Full text of Commercial and Financial Chronicle : October 13, 1900 : Bankers' and Trust Supplement, Vol. 71, No. 1842

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B A N K E R S ’M d T R U S T
SUPPLEMENT
TO

THE

C ommercial & F inancial ^ hrowicle .
[Entered according to Act of Congress in the year 1900 by W illiam B. Dana Company, in office of Librarian of Congress, Washington, D. C.]

VOL. 71.

NEW YORK, OCTOBER 13, 1900.

NO. 1842.

cial policy, which, in the judgment of business men,
means a complete overthrow of all the conditions
upon which the prosperity of the country depends,
The Co m m ercial and F in a n c ia l Ch r o n ic l e is a weekly
is a threat which exercises an important influence
newspaper of 64 pages, published in time for the earliest mail
every Saturday morning, with the latest news by telegraph and
upon all departments of trade and industry.
cable from its own correspondents relating to the various mat­
While this uncertainty lasts enterprise will be
ters within its scope.
The Ch r o n ic l e comprises a number of Supplements, issued
held in restraint and undertakings of every descrip­
periodically, and which form exceedingly valuable publications
tion will be held in abeyance. A ll this, too, while
in themselves.
T h e I n vestors ' S u ppl e m e n t , issued q u a rte rly , is fu rn ish ed
confidence in the triumph of sound finance is very
without extra charge to every subscriber of th e C h r o n ic l e .
strong. But for this under-stratum of belief in the
T h e S tate and Cit y S u p p l e m e n t , issued semi-annually, is
also furnished without extra charge to every subscriber of the
defeat of the free silver candidate, the present wait­
Ch r o n ic l e .
ing attitude of the business community would have
T h e Q uotation S u p p l e m e n t , issued monthly, is likewise fur­
nished without extra charge to every subscriber of the Ch r on ­
been impossible; instead of apathy and a disposition
ic l e .
to rely upon the intelligence of voters, a wild scram­
T h e S tr e et R ailw ay S u p p l e m e n t , issued sem i-annually, is
also fu rn ish e d without extra charge to every a n n u a l su bscriber
ble for shelter and safety in the face of a disastrous
of th e Co m m ercial and F in a n c ia l Ch r o n ic l e .
financial storm would have reflected the fears of all
Besides these Supplements, others are issued from time to
time like the present B a n k er s ' and T r u st S u p p l e m e n t .
who have property at stake, and who regard the
Terms for the C h r o n ic l e , including all the Supplements, are
preservation
of the gold standard of fundamental
Ten Dollars within the United States and Thirteen Dollars
(which includes postage) in Europe.
importance. Under the circumstances, the calm re­
liance of the leaders in commercial and financial af­
W I L L I A M B. D A N A C O M P A N Y , PUBLISHER?,
fairs upon the common sense of the people, who are
P in e S t ., c o r n e r P e a r l S t ., N t w Y o r k .
to decide this weighty question within a few weeks,
is reassuring as well as gratifying. So long, how­
IN D E X T O A D V E R T ISE M E N T S.
ever, as even a faint doubt remains, we are not likely
A complete index to the advertisements appear­
to witness a return to the activity and vigor dis­
ing in the present issue of the Bankers’ and Trust played in all branches of industry and trade during
Supplement will be found on page 38.
the three years of 1897 to 1899, inclusive. The
“ paramount issue ” with business men, of whatever
politics, is the money question, and upon its settle­
TH E B U S IN E S S OUTLOOK.
ment hangs the near future of the vast interests in­
By O. D A shley , Présider t Wabash Railroad.
volved.
Whoever undertakes a forecast of business upon
Eliminating this restrictive influence from the
the eve of a Presidential election, without a liberal discussion we find all of the conditions upon which
reservation to cover the contingencies, would as­ business prosperity depends highly favorable to its
sume a power of foresight far beyond ordinary hu­ indefinite continuance. Another phenomenal ex­
man intelligence. This renders it more than usual­ cess of merchandise exports over imports given in
ly difficult to write upon the subject satisfactorily, the statistics of the fiscal year ending June 30, 1900,
if the views of the writer are based upon the per­ carries the surplus of four years to the astonish­
manence of an administrative policy essential to ing aggregate of $1,976,000,000.
Results which
business prosperity. A vast majority of the people carry such convincing proofs of expanding trade
interested in manufacturing industry and trade re­ and the rapid development of our agricultural and
gard the permanency of the gold standard to be mineral resources, as well as progress in manufac­
vital to the continuance of the present favorable con­ turing industry, have attracted general attention,
ditions, and although the belief is strong in the re- and have been the theme of economical writers to1
election of President McKinley, the bare possibil­ such an extent that further reference to the subject
ity of the success of a candidate pledged to a finan­ here would be simply repetition. The evidence is




Cbe Chronicle.

28

BA N KERS’

C O N V E N T IO N .

conclusive enough to establish the fact that this
country has become a creditor nation, and, so far as
human foresight can determine the matter, the tide
is still flowing in our favor. To reach this position
it has been necessary to cancel a very large foreign
indebtedness, but all of the securities which could be
returned have been absorbed without difficulty, and
the money market has offered capital to Great Brit­
ain, Germany and Sweden upon advantageous
terms. This change in the financial situation, which
converts borrowers into lenders, is with nations, as
with individuals, an evidence of prosperity of the
most convincing character. Power to hold this ad­
vantageous position is perceptible in all of the indica­
tions of the near future; the demand for our prod­
ucts of the soil is steadily maintained and a possible
market for our abundant supplies of bituminous
coal is suggested by its growing scarcity in Europe,
or in more expensive mining.
Crop prospects must, upon the whole, be con­
sidered satisfactory. The cotton product, accord­
ing to the careful report of the Commercial and
Financial Chronicle, for the year ending August
3 1, 1900, showed a reduction of 1,795,824 bales, as
compared with the amount marketed the preceding
year, but the advanced market price more than com­
pensated for the loss in the product. The crop now
being harvested cannot yet be definitely estimated,
but is evidently to be marketed at still higher prices.
In the cereals, the wheat harvest of 1900 may show
some deficiency, but corn promises about as large, if
not a larger crop than in 1899, and while oats show
some decrease, as compared with the abnormal crop
o f last year, the yield will still be large. The agri­
cultural resources of the country are, therefore, sub­
stantially favorable to a continuance of business
prosperity, the deficiency in quantity being offset
by the increased value of the aggregate product.
The possible changes in the market during the year
can hardly affect the general result.
One conspicuous cause of the diminished vol­
ume of trade, which became quite perceptible dur­
ing the first six months of the current year, can be
found in the rapid advance in the cost of manufac­
tures of every description. A s soon as the impera­
tive wants of consumers had been satisfied orders
began to diminish, and it became evident that buy­
ers would not follow the exaggerated values sought
to be established. Accumulating stocks in the
hands of the manufacturers soon produced the usual
effect, and compelled a reduction to meet the views
o f buyers. This change has been accomplished in
many branches of industry, and the country is now
beginning to feel its benefits in the renewal of or­
ders in sufficient volume to revive the drooping
agencies of employment. In the manufactures of
iron and steel this improvement in the situation is
especially evident, except, perhaps, in steel rails
which have held steadily at $35.00 per ton in con­
sequence of outstanding guarantees on contracts for
delivery during the year. A reduction in the price
o f this important item of railway construction and
maintenance has just been decided upon. This hav­
ing been accomplished, orders which have been




withheld on account of the high cost, will undoubt­
edly increase, and the rolling mills will be fully oc­
cupied during the autumn, and winter. This disposi­
tion to meet the market, which must extend through
all branches of manufacture, will remove a formi­
dable obstacle to industrial activity.
The industrial organizations, to which attention
was so generally directed in 1899, on account of exaggerated capitalization and rapidly increasing num­
bers, have been checked in growth, and for the time
have ceased to be a disturbing factor in the business
situation. Promoters and underwriters have been
fully occupied in taking care of the interests they
have already undertaken to guard. The induce­
ments, in a speculative point of view, to organize
and float such concerns, no longer exist, and the
danger of an unhealthy inflation in these industrial
combinations has correspondingly diminished. Po­
litical quacks have now turned their attention to the
subject of “ Trusts,” and propose remedies for the
epidemic which are quite destitute of common sense,
and which would involve the country in widespread
confusion, if not serious disaster. These indus­
trial combinations originated in Great Britain,
where they have been extensively and successfully
introduced, while in Germany they have beeif a
prominent feature for several years. In Berlin the
decline in industrial stocks has been greater than in
New York, and, at one time, recently, the stock
exchange of that city seemed to be upon the verge
of a financial panic, which, fortunately, has been
averted. A ll this proves that combinations of va­
rious industries and trading establishments have
been adopted by intelligent business men as an im­
provement upon the old method, under which great
economies could be effected, more capital secured
and the products distributed to consumers at a lower
cost. This is in harmony with practical common
sense; but the speculative temptations offered in
over-capitalization have seriously interfered with
the original design of such combinations. The mere
creation of fictitious capital implied the necessity of
larger profits to furnish dividends upon paper valu­
ations, and thus destroyed the fundamental idea of
serving the public at lower prices.
The true remedy has already been suggested—
that is, in regulation and publicity. Legislation
may provide against fictitious capital and require
periodical statements of business, and thus protect
the people from speculative deceptions; but any at­
tempt to prevent the consolidation or union of busi­
ness interests, whether in mining, manufacture, or
trade, will not only be ineffective but clearly against
the public good.
The arguments against these combinations upon
the score of a reduction in the number of employees
have no force. I f consolidations can lessen the cost
of production, they will strengthen the employing
capacity and thus benefit a larger number.
The
same opposition has been offered to all improve­
ments in machinery, which displaced work by hand,
and in every instance the result of the new method
has been to enlarge the industry or trade and to
increase the working force. Changes may be nec-

BA N KERS’

C O N V E N T IO N .

essary in the nature of the employment, but if more
economical product can be secured the industry will
grow in the ratio of the economy, and the demand
for the product will call for a corresponding in­
crease in the number of employees. This is the nat­
ural result of improvement in every department of
business, confirmed by numerous precedents.
I f confidence is not disturbed by the election of
a President pledged to the overthrow of the gold
standard, there is nothing to apprehend in the near
future of the money market. The position of this
country as a creditor nation is in itself a strong
guaranty of financial tranquillity. The tendency to
higher rates of interest is quite evident, but this is
simply an argument in favor of the more profitable
employment of our surplus capital. Our money
market for a long time has occupied an anomalous
position with a surfeit of capital seeking investment,
while borrowers have been diminishing, and the
cancellation, instead of the creation of debt, has
been the result of the accumulation of wealth. The
successful organization of so many industrial com­
panies and the sale of their securities were the nat­
ural consequences of this congestion of capital. An
immense amount of idle funds in New York, the
money center of the country, floating in call loans
at from one to one and a half per cent, per annum—
the lowest market rate quoted in the world during
1900— indicated an unhealthy plethora of capital,
and it followed naturally that it should seek more
profitable use in foreign lands. Hence much of the
surplus owned here has been loaned in London and
Berlin, and will continue to flow to those markets
so long as it will command higher rates of interest,
either to be loaned there on call, or to be invested in
the Government bonds of Great Britain or Ger­
many. There is nothing to create alarm in this em­
ployment of money abroad, even if gold is exported
in the process of transferring capital, which always
seeks the best market for its employment. On the
other hand, this control of money and securities in
Europe is a guaranty against any real stringency in
the home market. An advance in rates here per­
manent enough and sufficiently remunerative to in­
vite capital here, would quickly turn its flow in this
direction, always subject, however, to the mainte­
nance of the gold standard.
In many respects the leading features of the
business situation resemble those of 1899.
The
promises are equally favorable, and the conditions
in some respects better; in the further accumula­
tion of a trade balance and in the wholesome check
given to speculative inflation; but this year politics
keep the country in suspense, and an “ I F ” in capi­
tal letters is held in parenthesis by business men
until the November election.
The unsolved problems presented by the Chinese
situation and the recent strike at the anthracite
coal mines are disturbing influences, but have not
been considered as more than temporary in their
duration and effect. Our exports to China have
been interrupted, and much inconvenience may be
caused by the shortage in the supply of anthracite
coal. These obstacles are serious while they are




29

operative, but experience teaches that settlement of
such troubles must soon follow; and, therefore, we
attach less importance to them as adverse influences
than, perhaps, the events and circumstances de­
mand ; but the troubles come within the range of in­
telligent diplomacy and compromise, and the ap­
plication of such available remedies is consequently
anticipated.
Inland transportation, which includes the great
railway interest of the country, is so closely asso­
ciated with and dependent upon general business
prosperity that continuance of the one implies equal­
ly good results to the other. Thus far, railway
earnings have been quite satisfactory, although some
iregularity is shown in the weekly and monthly re­
turns. The traffic, upon the whole, since June 30,
exceeds that of 1899— an unexpected but gratifying
result. A corresponding gain through the fiscal
year cannot be anticipated, taking into consideration
the phenomenal increase of the previous year over
the traffic of 1898.
A condensed view of the business situation, sug­
gested by the indications visible to human intelli­
gence, presents very favorable prospects, subject,
however, to check and, perhaps, reversal if the
monetary system of the country is to be attacked by
a free silver administration. Seldom, if ever, have
the future conditions of finance, industry and trade
depended so completely upon the will of the people.
Should this be in favor of a policy, which, carried
to its openly avowed and logical conclusion, means
financial and commercial disaster, all of the signs
which now inspire hopes of commercial progress
and prosperity will have proved fallacious.
The
people of the United States will themselves deter­
mine within a few weeks whether prosperity shall
continue, or whether it shall be interrupted by fear
and distrust in the business community.

TH E N E W F IN A N C IA L LA W AND B A N K
CIRCU LATIO N .
The fact that the increase of bank-note circula­
tion as the result of the refunding law seems to have
for the time being practically reached its limit,
makes the occasion appropriate for reviewing the
effect of the law upon that feature of our national
system. It should be noted at the outset that not
all of the changes in the banking capital and bank­
note circulation during the last six months can
properly be attributed to the refunding law. There
would have been a considerable increase in the num­
ber of institutions in the country in any event, and
perhaps a slight increase in the bank-note circula­
tion. The formation of new banks, while almost
arrested in the years following the panic of 1893
with the result of a net decrease in the total number
by reason of failures and liquidations, reached 44
in the year ending October 3 1, 1897, 56 in 1898 and
78 in 1899. The liquidations more than offset the
new incorporations until 1899, when there was a net
gain of two. The record for 1900 will be of a very
different character, partly as the result of increased
business activity, but mainly as the direct influence
of the new law.

30

BA N KERS’

The provisions of the new law operated in two
ways to make the national banking, system attract­
ive to bankers and investors who had not before
seen fit to enter the system. The first of these in­
ducements was the reduction of the minimum cap­
ital required from $50,000 to $25,000. This of it­
self accounts for the creation of many new banks in
small places and for the entry of certain State banks
into the national system. The State banks must
have a motive for preferring the national to the
State system. This motive might be found either
in the advantages derived from circulation or sim­
ply from the reputation attaching to membership in
the national system. Both influences have undoubt­
edly been potent in attracting the old State banks
and leading to the creation of new banks under na­
tional law rather than under State law. The fact
that the minimum of bonds required has been de­
posited in most cases seems to indicate, however, that
the standing given to a bank under the national sys­
tem has been an important inducement with some of
those who could not have found their way into the
system under the old requirement as to minimum
capital. Other State banks, which originally con­
templated entrance into the national system, have
evidently reconsidered their purpose.
The number of letters received by the Comp­
troller from different banks and individuals pro­
posing to form banks after the passage of the new
law on March 14, ran as high as 619 on April 16
last, and even higher after that date. Of these 619
informal applications 307 were for proposed new
banks and 3 12 for the conversion of State and pri­
vate banks into national institutions. Only a lim­
ited proportion of either class have materialized in
the actual incorporation of new banks. Some of the
applications for new banks probably never got fur­
ther than the stage of consultation among a few
capitalists. The failure of some of the State and
private banks to carry out the programme of conver­
sion into national banks is more significant, and is
apparently due to a large extent to the high price of
the new bonds and the small profit likely to be de­
rived from circulation.
The number of new banks actually organized,
from March 14 to September 28, 1900, was 323, of
which 231 were small banks with capital of less than
$50,000 each, which could not have been legally or­
ganized under the old law. The number of volun­
tary liquidations during this time was 24 and fail­
ures two, reducing the net number of new organiza­
tions to 297. This is in remarkable contrast with
the falling off during the last six years, which car­
ried the number of going banks down from 3,799
on January 1, 1893, to 3,590 on January 1, 1899.
The number of going banks has now risen to about
3,900, and will not be far from 4,000 within a year
after the enactment of the new law. The figures
given above are for banks actually organized. There
have been applications formally approved by the
Comptroller from March 14 to September 28, num­
bering 481, or 158 more than the charters actually
granted. There are 134 applications still pending
for small banks and 24 for larger banks. The ta­
ble below gives the national banks actually organ­




C O N V E N T IO N .
ized as a safer basis of results than the applications,
but it is interesting to examine the figures of ap­
proved applications in order to determine the dis­
tribution of the new banks which are in process o f
formation.
The applications for small banks have been 365,
with proposed capital of $9,405,000. O f these only
7 4 , with capital of $1,908,000, have been proposed
in Southern States, of which Texas has called for
3 5 , with combined capital of $908,000. It is a
rather striking fact that so prosperous a State as
Georgia has applied for only one small national
banking charter under the new law, evidently be­
cause the State law is so advantageous to local
banking. There have been four applications for
large banks from the State, some representing the
conversion of State banks. The strip of States
west of the Mississippi, between the Southern States
and the mountain States, shows 142 new applications
with proposed capital of $3,660,000.
The States
included in the group are Iowa, with 44 proposed
small banks; Minnesota, 2 3 ; the Dakotas, 14 ; Ne­
braska, 19 ; Kansas, 12 ; Oklahoma, 18, and Indian
Territory, 12. The three big central States of Ohio,
Indiana and Illinois have 64 applications pending or
granted with combined capital of $1,650,000. The
three groups of States mentioned represent 280 ap­
proved applications with a combined capital of $7,218,000. These figures do not correspond exactly
with the charters granted, but indicate the number
which will be granted within a few weeks or months.
The following table shows the charters actually
granted by States:
14 TO SE P T E M B E R 20, 1900.
Capital
Capital
Num. less than Num- $50,000
or over.
Bonds.
ber. $50,000. ber.
1
$100,000
$35,000
$25,000
New Hampshire.. ___ 1
1
50,000
32,500'
50,000
Connecticut........ ___ 2
610,000
277,250
160,000
5
New York............ ___ 6
1
100,000
135,000
74,500
New Jersey........ ___ 5
15
1,900,000
724,550
532,000
Pennsylvania . .. ___ 20
18,000
25,000
.... 1
2
170,000
75,000
64,000
M aryland............ ___3
2
100,000
101,000
125,000
Virginia .............. ___ 5
4
55,000
250,000
92,500
West Virginia.. . ___ 2
50,000
16,250
North Carolina. . ___ 2
1
60,000
20,000
South Carolina. .
3
600,000
112,500
Georgia ..............
___ 1
30,000
7,500
1
15^000
50,000
Alabama ............
1
50,000
12,500
Louisiana ..........
598,000
9
535,000
335,350
Texas .................. ___ 22
75,000
4
1,845,000
285,050
Kentucky ............ ___ 3
50,000
1
50,000
43,750
Tennessee .......... ___ 2
345,000
7
900,000
287,450
O h io .................... ___ 13
4
245,000
156,000
250,000
I n d ia n a .............. ___ 9
545,000
4
500,750
400,000
Illin o is................ ___ 20
___ 3
85,000
22,250
350,000
2
100,000 171,000
Minnesota .......... ___14
75,000
6
Wisconsin .......... ___ 3
700,000
210,200
720,000
335,500
3
.150,000
Iowa .................... ___ 27
___ 3
85,000
47,000
200,000
North D akota. . . ___ 8
85,250
South D ak o ta... ___ 3
75,000
31,250
___ 12
325,000
111,250
2
265,000
169,250
Kansas . . . . . . . . . ___ 10
150,000
Wyoming .......... ___ 1
25,000
2
56,250
100,000
30,000
4
300,000
122,500
Colorado ............ ___ 1
25,000
10,000
New Mexico........ ___ 1
375,000
1
178,050
Oklahoma .......... ___ 15
50,000
Indian Territory.___ 11
300,000
121,300
3
150,000
25,000
10,000
W ashington........ ___ 1
2
25,000
72,500
California .......... ___ 1
150,000
1
50,000
Hawaii ..............
500,000
NA TIO N A L B A N K S OBGANIZED, M AB CH

Totals ........ . . .231 $6,105,000

92 $10,370,000 $5,014,950

The national banks have been the principal con­
tributors to the success of the new two per cent.

BA N KERS’

C O N V E N T IO N .

loan, and very few of the new bonds are in private
hands. The total progress of the refunding opera­
tions up to Friday, September 28, is shown in the
following table:
R E FU N D IN G OPER A TIO N S TO SE P T E M B E R

Outstanding
December
Class of bonds.
31,1899.
Three per cents.............. $198,679,000
Pour per cents............. 545,366,550
Five per cents............... 95,009,700
Totals ...................$839,055,250

28, 1900.

Amount
Refunded.
$76,589,500
203,830,450
53,981,400

Differences paid.
$4,328,772
23,636,274
5,347,655

$334,401,350 $33,312,701

When it is considered that the national banks
owned at the close of September $262,937,500 of
the new bonds as security for circulation, and $45,986,400 as security for deposits of public money in
the banks, it is evident that little more than $25,000,000 of the new bonds have been retained by pri­
vate investors. The boast that the United States
can float a two per cent, bond at par is founded upon
the use of these bonds as security for bank-note cir­
culation, and is supported in this particular case by
the attachment of special privileges to the use of
these bonds. These privileges have operated as a
stimulus to the increase of the bank-note circulation,
in the face of great delay in obtaining notes after
the deposit of bonds. The following table illus­
trates the upward movement of the bonds deposited
and the circulation based on bonds since the begin­
ning of the year, when the effects of the new law
began to be discounted:
Bonds
to secure
1900.
circulation.
January 1 ...................... $234,484,570
February 1..................... 235,830,170
March 1 ......................... 240,172,270
April 1 ........................... 256,001,480
May 1 ............................. 268,408,240
June 1...................
276,829,990
July 1............................. 284,387,040
August 1......................... 294,948,930
September 1................... 295,790,380
October 1 ....................... 296,672,630

Lawful money
Circulaon deposit
tion based
to redeem
on bonds.
circulation.
$209,759,985 $36,435,538
210,166,789 36,820,404
213,610,029 35,824,849
233,284,230 37,668,838
246,067,162 39,211,164
263,089,117 37,399,772
274,115,552 35,444,167
286,447,434 33,567,922
290,641,356 33,582,454
294,222,979
34,112,994.

These figures show a net increase in the total
circulation from $246,195,523 on January 1, 1900,
to $328,335,973 on September 29. The banks.are
entitled to an additional sum of about $2,400,000 in
circulation, representing the difference between the
bonds pledged and the circulation based on bonds.
This margin may never be quite covered, because
o f the policy of a few city banks in carrying the
bonds required by law without taking out the cir­
culation upon them. There are only a few .of these
cases, and the total circulation to which the banks
are now entitled, and which they are soon likely to
have, may be put at about $330,000,000, or an in­
crease of $84,000,000 within the present year. As
already suggested, this expansion has for the pres­
ent nearly reached its limit. A few additional is­
sues of bonds will undoubtedly occur from time to
time, especially from new banks, but they are not
likely to carry the total bank-note circulation above
$340,000,000 within another period of six months.
This prediction is supported by the fact that the in­
crease in deposits of bonds to secure circulation dur­
ing the two months of August and September was
less than $1,200,000.




31

There was some fear while the refunding bill
was pending that still larger issues of bank-notes
would result from its operation. Few believed that
an amount of bonds equal to the amount covered by
the refunding law ($839,146,490) would be ex­
changed into the new two per cents, or would be­
come the basis of bank-note circulation.
The na­
tional banks already had on deposit with the Treas­
ury as security for circulation at the close of Feb­
ruary, 1900, $203,493,270 of the three classes of
bonds available for refunding, in addition to about
$77,000,000 of the same classes of bonds pledged to
secure deposits of public money. The deduction of
these from the total amount available for refunding
left a margin of possible increase in bonds avail­
able for circulation amounting to $550,000,000. It
was obvious that many of these bonds could not be
drawn out of the hands of private investors except
at prices which would make them unprofitable as
the basis for bank-note circulation. Conservative
estimates put the amount likely to be refunded in the
course of a year at $350,000,000 to $400,000,000.
These estimates put the increase in bank-note cir­
culation, including the allowance to par, at $80,000,000 to $100,000,000. While based upon gen­
eral reasoning, they were confirmed to a remarkable
degree by the responses to the inquiries sent to all
national banks by Mr. William C. Cornwell, of B u f­
falo:
It is a tribute to the efficiency of the refunding
law in driving the banks to substitute the new two
per cents for their old bonds that very nearly 90 per
cent, of all the bonds now pledged to secure circu­
lation are the new two per cents. The fact that the
difference in the tax on circulation, when secured
by the new bonds, is one of the vital elements of
the situation is shown by the fact that the exchanges
have been much less rapid in the case of the bonds
pledged to secured deposits of public money in the
banks. The ratio of the new two per cents to the
total in this case is that of $45,986,400 to $87,655,680, or in the neighborhood of 53 per cent.
The
amount of the new two per cent, bonds now pledged
‘ to secure circulation is larger by about $16,700,000
than the whole amount of bonds of all classes
pledged to secure deposits of public money in the
present year. About $33,700,000 of old bonds re­
main in the Treasury as the guarantee of circula­
tion, but all of the remainder of $234,484,57° on de­
posit at the beginning of the year have given place
to the new two per cents, and additional circula­
tion has been sought by the deposit of about $62,000,000 in the new two per cents. It is a source of
some surprise to the Treasury that even so small an
amount as $23,000,000 of bonds available for refund­
ing remain on deposit as the guarantee for circula­
tion. They have been coming to the Treasury very
slowly of late for conversion, but might be hastened
by an announcement that the refunding offer was to
be suspended.
The following table shows the changes in the
classes of bonds pledged to secure circulation and
the upward movement of the deposits of the new
two per cents on several different dates :

32

BA N KERS’

C O N V E N T IO N .

BONDS TO SEC U R E CIR C U LA TIO N .

December
April
September
Class of bonds.
30,1899.
30,1900.
29; 1900.
New two per c e n ts ... ................... $202,783,650 $262,937,500
Fours of 1 9 0 7 ...........$127,851,550
23,347,400
13,842,950
Threes .................... '..
52,126,820
13,422,440
7,857,880
Fives ........................... 15,743,100
2,371,000
1,373,000
9,617,850
8,810,350
Fours of 1925___. . . 17,815,750
Extended twos........
20,947,350
16,862,900
1,850,950
Totals ................ $234,484,570

$268,405,240

$296,672,630

This table shows in a striking manner both the
increase in the total bond deposits and the rapid sub­
stitution of the new two per cents for all other
classes of bonds. The date of April 30, only about
six weeks after the passage of the new law, is
chosen for the second column, in order to show how
rapidly the substitution of the new two per cents
went forward. These six weeks witnessed a larger
net increase in the bonds on deposit than the entire
five months which followed and witnessed the sub­
stitution of the new bonds for the old in the ratio
of nearly four-fifths of all the substitutions which
have occurred under the law.

CO N TIN U ED GROW TH OF TH E N EW YO R K
T R U ST CO M PA N IES .*
The check in the expansion of the business of
the trust companies of New York State, noted at
the time of the filing of their returns for the 1st of
January, 1900, proves to have been only tempdrary.
In the period that has elapsed since then growth has
been resumed and in a more striking' way than be­
fore. While the totals have been of large propor­
tions for some time they are pow assuming mar­
velous dimensions. Indeed, the growth and expan­
sion which have occurred within a few years con­
stitute one of the most noteworthy developments of
recent times.
The trust companies are required to make semi­
annual returns for January 1 and Ju ly 1 to the Su­
perintendent of Banking at Albany. From advance
copies of these returns for Ju ly 1, 1900, we were
able to give in the C h r o n ic l e of Ju ly 28 the fig­
ures for all the trust companies in this borough and
Brooklyn in comparison with 'the corresponding fig­
ures at the two previous semi-annual dates. We de­
voted five full pages to a presentation of these ex­
hibits—pages 186 to 19 1. In the present article,
however, we shall not confine ourselves to the com­
panies in these two boroughs, but shall deal with
the results for the entire State.
We have referred to the check in the upward
movement which was disclosed in the returns for
the first of the current year. This was practically
the only interruption that had occurred since the
operations of these institutions began to attract at­
tention because of their rapid expansion. The rea­
son for the falling off was explained in the C h r o n ­
i c l e of February 17.
It was the result of perfectly
obvious causes, mainly the monetary stringency
which prevailed and which made it possible for de­
positors to earn a better return on their money than
what they were receiving from the trust companies.
It will be remembered that the deposits of the New
•Reprinted from the
0 / August 4, 1900.




C o m m e r c ia l a n d F in a n c ia l C h r o n ic l e

York City Clearing House banks were also heavily
drawn down during the same period. The decrease
in the case of the trust companies was emphasized
because it was coincident with the opening up of a
great many new institutions— that is, the decline
came at a time when there was a great increase in
the facilities for catering to the patrons of this class
of institutions. Owing to the unfavorable condi­
tions, some contemplated new organizations were
abandoned and others concluded to merge with ex­
isting concerns. The setback, as already stated, it
is now found, was only temporary, the whole of the
loss of the last six months of 1899 having been re­
covered in the first six months of 1900 and a further
addition made which places the total away ahead of
anything previously recorded.
There are two ways of measuring the operations
— the deposits and the aggregate resources. Con­
sidering the latter first, it is discovered that while
the contraction the last six months of 1899
amounted, roughly, to 50 million dollars, the in­
crease the first six months of 1900 reached over 124
million dollars.
In other words, the total now
exceeds that of a year ago by 74 million dollars,
and then it had already attained extraordinary di­
mensions. Under the further expansion aggregate
resources of the New York trust companies now
stand but little less than 800 million dollars ($796,483,887), which will serve to give the reader an idea
of the magnitude of the business of these institu­
tions. The following furnishes the record back to
18 9 1:
AGGREGATE R E SO U RCES O F T H E T R U S T C O M PA N IE S OF N E W YORK
STA TE.

July i, 1900___,$796,483,887
January 1, 1900.. 672,190,672
July 1, 1899___ 722,356,523
January 1, 1899.. 579,205,442
July 1, 1 8 9 8 ..... 527,084,533
January 1, 1898.. 483,739,926
January 1, 1897.. 396,7.42,948

January
January
January
January
January
January

1,
1,
1,
1,
1,
1,

1896.. $392,630,04®
1895.. 365,419,729
1894.. 341,466,011
1893.. 335,707,780
1892.. 300,765,575
1891.. 280,688,769

A s against $796,483,887 Ju ly 1, 1900, aggre­
gate resources January 1, 1891, it will be seen, were
only $280,688,769. But let us compare with a more
recent period. On Ju ly 1, 1898, the total was $527,084,533. Hence in the brief space of two years there
has been an addition of 269 millions, or over 50 per
cent., and this on an already large total. Since
January 1, 1897, a period of three and a half years,
the total has more than doubled. O f course, the
number of institutions has, greatly increased, but
let it not be supposed that the growth has come
alone or mainly from that source. The older insti­
tutions obviously had augmented competition to
meet. It is evidence of their strength and the ex­
cellence of their management that they have been
able to extend their business and operations— as a
rule very materially, too— notwithstanding the ad­
vent of the newcomers. Not all the older concerns
show quite as large totals as they did twelve months
ago, but that does not signify much in view of the
marvelous antecedent expansion ; on the other hand,
several excel even their phenomenal record of Ju ly
of last year. Take the United States Trust Com­
pany, which is the largest of all the companies. Its
resources now are $85,802,301, against only $64,^02,289 on January 1, 1900, and $77,286,772 Ju ly

BA N KERS’
i, 1899. The Union Trust Company’s present to­
tal is $ 59,437,743» against $44,445,173 last January
and $50,649,509 the previous Ju ly . The New York
Security and Trust Company has been in existence
a much briefer period of time than these old land­
marks, but has also made very important additions
to its totals, which stand, $21,352,982 Ju ly 1, 1900,
$18,883,331 January 1, 1900, and $17,147,497 Ju ly
1, 1899. Among the newer concerns, the Trust
Company of America reports resources of $ 16 ,15 1,650, while the Morton Trust Company appears in
the list with an aggregate of no less than $34,217,014.
Passing to a consideration of the deposits, the
record is much the same. The last six months of
1899 they fell off 71 million dollars, the first six
months of 1900 they expanded 1 1 7 million dollars.
The total of the deposits of the trust companies of
the State is now over 640 million dollars. We may
compare this with the aggregate of the deposits for
all the New York City Clearing House banks, which
on June 30, 1900, were reported 888 million dollars.
A s against the present total of $640,837,146, the
trust companies January 1, 1897, had deposits of but
$305,354,637, as will be seen by the following: |
AGGREGATE D E P O S IT S O P T H E N E W

July 1, 1900......... $640,837,146
January 1, 1900.. 523,541,570
July 1, 1899........ 594,462,705
January 1, 1899.. 467,184,258
January 1, 1898.. 3$3;328,725
January 1, 1897..; 305,354,637

YORK T R U S T C O M PA N IE S .

January
January
January
January
January
January

1,
1,
1,
1,
1,
1,

1896.. $307,351,893
1895.. 285,741,794
1894.. 266,092,955
1893.. 264,295,048
1892.. 234,466,697
1891.. 211,320,275

With such large resources and deposits the trust
companies are necessarily becoming growing fac­
tors in the money market. Conditions the present
year have manifestly not been favorable to the plac­
ing of money at profitable rates. Y et the loans of
the trust companies on Ju ly i, .1900, were within 8
million dollars of the total recorded twelve months
ago— that is, were 370 million dollars. On January
1, 1897, the loans were less than 170 million dollars.
LOANS ON COLLATERAL BY T R U S T C O M PA N IE S .

July 1, 1900.........$370,483,337
January 1, 1900.. 328,143,588
July 1, 1899........ 378,218,698
January 1, 1899.. 283,402,822
January 1, 1898.. 230,581,708
January 1, 1897.. 169,894,938

January
January
January
January
January
January

1,
1,
1,
1,
1,
1,

1896. .$169,161,348
1895.. 148,953,820
1894.. 147,794,024
1893.. 196,321,422
1892.. 173,552,829
1891.-166,685,758

Collateral loans are the favorite form of invest­
ment with the trust companies. The other classes
of investment also show increases, but not in such
a striking way. We bring together here the lead­
ing items:
STO CK IN V E S T M E N T S OP T R U S T C O M PA N IE S .

July 1, 1900......... $178,789,114
January 1, 1900.. 168,195,642
July 1, 1899........ 148,971,045
January 1, 1899.. 136,561,066
January 1, 1898.. 113,525,798
January 1, 1897.. 101,983,600

January
January
January
January
January
January

1, 1896. .$104,512,839
1,
1,
1,
1,
1,

1895..
1894..
1893..
1892..
1891..

97,555,798
65,998,230
57,185,649
51,132,239
47,180,478

»C A S H ON H A ND AND ON D E P O S IT .

July 1, 1900.........$131,888,583
January 1, 1900.. 81,366,288
July 1, 1899 ........ 93,604,261
January 1, 1899.. 71,734,621
January 1, 1898.. 55,034,451
January 1, 1897.. 54,642,344

January
January
January
January
January
January

1,
1,
1,
1,
1,
1,

1896.. $50,804,137
1895.. 61,206,703
1894.. 74,365,761
1893.. 35,033,016
1892.. 33,932,847
1891.. 26,564,978

H O L D IN G S OP BONDS AND MORTGAGES.

July 1, 1900._____ $38,790,727
January 1, 1900... 38,143,145
July 1, 1899____ 37,139,510
January 1, 1899... 34,855.023
January 1, 1898... 32,624,995
January 1, 1897... 28,692,428




January
January
January
January
January
January

1,
1,
1,
1,
1,
1,

33

C O N V E N T IO N .

1896.. .$25,114,077
1895... 21,569,504
1894... 17,451,674
1893... 15,062,290
1892... 13,373,463
1891... 17,537,008

LO A N * ON PER SO N A L SE C U R IT Y BY T R U S T C O M PA N IE S .

July 1, 1 9 0 0 ..... .$47,937,934
January 1, 1900... 31,101,271
July 1, 1899............ 39,865,910
January 1, 1899... 29,930,376
January 1, 1898... 31,183,292
January 1, 1897... 25,788,188

January
January
January
January
January
January

1, 1896.. .$29,369,703
1, 1895... 22,791,215
1, 1894... 22,636,957
1, 1893... 19,698,925
1, 1892... 17,210,145
1, 1891... 9,755,643

We would make a word of comment with refer­
ence to only one of the foregoing items—we mean
the holdings of cash. I f in the money loaned out
on collateral the trust companies have played and
are playing an important part in the money market,
it is obvious that through their large holdings of un­
employed cash they possess the means of exerting a
still more important influence. For it appears that
the uninvested cash, on Ju ly i, 1900, was almost 132
milliofi dollars ($131,888,583), against 81 1-3 mil­
lions last January and 93 y2 millions in July, 1899.
This is proof of the difficulty experienced in finding
satisfactory employment for their funds. It re­
mains to add that of the. $131,888,583 of cash, only
$10,820,407 was in their own vaults, all the rest be­
ing held in the banks.

TH E CO N V EN TIO N AND IT S WORK.
I f this year’s annual Convention of the American
Bankers’ Association was not marked by so many
important acts as some previous conventions, the
occasion was one of the most enjoyable in the his­
tory of the organization. Held in the South—at
Richmond—the cordiality of the greeting extended
to the delegates served to give them an idea of the
warmth and depth and glow of Southern hospitality.
Every one who has had the good fortune to be a vis­
itor in a Southern home knows the delight attending
such a visit by reason of the graciousness and geni­
ality of his reception. On the present occasion, how­
ever, a new meaning was given to the term by the
people of Richmond in the way they treated the
assembled bankers.
Two of the officers of the Association (the retir­
ing President, Mr. Walker Hill, and the Secretary,
Mr. James R. Branch) are native-born Virginians,
and their return to the scenes of their childhood in­
jected a personal element in the welcome which gave
added charm to it. The annual gatherings of the
Association have always been memorable affair$,
and wherever they have been held there has never
been a time when the delegates were not accorded a
royal reception. There was certainly nothing lack­
ing in the fervor of the greeting last year at Cleve­
land with that genial gentleman, Col. Myron T.
Herrick, acting the part of host—a part which fits
him so well. But there is something distinctive
about Southern hospitality which places it on a plane
all by itself. It is this that the delegates have felt,
and they carry away with them, we are sure, recol­
lections which will never fade from memory.
That the affairs of the Association are in flourish­
ing condition has been often made apparent in our
colunjns. But the fact is brought out very striking­
ly in a little comparative statement presented in the
annual report of Secretary Branch. This statement
shows that the Association now has 4,500 paid
members. On October i* 1895, the number was
only 1,5 1 1. In the space of five years, therefore, the

34

BA N KERS’

membership has trebled. This is a marvelous show­
ing, evidencing how the Association, after an inter­
regnum when it seemed to be inviting decay, has
taken on new vigor and strength and is now forg­
ing ahead in a way that is surprising even its most
enthusiastic supporters. The Association is in the
possession of ample funds, as the reports of the vari­
ous officers will show. It should be noted, too, that
the annual dues from membership now aggregate
$61,200 per year, as against but $12,492 per year on
October 1, 1895. During the last thirteen months
alone there has been a net addition of 585 members.
Moreover, the action just taken by the Convention
in providing for membership dues as low as $5.00
per year in the case of small concerns (the previous
minimum having been $10.00), should insure a fur­
ther large accession of new names. The member­
ship now enrolled represents an aggregate of cap­
ital, surplus and undivided profits of over 14 12 mil­
lion dollars ($1,412,481,466), and aggregate depos­
its of over 5,168 million dollars ($5,168,377,728),
giving combined resources in excess of 6,580 million
dollars—$6,580,859,194. These figures, moreover,
do not include the capital and deposits of 432 private
bankers who do not make reports.
A s regards the work of the Convention, we re­
gard as its most important action the resolution ap­
proving the recommendation of the Committee on
Education for the establishment of an Institute
for the education of bank clerks. This is an innova­
tion, in commendation of which hardly too much can
be said. Mr. William C. Cornwell, President of the
City National Bank of Buffalo, as Chairman of the
Committee on Education, has given a good deal of
time to consideration of the scheme, and he made an
eloquent appeal to the Convention on behalf of th^
same. The object is to provide for the scientific and
technical training of bank clerks in their every day
duties, and also to provide them with the necessary
education to fill the higher positions to which they
aspire. When this purpose is stated, its desirability
becomes at once apparent, both in the interest of the
banks and the interest of the clerks. Moreover, the
clerks themselves have been most urgent in favor of
such a scheme. In speaking of this desire on their
part, Mr. Cornwell forcibly said: “ These are the
men behind the guns. Will you train them as they
ask, so that their work may be doubly effective ?
Or will you neglect them, abandon them to their own
efforts, and let the service drift along half disci­
plined, and yourselves take the consequences of con­
tinuing to conduct your campaign with an untrained
army ? ” The plan is to form a chain of Bank Clerks’
Associations throughout the United States. There
would be meetings at stated periods, at which the
various subjects under consideration would be dis­
cussed, papers read, debates carried on, or lectures
delivered from time to time by local or outside tal­
ent. A t the end of the season certificates of pro­
ficiency would be delivered to those entitled to them.
The course of study is to be of the most practical
character, and for the first year would be essentially
primary. Great Britain has its Institute of London
Bankers, and there can be no doubt much good will




C O N V E N T IO N .
result from the carrying out of this contemplated
scheme of education.
It is interesting to observe that much of the
really useful work of the Association is now being
done by committees. The results accomplished by
the Committee on Education, as here outlined, are
an evidence of what can be done by persistent and
well directed efforts under the leadership of earnest
men. In like manner the Protective Committee has
become an indispensable adjunct of the Association.
The identity of the membership of this committee
from year to year is kept a secret. The work accom­
plished by it in the late year in preventing frauds
upon the banks, and in relentlessly pursuing those
committing forgeries and other crimes directed
against members of the Association are shown in the
report of Mr. Joseph C. Hendrix, the Chairman of
the committee. A s a result of the creation and active
vigilance of the committee, the losses of the banks
through frauds of this kind are now comparatively
small. So, too, the Committee on Fidelity Insur­
ance, whose copyrighted form of fidelity bond for
employees was approved by the Annual Convention
last year, has rendered very efficient and valuable
services. The Committee on Uniform Laws, of
which Mr. Frank W. Tracy is Chairman, is to be
mentiohed as another committee which has proved
very useful, one result being a growing uniformity
of legislation in the different States concerning a
number of essential things relating to the banking
business. The Committee on Express Company
Taxation has also justified its existence, though for
causes set out in their report they have not succeed­
ed in accomplishing their object.
The reasons for the success of committee work
of this description are perfectly plain. Committees
are small and compact bodies of men ; they can carry
on their work throughout the year; members espe­
cially fitted for the task can be selected to serve on
the same. We have shown above that the Associa­
tion has grown tremendously in membership during
the last five years. The larger an organization of
that kind, the more unwieldy it becomes for collect­
ive action. Hence, a subdivision or assignment of
the work to constituent portions of the main body, at
least for preliminary consideration, is a matter of
absolute necessity. For the same reason the Associ­
ation is getting to rely more and more upon the ad­
vice and judgment of such committees. The feeling
is that subjects referred to them will receive the at­
tention they merit, while any plan or proposition
emanating from such a body is sure to be well
matured.
The action taken by the Convention with refer­
ence to some resolutions which were unexpectedly
introduced shows at once the conservatism of the
Association, and the growing inclination to refer
new suggestions to appropriate subordinate bodies.
It was sought to commit the Association, by the reso­
lutions referred to, in favor of the Consular Service
Bill and also in favor of creating, as part of the
National Administration at Washington, a Depart­
ment of Commerce and Industries, with a new mem­
ber in the President’s Cabinet. The effort failed

BA N KERS’
through the vigilant opposition of Mr. Breckinridge
Jones and other kindred spirits. The effort was no
doubt well meant, but there were obvious objections
both to the measures themselves and to hasty action
upon them. In the first place, it was not at all clear
that they came within the province of the work of
the Association. In the second place, it was mani­
fest that the members of the Association did not
pretend to any familiarity with the subjects com­
passed in them. The Convention made proper dis­
position of the resolutions when it voted one down
and referred the other to the Executive Council.

T H E P A P E R S R EA D A T TH E CO NVENTIO N.
The addresses delivered before the Convention
constitute the portion of its doings which possess
for the outside public the most interest. Through
these addresses the Association appeals to a larger
constituency than its own membership— namely, the
thinking portion of the community throughout the
world. Unfortunately the papers do not attract the
attention they should at the Convention itself. This
is not because of any lack of merit in the discourses,
or any want of interest in the themes selected, but
simply because not sufficient time is allowed for
their consideration and discussion. The official pro­
gramme is always so worded as to convey the im­
pression that there are to be other speakers besides
those specially designated for the purpose. Thus,
following the name of the subjects, there appears
invariably in each case the expression, “ Discussion
to be opened by Mr. -------- (naming the person
who is to prepare the address).” A s a marter of
fact the person designated in the programme is not
merely the principal speaker, as intended, but al­
most always the only speaker on the topic assigned
to him.
We think it would give addcM interest and
weight to the proceedings of the Convention if the
■ design to have general discussion could be carried
out. We know that there is an element in the A s­
sociation which believes in eliminating the prepared
addresses altogether. These persons argue that it
is short extemporaneous remarks that find most fa­
vor. But in the general discussion, which we sug­
gest, the time to be consumed by any one speaker
might with perfect propriety be limited. A fter the
matured and well considered dissertation of the
speaker named in the programme, an allowance of
say five minutes to each subsequent speaker would
doubtless be ample. Under present arrangements
it would be difficult, of course, to provide for even
five-minute' speeches. But as we suggested a year
ago, the call of States might be dispensed with. This
consumes a great deal of time (taking up a good
part of the second day’s proceedings) and rarely
brings forth anything of real value.
Some few of the speakers,.in anticipation of this
call, come prepared with statistics concerning their
States, but the great majority of them respond sim­
ply because, the name of their State having been
called, they do not want it to appear that she is with­
out loyal and aggressive sons to sing her praises. So
they get up and say a good word on her behalf. It




C O N V E N T IO N .

35

appears to us, therefore, that no one would object to
the omission of this call of States, and that the nec­
essary steps might with advantage be taken to have
it omitted. That accomplished, the whole of the last
two days of the Convention could be devoted to the
reading of the prepared addresses, and a discussion
of the subjects embraced in them. We opine the re­
sult would be beneficial. Imagine the weaith and
the variety of the remarks that would be qlicited in
a general discussion of “ The Financial Future of
the United States,” the topic assigned to Mr. Charles
A. Conant. In such an event the speakers would
have something to talk about, whereas now, in re­
sponding to the call of States, they appear at a loss
most of the time as to what to say.
It is pleasing to find in all the addresses an ap­
preciation of the great new problems confronting
the country, both financially and politically. This
applies also to the annual address of Walker Hill.
Thus we find Mr. Hill saying: “ We have broken
our commercial shell, and the trade of our country
will never again be pushed back within the confines
of the United States. This new condition the bank­
ers of the country must meet, for they are the cus­
todians of the money of the country, and if they do
not use intelligently and to the best advantage its
■ medium of exchange, others, foreigners, will reap
rewards that should be ours, for rest assured that
we will not be permitted to long do awkwardly,
slowly and expensively what can be better done by
others. Excellence of service will be demanded of
us, and therefore we must educate ourselves in the
commerce of the world.”
The importance of a stable standard of values is
also emphasized in many of the addresses, accom­
panied in some of them by expressions of anxiety
lest the law of March 14, 1900, may prove inade­
quate to the requirements. To quote Mr. Hill again: '
“ No one will buy drafts on us, or deposit their
money with us if these drafts, and their credits, rep­
resent doubtful and changing values, while a com­
petitor nation offers a currency which does not
shrink and is measured at all times by an unchang­
ing standard. It is no answer to say that payment
in gold, if that is the standard desired, can be se­
cured by private contract. The very fact that it re­
quires a special contract to secure it is a declaration
that the general law does not afford the protection
desired.”
The same thought runs through the remarks of
Mr. Charles A. Conant in his address upon “ The
Financial Future of the United States,” a*n excellent
paper, by the way, and one in every way worthy of
the theme and the occasion. Mr. Conant points out
that supremacy among the money markets of the
world comes only by a combination of favorable
conditions, in which industry, thrift and enterprise
play prominent parts. The part of legislation is
small, so long as freedom is left to native skill and
enterprise to develop along natural lines. There is
one essential prerequisite, however, to financial
power, in which legislation does become important.
This is in giving permanency to the standard of
value. London owes much of its predominance in
the world of finance, Mr. Conant shows, to the fact

36

BA N KERS’

C O N V E N T IO N .

that a contract for the payment of money in London
has meant for so long a period of time one thing and
no other. He also shows what an advantage it has
been to Russia during the last few years to have
adopted the gold standard. He lays stress, like­
wise, as concerns the attracting to this city of the
exchanges of the world, upon the necessity of free­
dom from vexatious interference by taxation or le­
gal restrictions with the transactions of organized
markets. Striking illustrations of what harm may
be done by excessive taxation, and by unwarranted
interference, have been afforded within the last five
years in France and Germany. Heavy taxation in
the one case, the foolish attempt to stamp out “ fu­
ture ” trading in the other, have fettered the mar­
kets of Paris and Berlin and driven much of their
business to a less restricted field. Reasonable reg­
ulation of new stock company issues to prevent
fraud are justifiable, and have not hampered honest
transactions in London, but legislation directed by
a hostile spirit against the stock exchanges and de­
signed to hamper the free play of the competition
which fixes values, means the death-knell of the mar­
ket against which it is directed.
The address of Ellis H. Roberts, the Treasurer
of the United States, on “ The Treasury and the
Money Market,” was an interesting review of the
relations between the Treasury and the money mar­
ket, embodying considerable historical research, go­
ing back to the early days of the Government. Gen­
eral Alfred C. Barnes, the President of the Astor
Place Bank of this city—a branch of the Corn E x ­
change Bank—had for his theme “ The Internal
Revenue Law .” He showed what a considerable
portion of the war taxes imposed by the new revenue
bill are paid by the banks, and indicated clearly that
the United States Government, by reason of the new
tax law, and the revival of business prosperity, is
accumulating such a large surplus revenue that the
time has arrived for taking off some of these taxes.
Mr. J . A. S. Pollard, the cashier of the Fort
Madison Savings Bank, of Fort Madison, Iowa, in
his paper, f Public Opinion and the Bank,” dwelt
Upon .the importance of gaining for banks the good
will of the public. He well said that public opin­
ion to-day is the predominant governing influence.
It directs all interests, commercial or otherwise. He
showed that in order that banks may gain and hold
public approval it is necessary that the men who con­
duct them should by deed and action be worthy of it.
The banker must be something more to his coun­
try and community than a loan agent and merchant
of exchange. He should be of broader caliber; one
who can subserve the growing demands of trade
and commerce and keep in sympathy with business
progress. “ His training and practice should lead
him to understand in times of prosperity the music
of traffic, the rumble of wheels, the rasp of the saw,
the hum of spindle and melody of anvil, as well as
to warn him against inflated values, speculation and
tlie omens of depression and panic. He should be a
man of sense, backed by unfailing nerve, as ready
to encourage sound enterprise as to turn down the
watered stock expert and the genius of boom real
estate ventures.”
Another interesting and instructive address was



that on “ The Education of aBanker,” by Mr. George
Hague, General Manager of the Merchants’ Bank
of Canada. Mr. Hague emphasized the importance
of properly educating bank clerks and officials, and
he furnished the outlines of what the education of a
banker should be. He argued that banking de­
serves to be called one of the learned professions;
for the administration of a large bank calls for as
much intellectual power as is required by the men
who write treatises on political economy, and whose
names are familiar in the world of literature. “ I
venture to say that there are letters written and doc­
uments produced at times in any great banking cen­
ter by brokers or financiers which are equal in intel­
lectual rank with any chapter in M ills’ * Political
Economy,’ or Smith’s ‘ Wealth of Nations,’ and dis­
play as much acuteness as any eminent lawyer’s ar­
gument or any speech of Webster or Clay.”
Mr.
Hague then went on to say that it was not unnat­
ural that this should be so, for a banker s faculties
are constantly sharpened by the consciousness that
if he makes mistakes he will have to pay the penalty
for them in the shape of losses. An author may pro­
pound unsound theories, and set forth unworkable
schemes, and all that he has to fear- is that another
man will write something to the contrary; but a
banker exercises his faculties under the danger of
monetary loss should he make mistakes or his judg­
ment be faulty. _____ _

TH E

TRU ST

CO M PAN Y

PR O C EED IN G S.

The Trust Company Section continues to justify
its existence. Trust companies in the United States
are each year growing in magnitude and importance
(we show in a previous article how marvelous the
growth has been in this State), and the Trust Com­
pany Section in its work is evidently keeping pace
with the mov^nent. This department of the Amer­
ican Bankers’ Association has an advantage over the
Banking Section of the same organization, because,
its membership being necessarily smaller (there be­
ing so many less Trust companies than banks), there
is opportunity for direct personal consultation
among the members. Moreover, the discussions on
the floor are, for the same reason, much less formal,
and consequently much more generally participated
in. They are productive, too, of valuable interchange
cf experience. The programme this year was ar­
ranged with the usual care, and the papers submit­
ted arb all through of a high order. We advise ev­
ery one interested in Trust companies to give at­
tentive consideration to the proceedings of the Trust
Company Section, which we publish in full the same
as we do the proceedings of the American Bankers’
Association proper. Not only will the prepared ad­
dresses be found engrossing and instructive, but the
general discussions equally so. We warrant the
reader his interest in them will not flag from begin­
ning to end—-which is the best test of their worth.
In speaking of the meeting of the Trust Com­
pany Section, we would be omitting mention of a
very gracious feature of the affair if we did not refer
to the exceedingly courteous and cordial welcome—
so characteristic o f the South— extended to the dele­
gates by John Skelton Williams, the President of

BA N KERS’

C O N V E N T IO N .

the Richmond Trust and Safe Deposit Company.
Mr. Williams’ words were well chosen, and breathed
a spirit of such generous friendship that those to
whom they were directed could not but feel rejoiced.
And his hospitality—every delegate will testify that
it was boundless. His references to the useful func­
tions performed by the Trust companies and to the
fact that for forty-six months of every four years
aspirants for political honors court the favor of
trusts and financial institutions, and in the other
two months preceding the Presidential election can­
not find words strong enough and black enough to
say in denunciation of them, were both apropos and
pat.
Like the American Bankers’ Association itself,
the Trust Company Section is enjoying noteworthy
growth. The present was only its fourth annual
meeting. In 1897 there were 1 1 4 members; in 1898,
15 0 ; in 1899, 19°> and now for 1900 there are 253.
The capital and surplus of the institutions, we see
from the report of the Executive Committee, is about
$204,000,000, while the deposits are about $736,000,600, giving aggregate resources of nearly a thousand
million dollars.
The remarks of Mr. Arthur Heurtley, Secretary
of the Northern Trust Company of Chicago, on
“ The Proper Education, of the Clerical Force o f a
Trust Company with Regard to Prom oting' the
Highest Efficiency of the Office Force,” embodied a
thought which fitted well with the action of the Con­
vention of the American Bankers’ Association in
approving the recommendation of its Committee on
Education for the establishment of a chain of Bank
Clerks’ Associations throughout the United States.
Mr. Heurtley well says that the better knowledge a
clerk has, not only of his immediate duties, but of
the general working of the institution with which he
is identified and the principles governing the same,
the more valuable he becomes and the better service
he will render the company with which he is con­
nected. A s was pointed out by one of the speakers,
in commenting upon Mr. Heurtley’s paper, his sug­
gestions will be largely met if the project referred to
of the American Bankers’ Association as a whole is
carried out; hence the Trust Companies, quite as
well as the banks, should labor to that end.
In speaking with reference to If- The Proper Con­
servative Attitude of Trust Companies Toward Cor­
porate Enterprises,” Mr. John E. Borne, President
of the Colonial Trust Company of this city, showed
that he has a true conception of the duties and re­
sponsibilities of a Trust Company in such matters.
Mr. Borne would not discourage legitimate indus­
trial undertakings, but he would scrupulously re­
frain from making the Trust Company sponsor for
them. Proper conservatism lies in the Trust Com­
pany assuring itself always of the standing of the
originators of corporate institutions; in not entering
into business relationship with other than responsi­
ble, respectable parties; in assisting such parties, by
vouching for them, where their standing is assured;
and in taking no part in exploiting the profit-earning
side of any enterprise. The position of a Trust Com­
pany must be like that of Caesar’s wife, above sus­
picion; it should in itself represent the highest form
of commercial and financial credit; and it can only
do this by keeping free from entangling alliances




37

which may provoke criticism and injure its standing
in the community of finance.
Mr. Richard L. Crampton, of the Northern Trust
Company, Chicago, talked in an interesting and in­
structive way of “ Trust Company Advertising.”
He began his address with the remark that occasion­
ally one finds a man who says it is not good business
ethics for Trust Companies to advertise. The aver­
age man will admit they may advertise. The officers
of most companies, he believed, think they should
advertise. The signs of the times say they must ad­
vertise—that is, if increasing dividends are desired.
By advertising Mr. Crampton means the broad defi­
nition of the term : all that goes to make favorable
publicity. He shows that he has the right notion of
the importance of that feature when he urges that
each company should have some one, preferably an
officer, to attend to all advertising, at least so far as
it relates to the general* policy, in order that he may
be brought to study more carefully the latest meth­
ods of reaching the people. Mr. Crampton voices the
experience of nearly all large institutions when he
expresses preference for placing the matter in the
hands of an officer, who appreciates the importance
of the subject, rather than turning it over to a subor­
dinate or an outside man.
Mr. William A. Carr brought out clearly “ The
Advantages of Operating Safe Deposit Vaults in
Connection with Trust Companies.” He admitted
that there was little direct profit in the Safe Deposit
Department when run on a small scale, but the indi­
rect profit o f keeping the customers of the company
in the house may be considerable. The box rent may
be small, but a fair profit will likely accrue from the
sale of the bonds through the banking department of
the Trust Company. Mr. Carr pointed out that the
strictly up-to-date Trust Company, under its cor­
porate powers, is given an opportunity to make itself
indispensable to large classes of a community inside
and outside the business world. It can avail itself of
this opportunity, as the department store does, by
grouping around its main business all its auxiliary
lines of business under the direction of bright, pro­
gressive managers.
Mr. Willis S. Paine dwelt upon the “ Duties of
Trustees of Financial Corporations.” Mr. Paine,
who is now President of the Trust Company of New
York, was formerly Superintendent of Banking in
this State, and hence speaks with authority. He
notes that it was not until 1874 that the Trust com­
panies of the State were subject to examination by
the Banking Department, and that the result of the
first examination was that three of the companies
were closed up. How different the situation to-day!
Mr. Paine thinks every Trust Company should have
by-laws requiring its Board of Trustees to appoint
an Examining Committee at least once in six months,
whose duty it should be to make a general examina­
tion of its affairs, to count not only the cash on hand,
but, what is of much greater importance, to exam­
ine into the amounts stated to be due from various
sources, and to compare its liabilities and resources
with the balance on the general ledger. He elab­
orates these suggestions, and it will be well for finan­
cial institutions to give heed to what he says in view
of his wide experience.
One of the papers read at the meeting was on the
“ Essentials Required by Trust Companies to be Put
in Mortgages and Other Papers.” The speaker was
Mr. Andrew Squire, counsel for the Guardian Trust
Company of Cleveland, and he spoke with full
knowledge of his subject. B y “ essentials required ”
is meant things needful to guard against the Trust
Company being charged with liability which it never
agreed to and never could afford to assume. A s a
trustee it is of the first importance, Mr. Squire notes,
that the Trust Company shall not permit, in any
mortgage or other instrument creating it a trustee,

BA N KERS’

38

C O N V E N T IO N .

any representation as to the character of security or
priority of the lien which may be in any sense mis­
leading. He gives an illustration of the harm that
may result from the non-observance of this precau­
tion. For a time certifications on bonds read: “ It
is hereby certified that this bond is one of the series
of bonds secured by the mortgage or deed of trust
within mentioned.” The employment of the word
“ secured ” brought some Trust Companies which
inaptly used it into litigation, for the reason that it
was claimed that there was some force to the word
“ secured,” and that the Trust Company’s certificate
certified that there was actually some security for
the bondholders, when in reality there was no such
security, prior mortgages being sufficient in amount

to exhaust the property. Mr. Squire makes other
similar useful suggestions.
The most elaborate paper of the series was that
of Mr. Henry J . Bowdoin, Second Vice-President
of the Maryland Trust Company of Baltimore, on
“ The Duties and Liabilities of Trust Companies
Acting as Transfer Agents and Registrars.” Mr.
Bowdoin goes exhaustively into the subject. His
argument cannot well be summarized in a few
words. We may say, however, that he takes the
ground that in the functions referred to the Trust
companies are assuming greater liabilities and re­
sponsibilities than generally supposed, and that the
compensation received is not commensurate with the
risks run. The paper is deserving of careful study.

• INDEX T O ADVERTISEMENTS.
NEW YORK.

Audit Co. of N ew York .......... ..............................P age 17
B ank of Montreal............ ......................................... i".. • 19
2
B rown B rothers & Co . ...... .............................................
Canadian B ank of Commerce---------- >: . . . . . . . . . . . .
7
Central N ational B a n k ...................................................
8
Chemical N ational B a n k ................................................. 13
Colonial T rust Co .............................................................. 19
F armers’ L oan & T rust Co .............................................. 26
F loyd, Augustus ................ ................ ^
. ,»;*. 113
Gallatin N ational B a n k ......................................
Ill
H anover N ational B a n k ................................................. 25
H arris (N. W.) & Co ___ ___ . . . . . . . . . . . . . . . . . ..........113
H urlbutt, H atch & Co.........................................................I l l
K tmball (R. J .) & Co.............................. ...................
7
K leybolte (R udolph ) & Co..................................
K nauth , N achod & K u h n e . ............................................ 22
K nickerbocker T rust Co . .................................
L atham , Alexander & C o .................... ..
8
Market and F ulton N ational B a n k . . . . . . . . ; ___ _ 115
McMillin (E merson ) & C o . . . . . . . . . . ............... ..
5
Morgan (J. P.) & C o . . . . . . . . . . . . . .Outside Bäck Cover.
N ew York Security & T rust Co...............
7
R edmond, K err & C o ........... ........ ......................... ..
1
T rust Co. of N ew York .............. ............. Inside Back Cover.
U nion T rust Co . ............................ .........................
6
Vermilye & Co................ ..................................................
1
W inslow , L anier & C o ...................................
110
BRO OK LYN.

B rooklyn T rust Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P eople’s T rust Co . . . . . . . . . $ . . . .......................
NEW ARK.

F idelity T rust Co .............. ................
B O ST O N .

Adams & C o ............................... .........................................
A merican L oan & T rust C o ...................... j . . . . . . .
Mason , L ewis & Co ...................... .....................................
P oor (H. W.) & Co.................. ...........................................
T hird N ational B a n k .
........ ...........................
T ibbitts ( F . R . ) . ' . ........ ............i.: ...................................

16
25
24
18
18
9
18
13
25

BUFFALO.

City N ational B a n k . ......................................................... 113
ALBANY,

N ew York State N ational B a n k . . . . . . . . . . . . . . . . . .17
ROCHESTER.

F lour City N ational B a n k . ...........................................
German-American B ank of R ochester .........................
HOLYOKE.

W hiting P aper Co .............. ................................
B ank

M ONTREAL.

of

Montreal...................... ......................................
TORONTO.

B ank of T oronto.................................................................
Canadian B ank of Commerce. . ................ ....................

17
17
22
19
16
7

PHILADELPHIA.

F ourth Street N ational B a n k . ............ I ................. ... 21
Girard N ational B a n k . . ; .......... .................... . . . . . . . I l l
G irard T rust Co ........ ...................Inside Front Cover.
P enns YLVANiA Co. for I nsurance on L ives .............. .. 21
P hiladelphia N ational B a n k . .■................................. 12
N O R FO LK .

Citizens ’ B a n k .......... . . . . . . ....... .......................................
N orfolk N ational B a n k .......... .................................




