted to the continuance of the Government

savings plan and

expects to push the campaign for the sale of these securities

during the coming
fective
these

securities

That the campaign has been

year.

illustrated
but

not

only by

also

the

savings invested

general

spirit

ef¬
in

tries associated with

billions

ten

United

repayments would
there

has

The

make

by the Sinking Fund.

late

in the

dollars.

States

were

the

first

ground

one

it is based

indebtedness

little

by the

then

of our debt.
as

how

Of
this

Some advance the proposal

This is

and

favorite plan of some

The suggestion

another.

is based
one

time

considerations of generosity.

the contention that it will promote

if the nations of Europe

which they sought and so
it is based

asked to

are

gladly received.

America

At another time

ruin the trade of

if Europe is to send us her commodities for what

Apparently these advocates contend that in¬

us.

owes

ternational

will

trade

world

the

the loans

repay

consideration for present producing interests.

Voices are heard representing that it will

nearly

It apparently is assumed that antagonisms will set

peace.

she

incurred

discussion

Americans.

sentiment

By some it is based

This amounts to

Congress contemplated that foreign

that it should be cancelled.
some

bor¬

foreign loans is not cared for

foreign debt should be treated.

Europeans and

amount

extended to European coun¬

war.

provide for that part

been

the

course

what

be profitable provided only

commodities in return.

produce,

declining

give

receive

any

I imagine neither of these sugges¬

the

the rate

are

these

that

Gov¬

advised

the

Department

all payable on

demand and

obligations,

respective
has

internationally valid

sanction

are

per

The Liberty

annum.

Secretary of the Treasury

also

authorized

borne

him

ex¬

rate of in¬

by the demand obligations.

the

the early autumn

treasuries

the

of 1919,

they

the Treasury in¬

European

which it had made advances that it

Governments

was

prepared, in

case

desired, to discuss with them the exchange of the
demand obligations held by the United States
for long-time
so

obligations, and in that connection the deferring of interest
collection during the reconstruction
period of two

from the spring of 1919.

years
are

under

now

pleted
volve

in the

and

way,

future.

near

three

Negotiations to this effect

trust

Such

that
an

they

will

arrangement

com¬

will

in¬

present burden to the debtor nations and would do

much, in fact, to clear the atmosphere and to improve Euro¬

credits.

pean

It is

Included in the gross debt is
rowed at the time credits

formed

thrift

which has been developed.

acquire

prescribe.

and

In this way and through sinking fund
opera¬

tions it should be possible to reduce the

have

the

State

The Act provides that the
long-time obligations shall be in
such form and terms as the
Secretary of the Treasury may

Treasury regula¬

payment

obligations

The obligations

terest not less than

billions,

tions, for the acceptance of Victory notes during the fiscal
year

bind

change them for long-time obligations
bearing

Provision

year.

under proper

and

Department

such

bear interest at

been

result

binding

State.

the

Bond Acts, which authorized the

have
a

The

floating debt,

following fiscal

made, therefore,

that

and

authorized

and

Treasury

in the absence of unforeseen contin¬

balance should be retired during the fiscal
year 1922.

duly

ernments,

the

gencies, it will probably.be reduced below two billions

Governments by representatives
Department of State designated to the
Treasury

being

the Treasury looks forward

year

behalf of the respective

wTiom the

com¬

pleted by the spring of next
year, and then for the remain¬

ing months of the fiscal

ity for the time being to defer interest
payments.
These
foreign obligations are in due legal form.
They are signed

that perhaps

the heaviest
payments on this account will have been

distant maturity at a rate of interest at least
equiva¬
lent to that borne by our own
bonds, coupled with author¬

one-

The truth
our

reasonably

distant

world

has

are

doing too much of

the

heels

and

upon

known,

that

the

take

not

first

we can

time

matter of

the

world

has

been

forward to

move

how

she

can

while

even

begin.

can

evidences of this, both at home and abroad.

her

higher level.

fact, the world is regaining her feet

people are'talking about

This

great trouble

judge from history, the world will get

feet again and will

ing

greatest

thinking of

sufficient number of things into account.

the

and, if

the

people is naturally not calm and balanced and does

many
not

the

their obligations.

discharge

of the matter is that

thinking immediately

tragedy

to conclude that debtor nations cannot

unnecessary

time

There

are

No human be¬

forecast the direction and extent of
progress

now

the next generation

past, and nothing is

two.

vance

of the world in the

war.

You

have

can

only judge by the

amazing than the industrial ad¬

generation

kept track

the

two preceding

rapid

country.

I need not recite well-known facts.

countries

was

not

great,

tween the 80's and the

that the wealth

but it

beginning of the

of Great Britain

50 to more than 70

was

progress

the
this

That of other

very

notable.

Be¬

it is estimated

war

increased from less than

billions; that of France from

41 to 58

billions; of Italy from 12 to 22 billions; and of
Germany,
according to Helfferich, from 36 to 80 billions.
The de¬

tions will be received with favor by the American taxpayers.

posits in the state banks of three of those nations
(England,
France and Germany), increased from
293 to 585 millions

They will realize that if the debts are cancelled, they must

pay

taxes to meet the interest and to redeem the principal

of ten billions of dollars.

mand

notes now

into bonds

held

bearing

Another suggestion is that the de¬

by the Government

righer rate of interest which the debtor

nations will consent to exchange

and that
sent to

shall be funded

for the outstanding bonds

direct relation be set up between those who

receive such bonds in this country

con¬

and the foreign

debtors, although it is proposed that this Government guar¬
antee the bonds.
tions would be
debt with

No evidence is furnished that debtor

willing to assent to the creation of

immediate payment

bonded

higher rate of interest with obligations for the
of interest; and there is nothing in

isting law which warrants such
to

na¬

fatuous and

transaction.

impracticable

ex¬

appears

either of the

other suggestions.
The
the

reasonable

terms

the

dollars; and in other financial establishments

of them
to

29 billions.

some

estimated

proper

existing law,

course

which

proceed

authorizes the

under

Secretary

Treasury to fund the demand notes into obligations

must not overlook

that

have

very

the

nations, including

Great Britain

fact that

large investments
our

own.

today has investments

It
or

holdings against foreign peoples
approximating 15 billions
of dollars,
including over 3 billions of dollars against the
people of this country, and that France has
foreign invest¬
ments of 8

lies.

10 billion

By the end of

dollars, both including loans to Al¬

reasonable period,

industry of the world will
international
may

trade

move

transactions

the
and

within which the

upward, the
will

apprehended.
difficulties
with

saw

deep sympathy

the

peoples

for them

sacrifices and vexing tasks.

can

and

absolve

approximating those

these things with

confronting

total of

sum

enormous

be that European countries indebted to

their indebtedness without difficulties
now

and

Again,

of these nations still

debts due them from other
is

of three

(England, France and Italy), from about 6 billions

the

due regard for

Europe
midst

today
their

:V/" ■ j!"V

BANKERS' CONVENTION.

■

for handling our

The program

attempted to outline can,
factorily only by the

national debt, which I have

of course, be

accomplished satis-

strictest economy, not

only in our ex-

Federal, State, county and municipal, but also by
thrift and economy on the part of all the people.
It will
necessitate the maintenance of tax receipts after this fiscal

penditure,

than four billions a year, and
entirely on the
outcome of the fiscal
year ended June 30, 1920, which
showed internal revenue receipts of nearly 5% billions of
dollars.
Part of this amount was collected in the first half
of the fiscal year on the basis of higher returns in force
during 1919.
The balance collected in the first two quarters of this calendar year were on the low7er rates in effect
level of not less

year on a

cannot base our

anticipation of receipts

There is no

at that time.

certain means of

predicting the

profits; but the probability is that the income and profits tax receipts for the
calendar year 1920 will be materially lower.
The internal
revenue receipts may not materially exceed four billions for
the fiscal year 1921, of which VA billions have already been
collected. We cannot afford to operate on a tax basis which
course

of business or

would

give

plans

for

of incomes and

revenues

revision

below those

anticipated; and in

be .definitely borne

this should

mind.

In saying that the aggreGovernment should be maintained at
the purposes indicated, I am by no means

this point clear:

Let me make

gate receipts

for the

high level for

committing myself to existing schedules or to specific taxes,
Much of the war legislation was of necessity hastily devised. I think it of urgent importance that there be a
prompt resurvey of the situation with a view to a reform of
the taxes, to the wiping out of inequities and inequalities,
and the assurance of sufficient revenue, which may not be
realized if the present system remains intact. Time will
not permit me to enter into a detailed discussion. I pointed
out, as early as March of this year, the necessity of a simplification of the tax system and the repeal of the excess
profits tax, of a modification of the income supertaxes and
such fundamental administrative changes as giving the
Treasury the power to make final settlements and the giving of immediate effect to the regulations of the Commissioner of Internal Revenue.
Such are some of the credit and financial problems confronting us. I have no pride of opinion as to measures, and
realize that it will require the highest wisdom and the
most patriotic and public-spirited consideration of these
matters if we are to arrive at sound and satisfactory adjustments. I can only appeal for a careful, unbiased and
intelligent action. What we need is more light and less
heat; more sunshine and less fog; more facts and less misrepresentation; more impartial interpretation of the facts;
more courage and willingness to follow conclusions to their
reasonable logical end; and more patriotism and less partisanship.

The Banker and
By Edwin T. Meredith,

delighted to have the

privilege of talking to this

there are still
bankers
States—and I
suppose there are—I think I am safe in assuming that they
do not attend the meetings of the American Bankers' Association. This organization, I believe, has the broader vision
necessary to recognition of the fact that the interests of the
of American business men. If
of the Shylock type in the United

great group

banker are

with the growth and de-

inseparably connected

community, and to the exercise not only
of judgment but also of initiative with reference to the
lines of development undertaken.
In speaking to you, therefore, I shall do so feeling confident that I am not addressing
men whose aim it is to squeeze every possible penny out of
each individual transaction, but men who, while giving to
the question of security all the weight it deserves, nevertheless look to the immediate good and the future development
velopment of the

of the areas
I should be
to those

full

served by their banks.
unfair to the

represented

by you, if I did not

acknowledgment of the very,

given by bankers to

institution I represent, as well as

at the outset make

great aid that has been

agriculture in hundreds of communities
where a particular type of farm-

.and in scores of great areas

ing industry
ers

required financial help. Many times the bankfirst to see the vision of their possi-

have been among the

billties and have been

development.

steadfast to the end in financing the.r

commendable interest m
of its relation to all busi-

They have shown a

agriculture and an appreciation

Agriculture

Secretary of Agriculture.

other carriers, including the comparatively new

What

WoRK 0F Department of Agriculture
The United gtates Department
and

Qperated t()
a

serve

farming industry of this country

proportions,

is of considerable

representing an investment equal to that

mines
and all the quarries in the United States.
Essentially, it is
the basic industry.
The income from livestock and crops for

-all the railroads,

all the manufacturing plants, all the

of Agrlculture ls designed

the Nation_the whole Nation_by

better agriculture, and I believe it is

discharglng lts responsibilities.

faithfully

It is dealing with practi-

production, seeking to build up a per-

manent and profitable agriculture

Agriculture Means.-

and im-

portant enterprise of motor transportation, have as their
principal purpose the carrying of commodities from one to
the other. The merchant has on his shelves many of the
products of the farm, and with many of them, the farmer
is the largest customer.
Tremendous sums of money are required every year to
finance crop production and movement. It is incumbent
upon bankers, therefore, to inform themselves fully regarding all phases of agriculture, to keep in touch with current
crop and livestock conditions, as shown in the crop and
market reports of the Department of Agriculture, to appraise properly the business factors which influence crop
and livestock production in the future, and to understand
the work of the Federal and State Departments of Agriculture, the State colleges of agriculture, the extension service,
and other public agencies for promoting sound agricultural
practice. In no other way can they hope to deal intelligently, fairly, and adequately with the individual problems
of their farmer clients or to co-operate effectively with Federal and State agencies in their efforts to make the business
of farming more efficient, economical and profitable,

cally every phase of

The

^.y'; .r

through the elimination

of plant and animal diseases and insect pests, which cause
enormous annual losses, the working out and adoption of
improved methods and practices, the development and in-

troduction of new and better yielding varieties, and in many
other ways. But I cannot hope to tell you, in the brief time
single year practically equals the entire national debt,
at my disposal, the complete story of what the Department,
In other words, agriculture represents a permanent investthrough its 17 bureaus, has done and is doing; I can only
ment of 80 billions of dollars, and its output last year was
give you a bare outline of some of its activities. Its Bureau
valued at 25 billions.
The greater part of the output of this
of Plant Industry, for example, breeds improved strains and
•enormous enterprise comes almost to the door of American
varieties of plants, introduces plants of possible economic
business.
The manufacturers receive from it, directly or
value from foreign countries, tests seeds, experiments with
indirectly, the materials that go to make up their finished
different methods of cultivation, different combinations of
products.
Bankers employ their deposits In facilitating the fertilizers and soils, and all the artificial and natural fac«exchange of products between the two.
The railroads and tors affecting plant growth, and especially studies plant dis.a

BANKING
and methods of

eases

overcoming them.

SECTION.

Its Federal Horti¬

proportions.
Through the enforcement of the
insecticide and fungicide act, the
Department has been able

cultural Board inspects
nursery stock and plants for diseases
or insects.
Its Bureau of Animal
Industry studies all phases
of animal
husbandry, and especially the diseases of farm

animals, their prevention

and cure.

mal quarantine laws and is

animals,

as well as to build up

It administers the ani¬

the livestock industry of the

the

such measures

their

orchards,

their

Management specializes
of

production, in the

ialize

livestock.
the farm

same way

Its

Office of

that in their

amount

available

the fact that it

mated needs.

We spent

try.
a

$250,000 establishing Durum wheat

The Durum wheat

and

now

We spent less than

year.

important directions.

State is ndw worth

coun¬

$200,000 in introducing

$21,000,000

west.

The

$20,000,000
covered

American-Egyptian
a

serum

demonstrated
from

that

and is

year

the

worth

now

We dis¬

year.

but

year,

We spent

Southwest where

125,000,000 bushels

were

crop

every

Department, has reduced

by $40,000,000

the

losses
still

are

few thousand dol¬

produced

there.

does not succeed.

corn

Last

of Kafir and other
grain sorghums
It

discovered

was

that

the

fungus

causing wheat rust—a disease that has destroyed as much
200,000,000 bushels of wheat in a single season—overwin¬

ters
to

the common

reduce

derful

these losses

results

obscure

barberry bush, and

we are now

Won¬

in determining

of other plant diseases and in

causes

seeking

by eradicating the barberry.

also have been
accomplished

devising

prac¬

and

destroy
as

and

other
than

than

the Western ranges, which

$20,000,000 worth of livestock

similar

that everything

Hamper Work.

all the lines

of work

funds, but I will give

you

affected by

few typical

far

the

Department is concerned,

reducing from 140 to about 54 the force of

trained veterinarians in the field
showing farmers how to
their

save

hogs from cholera.
We have been compelled to
withdraw from financial support of
co-operative cow-testing
association work in ten States.
in

Many field stations engaged

investigations looking to the development of better

rieties of cereal crops and to the

tions at which problems in
have
to

been

abandoned at

the control

scope

of insect

va¬

working out of methods for

controlling diseases affecting them have been closed.

irrigation agriculture
three places.

The work

Sta¬

studied

are

relating

pests has been curtailed and the

of the market-news services conducted by the Bureau

of Markets has
stances out of

dication

been

considerably reduced.

the

situation

cution of its activities.

"economy,"

munities

from

influence

These few in¬

great many will, I hope, give you some in¬
that

ment because of the lack of

has

confronted

the

Depart¬

adequate provision for the

Surely this is

was termed.

poor

business,

prose¬

or poor

Certainly it affects the

which each of you

your

The

and

comes

has

com¬

direct

business.

turnover, especially

has reached

without delay
wise

every year,

service

with

banker,

every

rodent

pests,

which

$300,000,000 worth of

crops

destroy
and

annually

range

grass.

should take
to it

adequate

person¬

scientific workers,

alarming stage, and something must be done

deplorable situation.

Other¬

serious disintegration of the

consequent lowering

business man,

among the

to correct this

threatened with

are

by prairie dogs, ground squirrels,

those caused

ever

solution of the difficult and

We have been compelled to abandon the
hog cholera erad¬

nel.

a systematic campaign to reduce the losses

predatory animals

well

projects, notwithstanding

to-day is that of securing and retaining

Insects.

The Biological Survey of the
Department of Agriculture

caused by

vital

many

One of the most serious
problems before the Department

Guarding Against Animals

conducting

esti¬

examples:

tical methods of control.

reduction in

States,

introducing grain and forage sorghums that could

grown in the

year

cotton

increasing

losing 60 millions of dollars.
lars in

the

work,

We spent

$6,000,000 below its

is more essential than

cannot indicate here

several

that prevents hog
cholera, and its use, as

disease

The rice crop

year.

and

year

Reduced Appropriations

ication

$40,000 in introducing Egyptian
cotton, breeding it up and
establishing the industry in the arid regions of the South¬

last

entirely

rice

complex problems in the field of agriculture.

produced is worth $50,000,000

establishing the industry in California.

in that

in this

see

It has been compelled, as a
result, to curtail

abandon

partment of Agriculture I have in mind also the
agricultural

many

bank¬

Department of Agriculture and to

feasible be done to aid in the

colleges and experiment stations in the various States which
so

seems

seriously handi¬
capped by the action of the last Congress in
reducing its
appropriations for the current year by $2,000,000 below the

the gap between the decennial
censuses.

co-operating with it in

other reason,

generally should give their whole-hearted co-operation

yield per acre, present and prospective
production and sup¬
ply of crops, and numbers of livestock on

are

interest, if for

it that it is provided with the
necessary funds and facilities
for the prosecution of its work.
It has been

It also stud¬

I want to give you a few
typical items, out of a large num¬
ber that could be
cited, which clearly indicate the value of
the work of the Department—and
when I speak of the De¬

own

and support to the

that efficiency experts spec¬

farms, bridging

weevil.

institution of this sort worth
supporting?

ers

Farm

phases of country-life, betterment.
Its Bureau
Crop Estimates estimates the acreage, growing
condition,

anything to the bankers of America that the

ies various
of

mean

business, including cost

business methods in other industries.

deterring effect

follow the Department's ad¬

Department has been able to accomplish these results?
Have they not increased the
deposits in your banks and aid¬
ed in building up the business of
your communities?
Isn't

be practicable to protect their crops,.

may

and

wijth reference to the control of the

Does it

that the farmers may take

willingness of farmers

vice

Its Weather Bureau forecasts the weath¬

storms, freezes and frosts,

and indirectly would have had

crop

plant and animal insect pests and
develops methods of ex¬
termination.
Its Insecticide and
Fungicide Board inspects
insecticides and fungicides to insure a
high standard of pur¬

ity and efficiency.

great many tons of poor material

material would have resulted in direct
damage to the cotton

and tuberculosis of

country by organizing cow-testing
associations, better-sires
campaigns, and the like. Its Bureau of Entomology studies

er,

keep off the market

which, if used, not only would fail to control the boll wee¬
vil, but would also burn the plants.
Applications of such

conducting active campaigns to

eliminate hog cholera, the cattle
tick,

tremendous

efficiency.

Every

citizen of the country,

every

active interest in this matter and should

that the Department

enabled

establish

see

salary

Hunters in the service of the
Department killed more than

standards

25,000

hold

the ablest and most

ica.

The present scale of salaries would
appear to you, I am

wolves,
and

year,

coyotes,

perhaps

and

other

equal

number

stroyed by poisoning campaigns.
stock valued at not less than
an

expenditure of only $564,000.

The
crop,

cost of

boll

animals

coyotes

last

were

de¬

It is estimated that live¬

$6,000,000

struction of rodents resulted in

000 at

predatory

At the

was thus saved
same

time the de¬

causes

enormous

experts,

damage to the
after

many

painstaking experiments, have at last found

cotton

years

successful

method of controlling the pest with calcium
arsenate.

result, the manufacture and sale of this product has reached

far-seeing scientifc

little short of ridiculous.

attract

men

and

in Amer¬

Compared with salaries

inadequate.
It is essential
to

but the Department's

provide opportunities that will

paid for similar work in the business world
they are wholly

saving of at least $10,000,-

$840,000.

weevil

sure,

and

retain

that the Department should be

its scientific workers

over

in position

long periods, because,

from the standpoint of public
service, a man once embarked
upon an

important line of investigation, if he is capable and

efficient, should remain there for the
reer.

the

same

rest of his active

ca¬

time, however, the Government should

adequately compensate him for his efforts.

When

man

who

CONVENTION.

BANKERS'

100
has

been

working

particular problem leaves the

Department he carries with him much of the information
which he has secured in the progress of his work and
enriches

put

him

This

record.

which

but which cannot possibly be

experience,

means,

that

course,

man

new

girls' club work, a thousand things that have helped to de¬
velop agriculture and to increase community prosperity.
individual cases, they have gone

general bureaus of information for their

and have provided

generally, however,

constituents.

considerable

their assistance to agriculture, to cases

reaches

the

of the field

before

already covered

credit

point where his predecessor left off.

was

less directly

outside their regular field

continuing the problem must, in many instances, go over a
part

and

tries, creameries, packing plants, cheese factories, boys'

they have limited
where extension of

involved.

Many a com¬

munity owes its improvement in breeds of swine, dairy and
Difficulty

Keeping Trained Workers.

duction of

business institution in America would permit such a
tion to exist for any length of time.

from

situa¬

I could tell you of hun¬

who have resigned to accept salaries ranging

men

two

five

times greater

than their salaries in the

soil-building forage crops, which had added not

only to the immediate profits of the

in the keeping of farm

encouragement

has

who

enough

to know that

staying with their work because they love it,

greatly
case

one

him

contact

America.

whose duties in

man

with

some

recall particularly the

increased compensation.

the

best

minds

business

about one-fifth

that man just

paid

Department brought

of the

accounts; the de¬

velopment of diversified farming—in all of these
banker

are

farmer, but have laid

greater prosperity in years to come;

the foundation for even

Department, and I could tell you also of hundreds of others

spite of the fact that commercial concerns are offering them

The intro¬

of the local banker.

interest and effective help

if it has not passed, 50*/c.

partment has approached,

dreds of

and other domestic animals to the active-

beef cattle, sheep

classes of employees in the De¬

The turnover among all

things the

He has been far-seeing

tvaluable aid.

this kind of assistance extended to-

It is apparent to the

profitable to the bank.

farm

the

given

loans

thinking banker that diversification of crops makes
certain because, if the main crop

subsist

the returns from other crops and perhaps repay

loan instead of being obliged to rely upon

part of his

fails, the farmer can

salary that he is now receiving from a commercial concern.

additional loans for his maintenance and the

renewal of his

farming operations next season.

specialist in cotton classing, receiving $3,000 from the De¬

resigned to accept $10,000.

partment,

Bureau of Public
now

I could

receiving $5,000 from a single county in Texas.

It is not to be hoped, of course, that the Department can

commercial competition for its

meet

ever

fact, they do not expect it.

workers and.

general rule, they do not

feel that the Department should pay them as large salaries

they could

secure

feel that they should

but they do

in private employment,

receive compensation sufficient to

able them to keep themselves

en¬

and their families in reason¬

Unless Congress grants permission to pay'in¬

able comfort.

creased compensation,

the Department will continue to be

drained of many of its most efficient workers and a serious

fatal—blow will

—almost

agricultural progress.
ment of

have been

struck

have

tained by the research workers.

Should

permit such

have followed

who

bankers

unless it is remedied and remedied

is unbelievable that bankers and business

men

promptly?

convinced that, when they know the

generally will

how their interests lie in this matter, and

that the Department

short-sighted policy in such

in the long run, be the losers.

matters will,

Needed

and

Other

complaints

facts, they will

see to

of Agriculture receives adequate finan¬

is placed in position to

pay

reasonable

have

Not Rendered.

reached

department

the

saving to them and to the community, as well as to the

are

support they merit, but, in some cases, have

receive the

opposition of certain local bankers.

of co-operation among
mutual fire
such

companies, with

There are

at present nearly

cost for the country as a whole of only 25 cents

average

in. individual cases, companies of

$100 per year, and,

this kind have furnished high-class protection to

America

and

thereby to the

Nation

for half

bers
cents

whole.

their

Many Bankers Help Farmers.

their mem¬

century or more at a cost of less than 10

$100 per year.

per

confined

2,000

outstanding risks aggregating

total

This enormous volqme of risks is carried at

$6,000,000,000.
an

farmers in the United States, that of /

insurance.

per

example may be cited one of the most successful forms

they are otherwise equipped to render effective service to
farmers

the

which

Nation, considerable sums each year, have not only failed

compensation to its earnest and efficient workers, and that

the

enterprises among farmers,

effect that co-operative

met with the active

far-reaching consequences to industry and

cial support, that it

handicap agri¬

It is more than probable, however, that the

purposes.

see

larger immediate income from loans for less fundamen¬

tal

Will it not have

fail to

do not intend to imply that

tended, but rather that they have yielded to the temptation
of

situation—this deplorable dissipation of talent—to continue?

commerce

maliciously chosen

refusal of credit which they might have ex¬

culture by the

Agriculture, by the agricultural colleges in the vari¬

kind rests, in the final analysis, on the results ob¬

every

bankers

these

been

expensive luxuries and the dealers in them

accommodated.

been

complaints

productive purposes while the

essential

for

producers

the grated windows of

well-founded

the Department from farmers who have

credit

denied

Apparently

Much of what is done by the Depart¬

States,'and by the agricultural extension agencies of

ous

bankers.

American

have

others knocking at

hundred

the root

are

have reached

expand the list indefinitely, but 1 will not do so now.

of opportunities thus availed of, there

But for every score

An engineer in the

Roads, to whom we paid only $2,500, is

Where these organizations have

operations to the writing of fire insurance

upon

Bankers,

I said at the outset, have done many things

segregated rural risks of limited values, they have,

with

surprisingly few exceptions, proved to be highly suc¬

cessful.

Nevertheless, local bankers have, in individual in¬

industry of America, for example, was inaugurated by the

stances,

rejected the policies of such organizations as col¬

bankers and business

lateral in

to encourage

was

men

settling down into

years

The entire commercial cantaloupe

agriculture.

of Rocky Ford, Colo.

The town

rut of mediocrity, but in

few

it doubled in population and increased wonderfully in

prosperity.

Good hotels, fine stores, and paved streets

re¬

bank to write a new policy in some
at

the customary rate

placed the ramshackle condition of the town, and the Ar¬

sary

kansas

Valley

for

hundred

miles

took

prosperity

which has since been communicated to many other and still

larger
grown

areas.

The cantaloupe industry has

out¬

of
4o

the sums they advanced.

could take up the entire time which I have at my dis¬

posal in

recounting the many activities of the bankers in

financing all

sorts of farming operations—irrigation proj¬

ects, drainage ditches, sugar-beet

factories, canning indus¬

when the only apparent

immediate commission

years

known as the
pose

organization which is saving the farmers of

as a

ago

constructive banker.

there was

at a

repayment,

enacted by Congress a law

Federal Farm Loan Act, the fundamental pur¬

of which is to provide the

credit,

because

to him, would discourage or

brought about by co-operative effort, is not

classed

Four

It is hardly neces¬

thousands of dollars annually in reduced- cost

insurance,
be

commercial organization

of commission.

to point out that any banker, who,

undermine an

infancy have received in increased business many

times more than

for

the locality

its small beginnings, and the bankers who nourished

it in its

entirely

connection with loans,

explanation has been the desire of a representative of the

farmer with farm mortgage

reasonable cost and on satisfactory terms of
and

thus

encourage

land

ownership

BANKING
actual farmers and to decrease the
I

do not need

impress

measure

and

that has

the

percentage of tenancy.

far-reaching

has

the importance of this

upon you

been developed

because

influence

under it.

the

largest single

of farm-mortgage credit.

source

vestigation conducted by the Department four

are

in¬

the

because

the

farmer

definition

successful

essential

to any other class of business

that

country

them.

They

sympathetic

play
the

are

placed by

was

position, therefore, through

and

wise

handling of their farm-mortgage business,

immensely important part in the task of insuring

continued

tural

well as by individuals,

cultivation

by actual

area

large part

agricul¬

our

during the last

this movement is

include

farming

prosperity

touch

banks and

them

sug¬

plan which is already in operation by many

writh

same

would give

This leads

men.

the

bankers generally

upon

which

farmers,

various

enables them

to understand
and at the

ways,

the business of the bank.

their

keep in

needs,

time,

same

assist

to promote

This plan is the employment by

their loan departments of a specialist trained in
agriculture
who

will

circulate

the

over

county,

get

acquainted

with

farmers, attend their meetings, advocate improved methods

owners.

Speculation and reckless inflation of land values has been
much in evidence

sufficient

service which they

same

gest to you

considerable percentage of the farm mortgages held

risk,

good

give to individual farmers who apply for loans the

consideration and the

than any other class of institutions in the
country, but also
a

upon

the

It is incumbent

dicated not only that the banks held more farm
mortgages

by other agencies,

himself

farming depends

farming—is

whole community.
to

the

success

working capital, and because successful farming

profitable

An in¬

years ago

101

offer,

—and

but it is nevertheless

true that the banking institutions of the United States

amount of

system

Unquestionably, it has

been of immense benefit to
farmers,

the

SECTION.

year

two, and unless

checked, it will result in conditions which

agriculture, and explain the banking business to

Splendid results have been
vating friendly

secured

relations with

this

them.

by culti¬

helping

farmers,

way

them in¬

are

highly detrimental, not only to the farming interests of

telligently in their problems and when they need financial

the

country, but to

accommodations, and encouraging them to build up

lands

excess

tion ty,

entire economic structure.

our

their

actual

value,

based upon

relatively impossible

becomes

farmer to acquire a farm of his ooVm.
extent that renters purchase

proportionate

their

perhaps

volving,
capital

needless

they do,

and

use

for

produc¬

Furthermore, to the

value,

such

dis¬

are

purchases

are

large percentage of foreclosures.
point out that foreclosures,

the loss of ail

which hard-working citizens

in¬

large part of the

have

accumulated

of toil, will tend to aggravate social unrest and add

years

strength to forces that
of society.

are

inimical to the orderly progress

Co-operative Enterprises Important.

What

Administer

Public

of groups

banker

should

feel

his

duty

that

see

the

said

of farmers and organizations of farmers.

developing rapidly in

are

pose

collective

fertilizers,

and

other

farm products.
and

financed,

buying

capital.

The

honest

efficient

and

landless

farmer

shipments and
storing

the adoption

and

entitled to every

extends

handling,

enterprises
are

who have

land

the

part

those

intention of using it should, in general, be dis¬

couraged.

speculation

Nearly

transfer of

every

landless farmer involves

larger

piece of land

smaller

of mort¬

sum

credit which the local banker, in many cases, is in a

gage

position to furnish, either directly or

adviser

individual

other

institutions

the agent

The opportunities and duties of rural bankers

local

large in this connection.

the

part

In the

farmers

of the

case

for

man

short-time

who

owns

supplying of such credit

problem.

one.

In the

farmer

young

question

credit

who

just

and

the honest,

renter,

starting

out

should

continues

credit

be, based to

credit.

for his farm,

rule,

serious

however, and of the

owner,

the

productive ability.

the

farmers

ambitious, energetic farmer because he has

the

banks of

deal

and

much

factors

land-owning farmer.

familiar with the fact that

which

business

cause

working capital.

This

other lines of business.
he

failures is lack

true

sufficient

of farming as it

Capital is needed by

farmer when

buys land; when he improves it with fences, dwellings,

barns, and other buildings; when he drains
when he

buys live-stock for breeding

when he sets out
vate

and

them.
will

needs

irrigates it;

feeding

purposes;

orchard; when he hires labor to culti¬

harvest his

These

crops,
are

when he wishes to market

legitimate

needs

and

the

who

men

situation,
see
a

organizations

opportunity

have

obtain

After

all

the

intricate

sidered, the fact
and

best system
for lack

problems of

remains

that

square

financial

the

difficult

most

problem.

of scientific agriculture
the

failure.

The

branches

production

are

con¬

marketing is the farmer's
follow

may

the

devised and still,

ever

right kind of marketing facilities, make

Bureau

the

Markets,

one

Department, is devoting

the

seventeen

itself

every¬

thing pertaining to crops and live stock from the time they
produced until they reach the

are

has been aptly said,

Its activities

consumer.

"the other half

Certainly its work is just

of agricul¬

important, both to the

farmer and to the consumer, as is the work of those bureaus

having to do with improving and stimulating
and it touches bankers

even

closely.

administers

the

United

which will make such receipts

and,

therefore,

movements.

ing and

definite

production,

The bureau, for

States

house receipt for cotton, grain, wool,

of. the principal

one

their

and

equal

In such

the central purpose of which is to establish

are

this obliga¬

expect that bankers will

example,

You

and

therefore

country.

business

some

little tangible security to offer is to lessen the productivity

future should

are

of these co-operative

some

opposed

the

of available capital and to discourage the man who in

the

better

They

assistance they need.

ture."

To deny such credit

that

cover,

considerable extent,

will

too

difficult

improved methods of

extend to them, and

can

probable, that

even

not

realize that personal

bankers should

cases,

personal

and has paid

raises,

of the

short-time

such

can

case

upon character and
to

credit, there is frequent need

marketing

financially interested in the storage, handling, market¬

biggest

In addition to mortgage

resulting

ing, and distribution of farm products.

investors.

especially

are

the

pur¬

machinery,

reasonable encouragement which Federal

equally

possible, and

while

for

uniform product to the consumer.

should be aided in every possible way to purchase the land

tills,

equipment,

likely to effect real economies in buying,

are

tion

such

farm

marketing and distribution through the pooling of orders

channels and into the hands of the most

supplies,

and State institutions

users

Farm

communities,

many

These enterprises, when properly managed,

capital which he controls is directed into truly productive
efficient

•

regarding the financing of individual

especially since the close of the war, generally for the

grading,

Trust.

have

organizations

Every

farmers applies with equal or greater force to the financing

and

Bankers

good

bank account.

the .landless

farms at prices which

actual

.almost certain to result in
It

If farm

permitted to attain speculative market prices in

are

Warehouse
a

Act.

form of ware¬

tobacco and flaxseed

easily and widely negotiable,

assistance

financing

crop

This purpose the act aims to attain by licens¬

bonding warehouses under conditions

which

will

insure the integrity of their receipts and make them reliable

evidence of the condition, quality, quantity and
of

the

products

named

which

may

stored

ownership

with

them.

It is probable that the bankers of the country could render
no

better

service

agriculture than

make

thorough

farmer

study of the act and co-operate with the bureau in inducing

naturally and rightfully look to his banker to finance

warehouses in every agricultural centre to become licensed

his operations.

Because of the splendid security the farmer

under

its terms.

Produced

Crops

connection

call

CONVENTION.

BANKERS'

102

with

attention

your

the

wish to

of marketing,

faci'ng the

the problems

some

ducts—prices which will enable him to

High Cost.

matter

In the spring of 1920, when

farmers at the present time.

coming season,

they were planning their operations for the

they were confronted with a very difficult

There
the

situation.

shortage of farm labor estimated at 33 per cent.,

was a

exceedingly

everything the farmers had to buy was

cost of

high, and there was uncertainty as to the future prices
farm
the

undertaking,

hesitate.
them

realized

not
upon

nation and, in

the food requirements of the

meet

resting

responsibility

the

did

farmers

the

nevertheless,

but,

They

added to the hazard of

All these things

products.

spite of all the difficulties, they have succeeded in producing
of

one

that

report of the Bureau of Crop Estimates indicates
is

there

prospect of

3,216,000,000 bushels,

the

exceeding the

crop

corn

500,000,000 bushels more than

bushels, or 286,-

1,402,000,000

oats,

average;

pre-war

wheat

by about 25,000,000 bushels, a

average

pre-war

largest harvests in the history of the country,

the

The last

000,000 better than the pre-war average; barley in excess

pota-

of, and rye more than double, the pre-war average;
toes

and

tobacco

record-breaking rice

exceeding the five-year average;

hay exceeding the five-year

crops;

average;

apples better than last year,

grain sorghums, and

cotton,

and record sugar beet and sorghum syrup crops.
The

cost

marketed

producing

with

confronted

are

which

crops

being

now

are

necessity

the

selling

them

High prices ruled while they were bearing

fallen market.
the

the

greater than ever before, and yet the farmers

was

of production, but prices began to fall when

expense

about matured and were ready to harvest,

the crops had

Taking all crops grown in the United States, the relative
prices

March 1

date

same

last

were

year;

higher than on the

cent,

per

April

they

were

cent,

per

higher; on May 1, 23 per cent; on June 1, 24 per cent; on
July 1, 21 per cent.; on August 1, they were the same as on

August 1 a year ago; on September 1 they were 8 per cent,
lower than
To

state

and

year ago,

the

October 1, 14 per cent, lower.

matter another way,

The farmers of the

this is

3,216,192,000 bushels of

At present prices they would

corn.

billion dollars less I

receive for their crop approximately a
than what it would bring on
in October
to about

third of

would have

At existing prices it would lack

billion dollars of bringing as much

brought

year ago.

Qotton seed, which sold
selling

the basis of prices prevailing

The cotton crop this year amounts

year ago.

12,000,000 bales.

than

more
as

year

September 1 for $20

year aggregates

September

ago

year

would

at $60 a

ton, was

The wool clip this

ton.

259,307,000 pounds.

last

the situation:

United States have produced this year

all

into consideration

crops

dencies,

shrinkage
gating

Under

there

see

compared

prices

the

pays

for

prices

States

with

their

carried

crops

needs.

last

aggre-

year,

assurance

interests
as

in orderly fashion?
farmers
can

secure

are

will

and

periods

staple

involved

The American

sale
one

Shall the

him

crops

put

demand.

enable

credit

are

lowest, while the
other

each year's
year

They

The only point at issue is:

primary

Only thus

are

consumption

by local banks

that

along during the
effective

whose

credit

and tenfacing

are

products.

prevailing at

A large proportion

questions that fact.
farmer

prices

present

United

bring

Taking

than $2,500,000,000, nearly 17 per cent.

adequate

year.

must

his

from

the

existing conditions, farmers have

consumer

such

times obliged to sell when prices

many

of prices,

receiving

the

farmers

the

afforded

market

people must

sufficient

for

their

they continue to supply the Nation's

demand for food.
.

Farmer Must Receive Fair
I

think

you

Prices.

gentlement fully realize that if the farmer

is to continue to

of the nation he

produce and to meet the food requirements
must receive adequate

Some Things

Bankers Might Do.

$133,000,000,

brought

reduction of about $60,000,000.

provide a satisfac-

himself and for his family,

rjdie farmer is not the only one who would be adversely
affected if he fails to secure a reasonable return for his
efforts. He will suffer, of course, if he stops producing,
but tbe banker, the manufacturer, the merchant will suffer
also. Every banker, every business man in America, is or
should be interested in keeping the farmer on the farm
and in having the farm operated to its reasonable capacity,
turning as much as possible into the channels of trade,
manufacture, and transportation, and this means that they
must seo to it that the farmer gets fair treatment in disposin& of his products.
Isn't the present situation one which demands t e es
thought and sympathetic consideration of the bankers o
America and, in fact, of all the people of the country,
Should they not address themselves earnestly to the task
of aiding the farmers in their respective communities totide 0V(F this difficult period and make their plans for
next season's operations? i sincerely hope that the bankers
will measure up to their responsibilities, both as cit zens
and as bankers, in this important matter, that you wil
discuss in your association meetings the problems involved,
and tbat you will see to it that, so far as possible, the
farmers are properly financed not only to protect them
from unwarranted losses but also to stabilize their business
and to insure adequate food production in the future,
1 do uot tbink you can fail to see that the farmers problems are your problems, and that your ultimate prosperity
depends upon a right solution of the difficulties confronting
the farmer. You have an active and wide-awake Agricultural Commission—a commission which has rendered invaluable service in bring about a better appreciation of
agriculture on the part of bankers and other business men
—but are the individual members of your association doing
ad tbey can to improve agriculture and to make sure that
the farmers in their communities have free, open and cornpetitive facilities for marketing their produces? Do you
understand fully what a permanent profitable agriculture
means to you, to your bank, to all business, and to the nation? Have you sympathetically studied the farmers credit
needs, and endeavered to meet them in every possible way?
Do y°u fuby realize the importance of encoui aging cooperative associations for purchasing pure-bred sires? Do
you know that we are milking the United States millions
of cows that do not pay their board, and that a cow-testing
association would go a long way tow aid eliminating such
cows from their communities and replacing them with
Productive animals that would tend to add to the farmers'
income and bring deposits to the banks?

At prices prevailing in

have

but this year, on the basis of current prices, it would

only $73,000,000,

t01Y standard of living for

prices for his

pro-

Do y°11 know as much as ^ou should about what
Department of Agriculture and agricultural colleges in

the
the

various'States are doing for farm boys and girls? Did you
ever hear of the boy who j°ined a club and whose father
twice destroyed his record books, and how that boy kept
at
walked to the fair, and won first prize? Did you ever
liear of tbe club boy whose father was dead and who bad
to help to suPP°rt his mother and six brothers and sisters?
That boy worked out 12 hours a day, but found time to
cultivate his club crop. He did not win a prize—he won
nothing for himself but he helped his school win an
agricultural library. He tells his club leaders that his
experience has impressed upon him the-value of an education and tbat» in spite of bome difficulties> he is resolved
t0 have an agricultural education so he can be more than
an

ordinary farmer.

Did ?ou help finance either of those bo^s?
Wouldn't
y°u like to feel tbat you bad bad some part in lowing one
these boys the way? They are only typical instances
from one State.
They could be multiplied hundreds of
times in that State and in every other State.
In your
State, in your county, in your community, are other club
boys and girls who are having just as hard a fight and
who will accomplish just as much if they can find the
help that they may need to tide them over some particularly

BANKING
rough place.

I do not

believe that there is in the

Y-

SECTION.

United

done, not alone because it is

103

matter of even-handed justice,

States any other organization so favorably situated as the

but because the prosperity of the nation depends upon the

American

Bankers'

Association

agriculture of the country.

somewhat

smoother

for

foundation
You

have

zations,
them

national

your

district

all.

And

make

rocky

road

are

State

your

units—you

county

the

through

another

than

doing

just

that

thing.
Take

active, not

communities.
nation

bill

See

that

properly
is

passive, interest in agriculture and

confronting the farmers in
the

basic

great

encouraged,

your

respective

industry

supported,

legislation,
the

vicious franchise bill

making

are

should

daily

would

secure

discussed

just

press,

would

measure

effort to

meetings

your

meritorious public

the

constructive

and

service

You ought to see that these things are

be.

influence.

the

public

bill,

times the

many

position to get their views fully before

communities,

own

interests.

agriculture

wTould

by it, and if so, discuss it in your meetings;

view to

affected

adversely

if it is

reasonable, just aid to agriculture, give it your

single

day

I hope,

back home you will not let

without

pass

support—

otherwise it may not receive proper consideration.

therefore, that when you

Con-

not well scan

can

you

proposal, every situation, with

every

whether

business,

not suggesting any undue

effectively to protect their

suggest and

men

having to do with

only wish to point out that
not in

are

sider if, in your

learn

have.

some

The business

of matters

It is not unfair of them, and I

every

pending in your legislature that is inimical to

it just as a

farmers

expect discussion

the

agriculture, it should have the spot light of publicity turned
on

they are closer to business.

developed,

and

of interest in agriculture, but rather because

lack

any

columns of our papers are

largely to matters other than agriculture because

farmers

in the problems

reach

by which you could write

way

generation,

devoted

organi-

can

better insurance policy for the prosperity of your
bank,

I do not believe the editorial

the

indestructible prosperity,

roganization,

and

there is

boys and girls who

and

permanent

your

these

considering

how

you

help

can

agriculture, the great underlying industry of America, the
foundation upon which all else rests.

Grain, Cotton and Co-operative Marketing
By Henry M. Robinson, President of the First National B ank
Savings
A

discussion of commodity

tinent

financing is particularly

out the country.

satisfaction

There

evidences of growing dis¬

are many

the part

of the producers of many commo¬

time

the

From

until the crop

there

tension

constant

remedy,

the

or at

There is

credit

control

agitation
principle

credit

such

producers

our

for

and

ex¬

marketing

co-operative

question but that the

response to

facilities

the clamorous demands for the
the

community

presents

existing practices,

and at

Abuses

have crept

points the

some

use

serious

situa¬

tion is critical.
It

well

commodities

recognize clearly this problem of financing

basis which is fair to all elements in the

community, and endeavor to reacli
for

assuring the producer

munity credit.

some

fair and proper share of

It is likewise just

remedies

proposed by

producers for improving their condition.

Assuming

definition of commodity

able subject to trade," it will be
no

com¬

attempt to

upon

may

mov¬

that there should

seen

the entire field, and so before entering

cover

discussion

financing it

the

general

problem

commodity

Financing.

direction

the

discussion

parellelism

will

limited

both
to

with

some

times is in

our

modern

speaking,

made by local

minimums,
milling

the

banks, by local grain

and

grain

move¬

mar¬

farmers

buyers
of

line

are

by the

local

by the so-called cotton broker
the grower, as

store-keeper, and
on

are

banks,

well as similar advances made by

somewhat

vary

physical

grain

handling

much

are

set

proportionately, very much more ample and

and,

This situation renders

the

and

The difference lies principally

of the cotton.

case

disproportionately
service

warehouse

for

of the

growth

greater

grain,

compared

elevator
with

the

comparatively inadequate warehouse facilities and service
provided for cotton.
From

the

ment of the

banker's

the move¬

bulk of the total movement is con¬

far as the

advances for

standpoint,

grain are, generally speaking, much better se¬

cerned, than in the case of the cotton, although the actual

machinery

financing

o.r

movement

the

for

used

different

the

commodities

both

segments

t6 final

manufacture

disposition are identical in principle.
Weakness

Cotton.

facilities,

and

irregularity

and

weight

in
the

irregularity

the description of the grade,
cotton,

compared,

receipts

warehouse

and

the

In the

various warehouse
case

quality

the

case

elevators,

grain

receipts.,

of grain, the local buyer, and the ownership

broadly classified

can

some

under

four

milling

con¬

divisions:
Line

companies,

largely

controlled

cerns.

Independent owners and
Farmers'

Owners and operators of elevators at

the

points.

and

guarantee, of credits for

tatives of large cotton merchants and
tatives of mills.

may

concerns.

made

they

and

guaranteed

elevators

Again speaking broadly, the parallels for cotton
advances

although

representatives

harvested

factory and safe, from the standpoint of the banker, than

grain or cotton is

larity, definiteness and security of the order bills of lading

production,

locality in the production and

advances

either

theory and practice

the

keting of fruits and nuts.
Broadly

the

financing of the movement of grain much more satis¬

the

disposition of grain and cotton, together

own

for

market

then

grain, with the extent of warehouse facilities and the regu¬

and

suggestions that have grown out of certain de¬

velopments in

the

practice,

theory

of financing in so far as it relates to the
ment and the final

made

the facilities established and machinery

sure,

the

warehouse

while the trend of the

often

are

The weakness in the cotton movement lies in the lack

The underlying principles of all commodity financing are

distinctly similar, and,

harvest

when

be advantageous to review briefly present

Principles

cotton

complete than in the case of cotton.

practices in two typical commodity movements.

the

for

cured,

"anything

and

reaches the mill, the financial operations are

similar,

definitely

important to consider

the dangers that attend some of the
the

satisfactory basis

grain

detail.

for

the

time

the

apportionment

proper

promblem to the conscientious banker.
into

facilities,

least to relieve, the situation.

of funds in

those

and

grade and quality, but with a guaranteed minimum price.

Trust

Angeles

Los

the

which call for the delivery of the crop

under agreements

dities who claim that they are being discriminated
against

bankers

and

advances

These

per¬

during the present period of credit shortage through¬

of Los Angeles

Bank.

represen¬

times represen¬

The

line

pendent

co-operative

houses

resident

either

grain

resident dealers.

through

country

dealers

large terminal

representative

merchants,

through dealers in large terminal
through

organizations.

and

many

inde¬
cases

markets, by bids made

representatives

points, buy the grain direct from the farmer at

country

the specified

104

CONVENTION.

BANKERS'

For instance, the delivery to the bank's

price, with delivery taken, and payment made at the line

roughly sketched.

house

customer of warehouse

local elevator

the

case

be.

may

The line houses finance their purchases in various ways
—sometimes

vicinity

by establishing credit
the

elevators

in local

their

with

banks

the

representatives

em¬

been

general

both cotton and grain transactions.

banks have felt

the kind of grain,

phases.

take, since the practice has many irritating

be called upon to

the

independent local

financed either

with the bill
the

case

movement

grain

of lading attached, or by a

warehouse

certificate

margin note with

.it may be done on open note or by a

cases

though

security,

the

merchants,

bank—on draft

by the local

many

this

the

and

While farmers' co-operative organizations are
local banks and through order bill of lading

financed by

vided

unsecured notes—if

bill of lading

theiij financial condition warrants—

of elevators owned

case

finally

some

the

the grain

cases

zation.

Some of these

the close of the

points.

Is turned in and the sale and disposi¬

tion of the commodity lies

with the directors of the organi¬

organizations

are

non-profit, and at

distribution is made of the proceeds

season

total

the

sales

producer

profit element in them

buyer, in the various transactions covering the move¬

grain

either

original receipts given by the public elevators—and

elevators

are

treated

public warehouses—play

frequently called

those

commodities,

and does, feel greater

the city banks, and these banks, in turn,
warehouse

in which the maker of the paper

After

the

prefer independent

rather than receipts issued by agents,

receipts

grain is

local elevator, the movement is based on warehouse receipts,
bills

order

lading with

case

export,

medium of

attached,

draft

receipts at

tions of late that it would

been

the

draft attached, until

picked and ginned, it is accumu¬

keeper or local buyer, or, possibly, the representative of the
merchant^-who

the

part
the

basis of

the

case

account

cash,

either

guarantee contract made as a

advances,

the

then

ships it to

moves

it for his

own

giving the marks,

to arise.

the bales

broker
the

receipt

com¬

numbers and other data.

turns

over

the

bank

who

superero¬

when

hedging trade,

difficulty and with

reason¬

situation that is likely

simple operation.

buyer in turn—local

chase of actual

Suffice

it to say

grain merchant,

local ele¬

grain, sells

sale

the

cash

future for

grain

pur¬

like amount, and

is made, buys

future to

match or close out the future sale made at the time of pur¬

In the

case

mill desiring to sell the product for

delivery several monthfe off, it buys a future for a delivery

prior to

delivery of flour.
The

The bank then delivers the specified

the compress company,

compressed

and

signs

this, in turn, is, presented with

an
an

acknowledg¬

already
This

pre¬

order

bill of lading is attacked to the draft drawn
by the shipper

the mill

years

Obligation.

Banker's

it has been

ment and
its

storage of grain, but

has

importance,

part of the

the

in the financial re¬
principally due

adequate warehouse system in the production

and lack

open

market for

paper

issued against

product.

Prior
ton

commodity, considering

little

of the country as has cotton—this

to the lack of
area,

shared -as

to the advent of

loans

notes,

made

were

the Federal Reserve System, cot¬
a

rule in

counted

Insufficient

local

the

with

banks

the form of

used as collateral

and these again were

ordinary
or

re-dis¬

eastern correspondents.

effort has been made to

storage on a basis of credit in a

other purchaser of cotton.

accepted as

obligation of the banks of the country to finance the move¬

which, after the cotton

loaded,

many

has

"turnout"

pared bill of lading to the railroad company.

upon

work of

line elevator, terminal dealer—as he makes a

sources

buyer at the concentration point,

purchase,

been

ment

vator,

forwarded.

cotton*goes to the

point tlie

compress serial

definite shipment.

has

This

7^v

each

that

For

order specifying the number of each bale of cotton to
go on
a

to be

protect the situation,

The compress issues separate receipts for each bale,

made

their

draft with the shipper's order bill of lading, giv¬

At'the concentration
press.

dealer at the concentration point,

seem

able certainty that it will protect any

chase.

market,

The buyer makes his purchase as it comes

ing all marks and numbers

The

producer

plantation, in round lots, and
or

drawing

be.

may

from the

the

pays

minimum

contract

customer

Hedging itelf is

lated through similar local agencies—either the local store¬

cotton

gation to re-state the seasons why the banker should urge

final payment by the consignee.
When cotton has

hedge

cotton products to

points.

is handled through

the movement

bills of lading with

ocean

right to,

buyers and dealers between the farmer and the mill.

receipts

trust

the terminal

systemat¬

has a

safety in any advances he may make.

since it can be done with little

warehouse

regularly and

the banker

purchases, and it is likewise in general use by all of the

his

and custodian

almost universal with mills that manu¬

now

either grain

facture

hedge

practice has been explained at length in so many publica¬

is financially interested.

harvested and delivered to the

once

practice is

the local banks

to re-discount grain paper with

upon

fails

who

where the banker's customer—the dealer

ically hedges his transactions,

The

important part in the early financing, as
are

merchant

cotton

speculating, and
—in

The

the modern method of commodity

ment, protects himself by hedging.

of the profit made by the organization.

most

turnover

financing and marketing of both cotton and grain to-day

fixed at the date of delivery, though the

have some interest in the final distribution

may

that is, each handler

his drafts, so that each

other particular,

one

The

and the price is

credit based

financing is alike for both grain and cotton; that is, in the

basis—grade considered.

rata

pro

Some of these organizations have a

is, to all intents and purposes, cash to the trader.

each
of

financing of the movement—until

manufacturer—is in effect a cash

the

reaches

transaction to each handler in turn;

at different

varies

system

protection of the

continuously.

by farmers' co-operative
receives

organizations,

method should be pro¬

some

banker can have

the

the time of the harvesting of grain or the picking

credits

by loans against warehouse receipts, or both.
the

that

and ginning of cotton, the

which

under

From

financed either by open

are

receipt has as yet been developed,

essential

most

drafts made on

correspondent at the terminal point, the terminal mar¬
themselves

;//''.v-y^^-

■

plan for protecting the banker

against.an improper use of the bill of lading held by the

Co-operative Organizations.

ket dealers

time.

of cotton,

case

bank has control of the

order, the

disposition

customer under the trust

some

under

duplicate disposition order, where

in terminal yards to flour mills, and

grain is moved

bill of lading all of the

correspondent at

large terminal point.

A plan has been worked out in the movement of

grain for the use of
the

The

t^iat this is a hazard which they should not

powered to sign grain checks, which checks, as a rule, show
number of bushels and the amount.

receipts for the purpose of making

shipment and the accepting of trustee receipts in lieu, has

place cotton and its

form that would be readily

marketable on its own merit, although the Federal Reserve
The Cotton

The

scale,

Warehouse.

establishment of cotton

with

proper

warehouses

Bank System, by
on

adequate

restrictions, obligations and responsibil¬

ities/tends to bring the movement and financing of cotton
more

nearly

on a

parallel with the

stabilized

financing

and movement of grain.

Many refinements and
been

and

are

being

creating

open

which affords substantial encouragement

term

commodities under discussion.

methods

have

has aided

for investment of

capital and bonded warehouse enterprises.

variations in practice have
the

receipts,

discount market for cotton acceptances

The definition made by the
many

developed

encouraging the use of trade and bankers'

acceptances and of uniform warehouse

"Readily

marketable

Federal Reserve bank of the

staples"

inclusive

both

BANKING
The erection and operation of
houses

wool,

under

the

tobacco

Federal

and

licenced and bonded
of

Act

flaxseed,

has

1916,

for

promises

ware¬

cotton, grain,
of

greater

de¬

velopment.

price deflation

momentum
unseen

strain, with the difficul¬

definitely started

uncharted course toward

and

gathering

unknown and

destination, with collective bargaining in the form

co-operative

marketing

showing

increasing growth,

commodity financing at this juncture is difficult.
The difficulties of financing even
such

commodities

conducting

becoming

increasingly

bears

credit
In

greater

the

its

the

and

fair share of the available credit,

fair share

complex,

that each pro¬

see

of the burden

and pressure

some

purchase.

in the gross of

former

exportable

the fact

abroad

requiring the ration¬

of financial support proportionate

a measure

because

of the

resources

proper consideration for the

surplus

and

the

are

familiar with business
practices,

movement

low

ebb

and

questions.
to

Such

them

margin

for

The
time

cost

coun¬

European

can

accelerated

re¬

the price of cotton

should not

rate greater than in other commodities?

these

transactions fit

many

Hoover and many economists

wholesaler's

price,

that all

actual

are

into

the

take

the

are

movement

charged against

difficulty.

that the farmer is

as a

The

position generally

poor a business man

taken

that he is in

result, from that time until final consumption,

financing should be carried
and

men

for the benefit of the middle¬

manufacturers, the wholesalers

marketing up

the

point

and

retailers.

of wholesale

against the farmer, is inordinately,

high.

This

charged

least improperly,

against

not

beginning to feel that he is entitled, if lie

new

crop carried

thought

cerned, but it has had
accounts

very

beyond the harvest period.
far

the farmer is

rebirth in the last few years,

largely for the

which, for the time being,

con¬

marketing movements,

largely directed to the financ¬

are

It is quite accepted that in the
great crop
the

country

bankers

have

abused individual credit seekers who

producers.

This has

are

been limited

not

producing

sometimes

used

sec¬

and

small farmers and

alone

the

small

banks, but indirectly also is charged against the banks of
the

large

cities—this

through

representatives of the great

the

concerns

centres, who with the local banks

are

factors
in
the

the

and

buyers,

metropolitan

principal

sources

for the producers to obtain funds.

The
It is difficult for

the

banker

most

commodity
vances are

than

Small

financial

the

harvest

producer himself

higher

than

the

producer

present

practice

somewhat

the

either

financing

same

basis

the

small

petus.

and

ones

and

transportation operations generally.

We will all recognize that for centuries the smaller

working

felt—at times vaguely and at other times
those

directly

has

man,

definitely—

indirectly in control of credits and

inclined

make

unfair

bargains

with

the commodity

he might

Time out of mind this problem has been met with

degrees of

time by collective

Labor in

the

tremendous difficulties

and

essential

farmer

himself.

multitude of small

Labor.

difference between the attitude of

Grain and cotton producers have felt for
years that the

vidual

method,

whereby

bargains for

the

purchasers

often

crop,

vantage of the producer and, as
of

the

tively

Middle West
run

ducer

and

ad¬

farmers, the

complexities of dealing with

multiplicity of small units, where the individuals

are

result, in

various

make
the

indi¬
disad¬

sections

many

commodities,

co-opera¬

elevators have been established to which the pro¬

delivers

his

grain,

done in this direction
The

locally

worked to

discussion

though

not

much

has

been

yet

by the cotton growers.
rife

amongst

both

the

grain

men

the

Middle West and the cotton growers of the

Southwest

for

the

warehouse

expansion of co-operative elevator and
with

co-operative

marketing

organizations

big scale, while the Federation of Farm Bureaus has been

making

existence
Here

study of co-operative marketing operations
with

and

the

there

idea

now

expanding them.

producers of

farm

products

are

under-,

taking in various ways, under various titles and with divers
high sounding plans, to set up

new

co-operative marketing machinery.
even

to amplify existing
are now

apparent¬

seriously discussing plans which contemplate within

their general

carrying
been

They

outlines, the establishment of banks and the

of such financial operations

have

never

yet

attempted by any like organization, except, possibly,

the Non-Partisan

League.

Producers' organizations are

merely

the

trustees

for

the

clamoring that bankers
community's

funds.

years ago the banker often felt that he was the

and that his

was

the final decision

calling

at that time

community,

whom, and to what

Only too often he

the basis of selfish interest,

recognized that the banker with

(who

was

rara

avis),

are

Thirty

was

pur¬

but it was
a

judicial

better for

the

one

given

credit

lengths of

of producers for co-operative marketing.

community than
a

differing

demanding that it be permitted to bargain collec¬

temperament

movement of

for

tively with the Employer, and the demand by organizations

producer to understand that

large units in the

with

and

success

bargaining.
Union

There

sued his

some

not

This latter method, already
tried, is taking on a new im¬

even

the

to be made to

the

much

very

extent, credit should be advanced.

Producer.

naturally prefers to deal with

who had control of

cost

provide for their handling by people experienced in business,

ing of the crop through and beyond the production stage.
of

units

accumulating the original small units into large

and

developments in the line

new

of farmers' co-operative or collective

tions

final

continue

the

program

desies, to have his

or at

The farmer is

small

present buyer; or the producer must-set up machinery for

result, the complaint is made that the cost of financing

and

small

say,

must

existing

consumer.

duty bound to market his product at the time of the harvest,
and that

the position

charges against the

of financing

costs

wholesale price stand against the

financing commodities beyond

form

make

would

On the other hand, all costs and
charges added to the

the

present cost' of the middlemen's large unit accumulated
by
him from a multitude of small units—that is to

price at his local point,

commodities up to the wholesale market

lies

rule, have liquid assets

as a

produce.

Marketing.

that all costs between the
producer's

Here

prompt

are

Generally speaking,

individual for either his work

final costs?

him.

transportation

experience,

different

Co-operative
where do

and

trading,

the

that

farmer,

through

and understand both

well

producer is without this business equipment.

capital,s were

that the reduction in

and the

people,

improper treatment, and,

tarded by artificial
means, is it not the duty of the banker

now

problems,

act, are freer from the feeling that the banker is giving

price

man, whether a producer from the soil or

Assuming that price deflation

Herbert

beyond the stage of

harvest, with those who control large units and who

delays in moving

credit, should be given.

And

that

great

very

vest, or the banks must set up suitable machinery for hand¬
ling the multiplicity of small units and make an initial charge

customers

In the present emergency,

try, and with

industry is

cotton

exports,

our

to cotton's contribution to the credit

be at

are

the
middlemen instead of the producer after the time of the har¬

regard should be given to the importance of

limited ability

ing of credits,

see

practices,

when

shortage exists.

product,

and

determining the share to which the

entitled

business

prefer, if possible, to handle all questions relat¬

ing to the financing of commodities,

for the purpose of

active and orderly way, are

their best thought to

use

ducing industry receives

with

the bankers

legitimate holdings of

grain and cotton,

movement in

bankers must

and

familiar

105

the

With the pressure of the credit
ties

SECTION.

one

who allocated credits for his

own

ad¬

vantage, or for that of his clique or his bank.
Community

Assuming that bankers

now

Credit.

recognize

of trusteeship of the community's funds

the

responsibility

(and this is

•

please, that the

increasingly general) and assuming, if you

something

has

banker
that

CONVENTION.

BANKERS'

106

pressures

reduced

are

minimum—there is an

will insist that they are

time

from the soil has

dependent

by demagogues that all the /world is

upon

him and upon his efforts.

Within

limits, that is true,

there is to be the progress which

mod¬

civilization has come to believe, it is patent that

other

but if ahead of us
ern

have

must

producers

equal

in the scherne of

place

representation of this position, as you will all

The usual

banker is

recognize, is of course that the first duty of the
the

the soil,

producer from

is not only the one

as he

place, but,

gives us the necessities of life in the first

who

otherwise, also
purchaser of the products of others.
In other

fair

through

becomes the

and

financially

treatment,

words, he merely suggests a priority for the group
sents.

must

••

;

': '■//•>

:'//

that there

But

decided.

marketing, remains yet to

through proper co-operative

However,

banking machinery

through

done

should

this

method must be devised for

some

dispose of his

either at the moment the harvest is

crop,

while its movement is under way, as this has

been too often used as a means

for price depreciation; and

methods must be discovered for

lowering the cost of financ¬

ing him, both through the period of his production

and for

venture to describe two successful

ing organizations, operating on
Fruit

fornia

necessity for

bitter

the

order that he might

One, the Cali¬

the Walnut

protection

Growers'

their inception

two organizations had

These

Association.

co-operative market¬

the coast:

other,

the

Exchange;

interest

of the producer in

interest

Our community
set

Exchange.

community, not only locally, but to the whole citizen-

ship of the country, as no abuse of their power has yet ap-

"The

history

fruits and similar

visions

perishable

and

the producer

the

are

rarely,

financed

ever,

the

Thirty years ago the situation

in both grain and citrus fruits,

grain then had the advantage

The

organizations

others that

culties of
and

were

supposed to be

the producer.

far as

chinery for such public protection,

ably

clear;

good

for

such

but

for all the diffi¬

may

the

final out¬

if internal politics and the
comes

their undoing.

their

preceded

were

They later developed weaknesses

rogant use of the power that
proves

from great membership

As yet the skies

organizations

members and

the

ar¬

are,

public at

are

reason¬

course,

large

only
long

the dominant minds in the organizations are honest and

fair, for the improper exercise of the economic
associations

of great

groups of

the producers of

modity resulting from mistakes in judgment
vice

weakness

internally

organization

will, in the end, bring

externally,

products."
of our citrus

general manager of the most successful

The

fruit associations states that it

is his belief that any mar¬

members were reason¬

ably prosperous and where their products

had been handled

reasonably fair basis before the creation of the asso- v

exclusively

composed

organizations

producers of agricultural or horticultural

He states a belief that only producers

ciation, would fail.

and

ment

treat¬

producers who

handling of their products,

bad

through

necessity

dire

under

been

have

who

through and who, because

what they have been

appreciation of the effect of the abuse of economic

selfish ad¬

less inclined to attempt individual

are

vantages,

successfully maintain a marketing

hope to

can

organization.
However, it is obvious that the movements for such or-

continue and that beneath these movements

' ganizations will
is

attitude of mind

fraught with danger for the

wdiole nation.

The

Attitude.

Bankers'

which

will

power

any com¬

from any

reaction, either

finally

destroy

fact

This

the

and

from,

ness

policy made by resolution of the Citrus

Association, having 15,000

general exchange, is

contributes

largely

to /the

follows:

prosperity

aloof¬

movements and their

such

for

'banks

participate in, and,

within limits,

bankers

absurdities of some

plans now under way, and also to the end that the

of the

producer may have the full benefit of a fair portion

cated

any

one

however,

group,

must

of the

credit allo¬

portion of

fair

available,—this

credit

whole

exceed

not

contribution which that group makes to the total

the

production

of the nation.

Irrespective of any evidence, statement or argument given
for

balance

the

producers

there

exist

certain

great

economic
and

evidences

power

same

tendency

use

intentional,

This

the
or¬

other groups of pro¬

selfish

trend

may

not

yet it exists, and must be faced.

time, the fact must be recognized that some¬

needed to protect the producer

and other

of these proposed co-operative

consumers.

the country,

to the. country's welfare,

necessary

the disadvantage of

ganizations to
ducers

people, of

of the

groups

in his legitimate

functions.

then,

This,
cause,

In
so

statement of

the situation,

be¬

problem, a frank statement of

primary necessity.

sketching

far

simply

the solving of a

the case

being of the public that whatever makes for the

legitimate interests of the producers brings a corresponding

to,

at least point out the dangers and

may

members, 200 local agencies, 20

district exchanges, and one

resistance

promote, co-operative organizations to the end that

thing
The declaration of

the need for de¬

bankers

resulting organizations, or whether, on the other hand, it is

conscious

at least defeat its purpose.

brings home to the

termining whether they shall maintain an attitude of

At the

well

referred to should be restricted

the laws

under

associations

to organize col¬

understood that the right

should be

"It

lectively

"Agriculture

of their co-operative

effort.

Policy.

and

preserving at all times

producers the legitimate benefits

to the

provide the ma¬

and should

action of producers

advisable

the citrus fruits.

a panacea

This, again,

of these associations,

finally

over

I have mentioned

finally collapsed.

come

marketing of citrus

marketing was concerned, were not dissimilar, though

the

collective or¬

likewise requires pro¬
public against abuses by such

safeguard the

that

collective

products is not at all dissimilar from the

basis of warehouse receipts.
of

public concern which authorizes

same

marketing of grain, though the citrus fruits

movement nad
are

movement and

the

capital which they con¬

their own business facilities.

tribute to furnish

there

peared.
The

capital contributed but rather as a fair return

members for the use of the

to the

power,

has come to believe that as at present

and run, these organizations are of real benefit to

the

dividends

earned by the

of their

Fruit

transact their business. Such
should not be considered as a profit

through which the members

remember

live.

California

in furnishing the facilities

the capital employed

paid on capital, /

dividends

considered in the nature of a reasonable

keting association, created where the

equitable period after his harvest.

interest

Any

distribution.

of the industry itself

storage, manufacture and

and the necessities of production,

forces him to

reducing the pressure on the producer which

completed,

regard to the nature and extent

due

should be determined
organziation, with

by the members of the

in each instance

ganization and action by producers

■-'■/

'/■//

problem;

this

meet

capital employed, are details that

the

he repre¬

modification of the old attitude, is patent.

whether

;■■/,

must

bankers

the

That

interest or dividends on

voting power of members, or pays

however, should be

things with the producers from the soil.

capital stock, has equal or unequal

formed with or without

of mind the producer

out

agricultural

producers

fide

bona

corporations or other¬
in producing, manufacturing, distributing and selling
products.
Whether a producers'
organization is

wise,

told

Federal and State laws should be

public.

permitting

products to act together, either

their

been

the

enacted

of producers

insisted that he was.

in the old day

benefit

the community just as the banker

extraordinary danger that these great groups

From

and

judicial mind and poise,

roughly the

machinery and its operation,

the

financing of the .commodities

relates

BANKING

107

SECTION.

discussed, and in giving the rough picture of the complexi¬

that individual

ties

and

difficulties
the

well

trend

the

movements

financing, there is no intention of offering

It is obvious that there is

general specific, but rather

The Transportation
By John J.

of the

Those

who

conditions

during

affairs

economic

forecast

railroad situation

bettered

for

basis

find

may

themselves

the

be modi¬

changing conditions.

Savings Bank, New York; President Savings Banks' Association

the

showing.

poor

business

poorer

railroad

sult of wage

en¬

roads

ment market.

meet

tremendous test of the

highest levels

April,

re¬

severity

winter,

the

the congestion

railway operation—had

railroad history.

The rail¬

their six months period

particularly during

"outlaw"

the

had

and

labor

troubles

strike in

traffic and the resulting

the car shortages

goes,

relatively

increases, higher prices of material, fuel sup¬

the

The cost of operation—the

statement.

plies and other large expenses of

bank credits and to the improvement of the general invest¬

prior to the time the nation's railroads went

Never have the railroads shown

general

reached

Immediately

for

It is equally obvious that the

State of New York.

larging foreign trade, to the prompt liquidation of seasonal

under Federal control they faced a

must determine

they arise.

meet

improved

to commercial prosperity,

operation is fundamental

fied

Successful

coming years.

the

questions

bankers acting in small groups

areas,

Act; Its Effect On Credit

President Emigrant Industrial

Pulleyn,

the

bankers,

small

attitude of the bankers generally must, and will,

general specific or general panacea.

any

relatively

embar¬

terminal

sufficiency of private management under then existing laws

points, all seemed to provide the darkness before the dawn

and regulations.

of railroad

They could not adequately meet the

ex¬

panded industrial requirements of the country alone, with¬
out respect
for

to quick preparation necessary to mobilization

war.

The

Commission;

case

1914,

decisions

rate

of the

(the advance in rates
and

15%

the

in 1910; the

case

Interstate Com¬

1917), served to

widen the breach between the government regulatory agen¬
cy,

the

shippers

study of these

and

the

railroad

operating

officials.

is convincing of the irrelevancy of evi¬

cases

credit rehabilitation.
in

elements

Act

tion

three adverse

merce

Two

the

since

the

Transportation

Act

1920

make

greatest piece of constructive railway legisla¬

the

Federal

land

grant

acts of 1863 and 1866.

They are, first, the appropriate means for the return of the
carriers

private management, and,

second,

the definite

regulatory policy of Congress by mandate to the Interstate
Commission.

Commerce

certain that

Without

these

provisions

general bankruptcy and disorganization in the

nation's railway system would have followed.

dence introduced by representatives of the railroads to the

underlying
ment

making impossible

causes

Life

satisfactory adjust¬

The conflict of State and Federal regulation had become

acutely
tives

oppressive to the

Advisory

railroadp.

Committee

The Railway Execu¬

conducted

nation-wide

cam¬

paign to place before the public the troubles of the

rail¬

market

values

rail

securities

had

been

declining since 1910, when, in 1916, they took
rise to

railroad

influence

temporary

Washington,

passed

circumstances, together with the

war

required and made desirable Federal control;

required

customers, the

Our

fairs,

rests

transportation

adequate

upon

prosperity

the

status,

own

facilities.

study of the solution begun with the

1916-1917, and then by the

exposed

the public

In the past decade they have been

criticised,

dissected

inquired into,

Newrecent

Transportation Act marks
is

gaze

and

speak.

have

a new era

for the railroads.

that

the

Commission

Commerce

Interstate

was

enabled

the solvency

have been added to the value of the total railroad

railroad

management

Representatives;

take

inventory;

the

investing institutions,

which

logically must

respect

There

are

The

interest

throughout

this

banking

period

sarily been most direct.
American

Bankers'

and

investment

institutions

railroad) conversion had

The

neces¬

studies and activities of

Association

and

its

several

the

sections

added much to the constructive thought of the
period.

The

The
been

in the

basis

States amount
of

this

owned

over

$1,700,000,000.

by the 634 mutual savings

banks.

These

surance

companies, total almost $3,500,000,000.

holdings, together with those of the life in¬

represent

the

from

primary

have

ownership

seen

these

4%-5% in 1916 to. 5.77-7.69%

increase of 28%

54% in yield, with

the

securities

bed.
in

Sept. 1, 1920,
a

and

private

net

earnings

ownership

last

at the

March.

Our

yield
or

ebb

period of their return to
The

railroad net earnings for 1920 are

of all prosperity.

first

six

the real

properly

months

unprecedented for their

facts

have

radical

concerning

explained.

An in¬
now

It will better credit generally, for

our

domestic life.

The splendid organization at

present being established by

powers

Washington in

con-

provided in the Trans¬

portation Act makes that body worthy of the responsibility
and

confidence

department
the

placed in

discord

supreme

it by the last Congress.

being organized to

public interest.

Chief
low

are

fonnithy with its increased

corresponding de¬

their

affected by

the Interstate Commerce Commission at

March.

Unquestionably the railroads reached

when

straight.

increases,

This solqtion of the railroad problem is at the

regulated,
in

satisfied

it is the keystone

than

At Low Ebb

wage

hold-'

in market values.

crease

credit

road

increase

those who think

large

They I

Such

ings constitute the bulk of underlying rail securities.

institutions

the

telligent optimism for the future of general business is
justified.

"United

are

holdings

added value

the

to other classes of securities.

among

Even those

provisions of the Act

railroad bond holdings of ail classes of banking institutions

than one-half

accrue
now

favorably received.

propaganda
the

critics

to mention

not

rates, following

new

Hundreds of millions of dollars

of the roads.

shippers and public to take account of their deficiencies in
compensated transportation.

increase railroad rates to the extent necessary to maintain

investigations by the Interstate Commerce
House

only because of the fundamental provisions of the Act

the

and

those

The operation of the

Senate

rail¬

the

discussed, heard,

analyzed

Committees

to sufficiently

Ad¬

industry with its intricate ramifications has been

completely

and protracted

required

our

stability of the country's economic af¬

very

who have had the capacity to

the Adamson Act.

emergency,

lands Committee in

Nation.

institutions own, I deem of chief import to

our

discussion.

roads.

brotherhoods, with increasing strength and

This combination of

ties which
this

steadily

drop precipitately thereafter.

The

the

versity in transportation spells disaster in business.

roads, but there it ended.
The

Blood

These elements and how they affect banking and securi¬

owing to the then existing conditions.

and

Co-ordination and co-operation,

will

now

result.

the various provisions of

the

Act

and

interest to bankers are Sections 210 and 422.

tion 210 provides for a revolving

available in loans to carriers for
Federal

control

rather

misunderstanding between regulator and

shipper and public

among

Every

transportation

serve

stated

Sec¬

fund of $300,000,000, to be
a

period of two

interest

rate

years

after

"for

the

transition

the

Railroad

IUte-Makinq

Automatic.

exercise of its power to prescribe

Commission

the

such

rates

economical

and

whole

(or as

The effect of the

whole in

for maintenance of way, structures and

railway operating income, equal,

nearly as may be, to

of the railway property of such carriers held for
in the service of

for

one-half

discretionary

with

and used

Commerce Commission/ to be used for the purposes

selling at

the

case

Commission

The

and made rates to yield

has

one-half to

reserve

of fur¬

The

Commission

general railroad contingent fund.
fund is to be used

the

standard

the

was

rate-making; the division of

unconstitutional

and

confiscatory.

executives doggedly opposed it to the last.

ett,

President of the Union

tacked its

constitutionality.

Pacific

and

This

"key log in the jam,"

Plan

the

salvation

characterized

provision

by Elihu Root

constitutional

the

railroads.

and

the

Such

sion

recently said:
the

railroads

the

bill

nomic

and

"Although the provision
unconstitutional

was

attacked

legal principles

there

sound

compensation
a

direct

The

adequate.

upon

railroads to pur¬
determine

can

the

for the rental of cars.

necessary

bearing

inclined

not

wrere

unusual

powers

transport coal.

for

over

This

time it

the adequacy or, rather,

buy equipment,

The Act gives to the Commis¬

was

railroad

depending

The Commission can

this industry.

must

to the coal mines

public necessity,

affected building

approve

line.

This power they

cars

considered

seriously

Commission

The

abandonment

The

manner

opera¬

extension

any

which

the

Commission is preparing to use these powers through effi¬
cient organization merits the confidence of the

eco¬

constitutional

Commission

The

the equipment of other roads.

tions.

has

during the pendency of

Congress, it is believed that under

although

Rich,

one-time associate counsel of the Railway Executives,

the freight and

PowTer under the Act

recently used in ordering all open top

As Edgar

unnecessary.

rates.

securities of

with fair and equitable

now

rhilroad management.

restrict the holdings of cars.

vicious, selfish and

They have

and

operating income should prove

equipment.

railroads

the eyes of railroad investors will always be deprecated.

railroads.

to carry

the

securities than

better

stabilizing rail¬
passenger

inadequacy of equipment; for when rentals were low

upon

Warfield

opposition

was

American

It has had
the

provision, however, cleared the stream, dislodged the

declaring

and

regulate railroad service, to regulate the movement

amount

This

opposition theatened the passange of the entire bill.

chase

made tp kill

it—-kill this, the most constuctive povision of the Act.

very

now

freight

new

of cars, and the Commission can compel the

The

Robert S. Lov-

was

should appreciate

given to the Interstate Commerce Commission to co-ordinate

Railroad, bitterly at¬

Every effort

of the

passengers

ciency in

excess

earnings was declared by the Association of Railway Ex¬
be

give added assurance to-

maturities will properly be accounted

searchlight of public opinion will now be turned on ineffi¬

bit¬

were

terly attacked in'both the House and Senate.

are

rates, net

Section 422 just described

tend to

should

meaning, from the standpoint of

securities,

There

to be used to purchase equipment to be leased

unheard-of method of

ecutives

full

road

It is provided that this

by the Commission for the betterment of

provisions of

and fully equals the prevail¬

advice by their depositors and customers

to the carriers.

The

The re¬

Bankers who may be called upon for financial

importance.

Such assistance may take the form of loans

transportation.

carriers,

maintain

and

values are as of Sept.

These

Confidence of the investor is of immediate

$1,352,943,588.

to be paid to the Inter¬

establish

6%, from 5.23% in

bond to 5.75% in the case

Railroad maturities in the next five years amount to

for.

railroad property in the ag¬

excess

rates

new

investors that early

discretionary power

fund in the interest of the carrier that

it, the other half of the

state Commerce

its

Rock

York Central,

Liberty Bonds yield about the same rate.

turn on such rail bonds marks

The net operating income of the roads is divided,

gregate.

earns

used

Line,

Coast

ing interest rate on long-term high grade securities.

thering transportation, loan to carriers, and buying equip¬
ment.

basis to yield less than

the Illinois Central

Coast Line bond.

the

1920.

Interstate

the

Atlantic

Great Northern,

are

after Federal control of 5^%, and an addi¬

two years

tional

The Act specifies a rate

transportation."

St Paul;

Island, Chicago & North Western, and the New

fair return upon the aggregate value

gr^de railroad

Central, Chicago, Burlington & Quincy; Chicago, Milwaukee
&

equipment, earn an

aggregate annual net

The high

the Pacific, Pennsylvania, Illinois

bonds of such systems as

expenditure

reasonable

and

management

advantageous to-

rates will prove

new

grade railroa'd bonds.

the medium

will, under honest, efficient

designate)

Bonds.

Help

Will

Rates

adjust

territories as the Commission may

groups or

time to time

from

in making the law mandatory.

just and reasonable rates,

initiate, modify, establish

that carriers as

each of such

shall

of ade¬

prospects

restoring credit to

sufficiently the wisdom of Con¬

the nation's railroads prove
gress

automatic—-"that in the

it accomplished

improve American

present

The

facilities.

transportation

Act, defines to the Interstate Commerce Commission a man¬
date by which rate-making becomes

securities and

railroad

quate transportation facilities through

the

the fundamental financial provision of

work

mighty

the

for

Securities

stabilize

Association of Owners of

to the National

be thankful

can

termina¬

tion of Federal control."

Section 422,

deserved, and every banker and investor of America

It is

the public during

following the

immediately

period

this time to make this statement.

it incumbent upon me at

of enabling carriers by railroad subject to the In¬

purpose

terstate Commerce Act, properly to serve

CONVENTION.

BANKERS*

108

public and

investor, the shipper and the railroad.

ob¬

The

jection to it."

210

Rate Mandate Necessary.

devolving fund of $300,000,000 provided in Section
the

Act

is of especial

After extended

importance.

hearings the Interstate Commerce Commission allocated the
Investors and

field, who,

bankers

President

are

indebted
the

National

Davies

War-

Association

use

Owners of

of this

$300,000,000 fund—$50,000,000

was

allocated to

maturing obligations; $73,000,000 to maintenance and bet¬

Railroad Securities, gave
unstintingly and un- j terments; $40,000,000 to pay claims
against the railroads
selfishly of his time and thought to providing this legisla- ■
while under Federal control; $12,000,000 for the needs of
tion; this rate mandate would surely have failed of pas¬
the short line railroads, and $125,000,000 for rolling stock
sage had it not been for Mr. Warfield's personal efforts in
or
equipment; on the basis of $75,000,000 for locomotives
its behalf, linked up with the tremendous
power and influand $50,000,000 for cars; that ratio to be observed in fi¬

ence

which the National Association of Owners of
Railroad

Securities brought to bear upon the
people of the country in

favor of the legislation.

literature

were

Congress was at all times in

Association held itself in constant readiness to

The

respond to

call on the part of the committees of Congress having
vision, and

initiation

the

Two

days previous

fundamental

financial

Make

this

Loan.

determination

mission the Transportation Act

was

the

Com¬

amended through

the

efforts of the Security Oweners* Association, to permit the
Commission to
the purpose of

tOj do with the railroad legislation.
The

Commission

More than five million pieces of

distributed.

possession of the details of the Association's activities.

every

nancing such equipment

the

direction

make

loans out

the

revolving fund for

financing the equipment of railroads under

the

Commission.

July

29,

1920,

the

and rate-making provisions of the Act belonged to Mr. War-

National Railway Service Corporation was incorporated un¬

field, and it was seen through to its consummation.

der

I feel

the

general

laws of

Maryland, and organized by the

BANKING
National Association of Owners of Railroad

SECTION.

Securities, in

bring

accordance with the declared purposes of the amendment
to
the

Transportation Act, "to act

of the Inter¬

agency

In this

purchase of equipment and to assist and

the said Com¬

serve

mission in any other
capacity or way now or hereafter
thorized by law."
cution of

Powers for the administration and

car and

thorized.

The

equipment trusts

capital

twenty shares of

tion

of Owners of

ciation it will

and

consists

The corporation is

fund is provided to

Railroad

care

Securities, and

be transferred in blank

Treasury

the

corporation

security.

being

"The

non¬

for

essentially

private corporation,

the

by that

to the

over¬

public

and

Board

Asso¬

Secretary of

objects and

though organized for convenience
a

also specifically au¬

purposes

character, al¬

with

the powers

Trustees

shall

authorized by and with the approval of the
stockholders to
secure

with

accept Federal incorporation by act of Congress

such

revision

■determined
cars

upon,

and

powers

authorized

equipment for

use

organization

acquire

may

deal

with

by carriers by railroad in inter¬

state commerce."

Wabfield Plan.

part of the

presented to the committees of Congress

during January, 1918.

The fixed return

railroad

erty in groups, the division of earnings in
return

the successful
ment

prop¬

excess

such

initiated and advocated before
Congress at that
time by the Association of
Security Owners and included
as part of the Warfield
plan. A public corporation was pro¬
posed under the name of the National
Railways Associa¬
tion to do the things it is now
proposed shall be accom¬
was

have

Transportation

The
such

immediate

to provide for the
organization of the National

end

Federal

ated

equipment

this corpora¬

rendering is significant to the rehabilita¬

credit; it is necessary to the

railway situation.

existence, the present acute

upbuilding of

Had this corporation
car

been

shortage would not have

give

health

and

vigor to the

American railways, it is essential

that

structure

means

found to

assist in

supplying equipment to railroads that, owing to the
effects of war control, are not able
to finance
themselves;
they constitute the great majority of the railroads
of the

country.

whose chief business is

systems,

Government

prejudiced.

The

railroading and who

many

early

which

days.

were

Such

those

say

the

manifestly
this

Life Insurance
of any

the

Company, whose

$375,-

generally

trustee of the New York

holdings are the great¬
single institution in the world
($.350,000,000) —

investor, I maintain, must be unprejudiced
respecting
the general railway system.
He cannot favor the
great

roads, which through government aid and
favorable circumstances and

Large

succession

conditions have attained
high

railway investors must

look

the

entire

country, at those railroads that
efficiently serve the terri¬
tory through which they pass and, hence
are
necessary in
the general scheme of American
transportation.'
Must Improve Railroads.
as

inadequate railway

wide

dispersion

roads, repair work

the

reduced

of labor and

use

bankers,

the

welfare

investors,

and

those

who

ma¬

box

the

surplus of
in

the

Moreover, there

the

East, for

decrease

cars

for the trans¬

abnormal

West, effected

output

cars necessary

reduced to

was

cars

new

was

employees of

rail¬

roads, which resulted from unsettled labor conditions.

Ev¬

effort

ery

ican

Railroad

truck

the

transportation

increased

mentary
the

country
used

motor

handle

the

being

freight

study of motor¬

and

improved
within

wagons

The

that

radius

supple¬

motor

roads

trucks

can

Such transportation merits
encouragement

tremendous

need

car

shortage.

equipment has direct bearing

the prompt liquidation of bank credits.

upon

bankers last

ern

conditions.

It is interesting to observe

trucks

in the present serious situation of
This

these

facilities for satisfying

transportation.

fast

are

given

was

additional

transportation.

use

railroad

better

Commission, established through the Amer¬

Association,

the demand for

among

being made to

now

The Car Service

Middle West¬

spring seriously felt the postponement of

liquidation

caused

facilities.

the

inadequacies

Speeded-up

and

repaired

tion

of the

new

equipment to be obtained

will aid materially;

cars

problem

only begins.

railroad

movements

but there the solu¬

There

freight

soon

is
as

great need for

possible.

Con¬

currently there is need for capital to build the
equipment.
issues of equipment notes,
aggregating
them except the Soo Line

7% and sold
ern

$68,725,000.

ten-year 6% notes

discount.

Pacific maturities

and

were

15 years, issued for

effectually

Help

Commission.

finance

organiza¬

the Interstate

Commerce

of which is to
economically and

equipment

for

the

dire need of cars and locomotives.

roads

that

are

This is of serious

con¬

shippers.
Thej National Railway Service Corpora¬
primarily alms to seek the co-operation of shippers in

this respect.

Under the Transportation Act the
Interstate

Commerce Commission
than

leased

40%
or

the

money

lending the corporation
required

purchase

not

less

equipment

conditionally sold by the corporation only to those

railroads that

can

properly qualify under the

to carriers out of the

$10,000,000

Their present market yields

acting in co-operation with

Commission, the function

cern

issued at

7%,
Organize

tion

new

All of

The Union Pacific and South¬

$15,000,000 respectively.

rail

such

At the

work; the building of

in the West.
in

accumulated

cars

tion

manage great

subsidized

criticism

railway investor—and

612,334 of railroad bonds, and

We,

improvement

Thus there is established the
great need for

president of the Savings Banks Association of
the State of
New York, the 141 members of
which are owners

ested

the

war

shortage of

portation of grain

tion facilities.

credit.

was

there

own

example, caused

average

The prosperity of the
country depends upon them.
This new point has
sometimes been criticised
by

and

rela¬

improved.

condition

The concentration

They Ave requisite and necessary to
adequate transporta¬

est

unco-ordinated

Since the first of the year there have been
only six

order

railway

been

of confining the

stopped,

minimum.

occurred.

must preclude govern¬

This resulted froni the necessity cre¬

war

from their

away

transportation

past

respect

purely essential

such

general

control

during the

terials to

Railway Service Corporation will be recognized when
that
The service

underlying

relationships is adequate railway equipment

corporation is in full operation.

the

need

equipment prevailed.

Act.

The wisdom of Congress in so
amending the Transporta¬

the

was

Through this corporation the

road manager and Investor will be

tion is capable of

This

tionships of shipper and public, government regulator, rail¬

miles of cities.

tion of railway

rebellious.

plished by the National Railway Service
Corporation, which

co-operate, for there is presented

functioning of which

that

sometimes

supplies the other feature of the triangular
plan of the Se¬
curity Owners' Association.
The first two angles of the
plan- were incorporated in the

tion Act

we must

ownership, must bring together the factors in trans-

poration

((his organization originated

Warfield plan

respect,

great public necessity.

output of the coal mines in the East.
Part

The idea of

thought behind the National Railway Service Corporation—

It has been issued to the National Associa¬

the

are

nominal

value.

par

profit-making, although
head expense.

stock

au¬

exe¬

force to bear upon improving the general rail¬

every

situation.

way

state Commerce Commission in the matter of
loans for the

lOO^y

revolving fund.

the purchase price of
equipment

act

for loans

The remaining
to

secured

60%
from

investors.

Such investors receive
prior lien certificates to
the extent of 60% of the value of
the equipment purchased
or leased.
On the other hand, the Government
received de¬
ferred lien trust certificates to the
extent of 40% of the
value of the equipment purchased or
leased.
The obliga¬
tions of the corporation taken
by the Government to secure
its loans are subordinated to those

acquired by the private

are

inter¬

prosperity of ouij country, must

investor
made

investing institutions.

The government loan is

6%, while the certificates

taken

by the investor

made to the
on the certificate it holds.
Thus the Govern¬
second lien, while the investor has a first lien

ment has a

will be paid
callable at 105 and interest on 30 days'

The prior lien certificates

equipment.

the

serially and will be

be paid to the

Government will

of the
Government at the end of

option of the
service corporation.
The railroads pay simultaneously with
their semi-annual payments of interest and principal, to
the National Railway Service Corporation into a contin¬
gent and sinking fund in 30 semi-annual installments to
meet the government loans and provide for the upkeep of
the equipment.
Such sinking fund becomes an additional
available fund security for the prior lien certificates.
The
of the loan, or taken at the

the 15-year term

Transportation Act gives the

fact that the
to
to

pay

therefor creates an

reasonable price

It means that

pijior lien investment.

for the

safeguard

and
additional

National Railway Service Cor¬

should there be default, the

poration has available not only the

credit of the railroad

(and this credit, it must
observed, will improve under the increased earning abil¬

owning or leasing the equipment
be

Government's power to trans¬

ity of the roads), but also the

well as the se¬
liquidation of the de¬

from one road to another; as

fer equipment

of the sinking fund for the

curity

corporation stands between the investor
one

side and the railroads on the other.

Service Corporation keeping watch

of the National Railway

of equipment is an

the condition

over

When

road

real loss in equipment obligations

went

into receivership the equipment was

under the Philadelphia plan, from the re¬

either segregated,

ceivership property and paid regardless
property, or it was considered by the

receiver to be an obli¬
Such equipment obli¬

indebtedness was considered.

gage

of other railroad

recognition of any mort¬

gation to be paid in full before the

gations were much sought by investors.

Those of the Na¬

TheFinancing

dollars will be

lion

since I have had the pleasure

It has been several years

the A.

In those days the Association

vital

welfare

the

reform

our

instrument acts, as

gaged
upon

time

whole

the

about legislation

country,

such

the

and to business interests in pro¬

bill of lading and uniform negotiable
well as others of minor importance.

world

all

when

war

have been en¬

activities

were

centred

victory, and when criticism of administrative mistakes
efforts to

and

bringing

intervening five years we

these
a

currency,

moting the uniform

During

services,

important

performed

I for¬

B. A. in the affairs in which

merly took an active part.

has

rected

now

remedy them were held in
arrived

are

when

return

these
to

our

The

abeyance.

mistakes

vestment for life

in each case. The certificates
subscribed for. These
prove an exceedingly popular form of in¬
insurance companies, savings institutions,

trust estates and

private investors. The

financial

supremacy

financial

sta¬

which circumstances have placed
The most pressing and im¬

position to achieve.

portant of these questions is a complete revision of present
tax

and

laws

and initiative is not destroyed

that industry

business

bankrupted,

the

restoration

of the price of

Liberty bonds to more nearly the price at which they were
issued,

the'establishment of

consular

service

foreign

intelligent and competent

countries to assist

our

export

trade, the passing of anti-sedition laws so that those who
do not favor our form of

government and attempt to agitate

the

public mind in the direction of violence and disorder,

can

be placed

businesslike
mental

where they can do no harm.
and

economical

We must urge

administration

govern¬

functions, rehabilitate our broken-down postal sys¬

issue have been

for investors of one

certificates must

it an unusual

of 40% in itself makes

government margin
form of investment.

corporation may justifiably be
reasonable return on rail¬
the aggregate and division of excess be¬

organization of this

The

considered, next to the mandatory
road

property in

most important step in the

yond such return, the

aid of

yet to be developed.
The opinion has already been expressed by bankers that
the benefits of the corporation to the railroads will be two¬
fold.
Not only will the carriers be supplied with equipment
Its full purposes are

transportation.

but a given amount of

terms,

advantageous

upon

the corporation will go farther
reducing railroad capitalization and railroad rates.

equipment handled through
toward

In conclusion,

attention

the matters which

essential

I have brought to your
continuation of pri¬

No questions

ownership merit your deepest concern.

vate

of banking and credit.

vitally affect the interest

only to those phases of the

have alluded

questions involved

consideration.

believe demand your

The co-opera¬

It is the

tremendous importance.

tion of all bankers is of

service

adequate transportation

whole people and

the interest of the

Interstate Commerce

country to co-operate with the
Commission in trying to solve the prob¬

lems of the railroads

economically. They can render material

assistance to the Commission by

For this

confidence,

capital,

co-operation,

co-ordination,

need

helping market the securi¬

Railway Service Corporation.

ties of the National

patience, all of which must

boundless energy and

result in stability and prosperous

inevitably

time for all the people.

of Big Business
Co., New York.

tem, establish and live up to a

how

budget of expenditures. We
on the subject of what a

and
funds

(so-called "Wall Street") really means,

centre

money

public

the

educate

also

must

necessary

such

centre is to the securing of

of the
assigned
to me, namely, to discuss with you to-day the financing of
Big Business, from which I shall digress for a moment to
give a few facts concerning the New York Stock Exchange
and its functions, particularly as the sale of securities
through the Stock Exchange is a necessary and integral
development

onl and

carrying

the

for

necessary

This brings me to the subject

country as a whole.

part of the subject.
the

When

must be cor¬

bility and prosperity and if we are to retain the commercial
and

a year.

$30,000,000.

000,000 furnished by investors,

By Sol. Wexler, of J. S. Bache &

of addressing

each limited to

will be two issues,

There
Twelve mil¬
furnished by the Government and $18,-

certificates will bear

of equipment

sue

Service Corporation's present i£-

Railway

National

The

duty of the bankers of the

seventies.

in the early

creation

their

such obligations.

which

of premier quality.

the Service Corporation are
Never has there been a

additional security.

observed and the certificates of

Every safeguard has been

since

and the trustee on
The practical value

railroads had outstand¬

aggregating $688,000,000.
The
alone had upwards of $250,000,000

equipment obligations

New York Central Lines

The

the contingent fund also.

ferred lien certificates and

£2 of the larger

On Sept. 1, 1920,

ing

commission power

railroad to accept equipment

reasonably compel a

have far superior se¬

Railway Service Corporation

tional

curity behind them.

certificates in the hands

The deferred lien

notice.

investor are payable

principal before payment is

to interest and

Government

The certificates of the

7%.

will be at
as

CONVENTION.

BANKERS'

110

things highly

mind

speculative, par¬

To his mind Wall Street

place where money is quickly made an I

place

banker's
a

in his

stay
or

number

of excited

broker

men

plays

always wears

starts

His

usual

lost and a good

conception

orders to

rushing about giving

and

motion

pictures,

cutaway coat, a high

the

proverbial

has been

where the

silk hat and

black cigars, and by reading novels
on

of a

of tape and

His mental picture of Wall Street

seeing

smokes long,

hero

from.

broker's office is a ticker with lots

buy and sell.
formed

away

commercial

large

he immediately asso¬

Wall Street,

name

the games of chance.

ticularly
is

with

ciates

outside

man

average

hears the

centres

where the

shoestring and runs it into

millions.

Wall

Street in its exact term takes in more

brokerage

trict,

business.

includes the

that is, the district in which

than a mere

whole financial dis¬

are

located all of the

BANKING
large banks and trust companies, general offices, of

prac¬

SECTION.
having
not

of the country, the New York

at that

Clearing House, the Chamber

Commerce, nearly all of the large insurance companies,

the Stock

Exchange, Cotton, Coffee and Produce Exchanges,

many of the

large import and export houses and steamship

companies.

re¬

the country, seeking temporary investment in call

loans

commercial

stock;

paper,

long

time

investments

financial undertakings can be found and where
machinery
has been built up for the distribution of securities to the
investment public.

In other words, it is

and

securities, just

market for money

Lombard Street in Longon is for the

British Empire and was formerly for the whole
world, and
is

Amsterdam

Paris

France

has made Wall

Western
taken

for

Holland, Frankfort in Germany and

for

their

Street

respective
than

Hemisphere, and it is

the

and

money

Norway

securities,

flotation

and

Switzerland.

the

for

Stock

recent

Exchange,

the

standing

listed, is naturally the chief centre of

are

large,
the

forcibly

called

the

holder

the

notice,

and

sale

certainty
well

securities,

conversion

daily

thus

insuring

into

quotation

cash

short

upon

which

upon

base

security values.
Wall
of

Street

the

directing head

including

not

of the

only

the

great

system

railroads

and

steamships, but also the banks and exchanges and all the
manifold

agencies by which the products of the soil

brought to the homes of

are

human

Wall

use.

Street, 'with

its

facilitates the natural

flow

for

the

enterprises,

the

movement

credits

promotion

which

dollar.

every

and

tenfold

Wall

fit

safeguards

for

machinery,

service

expansion

Exchange

Exchange.

Its rules

are

in which

but,

further safeguard,

private, which
Wall

covered

small

capitalists

become

ordinarily too big

are

Street enables

partners

multitude of

these

big

enter¬

is true

has

set,

dealt

and

with.

of prices.

brief

teresting.

this

great

institution

the

public sale of stocks at No.

although the favorite trading place
tree which

stood

twenty-four

the

in front of 68

brokers

purchase and

years

sale

beginning

though there

held

was

Street.

and

commission

securities.

This

Stock

York

which

occur

the

city

Street, and

the City Hall

of the New

York

did

exchange

name

the

surance

The

active

and

the

board
of

was

not

formed

give

the

issues

securities

ten

exchange

ex¬

under

One

public

banks

show

that

time.

This

726 issues of stocks dealt in

compares
on

in the

power

delinquent.

just subject of criticism

may

be assured that

our

have

been

summarily

quite safe in saying that

un¬

less frequent in con¬

are

business, and that the

have set for themselves
in any other line of

mem¬

standards

business.

country, the utmost publicity is given to exchange
that

read

farmer and

every

know

can

what is

citizen

every

going

record of sales is

who

In London the

on.

made, and

of the London system is in direct contravention

open

The

methods.

every

The

respect,

system

Paris

also

establishment

the

reserves

great

the

naturally
a

could

call

banks

National

far

means

use

against

cash

loans of

this

Banking System, by

of which New

Stock

York

of large

York,

Exchange transactions

sums

that banks

Exchange

of money,

sums

loaning idle

Stock

being

large portion of the general

quickly liquidated,

cities,

throughout the country into New

expansion

requiring the

ready

loans

quick

the

reserve

principal one, forced

and

vided

publicity of transactions

pro¬

calj which

came

collateral

regard

almost

hand with their depositaries and regarded

character

secondary

reserve

against de¬

posit liabilities.
Concentration
makes

capital

and

credit

incidental

thereto

possible to make commitments for the financing

in,

in¬

could not be accomplished without a definite money centre,

with approximately

the Stock

the

principles,

ethics, though

dealt

companies, leaving only six industrial corporations
at

every

conceive,

thirteen

were

and

are

Stock Exchange

Exchange

creating three central

buyers and sellers of stocks.
of

stocks

the stock market

records

different

included

this

names

later* the

twTenty-nine

dealt

association

with

expel

cases you

telephone is rarely used,

cover

can

practically unheard of.

hte present site

that time

not excelled

are

the secrecy

al¬

Chambers

of the New York Stock and Exchange Board.

year

which

and

33,000.

above

necessary to organize

agreements

information

One

From

in bank stocks became

was

extend

located

was

Sub-Treasury.

1817, speculation
tensive that is

not

the

dealings,
able

was

part

business

perpetrators

believe

inferior

regular organization until twenty-five

At that time the population of New York

the

Exchange,

rule,

to suspend

the

really

was

guards against dis¬

be called to account for

can

definite

any

for

rate

later.

settled

into

entered

New

the

button wood

definite

Street,

In that year

meeting

fixing

engagement,

earliest

In this

in¬

22 Wall

was near a

Wall

be
was

It is recorded that, early in 1792, there

office for

solemn

might

and

Busihess Conduct Committee

ethical and dishonest transactions

which

history

buisenss.

does the New York Stock

violation

that the
I

bers

level

system of

violation of the high standards which the Exchange

nection with

and equitable

even

what

that, notwithstanding these precautions, transactions

sometimes

may

cases

pate human needs and to

with

in violation of good business

Governing Board

prises, and is able by its speculative machinery, to antici¬
secure a

the

thereby creating

transaction

constructed

exists, before which members

it is

effort.

de¬

injustice might be done to the investing public,

as a

for great capital

both governmental and

country's

necessity

consolidated

the

by the public, but in such

for

the

possible contingency which the human mind

not

to be accumulated for vast undertakings,

and

Brokers,

restricts

market, promotes the diffusion of wealth, makes it possible

individual

for

carefully

assists

by the machinery of its stock

million

exception, indicates most

business, so thoroughly safeguards the interests of the

public and

even

given to

compared

active market

particu¬

were

which,

institution in the world, doing an equal amount

but

factor therein.

rules

act not only

system

the

position

present Stock Exchange with its admirable

means

and

that

which sales

7,875

Open Board

and

shares
on

familiarly called

were

importance

Stock

any

provides the

maintains

power

Street,

forms

financial

of money,

of commerce

consumers

Exchange, and
railroad

considerable extent.

honest and unfair transactions

transportation,

other

the

as a

the

Probably

purchase

1869,

the

market

tremendous

government

ready

day

was one

and

the

providing

where they

amounting

the

for

and

over

to warrant their being introduced

market,

Exchange

Stock

number

the rule rather than the

velopment
Stock

the

on
a

present day, when in

are

portant

that

times

listings and to be traded in

prominenec

1835, there

was

offered to the

were

twenty

About 1838 these rails had attained

activity in Wall Street, and it performs, among other im¬

functions,

listed

was

"Yankee rails" and dealt in to

board of which the issues of bonds of most
large companies
in good

Sharles
for

the New York Stcck Exchange.

thereafter

appear on the

suficient

with

Belgium,

Canal

subscribed

years

into the London

having

the

of digging canals, thereby

purpose

commerce.

were

Railroad,

several

Exchange.
of

was

1830, the first railroad stock, that of the Mohawk &

began to

war

market

they

Hudson
for

Even

obtaining the necessary capital to

thereafter dealt in

larly

France,

public,

for the

world's

evidenced

loans

The

market

recognized

now

large

countries.

money

place of Lombard Street

successful

the purpose of

stimulating inland

known district where credit for sound

well.

early date the machinery of the Stock Exchange

form companies for the

were

value of about 16 billion dollars,

par

billion dollars of bonds

many

In 1821, when Morris

surplus earnings and cash

serves of

bonds and

including

used for

Into Wall Street flow the

dggregate

tically all of the large industrial and railroad corporations

Ill

Exchange to-day,

as,

out

large

business

enterprises

their

first

stage

which

however great the amount of available funds through¬
the

would

country

might

be impossible to

be, if

scattered

small

units, it

make them available for financing

BANKERS'

112
in

operations

time

of the cor¬

meet the requirements

poration needing assistance.

Just as, under the old national

banking

deposited

system,

basis

concentrated
,

these

the

are

in the Federal

carried

now

reasons,

useful as a

medium

circulating

banks

various

nearly

not

were

our

reserves

For

banks.

for

credit

reserves

the country

throughout

Reserve

well as many others of less

importance which can be cited, Wall Street, so-called, has

credit is immediately avail¬

become, the money centre where

able at the time when it is needed and where the

machinery

exists for the ultimate diffusion and distribution of invest¬
ments

Corporations are organized so that individuals may be¬
come

the

partners in enterprises, limiting their liability to

amount

The

for.

themselves

commit

specifically

they

amount so invested

be represented by bonds having a

may

prior lien upon assets, with a definite date of maturity or
fixed

form

definite

return

lien

retireable

participating with

fixed rate of dividends, sometimes also

the

stocks

common

dates or

and stipulating

sinking-found provisions

out

bonds are

where

cases

having either fixed redemption

and

outstanding

the

stocks having a

by preferred

except

assets

upon

the investment in

upon

of interest coupons, or

prior

sinking fund for retirement and pro¬

variable

for

viding

in surplus earnings, or

stocks,

common

fixed nominal value or no nominal or par value,

and which

represent the equities and good will value over

either of

The stocks of corporations

which bankers are called upon

through

for

take care of business expansion.
the

hazardous,

experimental

coteries
of

the

financed

pioneer
of

coterie

The

having

not

The

stage.

in¬

undertaking.
hold

has

stock

common

ferred
to

stock

common

stock.

the

class

securities

until

other

before

success

seek

dis¬

giving

the

bonds

part

pre¬

instances, firms less particular
which

merit

their

with

the

preferred stock,

cases

many

bonus

securities

instances such

and then

been proven

compensation

many

securities

the

keeping the common stock
the

they

sell

proven,

may

offer the

the

underwriters.

the

it is called a successful flo¬

syndicate securities are sold,

underwriters have received their profits without

tation ; the

frequently oc¬

having made any actual investment; but, as

organize an underwriting

the banker may be unable to

curs,

syndicate, in which event he is the owner of all the
await

ties and must

is probably much

is sometimes more t> an he is able

larger than he wants and
to

successful ill organizing an

Or again, he may be

carry.

securi¬

favorable opportunity for re¬

lieving himself of an investment which

underwriting syndicate and such syndicate may run

The corporation issuing the securi¬

thereof.

eral

required for

its business, and the country has benefited to

corporation serves the gen¬

the particular

that

extent

the

for their re¬

suffer a loss through

commitments, and perhaps

spective

is a failure and

which event the flotation

securities,

into

distributing the

selling market and be unsuccessful in

bad

This process differs from

public.

that employed in
If, in

small communities only in the method.

small-city,

enterprise requires initial or additional capital, the in¬

community

corporators thereof offer the shares to the local
and

the

buyer

the same chance

takes

loss

profit

public at the

time all the information which

same

by a syndicate, with the added disadvantage of having

ten

Exchange upon which

market for the securities nor any

In the meantime a cor¬

them in case he so desired.

to sell

poration needing funds, which it endeavors to raise by the
sale of stocks,

is kept in doubt as to its ability to sell until
has

amount

entire

the

been

of,

disposed

against

the

advantage of having a definite commitment for the wrhole,
is the custom in Wall Street, even if the latter process

slightly more expensive.
You will observe from the

inviting the

thus

public to speculate with them in the enterprise and giving
to

are

take if he subscribed for stocks wrhich had been underwrit¬

the

tribute to the investing public the bonds or

expenses

distributed pro rata to the various
flotation is a success and all the

paid and the remainder

In such cases the investor receives a

investors

enterprise

incidental

and

through the success or failure of the enterprise as he would

of his

risk

brokers' commissions,

of which

stocks only if the entire investment

common

proportion

the

out

advertising

frequently

quick assets.

liberal

be,

may

fees,

carrying

by bonds or preferred stock if real property exists, or by
preferred and

case

existence requiring new capital either

new

supplying the needed initial capital, representing it

vestors

the

attorneys'

the underwriters, so

profit ranging from five to fifteen per cent.,

to yield a

however, secured the funds which it

the

are

price slightly higher than that paid by
as

ties has,

necessarily

transactions

by the selling syndicate at a

the public

The securities are then of¬

brokerage fee or commission.
for sale

number

underwriter there is usually a small

the

the liquidation

to replace losses or to

passed

paid

definte

and limits his liability

by the banker and the

the price paid

Between

thereto.

fered

shares, as the case may be,

price

for

himself

commits

underwriter
bonds

divided into two classes:

that is,

and those already in

are

fully sets forth the terms and conditions upon which each

businesses just starting,

to finance may, for convenience, be

pioneer enterprises,

former

accomplished by an agreement in writing which

this being

syndicate participants must take up and pay

bonds and preferred stocks.

and above liabiliteis,

banker the securities,

syndicate purchases from the

which

the country.

throughout

Ui\ v m\ 1 i v7 x\.

ter of
es

foregoing that the whole mat¬

financing business is quite simple, that all its process¬

are

and above board, that the corporation knows

open

they have, so that those who purchase speculative securities

just what its new money will cost and, having made its deal,

its risk is ended

this

they

character

and

take

enterprises,
selves to
nished
In

duly

are

if,

failure

apprised

frequently
loss

and

occurs,

ensue,

the

they

risks

cases

which

have only them¬

blame, provided always that the information fur¬

accurate and

States

many

passed, known

been passed until

Union

laws have

recently

particular States where such laws have

their merits have been passed upon by

competent board and the particular issues approved.
this

all

character

been

are

desirable and

States in the Union, and will

should
very

Laws

enforced in

far in saving the

that of the

and

terminates

banker's risk

the

public in its

securities.

careful

It
other

are

true

turn

number of

relieve him of the in¬

relieves them by buying the

that bankers

individuals and

are

that often,

infallible

after the most

investigation and in perfect good faith, they

security' which, from

buy and distribute a
other

when

and the risk of this group is again terminated

vestment,

than

The

banker commences.

is reduced

other bankers or individuals agree to

when

correct.

the

the Blue Sky Laws, which prevent the sale

of securities in the

new

beyond their control, turns out badly.

This, however,

exception than the rule, for the banker's best

is rather the

endeavors

may

one cause or an¬

are

always in the direction of handling securities

the standpoint of intrin¬

public great losses which have been incurred from issues

having genuine merit, both from

by irresponsible houses and individuals which have deceived

sic

the public

only his money but his reputation is at stake.

by glowing prospectuses and promises of future

The second class, that of

supplying going

concerns,

States,

municipalities and governments with additional capital

re¬

quired for legitimate purposes, is the more general field of
financing.

These transactions are generally taken

houses

after

careful

audit

and

through every means at their command,
mitment

immediately
lieve

and

Thus you

value.

banking

value

purchase

being

thereafter

themselves

all

made.

form
or

Such

syndicate

part

of their

investigation

outright com¬

banking

houses

order to

re¬

responsibility,

future

earnings,

every

instance,

not

will observe that, without Wall Street and its

complicated yet efficient machinery for the distribution of
securities and the maintenance of
roads would have

purchases,
veloped
years

difficult time

our copper

rapidly,

ready markets, our rail¬

financing their equipment

and silver mines would not have de¬

our

motor

companies would

many

behind in their perfection of the automobile and their

production

quantity basis.

large corporations would
tive capacity

matter of fact, all our

have their earnings

and produc¬

limited to the extent of their capital and such

BANKING
credit

the

banks would allow under the circumstances.

brings

another

function

of Wall

This

Street—and that is

funding of bank loans into marketable securities.
periods

are

this

(and

moment)

passing through such

are

when corporations must avail

There

period at

themselves of

loans from their banks in order to finance the expansion of
their

business

ever,

at the first

funded

are

bond

proceeds of

the

houses

which

banks

procedures
burdened

carrying of their

favorable

inventories.

opportunity, these

by the corporation's selling to

bankers and

pay

the

with

mercial and

possible,

frozen

notes,

would

banks

our

credits, and

economic

corporations

syndicate of

bonds

accommodation.

temporary

not

were

the

usually more than sufficient to

are

their

issue

How¬

bank loans

re¬

soon

during periods of

com¬

their

bank

loans

demand,

our

financial structure would be in jeopardy of collapse.
The

machinery of Wall

from the financial magnate to the humblest brick¬

everyone,

layer,

to participate

earnings and equities

in the

our

113

It is due to this gigantic partnership of

the American public that the rapid development of
dustries has

been

made

possible.

the largest diversified
producer,
of all

utor

If the United

in¬

our

States

manufacturer, and distrib¬

commodities, merchandise and materials in the

world, the American public has been the largest single fac¬
tor in

bringing such

enviable, condition about—and

it not for Wall Street and its
many ramifications in

this

desirable

doubtedly

public

participation possible,

many

behind

years

the

were

making

would

un¬

the

progress

economic world.

that much of what I

sure

elementary in character,
most of those present

vincing but
country of

for the

have said here, being so

is already

familiar

subject

today, but if I have succeeded in

con¬

few of the necessity and value to the whole

centre (and, if so, why not Wall Street?)

a money

of the

and

Street has made it possible for

large enterprises.

such

readjustments, with the inability of

repay

SECTION.

legitimacy of Stock Exchanges

the medium

purchase and sale of securities and for the estab¬

lishment

and

publication

effort has not been

of values,

shall feel that

this

entirely in vain.

Russia's Lesson to the World
By Fred 1. Kent, Vice-President of the Bankers Trust Company of New York.
Food and

requires

protection from the elements is all

exist,

but

mentality

through

necessary.

Even

fulfill his

the

generations

without

destiny

man

neither intelligence

grow

honesty

intercourse

human

ideals,

that

and

used

beings

human

could

nor

ability,

or a proper sense of

the cheap

vicious to

and cannot

responsibility.

politician,

the

obtain their desires.

cheap

Such

with

carry

It is the

thinker and

methods

often

not exist in present numbers if animal instincts represented

but victories under

their

means

the

win,

evitably followed by the suffering of the people,

highest

mental

development.

populations

in density, it has taken greater and greater ingenuity

grown

and the further

harnessing of the forces of nature to enable

people to live in comfort and happiness.

from

group

state

the

forces

through the

master minds

Unfortunately
even as

elements

are

sooner

later

mind.

any

the

forces of evil

carry

will

family

country,

indirectly.

have

In every human

community,

human

master

city,

the

either directly

control

mind

can

those of lesser power, but evil

weakness,

tear down

and

not

controlled

destroy the

power

family is affected by the preponderance of

good or evil forces exercised within it, so is the community
influenced

will

conceivable

which

however,

woven,

families

live

his

Man-made
and

ness

the

himself

does
the

not

only his

even

right of

own

though it

through
com-

man

who

enact

for

conscien-

can

exercise

his

other human being has

making

such

admission

others,

and

positive evidence that

him,

concern

but

he wishes to
•

that

their

guidance

own

rights of others must be controlled.

Peoples who
to choose

guide

are

honest

for their leaders

their affairs of

happiness and be the
intelligent

portion

in their

give

fairest to all

life

they think will
them

the

concerned.

population

endeavor

being

are

essentially

striven

numbers.

for

arouse

dishonest,

not
the

such

would

government,

right,

passions

the

but
of

force

of
a

the

people

however,

tives

led

which
power

requires

regulations
citizen.

individuals

democratic

people,

will determine government.
masters of their

therefore,

own

People

even

In the

case

have

Itepresenta-

selected

some

otherwise,

such

the

Density of

would

by the people, whether intelligently

manner

impotent

are

government until abuses of those

in power have been carried to such extremes that general
because

ensues,

nobody's business, and

what

is everybody's

parties

so two or more

business

be found

can

in nearly every group of democratic people, the leaders of
which

take

principles

upon

their

often results in

themeselves to criticize the

change of

before it could be

This

opponents.

when

acts

done

and

honestly

policy bad for

some

otherwise

people

brought about, and before it

has led to general suffering.
The best interests of

people demand that its government

proved this beyond

inconsistency

Even

operate.

human

with

exercised
ness

government,

would result

none

which

though

nature

that

has

world's

confronted

are

which

government

if allowed

autocracy second

existed since

the

war

such is the

too much

cure

doctrines
in

the

of doubt,

manner

any

to-day with doctrines aimed to

vicious-

beginning of the

world's history.

the

Russia

to-day

situation, that is

open

time
even

lesson

the

from

though at

the

to accept the facts
their

the moment is

personal

people,

such

example

will

the

open

there

eyes

are

many

this
In

the

world,

who

refuse

they exist, because they consider I

interest

not

Rule

Russit

falsely dignified by calling it

experi-

so.

It does not represent to the slightest
the

labor.

have

book for the world to read.

moment

ment in government.

Such

the

upon

be appointed to carry out the will of the mob.

degree the:.voice of

easily

in-

are

prohibit town-meeting government,

through appeals to the passions than through reason.

appeals

passing

greatest

The least

they

the most effective, which it is not.

were

national

those whom

state

exercise,
Properly

wherein the desires of certain individuals which
may affect
the

if it

has

man

be at the expense of others.

them

population

sacrifice.

man-made laws represent the expressions of opinion of the

people

private will which

may

voice

regulate and not

rights

does not

direct

government to which he submits

because of the selfish-

every

man

any

inter-

their

wihtout

freedom

entire

respect the

humanity

beings

is impossible, and

make such admission it is

good

wrong.

world

would

anyone

human

humanity.

Every

the

admitting that

right.

same

binds

the

without

lives

only necessary

are

will

his

short-lived,

are

It is manifestly impossible for every individual to have
a

suffering

exercise

growing children and

fairly to

ignorance of

tiously claim
will

classed

condition

could

man

particular the

any

their

such

every

would-be act of

the

are

life

laws

could

with

munities that
can

that

being,

such forces is stronger for good

families which constitute it.

affecting

human

committed

the

among

without

other

the trend of

for evil

them

people
It

mere

portion

any

tyranny

which

the

has

existed in the world before in comparatively smaller ways
at

innumerable

carried

terrorism

human

times

during its

history,

and

being

solely for the benefit of those in control through
and

being

without

or'

group

the

slightest
human

regard

beings.

Its

any

other

existence

such

over

CONVENTION.

BANKERS'

114
period

long

control

those

which

steal

at its

unfortunately

were

able

it possible for these auto-

This wealth made

inception.

possible because

been

only

has

of loot in all forms of wealth

vast amount

the

crats to hire the master

minds of the underworld to become

their

civilized

agents

every

out the world based

has

that

propaganda through-

pretended idealism, which is not

intention nor desire, but

fooling

effective

wonderfully

been

even

in Russia

striven for

being

this means

country.

they have been able to spread a false

multitudes.

of the Russian Government which

the vast wealth

With

without its liabilities, the new Czars came

was

taken

into

possession of the machinery for manufacturing paper

over

While decrying the use of capital and money in

money.

printing

form for purposes of propaganda, they ran the

any

for Russian currency at the highest speed within

presses

their power,

and flooded the world with promises to pay

which

never

were

intended

issued over

currency

Knowing

kept.

own

signatures would

that

ae-

they in effect forged the signatures of

cepted by no one,

government of the former Czar, which they had over-

the

and

thrown
world

which

Rouble.

built

been

and

called

this

further

finance

those

who

value

to the former

relation

means

price

low

the

fund

immense

in many countries of the world,

used

souls

being

promises

false

these

buy

be had in

could

they

the

was

attention

of the

Labor in many countries

repudiated.
induced

was

investment,

their

which has
their

willing to sell

are

their method of life, to be able to differentiate between
fundamentals and false premises in practical things. They
do not appreciate the fact that only a successful business

world makes it possible for them to exist in their callings,
If it were not for the savings of business, every man would
be obliged to give his whole time to the production of the
necessities of life.
v
The expenses of scientific discovery are tremendous, as
to the cost of the successful experiments must be added
those of the innumerable failures. Such expenses can only
be met because the business of the world is carried on in
such a manner that there is something left over after
payment is made for food, clothing and shelter that can go
toward the development of science. The same thing is true
as to art and lierature.
A starving man must have something to eat before he can enjoy a wonderful painting of
a good dinner or a well-written book of any kind.
That
the lack of practical business understanding is common to
intellectuals is well, known to the crooks of the world,
and they make the most of it. On the lists of names
which have been taken from the dishonest groups of men
who make their livelihood through floating valueless securities are those of doctors, preachers, artists, professors,
teachers, writers, etc. The fact that people of this character are constantly investing in false securities naturally
adds to their feeling of criticism toward the business world,
even though the putting out of such issues has absolutely
nothing to do with business any more than the operations
of burglars or hold-up men.

which, if successful, is

Another class which preys upon the intellectuals is that

certain to set the world back many centuries, to say noth-

of the vicious radicals who, lacking responsibility as to

ing of

carry

propaganda

misery which

incalculable human

the

follow,

condition

the

Russia

is bound

conclusively

to-day

The

deluded

poor

people

promises were not able to

purchased

who

false

these

that the money which

see

they

for them was going to be used in such manner that

gave

the needed

to the minds of the impracticable.

Again

ministers conscientiously

find

thought-

but

and women without integrity or

lessly inviting

men

become almost insur-

sponsibility to

explain

to see how dishonest,

congregations on the plea of broadening their education,

would

Neither could they seem

mountable.

lets with pretty word pictures so constructed as to appeal

curtailed

production of the world would be

the difficulties of living

that

them along with clever logic based on false state-

ments of fundamentals, or they fill magazines and pamph-

proves.

their statements, address gatherings of intellectuals and
carry

re-

their perverted theories to their

which

It is just as much the duty of a minister when inviting

while encouraging investment in order to obtain money was

speakers to address his men's meetings and general gath-

inconsistent

the

and

same

time

The

all.

inception

impossible

was

has been

intention

system

denying the right of investment to any

so-called

Soviet

ready

Government

make

peoples where it could obtain
with

human

promise

any

concession in

whatsoever of living up to

given longer than

was necessary

since

ever

its

other

return, and
any

promise

to receive the benefits of

The Soviet Government has

with

any

peoples

possessions of the
private

been honest with itself

world

the

Russian

from

stores,

never

since

people

banks,

their

from

their

they

their

stole

the

public

and

warehouses

and

Unfortunately for the world,
country,

every
and

men

women

literature,
false

who

might

which

exercised

are

work

not

practical

their

business

their

was

eration.
with

would

The

yond

man-eating tiger out of

It is as bad for the world to poison

men's minds as to destroy their bodies, and when

minister

is himself willing to play upon the passions of liis people
for the purpose of making

a name

for himself, he stoops to
In fact he may do more

barm than the anarchist, for the explosion of every mur-

derous bomb shocks many careless thinkers into a recog-

nition of the evil of their attitudes.

In order that the full powers of tfiose gifted in science,

livelihood
tax

upon

based

business,

laws

amateur

Business

superficial

men

look

knowiedge

instruct them how

to act,

honesty of purpose among

but

they

have

many

not

the

It is all the

necessary,

With

respect of all when the good which they do is not dissipated

through association with the ignorant and vicious,

intellectuals,
and

heroes

to lead cowards to

calling

think

themselves

they can

that

"Reds."

These

Pose

throwers of bombs and would-be destroyers of the world's

who

industry

same

The word "Red" has been dangled about the world in
such manner

under consid-

way.

such people is bemeans,

gifts are able to succeed.

progress is second to none, and they carry with them the

it.

in exactly the

ciate their work, and its value, that those who have such

The part which the real intellectuals take in the world's

they would think that

the

of the

gifts

upon

false premises.

economics

support

operate with men of business instead of siding against them,

critic of authority when

upon

financial

dishonest

economics,' they

the propositions

and

It is only because men of business appre-

surprising

should presume to criticize them in
any

business world.

therefore, that the intellectuals should endeavor to co-

which has

opposition to

the

in claiming to be

mere

question,

they have both the moral

|hose in-

the

analysis not to be

specialized fields of activity,
crazy

teachings

requiring practical business knowledge and

man

was

science, art and

their prestige to the

The attitude

minds in

understanding

gifts in

easily be fooled by logic based

can
a

real

the

upon

Their

seem.

tendency to set
life

have

mouthings of the vicious.

propagandist is found
as

so-called intellectuals

many

body of people which is composed of

adding the weight of

are

tellectuals

it would be to shut

bis Sunday school.

art and literature may be brought out, it is necessary that

their homes.

purpose as

the class of the thrower of bombs.

the concessions.

nor

erings to make certain of their character and integrity of

because of

Peace,

and their followers,

They may see red, but they
A

great deal

heard

which without analysis is

are

these
a

unfortunately

color blind,

are not red, they are

days

yellow,

internationalists,

fair catchword.

As far as the

world has been able to determine at the moment, however,

their principles

seem to be based on hating your neighbor,

but loving your unseen brothers

across the

sea.

It would

seem as though it was considered safe to love only those

BANKING
who

far | enough

are

harassing.
between

closer,

away

that

It may be that as the

different

parts

invention

the

proceeds,

it cannot

world

that

become

the

The life of

to avoid
is

man

true citizen of

local

the world

closer

only become

he first protects his

family,

such

once's

and not

thing

his

of man's

desirable

for

the

all mankind.

man's mind and heart

all

other

community

or-

building

until

ultimately he

good

of the whole world is

the
of

America

means

neighbor

through

benefit

States of

out, but it
our

selfishness, begotten by love

that

great clearness

United

family

There

world without allegiance

desire, gradually extends

ganizations
with

The true

country.

from

grows

allegiance to

his

lessening of

country if

or our

child.

own

just

are

can

see

love

our

for

our

family

we would strive to benefit

fact success in such work can
only follow
througli love of country, such strong love of
country that

its

position

and

before

the

world

force,

be it great

stand

before

world

good,
love

whereas
of

the

their

country's

small.

vast

and

with

As individuals

combined

own

honor

guarded

with

few

many

exercised

integrity

man's

men

for

through

men,

and

the

can

through

government

influence for good

every

force

appreciable

any

force

country

representatives

have

may

the

right dealing is jealously

their

commerce,

lives of those

other nations.
In

principles follow,

same

the power of any

industrial

to work for them

such

by investment in industrial
undertakings,

investments

double

return

through the payment of dividends,
increased
or

production

desire,

other

that

The

safety

things

can

countries.
the

received,

and the

which

other

those

who

develops
official
is

and

their

select

they

men

such

the

will

but

heart

make

continually
their

that

true

and

officers

and

development

form

is less

organization

from

industry
ranks

mistakes

man

apt

constituted

own

that

made

are

long

present,

interests to protect such

happen

society

than

has

been

yet

other

any

able

situation.
from

amazing.

with

few

raw

the

The

ranks
same

States evidence
clearly this

of high-salaried

every

thing

institutions, and

the

railroad in
true
men

in
in

the

our

have

country is

banking

control

every

industrial

and

to-day

are,

plan and guide it.

material, if it is

organization there must be

There

must

who

plan to make both sides balance with

sell

between.

the

men

who

finished product.

Different kinds of

There

ability

different kinds of positions, and human

must
a

proper

to all.
all.

men

for their

humanly possible.

Aside

from

the

question

of such action, about which

of
one

the

right

really has

Third

men

are

determining.
to

are

Under

be filled

tlieoret-

success lies in

ability and willingness

people through their passions,
breakdown

that is necessary

human
in

beings have

bringing to

build

industry

Russia

would

to show the fallacy of the plan

spent

land

over

factories

new

which

they

that they may desire?

any wTay

factories which represent

over

bodied

the

of hard

years

such?

Not at

study and labor

of effectiveness.

state

wish to

control themselves in

can

No.

Do they

They only wish to take
of hard work

years

savings of the stockholders and the

em-

energy

With all of their pretended criticism

managements.

of capital, it is actually capital which they wish to
obtain,
and not through any orderly process or on any basis of
right,

but merely

There

capital

through the

question

but

and labor should

competent
things

should

have

which affect

will demand it

considers

world

develops

industry

greater

itself.

The

representation

interests of

very

to-

becomes
the

capital

time goes on, and thousands of industrial

constantly

are

success

the

brought closer and closer
in

of numbers,

power

that

gether, and that the labor

such

aiming

work

closer

and

One of the greatest difficulties

attempts lies

the

peacefully-inclined

radical

and

agitator,

happy

workman

menace to his own interests.

Upon this whole situation depend the future
foreign
lations

the

United

States.

find

through

have

confiscated plants

the

teachings
on

For

from
no

instance, in Italy
Russia

basis

that

rewe

workmen

right, but merely

because their government has been temporarily cowed
sufficiently to prevent it from protecting the owners. While
this condition exists, even though Italy has vast
industries

run

safely

of ability and integrity to which credit could

men

extended

to this country.
the

peoples in

it is neither safe

nor

a group

other

countries,

the

desirable to advance credits

of workmen refuse to recognize

rights of their neighbors who

industrial plant, why should

stockholders in

are

them to recog-

anyone expect

nize the rights of foreign creditors who might advance them
material.

raw
are

either

Their very actions

dishonest

not

which to make
workmen in

the

Italy's

her

case

claim for

Italy

ment again sees the

built

see

state

believe

rights of creditors, and in either

clearly that they
in

credit.

their fault,

Italy

will

naturally industrious citizens

This whole

outgrowth

recognizing the

they have
As

ground

soon

and the

the

govern-

necessity of protecting those who have

industries,

unfortunate
the

vicious

receive
have

the

development in
propaganda

help

right to

Italy is
Pandoric

Russia.

We must expect that until the Russian tyranny has been
destroyed every radical agitator who is being supported
by its propaganda

Under the Russian propaganda
workmen are
encouraged
to take over the plants in which
they work and run them

the

system promotions

present

Do they wish to take

expect.

to how such

What they wish is to take the land upon which other

judgment is applied

strongest

advocated

the advo-

misled

right

cates of this policy are not honest in their
purpose is evident

upon

those

fulfilled,

of the confiscation of property with the idea that
it could
be managed by the confiscators for
the greater public
good,
That with all their pretended idealistic
theorites

which

incentive for the selection of the most
capable

themselves.

that

Under the

complete

all

are required to fill

company to make good to their stockholders is
the

wrong

The
seem

buy

profit

with all the success of which it is
capable to put the
men in the right
places.
The desire of the officials

assistants that is

and

things and whose only
to mislead the

and

manufacturing organization,

men

who

men

exceptions, those who have started in mediocre

positions.
men

United

The proportion

ic-ally by the vote of the workers, but
actually, as has been
proven in Russia, by those who have failed
in practical

There

activities

must

over

human judgment is capable of

moment

The railroads of the

financial

selected.

various

the proposed system such positions

who

the

taken

based upon the ability to
accomplish work to be done, in so

far

entrusted,

discover.

risen

to be

companies

human organization

every

mind

are

their

good.

there

system

closer to their employees.

the

upon

shown, but this is something

Where the stockholder has his
a

present

depends

ability makes possible.

here

organizations

rising

All

organization

interests, knowing

investments

believe wrill

are

positions

doubt

for

require

exchanged for such things with

holders

sometimes favoritism

that
the

through

may

they

honesty and ability of those to whom they
endeavor

one

situation.

International lies in the question

of the

industry the

organization increases with the
loyalty of its
employees, whether they be in official positions or not. The
savings of many people are brought together and made
On

such

efficiency and of public benefit, for

and must be carried out by men, and the
only difference in

the

beginning to find this

that of

is supposed to be considered in the
development

industrial

the

can

tlien his community, and then his state and
country.
is

115

comes

the public

and

intercosmosap-

*doubt,

entanglements.

constituted that he

em-

internationalist of

the day may find it
necessary to become

alist, in order

become

of communication

means

SECTION.

control

large

and its
masses

funds

people in Russia control, and

and

the

any

their power.

forces

for

evil

now

will

men.

continue

When,

able

however,

the

real government is set up,

rampant

the

world

will

lose

Where foreign borrowings can be used for internal
development, such as was true in the United States until
1914, the interest that is paid to foreign countries in which
securities are floated, either governmental or industrial,
domestic politics to control is not harmful. On the other, hand, where such loans are

foreign relations of a country are

The

political and com-'

position throughout
that is not due to our great commercial power.
never taken our intercourse with other nations

Politically

mercial.
the world

have

CONVENTION.

BANKERS'

116

have no real

allow

seriously enough, and we

in so young a
outgrow it.
Our representatives to other nations of the world should
be men trained in practical history and business theory.
This is perhaps natural

foreign policies.

less necessary that we

nation, but it is none the

and understanding, and

be men of integrity

should

They

separated from domestic politics that
fear of displacement would lie in the exercise

they

should be so

their

only

"Their positions should
to
manipulate foreign policies for the benefit of domestic
politicians would react against them.
The United States

of bad

judgment on their own part.

assured

office built up for the

have a foreign

should

of America

would feel that any attempt

they

that

good of the country and

the world, and not for that

of any

political party.
Our

which our representatives in

present system under

often chosen for the purpose

foreign countries are so

has prevented
from being able to carry out the good
fine ideals of its people would otherwise

paying off political debts in large measure
the United States

naturally

that the

accomplish.

the
ber

influenced for good or bad because

is so

Commerce
our

in order for
American Bankers' Association, the United States Chamof Commerce,
the National Foreign Trade Council,

for

commercial associa¬
joint committee to prepare a system

appoint a

seem

other manufacturing and

and possibly

tions,

it would

relations that

political

training

and

selection

could be recommended

our

with

in its relations

strictly

tained by
The
so

non-essential

commodities)

most trying posi¬
the other countries of the world.

part
life

cannot
only be filled by those

demanded and needed by those who

moment dpes not lie

methods of settlement of

in the creation of new

of all
of

could not be ob¬

countries unable to pay for them.

necessity of the world at the

much

balances

Our goods are

Clearing House, which might re-

in the resumption of

integrity of purpose on the

Safety in

banking, and in fact the
of the rights

Commercially the United States is in a
tion

stance, an International

suit in making it easier for nations which are already importing more than they can afford to increase their imports, would only aggravate the difficulties. It would
seem as though an International Clearing House, if e\ei
needed, should be established during times of normal
trade, when balances for a time at least would flow back
and forth rather than constantly in one direction. It
must "not be forgotten that, after the contribution of -any
nation, or nations, to a Clearing House fund was dissipated,
if operations continued to have the same trend the countries with preponderant exports would have to advance
the funds to carry the trade, exactly as if there were no
Clearing House. If on the other hand through the establishment of an International Clearing House it were found
possible to create a new form of security bhcked by many
nations, that would be absorbed by the public from savings,
it might have some real value, always provided the regulations were such that non-essential importations (meaning
a greater amount of essentials than is necessary, as well

that

diplomatic force

unanimously by all to Congress for

enactment into law.

incurred and the proceeds are consumed, if carried too far,
of danger is introduced that is apt to react upon
both the borrowing and lending countries,
It is on this account that any scheme such as, for in-

an element

peoples.

banking, depends upon a recognition

property on the part of those who

would borrow, and

upon such others as the borrowers may themselves have to
depend.
cover their cost.
During the war we increased our capacity
R the bankers in the United States refuse to loan to
to produce in many lines for which we have no sufficient
those who would destroy capitalism through repudiation or
output at present.
Government regulation made necessary confiscation, or who are subject to others who would do
during the war has disturbed all the natural currents of so» tt is not a threat to endeavor to force belief in capitalthe world's trade,
and destruction in the battle-scarred ism, but merely recognition of the fact that banking cannot
countries has reduced production in them, and at the same
be carried on with those who do not accept their obligations
time increased their requirements.
These conditions are to the bankers with the full intention to pay, even as the
represented in the rates of foreign exchange, which are
bankers themselves accept full responsibility for the re¬
and

pay,

countries

the

requirements can

our

not need enough from us

which do

barometers

commerce.

stabilize exchange

is just as futile to en¬

normal condition by trying to

deavor to restore trade to a
fix

in return to

rates as it

is to heat a house

by putting a candle under the bulb of a

turn

of deposits when taking
is

the

province

them.

of the banker

materials over a period of manufacture, and it is one of the
important and necessary links in the

thermometer.

to loan against raw

chain of production,

but if workmen take over a plant which does not belong
to them merely because they, have power of numbers to
the foreign exchanges.
While such inflation has had its do so> their very act renders them unfit to ask for credit
influence upon the exchanges, and will continue to do so,
to enable them to purchase raw material. They could not
yet another abnormal condition, which has so far shown
consistently ask for credit in any event, as their promise
too little improvement, has had much to do with the exto Pay could only be given in direct opposition to their
change rates, and has played its part in further increasing
professed principles. When men commit sabotage, and do
the inflation which existed at the time of the armistice.
not £ive a ful1 day's work in return for their wages, they
This condition is the absolute .need in certain European
also endanger the credit standing of the concerns for
Theorists

currencies

have

stated

countries for

that

inflation

the

European

cause

of the depreciation of

greater import for

consumption than they

has been

sole

the

which they work to the full extent of such operations,

The rebuilding of destroyed Europe would have presented no difficult problem whatsoever if all men were
ated to necessity.
Such price changes in commodities as honest, but when to the natural frailty of humanity is
may be caused by inflation, therefore, do not cover the
added the tremendous destruction of moral force, which
whole problem.
.
.has affected every country in the world, the problem has
The ideal way to correct this situation would be to have
been made too difficult to solve, except over a long period,
the populations in every European country import only
during which millions of unfortunate people have to suffer,
necessities, and endeavor through their own production to
Integrity in production would not only have made the exreduce the quantity of such necessities to a minimum, and
tension of credit a simple matter, but it would have reat the same time increase their exports.
While this would suited in an increased production which would have brought
have

ability

Under such

have a

produce

for

export

in equivalent

value.

condition all questions of price are subordin-

tendency to temporarily slow up the world's trade,

yet when it had once recovered it would be in a far healthier
condition, and many nations would not be paying tribute
to

other

countries

burdensome extent.

the

form

of annual

interest

the necessity for credit within

such limits that it could

easily have been met from the savings of the people. The
currency inflation which has gone on in Europe since
the armistice need not have occurred, and the budgets of
the nations could have balanced instead of showing deficits.

BANKING
So

great

moment

that

minute, if

the

would

power

the

fight against it for

one

our

overwhelmed.

not

underworld force at

the

relax

cannot

not

struggle between capital and labor, as the agitator would
have

labpr believe.

and

capital

hand, and those who would make

one

slaves of the people on the other.

through false promises,

Russian

the

and capital must get together to fight this

Labor

thing, for neither

survive without going through a period of earthly hell,

can

even

has

Russia,

integrity of

unless

and

destroys the will to confiscate.

and

labor

purpose

The

union of capital

tion, transportation and commerce, would
the power of those who cry

oppose all war that the
tions

instead

for civil

while pretending to

war

world would leap

being

precipitated

forward

backward

genera-

for

cen-

On the other side of the picture we have the
oustanding

integrity of the two great nations who only last week, at
sacrifice to themselves,

great

repaid the

American people

their great

peril.

It is

object lesson for the world

that is certain to react to the benefit of all
added prestige which this act
two

great

has

countries among

time

when

their

The

will give the peoples of these

all

the

other nations,

world

repudiation, is certain to have
international intercourse.

mankind.

full

coming

thoughts of

steadying influence

nations have been weak

any

thought concerning the question

of meeting their

foreign obligations when they mature, the payment of the
Anglo-French loan is
it

that

see

their

it,

will

and

markets of the
She

has

the

inherent

way

as a

the

Great

do ourselves,

ideals and

but

be,

may

greatest customer,

our

people.

are

even

government, acting

both have

that

terms

the

common

sense

which

money

the fight

man

to man.

trustee for her citi-

France

uncertain

loaned

Russian

Russian railroads and the Russian Government

help in the upbuilding of that country must be returned,

and that it intends to protect its people, and the
of

the

integrity of

We in America

the

staunch

and

can

much

to these two

protection which

their

nationals,

learn much from them.

Belgium

there has

been

develop.

another

evidence

industry which

opportunity to

the

turn

current from sabotage to sanity.

Italy at the moment
labor
its

complication,
solution,

proper

but
as

the

unfortunate

look forward hopefully to

can

its national

life

the

has

past

the

high standard

terrible

menaced,
seems

The

forces

and that

for

Europe, except Spain, have main-

of industrial integrity, in view of
evil

with

their peoples

which

are

all

they

have

been

nationally honest

beyond question.
outcome

harder to
Russia

Spanish

the

down

work

increase

her

serve

difficulties

Spain

determine, although when the backing of Soviet

has

the

indemnity fixed, that nation
fear that successful

without

time the payments

same

rest

the world

been

taken

from

those

institutions, the situation

who

may

would

destroy

look different.

fairly ask

may

without

be extended

then

can

countries of the

the

Germany

Such help as

to grow

that she must make

the conditions in

better

Allies.

get

can

operation may

and her burden will begin

liability,

the

European
from

German

the

less.

fear.

With

work

can

given

many

who

men

are

drawing funds from governments for unnecessary

present

also

from

production

The

purposes.

will

of the devastated districts pro¬

reconstruction

the

ductive

mills

reconstructed

the

relieve the pressure of want to a large

help to

degree.
With

these

three

solved,

problems

all

the

wars

now

going on in Europe, and the tremendous tax that is being
put

The

people for

the

upon

loss of the

have

ments

possible to uphold the American work-

fallacious argu-

successfully withstood the
false

the

including the

purposes,

States at the moment lies

great part of the United

who

men

military

of the time of men, would pass.

use

in using every force

agitator,

and help them

educate

must

also

further

trade

all

with

the

for-

the

na-

foreigns workers in our midst who have not been
of

tions of the world in every safe and judicious manner that

to us.

opens up

Many
new

bankers

the

foreign

country

our

been given

have

part in

under which they are able to take a

powers,

our

Their

trade.

but the attention of every

most desirable,

co-operation is

banker in the country is called to

the necessity of using these new powers for foreign trade

of Credit when

falling prices
whom

would not bring criticism

It must be realized that irrevocable Letters

ourselves.

upon

once

issued cannot be broken, regardless of

difficulties which

the letters have been

may

coiYie to those for

issued, except in special cases

where there is positive breach of the contract of the Letter
of Credit itself.

Refusal of drafts drawn against Letters of

Credit

technicalities, in order to

mere

deals, should

never

Commercial

which

issued should be

Letters

Credit

can

safely be

well known to those carrying

With

contracts.

get out of bad

The terms and conditions

be allowed.

operations that irrevocable credits

such

issued against

are never

prices of many commodities falling

they have been recently, and are certain to do in the

future, this is particularly important,
In

some

foreign countries it has unfortunately been the

certain

classes of

and

exporters

importers to

pudiate contracts when prices have gone against them.
the

case

prices

filled

of exports shipments have

were

rising

within

time

contracts

which

not

limits in

have

expired

order

allow

falling

are

have

made when

been

and when prices

re-

been

un-

filled

and manipulation of documents undertaken with the intent
to bring

mercial
for

industrial

increase,

will

jto balance, and ultimately taxation can be reduced,

with

Letters of Credit to lapse,

The neutral nations of

production

destroyed

be made

habit

is in the midst of
we

see

spelled industry.

'tained

Bolshevism

expansion will decrease, governmental budgets can

loose

return

German indemnity to

the

currency

under

great nations for

they afford

has impressed all those who have had an

principle

obligation, at all costs.

owe

intelligently and honorably if

is the world's leader in

is making known to Bolshevik Russia in

industries,

of integrity, and the world

sense

against the annihilation of the obligations of

zens,

prone

Bolshevism in

annihilation of

the fixation

Allies, and the reconstruction of devastated districts.

with

tunate.

in the

pull together.

France at the moment

Her

their

meeting

Britain for doing the things that

high national

be better if

under

freed from the Russian menace

once

three—The

are

country,

every

trader in all lands, because of

honesty of her

nation to criticize

will

that

greatest competitor

our

world, but she is also

her

won

they

value

the

see

To-day Great Britain

would

effort

any

Even the Russian people when

so.

foreign obligations, great

making

into their own, as they surely will in time, will

come

benefit

Europe

to strengthen them, and they will

sure

worth

in order to do

necessary

they

Germany and Austria and

needs of the hour for the complete restoration

The great

all

it as a

come

followed,

were

worthy nations may develop,

some

$500,000,000 which had been advanced to them in the time
of

circumstances, and

Will

furies.

that disaster would

see

such program

any

The new countries between

quickly break

Russia have conducted themselves wonderfully well

conquers

fight for honesty and fairness in produc-

nation

propagandists

hope to obtain the autocratic power of their desires.

real pur-

seemingly serving a

example is

beginning to

are

the

By stealing the wealth of the world, and using it to bind
labor

Russian

in Germany, in that more and more of its population

pose

Instead it is a struggle between labor

the

The

117

SECTION.

the shipments inside of agreements.
Letters

imports,

exporter

the

cannot

Credit

are

between

contract
properly

issued

When Corn-

American

the importer

brought

bank for the purpose of revoking

by the

banks

and

confirmed credit which

has been exercised in exact accordace with its terms.
case

breach

of contract

the

American

importer

may

have

cause

BANKERS'

118

if its terms have been fulfilled.

credit cannot be violated

central

America

the Far

and

have

bankers

British

This is really a more serious matter

credit contracts.

depend

cannot

they

by them, it will not only

will

them

cause

refused, but

all dollar ac¬

discriminate against

which would be a most serious setback to the

ceptances,

settle

with

and

their

when

just

balance in credits in large amounts.

South

America

where

current

the

Orient that

reach a

with

position

with

Europe

nearly offset each other, as it is to our money

for

and

trade

for our

therefore,

important,

time we are exporting

at the same

and

of this situation, but

while high prices exhaust our

impossible to prevent

Europe against a

It is, how¬

Exporters and importers have been some¬

peak.

banking capital
to

East

requirements are almost

reserve

our

what concerned about the development

Far

credits necessitates gold shipments,

European

time

the

having debit

because

erations

and

difficult for us to finance such op¬
balances which we cannot

becoming very

ever,

America

strengthened since the war.

been greatly

have

South

with

relations

market,

they

whole

relationship demands

world

together.

Our

uncertain terms

apt to be frightened by the vastness of the

are

ures

of the

fig¬

in high

bankruptcy of nations is often heard

While there is no question as to the seriousness of

places.

must not be forgotten that there is a

the situation, yet it

the

relationship between

create on

power

world

has

the

progressed

power

part of human

and the

destroy

As the

beings.

ability of man to

the

present

is only a matter of a few years

On the other hand, many of

for

available

until

use

the

produce has

reproduce the munitions and

Again, it is not necessary to

indebtedness created

the

stead

itself

further

The

debtedness
of prices;

would

was

seem,

world,

consequently if no destruction of human life had

of the moral forces of the

best and healthiest minds of the

indebtedness of

whole

all

misguided indi¬

forever, and great numbers of

gone

stir up civil wars, the real menace

viduals endeavoring to

future

would

seem

culty of the restoration of
it

that

count

about the future.

would need have little concern

for the

governmental in¬

incurred during a time of a high average

But with millions of the
world

therefore, is not of such
though

even

place, and no destruction

taken

immediately lends

construction.

material loss to the world,

moment

be paid off from the

which

production,

useful

proceeds

seems

to lie principally in

essential

that

the

the diffi¬

It is on this ac¬

moral force.

of our

give more

attention to this phase of the matter.

Upon our success in re-establishing

integrity of purpose

financial relationship between the nations,
an

ideals.

exercise of the full
co-operate

must

proper

without which

To accomplish this will

orderly world is inconceivable.

require the

power

of our national

with the strong to

help the

;

weak.

Our intercourse with other peoples must be based on

Our minds must

and goodwill.

ness

jealousies and

with that hope which

filled

It is unbelievable.

crisis?

stand firmly

conquers

will make, but if

against the forces for evil which

destroy our

tice, and in fulfilling contracts which had been undertaken,

helping

stricken

has

morale.

would

toward

institutions, our example will go far

four years

pay

for

during the

of the war and in payment for the time of the

If it had not been for the ability of the

engaged in it.

men

production accomplished

people to produce at

high

speed, it would have been im¬

possible for such indebtedness to have been created.
the increased indebtedness of nations since the

Service

war

started

the

My respect for the

lend

Europe to

recover

bring order out of the present chaos, we need have no
of the

vast indebtedness and

tion which exist today.
bined energy

of purpose

their

determination to

fear

the extended currency infla¬

They will disappear before the com¬

of the world, if it is exercised with integrity

like mists before the wind.

Organizations—Their Relation to the Government and the Public

banker is most profound.

only individual who has the courage to borrow

greater

nations of

With all peoples united in their

By Joseph II. Defrees, President United States Chamber

and

de¬

and Lincoln fail in such a

Mistakes

nations taking part in the war up to the time of the armis¬

gone

fair¬

be free from petty

The opportunity of all history has opened before us.

Can the country of Washington

proportion to it.

the

tremendous sums, but in¬
can

has been in

Eliminating the question of waste which follows all gov¬

its

run

ability of the world to

produce from now on.

spair.

operations,

nearly

had

war

and they will all add to the

increased, and in each period of war the power to destroy

ernmental

during the war were

and methods invented

the machines

course,

four years to

of commodities that were cre¬

period.

ated during the war

is, of

with the war

removed it would take more than

produce the same quantity

not

There

produce.

powers

question but that in time of peace

the devas¬

The rebuilding

life.

depends our ability to help in the restoration

governmental indebtedness today, and

which represent

talk

real

bound

production be resumed in every country.

that orderly
We

closely

of necessity

are

balances

invisible

and

trade

with

engines of war which cost such

growth of American banking.
Our

devastated regions

most

pressure

prevent them from buying drafts

banks where acceptance has been

drawn upon

of the

than

find that
bankers accepting

Commercial Letters of Credit issued

under

drawn

drafts

American

upon

regions and the loss of human

course,

generally understood, for if foreign bankers

of property

destruction

the

their

repudiated

never

East

to the

market of the world has been due

money

that

fact

South

with

relations

Our

added

must

tated

confirmed

exporter, but a banker's

against the

action

(

time.

His

than that of

moral

other

any

responsibility
business

man.

