Full text of Commercial and Financial Chronicle : October 15, 1910 : Bankers' Convention Section, Vol. 91, No. 2364

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GKNFRAL

LIBRARY}

U1NIV. OF

MICU^

171910

TWO

SECTIONS—SECTION

TWO

financial

ranirlp

Bankers’ Convention
SECTION

CONTAINING REPORT OF THE

Convention of American Bankers’ Association
/

Held at LOS ANGELES,

OCTOBER 4, 5, 6 and 7, 1910.

INDEX TO THIS SECTION
Page.
EDITORIAL ARTICLES—
BANKERS AND CURRENCY...
HISTORY LOS ANGELES BANKS
FRISCO BANKING GROWTH. ..
BANKING SECTION-

COMMERCIAL VIEW OF CUR’CY..
PACIFIC COAST AND CURRENCY.
BANKRUPTCY LAW
BANKER AS PUBLIC SERVANT.
SOUTHERN VIEW OF CURRENCY.
THE MONETARY COMMISSION.
REPORT OF SECRETARY
REPORT OF GENERAL COUNCIL.
REPORT OF TREASURER
PROTECTIVE COMMITTEE

For Index to

page.
BANKING SECTIONFIDELITY BONDS

146

REPORT EXECUTIVE COUNCIL... 148
BILLS OF LADING COMMITTEE.. 149
REPORT ON EXPRESS CO.’S
153

121
123

130

140

STANDING LAW COMMITTEE
CURRENCY COMMISSION
LEGISLATURE COMMITTEE
DETAILED PROCEEDINGS
TRUST COMPANY SECTIONPREPARED ADDRESSES...

DETAILED PROCEEDINGS
SAVINGS BANK SECTIONPREPARED ADDRESSES
DETAILED PROCEEDINGS

Advertisements see pages

154
154

155
157
X77
19a
20a
aao

119 and 120

October 15, 1910.
WILLIAM B. DANA

COMPANY, PUBLISHERS.

Front, Pine & Depeyster
Copyrighted In 1910, according to Act of Congress,

by WILLIAM B. DANA

Sts., New York.
COMPANY, In office of Librarian of Congress, Washington, D. 0.

CHARTERED 1836

GIRARD

TRUST

COMPANY

PHILADELPHIA, PA.

CAPITAL AND SURPLUS,
-

Acts

$10,000,000

Executor, Trustee, Guardian, Administrator, Assignee

and

Receiver, also

Depositary under Plans

Reorganization, and
for Individuals

Assumes

entire

“At the

Financial Agent

Corporations.

charge of Real Estate, allows

Deposits, and Rents Safes
B.

Interest

Burglar-Proof Vaults.

MORRIS, President

Gateway of the Great Southwest**

Mississippi Valley Trust Company
ST. LOUIS
DIRECTORS

JOHN I. BEGGS, President Milwaukee Light, Heat
and Traction Co.

WILBUR F. BOYLE, Boyle & Priest

JAMES E. BROCK, Secretary
MURRAY CARLETON, President Carleton
Dry
Goods Co.

CHARLES CLARK
HORATIO N. DAVIS, President Smith & Davis

Mfg. Co.
JOHN D. DAVIS, Vice-President
DAVID R. FRANCIS, Francis, Bro. & Co.
S. E. HOFFMAN, Vice-President
BRECKINRIDGE JONES, President
W. J. McBRIDE, Vice-President Haskell &
Barker
Car Co.

WILLIAM G. LACKEY, Vice-President »
NELSON W. McLEOD, President German
Institution

SAUNDERS NORVELL, President

Savings

Norvell-Shap-

leigh Hardware Co.
ROBERT J. O’REILLY, M. D.
WM. D. ORTHWEIN, President Wm. D. Orthwein

/ Grain Co.
HENRY W. PETERS, President Peters Shoe Co.
H. CLAY PIERCE, Chairman Board Waters-Pierce
Oil Co.

AUGUST SCHLAFLY, August Schlafly & Sons
R. H. STOCKTON, President Majestic Mfg. Co.
JULIUS S. WALSH, Chairman of the Board

ROLLA WELLS

Six

Efficiently Organized Departments

CAPITAL, SURPLUS AND

PROFITS OVER

$8,000,000

Wm. A. Read &
Bankers
,v*

•

25 Nassau Street, New York
V..'

Dealers in

Municipal, Railroad and other
Investment Securities.
List of
Current Offerings upon application
Members of the
New York, Chicago and
Boston Stock Exchanges.

BOSTON
19

Congress Street

BALTIMORE
203 East German Street

CHICAGO
240 La Salle Street

LONDON, E. C., 5 Lothbury

WINSLOW, LANIER & CO.
59 Cedar Street, New York

BANKERS
y

Act

Deposits Received Subject to Draft
Interest Allowed on Deposits
Securities Bought and Sold on Commission

Also

Fiscal and Transfer Agents

Agents for Corporations, for the

payment of interest and dividends

FOREIGN EXCHANGE, LETTERS OF
t

(

CREDIT

Brown Brothers Sc Co.
59 Wall Street, New York
4th and Chestnut Streets,

Philadelphia

60 State Street, Boston
AND

ALEX. BROWN & SONS
Baltimore and Calvert Streets, Baltimore

ALL CONNECTED BY PRIVATE WIRE

Members of the NEW YORK, PHILADELPHIA, BOSTON &
BALTIMORE STOCK EXCHANGES

Execute Orders

Commission for Purchase and Sale

of Stocks, Bonds and all Investment Securities.

BILLS OF EXCHANGE BOUGHT AND SOLD

Arrangements made with Banks and Bankers in the
United States enabling them to Issue their own Drafts
on Foreign Countries.
Commercial Letters of. Credit and Travelers Letters
Credit issued, available in all parts of the world.
International
Collections made

Cheques.

points; Telegraphic Transfers
of Money made between this Country and Europe.
on

Deposit Accounts of American Banks, Bankers, Firms
and Individuals received on favorable terms.
Certificates of Deposit issued payable on demand or at a
stated period.

Brown, Shipley & Co.
FOUNDER’S

COURT, LOTHBURY, E. C.

SPECIAL OFFICE FOR

TRAVELERS, 123 PALL MALL, S. W.

LONDON

The NATIONAL
UNION BANK

of MARYLAND
AT BALTIMORE, MARYLAND
Capital,

$1,000,000

Surplus aid Undivided Profits, Net,

$*23,42134

WILLIAM WINCHESTER, President
ROBERT A. DIGGS, Cashier

MILTON B. WILLIAMS,!As8t. Cashier
DIRECTORS

WM. WINCHESTER, President.
WM. A. MARBURG, Capitalist.
H.
CRAWFORD
BLACK, President of the Black,
Sheridan & Wilson Co., Wholesale Coal Dealers.
R. BRENT KEYSER, President Board of Trustees
Johns Hopkins University.
EDWIN G. BAETJER, of Venable, Baetjer & Howard,

ROBT. K. WARING, President Central Savings Bank.
CLARENCE W. WATSON. President Consolidation Coal

Co.,

President

Somerset Coal Co., President Fair*
Coal Co.
E. STANLEY GARY, of Jas. S. Gary & Son, Mannfacturers of Cotton Goods.
EDWARD P. GILL, of Wm. D. Gill & Son, Lumber
merchants.
mont

Attorneys-at-Law.

ACCOUNTS AND CORRESPONDENCE SOLICITED

Excellent connections for collecting items on Southern Atlantic Coast Cities'and
States, at rates depending upon balances maintained by correspondents with us.

HARVEY FISK
& SONS
62 CEDAR STREET, NEW YORK

United States Bonds
MUNICIPAL, RAILROAD
AND

OTHER

INVESTMENT

SECURITIES

Clark, Dodge & Co.
(Established 1847)

Transact

general banking and in=

vestment business.
Dealers

high

grade

Railroad

Bonds.
Act

fiscal agents for
’

■

corporations.
'

;

Negotiate security issues of Rail*
roads.

Statistical

information

furnished

Trustees and Investors.

New York City

51 Wall Street

24-26 Pine Street, NEW YORK

AGENTS FOR

SPEYER BROTHERS
LAZARD SPEYER-ELLISSEN
GEBR. TEIXEIRA de MAl’lOS
-

London

Frankfort °/M
Amsterdam

Union Trust Company
YORK

NEW

CHARTERED 1864

Uptown

Main

Branch:

Office:

425 Fifth

80 Broadway

Avenue

Surplus $7,737,279.10

Capital $1,000,000.00

Total Resources $71,945,002.88
OFFICERS
EDWIN

G. MERRILL, President

JOHN V. B. THAYER, Vice-President and Secy.
CARROLL C. RAWLINGS, Trust Officer
T. W. HARTSHORNE, Asst. Secretary

AUGUSTUS W. KELLEY, Vice-President
EDWARD R. MERRITT,

Vice-President

HENRY M. POPHAM, Asst.

Secretary
M. MYRICK, Asst. Secretary

HENRY

TRUSTEES
H.

VAN
W.

RENSSELAER

KENNEDY,

BMLEN ROOSEVELT,

AUGUSTUS W.

KELLEY,

N. PARKER SHORTRIDGB,
HARRISON E. GAWTRY,
CHARLES H.

TWEED,

JAMES

AMOS P.

SPEYER,

WILLIAM

JAMES

WOODWARD,

FREDERIC

BLISS,
deP.

KING,

M. ORMB WILSON.

S. CARHART,

WALTER P.

GORE

EDWIN G. MERRILL,

JOHN V. B. THAYER,
AMORY

ENO,

ADRIAN ISELIN, JR.,

ROBERT WALTON GOELET,

V. EVERIT MACY.

FOSTER,

Mercantile Trust

Company

Equitable Building

New
CAPITAL

York:

■

•

■

SURPLUS and UNDIVIDED PROFITS (earned)

over

$2,000,000
$7,450,000

DIRECTORS
John Jacob Astor
Paul D. Cravath*
Thomas De Witt

Clement A. Griscom
Edwin Hawley

J. Roosevelt Roosevelt

Alvin W. Krech

Clendenin J. Ryan
Mortimer L. Schiff*
T. P. Shonts

Henry W. de Forest*
Chauncey M. Depew
John F. Dryden
Rudulph Ellis

John J. McCook

J. J. Slocum

Gates W. McGarrah*
Robert Mather
Paul Morton*

Valentine P.

Edwin Gould

William C. Poillon

George J. Gould*

George L. Rives

William A.

Cuyler

James J. Hill

Day

Snyder*

Gage E. Tarbell
John T. Terry*
Harold B. Thome
S. Davies Warfield

Executive Committee

OFFICERS
JOHN T. TERRY

Vice-President
Vice-President
Vice-President

WILLIAM C. POILLON
HAROLD B. THORNE
GUY RICHARDS
GEORGE W. BENTON
-

Secretary
Treasurer

BETHUNE W. JONES
HARRY N. DUNHAM
HORACE E.
ISAAC MICHAELS

Assistant

Secretary

Assistant Treasurer
Auditor

Trust Officer

Securities held in Trust for Individuals,
$15,253,000
Securities held in Trust for Corporations,
$808,154,000
Trustee under existing Corporate Mortgages, $
1,643,340,000
Transacts

general Banking and Trust Company business. Allows interest
on
daily balances. Acts as Executor, Administrator, Trustee, Guardian,
Committee, Receiver, Transfer Agent, Registrar, Depositary, Fiscal
Agent of Corporations, and in all other representative
a

capacities.

«rc*1

CHARTERED

WALL

I IN

STREET,

1830

NEW

YORK

Accepts Trusts created by Will or otherwise. Manages property
Agent for the owners. Allows interest on deposites payable after ten days’
notice. Legal Depository for Executors, Trustees and Money in Suit.

Grants annuities.
as

Accepts only Private trusts and declines all Corporation or

other Public trusts

HENRY PARISH. President
Z. W.

WALTER KERR, ist Vice-President
HENRY PARISH, Jr., 2d Vice-President
S. M. B. HOPKINS, 3d

van

ZELM, Asst. Secretary

IRVING L. ROE, Asst.

Secretary

J. LOUIS van ZELM, Asst. Secretary
JOHN C. VEDDER, Asst. Secretary

Vice-President

GEORGE M. CORNING, Secretary

TRUSTEES

Chas. G. Thompson

Joseph H. Choate

Henry Parish

Samuel Thome

Frederic W. Stevens

John L. Cadwalader
Augustus D. JuilHard

Stuyvesant Fish
Edmund L.

Henry Lewis Morris

Baylies

George G. DeWitt

Geofge S. Bowdoin

Cornelius Vanderbilt

Henry C. Hulbert

John McL. Nash

Henry A. C. Taylor

John Claflin

C. O’D. lselin

Cleveland H. Dodge
Thomas Denny

W. Emlen Roosevelt

Lincoln Gromwell
H. Van Rensselaer

Paul Tucker man

Kennedy

Eugene E. Osborn

John Jacob Astor

Corner Stone of the Old

United States Branch Bank.

Placed in the Trustee’s Room of the New York Life Insurance

•

and Trust Company in 1888.

STATEMENT
Made to the Banking Department of the State of New York at the close of business, on August 31, 1910.
ASSETS
LIABILITIES.
Real Estate
$ 2,545,028.89 Capital
$ 1,000,000.00
Bonds and Mortgages
3,847,574.80
Surplus Fund and Undivided Profits
Loans on Collaterals
4,544,165.00
Bills Receivable
Cash on Deposite
Cash in Company's Vaults
Accrued
Interest, Rents,

Account,

1,048,348.60
5,500,000.00

Suspense

Value)

382,373.52

Life Insurance Fund

1,082,298.18

Bonds and Stocks (Market

3,936,371.16
39,036,049.32
2,263,129.53

(Market Value)
Deposites in Trust
Annuity Fund

16,069,334.71

Interest Due

12,822,501.33

Depositors, Taxes, &c...

841,327.98

$47.459.25151

$47,459,251.51
9

HORNBLOWER & WEEKS
Members New York, Boston and Chicago Stock

DIRECT

Exchanges

PRIVATE WIRES

INVESTMENT SECURITIES

HORNBLOWER

BOSTON, MASS.
60 Congress St.

WEEKS

BUILDING,

NEW YORK
42

Center St.

MAPLEWOOD

152 Monroe St.

Majestic Bldg.

HARTFORD, CONN.
49

CHICAGO

Broadway

DETROIT
NEW H AVEN.CONN.

BOSTON

Pearl St.

NEWPORT, R. I.
33

HOTEL, WHITE

Bellevue Ave.

PROVIDENCE. R.
10

Weybosset St

MOUNTAINS, N. H.