4
5

BA LTIM ORE.
F armers’ and Merchants ’ N ational B a n k . . . . P age 10
I nternational T rust Co. of Maryland....................... I l l
Maryland T rust Co .......... .............................................. 22
Mercantile T rust & D eposit C o ................................... 10
Middendorf, Oliver & C o ..................................................
5RICHMOND
N ational B ank of Virginia .............................................
4
R ichmond T rust & Safe D eposit Co ..............*...............
3
S cott & Stringfellow .........................................................
5
3
W h .ltAMS ( J ohn L.) & S on s ...................... .....................
AUGUSTA.
Georgia R ailroad B a n k ................
16
LOUISVILLE.
A merican
N ational B a n k .............. ...............; ........... H
15
Columbia F inance & T rust Co .........................
20
24
P IT T SB U R G .
D iamond N ational B a n k ........................................
116
H ill (G eorge B.) & C o ..........................................
114
Safe D eposit & T rust Co ................
— ............
114
Union T rust Co ..................
414
CLEVELAND.
Cleveland T rust Co..............................................
14
E uclid Avenue N ational B a n k . ..................................... 14
Guardian T rust Co ................................
18
W estern R eserve T rust Co............ ..........................—
9
W right (H erbert) & Co................................................
20
D E T R O IT .
U nion T rust Co......................................................
115
State S avings B a n k . ...................................................... 115
INDIANAPOLIS.
F letcher N ational B a n k . .. ; .......... .....................
115
TO LED O .
N ational B ank of Commerce. . ................................. ... 14
C IN CIN N A TI.
K leybolte (R udolph ) & Co ............................................... 15
CHICAGO.
A merican T rust & Savings B a n k . .. .Inside Front Cover.
B ecker (Ai G.) & Co................ ..... ................ ................. 16
Commercial N ational B a n k . .................. ....................... 114
Continental N ational B a n k . .................................. . 12
Corn E xchange N ational B a n k ........ ..
11
E quitable T rust Co ............ ........................................
116
F ulton ( F . R . ) & Co...................... ................................ 113
Gartenlaub & Co, .......... ...........................................
116
Guardian T rust Co .......... , ...........................................
116
H arris ( J. F. ) ...... ................................ ..................
20
M ason, L ewis & C o . . . . . — .................................. ..........
9
N orthern T rust Co .......... .......................Inside Back Cover.
W estern B ank N ote Co ...................................
11
S T . LOUIS.
American E xchange B ank . . . . . . . i . . . . . . . . . . . . . . . . . 21
Mechanics ’ B a n k .................................... t . . . . . . . . . . . .. 23
Mis s iss ip p i Valley T rust Co ................ ............... . ....
23
KANSAS C IT Y .
Mackenzie ( J. & W. C .) ............ ......____________......
16>
M ILW AUKEE.
F irst N ational B a n k ........ . . . . _________________. . .
15
D EN V ER .
I nternational T rust Co ........................................... ... 15
P ulsifer & Y oung.------ . . . . . . . . .. „. . . . . . . . . . . . . . — ... 15

BANKING

SECTION

A merican Bankers’ A ssociation .
26^h Annual Convention, Held at Richmond, October 2d, 3d, and 4th.

IN D E X
T h e Treasury and the Money Market Financial Future of United States
T h e Education of a Banker Public Opinion and the Bank T h e Internal Revenue Detailed Report of Proceedings President Walker Hill’s Address _
Annual Report of the Secretary -

TO

C O N V E N T IO N

Pages 39
Pages 42
Pages 44
Pages 48
Pages 50
Pages 52
_ Pages 53
Page 57

to
to
to
to
to
to
to

41
44
48
50
51
89
55

PROCEEDINGS.

Annual Report of the Treasurer
Report of Auditing Committee Report of Executive Council Report of Protective Committee
Report of Committee on Uniform Laws
Report of Committee on Education
Report of Committee on Fidelity Insurance R port on Express Company T a x ition -

Page
Page
Pages
Pages
Pages
Pages
Pages
Pages

57
58
59
61
63
64
67
69

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to
to
to
to
to

60
63
64
66
69
71

The Treasury and the Money Market.
B y E llis H. R oberts , Treasurer of United States.

The American Bankers’ Association represents in re­
sources ten billion dollars, which is more than double
the banking power of any other country in the world.
You are the guardians, the administrators of this
enormous active capital. He who appears before you
should recognize the honor and the responsibility. Let
me express my deep sense of both. In response to your
invitation, perhaps you will be willing to hear a brief
discussion of the relations between the Treasury and the
banks as such, as they have been and as they are.
E A fiL Y E N G L IS H P R A C T IC E .

The attitude of governments to the money market
has been, in all lands, in the large majority of cases,
that of the borrower, often the needy borrower, whose
effrontery and persistence have on occasion become bold
beggary, and more than once arrant robbery.
Isaac of York, in Ivanhoe. is the type of the money
market in England in the days of Richard Lion Heart,
with extortion by the lender enforced by torture by the
borrower. English Edward I., in 1275, according to
Hume, was not content to borrow, but seized the whole
property of the Jews, save enough to enable them to
leave the country. By 1297 the stress of his war with
I ranee led him to treat the producers of his kingdom as
he had treated the Jew money lenders, and to levy on
and sell for his own use all their wool and leather and
much other property. When the Lombards mastered the
money market Edward III. fell in debt 1,500,000 florins
to two houses which became bankrupt on that account.
Under the Stuarts the goldsmiths deposited their
moneys for safe keeping in the mint, so that Charles I.
was able to seize there their balance of £200,000, which
he then called a loan. His son, Charles II., improved on
his example, and in 1672 laid royal hands on nearly
£1,500,000 so in trust, and refused to pay at all. After
a while he was driven to admit the interest. The prin­
cipal was cut down nearly 50 per cent., and has become
petrified as the first item, in the national debt—a
monument of kingly finance. Those centuries illustrate
the temper and bearing of governments toward bankers,
as even worse than the popular prejudices of our own
times.
M O D E R N M E T H O D S , B R IT IS H A N D E U R O P E A N .

Modern methods of finance begin at the close of the
seventeenth century, during the activity of Louis XIY.,




which stirred the world. To curb his ambition the
British Government was piling up a debt at interest of
25 per cent, to 30 per cent., when thrifty King William
sought a better way, and m 1694 the Bank of England
was devised to unify the pressing public loans and to
handle them. They were only £1,200,000, and against that
sum Ihe Bank put out its own notes and paid £100,000 for
the privilege. As with other borrowers, this first trans­
action was only the entering wedge. The Government
ran up its debt and in its exigencies made hard bar­
gains with the Bank. In the struggle against the French
Revolution, Pitt forced loans against the protests of the
governors, and when asked to pay £7,186,445, he drovethe bank to suspend payment. The process has gone
on until the Bank holds securities of the overnment for
£20.038,000, and in return enjoys its monopoly and paysannual charges of £175,500. In its issue department it
has been styled 1 an office of the administration; ” ins
finance it is above the Ministry, like a permanent of­
ficial, a genuine Warwick.
The story is akin in all of Europe. The Bank o f
France is a creation of Napoleon in 1796, under the Di­
rectory. Now the only source of paper money in that
country, it has carried on its back successive govern­
ments in their loans. Without a rival in its sphere, its
burden in recent loans has been made light by the mar­
velous response which the French people always give
to the calls of their government for money. The Bank
of Germany is 1he steward of the Empire in its borrow­
ing and general finance. Austria-Hungary uses its:
national bank in the same way for a monopoly of note
issue. In Russia, the Imperial Bank, colossal like the
nation, is really a branch of the administration, its
fiscal agent for borrowing and for handling the debt,
and for creating currency for both purposes.
In all the old world the governments touch the money
markets first as borrowers, and use the banks to secure
funds for the exchequer. They return privileges and
immunities. By these monopolies interest is put up or
down, foreign exchange is controlled, trade is affected,
every industry feels the pressure. The Bank of England
is the model of all these financial engines, master of the
national funds, dictator of the money markets of Britain,
of Europe, and until recently of the world. Long a
fetich in finance, British criticism of its principles, its

BA N KERS’

40

C O N V E N T IO N .

conduct, and its effects lias become sharp, aggressive,
unsparing.
A M E R IC A N E X P E R IE N C E .

Finance has no devices which our country has not
tried. The flood of continental currency was the begin­
ning of our evils. To fund the revolutionary debt, to
create a currency, to provide a way for collecting taxes,
Hamilton called into being the Bank of the United
States. His first aim was to frame “ the most effectual
instrument of loans.” The institution served the Treas­
ury well, but soon became a political force and was per­
mitted to die in 1811. With a new charter in 1816 Jackeon found in it a monster threatening the Government,
seeking “ to concentrate the whole moneyed power.
His removal of the public deposits from it was a chief
factor in politics for a decade. The discussions in Con­
gress and Jackson’s state papers exhibit the prejudice
and frenzy of parties. The chronicles of panic and dis­
aster are lurid enough to the fall of the bank in 1836.
Yet the public moneys it held were never more than
$10,000,000, standing at $9,868,435 in October, 183p.
General Jackson is often represented as waging waxon banks. He did no such thing. He only transferred
the deposits from one central bank, with branches, to
several banks. Outside of politics it was simply a con­
flict between banks, of several institutions against a
monopoly. The larger number won.
D E P O S IT S W IT H T H E S T A T E S .

But the many banks were met by an unexpected
competition. The sales of the public lands increased
rapidly from $5,000,000 in 1834 to $24,800,000 in 1836.
Banks to the number of 788 were started, in large part
to furnish currency to pay for the lands, so that between
1834 and 1836 the bank circulation ran up from $95,000,000 to $140,000,000. Of public funds they held Novem­
ber, 1836, $49,367,986, while they owed other depositors
only $26,573,479. The States were greedy, and wanted
the money. Congress voted to give them all but $5,000,000, in four installments, pro rata. Three were paid,
but this demand with the inflation proved fatal. Specie
payments were suspended, and the last installment was
never paid. For the National Treasury it was just
as well. The States lent this money on real estate,
Congress forbade the Tx-easury to collect it, and it
stands on the books as unavailable funds, $28,101,644.

b rou s d e v ice o f th e C on tin en ta l C on gress, m e t w ith
sc a n t favor, an d is k n o w n o n ly to c u riou s stu d e n ts.

From a Bank of the United States, from local banks
as sole depositories, from deposits of public funds with
the States, from multifarious schemes crude, dangerous,
unworkable, Congress turned, if not in despair, in neces­
sity, to an Independent Treasui-y whose previous career
had been so brief. The Act of August 6, 1846, stands to
this day, and its methods have prevailed longer than any
other device for handling the finances of this Govern­
ment. The maintenance of nine branches in different
parts of the country solves the problem of exchange on
both receipts and disbursements, and brings payments
close to the people. By the designation of depository
banks to receive the postal and the internal revenue, the
friction of collection is reduced to the minimum and the
drain of funds from localities is prevented.
T H E L O A N O F 1898.
If proof were needed that the time is past when a
single bank is needed to place Government bonds, the
Spanish War loan of 1898 affords it abundantly. The
zeal of the banks in subscribing for that loan five times
over deserves all praise for their loyalty and devotion,
and the praise should be extended freely and graciously.
But the offers in small sums from individuals were
twice the amount called for. The floating of that loan
without discount and at a cost of only one-fifteenth of
one per cent, for printing and distribution, records both
the patriotism of the plain people and the excellence of
the work of the Treasury.
TW O Y EA R S OF SU R PLU S.

For two years our financial problems have related to
the surplus. The Spanish war cost much less than the
estimates. General prosperity has given large revenues.
The Secretary of the Treasury has had to decide what to
do with $178,000,000 of unused funds, for the Treasury
was able to spare so much from quick resources, and yet
to retain about $50,000,000 in its own vaults. That is
about the cash kept by the British Exchequer in the
Bank of England; the sum was £10,616,000 last month.
Besides, our Government needs large amounts within
quick reach for emergencies..
The task was to serve the Government, and to re­
spond to the frequent and somewhat urgent appeals for
the relief of the money market. The prepayment of in­
terest could be only a transient measure; bondholders
ODD SC H E M E S.
Bad as the actual experience was, it was not as showed no desire to accept interest in advance on re­
vicious or as grotesque as some methods of dealing with bate.
Stronger measures were adopted and were successful.
the surplus suggested in those days. Secretary Wood­
bury, in 1834, urged V a temporary investment in some Offers were put out November 15, 1899, to buy $25,000,stocks sound and salable.” The next year he favored 000 in old fours and fives at the prices then current, and
f* investment for a provident fund.” In 1838 he recom­ purchases were made of $19,300,650. In May, 1900, the
mended “ purchase of State stocks as In the Indian Secretary of the Treasury gave notice that the twos of
trust.” Think of the Treasury going into the market to the funded loan of 1891 would be paid on presentation
buy $100,000,000 in stocks, and when it needed funds and interest would stop on them August 18. By that
and therefore a general stringency prevailed, offering date $13,231,750 had been paid of the total of $25,364,500,
its securities for sale to unwilling buyers. The Indian and on September 25, $4,700,750 remained unpresented,
trust fund illustrates how State bonds have been suf­ free of interest.
E X C H A N G E O F B O N D S.
fered to sleep undisturbed by payment of principal or
The largest contribution of relief, however, was by
interest.
Other plans by the same secretary were, to designate the Act of March 14, 1900. That provides for the ex­
various officers in the several States, including post­ change of threes, fives and old fours for new consols at
masters, to act as fiscal agents, and again to appoint two per cent.
During the six months which have
commissioners or receivers general to collect and dis­ elapsed, such exchange has been made to the amount of
$332,117,850, which is 39.57 per cent, of the bonds elig­
burse public funds.
ible, to wit: $839,146,340. Of these redemptions, $76,T H E IN D E P E N D E N T T R E A S U R Y .
Discussion resulted in the passage, July 1, 1840, of 337,000 was in threes, being 38.4 per cent, of that class;
President Van Buren’s project for an Independent $202,659,900 in old fours, 37.16 per cent, of that class,
Treasury, which the Whigs repealed August 1 of the and $53,120,950 in fives, b.eing 55.91 per cent, of their
next year. The Treasury was so poor that the banks total last March. In the exchange the Treasury paid
derived little benefit. Congress tried to set up a Fiscal out $33,169,060, and a net saving of $8,418,205 was made
Bank, and a month later a Fiscal Corporation, to take to the Government in the transactions, while there was
the place of the Bank, of the United States; but both no increase of the public debt.
The Treasury, September 14, held of bonds subject to
were crushed by vetoes of President Tyler, August 16
and September 9. 1841. His own fantastic scheme of a exchange, $23,377,630 for circulation, and $40,379,080 for
Board of Control or Exchequer, not unlike the cum­ deposits. For these new consols may be given, and if




B A N K IN G S E C T IO N .
that were done, they would become $395,874,560, and the
net saving over ten million dollars, with payment in
premiums of $-10,000,000.
As a consequence of the provisions of thé new finan­
cial law, the bonds pledged for national bank circulation
ran up from $239,947,270 on March 14 to $296,172,880
September 15. The whole volume of bank notes, includ­
ing those secured by money, increased between the same
months by narly $80,000,000, and became $327,690,801.
D E P O S IT S IN

N A T IO N A L B A N K S .

A greater addition to the available resources of trade
and industry was the deposit of public funds in the na­
tional banks. This was not a new device, but an en­
largement of a well established practice.
Deposits were granted to every bank applying with
proper security while the surplus permitted, and about
$50,000,000 was kept in the Treasury. The moneys so
placed were at their maximum February 10, 1900, at
$109,094,878, including the credit of disbursing officers,
and were reduced to $96,410,498 by September 18. The
depositories number 440, and they are found in every
State except Mississippi and Nevada, and every Terri­
tory except Arizona and the Indian Territory. The
banks holding $50,000 or less are 170; from $50,000 to
$100,000, 93 ; from $100,000 to $200,000, 87; from $200,000
to $500,000, 61; from $500,000 to $1,000,000, 19; over
$ 1,000,000, 10.
May 23, to prepare for payment of old twos, a call
was made on these depositories pro rata, and in June a
second and a third call followed, to the aggregate of
$14,853,700. No single institution, no one city could
have paid that money more promptly and with less fric­
tion than did these four hundred and forty banks all
over the country.
C O N T R A C T IO N

AVERTED.

This is the plain story of the putting out-of $178,000,000 from the Treasury, above current expenditures.
With its mingled verdure and blossom and fruit, the
orange grove of the Indian River of Florida, or the ex­
tensive ranches of Southern California, is a triumph of
arboriculture. More rich in its yellow fruitage is the
policy which from the Treasury scatters to all marts
the treasure which no orchard can equal, which serves
more human needs than orange or apple or pomegranate.
A severe contraction would have followed Govern­
ment operations running loose, without such care and
vigilance. The funds were left to fructify in the marts
of trade. Largely available for any emergency, the busi­
ness of the country had the benefit of them. The full
force of the national wealth was turned upon all the
enginery of industry, of commerce and of finance.
•

th e

m oney

m a rket

.

The chronicle is brief, but the facts are impressive
and the results are conspicuous. Except for the flurries
in November and December, 1899, which were entirely
apart from Treasury operations, quotations for call
money have not been above 5 to 7 per cent., and then
for only a short period, while the ruling rate, although
touching 2%, has ranged from 1V4 to 2% per cent. Prime
commercial paper has found sale from 3 to 4, and sel­
dom has the quotation been above 4t&, though occasion­
ally touching 5 per cent.
These low rates for money, the lowest in the world,




41

have brought Russia and Britain to borrow from us, and
Japan and Sweden to seek loaDs here; last of all, Ger­
many takes $20,000,000 of our money. New York has
become one of the two financial centers of the world.
Without the outflow from the Treasury all this would
have been impossible.
We all rejoice at large exports of Wheat and corn and
meat products. We each feel a personal pride in Ameri­
can mastery in iron and steel manufactures, and accept
it as a compliment to ourselves. When the London
Times says that America makes better locomotives than
the English, our hearts beat quicker. In the export of
$20,000,000 worth of coal this year we each claim a
share. Russia buys from us in one lot 5,000 fat cattle,
and no farmer regrets the trade. We count it fortu­
nate for all our people that we exported of our manu­
factures $432,284,366 last year, which is more than the
total of all our merchandise exported as late as 1870.
The balance of trade in our favor for three years aver­
ages $569,946,396. To our stock of gold every year since
1896 has been added more than $100,000,000 on the aver­
age—a record never before known among nations. The
gold in circulation, including certificates, has reached
$831,084,025, which is more than all our currency prior
to 1880, and is $10.68 per capita of our population, which
is higher than the total circulation in 1862.
In spite of the vast outflows, the gross gold in the
Treasury is the largest it ever held, $437,221,191, and it
is growing. Except the abnormal hoard of $450,000,000
of the Bank of France, likely to be soon reduced, there
is nowhere else in the world so much of the yellow metal
under single control. If this flow of gold shall satisfy
the appeal for more money, how healthy our currency
will be !
The wealth of our people by the new census will not
fall below $90,000,000,000, and their annual net produc­
tion is at least $2,500,000,000. This wealth and this
growth are beyond parallel in human annals.
They explain why the world comes to us to borrow.
But those who borrow from us must pay with interest.
It is just as healthy for us to, export gold as it is to ex­
port coal or iron or cotton or grain or pork or beef, ex­
cept as more labor enters into those articles.
In such facts as letters, American bankers hang out
their sign, like a planet in the heavens: Money to lend to
the nations; gold galore to spare. But fair notice is
served that the yellow metal must come back, for of all
countries now and hereafter, this is the home of gold.
And now, Mr. President, will you permit me' to say
that there could be no grander object lesson than has
been presented upon the floor of this Convention to-day.
The statements from the various commonwealths have
shown that they are all pursuing the same career of in­
dustry, development and prosperity. As bankers they
base their own welfare upon the intelligence, the educa­
tion, the industry and the religious aspirations of the
communities which they serve. And how happy we are
that from all the commonwealths of the Republic we
are gathered here under the starry flag which represents
the aspirations, the Civilization, the humanity and the
progress of the race beyond any emblem ever before dis­
played among men; and this banner never before repre­
sented all that is highest and noblest in human effort
than at this very day and this very hour.

42

BA N KERS’

C O N V E N T IO N .

The Financial Future o f the United States.
B y C harles A. C onant .

Several receut events Irave called attention in a strik­
ing manner to the changes which have come over the
economic worid within the last few years. A period of
stagnation in business which lasted for many years has
given place to phenomenal activity in Europe, in the
United States, and even in the partially developed coun­
tries of the Orient. This activity has been especially
marked in this country and has been accompanied by
changes in our commercial and financial condition which
have attracted the attention of shrewd financiers and far
sighted students abroad as well as at home. Much of
the foreign capital by which the company was developed
prior to 1893 was withdrawn from the United States
after that year by the process of returning American se­
curities which had been issued or sold abroad. This
process was at first one of intense suffering to this coun­
try, by depriving us of necessary working capital, arrest­
ing industry and throwing labor out of employment.
But we are now witnessing a new phase of this de­
velopment. Sending abroad an enormous volume of our
products and increasing our exports of manufactures
within five years by much more than one hundred per
cent., we have built up credits which have enabled us
to subscribe to several large foreign loans from our sur­
plus savings. Russia, Japan and Great Britain have
touched the fountain of our credit and abundant streams
of wealth have gushed forth for their use.
The United States in the meantime have become a
colonial power and are profoundly interested in the
settlement of the future of China. It is probable that the
interest awakened in the affairs of the Orient will lead to
large investments of American capital in China and the
Philippines, and that the securities issued for these invest­
ments will be quoted on the stock exchanges of the world,
like the bonds of the Egyptian Government or the Greek
guaranteed loan. All these events have contributed to
bring New York into the circle of international money
markets and have raised the question whether the star
of financial supremacy was not to move westward from
the precincts of Lombard street to our own chief city.
These expectations may require time for their fulfill­
ment, but it is already evident that New York is to be
a more important factor than heretofore among the
money markets of the world, and may at least dispute
for the second place after London with the long estab­
lished and wealthy cities of the Continent.
The magnitude of the transactions now carried on in
New York is shown in a slight degree by the settlements
through the Clearing Hoitse, which rose from a little less
than thirty thousands of millions ($29,841,706,924) in
1895 to more than fifty-seven thousands of millions
($57,368,230,771) in 1899. Higher figures than those of
1895 were attained in certain earlier years of active busi­
ness operations, but the volume of clearings was then
swelled by Stock Exchange business, which was greatly
reduced by the opening of the Stock Exchange clearing
house in 1892. If the old method of Stock Ex­
change settlements had continued, it is not unlikely that
the clearings of last year would have attained seventyfive thousands of millions, or an increase of more than
50 per cent, over the highest previous record in 1881.
The actual figures of the clearings at New York are
larger by twenty-five per cent, than those at London,
heretofore the great clearing house of the world, and
nearly three times the payments into the Bank of
Prance, which operates as a sort of clearing house for
the traffic of France. The volume of the obligations of
the national banks to their country correspondents is
added evidence of the volume of business whieh is center­
ing in the hands of New York financiers. The obliga­




tions of New York national banks to other banks, includ­
ing State and private banks, which were only $173,000,000 in 1889, rose to more than $425,000,000 by the last'
report to the Comptroller of the Currency. New York
thus fully justifies the declaration of Mr. Horace White
that the city is “ a clearing house for the whole country
as well as for its own immediate traffic.”
Supremacy among the money markets of the world
comes only by a combination of favorable conditions. It
comes partly as the result of industry, thrift and enter­
prise, which create a great investment fund after the
necessary machinery of production and exchange has
been fairly provided at home, but it comes also as the
result of far sighted and well directed policy in legisla­
tion and in business methods. The part of legislation is
small, so long as freedom is left to native skill and enter­
prise to develop along natural lines. Legislation becomes
important in many countries as a disturbing and retard­
ing factor in business progress, and it is against such
legislation that intelligent business policy should be di­
rected. The part which positive legislation has to play
in national economic progress is chiefly to afford the
guarantees of security and order, the execution of con­
tracts according to their honest terms, and the enforce­
ment by law of the highest principles of business honor.
Beyond these limits its interference is usually harmful
and often hampers rather than advances a country in its
progress toward industrial and financial supremacy.
There is one important prerequisite to financial power
in which legislation plays an important part. This is in
giving permanency to the standard of value. It has been
pointed out so often that it has become a byword, but is
none the less true, that London owes much of her pre­
dominance in the world of finance to the fact that a, con­
tract for the payment of money in London has meant for
nearly a century one thing and no other. A contract for
the payment of a given number of pounds sterling has
meant the delivery of a certain weight in gold. The
creditor having a debt coming to him in London has been
subject to no uncertainty as to whether he would be
tendered irredeemable paper, depreciated silver or gold
coin adjusted to some new standard. When the Bank of
France was authorized to suspend specie payments in
1870, and when by the course of events its option to pay
either gold or silver became an optiop to diminish the
value of a gold obligation, financial supremacy fled from
Paris. Trifling as might be the premium upon gold
caused by refusal to pay it on demand for bank notes,
the difference was sufficient to drive from Paris to Lon­
don the great operations of international exchange which
turned for their profits upon minute fractions of percent­
ages. London, by constituting a free market for gold and
adhering to a fixed standard, without variableness or
shadow of turning, has drawn to herself the command of
the world’s exchanges.
The United States has recently planted herself by theside of other great commercial States by prescribing that
a given weight of gold shall henceforth constitute the;
metallic standard If this declaration is established be­
yond dispute or probability of change, it equips this coun­
try in this respect to compete with London for control
of the exchanges of the world. The fact that the country de­
clared for the gold standard in 1896 and that she has now
put that declaration into law had much to do with the
prosperity of the last few years.
If evidence were
needed that the adoption of a fixed monetary standard
and the abandonment of a fluctuating standard meant
much for the country adopting such a policy, it is demon­
strated also by the experience of Russia. Adopting thegold standard only in 1895, and putting it in force com-

B A N K IN G
pletely only as recently as 1897, foreign capital poured
into the country for industrial development at such a
rate that stock companies were organized within five
years with a combined capital of more than $600,000,000,
or more than within the entire ninety years before.
Another vital element in attracting to our chief city
the exchanges of the world is freedom from vexatious
interference by taxation or legal restrictions with the
transactions of organized markets. The Stock Exchange,
in spite of the bad name which it bears among the ig­
norant and unthinking, is the sensitive barometer of
values. It diverts industry and capital by changes in
the prices of securities, from unprofitable fields to the
fields where they benefit the community. It prevents,
so far as human foresight is possible, the waste of the
great forces of production where they are not needed
and extracts from them the highest good of which
they are capable. Everything which interferes with the
free play of the many influences which affect prices on
the exchanges is a disturbing element in the truthful
reading of this barometer of values.. It is like placing
iron filings near a mariner’s compass and expecting it to
read true. Not only is the true reading impaired, but
transactions under such conditions are driven to points
where true readings can be obtained—where the free
play of competition and the laws of value are unim­
paired by the meddling of those who do not comprehend
the philosophy and use of organized markets.
Striking illustrations of what harm may be done by
excessive taxation and by unwarranted interference have
been afforded within the last five years in France and
Germany. Heavy taxation in the one case, the foolish
attempt to stamp out “ future ” trading in the other, have
fettered the markets of Paris and Berlin and driven
much of their business to a less restricted field. Brus­
sels, the capital of the energetic little kingdom of Bel­
gium, has profited by the blunders of her rivals, and
within five years has multiplied nearly twenty-fold the
issues of securities upon her exchanges. These illustra­
tions haA^e a serious lesson for us if we would attain a
leading place in the world’s finance. Reasonable regu­
lation of new stock company issues to prevent fraud are
justifiable and have not hampered honest transactions
in London, but legislation directed by a hostile spirit
against the stock exchanges and designed to hamper the
free play of the competition which fixes values means
the death knell of the market against which it is directed.
There are many material respects in which steps may
be taken to strengthen New York as a center of ex­
changes. Here the aid of the State may well be invoked
to provide adequate lights and docks and deep and safe
harbors, suited to the modern ocean liner; and to insure
equity between railways and their patrons, in order to
prevent discriminations against individuals and com­
munities. This is not the occasion for raising a discus­
sion in regard to tariff laws: but it may properly be
pointed out that the policy of customs duties should not
be enforced in such a manner as to cause needless an­
noyance to merchants or to impose unnecessary for­
malities upon American exporters in getting the benefit
of free raw materials. The history of the free cities of
Germany, whether it would be a good guide for our imi­
tation to-day or not, shows how much may be accom­
plished in an age of trade restrictions by establishing
centers where trade may be carried on under conditions
of freedom unhampered by chimsy regulations, which are
often as oppressive as exactions in money. Freedom of
trade to all the world, freedom for the use of London
docks and warehouses and ships, without official inter­
ference, have done much to make London the world’s
warehouse and England the world’s carrier, and to leave
sticking to English fingers much of the profit of the
handling of goods between producers and consumers.
If the producers and manufacturers of the United
States, ha\'ing already risen to the level of supplying the
domestic market with the great staples of consumption,
are to go forth to conquer the markets of the world, they




SE C T IO N .

43

must organize production and exchange upon the basis
of the greatest economy and efficiency. The aspect of
this organization which comes closest home to the banker
is the system of credit. Just so far as the American
banker is compelled to charge a higher rate for credit to
the producer than the foreign banker charges, the Amer­
ican producer must be handicapped in the struggle for
control of the world market. A difference of one or two
per cent, in the rate which the producer pays to the
banker for the use of money might make the difference
between his ability to lay down goods at Cape Town, at
Tokio, at Shanghai, or in the interior of China on terms
as favorable as his competitor in England, France or Bel­
gium, with their great systems of credit and interna­
tional banking. The subject of reducing credit to its
lowest terms and highest efficiency by the most complete
organization and the best monetary system is the con­
tribution which the American banker should make to the
solution of the problem of carrying American commercial
supremacy in the wake of the flag around the girdle of
the earth.
There are several steps which should be considered
in the organization of American banking upon a more
effective basis for competition with the powerful Eng­
lish and Continental banks in the financing of foreign
trade. It is a striking commentary upon the closeness
with which American banking has thus far kept at home
that almost all our trade with Latin America is settled
by bills of exchange on London, and that even the Gov­
ernment of the United States does its business in our
new possessions in the Orient through the great Eng­
lish institutions—the Hongkong and Shanghai Bank and
the Chartered Bank of India, Australia and China. Con­
solidation of capital, the authority to establish foreign
branches, the extension of long credits in foreign trade
and the application to banking of the highest organizing
ability of the American mind are the share of the Ameri­
can banker in the task allotted to our captains of indus­
try and kings of finance in conquering the trade of the
world. If greater elasticity and freedom in note issues
at home will make credit cheaper and more plentiful in
the South and West and increase their capacity to pro­
duce cotton goods and to move their products, the bene­
fits of a more elastic banking system should be con­
sidered without prejudice by every American banker.
The reduction of the rate of interest in sections where it
is abnormally high will not mean smaller profits to the
banks, but the larger and safer business which comes
with increased commercial prosperity.
Every measure of this sort, to which contributions
can be made by the manufacturer, the captain of indus­
try, or the American banker will be an important ele­
ment in that struggle for world empire which is to be
fought in our time or by our children in the field of busi­
ness competition. The axis of the world’s economic revo­
lutions in the future may be shifted violently by the
progress of events, and is almost certain to be shifted
from the people whose methods are loose, wasteful and
inefficient to those whose machinery of production and
exchange is developed in all its parts to the highest de­
gree of economy and productive poAver. New problems
of the most serious character in the competition for mar­
kets will face the world with the completion of the transSiberian Railway, the creation perhaps of new centers
of trade in Central Asia, the binding of North and South
Africa together by bands of steel, the opening of China,
and the application of electricity to the thousand func­
tions of machine production. The perfection of ma­
chinery and means of transportation have swept away
the barriers between local markets and reduced competi­
tion everywhere to its most acute form—competition
against the producers of all the world. The American
people cannot afford to be idle spectators of the struggle
between other producing nations for comercial suprem­
acy. They cannot afford to hamper by their laws the free
play of modern economic forces or to skulk away from
a contest in which they may be easily masters if they

44

BA N KERS’

C O N V E N T IO N .

go forward with enlightened minds and a courageous
spirit.
*
I have spoken to sopie extent as though the financial
supremacy of the United States centered about the de­
velopment of the city of New York. But it is far from
being a local problem. The interests of New York and
of the whole country are bound up together so tightly
that they cannot be separated. Prosperity throughout
the whole country is vital to the accumulation of that
great fund of capital which naturally flows to the com­
mercial center to find investment and profit. Every
factor which tends to broaden the basis of American pro­
duction, to increase the market for American products
of the field, the farm, and the workshop, or to improve
the credit facilities of the interior and producing dis­
tricts, tends to broaden the pedestal of wealth and na­
tional prosperity, upon which New York must have her
firm footing if she is not to slip and fall in the struggle
for financial supremacy with her great rivals in the Old
World. New York cannot profit by a narrow or selfish
policy toward other parts of the country, and least of all
can the bankers of New York or any of the great cities

profit by a severe or .iealous policy toward their asso­
ciates in the country. Every step forward which New
York makes, on the other hand, in the struggle for su­
premacy in the money markets of the world is a step
which lifts up and benefits the whole country. The abil­
ity of New York to find investments abroad for American
earnings or to attract foreign capital to American invest­
ments are distinct factors in raising the rate of profit and
the earnings of all Americans, whether they toil under
the burning sun of the Southern cotton field, run the en­
gines which drag long trains of American products from
the prairie to the ocean, or clip coupons in a Newport
villa. The ability to place capital abroad, to find mar­
kets for American products beyond our own shores, to
extend credit on the lowest terms to American manufac­
turers and merchants—all these powers, developed to the
finest shade of superiority over foreign competitors,
mean a wider field of employment for labor, a larger
fund of American earnings to divide between the laborer
and his employer, larger profits for American bankers,
and a more rapid and satisfying progress for the whole
country as well as for New York as her chief city.

The Edttcation o f a Banker.
B y G eorge H ague , G eneral M anager M erch an ts’ B ank of C anada.

That banking is a profession worthy to rank amongst
what are called the learned professions, and that its suc­
cessful pursuit demands considerable exercise of high
intellectual qualities, will be admitted by any man who
has an adequate acquaintance with the subject. Its suc­
cessful prosecution demands not only a perfect acquaint­
ance with the multiplied technicalities of a banker’s
business, but no inconsiderate knowledge of human na­
ture; some knowledge also of the laws relating to prop­
erty and finance; a perfect acquaintance with the condi­
tions of the trade and manufactures of his own district
and of the country at large; in addition to which a
banker must possess some acquaintance with the ways
in which money is made and lost, and especially of the
shoals and quicksands which beset the mariner along the
financial seas he has to traverse. He must also have
more than an average amount of common sense, a well
balanced judgment, and the power of looking beneath
the surface, and of weighing and balancing statements,
reports and appearances, so as not to give more or less
heed to them than they call for.
It was once said by a Scotch university professor to
a rather stupid student, “ Mon (he spoke in his native
Doric), I can teach ye Latin and I can teach ye Greek,
but commonsense is beyond my power tae gi* ye; if ye
ha’e na that ye air to be pitied.” Well, that is perfectly
true, so far as college education is concerned, but much
of what is nearly allied to commonsense may be rubbed
into a man by the actual experiences of life, unless, in­
deed, he is such a dense fool that no amount of experience
will make him wise. There are such, as we all know; and
of all fools, the conceited fool is the most foolish. The man
that thinks he knows everything, and that what he does
not know is not worth knowing, will find that he has to
deal with a very critical world, which will not buy him
at his own valuation. And if he has to do business with
the world, he will have to pay some measure of atten­
tion to what the world thinks. We may, in fact, apply
to the judgment of the world—that is, to that corner of
it writh which we each have to do specially—what old
Abraham Lincoln said about fooling men: “ You can
fool all the world a part of the time, and you can fool
a part of the world all the time, but to fool all the world
all the time is impossible;” So, if a banker proceeds on
the theory that the world is always wrong, and about
all things, this world will be apt to let him severely alone
and do no business with him.




In a word, then,"'a man, to be a good banker, must be
willing to learn, apt to note his mistakes, watchful of his
failings, and ready to set up for his own guidance á
beacon here and a buoy there; and not only from his own
experience, but the experience of others. In fact, he will
be willing to learn as long as he lives; for a banker’s
education is really never finished, and as he proceeds
{'«long the journey of life toward its close, he will feel
like old Michael Angelo in his last days, who said sor­
rowfully that he was about to abandon art as he was
beginning to know what art was.
Banking, then, we may properly call a profession. It
is, indeed, and deserves to be called, one of the learned
professions; for the administration of a large bank calls
for as much intellectual power as is required by the
men who write treatises on political economy, and whose
names are familiar in the world of literature. I venture
to say that there are letters written and documents pro­
duced at times in any great banking center by brokers
or financiers which are equal in intellectual rank with
any chapter in Mill’s “ Political Economy ” or Smith’s
“ Wealth of Nations,” and display as much acuteness as
any eminent lawyer’s argument or any speech of Web­
ster or Glay. And it is not unnatural that it should be
so, for a banker’s facilities are constantly sharpened by
the consciousness that if he makes mistakes he will have
to pay the penalty for them in the shape of losses. An
author may propound unsound theories and set forth un­
workable schemes, and all that he has to fear is that an­
other man will write something to the contrary, but a
banker exercises his faculties unddr constant penalty of
monetary loss. So it was said, not long ago, by a banker
to a journalist, that if all the mistakes made by the writ­
ers of books, and all the misjudgments of critics, were
followed by penalties as severe as were paid by bankers,
and the amount paid to the State, a sum would have
been accumulated long ago sufficient to pay off the na­
tional debt.
Serious consequences indeed follow the mistakes of
men in the learned professions, as, for example, I once
knew an oculist attending upon a patient whose diseased
eye required removing, to take out the sound eye and
make the patient blind for life. And if a lawyer makes
a mistake he may deprive his client of property and re­
duce him from competence to poverty. In every civil­
ized State, therefore—and the degree of civilization in
any State may be measured by its care for the lives and

B A N K IN G
property of its citizens—provision is made for the edu­
cation both of men who care for life and of those who
care for property, and none are allowed to meddle with
. these important matters but those who have the im­
primatur of duly constituted bodies.
The State, however, has not recognized banking as a
profession, and has not made provision for the education
of bankers. Yet mistakes in banking may result, and
have resulted, in matters both of life and property, in
more widespread disaster and heart-breaking misery,
more undermining -of health, and sending men and
women to premature graves, than all the mistakes of all
the lawTyers and doctors that ever lived. A strong state­
ment, but not beyond the truth. Let me recall one exam­
ple out of many, and that from banking in the country
which has been considered to have carried banking to its
highest perfection. Well do I remember the failure of
the City of Glasgow Bank, and the frightful calamities
that followed in its train. The families that were re­
duced to ruin, the widows that lost their little all, and
the young people whose prospects in life were irretriev­
ably blighted, the men and women whose health was un­
dermined and who died of broken hearts after years of
suffering—all this, if fully told, would form almost as
melancholy a chapter in history as a story of the calami­
ties of war. We have had, within the last few years, in
the city whence I come, two examples of the sad conse­
quences of banking mistakes. In the one case, an old
and solid institution, that had withstood half a century
of vicissitudes, was wrecked within five years, by being
placed in charge of a young officer of high ambition but
wretched judgment, the consequences of whose follies
are being felt in thousands of families In Canada at this
day. A more recent case is one where a man of ability
in another department of finance, being placed in prac­
tical charge of a bank without previous training, pursued
a course which brought disasters which are working evil
results over a wide area at this moment. There are men
and women in my own district who are wearing out their
lives in hopeless misery as a direct consequence of this.
Am I not right, then, in asserting that mistakes of judg­
ment in banking are often more serious in consequences
than mistakes of lawyers as to property or even of medi­
cal men as to health ? All of which might lead up to the
conclusion that some system of State education might
well be set on foot for bankers, and that no man should
be permitted to have the control of a bank who has not
been duly certificated by an authority recognized by the
State. This, however, is impracticable. The State does
lay down the lines on which^ banking corporations are to
be constituted, and makes regulations as to the liability
of stockholders, the power of issuing notes, and numer­
ous other matters. But while giving power to directors
to appoint what officers they please, the State has never
attempted to regulate their qualifications. It might be an
advantage if some system of education for bankers could
be instituted, as there is fpr other professional men, and
that a body of young aspirants bearing diplomas were to
be found available for appointments as they arise. This,
however, cannot bp undertaken by the State; but there is
no reason why something analogous to it might not be
undertaken by a united body of bankers like yourselves
or by the Association in Canada I have the honor to rep­
resent. You yourselves have made a movement in this
direction. And "the Canadian Association has done some­
thing analogous by offering prizes to bank officers for
good essays on banking subjects. Both England and
Scotland have also done something similar.
The purpose of this paper will be to indicate briefly
the broad outlines of what the education of a banker
should be—not so much theoretically as practically—that
is, to indicate the course of training that will fit a man
for the discharge of the duties of a banking office, as
clerk or teller, until he arrives at a position where he
controls operations connected with the commerce and
manufactures of his district, or even has a bearing on
ihe settlement of the currency of the country, or the di­




S E C T IO N .

45

rection of the financial affairs of the Government. I
name the last as you have, at this very time, a conspic­
uous instance of it in the fact of a practical banker, Mr.
Gage, of Chicago, formerly one of yourselves, being
called to the responsible office of Secretary of the Treasurjr. And without intruding upon matters that do not
belong to me, I might venture to say that this is an ad­
mirable precedent to be followed.
I am not aware that anything like this has ever been
done in England. But I do know that a remonstrance
from our Canadian Association against silver being al­
lowed to form part of the reserve of the Bank of Eng­
land had great woight with the Chancellor of the Ex­
chequer.
In speaking of the education of a banker, I shall first
refer very briefly to that which concerns subordinate
officers. A young man before entering a banking office
we must presume to have been well grounded at school
in what are called the three R’s—reading, writing and
arithmetic—and particularly the last; and the more he
knows of it, and of mathematics also, the better it will be
for his future progress. In beginning a banking career,
the young aspirant learns to use his eyes and his fingers
before he uses his brain. He learns to eount money ac­
curately under penalty, and to note sharply the money he
counts, also under penalty. He has to draw on his school
education for facility in calculation, and also for a
knowledge of the geography of his own and other coun­
tries in connection with bank collections and foreign
bills. He has to learn what constitutes a good bill—not
the goodness of the names on the bill, but the legality of
the document. As he proceeds, he passes on from work
that is merely mechanical to work that is more and more
intellectual. But he will soon find out that, as a lawyer’s
clerk is not a lawyer, and a doctor’s assistant is not a
doctor, so a bank clerk, however high his position as
such, is not a banker. You all remember our friend,
David Harum, and the description of him by his fac­
totum, Chet, who, after enumerating his own work as a
clerk and expressing the opinion that the “ real busi­
ness 7 was all left to him, went on to sagely observe:
“ ‘ Dave don’t give himself no trouble about the business.
All he does is to look after lending the money an’ seein’ th a t it
gets paid when the time comes, an’ keep track of how much
money the’ is—here and in New York—-an’ what notes is cornin’
due, an’ a few things like th at.’ ”

all which well justified his shrewd employer’s remark
that i it hain’t rained wisdom an’ knowledge in his part
of the country for a eonsid’able spell.”
There is this, however, to be said, that though a bank
teller is not a banker, any man to be an efficient banker
must have gone through the grades of the office. You
may reply that David Harum had not; that he could not
have done the work that his clerk was doing. But David
was only a village banker; if he had been placed in
charge of a bank in a city even of the size of Syracuse,
his deficiencies might have ruined him. A banker’s edu­
cation, then, must begin at the beginning. But as he pro­
ceeds, his training will develop watchfulness, concen­
trated attention, accuracy in counting and calculating,
all which, after penalties have been endured—and they
will certainly come—crystallize into habits, and lay the
foundation of the same qualities when applied to higher
matters—that is, the dispensing of credit, the discounting
of bills, and the conducting of accounts. The officer will
gradually develop his intellectual faculties in learning
something of the law governing his occupation—the law
of bills and cheques, and deposits and drafts, and guar­
antees and indorsements, and warehouse receipts and
bonds and mortgages—and these not theoretically, but as
enabling him to know, when he is handling and register­
ing banking documents, whether they are drawn up ac­
cording to law or not—for a bill may have the best names
in the country on its face, and be utterly void and irre­
coverable, because not conformable to law. He must, in
fact, become so practiced that he can tell at a glance
whether a security is in proper shape or not.- Along with
all this will proceed the education of the eye—the devel-

46

BA N KERS’

C O N V E N T IO N .

opment of the faculty of quick observation which will
enable him to detect a forgery in a bill, a false signature
on a cheque, or a raised note or draft. The eye may be
educated to a degree of sharpness that would seem al­
most miraculous to an outsider, so that no forgery, fraud
or false coin could possibly escape detection. And a
majority of bank officers come fairly up to this standard.
Certain moral qualities in the training of an officer
must not be overlooked, such as the habit of obedience,
of courtesy, of patience—often sorely tried—of close at­
tention to directions, of economy of time, of thorough­
ness in work, and of conscientious discharge of duty as
duty. Many fellows, indeed, go through the whole round
of bank employment, and at the end of it have but a mere
smattering of such knowledge as is here indicated, and
have almost as many bad habits as at the beginning.
Sometimes this is their own fault. They are too stupid
to learn, or too proud to obey, or too conceited to submit
to direction. But in many cases, it is to be feared, the
fault is with the banker himself in not properly training
his men. It is really his business and duty to educate his
officers, and this by insisting at all times and with every
man that work is not only to be properly done, but in­
telligently mastered; that rules are to be observed, time
kept, and penalties to be enforced. Knowledge so ac­
quired will never be forgotten. The best friend of a
young bank officer is the cashier who strictly enforces
discipline, his worst enemy the one that lets him do as
he pleases. Banking is a profession that cannot be
played with. A man who has had an easy-going superior
and grown up to an easy-going style of doing subordi­
nate work is apt to carry the same spirit into a higher
position. We know the mischief that an easy-going
banker may do. I have known such a one cause a loss of
millions.
One of the most important duties of a cashier is to no­
tice indications of ability. When a young man not only
does things, but wants to know the reason why; when
he suggests improvements in methods and economy of
time, or notices the irregularities in the working of ac­
counts and communicates them—such a one should not
be snubbed, as the manner of some men is, but drawn
out and encouraged, and made use of, and made to un­
derstand that he is appreciated. For no man should be
too proud to take a hint from a subordinate.
So much with regard to practical training; but during
the period of his education as clerk, a bank officer will
do well to carry on the education he received at school or
college, by mathematical study; geometry and algebra
especially are useful, as they tend to develop habits of
close attention and strict reasoning, the latter being in­
valuable in training a man to know fads and fallacies
when he sees them, and to, appreciate sound argument.
It would be well, also, for him to study, as he can, the
theory of banking, and the banking of different coun­
tries, also systems of currency, both false and true, and
political economy generally. So much importance is at­
tached to this by some banks that they will not pro­
mote an officer to some of the higher positions unless he
can pass a critical examination in them. The Institute
of London Bankers gives not only prizes to successful
candidates at its examination, but diplomas which are
highly valued and which carry weight.
But now, supposing a man to have passed through
this preliminary training, in which if he keeps his eyes
and ears open he will learn a thousand things that can­
not be learned from books, he will be prepared to enter
upon the responsible functions of a banker as distin­
guished from a clerk. And here, to begin with, he must
not fancy that his education is finished, for, in fact, as
in the case of the learned professions, it will in many
respects have only begun. When the young aspirant is
appointed to the position of a cashier or manager, he Will
do well at the outset to bear in mind the saying of the
good old book: “ Let not him that putteth on his armor
boast as he that putteth it off.” I have known more than
one self-confident and boasting banker, and he nearly




always came to grief. On the other hand, a man must
not let his cautiousness and sense of responsibility so
dominate him as to make him too nervous to do any­
thing. There are numerous rocks and shoals in the voy­
age of banking, truly, but hundreds of mariners have
navigated their ships successfully through them.
As a young banker’s practical education proceeds, he
will find that the duties of one in control of a bank may
be summed up under three heads—the management of
his Officers and his office; the management of his Re­
serves, and the management of his Loans and Discounts.
Of the management of his officers enough has been said,
and I shall pass on to the second—namely, the manage­
ment of his Reserves. Around this he will come to find
that every department of his business revolves. The
care of reserves dominates everything. I have known a
bank, though worth millions, brought to the brink of
ruin through want of care in this respect. The moment
a man receives the deposits of the public and issues notes
for circulation, he is face to face with the question, how
much of all these funds he can put out at interest with
safety; for put out some of it he must. If he does not
lend a certain quantity, he cannot pay interest and divi­
dends. If he lends too much, he imperils his power to
pay his depositors on demand. He is therefore always
under pressure in two opposite directions, and it is part
of a banker’s education to know how to steer his ship
between this Scylla and Charybdis. Your law requiring
a reserve of twenty-five per cent, is a sort of standard
set up for a banker—not that it is absolutely efficient,
for the banks of the United States at times must infringe
the law to keep faith with their creditors. That you
know very well—which is the reason why the Canadian
banks have resisted the imposition of such a law at all.
But though this is the minimum, there are times when
prudence would require more; there are other times when
safety may be insured with less. And to this end the
banker will make himself acquainted with the tides and
currents of money in his own sphere, at one period and
another, for there are tides in money as there are in the
sea. And a banker will educate himself to observe them,
record them, and draw conclusions from them so as to
act both for prudence and profit. What is suitable for one
sphere and for one bank is not always suitable for an­
other, yet there are certain general principles which must
on no consideration be overlooked; and with regard to
these, your law may be considered a useful general
guide.
Vitally connected with the management of reserves is
the consideration of how much of the reserve may be in­
vested so as to yield interest. All banks, especially those
having large deposits and heavy engagements, after re­
serving enough, according to experience, in actual cash
—i. e., gold and Government notes, to which may be add­
ed balances due them by banks in larger centers—find it
prudent to invest considerable sums in convertible se­
curities and call loans, rather than in discounts. Their
first line of defence, so to speak, is their cash; their sec­
ond is in these interest-bearing investments. But the
quality of these is just as important as that of the dis­
counts, for money can be lost here as well as in making
loans to merchants; and no small part of the education
of a banker is to learn the high art of getting the best
interest out of investments combined with perfect safety.
Reserves, of course, may fluctuate in amount, accord­
ing to the times. There are seasons when, as has been
said, they may be safely allowed to run to a minimum,
but even then the wise banker will always be scanning
the financial horizon. The “ cloud no bigger than a
man’s hand ” may quickly overspread the heavens and
bring a furious storm. It is sometimes when men say
“ peace and safety ” that they are in the greatest dan­
ger. But there are times of financial difficulty which the
merest tyro can see the signs of, and then it will be for
him to closehaul his barque and run with reefed or
double reefed topsails, or, in other words, to carry large
reserves and be prepared for any emergency. I say he

B A N K IN G SE C T IO N .
can foresee this; otherwise he may have to realize in­
vestments at a heavy loss, or to call in his loans, with the
result spoken by Hotspur to Owen Glendower: “ They
will not come when he doth call for them.”
But that which bears most intimately on bank re­
serves is the great question of Loans and Discounts.
How much to lend has already been determined, but to
whom to lend and how much to each? And for how
long? These, simple as the questions may seem, are
matters in which every practical banker may go on
learning for a lifetime. The high and .responsible func­
tion of dispensing credit is that which distinguishes the
banker from all other-persons, and how responsible the
function may be we may conceive in considering that
it may be the making or the marring of any man en­
gaged in business, or any corporation, or even any Gov­
ernment. Crédit has built up thousands of mercantile
men, and has tided over many a government in a crisis.
But credit improperly dispensed, or, to speak plainly,
when a banker lends a man too much, has been many a
man’s ruin. Abuse of credit has brought even govern­
ments and States into embarrassment. Credit is inval­
uable under one aspect, but equally dangerous in another.
It may be wholesome food, it may be deadly poison.
And whether it is the one or the other depends largely on
the banker. It is not too much to say that the bank cash­
ier or president has the fate of many of his customers
wholly in his hands. The dispensing of credit is really
an education in the knowledge of men, and especially
the men of his own circle or the men in the lines of busi­
ness in his own district. It is an education in the art
of criticising and giving proper value to statements and
reports, in detecting what is false and misleading, and
in estimating properly those that are true—all which
with a view to distinguishing good bills from bad ones
and estimating accurately the various shades both of
goodness and badness; the art also of finding out when
men are beginning to go wrong and of determining on
the best course to pursue—that is, whether to close them
up, or to nurse them into a healthy position; the art also
of distinguishing between business enterprise and spec­
ulation or gambling. It is an education also to learn the
art of refusing courteously, and of giving advice with­
out giving offence; and generally of steering a middle
course between a foolish willingness to lend money to
anybody and believing everybody honest and capable,
and the opposite course of suspecting everybody to be
either a rogue or a fool.
All these things must be familiar to the experienced
men among you, but for the benefit of the younger men
in this assembly, I will just say a word or two on the
first head of education in discounting—namely, the
knowledge of men. This will be about all I have time to
say.
“ Know thyself,” said the sage—difficult enough, in­
deed, but what is it to the knowledge of other men?
For there are infinite varieties of them, and it is the
banker’s business to judge between them as to whom to
believe and whom not, who is worthy of credit and who
not. Here, for example, is the plausible and confident
borrower, with his sanguine outlook and rose-colored
way of looking at everything. He is apt to infect every­
body with his own temperament; but whoever is carried
away, a banker must keep cool. The man may be hon­
est, but he is dangerous from his propensity to carry too
much sail and take unreasonable risks. Much more dan­
gerous is the deliberate schemer, whose time is half taken
up with laying plans to circumvent his neighbors. Will he
spare his banker? Sometimes. I have known such
schemers to be deliberately honest with their banker
when they were ready to cheat everybody else. And a
banker sometimes trusts to this, saying “ I know he will
not deceive me, liar though he is to everybody else; he
cannot afford to lie to me.” But a banker sometimes
has to learn by unpleasant experience the depths of hu­
man nature, and the time generally comes when he has
to sound the lower depths of such a customer, and be




47

cheated in his turn; and there is this to be noted that
when such a man finds it to his interest to cheat his
banker, he lays his plans for a large amount. A banker
therefore is constantly being educated to weigh and
measure men as a merchant does his goods. And in do­
ing so, he finds that there are men who are better than
they seem. But usually when a man says too much in
praise of himself, and especially when he brings in a
profession of religion to help a banking advance, a
young banker will need to beware. “ Methinks he professeth too much,” such a one had better say. I am not
ashamed to say before this audience that though I am a
member of a church, and am what people would call a
religious man, whenever a man talks to me about relig­
ion in connection with loans and discounts, I make a note
of it, and the note is, “ Beware of that man.” Yet for
all that, I hold it to be a banker’s duty to observe a
high standard of probity and honor, as well as of so­
briety and good living generally; and not only so, but
also to inculcate the same on his subordinates, not only
by example, but by precept oh suitable occasions, espe­
cially guarding young men from country homes from
the vices and dissipations of city life, that are the ruin
of so many.
But there are modest and quiet and shrinking men as
well as boastful and scheming, and it should be for a
banker to find out their true merit. The men who are
very slow to make promises but can be depended on to
keep them; whose word is their bond; and who, though,
in Bible language, they “ swear to their own hurt,” yet
change not—these men do not always impress a banker
favorably at first. He has to find them out, sometimes
to draw them out, and encourage them to make a confi­
dant of him when they are laying a business proposal be­
fore him. A banker, then, must note his customers, yet
without seeming to note, observing their looks, the style
of their talk, the kind of letters they write, the kind of
statements they make; especially must he note if they
decline to make statements. Some men assume a pride of
position to conceal their poverty. A mercantile man will
pretend indignation at being asked for a balance sheet,
when he knows a true one would show him insolvent.
It is part of a banker’s education to be sometimes de­
ceived. There is no teaching like actual experience.
Reading all the books ever written will not produce the
impression on a banker that the loss of even a thousand
dollars will. But then, reading books may often teach a
young banker how to use the experience he has gained.
But I have not time to enlarge further, except to say
this, that a banker ought to aim not only to educate
himself but his customers and the community he lives
in. No man can live to himself, as we know; an in­
fluence is always radiating from him. And from few
men do more influences radiate than from a banker. As
a simple matter of business, apart from higher consider­
ations, a banker will find it his interest to let his in­
fluence be on the side of sound business methods, pru­
dent dealing, economy of living, honesty and upright­
ness; of the avoidance of business gambling, and of that
commonly besetting sin—the making haste to be rich.
He can do much to promote sound ideas on financial sub­
jects, as for example to expose the fallacy of supposing
that the value of silver can be doubled by a vote of
Congress; or, in a district infested by the “ fa d s” of
Populists, the folly of supposing that the Government
ought to own all the land and houses and farms in the
country, 'which, if carried out, would reduce the whole
population to Government serfs; or in a mining district
that capital and capitalists are per se enemies of labor,
instead qf the very spring and fountain of its vitality,
without which employment could never begin and
without which, if withdrawn, it could never be continued.
Much more might be said on such a fruitful subject
as a banker’s education. But it is impossible to pursue
it further. And what has been said will probably sound
very simple to many of you.
But in this address I am thinking mainly of younger

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C O N V E N T IO N .

men. And, as an old banker, whose time has about come
to put off the armor, I am desirous to point out to them
some of the way-marks on the road they will have to
travel. And if anything I am now saying may serve as

a sort of guide to keep them off the many bogs and quag­
mires that beset their path, and enable them better to
pursue an honorable, upright and useful career to the
end, I shall be well repaid for the trouble of writing this
paper.

Public Opinion and the Bank.
By J. A. S. P o l l a r d , Cashier Fort Madison Savings Bank, Fort Madison, Iowa.

It will not be necessary to discuss at any length with
this Convention of practical bankers the merit in favor­
able public opinion of the individual banking institution.
We may presume that without exception bankers realize
the importance of public confidence as it relates to the
solvency and management of the particular corporation.
The banker holds the integrity of his institution in­
violate, knowing favorable public opinion is part of his
stock in trade, without which the monetary capital
might as well not have been invested.
When the good opinion of the public is superseded by
distrust of the bank or the probity of officers or direct­
ors, its career as a commercial factor is terminated with
an abrupt slam of the doors; the examiner reigns su­
preme in silent halls where speculation or careless in­
vestment have brought woe to the once proud financier,
who must sit, crushed and humiliated, amid the ruins of
unprofitable assets, like Grief upon a monument, look­
ing at Despair.
I wish to ask your consideration of a subject equally
as important, but not as universally and diligently fol­
lowed, and that is, public opinion of banking as a busi­
ness or profession—public opinion of the bank in the ab­
stract; a subject regarded by this Association, however,
as of such vital importance that a competent committee
has been intrusted with the duty of enlightening the
general public upon the functions and uses of banks, to
the end that any ideas of mystery in the purposes and
aims of banking institutions may be dissipated in the •
light of reason and understanding; that their practical
benefits in the handling of credits, in the economical
direction of capital into proper commercial channels, in
the enlargement of its use through system and conse­
quent benefit to all the people, may be understood and
recognized.
No more important work was ever undertaken in the
history of this Association, and I trust the efforts of the
Bureau of Education may be so prolific of good results
and that infallible antidote for prejudice labeled “ Edu­
cation ’’ may be administered by “ Doctor ” Cornwell
and his eminent staff of trained nurses in such heroic
doses that in time even the good-natured old fiat money
skeptic may begin to see in the modern banking institu­
tion-transacting daily an amount of business without
the use of actual money which, if performed by coin or
its paper substitute, would make his wildest dreams of
“ per capita” look like the proverbial “ thirty cents”—
a real benefit, convenience and necessity to business in­
terests; and then, perchance, “ His silver hairs will pur­
chase us a good opinion, and buy men’s voices to com­
mend our deeds ! ”
Public opinion to-day is the predominant, governing
influence; it directs all interests, commercial or other­
wise; its depression is the voice of the people, its ap­
proval the charter of success, its support invaluable.
This is likewise an age of materialism, in which com­
mercial interests often dominate in the settlement of
great public questions; influence the destinies of nations,
and even threaten to partition territory and to move em­
perors and kings at will upon the chessboard of
diplomacy.
Without considering the questions of sentiment or
morals involved in the general strenuous advancement
of things mercantile, it is evident that the caprice of




rulers, the differences of religion and race, the lust for
mere authority over men, which for centuries have in­
spired the course of events, are now subserved in great
measure to the accumulation of corporeal property; and
with commercial interests such an important factor, and
public opinion such a puissance in our present civiliza­
tion, we find antagonism between these components, the
people’s will. “ The manifestation of public interests ”
looks askance at the growing energy, of commercialism,
and controversies arise as to methods by which trade
and commerce are carried on or expanded.
The bank, being an important complement of trade
and commerce, seems to have been selected as the scape­
goat upon whose devoted head are unloaded the
anathemas of those who have positive ideas upon finan­
cial and commercial questions, ranging from the eco­
nomic policy of adhering to an enlightened monetary
standard to the political expediency of combinations of
capital.
It would seem only fair that there should be a differ­
ence of deduction by the popular mind as to the extent
of the bank’s responsibility; but it is often the case that
the only agreement reached by champions of different
financial schools—the devotee at the shrine of govern­
ment fiat or ardent disciple of sacred ratio—is that in
some occult, psychic manner the banks profit through
public distress, and that their healthy growth bodes no
good to the commonwealth.
Prejudice has been called “ The great obstacle to
progress.” The prejudice against the banking business
is not confined altogether to the ignorant, the worthless
or the constitutional specialists in. philippic, and while
more pronounced in certain localities, can yet be called
widespread. I do not, by any means, infer that it is
universal, representative or increasing, and am glad to
believe the majority of intelligent citizens this year of
grace and prosperity appreciate the benefits of banks
and respect those engaged in the business; but we do
not have to seek far in any locality to find traces of a
misjudgment which we know to be artificial, wrong and
uncalled for.
It is not exaggeration to say there are those in every
community who believe the banker a financial despot,
whose mandate is potent to cause bankruptcy; who be­
lieve the banker chuckles in unholy glee in times of panic
and business depression—going forth like a black-winged
cormorant to devour the farm, the cottage or the suc­
culent collateral tid-bit. And these same wiseacres pic­
ture the banker turning his attention to the national
calamity business when the supply of individual victims
runs short—buying up the people’s representatives in
the interest of pernicious legislation, or getting up panics
to satisfy the bankers’ well-known love of excitement (?),
or meeting in conventions, as has been said, to consider
what shall be done, who shall be done, and how we shall
do them!
Whether the bigotry of a benighted minority is in­
fluencing public opinion to further unjust legislation
derogatory to banking interests, and as must ever be the
consequence, to the injury of the general business inter­
ests; or whether the better judgment of the people
through education as to the conduct and uses of .bank­
ing institutions is gaining the ascendancy, is a question
of interest and its solution “ a consummation devoutly

B A N K IN G

SE C T IO N .