He is the
on

demand

probably

He repre-

opinion," or

of Commerce.

"stimulating public opinion," are

abuse, not the use.

looked at

That is because of the

somewhat askance by the public.

Real education of the public on lines

of the commercial or civic interests of bodies of the whole

sents, and practically regulates, the circulation of the very

people is essential to the welfare of the Republic.

life

public opinion is the guide upon which patriotic legislators

blood

upon

the

commerce

and

industry of the

which the prosperity of all depends.

country,

He is the father-

confessor, the adviser and the stanch supporter of his clienWithout his vision,

tele.

of many

wisdom, and courage, the efforts

would fail.

civic

movements

He is

leader of thought and

liis community.

purpose

cfcive

and

talk to

you

procedure.

upon

common

.Service organizations, as I con-

problems for purposes of education and
a

sound jmblic

opinion.

in the definition I have stated.

the for-

"Manufacturing public

Many had no purpose ex-

cept confidential arrangements having direct

operation

the

individual

stituents.

service organizations—their

them, are associations of citizens dealing with their

'nation of

In the earlier days of our history, few

organizations, especially of business men, could be included

the

Service Organizations.
want

desire to depend.

A sound

business

application to
their con-

Their Kinds.
The kinds of organizations are almost innumerable,

run-

ning from the debating society of the country school and,
most

important, the local Chambers of Commerce," to the

great State and National

commercial and civic association?

BANKING
Indeed,

the

last

expression

organization in

the

this last June of the International

which

fostered by

was

United States.

Paris

the Chamber

of Commerce of the

It is destined, I believe,

to be not only of

potent factor in establishing better relations between

nations and
In the

force for peace.

beginning, and for

organizations of business

devoted exclusively and

were

men

interest.

to note that

But, gentlemen, I ask

It has

really influential.

are

recognized that

great

about in the methods of such of these

come

ganizations

you

particular business

of the problems of

many

or-

come

business organi-

zation have sympathetic relation to those of the community
and must

interest.

dealt with

duty

to say

that every

rating as

Dependence Upon
....

...

such organizations
.

citizen should be in

Opinion

Public

proor

•

If
.

;

...

Our civilization and
,

■

society and government is to function as contem-

a
,,

...

plated, there must be
„

government is founded upon regulation by public opin-

brings understanding.

upon

sound public opinion.

sound, it must be based

■

If it is to be
,,

...

study and education

which

and the dissemination

Such study

of information for educational purposes should be a major
element in the effort

ing such subjects

of all
are

service organizations concern-

reasonably related to their basic

Advantages

will

which

have

Those Who Do So.

which

organizations

functions and
and

are

this conception of

have

their

increasingly profound influence upon

given such attention.

Gen-

tlemen, the day is disappearing for the autocratic organizawith

though it
its

high-sounding and comprehensive title, which,

may

have

considerable membership, represents

operations only the arbitrary judgment of the few

who at the time may have

men

American—that

association

The way is open for the

American

who

individually

and

authority

enlightened Government.
want information,

public

the

The true relation of the service

direction.

and

puts country before personal interests and de-

sires above all things a sound and
Those

The day of the

its control.

"put over" organization is gone.
true

not

organization to

Government, National, State and local, is informative, not

No organization should arbitrarily demand

authorit^tive.
the

adoption

of its program.

In legislative

ultimate responsibility is with the legislator.
from

matters,

the

I have found

considerable experience that he is very keen

to re-

ceive, and give careful consideration to, the representations

agencies which are based upon study and have

of informd
the support

informed constituency.

Unhappily, at times there has been considerable basis for
the

belief that

the

threatening and dictatorial attitude of

growing consciousness

the

have jllst

The inter-dependence of the two propositions
stated

in the comfort and

becomes apparent when
basis of living

of all of

the difference

citizens, of

our

whatever vocation, in the present day is compared with that
0f

generations

even so

of many of

memory

lately in the past as to be within the
and when it is recognized, as it

us,

must

be> that without the wonderful

ture,

commerce

and

finance

progress

of manufac-

improvement would not

the

baVe been possibie>

Co-operation.

Frequently organizations have common problems, or, perjlapg

accurately speaking, problems in which each has

greater

lesser interest.

provide for

was

to meet

jus't

such situa-

voice that the American

common

Co-operation between

of the United States were formed.
.■

such national organizations to the extent, and in the man-

ner

in
.t

..®

which it
Ti_

may

be practical
A

'
■
is beyond question ad.

It may be that upon occasion of high moment

visable.

„

444.

pooling of interest and action through a central or joint
*
®
•
*
committee would be desirable, but ordinarily this is not so,
.

because u'* "ff^ntly not practicable for the several
sectl" T* J0'nt commit'ee to ba™ 'he authory 0
carry wlth Tthem he ^ganization which they respectively
present. i„ such instances it would seem that more sat-

resentment of the legislator, and
it is increasingly smaller.
to be

committee and

makes its own

study.

These com-

freedom and co-operate in action to the fullest extent the circumstances may permit. My own experience justifies this
view.
1 want to cite a marked example of this which occurred
*n connection with the hearings of the Committees on Military Affairs of the Senate and the House concerning the
bill to legalize certain classes of war contracts which were
held to be invalid on account of an informal and a technlcally insufficient method of execution. You will remember
that the face of these contracts aggregated approximately
$2,000,000,000 and involved nearly 7,000 concerns all over
the country, many of which had their entire working capital
tied up and at risk. There was an intense public interest
an(l committees of various organizations, with various projects .for relief, came to Washington to appear at these
hearings—among others, the War Service Executive Com-

niittee of the Chamber of Commerce of the United States, of
which, at the time, I was chairman. Immediately after the
first hearing in December, 1918, all the committees of the
organizations which had appeared held a joint meeting in

which substantially co-operative action before the Congressional Committees was agreed upon. There were I several
bills and various projects before the committees, intended
to remedy the situation. The method employed by the assodated committees of the business interests in the hearings
thereafter was to be informative and helpful. It was recognized and distinctly stated by them at the outset that the

t'he number who yield to

responsibility for conclusions was in the Congress; that

Such attitude, however,

influence.

own

always meets with the

Ue organizations in legislative matters has had an undue

come

mittees, however, should exchange views with the greatest

truly representative, are entitled

all measures to which they have

tion

interest of the nation, it can scarcely be for the good

0f the public.

its

inevitably result

part of the public that, if a measure is opposed to the busi-

isfactory results are attained when each organization has

purposes.

The

wiu

the public,

Action upon this basis

Bankers* Association and later the Chamber of Commerce

Why.

and

'
..
.
,
,
,
not only must but should depend
...

ion.

Public Identical.

the

it iS not for the good of business.

tions and

for their support upon public opinion.
our

and

zations that, if a project is not for the good of

No^greater truth can be stated than

man s

public effort, or in both.

Business

normally related to his vocation and

are

citizen.

as a

portion to his services to the public, whether in private

All

Every good citizen should support such of these

organizations
to his

by the organization in the public

119

Let it be understood by all commercial and trade organi-

ness

I have said, the

many years, as

unfortunately sometimes selfishly, to
change has

Good

Chamber of Commerce,

great benefit in international trade and trade customs, but
also

SECTION.

It is vicious in principle.

It has

recognized that such threats have little effect at

the interests of the public and business in the premises were

identical.

While there was some suspicion and lack of sym-

publicity, more votes will be

pathy in the beginning on the part of some of the members

changed in opposition to the man who yields to threats than

of the Congressional Committees, it immediately disappeared, and the hearings thereafter were marked by a common effort to reach the best result,

eleetion

time.

With

will be changed in

proper

his favor by his cowardly action.

The measure of success of a

nance

The resulting legislation which was approved in the spring

distinctly its own program, it rather is in that

of 1919 provided ample machinery, with broad powers, to

for which it

has been able to secure proper and adequate

consideration, with
of the
the

service organization is not in

point to as having been "put across" by domi-

what it can

resulting conviction upon the merits

proposition of those who have the duty to represent

whole

public, and not merely the comparatively small

fraction which may urge the action.

do justice in all circumstances.

I regard these hearings as

the most gratifying illustrations I have observed of the use-

fulness of the type of organization that I am
portray.

attempting to

I am informed that on June 30 of thfs year, or

.'practically only 12 months after the passage of

the bill, 90%

informal

these

CONVENTION.

BANKERS'

120
war

contracts had

been

settled

ad-

nize in the mood of helpfulness

justed.

future

Committee.

Executive

Service

Wajr

of the United

Chamber of Commerce

the

of the greatest examples

interests

of business

Your

Executive Committee

I have mentioned the Wat Service
of

interest is

the light of the public

service committees of

industries in relation to the Council of National

the various

Defense, the War Industries Board and other war

Over 400 of these war service commit¬

of the Government.

with

functioned

and

States

acting

accommodation

The spirit of

connecting medium.

the

and of

the industries represented,

by the war service committees

and by the agencies representing the

Government is a shin¬

ing and unprcedented example of what men may
by meeting face to face and considering frankly

accomplish
and sympa¬

inter¬

thetically problems as to which It could be said their
ests are in conflict.

business

can

regard the growing ability of Ameri¬

of all sorts—bankers, railroad men, manu¬

men

facturers, merchants and farmers, to

organize and frater¬

outstanding example of this capacity to organ¬

Another

is found in the remarkable

action in the public interest,

growth in size and public stand¬

ing of the Chamber of Commerce

federation

of the United States. This
Its purpose

launched but eight years ago.

was

study

To serve American business in the

broadly stated is:

and solution of its national

problems in the light of the pub¬

lic interest.

in that short time into a federation

It has grown

organizations with

individuals.

I wish you to indulge me in a reference

In conclusion,

that if the vision is

reality

come

to my subject except

having no direct relation

matter

of 1,400

underlying membership of approxi¬

mately 700,000 firms and

view of all the interests involved both by

generous

great and influential organization is a brilliant

own

ize, and the effect of unselfish

Government, the

the

Service Executive Committee of the Chamber

War
as

of the

organized by the Chamber of Commerce

were

United

agencies

and

value of which may be without limit

troubles, the

example of which you are fully aware.

One

States.

of the value of concentrated action

contained in the operations of the war

tees

and in sympathy with the

public interest, as providing a solvent for our present

sound and practicable, it can only be¬

through the leadership and action of

such

In these
days of unrest and readjustment, it behooves every man to
give much thought as to how he should conduct himself for
addressing.

great badies as this that I am now

his

which he

and the common good in the affairs with

own

be connected.

may

Banker's Relation to the Public
The
By Fijed W. Ellsworth, Vice-President

is the permanent obliga¬

One of the great big jobs which

tion of the banker is to tell the story of his
its functions to the

Ilibernia Bank and Trust Company, New Orleans.

institution and

people of his community, most of whom,

including a large percentage of his own customers, are un¬
familiar

The

.-V

intimately what those various

banker knows

and he knows what

are,

take

those

who

know

about

advantage

decided help they

of them.

facili¬

banker's duty

community.
"Here is
had

for

one

who has had

man

years,

of the

for the general good

altruistic standpoint

but he knows nothing about the safe

deposit vault, where he can keep his valuable papers safe

He probably knows nothing

from fire, flood and burglary.

the various facilities available

about

whereby he

ment.

collection

can

rents,

in the Trust

appoint the bank as his agent for the
of

payment

insurance

premiums,

the

his stock.

probably knows nothing about the bank's ability and

ing, and acting as executor for the benefit of his estate—
and

acting intelligently, honestly, and continuously, because

of its experience and its well-founded and

well-guarded rep¬

utation for fair dealing.

Probably this

man

checking account is not aware

Investment Department,

competent advice is at his disposal, and where he
cure

the

same

securities

whose
can

se¬

intelligent discrimination in the purchase of

employed by the bank itself in the

invest¬

ment of its own funds.

No doubt
the bank's

credit

can

use

the facilities of

Credit Department for the purpose

of insuring

salesjto undeserving creditors—or, on the

hand, enabling him to make larger sales where the

all, it is to be regretted that

customers

are

familiar

with

all

few of

the

various

silly and unnecessary

millions of

dollars are

Hundreds

"invested"

gilt-edged "get-rich-quick" securities that have no secur-

ity.It occurs to me that perhaps the serious shortage ol
paper

loudly proclaimed in the 60-page editions of our Sun¬

suckers"

day papers could be quickly overcome if the "easy
who

own

into

these pretty

some

course

pieces of paper would but turn them

good paper mill at their value as old paper, which
is quite as much as they are worth.

Above all, according to a

recent statement by a Federal

official, the people of the United States are

carrying around in their pockets, or hiding at home $3,000,000,000 of American currency, or nearly one-half of the to¬
tal supply.

This

means

that for every family in the coun¬

try there is an average of $100, a large proportion of which
should be

the

banks, where it could accomplish for the
more

than it can resting in

dismantled sugar-bowl, or in trousers pockets.

of fact, right now $3,000,000,000

ter

mat¬

of American currency,

basis for credit, would enable the banks

very

to take care

large proportion of necessary business which is

suffering for the lack of adequate financing.is

class of business men so familiar with

the economic necessity of

keeping

money

at work as are the

bankers, and therefore, it is upon their shoulders that there
rests

the

money

responsibility of diverting

this

vast

volume

into the proper channels of trade.

all of this
and

service

increase

designed

individual

It is

practi¬

and

reduce individual

fast

comfort

and

happiness.

Many banks already realize their duty in this respect, and

Legitimate

bank's

forms

service which they can obtain from their bank, for

cally

We cer¬

millions on

information justifies it.

After

worry

spend more for necessities than we should.

There perhaps

he is unaware that he

himself against
other

business community infinitely

with the

that his bank maintains

Our brain workers are

bit behind them in either respect.

Reserve Bank

willingness to take care of his will, holding it in safe-keep¬

paid of any in the world

they are the best spenders.

tainly squander untold

dividends

collection of coupon interest on his bonds, and of
on

Depart¬

They have held this rather unen¬

Our hand laborers are the best

—and
not

reputation for lo, these many years.

viable

luxuries.

checking account, and has

directed.

people have a well-confirmed reputation as

free and easy spenders.

standpoint, for the purpose of profit, but it is also his duty
an

this duty, and those are the ones to

Thrift.
The American

It is his duty, not only from a selfish

correct this situation.

from

performing

these remarks are particularly

whom

;

are

thereby helping themselves and

But there are thousands of banks that

community.

not

are

The public does not

it is the

Obviously,

them.

their

of the facilities which his institution

with many

offers.

ties

telling this story, and

are

the

that
as

Competition

Advertising

perfectly natural that people should spend

money—

they should spend money almost, if not quite, as

they earn

world

if—for every ingenious

salesmanship

means

and advertising

ployed for the express purpose of separating the

known to
being
man

em¬

from

BANKING
his

money.

person are

the

Salesmanship

and

paper,

salesmanship in

combining with ever-increasing cleverness against

with

man

the

dollar, with the result that he who

can

resist all of these appeals is entitled to
congratulations.

One

The magazines devote from

much space to

The

artistic

side and

advertising

"poster" and

two to five times

bulletin"

the

And the

public relations of his institution.

road¬

association, in practically

Mr.

program of our

Association,

trade his doll

for

sduth

some¬

east

and

banks

way

something.

in this

not offer one word

tising is
to

I would

of adverse criticism, for modern adver¬

that

sensible to advertise for
to

save

such

invest,

the purpose of persauding

otherwise

their

conserve

people

means?

plan is logical, how shall it be undertaken and by

whom?

The best

answer

this

question rests in certain

the

turn

the

for

members

to just what the live, pro¬

country are

actually accomplishing
continuous

advertising.

of the ideas contained

use

portfolio, and naturally this practice is raising the

advertising, and will increase the results

be obtained from

can

intelligent bank publicity.

Public Relations Committee.

Probably

sensible to advertise in order to

persuade folks to spend, is it not just as logical and just

invited to make

standard of bank

develop the larger and better things of life.
But if it is logical and

are

of the great business forces which is helping

one

distributed

intelligent, consistent,

The members

portfolio of selected advertisements

informing them

gressive

west, he is confronted by numberless opportunities to buy

And most of this advertising is to be commended.

of various kinds, gathered from
among the members of the

the purpose of

goes, north or

and agricultural

One of the several activities of the Financial
Advertisers'

when he lifts his eyes discovers

one

and industrial,

community.

Association consists of

in the street car, and in the bus,

Wherever

important community

every

Average Man with the essential part that the banker

man

thing better.

work

producing definite results in acquainting

plays in the commercial,

and in the suburban train,

countless ways in which he can

The

that this Association is doing, both
by individual effort and

they do to pure reading matter.

"painted

the dead wall urge the man with the dollar to

get rid of it.

publicity

121

in this country, is

picks up the newspaper, and finds that the major
portion of its contents is given .over to invitations to spend
money.

SECTION.

American

the

most

significant

Banker^' Association

lines of intelligent,

recent

action

Committee

Public Relations.

the

along

years

continuous, educational publicity,

the authorization of

committee has

concrete

the
was

This

big purpose and with proper support and

the undivided co-operation of the members of the
American

collective and co-operative movements already planned and

Bankers' Association,

concerning which I want to talk to

way

utes.

What
The

for just

you

few min¬

to the average man just how
necessary are the banker and
his

Banks Abe Doing Collectively.

the

it can produce tremendous results by
of popularizing the profession of banking, making known

activities

Savings Bank Section of the American Bankers' As¬

advertising thrift

among

advertised before.

our

people,

has been

never

The savings banks of the country realize

that in spite of the fact

ttiat millions

our

people have

business

helpful and advantageous
the

sociation is right now working on a comprehensive
plan for

the

individual,

the

and the nation.

are

firm,

worid,

and

how

the corporation,

William P.

genuinely

the functions of

the

bank

community

Sharer, Chairman of this Com¬

mittee, in his report to the Executive Council, at Pinehurst
last

sav¬

spring, said:

"After

spending

six

some

seven

ings accounts, the habit of thrift has not yet taken hold in

chairman in

America

months

since

appointment

convinced that great benefits to the

ps it should.

The Trust

(

tion

Company Section, through its Publicity Com¬

mittee, has arranged

nation-wide

advertising campaign,

designed to acquaint the general public with the various
forms

render.

service

which

Several

Trust

hundreds

Companies
the

trust

equipped

are

companies

lie

istence

expected

that this campaign

will prove

while, that the second and succeeding

ness a

permanent and ever-increasing campaign

years

will wit¬

partjcipated

trust companies

of America.

and

In various cities throughout the length and breadth of the
getting together and

are

advertising col¬

lectively, thus strengthening the appeal, co-ordinating the
increasing the amount of advertising, and actually

message,

decreasing the cost.
be termed

concrete illustration of what may

community advertising, let

the New Orleans banks

been

conducting

are

doing.

For

refer to what

some

time they have

New Orleans dailies, emphasizing those functions which
to all of the

common

banks—savings and trust business.

are

addition to these two subjects, "blue sky" investments have
also been
mittee

featured.

This advertising is handled

consisting of

This committee

discusses
"without

one

meets

advertising

representative

regularly
copy,

and

once

also

from

each

com¬

bank.

week at lunch and

incidentally handles

gloves" all applications for undesirable "compli¬

mentary" advertising that have

come

to the various banks

By means of this collective effort, the banks of New Or¬

are

able to tell their story to the New Orleans public

big way

course,

every

business day in the

year.

And this, of

is supplemented and strengthened by the individual

advertising of the several institutions.
That the banks of the country are

portance of keeping

sedateness

work.
our

general

economic

ex¬

and

individuals and also

which

they

functions

for

in the business distinction

class aspire.

publicity, however,

have

Proper

been

public

established

and

digni¬

relations

through pub¬
licity and other methods violates no decorum of business practice and the
acceptance of such methods by individual banks in the building up of their
bility to the
"There

tire

you

for

years.

enough of the
of

purposes

are

doing

increasing this medium of contact with the general public.

misunderstood

class

command

don't

people,

ever-increasing

every¬

to demonstrate to the association the desirability

power

our

work it would only

our

I want to state that

to enumerate.

of such work and of its adapta¬

success

greater American Bankers' Association.

other details and incidents of

many

thing within

it is

largely our
as
befits

prestige

own

the

are

fault.

profession

banking, or wield the influence we desire or that the necessity requires, that,
too, is our own fault.
.
..

"It

seems

entirely within

our

■

own

province to create both

these, not by an enlargement of our importance, or the value of

sound

banking practice, not by propaganda or attempts at moulding public opin¬
but simply by

ion,
of

such

bureau

a
as

statement of facts facilitated through the operation
is now constituted in the Public Relations Com-

mittee;"

The value

is provided

•

the Public Relations Committee—or as

which

in the proposed new constitution of the Asso¬

ciation, "The Public Relations Commission"-Hcan be to the

Association, to the banking profession, and to the general
public, naturally depends on the amount of financial
moral
one

support

that

it receives from

and
As

past

and therefore feel competent to expfess an opinion as

year,

its

Association.

with its operations during the

less intimate touch

the

of the members of this committee, I have been in more

possibilities.

committees in

tant

judgment,

the Association can

say

the

awakening to the im¬

give

Association.

This
a

Association

membership in

started
excess

member is intimately in touch with the

minimum appropriation of $250,000,

better account of itself on a bigger, broader and

constructive basis than most

functioned

that

Advertisers'

have

nancial

only four years ago, and now has

An, appropriation of

that in two or three years from now, if not sooner,

committee, with

could

in touch with the public is well evi¬

organization.

our

$25,000 would be little enough as a starter, and I am here

much

every

business

denced by the remarkable growth in recent years of the Fi¬

of 500, and

this

well afford to make this committee one of the most impor¬

during the week.

leans

components of

only least understood, but misunderstood, more, possibly,
other profession.
This is due, no doubt, to the inherent modesty

"Advertising

continuous advertising campaign in the

enlargement

the least understood

not

characteristic of bankers

land, the banks

encouragement and

one

business is evidence

worth

in almost unanimously by the progressive

genuinely

and

than any

fied

the banker is

the

country have subscribed to this advertising campaign, and

investigating the possibilities of public relations, I am firmly
banking profession and to the associa¬

money,"
I

read

you

that

of the committees that

during the life of the Association.

say?

one

Well, it was only
the

big gum

"Too

few days ago

manufacturers

who

spends annually several million dollars of advertising money
announces

half-million-dollar increase in his

advertising

lion dollars

feasible

that

20,000

contributing
to

it seems to me entirely

working collectively,

banks

each

and

of only $12.50 annually, could af¬

average

gum,

banking field,

Conservatism,

himself in

banker shut

the

his

vault-like office and condescended to do business with rela¬

tively few people.
called

This

succeeded by what can be

was

age

Conservative Age,

Plain

the

ments,

sionally emerged

from

actually

asso¬

Conservative."

This

mausoleum and

his

which

evidence.

cant

the various forward looking move¬

referred, are specific and signifi¬

have

This also is

for

The third age was the "Progressively

had little difficulty in .secur¬

advertising

collective

when their

proposed.

was

various communities, who formerly

Banks

fought each other,

in
are

working together for a common end.

now

seems

that

Bankers' Association,

American

the

big and powerful as it is. with its interesting history, and
its wonderful nation-wide

ciated with his exclusive customers.

of Collective Endeavor.

age

ing the co-operation of several hundred banks

plan

the banker occa¬

when

well be called the "Age of Constructive

can

Our Trust Company Section

had the age of Conserva¬

have

when

today

Publicity," of which all

spend $250,000 advertising their banks.

the

tive

advertising

year

I think

If one man can spend several mil¬

appropriation for 1921.

ford

CONVENTION.

BANKERS'

122

and hamlet in

organization covering

every

city

broad country, can well afford to put its

our

marked the beginning of the modern bank building and the

strength, and its virility, and its intelligence, and its money,

first

and its moral power, behind

of the

appearance

little

with

gate

the

flat-top

secret

and

lock,

the

inauguration of

the printed invitation to "come in and open an

Committee
the

Members

Under
annual

and

the

second,

the American

Constitution

the

report to

activities and in

its

The

membership.

The
of

the fiscal year the

Association,

the officers at the headquarters
of vice-presidents and
is responsible for this large increase.
It

together with

the co-operation

of course, that the membership of our Association steadily in¬

is essential,
crease,

its potential

Financial.

the Association

financial affairs

General
Our

of the

leaving

administration
vise the

This

varying size.

$414,215.79,

"budget system"

income

our

year

from the previous

it is a pleasure to ad¬

the development of a scientific

and

effective

Sections.

setting aside of an emergency
distributing moneys to Committees and

the Association—the

for

medium

■

;.v;.

;Vv

their

Administrative
administration

the mind of every
Bankers
tween

and

affairs

during the

active,

faithful

past year.

The

and
one

loyal

object

member of the Committee has been to serve the American

administer

been

has

the

the Association

affairs of

intervals be¬

Every member of the Committee deserves

banking community.

thanks

this

the Association,

Convention

and,

his unfailing

for

loyalty to the welfare of

President, I certify to their effective work and co¬

operation.

Secretary.

Committee

General

elected

Bowerman, of

the Association is

this executive—a

well-known

man

St.

Anthony, Idaho,

Journal

broad

accomplishment.

Council

vision,

of pleasing

The

which would

tail

personality, and of
head¬

and

the wisdom of having

prove

placed at

the head of the headquarters office a man who has the ability and
to

ness

willing¬

perform the very important duties which devolve upon that position.

The Sections of the

these

Association

Sections

various

the

Savings Bank, National Bank,
House, and
the
to

reports will be filed by the Presidents of

Association,

including the

State Bank,

State Secretaries

Trust

accomplished by the
service

which

will

can

to their

responsibility in

every

way.

intrusion to comment upon the various activities of these

Sections, but, suffice to
self

each and

say,

every one

of them has constituted it¬

strong factor in the affairs of the Association.

The American Institute of Banking

carrying

Constitution

the

department
most

able

be presented to

has

developed,

broadened its

valuable and efficient returns

scope

of service,

rendering the

to the members of the Association.

has func¬
the results of co-op¬

last Convention,

powers

and sufficient appropriation,

incoming year will prove a splendid

Constitution Committee.
was

appointed under authority of the

confirmed by the Council, after a thorough

the convention contains articles of a nature which will
of the Association, emphasize its im¬

the functions and operations

that

write

was

greater and
is

attention

will

Constitution and

receive your

Commerce and Marine.

chairmanship of

tary, Mr. W.

Mr. John H. McHugh,' assisted by the secre¬

F. Collins, the

the

complished
be

structure the

unanimous approval.

Committee
Under

By-Laws upon which

bigger Association can rest with safety.
Your particu¬
to the report of this Committee, with the hopes

directed

Committee on Commerce and Marine has ac¬

great work for the bankers of the country and no report would

acknowledgment of their services.
report to the Convention is asked.

complete without an

Special atten¬

a development of the McHugh plan for the
one-hundred-million-dollar foreign financing corporation,
have presented an economically sound plan, which in co-operation

By constant conferences and
organization

committees

from

the

Committee has also

This

and

United

The
the

States

Chamber

Commerce,

and

Trades Council, will be launched, and we trust successfully.

the Foreign

the contact

kept in touch with and handled the details in¬

between

our

Association and all matters of foreign

finance.'
The

Counsel Thomas B. Paton, this

of information which is

portance and effectiveness nationally, and democratize its operations.
The Committee's work has been with but one vision and thought, and

with

management of General

full

Committee

Legal Department.
Under

message

analysis and careful consideration of the present Constitution of our Asso¬
ciation.
Their work has been constructive and progressive.
The document

they

way.

necessity for a
It should be

activities.

its

Administrative Committee, and

continues to prosper and develop, be¬

bankers.

created by the

Committee,

New

the American

Association with

the

one

trade

pride to

The second: the advisability of discontinuing a
bulletin of information.
undoubtedly render a proper decision in this

among

cidental

source

magazine

bankers, the results of the bankers' service to the Nation,
and the activities of the Association.
This committee should become a com¬
eration

every

publication of a

splendidly, and is emphasizing to the country

tioned

The constructive work
being done by young men of the banks deserves the most favorable com¬
mendation.
Our loyal support and assistance should be given to them in
ing

the

Relations

tion to their

It would

were:

to the dignity of the Association—this would en¬

instructive.

and

Public

be had

divisions of the greater Association and

measure

will,

Clearing

unfaltering endeavor of the executive committees of these various bodies
render

favorable comment,

excites

valuable

Company,

and

its

serious

given encouragement and assistance.
The American Institute of Banking "Bulletin" is worthy of that Section.
It

lar

these, comprehensive and accurate knowledge

from

the work

improved

giving

hope, find accord with the membership as a whole.
"The Banker Fanner" continues to be a splendid medium, reaching the

future

Sections.
♦

considered

questions

measure

matter which

Bowerman,

been

Executive Council will

broaden

succeeding month will justify, we feel sure, the election of

Secretary

have

large expenditure.

Your

operation.
General

has

current year.

Committee

Administrative

magazine and issuing

quarters office gives evidence of his unfaltering loyalty and continuous co¬

Each

Association"

Bankers'

matter within the

reading
and

thoughtful consideration to the future of the publication of our Asso¬

and

The New

few months he has served in the

The

and

appearance

American

the

for

particularly fortunate in obtaining the services

It
is

appreciated by our rural members and to them is rendered the large

most

Secretary of the Association.

We feel
of

Guy

service rendered by other organizations.

to similar

which, if done, it is prophesied that the

Following the resignation of Colonel Fred E. Farnsworth, the Adminis¬
trative

thorough investigation, and justifies the feeling that

recognized that the work of the Protective Department is one which

mission
General

one

has measured

meetings of the Executive Council on a broad standard of service to

the whole
the

Committee

of the Association.

agricultural districts with its message and emphasizing the
close alliance between banking, industry and agriculture.

Administrative Committee.
The

impairment to the

ciation.

carry over

incoming administration it will not be burdened with a deficit.

Serious, consideration should be given to
fund

the

of $22,232.31.

it has been the custom to

deficit of

resources

prove

financial

Publicity.

will be covered in detail by

have been

year

will not

which

question of how good the service rendered by the Protective Depart¬

The

net balance

basis

drain upon the

Association

expenditures for the fiscal

For several years

Some method should be evolved by the Council to con¬
on

and

ment is has been

Secretary's report.

$436,448.10,

do not

sendee

other activities

is the
Unfortunately, the finances
permit continuing an unlimited contract for ren¬
membership.

of increased

dering protection.
this

which has swept over the country

department increased expense and activities, which

outgrowth

"The

The

this

caused

Department.

wave

percentage of service.

lie^ in the number of its members.

power

constantly increasing crime

The

splendid campaign inaugurated by

the

has

greatest. I

members of the Executive Council,

by Thomas B.

has received the favorable

juniors,

Protective

tinue

net increase of 2,473.

his

banking questions.

upon

/-oV-. ■■.•■"'■Hv

of this year, the membership of

membership is the largest in the history of the Association, and the

increase in

Paton, with the assis¬
commendation of many
prominent lawyers, and its sale was gratifying to the administration, as
well as being a source of profit.
As this department develops, it becomes
more
and more useful to the members, being recognized as an authority

natural

of August 31

22,087,

was

in American banking.

new era

Digest of Opinions compiled

The

steadily progressed during the past year, both in its

closing the books

Association

grand

part of the record without reading,

Membership.
In
our

the Association,

The

tance

detail.

matter of

the affairs of

The latter report will be presented

is asked that it be made

largely

Guests:

required that the President shall make

Convention—first,

The Association has

Richard S. Hawes.

Bankers' Association and

of the Executive Council.

to you, and it
as

prehensive scale

account."

this Committee on Public Re¬

organizations, and thus begin on a com¬

lations ftnd kindred

Officers' Reports—Banking Section

and

Annual Address of Retiring President
To

of the

the removal

desk,

question

members,

maintenance,

of
its

have

Library.

the continuation of the Library,
inaccessibility
been

given

the

thoughtful

average

its lack of service to
banker, and the cost of

consideration.

BANKING
It has been
either

which will

SECTION.
Prices

decided, therefore, that the Library be discontinued, and that
sold,

combined with

available

financial Library

Wall

continued

all kinds

Street,

123
high until within recent months, when commodities of

began to fall in price, the market

Committee

textbooks,

labored

dull, transportation facili¬

was

unusual

schools

difficulties

question of

Association,

and

education

requires

and

patience

that

made

the

request the American Institute of
of

education

'■

The

part

V.:v

■

Association

discontinue

Banking to take

the

its

favorable

most

Special

.."'Or

;

■

efforts

and

Congress,

its

work,

results

for

the

evidenced

accomplished.

careful consideration to

the

out

six

recommendations

Committee
and

importance to

activities,

but

indeed

all

While

bankers.

report

any

did it

and

Fred Collins, and their

report

ing

this

Legislative
State

the work

performed

and

has

not

for

all

far

and

its

that

interesting

members

and

the American

grateful

The Committee

the

Gold

thus

officials

serve

was

Committee.

is made to

report which will be

constructive, and

the

with

Federal

Re¬

in guiding

iis through trou¬

Protective

assisted

Committees

blesome times.

Special
worked

industriously

will report their
Insurance

recognized

the

Journal

these

upon

and

subjects to

find

have

and

proper" solution,

findings.
service and its

new

our

being

which

Economic

further

will

this

work

0,/r'.

The

■

The

affairs

the

Association

the

Executive

it through.

carry

Executive

administration
ured

and

Your

entrusted

are

been attentive

have

during meetings, and in the interval between

meetings they have rendered valuable and efficient service by assisting the
Administration in carrying out various plans.
Your Council is, in fact,
"the Congress" of your Association.
It is the legislative body, and to it
should

senting,

charged

the

duties

of administration;

the other hand, the members

the

constructive,

than

the present

incidently

thoughtful

Council,

various

with

body

elected by

State

has been

closest

and

Bankers'

Convention

ever

Association

intimate

with

contact

gathered together

the

Association,

co-

the

Nation.

intrusion

their

Bankers'

States, and
has

been

the

encourage

Associations,
Association

our

attempted and

clear line between national and State activities maintained.
Hearty and
splendid co-operation of the State Bankers' Associations with the activities

the

yea'r.

State

Bankers'

American

With

Association

endeavor to

Association

Bankers'

their

upon

Bankers'

American

whole

has

Association,

has

been

and

sincere

evidenced

throughout the

and foster this contact, every

attended
a

representative

the

place given to those representatives

program.

It would indeed be ungrateful did not the
its
and

been

encourage

appreciation

evidence of

constant

the

co-operation

prices,

present Administration express
evidenced and the friendship

any

the

gold

standard

other country

tions,
have

economic

have

structure

and

system

the

sound

our

pre-war

elements

kept ourselves prepared for future

those

the only country of importance in

has been successfully maintained.

have retained

conserved

are

Better

than

banking and financial rela¬
our

demands.

never

safe¬

and

time

same

the

averse

The Liberty Bond
The people must

they

make.

can

reconstruc¬

necessary

the

apparent;

need

for dollars

;

all

the

agriculture.

but
pro¬

wealth

the

world,

70% of the primary wealth, it ^estimated, or¬
realize the great importance of encouragement

producing city

live

it has

and

today is the ever-increasing demand
It is estimated that the 1920

dweller.

40% of the population

been

that

stated

thirty-three of its principal

the

nation's

cities.

of this country will reach the large sum of
and that agriculture is the basis or foundation

crops

bankers and

$100

actually pro¬

are

one-fifth

business

should

men

know

that

less

than

spent by the Government last year was expended

for

development of agriculture.

Good

conditions,

ultimate

we can

Our great problem

foodstuff,

every

economic

the state of the primary

upon

The

credit, originates with the soil, the mines and the forests.

consider that

nation,

war-born

prosperity depends

$25,000,000,000 this year,
of

cents

the

from

recovery

Considering that the

roads

are essential to the progress of rural communities,
reducing
marketing, and increasing the comforts available for the farm.

The

Farm

velopment,

Loan

Banks

while

banking

have

gradual,

rendered

has

been

unusual

steady,

It is

the

this

age

banker's

source

duty

their de¬

need

lend counsel

gard the farm in its true importance to

farm

for

years.

citizen and financier to realize and

wealth;

our

service, and

supplying

financing which has been apparent for many

and assistance

encour¬

and

re¬

economic existence.

our

Foreign Trade.
The

tion

States

United

favorable
for

foreign

our

development

within

their

foreign

countries,

chasing

is the

trade

We
terms

ing

practice,

and

first

have
of

is secondary to
on

own

the

Accurate

our

for

our

all

which

foreign
a

the
can

desired in this
our

own

this

and

should

protected.

be by

Our

from

the pur¬

of foreign

problems

question
earth

of restor¬
have

which

ultimately

pay

for

country.

industry and business,

interesting the investing

future

foreign

trade

possi¬

potent factor in expanding foreign trade,

necessary

to enable it to

nations.

The

basis

marine

The

which

foreign

first
is

attract
a

markets,

successful

encouragement

es¬

privately
coun¬

ambitious young

permanent vocation

foreign

diplomatic and

competent,

and

equal terms with

towards the

step
the

cope on

establishment

will

trade sendee
of

our

nations

and

imports

increase

the financing

the saving American.

vessels.

foreign

knowledge

neverthelesi

outlet

of foreign trading.

program

consideration

with

merchant

our

and to

that

It has become clearly

properly

operated

service

into

ques¬

foreign

extending liberal credit without further inflating

structure,

shipping of other

selor

the

trade

means

legislation is
of

as, an

extensive

upon

exchange,

our

abroad,

goods required

merchant marine

and

domestic,

our

markets

dependent

surplus products,

our

largely with

tablishment
owned

men

beyond

securities

lie

remedial

also

hampering the requirements of

credit

foreign

stabilize

customers

big requisite of

purchases with

must findra

our

reciprocal
for

the

products.

refinancing Europe.

sound

foreign trade,
and

proper

is therefore the duty of bankers to stimulate the
our international commerce in every way
that lies
It must be remembered that the development of

passed

requirements
their

that

both
of

situation

is the necessity

commerce

markets

power

whole business

dependent

power.

these
other

increasing interest

our

development

our

increasingly

are

showing

because underlying

future

markets be found

bilities

while marked, have been less violent and less extreme than

experienced by other nations.
which

our

was

good-will which has been shown.

changes in

duty charged

is not

investment

safest

greater.

will show that only about

Our
year

Without

Conditions.

the

ducers

public

Throughout

rapid

growing production.

State

functions

stocks,

of the nation's basic industries, lies not only the hope

one

non-food

While

meetings.

Administration to

realizing that they render the service to their

them

menace

never

development.

sound
the

repre¬

Associations.

the endeavor of the present

most

pre¬

cease

encouraged with customers,

be saved to legitimate and vitally

future

cur

the

State

retain

represented

primarily

men

the members

Bankers'

worthless

against
be

must

to understand that the banker

census

and its full authority

masse,

guides the policies and destiny of the Association.
No

people

relations

given

iginates from the soil,
and

the

present Council has meas¬

responsibility with which it is charged.
It has met the
great problems of the day in an aggressive and broad-minded manner.
The
members

has

Every effort should be given to the encouragement of the building of good
in all sections of our country.

the

for

The

roads

meetings

Council.

which

largely evident, must

great field for the glib stock salesman.

The

the cost of

Council.

between

yet too

demand

is not nearly

through discouragement in the purchase of so-called wild-cat in¬

the basis

policy is

a just protection to the banks of this country.
Policy Committee was not appointed until late in the
charged with consideration of the all-important questions
of Federal
Taxation.
Its investigation will
undoubtedly bring forth re¬
sults, and it is hoped that a commission of the Association will be created

The

autumn, but

the

consumption.

and sound investment of his savings.

proper

population

Committee has rendered valuable

agriculture,

much

Committee

with

economical

given against reckless speculation, but at the

squandered

When

Conference

dire prophesies about the num¬

catch

dollar of capital available, is

every

Closer

should

capacity

Agriculture.

presented, and should receive careful consideration.
Deflation of Credits

educate the

encouraged

duction
a

that the supply

amply demonstrated during

It is

people.

acknowledgment

Bill rendered

Bonus

States and

de¬

war

channels

But the productive

Increased production

The

production.

was

be fulfilled.

to "Public and

the International Conference in Paris

and

advice

vestments.

this

decrease since

permanently strong position in world trade.

bankers.

making

This

production

concern

United

obtain

campaign

report,

the

tion work,

like,

which

marvelous.

for

cause

Millions yearly can

work

would

recommendations

to show that

seems

into certain restricted

normally uniform.

are

required

holder has been

the

customer

Commission."

Our Committee appointed to attend
file

based

analysis

unbalanced

productive forces

and it is safe to predict that the

the

his

while this

careful

been able to re-align these forces

goods
States

guard and render useful
to

create

the members of this Commission for their services.

The

atmosphere pre-

of foolish, extravagant and speculative consumption,

Committee hav¬

new

and

products will not

are

frank

years

vailed

generally.

this Committee be changed

name

orgy

greater factor is apparently necessary in our fu¬

the

mind,

the

endeavors

the future,

chairman

given

its

Thrift is

prosperity than increasing the thrift of

Private Thrift

Indeed

has been

diversion

United

much

Their endeavor to

conditions

public

the

should

attention

active

far-sighted idea

development

report will contain, for

will

demand

the

ber

Circumstances made

difficulty

the

have not yet

times.

betterment of

Americanization

progressed

recommended

real

certain

secretary.

has been

the

plans with

gradual

thoughtful
ture

are

somewhat above the 1914 level and shows indications

their

it is yet

and

is evidence,

activities

the

subject has been constant.
evidenced

Committee

laws

Committee

formulated

slow

improving.

of Five will present its report and the vigilance of its chair¬

members

amend

The

business

high level in 1916, and although there has been

date,

and

the Association's activities

commend

difficulties.

manded

impossible for them to carry out certain plans which they initiated.
and

apparent

that

disposition to complain about the reduced Unit,

some

chief

our

Our

Council Committee,

Their

mention

not

particularly

the bankers has been

State

there is

the war,

bankers,

chairman, Mr.

serve

conservative

operations with a

future

capita production of goods has since 1914 somewhat increased.

very

some

particularly effective in its
Esch-Curnmins Bill which finally

Committee and Council.

incomplete

body

man

probable

seems

that

important subject has received the consideration

utmost

their

enough of
•would

with

and

continues

avenue

reached

Association.

this

broad

optimism of its people,

the per

country and deserve

our

one

con¬

Committee was

whicH included five
No

Federal Legislative
is

development,

conditions.

bridge into

foundation,

country, the

physical production of goods, yet there is good reason to believe that this
is not as great as is commonly supposed, and certainly does not constitute

,.<!0000

members have been

and the individual

commendation

Transportation

passed

readjustment

•

this

future

Economy and Production.

v.;,

...

Commission has given

the Committee.
our

its

ques¬

While

'
"TV--.
V-.-;
Agricultural Commission.

Its chairman

The Currency

factories, and increasing labor

down of

efforts

the whole

important economic questions, and will present a report to the convention.
The

the

over

firm

operations.

its

stantly working to develop the primary wealth of
^

shutting

possibilities of

belief

these

passing

Agricultural Commission has rendered invaluable service to the citi¬

of America.

zens

the

marvelous

their

spite

there developed a surplus

demands,

commodities, and the cancellation of orders in other

some

caused

reduction

vailing.

Recommendation

tion

which

The

accomplish

merchandise in

and

■.:r.{;
and important to the

scope,

attention

surplus.

either financial books

Their work shows initiative

wide

one

constant

Incidental

lines,

results.

and

the

including problems and text matter that would increase the

progress.

The

the daily quotations were not the barometer of actual

under

understanding of banks and banking methods.
and

Education.

has

the placing in the curriculum of

encourage
or

Education

Association.

our

Committee

I
The

use

ties interrupted, and

sales.

for

language,

is important.

economic

and

social

conditions

those

who

prevailing

represent

The Commerce and
mittees

from

Foreign

the

Trade

foreign

official

Marine Committee,

United

Council,

has originated

Commerce,

plan

be owned

National

the

control

the

breaking

down

One

which

they

relation

has

wages,

could

the

the old

the

concerns

would

method of

continued

The

turns

hampering the

by the

turnover

effect

Sixty-

also

felt

the

Investors should be able to

rea¬

required

because

valued railroad

have

the

stabilizing railroad

will

been

have

railroad securities

for

adjustment

the

made

properties in

Com¬

groups

increase

substantial

in the

Inter-State

impossible to

railroad

increase

rates

Up to the

procedure in

commodities

the

far

different

of the Transportation Act rail¬

passage

speculative class and stabilized

may

received and

conditions

that just

service

proper

out

rendered

re¬

to the

nation.

establishment
the

meet

Service

The

the

enable the carriers to

that will make

pur¬

should

the

and

the

study

attractive in¬

general

Transportation

welfare.

The

Act

financial

its

and

directors,
The

The

railroads.

Naturally,

co-operation

can

responsibility

but charging them with full

of the Transportation Act

passage

arteries

must

commerce

was

kept

and

open

financial

the facilities of

trans¬

Federal
review

the

Federal

must

Reserve

passed

Reserve
details

admit

fundamental

which all

just

year

criticise

sound

the

whether

Board,

this

can

available.

made

System

that

System. /

and

operation,

the

Federal

principles and

would

its
or

activities.
in

agree

Reserve

System

com¬

Regardless

all

When

rulings of
has

the

proven

its

a service to the country for
bankers should realize and appre¬

contrast

credit of

the

experience of the

kind

every

ing and financial relationships,
which

been

has

billion

Ten

stantially
first

rendered

dollars

domestic

uses,

intact and

period,

war

with its

wit^what we have known

when commercial panic and industrial

peace,

recognize the

even

numerous

in times of

crises have overturned

bank¬

immensity of the service

credit

bank which

financing business and industry can count upon converting the paper
growing out of such transactions either into liquid reserve credits or into
circulating notes.
Uniformity of rates of interest has been established
the

and

country

regularly

organized

discount

market

en¬

couraged.

Steadily

the

process

pushing out

mercial paper is going on and
will

placed

shortly

intended,

war

and

paper

we may

substituting

expect that the

new

com¬

circula¬

live commercial paper or gold.
the regulating functions of the Federal
System were' not brought into play immediately upon the signing
the Armistice, but it is obvious that our war effort did not end in the

the
the

question has been

sense

the

After continuous

found

asked why

same

time

was

discontinued in

the

co-operation of the Federal Advisory Council, the Federal Reserve
Board, and the realization of the situation by the bankers of this country,
proper distribution of credit is being accomplished.
The

Federal

banks the

them

Reserve

Board

determination

wisely

of essential

frankly the object sought,

deavor

left

the

good

and non-essential

sense

the

local

loans, placing before

at the same time co-operating in

supply to the fullest extent needs of actual and legitimate busi¬

that

flation.

system.

Orderly

commercial

but

must

minimum

well

for

war

upon

paper,

its

framers.
so

accomplishments

Federal

Reserve

analysis the

and

of individual
banks

broad

ciples involved,

are

vision

obligations,

important and

gradually

put

substitution

desirable methods,

into

effect

with

the

the Federal Reserve System has,
measured up to the vision of its

results,

loyal

opinions

the Federal

support

of sendee rendered,

greater than

any

and must continue

rulings and

Reserve Board,

detail.

actions' of

because in

and the

discourages

should

taxation

its

attention, and at

from such

Commerce,

Association

Men's

not

savings,

particularly

immediate

given

the

Manufacturers'

and

others,

together

with

committee

one

Association,

in its consideration of the tax question.

Congress

date that

future

some

industrial organizations

will combine into

Association,

should

the subject

practiced

Government

the

to co-op¬

efficiency

and

has

thorough

inquiry,

In consider¬

prevail.

become, to all intents, the largest business

enterprise in the United States.

Under

political system, with its fre¬

our

changes in the personnel of public officers,

quent

ex¬

demand made

and

only carefully systema¬

tized

organization can prevent the most wasteful public expenditures.
The
need, therefore, is not simply a revision of taxes, but also a most careful

supervision of the expenditures of the proceeds of these taxes.

government has
efficient

competition

Our

the

system

carrying

coined

recently

been devised which

ever

than

the

industrial

life

Government,

other

all

governments,

large amount of credit financing during the
is

floating debt, and

obligations

time,

at the proper

Government

our

prove

initiative and

nation.

Government

slogan

and

less

One of the by-products

kinds of government bonds.
future prudence to refund

that

compelled

was

war.

great variety in the

It would seem, on the basis of past experience,

the

No system

the place and

private

business

"More

appealing:

take

can

wide field of

business."

there

be greater unity

may

obligations.
Industrial

The

has

war

left

that of industrial

public mind than

nating result

various

the

final

fundamental prin¬

Unrest.

by-products,

many

changing industrial

but

none

and

disturbing to

the

This condition is the culmi¬

unrest.

political

conditions which

have

been in progress for many years, and the war

has simply accelerated these

forces and

brought

witness

dustrial

and

vast

social

have' similar

there

experiments

numerous

changes

industrial

our

alarm

acute state.

in the

organizations. ' Many fear that

doubtless

of the problems to

some

with

world

society.

But

in this respect.

in¬

new

in this country are

country

our

This is yet a land
opportunity, with wide distribution of private property.
Our Constitu¬

tion

provides
for

disposition

need

nor

increase

the

but with

cost

liberty of speech and

living has greatly

ex¬

press.

the

aggravated

prospective decrease in prices, and increase in

industrial and labor

the part of

fear the fullest

change and there is

and adequate means for its

easy

violence,

enormous

mutual

unnecessary

leaders

recognize their

obligations and duties, both to each other and the public,

may

reasonably look forward, without alarm, to better adjustment of the forces
labor

and

is,

capital.

by fomenting strikes,

Labor,

encouraging disagreement with

employers,

in fact, striking at the heart of its own future progress, and impairing

Capital should recognize the results of the

prosperity of the country.

toilers,

and

duction

salvation

investment.

and not

conditions

working

improve

and

Every man should

bound

wages

the

pro¬

out his

own

ratio

be free to work

by the shackles of organizations, to his detri¬

ment.

industrial

interests
is

the

and

in all these misunderstandings: labor leaders,

often

disregarded

public.

The

latter's

usually suffer most because of the rules under which the contest

held.

•the

concerned

are

leaders,
The

welfare

disputes,

the

full responsibility

public, and

public

general

consideration

should

most

important.

given to

the

effect

the

upon

placed.

Citizenship.
The

spirit of broad-minded citizenship,

in maintaining the soundness of
banking position, employing credit primarily to stimu¬
late those business operations which have to do with production and dis¬

their

individual

own

tribution,
The

is acceptable

tion

action.

know what

Business

exercise
be

and

production and

the

helpful

must

nent to

the welfare

sphere,

whole,

uncertain language
of the

leaders of

any

the

people

the people

investors.

use

to which credits may

be given,

those

render

service

its

broad

visions,

and

things

proper

necessary

character.

contribute,

accomplish

citizen of

his

character

ma¬

unrest,

these things,

country, assert¬

which

perti¬

are

and

untrammeled,

enactment

exercis¬

laws,

whole, and serving

with

prefer¬

Timidity has been the vice of bankers in

which

will command

its equity, and fairness.

social

demanding at all times that

free

are

community their influence for good
assuming leadership that it is based
a

and

those matters

whole,

shall be

will

economic

Bravery, initiative, and forceful action
their

should be taken

must co-oper¬

the banker must

country to provide construc¬

the administration

responsibility to the country

interest of

and all

commerce,

should

which

the correction

fearlessly take his position

public affairs.
as

with

out

The welfare of each in¬

distribution

bankers of

financial

way,

representatives

ential

worked

discouraging at the same time dissipation of the
into channels* which are essential.

aim of the

protect legitimate American

sense

judgment.

resources

be the

ing his views in

careful

posi¬

dangerous.

good.

progress,

financial

leadership

banker

the

into the fabric

woven

placed

It should

and

well

are

must

programs

highest judgment in determining the

nation's

tive

helpful and what

Assistance to all legitimate business

emphasis
the

are

industrial

and
as

common

his

the American banker.

position to- discourage false moves—to accel¬

guardian of credit, the basis of modern

put.

truism of the duty of

tendencies

decisions

for the

As the

Surveying the whole field of business, he is in

broad public spirit,

ate

banker is

American

erate proper

ing judicial judgment in

whole,

bankers have given

The

regardless

are

and

the community.

Considering the past year as
in

in this country by the checking of in¬
about deflation hastily or with lack of

gradual reduction

planned

carefully

hardship

won

bring

deflation,

paper

be
of

not

Credit

economies

terial

victory has been

which

system

in¬
in¬

ing the tax question, the enormous growth of Federal, State and local
penditures

en¬

ness.

decided

direct

Chamber

Bankers'

erate with

dustry is closely

military.

warnings, the Federal Reserve Board, in November, 1919,
to assume leadership in the control of credit.
Through

necessary

slowly but surely the

National

American

Reserve

financial

will

States

United

settlement

well-conducted

every

tax

society at large, and

composed of members

Three factors

foreign nations, fifteen billion

twenty-five billion in all, and yet to have kept sub¬
stable the foundations of credit is an achievement

the Federal Reserve banks

throughout

Any

basis

sound

Association

commission

by the present type of organization.

extended

rank.

Through

tion

economically

our

the

shocks of

nation.

consideration, and to this end it is hoped that "The Economic Commission"
of

rendered

citizens should be grateful and

of revenue which will

sources

legal title its ownership rests.

industrial unrest,

without

ciate.

for

whose

one

The

incomplete

select those

organization.
No tax itself should
of wealth, or the development of the

primarily by

enjoyed

cuse

try, encouraging the investing public and guiding their judgment,

ment

the

and

victory.

portation improved and encouraged.
A vast sum of money is needed for
railroads, and only through co-operation of the financiers of this coun¬

UBed

ip their duties.

distinct

classes of

among

decrease of available funds

accumulation

the

is
to

was

political

affect

the

life

revenue

which discounts accumulation I of capital, is to be deplored, for all capital is

our

with

inequity

less attention

institutions

given when it is ascertained what effect the Transportation Act will have
on
railroad
earnings
operating under these mandatory features.
An
amendment to the present law should be encouraged so that bankers or
other business men, regardless of their dealings with railroads, can serve
as

development.

natural tendency to

the Inter-State Commerce Commission in its efforts

problems

inequality and

and,

revenue,

funds,

which the

from

Federal

present

our

public

need of

sources

been

Economy.
revision of

increase in

great

given to the

result has

unfavorably

these

should co-operate with
solve

will

debenture plan

America

securities

which

unusual

time of

was

The

industrial

dustrial

provided

was

public.

bankers

effect

$300,000,000

revolving fund of

Corporation,

equipment under

vestment to the

the

present equipment emergency, and from that has been evolved

National

chase

secured.

Government

The

the

ordinarily

for

railroad securities

case

Our Federal

automatic

hardly recognized the need of Government regulation and
along the lines of opposing what has since become

investment

demanded

war

taxpayers, increased cost of commodities, and

operating.

of the Transportation Act has taken

highly

than

1920,

operate

passage

the

to banking,

brought about

regulation.

necessary

the

terfere

be considered

distribution

executives

always

There is

activity not directly

return,

Commission

classifications of traffic.
road

The

least

be expected from the

can

required

Rate-making should
it

taxes.

finance.

legislation passed
Act

the country.

tentatively

the Act.

rates under

and

was

system,

Beneficial

return

the

required by
noi

and business

nevertheless germain
extent

Several months will

rates

Commission

merce

Transportation

issued.

what

own.

large

important pieces of

general credit structure of
sonably count,

trade

belongs to

transportation

the

was

securities

and

the bankers

Government

and

Many suggestions have been made for

retarding the liquidation of loans.

most

Congress

credit

the

bankers,

credit

and

the

sixth

the

tension

commodities

organization

Transportation.

Although the transportation problem
since

the

deliberations,

our

solving the many problems of international

under

for

and the National

It is important that this be given constructive con¬
as its success will
be a decided factor in

country.

sideration

in co-operation with special com¬

Chamber

States

Taxes

the people of other lands, is essential
life in foreign nations.

among

financing corporation, to

of this

men

CONVENTION.

BANKERS'

124

is
on

demanded,
large,

but

unselfish

attention

and
care

desire

because

BANKING

Report of the Gold Bonus Committee.1
To

the

Administrative

We,

the

McFadden

Bill,

submit

the

creased

-1 .^,21

■

This

Committee, American Bankers'

undersigned committee, appointed to

opinion

SECTION.

Association:

consider

following

and

cost

report

our

obliged

our

same

view*:

mine,

suspend.

gold miners

iron

large

likely

very

only

shortage,

and

copper

continued,

not the

are

labor

possessing

Others

Some

cause.

and

however, of

Treadwell

embodying

production

true,

was

known

125

hoping

well

ore,

production

change

well-

The

low-grade

was

the

from

conditions.

who have suffered.

ones

suspend.

gold.

suspended

for

obliged

were

volume

But

Traction

pennyweight of fine gold for all gold manufactured, used or sold for other
than coinage or
monetary purposes, including jewelry and other purposes

companies,
having a stipulated fare, usually a nickel, have suffered se¬
The different States have refused to make it possible for the traction
companies to earn expenses by allowing them increased compensation for
their service, somewhat in
proportion to the general advance in costs.
The

steam

The McFadden Bill.

The

McFadden

Bill,

so-called,

provides

for

tax

fifty

cents

ornamentation

and dentistry
(with some exceptions for children
The bill provides further that out of the funds thus

charity cases).
lected
used
of

and

for

"any

other funds

specified purposes"

the

Treasury

there shall

the

paid

United

and

good service.

not

largely

bonus to the producers

railways have ^ just claim

plight

annually by certain Government officers in accordance with the commodity
price index number as determined by the Bureau of Labor Statistics.
The

cipients of

tax

and

the

premium

index

the

cost

and

rises

increase

gold

23.22

every

both to rise

are

number

general

falls.

in prices

and

fall after May

behalf of

in the United

wages

while the

production,

grains of fine gold;

that

price

grade

result

around

stood
The

ore

that

worked

gold

$89,000,000

1913,

result is that

reduce
the

gold

the

industrial

production

that

if relief is

mines
will

will

fill

such

not

(by

bonus)

permanently,

and

extent that

other

stood

1919—a

consumption

mines

the mines will

about

reduction

gold,

which

$80,000,000 in 1919.

over

purposes

It is urged that this

cutting into

purposes,

that

and

(by

such

become

deep

timbering will

unsafe

to increase

and

for

gold

some

measure

the

particularly
where

both

It is further argued

for.

some

gold

our

measure

taxation)

called

given to gold miners by

water

which

$22,000,000.

emergency,

consumption of gold

gold

abandoned

with

national

States,

monetary stock of gold for industrial

our

for industrial

money

constitutes

reserve,

for

mines

which

deteriorate to

out the

has

one

from
the

stock of

monetary

our

largest gold supply of

abnormally
be

not

that

which

credit

forward
and

substantial

has

actually made

upon

banker

and

economist

it should

part

national

United States had

in the world's history,

country

any

every

removed the

was

knew

supply

that

since

taken

best

The

progressive and

regards it

place of three

situation far safer than it

our

expansion.

banking

among

far-reaching contraction

the only alternative to such

by imposing
of

check

country

the

looks

credit fabric

our

disastrous disruption of the

cases

increase

and

costs have

gold

however, though

advantage which

the fact

that

desperate
in

income.

general

risen

all

faster than

re¬

their

necessarily

unlimited.

much

gold

The

gold

That
It

war.

injured.

miner

possibly

value, the price of gold in

The

demand

always

can

produce.
and

for

sell

finds

he suffers

gold,

fixed

his

terms

however,

price

rising

costs

On the

consequence.

periods of adversity, depression and falling prices bring to the

miner,
in

market

lower his

fixed.

gold

can

has

war

the

suffering under present conditions, enjoys
industries enjoy.
As a consequence

periods of boom and prosperity,
other hand,

of the costs of

one

few other

gold is the standard

money

always

but it is

large class of those which the

peculiar

the

worst

costs

intensified

else,

one

increased

depression,

and

profits.

the

form

the

from

upswing

and

prices

has

unlimited

the

severe

depression the

He is at present suffering in

production tend to be.

has

costs.

in the

past, however, enjoyed periods of prosperity when the rest of the community

suffering,

was

the

and

the

natural

of similar

recurrence

of things he

course

look

may

forward

situations.

reality, the propaganda in favor of doing something for gold is exactly

with

par

which

did

bounty

much

the

silver

favor

It has

ago.

behalf of this industry,

for

silver,

stable

'There is nothing to justify

propaganda.

against such action

something

doing

generation

to justify

Govern¬

Per contra, there is very

the production of virgin gold.

upon

much to be said

propaganda

heard

interference

Government
ment

the

than

'foundation

the part of the Government.

may

briefly

pass

Bonus.

Against

Arguments

Its

four huhdred millions

was,

many

officers,

could

leave the country.

opinion

prices, with

have suffered.

is unfortunate,

agreed that it

were

made possible an over-expansion of credit in the United States and

presence

the outflow
has

embargo

permanently held, and practically all students

desirable

was

that

great

$3,000,000,000 constitutes

around

the gold

When

emergency.

year

incomes,

public

gold mining industry for special relief from the Government.
suffered

about
per

themselves

funds,

no national emergency exists calling for special treat¬
gold mining industry, it is difficult to make a case for singling

Gold mining,

operation.

hardly be contended that the loss of $22,000,000 of gold

can

fixed

found

of the rise

trust

large body of other industries whose

Deflation the Cure.

have

orphans,

Recognizing that

Credit

bonds,

consequence

ment of the

of the fixed price

large surplus for monetary

and

prices have similarly suffered.

that

has raised

is fixed

being forced to close, with the

cases

United

industrial

had

is argued

cut and the mines where

are

$58,488,000

to the extent of about

1919

consumption

whereas

gold

1913, increased to

obliged to draw

we were

the

about $45,000,000 in

purposes

some

in
cut

was

$30,000,000—whereas

1913,

are

production

1925, according

States

consequence

rising costs the profits of gold production

low

the bill it

Widows

compensa¬

efficiency and to render the public
institutions, with income derived

Universities and charitable

from

gold in the United States of $10 per fine ounce down to May 1,
1925, and that thereafter both the tax and the premium shall be readjusted

new

the public for increased

upon

tion in order to enable them to maintain

col-

States

example,

verely.

per

the difficulties of administration

over

of such

act; the danger that frauds would be practiced upon the Government; the

Gold which
differs from other gold merely in
having a special history, and which,
by virtue of that special history rather than its intrinsic qualities, com¬
mands a.high premium, presents an anomaly inconsistent with the normal
difficulty of distinguishing virgin from old gold melted down.

functioning of

free gold market and the normal

The

credit

standard.

not

functioning of the gold

would be very great.

system as Japan has
recently seen.
The proper course to take is
by artificial methods to seek to expand the gold basis of our credit
system, but rather to contract the superstructure of credit to a point where
it

can

safely

the world's
and

not

States,

world-wide

Our

gold

trade.

the

market

far

could

months

far

were

make

Gold

1920,

our

the

during

Our

distribution

international

gold

gold,

and

course

obtain it by the doubtful method of

can

produced

the

only two
two

and

United

three tens of millions

States,

States in

dollars,

their desire

repressed

had

kinds should be suppressed.
be commended, and

may

tax

The policy of
jewelry,

luxuries

for

general tax

such

part of

vertibility
the

free

gold coin
the

into

all

coinage

into

gold standard

gold bullion;
the

and

the

(5)

money;

the

forms of representative

bullion;

arts,

free

(3)

money

the

(1)

are:

gold

unrestricted

instant

demand

melting

con¬

;

down

(2)
of

(4) the uninterrupted flow of gold from money
uninterrupted flow of gold from the arts into

export

and

import

gold.

interfering with the free flow of gold into the
the basic element of the gold .standard.

this kind,
thus violates one of

arts,

tax

under

creasingly

and

strain.

increasing

Our

markets

have

been

drained

in¬

The one-sided flow of com¬

of goods and supplies for Europe.

modities to

financed from the beginning, in considerable

Europe has been

by expanding bank credit in the United States; the resultant

part,
ages

short¬

of goods, together with expanding bank credit, have raised prices high,
a
consequence costs of production of all
kinds have risen.
These

conditions

were

intensified

our

own

entry

into the

war.

spent many billions of dollars, raised by taxes, bond

ment

Our

Govern¬

issues and bor¬

rowings from banks, resulting in increased shortages of goods, and increased

four

industry

five

and

while

States,

ordinary
While

industrial system.
were

some

During the

from

the

ranks

military and naval service of the United
millions were diverted from the production of

entered the

many

supplies.

material increase in wages.
industries, owing to the rise in war-time prices, have made
a

large profits, many others have suffered.

mines

withdrawn

goods to the production of war-time materials and

shortage necessarily resulted, with

labor

very

strain on our
million able-bodied men

which increased the

prices,
war

producing

and

low

grade

ore.

plan

does

the

Professor

with

tampering

report

gold

opening wedge

Irving

Fisher's

interfering with

plan

for

the

upon

We shall

project.

standard

in the

There is,

the American Bankers' Association,

more¬

which is to

content ourselves, for

pointing out that if this index number is to be adopted

considered

its

not introduced

merits and

own

feature of the McFadden

with

num¬

standard of value in

taxes

Your committee believes in the gold

extenso.

with

present,

it should
door"

index number

condition of the world's monetary affairs.

detailed

rate of

It is beyond the province of this paper to deal

another committee of

make

Bill introducing the index
fixing the

for

gold mining constitutes

accordance

believe

not

present critical
over,

basis

premium

States

that

with

"by the back

Bill.

Danger to Gold Standard.
The

Europe

Among these were the gold
A number of these, because of the in¬

are

United

basis.

Only

the

good

Japan

gold

All

th|e danger which this
Nearly

the

well,

stand

the

other

gold

The

good

that
at

belief

money

Offering to
instead

it
at

pay

going

Britain,

would

the

gold

pay

world

her

paper

gold in London represents not

ard

gold

Action
the

but

coin,

the kind

rather

open

that

it.

are

passage

this country,

throughout

assur¬

guard

the

against this,
has

facing,

Great

resolutely

of her

South

gold standard in its

integ¬

gold market in

the

world

in danger of

are

to the petition

the

which the depre¬

The so-called "premium"

"discount"

withdrawn

Instead of

gold bullion in stand¬

British

paper

by the United States would be

The

are

proud

dollars

our

time and

of gold

are

real premium

merely

proposed

world.

commercial

be measured.

could

the production of gold.

than

Unable to maintain
money

the world

We enjoy

elect.

may

is in order to

premium

The

conspicuously
believes that

be maintained by the United

the sort in reply

anything of
miners.

at any

sentiment

Public

difficulties

greater

out

position is weak, that we

our

basis, and that it

far

today

the production

doubt.

that

has frankly permitted

she

world

this country

for

Euro¬

The whole world must be convinced

position, would weaken

our

expedient to

refused

rity,

raise

paper

premium

assume

with

African

the

that the gold standard would

once

regard it

which the depositor

form

strengthening

ing the world
States,

obtains

be deposited

can

time in any

any

ciation

which

the

be zealously guarded and main¬

this respect, and it should

gold must be maintained.

standard.

nations of

struggling and hoping to get back to the gold standard.
preeminence in

all

few of the smaller countries of

standard.

gold.

lies

itself.
a

maintaining

excellence, and

par

are

however,

all,

gold standard

paper

maintaining

dollars

the

approximately

even

States,

nations

as
our

involve

would

States

pean

objection

greatest

would

Fron^ the outbreak of the great war in Europe our industrial system has
been

Unted

tained.

elements

the McFadden

"Stabilizing the Dollar."

war¬

calls for.

essential

The

the

prices

general introduction of the

measure

general tax, may well be! advisable, but a differential tax on gold as a raw
material of production is a different matter, and one which no national
emergency

the

for

armistice,

This

travagance of all

commodity

years.

the

phenomenon growing out of the relaxation of
who

per

four

history instead of mining gold

to manufacture

Again, the provisions in
ber

manufacture and

be made by the

following

gold,

which

the first

million

hundred

three

difference that could

any

consumption

people,

the

upon

the

upon

not

in the

consumption

but rather

stock of gold would amount to in several
a

turned suddenly extravagant and bought jewelry of all
tendency may be undesirable and probably is.
Ex¬

war,

lavishly.

luxuries

and

exports of the United

industrial

economies.

kinds

gold

new

significant than

partly temporary,

time

running between

increased

normal

time the banking situation calls for more
can purchase it
in the international gold

difference

millions,

production

any

imports and

gold bonus plan in
The

production

few tens

cheaply than

bonus

best

United States,
more

expensive

annum.

conditions

national stock of gold is dependent,

gold

amounting to

consumption and

international

problem.

the difference between

upon

was

under

The problem of gold production is

gold supply.
national

United

maintained

temptation

McFadden

Bill,

money.

red flag to

instead

strengthening confidence in the position of the United States would weaken
would

it.

Bill

should

commercial
The

considered

opposed

and

financial

When

three

four

domestic

our

wholly

hundred

markets

every

confession

weakness.

The

McFadden

well-wisher of this country's credit and

prosperity.

present situation of

porary.

high costs of production is abnormal and tem¬

balance of trade is reduced, leaving

abnormal

million

absorb,

dollars'

which

worth of goods per

they

have not

month for

been absorbing;

our

when

BANKERS'

126

CONVENTION.

by the
higher
wages; and when the strain in our money market is relaxed through re¬
duced extravagance and increased savings on the part of our people, and
labor

gets

shortening

hours

most of the present derangements in our

their Government,
tem

will disappear.

Increase

illusion that prosperity can be maintained
and by reduced efficiency, accompanied by

its

over

industrial sys-

It must

return with normal conditions.

gold mining will

not be forgitten,

however, that part of the automatic working of the

standard

increase in gold production when prices
decrease in gold production when prices are high.

depends

upon

gold
are

In¬
makes it
easier for prices to rise again, while diminished gold production in periods
of high prices and high costs tends to reduce prices and costs again.
Moreover, the industrial consumption of gold tends to increase in a
period of high prices, since the price of gold does not rise as other prices
low and

upon

gold production in a period of low prices and low costs

creased

period of low prices the prices of gold manufactures are

rise, while in a

relatively
diminish.

and purchases of gold manufactures consequently tend to.
Variations in the consumption of gold thus also work toward

high,

diminishing the supply of free gold when prices are too
increasing

high, and toward

when prices are too low, thus tending to correct
In this feature of gold production and

tbt supply

both the rise ..nd the fall of prices.

gold standard.
regulator and
conditions which it seeks to remedy.

consumption we have one of the stabilizing factors in the
The McFadden
Bill proposes to strike at this automatic
corrective.

It would aggravate the very

GEO.

M. REYNOLDS, Chairman,

LAWRENCE E. SANDS,

and

to normal as a means of

the world.
Premium Not a Subsidy.

compared to 1914, the purchasing power of the dollar In terms
commodities in 1919 was 47 cents.
The gold producers' ounce in
As

had

purchasing power of $20.67, whereas

could purchase in terms

BARTON HEPBURN.

of bank reserves. The
and private, including the
Liberty bonds recently issued, is payable in gold coin of the present weight
and fineness.
The nearly $10,000,000,000 of loans which the United
States Government has made in the last two and one-half years to foreign
governments are payable in this gold coin.
The $3,500,000,000 adverse
European trade balance created since Jan. 1 1919, has still to be funded.
The outstanding indebtedness of nearly the entire world is contracted in
gold.
Outside of Asia, gold is still recognized as the unit of value and the
basis of monetary systems, although In many countries the stress of war
conditions and unbalanced trade have compelled a suspension of gold pay¬
ments.
All of these countries regard such suspension as temporary and de¬
sire to get back on the gold basis and establish their currencies in fixed rela¬
Gold

our

tions to gold at

standard of value and the money

outstanding indebtedness, public

the earliest possible

date.

World Restoration
For the United States to

the decline in the gold
year.
price
of gold, in which event the law of supply and demand does not operate, it
would not be necessary to consider compensating the gold producer for a
part of the decline in the purchasing power of the dollar which has taken
place the last four years.
The premium to be paid to the gold producer,
based upon the new ounce of production, cannot be construed as a bonus or
subsidy for the above reason.
Most of the wage increases that have been
allowed by various industries and the increases in transportation rates, car
fares, and for municipal gas and electric services throughout the countiy
have been based upon the increase in commodity prices or the decline in
the purchasing power of the dollar.
The products of all other industries
production from $101,000,000 in 1915 to less than $50,000,000 this
Were it not for the fact that the government has arbitrarily fixed the

gold mining industry have been automatically increased
that the cost of production is fully covered,
together with a profit, by which alone future production of such commodities
may be assured.
If we are to maintain the normal gold production of the
United States it will be necessary to take this into consideration.
Gold is
during this.period, so

in price

gold in the industrial arts and trades are

receiving their metal at

the pre-war price, no reason can be assigned why

they should not pay an

increased cost alike with all other industries which
the increased cost for their raw materials.

have been forced to pay

Industrial Consumers Now
The
with

compared

been fixed in price so that it could have re¬

$65,500,000, or 112%
newly produced gold which they
consumed during 1919.
The payment of the excise proposed upon the sale
of the manufactured article containing gold will enable the industrial con¬
sumer of gold to pay more nearly the cost of production for his raw material,
although he will still be subsidized in being able to obtain his metal
at a price equivalent to less than half of the general average increase of all
of the

of gold therefore

profited by a subsidy of

price paid, $58,500,000, for the

other commodities in the

United States.
Heavy

addition to paying the

French industrial consumer
francs

than the price

French

Tax.

exchange discount, which in the case of the

of gold in 1919 amounted to over 100% more in

paid before the war, the French Government, has

gold in the fabrication of articles
60 francs per heotogram ($3.60 per fine ounce, par
exchange) by law of June 25 1920.
The French Government has imposed
a tax of 37 francs,
50 centimes per hectogram of fine gold contained in
articles of manufacture since 1873, and justifies this tax in a formal docu¬
ment transmitted by the United States Bureau of Foreign and Domestic
Commerce, as follows: "Moreover this tax, striking as it does luxury goods,
or unessential articles, enters into the category of a sumptuary tax,
the
imposed

sumptuary tax for the use of

(other than money) of

admitted by all economists as a legitimate procedure."
This fact is referred to for the reason that it would seem that foreign govern¬
ments are exercising greater precautions to protect their monetary gold
reserves than is the United
States a creditor nation from which Europe
levying of which is

Market

Maintained.

excise tax proposed as interfering
with the free flow of gold into the arts, thus violating one of the basic
elements of the gold standard.
In another place the Committee refers to
the excise as a differential tax on a raw material.
In this most important
provision of the bill the
is to be

refers

Committee

to the

Committee has overlooked the fact that the excise
of the manufactured article, and not upon the

paid only upon the sale

Mint as they always
In this way a free gold market
is maintained, and there is no interference with the free flow of gold either
into the arts or from the arts into the Mint.
The fact that the rate of the
excise is fixed at 50 cents a pennyweight for the fine gold contained cannot
be construed as a differential tax on the raw material, as it is simply
a
means by which the tax may be equitably measured and levied upon the
consumers of articles containing gold, in the same manner in which the
bullion, which the

have at the fixed

manufacturers will receive from the

price of $20-67 per ounce.

imposed its sumptuary tax.

French Government has

Currency Inflation

The Committee

Prices.

and Not Gold Cause for High

makes a statement with reference to

the effect of gold

prices

production as follows: "Increased gold production in a period of low
it easier for prices to rise again, while diminished gold

and low costs makes

tends to reduce prices and costsa gain."
The gold production of the world has
declined from $469,000,000 in 1915 to $350,000,000 in 1919, a reduction of
25% in the last four years, and yet prices throughout the world have risen
enormously.
Commodity prices in this country continued to increase
between May 1 1919 and May 1 1920, notwithstanding the loss by excess
exportation from the United States of $445,000,000 in gold or 14J^% of
the highest gold stock ever possessed by this country.
Furthermore, during
the period when the gold reserves of foreign nations were being greatly re¬
duced by what they sent to this country their prices advanced even more
rapidly than those in this country.
This indicates that the reverse of the
Committee's observation is true, that the depletion of gold reserve at a time
periods of high prices and high costs
by the facts.

This is not borne out

when currency

is rapidly expanding is

mainly accountable for

accentuating

measured by the ratio of
the gold reserve to the volume of the circulating media, and it must be
apparent that an increase in the gold reserve without an increase in the
ciruclating media would reduce the degree of inflation.
It must also be
evident that the effect on prices of the supply of gold in active ciruclation is
relatively small compared with that of the credit currency based on gold
the increase in

prices.

which is not "free" but

banks and
If this gold

locked up by the Treasury and Reserve

the basis for a larger volume

used indirectly as
were

The degree of inflation is

of currency.

circulating, it could not be so used.
The true remedy
return the gold to circulation, form which it has been so

really free and

for inflation is to

of the

greatly withdrawn as the basis for inflation.
Of the total gold stock
United States which amounted on Oct. 1 1920 to $2,704,672,504, $2,003,-

Federal Reserve System and
Federal Reserve Act, 35% against net deposit
liabilities of the Federal Reserve banks.
After satisfying the reserve requirements of the net deposits there w as on
Oct. 15 1920, a gold cover of 46.6 cents for every Federal Reserve dollar
note in circulation, of which there were $3,353,271,000.
The gold cover on
Oct. 15 1920, of the Federal Reserve note was but 6.6 cents per dollar
above the amount required by law, which is closer than conservative

072,000

was

held as the gold reserve of the

liabilities, and 40% against the note

sponded to the law of supply and demand, the price of gold would have at
least risen to the general average of all other commodities.
Industrial con¬
sumers

Gold

Free
The Gold

thereby was tied up by the

Subsidized.

general increase in all commodities was 112% in 1919 as

1914, and had gold not

keep the gold

altogether.

Paper

its norma1

strength.

Since the consumers of

fixed in price, that has not been able to
supply and demand, and special provision must be
production of the country from vanishing

product, because it is

respond to the law of
made if we are to

of Gold Standard.

adopt remedial measures to maintain

construed abroad not as an element of weakness,
A stimulus to domestic gold production would
be regarded not only as evidence of our desire to retain the present gold
standard throughout the world, but as an aid to European countries to more
rapidly recover their pre-war gold reserve positions.
To allow the industrial
consumers of gold in this country to withdraw gold from the monetary
reserves of foreign countries would have a depressing effect upon the ex¬
changes, and would delay the time when foreign exchanges would be restored
to par.
The diversion of gold from the monetary reserves of the nations of
the world into the manufacture of articles of luxury particularly at a time
when the world's gold production has so greatly declined will still further
delay the financial recovery of all nations from the pressure of war finance.
The report of the Gold Committee states, "If at any time the bank situa¬
tion calls for more gold in the United States, we can purchase it in the interNational gold markets far more cheaply than we can obtain it by the doubt¬
ful method of an expensive bonus on gold produced in the United States."
Is it not evident that if the United States was forced to withdraw gold from
.the already depleted reserves of foreign countries, their purchasing power
in our markets would be lessened ?
A still further decline in the exchanges of
such countries from which the gold had been withdrawn would result.
The
loss of European purchasing power in the markets of the United States
upon which our domestic industries depend for prosperity would occasion
a loss far greater than the premium provided for in the bill, which is borne
not by the public at large, but directly by the consumers of gold lartlcles,
luxuries.

This is the principal reason for

to $970.

power

gcfd production would be
but rather as one of

during 1919 the same ounce
Since the price of

of all commodities but $9.70.

arbitrarily fixed by statute at $20.67 an ounce, the gold
producer is in the same position as a person who received the same income in
1919 as in 1914 and finds that a $2,000 income has shrunken in purchasing
gold has been

the only

of the report a statement in be¬
half of Representative McFadden in defense of his proposal
was submitted to the convention.
This statement of Repre¬
sentative McFadden's we give herewith:
I
Following the presentation

entire body of

of all
1914

except that of the

Respectfully submitted,
>

receive every assistance in restoring its mnoetary
protecting the gold standard throughout

should

expects
reserves

financiers would like to see it.

Deflation Not a Remedy.
While the business affairs of the

country"are gradually adjusting

them¬

and economists, be
many years before the dollar will regain its purchasing power of 1914;
In fact, that time may never come.
Consequently, temporary means
must be provided to sustain the gold mining industry over this period of
gradual readjustment.
While it is true that there has been an attempt made

selves to normal, it will,

to contract the
to

in the minds of most bankers

credit structure of the country, I would

the continually increasing

decline in the gold reserve

gold

ratio

may

currency

call your

shall,

attention
and the
While the

in circulation

ratio of the Federal Reserve System.

improve with

structure of the country, we

be forced to lose

volume of

contraction of the credit and currency
on account of our adverse trade balance,
which might be thereby

considerable amount of the gold

released.

It is being demonstrated that a vast amount

of inflation cannot be

without causing hardship and loss of employment,
proper

reduced

and therefore is it a not

correction to make stronger the reserves and circulating

increasing the production and conserving the use to

media by

which the gold is put,

production of commodities which are so greatly
needed throughout the country to-day.
By this means only can the cur¬
thereby increasing the

rency

and credit structure of the country be deflated, while at

the same time

BANKING
ncreasing the physical production of commodities
of

has

are

put that is the all-important thing.

lower the cost

as to

living, and with the idea always in view that it is the

and credit

use to

which money

While the Committee

urged that deflation is the only remedy for the economic

save

the industry from complete destruction.

ticularly in view of the fact that Congress

six times

has fixed the price

Par¬

of gold,

that Congress has now the power to stimulate the production of
gold by creating the machinery whereby the consumer of gold in the in¬

dustrial arts may pay more nearly the cost of production for his raw material,

thereby enabling the producer of new gold to increase his output to meet the
gold

arts and trades,

further industrial

from

reserve

and protect the monetary

depletion.

The government should

legislate to stimulate the domestic gold supply and thus relieve the strain
and send into the currents of industry the invigor ation of

this

new

gold.

The process of deflation in order to serve as a solution to the gold problem
would have to take

place

dustry of the country.

rapidly that it would paralyze the entire in¬

It cannot be that the Committee would want to

deflation take place so rapidly.
cannot be

too

The attendant ills of

strongly emphasized.

rather than less

see

too rapid deflation

Labor difficulties will become

The loss of employment alone would create

numerous.

be borne without suffering and the

production of

volume of deflation.

gold

impairment of health.

The loss in the

gold to the gold reserve will still further accentuate the

new

It will be necessary, also, to analyze our exports of

carefully and to increase the production of new gold at least to

satisfy the requirements of the manufactures and the arts.
henceforth go to European
to

countries whose

To prevent this leak of gold

purchasing from
Committee

us,

thereby leveling the trade balance.

Underestimates

loss of $22,000,000 occasioned by the

industrial consumption of gold over the production of new gold is a very
small item to the monetary

Committee,

gold stock of the nation.

Retention of Gold

United States Mint and Coinage and used for industrial purposes

1919,

also

was

The gold dollar in the vaults

use.

of the Federal Reserve Banks may serve as
of $2 50, and these

deposits to the credit

to enable credit extention

serve

minimum,

gold

therefore,

reserve means

the basis of deposit liabilities

With

modern conditions is not

readily be shifted.
mine.

forced credit contraction of at least 20 millions.

develop

allow

Mr.

com¬

recently with reference to the

market resulting from the small amounts
The National City Bank state¬

following reference:

"One explanation of the

easier tone in the money market is to be found in a moderate increase of

reserves

The lawful

due to importations of gold from Paris and London.

reserves,

of the Reserve banks

Sept. 3 aggregated $2,117,957,000, and

Sept. 24 they aggregated $2,151,594,000, an increase of some $34,000,-

000."

In the statement of The Mechanics and Metals National Bank of

October the following statement is made:
Is

helping to increase the

vase upon

"The gold coming from France

which that credit rests."

days ending Sept. 30 approximately $11,000,000 of gold
France, which indicates what
has

time when credit

like influence

In the ten

Can it be that the normal

production of gold in the United States, which in 1915
on

$100,000,000,

was

the money market or is there some magic

difference between that gold which is imported from Europe and that
may

be produced in the United States?

ease

our

money

British exchange,

depreciation in

which reduces their purchasing
Would

Fisher

power

which

French and

our

market.

index number

ber of
in the

adjusting the excise and premium

being similar

marked lack of knowledge concerning his proposal.

The

being

gold standard, while the index number as employed in the bill in no

way

changes the number of grains in the standard dollar and is used merely

as a

basis of comparison in order to equitably

As used in the
a

adjust the cost and price equa¬

producer of new gold and the consumer of industrial gold.

bill, the index number has also been used for many years

basis for regulating wages

gold standard during the present period of credit restriction accompanied
The continued depletion of the gold stock by excess

exportation and industrial

use will force a
rapidity in deflation which will
seriously impair the public confidence in the Nation's finance and currency

unless

normal gold output is maintained.

That this situation may

will lend the

arising from the difficulty of distinguishing between virgin

tion of the Bureau of the Mint, the
Survey,

and old gold

With the co-opera¬

Bureau of Mines, and the Geological

all of which organizations have field representatives in the gold

mining districts,
a very

any

successful fraud on the Government could only be

small and negligible scale.

in the bill and the

President

tlemen:
The

The affidavit of production specified

penalty provided insures the Government every protec¬

for

British

Gold

activities
the

1918,

British Empire 63.7%.

In 1919 the United States produced

Since July 24 1919, the British Empire has been paying

exchange premium,

high as 50%, to the gold producers of South

Africa, where the bulk of the
States no

British gold is produced, while in the United

assistance has been rendered the gold mining industry.

The gold

producers of all British possessions are receiving the benefit of an exchange
premium.

This year the contribution of the United States to the gold

production of the world will probably be not more than 12%, about half of
contributed in 1915, while the stimulating effect of the exchange

that which it

premium will probably increase the quota which the British Empire will
contribute to 75%.
Whereas in 1915 the British Empire produced three
times

Bankers

Association;

Gen'

believes it particularly pertinent to restate that in
has

been uniformly guided by and has strictly ad¬
adopted by the Association in annual convention

resolution

American

Commerce and Marine in presenting the report of its

the past year

its
to

Commerce and Marine.

of the

■

every means

that

the Association pledged itself "to support
in its power the development of export trade, to encourage
manufacturers to enter upon this field of
distribution, and to provide as

rapidly

ficient

resolution

possible adequate
meet

facilities for financing export operations suf¬

reasonable

every

demand

that

Particular

arise."

may

reference is made at this time to the resolution, pursuant to the adoption of

which
the

the

Association
that

reason

Association

Vas

made

the

authorized

Committee

produce,

with

possible,

its report

something of

Committee,

for

instruction from the

constructive character,

in view.

particularly

That report

year.

comprehensive inquiry

mind

that the

prepared after

bankers

the

among

was

Committee

the

careful

a very

country

whom

plan contemplating the organization of a nation¬

foreign trade financing corporation.
the

report

expressed

the

foreign trade financing to the Executive Council at the

the Committee submitted
wide

appointment

interpreted it.

resolution

that

spring meeting of this
and

the

has labored with that end

hence

and

the

Executive

Association

financial

Council,

the

1919,

belief,

Committee's
restated

was

the

ef¬

that

for furthering our foreign trade might very properly be supported by

such

provided

and

there

the

further

inflation

also

and

development of

factor

not

thereby helping

world open

themselves.

taxation,

insisted

alone
our

that

The

our

foreign trade.

find

prevail,

existing
means

credit,

the furn¬

The report to the

Association co-operation

proper

trade,

connection

maximum

with the
production

preventive of excessive prices to

proper

foreign trade

credits

most

businesslike

foreign friends and keeping the markets of the
so,

people of this country

full recognition of their responsibilities

report pointed out the necessity of reforms in methods

particularly with reference to
Government

business

otherwise

It made clear that such

extending

were

pointed out that the plan

economy

would

outlined in the plan submitted would be

production and,

American

would

for ourselves, but also in educating the

in thrift and

machinery

success

absorption

foreign

our

people for their needs.

influential
way,

our

and

being of the utmost importance
own

and its

also

the

particularly emphasized the value of

encouraging national production

maintenance

financial

Edge

members of the Association,

than

was

nor

the

under

production and through these two

ishing of sufficient credit to linance
Council

the

success,

conditions,

the country.

thrift and

such

its

possible

now

that

prosperous

section
on

and

support

question

neither

every

suggests
but relies

machinery,

Association,

received

could

reflection
in

the

mously adopted

Supremacy.

produced 21.5% of the total world's gold out¬

16.6% of the total world's gold output, while the British Empire pro¬

duced about 70%.

Members

bill which will protect

to this

its

should

lend

the
all

excess
proper

profits
aid

tax,

and%it

assuring

rightful share in world trade.

Upon accepting and approving this report, the Executive Council unani¬

In 1915 the United States

but

and

Committee

hered

tion against fraud.

put, and the

Congressional

creditor Nation.

as a

Report of the Committe
The

financing organization

bill based upon the possibility of fraud

than it will prove in practice.

without delay the

impetus of their endorsement

the position of the United States

our

is more serious in theory

be remedied

consideration of this bill should be
expedited.
The British gold producer
has been aided by the exchange
premium.
This bill offers
a domestic
solution for our own gold problem.
I trust that this Convention of Bankers

and for adjusting costs.

Ample Protection Against Fraud.
The Committee's objection to the

danger to the gold standard the enactment of this bill

will protect the monetary gold reserve and will
greatly assist in retaining the

used by Professor Fisher would lessen or increase the num¬

grains in the standard dollar from time to time, a fundamental change

tion between the

healthy gold mining industry to sustain
y:"'.
■'/

•

Far from

Law,

Vary Grains in Dollar.

application to the plan of Professor Irving Fisher for stabilizing the

dollar, shows

"I fear

unfavorable outlook for the industry

being curtailed and prices lowered would have

was

but the gold standard will require a

members

in its

Director of the Mint, in

years as

1919, made the following comment:

fect

The reference made by the Committee to the use of the index number in
the bill as a means for

in and fill with water

cave

resources, which in a most critical hour of

low production of gold and

it."

These small importations of gold

market at the expense of

much greater expense.

very

the effect of reviving all the
monetary heresies of the past.
We want to
stand by the gold standard; it is the sheet anchor of
enduring prosperity;

imported from

small amount imported into the country

great an influence on the money market.

would not exert

was

A considerable

want.

cause

statement of December 20

The

It is interesting to note the

of gold which have come in from Europe.
ment of October makes the

developed gold

States to

George E. Roberts, who seryed for 14

that

all

money

waste of

financial need will

work

in the

normal output of gold at

the gold mines of the United

entails

ture of the country of

marked improvement

or from which capital can
long time to find and develop a good gold
industry, which can be suspended and Resumed
a

constructive aid is provided without
delay, in which event it will take years

fore be equivalent at the least estimate of a contraction in the credit struc¬

$1,600,000,000.

industry into which

It takes
casual

portion of the output always is obtained on a small margin of
profit, and if
such operations are suspended and the mines fill
with water, they are likely
to be abandoned permanently.
The gold mining industry, which has so
greatly shut down In the last four years, will be completely shut down unless

$80,000,000 withdrawn for industrial consumption during 1919 would there¬

ments in the reviews of several of our banks

It is not

without serious interference with the volume of
production.

close to the legal

reserves

million dollars of gold lost to the monetary

every

continually and that the industry shall invite investment
terms fairly competitive with other industi'ies.
Gold mining under

upon

bank may in turn

member

mining should go on at something like its
This requires that
prospecting, exploration and development

normal rate.

shall be carried

by that bank of anywhere from 73^ to 14

that amount, or say $19 to $35.

tames

during

excessively small amount, notwithstanding that the metal

entirely diverted from monetary

was

Standard.

It is fundamental to the re-establishment of
the gold standard as the basis

In the opinion of the

doubt, the $80,000,000 in gold that was withdrawn from the

the British Empire to gain

by declining prices.

Influence of Small Amounts of Gold.

The Committee has stated that

thus! permitting

of world intercourse that gold

China, where it is hoarded

purchase not more goods in Oriental countries in value than they

must

are

depleted and not

Gold should not be sent in

and removed from international circulation.
we

Our gold should

reserves are now

Japan to swell its already large reserves.

such large quantities as last year to India and

Are we to continue to ignore the
problem of gold pro¬

unquestioned supremacy?

burden upon the entire puolic in a lessened production, which could not

much.

duction in the United States,

seems

Industrial requirements of the

127

pressure to

which the gold mining industry is subjected, it is evident that
any process
of deflation must be so gradual that it will not restore the
purchasing power
of the dollar in time to

SECTION.

much gold as the United States, in 1920 Britain will have produced

appoint

resolutions requesting the President of the Association to

Committee of Three from the membership of the Association "to

emphasize by all practical means the opinion of the Executive Council of
Association

the

this

matter."

This

Committee,

was

stated in the

resolutions, "shall be empowered to confer with any like committees which
may

be appointed by other responsible national organizations, with a view

enlisting united effort in the formation of a nation-wide foreign trade

financing corporation," and it was further resolved that the Committee "be

possible to this matter so essential
with the object of evolving a safe, consistent

urged to devote attention as promptly as
to

our

continued prosperity,

practicable plan for the financing of our foreign trade."
The President of the Association accordingly appointed a Committee of

and

Three, naming as its Chairman

the Chairman of the Commerce and Marine

members, Mr. Charles H. Sabin, a num¬
Marine Committee, and Mr. John S. Drum, the

Committee, and, as the other two
ber

the

Commerce and

128
First

BANKERS'

Vice-President of

with

the

Commerce and

the

While

the

work

has

who

Association

Marine

this

Committee's

Committee

been

CONVENTION.
that every encouragement should be given
by that association to the Ameri¬
Bankers' Association's plan for the organization of an institution of

in touch

constantly

work.

Three

can

under

the

sufficiently

large

supervision of the Committee

proper

to reach

tee

this

was

sense

on Commerce and Marine, the latter Commit¬
by the very nature of things, in close touch with what was being
done, and therefore, feels not only privileged, but regards it as important

was,

include

this

report

statement

what

accomplished by

was

the

way

month,

United

States

which

took

Special Committee of Three, this inclusion being made by permission of the

trade

President

members

Three

the

Association

and

that

Committee.

Similar

Committees

appointed by the Directors of the Chamber of Commerce of

were

the United States and

the Chairman of the National

has

had

the

sales

appoint
The

foreign trade financing.

three

Committees held several joint meetings at the first of which
they formed themselves into a Committee of Nine, the Chairman of your
Association's Committee being chosen as Chairman of the
joint Committee.
Due consideration

foreign

given to the suggested plan for the organization of

was

the

Marine

bankers

would

and

others

some

program

be constructive

prove

its particular function to bring to the consideration of

was

under

foreign

all

trade financing

circumstances.

lie

which

emphasized

the report

the

have
be

that
of

Chamber

outlets

the

Board

the

But, after all, the

recommend

Nine

States

certain

prosperity

the

volume

mittee,
such
a

was

any

foreign

if organized

receive

Committee of

collectively

trade financing corporation,

corporation,

doubtedly

seeking,

way

nor

Association
that

unanimous

was

of that

individually,

but he pointed

Com¬

undue

risk and

All

able

speak strongly

the part of

foreign trade.
to

existing

foreign

conditions

customers

foreign

purchases,

have been

fields.

Our

and

social

for the need

of serious

American bankers and business

Under

grant

advantage of America's export trade.
V:V:>; ^"•

■

considerations

time

the

assuredly be done.

The

support.
such

conclusion

un¬

Sub-Committee of that Committee,

was

appointed

the

for

considering

purpose

consisting of

from each group,

one

details

of organization

and

personnel of management.

After

the

from

financial

made

very

its

well

recommendations

Committee

These

capital

standpoint,

Committee

in principle

which your
as

Committee
soon

Edge Law, with

Nine

its

which

the

latter

final conclusions

organize

view to commencing business

and

concurs.

practicable to

Sub-Committee

the

cor¬

January 1, 1921, and that this corporation should have an authorized
of one hundred millions of dollars, twenty-five per cent, of which

should

paid

in at the

sixty-day

time of

periods

the

forced

economic

welfare is

bound

with

the

personnel,

careful consideration
of

further

best

very

business

proper

our
un¬

men

that

recommends

activities

given to this matter, with thfe purpose
time, to the Board of Directors of the

possible for concerted action by individual
the country for the organization of the cor¬
as

might be well to emphasize that the Articles of Incorporation of
corporation should provide for representation on the Board of Directors
by Federal Reserve Districts.
in

the

operation of

the corporation

whatever capital

may

be sub¬

scribed from

any locality shall be devoted primarily, as financial prudence
suggest and attendant circumstances warrant, to the handling of ex¬
ports of a character originating in that locality, in order that the
would

prosperity

individual

communities,

recommend

preferable to

large

small,

may

be enhanced,

much

be, by the operations of the corporation.

may

will

attract

will

have

will

organization

group

the

of smaller

best

under

the

plan of

large corporation

the

readily create

market for its debentures by its avowed

will

locality, together with the prestige and influence of
the employment of

command

to formulate

high

educational

obvious

large

purpose

others,

given,

existing
A

that

such

the

wherever

degree of public confidence, and thus be able
among the private investors of Amer¬

plan

contemplated

and

earnest

feasible

and

unanimously

adopted

will

continuous

proper,

into

come

support of

most

sale

the

policy of

organizations,

the fact
a

that

wide

this

and

either

Chicago,

July

26,

1920,

by the

approval and satisfaction the develop¬
the Association in the foreign trade financing plan

presented by the Commerce and
on

Marine

Committee

and

calls

attention

development is making possible co-operation in the plan,
scale, by banks of the country, exporters and im¬

effective

porters,

manufacturers

bankers'

group

and

producers

generally.

Meanwhile,

after

the

at the

Seventh National Foreign Trade Convention at San
registered its opinion in favor of co-operation on
part of the business community in the development of foreign trade
financing, the Convention in its final declaration of opinions and recom¬
Francisco

last

mendations
be

efforts

interest
this

end,

characterized
afforded

expand

every

their

American

possible,

important

reasonable

services to

investors

"that

opportunity

foreign

banking

our

and

commerce

foreign securities,

by exporters,

When

the

necessary,

company,

the

would

issue

result

debentures

American

public,

against

it would

character produced in those communities.

be necessary

thrift

markets

order

organizations

could

the

likewise

that

reasonable

amount

might

in turn would be used to finance

products of

those

communities.

production

promote

The

that

order

suf¬

coming from the foreign markets

without increasing the price for such of those commodities

be needed

may

form local organizations for the

savings in'such securities

the

for

use

corporation

our

people. ' A

own

would

not

only

local

receive

investor

fair

commodities

indirectly.
the

sity

the

in the de¬

interest

production

which

return

for the commodity
interested directly or

was

/Xv;:.vyt-f -yy'

committee

notes

with

deal

great

satisfaction

that

the

press

country and the people generally are coming to recognize the neces¬
and increased production on the part of our people and

of economy

the seriousness of

not

providing for permanent participation in the markets

the world.

increasing their foreign trade by

estimated

The

that

people of England have lost

financial

every

operations

time since the armistice

within their

means

Great

Britain

power.

with

connection

its

foreign trade have been doubled in the past two years, whereas during
the war they were held down to a
minimum, this being in contrast to our
expansion during the war, succeeded by our present diminution.
Bankers
and

business

of Great Britain are
watching with great interest the
development of corporations under the Edge Law.
They are likewise very
interested in observing the result of the work of
your Committee.
An Englishman of
prominence recently said in commenting on the proposal
men

organize

large foreign trade

Committee,
promotion

that

delay.

American

the

English

Such

initiative,

invading

small

the

financing corporation,

proposal

trade

statement

corporation

foreign

would

institutions

protection
and

their

enlisting the

with united

bankers, manufacturers

and

action

other

pro¬

value

and

the

kind

securities,

In view

and

the vital

the

Commerce

ciation,
sion

the

same

and

name

Committee

Association

and

means

together with

chief

mestic
the
of
of

the

new

Under

Marine

which

that

world's
sound
a

for

challenge to

would

take

invested

only

functions

very

savings in

potential

very

the

investment
corporation

takes

essential

Our

own

the

over

its

are

presented

than

only

constitution
succeeded

functions.

by
is

the

suitable

Asso¬

Commis¬

the

belief
upon

co-operation

tljie

prac¬

development of America's foreign trade,

Association

President and available

new

Committee

Commission

not

Committee

activities

national

developing public

thrift

and

maximum

foreign trade but also to our do¬
rightful interests and our natural position in
our

trade

alike demand the continued
application and development
principles relative to the maintenance and reasonable development
trade which, it is estimated, will, for this calendar year,

foreign

approximate
Whether
now,

nothing of greater moment devolves

continuation

prosperity.

file with the

understanding of the absolute necessity
production

become

Marine

the maintenance and
a

taken

production

the

and

Association.

Commerce

present

England

successfully and

importance of the subject under consideration, other

additional section of this
report on
of

developed

management.

market.

one

recommended by

origin

such saving.

promote

described

its

plan there is not the slightest intention

annual

our

had

fairly

can

investment
of

had

would

resourcefulness

precent

part of the

fourteen

such

billions

dollars.

corporation

contemplated shall be

organized

depends

in the opinion of your Committee,
upon the bankers and business men
country.
We are satisfied that a corporation organized with a capital

of this

one

hundred millions of dollars will be successful

from

financial stand¬

point and will be

a potent influence in
promoting thrift and production, and
consequently result in material increase in the wealth of the country.

The Commerce and
tion of

the

Marine Committee submits

members of the Association that

formation

the Board of Directors of the American Manufacturers Export
Association had adopted at its meeting, in July, 1920, a resolution stating

and, moreover, that

extends.
the

debentures

foreign

ducers of this country."

Moreover,

his investment, but that interest
plus a wider market

May had

the

should

promoting

tical

through

Administrative Committee notes with
ment

suc¬

bankers and

need.

would

of ! further financing such export trade as would
various localities of the United States.
When

purpose

might be spared
as

campaign

called into being to meet

resolution

those

ficient commodities to supply the demand

those funds.

Associations, local Clearing Houses and local banking insti¬
having the campaign extend to the smallest communities.

operation with

offer

were

this,

the members

trade

business of

the

financing of the exports of
accomplish

activities

cessful

American

of
and

localities

State Bankers'

thus

contemplated

foreign securities carefully purchased
capital, so that it would have a maxi¬

its

a billion dollars.
These foreign securities
by sound individual corporations in any part of

issued

are

originate

ica, and carry it through on correct lines, with the
co-operation, as deemed
suitable, of the American Bankers' Association, its sections and
departments,
tutions,

corporation

It should be reiterated that in the

trade

such

need of such further assistance, it could be
readily
them that the proceeds of the
corporation's debentures gold to the
people of those communities would be used primarily, in accordance with
financial prudence and with due
regard to attendant circumstances, for the

without

give to every locality the fullest possible use of the capital and
coming out of that locality, to be employed in furthering the export

those

the

funds

corporation

L«w,

shown

encouraging thrift.

that

few. dollars here

debentures against

for the

naturally

this

expert talent.

will

only do

for the following reasons:

ones

our

to culti¬

much

efficiency attaching to large organizations.
give the utmost protection to the investor.

It will the
purpose

the

where

securities

Your

the

ability financially of about

world

its

•

immediately thereafter application be made for a charter, and sub¬
scriptions to the capital stock be received in such manner as seems
fitting,
opportunity being given the public to subscribe.

foreign

in the future of

That

mum

would be such
the

bentures

poration.

That

issue

invested from

most

commercial operations.

our

by the originator of the Edge Law,

amount of ten times

the

continued

ensure

do; millions

Edge

by it to the

the

soon

the

available for the executive staff.

men

recommended

That steps be taken
bankers and

committee

your

continue to be

recommending, in

corporation the
It

Under

permitted

provisions

this

their

restrict

effort

can

manufacturers,

our

necessary

This

upon millions must be supplied to finance
foreign buyers and to pay in cash the bills of American producers.

local

respect

view

has been said

there will not

and

commencement of business

accordance

Law.

With

the

steps be taken

under the

balance

Edge

that

are

poration

economic

unanimously adopted

recommendations and

about

suffer

in support

men

some

credit

awaiting markets and finance

the expansion

careful study of the matter in all its details, both present and
prospective, with particular reference to the success of such an organization
a

and

the

foregn trade financing cor¬
poration would be of great material benefit to the trade of the country and
that its organization should be undertaken with the least possible delay.
a

the

organize

that such

out

lines approved by the Association, would

undivided

Nine

member

any

foreign

of the corporation would be two-fold

purpose

vate

thereof,

will

not

Commerce

Committee

sympathetic

country

trade- relations with other peoples, and hence it is incumbent

Marine

the

foreign

when that plan
Bankers' Association.

particularly the fact that neither the American Bankers' Association, the
and

the constituent

United

the

products;

our

every

Association's plan

Bankers'

for

Commerce

of the Chamber's Conferring Committee

Commerce

American

maintained,

service

manufacturer

its meeting in Washington

only here in promoting increased wealth and settled
conditions, but also abroad where such service can be safely rendered with¬
out

Committee had been formulated by that Committee because of

feeling that it

the

render

trade

financing corporation, and in this connection it was made
plain by the Chairman that the plan which was developed by the Commerce
and

must
must

American

the

approval of the American

throughout.

Special Committee of Three

the

markets.

the deliberations of the Committee

Chamber

the

in each cane for the same purposes and having the same end in view that
prompted the request by the Council that the President of the Association
a

received

financing, and voted
of

assist

his foreign

Board of Directors

part in

consideration

Foreign Trade Council,

capital

the

such

tioning effectively.

the

for the

time

earnest

considera¬

opportune

for the

foreign trade financing corporation as contemplated,
there is urgent necessity for such a corporation, func¬
There exists for the bankers of America a privilege,

BANKING

SECTION.

opportunity and

duty in pointing the way definitely to the organization
corporation in co-opcration with manufacturers, exporters and
producers and others, giving to it that support which is abso¬
lutely essential for it to come into successful maximum operation.

such

combined judgment

for the Committee)

Chairman, Committee

Should
a

October

18,

report, members of the Association will have at their

full and able presentation of both

very

'::l>'
Chairman

Chairman of

1920.

Richard S. Hawes, President, American Bankers' Association, 5 Nassau
Street, New York:

cussion of his plan

My Dear Mr.

whom

Association

dressed

the

submitted

Irving

the

upon

Convention

the

American

subject

Stabilizing

the

Dollar,

Irving

floor

the

You

and

referred

The

Fisher

the

advised

the

delivered

convention,

his

and

speech,

offered

Mr.

tions

Watts

resolution which

that

the

has

been

voted

the

that

provided

with

literature for
book

own

The

Dr.

versity and
David
of

Plehn,

and against the

the

sor

same.

University of
Columbia

Economics,

formerly President of the American Economic

Cali¬
Uni¬

Association; Dr.

find

American

Economic

Association;
Bank

Dr.

New

Anderson,

notes,
The

credit structure

basis for

serve

such

if any effect on the
forms of

Reserve

credits

Friday, Professor
J.

The

Frame,

Economics,

Economist,

credit

Currency

Commission

has

given

We have examined the

and

conclusion

our

Mr.

for

lightening the gold

careful study

very

Professor

eigners,

foreseeing this,

behind the

would

draw

and

sell

The

Fisher's

represented by

sired

effect of

short,

before

the

war.

be wholly

would

adopt it,

their

balances

Government

could

if not impossible,

certificates will, in

though

Mercantile Trust

Continental

and

Commercial

Citizens'

President

position to

meet

gold

and almost

obligations

at the outbreak of the great war in

Professor

have prevented
claims

which

Professor

Fisher

destruction,
withdrawal

the

has

many

prices,

E.
First

made

and

for

have

could

millions of

been

prevented this

men

evil.

Had

could

not,

must

Professor

Fisher's

President

Report of Committee

com¬

could not,

therefore,

have

sympathy with this feature of the

should

this

memorialize

matter

and

HOWE,

Washington,
The American

BOWERMAN,
New

York.

Congress

determine

appoint

whether

Association

making

possible

Section

their

wide

have

has

had

C., Oct. 21,

various

1920.

committees

deal

distribution.

the

work

the

Savings

sought to

promote saving and thrift through the
savings banks which dot America from coast to

channels of the thousands of
coast.
It is

law

Bankers'

problems in agriculture, industry, commerce and finance.
The bank*
the .most important factor in
popularizing the Liberty loans and in

Bank

judgment is, therefore, definitely adverse to Professor Fisher's plan.
Our judgment is further very definitely adverse to the
proposal that the
Association

Company, Princeton, N. J.

Gentlemen:

Our

investigate

niNSCH,
Bank, Cincinnati, Ohio.

Ffublic and Private Thrift.

No change in the monetary sys¬

plan

Philadelphia, Pa.

and

plan.

Trust

and

RUE,

Secretary,

with

Bankers'

CIIAS.

GUY

were

commission

Bank,

National
E.

ness," by substituting the "staDilized dollar" for the dollar of fixed weight

American

Bank, Waukesha, Wis.

SARTORI,

plan involves the modification of contracts calling for

Your Commission is not in

Fifth-Third

Vice-President Princeton Bank

payment in "gold coin of the United States of the present weight and fine¬
and fineness.

FRAME,

LEVI

The

remedy for social distress and discontent.

Philadelphia National

of the

from production, the whole

The

Co., New York.

WARDROP,

therefore,

transportation,

Omaha, Neb.

Bank, Pittsburgh, Pa.

out of wasteful consumption
of

Bank,

Security Trust and Savings Bank, Los Angeles, CaL

President

plan

abandoned.

Tex.

SWINNEY,
Bank, Kansas City, Mo.

Board, Waukesha National

coun¬

the

consequently most

interruptions

bining to create great scarcities of goods.
tem

Waxahachie,

J. F.
President

111.

WEXLER,

National
A.

Chairman

Chicago,

DRAKE,

ROBERT

President

REYNOLDS,

Bache &

President Peoples' National

1914, it would have

and

have grown

war

demoralization

admits.

now

the war-time rise in

great economic evils of
and

Fisher

Bank,

country

other great

demand.

broken

dunlap,

SOL.

United States alone
no

been in operation

down,

J. S.

change.

de¬

WADE,

Bank,

Merchants' National

is in

National

pro

the

have the

Company, St. Louis, Mo.

o.
President

inter¬

this

re¬

MYRON T. HERRICK,
Society for Savings, Cleveland, Ohio.

GEORGE
President

fall, and for¬

make

forming the

opinion,

FESTUS

President,

the maintenance of

out of the question for the

Professor Fisher proposes,

the gold

now

raising the prices of merchandise.")

President,

gold redemption in periods of rapidly rising prices.
If adopted at the
present time it would perpetuate all the suffering which recipients of fixed
incomes have experienced as a result of the rapidly
rising prices of the

try

exchangeable.

are

these

lowering

Fisher's

Dr.

of
the

selves, but by credit instruments for which the gold certificates are merely
deposited as a small basic reserve, no slight change in the value of the
metal

An¬

the subject

plan,

dollar when prices

down

plan would also make difficult,

"dollars"

deposits

the

expanded to the extent they now are and as long as
bought and paid for, not by the gold certificates them¬

esting and ably worked out, is wholly impractical, and would involve grave
dangers to the stability of our financial and monetary system.
It would
lead to foreign drains on our gold in any period of
crisis, since the plan
calls

and

LUTHER

literature bearing upon

that

basic

exists, would have much
prices of goods and merchandise for which these various

Waukesha, Wis.

proposal.
con.

Michigan;

the

in the shape

in the value of

structure of

Banks

built up

deposits

York; Dr. H. P. Willis, Profes¬

University

hin¬

are

can

Banking at Columbia University and formerly Secretary of the Fed¬
Board; Dr. J. II. Hollander, Professor of Economics at Johns

David

down
a

these gold certificates them¬
I cannot, therefore, believe that a fluctua¬

month,

circulating credits

"When

merchandise

Dr. F. W. Taussig, Professor of Economics, Harvard
formerly President of the American Economic Association; Dr.
Laughlin, Emeritus Professor of Economics, Chicago University; Dr.

drew

would break

Reserve

has been

circulation

selves would be practically nil.

tion, restricted to 1%

Federal

Reserve

that

abnormal stress and would be

which

Federal
actual

Eco¬

Jr.,

satisfied

lodgment in the

banks.

the

University,

present system the Government gold certificates of fluctuating

Reserve

Hopkins University;
J.

guaranty could be had that normal condi¬

any

Kinley, President of the University of Illinois and formerly President

nomist of the Chase National

eral

Professor

of the

approve

Professor Economics,

Seligman,

our

for

instance, Dr. Carl

fornia ;

plan.

plan might work out if established

when facing such sudden abnormality of condi¬
produced by the war and which still continue.

member

Fisher's plan for sta¬

plan by leading economists and financiers who do not
For

the

help

reserves

published by MacMillan

briefer presentation and discussion by Dr. Fisher of his plan.
Commission was also furnished with discussion of Professor Fisher's

redeemable value would,, as do the
present gold certificates of definite value,

subject

Company, in which he discusses the subject with great force and clearness.
He has approached the subject from all angles,
raising and answering from
his standpoint all possible questions or
objections.
We also put before the
Commission

than

were

The principal literature in favor of Dr.

adverse

under

came

Federal

Council

also the dis¬
number of authorities, the great majority of

conclusions

permanently prevail,

practically all

Executive

bilizing the dollar is contained in his

Chairman.

FORGAN,

Mr. Forgan added the following:
Book, 'Stabilizing the Dollar,'

Fisher's

by quite

conditions

"Under

in¬

Currency Commission for report.

Commission

proposition.

tions would

whenever

presiding officer of the convention to refer Professor Fisher's

further

arrive

Dr.

under normal conditions and if

speech and plan to the Executive Council."
be

read

drance rather

Profes-sor
the

structed

have

"While it is possible that Dr. Fisher's

Fisher, of Yale University, ad¬

you say:

"After
arose

Dr.

1919,

convention

Annual

a plan
designed to accomplish such result.
letter addressed to the Currency Commission, written in Novem¬

In your

ber last,

the

HEPBURN,

Board, First National Bank, Chicago, 111., Vice-Chairman.

(In signing the report,

Mr.

Bankers'

BARTON

Advisory Board, Chase National Bank, New York,
JAS. B.

Report of the Currency Commission.

President—At

\ CURRENCY COMMISSION,
A.

1920.

Washington, Oct. 19,

com¬

sides of the question.

Respectfully submitted,

Commerce and Marine,

American Bankers' Association.

Washington,

the

part of this

mand

JOHN McHUGH,

strengthens decidedly our confidence in our own adverse
regarding Professor Fisher's plan.
Convention
print the data, herewith submitted and made

conclusions

importers,

(Signed

129

now

proposed to develop

bank service for the promotion of thrift

and the wider distribution

of property
ownership through a concerted move¬
by all the banks of the country.
The plans thus far developed are
based upon the idea that the national work will be
only such as is required

embodying the plan should be adopted by Congress.
We believe it is un¬
wise to agitate changes in the gold standard at the present time.
Pro¬
posals looking toward the creation of new currency systems divorced from

ment

the

gold standard
wild

extremely

retains

sure,

amount

the

But

gold

It is

simple.

dangerous

element of

gold.

donment

being made in

are

and

our

there

many

character.

places.

Many of them

Professor

redemption of gold,
are

altogether

and

many

the

proposals
creation

Fisher's

even

which
of

plan,

though

are

money

prolonged

place
Our

and

property,

pure

plans,

especially in Europe,

banking profession of the United States should
tenance

and

concern

in the United States and restoration in

rather than with

gold standard,

any

money

it is

effort to

our

and the

advo¬

view that

Europe Of the old-fashioned
introduce

refinements

and

novelties.
In

Fisher's
his

various

documents

bearing

upon

editorial

opportunity

break

for

therefore

control

political

structure

of the American system of private

and

the forces

all

political

the

guaranty
for

the

rewards

toil.

popularizing credit, for govern¬
place of private initiative, for

of individualism.

writer

asks

this

question:

"Do

realize

this

that

ever¬

lasting insistence on a 'new era,' or a 'humanizing of our affairs,' on this
claim of Tiettelr living-*
conditions,' is the inception of a tendency that
can
lead nowhere else than to its
logical conclusion in socialism or sov-

Professor

plan.
ably

wish

who

and

fullest

vised to consult
We call your

interestingly written,

information

and members of the Association,
regarding Professor Fisher's proposal, are ad¬

this book.

attention especially to the fact that the economists whom

have
are

submit

The plan itself is stated most fully by Professor Fisher in
book, "Stabilizing the Dollar," published by MacMillan in 1920.
This

book

and

the keystone

are

ietism ?"

appendix,-

equality

ownership,

however, is the thought that the banks have

the economic,

paternalism in place

the

itself with the main¬

banks

Against it must
ment

its effort to reach

citizen.

Back of the whole effort,
essential

America.

view that the banking profession should set itself firmly
any schemes of this sort.
The next ten years will see

contest between the defenders of sound

unsound

individual

aban¬

against agitation of
cates

stimulate and co-ordinate the efforts of each bank in

in varying

involve the

fiat

The
the
It

appreciate that there is

personal

editor

its

and

can

own

over

place for private banking, for private

under

either socialism

concludes

follows:

service.

its

It is
and

own

sovietism.

"The

if true to its purpose and powers,

inaugurate

success,

quoted

exemplar,

sciousness it does
and

finance,

above

United States,
is

munity
we

quoted and who have written ip opposition to Professor Fisher's plan
among the very ablest men in the economic gield.
The weight of their

We all
control

publicity agent.

typical

bank

has nothing to fear.
Size

gives

im¬

institution of the people and for the people

extend

its

own

educational

process

with

con¬

nothing in vain, nothing that militates against its growth
which by its appointments, helpfulness and system, it enlarges

BANKERS'

130
service

its

the individuals it makes |its

the community, through

CONVENTION.

loyal

friends."

which must reach the individual as the
unit in our democracy, is the promotion of thrift and saving.
Thrift and saving is more common in this country than is often alleged.
The number of savers is far larger than the mere number of those who
have savings accounts in our banks, for there are millions of small farmers,
small merchants, small manufacturers,
small professional men, and also
small investors and even small bankers, who practice the utmost thrift that
foundation for this service

The

savings may be applied to the increase of their business.
Let me cite a few statistics of thrift not included in orhtodox
On

30 last, the common

August

tables:

stock of the United States Steel Cor¬

Swift & Company have 23,000 employees

who

into private savings funds
For instance, the Baltimore & Ohio
10,000 savers, the Pennsylvania,
General Motors, and other corporations have similarly large funds.
But the recent orgy of extravagance has indicated very clearly the need
for more popular realization of the need for saving when and as the op¬
portunity presents itself.
And although we may hope that never again
will we have such a period of inflation in prices and dislocation of values,
the time is at hand when thrift and saving will be regarded as not only
possibilities but actual necessities.
Thus, to refer to the need for constant increase in our capital funds in
order to finance even the normal growth in commerce and industry, it is
to be noted that the main source of increase must come from the small
savers.
The present tax policies of this contry offer a serious check to
increased investment by the holders of large wealth.
As has been well
stated in a current magazine article, the growth in the number of small
investors will mean "the bubbling up of new springs of capital throughout
the country which will feed the creeks that in turn will be led by the
conservative investment banker into the great rivers of investment capital
that furnish the power to our railroads, our public utilities, and to the
organizations of various kinds:

$11,000,000 on deposit for

has

Railroad

the'country."
.
finds, therefore, that there are two important

industries of

committee

Your
to

been collected

have

millions

Furthermore,

and

any

dividual

such movement.
Not only must the lesson be
citizen and especially to the wage earner

aspects

taught to the in¬
has

who

not yet

governmental officials must also be im¬
pressed with a similar idea because of their example to the citizens and
also because of its demand upon the people's savings for purposes which
too often are neither wise in themselves or economically handled.
found

at this time to more than mention the imperative
expenditures by all branches of government, especially

not our purpose

need for reduction in

by the Federal.

/ /*.»■'
burdens upon industry and commerce, and upon the

The tax

billions of

otherwise be used to finance new industry and new
commerce,
is beyond all reason and in excess of the public need.
Not
only is every existing activity of government displaying a natural inclina¬
tion to increase in scope and expense, but the Federal Treasury is besieged
savings which would

by enormous projects for

social and economic service many of which will

appeal to this convention for endorsement.
The situation has been so well covered by a manifesto from leading busi¬
men

of England

"There

was

never

especially

interests of those whose margin of income over bare
slender and insufficient.
The proportion of government

necessaries

that I will quote a few words:
a time when public retrenchment was more urgent,

the

before
avail¬
able for provision for old age, for savings and business enterprise, irre¬
spective of all those with fixed incomes having sufficient margins for food,
expenditure to national income is several times as great as it was
the war, which means that a far smaller proportion of that income is

The Government appears to be quite

clothes and rent.
Week by

cannot afford.

employees' financial worth.
On the other hand, the bank

deny;

enterprise and reform.
curtailment
"After

much

end in itself. It is not the only means
but it is the most universal
and it should accompany every
No economic training is complete which does

regarded as a means and not as an
do

nor

that it is always the best means,

say

systematic saving in this country,

means

plan which may be adopted.

emphasize its value and use.

not

Plans

for

Work.

contemplating the de¬
activity.
The first may be classed as a general advertising campaign.
The second consists of the development of means for applying thrift
which shall reach every family in this country which has no bank account.
In doing this we may be stimulating many bank accounts which are now
dormant.'
V:'
The advertising campaign is intended to both stimulate new attention to
the subject of this report and also to effect concentration of effort by
all the banks in every part of the country.
It will not displace any work
now being done by banks and should greatly stimulate the demand for ex¬
pert service from the commercial agencies.
The campaign would co-ordinate and to some extent systematize the
local publicity efforts of all our members.
The ideal is to unite all banks
that not only may much of the present waste be eliminated, but that the
greater destruction of battery fire may be obtained as against the scattered
Committee

Your

Public and Private Thrift is

velopment of two distinct lines of

independently operated.
division for work, that of providing the means for

shot's of guns

second

the

stimulating and even for collecting the savings of each family unit, you
have doubtless been made familiar with our studies on school and industrial

in home economics departments through the Journal.
branches will any one plan of operation be applic¬

savings systems and
able

all

but

conditions,

provement and ultimately
garded

comparative study should lead to much im¬

have a few systems which can be re¬
even carry the stamp of A. B. A.

may

and which

standard

may

approval.
Conclusion.

Your committee has found the sub¬
of which were not anticipated.
impressed with the great responsibilities and also the large
opportunities which are opening to the members of the American Bankers'
Association along lines indicated above.
We have made recommendations
This

only a report of progress.

ject to involve great difficulties, many
But

are

with

officials

our

view

believe that

We would request every

member to appreciate the size of our problem both

cure

dictated

If the

to develop slowly, you will kindly realize

appear

Finally.
the

local position.

own

offensive power of an

The real

army

in the

than

rather

officers

sioned

campaign starts, no banker should worry about how it will
about its effect.
It will work.
The real problem is for each

When
work

rests with the host of non-commis¬

general staff!

Respectfully submitted,
S.

Fred

for the

William

persistence

this

subpect

public

expenditure

than

the

American

Association.

We have

already.indicated in

Thrift.

general

way

the relations of private thrift

knows

that the worker with

has become convinced that his
than
son

from
is

his employer's

bank account

wages

come

who

owns

home

out of what he produces rather

capital investment—he knows that no such per¬

things; first,

the proper sense may be said to depend upon
familiarity with our language and institutions, and sec¬

ond, becoming an integral part of our
think

that

it may, our

the latter

State

Committees

attendance

the

can

economic structure.

be accomplished before

We sometimes

the former.

Be that

public authorities being aware of their obligation to teach our

that the next most vital service is to induct
every alien into our system of private ownership and opportunity.
Both reason and experience result in the conclusion that confidence in
and familiarity with our American banking system are essential prelim¬
inaries to active participation in the American economic system.
As said by a recent writer, private bank accounts are the "rivets of
language to foreigners, we find

society."

among

Knox,

Sands,
S.

Heciit,

House,

of Committee.

bankers by the activities of the

Agriculture

Association

Bankers'

American

the

was

and the

evidenced by the represen¬

Agricultural Conference held last Monday in this

city when bankers, composing the presidents, secretaries, chairmen and mem¬
of

bankers'

agricultural committees

arranged

Agriculture

with

the

activities

cerned.

This

notable

address

was

which

followed

Secretary

delivered

every

State in the

Meredith, visiting various bureaus
of this country are chiefly con¬

interesting night session featured by a

nearly

bankers

the

from

interesting tour of the Department

Union devoted the entire morning to an

Dr.

Ball,

Assistant

Secretary

interesting reports from the chairmen of

Agriculture, and illuminated by

bolshevist.

Again, Americanization in
two

Commission

Agricultural

bers

Every banker is familiary with the wide variety of problems in personal
economics on which he is compelled to spend a large portion of his time,
lie

increasing interest aroused

tative

saving on the national welfare.

and

The

Bankers'
Private

Report of the Agricultural Commission.

organization in this country should speak louder or with more

of subsidies on

military and naval expenditure stringently restricted."

Bankers'

■

Sisson,

Members

particular commodities and services must as far as possible be abolished,
No business

organized by the League of Nations, which is now in session at Brussels.

Chairman,

McAdams,

Pulleyn,

Francis

Oliver

Strong,
B.

John

They state that in order to stop inflation of credit and currency, the first
essential is that "Government spending must be cut down, the conduct of

and

that every

being made to avoid the usual flash of such campaigns.

the International Financial Congress,

enterprise at less than cost and the payment

and importance as

individually.

plans

effort is

Rudolph

Government

the recipient

that

it is just as personal in its appeal

will understand that

present state of affairs except in the constituencies."
To the same effect is the joint memorandum signed by five of the leading
economists of Europe and presented to

Even though some

developing the plans and also in coping with them.
our
communications be in printed form, we trust

in
of

Thomas

there is

of this work for a

effective organization

three-year campaign.

This very fact lies at the root of the whole diffi¬

consideration

accumulation for

account is a means of

needs and

emergency

expenditure will be undertaken.

infrequently
in excess of

for enabling a future selection of investments
according to the then existing conditions.
Systematic saving creates a
moral obligation with the depositor, whereas an installment purchase even
of loan association stock creates a contract liability which too often is
not understood and which may turn the individual's surplus into a deficit.
The bank account as a means of thrift and saving, therefore, is to be

both

With this attitude of mind it is hopeless to expect that any serious

culty.

beginning of the

operation and irrespective of the future needs of the saver.
Not
such a contract involves the assumption of liability, which is

believes they are acting for the general good, we

but they seem to he convinced that their mission in office
think out how they can spend the public money on vast projects of

is to

investments.

the numerous systems of installment
fixes the object of saving at the

investment

member to fill his

"That the Government
not

collecting savings will each have an appeal so different
of funds will be discovered.
the savings bank system be displaced or made less

essential by any of
installment

for

will

neither

unconscious of this.

week, month by month, the taxpayers' money is poured out like
to have merit, but which the country

water in schemes which may appear

sources

new

But

our

is the only efficient or the

for saving and accumulation.
Furthermore,
experience with war securities, distinct systems

In neither of these three

Public Thrift.

ness

that

and

promoting

place to begin, but our

It is

demonstrated

means

the

poration was held by 90,952 persons, an increase of 17,496. in the past
year and an average holding of less than 56 shares each.
Many corpora¬
tions have made and are making large sales of their securities to em¬
ployees on savings plans.
are also stockholders.

desirable

the bank account

that

contend

not

only

the committees.
I wish that every
of

member of this association might have the opportunity

participating in the tour of

were

tain

most

that

scope

the department and night

interesting, instructive and inspiring, and
every

bankers'

association represented will

session.

They

result I feel cer¬

greatly

increase the

of its agricultural committee's activities.

Bankers
woven

are

with

thousand

beginning to

see

that the business of banking is closely inter¬

the

conduct

the

thirty thousand

the

fanning business and
banks

of this

that,

with twenty

country situated

in rural

communities, the safety and the prosperity of the banking business depend

largely

upon

Association

the safety and

who

were

success

fortunate

enough

agriculture.
to

hear

the

The members of this
magnificent

address

BANKING
•delivered

last

tunity to participate.
recent

haps,

which bankers have

wonderful

agriculture

prosperity,

not

essential

America

oppor¬

It is the mission of your

which

bankers

best

The

farmer

than

Your commissicjn has been
doing this by formulating and printing plans for the organization of State

and

county committees

assist

the

forty-eight Bankers' Associations; but urging the appointment of agri¬

cultural

can

committees

perform this service.

agriculture; by constantly keeping in touch with

State

where

associations

work

kind

this

been

bution

official

our

Bankers'

The Banker-Farmer, which

magazine,

Agricultural

authoritative

Committees

brings to the
from

messages

the

State

committees

individual bankers,

and

suggestions for agricultural work

which have been taken hold of by thousands of banks all over the country;

which has been conducted for the sole

magazine of propaganda,

of arousing
Will

the bankers' interest in
not assist

you

membership of this

forth

who have found

real

members

to join

country,

with

making the American Bankers'

methods

by which

you

with

whose

forces

by which

way

have

you

community, which,

You ask, what can you

Well, let
toward
of

cause

materially curtail

investigations,

plant

industry,

combating animal diseases, etc.
tions

these purposes

for

But

this

is not

confronted.

that

the

19,

work

"It

may

Meredith

wrote

true,

you

letter

chairman

the

reached

stage where

service

unless

thousand

outside

greater than

closing
the

service
to

taken

regular

our

engage

serious disintegration of the

afford

staff

relief.

resigned

compensation

of the employees,

some

other

the

three
*

why the other data should not be used in

it would
any

way

list

Bureau of

Industry

experts,

Markets,

and

Forest

be best

but there
that

you

of the most valuable

including the chief and fourteen specialists in

dozen of the best

Service,
servants

chemists,

men

soil

Plant

experts,

the Department of

Industry, Animal

road

experts,

Agriculture, who

sixty

the work and
their

of duty that has kept many of these men and women
it,is time for the American public to awaken to the fact

who

direct

the

scientific

thought of the nation should receive

adequate compensation for their services.
itself clearly on record in

I hope this association

this connection and

Committee of the American

will put

that the Federal Legislature

Bankers' Association will take vigorous action.

Our members should be circularized and
every banker in this country ought
to be in behind his Member of Congress in order that this
great department,

which

dollars,
What
You

increasing the wealth of

can

You

can

adequately

our

country by hundreds of millions of

maintained.

help to develop the dairying industry.
organize a Boys' and Girls' Pig Club.

Calf Club.

Sheep Club.

an
a

You

Oats

make

Distributing

farmers'

Your

headquarters for

rest

room

your

for farmers'

account

books

already been distributed by
farmers'

encourage

influence

can

much

short

You

can

assurance

ourselves.

The

produce

can

fair profit, there

which

resources

the

Federal

those sections

Reserve

the

system

all the

member

country which

receive

The

chiefly lacks—a knowledge

careful study

your

labor

farm

doing much to promote

selling of farm products.
and

problem, of which

sound sys¬

The work of the farm bureaus

support.
read

much these days, will, to

large extent, right itself when the profits of the farm

increased, thus

are

enabling the farmer to compete for farm labor.

Bankers

also

can

encouraging the
should

doubt

should

The

the

that the

banks

day of

the

power

kind

use

and while

great

care

for this purpose,

credit

farming is close at hand and rural

the

encourage

the right

machinery,

farm

the right kind

use

of power

men.

of the facilities of Federal farm land bank system should

use

helping to meet the farm labor problem

improved

study and

greatest

continue

assist

use

exercised

farming machinery by
studied

and

encouraged by bankers,

for the

proper

use

these facilities will not only greatly assist in the development of our country,
but will release funds now employed by rural banks which may well be
used

for

the purposes set

some

the

campaign to

farm

owners

decrease

forth above.

farm

tenancy by encouraging the sale of
worthy tenant farmers and in the effort to make permanent

lands to

out of tenant farmers

opportunity for real service is offered

country bankers.
The

consolidation of
and

which

ures

These

campaigns for

but

few

and| increased appropriations for rural

better system of rural roads

well engage the

may

are

rural schools

the

all meas¬

are

thoughtful consideration of bankers.

things, my friends, which

are

embodied in

the work of your
bear

agricultural committees.
To bring the influence of bankers
these important subjects is the mission of your agrcultural
We have gathered here this week in conference with the forces

upon

commission.
that

the

direct

agricultural activities

hope

State

committees.

shape

plans

new

tion should call

similar meeting

meeting, if

you

with

who

the

those

ings of this

nation,

vigor

for

and
the

the land
the

and

the

were

Work

plans

designate

and

agricultural

forces

agriculture

to hold meet¬

were

where

com¬

State.

your

county,

officer

development,

the

State

campaigns

and

appointment
if

every

active

rural

bank

employee who would specialize
then, indeed, would the hopes

agricultural

commission

begin

reach

Association
sell

the

suggest that each State associa¬

agricultural

every

of your

purposes

Secretary Meredith, in
"to

some one

fruition.

services

notable address delivered before the

New York,

the

last March, said it

the

in America than

women

result

conference of your agricultural

commission,

our

agriculture

guidance

out and if these plans could be followed up, as has been

suggested

committees

are

was

Merchants'

going to be his

Department of Agriculture

purpose

and

men

using it."
in conclusion, that it is our purpose to try to sell the services
agricultural commission and our agriculeural committees to more

May I
our

now

say,

bankers than
to

let
a

kind at your colleges of

be mapped

constantly

the

at its college of agriculture—a banker-

will, if not
direct

of
new

agricultural committees of the bankers' associations

could

gain

and

In like manner,

farmer

are

now

using it?

We want you, the bankers of this country,

these

things which the Department of Agriculture is calling upon
Use your influence in your communities—the greatest influence
possessed by any body of business men in the country—for the
encourage¬

you

to do.

ment of

sound system of national

agriculture.
Constitute yourselves part¬
science, the forces of the United States Department
not only vastly increasing the wealth of the na¬

of those servants of

ners

Agriculture, Who

are

tion, but whose noble efforts

are

doing much to promote the happiness of

America.

insist

Report of Committee
Federal
as

bank

This

by—

upon

Federal Reserve Membership

Reserve

Membership

Campaign

Committee

came

into

war measure.

assets.

was

estimated that two

thousands

these

committees).

the

agricultural colleges.
encouraging farmers to send their

any

join

possible because

by the Federal

Reserve

situation

methods used

For

this

has

been

Board

assistd

promoting the Federal

reason

the

work

the discharge at the committee.

amendments

intensified

the committee

enough food for their families and
requisite for bank credit.

hundred million

institutions

the

by the State

the

Federal

obtained.

were

Federal

Resreve

Bank

Act

Section.

increasingly difficult to

induce

considerable number of remaining eligible non-member institutions
the Federal Reserve system.

This

billion five

effectively meet the situation.

the membership of State chartered

farmers raising

for their livestock

would

Since the close of the war, it has become

agricultural
at

from this source

system approximately seven billions of such assets

became

secured

lobby;

wives;
(hundreds

courses

toward

farmers

boys to agricultural colleges.
feed

farmers

drifting from the farms into the cities.

men

The Federation of Farm Bureaus

Through

can

that

realize

unless

with that essential which he

tem of co-operative

should

Reserve

bank

your

Establishing

You

our

But

organization and business methods.

dollars of assets

Canning Club.

have

that

reasonable

some

placed at the disposal

business

State

Club.

Displaying agricultural products in

books

country

conflict with

The successful financing of the war required the
strengthening of the Federal Reserve system by a substantial addition of

Poultry Club.
can

with

co-operation for

supply him

can

being

Corn and Wheat

into

come

food products is absolutely essential

our

agriculture;

increasing tide of

are

The

Or
Or

distributing

American

the

Campaign by J. H. Puelicher, Chairman.

Baby Beef Club.

can

you

Or d
a

bankers

co-operative organization by

rural

do to increase the agricultural wealth of your community?
encourage and finance the purchase of pure-bred livestock.

can

You

may

need them.
In like manner co-operation among farmers in
apportion¬
ing what they produce to meet the demands of the country is economically
The farmer needs your help in this work, my friends, because
you

sense

posts;

those

marketing problems?

most

were

a maximum of $4,500 to a minimum of $1,600, who are now ob¬
taining salaries ranging from $20,000 to $4,500.
Gentlemen of the Ameri¬
can Bankers' Association, here is work in hand for
you.
The Secretary has
stated on many occasions that it has been
only sheer patriotism, love of

that

believe

banks

receiving

for the

their crops

sell

en¬

fit."

may see

mittee

times

who have left

this list,

eight

order

four

Perhaps

individuals

year

selected at random,

than

last

two,

employment.

names

follows:

receiving in the department.

were

give publicity

reason

Here

threatened with

employment

they

list of

not

action
of

time

success

under

men.

we are

some

members

was

inquiry propounded relative to the loss

marketing his products,

would

education

salaries.

receive adequate

that the Department of Agriculture is losing
In fact, the turnover in our personnel has

say,

of its most valuable

many

and

agricultural appropriations in order

department

answer

afraid that

home

should be restored.

Secretary

buying the farmers' products.

will be

in dyes,

It is of vital importance that appropria¬

by the department, the Secretary wrote

men

the

research

commission, relative to the conference which at that time

your

estimates, dairying and

crop

only difficulty with which this great department is

employees of the

August

Be¬

of its most important work,

some

entomology,

It is necessary to increase

advisement, and
of

the

itself.

Congress, the Department has been

especially that relative to market reports and
cereal

farmers'

the

influence

your

Agriculture

of return for his product.

bankers

other line of endeavor.

any

economical method of

There is

is pointing the

do is to lend

measure

are

better

the individual bank perform ?

you can

just

assistance

bankers,assist in the

high

will increase your profits.

Department

the

doing this

bankers

appropriations by the

obliged to suspend

been

there is

can

rob him of

needs

can

increase the agricultural wealth of

What service

the

this week,

conference

necessity,

do ?

maintaining

reduced

will,

you

Our great Department of Agriculture,

that the first thing

say

properly

been

can,

this

Association

clearly set forth.

are

It is

the country.

development of

do this

can

nothing visionary about this work.

your

bank profits.

thousand banks

the thirty

representing

potential force in the agricultural

The

of the

body.
The committees at best, can merely set
show you the results obtained by bankers

better farming means greater

out that

the

you,

Your

help

committees need the

State

work—can

programs

better agriculture and rural life.

the

and

by the influence of the country

sound.

in spreading the seed of our propaganda?

Agricultural Commission
entire

purpose

home

the Department

customers, the middlemen, who

own

De¬

partment of Agriculture and the land grant colleges reports of activities of

bankers'

your

have
•

and

direct representatives of

backed

the

agent

our influence in promoting the organiza¬
co-operative warehousing and selling organizations.
Many of us,
know, have been fearful of entering the field of marketing because we

has

activities of committees which
somewhat dormant; by encouraging the holding of the bankerfarmer meetings at the colleges of agriculture, which we have found to be
one
of the most stimulating agencies for arousing the interest of bankers
in matters agricultural; by the creation of
special committees on rural
education, on roads, on farm tenancy; and by the publication and distri¬
have

These forces,

work

county

your

him, my friends, by using

tion

been engaged upon; by stimulating the

not

How

the

are

the

the agricultural wealth of our country.
justly points out that increased agricultural production
necessarily increase his wealth and that faulty methods of distri¬

does not

agricultural commission to shape the plans by

with

do and which thousands

can

great constructive work by forming

farmer

bution frequently

enterprise."

please,

you

result

can

You

do much to increase

can

the

But

things which

doing

agent, who

Agriculture.

banker,

to the permanent

necessary

demonstration

but of all industry and all business

of agriculture alone,

already

partnership,

of business men, have it in their
maintaining and developing the

that is

basis

the

service

few of the

are

agricultural committees.

Secretary Meredith pointed this out most clearly in

than any other single group

render

131

but

are

bankers

to realize the tremendous scope of

must begin

telegram to The Banker-Farmer, in which he said, ."Bankers, per¬

power

These

Tuesday morning by that great man who presides over the

Department of Agriculture

the activities of the Department, in

SECTION.

not

your

dissatisfaction

Reserve

committee

Par

expending association funds.
j.

resulting

Collection

therefore

from

Plan.

presently dormant
I

and

recommend

PUELIOHER, Chairman.

Report of Committee

Formed

The

Public Relations.

each

of the American Bankers' Association:

Members

CONVENTION.

BANKERS'

132

the

with

idea

creating

better understanding between the

banks,

the

through

association,

and

with

Operating

not

but

with

Louis,

than

supplied

through

can

thousands

The

HOLDERNESS,

accepted

Nothing affects

and

dealing

finance—and

latitude

readers'

hundred financial

Statements

Assistant

appreciation

that

the

editor's

interest.

news

and writers have received a weekly

papers

them

from

gauge

most wholesome fashion.

that

indicate

they

only

are

too

and

well

press,

order

General

and
first

membership

members'

activities

and

council

Pinehurst

service.

meeting,

both

interest.

also

report
report

the

increase

the

designed

St.

this year's work was
its

necessity

Through

including

local

news

the

association,

that

information,

progress

for the association.

less

such

campaign

"Member
dred

carried

was

and

This

other

After

the

officials

the

news

cover

gives

and

attention

educational

work

Association."

can

devoted

Public

This material

its

Used,

long

the

list

with

the

hundred

those

national

jor activities has
We

ods,

but

grown

seek

not

Paul

line

the

six

associations

have

can

educational

field

fortune,

courted

ma¬

The

various

people in

Without

information
association

that

the

still

news

structive

our

sidered

23,000

ments

telling

while

they
want

not their

believe

was broad, constructive
the' bankers of this big

how

boastfully,

various

existence,

that

does

world

not

life i

court

least

reach

Let's

the

will

opinion
all

tell

that

phases

con¬

these

our

because

of this contact, are well qualified
bureau, with all due regard to depart¬
and sections of the A. B. A., holds the deep import, the
possibilities

future

Relations

such deliberations.

value

the

attention

association, that does

that

this

convention

general welfare, I believe

properly conducted Public

Council.

pamphlet prepared by the

and

Domestic

Commerce,

Bankers'

Acceptance

Reserve agents,

Credits,

com¬

co-pperating with the American
'O'.;.

;

Development of Bankers' Acceptance®,

Board.

Exchange

reply to
and

questionnaire emanating

problem
for

and

Charges,

representatives,

effort

which

has

consisting of

and

three

uniform

resulted

the

for

schedule

service

Service

Federal

acceptance

understanding

necessity

exchange
that

two

men—trade

clearer

believed

bankers,

eight months' time to

over

the

Committee

five

business

relieved

present

handling acceptances.

address by

for the appointment of

special committee has devoted

educational

Federal

Clearing House Section of the American
^

were made

and Collection

This

the

from

Progress with Dollar Acceptances,

Association.

Bank

Reserve
users.

the establish¬

for

collection

and

where

the

banks

charges

determine

make any

charge for this character of service, they may be depended
individually to make satisfactory arrangements with their respective
Arrangements
devise the

intends
eyes

constructive factor in the nation than

are

giving

news

the

focussed upon

ever

before.

with the serious

problems

affecting

us here to-day a6 a
Surely in this alone the

also

were

efficient

most

This

ances.

made

and

committee

the

for

economical

includes

four

appointment
method

bankers,

upon
cus¬

committee

Federal

two

Bank

Reserve

While this

users.

committee has rendered valuable service and made considerable
progress
its work, it has not submitted a

complete report.

the committee will

that

trade
and

acceptance

It is believed,

with

however,

develop and place at the disposal of the banks and
method

that

will

enable

labor

great saving of

expense.

The number

practically
are

users

handling trade accept¬

representatives, and four business men—trade acceptance

every

trade acceptance

users is increasing rapidly and includes
line of business that makes sales on the time basis. There

than 20,000 known users, and where the trade
acceptance

legitimately used, the results have been

very

has been

It has enabled an

satisfactory.

equal amount of capital to do
ened

the credit period,

a
greater amount of service, it has short¬
it has made collections more certain, it has reduced

the expense of operation,

bilized the businesses

both for the buyer and for the seller, it has sta¬
involved, and it has produced a character of strictly

liquid

trade

open

The

paper.

where

claims

and

There

impressed through the

Public Relations Committee has justified its existence.

Be
the

■

International

Problems in the

Arrangements

service.

Because the nation has been

Acceptance,

Council.-

Problems

con¬

councils

action

into

their

engaged in the

States.

that

national

our

features

highly appreciated,

This association

banking connections

and-who,

and

out to the

but knowingly,

Social

concern.

of this United

means

problems

whose

pleasurable

are

pleasures.

honorable

representative

everyday

efforts,

sent everywhere and

forth,

bankers

every

bankers,

to enter into

and

that

efforts—not

the

was

went

actions,

upbuilding by
consider

tackling the problems of national

were

minimized,

were

about

meeting of the Council

Should

Governor

Council.

Jerome Thralls before

press

places knew in advance about this convention through pub¬
any of our similar gatherings.
News of the Pinehurst

licity than

reflection

Deputy

York.

tomers.

notices have been issued weekly.
have co-operated freely in circulating these

associations

press

stories.

news

They

Principles and Practice, Chapters 1 and 1,

Trade

Principles

ment

this association.

formerly

New

Louis.

St.

How

the American Acceptance

Our

of Federal

Reserve

assiduously

developing such departments

Treman,
of

Convention

They Are and

Warburg.

Bankers'

Council

the

to
ex¬

own

Settlements, by Samuel F. Streit.

Practical

current value and yet be

The

the

di tributed

and

prepared by the Executive Committee of the American Acceptance

stories

and

opinion by the overworked propaganda meth¬
aid the proper public opinion as concerns the

furtherance of this convention,

publication

published

since

with

with the

committee of Federal Reserve agents in co-operation

Acceptance

understanding of banks, bank¬

apace.

and

touch

securing the

has

Annual

What

Acceptance

mittee

banking features

the

Bank

Case of the

Some

hun¬

importance of banking, its place in the community and the nation, and the
work of

mould

enlighten

view

Council

committee of

Term
use

Robert

Acceptances

using it this week

are

han¬

co-operation

through

accordingly got

and others throughout the country at its

Association

American

con¬

Bankers' Association has sedately refused to pay
of properly disseminated public information, although

power

with

The

Reserve

The

With
entire

the American

Council,

Bankers' Acceptances,

days with various forms of public relations, by people in all walks
of life, and is reckoned in the constructive efforts of most all
organizations.
Too

method for

the Committee determined that its

accomplished

Council.

Acceptances,

written

these

homage to the

acceptances.

economical

Report made by the Acceptance Committee of the American

Federal

ramifications.

that elusive mistress

opinion,

and

three hundred thousand pamphlets, including the following:

The

be obtained.

Two

bank procedure.

unlimited

satisfactory schedule of

handling

for

efficient

most

successfully

concerns

•

banking methods.

actually

most

material.

Bankers'

been

the

Acceptance

the

over

pense

out

completely

calculated to increase both the regard for and
ers

banks, business

contained to confine our treatment in this experimental
stage mainly to a straight handling of association news.
With greater
facilities,

charges

collection

careful survey of the situation,

American

with

machinery

valuable

most

The Washington banks

extensively.
have

and
devise

could

work

manner

supplied

have* advertising banks

Bankers'

responded.

what acceptances are, how

the arranging for two committees:

dling trade acceptances within banks and business houses.

mem¬

is given better attention than is usual.

selected

American

addressed

into

released.

committee,

results of far-reaching magnitude could

country,
A

builded

fifty-five

The banker in each city is considered

greater value, or

committee,

have been

enlarged

bell-wether,

community

can

application.

charged the Committee with the responsibility

its attention to the working out of

exchange

The

extended

have

special Istories suitable

State,

every

through

country

reliable

sidered

Committee, composed

by each member

adaptation

Convention

also

use;

Trade

representatives

reaching the

realizing

secretaries,

section

activity

Publicity

Greater

bers,

proper

One to give

largely experimental for the purpose of demonstrating

permanent

honest and

further

and

be used, why they should be used, and the dangers to be avoided

may

their

courtesy and co-operation.

every

various

the

headquarters,

foreign and domestic commerce—
consideration of every banker
helpfulness are dependent en¬

thoughtful

and

success

■

;

American

its duties fully convinced that

upon

to American

continued

Louis

necessary

York

Cal.

Thralls, Chairman.

bringing before the bankers the facts as to

they

of the

summary

preparing

issuing

innovations

stimulus,

study

its

upon

The

aid

careful

the

that

tirely

the

Committee

Committee entered

powerful

giving

deserves

and

aided

Although the committee office has been located at a distance from the
New

111.

Forty-Sixth Convention:

service

the| committee

relations,

Bowerman,

Guy

Secretary

months'

four

financial

the

upon

Ilawes, whose constant encouragement has been a

R. S.

President

the

cultivate

Co., Jacksonville,

acceptance method of financing is sound and efficient—is here to stay

the
-—is

extended and constant membership

The Journal, for

ori

largely

and in this respect we really owe them such

contact,

Farrell

MOREHOUSE,

Acceptance

Your Acceptance

relies

Association

Bankers'

the

unstintingly to the A. B. A. news bulletins.
American

CRABTREE,

Bankers' Association by Jerome

display of material used convinces that their columns were given over

The

Ark.

Guaranty Trust & Savings Bank, Los Angelee,

Cashier,

Report

people everywhere as the

Many have commented favorably in a news way on the service,

news.

Rock,

ELLSWORTH,

largely

secured,

was

Vice-President,

that

show

pleased at having a recognized and readily accessible source of association

the

Vice-President Hibernia Bank & Trust Co., New Orleans, La.

used,

here,

York.

technical that a reduc¬

many

have responded

These editors

service.

news

New

REM MEL,

Our

items

news

English for general understanding makes

into everyday

value—the

Nearly

publicity

Banking really is

form.

newspaper

doubly acceptable.

status

the

Relations headquarters

constructive

responsive.

exceptionally
part

Bank,

National

Chamical

St Louis.

;

being supplied with information in a timely way and

its features

tion

worth

dollars

by reason of their
in

Public

the

been

small

very

Zanesrille, 0.

JOHNSTON,

President

been

have

country

American

Vice-Chairman,

Little

the

newspapers

have

editors

only

seen

leading

the

Vice-President First National Bank,

two weeks with bulletins containing news of banks and of

exhibiting

clippings,
which

the

for

President, First National Bank,

the

office established at

regarded

of the important

one

SHARER,

in charge.

part-time secretary

650

every

association.

the

only

'' V :....
Chairman,

H.
St.

increasingly

consideraion

■

enlargement of this work.