CENTRAL TRUST COMPANY
«*

OF NEW YORK

No. 54 WALL

CAPITAL
SURPLUS

STREET

$ 3,000,000
15,000,000
1,124,819

UNDIVIDED PROFITS

Allows interest
Is

deposits, returnable on demand, or at specified dates.

legal depository for money paid into Court.

act as

Executor, Administrator, Guardian, or

position of trust.

Is authorized to
in any other

Also as Registrar or Transfer Agent

of Stocks and Bonds,

and

Railroad and other

Trustee for

Mortgages.

J. N. WALLACE, President,
E. F. HYDE,

B. G. MITCHELL,
D.

M. FERGUSON, Secretary,

Vice-President,

OLCOTT, 2d, Vice-President,

F. B. SMIDT, Asst. Secretary,

C. P. STALLKNECHT, Asst. Secy.

BOARD OF TRUSTEES
GEO. MACCULLOCH MILLER,

SAMUEL THORNE,

CHAS.

CORNELIUS N. BLISS,

ADRIAN

A. D.

JAS. N. JARVIE,

E. F.

WILLIAM A.

HENRY

READ,

JAMES N. WALLACE,

ISELIN, JR.

HYDE,
EVANS,

DUDLEY OLCOTT, 2d.

LANIER,

JUILLIARD,

JAMES SPEYER,
HENRY D.

BABCOCK,

DUDLEY OLCOTT.

Redmond &€o.
33 Pine Street, New York

624 Fifth Avenue, New York

507 Chestnut

General Foreign and Domestic

Street, Philadelphia

Banking Business

Make’i. arrangements with
banks and bankers, where¬
by they can draw their own
direct drafts,
on

any

principals,

banking city of the

world.

Issue
Letters • of Credit
and

Travelers’ Cheques
Payable all
over

the Globe

Open
Commercial Credits
in favor of

American Importers

Foreign Bills of Exchange
and Cable Transfers

REDMOND

BUILDING,

PINE

STREET,

NEW

YORK

Investment Securities
Act

fiscal agents, and make loans to railroads and cor¬
porations. Receive accounts subject to sight-draft, and allow
interest on credit balances.
Execute commission orders.
as

Members New York Stock

Exchange

SAN FRANCISCO

NEW YORK

WASHINGTON, D. C

Capital and Surplus

Service at Home

$6,£00,000

and Abroad

60 1WALL STREET, NEW

YORK

President

THOMAS H. HUBBARD

Sir

Allan

Montagu

Julea S.

Bache
LONDON

Guy Cary
Maroellus

Hartley
S.

James

Dodge

Fearon

Haley Fiske
Edwin

Hawley

Lionel Hagenaers
John

William G.
Erskine
John

HONGKONG

Hegeman
CANTON

Henshaw
Hewitt

Hubbard

Thomas H. Hubbard

Henry E,
John

Huntington

J.. McCook

McIntosh

Henry P.

George H.
Pierre

Henry S.
Paul
Allan

Macy
Mali

Manning
Morton

Paige

Henry Clay Pierce
William

COLON

William

Salomon

Hermann
William

Read

Sielcken

Taylor

(Canal Zone)

Sir William C. Van Horne

and

Exchange of every description
Special facilities in connection with

Exports and Imports
13

ORGANIZED AS NEW YORK GUARANTY AND INDEMNITY
COMPANY IN 1864

Guaranty
Trust Company
of NEW YORK
MAIN OFFICE

28 Nassau Street, New York
3TH AVENUE BRANCH

LONDON OFFICE

3th Ave. and 43rd St., New York

33 Lombard St., London, E. C.

Statement, August 31, 1910
RESOURCES
Bonds and Mortgages
Public Securities
Other Securities
Loans and Bills Purchased
Cash on Hand and in
Banks
Due from Foreign Banks
and Bankers, Etc.
Accrued Interest and
Accounts Receivable

.....

LIABILITIES

$552,800
14,535,369
43,255,477
44,904,728

00
48
07
58

^Capital Stock
Surplus

Undivided Profits

34,923,226 02

Deposits

21,161,331 36

of the Fifth Avenue Trust
Company
of the stock of this
Company are

Foreign Acceptances

ALEXANDER J.

stock having

HEMPHILL, President

WM. C.

18,000,000 00
3,143,925 96

127,684,065 99

559,819 68
6,925,072 55

$161,312,884 18

unissued, but

MAX MAY, Vice-President
H. M. FRANCIS, Vice-President

$5,000,000 00

Accrued Interest Payable

1,979,951 67

*2,437 shares

$161,312,884 18
1.218% shares

passed

will be issued at

to this
early date.

merger
an

Company,

the

equivalent

CHARLES H. SABIN, Vice-President
LEWIS B.

FRANKLIN, Vice-President
LANDALE, Manager, 5th Ave. Branck
E. C. HEBBARD,
Secretary
F. C. HARRIMAN, Assistant Treasurer
WALTER MEACHAM, Assistant
Secretary
J. I. BURKE, Assistant Trust Officer
C. D.

EDWARDS, Treasurer

JAMES M. PRATT, Assistant Treasurer
W. F. H. KOELSCH, Assistant
Secretary
F. J. H. SUTTON, Trust Officer
ED I

LEVI P. MORTON, Chairman
DANIEL GUGGENHEIM
EDWIN HAWLEY
ALEXANDER J. HEMPHILL

CHARLES H. ALLEN
GEORGE F. BAKER
EDWARD J.

URBAN H.
EDMUND
T.

BERWIND

BROUGHTON
CONVERSE

WALTER S. JOHNSTON
AUGUSTUS D. JUILLIARD
THOMAS W. LAMONT

DeWITT CUYLER

HENRY

JAMES

P.
B.

DAVISON

EDGAR

DUKE

PAUL

IVIED

MoGARRAH
MORTON

rvi
ARTHUR

A. PEABODY
WILLIAM H. PORTER
SAMUEL REA
DANIEL G. REID
THOMAS F. RYAN

CHARLES H. SABIN
WILLIAM D. SLOANH
VALENTINE P. SNYDER

MARSTON

GATES W.

ROBERT W. GOELET

CECIL FRANCIS PARR

CHARLES

HARRY PAYNE WHITNHY
ALBERT H. WIGGIN

O CD IS/irs/l IT'"T
JOHN

FRASER,

Chairman

ROBERT CALLANDER

WYSE

KNICKERBOCKER
TRUST COMPANY
Fifth Ave. & 34th St.
Lenox Ave. & 125th St.

NEW

Transacts

Third Ave. & 148th St.

YORK

Broadway

CITY

General Trust

Company Business, Issues Letters of Credit,
Accepts Management of Real and Personal Property, Collecting
Income and Remitting as Directed. Safe
Deposit Vaults at all offices
a

DIRECTORS
BENJ. L. ALLEN, Vice-Fres. of the Company.
G. LOUIS BOISSEVAN, New Tork City.

CHARLES F. HOFFMAN, New Tork City.
J. HORACE HARDING, Charles D. Barney A Co., Banker*.
WIIXIAM B. JOTCE, President National Surety Go.
CHARLES H. KEEP, President of the Company.

FREDERICK G. BOURNE, New Tork City.

FRANKLIN Q. BROWN, Redmond & Co., Bankers.
EDWARD H. CLARK, Manager Hearst Estate.

SAMUEL T. PETERS. William A Peters, Coal Merchants.
WILLIAM A. TUCKER, Tucker, Anthony A Co., Bankers.
PAYNE WHITNET, New Tork City.

LEWIS L. CLARKE, President Am. Exchange Nat. Bank.
H. RIEMAN DUVAL, President American Beet Sugar Co.

FOUNDED 1050

Blake Brothers & Co.
50

Exchange Place

14 State Street

NEW YORK

BOSTON

Dealers in Commercial

Paper

and all issues of

Mew York

City Bonds

LISTS SENT ON APPLICATION

INVESTMENT SECURITIES BOUGHT AND SOLD

Members of New York and Boston Stock

Exchanges

inequitable

TRUST COMPANY
0 OF NEW YORK 0
15

NASSAU STREET

SIS FIFTH AVENUE

Capital, $3,000,000
ALVIN W.

Surplus, $10,000,000

KRECH, PRESIDENT.

LAWRENCE L. GILLESPIE, Vice-President
FREDERICK W. FULLE, Vice-President

H. MERCER WALKER, Treasurer
RICHARD R. HUNTER, Assistant Secretary
LYMAN RHOADES, Secretary
HERMAN J. COOK, Assistant Treasurer
GEORGE M. STOLL, Assistant Treasurer
TRUSTEES

C. F. Adams, 2nd
C. B. Alexander

William H. Crocker

Edwin Gould

Thomas DeWitt
William A. Day

CuylerThomas H. Hubbard
Harry Bronner
Edward T. Jeffery
Urban H. Broughton M. Hartley Dodge
Bradish Johnson
Robert C. dowry
John F. Dryden
Otto H. Kahn

Frederic R. Coudert
Paul D. Cravath

Frederick W. Fulle

Alvin W. Krech

Lawrence L. Gillespie Leonor F. Loree

Paul Morton

Ralph Peters
Winslow S. Pierce
Lyman Rhoades
Valentine P. Snyder
William H. Taylor

Henry Rogers Winthrop

Accounts of Banks, Bankers, Corporations and
Individuals received upon favorable terms.
Domlgnatod depositary for

raserwa

of Mow York State banka and treat companion

LATHAM, ALEXANDER & CO.
BANKERS
AND

COTTON COMMISSION MERCHANTS
43-49 EXCHANGE

PLACE, NEW YORK

CONDUCT A GENERAL BANKING BUSINESS
Accounts of Banks, Bankers, Merchants and Individuals received on favorable
terms, and Interest allowed on Daily Balances, subject to check at sight

COTTON CONTRACTS

FOR FUTURE DELIVERY

BOUGHT AND SOLD ON COMMISSION

Shoemaker, Bates & Co.
BANKERS

OFFICES:

BRANCH

500 Fifth Ave.,

Hotel Waldorf, N. Y. City

N. Y. City

MEMBERS

YORK

NEW

CHICAGO

UPON

SENT

SECURITIES

INVESTMENT

AND

EXCHANGES

STOCK

LIST

STREET

WALL

37-43

APPLICATION

UNITED STATES MORTGAGE 6 TRUST COMPANY
YORIC

NEW

OFFICERS
JOHN

W. PLATTEN,

CALVERT BREWER,

JOSEPH

HENRY

Vice-President.

RASMUS, Vice President.

CARL G.
FRANK

ALEXANDER PHILLIPS,

President.

PARSONS,

MIDDLETON, Assistant Secretary.

VICTOR

ADAMS, 'Treasurer.

EHRLICHER,

HARRY

Vice-President.

Secretary.

SERVOSS, Assistant Treasurer.

HADLEY,

Assistant

Secretary.

Assistant Treasurer.

DIRECTORS
JAMES G.

CANNON.

LEWIS L.

CLARKE.

HENRY

CHARLES A.

COFFIN.

THOMAS DE

WITT CUYLER.

GUSTAV

CHARLES

WILLIAM
ALLEN

ROBERT

ICKKLHEIMER.

WILLIAM

HAYS.

CHARLES

A.
E.

JAMISON.
KISSEL.

DICKEY.

LOUIS C. KRAUTHOFF.

DIXON.

ADOLPH

FORBES.

GRANNISS.

LEWISOHN.

CLARENCE H.

MACKAY.

ROBERT OLYPHANT.

55 Cedar Street

JOHN

PLATTEN.

MORTIMER
HENRY
EBEN

SCHIFF.

TATNALL

THOMAS.

JAMES TIMPSON.
ARTHUR TURNBULL.

CORNELIUS VANDERBILT.
PAUL M.

WARBURG*

CAPITAL,

8th Avenue and 125th Street

$2,000,000

SURPLUS,

Broadway and 73d Street

$4,000,000

CHARTERED

1853

45 and 47 WALL STREET
CAPITAL,

$2,000,000.00

SURPLUS AND UNDIVIDED PROFITS,

EDWARD W.
WM. M.

SHELDON, President.

KINGSLEY, Vice-President.

WILFRED J.

13,733,303.21

HENRY E. AHERN,

WORCESTER, Asst. Secretary. CHARLES

Secretary.

EDWARDS, 2d

Asst. Secretary.

TRUSTEES
JOHN A. STEWART, Chairman of
W.

Bayard Cutting,

William Rockefeller,
Alexander E. Orr,
William H. Macy, Jr.,
William D. Sloane,

Gustav H. Schwab,
Frank Lyman,

the Board.

Lewis Cass

Ledyard,
Lyman J. Gage,
Payne Whitney,
Edward W. Sheldon.
Chauncey Keep,

James Stillman,
John Claflin,
John J. Phelps,

George L. Rives,
Arthur C. James,
William M. Kingsley,
William Stewart Tod,
Ogden Mills,
Egerton L. Wintlirop.

The

Standard Trust Company
of New York

25 Broad Street

New York, N. Y.
Capital and Surplus, $2,400,000

JOHN T. ATTERBURY.
FRANCIS S. BANGS.

WILLIAM M. BARRETT,
ALEXANDER H. DE HAVEN
SAMUEL M. FELTON.
PLINY FISK.

WILLIAM

LANE,

President.

EDWARD M. F. MILLER,
Treasurer.

WILLIAM SALOMON.
BASIL W. ROWE.

DIRECTORS
WILLIAM D. GUTHRIE.
FAIRFAX HARRISON.
GARDINER M. LANE.
WILLIAM C. LANE.
E. M. F. MILLER.
john g. McCullough.

CHARLES

PACK.

JOHN S. PHIPPS.
HENRY W. PUTNAM,
JR.
BASIL W. ROWE.
WILLIAM SALOMON.
CHARLES F. SMILLIE.

JOHN A. SPOOR.
Henry l. sprague.
LOUIS L. STANTON.

CHARLES STEELE.

FRANK K. STURGIS.

NATHANIEL THAYER.

OFFICERS
FRANK K.

STURGIS,

LOUIS L. STANTON,
2nd
Vice-President.

1st Vice-President.
CHARLES M. BILLINGS,

Secretary.

BRAINERD
Asst.

•

BULKLEY,
Secretary.

EXECUTIVE COMMITTEE

PLINY PINK.
WILLIAM D. GUTHRIE.

FRANK K. STURGIS.
CHARLES STEELE.

WILLIAM

C. COX,
Vice-President.
ZELAH /VAN LOAN,

Asst.j Secretary.
LOUIS L. STANTON.
WILLIAM C. LANE.

INTEREST ALLOWED ON DEPOSITS
SUBJECT TO CHEQUE
ACTS AS

Trustee of Corporation
Mortgages
Fiscal Agent for Corporations and Individuals
Transfer Agent and

Registrar
Depositary under plans of reorganization
Executor, Administrator, Guardian, Trustee, Receiver,
Attorney and Agent

The Mechanics
and Metals National Bank
OF THE CITY OF NEW YORK

Surplus $6,000,000

Capital $6,000,000

WALTER F.