49

to be wish’t,” especially to bankers whose business inter­ frank and open countenance should invite trust and his
ests are established in localities where such remarkable words carry conviction.
Likewise prejudice must exist in. some degree while
financial theories are propagated.
Certainly there is nothing in the history of banking men mistake their calling and engage in banking when
in this country to justify much prejudice. The banks they are better qualified for usurers, promoters or spec­
have always been a power for good in the community ulators—the last named qualification being particularly
when honestly managed, and every banker of experience and justly calculated to bring down the righteous wrath
has known sleepless nights trying to work out the salva­ of the public. Banking is not a “ get rich quick ” pro­
fession, and the science of futures, stock margins and
tion of his customer and at the same time fulfill his
gold brick enterprises can be studied only sufficiently
duty in the preservation of his sacred trTïst as a public
to be recognized and avoided. The percentage of those
custodian.
The bank merits favorable public opinion in the light who are not representative and who bring no credit to
of history. The names of patriotic bankers who pledged the profession is fortunately small.
We must recognize the fact that the public has been
their all in the cause of freedom and the rights of man
for which our forefathers shed their blood are graven in exercised about the corporations, it being a popular
the hearts ;pf true Americans in letters that can never theory that the corporation thrives at the expense of the
fade. The noble declaration on which the colonists built individual. They have brought the regular scapegoat,
their hopes and consecrated their lives in the cause of the bank, into their antagonism to corporations, hope­
liberty bears the bankers’ signature, and its principles lessly confused the corporation with the trust and capped
the climax by calling the National bank the greatest
to-day bear the bankers’ indorsement.
Government bonds, selling at a premium which es­ trust of all. It has been suggested that in view of this
tablishes the credit of our country above any nation of any five men in the rural districts owning $5,000 each
tnc world; the issues suggested, subscriptions made can buy a trust—the new currency bill makes them
through and encouraged by bankers of the whole republic cheap at $25,000—marked down from fifty.
The chief objection to the National bank has its
in substantial amplitude; a safe currency system; a stable
standard; a people progressing in financial knowledge foundation in the idea that the circulation feature gives
largely through the earnest and untiring efforts of bank­ these institutions an advantage over other people. It
ers in educating them upon a subject they are well qual­ is difficult for many to understand the slight profit in.
ified to teach—thèse are a few answers to distorted pub­ National bank circulation, and while I would not at­
lic opinion which can hold the banker lacking in civic tempt to bring in here the question of bank currency,
I firmly believe that when a sound and scientific bank
pride.
The banking institution is the heart of industry, and currency is possible, the immense benefits derived from
to its throb responsive, the energy and ingenuity of man an elastic system will be so apparent that public opinion
is stimulated and the boundless resources of our country will approve such issues more readily than the present
made available to mankind; the magic touch of hus­ National bank circulation.
Dignity has had something to do with a mild expres­
bandry is rewarded in bounteous store; the eternal hills
yield wealth, emoluments to industry and skill, the fur­ sion of unfavorable opinion of the banking business. The
nace fires burn brightly, the wheels of traffic turn, the profession carries with it a certain commercial dignity,
song of prosperity chords with the “ busy hum of men,” and the banker has been referred to as the haughtiest
when to that heart untrammeled flows the capital and of business men—doing business on other people’s
savings of the community with confidence and trust, to money. The banker, naturally, a very busy man, is
be again projected through the channels of industry to often inclined to smile at criticism, and, with an air of
superior wisdom, knowing the justice of his cause, pass
build anew the tissues of commerce.
That banks may gain and hold public approval it is the subject and go ahead making loans or getting his
necessary that the men who conduct them should by mail off. If possible to conduct the business with just
deed and action be wôrthy of it. The banker must be deference to honestly expressed public feeling, that
something more to his country and his community than golden returns in increased public esteem can be at­
a loan agent and a merchant of exchange. He should tained, bankers should be willing to devote time and ef­
be of broader calibre; one who can subserve the grow­ fort towTard that end.
What couixtry banker, for instance, has not heard the
ing demands of trade and commerce and keep in sym­
pathy with business progress. His training and practice honest farmer, of intelligence and integrity, whose note
should lead him to understand in times of prosperity is good to the legal limit, and who personally respects
the music of traffic; the rumble of wheels, the rasp of and trusts the banker implicitly, make some reference to
the saw, the hum of spindle and melody of anvil; as well the enormously profitable business of banking as com­
as to warn him against inflated values, speculation and pared with returns obtained from tilling the soil? Many
the omens of depression and panic. He should be a a banker has had such a customer, whose profits and
man of sense, backed by unfailing nerves, as ready to wealth would compare favorably with his banking insti­
encourage sound enterprise as to turn down the watered tution, talk to him as if he were a trust magnate. And
stock expei’t and the genius of boom real estate ventures. how do the bankers meet his inference? Why, we smile
So far as prejudice has its formation in the human and smile, many of us, and he may continue to think us
instinct which leads certain of the unsuccessful to rail “ villains still;” change the subject, talk crops or
at prosperity of others, there is no remedy, except, per­ weather, when it would take but a simple explanation,
haps, in a moral regeneration. The banker, though he a few statistics, to convince him that bank capital in the
be only moderately burdened with wealth, or not burden­ aggregate gives only the most moderate returns on the
ed at all in that respect, must expect to be the target investment.
Whoever heard of a man getting rich at the banking
for the “ arrows and slings ” of those who regard wealth
business? I mean starting at the foot of the ladder and
as a crime—so long as some one else has it.
The pi'ejudice of the unsuccessful borrower cannot acquiring wealth in that manner. It’s a nice business
be altogetner remedied, but those individuals not en­ after you have accumulated wealth in some other depart­
titled to credit who have been refused it with the simple ment of commerce, in which to invest surplus capital
statement that the bank would not be justified in mak­ with safety and fair profit; but did you ever hear of a
ing the loan are less virulent than those who have been young man who becomes a millionaire in the approved
put off with one of the stock excuses. Nine times out style, starting iife on a farm, studying by the light of a
of ten the applicant knows it if you qualify your refusal. tallow dip, and coming to the city with forty-five cents
A good banker is never successful as a prevaricator—his and a ham sandwich —whoever heard of his going into the




50

BA N KERS’

C O N V E N T IO N .'

banking business and getting to be a railroad owner?
No; he must first accumulate his fortune by sweeping
out the office of his future partner at seven dollars a
month, and when he is gray headed, gouty and wealthy,
then it is time for him to embark in the banking business
and dodge missiles hurled by people who do not own
bank stock.
To a greater extent this sentiment of prejudice is en­
tirely artificial, and has in substantial measure been caused
by those who would seek political preferment by appeal­
ing to the passions of the discontented; men who would
seize an opportunity to foment the inherent antagonism,
deep rooted, in certain individuals toward acquired cap­
ital, just as readily as they have been known to open old
«ores, political or sectional, promoting social strife to at­
tain personal ends, and we need not wonder they can
picture the banker a marble hearted coupon clipper,
whose profits are wrung from those they are pleased to
style the “ masses.”
Public opinion will still regard the bank as the agent
of the money power, and the bank cheerfully assumes the
duties of that great trust. It is not the green-eyed dragon
of Lombard or Wall Streets, but a power existing in the
homes of a people who have by diligence and industry
Accumulated a competence and invested it in the banks
and savings institutions of the country; the people who
own the deposits, who are largely interested in the stock
of these institutions; people who will demand their sav­
ings or wages in money of equal purchasing power- comihanded when invested or labored for. This is the money
power that employs the bank as its agent, and it is not
only powerful in capital and influence, but in the expres­
sion of public opinion, a power greater than imperial
despots wield; a power placed in the hand of the Amer­
ican citizen in this day of the grandest civilization-the
world has yet seen, as he stands in the ballot booth
alone with conscience and his God and registers his
honest conviction and will with

“ A weapon that Comes down as still
As snowflakes fall upon the sod,
But executes the freeman’s will
As lightning does the will of God.”
The public is rapidly coming to realize that the bank
has no designs upon the Government; no diabolical plots
for the financial enslavement of the people; but that its
interests are identical with the interests of the people;
it prospers only when they prosper.
And although public opinion has been busy with the
bank ever since the “ money question ” and the complex
problems of coinage were dragged into the political
arena, where they do not belong, and the banker, much
against his will, forced into prominence as something of
an issue himself. Still, bankers have no political axes to
grind. As bankers, they belong to no party, but are ever
ready to hold the good name and integrity of the Gov­
ernment above all party affiliations when its credit is as­
sailed.
In this day, when our country stands the peer of any
world power, a creditor nation whose banking interests,
the infallible barometer of business prosperity, indicate
such commercial progress that the gold eagle is soon to
speak a language that every country can recognize and
understand as well as the pound sterling of Great Brit­
ain; when the “ Old Lady of Threadneedle Street ” looks
across the Atlantic for gold to strengthen the financial
sinews of the British Empire; when Imperial Germany
and Mighty Russia follow the sun of commercial su­
premacy westward to our shores to replenish war chests
from our abundant store; the bankers of the Republic,
with hope for its progress onward toward the bright and
shining star of destiny, proud of its high seat in the
world’s congress as the arbiter of nations, will continue
to fulfill their duty, help maintain the credit, and further
the prosperity of their country, and, with patience, await
the reward of popular approval.

The Internal Revenue Law.
B y G eneral A lfred C. Barnes , President Astor Place Bank, New York City
Mr. President:

Taxation is a necessary function of government. Per­
haps it should be borne proportionately by those who
have made taxation inevitable and those who expect to
derive the most benefit from the expenditure of the
revenue. Most of our present bank taxes originated
in the Spanish War of 1898, when our people, frenzied by
the loss of the Maine, overran the earth with hollow
ships and marching armies. Now we must pay the piper
who furnished the field music for that great Anabasis.
If you ask me who is responsible for the war and its
consequences, I answer, the American people. And who
will reap the most advantage from its successful con­
duct? The reply is again, the American people.
To provide for this unusual expense, our comfortable
Government, which had enough and to spare under old
conditions, enacted the war revenue law of 1898. This
law seeks to take tithes on capital at rest and tolls on
capital in motion. It is very ingenious and inquisitive.
It searches the corners of every mart and brings many
hidden things to light. If in the multitude of your
possessions, gentlemen, there is anything you have over­
looked or mislaid, the tax collector will find it for you,
whether you acknowledge his services or not.
Of course, banks are always a shining mark when the
arrows of assessment are flying. The assessors take the
famous advice which the gather gave his .son, “ if you
want money, go where money is.” It makes no differ­
ence that we are not the owners but only the custodians
of wealth. Our incorruptibility, impervious to tempta­
tion, makes us fit for our posts, and—keeps us poor! The




difference between the fabled Tantalus and ourselves is
that he could not reach the tempting treasures dangling
before his vision, whereas we can, but we will not.
Therefore we suffer not only the pains of Tantalus but
the additional agony of resistance to temptation.
Without attempting a close and serious analysis of
the Revenue Law, I remark that the banks contribute to
the country’s war fund in two ways; first, directly,
in the form of the two mill rate on capital and surplus.
A wise and learned Attorney-General decided last
spring that “ surplus” does not include “ undivided
profits.” Under this ruling, two banks with precisely
the same resources settled as follows: One with a million
dollars capital, a million dollars surplus and one hundred
tuousand dollars undivided profit, paid four thousand
dollars tax. Its neighbor, with a million dollars capital,
one hundred thousand dollars surplus, and a million dol­
lars “ undivided profits,” paid two thousand two hundred
dollars. Each bank should have been taxed four thou­
sand two hundred dollars, and the Government, in these
two instances alone, paid or rather forfeited twenty-two
hundred dollars for that opinion. The revenue from di­
rect taxation of banks was last year three and a half
million dollars, being over three per cent, of all collected
under the Act of 1898. Our other tax is indirect, for we
pass it along to our customers. The law requires us to
stamp all our documents, not only checks, notes and
drafts, but powers of attorney, letters of credit, and even
notices of protest. The stamps used by banks amount to
about five and a half millions of dollars. So the total
tax on bank capital and bank transactions aggregates

B A N K IN G
•some nine millions, or nearly nine per cent, of the war
revenue.
The Treasury Department of our Government is a
great co-operative business concern, in fact a Trust,
which those who object to the concentration of business
interests have forgotten to denounce. Furthermore, it
is a “ grinding monopoly.” But it does its Work well.
The Spanish war debt had to be paid. Payment is made
by contributions levied upon all the sources of wealth
that can be reached, upon the theory that’ government
helps us make money and protects it for us, and conse­
quently is a partner in all our enterprises. The theory
is' perhaps a little lame, but the practice makes it valid
enough. A further theory is that money spent for pa­
triotic purposes comes back again in increased prosper­
ity and so illustrates Nature’s eternal law of compensa­
tion, which offsets destruction with construction, while
restoration follows abstraction.
Political economists insist that taxation is not a sys­
tem of penalties for the crime of being prosperous. Nev­
ertheless, under its forms, Government does seize our
substance and. compels us to take in exchange shares in
the enlarged business of the Uncle Sam Expansion Com­
pany, Unlimited. Now let us see what we have, to show
so far for our investment in Spanish war futures.
The first item is a heavy introduction to the debit ac­
count. We will call it the Woe of War—made up of the
waste of young life, the sorrow and hardship of our best
and brightest, the lament of Rachel weeping for her chil­
dren, the destruction of property and values wherever
the war chariots roam, the awful curse of “ man’s inhu­
manity to man.”
Second item in the account—The Glory of Conquest.
At this magic word Glory, every American forgets his
-sacrifices of blood and treasure. Surely our horn has
been exalted among the nations. The rude republic this
side of the seas was held in slight esteem among the
so-called Powers and their peoples, as every traveler
knows. They thought us uncouth and self-centered, cow­
ardly money grubbers. Now that with two or three
swift blows we have humbled the oldest and proudest of
them, their manners are much improved. Henceforth
in all world affairs the United States is a potent factor
to be reckoned with. In fact, our permission must be
asked and obtained for every future international episode
that develops in the march of history. So much to the
credit of our investment in the Spanish war.
Third item: The Philanthropy of Power. As a mis­
sionary enterprise the war proved successful. Nine mil­
lions of darkened minds have been rescued from error
and as many suffering bodies from oppression. The con­
tributions of the charitable through their churches could
make but slight impression on this dense mass of ig­
norance, but the mailed hand of power in a flash sweeps
every heathen of them all within the pale of civilization,
whence they will be permitted to go out no more for­
ever. The schools on the Philippine hillsides, the
churches on the savannahs of Cuba, bear witness. So
the banks should certainly not begrudge what they have
been able to do for foreign missions.
Fourth: Expansion of Territory. This is a familiar
slogan at the present time. What does it mean to us?
Well, few would be able to agree on that point until
after election. To me it means that we have added to
our possessions a very handsome inventory of islands
and a vast population. Three years ago we were, a soli­
tary, isolated, almost hermit nation, confined within our
own continental boundaries, our flag unknown or disre­
spected upon the seas, our foreign influence inapprecia­
ble. To-day we are a world power, with sentinel stations
dotting the h~mispberes and tributary peoples looking
to us for all we can give them. The phrase “ tributary
peoples ” is uttered with bated breath, for the fear of the
anti-imperialist is abroad in the land—but that is just




S E C T IO N .

51

what they are—for their own good as well as for ours.
Are we not ourselves tributaries, we bankers—did not
we pay tribute for the Spanish war? The new Ameri­
cans will also pay tribute, not as enslaved tribes, but
-tribute of gratitude as emancipated peoples—involuntary
tribute of taxes like ourselves, and voluntary tribute of
trade and exchange, increasing as their civilized wants
increase, until the expense of the Spanish war will come
back a thousand-fold into pur patriotic pockets.
Now we are prepared to review the Spanish war ac­
count and strike a balance. ? Debit items: Human suffer­
ing and money cost. Credit items: The glory of our
country, the redemption of down-trodden peoples, the
revenues of the opulent East. Now if the Celestial book­
keeper will kindly offset the distress of war with the
opening of closed lands to the light of the Gospel—mat­
ters which are out of our province—we can readily see
how new trade will wipe out the expense and leave us
the splendid satisfaction of triumph for our glorious
country as a net undimmed profit from the Spanish war.
The country has bravely borne its burden and the
banks their full share of it; but there is a time to be
taxed and a time to quit. Do you realize that we are
still under the full drain of war taxation, though the
war ceased two years ago? True, a large and costly
armed force is necessary to guard the new possessions
and suppress the insurgent element. Probably we shall
never be able to return to the modest old military and
naval establishment. Then, too, there is that little af­
fair in China. Don’t you suppose we will have to take
a slice when that great pie is cut, notwithstanding all
our disclaimers? We may have to do it if only to defray
our expenses there incurred.
But in time every fertile province to which we take
title will pay for its own administration, as well as for
the war which shook it into our basket. Why then should
we taxpayers part with our good four and five per cent,
money toward a debt insignificant in itself, when the
Government can borrow at two per cent, and redeem its
war bonds eventually from the revenues of the
provinces?
Before it was foreseen that we would have any
provinces, the Ways and Means Committee of the House
of Representatives, in reporting the war revenue bill,
explicitly stated that it was their proposition “ when
the war is over to cut out the war taxes and pay the
bonds as we paid the bonds of The Civil War out of the
usual and ordinary taxes.”
Well, the war is over, and what are we doing? Just
busy increasing the Government hoards by pouring in
enormous sums which lie idle in the treasury.
During the last fiscal year, ending June 30, 1900, the
national revenue exceeded the expenditures eighty mil­
lions of dollars. The income from all sources was five
hundred and sixty-seven millions, of which only one
hundred and five millions was collected under the rev­
enue act of 1898. We expended for the Army and Navy
one hundred and ninety millions, being one hundred
millions less than during the previous fiscal year, which
goes to show that the additional income from the war
revenue act is already superfluous, and that its prompt
repeal is in order.
As a body of peaceful men, representing the sub­
stance of prosperity, we are assembled in the capital of
the late Confederacy, redolent with memeories of our
most lamentable war. What more appropriate place to
weave a spell that may exorcise the fumes of powder
once more from our financial system? The “ man behind
the gun ” must have his little hour, when great prin­
ciples are at stake which can only be maintained by
force. But now he may lie down to rest upon the field
of victorious battle while the Red Cross man, the man
behind the money, steps over his weary body to apply
the balm of unlimited resources to the healing of the
nation.

Detailed Report of Proceedings.
T W E N T Y -S IX T H A N N U A L C O N V E N T IO N , HELD A T RICH M OND, O C TOBER 2d, 3d and 4th.

F IR S T

D A Y ’S

PR O C EED IN G S.

Tuesday, October 2d, igoo.
The President: The hour of 10 o’clock having ar­
rived, by virtue of the authority of my office I declare
the Twenty-sixth Annual Convention of the American
Bankers’ Association now in session and ready for busi­
ness. The Divine blessing will now be asked by the
Rev. Carey E. Morgan, of this city.
PKAYEK.

Let us pray. Almighty God, Most High, ever to be adored,
we praise Thee, we honor Thée, and we would laud and magnify
Thy holy name, Father, Son and Holy Spirit. We thank Thee
that Thou has brought this company from every part of this
great land of Thine and ours without serious accident or fa­
tality.
After the pleasures and the business of these sessions are
•ended, we pray Thee th a t all opr guests may be brought safely
back to their homes, and may the Lord watch between them and
their loved ones while they, are absent the one from the other.
Behold Thou hast brought the ends of the world together.
Thou hast ordained th a t the whole world shall be one neigh­
borhood. With railroads and steamships Thou hast tightened
1the girth of the earth and compressed it. Thou hast made, of
great distances only a Sabbath Day’s journey. May we adjust
to this purpose of Thine, and as Thy love Is universal, so may
■our sympathies bo; and, as in Thy love there is neithèr North
nor South, nor East nor West, so may it be in our loyalty and
devotion and fraternity.
, Our hearts leap within ps, dear Father, when we remember
this company bfonght from every section of our common coun­
try, uniting fraternity with good will, supreme. May it ever
be so.
Help these and those whom they represent to remember
what great power Thou hast committed to their hands. May
this power be èxercised cautiously, kindly, generously and ac­
cording to the standards of Jesus Christ. May we all remem­
ber that we are all Thy stewards ; th a t what we have Is Thine ;
that we are Thine; th at we are but the stewards of Thy
manifold grace and beneficence ; th a t the cattle on the thousand
hills are Thine; th a t Thou dost hold the whole of thè world in
Thy Hand. May we administer on Thy grace and beneficence
graciously.
We are glad to remember how Thou hast touched the hearts
of men, and women, too, to whom Thou hast committed the
power of wealth, and how there has sprung up all over this
land and all over the world institutions of learning, great
philanthropic enterprises and institutions, homes for the home­
less, clothing for the naked, food for the hungry.
Oh, do Thou yet smite the Rock, th a t streams of beneficence
may flow in a mighty current.
Grant Thy blessing to our brother, the President of the
United States. May wisdom be in the councils of his cabinet.
Bless the Senate of the United States and the House of Repre­
sentatives. Bless our brother, the honored President of this
Association, the Governor of our old Commonwealth, the State
officers, the Senate and House of Delegates, the Judges of our
Courts, all to whom the law is committed. Bless the people
of the State and of this city. Bless these, our guests. Bless
the whole nation. May the rights of the individuals in the
States be safeguarded in our national councils. We humbly
beseech Thee to bless our friend and brother who is to preside
over these sessions. Direct him and all who shall assist him.
May this be a memorable meeting, and one which shall bring
not only joy to the delegates and their friends, but which shall
bring practical good to these great institutions of power and
the whole nation. We ask it all in Christ’s name. Amen.

The President: The next business in order is the roll
call. Unless there is objection, that will be dispensed
with.
The next business in order is the address of welcome
to the State of Virginia by Governor J. Hoge Tyler. Is
he in the building ? As he is not, we will listen to the
address of welcome to the city of Richmond by His
Honor, Hon. Richard M. Taylor. [Applause.]
A d d r e s s o f W e lc o m e b y M a y o r R ic h a r d M. T a y l o r ,
o f R ic h m o n d , V a .

Mr. Chairman and Gentlemen of the American BanJcers’
Association :
I greet you to-day with words of welcome which




carry the heartfelt desires of our people that your gath­
ering in our city may be profitable and pleasant.
The wheel of progress finds its impetus in the mone­
tary conditions which feed it, and your assembling for
discussion of the best means to promote that interest
excites in our minds the happiest thoughts for a proper
solution of the problem.
You will not expect me, however, to enter into a dis­
cussion of the financial pro Idem. My desire is to extend
to you a heartfelt and cordial welcome to our city.
Happily we find honored officers of your association in
the persons of our native born former fellow citizens, Mr.
Walker Hill and Col. James R. Branch. You have hon­
ored us in honoring them, and Richmond with out­
stretched arms welcomes them and their friends to their
old home.
You are surrounded by our substantial and influ­
ential fellow citizens, who will gladly show their appre­
ciation of your choice in the selection of this city for
this annual gathering by doing their utmost to make
your visit pleasant.
As Mayor, I present you the freedom of the city.
The President: The next business in order is the ad­
dress of welcome by Mr. Virginius Newton, President
of the Richmond Clearing House Association and Presi­
dent of the First National Bank of Richmond, Va. Mr.
Newton took unto himself a wife a few days ago, so
Col. John B. Purcell, Vice-President of the First Na­
tional Bank of this city, will read his address.
'Col. John B. Purcell: Mr. President, Ladies, and Gen­
tlemen: Inasmuch as our worthy President has made the
announcement, it would be unnecessary for me to apolo­
gize for the absence of the honored President of our
Clearing House Association. The large number of ladies
in this audience, I am satisfied, would throw a prepon­
derating vote excusing Mr. Newton for his absence.
But I feel that some explanation should be made why 1
should be called upon to read his address. Let me say
that Mr. Newton’s entrance into the marriage state was
very sudden, so sudden that it gave no time for any one
to prepare an address in his stead. In fact, as surpris­
ing as this is to you, it was not less surprising to us.
Mr. Newton’s marriage was an elopement so far as we
are concerned [laughter], and he has left nothing behind
but these few remarks, which I am requested to read.
Let me say that I have been selected, probably, to do
this because I have vox et praeteria nihil.
A d d r e s s o f W e lc o m e b y V ir g in iu s N e w t o n , P r e s i d e n t
R ic h m o n d C l e a r i n g H o u s e A s s o c i a t i o n .

Mr. President and Members of the American Bankers'
Association:
It is a pleasing and most honorable function to bid
you welcome to our city in the name of its Banking
Association.
One old enough to have borne his part in the momen­
tous days of our Civil War—when the new birth of this
Nation passed through convulsive throes, more crucial
than in any epoch of its checkered life—yet young
enough to recall, with vividness, the heroic and strenu­
ous play of vital forces, now happily tempered by the
silent, ceaseless touch of time, may but regard this day
as one of the most conspicuous in the kalends of the
capital of the late Confederacy.
We greet distinguished representatives from every
State of this Union, whose touch upon the credit pulse
of the Nation is the gauge of its commercial and indus­
trial life; whose presence indicates that unity of interest
—unity of purpose—unity of allegiance—which makes
the promise and gives the fruition of that consumma-

B A N K IN G
tíon hoped for, “ an indissoluble union of indestructible
States.”
Risen from the depths of a day of desolation—girded
afresh with a new vigor—illumined by experience—sus­
tained by the bright promise of the future—we voice
with a reverence befitting the sublime sentiment, “ Our
Country—whether bounded by the St. John’s and the
Sabine, or however otherwise bounded or described—
and be the measurements more or less—still Our Coun­
try—to be cherished in all our hearts; to be defended by
all our hands.”
“ Thus the whirligig of time brings in his revenges,”
and we behold a most conspicuous body of men, repre­
sentative of every State of the Union, holding its twentysixth annual session in the capital of the Old Dominion;
presided over by a president, and grooved by a secretary,
both “ to the manner born.”
Potential as you have been in directing the thought
and the intelligence of the nation to sound views of
finance, and in framing and urging measures for adop­
tion by our National Legislature, your labors are but be­
gun, and strenuous effort is yet the talisman by which
you may achieve success.
The promise of the Republican party to this country
•of such legislation as would insure to us a sound cur­
rency takes shape, after near four years of weary wait­
ing, in the act of March 14th, 1900. This law, as origi­
nally drafted in the lower House of Congress, carried
features wise and beneficent, all of which were either
struck out or so modified by the Senate as to make abor­
tive the whole scheme of a more stable currency.
We are aware that the Honorable Secretary of the
Treasury has sought to minimize the criticism leveled
at this abortion of compromise, yet his warmest parti­
sans may gather no higher assurance from his views
than the hope that we have no cause for fear so long as
one partial to gold, or of his sound financial views, ad­
ministers the office of the Secretary of the Treasury.
It is an open secret that we are no more committed
to a gold basis now than before the passage of the act;
that every bond of the Government, save the 2 per cents,
o f 1898, is payable in coin, gold or silver; that private
•contracts, without a special agreement to pay in gold,
are payable in silver; that our silver currency will be in­
creased by some forty-five millions, and we shall have,
in all, some five hundred and eighty millions of silver,
worth 47 cents in the dollar, to keep at a parity with
gold: and not a scintilla of authority for a goid reserve
to maintain this parity, as the whole machinery of the
gold reserve, and the sale of bonds, is solely applicable
to the protection of United States notes and Treasury
notes of 1890; that the demand of the country for a more
elastic bank currency is posponed for decades, and that
the United States notes are to continue a permanent part
of our circulation.
The sole benefit we gain from this act is the separa­
tion of the Issue and Redemption Department from the
general Treasury funds, and the privilege to fund all
bonds, except the 4 per cents, of 1925, into a 2 per cent,
bond, payable specifically in gold.
I may not forget that I speak to the survivors of
twenty-five banquets and twenty-five welcome ad­
dresses. Let me remember, therefore, that as
“ We pray for mercy,
That same prayer doth teach us all to render
The deeds of mercy.”
My office is merely to bid you welcome. When
•spoken from the heart, in old Virginia fashion, it needs
neither definition nor refinement; to do so would make
me guilty of that “ wasteful and ridiculous excess ”
which the poet characterizes as the attempt
“•To gild refined gold, to paint the lily,
To throw a perfume on the violet,
To smooth the ice, or add another hue
Unto the rainbow.”

Rather let me say, in the. words of the same master
mind,




S E C T IO N .

63

" S irs! you are very welcome to our house:
It must appear in other ways than words,
Therefore I scant this breathing courtesy.”

The President: I see on the floor of the Convention
the Honorable Ellis H. Roberts, Treasurer of the United
States. I would like to invite him to the platform. [Ap­
plause.] All members of the Executive Council and all
Vice-Presidents for the States are invited also to the
platform.
The President: The next business in order is the ad­
dress of your President.
A n n u a l A d d r e s s o f P r e s i d e n t W a lk e r H ill.

Your Excellency, Your Honor, Mr. President, Ladies and
Gentlemen, and Gentlemen of the American Bankers’
Association:
It is difficult for me to assume the role of a guest in
this, the beautiful Capital City of Virginia, where I was
born and reared and spent the first ten years of my man­
hood, and served an apprenticeship at banking in all
positions from collector to cashier.
With my knowledge of the people of Richmond I feel
assured that we will receive from all sides most cour­
teous and cordial attention, and no effort will be spared
to make the visit to this city of every member of this
Association an event in his life.
A sweet singer thus beautifully describes the love of
her children for Richmond and their pride in her glories,
and the noble achievements of the sons of Virginia in
her cause and in the service of our common country,
though fate may carry them* as it has me, far from
her borders, there to finish, it may be, such of the span
of life as may remain to them. Listen !
“ Richmond, loved city of my earlier days,
And cherished still in memory’s tender mood,
No son of thine but proudly sings thy praise,
And feels his love by thought of thee renewed;
Pride of the Old Dominion In her pride.
Home of the statesman and the cavalier,
However far my paths may lead, and wide,
Still is thy glory to my spirit dear.
“ Historic Richmond, sacred to the name
Of the lost cause, Its faithful citadel,
No nobler tale lives in the book of fame
Than how brave Richmond fought, and starved, and fe ll;
The august shade of the illustrious Lee
Dwells in thy air, and dreaming eyes may view
His ragged army th a t defended thee
Again stand forth—the Gray against the Blue.
“ And when, the Gray and Blue in union bound,
Their sons went forth to battle with Spain,
Another Lee of Virginia swift was found, .
The beloved Fitzhugh—to prove the patriot strain ;
Dauntless he stood against the Spaniard’s hate,
Fearless, with treachery on every hand,
Defender of his country’s consulate,
Guarding the standard of his native land.
“ Dear Richmond, these the thoughts th at stir the soul
Of thy proud sons who see thee now arrayed
In peaceful beauty where the thunder roll
Of battle once its dreadful music m ade;
Live in the glory of thy splendid past,
And in thy greater glory yet to be,
Loved City of the South, while life shall last,
My heart—a son’s heart, Richmond—beats for thee.”

Because of the character of its people, its commer­
cial importance, and its historic fame, I am confident
that all will commend the choice which has brought us
together in the city before which those mighty captains,
Lee and Grant, fought their peerless armies in the great­
est war of modern times, as thereby we may be re­
minded of that which we should not forget, especially in
this campaign year, that a Grant and a Lee now wear
the same uniform, and that the latest addition to the
battle ships of the United States bears the name of a
State in which was located the first capital of the Con­
federacy, a name made famous in naval annals by the
cruiser which drove American commerce from the seas,
and which was sunk off the coast of France by the
Kearsarge on a beautiful Sunday morning in June of
1864. That which reclothed a Lee in blue and placed an
Alabama amongst the warships of the United States,

64

BA N KERS’

C O N V E N T IO N .

evidencing, as it happily does, that we are again, and
more than ever before, one people, has brought its bur­
dens. I will not call them the “ White Man’s Burdens,”
but they are ours, and we must bear them one way or
another, though just how we should bear them I do not
propose to discuss, but it is altogether proper that I
should call your attention to some features of conditions
resulting from the late war with Spain, and the foreign
policy of our country during the past eight or nine years,
that must affect more or less directly a large number of
the members of this Association. Our flag has been car­
ried into distant parts of the world; how long it will fly
in those parts, and just what it will there represent, no
one can now say, but this may be safely said: We have
broken our commercial shell and the trade of our coun­
try will never again be pushed back within the confines
of the United States. This new condition the bankers of
the country must meet, for they are the custodians of
the money of the country, and if they do not use intelli­
gently and to the best advantage its medium of ex­
change, others, foreigners, will reap rewards that should
be ours; for rest assured that we will not be permitted
to long do awkwardly, slowly and expensively what can
be better done by others. Excellence of service will be
demanded of us, and therefore we must educate our­
selves in the commerce of the world. We must acquaint
ourselves with the character of the people and the coun­
tries to which our trade reaches. We must know what
these people produce and what they consume, and the
routes by which they can be reached most quickly and
most cheaply, and we must inform ourselves of the chief
features of their commercial laws. But we need more
than this knowledge of these people, their countries,
commerce and laws if we are to dominate their trade
and be their bankers. To do these things we need a
currency of stable value. No one will buy drafts upon
us, or deposit their money with us if these drafts, and
their credits, represent doubtful and changing values,
while a competitor nation offers a currency which does
not shrink and is measured at all times by an unchang­
ing standard. It is no answer to say that payment in
gold, if that is the standard desired, can be secured by
private contract. The very fact that it requires a spe­
cial contract to secure it is a declaration that the gen­
eral law does not afford the protection desired. But
furthermore, it is not, as a practical proposition, possible
to entirely safeguard one’s self against the uncertain­
ties of variable currency through private contracts. The
evils at home of such currency are bad enough, but in
foreign commerce they are possibly worse, and will pre­
vent any people who are dependent on such money from
banking for those who can avoid them. Free choice will
rarely bring them customers, though necessity may fur­
nish them victims.
I think that all the members of this Association will
agree with me that a variable standard of value is to be
deplored and avoided if possible, though we may not
agree as to what would constitute such a standard and
how it could be best avoided. Furthermore, few dis­
pute the proposition that gold is the most unvarying
money standard, though some contend that it is not the
only or best standard to be had. Mr. Bryan says he first
desires to preserve “ greenbacks ” from legislative de­
struction, and that he will then consider whether they
should ever be paid, and if so, how. I would firmly es­
tablish gold as the only standard money of this country,
as the past and present both teach that it is the best
standard. I am always in favor of improvement, but I
do not believe that everything so called is properly
named.
Since our last meeting a step—though not as long a
one as I had hoped for—has been taken toward fixing
gold in the monetary scheme of this country. I refer, of
course, to the Act of Congress approved March 14, 1900.
It authorizes an increase in the national bank circula­
tion, and leaves undisturbed our ten different kinds of
money, and it should, therefore, not offend, though it




may not satisfy, the monetary expansionist. This actiont
leaves the standard silver dollar a legal tender to any
amount in payment of all debts, public and private, ex­
cept where otherwise expressly stipulated by contract.
It provides that nothing in it shall be construed to affect
the legal tender qualities “ as now provided by law, of
the silver dollar, or of any other money coined or issued
by the United States.” Therefore, all private contracts,
merely providing for the payment of “ dollars ” can still
be discharged by the payment of silver dollars, Sherman
certificates, and greenbacks—that is, it has not affected
the standard of private contracts. It has, however, pro­
vided that something over $839,000,000 out of about
$1,026,000,000 of Government bonds bearing 3, 4 and 5
per cent, interest, and payable in “ coin,” may be re­
funded into 2 per cent, gold bonds. That is, to be as­
sured of gold in payment of the interest and principal of
these bonds, they must be readjusted, as it were, into 2
per cent, obligations on a 16 to 1 or 50 per cent, basis, as
you may say, so far as interest is concerned. In other
words, the act declares that “ coin ” in the bonds re­
ferred to shall mean “ gold,” if the holder will accept in
exchapge for his present 3, 4 and 5 per cent, bonds,
others bearing, on the average, less than half the inter­
est he is now receiving, and if he will not accept such
readjusted bonds he may still be paid, both as to prin­
cipal and interest, in silver. There still remains un­
funded into these 2 per cent, bonds about $550,000,000
of the $839,000,000 that may be exchanged for 2 per cent.
“ gold ” bonds. Having provided for the possible issue
of $839,000,000 of gold bonds, common prudence de­
manded that our gold reserve should be strengthened,
and this the act has done, but it falls far short of estab­
lishing the gold standard in this country, and does not
secure it against the policy of a President or Secretary
of the Treasury hostile to gold. The passage of this act
means, in my judgment, one thing which we should real­
ize if we would understand the sentiment of this coun­
try on the question of currency legislation, and that is,
that there is no hope in the near future, if at all in the
lifetime of this generation, of any elaborate currency
enactment along the lines of the “ Baltimore Plan ” or
any other which contemplates the issue of money by
the banks. Before we can hope for any legislation of
that kind the people at large, the masses, must be made
to t understand the necessity of it, and the justice and
wisdom of its specific provisions. And I care not how
the value of this bank money may be secured, nor how
fair may be the compensation paid by the banks for the
privilege, it will be difficult work, and take a long time
to persuade the people that the bankers are not getting
an undue advantage and profit through their right to
issue money. The unreasonable hostility with which so
many people still view the right of national banks in this
respect should convince the most sanguine of how al­
most hopeless will be the task of reconciling the people
to anything worth attempting of the kind under consid­
eration. And is anything along these lines worth at­
tempting ? Everything of the kind which has been sug­
gested involves a greater or less abandonment of the
most essential features of true or redemption money—
namely: Intrinsic and fixed value. And the closer we
keep to true money and the fewer substitutes for it we
have, the better. The industry, capacity, commerce and
wealth of the people are all proper elements of their
credit; but credit, which means after all hope, relief, ex­
pectancy, should be eliminated as far as possible from
money. For a thousand years before coins were in­
vented money passed by weight alone, and during that
period the only confidence needed with respect to it was
as to the purity of the metal, which was weighed out
before him to whom it was paid. Therefore, nothing but
necessity should induce the adoption or emission of rep­
resentative money. Its very name shows that it is a
substitute for something which is conceded to be better
than the substitute.
That there may at times, and in places, be need for

B A N K IN G
«lore money than is there and then to be had, does not,
by any means, show a need which justifies the issue of
representative money. The hoarding of money because
o f a widespread belief in its scarcity, or in a time of
panic, will often reduce the amount in active circulation
below the temporary needs of the community. Mr. Tren«holm in his work, “ The People’s Money,” says that even
through governmental efforts no community ever re­
tains for any length of time a greater volume of circu­
lation than will suffice for its ordinary needs, and that
no amount of money emitted by the Government can
avert periods of scarcity. In his judgment, the greatest
.safeguard against scarcity in a circulating medium lies
in extending the area and population subject to the
monetary system. He says: “ Periods of stringency are
less likely to occur in proportion as the area and popu­
lation under one monetary system become enlarged, and
hence it may be inferred that if the whole world were
under a uniform system such occurrences would be re­
duced to a minimum, if they were not rendered impos­
sible.”
This brings me to a suggestion I would make in this
«connection. We may not be able to bring all the world
to adopt our system of money, but may we not induce
most of the people of this hemisphere to adopt it ?
Hayti has already made our gold dollar its standard of
value, and its action may be the entering wedge whereby
the gold dollar of the United States will become in ex­
press terms the standard of every country in the three
Americas. All of them except some of the English pos­
sessions use the decimal system, and our money nomen­
clature is practically that of the Western Hemisphere,
or is, at least, familiar to most of its people.
Let this Association take up as an important part of
its work the task of procuring the adoption of the gold
dollar of the United States as the standard of value
throughout all the Americas. The mention of a future
work of this Association naturally brings to mind the
work it has done since our last meeting. What has been
accomplished will appear from the reports of the several
committees and of our Secretary and our Treasurer. I
will not attempt to anticipate what these reports will
disclose, but I cannot refrain from saying that too much
credit for the flourishing condition of the Association
cannot be given to its Secretary, Col. James R. Branch.
He is honest, painstaking, intelligent, and has an eye
always for the good of the Association.
In concluding, I would remind the members that this
is a voluntary organization without legal means for
coercing our members, or others, to measures that a ma­
jority of us may deem ever so advisable. We can only
persuade, and heretofore we have never attempted to
govern in any other manner, and have wisely forborne
from going into the details of banking and endeavoring
to secure uniformity in matters concerning which there
must, from the very nature of things, be much diversity
o f interest and judgment. If a contrary policy were
possible the present is an especially inopportune time
for its adoption, when combinations by capital are
viewed with so much disfavor by the masses.
That some of the leaders of the people should find it
to their advantage to decry the patriotism of bankers is,
1 am sure, a source of regret to all the members of this
Association; but I may venture to say, without fear of
successful contradiction, that no other single class of
men are so dependent on “ good times ” as bankers,
and none do more to make times good or stand more
bravely in the breach and sacrifice more to stem a panic
and avert the untold evils that follow in its trail, than
bankers. And no one class of men, from the days of
Robert Morris to the present time, have made more per­
sonal sacrifices and ventured their fortunes more freely
for their country than American bankers; and yet some
who must know this hesitate not to induce many to be­
lieve that bankers are the enemies of their country. Let
us hope that the ever-increasing intelligence of the peo­
ple will soon make them impervious to such unjustifiable




SE C T IO N .

55

misrepresentation and such unmitigated demagoguery
as now misleads them to the injury of their most im­
portant interests. Let us, the bankers of the country, in
the meantime go steadily along the pathway that con­
servative but progressive commercial methods marks
out for us, working in the future, as we have in the past,
for the prosperity of the people in times of peace and the
honor and safety of our country in the troublous times
of war, which, let us pray, may not come upon us again
in our generation.
The President: I understand that Governor J. Hoge
Tyler is now in the house. We would be glad to hear
from the Governor. He is to extend the address of wel­
come to the State of Virginia.
A d d r e s s o f W e lc o m e b y G o v e r n o r J. H o g e T y l e r o f
V ir g in ia .

Mr. President, Gentlemen of the American Bankers' Asso­
ciation, and Ladies:
It is said that the first time that Mark Twain got
into the presence of President Grant, with faltering,
trembling and hesitating steps, he nervously-banded out
his hand, or extended his hand, and said to him: “ Mr.
President, I am embarrassed. How do you feel, sir ? ”
[Laughter.] I confess, my friends, that I feel embar­
rassed on this occasion, not only at being in the dis­
tinguished presence of the ablest financiers of this coun­
try, but before so many bright faces of beautiful women.
But I received a shock to my nervous system as I came
through the corridors of the hotel, trying to get to this
stand a few moments ago. A man came up to me and
took me for a banker. [Laughter.] He tried to sell me
a box of “ intment,” as he called it, which he said was
guaranteed to cure rheumatism in twenty-four hours.
[Laughter.] While I have no objection to being consid­
ered a banker, and I don’t know that I would seriously
object to being a banker, yet if rheumatism is one of the
complaints and a tin box of “ intment ” has to be bought
when I haven’t got a nickel to buy it with, I would most
seriously enter my protest.
It gives me sincere pleasure to extend to you on be­
half of the people of Virginia a most cordial welcome to
our State and city. It is peculiarly appropriate that this
great Association of representative men, coming as you
do from all sections of our great country, should hold
its first session in the South here in Richm6nd. So many
memorials of a historic nature connected with our na­
tion’s birth and growth are clustered around this old cap­
ital that strangers are prone to believe that we are alto­
gether sentimentalists, and I am glad to welcome this
great body of American business men to our midst that
they may bear testimony to the fact that we are begin­
ning to realize the importance and necessity for indus­
trial advancement. This magnificent edifice in which we
are assembled to-day, our great locomotive works, our
shipyards and other industhries that will be shown you,
all the product of Southern enterprise and Southern capi­
tal, bear strong testimony to the truth of this statement.
We would not have you think we have lost all our senti­
mentality, for we have not; the glorious memories of the
past are the mainsprings to stimulate present ambition
and inspire future greatness. Sentiment is the soul of
man that softens the burden of the practical. It was a
sentiment breathed from the lips of Patrick Henry, on
one of the seven hills of this grand historic city, that
made possible this assemblage of representatives of
America’s financial greatness. We owe too much to sen­
timent to forget it, but we realize that we cannot live on
it alone. We are glad to have you, gentlemen, repre­
sentatives of the practical side of life, come among us
and help build up this great and glorious section of our
country. So that, if we cannot all have sentiment in
common, we can all have interests in common. Let us
add to the tie of sentiment the band of commercial unity,
to bind together in closer ties than ever the States of this
great Union and again make it what it was in the early
dys, so that an attack on Massachusetts was an attack
on all, and from every section came men ready to lay

56

BA N KERS’

C O N V E N T IO N .

down their lives in her defense. The South stands with
open arms to greet you, and her undeveloped resources
offer rich fields for your investments and your laboi’S.
The bank and the banker form the common meeting
place for the energies and enterprises of the people.
They constitute a common reservoir, into which empty
the thousand streams of human thrift and ingenuity, and
out of which are drawn the irrigating and sustaining
currents of capital for carrying on exchanges and
trades among men and for developing the latent powers
of nature. The banker is the most trusted of all men,
and, in turn, he must, perforce, maintain the greatest
faith in others. He must needs be a profound student
of human nature, and, above all, sagacious in the affairs
of men. If all men bring to bear upon him as much
pressure as I have known, at times, his normal condition
must be a thousand pounds to the square inch of sur­
face. If there are any weak or unsound timbers in him
they are to be revealed. He has, I imagine, his troubles,
like the rest of us, troubles that arise from inability to
extend favors, to succor the embarrassed, and at the
same time maintain his sacred obligation to the trust
funds committed to his care and honor. I am not one of
those so shallow in the philosophy of this life as to think
that a man, because he handles money every day, and
who sits where all waves meet, and where the trade
currents ebb and flow with the tides, is, therefore, neces­
sarily blessed among men and sips his lips from a brim­
ming cup. Care, troubles, responsibility are as common
to us all as the encasing air that we breathe. And if
there is one distinctive class of men who should have
a welcome to their work that is full of intelligent sym­
pathy, that class is the Bankers’ Assiociation of Amer­
ica. Your opportunities are great; your responsibilities
are correspondingly so. The American statutes creating
the system under which you work may be vicious and
filled with inequalities and injustices, but we all select
our individual bankers because of their known probity,
their trained business methods and never failing, never
lagging courtesy and consideration. Of course evil men
creep into your occupation and bring a reproach upon
you all. But what profession is free from this ? I. have
hear of such men even getting into politics. And I want
to say right here, if there were as rigid penal statutes
surrounding the holding of public office and covering the
abuse of the same as now surround the bank and the
banker, the Canadian colony of escaped politicians would
far exceed that of fugitive cashiers. There would be a
mighty exodus over the border every few years.
But I am drifting from my welcome. I want to say
to you that I havq been so used to looking at bankers
through iron gratings that it is a refreshing sight to see
you all sitting here with this unapproachable veil lifted
from your faces. I am beginning to feel that after all
you are men who can be trusted to walk out of your
cages into the warm glow of the sunlight and into balmy
good fellowship. And now, while I have you here, and
when no suspicion of wanting to get a note discounted
can possibly attach to me, I believe I will speak my mind
on one or two subjects. In the first place, you have
heard of that word collateral. Well, my friends, its
meaning needs to be enlarged. It usually means, in all
our American cities, the securities that are listed on the
Stock Exchange; and, unless a man can present to the
great Trust Companies, Savings Banks and National
Banks these so-called “ listed ” securities, he is unable
to borrow from them. Who lists these securities ? The
company of men who do this are themselves usually
large holders of these listed securities, and are, there­
fore, little inclined to enlarge the limits of this favored
circle. You may have lands and houses and cattle, man­
ufacturing plants, municipal bonds and a hundred kinds
of property, whose interest earning capacity is assured,
yet you cannot tap with ever so small a pipe these great
reservoirs. Even the small country banks themselves
cannot provide the right sort of collateral and so redis­
count their notes.




A better system ought to prevail. A man is not dis­
contented with our American system because it will not
lend Its money on worthless and precarious risks; he is
not discontented because you refuse to go into specula­
tions of a doubtful issue; but he is discontented because
so many men with income bringing property cannot al­
ways be accommodated with a loan upon it; not these
“ call” loans which will allow you, on a moment’s no­
tice, to dump the securities on the market whenever a
panicky tremor runs through the “street,” but time loans,
when a man can prepare to meet them, both principal
and interest, and pay you back the money that he has
borrowed. A better system should be devised, either
through branch banks or bureaus of information, or a
closer union and inspection should be made among the
different banks of the different States, so that a surplus
in one could help to make up a deficit in another. City
methods can never be applied to country ways.
If you will pardon me I will illustrate here by an an­
ecdote which, I confess, I have used more than once on
the stump.
Soon after the war, when banking rates, or discount
rates, were high, an old country friend in one of our
Southwest counties, a farmer, went to the bank to secure
a loan of $1,000 for five years. Of course this made the
man behind the grating open his eyes and look at him
with wonder and astonishment; and he was told that
they could not make provision for such a loan as that
unless they had the most absolutely satisfactory col­
lateral that could be obtained. The old fellow says,
“ Collat w h a t? ” “ Collateral,” he says. “ Well, what
is that ? ” He went on to describe the stocks and bonds
and securities. The old fellow says, “ Well, if I had.
those things I wouldn’t want any money.” [Laughter.]
“ They are better than money,” he says. “ Well,” says
the bank man, “ you can’t get it unless you succeed in
getting some of those collaterals; and then we might
discount your note.”
Well, to make a long story short, the old fellow suc­
ceeded in getting some collaterals and in getting some
personal indorsements, and in getting his own name
upon the paper and his wife’s, and got mortgages and
everything he had. He came and dumped his collaterals
down on the desk, and they were satisfactory. And the
cashier made out his note for him for $1,000 and told
him to sign it, which he did. He signed it and pushed,
it in to him; and then the cashier counted him out
$287.52. [Laughter.] The old fellow says “ Come on.”
[Laughter.] “ No, sir,” says the cashier; “ that is all
you can get on a $1,000 note for five years at our pres­
ent rate of discount.” “ Dis what ? ” he sa y s.' “ Dis­
count. That is all you can get.” “ What do you
mean? ” says the farmer. “ Why,” he says, “ we take off
the discount for the first four months and the next four
months and so on, and then, at the end of five years your
note will only make $287.52.” The old fellow grabbed hisnote and said, “ Give me my note, quick. I am glad 1
didn’t ask you to lend me that money for ten years; you
would have brought me in debt. I would have had to
pay you something for asking you to lend it to me.”
[Great laughter and applause.]
Such illustrations as this show the general condition
of the South at that time.
After the Civil War the South was a noble stretch of
territory, stripped of all semblance of money. It had
brains and energy, but no money; and this leads me to.
say that the basis for token or credit money, for the
issuing of circulating notes, should be made broader and.
more liberal To get the means with which to start new
business and new enterprises and repair the waste placesthe men of the South had to travel hundreds of mile* toNorthern cities, and, when there, almost beg on their
knees for credit. How quickly the work of restoration
could have been done if the bonds of the several South­
ern States had been made the basis of credit money and;
bank notes, if the lands of the South could have been
promptly mortgaged for operating capital.

B A N K IN G
Surely a plan can be devised by this company of men
to provide more liberal banking facilities and a more
abundant local currency without jeopardizing the return
of the principal or the prompt payment of the interest;
and any indisposition to take up this question, or to
bring the richness of your experience and the weight
of your influence to a happy solution of it, might give
just ground for the charge that you are the beneficiaries
of an unnecessary distress among the people.
You will notice that I have not said a word about free
silver. I do not want to inject into this welcome any
unnecessary disturbance, nor have any occasion to call
out the police while you are in Richmond.
A little girl came running to her mother in great haste
and said, “ Mama, tell me quick how to spell hell!. ” Her
mother, in great consternation, asked her what use she
could possibly have for such a word. The little one re­
plied, “ Oh, make haste, mama; tell me quick. I have to
spell hello; I know how to spell o, and I can get it all
right if you tell me how to spell hell.” Now, we all
know how to spell o, in all its phases—o-h and o w-e—
but the other part of your financial system is yet to be
spelled; and it remains to be seen who can do it.
Let me again repeat, gentlemen of the Association,
we give you a most cordial and hearty welcome to our
State and Capital City.
The President: The next business in order is the re­
port of our Secretary, Col. James R. Branch. [Ap­
plause.]
R e p o r t o f t h e S e c r e t a r y , M r. J a m e s R. B r a n c h .

The membership and resources of the Association
have increased as follows:
October 1, 1895—
Paid membership . .*...........................................
Annual dues ..................................................................
October 1, 1900— *
Paid membership ..........................................................
Annual d u e s .......... ..........................................

1,511
12,492
4,500

In the past year 234 members were lost through
failure, liquidation and withdrawal from the Associa­
tion, reducing the membership to 3,681. Eight hundred
and nineteen members have joined since September 1,
1899, a net gain over last year’s total membership of
585.

SE C T IO N .

57
DI SB URSEMENTS.

Transferred to standing protective account.$25,000.00
2,535.52
Proceedings 1899....................
Postage and express charges for distribut­
ing proceedings................................
676.34
Circular letters (31,700).............................
56.25
Postage on circular letters from Secre­
tary’s office and of various officers of
the Association..........................................
875.42
Salaries .......................................................... 8,694.44
20.000 4 per cent. U. S. Reg.
Bonds of 1925 at 134%___ $26,875.00
Less proceeds of 10,000 U. S. Reg. 3
per cent. Bonds of
1908-18 at 109___ $10,900.00
14.000 U. S. 5 per
cent.
Bonds
of
155.00
1904 at 113............ 15,820.00 26,720.00
Expert Accountant’s fee for examination
of Secretary’s office..............................
250.00
Oscar Unz for arbitrating bill for Brad­
ford Rhodes & Company.........................
100.00
Executive Council meeting, New York,
April 26, 1900............
1,907.77
Rent ............................
1,452.78
Postage ............................
478.40
Petty cash ..........................................
120.00
Sundry expenses..................
522.04
Printing, stationery, etc ...............................
501.30
Buttons for Cleveland Convention..............
316.50
Expenses Committee on Revising the Con­
stitution .....................................................
46.20
Expenses of Committee on Uses of Banks.. 2,967.85
Expenses of Credit Department Exhibit
and stationery d is trib u te d ...................
599.47
Expenses Committee on Express Compa­
nies, Bills of Exchange, etc....................
961.10
Expenses Trust Section ......................
981.13
Traveling expenses of Secretary................
77.64
Rugs for office................................................
94.00
Bonding officers ...........................................
67.50
Stenographer’s report Cleveland Conven­
tion ............................................................
125.00 $49,561.65
Vouchers accompanying for the above-mentioned disbursements.
61,200
Drafts (168) charged back account dues for year
1899-1900 .......... ..........................................................
Balance close of business Aug. 31, 1900................ .

2,095.00
63,936.34

$115,592.99
RECEIPTS.
September 1st, balance.. . . . . . . .......... .......................... $52,084,90
Interest on bonds............................................................
950.00
Amount returned by Jas. R. Branch, Secretary, ac­
162.89
count expenses Cleveland Convention......................
The roll now embraces 4,500 members whose
Dues from members, 1899-1900—
capital, surplus and undivided profits aggre­
70 .............. ...................................... .............. $540.20
gate ...............................................
$1,412,481,466
1 at $5.00....................................................
5.00
Combined deposits..............
5,168,377,728
463 at 10.00...............................................
4,630.00
148 at 15.00.................................................
2,220.00
Total ............................................................$6,580,859,194
14 at 20.00.................
280.00
t
14 at 30.00....................................................
420.00
8,095.20
This is $849,299,675 more than the same assets of last

year’s members. These figures do not include the capi­
tal and deposits of 432 members, who are private bank­
ers and make no statements.
Respectfully submitted,
J a s . R. B ranch , Secretary.
The President: You have heard the .report of your
Secretary. What will you do with it ?
Mr. Frederick Heinz, of Davenport, la.: I move it be
received and filed.
Seconded.
The President: It is moved and seconded that the re­
port be received and filed. All in favor of the motion
will say aye; opposed, no. It is carried.
The President: The next business in order is the re­
port of our Treasurer, Mr. George M. Reynolds, Cashier
of the Continental National Bank of Chicago. [Ap­
plause.]
R e p o r t o f t h e T r e a s u r e r , M r. G e o r g e M. R e y n o l d s .

Chicago , III., September 1, 1900.

To the American Bankers’ Association:
Gentlemen: I have the honor to submit the following
report of receipts and disbursements since the beginning
of the current fiscal year—viz., September 1, 1899:




Due from old members paid in advance
for 1900-1901—
480 at $10.00........
$4,800.00
386 at 15.......................................
5,790.00
47 a t 20.00..........................
940.00
47 at 30.............................
1,410.00

12,940.00

For account of the Continental National Bank of
Chicago, 111., Bills deposited with the National
Bank of the Republic, New York, N. Y., for mem­
bership dues for the ensuing year (subject to deduction for unpaid b ills)........................................... 41,360.00
Total ......................................................................... $115,592.99
STANDING PROTECTIVE ACCOUNT.
Balance on hand September 1st, 1899........................... $8,940.70
Appropriated by the Executive Council......................... 25,000.00
$33,940.70
Disbursed to September 1st, as per accompanying
vouchers ........................................................................ $20,522.13
Balance, August 31st, 1900.......................................... 13,418.57
$33,940.70

The Treasurer holds for the Association as an invest­
ment the following United States bonds:
$20,000 par value four per cent, registered bonds of 1925.

Respectfully submitted,
G eorge M. R ey nolds , Treasurer.

BA N KERS’

58

C O N V E N T IO N .

The President: You have heard the report of the
Treasurer. What will you do with it ?
Alvah Trowbridge, of New York: I move it be re­
ceived and filed. [Seconded.]
The President: It is moved that the report be re­
ceived and filed. All in favor of that will please say aye;
opposed, no. It is carried.
The President: The next report in order is the re­
port of the Auditing Committee. It will be made by its
Chairman, Mr. R. M. Parmely, President of the Ameri­
can Exchange National Bank, of Cleveland, Ohio.
R e p o r t o f t h e A u d it in g C o m m i t t e e .

R ichm ond , Va ., October 2, 1900.
The American Bankers' Association:
Gentlemen: The undersigned Committee, appointed
by the President to audit the accounts of the Treasurer,
beg leave to make the following report:
Balance on hand September 1st, 1899................... ..
$52,084.90
Receipts during current y e a r . . . .................................. 63,508.09
Total.................................. ..........................................$115,592.99
Disbursements as per vouchers at close of business
September 1st, 1899, including unpaid drafts re­
turned .......................................................................... $51,656.65
Balance on h a n d ..................................................... $63,936.34
Standing protective account—
Balance on hand September 1st, 1899........................ $8,940.70
Receipts transferred from general account........ ........ 25,000.00
$33,940.70
Disbursements to September 1st, 1900...................... .. $20,522.13
Balance on hand September 1st, 1900.................. $13,418.57

Your Committee has examined the accounts and
vouchers, and find the same to be correct, and we find
the finances of the Association to be in good condition.
R ich a rd M. P arm ely , Chairman.
J. M. D onald ,
J. H. W illo c k .
The President: You have heard the report. What
will you do with it ? It is moved by a member that the
report be received and filed. All in favor, please say
aye; opposed, no. It is carried.
The President: Col. John B. Purcell, of the Recep­
tion Committee in the city, wishes to make a few an­
nouncements.
Col. John B. Purcell made announcements respecting
pleasure trips prepared for the delegates and visitors.
The President: The next business in order is the re­
port of your Executive Council by its Chairman, Col.
Myron T. Herrick, President of the Society for Savings,
of Cleveland, Ohio. Col. Herrick will please some to
the platform. [Applause.]
R e p o r t o f t h e E x e c u t i v e C o u n c il.

To the American Bankers' Association:
It seems unnecessary, in presenting this report of the
Executive Council, to enter into a detailed account of the
work, inasmuch as this is fully covered in the address
of the President, the reports of the Secretary, the Treas­
urer and the various committees.
The increase in the membership of the Association,
which we have noted from year to year, has continued
during the current year, so that our present membership
numbers 4,500 banks, trust companies and banking
firms, as compared with 3,915 members reported last
year, marking a gratifying volume of increase for the
current year. The Association is in excellent condition
financially—better than ever before.
The influence of the Association is increasing year
by year in pace with the increase of membership, and
its forward progress is ever toward a broader and higher
plane of efficiency and usefulness to the end that it may
“ promote the general welfare of banks and banking in­
stitutions,” and of the community at large. It is very
evident that the unanimous and emphatic expression of
the American Bankers’ Association for an honest cur­




rency based upon a gold standard has exerted a bene­
ficial and far reaching influence upon our country.
During the absence abroad of the Chairman of the
Executive Council for a portion of the year, Mr. Trow­
bridge has courteously undertaken, and has, during that
period, in his usual painstaking manner, rendered effi­
cient service in the performance of the duties of that
office.
To the diligence and energy of the Secretary, Colonel
Branch, is due, in no small measure, the large increase
of membership, and the work of his well organized office
and able assistants is worthy of special consideration.
At a meeting of the Executive Council, held in this
city last night, several questions were submitted, and
will be offered for your discussion and approval or re­
jection.
M yron T. H er r ic k ,
Chairman Executive Council.
The President: You have heard the report. And Mr.
P. W. Huntington, of P. W. Huntington & Co., of Colum­
bus, Ohio, from the Committee on Revision of the Con­
stitution and By-Laws, will submit a report, which is a
part of this report.
Mr. P. W. Huntington: Mr. President and Members
of the Convention, Ladies’ and Gentlemen: I regret
very much that Mr. J. G. Cannon, Vice-President of the
Fourth National Bank of New York City, who is Chair­
man of the Committee on Revision, is not present to­
day. In his absence the duty of presenting the report
of the Committee has been assigned to me. I beg to say
that the Committee, in performing the duties assigned
to them, have chiefly only recommended verbal changes
in the Constitution and By-Laws. The only radical
change they have suggested is that relating to the dues
of the members.
AMENDMENTS TO CONSTITUTION.
The first change submitted by the Committe is as fol­
lows: In Article II, Section 3, substitute for the words,
“ No delegate shall vote in more than one capacity,” the
words, “ But other than this no fractional part of fifty
members shall entitle an Association to an additional
delegate.” In Section 4, add “ Nor shall any State As­
sociation be entitled to more votes than it has delegates
present at the meeting.”
The President: What is the pleasure of the Conven­
tion ? This is a long report and made pnanimously by
this Committee, and indorsed by the Council. I would
suggest that each change be voted on separately, and
then adopt the report as a whole; or read the changes
and put the report before the body as a whole. I await
the pleasure of the Convention.
Alvah Trowbridge: I suggest that the changes be
voted upon as they are read by the Chairman of the
Committee. I make that motion. (Seconded.)
The President: Mr. Trowbridge moves, and it is sec­
onded, that these proposed changes to the Constitution
and By-Laws be voted on separately. All in favor of
that please say aye; opposed, no. It is carried.
Alvah Trowbridge: I move that the first change pro­
posed be adopted. (Seconded.)
The President: It is moved and seconded that the
first change proposed, which you have heard read, be
adopted. As many as favor the motion say aye; opposed,
no. It is carried.
Mr. P. W. Huntington: Section 4 we found to read:
“ Delegates shall vote in person; no voting by proxy shall
be allowed. No delegate shall vote in more than one
capacity.” We added to that: “ Nor shall any State As­
sociation be entitled to more votes than it has delegatespresent at the meeting.”
J. P. Huston, of Marshall, Mo.: Are to we understand
from this last change that proxies will not be allowed ?
We elected seven or eight or ten delegates six or eight
months in advance of the Convention, and we find it is
impossible for them all to be present; in fact, they are
never present. It has been customary heretofore for
the delegates who were present to fill the vacancies. Do.
I understand from that that proxies are prohibited ?

B A N K IN G
The President: The Association does not require the
names. All they want to know is that you have your
representatives at the meeting.
Mr. F. W. Tracy, of Springfield, 111. : Illinois instructed
her delegates to fill any vacancy that might occur. That'
is the positive instruction from the Stqte Convention.
It seems to me that this Association has no right to re­
strict that, and if the vacancies are filled from those
present, it seems to me it should be recognized. If that
is provided for I am in favor of it.
The President: I will state to Mr. Tracy that that is
not changed at all. If a man comes here as a delegate
he is not a proxy. That is simple enough. The Council
has passed on this, and the Committee. There is nothing
taken from the State Associations in the change. It is
moved that the proposed amendment be adopted. Those
who favor the adoption will say aye; opposed, no. It is
carried.
The President: Mr. Hague, the representative from
Canada, a guest of ours, I understand, is on the floor.
Will he please take a seat upon the platform ? [Ap­
plause.]
Mr. P. W. Huntington: Section 1 of Article III, as we
found it, is as follows: “ The administration of the af­
fairs of the Association shall be vested in the President
and First Vice-President of this Association, and one
Vice-President for each State and Territory which may
be represented in this Association, and in an Executive
Council, who shall be elected at the annual meeting,
and who shall serve until their successors are chosen or
appointed. The Executive Council shall be composed of
thirty members, divided into three classes, one-third of
whom shall be elected annually; commencing with the
Convention of 1897, five members of the Executive
Council shall be chosen by the delegates from the sev­
eral State Associations of Banks and Bankers, five in
1898, five in 1899 and thereafter the successors of these
several groups annually; the Persident and First VicePresident shall also be members ex-officio; and no Presi­
dent or Vice-President, nor retiring member of the
Executive Council, shall be eligible for re-election for
the period of one year after the expiration of his term
of office.” We suggest to omit “ Commencing with the
Convention of 1897,” lines 9 and 10, and insert the words
“ annually ” between the words “ shall be ” and “ chosen
by the delegates.” Omit the words “ five in 1898, five in
1899 and thereafter the successors of these several
groups annually.”
The President: All in favor of the adoption of the
recommendation will say aye; opposed, no. It is carried.
Mr. P. W. Huntington: Section 2 of Article III, as we
found it, reads as follows: “ Immediately after the first
adjournment that occurs in the session of the annual
convention the delegations from each State and Terri­
tory shall meet, at which several meetings the respec­
tive Vice-Presidents of the States and Territories, if
present, shall preside, and these meetings of represent­
atives from the States and Territories shall each select
a member who shall constitute and be the Committee on
Nominations. The Committee may make its report at
any subsequent session of the Convention, but its nomi­
nations shall not exclude the name of any person other­
wise nominated in the Convention.” There is another
clause to the section which has nothing to do with the
change we make. In the seventh line we insert after
the words “ select a member who shall,” the following:
$ With others so selected.” Insert after the words “ the
•elections for President,” the word “ first.” That is sim­
ply a printer’s error in the original Constitution. The
intention was that it should read “ first vice-president.”
The printer omitted it.
The President: What will you do with the change
proposed ?
Mr. Alvah Trowbridge: I move its adoption. (Sec­
onded.)
The President: It is moved and seconded that the




S E C T IO N .