B. A.

the A.

national

and

committee

temporary basis, still

should

relations

Association.

such that in thp judgment of your committee

continuance,

have been carried

activities

Committee

believe this

public

service

that the St. Louis convention had in its creation.

warrant a

only

greater

(Signed)

the work of this vast

limited budget and on a

year's accomplishments are
they

for

contact,

public

effective

served the purpose

has

regard

proper

Bankers'
■

and

public

treatment

succeedeng administration of

avenues

they

can

been

lodgment

credit

known

their

transactions
merits

and

out

into

the

many

some

complaint because of trade acceptances not

being

open

market.-

originating outside'of the

ances

brings

eliminates

upon

disputes.

has

purchased freely in the
find

acceptance

treated

in local banks where

investigations

the

seems

certain

that

trade

accept¬

leading financial centres will necessarily
the

small

preclude their coming into the

names

amounts
open

are

known.

where

market.

the

The

names

expense
are

not

BANKING
There

is,

however,

steadily growing demand in

the

market

open

bank

endorsed trade acceptances, and
where such paper is offered it
more
readily than the best single name commercial paper, even
though the latter yields from % to 1% higher return.
Every banker should remember that, although trade acceptances are

than single-name paper,

matter

such

should

lessening in the

any

The

acid

same

that

test

applied

credit risk

any

applied with equal severity to trade acceptances.

becoming

350

that

March,

whom

can confer,
as we note that on the present Commission
representative of the Pacific Coast and Far South, or the terri¬

Second—We
with

and

recommend

that

even

ourselves with

associate

.WALDO
SOL.

members of the Federal

System having applied for and acquired the privilege of accepting
to 100% of their combined capital and surplus.
These 249 banks alone

have

the

power

They had
June 30 of approximately 40.8% of this amount.

acceptances outstanding on

The total of American acceptances
of

non-member

banks, private

Report of the

houses,

The

maximum

System is

The

the

acceptance power of the members of

$3,197,470,000.

houses
whole

have

000

were

our

methods

There

practices

the

conservatively be used to the extent of $2,148,735,-

discount market thoroughly developed and the business

open

and

function

American banks approximately $3,847,470,-

acceptance power of

This power might

000.

the Federal Reserve

banks, non-member banks and accept¬

Private

acceptance power approximating $650,000,000, making

most

this

changed to

country

enable

the

bought in the

their

market

own

374 ;

operations for the year ending Aug. 31, 1919, $2,292,456,-

1920, $3,389,615,984.

They discounted

ing Aug. 31, 1920, $211,682,038.
The

Banks

December

figures

not due

any

their

in the

Such

the

in
to

the

June 80, 1919,

June 30,

;

acceptances

$255,564,000.

1920,
of

the

are

market

open

safe

and

sound

have

now

investment,

available

$65,000,000.
now

From

their

The

dealers

aggregate

the progress

throughout

the

firms,

investors,

United

since

States

whose

concern

one

individuals,

Jan.

resources

aggregate of

The Federal

less

and

The idea
at

will

America

degree

lending

been

Over

the

has

growing in favor and

the

power

close of

of the

maximum

the

system

acceptance

facilities.

progress

The

collateral and

take

interests

appointment of

this

country,

nations

the

leading

world.

With

there is urgent need for the
degree where it will

acceptances,

de¬

the

afford

with

coupled

discount market, is essential to
financial

and

power.

the commercial,
Committee

your

committee of three

the ensuing year.

use

open

subject to

this

the

the
in¬

and

JEROME

THRALLS,

indorser.
The

Bank

The

and

Economic

the

The

time since

that

date

been

has

Commission

the consideration

recognizes

that

its

first

of the present Federal

and

Bill

important

secure

soon

fail to

Several

for

these

work

First—Revision

Second—Tax
Third—A

of present

excess-

Fourth—The

Your

turn-over

excise

Fifth—Increased

earliest

progress

and will

Commission

tax

stamp

date

information

to submit

and

ing of

bers

the

having

views

Chairman of the
In

it will

meantime

conclusion,

the

proposes

helpful and highly appreciated if

subject

suggestions

offer

will

respectfully offer two recommendations:

which

Act,

au¬

Statutes,

regulating

and

ex¬

all

at the

13,

graduate

This

the

progress

extended

the

approved April

was

rates

dis¬

the basis of the amount of

paper on

accommodations

Federal
13,

Reserve

1920.

This

approved

was

signatures to circulating notes.

not

was

ap¬

Act October 15,

private banker in the privilege of being

than

other

two

non-competing banks.

officer

This

was

or
ap¬

pieces in commemoration of Alabama and Maine

approved May 10,

were

This

1920.

the Pilgrims

1920, and another bill authorizing the

approved May 12,

was

1920.

amending the Federal Farm Loan Act

con¬

possessed by the Secretary of the Treasury during 1918 and 1919.
has

Railroad
A

been

also

the

passed

which

Law, with

all

Merchant Marine Act

have

been

urging

the

1920,

and

companies

depositories

McFadden

the

familiar.

are

brief report will be made concerning

the following pending

Bill

(II.

11918)

measures:

give

Secretary of the Treasury authority to select State member banks
Government

funds,

and

report of this Measure to the House on April 28,

secured

favorable

It has been

1920.

the

trqst

offi¬

cially ruled that the Secretary of the Treasury at the present time does not

the

possess

robbery

reported

to deposit Government funds in other than national banks.

power

We have been
for

advocating the Gore Bill
Federal

the Senate

The

Good

passed

both
that

Bill

the

went

but
of

vetoed

was
an

removal

(fl.

This

favorably

was

amendment to

the President

unconstitutional

certain

June

Mr.

14441),

cover

as¬

enumerated

Good

favorable report of

officers

introduced

the

day

same

June

for the

provision depriving the Presi¬

omitting

through the House the

Senate upon

bank.

1920, with

others transporting property to or from the bank.
9783), to provide a national budget system,

Congress.

subject

same

May 4,

(S. 2903) to provide punishment

member

contained

power

(H.

Houses,
it

Reserve

saults upon messengers or

charges by

proviso

the

Federal

Our

and

another

objectionable

and is

its Committee

provision,

in the hands

now

vested

bill

National Budget.

Brand

bills

the

Bill

has

3543 ;

mem¬

the

This

and

bill

eliminates

regulated

against

shall

made

the

bill, introduced by Mr. McFadden of
eliminates the last-stated proviso only.
Nei¬

yet progressed out of committee.

for

embezzlement

7589), to provide

national

bank

funds,

and

the

clean currency, but neither of these

yet been reported.

II.

advocated

10403)

losses

in committee.

13259)

charges

|have been supporting the Phelan Bill (H. R. 8118), in¬

penalty

(II. R.

banks.

determined

such

Another

12646),

has

shall be

that

and

banks.

non-member

and

charges

Board

Reserve

committee

creasing

member

such

that

Reserve

Pennsylvania (II.

our

such deposits

securities

Association

are

the

Calder-McFadden

to encourage bank deposits by non-resident

have

charged
also

been

from

taxation;

off but

not

also

sold.

Bills

aliens

to permit

These

bills

advocating the McFadden Bill

to amend certain sections of the Estates Tax Law

inexpensive court hearing in event of dispute.
on
Ways and Means.

de¬
are

(H.

to pro¬

This bill is still

Committee

The bill introduced by Mr.
the

write

1919.

cerning amount and payment of loans, denominations of jbonds, signatures
making provision for voluntary liquidation of joint stock land
banks, and extending through 1920 and 1921 the bond purchasing power

its suggestions' in printed form to the

Commission fully and frankly.

Reserve

14 of the Federal Reserve Act by giving the

Several bills have become law

vide for

members of the Association and ask the expression of their opinions.
In

Revised

5200,

S-fay 26, 1920.

duction

;

holding lands; and
data

Federal

coinage of 50c. pieces to commemorate the 300th anniversary of the land¬

still

the privilege of

the

1919.

by exempting interest

corporations

tax;

tax.

is securing

practicable

borrowing bank.

Other bills

incomes

corporations to do foreign
the Federal Reserve Act.
This was

power

discount

by including

Centennials

(S.

rates and schedules;

undistributed

sales

pres¬

Federal

charged for each class of

June

proved

have been suggested, among them;

evils

statement of the status of

amending the Interlocking Directorate Act (Sec. 8,

1914)

prodiice large returns.

cures

its proceedings to
Convention will

corporations to conduct foreign financial
approved September 17, 1919.

Board

ther of these bills

taxes, and believes that the

they tend strongly to discourage initiative, retard

report of

this report to the

approved October 22,

was

and
the

director

the

profits tax and the present heavy sur-tax on incomes are most objectionable
in that

Federal

the

1, 1921, national banks, irrespective of capital,

permitting engraved

proved

Federal

impossible to

most

auxiliary,

giving legal tender quality to gold certificates.

change

the American Bankers' Association:

Policy Commission was not appointed until September 24,

brief

its

A bill has been introduced by Mr. Steagall of Alabama
(H. R. 12379)
amending Section 13 of the Federal Reserve Act relative to reasonable ex¬

at a meeting, and hence no definite action could be taken.

quorum

detailed

25a of

amending Section

December 24,

which

Convention, by Waldo Newcomer, Chairman.
of

This

Bill

the

Report of the Economic Policy Commission to the

Members

and

1919.

Section

was

Reserve

to be

count

the

24,

amending Section

bill

advances

this

Washington, D. C., October 22, 1920.

This

bill

Federal

dent

Chairman.

STALEY,

ROONEY.

and

spring and

for the formation

to January

reason

Respectfully submitted,
JOHN

Legislation,

loan limit of national banks and amending Section 5202 by
removing from the limit of indebtedness, liabilities created by indorsement
of accepted bills of exchange payable abroad and actually owned
by the

the

recommend

the work during

Federal

limited amount of stock in

The

our

view

financial

would

to carry

full

last

amending

operations.

this feature develops the

and which may exceed $6,000,000,-

proper

commercial

importance

dustrial

herself

current year,

comprehensive and well-developed

growing

thorizes

There

.j,\.

establishing

among

made

December

bill

opportunity

financial

velopment

future

The

strengthened.

and

before

is being availed of

call against acceptances

balance of from $4,000,000,000,

trade

This support

HINSCH.

thereto,

giving splendid support to the de¬

the market develops.

money

rate is

be
now

commercial

000

less

have

discount market.

open

preferential

market

Reserve Banks

of the

CHAS.

RUE,

Legislation

banking, constituting Section

corporations and banks

1920,

and energies

$1,380,000,000 of acceptances.
velopment

Council

Edge Bill

over

market

$100,000,000.

discount market has dis¬

open

WADE,

REYNOLDS,

the Association is more particularly interested.
special interest to banks which have become law during the
Congress are the following:

Bill

that is being made in the development of

market

might he said that

Federal

Bills providing for 50c.

being applied to the development of the
resold

extent

acceptance

about

ARTHUR

general in its nature and confined to

approved

into

able to make selections satisfactory

are

and

converted

the

STALEY,

Bills of

names.

the

counted

acceptances

the

now

are

can

England savings banks alone

and

denominations and

evidence

that

reserve

houses

averaging

holdings investors

maturities,

real

York and New

invested

discount

portfolios

carry

but

The New
funds

those bills in which

regarded

now

investors, individuals, firms, corporations, bankers and others, not only as a
cash within 48 hours.

bills

market aggregating $233,519,-

open

the growing ability

conclusively
acceptances.

increase

purchases

The Federal Reserve Banks held

31,j 1919, $405,339,000

show

bankers'

time,

one

Banks

Reserve

much to the

restricted

having

acceptances purchased

absorb

by the Federal

purchased

Chairman.
FESTUS

tending the

■

outstanding

acceptances

short maturities.

bankers'

These

total

operations

Reserve

of very

000 ;

the

market

open

Federal

increase

their

volume

NEWCOMER,

Committee

warranted.

fexecutive

the

1919, $14,922,634; and for the year end¬

ending Aug. 31,

year

sion

ac¬

open

for the year ending Aug. 31,

during the

Committee

The

market and discounted, increased during the year
about 33%, while the volume of acceptances issued and outstanding have al¬
most trebled since
March, 1919. The Federal Reserve Banks purchased in
paper,

or¬

Legislative Council, have given due attention to matters of Federal legisla¬
during the past year and taken such action in particular cases as occa¬

ent

The holdings of the Federal Reserve Banks of this character of

ceptances.

co-operate

tion

system

satisfactory way.

outstanding about $1,150,000,090 in American bankers'

now

approxi¬

was

mately $975,000,000.

ance

confer,

by Fred Collins, Chairman.

■

outstanding at that time, including those

banks and acceptance

committees of other national

WEXLER,

LEVI

$1,275,860,000.

accepting to the extent of

authorized

Respectfully submitted,

was

Reserve
up

studying this question.

are

there

1919,

Their

approximately 500 accepting banks, 249

with

tee

there is

tory between St. Louis and the Pacific.

aid in

accepting power
the aggregate $451,265,000.

They had accepted

that in view of the policy of
restricting the number to seven
incoming president be authorized to appoint an advisory commit¬

the

ganizations who

valuable

accepting banks in America.

$1,027,275,000.
have

and

and import business.

export

about

now

never

vention and

analyzing the condition of the acceptors, drawers, and endorsers
paper.

Bankers' Acceptances are
the financing of our
were

there should

133

First—That the appointment of the Commission be
approved by the Con¬

for

moves

better

SECTION.

provision

reside
within

within

that
the

favorably
to

fifty

the

directors

national

by providing the alternative that they

twenty-five miles of

reported

the radius

Rodenburg of Illinois (H. R. 11307), to amend

three-fourths of
State

the bank,

January

miles.

28,

although

1920,

with

bank
may

must

reside

within another State,
an

amendment

was

increasing

bill

CONVENTION.

BANKERS'

134
14386), amending Section 10 of the

(If.

Federal Reserve Act,

provide a permanent bank building in
Washington was reported to the House on June 3, 1920.
The Plitt Bill (II. R. 12721), abolishing sub-treasuries, which was re¬
and

Board

the

giving

power

ported to the House with amendments on February 25, was on June
definitely postponed.
\ •
A bill of Senator Smoot of Utah, removing the tax exemption from
land bank bonds, was reported

stock

bill

(II.

Iowa

Green of

Mr.

It amends the Act in

in the interest of simplification, but among

certain particulars

joint

without amendment December 8, 1919.
R. 14198), for simplification of the

passed the House May 27, 1920.

Revenue Act of 1918,

1 in¬

otlher amend¬

in case of property
members of our Asso¬
This phase of the bill is being carefully looked

regulates the basis of determining gain or loss

ments it

acquired by gift in a way which the Trust Company
deem

ciation
after.

improper.

by Mr. Goodykoontz of West Virginia (H.

Bills have been introduced

banks to member banks of 2%
interest on daily balances, and by Mr. Nelson of Wisconsin (H. R. 13228)
for 3% extra dividends on paid-in capital.
These bills were considered at
the spring meeting of the Executive Council and the subjects referred back
to our Committee without action one way or the other.
These bilLs have
for the payment by Federal Reserve

progressed out of committee.

not

eral

Your Committee is

that

cate

conjunction

Legislation,

the

economy

bill

excise

introduced

been

has

Seven might conflict in some
respect with the perfecting of the committee's report, we, therefore, make
no
recommendations at this time, believing it better to wait until the
suggestions made by the Committee of

cific

mittee be

$10

per

upon

ounce

of new gold. This
bill was discussed at the spring meeting of our Executive Council and a
special committee of three appointed to investigate the subject and make
a report
thereon.
The bill is still in the Committee on Ways and Means
of the House.

capital and sur¬

provide for branches of national banks having

bill to

million dollars or more in cities of more than 100,000

one

population

1919, with an amendment making the Act
apply only to cities of more than £(00,000.
On January 27 the House
Committee voted to report this bill favorably, but on January 31 it re¬
versed its action and voted against a favorable report, 7 to 3.
Our Com¬
mittee on Federal Legislation are on record as opposing this bill, and it
the Senate in August,

passed

be regarded as dead so far as this session of Congress is concerned.
Soldiers' Bonus Bill (H. R. 14157), cited as the "World War Ad¬

may

The

Committee

continued.

McFADDEN,

number

vorably

bills in

There are numerous other bills affecting banks
progressed beyond the initial stage.
These have all been
digests issued under the auspices of our Committee and

unfavorably.

have not

which

general outline has been given concerning the status of
which our Association is more or less interested, fa¬

summarized

M. A.

trade financing corporation

foreign

wherein

States

position will be permanently,
strengthened by the establishment of a nation-wide foreign trade financing
corporation by means of which bankers, in co-operation with exporters,
manufacturers and other producers,
can
effectively further the national
country's

the

recommended

of the comparatively few

in view

but

Association;

our

and owing
passed
year is the Uniform Warehouse Receipts Act, which has been passed
by the legislature of Mississippi, and a law which has been passed in New
Jersey, embodying the provisions recommended by the Association relative
State

regular sessions this year,

have held

legislatures which

conditions, the only recommended measure which has been

other

this

Banks.

bank

examinations

Whereas,

recommended

been

therefore be it

the Association,

request

outside of the measures in which

1920.

year

especially interested, and attached to this report as an
of State legislation affecting banks passed

summary

and if it appears advisable and practicable, to appoint from their
committee to take steps, in accordance with this plan, to form

organization with an authorized capital
responsible and thoroughly efficient personnel.

financing

trade

foreign

and

$100,000,000

vV-VVv

Commissioners

by the
State

such

instruments,

duty

draft

their

annual

deals with this matter

meeting of

our

pay

impracticable

State Laws, at their
due consideration to the subject and re¬
Commercial Law, with instructions

conference.

bring it before them for
of the General

The report

at length.

Council be

Committee in conjunction iwith the State Legislative

requested to

chartered

institutions,

eral

law,

approve

in the various

enactment

legislation to be drafted and recommended

States, containing a

similar to that

establish

foreign

grant of power to State

granted national banks under

branches and to

invest not

Fed¬

exceeding 10%

capital and surplus in the stock of corporations organized principally to

engage

in international

approved by
attention

foreign banking.

Council

the Executive
our

and

The above resolution has been

the matter will

receive

the

due

Committee.

Report of the Committee of Seven

the

American

Your
ways
to

Bankers'

Committee

and

devise

effective

means

plans
and

Seven,

for

work

their

can

has

been

program

tion.

very

encourage,

among

year,

suggest and develop,

associations and
the end that more
for member banks,

activities

ciation held
we

definite period

majority of the State
was

set apart on the

of its officers was on hand to define plans and pur¬

in each instance,
supported by the State officers representing the American Bankers' Associa¬
tion.
The effect of this was uniformly successful, and the large gains in
A. B. A. membership are traceable in a considerable degree to the better
understanding that resulted from such discussions.
We believe that such
poses

of the National Organization, and its speaker was,

the Asso¬

creating the Committee, adopted by the Convention of

resolution

compilation of a text

First, to arrange for the

instructed:

were

By the provisions of this resolu¬

September.

Louis last

St.

Banking and Finance, suitable for use in the public schools of the United'

the general pub¬

States; second, to devise plans looking to the education of
lic in matters
The

pertaining to the

Committee

subject.

same

in the resolution to
present to the Association for its approval a carefully

interpreted

that it should

mean

the

instructions given

arranged plan of education, calculated to correct many false ideas now so
accepted,

generally

to create

better understanding

banks and their

functions, to broaden the service of banks as a result of such better under¬

standing, and thereby promote the industrial and commercial welfare of the
country as a whole.

meeting, the Chairman communicated with all State Super¬
in the United States and its possessions, with the

Prior to the

intendents of Instruction

exception of the Philippine Islands, advising them of the purposes we seek
to

accomplish.

our

then

Forty replies

were

Of these, four only objected'

received.

employ

proposed plan to

special text-book on Banking and

nying the importance of the subject.
would

at this

the

of
we

time

almost

who

have

the largest cities

declared

that

in this work.

there

are

texts

the question of

stressed

first

lished

and

thought

was

these

have
of

course

opinion,

with

inasmuch

everywhere to adopt
for their
more

use.

general,

present

needs.

one

are

can

of the

success

several texts

confident that,

induce

texts
with

once

authors

now
our

soon

pub¬
ideas.

became

in popularity, and that

desired most to stress

it, the plan most certain of

revisions

the study of elementary

economics in the public schools was rapidly gaining

some

aims.

all

advisers,

our

obstacles too difficult to over¬

present

therefore decided that,

our

accord

part,

These texts, how¬

treat the subjects we

disregard

one

plan

would

treating

all

and banking.

our

advisable
written

this

high schools approxi¬

use

accomplishment of

assure

the features of that study which

part

of their inten¬

text-book, the Committee

this is fortunate,

sense,

books, in

seemed

discussion

that such

apparent

for

economics,

investment

money,

fully enough to

endeavor

careful

come.

None

prepared

now

not widely used.

desirable.

wish

Superintendents of

elementary

the subjects of
are

City

fourteen

in the country have written George Allen

devoting its attention to
twelve

addition to the State Superin¬

themselves,

features of the study which

We have been assured of hearty

extensively treated.

by educators everywhere.

co-operation

discovered

'those

including

principles of conomics,

wish to have

tendents

are

finally adopted by the Com¬

received from the large majority, it is clear that
universal demand for better understanding

From the replies

there is

but not de¬

is doubtful if any of these four

present serious objections to the plan

mittee.

After

for the/use of those representing the American Bankers' Associa¬

In every case one

Gregg Publishing Com¬

Ginn and Company, and the MacMillan Company.
Committee directed its attention to the problems presented by the

The

least,

bankers'

accomplished

encouraging to note that in

during the past

Frank A. Vanderlip, Mr.

Mr.

Page, Editor of the

representing the publishing houses of the

Brown,
pany,

mately

begs leave to submit its brief report.
conventions

present with the Committee, were:

Princeton University,

"World's Work," Mr. George Allen of the
American Institute of Banking, and Messrs. Pelow, Hodgdon, Sorelle and'

ever,

appointed to
co-operation

co-ordinating

beneficial

George, Chairman.

Convention:

for better

Kemmerer

Arthur

first meeting at the Association'

held its

in attendance.

one

tion to co-operate

William

'•

Finance, pleading as an excuse already overcrowded curricula,

Council, held in the Spring of this year, it was resolved that the Executive
for

of.

Chairman.

Kaufman,

Education

Those invited to confer, and who were
Professor

Uniform

separate statute upon the subject and

Counsel
a

gave

relieve them of an

and

Commissioners

The

back to their Committee

consideration

risk

undue

from

inquiry.

same

of a draft of statute for
the personal use of fidu¬

Laws

adequately regulate

annual conference in August,
ferred

State

Uniform

will

to protect the banks which receive on deposit and

which

enactment

ciary checks

Committee

Your

during

;V
\
in the attempt to secure the recommendation

We have to report progress

of representative bankers and business men

number

adequate

meet,

number
a

Association

the

Bankers' Association, in convention as¬
the Commerce and Marine Committee, and
is hereby authorized and empowered to

American

the plan of

approves

President

the

That

Resolved,
sembled,

of such an organi¬
by the Committee on Commerce and Marine

plan outlining the purposes and functions

has

zation

tion

Association

appendix is
the

Federal Reserve

legislation affecting banks has, however, been

passed this year in the different States,
this

members

company

■

considerable atnount

trust

America's foreign trade,

by maintaining and effectively developing

welfare
and

the

been held of legislation

have

sessions

trade

foreign

headquarters in New York City on March 11, 12 and 13, with all members

during the past year to the promotion in

legislative

Approved.

Trade Financing Corporation

Foreign
Whereas,

but

different

adopted Oc¬

was

Report of Committee on Education by

Traylor, Chairman.

been given

has

Attention

Regard to Cotton

tober 20.

State Legislation, by ~

KEYSfER.

approving the organization of a $100,000.-

The following

000

Report of Committee

W.
F.

Financing.

is not necessary in this report.

reference thereto

specific

with

Convention

Action

GOEBEL.

W. HYDE,
STALEY,

GEORGE

GRAETTINGER,

HAYES
P.

Chairman.

GEORGE,

WILLIAM
M.

Senate.

Finance of the

above

the

May 29 and is now in

Compensation Act," passed the House on

justed

that the Com¬

respectfully submits its report, and ask

Committee

Your

(II. R.

of Pennsylvania

MeFadden

Mr.

and the payment of a like premium to producers

plus of

be observed and its effect deter¬

operations of the revised constitution can
mined.

At a meeting of the Committee on Fed¬
with the Federal Legislative Council, on
lay these subjects on the table without

the monetary gold reserve by imposing an
all gold used for other than monetary pur¬

for the protection of

poses

that any spe¬

this Convention, and it was feared

acted upon by

heard and

the report which has been

the constitution and by-laws,

the revision of

recommendation.
A

between these organizations might

cost of their maintenance and operation and the
elimination of duplication of effort.
In view of the fact, however, that the
American Bankers' Association during the past year has had a committee
some

October 18, 1920, it was decided to

13201),

of considerable data which tend to indi¬
lead to

in possession

co-ordination

real

and every effort

other ways,

in many

this method of work.

continue

be made to

should

benefits

its

•

12849)

show

will

Association

organizations and the American Bankers'

the State

co-operation between

urge

were

our

properly

high schools

economics already prepared

the study of economics becomes

gradually revise texts to meet

BANKING
The

Committee

lishers

that

has

been

assured

representatives

importance

revision

brought

convincingly

If the

the attention

text

writers,

and

met

the

practical treatment of

promptly and

subject

wish taught

To facilitate the accomplishment of

willingly.

plans these publishers suggested that the Committee outline in
them
has

the

subjects

been

prepared

and

mailed

seventy publishing houses

about

our

letter to

wished stressed by writers, and the following

will

letter

in the

"Following

the

made

suggestion

representatives

and

you

have

There

been

several

texts

economics

been

have

for¬

the

partly revised and at

present time

one entirely new text for high school use is being written by
experienced teacher and economist who is endeavoring to carry out the

ideas of the Committee.
There is about, to be published by the Rand
McNally Co., for high schools, a text on Banking and Business Ethics, the
proofs of which are already in the hands of the members of your Committee,

their

review

the

During

other

have had splendid co-opera¬

from publishers, to whom
suggestions and material
warded, and by them transmitted to their text writers.

for

United States:

began

tion

these publishers say that they feel certain that the demand for a

broader
be

135

Since Ihe work of your Committee

pub¬

prominent

they will co-operate fully in this feature of the work.

SECTION.

effort

and

past

approval.

year

have

spent

large

portion

time

the

organize the several

publishing houses, during the recent meeting of the Committee on Educa¬
tion of the American Bankers* Association, held at New York, I shall en¬

States for this work.
At the present time
twenty-five State Bankers' Associations have appointed Committees on Edu¬

deavor to

cation, with from three to eleven members each.

outline

the

subjects which the members of the Committee believe

economics

now

"First, permit
of

the

popularity

business

life,

We believe that much

tically

the

and

men

business of

life,

largely

concerted
the

wise

"We

problems

believe

willing to
the

our

that

render

latter,

bankers

the

chief

economics

"It is

ied

use

If this

renders

bankers

the

treatment of certain subjects in

public schools,

much misunderstand¬

shall endeavor to bring about the of¬

accomplish

through

the several

believe,

importance of
tion

economic

life

inasmuch

that,

State bankers'

This

associations

the part played

vastly important, there should be

derstanding of bank principles and practice, and

and

better general

in
un¬

fully than they

minds of many

always

how

people

exploited

between

and

how

operated.

tee

desires

ments
of

banks,

State

Bank

educational

banks,

Loans,

trust

companies

and

other

discounts

and

credit

Oregon, Chairman;
consin

The

"7.

Investment:

Federal

Distinguish

Reserve

The

from

System,

essential

speculation.

its

rating.

and

How

introduc¬

appoint¬

^ind accepted, and the assurances

by members of the Committee to address
other organizations

and

manifest¬

whose

are

committees appointed

are

aims

closely

"Committee of the

harmony with

American Economic Associa¬

Marshall, the Dean of the School of Commerce and

University of Chicago, is Chairman;

and

avoid

of High

School Princi¬

State

course

the

Arizona

provided

is at

that

with

Committee.

children

that

graduating

endeavoring

are

The

them.

Department

the hope of accomplishing

and

our

better

law

present working upon a revision of the

State,

practical banking

provided for

Economics

Montana

schools of

has

schools of that State shall be required to have finished the

Elementary

Education of
in

Finney, of the University of Minnesota, is Chairman.

the high

from

The Wis¬

Public Schools of Wisconsin, J. H. Puelicher, Milwaukee, Chair¬

Professor R.

the

public

economics

rapidly

understanding of

this

schools

numerous

of the
cities,

use.

possible to meet the demand'

social organization, how it

our

courses

some

already in

are

The

is put to¬

functions.

dangerous

this Association

the

with which

future

instruct the

may

B. A.

the

have begun.

lend its most ardent sup¬

can

We believe that there rests

United

of to-day that our men

young

We believe that

States in the past,

study of the

together with careful

study of the events of the future, will tend to greatly improve
and

invest¬

economic

future

the

upon

intelligently solve the economic prob¬

they will be confronted.

history of

better

obligation to correct the misunderstanding

public and to

women

economic

important.

the part of the public offers the most force¬

believes that the A.

activity

Committee;

your

not, but the evident realization of the importance of

of the present

es¬

the result of the efforts of

progress

argument for the vigorous prosecution of the work

port to

investment.

good

"Committee of

Society," Prof. Joseph Schafer of the University of

"Committee of the Association

and the "Committee of the American Sociological Society," of which

man ;

and

character

elements

the

secure

College Associates, Dr. M. A. Braun, of Rippon College, Chairman;

Committee

lems
"6.

the

the American Historical

ful

what they do, and how safe¬

analysis

made

Associations

societies,

are:

of both of which L.

Administration

much of it is

good credit rating at one's bank.

States the

the conditions

work.

our

of these

members of

sentials of

been

received

understanding of economics

are,

their
as

means

They have been instructed to

gratifying to learn that there

and

Some

ours.

have

been

Your Committee

what they

public schools.

and Teachers'

been

has

Some

guarded.
"5.

have

interest in

Distinc¬

deposits, what they are, what they do, and how safe¬

Bank reserves,

Boards of

such

co-operation.

Invitations

guarded.
"4.

in¬

Committeemen have been

its appreciation of the spirit in which the

express

interested

for

savings banks should be made clear.
"3.

the

ap¬

gether, and how it operates.

banks and their respective functions.

national

Text writers

corporation is something to be feared and

Committeemen

State Bankers'

the

when opportunity presents.

The kinds of

"2.

organized

forwarded

to meet with eighth grade and high school classes, for the purpose
of discussing the educational features we desire
emphasized.
Your Commit¬

courses

Corporations,

been

the bankers and School

educational work, and by

of suitable texts

purposes

are:

"1.

tion

by banks

suggest that the fol¬

lowing subjects be treated by the several text writers
usually

has

by letters of explanation.

upon

our

have

printed

the State Committee.

upon

Committees

arrange

The

however,

these

peculiar to their localities might suggest, endeavor to

their many groups.
"We

Some of these have either

in each group,

pals," Prof. C. H. Judd, of the University of Chicago, Chairman;

in all the high schools of the United States.

a course

member

committee

group

tion," and "Committee of the Association of Collegiate Schools of Business,"

they should.
proper

each

urged to impress

and

ignorance

can

secondary schools, and

prepared

are

but the

separate

representative of each

structions accompanied

ing

understanding that the subject of economics is not widely stud¬

fering of such
expect

States

Further¬

our

United

misunderstanding,

by the

whole,

principles.

be accomplished and the study extended,
greatly promote the future economic welfare of the people

doubt

the

cause

now

be corrected.

may

will

principles of

hardly be expected from

can

these basic

service to the people,

great

very

the

"We hope and believe that

made.

are

not, it is proper, however, to say that

nothing'

powerless to extend such services

ing

they

once

of the

continued ignorance will not justify confident hope in the future.

more,

texts

made

important part

very

the fundamental

knowledge of

practically

know

power.

disturbed economic conditions in this country

early solution of

and

been

heretofore

has

that

people who

effort

future

Whether this be true

economics.
a

lack

to a

be the

seems

appointment of
a

aware

are

the children of this country

namely, what to do with earnings,

due

being accomplished in this direction, but that prac-

and

women

"We believe that the present
are

elementary

them to increase their earning

enable

intelligent

teach

vocational training.

of educators and parents to better fit

the

several texts

public schools.

our

to explain the aims of the Committee.

increasing

purpose

for

use

secured

pointed

should be given more extended treatment in the

our

present

conditions.

ments.

"8.
"It

Foreign
not

was

exchange,

deemed

briefly

advisable

explained.
suggest

Annual
separate treatment

Report of the General

the

subject of Thrift.

We believe

outlined

discussion of the Principles of Thrift, and
understanding of its true meaning.

of Association

wishes

the current year, so I

result

will

"The Committee
the

cure

States,
of

introduction

Association

our

such

some

assurance

nomics.

the

cannot expect the

lines

until

assure

that, although

you

are

above

We base

lishers that there

hope

our

suggested,

existing

meet

for the

the motives of

needs.

This

elementary

eco¬

largest pub¬

our

plan of education advocated by the

writers.
we

are

than

doctrine
Our

that

should

do
be

not

desire,

in any

incorporated

way,

wish

dictate

text-books by

the

text-book

solely to havei certain important topics, in which
vitally concerned as citizens as-Veil as bankers, treated more fully
concern

they have been treated in most of such text-books.

"Will

carefully

you

consider the contents of

panying resolution, and

give

this

the benefit of your views, at

the

your

accom¬

been

These
of

present generation

subjects outlined

have

much time to

the

course

the American

Bankers'

by educational
For

treatises

propaganda,

some

the

The purpose of these is to

Association to assist

in the

time

subjects

with

much good can
attention

that

the practical

the

earnest

be accomplished by this method.
school

teachers

everywhere

to'the

will

the

used

prepare

the bankers

teaching of these sub¬
em¬

are

It has been called to
than willing to

our

receive

assistance of the bankers in their school work.

excep¬

annual

passed

broadens, in

work

our

cost

be augmented.

the

same

through

things

that

and

and that

the

part of

progressive

and

or¬

not

it is of seeing that

there be—are eliminated,

avoided,

entirely removed,

our

like proportions

All

experience,

the doing

that

duplication

work and

Association

the

income is

except for value received.

The monetary transactions

for the Association year are given in

detail in

published report of the Treasurer.
Legal Department.

The

condensed

discus-

Department

is,

opinion,

very

valuable

Association

asset, and it would be difficult indeed to estimate the value of the service
rendered.
Federal
vidual

Not

and

does

only

State

inquiries

the

Department

keep

legislation affecting banks, but

close
vast

constantly being made, all of which

are

efficiently taken

care

touch

with

number of

all

indi¬

promptly and

are

of.

Special value to members lies in the fact that constant watch is kept

legislation

proposed
should'be

the

by bankers everywhere.

Legal

bankers

of their
or

source

know

interest,

unwise

affecting

the

business

which

represent,

and

great satisfaction, and give a feeling of .security, to
that

vigilance

is being

exercised for

the

protection

and that through the efforts of this department, harmful

legislation

promptly

brought to

their

attention.

our

wide circulation,

not only amongst

great mass of men and women
be

trend of the times.

question of reducing the annual budget,

unnecessary

with the

and the field of

amount

have

kept step

extravagance and waste—if such
of

private—the

increasing cost of main¬

Rents, supplies, salaries, printing and all items of general

unavoidaly

hope that the members of the Association will readily grasp the
importance of this educational propaganda and see to it that it be given
very

increased and still

public

operation, and the American Bankers' Association is

total

ganizations
much

few matters

'■

organizations—whether
an

Financial.

business

have shown

rule.

have

expense

co-operation of the members of this Association

The Committee will also have prepared much
kions of the above subjects for general distribution
It

tion

other

years

tenance and

there

suggested.

our schools in a manner somewhat similar, perhaps, to that
ployed by the organization of Four-Minute Men during the recent war.

that

...

treating

past

jects in
feel

report to

discussion of plans for the en¬

foregoing letter.

preparation

about completed.

are

the

have, therefore, confined
'

all

past few

the

lightenment of the
the

earliest

convenience?"
The Committee devoted

policy, and recounted the general and specific activities for

•

effort

letter and

Hawes, in his report, has presented to you the larger questions

activities multiply

the Committee may not be misunderstood,

emphasize the fact that

economic

Secretary,

Bowerman.

of administration.

co-operation of all members

the statement of several of

upon

real need

se¬

Committee.
"That

President

assured present texts will be revised along

hope to receive from publishers of texts

hope to

study of economics in the schools of all the
most enthusiastic

they

those

the subjects above

require sufficient

clearer

that skillful handling of

treated.

who

are

depositors,
ignorant of

but

also

amongst

the

the subjects that will
j'

Protective
The

great

reflected

increase in
a

crime throughout

multiplicity

members, resulting

Department.

offenses,

tremendously

the country

both

large

recently

and small,

has been

against

our

increased cost to this. Departments

which

CONVENTION.

BANKERS'

136

appropriation was

at the time the

foreseen

have been

not

could

provided

$7,500 over the previous year was

made, although an increase of
for.

bership

gravity of the situation so impressed the Administrative Committee
that at its meeting in January it was decided to present the facts to the
members, state that an emergency existed and ask their co-operation (until
we returned to normal conditions) by enlisting the aid of their local officials
in cases of check manipulation, where the amount involved was less than

557.

total

$200, and not report them to the Association.
Hold-ups and burglaries
were to be reported and cared for as usual.
No arbitrary rule was established, nor did the Association refuse to
handle these cases.
We simply asked for support in an unusual situation.
I

generally speaking, that the response was
the part of a majority
to be guided by the request of the Administrative Com¬
answers received
to this letter, 70% unqualifiedly ac¬

indeed to

glad

immediate,

members

our

the

mittee.

the State having the largest

universal agreement

22,500 members in any line of
human endeavor, because honest differences of opinion and conflicting in¬
terests make this impossible.
But in a democratic organization, such as
this, where the rights and privileges of all are equal, and where full and
free discussion
and presentation of views are welcome, the will of the
majority in the final analysis should govern and the minority philosophically
from

accept the result.

110

374
110

100

340

160

500

44
17

755

331

129
76

407

203

232
56

Secretareis has been of the most
I have found them, at all times, not

pleasant and satisfactory character.
only keenly alert to the interest of their respective States, but ready and
willing to co operate for the good of the parent Association.
The beneficial
results obtained by those Secretaries, who devote their entire time to the
work, warrants me fn saying that I believe every State Association, with
a
membership of 300 or more, could profitably employ a permanent

235

349

121
67

171

51
21

Connecticut—

Delaware

devoted

tion

and

work,

ten

from

has

in its employ several persons
of their life to Associa¬

years

should commence now to

firmly convinced that we

153

316

353

800

232
447

Florida

127

213

225

1,305

638

1.943

lumbia

—

Illinois

517 213
41

405

Indiana

183

121

557

507

1.064

481

1.210

718

1.928

993

391

1,384

8
7

300

297

597

248

318

239

287

327

Kansas.

224

751

61
7

Kentucky—

100

158

Iowa

—

Louisiana

158

Maine.

Massachusetts.

ways

through

who,

career

have proved worthy

of continued service,

years

recognition, when their days of active work have passed.

as a

American Bankers'
men

for

where

Association

enrolled

now

are

extend

should

and

work

efficient

Montana

198

586

aid

and

of which

organization

the

Over 32,000 young
fit themselves

Bank

profession.

officials

every¬

the

by taking cognizance of

encouragement

Hamp're.

New Jersey

comment

without

the work of the

success

association

for

the
a

founded, and to whose sterling
of the Institute is due.
I refer to its Educa¬

past

very

Bankers'

American

The

was

His

ten

Uawes.

months
has

with

President

Richard

408

441

806

431

1,237

0
19

126

409

126

90
92

199

1,398

116

342 142

128

226

1,199
383

237

620

505

402

907

63 T;. 78

140

823

394

1,217

963

100

256

284

350
243

619

234

1,162

386

1.548

202

63
485

51
283

376

119

196

2
7

526

172

69*

5*6

153

332

254

424

72
75

444

Tennessee

141

664

South Carolina
South Dakota-

86
62

155

PennsylvaniaRhode Island-

985

742

1,727

123

136

58
75

10*

67
90
77

126

175

527

266

350
391

177

106

141

276

419
349

591

387

978

151

168

Texas

Utah
Vermont

Virginia
"Washington...

Virginia.

West

136

415

...

101

■:

Territories,

Etc., and
Foreign
Countries—
1

21
5

....

Zone...

Canal

Alaska;
Hawaii

103

Cuba.

—

100

China.— :
Costa Rica

Tsle of Pines

35
•

Domingo

Panama

Guatemala
Mexico...

....

1,906 1.715 50 47 22,687

in the membership of the Association with
New York third with 1,199; Pennsylvania
Texas sixth with 985; Missouri
seventh with 972; Oklahoma eighth with 963 ; Minnesota ninth with 911;
Ohio tenth with 823 ; Nebraska eleventh with 806 and California twelfth
Illinois

stands first

again

1,162; Kansas fifth with 993 ;

755.

with

zeal

responsibility have

■

•

Membership.

Oklahoma each have

and

100% membership.

In Nevada there

only one non-member; and Delaware and the District of Columbia have
each.
The increase in the membership of the Association, through the efforts

their

labors for

the

new

Executive

Council

for

convenes

organization

after

the

members in the onein the three-year class and' 22

class,

year

ex-officio

the

members,

two-year class,

making

142

45
members.

the

new

constitution

members
of 16

over

The
an

large

making

total of

149

increase

increasing

additional

their membership

Council

Mississippi,

member

are

Missouri, North

during the
follows:

last

year

Illinois,

Dakota, Oklahoma,

985;

Minnesota

third

with

180

new

members,

total of 1,210; Mississippi is seventh with 104 new mem¬

with 94 new members, a total of
total of 993 ; North Dakota
with 84 new members, a total of 505 ; then comes Kentucky with
members, a total of 300; Wisconsin with 65 new members, a total

total of 328 ; Nebraska is eighth

806;

Kansas is ninth with 85 new members, a

new

591;

South Dakota with 64 new members, a total of 526 ;

former

for Missouri
Commitee

Membership

also

____

—

Vice-President for Iowa, with the assistance of

the

in his State, of which he was

chairman

Council

——

Vice-Preesident for Illinios
——30
Power, Secretary Mississippi Bankers' Association, with the
aid of I. L. Gaston, Vice-President for Mississippi, F. W. Foote, VicePresident
First
National Bank at
Hattiesburg, and group com¬
Hummer,

Wayne

Geo.

mitteemen
F.

Plin

Scott,

Vice-President

for North

21
21
15
15

Dakota

for South

Vice-President

Beebe,

Dakota™

Hilton, Vice-President for New York

Council, North

Irish, member Executive

Dakota

total of

Missouri is fourth with 159 new members, a total of 972 ; Illinois is
with 129 new members, a total of 1,305 ; Iowa is sixth with 110

bers,

chairman;

Analyzing the increase in membership by States Oklahoma is first with
250 new members, a total of 963 ; Texas is second with 196 new members,

is tenth

the

allow

Texas.

total

Andrew,

Kentucky,

South Dakota,

Vice-President

Garm,

176
50

Wikoff

Phillips and Frank J.

last year.

States

Minnesota,

be added,

will

Messrs.

adopted, two additional members on account of new commissions and five

31,

member of Executive Council from Oklahoma, with the
E. P. Gum, H. A. McCauley, Guy Robertson,

J. Hartman,
assistance

the

fiscal year ending August

follows:

When

received through
i920 (15 and over)

officials'mentioned below, known to have been

of various

'"v-

adjournment of this Convention, it will comprise 37

new

1,686

111

146

fifth

714

295

Arizona

under his administra- *

prospered

purpose

■

911;

972

325

served.

ficially

North Dakota-

great pleasure and source of inspiration.

Association

for the welfare of the Association and his fixed
develop the larger and deeper consciousness of the
won
for him a place high in the esteem
members, whom for the past year he has so faithfully and bene¬

unflagging

fine

the

for

two non-members

Association
of

363

1,305; Iowa second with 1,210;

tion.

and

1,524

who has

of the man

unswerving devotion

President

997

613

328

369

480

North Carolina

fourth with

Hawes has indeed been

607
911

390

New York-

Venezuela...

George E. Allen.

Director,

1
1

Institute would be complete, however,

since the organization

pilot

ability much of the
tional

to the

reference

some

its

been

203

—

New Mexico.

Santo

splendid work this institution is doing.
No

540

Nevada

Canada

conscientious effort to

110

Nebraska

Banking.

justly be proud.

may

make

their chosen

430

14
12

Wisconsin.

feaure of Association work.

Banking is

201

258

Bolivia

Institute

11
9
27
70

247
628

Porto Rico

American

342

Philippine Isl's

The

107

133

20
18

dations.
Institute

235

714

Department has there been

American

255

has been the subject of much discussion

since its introduction

123

such a conflict of opinion, as that
conerning the purpose and policy of this publication.
In April, a special committee was appointed to consider the subject
from every viewpoint, and submit a report of their findings and recommen¬
other

186

101

Wyoming——

and contention

258

Journal.
The Journal of the Association

139

119

New

Maryland

23
33

176

49 47 22,441 9,895 32,336
6,883 10,964 890 1,893 1,715

and means-—possibly by creating a special fund the income
from which could be used for the purpose—-of providing a pension for those
who have remained with the Association during the active years of their
devise

Georgia

Oregon.———

System.

twenty-five

884

54
265

Oklahoma—

have

149

Ohio

secretary.

who

225

250

— .

Mississippi—-

My association with the various State

Association

109

Missouri-

Bankers'

— —

Michigan.—

State Secretaries.

American

> s

<fc.§

Alabama.
Arizona
Arkansas
California

Minnesota

The

11 i!
5*

fc.§

Idaho

policy of administration.
It is not to be expected that unanimous consent or

Pension

District of Co¬

always be reached or obtained

•w*

Trust Com;

I
'•

Excepting a very few cases, those
who disagreed did so without acidity, without prejudice, and merely ex¬
pressed their opinion, as all members have a right to do, upon any

can

TERRITORY.

<§

STATE

cepted and approved the action taken, 7% accepted with, or offered,
counter-proposals, Ruch as increasing the dues to cover the additional cost,
objected altogether to the plan.

ft.
Q

3
*5

Colorado

and 21%

STATES AUGUST 31 1920.

MEMBERSHIP BY

say,

and indicated a willingness on

generous

year

Pennsylvania with 101.

was

The

Last

Indiana with 54 new members,
increase in mem¬

total of 1,199; and

with 60 new members, a
a

New York

The

individual

greatest

accomplishment

among

the

officials

the

membership campaign for the year belongs to Mr. T. J. Hartman, member
Executive Council
from Oklahoma.
Mr. Hartman
devoted much time
and

energy

the

His

Oklahoma.

endeavor

efforts

were

real interest manifested.

campaign

for

achievement.

new

members

reach

the goal

100%

membership in
him

for

indicated his associates co-operated in

the

rewarded

which

and

resulted

much

credit

bringing

due

about

the

big

BANKING
Following is
August

31,

♦Erased

1919

from

;

the

rolls

through failure,
withdrawal, December 1, 1919

liquidation,

particular

consolidation

197-2108

31,

members joined during the year_i__

new

♦Regained members

net

1920,

(secured from

the

above)—.

membership—

loss for the year
loss

1,429

for

delinquents.

new

The

4,274

State

have

372

members,—_——

been

2,845

Year

Membership.

1916-17

Delinquent,

—

proportion

which

delinquents
best

the

171
165

177

.0087

compared

evidence

the

that

the

membership

members

1916-17__.-.13711917-18

draft

ies

net gain of 2,4,73.

increase

1,715.

was

liquidations, etc.:

the

195

.....

The previous record

was

in 1918 when the

The increase therefore at the present time

over

membership

our

estimated

are

$33,330,-

780,000.

^ -V-":
membership and receipts from dues of the Association have increased

The

then

September 1
September 1
September 1

August
August
August
August

Paid

__i—1

brief

—

............

...

—

1917
—

August 31 1920

Gross Loss

150,795.00

2.813

3,424
3,915
4,500
5,504
6,354
7,065
7,563

«r

-/«».

have

'•

«.

•

—

——

—

-m

Net
Gain.

982

611

434

783
741

535
530

234

819

585

1,313
1,159

1,113
826

552
879

186

313

973

374

1,139
1,120
1,152
1,043
1,302
1,243
1,639

781

298

1.504

723

1,971
2,041
1,521

1,251

337
691

1,304

405

—

790

330

-..u,

•

744

359

—

894

■

620
114

706
868

667

777

384

1,514

434

883,

416

876

1917
w

—

308
276

1,214
1.889
2,188
2,738

1,105
1,801

22,687

—

293

1,715

1,171

2,276
4,274

372

2,473

BOWERMAN,

with

such

and

General

Counsel

members

vast amount of detail

somewhat

and

difficult

include and which

matter

his

that

This

relation

the

wide

full

Federal

work

Legislative
the

making the annual report it is

just

which

report will

Federal

cision
on

the

important

subjects

have

cations
made

Executive

connection
national

Council

questions

bills

House

by wire,
the

subjects

particular

aim at

and

letter and printed

Federal

suggesting action for

promptly

and

depositions of
result

reaching of

Federal

with

Legislation

the

important

All

and

bills

published

members of

the

Federal

policy
by

Legislative
with

drafted

members

and

the

legislative

introduced

and

Council
to

number

Congress

successive

Executive

reference

worked

false

June,

and

1920,

reluctance

the

point

contended

covered

for

separate

the

if any

the

statute.

with

instructions

draw

Law

which

Commissioners

will

subject will be further

the

that

con¬

the

annual

recommended

the

the District

adequate

subscriptions to
of

obtained

was

motion

27,

1919,

there

trial, and

injunction

for

but

1919

by the

December

permanent
to

American

of the

name

against
Houston

was

the

of the

American

name

defendants

Bankers'

of the Association.

July 30, 1919, which

contempt,

must

Bankers'

Association

the

view

discharged

were

thereafter

American

punish

checks.

flooding the country
certain oil stock and which

membership
use

violated

was

Proceedings

for contempt

based

and

1919,

The

decree

granting

Association.

protect its good

found

were

sworn

answer

were

full

This

handed

was

the

relief

from

and

Trust

warning that
proceeded

down

making the

demanded

the

ability

the

abuse.

"Bank

guilty

the

demonstrates

name

unintentional

thereafter

case

the

payment of costs with

upon

violation.

19,

defendants
their

for

Unincorporated.

Court of Harris County, Texas,

in Texas operating under

statement

statute

of fiduciary

use

summer

conference

number of bankers who had received such circulars.

violation, they

Misuse

Under the law
trust

unless

solicit

however,

firms,

(Art.

business
to

the policy

the

Title

organized

that

with

condition

the

this

duty

and

banking

after the

use

parenthesis

subjects
been

law

merely
or

under which

'unincorporated'
to

and

penalty

possible

for

control of the Bank
Trust

law,

individuals

name

the offender
.

has

banks

banking

private individuals

the

of private

word

law,

the

As to

be the

article"
!

Bank

one

Department to

call

Company" with the word "unin¬

in small letters printed underneath and using such name
throughout the country glowing prospectuses of oil properties,
to the stock of such corporations.
One or more

using such

and

name,

have been
many

under the title "The

conducting such

Trust

operations

complaints have been

received

Company

unchecked
that

the

during

names

trust

submission

such.

subscriptions

course,

the

de¬

incorporated

subject

or
as

Company
for

incorporated,

shall

supervision

"The

past year and

banking

under

not

are

"It

conducted

without

circulate

unlawful

in the banking business, to

this

corporated"

banks

made

Under

the

receive business

which

558)

comply

individuals

the

companies should be thus brought into disrepute.
This,
class of speculative enterprise entirely foreign to legitimate
trust company business and a statute has been drafted for
a

to the next session of

Banking Law

the Texas Legislature which would

amend

to present such private concerns from masquerading

banks and tryst compaiies.

obtained
Insurance.

particular
of

The

subjects

who

have

of the respective measures; communi¬
bulletin have been from time to time

Texas

companies,

to advertise

Council

including the Executive Council,
against particular measures; in short, the legis¬

decision

submission

prepared

following recommendation:
extreme

Company Unincorporated, which

the

September

machinery of the Association has been kept in motion all along the
of legislative activity from the investigation of bills when introduced
the

the

committee

trusts

instituted

lative
line

with

should

will

concern

soliciting

the

themselves

Legislative Council,
or

subject

Commis¬

August of this year the committee made
noted

Commercial

there

were

Unincorporated,"
his associates have

character.

been

Senate

purpose

the

was

Commissioners

epactment regulating the personal

Trust

brevity and be of

referenda have been issued

have

and

examined
to

Association

sympathy with the

Council;

of legislation;

Committee

been forwarded

Legislative

introduced

and
been

Council

Association

which

digests,

the

Counsel

affecting banks have been

Congress
and

with

co-operation

the

Against Houston Bank and Trust Company

circulars

concerns

General

all

advisable,

January

Association in

soliciting

year

fiduciar¬

the

and

Such brief

by the continued mailing of the unauthorized circulars.

Association, its

variety of subjects

Federal Legislation.

past

and

Law

Association

invited.

the

of $100.

somewhat general nature.

During the

temporary injunction

the

Counsel.,

such

covers

decide

omit.

deemed

Committee

State

contained

failure

Report of General
the

conference

Commercial

concluded

back

Commissioners

firms engaged

General Secretary

and

Association

referred

The

provides

committees

other

the Negotiable Instruments Act and feels that

unincorporated

work

other

1919, presented the matter to

annual

Bankers'

was

heretofere,

to amend

290

Respectfully submitted,

officers,

August,

their

Association, to restrain the unauthorized

1,006
1,312

1,023

16,016
17,328
19.043
20,214

—

General
or

620

924

1915

1916

corporations

Gross

200

—11.405
12,072
13,323
14,100
14,720

which

has,

should

Decree

Gain.

211

the

suggested draft of statute and at the annual conference

Bankers'

Bank and

248

American

committee

meeting

uniform

760

„

the

report

Proceedings

that

reasonably safe for banks to receive

Committee

Association

our

committee

'subject.

1,038

8,383
9,251
9,803

^^".

the

•

Council

Negotiable Instruments Act

16, 1920, that committee gave a hearing at the Bar
City of New York to counsel for various banks, including

the

extended

Bankers'

500

7.677

1899

time

sidered, and General Counsel

:•

the Executive

the

of the Commissioners at St. Louis in

subject be

Net Loss

371

Counsel

the

264,529.17
302,705.00
320,840.00
426,892.50

1.'

the

of Fiduciary Checks.

make

245.651.00

V i.

have

separate statute covering the subject."
This report was considered by the
Commissioners and the subject was referred back to the Committee on
Commercial Law with instructions to draw a separate statute covering the

175,352.00
188,934.00
198,530.00
213,752.50
229,324.48
233,915.00

which

measures

affecting banks passed

The committee would be glad to have the instruction of the conference upon
this point and if it should be thought best would recommend that the

162,507.00

by
Failures,
Merger,
Merger
Delinquents
Delin¬
&c.
quents, &c.

Mem¬

American

by
Failures,

bership.

will

accompanied by

Membership by Years.

The

legislation

10.940.00
12,975.00
109.526.00
127,750.00
137,600.00

9.251
9.803
10,682
11,405
12,072
13.323
141100
14,720
15,010
16,016
17,328
19,043
20,214
22,687

—

1918—
1919

August 31

Counsel

Commission

$11,606.00

1,395
1,570
7,677
8,383

—

1916

31
31

1,600

1915

14
31

Annual Dues,

State

March

Membership.

1875

1885
1895
1905
1906..
1907
1908
1909
1910....
1911—.
1912
1913
1914.._

August 31
August 31
August 31
August 31
August 31
August 31
August 31
August 31
August 31
August 31

referred

General

"The

Year Ending

Committee

personal order and that the General Counsel endeavor to procure
of such legislation by the Commissioners on Uniform

Association in the

follows:

the

recommended

legislation

Use

amendment

Commissioners at

sioners.

the

other

Laws, the General

submitted

with

recommendation

State

1918 is 758.

aggregate resources

to pay checks drawn by officials of

to their

was

statute which

deposit

very

appreciate the work

—132! 1918-19...... 12811919-20

law

pending

Legislatures during 1920.

form

The total net loss for 1919-20 is 372.
During the past year the largest
increase in the membership in the history of the Association was made,
being

statement

also

Counsel

The

and

Carrying out the instruction

the

by consolidations, failures,

Legislation.

co-operated

Pernsonal

.0083
.0086

status

interested.

.0106

144

accomplished by the Association.

net

contain

PerCent.

16,016

17,328
19,043
20,214

—

1918-19—

there

will

passed

Delinquents.

the

In view of the fact that only eleven State
Legisla¬
regular sessions during 1920, but few of our recommended bills
passed this year.
The report of the Committee of State Legis¬

been

different State
.

concerning

organizations.

tures held

177

—

also

State
has

Legislation

affecting banks which have become

and

the Association

Counsel

in opposition

Federal

Legislation and the State Legislative Council in the promotion of measures
recommended by the Association for state enactment and has
forwarded
copies of bills with necessary correspondence and explanation to the different

195'

General

lation

Losses

Congress

2,473

in failures, consolidations, etc.

Making the actual gain

small,

which

bills

22,087

—_—

the year

The

present

the Commtitee

report
of

2,845

A net increase for the fiscal
year.

the

taking of action in promotion of

The

statement

18,413

31, 1920,

August

to the

measures

contain

during

1,801

——

137

particular bills.

will

Membership

August

net

20,214

______

matters

and

SECTION.

of the membership gains for the year:

summary

Association

upon

General

reframing

Counsel
a

new

has

co-operated with the

American

Bankers'

Robbery Policy copyrighted in
from

time

1920,

and

by that committee in

Committee

Association

Bank

his services
connection

Insurance

Burglary

have been

with

the

and

engaged

determina¬

tion of the rights of particular member banks under burglary policies where
losses have been
sustained.
Considerable correspondence has been
had

during

the

year

clauses in bank

with

members

involving

the

interpretation

different

burglary policies and fidelity bonds and with respect to their

rights under the facts of each

particular

case.

BANKERS'

138
Protective

crime

perpetration of fraud
questions arise of a
the General Counsel is consulted by the Manager of the

upon

nature and

legal

in such

Department

Protective

with many members of the

respondence of an advisory nature

Work.

the attempted or successful
members of the Association, many
with

connection

CONVENTION.

matters.

has been

tution

for adoption ;

be presented

the formulation of an amended consti-1
and there has been given advice and

of the Constitution in

Revision

committees and sections of the Asso¬

in the work of other

participation
ciation.

Bills
The

(Pomerene Bill) which

Bills of Lading Act

Federal

became law

after ten years of effort upon the part of this Association
organizations, secured for the banking and commercial world as

allied

responsibility of the
goods to the
bona fide
of a bill of
lading a Federal crime.
The constitutionality of this last provision
(Sec.
11) was assailed and denied by a Federal court in Ohio in the
Ferger case (256 Fed. 388), but this decision was reversed and the consti¬
tutionality of Section 41 and of the whole act wag affirmed by the
Supreme Court of the United States in June, 1919 (250 U. S. 199).
The
Federal Bills of Lading Act, as passed, however, contained certain defects
due to changes made by the House Committee against the wisdom of the
advocates of the bill, but which were reluctantly concurred in, in order to
insure is passage.
In March of this year the Committee on Commerce,
Trade and Commercial Law of the American Bar Association issued a circular
stating that the time had now arrived to remedy the defects and supply
the omissions in the act, and on April 9 and 10 General Counsel attended
a
hearing before this committee in the City of New York, which was
participated in by representatives of shippers and bankers, in which a
tentative draft of a remedial act was carefully gone over and subjected to
certain changes.
Most of these changes have to do with matters between
shipper and carrier.
No bill has yet been introduced in Congress on the
subject and General Counsel is following this movement in the interests
negotiability of order bills, the

features the

its main

bill signed by his agent without receipt of the
holder of the bill and a provision making forgery

carrier upon

fraternity.

of the banking

Commission is conducting a series of

Commerce

The Interstate

hearings

recommending of a
proceeding is being
followed and participated in by General Counsel with a view of securing,
if possible, the incorporation in any particular form which may be adopted
of the necessary requisites of negotiability and other safeguards to make
in

proceeding having for its object the procuring or
of through export bill of lading.
This

standard form

bankable document.
In a minority report of L. F. Loree, president of the Delaware & Hudson
Railroad, which is concurred in by C. J. Pearson, president of the New
York, New Haven and Hartford, on the $300,000,000 car fund which was
recently submitted to the members of the Committee of Railroad Executives,
the statement is made that the serviceability of equipment can be increased
in

work which is of acknowledged value to a
individual membership of the Association and makes a!
strong claim for their loyalty and continued support is the rendering of
legal advice and opinions upon a variety of matters which come up in the
daily transactions of banks and concerning which some question of right
or
liability or procedure is involved.
Questions daily come in from banks
all over the country, some presenting problems easy of solution or which
have
been replied to before, while others are of a more complex or
technical nature.
The office of the General Counsel is now so equipped with

numbeg of specified ways, among

others, by "a marked restriction, in the

lading—the absolute prohibition of some

of order bills of

use

and a charge

device" and "a gradual
commercial instrument,
which should be possible with the growth and improvement of the banking
system of the country and restriction of the bill of lading to a receipt for
goods and an obligation for their carriage.
It is said that this would have
a potent effect in holding back unwarranted
shipments now greatly stimu¬
lated by the ability to collect on the sale of goods as soon as bill of

important branch of the

part of the

large

legal assistants that despite the large number of questions they are all
given the investigation and attention they deserve.
Publication is made
in the pages of the Journal of such of these opinions as space will permit;
many

is issued."
The banking system of the country demands the order bill of lading
and any restriction of its use would be a restriction of commerce.
Our
Committee on Bills of Lading, a few years ago, made a hard fight to
separate order bill of lading in negotiable form.
Some
members feel concerned over the possibility that the efforts of

obtain

railroad

to do

men,

meet with

measure

with

away

of success.

of our

Paton,

has co-operated with

Counsel

Section

Smith

(Mr.

Indiana

Mr.

and

Committee of the State Secre¬

Keyser of Missouri, chairman, Mr. Andrew
M. A. Graettinger of Illinois), who have in

possible, from the Commissioner of Internal Revenue
special form of return for banks.
Many bankers have complained that
the present form which is designed for all classes of corporations is incon¬
venient ; that in the mass if instructions it is difficult to understand which
are
applicable to banks; and that a simpler form, covering bank transac¬
tions, would be of advantage both to Government and taxpayer, relieving the
former of the necessity of calling for so many amended returns and the

•charge the procuring, if
of

latter

doubt

from

trouble

and

the

making

of numerous

mistakes.

H. McKee, of Washington, a special
hearing was arranged before the "Forms Committee"
of the Internal
Revenue Office, of
which Deputy Commissioner Hurrey is chairman, on
September 23, 1920, which was attended by Mr. Theodore S. Cady, tax
expert of the Fidelity National Bank & Trust Co. of Kansas City, who
has donated his services to the Secretaries Committee,
and by General
•Counsel.
Mr. Cady had prepared a special form of bank return, which
was
gone over carefully by the Forms Committee, favorably commented
upon
and acknowledgment made that many valuable constructive sug¬
gestions were derived therefrom.
If a special form is not adopted owing
to administrative difficulties, at all events there will be many improvements
Through the kind

offices of Mr. H.

general form of corporation return, which may

the next

include a special

banks.
This subject is mentioned here for the
purpose of directing attention to the report of the committee of the State
Secretaries Section, from which more complete information can be derived.

page

instructions for

appointed
formulated
is

necessary

has

co-operated

with the Special Railroad

Committee

President Hawes, which met in Chicago last winter and
expression of opinion on behalf of the Association as to what

the credit of the railroads of America.
The
unanimously adopted at that meeting were

to rehabilitate

fundamental recommendations

presented
agencies

our Federal Legislative Council and other
the Cummins and Esch bills, then under
in the main, incorporated into the railroad law

to Congress through

consideration,

connection
and

were,

with

finally passed.

Committee and
tion
tions

with

Committees.

attended various meetings of the Administrative

participated in the discussion of those matters having rela¬
with which he is connected or which presented legal ques¬
He has attended a meeting of the Committee of Five

for solution.

discussed the subject of reasonable charges and

Chicago, at which was

interpretation of Sections 13 and 16 of the Federal Reserve Act; and
connection with the work of this committee has had considerable cor¬

authorized two

ago

twelve years and

last

the

during

Committee

International Relations.

result of the Convention
held in Paris June 21 to 28,
constitution and by-laws adopted,

International Chamber of Commerce,

the

organization was perfected, a

formal

and

demand.

undersigned have the honor to report as a

The
of

published, for which, from all

never

there is prospect of a great

accounts,

following resolutions were passed:

the

was
received with great cordiality and the result
undoubtedly added to the existing pleasant relations
Belgium, Italy, France, England and the United States.

delegation

Our

convention

the

tween

INTERNATIONAL CHAMBER OF
RESOLUTIONS

of
be¬

COMMERCE—PARIS MEETING, 1929.

ADOPTED BY

CONGRESS.

A.—General.

reconstruction of the devastated

Congress regards the

International

Belgium and Italy as the most urgent and important
questions to be pressed forward with no delay.
The Congress has taken note of the failure of Germany to reduce her
amy, and armed forces other than regular troops, to the level required by
the treaty of peace.
It has also taken note of the failure of the Germans
to deliver the amount of coal and other supplies which they undertook to
France,

and is of opinion that the Germans have not as yet given any
desire to honor their signature to the treaty of peace.
these circumstances the Congress presses upon the Governments

provide,

evidence of an honest
Under

Allies that the German

of the

Government should be clearly and

definitely

be permitted in the carrying
out of the obligations it has undertaken as to the restoration of the devas¬
tated areas and in making full compliance with the terms contained in
that

informed

the treaty of

further postponement will

peace.

copies of this Resolution be sent to

That

countries.

B.—Raw

Unification

Wants

■

Materials and

General Economic Policy.

Customs Nomenclature and

establishment

the

the Premiers of the five allied

■

Legislation.
tariff of

customs

the allied

nations

nomenclature such as was adopted for the customs
by the international official meeting held in
Brussels in 1910-1913 with reservations as to any subdivisions, additions
or
modifications which may be found necessary.
2.
Recommends to the interested governments the establishment of a
Technical
Commission for the purpose of devising the ways and means
to be advocated for the unification of the customs legislation and regula¬

according to a common
statistics

country

the allied

tions

each

nations.

Prohibitions.

the wish that import and export prohibitions
should gradually
be revoked as soon as the internal conditions of each
country shall allow it.
In any and every case, such prohibitions should
not apply to such goods about which proof can be furnished that they have
been shipped or forwarded
within the date on which such restrictions
have been enacted.
In the matter of goods which it has not been possible
The

Congress

expresses

suclTHate, but about which it could be proved
entered into before this same
should be dealt with by means of special licenses whose

ship or forward before

regular and lawful contracts have been

that

such cases

date,
The

datory

should

be strictly

above states treatment

supervised.
should prevail also in territories under man¬

rules.

Central Bureau

to the work

the
in

•

and publishing the legal opinions

has not been completed, but is still going on.
The two editions
already published cover simply the opinions printed in the Journal; a third
edition is now being prepared by Assistant Counsel Paton, Jr., to include
several thousand additional opinions which have been rendered members

years

issuances

Co-operation
The General Counsel has

of digesting

work

The

Revocation of Import and Export

Special Railroad Committee.
Counsel

General

Assistant
digest of

profit above shown.

substantial

This

General

work of digesting

the Journal of the
June, 1919, was
published and sold to members at cost of $2.50 and to non-members at a
cost of $5 each.
The first edition of this digest, 6,000 copies, having
been substantially sold out, a second edition of 10,000 copies was prepared
and published on March 1, 1920.
Down to the close of the fiscal year,
August 31, 1920, a total of 14,803 books have been sold to members and
non-members.
An initial appropriation
of
$1,000 by the Executive
Council was returned unused and the credit balance at the close of the
current fiscal year shows a net profit of $11,096.94, all bills up to that
time having been paid.
In other words, this publication has been made
without any extra expense to the Association
has thus far yielded the
these opinions, which had been printed in
for the elevent years from July,
1908,

1,350

Association

regions of

Executive Council, the

of the

the order bill of lading, may ultimately
The subject is being given the necessary

Special Form of Bank Return.

Opinions.

the General Counsel was undertaken by
Jr., and on July 1, 1919, a book containing a

certain

attention.

taries

1
Legal

opinions

legal

Counsel

authority

Pursuant
the

designed-to-the restriction of other uses of this
elimination of the use of the bill of lading as a

lading covering them

not published.

are

Digest

instrument a satisfactory

the

Opinions.

Legal

August 29, 1916,
and

of Lading.

Association

interpretatioin of the law and of prcedure.
There
co-operation on the part of the General Counsel with the Committee

involving questions of

Whereas

of International Statistics.

complete and reliable information is a fundamental requirement

for the determination of sound international commercial policy,
conduct of commercial enterprise and Whereas

not

only

but

also for the intelligent

such

information is now being collected by a large

number of divers agen-

BANKING
cies,

governmental,

some

business

obtain

Whereas,
full

private, making it difficult for

some

through its
is

utilization

for

the

is collected in

establishing
of

international

study of

Directors

trade and production,
,;'t

Bureau

harmonize

policy;

the

data

should

which

basis

the

form

all

sound

Further

Recommended,

agencies

obtain

world, in

that

Conservation

methods

determining

recording them, in order that it
obtainable

now

because

the

may

The

of the producers

duty

the economic

possible

increase by every
are

of all countries

balance and to insure

The general meeting in

The

possible

(b)

the production

means

to the world economic policy.

necessary

order to

use

world.

the

free

the

world

the

from

of certain

immediate

the

Commercial

the

allied

requirements,

producing countries have

given during the period

which

fought

of their late enemies,

resolved,

will

■

that

it is

of their

excess

the

require

necessities

the

materials

Resolved,

That

Financial

the

Questions

importation
were

This

committee

International

ments and industrial

conflcits

which

The British

sity

danger in descrimination

monopolies

Chamber

the

Commerce

and commercial

countries

Such

wide

situation

mend -to

the

The

Fixed

Whereas,
barriers

attention

status

effective

only
in

Therefore

request

the present

That

question

of
of

purpose

this

taking steps
adopting

fixed

date

for

International

Easter,

and

areas,

necessity

the

turned

has

resulted

interfered

current
great

seriously

the

with the
the

across

sea,

such

for such

con¬

Commerce

and banking,

nations

commercial

concerned

countries

the

all

have

removed.

industrial associations

and

with

co-operate

and

with

the following lines:

importation

non-essentials

countries with

exportations from such countries by:

A careful detailed study of the export possibilities of each

of the foreign markets for its products.

By ascertaining the
The elimination

Where

lack

coal

quantities.

pre-war

such

every

exportable commodity in

every

why exportable commodities in

reason

fallen below

have

countries

(c)

exportation, of

obstacle to

far as possible.

and

materials

raw

constitutes

the

principal difficulty in the way exportation, endeavor to negotiate
credits

control

such essentials which will be

covering the importation of

paid for from the proceeds of the exportations thus made possible.

such

Where

(e)

Conference

depreciatoin and

cause

exchanges.

(b)

the

govern¬

until

correcting the

in removing the

interest

increase the

Congress the directors should consider the

summon

materials,

raw

Resolved, That the International Chamber of

reduce

tories

opinion

unnatural

all

depreciated

Easter.

the

(d)

system

and

countries

such

the

other where possible along

discrimination.

Banks

allied

normal relationship between exports and im¬

bodies

people of those nations to the dangers

alteration

government

for

means

exchange lies

governments

(a)

them;

areas

which

exchanges

against the world's trade

entirely withdrawn, which they hope will be at the earliest.
Date

ports, and

countries.

own

has

them,

dition: that is, by return to a

Delegation wish to record that, whilst they regret the neces¬
conditions, they cannot recom¬

their

soon

exchange rates, and

depreciation

fluctuations

for government control under present

can

well

and, because of violent fluctuations in exchange, with foreign trade, between

to prices of raw

which

the

directs

arise from such

may

states

agree

Governments,

quantities

great

against

and

study

Between

the devastated

foreign

country and

eventual

the

will

importations to such countries, particularly from countries

appointment

creating

states

formerly supplied either directly from devastated

abnormal

countries

depreciation of their

Monopolies of Raw Materials.
Whereas there is

the allied

importations will be needed by the undestroyed portions

such

during the periof of normal economic balance, which status

shall be based upon the principle of economic fairness for all

materials

debts of

through the proceeds of exportation of such

Whereas,

Materials.

Recommends
raw

be restored only after fixation of the

payment of

each

Raw

relations between states:

Associations.

large

trade

own

necessities of the allied

nations.
Status

possible international credit,

as soon as

may

conditions

such countries which

consideration should be

been met special

reconstruction to the

practicable

each other, and

close and thereby to

instances in

some

therefore

nations

war

threatened oppression

materials in

raw

to restore

The reconstruction of

W'hereas,

Whereas,

each

that

energetically and unitedly to bring the late
possessor

necessary

advantages to be gained by reciprocal privileges.

for stabilization of economical

enemies:

Whereas,

■:;vv

fact

very

possible to fix definitely that amount and those conditions of payment in
accordance with the stipulations of the treaty of peace.

Interchange of Raw Materials.
Owing

and

Allies

Therefore

economic way.

To develop research and extraction of all oil and fuel resources

the

which tend to

measures

the most scientific and

war

the

suggests the desirability of seeking

those

Whereas, International credit

further

and increase the world's stock of

spare

To hasten the carrying out of the

(c)

extend

Enemies.

way.

the mineral fuel

condition

amount
as

the

To hasten the utilization of hydro-electric power in the largest

(a)

conference is drawn to the existing inequality
foreign banks under the laws of various nations.

secure

Whereas, It is
first

it be recommended to all countries:

suggests

principles

buyers in the allied countries during the period

therefore

conference

amendments to

areas

fuel

duty of

peace

Fuel.

the

accorded

Co-operation

business

Allies during the

Materials.

Raw

that

believes that

Commerce

fought together

Banks—Inequality of Treatment.

attention

treatment

lack

the

which

credit facilities

Foreign

urges

statigtics

;; /

first

materials

the

and

not

re-establish

basis,

permanent

Chamber

commercial

the

order to

raw

Chamber of

countries

of reconstruction.

greater degree of international uniformity

information

Production

Considers

International

collection

the

statistics

the

That

charged -with

such uniformity.

Increased

all

everything consistent with

utmost

purpose

commercial

Debts of Allies and

classification

any

of all

the

and

those

possible

advisability
for

centralizing,

value and the quantity units used in

the

Statistics

International

take immediate steps to secure a

consider

not

analyzing and interpreting statistical informa¬
the business interests of the world, and in order to centralize and

tion for

Board

Central

collection,

that

the

form that precludes

therefore

Recommends

139

International

sellers

information

statistical

purposes

incomplete,

The

single

any

desired, and

efforts information

own

commercial

many

obtainable

now

its

for

SECTION.

for the

and considering the reform

such

of the calendar.

and

materials

raw

essentials

required

by fac¬

consumption,

arrange

are

home

for

paid from the proceeds of exchange to be purchased

the market

coal

manufacturing

credits to be

wherever it

be done through

can

safe channels,

operations all tend to strengthen the foreign position of the

country concerned as the cost of manufacturing

in foreign money

is saved.

C.—Financial

Policy,

Exchange.

Including

That

this

meeting

ganizations

the

such

individual
the

make

countries

any

tax

representatives

allied

income,

same

between
to

the

companies

or
•on

allied

governments

country

taking into

to carry

order

avoid

between

liable

that

(1)

tax

one

this rsolution into effect.

Delay in turn round of ships.
Delay between ships and trains.

The holding

Diminution in production through lost days

and

transportation
depreciated

Chambers of Commerce.

Whereas,

have everywhere been augmented by

Taxes

and

also

the

expansion

great

governmental administration during the
Whereas,
is

Reduction

both

personal

of vast

reason

personnel

war

required

and

interest
into

governmental

expenditure
4.

urgently needed to reduce taxes and to stabilize business, which would

tend to reduce the cost of

Whereas,
ciations

reductions

promptly

and

efficiently

because

their

Whereas,

the

believed

counsel

that

and

expenditure
in

because

constantly

local

Chambers

Chamber

Commerce

recommends

services

that

their

business assistance and advice

national

non-partisan

such

business

Foreign

persbnnels, and
intimate

be actively

governments

special

Credit

committee

Interchange

countries

porters and
Credit

countries
make

may

will

study

Bureau

the

upon

the future

money

export.

markets when

the idea of placing long time

used to

increased

reconstruct

devastated

production with

;

its many
a

better

and
the carefully considered opinion of this

raw

reconstructed

rapidly

financial and

physical conditions

possible; and with this end in view it is hoped that the furnishing of
materials

for

this

purpose

considered

and
a

credits

first call

upon

cover

the

their

money

cost

and

markets of

world.

Whereas,

advisability

foreign

when

care

represented in greater governmental taxing power and

Depreciation

be urged to appoint

establishing a foreign
reciprocal interchange basis with such
service

for

their

ex¬

essential
the

Exchange.

hindrance

nations

Whereas, The wide
interests than

Whereas,
to

The depreciation of exchange

different

for all

development thereof.

Buyers in Allied Countries.

may

result

removing all

and their respec¬

encouraged.

desire to avail themselves of such

Facilities to

which

proceeds of

where

country represents

ready to take advantage of

transportation will be

Credit Interchange Bureau.

Resolved, That the President and Board of Directors
a

going

body that it is desirable for all nations that the devastated areas of allied

the

collaboration between

organizations

are

facilities for their

increasing

Further Be It Resolved, That it is

Commerce offer their

governments for such

That
tive

countries

foreign

from

restrictions and

since their expenditure in

the

loans,

benefits

dealing

committees from their membership can readily afford in questions regarding
the reduction of national and local government expenditures and of ad¬
ministrative

tourists

foreign financial position

ex¬

investment in home countries.

foreign

encourage

districts

Let It Be Resolved, That

International

The

and

personnel

of such associations

similar problems.

Now, Therefore,

induce

non¬

public administrators would welcome such

respecting

higher prices

so,

of correction.

possible countries with depreciated

available and desirable particularly with

experience of the members

with

necessary

partisan character, and
non-partisan

for when they do

certain

are

in foreign currencies where the proceeds

payments

unnecessary

asso¬

both national and local, are peculiarly fitted to advise how best to

these

effect

financial

and

prevail,

far

high-priced commodities not strictly essential.

living, and

Chambers of Commerce and other business

of labor.

that regular production

changes issuing foreign loans with their consequent increases in annual

for

and

war,

shall

exchanges

restrict

back of mineral products.

Since it is to the best interest of every citizen

and

expenditure

co¬

Delay in transportation by rail.

(4)

Between Governments and

Collaboration

hearty

(5)

legislation in their respective countries

secure

the

obtain

(3)

the Board of Directors

urges

(2)

to the governments of the allied countries

once

possible

means

operation of labor to prevent:

individuals

than

the

increasing

reducing foreign exchange expenses to a minimum.

Exercise' every

(g)

for the purpose of

constantly increasing value

and

or¬

belongs has the right to claim the difference

company

to endeavor

industrial

and

agreements
to

credit

consideration that the country to which

paid and the home tax, and

representations at

concerned and

may

commercial

prompt

urges

countries

one

Endeavor to arrange credits payable when goods are turned

(f)
over

Double Income Tax.

the

the
the

restoration

in most countries constitutes an
business relationship between

world.

fluctuations of exchange are still
the sole depreciation

The depreciation

unfavorable economic

and

the

situation

inconvenient

of exchange, and

instability of exchange is
owing to the

war

due only

in such countries

its victims but

were

general lack of confidence and of knowl¬
countries whose exchange is depreciated.

some

Resolved, To denominate

follows:

run

also, to

edge of the real conditions of
Be

.'7^:

from

the

point

financial

and

those

study

view,

JOHN

in view

to be

steps

WILLIS

from

Therefore
of the

that

by the

During the past

Resolved,

That

Chamber of

the attention

Commerce be

the Board

called

to this

Directors

situation, and

be requested to consider the matter.

which
is

has been brought

characteristic

For

high prices

31,

That the existing

flow

import

export

by hindering

of ports which
contributes

trades

maintain

all commodities and to reduce the efficiency of the utiliza¬

the available

congestion

and

Protective Department.

and'the Department have been very active owing to the increase in crime

I).—Transportation, Including Freights.
Congestion of Ports.

tion

which is covered by this report, your Committee

year

the

period

1920,

after the

war.

any

Arrests.

September

from

beg

about by the unrest throughout the country which

conditions

of
..

Considering,

HEMINGWAY.

Protective Committee and

treaty, is often

peace

delay and serious inconvenience.

regular

BOOTH,

HAGEY,

■'

the

W.
.

of the allied nations created

International

they

Chairman,

Money Between the Five Allied Nations.

any

with

attended

WADE,

better

Whereas, Transmitting of money or credit, particularly in small amounts,
or

BOLINGER,

such countries.

in order to restore

taken

exchange if not its stabilization.

Transmission

FESTUS

JOHN

rate

submitted,

Respectfully
,

interested

each

determine the actual value of the money in
2.

building at 33 Rue Jean-Goujon, Paris, where the business of the

duties will

committee whose

situation

respective

economical

special

leased

organization will be transacted.

:v-;;

the

study

countries
to

CONVENTION.

BANKERS'

140

report

1919,

the

including August
against criminals, as

to and

operations

follows:
Total

':Avv'not

cases

Total

.■

disposed of, arrested prior to Sept. 1, 1919

since

arrests

September

223

476

1919—

tonnage.

■■

■

699

Considering, Moreover, that it would be possible to remedy to a certain
this

extent

the

situatoin

exact

conditions and

international
the

trade and of

situation

their

interior.

It is

to the

ports able

parties

in the

to participate

study

;

•

created

by the

died

trial

the

International Chamber

facilitate

all

operations of

Since

September 1, 1919, up to and including August 31, 1920, there have
and attempted burglaries on members, and similar crimes

non-members,

follows:

different

•

Non
Mem

relative

and

ports

shippers, consignees and

the

distribute

can

informa¬

this

the different countries

owners

which

services

bers'

Alabama.
Arizona

....

Arkrinsds

California

/=■,?;-..t-

government

represented

different

International

well

countries

their

measures

the

should

power

ports of each

B.,

and

used

modified

and

all

take

hasten

the

necessary

operations

country.

I. F.,

etc.

3
7

1
3

North Dakota..

Georgia.3

Oklahoma

the

That

exact

international

clearly

Quotation

defined

signification
and

parties

and

from

Chamber

all

other

should

contracts

of Shipping

Dictionary

the International
of

these

of
sale

"International

Iowa

4
4

Maryland
Michigan

Commerce.

successful

The

between

commerce

Recommend,

That

international

should

passports

promptly simplified in all countries, members of the International Chamber
of

Commerce

less

than

visa

Maritime

Recommends,
unification

That

works

said

International

the

Commerce

the

following figures

International

Committee

for

have

which

soon

the

been

possible by the

in connection

the

for

whose head office

unification

was

lately at Antwerp.

E.—Production, Industry and

and

burglaries,

attempted

Protective

Features, such

Non-members

competition

legal experts;
cision,

the

study

different

that

consider

Maritime

the

English

various

fit

International

countries

put

brake

the

business

special

essentially

unfair

that

the reports

bodies

the

will

trade-mark,

property,
prepare

attached

submitted

deserve

wish

this

by the French, Belgian,

form

the

amidst

see

Commerce, the

work

general

study

names

basis

serious

creation

the

first

acts

the

appropriate body

headquarters.

questions of

The

unfair

duties

these

industrial

competition,

of origin and misleading indications and

submitted

the

general

meetings,

the

thus

reports

Bureau

for

Returns

necessary

Hon.

Dr.

the

duty of

greater

which

shall

movement

Etienne

Edouard

was

organize

output,

once

and

statistical

returns

portable needs

_....

bers.

....

Ohio

Oklahoma....

Rhode

2
2

Utah

Wash! ng+on

West

„

Tennessee

Kentucky

Pennsylvania

Kansas

Island

Minnesota.

—

1
I

Virginia.

Michigan

....

■'V,.

M assachusetus

„

.....

■

•

w«»'

Virginia

•

______

"*5

...

with

Our

the

loss

them,

---

It will be noted

but

22,672

other

all

been

loss of $455,966.56.

hold-ups

attacks

hand,

non-members

attacks

rarely

members than

taken

there

into

record

9,740

by burglary, attempted

non-members

consideration

only

are

that

during the past

the

Association

non-members.

The

given to show the comparison of the attacks

are

attacks

report

not obtain

losses.

and

them, also the exact loss

that

that there have been

must

non-members

with the result

hold-ups

members

percentages

the

attacks

burglary and

there have

rule, report

the loss,

these

members with

$223,920.24.

while,
or

hold-ups

period

same

members,

sustained;

has

following

members

and non-members:
M embers.

N on -M embers.

Number.

Percentage.

Number.

296

.01306

220

.0226

226
70

.00997

168

.0172

.0054

Attempted Bur¬
glaries and Holu-ups
Burglaries
and
Attempted
Burglaries
Hold-ups

Percentage

Burglaries,

president

general secretary.

past

Protective

.00309

received

year

from

the organization

September

Department has received

communications

from

our

detective

1919,

August

several thousand reports

agents.

The

Department

31,

1920,

and other

has

also

1,307

These figures

letters and telegrams, written 2,197 letters and telegrams.
do not include circular letters and similar communications.

the

Photographs.

together
The

import in each country.

elected

date the

be to keep up to

export and

Clementel

Dolleans

pro¬

to intensify the productions made all the

shortage,

productions, the productions
the

New Jersey
New York

During the

Production.

ducers and in order to help them

with

Nebraska

Correspondence.

general meeting-decides in order to facilitate the efforts of the

bureau

Non-

Mem¬

bers.

Iowa

the

main

....$3,769,054.28
498 758.82

Mem¬

ju¬

printed and addressed to the delegates 60 days before each general

Statistical

—

bers..

meeting.

The

of the

?3,203,895.46

Indiana

year,

the

Chamber of

nature

...

Colorado

de¬

any

different

at each
national Chamber of Commerce, the creation of. an appropriate
body at each national bureau, under the direction of the organization of a

similar

I<OS8._

Mem¬

....

There have been

first of all, and before taking

legislations

Delegations,

expresses

inauguration

Montana.

Unfair Competition.

means

associate

necessary,

the

Moreover,

and

the

since

/OSS

1.G79

California

M issouri.

and

deep study,
The Congress

811

Arkansas

some

Whereas,

banks,

$169,355.56.

of reported- burg¬

M ississippi

matter.

Italian

information

your

.1,890

...

bers.

During

That the

$153,-

was

known:

are

Difference

Competition.

Whereas,

successful burglaries and

were

conection with burglaries

given for

are

Connecticut
Illinois

committee.

Commerce regulations,

will

128

by members in

Non-

Committee

Regulations,

be resumed

war,

And, To that effect, request the Board of Directors, to get

dicial

sustained

Louisiana

Maritime

interrupted by the European

Unfair

non-members,

Mem¬

commercially unworkable by private enterprise.
Commerce Regulations.

the

168

59 un¬

burglaries.

.V"

would

225

successful burglaries and

Hold-ups.

Subsidies.

which

1
—

were

materially reduced.

Unification

with

" y;

Considering, The bad results given in the past by the system of subsidies,
Recommends, That all subsidy should be done away with, with the ex¬
ception of shipping services having a character of public necessity and on

above

The

...

252.88, while the loss sustained by non-members amounted to

the period of validity of visas be fixed at not
and the cost charges either for delivery of passport or

year

....

particularly

one

Abolition

routes

attacks

loss

laries

countries.

the system

3
2

—1.

Washington

members, 166

burglaries.

the

unsuccessful

Considering, The serious obstacles the present system of passports causes
the development of international traffic, and to the return to normal

conditions

attacks

12
....

the

secure

publicity and utilization of this dictionary.

1
x

Utah...
Virginia.

...

2
5

Tennessee

-:2

Missouri

Commerce should take steps to

Texas

...

Nebraska
Of

...

Minnesota

Passports.
to

Louisiana

interested

5
4

25 i Pennsylvania
16 South Carolina
6 South Dakota.

....

Mississippi

transportation

Terms," issued by

Indiana

Kentucky

shipping terms and quotations such

Ohio

Illinois.

Kansas

That the International Chamber
the greatest

asked
and

The inconveniences resulting to all

Recommend,

terms

facilitate

authorities

competent

Dictionary of Shipping and Quotation Terms.

Considering,
F.

other

all

the different interpretations given to the
as

161

—

■

information

■

That

all

538

Burglaries and Attempted Burglaries.

Colorado
3.

insane

and

particularly the transportation to and from the

all

from

the

represented.

be taken to

V;'-v1' V j;V;';--

centralize

expected

tion

escaped,

"r'.7

of Directors:

measures

in the port, and

interior.
2.

Released,

•

been burglaries

vessels

356

182

Awaiting

Board

Commerce:
1.

Convicted

possibilities of transportation to and from

committee

permanent

interested

the

recommended

That
of

by constantly keeing informed

and

The organization has

Department

burglars,
with

hold-up

now

men,

has
sneak

6,775

photographs

thieves,

complete record of each.

forgers and

criminals,

bogus

comprising

check operators,
-

BANKING
'V

Offices of Our Detective Agents.
The

William

offices

and

one

and

Burns

special

International

Detective

representatives

this

oiie

Agency,

Inc.,

three

country,

financial.
Committee have made

Committee

covering the

report and

disbursements

■

during the period

attendance

this

was

will

the members of the

PROTECTIVE

THE

the

meeting at

Pinehurst

Association

the

America

Secretaries'

was

Fred E. Garrison and R.

consideration

the

represented

that

prepared.

was

issued

the

from

forty

the

by Messrs.

standpoint

believe

Special

Walter
A

special committee

Havres,

and

decided

ciation's

Copies

Section, a new'
Committee has prepared

protection

licensed

the

write

ever

form

new

from

members

all

entire

bers

Esch

30,

the

return

the

committee

placed
and

Council

the

and

the suggestions of the committee

Esch-Cummins railroad
The

credit

urge

the

measure:

the railroads

With

been

has

J. N.

fabric of

transportation and endanger the business of the

present high cost of living would thereby be driven higher.

that

the American

American
what

ciation

Bankers'

railroad

favor

That

stocks

credit

the

soon

railroads

Congress

Y.;

Ins.

Co.

North

Pa.;

Indemnity

Globe

America,

Maryland Casualty Co., Baltimore, Md.; Massachusetts
Bonding &
Boston, Mass.; The Metropolitan Casualty Insurance Co. of
New York, N. Y.; National Surety Co., New
York, N. Y.;

permissive
exclusive

Federal

Com¬

establish.

may

incorporation.

regulation and control of the

railroads and water

issue

and

carriers,

common

of the

months,

favor

the

after

the

such other board

guarantee to all railroads

government

end

Federal

standard

return

control,
the

for

six

for

operating

net

period

same

income

Federal

during

control.
That

ten

for

twenty
That

joint

allowed

providing
to

aggregate value of
this

earn

their

Head,

Nahm,

Max

may

reasonable

annual

be to

whole

People's

president

Detroit,

Banks),

the

Bankers'

30,

1919,

chairman,

president

Bank

Mich.;

Trust

Louis,

Co.

Mo.;

under

whole,

railway

net

cent,

the

York,

Y.;

America, New York, N. Y.; Hartford Accident & Indemnity
Conn.; Indemnity Ins. Co. of North America, Philadelphia,
Insurance Co., Jersey City, N. J.; Inter-State
Casualty Co., Birmingham, Ala.;
Inter-State
Surety Co., Redfield, S.
Dak.; Iowa Bonding & Casualty Co., Des Moines, Iowa; Kansas
Casualty
Pa.;

International Fidelity

Surety Co., Wichita, Kan.; Lion Bonding & Surety Co., Omaha, Neb.;

N.Y.;
Indemnity Co. of America, New York, N. Y.; Maryland
Md.; Massachusetts Bonding
Insurance Co.,
Boston, Mass.; National Surety Co., New York, N. Y.; New Amsterdam
Casualty Co., Baltimore, Md.; North Dakota Bankers' Mutual Casualty
Co., Fargo, N. Dak.; Northern Trust Co., Fargo, N. Dak.; Northwestern
London & Lancashire

Casualty

Trust

Cooke,

Rawson,

by the

Association at the

Chicago,

111.,

the

National

Special
close

following

Bank,

Bank

president

Fred

president

Omaha,

(ex-president
W.

Staley,
City

Reserve

National

Columbia

Banker Economist),

Trust

Co.,

Marshall & Ilsley Bank,

Collins,

Federal

Union

Co.,

Baltimore,

Co., Grand Forks, N. Dak.; Ocean Accident & Guarantee Corp.,
Ltd.,
Y.; Republic Casualty Co., Pittsburgh, Pa.; Royal Indem¬

National

vice-president

Milwaukee,

Bank

Legislative Committee, A.

Chicago,
of

Com¬

Commerce

A.),

Mem¬

New

York, N. Y.; Union Indemnity Co., New Orleans, La.;
Deposit & Trust Co., Portland, Me.; U. S. Fidelity & Guaranty
Co., Baltimore, Md.; Western Accident & Indemnity Co.,
Helena, Mont.;
Western Indemnity Co., Dallas,
Texas; Western Surety Co., Sioux Falls,
Safe

South

Dakota.

submit

also

form

the

over

policy-holder to
three

Committee

George

Holderness, Chairman.

and

work

its

glarized

held

received

680

letters.

Every member that has been

bur¬

has been written to regarding his loss, with a suggestion
be sent by registered mail to the Secretary

the policy covering same

Committee

this

member

the

for

inspection,

liability of

that the

Committee

can

advise

the

the insurance company.

The Secretary of
the Committee has likewise written to all non-member banks, pointing out
to

them

A.,

the

they

advantages

and

advising

them

will
of

enjoy

the

services

becoming members
that

your

committee

the
may

perform for them in the adjustment of claims and advice as to policies.
Your Committee held three meetings during the year: at Atlantic City,
Sept. 8 and 9, 1919; New York City, Jan. 19, 20 and 21, 1920, and

the insurance

granted

under

each
as

the

applicable and the period during which it applies
reading through the entire policy.
Indemnity paragraph No. 1 is broader than the corresponding General
Agreement A in the 1918 form, and this paragraph now provides for in¬
.

surance

which

vault

vault located in the

located

anywhere in the assured's premises,
any part of the building occupied by the assured or
employees exclusively, whereas the old form applied only on

includes

his officers

safe

now

sections

the

may

banking

premises
some

This broadening of the clause

room.

occupied

instances

the

assured's

officers

engaged

another

all

loss

line

business.

Indemnity

occurring in

the period covered by this report the Insurance Committee,
through its Secretary, has written 1,126 letters and opinions in relation

glance

insurance

without

During

see

indemnifying paragraphs, and also shows the limitations

amount

employee^ who

Insurance

|
a
short digest of the
advantages of the new
copyright form of bank burglary and robbery policy:

herewith

1913

1. The general rearrangement of the
policy form for the purposes of seg¬
regating the various clauses and agreements so that they will stand out more
clearly in their relation to each other.
This
arrangement enables the

includes

our

Co., Hartford,

the

write

Fidelity & Casualty Co., New York, N. Y.; Fidelity & De¬
Globe Indemnity Co., New York, N. Y.; Guar¬

Co.,

committee.

York, N.

Richard S. Hawes, president American Bankers' Association,
ex-officio member; Thos. B. Paton, general counsel of A. B. A., secretary

Report

licensed

antee Co. of N.

nity

Tenn.;

phis,

been

posit Co., Baltimore, Md.;

New

(ex-president Association

vice-chairman,

(chairman,

have

Ohio; American Indemnity Co., Galveston, Texas; American
Surety
Co., New York, N. Y.; Bankers' Limited Mutual Casualty Co. of
Wisconsin,
Milwaukee, Wis.; Columbia Casualty Co., New York, N. Y.; Dakota Trust
Co., Fargo, N. Dak.; Employers' Liability Assurance
Corp., Ltd., New

of railroad property

value

Omaha

Citizens'

Thornton

Lonsdale,

St.

merce,

Mont.; Western Surety

bus,

Puelicher, vice-president

following thirty-eight companies

provision be

unanimously adopted

were

American

December

State

Indemnity Co., Helena,

Dak.

1913 copyright form of
Fidelity Schedule Bond: Aetna Casualty & Surety
Co., Hartford, Conn.; American Bonding & Casualty Co., Sioux
City, Iowa;
American Fidelity Co., Montpelier, Vt.; American
Guaranty Co., Colum¬

Union

vice-president

Mo.;

City,

Wis.;

per

that

and

(ex-president Missouri Bankers' Association and

Kansas

Bankers' Association), Bowling Green, Kentucky; J.

Kentucky

111.;

Western Accident &

The

being present:

Walter

Bank

minimum

shall

carriers,

railway

nearly

recommendations

conference

Neb.;

aggregate

Commission,

the

property

their

ascertainment

Committee

members

Commerce
that

commerce,

joint rates and of the division of

purpose.

above

The

Railroad

the

period of from

all rates that affect interstate

Interstate

rule,

made for the

indebtedness

serially for

Md.;

London & Lancashire Guarantee & Accident Co. of
Canada, New York,

•operating income equal

for

the carriers'
run

years.

by the

rates,

expenses

and minimum rates and

statutory

shall

extension

capital

the regulation of

of maximum

there

Government

The Preferred Accident Insurance
Co., New York, N. Y.; Republic Casualty
Co., Pittsburgh, Pa.; The Royal Indemnity Co., New York, N.
Y.; South¬
ern Surety Co.,
Des Moines', Iowa; The Travelers Indemnity Co.,
Hartford,
Conn.; Union Indemnity Co., New Orleans, La.; United States
Casualty
Co., New York, N. Y.; United States Fidelity &
Guaranty Co., Baltimore,

consolidation

the Interstate

Congress

Casualty Co., Baltimore, Md. ; North Dakota Bankers'
Casualty Co., Fargo, N. Dak.; Norwich Union Indemnity Co., New
York, N. Y.; Ocean Accident & Guarantee Corp.,
Ltd., New York, N. Y.;
Mutual

Co., Sioux Falls, S.

establish.

may

That

equal

transportation

to which the proceeds of the sale of such securities may be

purposes

and

voluntary, but not compulsory,

Asso¬

;

practicable.

look

opinion

railroads

the

applied, by the Interstate Commerce Commission,
as

their

subject to the approval of

favor

bonds by

such other board

favor

we
we

return

the

properties,

Commission,

merce

the

will

assembled

expression

recommendations:

to private ownership

That

Congress
an

Committee of the American Bankers'

the

favor

and
for

rehabilitate

the following

That

public

Association

necessary

presents

systems

N. J.,

Philadelphia,
Accident

Amsterdam

The

America, the Special Railroad

Ltd.,

Hartford

Insurance Co.,

New

whole

the

that

Corp.,

Y.;

York,

Believing

Indemnity

New

land.

Assurance

York,

physical conditions and lack of equipment, if not remedied, will break

bad

impaired.

the

America

Life

Conn.;

mem¬

into

written

were

Indemnity Co., Hartford,
Philadelphia, Pa.InterState Surety Co., Redfield, S.
Dak.; Iowa Bonding & Casualty Co., Des
Moines, Iowa; Kansas Casualty & Surety Co., Wichita,
Kan.; Lion Bonding
& Surety
Co., Omaha, Neb.; London Guarantee & Accident
Co., Ltd.,
Chicago, 111.; London & Lancashire Indemnity Co. of America, New York,

Clearing

upon

New

reso¬

Consequent

down

Fire

Co.,

the

forwarded copies

were

requested to

railroads.

hands

substance

the

Executive

were

the

membership of the Association
and

the

Congress these fundamentals in connection with the Cummins and

exception all

the

bills, and the adoption of legislation in accordance therewith.

one

Senate

and

House

the recommendations below,

December

covering

immediately

were

the

The

in Chicago,

legislation

resolution

the

wired

Houses.

the

Aug.

appointed in December by President

was

been

banks, and the following

this

Aetna Casualty &
Surety Co., Hartford, Conn,; American Bonding
Casualty Co., Sioux City, Iowa; American Guaranty Co.,
Columbus, O.;
American Indemntiy Co,,
Galveston, Texas; American Surety Co., New
York, N. Y.; Columbia Casualty Co.,-New York, N. Y.; Continental Cas¬
ualty Co., Chicago, 111.; Employers' Indemnity Corp., Kansas
City, Mo. ;
The Employers' Liability Assurance
Corp., Ltd., Boston, Mass.; Federal
Surety Co., Davenport, Iowa; The Fidelity & Casualty Co., New
York, N. Y.;
Fidelity & Deposit Co. of Maryland, Baltimore, Md.; General Accident,

Chairman.

Head,

meeting held

members

conferee

railroads

Committee

following fundamental principles as representing the Asso¬

attitude

lution

at
the

Railroad

Secretaries'

your

1920:

Report

Samuel

burglary and hold-up policy that has

companies have been

■■■

and the

form

copyrighted the best

the Burglary Un¬

policy after these meetings of the

1920

GAMMON, Manager Protective Dept.

Section

Mclnnes.

form

new

representatives of both the Companies'

COMMITTEE.

and

L. W.

rates

represented by several of the State Secretaries, and

BOWERMAN, Secretary.

By GUY E.

form

new

increased

Brewster,

Respectfully submitted,

the

derwriters'

Council.

meeting and

April

Messrs. R. E. Wait, M. A. Graettinger, W. F. Keyser
Edward, and the Burglary Underwriters' Association of America
represented by Messrs. W. P. Learned, Fred E. Garrison and others.

and

informatoin that is desired by

any

C.,

represented by

was

this

Gammon will

to furnish

pamphlets containing

financial statements.

Manager

covered

26, 27 and 28, 1920, for the purpose of
policy for burglary and hold-up, and also to
charged in, several of the Western States.
At the Atlantic City
meeting practically every company that writes a
bank burglary and hold-up business in the
United States was represented.
At the meeting in New York
City the Secretaries' Section of the A. B. A.

general statement will be found in the

141

Pinehurst,

consider

Canada

detailed statement to the Finance

considering

has

now

England.

The Protective

pleased

SECTION.

ited

the

to certain

hours.

safes

This

the most

No.

vaults

or
a

located

paragraph

securities,

The

old

whereas the
also
5.

and

form
new

persons

The

fied and

tiable

extensive

very

covered

form

defending

definition

No.
the

niture and fixtures therein,
at.

extended

cover

by robbery

part of the assured's premises, whereas the old form lim¬
certain

parts

thereof and to specified

broadening of what has developed into

important coverage under the entire

Indemnity

money,

paragraph

any

robbery insurance to certain specified parts of the premises and

has

been

premises,

policy.

extended

and

caused by

burglary
only such damage

all
or

safes,

cover

vaults,

robbery

damage
office

fur¬

attempt there¬

as was caused by burglars,
damage caused by robbers and
against either burglars or robbers.

extended to

of securities in

cover

the

new

policy has been greatly simpli¬
policy shall mean all nego¬
non-negotiable instruments, whereas the old form named a number

now

reads,

"Securities

used in this

BANKERS'

142

limited the insurance on these to

negotiable securities and

CONVENTION.

instruments

negotiated, the assured
bad
the former policy this
clause also provided that the actual cash or market value of the securi¬
ties at the time of the loss should determine the amount due the assured,
while another clause of the policy provided that any property lost or dam¬
aged could be replaced. I This clause would permit the insurance company
to replace securities if they had declined in value at the time of settlement
pay the value at the time of loss if the prices had advanced.
The new
form fixes the company's liability at the time of payment of the loss.
A new condition specified as Condition B has been inserted into the
form, covering securities held by the assured for safe-keeping and
of which the assured has a record, while in the old form such securities

negotiable character as respects which, when
no
recourse against the
innocent holder.
In

write

policy giving the broadest coverage.
Committee also desires to express its regrets

Your

at the resignation of
counsel have been of inestimable

whose advice and

John R. Washburn,

Mr.

committee in its effort to

who have met your

companies,

insurance

the

value.
^

Respectfully submitted,
GEORGE

HOLDERNESS,

Chairman.

SANDS,

L.
O.

FORMAN

GAMMON,

Secretary.

new

endorsement.
clause to the effect that the company would
not be liable for loss from, or contributed to, by explosives, except only
when Used by burglars or robbers, which clause has been eliminated from
the

form.

new

D of the

form.

the

forth the 10%

chest therein and in any vault

contained, provided

was

whereas the new

within the premises."

located

Condition

safe outside the

the

entitled, "Misstatements in Declara¬

form,

provides that such statements not

tions,"

fraudulent in the description of

protective appliances or in any case a failure on
the part of the assured to maintain any service agreed upon in the declara¬
tion, the insurance under this policy shall not be forfeited thereby, but if
by reason of such misstatements or failure on the part of the assured, the
hazard under this policy is greater than contemplated thereby, the liability
of the company shall not be changed, but the assured shall pay to the
company
such additional premium as may be shown to be due at the
rate for the actual hazard in the company's published manual of rates in
force at the date of this policy.
This condition of the policy is practically
the only difference existing as to the form of the policy between your
Committee and
the representatives of the insurance companies.
Your
Committee contends that it is the duty of the agent to see that the safes,
vaults, etc., are properly described, and that he is the agent of the com¬
pany instead of the assured, and that the company has the opportunity to
check up the statements concerning the safes, vaults, etc.
The companies
contend that the agent represents the assured in this particular and that
the companies are entitled to know the risk' that they incur.
Your Com¬
mittee is very firmly of the opinion that the bank is entitled to the amount
of insurance applied for and that if a loss should occur its recovery should
not be reduced by reason of some misstatement having been made of which
the assured was not cognizant, and is insisting that the policy should be
safe, chest or vault or

any

the old policy, entitled, "When the
fraud on the part of the assured and
makes the policy void if immediate notice is not given of any lockout, has
been entirely omitted from the new form.
This clause also made the
policy void if the conditions or circumstances were changed so as to ma¬
terially increase the risk without the written • consent of the company.
No.

Special Agreement

10.

Policy is Voided," and which refers to

also been eliminated.

This has

J of the

Condition

been amended

form, containing the cancellation

new

by extending the time for notice from five days to ten

clause has

days.

in case the policy is cancelled
at the request of the assured, whereas the old form provided for a pro rata
earned premium, regardless of which party cancelled the contract.
The
new clause permits the company to suspend the policy,
if, upon inspection,
it is found that the safe, vault or premises are not in an insurable condition,
the suspension to remain in force only until any necessary requirements
provides for short rate earned premium

also

complied with.

are

Condition

12.

the total membership of the Institute's first fifteen years of
existence.
To-day we have a membership in excess of 36,000.
We think
the institute is ripe for a big increase, because last year without any
equal

the

Condition

13.

between

L of

companies in

provides

form

new

for

Iprovided there is

loss,

automatic reinstate¬

complete restoration

new

figures
show

than one company insures the same

3 of the Declarations of the new

form) reads as follows:

of not less than
be

persons,

It is
as

risk

impossible for

your

form

(called the Schedule

"The working force of the bank consists
or more will always

business."

This provision was

policy.

the

Committee to arrive at any intelligent opinion
rates, as we do not have sufficient data

would

Insurance Companies,

endeavor

but have been promised by them that they

give us full statistics as to premiums and losses in suf¬

ficient time to enable us

to make a report at

this meeting.

We have been

Association
are segregating their bank business, and that, while some of the
companies have completed their work, others have not been able to do so,
but they hope it will be possible to furnish us the data during this Con¬
advised

since

by the Secretary of

the Burglary Underwriters'

that they

the virile leadership of the new president, Stewart D.
Beckley of Dallas, the active and carefully planned campaign of the
membership chairman, Bert V. Chappel of Cleveland, and the able and
constructive work of the publicity chairman, George S. Bartlett of Boston.
Observers will perceive that many men and womert in the banks of the

chapters

three

safe in saying that there were at least
committees.
These committees

thousand appointed" to local

four

and every member of a committee is better off to-day for this
opportunity than before.
It gives me pleasure to state
before has
a
president of any organization had more co¬

operate
that

never

committees, members

from administrative officers, chairmen of
or
presidents of chapters than have

operation

committees

their

year

vice-presidents; over eighty-five secretaries and
Almost every man who has gone through

number of treasurers.

same

mill

that

this the

honest

owing to

undertak¬
also the large number of bur¬

Committee

Your

has

the Insurance

with
case

adjusted

large number of claims for our

institute is in

Companies,

and we take pleasure in stating that

that was taken up by your Committee with the Underwriters

Some claims, of
the banks believing that thy
were entitled
to coverage, but the Committee advised them thut they were
not entitled to recover from the Companies under the policy, but practically
all
these cases were where their depositors were the losers and not the
banks themselves and the insurance only covered the property of the bank.
been

adjusted to the entire satisfaction of the banks.

were

presented to the Committee by

Committe

wishes to

tion of the services of Mr. B.

take

offer

On top

It is the quickest

dealing.

acquaintanceship that I have ever seen and the co-operation be¬
bankers is manifested here to the great benefit of the banks of this

tween

country.
added the technical training that is given

the above is

all

With

work.

this

harness

technical. side

directly

in*

our

every-day

the

practical work of the banker and he sees the "whys" and "wherefors" of
he

all

A man thus trained loves his work

We vivify his job.

doing.

whose work is measured by the clock
indigestion.
To give you an idea of the number of men and
women thus trained,
let me say that last year we had a greater class en¬
rollment than Harvard and Yale combined and this coming winter will
he

where the man

digests it;

mental

look

this

education

bank clerks

eighty-nine,
Portsmouth,
This

Tulsa.

increase

gives

Elpaso,
to-day

well.

During this last

attending

bankers'

six

year

Pinehurst.

have

and in

Institute

the

made

I have had

Stamford,

chapters,

are

the

Erie

and

State

five

and

all alive and functioning

opportunity and pleasure of
presidents'

chapter

two

the fol¬

and city chapters in

Minnesota
Watertown,

Houston,

To-day

conferences,

meeting of the American Bankers' Association at

visited

addition

had eighty chapters.

eighty-three. city

conventions,

and the Executive Council

number

craving for this

banks which appreciate

chapters

nine

These chapters

correspondence chapter.

one

State chapter in Illinois and

Norfolk,

those

Louis convention

the time of the St.

have

There is positively

boast.

idle

good

outside study.

ad\antage of
At

lide

among

altogether sixty

the other

cities

national officers

the

interest

have been to

the

equal

chapters.
found to be

without

exception the most inspiring and instructive journey that a man can make
his lifetime.
the

the

invariably
is

glad

city.
they

to pass on

them.
their
The

constant

are eager

bath

electric

inspiring—it

anything to the
a

spirit

next .chapter

of remarkable

New

Orleans

year,

whether

Convention

from

pure

political

please their

you

the best there

be of assistance

may

desire

"bosses,"

standpoint

look at is from

the

best

give the
has

taken

social, political

six hundred

American

that

men

Institute

and women
of

Banking

wild burst of enthusiasm and it

nor

inborn Americanism and the

economy.

that

unselfish

economic

passed the following resolution with

Secretaries' Section, who attended the various

for these men are

in hard work and co-operation.

business platform, was when one year ago

not

is,

to hear of the experiences of other chapters and

biggest achievement from

the

currents, for one passes

city to the hospitality of live wires

one

was

abilities to their chapters

place during the last
or

I have said it

working their hardest to give the local chapter

in them,

It is

hospitality of live wires in

done

also Messrs. Brewster, Garrison and Mclnnes, representing

can

A. Ruffin, former Secretary of the Committee,

also the members of the State

conferences, and

this opportunity to express its apprecia¬

class by itself for developing straightforward

judgment and square

sound

arguments that

administrative ability.

teach

school to

great

strongest

One of the

success.

a
are

thinking,

avenue

mem¬

or¬

train and graduate over eight-five presidents of chapters

about twice as many

this

any

the institute.

than

cause

Each
and

has

nor

intelligently industrious servants for

ganization ever had more devoted and

from

Your

were

team

national organization and

every

are

There
the

ing, and to adjust the various differences,

has

and

Co-operation

getting up this new form of policy, which, of course, was a.great

course,

benefitted by the part they have taken in the campaign.
work among members of committees and among
fundamental to the building of character and ability.
three hundred members appointed last year to committees of

country have been

My travels in the interest of the Institute I have

past year has been a vrey active one for your Committee,

glaries and hold-ups during the year.
bers

because

place

vention.

The

It cannot help taking

result.

proving that this increase will

figures are

lowing:

to the fairness in the increase of

from

fiscal years 1919 to 1921 the membership

The

members.

in 1919 to 48,000 in 1921, in other words will
half-way mark has already been passed and

24,000

from

jump

double

of whom

present when the premises are open for

not in the schedule of the old

prophesy that for the two

will

this case I know the

by figures;

measured

are

telling the truth and that the various statistics that we can
direct telltale of what the Institute is accomplishing.

are

well.

members.

their

sometimes

Results

make

Item No.

14.

drive at this time will not

demands

results

better

and

ease

quantity but in quality

has

concurrently.
in the old

and have determined that a national
only increase our membership in
One proof of this is that attendance in
classes shows a greater percentage in increase, so that we find chapter after
chapter having been forced to give an enlarged curriculum to fill the
greater

and

case

ideals that we can

and

spirit

Institute

have grown so strong
handle larger quantities with

quality instead of quantity, yet we

believe in

that existing before the

not provide for any

the

drives from the national organization we
members a month above de¬

agumented our numbers by the one thousand
scribed, or a net increase of over 50%.

reinstatement of the insurance.
form provides for a pro rating of the loss

to a condition equal to

safety appliances
The old form did

loss.

class

the insurance after

ment

number

membership will increase in one year by a

paign now going on our

the
11.

the last American Bankers'

and with the big membership cam¬

St. Louis,

administrative

it.

with this clause as part of

written

of Banking since

Institute

convention

membership

new

month graphically describes the growth

members a

new

American

the

special coercion to membership

the new form more clearly set

The old form granted 10% coverage in a vault in which
the vault was described in the schedule,
form in Condition F grants 10% coverage "in any vault

premises.

safe

insurance

automatic

the

forth the insurance

the insurance companies.

of both the banks and

Conditions E and F of

form more clearly sets

new

in the chests, safes and vaults, and in safes having a round or
was contained in Special Agreement No. 10 of the old
The old form in this respect was a source of misunderstanding on

door, than

the part

thousand

One

Association

7. Condition

granted
screw

by Gardner B. Perry.

The old form contained a

Institute of Banking

Report of American

only covered by special

were

for

"swipe"

privileges,

acquired knowledge

was

but

derived from

BANKING
"We believe in the equitable

opposed to all

are

duction, and in
posed

members,

the

chapter

one

crisis.

them

United

States

big cities

our

last

the

promote

and

year

pro¬

unalterably
welfare

our

editorials

"With

bound to

the

chapter

after

would stand

men

newspapers

Institute of

American

country

our

financial

ibued with the

Banking

writing

are

and .that

one

and

individuals

the

making

expressed in the above resolution,

the

country

our

is safe,"
And

the

Saturday

part:

Evening

Post

five-hundred-word

continent

proved

will

local
fed

that

promise

chapter.

endorsed

himself

avail

Law,

bankers
engage

and

medicine,

well-established and highly

higher

business

and

vocational
"Men

might

Highly
and

calling.

placed in

establish

the

have

Boston

and

taken

last

development of the

tion

that

similar

who

theirs,

the

in their

men

their

have

and

had

the

enthusiastic

part

woman

the back

human

touch

clerks

younger

over

cannot

for

and

the

one

members,
does

not

commenda¬

interest

shakes

you

closing I

wish

the

work

their results

and

idea

addition

make

can

conceived

of
is

likes to

high mark in

That kind of enthuisiasm

executed
are

please let

Priscilla

outward

delegated

nor

others

The bank

proxy.

offi¬

the

those

who twenty

men

organization of the

years

institute.

ago

Their

advertisements.

our

what

repeat

visible

and

the

Bulletin,

is but

I said

sign of this work

and

small

"Uncle"

moving
truths

think

at the

that

twenty

and

him,

arid

accounts

Report

itself

November

would

short

Boston convention

speaks

volumes.

The

but it is

institute;

say:

and

will

have

concisely

words.

direct

of ideas swings

from

been

our

long

states

calm

extreme to the

one

the discontended toward bettering them¬

Because

after

that

home

with

honest

but debtors

are

intent

credits

their

Mr.

Andrew

has

tered

ledger.

the

16,

Hotel,
and

Pa ton,

After

General

Chicago,

counsel

the

and

for the

Federal

this

the

meeting it

legal

end

his

ment

The

tion

Bankers'
with

way

"That

Board

Dowling

also attended by

was

Paton,

the

was

reference

sense

the Attorney

the

was

Federal

that

Re¬

such

plaintiff could be found.

when

controversy,

Counsel

Five

and

only in

the

that

Mr.

least until

Paten would handle

into

got

the higher

resolutions

and

the

Paton

state

American
Five

itself

American

communicate

that

the

with

the

Administrative

chairman

Committee

the

desired

shall

when

protect the
mail order houses and big city
of the smaller banks of the

DOWLING,

the

Five

Bankers'

shall

the

bank

select

Association

Administrative

Association

into

whose

suit

name

the

attorneys

should

not

the

case

any

eliminate

the

appear

from

Council

the

seemed

situation

to
the

and

Committee

condition of inocuous desuetude.

in New Orleans

Protective

indeed

was

work

formerly

that,

the

Chairman.

Clearing

Hill, who

with

deep

learned

House

secretary of this

was

that

regret

his

passing

shortly

Mr.

Hill's

his

away

Last January, our present secretary,

connected

with

the

although

the

with

Bank

Mercantile

Trust

Company of

congratulate him

feel that his return to

San

He has

year.

en¬

well during

his advance¬

the West

means

section.
was

valuable to the

period has been equally beneficial

war

readjustment.

association

the

Obviously,

the

banks

during

best

can

na¬

these days

work

all

but

and

organizations.
members

are

the

problems

together

Out of the 255 associations in
this

that

section.

are

activities

The

solved

differ

may

localities, but the spirit of mutual helpfulness that is

closer

contact

with

brother

bankers

bring about, is well worth while.

that

meetings
hoped that this spirit will

to be

aroused by

clearing-house

continue to spread so that in due course every city with three or more banks
will have its clearing-house association that will be
vigilant in guarding

against

frauds

and

imposition

and

keen

looking after the interests of

its members.

When

this

question

section

that

was

that

Reserve

certain

chief
of

Banks

sections

St.

Louis

affording

importance

exchange.

have

the

organized

was

action

united

The

practically

country,

where

fourteen

the

collection

solved

the

ago,

departments

this

problem

the majesty

even

years

opportunity

for
the

except

the law

has

been invoked to make the collection of

a fee by the
payee bank when checks
by it in the mail not only legal but compulsory.
If a bank's

received

are

customer

points,

desires

cash

immediate

interest charge based

by the Federal Reserve

tirely

matter

Reserve

interest

for

where

the

collection

find

items

deposited

minds

will

has

been

com¬

collectible.

The

their

while

the

take

the

customers

soon

all

rule,

the

and

time

essetnial

The

the

theory

some

clearing

en¬

adjusted

concerned.

vigorously assailed in

charge has been

worth

hope,

satisfaction

time

exchange

well

let

the

other

time taken for collection

Bank schedule is properly

that,

System to

the

credit for

the

be made when the item reaches its destination is

may

different

all

nanks

the

there

Association,

was

organized

composed

the

banks

National

which

State

believed

securing

amendment to

the Federal Reserve Act, making

the cities where there

Reserve

with

it would

the

local

upon

possible,
kind

Federal

examination,

will

loans.

continue

world

thanks

this

advice

for

quar¬

houses

impress clearly

difference

never

the

strict

between

the

method

credit

that

asset

of the

into

situation

his

where

house

exam¬

association.

occasions

many

would

the grossest

the clearing

comes,

information

of rascality or

get itself

idea

members

were

uniform

supervision

cases

valuable

any

mean

possession

that time

have

clearing houses

would
full

bank to

most

are

except in

Until
be

will

his

With

be difficult,

insolvency threatened.
iner

System,
examiners

mismanagement,

The

which,

knowledge and position, he has been able to give the word
duly noted means the avoidance of grievous loss.
In

which

cities,

the examiner

proving his worth,

the idea

has

long

that

passed the experimental stage.
this

the
If

Reserve

number,

from

far

market

source

note

that

forms

the

known
checks

prophesy
as

the

country

future

clearing

both

commercial

the

its

the

advocated
credit

Until

this

through

question

country clearing house,

paper

its

concerns

brokers.

the

form

taking

whose

While

our

interested

features

have

the

been

has

four

now

statements

even

statement

notes

form

completeness warrants,

those

main

strongly

accommodations.

committee

case

that

gratification to
some

charge.

profitable.1
seek

prepared by

indorsement

without

cases

always

who

house .and

points where an exchange fee is
System succeeds in its plan to put the country

maintenance

has

usefulness

is clearly

have

easy

associaion

Reserve

bank

section

universal

not

collection of

the

customers

basis, then all checks will either be collected direct

finally decided,
in

city

for the

par

moment,

adjunct of
operated

especial

right to charge exchange for transferring funds deposited with them
to some other point in the country.
This organization had a meeting in
Washington in the first part of May, and their endeavors have been di¬
toward

President

spirit of banking co-operation that

country,

charged.

select

their

rected

that

and

clearing house furnishes the connecting bond.
Practically all
large cities have flourishing time:tested clearing house associations,
the banks in quite a number of the smaller cities have found it to

This

Bankers'

Feruary

connection

the

Committee

has passed

Bankers'

the act

way

the

advisory capacity.

committee

position

office

the

adopted:

were

such suit."
This

feel confident

that

see

the

outside

to be instituted.

"That

and

act

"That

and

Louis last year, tendered his reesignation

Matthew,

during the

bearing

ruling

The committee voted

the understanding that

following

General

Committee
that he

made

expense

McNally,

banking world,

loss

post-war

the

Association.

Mr.

test

meeting at

electing

The meeting

matter

organized

held

meeting of the Administrative Committee, held in New York

the

23,

same

eighteeen

the next

the

distinct

would

Dowling.

courts.

January

thoroughly into the spirit of his work and has done

tenure

upon

Five

in the courts.

as- soon

was

the

best

Reserve

was

action should be taken
At

and

American

the

that

Clearing System

serve

Committee

Wing secretary.

discussion

committee

the

1919,

full

surprised

interest charge and the exchange fee.

December

chairmand

the

amend

permitting the

met in St.

formed

Federal

Chairman.

Mr.

facts they will

in Boston in April of this year.

charge that

Thousands of bankers

Report of Committee of Five by

Salle

should

effort

every

failing health, Mr. Amos F.
we

associates

by him.

and

convention.

puted

delibertaely

section when

ters,

as a

Section.

and often with those who eagerly, wish to learn

directed

yet

his

but

the pendulum

and counsels wisely

him

that

truth about the Federal Reserve Act

Federal

years,

wisdom

when

He directs the strength

selves,
from

for

much

clock

other.

and

thing

much

very

hope of accomplishing anything during the present
felt

by the Federal Reserve Board.

make

were

country.

by the membership at

seen

part of what he does for the

George Allen who

spirit
and

the

Congress has the

new

various

tribute to

pay

and

love to

good sample of the greater work.

the

and

Banking and

Committee

such

was

par.

their advantage to form such

that of the clerk.

institute; that I wish to praise in the highest terms the great interest,
at much personal sacrifice, taken
by our secretary, Richard W. Hill.

Congress learns
is administered

attend to this themselves.

States

and

The

Bill.

Neither do they seem to know that the
obeying that provision of the clearing section
Act which says that they shall receive all items

little

administration,

for those

certificates.

everyone

well

the

bank officers.

showing

hand

whether it

departmentalized

must

Finance

Steagall

Protective

not

are

Reserve

there

United

Bankers'

State

myth.

member banks at

Federal

and.

Francisco, which will become effective the first of the

directors

and

laude" at college.

cum

cers

large

Italy, at
Oregon, assumed the duties of the office, and has worked faith¬
fully and efficiently to advance the interests of the section.
Just recently

the

standard

human

have done well,

than

The

part

leadership

able

officers

personal letters

child

"suma

the

co-operation

acquire elementary

bank

Bulletin

the

that

bankers, of which

you,

"up and do it" enthusiasm, such

any

often

the

lies

mainly

helps the disposition of the bank officer

least

the

Portland,
to

the co-operation and enthusiasm

recognition

man,

kindergarten

of the

former

attendance

home

drive

the

least

encouragement

study,

Every

that

the

in the

Federal Reserve banks

own

fixed

eyes

note.

chapters,

not

pass courses

The

learn

Committee

support

for

not the sort who can be led away

are

June

wish

chapter

enthusiasm

patted

receive

should

special

spirit and enthusiasm manifested would surprise
I

it must be active,

outside
who

the support

and

to have been convinced that there

to follow the bankers'

younger

assured future,

convention

especial

but

Passive

work;

seem

clearing system

the

before

appeared

committes

Congressmen

National

grammar

much

receiving

Association,

the

large profits

idle, the discontented and the disloyal."

truism

success

officers

other

representing

instead of

the most optimistic institute alumnus.

The

Committees

banks

but the semi-

represented by the Committee of Five.

country banker

;

bill

Protective Association

Bankers'

are

nation-wide activity

pay

training school,

attainable goal,

thousand delegates and the

There

This

Bankers'

American

the

offer

industries

our

national

education and

by the patter of the

even

State

the

high schools,

pretend

cannot

many

Workers who have

alluring and

engineering

specialized institutions

that

well ask themselves if it would not

the technical

upon

misunderstanding.

arid

supports

training.

very

example

colleges

are

clerk unless

advantages

ranks

over

there

and

inexperienced

educational

the

all

young men

everywhere;

professional occupations draw for the most part
schools

editorial

useful and has become such a powerful factor

banking houses that will not

many

While

instilling the elements of banking into thousands of

the

National

;•

"The institute has
in

present time there is pending in Congress the Steagall Bill, which
copy of the Hardwick Amendment, and about which there

exact

that

writes

can

par

institutions

spirit

right of the banks to charge exchange as provided in the Hardwick
in plain and understandable
language.

At the

Association

lay bare unsound doctrines.

leading

143

Amendment

other things:

among

our

of how

clear the

op¬

are

material

taken

was

the standard

wonder that the

states

same

initiative and curtail

their battle cry and it was that resolution which was recently used

strong

individual

profession is concerned,

our

purporting

Education is

It is

individually or collectively, on any other basis than that of ef¬
loyalty and unadulterated Americanism."
That resolution swung

ficiency,

through

far

plan

any

co-operation of employees and employers and

attempts to limit

SECTION.

sold

are

has

still

work

incorporated

gone

that

not

the

had

the

has

the

been

section

the

newer

of statements used over the country.
It is a debased competition
entirely inimical to the clearing house spirit that would encourage a bank

find

their way

this

means

broker is here to stay, and as long as notes will
cases

long distance from their point of origin,
of labor in keeping credit files fresh and of

amount

central credit
being made
self-supporting, provided it had the patronage and co-operation of paperbuying banks.
This, of course, would not do away entirely with individual
investigation but it would mean a great saving in routine work.
The present generation has seen a change in banking methods that is
Here arises the possibility of

investigations.

necessary

Our institutions have grown so rapidly, and

inconceivable.

almost

such

in all lines has shown

business

mighty expansion that the labor-saving inven¬

But there is one condition
and that is the inability of the
average customer of a bank to grasp
the fundamentals of the banking
business.
The ignorance of the principles of economics is so general that
it is easily understandable why frequently the most astounding allegations
against banks are gravely weighed by people who ought to know better.
For this reason, the ambitious pragram
planned by the newly formed
Committee on Education of the A. B. A. is worthy of the hearty indorse¬
yesterday may be, obsolete to-morrow.

tion

that

has

practically remained unchanged,

ment of

clearing house.

every

potential bank customer that, when he is ready to
account, he will know what banks are for, he will appreciate

open

conservative

and

considerate
will

the

into

knowledge

treatment,

and

when

ballot

his

casts

place in the halls of legislation men as well posted as he,

endeavor to

legislators capable of giving all classes of business a square deal and willing
to draft laws affecting banks in a spirit of fairness.
If there is justifica¬
tion,
for

banks in rural communities have found to their profit,

many

why not give the School Banking Club a

Pig Clubs and Calf Clubs,

chance?

dislocation

The

has

interest

with

met

the

treatment

into

is slow in setting

war

and live stock.
On more than one occasion, the Federal
various deputations who have asked for preferential

the nation's crops
Board

the

the process is not without pain.
This
disturbed market conditions, especially where are handled

reflected

caused by

business

might be expected,

and,

place,

financing

which their

particular commodity in

the

the Board deserves the thanks of the

these interviews,

lay.

banking world for bringing home basic economic facts that apply in lean
well

years

cation

caution

these,
for

principles,

of judicious

observance

the thoughts that

well emphasizes, are

the Board

the

due consideration for the needs of the times,
we

must take

guidance to-day.;

our

The

business

sense

tempered with the

Ordinary business prudence, the appli¬

those that are fat.

common

realize,

however,

the knowledge and experience

possess

re¬

While nobody but lawyers
legally practice law, every trust officer should possess sufficient
knowledge of fiduciary law to enable him to avoid legal complications.
trust department.

can

officers

The

furnished

have

Experience

special
the

but

past

regarding

with

due

have

year

had

business and
to the difficulties

trust

regard

and justice of

the wisdom

the American

amending its constitution as to permit sections

take

interest.

conferred,

the

during

members

information

demonstrated

has

association

the

with

transactions.

trust

Association

Bankers'

available

Section

Bank

State

correspondence

encountered

the

considerable

action

independent

legislative

matters

of the

has yet take nadvantage

section

right

thus

tjhe existence of such right has removed much, if not all,
real

misgivings,

that formerly existed in regard to

imaginary,

possible injustice to different classes of banks in the operation of the

any

of. the

machinery

constitution of any organization,
The superstructure must be built of men,
The

association.

however, is only its foundation.
the

and

Bank

State

that

support

received

the

from

able

and

conscientious

of the American Bankers'

administration

Approval

in acknowledging the

pleasure

takes

Section

has

constitute the

cordial

who

men

Association.

begin with the child in school, we

we can

certainly set ourselves to no more practical purpose than to instil such

can

while other States enabling

bankers generally

State

responsibilities as well as privileges, and that

few bank officers

quired in the conduct of

operated without profit to the banks, yet capable of

bureau,

application,

upon

required.
involve

functions

comparatively

interchange of views and in assembling the information gained in making
the

would be

such

that

be obtained

could

legislation

There is a wasteful duplication of labor in sending out requests for

value.

functions

to give his

ready

to his finances.

paper

in
vast

all times be

not at

many

commercial

The

should

information

frank

full and

that

think

customer

bank

CONVENTION.

BANKERS'

144

Plans

Export

Cotton

for

Plans for the formation of

Corporation.

$12,000,000 Foreign Trading

Corporation operating under the Edge Act to especially al-1
meeting on
Oct. 21 of the Southern bankers attending the Convention.

leviate the cotton situation, was presented at a

National Bank,
McFadden, secretary of the
Georgia Bankers' Association, were the leaders in calling
this conference.
The $12,000,000 capital would represent
an assessment of $1.00 per bale for this year's cotton crop
with one-half of the capital stock paid in.
Mr. Maddox
Robert F. Maddox, President of the Atlanta

Atlanta,

and

Ga.,

Haynes

pointed out to the meeting that the formation of this com¬

controlling the cotton
for higher prices.
He
said that the most alarming situation confronting the cot¬
pany

for

not

was

situation

the

movement was

ton

to 20c.

42c.

there

purpose

in holding movements

the fact that it

not

pound, but that

to have passed," says Mr.

seems

from

"All hope for any govern¬

little market for it.

was

mental assistance

had dropped

at the prevailing price

even

Maddox.

of a science.
Some
bankers may know intuitively what to do at all times, but most of us
must give careful and continuous study to the rapidly changing develop¬
ments.
We may have our moments of worry but the thrill that fascinates
in the handling of transactions where money is involved is ever present.
One thing certain is that, if unselfish devotion to the public welfare is
the ultimate test of true citizenship, th^s bankers of the United States

the formation of the

during and after the Great War have more than met the test.

eventually trade in all products of the South, but especially

banking business is becoming more and

Our work
preaching the

There is greater need than ever for our
the expenditures of the nation as well

only half done.

doctrine

thrift

vidual.

the constructive

that

financial

our

ings

about

the

wealth

for

the

to. instil

panic

that

tasks

the

take

must

care

indi¬

see

alarms,

that

will

conserve

serve

the

nation's

country and our varied commercial activities

meed of support and encouragement, these

nation's

those capable,

credit,

the

far

bankers

are

sighted and
the

United

States.

Report of J. W. Butler, President of State Bank Section.
Banks have

State

themselves.

lack

to the

only

Association, and perhaps partially on account of it,
seemed

to exist,

banks

been

has

made

Federal

Reserve

of evolution there would

such

nationalized.

opinion

classes

checks

American

of National

prevalent

institutions,

balances

and

that

bankers

among

working
operates

and State banking institu¬

in
to

and

harmony,

the

best

that

economists

provide

advantage

system

the

The

the Legal Department of the American Bankers'
in preparing and advocating model State banking laws suitable
and

supervisors

Association

State

to all States with such specific modifications as
required.
Our secretary has visited a number of
supervisors and been in correspondence with others, and was

conditions

bank

privileged to
Association of
fested

make an address at the annual convention of the National
Supervisors of State Banks.
The spirit of co-operation mani¬

State

bank

supervisors

individually

and

collectively

is highly

furnish

chartered
Banks

thus

the

Association
State

Bank

Supervisors of

Section

banking institutions

with

Banks

State

statistics

has

pertaining

arranged
to

State-

similar to the statistics regarding National

published by the Comptroller of Currency.

after be

Such statistics will here¬

published quarterly and supplemented by National bank statistics,

showing the combined banking power at the service of the American

people.
Bulletin

With

unless

that

Among the periodicals that publish figures thus compiled is the
of the Federal Reserve Board.
characteristic

assuming fiduciary

conservatism

functions.

State

banks

have

not

been

hasty

In some States the right to exercise I such

The

one-half of

the

time will

tend to create

staple

represented:

were

Georgia,

Ar¬

North

Tennessee,

Texas

Carolina,

South

Alabama,

Mississippi,

Louisiana,

A telegram was read from Oklahoma stating

the

situation

cotton

cotton in

improved

State would

that

The sub-committee which had been

Week submitted

not

than

appointed earlier in the

unanimously

report which was not only

be harvested.

even

adopted, but received a stout pledge of support from the
representatives of all States present.
The action of the
conference is contained in the resolution as follows, which
adopted unanimously:

was

That the

Resolved,
zation

the

feasible and

Bankers

State

assembled believe the organi¬

the

under

corporation

much to

Edge

Act

timely

and

the market for Southern products;

broaden

That

Further,

committee

the
to

Cotton

proposed

will

and

proceed

the

be designated

report

organization

the

committee

adopted

and

the Organization Committee and requested

the

proposed

corporation

judgment may be deemed best; and
Resolved Further, That we pledge to the Committee

their

earnest co-opera¬

our

and support.

tion

Report of the committee was as follows:

The
On

Tuesday,

October

19th,

bankers

Southern

the

some

subject of the difficulty of
other

and

commodities

was

1920,

special

conference

was

convention and

present at this

called of

the general

financing exports of our agricultural products
discussed.

result of this discussion,

you

chairman to appoint a committee to lay before you some
recommendations as to what might be done to improve the stiua-

instructed your

tion; and accordingly the undersigned committee was

oratory,
time

Missouri,

committee

several

the

subject.

appointed representing
is

increased by

Virginia, Oklahoma and Florida.

meetings and

had

discussion

careful

this

and

has

Committee

Your

selves

States,

representatives from

having
a

Southern

the

most

devoted

that the

We feel

many

time

hours to

is past for

special appeals to Governmental or other authorities and that it
we of
the South take hold of this situation and help our¬

that
we

undoubtedly

can

will co-operate in the manner hereafter

suggested.
committee

Your

National

function.

Foreign Trade Finance Corporation to

Oklahoma,

Virginia.

half of the

appreciated.
The

inasmuch

and

crop

States

Florida,

Carolina,
and

application

general

regional

following

kansas,

concrete

people.

During the past year the State Bank Section has co-operated with State
bank

present cotton

in cotton at this critical

State charters and become members of the

the ratio

again

not

foreign market demand.

System, thus combining the elements of both State and
According to current statistics, however, there is

change

the

and

two

the

affiliation.

material

tions,

course

in the United States.
The sug¬
departmentized institutions would
The suggestion has also been made that

that

might generally obtain

National

the

expressed that in due

form of banking institution

one

will

Corporation

12,000,000 bales raised this year will have to be exported,

Resolved

tendency among all kinds of banks to do all kinds of banking,

eventually become

development of the State Bank Section of the

to expect it as it is operation with

proper

banks of the South are taxed with the problem of handling

not only by the public, but by bankers

co-operative spirit that formerly existed,

and the idea has been

gestion

Their importance and usefulness

own.

was

Finance

War

thing of the past.

There is

into their

appreciated

Incident

Bankers'

American
the

come

realized and

now

are

"Even if it

To confute the false teach¬

optimism

necessary

our

the

us,

orderly deflation that will bring

safely be intrusted to

can

guardians

patriotic

for the

Bolshevik

and

talk

receive its proper

shall each
the

to provide

that all parts

ahead

work

is kept unimpaired.

health

radical,

stability,

antidote

first

all

discussed

the

question

whether

should interest ourselves in a corporation which would look after the actual

marketing of our products or confine our efforts to providing the necessary
financial means to take care of the credits resulting from the sale of such

products.
it is

It was the unanimous conclusion of your committee that while

possibly advisable to organize a number of trading corporations tinder
Act or otherwise, it would hardly be practicable to have an

Webb

the

organization
entire

South.

which
Your

would

attempt

committee

the actual

therefore

selling

recommends

of goods
that

the

for

the

question

trading corporations be left entirely to the judgment of the bankers
business men in each State or district and we are of the belief that

and

BANKING

SECTION.

especially so far as cotton is concerned there are already in existence many
large and responsible export houses who will buy the cotton from the
planters and factors for export purposes if we\ can provide the financial
machinery necessary to help them.
\
A

banks

too

committee

large

scale,

corporation
twelve

Edge

would

that

only

represented

facts

its

under

the

cannot

but

attempt to

considered

Edge

into

this

authorizes

Act

have

ability to meet

capital

enough to handle

and

discussion of the details of the

the

banking

corporations

deposits

States.

in different

bills

They

establish
the

extent

tion

branches

Federal

drafts

however,

can,

drawn

have

ten

engaged

business

the

banking,

invested.
It
of

extent

therefore

seen

million

dollars

that

then

exceptj in

fifteen

capital

the

corporation

should

all

con¬

and

point

the business would have proved

needed,
Your
for
be

committee feels

in such

this

even

small

operation
It

itself

that proves
of

the

all

the

bale

pay

in fifty cents

of the

the

above;

the

ills;

emergency,

than

we
can

the

respective

from

each

make

to appoint

the

holds

out

made

each

promises

corporation

that such

been

made
of

and

this

used

such

commodities

except
in

available

prove

recommend

States

can

hope

remedy

countries

where

Reserve

addition

Bank

tre¬

sales

except

through
benefits,

emergency

and

serious

discussion

plan and

pledge ourselves to try to carry it into effect in the shortest possible time
if you who are assembled here
to-day approve this plan and will give us
the strong support of which you are capable of
giving in your respective
States.

President

Atlanta

National
R.

President Ilibernia

Palmetto

National

home

Columbia,

Union and Mercantile Trust

the

large

Vice-President South

Texas

Com.

C.,

The

WRIGHT,

COX,

HIGH,

ARMSTRONG,

and

son,

cannot

with,

the

desire

express

through

commend

upon

protecting
believe

approval of the operation

our

the

periods

the efforts of its

country and direct

restraint
in

System

speculation

them to

every

and

possible

officers

and

of
the

likewise

should

these

Re¬

strain

resources

use.

Economic

composed

exert

except for

fact

has

commodity prices
115% to 350%, money
25%.
In the face of a
said

the

has

increase

been

than

distribution.

less

the absolute necessity of bringing
of thrift is his future

the practice

must

Tax

for

the

finance,

of uncertainty,
conclusively that it

proves

tax

taking its

fluctuating, thus

elements

grave

tax

This

tax

necessarily

are

should be

place.

and

summon

commerce

the

law,

the

essential

be kept

proper

they

all

that

torates

being
in

the

and

charged

most

national

new

the

Criticisms

when

hour

altered
full

have been given
administration of the
the

element

and

warrant

whole

unjust

the

their

and

most

relations

breed

should be brought to bear by the

such

the

officials

toward

railroads,

responsibility

and

serve

country

efficient

firm opinion

our

bankers
can

the

providing

It is

that

be available for equip¬

may

business
railroad

connection

and

confidence

business
fact,

call into

business.

misleading.

question

Criticism

The

conditions,

challenge

the

Williams

vital

with

to
and

that
men,

direc¬

their

untimely,
between

stabilizing
utterances

inevitable

effect

create

generalizing is
such broad and|

the mind of the public.

in the present

unfounded

hostility

in extreme instances
of the public mind.

misleading inferences should be made for personal profit

America's

harmful

bankers and j the public, and
dangerous disturbances

violence of action and

their motives and practices

based

calculated to

of High

deplore

integrity

protest against such reflections as not only unfair, but

part of

We urgently request the Inter¬

Comptroller of Currency
Interest Charges.

the

banking

without

emergency

object

be materially advanced.

railroad

assistance

with

the

country

of transportation usefulness,

era

facilities.

utmost

with

the

guarantees

unfounded statements is to create false inferences in
We

capacity.

sustaining

which

the

recognized investments be conserved and that

and

dealings

that

this

States

in the
but also of establishing the
be enabled to render the fullest

that necessary funds

should

their

commission

representatives

enacted

practicable co-operation

of railway

Commission

law

most useful

United

basis,

regular transportation of products to market.
present

giving early
a

Railroad Directorates.

facilities

country as a whole should

render

Manufacturers,

with

has been

may

effect,

working out

both

open

Commerce

others

Permitted

equitable

that

with
in

tax

the

intelligent and. broad-visioned

interests of

and

transportation

service.

themselves

Men,

The Association's

joint
of

councils the

that

Undoubtedly,

Association

Should Be

Men

carriers

public

National

Credit

its

order

important function

the formation of a
of such organizations

the statute books

owners

matter.

repealed forth¬

The surtax system

Association.

replacing the

their

the way

the

important uncertainties for

causes

this

perform

the

Bankers'

now

credit

state

and

revision at
competent
with the principle of equity

square

highly important matter.

and Business

wise

individual

Situation.

system

with

industry

served

Association

only

carriers

militating against the country's economic welfare,
given immediate attention.
Congress must not

Commerce,

Legislation

this

that end is.

replaced

immediate

from

fiscal

representatives

the American

been

reserves

use

Thrift.

administered.

Commission will

would

purpose

has

financial

Government

into production

conditions

revenues

way

consideration to this

effective

commodities

the

efforts to

While

safely

important matters, and should

representatives

conditions.

and

maintaining sound

pressure

great

credit

down

Other Elements of Cost.

than

requires

and certain

operates

the conduct of

the Federal

ensuing

conserve

the most advantageous

in credits

banking credit

that

inflation

just

and

bankers

Approval of Operation of Federal Reserve System.
serve

less

can

spending

experience

successfully

delay in

following resolutions,

Resolutions, Francis H. Sis-

Chairman, were adopted.

and to

only by

Federal

by Convention.

At the closing session on Oct. 22, the
on

The

also

Answer

presented by the Committee

Federal

force

increases from

taxpayers, and

among

governmental

duties

Adopted

that

situation

taxpayer.

one

regardless

Vice-President, Com. Trust and Savings Co., Memphis, Tenn.

Resolutions

disapproves
the

to the operation of

the

consumer.

profits tax does not

ment and extension

PONDSOM,

rendering banking service,

prosperous

introducing into the

this

Point, N. C.

People's Bank, Tupelo, Miss.
D.

tax

Esch-Cummins

Bank, Houston, Tex.

hold

enough to check extravagance, desirable

excess

taxation

any

continue -to
S.

Revision

Co., Little Rock, Ark.

A.
Nat.

It
of

resources

American

plans and

present

Birmingham, Ala.

ELWOOD

the

prevail, and it is only by individual savings in amounts
small that national thrift is encouraged to the benefit of everyone.

The

the

individual

saving

are

possible

Commercial National Bank, High

the

user.

ill-considered

hands

condi¬

and

period of great price inflation

average

and

SMITH,

MOOREIIEAD

President

the

cost

not

Vice-President Birmingham Trust and Savings Co.,

First

Bankers

MATHEWS,

that

suggestions,
forces.

response

Than in

the

borrower

It is

Co., New Orleans,

Bank,

TOM

Atlanta, Ga.

IIECHT,

POPE

cost

assured.

National

MADDOX,

Bank,

Trust and Savings
J.

President

the

banks

National

Chamber

ROBERT

all

equitable and workable system be devised without delay.

this

reserves

for public safety.

range

the
the

of credit which run longer
banking heretofore and longer

Federal

bank

reserve

business

disapproves of all plans

Reiterated emphasis is to be placed on

nation

valuable asset in normal times.

full

in
to

credit to the

profitable

terms

American

the

corporation.

institution will

therefore

the

time

covered

best

produce

them for credit and to hold at the lowest possible point the cost of

upon

hands.

once

the

principles

utilize

Reserve

their

that the bankers of the country as a class are to be
congratulated
the sincere efforts they have made, both to meet the unusual demands

with

the

its

the

the borrowing public the simple economic

upon

leading

does

nor

will

pro¬

to be achieved.

of economic

rising in

Federal

increased

rates

com¬

State.

corporation

until the

are

arbitrarily

other elements of cost entering

such

be reasonably

can

these

commodity during

increase

enterprise,

committee

that

available

extravagant

by such

do believe

and

Southern

disapproval

efforts

use

Necessary adjustments must

stability

operation

dollar

one

desired

this

success

campaign

the Southern States, so

quota will be

other

con¬

undersigned
if

condition

of business

maintained.

Government

Reckless

the

committee

and

the

little

have

upon

/'•

suggestions,

costs

present

State,

the

belief
with

the

and demand.

but

large

is estimated at twelve

crop

organization

established

but

have

medium

such

the

looks

the

believe

State should
say

than

must

firm

impress

money

limit

provide just exactly the amount above

in order to

products

made

than

immediate

created

of the business world

part

co¬

South, and to the Nation, especially in its present
and will make it possible to provide a market for some of our

agricultural
can

but,

proper

benefit

mendous

necessary

facilities

our

serve

one

committee

the

raised

above

representatives

become

that

Your

all

the

would

interest

fullest

relation between the volume

with

plans

generally have

is the principal product
each

supply

increased

any

the basis of

the total cotton

the

create

can

productive enter¬

make

and

influence whatever through the utilization of such

that

to-day.

for

cotton

perhaps

capitalization

time, would

approves

willing

then

but

that

bankers, in each

that

and

have

export banking corporation

exports

feels

cotton

bale

per

this

meeting

mentioned

sure

this

to.

addition

will

amount

bales at

this

mittee

cotton

this proposed

per

■referred

unless

represented here

have

committee

your

towards

million

State

raised

to be the greatest need

South,

tribute

intended

financing

cannot

Southern

every

not

amount

the

Increase in Interest Rates Less

feel that

duty of bankers is to put such credit
apportion it for the use and good of

and

provision of general disaster

were

should it become necessary.

long time to come—but

resources

the

be difficult to get subscriptions
corporation of which only half would

credit

commerce

precision if safety and

banks

any

the

that it should not

$12,000,000 of stock

expected to be paid in for at least

banks

result

vitalize such

slowing

reserve

suggestions,

consider¬

larger total

be
The

interfere

law

profitable that there would be

difficulty later to increase the capital

where

product

and

prices which may be falling

surplus
to

trade

business

Association

the

may

System has demonstrated

Reserve

commerce, transportation and distribution
by the nature and extent of such operations.

distribute

must

because

Reserve

the

■

outstanding

that amount would provide

develop

efforts

able immediate relief and your committee has no doubt-that if the business
of

volume

improved.

commercial

for

trade,

disposition

made with
It

corpora¬

cent,

per

there

Bankers'

They

the

'■

acceptance

lia¬

corporations to

v;,-,

total

sixty million dollars and

other

surplus;

corporation

have

could

■':

will

six

stock

own

of their capital and

cent,

per

Board

and

condition of the

them

upon

time

agencies in foreign countries and with

Reserve

tion

banks

bilities outstanding in excess of ten times their capital and surplus.
can

permits,

buy and sell

can

there

greater

have branch offices in the United States

nor

representatives

Such

form

carrying

are

community.
In discharging this duty, bankers must use
judgment and always give heed to the condition of the reserve.

capital of not less than $2,000,000

the

The first and highest

useable

organization

banks to

and by

processes

they

the

opera¬

few of the fundamental

Federal

nor

Credit

operations

community.
in

banks

the function of

ductive

considerable

which

possible financial pressure.

any

credit.

obligations

proportionate release of credit

that the Federal Reserve

commercial

and

one

is limited and defined

and

dollars

connection.

foreign bills of exchange and
subject to certain restrictoins.

sent

prise

say«

subscribed

million

general supervision of the Federal Reserve Board.

accept local

can

surplus

six

Government

may

confident

are

manufacture

financing

their

Neither

;

foreign banking business with

and

dollars

Edge Act but will merely mention

The

not

the

fund

anything

export

cent,

per

million

five

business.

We will

tion

capital

million dollars of surplus and that would be
volume of

start

immediate

attempt

that

and

Act

which

provide

should

that

recommends

dollars,

This

which

the

believe

not

but

under

million

capital.

does

liquidate

that there

uses.

Your

order

145

grati-

(

interest.
The delicacy of the credit
safely stand such violent handling, and
must seriously threaten its security.

cannot
attacks

Warned

Labor

With

labor to the
the industrial

A fair balancing of interests between
these factors in production of wealth must be maintained to insure their
common
prosperity.
Failure to preserve this balance may easily w/eck
industry and we call upon each factor involved to recognize this basic
truth.
Only through the increased production of wealth can there be a
larger distribution of wealth and we call upon labor to abandon the
economic fallacy that it can attain greater prosperity through reduction
of output.
The tremendous costs to the country suffer through unwarranted
strikes.
Limited production and unsound shop practices are suffered by
labor and capital alike and seriously hamper the prosperity and progress
labor, capital and brains.

country.

whole

the

Hoarding.