GATES W.

ALBERTSEN, Vice-Pres.

McGARRAH, Pres.
ALEXANDER E. ORR, Vice-Pres.

JOSEPH S. HOUSE, Cashier.

NICHOLAS F.

ROBERT U. GRAFF, Asst Cash.

PALMER, Vice-Pres.

ANDREW A. KNOWLES, Vice-Pres.
FRANK O. ROE, Vice-Pres.

JOHN ROBINSON, Asst. Cash.
CHARLES

MILLER,

Asst. Cash.

Depository of the United States, State and
City of New York

IRVING NATIONAL EXCHANGE BANK
CONDITION—Sept. 1st, 1910

ASSETS

Immediately Available
Cash in vault and checks for clearings
Due from Correspondents and Demand

Available Within 30 Days
Loans due in 30 days
U. S. and other Bonds
Other investments

Loans

$7,994,008.92

6,472,605.68 $14,466,614.60
3,414,987.98
2,406,555.35
206,400.00

Other Loans and Discounts
Due within 4 months
Due after 4 months

6,027,943.33

7,084,213.09
3,815,219.24

10,899,432.33

$3L393,990.26

LIABILITIES

$2,000,000.00
1,655,100.24

Capital
Surplus and Profits

800,000.00

Circulation
deposits

|Banks

12,852,858.05
OFFICERS:

26,938,890.02

$31,393,990.26

Lewis E. Pierson, President
Harry E. Ward, Cashier
James E. Nichols, Vice-President
David H. G. Penny, Assistant Cashier
Rollin P. Grant, Vice-President
Richard J. Faust, Jr., Assistant Cashier
Benj. F. Werner, Vice-President
J. Franklyn Bouker, Assistant Cashier
West Broadway and Chambers St., New York.

THE

LIBERTY

NATIONAL BANK
OF NEW YORK
OFFICERS

DIRECTORS

FREDERICK B. SCHENCK

GEO.

President

BAKER.

FREDERICK

DANIEL G. REID

Vice-President

HENRY P.

ZOHETH S. FREEMAN

ZOHETH

Vice-President

CHARLES W. RIECKS
2d Vice-President and

BOURNE.

CONVERSE.
DAVISON.

FREEMAN.

GILLESPIE.

FRANCIS L.

HINE.

ARTHUR F. LUKE.

Cashier

ROGERS MAXWELL.

FRED’K P. McGLYNN

AMBROSE

MONELL.

Asst. Cashier

CHARLES

HENRY S. BARTOW
Asst. Cashier

DANIEL

FREDERICK

HENRY P. DAVISON
Chairman Executive Commit¬

CHARLES
HENRY

tee

CHARLES

MOORE.

REID.

SCHENCK.

STOUT.

TINKER.
H.

WARREN.

Capital, Surplus and Profits, $3,700,000.00
No. 374

FIRST NATIONAL BANK
OF JERSEY

CITY, N. J.

DESIGNATED DEPOSITORY OF THE UNITED STATES

Capital,
Surplus and Net Profits,
Deposits,
-------

$400,000.00
$1,240,269.78
$9,002,992.08

OFFICERS

GEORGE T. SMITH, Pres.

ROBERT E. JENNINGS, Vice-Pres.

EDWARD I. EDWARDS, Cashier
DIRECTORS
Hamilton Wallis,
Charles Siedler,

George T. Smith,

Robert E. Jennings,
Edward L. Young,

Wm. H. Corbin,

Henry E. Niese,
Edw. I. Edwards.

William P.

Bonbright & Co.

BANKERS
Members New York Stock
LONDON
16

George St.

Mansion House, E. C.

Exchange

NEW YORK

COLORADO SPRINGS
COLORADO

24 Broad St.

INVESTMENT SECURITIES
Electric Bonds and Stocks
The Securities of

Specialty

carefully selected Gas and Electric Companies in

growing Western cities and towns combine in an unusual degree the
elements of safety of principal and high interest yield, with excellent
promise of appreciation.
List of current offerings furnished upon request.

FIDELITY

TRUST COMPANY
NEW YORK

COMMENCED BUSINESS MAY 22. 1907

Capita) and Surplus,
Dividends paid,
Undivided Profits, Aug. 31, 1910,
Deposits,
Aug. 31, 1910,
Total Resources,
Aug. 31, 1910,

$1,500,000.00
$97,500.00
$210,000.00
$6,800,000.00
$8,500,000.00

•

SAMUEL

WILLIAM

JOHN

CONOVER

President

ANDREW

STEPHEN

VIELE

Vice-President

NIX

ARTHUR

MARS

Vice-President

....

BARNARD

Assistant

MELLEN

Secretary
Secretary

Trust

Officer

YOUR NEW YORK BUSINESS IS CORDIALLY INVITED

MARKET

The

FULTON

and

NATIONAL BANK OF NEW YORK
ORGANIZED

1852

Capital
$1,000,000

Progressive

Surplus

Conservative

and

Profits

Successful

Alexander

$1,700,000

Gilbert

President

Accounts

Robert A. Parker

Received

Vice President

the

Thomas J. Stevens

Most Liberal

Cashier

Terms

John H. Carr
Asst. Cashier

consistent

W. M. Rosendale

with Sound

Asst. Cashier

Banking

THE PHENIX NATIONAL BANK OF THE CITY OF NEW
YORK
NASSAU,

COR.

LIBERTY

ST.

OFFICERS
DIRECTORS

F. E. MARSHALL, President
ALFRED M. BULL, Vice-President
B, L. HASKINS, Cashier

AUGUST

Clark, Dodge & Co.
GARY, Chairman Board U. S.
Steel Corp’n.
R. IT. HIGGINS.
Harvey Fisk & Sons.
HENRY K. POMROY,
Pomroy Bros.
EDWIN A. POTTER,
Capitalist.
ELBERT H.

H. C. HOOLEY, Assft Cashier

Capital,
$1,000,000
Surplus and Profits, $725,000
.

1% Interest Paid
1% Interest Paid

on
on

BELMONT, August Belmont Co.

E. W.
BLOOMINGDALE, Capitalist.
ALFRED M. BULL,
Vice-President.
D. CRAWFORD CLARK.

WM. PIERSON
HAMILTON,
& Co.
GEO. E. ROBERTS,

EDWARD

Morgan

Capitalist.

SHEARSON, Shearson, Hammill Co.
D. UNDERWOOD, Pres. Erie

FREDERICK

R. R. Co.
ROBERT P. PERKINS, Pres.
Hartford Car¬
pet Corp.
PIERRE S. DU PONT, Treas. E. I.
du Pont
de Nemours Powder Co.
FINIS E. MARSHALL,

Bankers’ Balances
Time Deposits

President.

THE

Coal

Iron National Bank

and
OF

CITY

THE

NEW YORK

$1,000,000.00
400,000.00

Capital
Surplus and Profit© (Earned)

JOHN T. SPROULL, President
A. A.

DAVID TAYLOR, Vice-President
H. J. DORGELOH, Assistant Cashier

LISMAN, Vice-President

ADDISON H.

DAY, Cashier

Association

Member New York Glearlng |ltou©e

SEABOARD
18

NATIONAL
OF THE

BANK

CITY OF

NEW

YORK

Broadway and 5 Beaver Street
S. G.

CAPITAL

BAYNE,

President

S. G.

NELSON,

Vice-Proeident

$1,000,000

C. C.

THOMPSON,
Cashier

W. K.

CLEVERLEY,

Asst.

L. N.

DeVAUSNEY,

Asst.

SURPLUS aid PROFITS

Cashier

*•

J. C. EMORY,
Asst.

0. M.

$1,965,000

Cashier

JEFFERDS,

Asst.

Cashier

DIRECTORS
•

Samuel G. Bayne
Edward C. Bodman

Joseph Seep
Edw. H. R. Green
T. Wistar Brown
Stuart G. Nelson
Franklin
Quinby
Charles Lathrop Pack
Frederick H. Eaton
Wm. W. Lawrence
Herbert H. Hewitt
Charles C. Thompson

DEPOSITS

$30,000,000
WE INVITE YOUR

ESTABLISHED

ACCOUNT

1829

Merchants Exchange National Bank
Of the City
257

of New York

BROADWAY

PHlNEAS C. LOUNSBURY, President

EDWARD V. GAMBIER, Cashier
E. TILDEN MATTOX Assistant Cashier

KIMBALL C. ATWOOD, Vice-President
EDWARD K. CHERRILL, Assistant Cashier

ACCOUNTS OF BANKS, BANKERS,

MERCHANTS AND MANUFACTURERS SOLICITED
23

Capital

$1,250,000

Surplus and Undivided Profits
$1,854,000
Deposits

$14,100,000

OFFICERS
JOHN M. ELLIOTT

President

Vice-President
Vice-President
Vice-President

Vice-President

STODDARD JESS
W. C. PATTERSON
JOHN P. BURKE

JOHN S. CRAVENS
W. T. S. HAMMOND
A. C. WAY
E. S. PAULY

:
Cashier
Assistant Cashier
Assistant Cashier

:
:

E. W. COE

A. B. JONES

Assistant Cashier
Assistant Cashier

Los Angeles Trust

Savings Bank

(Owned by the Stockholders of the First National Bank)

Capital

$1,250,000

Surplus and Undivided Profits
Deposits

$625,000

$6,900,000

OFFICERS
1.

MOTLEY

FLINT

J.
.

DRAKE

Vice-President

H. W. O’MELVENY, Vice-Pres. and Counsel
JAY SPENCE
Cashier
RALPH DAY
Ass’t Cashier

President

WELLINGTON CLARK
LEO S. CHANDLER
H. W. UNDERHILL
E. L. WISDOM
.

Vice-President

Trust Officer
Ass’t Trust Officer
Real Estate Officer
.

■x*

Our Permanent Home
The handsome eleven story

building we
erecting at the corner of Sixth &
Spring Streets will, upon completion (about
February 1, 1911) become the permanent
home of the Los Angeles Trust & Savings
Bank. The ground floor will be one of the
best equipped banking rooms in the country,
are

now

while the basement will contain the strong¬
est

Safe-Deposit Vaults yet devised.

Capital, Surplus
and Undivided Profits

owned

by the Stockholders of the

first National Bank of Los Angeles
These Well Known Aen Personally Aanage this Bank
John P. Burke
Geo.

Cochran

John S. Cravens
J. C. Drake
J. M. Elliott

A. H.

Naftzger
Motley H. Flint

Stoddard Jess
Gail B. Johnson

H. W. O’Melvenv

W. M. Garland
W. E. Hampton
W. I. Hollingsworth

L. Lindsay
W. C. Patterson
Paul R. Maybury

Wm. R. Staats
Charles H. Sessions
W. L. Stewart

George S. Phillips

J. S. Torrance

We solicit Accounts of every desirable kind.

Correspondence Invited

Los Angeles Trust and Savings Bank

Present Location: Central Building, Sixth and

Aain Sts., Los Angeles, Cal.

=CitizensNationalBank
Paid

Up Capital, One Million Dollars
Surplus, Five Hundred Fifty Thousand
Resources, Ten Million Five Hundred Thousand

Ample

resources to assure consistent service for all
commercial accounts.

No service this bank

render will be regarded as
unimportant.
Uniform consideration will be extended in
every department
can

R. J.
A. J.

WATERS, President
WATERS, Vice-President
J. ROSS CLARK, Vice-President

OFFICERS

M. J. MONNETTE, Vice-President
WM. W. WOODS, Cashier
GEORGE E. F. DUFFET, Ass’t Cashier

E. T.

PETTIGREW,

GEORGE BUGBEE,

Ass’t Cashier
Ass’t Cashier

ESTABLISHED 1838

SAN FRANCISCO

SUTRO & CO.

reason

of its

com¬

manding position, mid¬

Investment Securities

way

between

Mexico

and British Columbia,
at the main
gateway to
the Orient, is the natural

SPECIALISTS IN

PACIFIC COAST

clearing house for
Pacific Coast business

STOCKS AND BONDS

THE AMERICAN
NATIONAL BANK

CORRESPONDENCE SOLICITED AND
INFORMATION CHEERFULLY
FURNISHED

San

Francisco, by

of its extensive
connections and its
reason

412
SAN

Montgomery Street

facilities for prompt and
painstaking service, is
well equipped to handle
such business.

FRANCISCO, CALIFORNIA
CODES USED

Liebers

Bedford AcNeill

Aontgomery

Western Union

Sutro& Co. (Private)

Postal

MEMBERS
STOCK AND

BOND

P. E.

BOWLES,
GEO. N. O’BRIEN,

EXCHANGE

President
Cashier

The National Bank
of

California

LOS

ANGELES

RESOURCES, $6,000,000.00

INVITES
AND

OFFERS

LOS

ANGELES

UNSURPASSED
PROPER

J.
W.

E.
D.

FISHBURN,

FOR

ITS

R. I. ROGERS, Vice-President
H. S. McKEE, Cashier

WOOLWINE, Vice-President
W.

FACILITIES

TRANSACTION

President

BUSINESS

PROLLIUS, Asst. Cashier

THE ANGLO & LONDON

PARIS NATIONAL BANK
SAN

FRANCISCO, CALIFORNIA

JUNE

Capital,.

30,
•

1910
.

$4,000,000

Surplus and Profits,

Deposits,

•

1,700,633

23,586,632

OFFICERS
SIG.
H.

GREENEBAUM, President.

FLEISHHACKER, Vice-Pres.

R.
&

Manager.

ALTSCHUL, Cashier.

A. HOCHSTEIN, Asst. Cashier.

JOS. FRIED LANDER, Vice-President.

C. F. HUNT, Vice-President.

CHOYNSKI, Asst. Cashier.

G. R.

PARKER, Asst. Cashier.

BURDICK, Asst. Cashier.

\X 7E

particularly appreciate accounts of banks,
and being located at the
logical distrib¬
uting point for the entire Pacific Coast, we can
give the promptest attention to Coast collections.

NATIONAL BANK
of

FRANCISCO

SAN

OFFICERS
RUDOLPH

JAMES
J.

SPRECKELS
LYNCH

MOFFITT

Cashier

Assistant Cashier

SKINNER

McCORMICK
A.

Vice-President

GEO.

President

KENNED*

Assistant Cashier

With correspondents in every section of the Pacific
ment in alt departments, this bank invites correspondence,

CAPITAL
SURPLUS AND PROFITS

Coast, and a modern equip¬
collections and accounts•

$3,000,000
1,900,000

The First Federal Trust Company, associated with The First National Bank,
and located in the same building, is prepared to execute trusts of every description♦
CAPITAL

....

$1,500,000

California Securities
•

•?

■

Newer and faster
tal

growing communities

by offering slightly greater
less rapidly expanding.

must attract

capi¬

returns than do the older and

The Pacific Coast is
converting its natural resources into
industrial enterprises at a fast
pace, and is a constant seeker

capital.