59

change be adopted. All in favor of its adoption will say
aye; those opposed, no. And it is carried.
Mr. P. W. Huntington: Section 8, Article III, we
found as follows: “ The Secretary shall make and have
charge of the records of the Association, as well as those
of the Council, and of the correspondence of the Exec­
utive Council and Standing Protective Committee, and
shall promptly send to each member of the Association
a synopsis of the reports received by him of attempted
or accomplished crime against any member of the As­
sociation. Such record shall be the property of this
Association, and be held subject at all times to the order
of the Executive Council.”
For the sake of clearness the Committee struck that
section altogether out, and substituted the following,
which conveys very much the same meaning in a very
little different phraseology: “ The Secretary shall make
and have charge of the records of the Association.
These records shall include the correspondence of the
Executive Council and that of the Standing Protective
Committee.
He shall be held responsible for and
charged with the safe keeping of the records of both the
Executive Council and the Protective Committee. And
it shall be his duty to send promptly to each member of
the Association a synopsis of the reports received by him
of attempted or accomplished crime against any mem­
ber of the Association. These records shall be the prop­
erty of the Association, and be held subject at all times
to the order of the Executive Council.”
Mr. Homer C. Stewart, of McKeesport, Pa.: I move
the adoption of it. (Seconded.)
The President: All in favor of the adoption of the
proposed change will «ay aye; those opposed, no. It
is carried.
Mr. P. W. Huntington: Section 4 of Article IV, as we
found it, is as follows: “ All detective and legal expenses
and costs shall be paid by the Treasurer upon approved
orders of the Protective Committee, out of such moneys
in the treasury as may have been especially appropriated
or collected by the Council for that purpose.”
For the same reason we change the last section, we
changed this, and substitute the following: “All detect­
ive and legal expenses and costs incurred by the Pro­
tective Committee, and other committees, not exceeding
the appropriations set apart for the use of these com­
mittees respectively, shall be paid by the Treasurer, only
upon vouchers drawn by the Chairmen of the various
committees, duly countersigned as provided for in Ar­
ticle 3, Section 9, of this Constitution.”
The President: What will you do with the proposed
change ?
Mr. Alvah Trowbridge: I move its adoption. (Sec­
onded.)
The President: All in favor of its adoption will say
aye; those opposed, no. It is adopted.
Mr. P. W. Huntington: Section 1 of Article VI, as we
found it, is as follows: “ The expenses of the Executive
Council of the Association in carrying out the business
to be done by them, shall be provided for by the annual
dues of the members of the Association; provided, how­
ever, that the Executive Council shall have no authority
to incur or contract on behalf of this Association any
liability whatever beyond the annual dues hereby au­
thorized, or moneys especially collected, and only that
for the purposes hereby designated.”
We changed this slightly in order to make it more
clear. In the third line substitute the word “ it ” for
“ them,” so that it will read: “ The expenses of the
Executive Council of the Association, in carrying out
the business to be done by it, shall be provided for by
the annual dues,” etc. After the words: “ Any liability
whatever beyond the,” insert “ amount of the,” and sub­
stitute the word “ and ” for “ all ” after “ authorized.”
Omit the last line—“ and only that for the purposes here­
by designated,” and substitute “ no expenses shall be
incurred, except for purposes designated in this Con­
stitution.”

60

BA N KERS’

C O N V E N T IO N .

The President: What will you do with the proposed
change ?
Mr. George M. Reynolds, of Chicago: I move its adop­
tion. (Seconded.)
The President: Those in favor of its adoption say aye;
opposed, no. It is carried.
Mr. P. W. Huntington: Article VIII, Section 1, as we
found it, is as follows: “ Any one failing to pay within
three months the dues for carrying on the business of
the Association, shall be considered as having with­
drawn from membership, but may be reinstated upon
application to the Treasurer, and paying all dues and
arrears, with the consent of the President or Chairman
of the Executive Council.” We changed this very
slightly. Omit the words “ for carrying on the business
of the Association,” and insert the word “ membership ”
before “ dues,” and change in the next lines the word
“ membership ” to the words “ the Association.” In the
fifth line, instead of application being made for rein­
statement to the Treasurer, we substitute the word
“ Secretary.” It is the business of the Secretary to re­
ceive these applications and not the Treasurer.
The President: What will you do with it?
Mr. Alvah Trowbridge: I move it be adopted.
The President: All in favor of its adoption'will say
aye; opposed, no. It is adopted.
Mr. P. W. Huntington: Article IX, Section 1, as we
found it, reads as follows: “ This constitution may be al­
tered or amended at any annual meeting, by a vote of
two-thirds of the members present, notice of the proposed
amendment having been first submitted to the Secretary
at least thirty days before the. annual meeting, to be
placed by him before the Executive Council, that they
may arrange for bringing it before the convention under
the regular order of business.” We beg to substitute so
that it will read “ This constitution may be altered or
amended at any annual meeting by a vote of two-thirds
of the members present, notice of the proposed amend­
ment having first been submitted to the Secretary at least
thirty days before the annual meeting, and the Secretary
shall forthwith forward to every member of the Execu­
tive Council a copy of such proposed amendment, and it
shall also be placed by him before the Executive Council,
that they may arrange for bringing it before the conven­
tion under the regular order of business.”
You observe that the only change is that the notice
shall not only be sent to the Secretary, but that it shall
be his duty to notify each member of the Executive
Council of the proposed change at once, when he receives
the notice.
The President: What will you do with the proposed
change?
Mr. Alvah Trowbridge: I move its adoption. (Sec­
onded.)
The President: It is moved and seconded that the
change be adopted. Those in favor of the motion will
say aye; those opposed, no. It is carried.
Mr. P. W. Huntington: In Section 1 of the By-Laws
we simply made a grammatical change. We changed
the word “ to,” to the word “ shall,” so that instead of
reading “ The annual convention of each closing year to
be held at such time,” etc., it will read “ The annual con­
vention of each closing year shall be held at such time,”
etc.
The President: What will you do with the proposed
change?
Mr. Alvah Trowbridge: I move its adoption.
The President: All in favor of its adoption, say aye;
those opposed, no. It is carried.
MEMBERSHIP DUES REDUCED FOR SMALL INSTITUTIONS.

Mr. P. W. Huntington: The second by-law is the one
in which we made the most important and radical
change. It relates to the dues of membership. As we
found it, it reads as follows: “ The annual dues of the
members of this Association, after the close of the fiscal
year ending August 31, 1896, shall be $10 for banks hav­
ing an aggregate capital and surplus of less than $100,-




000; $15 for banks having a capital and surplus of $10Oy000 and less than $500,000; $20 for banks having a capital
and surplus of $500,000 and less than $1,000,000, and $30»
for banks having a capital and surplus of $1,000,000 and
over, except that the dues of savings banks without cap­
ital, private bankers, and banking firms, shall be $10
each.”
The Committee consulted with Mr. Branch, the Secre­
tary of the Association, in regard to these dues. It is ob­
vious that the Association accomplishes its greatest bene­
fit to the fraternity throughout the country by increasing
its membership as much as possible. The Secretary and
certain members of the Council, besides, have found com­
plaint made largely from the smaller banks through the
country, of the excess of their dues—$10. It has been
proposed by the Committee to reduce those dues some­
what, for two reasons—one for the purpose of extending
the membership among the small banks, especially in
the South and Southwest; the other for preventing a
large accumulation of money, or assets, in the hands of
the Treasurer, for which the Association has no use.
That fund has been growing rapidly during the last few
years, while the membership of the Association has been
so largely increased. The Committee beg to offer as a
substitute for the second by-law, just read in your hear­
ing, the following, which had the approval of the Execu­
tive Council last night.
The President: What will you do with the proposed
change.
Mr. P. W. Huntington: I have not read it. [Laugh­
ter.] The substitute is as follows: “ The annual dues of
the members of this Association shall be $5.00 for bank&
and trust companies having an aggregate capital and
surplus of less than $50,000, savings banks without cap­
ital, and private bankers and banking firms; $10.00 forbanks and trust companies having an aggregate capital
and surplus of $50,000 and less than $100,000; $15.00 forbanks and trust companies having an aggregate capital»
and surplus of $100,000 and less than $500,000; $20.00
for banks and trust companies having a capital and sur­
plus of $500,000 and less than $1,000,000, and $30.00 for
banks and trust companies having a capital and surplus,
of $1,000,000 and over.”
You will observe that in the original clause as read
there was no mention made of trust companies. Wehave inserted them in their proper place in the substi­
tute.
Mr. George M. Reynolds: I move its adoption.
The President: What will you do with it?
Mr. F. W. Tracy: I want to understand whether pri­
vate bankers with capital are assessed according to their
capital or only pay $5.00? According to the reading, 1
understand all private bankers pay $5.00. Now, should
they have capital, don’t they come in under the other
banks with the same capital? Should they not?
The President: If they make statements, they comein as any other banks; if they do not, they do not.
Mr. Frank W. Tracy: Shouldn’t there be a provision»
in that amendment that the private banker should pay
according to his capital? As it reads, it says privatebanks shall pay $5.00. Isn’t that the meaning of it?
Mr. P. W. Huntington: That is the way it reads.
The President: The only change here is a reduction in
the small banks from $10.00 to $5.00.
Mr. P. W. Huntington: Banking firms formerly paid
$ 10.00.

Mr. F. W. Tracy: I suppose those without capital
would also mean private bankers. It is not fair to th&
other bankers. They should pay about the same as theother.
The President: The question is on what you will dowith the proposed amendment.
Mr. Alvah Trowbridge: I move its adoption.
Mr. F. W. Tracy: I would substitute an amendment,
if I can, that private bankers and banking firms shall
pay according to their capital, on the same basis as the
other banks. Banking firms and private banksers should
come in under this regulation. Under the old, I under-

B A N K IN G
■stood it was where they were without capital; but, if
they have capital they should pay according to their cap­
ital as the other banks. I make an amendment to that
effect, that it shall read that all private bankers pay ac­
cording to their capital.
Mr. Alvah Trowbrige: Mr. President, I think we had
better consider the matter before we pass such an amend­
ment as that. It is very desirable for this Association to
have the membership of a great many private banking
firms, particularly in the larger cities. I feel quite sure
that, if you ask them to make statements as preliminary
to their privilege of membership in the Association, they
will not make a statement, but rather will abide outside of
the Association. I think their influence in the Association
is worth quite as much to the Association as any dues
that might be inflicted upon them. I therefore move the
adoption of the amendment.
The President: I will say to Mr. Trowbridge that there
is a proposed amendment and an amendment to that.
Mr. J. P. Huston: I move the amendment offered i>y
Mr. Tracy be laid on the table. (Seconded.)
The President: It is moved and seconded that Mr.
Tracy’s amendment be laid on the table. All in favor of
that will say aye; those opposed, no. I decide that it is
carried.
Mr. L. P. Behrens, of Redwood City, Cal.: I move that
this matter be left in the hands of the committee. It does
not seem to me fair for banks with $100,000 to pay $15.00,
and those larger banks of $1,000,000 or $10,000,000 to pay
$30.00. If there is any readjustment I think it should
be made between the smaller banks with $100,000—that
is, paying half the amount of a bank with $10,000,000. I
move that this be left to the Committee.
The President: The question is on the motion of Mr.
Trowbridge—that is, the adoption of the report of the
Committee. All in favor will say aye; opposed, no. The
ayes seem to have it. There is a call for a rising vote.
All in favor of the report of the Committee, which means
that you will only change the small banks’ dues from
$10 to $5, and I think some of the Savings Banks—all in
favor of the adoption of the report of the Committee, or
that part of it, will rise and stand until the Secretary can
count them. Now, those opposed will please rise. The
report of the Committee is adopted.
Mr. L. P. Behrens: I raise the point that it requires a
two-thirds vote.
The President: The Chair announces that there is over
four-fifths.
Mr. L. P. Behrens: You haven’t stated the number.
The President: The Chair has no number, but he an­
nounces that it is carried by a four-fifths vote.
Mr. P. W. Huntington: That ends the duties of the
Committee on Revision. [Applause.]
Mr. «T. J. Sullivan, of Cleveland, Ohio: I now move the
adoption of the report of the Committee as a whole. (Sec­
onded.)
The President: I think that the part of the Executive
Council’s report would require a two-thirds vote; so,
therefore, I would suggest that you separate the motion.
Mr. J. J. Sullivan: I move its adoption as a whole.
The President: As many as favor the adoption of the
report will say aye; those opposed, no. It is adopted.
The President: The report of the Protective Commit­
tee is now in order. This Committee is a secret commit­
tee, and the report will be read by the Secretary.
R eport of P ro te ctiv e C om m ittee.

The Protective Committee begs to submit the follow­
ing report of the work committed to its care by the
Executive Council for the year 1899-1900:
Balance on hand per Treasurer’s report,
September 1, 1899..........
..........
Appropriated by Executive Council..........
Paid account expenses, 1 8 9 8 -1 8 9 9 .......
Paid account expenses, 1899-1900............
Total receipts .............................................
Total expenditures ....................................

$8,940.70
25,000.00—$33,940.70
503.83
20,018.30—$20,522.13
33,940.70
20,522.13

Balance September 1, 19Ö0. . . . i ...........................$13,418.57




SE C T IO N .

61

Twenty-four hundred letters and reports received and
considered during the past season have furnished se­
lected matter for eighty-three items of information
which have been issued in pamphlet form every few
months to each member of the Association, containing
descriptions of the swindlers at work and specimens of
their handwriting, affording a possibility of identifica­
tion in every town in the United States in which a mem­
ber is located, and a warning of every method offering
a menace to the banking community. Forty-eight photo­
graphs and descriptions selected by the detective agents
of the Association with a view to their usefulness at
time of issue, have been included in the pamphlets, and
have helped to make their publication of the greatest
practical value. In conjunction with the membership
sign issued to each new member of the Association, there
has been regularly forwarded a little booklet with con­
fidential advice and instructions prepared by the Protec­
tive Committee.
Two special circulars have been issued with good re­
sults. In the first instance a circular, with accompany­
ing letter, was sent out during August, 1900, bearing a
photograph and description of one Harry Dell, whose
operations with bogus drafts during several years past
have defrauded and annoyed a number of banks and the
proprietors of factories and machine shops, of whom he
has negotiated purchases of second-hand machinery.
To secure immediate payment, the owner of such ma­
chinery would indorse Dell’s proffered draft drawn in
excess of the purchase price, or else would identify him
at the bank and so enable him to cash the draft. After
making the agreed payment, Dell would leave town
with the balance before the fraudulent nature of the
draft could be learned. About a month after the issue of
this circular, in September, Dell attempted to operate
this method at Millbrook, N. Y., where he tendered at
the First National Bank, a member of the Association, a
bogus draft for $525. He was recognized by the officials
as the swindler referred to in the circular and at once
placed under arrest. The Association was promptly
notified and Dell has been transferred to Northport,
L. I., where, in July, 1900, he defrauded the Bank of
Northport, a member of the Association, with a fraudu­
lent draft for $525. He is now held for trial. A circu­
lar bearing a photograph and descripton of P. O. Bonner
and showing his method of operating was issued in
August, 1900, with a view of causing his arrest. Bonner
is a forger who has operated by confidence methods to
secure loans on parcels of real estate which do not be­
long to him, presenting as the basis for a loan a forged
deed to property owned by a non-resident, to which he
had attached a bogus notarial acknowledgment. He
has been known to prepare and successfully forward for
his identification a bogus notarial affidavit. His opera­
tions were usually conducted to defraud lawyers and
loan agents, but, in several instances, banks have been
defrauded by him. As a result of this circular, in Sep­
tember, the agents of the Association were notified of
the arrest and identification of Bonner at Stuart, Iowa,
where he presented at the Exchange State Bank, which
is not a member of the Association, a check for $2,000,
representing the amount of a loan negotiated on a
forged real estate deed at the adjacent town of Green­
field. Bonner will be tried at Fairfield, Iowa.
Following the custom of previous reports, we beg to
submit herewith a brief statement in general terms of
the results of the Protective system up to date:
1. So far as known, there is not to-day an organized
band of expert forgers in this country.
2. Early in the year an organized band of forgers,
under the leadership of Alonzo J. Whiteman, operated
extensively. It defrauded one member of the Associa­
tion in September, 1899. In November the entire band
was under arrest, and its members are now serving long
terms of imprisonment.
3. In spite of unusual activity among professional
and tramp burglars since August 1, 1899, only one mem-

62

BA N KERS’

C O N V E N T IO N .

ber of the Association has suffered loss at their hands
since that date, the loss amounting to $3,000.
4. During the same period fifty-four banks, not mem­
bers of the Association, have suffered losses of about
$130,000 from the same source.
5. From May 1, 1895, to September 15, 1900, members
of the American Bankers’ Association have lost by the
operations of burglars, robbers and sneak thieves, $24,932.
6. From May 1, 1895, to September 15, 1900, banks
not members of the Association have, in the same way,
^suffered reported losses of over $535,000.
, In several instances members of the Association have
been defrauded by individual forgers whose work dur­
ing the year has begun and ended in that one operation.
Petty malefactors, too, have operated on a number of
members, but in one instance only has an organized band
of expert forgers operated upon a member during the
past season.
Shortly afterward the band was dis­
rupted by the arrest and imprisonment of its members.
Upon the apprehension of this band at its headquarters
in New York City, Alonzo J. Whiteman, a noted and
troublesome offender, was found among its members,
their undoubted adviser and head. As related in pre­
vious matter, Whiteman is a man of good education who
has had experience as a bank director, and has held im­
portant public positions. His knowledge and ability
have made him one of the most troublesome of the
swindlers with whom the Committee has had to deal,
although, of recent years, he has shown more or less a
«disposition to avoid members. The operations of a mem­
ber of the band upon the Brooklyn Trust Company of
ithe Borough of Brooklyn, New York City, caused the
Association to take action.
In September, 1899, William Hartley, a member of
the above-mentioned band, arranged to purchase for his
»residence a house in Brooklyn. He gave his name and
title as George W. Johnson, M.D., and secured an intro­
duction at the Brooklyn Trust Company from the real
estate dealer with whom he had been negotiating. He
¿agreed upon a rate for a proposed mortgage loan, and
then arranged to open an account by his personal check
’for $3,000 on Hoboken, N. J. Early the next morning
!he deposited a draft purporting to be drawn by the Law­
rence National Bank, Kansas, on the First National
IBank of New York City, and drew $350 in cash. When
bis deposits were found to be bogus the Association was
advised,, and on November 13 the members of the band,
four in number, were placed under arrest. Alonzo J.
Whiteman was sent to Chicago to serve a sentence for a
previous offense, and William Hartley was sentenced at
Brooklyn to imprisonment for five years at Sing Sing.
The other members of the band, Robert J. Knox and
Charles E. Stewart, were wanted at Pittsburg, Pa., and
Woonsocket, R. I., respectively, and were there con­
victed, Knox being sentenced to four years and six
months’ imprisonment and a fine of $1,000, and Stewart
being sentenced to imprisonment for five years.
B urglars and T h iev es .—From August 1, 1899, to
September 15, 1900, there have been reported ninetynine attacks made by burglars, robbers and sneak
thieves on banks not members of the Association. Fiftyseven of this number were attacked with success and
suffered a total loss of over $235,000, while during the
same period four banks, members of the Associaton,
have suffered from the same source a total loss of $12,194.
A notable occurrence during the year was the rob­
bery of the First Natonal Bank of Seattle, W ash, a
member of the Association, by Leonard Parker and
John Collins, two sneak thieves, who entered the bank
at noonday on March 19, 1900. A previous inspection
had made them familiar with the surroundings and
'habits of the clerical force, and while Parker, at the win­
dow of the teller’s cage, held the attention of its tera.porary occupant, Collins entered the gate of the bank­
ing inclosure used by the employees, made his way to




the back of the cage, seeared $5,000 in currency and es­
caped, followed by his confederate. The Association
took the matter in hand at once, and on March 23, 1900,
at Victoria, B. C., Leonard Parker was placed under
arrest, and on the same day John Collins was appre­
hended at San Francisco. They were returned to Seat­
tle, where Collins pleaded guilty and was sentenced to
the penitentiary on May 26 for a term of ten years.
Parker was convicted, and on June 9 was sentenced to
the penitentiary for a like term.
At noonday on August 9, 1899, the ScandinavianAmerican Bank of St. Paul, Minn., a member of the As­
sociation, was robbed of $540 in currency by sneak
thieves, one of whom called the temporary occupant of
the teller’s cage to the telephone, while the other stepped
from the lobby to the window and fished the money
through. The thieves returned the money with an an­
onymous note saying that the theft would never have
occurred had the membership sign been displayed at
the teller’s window. Owing to lack of means for secur­
ing positive identifications, further prosecution could
not be made.
There has been unusual activity among tramp burg­
lars during the past season. Their depredations have
been especially prevalent in the central portion of the
country, including the States of Minnesota, Wisconsin,
Michigan, Indiana, Illinois, Iowa, Missouri, North Da­
kota, Kansas and Nebraska. In these States alone at­
tacks made on sixty-two banks not members of the
Association resulted in reported losses from burglary
of more than $85,000, while only one member of the
Association, the Exchange Bank of Brooklyn, Mich.,
suffered loss from this source amounting to $3 ,000, and
three members, the Pearl City Bank, 111.; the State Bank
of West Pullman, 111., and the Bank of Salem, Neb.,
were unsuccessfully attacked. On the night of Novem­
ber 20, 1899, the attack on the Exchange Bank of Brook­
lyn, Mich., was made by burglars who blew open the
safe and secured $3,000, making their escape without
leaving any clue. The agents of the Association made a
thorough investigation, but found that no identification
could be made in the vicinity. At Cambridge, N. Y., on
November 14, an ineffectual attack on the safe of the
Cambridge Valley National Bank, a member of the Asso­
ciation, was made by burglars who desisted after their
first attempt and made their escape. On December 12
four men attempted to force an entrance into the Deep
River Savings Bank, Connecticut, a member of the As­
sociation. Following a warning to the bank from the
Association in February, 1899, careful watch had been
maintained, and the burglars were discovered by the
bank watchman, who opened fire and killed one man,
putting the others to flight. On December 9 the Bank
of Houma, La., a member of the Association, was robbed
of $3,654 by local thieves, who cut through the brick
vault and made off with three bags of silver coin, some
loose silver and currency to the value stated. The safe
was not attacked, and several trays of loose silver and
two bags of coin in the vault were not molested. On
April 13 an unsuccessful attack was made on the safe
of the First National Bank of Claysville, Pa., a member
of the Association, by burglars who blew open the vault
door, but left without getting into the safe. The agents
of the Association have these matters in hand.
F orgers and Swindlers .—From August 1, 1899,
to September 15, 1900, ninety forgers and swindlers,
including petty operators and amateurs* have defrauded
or attempted to defraud members of the Association.
Of these twenty-eight have been arrested and fourteen
have been sentenced.
In addition, eleven forgers and swindlers have been
convicted and sentenced who have operated to defraud
members during a previous season, or who have been a
source of annoyance to them.
Following is the detailed financial statement of the
Protective Committee from close of fiscal year August
31, 1899, to September 1, 1900:

B A N K IN G

S E C T IO N .

63

The genesis of the law is as follows: In 1896 the
Committee on Commercial Law, instructed to that
effect by the Conference of 1895, caused to be grafted
an Americanized form of the British act on Bills and
$33,940.70
Notes, passed in England in 1882. This was done by
EXPENDITURES.
Mr. John J. Crawford, of the New York City bar, who
Paid Pinkerton expense incurred prior to September
published
the first draft, with notes and references, and
1st, 1899 .......................................................................
$203.83
along with the English act. This draft was sent to all
Paid Pinkerton expense incurred September 1st, 1899,
to September 1st, 1900.................... ........................... 15,178.55
the Commisssioners on Uniform Laws, and to many of
Salaries and expenses, as per vouchers........................ 4,832.75
the authors and experts on that subject, inviting criti­
Paid Stewart & Co., 1,000 aluminum signs..................
150.00
cisms and suggestions. After receiving such criticisms
Paid United Typewriter & Supplies Company........ .
75.00
and suggestions, the Committee on Commercial Law
62.00
Paid Stumpf & Steurer, 2,000 printed reports............
Petty cash .........................................................................
20.00' •went over the act now entitled “ A General Act Relating
Balance September 1st, 1900........................................... 13,418.57
to Negotiable Instruments,” carefully with its author,
and the bill, as so revised, was presented to the Con­
$33,940.70
ference in 1896. The Conference spent several days in
The purpose and policy of the Association in main­ its consideration, making some slight changes in its
taining tjie Protective feature is now generally well un­ phraseology, and recommended the act, as so prepared
derstood, but occasionally the Protective Commitee re­ and perfected, for adoption in the several States.
ceives an urgent call from some banker who feels ag­
The author and some of the revisers of the English
grieved when he learns that we pay no attention to + act have expressed the highest commendation of the
petty swindles, which are successful because of imper­ work of Mr. Crawford, and in no way more so than in
fect vigilance on the part of bank officers. We desire to saying that those features of their act which were recom­
repeat our statement of last year that no protective sys­ mended by the drafters and first revisers, and rejected
tem could be expanded so as to take in the class of cases
by the over-conservative Parliament—such as the aboli­
with which every bank officer should be competent to
tion of the days of grace—had been adopted by Mr.
deal.
Crawford.
The committee again acknowledges the valuable as­
The production of a single mind, however learned
sistance rendered by individual members of the Associa­ and skillful, may well be regarded with distrust; but
tion.
the product of scores of lawyers of Great Britain, best
We append the report of the Pinkerton National De­ qualified to know the law on the subject, tested by four­
tective Agency, which is distributed among the mem­ teen years of successful experience, and revised by Com­
bers in printed form, and will follow this report in the
missioners from thirty States in this country, aided by
proceedings of the Convention.
the experts who have written on the topic, may surely
Respectfully submitted
inspire the confidence that the work is thoroughly done.
P rotective C ommittee ,
Then, too, while the bill is simple and intelligible In
American Bankers’ Association.
its expression, great care is taken to preserve the use
The President: The next is the report of the Commit­ of words which have had repeated legal constructions
tee on Uniform Laws, by the chairman, Mr. Frank W.
and become recognized terms in the Law Merchant.
Tracy, of the First National Bank of Springfield, 111.
The reception of the act will be a fair test of the
interesting question as to how far the Legislatures will
R ep o rt o f t h e C o m m itte e on U n ifo r m L a w s.
adopt the work of the Commissioners. Its importance
in this point of view may justify some additional re­
Senator Manderson recently delivered an address
which was a comprehensive review of many legal, legis­ marks upon it. A more useful or more thoroughly pre­
pared statute on commercial law would be difficult to
lative and political questions. He laid much emphasis
upon the necessity of uniformity of law in the different find. All the fundamental principles and essential dif­
ferences of the law on commercial paper, the law, in
States. He called attention to the fact that in the year
short, of some ten thousand reported cases, is, in sub­
1899 there were enacted four thousand eight hundred
and thirty-four general, and nine thousand three hundred stance, condensed into thirty-six pages. The disputed
points and variant laws, whose discussion occupies
and twenty-five special or private laws in the United
States alone. Thousands of bills for laws were intro­ so large a share of two and three volumed treatises on
duced which were not enacted. In such profuse legisla­ the subject, are decided and harmonized. This decision
and harmony is not the dictum or opinion of one man, or
tion is there any wonder, that there should be a cry set
up for a halt, and that more attention be given to codi­ one body of men, or one State or one country. The
English bill, originally drafted by Judge Chalmers,
fying the laws of the different States so as to promote
passed by the committees of both Houses of Pariament,
uniformity?
In some things uniformity is absolutely essential, and adopted by its self-governing colonies, has had the test
of fourteen years’ experience, and the testimony is all
Mr. Manderson gives a partial enumeration as follows:
one
way as to its efficiency.
We cannot overestimate the importance of uniform laws
In our last report we gave the progress in the differ­
upon matters incident to commercial law, such as acts relating
to negotiable instruments and bills of exchange concerning days
ent States at that time. But few of the State Legisla­
of grace and the collection of debts. If the laws relating to
tures were in session last winter. In only two of them
deeds, vs ils and descent were alike the country over, the best
was the bill introduced—in Ohio and Georgia. In Ohio
legislative surviving, how much of needless, expensive and
the bill has been favorably considered by the committee,
troublesome litigation ÿould be saved. It has been truly said
but the session was not long enough to get it through.
“ likèmindedness is the cause of all social stability.” The insta­
bility of the relation of marriage, the frauds perpetrated upon
It is thought the next session will surely pass it. In
non-resident defendants and upon the courts, the destruction of
Georgia we had hoped to get it through, but time did
domestic happiness and the misery to children incident to the
not permit.
present diversity of divorce laws in the States need not be di­
The Commission to revise and codify the laws of the
lated upon. A uniform divorce law would help to maintain
and sanctify th at safeguard of American life—the home.
Territory of Arizona have adopted as part of the code
The American Bar Association has given particular at­ of Arizona the Negotiable Instrument law, and propose
to pass it through the Legislature the coming winter.
tention to the Uniform Law for Negotiable Instruments
There is quite a movement among the different States,
for the last three years to the exclusion of everything
else; deeming it the most important. There are Com­ as indicated by our correspondence, for the enactment
missioners in thirty-two States, which we give at the end of the law this winter.
The great majority of States will hold sessions of
of this report so that our State Bankers’ Associations
their Legislature, when we hope to make rapid progress
may co-operate with them in their different States.
RECEIPTS.

Balance on hand September 1, 1899............................... $8,940.70
Appropriated by Executive Council........ ........................ 25,000.00




64

BA N KERS’

C O N V E N T IO N .

with the law. We urge upon the bankers in those States
to see to it that the legislators are fully educated as to
the bill. There will be no trouble in getting it enacted
into law if a necessity is shown for it. That a necessity
exists every attorney, every banker and business man
can attest, especially those who engage in interstate
commerce. This codified law has been already enacted
in fifteen States and the District of Columbia. Every
State of the Union should adopt it, and then the status
of our credit currency may be understood in every State.
We do not wish to pass another winter without the addi­
tion of several States to our list, and therefore we urge
and reiterate the urgency that every banker make it his
business to see that it becomes the law in his State.
The following States have passed the law with the
amendments noted and the date when it became ef­
fective:
Connecticut, April 5, 1897; Colorado, July 19, 1897. (Notes
falling due Saturday are payable the same day, except
those falling due in Denver on any Saturday during June,
July and August, when they are payable on Monday.
Florida, August 3, 1897 ; New York, October 1, 1897 ; Massa­
chusetts, January 1, 1898. (Sight drafts are allowed
three days’ grace.)
Maryland, June 1, 1898; Virginia, July 1, 1898; North Caro­
lina, March 8, 1898. (Three days’ grace on notes, ac­
ceptances and sight drafts.)
District of Columbia, April 3, 1899; Wisconsin, May 15, 1899 ;
Tennessee, May 19, 1899; Washington, June 7, 1899;
Utah, July 1, 1899; Rhode Island, July 1, 1899 (three
days’ grace on sight drafts) ; North Dakota, July 1, 1899.

The Legislatures of the following States, in which
the bill is not a law, will be in session this winter:
Alabama,
Arkansas,
California,
Missouri,
Illinois,
Indiana,

Kansas,
Maine,
Delaware,
W. Virginia,
Nebraska,
Nevada,

New Hampshire,
Vermont,
Minnesota,
Idaho,
S. Carolina,
South Dakota.

Texas,
Michigan,
Pennsylvania,
Montana,
Wyoming

We also give the names of the Commissioners repre­
senting the American Bar Association in these same
States:
California.—E. J. Emmons, Bakersfield; Geo. H. Smith, Log An­
geles ; David L. Withington, San Diego.
Delaware.—Geo. V. Massey, Dover.
Georgia.—Peter W. Meldrim, Savannah; Walter B. Hill, Macon.
Illinois.—Jno. C. Richberg, 605 Opera House Building, Chicago;
Arthur A. Leeper, Virginia, Cass Co.; E. B urritt Smith,
415 First National Bank Building, Chicago.
Iowa.—Emlin McClain, Iowa C ity ; L. G. Kinne, Des Moines;
H. O. Weaver, Wapello.
Kansas.—T. D. Thacher, Lawrence; R. A. Sanky, W ichita; J. W.
Fitzgerald, St. Mary’s ; J. O. Wilson, Salina; Jno. D. Milliken, W ichita; Thos. D. Wall, Wichita.
Kentucky.—W. C. P. Breckenridge, Lexington; Lewis N. Dembitz, Louisville; Jno. Marshall, Louisville.
Maine.—Chas. F. Libby, 57 Exchange Building, P o rtlan d ; Frank
M. Higgins, Limerick; Hannibal E. Hamlin, Ellsworth.
Michigan.—C. W. Casgrain, D etroit; S. M. Coutcheon, D etro it;
Thos. J. O’Brien, Grand Rapids.
Minnesota.—Chas. E. Flandrau, St. P a u l; W. S. Pattee, Minne­
apolis ; W. W. Billson, D u luth; C. E. Chapman, Fergus
Falls.
Mississippi.—R. H. Thompson, Jackson ; S. S. Calhoun, Jackson ;
W. V. Sullivan, Oxford.
Montana.—J. B,. Clayberg, H elena; T. C. Marshall, Missoula; J.
W. Strevell, Miles City.
Nebraska.—J. M. Wool worth, Omaha.
New Hampshire.—J. L. Spring, Lebanon; Jos. W. Fellows, Man­
chester ; H. E. Bernham, Manchester.
New Jersey.—J. Franklin Fort, Newark; Jos. D. Bedlie, Jersey
C ity; Frank Bergen, Elizabeth.
Ohio.—Aquilla Wiley, Wooster; W. L. Parmenter, Lima; Frank
P. Ritcher, Hamilton.
'Oklahoma.—John J. Dillie, El Reno; C. K. Brooke, Guthrie.
South Carolina.—H. E. Young, 28 Broad Street, Charleston; W.
R. Boyd, Darlington.
South Dakota.—A. B. Kittridge, Sioux F a lls; L. B. French,
Y ankton; J. W. Wright, Clark.
Wyoming.—C. E. Blydenburgh, R awlins; J. C. Hamm, Evans­
ton ; M. L. Blake, Sheridan.

We would suggest that the bankers confer with these
gentlemen in their several States as to the best methods
o f promoting the passage of the bill.
Respectfully submitted,
F r a n k W. T racy , Chairman.




Mr. R. D. Kent, of New York: I move it be received
and filed.
The President: All in favor of the motion say aye;
opposed, no. It is carried.
Mr. J. B. Finley, of Monongahela, Pa.: I merely want
to add that the committee be continued. (Seconded.)
The President: Mr. Finley moves that the Commit­
tee on Uniform Laws be continued, and he has a second.
All in favor of that motion will please say aye; opposed,
no. It is carried. But it is the decision of the chair
that the resolution will have to go before the Executive
Council before it can go into effect.
' The President: The next business in order is the re­
port of the Committee on Bureau of Education, by the
chairman, Mr. Wm. C. Cornwell, President of the City
Bank of Buffalo.
R eport of C o m m ittee on E du cation .

Your committee begs to report that it has taken up
carefully the subject of an Institute for Bank Clerks,
that it finds the project entirely feasible, and presents
herewith the data on the subject obtained by the com­
mittee.
THE NEED OF AND DESIRE FOR AN EDUCATION ON THE
PART OF BANK CLERKS.

As never before there is required in every branch of
business the most thorough training, scientific and tech­
nical, for the attainment of success under the intense
competition that prevails.
In no business is this truer perhaps than in the busi­
ness of banking in this country, a country which is
reaching out through its tremendous export increase for
the business of the world.
There is abundant evidence that the young men who
are doing the clerical work in banks in the United States
are anxious to avail themselves of any and all knowl­
edge and training which will help them to do their work
better and more intelligently.
There is no way provided by which this can be done.
One of the leading banking journals the other day
received the following letter from a clerk in one of our
large Southern banks:
T h e E d itor .

Dear S ir:—Judging from the interest you take in Banking
Education and the space you devote to same, I thought, perhaps,
you would help me in my desire to obtain a more thorough
knowledge of the many questions appertaining to my profession.
It is my endeavor to get an insight into the many financial
questions, the mastery of which is so essential to a successful
career.
My position is such th a t I am unable to take one of the
courses th at have been established in some of our universities,
but desire to take advantage of any opportunity within my reach
which will better fit me for my life work.
Is the Educational Committee of the American Bankers’ As­
sociation doing any missionary work in this direction? Would
an application to the Committee be productive of beneficial re­
sults ?
Any in fo rm a tio n you can give me in re g a rd to th is m a tte r
w ill be g re a tly ap p reciated .

Trusting th at I may be favored with a reply, I remain.

This committee has already reported the receipt of a
petition signed by a large number of bank clerks in two
principal cities, asking the committee to take up the mat­
ter of the formation of a Bankers’ Institute similar to
the one in England.
»
A year ago some of the bankers in Minneapolis wrote
to the Committee asking to be informed whether the
Association was ready to act, but not hearing from us
definitely, the Minneapolis Bank Clerks’ Association was
formed, and in the spring of this year the Committee re­
ceived the following letter:
Co m m it t e e

on

E ducation , E tc .

Gentlemen:—The writer had some correspondence with you
in December about an Institute for Bankers, which you were,
planning to organize in this country. I thought it might be of
interest to you to know th a t the Banks Clerks of Minneapolis
formed an organization primarily for educational purposes, and
have held one meeting a week since the first of January to and
including April 14th, at which meetings we took a course of

B A N K IN G
(lectures an Commercial Paper, given by a professor in the Law
Department in the University of Minnesota. At our meeting
•on April 14th the Bank Clerks took a written examination on the
subject, and I enclose herewith one of the examination papers.
We will close our year’s work with a banquet a t which mem­
bers of the Clearing House Banks, together with the Bank Clerks
of the city will meet. The principal address of the evening
will be deliverd by Professor Laughlin, of the University of Chi­
cago, on “ Three Decades of Financial Legislation.”
The Bank Clerks have taken great interest in the organiza. tion, and will continue it next year, taking a course of lectures
either on contracts or agency, together with political economy.
We have planned to begin our work next year in October and
carry it through to May. Yours truly,
[Signed.]
J o s e p h C h a pm a n , J r .,
Pres’t Minneapolis Bank Clerks’ Ass’n.

The examination paper appears in the appendix to
this report. The Committee have recently received the
following letter relative to the work now to be under­
taken by the Minneapolis Association:
We have planned a course of lectures for the coming season,
to be given by W. W. Folwell, of the State University, on Polit­
ical Economy. The course will cover twenty lectures, special
emphasis being laid on the branches of political economy th at
relate to banks and banking. It is not our intention now to
have an examination on this subject. Our educational work
will commence the 1st of October and we plan to carry same
on until the end of April. Once a month we will have what
we call an open meeting. At these we will be addressed by
prominent business men of this city and elsewhere, who have
made a success in their own line of business. For example, we
will have a talk on railroads, one on the wheat business, one
on lumber, and we plan to have an evening devoted to the sub­
ject, “ Theory of Life Insurance,” explaining how the premiums
are arrived at and showing whether or not life insurance is a
good investment for a young man to make. We will also have
an evening devoted to stocks and bonds.
We have tried to plan our course so th a t it will interest and
benefit every man in the bank, whether he is an officer or junior
clerk.
Thanking you for your interest in our association, I remain,
Yours truly,
[Signed.]
J o s e p h C hapm a .n , J r .,
President.

Your Committee in the early part of the year re­
quested Mr. A. O. Kittredge, of the Account, Audit &
Assurance Co., Ltd., New York, to take up the matter
carefully and prepare suggestions on the subject , of a
“ Bank Clerks’ Association” for the whole country. The
report of Mr. Kittredge will be found in the appendix.
The Committee has also obtained from some of the
banks suggestions as to the practical subjects to be taken
up. In the Seaboard National Bank of New York there
is an actual yearly course with examinations, which the
bank has had in operation for a year or two. A copy
of this appears in the appendix to this report. It is re­
markably practical in character.
In another bank the following was sent to each of the
various departments of the bank, viz.: The Foreign Ex­
change Department, the Loan and Collection Depart­
ment, the Tellers’ Department, the Department of Indi­
vidual and General Books, and the Bond Department:
I t is proposed to organize an Institute for Bank Clerks by
means of which certain study can be taken up by the employees
outside of their regular duties, of such subjects as will be of
value to them in their business.
In your department what would you suggest as things it
would be valuable for a Bank Clerk to know?

The answers received will be found in the appendix.
They show a lively interest in the subject.
There is no question that the formation of a chain of
Bank Clerks’ Associations throughout the United States
is perfectly feasible, and that, conducted on proper lines,
it will do a vast amount of good, that after the first year
or so it can be made entirely self-supporting, and that,
if it is not done by some such body as The American
Bankers’ Association, the work will go on as in Minne­
apolis, spontaneously, but in spots, and no such general
and immediate good results can be obtained as by com­
plete organization.
To properly organize such an institution would neces­
sitate the employment of a man of first-class abilities,
who could devote his entire time to the work as Secre­
tary of the Committee. His first undertaking would be




S E C T IO N .

65

to frame a simple course of practical study to be under­
taken by the bank clerks during the coming winter. This
he would do by correspondence with practical bankers
and educators. The next step would be the actual
formation of associations in the leading cities. This
would be preceded by sending out to all the banks
pamphlets for distribution among their clerks outlining
the plan and course of study, etc.
In a given city at a certain time and in co-operation
with the bank officers of that city a meeting of the clerks
would be called, at which the Committee’s Secretary
would be present, and the organization in that city per­
fected, officers elected and plan adopted.
The plan would include monthly meetings of the Asso­
ciation of that city at which the various subjects under
study would be discussed, papers read, debates carried
on, or lectures delivered from time to time by local or
outside talent. At the end of the season in the spring
examinations would be held, and certificates of pro­
ficiency delivered to those members entitled to them.
The course of study would be of the most practical
character connected with every-day transactions of bank­
ing business and for the first year would be essentially
primary. The course could end, if so decided, by a ban­
quet tendered by the local bankers to the associated
clerks.
Aside from every other consideration, the fraternal
feeling which would be fostered among the clerks and
the spirit and devotion engendered between employed
and their employers should be of great advantage in
carrying on business.
Here then is a work of the most practical character
squarely in line with the aims of The American Bank­
ers Association, entirely feasible, involving no large out­
lay of money, and calculated, if successfully conducted,
to do an amount of good which cannot be measured and
which will influence favorably the lives and fortunes of
hundreds of young men who are growing up in our
banks. They, themselves, have appealed to you through
your committee for encouragement and guidance. It is
a cry out of Macedonia—will this great Association with
its ample means and its vast influence take up this work
which means so much for the future success of the bank
clerks of this country, means so much for improvement
in the work of that splendid staff of young men on whom
we rely for the safe, honest and successful conduct of
our business ?
These are the men behind the guns. Will you train
them as they ask, so that their work may be doubly
effective ? Or will you neglect them, abandon them to
their own efforts and let the service drift along half
disciplined and yourselves take the consequences of con­
tinuing to conduct your campaign with an untrained
army ?
REGULAR WORK OF THE COMMITTEE.

Your committee begs to report that during the year
the question of preparing new literature was taken up
and it was decided, as there were still about 700 banks
unsupplied, who had applied for the pamphlet “ What
is a Bank ? ” which the committee had first published,
that a new edition should be ordered. Of these 82,000
have already been sent out, and there are still some or­
ders coming in. The fact that the banks have volun­
tarily kept up this distribution leads us to believe that
the usefulness of the first pamphlet has not yet passed
by. In several Instances requests for quotation of price
for printing the pamphlets in German, Italian and Span­
ish have been made. Some of the banks have offered to
pay the cost of the work, and in such instances the offer
has been accepted and the amounts received credited.
The Committee has also taken up with several of the
presidents of our large universities the question of intro­
ducing courses of study needed by bankers and com­
mercial men, and it is most gratifying to find that the
leading educators of the country are deeply interested
in the suggestions made to them covering this advanced

66

BA N KERS’

C O N V E N T IO N .

step. This is evidenced by the introduction of such
courses in several of our larger universities.
W illiam 0. Cornwell ,
R obert J. L owry,
H arvey J. H ollister ,
J. B. F in ley ,
George F . Orde ,

Committee.
Mr. Wm. C. Cornwell: Mr. Chairman and Members of
the Bankers’ Association and Ladies: The report of this
Committee has been embodied in a pamphlet and a copy
placed upon each seat in this house. I ask your indul­
gence to take that paper, because I am not going to read
the report, but 1 may occasionally want to refer to
something in that pamphlet; so, if you will take it up,
we will facilitate business. You have it all before you,
and 1 am not going this morning into the details of the
work of the Committee; but I want to refer (although
this is not a sermon) to a text which you will find on
page 4 of this report at the top. This is the text: “ There
is abundant evidence that the young men who are doing
the clerical work in banks in the United States are anx­
ious to avail themselves of any and all knowledge and
training which will help them to do their work better
and more intelligently.” That is the text, on the
strength of which this Committee has investigated this
subject of an Institute of Bank Clerks, and we find that
the matter is, first of all, perfectly practicable; second,
feasible, and, third, inexpensive. We find, further, that
the bank clerks of the United States, or a great many of
them, are desirous of having something of this kind done.
We got this in the form of letters and petitions and let­
ters to the newspapers. And I want to call your atten­
tion to a letter on this same page, written by a young
man to one of our leading financial papers, which voices,
it appears to us, the feeling among the better class of
bank clerks in the United States. This is one of the things
he says: “ It is my endeavor to get an insight into the
many financial questions, the mastery of which is so es­
sential to a successful career. My position is such that
I am unable to take one of the courses that have been
established in some of our universities, but desire to take
advantage of any opportunity within my reach which
will better fit me for my life work.” Now, is not that an
appeal which we, if we can, ought to pay some atten­
tion to? If it is not, then I would like to know what a
great association of this kind, of bankers, is for ? He goes
on and asks if the Educational Committee of the Ameri­
can Bankers’ Association is doing any missionary work
in this direction; whether he can get any good from an
application to them. Now, I say, we have had petitions
from hundreds of clerks asking for the establishment of
an Institute of Banking. A year ago some bankers in
Minneapolis wrote the committee to find out what they
were doing; and found they were doing nothing very defi­
nite. So the bank clerks and bankers of Minneapolis
went to work and established a Bank Clerks’ Association
of their own. All last winter they were carrying on the
work with weekly meetings, and studying practical sub­
jects, that helped every bank clerk in Minneapolis to do
his day’s work—not theoretical subjects that he might
use afterward, but the things that helped him in daily
operation. We have had a letter from them lately stat­
ing what their course is to be this year. You will find
that on page 5, and I wish you would read it when you
get home. Now, there is another system of study in op­
eration in one of the banks of this country, in which
we have become very much interested because of its
practical character, that is in the Seaboard National
Bank, of New York. If you will turn to page 23 you will
find 65 questions which constitute a part of the examina­
tion course of the Seaboard National Bank of New York,
which are, to my mind, the most practical set of ques­
tions that I have ever seen put together; and I will wager
that there are many of us who, off-hand, could not an­
swer those questions. But the clerks in the Seaboard
National Bank are required to make a study of these




matters, and their progress in promotion depends some­
what upon the proficiency that they manifest in this
examination. Now, 1 want to interrupt this report and
call upon Mr. Thompson, of the Seaboard Bank, to tell*
you how that thing operates in that bank, because I am
here to-day to get this Convention to inaugurate some­
thing of this kind all over the United States; and I
don’t want it to be a theoretical thing. I want you to know
what the thing is in practice; and, if Mr. Thompson will
kindly stand up and tell us something about that (I
think the chairman will allow it) I will be very much
obliged to him, as a part of my report.
John F. Thompson, of New York: Mr. Chairman, if
you will read those questions that Mr. Cornwell has re­
ferred to, you will note that they are primary, very ele­
mentary. They were adopted in our bank simply as a
beginning, with the hope that the clerks would become
better posted in banking knowledge, and would study on
broader lines. We had found, as all of you bankers, a
very great difficulty to obtain men of breadth of mind
and character who were able to fill the exact positions.
We had some of the brightest young men that you could
find anywhere. We wanted these young men to do the
work, carry on the business of the bank, and let the of­
ficers draw the salary. We tried to find some method
which would broaden and develop them. After a great
deal of thought these questions were prepared by the
heads of departments, by the managing clerks and by
the officers. As I have said, they are very elementary.
They are mixed up in a sort of general hodge podge; but
the result has been that they have benefited them great­
ly. I venture to say that there are very few of us who
will attempt to answer them. I should hate to very
much myself, when I, to a certain extent, am responsible
for them. The general law which maintains in the
whole world, that is the survival of the fittest, will here­
after maintain in banks. The man most able to do the
work with the best executive ability, will receive the
proportion of the legacy incurred. The result has been
that these bright and energetic young men have gone
to studying. They are coming to us daily and saying,
“ What shall we read ? ” We want not only to answer
these questions, but we want broader fields. “ What
should we read?” Another point that will interest you
gentlemen particularly, is, that it has made the tasks
of the officers of our bank very much easier. We now
know we have men who are (¡hinking and who are
studying. . I might say we shall not stop with this ele­
mentary examination, but will carry it on to something
higher.
Mr. William C. Cornwell: I asked Mr. Thompson to
talk on this subject, to give us an illustration as to what
might be done not only by one bank but by all the banks
in the United States if there was an institute of bank
clerks which conducted a course of study and examina­
tion somewhat similar and thoroughly practical, as this
in the Seaboard Bank. This thing is perfectly feasible.
The Association Committee, or some committee ap­
pointed by it, would employ a secretary of first-class
ability, and that man would formulate, in conjunction
with others, a plan of study for the winter. He would:
then send out to all banks, for distribution among the
clerks a prospectus of the plan, and then travel from
City to city, and in conjunction with the banks would
call together the bank clerks and organize and elect of­
ficers for a branch in that city, and start work; have
monthly meetings among themselves. At the end of the
season an examination would be held, and the clerks
who were proficient would receive a certificate from the
institute. That certificate would have a money value,
as indicating the character and the mind of the man pos­
sessing it; and it would be of benefit to him in earning
promotion. Now the amount of expense for getting this
thing in operation for one year would be slight com­
paratively; and once in operation the thing would run
itself. I have here a set of by-laws and everything pre­
pared for a National Institute of Bank Clerks; and after

B A N K IN G
these chapters were formed, at the end of the season
they would elect delegates to a central convention, and
at that convention they would elect a National Secretary,
a President and Treasurer, and also a Council of ten or
fifteen, which would govern the Association. The clerks
would pay dues, a part of which would go to the local
branch, and a part to the National. Now let us suppose
that one-tenth of all the clerks in the United States
joined associations of this kind. We estimate that there
are 05,000 bank clerks in the United States. If the dues
were $2.00 a year and 6,500 members in the Institute,
this would be $1.00 each for the local branch and for
the National Institute. I feel very certain from the in­
terest taken in the subject that in one year this thing
would be on its own feet and supporting itself. I have
an elaborate plan here, but I do not propose to present
that to-day. I want the Council to take that up, if you
■decide this is something that ought to be done. It seems
to me that this cry from the bank clerks is a cry out
■of Macedonia; and it is for you to decide whether this
Association shall undertake this work which will help
along this great army of young men, upon whom we rely
for our good, honest work, or whether you shall let them
go and take care of themselves, forming associations in
«pots, and struggle along slowly, when you can place
them in one year in a position which will make this In­
stitute a success and a benefit to every bank clerk in
the United States.
RESOLUTION CONCERNING THE FORMATION OF
AN INSTITUTE OF BANK CLERKS.
Mr. J. G. Cannon, of New York: I would like to offer
the following resolution:
•'Resolved, That it is the sense of this convention th a t the
Executive Council shall authorize the Committee on Education
to organize an institute of bank clerks, for bank clerks of the
United States, appropriating such sum as will be necessary to
operate such Institute for the first year, not exceeding ten thou­
sand dollars.”

S E C T IO N .

67

tention, have secured marked concessions, the rates now
being paid in smaller cities being actually lower than
those in largo cities on larger lines of insurance.
It may be interesting to note the varying rates which
were paid in the foliowing cities:
Boston *................................................. .$2.50, 3,00, 3.33, 4.00, 5.00
Providence, R. I . . . . ...................................................... ..$4.00,5.00
New York ........................................................$2.50,3.00,4.00,5.00
Nashville, Tenn................................................................... $2.50, 5.00
Chicago .....................................................................$2.50, 3.00, 4.00
Buffalo, N. Y....... .............................................. $2.00,2.25,3.00,5.00
Philadelphia .............................................................$3.00, 3.50, 4.00
Toledo, O............................................
$2.00,4.00
Cleveland, O..................................................... $2.00, 3.00, 4.00, 5.00

Lower rates are reported in many places and a num­
ber quote $5.00 per one thousand (1,000) dollars for three
years, or $1.66 per annum.
Our last report, covering six years, showed that the
average loss on bank business had been very small, and
the returns for the year 1899 are even more favorable
than for the six preceding years, and emphasize the fact
that the business of our banks has been decidedly profit­
able to the companies writing it. Undoubtedly, among
the various risks they are covering by Fidelity Bonds in
general, including Court and Probate Bonds, insurance of
State, County and Municipal Officers, Contractors, Saloon
Keepers, etc., it will be found that some classes are de­
cidedly unprofitable; in fact, we are assured that com­
panies of unquestionable standing, prefer writing the
business of our banks, at from 50 to 70 per cent, of the
rates that many of them are paying, to accepting many
other lines of business at materially higher than prevail­
ing rates. We call especial attention to the desirability,
both to our members and to companies, of each class of
business being separated from every other, and made to
provide its own losses, expenses and profits. When this
is done, we feel that our members will, as a rule, pay
less than they are now paying for their insurance, and
the companies still get adequate rates.

Mr. Robert J. Lowry, of Atlanta: I second that mo­
tion.
The President: I will state for the benefit of the
■stenographer that when the gentlemen arise they will
state their bank, where they are from and their position.
Mr. Farson, of Farson, Leach & Co., of Chicago: No
more important work has been done by this Association,
or can be done, than the work outlined by the talented
«chairman of this committee and his colleagues. They are
entitled to the thanks of every member of the Associa­
tion, and I wish to most heartily second the motion made
by Mr. Cannon.
The President: The question is upon the adoption of
Mr. Cannon’s motion. All in favor will say aye; op­
posed, no. It is carried.
The President: The next business is the report of the
Committee on Fidelity Insurance, by its chairman, Mr.
•Caldwell Hardy, president of the Norfolk National Bank,
•of Norfolk, Ya.

FORM OF BOND.

The form of bond reported by your Committee last
year and copyrighted in the name of your Association
for the exclusive benefit of its members, has been
adopted by a very considerable per centage of them, con­
sidering the brief time it has been before them. Many
more propose to adopt it at the next expiration of their
bonds; and yet, we can but feel that if all members ap­
preciated the value of the bond, none would lose time in
adopting it.
All forms heretofore have been ex-parte, drawn by
the Surety Company assuming the risk. It would be ex­
pecting of human nature more than is reasonable, to
suppose that a company drawing its own form should
not look more carefully to its own protection than to
that of the assured. The Association bond is the only
one we know of, in general use, drawn by counsel for
the banks, the ablest we could find. In its preparation,
Surety Company counsel was consulted, as well as repre­
R e p o r t o f t h e C o m m itte e on F id elity I n s u r a n c e .
sentatives from a number of the companies, so that the
obligations of both sides were fairly considered and de­
To the American Bankers’ Association:
Your Committee on Fidelity Insurance begs to report fined, and the instrument freed from technicalities.
Some companies decline to furnish our form and one
that it has continued its work and investigation along the
lines laid out in its last report to the Cleveland Conven­ company will only furnish it at two and one-half times
tion.
its regular rate, and it has been subjected to fierce criti­
KATES.
cisms from various sources antagonistic to it. These
criticisms, however, when carefully weighed, as they
Inquiries were sent to all the members and from the
replies received we find still a great diversity of rates have been by many of our members, and in some cases
T>eing paid, but the general average is materially lower by their attorneys, have brought out only more clearly
than for the year 1898. While many of the banks are . the advantajges of the form, and the result has been its
still paying the same high rates, those who have followed adoption by those who have considered it carefully.
The following letter explains itself:
and profited by the work of this committee have ob­
J uly 20, 1900.
tained concessions on former rates of from twenty-five „ Caldw ell H abdy, Chairman, Norfolk, Ya.
"(25) to fifty (50) per cent. These replies also indicate a gen- Mh.Dear
Sir: I have read very carefully the article of Mr. A. C.
*eral consensus of opinion that rates have been much too
Anderson, a copy of which you so kindly sent us. I feel great
high, and disclose the fact that many banks in large interest in the subject, having had some experience with Fidel­
•cities are paying the higher rates, while those in smaller ity Bonds.
Under the form a t present mostly used, they afford but
•cities and towns, who have given the matter more at­




small, if any, protection.

They insure nothing beyond the pay-

BA N KERS’

68

C O N V E N T IO N .

ment of premium and a most bitter, intricate and costly litiga­
tion, if you be so unfortunate as to attempt to enforce one.
They are most scientifically constructed, being modeled on a
blending of a Pandora box and a chameleon.
I have great faith in the ability of the American Bankers’
Association, but if they succeed in bringing about the issuance
of a plain, honest form of fidelity bond, one th a t will squarely
and honestly fill its purpose, they will accomplish much th at
will add to the safety and security of banking.
Our former cashier defaulted. He was bonded by the
Company in the sum of $10,000.
There could be no ques­
tion raised as to the default, but we were met with various
technical reasons, clauses, constructions, interpretations, etc.,
and finally having had to resort to the courts, we are still with­
out a judgment in the matter. There may be other companies
who deal not as this one does. I hope so, for in this one we see
humanity in a light th a t is calculated to blight what little faith
we may yet have in our fellow man.
I delayed this long in replying, desiring first to read your
last report, so kindly sent me. This I have done with much
pleasure and benefit. The form of bond reported is a fair ob­
ligation on both sides.

For your information we give the following quota­
tions from replies received to our inquiry why the mem­
bers had not yet adopted the Association form of bond:
Member: “ Old form seems to be satisfactory.”
N ote .—-We suggest the party.read the foregoing lette r
C o m m ittee .
Member: “ The companies make out their own forms, which
are satisfactory to us.”

N ote . -They are also evidently satisfactory to the
company.
C o m m ittee .

We get from many of them expressions favoring theadoption by this Association of a similar plan, but the
successful inauguration of it would involve possibly an>
incorporation of some kind. Then officers, and a suita­
ble staff, experienced in such business, would have to be
employed to manage it, and a supervision exercised over
such a bureau, which would require more time than any
member of this committee, or any member of the Asso­
ciation, could probably afford to give it. _ On« State
Bankers’ Association has entered into an agreement with
a Surety Company by which all its members get their
Fidelity insurance written at a moderate and uniform
rate.
Believing as we do, that members who give the ques­
tion proper attention can get our form of bond at a fair
rate from good companies already engaged in this line
of business, we are not yet prepared to recommend a
mutual plan to this Association, but the statistics already
gathered by this Committee would prove of the greatest
value, should the occasion arise making the considera­
tion of such a plan advisable.
The following companies have agreed to write the
Association form:
-Etna Indemnity Company, of Hartford, Conn.
American Bonding & Trust Co., of Baltimore, Md.
City Trust, Safe Deposit & Surety Co., of Philadelphia.
Fidelity Trust & Deposit Co., of Baltimore, Md.
National Surety Co., of New York.
The Pacific Surety Co., of San Francisco, Cal.
United States Fidelity & Guarantee Co., of Baltimore, Md.
Employers’ Liability Assurance Corporation, Limited, of
London, England.

If any of the above companies decline to furnish a
member this form, he will consult his own interest, and
N ote .—Have no doubt company will continue to of­ get further information, by addressing the Secretary of
fer this suggestion, as the party is paying 25 to 33 1-3 the Association on the subject.
Some of the members appear to be under a misap­
per cent, more than he ought to.
Committee .
prehension as to the object of our work, as some of
them inquire as to the rate at which we will furnish
Member: “ We accept the form submitted by our company.”
bonds, and some of them think that they can only get
N ote .—Had this party compared what he got with
the Association form of bond from us.
our Association form, he would have made the selection
We wish to emphasize the fact that we are not in the
instead of allowing the company to do so. C o m m ittee .
insurance business, but have endeavored, at considerable
effort, to place our members in a position to secure their
Fidelity insurance upon satisfactory terms from com­
Member: “ Never spent a moment’s thought about it.”
panies already engaged in the business.
N ote .—It is worth thinking about, notwithstanding.
Any company can obtain from our Secretary au­
Committee .
thority to write our copyrighted form of bond; it only be­
ing necessary for it to write the form for our members
Member: “ For the present, prefer to deal with regular in­
only.
surance companies.”
Our members are carrying over one hundred million
N ote .—This party is under a misapprehension in sup­
dollars
($100,000,000) of Fidelity insurance, and if we
posing we issue bonds, but he can get the Association
can secure for them the placing of this enormous amount
form of bond from a responsible company at considerably
upon a good form of bond, and at a saving of only one
less than he is paying for inferior protection.
dollar per thousand from former rates, they will have
C o m m ittee .
secured better protection and saved $100,000 per annum,
and
your committee will feel gratified to have rendered
Member: “ The company with whom our men are insured do
them this service.
not write it, except at a very high rate.”
Our banks have for years been familiar with the pro­
Member: “ I t has never been offered to us at a price we
tective work of the Association, as carried on by its Pro­
could afford to accept.”
tective Committee, know how efficient that work has
N ote .—The company evidently places a high value
upon the protection afforded by the Association bond, been, and at what infinitesimal cost to each member.
but the parties are already paying for the company’s own The work of this committee has been to safeguard the
millions of Fidelity insurance carried by our members,
form more than others are paying for ours.
by providing a bond drawn solely with this end in view,
Committee .
and the result of its work has been an absolute saving
to many banks, of more than their entire annual dues.
Member: “ Must confess I did not know of it. Did not
We estimate the annual saving to our members, in the
receive your first communication / have since read the report of
premiums paid for fidelity insurance alone, when all of
your committee and think it contains much food for thought.”
N ote .—W e have received m any other replies of sim ­ them shall have fully understood what the Association
is doing for them, will be materially more than enough
ilar purport.
Committee .
to pay the entire running expenses of the Association,
from year to year. But important as the saving of pre­
GENERAL PLANS.
miums is, the most important question to be considered
is, to obtain a protection that protects.
Under this heading your Committee last year alluded
We are convinced that the subject is so important to>
to the English companies who operate on a mutual basis,
this Association, that its consideration should be conand to the possibilities of such a plan for our members.

Member: “ Hare simply renewed old bond at suggestion of
compcmy.”




B A N K IN G
tinued along such lines, and through such channels, as
may be found most effective.
Caldwell H aedy , Norfolk, Va.
President The Norfolk National Bank.
A. C. A nderson, St. Paul, Minn.
Cashier St. Paul National Bank.
W. P. M anley , Sioux City, la.
President Security National Bank.
J ohn L. H amilton , Hoopeston, 111.
Of Hamilton & Cunningham, Bankers.
F. H. F ries , Winston, N. C.
President Wachovia Loan & Trust Co.
Mr. J. G. Brown, of Raleigh, N. C.: I am sure this As­
sociation appreciates the work that has been so care­
fully and so intelligently done by this committee; and I
move that their report be received and spread upon the
minutes, and that the committee be continued. (Sec­
onded.)
The President: All in favor of that motion please say
aye—opposed, no. It is carried.
Mr. Bradford Rhodes, of New York: Mr. Chairman
and Gentlemen of the Convention: I wish to supplement
the resolution offered by Mr. Cannon, of New York, that
the Committee on Education be continued for another
year. This committee has been doing most excellent
work during the past year, and I feel quite sure that it
should be continued one more year to carry out that
most excellent work. I make that motion, that the Con­
vention request the council to continue that committee
for one more year.
Mr. I. E. Knisely, of Toledo, O.: I think there is
nothing in the constitution authorizing the Executive
Council to appoint any committee except two. One is
the Protective Committee and the other is the Advisory
Committee.
I understand all these committees are
creatures of the Convention,' and the Convention can dis­
pose of them or continue them at will; and with that
view I second the motion that the committee be con­
tinued.
Mr. Bradford Rhodes: I accept that.
The President: It is moved and seconded that the
committee be continued for one year. All in favor of
that motion say aye; those opposed, no. It is carried.
The President: The next business in order is the re­
port of the Committee on Express Company Taxation,
by its chairman, Mr. F. WT. Hayes, president of the Pres­
ton National Bank, of Detroit, Mich.
Mr. F. W. Hayes: Mr. President, Ladies and Gentle­
men: I do not suppose the ladies will be much interested
in the subject of Express Company Taxation, but we are
glad you are here to listen to it.
R e p o r t Zof C o m m i t t e e o n E x p r e s s C o m p a n y
T axation .

To the American Bankers’ Association:
Since the War Revenue Tax took effect the bankers
throughout the country have been growing increasing­
ly dissatisfied with what they consider the unfair com­
petition in their exchange business by the various ex­
press companies. These companies have become most
aggressive competitors for that business, and have ad­
vertised all over the United States that they are engaged
in all branches and phases of both domestic and foreign
exchange. The small banks throughout the country,
with capitals of from «$50,000 to .$100,000, which prompt­
ly paid the tax imposed upon them, felt it was a great
injustice to them to allow these powerful companies,
with millions of dollars of capital and tens of thousands
of agencies, to engage in the exchange business without
paying a penny of taxes for the privilege. They do not
complain of the competition, but they are indignant over
such unfair advantages.
Prior to March, 1899, there had been rulings of the
Internal Revenue Department, both by Commissioner
Scott and Commissioner Wilson, that the sale of money
orders, drafts or checks constitute a dealing in ex­
change, and made those engaged in the business sub­
ject to the payment of the special brokers’ tax. But on




S E C T IO N .