Speculative

and

Production

Agricultural

Department of Agriculture upon the con¬
scientious loyalty and persistence with which it has priomoted more effi¬
cient
agricultural production and fair marketing processes, and sur¬
rounded consumption of the products of the soil with proper safeguards,
and
upon
its success in these predominantly important matters.^
We
particularly endorse the research, extension and regulatory activities of
the
various Bureaus and recommend to
all bankers their sincere and
heartily congratulate the

The value of the scientific

co-operation with the Department.

vigorous

■

and insure their continuity.
mindful of the intelligently

their efficiency
is

Association

Food

plan in

such

Federal

With

best

the

American

Bankers'

Association

the

which

and

farmers

Utilization

intelligent
excessive

possibilities

A thorough knowledge of marketing processes.
possible credit resource this year to assist toward

stockmen|.
every

the

Public

Relations

bankers of the

the

should

thought,

After
We

regard

development of foreign trade as an outlet for the

surplus production of the country and we would seek the

co-operation of

properly directed
effort to open and maintain the world's markets for American products.
Greater attention on the part of the Government to the development of
our
consular and commercial services is urged as an important factor in
the development of foreign business.
Adequate appropriations should be
made for all necessary governmental service in collecting trade informa¬
tion abroad, and it would be wise to consider what practical steps may
be
taken
through unitel effort on the part of national financial and
commercial organizations to develop a plan for recommendation to Con¬
business

the

and

Budget
The
an

Bankers'

American

Government

the selection and training of

for

gress,

community

every

diplomatic force.

our

Not

finances.

emphasizes the necessity

again

have

such

the

system

and

war

but

we must pass patiently in the
although necessary.
The billions
and the millions of lives detached from

war

sanity

with all other classes must address themselves
patience, in the full assurance that the commanding
common

and

by this country

held

now

press

would

and operating

awaiting

under

democratic form of government how the oldest in
almost unlimited resources and opportunities

with

world,

civilized

which

improvement, this country faces a future of assured prosperity

our

only be threatened by internal strife or lack of leadership and

can

In the United States as "the heir of all the ages"

intelligent co-operation.
lies

brand

been

the

which

experience

face

fidelity

table,
to

human

and

misled

temptations

alluring

the copy

Duty

American

the

and

activities

and

inefficiency and
of

disfavor

field,

any

and

private ownership

with

regard

enterprise.

labor
we

Issuing

The

demonstrated

beyond

public ownership

would

regard

disapprove any

possible

with

the

question

management

apprehension

any

and

large number of people not otherwise in touch with banking
believe

interest rates

that

any

extension

this

system

general

looseness

still the best guides

II.

Sisson, Chairman.

Blair,

Henry H.

Dunbar,

McKee,

Sadd,

Frank

Hazelwood,

Yetter.

through

Floating

and

following

further

Unsound

resolution

Securities.

adopted

also

was

resolved

sembled

that

issue

American Bankers'

President

Association in convention

as¬

Committee

Association

the

direct

Policy of the Association, to investigate fully the subject of the

Economic

mine

by the

the

hnd

flotation

and

upon

unsound

recommend

securities

such

plans

and

all

its

phases,

pocedure

eradication of the evil; the committee to have power to
action

make

pendently or in
t

may

its

recommendations

effectual,

and

and to

will

deter¬

result

take the necessary
act

either

inde¬

conjunction with other organizations as in its judgment
of American investors on a national

deem best for the protection

basis.

which would place it in competition

otherwise,

Oct. 22.

maintenance

further extension of governmental activities into the banking
we
approve
of the postal savings system as a means

privately owned banks, would be a mistake and in the long run op¬
to

possible

menace

immigration

New

public interests.

immigration at the
with

property.

the

offering of the arithmetic

the

the further participation of the Government in busi¬

Influx
A

our

dreams

conduct.

Francis

of industry,

while

accommodations,

posed

importance

supreme

wastefulness

business

of service to

increased

nationalizing

of sanity,

Utopian

indulge

would add

economic, political and social fallacy,

so-called

book and the ten commandments

Frank

of
the American idea of individual freedom and initiative

steps looking toward

form

the

assert

progress,

business

ness

the

opportunity

the ancient standards

refuses

of Industry Disapproved.

proven

for

alike call

us to its
honesty, and
or economic
will o' the wisps can withstand all the dangers of world reaction and
maintain the order upon which alone a sound future can be built.
In

hope of the world.

realization.

remarkable cir¬

and ex¬
disapproval of such socialistic theories as they have
concretely expressed in the proposed Plumb plan for nationalizing the

railroads.

bring its

As the richest nation in the

facing the harvesting of bumper crops on a sound financial basis,

world,

complete

our

the world's affairs will

fjull reward as the problem is worked out.

.the

which only time
the bankers

and adjustment,

rehabilitation

processes

country

Alex

widespread agitation

Adjustment.

and

business problems of the day as the
to be treated as passing phases of a

temporary

cumstance, for the lack of it is a lack of most excellent example.
Nationalization

and as the leaders in local centers

which

through

in the waste of

the

position

the

intelligently devised budget system for the business-like administration
Government

pressing

thought, speech, and action,

System.

Association

fill.

can

with

Trade.

the bankers of the country the great importance

that

of wealth lost

Through
bankers

the country have an educational re¬

Rehabilitation

War

of the

most

assurance

the

productive effort have created gaps in the world's capital
of

given full play in order to stabilize the markets.

believes

should be discharged in every practical manner.

sponsibility which

full

the maintenance and

We believe that

undrstood and that the same
problems they face.
The nation's

bankers of

the

breeding herds.
in any industry,
including agriculture, tending toward speculative hoarding, or artificial
and temporary disturbance of the law of supply and demand, which law
feeding of live stock for market and the preservation of
This
association vigorously
condemns any program

the Committee on
similar committees,

committee

your

instruction,

seek

aftermath

Foreign

several sections.

publicity

reference

illiterates"

business

with

case

reconstruction

available, and a creation of credits as is wise upon
and feedstuffs, plus live stock, for the purchase and

We would impress upon

also

report

and

services they render are

the

that

see

the

channel

legitimate

every

inevitable

Be Encouraged.

should make every effort to cultivate friendly

country

period

should

to
and

Association,

this

unmarketable grains

Relations
activities

dealing with this important subject in

marketing of products.
Particularly a continuous but not
marketing of products for which a demand exists and where

transportation

and

the

interest

with

note

The
bank

to a marked degree.
co-operation of all banks and

recommend.

cordially

and the reports of the

gratifying

are

support

educational activity
great work

largest

the

public relations based upon an understanding of common interests.

ability toward accomplishment of

in the difficulties and

co-operative interest

doing

Friendly Public

"economic

and

sincere

Institute

Institute of Banking.

American

Banking is

Institute

officials,

following:

Work

for

American

The
of

considers that a

available]

system

for the national highways will prove most

bearing

|to agriculture as a basic industry, we invoke the courage,
patience of the bankers of this country, each in his respective

locality and according to his respective

five-year building
satisfactory, adequate
appropriations being made.
We favor such Federal assistance as is possible
toward the
continued^ reclamation of irrigible arid lands.
ways

deserves

respect

wisdom and

arrangement of co-operation between
the construction of national high¬

Governments in

State

and

Institute

the

possible

peoples

National Highways.

agriculturists as well

far as

Drafts.

the present

favors

association

The

foreign

any

the

administered,

wisely

which

it contributes to ultimately solving
problem of profitable marketing of farm and other products generally.
of

suffering from the effects of the
war.
Because of this attitude it has co-operated in making possible the
food draft system, and in many other ways its members have helped in
relieving world distress.
The present desperate situation in the Near East,
due not only to privation, but also to deportations and massacres exer¬
cises a powerful appeal on the sympathies.
This occasion is taken to en¬
dorse the Near East Relief, an organization incorporated and delegated by
Congress to carry on Red Cross work irt that section of the world.
relief

marketing of agricultural products, particularly those unadapted to domestic use, of any well considered plan devised to open
foreign markets by providing requiste long term credits and recommends
that any suitable assistance and co-operation be given to the execution

"-v-'

Association has consistently stood for all

The American Bankers'

Commendation

this country generally the important

and the people of

bankers

upon

situation is a matter urgently

ployes properly housed.

constructive work

agricultural colleges and the extension departments,
that these institutions be given active and sincere assistance

by bankers wherever possible.
This Association calls to the careful attention of

Housing Situation.

requiring attention
in the interest of economy and right living.
Bankers assuredly can be
counted upon to give all possible assistance in solving this pressing prob¬
lem, but co-operation is necessary, especially, it would seem, from em¬
ployers of labor who benefit directly from increased efficiency of em¬

State

and recommends

we realize it can probably only be remedied by
would favor any means which would aid in a better
either public or private agencies. '

the housing

program

respective

its en¬
It is regrettable from every

be deprecated.

only

vy'V

Relief

provided for at the last session of Congress, are of such supreme impor¬
tance to
the people of this Nation as to require appropriations for in¬
creased salaries and additional equipment sufficient to maintain and in¬
This

can

distribution of population through

the

trend

congestion,

experimentation work of the Department calls for increasing recognition.
The varied functions of the Department of Agriculture, so inadequately

crease

growth of the country.
population toward the great cities, with

and political

marked

The

suing

value in

this immigration and its future

character of

the

assure

economic

the

economic pressure, we

unity

structure,

time

point of view, and while

emphasis we would call the attention of
the three great elements entering into

especial

essential

structure of the country
intemperate and unfounded

Reduction of Output.

the

denounced as outrages against

be too severely

they cannot

fication,

public

CONVENTION.

BANKERS'

146

to the

of Immigration.

social

present time,

properly

order

seen

President,

in the

rapid

influx

and while we' are in fullest sympathy
which will help meet any possible

regulated

shortage and aid in the development of the resources of the country,

believe

that

every

possible caution should

be exercised

at the present

John

Officers

Elected.

President

Mercantile

Drum,

Trust

Company,

San

Francisco, Cal.
First

Vice-President,

National
Second

Bank,

Thomas

Richmond,

Vice-President,

Milwaukee,

Wis.

McAdams,

Vice-President

Merchants'

Va.

John

Puelicher,

President

Marshall & Ilsley

NATIONAL
jr<<-

•

Bankers' Association

American
Fifth

Annual

Meeting,

Held at Washington, D. C., Oct.

INDEX TO

Banking Evolution,
Essential

Address

Report

BANK IS E C TIO N

Pierre

NATIONAL

Jay

the

Report of Committee

Federal Legislation..

Page 154

Executive

Report of Committee

Committee...

State Legislation

......Page 154

Trust Departments of Nat. Banks..Page 155

PROCEEDINGS

Page 147

President

of the

1920.

:_._.Page 150

Credit, H. Parker Willis_

BANK

20-21,

Resolutions
New

State Taxation of National Banks.Page 155

Adopted..

Officers

Page 156

....

Page 156

|__.

...

Page 156

Elected

Page 156

Banking Evolution.
By Pierre Jay, Chairman

of the Board of Directors and
New

A century

ago a

motive power, steam,

new

fully applied to transportation.
pot in New York City stands
train operated
The

engine

curiosity today

this

The coaches

the tracks.

at the sides to

top,

brake
the

driver's

the

baggage between,
right

motive power

whip.:A...;

possibilities

The

1914 banking

period.

what has

the

process

you

thus

reserves

carry more
as

such

reserves

entrusted

and

required;

30,000

little

reserve

kept

the

other

our

entire

lection

and

counts

was

pelled,

for

practice

steps

required

very

were

domestic

Currency

needed

was

with

true

was

of the

But in the
a

new

found

safety

power

en¬

from

had had the

mo¬

our

caring for it.

stage-coach

motive power in

new

On Nov.

era.

operation.

We had

gold from its scattered vaults and put it

our

huge new safe deposit vault,

quadrupled

to speak, and by so

banking

our

Evolution

Thus

power.

Far.

new

far

come

about,

motive power,

coincidently therewith?
1.

have found

ourselves

with

recognized

banking

leadership.
2.

We have found ourselves able to expand our
credits, in
the form of both notes and deposits, far beyond
any¬

Bank

thing

other

other
were

angle,

one

usual

machinery.

for

sustain

reserves
new

formerly kept by

an-

banks

organization to be suffi¬

hundred

many

deposits.

Member banks

the

use

This

reserve.

From

this

million

dollars

increased

longer have to carry
enables

most

banks

required vault
economize

of till money.

Many banks in farming towns
now get along comfortably with vault cash of from
1% to 2% of their deposits.
In 1913 country na¬

an¬

tional banks kept 7.3%

of their deposits in cash in
vault, whereas in 1919 they kept only 4.4%, a 40%

ac¬

reduction.
5.
carry

The Federal Reserve Banks, to

provide and

encourage

maximum of note elasticity, and to place ail banks,
whether country or city, on an equal basis as far a?

ex¬

ample, required to carry 15% reserves, used to carry about
24%.
was

the

econom¬

Looked at from

com¬

The country national banks, for

banking organization and leadership.

scientific and

banking
power alone, profits have accrued far offsetting the
loss of interest formerly received on reserve deposits.

For col¬

conservatism,

additional

cir¬

city to

our more

found under the

cient

the

have been materially lowered, such ac¬

justified by

ical administration of reserves.

banks

expansion

had dreamed of.

reserves

tion being

and

multiplicity of bank

But beyond all of these individual items

development of

motive

What changes in our banking have thus

stress would often break

exchange

was

nor any pro¬

of the steam

case

brand-new

method

in the

were

The

proceeding in

severe

motive power,

New Motive Power.

the

same

develop

doing had trebled

profit-making

maintained^ and many institutions felt
reasons

impossible.

exchange purposes

The

had

merely taken

closely and having

transfers of funds from

large excess reserves.

absence of

engine.

awoke

reserves

vaults;

with

commercial,

power.
was

expensive, and

were

down

need

of checks

fashion;

stage¬

own

In crises voluntary

further

what

deposit

main

credit

sudden

Collections
cuitous

the

thought, time and ingenuity to develop the

banking organization.

16, 1914,

brief survey

scattered

institutions, investing their funds
but

much

without, whereas in banking

War broke out in 1914 fairly large

were

judgment.

own

through the application to it of this

somewhat similar

to make

was

Bank

tive power, our gold, in our vaults right along, and all that

sight.

were

seasonal

evolution

than minimum reserves; such metallic

kept

States

was on the eve of a

have asked

far occurred

by gradual

Pullmans and gondolas of today.

When the European

banking

gine

with

its

Steam could not develop its

in the United

But it

are

socket for the

steam
our

was

of 1831

stage coaches

evolution; and

The only concession

The Evolution
It took

individual

Reserve

always appeared, but in ordinary times there

motive power with the stage-coach as the

become the steel

coach

their maximum possibilities

motive power.

and

is the absence of

Stage-coaches reached

vehicle.

hand.

A-V/■

the horse

have

all know,

keep out the rain, with seats fore and aft

place for

new

just like those

are

leather straps, with leather curtains letting down

swung on

the

detail except that the shafts have given

any

Federal

tecting organization.

motive power, is at¬

new

the

leadership in American banking policy,

But the interesting thing for

engine,

new

as much

in 1831.

Agent of

individual unit under its

as an

according

leaders

couplings and the wheels have rims to keep them

way to

and

neither

tached directly to three or four old-fashioned stage-coaches,

unchanged in

operated

full-size model of the first

almost

seems

this

that

success¬

Reserve

the New York Central Railroad in 1831.

doubtless appeared
us

was

In the Grand Central De¬

Federal
York.

the general

Each bank

cost is

concerned, in availing of the currency facili¬
ties of the system, pay the cost of shipping coin an/
currency to and from
ages a more prompt

have

ever

member banks.

This encour

redemption of currency than

before known.

BANKERS'

148

CONVENTION.
Such movements as these are

developed which accomplishes the

Machinery has been

eye.

gold settlement fund which the reserve banks main¬
tain with the Treasurer of the United States.
For
•

not visible to the naked

They are not recorded in the banking statistics
of the country.
It is only by such a special study

transfer of funds from one section of
the country to another in volume far exceeding any
thing heretofore known, immediately, without ex¬
pense, without shipment of currency, and at par.
This is done almost entirely by book entry in the

years

telegraphic

gets an understanding of what is going on
surface in the movement of funds and

the

for

ago

would have been six
movements to occur without

impossible it

well-nigh

how

such

that we realize what

serious credit disturbance, and

its
day in and day out,

elasticity of the Federal Reserve System and

the

clearing operations are doing,

entire country is at par.

the

one

under

actually available funds, therefore,

the movement of

for stability.

example of the effectiveness and stabilizing in¬
fluence of this machinery in combination with the

that

use

credit facilities of the

the

duct

country, checks were in¬
destination and tardily re¬
mitted for.
This meant loss of time, extending addi¬
tional credit, carrying additional reserves, and many
additional handlings of checks.
It resulted in main¬
taining reciprocal accounts, and collection accounts,
and clerks or officers who were specialists in rout¬
ing collections. And finally, when we came to a crisis,
it meant a general breakdown of our domestic ex¬
change machinery. This has now been changed. The

Deposits of the principal banks in New York
City decreased $320,(Kip,000 from July 2 to
September 7, on account of Government and

(b)

These withdrawals caused a steady drain of
gold from the Federal Reserve Bank of New
York to other Federal Reserve banks, accel¬

Withdrawals.

erating toward the end of the

Federal

period, and in

gating $108,000,000.

;

(c) This adverse flow of funds was substantially
offset by Government transfers to New York,
by the sale of certificates of indebtedness by
New York banks to other Federal Reserve
banks, and by rediscount
Federal Reserve banks.

(d)

September 3 the Federal Reserve Bank
of New York owed other Federal Re¬

By September
repayment of 'these loans was com¬

serve

$47,500,000.

banks

pleted.

rose

(a)

"The

and

tion.

They have increased the efficiency of our cur¬

rency

and circulating credit and enabled the average

ened domestic exchange

from

transfer

deposits

$200,000,000.

the

customers'

Federal

Reserve

operations, made possible the

part of the country to another of

one

have

continually tied

shipment of cur¬

in transit.

supply

truly

return

review

our

the

banking changes which

occurred:

The national banks

now

deposits

savings

cept

have the specific right to ac¬

and

invest

part

them

mortgages.
9.

10.

again to in¬

Federal Re¬
Bank, a course which experience shows
likely to be followed increasingly when the

the

increase the efficiency of the dollar in these ways is to

The national banks may now

Member

banks

There

Consequently they were obliged

money

required

increase the number of dollars."

decline again, as

their customers.

have

increase the effective currency

8 and 10 by $237,000,000.

tax checks were collected,
certificates of indebtedness

amount

when

and as they sold

their

They have

checks, cheap¬

millions of dollars by means of book credits that

many

their books to the account of the

borrowings

crease

of routing

otherwise

Their deposits then began to

(c)

work than before.

wasteful habit

the

reduced

and they have, therefore, reduced the average

Bank between Sept.

high

deserve

rency,

deposits:
(a) The principal banks of New York City reduced

their

authorities

praise for what they have accomplished in this connec¬

would

Government.

(b)

American banking history,

our

Reserve

September 23.

Following this large Increase in
their

Federal

the

dollar to do more money

they paid for their subscriptions to the new
issues
of
certificates
by
crediting that
on

features of

district on September 15 in¬

The banks of the

amount

fund represent some of the most

of the gold settlement

This excess of redemption over taxes on Sep¬
tember 15 necessitated as usual a loan by the
Federal Reserve Bank to the Government.
The amount, $146,000,000, was repaid gradu¬

their

high

development of the clearing and collection system
the Federal Reserve banks and the establishment

creditable

Certificates of indebtedness were redeemed
and paid in this district in the amount of
$425,000,000, which was $105,000,000 more

creased

professor of Economics and

the June Conference of the Acad¬

He said:

ally and was extinguished on

(c)

by students may be gathered from

of Political Science on the subject of inflation and

prices.

than the taxes payable.

(b)

checks,

principal settling medium.

our

Finance at Princeton, at
emy

of exchange

deduction

the

now

How all this is viewed

principal. New
$453,000,000, in connection with the

following transactions:

are

the address of W. K. Ivemmerer,

and 15 the deposits of

Between Sept. 8

York'banks

which

other Federal Reserve banks

Bank

notes, which were then our principal settling medium.
So the Federal Reserve Act has nearly succeeded in

the fol¬

owed the Federal Reserve Bank of New
York $45,000,000.
By August 27 repay¬
ment of these loans was completed.

National

In 1863 the

exchange breakdown.

Act eliminated the deduction of exchange on bank

eliminating

July 20

the en¬

with their credit facilities, have

taken in conjunction

lowing :
On

system covering

have brought

country,

absolutely eliminated the danger of another domestic

operations between

These rediscount operations comprise

banks,

Reserve

about quicker, cheaper,
and absolutely direct collection of checks, as well as
notes, drafts and coupons.
Their collection system,
and their mechanical facilities for transferring funds,
tire

ending September 17, aggre¬

the three weeks

system covering the entire

directly routed to their

(a)

■

Through the desire of

manner.

mostly in the smaller places, to de¬
exchange charge, and through the lack of any

of the banks,

some

steady credit facilities and rates.

commercial

collected checks in a most wasteful

uneconomical

and

District

Reserve

Now

funds, that is, uncollected checks.

to unavailable

We had always

transactions in the New York
for the months of July,
August and September.
In these months the move¬
ment of funds was unusually active, yet credit equi¬
librium was maintained
and
borrowers
enjoyed
like to give you some

Federal

of available funds.

So much for the movements

system, I should

ence,

borrowings at the

exercise trust

accept drafts drawn

may

powers.

them.

upon

about $1,000,000,000 of such bills in exist¬

are

compared with none in 1914.

I shall have

of them later.

say

serve

Government
the

deposits

11.

resulting from

the latest

sale

of certificates.

12.

banks

National
trade

begins to withdraw from them

And,

may

invest

in the shares of

foreign

banks.

they are large

enough, national

banks may

establish branches in foreign countries.

movements of funds changed the position
of the Federal Reserve Bank of New York rapidly
from week to week and sometimes from day to day.

These heavy

13.

And finally, the

Federal Reserve banks, in addition to

their responsibility as administrators of
banking reserve of the country, are developing

assuming

Disregarding discounts and sales of acceptances be¬
Federal Reserve banks, the lowest combined

the

percentage of the Federal Reserve Bank of
New York was 31.6; its highest was 43.
But despite

banks, doing most of the thirds which their city cor¬
respondents used to do and doing many things by

tween

reserve

these

eral

fluctuations, the reserve position of the
Reserve

System did

These operations were
house on a

little credit
at

Fed¬

not change substantially.

essentially those of a clearing

national scale, and were effected with as
disturbance as the settling of balances

local clearing house.

into

great

reason

service

their

organizations

country-wide

for

the

organization,

their city correspondents could never do.
eral

Reserve

banks

are

member

proving to be

which

The Fed¬

day-to-day

working system for the member banks, helping them
to conduct their affairs with
ness

and

economy.

maximum of prompt¬

NATIONAL
How

Has

the
+

Evolution

Manifestly this

knew in 1014.

eyes to

Affected

Many of them

the member banks

have

have felt

still in

the

But all too

by mail

many

bit resentful

ten

spend

bank

two

three

let

days

him

such,

meeting

country

our

bankers

one

them

nothing better than to give

said

facilities of

the

Federal Reserve

terest.

the

customers,

Federal

banks

as some

Reserve

bank

are

the Federal

Reserve System.

your system, and therefore bad for you.
borrowers of the country must understand the

ing of the system, and
can

you

banks with

The
mean¬

not

Seize
and

also

get

steady borrowers, of which

share,
5.

this period

started

Study how
(a)

the

road

some

and

able,

operations.

their
tres

do
at

will

stands

Keep

the

cost

checks

banks.
on

this

reason

that

money

can

and

the

saved

services

ceived, and others because they have not
lized
was

that
their

seasonal

this

their

eligible

re¬

serve

correspondents

awaiting decision
not

But to
6.

These

profits

tively

may

risk,

now

for

days
to investment.

the

realized

basis

gression to enlarge upon

regular

ceptances.

tend

throw

investors

steadier

buying

the

bills,

market

for

be.

our

domestic and foreign commodity
are

helping the Federal Re¬

exercising

their functions

stabili¬

of credit.

back to
war

our

and

evolution program:

war

inflation thousands of banks

or three
The number of continuous borrowers is de¬

living

normally

within

sion,

not

should

proceed

pre-war

the

their

own

The Federal Reserve banks

steady

credit

means

were

in¬

sudden credit expan¬

expansion.

They

in¬

are

tended to help members finance their customers and
not to enable members to obtain funds to
re-lend at

in¬

a
profit in the general credit market.
During the
abnormal credit expansion of the war
many of these

di¬

underlying principles

this possibility, to
New York Dis¬

up to such an ex¬
third of them are elready
occasional buyers of bankers' ac¬

and

tended to provide seasonal

but it is

which country banks in the
trict have recently waked

nearly

would

cause

banks in the most effective
way possi¬

and resources.

vestment in bankers' acceptances of all funds
excess
of normal
balances with corre¬

tent that

hand, falling

would

clining, however, and the reduction
steadily until all our banks return

rela¬

immediate

Here I should like to make

come

Due to the

Years.

spondents.

(have been in debt continuously for two

paper

only

without

Both

On the other

and

rea¬

country banks, but city
well, waste large potential profits.

will

ble in
zers

Again, too often

reserve.

lower.

this country
too easy credit situation.

movements, and

unusual increases of deposits are

with

way

banks

members

excess

deposited
weeks

broader

■

finance

compensating

banks in cen¬

were

country and in

Country banks, therefore, in
buying bills, may feel that they are helping

money

being drawn

this

effect easier

here

banks

them

system.

because

ele¬

rates

would tend to

influences

these

and stiffen

other

change and collection accounts, used, for con¬
servatism, to maintain excess reserve balances.
Many are still keeping such balances to-day,
some

rates

The

working at all times.
For¬
merly most banks, in addition to keeping ex¬
your

discount

They

basis.

bills

greater burden of financing

the

banks

day.

per

exert

interna¬

the with¬
drawal of foreign funds and the
drawing of
more bills on American banks and bankers
to
take advantage of our lower rates.
Both

used to

to themselves,

member

collect

by using the

(c)

heavy

cost

bank

the

Expressed in

being drawn instead
where

discount

handling 1,500,000 checks
this

fewer

credit conditions.

collection facili¬
for the transfer of

The Federal Reserve

rates,
on

action of

bankers

these influences

coupon

collection and other accounts which

are

the

and

desirable.

influence

recognized international
banking investment. They would

result

banks

ties, as well as those
funds, are now nearly so complete that it is
no
longer necessary to maintain the many
seem

through their

way,

medium of
also

obvious waste.

note

for their

reason

flow of credit.

our

The check,

cash.

ances, which are the

thirty-four coin and currency reser¬
voirs accessible over night to the vast ma¬
jority of banks, vault cash may often be con¬
siderably reduced.
Unnecessary vault cash

(b)

makes

would be as follows:
Rising rates in this
country would attract foreign funds to this
country for investment in bankers' accept¬

old

bank has its

every

into

once

Reserve Bank

liquid and readily convertible
large and steady volume of

a
•

stabilizing

tional

towards liquidation.

you can cut out waste from your

With

the

mentary

only self supporting but actually profitable.
upon

is payable
90 days, nevertheless the

when international gold movements
again begun, the Federal Reserve banks

some

basis

withdrawable

acceptance

which,

Seize upon the present period of heavy credit demand
to revise your relations with
your customers and to

practicable, upon

deposit is

the

bankers' acceptances and a wide market for
them will constitute the medium through
are

the

investment.

educate them.

get each account, as far

the

and

at the Federal

will

accept-

These

development of bankers' ac¬
ceptances beyond that, of providing member

the only ones who

are

investor

the

While

interest in

This is bad

for

balance.

But the Reserve banks have

any

loans, which of course is not the case, does
get you anywhere and does get your customers

down

bankers'

convert

substantially the equivalent of

not

give

demand

cash

doing, that

now

without

course,

hour after receipt of

ability to melt the acceptance at

System.

won't let you make

reserve

only in, say 60

Having grasped the policies of your Federal Reserve
bank, explain them to your customers.
Don't tell
your

well-known

some

divide with the bapks of the State the
savings
he could make for them by
showing them how to use
the

pur¬

bills,
obligation
bank, guaranteed by
some other bank, at around 0% interest, in¬
stead of a deposit carrying from 2 to 3% in¬
of

his job

into

therefore,

studying its policies and

and

them,

request

'v;-;: ances

visit the bank and

operations. Find out what it can and what it cannot
do for you; also what you can do for it.
At a recent
he would like

In the New York Reserve Bank it

usually takes about

matters;

purchase

charge.

particular officer to specialize in Federal

one

Reserve

bills

purchased, and upon writ¬
telegraphic request will sell them, or

itself

evolutionary steps.
Detail

of the

hold the bills thus

To those bankers I should like to be
permitted to suggest

Most

The credit risk is therefore next to nothing.
The Federal Reserve Bank
will, if desired,

of all the rapid
changes which have occurred.

some

wire.

chased, in addition to having the acceptance
of a bank, a|re endorsed by some other bank.

stage-coach era, jog¬
a

rates

In order to

many Federal Reserve banks regularly pur¬
chase these bills for them upon request, either

exhilarated by it as to get their

are

times at

remarkably steady.

are

make them available to their member bank&,

its

ready market at all

which

cou¬

rapidly evolving into Pullmans.

they used to do, and perhaps

the most liquid and readily convertible
banking instruments.
With the steady
backing of the Federal Reserve banks they
of

one

are

feet off the ground and soar in the air.

149

are

motive power by its stock ownership

new

Some, indeed, have been

ging along

Banks?

Every member bank is

contribution.

vitalizing influence and

SECTION.

We sometimes have to sit up and rub our

pled up with the
reserve

Member

the

different picture from the

very

if it is really true.

see

and its

BANK

each

ticular

now
us

were

overlooked

forgotten,

time for them to be restated and for
see

how

they apply to

our

own

par¬

case.

Bankers' acceptances

are

drafts,

But, while it

seems

obvious that buying paper or lend¬

ing to outsiders should not

rule go on while

usually running ninety days or less, drawn
by merchants or manufacturers, represent¬

borrowing—and on this point credit elas¬
ticity demands that no hard and fast rules should be

ing movements of commodities, and accept¬
ed by American banks and
bankers.
They

of debt and accumulates

bank

made—it is equally obvious that as

a bank gets out
surplus funds, it is highly

BANKERS'

150

do, and for whom they do it; and, above
they do not or cannot do.
After what
they did in the war many people have come to think
of them as a kind of financial cure-all.
Their limi¬
what they

it should carry, as a first reserve,
which through maturity or sale cgn be

that

desirable
some

CONVENTION.

paper

quickly converted into cash in the open credit mar¬
ket.
If every bank loaned up to the limit of its
resources in long-time securities or local or unliquid
loans there would be constant pressure on the Federal Reserve banks.
But if every bank had in its

tations as well as their powers
As great

Federal

its power as

ened.

credit stabilizer would be
.■;..;

Evolution for the

International

program

for the member

strength-

banks on

evolutionary
their road from the stage¬

velop into the
The

emerged in 1831, may de¬
great mogul type of to-day.
Reserve banks,

Federal

have developed a

were,

starting out of space, as it

but

good deal in these six years,

well that their evolution is

they know very

far from com¬

this

methods

and control, which

organizations, remains to be
with its thirty thousand

country,

banks and its great
We have much,

We intend to

our

best to discharge them.

But the proper

banking lies in the contemporaneous

Federal Reserve
for¬
working for the best in¬

development of both the

the member banks, so

tune

everything, to learn. We

responsibilities which lie upon the System.

evolution of American
and harmonious

proved in
individual

industrial decentralization.

I might almost say

realize the immense

ward

almost wholly uneducated as to their
of operation: the meaning of their policies;

The country is

suspended

proved effective among the European central
banks, with their highly centralized banking and

banks and

plete.

being

has

industrial

to say that an

evolution must take place in the engine in
little boiler on wheels, with its water barrel

of wood, which first

and its pile

of credit regulation

The efficacy

equal amount of
order that the

gold

developed.

Engine, Too.

Pullman era, let me hasten

shipments

most of the world, whatever influence
the Reserve banks may have in minimizing overseas
movements of gold is still dormant and remains to

throughout

rash enough to suggest an

Now, having been

coach era to the

much

should be understood.

service organizations for the member banks,
helping them to do their business more promptly,
economically and soundly, they are merely on the
first rung of the ladder.

portfolio some readily convertible paper, you can see
how much sounder the banking position of the coun¬
try would be, how much the problems of the
Reserve System would be simplified and how

what

all,

with one another,

terests of our industry, commerce

that they may move

and agriculture.

Essential Credits.
By If. Barker Willis,

time there comes up,

From time to

discussion,

nomic

some

Professor of Banking, Columbia

in the course of eco-

which appears to present a

issue

special application of principle,
sympathetically considered and
analyzed. This is the duty of the theorist, but perhaps even
more the obligation of the man of affairs whose duty it is
to deal with conditions in the world as he finds them and
to adapt himself as far as practicable to current phases of
problem or to call for a

new

Such

questions should be

And yet, when such

life and thought.

questions are care-

usually turn out to be nothing more
problems dressed in a new guise.
As such

fully considered they
than

familiar

they

can

frequently be disposed of by the

application of

University.

blunderthat the
industries then selected as essential as well as those in
many cases stigmatized as unessential were often unwisely
chosen. Our war boards of various kinds reversed and rereversed themselves repeatedly. His would be a shrewd
and clever mind, indeed, who could trace any consistent
trend in thought or policy in the industrial system followed
out during the war. The fact remains, however, that there
was a at least a thread of logic which led to the promotion of those industries whose well being was considered
likely to promote success in war. The warning to banks and

say, now that the war is over, that there was much
ing in this whole field of thought and action, and

bankers at that time to refrain from granting credit to
non-essential industries was thus tantamount to a recomwhat are called "essential credits."
mendation that they support only those industries which
years a very considerable body of misunderstanding and
could be considered useful in the promotion, of war. This
erroneous interpretation regarding this subject has been deis understandable whether we agree with the application
veloped.
There has been a disposition to lay stress upon
of the idea in practice or not. *
aspects of the credit question which should probably not be
But since the close of the war, and especially since the
regarded as fundamental in any sense, certainly not as liavattempt to limit the expansion of credit, the idea of essen-|
ing a direct bearing upon the current conduct of banking,
tiality or non-essentiality has presented itself in a new
A part of this misunderstanding is the product of the war
form. The position now seems to be taken by many observand of the conditions growing out of it.
During the strugers that there is some kind or group of banking credits which
gle it was necessary for us to economize in outlay, and to
in itself is to be reckoned desirable, essential or beneficial,
limit our productive activity as well as our consumption in
while, on the other hand, there is some classification or
many directions.
Above all we found it needful to look caregrouping of credits which in itself is to be regarded as unfully to the conditions under which credit was extended to
desirable, injurious or dangerous.
In discriminating bevarious types of enterprise.
Hence arose an effort on the
tween applications for loans, therefore, banks are urged to
part of those who were endeavoring to promote success in
act freely and generously with respect to those which are
the war to discriminate what were called essential and what
essential. This injunction has no meaning unless we anwere called unessential credits.
The hasty and loose ideas
swer as we did during the war, the question: Essential to

well-known
Such

which

principles.

discussion of
Within the past three

presented in the current

issue is

were

then

urged in many quarters had little value,

but in so far as they

definite interpretation of the
to

tion

non-war

war

produc-

requirements and of withdrawing it from

purposes.

Let it

be noted

that this concept of

essentiality had little or nothing to do with banking except
indirectly.

It recognized certain activities in the business

and industrial world as
down

the

pose

essential to success in war.

It laid

general principle that the satisfaction of these

requirements

was

fundamental.

held

that

the

of the economic organization of society should

promote the development
while restricting it along

^0T A PUBLIC Question.

idea of essentiality as applied 7

specific object, that namely, of concentrating
upon

what?

possessed any, it was because of the

pur-

be to

of industry along war-like lines,
non-warlike lines.

It is proper to

To answer such a question, however, it

is necessary first

of all to inquire who has the authority to reply to it, or,
in other words, whether it is simply one of those problems

which

the individual

puts to his own intelligence,

whether it is a matter properly to be passed upon by Governmental authority.
As to this there can be but one

opinion.

We are not now at war and we are returning

toward a condition of individual responsibility in which
the effort is made under our form of social organization to
regard citizens as able to pass within reasonable limits
upon the quality of their own conduct.
It is not for any

NATIONAL
board

government body,

therefore, to decide what is

industry

essential

are

given

any
war

nalism

For it to do

case.

which

what

centralization

form.

into

such

would be the conversion of

properly set himself

paternalism—a

would

case

take

tiality in loans has been carefully stated.
adhered

hands

local

regarded

the

policy .of

banks

non-essential

entirely

what

loans

"speculative."

stating that, "it has

industry

intend to do
tention

has been

that

the

fact

general

genuine

countered

same

would

loans

bank

discounts

and

credit

have

en¬

strict rules of sound
sumes

for

that

business

This is

Board

for

assistance

Federal

Reserve

employed

are

now

and

Banks

from

contradict it."

banks and

which acts as

the

then

The purpose of the

the Federal Reserve system

t he

to bring

business

member

under

the

stated

the

Nothing

country.

carefully

bank,

be it large or
conditions,

proper

small, to obtain access,

the common

may,

The purpose

therefore,

briefly

distribution of

re¬

facilities, and, of course, of keeping the credit of

the country

eral

Bank

reservoir of

liquid and safe.
Act

Reserve

and

There is nothing in the Fed¬

nothing

the

composition

safely exercise,
reference

the

ethical

relative

Its funds

dustry.

metaphysical judgment with

merits

of different

kinds

in¬

the funds of the member banks, and

are

conduct

unless

non-liquid condition

the

Whereas at

war.

garded as

one

welfare.

winning the

and

war,

other purpose

some

which

not

were

discriminate
or

between

essential

is such discrimination possible?

and

non-essential

In answering this

and

essential loan

re¬

was

unessential loan was

made for

one

requirements,

essential

parently

loan whose purpose and existence, is beneficial

now

suggested is ap-.

to, or in harmony with, the notion of liquidity in banking,
while an unessential loan is

one

which is made for purposes

other than these and which therefore is not consonant with
the

development of efficiency in banking.

Reduced to this relatively simple

essentiality in credit
merely

now

to be

are

ests

regarded

the

becomes

basis, the discussion of

comparatively

discussion of the types
as

sound

easy.

upon

the

loans

of commercial

short-term liquid

angle, then,

varies

from

element of ethics

On this subject experi¬

and theory are at one, and both indicate the

confining

forms of loan which

beneficial to the best inter¬

banking system itself.

which

time

in which the term is

individual
can

financial

selection of desirable bank

needed by war

the best standards of

credit,

unfavorable

sense

this

canjt perform this function; how

of the effort

preventing approach to

loan in the

From all this the conclusion is to be drawn that the proper

How

unessential

which thus tended to promote industries

place for the determination of essentiality in credit is the
bank.

what purpose is being

Most current discussion about

that

that course is in any way

its

the

which contributed to an industry essential to

made

essential

totally different from that which was used during

for

know

applied in the

now

those industries

its support from
them

suggested.

inevitable conclusion that the concept of essen-

industry, and

regards

applied to credit leads to

already

about

which by

of the banking

If this be true, then it would again

which has established and set in motion various classes of

re¬

of avoiding speculative operations

bring

necessarily

ence

that

condition

of credit limitation

purpose

this, in the last analysis, means the funds of the community

shows

generously and effectively

may

clear-cut notion of what is essential

paper is

the

Federal Reserve Bank itself to indicate that it has, or can

standard

that the

tiality

equitable distribution of

that of effecting a reasonable

subject is eventually susceptible of analysis designed to

appear

in general, as set forth in the

about

Federal' Reserve

discount

con¬

society, reasonable interpretation of the

banking conditions.

presented for re¬

are

financial

which

Federal Reserve Bank and of

credit which the Federal Reserve Bank holds.
of

strengthening the banking system,

of improving the

be arrived

show

with

safeguarded in the Federal Reserve Act than the right of
the

same.

to restrict inflated credit is that of

credit between the different branches of the commerce and
and

the

are

sought in curtailing credit.

of credit has

relies on them largely for information

reference to the various items which

itself, Is

which is

paper

undesirable

of reducing over-expanded credit it is gen¬

that it

that

same

can

community through its mem¬

lias its touch with the business

Act

proving

object of contraction of credit be something other than this,

Moreover, the Federal Reserve Bank

already been stated.

discount.

other

loan but relates to the re¬

new

terms essential and unessential as

cooperative or¬

essentiality

ture

bank which holds the funds

Board

Reserve

ber banks and

system, that is to say, of strengthening the underlying struc¬

True, its directorate includes members who are

Federal

the

position of greater liquidity and responsive¬

order

mentally

appointed by the Federal Reserve Board, but the position of
the

from

The problem as¬

If, however, the purpose of such reduction be funda¬

try,

many

settle the issue.

however, to

ness

Can it be settled by a Federal Reserve Bank?

Federal Reserve Bank

ganization.

operation.

cooperate with and sustain the active business of the coun¬

operation.

question of essentiality as an

is not,

matter

member

reason

storing it to

question is then only transferred to another forum for

of the

some

be served is that of

critics of

Banker No Censor.

II.—The

adjudication.

essentiality in the

departing

erally supposed that the primary or immediate purpose to

and the selection of preferred

To refuse to pass upon the

many

of commercial intelligence distinctly

administrative

the negative it is

the elimination of

one

In the process

purpose.

action

that

rules

same

war

credit

the

old

factors of the situation

entirely untrue, and the reports coming daily to the
from

sources

The

doubt

the

during the stress of the
war

whether

sound banking

stituent element in the bank's portfolio, but the underlying

do this,

Board's

the

accomplish

difficulty is

think

sense

slightly different aspect when the question which

newal of

under¬

never

financial

is raised does not concern

the consistent information and judgment

banker

The

Board

in the question

banker

the

warrant

can

given case, then,

not. \ If the answer is in

sound banking

upon

The Board is too far removed from the

sary or otherwise.

by the banker

transaction is in the best

abstract

Continuing his discussion

finan¬

In his case the performance of such duty

The test of essentiality in

found

proposed

society, he has his hands full in doing
j

operation

country

actual detailed situations involved to undertake to

must

remains

he undertakes the role of

entirely in operating his bank

principles.

taken to say what class of loans should be held to be neces¬

the

members

is found

at¬

statement:

local

as soon

his own duty well,

credit situation, Governor Harding remarks

has relied

The banker is decidedly human and he

difficult to see how any considerations of

the

morals

is always an ungrate¬

sense

In fact, he soon comes to recognize that, like

Pope.

other

Federal

the

economic

to indicate that the solid

study his client thoroughly, and the Board has

of the activities of the
desirable and others as

usually impossible of successful performance by

of self-interest

Reserve Board lias consistently from the
beginning of the effort to curb the tendency to headlong re¬
sort to credit operations simply urged the local banker to

and

some

seem

interests

serious hardships."

recent

"The

"expansion of undue

volume

business

of the general
in

that

human agency.

cial

non-essential, and does not

upon

falls into difficulty or runs the risk of obeying the dictates

this subject,

bank, the idea that the banker can

up as a censor

The function of acting as a censor of

even

and

one

any

restrained," while lie has also noted that "the fact

the

practically the
and

are

Governor Harding has further called

so.

ful

the

undertaken to classify any busi¬

never

essential

conduct

Governor Har¬

ding has outlined the attitude of the Board

ness

essen¬

the individual

undesirable.

extreme

very

community, passing

pater¬

It has consist¬

leaving

decision

the

question it is necessary first of all to reject, even in the

case

peace-time

151

SECTION.

the tests of essentiality in

The attitude of the Federal Reserve Board

ently

BANK

banks

commercial

paper

reasonably possible.

necessity
advances

far

Viewed from

essential loan is one which conforms to
banking, and

them.

unessential lqan is

thus eliminate

one

entirely the

morality which so many have sought to

import into the discussion of essential credits.

When

what

amination

loans

from the discussion of essentiality of

pass

be called the metaphysical basis,

may

to an ex¬

practical standpoint,

gestion that prices may fall or change as a
granting Cfr

circumstances

which he meets

problem which the banker has to face and
at the outset in his effort to
the matter of

Suppose the existence of two

price.

let us say, in the jewelry business and the

of them,

other en¬

The banker, who has

gaged in, say, the canning industry.
only

clients

limited amount of additional lending power, is at¬

tempting to decide in his own mind what he will do.

The

order to control prices, we

should accept

to be properly

which

subject appeals to the banker immedi¬

the

in conse¬

ately, either as the result of his owrn thought or

of argument offered to him by his client, is the

quence

fect of the extension of

credit in either raising or lower¬

The canner may say to him

ing the price of the article.
if

that

it will be

granted the necessary credit

can

ef¬

bankers

price period has passed by and the goods can be mar¬
satisfactory or normal price.

what he regards as a

consider the price effect of a with¬

drawal of credit already

which

concern

has

If, for example, a busi¬

granted.

receiving

been

but that he finds his collections slow and
his present volume

that in order to continue with

he requires advances

of trade

This, however, is one of those cases, numerous

sufficient to enable him to bridge over

Here is a practical

period necessary to get in his funds.

issue of the kind which I

imagine the average banker must

When resolved into its ulti¬

times be obliged to face.

many

mate terms and
this becomes

transaction the banker should refuse invariably to
credit for the

be argued that

strict

that most
It

standards.

banking

V.—Tiie Meaning
I do not for

it would be very much better for the com¬

the market quan¬

tities of ornamental articles which are not essential in that

they do not conduce to the strength and health of the com¬

munity, but the moment that
of

effort is made to apply such

judgment difficulty is

this basis but

If the

encountered.

banker chooses between the credits offered

to him, not on

the basis of the internal condition of the

011

industry, his object being to continue to finance those lines
of trade

whose

products are being steadily demanded and

be expected of him.

can

which

others.

products
and

are

non-essential.

If, for example, in

the

are

This he

can

demand for bank credit

suggestion is made that unless such credit is
will

fall of prices,

ex¬

the request which is

thus presented to the banker is really that he
in

settle for

never

given line of business where

overstocked there is

tended there

should assist

maintaining the existing level of prices for that particular

article.

If in

industry in which collections

are

slow, the

banker is requested to increase the volume or period of the
credit which he extends in order that the industry may not

obliged to curtail its operations, that is to

say,

capital into the carrying end and less into the

to put
manu¬

him to make it
on

possible for jewelers to

putting their

the market at about the present level of prices,

when if they

were to cut

prices they might succeed in get¬

ting cash payments which would be made by those who
opportunity to purchase cheaply with

may

steady flow of goods from producer to consumer

described as normal and that the credit

properly be

growing out of it is only that credit which will in any event
for at

be called

production is going on.

apy time when

larger supplies of credit are requested in order to take ad¬
vantage of business opportunities which involve the taking
up

of commodities because they are low in price w7ith a view

holding them

period longer than the normal mar¬

over a

keting period, the banker
offered

to him as a red

involved in

comes

movement of
press

prices,

describe

Whenever he be¬

commercial operation which affects the

which is designed to advance or de¬

any

partner in what we popularly

Neither speculation nor the influ¬

speculation.

encing of prices of

well regard the question thus

may

flag of warning.

them, he has become

artificial method

be regarded as

can

admissible from the sound banking standpoint.
of the

case

described is
of

price

we
one

both absent the
so

which involves

manipulation,

plication in

that

may say

and

that

In this view

essential credit negatively
element of

v7here

speculation
factors

these

are

pre-supposition is in favor of the credit ap¬

far

its essentiality is concerned.

VI.—Banks
This

view

that banks

amounts

are

not

Not Agencies

Reform.

of wrealth

social reform.

themselves and

should

in them.

The

share in such efforts.

Marketing.

part of

Looking at these two requests for credit from
tive standpoint it is
them

really to be based

either

compara¬

thus seen that the discrimination be¬

case

the bank

upon

called

ascertainment

upon

to finance

industry oy simply to provide for normal marketing of prod¬

factors
is

wray

These

the redistribution

objects

are

all good in
those

earnestly sought by

banker

his private

In his public

the idea

institutions

capacity

who

capacity may
as

the trustee

commodity it is not for him to temper

the wind to the shorn
vs.

stating in another

wiiose function is that of bringing about

believe

view to future

philanthropic institutions

of the funds of the

IV.—Financing

tween

of facilitating

the extension of bank credit for the purpose

saw

demand.

whether

We have a standard

asking the banker to invest, for the time being at

put, or from another standpoint it is equivalent to asking

economic theory.

experience regarding the length of time required to

the regular

least, some funds in maintaining the volume of jewelry out¬

product

in all

of normality is by no means as

place goods in the hands of consumers, and we know7 that

facturing end of the enterprise, the request is really tanta¬
mount to

wrord

dangerous

normality in the marketing of goods which grows out of

past

Moreover, he leaves it to the

community to determine which lines of trade are essential
and

normal—a

carried off under practically normal conditions, he does all

that

fact that the practical

difficult in practice as it seems to be.
of

manufacturing jeweler continue to put

moment ignore the

Nevertheless the recognition

prices that do not fluctuate very greatly, rather than to have

standards

"Normality."

application of these ideas implies some recognition of the

might

munity to have a regular steady supply of canned goods at

most important step to¬

sound application of the idea of essentiality

which I have just set forth.

in credit

w7ord

extend

When he

of affecting prices.

purpose

he has taken the first and

ward making a

standpoint of liquidating

power,—that is to say, which loan offers paper

conforms

mere

question which of these types of loans

is the better for the bank from the

nearly

decision relates to a new

Wherever the

action.

judged by the standards we have already set,

simply

free of the consequences

institution is endeavoring to get

past

life, where

banking as well as in other phases of business

does
the

commodity in

interested in the value of the particular

question.

in his business,

of the

with harm to many other individuals who

bank and perhaps

there is no accumulation of stock

of the

the stock of goods

with resultant loss to the client

market

the

upon

given quantity

of the withdrawal

advised

suddenly

goods

credit, the consequence may be to force

The jeweler may say that

certain line

credit and has counted upon that to carry a
of

Undoubtedly there are cases in which

is obliged to

the bank

invariably be left by

general interplay of the market forces

the

supply and demand.

are

low

The making of prices must

carried.

possible for him to carry large accumulated stocks until a

keted

credit in

limit

ness

form

idea that a function of banking is to extend

responsibility far too dangerous and too vague

discriminate between loans, is

both sound, solvent and responsible men, one

of the bank,

a sug¬

consider. Were

factor which the bank should

to accept the

result of the

withholding of bank credit is not in ordinary

the main

from

them

The fact that in either or both cases there

ucts.

Prices.

111.—Credits and

CONVENTION.

BANKERS'

152

lamb,

or on

the other hand, to play the

financial Robin Hood engaged in depriving "male¬

of great

wealth"

of their accumulations.

Banking

essentially the stabilizer of the economic organization and

this should be

constantly borne in mind in passing upon

application for credit.
toward economic

If the application is

one

any

which tends

stability, toward regulating and steadying

NATIONAL
the

flow

commodities

production,

through

of price or cost

prima facie evidence in favor of its being what we may

call

essential.

essential because it represents a

It is

vice which is designed to carry out the
of

ent

If you

termine the essentiality

himself from

metaphysical or ethical consid¬

from the standpoint of

familiar

the

of sound

ever-pressing problem

and

What is safe and wise from the stand¬

and safe banking.

point of the bank is likely to be essential to the business of
the

community, and

unessential, which in this case means injurious,

is likely

is unsafe and unwise

what

the

cause

effects

reflected

time

demand

the

when

Doubt¬

puzzled by this question at a

the part

of the community for

credit is greater than the supply that can readily be
In such circumstances,
more

granted.

the question whether a given loan is

truly needed by the community than another one wdiich

offers very much the same financial aspect as to

liquidating powrer and

frequently

may

other essentials

present

itself.

finds in ordinary times a
the

be¬

policy

banking

unsafe

speedily show themselves in manifold other ways.
less the banker himself is often

application of higher

which

organized

means

rates

i)f

maturity,

sound banking,

banker in

The

useful

the

needed

were

at fault.

usually

was

question came up whether it was desirable

Criterion.

of essential versus unessential credits thus

The question

credit.

even

During the \york of the Gold Export Com¬

point.

the

allow gold

becomes

industries

what

mittee

VII.—Discount Kates as

confirmed it, for it showed that,

I can give you one illustration which may serve to make
clear my

and in that of business.

effort to de¬

of industries by reference to their

judgment of the best qualified and best intentioned of men

maintaining sound, stable, and above

liquid conditions, both in the financial organization

The war, with its

shook this view of the banking adjustment of

On the contrary, it

judges the loans which are presented to him

erations and

all else,

the

experience and that no substi¬

efficiency or need in promoting the conduct of the war, in
no sense

event that the banker absolutely

divorces

determined upon.

theoretic and academic way of

tute for it has been found.

whole, as a successful development of it

be attained only in the

that this is

analysis which is based

entirely differ¬

fulfilment of, the economic wishes of the

community as

dealing with the question, I merely answer that it is a theory

whether they are or not.

pliance with,

tell

competitors for

intensity until supply equals de¬

mand at the level of cost that is eventually

Essentiality here consists entirely of com¬

standards.

can

it decline in number

be undesirable in and of themselves, but it is not the

function of the banker to decide

This merely means that as the cost

of credit rises the requirements of various

regular functioning

That question is to be answered by resort to

There is always enough credit to

of credit.

around at a price.

ser¬

The commodities whose flow is thus assisted

society.

may

question

only when they are studied in connection with the

various channels of

the

distribution and consumption, there

exchange,

153

SECTION.

BANK

that case

of discrimination in

of interest.

society

financial basis it is the essential

which

were

then seeking to conserve to be

used in the manufacture of

almost

was

answer

cheap jewelry for export.

immediately

The,

stern economic

given by

moralists that this was no time in which to indulge the silly

foreign buyers

vanity

second thought and

of cheap

changes so many hasty generalizations.
the little
a

But

gewgaws.

sober

investigation changed this opinion as it

It was found that

gold which went into cheap jewelry would control

greater amount of the labor of the persons in South

far

America

Cuba who

were

engaged in producing the sugar,

the nitrates and the wool which were essential to the welfare

our

than it would had the corresponding amount of

army

gold been shipped as bullion or even had it been used as a
basis for bank

The judgment of the community in

credit.

this regard was the best test

of essentiality and the cheap

jewelry industry was accordingly allowed to maintain itself
because it was the best means of getting what we
believe that in the last analysis, with society

needed. I

organized as it

the judgment of the centuries based upon experi¬

is to-day,

with human nature furnishes the safest test of relative

ence

industries, or what are regarded as such by the community,

importance in connection with credit as in connection with

which

are

goods.

tion.

What is

in every

willing to pay
more

industry

advancing rate of accommoda¬

likely to be true is that there will be

We may some time enter a more Utopian state, but

have not

of varying inten¬

sity, which will call for accommodation if rates are suffi¬

ciently law, and which
of money advances.

wdll be held in abeyance as the cost

This is the theory of the regulation of

bank credit in relation to commercial need which
tested

and

found

available

general

has been

working

rule

of,

thumb throughout the wrhole history of our modern banking

experience.
wants
that

It is based upon the view that if the community

certain thing it wdll pay for it.

If it does not want

thing it wdll not pay for it, and the amount that it will

take and

pay

for varies according to cost.

It is this view

Its Merits.

general principles governing a phase

to set forth

the

of banking which is

to-day surrounded by much violent sentiment and niisunder-

I should, however, be the last to suggest

standing.

tliat

there

might not be cases in which the sound common sense of the
banker must rise superior to the ordinary

wisest and safest
of

rules of the pro¬

This is the case in every profession and he is the

fession.

man

who neither disregards the teachings

experience nor is slavishly bound by them.

cases,

There are

and many of them, in which the individual judgment

of the banker as to the

necessity of making given loans must

necessarily rise superior to any theoretic view of the case,
matter how well reasoned it may be.

wdiich sustains the use of the rate of discount as a means of

regulating the supply of bank credit.

other

The question is then

said I have endeavored

In what I have

while beside this underlying and essential mini¬

other needs will present themselves,

mum

yet.

VIII.—Every Case

wdiich must be satisfied without primary regard to the rate
of interest,

reached it

certain portion of credit requirements

This is merely

an¬

of saying that banking, like other business

way

en¬

raised whether there is in the community at any given time

terprises, calls for the application of infinite tact and sound

enough bank credit to "go around," or whether enough credit

judgment

can

be had for the purpose of

other purpose.
to

have any

moving the crops

for

some

Such questions as those stated are too vague

very

distinct meaning.

They have

meaning

there is

the treatment of

In business as in poetry,

"the

particular

universal rule of conduct which

common

sense

cases,
can

and that

be applied.

it is unquestionably true that it is

of most" which tends to preserve order.

154

BANKERS'

CONVENTION.

Committee / Officers* Reports-National Bank Section
Address
Ladies and

Following

the

various official

members
have

the

President,

Walter W.

During the life of

Head.

far from

Gentlemen of

the National Bank Section:

established

precedent

the

worthy

predecessor,

the

attending the convention.

this

manner

membership will

our

opportunity to
familiarize itself with
the activities of
our
section, and at the same time valuable time will be saved for more inter¬
esting parts of the
Our

section,
been

never

full

the

their

American

condition.

Bankers'

It has

Association,
rounded

now

Subsequent

co-operation

have

results

Council acted wisely
the

transact

,7,7

the

not

permitting

beyond

Mr.

however, through
Matthew,

the

Secretary

Since

the

establishment

sendee rendered

Committee

the

also,

continue

Our
in

General

thail

with

section

Messrs.

doubt.

this

changed

about

the

place. 7

case,

he has always

the

transaction

Treasury
A

Washington

office,

Section
of the

service

and

the

'that

activities,

our

for

the

in¬

the logical

prosperous

Our

business

that

they

into

heartily in helping to
"r:7':'"7
obligation to

personal

Committees

incumbency.

the other
of every

The

the

for

with

•

indications

its

the

that

are

President,

Committee

with

loyal support they have given

gratitude and satisfaction for the substantial

made

sections

well

has

for

still

full support to

our

Bankers'

can

courtesy

every

indebted

greater things.

been

not

number

been

honored

Association,

officers

between

the officers

marked

very

realization of

all

Major Fred W.
later

resignation

Major
service
the

our

officers

the

Association
section

our

have

nor

and

but

purpose

Sections and

Hawes

their

General

association

Mr.

Association.

Hyde,
the

the

and

the

for

officers.

extend

deeply

are

Bowerman

and

which

courtesies

many

have

Secretary

June 30,

untiring
and

him,

Section,

our

and

Section, tendered his

our

1920.

tunities

for

rendered

members.

faithful

Even

Executive

felt

the

that

carry

Thralls and

with

was

person

had

One

the

work

that

Board

whfch

Edgar

that

Executive

Committee

asked

generously

awarded

were

assistant

established

Executive

Mr.

for

Committee

Mountjoy
justified

with

tee

Louis

increased

was

representation

Convention

has

the

twelve—one

enabled

membership of the Executive

for

each

officers

our

the

Committee,

permits of

has brought

accurate

survey

Federal

Reserve

members

and

pride

and

Your

but

banker

American
You

will be

increase
On

the

Section

our

interested

mittee,

there

District.

This

Executive

our

closer to

cause

that

our

are

membership

uor

nearly

still

should not feel

Bank

in the

plenty

its

members

There is

save.

campaign

Section

has

made

substantial

6,511.

Banks

served

our
a

the

our

full

now

Administrative

United

States,

Membership

purpose

In¬

Com¬

until every

member of the American

a" result of that membership,

granted

Federal Reserve
Banks and

Trust

Committee

permission
System.

which

admit

Therefore,

Companies, who

tem, to accept membership
manner

will

with

service

the

are
us,

Bank

member in this

American

membership

extend

Bankers'
any

Association

member

the

-invitation to both State

members of the Federal Reserve Sys¬
to co-operate with us in any other

them.

Act,

Board

permitting

rate not exceeding 1% above Federal

had

raising being to force
make

the

interview

with

Gov.

Harding,

curtailment of loans, whereas,

profit it would, to

action.

Furthermore,

The

matter

not appear to
were

invited

say

the least, greatly

did

not

think

assignment of accounts

be willing to

for

was

discussed and the

was

some

members did

reason

that committee and, although

serve on

all declined; consequently,

progress

pressed further, they appoint
their

credit

committee,

not

companies and

merely to

Washington

office has

been moved

Building, where it has

the

from

Southern

to their

brought in it will be with full knowledge of what arguments
presented on behalf of the credit companies.
Mills

that when

the

make

one

direct first-hand information

secure

made in

desires this

conclusions, but to visit the office of

own

number

was

The Committee would suggest that, if the Section

report based
of the

secret

committee authorized, but

to serve,

this matter.
matter

the

report

might be

Building to

satisfactory quarters and has been

.more

rendering excellent service to members.

principal activity has been the making of
Mallan

the

for

national

destruction

banks.

While this

contract with

mutilated

move

met

Messrs.

and

similar

currency

with

opposition at

some

first, largely through the activities of the firm, which formerly had
deal

business

this

taking the service and
come

have

their

very

contracts
as

great

large number of banks

fully satisfied with it.
old

spoken of the above

yet it is
is

soon

higher prices,

are

Others have promised to

expire.

the outstanding service

of the office and

small matter in comparison with their aggregate services.
impossible to enumerate these without making this report unduly
a

very

long, but I would simply mention the securing of copies of Congressional
bills,

laws

and

Government

the notification
new

literature

requested

bank,

any

the efforts to obtain
members, both for the Section and the Association, the securing of in¬

formation

and

report that

Congress,

rulings from any of the Departments, and we are glad to
believe this Washington office to be not only of great ser¬
and to

the Association,

Harbors

Trade

Conference,

been attended by
officers

monthly

but also to the Departments and

and that it has a'tendency to increase the

International

whenever

Comptroller's calls for statements,

tween the Government and the A. B. A.

6,895.

Section.
The

National

very

able

vice to the Section

year.

was

effectiveness.

of work for

had

its

United States has become

Bankers' Association, and as

this

given

National

8,000

the

Chairman

Your

effect

appointment of

wisely—a desire to

assistance

the

know

observe there is

for

National

and asked the Association to

with' the Federal Reserve

session.

service

Commit¬

strongly; first, on the ground that it would tend
effect of the Federal Reserve Board's action in raising rates,

was

the

Louis

practicable to have any amendment of any sort considered by the Congress

The

of their needs.

membership during the current

will

spend

valuable

primarily

was

August 31, 1919,

asmuch
you

what

bank

of Thrift Week

instructed to confer

charge interest at

the purpose of such
the

at St.

one

April 27 and 29, respectively.

amendment

Bank rate.

to undo the very

Beller

December, prior to the National Thrift Campaign, which was put on
of the current year, our Section addressed its members on the
subject of Thrift, with an idea of not only stimulating interest in the
nation-wide campaign, but to inculcate into the hearts and minds of the
doubt

principle

was

discouraged this

weaken

first year in the work of the

our

Three meetings have been held,

possible

completed
on

Executive Commit¬

your

member from each of the Federal Reserve

one

now

a move.

Chairman

Reserve
who

January

the

member banks to

had

American people a desire to

have

and Pinehurst

such

encourage

represen¬

tation

to twelve,

endorsed

The

with

Committee to keep in very much closer touch with the
prevailing conditions
in the various sections of the
country.
Then again, the enlarger
and

and

action.

our

thousand.

our

St.

deep

twenty-thousand dollar appropria¬

sixteen

expenditures were confined to the amount appropriated,
expiration of the year for which the appropriation was made,
surplus of several hundred dollars.
the

immediately

was

the

increased

was

methods, and hear something of their point of view,

the

Major Hyde's resignation.

tion.

Mountjoy,
well

■

information

necessary' qualifications

been

had

secretary and his efforts have, thus far,

Our

that

Mr.

his responsibility only with

possessing the

Major Hyde.
this

regret accepted
made

the

section

our

successfully

Washington, D. C., Oct. 18, 1920;

the National Bank Section:

enlarged Committee.

valuable

and

though

Secretary

larger service, yet he relinquished

knowledge

secretary,
Mr.

Districts, and

then in

efforts,

its

that

President of

Commerce, in his old home town, Jamestown, N. Y., offered greater oppor¬
the

tee

been

results

pleasure

our

Secretary

the first

was

Thralls

his

Section

tendered

present plans for continued

Respectfully submitted,

Gentlemen

to be effective

position

Report of the Executive Committee.

and

times.

Hyde, who

succeeded

our

At the St. Louis Convention the membership of

the

liberally extended and for the valuable assistance that they have

rendered

who

been

other

the

Sec¬

our

will

and

between the officers of
as

only

the

progress

Therefore, let each

has

the

been

never

President

other

all

lias

Washington, D. C„ Oct. 18, 1920.

regarding
it

turn

during

growth and influence of the greatest organization in the world, the Ameri¬

the

greater.
In

the

various

our

during the term of its existence.
holds

future

pledge

Oct.

co-operation

sections,

Section,

our

the Chairmen of

v;:7:-77 77

■■4.'7 ,7<77:,:

■;

Sections, by being kept closely informed of all of their activities

the various

other

Iofficers of

the

They have

for the legitimate demands

care

Committee and

our

the Comptroller

members

our

kind.

spirit of

are

;<7;
-<..77:7
,...;-7
In relinquishing the office of President of the National Bank Section, I

contract

have

may

-V;

through

Reserve Board,

the Federal

members have already availed themselves of that

present

Section,

and, generally speaking,

year,

exceedingly important part in the Gov¬

with gratitude, the valuable assistance rendered to

members, by

the Executive

re¬

well.

Washington, to witness the destruction

other

any

our

Administrative

discharged his

done,

and have materially assisted the Government

work,

well, is in

secretary as

our

under

members

The

definitely

its

country.

the

bring about orderly deflation of credits.

co-operated with

tion has

ably

and

materially augmented from time to time.
and

which

Currency and the officers of the Federal Reserve banks.

Bowerman

believe

reconstruction

effort

been

Section,

Executive Committee entered

Department.

large number of

discontinuation

under

Being necessarily members of the Federal Re¬

System, they have played

its

condition.

prosperous

Section

Secretary

our

and to legally and personally represent

currency

was

conditions

But I think you will agree with me that the

WALTER W. HEAD, President.

act of its

Beller and Mallan

of mutilated

has

City of Washington.

Our

We acknowledge,

Executive

Secretary

House

membership has been such

determine in the minds of those familiar with

there

brought

members have had

ernment

it, in the Washington office.

Clearing

Section, and

that the

business from

our

courtesy of

the

our

place for the national Bank
the

credit

again

banker

American

represented at the head office of the Association in New York City.
creased

with

signing of the armistice, the result of which

banker had to do business.

'\';7,i

the Washington office and

to open

well.

doubt

practically all of

position

■

Administrative

only

proved

greater proportion

other activities

our

in authorizing

of his time,

have,

and

out five

well

By the unanimous consent of the Administrative Committee,

spends all

hostilities,

has

appreciation to the Executive Council

our

members

placed

office

•

expressing
and

serve

capacity,

greater

■

officers

hearty

Washington

Washington office, but in all

the

far

manner.

desirous of

are

the

The

conditions in this country have been

During its early existence the war made it necessary for
assume
additional burdens.
That he acquitted himself of

sponsibilities with satisfaction to himself and to his customers

parent,

prosperous

members

our

satisfactory

for

establishment

serve

and

its

of satisfactory service to its members.

years

The
to

program.

banker

that service

reports have been published and will be distributed to the

organization

our

normal.

each month

our

the

Mississippi

Pan-American

Secretary.

Section

Cabinet

and

Financial

iGeneral
to

Conference

the
in

cordial relations be¬

Important conferences, such
Valley

Conference,

Conference

and

others,

reports are made twice a

President
New

York.

the

have

month

Association

Material

the

Rivers

and

prepared

for the

space allotted to the Section in the Association Journal.
Upon the election of each State Vice-President of the Section, letters have

been written by the Chairman of
cers

the

ing him to keep
interest
It

to the

was

the Executive

Committee and

other offi¬

appointee,
us

congratulating him, extending our sendees, and ask¬
posted regarding events in his Section and matters of

Section

matter

the

extreme

Association.

regret to us all that our very efficient Sec¬
retary, Major Fred W. Hyde, handed his resignation, to take effect July 1,

NATIONAL

BANK

SECTION.

1920, in order to permit him to return to private business.
His resignation
accepted with the deepest regret, as we all appreciated his splendid

was,

services and his
very

to make the

complied with the law.

was

charming personality, but there is

old saying that

place ever became vacant that could not be filled, and we are more than
pleased with the splendid work done by his successor, Mr. Edgar E. Mountjoy, who is well equipped .for the work and follows it up with the greatest
interest and energy, and has shown himself at all times most
accommodating
no

and

obliging,

Our

that

well

appropriation

increase in

closed the year on
August

31 with

work,

our

and

that

Respectfully,

both

f/;./

PONDRUM,

ALFRED

President, Nat.
JOHN

'f"

Vice-President,

Northwestern

Nat.

Minneapolis,

In the

Bank

Minn.

Vice-President,

GATLING,

Chatham &
F.

Nat.

Bank,

New

York.

Davenport,

Iowa.

Lac

WAYNE,

Bank,

Philadelphia,

Pa.

Bank

PRESTON,

appointed administrator of

said:

Tenn.

Fond

must

Upon

...

NEWCOMER,

Col.

Chairman,
Baltimore, Md.

the

President, Nat. Exchange Bank,

except

Lac under

Trust Departments of National

the

yield

the

estate

There is nothing of material interest on which to

general inclination

very

of the

ciary capacities.
So

far

has

extended,

Companies has developed;

broad

civilization

complicated

the

advanced,

themselves

friction

between

the contrary, they

to be

of op¬

fit

seen

The

disappeared.

business

modern

Bank

of the Phelan

the

life,

The Trust
built.

National

Bank

administrator

succeed

and

the

trustee

The almost flawless record of National Banks, their

prudent management, together with the protection afforded

by regular in¬

The

service.

estates of the

which

living and the dead, and I need not tell

wills

have

been

demanded, and better

accumulation of wills is

wills

are

wills contain trust provisions

many

A National

Bank almost

being written;

valuable asset; they not only create

very

ent revenue, but ensure the continuation of business into
as

that the methods

you

obtain differ widely from those exercised by former generations;

now

better

Trust Department is the management of the

a pres¬

future generations,

of long duration.

automatically

renews

matter,

demanding experience

technical manage¬
ment, is Inheritance Taxes; the Government and State have laid their hands
tect their

District

ern

tional

District

States

Missouri,

the

last,

powers,

has expires,

that

to use

Division

Western

sustained

field

the

United

States

Clearly

changed,

extent

necessary

its

national

trust

the

the Comptroller of the Currency.

with,

mount laws of the United

because in

States;

express

good

other

conflict with

reason

authority.

of the

introduction

national bank,

the words

"trust

is, in my judgment,

in their creation and

powers

the

para¬

is perceived why

bank authorized to do both kinds of business may not use

advantage

company"

trust

companies,

same

any

both names."

questionable,

into

until all

rigid formalities and supervision as are national banks.

desire

management,

are

subjected to the

your| attention to two other decisions bearing upon the
rights of national banks to perform their newly authorized functions, where
on

the
1.

subject
the

;

the

way

There
open

Supreme Court of

now

seems

further question or doubt

and clear.

Connecticut,

1920:

The

a minor of sufficient age to choose a guardian
probate court, her choice being the Manufacturers' National Bank

WTaterbury.

The bank had previously applied for and been granted,
by the Federal Reserve Board, a special permit to act in fiduciary ca¬
pacities,

and had equipped

Trust Department,

and

otherwise

can

doubt

success.
can

to the wisdom

it cannot be rapidly

officer,

trust

There is

problem,

complex civilization brings forth, that it may
The duties are, in a large measure, of a legal

our

and

his

assistants,

necessarily

must

in the smaller cities will be

successfully avail themselves of the benefits of the

problem,

and

which

one

only

will

experience

law is

new

solve.

Some

has chiefly come to those institutions which are located in

success

Trust

the

sponsibility

Department

depends

It is possible to make it

part.

revenue

But

bank.

without

careful

let

with the right to

yet,

largely

one

national

consideration,

permit from the Federal Reserve Board

bank

for

best

very

this

assume

requires

the bank of

upon

of the

almost

flawless

tinct

record

for

re¬

than

the desired result;

to accomplish

their charters almost automatically,

renew

sources
new

and the

paramount protection afforded by the double liability of stockholders,
an

honesty and safety, there is

every

and
to

reason

entry of national banks into the new field will be of dis¬

advantage, both to the banks and to the public at large.

The

national

potent

with

corporate

serving the

remuneration

well

fiduciary,

directing wealth

society;

adequate

sciousness

bank,

factor

vancement

may

and should become

scientific

public and

society

way

for

is not

the

inconsistent

dollars and cents, and, after all, the

rendered

service

our

fellow-men

ad¬

should

con¬
our

pleasurable and satisfying ambition.

Report

fully

Committee

Banks
Committee

Your

signment with
which
be

there

for

nor

State

State Taxation of

Taxation

name

of its

widespread

it would

National

Chairman.

National

Banks

interest shown than

its

accepted

To find a

importance.

in taxation would

of citizens displaying no concern

group

impossible.

This

concern

as¬

subject in
what¬

is not to escape payment,

necessarily to effect reductions, but to urge that the rates be ap¬

even

plied in

by J. Elwood^Cox,

full realization

difficult, and to

ever

just and equitable manner.

With National Banks this later in¬

terest is accentuated

by knowledge that equality is not a constant attribute

Only

State

taxation.

Government
but

that

preme

State

are

placed

permission

the Federal

States in its long line of decisions on the nu¬

presented, each

cases

left

express

it by several commonwealths and also by the Su¬

upon

Court of the United

merous

the

through

agencies allowed to levy taxes upon national banks,

permission having been given, with limitations, the various con¬

structions

the

tices may

matter

one

in the light of a different State statute,

condition

nebulosity under which gross

injus¬

be cited.

Section
accorded

citizens

Katherine Hamilton,
to

in its

prime factors

are

de¬

of the

companies in towns and smaller cities have flourished, but the great

5219

the National Bank Act

to States the

rate than

April,

reputation

metropolitan centres.

has

call

State laws seem to conflict.

the

wealth acquired

ap¬

na¬

banking institution with the incidental

enumerated, must be void,

name

ensure

name

officers

its

the

yet

National Bank, under favorable conditions,

not national banks in towns and

over

act on the part of the State which impairs, hampers, em¬
restricts, or in effect wholly prevents the discharge of its

barrasses,

The

interfered

use

The

administrator

bank, it is not entirely

surplus,

and

Trust Department are multifarious.

and

untried

any

functions

the

field

any

Lac

na¬

necessarily implied, jurisdiction,

fullest

bank must be approved by

the right of

enters

West¬

the words "trust company"

complete and effective exercise of its sovereignty.
tional

the

The Court in part said:

Government

which Congress

propriates

for

March

part of its corporate title.
"When

Court

Fond

equipped, by training, to handle every problem which arises.

most

bank, having trust

can

pro¬

rights.

United

The

have provided for strict and formal supervision to

and

estates,

upon

and

National

petitioner,

proportion.

otherwise, which

most

important

very

of
a

be called upon to solve.

not

fore, not subject to the usual disadvantages under which the ordinary cor¬

poration labors.

the

case

Department needs most jealous care, and

believe that the

its charter, and is, there¬

this

matter of right, to have the

valuable adjunct; there

which it is

principal business of

it by the

Under these circum¬

conferred

populous centres, the volume of such business is great, and the

are

enabled to

the

conferred

Na¬

Act, and the operation of National Banks under its provisions

The duties of

legal

spection and double liability, renders them easily the most acceptable in¬
struments for this

The day for specialization has come and
individual

Commercial

will, in my judgment, play an important part in their future history.

Whether

old-time

capital

personnel

very

corporate

select

the

and

character,

have grown

men

the

pow¬

and

Stanchfield, deceased."

bank's

Department of

National

seem

The field

advantage.

the affairs of

necessity.

fiduciary.

has about

and

ramifications

has

Government

individual

bank,

advised by the Federal

and there is ample room for both.

one,

has

fiduciary has become
our

trustees

the prayer of his petition for the appointment

the

rewards

working in perfect harmony, and for mutual
eration

report, except

permits have been granted to 1,256 Banks to act in fidu¬

observation

Supreme

the law-making

act

power

Unlike other departments of

upon

be made

Banks and Trust

the estate of

To put a Trust Department upon a paying basis requires time, for it is
a plant of slow
growth, but once established it is self-sustaining, carries its
•own baggage, and in addition is an aid and of distinct advantage to other

the part of National Banks to avail

privileges granted by the Phelan Act.

Reserve Board that

base

rights

record

entitled

was

National

to the

facts

pass upon

Commercial

The Trust

Lonsdale.

spe¬

State

It is clear that the

rivals of

the

pendent

by John

far

in Wisconsin

departments.

Banks

"National banks within the legitimate
Congress cannot 'be interfered with by

judicial action

corporations

State

County Court
Chattanooga,

Vice-President, United States Nat. Bank, Denver,

Report of Committee

expressions of

due course, the matter reached the

capacities, make them

the

Banks.

RINGOLD,

WALDO

implied

Federal Reserve Board and the Acts of Congress.
stances

Hamilton Nat. Bank,
JAMES

George II. Stanchfield,
R.

them by

fiduciary

tional

SNEATH,

TIIOS.

differ¬

form

therefore, to comb the general and
positive

of the Government may permit.'

conferred

other

JR.,

President, Commercial Nat. Bank, Tiffin, Ohio.

President,

for

Court

conferred

legislation

power

Vice-President, First Nat. Bank, San Francisco, Cal.

Girard Nat.

the

Court denied the application of the Commercial National

Stanchfield.

Supreme

State

ers

President,

powers

Bank,

KENNEDY,

JOSEPH

State

the Manufacturers' National Bank, and the Superior Court

Fond

The

DAWSON,

GEO.

essential

takes

con¬

State
char¬

Court.

Phenix

President, First Nat.

make

can

discrimination

powers

given to
in their

Supreme Court of Wisconsin, June, 1920:

one

any

those

functions

advised."

The County

Bank,

the

her choice,

THEODORE WELD,

State

It is unnecessary,

statutes of

LONSDALE,

President, Nat. Bank of Commerce, St. Louis, Mo.

similar

expressly denied.
this

with

coextensive

same

upon the subject.
Upon the agreed statement of facts,
therefore, the applicant, Katherine Hamilton, was entitled as a mat¬
ter of right under our decisions to the
appointment of the guardian of

AIKEN,

Shawmut Bank, Boston, Mass.

borders the enjoyment of

the

policy

Vice-President, South Texas Commercial Nat. Bank, Houston, Tex.
,

whether

cases.

cial

nominee

minor's

the position, but refused

implied from the mere abof permissive legislation; the test to be applied is the same in

sence

the

that

the ground that it had no authority

are

statutory prohibition

express

surplus of $800.

found

"The right of the State to withhold from

its

exercising

activities

then

ence

actually

said:

within

Congress which

corporations
tered

Court

competent, for

national bank.

bank

The

fit and

appointment, solely

national

ferred

for the year was $20,000, and it is not without pride
we asked for no additioc to this appropriation,

enormous

appoint

report the fact that

notwithstanding the

in all respects,

The Supreme Court

efficient.

155

is assessed

such

restriction

upon

State,"

places

upon

the taxing privilege

that "Taxation shall

not be at

greater

other monied capital in the hands of individual

and

the interpretations

given this phrase vary so

greatly that laws passed in pursuance of it lack almost all semblance of

uniformity.

It is this

Massachusetts
lates

both

the point

the

very

time by resort to the courts a national bank in

ist resisting the imposition of a tax on the ground that it vio¬
We have reached
of Federal legislation

spirit and the letter of the Federal law.

where there is positive need for some sort

BANKERS'

J 50

CONVENTION.

set the
State
Taxation of National Banks, but its work is clearly defined in the several
States where continued effort directed primarily, not by a group of non¬
residents, but ostensibly by the citizens thereof, will bring a measure of
obvfate

will

that

possibility

the

^onstruclioa and definitely

This is without the province of your Committee on

limit of taxation.

the

but

obligation

the oueside who are

dishonest means.

is equally binding to protect the bank from those on
disposed to obtain the funds of national banks through
Respectfully submitted,

DAWSON.

while

number enacted laws affecting national
that in Virginia, by provisions of a re¬
total tax that can be assessed against banks is $1.25
smaller

even

Resolutions

Adopted.

It is gratifying to report

banks.

the

cent enactment,

$1.50 which
prevailed theretofore.
In Rhode Island an amendment limits the deduc¬
tions that may be made for ownership of evidences of indebtedness of the
the $100,000 of the full book value of stock instead of

United
1920.

such

States to

were

purchased at

par

subsequently to April 1,

provides that cashiers of banks shall furnish to the asses¬
stockholders not resident within the State and the stock

also

all

sors

lists

held

by each.

A very similar new statute in Mississippi adds to

this last

be liable to pay
the agent of its stockholders, and these may be paid

provision just cited the clause that a national bank shall
taxes assessed as
the bank's individual profit account, or out of

out

SNEATII.

these, touched

deposits,

any

1).

just closed only eleven States had regular legislative sessions.
in various ways upon taxation of bank stocks and

In the year

upon

relief.

Five

PRESTON,

its general expense

of eacli shareholder in proportion of his
ownership.
In one other State taxation is affected by a change in the
amount of exemption allowed.
This is South Carolina which, by recent en¬
actment, limits the^deductions allowable by reason of the ownership of
Liberty Bonds, and farm loan bonds of the Federal Loan Bank of Columbia
to 25% of the capital stock and surplus of any banking corporation.
While your Committee has watched legislation in the various States, and
takes -just pride in its accomplishments, its field of activity was limited
by reason of this having been an off year, legislatively speaking.
Next
year the opportunities for constructive work will practically be without
bounds, and in anticipation of this your Committee finds it cannot resist
the feeling that through a somewhat different organization it can be made
to better serve the interests of the national banks.
Some time ago it

account,

out

of the account

resolutions were adopted at the
National Bank Section:

The following
the

Policy fof Federal Reserve

meeting of

Board Approved.

war-time and of the period of industrial ac¬

Whereas, The demands of the

tivity which has followed the war has caused an unprecedented expansion
of credit, and all experience has taught that such a situation involves peril
business interests, and

for all industrial and

requires a high order of leader¬

policies, and
Whereas, The Federal Reserve Board, without attempting to dictate the
action of member banks or substitute its judgment for theirs in the dis¬
tribution of credit locally, has steadily counselled conservative policies and
used its influence in favor of the conservation of credit for productive and

ship in shaping banking

essential

purpose,

and

Board has been criticised as enforcing a
restriction and contraction, with harmful results to the
the loans of Reserve banks and member
at the highest point in the history of the Federal Reserve

Whereas, The Federal Reserve

policy

of credit

industries of
banks

the country, although

now

are

.System; now therefore, be
Resolved, That in the
Bankers'

American

it
opinion of the National Bank Section
the policy of the Federal Reserve

Association,

of the
Board

the Section's Vice-Presidents in the several States a more effective

been governed by a
wise purpose to check the course of inflation while affording necessary
credit to all legitimate and necessary business.
We do not believe that the
fall of prices which has occurred in certain products, and particularly farm
products, has been caused by credit restrictions, but rather that it is due

campaign could be conducted, and the potency of such an organization is no
less apparent to your Committee now than it was at that time.
Out of its
observation of the need for a more minute supervision of the work and a

expansion had gone further.
We regard it as fortunate that the resources
of the Federal Reserve System are available to give stability and confidence

made

the suggestion

among

responsibility

restrictions with which a Committee of three is neces¬

the

knowledge of

that through a proper apportionment of

sarily circumscribed has grown the conviction that a change in procedure
would be productive of great good, and it indulges the sincere hope that
something looking to this end will be decided upon.

and Federal

world

to the

Reserve

Banks during the past year has

conditions, and

that the results would be more

serious if credit

situation; and be it further

Resolved,

That the banking resources of

the country are ample to pro¬

vide fof- the orderly movement of the crops and,
world markets, we deem it desirable that special

in the present state of
effort be made to pro¬

the liquidation of these products in an orderly man¬
ner.
We recognize farming as a basic industry, upon which prosperity the
entire country is vitally interested, and are confident that we speak for the
entire body of bankers in giving assurance that credit will be found to han¬
dle the crops in a manner that will properly protect the interests of the
producers; and be it further
Resolved, That we believe the industries and business affairs of the coun¬
try are generally in sound condition and able to accomplish the readjust¬
ments which are necessary in passing from the conditions of war-time to the
mote, assist and enable

Report of Committee

Federal Legislation by Waldo

Newcomer,
Committee

The
lias

had

for

Chairman.

Legislation

activities, for this reason:

the

National

Bank

Section

We understood we were appointed

purpose—that is, the Federal Legislative Committee of the
This Committee was to take up any matter whfere

special

American

Federal

Bankers;

the interests of

the national

bankers might be jeopardized,

and the Fed¬

Legislative Committee of the whole body might not feel it represented
not the same in any section.
No legisla¬
tion has come up that I know of where it was necessary for this section
to have any special action as a section, so we simply report, Mr. President,
that we have tried to keep our hands on the pulse of events.
I am glad

eral

the views of all when they were

that I wish your success and the success of the American Bankers'

say

Association.

■

Report of Committee on State
R.
Since

Legislation^by Thomas

are

good, and the country will enter

upon a

great period of substantial

prosperity.

Assignments of Accounts Approved.
Bank Section of the American Bankers'
Association, being largely composed of commercial bankers, approves the
policy of the National Association of Credit Men in their efforts to dis¬
courage the practice of the Secret Assignment of Accounts Receivable by
Efforts to Discourage Secret

merchants

meeting few Legislatures have been

That the National

others seeking open banking credits.

in session.

Jersey embodying the provision recommended by the Asso¬
relative to examination of banks or trust companies members of

ciation

New

the Federal

Reserve

number

System.

States

recent

years

have passed laws protecting banks

against fraud and misrepresentation by those on the outside, but apparently
our Government has taken but little interest in protecting the national banks
this

trouble.

laws are now
on the statute
books protecting the public from dishonest acts of officials,
directors and employees, but practically nothing protecting the banks from
dishonest people on the outside who frequently secure funds by fraud and
ether forms of misrepresentation.
All will concede that it is entirely proper
from

made

which

New

Officers

Elected.

Warehouse

law

industry, economy and a

the war,

recommended measure that has passed in any State is the Uni¬
Receipt Act, passed by the Legislature of Mississippi, and

The only
form
a

last

our

With

Resolution,

Preston.

peace without disastrous or protracted depression.
spirit of co-operation, the capital wastes of
mainly responsible for present credit conditions, will be

permanent conditions of

source

to have very

Very stringent and

adequate

stringent laws protecting the public from those inside a bank,

elected officers and members of the
Executive Committee of the National Bank Section:
The following were

President—Henry

McKee,

President, National

Capital Bank, Wash¬

ington, D. C.; Vice-President, John G. Lonsdale, President, National
of Commerce in St. Louis, St. Louis, Mo.; Chairman of the Executive

Bank
Com¬

Waldo Newcomer, President, National Exchange Bank, Baltimore,
Md.
Members of the Executive Committee—T. P. Beal, Jr., Vice-President,
Second National Bank, Boston, Mass.; Edgari L. Mattson, Vice-President,

mittee,

Midland

National

Bank,

Minneapolis,

Minn.;

Nathan

American

Vice-Presi¬
S. E. Trimble,

Adams,

Exchange National Bank, Dallas, Texas;
Vice-President, Union National Bank, Springfield, Mo.

dent,

CLEARING
•VVJ\V-.v

•

HOUSE

American Bankers' Association

'j';;.

•'

...

•

;

'•

Fourteenth Annual Meeting, Held in

INDEX TO

Clearing House Bureaus
Activities of
Fourteen

Detroit

Years

SECTION

of Credit, J.

•

."v

••

•'.'•••

•/

•

Washington, D. C., Oct.

___._Page 157

Langdonj

/•

..."

,•

...

•

18 and Oct. 21, 1920.

The Value of

Clearing House Examinations, W. M.
Hardt-.Page 160
His Community, F.N.
Shepherd.Page 163
Clearing Trade Acceptances, A. C. White
Page 164
Newly Elected Officers
Page 164
The Banker's

..Page 159

Clearing House Bank Examinations

Chicago, Charles H. Meyer

••

CLEARING HOUSE PROCEEDINGS

R. Kraus

Clearing House, J. H.

•

Opportunity in

.........

;

Page 161

.....

Clearing House Bureaus of Credit

from the

Viewpoint of the Banker.

By J. R. Kraus, Vice-President, The First National
Bank of Cleveland.
The subject of

Clearing House Bureaus of Credit has

been

rows

several times discussed before
you in an academic way.
I
have been invited—or I
might better say drafted—to deal
with the subject in a

and

the

Cleveland

has

been

operation

several

the pioneers in the
work, and are,

were

communities, the bankers

enced

lack

protection along

they had undoubtedly conceived
of

correction, they

through their
cided

were

own

to be

certain

As in

long

upon the

was

position to

secure

and to secure it

systematic

they de¬

inventory

knowledge,

Bureau,

complete

statements

ers, all of which

the Bureau.

report,

and

were

Each

bank

operating statements
turn
was

then

which the Examiner

advised

was

established in the

weekly of all

loans made and all securities
purchased,

Bureau

whereby there

practical, perpetual,

ning inventory of borrowers, with the

were

automatically developed to the Examiner the
were

borrowing in

list of all securities that

addition to this, the

sumably

the

name

were

sources

rowings and investments, and where they
borrowers who

borrow-'

supplied with forms of

new

incorporated in the files of

run¬

their bor¬

held, which

names

than one

held by more than

all

bank, and
one

bank.

files of the Bureau contained
pre¬
every borrower in the

community,

plicated

The
ers

borrowers,

week

banker

who

are

their

names

were

reported

him

by the various banks.

the

that

system may be

reporting loans

importnt

This is

the

operations of

effort to keep the banker

borrower confines

the

Bureau

concentrates

fully advised.

his operations-to

one

So long as

bank,

bor¬

bank

that

When, however,

banks, informa¬

borrowings is made

properly checked and
be corrected, and

may

keeping this class

advantage

6orrowers

con¬

the Examiner at the

which
loans
ers

information
as

shown

rendered

many

fiscal

then

each

them

of any

falsification,

certain

on—say June 30

closing for

of these dates.

bank

list of its borrowers and

used

most

verification

De¬

borrowers,

the financial statements of
the

important corrections,

intentional

accorded

particularly valuable

the

borrow¬

This has not
only effected

but

has

repeatedly disclosed

which, it is needless

has

say,

been of

large benefit to the banks interested.
of duplicated
borrowings developed have

Many

proven

and

top-heavy,

cases

dangerous

or have made the interested bankers
appre¬

hensive of possible danger.

In these

instances, conditions

are

freely discussed with the Examiner,
who, acting as an
intermediary, is able to bring the interested bankers to¬
gether, which action and the attendant
protection

not

otherwise

possible,

the

Examiner's

duplication do not, of course, disclose the
or

would

advices

name of

the bank

banks interested.
Like poker chips,

many borrowers have

circumstances, either good

their accounts from

borrowers

the

chiefly interested in those of his borrow¬
borrowing elsewhere, and it is on this class

The

banker.

that

cember 31—the dates of

which record disclosed to the
Examiner any additional du¬

from

the

request the Examiner to report
date.

Bureau.

financial

two

nature of his

by its being privileged to submit

was made of all loans in the banks

Following this, there was acquired an in¬
ventory of all investment and collateral
securities, together
with such information as was
available regarding them, also

Examiner,
bank.

security.

enjoying Clear¬
ing House privileges, and this inventory
lodged in the files
of the

the

any

second

of omission in

Another

the work of the

time of the examination of
any bank brings the lines of all
borrowers in that bank down to the
date of his
examination,
and information relative to
total
borrowings is then made
available to the bank under
examination, and to all other
banks interested in a common
borrower, providing, as I have
said, the loans are not based upon collateral

quickly.

the inception of

appears

stantly before the interested
banker,

system that has proven

first-hand credit

name

also for the purpose of

Clearing House Bank Examiner, that they
a

order

errors

"go between,"

substantial protection by
placing each of them in

his

to the extent and

less definite plans

not until

until

accrues

experi¬

lines, and while

employment of

files

available to those banks who are
loaning him without col¬
lateral security, and this is
where the value of the
system

unable to put these into execution

able to initiate and establish

were

Cleveland

initiative, and it

unanimously

•in the person of a

tion

years.

security, all information regarding
confidential

he extends his operations to

I believe, the only

Association operating a Bureau at the
present time.
most

not

now

the

brought out for analysis and surveillance.

Bureau—its methods, scope, and
finally
obtained.
The Bureau of our Association in

results

operating, and it is

order that I

may make myself
entirely clear, it is necessary first to outline briefly the
op¬

erations of such

collateral

retained

information is made available to
Examiner's records show where he is

practical way from the viewpoint of

its value to the banker.

only

him is

one

home.

bank to another.

With

borrower transfers his business to another

us,

loans in

who,

bank No.

in
1

regular

course,

determines

have been closed out.

when

bank, the in¬

ception of his loans in the second bank is
reported

Examiner,

Force

bad, keeps them moving

that

the
the

Immediately

notice and inquiry are sent by him to bank
No. 1 to deter-

BANKERS' (

158
mine the reason for the

If reported or

unsatisfactory, the Examiner, in -his

proven

discretion, gives

information.

By this means

No. 2 the benefit of the

bank

unprofitable accounts have been
avoided or disciplined.
You may say the logical way for
the banker would be to make inquiry of the Examiner before
unsatisfactory or

many

However, under our rules, this is not

taking on a new line.

information regard¬
ing any line unless the name appears 011 the inquiring bank's
books, or the Examiner has competent evidence that a

possible, as the Examiner discloses no

will

note

Credit

established in the

similar to the ethics

very

maintained

Bureaus

Interchange

This you

filed.

fide application for a loan lias been

bona

readily agree that the inventorying of loans

of investment and

simple task compared to the valuation

As most of you know from

collateral securities.

unlisted

the

unique method in order to inter¬

Examiner adopted a

est

experience,

Regarding these,

most difficult.

stocks are

bankers as possible and to acquire a mass

many

draw his conclusions.

which to

information from

He sub¬

with the.

complete list of the collaterals held by it, together
of

borrowers

On some particular se¬

might be available.

curities the lack of information

majority of eases

noticeable, but in the

was

working basis was established, and this

dependable, coming as it did over the signature

was

varied

of re¬

O11 securities that were held in several

sponsible Directors.
banks,

such securities—that information

earnings and dividends, and such additional

be given as to

information

that

requesting

security,

each

valuation be placed upon

examination a

Directors of each bank under

mitted to the

names

Is a

contiicting information

and

was

frequently

and

collaterals—information
of

cilement

were

and the data necessary to pass

used by the different banks,
on

statements

forms of financial

sundry

profit and loss, and recon¬

surplus, particularly

the latter,

woefully

was

The laxity brought about by competition found

incomplete.
many

loans not backed by any financial statements oh file.

Here

again the value of

organization

forms

each

bank

clusion of all

commercial
this

form,

financial

with the result that

invited,

them, and their co-operation

and

statements

statement from each

borrower at least ,once a year,

audited statement,

and also secure

unlisted securities.

011

Our banks have been using these statements

for something

five years, and it rarely happens that a customer

over

objection

adopted,

were

pledged to use these forms to the ex¬

was

others, and to require

which

represented—the matter was laid before

all the banks were

standardized

the bankers

among

The Examiner called a meeting at

apparent.

was

to this requirement.

offers

Too much stress cannot

be laid upon the benefits accruing through the adoption and
use

can

of standardized statements, and I do not know how this
be

accomplished in

any

community other than through

Examiner who has the full confidence of all of the bank¬

ers

The matter was taken in hand
the bankers of Cleveland.
tance of the press in the

community
ment

the

was

various languages throughout our

elicited, with the result that the

broadcasted to all borrowers in all

was

problem

readily

solved

selves without very much

Many

borrowers,

you

movement

smaller

improved

business

methods and
much

the part

vastly

through

effort

our

methods

men

know,

incompetent records, and I

enthusiastically by all of

Through their efforts, the assis¬

practically
through

banks

bank

every

records,

very

the

conditions

among

them

and

teaching

110

Cleveland banks has resulted

themselves,

this period of

them¬

free to say to you that this

attending economies.

the

borrowers

the part of the bankers.

keep

and | proper

new

Incidentally, it has done

in the way of initiating and

ments

the

new move¬

tongues, and

expanding audit depart¬

assist

its

was

incumbent

smaller

credit reconstruction

011

customers

and

rehabili¬

Examiner there was organized

the Associated Banks

mittee of

acted

Examiner

policy

heads

Bond

the

whereby

banks,

there

with any of the

not associated

public utilities, mu¬

specialized in the various lines of rails,

is available

nicipals, local issues, etc.; consequently, there
to the Examiner at all times expert

knowledge 011 all classes

available to him,

securities, and there is further made

through these experts or through their

either

connections in

definite knowledge relative to

the various financial centres,

result

practically every important issue of securities, as a
of all

which

smallest,

bank in the community, even to the

every

given

benefit of

the

meant

basis of market

the

quotations is largely done

During the years of the war this old method

with.

away

practically

valuation whatever, or at best, a very

unreliable one, and this we have supplanted by a
based

bond

best organized

the

The old theory of valuing se¬

departments in the country.
curities

who

authorities

represented

was

banks, and

of the larger

Departments

bond experts

of local

also

Secondarily,
of the

composed

sub-committee,

and was

advisory capacity

valuation.

method of

and

appointed

was

composed pri¬

was

larger banks,

committee of policy, acting in an

the

This

chairman.

•

of Cleveland, of which the

executives of the

the

Appraisal Com-

the Valuation and

committee known as

|valuation

intrinsic value and earning power.

In order

fully appreciate the scope and merit of the

work of this

committee,

their sessions.

you

was an

woul^d

have to sit in at one of

education to

many

who had their

preconceived ideas of investment values as a whole and of
supposed intimate knowledge of them, and you will

their

to stretch your

have

not

their astonishment

rails

imagination very far to visualize

chagrin in finding some of their choice

municipals or public utilities dislodged from Class

"A," or Class "A-l," to be thrown into the discard with like
securities in Classes "D," "E" and

that it

men,

I will say, gentle¬

"F."

education

community

has without

and

question resulted in many of our banks relieving themselves
of

questionable assets

tl^at could not, and did not, pass the

censorship of this department

our

Bureau

of Credits.

Further, this department is made available to each bank at

time—with the result that each is in

any

the Committee's appraisal and

valuation

position to secure

prospective pur¬

chases—before they have been acquired into the bank's assets.
Just
sues
on

word

local bond issues and collateral trust is¬

of local companies.

These are probably the two lines

which it is found most difficult to arrive at any

estimates of

value other tluln is derived from

pany,

definite
opinions

Local

usually trusteed by some local Trust Com¬

are

and definite estimates

arrived

the

local authorities.

expressed by the banks or other

only

values

by having access to

Through the fact that he is given

frequently

the trustees'

access to

can

records.

all records, the

Clearing House Examiner is probably the only person in

position to examine and analyze these values, and it is

our

practice in Cleveland to have practically every local issue
so

investigated

upon

as to secure

definite estimates of value based

appraisals, earnings and

operations.

In the

case

collateral trust issues of local companies, the Clearing House

Examiner is probably the only one in a
at

that

defftiite estimate, and this by
on

he is in

position to arrive

reason

only of the fact

finding the securities among the assets of
a

position to demand and

secure

records and the affairs of the company

practically

every

mitted to the

free

itself.

local issue handled by

our

any

access

bank,
to the

result,

banks is sub¬

te$t of the Examiner's valuation and the in¬

terested banks furnished

information.

tation.

the

Through the office of the

bond issues

intermediary.

function

mate

value and practica¬

and has continued to the

mention it in passing, as it is legiti¬
Clearing House Bureau of Credits.

present day, I shall

found, which naturally put the Examiner on closer inquiry.
Various

banks of Cleveland made

community proposition, and as its

bility has outlived the war-time

ledger

hand.

local

this

there

You wil'l

Again, through the

problem was certainly a serious one.
intermediary of the Examiner, the

largely

first order

information unless the name is 011 his ledger or a
is in

securities, and in the

marily

wherein an inquirer is not entitled to

credit men,

valuation on investment
absence of any definite markets the

of placing a reasonable

the problem

mercantile

all confronted with

During the period of the war we were

transfer of the account, and whether

has been satisfactory.

the account

not

promptly with definite and reliable

CLEARING
The
of

foregoing

the

Bureau

strongly
in

briefly the

covers

Credits,

but

HOUSE

scope and the operations

does

not

emphasize

that day and
ceived

I should desire the actual value of the system

lyzing it, I would
sented

tion

any

community

Nothing

one.

coipmunity, particularly

embarrassment of

manner as to

serious

can

credit to

community

firm

secured

basis, and this condition

and

House

insured

Examiner

through

the

some

operation of

While

spell

rather

but

co-operation.

the detailed

operation

since

installation of

slow process, taking in our case

maintained at
in

The

operation

minimum of expense.

passed

Cleveland

for

of the other

none

simple and is

The system has been

about

ten

years—has

long

stage, and my

beyond the experimental

wonder is that

system is

only

18 cities

which

maintain

Clearing House Departments of Examination have installed
this important feature.
Has Cleveland had results?

Through

tele

which

one

and whether

depositors

seriousness of conditions,

danger.

The Examiner

sizable

very

laid

informally

the

assurance

sufficient cash

was

made

who employ

concerns

banks

made

was

response to these

large down

our

inquiries,

state-

occasion for alarm—that the bank

and

dissatisfied

was

by the Examiner,

one

would pay every

and if any

one,

alarmed to advise him to
simply

identification, his balance

would

paid at

once—

result, the

and

indictment of certain officers of the
Commercial Dis-

run was

stopped almost before it had begun,
and the amount withdrawn was
accordingly negligible,
In the fall of 1917 our local papers chronicled the
arrest

count

Company of Cleveland.

Later,

ing of the creditors of the company

Nov. 2,1917,
held in

was

meet-

Cleveland,

at which it developed that the
company had several hundreds of thousands of dollars of collateral
trust notes out-

standing—that the list of creditors contained the
banks in Ohio and Pennsylvania, but,

many

remarked, it

was

strange that

very

its size should have all these

trouble

broke

not

months

prior,

finding the

Suffice for

the

bank
to

paper

company

concern

outstanding, and when

single Cleveland

its creditors.

among

Cleveland

notes

names

as one creditor

that

some

six

locally,

held

was

made

was

numbered

was

say

the

Clearing

House Examiner and the information
lodged in the files of

the Bureau of Credits, with the result that the
paper
tabooed in the banks of Cleveland.

In the last analysis, the prosperity of all

the stability of

commerce

soundness of credit.

and effort

and

There is

commercial

was

rests upon

men

stability

the

question that all this

care

the part of the Cleveland bankers adds to
the

stability of their banking institutions and justifies the
pub-

before certain

lie's confidence in the bank under the Examiner's
jurisdietion.
It is self-imposed and has
proven a form of credit

the

solvency of

available

hours to pay off
any possible withdrawals.

re-

was

Clearing House Association, with the result

the Examiner's

upon

bank,

developed

The condition

(I emphasize "informally")

members of the
that

had

run

and that serious trouble was
imminent.

was

perfectly solvent

proper

being received by vari-

were

the

were in

called, and he found that

was

almost entirely of foreigners,

inquiries

the other banks

"run"

large outlying banks, the clien-

our

made

was

very short time

ous

the

forth, in

that there

examination

peculiar chain of circumstances

precipitated

I will cite two instances that

known to the public.

are

were

as a

the

thirty months,

some

installed

once

the

inquiries

larger banks from the heads

present his bank book to any bank in the
city, where, upon

fearless and trustworthy

the other hand, even be born—let

was

Clearing

canvass

depositor

are

alone live—without the unity of action and the
association
that

ment

believe, only be

intermediary.

plan cannot be successful without

Examiner, it cannot,

can,

the

to the

town banks set

financial institution, and on the other

than the knowledge that all of its financial institutions
a

occur

two following,

with the result that
practically every

large city, than the failure

hand, nothing probably reflects

second

make the entire proposi-

day

seriousness of conditions, and bringing out the fact that their various
operatives were beconiing restless and threatening to withdraw their
savings.
A

by co-operation—the bringing together of the various

banking units in such

159

manufacturing and industrial

foreign labor

Ana-

that the first unit of value is repre-

say

the

by several

various

detecting weaknesses and rectifying unsatisfactory con-

ditions before anything of a serious nature
develops.

SECTION.

within

two

Further, during

insurance that prevents losses and discourages
laxity, and
should, I believe, recommend itself to every
progressive

thinking community of bankers.

Activities of Detroit Clearing House.
By J. H.
Mr.

Chairman,

and

Gentlemen

Langdo.v,

Manager, Detroit Clearing House Association.

the

Clearing House Section:
I have
prepared this talk concerning the activities of the Detroit
Clearing House
Association, but I have not done this with any idea of
presenting ideas that
are new or are unusual to
you, but in this way, I believe, that it is possible, perhaps, for each of us to tell wherein we differ from the
others, and
it is my hope, that by a
diligent sifting of the chaff presented, you will
be rewarded by the finding of a few
grains of wheat.
The

Detroit

which,

Clearing

perhaps,

House

differ

from

Association

the

ordinary

conducts

routine

two

clearings

The first of
is what

the

agency

these is

term

trade

notes,
than

our

held

note

acceptances,

bank

nine o'clock

clearings.
etc.,

holding the

same

of the Clearing House.

made

are

presented

are

Each

House

collection items, such

payable
for

bank sends

payment
the

bank

other

through the

Clearing House

with all such items sorted and listed against the various
paying
items are presented and each
boy carries away with him all
items held by other banks and made
payable at his own bank.
They are
presented for payment in this manner and the messengers meet
again at
2:30 daily and make their returns on these items.
At such time the
boys
bring settlement by means of Cashier's check for such items as have been
messenger

banks.

paid,

These

and

return

such

items

have

been

not

paid.

divide

the

ad-

vantages obtained from this method of handling items into three divisions.
1. Is the doing away with a
great deal of messenger work.
2.

handling of these

taken to the proper

for

thus

payment,
when

arise

these

items

properly handled by
of

customers

Direct

this

time

all

are

also
N.-G.

presented

the
for

each

sent

Returned
checks

the counter

and mislaid

im-

bank.

made

readily
a

over

of the fact of their being presented in the rush

counter

settlement

conduct

are

reason

the

handling them
We

items in this clearings, they are
immediately
department of the bank against which they are drawn
in large measure, complaints which
might

avoiding,

are

with
Item

item

each

and

instructions for

item.

and

settled

for.

Settlement

At
is

made
to

the

directly to the Clearing House Manager.
These checks are brought
the Clearing House and listed in the same manner
as
are
checks at
regular

City

Clearings, and the debit and credit balances are computed in the regular manner.
The manager issuing to all
banks, obtaining
a credit balance,
his check in like amount.
This check Is payable
through j
the
regular City Clearings the following morning, at which time he

secured

debit

balance at the "Returned Item

This is indeed

such debit

balance, thus the transaction
The method of

these items

is simplicity itself, and I believe can be
used
Clearing House to its advantage.
Checks which can be

handling

by almost

any

made good by the
presenting them are not returned through the Returned
Item
Clearings.
In other words, where only a bank
stamp is required, or some
similar formality can be complied with by the
presenting bank, opportunity
is given as a matter of courtesy to such bank to
supply the necessary formalities.

bank

I will touch briefly

clearings.
and

credit

upon

balances

method of settling balances at the

our

Our sheet is made

credit

in the usual

computed.

balances is then

regular

and the various

manner

transcript of

the

resulting

debit

and

made,

each bank charged with the debit balance
day, to the Clearing i House, its certified check
against the Detroit Branch-Federal Reserve Bank of
Chicago, for the amount
of such debit balance.
These checks,
together with the transcript above
referred to, are then handed to the Detroit Branch-Federal

brings, before

noon

of each

Reserve

of Chicago, where the

the

member

Bank

amount of such debit

banks

receiving

credit

balance is placed to the credit
balances in accordance with the

-transcript

of such debit and credit balances.
This provides a
simple
method for the settlement, and secures to our
members the amount of their
credit balances in the
place where it will do the most good,
namely, in
their Reserve Account.
At the same time
doing ^way with the annoyances and danger incident to the carrying of
large sums of money through
city streets.

We also have
tine, which

situation,

several

functions

perform for

that

the

our

City

outside

ordinary clearing house

member banks.

Detroit

We have in Detroit

completely

nicipality, the City of Highland Park, in which

proper

Clearings,' daily at two o'clock.

returned

have

time and labor-saver.

daily, excepting Saturdays, and

At this time

which

daily,

Clearing

Association.

charges such banks

Clearings" with the amount
wiped out.

are

surrounds

rou-

unique

another

mu-

located several

banking
they are located in a different way, they are
ineligible for membership in the Detroit
Clearing House Association, but
houses.

also

Due to the fact that

due

the

fact

confines of the City of

Detroit checks.
source

House Association
are

such

banks

are

located

Detroit, the public, of

The problem of

constant

These checks

that

course,

presenting them

for

within

sense

the

treat their checks
payment

has

been

member banks, until the
Clearing
plan of presenting them through its
agency,
brought to the Clearing House at 3 :30 o'clock of each
annoyance

adopted

our

day and the member bank is paid with
Clearings the following morning.

The

due-bill collectible through the

ebeoka

are

taken

the

Highland

BANKERS' CONVENTION.

160
banks and

Park

messenger

our

draft drawn against

receives in payment a

the checks presented, less the
total of the checks returned from the previous day's presentment, thus it is
possible to secure payment for these Highland Park checks through the
next day's clearings at exactly the same time that payment would be received for the checks of a member bank.
Practically the same plan is
followed in the collection of checks drawn against two banks located within the City of Detroit, and which are not members of the Clearing House
for the total of

Reserve Bank

Federal

the

Association.

Weekly statements of condition are

filed with the manager of the Clearof our mem-

ing House and a summary of these statements is sent to each
ber banks on Saturday of each week.
This summary shows
House, giving a brief summary

member

the

same

rate of

importance in Detroit than almost any other
we
are
located on the Canadian border,

that

fact

city, by reason of the
being separated from

King's Dominions by only a narrow river, and a
trade between the two nations is carried on through
the

give an idea of the volume of this trade, the
of exports among the American ports.

value

the rate of dis-

Canadian Exchange is fixed daily and reported to
banks, so that customers of all member banks are quoted the
Canadian exchange.
You will appreciate that this is probably

and premium

of more

the total inthe Clearing

of Detroit's banking condition weekly.
for our members any such service as can

the Association, for instance,

the office of

unified

count

to perform

endeavor

also

We
be

different items reported to

and decrease of twenty-two

crease

large portion of the
the port of Detroit.

Port of Detroit ranks third
The bulk of our foreign

going to the Dominion of Canada.
Thus it is that
the Canadian exchange problem occupies an important position with the
Detroit banks, and the stabilization of this rate at the Clearing House is
of

exports,

aid, not only to the banks, but to the general public, who are
dealing in this exchange.
past six months we have conducted a service which is proving of

great

course,

constantly
For the

each of

members because

various

our

of each week. we receive from
which have been closed out by
such accounts are undesirable.
The 111 of

value to our members.
On Monday
our members, a list of the accounts

great

handed to

accounts

these

concerning

and

addresses

the manager simply as a

comment

which no

is made.

list of names and
These lists are

The Value of Clearing
the

assembled and a list of all such accounts is sent by the manager to the
various member banks, this also without comment. This has resulted in the
weeding out of a large number of undesirable accounts and prevents the
owners of these undesirable accounts from going from bank to bank and
victimizing each in turn.
The Detroit Clearing House Association also maintains and supervises
a special detail of patrolmen, who are attached to the Metropolitan Police
Department, and who make the rounds of our financial district hourly durin& the niSht tirae' Ifc is a Part of their duty to visit the interior vaults,
.and all parts of the banking office they think proper. This, of course, for
the additional protection of our member banks. The Clearing House Association in Detroit has always co-operated to the fullest extent with the local
chapter of the American Institute of Banking. This year the Clearing
House is underwriting their complete educational program.
;
I had intended presenting a brief review of the branch banking idea as
it had been elaborated in our city, but I find that any discussion of this
soon brings us beyond the Clearing House limitations and is altogether too
lengthy for our purposes. Suffice it to say that our twelve member banks
conduct about one hundred and thirty branch banking offices in our city,
With the presentment I have given you, I have included principally our
mechanical operation. We find that the Clearing House Association has
gradually developed into activities for a field from its original purpose of
exchanging checks, and it is my opinion that the next few years will undoubtedly see the handling of these checks by the Federal Reserve System,
The Clearing House, on the other hand, has tremendous possibility of usefulness in the development and maintenance of safe and conservative banking principles. It furnishes the best means of co-operation between its
member banks and provides a facile medium for the exchange of knowledge
tending to the development of the best in banking. Is it unreasonable to
expect that in years to come we shall find the Clearing House Association
of the country engaged in activities which are entirely beyond the scope of
the original idea when Clearing Houses were first inaugurated? If this
belief has any force, or foundation in fact, there develops upon this section of the American Bankers' Association a clear duty in the promulgation of new ideas which are backed by sound business judgment to the various Associations in this country.

House Examinations in Establishing

Solvency of Banks.
Clearing House.

By W. M. Hardt, Examiner of the Philadelphia

Any

agency

and

sideration

which promotes greater safety in banking is worthy of con¬
my views on "The Value of Clearing House Examinations

Establishing the Solvency of Banks," are, I think, pertinent on this-occa¬
I shall build up a theory of value and its application to my subject

sion.

distinct

the

of reasoning with various technical ramifications leading to
principles, viz:
Detection, Prevention, and Remedy.
Some
I shall present is fully known by bankers in cities where

system

three

matter

is necessary to those seeking
susceptible to it, and are denied by their own will of the
advantages of such examinations.
I always bow to Chicago as the originator of the system and I am always
thankful that Philadelphia was one of the earliest cities to follow its
the system

is in force, but this same matter

knowledge,

comprehensive and
sufficiently adequate force of assistants and
In addition, in the matter of analysis,
appraisement and final judgment in cases where conditions are not per¬
fectly clear, he has recourse to the knowledge and judgment of the trained
bankers comprising the Clearing House Committee.
In banks of moderate
proportions he is able to cover all tangible assets simultaneously, and in
larger banks separate departments can be effectively handled by a concen¬

It may be intrinsic and tangible,
intangible but no less real, as in
importance, appreciation, regard and acceptance.
Value generally in its
relation to the possessor stands for one of two things—at is either a gift,
or earned in tangible form,
or it is the result of endeavor and thought, as
in the matter of appreciation or regard.
To establish value other than that
attached to money or property which is self-evident, the acceptance of the
product of work and mind by those for whom it is employed, should be the
reasonable determining factor in establishing such value.
The value of
clearing-house examinations, as relating to the solvency of banks, therefore,
rests upon the methods employed in making such examinations, and also
whether they determine with reasonable certainty the solvency of the insti¬
represents worth in some form.

Value

property, and it may be

money

In usual

examined.

tutions

where banks are found to be in a

cases

satis¬

tration

acter

comparing and listing collateral and in¬
with correspondent banks, proof of
ledger, certificates of deposit, certified checks, cashier's checks, etc.

stock

its character.
Under the rules and regulations formulated by the Philadelphia Clearing
House Committee, the initiative in examination lies entirely with the ex¬
aminer, and a great responsibility is placed upon him in that in each ex¬
amination he is required to decide whether a bank is in satisfactory condition
or otherwise.
If he be capable, and conscious of his responsibility, he will
exercise limited judicial power only, yet he cannot escape from deciding one
way or the other, and so reporting, but beyond this he cannot go.
The
responsibility placed upon him might have been shared by the Clearing
House Committee through the submission of the full report of each exami¬
nation to the committee, but as that would unnecessarily divulge the per¬
fectly

confidential

proper

deemed wise
mittee

condition

affairs

necessary so

both

are

system of supervision unique in

to do.

banks without

blemish,

it was

judicial and administrative, after the examiner reports the
bank

not

being satisfactory.

Then there rests with the

When the ex¬
satis¬
factory it also devolves on the members thereof to call for his full report
and all data relating thereto.
After joint conferences between the commit¬
committee,

and it only, the

aminer reports

tee and

of the
as

power

of decision

and action.

to the committee that the condition of a bank is not

the examiner

conclusion is arrived at,

not only as to the solvency

bank, but also regarding any dangerous or unsound banking

well.

bank may. be

causes—occasionally from both.
the substitution of

practice

shown to be insolvent generally from one of two
There can be removal of good assets and

equally good assets which are the property of others, the

remaining assets also being good,' and thus the bank may appear to be
solvent.
In other cases the valid assets may be intact, yet largely worthless.
Hence

bilities

must be first

are

true,

and

determined by examination that the assets and lia¬
are

correctly and

in the books

The

Clearing House examiner conducts his examinations along essentially

same

lines

those of capable examiners in the service

o£ the Govern¬

verifies by correspondence the amount

with all persons

by the. Treasurer of the United States, communicates

securities are held for safekeeping,
corresponds with makers of secured loans to establish the correctness of
collateral held and lists all unsecured loans and lines of credit from approxi¬
$1,000 and upwards.

mately

Having

described covered the resources of the bank the liabilities are
the manner following, the most important liability being that

considered in
to

depositors,

balanced

pass

and

comparison at the next examination, trial balances are made

individual

the

the bank.

confines of

books, in so far as it is practicable to obtain them, are
compared by the examiner, dormant accounts are examined

Depositors'

from

the original evidence of indebtedness is in the possession

outside the

those

loans or

whom

for

correspondents

and

ledgers,

the

daily

totals

depakments

these

general ledger for a considerable period preceding the date
Much auditing is also done in proving the work from

to the

the examination.

auxiliary books to the general ledger, comparing expense vouchers with,

the

original entries, and Resting calculations of discount and interest.
Having determined the correctness of books and accounts, and
found all assets to be in the custody of

having

those entrusted with their keeping,

satisfactorily accounted for, the matter of analysis and valuation is con¬
' V';'." '

sidered.

examiner

The

the

all

banks

mately the

the

uses

under

his

The
as

show the amounts borrowed elsewhere,

prompting

the. examiner

is vital, such

loans

further investigation.

information available to

of unsecured

value

are

numerous,

information becomes

and

im¬

If the examiner has served long in a given community he

portant factor.
has

This enables him to know approxi¬

jurisdiction.

signal,

danger

sources

the

ecured

anpount of borrowed money due by firms, corporations and in¬

represented by the respective loans found in

dividuals, and while it does not
serves

credit files containing all

card system

upwards

loans of $1,000 and

acquired cumulative knowledge which gives him almost intuitive judg¬
Oftentimes he will discuss small pieces of paper found in banks

ment.

examination

under

in order

form

judgment of

similar

found

paper

larger amounts in other banks.

His credit files serve as a basis in consid¬

ering extended lines of credit.

Friendly relationship with bankers,

paper

these

credit agencies makes

and

with

sources,

enable

him

access

form

were" unlisted

comes

reliable

sellers

information, and
are

based,

securing loans is generally easily made, but in
securities

are

held,

further

research

be¬

necessary.

By the methods already
period,

has evolved

and

judicial

powers
or

House

avenues

judgment upon banking risks.

unknown

valuable

to credit statements upon which loans

The valuation of collateral
cases

bank

accurately set forth

and statements of the bank.

the

to these the examiner

But in addition

due

not

The duties of the .Clearing House Com¬

accounts

verification

concentrated dual
relationship between him and the Clearing House Committee, whereby the
responsibility of judgment is shared by both.
This welding of separately
a

counting of

all examiners, and which embrace

cash, proving loans and discounts,

checked

forces creates

by the examiner are of the conventional char¬

pursued

employed by

usually

and listed for

distinct

safeguarding other departments.

first

after

force

General methods

factory condition the responsibility of such finding rests solely with the ex¬
aminer.
In other cases where conditions are not entirely satisfactory in the

judgment of the examiner, the decision is the result of a

investigations may be more

his

but

State,

vestments,

example.
in

and

ment

thorough by virtue of having a

ample time to devote to the work.

- v

conferred

mentioned the examiner completes the initiative

condition which

upon

him.

not

Committee

briefly informed

committee is

given at

requires

Hence

satisfactory condition.

some

length the

the

he decides,

such

reasons

exercise

the

in his opinion,

If the former, the Clearing

finding;

the

latter,

the

for his unfavorable decision.

CLEARING
In

all

the full report of an

cases

disclosed
the

the

collateral

made under

secured loans with

all

loans, unless

unsecured

all

and

examination which deals with all matters
including lists

investigation,

held

HOUSE

very

inconsequential, is

The directors are informed
by letter of the transmission of the report, and an acknowledgment of its
consideration by them is required.
The value of such consideration by
directors not only brings to their-attention the character of assets, but it
may become
through this personal inspection an important element in
seal of the president

establishing the solvency of
When

bank

of the bank.

bank.

reported to the Clearing House Committee as being in

questionable methods employed,
which many times lead eventually to insolvency, or from having doubtful
assets, the Clearing House Committee considers the situation.
It is then
that its executive and judiciary functions are fully exercised.
either

unsatisfactory condition,

from

committee and the examiner analyze,

repair the weakness of the bank, or whether from depreciation of asset or
other
causes,
actual insolvency is indicated.
The comprehensive

from

general credits applied by the committee often
obscure points.
When necessary, still further
information is obtained through numerous channels open to them.
After
all available means bearing upon the subject have been employed, a decision
is arrived at by the committee, generally subject to a conference with the
president of the bank, who may be able to satisfactorily explain debatable
matters, or modify views already formed.
In the final analysis, in estab¬
lishing the solvency of a bank, the unification of knowledge and information on the part of the committee and the examiner lends weight to the
conclusions formed, and must be considered as being far more determinate
knowledge

local

throws additional

and

light

upon

experience, trained in finance, experts in credits, and having superior knowl¬
institutions

own

with such powers as

These are men of large

have already been referred to.

.....v.

formed

was

It is

in their

would be thwarted.

pleasure to assert that the operation of the department of examina¬
tion extending over a period of more than eleven years, has met with
pro¬
a

nounced success,

bank

from

sults.

and hundreds

of commendatory letters have been received
attesting their acceptance and appreciation of its re¬

directors

Any fears

veyed, which

of undue

system

publicity

have been in

may

workings of the system.

improper

use

of information

con¬

minds, have vanished with the practical

some

However,

higher tribute to the value of the
be desired than that of the cordial commendation of a former

can

Comptroller of the Currency, who recommended its adoption by all the
serve cities of the country.

re¬

Therefore, having traced Clearing House examinations through the laby¬
of methods, adjudication and acceptance, and having shewn the im¬

rinths

portance of cordial co-operation between the Clearing House Committee and
the

examiner

the

consideration of

credits,

determination

rectifying existing weaknesses, thd conclusion

sisting that such examinations
solvency of banks.

of values

and

is entirely reasonable in

in¬

of the greatest value in establishing the
features and object of the system are—De¬

are

The salient

tection, Prevention, Remedy.

Paraphrasing

quotation:

"We

not worst at once—the

are

Begins

course

slowly, and from such slight

infant's hand

of evil

source,

might stem its breach with clay

But let the stream get deeper, and bankers—

Aye, and examiners, too—shall strive in vain
To

turn the

Carry these views
cation.

;

-."V-'-

V,.-.."-A"

"i:

■

Years of Clearing

Fourteen

credit bureaus

members of the Clearing House Association and delegated

selected by all the

extensive

are

headlong torrent."

body comprising seven leading and representative bank presidents,

With

particularly well equipped to pass judgment on
They are also broad-minded and absolutely impartial,
though firm and decided.
Were they less than this the department of ex¬
amination would hardly have warrant for existence and the
object for which

of them individually might be.
insolvency is wholly that of the Clearing House Com¬

The declaration

they

subjects of valuation.

than the findings of any one

mittee,

161

edge of local banking conditions.

action

conditions warrant remedial

the

whether

determine

and

values

With this

the examiner.

in the possession of

foundation, and in confederation, the
fix

the report as well as all

calls for the full details of

The committee then

data and credit information

SECTION.

;

-.U'

'■

tenant of your memory in your campaign of edu¬

as a

''V.:■

■

■-V

■ -■

"V"- '

...

7- -V

House Bank Examinations in Chicago-

Originator of the System.
By Charles H. Meyer, Chief Examiner, Chicago Clearing House Association.
In

accepting the kind invitation of the officers of the Clearing House Secthe American Bankers' Association, to address the conference of Ex-

tion of

aminers and

tion, I

Managers at the forty-sixth annual convention of the Associaless at

was more or

attention

accidentally directed to the fact that this would be the four-

was

teenth annual meeting of
it

was

might

1906,

Chicago,
In

just fourteen years ago,

system in connection with

the

direct

disclosed

management of

condition

Clearing House member banks

our

to the present time.

December, 1905, the failure of

under

that Chicago adopted, or I

psychologically fitting to briefly outline the practical appli-

me as

cation of this
in

the Clearing House Section of the Association, and

invented, the Clearing House system of bank examinations, it ap-

say

pealed to

loss in deciding what title to select, until my

one

man,

which

affairs

National bank and two State banks

who

was

president of the three,

and

surprised

other

appalled the

The liabilities of the private ventures of the president had

Chicago bankers.

gradually accumulated in the three banks until they had absorbed the
tire capital

When

last

en-

and surplus of all three, amounting to $3,500,000, and 41% of

their aggregate

deposits of $27,000,000, one-third of which
drastic

State Auditor,

measures

decided

were

up,

was

public funds,

the Comptroller and the

Saturday afternoon after the vaults of
the three banks had been closed with time locks set for Monday morning,

notified

Clearing House Committee that unless provisions were made
payment in full of the deposits, none of the banks would be permitted to

for

our

the hands

for business on Monday morning, and they would be put in

open

acting together

now

unfavorable

for

effects of such

were

and the time

strained

was

therefore particularly

permitting the failure of the three prominent banks.

calamity, it

was

The

feared, would extend far beyond the con-

resolution adopted by the Clearing House Association appointing a committee to arrange for some plan of examination of Clearing House banks. I
quote Mr. Fenton's remarks at the annual meeting of the Clearing House As-,
sociation in January, 1906, in offering his resolution, as follows:
"This is the second time in ten years that one of the largest banks in
the city has been closed up between Saturday and Sunday. As members
a

of the Chicago Clearing House we have a right to know whether the
banks transacting business through this Clearing House are fit to be here
or not, and I am going to offer a resolution asking for the appointment
of a committee to arrange for some plan of examination of the banks,
and I am going to ask for a roll call in order that we may know how
the members stand.''
*
The vote was unanimous and the following June saw the plan in full
operation.
This outlines as briefly as possible the immediate causes which inspired
the adoption of a system of bank examinations which fourteen years of conscientious application in

superficial statement from the President of the conditions of

of which

some

in the course of construction, and

were

with only a vague knowledge of the

realizable value of their obligations, the
tentative estimate of the value

Clearing House Committee hurriedly made

of the assets of the three banks and of the

deficiency in them to meet their

These estimates have since proved remarkably

deposit liabilities.
final outcome.

To prevent a panic

their assets

over

besides

the

near

the remaining Chicago banks, facing

limited

This

guaranty of the directors.

their double

liability

their stock.

vitally interested individuals will probably

the action of

what

ac-

responsibility for $8,200,000 of public funds in the bank

and the shareholders
of

under

providing for payment of the depositors in full, relieved the

bondsmen of their

classes

such

tary,

There

the

associated

banks

meant

for

never

them.

These three

fully appreciate
Subsequent de-

city have, I believe,

twenty-eight

are

Chicago and in

some

Waukegan, Oak Park, Evanston,

regular

member

banks

gathered the above detail and taken the liberty to quote verbatim

man

annual
as

the

address

Chicago Clearing House

by Mr. James B. Forgan, Chair-

Committee,

dinner of the Bankers' Club of

delivered at the fifteenth

banks

which

enjoy the

privileges of

the

inauguration

this

system

bank

examinations

few

months later.
A

previous to this occasion,

arisen where it

was

lessly involved.
they

similar condition of affairs had

found that the second largest

bank in the city

The members of the Association had

all these institutions
fore

closed

were

solvent condition,

reason

was

hope-

to suppose that

and forty-eight hours be-

member of the Clearing House Association would
have accepted their checks in settlement of balances for an unlimited amount,
were

Although

regu-

February, 1901, the late Mr.

then President of the Northern Trust
House

A srciation

gether with the

should take steps

necessary

Bryan

Smith,

Company, suggested that the Clearing

to employ an auditor or examiner, toassistants, to make from time to time a detailed

of regular assistants, each fitted by experience to thoroughly do that part
of the work assigned to him.
The examinations include not only a verification of the assets and liabilities of the bank so far as it is possible, but extend
into the workings of

every

department arid

are

made

thorough

practi-

cable.
After each examination the Examiner

cate, setting forth

prepares a

detailed report in dupli-

description of the bank's loans, bonds; investments, and

other assets, making special mention of all loans, either direct
the officers,
interested.

directors,

department.

every

employees,

indirect, to

to corporations in which

they,

description of conditions

This report also contains

are

found

One of these reports is filed in the vaults of the Clear-

ing House in custody of the Examiner, and the other is handed to the bank's
use

of its directors.

The individual directors

report has been handed to the President for their

director is given

taining
sisted

opportunity to

see

high standard in his bank.

upon

copy

use.

are

then noti-

of the Examiner's

doing,

every

the report and co-operate in mainThe

Exanyner has in

every case

in-

receiving acknowledgments of these notices to the directors,

The detailed report referred to it not examined by the Clearing House

Committee unless unusual conditions make it
in briefer form is prepared in
of

every case

that

necessary.
A special report
and read to the Clearing House Com-

purpose.

This report, made in the form

letter, describes in general terms the character of the

calls attention to
tendencies,

gerous

any

unwarranted conditions,

should they exist,

Examiner's opinion of each bank

and

bank's assets,

gives irregularities

expresses

general

ments

our

Clearing House banks rendered

the

sworn

state-

to the Clearing House Asso-

ciation at the time of each State and National call,
as

dan-

way

he finds it.

In addition to the detail and routine herein pointed out, the

any

far back

Clearing

The work is conducted with the aid of

mittee at meetings called for

few years

the

corps

Detroit, Michigan, several years ago,

deplorable| state of affairs referred to was the immediate factor which

influenced

Assistant

lations of the Association.

fied that the examination has been made and that

I have

the

House through the regular members in accordance with the rules and

President for the

from data in hand in the form of

instances to towns tribu-

(including

the double

liability of their shareholders, had it been collected, would have
their deposit liabilities.

practical

Winnetka, Lake Forest, etc.

velopments have shown that in liquidation the assets of the three banks, plus
been insufficinet to pay

proven

Treasurer U. S. and the Federal Reserve Bank) and also fifty-one so-called

inevitably heavy loss, assumed the deposit liabilities of the three banks and
tion,

our

regards results obtained than anything heretofore devised, and a short
sketch of some of the routine followed by our department may be of interest,
These examinations, in addition to regular members, extend to all the

affiliated members

Chicago.

With but

his various ventures,

took

as here referred to were uncovered that Mr. W. T. Fenton, then and
Vice-President of the National Bank of the Republic, succeded in having

affiliated member banks of

receivers.
Business conditions

fines of

examination of the affairs of the members and others clearing through members, it was not until the deplorable state of affairs in the so-called Walsh

banks

are

carefully analyzed

to important changes as compared with the last preceding call, such as

increase

decrease in past due

parative list made

paper,

for presentation

bond depreciations, etc., and a comto the

Clearing House Committee,

BANKERS'

162
and should this statement show any
last

important changes as compared with the

the Examiner ascertains the immediate nature of the items con¬

call,

stituting same.

■■.■■■

leading up to the immediate consideration
brief outline of what

and adoption of this system and

might be termed the physical routine or application
close at this point you would be justified in say¬

the same, and were I to

ing that I have given only a prelude to what you were led to expect
I have chosen for this paper.

more a

regards results obtained during my work as an Examiner since 1907, first
for the State Department of Illinois, and later as National Bank Examiner
as

Chicago, and as the most of my work as State Bank Examiner was as
Examiner for Cook County, following by being National Bank Ex¬

for

supervision contributes materially to your peace of mind.

reasonably
the

chance

same

I have

had

even

since

and standing in the community

so-called

Chicago

which

district,

included

in addition to

Minneapolis, and later Detroit
practicability of Clear¬
ing House examinations, as compared with State and National examina¬
tions, are a result of experience gathered in a field which, coming in direct
contact with my work as Clearing House Examiner for Chicago since No¬
vember 1, 1914, qualifies me for at least believing that my impressions
the cities of Milwaukee, St. Paul,

Indianapolis, I believe my impressions as to the

have

some

foundation of fact to rest upon

way

of comparison of results

obtained.
Without

to stand upon,

sparring for position or for ground

any

I will make the statement that to my mind practical
tained through Clearing House supervision, at least in Chicago,

speak,

so to

results ob¬

and I can
see no reason why this should not apply to other cities, are such as to place
the system in a class where comparisons with other systems, call them
State, National, or whatever you may, will show such superiority in favor
of the Clearing House system as to almost dismiss all argument.
This I recognize as a very strong statement, and I believe would bring
down a storm of protest from State and National Examiners were I to stop
here, but I desire to go on record and to have it thoroughly understood that
this is in no manner a reflection on the great work done by our State and
National Examiners, both as to individuals and the departments they repre¬
sent, and were I to leave that impression with you I would be guilty of
libel of the grossest nature.
It is not a comparison of individuals but of
systems, and the Clearing House system is by the very nature of things
bound to give the most practical results almost automatically.
I believe I
am not
presuming when I say that any State or National Bank Examiner
who hears or reads this

that
and
v

ask you to pause just a
minds the deplorable conditions existing on
memorable Saturday afternoon just referred to when the Comptroller
the State Auditor issued their ultimatum to our Clearing House Comand turn over in your

provisions were at once made for payment in full of
the deposits of the National and two State banks, they would not be per¬
mitted to open for business Monday morning, and they would be put in
the hands of receivers.
All three of these banks were and had been members

long period and as such had rendered
their sworn statements to our Association at Each State and National call.
Under the old order of things there was nothing which could acquaint our
Committee with the conditions existing in these banks further than to rely
on
the National and State examinations and the supposed honesty and in¬
Clearing House Association for a

of dur

tegrity of the management, yet with these supposed safeguards to
condition had been allowed to develop which was so rotten as to

this

rely upon
show the

Clearing
it

what

point

the millions of deposits in these banks, to know
organized from within, so to speak, which
minimizes the possibility of a recurrence of such a condition.
Where form¬
erly occurrence of this nature tended towards a feeling of suspicion and dis¬
trust towards banks of which the Clearing House Committee had no real

supplanted by respect and confidence, for
I can safely say that whenever any of our Clearing House banks are referred
to by some one as regards their general condition, I have a mental picture,
so to speak, of the officers, their policy in the conduct of
affairs, the gen¬
knowledge of condition, this is now

assets, whether

not it is a so-called "one-

bank," and in fact all the various factors tending to

man

make for safe or

When

believe

this I

supervision where the

is possible only under local

Clearing House Committee through its own Examiners can keep in constant
touch with its members and act firmly whenever the occasion requires it.

call

want

Right here I want to digress to the extent of calling your attention to a
our city which I frankly confess I cannot reconcile or

attention

broad,

the

occasion

Everything is done to co-operate with the

analysis.

bank

with

without

losses

the freak possessing

mistakes

that while it may

roe

Every

one

judgment,

believe

possibility of these failures in our member banks, we have any
number of other banks who refuse to contribute their share of supporting

tenths of the

"We don't need any
any
as

their refusing to join the Clearing House.
They go
more or less antagonistic through expressions such as

Clearing House examinations, for we are just as good as

Clearing House bank and run our affairs along lines jest as conservative

any

them

This I have no right to question, for the men running
second to none as regards integrity and ability.

of them."

are

The above defense

was

made to me by the President of an outlying non-

after I had given a short talk on Clearing House

member bank some time ago

before

examinations
in

one

our

local bankers' organizations.

To all banks

contributing their share towards this great reform
themselves along the lines as the President of the bank

Chicago who are not

and

who

express

just referred to, I have just
they

may

read this,—you are

fits

without

not

call

your

this to say, and I trust that in some manner
profiteering to the extent of reaping the bene¬

contributing your influence or help.
I need
attention to the fact that to-night when you go home the

any

manner

agree

the aforesaid qualities would be more lucrative.

members is made to feel that our department is a part
as the Examiner is really in his employ,
and he is

our

his bank inasmuch

expected to

use

it for

advice and assistance which is consistent with the

any

confidential nature of

work.

our

The Examiner is given the
tee

the

widest latitude by the Claring House Commit¬

hypothesis that whatever calls for drastic action has

first been

fully threshed out by the Examiner with the bank's officials and a mutual
understanding has been arrived at based
in

It is simply impossible for

point.

one

Clearing

our

banks

House

conditions surrounding the case

to imagine a .condition developing

which

reach

could

the

stage

sented in the so-called "Walsh" banks referred to in this address.

cally, I believe it impossible for
which

absorb

would

the

entire

any

banks to develop

our

would

mittee

pre¬

Theoreti¬

condition

capital and surplus and reach into the de¬

here

call

attention

positor in
system

that

fact

not

been

lost to

calling for immediate action I
to this,

added

once;

they

important local situation which

every

result,

all

interests of
in

de¬

since this

affiliated,

inaugurated in 1906.

Committee

bank

and it is opportune to
has

dollar

one

Clearing House Examiner is not hampered by red tape or delay.
condition

and

the

Clearing House member bank, regular

was

The

find

that stage to be reached,

allow

never

the

the Examiner is in

immediate

vicinity

business of the bank after

against loss, of

who

men

are

may

position to cast about and have

the

assume

case,

some

deposit liability, liquidate the

provided the bank wishes to

course,

specific

any

If it is for the best

thorough analysis shows it to be fully protected

whatever is left is paid to

in touch with

are

factor in

act with constructive intelligence.

can

If I

reach the Clearing House

can

the stockholders.

this role, and

assume

This plan always conserves the

assets under liquidation.

have mentioned lines of action here which you may say,

State

ing his
long

National Examiner

fault of

his with

powers

following certain legal and other restrictions surround¬

which make it

local proposition,

advice

get

and permission at

reduces to

system

strictly

capable of immediate action.

Unfortunately, the
cannot

necessary

the Cleaning. House

all of which

range,

and rightfully,

take, but he is handicapped through

may

nature of

very

give specific

Examiner's position is such that he

which would be of great interest and would

cases

ac¬

quaint the public in general of the real practical work accomplished, there¬
fore he may

examine banks

in and

year

indirectly protecting the public, but let

would advertise the fact that

funds and
this

one

not been

one

the

going to

banks

our

about

which

our

banks

factor

Vice-President

the responsibility of citing

assume

very

widely advertised in the
one

simply

outlying banks.
bank's

the

loss

uncovering the fraudulent
of

one

banks.

our

Being

We discovered

one

of trust receipts by a

use

such

shortage of

not

nature

not right.

was

comparatively

was

that had

modesty
have

were

the time,

Clearing House member bank

four months ahead of

friends and other institutions, thus

operations

case

Clearing House examinations, brought about by

suspicion that all

press

of the most convincing illustrations

department coming in contact with both State and National

able to examine said bank

were

him which

escape

by the Examiner, and he will be judged by

I believe it is

practical value of

the fact that

was

year ago, as

was

case

employee had stolen the bank's

only.

case

However,
of

discovered

single

one

crooked

some

out, accomplishing great good

of our banks in Chicago knows better than I have here pointed it
out, that the system of Clearing House examinations has removed nineevery one

are

will

you

not be as elevating, a job with a dime museum

lieve, constitutes

further and

co¬

requires it, the policy of this examination department is

small,

Through the

peculations

scattering the loss,
that

our

department

discovered him there

was

use

bank

$300,000.

over

his

regular sched¬

our

receipts he removed collateral against loans sold by his

with the facts.

system through

practical

one

What I have pointed out in the foregoing as regards
the protection afforded banks through this system of examination, would, it
seems to me, be recognized by every bank in our city.
It is not necessary
to call any banker's attention to the fact that whenever a failure occurs the
sensitive public is at once influenced and as a result runs are or may be
started on every bank in the community; in fact, this is just what happens
in almost every instance, and especially so should the failure be a bad one;
distrust and suspicion stalk abroad and the average savings depositor rushes
to his bank and. wants to withdraw his funds, yet in the face of the fact that

this

beat

the seventy-seven

ule

even

success¬

you

work as Clearing House Examiner for Chicago by

condition existing in
square

"Can

management in righting a bad condition which may develop.
Bank officers
are human like all of us and whenever
the time comes where one can run

unsound banking.

All

constructive to the last

eral nature and trend of their

insisting,

near

come

by joining.

their share

them.

any

system is now in force,

that

banks under Clearing House
which is in any manner
antagonistic to the system; on the contrary, they never tire of expressing
their acknowledgment of the great benefit derived and what it means to

large represented through

that

of such importance

a man

Clearing House Committee, to say nothing of our member banks, both

regular and affiliated.

plus 44%

$27,000,000 of deposits, invested in
was President of the
three institutions.
conceive

that he could

supervision in Chicago, there is not a single

private enterprises of the man who
It is simply impossible for me to
a condition
such as this developing to this point had the present
House examinations been in force prior to that time.
Think of
means to the banks of
Chicago, to say nothing of the public at

of the three banks aggregating $3,500,000,

capital stock

entire
of

he is

'it?"

that unless

mittee,

yard

same

positors' money, for the simple reason that the Examiner through the Com¬

statement will agree with me.

emphasize the claim here advanced I

In order to

moment

are

established in Chicago he considers

were

fully, that said banks contribute

aminer

the

he knows you are judged by the

say

Clearing House examinations

operation given

for

You

right, otherwise the Clearing
membership.
Why not give

of the directors of a non-member bank and who has

one

his bank stocks much safer investments, and

our

Chicago,

their

out of

stick?

Chief

and

running his bank

that he is

sure

Committee would fire him

House

him

down the street is safe and sound

Clearing House member and under Clearing

holdings in other non-member banks, as well as member banks, tell

reflection of my personal observa¬
tions and impressions of the application of these so-called Clearing House
examinations, which impressions are largely a matter of general perspective
have to say will

now

that your competitor

assurance

by virtue of the fact that he is

through

the title

What I

reasonable

House

v..

..."

foregoing I have endeavored to present in a general way the events

In the
-

CONVENTION.

of trust

to so-called

Fortunately
extended

to speak, but his
can

say

with

all

nothing which would

apparently stopped him short of death.

Much

could

be said which

would set

forth

forcibly arguments show¬

ing the practical value of Clearing House examinations.
lation

all

mutual

overcome

banks

efficient

banks

and

well

are

This system, I be¬

of the Clearing House Committee for regu¬

arm

enjoying Clearing House privileges.

shared

by large

and

small

alike.

The

benefits

are

Mistakes of policy as

judgment have received timely correction; jealousies have been
suspicion and distrust, which not infrequently exist among

and

having

been supplanted

Right here

real knowledge of the condition of each other's affairs, have

by respect and confidence.
call

I want to

attention

the fact

that

what

have said

might create the impression with the general public that the Clearing House
Committee guarantees that none of its members can fail, and I know of no
more

forceful presentation

Joseph T.

to dispel this thought than to quote the late Mr.

Talbert, than whom there

was

better authority,

who said in

January, 1909:
"The

establishment of

associated banks
cities

with

Government

expectation

hope

independent system of examination by the

Chicago,

excellent

results,
State

which has been followed in several other
was

not

done

examinations,

because

nor

was

dissatisfaction
done

with

the

entirely preventing bank failures.
Here the
public is in need of enlightenment.
The idea is more or less prevalent,
or

CLEARING
and

In conclusion, I wish to say that I trust the subject matter herein has
not disappointed you when squared with the title I have chosen for this
paper.
Were we Examiners'not handicapped through the confidential nature
of our work, I am sure we could make our talks on this subjet doubly interesting, but if in this paper I have succeeded in conveying to you the
strong convictions I have as regards the practical value of this plan of bank

recently has been growing, that the associated bank of Chicago in

some

way

through

guarantee

insure
not

of self-inspection have undertaken to

their system

public the soundness

the

and

conduct

proper

only of members, but of all outlying banks clearing through mem-

bers; and that the failure of

such bank in the future not only is

any

improbable, but quite impossible.
"This is
as

mistake, and the public should

necessary

now

taken
to

do—and

the selection of his

American Bankers' Journal, and his answer, to my mind, is a most fitting
finale to my observations. The Cabinet member said:
"I challenge you to find one important act for the protection of the

prevent unsound and improperly

the banks and to try to

regulate

through the Assobe given that failures may not.

managed

banks enjoying the privileges of clearing

ciation.

But

guaranty

can

in the future.

occur

depositors

"However active and efficient the efforts of
mittee

and

standard,

Examiners

the

better that it

may

to >keep our banks

the future.
"The
dent
1

•

It is a

legitimate lines.

of good

banking."

recognize that in quoting Mr.

tive assertions

public,

House authority along prulong and important step in the in-

system is an extension of Clearing

and

terests

to the

assurances

with a banker, has been advocated and extended by banks, and has

Talbert verbatim, my more or less posiClearing House examinations give to the

been paid for by bankers."
V
Can Chicago be blamed for being proud of the fact that her bankers first
evolved and successfully put into practice this plan? I think not. To those
of you who have not adopted this system for reasons of petty jealousies and
unwarranted fears of having your affairs discussed in Clearing House Committee meetings, I can only say you have an entirely wrong conception of
the functions of this plan, and it behooves you to reap the benefits to be
derived by taking a much broader view of the duty you owe to yourselves
as well as the public in getting together and ironing out your diferences.
In a broad sense it is sound, wholesome government. It should and will

not participated in as strongly by him as I view them, but bear
in mind his observations were recorded eleven years ago, or only three years
are

of the system, and I believe if he had commented on
date and had the experience which is now behind

after the inauguration

this feature at this late

have made his point differently; however, I wish to make it
Clearing House Committee does not guarantee that none of
can fail.
This I believe you will agree with me would be

he might

clear that
its

our

members

promising something which,

act over which no

employee committing an

anv

control.

conscientious the
dishonest officer
system of supervision had ^endure; for, like all good systems of government,
jgrived from the consent of the governed.

matter how thorough and

be, would not prevent some grossly

Examiner's work may
or

„

The Banker's

They

outright destruction of
the Government to make
"an industrial republic that would insure justice to all."

for

which

rights, with the complete overthrow of

Dakota,

North

State-owned

Non-Partisan

the

packing plants,

canneries,
banks.

and

mills

flour

extend its

"In

now

makes

League.

modern

When

effected a program of
factories, terminal elevators,

ber, he

sugar

that book.

apparently successful effort to

posits of State,

the

dol¬

their

further

cause,

the Non-Partisan

the State

see

Direct

fifty-fifty

good of

the Plumb

and

the

midst of

"The Organized Farmer," Mr.
interesting to you bankers who have

service is to your own

local to a
and
as a
be¬
come a part of an
international banking monopoly.
It is a sucker, a
feeder, a little sponge, that draws to itself the resources of the coun¬
try, the village or the town, which resources in turn can be used by the
"In

generation's

time banking

has changed from

It has many qualities of a nation-wide monopoly
result of the great war, the smallest bank in the country has

national system.

Plan.

big exploiting banks of New York.
"It is the man farthest down who needs the credit most.
bankers will

not

supply it.

They prefer to send their money

to use it to aid speculators,
and speculative purposes.

Street;

commercial

without capital, or even

man

Yet the
to Wall

packers, middlemen, or for other
America has no banks to help

the farmer in need of

credit for pro¬

purposes."

_•_>

Brotherhood Banks.

will the great inequalities of modern society
That

disappear.

there

is a

widespread belief in the

pronouncements of Mr. Howe

by the recent authorization of the establishment in Cleveland of
Brotherhood of Locomotive Engineers' Co-operative National Bank"

is evidenced

Syndicalist sees in the State only an instrument of oppression.
workers in each industry shall manage the affairs of their particu¬

"The

which,

the miners shall manage the mines; the railroaders manage
railroads, and so on through all the lines of human activity.
industry;

particularly

He says:

community.

ductive

"Capitalism is organized robbery.

Plumb plan and nationalization of the railroads

long outcry printed in

recognized that your first obligation and

always

access

the

something

utters

Howe

and society so reorganized that every individual shall have free
to the social means of production.
This social organization will be a

"The

Explains the Banking System.

the coal mines.

the

lar

Howe

Frederic C. Howe, erstwhile Immigration Commis¬
port of the City of New York, college lecturer, economist, and
forward

steps

their booty,

revolution.

by a board of fifteen, ten of whom, hold¬

means

prominent advocate of the

and

operate on a

class.

sioner at the

William Z. Foster, the steel strike leader, wrote a book en¬
titled "Syndicalism," still read by American workingmen.
In it he says:
"The wages system must be abolished.
"The thieves at present in control of the industries must be stripped of

"The

basis

Frederic C.
Now

Haywood.

Syndicalists

railroad employees to

million

corporation including every railroad employee from

railroad employees.
that, after they had satisfactorily adjusted
their own remuneration, they would divide any surplus half and half., onehalf to go to themselves, whose compensation they had already taken care
of, and the other half to go to the Government—the one hundred and ten
million of us who had put our money into and own the roads.
A more preposterous proposition could not be conceived.
It outdoes so¬
cialism, because all the socialist asks for is ownership by the State for the
common good, while the Plumb plan
means ownership by the State for the
The

Some years ago

"Only after such a revolution

two

some

ing tow-thirds control, are

anything."

Action

through

executive to waterboy, run

chief

for disloyalty,

only people who produce

over

basis

50-50

the writing of William

sentence

of Congress,

them

turn

Haywood, the arch I. W. W. under a
but released from the Federal prison
on
bond.
He wrote "John Farmer with his little one-hundred and sixty
looks just the same to us as Miller and Lux—with their million and a
quarter acres of land.
We are out to get the whole of it for the working man.
The fanner should look just the same to the agricultural workers as the
mill or mine magnate looks to other workers.
One has no more right to
the land than the other, and we are out to get it and turn it over to the
Next

to-day, but was

Soviet Russia

the railroad brotherhoods and
defeated at the last
but by no means out of the mind of expectation of its
advocates.
By their plan, the one hundred and ten million people of this
country would pay eighteen or twenty billion dollars for the railroads and

Republicanism.
William

twenty-year

that particular industry;

the railroaders shall manage the

by the American Federation of Labor—a plan

endorsed

Washington is quoting the statement of a

Democracy

shall
the miners shall manage
railroads," is not only being
incorporated in the Plumb plan

by Foster that "the workers in each industry

the affairs of

session

League organizer in

which he had put in

evasively, "I have become a little less radical,

operating the railroads, promulgated by

for

Republcian Senator that "not¬
withstanding the people have bought and paid for all the woolen mills in a
single year—as during the war they had bought and paid for all the shoe
factories, all the big flour mills, all the steel mills, all the saw mills, the
packing houses, the tanneries, the coal mines, and, who knows what elseyet they do not own them and are at their mercy."
With equal accuracy or
inaccuracy, this Senator, reputed to be a successful publisher of daily and
monthly newspapers and journals, might have said that tl|ie people had
bought and paid for "all" these publications, but did not own them either.
Recently we read charges of a Democratic Senator to the effect that the
New York banks are for political purposes attempting "to bring about an
industrial and financial depression." Just as if the New York bankers were of
any one political faith, or, if they were, would loosen the pillars of the
temple and bring it down upon their own heads!
This and other Senatorial loose talk, so palpably made to arouse prejudice
or start the handclapping and foot-shuffling of the "peepul back home," is
readily grasped and quoted with avidity by radicals who merit no badge of
of

Mr. Foster replied

mines;

tried out

only one hundred forty-one
Evidently its private patronage was not great.
Senatorial Loose Talk.

asked if he still believed in the statements

was

manage

plus, while their individual deposits were

thousand dollars plus.

might is right.

in all ages,

justifies the means."
before the Senate Investigating Committee last Octo¬

scheme outlined

The

bank of North Dakota,
deposited all public funds, shows total de¬

County and other public funds were thirteen million

society,

but pretences with

'-:v {•'■

workingmen.

possibly."

blight to other States.

in which under the law must

the

the stand

League has

January 15th statement of the State-owned

The

lars

Non-Partisan

legal and inalienable rights of man are

deceive

"The end
The

to the wealth they have amassed than

burglar has to his loot.
"The so-called

all the way from paternalism to the

range

the United States.