We have made a
specialty of California bonds for sixteen
years.
We offer California
Municipal, Railway and Corporation
Bonds which net higher returns than
Eastern securities of

equal strength.

If in any way we can aid those
interested in California
conditions and securities by

will be

You

pleased

are

to do

furnishing data

and

so.

cordially invited

to let

JAMES H. ADAMS
111-113 West Fourth Street
Los Angeles

us serve

information,

you.

COMPANY

Cor. Sansome and California Sts.
San Francisco

Wm. R. Staats Co.

fielding 1. Stilson (o.

DEALERS IN

Established in 1900

BONDS
1

MEMBERS
LOS ANGELES STOCK EXCHANGE

With Special Attention to the
Issues of Municipalities and
Corporations in the
State of California
ALSO

Carefully Selected Invest¬
ments

netting 6

per cent, per annum

BUY AND SELL
LISTED SECURITIES
On Commission Orders
CORRESPONDENCE INVITED

305 H. W. Heilman
LOS

ANGELES

Building

LOS ANGELES
105-107 West Fourth Street

PASADENA
65 So.

Raym ond Ave

N. W. HALSEY & CO
Bankers
New York

San Francisco

Philadelphia

Los

Chicago

In the

Angeles

purchase of bonds, the

value of

banking firm to

client depends upon the scope
and

efficiency of the service

rendered and the integrity and

experience of the firm.

We submit the record of

offerings

over a

years

period of

our

many

indication of

our

ability and

purpose to

supply

earnest
you

with de¬

pendable investments.

HALSEY

BUILDING.

SAN FRANCISCO

Sound Investment Bonds
Bought
Our

—

Sold

—

Appraised

Organization Covers All American Bond Markets
Inquiry Invited.

Address Nearest Office

TRAVELERS !S CALIFORNIA
desiring banking facilities

are

invited

tional Bank when in Pasadena.

to call at the Union Na¬

Especial attention will be

given to anyone desiring drafts cashed against Letters of Credit

THE UNION NATIONAL
H. I.

STUART, President

BANK,
E. H.

Pasadena, California
GROENENDYKE, Cashier

THE CONTINENTAL TRUST COMPANY
BALTIMORE,

MD.

Capital
$1,350,000
Surplus and
.

Undivided
Profits

2,450,000

Invites the Accounts of Banks
and Trust

Companies

Exceptional Facilities

for Han¬

dling Collections

Transacts

General Trust and

Banking Business

Correspondence Invited

FRANK L. BROWN

GEO. t. WALKER

C. B. SIMMONS

BROWN- WALKER-SIMMONS CO.
CALIFORNIA LANDS
INVESTMENT SECURITIES
Upon receipt of name and address,

will send postpaid, free of charge,

CALIFORNIA’S

of the following publications issued by

us :

GREATEST

HOW

any

OIL

GET

INDUSTRY
CALIFORNIA HOME

KING
GOLD IN FRUIT IN THE GOLDEN
STATE
HOW TO JUDGE OIL STOCKS

BROWN-WALKER-SIMMONS

Metropolitan Life Building
NEW

YORK

Crocker Building
SAN FRANCISCO

CO.
Couch Building
PORTLAND, OREGON

FIRST NATIONAL BANK OF PASADENA
Capital, $100,000
OFFICERS

ERNEST H. MAY
President
A. K. McQUILLING
Vice President
W. H. VEDDER
Vice President
A. E. EDWARDS
Cashier
S. F. JOHNSON
Ass’t Cashier
H. A. DOTY
Ass’t Cashier

Surplus, $180,000

Deposits, $2,000,000

Conservatism in banking means con¬
DIRECTORS

serving the interests of every customer
of the bank—large or small, depositor
or borrower.
In pursuance of this pol¬
icy this bank has won the confidence of
a
discriminating public, which has long
realized the fact that the
bank and the

trusted to it

success

A. K.

McQUILLING

H. C. HOTALING

ERNEST H. MAY
WM. H. VEDDER
R. I. ROGERS
C. M. PARKER

T. EARLEY

safety of the funds in¬
depend upon honest and

DON C. PORTER

John

judicious administration of afifairs.

McDonald

—THE

Oakland Bank of Savings
OAKLAND, CALIFORNIA
.Commercial, Savings and Trust

Capital - $1,000,000.00
Surplus 642,370.00
Deposits 19,395,350.00
W.

GARTHWAITE,
President
DUNNING,
Vice-President

HENRY
J.

ROGERS,

Vice-President

ECCLESTON, Sec’y and Cashier

SAMUEL BRECK,

Asst.

Cashier

Asst.

Cashier

Asst.

Cashier

ALLARDT,

LESLIE F.

RICE,

CALDWELL,

THOMSON,

Asst. Secretary

Asst.

Secretary

DIRECTORS
M.

REQUA

JAMES K.
ARTHUR
J.

BREED

ECCLESTON

HENRY

ROGERS

MOFFITT

EDOFF

HORACE DAVIS
A.

BORLAND

GEO.
W.

COLLINS

DUNNING

W. GARTHWAITE

E. F. HUTTON
& CO.

31=39 New St., New York
BRANCHES:
112 West Third
490 California

Hotel

St.

Street, Los Angeles

Street, San Francisco

Francis,

San

Francisco

MEMBERS NEW YORK
stock:

exchange

Private lA/ire New York to Los
San Francisco

Angeles and

THE

National Bank of Commerce
OF SEATTLE

OFFICERS

M. F.

BACKUS, President
R. R. SPENCER, First Vice President
0. A. SPENCER, Assistant Casbier
RALPH S. STACY, Second Vice President
EMERY OLMSTEAD, Assistant Cashier
J. A. SWALWELL, Casbier
R. S. WALKER, Assistant Cashier
Statement of Condition at Close of Business, Septm 19 1910
RESOURCES

LIABILITIES

Loans and

Discounts,
Overdrafts,
State, County and City Warrants,
Real Estate, Furniture and
Fixtures,
Foreign Government, R. R. and
Other Bonds,
...

$8,255,246.04
7,088.26

257,581.97
77,763.66

fin Vault,

Bonds Borrowed,

1,103,058.18
235,000.00
125,000.00

...

235,000.00

of Credit,

Deposits

30,974.51

f Individual,$8,892,547.21
2,443,134.83
l UnitedStates,870,337.01

] Banks,

12,206,019.05

$14,700,051.74

2,314,791.78

2,146,471.28
I In U. S. Treas.,
11,752.50

$1,000,000,00

Acceptances Under Letters
488,350.00

U. S. Government Bonds to
Secure Circulation,
U. S. Government Bonds to Secure
U. S. Deposits
$ 906,006.25

Cash < In Banks,

.....
Capital,
Surplus and Profits,
■
Circulation, ’ •

5,379,021.81

$14,700,051.74
SEND

YOUR

NORTHU/ESTERN

BUSINESS

UNITED STATES
NATIONAL BANK
OF

PORTLAND,

Capital

$1,000,000.00
800,000.00
10,000,000.00

Surplus and Profits
Deposits
With

OREGON

honorable and successful record for nearly twenty years
and exceptional facilities for handling the accounts of

Banks, Firms, Individuals and Corporations
.

1A/JE

SOLICIT

YOUR

BUSINESS

CORRESPONDENCE
J. C. AINSWORTH, President
R. LEA BARNES, Vice-President

INVITED

R. W.

SCHMEER, Cashier

A. M. WRIGHT, Assistant Cashier
W. A. HOLT, Assistant Cashier

PORTLAND TRUST COMPANY
PORTLANO, OREGON

Capital

$300,000

Commercial

Twenty-Three

Banking
Years

Correspondence Solicited

Old

LADD & TILTON BANK
PORTLAND

OREGON

ESTABLISHED 1859

PACIFIC COAST

OLDEST BANK ON THE

$1,000,000

CAPITAL

600,000

SURPLUS AND PROFITS
THIS BANK HAS HAD AN UNBROKEN HISTORY OF OVER
OF SUCCESSFUL BUSINESS IN PORTLAND
OFFICERS.
W. M. Ladd, President
Edward Cookingham,

V-President
W.

H. Dunckley, Cashier

DIRECTORS.

Howard, Jr.,

Ass,l Cashier

Ass’t Cashier

W. Ladd,

Walter M.

Edward Cookingbam, Henry

Ladd,

L. Corbett, William M.

Ladd, S. Wilcox.
B. Lanthicum,

Frederic B. Pratt, Theodore B.

Ass’t Cashier

We are prepared to furnish
banking.

Firms, Corporations and Individuals Solicited.
depositors every facility consistent with good

CAREFUL ATTENTION

ttt

Charles E. Ladd, J. Wesley

Cook,

Accounts of Banks,

FIFTY YEARS

GIVEN TO COLLECTIONS

OMAHA NATIONAL BANK

NEB.

OMAHA,
m*S

(hr*?®:■$i‘i' f

SiWilB
-S-VV •'
-

■

$1,000,000
Capital - Surplus and Profits - 535,000

Resources
J.

MILLARD

14,000,000

DeF.

RICHARDS
Cashier

President
WM.

WALLACE
Vice-President

WARD

BUCHOLZ
Vice-President
M.

BURGESS
Vice-President

FRANK

BOYD
Assistant

Cashier

WILCOX
Assistant Cashier

EZRA MILLARD
Assistant

Cashier

Special Collection Facilities for
Nebraska and the Northwest

••OLDEST BANK IN WASHINGTON”

DEXTER HORTON NATIONAL BANK

The First
National Bank

SEATTLE
FORMERLY

Dexter Horton & Co., Bankers
(Established
1870)

Capital
Surplus

$1,200,000.00
240,000.00

SEATTLE

ESTABLISHED 1882

Capital
$300,000
Surplus and Profits 100,000
.

M. A. ARNOLD, President
M. McMICKEN, Vice-President
D. H. MOSS, Vice-President
J. A. HALL, Vice-Pres. and
Cashier
C. A.
PHILBRICK, Asst. Cashier

DIRECTORS
M.

A. ARNOLD
President
THOMAS BORDEAUX
President Mason County
Logging Co.
MAURICE McMICKEN

Hughes,

McMicken,

Dovell

President
N. H. LATIMER. President
R. H. DENNY,Vice-President
G. F. CLARK
W. H. PARSONS,
Vice-Pres.
C. E. BURNSIDE
M. W.
PETERSON, Cashier
H. L. MERRITT
J. W.

Hofius

Assistant
Cashiers

SEATTLE, WASH.
Arctic Club

Bldg.

Co.

ROWLEY

Capitalist
D.

Favorable Terms

Attorneys

PATRICK McCOY
Lumberman

Accounts of Banks and Bankers
on

Ramsey,

O. D. FISHER
Manager Gtandin Coast Lumber Co.
J. A. HALL
Vice-President and Cashier

SPANGLER, Manager Credit Department

Received

D. HOFIUS
Steel and Equipment

MOSS

Vice-President

AQD/^PM JP

V^V^e

TACOMA, WASH
Fidelity Bldg.

INVESTMENT BANKERS

Correspondents of Logan & Bryan who
connecting all leading Exchanges.
Orders may be executed from Seattle
Stock Exchange within one minute.
Orders may be executed with

are

members of and have private wires

Tacoma

your own

broker over!

DAY AND NIGHT SAFE
DEPOSIT VAULT IN

Nye

the floor of the New York
our

wires.

CONNECTION

A,tnle>

BOSTON, MASS.
SO
STATE STREET.

—

OMAHA, NEB.

IOT.M & FARNAMSTS.

PAILRQ\D.MUNICIR\L AND CORPORATION BONDS
OAPITAL, 'FULLY PAID, $ 1 O0,000. °
°

FIRST NATIONAL BANK
DENVER
Oldest National Bank in

UNITED STATES

Colorado

DEPOSITARY

CAPITAL

$1,000,000

SURPLUS

$1,000,000

DEPOSITS

$20,542,338.50
OFFICERS
D. H.

THOMAS KEELY,
F. G.

G. M.

Cashier
Cashier

v C. S. HAUGHWOUT, Assistant

Vice President

MOFFAT, Cashier

.MOFFAT;" President

J. C. HOUSTON, Assistant

HAUK, Auditor

DIRECTORS

GERALD HUGHES

THOMAS KEELY
F. G. MOFFAT

D. H. MOFFAT
L. H. EICHOLTZ

Colorado Springs
SPENCER PENROSE, Colorado Springs
OF BANKS AND BANKERS
ON FAVORABLE TERMS
C. M. MacNEILL,

C. S. HAUGHWOUT

J. C. HOUSTON

ACCOUNTS
RECEIVED
SPECIAL

COLLECTION

39
■4

FACILITIES
#'
■*

National
Bank of Commerce
.

...

(

■

IN ST. LOUIS
OFFICERS:
EDWARDS. President
TOM RANDOLPH,
Vice-President
W.
JNO. NICKERSON,
Vice-President
B. F.

W. B. COWEN,
L. McDONALD,
J.

Vice-President
Vice-President
A. LEWIS, Cashier

Capital, Surplus, Profits,

$18,000,000

ACCOUNTS SOLICITED
2% Interest Paid on Bankers’ Balances
3% Interest Paid on Time

Deposits

Mechanics-American National Bank
SAINT LOUIS
Report of condition September 1st, 1910
RESOURCES
Bills Discounted
Demand Loans
Overdrafts

$12,800,933.93
5,153,296.32

...

U. S. Bonds

to secure

Premium

U. S Bonds

$17,954,230.25
2,042.40

...

circulation

2,000,000,00
30,000.00

2,030,000.00
100,000.00
1,000.00
1,634,228.98
281,606.89

Redemption Fund
Bonds

to secure

U. S.

Other Bonds

deposits

...

Real Estate, Furniture and Fixture?, etc.
CASH—With Banks

■

6,401,973.03
7,789,719.27

In Vaults

14,191,692.30
$36,194,800.82

LIABILITIES
Capital Stock
Surplus and Undivided Profits

—

Grculation

DEPOSITS—Individual

$13,615,263.55
15,640,217.55
1,000,00

Banks
U. S. Government

$2,000,000.00
2,944,919.72
1,993,400.00

29,256,481.10
$36,194,800.82

Accounts of Bonks,

Corporations, Firms and Individuals solicited to whom

we are

prepared to

furnish every proper banking facility.

OFFICERS
WALKER HILL, President
JACKSON JOHNSON, Vice-President
L. A. BATTAILE, Vice-President

G. A.

TRUABO, Ass’! Cashier

C. L. ALLEN, Ass’! Cashier
P. H. AILLER, Ass’t Cashier
C. L. BOYE, Ass’t Cashier

EPHfcON CATLIN, Vice-President
CALFEE, Cashier

J. S.

Interior Aechanics-American National Bank, St. Louis.