6&

March 24 1899, a ruling was made (No. 20936) by which
the express companies were declared to be not subject
to the payment of the tiix, for the technical reason that
they were not engaged in the business of exchange, be­
cause they did not transact this business by means of in­
struments known to the law as “ bills of exchange,” but
merely by means of “ money orders,” which were not
bills of exchange.
The agents of steamship companies had previously
been paying this tax upon similar transactions. They
complained of the ruling which exempted express com­
panies and left them liable, and the Commissioner on
June 20, 1899, suspended the previous rulings affecting
such steamship companies.
Complaints had been so numerous from interior banks
and bankers that three of the large foreign exchange
houses in New York City—namely, Knauth, Nachod &
Kuhne; Ladenburg, Thalmann & Co., and Kountze
Brothers, brought the matter to the attention of the
American Bankers’ Association at its Convention held in
Cleveland. As a result of the action there taken, this
committee was appointed to obtain, if possible, a recon­
sideration of the Commissioner’s ruling, which exempteds
the express companies from the payment of the bankers’
and brokers’ tax imposed by the Revenue Law, and now
submits this report:
Section 2 of the War Revenue Law provides: “ Bro­
kers shall pay fifty dollars. Every person, firm or com­
pany whose business it is to negotiate purchases or sales
of stocks, bonds, exchange, bullion, coined money, bank
notes, promissory notes, or other securities, for them­
selves or others, shall be regarded as a broker.”
The contention of this committee on behalf of theAmerican Bankers’ Association is that every agent of
every express company negotiates, purchases or sells
“ exchange,” “ promissory notes or other securities ” (the
words “ other securities,” in our opinion, being intended
as a general expression to include all kinds of instru­
ments for the negotiation of credits and money trans­
fers).
On October 27th, 1899, the committee personally at­
tended a meeting before the Commissioner in Washing­
ton and delivered to him a letter of that date, a copy of
which is herewith submitted. They also submitted cer­
tain exhibits consisting of circulars issued by the ex­
press companies advertising their business—viz., “ for­
eign remittance cheques,” “ travelers’ cheques ” and;
proof of “ telegraphic and cable transfers of money to»
and from ppints in the United States, Canada and for­
eign countries,” “ purchase of commercial bills of ex­
change,” and of all kinds of property, including “ securi­
ties.” Also exhibits showing the American Express Comr
pany’s advertisement that it “ opens accounts in Parish
and London; ” “ receives deposits at home and abroad; ”
“ issues cheques against deposits; ” “ allows interest otfc
cash deposits of $2,.500 or over; ” “ buys commercial
paper and advances money on securities;.” together with
further exhibits of blank forms used in their various,
lines of business, quoting rates of exchange, etc.
As the result of that meeting the committee was ad­
vised by letter to its counsel, dated October 31, 1899«
(Treasury Decisions, No. 21,709), that the Commissioner
held that the evidence submitted with respect to the
“American Express Company and its agents throughout
the United States is conclusive (if not hereafter over­
thrown) in establishing the special tax liability of this
company and these agents as brokers.”
The Commissioner also held that wherever the Ameri­
can Express Company was engaged in the business o f
buying or selling foreign or domestic bills of exchange
it was subject to- the tax.
Inasmuch, however, as the business of buying and
selling foreign coins or bills of exchange could probably
be confined to a very few agencies, the committee, rep­
resenting the banks, requested the Commissioner to passupon the main question involved in their application—
namely, whether the business of selling the various in­
struments issued by the express companies, such as “ for-

,0

BA N KERS’

■eign remittance cheeks,” “ travelers’ checks,” drafts and
orders, by cable or otherwise, did not make those com­
panies liable to the payment of a banker’s or a broker’s
tax at each and every of its many thousand offices. On
November 3, 1899, the counsel for the committee wrote
to the Commissioner, stating that they had obtained some
additional proof of a very positive character, showing
that the American Express Company was actually en­
gaged in the foreign exchange business, and that they
woidd forward this proof if the Commissioner had not
been fully convinced by the evidence previously submit­
ted, In reply to that letter the Commissioner wrote to
them, on November 10, as follows:
“ In reply to your letter of the 3d instant, you are
hereby informed that on the facts stated by you in your
former letters to this office there appears to be no rea­
sonable ground for doubting th^t the American Express
•Company has been engaged in the business of buying and
selling foreign exchange, and that it is accordingly re­
quired to pay special tax as a broker for each and
•every distinct and separate place of business at which
such purchases and sales have been made.”
Prior to writing this letter, however, and on Novem­
ber 4, 1899, the Commissioner, who had been deluged
with letters of complaints from the banks throughout
the country, had requested the Secretary of the Treas­
ury to obtain the opinion of the Attorney-General on the
■questions involved, including also the “ money order ”
business.
The action of the Commissioner in referring the whole
matter to the Attorney-General, made it necessary for
the committee to appear before that official in Wash­
ington, at which time a brief carefully prepared by Mr.
John A. Garver, of the firm of Shearman & Sterling, New
York, was submitted, a copy of which is herewith at­
tached. This brief contained much of the information
hereinbefore referred to, together with a large addition
of fdrther facts and proofs. At this meeting there were
present attorneys of the several express companies, who
were not prepared to submit briefs, but did make some
oral arguments on the different points. Time was given
by the Attorney-General to the express companies’ at­
torneys to submit briefs, and considerable time was
taken, after which the attorney of the committee pre­
pared and submitted a brief in reply, a copy of which
is herewith submitted. After waiting a very long time
the opinion of the Attorney-General, written by one of
his assistants, was delivered, a copy of which is also
herewith attached, sustaining the contention of the ex­
press companies, and totally disregarding»that of your
commitee.
The committee desire to call the attention of the mem­
bers of the Association to some of the points submitted,
first asking the members to bear in mind the definition
o f the word “ broker” as given in the Revenue Law
above quoted.
Tn a small pamphlet issued by the American Express
•Company, a copy of which is submitted herewith, you
will find on page 1 the following: “ Travelers’ cheques of
the American Express Company are practically certified
•cheques of the company.” “ These cheques are more
available, economical and secure than any other form of
travelers’ credit, and * * * are virtually a universal cur­
rency.” “ Cheques may be purchased at any of the com­
pany’s 7,500 agencies in the United States, * * * also
through many banks and tourist and steamship agen­
cies.” The committee contend that certainly these 7,500
agencies, besides the steamship and tourists’ agencies,
are acting as brokers for the sale of these cheques, and
should each pay the brokers’ tax.
On page 5 of the same pamphlet there is proof not
only that the company’s agents are acting as brokers, but
also as bankers.
Terms of Issue. (Travelers’ Checques.)
Fourth. Against Deposits of Cash. Commission will be pay­
able same as under paragraph Third. Interest will be allowed
■on cash deposits of $2,500 or over.




C O N V E N T IO N .
On page 6 is the following:
Cable transfers of money to and from the United States
and Canada and Europe, or other Foreign Countries, may be
made through any of the Company’s offices.

Also on page (J:
American Express Company draws sight drafts for any
amount payable at all principal points of the commercial
world.

Still the Attorney-General decides that the company
is not engaged in the business of negotiating purchases
or sales of exchange.
On page 7:
The company is prepared to buy or sell foreign money at any
of its agencies in the United States or Canada, as well as at its
London * * * and Bremen office.

Let us ask: Would any sane business man decide, in
the face of such public declaration of its business, that
the company, and all its agents, are not engaged in the
business of negotiating sales or purchases of coined
money or bank notes?
In a folder pamphlet entitled “ Notes and Maps of In­
terest to Travelers and Shippers,” issued by the same
company, a copy of which is attached, many pf the fea­
tures of the business of the company given above are re­
peated, and in addition thereto other declarations are
made, clearly showing not only that the company and its
agents are brokers and liable to such tax, but also that
they are acting as bankers, and should pay the tax on
the $18,000,000 capital stock they advertise.
In that folder we find, first, “American Express Com­
pany, with its incomparable organization * * *
reaching upwards of 30,000 places in the United States
and Canada.” Let us remark parenthetically that there
is presumably an agent in each of these places. If so,
the Government loses $1,500,000 each year through the
favorable decision of the Attorney-General.
We quote next “A *universal currency ’ is the term
often applied to these checks * * * ”
Notwithstanding all the agents of the company are
negotiating sales of this “ universal currency,” the At­
torney-General decides that the company is not liable for
the tax imposed upon all others negotiating “ purchases
or sales of stock, bonds, exchange, bullion, coined money,
bank notes, or other securities for themselves or others.”
We quote again: “ Commercial Bills of Exchange pur­
chased by American Express Company at (here follows
a list of nine principal cities only)—a change in adver­
tisement brought about probably by the Commissioner’s
ruling first alluded to herein—viz.: “ There appears to be
no reasonable ground for doubting that the American
Express Company has been engaged in the business of
buying and selling foreign exchange, and that it is ac­
cordingly required to pay special tax as a broker for each
and every distinct and separate place of business at
which such purchases and sales have been made.”
Let us hope, therefore, that the Government has col­
lected such tax for the nine places named in the adver­
tisement.
On another page will be found the following: “ Col­
lection of Accounts, Bills, Notes, Drafts, etc., made in
any part of the Commercial World by American Ex­
press Company * * * ”
Certainly the collection of notes, drafts, etc., is the
business of a banker, and one which occupies the greater
part of a. bank’s clerical force, and to which they devote
the utmost thought and plan the most complete arrange­
ments. The banks, for the privilege of doing business
as a bank, pay $2 a year on each $1,000 of capital. The
express companies enjoy the same privilege and pay no
revenue tax therefor on their many millions of advertised
capital.
The committee is informed that in Minneapolis and
St. Paul the express companies have gone into the mar­
ket and offered to sell drafts on New York to the job­
bing people at a lower rate than that maintained in those
cities by the banks under Clearing House rules and regu­
lations.
This company indicates by its advertisement that it

B A N K IN G S E C T IO N .
is competing with the Government in distribution of ad­
vertisements previously forwarded by mail by the fol­
lowing paragraph:
To facilitate distribution, a representative of this company
will call upon patrons by appointment to quote rates for the
handling and distribution of their entire issue of advertising
or other matter.

The express companies, as competitors of the Govern­
ment in the issuing of Money Orders, from their own
statement of the business done by them, have taken a
large part of the business from the post office, and in con­
sequence have made serious inroads upon the profits
which the post office would have had had the express
companies not been competitors for the business.
Now as to the Express Money Orders: The contention
of the committee is that they are undeniable promissory
notes. They read: “ This company will (or ‘ agrees to ’)
transmit and pay to the order of *’ a specified sum. This
clearly, is not an order, but a promise to pay, and, there­
fore in the judgment of any reasonable person, comes
within the list of things, the negotiating sales or pur­
chases of which constitutes a broker.
After the rendering of the decision of the AttorneyGeneral the committee made a full report to the Execu­
tive Council, and the Council appropriated a sum of
money for the purpose of testing the validity of such
decision, but it has not been ascertained in what way
such a suit could be brought The express companies,
therefore, having the opinion of the Attorney-General in
their favor—viz.: “ Brokerage is not the business of the
express companies; they are carriers, and the issuing of
money orders and travelers’ checks is a mere incident of
the business of carriers,” are escaping the payment of
the tax. If this be true, does it not follow that all rail­
roads, steamboats or other “ carriers ” can indulge in
any of the same practices without paying taxes for the
privilege ?
The opinion of the Attorney-General’s assistant fails
to reply to many of the points made in the brief submit­
ted on behalf of the Committee, and evades other points;
and it is neither satisfactory nor conclusive on any point.
Its Weakness must appear from what has already been
said, and is obvious to any one familiar with the subject.
It will be difficult, and may be impossible, to carry the
question up to the Supreme Court of the United States.
Unless relief can be obtained in this manner, the ques­
tion remains to be answered, what are you going to do
about it?
All of which is respectfully submitted.
F. W. H a y es , Chairman,
C. R. H a n n a n ,
P er c iv a l K u h n e ,

71

all of our banking transactions are necessarily in coin.
We are unable to ship currency. It is established on
the Pacific Coast that all transactions must be paid in
specie. The result is we find we are compelled to pay
the express companies not less than the rate of $1.75 on
the $1,000, to transfer gold from San Francisco. Dur­
ing the panic of the years succeeding 1892 it became
customary among the people. Many, from good reasons*
lost confidence in the banks and thought it was better
for them to buy express money orders instead of deposit­
ing the money, using the express money order simply as
a certificate of deposit, and holding that until they
needed it, and then turning it into the banks to cash it.
We have suffered from that a great deal. Every little
town in the State upon which the express companies sell
their orders turned their orders back to the larger cit­
ies and have them cashed, sending either through the lo­
cal bank or through the merchants who hold their ac­
counts with the bank. We therefore think that the ef­
forts of the Association should be most earnestly in­
dorsed by bankers of all sections of the United States.
The practical question would seem to be, What are we
going to do aboflt it ? If there is no other method, we
certainly should have such a modification made of the
Revenue Act as will put the express companies upon the
same basis with them. I wish most heartily to second
the resolution that this committee should be continued,
and that its work should be continued and brought be­
fore the House of Representatives, if possible, or at least
some legal efforts to be taken in order that we should
have the just protection that should be given to us.
Mr. J. R. Van Wagenen, of New York: I am heartily
in accord with the motion, and with the importance of
the subject. These express money orders are made to
circulate freely because they are taken freely by the
banks and cashed as exchanges. I speak now with ref­
erence to the smaller towns, as I am not competent to
speak for the larger towns in their various methods, but
the smaller towns constitute a very large feature of this
matter, because they render the circulation of these or­
ders free and popular. It is a matter of fact that in
practice they do not, in the hands of their local agents
in the smaller towns, have any money ready to pay their
own orders, ,and they are returned, and the bankers are
expected to do that, and thereby give them the capital
in business to which they contribute nothing. If the
banks in cashing these money orders would make a
charge, it would in that way call attention to the fact
that the assertion of the express companies is not true
that they are the best form for the transmission of
money. This has nothing to do with this resolution, but
I believe every banker within the sound of my voice will
agree that we can very soon make them unavailable, and
convince the people that the best place to get small
drafts is from the banks.
The President: The question is upon the resolution
to receive the report of the Committee on Express Com­
pany Taxation, and to continue the committee for one
year. All in favor of that will please say aye—those op­
posed, no. It is carried.
The President: The Secretary will now make some an­
nouncements as to the meetings of delegates from
States and Territories to appoint the Nominating Com­
mittee, in accordance with the constitution.
After the announcement of the meetings was made*
the Convention adjourned until Wednesday morning at
10 o’clock.

Committee.
Mr. J. P. Huston, of Marshall, Mo.: Mr. Chairman,
the Bankers’ Association of the State of Missouri is
heartily behind the American Bankers’ Association in
its efforts along this line. Of all the competition that
we have had to deal with the most meddlesome and
pestiferous competition has been that of the express
money order. They give an order and advertise on the
face of it that any bank in the United States will cash
it. The work of this committee has been valuable—
would have been valuable if it had brought forth a vig­
orous protest on the part of the Association against the
express company nuisance, and I believe that in the
hands of the committee definite results will be accom­
plished. I move you that the present committee be con­
tinued for another year.
Mr. P. C. Kauffman, of Tacoma, Wash.: The State
S E C O N D D A Y ’S P R O C E E D IN G S .
Bankers’ Association of Washington this year adopted
Wednesday, October j , igoo.
a resolution which was forwarded to the Secretary of
The President: The Convention will please come ta
this Association, most heartily approving the action of
the American Bankers’ Association in endeavoring to order. We will open the service with prayer by Rev. Dr.
relieve us from the unfair competition from the ex­ W. E. Evans.
PBAYEB.
press companies. The bankers of the State of Wash­
Let us pray. Our Father, who art in Heaven, hallowed bo
ington probably suffer from it more than a good m a n y
Thy nam e; thy Kingdom come, Thy will be done on earth as it
ether sections of the country, from the fact that almost
Is in Heaven ; give us this day our daily bread, forgive us our-




72

BA N KERS’

trespasses as we forgive those who trespass against u s ; lead
us not into temptation, but deliver us from evil, for Thine is
the kingdom, and the power and the glory, forever and ever.
Amen.
Almighty and Everlasting God, we thank Thee th a t during
the past night Thy loving arms were about us, protecting us
from all danger and from harm. And, now, a t the beginning of
this day, we lift up our hearts and voices in praise to Thee for
all Thy goodness, for our creation, for our preservation, for the
means of grace, for the hope of glory, and for Thine inestimable
love as manifested in the gift of Thy blessed Son for us.
We
invoke Thy mercy upon the members of this Convention. Grant,
we beseech Thee, Blessed Lord, to direct them in all their doings
with Thy most gracious fa v o r; th at all their works, begun, con­
tinued and ended, may redound to Thy glory and to the good of
men.
When the members of this Convention shall retire on
their way to their homes, grant them journeying blessings, pro­
tecting them from all dangers of travel and from all evil, th at
they may come to the haven where they would be, with a grate­
ful sense of Thy mercy and with thankfulness in their hearts.
Hear us in this our morning prayer, we beseech Thee. Sanctify
us with Thy grace and pardon all our shortcomings, in the name
of Jesus Christ, our Lord. Amen.

Call of S tates.
The President: The next business is the call of
States. Statements will be limited to five minutes.
ALABAMA. (No response.)
ARIZONA. (No response.)
CALIFORNIA. (No response.)
COLORADO. (No response.)
CONNECTICUT. (No response.)
DELAWARE. (No response.)
DISTRICT OF COLUMBIA. (No response.)
FLORIDA. (No response.)
GEORGIA. (No response.)
IDAHO. (No response.)
ILLINOIS. (No response.)
INDIANA. (No response.)
The President: If the States are present, they will be
expected to report the condition of matters. I would say
that I believe in carrying out the programme regardless
of the people present. I think the States ought to be
■called, and those who are here we will hear from; and, if
the Convention wishes it, we will call the States again.
INDIAN TERRITORY. (No response.)
IOWA.
Mr. Jno. R. Wallace, of Iowa: Our chairman is not pres­
ent. I will go and hunt him up.
KANSAS.
Wm. C. Henrici, Cashier Inter State National Bank, of
Kansas City, Kansas.
Mr. President and Gentlemen: Kansas is justly proud
and grateful that she has for the first time been given repre­
sentation on the Executive Committee of the American Bank­
ers’ Association.
It has not been many years since a Kansan would re­
luctantly reveal his identity when away from home, sneak
in the back door, so to speak; but, since the State has been
“ redeemed ” and the people have shared in the general
prosperity, that same Kansan overlooks no opportunity to
make his presence known, be it on land or in the water or
on top of the Chinese wall, and I may state that his ability
to take to the water is not altogether due to the fact that it
is the only beverage legalized by statutory enactment.
Kansas is largely an agricultural Sate, and probably few
know how productive her 52,000,000 acres are. The crops
of all kinds for 1899 represented a value of $170,000,000, of
which corn was king, with 225,000,000 bushels, valued at
$53,000,000.
But Kansas has other things to be proud of. The value
of live stock owned in 1899 was $133,000,000. Her dairy
and poultry interests represent many millions more, and her
wonderful salt, zinc, lead, coal and other minerals produced
in 1899, grouped by the Geological Survey, as non-metallic
and metallic, were valued at $11,894,576.
The products of her many packing houses go into the re­
mote corners of the world.
Within her borders is one of the largest live stock mar­
kets in the country, where were received, in 1899, 2,017,484
cattle, 2,959,073 hogs, 953,241 sheep, 33,775 horses.
The moral welfare of her 1,500,000 citizens is by no
means neglected, and in order that the coming men may be




C O N V E N T IO N .
equal in intelligence to the “ Wise Men of the East,” 9,344
educational institutions are maintained, besides a State Uni­
versity and a State Normal School.
The prairie schooner is a thing of the past, and in its
place we now have 9,000 miles of railroads (exceeded, per­
haps, by three States), and are up to date on automobiles
and rubber tire vehicles.
To assist in moving the immense crop and foster the dif­
ferent lines of business, about 500 banks are in operation,
with over $61,000,000 on deposit, of which 4,000 are State
banks and the balance National, all showing a big increase
in deposits during the last year. The State banks work
under a banking law administered by an efficient Bank Com­
missioner, to whose efforts it is due that bank failures are
almost unknown in Kansas.
All are in good health now, except that they are suffer­
ing from what the Bank Commissioner calls “ the money
plague.”
The increase in deposits reflects the general growth of
business, and if the croaker and calamity howler affected
not to know it before, he has, by an object lesson, learned
that the law of supply and demand regulates the rates for
money, just as it does the price of commodities, for the
borrower with good collateral has been able to obtain money
in Kansas at rates which were at one time consideered low
in Eastern money markets.
Our State Bankers’ Association is in a flourishing con­
dition. At the convention in June many matters of local
interest were discussed, and an effort was made to have the
Uniform Negotiable Instrument Law brought to the atten­
tion of our Legislature. If a State ticket is elected, which
is not hostile to every cause espoused by bankers, we may be
successful; otherwise we may have to “ wait a time in
patience.”
I might go on indefinitely telling of the greatness and re­
counting the glories of the “ Sunflower State,” but my time
is limited. To those who are in doubt, we extend a cordial
invitation to come and enjoy our hospitality; for, as shown
above, we always have enough to eat, and the latch string
hangs out.
They will also be convinced, to use the language of
another, “ that the half was not told me; thy prosperity exceedeth the fame which I heard.” [Applause.]
KENTUCKY. (No response.)
LOUISIANA. (No response.)
MAINE. (No response.)
MARYLAND. (No response.)
MASSACHUSETTS. (No response.
MICHIGAN.
J. A. S. Yerdier, of Grand Rapids, Mich.: I have lived in
Michigan for thirty-five years, and we have always been
prosperous. Even the hard times have not struck us quite
as hard as, perhaps, some other States. Our farmers are
having good crops this year. Our fruit is simply immense.
It runs into the millions—the amount of peaches that we
are shipping from that State, together with other fruits.
Our manufactories are all busy. Thousands of men are em­
ployed in our furniture factories of the State and other
factories. Of course, Grand Rapids is well known through­
out the country as being the great furniture centure of the
United States. We have a great many furniture concerns
that employ. thousands of men, and the business generally
is good. Their market, you might say, is the world. Great
shipments are made even to Europe, and we are entirely
satisfied with the volume of business this year. [Applause.]
MINNESOTA. (No response.)
MISSISSIPPI.
Mr. Lawrence Foot, of Canton, Miss.: We are an agri­
cultural people almost altogether. We have a kindly people,
and a soil upon which the sun shines warm many months
of the year. Mississippi, to be appreciated, must be seen;
and, if you will come and dwell with us and live under our
vine and fig tree, you will truly think that you are living in
a part of the Promised Land, living with the chosen people
a thousand years ago. [Applause.]
MISSOURI. (No response.)
MONTANA. (No response.)
NEBRASKA. (No response.)
NEW HAMPSHIRE. (No response.)
NEW JERSEY. (No response.)
NEW MEXICO. (No response.)

B A N K IN G
NEW YORK.
Mr. David Cromwell, of White Plains, N. Y .: Mr. Presi­
dent: New York, the great Empire State, is all right. Her
manufacturers are prospering. Her agricultural interests
are prospering. Indeed, every large interest in the State is
doing well. We have a progressive and very useful State Bank­
ers’ Association, divided into groups or divisions of contigu­
ous territory The group meetings are very useful in giv­
ing bankers information in relation to the financial standing
of borrowers in their iocality. It follows, of course, that the
banks are doing well when all other interests prosper. Our
great metropolis, the city of New York, where nearly all of
the bankers of the country have accounts, the great financial
center of our continent, is growing every way, and in no way
faster or more solidly than in our banking interests. New
York bankers are making loans the world over, and are able
to make more. New York, Mr. President, is doing well and
is all right. [Applause.] NORTH CAROLINA.
Thos. H. Battle, of Rocky Mount, N. C.: Mr. President
and Members: As the delegate from the North Carolina
Bankers’ Association, I wish to join in extending a cordial
welcome to our Southland. Our State rejoices as fully as
any in the complete burying by the Spanish War of the last
remnants of the sectional animosity and rancor naturally re­
sulting from the most terrible war known to history. The
old Tarheel State did its full duty in that fearful struggle,
and is now trying to do its full duty to our great union; and
we glory without stint in the unparalleled growth of our
united country, and in the increased respect which our starry
flag commands from the entire world. We will visit the bat­
tle fields this afternoon hand in hand.
I am glad to report that the wave of prosperity has not
entirely kept away from our State. Our ideas, our needs
and our opportunities are smaller than others, but in our own
way we are going ahead, fairly prosperous and contented.
The tobacco growers are somewhat under a cloud, but
the cotton sections are now claiming that cotton is king again.
Our towns are growing, our bank deposits are increasing,
new factories are springing up and a general state of Improve­
ment seems to pervade the entire State.
In common with the other Southern States, we, of course,
labor under some very serious disadvantages that should al­
ways be taken into consideration in comparing reports from
various States. The greatest of these disadvantages is the
enormous drain the payment of war pensions makes each
year upon us of the South; a burden that is entirely right
and proper, of course, but one that makes the growth of the
new South all the more wonderful and miraculous. A short
calculation will show you that each Congressional District
in the South pays a full thousand dollars a day in war pen­
sions to the North and West. Of course, all the States pay
it, but the Northern and Western States get back their share
and ours, too. The Congressional District in which I live, for
instance, composed of seven counties, pays some $340,000 a
year in pensions, which is equal to one-half of the entire
capital and surplus of all the banks in the district. And this
statement is all the more striking from the fact that the dis­
trict includes the State capital and the strong banks there.
The amount of life insurance money also sent North by us
annually will undoubtedly equal the pension drain, and, while
we take pride in the fact that we are actively helping to
create these setupendous trust funds, aggregating a thousand
millions, held by the New York life insurance companies
alone, still we are confronted with the fact that we in North
Carolina are not allowed to borrow a dollar of it.
These matters do not affect our happiness, however, and I
only mention them as matters of interest that make the won­
derful material progress we have made since the war appear
still more wonderful. As we send north each year one-half
of our banking capital for pensions and the other half for
life insurance, you can understand why money is so scarce
with us. While we cannot claim the nativity of the author
of the Declaration of Independence, still you are bound to
concede that old North Carolina is the birthplace of the
author of the interesting Ocala Platform Sub-Treasury
Scheme of printing, which promised once such a royal road
to wealth, but now happily defunct. [Applause.]
NORTH DAKOTA. (No response.)
OHIO.
Jacob Frick, President of the Wayne County National
Bank, of Wooster, Ohio: Mr. President, Members of the As­
sociation and Ladies: The great State of Ohio, which I rep­
resent in this Convention to-day, continues in the business of




S E C T IO N .

7»

creating and furnishing the material out of which we make
Presidents of the United States.
The banking business of Ohio is steadily growing, many
banks having been organized within the past year. Deposit»
have increased and loans have correspondingly increased.
The farmers in our State are prosperous. Stock of all'
kinds, as well as grain, bring good prices. Manufacturing
and agriculture are increasing. All our people who went to
work are employed. Five years ago we could loan to farm­
ers ten thousand dollars where we can’t loan them more than
one thousand dollars to-day, with the rate of interest much
lower.
I come from one of the best agricultural counties in the
State, and have handled their crops for thirty-five years, and
know whereof I speak. Nothing like the prosperity that now
exists was ever seen in Ohio before.
We do not want a change, and McKinley will be elected«
in November. Ohio will give him fifty thousand majority.
I think you are convinced now from these few words that
Ohio is a grand good State to live in anyhow.
This is my first visit to this beautiful city of Richmond,,
and her visitors are, I believe, ready to concede that her farfamed reputation for royal hospitality has surely been well
earned. Thanking you all for your kind attention. [Ap­
plause.]
OKLAHOMA. (No response.)
OREGON. (No response.)
PENNSYLVANIA.
Mr. John W. Taylor, of Pittsburg, P a.: I don’t know
whether there is any other gentleman present from this State..
Our prosperity for the past four years has never been ex­
celled. The iron and steel business, as you all know, has
been very prosperous. The Eastern part of the State has had?
some little troubles in the anthracite region, but I believe it
has been adjusted and working all right now. In the West­
ern part of the State we have a great deal of money. It isalmost as plentiful as silver was in the days of Solomon,
when it was counted as nothing and was as stones in thestreets of Jerusalem. [Applause.)
RHODE ISLAND. (No response.)
SOUTH CAROLINA.
Mr. J. A. Brock, of Anderson, N. C.: The price of cotton
is bringing wealth to our stricken country down there. Weinvite the people of the North down there. We think we
have a fine field for investment, with cheap lands from fifty
cents up to fifty dollars. In South Carolina there is im­
mense progress in manufacturing interests. Cotton factoriesare springing up all through the State everywhere. You
are hardly out of the sound of a cotton mill whistle. I sup­
pose the spindles have increased an hundred fold in the last
five years. Charleston, on the coast, is the only one youmight say that is flush with money. I don’t know what they
mean by keeping it on the coast. There is forty thousand»
dollars locked up in the coffers there. We are not only on the
road to prosperity, but we are yonder in the front. [Ap­
plause.]
SOUTH DAKOTA. (No response.)
TENNESSEE. (No response.)
TEXAS.
Mr. Edwin Chamberlain, of San Antonio, Tex.: Texas isunfortunate to have to report the dreadful disaster which oc­
curred in the city of Galveston, and floods and storms which»
occurred in other sections of the State. The State is so
large that the sections affected represent a very small areas
of the entire State. The general condition of the State is ex­
cellent. Our banks report good collections and large deposits.
The large cotton crop we are raising in the State at the pres­
ent time and the good prices being gotten for it indicate forus a very prosperous fall and winter.
UTAH. (No response.)
VERMONT. (No response.)
VIRGINIA. [Applause.]
Mr. J. P. Lewis, of Martinsville, Va.: I had hoped that
some other delegate more eloquent than I would report forVirginia; but I am here to say that Virginia, in natural re­
sources, is probably the equal of any State in the UnionWhat she needs is progressive men and some money to de­
velop her resources. She is rich in coal, timber and various
natural resources that go to make up wealth; and as toher hospitality, I suppose the events of last night testify to
the gentlemen present. [Applause.]
Virginia is coming to the front. Her vast oyster inter-

74

BA N KERS’

C O N V E N T IO N .

est, when known and exploited, will be a source of vast
wealth. We invite you again, gentlemen. [Applause.]
NORTH CAROLINA.
Wm. A. Blair, of Winston, N. C.: North Carolina might,
perhaps with propriety, join thi3 State in a welcome for you,
and in an expression of appreciation of your visit to the
South land; for, in the early days of Colonial history, the
virgin queen fondly chastened our fair slopes and these, with
the magic, musical and charming name, Virginia.
That name our State, too, bore, until as a married sis­
ter, she changed it on her wedding day with Carolus or
Charles. Long after these F. F. V’s made tobacco a legal
tender by purchasing wives with that weed, which has caught
“ Sabean odors from the spicy shores of Araby the blest,”
the golden leaf was for both States, in common, Richmond
funds, and twist or plug answered every purpose of New
York exchange.
Your geographies, being out of date, perhaps yet tell you
that our great State produces only tar, pitch and turpentine.
But I desire to say that the crop of politicians has not suf­
fered from the drought.
The song of our cotton and woolen mills is echoed from
■every hill top. We are shipping furniture to Grand Rapids,
machinery to England, Germany and Japan, and cattle to
Chicago. Lumber and grain, vegetables and farm products,
are bringing us more money than ever before. The peach
crop was a success, and the liquid extract from it and from
the corn is abundant
Our mining operations are successful, and our banking
institutions flourishing.
It is, indeed, God’s favored land. It is blessed with a
perfect climate and a perfect soil. It teems with mineral
wealth, virgin forests and waters, pure and abundant.
On every band we are greeted by the whir of machinery,
the whistle of engine and the growth of trade, wealth and
power. The more practical and materialistic North is send­
ing us now, not slaves, but capital.
The shackles of toil have fallen from human hands and
we are at work, with the audacity of genius, in fastening
them upon the moving winds, the rushing waters, the tire­
less streams and the electric currents.
By elevating our citizenship, by putting culture and
business before politics, we are gaining in peace what we
lost in war, and we are again taking our place in the front
ranks of the world’s onward march. [Prolonged applause.]
Mr. A. W. Conklin, of New&rk, N. J.: The first thing
I have seen going backwards in these proceedings is go­
ing from Virginia to North Carolina. The backward
march was soon dispelled when we heard those eloquent
words of the delegate from North Carolina. I wish to
include under the letter “ N ” New Jersey for a moment.
The President: We must do this thing in order. I
don’t think you were present when we opened the Con­
vention, and it was understood that we would call
through the States and would call the list again. If
your speech will keep, I would prefer that. [Laughter.]
I see the Vice-President from Virginia. I think he was
out late last night and he couldn’t get here sooner. I see
him here and 1 know he has a speech, and I wish the
Convention to listen to Mr. William R. Trigg.
VIRGINIA.
Mr. William R. Trigg, of Richmond, Va.: Mr. President
and Gentlemen: It would certainly be a great reproach upon
me if I hadn’t been out late last night. I haven’t got a
speech, and I was out last night. There is no doubt about
that at all. I had very good authortiy for being down stairs,
because I was with the Treasurer of the United States and
others, and I thought I had a right there. But what I have
to say is very brief, owing to what other people have done.
It devolves upon me, as filling the honorable position of
Vice-President of the Association for Virginia, to report to
you the condition of banks of this State. It is a duty easy
to perform, for the President of the State Association of
Bankers, Mr. Mann S. Quarles, a gentleman not without
honor in his own country, has presented me with a statement
so full and clear that “ he who runs may read.” To use his
own words, “ From every standpoint the outlook is encourag­
ing to us, both as bankers and as Virginians.”
The compilation furnished, and which is before me, repre­
sents 36 National banks, 10 Trust Companies, 101 State
institutions and private bankers, and this is the summary,
being a comparison of condition as existing January, 1899,
and January, 1900, with the further showing of increase of




circulation by National banks since January, 1899, to date
of report, say May 1st, instant:
REPORT.
Paid up capital, January, 1899................... ......... $11,856,942
Paid up capital, January; 1900.................... • .. 13,177,305
Increase ..................................... ......... . • • • $1,302,363
Surplus and undivided profits, January, 1899.. 6,262,331
Surplus and undivided profits, January, 1900.. 7,065,050
Increase ................................................
Cash and due from banks, January, 1899..........
Cash and due from banks, January, 1900. . . . . .

$802,719
13,684,842
13,880,629

Increase .........................................*.............
Deposits, January, 1899.................................. ••
Deposits, January, 1 9 0 0 . . . . . . . . ..................

$195,787
31,260,594
38,364,019

Increase . . . . . . . ....................................... . • $7,102,425
Loans and discounts, stocks and bonds and
securities, January, 1899.
................... 41,726,649
Loans and discounts, stocks and bonds and
securities, January, 1900.
...........
52,697,020
Increase ....................... . . . . . . . . . . . . . . . . .. $10,970,371
Circulation of 36 National banks, January,
1899 ...... ............................................ .............
2,108,255
Circulation of 36 National banks as of this
d a te ..................... .............. ............
3,245,465
Increase ............................................ .

$1,137,210

Mr. Chairman, the figures I have shown for the whole
State, so big to us, I know very well fall far short of those
of many single institutions repi’esented upon this floor, but,
nevertheless, I give them with pride and satisfaction, for
they mean tireless energy, not surpassed any where by any
people.
Speaking “ financially,” and to you bankers, of resources,
as you understand them, I will state : In the throes of war
we lost the’ “ ninety and nine ” and only “ one ” remained ;
but that one, praise be to God, contained or embodied the
needed germ of them all, courage and self-reliance.
In 1865 the word went out, “ We have lost, ,but we must
not repine, we must take up our lines as they have fallen.”
We have borne more than our share of the burdens ; and, if
it took a foreign war to convince some that we were back
in the Union to stay, a vain search will be made for one of
us who would have been lacking in fealty to the Government
at any time; and so, with good conscience, we worked cease­
lessly to build up our waste places ; and hence these figures,
to repeat, so small to you, so big to us.
I cannot close without welcoming, on behalf of the State,
the Bankers of the whole country to the capital of our State.
[Applause.]
WASHINGTON.
P. C. Kauffman, of Tacoma, Wash.: The people of the
State of Washington, and in fact the entire Pacific North­
west, are rejoicing now over a period of unexampled prosper­
ity. The contrast with the conditions that prevailed four
year ago is remarkable. Then the entire State was strug­
gling in the depths of a commercial and financial slough of
despond from which there seemed no means of extrication.
Business completely paralyzed, the manufactures at a stand­
still, prices of staples in many instances below even the cost
of production ; despair written on every countenance. To-day
all the industries of the State are in a most flourishing con­
dition; crops uniformly heavy, prices good, so that the condi­
tion of the farmer has greatly improved, and he has been en­
abled not only to pay off his mortgage, but also to have a
balance with his banker. The latest statements of the banks
show them to be in a very strong condition. Deposits have
reached high water mark, while the reserve carried averages
fully 45 per cent. The outlook for the future is even bright­
er still, and unless some great disaster should happen the
next decade will show a truly phenomenal development.
The inhabitants of that section to-day are perched upon the
very pinnacle of hope, instead of, as four years ago, plunged
in the depths of despair. The reason of this transition can
be stated in a few words. The most important event in mod­
ern history was the destruction of the Spanish fleet in Ma­
nila Bay, May 1st, 1898, and the consequent establishment of
the United States as one of the first-class sea powers. The
century succeeding the Declaration of Independence has
been pre-eminently emphasized, throughout the world, as that

B A N K IN G
of the great struggle for freedom.
In that century the
Anglo-Saxon race has been predominant, and with the exten­
sion of that influence has followed a most wonderful exten­
sion of modern civilization. In every quarter of the globe
wherever the flag of the Anglo-Saxon has been carried, the
shackles of slavery have been broken, and the ignorance of
barbarism enlightened. Even darkest Africa itself is being
illumined with the electric light of civilization, and it will
not be many years before Cecil Rhodes’ dream of a railroad
from the Cape to Cairo, will be realized. If, then, the nine­
teenth century has been specially marked as the period of the
world’s great struggle for freedom, it may be safely pre­
dicted that the coming century will be known as that of the
great struggle for commerce, with the scene of that conflict
transferred from the Atlantic to the Pacific Ocean. The
Orient, with its teeming myriads just awakening from their
thousand years’ sleep, offers to-day the richest prize ever pre­
sented in the struggle for commercial supremacy, With
scarcely a thought of the United States ever proving a factor
in that contest the great nations of Europe have been for
years partitioning the Oriental trade among themselves, each
one striving to obtain the strongest vantage. When Admiral
Dewey two years ago sailed into the Harbor of Manila and de­
stroyed the Spanish fleet, the ruling nations of the world real­
ized that hereafter the United States of America would be
one of the leading sea powers, and that due allowance and
consideration would have to be made for it. With that de­
cisive victory, the sick man of Europe ceased to be the main
object of consideration for the leading European diplomats.
From henceforth they will care but little for the Sultan of
Turkey or control of Constantinople. The interests of the
nations of the world will hereafter be centered on the sick
man of China, and the United States must take, and will
take, a prominent part in deciding the destiny of that invalid ;
for this is the only great power that looks out upon the
Orient, the theater of future.commercial activity. We do
not want the Philippines for the Philippines alone, but for
China. In this, the new irrepressible conflict that is des­
tined to occur between the Anglo-Saxon and the other races,
the theater of action will be transferred from the Mediter­
ranean and JEgean Seas to the Pacific Ocean and the Yel­
low Sea. It is not simply a question of destiny, duty, Im­
perialism and expansion, but another step in the great mod­
ern struggle among nations that must inevitably result in the
survival of the fittest in the evolution of commercial suprem­
acy.
When the smoke of battle has blown away, and the con­
ditions are made plain to all, the bugaboo of Imperialism
will vanish into thin air, fading away, as the baseless fabric
of a dream, and the people of the United States, awakening
to a full realization of the grandeur of their destiny and the
greatness of their opportunity, will settle down to a develop­
ment of the commerce with the Orient that will ere many
years re-establish our merchant marine, cover the Pacific with
the white winged birds of commerce, and pour into our treas­
uries the riches of Golconda.
The possibilities of trade with the Philippines and the
United States are as yet scarcely capable of estimation.
That we have a rich gem in this new acquisition to the na­
tion’s jewels is unquestioned, but the stone is not yet cut.
Every fresh glimpse of its interior reveals increasing value.
It is a rich agricultural land, bearing prolific yields of hemp,
tobacco, sugar, coffee, rice and so forth, and abounding in
almost inexhaustible tracts of valuable tropical woods. But
a far greater value than even its tropical products are its
rich mineral resources: gold, silver, lead, iron, copper, plati­
num, sulphur and coal. With command of the trade with
the Philippines it will be impossible to hinder the growth of
our trade with China; a trade that is destined to expand to
incalcuable proportions. The most recent census of the Chi­
nese Empire shows it to have a population of not less than
five hundred millions, which is far greater than the food stuffs
produced in China, vast as it is, will sustain.
The Chinese Government, after a most careful examina­
tion, decided that wheat from the United States must sup­
ply that deficiency, and that even at a cost as high as a dollar
and a quarter a bushel and made into flour, it remains the
most economical food in proportion to its nutritive quality
that China can import.
In 1892 the Northern Pacific
Steamship Company inaugurated the line of first-class mod­
ern steamers of about 5,000 tons each between Tacoma,
Wash., and Japanese and Chinese ports.
A great export trade has been built up by this line, tak­
ing out millions of dollars’ worth of American products from
Tacoma and bringing to it, on return trips, a vast amount of
tea, silk, raw and manufactured, sugar, rice, matting and gen­




S E C T IO N .

75

eral Oriental merchandise. The flour shipped goes prin­
cipally to China, each steamer carrying about 1,000 tons»
The export from the port of Tacoma for the year 189i>
amounted to over five million dollars.
Within the past two years the Nippon Yusen Ivaisha, a
Japanese-American line, sailing between Seattle and Japan­
ese ports and operated in conjunction with the Great North­
ern Railroad, has been inaugurated by J. J. Hill, President
of that road, and has already developed a marvelous trade.
In the growth of this commerce lies the future greatness
of the State of Washington and the cities of Puget Sound.
Puget Sound lies 500 miles nearer the Orient than San Fran­
cisco, and in all the coast lying north from the Golden Gate
there is not a harbor so conveniently accessible to deep sea
vessels.
It is not an uncommon thing to see ships sail
through the Sound a hundred and fifty miles from the en­
trance to the Straits to Tacoma or Seattle, and cast anchor
in the placid waters of Commencement of Elliott Bay, with­
out having received any aid from a tug.
Tacoma and
Seattle, the chief ports of Puget Sound, are thousands of
miles nearer to Yokahoma or Hong Kong than London, Liv­
erpool or Hamburg.
Australia and all Oceanica lie closer to Puget Sound than
to England. The vast territory of Northern Asia, fast devel­
oping into a new commercial Empire, opens its doors at
Vladivistock and Port Arthur, which are thousands of miles
nearer to Puget Sound than to any European port.
The pathway from the Occident to the Orient leads
through to the gateway of Puget Sound. It is but a trail
now—like the meager rut in the sands of the Western plains
of America made by the wabbling wheels of the **Prairie
Schooner ” in 1849, but it is destined to become the grand­
est highway of the seas. The greatest portion of the human
race lies at one end of it, the most advanced civilization and
commercial progress at the other. The intercourse and ex­
changes between these two will exceed those of any other sec­
tion of the globe, and the “ Westward Star of Empire” will
forever rest in the zenith of Puget Sound, the mart of untold
millions across the Pacific.
WEST VIRGINIA.
Mr. E. M. Gilkerson, of Parkersburg, W. Va.: Mr. Chair­
man and Gentlemen of the Association: Speaking for West
Virginia, I have to say in the first place that we take just
pride in our ancestry, and we are proud to speak of this old
Commonwealth, Virginia, as our mother. We are proud of
our beautiful women, our sturdy, aggressive, progressive cit­
izenship, our majestic mountains and beautiful mountain
streams. We might if time permitted discuss the birds and
the flowers, but this is a practical age, an epoch of commer­
cialism. In the States further South, cotton is known a»
king, but, as our revenues are so varied, we find ourselves
unable to designate the king. With an area of nearly 400
square miles we venture the assertion that nowhere in all
the world can be found a like territory that will compare with
ours in its great wealth of coal.
West Virginia, if I mistake not, stands second as a coal
producer, and is in the forefront with the great timber dis­
tricts of the country; and, if not first in petroleum, it is
certainly second, and oil is not found in any State of supe­
rior quality. To give you some faint glimpse as to our de­
velopment along this line, I nave to mention a fact that only
two weeks ago the South Pen Oil Co., in what was termed
wildcat territory, in the County of Lewis, sunk a well that
has produced at the rate of 8,000 barrels of oil a day. So
great a find was this, the tankage to meet the demands could
not be had; and, as strange as it may sound, one of the
tributaries of the Little Kanawha was actually dammed in
order to save thousands of barrels of oil that would have
otherwise gone to waste.
We have our cattle upon a thousand hills, and the bleat­
ing of the lamb is everywhere in evidence. Our agricul­
tural interests are by no means of secondary consideration.
But I have not time to dwell longer here. No State in the
Union can boast of more stable banking institutions. I
cannot call to mind a single bank failure, save only the
Montgomery Banking & Trust Co., of Fayette County.
Whilst they have closed their doors, I am advised that they
will pay out. This institution was a very insignificant
affair, and hardly arose to the dignity of a bank. In the
past decade our banks have quadrupled their deposits, not
a few having jumped from one and two hundred thousand
dollars to one million and a quarter. Our population in the
same length of time has nearly doubled itself. Your atten­
tion is also directed to our natural gas holdings, and our
brethren from the Central West, Indiana for instance, are ad-

16

BA N KERS’

C O N V E N T IO N .

vised that we have entered the list as a competitor of theirs,
-and offer the manuacturers of the country an abundance of
this cheap fuel; and well they understand when the oil gives
-out (no find is long lived) that they have within our confines
inexhaustible coal fields which argue the continuation of
their plants ad infinitum. In conclusion, let me say that
■we are a happy and prosperous people, not lacking in hos­
pitality, and we extend to you all a cordial invitation to
visit us, and we will do what we can to make your stay pleas­
ant and profitable.
WISCONSIN. (No response.)
WYOMING. (No response.)
The President: I see on the floor ex-President Hen"drix, and I wish he would take a seat on the platform—
Mr. Joseph C. Hendrix, ex-President of the American
Bankers’ Association. [Applause.] [Calls of “ Hen«drix,” “ Hendrix.”]
Mr. Joseph C. Hendrix: Mr. President, Ladies and
'Gentlemen: This is a most unexpected disturbance of a
beautiful day dream; and, as I am summoned before
you, I feel very much like a gentleman who came in
from the suburbs of London, where I was last summer
•«during the session of the Bankers’ Association at Cleve­
land. The only good thing I got out of London was this
-story: He came from the suburbs, and attended a ban­
quet something like Richmond provided for us last night.
He drank so much Mountain Dew, which was provided
on that occasion, that he forgot quite where he lived.
When he went to the depot, being confused by the
lights and noise, etc., he went to the ticket office and put
-down a half-sovereign. The ticket agent says: “ What
station, please ? ” He wasn’t going to be anything but
-a gentleman under any circumstances. Says he,
“ What stations have you, please? ” [Laughter.] When
I am held up and fired out before a Convention, in
which I see so many faces of those whom I am priv­
ileged to call friends, I am almost tempted to turn
•around to my successor, the President, who you ob­
serve uses the same hair oil that I do [Great laughter
and applause], and to ask him what subject he desires
me to speak upon. [Laughter.] But there is but
•one subject that looms up before me when I look at this
audience, and that is the tremendous growth of the
American Bankers’ Association within the last five
..years. It is a pleasure to recall the Convention in At­
lanta in 1894. The President of this Association at­
tended there as a very modest visitor for that occasion
only. His predecessor attended there. The predecessor
•of that predecessor attended there. ‘ So you can judge
from the succession that was passed on, that in the
group of gentlemen who went down to Atlanta there was
some sort of Southern combination effected at that time.
But the fact of it is that we took the American Bank-ers’ Association in hand, some of the younger element of
the fraternity, and said: We will make it effective, we
will make it of use to the bankers of America, and we
-confidently believe that they will appreciate it.” The
result is told. The energy of the Secretary, the effect­
iveness of the executive officers, the capacity of the va­
rious committees, all is told distinctly in one direction;
-and I desire as one of the Ex’s (and it is said that the
Ex’s go before the Y’s)—as one of the ex-Presidents of
the Association, to put my seal of approval very dis­
tinctly upon the action which has been taken at this
-Convention in providing for the young men hid away
behind the grills in the various banks throughout the
United States, in carrying to them the results of ex­
perience in other parts of the country—making the man
■in Alabama familiar with the commercial law of Ver­
mont—making the man in Maine understand how to
Joan money down in Texas and get it back. [Laughter.]
That is a lesson which we all love to learn—always how
to get money back. It is very easy to lend it; sometimes
-it is difficult to get it back. I remember one of the best
proverbs I ever heard uttered from the platform of the
American Bankers’ Association was the one by our la­
mented friend, Comegys, of Philadelphia, who said that
J;he Bible says that the borrower is the servant of the




lender. It is all wrong. The reverse. The lender is
the servant of the borrower. [Applause.] I have noth­
ing but the most cordial greetings and thanks for the
very great kindness which this Association has be­
stowed upon me personally. There is nothing like get­
ting a national reputation when you are in the bank­
ing business; and I do not know any cheaper form of
advertising than to be President of the American Bank­
ers’ Association; but you have to earn your way up to
that position. It is a great pleasure when you do earn
the confidence of your associates; and, having secured
that great honor, you sometimes fail when you get
through, as the man who was asked, why he was trot­
ting around so bow-legged, he said he went up in a
balloon and walked back. [Great laughter and ap­
plause.]
The President: I knew you would enjoy hearing exPresident Hendrix and I called on him. We have with
us to-day Mr. George Hague, General Manager of the
Merchants’ Bank of Canada, and a delegate of the Ca­
nadian Bankers’ Association. We have never had Can­
ada on our list of States; some day we may; but I am
sure that this Government would like to hear what are
the conditions in Canada,
Mr. Geo. Hague: Mr. President and Gentlemen: I had
no idea whatever of saying a word, but I thought possi­
bly you might like to hear a word or two from that far
off northern country, and because we are very closely
associated with you in the banking business, though we
are not associated politically. We prefer to paddle our
own canoe. But commercially and politically we have
the closest possible relations with the United States,
and I really do not know whether you would do more
business with us if we were a part of the American
Union. Perhaps you might and perhaps not. At any
rate it is a fact that we import more from the United
States than from Great Britain. It is a fact that there
is a remarkable interchange between Canada and the
United States. For example, our larger banks employ
vast amounts of capital in New York, Chicago, Duluth,
and in the South, too—one has a branch at New Orleans;
and at this moment there is great development in the
province of Great Britain on the shores of the Atlan­
tic that will, if it goes on, make a little town of five or
ten thousand inhabitants with vast coal and steel indus­
tries going on with American capital, so if we were a
series of States we could hardly be more closely affili­
ated. You know Canadian banks have branches. One
of the branches of the bank which I represent in the
far off North, a thousand miles north of Chicago, is in
charge of an enterprising manager who wanted to build
up his American connections. He went to work and sent
out circulars asking for collections to be sent to him.
Before he got through he sent out a thousand. That
will show you that he was stretching out his arms pretty
widely for the business. I hope some of you will re­
spond to these circulars. It is a fact which will inter­
est you all that forty years ago when I first entered a
Canadian bank the whole deposits of the Dominion of
Canada were about $15,000,000. We had no savings
banks in those days, and the whole deposits of the
country were only $15,000,000. That was the condition
when I entered the bank forty years ago, and their de­
posits now amount to about $350,000,000, and all the
rest of the banks is in accordance with these larger fig­
ures. And we are looking forward to the time of fur­
ther development because we have vast stretches of
territory undeveloped yet in the far North and in the
East; and we are finding out what you are finding out
and have found out, that this is a wonderful continent
and has inexhaustible possibilities that the people do
not dream of. One year or two ago there were indica­
tions of gold almost as far up as the North Pole. We
have developed them the last year, where the thermom­
eter goes far below zero, so far North there is not day­
light during three or four months of the year. From that
region last year there was $20,000,000 of gold exported.

B A N K IN G
You are very intimately connected with us and we with
you. And as for this southern country, I made a visit a
few years ago to a place where we were interested. I
•came down South.
I visited Charleston, Savannah,
Pensacola and New Orleans. I could not go to Galves­
ton, as that would be taking too much time, although
we have interests there. I came home by the way of
Memphis, Philadelphia and New York, and in every one
o f these places I saw names with which I was just as
familiar as I am with the names of the people of Mont­
real. So you see our interests are identified with yours
and yours with ours. You cannot prosper without mak­
ing us prosper; and to some small extent I grant that
any calamities that might befall us would afflict you.
As the gentleman from Washington said, we are how
in the flow of a wonderful wave of prosperity; every
thing is growing, everything is advancing, people are
making money more and more, and everything is rosy
and bright as we woud wish it to be. I think I have oc­
cupied a long enough time, and I thank you very much
for the opportunity allowed me to speak to you.
[Applause.]
The President: It was understood when we com­
menced this morning, so few States being represented,
that we would call the roll of States through, and if
certain States did not respond we would again call the
roll and have their responses. Of course, no State will
be permitted to make two speeches.
ALABAMA.
E. J. Buck, of Mobile, Ala.: Mr. President and Gentle­
men of the American Bankers’ Association: Alabama, first
■on the roll call of States, extends to you all a hearty welcome
to our Southland. We feel in this visit to dear old Virginia
that you are paying a compliment to our entire South ; and
I know I speak for every Southern State whether represented
here or not, in saying that we appreciate your visit and throw
•open to you our doors in the most cordial manner that we
have in our means. In speaking of the prosperity of Ala­
bama, I can only voice what has been said by every State
that has been heard from on this floor to-day. We, too, have
partaken of the general prosperity. We, too, probably have
had a little better share of it than most of our Southern sis­
ters from the fact that we are cutting loose from the tradi­
tional South in ceasing to be a purely agricultural country.
Alabama, with its immense fields of coal and iron, with the
lime rock all lying in strata so close together that a mill
built can get its coal, iron and rock all with its own tram­
ways, is making iron that is setting the price of that prod­
uct the world over. To-day you Pennsylvanians, and from
other producing States, know that when you enter the mar­
kets you are coming up strongly against Alabama. She is
the State that is shipping her pig iron to the markets of the
world in competition with the mines of the world. Her iron
products are increasing in rapid proportion. Her coal has
increased from over four millions ten years ago to ten mil­
lions in the past year. Within this present year the coal
value has increased two and a half millions, the iron over
one million, the lumber over one million five hundred thou­
sand ; and I am glad to say that in close competition with
that the price of cotton has made old King Cotton come
back ahead of them all to-day with $25,000,000 increase in
money value to our State this year, making a grand total
•of over $30,000,000 that honest toil has pulled from mother
•earth in Alabama this year. With this money we are devel­
oping our State; and we ask every man who wants to get in
the band wagon to come in with us and bring your capital
and your brains and energy, and we will give you a cordial
welcome. We are having a tax rate of only seven mills in
our State. We are extending every facility to manufacto­
ries that come in our midst. We have received within the
last year some of the largest cotton factories that have been
located in the South; notably at Huntsville, Alabama.
Birmingham has given to the South some of the largest steel
and iron factories that have been established recently; and
coming down to my own native town of Mobile, we are
showing increased foreign shipping with our neighbors, the
'Cubans, the Central American States, that is simply amaz­
ing. Our town has simply grown beyond our own expecta­
tions. We are making a splendid showing. The whole State
is enjoying the same prosperity. This State has made a
great many advances in a great many different directions—
the agricultural interests the same. [Applause.]




S E C T IO N .

77

ARKANSAS.
W. Y. Foster, of Hope, Ark.: The State, together with
other Southern States, is enjoying unusual prosperity just
now, particularly the agricultural interests. Crops of every
kind, and we raise all crops known to agriculture in the
South, are unusually prosperous this year. The cotton crop
in my section is unusually good, and as you know the price
now is better than it has been for the last fifteen years. Cot­
ton sold in my town last Thursday at twelve and a half cents
a pound. That nets the farmer, together with his seed,
which is sold to the oil mill at $15 per ton, $55 to $70 on the
bale. This is making money very plentiful in the rural dis­
tricts. When the agricultural interests are prospering, the
banking interest is prospering. The banks are increasing
every year in our State. The money is being centered at
these money centers and industrial interests are being helped
along by this means. During the year ’99 statistics show
that our State was first in the shipment of lumber, third in
the construction of railroads, and in other respects she has
done equally as well. As my friend from North Carolina
says, we have raised a good crop of everything, including
politicians. [Applause.]
The President: The Chairman of the Richmond Ex­
ecutive Committee wants to make a few announcements,
so we will stop the proceedings and give him a chance.
Mr. A. Beirne Blair, of Richmond, Ya.: Mr. President,
Ladies and Gentlemen: As Chairman of the Executive
Committee appointed by the local banks and Trust Com­
panies of this city to prepare for the entertainment of
this magnificent body of men, representing as they do
the intellectuality, material prosperity and the highest
commercial life of every State and Territory, nay of
every city of this vast, glorious, reunited United States
of America, I ask your indulgence and patience in an in­
terruption of the weighty matters of business of the
Convention, to preform a most pleasant task that has
fallen to me. It has been a labor of love to us all to pre­
pare for your comfortable entertainment, and we feel
more than compensated by this very flattering attend­
ance, which we understand to be the largest in the history
of the Convention, and our fullest reward will only be in
proportion as you all enjoy yourselves while with us.
With pardonable pride, the bankers of this city thought
this an auspicious occasion to commemorate a unique
event in the history of your Association, in having
two of its chief officers hail from our city; in com­
memoration of which, and furthermore, personally, we
want to show our friendship and esteem for your Presi­
dent and Secretary, both of whom were our companions
and co-workers for many years. I now present to you,
Mr.' President, and to you, Mr. Secretary, these cups,
emblematic of our love and esteem; and we trust that
whenever and wherever they may be used there will
flow from them a perennial stream of happy memories of
your warm friends in old Virginia. [Applause.]
The President: Gentlemen, as your presiding officer, I
have been buncoed. [Laughter.] When Mr. Blair told
me that he wanted to make an announcement I did not
know that he had those cups up his sleeve. You all
know that I was a Richmond boy. I was one of the or­
ganizers of the Richmond Clearing House, and I under­
stand that this cup is given to me, I suppose, for the
work that the Clearing house has saved the different
members; for five years we tried to organize a Clearing
House, leaving it to the Presidents. I at that time was
a cashier. We could never get the Presidents to organ­
ize, and finally the cashiers did organize. I thank Mr.
Blair for my cup. [Applause.]
Mr. James R. Branch, Secretary: Mr. Chairman, La­
dies and Gentlemen of the Association: I suppose it is in
order for me to say a few words also. It is always with
pleasure that a man returns to the home of his youth and
finds there those who are willing to grasp him by the
hand and say “ God speed.” I have never in my life
spent a prouder or happier week than the last one in the
Citiy of Richmond. I have received nothing but words of
encouragement from those I knew and even from those
with whom my acquaintance was of the slightest. When
the Richmond Clearing House Association sees fit to pre-

78

BA N KERS’

sent tokens of esteem to our worthy President and my­
self, I can only say that from the bottom of my heart I
thank them and hope that I will continue to deserve it.
Born and raised in Richmond, I can only look around me
and see happy faces and remember the scenes of my child­
hood. I can only hope in looking forward to the future,
when the sands of life have passed away, that I will rest
in this old historic city and my bones be consigned to
Virginia soil. [Applause.]
COLORADO. (No response.)
CALIFORNIA. (No response.)
CONNECTICUT.
B. G. Bryan, of Waterbury, Conn.: Mr. President: Gen­
eral prosperity still retains command in the Nutmeg State,
anl although in some lines of manufactures a gradual slow­
ing down of production has been caused by our approach­
ing national election, yet our general business is excellent,
and the man who will work still has a full dinner pail.
Our city is the largest brass producing city in the coun­
try, if not in the world. More than 75 per cent, of all the
brass is made in Naugatuck Valley. As an evidence of our
prosperity, I may say we have about 400,000 savings bank
deposits out of a population of about 900,000, and these de­
positors have nearly two hundred million dollars to their
credit, an average of nearly $500 for each depositor.
Our eighty-three national banks, with their twenty mil­
lion dollars capital and eleven millions surplus, seem to show
a condition of soundness and prosperity, which in a major­
ity of cases is no doubt true, but I am satisfied that the
statements in many cases as published are unreliable, as
many investors in our State have found out by bitter expe­
rience during the last year.
I quote from an article on the . subject of bank state­
ments by a bank examiner; he says: “ The bank statement
does not reveal the condition of the bank; if it affords you
an idea of the general dimensions of the business, with the
subdivisions, but dares not let you know whether the assets
are worth enough to cover the liabilities, the statement gives
the public practically no information upon which the de­
positor can determine whether his money is secure or not.
The purpose of the law is to guard the interests of the de­
positor and creditor and the general public.”
All that he says is too true, but the publication of these
statements does not protect these interests, and if there is no
law to prevent the publication of a statement which the bank
examiner and the Comptroller of the Treasury both know
is not true, then there should be such a law, and as this
association has been prompt and efficient in the institution
of reforms, I commend this subject to your earnest consider­
ation. [Applause.]
DELAWARE.
Benj. Nields, of Wilmington, Del.: Mr. President, Ladies
and Gentlemen: Delaware responds by stating that she still
has the Du Pont Powder Works, the largest powder works
in the world; that the Lobdel Car Wheels, made in Wilming­
ton, are running in Russia, China, Japan, Australia, and in
every country where railroad rails are laid; that nine-tenths
of all hard fiber manufactured in the world is manufactured
in Delaware.
In the manufacture of morocco, Wilmington stands the
second city ip the United States; there are finished daily in
that city for the market, about sixty thousand goat skins.
The paper machines manufactured in Wilmington by the
Pusey & Jones Co. are found in Russia, the British Empire,
Germany, Italy, India, Norway, Sweden, France, Japan'
Canada and in about every country where paper is made.
Many of the great journals in our large cities are printed on
paper made on machines manufactured by this company.
Delaware peaches are sold in nearly all th§ markets of
the United States. We have more banking capital than is
needed for our commercial, manufacturing and business pur­
poses; we have to go outside of our State for investments.
The company of which I am president has invested in a part
of the late British loan.
If any of our sister banks in other States need assist­
ance, need money, the “ little blue hen” stands ready and
willing to gather them under her protecting wings.
We believe that when Paradise is restored it will be in
Delaware, and if man should ever again be tempted by
woman, it will not be by an apple such as was grown six
thousand years ago, but will be with a Delaware peach.
[Great applause.]