Commerce

"Capitalists have no more right
a

the American public than to-day.

property
way

Chamber of

have more economic fallacies been let loose

Without doubt, at no one time

its just powers are de-

Opportunity in His Community.

By F. N. Shepherd, Field Manager,

upon

These

originated 'on the inside' is a far better plan than any thus far suggested from the 'outside.' The plan of which we speak has been in
operation since 1906, before the panic which gave rise to most of the
agitation for deposit guaranty; a plan that is sounder in principle and
practice and proven better by actual test than any other plan of
f ' guaranty. Under it no depositor has ever lost a penny. That plan is
the plan known as Clearing House examinations. The idea originated

the failure of some bank in

do destroyed by

bank.

examinations

done and will continue to

To which the Editor says: .
' "
"We accept the challenge, and in so doing it is necessary to point
to several flaws in Mr. Bryan's arguments, because the plan that

high

power

than to have the Clearing House Association and its system of
discredited, and all the good work that it has already

fact,

inside of

originated

that

community

things all come from the outside."

the Clearing House Com-

to prevent such eventualities.
It is
should be said and let the public clearly understand the

there exists

Cabinet at Washington some time ago
public, which was answered by the Editor of the

made a statement in

heavy responsibility—is to endeavor

distinguished member of the

All

this

even

inspection as reflected through the fourteen years it has been in force in
Chicago, I will feel amply rewarded for this effort,

understand that it is just

before for a depositor to exercise care in
that the associated banks have under-

was

bank.

163

SECTION.

HOUSE

according

build up the

serve

official

announcement,

has for its motive:

"To

in every possible way, and to
organizations throughout the country who are

Brotherhood, to aid its members

model to other

BANKERS'

164

CONVENTION.
by some, or through the use of the ballot, as recommended by others, the
result in the long run amounts to the same thing,

The Central Labor Union of Philadel-

contemplating entering the field."

a resolution to organize the co-operative
deposits and savings from labor union men, and the Amal-

phia is reported to have adopted
banksI to bid for

gamated Clothing Workers have

will not

only appeal to members for deposits and savings, but has for its

ultimate

object the ownership and operation of factories by workingmen.
4
*
*
■
.

ha«ehca^ noHir They have tried, and SliSfLctS
Ih^ve^iiT'atl considerable success
hatred where classes do not exist.

lias attended their efforts, to

throw all of us into two groups—labor and

Yet no one has been able to

capitalist—and then set one against the other.

"Your Republic will be pil-

century ago, Lord Macaulay told us:

laged and ravaged in the twentieth century just as the Roman, Empire was
by the barbarians in the fifth century, with the difference, that the devastators of the

Romap Empire, the Huns and the Vandals, came from abroad,
country."
may prove prophetic, if our good citizens don't wake
up and give attention to that which is going on around us.
The people of
this country will not, if they know it, be dictated to by any class or domiwhile your barbarians will be the people of your own

Macaulay's words

nated

Organizations of labor and combinations of capital

minority.

must be

alike

with

the

for

present

to continue citations

economic structure.

they prefer to call it, capitalism, has come to an end" and must be supersupplanted by a new kind of structure.
They would abolish the
structure which civilization has patiently built up during three thousand
and institute in its stead a socialistic state.

and

agitator

contact

from

let the
the so-called intellectual, detached

Engrossed in the things that daily crowd his desk, he has

irresponsible thinker, or
with practical affairs, have

influence altogether dispro-

portionate to their number and become the teacher and

disturber of people

rightfully interested in bettering their lot.
Amid the hard and grinding
necessities of a work-a-day world the short cut of socialism is to many an
It would dispossess those that have and give to those who
by a direct seizure, as advocated

alluring bait.

Whether this be accomplished

not.

have

...

people are going to believe what he says, for they

v.,

•

Character and Ability Count.
know that here in
has a chance
in accordance with his ability, his character and his effort.
Here the oldfashioned virtues of work, savings, and thrift mean more and are better
rewarded than elsewhere.
This is the land where ability, ambition, hard
Work and imagination, practically applied, count and the rewards are more
nearly distributed in accordance with desserts than anywhere else.
The
workmen of yesterday are the employers of to-day.
Private initiative and
enterprise are rewarded. Useful achievement is the measure of success.
The present order of things is far from perfect, but we

America

nearly than any other place on earth every man

Socialistic

is toward socialism, which,

Trend.

instead of lifting all to the height

the highest, would drag all down to the level of the lowest. It would
deal the death blow to that which has made this country great individual
initiative and enterprise. Men are equal before the law, but any effort to
enforce equality of ability and aptitudes are rewards—to give to the tentalent man that which belongs to him who buried his one talen in the
earth—is an effort to reverse the course of nature, which is the law of God.
In the minds of many there exists the belief that in the State there is
a power and ability and character greater than that which resides in the
people that comprise the State. No greater fallacy was ever conceived of.
the definition of socialism as

subscribe to

have failed in the

business man and banker has too long remained

In the face of attacks the

Business Men Silent.

silent.

The trend

ceded and

years

many

social and

disturber, the agitator,
I
fIf w ?mnfp
influence for the dissemination of a few simple, sound, economic facts.

Under Fire.

of widespread dissatisfacThe remedies proposed are for the most part discarded panaceas long ago tried out, tossed
into the scrap heap of history.
Whether you like it or not, business is
under fire.
Many men are preaching that the "era of individualism, or as
is unnecessary

The fundamental soundness of the American people ts wtthout quest.on,
but " «» ^nker and business man sits still m the face of such savage, unwarranted and unfounded attacks as this by Fredenc C. Howe, then there is-

subject to law.
Business

tion

United States where laborer leaves off and capitalist begins.

define ip, these
Over

little question that

Class Hatred.

Fundamentally Sound.

America

definite plan for organizing banks which

"the final refuge of those who

It is the prescription of those who are

struggles of life.

born tired.
It would deprive ambition of its incentive, industry of its
stimulus, excellence of its supremacy, and character of its reward." '
Under the stress of war even the fanfare of trumpets and the sound of
drums—it was a handsome thing to put on the uniform of one's country
and be among those who fought for the preservation of America, but, if we
have regard for the perpetuation of our institutions, it is no less essential
that American business men verse themselves in economic problems, become vocal, and assume the role of leadership.
American leadership is on

trial.

Clearing Trade Acceptances.
By A. C. White, Manager, St. Louis Clearing House Association.

requested me to bring up for discussion a subject in

Our Secretary has

he thought would be of great interest
that is the desirability of making Trade Acceptances proper

which he-is deeply interested
to all

matter

you,

for

and

one

Clearing.

lie also

asked

to mention

other items which might be of general in¬

Under this latter heading I

terest.

that appeared

one

would like to read to you a paragraph

of the recent Bulletins issued by this Section.

This

"Since the Banks of the principal Clearing House cen¬
obliged to make a charge on all out-of-town checks to cover the
they sustain during the time such checks are in the
process of collection it is necessary that settlement be made by remitting in
funds, or their equivalent,"
This appeared on the invoice
of a firm in one of our large cities and shows such a clear understanding
of a matter not commonly understood by merchants and the public that it
seems to me it is well worthy of emulation.
If the Clearing Houses in the
various cities should take this matter up with the Merchants' Associations
and Chambers of Commerce some good should come of it.
The handling of any paper that finds its way to a bank would be simpli¬
fied if presentment could be made through the Clearing House instead of
by messenger at the office of the drawee.
Bankers would undoubtedly clear
notes and commercial drafts if it were possible, therefore the advantages
of having Trade Acceptances made proper matter for clearing are so ob¬
vious that they need no elaboration.
Some of the reasons which are given
for not clearing Trade Acceptances should provide the basis for a discussion
paragraph reads:
tres

are

loss of interest that

that may
1.

The

items.

acceptor

attitude

wants his

willing to have his

not

acceptances

quite general,

treated

charged

account

note—not

with

check.

such
This

despite the fact that the Negotiable Instruments

authority

gives

bank

such

charge

items to a customer's

is,

swer

"Yes;

instrument is

bank

Thomas

when

the Negotiable Instruments Act provides that

made

asked

stated that it

same

opinion on this feature of the Trade Acceptance,
that this provision would operate not only to

give an

was

his opinion

authorize but to make it the duty of

Acceptance at maturity thereof,

thority

The

the designated bank to pay the Trade

if duly presented, without any express au¬

instructions from its depositor, the acceptor, assuming, of course,

the money to
2.

'where the:

payable at a bank it is equivalent to an order to the

for the account of the principal debtor thereon.*
Baton, General Counsel for the American Bankers' Association,
the

pay

his credit

ceptor has no

was

sufficient for the purpose."
payable at a bank where the ac¬

is sometimes made

instrument

account,

usually for the convenience of the

drawer.

This

practice is not indulged in to any great extent, but the fact that it is in¬
dulged in at all makes it
answer

for

passing

one

of the questions to which we should find an

the desirability of Trade Acceptances as proper matter

That it is customary at times is indicated by the pamphlet,

clearing.

which gives this practice as one
of

value

made

the

seller

the seller does

cases

his

of the

merchandise,

reasons

why Trade Acceptances are

account

for the

that in such
collection, but receives

the desirability being

not have to enter the items for

proceeds of the Trade Acceptances which are

payable at his bank.
The

acceptor

ceptances at

sometimes

maturity with

arranges

for

extension

and meets his ac¬

promissory note.

Newly Elected Officers.
The

President—A.

Bank,

Minneapolis,

Crane,

First

and

are

the newly-elected officers of

Security

National

National Bank,

Members of

Ringold,

Minn.

Vice-President—John
mercial

Vice-President,

following

Washburn,

Chicago, 111.

Vice-President,

Continental

Com-

pamphlet which I have before me the question is asked:
"Can
the acceptance be legally treated as a cheek chargeable against a buyer's
balance at his bank without further instructions or authority?"
The an¬
the

credit

be both informative and profitable.

Act

accounts

the Association:
the Executive

Vice-President,

Committee—For the three-year term, James
States National Bank, Denver, Colo.;

United

Carl W. Allendorfer, Vice-President, First National Bank, Kansas City, Mo.

American Bankers' Association
Nineteenth Annual Meeting, Held in Washington, D. C., Oct. 19 and Oct.
21,

INDEX

The Thrift

Bureau

Valuable

Work, Samual Marsh
Americanization
Industrial
School
The

Feature of Savings

SAVINGS

Page 165

Railroad

Tax

Amortization

Page 176

Page 167

Report of Committee

Service to Members

Page 176

Page 168

Report of Committee

Federal Legislation

Page 177

Report of Committee

State Legislation.

Page 178

.__i
—

Page 169

Mrs. Florence A. Stevens.Page 170

Exemption of Securities, Melvin A. Trayior

Page 171

...

—

Banks
The bank,
the most

human, because the banker in his daily work be¬
thoroughly familiar with those things that are

important

vitally
banker
;

first

knows

getting

and

hand

world

in the

needed by

much

the

reasons

opportunity,
The

business lends it¬

our

self well to the development of a close

of the street,

our

surround

ourselves

with

broad

marble

coun¬

rial safeguards have too often reacted upon personalities.

really

believe

banks in

upon

courts—as
have

that

much

the

place to

people

many

same

have

that

way

only in case

they

look

come

regard

of necessity.

feeling of fear about coming in,

of the country are

the life of the

which

Bureau,

the

Children,

working

housekeepers,

young

about to

advice

feeling

the part of the public about banks must

and the problem is

squarely

to the bankers

Are

overcoming it?

tions do not

The

give

way

hopeful signs

see

It will take time.

new

ideas

over

it was

few

years ago,

more preva¬

and in some banks

the officers have moved their desks out into the middle
the

lobby

width

to
the

be close

and convenient

marble counter is being

tising is being humanized, and

some

customers.

reduced;
bankers

The

the adver¬

are

terms which

face.

they would

Strange to say,

use

with

all

if speaking to them face to
the banker's conservatism

bankers are conducting pig and

Country

lines;
noon

and
to

"School
ics

farmer
we

the

corn

contests

boys to greater effort along agricultural

have just listened

addresses

with

"Industrial

interest this

Savings

after¬

Systems,"

Savings Plans" and "Personal and Home Econom¬

Departments."

All of these

are

women,

foreign

are

people,

and

men

given the kind of helpful

sav¬

thrift to societies, schools, clubs,

The

work is

founded

the simple theory that

upon

successful

are

life if they

and talk

hundreds of people who

over

had

some

one

their personal and

do¬

mestic

problems—-problems wrhich the banker has ordinar¬

ily felt

were

vitally

too small to justify giving time to, but which

important to

the

success

the

individual

family in question.
Furthermore, that the banker is the logical

thoroughly familiar with the
the part

And

men

and

reasons

for

success

to stand
so

and failure

women.

thirdly, that In rendering this service the bank will

increase the saving ability of its clients,
its

one

position of counsellor to these people, since he is

own

deposits through the good-will

and will increase
created.

actually

and formality, he has been doubly so in his correspondence.

stimulate

married

great city like Chicago there

Details

writing friendly letters to their customers—writing to them
in

and

men

budgets, recommending savings plans, organizing

in the
open

large banking

employees' associations and other organizations.

night, but already

the horizon.

tendency of officers to sit in the

lent today than

Banking tradi¬

friendly,

people in business and young

ings clubs, giving talks

are

themselves.

The service consists largely of making personal and house¬
hold

overcome,

regular savers of them.

they could

This

established

have

like to think

personal and household economics that will tend

to make

would

street again.

Company

not ordinarily possible in

whom

Bureau.

institution.

relief when out

the

Thrift

the Northern Trust

Thrift

fort while within, and a feeling of genuine satisfaction and
on

Y^V'-

community.

Definition

They

feeling of discom¬

being brought closer to the peo¬

ple; that they are increasing their educational influence

ters, iron cages and uniformed policemen, and these mate¬

Page 180

_______

Page 180

women

,v:VvV-'

responsibility of handling other people's money has

caused

Page 180

Resolutions

Page 180

personal contact with

have not made the most of

Page 179

Newly Elected Officers of Savings Bank Section......

helpful service,

But, notwithstanding the fact that

man

Savings

Resolutions Endorsing Equipment Trust Certificates

of
for

failure.

the

Report of Committee

principles

outstanding

the

Americanization

The

masses.

fundamental

the

and

Report of Committee

banks

of all business institutions, ought to be one of

comes

Report of the Committee

Valuable Feature of Savings Bank Work.

More Human.

Becoming

Page 175

____

Manager the Thrift Bureau, The Northern Trust Company, Chicago.

Samuel Marsh,

-Page 172

—..Page 174

Savings Bank, Earnest Raymond Roop.

The Thrift Bureau

Page 175

■___.

Report of Committee

Equipment Obligations, Samuel H. Beach

Industrial

President

Investments

Budget System in the American Home, Alexander C.

The Bank and Home Economics,

the

Savings Plan, J. Robert Stout

Address of

Report of Committee

Wheaton__Page 167

Harrison H.

Savings Banking, John F. Tinsley.

Robinson

PROCEEDINGS

Annual

Bank

Through Thrift,

BANK

1920

hopeful signs that the

word about

our

Operation.

plan of operation.

We have tried to

make it just as easy for people to come to see us

ble,

possi¬

located the interviewing desk right in the centre

of the lobby.

At each end is

and just behind

comfortable chair for clients,

large settee, where friends

friends in the atmosphere of the Bureau.

double-faced

sign and

marble counters

bunch

of fresh

may

meet

On the desk is
flowers.

And

brass rails have been considered in

equipment, only the border of the

rug

no
our

marks the dividing

and the lobby proper.

line between the Bureau

just starting
established and much
work of the Bureau, and

of that was used to back up the

letters

the

from

could

14,

period of less than sixteen months, we

had 4,424 calls

IOvery time we give out a budget book we

have an oppor¬

tunity to tell the interested person about our

budget-making,

and the other services of the Bureau,
of two

and we get an average

day for special budgets.

three requests a

budgets are made to fit the individual or
standard

that

lieve

and if the budgets fit the

misleading,

thoroughly

Bureau is to sell our clients

ments
two

satisfied customer is

bank.

points in the work of the

of the very biggest

one

into»his

dollars

the service of the

him how he can put

savings account, where

formerly deposited one, ought to go a

long way toward mak¬

ing and keeping him satisfied.
Many instances have come to our

attention that lead us

is valuable and greatly appre¬

believe that the Bureau

by those who use it.

ciated

ceived

small salary and

came

woman

small

of her expenses were

$20

month.

of the first

end

the

had
for her indicated a possible saving of
She opened a, savings account and at

compared to what other young women

Our budget

to pay.

about

month

stead of $20 as we had
was

she told us she saved

$30 in¬

She had discovered her

averaging the $20 per month.

take

position that every one who is receiving

the

certain saving ability—

than enough to live on has a

that there is

certain amount that can and ought to be

put

each pay day, and we aim to help

into the savings account

them determine that amount,

and then recommend that they

deposit it to their savings account as soon as they get their
check.

pay

small salary,

not comfortably

several months ago, re¬

small that it looked as if he could

over

save

he started putting a

dollar or two each week, but

dollar in the bank every two or three

The other day, after fourteen months of systematic

days.

saving, his pass-book showed $116, without a single with¬
drawal during the entire

with $5 after talk¬

ing with us, came with his pass-book the other day to tell

We have
would take

One
was
a

man

a
a

wide variety of problems

presented to

us.

seemed

possible

just about able to make ends meet, but
something he voluntarily expressed

save

cure.
man

as to

came

all

seriousness

get

our

great day for the savings banks if

more men

Another type

case

to consult us on such matters.

is that of the man who, through too

plunged himself and family

free

use

into

book on

of the average person.

enough for a bookkeeper, but ap¬

Most of them are simple

parently too complicated for the average person

to follow.

attention has been given to

classifica¬

I believe too much

tion.

have

economists quibble

household

heard

even

about whether or not the

classification of the expense items

Our opinion is that it is far more

was proper.

know that he Is

ad¬

spending only so much for recreation,

people

Most

etc.

vancement,

important

his general budget than it is to

that the client keep within

not

are

bookkeepers, you

successful, must be ex¬

to be really

tremely simple.

how to keep down their

We advise with our clients about

expenses—buying carefully, for instance, and

this

by calling attention to our

vidual budget.

blank used for the indi¬

We have punctuated every item with a

of advice as to how to keep down
The range
is

of the salaries of those who come for

indeed,

word

the expense of that item.

wide, ranging from $75 a month to

assistance

$15,000 a year.

It is

how many people there are receiving

large salaries who have not

mastered the first principles of

It is surprising how many men

thrift.

doing the fam¬

I can best illustrate

ily washing instead of hiring it done.

lies dependent upon them

there are with fami¬

who do not seem to realize the

importance of life insurance.

Thrift is a wide open field.

possibilities for banks and other worth-while agencies

The

of thrift

are

unlimited.
Does It Pay?

of charge accounts has

accept counsel and save to

the limit of liis ability, he

found that the insistent appeals

discouraging.

We feel we are doing two things-

We believe it does.

increasing the balances of many of our old customers

and

creating good-will throughout the community, which is

al¬

ready bringing us many new depositors, and we believe the
results will be cumulative as the years go by.

It is gratify¬

ing to see the number of people who come to us

Also

great many have voluntarily called our

the increase in their savings since
There are

through

adopting

our

attention to
suggestions.

strings tied to the service, but to deny it pays

that

ters

mean

people appreciate assistance in mat¬

greater success.

for

suggestions

One young man about to be married came
as

of his creditors were very

A letter to his creditors, with our assurance

to how much it would cost to furnish and

operate their home, and he assured us in the beginning that
we

could not except their account, as they

a'bank.

opened

account, saying that our service had been so val¬

Our work

their business.

is only a little over a year

have only well begun.
are

had already de¬

The next day, however, he'eame in and

uable that they felt they owed us

old and we feel we

There are other features which we

developing now and the future possibilities are unlim¬

ited.

debt, and while he had reached the stage of willingness

able to find, I
the market that

that we have been

requirements

essential

the

cided upon

whether or not he was able to buy an auto¬

would be

could get

meets

and, while

larger one for the home,

believe there is a budget

not

To illustrate:

long time to illustrate tliem all.

willingness to quit smoking, whereupon we recommended

opinion

and

these books are the best

anxious to

mobile.

We have two budget

sonal expenses

would be to deny that

year.

Another

He had saved $595 over a period of

of his achievement.

less than

fact, it must not, if we

friends who have benefited from the service of the Bureau.

time.

Another man, who opened an account

individualize our corre¬
to become stereotyped. In
are to succeed in this kind of work.
books—one vest-pocket size for per¬

We do not want it

spondence.

One young lad, who came to us
ceived

the other is classified ac¬
interview and used for follow-

With this data we can

work.

surprising,

saving ability and she was happy.
We

cording to the nature of the

Later she told us she

estimated.

duplciate, and one card is filed

alphabetically for reference and

who had never saved anything.

She lived at the Y. W. C. A. and some
very

to us who re¬

what we call a data

of each interview on

This record is made in

card.

know, and-a system,

One young

illustrate:

get system?",.
A record is kept

of the best advertise¬

bank can have, and to show

particular circum¬
followed, ttnd

will be received from the service.

the full advertising value
see

We be¬

apt to be

they will more likely be

stances in each case,

You

family.

budgets are quite

printed

These

Will you give me some

ting ahead.

books

Bureau for our budget books alone.

the

anything, although
know we were get¬
information about your bud¬

$6,000 ?
We do not manage to actually save
make every effort. I should be so happy to

From June 20 to October

making individual budgets.

and

just read your

There

work—giving out budget

this

features

two

are

for

first phase to de¬

time to date.

velop and it has occupied most of our

Here is a typical letter:

advertisement of a young couple who
not save money on an income of $10,000.
Is there any hope
young couple with three small children and. an income of

have

is broad, as indicated, but our per¬

sonal and household budget work was the

for budget books and sug¬

mail.

"Dear Sirs :

around the world.
The scope of the work

great many requests

We get a

gested budgets through the

Thrifty has gone

received,

have

He is now a saver.

the situation.

Thrift Bureau was

about the time the

plan met

his obligations under our

to meet

able

careful stage and would

he had reached the

to them that
soon

Thrifty advertising campaign was

Our

I repeat—

to see us.

want people to come

CONVENTION.

BANKERS'

166

There
we are

way.

much

to warm up to our

Be Done.

done

banks in general if

customers in the biggest possible

Our ideal should be to be friendly and helpful in all

SAVINGS
our

public.

relationship with the

ing,

our

correspondence and

That

the

officers in their
personal contact.
cers

themselves, and

urge upon

begin inside and learn the

means

attitude

BANK

advertis¬

our

dress

employees and

Let's begin with the offi¬

their

and

pages,

ad¬

deposits.

the

United

States

command

was
formerly Director of Americanization for the Federal Department
the Interior
during the war and was recently elected Executive Manager

mutual

the

City,of

Philadelphia to

a small beginning in 1816 in
fundamental importance to our

position of

small

savers

the

for

savings banks than they have in commercial banks
ings departments.
Recently. there has been

let

without

The

concerns.

salary and

trustees

who must

bank to invest

speculative securities.

wage-earner

and

small salaried person

her

there will

save

less

likelihood

few dollars

earnings and deposit the

each

week

money

person

such

being susceptible to

savings institu¬

revolutionary ideas.

A saver with a savings account is one of
country's wealth, and he is.not going to permit the in¬
stitution which holds his
savings to be overthrown by the introduction of
the

are

the

owners

radical economic ideas.

guarantee

safety and solvency of the savings institutions with which
they are
connected.
They are required to set aside a sufficient amount in reserve to
insure

State of New York.

mutual

radical

fairness, it should be

the

this

the

has

saver

naturally opposed to

Government

the

home stake

element

any

maintenance

national

our

investments

be one of the
Americanization is achieved.
will

economy

will

institutions.

principal

in the

country, and for
factor aiming to over¬

existing economic

therefore, with habits of thrift,

savers,

peoples'

he is

reason

throw

safety of the peoples' deposits.
For these banks are, in fact,
institutions.
The profits made
through careful, conservative
accrue only to the benefit of the
depositors.
The law permits
trustees and officers no share in the
profits.
Only active officers are paid
the

tion,

In the interest of

stock-holding

serve

such

kind

month from his

sav¬

disposition to misrepresent the nature and

some

functions of mutual
savings banks.
that such banks are not

stated

public-spirited citizens who

post-offices with

of the

savings banks of the country are in a position to wield a
commanding influence in what has been termed Americanization through
thrift.
The philosophy back of Americanization of
this character is this—

means

this

The

through which
period of extravagance will be overcome.
The
country have placed greater confidence in the mutual

the

convenient thing for him to have.

savings bank beyond the point where good
Safety has been the primary requisite.
In every State
bank is
permitt|ed, the nature of the investments is
specifically set forth in detail in the law itself; thus, making it impossible
where

savings banks from

economic and financial system establishes them
the effects of the recent

right when he decided early in his life that

the range of investments for
any

in the State of New
/A'- v.-X'C-'.. 'V A

The rise of the mutual

boy each

a new

judgment indicates.

savings banks associated together

York.

boy."

"Here,

The laws of every State throw unusual
safeguards around these
banks, because cognizance has been taken
by the legislators in their wis¬
dom of the fact that mutual
savings! banks hold in safekeeping the savings
of small depositors.
There has been no disposition in any State to extend

over

139

if they have

even

salaries.

ton

for the

was

Savings Banks Association

$6,000,000,000 of

volume of the peoples'
savings is held in the
10,000,000 depositors by 635 such institutions in the 18
States where
they are authorized and chartered under the law.
Mr. Whea¬
of

instead

names

minute,

Through Thrift.

This tremendous

interest of

there

would be

name

Americanization

banks

day, and how the boy would appreciate knowing that his
father

By Harrison H. Wheaton, Executive Manager of the
Mutual savings

them

167

would only take a

them, first of all, that they

names

SECTION.

system.

The creation of

long way

The

promotion

through

means

toward the

thrift

which

and

ultimate

Industrial Savings Banking—The Worcester
(Mass.) Savings Plan.
By John F. Tinsley, General Manager, Crompton & Knowles Loom
Works, Worcester, Mass.
That it is desirable to
encourage the
to

build

man and woman

in industry

with

industrial

savings systems,

three

questions

1. Will the
workingman support a savings system that
explained to him, and thoroughly understood by him?
2. Is there such a
plan?

What

tenance of

is necessary for
an

industrial savings

this paper the writer

the

termed

the successful inauguration

"Worcester

will

(Mass.)

system ?

discuss

Plan," and

izing the

brevity, will be

the experience related herein

At the

well taken
The

With

When

the ending of the

incentive

part of

the

there

war,

writer

that

working people,

connected.

was

the

shop

was

further need for

made to find

impelled

that

had

handled

various

loan

success

detail,

and

this

plan

warrants

during
our

the past

answering

will

year

the

three

given

questions

bank.

lus

later

for

workingman will support a savings system that
to him, and thoroughly understood by him.
We think we have such a plan
operating.
The principal conditions
necessary for the successful

The plan

tell,s

and

ration

maintenance

industrial

savings

in number:
1.

The system

itself must be simple, flexible

The

idea and
3.

The

energetically

iaugu-

are

and

easily

support

the

un¬

his

stated

grows

and is,

balance

believe,

date
a

stimu¬

employee

the

If he wants to

their

see

pay-roll office,

reduce

he wants to draw

may

envelopes

pay

The books

the

little

and

the

amount, the

out

for

on
are

his book at any time.

wishes to increase his deposit,

man

who advises

out of

to the banks of the city*

goes

he simply

change

ac¬

he signs

emergency,

is not

simple rule

same

obliged

even

his

our

employ,

him, in which

not give him the money, but simply pass
insert a statement that he has been started

book, whenever the bank is

regard to the second condition
that

idea, would

savings

open

and make whatever deposits he

the

General

for the

of the plan,

success

management
be
energetically
behind
the savings
that this must be made perfectly clear to the employees.

necessity of thrift,
committee

men.

necessary

the

say

appealed directly to the

over

The

plant.

also

is taken

money

day and

is flexible.

he leaves

with

four

organization for introducing it to the men throughout
the shop must be
enthusiastically in favor of the savings idea
itself and the "plan," and must consist of such
elements as
represent the various nationalities and classes of workmen in
the

road to saving and we
express the hope that, no matter where he
he will keep his bank account, and that, thereafter, all that will be
necessary for him to continue the bank acount, will be to go to the bank

plan started among the

line

goes,

thorough believers in it, and do a
great deal of the initial missionary work that is necessary to
get
the

another

figure constantly

that the

foreman,

bank book to

We
must

out,

the

show it.
foremen

his

namely,
must

where

made

are

desires.

management

pass-books

envelopes each week stating that, in accordance
a certain amount is deducted from his

his

derstandable*
2.

system

bank,

order, the paymaster gives him the money, and he
to the bank.
;

pay

plant in

followed.

explained
2.

the

goes

Monday it

cordingly made.
is

previously
can

the banks selected.

authorization,

second

know

men

back at the

The

sorted according to

are

saving.

The

raised:
1.

The

Saturday and

savings

The

deposit

the workman's

the

appeal

drives,

initial

of that week.

pay

with which

company

especially

the

slip is put in the

with

savings system that could

this

the cards

then notified to send representatives to the
plant,
signed up in accordance with the rules of the bank.

are

taken to the bank

drives

opportunity for encouraging saving
stimulated by the war, was too great

campaign,

banks
men

supporters of the savings plan and

regarding it.

which remain in the possession of the
paymaster's office at the plant, being
once a week to have the
weekly deposits entered therein.

Drive-,

the

was

committee,

Loan

enthusiasm
a

After

approved, and the plan launched at the Crornpton & Knowles Loom Works,
where upwards of three thousand are
employed.
brief

the

plan that the management would endorse and urge the men
to support.
Thus, in November, 1919, after several consultations with
sayings bank officials of the city, the details were finally worked out and
some

marked difference in the number of

After

to; thrift was established

successfully adopted in the shops and offices of the

from

was

substitute has been provided for these
effectively of promoting thrift.

the purpose

serve

seemed

the

sons

also

The

lose, and, therefore, an effort
be

war

definite campaign is
staged, the idea is emphasized all over the
Enthusiasm is worked up and we have found, by making compari¬
between plants that have campaigns and those that do not, that there
a

plant.

of.

strongest kind of

generally speaking,

that will

the

to be

the working people themselves.

among

and,

care

Crompton & Knowles Loom Works campaigns for encouraging the
among the men are conducted every three to six
last a couple of days at a time.
This method we have found
much superior to that of
simply leaving the system open continuously.

months and

of thoroughly efficient organizations in all plants for the sale of
Liberty
and War Savings Stamps to the
working people.
So effectively was
Liberty Loan campaigns that
many of the largest shops consistently reported 100% subscriptions on the
part of their employees, and it was rather exceptional to find
any that went
below 90%.
In doing this very successful job, two purposes were served:
country for funds to carry

designates not only the amount he
but also the bank where he desires to have his

opened.

starting of bank accounts

Bonds

the

It consists
essentially in having the men sign cards, author¬
office to deduct regularly so much per week from their pay

On this card, the employee

deducted each week,

account

the work done in connection with the various

and I do not believe that
for very

the

pay

envelopes.

need

that

derstandable.

and main¬

inception in November, 1919.
accomplished was the building

The

feel

wishes

for

at least

long, unless the
management is vitally interested in the success of the
plan and realize fully the views of the management on the
subject.
The Worcester Plan, we
think, is exceedingly simple, flexible and un¬

based upon the operation of that
plan since its
One of the excellent
things that the war

thrift plan will work successfully,

any

men

(

plan which,

can

conditions

named above, which I consider
necessary for the
plan of this sort, the attitude of the management, the fore¬
and the organization of the shop committee are most
important.
The

men,

naturally

arise:

four

of any

attitude of the management is most
consequential,

argument.

collection

Of the
success

equally desirable to have the savings of working people give
in earnings consistent with absolute
safety, and at the same time
the working capital of the country, is also beyond

return

working

is beyond argument.

save,

That

and

foremen

by putting

men

Manager's

signature,

letter in their

emphasizing

the

urging their support of the Thrift

and

workmen

had

and

prepared

pay

envelopes,

importance

were

and

Plan which

about to sub¬

mit.
The

third

unusual

condition,

in regard

importance, because the

men,

getting the

foremen

interested,

being naturally conservative,

are

sure

ask

questions regarding the innovation.

If the

►on

the

features

questions satisfactorily and in

of the

...

plan, and

can

answer

foreman

well

-..

posted

CONVENTION.

BANKERS'

1G8

it, the workman is almost bound to feel
If
account. The General Manager, at his
regular meetings with his foremen, spoke of the plan at intervals several
weeks before it was actually started, and when the campaign was begun
the foremen, as a rule, believed it was an excellent move, particularly for
spirit that shows he believes in
warranted in starting a savings

the men themselves.

future welfare of

the

condition, namely, the organization for introduc¬
this is, of course, something that
the plant, the nature of their or¬
ganization, and the methods that are usually followed in the various plants
for conducting campaigns among the men.
Most plants have committees
of one sort or another, that can undertake this work, augmented by such
special committees as the occasion demands.
For instance, it is highly
desirable that a special committee be appointed, consisting of representa¬
tives of the principal
foreign-speaking peoples in each particular plant.
These men should be called together a sufficient number of times to prop¬
erly instruct them as to the plan in detail and get their support.
This is
of vital consequence in reaching this portion of any factory's employees,
for the reason that English, as written, is not understood by a large num¬
ber and, therefore, the direct appeal of the management, previously re¬
ferred to, may not be understood.
Even the foreman's explanations in
English may not be clearly seen, so, if the matter could be explained to the
foreign-speaking people in their own tongue by their own people, who un¬
derstood it thoroughly and appreciated it, the response is much more likely
it into the plant, would say that
depending upon the size of

would vary

otherwise.

be favorable than

writer is connected,
three months, between 70%
bank depositors. The
plan has recently been extended to other large plants in the city, but these
plants have not as yet had an opportunity to exert the fullest measure
of effort, nor has the response been as favorable as is expected later.
Some
of the plants, after opening the plan with a campaign, have left same open
without stimulating further large numbers of subscriptions by additional
campaigns.
These plants are not making as good progress as two of the
larger plants who are using the campaign method.
The tabulated results of the system to date are as follows in seven plants
Now,

In the plant with which the

to the results:

after three

campaigns, held at intervals of about

and

of the entire

75%

Worcester:

force have become regular

Data

No. De¬
No. of

"■

\ '.

Campaigns

,,Starting.
.

Deposi¬

tors who

have

positors

per

% of

Drop¬

Man

Increased

scribers

Force.

ping

per

Original

Out.

Week.

Deposits.

(Active)

V..

.•

•

No.

Avge.

Sub¬

Number of

Date

Plant.

Plan.

Savings

{Mass.)

Worcester

Reference

Nov. 1919

Mar. 1920

2-approxlmate
every 3 months

July

82 81

how

these retain the savings practice.*
in the above table, no account

many

reported

scribers

4 00

300

3 months

every

1.640

1920

Always open

538

May 1920

Always open

179

Feb.

Always open

160

Mar. 1920

May 1920

1920

2 50

1 51

2 66

2 79

1 65

Very

tew

2-approxlmate
G months

every

Always open

the

with

connection

those that drop the

plan

are

few, indicating that once a man is brought

of saving he is not easily diverted from the

value

of the

realization

represented in this table covering

be noted that of the number of subscrib¬

It will

continuously successful.
ers

experience

plants, it will be seen that the plan gives every indication of being

several

last

The

column

;'v

Our

public schools

fundamentals

in the first place established to distribute the

were

knowledge.

this

From

foundation

welde'd into

developed

have

they

dergarten to college.

complete system from kinAs compared to the scholarship aim, teaching prac-

tical

personal affairs

along scholarship lines, and are
management of

all

and

(of which

habits of saving

are

Bankers
of

that

know

that

cure

can

effected

economists have surely

■chapter tells
are

are

indeed
not

form

one

concerned,

learn

"We

definite

thrift

way

insolvency and

universal

consent

all agreed

how

this

spend

not to

pauperism

and in

us,

deny that it

far

Practice!

doing."

and

new

and each

matter

of fact,

task

effective thrift instruction to

problem at all.

Again, if

Organized practice!
so

real task,

accomplished

the problems

The

you

ma-

simple that it will carry on
We have then

immediate and vital.

that the end is issential—what about the means?

new

re-

permanent

another that the great problems before

through the force and persuasion of its conspicuous merits.
by

the

Drastic measures of

coming generation

from

chinery for teaching school thrift must be

are

program,

improvidence,

been having their innings of late;

great problems before us.

before, but with

children

please,

willful

They also know that the only

teaching the

should

"We learn by doing."

the hands of chance.
The

teaching

without

overburdening

Exactly
our

al-

ready burdened schools?
The

organization of which I am

thrift to children in
further

muddled

study of

1915.

(so

far as

were

part made its first attempts to teach

handicapped by ignorance, which

practical

school

banking

was

concerned)

was

large collection of theoretical volumes and articles setting forth

stupendously alarming figures to prove our national and individual extravagances.

The books told us that thrift was not only an essential personal

practice, but fundamentally important to national progress and prosperity.
We

were

and Went

convinced;

quotations from great
torates that

men

forth with columns of sinister figures and

to convince school authorities, and bank direc-

great problem was before them.

We found them quite will-

ing to agree and in many instances they produced columns of figures even
more

alarming than

our own.

is es¬

that
were

the

employees

saving,

might feel,

if employers knew what their employees
an effect on future wages, on steady

that this might have

employment, etc.
This argument was met by emphasizing to the men
in these days, employers prefer the thrifty employee and that, instead

account working to the disadvantage of an employee,it
much more likely work the other way.
The voluntary increases of
savings

numbers

employees

after the

plan

that,
of a

would

large

had once been established, would

their part that information as
by employers.
not foreign-born employees
subscribe freely to a savings system of this kind.
The experience of Plant
A is, of course, well known to the writer, and we find that, as a general rule,
these people support the plan better than do the English-speaking.
In¬
quiry has been made as to the experience of the other concerns in the same
dirction and they report, quite generally, that while the foreign-born seem
a little hesitant at first, after a
few of their countrymen take accounts and
the value of saving in this manner is demonstrated to them, the others
become very easily interested and once interested they are very glad to
seem

to prove

that there was no feeling on
would be improperly used

their savings

The

remain
In

start.

question may be asked as to whether or

continuous

subscribers.

general, we think that the Worcester Savings Plan has had a good
We are well satisfied with the system of having employees save

We believe, too, that the workmen are
method. It has not been necessary in inaug¬
urating this system for the manufacturers to offer and bonus or additional
interest to the men beyond the regular rate, of interest given by the banks.
The manufacturers, of course, have the clerical expense of looking after
the various accounts, but, realizing the value of thrift to their men, have
gladly undertaken this slight expense.
The savings banks do not take
care
of any of the clerical expense incident to the work at the plants

through the local savings banks.
thoroughly satisfied with this

that the savings banks in any
community should get together and, operating through a joint committee,
try to interest managers of plants in their locality.
Preferably this could
be done by a man who could be employed especially for the purpose.
Ob¬
viously, it is highly desirable to have one approved method in any section
for stimulating saving.
One plan would get better advertising, would be
better known generally, and therefore, much more effective as to results
accomplished than if a number of methods were followed in the various
shops.
If the interest of employers is obtained and that interest mani¬
fested clearly to the employees, and the organization of plant foremen and
shop committees thoroughly imbued with the importance of saving and
the desirability of a simple savings plan for the employees, there would
seem to be no question as to the excellent
results to be accomplished.
It is well worth the effort, not only for the welfare -of the employees
themselves and their families, but through the process there are developed
better citizens of

it would seem to the writer

the community and of the

nation.

Plan.

of the soundness of our diagnosis, but at that time having a poorly
oped remedy, we realized we had tackled a very large animal by a

dovelsmall

section of his ear; when as a matter of fact we needed a ring in his nose,
The temptation here is strong to sermonize a little in the language of those
earlier days. Thrift, we said, means self-restraint—it means ability to pay
off the mortgage on yourself ; it means honest pride in honest achievement,
and pride, too, in the achievement of your neighbor.
Thrift means intelligent interpretation of proportion and straight thinking.
Thrift is es-entially a masculine virtue and a feminine asset.

Do not envy the quality of

neighbor's porch furniture, we cried; and should have added: B^>
thrifty and duplicate it.
Of course we could have delivered this sermon in one
word—prosperity. But we were theorists then, and theory involves a theorem,
It is difficult for my neighbor and me to agree on just the place that
waste leaves off and thrift sets in.
The practice of thrift, like the Golden
Rule, is elastic, and elastic things may be stretched and pulled to glowing and gruesome terms of generality.
In the first place, consider the home. The home is the place the children
come from, and so far as aid to thrift is concerned, it would be well if
some of them never returned.
In our exchange of confidences with children we have heard strange tales of parental persuasion compelling drafts
on juvenile bank accounts.
All children possess a natural saving instinct,
Thrift teaching involves no greater complication than encouragement of
their natural tendencies.
Home influences must be reckoned with—a:d°d
and encouraged where thrift is understood and practiced and vigorously
combated where improvidence rules.
Literature for parental consideration should not extol the advantages of thrift.
It is more effective to
vividly show the results of waste and bad management. On the other hand,
it is folly to urge youth to lay by for a rainy day when youth has special
kinds of fun, especially suited to rainy days.
Propose a new game to the boys and girls of America, and in one form
or another they will ask:
"Do you play it standing up or sitting down?"
Thrift preaching is essentially a sitting-down game, and the several hundred thousand boys and girls I know will have none of it. It is a glaring
error to parade the spectre of poverty, distress and misery before the lively
imagination of children. It is true that a "burnt child dreads the fire,"
but it is maliciously stupid to build fires for the sole purpose of burning
children.
"Do you play it standing up or sitting down?"
The right answer to
your

practice of conservation.

to leave their freedom

not

thrift

the disease temporarily, but the only

assuage

needlessly,

ailment

indifference.

ignorance and

envy,

may

properly

national

our

remedy is the study and
sort

But it would

habits of character formation

once

regulated
made a part of the public school curriculum.
Educators generally
recognize the need of
citizenship,

good

suit

the first requirement is
and where manifest at

only secondary and incidental to the scholarship aim.
that since

seem

has for the most part been feebly directed;

thrift)

namely, the number of increases,

tional Thrift Service, Inc., New York.

President Educa

Stout,

By J. Robert

of the table,

significant as indicating even more strongly than the column
showing the small percentage dropping out, that the men appreciate the
opportunity of saving.
In Plant A, 341, or upwards of 16%, have volun¬
tarily increased the amount of their weekly deposits.
In Plant B, up¬
wards of 20% have voluntarily increased their weekly deposits.
In an¬
other connection, too, these figures are significant.
It was thought at first
pecially

School Savings
1

In the number of sub¬
is, therefore, taken of

th^sc.

themselves.

341

70-75

2.210

3-approximatc

Worcester, only 150,
^

In conclusion,

5,000 subscribers in

approximately 3%, have dropped out, for one reason jor another.
Of
course, this does not take into consideration those originally subscribing,
who have left the companies' employ.
It is impossible to find out exactly
or

regard to the fourth

ing

Of the upwards of

thrift habit.

We were, of course, more firmly convinced

that question is the key, the banking system in the school room is the
lock.
And if the key fits the teacher's key-ring, success is assured.
In
order to make the key fit the ring it is only necessary to play fair with the
teacher.
D

SAVINGS

BANK

Habits

are
pleasant experiences, or emotions, repeated over and over
This is true alike of good and bad habits; vices and virtues.
Ilab-

again.

its become

dividends
I

necessity.

to the

would

walk

not

elderly

very

man

farm in

winding, stony path.

direct from house to

broken.

The

old

His

Ohio.

led

spring, but the habit of sixty

gentleman

had

used the

never

represented.

either

Grant to the

Encampment;

whiskers,

90%

both.

than
A

fashion

boys of '61 had survived for sixty

concrete

play.

set by

Lincoln

one:

not

are

We know that team play

not

provided with steel safes to protect valuables.
teachers

require

cumulative

financial

depositors

present,

are

school
and

room

never

and
to

rewards

all

individuals^

for

Corn-

be tolerated; awards should in all cases

have

groups,
an

rooms,

buildings

sections,

equal chance with all

other

obtaining

lose their

bank books

be negotiable

never

save

you

see-

do not first

pro-

other form of

gusts high school students.
Children love

Item

record and

involve greater inconvenience than

duplicate record.
Sums for deposit should be accepted ii»
A high minimum is fatal, and a restricted maximum dis-

amount.

any

children to

encourage

•

valuable habits formed, the

the

from

best.

saved

sums

aire

motion pictures for thrift teaching

pictures;

Entirely apart

are

assume

by-product of great value to both the depositor and the depository.

responsi-

bookkeeping is not compulsory at the universities and

keep

set of

Some

trained.

are

Item

two:

themselves

are

Teaching thrift is

scientific

and

direction

thriftlessness.

highly specialized part

the

Item

three:

curriculum,

There

requiring

special adaptation to the several grades,

including

problems

Arithmetic

sonal game,

arithmetic

sitting-down

and should

with

conservation

and

game

teachers

are

group of

Seme

of their

money

has

one

said

than

own

in several States

pictures as much

possible.

bankers.

The Federal and State banking laws

are

stand

such,

dollars every/Tuesday morning through

their
their

nation of to-morrow,

Twenty-one

million

pairs

hies and jim-crack nickels
the

has been

ready

six hundred thousand teachers are ready to play

millions of

and

boys and girls

million

Twenty-one

It is not possible to estimate the value to the nation, and especially

to the

of an

enterprise

of little
are

soiled

this with

dividends be-

fists,

clutching lolly-pop

pen-

willing and ready to forego the foibles,

is shown for them to play the game of thrift and play it standing

way

,.v-.v.

Most

keenly alert to the importance of teaching thrift, and to them

are

rooms,

up.

Our experience with several thousand teachers

Use

yond computation in happiness and prosperity.

that

dimes

nation's

part.

they

the

school

other

any

Small wonder that they sometimes count

wage-earners.

dollars.

twenty-one million boys and girls in the public and parochial

to deposit three

poor

four

depository and the teacher

five:

Item

privileged to handle less

are

Item

Thrift is a very perTeachers understand this.

be played standing up.

diplomatically directed.

important

and properly, that the matter of promoting thrift by practice is in the hands

hard job.

The point of contact between the school bank

should

answers

by the privilege to practice.

unsupported

are

schools of the United States.
of

thrift lessons when

is the

Thrift literature for children should press hard on the virtues of good management and wise spending.

inclined

depositors

encouraging

for

ways

outlining plans for earning during vacation periods and after school hours,

high school
Abstract

one

numersous

nor-

teachers

not expect

four-cylinder books.

teachers

Among

the
in

course

schools where teachers

that

the

never

sections

Children

safety.

this record should

bility.
mal

poorest

It is bad business to

play.
In a school savings system the teacher plays the keyposition,
Now, consider the teacher.
rooms

branch banks forty

are

tions.

and

The habits of youth

There is but one way to teach
children—practice, collective practice, and collective practice re-

School

rooms

groups

in
to

Thus the very

team

stone

easily

saved should

sums

be made for regularity of deposits to

wore

graceful functioning of team, units.

thrift to

quires

of team

develops

achievement should

petition in

vide

We in America know the value

spirit

Group

special

was

firm.

prove

means

system,

the veterans

years.

banking

State in the Union

every

By careful count

mustache

school

when both the actual and potential

year,

Convenient practice of thrift is thus provided, for the naturally provident
and the improvident cannot long resist the impulse to join the savers.
.

the occasion of the National G. A. It.
was

successful

times

Three weeks ago I stood at the Circle in Indianapolis and watched several

have received from

—

years

Walk.
thousand veterans of the Civil War march by with halting stride.

suggestions

Finally, consider the boys and girls.
Make your thrift teaching a
standing-up and stimulating game and the children will play to exhaustion.

had long since built.

son

much for the many constructive

owe

them.

Good habits to survive infancy must pay increasing
a

spring house by

concrete

regularly until they become fixed forever.

recently visited

169

SECTION.

emphatically I would

the country.

That's the

say

answer

■'

■"

that the matter is up to the bankers of

and that's all.

The
Budget System in the American Home.
By Alexander C. Robinson, President Peoples Savings & Trust Co.,
The

primary object

make money for its
stockholders through the earnings of the bank and through the facilities
which it offers for promoting the trade and industry of the community.
This is

establishing

bank

every

scheme

new

banker who

without

vision and

been

asked

nomics Departments

understand

and details of such

experiments

test

"will

But

pay."

these

followed

are

you

"Personal and Home Eco-

have

these

lines

excessive wages and reckless extravagance and

evils of great importance, but we must not overlook that large
our population whose incomes have remained stationary, or

confused
no

and

alarmed

living conditions

over

which,

unaided, they

Alike to the family suffering from extravagance and to

control.

the family suffering from the lowered purchasing power of the dollar, both

presentation of the practical working

become centres of bitterness and revolt,

of whom quickly

America must give his best advice and aid.

shall not give much of the detail of the

are

have not risen commensurately with the increased cost of living, and who

conditions.

reasonable degree of freedom from that worry about

We hear much

bition.

modern

meet

briefly speak to

department,

along

fails

proportion of

the

in Banks," and from the standpoint of the banker.

shall be

acid

only this test and looks only for the immediate reaction is

uses

broad

have

the

presented

through "life with

personal finances which first drugs and eventually kills initiative and am-

and legitimate undertaking and the officers and directors
properly use every honorable means for increasing the business
earnings of the institution, and it is their right and duty to apply to
necessary

of the bank

and

Pittsburgh, Pa.

back to normal, and by normal, I mean to a place where a man or woman
who wants a day's work and does it can live decently, save something and

is to

the banker of

If by sheer force of economic

under-

circumstances: lowered wages, lessened employment, depleted savings, or
what not, the average American is forced to a lower standard of living
than he has enjoyed and to which he feels entitled, it will in mo t cases
lead him to conclude that he is in some way being robbed of his just dues

taking that the Banker and his Board of Directors should be convinced of

by grasping capital, and with the air filled with modern incendiary ideas,

certain

the question of readjustment to normal conditions is the most
one before us to-day.

largely to the argument
ment.

conditions,

of the

but

devote

maintaining such

myself
depart-

and over-elaborate it,

argument

that is because I believe it is fundamental

fundamental

institution,

own

for establishing and

shall probably overstate the

to the

success

such

but

obligation to improve them and to

actively promote work to this end.
Even before the

modern social

war

ing of responsibility

the part of

ing wider activities in the
conditions

the

community

arid

The

has

community

This naturally brings the question—what can and should the banker do?
You will all agree that in the present state of affairs, with most of his
Liberty Bonds sold, with living costs still excessive, with inflated war
wages
already somewhat reduced and greater reductions imminent, and
with little to show for his financial debauch, the average American is in
no frame of mind to listen to pleasant generalities about the wisdom of
saving.
The morning after the night before is a poor time for the temperance reformer to call.
What the unfortunate wants is ice water—a spe-

feel-

were

fore-

tlirift

and

corporations alike.

duty and

The

privilege which

pe-

bank whether it brings an immediate financial reward
Savings Bank especially depends on and profits from thrift,

culiarly rest
not.

and the growth

member of

individuals

establishing and encouraging of
or

conditions

every

of social service and improving the general

way

corresponding obligation to promote that thrift which makes

for

contented

for

interest

and

responsible

the

for comfortable

citizens,

maintenance

law

and

order

and

and
the

cific cure for a specific condition.
I believe we are now at a time when
the average American is willing to listen to specific directions for getting
ahead, for I believe he realizes his foolishness in spending all or most of his
big war pay in extravagant living.
It is not always possible for the in¬
dividual to increase his income, but anything which assists him in prudent
and orderly expenditure promotes savings, relieves anxiety and distress and
gives hope for the future.
One of the ways—but not the only way by any
means—to help the present situation is for the banker to teach the average

happy homes,
development of

better moral and social conditions, and so provides the best defense against
the forces of disorder, Socialism and Bolshevism.
An enlightened self-interest alone should lead

promote
the

bank's

whole

brings

banker to assist in all movements tending to

every

respect for law and order and

The

tion.

prosperity

community; to work for

results!

greater

than

future

and

proper

indirect

immediate

development of civiliza-

bound

are

with

prosperity

and deferred profits often

direct

returns

for. effort

American, not how to

save, but how to spend wisely and with forethought,
With this idea in mind, we inaugurated in my institution in Pittsburgh
about a year ago what we called a Home Service Department.
Ours is a

and

expense.
I

glad

happiness

we-are

and

discussing "Home Economics," because the continued

progress

America

depends

family learning to spend wisely.

American

average

large

individual, is the unit of which the Nation and civilization

thing depends
unsettling

the
this

new

are

is most demoralizing.

permit

savings

there

of the

capital.
of

will

American

average

There

the wealthy

inflation

present

Added to these there has been

the rebuilding of
are

many

and the

increase in their individual

American

built. Every-

demands the rebuilding of

devastated world.

Peoples'

long

the

enormous

aggregate.

spendings of the

not

small

secure

average

his income.
All the theories, all the new ideas, all of
for correcting the evila which are in the aftermath of war, are
worth the time to tell them, unless grounded on the basic truth that
a

very

plain duty confronting

us.

That duty is to refinance America

Bank,

which

handled

naturally started to develop

the

Owning also the

commercial business of our
banking business in the

our own

the

names

we were

of and get in touch with those who exhibited

is against the natural grain of human nature.

and contentment are inseparable from thrift, alike in an indifamily and a nation.
As fiscal agents for the country, we bankers

vidual,

the clerk and the

The Peoples' Savings

desire to

live by plan rather than by impulse and to teach them that methodic spendinS resulted in increased comfort and freedom from worry and in time
brought about methodic saving.
Experience developed quickly that there
is good psychology in making the approach from this angle. Saving money

The

equal

have

worker, of

already working. We took up this Home
matter of business and partly as a matter of
obligation to the community in which we are established and in which we
hope to continue to prosper.
The function of this Department was first to

the panaceas

progress

National

field of savings in which
Service work partly as

capital

largely to

of large incomes that

largely of the manual

Peoples' Savings Bank, which it had previously owned.
customers,

wan-

family to which we must look for
more of the average American than

possessors

savings will make

continue

of the class which uses the Savings Bank.

Trust Company, which had previously not done any banking business, confining itself to a large trust business and safe deposit vaults, absorbed the

the education and nurture of the next generation in normal,
prosperous homes.
The war has brought enormous
a mental state of unrest and an
extravagance of all

of capital in the war which

community made
man

factors,

classes which
ton waste

the

reasonably

happy and

reserve

are

not

measure

The family,

important

pleasant thing to

but it
|

save,

It is not for most people

and especially to save steadily and systematically,

is a very pleasant thing for the average individual to talk about

spending.

He has to spend to live; he normally wants pleasures as well as

BANKERS'

170
the bare husks of

his spending keeps pace with

life, and in so many cases

his

CONVENTION.

receiving.

talked with him as well as with her (for 60% of our
about his spending systematically, and we found him

men)

visitors were

lend a willing ear and to accept sug-

nearly always ready to talk himself, to

I said be-

gestions.
We took the family as the basis of our efforts, for, as
fore, the family is the essential unit, and the co-operation of

the entire
family in the spending of the family income is essential to wise and methodical spending.
Realizing that the money spent for actual living of
the average family is handled by the woman of the household, we secured
at the outset a list of 15,000 names of women whom we hoped would be
interested in a budget system and a definite plan for progress.
To these
women

furnish them on

sent literature announcing our willingness to

budget booklet which attempted to mark along
very general lines a wise division of various incomes for variously const!futed families.
We also advertised our Home Department in the street-cars
and in the daily papers.
The response we received to our invitations was
conclusive proof that we had struck the right chord.
In the lobby of our
banking room we established a desk and chairs easy of access in charge of a
very competent woman, who was able to
meet her callers with a wise
sympathy which neither repelled them by any appearance of condescension, or gave only pleasing advice.
She met each one who came in on
the basis of a personal interest in his or her affairs and with no attempt
in these interviews to develop any business for ourselves.
We attempted
to impress the fact that the Peoples' Savings & Trust Co. of Pittsburgh
was big enough and disinterested enough to help really ambitious people
without seeking immediate rewards for itself.
In this we were absolutely |
sincere, and I want to emphasize the fact that sincerity is essential to the
success of
any such department.
If you attempt to sugar-coat personal
personal application,

profit with philanthropy you rarely get a chance to give a second dose of
medicines. The work of the department very quickly expanded from
a discussion
of the budget system into the bringing to our Director all

your

problems, some of which she could solve and
other officers of the bank. The experiences
interesting in their variety.
It was astonishing how

sorts of domestic and business
some

of which she passed on to

Director were

our

in with intimate family troubles, and no one failed to rehelp and advice as was possible.
attention to our department and also to test out

many men came

ceive attention and such

order

attract

necessarily savings in money)
cash prizes for the best one hundred

the interest of the community in savings (not
conducted a prize contest, giving

letters

The response was large, the letters interest-

"One Way I Save."

ing and valuable, so that with the prize-winning letters we made a booklet
general circulation, believing that these examples of thrift coming from
the very class we were trying to reach would be helpful and encouraging,
The results of this were also satisfactory.
for

department broadened and we did not confine

The work of the
to the

ourselves

We printed a booklet called "Bringing the Bank to

budget alone.

The

of the work we were undertaking.

You," which outlined the scope

the book included an up-to-the-minute index of recent

service detailed in

problems and
investments; discussions of allowances to children and contributions of
the wage-earning son and daughter to the home; general instruction in the
little details of opening accounts, making deposits, drawing checks, paying
bills, etc., and, most important of all, personal help with the family budget,
We took a lively interest in various movements for ameliorating the Condition of those deserving help such as publicly advocating an increase in pay for
public school teachers. We mailed newly-married couples a very attractive
booklet for recording the guests at the wedding, presents received, and repeated with tact our offer of assistance in domestic problems, financial
and otherwise.
Representatives were sent to address groups, clubs, labor
organizations, etc., on thrift, carefully omitting any advertising references
magazine articles on home economics; advice as to business

Our Director of the Home Service Department naturally took

to ourselves.

speaking and the demand for her was greater than she

the most of this

We arranged educa-

work was.

could meet, which tells how successful this

instance, a display of

tional exhibits in the lobby of our company, as for

Glacier Park, giving prizes to school children for the best

fine pictures of

Again, with the help of the Republic
of bonds and
certificates, entitling it, "How Your Liberty Bonds Were Made."
exhibits were always crowded with interested spectators.
Again no

essays on

Note

what they had seen.

Co.,

set up an actual printing

of our city, we

Bank
stock
These
direct

advertising of ourselves was allowed.
The

Family Budget, however,

partment
Before

built.

was

and

revise

studied carefully all the available household account

which

particularly

it expedient to

erably not without
was

relation and

found

received and then

Although the budget book

not put where the public could help itself.

was

without at least

confidential

interest

which is

our

few words of explanation, pref-

interview.

With

little tact this inter-

valuable.

Family Budget

recognized the folly of at-

absolutely iron-clad, unbendable

left liberal margins for the unexpected calls on the pocket-book

affair, and

of the average

family.

onstrate the wisdom

Our view in distributing these booklets was to dempreconceived and carefully studied expenditure over

impulsive method of spending which keeps the average family on the

treadmill.
of

always easily handled and it inaugurated the feeling of personal

tempting to make

the

None being quite what we wanted,

being adapted to Pittsburgh prices, we

everything to meet local conditions.

No copy was given away

view

could find.

none

borrow the best features from all that

for free distribution,

was

it radiates all other service.

It is the hub and from

compiling it

books and systems

the idea around which the whole de-

was

Our

people

money,

but

experience showed

were

themselves

not
very

community

our

fact that

unable to do

the
a

really

initiative

so
or

conclusively that
wanted

for the lack of

any

ability to devise

family indicated its desire

a very

spend

for

great number

prudently

and save

definite plan, and had

one,

of their

own.

The

Budget Book was notice

to us that that family was serious minded about the business of getting along in the world and, whether or not they carried out the budget
idea suggested by us, it gave us the opportunity of establishing a friendly

relationship with that family which is proving mutually beneficial. We
learned much, as well as'trying to teach something.
Our work in this connection created a favorable state of mind towards
us on the part of the public, because the thinking element recognized in it
an attempt to make a contribution to the civic progress of our city.
In
checking up the actual results accomplished by our Family Budget, I am
frank to say that a great many families said they found it impossible to
appropriate their earnings as suggested in our book. Others found it extremely practical and helpful and gave us encouraging concrete illustrations of how the idea helped them to live more comfqrtably with less
anxiety and with real financial progress. As said before, we were con¬
cerned chiefly, not with their actual ability or inability to do as we sug, gested, but with their spirit of determination as indicated by their attempt
to do it. We were content to plant the seed, to water it from time to time
with various "follow-ups," and let ultimate results take care of themselves.
,
1
The very fact that we did not make it incumbent on those who called on
us to open an account, put the average person under a sense of obligation
to us for our interest and, following a most natural impulse of reciprocity, a
large number of desirable accounts were opened. Coming unsolicited and
from a feeling of friendship we think they are the best kind of accounts
and we also feel that the largest part of our direct profit is yet to come to
us. We have a large interested and friendly audience for any appeal which
we may make to it at any time and as always our best advertisers and in
places and to people we could never reach ourselves, are our friends,
Taking a wider view, I believe that the quickest way of securing a coraprehensive, economical and well-considered Budget System for our Governmental receipts and expenditures is to demonstrate the wisdom and
efficiency of a budget in the average American home. When the average
voter becomes aware of the advantage of a Budget System for his own use,
he will respond with interest and action to the efforts and appeal for a
National Budget System which is so badly needed,
The expenses involved in this work were charged against the various
departments of our institution in the same proportion that advertising and
general expenses are charged, while, for instance, it is not likely that
the people we were trying to reach would have any trust business at the
present time, we felt that this department would in the long run benefit
by this work and should carry its share of the expense,
Has it paid? As yet in dollars and cents it has not paid, and it may
be that we never can trace direct results commensurate with what we have
spent. But we are well satisfied with what we have done, and believe that
our stockholders will find it in the long run a very profitable investment,
To come back to my original argument—practically every influence in
American business, every art of alluring advertising, with the exception of
the Bond Houses, the Insurance Companies, the Building and Loan Associations and the Banks, are urging spending and appealing to the people
to take the easy and pleasant way of gratifying desires. They are well
within their rights in so doing. The free production and distribution of
commodities is essential to earning the means of livelihood and the growth
of civilization. But there should be some constant counteracting influences
to prevent extravagance and waste and to promote saving. Your average
American is susceptible to influence and suggestion, good or bad. Liberty
Bonds were sold off in undreamed-of quantities, when concentrated effort
was made, and again were promptly resold and millions upon millions of the
proceeds sunk in the wildest kinds of schemes when the fake promoter
rolled up his sleeves and got to work. We have a duty to encourage people
to create, to expend wisely and to save, and we have a duty to protect
against fraud and against waste. It is the easiest thing in the world for
those of us who are used to dealing in units of millions to have our perspective blurred. Unless we can see and understand sympathetically the
way men and women feel and act who finance in terms of five and ten
dollars, we cannot function in our broadest capacity. Meeting as we do
here, we have a common purpose, our aims are similar and we know each
other to be good fellows and absolutely human. But we so far have not
made enough effort to convince the man on the street, in the mill and
factory and on the farm that we are one people. We must convince him in
his own language and according to his own understanding that we have a
common purpose, that each is vital to the success of the other, and that we
are interested in him, not only for what he has, but for what he is or
hopes to be.
We want to weave ourselves and our banks in the warp and
woof of our respective communities, not as a cold corporation, but in the
figure of a human being. This we have been trying to do in Pittsburgh in
our humble way, especially as regards our Savings Department, by making
our Bank a public institution, with everybody welcome all the time, ac
count or no account, willing to give our best services—in short, trying to
put our banking relations with every person who comes to us on a personal basis.
This we believe can be done without relaxing any safe business methods.
Many of you are doubtless doing this much more effectively
and on a larger scale than we have. done and there is abundant testimony
to what the banker is doing all over America for his community without
thought of immediate return, but there is still room for much more than
this. In his reflections on the French Revolution, Edmund Burke remarks
that "confidence is a plant of slow growth." By promoting thrift and energy, by establishing personal relations, by encouraging the legitimate acquisition of vested interests through savings, we are doing our share in
increasing confidence and preventing lawlessness and disorder.
In a
prosperous, saving community, surrounded by increasing numbers who regard us with confidence and as disinterested, we are quite willing to wait
on time for the personal reward of our efforts.

Bank and Home Economics.
The
By Mas.

Perhaps
here

that

other

group

itself has

money

Florence A.

men

knows

value.

Stevens, Home Director, State Chamber of Commerce and Agricultural League.
well

the

group

assembled

banker's close acquaintance with

fully

realize that it is merely the thing designated as the

medium of exchange

in carrying on the world's business and that it is only

it makes

value

him

for

that

which

can

buy.

knows

that

when

right things the family, the State and the Nation prosper.
Because the above statements are almost platitudes banking
to overlook a few facts

it.

The first is

buys the

what others
The second

Nation

can

latter,

and

terrible
men

are

apt

pertinent to this Thrift discussion and their part in

that the greater1 number of men

for themselves.

and women do not think

and

is that thrift

Belgium,

over

They make

They

the Crowd.

begins in the home and without home thrift

the

present

war

hour,

debt, is

recovering

its

example of the

poise after the

telling affirmative.

has the bank

do with

again, especially

bank is the financial

out for them.

France, with its old

prosper.

impact,

"What

They follow examples.
have thought

centre

home thrift?"

in the banks

question asked

serving small communities.

of the community,

and

such has

over

The

distinct

SAVINGS

responsibility for teaching its clients something of the value of money.
Its standing and growth partly depend on knowing the factors affecting
costs, fluctuations in value, and the outside things affecting its purchasing

calls for

power.
This knowledge belongs peculiarly to the bank and must reach the
public through that channel.
Knowing how to secure the greatest return

spondence with

for

ment,

spent

money

filled

thousands

found

many

right

things

is
of

with

has

prosperity

and

living

lasting enjoyment,

for

the

funda¬

profession*

If banks desire increased de¬
of the income and they must teach it to

use

enterprise

boast as many women in its

can

business

home-makingZ

than

ranks

twenty

by one or more members
family.
The bank owes it to the community to give these twenty
an
opportunity to gain at least as much skill in spending money as

million
men

the

control

women

earned

money

Meddling

know banks

that

neigsbors'

our

institution'
man's

one

must

teach

and I

disaster,

to invite

likely

affairs is

above all things,

desire,

authoritative

to avoid that.
But some established,
the' fundamentals of economics and

is uneconomical behavior and must be

extravagance

said, "somebody mu&t pro¬
the impelling motive of self-preservation to the teaching of thrift."
third responsibility the bank must assume, teaching the effect of the

paid by
vide
This

use

other

every

As has been tersely

man.

things

which

have

they have put theory into practice. A few of the larger savings banks
with business ability and home economics training

and

home budgets and problems of home finance were

banks,

individual,

sendee

permanent.

clients

still

banks

\'This

to unite in

conducting

employing

trained

one

woman.

home economics training, practical

household,

the

proved

budget depart¬
making the

under consideration for

■

propose

home economics

and corre¬

The experiment

continues.

adding

must have such qualifications

person

and about 2,500 distributed,

prepared,

were

bank

Eight banks

home and

budget and account books, both for the

and the following plan is now

much

the amount

asking

tact

income, ability to keep a secret, knowledge of banking methods and in¬

vestments,
health.

common

sense,

temper,

even

her food

woman

for when,

help,

seeking

women

tells

from

are

how the

the family.

food I to

mately $500
furnish
three

office

the

say

help

estimated

services

clerk for

one

If the bank happens to be
as

legitimate

trust

expense

department's publicity.

savings

the budget

consultant

expert?

she will spend

bank

each

be made

is found (note that I do not

person

the advertising will probably be handled

what

banks?
and

clerical

room,

she boldly

can

travel will cost each of the eight banks approxi¬
with an added $100 for printing.
The bank will

days per month, and advertising.

company,
for

year,

per

of costs,

the reduction

be done to furnish right value and pleasing

may

When such

and

salary

her

"if";

marketing

to be most valuable to the

her knowledge

expenditure should be reduced twenty-five dollars

month, she must also be able to tell where

abounding

disposition and

affable

that the budget expert should have practical

necessary

very

knowledge of housekeeping, if her services

And

dwelt at some length are the
phases of home economics which a bank should handle, value of money,
wise use of income, economic effect of the use of money.
Do they answer
the question of what a bank has to do with home thrift?
Some bankers are even now convinced that the responsibility is theirs
three

five

need and wisdom of the

money.

These

the

for

and

supposed to have in securing it.

are

show

enrolled

are

million

the

special help

received in

experience

knowing how to spend.

posits they must teach the
What

sudden

truly satisfying things of life.

Saving depends
women.

and this

long empty

have

conditions

standards of spending with intelligence to secure the

healthful

the

Economic

householder.

the

pockets

for

mentals and

vital

171

SECTION.

BANK

What service will she render to the
one day every two weeks as adviser

budget and thrift questions.

All her work will be

con¬

and after the first interview with a caller, further help will be

fidential,

She will train a clerk in each bank to give in¬
inquirers on the other twenty-two banking days of

given by correspondence.

telligent assistance to

she will hold classes for bank employees in budgeting their

the month, and

have employed a woman

income, if requested to do so.

give such advice and help to their women clients as each personally re¬
quested. ' For the smaller banks such a course is prohibitive because of

income

the

savings count, urging the opening of a bank account or the investment of

expense.

in co-operation with the First Federal Reserve Dis¬

Several Maine banks,

trict

and

rather different

The director of the home department of the Chamber of Commerce

plan.
spent

day

one

articles, folders sent to depositors,

bank by newspaper

the

in the bank, telling of the

posters

service which the bank was

new

for

offering, and inviting women to consult her for help in getting more
their

in which the service was offered 527

the five months

money.

the

that

actual savings

can

be made from the

question, she will logically follow with advice as to making the

in safe securities which the bank and the Government have to

money

she will be the bank servant whose duty it is to teach

offer.

money

value, use of income, and economics applied to household financing.

Publicity was given to her

two weeks at each bank.

every

connection with
and

Chamber of Commerce tried

State

the Maine

demonstrated

has

she

When

you

sum

up,

worth $50

month to

bank to demonstrate to the community

your

that the marble walls and bronze grating do not make up the

serve

bank, and that the impersonal composite which the
mind

has

really

heart and

warm

individual home?

If it

is, start

word "bank" calls to

live interest in the welfare of the

home budget department.

Railroad Equipment Obligations.
President of the Rome Savings Bank of Rome, N. Y.

By Samuel II. Beach,
Railroad

Equipment Obligations,

technically designated, having both
in

Car Trust Certificates, as they are

the elements of security and liquidity

high degree, have for years enjoyed the favor of our largest investors
as life insurance companies,
trustees and commercial banking institu¬

such

And

tions.

should likewise have the privilege

fair way to once

billions—since this form

into

runs

banks

it is a significant
equipment obliga¬

of buying them; for

the tremendous amount of issues of railway

fact that in

tions—and

business is in

squarely upon its feet, there is every reason why savings

stand

that the transportation

now

obligation

came

order to

built

order

was

based

the

comes

subject to it.

direct lien on

demands for public service and at the

They have been defined as "a loan of money
specific lot of rolling stock.
They usually rest

property subsequently

V ;

yield

security that would be hampered by promises and

brought into use.
a

Yet this

credit of the corporation using the equipment.

general

all

that

general credit has little to do with determining their investment postion."
Generally speaking, they are stronger than any other corporate security.

cent,

splendid form

There

record

of the

issuance of equipment

early as 1845, when the Schuyki 11 Navigation Company

obligations

arranged to buy

for in part from borrowings.
The company built the
barges, but "the ownership w4s to be vested in three trustees, to be held
as a security for the payment of the loan."
The company built the barges
and transferred them to the trustees and then leased them back to the
barges to be paid

Company.

Navigation
the

Bonds were issued bearing interest and payable in
Almost identically this form of issue is similar

installments.

annual

ten

obligation issued under the so-called Philadelphia Plan.
the use of this interesting form of obliga¬

equipment

Not until 1868 is there record of

there

when

tion

was

created the

Philadelphia; the

Railroad Car Trust of

of which was to furnish equipment to the Lehigh Coal & Naviga¬
Company.
The agreements were so drawn as to overcome a legal

purpose
tion

difficulty

which

existed

"Conditional Sale"
as

serve

the

Pennsylvania

Courts,

not

recognizing

of the moving equipment by the trustee to the road, to

basis

the

obligation as

against

third party.

In other

title to equipment could not be held by a trustee,
"even though the title remained in his name, if he sold the equipment to
the road on the usual installment plan."
As a result, the lease basis was
words,

unquestioned

whereby the trustee holds absolute ownership in the equipment until it

used

has been

entirely paid for by the railroad.

"Philadelphia
ment

This plan is what is called the
form of equip¬

Plan" and constitutes the strongest known

obligation.
Growing Popularity.

The B. & O. Equipment Trust 4V2s of 1927 yield 7%
cent.
On the other hand, B. & O. 1st 4s of 1948 yield 7.44 per cent,
the St. Paul Convertible 4^s of 1932 yield 8.70 per cent.
I give

per

and

these figures
that

simply

basis of comparison, and to make clear the point

obligations yield a rate which conforms to
interest on high grade securities.

equipment

rate

Terms

the

agreement

of the

about

$50,000,000 ; in 1905 they amounted to $200,000,000; in the latter

amounted to $519,000,000, while on September 1st, 1920,
of twenty-two leading railroads amounted to

Equipment Obligations

account

lessee

pays

the

trustee or lessor

tain

the equipment repaired and insured and to replace
destroyed; to place a name plate on the equipment de¬
tlie trustee, so that proper notice will thereby be
given that the railroad is not the legal owner of the car; and that if it
defaults in any
payment it will assemble the equipment at a certain

road

promises to keep

burned

any cars

scribing it as owned by

The trustee agrees that when
bill of sale will be executed for the road con¬

designated point and deliver it to the trustee.
the last installment is paid a

veying to it the title to the rolling stock.
obligation,
of

the

will be

but

lease

basis,

readily

seen

use

of the rolling stock while paying for it. Under

Philadelphia Plan,

generally guarantees
stock

and

delivers

then

Such

the railroad

leasing the equipment

the certificates.

Under the "Conditional Sale"

ment.

Unless the road guarantees the
security is never the credit
itself"
How¬

that "the

merchantable avlue of the rolling stock

the

the road has the

ever,

the

road

obligations

are

basis plan the trustee acquires the rolling

the

based

road

under

directly

Conditional

the credit of

road, with the collateral pledge of the rolling stock.

every

Sale

Agree¬

the issuing
respect this

sound as that issued under the Philadelphia Plan.
obligation is generally not less than 75 per cent, of the value of the
equipment.
Until within a few years, the Pennsylvania Railroad issued
Equipment Notes to the full value of the equipment purchased, and it was
common
practice prior to 1918 to lend as high as 90 per cent, of the
value of equipment purchased.
obligation

just as

The

$888,000,000, of which the New York Central had outstanding $141,000,000.
Railroads were brought to the use of the Equipment Obligation chiefly
on

sufficient money to pay the interest on the obligation and a cer¬
installment on the unpaid portion of the principal sum.
The rail¬

each year

Record

Soundness.

outsanding issues of Equipment Obligations in 1900 amounted to

part of 1914 they
the

the avarage

Trust Agreement.

the railroad

Remarkable
The total

higher than that of 4% per cent.

7 per cent, which is not much

little in

Victory Loan Notes,

Under

interesting to trace the history and foundation of this

investment.

of senior or underlying mortgage securities of similar
iFor example, Penn. Equipment Trust 4^8 yield from 6.02 per

maturities.

History.

that

from

Compared with first mortage bonds, when their strength has been tested,

owned

Yield.

they have been given priority.

It is

auto¬
containing a clause to the
acquired by the road be¬

to avoid such new property

solely

matically passing under some railroad mortgage
effect

Equipment Obligations, because of their high grade, differ evry

previously issued certificates, the railway equipment obliga¬

limitations of
tion

the expanding

meet

time not create a

companies

subordinate

into

Definition.
In

mortgage

In other words, bridges, terminals and branch lines are sometimes

gages.

being, there has never been a loss.

same

loan which otherwise would be required, and in
avoid the "after acquired property clause" in old railroad mort¬

junior

of the investment compared with a rate

the high character

rate because of

the

economy

resulting from

comparatively

low

interest

Although there have been no losses to investors in Equipment Obliga¬
tions, there have been, nevertheless, several temporary lapses in payments;
but these

the
sell

were

exceptional

not to seriously affect the good name of

There is no case recorded where the trustee has had to
equipment to satisfy the obligations in the hands of the in¬

obligations.
the

vestors.

This

remarkable record.

BANKERS'

172
Equipment Notes of the Newly

of the equipment

amendment to the
secured by the National Association of Owners of

Act was

Transportation

securities back of these 7 per cent, notes we
should not lose sight of the fact that the government notes are deferred to
those in the hands of the investors, which become prior lien notes and
In

are

the

this

have been turned

over

corporation is not to operate for profit, what object is
having ownership of the stock?"
The answer

before the large expenditures of

public and quasi-public improvement, before the vast

sions for

economic

tically its only functions, are the
A

Wholly

Securities

Partially Exempt.

surtaxes

24, 1917,

notes are

energetic support.

except inheritance taxes.

of Securities.

some

eighteen billion Liberties and Victories alone.

discriminate between classes of persons

(4) should fall on every individual in accordance with his
or her ability to pay.
We shall see that the exemption of securities causes
the Federal income tax to fail in mose of these important respects.
or

property, and

First, the effect of the exemption

the net yield of a municipal bond

yielding
When the
owner's net

3lA%

income is

there are,

municipals (on June 30, 1913, there

being constantly augmented,

were

$4,193,609,436)

of outstanding

and the number

shown by the following table of flotations

1911

V.'

--.

■

30,000

5.06

5.70

5.80

6.52

7.95

9.09

10.23

11,36

100,000

12.50

13.89

200,000

15.52

17.24

500,000

9.72

11.11
13.79

50,000

7.25

municipal exemption with the actual yield of
individual under the same tax rates. This is indi-

Compare the effect of the

by an
by the following table:

cated

Investment.

Taxable

5M%

4VJ%

income

Net Income Yield.

$5,000

3.904

4.392

4.880

5.368

5.856

3.764

4.235

4.705

5.176

5.616

3.602

4,052

4.503

4.953

5.403

3.265

3.673

4.081

4.489

4.897

3,441

3.785

1915

$492,590,441

20,000

452,113,721

1916

497,403,751

50,000

100,000

—

•

4.43

$324,360,955

1910___

20,000

6.33

5.36

810,000

5.95

5.06

4.76

10,000

1920):

("Bond Buyer," August 21,

4.49

4.17

5.62

Rate of Income on

conservative estimate $4,000,000,000

equivalent to a taxable bond yielding

For¬

tunately most of these will eventually be retired.

and Savings Bank, Chicago.

simple of collection, (3) should not

taxable bonds held

enormity of the problem can be seen when we realize that there are

But

12.071

exemption

exception of municipals they are exempt from State and lo¬

outstanding

now

interest but our hearty

our

5.07

bonds and

to certain amounts.

And with the
taxes

only

not

merits

3.93

April
the first Liberty bonds, the 3% Victory noteR, Federal farm loan
all municipals are totally exempt from the Federal income tax.
Second, third and fourth Liberty bonds, and the 4% Victory
exempt from the normal Federal income tax with additional
Government, territorial and insular bonds issued prior to

The

such high and time'y
co-operation and

having for its object purposes of

corporation

character,

cal

American transportation.

vancement

structure.

from

Corporation which issues these notes is
ii non-profit making and its chief, and prac¬
stabilizing of railroad credit and the ad¬

Service

Railway

organized for public service, it

TrayI/OH, President, First Trust

Governmental political divi¬
Governmental
loans occasioned by the late war, and particularly before the passage of our
present progressive income tax, the question of tax exemption of securi¬
ties was not such an important one, but these conditions, together with the
recent efforts
(some successful and others, happily unsuccessful) to extend
the exemption feature, have made it to-day a very pressing one—a question
not only determinative of our future taxation policy, but vital to our entire
the days

National

The

Tax Exemption
Miavix

government.

■

to this question
is that with the entire voting power of the stock vested in the hands of
the Secretary of the Treasury, it always lies in the power of the govern¬
ment to keep the personnel of the Board of Directors up to a high standard
and thus insure efficent management of the corporation's affairs.
It is eminently fitting and proper that the government should have its
hands upon the steering wheel, because this corporation is entrusted with

of the

direction

there in the gov¬

Equipment

the

safety

They have all the marks of tradi¬
Obligation and bear the sanction and

secured.

than adequately

are

are as sound as the highest grade investment of¬
They bear a good rate of interest, mature serially

They

market.

the

that the element of risk

security so sound and so ample

negligible.

tional

ernment

provide

fered
and

interesting innovations forming a part of the trust agree¬
the notes, add measurably to their strength.
In fact, these

many

behind

notes

alnd the

of no par value

readily be asked: "If the shares are

It might

the hands of investors.

prior lien equipment notes in

ment

are

paid into a sinking fund in thirty

payments and liquidates the debt to the government at the
This sinking fund is held as additional security for

of fifteen years.

These

of no par value and
bodily, in blank, to the Secretary of the Treasury.
equipment corporation

new

the Equipment upon which they

cent, of the value of

per

government's part of the loan is

The

becomes

first lien.

semi-annual

revolving fund.
The

for but

end

into the

examining

become

Commission may
loan to an equipment company, incorporated for the purpose, a portion of
the
$300,000,000 fund which Congress provided to meet the present
equipment emergency.
Such a corporation has already been formed
called The National Railway Service Corporation^ which aims to finance
the purchase, or lease, of equipment for such railroads as, under the Trans¬
portation Act, have sufficient stability to be entitled to loans from the
provides that the Interstate Commerce

amendment

of prior

7 per cent.

lien

lying the loan.
The

constitutes the borrowing margin for the issuance
Equipment Trust Notes offered to the investor.

This

years.

the market
an
entirely new form of railroad equipment obligation, which to all prac¬
tical intents and purposes will be backed by the government of the United
States to the extent of 40 per cent, of the cost of the rolling stock under¬
This amendment will shortly place upon

Securities.

Railroad

The government loans to it 40 per cent, of the purchase price
and takes back deferred lien trust notes payable in fifteen

great power.

Formed National Railway Service Corporation.

hours of the last Congress an important

the closing

CONVENTION.

1912

399,046,083

1917

444,932.848

1913—

408,477,702

1918

202,818.844

1914

445,905,510

1919

4.129

770,195,248

The low
Issues

During this period the number of annual flotations

Committee.

mortgage

made

tax

considered

the

condemn, for

tax

reasons

to be stated in

detail below,

policy of

Loss of revenue,

Escape of taxation by great portion of property,

Destroying the progressive nature of the tax,

Discrimination between

Discrimination

classes—in

ties

against both

eajrned incomes and real estate

investments.

enterprises;

new

VI.

VIII.
IX.
<X.

XI.

the basis

$4,000,000,000 outstanding mu¬

20-year basis of $479,455,200, and on the assumption

on a

held by andividuals with an income of $1,000,000 that the
would be $112,480,000 and a capitalized loss of $1,528,603,200.
estimate of the loss on tax exempt Federal bonds, but it must be

of the slightly increased cost of issuing non-exempt securi¬

excess

their place.

loss

farm

bonds,

the Liberties and Victories will not, of course, be per¬

they will eventually be retired.
to the fact that if the

attention

calls

Putnam

tained

indebtedness

mortgage

there will

$4,000,000,000

out¬

ultimately goes into Federal farm
loss equivalent to that now sus¬

additional

municipals.

Great Portion

of Property Escapes Taxation.

private subsidy; extension of the principle;
The second

Unfair competition, tending to Government monopoly;

great principle of taxation is that all property shall bear its

Discourages thrift;

portion of the tax burden.

Causes

incomes

inflation;

that

Increases the cost of living;

And is not sustained

Mr.

Supports high income tax rates;

XII.

that

are

Increases public ownership;
Grants

VII.

manent, because

loan

Encourages extravagance of Governmental agencies;

they

standing

Discourages investment in

IV.

it is very great

time goes on, as such securities tend to concen¬
in the hands of wealthy investors.

estimates

The great

favor of the rich.

of Revenue.

nicipals the annual loss to the Federal Government, if they were held by in¬
dividuals with an annual income of $50,000, would be $35,280,000, or a

I find

Impedes private] financing;

III.

and

Putnam

vastly in

Violating the ability principle of taxation,

II.

trate

become greater as

annual loss

1.
2.

Loss

showing the distribution of tax exempt securities, but

and must

that

Nullifies the Federal income tax, by

impossible to calculate this loss exactly because of the absence of

capitalized loss

exemption of securities, because it

objections in detail:
1.

data

approximately $4,000,000,000 of

susceptible of ultimately being
exempt by being transferred into Federal farm loan bonds.
potentially

indebtedness

Arguments.

Federal

in¬

4,163 in 1910, to 6,084 in 1919.
this should

with

And

farm

take up the

now

is largely due to the restrictions of the Capital

figure for 1918

creased from

3.097

2.752

We will

their

drive

enormous

matter of fact, enormous surtaxes*on large
the result

amount of

property escapes taxation altogether.

has estimated that nearly 30

Robins

such .securities

by practice abroad.

recipients into tax exempt securities, with

partially

entirely

billions of property invested in

escapes

taxation.

This

figure

was

40% of the total wealth of the country in 1912 exclusive of real estate.
I.

The

first

and

that it tends to

The

the

objection

Income

Tax.

exemption

the tax

Osgood illustrates this tendency of investment by comparing the income
of

securities is

nullify the Federal income tax.

history of taxation in this country has not been a bright

after years

desirable.
more

greatest

Nullifies

of experimenting
It

States.

has been
If the

have

come

one,

but

to the income tax as the most

adopted by the Federal Government and by ten

efficacy of the Federal Act is to be destroyed and the

extension of this form of taxation to other States

by the tax exemption

of certain

securities,

is to be seriously impeded

is time the difficulty was

for

the

primary

function of

instrumentality which

"In

(1) furnish the necessary money
levies it.
Beyond that (2), it should be

tax is to

the

1916

901,983,

and

amount of

total

1917.
was

personal

1917

income reported

$12,077,009,284.

was

income from property, as

profits and the like,

was

for

tax

was

these

distinguished from

$8,349,-

totals

wages,

the

business

$3,861,150,687 in 1916 and $4,469,901,354 in
from bonds, notes and the like

The income comprising interest

$1,080,879,405 in 1916 and $936,715,456 in 1917.

decrease

fially understood and overcome.
The

figures of 1917 with those of 1916 as reported by the U. S. Commissioner
of Internal Revenue:
/'

the

$144,163,949

income

from

in the face

this
a

net

class

increase

investments

This shows

amounting to

in income from property

amounting to $608,750,667."
■=i

SAVINGS
What amount of the diversion went into municipal bonds, of
not

but it is safe to

appear,

that

assume

the

difference

course^ does

the

SECTION.

BANK

figures is

173

yield which municipalities will have to pay—thus, making the danger
acute.

)!'/:■■//.' ;:/C'/'U/ ;^/i/^'/-:'. ^/'■/■

chiefly due to change into that type of securities.
3.

V.
To the

Destroys the Progressive Feature of the Tax../

The

theory of the progressive income tax is that the larger the income,
larger percentage of tax it shall pay.
'■/;t'-:
In practice, the
exemption feature enables persons with large incomes to
escape taxation entirely and the full burden falls on persons who have the
the

smaller

incomes.

Violates

the

Upon this principle the income tax is based.
the

municipalities may obtain money at preferential rates
they going to be stimulated to embark in new and novel undertakings,
of which cannot escape disaster.

By violating the principle

Robins

in actual accordance

credit

makes

tax

If the issuance
chase

afforded

of tax exempt

securities and the opportunity of their

exemption from taxation for all

equal

thing—but such is not the

one

tax

exempt bonds and

the

graduated

features

the

practice, while

case.

anyone

income tax exemption thereon,

secure

the

tax

derived

benefits

pur¬

therefrom

tive

and

are

least

greatest for those of large income.

$3,000

Putnam

income and

gives

person

example

long

person

(under the

old

$3,000

$1,000,000.

The

chase of

The yearly saving which each could make through the pur¬

spectively.

tax

If the

exempt bond would be $1.00,

bond

same

$11.30, and $3.5.15

re¬

subject to taxation the net yield after

were

paying income taxes would be 4.90%, 3.90% and

1.48% respectively.

initial

States

Supreme

this

business,

Rate

income of
married

Total

person

lax.

Tax

on$l,000

5% bond
required exemption maturing

rate

of non¬

taxable

bonds.

securities

income:

without

on$l ,000

tax

whole

exemption

value of

dependent

(annual 20 years
loss to
(,Present
Federal
value of

yield
5%.

children.

Govern¬

total

%
60

3,000

2.00

4.90

5.10

8.30

4.58

13.50

4.32

5.45
5.78

22.06

3.90

6.41

35.03

50.50

3.25
2.47

64.60

1.77

14.12

32.30

402.52

70.30

1.48

16.83

35.15

438.03

There is another aspect of

financial—and

that

must

itself

social.

bad—at

foster

17.51

creates

discriminatory

distinctions—it

legislation

draws

which

comparisons—it

does

and

ture

the burden of taxation

have to be

borne

by capital active in busi¬

Thus

"earned"

is professional

Thus

income

discriminated

induced

real estate

bears

Note this:

It is apparent

from

drawn

business

from

than its

cessive surtaxes
the

that

fact

and

tax

place for the

retire

"unearned."

in favor of income from

from

business

and

the

does

not

get sufficient

net

return

This is undoubtedly due primarily to the ex¬

the

profits

excess

but is

tax,

exempt securities offer

also

safe and

VII.

obvious

resting-

the unfair

all anxious to

are

avoid!

guished

financing of

from

We have

seen

what

line

endeavor

consequent avoidance of the
it

not

for

VIII.

exemption.

railway

comes

into the market for capital

but is

met

with

interest rate often all out of proportion to its ability to

We have

the

public utility

or a

which

difficulty

substantial

be laid

can

tax

years,

exempt securities,

Thus

pay.

they must shoulder

this

exemption

monopoly.

established

enterprises?

business, how much
And

perhaps

this

The

among

speculations is bad.

their

for tax

price

must

our

business fearlessness,

Whatever

tion.

hampers

stacles in the way of

and

invention,

trying out

new

/■
it

must

prevail to

serious

than

has had

our

power

discourages
a

that

true

IV.
cannot

The

tax

withdrawal

(Federal, State
to secure money

unnecessary

The

open

invention

initiative

and

heavy hand

doubt

that

the

fact

that

adop¬

puts

ob¬

American

this

of the

the

Public officials

high income tax

are

the

tax

investor.

higher rate* which private capital has had to

Cost of

investment

the resulting price of

Supports High

exemptions

were

XII.
In

England

the

Living.

funds

from

private

enterprise to

the finished artile.

Tax

Income

abolished

that

Rates.

large

income

Not

incomes bore their

Practiced Abroad.

Government

from

securities

Mr.

issued

was

oversubscribed.

Kingman

Nott

Robins

■

Rochester

follows:

/■/\/y

summarized

'■/,'/;/_.
his

Tax

exemption of public
is

taxes

securities is inexpedient,

furthermore, that tax exemption of quasi-public
and

effect

subsidy to

amount

in that the

borrowing rate
or

;

Government

and,
spon¬

special class in the community,

subsidy which costs the Government much

than the

greater than the advantage

sored issues is in

argument

and

policy of exemption has been abolished and the recent issue

exemption

loss

before

is taxable except to non-residents.

war

In Canada the

loss of taxes

saving in interest to the beneficiaries of the Gov¬

ernment.

and

■

words, tax exemption is inexpedient in Government issues,
costly form of subsidy to quasi-Government issues.

Tax

exemption, by transferring the tax burden from the holders

tax

exempt securities to others in the community, violates the prin¬
in accordance with 'ability to pay.' Tax exemption,
therefore, is not only inexpedient—it is also unjust and uneconomic.

ciple of taxing
"3.

Tax

exemption, by rendering immune from taxation those who

Governmental

taxation
leads to

taxing

combined with

tax

exemp¬

the

graduated in¬

Exemption from

class1 in the

community inevitably
exemption for others, and thus the whole foundation of the
one

is progressively undermined.
subsidy of tax exemption of Government and quasi-Govern¬
enterprises puts private enterprise at a disadvantage in compe¬
system

and

tends

Government
and

borrowings of

The

tition,
agency

have to pay the heaviest taxes under

tax, nullifies the working of the income tax.

"4.

probably tend to still further increase the price and decrease the

small

just share of the tax burden, the entire scale of rates could be reduced.

aid

to
and

bureaucratic

destroy
leads

individual

inevitably

dominance

which

initiative,
a

must

forces

degree of
react

reliance

state

harmfully

socialism
on

the

country.

only human beings after all.

rate

in¬

Inflation.

Increases

large

XI.

ment

local) is enabled, by the tax exempt feature of its bonds,
at below the going rate, tends to lead it into
extravagant and

expenditures.

exempt securities and the consequent difficulty of private enterprise to
capital, with attendant high interest notes, increases the cost of

our

continuance

will

Whatever encourages sound in¬

obtain

the

Encourages Extravagance of Governmental Agencies.
be

means.

marked influence in the period of inflation through which

business.

purchasers

find quick

of small

have been passing.

come

past has largely depended

things lays

ultimately be¬

put this great mass of investments—the safest in

the. market—out of the reach

pay

shall

exempt securities from wealthy investors has

would otherwise

initiative,

is granted

good.

demand

creased

meet

can

persons

vestment

subsidy

line of business which

rife and promoters

other.
The economic success of America in the

this

same

Discourages Thrift in Persons of Small Means.

Whatever facilitates

Discourages Investment in New Enterprises.

If this is true of

discourage new

life?

economic

"In other

and while not all of

portion of the blame.
III.

without

highly speculative securities

and initiative hampered and retarded.

only too much of this in recent

seen

demands

to pro¬

It is inevitable, therefore, that each

To-day the gambling spirit is

"1.

come from a non-exempt security
in the eyes of the large investor and his
former.
As a result, when a private firm or

one

only finds a diminished available supply,

is private enterprise

tion

Governmental

come

enterprise

enterprise in the

receives the benefit of this

agency.

large return must

compete with a tax exempt

corporation,

Governmental

any

business and

our

Summary.

Perhaps the next greatest objection to the tax exemption of securities is
difficulty which it has put in the path of private financing as distin¬

the

circumstances

this situation

rather than by the creation of tax

manner

private

competition of

during the

"single tax"

particular

certain Federal assistance.

Unfair Competition; Government Monopoly.

that

influenced by

attractive

step toward

under

reasons

better to meet

far-reaching dangers to

II. Impedes Private Financings.

direct

some

and

reason

practical

not much

actual

manufacture and

money.

result

income

share.

argued that security exemption is

estate—a

is it

lay not so much
application of this principle to the particular situation, but
the dangerous precedent thereby established.

without
.

create

everywhere that much capital is being with¬

because

justify the business risk.

the

in favor of

against

income discriminated against

Active capital

property.

There will always be, from time to time, certain

particular

by professional income and by real estate.

ness,

etc.

The danger of the tax exemption of the farm loan bonds

is attracted into tax exempt securities just

partly

and additional series of objections even

new

IX.

that capital

of the

only

exempt securities, which undermine the theory of our entire taxation struc¬

314.66

fortunate—and in these days of unrest it

for

218.21

25.25

notes), there

extension

essence

application of the principle and the possible extension thereof

subsidy in

140.82

7.69

10.10

Discrimination Against Earned Incomes and Real
Property.

real

51.72
81.87

in their

are

and

the

direction was the tax exemption of the Federal
the constitutionality of which is now before the United

discontent.

To the extent

far

1.00
4.15

6.57
11.30

this which is worth nothing besides the purely

the

separates the rich from the not
to

$
12.46

830

1,000,000

tends

2,630
11,030
35.030
101,030
323,030
703,030

10,000
20,000
50,000
100,000
200,000
500,000

but

by numerous attempts to give to other enterprises
and some almost purely private the benefit of
Witness the efforts to extend it to the obligation of export

which

vide this

eral Gov¬

it,

former.

This is inevitable—but

loss

ernment)

condemn

functions which

deemed to require for purely

to Fed¬

ment).

mercantile marine* building loans,

interests
are

tax

interest

that the great danger lies.

Net yield Net yield

limited to obligations strictly Gov¬

was

quasi-Governmental

Present

Net

most effec¬

Court.

exemption.

value of
Annual

says,

This has been followed
some

It is in this

gives the following table:

privilege

step in this

loan bonds,

farm

of 22.06% if his income is $50,000, and of 70.30% if his income

;

objections

vital than the

rates): A married

This, he

State and municipal bonds

quasi-Governmental raises

this

Danger in Private Subsidy.

principle to business and

income.

$30,000

corre¬

receive

can

for public ownership and public aid

private enterprise.

(i.e., Government,

sufficient

income

the exemption feature

ernmental

not

without dependent children is subject to a tax of 2% if his income

person

moderate

tax exempt| bond by

with

follows

That is to say, there is

sponding benefit between the purchase of
with

those

for

2% to

pay

encouragement of state socialism.

were

all classes, but

equally to

accrue

results

VI.

buy

may

the real

agency

of Governmental instrumentalities

fye

account of

deceived

are

borrowers—that from the fact that they

is to strengthen the demand

with disastrous

it would

classes

argument that the public

having this privi¬
lege is better managed and in better credit standing; that inasmuch as only
the obligations

'//

in Favor of the Rich.

the

exempt

3% less interest the conclusion is reached that the

the result
Discriminates Between Classes,

to believe that this

vestors.

tax

It is too much

tendency will not be fostered by the keen demand for such securities by in¬

must fail.
/-/./'//yy/ yj- 1 ///.■.:.:/
:/y ,:y/..'/..'/ //'■■ y/
By the operation of the exemption of securities the wealthy class—upon
which the great burden of taxation should fall—is enabled by purchase of

these securities not only to escape a payment which is
with their ability, but to escape payment altogether.

Ownership.

extent that

To the extent that
are

Ability Principle of Taxation.

■

Public

private enterprise is hampered in obtaining necessary
capital by the competition of tax exempt securities, to the same extent is
there a tendency for more and more enterprises to be driven into public
ownership in order to obtain a similar advantage.

many
4.

Increases

"5.

The

that

5% tax exempt security will yield as much
to a wealthy capitalist as a business enterprise
paying 12%
17%, discourages the investment of capital in new enterprise."

net return
to

fact

Bank—An Efficient Follow-up Program.

Industrial Savings

New Business Department, The Depositors' Savings & Trust Co., Arkon, Ohio.

Raymond Roop, Manager,

By Earnest

check on the 28th of the same month and found total subsequent deposits
of $3,136.20. Without question the above is conclusive proof that it does

subject assigned to me is one of vital importance to every banker of

The

this country,
orial

CONVENTION.

BANKERS'

174

and

it largely hinges the success or failure of our Indus-

upon

We are all more or less familiar with the many

Savings Program.

pay any

plants of the country which have for their purpose the encourag-

industrial

savings accounts among the industrial

securing of

and the

ing of thrift

There is

workers.

has been operated

plan which

the Banks
System—but the question
which you are asking, is—does it pay, what is the financial result to the
institutions which we represent?
This question is a legitimate one, for any
I therefore conclude that it is not a question—Should

savings.

America

sane

man

the

Operate

woman

knows

Industrial

that

Savings

bank,

any

other

must

institution,

the
handling of Savings Accounts in the bank. Mr. Tinsley has very ably pointed
out how the plan works from the employers' and employees' viewpoint, and
since the Savings Banks of America must face the task of developing to
the fullest possible extent the savings power of the industrial workers, it
is of vital importance that the banks evidence a personal jjnd individual
interest in the depositor which can only be obtained by that personal touch
which we term the psychology of banking.
You are thinking now that,
speaking of the financial results, I want to call your attention to

when

the

once

reaches

account

bank

the

regular routine of the institution.

agree

is taken

care

through the

the power of the message. One typist is able to operate a battery of three
machines, producing the amount of work which would require six ordinary
typists. The result of this new but effective method has indeed been amazing, and had we time could mention many personal incidents resulting from
the personal contact with friends of the institution.

with you that this is quite so,

however, experience has taught us should we stop it at this point it

would in

fatal to your savings program and, indeed, it is my honest

many cases prove

opinion that the regular business coming to the savings department has suffered

severely because

About

that

two

large

years

of the lack

of an

efficient and effective follow-up

dormant or soon
after closed out—I fully realize that the number which are closed out depends on local conditions—however, I still maintain that a careful investigation of the records of the Savings Departments (and the same can be
applied to Commercial Accounts) will reveal considerable loss to the institution through dormant accounts and accounts lost resulting from the lack
of that personal touch so much needed in dealing with the human element
in

Does Industrial Savings PayT

the writer was brought face to face with the fact

ago

cent of savings accounts coming to the bank, either directly

per

through Industrial Savings Plan, immediately became

tendency in many of our banking institutions to use

is some physical variation in the typography they do not get their minds to
the point of attention to the mental argument which is presented. Thereforewe discontinued the use of process letters and all letters were written by
hand, which method proved entirely too slow, not to say anything about
the expense.
At this time the writer was privileged to visit the sales room of an automatic typewriter which was operated on the order of a player piano, and
types personal letters in quantities, which would require several typists; insuring at the same time more uniform and better work, thus enabling the
banker to eliminate the fill-in process letter, which usually detracts from

make money.
In

great

process or

industrial

general manager, should convince every banker here of the ethics of

printed form letters which no doubt have more or less merit;
while many represent a sheer waste of money. Indeed, such letters betray
on their very face the hackneyed form letter which loses most of its force
because of its appearance and impersonal subject matter. The writer has
been in a position to put this to an actual test and for several months conducted follow-up system by the use of multigraphed form letters and have
yet to discover any tangible results. We concluded that this lack of interest
was accounted for by what psychologists call "adaptation," and unless their

by The Crompton & Knowles Loom
Works, the details of which have been so well presented by Mr. J. F. Tinsley,
The

bank to maintain that personal and human contact which after all
1
'.
'
1
'
L

is sound business ethics.

plans which have been worked out by many banking institutions and large

Without taking the time to present figures to prove that industrial sav¬
ings does pay, we feel safe in saying that such accounts are just as valuable
to the bank as those which are opened at the window and through such a
program the banker is enabled to bring the service of the institution directly
to the employee; however, we feel we cannot emphasize too much the fact
that when once an employee has opened an account with the bank it is of
vital importance that the first impression or incentive be maintained, and
we know of no better way than by the of the personal letter program,

banking.

•

conclusion.

Having charge of the New Business Department, the writer made a valuable

I check

In summarizing the results, we would have you note well the following:

daily) and found many accounts which, after the initial deposit, were
The reason for this is a psychological one, the first impression

Industrial Savings for the purpose of encouraging thrift and accumumoney for investment has been promoted and is being operated by
many large industrial plants throughout the country.
(2) That Savings
Banks of America must face the task of developing to the fullest possible

discovery

made

when

(which

checking back on savings accounts

dormant.
or

incentive for saving

became

clear

whereupon

accounts which

These

has, for

and

selected
were

one

were

from

the

reason or

face

list

with

dormant

very

grave

accounts

problem

twenty-three

opened during the months of January and February.

twenty-three accounts amounted to $163.80, with

posit of $7.12.

This fact

another, been lost.

face

average

de-

For six months, namely, from March to August, inclusive,

personal appeal
to each depositor would not only have the effect of building up good-will,
but show each person that personal and individual attention which creates
no

subsequent deposits had been made.

confidence

benefit
our

and
am

intensifies the personal

We decided that

interest of the depositor.

giving you the result of this follow-up program.

first check

these twenty-three accounts

For

your

We made

September 15th and

second

(1)

lating

extent the saving power of the industrial workers.
tively and

efficiently meet this task

it will be

(3) In order to effec-

necessary

that the banks

evidence a personal and individual interest in the depositor which can only

be obtained by a human touch.

(4) By actual figures Industrial Savings,
(5)
Ethically, Industrial Savings Accounts is the
est existing means of preventing strikes, for the workman who saves his money is very seldom found
in the company of the agitator.
Industrial Savings enables the employee tc<
when carefully and systematically followed up, is an asset to any bank.

own

his

country.

own

home, make investments and thus increase the capital of the

SAVINGS

Committee
jfcfj'.V '

'v.'

:;j"

;

Address^of

SECTION.

The

President S. Fred Strong.
Washington, D. C., October,

To quot

current writer

the subject of thrift:

do not have
capital, we cannot have progress, for we

wherewith

emphasizes

make

well

needs be met.

improvements

the

need

thrift,

savings in

mean

should have

existing facilities."

through

savings

only

facilities

of Federal taxation.

both to

needs and to

our

extent,

the

looked

needs

the

fill

the

for

people

extension

and

There

capital

the
are

extension

Consequently there
be

placed

never

before

was

the

considerable

the

functions

Not

the

Many

type of

by keen

ment

politicians.

financing the city with demand deposits.
be regarded

not

may

favorably

are

and being taken
have

been

know that

the past

$60,000

deficit to be paid from taxes.
more

less

kindred

plans

before

are

Congress,

the

and

recent

proposal to greatly extend the postal savings system must be studied closely.

•

Safety—the First Requisite.

wider" educational

work

the

nature

the

typical

savings

account, and the essentials of sound banking as they pertain thereto,
bank

its

serve

if the

function in promoting and facilitating thrift,

proper

saving and safe investment by

wage

and

earners

of number of

given

this

the

fully

savings banker is and does and what

convinced that

appreciated

even

duty

our

and

duty is plainly tp>

encourage

do it free of selfish

motives;

also

every

of small

persons

income.

this regard.

which will promote

privilege will be to lead, if

our

the

reflect

the

■v;

functions

conclusion,

cussed,

the

bank

accumulation of

account

increased

means

amount

the

but opposing all

Section

standing

your

the

Association

ends—to

equal

opportunity

The result of

this

recommendation

our
on

association

the

The report of this committee

personnel.

is in

the

savings banking.

facilities

linking

and

experience of

facilities, and

Work

the

is but

substantial

during the past
The

problems

many

difficult.

them

devoted

has

was

Americanization and

Public and

represented

are

hands.

your

The

its

valuable service functions shall

occasion

delayed

program

benefit

the

conducted wide

highly of the
the

some

secretary

correspondence,

before the

entire

association,

by the administration.

and zeal

energy

section.

Much

and

the

yet

membership

may

which Mr. Woodworth
his

work

well merits

been

has

suitable

for

recognition

the

been

were

the

year

required to decide
which

ters

past

administrative

ings Bank Section.

Both

requests

The

so.

and Trust
We

natural
looked
in

our

Bankers' Associa¬

associates

decided

that

the

work.

and

principles

by others, but also with

supervision

the

view

our

for the National

There

presented

were

Bank

to the

broad way,

sound banking

Section

State

Bank

only be¬

not

should not be

published

the

national

through
bankers,

our

plans for establishing and operating their savings

ence

our

over¬

efforts

concise

and

Statistics

the

departments, refer¬

year

country

Various

brings

efforts

increasing

have

books print tables of

banking for the last

been

number of requests for
made

provided

the Trans¬

which the

for

bankers

savings

purchasing increased amounts

are

reasonable

continued

purchases

such

tendency

bonds

this

depreciation during the war period.

market

should

have

savings banks has been

compile

it,

data

and

this

reputable

savings

much

discussed

entered

the

fair

concensus

amortization

which

that

deducting

show

the

that

amortized

rather than

bookkeeping

method

the

only

daily
can

determine, however, in these days of heavy depreciation in

price of capital

too

of their

many

in their bond values

reflected in the

bonds which

income basis,

is due to the
or

the fact

originally considered first-class

were

of questionable value.

now

are

would

income.

values whether the depreciation

increased

that

opinion

methods

Connecticut, New York, and possibly other

column

securities

its true

several

discount for such period.

asset

and

In order to avoid the constant changes which

operations, there

the

value

board

of trustees must always be sure that the present
day depositor
fair division of the bank earnings; they would, however, be justified
dividing a larger percentage of their current earnings when the depre¬

gets

ciation of their bond investments is due to
insufficient

be declared
the

security.

high

the

price of
extra

money

dividendLs

rather than
should

not

high grade of the investments and

sufficiency of the surplus accounts.

Third,
which
the

to the investment of savings funds in foreign public securities,

permitted to

are

This

limited degree in

few states,

available

such

believe that

not

the

savings

funds

only

the fact that

from

bring their
of

the

expenses

banks

soon

European

countries

within their current

needed

for

generally

revenues,

domestic

but

purposes

housing and transportation.

propose

unusual

Fifth,
most

far

concerned.

results

find it difficult to
the

present tendency is away from such investments

banks

one

Unusually

unless justified by both the

bonds might be

what purports to be the statistics of

century.

savings bankers

seek legislation.

Fourth,

of Savings.

The unquestioned need for accurate statistics on the savings bank business

the

interested.

are

recommend

mutual

determine

under

form,

being made to statutes.

type.

the

market
bank

questions of savings banking and

l>est

resump¬

to the basis for rate making

Their market position shows a

ratio of premium

states

view to avoiding any form of duplication

was

matter

of re-

group

most direct relation to the stability of the under¬

that

effect to

values

the

the Sav¬

as to methods.
section had not made

precedent might later have applied

greater information

desire

Company Sections.

therefore
of

cause

same

have

copies of forms and suggestions

adequate^ reply it would have remained
do

actives

entirely legitimate and if

were

section

section and the National Bank Section

our

daily receipt of requests for
These

this

presented by members of the American
as

rapid and

bring down the book value from period to period by adding

market

officers

the propriety of handling all savings bank mat¬

regardless of their affiliation

tion,

Banks should

Savings Bank Functions.
During

the

witnessed

noisy but small

Commission,

Commerce

We commend the movement in

into the work

put

and

arrive.

cannot speak too

has
the

strengthen.

from

daily

our

them

already showing the benefit of the

are

in which we

bonds.

result

various, ' far

almost

reaching,

even

predicted

was

Second, the discussion of values which should be used in determining the

be in

of these questions and tendencies

placing

than

informed

are

railway

may

deep study and

never

period.

war

to note the past year has

long fight, has

lying securities

states

opportunity of

STRONG, President.

Investments.

The provision in that Act

the Interstate

made

were

FRED

management of the properties

private

assets

many

Committee

First, railroad securities

of the Office.

opportunity to

presented

the A. B.

Respectfully,

readjustment following the

proper
progress

with the work of the section in the New York office.

year,

Association,

adequate facilities

constructionists.

touch,

pleasure and

urge

of the^Committee on Investments to discuss but a few of
problems which relate to securities and security values which are inci¬

time

Savings Bank

It is the purpose

its facilities.

been

the

general committees with

Savings Bank, New Haven.

Report of

has

welfare,

common

Gentlemen:

which it is seeking to execute has for its purpose the education of the
public in the value of the bank to the public, and the desirability of utilizing

rights—co¬

property

the

and privilege of the Savings Bank

to the end that its -very

Treasurer Conn.

section

bring about the

(the title has since been changed to the Committee
and all sections of

and

advancing

capital and to increase interest in

by the President of the Committee

Thrift)

work.

our

follows:

constructively

the

all

work

section,

tion

Private

may' better

Summary.

■

reach their best and highest development.

dental to

the

two

revision of the

that they

growing importance of the American Bankers'

section

this

committees,

■

and

recommend

for

cov¬

efforts to inject socialism and sovietism.

offer

with

This is

one, as now.

by-laws, which is printed

cooperate with all types of banking institutions for the develop¬

That

that

form of organi¬

our

activities and perhaps greatly facilitate

ment of thrift and the promotion of
3.

section's

it should be deemed the duty

That

system

heartily

operating

portation Act.

Thrift

the

participate collectively and individually for the conservation

to any

tendency toward Socialism.

The

course.

I would summarize the several matters which I have dis¬

American

property ownership, thereby stabilizing conditions and providing a check to
the appointment

sav¬

well be slightly enlarged by including

may

to which I have referred,

That

we grasp our

brought to the attention of the administration the value of promoting in¬
terest

during

,AO--'rv>'

the

the Council

statistics

our

scope

Our

Attempted Solution.

Spring Meeting of

I have submitted to your Executive Committee

and

thrift and

opportunities.
An

and amount

savers

legitimate investment is.

privileges

our

means

con¬

6 of your program.

page

the savings bankers of America, have not

we,

with

ordinary comparisons.

subject

attention to two matters relating to

proposed amendment to the

Second,

the peoples' savings and for
promotion of questionable enterprises by the lure of the improbable—if not
impossible—returns was never greater. All the people must be instructed in
I

made

The many schemes for securing a portion of

what

both all statistics

are

committee work.

for

Section to

Although it has been thoroughly established that safety is the primary,
interest return the secondary, consideration in the operation of a sav¬
ings bank, the current experiences in the city of Boston offer a new argu¬
for

approximation of

even

ex-officio members four ex-presidents instead of

and

ment

be proved by

can

First, the executive committee

advo¬

But St. Paul's experi¬

when it

year's operations not only wiped out the surplus, but resulted in a
Other

comparisons

Organization.

special clien¬

private bankers

savings banks

municipal

The mat¬

swings, that

way

develop instructive data in due

I would call your

ered

our

by enthusiastic reformers

Even

indi¬

estimates

of extravagance, which is freely acknowledged,

average

have

past year should

■

accordingly.
seriously

very

capita

per

which

names

plans for developing government agencies

new

cated for

work shall be evident and that

our

be protected

being advocated
up

that

obligations of

.;.V.

only is this important with the urgent need for capital, but to the

end that

our recent orgy

our

attention

must be

necessary

and

the savings banker.

tele shall

spite of

housing and the
This condition ac¬

equipment.

real

such

available.

now

increased

for

time when it was

all

for

are

and the amount of their

and. many unwarranted

ings to be far greater than

zation

public

bases

which

difficulties in the

many

savers

questionable

believe

in the economic life of the
country.

there

are

number if

schedule

the important place which the savings banker occupies

now

the reports

ditions in smaller and poorer countries.

the practice of thrift,

through

many,

analysis of the

are

subject

without material results.

accumu¬

present

our

practice thrift in proportion

unsurpassed opportunities, yet to

our

needs

railroads

just

greatly curtailed by

believe that

the

correspondence with the Comptroller of the
Currency and with the National Association of State Superintendents, but

means

can

superficial

inadequate

been

has

ter

statement

broad sense—not only the small

been
not

savings of the
to

centuates

has

I do

"If

This

lations of the many, but the
surplus income of the well-to-do.
The amount of capital available from surplus moneys for

much-needed

1920.

most

how

cates

Gentlemen:

175

Officers' Reports—Savings Bank Section

and

Annual

BANK

era

that

certain

classes

the

ago

menace

progress

seasoned

public

utility

However, this is probably not the time to

Another

should be of inestimable value in

substantial

year

probqble

safely bought.

legislation permitting their purchase.
the tax

the

movement

year or

determining

exempt

securities.

two in this

line of safety.
We

inaugurated

to stem the flood of tax exemptions which

were

can

this

report

section

then threat-

BANKERS'

170
ened.

The

demand from many interests for special
the appeal by the so-called real estate
strong.
However, the general opinion at

financing and

especially

been

has

interests

Washington

led

taxes

war

in their

treatment

CONVENTION.

appears

against any new exemptions

strongly

very

run

securities.

for

ihe past

Within

York

tax

income

Feal estate mortgage interests made a deincome from mortgages from New
the expectation that it would greatly increase the

month the

Our section office took the liberty
exemption feature had a
prominent place in the program advocated by the legislative committee on
housing.
However, the special session followed the example of the regular
session of last winter in striking this one provision from the program for
of their appeal to Congress.

strength
of

York movement as the

this New

opposing

pfoved acceptable for enactment.

legislation which otherwise
We

issues under present
exemption laws as well as from new classes of exempts.
Aside from the
imperative need of eliminating all obstacles to the reasonable financing of
industry and commerce, we make the special point that exemptions will
only perpetuate the harmful rates of taxation with which every business man
to protect the securities market from new

their guard

than narrowed.

The tax base must be broadened rather

is familiar.

to be one most susceptible of im¬
expenditures, we urge that a

Finally, as our tax problem appears

attention

through

provement

public

special effort %e made both by savings bankers as such and through their
contacts with the small savers of the nation, to demand that public finance

required of individuals.
Although we believe that the wave of sentiment for nationalization has
subsided in this country much more rapidly than has been the case in
Europe, we believe that there should be large retrenchment in projects for
public construction and investigation.
This is no time for adding to the
functions of our Federal Government either by way of establishing new
Federal activities or by the thoroughly vicious plan of Federal aid to the
shall

degree

the-same

show

that

economy

States.

there is

Chairman.

Throckmorton,

I).

basis

ment

Our

this

costs to

Committee

Amortization

begs

Loans

Mortgage

report

have been unable to continue the very active
campaign of last year.
The only item of publicity was an article on
"Improved Methods of Mortgage Finance" which appeared in the Journal
of our Association for January and which was printed in substantially the
same form in a considerable number
of newspapers arid both banking and
with work that

gested

real estate periodicals throughout

This

the

observation of such securities appears to have
by the results of every effort to establish limited dividend

directly

attempt,
of

class

drawn,

second mortgages

indirectly, to extend savings bank service to
the great majority of our depositors is

which

people from

assistance equal¬

prompted by the very laudable desire to render

was

lower cost and without the

ing that of the building association, but at our

greater liability, and under the professional standards of savings b inkers.
I think that we would all be very glad to accomplish any such purpose, but
these

the

indicates

institutions

respective
field.

this

be financed through
strength of the savings bank

difference in interest rates at which homes can

the very

associations in the State of
had their greatest development in
size and activities, they are both reducing the term of mortgages to usual
bank terms and are charging substantial fees or commissions.
is reported

Furthermore,

the loan

that

organizations

such

where

Ohio,

have

might submit that the alleged competition between the

savings banks

and we condemn
the result of the activities

building associations is more apparent than real,

and the

exaggeration which this subject received as

certain branches of government. Fed¬
officials even published an elaborate report on *'Economies of the

propaganda which issued from

report being to magnify

Industries"—-the whole tenor of that

Construction

the building association and to

Not only

were

disparage that of the savings

the facts and arguments inaccurate, but it made no
large proportion of cases that as soon as the

basis, it is paid off by a

mortgage is paid down to a proper banking
the savings bank.

from

loan

III.

■

which are common
knowledge to bankers, we urge that the savings bankers take a def nite
stand against every effort to force them to assume the burden and risk of
the inflation which is known to exist in building costs at the present time.
Without

dwelling

length

greater

matters

upon

than judg¬

spite of the clamor by persons who seek with more zeal

the re ief of
housing, we believe that there are sound principles of banking which we
are under obligation to observe
even though we receive no thanks therefor
ment

until

the country.

will not restore con¬

levels.

pre-war

;V"
to

the greater cost of

view

mention of the fact that in

been so con¬

in its work, although the office of the section has

progress

time

experience with and

been confirmed

Amortization.

be placed on a sound invest¬
building and the

such mortgages can

that

corporations for the purpose of purchasing or stabilizing
as an aid to
increased activity in housing I construction.

new

of Committee

such securities will continue to be undesirable.

opinion that
assume

certainty that even deflation of the nation's currency

first

Report

;

assisting purchasers of small homes,

with the special view to

We refuse to

bank.

J. Muktagh.

Lonuyear,

ir.

here

development of second mortgage investments as a supplement

loans

the function of

E. Brock,

Geo.

Pulleyn,

lines

amortization which was reported at the Fall

of the

are

eral

Lehsner,

Traylor,

Melvin

Your

uniform course

pamphlet

the

to bank

and

Washjfj

similar

in a certain sense, and, sc
of action being followed."

the

Respectfully submitted,

along

being in prepartion, will receive further attention as we have

struction

that the savings bankers as well as all others interested in a
sound conditions in finance and industry shall be constantly on

work

are

opportunity.

urge

return

book

The

Meeting

banks

other

Of course, we are all feeling our way

I know,

obtain exemption of

effort to

term hied

understand

Cleveland.
far

appropriate

the

resources

our

institutions

for

inevitable time of stress and contraction in credits upon

enter the

has made great strides during the past
year, as all leading interests appreciate the absolute necessity for reducing
their loans to a safe basis during this period of inflation.
They are re¬
quiring that the payments as well as the loans shall be measured in de¬

which

preciated

government subsidy

The

principle

amortization

currency.

that

felt

therefore

campaign

any

the nature of

time would have more

amortization

further

this

attempt to obtain credit for things

accomplished than for actually contributing any public service.
Within
uniform

the

Cleveland

banks

amortization.

Both

year

scale of

their real

placed
because

loans on a
of the accom¬

estate

the nature

which usually must be
overcome, I quote at length from a recent report from Mr. H. G. Robinson,
Vice-President of the Guardian Savings & Trust Company of Cleveland, and
plishment

and

indication

difficulties

member of the committee in charge,

last

"Early
the

inauguration of

however, early in
"First, that it

the

agreeable to starting

committee were

months

which

institutions

various

the

some

several

and

movement

consumed

were

committee

conference

represented

Februray, agreed to

agreeable

were

two propositions:

"Second, that the

amortization should not

rates

less than 4

"Some
were

promise

the

committe

to subscribe

all agreed

upon

land.

The

much

"Since

putting
land

Association

discussion

proceed at

and,

last

adopted the report
far

the

fall

Company,'

Trust

Garfield

are

aiming for

are

per

rate.
a

cent,

and some

way

minimum.

Federal

"We

with

for

of real property,

and their

limitations
of

the

reduce

the

and

r".:.ri;

were

reconstruction
we

believe

urge

not

cjnly the desirability but the need for prompt report to the
section

the

save

the

for

borrowers

mortgages.

have

development in the local application

every

Respectfully submitted.
J.

John

Wm.

P. J. Slach,

Chairman.

Pulleyn,

Saul,
A.

Dinkins,

,Tas.

Nelson,

Goodell.

E. B.

been

The Cleve¬

new

Report

Committee

for the

purpose

the part of the bor¬

especial work

of putting

the

proposition

We have adopted this plan rather

some

bankers

savings

the Fall,

in the past

systematically.

period, in
are

our

money nowadays to
other customers that those who

when they needed money should now

Second,

wish

cooperate,

during

possible to encourage thrift and
good turn when we require
of reducing their obligations.
In only rare
every

from

purpose

year

will have practically all of

the amortization basis.

our

the

January

the

Members

has

endeavored

for

select

considerable list

referred to

this committee at

of the committee

frank interchange of ideas as to what topics should

the result

was

general approval of his tentative suggestion

following:

First,
land

19th the chairman wrote to the members

for

Members—Real

19J9, meeting.

selected, and

the

values

methods
and

their

and

Third,

the

rules

for

appraisals,

coupled

with

study

tendencies.

which

ject of thrift and savings
of

of
.

savings banks the

includes for

general sub¬

propaganda.

subject of checking privileges

accompanying question

savings accounts,

with

the

service charges as a preventive of abuse of that

privilege.

way

doing all borrowers a

Service

Mortgages.

of the topics of larger or more immediate importance to

asking them

much better and accepts it

in authority explans to him just why

Committee

Your

little objection

Service

Estate

loans.

cent, reduction each year on principal^ and,

very

it is only fair to

the

present

amortization.

Before

discussing the

has become acute

above topics

wish to mention

matter which

Real

Estate Mortgages.

especially savings ba- k have been subjected to
large amount of criticism by those who assume that here is a "reservoir

Lending institutions and

real estate

during the present year under a g neral heading of
Nero

exceptions does this argument fail so we are extremely hopeful that by the
of

loans for reasons

of this committee last year.

set forth at length in the report

Second, advertising,

loans

that

blight of paternalism be p'aced upon any

worthy but smaller element in the mortgage

attention to the subject of amortization of mortgage

early in January of this year started

their

per

Bank

Guardian
new

A borrower gets your idea

accommodated

their

that the

varieties of

the member banks are to

is, first, that there is not. enough

argument

larger part in the financing

that they should be encouraged
for their legal

reason

Every member of the Savings Bank Section should be urged to give con¬

of com¬

letter and arbitrarily telling them that they must consent

this

them

time

some

round and that
been

of the

increased, rather that they be censured

rather than

many

field?

doing this.

"Our
go

Bank

in all of their

gracefully when some

opposition to

resources

by the local associations.

does it not stand to

facilities

the committee without very

all of

to them for amortizing loans.

writing

are

have

end

communities served

If it should be found that banks must take a

beginning to call in all borrowers who have had loans run¬

such reductions.

meeting with

also

are

squarely

much

artificial increase in the credit

bureaucracy and

That is, 1

toward entering into a contract of this sort.

rowers

than

I know,

I understand,

provide for amortization

ning

amortization clause

far,

cent, rate as

per

the merits of the so-called Calder-Nolan bill for the estab¬
Loan Banks, and commend the associations oL New

Home

the work.

once on

"We
so

for

8 per cent.

to an

anxious

were

rank

building associations,

cent, per quarters as all of our interest is payable quarterly in Cleve¬

per

governments

state

Jersey for placing their opposition upon the broad ground of

secretary

willing

even

lishment

per

per annum.

and

We should continue to oppose all efforts to obtain

grade.

it upon

favor of

which

cent,

mortgages

tinued

desirable to amortize real estate loans, and

was

Federal

the

through tax exemption for any plan of rediseounting
on the ground that it is a mere
pyramiding of "frozen" liabilities and would merely be a means of in¬
flating real estate values and establish a most dangerous precedent.
We note that even the building associations are far from unanimous in
the

The committee,

sort of plan to amortize .loans.

any

before

activities

propaganda and interests of lending institutions which

furthering the

whose

companies,

trust

Not all of the members of the
a

the

members consist of the large
appointed a committee for
practical plan for amortizing real estate

Association,

our

preparing

purpose

loans.

such

fall

savings banks arid

the

lower than bank

various

follows:

already entering.

are

condemn

•

downtown

SAVINGS
of

capital which is available for loans

sumptions
of

made

are

sound

now

being offered.

the

securities.

These

as¬

not familiar with the requirements

are

any exact
position of the banks in relation to loans which are

actual

They make much

mortgage loans to total
of need, but

estate

banking, neither do they couple their criticism with

data

general

who

persons

real

BANK

resources

they do not

of the fact that the

many

proportion. of

security.

It is the

consensus

much to

sound

opinion

savings bankers that they

among

are

doing

relieve the

housing situation as is possible from the viewpoint
and under their legal restrictions.
In fact, it can be

banking,
safely stated as a general rule that the savings banks are operating much
more
normally in this respect than is any other source of mortgage funds.
They deplore the short-sighted efforts of even public officials to attack their
motives and

methods

and

to suggest

legal enactments which would be dis¬

astrous in their

operation, rather than to facilitate the collection of savings
principal source of relief.
We note a tendency of legislators to

into this
turn

to the public subsidy of minor
plished by legislation in New York.

It should be made
deavored to find
a

basis of

new

larger number of loans

struction

agencies

record that

construction.

because of the lack of

under

the

appraisal which

sound

make

for

the quality of

prevail to-day.
which

that

There is

unreal,

and

the

section.

service

the greater

by those who refer to the red flag
This should not

subject

action.

discourage

our

rule

con¬

can

would

may

article in

"For

the current issue of

that it will

the

select

make it flow

"Yield

prove

and

various

channels and

readiest

amount

legislation will

security

interests

distinctly selfish

We submit this

"If

interest

complicated

our

for building,

rental

social

which

structure

foreign countries.

present legal limit?

presented

third

our

tendency to

cover

twice

even

whereas it

cent,

per

within

loans

both

supply

three

ments
out

repeatedly,

effect upon

effort

recent

and

years

accounts,
is

in institutions where it has

even

been

subject worthy of discussion, although

Regarding
New

offer

where

the

dozen

other

by this committee if
more

from

banks

For

affiliated with

insance,

our

topie not

one

Topics.

topics

time

the office

included

permitted, all

staff

other

and

own

which valuable work might be

facilities and

less attention

because

of them

list,

although

naturally

and

surance

bankers,

a combination of in¬
However this scheme may appeal to savings

savings accounts.
understand that

annual

meeting that it

the

was

not

was

consensus

opinion

your

plicate their work with insurance
are

or other possible novelties.
banks in the country which have offered the plan or

many

Our

office

touch

with

insurance

the

various

call

the

profiteer

will

defeat

As Mr.

conditions

which

been

has

Company,

"recently

pointed

prevail

only

Chairman.

Biddulph;
Noel.

„

Betz»
Obermayer.

John

their

the

which

from

hands

the

owners,

with

out that

management of such property largely taken

removed

City

will

not

the

Report of Committee
on

Brand,

Kirby.

Federal

Legislation.

Federal Legislation

begs to report that it has kept a
close watch on legislative matters at
Washington, both through the office
correspondence with Congressional leaders as well as with those who have

which

inform

the

are

invest in mortgage

same

now

any

plan which accomplishes nothing.
of

and

England.

degree
differ

this

verdictwe

We believe that

the

We
have

real estate

even

other,

warn

ample

it is the

changed

by public ownership.
hand, and

owners on one

thoroughly vicious
that it is thoroughly de¬
a

three

the

lines of

evidence from

work selected

the

The

your

committee

last

Real

has

not

had

opportunity to formulate

very

interesting

tax

phases

assessors

and

secretary

have

resulted

from

received

very

are

the

valuation

calling attention

little attention

the

much

of depreciation charges and has developed

material.

new

that the results of this study will be

We hope

sive

experience of our secretary along
Advertising

and

Ways

means

for

that line.

Savings

for furnishing material

for making a stronger

you

least

suggestive

some

means

study

by the members of your committee and no little attention by the secretary.
Possibly this particular item of service to members will be of

direct

members, especially the smaller banks,
than any other direct service thus far undertaken.
The method of furnishing this service is not without its difficulties be¬
benefit

cause

our

available.
in

any

way

However,
much

large proportion of

our

general desire to avoid duplication of service which is already
our opinion, that we should

Furthermore, it is not desirable, in

compete with

with

active

promoting the

is expected that the office will be

use

Strong
on

outline

for which

finally passed.

of practical methods of

obtaining

made

Committee

having

been

the

was

of the

Act,

Mr.

the

Federal

have

Transportation

Owners

although

Beach when

the

ap¬

representative

member

especially contended

legislative developments.

our

Administrative

of Railroad Securities, we

It is unnecessary to detain

it is worthy of

note

that

the

incorporated in the bill

were

Copies of this Act will be supplied by
Legislation

Tax

secretary.

our

Opposed.

exemption of securities having been

condemned

resolutions

both

by the Savings Bank Section and by the Administrative Committee of the
we have strongly opposed all bills intended

American Bankers' Association,
to

subsidize lenders

establish

Federal

Urban

Specific

real

estate

Home

securities

Loan

Mortgage

Exemption

follows

Banks

Interest

—-

10518

II.

8080

"...

Farm

Loan

representations

1409

_„H.

Bank

Mortgage

Building Loan Act

We have made
abolish

joint stock land banks, to

Board__.__

2492

It,

.II.

6815

various bills intended respectively to
the tax exemption from bonds of

remove

joint stock land banks, to strike out all provisions for tax exemption in the
Federal

Farm

Loan

Act, to authorize Federal farm

loans

through agents in

localities not served by a National Farm Loan
Association, or various other
bills relating to the management and
development of the Federal Farm
Loan System.

(a)
Our

duty

exemption

securities

based

tjie

our

allowing

system

the

our

persons

of taxation

of wealth

largely withdrawing from
with

securities

the

employment.
so-called

incomes

intimate

market.

representing the great mass of

protect

source

Tax Exemption.

opposition

limitations

The

cannot

take refuge

incomes

exemption establishes

afford,

who
the

invest

conditions

deem

our

and small investors to

breaking down through

in tax exempt investments and
conservative

then

would

suffer

industry,
in

the

comparison

unearned!

inevitable result
investment

persons

wage earners

the capitalization of

Earned

knowledge of

Furthermore,

incomes against

Tax exemption at the present time must of
for each

their

the advertising agencies.

during the coming year it

Congressional

fully informed

points

and

appeal for savings deposits has received

maintained

and

Approved.

Committee of the National Association of
were

favored

Deposits.

the

President

definite contribution to

question of valuation of real estate, especially by reason of the exten¬

have

'our

have, actively supported

Building Loans Through

Commission, and the well known problems

have

this study which

our

outline of such question¬

appraisers for mortgage loans

study of valuation and especially

even

but

Counsel

the Cummins-Esch Bill.

before

peared

Federal

collected,

More lately the operation of the Federal income tax has stimulated

past.

the

been

desire to submit to the members.

developments

work of the Interstate Commerce
of

Appraisals.
has

tentative reports as we may

naires and

Some

Estate

material

General

consistently advocated the points

section.

considerable amount of

only bill which

Act, known

experience

winter, I have to report as follows:

the

section which are considering mat*'
We will give but a brief summary,
mentioning first the bills favored, and then the bills opposed.

duty of the bankers to assist the

public in avoiding the unfortunate housing conditions of that country.
Returning

with

ters, which involve Federal legislation.

ac¬

The underlying laws of

and they cannot be

war

system of subsidy,

impose hardships

taxpayers' subsidy to them

structive

that

Conditions will

to housing.

before the

desired information.

contact

co-operated with other committees of

difficult

believe that savings bankers should be prompt
measures which will not further the public

important situation
the

The inclination to
offer

which

Legislation

even

securities with

by their depositors.

by legislative enactment, by
to

it is the value

public against

welfare in this

economics

tendency exists to make it

demanded

cording to localities, but
to

and

which constitutes the security for loans."

bankers

savings

safety

control

by the state and

over

impossible for appraisers to

fix any intelligent values on such properties and, of course,
that

re¬

Kahn has pointed

passed

business

can

Satterlee.

Louis

Your Committee

legislation

Longyeau,

Jos.

the capitalist more according to the net
its capital fund rather than to the effect on

critical

offering a
insurance

Members

Howard

treat

recent

jeopardize the invest¬

either

making

Legislative Committee of the American Bankers' Association, and

find

there

giving

Respectfully submitted,
W.

are

for

savings contract or for
charges the object of systematic but voluntary saving.
ceive specific information by
writing to our secretary.

times the

loans

schemes

and

Life

therefore

com¬

But
are

constant

the

desirable for savings bankers to

bills

for

special interest to this committee, is that of offering

introduced

of the property

re¬

special inquiry

sections.

this

the

that

recom¬

""'

Other

done

believe

only modify the rights of private property beyond anything contemplated
by American constitutions, President Charles A. Peabody, of the Mutual
Insurance

any

appre¬

definite

mendations.

upon

wealth."

especially

the

York,

allowed.

C. J.

security of the capitalist.

should

man

curb

the country and

the individual

the

the mortgage

fully

topic of checking privileges and service charges, we note
and more restrict the checking privilege on savings

substantially modified

was

and administrative policies

laws

security, our

ends

own

name

limited by what the borrower can afford to pay.
"As

the

over

study, although

Yet in New York the interst rate for mortage loans is

bank

commercial

idea for further

Checking Privileges.
As to

the

Capital flows

why maintain arbitrary checks

income* will

arbitrarily restricted to 6
for

important

view any such plan with
misgivings—but, granting the desirability of such joint effort, is it
to apportion the cost
according to either the gross savings
deposits or the estimated net benefits from the campaign?

combination

determined by bids from all the

are

luxuries—and also from all

when

rates

render

can

feasible

not

the two factors which determine the amount of

are

housing.

is needed

money

office

some

where the yield is best in proportion to the risk assumed.
.

the

it serious consideration.

yield, the rates of interest

necessities and

that

ciate that the mutual banks in certain cities will

last

uphill.

capital to flow into
"As

official Journal:

our

thing, it is not generally enough realized that capital is liquid—

one

appear

bank.

one

the alter¬

attention to the

to be our province to preserve so much free play
possible for the economic laws of supply and demand.
To quote from
as

believed

we urge the
incoming administration to
provide an advertising sendee which will at least be
adequate for that
large number of banks which cannot afford to employ exclusive service.
We would make the further
suggestion that the group or community
plan of advertising for savings deposits appears to have its
advantages in
many cities.
It can embody forceful appeals for public conduct which

quire

lack

also

bankers very

by bankers in these times

called destructive criticism

general

balance sheets and directorates that

depreciation which must result from much present day

native for

It
our

depending

con¬

struction.
It is unfortunate that much of the talk

savings accounts, and it will be important that
of members shall harmonize with the general politices of

desire to carry the message of thrift and saving
the generalities of the old "rainy day" argument.
So much valuable space and
money is still being wasted on advertising

without

properly refuse to finance either the inflation in costs and builders' profits
or

177

numerous

advertising

the

en¬

appear

new

accom¬

bankers have

All of those efforts

standard

which

conditions

will

has already been

the savings

appraisal which would enable them to take

upon new

have failed

matter

larger and

has decreased in this time

cases

if they realize, that the savings banks in

say, even

in the market for mortgage loans which offer the usual elements

are

SECTION.

from

would

either

tax exempts

tion—the high grade

necessity defeat its

precedent for

be that

highly

persons

chain of

small

speculative

which offer them

new

own

ends—

exemptions.

income must select

securities

profit for

which

they

the exemp¬

taxable securities being driven from the market.

BANKERS'

178

CONVENTION.

available at the section's office for any person
the study which it deserves.
Owing to an attempt to force through the New York State Legislature
a
bill to exempt part or perhaps all of the taxpayers' holdings of real
estate mortages from the state income tax on the plea that although the
state rates were unimportant the action would strengthen the hands of
those urging similar Federal legislation, as noted above, we were success¬
ful in bringing our position before the state legislature by various com¬
munications.
In this we cooperated with an influential body known as
the State Conference of Mayors and other City Officials, also with the
New York State Tax Association.*
(b) New Federal Credit

Institutions.

establishing a Federal ay8!®®® of personal
credit associations for fanners which have been proposed, probably the
latest and most elaborate of these is the Owen-McFadden bill to create a
rural credit society and general insurance league.
Before this last bill
was introduced in the House,
Representative McFadden submitted the bill
and accompanying argument, to which our secretary gave much study and
pointed out the objections to its many idealistic and probably un-American
features.
None of this legislation has made any progress and we are not
disposed to take the proposals seriously.
Various proposals are made from time to time with reference to the
Postal Savings Act in which we have a direct interest, as for instance H. R.
1114, making it the duty of the trustees to loan from the postal savings
fund upon school district bonds direct, without the intervention of any
bank but upon application of any school district in the United States.
Aside from the impractical features of such bills, we believe that this one
in particular is wrong in principle for two reasons :
First, it would estab¬
variety of projects for

and with increases in
such
fund. by making the
government a larger factor in savings banking.
This indicates our second
objection, which is that it would tend to increase the interference by gov¬
ernment with local banking interests and with the financial affairs of.
lish

precedent for other like preferential financing
list it might become necessary to enlarge the

individual citizens—thus
The

recent

otherwise

promoting paternalism.

suggestion of a New York lawyer to increase the
stimulate the postal savings system, has received

concrete proposal, although it
favorable mention in the report of the U. S. Senate

will doubtless receive

Committee on

rate and
our close

form in any

It has not yet taken

attention.

Reconstruction Problems.

Federal Aid.

(c)

which this section and perhaps the American
Bankers' Association is interested as largely, although perhaps not so im¬
mediately as in the case of bills carrying tax exemption, includes all those
which depend for their effect upon a grant of Federal aid to states.
This
subject was discussed in an article by our secretary on "Federal Aid vs.
Budget Control," and the distribution of reprints of that article among
Another class

of bills in

bankers and economists,

Congress,

members

has resulted in much new

thought on the subject.
Thus, our Association and all business interests are unanimous as to
the need of a scientific budget system in order to reduce the burden rest¬

Few appear to have

ing upon taxpayers.

realized that all possible benefits

destroyed by the adoption of Federal Aid methods.
In the first place, they pre-suppore the development of a Federal bureau¬
cracy on such lines that appropriations must inevitably increase, quite re¬
gardless of benefits received.
The distribution of the Federal funds would
directly develop such political support in states and communities as to
destroy all prospects for legislative check, and at the same time offer no
assurance of efficiency.
Of equal importance is the fact that the offer of
Federal aid would make it practically impossible for any state to refuse to
comply with the Federal conditions and this regardless of the actual needs
in the locality.
In other words, the Federal plan would make it impossible
for the states to determine the amount of some of the largest items in their
budget control are

from

own

budgets.

committee to make a recommenda¬
tion of this kind, but we would express the opinion that bankers should
make a definite and active fight against all forms of Federal aid to states,
to localities and to individuals, except as may be required to meet national
the province of this

It is not within

before Congress which carries this Federal
aid and indirect effort at nationalization to ari extreme.
We refer to the
Smith-Towner bill to establish a U. S. Department of Education with main¬
tenance
appropriation of $500,000, but also an annual appropritian of
$100,000,000 to be disbursed by the Secretary of the Department through a
system of Federal aid to the states on such special projects as partial pay¬
ment of teachers' salaries, improvement of teachers and normal training,
Furthermore, there is one bill

for

scholarships

providing

"talented

young

native born illiterates, and for

people,"

supervising instruc¬

classifications of

advised

Segregation of Savings Departments.

that

segregation

to be pro¬

their wi-h that state

shall not come under
contemplate their removal from that field
they reincorporate as nation banks.
This subject will be presented by the Committee on State Legislation, but
we will need your instruction.
Respectfully submitted,
and

regulations

which

when

can

See

Financial
Into

Sadd,

Chairman,

Stephenson,

Saul,
Knox,

James

II. Manning,

Melvin A. Traylor,
V. A. Lersner,

Finance," Leo Day Woodworth, Journal of Ameri¬
Association, October, 1920, which has been reprinted for dis¬

"Housing

Bankers'

tribution

request.

Chronicle,

The New York circular was
September 27, 1920 ; also see

Housing," the Street,

follows:

mutual savings

States

having

States

authorizing capitalized

banks.
banks for savings only, with restricted

investments.

deposits, by whomsoever received, shall
invested, and held for the sole protection of the

requiring that savings

States

segregated, especially

savings depositor.
4, .States which permit, either
cial banks and trust

expressly or by failure to prohibit, commer¬
savings deposits, without requiring

companies to accept

specially invested.
necessity for adequate savings fund legislation

that the same be segregated or

needs no argument, but
campaign to stimulate the savings habit,
your committee deems it particularly appropriate at this time that bankers
should see to it that every institution authorized to receive the savings of
the common people should be subject to such legislation as will insure for
such sayings the Highest measure of safety.
If the bankers themselves do
net correctly solve this problem it will be done by others less competent
The

in view of the

present nation-wide

friendly to existing interests.
most casual examination of

and less

state legislation on this subject
majority of state such, legislation is
grossly inadequate or altogether lacking. • Some of the facts re;
vealed by the survey were little less than startling.
For example, we find
that the great state of Illinois has no legislation whatever in regard to
savings banks or in regard to savings deposits in commercial banks and
trust companies.
The same is true in at least ten other states. The in¬
dustrial state of Ohio, with literally armies of wage earners, neither has
any general law for the organization of mutual savings banks, nor appar¬
ently does the savings depositor in a bank doing both a commercial and
savings business have a prior claim on the savings assets.
In fact, by
virtue of not being entitled to his deposit on demand, he Is in reality a
deferred creditor.
This may explain a fact reported some years ago, that
in a certain manufacturing centre in Ohio there were seventeen savings
the

Even

the great

that

fact

the

reveals

either

the other hand,

our

California, enacted about ten years ago one of the most
thorough and practical banking codes in the entire country.
undoubtedly an important contributing factor in the enor¬

namely,

state,

scientific,
This

fact

growth

mous

that

bank 1
investigation reveals that a comparatively new

and only one savings

and loan associations

deposits in that state.
Authorities there claim
law, they have attracted from hiding places
and $400,000,000.
When last reported, savings

savings

direct result of this

$300,000,000

between

increasing at the rate of $800,000 a day! *
who have savings accounts aver¬
approximately $700, or nearly $350 per capita of the state's entire
in that state were

deposits
There

1,650,000 persons in that state

are

aging

population.
Diversity of state legislation, lamentable though
of stimulating a comparative

at least has the virtue

it be in many respect-,
study of the subject, and

by so doing brings to the fore the best features incorporated in the law of
each state.
This is what actually happened in California—the present

Departmental Banking Law of that state having been drafted only after
a careful examination and comparison of the laws of all the other states.
As

preliminary to a thorough

basis

study of the savings fund legisla

problem throughout the nation, your

committee addressed to the bank

the several states a comprehensive questionnaire touch
ing the salient features of savings bank legislation.
From the information
thus obtained, supplemented by a personal examination of the laws of each
superintendents of

state,

general classifications as described

four

Mutual savings

Ohio
Rhode

Connecticut

Minnesota

Delaware

New

Indiana

New Jersey

Maine

New

Maryland

Pennsylvania

the

all

eighteen states:

Massachusetts

California

above.

Mutual Savings Banks States.
banks are in operation in the following

Class 1:

The states are

prepared the following data.

committee has

your

treated

above

states

Washington
West

York

banks

such

Island

Vermont

Hampshire

Virginia

Wisconsin
may

organized under

general

Connecticut, New Hampshire and Ohio," where
they are specially chartered, and in Ohio, at least, all future savingbanks must be incorporated under the general banking law requiring a
Delaware,

except in

laws,

stock

capital

each

case.

California,

practical matter,

should

savings bank state, in view of the provision
law that "any savings bank organized without capital stock must
reserve fund of at least $1,000,000."
As a matter of fact, there is

its

have

of savings departments is

posed by the building interests, in connection with
hanks now authorized to loan on real estate security

laws

the states,

{d)
are

of protection of

hardly be classed as a mutual

agement and patronage.

the compre¬

savings deposits submitted by
the Law Committee of the Savings Bank' Section, American Bankers' Asso¬
ciation, in 1910 ; also of the Digest of State Banking Statutes, compiled
and published by the National Monetary Commission in 1910.
It was
decided to bring the studies covered by those two reports down to date.
Accordingly, your committee addressed a questionnaire to the head of the
Banking Department of each state in the Union, and we are pleased to report
that replies vrere received from every one of the states.
In order that you may have a clear understanding of the savings fund
legislative problem in this country, your committee has made four general

objections exist to the various

majority of the states have already

;

Committee, Savings Bank Section, he3d

The committee made a study pf

to collet the facts.

necessary

that the propriety of such

so-called land settlement projects, the
mentioned above being proved by the fact that
made appropriations to qualify for the
Federal grant before the Federal bill has passed either House of Con¬
gress and only as the result of propaganda and even more direct effort by
the executive official who sponsored the proposal and would have its man¬

York City,

hensive report on the subject

teaching English to immigrant illit¬

proof of the fiscal objections

November 18, 1919, the Committee on State Legislation
requested to consider legislation for the protection of savings deposits
the so-called 'non-mutual' states."
To carry out this request, it became

system of the United States.
Like

•

"was

legislation should be brought
before state bankers' associations—as we believe that the bill represents
an
effort not only to federalize, j but to sovietize the entire educational
We suggest

erates.

State Legislation.
'

Convention:

of the Executive

the meeting

in New

tive

emergencies.

tion of

Gentlemen of the

give the subject

will

Of the

Report of the Committee on

publications are

Various

who

September 27, 1920.

reprinted in full in
"On Forcing Capital

only

one

inserted
lar

mutual savings bank in California, and the provision quoted was
the law, as we understand it, to accommodate that particu¬

-'j,

bank..

all

the mutual savings

bank states the investments in

.i1:"'
such hanks are

in Delaware and Maryland, which
special investment of savings deposits.
savings hank states according to the
thoroughness and stringency of their regulations governing the savings
bank
business, especially in regard to savings deposits in other than
strictly savings institutions, we find:
(a) The state cf New York stands pre-eminent among all the states in
fostering mutual savings banks, by its law providing that no bank, na¬
tional banking association, etc., other than a savings bank or a savings
and loan association, shall make use of the word "savings" in its banking
business or solicit or receive deposits as a savings bank.
By this simple
specified

securities,

except

limited

have

provisions regarding the

Further

classifying

*(See statement

Savings Banks

the

of Hon.

mutual

Charles F. Stern, April, 1920, number of The

Monthly Journal.)

SAVINGS
provision the savings bank
mutual

savings

follows,

banks.

therefore,

business in

The

that

law

far

that

state

governing these

state

virtually restricted

banks

admirable.

protect the

may

citizen* by

BANK

savings

legislation, New York has done so.
(b) California, Connecticut, Massachusetts and

lative

maintain

vested

(e)

Maine,

.Vame

laws,

New Hampshire and
varying merit, as follows:

Ohio

have

certain

using

the

vested

held

are

Minnesota

requires

words

the

this respect

"savings"

"savings

securities

savings deposits,

the law

governing

seems

Ohio

conducted

savings
prior

that

and

bank"

that

shall

such

its

shall

name

the

for

law

securities,

that

class

restrictions

actual

herein

that

explicit in

combining

the

business shall

specially
is

amount

There

Delaware,

amenable

the

and

de¬

would

business

with

the

preferred

even

the older

and

claim

given

authorizing capitalized banks

for

the

its

Michigan

Florida

States requiring that
savings deposits, by whosoever received,
segregated, specially invested, and held for the sole
protection of
savings depositor;

Oregon
Rhode

Connecticut

Idaho (in trust cc.'s.)