OFFICERS
C. H.

HUTTIG,

President
W. B.

G. W.

WELLS,

GALBREATH,

Vice-Pres.
D’A. P. COOKE,
Asst. Cashier

R. S.

Asst. Cashier

HAWES,

H. HAILL,
Asst. Cashier

Asst. Cashier

CONDENSED

STATEMENT SEPT. 1, 1910

RESOURCES

LIABILITIES

Loans and Discounts
$18,923,865.93
U. S. Bonds and Premiums
2,370,045.63

Other Stodcs-and Bonds

Capital

1,119,447.77
Banking House and Real Estate 950,000.0(7 ;
Cash and Sight Exchange .' 14,120,142.87
Total

J. R. COOKE,

Cashier

Surplus and Profits

$ 2,000,000.00

2,229,699.55

....

C,rculat,on

" -• *

-Deposits

$37,483,502.20

...

Total...

2,000,000.00
31,253,802 65
$37,483,502.20

DIRECTORS

Adolphus Busch
John I. Beggs

G. W. Galbreath

G. W. Brown

C. H.

Huttig

McChesney, Jr.
J. E. Smith
Thos. Wright

S. H. Fullerton

H. F.

Knight

W. B. Wells

Norris B.

Gregg

B. F. Yoakum

W. S.

Northwestern National Bank
Minneapolis, Minn.
The most extensive list of direct

correspond¬
ents in our territory provides us facilities
for prompt and efficient handling of collec¬
tions. Send

your

northwestern business.

Capital, Surplus and Profits, $5,300,000.00
Deposits, $27,000,000.00
Established

1872.

McCORNICK & CO.
BANKERS
Salt Lake City, Utah
ESTABLISHED 1873

INCORPORATED 1910

Capital Paid in
Surplus and Profits
Deposits -

$600,000.00

175,000.00

6,500,000.00

Largest Bank between Denver and the Pacific Coast
W. S. McCORNICK, Pres.
S. A. WHITNEY, Cashier
.

D. C.
*

JACKLING, Vice-Pres.

L. B.

McCORNICK, Asst. Cashier
,

’

R. L. CONELY, Asst. Cashier

Best attention given to collections and alt matters entrusted to

our care.

Accounts

respectfully solicited.

FIRST NATIONAL BANK,

SURPLUS $2,000,000

TOTAL ASSETS $26,000,000

CAPITAL $2,000,000

PRINCE, President

F. M.
C. T.

Minneapolis, Minn.

H. A. WILLOUGHBY, Assistant Cashier
G. A. LYON, Assistant Cashier
P. J, LEEMAN, Assistant Cashier

JAFFRAY, Vice President

Cashier
D. MACKERCHAR, Assistant Cashier

GEO. F. ORDE,

WE SOLICIT YOUR

COLLECTIONS ON NORTHWESTERN STATES

Minneapolis Trust Company
MINNEAPOLIS,

Capital
Transacts

MINN.

$1,000,000

General

BOND

Trust

Company

Business

DEPARTMENT

Dealers in High Grade Municipal, Railroad and Public
Bonds suitable for Banks, Bankers, Estates and

Service Corporation

Individuals

CORRESPONDENCE INVITED

C. T. JAFFRAY. Vice-Pret.
WM. G. NORTHUP. Vice-Pre*.

ELBRIDGE C. COOKE. President
WM. H.

DUNWOODY. Vice-Pres.

J. L. ROOT,

E.
ST.

GOVERNMENT

MUNICIPAL

JLJ

and

Manager Bond Department

ROBERT W. WEBB. Sec. and Treat.
BENJ. WEBB, Att’t Sec. and Treat.

MAGRAW
PAUL, mi IN IN.

T\J TV £

RAILROAD

U LN XJ Zj CORPORATION

COMMERCIAL PAPER
CORRESPONDENCE

INVITED

CHILD, HULSWIT & CO.
BANKERS
MUNICIPAL and CORPORATION BONDS
<1 Deal

only in securities of the highest character,

suitable for the investment of the funds of
Banks,
Trustees of Estates, and conservative individuals.
Our list of securities includes issues of
City, County, and
School District Municipal Bonds; choice First
Mortgage
Bonds of well established Corporations (some

being secured

by Timber, Coal and Irrigated Lands), and of
Public Service

prosperous

Companies.

Deal in the stocks of UNITED LIGHT & RAILWAYS
COMPANY

OTTAWA ST.

ENTRANCE, MICHIGAN
GRAND

TRUST BUILDING

RAPIDS, MICHIGAN

THE

OLD

MICHIGAN
TRUST
CO of Grand Rapids, Mich.

NATIONAL
BANK

•

CAPITAL,
Surplus,

GRAND RAPIDS, MICH.

$200,000.00
300,000.00

....

■

Additional

Liability o! Stockholders,
Deposited with State Treasurer, •

Capital and Surplus,

$1,300,000
Resources, $8,000,000

260,000.00

100,000.00

DIRECTORS
Willard Barnhart
Edward Lowe
Darwin D. Cody
W. W. Mitchell,
E. Golden Filer, Filer
City. Cadillac, Mich.
William H. Gay
R. E. Olds,
Lansing.
F. A. Gorham
J. Boyd Pantlind
Thomas Hefferan
Wm. Savidge, Spring Lake.
Thos.
Hume,
Muskegon,Wm. Alden Smith
Mich.
Dudley E. Waters
Henry Idema
T. Stewart White
S. B. Tenks
Lewis H. Withey
Wm. Tudson
Jas. R. Wylie

LARGEST AND OLDEST DANK IN
WESTERN MICHIGAN

Jas.

CORRESPONDENCE INVITED

Lacey, Chicago.

OFFICERS
LEWIS H. WITHEY, Prest.
WILLARD BARNHART, ist Vice-Prest.
HENRY IDEMA, and Vice-Prest.
F. A. GORHAM, 3rd Vice-Prest.

WILLARD BARNHART
President
CLAY H. HOLLISTER Vice President
and Cashier
WILLIAM JUDSON
Vice President
GEO. F. MACKENZIE
Asst. Cashier
H. A. WOODRUFF

GEORGE HEFFERAN, Secy.
CLAUDE HAMILTON, Asst. Secy.
.

Jf,

Acts

•

Executor, Administrator, Guardian, Trustee, Re¬
ceiver, Assignee, etc.
Loans Money oh Real Estate and
Collateral Security.
Takes entire charge of Property.
Audits books. Has High
Grad?, Bonds *nd other SecuritiM

Asst. Cashier

for sale.

’

;

„

ESTABLISHED 1891

Substantial, ever-present and well equipped for
the transaction of all classes of trust business

UNION TRUST COMPANY
DETROIT,

BOARD

MICHIGAN

DIRECTORS

HENRY B. LED YARD, Chairman

President
GEORGE HENDRIE, ist Vice Pres.

FRANK W. BLAIR,

F. J.

A. E. F. WHITE, 2nd Vice Pres.
BURNHAM S. COLBURN, 3rd Vice Pres.

CHARLES L. PALMS

HECKER

GEORGE B. REMICK

CHAS. STINCHFIELD

D. C. WHITNEY

GEORGE M. BLACK

HENRY RUSSEL

philip h. mcmillan

ALLEN F. EDWARDS

ELLIOTT T. SLOCUM

HERBERT E. BOYNTON

GEORGE H. RUSSEL

CHARLES A. DUCHARME

ALBERT L. STEPHENS

GERALD J.

HARRY A. CONANT

PAUL F. BAGLEY

J. C. HUTCHINS

THE

McMECHAN

PEOPLES STATE BANK
DETROIT, MICH.
GEO.

CAPITAL AND SURPLUS

GEO.

$3,000,000

MASON, Vice-Pres.
SCHULTE, Vice-Pres.
AUSTIN E. WING, Cashier.
H. P. BORGHAN, Cash. Sav. Dept.
R.

Credit Dept.
BODDE, Assist. Cashier.
C. H. AYERS, Assist. Cashier.
ENOCH SMITH, Assist. Cashier.
R. T. CUDMORE, Asst. Cashier.
GEO. T. COURTNEY, Auditor.

R. W. SMYLIE, Mgr.

$30,000,000
WRITE US ABOUT YOUR
MICHIGAN COLLECTIONS

RUSSEL, President.
O’BRIEN, Yice-Pret.
E. LAWSON, Vice-Pres.

F. A.

DEPOSITS

Accounts of Banks. Bankers

and Trust Companies

Received, on Favorable Terms

Continental and Commercial
Nationa Bank of Chicago

Capital, $20,000,000

Surplus and Profits, $9,500,000
OFFICERS

GEORGE M. REYNOLDS, President
RALPH VAN VECHTEN, Vice-President
ALEX. ROBERTSON, Vice-President
HERMAN WALDECK, Vice-President
JOHN

WM.

SCHROEDER, Secretary

NATHANIEL

LOSCH, Cashier
FRANK H. ELMORE, Ass’t Cashier
HARVEY C. VERNON, Ass’t Cashier
GEO. B. SMITH, Ass’t Cashier
WILBER HATTERY, Ass’t Cashier

CRAFT, Vice-President
CHAPMAN, Vice-President
WM, T. BRUCKNER, Vice-President
JAMES R.

EDWARD

ERSKINE SMITH, Ass’t Cashier

JOHN

R. WASHBURN, Ass’t Cashier
RALPH C. WILSON, Ass’t
Cashier

WILSON W. LAMPERT, Ass’t Cashier
DAN

NORMAN, Ass’t Cashier
FRANK L. SHEPARD, Auditor
H. LAWTON,

Manager Foreign Dept.

LACEY, Chairman of Advisory Committee.

DIRECTORS

OGDEN ARMOUR
JOHN C. BLACK

BUFFINGTON

EARLING

ECKHART

SEIPP

CHARLES H.
W.

FRANK

J1* *** in in in
II* Hi in in hi in hi tr |
in fi

in hi in in in hi inn
I ill III III HI III III «n «

ggSKSSE

HARRIS

MacVEAGH
H.

MICHAEL

WILSON

CUDAHY

DANIEL H.
RICHARD

HIBBARD

EDWARD

EAMES
MILTON

II ill ill ill Ilf III III mu,

LINCOLN

GARY

JOHN

THORNE

CHALMERS

ROBERT T.

KELLEY

F. BANKS
EDWARD P. RUSSELL
ALFRED COWLES

SMsisSSsl

j»
i

ROBERTSON

ROBERT H. McELWEE
ALEXANDER

REYNOLDS

RIPLEY

ALEX.
W.

WILLIAM
(

WEYERHAEUSER

GEORGE M.

POTTER

DARIUS MILLER
JOSEPH T. TALBERT

HENRY BOTSFORD
A.

BURNHAM

LAKE

CHARLES H.

WEAVER

CHARLES T.

BOYNTON

FRANCIS A.
JAMES

HINES

HERBERT

H. McDOEL

HARDY

STEVENS
F.

PERKINS

IRVING

H. MULLIKEN

OSBORNE
JOHN C. CRAFT
RALPH VAN VECHTEN

P. PHILLIPS

GEORGE E.

SAMUEL
JOY

McROBERTS

MORTON

EDWARD S.

ROBERTS
LACEY

Northeast Corner Clark and Adams Streets

Accounts of Banks, Bankers,
Manufacturers, Merchants and
Individuals Invited

Continental and Commercial Trust and
Savings Bank
Capital $3,000,000
Surplus $500,000
Trust, Savings and Bond Departments
Corner Monroe and Clark Streets

OFFICERS
t

E.
W. IRVING

POTTER, Chairman

of the Board

OSBORNE, President

FRANK H. JONES,

The

JOHN JAY ABBOTT, Vice-President
CHARLES C. WILLSON, Cashier

Secretary

WM.

KOPF, Assistant Secretary

Capital Stock
'

of this Bank is Owned
by the Stockholders of the Conti¬
nental and Commercial National Bank
of
.

■.

Chicago
i

J. NORRIS OLIPHANT

FLOYD W. /UINDY

ALFRED L. NORRIS

JAS. H. OLIPHANT & CO
BANKERS & BROKERS
20 BROAD ST., NEW YORK

THE ROOKERY, CHICAGO

Telephone Rector 863

Telephone Wabash 2114

MEMBERS

NEW YORK STOCK EXCHANGE
CHICAGO

STOCK

EXCHANGE

Orders Executed on Commission for the Purchase and
Sale of Stocks, Bonds and all Investment Securities.

Dividends and Coupons
without Charge

Collected and Remitted

Deposit Accounts Accepted Subject to Sight Draft,
and Interest Allowed on Daily Balances
Copies of our 1910 edition of the "EARNING POWER OF RAILROADS" and "RELA¬
TIVE AERITS OF RAILROAD STOCKS AND BONDS" will be sent upon request

HATHAWAY, SMITH, FOLDS & CO.
SUCCESSORS TO

CHARLES HATHAWAY & CO.
DEALERS IN

Commercial Paper
NEW YORK

BOSTON

CHICAGO

45 Wall Street

60 Congress Street

205 LaSalle Street

ST. LOUIS

PHILADELPHIA

408 Olive Street

421 Chestnut Street

MONROE JSTREET

LA SALLE STREET

Capital, $1,500,000

Surplus, $1,500,000

OFFICERS
BYRON L..

SMITH, President

F. L. HANKEY, Vice-President
SOLOMON A. SMITH, Vice-President
H. O. EDMONDS, Vice-President

THOMAS C. KING, Cashier
ROBERT McLEOD, Asst. Cashier
G. J. MILLER, Asst. Cashier
RICHARD M. HANSON, Asst. Cashier

ARTHUR HEURTLEY, Secretary
H. H. ROCKWELL, Asst. Secretary
EDWARD C. JARVIS, Auditor

H. B. JUDSON, Manager Bond Department

DIRECTORS
A. C.

BARTLETT, Pres. Hibbard, Spencer, Bartlett & Co.

WILLIAM A. FULLER, Retired Manufacturer
ERNEST A. HAMILL, Pres. Corn Exchange National Bank
MARVIN HUGHITT, Pres. Chicago & Northwestern Ry. Co.

CHARLES L. HUTCHINSON, Vice-Pres. Corn Exchange National Bank
MARTIN A. RYERSON
ALBERT A. SPRAGUE, Pres. Sprague, Warner & Co.
SOLOMON A. SMITH, Vice-Pres. The Northern Trust
BYRON L. SMITH, Pres. The Northern

Company

Trust Company

The Northern Trust Company=Bank
N. W. Corner La Salle and Monroe Streets

CHICAGO

Western Trust & Savings

THE ROOKERY —CHICAGO

Bank

ESTABLISHED 1873

CAPITAL

$1,250,000

Receives Accounts of Banks, Bankers,

Corporations, Firms and Individuals.
Interview and Correspondence Invited

Personal

OFFICERS
JOSEPH E. OTIS, President
WALTER H. WILSON, Vice-President
WILLIAM C. COOK, Vice-President

A. E. COEN, Asst. Cashier
W. G. WALLING, Secretary
LLOYD R. STEERE, Asst. Secretary
LOUIS H. SCHROEDER, Mgr. Bond Dept.

LAWRENCE NELSON, Vice-President
HARRY R. MOORE, Cashier
ADDISON CORNEAU, Asst. Cashier

J. J. RAHLF, Mgr. Foreign Exchange Dept.

DIRECTORS
EDGAR A.