C O N V E N T IO N .
DISTRICT OF COLUMBIA. (No response.)
FLORIDA.
Jno. T. Dismukes, of St. Augustine, Fla.: The gentleman
who was to report for Florida is not in the room, and I would
ask that Florida be passed.
GEORGIA.
John H. Reynolds, of Rome, Ga.: In speaking for the Em­
pire Etate of the South, I shall tell you of its great and in­
exhaustible resources in agriculture, manufacturing and
mining. We have made remarkable progress for the last
twelve months.
First, I will speak of the Cotton Manufacturing Industry..
Georgia now has 112 cotton mills valued at $20,389,000.
There #are now in operation 1,178,486 spindles and 26,259*
looms. Since January 1st to October 1st, there have been,
established 39 new cotton mills in Georgia. In this, Georgia
leads the South, South Carolina coming next with 22 new
mills. No other State has had so great a record in the ex­
tension of the cotton spinning industry than has Georgia in.
the last twelve months;
I am indebted for these cotton Statistics to Mr. Cuyler
Smith, of Atlanta, a young Georgian who is devoting his*
talent to the development of this industry in the South.
As to the cotton crop, Georgia last year made and sold
1,25Q,000 bales. Our crop this year is short, and it is not ex­
pected that more than 1,000,000 bales will be harvested.
Very little cotton has been sold for less than 10 cents per
pound. When it is considered that one year ago cotton was
bringing only 6 cents per pound, the profits to our farmers
can be better appreciated. Southern farmers are getting
in better condition than in many years.
A new industry, which has attained great proportions in
Georgia in the last few years is that of growing peaches. The
Georgia peach has become famous throughout the country
for its beauty in appearance and luscious taste. The past
summer there were shipped from Georgia about 2,500 car
loads, valued at $1,500,000. The lands of Northwest Geor­
gia have recently been shown to be admirably adapted for
peach growing. Experts say that it is unexcelled. The near
future will probably show a large development of the peach
industry in that section.
And you all know the famous Georgia watermelon. This
season was not a good one for melons. Perhaps 2,000 car­
loads were shipped out of the State.
Another great product of Georgia are the naval stores.
I will not burden you with statistics of the number of bar­
rels and casks of spirits of turpentine and rosin which were
shipped, but will say that the total value of the naval stores
for the past twelve months, ending August 31st, was ap­
proximately $ 12, 000,000.
Great as Georgia is in agricultural wealth, she is still,
greater in mineral wealth. Her gold mines, her iron mines,
and her vast deposits of marble are only partially developed.
The United States established and operated a mint at Dahlonega for many years previous to the California discoveries.
The output of gold in Georgia this year will be the greatest
in history. The third largest stamp mint in the United
States has recently been established at Dahlonega, with a
prospect of another equally as large to be built within a
year. The output of gold in Georgia for the past year is dif­
ficult to arrive at. I should think, however, that it was from
three to five hundred thousand dollars. A large smelter has
just been erected near Atlanta, by expert engineers from
Colorado, which is proof that they think that there are large
dposits of gold in North Georgia.
The brown hematite iron ores of Northwest Georgia are
superior to any found in the South, and the supply is very
large. Hundreds of carloads are shipped to the Alabama and
Tennessee furnaces to be mixed with their poorer ores.
So plentiful is the marble that lies under the surface
of the earth in Georgia that the county in which I live has
some of its roads paved with crushed marble.
In Northwest Georgia there are also vast deposits of
bauxite; in fact they are the only bauxites of the kind on
the American continent. Because of the extent and improved
methods of extracting aluminum from this ore, the price of
this new metal has been reduced from $9.00 per pound to
less than 25 cents per pound. Heretofore the supply of
bauxite for making aluminum in this country has been
brought from France and other foreign countries.
In educational advantages, the Empire State of the South
keeps up a splendid record. Our colleges and schools are all
well filled. Possibly you do not know that the first female
college ever established in the world was in Georgia. It was

B A N K IN G
the Wesleyan College in Macon, which obtained a charter
•and gave to our fair and lovely women the advantages of
higher eduction.
A large amount of money is being expended in Georgia
•on public schools. She has taken an advanced position in
•educating her children, both white and black.
By those conversant with our constitutional history, it is
•observed that the great men of that day—the framers of our
Constitution—believed that that portion of our country which
“lies east of the Mississippi and south of the Mason and Dixon
line was to be the most populous and prosperous part of the
Republic.
Many conditions and events, slavery, desolating war and
•other things prevented. Though when we look at the natural
•endowments we can see whence sprang this belief.
The Puritan and Chevalier finally met in the great strug­
gle which was the sine qua non of our progress.
History records the removal of the South’s great disa­
bility. Time has recuperated the devastated land, the burned
•cities, and now she promises to fulfill the prophecies of our
forefathers.
TDAHO. (No response.)
ILLINOIS.
J. B. Forgan, of Chicago, 111.: Mr. Chairman, Ladies and
Centlemen: I regret that I am only a substitute to speak to
.you for five minutes on the general conditions of business
in the State of Illinois. I should have liked to have been
able to lay before you some statistics to demonstrate the im­
proved condition of business, but having been suddenly called
upon, and not having statistics at my command, I must con­
fine myself to generalities.
I have been in Chicago since 1892. I had not got well
settled down in the harness there before the financial dis­
turbances of 1893 were upon us. Commencing with that
year, and for three or four years following, the whole
country was full of financial distress, and Illinois suffered
with the rest. Bank deposits shrank, values of merchant­
able commodities and of other kinds of property diminished,
and statements rendered to banks by their customers, as well
as bank statements themselves, contained a doleful tale of
shrinkage in surplus margins over liabilities and loss instead
of gain as result of business from year to year. But hap­
pily a different condition prevails now, and has prevailed
during the past three or four years. Business has been re­
munerative, and banks as well as their customers have shared,
in an unprecedented prosperity. Wealth has accumulated
and has been widely distributed, so that all classes of the
community have been benefited by it; and the whole people
are now in that happy condition which exists when there is
work for all with reasonable remuneration for their services.
The increase in bank deposits in Illinois, as well as in the
other States bound up with us in our Northeastern sphere
of mutual commercial interests, has simply been phenomenal.
The larger financial centers, owing to the accumulation in
them of the increased wealth of the surrounding country,
have changed from borrowing communities dependent upon
the older Eastern financial centers into an independent finan*
cial position with more money at their command than they
can find local investment for. The banks in the larger
towns in Illinois and adjoining States are finding in the open
market in Chicagp investment for their surplus funds, while
Chicago bankers have the world as their field of operation.
Chicago banks have to look to other parts of our own coun­
try, and even beyond the seas for the investment of the sur­
plus funds which have come into them as a result of the
prosperity in the Northwest of recent years.
British Consols selling at a price to net almost double
the rate of interest that our own Government bonds will
yield, commercial paper selling in New York, bankers’ bills
selling in London and German banks offering for deposits
higher rates than could be obtained in the home market, have
all tended to open up a wide field for our financial operation
and make the statement true that we have to-day the world
for our field.
The act passed by Congress in March last, while it has
neither satisfactorily settled the standard of value nor placed
•our currency system on a satisfactorily permanent basis, has
so far resulted beneficially by inducing the banks to so in­
crease their circulation as to accord a sufficient supply of it
for the movement of the crops. We have had no difficulty
this year in supplying all demands for a currency for this
purpose. To this extent and thus far the increased circu­
lation taken out has been beneficial, and I am pleased to be
able to report conditions of business favorable and likly to
continue so for many years to come, unless the unexpected




S E C T IO N .

79

happens and a change of Governmental policy upsets all our
hopes and expectations.
The President: I am requested to make the follow­
ing announcement: Immediately after the adjournment
of this body there will be in this hall a meeting of the
Nominating Committee, who will nominate officers for
the ensuing year.
IOWA.
Fred Heinz, of Davenport, Iowa: Mr. President, Ladies
and Gentlemen: Expansion of prosperity is still the rule in
Iowa. The past year has been more prosperous than any in
her history, and Iowa has raised a large surplus of all good
things that make her great.
Although Iowa already had more banks than any State
in the Union, we have added over 50 new ones in the last
year, while only three have retired.
The deposits in her State and savings banks have doubled
within the last four years, while during the same period
hundreds of curbstone politicians are out of a job, having
found more profitable employment in some other capacity.
Expansion has also been seized upon by our railroads,
who have laid nearly 1,000 miles of new road within the past
two years, bringing the total to over 8,000 miles, and there
is not now an acre of Iowa soil beyond the reach of the
sound of a locomotive whistle.
Our State Bankers’ Association, with 407 members, is in
an active state and flourishing condition. The swapping of
credits has been indulged in more than before, based on the
substantia) returns of the surplus products of Iowa soil, and
not on the surplus of wind now so plentiful with some of the
great campaign orators.
The money Devil seems to be about to leave his usual
haunts in Europe and get nearer to Iowa, as he already has a
foothold in New York, from whence, instead of supplying
the farmers of the West with money to move their crops, he
is now supplying the potentates of the East with money to
move their armies.
Judging from the prosperous look of things here at Rich­
mond, it is not unlikely that the money Devil already has one
eye on Iowa and the other on Virginia, and it will be well to
strangle him before he destroys the liberties of the people by
loaning them money at too low a rate of interest. [Laughter
and applause.]
LOUISIANA.
H. H. Youree, of Shreveport, La.: We are not so pros­
perous yet that we do not have to go East to borrow money.
We are very thankful you are helping us to move our crops.
I have noticed in the papers recently that we have already
drawn out about three million dollars from New Orleans
in about three or four days. Our rice crop is large. We are
shipping rice to California for the Chinamen who live there
to eat. If we have protection on rice and sugar I think we
will keep up with the rest of the States.
MAINE. (No response.)
INDIANA.
The once abode of the Indian and the land of the buffalo
has, in a comparatively short time, by the industry, persever­
ance and energy of its inhabitants, been transferred from a
rude and humble condition to that of refined, progressive and
advanced civilization, so that Indiana now takes its place
in the grand constellation of stars in the most glorious union
of States that God’s, brilliant sun ever shown upon. We are
proud of Indiana. Education, the arts, science, agriculture,
manufacture, in fine industries of all kinds, have ever char­
acterized her, and made the term Hoosier a synonym for
just its opposite from its original application.'
In statesmanship we have been heard from. The legis­
lators and senators, Vice-President and President, are
honors that have fallen to worthy and deserving citizens, and
none of her public servants have done aught to mar or
stain her escutcheon.
In literature, her authors and writers are now attracting
attention—social problems, political economy, find ready
masters—and among her poets the name of James Whitcomb
Riley will be a household word long after all in this vast
assembly will have gone to their rewards.
Indiana has enjoyed her share in the general prosperity.
The business conditions were never better. Our banks and
other financial institutions were never in a more sound con­
dition. I cannot recall a bank failure during the year, while
many new banks and trust companies have been organized.
The new financial law has made National banks more popu­
lar and of greater usefulness, several State banks having
changed to National, and many National banks have in-

80

BA N KERS’

C O N V E N T IO N .

Of the 614 banking institutions in our six cities, 562, or
creased their circulation. There has been a marked develop­
ment and extension of the oil field within our State, which seven-eighths of the entire number remit immediately upon
is becoming to be more widely known as a State full of splen­ receipt, without charge; every institution in Massachusetts
did natural resources. Coal, natural gas, oil and stone and Rhode Island doing so; only six of Maine’s 107 banks
abound in inexhaustible quantities. Some of the best build­ charge; thirteen out of New Hampshire’s 64; 22 in Connecti­
ings in the country are built of our splendid building stone. cut out of 109, and 41 in Vermont out of 71. Certainly a very
We send engines, flour mills, wagons and many other creditable showing for our system. [Applause.]
articles to the farthest countries of the world.
MISSOURI.
Even our politics are so finely adjusted that we are the
J. B. Thomas, of Albany, Mo.: Mr. President, Ladies and
political battleground of the country.
Our manufacturers have been prosperous, labor has Gentlemen of the American Bankers’ Association: Missouri
found employment at remunerative wages, railroads show in­ with her three and a half millions of happy and contented
creased earnings, while in electric roads great activity has people sends greeting.
Although not one of the oldest States by any means, yet
been seen. Our farmers have had some discouragement in
she claims the distinction of holding fifth place among the
the failure of the wheat crop, but will be able to recoup
their loss in a great measure in the unusually large acreage great States of this union. Her bonds bear the highest price
and yield of corn. We have a good State Bankers’ Associa­ in the markets of the world, and within the next four years
tion, which meets annually, with increasing membership. her bonded debt will be entirely wiped out. She also claims
Various matters of interest to the bankers of the State are the lowest tax for State purposes, being only 25 cents on the
looked after by proper committees, and the annual meetings hundred dollars valuation. Three-fifths of this amount goes
are bringing the members in closer touch with each other, to the support of the public schools of the State. Her public
and it is evident that bankers who take an interest in their school system is one of the very best, as almost every neigh­
borhood is dotted with a neijit school house, and all of her
State associations eventually take an interest in the National
cities
and many of her villages have high schools and colleges.
Association. As a matter of economy in management, it is
doubtful if any bank can afford to isolate itself, by failing to Her eleemosynary institutions are of the very best and lib­
unite with both State and National Associations. Having erally supported by the State.
Her climate is good, and almost all the crops common to
attended these meetings of the National body since the one
the
United States are successfully cultivated within her bord­
in Atlanta, Georgia, in ’95, I am glad to say that each meet­
ing has been of increasing interest, enjoyment and benefit. ers, as is shown by the surplus disposed of by her people,
To many bankers, perhaps, it is the only relaxation and out­ amounting in the aggregate to over $125,000,000 each year,
ing of the year, and to these it means going back to the about $35,000,000 of which is live stock. And last but not
various duties with new ideas, pleasant recollections of least her mineral products of about $18,000,000 annually, the
friends and acquaintances formed, of courtesies extended majority of which is produced in the southwest portion of the
from the local bankers where the conventions are held, and State, and consists principally of lead and zinc.
The banks of the State are in a very prosperous condi­
a more noble inspiration to conduct our various institu­
tions, although it may be in some obscure community, on a tion, and are all safe and well guarded under our system of
State and national supervision. The capital and surplus of
higher plane and on sound business principles.
the banks at this time amounts to $54,000,000, loans $170,MASSACHUSETTS.
000,000, and deposits $230,000,000. This, too, at a season
George W. Grant, of Massachusetts: Mr. President, of the year when most of the surplus products are in the
Ladies and Gentlemen : Representing, as I do, the State of hands of the producer.
Our State Association is in a very prosperous condition.
Massachusetts, and the exchange question being one of much
interest to the banking community, it occurs to me to address We doubtless have as large if not the largest membership of
you briefly upon the method of the New England Clearing any State in the Union; our paid membership at this time
House Association, established by the Boston banks and the being 570.
We desire to call your special attention to the exposition
results it has accomplished.
^
New England being a compact and closely settled terri­ to be held in St. Louis in 1903. We invite you all to be
tory, with Boston as its financial heart, our wisest bankers present and see this the largest thing of the kind that has
foresaw the opportunity of creating new collateral methods ever been held.
We cannot close without a word in behalf of our Presi­
for that section, and after mature deliberation our present
system was adopted by a practically unanimous vote of the dent, who hails from our State. With becoming modesty
Boston Clearing House Association. Our Boston banks make we assert that his administration has, been one of which we
their usual local clearing in the morning, and in the afternoon all feel proud. We all love Walker Hill.
MONTANA.
the New England clearing is made, each bank carrying into
the Clearing House its cash items on all New England bank­
Austin W. Warr, Lewistown, Mont.: Mr. President:
ing institutions, check on each bank being listed separately. When the price of silver was below forty cents a great many
The second day thereafter the same are made cash to the people in Montana thought we would no longer enjoy pros­
Boston banks by the manager of the Clearing House, who perity, but we are now enjoying prosperity not excelled by
has been made a member of the regular Clearing House As­ any State in the Union. Every interest represented in our
sociation, and who has, at that time, received remittances State is enjoying the utmost prosperity. Four years ago
from the country banks.
those of us who thought that the best interests of the country
For the year ending .Tune 7th, 1900, the total clearings in would be subserved by adhering to the- gold standard were
the New England department of the Clearing House were considered as traitors to the State and enemies to our friends.
$416,115,363. and the expenses of the same were $46,400.
I am frank to say this condition is not true now. Experience
These expenses should be increased by a small allowance for has demonstrated the falsity of the opinion of the advocates
additional clerk hire necessitated in a few of our larger of free silver. Simply because Montana was interested in
banks, but upon the statement just made you will see that we the mining of silver a great many thought it was the para­
collected odr New England cash items at a cost of eleven mount issue; but they now understand that it is not the case.
cents per thousand dollars, plus two days interest at current To-day, while it is a great deal to expect, yet there are a
rate for money.
great many of us with strong hopes that the present admin­
During the past year the States have been put into the
istration will be continued; and a great many of our people,
system, one at a time, consequently for the present year the
and I believe a majority of them, have arrived at that point
aggregate exchange will be much larger and the expenses where they want a dollar that can hold up its head and say
considerably smaller, as the organization is now established, “ Thank God my Redeemer liveth.”
and as a result we are now collecting our New England cash
NEBRASKA. (No response.)
items at less than ten cents per thousand dollars.
NEW JERSEY.
The question before our Boston banks was not what we
A. W. Conklin, Newark, N. J .: New Jersey is happy. Her
could make upon our New England exchange, but what we
could save upon them, and our system has accomplished the 205 banking institutions are happy to report that they reflect
desired results. We have since adopted, practically, the New the conditions enjoyed by their depositors; that deposits and
York rule to be applied to the remainder of the country, and gross profits are the largest in their history, with losses the
I wish to make the point that had we adopted the New York smallest. New Jersey is called one of the smaller States,
rule in connection with New England cash items, the banks though in square miles she is not much smaller than Massa­
in that section in the past years would have paid us one-tenth chusetts.
While she has not expanded in territory, she has enjoye!
per cent., or $416,115, in lieu of the expenses borne by the
the benefits of the expansion of her productions and commerbanks.




B A N K IN G S E C T IO N .

81

T h e T r e a s u r y a nd t h e M o n e y M arket.
cial enterprises, due to well established confidence based on
the gold standard.
[Mr.
Roberts’ paper will be found in full on pages 39
Only one cloud is to be mentioned at this time, casting a
to
41
of
this S u p p l e m e n t .]
slight shadow on the future. Some business contracts are
H. J. Hollister, of Grand Rapids, Mich.: I move that
being made, based on the continuance of that standard, to be
canceled if it is placed in peril as the result of the coming this Convention, by a standing vote, tender a vote of
election.
thanks to Mr. Roberts for his address.
We join with the delegates from all of the other States
[Amid great applause the Convention arose en masse.]
in the hope and belief that it will not be disturbed.
The President: This completes our programme for the
We acknowledge with appreciation the excellent results day. The Vice-President of the State of New York re­
of the great work of the American Bankers’ Association, and
join with all in praising the grand hospitality of the city of quests that a meeting of the State delegations for a
conference be held immediately after adjournment.
Richmond.
The Convention then adjourned until Thursday morn­
MICHIGAN.
M.
W. O’Brien, of Detroit, Mich.: Michigan is undoubted­ing at 10 o’clock.
ly prosperous. From the reports of the condition of the
TH IRD D A Y ’S P R O C EED IN G S.
National and State banks of Michigan, June 30th, 1900, I
find that the total amount of deposits then held by 191 State
Thursday, October ef, içoo.
banks, three trust companies and 82 National banks were
$152,920,507. Of which the State institutions held $102,448,The President: We will commence our proceedings
609. These banks show an increase in deposits in State and with prayer by Rev. Rob. P. Kerr.
National institutions in the year from June 30th, 1899, to
PRAYER.
June 30th, 1900, of $12,446,927; and an increase in deposits
Let us pray. Oh God, who art our God and our fathers’ God,
from the same date in 1896 to June 30th, 1900, four years, of
Thou whose compassions fail not, Who art the same yesterday,
$50,778,603.
The Commissioner of Railroads reports the income of to-day and forever, grant us the benediction of Thy presence, we
Michigan railroads for the first six months of the year 1899, beseèch Thee, and the guidance of Thy Spirit, that, being di­
rected from on high, we may do those things which shall be
$19,579,968, and for the first six months of 1900, $22,068,661, well
pleasing in Thy sight this day. We return Thee our humble
an increase of 12.71 per cent, in six months.
and hearty thanks for all Thy mercies to us and to all men for
MARINE INTERESTS.

The State of Michigan, with its immense coast line along
and through which passes all the transportation of the Great
Lakes, has large marine interests.
The commerce of the Great Lakes for 1900, as shown by
the Custom House reports from thirty-seven of the principal
ports, exhibits a remarkable increase.
The shipments of iron ore from the head of the lakes up
to September 1st of this year, amounted to 9,449,536 tons,
and during the same period in 1899, 7,539,706 tons, an in­
crease of nearly 2,000,000 tons. The output of iron ore from
the Michigan mines is not included in the aboVe.' The in­
crease is in the same proportion.
The Commissioner of Mineral Statistics gives the produc­
tion of the Lake Superior iron region for the year 1899 at
18,251,804 tons, and the production up to September 1st,
1899, at 10,670,468 tons, against 12,366,022 tons for the same
period this year.
COPPER.

The State Commissioner of Mineral Statistics gives us
nothing later on refined copper production than 1899, during
which calendar year the production of refined copper
amounted to 146,950,338 pounds, a little less than the produc­
tion for 1898. The extraordinary expansion of this indus­
try is manifest from the following comparison: In 1894 the
product was 114,308,870 pounds, value of which was $10,952,122. In 1899 the product was 146,950,338 pounds, value
of which was $26,098,388.
AGRICULTURAL PRODUCTS.

The Secretary of State estimates that the wheat yield in
Michigan this year will be ten million bushels, which is less
than the wheat crop of 1899. The condition of com com­
pared with the average is 97. Oats is a good crop, already
harvested and estimated at 36 bushels per acre.
LUMBER.

The pine forests of Michigan are approaching exhaustion.
The lumber product of Michigan mills for 1900 will slightly
exceed 2,000,000,000 feet, probably 200,000,000 feet less than
1899.
SALT.

The salt product of Michigan will about equal that of last,
year, but the producers of soda and the various products
manufactured from the salt beds along the Detroit River are
rapidly extending their plants and increasing their produc­
tion.
NEW HAMPSHIRE. (No response.)
NEW MEXICO. (No response.)
The President: The next business in order is the address
on the “ Treasury and the Money Market,” by the Hon.
Ellis H. Roberts, Treasurer of the United States. [Great
applause.]




the means of grace and for the hope of glory through Jesus
Christ, our Lord.
We humbly acknowledge and confess th at we are sinners be­
fore Thee, and beg God’s mercy th a t we may be pardoned and
justified and have peace with Thee.
May th a t God, who is
everywhere present to protect and defend His people, take care
of the families of Thy servants gathered here, and keep them in
Thy holy Providence, and save them from all evil. Bring to­
gether again the members of these families ; keep Thou those
who are here, and bring them safely to their homes again.
Bless the interests of this Association, Oh God, and direct
Thy servants according to Thy holy law, to do those things
which shall be right.
We pray Thee for our country ; for Thy servant, the Presi­
dent of the United States ; for the Chief Magistrate of this
Commonwealth ; for all who make or administer laws in the
nation, th at they may be inspired with true patriotism, with a
love of the Truth and of justice and of mercy ; and may we
dwell together in peace. Bless all nations of the earth. Bring
order where there is discord ; bring peace where there is war ;
bring liberty where there is oppression, and may Thy great glory
be embraced to all the peoples, we beg through Jesus Christ out
Lord.
Our Father which art in Heaven, hallowed be Thy name.
Thy Kingdom come.
Thy will be done on earth, as it is in.
Heaven. Give us this day our daily bread, and forgive us our
debts as we forgive our debtors. Lead us not into temptation,
but deliver us from evil, for Thine is the Kingdom and the Power
and the Glory forever.
The Grace of Our Lord, Jesus Christ, and the love of God an#
the Communion of the Holy Ghost be with us all now and for­
ever more. Amen.

The President: The first business in order this morn­
ing is the discussion on “ Thé Financial Future of the
United States.” The discussion will be opened by Mr.
Charles A. Conant, of the New York Journal of Com­
merce.
T h e F in a n cia l F u tu r e o f th e U n ite d iS ta te s .

[Mr. Conant’s paper will be found on pages 42 to 44 of
th is S upplem ent .]

REMARKS BY REPRESENTATIVE OF BANK OF
JAPAN.
The President: When Minister Conger wired that he
was surrounded and being fired on by a set of barbarians,
an Eastern power touched elbows with our army and
rescued, not only their ministers, but our own. We have
with us to-day a gentleman who is the representative
of the First Bank of Japan, located at Tpkio. I shall
ask that Mr. F. B. Schenck, of New York, escort Mr.
Masayoshi Takaki to the stand. [Applause.]
Mr. Masayoshi Takaki, of Tokio, Japan: Mr. Presi­
dent and Gentlemen of the Association: This is an un­
expected and great honor which I have received, coming
to this platform to speak words of greeting and con­
gratulation to this Association.

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However, this greeting is not an official one, as I came
as a private investigator of the financial institutions
in this country. Hearing that your Association con­
vened here, on my way to Japan (I leave San Francisco
on the 10th of this month), I thought I would stop here
and attend your Convention and carry the news of this
great Association to Japan. As all of you know, Japan
is near to you—nearer than ever before. When your
jurisdiction went to Hawaii, Japan was a little nearer.
Now you are going into the Philippines; it seems to me
the relations between Japan and the United States of
America are nearer than ever before. [Applause.] Not
only politically and geographically is Japan nearer to
you, blit financially and economically Japan is nearer to
you. Japan was known to you in 1876, when you had
your Centennial in Philadelphia.
There the trade of Japan and the manufactured goods
of the Japanese people were first known to the people
of the United States. Then, in 1893, when you had the
great Columbian Exposition at Chicago, we exhibited
our goods there, and Japan was still better known to you.
[Applause.]
Now, with war in the East, your officers and repre­
sentatives and soldiers were together with our people,
and Japan is still better known to you. I hope that
Japan will be still better known and closer to you from
this time on. [Applause.]
Until this day Japan is known as the garden of Ori­
ental countries. Every one who visits Japan brings news
to your people that Japan is a pretty, handsome coun­
try to visit, but none of you gentlemen have discovered
that Japan is a place where you might find great oppor­
tunity for investment. Japan has many mines and many
manufactures where you can invest profitably. Now
Japan has a gold basis for her currency, so that there is
no more trouble in our commercial affairs on account
of a fluctuation in currency. Lately Japan has become
a great buyer of cotton and iron in your country, while
she is a great seller of silk and tea to the United States.
In that way our relations become closer than ever be­
fore.
And all the trpuble we are having to-day is that our
country’s financial and economical conditions are not
well known to you, because the Japanese merchants
staying in this country do not mingle with you so much
as wre would wish, and your merchants in Japan also do
not mingle with our business men and men of finance.
So, friends, hereafter it is my sincere desire and hope
that the financiers of this nation may come in closer
relations with the financiers and business men of Japan,
so that the time will come when our Association of
Banks in Japan and the Association of Banks in Amer­
ica will have closer relations.
I consider this a great honor you have extended
me, and I present you my heartfelt greetings upon the
great success of your business.
I thank you again, Mr. Tresident and gentlemen.
[Applause.]
The President: The next business in order is a dis­
cussion upon the subject of “ The Internal Revenue
Law,” opened by Gen. Alfred C. Barnes, President of
Astor Place Bank of New York. [Applause.]
T h e Internal R e v e n u e Law.

[Mr. Barnes' paper will be found in full on pages 50 and
51 of this S upplem ent .]
The President: This is a very important subject, and
if any member of the Association wishes to speak he will
be allowed two minutes,
E. J. Parker, of Quincy, 111.: I have listened, as have
all the members of the Convention, with deep interest
to the scholarly, clever and kind address of the gentle­
man. In justice to the taxpayers and the Government,
I will make one observation and consume only fifteen
seconds.
United States troops are not out of Cuba; they are
in the Philippines to-day; they are not out of China.




The President and the Secretary of the Treasury cannot
estimate the financial burdens still to be faced by the
Government of the United States.
Repeal will be in order, and we all seek especially to
repeal the war tax on bank checks and legal instruments,
but in justice to the Government and our administration
I think repeal is now, or would be, premature.
The President: Are there any other remarks ?
The President: The next question on the programme
for discussion is “ Public Opinion and the Bank,” opened
by Mr. J. A. S. Pollard, Cashier of Fort Madison Savings
Bank, of Fort Madison, Iowa. [Applause.]
P u b lic O p in ion a n d t h e B a n k .

[Mr. Pollard’s paper will be found in full on pages 48 to
50 of this S upplem ent .]
The President: The next business in order is a paper
on “ The Education of a Banker,” discussion opened by
Mr. George Hague, General Manager of the Merchants’
Bank of Canada and delegate of the Canadian Bankers’
Association to this Association. [Applause.]
T h e E du cation of a B an k er.

[Mr. Hague’s paper will be found in full on pages 44 to
48 of this S u p p l e m e n t .]
RESOLUTIONS CONCERNING THE CONSULAR
SERVICE.
Edward J. Parker, of Quincy, 111.: I wish to speak
very briefly to a question of privilege. Up to this time,
in this large representative and conservative body, not
a single resolution has been introduced either advocating
or protesting against a single measure pending in the
Congress of the United States. Men who were members
of the Indianapolis Monetary Conference, and who have
attended the sessions of the American Bankers’ Associa­
tion, well understand that in the exercise of a privilege
and right of petition, that when a steady stream of peti­
tions flow to Washington and land on the desks of Sena­
tors and Congressmen, that different men who are
severely criticized, unjustly so, turn in response to the
public opinion of their fellow citizens. The resolutions
which I wish to submit were written out at the request
of the National Business League, of Chicago, and re­
late, first, to a reorganization of the consular service of
the United States; second, to the creation of a department
of Commerce and Industries, with a Cabinet officer at
its head. If the Chair will permit me to read the first
resolution, which is very brief, perhaps some friend of
this measure in Congress will move a suspension of the
rules so that it may be put upon its passage. In sub­
mitting them to the Executive Committee, I was a little
short of the notice required to be given. While I was
a little short of time in doing that, you cannot be long
in putting it upon its passage. This is the resolution:
“ Whereas, The National Business League of Chicago, and
other business organizations throughout the country—supported
also by many prominent citizens of the United States—have en­
deavored, for several years, to secure the passage in Congress of
a bill providing for the reorganization and classification of the
consular service of the United States ; and
“ Whereas, Bill No. S. 4563, introduced in Congress by Sena­
tor Lodge, of Massachusetts, has been reported out favorably
by the Senate Committee on Foreign Relations ; therefore be it
“ Resolved, That the American Bankers’ Association urgently
advocates the passage of Bill No. S. 4563, or a similar bill, pro­
viding for a thorough reorganization of the United States con­
sular service, by creating a body of officials to represent this
country abroad, who shall be chosen through examinations as to
special fitness and competency for consular duties, and who,
after acquiring valuable experience, shall not be subject to re­
moval with every adm inistration; and th a t the rules and regu­
lations necessary to carry out this reorganization be left to the
discretion of the President of the United States, except as other­
wise provided in the act ; and be it further
“ Resolved, That the secretary of the American Bankers’
Association be and he is hereby instructed to send copiés of this
preamble and resolution to the President and members of his
Cabinet, and members of the Congress of the United States.”

If your rules are suspended, I shall ask that that

B A N K IN G SE C T IO N .

83

resolution be put upon its passage. I hope it will be
fact that the Executive Council have already acted on
passed unanimously.
the matter.
The President: You have heard the resolution. Does
J. J. Sullivan, of Cleveland, Ohio: I heartily concur
it meet with a second? (Seconded.)
in the ideas advanced by my friend from Missouri. He
J. D. Horsley, of Lynchburg, Va.: What is bill S. 4563? has expessed my views entirely. In view of the status
The President: It relates to the consular service.
of this proposition, I move that the motion to refer this
J. D. Horsley: What does it contain?
subject to the Executive Committee be laid upon the
The President: I haven’t read it.
table, together with the resolutions. (Seconded.)
The President: As many as favor the resolution will
The President: You have the resolution to lay the
say aye—opposed, no. It is carried.
resolution offered by Mr. Parker on the table. All in
Mr. Breckinridge Jones, of St. Louis: Was the mo­ favor of that will please say aye, and those opposed, no.
tion passed to suspend the rules? It wasn’t to adopt the
It is carried.
resolution. I raise the point of order that before a reso­
(Call for a division.)
lution of that kind can be passed by this body the rules
The President: Is that gentleman serious who asks
would have to be suspended, in accordance with the con­ for a division. He is not, Mr. Parker.
stitution of this body. Until the rules have been sus­
RESOLUTION IN FAVOR OF A DEPARTMENT OF
pended it is not proper to vote on a resolution of that
COMMERCE AND INDUSTRIES.
kind.
Edward J. Parker: While most of the delegates do
The President: I think the gentleman from St. Louis
not understanding the provisions of the bill—
is correct, and I will so decide that that resolution has
The President: Yon cannot debate a matter that is not
not been adopted. Before it can be adopted the rules
before the Convention. I understand you have another
will have to be suspended by a two-thirds vote of the
resolution?
members present.
E. J. Parker: I have. Shall I offer it?
A Delegate: Can we suspend the constitution?
The President: Yes, sir.
The President: No sir. I am from a section that tried
E. J. Parker: The other resolution is as follows:
to do it, but we didn’t succeed. There is a provision of
the constitution which provides for just what Mr. Parker
Whereas, The National Business League of Chicago, and
other business organizations throughout the country—sup­
wishes to do.
Caldwell Hardy, of Norfolk, Va.: I would like to read ported, aiso, by many prominent citizens of the United States—
have been endeavoring, for several years, to secure the passage
from the constitution: “ Resolutions or subjects for dis­ in Congress of a bill creating a “ Department of Commerce and
cussion (excepting those referring to points of order or Industries,” with a Secretary who shall have a seat in the
Cabinet; and
matters of courtesy) must be submitted to the Executive
Whereas, Bill No. 624 was introduced in Congress by Sena­
Council in writing at least thirty days before the Annual
tor Frye (amended by Senator Nelson, of Minnesota, No. S.
Convention of the Association; but any person desiring 738), and has been reported out favorably by the Senate Com­
to submit any resolution or business in open Convention
mittee on Commerce at the last session of Congress; therefore
be it
may do so, and upon a two-thirds’ vote of the delegates
Resolved, That the American Bankers’ Association hereby
present, the resolution or business may be referred to
urges the passage of Bill No. 624, or a similar bill, which shall
the Executive Council, to report upon immediately; pro­ provide for the creation of the proposed “ Department of Com­
vided that this shall not apply to any proposed amend­ merce and Industries,” with a Cabinet officer at its h ead; and
ment of the constitution.”
to which new Department shall be assigned (as proposed in
The rules cannot be suspended. Your resolution can Bill No. 624) the general jurisdiction over foreign and inter­
only be voted on by being referred to the Executive national commerce (except collection of internal revenue and
administration of customs) ; transportation facilities by land
Council and reported back by them.
and water (except cases under the jurisdiction of the Interstate
J. P. Huston, of Marshall, Mo.: I move this reso­ Commerce Commission) ; the Geological Survey, mining and
lution be referred to the Executive Council, with in­ fishery industries, including fur-seal and other fisheries in
A laska; manufacturing industries, including the extension of
structions to make an immediate report upon same.
foreign markets, and increase of trade facilities with foreign
The President: The question is on referring the reso­ countries; also the following bureaus, divisions and branches
lution to the Executive Council, with the request that it of the public service, and all pertaining to the- same, now under
be acted on and returned at once. All in favor of that— jurisdiction of the Department of the Treasury—namely, LifeBreckinridge Jones, of St. Louis: Mr. President, am I Saving Service, Lighthouse Board, Lighthouse Service, Marine
Hospital Service and Steamboat Inspection Service, Bureaus of
in order?
Navigation afid United States Shipping Commissioners; of Im­
The President: I would rather state the question. The
migration, including the control of Chinese immigration; of
question is on referring the resolution to the Executive
Statistics and United States Coast and Geodetic Survey; also
Council with the request that they pass on it and refer the Department of Labor and the office of Commissioner of
Railroads (now under jurisdiction of the Department of the
it immediately back to this body.
Interior) and the Consular Bureau (now in the Department of
Breckinridge Jones: This resolution contemplates the State).
endorsation of a bill by this Convention. I dare say that
Resolved, That the Secretary of the American Bankers’ As­
not half a dozen men in this room have ever read the sociation be and he is hereby instructed to send copies of this
preamble and resolution to the President, the members of his
bill. Is it the part of prudence and careful business
Cabinet, and the members of the Congress of the United
men of the bankers of the United States, in Convention
States.
assembled, to so lightly go into a question of National
E. J. Parker: That is the second resolution. I am not
importance, as to endorse a bill, the provisions of which
permitted to speak upon it now, am I ?
have never been discussed before the body, and a bill
The President: The Chair would say that the gentle­
that has not been read by half a dozen men in the as­ man will be allowed two minutes. Our time is getting
sembly? I do not believe that, as business and conserva­ short.
tive men, we should adopt any such policy. Moreover,
E. J. Parker: Gentlemen, you have heard men from
the resolutions referred to have been before the Execu­ every State of the Union yesterday. You have heard
tive Council. You already have the action of your Coun­ the scholarly address of the gentleman from New York
cil. At a meeting not three days ago these resolutions
and from Mr. Roberts, the Treasurer, of the United
were before the Council and acted upon by them; but
States. The expansion of the commerce and industries
you do not find that they have been reported here for
of this country is most remarkable. Shall a country
action. With no information before this body at this
whose exports and imports are on the way to two and a
time, to take up a question of this character, and as the
half billion dollars annually, whose commerce is seeking
endorsement of the Bankers of America, saying that the
foreign markets, be held up by an imperfect consular
Executive Council are instructed to report immediately,
system and unbusinesslike methods in Washington, or
I submit that is not prudent action in the light of the
shall we seek to keep pace with the growth of the in-




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BA N KERS’

C O N V E N T IO N .

du stries, manufactures, etc., of the United States ?
Changes are needed in Washington, in legislation, as
they are in our business daily. Congress can vex or
facilitate the currents of business. We want in the Cabi­
net of the United States a conservative business head.
We want these different bureaus, scattered at great ex­
pense in different departments, gathered in one of these
bureaus where it will pay for itself. A vein of senti­
ment has gone through our proceedings from beginning
to end. Coming from the North and the West, being
both Eastern and Western man, let me while on the soil
of Virginia pay a tribute to one of her sons who was,
years ago, is to-day, and forever will be, “ First in war,
first in peace and first in the hearts of his countrymen.”
It was one hundred and thirteen years ago when George
Washington, after the Continental war was over, was
deeply concerned about the commerce on the Ohio River.
ETe and our forefathers never dreamed or thought of the
application of steam and electricity as supplanting the
prairie schooner, much less, the telegraph, the cable and
the telephone. A tribute to another distinguished Vir­
ginian. Was Thomas Jefferson wrong---[Calls of time.]
E. J. Parker: Mr. President, shall I proceed ?
The President: Yes, sir.
E. J. Parker: Was Thomas Jefferson wrong in mak­
ing the Louisiana purchase ? This morning you have
listened to Japan, whose little country in two or three
years has knocked the stuffing out of China, although
the whole international armies have not done it yet.
The President: I regret to stop you, but your two min­
utes is up.
J. J. Sullivan, of Cleveland, Ohio: I was about to say
that the subject matter of the resolution presented so
ably by the gentleman, Mr. Parker, is indeed a very im­
portant subject. T am sure that every gentleman here
would readily give his vote toward any measure looking
toward the intelligent consideration of the proposition
embraced in the resolution. Unfortunately it did not come
before us in the regular order, and hence we cannot to-day
give the resolution our endorsement; besides, as was well
said here, it brings up for consideration a very important
question—the creation of a new dapartment of our Gov­
ernment—and I do not believe, if we should give this
proposition our consent or our approval to-day, that the
next term of Congress (the short session) would take it
upon itself to concur in our views. I therefore move
that the resolution offered by Mr. Parker be referred to
the incoming Council, and that the Council be instructed
to favorably consider the same and to report to the next
Annual Convention of our Association.
Robert J. Lowry, of Atlanta, Ga.: It occurs to me
that that paper is so able, it is one that we should give
action now upon. I think the resolution should be passed
unanimously by this body. We can do it, as this body,
I think, is greater than the Executive Council. They
are our creatures---The President: You are not talking to the subject.
He moved to refer it to the Executive Council.
Robert J. Lowry: I want to move the adoption of the
resolution offered by Mr. Parker. I think it should be
unanimously adopted. I want to go on record myself.
J. F. Huston: I wish to second the resolution of Mr.
Sullivan, and by way of showing the first speaker that
this subject was not first brought up by Mr. Parker,
and that the discussion is not entirely new to all the
members of the Association, I wish to say that the Mis­
souri Rankers’ Association, at a meeting a year ago,
adopted a similar resolution asking for the establish­
ment of a consular service. We instructed our officers
to transmit to our Representatives and Senators this
resolution, and one of the first measures introduced in
Congress was by Senator Cochran, providing for the
establishment of a consular service. While we, per­
haps, have not had the opportunity of weighing this
fully, still it must be initiated somewhere. There was
a time when we had no provision for training an army.




There was a time when George Bancroft had not pro­
vided for the establishment of a navy. But we are men
of peace, and if you have schools where you teach men
the art of war, why are not there also schools where you
provide for the training of a consular corps?
J. H. Ingwersen, of Iowa: The thought has just oc­
curred to me that inasmuch as the subject matter has
been passed upon favorably by the Missouri Bankers’
Association, it is needless for this Association to take
up any time.
The President: The gentleman is out of order.
Breckinridge Jones: We have in Washington a body
of men, composed of selected men by reason of their
long experience and study of public questions. They
have been put there to pass on questions of this kind.
And now for a great body like the American Bankers’
Association, in convention assembled, to have it an­
nounced that on a great national question of this kind,
of so much importance that the unanimous action should
be had, and yet, perhaps, there is not a gentleman in
this whole Association wTho thought it of sufficient im­
portance thirty days ago to serve notice that he was go­
ing to bring it up. It looks to me like an undignified
thing for this body to take up and adopt a bill which
we have never read and pretend to instruct the Executive
Committee to make a favorable report, and thereby going
before the American people indorsing something we did
not know anything about If we were appointed here
as the general managers of the universe, and all im­
portant questions could not be considered until we pass
upon them, it might be well for us to pass some of these
things in a hurry; but I do not think it should be done
this day. After I have made a passing remark to my
friend from Iowa, I want to move a substitute, and that
is that this question be referred to the Executive Coun­
cil, instead of being referred to the ,Executive Council
with instructions to favorably consider. Now, my friend
from Iowa says he wants to make a little reflection upon
the matter. Because the Missouri Bankers have taken
the time and thought to consider this question and act
upon it, my friend from Iowa thinks that it should be
reflected upon by this great body. He is in a neighboring
State of ours. I want to say that if he will follow in our
tracks that we will prevent him from getting in an
error of that kind in a national convention. In order
that our friend from Iowa may not be caught asleep,
when we do take occasion in Missouri to act upon this
matter we are going to have the Secretary of the Mis­
souri Association to send a certified copy of it to him.
The President: I understand you offer no substitution.
The question is on Mr. Sullivan’s motion to refer this
matter to the Executive Council. All in favor of that
will please say aye, and those opposed, no. It is carried.
The President: Gentlemen, we have a gentleman with
us (I don’t think it is necessary to give his name) who
may want to talk to you just for about two minutes.
PRESENTATION OF . A BOWL TO PRESIDENT
WALKER HILL.
Myron T. Herrick: Ladies and Gentlemen: On this
occasion I would rather liked to have had a good speech
to deliver here, but the local committee and Mr. Trigg
have kept me so busy I haven’t had time to prepare it.
It is especially fitting at this time that I have the floor.
It is especially a nice occasion, because some years ago
you sent out from Richmond to the West a young man
to seek his fortune. He has come back to you on this
occasion laden with honors, but he has left his hair
on the frontier. [Laughter.] The members of the Asso­
ciation 'take especial pleasure in giving expression of
their appreciation to that Richmond boy to-day, here in
his old home, in presenting to him this punch bowl. [Ap­
plause.] This, in the name of the Association, I present
with a feeling in so doing that I represent every member
of the Association in their good will toward our President
who is departing from office. [Great applause.] I rec­
ommend to him that he never fill this with anything

B A N K IN G S E C T IO N .
¡stronger than Missouri River water—except when he is
"visited by members of the Association. [Great applause.]
The President: I can see in this bowl the sweetest
"words to me—Richmond, Ya.—brothers—sisters—father—
mother—son and wife—a little one who to-day is lying
•sick at home; but you may not know it, each morning I
■get a letter from her telling me how to run this Con"vention. [Laughter.] She says, “ Be brave—don’t get
«cared; select some face in the audience and feel that you
•■are talking to him and him alone, but not a woman’s.”
[Laughter.] She expected to be here; she expected to
preside; but without a knowledge of the constitution
«he said, “ You have got to do one thing for me; you
have got to elect me President for the next year, because
this year you have had an Association run through a
petticoat government, and I want to run it directly.”
I thank you for this bowl; and I will say to the Chair­
man that whenever he comes, I will not only fill it up
■once, but, with my experience in Cleveland, it will re'Ouire several times to down him. [Great laughter and
applause.]
RESOLUTION OF THANKS TO VIRGINIA
CITIZENS.
J. G. Brown, of Raleigh, N. C.: While we are on these
pleasant subjects, I woul like to claim your attention for
a moment. Some five and thirty years ago there was
issued a command, “ On to Richmond.” Under the lead­
ership of a distinguished son of Ohio there came in re­
sponse to this command men from, perhaps, every State
of the North and from every State of the great West.
There are, perhaps, some present to-day—there are the
sons and daughters of those who recall the unfailing
warmth of that reception. A little while ago there went
forth again a cry of | On to Richmond ’’—this time from
’the Executive Council of the American Bankers’ Asso­
ciation, led by another distinguished son of Ohio, whom
we have just seen before us. Can we ever forget the
warmth of this reception? But it has not been like the
■one of years ago that made those who came regret their
coming; but this has been one which has made us feel
at home and long to stay here. Living as I do in North
■Carolina, just beyond the line, where we cannot fail
constantly to feel the ever swelling tide of Virginia hos­
pitality, we expected great things and we prepared
'for cordial greetings and for sincere hospitality, but our
highest expectations have fallen far short of the real
thing. We cannot have failed to have seen our welcome
in the face of the people and to have felt it in the warm
grasp of their hand as we have met them in the streets
¡and at their homes. It seems to me, then, that we ought
to record an expression of our appreciation,, and the
thought occurs to me that we might, with very great
propriety, place a tablet on the dome of her Capitol and
there inscribe those pathetic words which General
Barnes tells us were written above the last resting place
-of California Bill: “ Angels could do no more” is the
last of it. I therefore take very great pleasure in offer­
ing a resolution; and in giving expression to these re­
-marks it is not only my personal expression or the senti­
ment of my State, but, from the kindly expressions
which I have heard on every hand, I believe it is the
expression of every man and every woman in this Con­
vention. I move that the following resolution be adopted
by a rising vote, and that not only the members of the
..Association, but their visitors, be allowed to vote:
“ Resolved, That this association hereby gives expression to
its high appreciation of the cordial reception and kindly cour­
tesies which it has received at the hands of the citizens of Rich­
mond and of the Commonwealth of Virginia, and that the indi­
vidual members of this association hereby bear hearty testimony
to the genuineness and sincerity of old Virginia hospitality.”
[ Appl ause. ] (Seconded.)

John Farson, of Chicago, 111.: If I could not live in
Chicago, I would like to live in Richmond. In seconding
this motion I would like to add a slight amendment to
that tablet. From what I have seen of the ladies of




85

Richmond, instead of saying “ the angels could do no
more,” I would say “ the angels have done this.” [Ap­
plause.]
J. G. Brown: I accept that.
The President: Mr. Brown, with his gallantry, ac­
cepts the amendment. All in favor of Mr. Brown’s
resolution, which has been duly seconded and amended,
will please rise. (The entire Convention arose.)
The President: Mr. Trigg wants to say a few words.
William R. Trigg, of Richmond, Va.: Mr. President,
Members and Ladies: I arose when you all arose, but
with the intention of not taking my seat when you were
seated. I appreciate beyond measure this attendance
here, bringing so many ladies here. They are here and
they must hear. I stated yesterday on meeting a gentle­
man I understood to be a president, that nobody could
ever say a thing against good whiskey in my presence;
that about three drinks taken at moderate intervals had
brought this Convention here. I had Mr. Trowbridge at
the club. He took a drink with me, naturally. He said
“ That is very good whiskey.” I said “ Yes, it is.” Of
course it wasn’t very long before I rang the bell and we
had another; and I said, “ Mr. Trowbridge, why in the
world can’t the Convention come to Richmond? I be­
lieve we can take care of it.” “ I don’t see why they
can’t come there.” (You know how he looks over his
glasses.) I suppose in half an hour or an hour or two
hours (I can’t remember about the time, but I remember
the number), the train was about to leave. He said,
“ Trigg, I am going right straight to New York and ad­
vise the Council to have its Convention in Richmond.”
So I think we are indebted for that little tippling to a
very happy instance. Words are very easily spoken—I
know by most Virignians—but we prefer action; and I
should like to hear instructions to the Executive Com­
mittee that when this meeting adjourns, it adjourns to
meet again in Richmond next year and bring more ladies.
[Applause.]
The President: Gentlemen, you see what Richmond
wants.
The President: I have a telegram in my hand from a
man whom all of us love to respect and who is absent
to-day. It reads:
H ot Springs , Va.j October 3, 1900.
Walker Hill, President, American Bankers’ Association, Rich­
mond, Va.:
Am greatly disappointed I cannot attend convention. Sick­
ness only prevents. Congratulations to you and regards to my
friends in convention.
(Signed)
Geokge H. R u s s e l l .

[Applause.]
The President: I have another telegram written on
the back of the first one. It is from his doctor. It reads:
“ Don’t go to Richmond. Joe Hendrix and Bob Lowry
are there.” It is signed, “ I. Have Gout, Dr.”
(Laughter.)
Robert J. Lowry: May I say a word ?
The President: No sir.
Robert J. Lowry: I am Mr. Russell. (Great laughter.)
The President: Please take your seat.
The President: I remember when Mr. Russell waa
presented with something like this you have presented
to me to-day, and almost as large. He made these re­
marks—and those of you who do not know him intimate­
ly may not know that he has a little impediment in his
speech, but he has no impediment in the flow of all good
traits of heart and brain that a true man could have.
[Applause.]
FLOWERS FOR GEORGE H. RUSSELL.
J. C. Hendrix, of New York: I ask unanimous consent
that the Secretary be directed to send to Mr. Russell, in
his sick room at the Virginia Hot Springs, a box of
flowers in the name of the American Bankers’ Associa­
tion.
The President: That will be adopted unanimously
without putting it. What I have to say is in a part of a
written speech, and I must tell it, although Joe Hendrix

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B A N K E R S ’ C O N V E N T IO N .

and Bob Lowry will continue to interrupt me. He said
while they were presenting this beautiful loving cup, I
believe, “ Well, it looks to me as though it was con­
structed in proportion to the size of your President, and
most beautiful.” Then he halted. It was too good a
chance to get a point on him and I called it, and he broke
down. I will put the motion now of Mr. Hendrix, to
be serious. It is moved by Mr. Hendrix, and seconded,
that the Secretary be instructed to send some beautiful
flowers to Mr. Russell with the compliments of the Asso­
ciation. All in favor of that will please rise. (The
whole Convention arose.)
PLACE FOR HOLDING NEXT CONVENTION.
William C. Cornwell, of Buffalo, N. Y.: Mr. Chair­
man, Ladies and Gentlemen: I want to invite the Ameri­
can Bankers’ Association to Buffalo in 1901, and my
reason for asking you there in 1901 is that, in addition
to the attractions of our beautiful city, we are to have
there, as most of you know, a great exposition—the PanAmerican Exposition, which I do not think I am ex­
travagant in saying will be the most beautiful exposi­
tion that has ever been given in any country. I say
that not excepting Chicago and Paris, and I say it for
this reason: I think that we all agree to-day Chicago
leads the world in expositions; the beautiful “ White
City ” was made so beautiful by a board of architects,
who embodied in classic white the best of modern archi­
tecture. The Pan-American Exposition is in charge of
a board of architects, some of them the same as those
in Chicago, and all of them as a body fully equal to the
body that planned the “ White City.” They intend to
produce in South American architecture, which, you
know, is ornate, beautiful and artistic, a group of build­
ings in which, while the White City was prominent for
the lack of color, the Pan-American color will be the
ruling feature and the effect will be a harmonious, artis­
tic coloring, the most beautiful the world has ever seen.
I say this because we have the finest artists and archi­
tects in America who are evolving this exposition. Now
Buffalo is in the center of a very large part of the popu­
lation of the United States; and when I tell you that
48,000,000 of people are within one night’s ride of Buf­
falo, you will see at once how great a country we have
to draw from. There has been expended, or will be,
$5,800,000 in the erection and completion of the exposi­
tion, and the electrical display will be the most mag­
nificent that has been presented at any exposition in the
world. In proof of that I want to say that the chief of
the electrical department is the same man who planned
Omaha and Chicago, and he told me the other day that
Omaha and Chicago were simply experiments in order
to make the perfect thing for Buffalo in electricity.
TLaughter.] The grounds comprise three hundred and
fifty acres, one mile long, half a mile wide, intersected
by Venetian canals, with a hundred thousand electric
lights, with a tower three hundred and fifty feet high; and
all this power is to be supplied by the Falls of Niagara.
In addition to that we are to have an Art Gallery given
by a citizen of Buffalo, costing $500,000, and will be a
permanent building of marble. Incidentally I might re­
mark that there will be twenty acres of midway [laugh­
ter] and of a character that will be improved by the
experience of Chicago and Paris. There is a great square
that will hold 250,000 people. Now the objection that
has been raised to Buffalo for the Convention next year
is that, with this vast concourse of people, this Conven­
tion cannot be taken care of. I wish to gainsay that.
To-day we have in Buffalo four first-class hotels which
will care for easily one thousand people. These hotels
can be engaged entire any time before the first of De­
cember for this Convention. The exposition will be just
thirty minutes from Niagara Falls. At Niagara Falls
there are accommodations that can be engaged now and
at any time before the first of December for 2,500
people. We can take care of you in Buffalo. We
can take care of you better there than any­




where else. Now we want you to come there, and I
want to say that it is the home of the bicycle and the
automobile. Hundreds of automobiles are running on
our streets now, and for this reason we have 223 mile»
of asphalt pavements, more than any other city in the
world. We want you next year. While you can go any
time to see the beauties of Buffalo, you all want to go
to the Pan-American. As to the matter of the sessions
of the Convention being interfered with, it will be ar­
ranged that the sessions will occur in the morning, and
you will have the afternoons and the evenings for the
Midway [laughter]—I mean for the exposition, and you
ought not to spend half a day and a night at the exposi­
tion. I have no right to put a motion, but I think I have
a right to ask for an expression on the affirmative side.
I will not call for the noes, but I want all those in
favor of going to Buffalo in 1901 to say aye.
SUBSCRIPTION FOR GALVESTON SUFFERERS.
A Delegate: I move that the Treasurer of this Asso­
ciation write a check for $1,000 and forward it to the
Mayor of Galveston as a small token of our esteem.
Mr. J. W. Whiting, of Mobile, Ala.: I move to amend
by making it $5,000.
The President: The resolution will have to be referred
to the Executive Council for them to report back to the
Convention. It is moved and seconded that an appro­
priation of $5,000 to the Galveston sufferers be referred
to the Council with request to report back to the meet­
ing. All in favor will say aye, and opposed, no. It is
carried.
PLACE FOR NEXT CONVENTION.
Mr. F. C. Bigelow, of Milwaukee, Wis.: Unless I felt
that I had a purpose I should not have asked the Presi­
dent to let me say a few words to you. I have invita­
tions here from the Mayor of Milwaukee and the Citi­
zen’s Business League, which I will file with the Secre­
tary. Milwaukee wants the Convention in 1901, notwith­
standing the eloquent appeal from Mr. Cornwell. W e
are not Pan-Americans in Milwaukee; we are half Ger­
mans. But you will find a warm welcome if you come
there, and I only hope that it may be as warm as we have
received at the hands of Richmond. I did feel that Mil­
waukee had a right of way, but we felt a year ago that
Richmond really bad the right. We did not want to
stand in the way of it, and we felt, and I believe that a
majority of the Executive Council felt, that that
amounted to giving us the right of way unless there
was some insuperable objection. We ask that you come
to Milwaukee. Now, of course, we are midway in con­
tinent, but we have no Midway in the sense that Mr.
Cornwell referred to it, and I wish we could construct
one—perhaps we will if you come. It is my great hope
that you will come. I hope you will accept Milwaukee’s
invitation.
VOTE OF THANKS FOR MR. HAGUE.
R. McCurdy, of Youngstown, Ohio: We have with us
to-day a most distinguished guest from Canada, who has
delivered to us a most excellent and instructive address.
Now I think that it would be a pleasure to grant this
gentleman, Mr. Hague, a vote of thanks from this Asso­
ciation and to tender to the Canadian Bankers’ Asso­
ciation our heartiest good will.
The President: All in favor of that will please rise^
It is carried.
EXPRESSION OF APPRECIATION TO UNIVERSI­
TIES IN PROVIDING FOR NEW COURSES.
H. J. Hollister, of Grand Rapids, Mich.: It has been
a part of the duties of the Committee on Education to
visit some of our larger universities during the past year
in connection with our educational purposes and desires.
We have had the pleasure of meeting the presidents of
several great universities and we have presented to them
the desires of this Convention that there should be a
broader schedule of study that might be embraced by
our young men; that the educational standard might be
broader and more in accordance with the demands of the

B A N K IN G SE C T IO N .

87

Mr. Robert J. Lowry: I move the nominations be
closed. (Seconded.)
The President: All in favor of that will please say
aye. It is carried. Under the rules we have to elect by
ballot.
Mr. E. J. Buck: I move that the Secretary be in­
structed to cast the unanimous vote of the Association
for Mr. Trowbridge. (Seconded.)
The President: It is moved and seconded that the
Secretary cast the unanimous vote for Mr. Alvah Trow­
bridge for President. As many as are in favor of the
motion will signify by saying aye; opposed, no. It is
carried.
The Secretary: I cast the unanimous vote of the Con­
vention for Mr. Alvah Trowbridge for President of the
American Bankers’ Association for the ensuing year.
The President: It gives me great pleasure to announce
that Mr. Alvah Trowbridge is President of this Associa­
tion for the ensuing year. [Applause.]
Fred. Heinz: I move that a committee be appointed
to bring Mr. Trowbridge to the front. (Seconded.)
The President: It is moved and seconded that a com­
“ In view of the fact th at some of our leading universities by
mittee be appointed to bring Mr. Trowbridge to the front.
recent action are extending to the young men of this country
All in favor of that will say aye, and those opposed, no.
courses of study th at will equally meet the requirements of
It is carried. I appoint Mr. Hendrix and Mr. Heinz and
those who are desirous of the profession of banking as in the
Bob Lowry to escort Mr. Trowbridge to the stand. [Ap­
other professions, and th at they are, with us, recognizing more
clearly than ever before th at recent financial and political events
plause.]
emphasize the importance of a higher order of technical and
Mr. E. J. Buck: The Committee on motion, duly sec­
scientific education in business affairs, and th at a commercial
onded, presents the name of Mr. Myron T. Herrick for
and economic education of the highest order has become a neces­
First Vice-President of the American Bankers’ Associa­
sity, and that banking in this country can no longer be consid­
tion. [Applause.]
ered local or domestic, this association desires to express its
most hearty and grateful appreciation of such action, and our
The President: Gentlemen, you have heard the nomi­
Committee on Education is hereby instructed to convey to those
nation. Are there any other nominations ?
universities that are extending these enlarged facilities our ear­
Mr. J. G. Brown: I move that the Secretary be author­
nest consideration and sincere thanks.'’
ized to cast the unanimous ballot of the Association.
I ask that this may become the sentiment of this
(Seconded.)
body.
N.
B. Van Slyke, of Wisconsin: Mr. President and The President: It is moved that the Secretary cast the
unanimous vote of the Convention for Mr. Myron T.
-Gentlemen of the Convention, I could hardly forego the
Herrick
for First Vice-President of the Association. All
opportunity of coming to this silver wedding of the Asso­
ciation. The pleasure, however, is mingled with some in favor of that motion say aye; opposed, no. It is car­
regrets when I find but few faces here of those who at­ ried.
The Secretary: T cast the ballot of this Association for
tended the first meeting of the Bankers’ Association,
Col.
Myron T. Herrick, of Cleveland, for First Vicewhich was not the American Bankers’ Association, but
President for the ensuing year. [Applause.]
that of National Banks only, in 1875. There are but two
The President: Gentlemen, it gives me great pleasure
o f them here, and I feel very much as some one has said,
“ I am more alone every year.” They have dropped to announce that Col. Myron T. Herrick has been elected
from time to time in the last twenty-five years. At that your First Vice-President for the ensuing year.
time in Saratoga the meeting was called by the National
E. J. Buck: The Committee recommends to your As­
Banks to protest or try and get some relief from taxa­ sociation for election of the five members of the Council
tion. I had the honor of presenting there a resolution
that are to be elected by the Association, the following
offering to unite the State and other banks with the
names: Wiliiam M. Hill, of Virginia; J. H. Willock, of
National Banks and inviting their company; and they
Pennsylvania; W. L. Moyer, of Montana; S. A. Morrison,
were soon with us, and this is the wedding anniversary.
of Indiana, and Kenneth Clark, of Minnesota.
That union has been happy and the result I think has
Alfred C. Barnes, of New York: I notice what appears
been golden. I would like to say a few words in regard to be an omission in the nominations for the Executive
to some changes that have taken place here since this
Council. It is either unintentional on the part of the
organization, and as to which we seem to be drifting
Nominating Committee, or, if intentional, perhaps an ex­
outside of the regular line of business, but the time be­ planation would be agreeable to the Convention. I be­
ing short, I will not.
lieve it is a custom, when the President drops from the
Gibraltar of command into the seething seas of the com­
REPORT OF COMMITTEE ON NOMINATIONS.
monalty, for the Executive Committee to rescue him
The President: The next business in order will be the
report of the Committee on Nominations by the Chair­ with a raft, so that he does not finally disappear from
man of that Committee. I do not know who the Chair­ view, and the shock is not so great as if we would part
with him without notice—especially in the case of our
man is. Has some member of the Committee the report?
present presiding officer, so elegant and cordial in his
E. J. Buck, of Mobile, Ala.: The delegates of the
manner, so firm and decided in his rulings; so much
several States forming the Committee on Nominations
so
that a former President of this Association was swept
were called to order by Mr. C. Hardy, of Virginia, and
away thereby; and I think an attempt has been made
on motion Mr. F. G. Bigelow, of the First National Bank
to bowl him out, and the gentleman who made the at­
-of Milwaukee, Wis., was elected to preside, and Mr. E.
tempt reminded me of Oliver Wendell Holmes’ remark
J. Buck, of Alabama, was made Secretary. On motion
on a similar occasion when a bowl was presented to him
the Chair appointed Mr. H. R. Lyon and Mr. Jos. Sands
to act as tellers. On motion, duly seconded, the Secre­ with a lot of little angels carved on the brim:
young men of this country. Some of us have about
finished our work as bankers. We have had for a long
time the harness upon our shoulders. Never before in
the history of this Association has there been such a
body of young men as are gathered In this Convention.
I am most heartily glad to look upon their faces. I feel
that there never was a time in the history of the world
when the future of young men was so great, and I hope
that they may have the privilege of a broader life, a
broader education and a higher standard of personal
opportunity. Now I want to say in regard to these uni­
versities that they met us more than half way; so that
to-day the University of Yale, of Pennsylvania, of Min­
nesota, of Wisconsin, of Michigan, and of New York,
have entered upon new courses of study, having their
curriculum for the coming year open to a broad line of
study for young men. My object in speaking this morn­
ing is to offer a sentiment which I hope will be the senti­
ment of this body, for I believe that you fully appreciate
any action that may be taken on the part of our edu­
cators in behalf of young men. I beg to offer this brief
sentiment:

tary was authorized to cast the unanimous vote for Mr.
Alvah Trowbridge for President. [Applause.]
The President: Are there any further nominations
for this office ?




“ Oh, may the angels on the brim
Preserve him from the daily sin
That leads his wife to say when he comes home,
‘ My dear, where have you been ? ’ ”

88

B A N K E R S ’ C O N V E N T IO N .

Therefore, in order to give the Nominating Committee
time to make an explanation if they desire, or, if not,
to substitute for either of the names nominated by the
Committee, I beg to put in nomination for the Executive
Committee Mr. Walker Hill, the retiring President of
the Association. (Seconded.)
F. B. Schenck, of New York City: It was discussed
whether we should not have the honor of presenting Mr.
Hill’s name as a member of the Executive Council, and
it was told us that it was to be the privilege of the other
Committee to do so; therefore we did not have his name
presented.
The President: I will say to the Committee that no
doubt they have made that nomination in all kindness;
but I have had all the honors that the American Bank­
ers’ Association can bestow on a man. I have served
you three years as Councilman, one year as Treasurer,
one as First Vice-President, and one as your President.
I have a brother, whom you have been kind enough to
nominate, and if you to-day honor him you are honoring
me. I would have to decline most positively to stand in
the way of any one as good as he and a good brother,
t Applause.]
The President: The question is upon the election of
the five members of your Executive Council which have
been named by the Committee. I have not the names
before me, but I would suggest, if there be no further
nominations, that the Secretary be authorized to cast
the ballot for those five gentlemen for your Executive
Council.
J. J. Sullivan: I was about to make that motion. I,
however, favored the idea advanced by the gentleman
from New York, but with the explanation of our worthy
President. I now rise to move that the Secretary be in­
structed to cast one ballot for the election of the five
gentlemen named.
The President: The motion is that the Secretary cast
the ballot for the five gentlemen named for the Execu­
tive Committee. As many as favor the motion will say
aye; those opposed, no. It is carried, and the Secretary
is authorized to cast the ballot.
The Secretary: I cast the ballot of the Association for
William M. Hill, of Virginia; J. H. Willock, of Penn­
sylvania; W. L. Moyer, of Montana; S. A. Morrison, of
Indiana, and Kenneth Clark, of Minnesota, for members
of the Council of the American Bankers’ Association.
The President: It gives me great pleasure to announce
the election of the gentlemen named. Mr. Orde has a
report of the State Bankers’ Association.
George F. Orde, of Chicago, 111.: The representatives
of the States Bankers’ Association have decided to
nominate for the Executive Council Geo; W. Bolton, of
Louisiana; J. P. Huston, of Missouri; F. W. Hayes, of
Michigan; E. L. Meyer, of Kansas, and John T. Dismukes, of Florida.
The President: You have heard the nomination.
J. H. Tripp, of New York: I move the Secretary cast
the ballot. (Seconded.)
The President: You have heard the motion. All in
favor will say aye, and those opposed, no. It is carried.
The Secretary: I cast the unanimous ballot of this
Convention for Geo. W. Bolton, of Louisiana; J. p. Hus­
ton, of Missouri; J. W. Hayes, of Michigan; E. L. Meyer,
of Kansas, and Jno. T. Dismukes, of Florida, as members
of the Executive Council for three years.
The President: It gives me great pleasure to announce
that you have elected the gentlemen named for the Excutive Council for the ensuing term.
The President: The next business in order is the elec­
tion of Vice-Presidents for each State. The Committee
on Nominations will please report.
E. J. Buck: The Committee begs leave to submit the
following names to represent the various States as
Vice-Presidents:
Alabama-—J. B. Cobbs, Birmingham, Ala.
Arizona—H. B. Tenney, Cashier, Tucson, Ariz.
Arkansas—P. H. Head, Cashier, Pine Bluff, Ark.
Alaska—C. M. Summers, Cashier, Juneau.