New

which
and

These states

either

number, and

are

lose

address

follows:

further
that

economics, but

Carolina

relation

Dakota

Mississippi

South

Missouri

Tennessee

Montana

Utah

New

Jersey

The

Mexico

North

Dakota

Wisconsin

disclosed

record

have

savings

hank

legislation

by the facts outlined above, your

unqualifiedly

favoring

the

com¬

segregation,

for

reasons

the opinion

that

new

interest

is to

the

and

the

gToae

savings

point
have

injustice

munication
the

Deseret

in this country

cases

savings depositors
to

the

portion of their managers
validity of our contentions.

during the past few

account

by Mr.

says:
our

savings depositors
petting

laws.

poor

Elias

Savings Bank of Salt Lake City, last

"We have had in

banks

considerable

they will~appreciate the

many

addressd

described.

have educated

where

been

Smith,

years

com¬

Cashier

account

Our

their

savings

work

of
*

their

alarming instances of injustice

segregation

trouble

not

being adhered to,

done

the

and

that

(In

trust

deposits.

banks

very

deposits

from

country
it

will

companies

trust

their

other

they

are

accounts,
not

because

its

various

Thrift

branches

resulted

cases
'

from

waT

TTT;

annual event

by the

we were

instructed

clearing houses of the country
week committees.

Work.

the

work

which

whole

should

indi¬

receive

school savings, industrial
savings, and home
study treats of each primarily because of ita

unit

the

community.

The

the

which

attract

new

school

prominence

savings

systems,

with

the

prices

time

their

have

may

come

throughout the country.
Until the past school year,
largely pre-empted by the War Loan Organization.
the public preference for
savings bank deposits

use

interest-bearing securities

has

systems,

has developed
very

rapidly and there
unpatriotic to conduct private

in which it is deemed

develop
in

commercial

been

especially

allowed

position
As

near

one

report

making a study of the more successful school
those which were established before the war

become

typical

disorganized
model

the

Furthermore,

the

plans

upon

several

war

plans which

localities.

the

which

workers.

would

office

are

*It

based

aims

in¬

upon

exploited

being

organizations.

plan

industrial savings
systems, the section
issue of the Journal by the

is not

There

are

the

has

attracted

important

considerable

for

tht

industry

attention.

The

and it avails of the cooperation of all the local
It is to be explained to you 'by General
Manager Tinsley.
almost innumerable variety, all of which have been

plans in

Journal

Home

which

article

complicated

studied and classified
in

procured

manager

Springfield, Mass.,

savings banks.

amount

The

separate

the

looking toward the interests

having "savings" in the corporate name.)
having "savings" in corporate name.)

companies

■

mentioned,

secretary

for

our

secretary in

September.

economics

study of

agricultural
remained

Reprints

departments,

are

detailed article which appeared
available.

bureaus,

savings banks

are

still

home

economics

and

family budgets has been

common

institutes

for

the wealth

f (Except

: '

novelty.

strenuously object to being forced

entail—but

many

had been very

experience

realize

amount

American

cooperation with the commercial and industrial

present

promotion

not

tended

typical situation

the commercial
depositors with¬
while the savings depositors were
required to give
rotic-e of withdrawal, and by the time the
notice had expired the bank
had closed its doors and the
savings depositors left to get what there
may be
out of the wreck, and in both instances
they have not been able to
"The

along this line.

savings

drawing their acoounts,

the

coordinating each with the other.

much

our

but few cities

now

work

January

two v<?ry

into financial

year,

•

state

view to

problems

rather than

departments
There

office

national effort after these other scattered

which
.

to the

various

advancement

already

are*

the

hearty cooperation with the local thrift

heard

encourage

segregation of savings deposits.
savings banker knows, such segregation is notonly.sound in
princi¬
ple, but necessary in practice. We believe it probable that such time has now
elapsed since commercial banks and trust companies established
As every

and

this field
As

good

very

practicallybrought homebank which is-

are

Every

savings department, is conducting

received

Family Group is the logical economic

special

savings deposits.

taken

living.

present levels.

unsatisfactory condition of

the states,
to

Carolina

Washington
West Virginia

Ohio

advantage ira
through an¬

community merely reflects the jeconomic
advancement of the family groups therein.
We therefore conceive of our work
as dividing into three main
branchee.
First, education of the child in the
ways of thrift; second, the urging of
thrift upon the
wage earner at the point where he receives his
wages;
third, practical instruction of the home-maker in
connection with her

Virginia

New

■

to the other.

economic

Vermont

Illinois

Kanaae

have

habits

Indiana

wishes

organized
-

are

South

Kentucky

study of the subject of thrift and savings

Pennsylvania

many

there

Oklahoma

Iowa

the stamps and certificates

upon

problems which

cost

are

momentum,

communication

attention with

Georgia

savings-

Minnesotaf

the

economic

high

Scope of
Our
cates

Florida

Organi¬

war

part of that movement

for

in very close
in many cities.

interests

specially invested:

co.'s.) Nevada

international bodies, through declara¬
and their
organizations, and in

which maintains

well

Maryland

Idaho (except trust

still

are

and

men

and

by the

their

Louisiana

social

Arkansas

savirigs

Alabama

Delaware

banks

prepared to sell these governmental
obligations-

by various national

This resulted

accept savings

any

place, it

War Loan

with the sale of

by them

by failing to prohibt,
deposits without

the Government's

both the public need and the
private
have received almost daily attention

saving

and request their

Wyoming

expressly

companies

be regregated or

carrying out

In the first

feasible to appear to be in
competi¬

even

The

are

place,

Arizona

view

situation.

resources which we
command in comparison with the field to be
covered,
the method of
co-operating with the National Committee was referred to the
Administrative Committee of the A. B.
A., and

Island

Texas

Hampshire

permit,

trust

same

Minnesota

convention
last October,
and we gave much moral en¬
couragement to member bariks in all parts of the
country.
Both because it
is not consistent with our
policies to focus all of our work on a special
drive for one
day, or one week, and because of the almost
insignificant

Michigan

than

January 17 to 24, the first
day having been named "National Thrift, or Bank
Day."
This event was
approved both by the Savings Bank Section and
by the American Bankers'

requiring that the

they

individual

Association

Massachusetts

rather

National Thrift Week,
organized and managed
Young Men's Christian Association, occurred

re¬

Wyoming

Colorado

courses

preparation for

Island

California

for this

thrift campaign.

own

Savings.

preaching of thrift

by all types of business

projects

Nebra.sk a

mittee

Chairman.

practical suggestions and help in
conducting thrift
campaigns, to the extent that practically all of our available material
has
been distributed, it has seemed
advisable to devote our limited facilities to

Texas

Montana

Idaho

future

activities of

Although frequent inquiries

Oregon
Rhode

Colorado

Frazibr,

laws have been passed to
require the teaching of thrift,
and the Federal officials have
supplied material for

discussions
every

devoted to

principal

savings only, with

Iowa

states

second

activities.

Missouri

banks

the

tions

explicit.

Arizona

States

the

reasons

States

that

practice

all

important banking

desirable

continued

Bankers' Association

that

investments:

few

nouncements

Indiana,

recognized, the law should be made

commercial

the

extent

separate books of

California

adoption, of the Californid

this time.

principal

study which will lay especial emphasis
by examples in arithmetic.
v

is apparent

Class 2:

two

are

work

the schools,

transactions) relat¬

has been

Class

of This Year.

governed by the provisions
therefor."
Apparently no

any

the

those who call for them.

laws

legislation as regards the segregation and special investment
savings deposits in other than strictly savings
institutions, is far from
adequate, and even in those states in which the wisdom

the

having inadequate savings bamk

view

bank

communities,

Class

legis¬

for

program

with

the

shall

states
a

t-' t't

stamps and other securities.

savings

the

shall keep

nor

tion

kind.

any

stricted

those

lias not been deemed

Maryland, New Jersey, Pennsylvania, Vermont,
Washington, West Virginia and Wisconsin, being
precisely one-half in number
of the eighten mutual
savings bank states, have no segregation provi¬
Thus

zation which has
coupled the

companies,

give

savings

provided

required

trust

department.

"Receipts, investments

segregation of assets

sions of

laving! de¬

subjects assigned to the Committee on
Savings has received
deal of detailed
attention, but our activities have related more to

great

definite

that respect.

trust company

savings depositors.
(d)

safeguarded

segregation of

Respectfully submitted,

preparation

savings business

assets

and

the

bank

ing to each of such classes
and

recommend

none

The work
a

separate department,
does not expressly

but

should

each

that

against

commercial

account

recommend:

Work

in¬

illogical and inadequate.

banks,

claim

provides

the

Report of the Committee

security for the payment of savings deposits.
savings deposits received by a trust company

Hampshire .requires

shall

seem

Gentlemen:

kept on hand for the exclusive
of
such
deposits.
Apparently the savings deposits in other
banking institutions need not be segregated or
specially investd.
In

positor

for

Raymond

protection

etc.,

recommendation

segrega¬

that

savings bank

Neve

should

does not

These assets

state

think,

all, a study, with
Departmental Banking Act.

require the segregation and special investment of
savings
deposits in banks doing both a commercial and a
savings bank business,
but provides that
every trust company receiving savings deposits "shall
segregate and set apart, and at all times
keep on hand so segregated and
set apart, assets at
least equal to the aggregate amount of such
deposits."

equal

our

Minnesota,

tion provisions of

wish

Secondly,

department therefor; that the assets of such
segregated from the other assets of the bank, in¬
bank securities, and held for the sole
protection of the

savings
saving* depositors.

First, that the Savings Bank Section
of the A. B. A. go on record as favor¬
ing laws for the organization and
operation of trustee savings banks in all
those states where such
legislation does not exist.
I

addition

posits,

separate

shall

179

savings depositors who,

requirements."

Rhode Island, although
going as far as New York in
favoring mutual savings banks, yet give
adequate protection to the
savings depositor by providing that any state
bank or trust
company receiving deposits in the manner of a
savings bank

department

their

its

■

•ot

shall

SECTION.

the

and colleges for many years, but it seems to hars
savings bank to establish the downtown headquarters for

of information

practically

offered

every

to the

other

which

the

downtown

experts in that field

location

where

are

such

able to offer,
aervice

could

public, the background would be that of spending rather

BANKERS'

180
than

tial

The home economics worker in

saving.

The

report by

secretary in the Journal for last March outlines our
Such departments are as yet in full working order in
in Cleveland and in Pittsburgh.
established on a part-time basis, or are being con¬

our

experience to date.
banks

two

but

templated.

Plans

The

branches

various

Work.

Future

for

this

and
that

the

Savings Bank, states its position as follows on matters of current

encouragement

thrift jand savings, for Americanization, through
property accumulation which is being planned for the coming year.
In
that carefully coordinated national effort special attention will
be
for

of personal contact—school savings systems,

given to all three .avenues
industrial savings plans, and

honje economics departments in banks.

Respectfully

submitted,
W.

Ooinptrqller, V.-P. Bowery Savings

Knox,

Chairman,

d3ank, New York.

the

that

Resolved

has kept

Americanization

varied discussions on this important

and

Circles.

subject in Congressional and' other

■

chairman of the committee which investigated the causes
of the steel strike, caused a bill to be hastily drafted and it was very
promptly passed by the Senate.
It was not received with special favor by
the House, it had to face the opposition of the educational authorities who
were and are still devoting their energies to the establishment of a national
department of education, and at the present time it seems very improbable
that this so-called Americanization bill will be enacted.
Our opinion on this
Kenyon,

ture

Resolved

Council.
and especially its business Inter¬
ests, has about concluded that there are other and perhaps more Important
factors in Americanization than the mere ability to speak English—im¬
impression that the country,

our

be in any general program.
While this new
view has not yet assumed the .form
of constructive legislation, it is my
opinion that it serves as an effective check to legislation based upon the
frenzied efforts of political
influences and would-be molders of public
opinion, who have proposed almost innumerable plans—but plans which
merely established a new national bureaucrat who should receive no definite
instruction from Congress, but would be allowed almost unlimited means
for developing his own fads and fancies.
We believe the States and locali¬
ties are awake to the dangers and'limitations of such a scheme.
A mere
superficial examination of the tentative draft indicates that it involves a
Federal bureaucratic control of local work for Americanization through Fed¬
portant as that ability might

regulations, sustained by another Federal aid plan.
indicated above, so far as any concrete propo¬

eral

In view of the situation as

sitions

concerned

are

serious

would be presumptuous to make any

feel that it

caution every banker and every citizen to make

by persons who
too prejudiced to determine such vital problems

study of the plans being offered in such numbers

either

are

But

recommendations.
a

unqualifed

objects or means.
In fact, the need for a broader, deeper and better understood American¬
ism does not alone involve alien immigrants.
Many of the children from

our

own

homes

not properly instructed

are

therein, and some receive no

instruction

thereip even in our public schools!
Before going far afield for problems, let us interest ourselves in what
is going on in the schools in our neighborhoods, to the support of which we
contribute—and which are turning out the voters of tomorrow.

shall

line

sound

covered

letters

recent

from

two

this committee.

members of

Allin, under date of September 30,

very

so-called

the

wrote:

"I do not be¬

Through

foreigner.

our

schools,

hoarding and to encourage participation in

discourage

banking system.

expenditures of our National and State Governments should
same degree of efficiency and economy as found neces¬

the part of our citizens.
Thrift is a virtue which should be prac¬
expenditures are made, and is especially obligatory when

from

by mandatory levies rather than from earnings.
resume
arid even broaden our position against

funds
that

Resolved

No new tax exemption should be conferred upon

security and we now demand that every present

any

tax

privilege of issuing
be possible in

as soon as may

separate case.

issued by the National Rail¬

the Equipment Trust Certificates

Whereas,

and bear so attractive a rate
especially desirable for the investment of trust funds, be

Service Corporation are so amply secured

way

shall be terminated

exemption securities

each

tax

exemption of securities.

interest

heartily supports the objects of the National

is in favor of and

Corporation in furnishing equipment to applying railroads

Railway Service
and

B. A., in annual convention

Savings Bank Section, A.

the

that

Resolved

assembled,

Inter-State Commerce Commission in succes-

co-operating with the

fully carrying out the purposes of the Transportation Act of 1920 to the
end that railway security values will be improved and railway credit ma¬
terially bettered, and be it
Further resolved that this Convention direct the Committee on Legislation
Section

the

provide

form of amendment to State laws designed to

several states to invest in equipment obliga¬
or agency organized pursuant to the pro¬
Transportation Act of 1920, as amended by

permit savings banks of the
tions

issued

visions

will

obligations of
tee

also

investment

that the Committee

Legislation, in co-operation with

is directed to make every effort to secure the

State authorities,

above proposed

legislation of the

at the

amendment

legislatures of the several states.
that the members of the Savings

Bank

Resolved

efforts

hereby

who have

those

tee of

efficient work of the past year;

interestingly

Vice-Chairman

Addison and

attendance

addressed

us,

our

thanks

and especially hereby ex¬

appreciation of the painstaking effort by which

keen

our

press

express

Section for their thorough and
to

forthcoming sessions
Section

their thanks and appreciation of the effi¬
President Strong and the officers and committees of the

at this Convention

cient

1920;
equipment

such other railway

the judgment of the Commit¬
Section would constitute a standard savings bank

the

Further resolved

the

permit

and

the proper

the

kind and fcharacter that in

Investment

investment
-

210

Sundry Civil Appropriations Act, approved June 5.

of the

which

and

corporation

Section

Chairman

Bowles and the members of the local Commit¬

Arrangements for the Savings Bank Section have succeeded in making

pleasurable and profitable.

stay in Washington both

II.

Chairman.

BEACH.

of the Resolutions Committee was adopted by the Section.

Tire report

much of

believer in the 'second generation' and only this week

two cases in this town which illustrate my meaning or backs
belief; a young Italian girl expressed to a friend of mine her de¬
the family had just bought a house with a bath room, and

that

thought that

they could

friend met the

father had used
"Another

case

she received

the last

very

Mr.

woman

railroad accident,

and is using part of
part has bought a house
Last

year

rather

local high school, one was an Italian, one Polish and one
immigrant)."
McCann, treasurer of the Italian Savings Bank of New

Francolini is president, under the same date wrote:

and old, and

short lesron in simple words daily, to

the best training for

good Americanism.

learn that

is to receive

to be

adopted by the Savings Bank Section :
amply secured and bear so attractive a rate

are so

especially desirable for the investment of interest funds,

be it

,■

Bank Section, A. B. A., in annual con¬
assembled, is in favor and heartily supports the objects of the Na¬

Resolved,
vention

tional

That

Railway

railroads

Savings

the

Service

and

Corporation

furnishing

the

with

co-operating

equipment

applying

Interstate Commerce Commission

successfully carrying out the purposes of the Transportation Act of 1920,
that railway security values

to the end

will be improved and railway credit

materially bettered, and be it
Further

That

Resolved,

this

Convention

directs

the

Committee

Legislature of the Section to provide a

form of amendment to State laws
designed to permit savings banks of the several States to invest in equip¬
obligations issued by

ment

the provisions of

corporation

agency

organized pursuant to

Section 210 of the Transportation Act of 1920

amended

by Section 5 of the Sundry Civil Appropriation Act, approved June 5, 1920,
which

and

will

obligations of
on

also

permit

investment

other

such

railway

equipment

kind and character that in the judgment of the Committee

Investment

Further

tion

Through Thrift.

Americanization

Service Corporation

interest

was

Equipment Trust Certificates issued by the National Rail¬

Whereas, The
way

Certificates.

Equipment Trust

Endorsing

following resolution

the

Section

would

constitute

standard savings bank

in¬

vestment, arid

ability to speak English does not make for Americanism."

pleased

The

injured in

young

mere

are

after

from the railroad company;

Americanization
We

soon

in.

spoken by the teacher in story-telling manner, or repeated by the

class,

"The

mortar

Ilolyoke college and with a

York, of which Mr.

whole

other people were living;

Italian

young

money

Mt.

our

Bernard

"Thrift

live

graduation at Wesleyan, three of the high honor students were

(son of

be read

now

lady again and she was almost in tears because her

bath-tub to mix

respectable residential section of the town.

graduates of
Jewish

some

by boing to

young

the

Resolution

banks and in

across
my

light

protect the savings of

wherever

agencies outside of those we now have to

need to go to many

'Americanize'

our regular

every-day intercourse we can do the kind of missionary work that will count.

'•

approach to this entire subject which we believe is fre¬

Arthur L.

lieve that

jran

of funds available from

V.: •'

renewed effort shall be made to

them here without change or comment.

Mr.

executive committee to consider

our

with the

made

sary

excess

-\.;v

that

immigrants to

quently overlooked because of an enthusiastic desire to do something quickly,
copy,

incurred

thereby

American

our

Generation.

The Second
A

request

developing standard American Bankers' Association forms
for school and industrial savings systems, and, if found desirable, to adopt
such forms and methods and to promote their use, providing no liability

to either

that

further,

the advisability of

point is shared by the Inter-Racial
It is

banks is hereby declared to be an
their fu¬

in this general movement, and we recommend
establishment as a branch of savings bank service.

important feature

made

Following the abortive strike in the steel industry, we heard much of
need for Americanization through instruction in the English language.

the

through industrial and school sav¬

cases,

Home economics work in

ticed

Teaching English.

Senator

such

deposit in

for

ings systems.

during the coming year

special effort should be made to provide

saving, and that a

and

facilities

touch with the many

calling

for

and instructing the family group as the unit

for both reaching

Resolved that

Committee

opportunity

every

special attention should be given,

that

means

for thrift

the

Your

improve

creditor of the bank.

deferred

Resolved
to the

channels.

Americanization.

will

Division

public, as well as of bankers, to. the peculiar nature of

savings deposits and the necessity of preventing any situation to arise un¬
der State or national law whereby the savings depositor will become, in

Resolved

Report of Committee on

in¬

terest :

have here only

group

general movement

Resolutions by S. H. Beach

of the American Bankers' Association, both
of thrift and the development of the functions of

the

effect,

subject which we

general

will be discussed so authoritatively by both bankers
laymen at this convention that we will close with the urgent request
all members of the American Bankers' Association cooperate heartily in

attempted

Committee

Savings Bank Division

the attention of the

thorough trial be given to this
branch of work for promoting savings and thrift.
the savings bankers that a

We urge upon

special

The
for

this country, one each

been

have

Others

^he

Report of

the bank is obviously impar¬

expenditures.

and amount of

direction

the

CONVENTION.

practical

application in connection with the promotion of habits of saving and thrift.
some of the more sentimental features of our work,

with

secure

That

Resolved,
the

proper

the

Committee

Legislation,

State- authorities, is directed to make

the legislation of

sessions

the

in
every

co-opera¬

effort to

the above proposed amendment at the forthcoming

Legislatures

of the several States.

With the elimination of
we

think it

foreigners

not

and

improbable that by far the best
in

Americans

the value

JOS.

SAUL,
N.

ARTHUR

means

American

for educating both

institutions

will be

Respectfully submitted,

through economic approach.
B.

Chairman.

FRANCOLINI,
L.

ALLIN,

JOHN
A.

SATTERFIELD.

WARD,
GIANNINI,

Newly Elected
President:

nooga,

President,

Chattanooga

Bank Section.
Savings

Bank,

Chatta¬

Tenn.

Vice-President:

ings

Officers of Savings

Sadd,

Banks,

Raymond

Seattle,

Frazier, President,

Washington.

Washington

Mutual

Sav¬

Association?

American Bankers'
Fourth Annual Meeting, Held in

INDEX

Par Clearance

State

Plan,

Defense

the

Federal

Doyle..,

Methods Adopted
Par

STATE

Problems, O. Howard Wolfe..

Banker's

Washington, D. C., Oct. 18 and Oct. 20, 1920

BANK

.......Page 181
Par

Collections, Chas. de B. Claiborne.

State Banks and Their Supervision, F. W. Merrick

Clearance

Seeking

..Page 183

—_____ _

by Federal Reserve Board in

PROCEEDINGS

Amendment

Collections

Enforcing

Reserve

...ii'L...

Act

Page 189

.....

Concerning Check

...\

Page 190

___r..

Newly Elected Officers

Page 190

Page 186

......

Clearance Problems.Par
By O. Howard Wolfe, Cashier, Philadelphia National Bank of Philadelphia, Pa.
The question of clearing country checks has been written
about and discussed for

many

and

years

widely that

Reserve Act proposes

to-day it is unnecessary to go into all the intricate details

proven it

the

subject,

Rather

presented

especially

may

sum

mine

what

audience

facts

conference

and

counsel

between

arguments

of the stock arguments

there

bankers,

the arguments as they have

been

much

the

to refer to cer-

and analyze them

weight in them

deter- '

be presented to

may

final court of appeals in such a discussion;
tain

and

see

whether they serve any

other purpose than to cause a general

confusion of the real

issues.
In

using the term "country bankers,"

those

country bankers

who

plan of the Federal Reserve
not be discussed as

bankers.

in favor

are

Banks.

of the

ex-

clearance

par

This question should

controversy between city and country

For example, on the program to-day we have Mr.

Claiborne,

Vice-President of

large city bank,

exchange charges, opposed by

bank

favor

Doyle, cashier of
who is

merely for

consider it to

change charge and are opposed to the so-called

city

of par clearance.

We have

country bank, and

eloquently in favor of

eral Reserve Banks and

supporting

representative of another

also

Mr.

state bank at that,

clearance.

par

Nor should this be considered

of their member banks.

some

has frequently pointed out. the Federal

Reserve Banks

observing the law

been

has

United

are

interpreted

States, and also,

by
I

the

add,

may

it is written and

Attorney-General

the

by ordinary common

sense.

This question

should be discussed and considered
of

opinion

between

methods

of clearing

checks; whether, for example, checks should be cleared

whether they should be collected ; whether we should return
the

independent check collecting

five years ago,

present

whether

themselves,
the

general

should continue to

well

used

the

is proper for the

for the banks

proper

especially since

charge,

same

banks is much less, even at one-tentli of

the

one

per

charge by

cent.

The

fundamental weakness in this argument is that it is bank
credit, not

that is transferred by checks.

money,

the man for whom the money is sent, and not the

collection of checks

should

much

be eliminated, the cost
or

Further-

time

the

gen-

eliminated

possible to

of the system

country

borne

of check

place, the experience of the banks with

American
bank

Bankers'

bankers,

weight

a money

who

man

the

second

order system

office

or express

cause there

States and
a

Association,

discloses

the fact that

order system could not compete with the post

money

company

an express

at lower rates, chiefly be-

even

post office in

every

hamlet in the United

office practically everywhere there is

railroad station, and that these offices

are

open

for the

receipt and the payment of funds at all hours of the day,
as

well.

It is argued that since Canadian banks charge each other
exchange, therefore the practice is sound and should be

mitted here.

The

answer

collection

which transfers

system
be

can

per-

to this argument is that the Cana-

dian banking system, excellent
central

made

it is, does not include

Gold

Settlement

practically

part of the country.

Fund

without cost to

Attempts have frequently been made to justify exchange
charges

example,

the ground

check that

that in

can

some

pities, New York for

be collected at par, so far as ex-

change charge is concerned, will be accepted

,check.
sense

Such

at one-twentieth

the

charge

lie is now

one-tenth of

is not

uses

exchange charge

done

the

it, or in the sense that

many years ago

reduced

eighteen.

since it required two days

to travel by railroad from New York to Chicago.
was

per cent,

seeking to amend the Federal Reserve Act.

has not been

time

deposit for

one

length of time it takes to collect the

that the country banker

twenty-four hours;

Chicago funds that

Later the

to-day it
were

can

collected

mail by a New York bank fifty years ago would have been

outstanding five

longer be given to the statement that the Federal

banks reverse this.

of their own, which was undertaken some years ago by the

upon

referring to the principal arguments which have been
from

The country

depending

thereof should
use

it.

gets

the

in the interests of the

time and expense

those who secure the benefit

should

out of business

gone

that if it

remittance of money, it is therefore
to make

use

In this discus-

collection which has been provided by the banks.
In

companies and the post office to charge fees for the

immediate

eliminate these two factors, and whatever time and expense
cannot

dividends

suspended

use

recognized that for the benefit of the

bank-using public,

banks
from

system

Federal Reserve collection system.

sion it should be

eral

to be entirely practical, and so far as we know,

has

It is very frequently stated
express

any

honest difference

bank

and, in many cases, of the night

dispute between the Fed-

Governor Harding

destructive thing,

more, the post office and express companies always charge

convenience, and for present purposes let
mean

impractical

because of it.

both sides, because this meeting, as I take it,

be likened to

may

before

Experiments with the Federal Reserve collection system has

six days.

This time, until the introdue-

tion of the Federal Reserve collection system, stood at four

days;

to-day credit need be deferred

result has been

only two days.

The

corresponding reduction in the cost of

ae-

Chicago for immediate use. It is
of an argument which would say

cepting funds payable in
difficult to see the force

should be added one-

addition to this charge there

that in

be paid to the bank in Chicago

tenth of one per cent to

send cash, although it no

transferred.

Theoretically the people

longer needs to he so

whole, and including bankers, gain

nothing by the im-

cost which, by the

position of an exchange charge to cover a

eliminated.

introduction of better methods, can be

economics to say coal must be

it is sound

For example,

that power may be

mined

A prac-

sound theory is not sound practice,

tice that is not based on

generated, not that miners may

railroads must trans-

comfortably if not luxuriously;

live

be-

it used to cost that rate to

cause

CONVENTION.

BANKERS'

182

manufactured goods, and raw materials in
all of us may use and enjoy the fruits of the

port produce,
that

order

and not that

and labor,

floil

stockholders and railroad em-

ployees should benefit beyond
mining

tern

eliminate

would

If a sys-

their just reward.

transportation could be devised which

reduce

of capital or

outlay

the

amount of labor now required, then

the railreceiving

benefit, and it would be absurd for the miners or
road

the same pay as

before for less service merely because they

railroad men

happen

they alone should profit by

to insist that

men

Before the installation

of the country banker,

perfected check collection and

system, there were many costs

which

vice

the

With the introduction, however, of

fair charge.

undoubtedly the most scientific check collection and

what is

only uneconomic but

clearing system in the world, it is not
for any group of bankers to

absurd

before.

receive the same pay as

If you will

fetched.

about

lisbed
held

the

1830

will

read of

and drivers of

places.

who

In fact, there were

against the

vigorously

they earned a considerable sum of money every
ing

mud.

banks

have

always

counters and nowhere else.

ment for

moment.

reached

provided

stress

great

banker to make real profits in exchange, however devoutly

although inevitably

subject

the

As long ago as 1815

the banks of New England found it necessary to

install the

system in order to provide a place other than the

paying bank where bank notes might be reAgain, when the National Bank Note sys-

during the Civil War, it was very soon found
their redemption at par at

Washington as well as at. the Counter of the paying bank.
In

modern history, the experience of the Boston Conn-

Clearing House in 1907

try

proved to the entire country

the necessity of making checks payable or collectible at par
in

centre, in order to secure their easy circulation.

one

To return, however, to the statement
ers

of the country bank-

that checks drawn upon them should be

payable only at

their counters in cash, it lias been discovered recently that
when

the Federal

and, in addition.

permit him to charge them at least one-tenth of one per cent,

which

The deposit and check system,

be necessary to provide for

profit in exchange unless he can induce his city correspond¬
ents to take all checks at par, absorb the exchange on those

Unless he can pass the burden along to Ills city corre-

economic laws and principles.

tern was begun

blackmail, would be inclined to smile sadly, since it is so
obviously impossible for the country banker to reap any

spondent, it is a mathematical impossibility for the country

same

deemed at par.

it further resolved, that we respectfully request the coopera-

payable at their

note

the

method of payment that has supplanted a true

counter of the

Bankers
"Be

Let us examine that state-

bank

Suffolk

high state of perfection in this country, has

circulation,

In the resolution passed by a meeting of State

held at Omaha, January 14, 1920, we find the following:

they collect for the country correspondent,

laid

statement that checks drawn upon them are

has

the

Country

own

winter dur-

dull season by hauling stalled automobiles out of

depositors exchange

for the collection of checks deposited.

tion of our city correspondents in this matter (that is, the

Erie, Pennsylvania, and in

protested

There is nothing in the law at present which pre-

abolition of the par clearance system) and will look with
disfavor upon said corresponding banks if they assume an
attitude to the contrary." I venture to say that the average
city banker, instead of regarding that resolution as }>olite

roads in that state on the grounds that

repair of certain

free?

vents country banks from charging their

stage lines, who pro-

A more recent case on record is that of some

farmers

indignation meetings

building of railroads.

riots and tearing up of tracks at

Maryland

insist that they shall

Nor is our illustration far

read the newspapers that were pub-

you

owners

tested against the

other

incidental to ser-

rendered in the collection

country banker was justified in ex-

of checks for which the

acting a

banker

country

The ease is

coal miners.

analogous with the present position

clearing

the

all of the people should

to all banks, but actually to those banks which now insist
upon a flat exchange rate of 1-10 of 1%. because the
Federal Reserve Banks would very rapidly go out of business if they paid all banks one-tentli of one i>er cent,
It is interesting to note from what source the agitation
for universal exchange charge arises. It is significant that
the banks which have been most active in this campaign
have been the banks situated in those sections where exchange rates were always highest as compared with other
sections. The reason for this is a very natural one. Only
those banks can make a proft in exchange which charge
more than other banks charge. If all charge the same rate,
nobody profits; hence we find that banks which have reaped
the greatest harvest in exchange are being "smoked put"
and disclose themselves by their attitude in the present agitation.
Something may now be said of the viewpoint of the city
banker. No city bank has (is yet been able to pay exchange
to country banks without getting that exchange back either
from the profits on the balances of the country banks, or
from other depositors. If a law should be passed making
universal exchange charge obligatory or even possible, then
the city banks will be compelled to exact from their country
correspondents balances sufficiently large to enable them
to meet the increased cost of collecting checks. If, on the
other hand, the city banks must be expected to look to their
city depositors for this added exchange cost, then wherein
is the principle equitable under which the depositors of the
city banks must pay and the depositors of the country banks

Reserve Banks took them

their word

that consummation may he wished.

The collection of checks is inevitably and inextricably
bound up with the holding of reserve balances.
Cannot be unscrambled.

The eggs

If a flat rate of exchange of one-

tenth of one per cent were imposed by every bank for paying

its checks, I believe that no city bank could afford to accept

country( checks at par from its country correspondent for
less than prohibitive balances.
snap
can

judgment.

That is neither theory nor

It is a mathematical truth that any one

verify for himself.

I think those who propose that the

Federal Reserve Banks should collect checks at par but
pay out exchange to

their member banks have thought the

thing out, and realizing the impossibility of going back to
the old system without injury to the Federal Reserve Act.
have suggested the proposition as the only possible alternative.
Such an arrangement, however, is entirely impracticable, because the result would be that the Federal Reserve
Banks would be serving their members by collecting checks
deposited, and then paying them for the privilege of render

they immediately repudiated the statement and insisted upon

ing this service by allowing them exchange at one-tenth df

charging exchange at one-tenth of one per cent.

one per

Before concluding these references to the city bank's point

weakened by the fact that they have

of view, let me remind you that no city bank is opposed to

For example, the pres-

the country bank's charges because it will cost them money,

agitation is being fought out mainly on a new one, the

That seems to be the common impression, as if the city
banks were philanthropists or altruists on this question. Re-

our

friends,

the country bankers,

has been considerably

refused to stick to their arguments.

argument that
I

cent on checks paid.

that their case

remind

ent

We may

the Federal

Reserve Banks have recently

made money and, therefore, they should he willing to pass
some

of it back in the shape of exchange charges, presumably

lieve me, gentlemen, they are not. They must pass on the

charge you exact to their depositors, either in actual money

■

STATE

■

augmented balances.

their depositors pay
All that

they

BANK

They have bad the courage to make

the other.

way or

one

You have not.

able to do for their depositors prior to the

were

installation of the Federal Reserve collection system was to

organize country clearing houses

and otherwise cut down

Therefore, I repeat, do not look upon city bankers as unfriendly to

if they

you

They want to help you all they can in

exchange charges.
the

solution

the general restoration of

oppose

of this vexatious

sented;

problem.

They are as much

much at stake as you have.

May I

tell you who and what are the real forces that have

against

who shamelessly abused the

privilege of charging exchange;

who remitted for items and letters
to take

Tlney are the bankers

and would do so again?

you

separately

repeated

cashiers'

the

always

when

charge

remittance, and then

checks sent

cashier's

the

taking out exchange for his
which bank

check

was

pre-

camel's back

benefits

supplant, and

its

universal operation

must not lose sight

of the fact that the

cent of the

clearing houses, through which 95

business dealings and commercial transac-

other country

checks and were not discovered until they had both profited
to the extent of about

are

speak, be sure

so to

presented

you present

the full case, clearly and truthfully, with intent to deceive
least of all yourselves, having in mind that

one,

ing with enlightened public opinion, that

you are

deal-

you are opposed by

Chambers of Commerce, Associations of Credit Men, and by

the best banking thought everywhere.

■

Platteville,

Wisconsin.

ward

course,

volume of checks upon

greater

which

we,

should be privileged to practice the art of deducting

banking

We are all familiar with the many iniquitous
banking practices

and

methods

that

followed in

the wake of that kind of a clearance system, namely, the
circuitous routing of transit items through

various chains

kiting of checks on the part of both depositors and banks;

interest and importance, in

which the public, as

the

inauguration of the Federal Reserve Clear-

matter that

Plan, the par clearance of checks was a

endeavored

werg

our own

Necessarily,

constantly

bank

hunting

rela-

clearance

institutions, all checks received on other banks,
we

solve this vexatious

bent every energy to

problem

the violation of any

our

satisfaction,

own

regardless

economic principles it involved, or who

suffered the ultimate cost of clearance.

therefore, in opening up

the uncertainty at all times as to the

dentally suffered while clearance was being made through

these chain link

processes;

The essential need,

relationship, or a series of such

relationships, in order that we'might secure clearance over
wide area, was that the arrangement

effected should bind

the opening of new accounts

solely because of the profits to be derived from exchange on

checks which we might

satisfactorily solve for itself.
we

layed presentment;

ultimate payment thereof; the great loss of interest inci-

banks, are vitally interested.

tionships through which we would be able to clear at par

receive for collection from these

together with

eyils,

These

sources.

new

the fictitious,

padded and pyramided reserves that naturally resulted in
the processes mentioned,

were

the outgrowth of the old

So long as facilities were provided

methods of clearance.

for ourselves—for our own individual bank—we considered
duty done, and complimented ourselves on our fore-

our

sight and ingenuity in

other shoulders,

the1

exchange burden onto

Despite the fact that the old clearance

Rule in clearance.

injustice,

exemplified

system

shifting

and evading the operation of the Golden

and permitted the devil to

correspondents with whom we formed our alliances, to

take the hindmost, there are still some banks that are will-

item we sent them for clearance, and at the same

ing to perpetuate the check clearance system that developed

par every

time force the

duction
were

correspondents to submit to an exchange de-

every

to be absorbed

Can any thinking man in this day and age of progress—

to the expense that had

of development and efficiency in.every line of business—

us.

by the correspondent banks in providing this
When it was impossible for

to make

(and the feat was im-

agreement of this kind

one-sided

possible with some banks), we bided our time by

reciprocal

arrangements

able to do better
were

making

until such time as we might be

(and it is a noteworthy fact that many of

interested in doing better).

hunting and trying to secure as many

We were constantly

of these relationships

possible, in order to head off some enterprising eompetimind

whose

methods.

had

learned

follow ours

clearance

The more relationships and accounts we had, the

greater were the par

facilities

afforded ourselves; the

greater were the advantages we had over our competitors,
and greater were

the tolls that ticked into our coffers from

Any bank that coveted our account—and there were not
few

who

stand

thus the

coveted
and

for

moment consistently argue

accounts—positively knew that they

deliver on

the

exchange

proposition,

and

securing of reserve accounts was very largely de-

that any such obsolete,

dangerous, unscientific, indefensible clearance method shall
any

longer handicap to-day's requirements of trade and in-

dustry?

Can

thinking banker endorse and approve

any

the continuance of that kind of check clearance; that kind
of

Does he think that the

injustice and discrimination?

growing

trade and

commerce

of this country should any

Our banks were

longer be handicapped in that manner?

not chartered solely for the benefits and selfish personal
interests of stockholders.

They were chartered and created

to serve the trade and commerce

of our country; to facili-

tate the commercial operations of our people, and

we are

derelict in our duty when we fail to provide facilities which

wi}l enable our institutions to function not only in the highest interests of trade and

these sources.

must

these pernicious evils.

It is true that we

letter they sent

especially solicitous as

not

clearance for us.

So, gentlemen, .when the final arguments

before the Court of appeals,

in the world has the use of bank checks

tremendous

Independently,

tor

thousand dollars—stolen money, if

please, and yet within the law!

you

of banks in order to escape this deadly exchange toll; the

negotiated by means of checks.

each individual bank throughout the country had

gloomier

even

the delay and the liability that attached to every bank con-

Prior to

corned in the negotiation of checks, by reason of this de-

of national

you

along economic and scientific lines is a problem

clearance

the

have

proportions, and therefore, their

assumed such

I can tell

cent would

the straws until the

tions of the public are

for

of two bank presidents who swapped their personal

cases;

exchange.

banks of this country are

per

one

additional par facilities for us, and at the same time for-

result from

will

that

At the outset

ance

broken.

pendent upon the ability of correspondent banks to devise

throughout the nation.

was

regardless as

who charged one-fourth of

clearance plan of the Federal

defects in the clearance system it attempts to

well

well to consider thoughtfully, the

In the discussion of the par

Reserve Banks, it will be

110

remittances

small

checks

own

actually remitted;

cent when one-tenth of

per

one

H. Doyle, Cusliier State Bank

By W.

per

for

exchange

State Banker's Defense of the Federal Par Clearance Plan.

the

so as

advantage of "minimum charges"; who charged ex-

change for

charged

postage stamps; who make pools in cities and towns, each

worked

interested and have

who

183

been high; in short, those who piled

possible.

unnecessary costs as far as

SECTION.

industry, but in the highest inter-

ests of the general public,

Was it any wonder that the Federal
these

institutions

banking

reserves

charged

the

with

country,

the

Reserve Banks-

mobilization

should

the

earliest

CONVENTION.

BANKERS'

184

the old system of

transfers coming and going; to avoid the hoarding of vast

great

quantities of currency which cash payments would have

Clearance—cannot be disasso-

demanded; the loss of interest on huge sums of actual

jwssible moment set about to modernize
clearance?

check

functions—Mobilization and

dated." The very first requisite in the most
of

zation

reserves,

two

these

that

admit

must

efficient mobili-

the establishment of an economic,

was

scientific, check clearance plan;

porta ti on and check redemption, which would

trans-

of checks—in educating the public to the true value of bank
accounts—are we indebted in large measure for the tremendous 'banking power that has been built up in this
country.
Bank checks have truly served a great mission

formly and universally throughout the nation, serving mem-

converting our great mass

ber and non-member banks alike,

liabilities

check

available for service

admitted
this

bank

that

them

making

It must be

of clearance.

object,

such

any

that any

service as

such

contemplates, is absolutely essential,

clearance plan

new

and

in one-half the time

reserves

under the old system

required
1

liquid credit,

into

commendably meritorious from both an economic and comstandpoint, and worthy of our fullest and heartiest

mercial

For every benefit that we enjoy,

co-operation as bankers.

sacrifices to obtain. For

should be .willing to make some

the

benefits that

many

system

give,

would

alone

not

economic, par clearance

sound,

community,

our

but

every

community in this land—for the great benefits that would

to be

and to the public, we ought

to trade and commerce,

accrue

willing to make the very small contribution that the

Federal

Reserve

Par

must all be made to

Clearance

asks of

System

realize that

are

economic

questions,

service

greatest

and

abandon

the

of paramount

banking development;

in our country's progress/and in its

they are the indispensable instruments

of trade and corn-

and through the operation of the Federal Reserve
Clearance Plan operating uniformly and universally throughmerce,

be made the most perfect
With handicaps removed; with
discredit no longer possible; with passports to travel un¬
molested throughout the length and breadth of our country
on missions of helpfulness and usefulness to both debtors
and creditors; equipped to perform a higher degree of
service than ever before, where is the banker worthy of the
out our land, these checks can

the world.

currency

would deprive checks of these great rights and

name, that

added privileges; that would deny the public and commerce

of the incalculable service that par clearance under

the

xlway with the
narrow-gauged view that would penalize bank checks; that
Reserve Plan would afford us.

Federal

would deprive them of increased

that would

usefulness;

efficiency.
Out with the system
that permits tribute to be exacted from the innocent holder
rob them of increased

lines

of bank checks; too long has this old method of clearance

quasi-

made it possible for this nefarious practice to be continued,

broad-gauged

Because of the

viewpoints.

narrow

number

greatest

must function on

in the solution

the greatest good and

where

the

importance, that

us.

part of the com-

mercial mechanism of the country, and that

held in bank vaults for that purpose, not to mention
To the wide use

the liability of loss through robbery, etc.

function uni-

system of check

money

much is due from us in the

To our everlasting shame let it not be said that bankers

solution of banking problems of national scope and charac-

encouraged the circulation of checks—the instruments of

public relationship

we occupy,

ter such as this clearance

responsibilities, both
to

profession, which

our

selfish

ing to give

and implied, to the public and

must

by which

the

Our

public

communities and

our

with

banks

other

wide par clearance system for checks,

securing

and commercial

cannqt

development.

excused

under

ours

all

its

our

industrial

commission of

economic crime of that nature, yet we

will be inconsistent enough to defend the same economic
crime,

when

imposed upon

checks in

bank

the name of

Why is it that we will calmly approve that ac-

exchange.

Why is it that a relatively few banks are spreading

tion?

propaganda to resist to the last ditch, through Congressional

action, court actions, and other more indefensible actions,
the efforts of the Federal Reserve Banks to undo some of

outstanding

checks

The

bank checks, however great the necessity for revenue

might be, we would cry out, and rightfully so, against the

of the

the economic wrongs that this country fell heir to7 under

under the old

system

narrow-gauged view

aspects.

Were our Government to impose or propose a revenue tax
on

The

whatsoever.

pretext

personal gain that has been

Our obligation in this regard

any

clearance should not justify

problem

nation-

is positively manda-

and necessary in this day and age

tory

is the

be measured and accurately determined,

may

co-operation

flaged in the name of exchange.

Checks have served us too well to deserve penalization for

real usefulness to

our

that they

the great services they have wrought in our own behalf,

we are

willing to render in promoting sound, economic bank-

we are

the public,

themselves and

both to

will-

service which

ing, scientific methods and safe banking practices,
test

any

necessity,

might for their own private gain place a tax thereon, camou-

the degree of service which

communities;

our

discharged

not

The degree of

manner.

We have duties and

problem is.

express

against all banks should be made to discharge the highest

the chaotic banking system that existed prior to the enact-

degree of usefulness possible.

ment of the Federal Reserve Act?

Bar

Clearance Plan,

Under the Federal

the highest degree of usefulness and

efficiency has been conferred

upon

this

would

land, and

any

Reserve

bank that

all

checks throughout

resist

this clearance

plan which seeks to confer greater usefulness and

efficiency

country;

plan that seeks to put

end forever to

tice that has discredited and handicapped bank

signally failed to function in
created

was

serve

credit

render.

bearers

definitp

They

Bank

checks

throughout

are

prae-

checks, has

providing services which

indebtedness at their face value.

necessafy virtue?
orders from

greater

95 per cent, of the circulating medium of this

Shall

intended

were

this

it
to

l.nd, discharging

rob them of that

transfers of credit, or transfer

depositor to his bank, directing the payment
to the payee named, or to his order.

sums

the convenience

they have afforded, and

For

credit
that

upon us as

It reflects no honor or

bankers to resort to these tactics, in order

vicious and antiquated clearance system may be per-

petuated. If we are not willing to par our customer's checks,
or

in other words, transfer his credits free of charge, why

haven't

tell

the moral courage to

charge for the service rendered?

him so,

and lay

The facts are, we cannot

We have taught our

afford to be so inconsistent with him.

depositors for the sake of their accounts; for the sake of
the profits that we enjoy on their money without

that the facilities

and

service

we can

interest,

offer through check-

ing accounts, will provide them with the means of discharg-

ing their obligations everywhere,

isfactory

their creditors and

As business

men, we

the

manner

highly sat-

commercial

public,

know that there can be no satisfactory

the profits to be

discharge of indebtedness that submits a distant creditor

derived from checking accounts, banks have been responsi-

to accept less than 100 cents on the dollar for his claim. As

ble for

the

use

Primarily, they

The

even

instruments designed for the

to-day.

sums

was

that

our

of payment

was

commercial

transactions

instrument
use

operations,

should

know

that

the

duty and

legal

and at the place where the debt is payable, the full value of

unthinkable for the

represented

in the early days-of banking, and thus we see how the

check

bankers,

to escape the transfers of currency from

use

hand, and place to place, throughout the country,

vented for the
own

of checks afloat

obligation of the debtor to place in the hands of his creditor,

currency method

large

mass

and

were

benefit of banks,
hand

the great

born

necessity,

and benefit of banks in

order

escape

the

primarily in-

facilitating their
cost

currency

the indebtedness in money or into equivalent. Any tender or

transfer which involves the creditor in

any expense

ally getting payment is not payment in full;
other hand,

100 cents

in actuon

the

attempt to force creditors to accept less than

the dollar, therefore, it will be seen that banks,

unwittingly, perhaps, have perpetrated
their

it is

custom'ers

a wrong

in inducing

to make use of these personal check trans-

STATE
fers, unless
either
times

intend to clear these check transfers at par,

the

over

attempt

ground

that

counter

justify

without remuneration.

kind

this

cannot

pretenses

transfer

the public?
service?

service;

performed

depositor
it;

know

Why practice

entitled

admit

it;

have

this

witness

elaborate and extravagant transfer and voucher check
that

the

take accounts under false

Why

The

some-

charge is to be made for credit

transfers, why not lay it where it belongs?
deception

deduction

exchange

the

service

through the mails.

the

forms

provided for his use; we do everything but cut

each

other's throats for the privilege

then

why attempt to take from the creditor, the creditor's

bank,

other innocent

any

holder

that

dared

you

that

answer

not

their

circulation

could

it expect all
for

counters

posed

at par,

or currency.

effective

par

Every bank has been

par.

checks in exchange

own

clearance system can be made

possible, without these requirements.

usurpation of authority,

abuse of

or an

Is it

the part

power on

of any bank to require redemption of checks in currency?

raise our puny hands and refuse to

serve

in making

nation-wide par clearance possible, by remitting
checks in exchange at

for our

par, then we deserve to bear in silence

and alone, any grief or anguish that

creeks in currency over

There is only

suffer in redeeming

our counters,

around the country; that
one

performed for our customers

and

is—because

that

were constantly being shifted from

side of the continent to the other—north, south, east and

it's

and

afforded

has

redemption

We want

our

nor

op-

outstanding check

total

Let's be honest and frank about it.

customers to pay by

obligations

desires,

You would

currency.

of your

in that

check, and we know better

for the privilege of paying

attempt to charge them

is, have

bank

us.

items to be presented over its

of these

redemption in

the

convenience, profit and service that

circulation in currency.

significant

manner.

question

encouraged and promoted the circulation of

exchange toll

checks, in order that we might exact an
of those items that come back* to

all

Banks to remit in exchange at

given the option of remitting for its

^rest—through every conceivable channel, in order to dodge

is hardly less than the

their

No non-

par, or currency.

member bank has been compelled by the Federal Reserve

Under the Federal Reserve Par Clearance Plan, millions

question,

The service that checks have

then

only be brought about by the re-

of dollars in the form of checks that formerly cavorted

easier.

than

can

of these check transfers, a

the check in circulation?

party who placed
one

assisted in

has

who

versa! par clearance

demption of checks in exchange at

attempt to collect from the

the negotiation and redemption

charge

of thus serving him;

185

SECTION.

BANK

for redemption?

through the mails

We have assisted in putting them out into

escape the deadly exchange tolls to which

subjected under the old system,
liquidated into

are now

they were

being expeditiously

Credit and made available for service

bank reserves, in one-half the time required under the old
method of clearance.

Is it an abuse of power to make avail-

able for commercial uses these tremendous sums that under
the old system performed no such meritorious service, but

the other hand was responsible for

pyramided and dangerous

reserve?

fictitious, padded,

Think of the millions

of increased interest received from balances
correspondent banks, which

every

deposit with

bank has

received its

share of, as a result of the time saved in clearance under
the new method.

Is it

abuse of power for the Federal

Reserve Banks, at great expense to themselves,

to place*

circulation, presumably with the avowed Intention of penal-

this equitable, this reciprocal, this nation-wide service at

izing all

the disposal of both member and non-member banks alike,

possibly

can

of them when they return to us

through

the mails.

you can,

and of waiving it when you can't, on all checks that

reach

in this

This

of getting

idea

exchange

when

is nothing short of reprehensible

manner,

without cost, giving them the option of remitting in exchange

for their own items only?

or currency,
power to

Is it an abuse of

perform this economic service which enables the

practice;

it's exacting tribute along the

lines of least re-

general public as well as banks, to participate in its benefits,

si stance;

it'smaking the helpless submit, because they are

and that enables the drawer of every good check to know
that the check of his bank—your hank—is worth its face

It will

powerless to protect themselves in most instances.
thus be seen, how under the old

developed

subtle,

wasn't

victim

the

because

which cannot be condoned

present

where

through

well

this

pass

date

benefit of every bank?

banks,

currently throughput the length

suffer

becomes a minority body of bankers to band together for

the purpose of resisting and defeating the operation of an

measure

of usefulness, and permitting it

The

new

of par

system

When we

institutions

place

check

will be honored at 100 cents

whether presented

If hank-

will not in these perilous times of reconstruction and

over

system

wrongs,

methods

economic

banking inaugurated to eliminate

and to eradicate unsound and indefensible banking

and

practices, then

they

have defaulted

obligation to their country and to their profession.
a

in an
It took

world situation to demonstrate the worth and'saving grace

of the Federal Reserve Act.

one

will attempt to deny

with honor and credit, the service which

and its banks was preserved by the Federal Reserve Banking

have performed

in return for a charter granting special

render the

public.

closing

privileges,
I want

were

and

grounds that it is a

usurpation of authority, and

abuse of power on the part of

the Federal Reserve Banks

compel us to remit in exchange at par.

there would have been panic

System, and that without it.

refer

briefly to the argument advanced against par clearance on

ers

that the commercial and industrial stability of the nation

our

time when sound methods

communities'; that

duty to

the

readjustment, stand for the enactment and enforcement of

that we have discharged our

There never was

economic laws; if they will not make some contribution to

that

counters or through the mails, then we may proudly say

created

out the nation.

and correct banking practices were so necessary.

innocent holder

it;

the dollar, in currency or exchange,
our

scientific, constructive and economic clearance

system/designed to serve as a unified transportation sys-

negotiation and liquidation, shall be made

who accepts

deduction called exchange.

our

equitable,

The old system of .' .tern in the mobilization of credit and bank reserves through-

the country check of its efficiency; it dis-

banks, and give notice to the world that every good
on

and obligation of every banker; when every ounce of our

by its terms;

service of that kind at the disposal of the depositors of our

drawn

period of reconstruction in the world's finances;

when the observance of economic law is the bounden duty

check to the honor and dignity of func-

the drawer of every good check to know

creditor

service that will reflect

great banking power must be made available for the highest

clearance enables
no

degree of service and the greatest possible usefulness, it ill

business world.

that

Is it not

bank whose co-operation made it possible?

It makes every check able to liqui-

credited it in the

who assists in its

have never heretofore

the dollar without

the same measure of value.

enjoy

on every

Facing

they

Is not that a service that will redound to the

credit

tioning side by side with the city check, enabling it to dis-

clearance robbed

enjoyed?

that provides for

amount of indebtedness indicated

raises the country

charge the same

institutions an appeal

your

the dollar every-

cost

and breadth of this land at 100 cents

deduction for exchange.

I ask, will not that service;—made possible

only through the co-operation of all banks—give checks on

service that permits the checks of little banks

big banks to

without

union,

practice

standpoint,

value anywhere in the discharge of debts and commercial
obligations?

one

redemption of checks at 100 cents

depositors;
as

protest—a

defended from any

getting

afforded—easily exacted,

The Federal Reserve Clearance Plan is
the

practice

shifty

dishonest,

the opportunity

when

exchange

system of clearance, there

Uniform and uni-

disaster

could

have

throughout

escaped,

the

and yet.

land,

from

which

notwithstanding

bank

the great

service that the system rendered every bank, we witness
the

refusal of a

thankfully said)

relatively

few banks

(and let that be

who are asking for a Congressional in-

from destruction,

vestigation of the system that saved them
Why

CONVENTION.

BANKERS'

186

Federal

exhibition of ingratitude?—because the
Banks have asked them to remit in ex-

sudden

the

Reserve

Ite-

for their own items only.

change at par, or currency,

method of clearance
possible to redeem checks at 100 cents

fusing to give their co-operation to a
make it

will

which

everywhere, and by their refusal, putting them-

the dollar

sel ves

opposed to the redemption of their

record as being

compelling

time asking and

checks at par—at the same

own

their own

correspondent banks to provide par facilities for

body'of bankers ask that an

selfish use, this same minority
indictment

Federal Reserve Banks

the

against

drawn

I ask you,

usupation of authority and abuse of power.

for

against whom should the indictment be drawn—the accusers
It is the old question of selfish and

accused?

the

sonal

safe banking practices always

systems, sound principles and

who think their

have, and always will be opposed by those

private interests may be affected

selfish,

own

per-

Economic plans and scientific

exemplified.

interest

by new or

By Chas. de B, Claiborne, Vice-President,
Nations

When
Mr.

Allow
of

to thank you

adding

should

by darling schemes oppressed
listens to the fool's request."

subject of

"par collections."
While
had

attending

occasion

to the

meeting of the Georgia Country Bankers' Association,

waiter who

colored

bill-of-fare."

with a certain banker from Macon—I said
standing by our table, "George give me the

to lunch

was

forgotten

however,

Having,

glasses at the hotel, I

was

what was on this bill-of-fare.
George looked at me and, smiling, said, "Boss, I ain't got much education,
either."
Therefore, gentlemen, while I must confess that I feel quite hon¬
compelled

ored

the

ask

the apparent better

at
me

than

owing to your good!

words,

nor

nature,

tell
to

discussions

the

;>■

■

unfair

still

that

maintain
such

to settle

now,

was

un¬

such

important

the subject,
having all sides represented, those for and against, unfair not to have the
then after

but the business men as well, and

banks,

country at hand, for this not only concerns the

the

interest of

commercial

full, thorough and

to arrive at a final conclusion.

exhaustive examination,

Bankers' Associa¬
membership that I
took some steps; in November, 1919, I called a meeting of Louisiana bank¬
ers, and after a full discussion of the subject by the members, a representa¬
became, in the meanwhile, President of the Louisiana

There

tion.

developed

demand

insistent

from

our

the meeting, but

tive of the Federal Reserve bank was invited to address

little success, for just as the Federal Reserve bank, he as¬
sumed the attitude that it was the law, arid that, therefore, no other course
usual

with

very

to them except to enforce the law,

open

reriiit

persistent effort on the part of certain gentlemen in

and

then,

position

calling together the best experts

without

items

accept for collection

that which you, yourselves, do know."

you

seems

and

uncertainty
a

whereas

contend that not

only it is not the law, but that the opinion of the Attorney-General of the
United States is in evidence to prove that the Reserve banks are not to

of speech to

nor

then

unsound

was

technical question

was

worth—|

nor

utterance, nor the power
stir men's blood—

fear that he

judgment of our Chairman, yet I

I have neither wit,

Action,

all

ability to which I can lay claim—

any

"For

There

tell

compliment of addressing you,

this

pays

r:.

waiter

course

banks

the

showed

considered that such

committee

Our

clearly

This

collections."

"par

unfair

arid

sound

for the courtesy which affords me this opportunity

few words to this much discussed but very annoying

have

conviction.

than

the American Bankers' Association;

and Members of

Chairman

Collections.

Whitney-Central National Bank, New Orleans, La.

sink

vengeance

checks be denied tlie right of travel through all the avenues
of commerce, without being scalped of a portion of their
value for that privilege; must the public forego, and be denied the incalculable benefits which would be theirs by Tea¬
son of nation-wide par clearance—in order that the selfish,
private gain; the personal interests of a few banks may be
perpetuated ? If we believe that the rights and interests
of the greatest number are paramount, we cannot fail to
endorse the par clearance plan of the Federal Reserve
Banks,
If we feel that we are under no obligations to
make any contribution to plans inaugurated to eliminate
economic wrongs; to give to our country every banking facility possible under modernized methods; to eradicate indefensible banking methods and dangerous banking practices,
then indeed, limited is our conception of the duty we owe
the public and our profession.

by Federal Reserve Board in Enforcing Par

Methods Adopted

"How

modernized methods. Must banking evils be tolerated;
must the expeditious transportation and redemption of vast
sums represented by checks be impeded and delayed; must

subject before us to-day, to make it appear that we

non-member banks and banks that refuse to

if they can.

Let them deny this

par.

But, admitting for argument's sake that it is the law, our
the

that

banks

commercial

and

interests

contention was

been properly consult¬

not having

This is done with
the very evident purpose to becloud the issue, to belittle the opponents of
"par collections" and, especially, to reflect upon the National and State

ed, that the law not having been conceived or originated after a full discus¬

Bankers'

judgment of any branch of the Government without that full hearing, which

attacking the Federal Reserve Bank as a

are

Protective

The system
a

Association.

is not

issue-^-we simply contend that "par collections" is

misconception, but at best,

thing impossible—a plain

must

the

Board

banks

the

that

Board has

there

consent,

men,

good

why the

reason

should

ment

be not correct, we are willing to

Reserve Board,
result

in conjunction with

binding

banks,

force.

remitting at
arguing

use

stand

matters which

over

if that boasted

see

there

are

their

yield
well.

state¬

vote—

far

proved.

out of

will

are

by
in

the minority,

this will show it, and if not, why yield our opinion?
But,
take it from me, they don't dare put this to an honest test.
Along those
lines, I hope to convince you in as plain, concise and analytical way as I

possibly
I

can.

wish

personal, yet,
of its

members

facts

and

the

National

the

It may

good
pose

and

our

believe

plain

Not

"that

can

be fairly

you

and

Chairman of

you

depend

will do
the

upon

misrepresentation, not

facts and

formed, in'view of

entitled to all the

do,

Association, I hope
you

upon

cold

are

you

upon

figures.

others, and

Association

may

seem

our

pur¬

before

him

Mr.

ago,

Harding, the

discuss

this

present head of the Federal

committee of Louisiana bankers

matter

"par

collections."

Re¬

hope

what

ting

have

done

adjustment of

American

Someone may

the

subject,

This

bound

and

coincidence,

mere

in fact, are here to join
their support in the

co-operate,

to ask

The past dis¬

opinion in the American Bankers' Asso¬

large

main

in the
by

being would

whose officers would be of

organization whose
who

justified the organization
be the settling of,

measure,

for

reason

committe would

every

Bankers'

American

organization,

Reserve Act had

the Federal

mind

one

work

unit.

composed of
in the

option

who likewise

were

by the provision of the Act, and other bankers who for competitive
home cities

in their

beyond this, it

to devote
officers
with

officers

Association,

This, in

whose

bankers,

pet hobby of the officers of this

the

are

State bankers, members of the Federal Reserve,

reasons

but

explanation,

gentlemen from the very outset that

exhausting every possible means of get¬

division of

topic.

impossible

was

matter,

necessity

large

barred

from any

office

American

the

quite

and

sufficient,

organization

not

but

could,

say

would

the

and been

sum

activities in the

organization whose officers

with

funds

all

burdened

absolute

was

at their command
or

not therefore

already

there

cause—

prepared

were

Bankers',

above

organization who would vote $4,000

could,

Association

for

end.

were

required

great deal of time to this subject, men who

details

The

from

before

"Woodrow

Congress,

Wilson."

From

his

attitude

that

answer

had
we

conclusion, not that he had changed his mind, not that

the Board,

after a technical

convinced,

but because another branch of

academic discussion of the subject, had been
our

Government had

decided

the

honest
When

His

Washington,

campaign

bankers

changed.

intelligent,

"par collections."

was

Association

and

this

"par collection"—an organization

every

was,

A meet¬

Protective

ask, why the need of this new Association?

that there

closed
ciation

afterwards

one

being to have

preliminary

this

This subject, is
that

Bankers'

final

sometime

answer

subject.

and State Bankers'

purpose

after

stands prepared

organization
the

pardon

has been

fact

with

ap¬

meeting some one asked Mr. Harding why it was that at the
City meeting of the American Bankers' Association he had made it

draw but

main

made clear to you

fair solution.

Association—the
our

quite plain that he favored the idea of banks charging exchange, and yet,

could

will

you

that it

the

of the

discussion of the

the National

make the

of its' funds to

one

know the American Bankers' Association
Bankers' Association have voted such a

for I

American

prepared to vote

necessary

with the division

whiqh existed?

to New Orleans ;
to

the

formed,

was

for

6, in New Orleans, of those States, Alabama

that date

problems to the bankers of the country.
anxious

fight,

gentlemen why, and how,

the fact that it

of you here to-day that the machinery to accomplish

came

Kansas

success."

to be

already in existence.
years

course

Protective

when I tell

prejudice, just the

Board,

serve

for

was

you

before

detail

every

State Bankers'

few

peared

important subject,

be .well, therefore, that I explain to

many
was

very

desire

Association called to get the views

judgment, and appearing

pass

cause

organization

Some

meeting of

knowledge of

justice to

justice of

this

upon

full

honestly asked

appeal

this is

have

It was, therefore, determined that some united

upon.

called for February

was

National

gentlemen to understand that while

you

insisting

now

not propose to submit to the arbitrary

did

practical, and permanent solution of one of the most difficult and delicate

the

25,000

free

own

can

con¬

Let the Federal

committee of bankers, take

Let

par

uneven

If that

fall by it.

National

exceed

resources

the hopeless minority?

either party to the controversy

banking side of it is concerned.
30,000

other alternative

State banks should

Why

majority yield

State banks under

they outnumber the National banks and their

the

exchange.

State banks—that

the State and National banks.

when

the

charging

power over

expected to compete with

there

And

privilege

they will continue to charge—the Federal Re¬

acceptable to both

cannot

the

banks

national

insist

must, as business

plan

ditions.

are

important economic

"par collection" vel non, as all

that

be,

co-ordinate effort should be made

ing

must

the Federal Reserve

some

and

State banks

serve

come,

We contend that
either establish universal par clearance or

the matter

questions should

Reserve Board

return
as

if it must

sion

by evolution and not by force and coercion.

the Federal

That

system.

the

stop

one

Federal

this

think,

these

pieces
the

Reserve

addressing of
of

education,

country

judgment
you

separate
idea

the

Federal

banks

some

details

the

there
was

60,000

connected
with

fact, that the Constitution

has

been
that

Board,

matter,

literature

Government

which

conviction

banks

has

are

been

30,000

circularized

with
the

made
our

idea

long,

150

still prevailed,

this

arouse

frank

country;

involving

the

fear
and

the

that

mailing

occasion including five

one

enclosures,
Then,

State

nothing to

tedious and expensive.

banks in

fight.
that

had

expressed

twice,

letters, and

which

necessary

they

if they

you

order

sovereignty

it became

necessary,

get
to

was

some

impress
still

not only to

STATE
appeal
of

the

but

the

courts

Sixth,

also

for

against the Federal Reserve Bank
Atlantic District, and which injunction is still in effect,

happy to

By Mr. C. A.

to invoke the aid of the various State Legis¬

morning and took

that in the short time allotted to

say

State thus far appealed to, namely,

everj

kota

and

Georgia,

1/10 of 1%,
checks—this
lation

laws

passed

Mississippi, Louisiana, South Da¬
banks

allowing

charge at

itself

the rate of

some!

faith by

all good

assure

can

you,

gentlemen, that the most calm and sober judgment guided us in this action.
It

became

stood

had

recede,

recede

compromise, but they

force upon the banks this idealistic idea of

it,

resorted

methods
minded

display of

such

this

United

try of

To think that

the

justice

of their

for

cause

did

people,

not,

but

success,

fair-

every

have been

could

Government

and would

not,

Mr.

Such

State

Bank

submitting to
EXTRACTS

Section

the evidence

you

FROM

HOUSE

the

American

upon

which is

HEARINGS BEFORE

such

THE

Association

COMMITTEE

following

Rules to show that the

RULES,

force and coercion to

By J .
"I

Board

was

using

■

v'--

that he was trying to embarrass us at
would sign the agreement with the Fed¬
eral Reserve Bank, and he stated to me that this was a fact; and further
stated that he was sent out with these instructions, and also explained to
me that
the Federal Reserve Bank had an unlimited expense account, and
that

him

not

was

point to the extent that

fact

that if we did not sign up the agreement that other pressure would be
brought to bear and that sooner or later we would be forced into it.
"I went up to Burkeville in person and talked with him about this propo¬
sition and told him that I was of the opinion that the Federal Reserve Bank
had

not

sent

out under such

man

instructions,

and that

Woods Cones, Pierce, Neb.:

"While

bank force was counting out the money (about $10,000
legally required to carry in our vault) to Mr. Bishop,
Bishop was a United States marshal, hard-boiled
and armed; that he had cleaned up the State of Kansas and would get us
anyway, so we had better sign up the agreement and keep our money.
"Bishop said that a banker in Kansas, who had the only bank in town,
held out against parring, and that he told him they would start a National
bank and drive him out of business, and that he personally was instrumental
of

one

than

our

are

Mr. Lower told

that Mr.

bank, and said he would stick to it until he
entirely.
came
along later and claimed they were
peacemakers direct from the Federal Reserve Bank of Kansas City.
Said
that Lower and Bishop were damned fools and had done entirely wrong at
Pierce, and advised us to forget what Lower and Bishop had done and sign
up as the day was near when we would be forced.
"On or about the 14th day of January, 1920, Mr. Jones joined Mr. Fairley and Mr. Bryan and has acted as notary public protesting checks pre¬
sented by the foresaid agents of the Federal Reserve Bank of Kansas City,
notwithstanding such checks were indorsed on the face, 'Not payable
through the Federal Reserve Bank, their branches or agents, nor express
company or. postoffice,' and are continuing to protest
such checks when
we refuse payment of
them in their hands, and in one case have presented
a oheck a second time and protested it each time.
"Every agent of the Federal Reserve Bank that has been here has advised
us
in
substance
that they were spending the
Government's money like
drunken sailors and will not stop at any expense to force us to join the
starting

drove

the

"Mr.

the

National

banker out

Kansas

Jones

and

Davies

Mr.

system.
"One

competitors told

that the Federal

Board had

Reserve

that Mr.'Davies told him in substance
a

steam roller

the

way

from Wash¬

ington to crush me personally and ruin my bank if I persisted in refusal
to comply with their demands.
I subsequently called Mr. Davies's atten¬
tion to this report and he personally acknowledged to me that he had made

have

statement

substance."

Wilfley, Steel City, Neb."

R. S.

By Mr.

said

Reserve

Bishop stated

instruction

from

that the Federal

the

bank

Bishop also advised the said Wilfley that it would be advis¬
able for him to sign the card which he presented, saying that it would do
no good to try to fight the Federal
Reserve on the matter,..as they intended
to 'put it through' regardless of what the State banks thought of it."
By O.
'The

the

sign
the

other two

Federal

came

Reserve

the

Bank

Omaha,

Neb.,

themselves

and that

agents
have to

I would

the card they presented, it being an agreement to par all cheeks for
Federal Reserve Bank.
They also advised me that they were in position

regardless of my wishes in the matter.
they would send our checks to us through the mails
as
we
were
in the custom of receiving them from other banks we would
handle them on a satisfactory basis.
They advised me that they would not
do so unless we 'signed up/ when I advised them that I did not feel that
I should sign the card.
'They presented a large number of checks, the accumulation of several
days, amounting to $11,197,69, and' demanded payment in cash.
I offered
them a draft on an Omaha bank where we keep our reserves banked. This
to

compel

"I told

rue

to do so,

them

that if

refused and advised me that if the cash was not paid to them they
would protest every check in their possession, and they further advised me
that if we did not 'sign Up' they
(the Federal Reserve Bank) would see
that this bank would not be able to borrow any money or discount any
notes with any National bank."
they

all

Chicago,

that

to accept exchange from banks who will not
irrespective of any hardship it may cause that

cases

the

were

attention

investigated and advised

law

cannot

you

Reavis: And when

the

Board

bank to

has

sign

been

the

par

them

force

do,

you

exchange from

they refuse

demand cash and refuse to accept

you

in some cases that that has been done.
Mr. Reavis: You not only demand cash but demand legal tender?
Mr. Harding:
By having these agents at these points it may be con¬
tributory to our being able to finally have them all do so.
The Chairman:
That is, the other bankers viewing the methods em¬
ployed, rather than subject themselves to the same methods would come
to your terms ?
Mr. Harding:
Possibly; YES SIR.
The Chairman:
Is it to the money-making advantage of the bank that
it gather more of the country banks within the system ?
Mr. Harding:
We had some figures made the other day as to Whether
or not,
if all the banks came into the system, there would be enough gold
to maintain their reserve.
There are 15,125 non-member banks—not eligi¬
ble because they have not sufficient capital.
The Chairman:
Would it make money
for the Federal Reserve Banks
if these non-member banks were to come into the system?
Mr. Harding:
No; I do not think so.
The Chairman:
Then why the insistence on the part of your agents in
Dallas, Houston, Atlanta, Nebraska and other places that these bankers
should come in ?
Why do you present them with the alternative of signing
this card or paying their checks in cash?
The Chairman:
Governor, going back to' the original Federal Re,serve
Act; the system was created by the Act for the service of the banking in¬
terests of the country; now why is it that the Federal Reserve goes to
these extremes to procure members of the system ?
Mr. Harding:
We are not trying to procure members of the system.
The Chairman:
Then why do you give them this alternative and favor
them if they come in ?
Mr. Reavis:
Would you not meet all the requirements and obviate all
the hardships being visited on these country banks if you did what the
Attorney-General says is your-duty to do, not to clear the checks of the
banks that refuse to sign a par agreement?
Gov. Harding:
I do not think he says that.
It

appears

Opinion of the Attorney-General of the United States.
The

Federal

Reserve

Act,

however,

does

not

command

compel those

banks

State

to forego any right they may have under the State laws to
charges in connection with the payment of checks drawn upon them.
The Act merely offers the clearing and collection facilities of the Federal
Reserve Banks upon specified conditions.
If the State banks refuse to com¬
ply with the conditions by insisting upon making charges against the Fed¬
eral Reserve Banks, the result will simply be, so far as the Federal Re¬
serve
Act is concerned, that since the Federal Reserve Banks cannot pay
these charges they cannot clear or collect checks on banks demanding such
payment from them.
From what has been said it follows that in my opinion the limitations
contained in Section 13 relating to charges for the colleciton and payment
of checks do not apply to State banks not connected with the Federal Re¬
serve
System as members or depositors.
Checks on banks making such
charges cannot, however, be cleared or collected through Federal Reserve

make

Banks.

And

remit

Bankers

some

par.

will

ask

tell you

these

things—they

those

abuses still

those

told

not stopped.
this

That

the

this

and

The

Federal

make

that

Board

not

economic

not

country

tics

answer.

particular divinity
men,

must

management, judging by
on
or

Government

pay

now

the

the part of

the

operation of

the

you

views,

Par collec¬

it must be by evolution, not by force.
to

they

are

remitting against their full
Mr. Harding in his

be admitted by

This shows conclusively that it is not the
as

believe.

savings and allow 55,009

five to six thousand.

cling to exchange who

to their

lead

are

trying to force the balance

the publications of

But it

the Federal Reserve

is a Government agency which

banks to a course of
against their withes, and attempts by misleading maps and statis¬

by might has forced
not

course

any

ownership,

those figures seem

bankers who still

action

they have

sharp

bankers, of all

infallibility

testimony before the Committee.

would

You

presumption of

but when it does,

come,

even

equally

want Government

When 20,000 of our 25,000 admit that

the

you

guilty

why?

I say this because I saw where it has been recommended
States

United

hedged about

forces.

branches take savings instead of the

few

tell

men

for complaint, are we not entitled to the hearing

Reserve

hanking business.

Board

so,

not entitled to the full support of this organization

does not justify any

all-important discussion?

past,

wish/ and

stop.

received

that Government ownership,

Government.

the

Are the

cause

this

immune from

now

tions may

would

coercion

this

change the fact that not only was the system
but continued to offend.
Have not the banks of

that

have believed

they did not know

are we

just

asking for,

the solution of

employ of the Government?

confess

however,

not,

country

are

you

I had occasion to correspond with Mr. Harding rather sharply

guilty of those offenses,
we

would

told about them May 5th.

were

methods

subject,

does

non-member has been compelled

all frankness,

the Federal Reserve Board told

course,

were

you

know

wicket and introduced
of

then

What I want to get into this record is the fact that when¬
non-member banks will sign the agreement to do that
thing,

said

Irwin, Loretto, Neb.:

and he said

Kansas

was'powerful enough to make good whatever they started out to

The

do.

Reserve Bank at Omaha had
City, and they in turn from
the Federal
Reserve Board
at Washington, to
place the entire State of
Nebraska on the par list of the Federal Reserve Bank of Omaha on the 20th
day of December, 1919.
This action to be taken and all the banks of Ne¬
braska placed on the par list regardless of any action or wishes of the
banks affected.
The said Bishop went on to say that the Federal Reserve
Bank had the United States Government behind it, and that the Federal
"The

reoeived

the next

Bank

Reavis:

possible?

such

I considered that

it took a first-class crook to pull off a deal of this kind, and such other
things that I might have said to him I prefer that you have him to repeat
them to you."

By Mr.

came

Reserve

refuse

Mr,

compel non-member State banks to remit at par.

0. Sims, Orange, Texas:■
asked

and

Federal

in, and that if

exchange?
Mr. Harding:

submitted before

Federal Reserve

And

which

CONGRESS,

affidavits

letters and

from

extracts

are

the

come

them. V-ZVV vZyt
Mr. Harding:
Yes, sir.
v

May 4,
The

the Committee

draft

from

had arranged with the First National

agreement,

par

these

ever

without

based those accusations;

SIXTY-SIXTH

REPRESENTATIVES,

take

man

better

Banks

matter,

Harding:

called

representative body

Bankers'

Reserve

the

Reavis:

Mr.

charge, gentlemen, cannot be made to

the

better

agreement.

put it into effect.

had

draft.

I told him

your

Air.

upon

might and persecution to

upon

bank?

coun¬

depend

him

and told

Federal

care

sign

agency

of this all-powerful

the machinery

States, backed

hundred million

one

coercion

Socialists and Bolshevists of this

the

country than the law-abiding bankers.

instances to

some

condemned by

and

energy

against

effectively

"par collection," and in order to

must be

and which

see

they got their orders from
Bank to
anything like that was done
they would not furnish the money to the First National and that they could
prevent any National bank from furnishing any accommodation."
Mr. Harding:
I know of cases where there is no hardship imposed on
the bank in paying cash.
Mr.
Reavis:
Without regard to the hardship, do you not accept ex¬
change at par from any bank that will sign this agreement to be obedient
to your rule?
-v.-. ' ' /
Mr. Harding:
We do.
take

But all attempts to make
the Federal
persisted in their plan to

persecutions, and in

means

questionably legal
banker—a

much

used

all

Wallhof:

told

Washington.

not only would not

had failed;

compromise,

Reserve banks

foroe

of'the

For, if the Federal Reserve Board

they had 4he Jaw\ passed in other sections.

them

The Federal Reserve Board

fire.

technicalities of the law, when you well know it is purely

business, not law, involved.

desired, they had, in my opinion, the power to have the law amended

just

fire with

fight

necessary

proudly

matter of

187

did not they
would make it hard for us, as
they were going to catch -us some time
with a lot of checks which we would have to be
prepared for. We told him
vve thought it unfair to force us in that
way and that we were not ready to
sign the par agreement.
Later we found out that during the noon hour he
had gone to several business men in town—one
attorney and one real estate
dealer, who happened to be a director in our bank—and tried to get them
to handle the checks for them and to
present them in a bunch, but he did
not succeed.
After dinner, when I came back to the
bank, I found the
gentleman still there, and he said that it was not the fault of the directors

that

us,

then

came

be questioned in

may

thousand, and prohibiting the protest of such
required no little effort.
The wisdom of such legis¬

$1.00

SECTION.

injunction

became necessary

latures, and I

BANK

based

action.

overwhelming majority of

.free will,

ljjut

result of

supposed law, to justify their

This

not

all the banks, but it does not change the float. Each bank still carties its reserve against a deposit which it cannot use, but which the custoiiier, can. This is mentioned to show that the banks are being asked i>
do something which others admit they cannot do—and I agree with them,
They cannot do it.
:V-/"/
Some time ago the Credit Men's Association of New York published the/
statement that par collections had saved $150,000,000. Saved to whom .
What they should have said was that a loss of $150,000,000 was placed
on the country banks which properly belonged to some one else.
If that
be not a fact, let them show if goods are sold for less in States that par a>
against those that do not. Let them show that exchange is not included
in their cost of doing business, or has not been charged as an expense in
their income tax returns to the Government If they mean that par coilections saved to their members $150,000,000, and the buck was passed
to the country banks, that statement may be true, but that is not the
meaning of the word "saved." Did the public get the benefit of it? I
say no—standard goods sell at a standard price everywhere in the Union,

'is un-American, but is unfair, unbusiness like and almost
an officer in a National bank, member of the Federal Reand as such remitting at par in compliance with the Act

among

only
I

cowardly.

System

serve

CONVENTION.

BANKKKS'

188

which compels all

But I say that every law to be effective

member banks.

discussion, free and
the facts in the case, not based
upon idealism, appeals to patriotism, expediency.
I say idealism, because "the proper academic technical discussion of this
matter has never taken place, and this law bears every ear-mark of the
present-day, socialistic tendencies of Government—something for nothing.
I say patriotism/ because during the war this matter was allowed to lie
dormant because we did not desire to in any way interfere with the more

and

open,

roust

lasting

based

sound,

intelligent

upon

after submission of all

only

A thing we cheerfully did,

important duties of the Federal Reserve Bank.
and will

tion
if

cheerfully do again.

expediency, because when our Associa-

say

Mr. Williams asked

appeared in May before the Federal Reserve Board,
taking advantage of the

were

Banks to

started

Board

'par collection';

conditions to force the Reserve

money

The

now.

he received

answer

to you to stop,

was:

"Your

not the banks, if

disturbing factor.*'

strengthening its machine to

doing—mobilizing its forces,

Board

Reserve

and if we now stopped, would the Reserve Bank stop—agree not
until some such time as it would not be that

us,

"par collections"

force

Willianfa alludes to—certainly they would not.
compromise with the banks, consenting

Mr.

disturbing fabtor

other words, his suggestion to

the settlement, that we continue to remit at par is very

to postpone

much

about /the compromise of the husband and wife. A discusbetween husband and wife as to what color the home
should be painted—the wife insisted on white.
After ,quite a heated debate,
the wife said to the husband, "let's compromise and paint the house white,"
and the house was painted white.
Some compromise!
So much for the general discussion of the subject ; liow let us look at it

like the story
took

sion

place

economic

question.

banks of the country

The

private institutions, supported by private'

are

under State and Government supervision, primarily organized for
as public institutions their function is to serve the public—

capital,

profit—while
they

higher duty to the public than the other public service instia service without just and fair compensation.
Just as
would contend that demurrage is a useless charge on transportation,

owe

tutions, to perform
no

one

just
on

should he heard to say that exchange is a useless charge
some of the idealists have been heard to s^ty, both serve

one

commerce,

If exchange is a service, and it unquestionably is, and if
does, then on what economically sound busi-

their purpose.
it

for

it undoubtedly

and

costs,

For,

nothing?

would

for the banks
minus

banks

should the

principle

ness

be called

the country

banks of

well

are

' <
1
to their local com-

substantial taxpayers

Federal Government for their franchise to do

to the

than their full share of taxes, and that
profits as shown by the New York

They contribute more

business.

banks

their

advisably.

made

statement

that service

to perform

upon

in that event, the word "par" would he a misnomer,
he out the expense in addition, which would make it

par.

The

munities

1 The

2%.

only

perhaps average

would

deposits

The cost

is continually mounting, and I believe I can safely say in all
banks, as well as to the public, that the average well-man-

operation

to the

fairness

giving the public as perfect a service as conditions
upon additional free service simply means
shifting of the cost of doing business.
There must be a margin of
profit in the banking as in any other business, and a safe margin at that,
or you cannot attract capital.
Therefore,,to ask a service at par, which is
a loss,
means the unit of cost to earnings must he shifted.
This principle
is absolutely sound.
Admitting, and we must admit, that the average bank
institution

aged

afford.

attempt to insist

Any

only makes a fair return on the invested capital, any encroachment of the
now small margin of profit on deposits, means the loading of other profitable
the additional loss,

with

units

But I

Reserve

remit

Board, admits it

checking accounts and

Who is asking

par?

tion—in

other

ask

If that

it?

not

funds

for his goods, he might

all

selling

concerns

dealing with

deposit

can

Stone

Company,

local banks

their

New

York,

only obviate the New York banks' exchange charged on

would not

This
the

New

enormous

the

fact

must

Company can deposit

in New York?

the

Orleans

the

larger

the

reduction

created by

check

local

deposited

whereas it can only receive deferred
Bank,

Reserve
case

lose

equal amount

by local check, the

payment

the New York bank are nominally in-

without having

received
previously stated, there is no
immediately available.

reserve
as

made

Experience shows that
little

direct.

which

dollars),

which

by the amount of such check, and they must carry a proportionally

creased

since,

for it,

that the deposits

is,

billion

item at the Federal

collecting it

result

bank

York

contribute toward the

would

but

(estimated

New

immediate credit

for the

time

checks,

float

that

give

credit

out-of-town

ask for payment in

can

at par?
In other
in seljing to Smith, of
Orleans, ask that Smith remit in New York exchange, which Smith
they

cannot

par

net

but

that view.

buy at par in New Orleans, and which Stone k

can

that

fact

which

words,

man

knowing that banks charge exchange,

customers,

New

the

the only medium of payment

was

if the facts justify

see

words,

Why should the banks

don't.

some

this service?—the Merchants' Associawho sells the goods, and why should he

for

He might argue that it was a useless charge on business,-

complain.
let

is not an essential feature of the Federal

Let the banks par that want to par, just as some banks

System.

interest

pay

margin of profit is impaired.

now

made to

Federal

of the

your

ask here—who is asking for "par collections," that an attempt
force it upon unwilling banks?
Mr. Harding, the head

may

should be

than

25c.

anything to create such reserve,
in which the local check can

way

charge of $1.00

thousand

for

thousand leaves a profit of

handling the

checks.

The help

stamps, stationery, loss of interest on funds with
cost of creating the exchange, make up 75c. a thousand;

operate the department,
which
in

remit,

other

words,

Board

would

asked

Federal

called

And that is

the

volume of $100,000 of checks,

useless charge on business.

this

Banks,

Reserve

cost

why

petty
it

was

exchange
so

profit of $25 left.

When the Federal Reserve

charge was not

petty, they

paid by the
properly it
and that the

answer very

Federal Reserve Banks $136,000,000

year,

could not sustain such an expense.
The only difference, therefore,
if the banks absorb this charge, is that, instead of one institution, it is

system
speard
was

absorb

30,000 banks.

over

asked

deferring

why they did

the

Immediate

two,

for

float.
use

billion-dollar

and

float,

But the cost is there.

When the same bank
instead of

not give immediate use to the banks,

three and five days, the answer was, they could not
Again, what is the difference?
Each bank does give
thereby
and

each

again

the

par or no par.
i

appeals were being made on our patriotism, what was the Federal

When

fight

of action

course

some

this discussion is a

bank carries its proportion of the one
only difference is, the float is spread

We are told—have not the benefits derived from the Federal Reserve Bank
compensated for the sacrifice we are asked to make? In some respects they
have. No one denies that it has been a wonderful help, not to the banks
alone, however, but to the commercial world at large, and to the Government in times of war, but when mentioned in connection with "par collections," it has not. A benefit is no offset to an evil when there is no
reason for the existence of the evil.
The banks to-day, while the law compels but 10% reserve, must as a mutter of fact keep nearer 25% in
order to do business, so that not only are we deprived of the interest, on
the Federal Bank reserve of 10%, but with the cash which we must
have amounting to at least 7%, it means that under the present system
we have 17% of idle funds, whereas formerly we had, say, 12% in cash,
balance in reserve agents on which we receive 2%.
Now, take a country bank that deposits its items in the Federal Reserve Bank.
The bank accepts them, so they say, at par, but not for
immediate use, but every banker knows full well that is not par. The
word "par" means at par and for immediate use. But immediate use cannot be given without absorbing the earnings of the system. Mr. Harding
says it is par, nevertheless.
These are the gentlemen who depend on the
law. In that particular case we do not hear so much about what the law
says.
So that, as these funds are not available, they do not count as reserve,
and further the depositing banks cannot draw on these funds as they for*
merly did under the old correspondent plan, and it, therefore, takes more
working funds, which means more expense—depending on the number of
days they are* out the interest.
Mr. Harding, himself, is quite specific on this point, for, in a letter
signed by him he says, "But for the fact that the country banks are able
to have their out-of-town items credited at par by city banks, there is no
doubt more would join the system."
The Federal Reserve admits that it costs, says it' cannot absorb the cost,
but argues that the banks should absorb it because it means little to each
bank.
Boiled down to its final analysis, that is their answer.
It costs
you what it would cost us, but there are 30,000 banks to divide the loss$150,000 additional load, or tax, you might say, on the banks,
Some tell you the old system has defects—no doubt. It would not have
been human otherwise." Did it, however, cause the howl which par collection is causing? The old system was certainly more direct—mailed
directly to the point on which drawn.
To-day you have one more delay,
at least one more intermediary, for the Federal Reserve Bank sends the
item to another Federal Reserve Bank of the district in which the drawer
bank is situated.
You have just as much kiting of checks, more delay, because items are
not mailed direct. The same loss of interest for items are riot deposited in

Federal Reserve Banks for immediate use—and from that very fact

they

have had ho assistance in mobilizing reserves.
You do not have the use of
the funds, the same float still exists.
In fact, formerly a country bank

could

deposit

its items and draw against them, which they cannot do

now—in fact, it is less liquid—ties up the funds more than ever,
Some will tell you checks were intended to circulate at par—to charge

exchange is equivalent to a tax on checks. Checks never were intended to
circulate at par except when used in their ordinary channels.
When
abused or improperly used, checks are subject to the charges which those
abuses bring about.
A tax on checks would apply to all checks, when

|locally used, as well as otherwise, but exchange is a charge only on certain
checks and for transferring funds, quite different.
Again you hear, why
should a hank be unwilling to cash a customer's check, or pay his check?
Every bank is only too glad to cash all checks over the counter—that is
the usual course of business.
No bank ever obligated itself to make the
depositor's checks available anywhere the customer sees fit.
He has no
business to attempt tb discharge an obligation in that kind of currency.
When he does so, it is either because it is to his advantage, or for some
other personal reason—and the merchant who accepts this check is not
innocently accepting something he believes to be par—he knows it is not
worth par. He does so for personal reasons, very likely because the other
merchant does—competition. He, however, puts it in the bill.
The buyer,
the drawer of the check, pays for it in his next bill of goods. Why all this
talk about the innocent, the helpless, who are powerless to protect themselves ? I say that every merchant, when he accepts that check, does so
with his eyes wide open.
But, in fact, it is difficult for me to see this
solicitude ^bout the poor merchant.
My banking experience shows me
that after life's journey the average merchant has more of the goods of
this world than the average banker. Another myth is, that par clearance
provides for the redemption of checks at 100 cents on the dollar—without
cost to banks or depositors.
*
You have the par system to-day.
Can a merchant in New York deposit

check on New Orleans for immediate use?
No. Can he, in New Or:
leans, deposit a check on New York?
No.
Ask the average city bank
what it makes on exchange. Get the answer, then ask a country national /
bank, which must remit at par but cannot charge exchange to its cjs
tomers, how their exchange account stands, and judge for yourself; be hon
est, and I say it will show that the country bank is working under a
big disadvantage as against the city bank.
Consult your own books—
a

don't take my word.
I have mentioned all

these angles of the case merely to open your

minds to all the features of the discussion—because some bankers do not
seem to understand what the fight is about.
1
We are not asking all the banks to make a charge, to charge exchange,
all we ask is to be let alone. That is little enough.
Every banker that
wants to can continue to remit at par; let those par that want to par.
Let those charge who want to. That's the whole issue. We say there is no
such thing as par even to-day, and that such a thing will never be—check
currency at par.
Is there any currency that is not taxed something? Is

STATE

;

1
.

Money orders cost, express orpairing of checks was passed really

war

The appeal

measure.

by Mr.

"par clearance/'

Any way

you

Now

let

Wilson

the

;/'*■

last minute

;

what

banks

questionnaire sent
Association.

think

out

"par

the
so

look

Federal Reserve

they

National & State

Bankers'

its

legal

the

"An Act

law—they

well

for the-establishment

furnish

Everyone

knows that

the

elastic currency,

supervision

long discussion

banking

familiar

Federal

the

that

(although of

late,

best

Bank

this

and

the

was

this

the

other

wa«v' attacking

Mr.

Glass:

Owen, 55 Congressional

Mr. Glass in

the House,

pages 3526

"The

District.

Amendment should prevail.

-I

lo the conclus.on

one

the

„

hat

Federal

„

refers

Bank shall

Clearing
Clearing

receive

House
House

Act

bound

"Everv
every

savs •
says.

establish

Reserve
Resene

from

Federal

Reserve

Banks, checks drawn on any of its depositors (depositors
only).
Therefore, it cannot accept, according to this Section, checks unless upon
depositors, and tins paragraph especially allows a charge for remittingand

there

is; positively no prohibition against charging to Federal Reserve

a"ks in this Section.

Paragraph 127 of
stance

with

section

,y-

10,

regard to clearing functions,

they

the

uses

word

that

"may,"

if it

every

are

first

If,
for

the other hand, the F ederal Reserve Board depends upon Section 13
shall
is not used,
but on the contrary

its

supposed power..the word

the Act .says,

ber banks
or

"Any Federal Reserve Bank may
deposit, checks, cash, etc.r

et<v'

may

receive

,s.

discretion, but items
United States,

tion

that

makes

botes ^payable with m its district.
used, which

may

the

against the Federal

word

over

the

sec-

is the one that applies to nonfor the purposes of exchange or colnon-member bank."

may,

"or solely

any

which

one

This section,

open

Reserve

seems

adds

"but

such

charges shall be made

plam. that it

very

not the

law

which

they are pursuing, but merely a desire to force
this system of par collections arid
attempt to justify their actions by pleadinf "the majesty of the law."
•

•

not

checks
,

course

only are they violating the spirit of Section 1.6 by
accepting
non-depositors and depriving the banks of fair compensation for

rminBibound
are

the spirit of Section 13 by making it
the word

they

to enforce "par collections" when

ivish
well

By F.

Merrick,

Bankers'

Association

has conferred upon me in
requesting that
/

this meeting does not permit

for

such

wide range

might be-termed

discussion of all

State
era

that

part of

Banking System itself,

1- terms only,

are

subject

most

is concerned

It includes

important.
which

pertains

are

familiar with

the

to
in

the
gen-

history of

country.
sys-

banking

knowledge, from which
periences,

even

State bank—the

we have derived very beneficial instructions and exhave paid pretty dearly for some of them.
It was a

Bank of

Pennsylvania—that furnished the funds

ing the Continental Army at

for ration-

of the most critical periods of the Revolutronary War, and it has been truly said that the real history of
banking
in

the United

States

The

State

any

other system;

one

only began with the establishment of that institution.

Banking System, accordingly, has been
in fact, from

1836

1861

in operation
was

longer than

the only

recognized

banking system of the nation.
The
ment

State Banking
of

new

local needs,
■will

sources

System has always been the pioneer in the developbanking power, and in their adaption not only to
commerce of the nation, and it is evident that
they

but to the

continue to exert the

same

influence in the future

they have in the

past in this respect.

Notwithstanding
unsecure

clear that

very

are

Every thoughtful banker be-

% ?ersTtio,,B1 to f "f
aI1Bbanks

1)ensatjon

and

should

a/ti!!ciaf1

■

will

accord

just

com-

extensive

facilities

B„t, gentlemen,
^

:ire

4,rdse

la„.fia

wheI)

banking business,

should

6uch

PwleraI

i£eserve

anowecj

some

Bank f

betwcen

Board

powers/cam,ot he the subject of
authority violates fundamentals of
is

Reserv(! Act admit

the

the Federal Reserve

powers

they must, however, be subject to the

fundamental

the

say

Tliese

exertioll

and

T]len w„

be,

the Act.

„ the Federal

twee# banka.

But

admitting that the

extensive,

!iraWe jimUatiolls of

all.

bailks

not

our

Ule

and

case

JlMtI

not

service,

that

betweeI|

both*Section

o( cha

would

„

baI]ks
have

not

be.

d the

been

between banks.

compet «par collections" seems to me an
arbitrary interference with
long-established customs on which banks have been
built, and thereby
communities assisted, and has no substantial relation
to the promotion of.
commerce.
I can only see it
to-day as some misconception, a mistaken

economic view.

While it is so, however, that
every enactment presupposes the possession
^cowledge to warrant the action taken, I must confess that if this be
t}ie ]aw an(j not simply the action of the
Board, such legislation seems to
Amount to the taking of the
property of one and giving it to another in
violation of the spirit of fair
play which the Constitution intended to seof

cure

all

coming under its protection, and it is a striking illustration of
that method which has
always been deemed to be the plainest example of
nrhitrary action, the taking of the property of "A" for the benefit of "B"
by legislation.
0ur

has

case

not

been

better

stated

than

the

words

one

the

judges of the Supreme Court of the United
States, who said:
"The history of the world has
taught the framers of the Constitution that
what was done in the
past might be attempted in the future, and
that,
therefore, constitutional guarantees should not be sacrificed because of
publie necessity, not taken
away because of emergencies which might result in
inconveniences to public or private interests. If this be not so, the constitiitional limitations for the protection of life, liberty and property are of

frarners

of the

WSSSgZVSitt

Constitution intended should be forever
protected
by any bfanch of the Government."

invasion

from Gov-

many

ous

Under these circumstances

it is small

pioneering forefathers engaged
However, it is only fair to
ences

in State

say

wonder that

of our over-sanguine

some

pretty risky financial enterprises,
that out of these crude and empirical experisome

banking business .which often proved only
fortune, there have been evolved

honor and individual

costly to individual

the

greatest financial

ever

seen, namely:
The State systems, with 21,961
institutions, and $29,024,095,838.83 resources, and the National
system, with
7,933 banks, and $21,862,540,000 resources, both
meeting a financial dernand for service in their respective lines, both
absolutely necessary for the

welfare and progress of the
nation, and both equally interested
the maintenance of the highest
banking standards.
The creation of the
Federal Reserve Bank has happily brought about facilities for
the most
perfect co-ordination of these two
banking systems, and ensures for our
country the most scientific monetary and credit facilities that the
genius of
man
has produced.
America is now the leader of the
world, not only in
banking resources, but In banking methods, which is
truly a great and
memorable achievement.

noteworthy

fact that

although

banking

early

State banks

were

established

surrounded

statutory requirements, and subjected to

more severe restrictions and supervision than any other important branch of modern
business, it has, nevertheless, enjoyed a growth and developed an initiative and
personnel, and exerted an influence on our economic life that is
quite unmatched in the
history of world progress, which leads us to the conclusion that
supervision,
when wisely and impartially administered, is capable of the
highest and
most useful

service

the

Government can render the
people,
the subject of bank supervision, my knowledge of it is based
entirely upon my experience as the head of the Michigan Banking
Department during the past five years.
As Michigan is in the billion dollar
As regards

of the

basis, and perhaps largely for the purpose of
promoting speculative

enterprises, they nevertheless performed a highly useful if not an
indispenthe development of the
country. Those were indeed strenudays, and the calls for credit and funds to carry on the
mighty work and
opening up the vast midwest sections of the country were
extremely urgent.
sible service in

continued

not be amiss, however, to remind you that the State banking

has supplied us with the larger and most important
part of our

tern

by Woodrow Wilson,

make

+•

systems the world has

discussion of it will be brief and

doubt most of you

State banks in this
It may

aspects.

upon consideration I deem it proper to make what
rather arbitrary division of the subject, with a view of

bringing out only those points which
far

its

that

of preliminary remarks I wish to say the subject—"State Banks
Supervision"—is an extensive one, and a limitation of a paper

way

Their

charge, but for

Commissioner of Banking, Lansing,
Michigan.

the pleasure I feel in being invited to your convention,
appreciation of the honor the State Bank Section of the

address you on this occasion.

and

that

State Banks and their Supervision.

to express

American

both

to allow the

®m
banking system of our Nation under laws that

ernmental

;

therefore,

the banks

appear that

"may" makes it

optional with them.

from

know

well

plain violation of the Act, and a breach of
ignore such fundamental principles.
deplore the fact that the Federal authorities have
chosen, for reasons
known to themselves, to invade fields
that were never intended for
with

IS'?,

Banks.
,

So, gentlemen,

compels the

to be handled at all.

are

the

receive from

This section

certainly leaves the doors wide
payable withm the district and not all

must be

if they

use

ho not

members, using the words,
lection

mem-

deposit from Federal Reserve Banks checks,

only the word "may"
the

from- any of its

receive

jOr s<de]y for purposes of exchange

of. collection

You

examination

submitted

and unnatural conditions, instead of
setting themselves to the task of affectu,e cha
Act that wi„ enable
t0 affi]iate and
,

in-

according to this

acting, let them show where they are compelled to.
In
place, they can only accept checks on depositors, and the banks
arc
especially allowed to charge for remittance, even to the Federal Reserve
Banks, the charge to be fixed by the Federal Reserve Board.
the

•

the

Section

same

best

compels

Federal
federal

from member banks

par

which

Section 16, paragraph 126,

par.

functions
functions,

deposit at

t»

„

Federal Reserve Board

the

Clearing House for checks—much less

Which
which

Reserve

must

the Federal Reserve System.

It is,

contract

pass

^yheTe" ifabsoitelrnotSg' in

letter

further

other purpose, "appointed with due regard to the convenience and customary course of business," says the Act, Section 2.
This "customary
course" includes-exchange on checks where it is the custom, and at least one
district is unanimous as to what the custom was, and that is the Sixth

Record, page
and 3528.

It cannot

Hardwick

and

documents

9*® most dangerous tendency in such large and powerful
Governmental institutions is to become intolerant, dictatorial and autocratic in the exercise
their functions. Hie Central Bank at Washington was eliminated for no

Congress has no control whatever over non-member
regulate their charges and will not regulate them if this
Even the Federal Reserve Board has
no
control over their operation unless
they voluntarily join the Collection
System established by the Federal Reserve Board.
No law that we
banks.

Heves in the soundness and wonderful potentialities of this Act, if its
fundamental principles and original purposes, namely discounting and issuing of circulation, are adhered to. But, on the other hand, we know

regulation of State banks,
opinion of the members of Congress who debated the bill and its
amendments was against any power in
Congress to control in any manner
See remarks of Senator

and

Before closing, gentlemen, I

currency

market,

money

the appeal by Mr. Harding

country

culmination

country with
of

for

being advertised

the history of the legislation and public
time to time further supports this conclusion.
^he House and the Senate had actually decided

Banks

establish

afforded this up to this
be somewhat disappointed at

people seem to

some

States

conditions

system

furnish

Reserve

and

pay for the relief).
Federal Reserve Act
carefully avoids any

State banks.

names

I have stated it to you, and in view of the
facts,
in my opinion, the Federal Reserve Board cannot
successfully answer the
charge that is made against it, that it is
making use of an unlawful and
arbitrary exertion of supposed legislative

the

3761, and the remarks

actually protesting about their

so.

With the law being

price'they must

The

and

were

willing to do

to Congress,

Federal

United

banking

Reserve

how

in the

with

to afford

whieh would expand and contract with the needs
assist us to handle our commodities—and it has
time

law

power,

provide

effective

purposes."

the

only performing their duty accord-

are

and who

par

law say t

[to do what?]
more

What does
1.

Protective

;

for

aspect,

,Board falls back, and it is, therefore,

say, to airtend the

was

189

refused to

from

(/ing to law.

;

let

This

SECTION.

And in order, therefore, to
put into execution that idealistic idea which
they see fit to term "universal par clearance
system," not only have they
gone beyond the permissive clause of the
law, but have deliberately carried
on an intensive campaign to attract to themselves as
large a volume as possible by direct request to member
banks and by the publication of what
is known as a par
list, and on which par list they
publish the names of
consenting banks, and in many instances the names of those
who

v/ ■://■■•:
cost.

collections."

Now

cost

look at this, you cannot give service without
see

answer

BANK

the National
banking currency not taxed?
ders cost, to ship
currency costs.
This

almost

BANKERS'

190

banking resources are concerned, I assume that
fairly typical of those in other States.

class so far as

CONVENTION.
and should be especially
A well maintained departmental
supplying information to the banks
and in assisting in analyzing credit lines by the department.
I
hold
it of first importance
that the bank supervisor should in¬
sist
at
all
times
on ' a
faithful observance of the statutory require¬
ments of the banking provisions relating to the conduct of the banking
business.
As a rule, these statutory provisions are plain and reasonable,
arid there should be no necessity of digressing therefrom.
Where interpre¬
sioned

th^ conditions

supervision has its
been

the most aggravating

One of

handicaps to the

when such unexpected conditions arose as
which were not always in strict
provisions. However, those were extraordinary
times, which, let us hope, will never come again.
It was a case where the
enormous credit expansion incidental to the successful financing of the war
made it imperative to adopt new and more liberal regulations, but these
regulations should be "scrapped" at the earliest practicable moment.
Only
the most dire exigencies can justify even a temporary departure from the
time-proved principles and methods of sound banking.
While, of course, the
enforcement of the banking laws should be the chief aim and business of the
supervisor, that should not by any means be considered the entire vocation
of his department.
His efforts should be directed with equal energy to
bettering banking conditions generally.
When bankers understand that the
except

their enthusiastic devotion and co-operation.
incorporated banking business, for obvious reasons,

its inception the

In order to

afford this protection to

has

necessity of adequate statu¬

depositors and stockholders of

America,

the leading position in the nation. Recent
commendation, both to the banks and the super¬

has as its

supervision

Efficient

tion of

notes and
analysis of every
the habits
should
report of conditions in

performed by making a complete

It is only

deposits.

regula¬
examina¬

foundation adequate statutory

basis, the thorough examination of the bank.
An
the bank is not accomplished by counting cash and listing

important asset and liability of the bank, as well as a study of
and character of the officials and directors, and while the supervisor

the examination a

require in blanks furnished for
detail that covers every feature
the examiner

of the business so far as can

should understand that

there are other matters

be determined,
which require

interesting one, and one that requires
exceptionally good judgment, if he be successful in his work.
He should
give consideration to the fact that a major portion of bank losses are occa-

Section:
Whereas, the meaning of certain paragraphs of Sections 13 and 16 of
the Federal Reserve Act, with regard to the payment and collection of
following resolution was

exchange is not

Whereas,

State banks are

adopted by the State Bank

unequivocal and clear, and

under

interpretation placed upon these Sections by the
charter rights of thousands of

the

the constitutional and

Federal Reserve Board

being seriously infringed upon,

and

the Federal Reserve Law and the Federal Reserve Banks can
have no legal control over State banks not members of the Federal Rserve
System, and
Whereas, it has been indisputably shown that methods of coercion and
force have been largely resorted to to force non-member State banks to
clear for the Federal Reserve Banks at par, and
Whereas, it is the first duty of this organization to protect in every way
possible the essential rights of its members;
Therefore, be it Resolved, by the State Bank Section of the American
Whereas,

Bankers'
1.

Association:

That

service

this

Section

is entitled to a

say

that banks have not

for many years

main factors in bringing'

the country to its

stand committed to the principle that a valuable
reasonable compensation and that all banks are en¬

titled

hut con¬

position

to come.

of Reserve Act Concerning

Seeking Amendment
The

frank to

explicit information in

present world eclipsing pitch of material and financial prosperity,
stitutes the strongest guarantee that it will continue to hold this

position of an examiner is an

The

ability have not only been the

and consideration.

attention

itself.

always given the public as full
regard to their condition as they should have
done.
In Michigan, prior to the war period, many subterfuges were used
by our banks in an endeavor to avoid showing liabilities.
Even during the
war there was considerable hesitation on the part of our bankers in takiDg
their proportionate share of Treasury war issues because it would necessi¬
tate showing largely increased liabilities in their "call" statements.
I be¬
lieve they have learned a much needed and salutary lesson from their ex¬
perience in this respect, and have come to realize that their depositors are
not disturbed by a frank and complete exhibit of a bank's liabilities.
The
whole purpose of a "call" statement is to inform the public of the true con¬
dition of tiie bank, and the Bank Supervisor should unflinchingly insist
that condition be plainly and unmistakably set forth.
As a rule, that is
exactly what is done, as most bankers are quite as solicitous as the Bank
Supervisor himself that their institutions should observe the highest ethical,
standards in dealing with their customers and the public.
And this leads
me to say that one of the finest things connected with my carrer as Bank
Supervisor is the opportunity which
it affords me of coming into close and
intimate relation with a body of men whose public spirit, integrity and
I

vising departments.
tions, and as its

all

which

prestige of the bank
and

Banking Systems now occupy

compiled statistics warrant

engendered, and the most

the State supervising departments are co¬
operating with each other in every way possible.
This co-operation is
brought about, to a great degree, through the National Association of State
Bank Supervisors, an association formed several years ago, and now in¬
cluding in its membership the head of the banking department in practically
every State in the Union. •' The object of this association was to improve
and render more efficient State Bank Supervision and State banking condi¬
tions.
It affords its members an opportunity of securing the benefits of the
experience of all other members in different sections of the country, as
well as reliable information regarding financial and industrial affairs af¬
fecting banking conditions, and at the annual convention of the association
the discussions in connection with supervisory work and banking condi¬
tions are such as tend naturally in increasing the efficiency of the State
Banking Departments, and the results are reflected in State bank growth
and conditions.
The growth has been steady and consistent, and the State
banks

in not only holding them to a strict
regulations, but also in promoting the effi¬

department is interested

banking concern under its authority, then that
modern enterprises and progress are founded is1
helpful and stimulating co-operation is assured.
In many States the bank supervisor is given authority to approve or dis¬
approve application for the organization of State banks.
It is obvious that
this authority should be mainly exercised with a view of providing every
section of the State with adequate banking facilities.
Of course, it would
not be forgotten that the banking business can be overdone, with conse¬
quences which are likely to be more disastrous than those which attend un¬
due expansion in pther lines of activity.
One of the chief duties of the
Bank Supervisor should be to see that new banks are established to meet
real needs for banking accommodations, rather than to gratify personal
rivalries, or to exploit financial ambitions.
It should be a settled departmental policy to require, whenever possible,
boards of directors or a special committee made up from its membership to
meet with and aid the examiner in the investigation of the bank in order
that the directors may thus familiarize themselves with the affairs of their
own
bank and promptly render their judgment on all matters which the
examiner may call to their attention.
It is hardly necessary to say that this
requirement will produce the most satisfactory results.
It not only affords
directors an opportunity to obtain real first-hand knowledge of the way
their bank is being run, but it will greatly increase their sense of responsi
bility, which is almost invariably reflected in the improved standing and
confidence

and the advisability of strict supervision.
This plan was
demonstrated; primarily this protection was for the benefit
of bank depositors, and it has served this purpose well.
In proper super¬
vision, however, the stockholder is entitled to and should receive considera¬
State

special regulations,

ciency and welfare of every

wise, as has been

the

some

compliance with the statutory

tory regulation

tion.

justify

supervising

in the service, but
nature

conformity with the statutory

apparent almost from

during the war period,

seemed

successful enforcement of

inadequate compensation

was

The

they should be general,

for any class of banks. It is the inten¬
statutory requirements should cover all situations which are likely
I think this, as a rule, is true, at least it has been so in Michigan

to arise.

tion

regulations are necessary

special rules should be made

tion that

made

the statute or

factor in

tations

provided for
those who are charged with that duty, particularly as it applies to the
examiner.
Only a high order of bookkeeping and analytical ability are
equal to the task of making a thorough and trustworthy examination of a
bank's affairs, and the sad fact is, that the meager legislative appropriation
has not always permitted the employment of ability of this kind.
Like the
head of
great modern commercial or industrial enterprise, the superintend¬
ent of
State Banking Department should surround himself with capable,
conscientious and thoroughly trained assistants, arid this can only be done
when ample funds are at his disposal to adequately compensate them.
It
the lack of funds for this purpose that greatly retarded the development
and value of the work of the first bank supervisory bureaus in many States.
While this handicap has been largely overcome by the more liberal policy
which is now being pursued, there is still chance for considerable improvement.
As it is impossible for the chief of the banking department in most States
to give his personal attention to much of the field work that is being carried
under his official direction, he is necessarily compelled to rely upon the
reports of his examiners, and unless these men are exceptionally competent '
and dependable, the most serious consequences may follow.
It is not only
because their work is of a highly expert character, but because it is of so
much consequence to the most vital interests of the State, that the pay of
these men should be fixed at a figure that will insure not only their reten¬
Law has been the

in every bank.

and

other States.

the State Banking

over-extended lines of credit,

this feature

credit bureau is an important

unfavorable as well as its favorable aspects.
subjected to political control, which always and every¬
where results in lax administration and dangerous discriminatory practices. '
The State Banking Department should be as exempt from that sort of con¬
trol as the judiciary itself.
Not only its usefulness, but the honor of the
State and the stability of our whole business structure depend upon its
vigilant and impartial conduct.
However, there are many gratifying signs
that this menace to efficient bank supervision is disappearing.
It has been
demonstrated in Michigan that the banking department is not a political
department, and it is to be hoped that this condition will soon apply to all
State bank

It has too often

account of

watchful

which obtain there are

Check Collections.

reasonable rate of exchange for

the collection and

remission of

cheeks by mail.
2. That we deprecate

and condemn all methods of force and coercion used
to compel banks to forego their legal and moral rights.
3. That a committee, to consist of seven members, each of whom shall
be a man who has hitherto been active in opposing the policy of universal
par clearance, be appointed by the
of obtaining whatever amendment

President of this Section for the purpose
be necessary to the Federal Reserve

may

Law, especially Sections 13 and 16, as may be
banks the right and privilege of charging a
for the collection of checks and the remission

necessary to

guarantee to all

reasonable rate of exchange
of the proceeds thereof and
to do any or all other things which may be necessary or advisable in pro¬
tecting the rights of banks with regard to the subject of reasonable ex¬
change charges and for the carrying out of the intents and purposes of this
resolution.
4.

lie it Resolved

further, that the American

Bankers' Association be and

hereby is requested to increase the appropriation made for the
Section to an amount sufficient to defray all necessary expenses
the activities of this committee.
5.

incident to

the Secretary of this Section, George
be secretary of this committee.

Allen,

State Bank

further Resolved, that

Newly Elected Officers.
The

following are

President—E. C.
First

Co.,

the

McDougal, President, Marine

Vice-Piesident—R.

New Orleans,

newiy-elected officers of the Section:
S.

La.

Hecht, President,

Trust Co., Buffalo, N. Y.

Hibernia Bank & Trust

Chairman

Executive

Commerce & Trust

Committee—Fred Collins,

Vice-President, Bank of

Co., Memphis, Tenn.

Members
of Executive
Committee—John D. Phillips,
Green
Valley Bank, Green Valley, 111., and George W.
President,, American Bank of Commerce k Trust Co., Little

Vice-President,
Rogers, VieeRock, Ark,

COMPANY

SECTION

American Bankers' Association
Twenty-Fifth Annual Meeting, Held at Washington, D. C., Oct. 19-20, 1920

INDEX

The

Massachusetts

Form

Trust

Organization,

Wrightington_________

The Women's

[

Department in

TRUST

Sydney

Trust Company, Mrs. Will-

Reyburn
of

the

Report of Committee

-Page 194
Trust

the Various
How

Report of Committee

Company Sections

Associations

Vice-President

State

1|. H. Roseberry

and

Does

..Page 201

Protective Laws...........

Work of the Executive

Can

Page 202

Report of the Nominating Committee

Page 197

Charges for Trust Service

Co-operate,

Resolutions

----

Page 201
___Page 202

—

Committee.

Page 195

v___

____i__Page 201

;

Legislation

Developing the Business of Trust Companies

States, John W. Chalfant—

Page 199

____.-...Page 200

Address of the President

Safe Deposit, Amedee V.

Co-operating with Legal Profession..

Page 193

Operation and Management of

PROCEEDINGS

Community Funds and Their DevelopmentPage 191

iam Laimbeer.

Work

COMPANY

Page 203

Adopted

The Massachusetts Form of Trust

..Page 203

,4.

___.Page 204

Organization,

By Sydney R. Weightington, of the Boston Bar, Boston, Mass.
Large scale business to-day depends
the

two fundamentals,

imposing taxation and regulations

limitation of liability to the capital invested.
are

Both of these

brought

kind of credit insurance, in that they distribute the

risk.

The first great co-operative

enterprises of 150

had the

There is nothing unnatural or immoral in the desire of a
business

first, but lacked the second of these fundamentals.

The great

losses, however, which followed

lation resulted at first in repressive legislation
known

the "Bubble Acts."

edy in legislation,
and

normal

mode

outgrowth
without

the

old

systems that is the normal legal

Perhaps if the beginnings of our

common

had

Business then sought a rem¬

and

priests, it might have been the normal business status

business

English

developing

was

Massachusetts

corporation

by merchants instead of by soldiers

incorporates,

on a

credit basis is doomed,

to vicarious atonement for the

others.

V.,;./: .A,

sins of

Car trusts and underwriting agreements, which are really

organization, another

companies

of legislation.

the

molded

tection from the risks of business
if

becoming

was

been

with us, but as it is the business man who seeks some pro¬

insulator be¬

as an

incorporation

American

the

aid

that

definite amount of his capital in

some

law

both in England and the United States,

time

same

only

status of business.

the investor and the risks of the business.
the

to risk

man

given enterprise.

in England

gradually adapted the corporation

tween

of specu¬

era

corporate monopolies

of heavy taxation and burdensome regu¬

on an era

lations, all corporations suffered alike.

years

of which the East India Company was the most famous,

ago,

uniformity is essential,

and when the abuses incident to great

aggregation of the capital of many individuals and the

trusts with
use

transferable shares had paved the way for the

of trusts in business, and at about this time court deci¬

laws did not permit corporations to deal in real estate and

sions

limited the amount of real estate

surrounded the employment of trusts and established

that large

corporation could hold,

real estate developments

were

financed there

through the issue of transferable certificates
tion
new

contrivance.

tificates

Chief Justice Shaw in

"well understood

were

The forms of

organization

from

time

real

time

estate

were

185*4

said such

developments.

The

successful
use

use

90's

trusts

lated

combinations

the medium

were

corpora¬

of trusts and outside

Massachusetts they were practically forgotten

through

cer¬

muniments of property."

refined by experience and

were

corporations

until in the

which

punishing monopolies, but because

Restrictive

impossible,

legislation

tions. ? Certificates

larations
power

gestion of opprobrium attaching to the
was

nothing

combination,

which

Two changes
terest

the

trust
was

itself,
either

name

however,

provided

legally

made

liability.

is not also

morally

the

wrong.

trusts.

Incorporation at first

was

em¬

ployed only by semi-public enterprises to finance which the
general public

were

invited to contribute.

generation, however, it

enterprises,

even

was

During the last

adopted by glmost all private

those owned practically by

one

man.

■

to imitate

corpora¬

almost identical

the

shareholders

instruct

trustees in

sonal

and

even

These

repeatedly held by the courts to be not

Then

well.

They depended

011

the

which

decision

supplied

Massachusetts

workable

test

be¬

trust and partnership.

no
a

came

Milton,

vs.

"trust." There

from

■,

implied agreements with creditors for limitation

express or

There is

was

greater measure than is customary in corporations.
were

cor¬

used

were

meetings

but partnerships

affecting corporations have increased the in¬

business

for

only trusts,

soon

only

apart

of stock

-v-

the tendency in drawing dec¬

to elect trustees and to

sug¬

leaving behind

years ago

foun¬

greater confi¬

form with certificates of stock in corporations and the dec¬

tween pure

combinations.

seven

associations

the

with

possible the scheme of organization of

combinations

lawyers could advise

larations of trust with transferable shares

closely

Williams

these

of the legal obscurities which had

A'A.v-/

Until about

porations had exceeded their charter powers in taking part

such

some

These

sort.

promptly held illegal, not only because they vio¬

statutes

dence.

formed

were

of crude trusts of this

dation

adopted by enterprises other than

tions, however, overshadowed the

early

participa¬

The so-called Massachusetts trust is not

by trusts.

cleared

doubt that the beneficiary of a pure trust, who

partner in

association, is protected from per¬

liability for debts incurred in the business of the trust.

This is

dependable protection than rules requiring

trustee to contract

from liability.

behalf of the shareholders for freedom

Since Williams

vs.

Milton,

all these trusts

have been careful to eliminate features which might add the
relation of partnership to
1919 the

that of trust.

Supreme Court of the United

rules of Williams

vs.

Milton in the

case

In the spring of

States adopted the
of Crocker

vs.

Mai-

BANKERS' CONVENTION.

192

that"

practically certain
the same rules
States/ and already there are
effect in Rhode Island, Wisconsin, Minne-

This makes it

ley.
will

adopted in the other

decisions to that

tliend ends of business

although

confidence,

The development of these
will now proceed with
points are still somewhat ob-

Jersey.

Kansas and New

sota,

trusts to meet

many

limitation to the assets of a trust will not make the paper
non-negotiable. Corporation paper is negotiable, yet the liability of a corporation on its negotiable instruments can be no
greater than its total assets. The practical equivalent -of
negotiability may also be reached on other lines of reasoning,
Until court decisions are rendered on these points, however,
we must

scure.

investors desiring to

dered

Massachusetts

of the trust form
commonly overlooked. The advantages are now becoming familiar to business men. The most
important of these is its great adaptibility. It asks no favors
from the Government and is not obliged to organize in a set
form fixed by statute. It may be operated with the freedom
of an individual citizen.
Can trust companies serve as trustees of these business
trusts? There are many holding companies in the form of a
trust where the duties would not be of a sort incompatible
with the usual duties of the trust department of trust eompanics.
Such are the Mackay Companies and the Great
Northern Ore Trust in New York and numerous combinations of public.service companies in Massachusetts. Most of
the office buildings in Boston are owned and operated by
such trusts whose duties would-be appropriate for trust com-

been em-

capacity.

ployed to act in that

•

widely
from accepted corporate standards.
It eliminates all meetjags of shareholders and vests full control of tig enterprise
in a self-perpetuating board of trustees.
The only limitation
on their power is. that certain specified steps can be taken
only with the consent of the holders of a specified proportion
business trust has departed

present type of

The

of the beneficial interest.
At first the absence

for

holders of shares in our
a

tions

great corporations are

only

I believe that experience

will

that small

which

gives no

investors are satisfied with a

be content to entrust his money

to a self-perpetuating

personal relations with the trustees that
in

such

lie is in fact represented

cases

provide for

If the

almost always trust companies.

for beneficiaries which have led to the substitution of banks

in a way satisfactory to
for

for individuals as trustees of other trusts apply to the trusts
now in question.
From the standpoint of the trust company,

be made for an executive com-

however, the responsibilities of the active conduct of indus-

board

of trustees thus becomes too large

effective action provision can

trial enterprises hardly fits in which its present banking and

mittee.
From

trustees two considerations

standpoint of the

the

It is obvious from what I have said that this form of or-

It is obvious that a man

ganization is not appropriate for all kinds of enterprises,

beneficiaries must not be Identical.
cannot by

fiduciary business,

One is that the trustees and the

be overlooked.

must not

There are dangers in its use by those not familiar with its

declaring himself trustees for himself escape re-

sponsibility for his debts.

limitations. Discrimination is

There is no likelihood that the

are

not sufficiently diverse so

that there will be genu-

pensate for the expenditure of the time and thought required,

ine beneficiaries who are not trustees,

this form of

ent of using it in enterprises for which it is appropriate corn-

drganiza-

The

The second consideration is that officers

tion will not work.

advising as to the

appropriate occasions for its use, but the advantages at pres-

to these trusts,

courts will be applied

necessary in

by the
If the interests in-

recognition of the validity of "one man" corporations

volved

The advantages of security

sufficiently large board of trustees so that he

be represented upon the board

may

him.

be remembered that in the earlier trust mortgages securing
bond issues the trustees were individuals. To-day they are

he will be content,
sufficiently by the

always be possible to

In other eases it will almost

trustees.

board

will have such

In some cases such an investor

of trustees?

charter of incorporation for the trust form of organization?
In winding up the estates of deceased persons trust companics to-day are exercising through their agents for longer
or shorter periods executive control of active businesses or
electing directors of corporations to do it for them. It must

certificate
voting power if they are assured of no perBut how about the large investor?
Will he

prove

liability.

panics. But would they venture to undertake the duties of
the trustees of the Amoskeag Mills, the largest cotton factory
in the world, or the Ludlow Manufacturing Associates, another great industrial enterprise which has abandoned its

the expense of mail-

really managed, by men who own

minority of shares?

small

industrial corpor-

trouble to sign and return

stamped envelope for reply ? How many

ing to them with a

sonal

great railroad and

which the corporation goes to

the proxy

unacceptable, but how many

accustomed to take the

are

shareholders to vote

of the power of

of trustees seems

board

because they are most

of the document

Trust companies have

law.

Massachusetts

and bonds of trusts
in commerce and

i have mentioned these disadvantages

with the idea
instrument it must be interpreted

Massachusetts depositary
that as a

finance.

and providing for a

of Massachusetts,

State

the

without question to-day

accepted

are

executing these declarations of trust

avoid doubt by actually
within

this form,have sought to

use

recognize that there is a doubt about the negotia-

bihty of trust paper, although the notes

decisions have not yet been ren-

States where

some

trust

form

seems

most

appropriate

for

real

estate

operations and holding companies and for closely held and

corporation who act on its behalf are not ordinarily per-

private enterprises.

sonally liable for its debts, but trustees are personally liable

Though it has been used so far successfully by large inanu-

in the management

facturing ami distributing enterprises, they have been well

this only by express contract

established concerns that did not need to appeal to the public

for debts which they contract as trustees
of the trust.

They

with the creditor.
of trustees

can escape

Here arises

risk where

that there

liabilities.
such

large board

are

seeing at all times

tinguish pure trusts, in which they can incur no liability,
from unincorporated associations operating through trustees,

There are, however, certain

liability

for

personal

kinds of liabilities,

a mere

The

Another aspect of the

subject which will interest bankers

problem with reference to the negotiability of commer-

cial paper and bonds issued
so as

by business trusts.

They are

to eliminate all liability of both trustees and

beneficiaries and to limit the creditor to the assets of the
trust for his pay.

The negotiable instruments law, following

the

provides that

common

law,

tiable must be
that
is

laws apply to a trust.
.

do,

The Kansas Court has held that they

the ground that the trust in question was an associa-

tion and under the Kansas Constitution associations are in¬
eluded with corporations in

surance.

instrument to be nego-

payable absolutely without any condition and

note, payment of which is limited to a specific fund,

non-negotiable.

It may be that the courts will hold that

of shares

in trusts lias raised the question whether so-called "blue sky"

practice of con-

only protection for the trustees in such cases is liability in-

phrased

Already the public solicitation of capital by the sale

injuries or for fraud, from

which the trustees cannot escape

It does

The public is familiar with corporations.

in the trust estate assets sufficient to meet all

tracting against liability, because there is lo contract.

for funds.

not yet know enough about these declarations of trust to dis-

delegates power to an executive committee. Trus-

usually can protect themselves by

tees

the application of statutes ex-

pressly relating to corporations.

It is believed, however, that

'the decision would have been different if the trust had had
no

provision for meetings of shareholders and

so no

of association.
The Companies Acts of England and Canada

Unction

between

They do not

tomed

mean

to call

company

element

■

so-called

private* and

by public companies what

public

make

public

service corporations.

dis¬

companies,
are accus-

They

mean

the capital of which is solicited from the public,

A private company is one in which the capital is all provided

T1UJST
by the

public subscription.

promoters without

for'the protection

COMPANY

Regulations

of the public relating to payment of capital

and

publicity apply to public but not to private companies,

Tlie

distinction which

they have made between these two

classes of enterprises is the

the kind

tween

distinction I have in mind be-

enterprise for which the trust form of

organization is most appropriate and that for which

it is

less appropriate.

became known, the

of them should spread widely.

use

feared that they have been used
not

193

been availed of by promoters of questionable enterprises who

feared

the

publicity compelled

incorporation

penalties for violation of corporation laws.
vantages

trusts

in the enterprises

possesses

the

for which they are

most appropriate will be lost if indiscriminate
of organization that still

and

The great ad-

some

use

form

dangers for those

who do not fully understand it, brings on

an era

of restric-

tive legislation like that from which corporations are

natural that when the advantages of business trusts

was

SECTION.

It is

sometimes by those who did

fully understand them and it is suspected that they have

suffering.

trust form of business organization are not propagandists of

It is believed that it will

its use.

prove an

of the system of incorporation, but not

Women's Department in

The

now

Those who desire to preserve the freedom of the

effective adjunct

substitute for it.

Trust Company.

By Mas. William Laimbeer. Assistant Secretary of the United States Mortgage & Trust Company of New York.
Air. President and Members of the Trust Company
I want to thank you

to-day,

Section:

for the privilege of speaking to you

I believe it is the first time a woman has had this

honor, and the following will tell you why I am here:

the novelty it
into

considered, but has now developed

was once

integral

modern institution of this

part of every

talk to you on this sub-

longer evidence merely of the interest or curiosity

concerning

It is, I take it, a recognition

departure.

new

of the need to exchange notes on an
Trust

important phase of the

And

consideration.
importance of the Women's

this recognition of the

banking world has

Women's Departments,

therefore, has had something inherently

believe,

well

may

reputation for taking slowly to inno-

The establishment of

Recent developments have made this the more apparent.

On the

one

hand,

have the fact that women are taking

increasingly large part in

The war gave an enormous

business and

financial life,

impetus in this direction.

The

vacating of positions by some four million men opened to
women

possibilities.

new

inducement

continue

Experience
in

special

talk more freely to

gained became an

pursuits,

profitable

remains

body of women who

great

financial

with

the guidance of
very

it had,

done for them by

In doing this it encourages addi-

men.

advancement of thrift in
The

Census,

told,

large part of the population,

will

neighborhood of fifty million

give

women

somewhere

this

and

the earning

capacities of

the other hand, the effect of depriving

to mingling with
men.

a woman may

be accustomed

business men, women, after all, are not

Their financial needs

be the same, but they are

may

their business dealings.

So we find that in our service the

personal note counts for much—that understanding which

Service.

own

affairs,

longer be dependent upon the men of their

family in this respect.

They frequently had to make bank-

ing arrangements,

only

who have
not

for themselves,

but for

This has left its permanent mark.

participated in taking

of ,financial interests

care

likely to relinquish them, and

finding that

welcome rather than

men

their

Women

they doubtless are
this develop-

oppose

All

trust

this

women.

has

greatly increased the need of

facilities
The

adapted

process

has

special

educating

persuading her to keep

progress,

the

banking and

requirements

woman

to the extent

bank account, though still in

strides.

thus/made long

The

establishment

of trusts by women, their acting as executors,

or co-execu-

their close relation to matters of guardianship, their

tors,

need for safekeeping accounts, and for safe deposit service,
have

with

Little

brought, women

into

increasingly

the trust company-on the

argument

necessary

frequent

contact

side of its trust functions,

to prove

the advisability

business

with
a

found

distinctive,

nor

does

them

that

methods

the

does

growing familiarity
not

obviate

the

advantage of

individualized department devoted to

make

less

to deal with women

agreeable and

women

them,

advantageous

in trust and banking matters.

for

can

bring to this service
In our

quality by their

per-

ment is tactfully made to feel that we are intensely inter-

ested in her, and women of all classes respond to this,
A woman came in the other day to get, a notary public-

She asked if she could

acknowledgment of some papers.
use

the telephone to call

wanted.

up an

intelligence office.

We util-

suggestion to aid her in getting the servant she
The result

she opened

was

that in appreciation of our efforts

account with us, and other new business of

consequence has followed.

If, again,

happen to know that

a woman

contemplates

sending her boy to college, we interest ourselves, send her
appropriate information, and otherwise seek to be of service,

Again, with reference to trust accounts, it is made
for

women to talk

situations
case,

that

with

aside some
a

sometimes

for instance, of

peals to

have

■

A woman customer who comes into our depart¬

sonality.

this service in
We

The Women's Department

who can convey this distinctive human

from

Department.

work, in selecting our personnel, we try to get women

giving careful attention to these functions and specializing
the Women's

client and the Manager of

intensive, intimate note, not otherwise possible.

ized this

ment.

woman

Every trust company nowadays, of course, strives to give

relatives, in the handling of their financial

are

the

affected by other influences that become associated with

male

not

in the country. Surely

As to this matter of women having women to deal with

instead of men—however well

family also.

women to

tional business for the trust company and contributes to the

of the assistance of their husbands, brothers, or other

are

affairs,

with financial experience appeals

a woman

The Women's Department makes it easier for

many

They could

can

strongly.

the Women's Department.

women,

re-

and to whom the possibility of taking the initial steps under

should exist between the

thus stimulated

the

competent woman

which she feels that she

just beginning their acquaintance

women.
war

un-

of her own sex.

one

growth in business life meant larger individual earnings for

While the

room,

that suggests opportunity.

logical and inevitable to recommend it.
,

do their banking business themselves, rather than have it

Department has come about in spite of the fact that the

vations.

other personal matters

Company's business, which to-day every wide-awake

officer finds worthy of serious

is familiar with the

a woman

deposit slip, does not make her

garding family finances, her monthly housekeeping budget,

But there still

The very fact that I am here to
no

check-book,

appreciative of the conveniences of

character.

ject is

privilege of being able to talk to

Company is no longer

The Women's Department of a Trust

The fact, for instance, that
uses

money

easy

regarding some of the difficult
arise

woman

this

connection.

The

client who wanted to set

for her children, and have it protected

spendthrift husband.
many women

situation With another

There is something that ap-

about being able to talk
woman,

over

such

whose training enables her

to give practical financial advice.

Whether it is
that is to

trust fund, or a baby's Christmas present

be talked about,

women

like to

where they

have friends, and experience seems to show that the cultiva-

BANKERS' CONVENTION.

194

friendly quality is

of this

tion

helped, she is usually very anxious to

she is being

rendering

active in doing personal work among

very

make it

rule never to refuse

customers are
their friends. We

So I have found that our women

helped her.

The

made.

anything possible that we are

You never can tell what new

asked to do.
be

If a woman feels that
make a
what service she can to the one who
favors.

of small courtesies or

return in

appreciative in a high de-

that women are

We find, too,
gree

essential to the growth of

business.

such trust company

consequence

connections will
mail is

is that my personal

the widest range of subjects.

large, and covers

When my

starting a school for servant girls in
neighborhood, I am not surprised, but try to get

opinion is asked about
certain

for

inquirer the best advice we can.

the

that

know where these

we never

Very frequently they culminate in

service, will lead.

stantial business, so we never say no
There certainly
I find it the most

It is

is nothing monotonous about

varied, humanly interesting

Women's Department can

outposts, with their

company's business.

proved highly attractive.
The
place which women

becomes recognized as a

room

in their shopping expedi-

utilize as the central point

may

Such

opportunity to serve women while en-

shopping, have

women's

Com-

retail shopping districts, that the
become a most valuable factor for

service, and for increasing the

gaged

this work,

thing a woman

particularly in the branch offices of the Trust

in the residential or

pany,

sub-

to anything in reason.

in.

engage

can

We have found

inquiries, and the resulting

tions.

nothing that

There

write letters, telephone,

can

We make
pany

them

draws

them

districts in the neighborhood of our branches

less as you might a

oughly acquainted with the
trades

small country community.

of our department make

wonien

The

point to become thor-

district, know the business and

There are wonhave found, in the

people in it, and to patronize them.

derful

new

business

possibilities,

intimate contacts which our women
in their

people

recognize

ourselves,

women

thus secure with people

districts, people often in humble

These

they

Trust Com-

the essential thing,
luxury.

important than impressiveness or

more or

place

I may suggest here, that in the

appointments of such rooms comfort is

We treat the

and so forth.

feel that they can use the

exactly as they like.

than

made to feel perfectly at home—where they

where they are

are

only, but men.
You will, I trust, not regard me as unduly boastful for
my sex, when I say that women have frequently (leinonstrated their fertility in ideas in connection with the developinent of trust company business. They have an appreciation for the practical affairs of life, and the value of little

conveniences and courtesies, which prove effective in celoenting the ties of the company with its clients. It was a
woman who conceived the idea of sending to the depositors of
a trust company in the vicinity of New York a communieation offering to purchase and charge to their accounts, their
monthly commutation tickets. The commuter was saved the
annoyance of standing in a long line, and received his ticket
in the mail on the last day of the month. The response of
the commuter was immediate and appreciative, and the
company thereby made a lot of friends. Surely this was an
effective builder of good-will.
Now, especially in the matter of voluntary trusts, the
Women's Department has a great opportunity for resultful
service, and a liberal policy of the trust company in this
respect makes for excellent returns.
Again, the possibilities of service in working with popular
movements, such as charity bazaars, drives for philantliropic or patriotic purposes, etc., are extensive, and can be
most efficiently utilized by the members of the Women's
Department. There is canvassing to be done, statements to
be made out, books to be posted, deposit accounts for funds
to be opened, etc.

There is no need to give an elaborate recital, showing the

capacities.

that

ful opportunities, particularly in this matter of new business,
for developing woman's sphere in trust companies' activities,
I have come to look upon women in the trust company as
serving the part of liaison officers, who act as the connecting link between the bank and its customers, not women

working

progress

and they are always ready to do what

come

the development of new

of women's banking departments.

while they,

prospects,

themselves,

often suggest

That they have

to stay is proven by the actual growth in numbers of

such

toward assisting us in

can

business

the fact

possibilities that would be ignored were our methods less
intensive.
My conception of the scope of the Women's Department
in a Trust Company is a broad one. My work in the department of which I have charge, if you will permit me to
refer again to personal experiences, has given me the feeling that the part women play in trust company business is
now only in its first stages, and that this work will demand
expansion on such a scale as will permeate the company's
work quite beyond the confines of a women's reception
room or the separate teller's window. I have seen wonder-

departments established
throughout the country.

banking

institutions

Operation and Management of a Safe Deposit.
By Amedee V. Reyburn,

Manager, Safe Deposit Department, Mercantile Trust

vaults, floor space and other equipment of a safe deposit are not a
or
standard of safety.
They are the necessities for providing

The

measure

Company, St. Louis, Mo.

ment which are of first importance, and also many others which are of
On the contract, the identification and the handling of

great importance.

the coupon rooms depend, primarily, the safety of the valuables deposited
in the boxes and the security to the company in handling of customers,
of the
'
Our contract states to whom the box belongs, the number of the indidepend upon operation and management and, unless these be up to the
vidual box, the date the agreement is entered into, annual charge, term
proper standard,
the equipment of the department will give but poor
of rental, conditions of access and the names of those to whom access must
security and be a constant danger of disaster to the institution.
be granted and other conditions and regulations not of so great import,
The operation and management of the Mercantile Trust Co., Safe Deand is signed by one properly authorized to enter into the rental of the
posit Department has been a constant development from the experience of
safe deposit box. This is the basis for the use of the box.
daily business and the adoption of results of the experience of others in
Our description records give a sufficient and clear identification of those
the same line.
We do not claim that our operation and management are
'who are to have access to the box, and last, the customer is shown to a
and properly used.
safety and protection of the valuables deposited and the discharge
obligations of the safe deposit to its patrons, without undue risk,
when

safety

The

intelligently

to improve and meet,
conditions as they arise.
I believe that our department is unique in its "Securities Vault," which
used only by the Trust, Corporation, Real Estate and Bond Departments
the Mercantile Trust Co.
Each trusteeship, estate, guardianship, cor-

absolutely perfect, but it is our constant endeavor
with

is
of

safety to our patrons and to ourselves,

poration, issue of bonds, etc., in care of

the above departments, is kept in

separate safe deposit box or safe, under a system of records and control
access similar to that used for outside patrons in the other vaults, with

the
on

use

addition of
a

system of checking in and

direct order issued

of that

checking out of the contents

by the manager of the department which has the

particular box for that particular estate,

guardianship, trustee-

ship, etc.

operation and management of the outside customers of the five
customers' vaults, we have built up a series of records, of routine and of
For

rules
our

the

business in the safest manner
gained from the experience of others, in-

guard each step for the handling of

experience and information

dicates.
There are three

points in handling of business in the Safe

Deposit Depart-

coupon room,

where he handles his securities, the door of which automati-

cally closes and locks when he comes out, and the room is not permitted
to be used until examined by the employee in charge of the floor, that
valuables left carelessly may be obtained and turned in to the office' and
finally returned to the owner.
We hold that, where the contract is properly drawn up, and particularly
regarding the access, where the identification of one having access can be
made positive, and the carelessness of the customers guarded against, we
have covered the three main conditions arising in the business of the Safe Deposit Department, and if these are supplemented by proper care in guarding other necessary conditions, safety is assured.
Our contracts are drawn by those who are thoroughly and properly in-

formed with relation to filling them out, and they, together with all other
records made in connection with the safe deposit box are checked by three
different parties, before they are permitted to go into the files for use as
finally correct. This we deem not a matter of red tape, but of proper care
that the basis of our business will be absolutely correct. Our records do
not differ, in any great degree, from those of other companies. We still

TRUST
the

use
a

identification, but only

part of the

as a

part, not

identification, and the identification record must bear the sig¬
the individual to whom it refers.

The

word

push-

means

nature

COMPANY

vault

is not permitted to
memory, but must consult his record on each occasion when
access is
granted.
This is not, alone for the personal identification of the
individual seeking access, but memory must not be depended upon to de¬
termine whether the individual has the right of access to that particular
depend

box

that

personal

particular time, although there may be no question as to

contents
a

his

do not permit the examination or handling of
boxes in the vaults.
The tin must be taken by the customer
coupon rooms, we

coupon

room,

experience has proven to us that customers are

our

anything, at

time during the year, fail to operate

any

condition, the expert
At the

opening of the vaults in the morning and the closing in the eve¬
manager is present to see that all is as it should be and the

the

ning,

the vaults rests
A

the manager.

upon

which

the

winding is done, is made and signed by the manager winding
An examination is made by a different individual,
shortly be¬

the clocks.

closing of the vaults, and

still to

before it will release the bolt work, and this number is checked

run

in order to know if it be correct before the vault door is closed in the

evening.

All

clocks

wound

accomplish

at a fixed hour, in the morning, eight
The winding is always twenty-four hours,

o'clock, before business begins.

by carelessness from dropping into the hands of other customers.

when

tered

released

until

the

doors of
lock so it is impossible for the

having the
and

to be

minimum any
The vaults

for

persuaded the absence of the valuables is through his own fault,

hours

questionable matter if he

very

been

the lost article
in

found

was

one

be produced with a memorandum

can

locked

the

claim is made for a lost
that it
shortly after the customer

When

opened and part of the contents removed.
article and

rooms

coupon

left, proof is given that it is through carelessness that the valuables were
not

the

safe

keep

deposit box when it was locked up.

complete record of the date, description of the article,

time,
the valuables.
We
the delivery and

place and the employee connected with the finding of

require identification for delivery and also
believe this

prevent loss
be

access

the

records

We insist that the conditions of

access.

Accommodation of

is not

access

and

access

have

who

the space

with

customer at variance
The customer prescribes the

permitted.

live up to them as

must

prescribed until changed

inside

armed

find

men

coupon

our

rooms

mature,

are

changed with the change of each renter and under no
have

condition is

box

days, that the watchman is alert and
the Holmes'

each

signal and checked by the

not be

corps

vault custodians, ten

understudy,

should there be

handled

with

having

The

safety first and

in all.

a case

The duty of

of absence

change, but

There

are

what

some

resignation,

with

without

ajl 151

delay.

the

resignation by placing

have

customers,

firm

never

even

,\V,

■'

of experts for

an un¬

known the time
the

rush

hours,

\'-.-

the complete overhauling,

cleaning and guaranteeing all in

examining, testing,

perfect working condition.

Our contract

Work of the Trust

goes

further.

Should

Company Sections
By John W. Chalfant, Trust Officer,

It will be apparent

subject

now

limited

be presented.

can

any

who gives

one

even

slight consideration to the

for discussion that, within the scope of

open

and within the

time

should be the

single address

To attempt to describe, for instance, the intensified and

Sections

Company
coming

busy convention, only the barest outline

satisfying campaign in behalf of trust companies

Washington,

California

conducted by the Trust

and

other

States

over¬

less pronounced antagonism of many members of the bar,

privilege of representatives from each of those sections, with
at their disposal.
Theirs has been a grand work.
It was

Iconceived in great fairness and it gives promise of real success.
At the outset, however,
appreciation must be expressed for

the

secretary
Mr. J.

the

Fuller, chairman

data

Association;

vania Bankers'

City

of the

Association

;

Mr. 0.

Trust Company Section of Wisconsin Bankers'

Mr. Isaac H. Orr, of the Missouri Trust Officers' Association:

Mr. Robert U.

York

Mr. John G. Redding, vice-chairman

Section, Pennsylvania Bankers'

Trust Company

Mr.

Joseph N. Babcock,

Association of Trust Companies and

believe

time

time,

through

various

the

Mercantile

Section is

very

active.

has from

practical

trust

problems tending to make a strong, permanent and efficient trust company

the handling

for

Trust

boxes

Co.,

the

State of

Washington Trust

"so stunned

the Trust

Companies

have suffered since

1913

Mr. Davis recently wrote, appear almost to have

Companies that they have for

long time been sat¬

alive."
Through the efforts, however, of Mr. W. J.
Kommers, president of the Trust Company Section of that State, and the

isfied

merely to be

total

floor

The total number of boxes

Safe Deposit

floor space occupied,

occupied.

the data

from

have

reason

is the largest

Department,

number of boxes installed and

co-operation

the Trust

all of

Companies

the

State,

advertising

campaign has been contemporaneously conducted for the purpose of educat¬

ing the public,

and particularly the lawyers of that State, to the belief

that the field of the Trust
and that the Trust

Company is that of the fiduciary and the agent,

Companies have

work of any kind, and

right to give legal advice

particularly to write wills.

do legal

The efforts of the Trust

Company Section in Washington in those particular fields have met with
considerable degree of

very

The Trust
was

merely

not really

through

the

that

formed about four years ago.

section of the Ohio Bankers' Association, but

was

of members

organization

Ohio Trust

was

of that association,

Companies' Association.

insistence
State

leadership of

and

recently

adopted

the

Section,

other

such

pass

fiduciary capacities.
at

law, but it

Section of Ohio

pany

Ohio

Bankers'

quent

proper
In

(largely, of

which

Section

executor, administrator

before the formation of
attempt

co-operation

was

made to

upon

Com¬

with the entire

composed of national banks

that the matter

was

presented to

The Ohio Trust Companies

light.

proper

harmful

and

their

passage

Trust

gave

are

along those lines,

success

of that code, to prevent fre¬

amendments.

The

Section

now

has

bill to amend certain antiquated and uncertain laws relating

and

probate matters, about the details of which it would not be

at this time to comment.

Pennsylvania there has been,

bar, and the
to

activities of

the

support,

far,

little if

that Trust Company

ing Department
the commission
laws of

sylvania

through

It has been

pending legislation.

the

Company

act

years

course,

trust powers),

congratulations

pass

act

many

Legislature

their ability, since the

attempts

estate

without

only to

but also upon

For
the

them¬

called

not until the organization of the Trust

was

Legislature in the

not

and its insistence

Association

State banks
State

entitled

session

each

Trust

banking

new

who

It is not too much to say that

Companies, for the first time, authority to
and

success.

Company Section of Ohio

confined

State laws which,

and

safe deposit boxes and

have been able to obtain,

enactment at the last Legislature in 1919 of a

operation

deposit business

of 1,962 additional boxes, which will

19,290 installed boxes.

and co-operation among all trust companies to insure ethical
practice and good service to the public.
charges,

with

of safe

sitorage vaults and

box vaults, two

organization throughout the entire State.
Some of its particular efforts
have been urging the adoption of standardized forms for practice, a schedule
of

his patronage.

the

Colonial Trust Co., Pittsburgh, Pa.

president of the New

many

come

Associations in the Various States.

the

Banks in Their Fiduciary

solved

that

our

acceptable

if not

Safe Deposit Department, opened for business

Co.,

in the United States in

preparation

committees,

details

our

from

At the close of business October 14, 1920, the department

safe deposit

the number of

and

Capacities; Mr. Albert J. Meserve, secretary Massachusetts Trust Company
Association; Mr. Francis H. Sisson, president of New York State Trust
Company Section, and others.
In California the Trust Company

and

1902, with one vault containing 2,354

of other companies which We

Pennsyl-'

Frey, secretary of the Trust Company Section of the
Association;

essential

most

Mercantile Trust

first it

the

California

of the Ohio State Bankers' Association;
of

the customer,

completed in the early part of 1921,

Ohio,

other

then make the full total

of the Trust Company Section,
Hughes, chainnan of the Trust

Mr.

Bankers' Association;

safe deposit must be

do insist that what

of 26,930 square feet.
The total number of boxes installed is 17,328.
Contracts are out for an addition to the equipment of these vaults, to be

Bankers' Association; Wilber Hatch
Davis, Esquire, counsel for the Trust Company Section of the State of
Washington; Mr. F. P. Kennison, president of the Trust Company Section

Mershon,

given by

Section

kept

are

space

selves

Company

mode

they

safe deposit which I have not given, but I believe I have

employees.

included six

unlimited time

American

occupied is 14,055; the total number of employees 24 and,

all the movable parts of the doors, including the hinges, auto¬

time clocks,

and

rooms,

handle

■

contract with

each year, of

matics,

coupon

unable

were

We have

order

systematic shifting at certain hours of the day of the vault
able to keep a substitute ready for use in any vault, and

obliged to take chances in absence
custodian in charge of a vault.

have

employment,

safety to the customer and the institution.

The

we are

will insist that the customer withdraw

number

management of

the

into

is necessary in handling the business,

must be accepted

custodians,

when

made

may

and business must be

dispatch second.

We do not believe in red tape, but

standpoint,
will not

five

trained

manager.

controlling principle in the management of

August 12,

not

turned in

report is

adequate number of employees that business

examination

Careful

properly trained substitute is ready to be put into the place of the vault cus¬

are

each day of the ringing in of

living and habits of the employees before employment and

todian and

duty and

Electric Protection system

delayed, but safety is the first consideration,

outlined

this change has been made.

be used until

watchman

what is the reason of the missing of the signal.
entire time of the watch, night, Sundays, and holi¬

from

trustworthy

securely guarded under a proper system of
filing in key safes, access to these keys is had by the managers for giving
out when the box is taken
by a customer.
The lock of each box is

The

constantly in touch while outside of business hours.

charge

keys of all the boxes

Protection.

out

This shows during the

experience has taught

that

on
duty and at five different positions in
electric watchmen's signal boxes, connected

are

Electric

be absolutely depended upon.

grille and all business except access to boxes
The gate of the grille is locked by the

the hour and the half hour

such

permitted

duty until the business

must ring a signal
during the entire time of the
watch and five minutes' grace is granted.
If the signal is not in by that
time, the central office of the Holmes' Electric Protection must send two
from each box

safety\first.

The

the

inside the grille

The work is too vital to be placed in the hands of any except

can

night-watchman, who is again relieved

the grille.

the inside when

employees.
as

duty immediately at the close of busi¬

day-watchman, who remains

outside

the Holmes'

overwinding the clocks.

watchman at all times except when open

is relieved by

are

We believe in

the

authority.

own

Those

vaults

transacted

watchman

care

watchman going

morning by
begin.

All

to the customer.

rigidly carried out.

conditions of

by its

our company

Another word in relation

with

patron claiming valuables missing from
deposit box, to show how carelessness is so frequent and our methods

safe

receipt

record will be strong evidence if suit is

and Found"

"Lost

brought against

in the

be convinced by any explanation of

can

system used in guarding keys that the safe deposit box has not

any

in the

hours, later

ness

experience has shown this reduces to

danger of underwinding

are

business,

charge of the floor and who has control over the rooms and can prevent
use until examined.
A customer missing valuables from a box cannot be

and it is

are

multiple of twenty-four hours,

en¬

opened by a key in the hands of the employee in

door

room

record written of the condition of each

particular clock of each door, showing the number of hours the clock has

extremely careless and constantly leave valuables out of the tins of their
boxes at the time of examination and it is necessary to prevent articles left
by

daily record of the number of hours each clock is wound, the hour at

out

This
the coupon 'rooms automatically

show signs of bad

be summoned by telegram and must come at once.

can

responsibility for winding of each time-clock in each particular door of all

fore

identification.