BANCROFT, Scott, Bancroft & Stephens.
WILLIAM C. BOYDEN, Mata, Fisher & Boyden,
Attorneys.
WILLIAM B OTTER WORTH, Pres., Deere &
Co., Moline, 111.
R. FLOYD CLINCH, Crerar* Clinch &
Co., Coal.
H. J. EVANS, Director, National Biscuit Co.
GRANGER FARWELL, Pres., Farwell Trust Co.

JOHN R. MITCHELL, Pres., Capital Nat’l Bank, St.
Paul, Minn.
JOSEPH E. OTIS, President.
RALPH C. OTIS, Real Estate.
B. F. PEEK, Trustee, Estate of C. H. Deere, Moline, Ill.
JAMES W. STEVENS, Pres., Illinois Life Ins. Co.
FRED W. DPHAM, President, City Fuel Co.
W. A. WIEBOLDT, W. A. Wieboldt & Co., Dept. Store.

C. H. HANSON, President, C. H. Hanson
(Inc.)
W. O. JOHNSON, Gen. Counsel and
Director, Erie R. R.
WALTER H. WILSON, City
GEORGE WOODLAND, Pres., Prairie State Bank.

Comptroller.

Sanford F. Harris (Q, Co.
INVESTMENT
THE

SECURITIES

ROOKERY

CHICAGO

Colonial Trust & Savings Bank
205 La Salle Street,

Chicago

Accounts of Banks and Bankers,
Corporations, Firms and Individuals
solicited. Unsurpassed facilities for collections.

Correspondence invited.

Resources

over

Six Millions

OFFICERS
LANDON CABELL ROSE, President, ^
JACOB MORTENSON, Vice President,
R. C. KELLER, Vice President and Cashier,
EMIL STUEDLI, Assistant Cashier,
W. F. DOGGETT, Assistant Cashier.

DEVITT, TREMBLE & CO.
BANKERS
BONDS FOR INVESTMENT

<1 We offer for the investment of banks
and

private investors,

large and care¬

fully selected list of Municipal, Rail¬
road, Public Service Corporation and
Timber Bonds, all of which we have
purchased outright after the most care¬
ful

investigation.
We do not act

and sell
issues
own

broker,

buy

margin, but offer only such
we consider suitable for our

investment.

<J Descriptive circulars mailed

upon

request.

FIRST NATIONAL BANK BUILDING
CHICAGO

MORRIS BUILDING
PHILADELPHIA

TAB LfSKfZP

r 2 c

AN advantage which banks andfacility have when carrying accounts with
bankers Company
equipped
handling
the Chicago
while

Savings Bank & Trust
is that this institution,
with every
for
the requirements of its
patrons, is not too large to give individual attention to each client.
In addition to inviting both active and inactive
accounts, on the latter of
which it pays 3% interest, this bank furnishes Railroad,
Municipal and other
high-grade bonds suitable for the investment of the funds of financial institu¬
tions.
Its facilities are at your disposal.
OFFICERS
Lucius Teter, President.
Edward P. Bailey, Vice-President.

Houston Jones, Cashier.

Wm. M. Richards, Assistant Cashier.
John A. McCormick, Vice-President.
Leverett Thompson, Secretary.
Harold T. Sibley, Manager Bond Department.
R IZiSO (JRCR

ftviz

r r

r o i\r

go f-J-arg

FORT DEAWN NATIONAL BANK

ItPHB&p]

UNITED states depositary

\ X^pppiCAPITAL

SURPLUS AND PROFITS
DEPOSITS

$1,500,000

....

400,000
16,000,000

WM. A. TILDEN, President

NELSON N. LAMPERT,
Vice-Pres.

J. FLETCHER FARRELL,
Vice-Pres.
HENRY R. KENT, Cashier
CHARLES FERNALD,

GEORGE H. WILSON,
Ass’t Cash.
THOS. E.

Ass’t Cash.

NEWCOMER, Ass’t Cash.

COMPARATIVE SHOWING OF DEPOSITS
February 14, 1908
February 5, 1909
January 31, 1910
March 29,

$ 9,887,954.84
11,617,691.24
13,212,286.64

1910

June 30, 1910
September 1,

15,041,357.21

15.116,591.47
16,056,180.16

1910

We solicit accounts of banks, corporations, firms and individuals, and we endeavor to
give prompt and efficient service by personal and courteous attention to our customers

289,,5500CDhoedsgterfild

SAFE BOND INVESTMENTS

9,50Otumwa

Amount

Municipal Bonds
Description

$24,000 Sanitary District of Chicago 4’s
30,000 City of Aurora, Ill., Water 4^*s
10,000 Grand Junction, Colo., Refunding 5*s
17,000

20,000

10,000

15,000

10,000

20,000

29,000

20,000

14,000

25,000

>mination

1915-1919

Market
4.10

500

10,000

12,000

20,000

45,000
15,000

75,000

1929

4-25

1,000

1911-1916

4-25

500

Marseilles, Ill., Sewer 5’s
Bushnell, Ill., Sewer s’s.
Lancaster, South Carolina, Water Works 5’s..
Cheraw, South Carolina, Bridge 5’s
Hamlet, N. C., Improvement and School 5’s..
Mooresville, N. C., Water and Street Imp. 5’s.
Patterson, La., Water 5’s
New Orleans, La., Public Imp. 5*s
$1,000 and
Laurel, Montana, Water and Sewer 6’s
Portions of Issues. Denominations $1,000, $500,

1915-1929

1,000

1916-1923

4.30

500

1948

4-55

1,000

1949

1,000

1939

4.60
4.60

500

1939

4-65

1,000

1912-1933

4.90

500

1919-1922

4.90

500

1930

5-15

Various 4.50 to 5.50

100

School Bonds
$500
500

County, Neb., School District 5’s
Fisher County, Tex., Rotan School District 5’s..
Belhaven, N. C., School District 5’s
Mooresville, N. C., School District 5’s
Mills County, Tex., School District 5*s
Lane County, Ore., School Dist. No. 19, Sch'l 5’s
Union Co., Ore., School Dist., 5’s
Avayelles Parish, La., School Dist. 5’s
Co., S. C., School District 6’s
Portions of Issues. Denominations $1,000, $500,

1912-1926
1911-1926

4.20

500

8,000 Fulton County, Ill., School District 5*s
24,000 Del Rio, Tex., School District 5’s

16,000

To net
About %

>1,000
$1,000

$15,000 Union County, Ill., School District 5’s

10,000

Maturity

1949

4*50

4.40

500

1930

4*55

1,000

1949

4*55

500

1939

1,000

1939

4.60
4.60

300

*949

4*65

1,000

1930

4.70

1,000

1930

4.70

1,000

1916-1930

4.90

1940

5*35

500
100

Various 4.60 to 5.40

Bonds

$140,000 Shreveport (La.) Gas, Electric Light & Power
Company Refunding Mortgage 6% Goldi
Bonds
:
$500 & $1,000
55,000 Seattle Lighting Company 6% Debenture Gold11
Bonds (Seattle, Wash.)
1,000
52,000 Citizens’ Gas & Electric Company
5% Sinking
Fund Gold Bonds (Waterloo & Cedar
Falls,

1940

6.15

1920

6.15

500

1926

5*25

500

1930

5*45

1,000

1933

5*27

500

1919

5.00

Iowa)

Texarkana Gas & Electric Company First Mort¬
gage 5% Gold Bonds
36,000 South Shore Gas & Electric Company General11
Mortgage 5% Gold Bonds
Gas Light, Heat & Power Company
First Mortgage 5% Gold Bonds
40,000

■

FULL DESCRIPTIVE CIRCULARS FURNISHED
ON REQUEST

H. T. HOLTZ & CO.
MUNICIPAL, SCHOOL, CORPORATION

BONDS
171 La Salle Street,

CHICAGO

FARSON, SON & CO.
INVESTMENT BONDS
(Established thirty years)
21 BROAD STREET

FIRST NATIONAL BANK BLDG.

New York

Chicago

Members New York Stock Exchange

All Banks should
convertible bonds

high-grade readily
paying from
to 6%

own

Charles H. Harbert
Robert M. Roloson

R' t

Frank P. Judson

wm. i. KicKards

Robert R.

Forgan

W. T. RICKARDS CO.
COMMERCIAL PAPER
The

Rookery

217 La Salle Street

George H. Burr

Chicago

ESTABLISHED 1883

& Co.
BANKERS

H. C. SPEER & SONS CO.

COMMERCIAL
PA

First National.Bank

Building

Chicago

PER

Investment Securities
NEW YORK

BONDS

BOSTON

PHILADELPHIA

SCHOOL,

CHICAGO
ST. LOUIS

COUNTY and AUNICIPAL

KANSAS CITY
SAN FRANCISCO

EDWARD

RUSSELL.

WALTER S. BREWSTER.
EDWARD L. BREWSTER, Special Partner.
♦

L. PENISTON.

RUSSELL, BREWSTER & CO.
SUCCESSORS TO

EDWARD

BREWSTER

CO.

BANKERS AND BROKERS
137 Adams

Street, CHICAGO

Commission Orders Executed for CASH
or on MARGIN
We have

hand

Trinity Building, NEW YORK
MEMBERS OF
New York Stock Exchange.

Chicago Stock Exchange.

oarefully selected assortment of

Bonds

for investment.

Correspondence of Bankers Invited.

Chicago Board of Trade.
Particulars

application.

<]This Bank, being at the logical center of Wiscon¬
sin

banking activity, and having an exceptional list
State and Foreign correspondents, offers its

conservative Banks with the assurance
that such a connection will be of mutual advantage.

services

The First National Bank
OF MILWAUKEE

Trustee

Executor

MILWAUKEE TRUST COMPANY
OLDEST TRUST COMPANY IN MILWAUKEE

Guardian

Administrator

MUNICIPAL, RAILROAD AND PUBLIC
SERVICE CORPORATION BONDS
OFFICERS AND DIRECTORS:
ROBERT CAMP, President.
FRED T. GOLL.
T. E. CAMP.

SCRANTON STOCKDALE,

CHARLES ALLIS, Vice-President.

DAVID C. GREEN, Vice-President and Treasurer.
JOHN I. BEGGS.

GEORGE P. MAYER.
Secretary.

FRED VOGEL, JR.
J. E. FRIEND.

P. O. KANNENBERG, Asst. Secretary.

GEO. E. REISER.
WILFORD M. PATTON.

DEAN JAY, Manager Bond Department.
■■mill i

National Bank
Philadelphia
solicits the

accounts

of Banks,

Bankers, Corpo¬

rations, Firms and Individuals.

Exceptional

Facilities for making Collections
throughout
the World.
Foreign Exchange Bought and
Sold.
Travelers’ and Commercial Letters of
Credit issued and Transfers made by Cable.

STATEMENT OF CONDITION SEPTEMBER 1, 1910.

RESOURCES
Loans and Discounts
Due from Banks
Exchanges for Clearing House
Cash and Reserve

$36,368,884.70
6,558,927.51

4,360,875.£8
14.601,724.17

$61,890,412.33
LIABILITIES
Capital Stock

$3,000,000.00
6,387,499.59

Surplus and Net Profits
Circulation
Deposits

2.955,700.00
49,547,212.77

$61,890,412.36

E. F.

SHANBACKER, President.

JAMES HAY, Vice-Pres’t.
B. M. FAIRES, Vice-Pres’t.
FRANK G. ROGERS, Vice-Pres’t.

J. CLARK, Cashier.
W. A. BULKLEY, Ass’t Cashier.
W. K. HARDT, Ass’t Cashier.

DIRECTORS
James Hay,
Frank T. Patterson,
Charles I. Cragin,
William A. Dick,

Effingham B. Morris,

’
'

Sidney F. Tyler, Chairman.
Wm. R. Nicholson,
Rudulph Ellis,
Clement A. Griscom,
W. A. Lathrop,
Francis I. Gowen,
Roland L. Taylor,
J. M. Willcox.

14
f »

Arthur E. Newbold,
Isaac H. Clothier,
Alba B.

Johnson,

C. S. W. Packard,
E. F. Shanbacker,

TRUST COMPANY
City Hall Square

20 South Broad St.,

PHILADELPHIA
SURPLUS, $1,750,000

CAPITAL, $1,000,000

OFFICERS
THOMAS DeWITT CUYLER,
President.

JOHN H. MASON,
Vice-President.
W. A. OBDYKE,

Secretary and Treasurer.

STEHFEST,
Secretary and Asst. Treasurer.
H. W.

Rfi-.'r.

Asst.

DIRECTORS
H.

W. BIDDLE.

THOMAS DeWITT CUTLER.
RUDULPH ELLIS.
CLEMENT A.

GRISCOM.

EFFINGHAM B. MORRIS.

m-1

ARTHUR E. NEWBOLD.
C. STUART PATTERSON.
SAMUEL REA.
SIDNEY F. TYLER.
HORATIO G. LLOYD.
SAMUEL T. BODINE.
HENRY TATNALL.
j. r. McAllister.

HENRY

0. FRICK.

ROBERT K. CASSATT.

WILLIAM C. SPROUL.
CHARLEMAGNE TOWER.

‘■M

i'
*

$jijrr \

>r~rr4'-~r
,

Accounts of Banks, Bankers
as

■*

’ r'

-S.; V

Interest Paid on

Acts

‘

DRAYTON.

JOHN H. MASON.
WILLIAM M. BARRETT;

Deposit Accounts

and Trust Companies Solicited

Executor, Administrator,

Safe Deposit Boxes to

CLOTHIER.

CHARLTON YARNALL.
ROBERT C.

•*r.

MORRIS L.

Trustee and Guardian

Rent in Armor Plate Vault
f

?«.»»*«<

THE

Philadelphia Trust
SAFE DEPOSIT AND

INSURANCE

COMPANY
MAIN OFFICE

413-417 CHESTNUT STREET

BRANCH OFFICE

1415 CHESTNUT STREET

PHILADELPHIA

Capital, $1,000,000
Surplus, 3,500,000
All forms of business in
which a Trust Company
may

legitimately

engage

Legal Depository for the Reserves of Trust
Companies and State Banks
ROLAND L. TAYLOR, President
SCHOLEY
HARRY STEWART
Secy, and Treas.
Asst. Real Estate Officer
SAMUEL E. CARTER
NELSON C. DENNEY
EDMUND D.