California—Jas. K. Lynch, Cashier, San Francisco.
Colorado—E. C. Newcomb, Cashier, Cripple Creek.
Connecticut—A. J. Sloper, New Britain.
Delaware—Jno. H. Danby, Cashier, Wilmington.
District of Columbia—Jesse B. Wilson, President, Washington.
Florida—B. H. Barnett, Vice-President, Jacksonville, Fla.
Georgia—J. D. Wadley, Waycross.
Idaho— Chas. Himrod, Cashier, Boise City.
Illinois—D. A. Moulton, Chicago.
Indiana—O. N. Frenzel, Indianapolis.
Indian Territory—B. A. Randle, Cashier, Muscogee.
Iowa—H. M. Carpenter.
Kansas—W. C. Henrici, Kansas City.
Kentucky—S. N. Leonard, Eddyville.
Louisiana—P. Youree, Shreveport.
Maine—Chas. G. Allen, Portland.
Maryland—Robert B. Dixon, Easton.
Massachusetts—Otis H. Luke, Boston.
Michigan—W. Livingston, Detroit.
Minnesota—W. F. Myers.
Mississippi—Lawrence Foot, Canton.
Missouri—C. O. Austin, St. Louis.
Montana—T. M. Hodgens, Butte.
Nebraska—W. Gerecke, Staunton.
New Hampshire—A. L. Mansfield, Hillsboro.
New Jersey—A. W. Conklin, Newark.
New Mexico—C. N. Blackwell, Raton.
Nevada—C. T. Bender, Reno.
New York—E. A. Groesbeck, Albany.
North Carolina—F. H. Fries, Winston.
North Dakota—Hiram R. Lyon.
Ohio—D. P. Wheeler, Akron.
Oklahoma—J. L. Wilkin, Oklahoma City.
Oregon—P. E. Snodgrass, Eugene.
Pennsylvania—J. R. McAllister, Philadelphia.
Rhode Island—F. A. Cranston, Providence.
South Carolina—William A. Law, Spartansburg.
South Dakota—C. L. Norton, Sioux Falls.
Tennessee—J. L. Hutton, Columbia.
Texas—F. F. Downs, Temple.
Utah—Lewis S. Hills, Salt Lake City.
Vermont—Henry F. Field.
Virginia—A. Bierne Blair, Richmond.
Washington—P. C. Kauffman, Tacoma.
West Virginia—Chas. E. Joliiffe, Mannington.
Wisconsin—Frederick Kasten, Milwaukee.
Wyoming—G. E. Abbott, Cheyenne.
Hawaii—C. H. Cook, Honolulu.

The President: You have heard the names, what will
you do with them. A delegate moves that the Secretary
casts the unanimous ballot for the names as read. All
those in favor say aye, and those opposed, no. It is car­
ried.
The Secretary: I cast the ballot of the Convention for
the list of Vice-Presidents named by the Nominating.
Committee for Vice-Presidents of the Association for
the ensuing year.
The President: It gives me great pleasure to announce
that the gentlemen whose names have been read are
elected as Vice-Presidents for the several States for the
ensuing year.
INSTALLATION OF NEW OFFICERS.
The President: The next business in order is the in­
stallation of your officers. It gives me great pleasure to
present to you your newly elected President. You served
us well and long as Chairman of our Council. Under
your administration this Association has grown more in<
that three years than during all the others of its life. I
know that in giving up this badge of honor the affairs
of this Association will be in good and safe hands. I
turn it over to you saying that it is one of the greatest
honors that can be conferred upon a banker. [Great
applause.]
Alvah Trowbridge: Mr. President, Ladies and Gentle­
men: To be elected to the Presidency of the American
Bankers’ Association, an Association of more than 4,500
bankers of the United States, comprising every one of
the mostly wealthy and noted and successful, is an honor
that may well be sought by every one. To be elected tothis place as the successor of these gentlemen who have
done me the honor to accompany me to the platform, of
the President who has now done me the honor to intro­
duce me, succeeding also such names as Pullen, Mitchet
and Coe and McMichael, names always honored where
financial operations were thought of, is an honor that I
will not try to describe to you. I will not try to tell you

B A N K IN G S E C T IO N .
Slow it sits in my heart. I remember the day when I was
no taller than that table and was engaged as a clerk in
a bank at the magnificent salary of six dollars per month,
most of which I promptly expended for food and clothes.
The chief duties of the office were to wash the windows
and the floor, keep the fire in the stove, sweep the side­
walks and polish the handle of the big front door. There
is another case of the boy who polished the handle on
the big front door becoming honored. I accept the honor
at your hands with a feeling which no words can express,
and I promise you if there is any possible thing that I
can do for the advancement of this great American
Bankers’ Association it shall be performed before the end
of my service. [Applause.]
President Hill: Gentlemen of the Convention:-This is
another great pleasure to present to you Col. Myron T.
Herrick, your First Vice-President. He is a fitting rep­
resentative of the young and growing West. Having
served on the Council "with him f or. over four years I
know his worth; and in performing this, though the last
act of my official career in this Association, there is none
that has given me more pleasure.
[President Hill pinned the Vice-President’s badge on
Colonel Herrick’s lappel amid the applause of the Con­
vention.]
President Trowbridge: I introduce to you your new
First Vice-President, Hon. Myron T. Herrick, of Ohio.
Myron T. Herrick: Ladies and Gentlemen and Fellow
Members of the American Bankers’ Association: I need
not tell you that I appreciate this honor. I understand
that the duties of the First Vice-President are mainly
to plan how he may become President next year, and I
will endeavor to perform to the best of my ability those
duties. [Great laughter and applause.] I appreciate
this honor especially because you seem so willing to give
it to me. I thank you. [Applause.]
Robert J. Lotyry: I wish to extend the thanks of this
Convention to the different clubs, the press, the railroads
and telegraph companies that have been so kind to us
during this meeting of our Association. I emphasize
the clubs, you understand.
President Trowbridge: I do not think I need repeat
it. As many as favor the resolution of Colonel Lowry
will say aye. It is unanimously carried.
APPROPRIATION TO GALVESTON IMMEDIATELY
TO BE FORWARDED.
R. D. Kent, of New York: I want to know if there is




89

any technicality standing in the way of the appropria­
tion to Galveston being forwarded?
The President: The matter has not yet been re­
ported.
R. D. Kent: I suggest that the Convention take a re­
cess of three minutes, and the Council meet in that
time.
A Delegate: 1 amend that motion, that the Executive
Council be authorized by this Convention to take such
action as in their judgment they think will meet the ap­
proval of the Convention. The sense of this Convention
is so plain in regard to sending that $5,000 that it seems
to me to refer the matter to the Committee is a waste
of time.
R. D. Kent: I accept the amendment.
The President: Is it the sense of the Convention to
instruct the Executive Council to do that thing? I think
it would be better if you would pass a resolution request­
ing or authorizing the Council to do it.
R. D. Kent: I make that motion.
The President: As many as are in favor of the resolu­
tion authorizing and requesting the Executive Council
to complete this transaction, of sending $5,000 to the suf­
ferers of Galveston, will say aye, and those opposed, no.
It is unanimously carried.
Mr. Chamberlain, of Texas: As a delegate from Texas,
on behalf of the city of Galveston and the State of
Texas, I wish to return our sincere thanks to you for
this generous contribution. I can assure you you have
no idea at the present time of the distress in the city of
Galveston.
The President: Is there any further business before
the Convention? If not, a motion to adjourn is in order.
RESOLUTION OF THANKS TO RETIRING
OFFICERS.
Mr. Farson, of Chicago: We have had many good
Presidents and none better than Mr. Hill, the gentleman
who has just retired, and who lives in the suburbs of
Chicago. I would like to move that a vote of thanks be
given Mr. Hill and the other gentlemen who retired with
him for their work last year. (Seconded.)
The President: As many as favor the resolution will
please arise. The resolution is adopted. A motion to
adjourn is in order.
[The Convention adjourned sine die.]

A merican Bankers' A ssociation,
Fourth Annual Meeting, Held in the City of Richmond, October 3d 1900
INDEX TO TRUST COMPANY PROCEEDINGS.
Duties and Liabilities as Transfer Agents, Etc.
Attitude Toward Corporate Enterprises
Advantages of Safe Deposit Vaults
Trust Company Advertising Essentials in Mortgages and Other Papers

Pages 90 to 94
Pages 94 to 95
Pages 95 to 96
Pages 96 to 98
Pages 98 to 100

Proper Education of Clerical Force Duties of Trustees of Financial Corporations
Detailed Proceedings Address of Welcome Reply to Address of Welcome -

Page 100
Pages 101 to 102
Pages 103 to 110
Pages 103 to 104
Page 104

The Duties and Liabilities o f Trust Companies Acting as
Transfer Agents and Registrars.
By

H en ry

J.

B o w d o in ,

Second Vice-President Maryland Trust Company, Baltimore.

The office of Transfer Agent and Registrar of stock
is an interesting instance of the operation of forces
which may, from time to time, arise in the business
world and, becoming operative, produce their effect in
the form of an established business custom. In analogy,
however, to the physical law of motion, the final re­
sultant of such forces, the established business custom
in question may, through the inertia of a movement once
started, become crystallized at a point far beyond that at
first contemplated, and may ultimately involve legal
relations and responsibilities, not at first recognized, and
which remain undetermined until some combination of
circumstances brings the established custom before the
courts for interpretation. Until the statute law or the
courts have so defined or interpreted the legal responsi­
bilities incident to such custom, all transactions within
its scope are enshrouded in uncertainty and doubt, ex­
cept to the extent to which light may be thrown by the
application of general legal principles.
It is to the consideration of such a situation that I
now invite your attention for a few minutes, to the legal
and business questions involved in the position of a
Trust Company acting as the Transfer Agent or Regis­
trar of the stock of another corporation.
An effort to determine the primary operative reason
for the now almost universal custom of appointing a
Transfer Agent for the stocks of large corporations is
of interest and importance, since such reasons are in
themselves explanatory of the purpose and intent of
those who enter into the legal relations involved in the
office, and are also evidence of the purpose of those who
have operated in such office or position in the expecta­
tion that the discharge of the functions of the office
would meet the requirements of such intent and pur­
pose. I have not been able to determine definitely the
causes winch have resulted in this well established cus­
tom, but it is reasonably certain that it is the evolution of
a process of thought and reason running in the following
groove: It is universally established that the transfer
of title to stocks is not complete for all purposes, nor
properly evidenced, until the transferee or purchaser
has been registered as stockholder upon the books of the
corporation: such registration and notation of transfer
can be performed by the selling owner in person, or by
his duly authorized attorney, and we all know that the
latter course is the one almost universally adopted.



Business convenience, or the inexorable demand for
business facilities, and the enormous volume of stock
transferred, then created the necessity for and the cus­
tom of appointing an Agent whose sole duty it was to
attend to those transfers, perfect them, complete the
transaction involved in the purchase and sale of stock,
and furnish the evidence of such completed transaction
by the issue of a new certificate to the transferee; both
the necessity for the office and its importance were, of
course, apparent. Then, doubtless, the advisability of
throwing every possible safeguard around the issue and
transfer of stock being equally apparent, the advantage
gained by increasing the difficulty of dishonest combina­
tions between the officers of the corporation, through
an increase in the number of persons whose complicity
would be essential to any fraud, resulted in the custom
of selecting a corporate agent, a Trust Company, and
appointing it the Transfer Agent. The capital and sur­
plus of this Transfer Agent is probably in excess of that
of the company for which it is acting as such agent;
doubtless the Trust Company is so selected from among
others largely because of its prominence, financial re­
sponsibility and the consequent security which it offers
to all those who deal with it. We may fairly assume
that such are the causes which were creative of the now
well established custom of appointing Trust Companies
as Transfer Agents for the stocks of other corporations.
Of course we all know that the security which was
sought to be gained through a multiplicity of officers
whose signatures upon the certificates were essential
to its validity in many instances no longer exists in fact,
because it is quite customary for corporations to have
large numbers of their certificates of stock duly signed,
leaving only the name of the stockholder and the num­
ber of shares blank, and intrusting the certificates in
this condition in the hands of the Transfer Agent. Nev­
ertheless, the fact that this one primary reason for the
establishment of the office has in this manner really
ceased to exist does not create any probability of the
ultimate abandonment of the custom; the other reasons
for its creation still exist, and the continuance of the
custom is largely insured by the fact that the omission
of a Transfer Agent would be regarded as suspicious and
irregular; in fact, many of the Stock Exchanges require
the appointment of a Transfer Agent as a condition
precedent to the placing of a stock upon its list, and

TRU ST

CO M PAN Y

•corporations are now so eager to assume all indicia of
caution and conservatism that we often see a provision
placed upon the face of tne certificate to the effect that
the certificate Is not valid unless signed by the Transfer
Agent In several instances I nave seen this provision
carried to the extent of requiring not only the signature
of the Transfer Agent, but also the signature of the
Registrar as essential to the validity of the certificate.
The office of Transfer Agent may be regarded as a
permanent institution; it should certainly be reckoned
with as such.
A Trust Company, occupying this office, assumes a
twofold obligation; certainly it assumes a twofold rela­
tion-first, to the corporation for which it acts as Agent,
which we will designate the Principal, and, second, to
those who have an interest in the stock transferred.
The relation between the Agent and the Principal is
usually created by a resolution of the Board of the latter
designating the company as Transfer Agent, accom­
panied by the payment of an agreed sum which is sup­
posed to compensate the Agent for the clerical work in­
volved in making transfers during the succeeding twelve
months; the compensation is based upon the anticipated
activity of the stock.
By clear implication the Agent holds itself out as com­
petent to discharge the duties of the office. What are
these duties ?
Broadly speaking, the Agent agrees to perform for
the Principal the work of passing upon the evidences of
transfer of title to the Principal’s stock, and of perfect­
ing such transfers as are in proper shape by the due nota­
tion of the transfer and the issue of a new certificate.
If no Agent were appointed the Corporation Principal
would itself perform all this work, and, of course, all
the liabilities incident thereto would rest upon it, and
such was the case until the custom and office in question
were created. But having appointed such Agent, what
measure of responsibility to the Principal attaches to
the agency, and is impliedly assumed by the Agent in
accepting the office ?
At this point we pass beyond the circle of light
thrown by established law, and find ourselves involved
in uncertainty and doubt. Is the relation so established
between the Principal and Agent that of simple agency,
to which the usual law of such relation may be applied
with certainty, and the liability of the Agent may be
considered with confidence as limited to the conse­
quences of lack of good faith and ordinary skill, com­
petency and knowledge ? Or must the duties assumed
by the Agent be so performed as to satisfy the require­
ments of the situation which would exist if no Agent
had been appointed, but the Principal had remained
in direct touch with its stockholders, and without the
interposition of any intermediary ? In other words,
must the Agent so perform its duties as to fully dis­
charge the responsibility which the Principal is under
to its stockholders, in all that pertains to the preserva­
tion of the stockholders’ interest and title until such
interest and title is duly divested and transferred, and
is the Agent responsible for all consequences ensuing
to ihe Principal from a failure to so perform its duties ?
In an effort to reach a conclusion upon the measure of
responsibility assumed it should be borne in mind that
the creation of the office is, apparently, at least, due to
pressure rather from without than from within the corpo­
ration; this creation is not due to the requirements of
business facilities and convenience of the corporation
in perfecting the current transfers of its stock, but is
due, certainly in great measure, to influences outside the
corporation—to a demand for security not afforded
within the corporation’s own organization and conse­
quently sought for outside that organization, through a
separate existence, removed as far as possible from the
influences and control of that organization.
The decisions of record, so far as I have been able
to discover, are upon cases where there was some gross
default by the Agent in the discharge of its duties; I




SE C T IO N .

91

find no case presented involving the liability to the Prin­
cipal when due care, skill and knowledge were exercised,
nor where the court has decided what, in any specific
case, would constitute due care, skill and knowledge;
but in view of the causes which have resulted in the
office and custom, and of the practically absolute control
exercised in most instances by the Agent, it is certainly
prudent for us to anticipate that the courts will decide,
when the proper case is presented, that the Agent is re­
sponsible to its Principal in the full measure of the con­
sequences resulting to the Principal for any acts of the
Agent.
The degree of legal liability to the Principal may, of
course, be restricted by the terms of any agreement en­
tered into between the Principal and thé Agent, and such
limitation may be made operative between the Agent and
those interested in the stock transferred if the latter are
charged wrth legal notice of the restriction upon full lia­
bility, but certainly in the great majority of instances the
relation is created by the method described—that is, by a
resolution of the Board of the Principal designating the
Company which is to act as Transfer Agent and the tacit
acceptance by the latter of the duties of the office and
the fee agreed upon. Clearly there is no limitation of
liability here—the relation is left charged with such re­
sponsibilities as the court may decide to be implied in the
transaction. Can it be successfully argued that, while
the Agent agreed to perform the work, and accepted a
cash consideration therefor, the responsibility for the
consequences of mistake, however innocent, impliedly
remains where it formerly rested, upon the Principal,
it having parted with the control of the situation ? 1
apprehend not.
If such be the conclusion which courts will reach, we
are confronted by the fact that the many legal questions
and difficulties involved in the transfer of stock, ques­
tions which have brought forth volumes of legal text­
books and decisions, are presented to the Agent, or,
speaking more practically, to the knowledge of its trans­
fer clerk and his discretion and discrimination in deter­
mining what questions should be referred to counsel for
solution and action. The Agent must not do, or leave
undone, any matter or thing whatsoever by which its
Principal-suffers loss directly, or by which it falls under
liability to any one having property interest in its stock
by reason of any impairment of that interest; the Agent
must see that there is no overissue of stock, either by
direct fraudulent act of its own employees or by issue
of new certificates upon surrender of old ones with forged
indorsements, or by permitting an unauthorized transfer
of stock, thereby rendering possible the fraudulent loss
to innocent parties, even if unknown and practically un­
knowable either to the Principal or Agent. The Agent
is charged with knowledge of the signatures of the
stockholders of its Principal, and with the legal capacity
of the stockholder to transfer his stock; for example,
in the case of Chew vs. Bank, Maryland, 292, a corpora­
tion was hold liable for permitting a transfer upon the
genuine signature of a stockholder who had become non
compos, the fact of which the defendant was in complete
ignorance. If this bank had been fortunate enough to
have appointed a strong Trust Company as Transfer
Agent, and this stock transfer had been passed by its
Agent, the ultimate liability might have been shifted.
Again, the Agent is charged with knowledge of the
terms and powers under which a trustee stockholder
acts, it having been decided that the word Trustee on
a certificate of stock carries with it, in many cases, re­
sponsibility of full knowledge of the powers of the
trustee and the terms of the trust. A refusal by an
Agent to transfer stock on demand is ground for suit,
unless it is ultimately decided that the refusal was based
upon adequate reasons, or upon lack of proper evidence
of the right to demand transfer.
Of course the Agent is responsible to its Principal
for all acts of fraud or negligence committed by the
Agent or by any one in its employ by which the Prin-

92

BA N KERS’

C O N V E N T IO N .

cipal suffers loss or damage. It is practically impossible
for the higher officers of the Agent to scrutinize every
transfer or to keep the Principal’s certificate book under
personal guard, so that many opportunities for fraud
are open to the Agent’s clerk having charge of transfers
and with the certificate book of the Principal, signed
in blank, in his possession. The case of Bank of Ken­
tucky vs. Schuylkill Bank (1 Parson’s Select Equity
Cases, 180) is instructive as being a leading and one of
the few instances in which the legal relations which we
are considering have come before the court for interpre­
tation, and interesting as showing the utter dispropor­
tion between the average fee of the Transfer Agent and
the financial responsibility assumed.
This was a bill in equity in 1839, brought by the Bank
of Kentucky, a corporation created by the State of Ken­
tucky, against the Schuylkill Bank. The plaintiff had
the power under its charter to establish transfer agencies
where it pleased, which power was exercised, and the
Schuylkill Bank was appointed its transfer Agent in
Philadelphia on a salary of five hundred dollars per an­
num. The bill charged and the proof showed that Levis,
cashier of the defendant, who had charge of the transfer
of the plaintiff’s stock, made a fraudulent overissue to
the extent of about thirteen hundred thousand dollars.
The bill also charged that the plaintiff was being sued
by some of the holders of the spurious stock, and that it
had purchased some of said stock in the hands of inno­
cent purchasers without notice, and that it was ready to
do the like in all such cases. The plaintiff further
claimed that by virtue of an act of assembly of
the State of Pennsylvania it represented all the holders
of said stock. It asked, among other things, for an ac­
counting, and for a decree against the defendant for the
par value of the stock thus surreptitiously issued, with
interest thereon, and also for damages sustained. The
court decreed that the defendant pay unto the plaintiff
$1,184,738 as a just indemnity for the loss, detriment and
damages to which the plaintiff and the holders of the
stock had been put or suffered by reason of the fraudu­
lent issue of 13,185 shares of stock of the plaintiff ’by the
defendant while Transfer Agent of the plaintiff, through
the knowledge, procurement and assistance of^Levis. In
reaching this conclusion the court used the following
language:
(Page 217.)
“ What is a transfer agency ? It is a very harmless
thing. It amounts to nothing more than the witnessing
of the conveyapce by one person to another, of personal
property, viz.: stock of an incorporated company; and in
this case, also, to furnishing the purchaser a certificate
of ownership of such stock, on the surrender of a previ­
ous certificate of like character held by the seller.
“ This is a very simple business, involving little or
no risk or hazard; requiring nothing but ordinary care
and fidelity in its performance. If the necessities of one
bank require its stock to be transferred in another place,
whether in the State of its creation or out of it, why
cannot it ask aid of a correspondent bank that does all
its other business in such a place ? And why cannot
such a correspondent bank afford the aid required ? In
the charter of the Schuylkill Bank there is found nothing
in terms forbidding the execution of such a friendly
office, either to another bank of our own or of a sister
State.”
(Pages 239-240.)
“ First, it is contended that the contract for this
agency being made by the president and directors of an
incorporated bank, it became, from a necessity equally
known to both parties, requisite to employ the assistance
of sub-agents in its execution. That the cashier of the
Schuylkill Bank was the sub-agent, so chosen by that
corporation with the assent and approbation of the com­
plainants; that all the frauds charged in the bill were
perpetuated by him without the conusance and con­
nivance of the president; and that under such circum­
stances the bank is no further responsible for his acts




than arises from the general obligation of every principal
agent to act with good faith and ordinary care in the
selection of a secondary agent. The principle on which
this position rests is the familiar one that when it is
usual and necessary for a principal agent to employ a
sub-agent, as, for example, a broker or auctioneer, to
transact the business, in such a case the principal agent
will not ordinarily be responsible for the negligence or
misconduct of the sub-agent, if he has used reasonable
diligence in his choice as to the skill and ability of the
sub-agent. But, indisputable as is this principle, it has
no relevancy to an agency like the present. The cashier
of a bank, while carrying into execution, under the or­
ders of the directors, a lawful contract, such as the con­
tract of creating this agency is shown to have been, is ih
no sense of the word a sub-agent of the board of direstors.”
(Page 241.)
“ In fact, when the business of the agency has
reached that point, the principal agent is not an agent
so much to sell as to select on behalf of his principal
some one competent to execute a necessary function for
him, which the agent cannot perform himself; and all
the cases referred to in this connection are but the vari­
ous developments of this common principle. But was it
ever heard of, that an agent charged with negligence or
fraud, could relieve himself from liability to his prin­
cipal by showing that his clerk or porter were the imme­
diate actors in the wrong and acted without his author­
ity ? If such metaphysical niceties would be at once
repudiated in a natural person, why should they be
recognized in a corporation ? ”
The comments of the court upon the general nature
of the relation are, I take it, obiter dicta, and, not being
essential to the conclusion reached by the court, are
deprived of all weight as precedent or decision.
You observe that in this case the defendant was not
allowed to plead its due diligence and care in selecting
its cashier, but was held to full accountability to its
Principal. I can find no sufficient reason upon which
to base a theory that would differentiate between the
ultimate responsibility for such fraud as was perpetrated
in the Kentucky Bank case and the ultimate responsi­
bility for the consequences of passing a forged or un­
authorized transfer, with absolute innocence of intent
upon the part of the Agent and its employees. Let us
assume that the plaintiff is an infant who has been in­
jured by the defalcation of its trustee in transferring
stock; the corporation whose stock is so transferred is
clearly liable (Marbury vs. Ehlen, 72 Md., 206). Is not
the Agent who was paid by that corporation to assume
for it the duties of making its transfers liable in turn
to that corporation for the consequences of an improper
performance of those duties ?
The decisions upon the liability of the Transfer Agent
to the Principal are few in number; the direct liability
of the Transfer Agent to the injured stockholder has
apparently not been before a court of last resort, but
the application of established legal principles to the
latter proposition would seem to fix the Agent’s liability
to the stockholder as completely as the decisions noted
established the Agent’s liability to its Principal, and we
reach the conclusion that the Agent must answer to the
stockholder for all damages suffered by the former
tnrough such illegal or unauthorized transfers for which
tne corporation whose stock is so transferred would be
held liable.
The stockholder’s case against the Agent is strength­
ened by a regulation of the Stock Exchanges requiring
the appointment of a Transfer Agent—for such require­
ment is in the nature of a demanded safeguard and pre­
caution upon which the stockholder and the stock trad­
ing public have a right to rely. The case becomes yet
stronger if the certificate contains a statement or notice
that its validity is dependent upon the signature of the
Transfer Agent, for in that instance such signature
gives to the certificate a vitality and credit which it

TRU ST

CO M PAN Y

■would not have unless so signed. Such Stock Exchange
requiremehts for listing and such provisions on the face
of the certificate would seem to strongly emphasize the
responsibility which the Agent assumes toward its Prin­
cipal and the latter’s stockholders.
Apparently the injured stockholder could successfully
pursue either his corporation, the Principal, or the Agent,
pr both.
R E G IS T R A R O F S TO C K .

At the second annual meeting of this Section (August
24th, 1898) an able paper upon this general subject was
presented by Mr. Felix Rackemann, of counsel of the
Old Colony Trust Company, Boston, in which the author
drew a distinction between the legal responsibilities of
a Transfer Agent and those of a Registrar of Corporate
Securities, considering that the latter were broader than
the former. He places the origin of the office in the
fraudulent overissue of the stock of the New York &
New Haven Railroad Company by its President and
Transfer Agent, the transaction being known as the
“ Schuyler Frauds.” (N. Y. & N. H. Rd. vs. Schuyler,
34 N. Y., 30.)
This occurrence emphasized the necessity of further
safeguards around the issue and transfers of stock and
resulted in the passage (in January, 1869,) of a regulation
by the N. Y. Stock Exchange under the terms of which
corporations whose stocks are listed are required to
appoint a responsible Agency at which a registry of
the stock shall be kept. The keeper of this registry is
known as the Registrar; the sole purpose of the office
seems to have been the creation of another check against
overissue.
The appointment is made by resolution of the Board
of the appointing company and is accompanied by the
payment of a small cash consideration gauged by the
degree of activity with which it is anticipated the stock
will be transferred or dealt in. The Transfer Agent
makes the transfer, issues the new certificate to the
transferee, which, together with the old certificate and
such separate powers or evidences as may accompany
it. are sent to the Registrar and duly noted upon books
kept for that purpose. Since the function to be per­
formed by the Registrar, which it holds itself out as
competent to discharge, is that of a check against the
Transfer Agent, in guarding against an overissue of
stock, it becomes necessary for the Registrar to scruti­
nize all transfers since the issue of a certificate, except
against one, legally canceled, for the same number of
shares would necessarily result in an overissue. This
duty the Registrar impliedly, by its acceptance of the
office and fee, agrees to discharge.
Obviously, if the Registrar certifies the issuance of
a certificate, thereby placing upon it the last and high­
est indicia of validity, and loss results to the Principal
tnerefrom, the Registrar has failed to fulfill the purpose
of its appointment; if, by such action, loss inures to a
stockholder whose property rights have been wrongfully
divested thereby, cannot such stockholder recover from
the Registrar, the signature of the latter, in acceptance
and approval of the evidences of the transfer, being
essential to the transfer and being the last act in con­
summation of the transaction by which the stockholder
is injured ?
In the absence of an expressed agreement limiting the
liability of the Registrar, it would seem that the accept­
ance of the office carries an acceptance of responsibility
for failure to properly perform the functions of the
office, and that, unless such limitation of liability is
brought to the knowledge of the stockholder, and of
those who may, from time to time, become such, the
acceptance of the office would also imply an acceptance
of responsibility for all acts of the Registrar whereby
the stockholder is wrongfully deprived of his property
interest in the stock. Here again the case against the
Registrar is strengthened by the quite customary regu­
lations of Stock Exchanges requii-ng the signature or




SE C T IO N .

93

-

counter-signature of a Registrar as essential to the valid­
ity of the certificate.
The duties and liabilities of Registrar do not, in my
opinion, differ in any marked degree from those of a
Transfer Agent.
It has been suggested that in case of difficulty or
doubt the responsibility of decision should be thrown
by the Agent or Registrar upon the Principal and defi­
nite instructions be asked for. This request would, if
answered, relieve the Agent from liability to the Prin­
cipal; it would certainly be evidence that the Agent con­
sidered itself liable only for the usual responsibility of
an Agent, but i doubt the practical value of the sugges­
tion because the request for instructions by the Agent
would probably not meet with any satisfactory response.
I have, in representing a Transfer Agent, asked the
Principal for instructions, and to my surprise received
them. I anticipated, however, at the time that the Prin­
cipal’s reply would practically be, “ You have been paid
to perform the work of noting our transfers, and have,
by acceptance of your fee, agreed to decide these ques­
tions yourself and assume the consequences of an erro­
neous decision, therefore we decline to instruct you and
thereby reassume the ultimate consequences of mistake
in the law or facts. Your signature is essential to the
validity of the new certificate, and you put it bn or
refuse it at your peril, not ours.”
Such position would be difficult to assail, and I am
strongly inclined to the belief that such would be my
position if, representing the Principal, I were applied
to for instructions by a Transfer Agent er Registrar.
It may be that the weight of ultimate decisions by
the courts, when the responsibilities of these offices
have been presented for determination, will result in the
application of the general rule governing the relation
of Principal and Agent, and in holding the Agent respon­
sible only for the consequences of due care, skill and
knowledge, and in establishing that such measure of re­
sponsibility only attaches to or is implied by the assump­
tion of the office. But if such is the case, it remains
true that the questions which may arise in the transfer
of stocks are most obscure and involved, and that the
assumption of the skill and knowledge requisite to dis­
charge the duty of passing upon such questions is a dan­
gerous duty for any corporation to assume.
The responsibility of passing on transfers is one of the
most important duties devolving upon the counsel of any
corporation; as the number of corporations for which a
Trust Company acts as Transfer Agent or Registrar in­
creases, the weight of its responsibility as such Agent,
even under the usual limitation of an Agent’s liability,
also increases through multiplication of the chances of
innocent error and mistake, in proportions which it is
not pleasant to contemplate.
,
It would seem, here, that a point has been reached
when Trust Companies may, with possible advantage,
pause to investigate and consider carefully the degree
of liability which we so readily assume in accepting
the position of Transfer Agent and Registrar, and, this
being determined, to see if the scale of fees is commensu­
rate with that responsibility.
Evidently the primary operative causes have resulted
in the creation of an office which involves more liability
than would, at first sight, have been supposed to attach
thereto. Possibly the nomenclature of these offices—
Agent, one who acts for another, and Registrar, one who
performs the act of registering—has obscured the true
relation and has created a feeling of confidence which is
misplaced. Certainly it is anomalous that the extreme
care and ingenuity which have been displayed in ex­
pressly limiting the liability of the Trustee in the dis­
charge of the Trust under a corporate mortgage, nowhere
appear in restricting the responsibility in making trans­
fers of stocks in transactions involving untold amounts.
If the degree of responsibility is that which I have
indicated, and the legal relation is not that of Agent and

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BA N KERS’

C O N V E N T IO N .

Principal, lliat nomenclature being misleading, but is
that of employer and employee, the Transfer Agent hav­
ing assumed for a cash consideration all the responsi­
bilities incident to the proper performance of the work,
both to the body corporate so employing and to its indi­
vidual members—those interested in its stock—is not the
average of fees paid for such work entirely incommensu­
rate with the risk, even applying, as a standard, the
rate of premiums charged by Bonding Companies under
the existing conditions of unbridled competition ? It
would seem to be scarcely commensurate with the re­
sponsibility assumed even if the liability is only to ex­
ercise due care, skill and knowledge in such transac­
tions.
If my views are correct we are now engaged in the
cheapest form of insurance ever devised; it is good busi­
ness for the average corporation to employ a strong
Trust Company to make its transfers, and, for a few
hundred dollars premium, assume the risks of defalca­
tion and innocent error.
Of course the large majority of transfers are in usual

course of Stock Exchange business, and present no new
or novel conditions, and only those in which statute or
established decisions furnish a safe guide, but we may
be at any moment called out of the beaten path and con­
fronted with facts, essential and with but little to indi­
cate their existence, to which the well-known legal prin­
ciples, and customary procedure, may or may not apply,
and upon the decision, to transfer or not transfer, may
depend a possible heavy loss.
In presenting these views I am conscious of occupy­
ing the uncomfortable but relatively easy position of a
critic of existing conditions who is unprepared to suggest
an adequte remedy.
If, however, the matter receives your consideration
and that of your counsel, some system will doubtless be
devised by which the degree of liability which we are
willing to assume will be defined and properly evidenced,
or a scale of fees will be established which fairly repre­
sents the responsibilities assumed, if they are deter­
mined, or the risks involved, if the responsibilities of
the office remain undetermined.

The Proper Conservative A ttitude o f Trust Companies Toward
Corporate Rnterprises.
B y J ohn E. B orne , President Colonial Trust Company, New York City.

Trust Companies have had, for years, relationships
with certain corporate enterprises; they have acted as
trustees in railroad and other corporation mortgages;
as transfer agents and registrars of stocks issued by
such corporations; and have performed various func­
tions which, being purely clerical and administrative,
call for no discretion in attitude or relationship, which
latter consists, largely, of a proper performance of cer­
tain duties. The great industrial development, however,
of the past few—and particularly the last two—years,
has created another field of usefulness and activity for
Trust' Companies, and their services have been made
use of in bringing into existence certain large corporate
enterprises, in some instances new, and in the other, and
by far the greater number, the result of the consolidating
and joining together of already existing firms and companies. Here the Trust Company may act as interme­
diary in various ways; it may become the depositary of
stocks and bonds, titles and equities of corporations and
firms; the holder of purchase moneys and payer of the
same; the collector of subscription moneys and issuer of
new securities under agreements of consolidation; and
it performs the various and varying functions incident
to each particular case.
Being thus brought into close contact with an organ­
ization, it becomes associated, in the public mind, with
its formation; and its relationship with the enterprise is
considered an indorsement of the good faith and probity
of the organizers of the same. It is, therefore, of the
utmost importance that a Trust Company should in every
ease thoroughly satisfy itself on these points, and that
it should decline any business connection where these
are at all doubtful, otherwise it will lay itself open to
future criticism and will be bound to suffer in standing.
No business function should be entertained where the
least cloud exists.
A Trust Company should take the same view of a
corporate enterprise that a merchant takes of a cus­
tomer. The shrewd merchant first satisfies himself of
the standing, both financial and moral, of the applicant
for his merchandise, and if he is satisfied on both points,
he gives him commensurate credit; if he is not satisfied
on either of the above points, he will either refuse to
open business connections, or will, at any rate, limit
them to a strictly cash basis. The Trust Company must
take the same view of corporate enterprises. If their




financial and moral standing is excellent, it can afford
to lend them its credit; if these are not so, it should not
even deal with them, as the merchant does, on a cash
basis; it will save itself embarrassment and criticism by
not establishing business connections with them. Being
thoroughly satisfied, however, it can serve a corpora­
tion in many w ays; it can act as its reference (and the
reference of a Trust Company goes a very long way and
has a decided influence in the public mind; hence, the
necessity of being most careful in this direction); it can
bring it into contact with capitalists, and it can further
its interests legitimately in various directions, without
in any way becoming-sponsor of its ultimate business
success. With this it should not concern itself, and it
should in no sense ever become the exploiter of any busi­
ness, or the guarantor, in any way, of its future success.
Where any other course is adopted, the very laws of
chance will make a Trust Company, at some time or
other, sponsor for one enterprise out of many that will
fail of success or prove disappointing, and this will re­
flect more seriously on it and hurt its general standing
and reputation more than it has been benefited by the
success of the many.
Therefore, it should not become the exploiter of a cor­
poration’s future possible success. This should be made
very clear by a thoroughly neutral attitude. A Trust
Company should practically say to the public:
“ We know the originators of this enterprise; we are
satisfied with their ability, responsibility, honesty and
good intentions; as to the possibility of profit in the busi­
ness, however, that every investor must look into for
himself.”
The recent industrial movement has brought to the
front organizers and promoters of many classes. The
responsible, serious one is readily known as such by his
affiliations. The irresponsible, obscure one makes up in
assurance what he lacks in the more desirable requi­
sites; he secures his clientele by representing himself as
more important than he is; he endeavors to secure the
co-operation of a Trust Company by a generosity in
prospective; which has behind it the ulterior motive of
using the Company for the purpose of giving him a fic­
titious credit and standing. I have no doubt all of you
are familiar with this character. He has no objection to
any charge you propose on an issue of bonds, and consid­
ers any figure you may give him for the performance of

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prospective services perfectly satisfactory. He makes
with you a tentative arrangement which, as he possesses
no responsibility, is rather one-sided at best; and then
you find him using your name freely, as being behind
him and his particular enterprise. His methods of ingra­
tiation are various, but they have all one purpose and
only one result with regard to yourselves. He is to be
shunned.
It therefore seems to me that the proper conservatism
of attitude of a Trust Company toward a corporate insti­
tution lies in assuring itself, always, of the standing of
its originators; in not entering into business relationship
with other than responsible, respectable parties; in as­
sisting such parties, by vouching for them, where their
standing is assured; and in taking no part in exploiting
the profit earning side of any enterprise. By assuming
this course it will carry out the functions which fall to
it logically, in the present era of industrial development
—namely, that of facilitating the formation of reputable

S E C T IO N .

95

corporations. Here, in order to retain the confidence of
the public, its functions should end.
In conclusion, permit me to say that in preparing this
article I do so with the knowledge that the business of
Trust Companies in various portions of the United
States differs materially, and that what may be looked
on as proper functions in one section of the Union may
be considered as either too conservative, or not conserva­
tive enough, in some other section. I have the hope,
however, that the above conclusions will be acquiesced
in by the majority of my brothers in active Trust Com­
pany service. It seems to me that the position of a
Trust Company must be like that of Caesar’s wife, above
suspicion; it should, in itself, represent the highest form
of commercial and financial credit; and it can only do
this by keeping free from entangling alliances which
may provoke criticism and injure its standing in the
community of finance.

The Advantages o f Operating Safe Deposit Vaults in Connection
W ith Trust Companies.
B y W il l ia m

A. C a r r , Treasurer Union Trust Company, Pittsburg.

The trend of the times in business life is toward com­
bination, the bringing of'all auxiliary lines around a
main business. The “ department store,” so arranged
and furnished as to enable the purchaser to make all
his purchases uuder one roof, and so to save his time
and the annoyance of using his credit in a number of
business houses, is a striking illustration. The same
principle operated in the “ department store ” applies,
and with equal advantage, to a Trust Company.
The strictly up-to-date Trust Company, under its
corporate powers, is given an opportunity to make itself
indispensable to large classes of a community inside and
outside of the business world. It can avail itself of this
opportunity, as the department store does, by grouping
around its main business all its auxiliary lines of busi­
ness under the direction of bright, progressive managers.
Some Trust Companies make a specialty of a particu-“
lar wrork and give no attention to the departmental pol­
icy; but these companies are not following the trend of
the times as we have earlier seen it to be. In a well-or­
ganized Trust Company there are departments, and of
various kinds. These departments are needed for the
convenience of the customer, will be appreciated by him,
and will tend to fix him in the permanent list of custom­
ers. One of these departments popular .with the cus­
tomer, and, we may add, profitable to the company, is
the “ Safe Deposit Department.” As an ilustration: A
customer of the banking department desires to purchase
bonds. His relations with the banking department have
been satisfactorily and fully established. He is intro­
duced to the manager of the bond department, and, deal­
ing with him, he makes selection and purchase of certain
bonds. It happens, however, as is often the case, that,
for convenience in making deliveries or sales, he desires
to have a safe place in which to deposit his bonds, in­
stead of registering them. The bond department mana­
ger, learning his wish and need, now introduces him to
the manager of the Safe Deposit Department. The plan
of boxes in that department is submitted and he makes a
selection suitable to his requirements. Then, upon his
signing a contract for the use of his box, the key thereof
is delivered to him and his bonds are deposited therein.
There is, we admit, little direct profit in the Safe De­
posit Department when run on a small scale, but the in­
direct profit of keeping your customer in the house may
be considerable. And while the box rent may be small,
a fair profit will likely accrue from the sale of the bonds.
The fundamental principle in business is in keeping




your customer—in making him feel satisfied that you
are doing the best that can be done for his interests un­
der all the circumstances. When once he has favored
you with his patronage, if you have the departments
needed to accommodate his requirements and in each of
such departments his interests are carefully handled, he
will remain with you, and the net results of his business,
running through the .various departments accommodat­
ing him, will likely be important.
There are many women customers in these times and
their number is constantly increasing. They especially
prefer to have their safe deposit boxes with the com­
pany that transacts their trust or banking business.
They can deposit their coupons, notes, collaterals or
other securities in the banking department for collection
and thereby save time, risk and the inconvenience that
attends transacting business at several places. The
guard of the Safe Deposit Department should be particu­
lar in his attention to the ladies, saving them as much
trouble as possible. He should see that their boxes are
carefully inserted in the proper space in the Safe De­
posit Vault, and, when removed, carry them to the cou­
pon rooms. These little attentions are gratefully re­
ceived, and not only do much toward making the renters
of boxes feel that their patronage is appreciated, but
lead them to tell their frinds, and to so become active
agents for the company in soliciting new business.
The manager of one of the large Trust Companies in
New York recently said that they had many renters,
both men and women, having no one to assist them in
their money matters, who would frequently have the
guard in charge help them to cut their coupons and
arrange them in envelopes for deposit in the banking de­
partment of that company.
The first Safe Deposit Company in the City of Pitts­
burg was organized in the year 1867. Since that time
there have been at least ten additional ones established,
including banks which rent boxes.
As to the style of locks for Safe Deposit boxes, it is
very desirable to have double locks with two escutch­
eons. Many of the renters suppose, when the guard
places his key in the same escutcheon they use, that he
has access to the boxes. This is a mistake, and the im­
pression should be avoided as far as possible. The
guards and managers of the Safe Deposit Department
should be careful to see that the renters properly re­
place their boxes in their own compartment.
As to general powers of attorney granting admission

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96

to Safe Deposit boxes, they should specificaly set forth
that the attorney in fact has authority to open the box,
for while some companies consider a general power of
attorney sufficient authority, others insist that a specific
power be given, granting that privilege.
The advertising for the Safe Deposit Department
should be kept up continuously, and should be of a rich,
neat and attractive character. > Of course, you do not get
immediate results from your advertising. It is like the
farmer sowing his seed; he has to wait until the seed
finally develops into the crop, and this means that he
will reap his harvest perhaps a year afterward. This
law applies as well to the advertising of the Safe De­
posit Department, and of all the other departments of a
large Trust Company. One of the prominent merchants
of Philadelphia at one time, having occasion to increase
his credit, sent his credit man to New York to see Mr.
A. T. Stewart concerning the granting of a larger line.
The credit man admitted that the profits made by his
concern were not sufficient for the amount of business
done, and upon this admission the additional credit was
declined. The principal of the house then went to New
York to obtain, if possible, the desired credit, meeting
with the same result. Later he requested a personal in­
terview with Mr. Stewart, who at first also declined to
grant him further credit; but when, upon considering his
claim, Mr. Stewart asked him, “ How much money did
you pay for advertising last year? ” and received the
answer, “ $94,000,” he said, “Add this to your profit for
last year, and it shows you a very handsome return.”
As the result of this new light on the situation, Mr.
Stewart said, “ You can have the additional credit. You
will not begin to realize until this year the benefit from

the money you paid last year for advertising.” This is
true of Trust Company advertising. A great deal of
missionary work is done from which no returns are re­
ceived for one, two, and in some cases, three years. But
by careful, judicious and persistent advertising fair re­
sults are sure to come, if you have the facilities for tak­
ing care of the business, and treat your customers polite­
ly and handle their business with care.
The Safe Deposit Department should be made as at­
tractive as possible. Some of these places are very dis­
mal looking. Last summer, when in London, I visited
one which was so gloomy that it reminded me very much
of a dungeon, with its heavy grille grates and bars and
its dim lights. The largest Safe Deposit Department I
have ever seen is that in connection with the Credit
Lyonnais, in Paris, this one department covering four
floors. It is four stories under ground; all the different en­
trances are carefully guarded, and all the renters are care­
fully examined as they pass in. The Safe Deposit boxes
are in large cupboards, and each of these cupboards in
turn has a variety of assorted boxes, so that it is im­
possible to get into more than one compartment at a
time.
In ordering Safe Deposit boxes for a company it is
difficult to decide on the sizes to place in the vault, as
the demand varies. The proper way is to buy them in
sections and sort them up to suit the demand.
One of the most successful novelties which we use
in advertising our Safe Deposit Department is a small
tin box in which renters can collect their diamonds,
jewelry, etc., and place in their Safe Deposit box. We
have sent out 2,500 of them and have met with the best
results.

Trust Company Advertising .
B y R ic h a r d

L. C r a m p t o n of the Northern Trust Company, Chicago.

Occasionally one finds a man who says that it is not
good business ethics for Trust Companies to advertise.
The average man will admit they may advertise. The
officers of most companies, 1 believe, think they should
advertise. The signs of the times say they must adver­
tise—that is, if increasing dividends are desired.
By advertising I mean the broader definition; all that
goes to make favorable publicity.
Many of the older Trust Companies have established
reputations in their respective cities which keep on
bringing new business to them three hundred and sixtyfive days in the year, but even they must let the growing
generations of this advertising age know that an up-todate business is still being done at the old stand. The
newer Trust Companies, particularly those in the West,
where the functions of a Trust Company are only begin­
ning to be understood, must make an advertising invest­
ment for the business of ten or twenty years in the
future.
Perhaps in no business can good advertising be con­
sidered as favorably in the light of an investment as by
Trust Companies doing the usual Estate business. The
Estate of a person, who to-day is favorably impressed
with the stability and business policy of a Trust Com­
pany sufficiently to name it as Executor and Trustee in
his will, may become a trust for many years, and while
the results are a long ways off. the companies which are
making the best impression upon the public to-day
through their advertising will later on, other things be­
ing equal, reach greater results than those which do not
advertise.
The question then is as to the best methods of adver­
tising. This will always be a matter of opinion. One
man holds tenaciously to a style which another regards
altogether wasteful, if not absolutely injurious. Some one




has said that advertising is one of the modern wonders.
The established principles are certainly of a very gen­
eral character and the secrets are hard to discover.
Each company should have some one, preferably an
officer, to attend to all advertising matters, at least so far
as relates to the general policy, in order that he may be
brought to study more carefully the latest methods of
reaching the people. I say preferably an officer, for the
reason that I believe it will greatly promote the best in­
terests of the company to have some one in authority
who appreciates the importance of the subject, under­
stands the policy of the institution and is on an equal
footing with those whom he can consult with greater ad­
vantage than can an employee, or an outside advertiser.
The duty of creating new business is certainly of as
great importance and more difficult than merely execut­
ing the business in hand, and should receive correspond­
ing attention. I have been unable to learn of a single
instance where professional advertisers, not familiar
with Trust Company business, have been able to give
satisfactory results unaided. I can see no reason for this
except that their point of view has been greatly biased
by their experience in handling advertising to sell goods.
Trust Companies do not have goods to sell. They simply
are giving publicity to their stability, their methods and
their terms. In all of this the personal equation is the
largest factor. It is, then, largely a matter of impressing
the public with the personality of the management with­
out seeming to do so.
The public knows an institution through its adver­
tising. Therefore it should be absolutely the best. If the
person in charge of il is unfamiliar with the subject he
will do well to call in one of the best advertisers he can
find as an assistant, expecting to pay him well for his
services; but I believe it is necessary, in order to obtain

TRU ST

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good results, to study the situation independently, and in
a large measure to act independently of his advice. First
of all study the constituency carefully and its point of
view. Different localities and different constituencies
require very different methods. If it is expected to get
the money back that is invested in advertising, with a
fair percentage in addition, it is essential that the details
of the matter receive such careful attention that they
may be considered as being almost on a scientific basis.
Better not advertise if you cannot do this. Each com­
pany has one or two strong talking points. Or at least it
should have.
The company with which I have the good fortune to
be connected has probably one of the best Boards of
Directors of any similar institution. They are well
known leading business men, who are active in the in­
terests of the company. Naturally prominence is given
to this fact in our advertising. It is also well known
that our policy is progressively conservative; hence we
are careful not to do anything to disabuse the public of
this opinion. If we had a fine building of our own we
certainly would let the public know it* as such a build­
ing is undoubtedly a good investment from an advertis­
ing point of view, implying, as it does, permanence.
I am more and more impressed with the fact that we
are best advertised by “ our loving friends,” and that no
expenditure can bring as good results as that which will
secure the class of officers and employees who will make
a favorable impression upon the public with whom they
come in contact. Disregard of the attentions properly
due a customer, or one who may be asking for informa­
tion, costs an institution a great deal more than the time
which should have been expended. This is particularly
true of financial business, and yet how often one notices
want of courtesy on the part of those connected with
such institutions.
The most common form of advertising is through the
publication of the quarterly statements, called for by
the State authorities. It is surprising that so many of
these statements are so cheaply gotten up. If an ex­
cuse for advertising is necessary, certainly here is the
excuse, and it should be worked for all it is worth. At
least once a year the statement should be issued in an
especially attractive booklet form, and made to cover
fully all the features of the business.
Booklet advertising is very desirable for Trust Com­
panies and should receive careful attention. Let the
cover design be done by the best artist obtainable in a
simple, strong and direct style, embodying, if possible,
some distinctive marks which may become known as be­
longing to the company using it as a sort of trade-mark.
Good designs cost money and are worth it. The same
can be said of good paper and printing. Make everything
about a booklet as good as the gold you are trying to
get in trust, and I believe it will pay.
The most important contribution to Trust Company
literature is Mr. Breckenridge Jones’ paper on the “ Trust
Company Question,” which has been used extensively all
over the country and must have brought results when
printed properly. It is difficult to understand how some
of the companies which printed Mr. Jones’ paper in the
poorest manner possible could have expected to make a
favorable impression and to get any returns.
Every Trust Company should issue at least one fine
booklet, covering, in detail, the different features of the
business which it transacts. This can be supplemented
by smaller and less extensive booklets on the different
features taken separately; for example, one on “ Acting
as Trustee Under Wills.” Others on “ Trust Agreements
for the Management of Property,” “ Estates of Minors and
Incompetent Persons,” “ Registration and Transfer of
Capital Stock of Corporations,” g Relating to the Ap­
pointment of a Corporate Trustee Under Mortgages to
Secure Bond Issues,” and under other titles which will
suggest themselves. If Banking, Surety, Title or Safe
Deposit Departments are conducted by the company each




SE C T IO N .

97

should have its separate literature; all preferably in the
same uniform and distinctive style. To get the best re­
sults from Such direct advertising matter requires a
carefully prepared mailing list; the names and addresses
should be placed on cards showing the business connec­
tion, standing &c., of each individual, and with a place
for noting the advertising sent out from time to time.
Mail the general booklet with a carefully worded per­
sonal letter, and if any inquiries result, note the fact on
the address card and send the particular booklet which
fits the case. If no results are obtained in a reasonable
time a letter of reminder will not be out of the way. If
the party is making his wili the result of the advertising
may not be known until his death, years later.
Remember always that cheap, careless and sensational
advertising unconsciously impresses the recipient with
the idea that the company using it has the same char­
acteristics.
Many Trust Companies favor the use of novelties, such
as letter openers, pocket books, etc., the value of which,
considering their large cost, I believe is greatly over­
estimated. Frequently I have asked persons who had
such advertising souvenirs if they knew the name of the
firm on them, and the answer has been very often in
the negative, although the name has been before their
eyes every day. If such things can have some relation
to the Trust Company business and be presented in a
very personal way with attractive printed matter, their
value is greatly increased. •
About three years ago I wished to increase the busi­
ness of our Safety Vaults, which were not doing well,
and hit upon the idea of sending out handsomely litho­
graphed metal boxes, one-quarter the size of a safety
box. In these I inclosed a will envelope and some adver­
tising matter, suggesting that valuable papers be put in
the box and returned to the vaults for Safe keeping. The
details of the scheme were carefully worked out with
the, result that we got our money back several times over
the first year, and are still getting results, making it
necessary to greatly increase the number of boxes in our
vaults. The idea has been adopted by a large number
of other companies. Several of these, however, say they
have not had as much success as we did. Perhaps some
details were omitted, which were essential or the local
condition may have been different.
This year to advertise our general business, which
includes a banking department, we issued a new form of
daily memorandum calendar with different reading mat­
ter for nearly every day. This gave a splendid oppor­
tunity for going into the details of our business and of
keeping our name promptly before the users. These *
were sent principally to attorneys who, by the way, can
do more to influence Trust business than almost any
other class of people. Another Trust Company in Chi-1
cago issues each year for attorneys a very convenient
pocket diary in which information concerning the courts
is printed. Another company gets out a pocket direc­
tory of attorneys with telephone numbers and court rules.
Things of this kind can be of great service, as they come
into daily use.
Newspaper advertising is valuable, and one is
tempted to act upon the principle that if a little is desir­
able a large amount will bring proportionate results; or,
if it is a good thing to advertise once a week, it will be
seven times better and quicker to advertise daily. If
this reasoning is followed the advertising appropriation
will soon equal the income account. I believe it is bet­
ter to treat this class of advertising as part of the neces­
sary auxiliary methods, and to use relatively small spaces
say once or twice a week. In some localities it may be
advantageous as an educator to use reading matter in
the news columns, in order that the public may come
to know and fully appreciate the functions of Trust Com­
panies, and it would seem well that the companies in the
newer fields divide the expense of such publicity.
This paper has already taken more of your time than

98

B A N K E R S ’ C O N V E N T IO N .

it is fair to allow it, although I seem only to have begun
to go into the matter.
I will say in closing, beware of the numerous schemes,
special editions, programmes and things of this char­
acter which are so frequently presented, and are of no spe­
cial value but a considerable expense in the aggregate.
Better leave them alone entirely. Remember to plan your

advertising in advance if possible, and not leave it to be
done on the spur of the moment. Also that Trust Com­
pany advertising must have something in it which is
more than mere cleverness, and that you must at all
times have a clear understanding of the point of view
of possible client and follow the lines of least resist­
ance.

Essentials Required by Trust Companies to be P ut in Mortgages
and Other Paper's.
By A n d r e w S q u ir e , Counsel for Guardian Trust Co., Cleveland, O.

Within the last twenty years Trust Companies have
increased very rapidly, and probably within the next
twenty years will increase in numbers still faster. In
many of the States, as in the State of Ohio, where I re­
side, they are of comparatively recent origin, the stat­
utes, until the last few years, not permitting corpora­
tions to be organized to act as trustees along sufficiently
broad lines to induce their incorporation. As a rule, they
have been so successful and so well managed that they
are fast coming to be recognized as one of the great con­
servative forces in every community where established.
The field which is open to the Trust Company has not
yet been fully determined. Almost every year adds to
its usefulness. While it may be true that large estates
and large trusts may occasionally be better managed by
some individual peculiarly adapted to the purpose, it is
equally true that the average management of estates
and other large trusts by Trust Companies is better than
the average individual management; and the individual
management is liable at any time to be terminated by
the death of the individual, while the management by a
Trust Company should be continuous until the end of
any ordinary trust.
Thus far, there have been relatively few failures
among Trust Companies, and it is exceedingly important
that they should be surrounded at all times with that
careful and judicious control and management which
the law demands of trustees under all circumstances,
and no trust of any character should ever be accepted
by a Trust Company, in the fierce competition for busi­
ness, upon terms which will not insure the bringing to
the management of such trust all of the care and fidelity
required for its proper execution. It is probably a safe
statement to make that the majority of trustees are un­
der paid rather than over paid for services rendered, and
trusts are frequently undertaken that appear plain and
simple, which, before their termination, involve a large
amount of labor and continuous care and anxiety.
Experience has shown that in acting as trustees under
mortgages securing bonds there are certain essentials
which should invariably be insisted upon by the Trust
Company, for its own protection. It is not unlikely that
as our experience becomes greater it may be found
proper and convenient to insist upon others, but it is the
object of this paper to briefly call attention to those
essentials which are being insisted upon by careful ad­
visers of Trust Companies.
It is not the purpose to here refer to the Trust Com­
pany in any sense as a promotor of any enterprise, or as
agent to dispose of any bonds which may be secured by
a mortgage making the Trust Company trustee, for the
Trust Company as a promotor and as a seller of bonds
occupies a different and distinct position from that
which it occupies as a mere trustee.
As a trustee, it is of first importance that the Trust
Company shall not permit, in any mortgage or other
instrument creating it a trustee, any representation as
to the character of security or the priority of the lien,
which may be in any sense misleading. Care should be




taken by the person examining the mortgage, if it be a
mortgage, and the bond which it purports to secure, to
see that the provisions are plain and thoroughly within
the comprehension of the ordinary purchaser of bonds,
who, it may be presumed, is less acquainted with such
instruments and the provisions which they should con­
tain than the examiner for the trustee, and when the
trustee is called upon to certify a bond secured by mort­
gage or trust deed, such certification, it should be thor­
oughly understood, is merely for the purpose of identifi­
cation—that is, to identify the bond as one of the bonds
described in the trust deed or mortgage given for the
purpose of securing them. For a time, and even occa­
sionally now, one sees a certification something like this
upon the bond: “ It is hereby certified that this bond is
one of the series of bonds secured by the mortgage or
deed of trust within mentioned.” The use of the word
i secured ” in this connection has brought some Trust
Companies which inaptly used it into litigation, for the
reason that it was claimed that there was some force to
the word “ secured,” and that the Trust Company’s cer­
tificate certified that there was actually some security
for the bondholders, when in reality there was no such
security, prior mortgages being sufficient in amount to
exhaust the property. In one instance suit was brought
against a trustee using similar phraseology, when the
trustee had failed to record the mortgage and a subse­
quent mortgage was recorded which exhausted the prop­
erty. Happily in this instance for the trustee, the court,
after holding the trustee should be responsible, found
the action had been barred by the statute of limitations.
Careful Trust Companies now confine themselves, in
making such certificates, to a mere identification of the
bond by phraseology substantially as follows: “ It is
hereby certified that this bond is one of the series of
bonds described in the mortgage or deed of trust within
mentioned.”
The Trust Company, as trustee, in accepting the trust,
not only has the right, but it is its duty, to insist upon
the instrument containing such provisions as will limit
its liability and its duties within proper lines. These
limitations are frequently found scattered in various
places through the mortgage, in various phraseology and
covering various conditions, dependent largely upon the
skill, experience and care of the draftsman. No Trust
Company should get into the habit of accepting trusts of
any character without the advice of its counsel, unless
its own officers are thoroughly well acquainted with the
conditions which such instruments should contain, and
even then it is better to have all instruments submitted
to some lawyer in active practice accustomed to papers
of that description. With many Trust Companies in the
East and with several in the West it has become a habit,
and unquestionably a good one, to place the conditions
upon which the trust is accepted all together, immedi­
ately preceding the article of defeasance frequently
placed at the conclusion of the mortgage or deed of trust.
I know of no better way of placing concisely before you
my views upon the essentials required in a mortgage or

TRU ST

CO M PAN Y

deed of trust than to give a substantial copy of the con­
ditions which are now being recommended to Trust
Companies.
“ A r t ic l e ------. The Trustee hereby accepts the trusts and
assumes the duties hereby created and imposed, upon and only
upon the following terms and conditions, to w it:
“ 1st. The recitals of fact herein contained and contained in
the bonds issued under the authority hereof, shall be taken as
statements made by the mortgagor, and shall not be construed
as made by the T rustee; and the Trustee shall have no responsi­
bility as to the validity of this mortgage, nor as to the execution
or acknowledgment thereof, nor as to the amount or adequacy
of the security herein provided.
“ 2nd. It shall be no part of the duty of the Trustee to record
or file these presents as a mortgage of real or personal prop­
erty, or to refile or renew the same, or do any other act for the
continuance of the lien of this indenture, or to give notice of the
existence of the lien hereof, or to extend or supplement the lien
sought to be created thereby; nor shall it be any part of the
duty of the Trustee to effect insurance against fire or other dam­
age to any portion of the property hereby mortgaged, or to re­
new any policies of fire or other insurance, or to keep itself in­
formed or advised as to the payment of rents, taxes or assess­
ments of or upon the mortgaged premises and property, or to
require the payment of such rents, taxes or assessments, but the
mortgagor shall and will perform all acts above mentioned
necessary to fully protect the bonds described herein. The
Trustee may, however, in its discretion, at the expense of the
mortgage, do any or all of the matters and things in this para­
graph set forth, or procure the. same to be done.
“ 3rd. The Trustee may select and employ in and about said
trusts and duties suitable agents and attorneys, whose reason­
able compensation shall be paid by the mortgagor, or, in default
of such payment, shall be a charge upon the hereby mortgaged
property and its proceeds paramount to said bonds, and the
Trustee shall not be liable for any neglect, omission or wrong
doing of any such agents or attorneys, reasonable care being
exercised in their selection ; nor shall it be otherwise answerable,
save for its own willful negligence and default.
“ 4th. The Trustee shall have a lien upon the mortgaged
premises and the proceeds thereof prior and paramount to the
bonds issued hereunder, for its compensation, reasonable ex­
penses and counsel fees, incurred in the performance of said
trust powers and duties or any of them, and the mortgagor
agrees to pay the same, and the holder of each bond issued here­
under assents to such priority of lien.
“ 5th. The Trustee shall be under no obligation or duty to
perform any act hereunder or to defend any suit in respect
hereof, unless first indemnified to its satisfaction, nor shall the
Trustee be bound to recognize any person as a bondholder, unless
his bonds are submitted to the Trustee for inspection, if re­
quired, and his title satisfactorily established, if disputed.
“ 6th. The exclusive right of action hereunder shall be
vested in the Trustee until the refusal of the Trustee so to act,
and no bondholder shall have a right to enforce these presents,
or to bring any action for th at purpose, until after demand
made upon the Trustee, accompanied by a tender of indemnity
satisfactory to it, and refusal of the Trustee to act in accord­
ance with said demand.”

With reference to No. 1, which provides th^t the
Trustee is not bound by the recitals of fact contained
in the mortgage or in the bonds, while that provision is
properly inserted, still a Trust Company should not rely
upon it to permit any obvious misstatements in either
of the instruments referred to. They should be critic­
ally and carefully examined, and, after that is done,
the Trust Company protected by some clause substantial­
ly like the one given above.
The second paragraph, as read, is by no means an
invariable provision, because some mortgages or trust
deeds do not include any insurable property, or do not
include property from which it is necessary to collect
rents. In all cases the paragraph should be modified
to meet the exact situation of the case. Certain it is
that no Trust Company, for the ordinary compensation,
frequently fixed at one dollar per bond, or less, should
think of accepting the responsibility of seeing that any
chattel mortgage is properly recorded or filed or kept
recorded or filed in accordance with the various statutes
of the different States where property is liable to be
located, or to look after the collection of rents, or to
take the responsibility of placing and keeping insurance
upon the property covered by the mortgage. A Trust
Company may assume these duties, all or any of them,
but, in the event it does so, such duties should be as­
sumed understanding^, and compensation commensu­




SE C T IO N .