Regarding
to

who grants access to the box,

custodian,

195

SECTION.

Act;
now

the State of

and in

legislative

its

especially

committee,

instrumental

proper

in obtaining the

bill known as the New Bank¬

giving informative data and suggestions to

engaged in codifying and revising the entire banking

Pennsylvania.

At the annual convention of the Penn¬

Bankers' Association a special

convention

conflict with the

any

Section have been largely

not

session,

session is held when the rest of

which

addresses

are

delivered

and

BANKERS'

196

meetings

Those

conduced

have

instrumental in jnany other matters which
the benefit of the public and the Trust Companies in

fiduciary business.
organization is known as

connection with

Commissioner, and

with the State Banking

operates in every possible way
from time to time
has been

Companies.

In addition, the Section co¬

well attended.

always

are

particular interest to Trust

matters of

discussion takes place on

CONVENTION.

Wisconsin Associated Trust
the purpose of a
general discussion of Trust Company affairs, and the work during the year
is done through committees, and especially by a legislative committee.
In Missouri there is no Trust Company Section, as such, but only an
organization in the City of St. Louis, composed of representatives of four
Trust Companies and one National Bank, which call themselves the Mis¬
souri Trust Officers' Association.
The object and purpose of the asso¬
ciation, in addition to the promotion of good fellowship, is to meet at the
same time and
place with the Missouri State Bankers' Association and to
discuss matters of special Interest to Missouri Trust Companies.
The asso¬
■

Wisconsin the

little over a year old.

ciation Is but

Company Sections are re¬

the Trust

Massachusetts

and

Connecticut

about once a year for

It is said to meet

Companies,

they are governed by the laws
they are respectively. domiciled,
and that they be prevented by act of Congress from using the name
"Trust Company."
We Trust
Company men understand
the law to
be that national banks, when acting in a fiduciary capacity, must do so
in such manner as to be not only not in contravention of State law, but
to

also

thought

City Association of Trust
the

effective work along legislative lines.
The time allotted for preparation of this address was so

short and the

been obtained with respect to
the Trust Company Sections in Nebraska and Oregon, but there are such
organizations in those States and they are actively engaged in promoting
the welfare of the Trust Companies and the
public in connection with
fiduciary and all Trust Company business.
It may be rioted here that there are State Banking Associations in every
State, and also in the District of Columbia.
The first State Banking Asso¬
ciation was organized in Texas in 1885, and the last, the Rhode Island
Bankers' Association, was established in 1915.
There are now, however,
only eleven State Banking Associations in which Trust Company Sections
or
Trust Company Associations are organized.
Those eleven State Trust
Company Sections or Associations are in California, Connecticut, Massa¬
chusetts, Missouri,
Nebraska, New York, Ohio, Oregon, Pennsylvania,
Washington and Wisconsin.
It therefore appears that Trust Company
Sections are
few
in number, widely scattered throughout the Union,
and that none exist in any of the Southern
States.
All of the reports
upon which this
address are based show that all of those eleven State
Trust Company Sections have materially helped the cause of true public
and private fiduciary service,
and that if it were not for the trust
sections,
the Trust Companies in those Sjtates would not have their
present standing.
For example, if the trust sections had not been estab¬
lished in Washington and California, how could the antagonism of some'
members of the
bar, whether justified or not, have been even partly
great that information has not

removed?.

will

attention

Your

directed to consideration

now

of some of the

Company Sections should be formed and to
by which those in existence may possibly be made more useful.
In every State and
in the larger cities there have been from
time one or more Trust Companies which, whether intentionally

methods
First:

Trust

New

why

reasons

tended to arouse an¬
tagonism of the lawyers and of the courts and of the Legislatures.
The
troublesome omissions or commissions have frequently been evidenced by
thoughtless advertising or improper charges. ' It is not too much to say
have

unintentionally,

things which

done

have

Companies of the States of Washington and Cali¬
named without any degree of criticism, but
solely
for the purpose
of the moral) devoted the same amount of
energy,
collaboration, co-operation
and personal effort, at the com¬
mencement of
their respective existences, as they now do, to further
right dealings with the bar and to place themselves in the proper
public position in respect to advertisements and Trust Company deal¬
ings generally, they would be much better off than they are to-day.
A
strong, courageous and efficiently operated Trust Company Section
the

had

that

could

easily

unnecessary

but

also

the

all

even

many

are

fiduciaries,

each

taxes,

estate

not

unnecessary

only

because of

have been made tllrough their initiative! to
members of Congress, which would have resulted in the preparation
better estate
tax
laws, more intelligently conceived and more effi¬

Reserve

Court

bined

the

much

country

had

resulted

now

that

also

have

the

States,

that

say

been

clearer
many

made
and

claiming

the

now

and

national

right

upon

banks
use

interpreted

our

powers.

the
the
It

Federal
Supreme
is

surely

legislation the com¬
trust companies of the

are

office

The

account

unless it shall first set
bonds or other securities

Board."

Reserve

Federal

the

in passing upon the-

of the State,

the Attorney-General

of 'fiduciary
That case
is merely cited for the purpose of showing how essential it is for the
Trust
Companies in each State to see to it that national banks are
hedged about by the same laws and that patrons doing business with
them in their trust department are entitled to the same protection that they
would be if being served by a Trust Company pure and simple.
is

subject of regulating the character
within State administrative control.

general

the

that

held

peculiarly

There

Fourth;

represented

States

United

the

are

Trust Company

dollars

billions of

many

and likewise many billions of

resources,

assets held in trust in many different capacities, yet
has been the growth of the Trust Companies, it is
safely within the bounds of actual fact to state that with the exception of
a
few of the large cities, only a very small proportion of the fiduciary
business
of
the country
is under the management of corporate fidu¬
ciaries.
That
small percentage
is, however, not due to any defect

phenomenal

the

value

money

arid

spirit

service.

of efficient conduct of corporate
prevalent idea that corporate fidu¬

lack

reason,

probably

to the

due

yet even so, they have at¬
united effort of the Trust
Companies in educating the public to the difference between a natural
person
and an artificial person in that particular.
Fifth: While it is true that in many of the States Trust Companies
have not been hampered by the express antagonism of the bar, yet a
long printed brief has been prepared by a committee composed of five
lawyers, pursuant to a
resolution adopted in 1919 at the conference
of delegates to the American Bar Association on what constitutes prac¬
activities are still in early infancy,
tained
a
healthy growth, because of the

ciary

tice

the

and

unlawful

constitutes

what

and

law

improper

practice

or lay
agencies.
Doubtless as a result thereproposed by certain members of the bar in many
States,
which would prohibit the Trust Companies, if adopted, from
doing many things which they pf right ought to do, and which are not,
in any sense,
the practice of the law.
It therefore behooves us to be
on
our
guard to so conduct ourselves in all our fiduciary affairs espe¬

the

cially
not
in

law

will

that

any

have

way

the

corporate

privileges

and

but that, on the contrary,
office systems we are able

;

arid

powers

service which best inures

kind of fiduciary

that

their clients

profit

trespass,

ancient profession

their

upon

organizations

our

to render to
to

desire

members of the bar that we
but actually are not infringing

show the

shall continually

only

laymen

legislation

good will and

lawyers and the

the

ad¬

vantage of their clients.
Sixth:

the

Not

by the
of

relations

with

those

formed

other,

the

upon

will

the

especially

and

most

and the continuous
opportunity to make out-

Company Sections

of Trust

officers

The

and

good which will inure to the Trust Com¬

the

already

each

cordial.

position

least

formation

activities

initiative

with our local competitors,
Companies have that dis¬

Trust
a

they

organization

common

can

readily manifest it.
there

If
work

the

still

necessity

the

part

Trust

demand

and

Companies,

combined co-operative
act through some

for

they

must

built
that
it
may
national, State and
a
division, a section
or
association
is, of course,
not material.
Our past activities along
those
lines
justified such organizations,
our
present difficulties seem
to require them, and our future progress ought to be greatly furthered by
them.
Such organizations should by all means include all banks, State

organization.
operate

local

national,

ganized
at

any

whether

willing

against

The

erly to lay
acting
greatest

the

and

State,

every

unfounded

the

and

efficiently

Whether

organization

permitted

law

called

trusts.

execute

or¬

action
time required for the benefit of the Trust Companies themselves,
in

even

be
powerfully

should

organization

That

quickly,

matters.

have

only doing our work,
the burden is upon us

by the bank awaiting invest¬
and shall not be used

trust

separate

said

business

thing.

not

that that provision of the Federal Reserve Act did not
apply to national banks in Pennsylvania because, in its opinion, the
policy was determined by the Supreme Court of the United States^ in
the case of the First National Bank of Bay
City vs. Fellows, which

and

name,

held

but

carried

approved

of that

it, | there would certainly
piece of legislation.
But

banking

by tile bank in the conduct of its business
aside in the trust department United States

the

outset

satisfactory

under

law,

deposited

shall

ment

banks,

fiduciary

have

action

center

subject.

national

at the

thought

the

Section

famous

United

united

and

much easier it would have been to have
legislation at the outset than it is now to

friends,

good

Act

too

laws

Federal

Our

Third:

How

kind

proper

the

amend

not

could

administered.
the

urged

"Funds

conse¬

preparation

the

funds

for

ity

all trust funds must be kept in

to mean that

distinct

entirly

directs:

panies

upon

now

and

amounts

large

representations

ciently

but

bar,

in final distribution.
Certainly, if the
Companies of all the
States had been well organized through
Company Sections, efficiently officered, the proper and cumula-.

Trust

the

of the proper estate returns,
Delay of the Federal Government in the verification
frequently causing great loss due to postponement of

labor

returns,

payment
Trust

tive

bearing

and

been

have

suffered

burdens

the

those

there

that

knows

administrative

many
Federal
legislation

the

Second:
us

companies and
harassing problems.

trust

the

saved

have

the public, from

quently
of

Trust

(and those States are

fornia

having

courts

institutions.
In direct violation of
certain national bank determined to keep
on deposit in
its own institution and to rely, for its author¬
doing, upon that provision of the Federal Reserve Act which

and

trust

Banking Commissioner of the State
jurisdiction over trusts have continu¬

the

and

cash;

trust

Pennsylvania

question,

very

distances

ail

ously interpreted that act
that

of New York."

State

various

the

other

organization called "The Trust Companies'
This last organization has done i

and also a State

Capacities,"
Association

course

and

"The New
Fiduciary

York City known as
Companies and Banks in Their

local association in New

there is a

York

The necessity of enforcing that position and that
our colleagues of the national
banks is especially illus¬
incident in Pennsylvania.
There trust companies are

upon

trated

the re¬

rules of court of

laws and

the

conform

States.

required by a law which has been on the statute books since 1889 to keeptheir trust assets separate and' apart from their own funds, including

tion,

time

actually

State in which

the

court

actions

fiduciary

their

spective

be simply orgariizied for legislative purposes, with occasional
meetings held at the call of the chairman.
In New York State, in addition to the regular State ^frust Company Sec¬
ported

that

see

and rules

unfair
attacks

machinery
any

that

number.

would

group,

the

any

State,

exist

for

all df the Trust

State and
good

improper

against
of

any

good

expeditiously

and

prop¬

favor

Companies

National

might

concerted

any

national

then

greatest

for

prepared

profession,

legislation,
would

matter before

thrbugh the
end

Trust

of"

the country

Company

brought

about

Sections,
for

the

TRUST

have

been

asked

siderable

misgiving

First,

to
tra

so.

that

left

cramped

the

upon

The

separate

with

fair

con¬

cattle,

many

conscious of the fact

with

organized,

the

Company,

the

dence

business

trust

The

trained
mine

the

increase

shows

about

increase

20%

Maryland,

14%.)

Texas

26.1%

with

reports

bined

surplus and undivided

capital,

while New Jersey

the

for

crease

and

Washington,

follows:

reported

the

show

national

including

increases

larger

466.9%

banks,

all the reports received

Practically
members.

our

closed

will

summarize

few of the

rapidly
West,

passing,

the

experiencing

into

growing

particularly

living
vices

Trust

both

producing the finest quality of. long staple in the world.
California is passing through an epoch of agricultural and

are

expansion far greater in extent than has ever
in its history.
The permanent character of its
and

continued

problem

rapid

California

our

growing business.
ing,

the

nor

Never

future

Indiana

before

been

has

the

adequate

Trust

business

excellent

real

with

increased

and

business

flourish¬

one

financial
in

fluctuations

the few
conditions,

States

with

values.

property

scarcity

Crop

prospects,

and

capital

however,

re¬

than

Liberal

commodities.
market

the

banks

the

New# Jersey
business

Legitimate
that

Trust

prices

for

during

the

in the history of that

disturbed

several

and

Trust

operations,

farm

past

have

been

condi¬

has

curtailed

had

profitable

new

are

for

difficulties

enterprises,

position,

strong

loans,

satisfactory

with

rates,

that

en¬

Pennsylvania

with

especially

bonds

State

and

high

reports

Companies,

which

reserve

stocks

and

are

its

credit

building

interest

rates

partially

offset

requirements
have

situation

operations.

caused

have
a

with

which

forced

great

increased

high

cost

investment

reduction

tion^.
Oregon

general

extensive,

business

new

conducting

are

has

Company

been

departments.

reported, especially in
largely to active publicity.
publicity campaigns, the ser¬

and

their

before.

ever

aggressive

activities

fiduciary

carried

campaigns

conducting

our

co-operative

advertis¬

Trust

Com¬

publicity.
increase

business

happenings

the

Louis

companies

since

de¬

and

have

business

rendered

companies

city

has

dis¬

well-established,

expansion.

City

and

public

the
and

satisfactory
Kansas

outside of their

services

taught

institutions,

selection

and

shown

planning do

are

their

clientele.

own

substantial

due

progress,

increasing knowledge of the public

offered,
Trust

business

each

The

and

hut

new,

intelligent

the

companies

publicity,

business

ad¬

are

shows

year.

business

the companies

secured

The

its

the

companies

show

Company

Trust

Through

growing.

ad¬

trust idea.

the

through

but

infancy,

featuring

are

continued

and

progress

Section

the

co-opera

Pennsylvania

Association.

Dakota:

South

panies

intensive

Pennsylvania:
Bankers'

Trust

Company

business

and

all

com¬

facilities.

With

increasing

actively seeking business.
kind

proper

Growing

tendency

publicity

Trust

use

and education

Company
business

trust

can

materially

increased.
Texas:

Corporate

management

Considerable

and

estates

publicity

trusts

education

and

not

required

generally
to

give

Jhe

com¬

profitable results.

business

Fiduciary

Virginia:

panies have pursued

Washington:

have

antici¬

profits

of
of

advice

has

substantially.

grown

dignified yet consistently aggressive policy in

funds

economic

conditions

good.

legal
have

National

counsel.

noit

been

opera¬

Section

Company

relations

and

trust

service

The

been

has

been

th<-

results

only

one

business

are

under

the

renewed

imposed

Good

active
in

improvements

restrictions

discouraging.

"Make-a-Will-Day"

while
obtained by

statute,

were

campaign.

Legislation.

operation.

building

Trust

closer

Advertising

harmful,
the

State

already

but

year,

Several

panies
cases

shows

and

increasing

showing

are

increase

noticeable.

however, with easier money markets after the crops are harvested,
financial conditions will show a general improvement.

Present

Due

vertising

general

offer

pated,

Trust

services

development of this business.

Companies

recent

issuance of booklets,

departments

business

been

large

Dakota:

marked

Bank

couraging prospects for the future.
Ohio

the

Equitable

educational

.Fiduciary

facilities

understood.

the

increased

due

publicity.

and

Recent

Jersey:

Ohio:

year,

State.

unsatisfactory

Companies

however,

smaller

their

State.

Demands

growing.

but

crops,

resorted

was

crops

good

decline

somewhat

closing

for

prospect

reason

borrowing

reports

the

following

Commissioner.
to

the most abundant

Massacuhsetts
tions

encouraging

anticipated

some

administration

largely

being more recognized than
in fiduciary business
due

are

extensive

business

Tennessee:

shows

Louisiana

offer

may

conducted

have

trust

attributable

have

very

St.

trust

North

sharp

are

and

vertising with favorable results.

con¬

unsatisfactory

and
Com¬

have been

the

place

dqe

The

publicity

Companies

companies

New

ported good.
returns

due

Missouri:

develop

tion

reporting rather

its

through

carefully

Oregon:

land

improvement
I

sound

their

struction.

Kentucky

criminate

chief

been

and

there

with

growth

Members

service,

before

growth

business

head

newspapers,

advertising

largely

there

transactions,

estate

Trust

functions.

Company business

Increased

live

Trust

character

insures

the

solicitation.

campaigns.

Companies

The

long

safety

modern

those

hands

Trust

banlfs

trusts,

Rapid

handling

through

Due

industrial

experienced

institutions.

attention

parted from their former custom of not advertising their trust departments.

industries

new

financial

the

this

public

Companies

Columbia:

Maryland:

promising.

its

companies

experiencing

activity

values,

growth

which

estates

Company Section.

pany

in trust prospects for
significant points dis¬

agricultural prod¬
California^ where they

and

deter¬

compelling influences

drives which

under

Company

personal

voluntary

Georgia:

the primary

Arizona

highly

management,

publicity

the

growth
Trust

active

Massachusetts:

one

ing campaign, and report the best year in their business.
Maine;
A marked tendency dispalyed
towards utilizing

tone,

economic

last analysis

exclusive

to the

efficient

States

Trust

Several

capacities,

activity owing to the large
the latter I may mention in

increased

greatly

production of grain and cotton;

the

way

exercising

and

tendency

educational

Indiana:

optimistic

very

institutions

experiments in

District

by the Vice-Presidents' reports:

Arizona

increase

ucts

carry

general business conditions and also

respect of

the

have

discussion.

The

Louisiana:

the

handling

exclusively

campaign through

particularly

(Trust

factors

antf publicity.

campaigns

Companies only about 57%) ; Oregon, 39.2%; Arkansas, 38.1% ; South
Dakota, 30.5% ; Ohio, 30% ; Georgia, 20.5% ; Rhode Island, 20.2%.
General Conditions.

especially

accomplished
in

and

Delaware:

resources

the

given

judgment,

different

our

Rapid

Illinois;

Total

reported,

Several

principally

Results

reserved

supplied

Genral

State-wide

10%,

2%%.

"Resources:

for

educational

5.1% increase.
'
Deposits:
Increases of deposits reported in excess of 20%, aTe as
follows:
Washington (including national banks) 670.8% (Trust Com¬
panies only about 81%) ; South Dakota, 51.3%; Oregon, 40%; Ohio,
31.5%; New Jersey, 21.5%; Indiana, 20%; New York shows a de¬
shows only

services,

our

trusts.

due

which

has

campaigns

property

rendered

increase;

of about

year

business

Com¬

Trust

section of the

every

vigorously conducted by a number of companies have
building up our business.
A brief summary of the

the

from

Arkansas:

are:

profits

service

advertising.

in surplus

living

relation
had

other

towards

their

are

and

Arizona:

and

organization.

intellignt

being

suggestions

Washington, 255.8% (Trust
Companies only about 2%); Texas, 35.9%; Arkansas, 34.4%; South
Dakota, 33.9%;
Ohio, 25.3%.
Georgia reports an increase in com¬
Large increases

Surplus:

and

far

part

Company

general

from

trust

popularity
but

friends,

educational

gone

affecting

exception,

corporate

estates

tradition

intimate

California:

18.4%, etc.

Ohio,

;

which

now

functioning

especially

bank

The
are

"taken

degree

Trust

popularity of any undertaking or service in which
concerned.
The natural* prejudice which was at first en¬

and

sound

Loan

and

success

Liberty

and

it will doubtless be gratifying to review the

result,

efficient

public

family

less

branches

without

increasing

this

efficient

countered,

comparison

con¬

Activities.

greater

vice-presidents

expansion

the

and

custom

Washington, by including national banks, shows the heavi¬
in
capital—184% (the capital of trust companies only

Capital:
est

shows

financial

unsettled

in' Victory

Company

different

Almost

and

saving

Resources.

various

administration

contributed

of capital, surplus, de¬
posits and resources and percentage of gain or loss as compared with
the preceding year, for all States where figures are available.
It will
be observed that all States show gains ranging from 1.1% to 670.8%
in these items,
with the ssingle exception of New York State, which
shows a decrease in deposits and total resources of 2%%.
table

accompanying

in business in
however,
make
the

values,

depletion in bank deposits.

the

steady

secrecy,

and

the

demonstrates
the

pany,

Deposits

Surplus,

Capital

increase

cotton

temporarily

who have to

you

activities.

country

Bankers' Trust
increasing confi¬

large

with grain,

development

investments

past few years,

reports

locality.

that

the

Denver of
indicating

bankers and capitalists of
with a capital of $1,200,000,

during the

following

and

for

prospects

great

the

resulting

heavy

consequent

development

pany

which are Texas, with twelve,
Missouri, with
ten; Louisiana, with nine; Indiana, with eight; Pennsylvania, with seven;
New York, 6; Arkansas, Colorado and New Jersey, 3 each; Maine, 2;
Delaware and Maryland.
1 each.
Two States reported discontinuances:
Texas, 4, and Massachusetts, 3.
Mr. Stone reports the organization by
leading

with

prosperity

period

adding

Trust

national and eight State banks additionally

twenty-two

the general
a

declines

sell,

reports

those

qualified to do a trust business; Washington is second with twenty-three
national banks so qualified;
Illinois is third with nineteen new Trust
Companies,

slow

with

Bonds

State

various

industries
Recent

apt

Vice-Presidents they would embody personal ex¬
periences
and constructive
suggestions which would go far toward
advancing this discussion to an interesting and helpful point.
My at¬
tempt will be to shortly consolidate the mass of data contained in
these reports and to draw helpful conclusions from them.
I find that
of the
States reporting, Ohio leads in
the number of new companies
the

and

Vermont

•!

..vv...

sharing

undergoing

ditions.

analysis ' of. their statistics necessarily lacks
to become distracting to my hearers.
I am
that if these several reports were personally presented

and

oil

growers

condense the partinent data
State Vice-Presidents of this

and

collect

been

has

State.

that

and second, because the short time allotted

reports

Dakota

crops.

Texas

and

presentation
interest

South

the

"How

was

acceded to the request of our able Secretary
reached me in the midst of ex¬

Section.

human

topic,

Co-operate."

Can

because the invitation

opportunity

thirty

discussion

Savings Bank, Lost Angeles, Cal.

Security Trust and

Vice-President

Rose beret,

II.

and

Does,

pressing business duties,

from
■

lead

Vice-President

197

SECTION.

State Vice-President Does and Can Cooperate.
the

How

State

COMPANY

important
reported

are

the

new

designed

existed.

to
a

new

from

legislation
remove

few

laws

has

the

however,

States.

support

objectionable

cases,

the

affecting

the different

operations

restrictions
new

Trust

Com

the large majority

the Trust

which

legislation

has

Companies,

and

have heretofore
been introduced

BANKERS'

198

general policy, plans for Trust Company publicity and subjects for
pertinent legislation.
In reading these reports one is struck by the fact that heretofore

Companies and

the interest of the Trust

adverse to

decidedly

which

CONVENTION.

institutions.
California and Virginia

banking

with

confronted

are

determined effort on

membership, with important exexclusively on banking operations,
towards developing their trust
business, althought fully authorized by their charters to do so.
A
change in this respect, however, is noticeably coming.
Soon the trust
functions of our members throughout the country will become vigorously stimulated. This may mean the changing point in our history,
Instead of remaining largely a depositary for and a lender of money,
we will become the hub around which all of the important financial
operations of our -several districts will center rendering to our patrons
a service calculated to serve their every material need.
With this
awakenipg is bound to come a renewed interest on the part of the
public, with more respectful consideration by the various State I.egispractically the whole attention of our

the Bar Association to enact a law prohibiting what is
termed "the practice of Jaw" by Trust Companies.
A similar law was
introduced in the
Kentucky Legislature, but was defeated through the
the

part

ceptions, has been centered almost

Few have made any substantial progress

of the Trust Company Section.
A
prosecuting an apparently well financed
campaign to
secure
adverse legislation against our members
there.
From a preliminary view of the proposed law it will take on ■ a
most hostile tone.
An effort will be made to prevent Trust Companies,
Legislative Committee

the

efforts

California

bar

the

faction-of

drawing ordinary semi-legal instratheir business. It is generally
conceded that in the large majority of cases all companies scrupulously
abstain
from
undertaking any work which
properly belongs to the
legal profession, but necessarily in the execution of estates and living
trust
and
the administration of trusteeships connected with corporate
securities a certain
amount of quasi-legal work is involved,, which
is
not technical, largely standardized and which cannot easily be separated
from
the handling of
fiduciary business.
On the whole, Trust Companieg are earnestly; trying to co-operate whole-heartedly with members
of the legal profession in the handling of fiduciary matters.
Mr. Kerr
reports that in Virginia the opposition of the Bar Association is not
justified in view of the amicable relations that have heretofore] existed
between Trust Companies and the legal profession.
In Oklahoma Trust
Companies are co-operating
with the lawyers to their mutual advantage.
However, it is a matter of vital important to our member
companies that this Section should concentrate its work in the coming
year towards some agreed plan to stay the enactment of any laws that
would
so
seriously hamper and disorganize the legitimate sendee of
in

and,

Trust

used in the execution of

are

latures and the Bar.

furnished

been

the more important legislation which
States, as shown by reports which

summarize

briefly

enacted

been

various

the

addition to preparing

has
have

administration

the

with

connection

estates.

"Blue

of the

support

Association.

Bankers'

State

has the

which

adopted

Law"

Sky

Several objectional laws introduced, but all failed through
the efforts of the Legislative Committee of our Trust Company
Section,
Louisiana:
New law permitting creation of trust for ten years, also
Kentucky:

Trust Companies to establish
New taxing law providing

permitting

branches in foreign countries.

for uniformity in assessments
Baltimore and those outside of that city.
New statutes relating to examinations, deposits, investfunds, liquidation of Trust Companies, and selection of

Maryland:

against banks in the City of
New

Jersey:
of

ments

trust

unclaimed

bill

prohibit

Bank

new

acting

The operation

executor.

designed to

was

acceptances

to five times their

capital stock and

Companies

to become stock' ■

surplus.

strictions
In

the solicitation

passing

interest
and

unfortunate

remove

to be completed.

(B) Next, finish our work of standardizing Trust Company fees and
charges.
You all know the value and call for this effort. 'v^a^V(C) Perfect, as far as possible, the standardization of Trust Company
forms and instruments.
It is feasible to supply a very urgent need1

statutory re-

present

called for in the suggested items for

reports, these thirty reports offer

Vice-Presidents'
than

business by Trust Companies.

formal subjects

to the

addition

perfected

being

Plans

State

Banks.

in Federal Reserve

Washington:

Trust

permitting

law

Recent

Vermont:
holders

to us at this particular
noticeable lack of State

other disclosures of
time.
There seems
Trust

here,

Company or-

(D)

centered
all

notice

pany

affairs.

these

thus

This
of

new

the

work;

latter

the best

have

activities

patrons
similar

Many

pany

the

their

the bank

confidential

possibilities

(G)

cov-

fiduciary

most

fruitful

all

other

this

effective

(H)

J
show a rapid advance in trust
institutions have shown such an

reports

These
as

to indicate plainly

that they are com-

(and in some cases necessity) of fiduciary
general customers.
By no other means can thebe

cemented

closely

through

trust

tie.

important

help

from our Committee on
This shows most definitely

this direction.
It indicates that our Trust Comis the one which can logically direct in matters of

Matters

involving

general

public policies affecting alike all

our

Executive Committee.
The
organization, such as ours, is

self-evident.

for

value

taxation, a common rule against perpetuities, etc.
in the defense of our membership against

counsel

membership should be determined by Cur
advisability of this where there is a central

direction
means

and

at Trust Companies.

source

In fact, the reports from

experimenting

are

services,

single

Define

unjust hostile legislation, from whatever source.
The lawyers have
already preceded us in this effort, for the American Bar Association, a*
will be disclosed in the report of the Committee on Co-operation with
the Bar, has framed a general definition of the practice of law by
others than attorneys and has undertaken to recommend executing legislation in every State in the country.
This, of course, is aimed primarily

and pam-

newspaper

corporate

members.

Committee on Legislation.
in

organization

States

solicitation for trust business.

the

overshadow

the

all

acknowledge

reports

Publicity and the
the

who

banks.

national

with

all

business.

expected,

appreciate

relations

liable

new

to- compete with

eagnerness

ing

is open to our

it" is

that

personal
become

Companies

Trust

indicate

increased

the

interest

destined

seems

business that

larger

and

discussion

experiments

securing

Kentucky

the part of our members; (c) renewed activity in
(d) the entrance of national banks into trust fields,

recent

(b)

covered;

regions

stimulating

and4(e)

causes

exception of

'a most flattering outlook in Trust Comthis are indicated in (a) the general pros-

show

reports,

publicity

educational

uniform inheritance
the

with

that

The

the

perity-of

practices for Trust Cornand also with the public,
| This might go a long way towards popularizing us with them both,
(F) Assist in the enactment in the various States of uniform legislation pertinent to fiduciary business, such as uniform execution of wills,

efforts.

future

will

ered

phlet

upon

our

You

of our institutions.
(E) Carefully define and explain ethical
panies, both in their relations with the Bar

them we have an ideal instrumentality
The efforts of this body could well be
organizing State Sections, as a basis for

function.
the work of

which

be criticized by the Bar.
of a model Trust Com-

pany.

with

but

scattered,

badly

through

find

and, if diplomatically done, will not
Chart
the
internal organization

Trust Companies are like Topsy—they "jest growed.", It is a
real cause for dismay to view the "slippage," overlapping, of effort,
lack of fixed responsibility, and need for speeding up service in some

that only seven States covered, by these reports
have any
semblance of local organization.
These are California, Missouri,
New
York,
Ohio,
Pennsylvania, Texas and Washington.
This
condition indicates a very fertile field
for some constructive work by
our
Section.
The State organization
is the logical and most effective
unit for our national activities.
In fact, without them our fire is apt
ganizations.

I am

relative importance.
,
(A) Let us finish the job of organizing a Trust Company Association or a Section of a State Bankers' Association in every State in the
Union.
The importance of this cannot be understated if we are to
construct a powerful body for constructive and defensive purposes.
It
has no substitute and we might well make this the first positive work

capital

permitting Trust Companies with $500,000

law

execute

which

defeated,

but

has been satisfactory.

Act

New

Texas:

publication

directors*
,

from

Companies

Trust

the

was

directors and

officers,

loans

examining

etc.
introduced

deposits,

Ohio:

the Board of Directors.
affecting

assistance

permitting

employees,

law

recent

York:

New

other than

from

vice-presidents

generally throughout the country.

all testify from our individual experiences to the personal
co-operation from these men in many matters of common interest not
shown in these reports. For my own part I can say that on Numerous
occasions requests for information from them have been responded toso instantly and intelligently as to make me feel that our Section is
not only an association in form, but what is more essential, one animated by a spirit of good fellowship and mutual helpfulness.
The Secretary has requested me to offer suggestions as to how our State VieePresidents can co-operate either differently or more effectively than as
disclosed in their reports.
This is a large as well as an interesting request.
Such comments involve suggestions as to the future course of
our Section, which, of course, I could not be expected to make.
How¬
ever,
I will endeavor to intimate certain thoughts which I formed
while studying these reports.
I was struck particularly with the fact
that our State Vice-Presidents have no definite assignment of work or
functions at the time of their election.
Their positions seem to be
partially honorary.
Could they not be charged with definite responsibilities or given a fixed part to perform in a program determined by
our Executive Committee annually?
It would seem feasible, and I am
sure would be gratefully received by these State officers if our Executive Committee would, at the beginning of each year, outline one
or two constructive tasks for completion during the ensuing year.
Each
Vice-President could , be assigned a definite job as his part of the
work in furtherance of the program. If one single constructive effort
were undertaken and completed each year it would not be long before
the chief problems now facing trust officers would be settled in a
definite, expert and helpful manner.
Merely as illustrative of the
thought I wish to convery, the following are some of the things which
might go into such a program to be executed through out State VicePresidents.
These are not necessarily suggested in the order of their
SUre we can

e-hanged

Indiana:

disclosed by the
the Secretary. In

these reports our Vice-Presidents have always
respond to calls from our several com-

held themselves in readiness to
mittees and from trust officers

to meet

banks

enable

suggested

legislation

New

conditions.
Illinois:
New legislation

Conclusion.

The foregoing covers the more important matters
thirty Vice-Presidents' reports placed in my hands by

me:

Delaware:

-.."/v

•

Companies.

will

from

corporations,

all

fact,

which

ments

The respective State Vice-Presidents would be the means through
which these definite and constructive annual undertakings would be
consummated.
It is my humble judgment that if such a policy were
pursued, we would find that these officers of our association would be¬
come

real factors in the further development of our

organization.

They

would in effect constitute the liaison officers between the national association and the various State bodies.
We can readily conceive that
through such a system our Section would take on newl vitality, become a

progressive and constructive agency, and our membershtp be led
from trouble and into intelligent policies which eventually w»uld
make the Trust Companies of America the chosen instrumentalities
our people for the major part of their fiduciary business.

away

TRUST

COMPANY

SECTION.

199

Committee / Officers* Reports-Trust Company Section
Community Funds and Their Development, by Frank

Parsons, Chairman of Committee

The

Community

ing and
land

Trust

developing.

Foundation,

trusts

are

the

now

communities

six

movement

the

Trust,

gradually

made

Cleve-

these

many

other

considered

being

are

^pread-

the

shirty-five

some

being

plan

inquiries

numerous

from the formation of

years

Community

first

operative,

and

Foundation

Within

Cleveland

wills

later

living
time

method

aided

The

the

medium

the

best

the

the dead

an 6rS

are

and

philanthropically
religious
that

bodies

The

and

summarized

the

ability

their

the

fund

Community
time

(a)

(b)
this

donors

management

be briefly

may

addition

the

soon

and

other

wealth

charitable

possible

trusts

for
part

the

serve

with

moribund

Community

the

Trust

who

donors

might

Suggestions

not

etc.

use

wish

York

provision
panies.

for

only

the

older

trusts

cational

this

country,

country

and

data

trusts,

this

foftns

data

The

matters

come

and

the

First,
which

directly

study
be

becon-

throughout
with

the

prospective

movement,

the

would

but for

interested,

Trusts

supply of them

would

welcomed

is,
it

significant

most

under

one

The

New

been

has

with

trust

York

have

etc.

this

has

fifteen

launched

com-

of
has

trust

com-

York

trustees

beet)

further

adopted

bit of

was a

different

through

Representatives

Perhaps

series

different

could

Westchester

trust

and
as

whereupon

uses,

at the request of
the

his

Company,

conclusion

operated,

now

Mr.

was

forced

too

limited

was

Ilemsen,

him

upon

the

director and

Y.,

was

re-

uniform

the members that

Remsen advised

had studied

the

meetings.

Yonkers,

was

200

outline of his plan for

company

these

Daniel S.

Mr.

Trust

The plan which
perhaps

attend

the delegates,

one

the

gotten

luncheons

At each meeting neces-

of opinion

consensus

insti-

progress-

noon-day

twenty

discussed.

was

move-

task but that lie had

institutions

luncheons.

the

was

best people who

Mr-

Remsen

impress

particular

purposes

is. broad,

home.

existing

that

Community

the

accomplish

it,

the

affecting

Community

Trusts

with

laws

for

respect

charities

only

wise

are

idea of
greatest

the
good

Community

to
allow

this

the

looks
best

other

the

has

home

but

speaking,

his

Turning

there

benefactions

has

than

these

matters

last

rnitted

third

general

summer,

various

pared

for

who

prefer

that

Rockefeller

resident

have,

mind,

nearer

If Mr.

every

ought to
in

over

Now

appealing quality

people

city,

ago

charity

first-class hotel without doing anything.

what

see

accomplished.

the

many

one

wants

One is that charity that

The result is I have been at work

year

community

man

around

the stronger

are

the

that

In other

locality

said

there must

in which all charities should be given the benefit of this

way

new

from

taxes,

under

transfer

Trusts

situation

should

that

when

prepared

people.

After

draft.

receiving

criticisms

draft with such

now

work

the subject

since.

ever

draft and afterwards sub-

first

criticisms

many

had

upon

gotten,

the

pre-

and then
draft

fourth

pre-

and

number of lawyers connected with trust companies throughout the United
States and

number of lawyers connected with various charities, national

international

and

well

You

may

not

may

local,

are

examining the

not the

desired

know that

the

purpose

document

can

missionary

with

be accomplished.

societies

all

the

churches have, like the Trust Company Section of the American Bankers'

inheritance

subject

which

nearer

if a locality

some

fortune,

geographically;

confined all

injured.

his

because

so,

to charity that shall be world-wide.

money

city might live

words,

properly

be classified in two ways.

charity

generally

the conclusion

came

purposes

may

mean

The

give their

bad

"I
and

personality

papers

provide

his

the

those

said:
strong,

very

edu-

daily

pared

interest

deemed

the

given, at which the subject

delegate

gifts

had succeeded

in joining in this

revisions were made and suggestions accepted.

view to seeing whether
legislation

course,

interesting

and

being evinced

revised

the

qualified

the

attention.

our

institutions

grand idea.

been

Trust.

interest
been

has

already

Community

lively

Foundation

evolution

which

bank

State

advertising

Buffalo

New

gifts

This

trusteeships.

multiple
Two

the

for

the

name

quarters.

have

avoidiing the evil

time.

finally

Time

Community

luncheons and discuss the subject,

those

careful

possible

inasmuch

sale

Community

moderate

and

trusteees

campaign

the

under

all

national

helpful in

help."

each

charitable

for

The

trusteeships,

multiple

three

acting

are

perhaps

how

trust for public

New

found

need

usefulness

Parsons was asked

Mr.

best

publica-"

inittee.

and

these

were

and

safeguarding

quested to present to the meeting

trusts.

publication

them

and

this

stimulating

New York

many

conferences and

little

are

complete

these

make

such

most

value
in

and

the

obsolete

movement

considerable

book

doubtless

could

country

Trusts

and
of

have

clubs,

colleges,, libraries,

give

tutions would attend

Trusts

foundations

partially

governing

methods

should

reference

laws

advertising

working

book

Community

them,
of

the

desirable

such

the

following:

Hand"

address,

noon-day

gather

can

■

suggestion of

uses.

development

Trusts,

the

cared

become

compilation

Community
features,

shall

highly

seem

"Dead

desire

for future generations.

the

showing

methods

Such

contributions

having

after

intelligent

stands

moment

determine

certain they will be

the

donors

afford

can

ing

left

England.

analysis

I am
of

the

to charity.

sary

their

as
on

which

required

Trusts.

ideal

Tables

cerning

will

pressing demands;

when

ment, to which he replied that it

uii-

without

make

banking

helpful assistance for that portion of the

security

powers,

and

"the Community Trust

in interesting

underlying fundamentals and possibilities.

quest,

bequests and : donations

translate them into practical,

Following his

charities funds

means

public

charitable

live

means,

would

date
to

broad

large

portion

movement,

wait; it is for all times; it has

conservative

the

philanthropy.

small

men

and

investment

proper

through

its

transfer

spirit

be considered by

course,

succeeded

through

devoted

review

such

connection

furnishing

country.

(d)

•

and

compilation

brief

countries,

great

trustees.

men

that

published

cover

plan,

civic

the

and

fund.

for

obtainable

information

tion

the

and

permanent

otherwise possible.

later obsolete

for

Trust

have

but

provide

view

charitable

trust

community

same

With

the

better

principal

expense,

opportunity

own,

and

new

plan to the community, to the

of
not

purposes

the

opportunity

The

Trust

attention

philanthropies themselves

the

acting

worthy

common

sound

the

themselves,

interested

development

institutions

The

advantage

and

originally

bring

New

An appeal from the decision has been filed

As has been well said, however,

through the

effects

and

reasonabie delay and
an

better

can

than

the

onvention in June, as follows,

ssocia ,on

community

bequeathed

The

rather

Community

the

can

community trust

preservation

funds

qualified

generation

each

they

becoming

charities

creation

The

generations,

for

ad-

facts,

is taking place

the past.

with

carrying out of community
2.

fundamental

which

follows:

The

two

change

Buffalo

the

Trust,

counsel

the

chari-

essential.

and

these

assurance

advantages of the

donors

worthy

existing

the

intelligent

viewpoint with respect to charity and,

our

which

also

are

confidence

which

inclined,

and

recognition
constant

recognizing

safeguards

with

ail(* ^rus^ company men from the standpoint of 'Is there business in
*or our institution V I believe there are tremendous possibility for
increased trust business jyul also in stimulating the general trend toward corporate trusteeship.
With proper publicity, the trust officers of the various institutions and attorneys generally fully advised,
^
energy and enterprise on the part of each trustee,
large results will ensue. It is certain that the possibilities under the Community Trust plan are vast and far reaching. To translate these possibilities
'n*° business an(i public benefit will call for a thorough knowledge
on
part of trust officers, attorneys or other officials in each
institution, a strong belief in its merits and personal zeal in advoeating them.
^.•

under

are

Community

taken

■■:.<,■

problems

hand

charities

however,

and

minds

vantages

charitable

Existing

■

Detroit

also

T? ?"m "P the Case fro,n the business standpoint, I can perhaps do
"° 6 fr
a"
fro"l
address befoie the New York State

and

distribution at

for

necessary

income.

plan

and

studies

and

made,

certain

structure

that

solved

Trust

element

social

our

second,

being

are

available

income

Surveys

undesignated

Comunity

first,

the

and

small.

from

the gifts and bequests to the trust

cases

trusts

distribution

ties

majority of

the

and

"A matter of this sort must, of

the

present
-

others,

^nelustan C°mmittee °' ReVicW "nd the situation win b1 fo,I°we(1 to »

procedure.
In

Foundation,

and

York Community Trust.

Community Trusts.

the

Foundation

tax.

this

rest

State

for

the

income

tax

Association,
eign

missions

within

the

institutions

central
and

churches.
and

That

organization.

have

the

also

course

true

met
of

the

our

is true both
all

home and for-

religious educational

officials

discussions

of
the

every

one

following

bodies

these

purposes

present.

second,

The

affecting

country.

gifts
return

in
of

however,

bequests,

Under
trust
the

a
a

ruling- of

trust

individual

having

were

reference

interest

donor.

may

This

the

Federal

Community

Commissioner

company

Roper

not be

situation

Trusts

has been

deducted
has

all

been

over

held

the
that

the

gross

discussed

with

from

developed:
So

forded the

possible,* all

same

facilities for

far

thus be placed upon
ous

classes

the

public

conservation

charities

should

equal footing for the presentation

af-

of their van-

claims to the public.
A trust for

their endowments and

charitable purposes is often a wise form of gift.

act

for charitable funds
of public

trustee

between different classes

neutral position as

occupy

seeking

corporation

should

CONVENTION.

BANKERS'

200

charities.

trustee

corporate

all

suitable

for

whether

selected by the donor or testator.
They should be
communities and available for all charitable purposes,

religious

and

to' both

non-local.
organized
charities, with advantage
public, can properly co-operate in making more

secular, local or

and

trustees

Corporate

should be standardized

They should be open to any

the

wealth to wise public uses.
trying to do. It seems to
me that the Trust Company Section of the American Bankers' Association
should approach this subject with an opey mind and in a broad public
safe and

That

the devotion of surplus

easy

general analysis of what I am

spirit.

■

Co-operatinguwithAthe Legal Profession, by William S.
Miller, Chairman of the Committee on Co-Opera¬
tion .with the Bar, and Vice-President of the
Northern Trust Company of Chicago.

Committee

the

left me as the only survivor

city, and upon me

the

mittee

with

Co-operation

explained, the chairman of
Bar was unavoidably called

has

city yesterday and

the

out

chairman

the

Rosebbrry '

Mr.

of this com¬

has to fall the duty of presenting

this

to read, so I will, in a few words,
give the history of our efforts during the past year.
The Committee on Co-operation with the Bar as now constituted is
a
continuation of the came committee created
in Chicago two years
ago for the purpose of endeavoring to co-operate with the Bar to re¬
move threatened
friction which then seemed to be arising in different
Last year we reported "progress."
We told you
had great hopes of arriving at some amicable understanding
lawyers about the ethical practices of Trust Companies and

the country.

parts of
that

with

the

American

the

vention

But just prior to our last con¬
Bar Association at its annual meeting in Boston

ground for so reporting.

clear

had

have no written report

report.

define the practice of law by others
We immediately endeavored to get in touch with that
a
view to framing with them an agreed definition of

appointed a special committee to
than

lawyers.
with

committee
"the

During the year we made re¬

by lay agencies.

of law"

practice

the Bar Committee but were unable to do so.
discouraging, for we felt that this meant a drifting apart

peated efforts to meet

of
forces
that were intended to co-operate and whose interests arid aims
were
common.
I can only say that a joint meeting was not held with
tire lawyers'
committee, although we repeatedly suggested it and inwas

very

ited

known to your com¬
It was very extended.
Doubtless some of you have seen it.
believe that for the purpose of bringing out the main issue in¬
here I should read an extract from the report giving that com¬
that

mittee.

But

their

Louis,

St,

Bar Association convention
special committee presented its report, and the con¬

volved

report

short

rather

nition

framed

It is embodied

the practice of law by lay agencies.

which

report

of this

This is the defi¬

Section.

understood, is the
pursuance, as a vocation, of the learned profession of the law."
I wish you would gather the significance of that phrase.
"The pur¬
suing as a vocation the learned profession of the law."
In other words,
"The

the

tion

oath

best

and

limited

master,
tuted by

counseling

any

act

corporation.
That a corporation cannot
is not a natural person, it possesses
neither learning, good character, nor capacity to take an oath or to pre¬
serve
and occupy a personally confidential relation with a client."
such

person

practice

law

axiomatic.

natural person of

and where

means

of a livelihood

inalienable right, but is a per¬

society, and society

the practice

is best served

of the law is strictly

Present-

law,

its broadest sense, therefore embraces

personally appearing as an advocate

board,

pleadings, documents,

capacity in connection with pro¬

prospective before any court,

body,

and
in a

committee,

commissioner, referee,

commission

officer,

consti¬

having authority to settle controversies, or the advising,
a

vocation

person,

any

firm, association or corporation

vocation,

relating

any

documents,

securing or

instruments,

secular rights, or the doing, as a vocation,

in a representative capacity

lending to obtain,

papers,

in behalf of another, obtaining or

tending to secure for such other any

they

Technically

report sets out some of the
claim constitutes practice of law.
doubtless correct.
Here is what they point out as

are

the

definition

lawyers

the

which

things

this

particularize

specific

offensive to this definition:

being

of any
instrument, securing, procuring or
effectuating the same between persons with neither of whom there is
privity with him, or the relation of master and servant in the ordinary
and
usual meaning of that term, he is practicing law unlawfully and
improperly.
So, if an insurer of titles prepares conveyances of title, or
other instruments with respect thereto, not
to or from himself but to
or
from others with neither of whom there is privity with him or the
relation of master and servant in the ordinary sense he is unlawfully
and improperly practicing law.
So if a maker of abstracts of title, as
a
vocation, gives opinions on titles to persons owning or seeking to ac¬
quire same, hot in privity with him or occupying the relation of mas¬
ter and servant in the ordinary sense, or if he assumes to give the
legal effects of the documents, records,' and instruments in lieu
of
in addition to the facts shown by them he is unlawfully and improp¬
erly practicing law.
So if a trust company assumes to draw wills or
other legal documents, the trust company is unlawfully and improperly
practicing law.
So if a real estate broker, as a vocation, that is,
charges for drawing conveyances or other legal documents between the
seller and the buyer,
he is practicing law unlawfully and improperly
"Consequently where one

vocation., prepares a conveyance

as a

whatever, or

property

species

other

enforces,

the ordinary

with

rights

compromises defaulted, disputed or

neither
in
sense, or if he assumes to advise or counsel as to the legal
respect thereto he is practicing law unlawfully and im¬
accounts

between persons with

controversies

in privity,

whom

adjusts

settles,

secures,

claims,

tortious

the

So if one as a vocation

the law.

exact accord with

and

full

consideration to prepare

conveying the property of one to

and correctly

legally

instruments

clearly assuming for a

obviously

because

the relation of master and servant

properly.
"Of

self;

may

claims

and

not

for

thereby

and

conveyance

whenever

layman

lay

report

this

that

hostile

criticise

that

will

definition

the

which
various

your

own

are

by any

They
we

have

in¬

ever

real

class

this

indeed.

There

You

State,

may

you

not.

may

doubt¬

legislation throughout

called

upon

that this
the

to meet

That will probably de¬

actions.

will
think

will

means

rightly

in which that has been
generally been corrected

almost

have

law.

the

mail
you

where

approval
out

has

be suggested

suggest to

their

ethical

practices,

else,

willingly

offend

the

not

Executive

letter

Committee

indicating

the

proce¬

avoid hostile legislation

heretofore

trust companies

the

you

should follow
none

rigid

State.

practices,

however,

given

into

with

States

which

idea

lawyers

companies.

trust

to the recommendations of the Bar Committee

Committee,

remedy
The

the practices of

is almost a moot question and not a real one,

legislation,

enacted

Association,

dure

But this

Statse.

some

have been instances

practices

impetus

upon your

The
this

past

discussion

be
in

situation

class

unethical

past

our

those
the

State due

every

and define it on principle;
case.
They have made no

in various

menace

practices

and there

threatened

the

less

pend

them,

now

but

this

statutes
a

the better

that

ethical

the

But

shown.

the

limit

done

some

the

been

not singled out

We are

define the practice of law in

going to

agencies.

some

dulged

There is

It is so all-inclusive as

interest.

business

every

undoubtedly

in all States in the

Bar Associations

this definition.

if they are

probably

believe

not
to

that

that they secure executing legislation.

has

have

definition

business

State

what

exceptions

the

would

respect,

and

broad

request

lawyers,

Bar Association and the
the report and recom¬

American

the

recommendation

alienate

The

the

the character of

hope

alone.

rendering, such
and improperly

instance unlawfully

in such

with

sent

the

with

probably

kind, character and in a manner that

of a

approved

was

mendations

some

wherever and

In short,

parties.

and charge an attorney's fee for

agency

carried

resolution

Union

of the

law."

practicing
The

himself

charges a fee, as an attorney's fee.

agency

by it

attorney may render

layman

others; an insurer of titles may

other

from
lay

services rendered

for
an

sold by
he goes into

not so if

but

another thing to charge for drawing instruments

quite

but

law,

improper prac¬

for delivering goods

carrier,
for

goods

may

instruments of conveyance to and from
guilty of unlawful and improper practice

drawing

not

collect their own

charge of unlawful

common

delivering

business

the

charge

merchant may charge

becoming

without

him

merchants

group
to the

subject

law.

the

tice

insurer

mrchant

and

to and from him¬

the legal effects of instruments to
against liability may defend the in¬

upon

pass

may

himself.

sured,

and not some one

eat his own dinner,

may

one

insurer of titles prepare conveyances

abstracter

from

and

just

course,

else's

applicant

secular law, or the drawing or the procuring of assistance

drawing,

affecting

franchise to

all

doing.

taking by the

law,

any

is the

capacity, or the drawing of papers,

any

anything which a

and ability granted by society for its

not

regulation

when

ceedings pending or

the

integrity

performance of any act in such

the

vocation)

vocation

the

representative
or

licensed therefor as by the statute required.

of the

practice

day

right

the

is therefore

and

attorney

compensation, or for a considera¬

benefit primarily rather than

persons

comprehends

for

(follow
to

character,

protected

licensed

and the right

subject to

one,

such charge compensation for

precedent

grantee,

missive

not

may

office,

good

learning,

the

learning,

and any¬

attorney may

protection and
to

his

of any of the same in behalf of another,

indirectly

condition

at present and generally

compensation

licensed

directly

licensed

for

and reputation,
not

one

law,

practice

exercise

skill

attorney,

practice

committee and

your

Bar Association's special committee:

the American

rendered

was

Committee

Executive

the

with

filed

for the first time made

were

mittee's views upon
in

American

the

session

last

the

During

tents

and

it.

rights whatever.
The doing in a representative
of the foregoing by a person not licensed
by a corporation, constitutes unlawful and improper

property

capacity, as a vocation, of any

far as possible,

uniform throughout the country.

made

and

public uses,

for

Trusts

secular
of all

charities.

world-wide

and

nation-wide
5.

and offer special facilities to local
disparagement of local religious charities and

the

charities,

tends to con¬

constituted,

generally

attention

public

centrate

Trust,

Community

The

property

been

enacted,

and

in
the'

defensive, but it is corrective.
that they be cautious, careful,

and that they do not, above anything

better

members

of', the

Bar

their

own

TRUST
This

Committee

section

of
for

country

the

trust

touch

The

what

not
other

practice

will

That

favorable

affecting

guided

the

parts of
of

the

lawyers

another

section

healthy

area.

companies

your

and

The

one

condition

will get

you

amongst

allow

not

that

hardships

the

United

attempt
in

law,

from

have

tion

the

it will
new

counsel

from

seems

this

sentiment

Report

trust

companies

problem

avoided

but

Bar,

will

you

have

companies,

legal
our

also

endeavored

live

chief

nation-wide

that

does

not

proper

and

ethical

reproach

and

available

thing I

fair

for

and

can

the

there

companies

States

countenance

ought

amicable

business

are

the

with

McFadden

Federal Reserve Act by

Representatives BiU known

under

blame,

local

it.

might
is

but

Bar,

the

Com¬

Henry

will

business

your

not

above

that

suggest

general laws of

general
of

the

business

prescribed

Pennsylvania, introduced in the

11,918 to amend Section

incorporated by special law

State,

any

which

by the Secretary;

financial agents of the

duties,

members

are

will

approach

question
Above

shall

and

depositaries of public

may

the

they

may

and

money

be required of them.

be employed

financial

the

good

faithful

performance

This Bill
and

referred

was

reported

their

duties

deposited with them and
financial

the

first

and

the

trust

Committee

amendment

journed without passing the

methods of

Bar

the House

without

out

April

agents

Mid-Winter

Conference

York

New

City,

your

judgment

tion,'' '

this

Congress

trust

companies
20,

held

and referred

Executive Committee held in New York

the

Executive Committee

action.

for

the

delicate

situa¬

Address

President

Lynn

secure

provide for

Dinkins.

claims for
I

welcome

the

Twenty-fifth Annual

Section,, and remind you that at

pany

.Mr.

you

Platten told

ance

which

were

tions

then

the

demanded

Solution

for

two

the

Meeting of the Trust Com¬

meeting last

our

in St. Louis,

year,

overshadowing questions of domestic

attention

railroad

and

efforts

problem

and

Trust

import¬

Company

men,

readjustment of the rela¬

existing between employer and employe.

Twelve months

short

period.

The

meeting

legislation be and it is hereby re¬

quested to co-operate with the Legal Counsel of the Association
deavor

amendment

the result.

referred

the

Committee

Revenue

Act

1918,

en¬

in order to

reduction in regard to taxable trust estates."

was

the

speedy and inexpensive court adjudication of disputed,

exemption

II. R. 13,259

Following its introduction in the House, it
Ways and Means, and had not been

re¬

ported out of committee when Congress adjourned.
iOn
H.

May 22, Mr. Green of Iowa introduced in the House, Bill known

It.

14,198, designed to "amend and simplify the Revenue Act of 1918"

for

League of Nations, Disarmament,

dis¬

were
a

unanimously adopted:

was

"RESOLVED, that the Committee

;

the

present

February 21, the follow¬

new

ing resolution

ad¬

the

1920,

some

for

eagerness

Banking & Currency
1920.

determining taxable trust estates and relief therefrom

com¬

come

28,

February

trying

the

measure.

Hotel,

There

nor

the

believe

movement.

agents

otherwise, for the safe

money

cussed

allow

not

your

will

reason¬

The Secretary of the Treasury

keeping and prompt payment of the public
for

also

are

State

Federal

require of the banks and trust companies thus designated satisfactory

Waldorf-Astoria

such

the

view

all,

get the better

character,

join

between

with

the

organized

Government; and they shall perform all such

security, by the deposit of United States bonds

unfair

Bar

interests

com¬

adding the following paragraph:

trust companies

by Congress

System, when designated for that purpose by the Secretary of the
Treasury, shall be depositaries of public money, under such regulations as

legiti¬

acquiesce

you

Reserve

have

practices

your

the

Government,

States where it

the

conducting

committee

friendly

whether it

you

threatened

wise

acquiesce

Government."

the

decision.
to

are

legislation

this

upon

you

the

members

panies

year.

January 20, 1920, Mr.

I
not

legislation.

any

better

and

well

Three Bills have had the attention of the

House

may

States.

this

Legislation

and

helpful

that

trust

with

rests

trouble

harmoniously

you

and

in time.

you

that

and

believe

not

just closed.

year

during the past

consulta¬

very

say

between

some

where

advice

and

work

then

Governments

No bills of particular interest to trust
companies were passed

economic,
in

case,

ample

contest

one,

States

our

suggest

hostile

dormant

question

mittee

any

Committee

define

find the situation is get¬

you

obtain

may

the

But

other

take

you

fairly

the

both

the

believing

and

trust

prepared,

brief

State

Section.

so.

active

mate

during the

will

I do not believe it will be serious in all of the

remain

oldest

here believe it is the best,

Campbell, Chairman.

able

live

the

one

local

your

adverse

continued,

standpoint

Committee

any

optimistic

very

shall

the

threatened

lawyers.

the

brief

to
The

you

now

which the future has in store for it.

I think you will find

some

problem you might have.

any

successfully meet and solve all its present problems

ones

"All banks

and

States of America

of the

opposition

ting beyond

201

world, and I feel satisfied that all of

that

country.

Committee,

our

intelligent fashion.

that

lawyers

SECTION.

they object to, and if the objection is reasonable,

suffer

purpose

present

the

COMPANY

mittee

the

true,

what

unobjectionable.

sentiment

will

faced

find

in your community, if possible to avoid it,

grow

you

this

disapprove

will

find out

careful

found

companies situated

with

lawyers,
be

wholly

may

the

has

the

sale

other

ascertaining

purpose

"the gain

disposition of property,

derived

real,

loss

personal,

sustained

from

mixed."

This

Mexican

affairs, National
Budget, Income Tax Laws, Bomb Outrages,
Prohibition, Housing Shortage, Foreign Trade, Deflation, Woman
Suffrage,
and

has

not

great many other questions have claimed
been

but

to;

possible

that

say

some

one

will

men

care

and it

the

and

desire to reform

is, of

course,

current

provide
there

therefore
of

little

use

should

labor has

that

retards

result in

would not

would

portion of

the

been

satisfac¬

interest

fore the Bill

The

measures

the hearty

urged in the

the 27th.

the Finance

May 22 and referred

reported out without change

was

then introduced into the Senate,

was

Committee.

Congresd adjourned be¬

reported out of committee.

was

above

and

gress

referred to

was

passage

will

undoubtedly

co-operation

introduced

the

all

members

the

Section

Con¬
is

of the first two and the defeat of the last named Bill.

derived

this

ISAAC

development

them

endowed

men

income

each,

could

which

from which

war

able

many

new

and

wealth.

man

the

men,

enterprises,

and

discourages the ef¬
self-reliance,

who

but the

consideration

to designate the

changed

necessities

commodity

and

to
do

markets

sources

taxes,

our

advantage;
not

without very

I believe there is

co-operate in an

much
a

advice

now

for the

and the

but the

they

were

satisfactorily

past

days

pro¬

present

selected

secure

assistance from

ex¬

us.

gradual and orderly

credits, and bankers should not hesitate to extend
solvent customers when such action is needed to

Theodore
To

the

President

TETER.

Protective Laws by

Smith,

and

Members

the

Chairman.

Trust

The

Protective Laws Committee of the Trust Company Section, American

Bankers'
tion

Association, submits its report of activities in supervising legisla¬

affecting trust companies, introduced in State Legislatures which

vened

during the winter, spring and

Only

twelve

States of

the

Union

summer

have

held

regular legislative sessions

conserve

the members

of these States that has been particularly detrimental

the interest of
A

from

years.

liquidation

this purpose.

other

The

the

committee have

reported

legislation passed in
or

beneficial to

various bills

new

is presented as follows:

banking law passed by

The Banking Department is

January 1, 1920.

Treasury

the 1919 Legislature

with

Department

which

was

now

combined

became

separated
for

many

Trust companies receiving deposits are under the scrutiny and regu¬
of

this

banks

Kentucky:
most

our

trust companies.

of the

resume

Georgia:
as

con¬

months of 1820.

and

lation

increase their lines to

American

Company Section,

Bankdrs' Association:

effective

serve.

widespread disposition among bankers and merchants

effort to

BELL

any

should collect

FULLER
ORR

con¬

Ot course, such under¬

graduated that

Report of Committee

from

sources

there

courageous

undoubtedly

the

but the

proportion of their earnings,

proper

should

and

be inclined to undertake engagements which

chill enthusiasm.

require

fact;

country.

the country's

Chairman

pay

public debt,

our

initiative

our

with

CAMPBELL,

McCARTER

II.

LUCIUS

enough

subject

OLIVER

almost unanimous

are

discourages investment

in taxes

pay

If,we accept

ob¬

very

differ regarding

ample of what is in store for all values, the question of Deflation will

passed the House

where

possible.

taxation,

concerning

increase

from

under the stress of

settled

introduced in the House

UZAL

We may

opinion, and in the judgment of

present

adventurous

amount taken

sources

and

was

Ways and Means.

and to accomplish needed defla¬

Government,

our

discussion

income

takings should

scars

raise by

necessary

few

would, under other conditions,
would

stuation.

and

The Bill

Committee

adapted for conducting the business of

Income Tax laws,

our

siderable difference of

forts

effi¬

operate

to the

were

might give special atten¬

Association, but I believe

to leave

expenses

this

method

now

perhaps not too much

jectionable.

reasonable sinking fund to be used in the liquidation of the
debt;

can

which

Several features of this Bill

HENRY
men

and Deflation.

By-laws best

Bankers'

in such way as

the

other difficult matters have been properly

many

present Income Tax laws

Constitution

time,

promptly that those interested had

-V.'

The American

tion

our

passed by the House

was

opportunity to enter protest.

problems mentioned. Trust

efforts until

During the coming year Trust Company
tion

can

the labor

few of the other

in their

persevere

torily liquidated and until
adjusted.

rates;

have measurably improved

portion of

overshadowing problems referred

that railroads

at high

money

else will take

Company

adjust both the

have arranged matters

ciently and borrow
to

measure

serious

new

law

and

subject to examination

operating under a

State charter.

and reports similar to

Several bills hostile to trust companies were introduced.
one

was

"practice of law."

bill prohibiting trust companies from

The

the so-called

Through the co-operation of our committee, information

result that the bill

Louisiana:
this

minor

exist for a period of ten years

may

distinct

been

Through

1808.

since

effect

Through

Maryland:
the

companies
trust

law,

Baltimore

but

offered,

were

large number

Massachusetts;

none

harmful

and

date

645

from

information.

has decided

Committee

the

companies,

This has tended to delay

of $65,000
proceed with the

written and verbal subscriptions

With

starting.

with members fol¬

subsequent letters, which
Many questions bearing upon

letter and

first

asked and answered.

been

service,

fiduciary

in its initial stages.

large correspondence

very

the

additional

contained

selling

for

forwarding

campaign have

part

approximately $140,000.
entirely new plan, using nation¬

would receive
Your committee
could be secured and used in such a way ag to
favorable attention to the trust companies of the

fiduciaries.

that

the

upon

Ex¬

V''

...

amount

companies

$100,000

the

detrimental nature passed the

to this report

subscription

unanimous

secure

mediums

the

affecting financial institutions

Bills

that

the

have

companies.

Mississippi: N,o Bills of interest to trust

is attached

however,

expected,

widespread

lowed

capital, surplus

combined

letter

the

that

would

co-operation of all

country

this year.

$3.33, which is the prevailing rate

not

believed

the same rate

taxed at

now

are

estimated

circulating

direct

levied on trust
and banks outside of the city of Baltimore.
Under this new
companies will be taxed 1% on capital and surplus instead of

city

their

companies

was

the

operating branches in foreign countries.
the enactment of a new law, trust companies of

panies are granted the privilege of

copy

was

ally

law trust com¬

new

cent,

per

the basis
and undi¬

campaign upon

subscribe to the

in¬

letter contained an

The

forth.

set

"A."

trust

than in other States, it is
through the elimination of restrictions on trusts

forward

step

have

which

profits.

hibit

while in the ease of a
after the minor becomes

Although the life of the trust is shorter

of age.

vided

clearly

were

recipients

all

1-100

law permitting trusts for a

from the death of the donor,

ten years

trust

enactment of

the

therewith,

vitation

during the past year

important step has been taken

through

nected

Kentucky, with the

committee.

not reported out of

was

very

State,

period of

the trust companies of

assistance was furnished to

and

CONVENTION.

BANKERS'

202

campaign.

Legislature.
New
Bankers'

both,

Association or that
passed

were

$100,000

for

and

Bank

State

System, by the Federal Reserve

all

Also

Permission

2nd.

funds

trust

invest

Authorization

3rd.

Bills

New York;
1st.

the

loan

upon

ter

and

local

for

the

hands

The

forward

National

First

to
be

should

This

use.

passed

were

follows

and

active

der

matters of

employees

and

that

co-operation

all

corporate

sale

immediate future
companies is hereby invited, in or¬
launched

trust

which

mechanism,

modern

the

selected,

December.

early

the

for

Campaign

Publicity

directors

officers,

Restricting

it was decided

subscribing companies the printed mat¬
in the mail before the end of Novem¬

therefore,

will,

service

September

subscribers

paper.

fiduciary

issues of the magazines

January

and

prepare

mortgages.

participating

to purchase,

companies

trust

ber.

commercial

discount

will

which

shortly

held

Committee

the

campaign

Department.

Banking

the

approximate

very

will

sum

Committee,

the

meeting
the

start

banks, members of the Federal Reserve

the

and State

of trust companies

joint examination

final

the

that

set

correspondence,

careful survey of the field and recent

believed

follows:

Provision

1st.

judging from

American
the New Jersey Bankers' Association, or
of the

endorsement

having the

Bills

Several

Jersey:

the

to call

pleased

are

trust

loans.
2nd.

bill

3rd.

dividends

together

interest,

publish

Requirement

2. "Makea-Will"

deposits,
to whom such

five years unclaimed

every

with

names

persons

setting

forth

bearing

dividends or interest are credited.

deposits,
bills

Other

duced

the

for

these

Under

Kansas:

Texas:

the

Bill

use

introduced

of the word "trust" will be

Legislatures

State

that

used

committee

the

each

State.

wm;

the

been

has

HAMILTON.

meetings

Two

1919

the

tember
the

Convention

which

may

"Make

members

They

are

the

has

held

and

Motion

Advisory

National

Publicity

the

campaign

national

the Executive Coun¬

November and referred to the Committee on

Pub¬

careful investigation and agreeing
substance of the invitation to be sent to trust companies and

procedure

letter

publicity

Section

the

upon

Campaign.—A

the

last

was

munication,

sent
the

After

any

they

after

post¬

proper
pro¬

were

hearty

thereto.

written
the

co-operation
your

our

continued

hereby

throughout

work

support

throughout

the

work.

this

for

extended

been

have

interviews

drawn

plans

Committee

valuable

establishment
forwarding

the

personal

Many

well

and

departments

business

new

the

with

connection

much

office

Secretary's

the

members

respect

letters

the

President

Bankers'

selling fiduciary service was approved by

power.

decided to

members

all

past

coming

for

and

year,

year.

making a

followed

members

purpose

House,

Chairman.

for

with

and
in

bespeak

Service.

licity

films

com¬

The largest factor

use.

Work of the Executive Committee, by J. Arthur

—:

Pictures.

cil

given

Bulletins.

scope

Service.—Through

been

thanks

their
we

film

the

the committee was the lack of

decision of

exhibition

Committee

the

field, it was

for their

recommendation

fidu¬

sale of

the

for

and

Association.

recommendation

the

of this

investigation

any

the

plans

The

attention of the

careful

referred

was

reproduced

been

Bankers'

of the Executive Committee

attention
It

through

companies

instructions contained

have

pictures

motion

members

number

the

through

without

but

power,

publicity

maintained

been

follows:

with

into

November.

Washington

the

reported

bulletins

our

It is

for the com¬

which has been commended
United States.
Savings of

advertising

Section,

brought

last

bulletin
September 1.
one

coming year.

the

for

the

stimulus

use

members

been

have

that

of funds necessary

lack

their

Committee.

the

having engaged the

year.

has

letters

was

Advisory

in attend¬

Dify.

Will"

Publicity

exchange

the

Thrift Week

Campaign.

Publicity

help

Advertising Clubs

Trust

duced.

Indianapolis in June^ at

interest

Pictures.—The

distribution

held since

healthy

indefinitely

entering

December 30 and one on Sep¬

held

Associated

the

be mentioned

the

was

been

members of the Committee were

all

and

throughout

National

meeting

frequent

Chairman

items

Committee
1.

nearly

addition,

the

between
Five

the

informal

After

mittee.

Publicity.

have

Publicity

Section—one on

the

ance.

Committee

your

meeting of

14.

time

World,

providing a

1921

possible to publish

this work,

parts

the

and

Section

Publicity

Developing the Business of Trust Companies, by Francis
on

desire,

granted to the Section

to be

money

the

planned

are

all

the

service

pone

Sisson, Chairman of Committee

aside in the

mailed

was

scope

service

given
It

the

sums

Motion

ciary

holmes

CLAUDE

At the

it was decided to assist the

should

been

permit of

will

members

this

use

This

wider

work

considerable

will
of a

forwarding

the

the country.

parts

set

account

only

lias

year.

highly

PRINCE

george

the appropriation

that

Chairman

mclucas

past

year's

ing

work,

bulletins

Two

distributed

SMITH,

I).

NATHAN
w.

the

during

heppenheimer

this

therein.

Respectfully submitted,
THEODORE

at a loss of. $220.38,

necessary

in September,

upon

Bulltins.—On

Publicity

carry

has been similar
viz.: assigning of certain States to dif¬
and they in turn working through the

Section

the

Vice-President

is anticipated.

the work of the committee

preceding years,

members

ferent

next year arid a great

convene

matters

in State legislative

activity

decided

day

trust

time too greatly to explain

your

all

capacity

advisory

with

is on exhibition

of this matter

upon

simultaneously

and

stamps

placed

and

shelves which, when disposed of,

work

day

Campaign.

hoped

method of carrying on

The

important and much needed

Legislature an

protection of the

number

large

State

transactions.

is hoped, passed.

deal

the

passed author¬

than $500,000 to

capital stock of not less

volume

large

campaign

included

cards, poster

window

All

our

meeting of the committee held

Legislature a "blue sky law"

both domestic and foreign

session

the

for

and,

with

acceptances in

execute

one-dav

special session of the Legislature a law was

companies

the

detail

reported.

January 21, and met

of supplies were sold

would encroach

Association,

resources,

Committee

the country.

$2,229.65

loss.

observed

was

your

have goods upon

this

similar

izing trust

the

part

every

Christian

Men's

posters,

prepared

were

Day.

Printed

success.

meeting;

although
offset

special session of the State

the teaching of economic subjects

for

conservation

the

"Make-a-Will"

some

Young

January

and

thrift

upon
as

this

passed.

was

companies, throughout

reported.

Nothing

Indiana:

invest 20%

combined capital, surplus

Nothing reported.

Nothing

Virginia:

usefulness

its

I)ay.-~The

week

instructions

reported.

Nothing

Carolina:

South

with

in New York.

profits in real estate mortgages.

Island:

Rhode

intro¬

measures

required

would

companies

trust

Bills,

known

two

were

the housing situation

relieving

which

among

passage,

purpose

undivided

and

personal trust estates and 20% of their

their

failed

extend

oountry.

affairs of trust companies.

examining

greatly

shall

company,

directors

assistants by

employment of

the

permitting

the

conducting the

the

Section

campaign

last

and

campaign,
March.

all known

general

this

features

com¬

con¬

reporting

past year,

and

Members

the

Trust

your

Company

upon

the

each item of

ings will be covered

work

business noted

briefly

Executive
as

possible.

regular channels following the
The

bers

first

the

American

the

during

several

the

meet¬

More complete details, however,
or

supplied through the

meetings.

meeting of the Committee, after the expiration of the terms of

of the five members in

Committee

transacted at

will be furnished if desired, to any delegate present,

office

Section,

Association:

1922

class,

was

the 1919 class and the addition of five

held

immediately

following

mem¬

the twenty-fourth

TRUST
-•annual

meetiiig of the Section at St. Louis,

meeting
-addition

the

Committee

chairman

present

your

transaction

Publicity

Committee to continue

oped

discussed and

during the previous two

The

the

for

form,

the

Section

in order that

$22,000

warded, could be carried

the

Executive

Council

arranged in

was

budget

shown by the financial

meeting have been kept within the amount

Plan

meeting three plans

No.

licity campaign for the

Plan

No.

of stimulating a nation-wide

purpose

the

Covered

No.

Covered

ignated

These

Christian

motion picture

Day,

January 21, 1920, des¬

Association

"Thrift

its

Week"

referred

were

the

able

respecting Plan No.

Reports

the

success

Publicity

with

power,

respect¬

"Make-a-Will"

Day

and

companies,

well

Chairman of your
The

plan for
also

was

Most

picture

with

the

observance

Publicity campaign for

the National

upon

the motion

will be

proposal,

companies

mid-winter conference of trust

was

20,

About

1920.

representatives

150

and

ference

trust

requests for its continuance were received.

funds

the

companies

City,

able

the

in which ex-President

.manner

meeting and the delivery of

entertainment

McCarter

This

was

over

Company of New

furnished

Mr.

York,

Patrick

Sisson,

together with the

Francis

Murphy,

presi¬

special

The

subject of the

the

and

formation of

Committee

mittee
and

considered

was

and

referred

the Committee

vestigation and report to the Executive
-the

Committee,

the

Protective

Committee if,

Laws

for

in¬

"Forms,"

recommended to be undertaken

meeting of the Executive Committee, held in New

the Section,

performed by Messrs. McCarter, Sisson and Murphy

meeting,

Mr.

Henry

Chairman,

Campbell,

Committee

enable

court

obtain

adjudication of disputed claims for exemption

taxable trust

and administrators

trustees

estates.

This amendment

was

speedy and inexpensive
or

reduction in regard

prepared by Mr. C.

T. Du-

approved

at the Washington

reports

Hotel,

all sub-committees

for presentation to the Section at

Charges in respect to Registrar and Transfer
Committee

April 27, 1920.

of Forms

Committee

the

and

Charges, the incoming Chair¬

authorized

subject

appoint

Registrar

special

and

com¬

Transfer Work

was

also reached at this meeting to recommend to the Section

Committee

Standardization

be changed in such

name

has been

deemed

work

Forms

manner

impracticable

compile

and

Charges be

to eliminate the word

value

set

t)f legal

members

country.

held,

was

membership

of your

the

Executive Committee,

Committee,

Executive

Section

carried

were

conditions

and

together

with the
in respect

they prevail in the

been

the

year,

throughout

has shown

satisfactory

very

increase

sent

Chairman

your

pertaining

the

members of the

undertaken

work

and

and constant contact has been maintained with the Secretary's of¬

progress
fice

Section

the

in detail by the Secretary.

have

Communications

by correspondence and personal calls.

The

co-operation

members

officers,

the

members of the Section generally, in our work

acknowledged and

Executive

Committee and

throughout the

is hereby

year,

given that it has been, and is, heartily appre¬

assurance

ciated.

'.V/v'

■"V',' \;w,:

Report of the Nominating Committee.
The

Nominating
of the

names

Trust

appointed

Committee

following candidates

the

President

presented

the

members of the Executive Committee,

Company Section, class of 1923:

William

Gest|, president Fidelity Trust Co., Philadelphia, Pa.

Lucius Teter, president Chicago Trust Co., Chicago,

II.

111.

Maynard, president Brooklyn Trust Co., Brooklyn, N.

McLucus, president Commerce Trust Co., Kansas City, Mo.
Jackson, president Virginia Trust Co.,

Richmond, Va.

Upon motion of Isaac II. Orr, vice-president St. Louis Union Trust Co.,
St.

Louis, Mo.,

resolution

was

unanimously adopted extending the thanks

in Wash¬

appreciation of the Section for the many courtesies enjoyed

Bank and Trust Company officials.

to the Washington

ington,

legislation, presented a draft of proposed amendment to the Revenue Act,
to

the

active

The

and
this

result of the

submitted to the Committee by the Committee

consider

and will be reported

reso¬

were recog¬

Certain desir¬

different States.

nized.

held

was

time

Vice-Presidents, at which time discussions

the

unanimously adopted by the Committee in which the services to

was

which

originally contemplated that would

State

York

Hotel,

the delegates present at this con¬

Following the above-mentioned meeting

in the judgment of

Saturday, February 21, the day following the ninth annual banquet,
lution

Committee

your

was

further

Edwin P.

third

the

was

Washington

report its conclusions to the Executive Committee.

forms

Section.

form of work

this

and about which

Standardization

continued, its

in laws

regulations pertaining to this subject of importance to trust companies,

of receiving the report

purpose

Constitution of the Trust Company. Section and

18,

Executive

A decision

held

was

resolution in respect to this matter, presented through the

Inheritance Taxation,

of securing certain desirable changes and reforms

purpose

Committee

heard and

were

report

the

dent, The Mark Cross Company, New York City.

for

and

Tuesday and Wednesday, October 19 and 20.

Committee

the

presided

masterful address by Mr. Francis H.

Guaranty Trust

vice-president,
excellent

October

Section

held at the Waldorf-Astoria Hotel, New York

was

Forms

doubt fully advised.

meeting of

Acting under

not be printed and

Friday evening, February 20, was a pronounced success.

the

Work, this having been referred to the said

con¬

On account of the

proceedings of this conference could

The ninth annual banquet,

due

were

the

members.

distributed to

are

joint meeting

Standardization

October 17, for the

this Committee

the

approved,

secured from the first mid-winter conference

were

Committee

appropriate action in respect thereto.

different parts of the

present and many verbal expressions and letters commendatory of

lack

trust

by the

made

companies, held at the Waldorf-Astoria Hotel, New York City,

February

holding of the ninth annual trust companies' banquet.

gratifying results

of trust

connection

Committee on Publicity.

the

Registrar and Transfer

changes in the proposed constitution have been made

Monday,

upon any

that, should

achieved

the

Special Committee

work

ing Plans No. 1 and No. 3, but without the recommendation of the Executive
as

meeting

determining

man

Committee

serving members in respect to these activities,

Standardization of Forms and

accompanied by the recommendation of the Executive Committee

Committee

special

of the

sce¬

plans

use

in view.

"Make-a-Will"

the Young Men's

its sessions

co-operation with the Young Men's Christian Asso¬

ciation in the observance of

-campaign.

of trust

use

referred

Washington, D. C.,

preparation and

having the same purpose

Plan

question of the formation of

and

expressing disapproval

to ex-soldiers.

for the purpose of

The last

and development of a national pub¬

unanimously adopted and transmitted to

were

Charges for investigation and report.

follows:

service as corporate fiduciaries.

company

nario,

proposed,

were

the formation

Covered

The
work

respective Sec¬

meetings.

the proposed bonus

vention

appropriation.

this

year

expenditures

All

statement to be rendered at this
of

the

possible forms of effort desired to be for¬

on.

granted

throughout

many

atten¬

gave

ranking officer be authorized to represent the
meeting

preamble and resolution

discussed

May 19, 1919.

203

the Resolutions Committee of the Executive Council,

con¬

Legislation,

tion at such

sub-committee and the Secretary's

relating to the work of

appropriation

work

17, the Committee met in New York City and

details

office.

adopted,

was

the special Committee

year

devel¬

SECTION.

the

tee

the work of the Section's

Another resolution

years.

resolution adopted requesting

meeting held at White Sulphur. Springs,

November

tion

At this

secretary re-elected.

its service to members along the lines as

tinuing throughout the current
created at the

and

routine business,

was

September 30, 1919.

elected

was

COMPANY

meeting of the Executive Committee, held at the close of the second

session, Theodore
York City, was

Smith, vice-president

Union Trust Co., New

Central

elected Chairman of the Executive Committee and Leroy A.

Mershon re-elected

Secretary.

■

•

■

rant, attorney for the Hartford-Connecticut Trust Company, Hartford, Conn.,
with the

co-operation of the General Counsel of the Association and approved

by the delegates

in attendance at the

first mid-winter conference.

Resolutions
on

The

Executive Committee approved the amendment and requested the Committee

the

After

Legislation to co-operate with the General Counsel of the Association in
endeavor to secure its enactment into law.

explained in the report of the Committee

matter is
this

created,
tive

well

as a

Committee

Bankers'

Community Trusts

in this

Legislation.
was

Section

changes in the constitution of the

tion's

requested to

activities to the President of

The fourth

action taken

which

resolution

was

adopted

recommending

Resolutions Committee of the Association that the constitution be
as

to provide

that in the event of the inability of the President of

Section to attend a meeting or meetings of the Administrative Commit¬

following preamble and

the

United States

Whereas,

the

Charges.

Charges"

and continuing it for one

of Fees.

resolution

were

also

unanimously

adopted:

schedule of fees for the trust companies through¬

has been

under

Committee appointed

consideration

for

two years ago

several

presented

years,

and

tentative

report and during the past year, acting under a resolution adopted at St.
Louis

United

October,

States

Resolved,

at the time of meetings of the Administrative Committee

following

and

the Committee on Standardization

adopted changing the name of the committee

was

Standardization of

Whereas, the question of

the American Bankers' Association.

The subject of the absence of the Presi¬

in reference thereto.

discussed,

amended
anv

the Sec¬

meeting of the Committee was held at Pinehurst, N. C., April

dent of the Section

to the

and furnish the report of

The committee reports were received, discussed and appropriate

-27, 1920.

was

prepare

Schedule

The

out

Association.

twice each month was presented, together with certain cor¬

were

resolution

authorized and

respondence in relation thereto, and after a full discussion, the officers of
the

Forms

year.

subject of submitting a report to the President of the American Bank¬

Association

"Committee

special committee to consider and report to the Execu¬

Committee regarding any proposed

The
ers'

meeting

American

The progress secured

rendering of the report of

and Charges

Adopted—Change in Name of Committee

Standardization

Trust

and

That

Company

1919,

the

its final report,

schedule

Section

the trust companies of the

has further canvassed

presented

of fees

representing

therefore be it

presented,

the basis of

be adopted by the
fair and

charges for fiduciary service and that the trust companies
States

urged to use this schedule as far as may seem practicable, and,

further

Resolved, That the Executive
and

each

requested
of

reasonable

of the United

the

Committee be and it is hereby authorized

print and mail a

members

the

Section

compensation for fiduciary service.

copy

for

of the report and schedules to
their

guidance in

fixing proper

Louisiana:

period of
minor

distinct

which

been

have

Through

1808.

since

effect

countries.
Maryland: Through the enactment of a new law, trust companies of
the city of Baltimore are now taxed at the same rate levied on trust
companies and banks outside of the. city of Baltimore.
Under this new
law, trust companies will be taxed 1% on capital and surplus instead of
prevailing rate this year.

$3.33, which is the

offered,

but

none

detrimental nature passed the

the

endorsement of the American

harmful

affecting financial institutions

of Bills

large number

Massachusetts:

surplus and

combined capital,

undi¬

is attached to this report as Ex¬

co-operation
that

believed

country

the

lowed

date

starting.

fiduciary

would

service,

receive

companies of the
with members fol¬
and subsequent letters, which

large correspondence
letter

first

the

bearing

questions

Many

information.

upon

This has tended to delay
.With written and verbal subscriptions of $65,000
the Committee has decided to proceed with the

the

companies,

645

selling

very

additional

asked and answered.

campaign have been

from

that an

for

forwarding' of

contained

have

favorable attention to the trust

and

fiduciaries.

part

stages. Your committee
could be secured and used in such a way ag to

$100,000

widespread

the

upon

approximately $140,000.
entirely new plan, using nation¬
of

amount

companies in its initial

all

subscription

unanimous

secure

mediums

circulating

direct

that

would

the

interest to trust companies.

Mississippi: No Bills of

their

the letter

expected, however,

not

was

the
'

copy

companies

ally

law trust com¬

new

privilege of operating branches in foreign

panies are granted the

were

forward through the elimination of

step

cent,

per

in¬

campaign upon the basis

subscribe to the

estimated

was

trust

shorter than in other States, it is
restrictions on trusts

Although the life of the trust is

of age.

contained an

letter

The

forth.

set

"A."

exist for a period of ten years

may

profits.

hibit

donor, while in the case of a
after the minor becomes

from the death of the

ten years

trust

vided

clearly

were

recipients

all

1-100

of a law permitting trusts for a

enactment

the

vitation

during the past year

important step has been taken

very

through

Stale,

this

therewith,

nected

Kentucky, with the

of committee.

the bill was not reported out

result that

furnished to the trust companies of

assistance was

and
,

CONVENTION.

BANKERS'

202

campaign.

Legislature.
New

Bankers'

having

Bills

Several

Jersey:

passed

both, were

follows:

Provision

1st.

Bankers' Association, or

of the New Jersey

Association or that

for

System, by the Federal Reserve

hanks, members of the Federal Reserve
Bank

and

invest

3rd. Authorization

in participating mortgages.

funds

trust

start

all

companies

trust

loan upon and

purchase,

loans.

hill

which

directors

employment of assistants by

the

permitting

companies.

examining affairs of trust
3rd.

failed

bills

the

intro¬

situation in New York.
required to invest 20%

their combined capital, surplus

estate mortgages.

profits in real

South

Carolina:

Indiana:

Legislature a "blue sky law"

special session of the State

Texas:

Bill

and foreign transactions.
important and much needed

Legislature an

"trust" will be introduced

protection of the use of the word

the

for

of the

session

and, it is hoped, passed.
A

number

large

deal

The method

used

that

carrying

is anticipated.

been similar
viz.: assigning of certain States to dif¬

committee

the

they in turn working through

arid

each

Section

of the

State.

'•

;

•

Respectfully submitted,
THEODORE

HOLMES

CLAUDE

HAMILTON.

been

has

therein.

the

Sisson, Chairman of Committee on
meetings

1919

tember

meeting

World,

by Francis
Publicity.

nearly

addition,

items

Committee

may

be mentioned

throughout

National

"Make

Publicity

the

Will"

They

are

held

and

their

National

Publicity

Campaign.—A

for

selling fiduciary service was

cil

the

Section

the

procedure
was

munication,

sent

the

making a

followed
of

national

the Committee on Pub¬

careful investigation and agreeing

invitation to be sent to trust companies and

members

purpose

campaign

publicity

approved by the Executive Coun¬

November and referred to

After

the substance of the

letter

film

the

The largest factor

use.

they

after

films

given

hearty

thereto.

proper

were

pro¬

written

the

co-operation
your

well

Committee

continued

our

hereby

support

throughout

this

for

extended

throughout

work

forwarding of
have been

interviews

drawn

as'plans
is

valuable I

the establishment

in the

and

personal

Many

much

office

connection with

departments

business

new

respect

letters

thanks

members

Secretary's

the

Service*—Through

and

the

President

Hankers'

scope

upon

com¬

post¬

the

all

work.
members for

past year,

and

coming year.

Arthur House,

Chairman.
To

last

the

Work of the Executive Committee, by J.

Service.

power.

the

conducting - the

the

Section

campaign

campaign,

last March.

and

all known

general

In this

com¬

features con¬

•

it was decided to

decision of the committee was the lack of any

exhibition

bespeak

Pictures.

Motion

Advisory

with

for their

recommendation

any

Committee

the

recommendation

the

fidu¬

sale of

the

for

and

Association.

the Executive.. Committee

referred

was

reproduced

Bankers'

investigation of this field,

Bulletins.

without

but

power,

been

plans

The

Day.

licity

the attention of

November.

careful

publicity

maintained 1

follows:

has

their

Committee.

the

with

Advisory

in attend¬

engaged the attention of the

having

year.

letters has been

last

instructions contained

motion pictures

use

through

number of companies

Campaign.

Publicity

members

the

brought

Savings of

members

duced.
5.

of the Committee were

exchange

the

and

Section

indefinitely

help

the Associated Advertising Clubs of

was

Washington

Section,

Trust

Pictures.—The

distribution

Indianapolis in Jurie^ at

the

After

for the com¬

States.

have been

bulletins

our

the

through

stimulus
that

interest

reported

advertising of

the

and

It is

the coming year.

the United

of
been

have

money

healthy

entering into the

December 30 and one on Sep¬

held

was

members

all

frequent

Chairman

the

between
Five

Convention

which

meeting

held since

service

mittee.

Publicity have been

the Section—one on

informal

{the

ance.

Committee

your

14.

time

the

given
It

for

this work, which has been commended
parts

all

service

this

Motion

the

sums

use

planned

are

scope

permit of

will

members

possible to publish one bulletin
to members on September 1.

been

appropriation to he granted to the Section

the

considerable
the

wider

■

This was mailed

year.

work

highly

pone

Two

that

Publicity

Developing the Business of Trust Companies,

past

■

lack of funds necessary to

the

account

has only

work,

this

the

year's

ing

GEORGE

At the

the country.

in the 1921 Thrift Week

aside

set

upon

Built ins.—On

bulletins

Two

Mt LUCAS

forwarding of a

the

parts

■

during

ciary

PRINCE

all

September, it was decided to assist the
capacity should it so desire, providing a

advisory

decided

distributed

NATHAN

day

Publicity

carry

IIEPPENIIEIMER

WM.

Chairman

SMITH,

time too greatly to explain

necessary

Campaign.

the work of the committee has

preceding years,

Vice-President

State

next year and a great

Legislatures convene

State legislative matters

members of

ferent

hoped

.State

activity in

work

meeting of the committee held in

capital stock of not less than $500,000 to

acceptances in both domestic

the

law was passed author¬

special session of the Legislature a

companies with a

shelves which, when disposed of, will

simultaneously

campaign

included a day

January 21, and met

AH of this matter is on exhibition

our

upon

volume

large

resources,

supplies were sold at a loss of $220.38.

It would encroach upon your

the

detail

goods

have

Committee and

your

the country.

$2,229.65

meeting;

similar

izing trust
execute

this

Association,

window cards, poster stamps and
placed with trust

posters,

prepared

were

It was observed

Day.

Printed

sueeejss.

•

companies, throughout
at

the

the teaching of economic subjects

for

conservation

the

and

"Make-a-Will"

some

one-day

reported.

passed.

was

trust

part

every

Christian

Men's

Young

January

thrift

upon
as

instructions

reported.

Nothing
Nothing

I)ay.~The

week

offset tins loss.

Nothing reported.

Kansas:

bearing

with

Wiilp

forth

although

Nothing reported.

Island:

Virginia:

would

companies

personal trust estates and 20% of

Rhode

*•

the housing

"Make

setting

known

which were two measures

among

passage,

of relieving

trust

Bills,

undivided

and

purpose

these

their

of persons to whom such

names

dividends or interest are credited.

deposits,

for

with

interest, together

publish every five years unclaimed deposits,

Requirement

dividends

Under

to call

pleased

are

usefulness

its

extend

greatly

shall

company,

country.

duced

launched

■

2nd.

Other

sale of corporate

for the

Campaign

mechanism,

modern

companies the printed mat¬

in the immediate future
all trust companies is hereby invited, in ot-

co-operation

the

that

der

December.

early

decided
selected,

the mail before the end of Novem¬

therefore,

will,

service

active

and

matters

employees

and

directors

officers,

Restricting

Publicity

National

subscribers

to subscribing

This should

use.

First

fiduciary

follows:

York: Bills were passed as
1st.

field and recent correspondence,
very
shortly approximate , the

hands

the

commercial paper,

discount
New

local

The

ber.

and forward

prepare

for

ter

will

sum

Committee.

the

will

which

Also

final

the

meeting of the Committee held in September it was
the campaign in the January
issues of the magazines

Department.

Banking

State

Permission

2nd.

set

the

careful survey of the

that

believed

$100,000

State

examination of trust companies and

joint

Judging from
it

and

Members

Trust

the

your

reporting

upon

past year, each

the

work

item of business noted

Executive
as

ings will be covered as briefly as possible.
will be furnished if desired,

regular channels
The

first

the

Section\

American

Committee during

the

transacted at the several meet¬
More complete details, however,

to any delegate present, or

supplied through the

following the meetings.

meeting of the Committee, after the expiration of the terms of

office of the five members in the 1919
bers

Company

Association:

1922

class,

was

held

class and the addition of five mem¬

immediately

following the twenty-fourth

TRUST
;aimual

meeting of the Section at St. Louis,

meeting

your

addition

the

Committee
the

chairman

present

transaction

Publicity

routine

At this

re-elected.

secretary

the work of the

tinuing

throughout the current

created

at the

On
tion

details
The

the

for

the

Section

could

the

Council
budget

shown by the financial

meeting have been kept within the amount

at this

No.

Plan

plans

Covered

service

Plan

No.

nario,

Plan

No.

ciation

ignated

the

same

of trust

use

the Young

"Make-a-Will" Day, on January

Christian

Men's

referred

were

21, 1920, des¬

in its "Thrift Week"

Association

Committee

the

with

Publicity

power,

accompanied by the recommendation of the Executive Committee as respect¬

of the

the

Reports

"Make-a-Will"

Day

companies,

well

Chairman of your
The

plan for
also

was

Most

February

20,

•City,
due

ninth

About

representatives

trust

companies

were

On account of the

This

was

McCarter presided over

Guaranty

ex-President

masterful address by Mr. Francis H. Sisson,

Company of

Trust

furnished

entertainment

New

York,

Patrick

Mr.

together with

Francis

the

Murphy, presi¬

The

subject of the formation of

the

and

referred

the

Committee

to trust companies,

Protective

Laws

in¬

for

vestigation and report to the Executive
-the

recommended to be undertaken

was

and

Saturday. February 21,
lution

the Section,

nized.

"Forms,"
forms

and

meeting.

Mr.

enable trustees

Chairman,

Committee

administrators

and

obtain

speedy and

inexpensive

adjudication of disputed claims for exemption or reduction in regard

court

taxable trust

Campbell,

estates.

This amendment

was

has been

parts of the

authorized

subject of

April 27, 1920.

presented through the

appoint

Registrar

at this

special

Transfer

and

com¬

Work

meeting to recommend to the Section

Standardization of

impracticable

deemed

Charges be

and

compile

value

held,

work

set

of legal

members in

country.

above-mentioned meeting

was

Forms

be of

the

Section

the

they

together with the

carried

were

conditions

and

Committee,

Executive

Executive Committee,

of your

in respect

prevail in the

membership of the Section has shown

satisfactory

very

increase

reported in detail by the Secretary.
have

been

the

year,

throughout

sent

Chairman

your

pertaining

members of the

undertaken

the work

and

and constant contact has been maintained with the Secretary's of¬

progress

by correspondence and personal calls.

The

co-operation of

acknowledged and
ciated,

the Executive Committee and

generally, in our work throughout the year, is hereby
given that it has been, and is, heartily appre¬

assurance

y'-:'

members of

officers,

members of the Section

The

Nominating Committee.

Trust

prepared by Mr. C. T. Du-

Committee appointed

Nominating

the following candidates as

names

the

Fidelity Trust Co., Philadelphia, Pa.

I\ Gest, president

Lucius Teter, president Chicago Trust
P.

Maynard, president

Co., Chicago, 111.

Brooklyn Trust Co., Brooklyn, N.

McLucus, president Commerce Trust Co., Kansas City, Mo.

II.

Jackson, president Virginia Trust Co., Richmond,

Mo.,

Louis,

resolution

Va.

Orr, vice-president St. Louis Union Trust Co.,

Upon motion of Isaac H.
St.

President presented

the

members of the Executive Committee,

Company Section, class of 1923:

William

was

unanimously adopted extending the thanks

appreciation of the Section for the many courtesies enjoyed in Wash¬

and

Henry

Communications

Washington Bank and Trust Company officials.

to the

ington,

draft of proposed amendment to the Revenue Act,

be changed in such a manner as to eliminate the word

name

will be

fice

the

also reached

different States.

held in New York on

this

consider

Committee

active

The

at'

Forms and Charges, the incoming Chair¬

Vice-Presidents, at which time discussions

the

Committee

originally contemplated that would

State

performed by Messrs. McCarter, Sisson and Murphy were recog-

Legislation, presented

result of the

held at the Washington Hotel,

was

respect to this matter,

was

Following the

the^ay following the ninth annual banquet, a reso¬

■

Certain desir¬

Charges in respect to Registrar and Transfer

the

should

continued, its

unanimously adopted by the Committee in which the services to

was

report

its conclusions to the Executive Committee.

decision

Edwin

the third meeting of the Executive Committee,

Hotel,

approved for presentation to the Section

Standardization

Executive

further

report

the Section,
At

Washington

submitted to the Committee by the Committee

was

resolution in

the

mittee

Committee if, in the judgment of

Committee, this form of work

of receiving the

purpose

Inheritance Taxation,

and

Committee

your

Report of the

Committee

subject of importance

regulations pertaining to this
considered

was

Forms

Constitution of the Trust Company Section and

heard and

were

special report

Committee

securing certain desirable changes and reforms in laws

purpose

held

was

17, for the

Work, this having been referred to the said Committee

the

Tuesday and Wednesday, October 19 and 20.

Acting under

not be printed and

banquet, held at the Waldorf-Astoria Hotel, New York

in which

Committee

doubt fully advised.

Section

manner

the

October

meeting of

joint meeting

Standardization

this Committee and about which the delegates present at this con¬

The Mark Cross Company, New York City.

dent,

was

proceedings of this conference could

annual

Committee

appropriate action in respect thereto.

upon any

are

the

approved,

members.

vice-president,

and

was

secured from the first mid-winter conference

150

the

Monday, October 18, at which time the reports of all sub-committees

verbal expressions and letters commendatory of the con¬

the

the able

excellent

trust

Registrar and Transfer

changes in the proposed constitution have been made

different

companies

conference of trust

Friday evening, February 20, was a pronounced success.

for

made by the

Publicity.

were

meeting and the delivery of

for

will be

requests for its continuance were received.

funds

Publicity campaign
proposal,

picture

observance of

the

held at the Waldorf-Astoria Hotel, New York City,

1920,

distributed to
The

with

connection

holding of the ninth annual trust companies' banquet.

many

and

ference

motion

mid-winter

companies,

(present and

National

the

upon

the

gratifying results

of trust

lack

and
as

Committee

the

achieved

success

Special Committee

work of

Committee

serving members in respect to these activities,

meeting

determining
able

Council, expressing disapproval

investigation and report.

special

that,

respecting Plan No. 2.

referred

Washington, I). C.,

ing Plans No. 1 and No. 3, but without the recommendation of the Executive
Committee

and

Charges for

man

plans

question of the formation of

Standardization of Forms and

co-operation with the Young Men's Christian Asso¬

observance of

unanimously adopted and transmitted to

were

to ex-soldiers.

work for the purpose of

of a motion picture sce¬

use

in view.

campaign.
These

The

respective Sec¬

rlneetings.

proposed bonus

its sessions

preparation and

purpose

Covered

national pub¬

ranking officer be authorized to represent the

meeting

preamble and resolution

The last

development of

and

203

Resolutions Committee of the Executive
the

follows:

of stimulating a nation wide

purpose

Covered

in the

corporate fiduciaries.

having the

proposed,

were

formation

the

licity campaign for the
company

vention

appropriation.

this meeting three

expenditures

All

at such

the

Secretary's

Executive

the

discussed

possible forms of effort desired to be for¬

on.

statement to be rendered

the

throughout the year was arranged in

many

be carried

granted bv

$22,000

SECTION.

tion

con¬

Legislation,

relating to the work of sub-committee and the

in order that

form,

17, the Committee met in New York City and gave atten¬

appropriation

work

warded,

adopted,

was

meeting held at White Sulphur. Springs, on May 19, 1919.

November

office.

Another resolution

the special Committee

year

tee

Section's

resolution adopted requesting

Committee to continue its service to members along the lines as devel¬

oped during the previous two years.

and

business,

discussed and

was

September 30, 1919.

elected

was

COMPANY

meeting of the Executive Committee, held at the close of the second

session,, Theodore

Union Trust Co., New-

vice-president Central

Smith,

City, was elected Chairman of the Executive

York

Committee and Leroy A.

Mershon re-elected Secretary.

rant, attorney for the Hartford-Connecticut Trust Company, Hartford, Conn.,
with the

co-operation of the General Counsel of the Association and approved
delegates

by the

in attendance at the

Executive Committee approved the

first mid-winter conference.

amendment and requested the Committee

Legislation to co-operate with the General Counsel of the Association in

endeavor

this meeting

well

The

Bankers'

Legislation.

proposed changes in the constitution of the

The

fourth

furnish the report of the Sec¬

and

Charges.

Standardization

Charges"

and continuing it

of the

was

discussed,

to the

amended
any

following

which

resolution

was

adopted

recommending

Resolutions Committee of the Association that the constitution be
as

provide that in the event of the inability of the President of

Section to attend a meeting or meetings of the Administrative Commit¬

for one

United

the

Whereas,

States

under consideration

United

October,

States

Trust

and

That

Company

has further canvassed

1919,

its final report,

presented

the

tentative

the trust companies of the
therefore be it

presented,

be adopted by the

representing the basis of

fair and reasonable

schedule

Section

several years, and

presented

acting under a resolution adopted at St.

report and during the past year,
Louis

for

Committee appointed two years ago

the

adopted:

schedule of fees for the trust companies through¬

been

has

of Fees.

resolution were also unanimously

fees

charges for fiduciary service and that the trust companies of the United
States be

urged to

use

this schedule as far as may seem
.

Section at the time of meetings of the Administrative Committee

dent

Standardizatioa

adopted changing the name of the committee

was

following preamble and

Resolved,

The subject of the absence of the Presi¬

in reference thereto.

resolution

Whereas, the question of

President of the American Bankers' Association.

meeting of the Committee was held at Pinehurst, N. C., April

The committee reports were received, discussed and appropriate

taken

Forms

of the Committee on

Schedule
The

out

requested to prepare and

activities to the

1920.

action

were

Charges

"Committee

report to the President of the American Bank¬

in relation thereto, and after a full discussion, the officers of

Section

and

rendering of the report

Community Trusts was authorized and

Association.
a

the

After

Adopted—Change in Name of Committee

Standardization

year.

Association twice each month was presented, together with certain cor¬

tion's

27,

Committee

The progress secured in this

Committee

special committee to consider and report to the Execu¬

subject of submitting

respondence
the

Committee regarding any

American

ers'

its enactment into law.

secure

is explained in the report of the

created,
tive

The

matter

Resolutions

further

Resolved, That the
and

each

requested
of

the

practicable, and,

Executive Committee be and it is hereby

print and mail a

members

the

Section

compensation for fiduciary service.

authorized

copy

of the report and schedules to

for

their guidance in fixing proper

CONVENTION.

BANKERS'
Charges

for

Service,

Trust

George

Chairman

of
of

Forms

and

Committee

convention

the

since

under

Standardization

the

would be a proper charge in one loimpracticable in another.
The other
or custom
of charging on income
received in estates rather than basing the charge annually upon corpus.
jn
rnany
localities the former method has been in vogue for such a
differs so widely

eality

Charges

has

St.

Louis

the

Committee

continued

September,

its

work

acting

1919,

Charges
the

each

give

advisable

Trust

permit,
mitted

last

with

ence

country,

tivity

large

the

result

jas^

recom-

additional

and

all

the

others,
further

Committee

centres

far

Trust

the

a,jopte(]

placed

trust

the

members

supply

itself

the

chiefly

lowing

comments

general

"Consider

the

companies.

trust

geographical

schedule,

which

Most

centres,

the

valuable

fob

book,

satisfying,

schedule

recommendations

nurnber

for

rou

"We
of

trust

the

companies,

the

been

Committee

and

needed,

hearti-

deserve

take

believe,

this

and

"It

which

sympathy
all

these

with

this

institutions

important

opportunity

has

been

and

move

with

matter

have

appears

comes

trust

believe

received

careful

admirably worked

out."

opportunely to-day because. I/am- having to settle
the commissions 011 a very important trust, oh a
satisfactory basis."
"It is a
great advantage to us to have the schedule of charges

Trust

and

shall

this

needs

"We

the

for

suggest' and

pleased

there

attention

for

hear
of

further

the

judgment

our

appre-

which

work

the

members."

its

part

110

greatlv

constructve

very

performing

the

from

than

work

business

trust

which

proper

stand-

service

that

Committee

the

this

uniformity

Committee

thanks

the

011

the

approve

all

splendid

trust

edition

charges,

and

rendering."
officers

given

suggesting

possible

Ooramittee
efforts

large
ule

has

schedule

the

The

adoption
suited

that

schedules

each

charges."

needs

particular

charges

the

also

schedule

attention;

been
and

been

received

and

chiefly

developed,

exhaustive

and

fees

requirements

acting

registrar

all

and

the

agent

have^ been variously commented
localities
reveals

throughout
that

many

-J '•*

upon by trust companies in different
country.
A careful study of such comments
localities have
developed rates
of
charges which

the

Ml>Ji U

§»«««*; Is J
.(Him || •!
sen I! II il|

has

believes

practice

banks

for

used

now

considered
and

price-cutting

organizing

now

feeders

basis of

national

thought
not

among

schedules

charges

schedule

than

the

fact

services

been

footnote

that

The

Committee,

representing

used

the

four

were

basis

great

with

working basis

items,

would

with

the

far

miscellaneous
certain

the

Horace F,

companies
this

may

schedule

located
schedule

seem

Poor, President

Arthur W. Snow, 2d Vice-Pres
and Cashier

Ralph T. Thorn, Asst. Cashier
Cashier

George W. MacDonald, Asst. Cashier

GARFIELD
National Bank
customers

the

basis

FIFTH

Character, Capability and Capital.
And of these Character is
the most essential factor—both in the customer
and in the Bank.

where

AVENUE

23rd Street

CROSSES

BROADWAY

CENTRAL TRUST COMPANY rSCapital, Surplus & Undivided Profits_$455,000
Trust

Funds separate from the
WE

HAVE

UNEXCELLED

other

Resources..$4,000,000
assets

FACILITIES

of the

FOR

company!.

HANDLING

COLLEC-

$1,350,000
i

TIONS, AND WILL REMIT DAILY OR WEEKLY AT LOWEST RATES
H. H. GRACE, M.D.

President

JOHN B. CLEMENT, 2nd V.-P., Sec.

through may

practicable.

Poor, Vice-President

Wilbur C. Husk, Asst

fidu-

Company Section
charges for fiduciary

that

same

items

Trust

reasonable

the

forms

schedule,

that A the

recommend

and

has

attorney

trust,

former

with

calling atten-

include

case

the

considered

OFFICERS—

its

most

Accept-

simplification

suggestion
as

number of trust

with

com-

under
viz.:

schedule,

thereto

adopted

fair

further

each

schedule

the

included

not

therefore,

necessarily

end

connection

received

States

United

the

additions made

presented herewith

service applicable

charges mentioned

necessary

suggestions

amplified and

form

out

the

not

undertaken.

case

Ruel W.

deals

and

trust

for

that the chief charges
more

but

companies
each

*£ 13

Bank

fair

not

<3 ft

good

other de-

are

J»JU51ULKJ1

trust

clients.

its

such

that

with the

included

eiary activity which

corporate

transfer

injurious

guide

departments

fiduciary

trust

provided

Through

the
as

the

for

our

trust

carefully

the

clientele

the

sched-

community.
for

the

officers

Fee and Closing Fee, although in
all these subdivisions would apply.
The
for minor services rendered at irregular intervals throughout the life of the trust arid are recommended for guid¬

tion

several

are

the

community, leading in
schedule of charges based

the

inexperienced

profit.

Fee> Annual Fee, Certification

ance

through
especially in
the

basis

other charges suggested

been

study of

with

companies

reasonable

eliminate

been

various schedules

the

Further,

trust

Committee

which

separate

complete

the

has

careful

has

careful

there

population,

viewpoint

and

fiduciaries

most

Committee,

the

criticism

simplifications

given

the

centres

from

cases

constructive,

The Committee, therefore, presents again to the Trust Company Section in convention assembled, the schedule submitted one year ago
with practically no change other than that the form has-been somewhat modified by rearrangement, looking toward simplification in the

ance

Considerable

working basis for charges
is urgent and the adoption
results as outlined in the

the public.

some

should

an-

localities.

enable

have

schedules

fees."

the

think

much

very

heartily

appreciate
"I

careful
of

institutions

tlui±_ it_ is

Section

Committee,

ardization

feel

Company

"We

very

established

date' them

charges,

charges can serve only as a working basis for the charges in different localities.
Conditions differ so widely between city and country
an<3 between cities located in different sections of the country that an
absolutely uniform charge throughout the United States would seem
to be not only impractical but impossible.
The Committee has further reached the conclusion by collated cornparison of suggestions received as to charges that the fees recommended
in the schedule presented last year are as fair as can be made representative for most of the trust companies throughout the country and
the majority of the localities in which such institutions are serving

departments."

evidently

most

will

companies'

pany

thank

trust

company,

large

Section

for

real

value
very

thought

has

copy."

are

great
"This

kind

presented

received

year:

smaii

introduce

companies to become reasonably profitable,
wjll develop in the public a realization that corporate fiduciary

The

this

years

0. It will enable clients of trust companies
proceed with some
degree of assurance as to the cost for service rendered them by a trust

believe,

tend

schedule

the country
immediate beneficial

basis

serve

will

services

who have wanted such information."

many

reached the following conclusion:

Company

last

many

partments

commendation."

est

expressed

replies

custom

replies

and

suggestions

the

throughout

have

will

reasonable

very

the part of

charges
scattered

the

overcome

departments,

representative:

same

think

nation]

ena];ie

will

from

approval
are

long desire
"We

and

current

report

prices
2.

ac-

State.

matter

received,

to the trust companies unwise even .if

seems

has

Trust

would
wil]

correspond-

business

and

the

Committee's

sub-

companies throughout the

population

upon

cpmpanies

gaPh

would

Charges

1)eecj

trust

for

Company

method

endeavor

correspondence

seem

may

hased

an(j
to

swer

distribution of pamphlets and correspondence by
Secretary of the Section, there has been developed a

of
and

interest

replies

make

may

the

great

members

practicable

were

and

the

to make a radical change through endeavoring to
an annuaj charge upon the corpus in lieu of that upon income,
y0U]p
0ommittee from its consideration of
the schedule as

the

that

^riving

members

trial,

the

convention.
distributed to

schedule

leading

every

that

copy

that the

and

modifications

and

number of officials of

covering

Committee

the

Your

year.

the

Section,

annual

and

Section

Section mail

study

and

year,

Committee

published

Company

throughout

the

had

the

changes

the

pamphlet

such

that

report

Committee

the

end

the

another

Standardization

the

careful

schedules

for

Committee

supplementary
The

the

Secretary

members

the

continued

the

that

requested

Ooromittee
mend

report

accepted,

schedules

the

That

impossible

difference

jorig peri0(j 0f time that

resolution:

following

Resolved,

to make what

absolutely

point

be irreconcilable, due to the fact that the volume of business

««•> '«

Charges.

meeting

Standardization

The

Edwards,

Committee

Tres.

of the

one

Philadelphia

one
is

leading financial centers in the East,and

of the best

equipped Banks in that city

•••••»•

The Girard National Bank
WITH resources OF

Joseph Wayne, Jr., Pres.
Evan Randolph, Vice-Pres
/

A. W. Pickford,
I

Charles M. Ashton, Cashier

Alfred Barratt, Asst. Cashier

AAA

JLUUfVUVfUi/U
/
+

Vice-Pres.
■

AAA

David J. Myers, Asst. Cashier

.■

Have You

Philadelphia Account?

Need One to Handle Your Business Properly

You

GRACE &

CO.

MERCHANTS
NEW

YORK

Y/V'T-'"-

San Francisco
Los

Seattle

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Houses and

Chic;

Agencies in all principal cities of South America, Central America,
4

Europe,

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and

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W. R. GRACE & CO's
NEW

Letters of Credit

BANK

YORK

Cable Transfers

Bills of

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Exceptional facilities for collecting in Central and South America

STEAMSHIP
GRACE
Direct

CHILE

AGENTS
LINE

Sailings between New York and

PERU

BOLIVIA

ECUADOR

THE CORN EXCHANGE BANK

WILLIAM AND
v

BEAVER

STREETS, NEW YORK

Organized

1853

Inaugurated Branch Banking 1899

FORTY-THREE BRANCHES

The Branch

Banking system pledges

$15,312,103.12
the

and

other

GREATER

our

Resources

protection and assistance of

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NEW YORK

Capital and Surplus of
of

$194,787,051.44

depositor in

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Incorporated

DESIGN steam power

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industrial plants, warehouses

either

CONSTRUCT

REPORT

public

utility

and buildings.

designs

engineers

industrial

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from

architects.

companies.

projects.

industrial and public utility properties and
conduct

investment

banking

BOSTON

NEW YORK

own

inter-

going concerns, proposed extensions and

new

FINANCE

their

other

designs

MANAGE

from

and

•

206

business.

CHICAGO
\/

THE

J. G. WHITE ENGINEERING
CORPORATION

ENGINEERS

OVER

FOR

THIRTY
1

CONSTRUCTORS

YEARS,

DESIGNERS

AND

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Industrial

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description

Hydro-electric Developments
Steam and Electric Railroads
1

Steam Power

v
Gas Plants

Plants

Transmission Systems

IN ALL PARTS OF THE WORLD

ENGINEERING

REPORTS

AND

EXCHANGE PLACE

VALUATIONS

•

MADE

NEW YORK

SANDERSON £ PORTER
ENGINEERS

NEW YORK

CHICAGO

SAN

207

FRANCISCO

HUTH
30

PINE

CO.
NEW

STREET

YORK

Foreign Bonds and Investment Securities
Commercial

Credits,

Foreign

Deposit

Accounts

Exchange

Correspondents of

FRED^

HUTH

CO.,

London

■

WINSLOW, LANIER & CO.
59 Cedar Street,

New York

BANKERS

Deposits Received Subject to Draft

Act

Interest Allowed

Also

Securities

Deposits

Bought and Sold

FOREIGN

Commission

Fiscal and Transfer Agents

Agents for Corporations for the

payment of interest and dividends

EXCHANGE, LETTERS OF CREDIT

208

S8Hfi®

nmmrn

k.-' ^ «•

CAt,

llfet%!

S^ST$0fc

lil

."" "uX<i

>$®9*

TWO

SECTIONS

SECTION

ONE

B&nk & Quotation Section

Railway & Industrial Section

Electric

Sail-way Earnings Section

Bankers* Convention Section

State and

COPYRIQHTED IN 19

2QAY WILLIAM B, DANA COMPANY, NEW YORK.

Issued

Weekly
$10.00 Per Year

VOL 111.

ENTERED AS SECOND-CLASS MATTER JUNE 23, 1879, ATTHB POST OFFICE AT NEW
YORK, NEW YORK, UNDER THE ACT

NEW YORK,

^financial

CHARTERED

Railway Sects®®

NOVEMBER 27, 1920.

City Sectioaa
OF MARCH

^3^?^

NO. 2892.

Jfmancmi

HARVEY FISK & SONS

1822

Jf manual

The libertyKalioiial Bank

THE FARMERS'LOAN & TRUST

ofifcwYork

32 Nassau St.

COMPANY

NEW YORK

capital

NEW YORK CITY BONDS
AND

OTHER CHOICE

Correspondents in all countries
Special facilities in Scandinavia

INVESTMENT SECURITIES

ESTATES

PROFITS. $2*500,000.88

UNITED STATES BONDS

YORK

MANAGEMENT

$5,000,000.00

UNDIVIDED

475 Fifth Avenue, at 41st Street

■

$5,000,000.00

surplus

16, 18, 20 and 22 William Street
NEW

3, 1879.

CARE OF SECURITIES

Harris Forbes & Co.

DOMESTIC AND FOREIGN BANKING

The New York Trust
EXCHANGE

FOREIGN

LETTERS

COMMERCIAL

CHICAGO
fiscal agents for munici¬
palities and corporations and
deal in Government, munici¬
pal, railroad and public utility

5th Avenue and 57th Street
PARIS

BONDS

York

New

Profits,

Clearing House

INVESTMENT

FOR

list

Capital, Surplus and Undivided

Member Federal Reserve System

and

Inc.

HARRIS TRUST & SAVINGS BANK

Act

LONDON

London, E. C.

FORBES & CO.,
BOSTON

26 Broad Street

ACCEPTANCES

10 Drapers Gardens,

HARRIS,

Company

CREDIT

LETTERS OF

Pine Street, Corner William
NEW YORK

Application

Cable Address SABA,

$14,000,000

NEW YORK

Established

1892

Established 1874.

John L. Williams & Sons
BANKERS

Edward B. Smith & Co

Corner 8!b and Main Streets
Members New York and Philadelphia

RICHMOND, VA.
Established. 1810

Stock

Baltimore Correspondents:
R. LANCASTER WILLIAMS & CO., Inc.

Exchanges

The

Mechanics

GARFIELD
National Bank
23rd

street,

Capital,

NEW YOHhs

Philadelphia

OF THE CITY OF NEW YORK

where

The Chase National Bank

Broadway

Surplus,

$1,080,000

Bank for

Metals

avenue

fifth
Crosses

And

National Bank

the Builders

of the

$1,000,000

Capital, Surplus, Profits

of Business

Deposits, Sept 8, 1920
ESTABLISHED

•

City of New York

$25,000,000

$196,000,000

BROADWAY

CAPITAL

$15,000,008

SURPLUS AND PROFITS

1784

24,189,008

DEPOSITS (Sept. 8, 1920)

Foreign Exchange

The Bank of New York

Bond

Trust

Service

OFFICERS

Department

BARTON

Chairman of the

National

328,680,000

Banking Association

ALBERT

HEPBURN,

Advisory Board

WIGGIN,

Chairman of the Board of Directors

CAPITAL &

EUGENE V. R. THAYER, President

SURPLUS, $9,000,000

Vice-Presidents

Assistant Vice-Presidents

Samuel H. Miller

Our

136

years'

service

experience
our

American Express Company

William E. Purdy

Gerhard M. Darn

the

depositors

Edwin A. Lee

Edward R. Tinker
Carl J. Schmidlapp

M. Hadden Howell

Reeve Schley
Alfred C. Andrews

Robert i. Barr

George H. Baylor

Cashier
William P. Holly

SECURITIES DEPARTMENT
DIRECTORS

FIRST NATIONAL BANK

Henry W. Cannon
A. Barton Hepburn
Albert H. Wiggin
John J. Mitchellj
Guy E. Tripp

PHILADELPHIA, PA.
GOVERNMENT
CHARTER

Wm.

LAW,

NO.

SECURITIES

James N.

President
65

BROADWAY'

NEW

YORK

Hill

Daniel C. Jackling
Charles M. Schwab
Samuel H. Miller
Edward R. Tinker
Edward T. Nichols

Newcomb Carlton

Frederick H. Ecker
Eugene V. R. Thayer
Can J.

Schmidlapp

Gerhard M. Dabl
Andrew Fletcher
William B. Thompson
Reeve Schley

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Wood

H. Wendell Endicott
William M. Wood

[Vol. Ill

THE CHRONICLE

3nt>e«tment tyouses anb JSratoer*

Maitland, Coppeil & Co.

J. P. MORGAN & CO.
Wall Street, Corner

DREXEL

No. 22 Old Broad

Act as agents
Issue Loans.

Bills

LONDON

Letters

Tne

Provincial & Union
England, Ltd., London,

National

14 Place Vendome

■

worid.

Australasia.

Agents for the Bank of

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Letters of Credit

■

Cable Transfers.

Letters for

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Bank of

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Commercial Credits.

Foreign Exchange,

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Messrs. Mallet Freres & Cie, Paris,
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Securities bought and sold on

'■

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BOSTON

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of Credit

of Exchange,

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of Corporations and negotiate and

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52 WILLIAM STREET

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of jforetgn Cxtfjange

TRAVELERS' LETTERS OF CREDIT

BARING

BROTHERS & CO, LTD.
LONDON

BROWN BROTHERS & CO.

43 EXCHANGE

Boston

NEW YORK.

Philadelphia

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PLA^E, NEW YORK

Members New York Stock Exchange.

Agents and Correspondents of the

Baltimore

ALEX. BROWN & SONS,

and Vienna

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ISSUE LETTERS OF CREDIT

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ROTHSCHILD,

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INCORPORATED

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TAILER 6©

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Investment Securities

Investment securities

Travelers'

mission.

59 CEDAR

out the United States,

YORK

NEW

America

available

through¬

Cuba, Puerto Rico, Mexico,

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Bankers:

London

Bank,

Received

Allowed

Subject

Bought

Draft.

Interest

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and

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and Pittsburgh

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Midland

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bought and sold on com¬

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countries.

BANKERS.

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Make collections
and issue drafts and cable transfers on above

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in

STREET

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Bankers:

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37 William Street,

Commission.
MEMBERS

Foreign Exchange, Letters of

STOCK

EXCHANGE.

Credit
Execute orders for

purchase and sale of

HUTH

& CO.
New York

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Stocks and Bonds.

Foreign Exchange Bought and Sold.

Bonds foi*
Investment

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^available in all parts of the world, f

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BERTRON, GRISCOM & CO. INC.

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Issue Commercial and Travelers'

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Correspondents of

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INVESTMENT

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Letters

of Credit for

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SECURITIES
Land Title Building

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BOISSEVAIN
52

& CO.

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Members of the New

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INVESTMENT SECURITIES

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New

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COMMERCIAL DEPARTMENT
Foreign Exchange

Commercial Credits.

Cable Transfers.

EUNROE

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FOREIGN
MESSRS.

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EXCHANGE

PIERSON & CO.

Amsterdam, Holland.

Fiscal Agents

Public Utility and

for

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Nov. 27 1920.]

THE

CHRONICLE

iHtattmetttianfe financial

Goldman, Sachs & Co.

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60 Wall

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MlLLETT, ROE&HAGEN

YORK

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BOSTON

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SAN FRANCISCO

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ANGELES, CAL.

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MEMBERS

Members of New York and
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v
Stock Exchanges

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London,

ATLANTA, GA.

Title Insurance

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80, Lombard

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ST. LOUIS

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INVESTMENT SECURITIES

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411 Olive Street

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NEW YORK STOCK EXCHANGE

Commercial Paper

E. C.

Securities

bought and

sold

commission

Foreign Exchange

Commercial

available

Travelers'

all

52 WILLIAM ST.

Letters

the

parts

NEW YORK

Credit

world

Hornblower & Weeks
42

BROADWAY, NEW YORK

RAILWAY
EQUIPMENT

Investment Securities

BONDS

Bonds]
Preferred

MEMBERS

NEW

CHICAGO

EVANS, STILLMAN & CO.

STOCK EXCHANGES

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Direct wires to all principal markets
60

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may

our

Preferred

Counselraan

Acceptances
business

Stocks

Investment

financing

U. S. Government Bonds

Utility Securities

Equipment Trust Certificates

Bank and Trade

Your particular problems In

Bonds

Public

Paper

Robinson & Co.

Underwriters & Distributors

Investment Securities

& Co.

Exchange Place

your

overcome

112

ADAMS

ST.,

CHICAQO

expert service.

Our facilities are at your

Conservative

disposal

Investment Securities

Bond & Goodwin
New York

Boston

Minneapolis

New York

Members New York Stock Exchange

Bankers

Underwritten

Distributed

Investment Securities

Chicago

San Francisco

Yielding 6%

Seattle

•:

Portland, Ore.

Federal Securities

Broad

Sansom

Pcabody,

Corporation

Frazier &- Gh.

Iloiigliteliiig &Co.

38 South Dearborn Street

CHICAGO
EST. 1865

Streets

PHILADELPHIA

Baltimore

Washington

York

INC. 1913

10 So. La Salle St.

f
New

Chicagc

Distributors

Underwriters

Pittsburgh

Lebanon

Wilkes Barre

Howe, Snow,

Corrigan & Bertles
Investment

Glore, Ward & Co.
INVESTMENT SECURITIES

GRAND

SEC URITIES/SATlBS CO.

Bankers
H.

MICH.

RAPIDS,

Collin;;,

Southern

President

Securities

H. F. BACHMAN & CO.
64

PEACHTREE, ATLANTA

Established 1866
1ST SO.

NEW YORK

CHICAGO

INVESTMENT

CHARLOTTE

BIRMINGHAM

BANKERS

JACKSONVILLE

NEW. ORLEANS

LA SALLE ST.

MEMPHIS

Members N. Y. and Phila. Stock Exchanges

1428 Walnut

St.,

HOLTZ &

Broadway

NEW

PHILADELPHIA

GOVERNMENT BONDS

CO.

INVESTMENT

RAILROAD AND FOREIGN

YORK

& TURNER

HARPER

INVESTMENT

BONDS

FOR INVESTMENT

BANKERS
:

STOCK EXCHANGE BUILDING
WALNUT STREET ABOVE

SOUTH LA SALLE STREET
CHICAGO

BROAD

PHILADELPHIA

Members

Philadelphia Stock Exchange

Colgate, Parker & Co."
49 Wall

Street,

New York

CHRONICLE

THE

^financial

jfmanttal

Members New York and Boston
Stock Exchanges

Electric

15 State Street,

Light

Enter¬

CHASE

earnings.

BOSTON

and

Power

prises with records of established

SECURITIES

NEW YORK

24 Broad Street,

jfimntial

FINANCE

ESTABROOK & CO.

INVESTMENT

[VOL. 111.

BONDS

WE OFFER
and

Bankers

Dealers

Investment

Proven Power and

COMPANY

Light Securities

trCONGRESS ST.

BOSTON

Correspondence Solicited

SPRINGFIELD

PROVIDENCE

ELECTRIC BOND & SHARE CO.
(Paid-Up Capital and Surplus $24,000,000)

Richardson, Hill & Co.
Established

NEW YORK

BROADWAY.

MUNICIPAL AND

1870

Arthur Lipper &

RAILROAD

New Street and

NEW

BONDS

investment Securities

For Conservative Investment
DO

Company

Exchange Place
YORK

SECURITIES BOUGHT AND

Congress St.

SOLDJON COMMISSION

BOSTON

R. L. Day & Co,
Boston Stock Exchange
Mamb"»s New York Stock Exchange

Branch

Members

Congress St., Boston

N. Y. Stock Exchange

Chicago Stock Exchange

Offleea

Waldorf-Astoria Hotel,if .Y

N. Y. Cotton.Exchange

REMICK, HODGES & CO.

11 East 44th St.. N.Y.

N.Y Coffee dk Sugar Excb.

Saratoga Springs. N. Y.

Philadelphia Stook Exoh.

New York Correspondents

Atlantic City. N. J.

Chicago Board of Trade

West End. N. J.

Long Beach, N. Y.

gooseueli
Founded

1797

PARKINSON & BURR
We

Members of the New York and

Seasoned

Specialize in

Boston Stock Exchanges

Government and

Investments
53 State Street

7 Wall Street

Municipal Bonds

BOSTON

NEW YORK

30 Pine Street

W'Hiam P.forapton (o.

New York

INVESTMENT BONDS

BONDS

14 Wall

Street, New York
Cincinnati

St. Louis

New Orleans

Chicago

Baker, Ayling & Young

W. F. Ladd & Co.
BOSTON

Specialists in

EQUIPMENT BONDS

PHILADELPHIA

ISSUES

ALL

PAUL
Investment

WATSON

INVESTMENT SECURITIES

Securities.

William

New York

Street

Cochrane,Harper&Co.
Investment

Securities

New York
60 State

111

St.,

BOSTON

Broadway

NEW VORK

FOUNDED

Letters of

Foreign
Exchange

Credit
ESTABLISHED 1865

1852

Investment Securities

Travelers' Checks
Correspondents Throughout

«ftxJlhJQ$euCCo
5 Nassau

St., N. Y.

Thomas C. Perkins

•

Constructive

MEMBERS NEW YORK STOCK EXCHANGE

16 State Street

Deal in

Underlying Railroad Bonds
v;

Boston, Mass.

Banking

the

World.

Knaitfli *NadioU SrKufittf
Sembers

New

York

Stode.

Exchange

Equitable Building

New York

36 Pearl Street

Hartford, Conn.

and

Tax-exempt Guaranteed & Preferred
"Railroad & Telegraph Co. Stocks

Specialist for eighteen
in the Financing

Watkins &

Co.

years

of established and pros¬
perous

E. HOWARD GEORGE & CO.. Inc.

Industrials.

Entire stock issues

underwritten and distributed
Investment

81 Stats Street

Bankers
BOSTON, MASS.

7 Wall Street

NEW YORK
Investment Securities

Nov. 27 1920.]

THE

Canadian
Government

and

Municipal

CHRONICLE

BANK OF MONTREAL THE
CANADIAN BANK
Established
over

Bonds
These

bonds' offer

CAPITAL PAID UP

exceptional

oppor¬

tunity for sound investment.
If pur¬
chased
now&they
will
yield
from

7% to 7i/2%
Principal

C-20

TOTAL ASSETS

Head

incorporated

STREET,

Williams-Taylor
Manager.

General Manager, Sir John AJrd.
Assistant General Manager, H. V. F. Jones.

New York

and Newfoundland.

Spokane,
Bank

c! J.*
Buy

(So

York, Chicago,

San Francisco—British American
(owned and controlled by the Bank of

Sterling

and

Continental
Collections

Banking and Exchange business
description transacted with Canada.
LONDON OFFICE—2 Lombard

West
Indies, British Guiana and Wast
Africa—The Colonial Bank (In which an
interest is owned by the Bank of
Montreal).

Street.

VfVBfJ

©.

The Bank of

England,

The Bank of

Scotland,

Lloyd's Bank, Limited.

United Financial Corporation
Limited

(Incorporated 1832)
PAID-UP

RESERVE
TOTAL

TtewYorto

CAPITAL
FUND

ASSETS

$9,700,001
18,000,000

OVER

..280,000,009

Head Office, Halifax, N. S.

Montreal

Victoria UC.

Sell

THE BANK OF NOVA SCOTIA

Securities
PtVwadxvcty

and

}

BANKERS IN GREAT BRITAIN:

<5<anadican
(Xovcrnmont. Muntcip<il & Corporation.

Toronto

STEPHENSON,}Agonti

Travelers" Cheques and Letters of Credit IssoeC
available in all parts of the world.

Montreal).

yl'&'ylnies

FRANCIS,

and
Cable Trasfers.
made at all points.

London, England, and at Mexico City.
In Paris,
Bank of Montreal, (France).
In the United States—Mew

Office, 16 Exchange Place

F. B.

Exchange

Branches and Agencies:

Toronto, London, Eng., Winnipeg, Montreal

..$15,000,00!

$15,000,001
President. Sir Edmund Walker, O.V.O., LL.D., D.O.I

560,150,812

TORONTO

RESERVE

Office—MONTREAL

Throughout Canada

YORK

NEW

OFFICE,
PAID UP CAPITAL

MEREDITH, Bart., President.

Sir Frederick
General

Wood, Gundy & Co.
14 WALL

1,251,850

HEAD

SIR CHARLES
GORDON, G.B.E., Vice-Pres.

request.

22,000,000

UNDIVIDED PROFITS

United States funds
Full Particulars

OF COMMERCE

$22,000,000

REST

SIR VINCENT

an<jl interest payable in

100 Years

INVESTMENT BANKERS

Chicago

Montreal

London

Toronto

General Manager's Office, Toronto, Ont.
330 branches throughout Canada, Newfoundlsnf I
Cuba, Jamaica, Porto Rico, Dominican Repubik |
and in Boston, Chicago and New York.
Commer¬
cial and Travelers' Credits Issued, available in aD
parts of the world. Bills on Canada or West Indian

Eolnts favorably United States. collected by eui
ranches in the
negotiated or Correspondtnci
Invited.
Affiliated with

Canadian

Government,
Provin¬
cial, Municipal and Corporation

Guaranty Trust Co. of New York.

New

York

Agency, 52 Wall Street,

H. F. Patterson, Agent.

London, England, Branch,
55 Old Broad St., E. C. 2.

Bonds
Bought—Sold—Quoted

Correspondents

GREBNSHIELDS & CO.

In Great Britain

R. A.

Members
Montreal
Stock
Exchange
Dealers
in
Canadian
Bend
Issues
IT

St.

John

Daly &

Co.

THE

Street, Montreal

CANADIAN

GOVERNMENT,
CANADIAN

MUNICIPAL

ROYAL BANK OF CANADA
Established

1869

AND CORPORATION BONDS

INVESTMENT SECURITIES
Offerings

J®1"4 Cit* * Midland
jRoy*" £ank'of Scotland.

Capital Paid Up
Bank of Toronto

Bequest

$19,000,000

6tal Assets..
¥eserve Funds

Building

19,000,000

590,000,000

TORONTO, ONT.

Correspondence Invited

Head Office

SIR

McDonagh, Somers & Co.
Dominion Bank Building

HERBERT

TORONTO, CANADA

L. PEASE,
C. E.

The Dominion Bank

Montreal

HOLT. President
Vice-Pres. Jt Man. Dlrsstw

NEILL, General Manager

700 Branches throughout CANADA and NEW¬
FOUNDLAND,
in
CUBA.
PORTO
RICO

HEAD OFFICE, TORONTO

DOMINICAN

Paid Up

Capital

$6,000,000
Reserve Fund & Undivided Profits
7,789,000

RURNEFT.
v
PORTEOLIS

Total

assets

—-—143,000,000

.....

Sir Edmund Osier,

Clarence A. Bogert.

President

€r CO

General Manager.

MembercMontrad

IT St.

STOCK

Stodlixctartjo

John Street

AND

New York Agency, 51 Broadway

O. 8. Howard, Agent

Montreal

BOND BROKERS

M. S. WHEELWRIGHT & CO.

London Branch, 78 Cornhill
8. L. Jones, Manager

CANADIAN

AND

FOREIGN

REPUBLIC,
HAITI, OOBTA
RICA, COLOMBIA and VENEZUELA, BRIT¬

ISH

and

FRENCH

WEST

HONDURAS and BRITISH

INDIES, BRITISH
GUIANA.

ARGENTINE—Buenos Aires.
BRAZIL—Rio de Janeiro. Santos, Sao Paolo.
URUGUAY—Montevideo.

SPAIN—Barcelona, Plaza de Cataltma.
LONDON OFFICE—Princes Street, E. C.
NEW YORK AGENCY-68 William St.
F. T. Walker, J. 4. Beatson, 8. B. Mdaerneg
and J. D. Leavitt. Agents.

TRENCH AUXILIARY: The
Canada
(France),
PARIS.

Royal Bank
28 Rue de
Quatre-Septembre.

«f

EXCHANGE

BOUGHT AND SOLD

Limited

TRAVELERS'

Canadian Investment Securities

AND COMMERCIAL

LETTERS

OF CREDIT

MONTREAL

Bankers & Brokers

63 Sparks

132 St. Peter St.,

St.,

Dominion

OTTAWA

QUEBEC

HERDMAN & COMPANY
Members Montreal Stock Exchange

Transportation Building

Express Building

MONTREAL

R. C. Matthews & Co.
CANADIAN BONDS
CANADIAN

SECURITIES

CANADIAN

HousslrWIODV-GJMBW
INVESTMENT

TORONTO

C. P. R. Bldg.

BONDS

BANKER*

CANADA

TORONTO

Specialists in

geo.

INVESTMENTS
72 Trinity Place

NEW YORK, N. Y.

FOR SALE—Timber, Coal, Iron.
other propertie®.

Confidential
Settlements

UBited States

Negotiations

Ranch and

Investigations

and Purchases ef Property.

West Indies

Canada

Grand Trunk, Grand

Trunk'Pacific.

Canadian

edwards

and

Northern

Northern
AU

Pacific

Canadian

Securities

CanadianllssueslDeatt in.

TRUAX, HIGGINS CO.
Lewis

New Verk

/Emilius Jarvis & Co.
INVESTMENT BANKERS
Established

Birilding,"Mew*reel
Direct WINS

Termite

JARVIS BLDG.

1891

TORONTO, CA1L

[VOL. 111.

CHRONICLE

THE

ifotelgn

New Zealand

Australia and

BANK OF
(B3TABLI8HSD 1817.)
Paid-up Capital.........
SUaerra Fund
insnri Liability

........

af Proprietors—

Sir

Joint

Esq.

Head Office

19,

£38,096,363

Paid-up

Capital

—

10,840,112

AUTHORIZED CAPITAL

Reserve

Fund

—

10,840,112

ISSUED

Deposits {June 30

1920)—367,667,322

arranged.

THREADNEEDLE

HEAD

AUSTRALIA Limited

TIE UNION BANK OF
Authorized and Issued

fraid-tap Capital £2,580,0001

To-

£5,000,000

OFFICES IN ENGLAND &

WALES
Address: The

"**-

OVERSEASIBRANCH:

* Mauretania"

"Imperator,"

'Aqultania,"

E.C.

CORNHILL, LONDON,

Manager—W. J. Rename.

COMPANY, LIMITED

with which are

Ireland

Over 110 Offices in

and the

Over 150 Offices in

Credito Provinciala
Up
Lire $15,000,002
"
41,000,004
Deposit and Current Accounts

.610,000,000
$3,200,000

and Surplus

Capital

LIMITED

Undivided Profits

Established 1834.

Branches in:

Valet.

Incorporated in New South

India

—

£6,040,000

demand, and Letters of
Credit are issued by the London Branch on the
Head Office, Branches and Agencies of the Bank
In Australia and elsewhere.
Bflleon Australasia
negotiated or collected. Remittances cabled.
en

rue

Head

[

MSi. Banker and Broker

Capital Authorized and

de la Lol

Spanish and

The Union Discount Co.

conducted.

of London, Limited
A

banking

busi¬

Subscribed $10,000,000

Capital Paid Up

5,000,000

Reserve Fund

transacted;

ness

Capital Authorized &

5,000,000

$5=£l
IS

NOTICE
RATES

STERLING.

HEREBY

INTEREST

GIVEN that the
allowed for money

deposit are as follows:

Undivided Profits

India,

Burma, Ceylon,

NATIONAL BANK OF INDIA Limited
East

Head Office: 26, Blshepsgate, London, E. C.
Branches in India, Burma, Ceylon, Kenya
Colony
and at Aden and Zanzibar.

Telegraphic Address, Udlsco: London.

international

general

commercial

£1,500,000
£750.§00

...

Bankers to the Government in British
Africa and Uganda.

yf- 39; CORNHILL,

of Shareholders

Reserve Fund and

Branches

£750,006
£785,794
Straits Settle¬
ments, Federated Malay States, China, and ManrHtua.
New York Ageney, R. A. Edlundh, 04 Wall Btroc*

Reserve Liability

Renmirb.

Cable Address:

London

Subscribed

Capital Paid Up

Belgium

BRUSSELS,

Office

15 Gracechurch Street,

141,215,7S5=£12,UI,472

European banking business

BUSINESS

BANKING

KIND

The Mercantile Bank ef India Ltd.

Office, 7 Fenchurch St., E. C. 3

classes of Argentine,

Barclay's Bank. Ltd..
O.

London Clearing Agents:

168 Fenchurch Street, E.

ROBERT BRUNNER

BUENOS AIRES

I Rranu ■ l«[il
A

Kingdom.

Established 1879

E. O.

Street.

ROME

Special Letters of Credit Branch in Rem?
(formerly Sebasti 8c ReaML 20 Piazza di Spagna.
Foreign Branches: FRANCE: Paris, 2 Rue la
PeJetler angle Bould. des. Italiene: BRAZIL: Sae
Paulo and Santos; NEW YORK; Italian Discern*
& Trust Co., 399 Broadway.
Offices
at
Genoa,
Milan, Naples, Palermo.
Turin,
Trieste,
Venice,
Florence,
Bologna,
Catania, Leghorn, and over 100 Branches in the

EVERY

Espanol del Rio de La Plata

London

" 2,696,000,008
and Head Offlee:

Central Management

TRANSACTED.

London Office:

Lombard

San Francisco

Lyons

Wales

South

New

Sydney,

Panama
Santo Domingo

London

of Proprietors.

Java

Japan
Philippine Islands

2,040,000
2,000,000

.....

Straits Settlements

China

..£2,000,000

—

HEAD OFFICE,

Fund

(May 31, 1919)

Commercial Banking Company International Banking Corporation
69 WALL STREET, NEW YORK CITY.
of Sydney

Lane,

Fully Paid

Capital

THE

Offioe,

Italiana

Societa

Scotland

Reserve

payable

Incorporated the

Banearia Italiana

Sodeta

BANK, LIMITED

CLYDESDALE

THE

Manager—W. A. Lalng

Reserve Liability

Di Sconto

Banca Italiana

Affiliated Banks:
BANKING

BELFAST

SAGALAND.

Paid-up Capital—
Reserve Fund..

C., Englaaoe

Reserves. £10,130,000

Branches In VICTORIA, 39 in
91W SOUTH WALES, 19 in QUEENSLAND.
19 te SOUTH AUSTRALIA, 21 In WESTERN
AUSTRALIA, 8 in TASMANIA and 44 in NEW

Assistant

Street,

London, E.

ATLANTIC OFFICES!

The Bank has 43

tSsad Offioe: 71

Foreign Manager,

168, Fenchurch

Broad Street, London, E. C.

fk 66, Old

£5,130,000

Fund._ £2.630,000/gether

Liability of Proprietors

Total Issued Capital ft

DESCRIPTION OF BANKING
TRANSACTED

BUSINESS

OVER 1,460

£7,500,000

...

EVERY

■;

...

Incorporated 1888

Established 1887

£7,000,Oft
£296,059,18®

OFFICE

Threadneedle Street, London,IE. C. 2.

5 5,

Sauce

£14,210,K-

DEPOSITS

*•«.

Blrehis

£20,066,00*

—

CAPITAL

RESERVE FUND

STREET, E.C. 2

SYDNEY

IS.

throughooe

towns

world.

London Office

GEORGE STREET

Head

banking

all

Agents

K.B.E.,

Banking Business.

Drafts

and Wales

1,408 branches lh England

over

the

Subscribed Capital......

Veeerve

and

$377,721,211

151
BRANCHES and AGENCIES In the
Australian States, New Zealand,
Fiji, Papua
Slew Guinea), and London. The Bank transact*

ftesorte

Ltd.

London, E. C., Eng.

54, Lombard St.,

F. Hyde, Esq.,

General Manager.

every description of Australian
Weed and other Produce Credit*

Bank,

Western

South

HEAD OFFICE:

Managing Directors:

S. B. Murray, Esq.,
E. W. Woolley,

amalgamated the Leaden

been

has

which

Provincial

McKENNA

Right Hon. R.

The

523,828,500
II'IIS'SRS
11,818,600

FRENCH,

RUSSELL

JOHN

with

Chairman:

164,082,000

81st March, 1920

SSfregata Assets

LIMITED

BANK LIMITED

WALES

NEW SOUTH

BARCLAYS BANK

JOINT CITY &

LONDON

Subscribed

Capital —£3,000,000

£1,500,000

Paid-up Capital

Reserve Fund
£2,000,000
The Bank conducts every description of banking
and exchange business.

CLERMONT & CO.

At Call, 5 Per Cent.
At

Days'

Notice,

Principal

BANKERS

Per Cent.

The Company discounts approved bank
mercantile acceptances, receives money on

and

to time, and
approved negotiable securities.
CHRISTOPHER R. NUGENT, Manager.

posit at rates advertised from time

Branches

grants

BRUSSELS
BUENOS AIRES

loans

Central

America

Cable Address:

"Clerment"

HAVANA

HARBIN

PANAMA

MANILAS

PORT'AU PRINCE
RIO

GUATEMALA,

de¬

National

The

JANEIRO

centers

the

world.

Capital.,

Paid-up Capital

$21,166,625

4,233,325

2,500,000

Reserve Fund

Ltd.

0
0
0 0
Paid-up Capital
539.437 10 0
Further Liability of Proprietors.
539,437 10 6
Remittances made by Telegraphic Transfer.
Bills Negotiated or forwarded for Collection.
£3.000,000

Capital

585,000

Fund

1,078,875

Subscribed Capital

Cable Address—Natdis London.

Subscribed

Address: 5 Gracechurch St., E. C.
Head Office: London, E. C. 3.

Reserve

LONDON, E. C.

35 CORNHILL

English Scottish and Australian Bank,
Authorized

Company, Limited

Discount

Banking and Exchange business ef every de¬
scription transacted with Australia.
E. M. J ANION, Manager.

($5=£1 STERLING.)

'AMERICAN

FOREIGN BANKING

CORPORATION
53

Broadway, New York

Capita <and Surplus, $6,500,000

NOTICE is hereby given that the RATES OF

INTEREST
as

allowed for

money

Deposit

are

5% per annum at call.

5H% at 7

Paid up Capital (Hongkong
Reserve Fund in Silver

and 14 days notice.

Approved Bank & Mercantile Bills discounted.
received on deposit at rates advertised
from time to time; and fo i fixed periods upon
specially agreed terms.
Loan granted on ap¬
proved negotiable securitie
Money

PHILIP

Hong Kong &

Shanghai

BANKING CORPORATION

follows:

HAROLD

WADE

Manager

Currency)-__H$i5,000,000
.HS23,OOO,OO0

(Honkgong Curr.)

Reserve Fund in Gold Sterling

£1,500,000

LETTERS OF CREDlt,
NEGOTIATE OR COLLECT BILLS PAYABLE IN
CHINA, JAPAN, PHILIPPINES, STRAITS SET¬
GRANT DRAFTS, ISSUE

TLEMENTS, INDIA.
J. A. JEFFREY, Agent,

36 Wall St.,

Nov. 27 1920.]

THE

CHRONICLE

Jforefjjn

vii

jfactiqn

Jfore<a«

NATIONAL

SPERLING & CO.
Basildon House, Moorgate

Banque Nationale de Credit

FISCAL AGENTS FOR

Capital

frs.

500,000,000

100,000,000

Public Utility

Surplus

frs.

and

Deposits

frs.2,600,000,000

Hydro-Electric Companies

Head

Head Office—Cairo.
1

Established

NEW

Office:

120

£3,000,009

£1,663,270

BROADWAY.

Branches

the

Fund

AND

AGENCY

KING

WILLIAM

ST.,

LONDON, E. C., 4, ENGLAND.

Provinces

Rhenish

4''.;

THE

GENERAL BANKING BUSINESS

NATIONAL PROVINCIAL AND
UNION BANK OF EN6LAND

BANCA COMMERCIALE ITAL1ANA
Head

Law

Capital, fully paid

LONDON

290 Branches in France

INC.,

Egyptian

Reserve

AGENTS

YORK

under

June, 1898, with the exclusive right to
issue Notes payable at sight to bearer.

PARIS

SPERLING & CO.,

EGYPT

St.

London, E. C.

BANK

Limited

Office MILAN

Paid-up Capital

$31,200,000

($5=£1.)

Reserve Funds..

$11,640,000

BSCRIBED CAPITAL

165

BROADWAY

Lotidon Office, 1 OLD BROAD STREET, E.C.
Manager: E. Console.

RVE

UNION
De

15,

Italian State Railways, 12 Waterloo Place

with

Regent St., S. W.

ZURICH
St. Gall,

Winterthur, Basle, Geneva,
Lausanne, &o,

Branches in Italy, at all the

principal points in the Kingdom
"Representatives In New York and Agents
la Italy" of the Banque Francaise et
Poor

Buenos

Ayres,

Santos,

Rio

&c.

Italienne

Offices

numerous

England

and Wales

ROTTERDAMSCHE
BANKVEREENIGING

Every Description of Banking Business
Amsterdam

Foreign Exchange, Documentary Credit*.

Janeiro,

$36,195,20|

Rotterdam

Sud.

l'Ameriaue du

Bishopsgate, London, England,

Correspondents to the Italian Treasury.

839,034,3

Head Office:

Banques Suisses

West End Agency and London Office of the

FUND

6199,671,6

ID-UP CAPITAL

NEW YORK,

AGENCY

San

The

Paulo.

Societa
Commerclale
Tripoli.

d'Oriente,

CAPITAL

PAID

Frs.70,000,000
"

RESERVES

15,000,000

Hague

CAPITAL AND
RESERVE

FUND....F.105,000,008

COLLECTIONS

STANDARD BANK OF SOOTH AFRICA, Ltd
LONDON. E. C.

OFFICE,

HEAD

Capital
Subscribed Capital
Paid-up Capital & Reserve Fund.

Arnold Gilissen & Co

$50,000,000

$18,812,506

Authorized

Over
South

$306,125,415

Branches

350

STOCKS
Cable Address :

SALE

AND

Achilles-Amsterdam

THE

HAGUE

THE COMMERCIAL BANK OF SCOTLAND, LM

MACINTYRE. Agent

Wall

EXCHANGE

FOREIGN

PURCHASE AND

AMSTERDAM

ROTTERDAM

Also

Damrak

Agencies throughout

and

Africa.
W.

80-81

$31,250,000

Resources

Total

LETTERS OF CREDIT

St.. New

Established

York

representing The Bank of New South
branches throughout Australasia.

Wales with

1871

Established 1810
Head

BANKERS AND STOCKRBOKERS

Office—EDINBURGH

__£5,5O0,iW

Capital (Subscribed)
Paid up—

FOREIGN

£5 paid..£1,250,961
500,000 "B' shares of £1 each fully pald..£ 500,000
250,000 "A" shares of £20 each

EXCHANGE

The NATIONAL BANK
Bank, Limited

Incorporated by Royal Charter.
every
banking facility for transaction
with Greece, where it has been established foi
80
years,
and has Branches throughout tht
Country.
,
Also
at
Alexandria,
Cairo, &c., In Egypt
Head Office: Basildon House,
Moorgate Street,
LONDON. E. C. 2.
Offers

Over

500 Branches In Africa

MAGNUS IRVINE, See.
London Office—02 Lombard Street, E. O.
Glasgow Office—113 Buchanan Street.
Drafts, Circular Notes and Letters of Credit Issued
and every description of British, Colonial and Foreign
Banking and Exchange business transacted.
1
New York Agents—American Exchange Net.Bank
ALEX. ROBB, Gen. Mgr

Ionian

of SOUTH AFRICA, Ltdi

$1,750,000

£36,071.562

Deposits

£1,000,000

Reserve

Total

Assets exceed

$430,000,000

Offers to American banks

and bankers Its superior

facilities for the extension of trade
merce

between this country and

Africa.

•

10 Wall St.

SAUNDERS, Agent.

SUISSE

CREDIT

Established

1856

Authorized Capital
Subscribed Capital

7.260,000
2,900.000

Capital (Paid Up)
Surplus and Undivided Profits—
1,295,569
Branches throughout Egypt, Morocco,
West Africa and the Canary Islands.
Head Office, 17 & 18 Leadenhall St.. London, E. C.
Manchester
Office,
106-108 Portland Street
Liverpool Office, 25 Water Street
R. R. APPLEBY, Agent. 100 Beaver St., New York

•

Capital paid up..fr«. 100,000,000
Funds..frs.