Asst. Treasurer
THOMAS B. PROSSER
Real Estate Officer

Asst.
T.

Asst.

CASSATT

Secretary

ELLWOOD FRAME

Secretary

BANKERS
Established 1872

Arcade Building, Philadelphia

E. B. JONES & COMPANY
Municipal and Corporation Bonds
Attractive Underwritings
Correspondence

812 MORRIS BUILDING

Solicited

PHILADELPHIA
62

The PHILADELPHIA
BANK

NATIONAL

PHILADELPHIA

Organized 1803

National Bank 1864

Foreign
Exchange
Bought

Accounts
of

Banks,

Bankers,

and

Mercantile

Sold.

Firms

Letters

and

Corporations

Credit

Invited

Issued

STATEMENT OF CONDITION, SEPTEMBER 1,

1910

RESOURCES

332,002,447.34
9,115,080.36

Loans and Discounts
Due from Banks-

3,019,717.23

Exchanges for Clearing House

11,045,421.07

Cash and Reserve

$55,182,666.00
LIABILITIES

Capital Stock •....
Surplus and Net Profits
Circulation
nreneiTc

DEPOSITS

........

$1,500,000.00
3,932,679.31
1,441,400.00

I Individual. .328,381,604.36
| Bank
19,926,982.33

48,308,586.69
$55,182,666.00

LEVI L.

RUE,

President.
HARRY

LINCOLN GODFREY,
Vice President.

J. KESER,

Cashier.

HORACE FORTESCUE,
Assistant Cashier.

DIRECTORS
N. PARKER

RICHARD ASHHURST,
LINCOLN GODFREY,
GEORGE WOOD,
ALFRED C. HARRISON,
LEVI L. RUE,

SHORTRIDGE, Chairman of the Board.

GEORGE H. FRAZIER,
PERCIVAL ROBERTS, Jr.,
GEORGE H. McFADDEN,
EDWARD T. STOTESBURY,
JAMES F. HOPE,

EFFINGHAM B. MORRIS,
RANDAL MORGAN,
R. DALE BENSON,
SAMUEL REA,
ALBA B. JOHNSON.

The Real Estate Trust Co.
Broad and Chestnut Streets
CAPITAL $4,300,000
Solicits Deposits of Firms, Corporations and
Individuals—Interest Allowed
Is fully equipped to handle all Business
pertaining to a Trust Company,
in its Banking, Trust, Real Estate and Safe
Deposit Departments

George H. Earle, Jr., President
Edw. S. Buckley, Jr., Treasurer
S. F. Houston, Vice-President
William R. Philler, Secretary
John A. McCarthy, Trust Officer
Directors
George H. Earle, Jr.
Edward P. Borden
Frank C. Roberts
James F. Sullivan

Cyrus H. K. Curtis
Samuel F. Houston
William A. Patton
Richard Y. Cook

J. Levering Jones

George Woodward, M. D.
R. Dale Benson

Bayard Henry

August B. Loeb
John Gribbel
Louis J. Kolb

INDEPENDENCE TRUST COMPANY
THE

NORTH

AMERICAN

BUILDING,

CAPITAL $2,000,000.
Transacts

SURPLUS $575,501.

General

Trust

Charles B.
Rodman Wanamaker,
J. Ernest Richards,

Vice-President.
2nd Vice-President.
Board

Charles B. Dunn
Rodman Wanamaker
W. Frederick Snyder
Christian C.

PHILADELPHIA

Company Business.

Dunn, President.
John J. Collier, Treasurer.
Allan Hunter, Ass’t. Treasurer.

Directors.

Robert M. Coyle
Louis S. Fiske

William

Febiger

NEW YORK CORRESPONDENT:

Nevin

John J. Collier
J.

Ernest

John
James Dobson.

Richards

C. Lowry

NATIONAL BANK OF COMMERCE.

West End Trust

Company
PHILADELPHIA
CAPITAL,

$1,000,000

SURPLUS,

$1,050,000

Acts

Safe

Executor, Administrator,
Guardian, Trustee

Deposit Boxes for Rent.

Storage

for Silverware and other Valuables•
Interest allowed upon

Deposits.

BODINE, SONS & CO.
COMMERCIAL PAPER
COLLATERAL

LOANS

NEGOTIATED

129 SOUTH FOURTH STREET

PHILADELPHIA, PA.

The First National Bank
OF PHILADELPHIA
The considerations which should
govern the selection of
agent aside from the necessary factor of strength are .

reserve

SERVICE

TERMS
The service of The First National Bank is

general and specialized facilities of
ual needs of each correspondent.
This service is rendered
consistent with its character.
If you are
to serve

seeking

on a

new or

adaptation of the elastic,
effective organization to the individ¬
an

basis of mutual

enlarged facilities,

profit, that is, bn
we

you.

J. TATNALL LEA, Pres.
W/VI. A. LAW, 1st Vice Pres.

terms

ask the opportunity

THOS. W.

KENTON WARNE, 2nd Vice Pres.

ANDREW, Cashier
CHAS. H. JAMES, Asst. Cashier
F RE AS B.
SNYDER, Asst. Cashier

Capital, Surplus and Rrofits, $3,000,000

E. W. Clark ®, Co.
BANKERS
321 Chestnut Street,
ESTABLISHED

Street Railway Bonds and
Members of the
New York

Correspondents

Philadelphia
1837

Stocks

Philadelphia and New York

j piRST^ATlONAL

BANK

Stock

Specialty

Exchanges

INTEREST ALLOWED ON

DEPOSITS

Cramp, Mitchell & Shober
BANKERS
1411 Chestnut
Members

St., Philadelphia

Philadelphia and New York Stock Exchanges
New York Cotton Exchange

Investment Securities
Drafts and Letters of Credit Issued
of the World

All Parts

Deposits Received Subject to Check, and Interest
Allowed on Daily Balances

The Market Street National Bank
PHILADELPHIA
GEO. D. McCREARY, 2d Vice-President

JAMES F. SULLIVAN. President
GEORGE H. EARLE, JR.. 1st Vice-President

Capital
Surplus

WM. P. SINNETT, Cashier

$1,000,000
1,000,000

CORRESPONDENCE INVITED

ACCOUNTS SOLICITED

COLLECTION FACILITIES FIRST CLASS

EDWARD B. SMITH

8c CO.

BANKERS
N.

Cor.

Broad and Chestnut Sts., Philadelphia
27

Members
and

INQUIRIES

York

High

Philadelphia

Stock

Trust

new

Pine St.. New York

INVITED

grade

FOR

investment

SECURITIES

exchanges

Company of North America

505 CHESTNUT STREET, Philadelphia

Capital and Surplus

$1,050,000.00

DIRECTORS
HENRY

JOS.

BRENGLE,

President.

S. CLARK, Vice-President.

CHAS.

LINEAWEAVER,

Secretary and Treasurer.

Adam A.

James

Joseph C.

Crosby Brown

Harry C.

John Cadw’alader

Pasts Interest

Deposits. Executes Trusts
TeKes Chords of Reel Estate end

Furnishes Letters of Credit

Stfinfi Fund Poye 3 1-2 Per Cent.

Stull, Chairman.

Brengle

Henry G.

Clark,

Jr.

Coxe, Jr.

Edwin S.

Dixon

Engene L*. Ellison

Fraley

Francis
Henry L. Gaw, Jr.
Howard

Samuel F.
.1.

Graham

Richard

Wain

Clement

John

William

Houston

Levering Jones

Edward

Meirs

Newbold

Pepper
F.
D.

Read
Tolatid

Malcolm Lloyd

Joseph R. Waiuwright

John

William

Mcllheuny

Wineor

Thos. A. Biddle & Co.
MEMBERS

Philadelphia Stock Exchange
New York Stock Exchange

Private Wire to New

York

326 Walnut Street

9-12 Real Estate Trust

Building

PHILADELPHIA, PA.

Mellon Rational Sank
PITTSBURGH,

PITTSBURGH,of “The
vast

amounts

industries.
reserve

Nation’s Workshop,”
to finance its

money

Pittsburgh banks

good interest

PA.

requires
varied

many

therefore afford

can

pay

deposits. This bank invites your
offering you perfect service and liberal
balances. An inquiry from
any banker

rates

account,

interest on your
who is interested will be welcomed.

A. W.

R. B.

MELLON, President
MELLON, Vice-President

A. C. KNOX,

W. S.

H. S.

ZIMMERMAN,

CAPITAL AND

LEWIS, Assistant Cashier

A. W.

Vice-President

MITCHELL,

B. W.

McELDOWNEY,

Cashier

Assistant Cashier

SURPLUS, $7,200,000

W. E. BALLARD
D. V. McCONNEL

BALLARD &

McCONNEL

INVESTMENTS
Members

Pittsburgh

Stock

Exchange

COMMONWEALTH BUILDING

PITTSBURGH,
We solicit out of town

THE

PA.

correspondents and furnish any statistical
information
desired on local securities.

BANK

FOR

BANKERS

PEOPLES NATIONAL BANK
CAPITAL

SURPLUS
RESOURCES

$
....

1,000,000
1,850,000
18,000,000

OFFICERS
President
ROBERT WARDROP
Asst. Cashier... ,W. DWIGHT
Vice President
BELL
D. E. PARK
Asst. Cashier
S. CLARKE REED
Cashier....HERVEY SCHUMACHER
Asst. Cashier
FRANK R. FLOOD
With ample
resources, an efficient organization and
an experience of
FORTY-SIX YEARS, this Bank can
give you unusual service

\
70

J. S. & W. S. KUHN, Inc.
INVESTMENT BANKERS
WE DEAL IN BONDS FOR INVESTMENT

PURPOSES ONLY

RAILROAD BONDS!

MUNICIPAL BONDS
WATER WORKS BONDS

TRACTION BONDS

HYDRO-ELECTRIC BONDS

The

correspondence of Banks, Institutions and private investors desiring to
participate in original offerings is invited.

PITTSBURGH

Bank for Savings

PHILADELPHIA

CHICAGO

First National Bank

Building
Real Estate Trust Building

Building

NEW YORK

BOSTON

37 Wall Street

Kuhn, Fisher & Co., Incorporated, 15 Congress Street

OF PITTSBURGH
Depository of the United States
the State of

Pennsylvania

and the City

of Pittsburgh

Capital, $1,800,000
Surplus and Profits, $2,245,000
Deposits, $13,000,000
Accounts of Banks and Bankers

Cordially Solicited

OFFICERS

HENRY C. BUGHMAN, Pre.ident

WILLIAM McCONWAY,
Vice President
JAMES M. YOUNG,
Cashier
The New Home 01 the Second National bank
Avenue and Ninth Street

THOMAS W. WELSH, Jr.,
Vice President
BROWN A. PATTERSON,
Ass't Cashier

at Liberty

SAFE DEPOSIT AND
TRUST COMPANY
OF BALTIMORE
13

Chartered 1864

SOUTH

STREET

Capital, $600,000

Surplus, $1,800,000

Acts as Trustee of
Corporation Mortgages. Fiscal Agent for Corporations and
Individuals, Transfer Agent and Registrar. Depository under
plans of reorganization.
Acts as Executor,
Administrator, Guardian, Trustee, Receiver, Attorney and
Agent, being especially organized for careful
management and settlement of estates
of every character.

Fireproof Building with latest and best equipment for
safety of contents.
Safes for rent in its large fire and
burglar proof vaults, with spacious and well
lighted coupon rooms for use of patrons.
Securities held on deposit for Out of Town
Corporations and persons.
DIRECTORS
MICHAEL JENKINS, President

WALTERS, Vice-Pres’t
WALDO NEWCOMER
SAM’L M. SHOEMAKER
JOHN W. MARSHALL, and Vice-Pres’t NORMAN
JAMES
BLANCHARD RANDALL
JOHN J. NELLIGAN, 3rd Vice-Pres’t DOUGLAS H.
THOMAS E. H.
PERKINS

ANDREW P. SPAMER, Treasurer

GEO. B.

MARYLAND
TRUST

GAMMIE, Asst. Treasurer

rmST NATIONAL BANK
BALTIMORE, MD.

COMPANY
N. W. Comer

Calvert and German
Streets

BALTIMORE, MD.
CAPITAL, $1,500,000
Transacts
1

Interest

General Trust and Banking Business

allowed

on
deposit accounts subject to check.
time deposit accounts.
Acts as trustee
under mortgages of railroads and other
corporations; as de¬

Special rates

positary under plans of re-organization; as financial agent
for the transfer and registration of
stocks and bonds, and
for the payment of interest and
dividends.
A Legal De¬
positary for Court and Trust Funds.
SAFE DEPOSIT

Correspondence

BOXES FOR RENT

and Interviews Invited

OFFICERS
L. S. ZIMMERMAN
J. V. McNEAL
CARROLL VAN NESS
JERVIS SPENCER, JR
IVAN SKINNER
Asst.

President
Vice-President

Capital - - $1,000,000
Surplus and Profits 550,000
Deposits 6,500,000

Secretary
Treasurer
Secretary and Asst. Treasurer

DIRECTORS
JOSIAH L. BLACKWELL.
JOSEPH R. FOARD.
B. HOWELL
GRISWOLD, JR.
GEORGE GARR HENRY.
A. BARTON HEPBURN.
GRIER HERSH.
JOHN T. HILL.

GEORGE C. JENKINS.
J. V. McNEAL.
HENRY C. MATTHEWS.
OSCAR G. MURRAY.
THEODORE E. STRAUS.
D0UGL4S M. WYLIE.
L. S. ZIMMERMAN.

Accounts of banks and bankers solicit¬
ed and handled on favorable terms.
CORRESPONDENCE INVITED
72

Fidelity Trust Company
BALTIMORE, MARYLAND
OFFICERS
EDWIN WARFIELD, President
HARRY NICODEMUS, Secretary and Treasurer
THOMAS L. BERRY, Assistant Secretary and Treasurer
GEORGE L. MAHLER, Assistant Secretary and Treasurer.

1st Vice-President
WHELAN, 2nd Vice-President
JOHN H. WIGHT, 3rd Vice-President

VAN

LEAK BLACK,

THOMAS A.

HOWARD WARFIELD.

Trust

Officer

DIRECTORS
EDWIN WARFIELD,
President.

VAN LEAR BLACK,

Black, Sheridan, Wilson Company.
JOSEPH A. BOLGIANO,

Capitalist.
E. BOOTH,

ALFRED

Capitalist.
HERMAN E. BOSLER,

Capitalist.
DICKEY,

WILLIAM A.

William J. Dickey &

Sons.

CHARLES E. FINK,

Attorney-at-Law.
SOLOMON FRANK,

Capitalist.
FRANK A. FURST,

Dredging Company.