99

rate with the increased ourdens and liabilities should
be allowed.
As to the fifth paragraph, which provides for indem­
nity to the Trustee before it is obliged to act under the
mortgage or defend any suit in respect thereof, the ne­
cessity and importance of such indemnity is clearly ob­
vious and works no hardship upon bondholders entitled
to demand action on the part of the Trustee.
The fifth paragraph also provides that the Trustee is
not bound to recognize any person as a bondholder unless
his bonds are submitted to the Trustee for inspection,
and his title satisfactorily established, if disputed. Cir­
cumstances have arisen when parties who were not the
rightful owners of bonds have made demands upon the
Trustee, and the Trustee has occasionally been placed
in an embarrassing position because of such demands
and not having the right under the mortgage to require
a production of the bonds and satisfactory evidence of
title. It is the safe rule to have the Trust Company in
a position to require of any one claiming to be a bond­
holder the production of the bonds he claims to own, for
inspection by the Trustee, and if ownership is disputed
to have it satisfactorily established.
The last paragraph, providing that the exclusive right
of action be vested in the Trustee until it refuses to act,
presupposes absolute impartiality on the part of the
Trustee. It frequently happens in practice, especially
with respect to large properties, that various reorganiza­
tion committees are instituted, some in the interests of
majority and minority stockholders, others in the interests
of majority and minority bondholders. Frequently of­
ficers of the Trust Company which is Trustee may act
as members of these reorganization committees; some­
time of more than one of them, and sometimes the Trust
Company itself may even be the holder of bonds: but
the Trust Company, as Trustee, should always, in good
faith, act in any litigation solely in its capacity as Trus­
tee, and when so acting, clothed with the right to act
primarily, it is able to prevent much vexatious litiga­
tion, sometimes brought by separate and individual
bondholders for delay and personal advantage. Cases
do occur in which, over the proceeds of property, or
possibly over the property itself, controversies arise
among bondholders of such a character that the Trustee
should step aside and let the bondholders settle their
own differences, but cases of this kind are exceedingly
rare, and instruments should be so drawn as to protect,
through the Trustee, every individual bondholder upon
precisely the same footing, the Trustee being an agent
for that purpose and clothed with full power to control
all necessary litigation.
Other provisions might be mentioned which are use­
ful, but it has been the aim to name simply those things
which may fairly be considered essential for the Trust
Company to insist upon in accepting a trust under a
mortgage. Some mortgages provide for a majority, or
two-thirds, or tnree-fourths of the bondholders controll­
ing the action of the Trustee in various matters, espe­
cially in declaring the principal of the bonds due on de­
fault and requiring the Trustee to begin and carry on or
discontinue foreclosure proceedings under the mortgage.
Such provisions are really of more interest to the bond­
holder than to the Trustee, but it is an entirely reason­
able provision to have inserted in the mortgage that
some majority of the bonds should be able to control the
maturity of the bonds in the event of default, and should
have a voice in directing all litigation and proceedings
brought by the Trustee. Also the rights of the mort­
gagor and the interest of the various people holding
stock in the mortgagor, if it be a corporation, must not
be lost sight of by the Trustee.
Essentials required by Trust Companies to be placed
in instruments other than mortgages depend upon the
character of the trust created. The only safe rule is to
have every such instrument prepared or approved by
counsel. Provisions which will enable a Trust Com-

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B A N K E R S ’ C O N V E N T IO N .

pany to have its accounts regularly audited and settled
with some one authorized to act on the part of the bene­
ficiaries are useful, so that the Trustee may be free to
devote its entire attention to carrying out the wishes of
the party creating the trust, with the knowledge that its
conduct and administration of the trust will never be
quesioned after having made its regular settlements.

It should be the uniform principle of a Trust Company»,
with all the essentials guarded and protected, to so con­
serve and handle every trust, and at such moderate and,
reasonable compensation, that the profit to the Trust
Company will come from the regular and increasing,
business earned by its record.

The Proper Education o f the Clerical Force o f a Trust Company
with Regard to Promoting the Highest Efficiency
o f the Office Force.
By A r t h u r H e u r t l e y , Secretary of the Northern Trust Company, Chicago, 111.

The question has arisen in my mind: How can the
efficiency of our office force be best promoted? What is
the best method of educating the clerks, so as to ob­
tain the best results? And it was more for the purpose
of obtaining information rather than imparting knowledge
that I suggested this topic to the Programme Com­
mittee.
The life of a Trust Company officer is generally a
busy one. It is filled with detail work, labor more or
less technical in character, and with ever changing prob­
lems that have to be met and promptly decided. It is
not to be wondered at that we sometimes forget we are
responsible to a considerable extent for the training and
welfare of the rank and file who are filling clerical posi­
tions In the company. From the clerks of to-day will
come the officers of to-morrow. Those who now form
the principal parts of the machine will then become its
directors and guide where once they were led. To my
mind the question of educating the clerical staff of our
Company has always been a serious one. We have
made some efforts in that direction, and I have had in
mind for some little time a broadening of our present
plan. We have had prepared a complete set of the vari­
ous forms of books and blanks used in our Trust De­
partment. These forms have been mounted upon heavy
cardboard and the various pages bound together, making
a large volume. These blank forms are arranged just
as they would be. used in the conduct of our business;
specimen entries have been made and carried on through
the entire set, thus enabling any one examining them to
at once see the relation each form bears to the others.
As changes are made in our books or blanks, the new
form is substituted in place of the old one. This book
is placed at the disposal of every clerk, and we have
found it very useful in teaching the junior clerks our
system of accounting.
In addition to this I have had in mind the adoption
of a plan substantially as follows: To have the officers
and clerical force of the Trust Department meet together
one or two evenings each month for the purpose of dis­
cussing topics of interest connected with the business
of the Company; to have a paper presented occasionally
for debate thereon, and in every way to encourage the
clerks to take a prominent part in the proceedings. It
will be desirable, probably, to have some of the meet­
ings more social in their character, with less of business
formality. My idea is in this way to firmly establish
confidence and pleasant relationship between the of­
ficers and employees, to encourage and promote the inter­
est of the clerks in the institution with which they are
connected, and to foster an esprit du corps that will make
every member of our force proud to be identified with
our Company. It is also my desire to have a library
for the use of the clerks, containing books relating to
financial questions as well as upon topics relating to




the work of the Trust Department, and our clerks w ill
be encouraged to freely use this library.
The better knowledge a clerk has of not only his
immediate duties, but of the general working of the in­
stitution with which he is identified and the principlesgoverning the same, the more valuable he becomes and
the better service he will render the Company with which,
he is connected.
It has seemed to me that in many instances there islack of sympathy on the part of the officer with the em­
ployee. The latter is frequently looked upon as a mere
machine, expected to do so many hours of work a day
for a certain compensation, and so long as he does that
work, little attention is paid him. I believe that the
officers of a Trust Company should, as far as it is pos­
sible for them to do so, establish closer personal relations;
with the members of their clerical force than is fre­
quently the case. They should try to win the confidenceof every member of the staff, so that they may feel freeto go to them whenever in trouble or distress. Many a
young man who has found himself in great straits and
has taken a wrong course in the endeavor to better his.
condition, would perhaps have been saved from such a
step had he felt that his superior officer was one to whom
he could carry his burden, with the assurance that he
would find a sympathetic listener—one who would aid.
him in his hour of need.
Two considerations should prompt us to take a per­
sonal interest in the clerks who are associated with us
in the conduct of our respective companies, namely:
Our duty to the Company with which we are identified,
and our duty to those who are striving to climb the sameladder along which we ourselves have made more or
less progress. By elevating the standard of the clericalforce, by increasing their zeal in behalf of the Company
they are serving, by broadening their knowledge of their
work and of its relation to the work, not only of every
other employee, but to the business and policy of the
Company itself, we will be rendering a great serviceto the corporation, the value of which cannot be over­
estimated.
It is one of our duties, it seems to me, to do this, but
it is a duty that in the rush and hurry of business and
in the pressure of a multitude of cares, is often lost
sight of. And do we not owe something to the clerks
themselves, apart from selfish business considerations?
Is it not a part of our duty in this world to aid thosewho are associated with us to win a place for them­
selves?
I feel that these remarks of mine are somewhat dis­
jointed, owing to lack of time in preparing them, as it
was my intention to only throw out a few suggestions
in the hope of receiving information from those present.
I trust, however, that the suggestions that have beenmade will meet with a hearty response and this subject
may be fully discussed, for to me it is a question of great:
practical importance to every Trust Company officer.

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SE C T IO N .

101

Duties o f 1 rustees o f Financial Corporations.
By M r . W il l is S. P a i n e , President of the Trust Company of New York.

Mr. Chairman:
It is a source of gratification to those of us who took
an active interest in the formation of the Trust Com­
pany Section when it was organized at St. Louis that
it has been so successful.
It has been suggested that a practical address might
be of interest upon the duties- of trustees of financial
corporations, more especially in connection with the
examination of such institutions.
It is a remarkable fact while the largest Trust Com­
panies of the United States are located in the city of
New York, such institutions were not examined by the
Superintendent of the Banking Department until the
year 1874. Indeed, previous to that time there were no
general laws applicable to such corporations. All trust,
loan, mortgage, security, guarantee or indemnity com­
panies or associations were operated under the pro­
visions of their respective charters. Some of these char­
ters required reports to be made to the Supreme Court,
others to the Comptroller of the State. It was not until
the year mentioned that these corporations were placed
under the supervision of the Banking Department, and
required to make full reports in writing to it, verified
by the oaths of the officers of such corporations, and
containing such statements as to the condition of their
affairs and business as the Superintendent might re­
quire.
Under the law which I have mentioned the Superin­
tendent was required to examine such corporations per­
sonally or to appoint competent persons to make the
same, to the end that inquiry be made as to the condi­
tions of these corporations, the manner of managing
their affairs, as well as the security afforded to those by
whom its engagements were held.
Perhaps it is not irrelevant to state that during the
first examination the examiners, of which the speaker
was one, reported the condition of three of the Trust
Companies located in the city of New York to the Bank
Superintendent, and those corporations ceased doing
business. Fortunately the depositors of these institu­
tions, to whom there was owing over six million dollars
($6,000,000), were paid in full. During the year 1875 the
two examiners appointed by the Banking Department,
of which the speaker also was one, found the Trust
Companies in a materially improved condition, by reason
of recommendations made by the department to such
corporations during the preceding year.
Experience has shown that seldom has a Trust Com­
pany failed whose last published statement had not in­
dicated a large surplus fund or undivided profits. The
reason is that its trustees have not had the moral cour­
age to charge off bad debts as soon as their collection
is shewn to be practically impossible. One thought
ought always to be borne in mind, that the possession of
ample cash or its equivalent is a sign of prudent bank­
ing. While the interest upon idle capital may be wholly
lost, a trust company that is never embarrassed by an
unexpected demand for money from its creditors, and
which is always prepared to aid its depositors, must
obtain a highly desirable prestige.
Trustees should not rely upon the researches of ex­
aminers rather than their own investigations. Between
the visits of the examiners there may be large embezzle­
ments or misapplications, and in the limited time af­
forded them it is oftentimes impossible to discover
wrongdoing, especially in cases of collusion between
several employees. If trustees were all well informed
as to their duties, and performed the same thoroughly,
failures would be exceedingly rare. The examinations
should be without notice and be for the condition of the
institution at the close of business of a particular day,




the examination commencing either after the close o f
business of that day or before the commencement of
business of the next business day, thereby giving no
opportunity for manipulation of the accounts or borrow­
ing assets for the occasion, and a constant watchfulness,
should be observed that this is net done during the ex­
amination.
The statement of a Trust Company to the Bank Su­
perintendent of the State of New York is in the follow­
ing form:
RESOURCES.
Bonds and Mortgages.
Stock Investments.
Amount loaned on Collaterals.
Amount loaned on Personal Securities, including bills pur­
chased.
Overdrafts.
Due from Directors of the Institution.
Due from Banks.
Due from Brokers.
Real Estate.
Cash on Deposit in Banks or other moneyed institutions.
Cash on hand.
Amount of Assets not included under any of the above heads«
(accrued interest receivable, etc.).
LIABILITIES.
Capital stock paid in.
Surplus Fund.
Undivided Profits.
Deposits in trust.
General Deposits by individuals, associations and corporations»,
payable on demand.
Other liabilities not included under any of the above heads (ac­
crued interest payable, etc.).

Every Trust Company should have a by-law requiring
its Board of Trustees to appoint an Examining Com­
mittee at least once in six months, whose duty it should
be to make a general examination of its affairs, to count
not only the cash on hand, but, what is of much greater
importance, to examine into the amounts stated to be
due from various sources, and to compare its liabilities,
and resources with the balance on the general ledger.
The details of the books tributary to the general ledgershould be examined and footed, and the balances com­
pared with the balance representing the account in the^
general ledger. Failure to compare the amount due de­
positors, as shown by the individual ledger, with that
account in the general ledger, has been a serious
omission in many cases, and thereby defalcations of
years’ standing have remained undiscovered. The items
which make up the cash on hand in the drawer of the
institution should be carefully scrutinized, a fictitious
item sometimes being taken out at the time of the ex­
amination and sent for collection to be returned worth­
less after the examination is over. The original credits,
for items said to be in transit and the letterpress copies,
of the letters remitting the same should be examined,
and their receipt and payment or non-payment ascer­
tained by correspondence. Indeed, correspondence
should be had with every bank and Trust Company for
verification of amounts alleged to be due from or to it.
The general ledger should represent the true condi­
tion of the company, yet there are many cases where it
has not shown such condition. A case in point is that
of a prominent institution which suffered a serious loss.
In this instance the general ledger showed a much lesa
amount due depositors than the individual ledger, cer­
tain amounts deposited not having been entered in the
cash book, but appropriated by the employee taking
certain deposits and making the entries direct, on the
individual ledger, the passbook and the ledger agreeing.
This state of affairs would be revealed by comparisons
as before indicated, and shows the error of the common
supposition that if the passbooks and ledger agree noth­
ing further is requisite, as far as such accounts are con­
cerned. After these necessary verifications of the ac-

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B A N K E R S ’ C O N V E N T IO N .

counts in detail with the amounts in the general ledger,
the hooks being in balance in every particular, there
yet may be concealed some irregularity; for instance,
where an officer of an institution charged a large sum
to profit and loss, crediting the same to bills receivable,
the authority for which could not be shown nor the
bills receivable produced. All entries to the profit and
loss account and the classifications of the profit and
loss account, such as interest, commissions, expenses,
^tc., should be examined and their validity tested. So
many adjudications have been made from time to time
that trustees have their duties plainly defined. If, for
instance, notice of illegal transactions is brought to their
knowledge, and the same are allowed to continue, they




may be compelled to make good any deficiency caused
by such illegality. While it is true that the higher qual­
ities of banking, the skillful management of its affairs,
are of much greater import than the constant scrutiny
into details, each may be valueless without the other.
A constant source of inquiry should be made as to
the conduct and habits of all the employees of the com­
pany.
In conclusion, the custodian of the property of others
should welcome the most careful inquiry as to the con­
dition of his trust, that the result may inure to his
credit, confirming the fact that integrity and ability are
necessary adjuncts to the capital of a financial institu­
tion, co-ordinate with the capital itself.

1

Detailed Report of Proceedings.
Fourth Annual Meeting TRU ST COMPANY SECTION, held at Richmond, October 3.
PR O C E E D IN G S OF M EETIN G .
The Fourth Annual Meeting of the Trust Company
Section of the American Bankers’ Association assembled
in Ihe hall of the Masonic Temple, and was called to
order at 10 o’clock, a. m., by Mr. William G. Mather, of
Cleveland, O.
Mr. Mather said: Gentlemen of the Trust Company
Section: We are unfortunate in not having with us to­
day our Secretary, Mr. Heurtley. Mr. Huertley informs
me by telegraph and letter that he sent all his papers
to us by express—that is, the list of members of the
Section, the Registry Book, the Record Book, and all
the papers which are essential to our meeting. He sent
them on Saturday last, but they have not yet arrived,
and, therefore, we are hampered by their absence, as
well as by his absence, so that if matters seem to go on
somewhat haltingly in the Secretary’s line, I hope you
will excuse it, and remember that it is on account of
these papers not having come to hand, as well as Mr.
Huertley’s absence. Mr. Hale, of Cleveland, has kindly
consented to act as temporary Secretary in Mr. Huert­
ley’s place. We are also very much hampered, I think,
by the absence of our Chairman, Mr. Hodenpyl. I re­
ceived a letter from him about two weeks ago. He was
in Europe at the time he wrote and stated that he ex­
pected to arrive in this country about the middle of Oc­
tober; that he was extremely sorry at his inability to be
present at our meeting, as it was one of the pleasures of
his life, he said, to attend these meetings and meet his
acquaintances in the Trust Company business. He had
hoped that the Convention would not occur so early,
but, of course, having engaged his passage, he was un­
able to change the date of his departure home, as, you
know, there is such a rush of travel back from Europe
this year. So we will also have to get along without
the presence of Mr. Hodenpyl. I wTill ask the Secretary
to call the roll.
ROLL CALL.
Upon a calling of the roll by the Secretary, the follow­
ing members responded to their names:
Edward Hoopes, Secretary and Treasurer the Equitable Trust
Company, of Pittsburg, Pa.
Cecil D. Landale, Vice-President Fifth Avenue Trust Company,
New York.
H. E. Ambler, Trust Officer Royal Trust Company, Chicago, 111.
L. A. Walton, Secretary and Treasurer the Equitable Trust Com­
pany, Chicago.
Henry C. Flower, President Fidelity Trust Company, Kansas
City, Mo.
E E. Hooker, Assistant Secretary International Trust Company,
Baltimore, Md.
Edward W. Moore, Vice-President the Western Reserve Trust
Company, Cleveland, Ohio.
Chas. F. Phillips, Vice-President Corporation Trust Company
of Delaware, New York.
Otho Nowland, Vice-President the Eauitable Guarantee and Trust
Company, Wilmington, Del.
Henry Eitel, President the Union Trust Company, Indianapolis,
Ind.
William A. Carr, Treasurer the Union Trust Company, Pittsburg,
Fa.
Allen T. West, Assistant Secretary St. Louis Trust Company, St.
Louis, Mo.
Joseph W. Day, Secretary and Treasurer Reading Trust Com­
pany, Reading, Pa.
W. E. Coffin, Treasurer Iowa Loan and Trust Company, Des
Moines, Iowa.
E. G. Tillotson, Secretary and Treasurer the Cleveland Trust
Company, Cleveland, Ohio.
E. V. Hale, Secretary and Treasurer the American Trust Com­
pany, Cleveland, Ohio.
John Jaster, Treasurer the State Banking and Trust Company,
Cleveland, Ohio.
William G. Moore, Cashier Trenton Trust and Safe Deposit Com­
pany, Trenton, N. J.




P. C. KaufEman, Cashier Fidelity Trust Company, Tacoma.
Glenn C. Page, Treasurer Wyoming Valley Trust Company,
Wilkes-Barre, Pa.
F. A. Allen, Vice-President Trust Company of Georgia, Atlanta,
Ga.
C. O. Marsden, Jr., Secretary Westchester Trust Company, Yon­
kers, N. Y.
James C. Chaplin, Treasurer Fidelity Title and Trust Company,
Pittsburg, Pa.
F. H. Fries, President Wachovia Loan and Trust Company,
Winston-Salem, N. C.
George W. Lanphear, Treasurer and Secretary Manufacturers’
Trust Company, Providence, R. I.
Vaughn E. Wyman, Treasurer the Pioneer Trust Company,
Painesville, Ohio.
Edgar Stark, Assistant Secretary Union Savings Bank and
Trust Company, Cincinnati, Ohio.
E. J. Parker, Cashier State Savings, Loan and Trust Company,
Quincy, 111.
E. C. Emerick, Treasurer Susquehanna Trust and Safe Deposit
Company, Williamsport, Pa.
Howard K. Wood, Secretary Corporation Trust Company of New
Jersey, Jersey City, N. J.
John E. Borne, President Colonial Trust Company. New York.
Joseph T. Elliott, President Marion Trust Company, Indianapo­
lis, Ind.
Edwin Chamberlain, Second Vice-President San Antonio Loan
and Trust Company, San Antonio, Texas.
Edward H. Reninger, Treasurer Lehigh Valley Trust and Safe
Deposit Company, Allentown, Pa.
William Hageman, Trust Officer the Mercantile Trust Company,
Pittsburg, Pa.
W. C. Lowrie, Secretary and Treasurer Pennsylvania Title and
Trust Company, Pittsburg, Pa.
J. Allen Thompson, Secretary and Treasurer New Jersey Trust
and Safe Deposit Company, Camden, N. J.
W\ T. Howe, Secretary and Treasurer the Safe Deposit and Trust
Company, of Pittsburg, Pa.
Willard V. King, Secretary Continental Trust Company, New
York.
Mord Carter, Secretary and Treasurer Danville Trust Company,
Danville, Ind.
C. F. Gill, American Security and Trust Company, Washington,
D. C.
R. M. Hurd, Assistant Secretary United States Mortgage and
Trust Company, New York.
James A. Parker, Vice-President Old Colony Trust Company,
Boston, Mass.
W. S. McKemie, Secretary and Treasurer Trust Company of
Georgia, Atlanta, Ga.
Henry L. Cabell, Vice-President Richmond Trust and Safe De­
posit Company, Richmond, Va.
D. W. Stehman, Pennsylvania Trust Company, Reading, Pa.
F. W. Egner, Secretary and Treasurer Fidelity Trust Company,
Newark, N. J.
C. F. Enright, Vice-President Missouri Valley Trust Company,
St. Joseph, Mb.
Oscar F. Richardson, Second Vice-President the Trust Company
of New York.
John J. Edson, President Washington Loan and Trust Company,
Washington, D. C.

The Chair: If there are any other gentlemen here
whose names have not been called by the Secretary, and
who have not registered, we would be much obliged if
they would kindly give us their names, so that they
can be properly registered. All having registered, and
the meeting being now open for business, I have the
great pleasure of presenting to you Mr. John Skelton
Williams, of the Richmond Trust and Safe Deposit Com­
pany, who will now address you.
A d d r e s s o f W e lc o m e , b y J o h n S k e l t o n W illia m s.

Mr. Chairman and Gentlemen:
This old city offers you welcome, and it is my pleasant
duty to tell you so. With open and outstretched hands
and from the fullness of hospitable hearts, our people
say to you that we are glad you have come, and we are
proud to receive you as our giiests and friends.
You are your own letters of introduction; the posi­
tions you hold give assurance that you represent in your
respective communities more than money, more than

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B A N K E R S ’ C O N V E N T IO N .

business sagacity and capacity—character and the qual­
ities which command for you the confidence of those
who know you most intimately, that you are worthy
to be trusted with interests, always important and often
vital and sacred.
I suppose I shall not improve my own popularity
just now by good words for anything wearing the name
of Trust. We are in one of the regularly recurring
periods, where in this country it is fashionable amuse­
ment to abuse and accuse you, where all the sins and
evils and misfortunes of individuals and communities
are carefully gathered up and deposited with the banks
and Trusts, by people who usually have little else to
deposit, to be held until the day after election. It is
the time for many orators to invest their surplus of wind
in denunciation of our financial institution, hoping for
dividends in the shape of official salaries. You now ex­
change places with the working man, who is neglected
until the campaign opens. Then he becomes the object
of the warm devotion of our friends, the politicians and
candidates. These gentlemen, who are your admirers
and on social terms with you forty-six months in every
four years, in the last two preceding the battle of the
ballots, discover and denounce your diabolical qualities
and are startled to find you intolerable menaces to the
public peace and welfare.
Yet candor requires me to say, that if you áre evil, as
in these ante-election times you are said to be, you are
necessary and inevitable evils. So far as your part in
the trust system is concerned, I have been puzzled not
so much to know what kind of law could be devised to
exterminate you which seems to puzzle very famous
men—but to imagine how business could be conducted
without you, if you were exterminated. My study of the
subject teaches me that the Trust Company is as natural,
wholesome and healthy an outgrowth of modern com­
merce as the banks themselves, wherein money is stored,
exchanged, dealt in and handled, or the warehouses in
which merchandise is stored, exchanged, dealt in and
handled. The Trust Companies are comparatively few.
A few years ago grain elevators were new. Before that
there was a time when banks were new. Before the
banks came each man who had money made his own
bank by digging a hole in the ground. Trading was done
by direct barter and people ate with their fingers and
knew nothing of the printing press.
There has never been in the history of the world an
improvement in method, a development or a discovery
which escaped hatred, fierce opposition, the sour and
sullen denunciation of that variety of humanity which
instinctively resents the new and regards success as a
personal affront and a badge of infamy. You may cheer
up and feel that you can retain your self respect and
the regard of most of your fellow citizens even if you
do represent Trust Companies in a Presidential election
year. Your institutions have come into being because
the world needed them and will live because they have
become indispensable.
Commerce has outgrown the capacity of the banks,
has developed requirements beyond and aside from their
functions. The Trust Companies meet the new needs
Just as the banks came when holes in the ground and di­
rect barter and private systems of exchange were in­
adequate for the changing conditions and the growing
demands. The banks assemble and concentrate for use
the money of many individuals. You assemble and con­
centrate the strengta of the strong and put it to the lift­
ing of enormous loads, to the propulsion of enterprises
too vast for any group of individuals to attempt. You
furnish machinery to make safe and easy transactions
and undertakings which without you would be cumbrous
dangerous and difficult. You make possible what before
your time would have been impossible.
In the discharge of your multifold duties you become
the long-lived guardian of the fatherless and the wise
protector of the widow and the helpless. As the trustee




for long and enduring Trusts, your services are highly
important and your responsibility immense.
The harm that has been done by Trust Companies is
chiefly in the mouths of the campaign speaker and in
the columns of the newspapers. The good they have
done is expressed in gigantic enterprises created by their
power and impossible without them, in new empires of
wealth and territory, developed, in honest and profitable
employment for many scores of thousands of hands.
It is your work to guard alike and justly the interests
of buyer and seller and to facilitate their intercourse.
Your function is expressed in your name—Trust Com­
panies, things to be trusted—managed and represented
by men who are trusted and deserve to be earning
profits by adequate and essential service.
Holding these opinions concerning you, I have spe­
cial pleasure in bidding welcome in behalf of one of
the country’s oldest and most famous cities to the repre­
sentatives of one of the country’s newest and most
valuable inventions. You will find Richmond a ci]ty full
of history and of hope, with a record of honor, a present
of progress, looking to new growth and glory. She is
hallowed and dignified by the memories of a great past,
all alive and bright and eager with purpose for a yet
greater future. Our welcome to you would in any case
be cordial. It is intensified by the fact that you bring
back here stamped with your approval and honor and with
the indorsement of their new homes, men who went
from this city—one of them chosen by you to maintain
Virginia’s old record as the mother of Presidents.
Some of you come from States whose sons, with their
breasts and bayonets, built around this city a ring of
flesh and fire and steel which for four years encircled
and defended it against the world. Others are from
States whose men spilt their blood in gallant attempts
to storm and break that living wall, so long impregnable,
while Richmond was a hard road to travel. She is an
easy road to travel now, wide open and ready with her
hearty welcome for all alike. We are honored and glad­
dened by your coming. Our earnest hope is that your
work here may be so valuable and your pleasure so
abundant that you will carry away with you memories
of your visit which will be altogether happy.
R e p l y b y Mr. B r e c k i n r i d g e J o n e s t o A d d r e s s o f
W e lc o m e.

Mr. Jones: On behalf of the Trust Company Section
we wish to acknowledge the courtesy which has been
extended to us by the city of Richmond, and to express
our great pleasure in coming to a city of such historic
interest. When we say Richmond, it brings up to our
minds memories different from those which we have
when we go to any other city. When we look at your
monuments we see evidences of a great people, and we
find here a population that is strictly American, with
less admixture of the foreign element, possibly, than we
can find in any other city of this broad land. When we
come to Virginia, the “ Mother of Presidents,” whose
people have been kept free from outside influence in the
way of foreign population, we know that among these
people we will find future Presidents. As we go about
this city, and the battle fields in the vicinity, we recall
what the poet patriot of the South said: “ A land with­
out ruins is a land without history, and a land without
history is a land without memories.” Here in the tide­
water section of Virginia we find a people who have
claimed, and worthily so, to represent the highest ele­
ments of American thought. We are glad to be with
you and enjoy your hospitality, and will take back to
our homes in various parts of the country the sweetest
memories of the visit we have had. [Applause.]
The Chair: The next order of business calls for a re­
port of the Executive Committee, by the Chairman.
R eport of th e E x e cu tiv e C om m ittee.

To the members of the Trust Company Section of the American
Bankers’ Association:
This Is the fourth annual meeting of representatives of the
Trust Companies of the United States. It has been a profitable

TRU ST

CO M PANY

and enjoyable event for us to have in this way flocked together
for one day during the sessions of the Bankers Association, to
discuss those topics which are peculiarly our own. The growth
of our membership is an evidence th a t we appreciate this favor­
able opportunity of enlarging the circle of our acquaintance and
of our friends, for how much more easily, pleasantly and effect­
ively can we transact affairs of importance with friends than
with strangers. Were no other result attained it would be
sufficient to justify these annual gatherings which at the same
time induced many of us to visit sections of our country th at
would otherwise remain unseen. How pleasant, for example, to
be welcomed in this old and beautiful city, which Is fairly redo­
lent with events of surpassing historical and romantic interest.
The great attendance at this convention shows th a t Richmond
has given additional zest to the usual attractions incidental to
the bankers’ meeting.
A few statistics, showing our growth, will not, I am sure, be
out of place at this time, and the following table brings out the
main points of progress :
Membership Trust Company Section: 1897, 114; 1898, 150;
1899, 190; 1900, 253.
Capital and surplus: 1898, $121,547,701; 1899, $162,660,245;
1900, about $204,000,000.
Deposits: 1898, $395,378,262; 1899, $610,634,088; 1900,
about $736,000,000.
Represented in convention: 1897, 30 ; 1898, 24; 1899, 50.
Places of meeting : 1897, D etroit; 1898, Denver ; 1899, Cleve­
land ; 1900, Richmond.
At the Cleveland meeting there was an exhibit of forms used
in accounting, which it was decided to Dublish at an early date.
Mr. Heurtley, our Secretary, who is, unfortunately, unable to be
present, has been working as well as he could, consistently with
his other duties, on this compilation, and expects to have it
ready for distribution before the end of the year. The Executive
Committee has endeavored to follow the practice of its predeces­
sors in preparing the programme so th at problems especially con­
nected with our own field, and of current interest, may receive
careful attention. Suggestions will be welcomed from any one
as to topics suitable for future programmes.
Your committee also desires to emphasize the great advan­
tages to us all of free intercourse between tru st companies, not
only through the medium of these annual conventions, but also
through meeting one another at our respective offices. It would
seem as if the custom prevailing among our most progressive in­
dustrial establishments is quite appropriate to us. I mean the
habit of sending representatives about, because personally acqainted with one another and to study each other’s methods.
The time has passed when it is considered prudent to withhold
such information. No company has a monopoly of brains, and
the largest and oldest can oftentimes learn something of the
smallest and youngest, and thus benefit by freely exchanging
courtesies and information. It is an advantage for us all to be
intelligent, correct and sound in our m ethods; the failure of one
to a greater or less extent reflects upon all, especially if it occurs
through the practice of incorrect ways of doing tru st business.
Such mistakes could often be avoided by such free intercourse
and exchange of information as your committee earnestly recom­
mends.

The Chair: The next order on the programme calls
for a paper on the subject of “ The Duties and Liabili­
ties of Trust Companies Acting as Transfer Agents and
Registrars.” This paper has been prepared and was to
have been read by Mr. Henry J. Bowdoin, Vice-President
of the Maryland Trust Company, of Baltimore, Md., but
unfortunately he is not present. In his place, however,
we will have the privilege of hearing Mr. Cabell, of the
Richmond Trust & Safe Deposit Company, read the
paper.
T h e D u t ie s a n d L ia b ilities o f T r u s t C o m p a n i e s A c t ­
in g a s T r a n sfe r A g e n ts a n d R e g istra r s.

[Mr. Bowdoin’s paper in full will be found on pages 90
to 94 of this S u p p l e m e n t .]
The Chair: This very interesting paper, and whose in­
terest has been added to by its very intelligent reading,
is now before us. The programme allows a discussion
of the papers, and each participant in the discussion is
limited to five minutes, unless further time is allowed by
consent of the meeting. I trust we will have some re­
marks on this very interesting subject, which has been
so ably presented to us.
Mr. John E. Borne, New York: I have been very much
struck by the completeness of the paper as written by
Mr. Bowdoin, and particularly by the dominant keynote,
which is the point of view of the possible or positive
liability of the agent, and I believe that Mr. Bowdoin’s
conclusions are very definite and very clear. I have no
doubt that at some time this particular question will be




SE C T IO N .

105

presented to a court for adjudication of some kind or
other, and it will be found that the relations between
the Trust Company and the issuing company are not
those of principal and agent, but are really those of em­
ployer and employee; and I can only say that his con­
clusions are quite consistent with my own that is, that
the Trust Company has to take on its own shoulders all
the care and heavy responsibility of any possible mis­
takes, any possible misadministration, and must feel,
and must be prepared to be responsible for them. It is,
therefore, a question whether—those being the condi­
tions—it is not the cheapest kind of insurance that prin­
cipal companies can take out, in having the legitimacy
of their stock transactions absolutely insured by the pay­
ment of a small premium. It certainly seems to me that
every Trust Company should be most careful, and should
fully realize its responsibilities in assuming the func­
tions of Transfer Agent, and in not so great a degree
those of Registrar; and should be keenly alive to the fact
that in assuming such an office it is assuming responsi­
bilities that it cannot get away from, and which may
render it liable for heavy loss at some time or another
unless the greatest care is taken in the carrying out of
the functions imposed upon it.
Mr. Willard V. King, of New York: The duties of Regis­
trar are practically the same as those of Transfer Agent.
Certainly the Registrar has no possession of the signa­
tures of the stockholders, and there is no way of verify­
ing the indorsements on the certificates. It seems to me,
therefore, that the limit of responsibility of the Regis­
trar should be to see to the apparent formality of the
issue of new stock—that is to say, see that it is properly
signed and that it is not for a greater number of shares
than have been canceled. Our conception of the duties
of Registrar is altogether confined to that, and we do
not hold ourselves responsible for the correctness of the
signature of the original stockholder. If the Registrar’s
duties are greater than that, certainly the compensation
of the Registrar should be greater than that of Transfer
Agent, but I believe, as a general rule, they are about
half.
Mr. Phillips, New York: Representing a considerable
number of companies, both for transfer and for regis­
tration, the company to which I belong has invariably
adopted as a principle the belief that it would be equally
responsible as Registrar as it would be in the case of
Transfer Agent; and while it knows perfectly well, as
has been stated here, that there have been no decisions
bearing upon this particular point, still it has always
acted on the theory of perfect responsibility, and I agree
with Mr. Borne that we should always have that in view.
It demands a charge beyond that which we receive;
still we ought to live up to that, and be prepared for
anything that may occur.
Mr. Borne: In speaking of the varying responsibilities,
I said that the responsibility of a Registrar was, to my
mind, not so great as that of a Transfer Agent, for the
simple reason that what the registrar is primarily con­
cerned about is to guard against an overissue of stock
and to see that the usual formalities of detail in the issue
of certificates are complied with. In New York, of
course, where we act as Registrar, we have no possession
of the transfer books, and do not in any way, shape or
manner concern ourselves with the duties or responsi­
bilities connected with the transfer, and would not con­
sider ourselves responsible.
Mr. King: There is one point that I wish to ask about,
what the responsibilities of a Transfer Agent are, gen­
erally considered, with respect to a certificate that bears
the name of a man who is dead. In the first place, the
certificate might be in the name of John Smith and be
presented to the Transfer Agent, who knew John Smith
had died. In such a case the custom seems to vary.
We have been advised that the duty of a Transfer
Agent is to refuse to accept the certificate of transfer,
on the ground that it bears a power of attorney, and
all powers of attorney are said to be revokable. There
is some possibility that the power of attorney may have

B A N K E R S ’ C O N V E N T IO N .

106

lapsed. The intention of a man in indorsing his stock
certificate is to govern the Transfer Agent in accepting
it for transfer; and as stock certificates are indorsed for
two different purposes, the Transfer Agent never knows
which of those was in the mind of the indorser. When a
man hypothecates his stock for a loan, he indorses it the
same as he would on a sale of it. If John Smith had
hypothecated his stock for a loan and had indorsed it,,
and the person with whom he pledged it was to take ad­
vantage of his death and claim ownership of the stock
and attempt to have it transferred to his name, there
would be a conversion which would be against the inter­
ests of John Smith’s estate. Should the Transfer Agent
look into that point or not ? I understand that the stat­
utes on the subject are to the effect that a power of attor­
ney on the back of a stock certificate is irrevocable, and
is not affected by the death of the man who signed it;
yet it is perfectly plain that if he pledged the stock for
a loan his estate has an equity in it. Then again, sup­
pose John Smith is dead and his stock certificate is pre­
sented with a power of attorney signed by his executor!
Should the Transfer Agent look into the terms of the
will to see if the executor has power to sell the stock,
or has been commanded to hold it ? On those points the
advice we have had from counsel has varied from time
to time, and I know it has varied in one respect or an­
other from opinions we have gotten from friends in other
trust companies; and I would like to have information
on this subject.
The Chair: Can any one throw light on the questions
asked by the last speaker ? There seem to be no fur­
ther remarks on this subject, and I take pleasure in
calling upon Mr. John E. Borne, President of the Colonial
Trust Company of New York, who will read the next
paper, upon the subject:
T h e P r o p e r C o n se r v a tiv e A ttitud e o f T r u st C o m ­
p a n ie s T o w a r d C orp orate E n te r p r ise s.

[Mr. Borne’s address appears on pages 94 and 95 of
th is S u p p l e m e n t .]

The Chair: This paper is now open for discussion and
comment, and I think it will help us all if each gentle­
man present, as he rises to speak, will give his name and
the company he represents. We do not all know each
other, and we would like to know who speaks.
Mr. Phillips, of the Corporation Trust Company of
Delaware, New York: I have listened with a great deal
of interest to the excellent and highly sensible and time­
ly paper which has just been read, and I agree with the
sentiments that have been expressed. I think that, in
view of the great industrial development of the present
day, and the immense number of schemes that are being
launched almost daily, we cannot be too careful, par­
ticularly in view of the fact that nearly every form of
enterprise is taking the corporate shape, and hence ne­
cessitating the intervention of Trust Companies in every
section of the country; yet in dealing with that highly
legitimate form of enterprise, having always in mind a
proper conservatism, a little liberality in helping them
on to a satisfactory connection with the public might be
very serviceable and very excellent and consistent with
the principle of prudence in business transactions. There
was one remark of Mr. Borne’s, relative to the varying
methods pursued in different parts of the country, which
arises from a defect that ought to be remedied. That
defect is the immense variety of requirements of the
I uav in the different States.
We have a great many
States, and have just as many bodies of corporate law,
and it is very often that Trust Companies, being con­
nected with corporations dealing actively in a great
many States, are forced to encounter many embarrass­
ments on accoxmt of this immense variation. Some
States are unduly liberal and some are oppressive in
their restrictions, and the thought easily presents itself
to any observant mind that it would be worth while for
. a body like ours to make an effort to secure a unification
of corporate law in all parts of the country. A few of




the States have laws that are admirable, and some others
have laws approaching the standard of those States, and
an effort has been made to induce other States to
model their laws bearing on this subject in accordance
with the latest requirements of business, so as to bring
about little by little that unification; but so long as the
power to vary those laws exists it is almost useless to
expect the unification which would be desirable from
every point of view—from the point of view of the Trust
Company, from the point of view of the public, and from
the point of view of the enterprise itself. I have, when­
ever the opportunity has presented, suggested to my
friends the advisability of trying to secure such an
amendment to the Constitution of the United States as
would permit corporation law, in the present extraor­
dinary condition of modern development, to be made
exclusively by the National Government. I know there
are many opposed to that idea, on the score that it would
deprive the States of a part of their sovereign power;
but the States have very cheerfully conceded many
things in view of the absolute necessity of business, and
I think until a change is brought about we shall encoun­
ter a great many difficulties and perplexities. I think it
would be well if this matter were given more thought
than probably it has ever received. I have endeavored
now and again, when I could secure the support of the
leading newspapers, to urge it upon the public, but I
must confess that it has not met with a very liberal or
generous response. I think it is eminently worthy of
consideration, however.
The Chair: This paper is still before you. It is emi­
nently desirable to have an exchange of thought. Even
though the idea that may occur to us does not seem
worthy of very much consideration, yet it may suggest
something else in some other person’s mind; so I urge
you to speak freely anything that comes into your mind
on these papers as they are presented. If there are no
further remarks to be made on this subject, we will
now take up the next address. The next paper was to
be an address by Mr. Henry Russell, of Detroit, Mich.,
but unfortunately Mr. Russell is not here and we will
have to omit that entirely. We will now listen to the
reading of the paper on the subject of “ The Advantages
of Operating Safe Deposit Vaults in Connection with the
Trust Company,” by Mr. William A. Carr, Treasurer of
the Union Trust Company of Pittsburg, Pa.
A d v a n t a g e s o f O p e r a t i n g S a f e D e p o s i t V a u l t s in
C o n n e c tio n w ith th e T r u s t C o m p a n y .

[Mr. Carr’s paper is given on pages 95 and 96 of this
S u p p l e m e n t .]

Mr. E. V. Hale, Secretary and Treasurer the Amer­
ican Trust Company, Cleveland, Ohio: As an illustration
of the advantage of operating safe deposit boxes in con­
nection with Trust Companies, I will state the experi­
ence of our company a short time ago. A renter of one
of our boxes died, and when his box was opened in the
presence of our officers it was found that he had died in­
testate. WTe immediately took steps to be appointed ad­
ministrator of his estate, which we succeeded in doing.
He was a co-executor of his father’s estate, and it de­
volved upon us to act for him in that. By his father’s
will a trust had been created for the benefit of the grand­
children, and we were appointed trustees for the grand­
children. Since then the man’s mother has made her
will and named us as her executor, and his wife has
done the same thing. None of the members of this man’s
family had done any business with us during his life­
time; and we can trace a good deal of business that has
come to us through the renting of that safe deposit box.
Mr. Dechert, Commonwealth Title, Insurance and
Trust Company, Philadelphia: Along the same line of
thought mentioned by Mr. Hale, speaking more from
my experience as a practicing member of the Bar, but
also as a member of a Trust Company of Philadelphia, I
agree with Mr. Hale that benefits seem to come, and
even more largely than he has intimated, from the keep-

TRU ST

CO M PAN Y

ing of safety boxes in Trust Companies. Very few per­
sons as they grow old—I speak more of those in business
life than of those in professional life or connected with
corporations—feel that they can rely fully on individuals
for the safety of their money matters. Let such a person
take a box in a safe deposit company, allied to and di­
rectly a part of a Trust Company, and my own experi­
ence has been that, as the days and the weeks and the
months and the years pass on, the confidence growing
up in the mind of that elderly person gradually increases,
and almost invariably, if the will be made late in life,
that Trust Company will be named as the executor and
trustee. This corporate executorship and trusteeship in
our large cities, and no doubt in many of the smaller
interior cities and towns, is now to a degree occupying
the public mind, but we have little idea how far it will
extend in future years; The sense of security is that
given to people in making their wills, where they pro­
pose a continuous trust, first that the assets will be
safely cared for and maintained, not for one year or a
mere series of years, but for a long series of years, is
being realized; and that can only be done, as we all
know, effectually and safely and continuously, by a
Trust Company. Implant in the mind of the community
that your Trust Company has been for a series of years
a perfectly safe depository of that family’s assets in the
shape of bonds, stocks, jewelry and silverware, and you
have effected a lodgment, as Mr. Hill has suggested, in
the minds not only of that family, but all of its friends,
and as time goes on it will be the case* more so than now,
that the Trust Company itself will be named as executor
and trustee. I suppose in point of fact—I don’t know
how it is where a Trust Company has no competitor;
there it may be a source of profit—but speaking for my
own city, Philadelphia, I think it may be said almost
without exception that, as a mere source of profit, the
safe deposit vaults are not much of a factor. They are
merely maintained as an adjunct in the direction we
have spoken of, and of course in other directions in con­
nection with the banking department; but that a Trust
Company should be maintained for any continuous
length of time without providing conveniences for its
customers, in the shape of boxes in a safety vault, is to
my mind a very undesirable thing; and it seems to me it
would become almost an impossibility—that is to say,
that a very large class of desirable customers would go
to the rival companies.
Mr. Cecil D. Landale, Vice-President Fifth Avenue
Trust Company, New York: In reference to the advan­
tage of operating safe deposit vaults, I would state that
when we opened our company, a little over two years ago,
I know personally that everyday we had to send accounts
away; we could not secure them because we had no safe
deposit vaults. The first question put to us was: “ Have
you safe deposit vaults ? ” And after six or eight
months’ consideration we concluded to put in such a
vault as would answer the requirements of our deposit­
ors. We inaugurated this in June, and since then we
have taken a great number of accounts, simply and
solely because we had the accommodation for the securi­
ties. Apart from any possible profit to be made over and
above the operating expenses, it would be a profitable
feature in conjunction with the Trust Company. As Mr.
Hale says, it leads from one thing to another, and some
day we hope to be as fortunate as he was in the case he
mentioned. [Laughter.]
Mr. Glenn C . Page, Wyo. Valley Trust Company,
Wilkes-Barre, Pa.: The remarks made by Mr. Hale lead
me to ask a question: He says on opening the safe de­
posit box it was found that the man died intestate and
that his company immediately took steps to secure the
appointment as administrator.
The position of the
Trust Company at that period is somewhat like that of
the undertaker, and the niceties of bringing ourselves
before the relatives of the deceased is one of the ques­
tions I want to ask about. How do you do it ? Now
our own attorney is much opposed to our approaching




SE C T IO N .

107

the relatives in any way at a time like that, and we have
to approach them in other ways, and the duty devolves
upon me personally, because he and some of the others
are opposed to it. Now, what I want to know is, How
do you do it ?
Mr. Tillotson: I will say to the gentleman that he
has no idea of the sharp competition existing in Cleve­
land; and the way we do is, that the one who gets there
first gets the business. In this case Mr. Hale was the
first man in. [Laughter.]
Mr. W. S. McKemie, Secretary and Treasurer Trust
Company of Georgia, Atlanta, Ga.: I am glad the gen­
tleman asked that question. We have been in existence
some years, but have never fully developed our re­
sources. As the season approaches when what we call
the “ 400 ” of our city migrate every year, we write
them personal letters, and in that way get possession of
their jewelry, silverware and other valuables. Then we
keep a standing advertisement in the daily papers, aug­
mented occasionally by circulars to the different people,
and when we hear of the serious illness of some promi­
nent person we keep our eyes open and try to approach
some of the relatives incidentally. As the gentleman
says, it is a very “ touchous ” question. In other words,
when you think of the solemnity of the occasion it does
look like a trespass to approach the relatives with
reference to business; but, on the other hand, they are
generally so taken up with the illness that they have no
mind to devote to business, and we have been thanked
by them for calling such matters to their attention.
The Chair: Are there any more interesting experi­
ences to relate on this subject ? If not, we will pass
to the next paper, “ Trust Company Advertising,” by Mr.
Richard L. Crampton, of the Northern Trust Company,
Chicago. Mr. Crampton has sent his paper here, with
a letter which I will read, or at least that part of it
relating to the particular matter. He says: “ I send you
herewith my paper on ‘ Trust Company Advertising,’
which is on the programme for Wednesday. I regret ex­
ceedingly that for business and personal reasons I am
unable to be present at the meeting, and will have to
ask you to find some one to read it for me. I will greatly
appreciate it if you will have mention made that I do
not consider myself in any sense an advertising expert,
and that my work here is only incidental to my regular
duties in connection with my management of the Real
Estate Department, we not having as yet considered
advertising of sufficient importance to devote more time
to it. I think, however, the time is coming when a sepa­
rate department will be given to this work.” I have
asked Mr. Stanton, of New York, to read this paper for
us.
T r u st C o m p a n y A d vertisin g.

[Mr. Crampton’s paper will be found on pages 96 to
98 of this S u p p l e m e n t .]
The Chair: Gentlemen, this paper is now open for
discussion and comment.
Mr. H. E. Ambler, Trust Oflacer, Royal Trust Com­
pany, Chicago: We have been greatly interested in the
comparative value, by way of financial return—that is, of
the repeated advertising of our name, business functions,
capital stock, etc., such as newspaper advertising and
street car advertising, and that of the publication of
important bits of information such as we can gather
together in booklets. We find, from our own experience
at least, that the latter method is much the best—that is,
it brings us a larger acquaintance comparatively than
the first method. We attempted to collaborate the dif­
ferent officers of the bank in compiling the booklets
which are issued, giving the very best of our knowledge
and experience, and putting it in as condensed a form as
possible, with the idea that the people who read these
booklets would think of other things they want to ask,
and they invariably return to us for further information,
giving us an enlarged acquaintance, and bringing us
more forcibly before their minds than repeated adver­
tising seems to do. The former method has the advan-

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B A N K E R S ’ C O N V E N T IO N .

tage of having been used for a greater length of time, but
it seems to require a great many years of this repetition,
on the principle that constant droppiug of water will
wear away the hardest stones, to make any impression
on the public mind—at least any apparent impression,
such as we ourselves can follow up. I think the deduc­
tion to be drawn from that—at least by Western com­
panies, where we have to bring ourselves forcibly before
the attention of people who have grown up with the
Eastern companies, is to bring ourselves before them in
the way of valuable information, giving it in the shortest
possible form.
Mr. E. G. Tillotson, Secretary and Treasurer the Cleve­
land Trust Company, Cleveland, O.: It has been my ex­
perience that in advertising we should advertise to reach
certain' classes of people. It is obvious that a statement
that we act as registrar and transfer agent for corpora­
tions, etc., etc., is all right for the people who know about
that business; but there are numbers of people who don’t
know what a transfer agent is. I dare say twenty per
cent. of the bankers in attendance at the Richmond Con­
vention don’t know what a transfer agent is. I was
asked last night by a prominent banker of Pennsylvania
what the duties of a trust company were. [Laughter.]
Mr. Ambler has recently issued a little booklet called
the “ Royal Road,” which is the cleverest piece of ad­
vertising I have seen. I suppose it is addressed more
especially to young people to show them the advantage
of taking care of their money, and learning the royal
road to wealth. It is humorous without being flippant,
and it is right in the line of the advertising that has been
successful in Cleveland and in St. Louis that I know of.
Mr. Glenn C. Page, Treasurer Wyo-Valley Trust Com­
pany, Wilkes-Barre, Pa.: I assure you that the bankers
in Wilkes-Barre know what the trust companies are for,
if they are from Pennsylvania, [Laughter.]
Mr. Edwin Chamberlain, Second Vice-President San
Antonio Loan & Trust Company, San Antonio, Texas:
I have listened to the reading of the paper with a great
deal of interest, because our company has just opened
and we are putting up a very large building there, be­
lieving, as one of the gentlemen has stated, that is a
good advertising feature. The suggestions made here
are very profitable, and I believe that, in the South and
West especially, we have to educate people to a great
-extent as to what trust companies are. We have had
some trouble, however, to convince our directors that
advertising is profitable to trust companies, but I believe
that when I go back, fortified with the facts I have lis­
tened to here, I will have no difficulty in convincing them
that advertising will pay us in the end.
Mr. Dechert, Philadelphia: Having been connected
with our company from its beginning, some thirteen or
fourteen years ago, I have acquired some familiarity
with this matter of advertising, and I think it is a mat­
ter, as suggested in Mr. Crampton’s paper, belonging
more particularly to the Secretary of the Company. That
officer certainly ought to be assigned the duty, so that
he may restrict or enlarge the volume of advertising, as
the company’s needs may require. But there are a few
observations that I desire to make at this moment. There
is a great waste by all of us in printing. One-half of the
printed matter we all send out is wasted. Every man
knows that when he opens his mail in the morning his
waste paper basket is half full of circulars and other
printed matter which have been thrown there without
even being glanced at; and, unfortunately, there is no
sale for waste paper now, so that it is of no benefit
either to the ones who send the circulars or those who
receive them. There are but few people to whom it is
worth while sending such matter—I mean the quarterly
and yearly statements, matter contained in special cir­
culars and the like—and those few people are the stock­
holders and the depositors. From my own experience,
and unfortunately it is true in many cases, I know the
depositor often feels a warmer interest in the success and
progress of the trust company than many of the stock­




holders to whom we send statements every six months.
But anything of that sort going into the hands of stock­
holders or depositors is apt to be kept; sending it to the
general public, however, is, I believe, pretty much equiva­
lent to throwing it into the waste basket. Now how is
the general public to be reached ? My experience has
been that it can only be done through the daily, semi­
weekly or weekly newspapers. I believe newspaper ad­
vertising is worth a dozen times what it may cost in
circulars, for this simple reason, that the advertisement
in the newspaper is read—or, at least, the paper is read—
by an average of five persons in a family, and we all
know how often those papers are preserved; and if you
insert your advertisement in the Saturday paper, to a
great many persons that paper is a Sunday paper. I
have a theory that the evening papers are worth more
as advertising mediums than the morning papers. Busi­
ness men have no time in the morning to read; we sim­
ply read the head-lines, and very seldom anything else;
we generally wait until the evening, when we go to our
club or to our home, and if there be an evening paper
published in our town or city we are pretty sure—espe­
cially in the winter time—to make a thorough reading
of it, and sometimes, in the mere dearth of reading matter
often find ourselves guilty of reading all the columns, no
matter how immaterial or indifferent the matter may
be. A reader becomes familiar with the name of your
company in this way. You may not be able to trace
money directly from any one newspaper in that way,
but it will finally come. And I would not be a partisan;
that is, I would dot only advertise in the paper of my
own party politics, but would be entirely non-partisan
in my advertising, so that, finally, the whole of your
county and the tributary counties will become entirely
familiar with the name of your company, its objects and
purposes, and then you have done as much as you could
expect to do. You have all been solicited at times to
advertise in special editions ; that is mere waste of
money, I think. The promoter says it is only $25, or only
$50, as if that were the only demand being made on
your company. We have learned to turn them down,
and I believe that with more of these special matters
turned down there would be more money left in your
treasury. Only last week, Mr. Borne, there was a news­
paper man from your city in our office who safd he repre­
sented the “ Caricaturist.”
Mr. Borne: Yes, he visited me.
Mr. Dechert: Did he? Well, I suppose there are
some he has not got around to yet. If there are, and
they want to meet him, I will furnish him with their
names. His proposition is that one or more of the
executive officers of the Trust companies shall con­
tribute from $50 to $100 and be caricatured as the officer
of the Trust Company.
Mr. Borne: And you can select your own attitude?
(Laughter.)
Mr. Dechert: Yes, any one who is prepared to be cru­
cified for the sake of his company, and pictured as a
man with a big head and little legs, or big legs and a lit­
tle head (laughter), has an opportunity to do so. Now
all special advertising, in my opinion, as I said a moment
ago, is a mere waste of money.
Mr. John Jaster, Treasurer State Banking and Trust
Company, Cleveland, O.: I have listened with great in­
terest to the paper of Mr. Crampton, and consider it a
very able one. He starts in by saying he don’t know
very much about advertising, and hasn’t done very
much, but I think he understands the subject first rate;
and in addition to what he says, I want to impress upon
the members here that I believe one of the very best
ways of advertising is, when you get a customer, to
treat him so that he will advertise the institution and
the men connected with- it. In Cleveland there is a
clothing firm who use this motto on their advertising
matter: “ If we please you, tell others; if we do not, tell
us.” I think that goes a great way. I know bankers
frequently make efforts to get customers, and by some

TRU ST

CO M PAN Y

kittle thoughtless treatment lose them. I believe that
•every one, from the President and the Board of Direct­
ors down to the least important clerk, should under­
stand his business and also the wants of the customers
of the institution, and treat them accordingly. I think
if that was looked into a little more by the banks, that
would advertise their business.
Mr. F. H. Fries, President Wachovia Loan and Trust
Company, Winston-Salem, N. C,: I listened attentively
to the gentleman from Philadelphia (Mr. Dechert), who
spoke of newspaper advertising. Now in a large city
that may, and I have no doubt does, do a great deal of
good, but I have very grave doubts in my own mind as
to the good accomplished by newspaper advertising in
the country. For myself, I am not able to trace much, if
any. I want to ask for the experience of others in work
■done, particularly in country districts, as well as in the
cities, whether or not they find newspaper advertising
is really profitable to them? I would like to hear from
those who have had some experience along that line.
Of course, I do not mean special editions—we all know
they don’t pay—but daily and weekly editions of news­
papers.
The Chair: The next topic on our programme is en­
titled “ Talks.” The first subject is, “ Essentials Re­
quired by Trust Companies to be Put in Mortgages and
Other Papers.” , This is to be presented to us by Mr.
Andrew Squire, of Cleveland, O., counsel of the Guardian
Trust Company, Cleveland, O.
Mr. Squire: I put my talk in a paper, preferring to
present it in that way.
» E ssen tials R e q u ir e d b y T r u s t C o m p a n i e s to b e P u t
in M o r t g a g e s a n d O t h e r P a p e r s .

[Mr. Squire’s address is printed on pages 98 to 100
■of this S u p p l e m e n t .]
Mr. James C. Chaplin, Treasurer Fidelity Trust Comipany, Pittsburg, Pa.: Mr. Chairman, that paper by Mr.
Squire is one that we would all like to read, and I would
-suggest that it be printed, so that every member of the
'Trust Company Section can have a copy.
The Chair: I will state that all these papers will be
printed in the record. The next feature of the pro­
gramme is a paper by Mr. Arthur Heurtley, who, as you
•know, is not here. He has sent on the paper to be read,
and its subject is, “ The Proper Education of the Cleri­
ca l Force of a Trust Company with Regard to Promot­
ing the Highest Efficiency of the Office Force.” The
paper will be read by Mr. Hale, of Cleveland.
"The. P r o p e r E d u c a t i o n o f t h e C l e r i c a l F o r c e o f a
T rust Com pany.

[Mr. Heurtley’s remarks will be found on page 100
•of this S u p p l e m e n t .]

The Chair: Mr. Heurtley’s paper is on a very im­
portant subject—or so it seemed to the committee when
it was selected—and I would like very much to hear
ethers discuss it.
Mr. Phillips: The spirit dominating the paper of Mr.
Heurtley is, of course, entirely akin to that expressed in
the various remarks and suggestions at our meeting
yesterday, tending to provide some system of education
for the clerical forces of the various banks and Trust
Companies of the country. If the project of the Ameri­
can Bankers’ Association, as a whole, is carried out, of
■course the suggestions of Mr. Heurtley will be largely
met, and the Trust Companies, quite as well as the
banks, should labor to the ends suggested in yesterday’s
-report. The matter has been tried, and has been proved
>in practice to be not only feasible, but eminently ad­
vantageous. I chance to be a Fellow of the London In­
stitute of Bankers, and that Institute has devised a
most successful scheme, similar to that suggested by
Mr. Heurtley, and our friends at the meeting yesterday.
Series of lectures by the most eminent financiers, and by
counsel of ^various banks in London and throughout
Great Britam, are constantly given at fixed periods. The



S E C T IO N .

109

Journal of Bankers undertakes to answer promptly any
question that may arise in the mind of any bank clerk.
A library is established in St. Clement’s Lane, open to
all who choose to become connected with the Junior In­
stitute of Bankers, and they have there a very large
and well appointed library, where they can acquaint
themselves with all matters pertaining to their work.
Many other things connected with that idea are carried
out so perfectly and thoroughly, that we have there an
example which we may readily follow to our advantage,
and we, representing the Trust Companies, should, as I
have said, work very cordially with the banks along this
line.
The Chair: Is there anything further to be said along
the line of Mr. Heurtley’s paper? If not, the programme
is concluded, with the presentation of a paper by Mr.
Willis S. Paine, President of the Trust Company of New
York, on the subject of “ The Duties of Trustees of Fi­
nancial Corporations.” Mr. Paine not being present, his
paper will be read by Mr. Oscar F. Richardson, VicePresident of the Trust Company of New York.
T h e D u tie s o f T r u s t e e s o f F in a n cia l C o r p o r a tio n s.

[We give Mr. Paine’s paper in full on pages 101 and
102 of this S u p p l e m e n t .]
The Chair: There is a report here of the receipts and
disbursements of Mr. Heurtley. I will ask Mr. Hale to
give you the footings of them.
Mr. Hale: The total amount of cash received was
$989.84; the amount of expenditures, $1,083.49. In excess
of the amount received, $93.05.
ELECTION OF OFFICERS.
Mr. Dechert: Under the by-laws* it becomes our duty
now before we adjourn to elect officers to fill the respec­
tive offices for the terms expiring to-day. Under the pro­
vision of the by-laws, those gentlemen are not eligible to
re-election, it being proposed to keep up a succession of
office holding, so to speak, that there should be renewed
interest from year to year. Mr. Hodenpyl, Chairman of
the Section, as we have already learned, unfortunately
could not be here to-day by reason of his absence in
Europe. I wouid move that the Chairman of the Section
be Mr. William G. Mather, President of the American
Trust Company, of Cleveland, the gentleman who has
now the honor of presiding at this meeting. [Applause.]
t,Mr. Phillips: I second the motion.) Mr. Dechert: As
Mr. Mather is a modest man and would not like to put
the motion, I will do so myself.
Mr. Mather: I think there should be an opportunity
for other nominations.
Mr. Dechert: That is true. Are there any other nomi­
nations? There being none, all in favor of the election
of Mr. Mather as Chairman for the ensuing year will
please say aye, opposed, no. Mr. Mather is unanimously
elected.
Mr. Mather: Gentlemen of the Trust Company Sec­
tion: I thank you very much for the honor and compli­
ment you have paid me, and the company and the city I
represent. It certainly gives me very great pleasure to
meet here at these gatherings, and I shall endeavor to
transact the duties of Chairman for the ensuing year to
the best of my ability. I thank you, gentlemen. [Ap­
plause.]
Mr. Borne: The office of Vice-Chairman having to be
filled, I should like to nominate for that position Mr.
John Skelton Williams, the President of the Richmond
Trust and Safe Deposit Company. (Seconded.)
The Chair: Are there any other nominations? If not,
I will put the question. All in favor of the election of
Mr. John Skelton Williams as Vice-Chairman of this
Section will please say aye,- contrary minded, no. Mr.
Williams is unanimously elected.
Mr. Jones: On the Executive Committee those who
retire are Mr. Dechert, of Philadelphia; Mr. Abbott, of
Boston, and Mr. Borne, of New Yorki I will say that
Mr. Borne has not been a member of the Committee, ev-

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B A N K E R S ’ C O N V E N T IO N .

cept to fill a vacancy during this last year, and it was
discussed at the time and thought that would not dis­
qualify him for re-election; and as there has been an im­
pression by a number of gentlemen on the Executive
Committee that it would be very desirable to have Mr.
Borne as Chairman of the Executive Committee for next
year, I wish to place him in nomination for that com­
mittee; also Mr. Hodenpyl, of Grand Rapids, Mich., who
has been a member of the Section and active participant
in all proceedings since it started. Following a prece­
dent that has obtained from the start, that the retiring
Chairman should be placed on the Executive Committee,
in the hope of retaining in that way the knowledge of
the history of the Association, I would like to nominate
Mr. Hodenpyl for a place on that committee; and in
place of Mr. Dechert, of Philadelphia, I will nominate
Mr. William A. Carr, of Pittsburg.
Mr. Dechert: I second the nominations made by Mr.
Jones.
The Chair: You have heard the nominations: Mr.
John E. Borne, of New York; Mr. Anton G. Hodenpyl,
of Grand Rapids, Mich., and Mr. William A. Carr, of
Pittsburg. Are there any other nominations? If not, all
in favor of the election of those three gentlemen to serve
on the Executive Committee for the next three years will




please say aye, contrary minded, no. They are unani­
mously elected.
The Chair: Before adjourning the meeting I will ask
all those who have read papers to kindly turn them in to
the Secretary, if they have not already done, so, in or­
der, that they may be incorporated in the record and pub­
lished in the usual form, and they will then be dis­
tributed to all the members of the Trust Company Sec­
tion. I would request all those who have not yet reg­
istered to please do so, so that we may have a record
of all in attendance. I think there is no further business
before the meeting and a motion to adjourn will now be
in order.
Mr. Jaster: Do I understand that all the officers have
been elected. Has the Secretary been elected?
The Chair: The Secretary is appointed by the Ex­
ecutive Committee, who will have a meeting immediately
after we adjourn.
On motion the meeting then adjourned.
M E E T IN G

O F E X E C U T IV E

Winslow, Lanier & Co.,
17 Nassa u S t r e e t ,

NEW YORK,

BANKERS.
D E P O S IT S

R E C E IV E D

S U B JE C T

TO

D RAFT.

IN T E R E S T A L L O W E D ON D E P O S IT S .
S E C U R IT IE S BO U G H T A N D SO LD
O N C O M M IS S IO N .
Act as Fiscal and Transfer Agents.
Also as Agents for Corporations, for the payment of interest and
dividends.
F oreign Exchange , L etters

of

C redit .

/
/

C O M M IT T E E .

After adjournment a meeting of the Executive Com­
mittee was held, and Mr. John E. Borne elected Chair­
man and Mr. James R. Branch Secretary.

/
s
/