Reserve

30,000,000

Incorporated by Royal Charter, 1727.

OFFICE

Zurich, Switzerland

.....

St. Andrew Square,

Edinburgh

Cashier and General Manager: A. K. Wright.

Branohea at Basle, Berne, Frauenfeld,

Kreuzlingen, Lugano,
Lueerne, Neuehatel, St. Gall.

Geneva, Glarls,

London Office

•

Manager:

Glasgow Office

BANKING

BUSINESS.

Foreign Exchange
f^Beraentary Business,

Letters of Credit

FOREIGN EXCHANGE

BROTHERS

KONIG
160

Pearl Street, NEW

GO.

YORK

Commercial and

Travellers'

Letters of Credit

-3 Bishopsgate, E. C.2

Wm. Wallace.
-

•

Exchange Square

Agent: Thomas Lillie.
172 Branches Throughout

GENERAL

"Openhym"

£2,000,000

£35,548,823

Deposits
•

Cable Address

INVESTMENT SECURITIES

£1,082,276

Rest and Undivided Profits

"Head Office

FRANKFORT-o-M., GERMANY

Royal Bank of Scotland
Paid-up Capital

HEAD

Oppenheimer

BANKERS

BANK OF BRITISH WEST AFRICA, LTD
$5=£1

New York Agency

Lincoln Menny

and com¬

Scotland.

Every Description o
British, Colonial and
Foreign Banking Business Transacted.
Corrtrpondmce IrttiUd.

KONIG BROTHERS,

LONDON

and

NEDERLANDSCHE HANDEL-MAATSCHAPP1
ROTTERDAM

VIII

THE

CHRONICLE

[Voi. Ill

Ranker* anti Probers (Sutsibt
ST.

LOUIS

J)orfe

CHICAGO

Greenebaum Sons
A. G. Edwards & Sons
Member*

GENERAL

New York Stock Exchange
St.

410

Louie Stock Exchange

Olive St.,

lildon A lilden

Bank andTnist Company

INCOR.Pon.ATCD

Southeast Corner La Salle and Madison Sts.

Capital

and

BANKING

Surplus,

6% CHICAGO FIRST
ST. LOUIS

Suitable for

Bonds

La Salle Street

808 So.

CHICAGO

$2,000,000

MORTGAGE BONDS

Trustees

Estates,

Investment

and

Individuals

Write for Bond Circular C 25.

Oldest Banking House In Chicago.

MUNICIPAL

CORPORATION

BONDS

INVESTMENT BONDS

BONDS

111

First

Mortgage
Corporation Bonds

INDUSTRIAL

Short

PREFERRED STOCKS

Industrial

Monroe St,

CHICAGO

Term

Note

& STITT

SCOTT

A State Bank

Issues

Hyney, Emerson & Co.
39 South

Lorenzo t Anderson & Company
N.

310

8th

A. O.

Salle

CHICAGO

Members

New York Stock Exchange

TIMBER

Chicago Stock Exchange
Chicago Board of Trade

New York Stock Exchange
New York Cotton Exchange

based always upon

110 WEST

Members Chicago Board of Trade
St. Leuie Merchant* Exchange
St. Louis Cotton Exchange
St. Louis Stock Exchange

Heradon Smith

St.

Slaughter & Co.

St., St. Louie

Municipal and Corporation Bonds

Charles W. Moore

STREET

INVESTMENT

South

INVESTMENT BONDS

expert verification

332

SECURITIES

CINCINNATI

Salle Street

'Chicago
New York

Philadelphia

St.

$75,000.00

Loul.

Miami
ST.

LOUIS SERVICE

MARK C. STEINBERG & CO.
Members

New
St,

300

York

Louis

Stock

SHAPKER

Exchange

5lA°/o

COMPANY

Due

Population
Price

134

ST. LOUIS

SOUTH

SALLE

CO.

Bond

105 South

LOUIS

Salle

Street

CHANNER & SAWYER

Municipal, Railroad and Public

INVESTMENT SECURITIES
Union

Utility Bonds

High Grade Investment Se¬
Convertible

curities,

Nete

DEALERS IN

Issues, Bonds, Bank Shares,

ILLINOIS.

Unlisted

BUY

South

INVESTMENT SECURITIES

Securities.

Salle St.

IRWIN, BALLMANN A CO.

CHICAGO

Springfield (Illinois) Pleasure Drive¬
& Park District 4#

way

328-330-332 Walnut

BUFFALO

Specializing in Examination & Preparation of

County, Municipal and Corporation

Slocum, Eckardt & Company

Bonds, Warrants and Securities and
Proceedings Authorizing Same.
Rooms 517-020, 111 W.

INVESTMENTS

Harris

Trust

CHICAGO,

Ellicott Square

Y BUFFALO,

Government,

Municipa
and Corporation Bonds
SPECIALISTS

CINCINNATI

Building

public accountants

David

Robison

Jr.

Bankers—Established

Liberty St.,

New York

Sous

1878.

Municipal, Railroad and Corporation Duds
Toledo and Ohio Securitioa

Securities

LESSER

STOCKS AND BONDS

Gardner

GEORGE W. MYER,
81

NASSAU

BUFFALO, N. T.

ST., NEW YORK

Audits, Investigations,
Estate Accounting,
Telephone Rector 5441

Building,

TOLEDO, OHIO

JR.

Income Tax Return#,

OHII©

PASLEY TUCKER, ROBISON&CO.

Certified Public Accountant

ElllcottSq

Securities

ILLINOIS

New York

DEALER

Cincinnati

Successors to

Certtfieb

BUFFALO, N. Y.

IRVING

FRIEDLANDER

TOLEDO

FEDDE

Western

Monroe St.,

EDGAR

N. Y.

JOHN T. STEELE

Buffalo and

St.

CINCINNATI. OHIO

F. WM. KRAFT, Lawyer

420

Bid#.,

Ohio Securities—Municipal Boad*
New York Stocks ana Bonds

John Burnham & Co.

Ridjzely-Farmers Bank Bids.,

WE WILL

Trust

CINCINNATI. OHIO

Matheny, Dixon, Cole & Co.
SPRINGFIELD,

CHICAGO

SPRINGFIELD, ILL.

Department

CINCINNATI,

INVESTMENT BANKERS

Investment Securities
ST.

Savings

Bank & Trust Co.

TAYLOR, EWART & CO.

It9 OLIVE ST.

300,000

5.30

The Provident

STREET

Members St. Louis Stock Exchange

District

Yield

SHAPKER, WALLER & CO.

CHICAGO

STIX

Bonds

1937-1941-1944

Interest June and Dec. 1—New York

Formerly

Stock Exchange

Broadway

Conservancy District Ohio

BONDS

Corporation

Members

BONDS

of underlyingassete

Powell, Garard & Co.

SMITH, MOORE & CO.

ST. LOUIS, MISSOURI

MONROE

CHICAGO, ILL.

William H. Burg

OLIVE ST.,

Graves, Blanchet & Thornburgh
MUNICIPAL BONDS
GARDNER

BUILDING

TOLEDO, OHIO

Nov. 27 1920 ]

THE

CHRONICLE

GORDON

MICHIGAN

COMPANY

RIoob*,

& Cbtoarb* Co.

Charles A. Parcel Is & Co.
Inquiries Solicited in All
Carried

Union Bank Building.

Markete.

Stocks

Conservative Margins

•

PITTSBURGH,IPA.

Phone Court 3264-5

INVESTMENT BANKERS

A. J. Hood

DETROIT. MICH.

PITTSBURGH

PENOBSCOT BUILDING, DETROIT, MICH.

Company

(Established 20 Years)

Commonwealth Bid*.,

INVESTMENT SECURITIES

••

til C«|fM BU,„

LYON, SINGER &, CO.

Mambera of Detroit Stoek Exchange

Members Detroit Stock Exchange

INVESTMENT BANKERS
ifembert Pittsburgh Stock Exchange

MICHIGAN

Members Detroit Stock Exchange

MICHIGAN SECURITIES

Securities of Pittsburgh District

BOUGHT—SOLD—QUOTED

Pennsylvania Municipal Bonds

Richard Brand

Specialize in Michigan Stocks and Bonds
PENOBSCOT BUILDING

Geo. W.

Specializing

Securities

We invite pour inquiries

DETROIT

1721-3 Dime Bank

Bldg., Detroit

Eberhardt & Co.

OLIVER BUILDING,

PITTSBURGH

GORDON, FORTIER & CO.

Stocks, Bonds, Grain
Suite

Exchange

Members Pittsburgh Stock Exchange
Members
Chicago Board of Trade

161S,

Dime Bank Building

Municipal Bonds Corporation Bonds
Preferred Stocks

Telephone Cadillac 6050
DETROIT

MASTEN

WHITTLESEY, McLEAN & CQ.

Investment Securities

and Provisions
Members New York Stock

A. E.

Company

Detroit

MICHIGAN

Active Members of Detroit Stock

8084-66-88

& CO.

Kzehaega

Penobscot Bldg.,

DETROIT

Established 1891

W. A.

New

York Stock
Exchange
Boston Stock Exchange
Stock Exchange

Member*' Pittsburgh

Chicago Stock Exchange
Chicago Board of Trade
York Cotton Exchange

New

323 Fourth Ave.,

HAMLIN & CO.

Members Detroit Stock Exchange

Motor

FENTON,

Investment

Pittsburgh, Pa.

Branch Office:

1810

Wheeling, W. Va.

& BOYLE

DAVIS

Stocks, Public Utilities & Oils

Penobscot Bldg.,

Bankers

DETROIT, MICH.
Chicago

Detroit

Grand Rapids

PROVIDENCE

W. Carson Dick &

Company
BODELL & CO.

INVESTMENT BONDS

890-866 UNION ARCADE

BUILDING

New York

HIGBIE

COa

MUNICIPAL BONDS

STREET

PROVIDENCE

PITTSBURGH, PA.

KANSAS

WEYBOSSET

KEANE,

GRISWOLD ST.

DETROIT

Boston

KAY & CO.

CITY

Inc.,

COLUMBUS

STREET & COMPANY

INVESTMENT

CLAUDE MEEKER
Municipal & Corporate Bonds
Local

Penobscot

Investment Securities

Bldg.

BANKERS
DETROIT, MICH.

Members Detroit Stock Exchange

Securities

Specialist in Cities Service Issues

Kansas

City

Missouri

East

Broad

COLUMBUS, O.

St..

Broadway,

NEW YORK CITY

INDIANAPOLIS

NEWARK,

Fletcher American

Company

GEORGE M. WEST & COMPANY
Established

N. J.

CONSERVATIVE

1893

INVESTMENT BANKERS

INDIANAPOLIS

INVESTMENT SECURITIES

Capital
Write

$1,500,000

for bids

offerings

on any

Indiana

Security.

INSURANCE

BUILDING

DANSARD-HULL-BUMPUS COMPANY

NEWARK, N. J.

INVESTMENT

TEXAS

Statistical Information Furnished.

Municipal

and

Listed

and

J. E.JARRATT& COMPANY

BREED, ELLIOTT & HARRISON
Investment

INDIANAPOLIS
Cincinnati

Detroit

Chicago

DETROIT, MICH

Members Detroit Stock Exchange

F. M. CHADBOURNE & CO.
FIREMEN'S

Indianapolis

UNION TRUST BLDG.

List upon request

Milwaukee

161

Bankers

Congress

St.,

Bonds

Unlisted Stocks
Detro

Members Detroit

Municipal Bonds

BANKERS

Corporation

Stock Exchange

Investment Securities
San

Antonio, Texas.

Municipal Bonds
Joel Stockard & Co., Inc.,

Indiana Corporation Securities

DUNN & CARR

NEWTON TODD
Local

Securities

Investment Securities

and

Union

Nat.

Bank

HOUSTON.

INDIANAPOLIS

Lomcke Bldg.

BANKERS

Municipal, Government &
Corporation Bonds
Members Detroit Stock Exchange

Indiana Corporation Bonds end Stocks

418

INVESTMENT

Bldg.

Penobscot Bldg.

TEXAS

■

DETROIT

■

Cherry 2600

NORFOLK, VA

LOUISVILLE

MOTTU & CO.

JOHNSTON & COMPANY

Established

HARRIS, SMALL & LAWSON

1892

INVESTMENT SECURITIES
INVESTMENT SECURITIES

NEW YORK

NORFOLK, VA.

FaulJones Bldg.

INVESTMENTS

LOUISVILLE. KY.

Broadway

44 CONGRESS ST.,

DETROIT

<r-i-r[THE CHRONICLE

Vol. 111.

FACIFIC

Howard Throckmorton

COAST

DENVER

Pacific Coast Securities

CALIFORNIA SECURITIES

Boettcher, Porter

BONDS

Government

of MUNICIPALITIES

AND

Company

Bonds Municipal
CORPORATIONS

.Corporation

INVESTMENT BANKERS
having substantial assets

Francisco

San

and

earning

power.

Alaska Commercial Building

DENVER
Quotations

and

Furnished

Information

Pacific Coast

Securities

Established

INVESTMENT

ANGELES

LOS

1853

SUTRO &

SAN

FRANCISCO

PASADENA

WESTERN SECURITIES

CO.

Sugar Stocks

BROKERS

Francisco

San

San Francisco Stock
Bond Exchange

GREGG, WHITEHEAD & CO

and

Blankenhorn-Hnnter-Dolio
F. M. BROWN
DEALERS

& CO.

DENVER

Company

PORTLAND,

BONDS

CORPORATION

National Bank

DAMHC

DWiNL/D

Building

MORRIS BROTHERS, Inc.
THE

PREMIER MUNICIPAL
ONE

CAPITAL

FRANCISCO, CALIFORNIA

ANGELES

SAN

Municipal

SAN

DIEGO

Morris Building

over a

Los

Bonds

Quarter Century

PORTLAND, OREGON

No. 8, Central Building

Aronson and

DOLLARS

FRANCISCO
Established

PASADENA

HOUSB

BOND

MILLION

and

Government
LOS

California Securities

ORE.

MUNICIPAL
AND DISTRICT

SAN

Bankers

Investment

Municipal and Corporation
First

Specialty

Members

410 Montgomery St.

818-815

COLORADO

WILLIAM R. STAATS CO.

SEATTLE, WASH.

•

Company

Angeles,

We specialize in California
Municipal A Corporation

California

A COMPANY

HALL

BONDS

&STASU6HEO l»U

BONDS

INVESTMENT

CLEVELAND

DRAKK,RILEY A THOMAS
Van Nuya Building

The Gondling-Jones Company

Local and Paclflo Coast Securities

LEWIS

BUILDING

PORTLAND. GREG OB

LOS ANGELES

MINNEAPOLIS

STOCKS-BONDS-NOTES
Private Wlrea Coast to Coaat
BANGOR

BUILDING,

Correspondents Logan and Bryan

CLEVELAND

A. H. Woollacott & Co.
ESTABLISHED

228-862 I. W. Hellman Building

Investment Bankers

LOS

Members of New York, Cleveland, Chicago.
Detroit and Columbus Stock Exchanges.
New York Cotton

Sleven$&-&o.

Stocks, Bonds, Grain, Cotton

OTIS & COMPANY

*:-*-'

.•

•

'•

V''

Cincinnati

Columbus

Youngstown

Denver

Colorado Springs

AUGUSTA

Akron

Bonds

Acceptances

SHORT TERM

California Securities
LOS ANGELES

CALIFORNIA

RITTER COMMERCIAL TRUST

Augusta, Ga.
A. E. LEWIS

Southern Securities

A, CO.

Municipal, Public Utility,

Unincorporated

Railroad

and

Corporation

CLEVELAND

BUFFALO

580 Euclid Ave,

Niagara Life Bldg.

(Established

1886.

BONDS of the PACIFIC COAST
Security

Bldg.

Los Angeles,

Cai.

WM.

THE

KLIPFEL- WASHBURN -BERKLEY CO. R. H. MOULTON
INVESTMENT SECURITIES

CALIFORNIA

City Bldg.

Warren

American

Nat'l

SOUTHERN

MUNICIPALS

Bank

LOS

Bldg.,

San

E. BUSH & CO.
Augusta, Ga.

&'COMPANY

Title Insurance Building,

CLEVELAND, O.
Dayton

JOHN W. DICKEY

NOTES

Snd Floor National

ST.PAUL

MINNEAPOLIS

Detroit
Toledo

Stocks

ANGELES

COTTON

SECURITIES

MILL

STOCKS

Francisco

Bucyrus
SPARTANBURG,

MAX I.
Listed

Unlisted

A. M. LAW &

Pacific Coast Securities
Member
San

Francisco

Stock

and

DEALERS
Bond

CO., Inc.
IN

Exchange

Stocks and

Mills Building
SAN FRANCISCO

ALBERT FOYER

S. C.

KOSHLAND

Inactive

Stocks & Bonds

Leader News Bldg.

BONDS

TORRANCE, MARSHALL & CO.

CLEVELAND
Boston*1

'corporation

COMMERCIAL PAPER/

Exchange,

Chicago Board of Trade.

iqiO

"MUNICIPAL RAILROAD

ANGELES

Southern Textiles

Bonds
a

Specialty

CLEVELAND, O.
SPARTANBURG, S. C.

Hunter Glover &

CHAPMAN DE WOLFE CO.

Company

MONTGOMERY

351-353

SAN

Investment

Bonds

and

Stocks

Short Term Notes
CLEVELAND

Montgomery

FRANCISCO,

Stocks
Information

and

Street,

CALIF.

Bonds

Quotations

Coast Securities

all

B. W.
Pacific

iOUTHERN

Strassburger

INVESTMENT

SECURITIES

Nov. 27 1920.]

THE
|8atifcew

MARX & COMPANY

anb

JSrofeera €>utstbe ifreto gorfe

BONDS

BANKERS

BIRMINGHAM,

CHRONICLE

STOCKS

SHORT-TERM NOTES

435 CHESTNUT ST.

PHILADELPHIA

ALA.

Graham. Parsons & Co.

Parsly Bros. & Co.

Southern Municipal and

1421

CHESTNUT

ST.

YORK

Investment Securities

BANKERS

Corporation Bonds

PINE

NEW

STREET

PHILADELPHIA

Deal

CHATTANOOGA

and

Purchase

Issues of
MEMBERS PHILADELPHIA STOCK

EXCHAMBI

MUNICIPAL BONDS,
BONDS, NOTES AND PREFERRED STOC&

LEWIS BURKE & CO.

LOCAL AND SOUTHERN

RAILROADS, UTILITIES

THAYER, BAKER & CO.

SECURITIES

INDUSTRIAL

Janes

Building

AND

CORPORATIONS
'i'!

ESTABLISHED VALUE

CHATTANOOGA

Cable Address

"Graco." Philadelphia

MACON

INVESTMENTS

W. M. DAVIS & COMPANY

Commercial Trust Bldg.,

Southern Municipal Bonds

Boles &Westwood

PHILADELPHIA

AND

Guaranteed Stocks
Members Philadelphia Stock Exchange

MACON

Established

GEORGIA

1865

& Oft
410 Chestnut St.

New

England

Members New

Stock

Industrial Securities

We will

Yielding 63^% to 8%

buy and sell the
equipments :

following

J. MURRAY WALKER
Boston

Securities

Philadelphia
Exchanges

Lad Tltto

Chesapeake & Ohio 6^s

IS Devonshire Street

Investment

Philadelphia
York and

BifldlDt,

•

PHILADELPHIA

•

1927-30

Canadian Pacific 6s

Telephone Locust 4721

1926-30

Canadian Northern 6s

.1926-30

Michigan Central 6s

____.1926-30

MILWAUKEE

w .ikdONES ^ a
Ttoi
Iunicipal Railroad^

EDGAR,
East

Ll«t

c riven

current

afferijiga,

Mason

CO.

etU.0ark*go.

Streets

BANKERS

NewYork^

NOIIKCTOB 6141—CABLE UIIESS "ORtOTTMEirr*

and

MILWAUKEE, WIS.

Corporation Bonds
90 Broad Street

RICKER

Water

Specializing
,

WISCONSIN CORPORATION ISSUES

321

Chestnut

Financing of Milwaukee

Stock

Exchanges

Bought and Sold.

Liveliest
Discussion

First Wisconsin

of the Canadian
financial

ienibert Philadelphia Stock Exchange

Company

Investment Securities

53,000

publish each
month.

Second Ward Securities Co.
MILWAUKEE

look kindly
Canada

gladly add

name to our

will

your

So.

Telephone Canal 4848

Milftown,
5.60

N. J.,

1926-1943
Basis

Gs,

5.50%

Essex

County, N. J.,
At 4.90% Basis

Reg.

4s,

1949

M. M. FREEMAN & CO.
481 Chestnut Street

Philadelphia

Salle St.

CHICAGO

Specialists in

Wisconsin Municipals

mailing

Address:

Building

Telephone. Lombard 710
108

possible in¬

vestment,

Title

Ridgefield Park, N. J., 6s, 1922-1926
At 5.80 to 5.70% Basis
At

10,000

Second Ward Savings Bank Bldg.

upon

New York

$300,000

Investment

Items which

field for

Land

PHILADELPHIA

WISCONSIN

kets is contained

you

INVESTMENT BANKERS

mar¬
MILWAUKEE

list.

Established 1837

Investment Securities

The

Philadelphia

Members New York and
Philadelphia

and Wisconsin Industries.

St.,

and

Frederick Peirce
BONDS

High Grade Investments

1421

INVEST

& Co.

FOR

Chestnut

Street,

MENT

Philadelphia

agency or

Royal Securities
CORPORATION
(canada)

Morri^E Iqx & Co.
Imvestm

limited

fiM.r

165 Broadway
Tel. Cortlandt

BOYLE, BROCKWAY & GRAHAM, INC.

MilwaukelWia

New York

3234-6 -6

curit1es

WI&comSin

NATION8l0c

MATTERS FINANCIAL

Underwriters and Specialists in
Wisconsin
Write

our

Issues

Trading Department.

Union

Arcade

Pittsburgh,

Pa.

[VOL. 111.

CHRONICLE

ETHB

XII

Current JBonfc HJmjutrfe*

UNLISTED
Aimer. Thermos Bottle

Acker, Merrall & Condit 6s, 1922

Amer. Bank Note

Atlas Portland Cement 6s, 1925

Atlas Portland Cement

Central Union Gas 5s, 1927

Automatic Fire Alarm

Havana Tobacco 5s, 1922

Borden Co.

Hecker-Jones-Jewell 6s, 1922

City Investing

Merchants Refrigerating 6s, 1§37

Gillette Safety Razor

N. Y. & East River Gas 5s, 1944

Securities Co. of N. Y. Cons. 4s

Regal Oil & Gas
Singer Mfg.
West

Virginia Pulp & Paper

United Lead Deb. 5s, 1943

TOBEY&KIRK
Members New

Ward

Baking 6s, 1937

York Stock Exchange

25 Broad Street New York

Safety Car Heating & Lighting
Everett Heaney & Company
Irving National Bank
Central Sugar Corporation
Brooklyn Edison 7%, 1930
New Amsterdam Gas 5%, 1948
Columbus & 9th Av. RR. 5%, '93
Nassau Elec. RR. 4%, 1951

Scriiell
Can.

of Ont.

Dev.

Elect.

5s,

Dominion Iron & Steel 5s, 1929-39

10 Wall

Exchange

Tel. Rector 7580

St., N. Y.

&ccuciticu

111

bonds, all issues
bonds, all issues
bonds, all issues
Cuban Govt, bonds, all issues
Can. & Municipal bonds, all issues

Can. No. Ry.

BONDS
American Gas & Electric Co.
6%, due 2014
American Power & Light Co.
6%, due 2016
Denver Gas & Elec. Co.
7%, due 1922

& COMPANY

MILLER
Members

120 Broadway.

and

Phila.

Stock

Duquesne Light Co.
6%, due 1949

Exchanges

Lehigh Power Securities Corp.

'Phone 7500 Rector, N. Y.

6%, due 1927
Texas Electric Ry. Co.
6%, due 1942
Utah Securities Corp.
6%, due 1922

American Can Co. Deb. 5s, 1928
American Tobacco

Gd. Trunk Pac. Ry.

St. Louis S. W. Ry.

THEODORE L. BRONSON & CO.
Member8 New York Stock

UratfjetH

Public

1933

Car & Fdry. 6s, 1939

6s, 1944

Adams

Express 4s, 1947
Bought—Sold—Quoted
Buffalo Railway Cons. 5s, 1931
EASTMAN
KODAK COMMON
Crosstown St. Ry. Buffalo 5s, '32
3901
Great Falls Power 5s, 1940
Telephone 3992 Rector
Havana Tobacco 1st 5s, 1922
3993
3994
Pacific Gas & Elec. 5s, 1942
ALFRED F. INGOLD &CO.
Seaboard Air Line 6s, 1945
74 Broadway, N. Y.
Trinity Bldg. Corp. 5%s, 1959

STOCKS

Colorado Power Co.
Pfd.

Stock

Nebraska Power Co.
Pfd.

Stock

Southwestern Power & Lt. Co.
Pfd.

Stock

Standard Gas & Electric Co.
Pfd.

Stock

Pfd.

Stock

Utah Power &
Pfd.

JOSEPH EGBERT
10 Wall

St., N. Y.

Pfd.

Tel. Rector 9261

INDIAN

& GAMBLE CO.

REFINING CO.

American Tobacco

Scrip

Tobacco Products

Memberi of
N*w

York

Stock

Cincinnati

Stock

Chicago
Baltimore

Board
Stock

Trade

Bristol & Bauer

Exchange

BALTIMORE, MD.

9723-7, 6922-3

Philadelphia

Boston

Glover & macGregor

Exchange
Exchange
of

Phones

Cigar Stores Scrip

145 Fourth Ave.,

Specialists in all Tobacco Securities

CINCINNATI, OHIO

Private

Company
the

Stock

Rector 9980-5,

Scrip

United

Westheimer &

Light Co.

Stock

West Penn Power Go.

Phone

PRdCTER

Light Co.

Texas Power &

J.20 Broadway

Rector 4594-

PITTSBURGH, PA.

Amer. Wat. Wks. & Elec. 5«, 1934
West Penn Traction 5s, 1960
St. Paul Union Depot 7s,

1923

West Penn Power deb. 6s, 1924
'

Railroad

Wish

■

"■

■

Buy
Cb.

Securities

Pitts., Cin., Chicago & St. Louis

3y2s, 4s, and 4Vis.

Hartshorne & Battelle
II Broad St.

Tal.

Broad 7740

NEW YORK

Nov. 27 1920.]

THE

CHRONICLE

XIII

Current $onb inquiries

Adams Express Coll. 4s,r1947
Amer. Light & Trac. 6s, 1925

British

Loans

Bucyrus Co. Com. & Pfd.

Government 6s, 1921
Chic. & East. 111. 4s, 1955
Cleveland Elec. Ilium. 5s, 1939

Continental Motor 7s, 1923
Detroit Edison Co. 5s & 6sJ 1940

Burroughs Add.

Grand Trunk Pacific 3s, 1962
Italian War Loans

Central States Gas&Elec. 6s, '22

Great

Kansas City Railways 5s, 1944
Montreal Tramway 5s, 1941

Donner Steel 5s, 1935

North Am. Lt. & Power 6s, 1937
United Lt. & Rys. 5s, 1932

Illinois Gas Co. 6s, 1935
Island

War

Chinese

Central Power & Light 7s, 1921

Refining Corp. 7s, 1929

Mach, Stock
Eastman Kodak
|
Firestone Tire Com. & Pfd.
Lakes

Transit

Goodyear T. & R. Com. & Pfd.
Lincoln Motors, Class "A"
Paige Detroit Com. & Pfd.
Packard Motor Com. & Pfd.

Willys Corporation 8% Pfd.

Merrill, Lynch & Co.

Jones & Laughlin 5s, 1939

120

Mich. State Tel. 5s, 1924

Broadway, New York

Telephone 6070 Rector
Private wires to Chicago,

National Conduit & Cable 6s,'27

Traders Telephone 7683 Rector
Youngstown, Grand Rapids and Lansing.

Detroit. Cleveland,

O'Gara Coal 5s, 1955
Seaboard Air Line 6s, 1945

Shawinigan Wat. & Pr. 5s&5V£s
United Gas & Elec. 6s, 1945

Empire Steel
General
Home

Morton lachenbrnclL &
42 Brbad Shfeck.
'QUICMQ

DETROIT PHILADELPHIA

Bait. & Ohio Pr. Lien
3^s, 1925
Bush Terminal Cons.

Chalmers Motors Com. & Pfd.
Central Aguirre Sugar
&

5s, 1955
Colorado & South. Ref
.-4V£s, *35
Denver & R. G. Cons.

Iron

Electric

4y2s, 1936

Rights

Insurance

Stock

Houston Belt & Term. 5s, 1937
Manhattan Ry. Cons. 4s, 1990

Rights
Corn Exch. Bank Stock & Rights
Goodyear Tire & Rub. Com. & Pfd
United Light & Railways
Aetna Explosives 6s

Ore.-Wash. RR. & Nav. 4s, 1961
Pacific RR. of Mo. 1st 4s, 1938
St.L.Iron Mtn.&So. Gen. 5s,1931

PITTSBURGH

Specialists in all
Scrips and Rights

St. P. & K. C. Sh. Line

Dividend

4i/2s, 1941

Instantaneous communication between

offices is made

our

possible through

their inter con nectien b

C.C. Kerr & Co.

prisais wires.
2

Rector

St., N. Y.

Phone 6780 Rector

Foreign Securities
Foreign Currency

Foreign Cheques

Securities

Investment
48

CO.

'Phone 8300 Hanover

Exchange Place

Duluth

NOBLE & CORWIN
Broad

St.

Chase

New

Dul.

York

Circular

Citizen

Bank

NEW

BROADWAY.

120

YORK

Telephone: Rector 7360
fembers of New York Stock Exchange
.

National

-jr. i

New Jersey Zinc

Cairo

4s,

5s,

Mexican Securities

New

Northern

British-American Tob. Co.

Va.

Imperial Tobacco Co.
Babcock & Wilcox, Ltd.
Cedar Rapids 5s
Mississippi River Power 5s

4s,

Philadelphia Co. 5s, 1922
Shawinigan 5s
Shawinigan 5V£s

New York

Telephone Rector 6834

Industrial Bond

CORRESPONDENTS

Pfd.

Electric Utilities

Illuminating & Pow. Secur. Pfd.

Industrial

Stock

Dept

Dept.

Jacob

Dold

Pref.

Fairmont Coal 5s

Utica Knitting Mills, Pref.
Pitts. Ft. Wayne & Chic., Pref.
Standard Steel Car

Cosden

Monon

Slo8s

Coal

Co.

Coal

5s,

1950

5s, 1936
6s, 1932

Sheffield

Co.

7s,

L. & Western Coal

Independent

Cloak &

Suit 8s,

Inc.

West Jersey & Seashore RR.
Nash Motors Pfd. & Com.

1925

Chic., Wilm. & Vermillion 6s,'31
Mortgage Bond Co. 2nd 4s, 1966
Norwalk Steel 4^s, 1929

Warehouses,

Colts Arms

1930

Wickwire Spencer Steel 7s, 1935
American Road Machine 6s, 1938
Sinclair Cons. 7s, 1925

Pure Oil Preferred

Standard Oil
gy

Dept.

S. O. of California
S. O. of Indiana
S. O. of New York

Bank Stock

Elec.

Power Pfd.

Titusville Iron Pfd. & Com.

Greelock

120 Broadway

Pfd.

Texas Power & Light Pfd.
Utah Power & Light Pfd.

1949

5s, Series F 1931

National

Kuczynski & Co.

& Electric Pfd.

Ohio

Consumers

Ry., Memphis div. 5s, 1996
Western N. Y. & Pa. 5s, 1937
St. Louis San Fran. 6s, 1931

Consolidation

Penn Water 5s

Broad 6323

Philadelphia,

Duquesne Light Pfd.

So.

Midland

Exchange

Tel.

Utilities

Northern

5s,

Yadkin

Whitely

Y. Stock

Pacific Gas & Electric Pfd.

Tor., Hamil. & Buff., 4s, 1946
Atlantic

Northern States Power Pfd.

1926
Terminal 4s, 1953

Orleans

5s, 1927

Utility Dept.

United

Wabash & Mich 4s, 1991
&

Kansas Gas

1937

Tenn., Va. & Ga. div. 5s, 1930
Fla. Central & Penin 5s, '30-43

Utah

Div.

Nebraska Power Pfd.

Cinn.,

1941

American Pow. & Lt. Pfd.

1931

& Term.

Belt

wires

Public

Dept

Y., Penna. & Ohio 4^8, 1935
Seaboard Air Line 6s, 1945
Houston

5s,

5s, 1945

Boston,
Baltimore, Richmond, New Haven

Broadway

Private

Telephone 1111 Broad

Louis

Gen.

■

Members N.

Common

Bond

Nor.
P.

Ohio St.

Prince

Kodak

Railroad

Bank

Surety

Eastman

St.

Canadian, Cuban

807

Southern Ry. St. L. Div. 1st 4s, 1951

Equitable Trust

request.

SUTRO BROS. & CO.

jGhn

Range 1st 5s, 1937

Mobile & Birm.

Niles-Bement Common

Liberty Bonds"

Telephone

V\J.

& Iron

Missabe

Mob.

National

"Opportunities in

Cleve. Short Line RR. 1st
43^s, 1961

Theodore C. Corwln

Bankers Trust

DUNHAM &

PRESSPRICH

People's RR. (Syracuse) 1st 5s, 1921
Mark A. Noble

Bought and Sold

40 Wall Street,
New York

Dept.

Ohio Oil

Home Ins. Co., Stock

& Rights

South Penn Oil

Important Foreign Capital*

CARRUTHERS, PELL &
PRIVATE

Montreal

WIRES

Toronto

Bonds, Bank Stocks,

CO.

Miscellaneous Securities, Standard Oil Stocki

16 Broad Street, New York
Philadelphia Phone. Locust 872:

Phone* 5161 to 5169 Hanover
Bait. Phone. m. Pau>

[VOL. 111.

CHRONICLE

THE

XIV

Current Pont) inquiries

Montreal & Province 4s

J. LISMAN & CO.
Member*

Grand Trunk Western 4s

York Stock Exchange

New

Grt.

BROADWAY, NEW YORK

Chic.

all issues

E.,

Racine Water Co. 5s

Wichita Water Co. 5s

Dodge RR. 4s, 1935

Emmett

Mason City & Fort Dodge

Irrigation District 6s

Queens County Water Co. 5s
Otero Irrigation District 6s

& Gloversville 4^8

Fonda Johnstown

N. Y.

New .York Interurban Water 5s
Acquackanonk Water Go. 5s

issues

Atlantic

Shore

South

Des Moines & Fort

WE DEAL IN

& S.

Haute

Terre

Duluth

all

RR.,

Aroostook

Bangor

Northern Ry., Canada 4s

Canada Atlantic 4s

RR. 4s, 1955

Depew & Lake Erie Water 5s
LeavenworthC.&Ft.L.W.4s,5s,6s

Susquehanna & Western Term. 5s

Ogdensburg & Lake Champlain 4s, 1948
Rio Grande Junction

Rutland
Toledo

Central

Ohio

Terminal

Union

Victor

Co.,

5s,

Company

H. C. SPILLER & CO.

1949

4s,

Railway

Dallas,

Fuel

American

Railway 5s, 1939

Railroad

Canadian

INCORPORATED
17 Water St., corner

Devonshire St., BOSTON

63 Wall Street,

NEW YORK

1942
6s
Bronx Gas & El. 5s, 1960

SECURITIES

AND ALL RAILROAD AND STEAMSHIP

Can. Car &

Fdy. 6s, 1939

Colorado Power 1st 5s, 1953
Del. Lack. & West. Coal

WOOD, STRUTHERS & CO.
Investment

NEW

Securities

Illinois Zinc

Street

5 Nassau

Newcastle L. H. & P. 5s, 1929

YORK

Northern Electric 5s, 1939
N. Y. & Jersey

1st 5s, 1932

& S. F. Gen. 4s, 1995 Springfield Ry. & Lt. 5s, 1926
Thos. Cusack Co. Pfd.
Chic. Burl. & Quincy Gen. 4s, 1958

Atch. Top.

Davies, Thomas & Co.
Members N. Y. Stock Exchange

5 Nassau

New York

St.

Great Northern Ref. 4s, 1961

Taylor & White

Southern Pac. Ref. 4s, 1955

Southern Pac. C. P. coll. 4s, 1945

Telephone Rector MSB

Tel. Hanover 427-8-9

Exchange PL, N. Y.

Chic. & Northw. Gen. 3J^s, 1987

Central Pacific 3V£s, 1929
Canadian Pacific 6s, 1924
N. Y. Chic. & St. L. 4s, 1937

Duquesne Ltg. 6s,

1949
Empire Refining Co. 6s, 1927

American

Empire Gas & Fuel 6s, 1924-1926
Mississippi Val. Gas & EI 5s, 1922
Lehigh Power Sec. 6s,,1927

Indiana Steel 1st 5s, 1952
National Tube 1st 5s, 1952

Reading, Jer. Cent. Coll. 4s, 1951
Reading General 4s, 1997
Elgin Joliet & East, 1st 5s, 1941

Cine.

LAND TITLE BLDG
PHILADELPHIA

BROADWAY

CITY.

U. S. Rubber 5s, 1947

deal

Republic 5s, 1958
Empire Gas & Fuel 6s, 1926

Grand Trunk Pacific 3s, 1961
Northern Ontario Lt. & P. 6s, 1931

Pu get

United

and all new issues of bonds and notes

Ill

New York

Broadway

Ry. & Investing 5s,

1926

ABRAHAM & CO.

Matt. H. Connel I & Co.

Member8 New York Stock Exchange
ONE WALL ST., N. Y. Tel. Rector 7911 te 7936

Sound Elec, 5sl 1932

Shawinigan Wat. & Pr. 5^s & 5s

Consolidated Textile 7s, 1923

McKinley & Morris

'20

Georgia Lt., Pr. & Ry. 5s, 1941

Interborough Rap. Trans. 7s, '21

Dominican

Dayton 5s

European Loans of American Rds.

Private wire connection

Rector 7416

Hamilton &

Det. Gr. H. & M. Con. & Eq. 6s,

BAUER, STARE & CO.
UB

Pfd.

Thread

Bush Terminal Cons. 5s, 1955
Cedar Rapids Mfg. & Pr. 5s, 1953
Cent. Ver. 4s, 1920, ctfa. of dep.

27 William

Tel. Broad 3785

St., N. Y.

Telephone: Rector 6467 and 622

VILAS

GARDNER

& CO.

49 Wall

HICKEY
New York

Street
BOND BROKERS

20 BROAD

Tel. Rector 7430

STREET, N. Y.

ORDERS EXECUTED
ACTIVE

BOND

DEALERS

RAILROAD

AND

FOR

I8SUE8

COMMISSION

Atch.Top.&S.Fe Gen.4s 1990

Man. S. W. Col. 5s

1934

Oregon Short Line 5s

1946

Long Island Ref. 4s

1949

Winston Salem S. B. 4s

1960

Kansas

1950

Traverse City RR. 3s

1933

Bush Terminal Bldg. 5s 1960

Northern States Power 5s & 6s, 1941
Southern California, 6s, 1944

Mutual Union Tel. 5s

1941

Mo. Kan. & Tex.

United Light & Ry. 5s, 1932

City So. 3s

1st 4s 1990

Telephone Hanover

Cleveland Electric
Consumers Power

8317

111. 5s & 7s
5s &

Gilbert J. Postley
7

Will

Buy

Consumers

Alabama Power Co. 5s, 1946

Cleveland

Elec.

Ilium.

7s,

1935

Will

Power

Wall Street
NEW
Telephone Rector 9697

YORK

Sell
5s,

Co.

1936

Empire District Electric 5s, 1949

1925

Consumers Power Co. 5s, 1935

Great Western Power Co. 6s,

Detroit Edison 5s, 1933

Metropolitan Edison Co. 5s, 1922

Duquesne Light Co. 6s, 1949

Mississippi River Power

Great Falls Power 5s, 1940

Pacific Gas & Electric 5s,

Southern Power Co. 5s, 1930

Texas Power &

Central Petroleum

Northern States Power 5s, 1941

Madison River Power 5s, 1935

Amer. Lt. & Trac.

EARLE A.
SPECIALISTS IN
DIRECT

TELEPHONE

Pacific Gas & Electric

Western Power

1942

5s, 1937

MILLER & CO.

PUBLIC UTILITY SECURITIES

PRIVATE WIRE CONNECTION

RECTOR 8040-1-2-3

Light,

Ss, 1952

WITH CHICAGO

111 BROADWAY, NEW YORK

MacQuold &

Coady

dombert How York Stock Exchange

14 Wan St., N. T.

Tel. Rector 9970.

Nov. 27 1920.]

THE

CHRONICLE

Current JHonb Snqutrfess
Michoacan Power 6s
Atch.

Guanajuato Pow. & Elec.

Trans.

Short

Atch., Top.

Cent. Mex. Lt. & Pow. 6s & stocks

Chic.

Mexican Light & Power 5s

CI.,

Cape Breton Electric 5s

1958

Kansas Cy.& Pacific RR. 1st 4s, 1990

Louis. & Nash.-St. Louis Div 3s, 1980

Erie

Akron

Dallas

RR.

Co.

1st

5s,

1982

New York, Penna. & Ohio
4^8, 1935

Col.

Ry.

1st 5s,

1927

Norf. &

Waco

Western

Ry.

Con.

4s,

1996

Indianapolis Water Co. 4-^s & 5s

Ry. Co. 1st 5s, 1940

Rio Grande West Ry. Coll. Tr.
4a, '49
St. Louis & Cairo RR. Co. 1st
4a, 1931

Des Moines & Ft.

Guanajuato Reduction & Mines 6s

So.

Dodge RR 1st 4s '35

Pacific RR. 1st Ref. 4s, 1955

Elgin Joliet & East. Ry. Co. 1st 5s, '41

Winston-Salem So. Bound Ry. 4s, '60

111.

Empire Lumber 6s

West.

Gr. Trunk West. Ry. Co. 1st 4s, 1950

Wichita (Kan.) Water 5s

Utah & North. Ry. Con. 1st
5s, 1926

Cent.-Cairo

Bridge Co. 4s, 1950

American Finance & Securities
Portland Terminal 4s
Fremont

4s,

Denv. & R. Gr. RR.Con 4s, 4^8, 1936

Southern Public Utilities 5s

Toledo

Line

& Santa Fe Ry Gen 4s'95

6s & stocks

Norwalk

Wm.

Ry. 5s

Rochester & Syracuse RR. 5s

Tel

Rector 3273-4 and

Penna.

RR.

5s,

1937

Carnegie Ewen

3294

2 Wall Street, New York

Birmingham (Ala.) Water 5s

HOTCHK1N

& CO.

Telephone
Main

460

Boston

Canadian Nor. Ry. 7%, 1940
Union Tank Line Eq. 7%, 1930

State

St.,
Mass.

Illinois Central Eq. 7%,
Ches. & Ohio Eq. 6*4%,

1925-35
1924-35

specialize in the

Evansville & Terre Haute
Cons.

6s,
5s,

Genl.
Ref£

1921
1942

1941

Sullivan

Co.

Coal

5s, 1930

Mt. Vernon Branch 6s, 1923

purchase and sale of

BULL

Telephone & Telegraph

& ELDREDGE

Members of the
20

Securities

ST..

BROAD

New

Federal

York Stock

Farm

Tel.

Loan

Exchange

Cons.

5s,
6s,
4s,

Cons.

Recto^ 8460

Bonds

Specialists in Short Term Securities

and solicit your inquiries

Chicago & East. Illinois

Refg.

1937
1934
1955

Receivers Ctfs.

Missouri, Kansas & Texas
Gen.

T. L. MacDonald

STANDARD

TANK

CAR

CO.

S. F. 4J^s,

1936

Extended Notes

B'way, N. Y.

Dallas &

Preferred

Tel. Broad 2357-8-9

MERGENTHALER

Michigan State Tel. Co.

EASTMAN

LINOTYPE.

KODAK

CO.

Waco

1st

Mo. K.

East.

1st

5s, 1940
5s, 1942
Mo.K. & T. of T. 1st 5s, 1942
St. Louis Div. 1st 4s, 2001
&

Wich. F.&N.W. 1st Ref. 5s'40

Preferred

Wich. Falls & N.W. 1st 5s '39

Mountain States Tel. & Tel. Co.

Chic.Terre Haute & S. East*

Common

First & Ref. 5s,

Rollins, Kalbfleisch & Co.

GILMAN

JOSEPH

Y. Stock Exchange

Members N.

INVESTMENT
84

PINE

SECURITIES
N.

STREET

Telephone Rector 26K7-*-9

Y. CITY

60 BROADWAY

6091-4 John

Income

Works

Water

American

& Electric

u/m
U/M.

Superior California Farm Lands 6s
& Water 6s

Twin Falls North Side Land

Twin Falls Oakley Land & Water 6s
Twin Falls Salmon Riv. Land &. Wat.

K.. L. FLEMING- xJR.

Broadway N Y

Wis.

TEL:

Rector 7270

Cent.

Sup. & Dul. 1st 4s, 1936
Mobile & Ohio St. Louis Div. 5s, 1927

Power Securities Corporation 6s
■

Inquiries Invited

rAMWiRi

CONSTABLE

Atlantic &

i Chic.

Birmingham 1st 5s, 1934

Rock

Isl.

Pac.

6s,

Ry. 1st 4s, 1951
Capital Stock
Denver & So. Lake
5s,

1943

Wm. C. ORTON & CO.
Specialists Reorganization Securities
25 Broad St., New York

Tel. 7160-1-2

FOREIGN EXCHANGE

87 Wall St., N. Y.

Phone

Order

Checks

Currency

BILLO

Bread

1922
Bought and Sold

OTTO

1960

South. Ind.

1st

CONSTABLE & FLEMING

5s,

Bonds

WANTED

Hanover 6297

Shuman

SHORT TIME

dembers New

BONDS

Seligmann

York Stock Exchange

80 Broad St., N. Y.

Tel. Broad 7275

Liberty Registered Bonds
Peerless Motor Truck

NEWBORG & CO.
New

Members

York Stock

BROADWAY,

VIRE

ST.

Members New York State Bankers' Association

5s, 1938

Fonda Johns.

West Virginia

& Glov. 4^s, 1952
& Pitts. 4s, 1990

Rock Isl. Frisco TermT 5s,
Current

5s,

River

Quoted

Oklahoma 4s

N. Y. Penna. & Ohio

Tel.

SMITH

Bowling Green 10090

Columbia Gas & El. 1st 5s & Deb. 5s

1927

Louisiana & Arkan. 1st 5s, 1927

Manitoba

Helena Light & Ry. 5s
Manila Elec. Ry. & Lt. 5s
St. Louis Natl. Stockyards 4s

S. P.-San Fran. Term. 4s

& St. Louis 5s, 1934

Iowa Central

Notes

Sold

ROBINSON &
61 B'way, N. Y.

Atchison-East

& Manhattan

Winston-Salem Southbound 4s '60
Minn.

Stock &
Bought

BROADWAY

LOUIS

Wheeling & Lake Erie 4s,
Kans.

Member* American Bankers' Association

4^8, 1957
1949
City & Mem. Birm. 4s, 1934

Hudson

FARLEE & CO.

Exchange

Telephone 4390 Bowling Green
PRIVATE

J. S

International Paper 5s, 1947

Lake Shore 1st 3>£s

Mississippi River Power 1st 5s
Amer. Smelting & Ref. 5s
Granby Mining 8s

43^s
Chicago Union Station 4^s
Kansas City Southern 3s

Mason

City & Ft. Dodge 4s

Seaboard Air Line 6s
New Haven 4s,

1922

111. Cent. Leased Line
Cuba Railroad 5s
Texas &

WOLFF & STANLEY

4>^s

Oklahoma 5s

M. K. & T. issues

Puget Sound Electric 5s

(

Havana Electric 5s

Argentine Govt. Int. 5s (1909)
Cuban Govt. 4Ms
Mexican Govt, issues

Valvoline Oil Pfd.

Telephone Rector 2920

Trinity

Place, N.

SAM'L
Phone 5380-1-2-3 Broad

GOLDSCHMIDT
25 Broad Strait

[Vol.. 111.

CHRONICLE

THE

XVI

Current .JSonfc Unquirietf

active bonds

ggg inactive bonds
Beth. Steel 7s, 1923

We Offer to

Aluminum Co. of Am. 7s, 1925

JV»

Banks, Brokers

$gjsas,

and Institutions

Columbia Graph. 8s, 1929

Cudahy Packing 7s, 1923
Duquesne Light 6s, 1949

highly specialized service in

City Terminal 6s,Y923

Kansas

all bonds traded in

the New

Beth. Steel 7s, 1935
Diamond Match

Analytical reports
curity furnished

on any se¬

Interboro R. Transit 7s, 1921

request

Seaboard Air Line 6s, 1945

Texas Co. 7s, 1923

Sinclair Consol. Oil 71/2S> 1925

HANSON & HANSON

Denmark 7s, 1945

Investment

Norway 8s, 1940

Securities

72 Trinity Place

Solvay Co. 8s, 1927

New York

Western Electric 7s, 1925

Swedish 6s, 1939

& Pfd.

Adirondack Pow. & Lt., Com.

Light & Power Preferred
Boston Woven Hose & Rubber
Central Massachusetts Power Pfd.
Crowell & Thurlow Steamship
Cumberland County Pow. & Lt.f Pfd.
Edison Electric Ilium, of Brockton
Electric Bond & Share, Preferred
Massachusetts Cotton Mills
Piedmont Manufacturing

Arkansas

Wisconsin-Minnesota Lt.

& Pr., Pfd.

WALTER S. PLACE
35 Congress

New York and

City & Ft. Dodge 4s, 1955
4j^s, 1935
Soo Central Terminal 4s, 1931

1st Coll. Tr.

N. Y. & Westchester

J. S. Bache & Co.
Members New York Stock Exchange

Finlay & Davenport

New York

Specialists in Railroad Terminal Bonds
72

Cincinnati

Baltimore

Rochester

Kansas City

Buffalo

Chicago

St. Louis

New Orleans

Boston

Willys Corp. 1st Pref.

Pittsburgh

Cleveland

Albany

Syracuse

Philadelphia

Troy

R. B.
SO Nassau

Tel. John 6020-1

St., N. Y.

CO.

Louisv. & Nashv. Unified 4s,1940

Penn Cons. 4s,

Boston

7 WALL STREET
NEW YORK

1
1

Unlisted Stocks
Bonds

Bonds
Inquiries from Out-ofInvestment

Houses and Banks are

especially solicited.

SMITH

Jones, Laughlin Steel 1st 5s, '39

York

Armour

4K»

Co.

American

Arkansas

Light

Aurora

Elgin

& Power 6s,

& Chicago

1945

5s & 7>£s

4s & 5s

& Pr. 4J^s & 6s
Chicago & Eastern Illinois issues
Birmingham Ry., Lt.
Continental

Motors

1921-25

Is,

Cudahy Packing 5s & 7s
Commonwealth
Consolidated

of N. J. 5s

Terre

1949
issues

Haute

Empire Gas & Fuel 6s, 1924-26
French Government

Georgia Lt., Pr.
Trunk

LYNCH

York

Philadelphia

Pittsburgh

5s,

1942

Province of Buenos Ayres 6s,

1926

Roebuck

Sears

Swift

Pr.

7s,

Gas

1921-25

1921-23

Electric

Co. 58

Ry. & Light 5s, 1923

Tri-City
United

Light, Heat & Power 7s, 1921
Motor Truck 7s,

Republic
Standard

Utah

Lt.

Ry.,

Richmond

Light

Power &

& Ry. 5s & 6s
Light 5s, 1944

Waterloo Cedar Falls & Northern 5s
West

Penn Power 5s

& 7s

5s, 1940

Duquesne Lighting 6s,
&

New

Virginia Ry. & Power 5s, 1934

5s & 7s

Edison

Traction

Detroit Edison

Grand

MOORE,
LEONARD

Portland

Govt. 4s & 6s
Light & Traction 6s

Argentine

7% notes, 1930

Co.

PHILADELPHIA

SOT Chestnut St.

Evansville

ERNEST

NEW YORK, N. Y.

SAMUEL K.PHILLIPSA CO

British Government

Foreign Government

St.

5s, 1932
Penn
1st 5s, 1939
Empire
Gas & Fuel Co. 6s, 1926
Cincinnati Gas Transport. 5s, 1933
Light & Htg.
Mary Coal Co.

8ABC0CK, RUSHTON & CO.

We Deal in—

William
New

8063

Marion

Bought, Sold & Quoted

DILLON

Tel. 6460 Bowling Green

H. J. Heinz Co.

CHICAGO SECURITIES

and

Broadway

Sears, Roebuck 7% Notes,'21-23

Bros.
16

Telephone
Broad

FRANK
71

'48 (dollar stpd.)

Montgomery

New York City

Now
York, Chicago
Stock Exchanges

of 1942

City Investing Co.
Mortgage Bond Co.

Norfolk & West. Cons. 4s, 1996

944-5-6

HOME INS. BLDG.,
CHICAGO

Hathaway & Co.

1927

INVESTMENT SECURITIES
Broadway

Specialists
Tire and Rubber Stocks

Indianapolis & Louisville 1st 5s

NET 9%%

Rector

Tel., 6400 Broad

BRANCHES and CORRESPONDENTS

Tel. Rector 6881

Trinity Pi.

Motor Stocks

EDWIN BANCKER &,

Town

Stock & Scrip

Ltg. 4s, 2004

Stephensv. N. & S. Tex. 1st 5s, '40
N. Y. Susq. & West. Term. 5s, 1943

Philadelphia

Sinking Fund 5s

Due November

and

PROCTER & GAMBLE

N. Y. Penn. & Ohio 1st

Continental Gas & Elec. Corp.

Member!

4s, 1949

Sup. & Dul. 4s, 1936

Mason

OFFER

Cons.

West.

Cent.

7088"

"Main

Grande

Rio

Wise.

BOSTON, MASS.

St.,

PrlTSfee Telephone

71/£s, 1935

Grand Trunk 7s, 1940

Laclede Gas 7s, 1929
H. J. Heinz Co. 7s, 1930

Packing 6s, 1939

Anaconda Copper 7s, 1929

market.

Curb

York

Allied

& 5s

& Ry. 5s

Pacific

3s,

American

Bucyrus Com.
Charcoal

Iron

Com.

Pfd.

Commonwealth Pow., Ry. & Lt. Com. & Pfd.
Fall

1962

Light & Traction
Machine
& Pfd.

Burroughs Adding

River Trust

Godschaux Sugar Com.

& Pfd.

& CO.
20

Haytiqn American Corp. 7s,

1922-23
Japanese Government 4s & 4^»
Kentucky Traction & Terminal 5s

Goodyear Tire & Rubber Com. & Pfd.
Packard Motor Com. & Pfd.

BROAD STREET

Laclede Gas Light 5s

Standard

NEW YORK
Telephone Rector 6167
Direct Private Wire

j Chicago, Detroit

Connections to

& Grand Rapids

& 7s

Mississippi River Power 5s, 1951
Northern States Power 5s & 6s
Ohio Cities Gas 7s,

1921-25

Ogara Coal 5s, 6s, 7s

Northern States Power Com. & Pfd.

Union

United

Gas

Carbide

Elec.

Com.

Pfd.

& Rights

Light & Ry. Com.

& Pfd.

Virginia Ry. & Power Com. & Pfd.
Willys Corporation Issues

Nov. 27 1920.]

THE

CHRONICLE

^Financial

XVII

financial

"Hail, ye small sweet courtesies of
life, for smooth do ye make the road
of it."
—Sterne.

Grand Trunk Pacific
1st

COURTESY

Principal and interest

We believe that if

Government

business is worth

handled

per

are

the Canadian

payable in London,

Montreal

currency

per

£200 Bonds.

sterling exchange.
Both prin¬
cipal and yield increase
proportionately with the advance
in sterling.

position must be
we

and

1962

An attractive feature of this
security at present prices is
the possible appreciation in

any pro¬

turned down

guaranteed by

Price: approximately $480 and interest

being

courteous-

ly, and if

are

by endorsement,

sterling, and in New York

$4.86

being handled
all it is worth

Railway

Mortgage 3% Sterling Bonds of

Investment houses

thatwith considera¬

invited to avail themselves of

are

services in connection

our

with this issue.

tion, too.
We invite you to

years

American Express Company

experience is

Securities

the least import¬

not
ant

use

Our 39

service.

our

advantage

DEPARTMB

TELEPHONB'

Bcwung green jqooo

we can

offer you.

METROPOLITAN
TRUST
OF

COMPANY

THE CITY OF

60 WALL STREET

Government,

NEW YORK
716 FIFTH

Municipal,

Railroad

AVENUE

Public

Utility

Industrial

Investment Bonds
Chas.
Oil

Gas

Is featured in

A. B. Leach & Co., Inc.

Noble
Co.

Investment
62 Cedar

the current issue of

"The Oil

St.* New York

Philadelphia

Industry"

Boston

Baltimore

Securities

105 So. La Salle St.*
Buffalo

Scvanton

Cleveland

Pittsburgh

Chicago

MinneapoH

Detroit

Milwaukets

Devoted to the Interests of investors
In oil securities. Published monthly
Free

request

How $969.65

CENTRAL NEW YORK

Will Grow to

SECURITIES

R.C.Megargel&Ci

$2,144.96

Bought—Sold—Quoted

INVESTED

27 Pine Street-New York

Bankers

UTICA, N. Y.

As Dealers in

Since

vice

1855

comprehensive

those

ser¬

interested

selling.
Informa¬
tive literature, analyses of spebuying
eifio

issues

and

colored

maps

illustrating properties, will be
upon
application.

GRADE

%as&ph WltiUicx S: ^ows

Stock

Naw

Broadway

Stock

H.M.Byllesby & Co
Incorporated
New\brk
III

Broadway

Canadian, Mexican and Foreign Government
Securities. Phone Broad

7118

BROADWAY

206 S.LaSalle St

BONDS
49 Wall St.
STOCKHOLDERS

GUARANTEED STOCKS

Over

Two

W. H.

LISTS

Thousand

Corporations

Write for catalog

HENRY NIGHTINGALE
MUNICIPAL BONDS

Chicado

Mountague Vickers

York

RESALE

FOR

Circular CC-62.

Tslephoac to Berdell Bros.. N. T,

Tel. Han. (170

MUNICIPALS

Exchange

Exchange Building

PHILADELPHIA

Members New Yvk Stock Exchange
61

SECURITIES.

Member* Hhladelpkia

Sheets.

Quotation

well

Boenning, Garrison & Co.

Direct Private

for

PENNSYLVANIA

TAX-FREE

furnished
Write

Description of the plan and
full information
regarding
the company and security
will be sent to inquirers for

WE WISH TO BUY HIGHoffer

certain

1931.

Guaranteed Stocks
we

bond

managed, growing electric
utility company—$969.65
to-day
will
grow
to
$2,144.96 by November 1,

Mohawk Valley lnrestment Corp.
Investment

secured

WM. JONES

Goadby & Co.

Members New York Stock

NO. 74 BROADWAY

Exchange

NEW YORK

Auditors, Inc.
116 Broad St.

New York City

Tel. Bowling Green 8811-8812

[VOL. 111.

CHRONICLE

THE

XVIII

^financial

Panfc statement*

Statement of Financial Condition of

The Seaboard National Bank
of the

City of New York

cloae of business November 15,

1920
Established 1910

LIABILITIES.

RESOURCES.

$40,005,357.83
Overdrafts................
None
Banking House
1,658,959.26
U. S. Bonds and
CertifiLoans and Discounts......

Due

Federal

from

exchanges

and

Executed

.......

U. S. Bonds

17,364,196.81

Bills

Liability
Ac¬
of Acceptances Ex-

you

65,016,691.95

report—give

our

dollar

Send

for

5,500,000.00

investment stock
one

cor¬

title.

rect
565,613.38

Letters of Credit........

$79,507,154.84

security

bond.

—.—

...

available

any

Payable with Federal

Deposits..................

1,368,067.13

ecuted by this Bank
Customers' Liability Under

of fundamental

565,613.38
300,000.00

Borrowed

Reserve Bank

Impartial Analysis

1,368,067.13

.......

Letters of Credit

due

193,719.00
66,745.00
332,429.57

Philadelphia

for

Customers..

7,575,755.27

U. S. Treasurer

.....

Reserved for Taxes—......

Customers'
count

Discount.......

Acceptances

Reserve

4,688,888.81
475,000.00

Reserve...........

Unearned

Circulation....

429,304.84

Bank of New York

Cash,

Special

2,848,291.45

Bonds, Securities, etc
Due from Banks (net)

$1,000,000.00

Capital
Surplus and Profits
(Earned)

7,691,608.87

of Indebtedness

cates

608 Chestnut Street

OFFICERS
S.
W.

C. C. Fisher, Assistant Cashier
J. D. Smith, Assistant Cashier
B. I. Dadson, Assistant Cashier
J. E. Orr, Assistant Cashier
W. A. B. Ditto, Assistant Cashier
E. V. Nelson, Trust Officer

Bayne, President
K. Cleverley, Vice-President

Gill, Vice-President

DeVausney, Vice-President
Marfield, Cashier
Jefferds, Assistant Cashier

O. M.

Six Per Cent
Southern

Municipals

DIRECTORS
S.

Henry C. Folger

Bayne
Caldwell

Robert J.
W.

Joseph Seep
C. C. Thompson

Gill

Edw. H. R. Green
Peter McDonnell

Cleverley

Edward

William E. Paine

Cornish

Short Time Notes

Henry Whiton

Commercial Paper
Preferred Stocks

Acceptances

)

Hibernia

Securities

Company

(Incorporated)

Hibernia Bank

Building

New Orl.eans

New York Office

44 Pine St.

30 Years
in Export Banking

INCORPORATED

INVESTMENT SECURITIES

Maintaining 93 Branch Offices in 79

INTIMATE

Principal Cities of the United States

the needs and habits of the

acquired
EXECUTIVE

OFFICES:

and

CHICAGO

111 W. Monroe Street

actual

KNOWLEDGE

years

experience

residence in

tries themselves, is

people,

the

coun¬

essential when

transacting business abroad.
SS

Fort Worth Power 5s,

1931

Dayton Power & Light 5s, 1941
Hydro-Electric 6s, 1929

Vermont

Southwestern Pr. & Lt. 8s, 1925
Central Power & Light 6s, 1946

H. L. NASON & CO.
•5 Devonshire St*

BOSTON 9

Consolidation Coal Co.

Consolidated
Power

Elk

Horn

Gas, Electric Light £
Securities

Branches

South

America

1 Branch in Mexico
8 Offices in

Europe

Baltimore

Coal

Wash. Bait.

Securities

Corp. Securities
Annapolis Securities

J. HARMANUS FISHER & SONS
(Established 1874)
SOUTH ST.
BALTIMORE, MD
Members Baltimore Stock Exchange.

Anglo-South American
1AN1C, LIMITED
HivYMkilOMJ, 4i Broxdwmy

Nov. 27 1920.]

THE

CHRONICLE

S&anft statements

"Identified with Chicago'a

THE CORN EXCHANGE

Since 1857'

Progress

NATIONAL BANK

The

Merchants.

OF ICHICAGO

Loan
Report of

Nov.

Other Bonds
Stock in Federal Reserve
Bank
Stock in American Foreign

$76,561,271 69

Banking Corporation—
Customers'
Liability
on
Letters of Credit
Customers'
Liability
on
Acceptances....

the

15,v 1920

RESOURCES
Loans and Discounts
United States Bonds and
Certificates-.
Other Bonds and Mortgages
Stock In Fed. Reserve Bank
Customers* Liability under
Letters of Credit...
Customers' Liability under
Acceptances
Other Banks' Liability on
Bills Bought.
Cash & Due from
Federal Re¬

559,350 00

—

Bank_$12,346,280

serve

15,407,630 02

2,858,510 76

10,143,812 43

House

Due from
Federal Re-

$8,695,946 39

Earned.
Reserved for

9,000,000 00

2,273,782 26
526,652 86

.........

Accrued

In¬

terest and Taxes

Rediscounts

with

763,320 79
Federal

Bank

Letters

Other Banks Bills Bought

Deposits

...

Commercial-Savingg-Tr uat-Boncl
Loan—Foreign

Exchange

OFFICERS
JOHN J. MITCHELL.Chalrman of Board
EDMUND D. HULBERT
President
FRANK a. NELSON
Vice-President
JOHN E. BLUNT JR
Vice-President
C. E. ESTES
Vice-President
F. W. THOMPSON
Vice-President
H. Q. P. DEANS
Vice-President
P. C. PETERSON
Cashier
JOHN J. GEDDES
Assistant Cashier
F. E. LOOMIS
........Assistant Cashier
IER
-

,OEHRRDJOH1
Q. F, HARDIE
Mgr. Bond Department
C. C. ADAMS
Asst. Mgr. Bond Dept.

■I

DIRECTORS
CLARENCE A. BURLEY
Attorney and
Capitalist.
R. T. CRANE
JR.
President Crane Co.
MARSHALL
FIELD,
Trustee
Marshall
Estate.

ERNEST A. HAMILL, Chairman Corn Ex¬
change National Bank.
HALE HOLDEN, President Chicago Bur¬
lington & Quincy RR. Company.
MARVIN HUQHITT Chairman Chicago &
North Western Railway Company.
EDMUND D.
HULBERT
President.
CHAUNCEY
KEEP
Trustee
Marshall
Estate.
„

Trustee L. Z. Leiter

Estate.

JOHN S.

RUNNELLS

President Pullman

EDWARjS*!**

RYERSON
Chairman
Joseph T. Ryerson & Son.
JOHN
U.
SHEDD
President Marshall
Field & Company.
ORSON SMITH Chairman of Advisory
Committee.
JAMES
P.
SOPER

v
President
Soper
Lumber Company.
ALBERT
A.
SPRAUUE^, Chairman
Sprague Warner & Company.

In¬

Loans &

counts
$104,148,526 38
Bonds and
Other Se¬
curities
16,946,829 63 121,095,356 01

Customers' Liability
$5,000,000 00
9,000,000 00
2,481,710 11

on Acceptances
Interest Accrued, but not
Collected

223 00

825,343 33
739,892 89

LIABILITIES
CAPITAL

3,932,384 77

Surplus and Un-

116,988,868 74

DEPOSITSDemand ...$61,301,137 04

Time
77,116,834 66 106,003,504 34

$135,505,653 14

......

57,331,639

Reserved for Taxes & Int..
Dividends Unpaid
Rediscounts with Federal
Reserve Bank

Liability

Acceptances

Discount Collected but Not
Earned

OFFICERS
ERNEST A. HAMILL. Chairman of Board
EDMUND D. HULBERT
President
CHAS. L.

WAKEFIELD-Vice-President

EDWARD F. SCHOENECK

Cashier

LEWIS

GARY——Assistant

Cashier

JAMES

WALKER-Asslstant Cashier
NOVAK—.Assistant Cashier

CHARLES

JOHN J.
E.

EDWARD B. BUTLER,' Chairman
of Directors
Butler Bros.

Board

BENJAMIN CARPENTER? President
Geo. B. Carpenter & Co.

CLYDE

M. CARR
Ryerson & Son

President

HENRY P. CROWELL

Joseph

HENRY A.

President Quaker

Oats Co.

EDMUNDiD.

Chairman of Board

HULBERT

CHARLES H. HULBURD
National

Vice-President
COOPER.... ..............Cashier

COOPER—........Assistant

MARTIN

Watch

Cashier
Cashier

Cashier

BERGER—.Assistant Secretary

C. B. OVERAKER
F. E,
H. W.

Assistant Secretary

MUSGROVE—Assistant Secretary
KITCHELL—Assistant Secretary

M. H. BENT

Asst. Mgr. Bond Dept.

CONNER-—Mgr. Publicity Dept.
DIRECTORS

HUTCHINSON

VIce-Pres.

HENRY

STANLEY

BLAIR
FIELD

ERNEST A. HAMILL

FREDERICK T. HASKELL
E. D. HULBERT

EDWARD A. SHEDD

CHARLES

Cashier
Cashier

BRUGMAN...Assistant Cashier
WILLIAM H. HENKLE
Secretary
F. F. TAYLOR
—Assistant Secretary

President Elgin

HAI^Y SELZ President Selz. Schwab

gomery

Cashier

JOHN J.

Co.

RYERSON

ROBERT J.

Cashier

LAYMAN......... Assistant Cashier

KNIGHT.........Assistant
W. H.
GEDDES........Assistant
J. M.
MILLS—.........Assistant
LEE B.
DOTY..........Assistant
C. F.
MONAHAN——.Assistant
PAUL C.
MILNER—...Assistant

President

JOHN J. MITCHELL Chairman of
Board
Illinois Trust & Savings bank.

BLAIR—.....Vice-President
HUTCHINS-...Vice-President

ROGER K. BALLARD—-Mgr. Bond
Dept.

ERNEST A. HAMILL

CHARLES

of Board

EUGENE M. STEVENS.

MORRIS
T.

HULBERT..............President

JAMES C.

E. S.

CHAUNCEY B. BORLAND
Managing Borland Properties

316,758 19

MITCHELL—Chairman

J. W.

DIRECTORS

264 00

9,195,000 00
4,850,000 00

FREDERICK T.
HASKELL.Vice-President
CHAUNCEY KEEP
Vice-President

F. I.

WATSON* F. BLAIR

1,462,560 81

OFFICERS

OWEN T. REEVES

JR.
Vice-President
EDWARD MAASS......Vice-President
NORMAN J. FORD
Vice-President

1
118,632,776 51

$151,446,228

HUTCHINSON..Vice-President

JAMES

454,997 66

Reserve

Letters

Acceptances..

Individual.

5,411,103 45

$151,446,228 25

522,594 70
on

699,000 00 $24,484,771 13

Dis¬

Bankers .$28,886,669 68

Chairman Inter*
national Harvester Company.
JOHN J. MITCHELL Chairman of Board.

7,000,000 00
on

1920

Ex-

debtedness.

Deposits—
Banks and

CYRUS H. McCORMICK

SEYMOUR MORRIS

Federal

11,808,452 83
98,434,129 37

DEPARTMENTS

Field

Due
to
Bank

Liability
Credit
Liability

15,

change——$23,785,771 13
cat'es

Reserved for Taxes........
nearned Interest

2,661,391 00
10,129,122 65

$153,661,851 76

Field

Capital
Surplus
Undivided Profits.........
Dividends Unpaid

Credit

Nov.

serve Bank. 10,445,620 21
Due from
Other Banks 15,441,007199

13,065,000 00

Liability on Acceptances..
Contingent
Liability
on

Condensed Statement at Close of Business

Cash and

tf
"M

$135,505,653 14

$5,000,000 00

........

Undivided Profits
Discount Collected but not

Farm

3,932,384 77

RESOURCES

.....

Capital

Chicago

Hand

34,582,574 59

LIABILITIES

am/JacRson Streets

and Checks
for Clearing

LIABILITIES

Surplus

La Salle

522,594 70

$153,661,851 76

Liability

420,000 00

11,808,452 83

4,117,300 62;., 35,902,824 03

ILLINOIS TRUST
fir SAVINGS BANK

441,033 00

.....

Cash

420,000 00

Clearing
House

'.A

1,239,600 00
2,092,215.50

„

Due from Other
Banks
and
Bankers
19,439,243 06
Checks for

Reserve

1920

Time Loans..$74,732,449 56
Demand
Loans
17,542,801 02 $92,275,250 58

United States Bonds & Certificates of Indebtedness

Statement of Condition at
Business November

15th,

RESOURCES

F^Trust
Company

Condition

HUTCHINS

CHAUNCEY KEEP
E. A. Shedd & Co.

THORNE

President

Mont¬

Ward fit Co.
H.

JAMES C.

WACKER

CHARLES H. MARKHAM
JOHN J. MITCHELL
CHAS. H.

President

Chicago Heights Land Association

SCHWEPPE

JOHN Q. SHEDD

FRANK D. STOUT
EDWARD F. SWIFT

THE

[VOL. 111.

CHRONICLE

jjant statement*

Chicago

The First National Bank of
OHABTEB NUMBER EIGHT

!•

Statement of Condition at

Close of Business Nov. 15, 1920
LIABILITIES

ASSETS

Loans and Discounts

United States Bonds and Certificates
__
Bonds to Secure U.S. Postal Savings Deposits

$168,600,693 42
9,287,581 70
2,338,500 00
2,769,234 20
2,663,800 00
750,000 00
5,254,469 01
12,159,143 42

(market value),,

Other Bonds and Securities

National Safe Deposit Co. Stock (Bank Bldg.)
Federal ReserveBankstock-.—-

Customers' liability under letters

of credit. .

Customers' liability account of acceptances.

$12,500,000
12,500,000
3,677,663
Other Undivided Profits
1,067,359
Discount Collected but not Earned....—6,148,000
Special Deposit of U. S. Govt. Securities
3,074
Dividends Declared but Unpaid——
1,948,010
Reserved for Taxes.
-—- 6,605,000
Bills payable with Federal Reserve Bank—
21,960,000
Rediscounts with Federal Reserve Bank.
621,311
Cash Letters of Credit—.
4,933,896
Liability under Letters of Credit
12,839,263
Liability Account of Acceptances

Capital Stock paid in
Surplus Fund...........

......—-

... ...

Cash Resources—
Due from U. S. Treasurer

Due from Federal Res. Bank.

$4,000 00
18,919,715 28

72,690^578 34
1,730,802 64

Other Assets

-—

Deposits.
Demand Deposits

Liabilities other than those above stated

$278,244,802 73

Division "D"

Division "A"

O. V. Essroger, Vice-President
Collateral Stocks and Bonds
Meat Products, Live Stock

Arthur W. Newton,

H. A. Anderson, Assistant Vice-President
Grain, Flour and Feed
Commission
Coal. Doctors and Lawyers

J. B. Forgan Jr., Asst. Vice-President
Groceries, Drugs, Dairy Products, Produce Commission and Cold Storage
Sugar Mfrs. and Dealers, Confectionery, etc.
Malsters and Beverages
Tobacco
Restaurants, Bakers and Hotels

Vice-President
H. H. Heins, Assistant Vice-President
Dry Goods, Millinery, Woolens, Clothing, Cloaks, Furnishing Goods
Jewelry & Merchandising Sundries Transportation Ladles

Division "F"

Division "C"
John F. Hagey,

A. N. Oordell, Assistant Vice-President
Agricultural Implements, Buggies, Automobiles and other Vehicles
Iron and Steel Products
Lumber, Furniture, etc.
Manufacturing Sundries

•Charles N. Gillett, Vice-President

Thos. J. Nugent, Asst. Vice-Pres.
William H. Monroe.
G. P. Alimendinger, Assistant Cashier

Auditing Department
H. L. Droegemneller,
J, P.

Asst. Cashier

H. R. Boss,

Vice-President
Vice-President

G. H. Dunscomb, Asst.

R. F. Newhall, Cashier
J. P. McManus, Asst. Vice-Pres.

Banks and Bankers

Richard J. Cody, Assistant Cashier
O. O.
Guy W. Cooke, Assistant

Assistant Cashier

Credit and Statistical Dept.

Cashier
Dept.

Manager

A. V. Dillon

Edward M. Tourtelot—Manager

McElherne,

Brodhay, Asst. Cashier

Discount and Collateral

Asst. Auditor

Auditor

Foreign Exchange Department
Harry Salinger,

Charles P. Clifford,
Vice-President

Manager

Domestic Exchange Dept.
Robert F. Green, Manager

Wm. G. Strand
Asst. Manager

First Trust and

Statement of Condition at Close of Business

Nov. 15,1920

LIABILITIES

Capital
Surplus and Undivided Profits

$17,033,608 04
57,858,405 63

..............

Loans and Discounts,

Law Department

Edward E. Brown, V.-Pres. 8c Gen. Counsel
John N. Ott, Attorney

Savings Bank

ASSETS

Customers' Liability for Acceptances

$14,349,281 43
Federal Res. Bank,
3,820,914 38
Due from Banks
4,822,764 10

$6,250,000 00
6,912,224 96
926,555 23

Reserve for Interest and Taxes.

352,500 00
2,970,000 00

Federal Reserve Bank Stock

2,975,000 00

Acceptances Executed for Customers,
Liability to customers account Liberty Loan

Loans

Cash and

Miscellaneous

Publishing, Printing, Engraving and Paper
Division ME"

Hats & Caps

Due from

Vice-President

Paper, Paints, Oils, Glass, etc.
Real Estate and Insurance

William J. Lawlor, Vice-President

M. D. Witkowsky,

Demand

J. W. Lynch, Asst.

Vice-President

Stone, Brick, Cement, Contractors
Wall
Boots, Shoes, Leather, Hides and Wool

Division "B"

Bonds

Melvin A. Traylor, Vice-President

John P. Oleson, Vice-President
.01

Frank O. Wetmore, President

Board

193,349,554 94
1,091,667 78

.—

$278,244,802 73

James B. Forgan, Chairman of the

11
80
00
60
83
00
00
28
85

$1,985,640 97
191,363,913 97

Time

Cash and Due from Banks.53,766,863

... -

00
00

'h'.

1,449 55
257,671 59

payments

Unearned discounts

22,992,959 91

Time

$63,768,352 68
16,116,219 57

Deposits
Deposits,

Demand

83,884,572 25

5,000,000 00

Special Deposits

$101,207,473 58

JAMES B. FORGAN, Chairman of the Board
MELVIN A. TRAVLOR

President

FRANK O. WETMORE-

FRANK M. GORDON

Vice-President

LOUIS BOISOT

Vice-President

ROBERT D.

F. O. NASON

Secretary

DAVID V. WEBSTER
A. W. CONVERSE

OLIVER A. BESTEL
O.

FLEAGER

JOSEPH R. JULIN

Asst. Trust Officer

Trust Officer

Asst. Treasurer

....

G. R. ROEHM

Mgr. Savings

Dept.

ROY R.

Mark Cummlngs

James B.

Philip D. Block

John H. Hardin

William L. Brown

Augustus A

Carpenter

Forgan

Robert P. Lamont
Clifford M. Leonard

Manager

BOYSEN

Real Estate Loan Dept.

EDWARD E. BROWN
JOHN N. OTT

General Counsel

Attorney

NATIONAL SAFE DEPOSIT COMPANY

Charles H. Morse
James

Mgr. Real Estate Dept.

DONALDSON .Asst. Mgr. Real Est. Dept.

LOUIS

Asst. Cashier

MARQUARDT

DIRECTORS OF THE FIRST NATIONAL BANK AND THE

A.O.Bartlett

S. J.

Asst. Cashier

ROBYN

ALSO DIRECTORS AND MEMBERS OF THE ADVISORY COMMITTEE OF THE

Benjamin Alien

ROBT. L. DAVIS

Asst. Trust Officer

W. O'BRIEN

EDWARD

Asst. Auditor

J. P. McELHERNE

Asst. Trust Officer

H. H. ALBORN

...Cashier

Auditor

H. L. DROEGEMUELLER

Asst. Cashier

D. W. WESTERVELT

Asst. Trust Officer

F. J. SHANNON

Asst. Mgr. Bond Dept.

Treasurer

FORGAN

Asst. Cashier
Asst. Secretary

W. K. HARRISON

J. H. TEMPLETON-.Asst. Mgr. Bond Dept.

Vice-President

MECHEM

THOMAS S. McOARTY—

Asst. Cashier

STAKE..

Vice-President

ROY O. OSGOOD

JOHN C.

B. O. HARDENBROOK—Vice-President

Vice-President

Manager Bond Dept.

I. L. PORTER

Norris

FIRST TRUST AND SAVINGS BANK
Olive Runnells
John A. Spoor
Silas H. Strawn

Wm. J. Watson
Frank O.

Wetmore

Thomas E. Wilson

William J. Louderback

John P. Oleson

H. H. Hitchcock

Harold F. McCormick

Joseph D. Oliver

Bernard E. Sunny

Clarence M.

E.T.Jeffery

Nelson Morris

Henry H. Porter

Melvin A. Traylor

William Wrlgley, Jr.

Combined Deposits

of Both Banks, $277,234,127*19

Woolley

Nov. 27 1920.]

THE

CHRONICLE

TTT

Pattit g>tatementa

The CONTINENTAL^
COMMERCIAL

BANKS
Chicago

;

Statement of Condition November 15,

Continental

and
Commercial

N-

1920

National

Resources

I
Time Loans

Bank

$210,021,125 31

Demand Loans

78,256,230 09
388,533 45

Acceptances

Bonds, Securities, etc™.

11,204,799 24
-$299,870,688
10,188,853
1,125,000
6,000,000
32,945
2,794,229
13,310,704
50,569
104,810,546

■

U. S. Bonds and Certificates of Indebtedness
Stock of Federal Reserve Bank
Bank Premises

(Equity)..

Other Real Estate

Customers' Liability on Letters of Credit..
Customers' Liability on Acceptances (as per Contra)...
Overdrafts.
Cash and Due from Banks
":'V'

•

09
31
00
00
00
90

20
79
79
k—

■

$438,183,537 08

Liabilities
Capital...

$25,000,000
15,000,000
4,704,301
2,291,368
50,000
8,020,000
76,829,802
25,000
3,048,667
13,016,449

Surplus
Undivided
Reserved

Profits

for Taxes

;

Circulation
Bills Payable with Federal Reserve Bank
Rediscounts with Federal Reserve Bank

...

U. S. Certificates of Indebtedness Borrowed.

...

Liability on Letters of Credit
Liability on Acceptances
Deposits—Individual

00
00
83
70
00
00
78
00
33
43

..$179,533,527 84
110,664,419 17

Banks

290,197,947 01

$438,183,537 08

•

•~i~T

•

osBank
Resources
Time Loans

$25,752,635 01

Demand Loans

$21,427,192 98
13,227,589 84
14,103,296 91

♦Bonds and Securities

Cash and

Due from Banks

48,758,079 73
•Adjusted

cost

Liabilities
Capital
Surplus

Taxes, Interest and Dividends
.

Demand Deposits
Time Deposits

...

•,■■■■

00
00
76
97

-V

$12,931,920 73
$20,313,486 95
41,265,307 06

.".\n

$61,578,79401

$74,510,714 74

■«f
The

:C.
$5,000,000
5,000,000
1,193,828
1,738,091

...

Undivided Profits
Reserved for

$74,510,714 74

market price, whichever is lower.

capital stock of the Continental and Commercial Trust and Sayings Bank is owned

by the stockholders of the Continental and Commercial National Bank of Chicago

Combined

Deposits, $351,776,741.02

[Vot. 111.

XXII

iBank statement*

IBank statement*

REPORT OF THE CONDITION OF

■:

THE BANK OF AMERICA

at the close of business on the fifteenth

day of Novem¬

ber, 1920:
RESOURCES.

Guaranty Trust

Company

Stock and bond Investments, viz.:

securities

Public

of New York

4,857,621 73
2.521,861 47

owned

estate

Mortgages owned
Leans and discounts secured
and

140

$4,251,829 74

securities

Private
Real

Broadway

deed

mortgage,

MADISON

OFFICE

AVENUE

FIFTH

OFFICE

AVENUE

Madison Avenue and 60th Street

199,906 45

discounts secured by other

discounts

Loans,

20,972,653 99

....

not secured by

bills

and

purchased

collateral

26,754.530 08

Overdrafts

companies, banks and
3,246.140 93

Specie

LIVERPOOL

BRUSSELS

CONSTANTINOPLE

HAVRE

trust

bankers

1(8 Grand Street

PARIS

20,371 65

from

Due

GRAND STREET OFFICE

LONDON

real

estate collateral

Loans and

collateral

Fifth Avenue and 44th Street

533.275 00

by bond

other

134,590 87

Other currency authorized by the laws

of the United States

1.730,483 00

Cash items, viz.:

Exchanges and checks
for next day's clear¬

$29,695,181 43

ings

Condensed Statement, November 15, 1920

Other cash items

1,896,330 73
31.591.512 16

Due from the Federal Reserve Bank of

RESOURCES
Cash

New York less offsets

Customers' liability on acceptances (see
liabilities, per contra)

Hand, in Federal Reserve Bank
$178,723,425.26

and Due from Banks and Bankers
Loans and Bills Purchased.

7,918,362 23

526,864,768.43

—...

liability

Customers'
tances

account

9.198,527 94

accep¬

bought and sold.

400,000 00

Other assets, viz.:

U. S. Government Bonds and Certificates

32,934,332.24

Public Securities

24,306,694.50

close of business on

Other

Securities

33,140,196.79

above date...

Bonds

and Mortgages

2,315,250.00

Foreign Exchange
Credits Granted on Acceptances

26,332,239.57
60,330,806.95

Real Estate..

8,486,918.29
10,635,006.05

—

Accrued Interest and Accounts Receivable

$904,069,638.08

Interest

Accrued
tered

en¬

books

$245,647 95

Suspense account....

38.551 77
284,199 72

Total

.$114,615,866 96
LIABILITIES.

Capital stock

$5,500,000 00

Surplus:

Surplus fund
Undivided

$5,500,000 00

profits

618.412 36
6.118.412 36

Deposits,

LIABILITIES

preferred,

New

Due

York

savings

Capital.--

$25,000,000.00

Surplus Fund
Undivided Profits

25,000,000.00

...

-------

-----

11,114,842.65

$61,114,842.65

Due

New

625,000.00

Dividends

Notes

Secured

unions

89,580,000.00

Bonds

Bank

19.694 91

Other deposits due as

adminis¬

trator, guardian, re¬
com¬

or depositary
Deposits by the State

300.000 00

by a pledge of assets

7,481,848.98

Rediscounted with

1.193.918 39

Other deposits secured

18,861,446.00

Not preferred, as follows:

Deposits

Federal

Bank

Reserve

Land

and

of New York

Re-

discounted with Federal Reserve Bank

Acceptances

loan
credit

mittee

.....

Liberty

State

and

associations,

ceiver, trustee,

Notes and Bills Rediscounted with Federal

Reserve Bank...

$4,704,662 20

York

savings

State

banks

executor,

Accrued

follows:

Due Federal Reserve Bank

Against U. S.
Obligations
2,000,000.00
Outstanding Treasurer's Checks.:
21,995,667.00
Foreign Accounts
13,243,757.19
Acceptances—New York Office
48,494,333.95
Foreign Offices
11,836,473.00
Accrued Interest Payable and Reserves for
Taxes, Expenses, etc
14,048,177.65
Deposits
:
614,788,091.66
Government

$904,069,638.08

1,093,619 00

otherwise

preferred, If

1,581.059 14

any...

subject

Deposits

check

44.295.650 43

Time deposits, certifi¬
cates

other de¬

and

posits, the payment
of which

gally

cannot

le¬

required

within thirty days..
Demand certificates of

deposit
Other

426,555 84
166.305 45

certificates

deposit
Deposits withdrawable

131.837 25

only on presentation
of passbooks......
Cashiers* checks out¬

standing,
similar

checks

other officers

Certified

105,434 25

including
962,029 43

checks.....

29.221,351 68

Unpaid dividends
Due

trust

1,865 00

companies,

banks and bankers.

4.097,714 79

OUR RECORD

FORTY-ONE

YEARS OF

CONSERVATIVE

BANKING

Total deposits
Bills

payable,

88.301,697 76

including

indebtedness

for money borrowed, represented by

CONDENSED

notes, secured

REPORT OF THE

by Government obli¬

gations

330,495 00
4,030,116 49

Rediscounts

State Bank of
La Salle and

Acceptances

Chicago

Washington Streets

future date or

drafts

payable at a
authorized by commer¬

cial letters of credit

Contingent

liability

9,398,534 30
account

accep¬

400,000 00

tances bought and sold

Other liabilities, viz.:
Reserves for taxes, ex¬

Close of Business
RESOURCES
Loans and Discounts
$35,116,986
Overdrafts--.19,430
Stock
of
Federal
Reserve
Bank of Chicago
180,000
U. S. Liberty Bonds.—..—.
230,224
U. S. Certif. of Indebtedness
222,943
Other Bonds.
2,860,194
New Banking Premises..
550,000
Customers' Liability on Ac——

....

„

90
14

00
67
00
70
00

Nov. 15,
,

„

Accrued

$2,500,000
3,500,000
712,322
486,000
Reserved for Savings Interest
124,000
Dividends Unpaid
605

00
00
80
00
00
00
1,474,727 58

Undivided Profits
Reserved for Taxes

—

Acceptances

interest
on

en¬

books

close of business on

112,946 50

above date

Estimated

unearned

235.119 47

discount

536.611 05

.$114,615,866 96

Total

1,474,727 58

ceptances

Cash and Due from Banks..

8,182,172 04

Deposits.....

40,039,023 65

$48,836,679 03

Interest

tered

$188.545 08

<fec__

penses,

1920

LIABILITIES

Capital Stock..
Surplus (earned)

$48,836,679 03

JOHN BURNHAM

Allowed On Deposits—Your Business Invited

& CO.

OFFICERS
LEROY A. GODDARD, Chairman of the Board
HENRY A. HAUGAN—
President
WILLIAM C. MILLER
Trust Officer
OSCAR H. HAUGAN
Vice-President
FRANK I. PACKARD
Asst. Cashier
C. EDWARD CARLSON.Vice-President
JOSEPH F. NOTHEIS
Asst. Cashier
FRANK W. DELVES
WALTER J. COX
—Vice-President
Asst. Cashier
AUSTIN J. LINDSTROM
Cashier
GAYLORD S. MORSE—.Asst. Cashier
SAMUEL E. KNIGHT
JOHN D. CAMPBELL..Asst. Secretary
Secretary

BOARD

BANK SHARES

OF DIRECTORS

DAVID N. BARKER
J.J. DAU, Chairman Reid, Murdoch A Co.
LEROY A. GODDARD ..Oh, of Board
HENRY A. HAUGAN
President
H. G. HAUGAN
Retired

BONDS

OSCAR H. HAUGAN.
Vice-President
A. LANQUIST. Pres.Lanq*t A Illsley Co.
W, A. PETERSON, Prop. Pet*n Nursery
.

CHARLES PIEZ
Pres. Link Belt Co.
MARVIN B. POOL —Mgr. Butler Bros.

UNLISTED

SECURITIES

41 So. La Salle St..

CHICAGO

Nov. 27 1920.]

xxiii '

CHRONICLE

THE

Qtauft Companies

WioxU %ift %nsuxmct & %xust OF0.

txo

WALL STREET,

NEW YORK

Receives Deposits

Subject to Check

Allows Interest

Daily Balances.

Will

Manages Property and Collects Income as

otherwise.

Grants Annuities

Agent for Owners.

At the Close of Business

STATEMENT

Nov. 15, 1920
LIABILITIES

ASSETS

Bonds and
Bonds and

Mortgages
Stocks, viz.:
Public Securities (Inc U. S. Bonds, $1,439,967 11)

Certificates $561,000).

Accrued Int., Rents, Suspense Account,

Annuity Fund.

&c.

22,429,721 95

Interest due

1,784,015 49
870,020 94
328,808 23

Deposit

Cash on

2,358,607 91

Deposits

3,097,635 41
4,550,929 58

Collaterals

Cash in Company's Vaults

$1,000,000 00

Surplus Fund & Undivided Profits—

2,730,015 78
9,650,013 86

Private Securities

Receivable (Inc.U. S.

Capital Stock

$2,027,434 94
3,347,112 29

Real Estate

Bills

Favorable Terms.

Company of Moderate Size Which Makes a Specialty of Personal Trusts.

A Trust

Loans

for Fixed Periods and

Accepts Trusts created by

2,186,874 27

410,782 39

Depositors, Taxes, &c—

$28,385,986 52

TRUSTEES
W. Emlen Roosevelt

Stuyvesant Fish
Edmund L. Baylies
Henry A. C. Taylor
Columbus O'D. Iselin

Howard

Edward J. Hancy

Stephen P. Nash

Cleveland H. Dodge
Denny

Frederic W. Stevens

Alfred E. Marling

Henry Parish

Lewis

Moses Taylor

Nicholas Biddle

Joseph

Edward M. Townsend

William

Thomas

Lincoln

Cromwell

Paul Tuckerman

Townsend

Edwin

Cruikshank

Spencer Morris

Choate,

H.
G.

Jr.

Merrill

EDWIN G. MERRILL, President
1st Vice-Pres.

PARISH,

HENRY

ZEGER W. van ZELM,

2d Vice-Pres.

J. LOUIS van ZELM,

JOHN

WILLIAM B. AUSTIN, Asst. Secy.

CHARLES ELDREDGE, Asst. Secy.

Asst. Secy.

VEDDER,

CONDITION OF

REPORT OF THE

VHE

ALGERNON J. PURDY, Asst. Secy.

3d Vice-Pres.

IRVING L. ROE, Secretary

NATIONAL

HANOVER
BANK

OF THE CITY OF NEW YORK
at the close of business November 15, 1920:

RESOURCES.
Loans and discounts

U. 8. bonds to secure circulation

$96,971,826 56
100,000 00

U. 8. bonds to secure U. S. deposits....

theMllinfi

District

r5,060,000 00

U. S. bonds and certificates of indebted¬
ness

6,298,350 00

owned and unpledged

bonds

deposited

with Supt. of

400,000 00
6,786,057 61|
4,650,000 00

Banks, N. Y. State, in trust........

Bonds, securities, &c._
Banking

house

...

Checks and other cash items

762,720 12
21,647,986 33

Other cash in vault
Due from Federal Reserve Bank

132,000 00

Treasurer

(acceptances

exe¬

cuted by other banks under letters of

credit)
Interest

622,266 24

122,923 61

accrued

$197,876,897 77

...$53,181,964 22
and Other Bonds
2,579,060 24
and Discounts

LIABILITIES.

180,000 00
549,000 00
600,000 00

Banking House Site
Customers' Liability on Let¬
ters of Credit and Accept¬

New

Earned

But

141,049 86
18,261 98

Collected

$3,000,000 00
14,000,000 00

Capital stock paid in
Surplus fund..

Undivided profits
not

$6,410,781 93

received

Discount

—

130,700 00

Treasurer

Cash and Due from Banks

18,039,009 69

560,902 96

...

National bank notes outstanding

86,868 48
290,000 00

Expenses
Circulation
of

Credit

and

ceptances

3,553,004 39

—_.

Bills Payable at

Federal Re¬
94,000 00

Bank

Rediscounts at
serve

Ac¬

Federal

Re¬

Bank
—

16,473,964 92
50,493,254 76

Edward

Individual deposits sub¬

certificates

Decker, President

Theodore Wold, Vice-President

William E. Briggs, Vice-President
Robert E. Macgregor, Vice-President

Alexander

Scott H. Plummer, Cashier

4,210 31

....

James A. Latta, Vice-President

57,691,136 55
1,308 00

ject to check
Dividends unpaid

$78,972,050 38

OFFICERS

$76,358,847 49

ers

McRae,

Vice-President

25,448,322 15

checks

Cashier's

253,413 53
311,805 25
and

Interest

$78,972,050 38

Due to banks and bank¬

Certified

for

Deposits
57,218 21
767,058 13
100,000 00

Reserved for taxes

deposit

But Not

Earned

6,971,684 89

Reserved for interest accrued

Demand

Collected

Interest

serve

Redemption Fund and Due
from U.

but

earned..

Overdrafts

Profits

Reserved for Taxes

Letters

Not

$4,000,000 00
2,000,000 00
1,415,739 05

Reserved

3,553,004 39

ances

Capital
Surplus
Undivided

in
Federal
Reserve
Bank of Minneapolis
Banking House
Stock

Interest

1920

LIABILITIES

RESOURCES
Loans
U.

Redemption fund and due from U. S.

MINNEAPOLIS,MINNESOTA

Statement of Condition November 15,

46,508,292 47
3,074,560 50

Exchanges for Clearing House

Specie: gold

liability

•

3,736,461 27
1,003,453 06

Due from banks and bankers..

Customers'

(

checks

out¬

7,473,491 92
5,013,012 38

standing
U. S. deposits

171,990,328 80
Letters of credit and
Letters of credit

368,341 50

travelers' checks._

(acceptances executed

622,266 24

by other banks thereunder)

$197,876,897 77

County of New York, ss.:
I, WM. E. CABLE, JR., Cashier of The Hanover
National Bank of the City of New York, do solemnly
swear that the above statement is true, to the best of
my knowledge and belief.
WM. E. CABLE, JR., Cashier.
State of New York,

Subscribed and sworn to before me,

November,

this 22d day of

1920.
W.

Acts

Girard Trust Company

Executor,

Trustee,

New York County.

WOODWARD,

JAMES F. FARGO,
ELIJAH P. SMITH,

]
^Directors.
J

Chartered

1836

Receiver,

Registrar and
Transfer

Agent

THOMAS, Notary Public.

Correct—Attest:
WILLIAM

PHILADELPHIA

Administrator,

Guardian,

CAPITAL and SURPLUS, $10,000,000
Member of Federal Reserve System

Interest allowed
on

deposits.

B. Morris,

President

xxiv

THE

CHRONICLE

[Vol. Ill

iBonfc statements

National Bank
257 Broadway-Opposite City Hall

Statement of Condition, November 15, 1920
RESOURCES

LIABILITIES

Loans and Discounts.

$16,527,915 22

Capital Stock
$1,000,000 00
Surplus and Undivided Profits.....
1,129,882 51

U. S. Bonds and Certificates of In-

debtedness
i

-d

Other Bonds,

959,234 79
n,.'
1,300,414 05

Securities, etc..

Due from Banks and Bankers

Unearned Discount
,

361,569 38

Cash, Exchanges and Due from Fed-

eral Reserve Bank

Customers'

ffaa!""

5,345,046 28

Interest Accrued

lUjmeZ

Reserved for Taxes, Expenses, etc..
38,226 95
Deposits
18,777,585 48
Bills Payable and Rediscounts with
Federal Reserve Bank
3,032,646 80
,

U. S. Bonds Borrowed

Liability Under Letters

of Credit and Acceptances.

162,000 00

Circulation—

34,239 55

240,600 00

Letters of Credit and Acceptances..

1,323,297 78

1,356,015 69
$25,851,717 05

$25,851,717 05
Commercial and Travelers' Credits issued but not drawn against

$1,284,606 66

Phlneas C. Lounsbury, Chairman.
Herman

Kountze, President.

Edward K. Cherrill, Vice-Pres.

Gilbert H. Johnson, Vice-Pres.

Kimball C. Atwood, Vice-Pres.

Charles F. Junod, Vice-Pres.

Frank E. Andruss, Cashier.

John P. Laird, Asst. Cashier.

■

John H. Brennen, Asst. Cashier.

Hugh M. Garretson, Asst. Cashier.

John H. Trowbridge, Asst. Cashier.

^: ^

Foreign Department

George M. Broemler, Mgr. Foreign Dept.

Trust Department

Thrift Department

Second National Bank
OF THE

CITY

First National Bank

Condensed Statement

Minneapolis, Minn.

$70,661,257 99
39,313 02
2,375,562 80
In-

118,500 00
2,021,737 43
950,000 00

Acceptances
Bankers Acceptances Pur-

6,796,919 87

chased..

775,000 00
and

Capital Stock...

due

from Banks

5,000,000 00
1,233,096 24
1,722,900 00

....

Undivided Profits
Circulation
Letters

Credit

and

ceptances
Banicers' Acceptances
counted
Taxes Accrued
and

Bills

Loans and

$5,000,000 00

...

Surplus

Notes

...

hand

Banks

United

and

States

Treasurer

Real Estate
Customers' Liability Acc't
Letters
of
Credit
and

due from

and

Bankers

LIABILITIES

Other Bonds and Securities
Bank Building and other

Cash

of Nov. 15, 1920

hand, In Federal Reserve

Bank

Nov. 15, 1920

'resources
Loans and Discounts
Overdrafts
United States Bonds
U.
S. Certificates of
debtedness

RESOURCES.
Cash

Statement of Condition

6,796,919 87

...

$6,796,600 92

discounts$19,932,449 58

Less Notes and Bills

rediscounted

618,822 11

$19,313,627 47
U.

Ac-

750,000 00
464,521 83

Redis-

curities

....

counted
Bills Payable

26,759,482 86
75,000 00
63,845,902 04

Deposits

Other

$21,742,830 23
1,121,950 99
71,672 80

Assets

$31,809,005 62
LIABILITIES.

$111,647,822 84

Surplus

and

Undivided

Profits

Deposits
Reserve for Taxes
Unearned Discount
Circulation

OFFICERS

U. S. Bond Liability
Due Federal Reserve Bank
Other Liabilities

F. A. CHAMBERLAIN,
Chairman Board of Directors

O. T. JAFFRAY,
President

$5,597,663 56
21,657,467 97
205,394 55
119,000 00
640,497 50
685,000 00
768,000 00
62,280 50

$29,735,304 08
WILLIAM

SIMONSON,
President
EDWARD H. PEASLEE,
Vice-President
WILLIAM PABST,
Vice-President

A. A. CRANE, Vice-President
J. S. POMEROY, Vice-President

J. G. BYAM, Vice-President
E. E. BLACKLEY, Vice-President

FRED BP AFFORD, Vice-President
H. A. WILLOUGHBY, Vice-President
P. J. LEEMAN, Vice-President

JOHN G. MACLEAN, Assistant Cashier
WALTER A. MEAOHAM, Assistant Cashier

SUMNER T. MCKNIGHT, Vice-President
GEO. A. LYON, Vice-President

O. B. BROMBACH, Assistant Cashier
K. M. MORRISON, Assistant Cashier

STANLEY H. BEZOIER, Cashier

ARTHUR

BURNS,

CHARLES

EDWARD

Vice-President

JOHN

ROBERT

CASE

Cashier

WEBB,
Assistant Cashier
HOVERMAN,
Asst. Cashier
E.

SHOT WELL,

Asst. Cashier

COUNTYTNTYr*
5s

4.60% Basis

1,488,486 00

Banking House

Capital,

Coupon

■

940,715 86

27,909,531 73

F. M. PRINCE,
Chairman ExecutivelCom.

Government

Securities-

Bdnds and other Se¬

Dis...

$111,647,822 84

"NASSAU

YORK

NEW

Fifth Ave. and 28th St., N. Y.

R. Lancaster Williams & Co., Inc.

INCORPORATED

•

INVESTMENT

B. J. Van

SECURITIES

Ingen & Co.

46 Cedar St.

New York

TEL. 6384 JOHN.

Equitable Building.
BALTIMORE

Branch

Office, 9156 Exchange Ave.,
So. Chicago, 111.
German, Austrian, Hungarian, Cxechoslovakian, Rumanian, and Jugoslav Gov t
Bonds

MARYLAND

and

Currency.

Nov. 27

1920.]

THE

CHRONICLE

"*«a

xxv

Jkmfc statement*

BANK

WOOLWORTH BUILDING, NEW YORK

Statement of Condition, November 15, 1920
RESOURCES

LIABILITIES

Cash in Vault and with

Capital Stock.

Federal Reserve Bank. $32,770,279.59

Exchanges
House

Clearing

for

due

and

Paper and
eligible for Re¬

pondents for its Account [after deduct¬
ing $2,192,376.27 held by this Bank]..

$202,618,727.18

Due Federal Reserve Bank...

Call and Demand Loans. $11,092,011.51
Due within 30 days
13,338,677.23

days

Due 90 to 180 days
Due after 180 days

2,491,297.50

Acceptances by this Bank and by Corres¬
113,014,102.58

Other Loans and Discounts—

Due 30 to 90

1,470,064.97

Circulating Notes..

Federal

with

Reserve Bank

1,563,558.16

Reserved for Taxes

56,834,345.01

Commercial
discount

10,744,688.44

Discount Collected but not Earned

from

other Banks

Loans

$12,500,000.00

Surplus and Undivided Profits..

....

Deposits

...

24,509,289.68
30,000,000.00

237,190,235.85

25,021,898.11
32,328,305.51
1,049,383.93

United States Obligations
Other Investments
Bank

Buildings
Liability for Acceptances by
this
Bank
and
its
Correspondents
[anticipated $2,474,903.19]

82,830,276.29
6,243,858.79
6,244,957.85
496,928.00

Customers'

TOTAL RESOURCES.

ESTABLISHED

GARFIELD

22,034,386.49
TOTAL

$320,469,134.60

LIABILITIES-....-...$320,469,134.60

1881

NATIONAL

First National Bank

BANK

FIFTH AVE. AND 23RD ST.

OF PHILADELPHIA

NEW YORK CITY

315 CHESTNUT STREET

November 15, 1920

Capital

■

•

■

•

$1,000,000 00

Surplus & Profits

1,647,072 62

Deposits

18,792,46394

Total Resources

21,928,917 29

OFFICERS
RUEL W.

HORACE

President
Vice-President

POOR
F.

Condensed report at close of business
RESOURCES

POOR

ARTHUR W. SNOW, 2d V.-Pres. & Cashier
JOHN W. PEDDIE,
Vice-President
RALPH T. THORN,
,
Asst. Cashier

DIRECTORS
Ruel W. Poor
Albrecht Pagenstecher Jr.
William H. Gelshenen
Esmond P. O'Brien
Thomas D. Adams
Arthur W. Snow

Loans

and

Investments

Customers'

Liability
Acceptances

Nov. 15, 1920

$39,884,834J58

under

Letters

Credit and

Due from Banks

Exchange for Clearing House

1,608,474 21

Cash and Reserve

3,600,967 13

.....$56,319,762 73

& Total

'"««!

LIABILITIES

$1,600,000 00
2,692,380 84

Capital
Surplus and Undivided Profits
Interest and Discount Collected but not

Earned.,—

Reserved for Taxes, Interest, etc

Acceptances of
We solicit accounts from Banks, Bankers,
Corporations, Firms and Individuals, and
will be pleased to meet or correspond with
those
contemplating
making changes or
opening new accounts.

Letters of Credit and Acceptances

Rediscounts (Federal Reserve Bank).
Bills Payable (Federal Reserve Bank)

Liberty

Bonds Borrowed..
...

Total

FOREIGN
V

CHUCKS

93
73
83
00
00
00
13

$56,319,762 73
WM.JA. LAW, President
KENTON WARNE, Vice-Pres.
THOS. W. ANDREW, Vice-Pres.

HARRY J.

HAAS, Vice-Pres.
JAMES, Vice-Pres.
HOWARD D. SORDON, Asst. Cashier.
ROBERT E. ALDRICH,
4
«
Asst. Cashier
GEORGE A. COOK, JR.,f Auditor
CHAS.

224,899 27

531,636
3,092,907
839,685
SI 6,828,787
1,065,000
f?®* ? 614,100
39,030,365

other Banks sold

Deposits

ALL

3,932,593 56
43,360 59
7,249,532 66

Interest Earned but Uncollected..

?ARLH. CHAFFEE, Cashier
LAWRENCE H. SANFORD,
Asst.

Cashier

T. SCOTT ROOT, Asst. Cashier

BO KIDS
M

CURRENCIES
Kl

Scott & Stump

Hollister,White & Co.
0«CO«»O**Tf O

INVESTMENT

SECURITIES
Investment Securities

R.A.SOICH&CO.
10 Will St, N. T.

Tel Rector 5289-92-4018-4730

Stock Exchange Building
PHILADELPHIA
Phone.: Locust 6480, 6481. 6482. 6483

Keystone: Race 2797

CEDAR STREET, NEW

50 Congress St.
Boston, 9, Mass.

YORK

North American Bldg.
Philadelphia, Pa.

[Vol. Ill

CHRONICLE

THE

xxvi

Stoofe

in New York
1839

Established

STATEMENT

CONDITION

NOVEMBER

15, 1920
Liabilities

Resources

Certificates
ness!•■

•

#»«♦

•

$25,000,000.00

25,000,000.00

Undivided

1,929,031.04

•

Surplus

Indebted-

•

and

Notes

Victory

Capital Paid

$364,576,466.19

Loans and Discounts

8,182,467.33

Profits

349,804,962.93

Other Bonds and Securities

9,004,519.46

Deposits

U. S. Bonds Borrowed.....

6,000,000.00

U. S. Bonds Borrowed

Federal

Stock

Reserve

Bills

1,500,000.00

Bank

Exchanges,

Cash,

496,362.04

Accrued....

Customers'

Unearned

6,626,065.88

Due from Banks and Bankers
Interest

Letters

under

Liability

Re¬

Federal

102,578,000.00

Reserved for Taxes, etc..

134,619,115.27

from Federal Reserve Bank

6,000,000.00

Redis¬

and

Bank.

serve

due

and

with

counts

4,000,000.00

Banking House

Payable

2,942,544.08

Discount

Credit

Ac¬

and

ceptances

Letters of Credit and Ac¬

4,137,130.41

50,385,089.89

1,850,000.00

Liabilities

Other

47,128,634.76

ceptances

$575,880,194.64

$575,880,194.64
PRESIDENT

s. alexander

james

MICE-PRESIDENTS

lo\jis

emerson

guy

david

broderick

john

harry

james

barrand

edward

maxwell

henry

rawls
risley

stevens

AUDITOR

CASHIER

everett

meyer

franz

clarke

roy

e. ward

h. williams

roger

penny

rovensky

archibald

p. christenson
i.

russell

stevenson

keidel

MICE-PRESIDENTS

SECOND

louis

faris

p. howell

herbert

howard ardrey

joseph

albert

passmore

emerton

DIRECTORS

JAMES

HERBERT P. HOWELL

CHARLES H. RUSSELL

ANDREW W. MELLON

S. ALEXANDER

WILLIAM A. DAY

VALENTINE P. SNYDER
HARRY

HENRY W. de FOREST

B. THAYER
TIMPSON

FORREST F. DRYDEN

JAMES

CHARLES E. DUNLAP

THOMAS WILLIAMS

INCORPORATED

THE COAL & IRON NATIONAL BANK
OF THE CITY OF

LIABILITIES

$15,662,625 16

Interest earned but not collected.

U. 8. Liberty Bonds
U. S. Certificates of Indebtedness.

27,696 75
840,150 00
217,000 00

U. 8. Bonds acct. Circulation..

415,000 00

1,987,309
1,300,750
4,199,500
22,600

....

Cash and Exchanges
Furniture and Fixtures

Customers

Liability, Letters
Credit, Acceptances, &c

BROAD

1920.

15,

RESOURCES
Loans and Discounts

Other Stocks and Bonds
Due from Banks

CONTINENTAL BANK

NEW YORK

Close of Business Nov.

Statement at the

Capital
Surplus—

$1,500,000 00
1,000,000 00

....

Undivided Profits

600,332 80
68,144 59

Unearned Discount

Reserve (Taxes and
Circulation

70
55
65

Deposits
Postal Savings Deposits
U. 8. Government Deposits
Amount

707,911 89

140,270 54

Contingencies)

410,500 00

Reserved for

all

Accrued

16,777,033 23
325,697 00
199,000 00

1870

& EXCHANGE
NEW YORK

STREET

Condensed Statement Nov. 15. 1920.
$6,137,077.09
2,293,367.18

Loans and Discounts
Bonds and other Securities

9.636,448.91

Exchanges for Clearing House

255,914.68

Due from Banks
Gash

and

Reserve

reserve

with

Federal

897,137.84

Bank

$19,219,945.70

Interest

16,266 67

Rediscounts,
Bills
Payable
U. 8. Liberty Bonds

2,965,188 31
600,000 00
778,111 84

Rediscounts Federal Reserve Bank

Acceptances acct. Customers

PLACE

Capital
Surplus and Undivided Profits
Reserved for Taxes, Expenses, Ac.

$1,000,000.00
797,964.75
42,857.01

Rediscounts with Federal Reserve

Bank, Bills Payable and Accep¬
tances

$25,380,544 98

$25,380,544 98
JOHN

DAVID

TAYLOR,

15,904,769.89

SPROULL, President

Vice-President

ALLISON

DODD,

Vice-President

ARTHUR A. G. LUDERS, Trust Officer

GRAY, Asst. Cashier

Chairman

ALBERT TAG

President

J. F. FREDERIOHS
Member

New

York

Clearing House Association

Depositary of the United States, City of New York and

$19,219,945.70

OFFICERS

WILLIAM H. JAQUITH, Asst. Cashier

ADDISON H. DAY. Cashier
WALLACE A.

1,474,354.05

Deposits

D. SCHNAKENBERG

State of New York

Vice-President

HENRY BLOCK

Vice-President
Cashier

P. H. HORNBY

Specializing in

JACOB

Russian Govt. Bonds

BACKER

conservative

and Currency

CHAS.

F. HALL &

FINANCIAL

BROKER

Inquiries invited.

FINCH

CO.

20 Broad St.. N. Y.

or carried on
terms.

Inactive and unlisted securities.

Foreign Govt. Securities
Tel. 6810 Recto

STOCKS AND BONDS
bought and sold for cash,

Eat. ltli

Eiahan>o Bank Bid*.

St.Paul

& TARBELL

Members New York Stock Exchange

U0 BROADWAY,

NEW YORK

Nov. 27 1920.]

THE

CHRONICLE

XXVII

j&mfc £>taUnam

Bank Statement that any Man or Woman

THE CORN

understand

can

EXCHANGE BANK
NEW YORK

Statement of November 15th 1920
The Bank Owes to Depositors
A conservative banker

his assets

For this

•

Purpose We Have

Checks
Payable in

Ill*

25,860,870.01

day.

U. S. Government Securities

Payable when

V. Bonds

•

Of Railroads

and

other

VI* Loans

Corporations

•

corporations

•

Payable in less than three months

Bonds and

43,537,226.90

•

30,306,163.10

•

ask for it, secured by collateral of greater value than the

loans.

VIII*

38,705,966.62

Other Banks

on
one

and with legal depositories returnable

IV. Loans to Individuals and

VII*

arranges

•*•«•••«•

(Gold, Bank Notes and Specie)
demand.

II.

$200,740,182.19

be able to meet any request for
payment.

so as to

Cash

ahrayB has this indebtedness in mind, and he

quality

16,532,225.85

•

first

and easily salable

56,652,893.74

the average, largely secured by collateral.

Mortgages and Real Estate

Twenty-three Banking Houses

979,298.16

3,636,751.12

•

$216,211,395.50

All located in New York City.

Total to Meet Indebtedness
IX.

This

Leaves

Surplus

$15,471,213.31

Which becomes the

positors

are

and retain

The Corn
Its

Exchange Bank Supplies Banking Facilities through

Forty-three Branches Located
Main

in Greater New

York

Office

William and Beaver Streets

dev., Cin., Chicago
& St. Louis 6s, 1929

own

and

offer

$180,000 Boxelder County, Utah, School District
5% BONDS

Seaboard Air Line

Dated May

1, 1920

Due May

Financial Statement
Actual value of taxable property, estimated

Ry. 5s, 1945

Assessed

Bought—Sold—Quoted

1, 1940

Denomination $1,000

valuation,

$45,000,000
39,839,560
400,000

1920

Total bonded debt,

including this issue
Population, 1920 census.

18,788

Free from Federal Income Tax and legal investment for Postal Savings Banks.

HUGHES & DIER
Stock*—Bond*—Grain

42 New

Inwmatmmnt Shcuritim
-

Dourer, Colorado

St., New York
Cleveland

Pittsburgh

the

Banks

^ New York
City

NATIONAL

INTEREST, NETTING 5.40%

17th and California 9treota,

SIMON
Over

AND

Bosworth, Chanute & Company

Philadelphia Stock Exchange
Pittsburgh Stock Exchange
Members Chicago Board of Trade
N. Y. Produce Exchange

Philadelphia

PRICE 95.21

SAFETY

FOR THEIR

in
use

BORG &

Members of New

CO.,

York Stock Exchange

No. 46 Cedar Street

New York
of

CHECKS

New York

Old

Stock

New

Stock

Oil

Indiana

HIGH-GRADE

Standard

PAPER

George La Monte & Son
SI Broadway

STANDARD

CARL H.

1
L

"When Issued"

PFORZHEIMER &. CO.

Dealer* In Standard Oil

INVESTMENT SECURITIES

Phone*

4800-1-2-3-4 Broad.

Seeuritlaaf

26 Broad St.. N. T.

CHRONICLE

THE

XXVIII

[VOL. 111.

•

tErutft Contpamea

jTinantial

REPORT OF THE CONDITION OF THE

UNITED STATES TRUST COMPANY
OF NEW YORK

HOLDERS

TO THE

•'

'•

••

business

at the close of

■;

on the 15th

■

day of November.

1920:
RESOURCES.
Stock and bond Investments, viz.:

$40,000,000

Public securities

$2,437,550 00
8,221,768 00

securities

Private

Real estate owned

1,000,000 00

Mortgages owned

Bonds, due 1954

Four Per Cent Gold

4,863,997 12

...

discounts secured by bond
and mortgage, deed or other real estate
and

Loans

61,250 00

collateral

of the

discounts secured by

and

Loans

other

33,139,860 50

collateral

bills purchased not

Loans, discounts and

UNITED STATES OF MEXICO.

6,670,467 03

secured by collateral

approved reserve depositaries,

Due from

3,986,958 96

less amount of offsets

Default

was

above Bonds due June 1st,

made in the sinking fund payments

has also been

default

the
1914, and, since January, 1914,

the payment of the interest on

made in

provided for the redemption of these Bonds.

'since

Total

made repeated

the above defaults occurred, we have

efforts,

the
sinking fund installments paid, but without

behalf of the owners of the Bonds, to have

and

interest
avail.

100,000 00

Specie (gold certificates)
Cash Items, viz.:
Due from the Federal Reserve Bank
of New York, less offsets
Other assets, viz.:
Accrued Interest entered on books at
close of business on above date

4,100,000 00

394,956 65

$64,966,808 26

LIABILITIES.

$2,000,000 00

Capital stock
Surplus:
Surplus fund
Undivided profits.

$12,000,000 00
3,071,367 62
15,071,367 62

Deposits:
Preferred as follows:

General Alvaro Obregon, who has been elected President

I
of the United States of

December

Mexico, and who will assume office

"as far

positary
deposits

Other

9,259,838 39
secured

1,182,853 76

by a pledge of assets

preferred, as follows:
Deposits subject to

Not

possible."

due as exexcutor, administrator,
guardian, receiver, trus¬
tee, committee or de¬

"will recognize

foreign debts," and that all its debts will be paid

all legal

$2,089,562 71

Savings Banks
Other deposits

is reported, however, to have publicly

1st,

declared that the new Mexican Government

State

York

New

Due

;

22,428,820 22

check

There

number of foreign loans of the

are a

Mexican Gov¬

which default has been made, as well as a large amount
other claims against it, which will have to be recognized

it,

legally

quired

witbln

which
be

re¬

thirty

days

trust

Due

the above Bonds should unite,

without delay, for the

the

all unpaid

with

same,

3,986,470 98

New York as Depositary,

Equitable Trust Company of
its office, 37 Wall

at
on

Street,

December 31st,

before

New
1920,

York,

its

penses,

Accrued
on

Agents,

22nd,

interest

above date_.__-

our

services

New

the engraved
|

depositing Bondholders for

charge to

under the

56,690 99
888,766 65

$64,966,808 26

Cities Service
Company

the New York Stock Exchange.

make

621,053 66

Total

Convertible Gold Debentures
Series

C, Seven Per Cent

Holders of the above Debentures may
on

convert

December 1, 1920, or on the first day of any

month thereafter, ten per centum

aggregate

will

entered

Estimated unearned dis¬

24-26 Pine Street.

Application will be made for the listing of
certificates

$211,022 00

counts

exchangeable for engraved bearer certificates.

Depositary,

ex¬

1920.

certificates of deposit will be issued by the

Temporary

taxes,

books at close of busi¬

Copies of this Agreement may be obtained from the Deposi¬
tary, or at our office,

for

subject to the terms of

Agreement, dated November

Bondholders'

The

47,006,673 99

total deposits

Other liabilities, viz.:

ness on

attached, with

coupons

Extend
Reserves

invite holders of the above mentioned Bonds to

proper

To that end,
deposit

protection of their interests.

effectual

and

that the holders of

consider it important

therefore

4,776,367 82

companies,

banks and bankers

3,282,760 11

Other certificates of de¬

posit

provided for by the Mexican Government.

and

payment of

cannot

certifi¬
deposits

the

unsecured, and guarantees given by

ernment,, secured and

deposits,

cates and other

Time,

(10%) of the

principal amount of Series C Deben¬
November 1,

owned by them respectively on

tures

Conversion must be requested by such
owners prior to
December 1, 1920, or prior to
the first day of any month thereafter, and upon
delivery by them on or before December 1,
1920, or on or before the first day of any month
thereafter, of the Debentures so desired to be
converted (properly endorsed, if registered) to
Henry L. Doherty & Company, Fiscal Agents,
such Debentures will be converted into Cities
Service Company Preferred and Common stocks
on the basis set forth
in said Debentures, cer¬
tificates for which stocks
will be issued and
transmitted
to
such
owners
in the amounts
1920.

Agreement.

York, November 22nd, 1920.

SPEYER

CADWALADER, WICKERSHAM & TAFT, Counsel.

& CO,

respectively due.

Henry L, Doherty & Company
Fiscal Agents Cities Service Company,
60 Wall Street, New York.
Dated November 17, 1920.

GENERAL ELECTRIC COMPANY.
GIVEN that of the
,

V\7E take pleasure in announcing that
W
the

undersigned

formed

have

partnership under the

name

Co¬

NOTICE IS HEREBY
unissued capital stock of

Company
at par to

business hours on Wednesday,

115

Cowley i & Co.

Broadway, New York

Telephones
to

transact

Rector

general

in stocks and bonds.

5150-1-2-3

PAUL

•-

THOS.

New York,

business

brokerage

November 22, 1920.

COWLEY

BRADY

General

December 8, 1920,

proportion to their holdings, one share for
five shares of the capital stock then out¬
standing.
Subscriptions for stock, upon warrants
issued by. the Transfer Agents for the purpose,
will be received at or before three o'clock P. M.
of January 20, 1921, and payment for such sub¬
scriptions must be made in four equal installments
on or before January
20, April 20, July 20 and
October 20, 1921; or full payment may be made,
at the stockholder's option, on or before Janu¬
ary 20, 1921.
Subscriptions will be received, and
certificates will be issued, for full shares only.
The stock transfer books will be closed at the
close of business hours on Wednesday, Decem¬
ber 8, 1920, and will remain closed until Monday,
December 20, 1920.
By order of the Board of Directors.
M. F. WESTOVER, Secretary.

Thos. H.

Electric
there will be offered for subscription
stockholders of record at he close of
the

eacn

Nov. 27 1920.]

THE

CHRONICLE

Sibftenbg

XXIX

iftaatttfa!

unTonTacific^railroad coT
A

dividend
Stock

mon

declared,
1921,

$2.50

this

per

has

this

company

payable

stockholders

Monday,

of record

the

Com¬

day been

January
3

TO THE

done

HOLDERS

Wednesday, December 1, 1920.
Stockholders
are

urgently

orders

with

who

have

requested

not

already

file dividend

undersigned, from whom blank
forms may be had
upon application.

FREDERIC V. 8. CROSBY, Treasurer.
120

$12,000,000

mailing

the

Broadway,

York,

New

First

Mortgage Four Per Cent. 50 Year Gold Bonds

DUE

Nov. 11, 1920.

JUNE

1955

OF THE

THE

CHESAPEAKE & OHIO RY. CO.
61 Broadway, New York, Nov. 19, 1920.

The Board of Directors has to-day declared a

DIVIDEND of TWO PER CENT upon the capi¬
tal stock of the

Company, payable December 31,
1920, to stockholders of record December 3, 1920.
Transfer books will not close.
Checks will be mailed to stockholders

addresses recorded

the

the books of the Company.

TREVVETT,

Secretary.

THE
HOCKING
VALLEY
RAILWAY
CO.
61 Broadway, New York, Nov. 18, 1920.
The Board of Directors has to-day declared a

DIVIDEND of TWO PER CENT upon the capi¬
tal stock of the Company,
payable December 31,
1920, to stockholders of record December 10,
1920.

Transfer books will not close.

Checks will be mailed to stockholders at the
addresses recorded on the books of the Company.

A. TREVVETT,

Secretary.

DIVIDEND

IMPERIAL OIL,

LIMITED.

Notice i$ hereby given that a dividend payable
in fifteen year 5M per cent. Gold Bonds of the
Dominion of Canada,
1919-1934, at the rate
per share of $1.50 at par of
to be adjusted in cash), has

said Bonds (fractions
been declared by the

Directors of Imperial Oil, Limited, and that same
will be
any

payable in respect of shares specified in
Share Warrant
of the Company
within

three days after Coupon Serial Number 6 of such
Share Warrant has been presented and delivered
at The

Royal Bank of Canada, Church Street Branch,
Toronto, Ontario, such presentation and delivery
day of Dec., 1920.
Payment to holders of shares of record and fully
paid up at the close of business on the 15th day
of
December, 1920,
(and whose
shares
are
represented by Share Certificates) will be made on
or after the 18th day of December, 1920.
The Books of the Company for the transfer of
to be made on or after the 18th

shares will be closed from the close of business on
the 15th day of December, 1920, to the close of

business

Notice has been received from the Chicago Great Western Railroad
Company, which owns all of the capital stock of the Mason City and Fort
Dodge Railroad Company, stating that interest on the bonds of the abovenamed issue has not been earned for several
years, that

during this period the
Chicago Great Western Railroad Company has advanced funds with which
to make up the
deficiency, that the Chicago Great Western Railroad Com¬
pany has determined that it will no longer make such advances and that as a

result of this decision the interest due

on the bonds of the above-named
December 1, 1920, will not be paid.
J
The undersigned have been asked and have
agreed to act as a Bond¬
holders Committee to represent and protect the interests of the holders of the

issue

above described bonds.

A Deposit Agreement under which The New York
Company will act as Depositary and the Illinois Trust and Savings
Bank as Sub-Depositary is in process of
preparation and copies thereof will
be furnished upon completion to those
applying to the office of either of
said depositaries.
Trust

The situation is

which requires prompt and concerted action by the
bondholders, who are therefore URGED TO DEPOSIT THEIR BONDS

together with the December 1st, 1920, and subsequent coupons attached with
The New York Trust Company, 26 Broad Street, New York
City, or The Illi¬
nois Trust & Savings Bank, Chicago, Illinois, under said
Deposit Agreement
in order that the Committee may act in their behalf.
Temporary Certificates of Deposit will be issued by the Depositary or
Sub-Depositary, exchangeable for engraved bearer certificates when ready
for

delivery.
New York

the 18th day of December, 1920.

City, November 23, 1920.
MORTIMER N.

BUCKNER, Chairman,
President, The New York Trust Company;

BYjORDER OF THE BOARD.
DIVIDEND

IMPERIAL OIL, LIMITED
Notice is hereby given that a dividend of
seventy-five cents (75c.) per share in Canadian
funds has been declared by the
Directors of
Imperial Oil, Limited, and that the same will be
payable in respect of shares specified in any share
warrant of the Company within three days after
the Coupon Serial Number FIVE of such share
warrant has
been
presented and delivered to
The Royal Bank or Canada, Toronto, Ontario
or at the office of Imperial Oil, Limited, Toronto,
Ontario, such presentation and delivery to be
made on or after the 30th day of November, 1920.
Payment to Shareholders of record and fully
paid up at the close of business on the twenty-third
day of November 1920 (and whose shares are
represented by Share Certificates) will be made
on or after the 30th day of November, 1920.
Shares subscribed

for

accordance

Company's circular of January
rank for the above dividend

12th,

jpro rata

the

with

1920,

wll

in the pro¬

portion which the amount paid up on such shares
from time to time bears to the full price at which
such shares were issued, viz.: seventy-five dollars

($75.00) per share, but no dividend will
paid by the Company to subscribers
shares shall have been fully paid for
Certificates issued therefor.
The books of the Company for the

be actually
until their
and Share

transfer of

shares will be closed from the close of business on

the 23rd day of November, 1920,

business

to the close of

the 30th day of November, 1920.
BY ORDER OF THE BOARD.

GENERAL

one

HUNTER

Blair and

MARSTON,
Company, Inc.;

FREDERICK H. ECKER,

Vice-President, Metropolitan Life Insurance Company;
EUGENE M. STEVENS,

Vice-President, The Illinois Trust and Savings Bank;
■

Bondholders Committee.
HERBERT W.

MORSE,

Secretary,
26 Broad

Street,
City.

New York
F. W. M.

CUTCHEON,
COOK,

ALFRED A.

Counsel.
THE NEW YORK TRUST
26 Broad

COMPANY,

Street,

New York City,

Depositary
THE ILLINOIS TRUST

AND

SAVINGS BANK,

Chicago, Illinois,'
Sub-Depositary.

ELECTRIC COMPANY.

Notice is hereby given that a dividend of two
dollars

share has been declared, payable in
cash on January 15, 1921, to stockholders of the
General Electric Company of record at the close
per

of business hours on December 8, 1920.
Also
that a dividend of two per cent has been de¬
clared, payable in stock of the Company at par
on January
15, 1921, to stockholders of record
at the close of business hours on December 8,

1920.
Stockholders

will

fractional shares arising

paid the

cash

value

'National Bank

Gommerce

out of such Stock divi¬

dend, based upon the market price of the stock
December 8, 1920, except as to those who

request scrip certificates for fractions.
By order of the Board of Directors.
M. F. WESTOVER, Secretary.

New York

OFFICE OF DAY & ZIMMERMANN, INC.
Engineers—Managers
611-613 Chestnut St., Phila., Pa.
The Board of Directors of the Eastern Shore
Gas & Electric Company has declared a dividend
of one and
three-auarters (1H)
per
cent,

outstanding Preferred Capital Stock of
Company, payable December 1, 1920, to
of record at the close of business
Nov. 26, 1920.
JOHN E. ZIMMERMANN, Treasurer.
the

the

stockholders

AMERICAN

BEET

SUGAR

CO.

PREFERRED STOCK: DIVIDEND NO. 86.
A

Regular

Quarterly

Dividend

(No.

86),

One and 50-100 Dollars ($1.50) per share, on the
Preferred Stock of this Company has been de¬

clared, payable on December 31st, 1920, to Pre¬
ferred Stockholders of record at the close of busi¬
ness on
December 11th, 1920.
Checks will be
mailed.
C. C. DUPRAT, Treasurer.

Capital, Surplus And Undivided Profits
Over

Fifty-five Million Dollars

[VOL. 111.

CHRONICLE

THE

xxz

ZHbfljtnb*

jftoottcia!

WINSLOW, LANIER ACO
59 CEDAR STREET

Exempt from All

NEW YORK

Federal Income Taxes

FOLLOWING COUPONS AND DIVI¬

THE

AT OUR BANKING

DENDS ARE PAYABLE

$216,000

HOUSE DURING THE MONTH OF DECEM¬

1920:

BER,

DECEMBER 1ST,

City of Sioux Falls, S. D.

Cleveland

Rd.

Pitts.

Rd.

Pitts.

Regular

Co.

Dividend

Stock

teed

Cleveland

5V2% School Dist. Bonds

1920.

Cincinnati Richmond & Ft. Wayne 7s.

Special

Co.

Guaran¬

\%%.

quarterly

Guarantee

Stock Div., quarterly

Betterment

1%.

Refunding Bonds.

Marion County, Indiana, 3H&

Portsmouth, Ohio, Street Improvement Bonds.

Due December 1, 1940

Dated December 1, 1920.

ber

payable in

1st,

Coupon

City.

New York

Randolph County, Indiana, Sinking Fund.

and Decem¬

Principal and semi-annual interest June 1st

DECEMBER 3RD,

DECEMBER 10TH,

Denominations of $1,000.

Bonds.

FINANCIAL STATEMENT

Net Debt

$857,000

DECEMBER 20TH,

1920.

Indiana, Refunding 3Hs.

Marion County,

DECEMBER 30TH,

$768,619

1920.

School Building Bonds.

Ind.,

Indianapolis,

$88,381

Fund

Less Sinking

DECEMBER 15TH,

—$32,021,757

(Incl. this issue)

Total Bonded Debt

1920.

Refunding 4s.

Marion County, Indiana,

Assessed Valuation for Taxation

1920.

Funding 3Ms.

Marion County, Indiana,

1920.

Refunding 4s.

Indianapolis, Indiana,

Population (U. S. Census 1920), 25,176

South

important city in
the richest agricultural
This District is co-extensive

and

largest

The American Sugar

most

Dakota, is located in one of

sections
with

the

Falls,

Sioux

Middle West.

the

the City

Refining Company
PREFERRED

of Sioux Falls.

These bonds
entire district,

are

and

COMMON

full and direct obligation of the

tax levy

On the Preferred Stock

has been provided which

three

and

one

dividend of

quarters

cent,

per

dividend

being the 116*1* consecutive

both principal and interest when due.

is sufficient to pay

DIVIDEND
DIVIDEND

thereon; pavable on the third day of

January 1921 to stockholders of record
the first day of December 192Q,

Subject to legal opinion of
Chapman, Cutler & Parker.

Messrs.

Yielding 5.35%

Price 101% and Interest

and

Stock

dividend of

three-quarters

thereon; pavable

descriptive circular C-148

Send for

Common

the

one

the third day of

January 1921 to stockholders of record
the

first

day of December 192Q

The Transfer Books will

R. M. GRANT &
11

Nassau St.,

Chicago

St. Louis
While

the

anteed,

above statements

believe

them

are

Sscretar»

OFFICE OF

United

The
Botton

closer

not

EDWIN T. GIBSON.

York

New

cent,

per

being the 117 *.h consecutive dividend

Gas

Improvement Co.

STREETS
Philadelphia, Sept. 8, 1920.

N. W. CORNER BROAD & ARCH

declared a quar¬
three-quarters

The Directors have this day

not guar¬
correct.

terly

dividend

and

one

cent (87 He. per share) on the Preferred
Stock of this Company, payable December IS,
per

1920, to holders of Preferred Stock of record at
the close of business November 30,

will

Checks

1920.
mailed.
I. W. MORRIS, Treasurer.

FRUIT COMPANY

UNITED

DIVIDEND NO.
A

Reorganization of

dividend

capital

dollars

four

this

stock

company

clared payable on Jan.

the

been

de¬

per

has

15. 1921, to stockholders

of record at the close of business Dec. 20, 1920.

Maxwell Motor Company,

Inc.

and

Attention
to

the

held

Dec.

company
ness

Chalmers Motor Corporation
the time to file the forms
of applications attached to Application Certificates for newstock in excess of the minimum rights of purchase conferred by
the Plan and Agreement of Reorganization, dated Septem¬
ber 1, 1920, and to make the initial payment of an amount
equal to $10 in respect of each share of Class A stock so applied
for, has been extended, without penalty, to the close of busi¬
ness on JANUARY 3, 1921,
It is anticipated that notice of
allotment of stock so applied for will be given on or about
January 6, 1921.
Dated, November 26, 1920.
NOTICE is hereby given that

LEO

WALTER P. CHRYSLER
Chairman

Vice-Chairman

BRADY

EVERITT

Committee

POOR

TINKER

RALPH

HARRY BRONNER

DAVISON

VAN VECHTEN

the

meeting

fact that,

stockholders

will be closed from the close of busi¬
JOHN W. DAMON. Treasurer.

THE

POWER

MONTANA

STOCK

PREFERRED

COMPANY.

DIVIDEND

11 Pine Street, New

York City.

stockholders of record at the close of business on
December* 14, 1920.

COMMON
A

STOCK

DIVIDEND

dividend of three-quarters

33.

mailed.
WALTER

DUTTON,

Treasurer.

DU. PONT DE NEMOURS & CO.
Wilmington, Del., November 24, 1920.

The Board of Directors has this day declared a

dividend of

4H% on the Common Stock of this

Company,

payable

December

15th,

1920,

stockholders of record at the close of business on
November

30th,

1920.

Said

dividend

as follows: two dollars per share in cash,
and two dollars and fifty cents per share in the

payable

Common

Capital Stock of this Company of the

also
this

Company, payable January 25th, 1921, to stock¬
holders of record at close of business on January
i

ALEXIS

NO.

of one per cent

(%%) on the Common Stock has been declared,
payable January 1,1921, to stockholders of record
entitled to share in such dividend, at the close of
business on December 14, 1920.
Checks will be

10th, 1921.
rfL

33.

NO.

quarterly dividend of one and threequarters per cent (13A%) on the Preferred Stock
has been declared, payable January 1, 1921, to
A regular

value of one hundred dollars per share:
dividend of 1H % on the Debenture Stock of

A. ROST, Secretary,

1920, the transfer books of the

par

owing

Nov. 17, 1920, until Dec. 9, 1920.

CHALMERS

HENRY V.

BISBEE

JAMES C.

HUGH

BUTZEL,

GEORGE W.

R. HARBECK

ELDON

directed

special

DUPONT,

Secretary

Not. 27 1920

]

THE
"

CHRONICLE

■

saaasaa±

ssa—g

Jfitumcfsl y-:.L

CITY OF AMSTERDAM
(HOLLAND)

•

15,000,000 Guilders—7% Internal Loan
Redeemable within 40 years

beginning March 1922 with annual drawings of 375,000 guilders.
dates May 1st and November 1st.

AMSTERDAM, the chief city in Holland, is

one

of the oldest and best known in Europe.

Its

population is 640,000 and its funded debt $76,053,540 (per capita $119).
revenue for 1921 is estimated at $20,000,000.
The per

Interest

Its annual

capita debt of Holland is $150 compared with $236 for United States, $825 for
for France.
The Bank of Netherlands gold reserve to circu¬

Great Britain and $1,114

lation

September 6, 1920, amounted to 63% compared with 40% for United States

aiid smaller ratios for other

leading countries.

Subject to withdrawal and change in price,

offer the above bonds at $315

per

1,000

guilder bond, to yield at current rate of exchange 6.67%, with possible additional income
from

appreciation in Dutch exchange towards its normal parity of 40.2c.
We

advised that non-resident holders of these

are

bonds

are

not

subject to present Dutch taxes

J. S. BACHE & CO.
Members New

NEW YORK
42

York Stock

Exchange

CHICAGO

108 So. La Salle St.

Broadway

We have obtained the above information

and statistical data from sources which

believe reliable, but do not guarantee its

accuracy.

JBtotoenti*
Swift & Company
Union Stock Yards,

Chicago

Dividend No. 140
Dividend of TWO DOLLARS ($2.00) per shareon
the capital Btock of Swift & Company, will be
paidon January 1,1921, to stockholders of record,
December 10,1920, as shown on the books of the

Company.

On account of annual meeting, transfer books

will be closed from Dec. 11, 1920, to Jan. 6, 1921,
both inclusive.

C. A. PEACOCK, Secretary

Electric

Paso

Company

Common Dividend No.

quarterly dividend is
payable Dec. 15 to Stockholders
$2.50

December

record

Stone & Webster, Inc.,

1920.

General

Manager

fWX

}

THE LIBERTY ;
NATIONAL BANK 1
of NEW? YORK :i
CAPITAL

$5,000,000.00

SURPLUS

5,000,000.00

UNDIVIDED PROFITS
TNE CONNECTICUT POWER
State

COMPANY

of Connecticut.

PREFERRED

OFFICERS

DIVIDEND NO. 31,

quarterly dividend of SI.50 per share has
been declared on the preferred capital stock of
The
Connecticut
Power
Company,
payable
December
1,
1920, to Stockholders of record
at the close of business November 20, 1920.
A

EDWARD

ROOT,

Treasurer.

CO.,

Managers,

HARVEY

The

GREENE

SIDNEY W. NOYES
Vice-President
MAURICE P. BAYARD
Vice-President

FREDERICK W. WALZ
Cashier

RIECKS

Vice-President

Boston, Mass.
semi-annual dividend of 5% upon the
stock of Lancaster Mills has been de¬

common

clared

GIBSON. President

ALEXANDER V. OSTROM
Vice-President

REID
Vice-President

DANIEL G.

CHARLES
Office

JLOCKWOOD,

2,500,000.00

payable December 1, 1920, at the office
Agents, the New England Trust

of the Transfer

Company, Boston, Mass., to all holders of record
at the close of business November 26, 1920,
LANCASTER MILLS,
J. Devereux Winslow, Treasurer.

ERNEST

FREDERIOKP.McGLYNN

8TAUFFEN, Jr.
Vice-President

JOSEPH

Assistant Cashier

BOWER
Vice-President

THEODORE C. HOVEY
Assistant Cashier

BENJAMIN E. SMYTHE
Vice-President
JAMES

BLAINE, Jr
Vice-President

JOSEPH S.

MAXWELL
Vice-President

CRUCIBLE STEEL COMPANY OF AMERICA.
Pittsburgh,

Pa.,

November

24,

1920.

DIVIDEND NO. 73.—A dividend of one and
three-quarters per cent (1% %) has been declared
of undivided profits
upon
the Preferred
Stock of this Company, payable December 31,

out

1920, to stockholders of record December 15,1920.
The transfer books will not be closed.
Checks will be mailed.
W. R. JORALEMON, Secretary.

GEORGE

MURNANE
Vice-President

DONALD

LOUIS W.

KNOWLES
Assistant Cashier

RAYMOND G. FORBES
Assistant Cashier
DANFORTH CARDOZO
Assistant Cashier
EDWARD J. WHALEN
Assistant Cashier
D.

DAVIS

Trust Officer

(Vol. Ill

CHRONICLE

THE

xxxii

jflmntial

Republic of France
6% National Loan of 1920
SUBSCRIPTIONS CLOSE NOVEMBER 30th

the option of the French Government
obligation of the Republic of France.

These bonds are redeemable at par at
after January

1, 1931, and are a direct

Under authority from

the French Government we are receiving

payable in dollars at the rate of exchange

subscriptions

fixed each day by the French Finance

Commission.

Price $60.80 per
The French character is

well known for its courage, intense

At least two-thirds of the

culturists and farmers,
Since

the

war

1,000 Franc Bond
industry and thrift.

agri¬

French population is composed of peasants,

nearly all proprietors of the soil.

ended France has shown marvelous

recuperative power.

destroyed in the war zone, 2,000,000 have already
been put into productive use.
A considerable percentage of the 300,000 houses
completely destroyed has been reconstructed and 3,000 kilometers of railway
which were destroyed or damaged have been restored.
3,500,000 kilometers of land

BROWN BROTHERS & CO.
59 Wall Street

CENTRALLEATHER CO.
A dividend of $1.75 per share on its preferred
stock has this day been declared by the Board of
Directors of this Company, payable January 3,

FREE FROM FEDERAL INCOME AND SURTAXES

to stockholders of record
1920.
H. W. HILL,
New York, Nov. 23. 1920.

1921,

$300,000.00

GILLETTE

WILSON COUNTY, KANSAS,
ROAD 5% BONDS

SAFETY

RAZOR COMPANY
to-day declared

The Board of Directors have

regular quarterly dividend of $2.50 per share
and an extra dividend of $1.00 per share, payable
December 1st, 1920, to stockholders or record
October 30th, 1920.
FRANK J. FAHEY, Treasurer.

1920.

Due $30,000 each year

July 1, 1920.

1921 to 1930 inclusive.*

DENOMINATION

$1,000.00

Principal and semi-annual interest payable at
State Treasurer's

Office, Topeka, Kansas.

GENERAL CHEMICAL COMPANY.
25 Broad St., New York, November 19,1920.
The regular quarterly dividend of one and
one-half per cent (114%) will be paid January 3,
1921, to Preferred Stockholders of record at
3:00 P. M.t December 17, 1920.
LANCASTER MORGAN, Treasurer.

FINANCIAL STATEMENT

$39,600,000.00

Assessed valuation
Total debt

These bonds
one

one

300,000.00

(this issue only)
Population.

are a

21,000

very

CINCINNATI
&

direct obligation of the entire County,

of the most substantial in the State, and are

of the

which

recommended

best municipal values originating throughout the

Secured Gold
Dm Deo.

Legality subject to approval by Attorneys, Chapman, Cutler &

GAS

ELECTRIC CO.

central west.

Parker of

Principal

and

Notee

1922

semi-annual

later*

payable in New York.

Chicago, and James G. Martin of Wichita.
OompUt$ description on recuert.

Orders solicited by
about November

wire at

our expense

for delivery of bonds

25th.

Price according to maturity, to yield 5.50 to 6% net.

Price to Yield TK%

BOND

DEPARTMENT

Fifth-Third
The Brown-Crummer Company

10,

Boston, October 15,
Dated

December
Treasurer.

WICHITA, KANSAS

National Bank
CINCINNATI, O.

Nov. 27

1920.]

THE

CHRONICLE

XXXIII

financial

The Fastest Selling Solid TnickT
in America

TALK to the about owners of
this country truck
economy—

even

economy

that

may not

of scientific endeavor
such

will always find them ready

and

willing

listen

to you.

creation of its

Truck

Solid
ago,

announced

Company

new

the

Tire, two months

owners

all

over

the

have learned their lesson.

was

towards which this company

had

working.

and the unscientific to their logical

tread

conclusions.

They know
than

ever

now

which

lies. And they
out to

way

are more

find it.

For those who overlooked the

first

announcement

Mono-Twin,

regarding the

reprint these few

It is built of grainleis rubber—

which

short time in

have the results of years

heat—act

non-skid tread—enable the
to wear

down uniformly with

necessity for regrooving.

It carries
two

heavier load than

single tires of half the section

width

—adding

to its

reducing the

cushioning
wear

truck and driver.

facts bearing on its economy:

tion—dissipate traction
as

how

and almost universally

Two months is

bars and depressions increase trac¬

qualities,

they would appreciate the results
been

country

economy
owners

would be interested.

What it didn't foresee

Chemically joined to its baseending base separation.j
Its combination of rubber cross¬

But truck

Mono-Twin

it expected that truck

quickly

ac¬

They have followed the unsound

When the United States Rub¬

ber

with

ceptance.

immediately apparent—and

you

meet

general and enthusiastic

exclusive U. S. creation—wow-

si)/////^.

Any U. S. Solid Truck Tire

representative'will be glad
you

to give

further information.

Talk

him.

He is

truck tire

expert.

And specify the U. S. Mono-Twin
when ordering your new truck.

States Tires
A Rubber Company
fifty-three
ctories

•
.

-flESHKB

The oldest and largest
Rubber Organization in the World

Tzvo hundred and

thirty-five Branches

THE

XXXIV

[VOL. 111.

CHRONICLE
JF(nant<al

NEW ISSUE

$25,000,000
Canadian Northern Railway Company
{Canadian National Railways)
20-Year 7% Sinking

Fund Gold Debenture Bonds

The Dominion of Canada
■v

Guarantees

'K;

Principal and Interest by Endorsement
Due December 1,

Dated December 1, 1920

Principal and interest

payable in gold in New York City, at
Canadian

Interest

and interest

In coupon form of $1,000, with provision for
Authorized and Issued $25,000,000. Callable as a whole at 10234
date thereafter on 30 days notice.

December 1, 1935, and on any interest

Central Union Trust Company of New

Sinking Fund of $500,000 per annum,

Agreement for the purchase
Bonds

are

not callable for

The Bonds are the

is owned by the

the Agency of the

Bank of Commerce.

payable June 1 and December 1.

registration of principal.

1940

York, Trustee

payable semi-annually, is provided by the Trust
below par, but the

of Bonds in the market if obtainable at or

the Sinking Fund.

direct obligation of the Canadian Northern

Railway Company, which

Government of the Dominion of Canada under authority
of the Canadian National Railways.

of Acts of the

Dominion Parliament and forms part

Price 100 and Interest

Wm. A. Read & Co.
The National

City Company

Blair & Co., Inc.

Bankers Trust

Company

The information

which

Orders have been

received in

•

Guaranty Company of New York
Lee, Higginson & Co.

Continental and Commercial
Trust & Savings Bank

contained in this advertisement has been obtained from sources
While not guaranteed it is accepted by us as reliable.

consider reliable.

excess

of the amount of Bonds available.

This advertisement appears as a matter of record.

Nov. 27 1920.]

THE

CHRONICLE

JIM

Jf manual

Nm Issue

$2,000,000

Ten-Year
Dated November 1,

We summarize

follows from

•

Business:

Gold Note*
Due November

•

Secured

1920

Bond

■

L 1930

letter signed by Mr. Frank T. Hulswitf President of the
Company:
*'
'*
%

••

■»

»•

■

Company operates 19 Public Utility properties (mainly electric and
gas) which it owns or controls, supplying without competition of like
service

prosperous

manufacturing and agricultural communities,

located in the heart of the Middle West.

Security:

These Notes will be the direct obligation of the
Company and will be
by First and Refunding Mortgage 5% Bonds of the

secured

Company,

due June 1,

1932, in the ratio of 133 1-3% of Bonds to each 100% of
Notes outstanding, or by cash
equal to the face amount of the Notes.

Earnings:

Earnings available for interest charges
gage

This
Net
*

;

General:

5% Bonds and Bond Secured

First and Refunding Mort¬

Notes

outstanding (including
issue) exceed 2.78 times the annual requirements. Consolidated
Earnings for the year ended September 30, 1920, exceed 1.89

times the

sum of all prior
charges and interest on First and Fefunding
Mortgage 5% Bonds and Bond Secured Notes, including this issue.

Conditions in all the territories served indicate continued expansion of
business, for which the Company is well prepared, by having ample
central station

capacity.

The present management has been identified

with the properties since their

inception. The Company has been
highly commended by public service commissions when ordering
increases in rates.
All

legal matters in connection with the issue
Smith & Tweed of New York.

of these Notes will be

Messrs. Barrow, Wade, Guthrie &

The above Notes

are

97 and

passed

upon

by Messrs. Humes, Buck,

The accounts of the
company are audited annually

Company, Chartered Accountants.

offered when,

and if issued and received by

us at

interest, to yield about 8.45%

Bonbright & Company
Incorporated
25 Nassau Street

The

above

information, while

not

New York

guaranteed, has

been obtained from

sources

believe

accurate.

[VOL. 111.

CHRONICLE

THE

XXXVI

jflnantial

-I'''

,^,/VV^VVVVVVVVVVVVVVVVVVVVV'

VW^A

Trust Advertising

Tribune

In The Chicago
of

The advertising manager

(the

of the largest trust and

October, 1920, date
says "in
regard to trust advertising which we
bank) have been using:—"
under

savings banks in Chicago,
line,

one

■/.

■

:\v
vi'
•••

-.i V

■

"Permit

that for

say

particular form of bank ad¬

this

Tribune
much the best medium that

vertising I consider The
very
we

have

among

use

the Chicago papers.

very

small amount of

of the other dailies
advertising our trust business.
in

any

That

the

value

space

for

best

place

answer

on your

of the

medium."

secured by the
department of that bank during the conduct of
this advertising campaign, the trust department said that
53% of all the business obtained from all sources came,
either directly or indirectly, through advertising in The

Commenting

the volume of business

trust

Chicago Tribune.
The Chicago Tribune
all the other Chicago

advertising than
Daily newspapers combined.
carries

trust