Maryland

President

E. STANLEY GARY,
James S.

Gary & Son.

JOHN S.

GIBBS, JR.,

Preserving Company.
LLOYD LOWNDES,

Gibbs

Banker.

J. V. McNEAL,

and

Baltimore

VIce-Pres.

Railroad.

Ohio

SEYMOUR MANDELBAUM,

Capitalist.
HARRY NICODEMUS,
Treasurer.

ROBERT OBER,
G.

Ober

Sons Company.

GUSTAVUS OBER, JR.,
G.

Ober

Sons

Company.

JOHN WALTER SMITH,

Surry Lumber Company.
SIMON H. STEIN,
Banker.

GEORGE WARFIELD,

Capitalist.
WATSON,

CLARENCE W.

Company.
WHELAN,

Coal

Consolidation

THOMAS A.

Attorney at-Law.

MORRIS

WHITRIDGE,

White & Company.
JOHN H. WIGHT,
Sherwood Distilling Company.

Whitridge,

FIDELITY

CHARLES

AND

TRUST CO.’S

NEW BUILDING,

LEXINGTON

STS.,

BALTIMORE.

This Company acts as Trustee, Transfer Agent, Registrar and Fiscal Agent for Corporations, and as Executor, Administrator, Guardian and Trustee for individuals. Wills
•ared for in burglar and fireproof vaults, free of charge.
Deposits received subject to check, and interest paid on balances. Letters of Credit
on Brown, Shipley and Co. of London, England, and Travelers’ Checks of the United
States Express Co. issued.

1 rUolo*

•

ffps*] f’cf/jfp
[\c(II

Dwelling and business property carefully managed. Rents
periods. Properties rented or sold on commission.
or

Safe Deposit Boxes, affording absolute security
deeds and other papers, are rented at reasonable

Safe Deposit Vaults.
verware

and other valuables taken

30, IOIO

LIABILITIES

RESOURCES
.

for bonds,
prices. Sil¬

storage.

Condensed Statement, June

Loans and Investments,
Cash in Vault and in
Banks

collected for long

Capital, Surplus and

$6,620,447.62

Undivided Profits,

Deposits,

1,163,895.66

$1,736,962.64

6,047,380.64
$7,784,343.28

$7,784,343.28

the

Mali

gU
BUB

IIP 111
i

U( (■l

Fifth-Third National Bank
IN CINCINNATI

|L
||E: |
fkp

IfflEig H

Capital, Surplus and
Resources Over

Profits, $ 4,500,000

Every facility for the satisfactory

WmmX-

22,000,000
handling of bank

accounts

CORRESPONDENCE INVITED

r
THE

National Bank
of Commerce

Norfolk National Bank
Norfolk, Va.

NORFOLK, VA.

U. S. DEPOSITARY

CAPITAL

Capital
$1,000,000
Surplus and Undivided Profits $675,000

$1,000,000
SURPLUS

$650,000
WE INVITE

TAZEWELL

E. T. LAMB

YOUR
ACCOUNT
NATHANIEL

CALDWELL HARDY

A. B. SCHWARZKOPF

President

Vice-President

Vice-President]
W. A. GODWIN

BEAMAN, President.
TAYLOR, Vice-President.

Cashier

HUGH M.
M. C.
R. S.

KERR, Cashier.
FEREBEE, Assistant Cashier.
COHOON, Assistant Cashier.

***•*» nil
ftOMDlK hff 00V

MARKED FEATURES \

Accounts of Banks and Bankers Received
Most Favorable Terms.

Promptness, Courtesy, Safety and Reliability.

National

co"*0***^*

ROBERT OMWIOOIC
mm*.

Savings and Trust Company
WASHINGTON, D. C.

CAPITA L$1,000,000
Incorporated by Special Act of Congress, January 22, 1867
Reorganized under Act of Congress, October, 1, 1890
-

OFFICERS

WILLIAM D.

HOOVER, President.
WOODBURY BLAIR, and Vice-President.
FRANK W. STONE, 3rd Vice-President.
WOODBURY BLAIR.
S. THOMAS BROWN.
JAMES A. BUCHANAN.
WILLIAM A. H. CnURCH.
WALTER C. CLEI’HANE.
WILLIAM V. COX.
WILLIAM B. EDMONSTON.

GEORGE

HOWARD, Treasurer.

CHARLeI C'lAMBORn! Assistant Treasurer.
FRANK

STETSON, Assistant Trust Officer.

DIRECTORS.
GEORGE W. GRAY.
WILLIAM D. HOOVER.
REGINALD S. ITUIDEKOPER.
THOMAS R. JONES.
O. H. P. JOHNSON.
VICTOR KAUFFMANN.
EDWARD McLEAN.

SAMUEL MADDOX.
WILLIAM P. QUICKSALL.
FRANK W. STONE.
WILLIAM H. WALKER.
JOHN L. WEAVER.
HENRY K. WILLARD.

THE

Fourth

HOLSTON
NATIONAL BANK

National

Bank

NASHVILLE, TENN.
CAPITAL

$600,000

KNOXVILLE
UNITED

STATES

DEPOSITARY

and
PROFITS

SURPLUS

Capital, $400,000

$788,027

Surplus and Profits, $150,000
DEPOSITS
OFFICERS

$6,308,889

Joseph P. Gaut, President
D. A. Rosenthal, Vice-President

handling
Tennessee items and respectfully solicit
your business, assuring Prompt Service
We have excellent facilities for

Ralph W. Brown, Cashier
A.

Harmon, Asst. Cashier

and Reasonable Rates.

Our Collection Department is one of the
largest and best equipped in the entire South.

WALTER KEITH, Vice-Pres.
J. S. McHENRY, Cashier.
C. DIBRELL, Vice-Pres. G. W. PYLE, Asst. Cashier.
President.

HOWELL,

CORRESPONDENCE INVITED

FALL, Vice-Pres.

THE
c>

AMERICAN NATIONAL BANK
LOUISVILLE, KY.

of
as

United States

Surplus $250,000

Capital $800,000
Logan C. Murray, Pres’t
R. F. Warfield, Cashier
We

Depositary

Chas. C. Carter, Ass’t Cashier
F. L. Moseley, Ass’t Cashier

your service as reserve agent for banks and
bankers, and have excellent facilities to handle
collections on all parts of the country.
are at

Union National Bank
UNITED STATES DEPOSITORY
WE INVITE THE
BUSINESS OF
BANKS AND BANK¬
ERS DESIRING
EFFICIENT AND

SATISFACTORY
SERVICE

Capital, $500,000

Louisville, Ky.
J. D. STEWART, President.
BASIL DOERHOEFER,

1st Vice-

OTTER, 2d Vice-Pres.
GETTYS, Cashier.
J. H. MERSHON, Asst. Cashier.
W.

SPECIAL
ATTENTION TO
THE

COLLECTION

OF B/L DRAFTS
WE REMIT ON DAY
OF PAYMENT

Surplus and Profits, $550,000
76

FIRST NATIONAL BANK
i—IVI

rvj

Capital $500,000
Surplus and Profits
Deposits $5,000,000
F.
S.

President
E. A. LINDSEY, 2d Vice-Prest.

WATTS,

WILLIAMS, Vice-Prest.

RANDAL CURELL,

Asst. Cashier

FRANK K. HOUSTON,

jfirjst g>abings

reach 85 per cent, of

the hanks direct through our

Transacts
A. M.
W. R.

Business

0. WATTS
D. HOUSTON
Asst.

Vice President

Cashier
Cashier

DEPARTMENT

Quotations
J.

THE

$300,000

BONDS BOUGHT AND

AND
Local

F.
P.

President

BOND

STOCKS

Vice President
HOLDERNESS...

reciprocal correspondents.

TENN.

General Trust Company

SHOOK
COLE

Cashier

JSattfe & ®rust Company

NASHVILLE,

CAPITAL

Cashier

J. R. JOHNSON, Asst.

TENNESSEE COLLECTIONS

SEND US YOUR
For we

$375,000

SOLD

Furnished on Request

W. JAKES, Manager

HERMITAGE NATIONAL BANK
NASHVILLE,

TEININ.

EXCELLENT FACILITIES
FOR

,OOG>

HANDLING COLLECTIONS
ON
FRANK
W.

CUDE

J.
J.

JO.
E.

DIBRELL

GREEN

OTHER TENNESSEE

President

POINTS

Vice-President
Vice-President

Cashier

BRUGH

CUMMINGS

NASHVILLE AND

Correspondence Invited

Assistant Cashier

Isidore Newman &
BANKERS

AND

Son

BROKERS

Established 1868

OF ESTABLISHED STREET RAILWAY, AND
ELECTRIC LIGHTING CORPORATIONS

BONDS

CIRCULARS

APPLICATION

Southern Securities a
212

Specialty
NEW ORLEANS

C4RONDELET STREET

{

"’*>,( •>}

■■

iTfe

THE FIRST NATIONAL BANK
OF HOUSTON, TEXAS
CAPITAL, $1,000,000
0.
J. T.

W. E.

ORGANIZED

COCHRAN, President.

SCOTT, 1st Vice-President.
W.

SURPLUS, $300,000

H. R.

ELDRIDGE, Slid Vioe-President.
COCHRAN, Cashier.

HERTFORD, Asst. Cashier.

F. E.

RUSSELL, Asst. Cashisr.

INVITE

CORRESPONDENCE OF BANKS AND BANKERS
DESIRING
UNEXCELLED FACILITIES FOR
HANDLING COLLECTIONS ON THE STATE
OF TEXAS.

lSUti.

ESTABLISHED 1872

TfiS

FORT

WORTH
NATIONAL BANK
FORT WORTH. TEXAS

Capital, $500,000
($200,000

Surplus, $700,000
.(All

earned)

K. A. VAN

N. HARDING. Vice-President
R. L. ELLISON, Vice-President

earned)

ZANDT, Presiden
R. E.

ELAQ SLEDD, Cashier

W. M. MASS1E, Asst. Cashier

cordially invite the correspondence of Bonks and Bonkers
desiring
efficient and satisiactory service in this
territory

INCORPORATED MARCH

THE

HARDING, Asst. Cashier
E. B. VAN ZANDT. Asst. Cashier

io,

1812.

CHARTER PERPETUAL

PENNSYLVANIA
COMPANY

For Insurances

Lives and

517 Chestnut Street.

CAPITAL

Granting Annuities

Broad Street Office: Franklin Bank

$2,000,000

SURPLUS

Building

$3,500,000

(Trust and Safe Deposit Company)
Invites the accounts of Individuals and
Acts as Executor,

Agent,

Corporations.
Administrator, Trustee, Guardian, Assignee, Receiver,

etc.
Acts as Trustee of Corporation
Mortgages, Registrar and Transfer
Rents Safe Deposit Boxes in
Burglar-Proof Vaults.

Agent.

C. S. W.

PACKARD. President
A. V. MORTON, Treasurer
C. S. NEWHALL, Ass’t Treasurer
JOHN J. R. CRAVEN, Secretary
H. W. GOODALL, 2nd Ass’t Treasurer
JAY GATES, Ass’t Trust Officer
CHARLES OSBORNE, Ass’t Trust Officer
JESSE WILLIAMSON, 2nd, Ass’t Secretary
THOMAS S. GATES, Vice President and
Trust Officer

C. s. W. PACKARD
EDWARD H. COATES
WILLIAM W. JUSTICE

CRAIGE LIPPINCOTT

DIRECTORS

EDWARD S. BUCKLEY
EDWARD MORRELL
ARTHUR E. NEWBOLD
GEORGE H. FRAZIER
ALBA B. JOHNSON

PHILADELPHIA, PA.
78

THOMAS DeWITT CUYLER
GEORGE F. BAER
J. PERCY KEATING
ALFRED C. HARRISON

ATLANTA’S LEADING BANKING INSTITUTION

Atlanta National Bank
ATLANTA, GA.
UNITED

CAPITAL,

STATES

DEPOSITARY

SURPLUS AND PROFITS,
CHAS. E. CURRIER, President.
HUGH T. INMAN, Vice-President.
GEO. R. DONOVAN, Cashier.

$1,000,000
950,000

JAMES S. FLOYD, Assistant Cashier.
J. D. LEITNER, Assistant Cashier.
J. S. KENNEDY, Assistant Cashier.

Accounts

of banks, merchants, corporations and individuals solicited.
Every accommodation given which responsibility and balances warrant.
Correspondence Invited.

FOURTH NATIONAL BANK
ATLANTA, GA.
Capital, $600,000
We

Surplus and Profits, $750,000

cordially invite the business of Banks and Bankers desiring efficient and satisfac¬
tory service in this territory.
JAMES W. ENGLISH, President

JOHN K. OTTLEY, Vice-President
CHARLES I. RYAN, Cashier

WILLIAM O.

WM. T. PERKERSON, Assistant Cashier
JAS. M. THOMAS, Assistant Cashier

CAPITAL

ALLISON

President
R.

and

JONES, JR.

Vice-President

SURPLUS

THOMAS J. LEWIS
Vice-President and Cashier

ROBERT B. MINIS
Assistant Cashier

$1,800,000

EQUIPPED TO SATISFY EVERY REASONABLE WANT OF THE INTERIOR BANKER
79

FIRST NATIONAL BANK
BIRMINGHAM, ALA.
Capital $1,000,000

Surplus and Profits $900,000
Resources $12,000,000

W. P. G.

HARDING. President

J. H. WOODWARD. Vice-President
BARR, Vice-President
THOMAS HOPKINS. Cashier
F- S. FOSTER. Asst. Cashier
THOMAS BOWRON, Asst. Cashier
J. E. OZBURN, Secretary Savings
Dept
J. H

COLLECTIONS
DEPOSITORY OF THE UNITED STATES AN3 STATE OF ALABAMA

RECEIVE

CAREFUL

ATTENTION

SEND US YOUR ALABAMA ITEMS

Pitmtnglwm ®rust
fallings Co.
.

Birmingham,

Capital $300,000
ARTHUR W. SMITH, President
TOM 0. SMITH, Vice-Prest.
W.

H. MANLY, Cashier

Steady adherence

Alabama

Surplus $330,000
.

BENSON CAIN, Ass’t Cashier
C.
E.

COTTEN, Ass’t Cashier
W. FINCH, Ass’t Cashier

to conservative

banking is coupled with

prompt attention to all business.
Collection

accounts

solicited.

One Hundred

and

Eighteen Years Old

HARTFORD NATIONAL BANK
HARTFORD, CONN.
Capital,

....

Accumulated Profits
HAROLD W.

•

STEVENS, President.

FRANK P. FURLONG,

W. S.

Cashier
THE

ANDREWS,

Assistant Cashier.

STRONGEST
ENGLAND

$1,200,000
1,000,000

NATIONAL

OUTSIDE

BANK

BOSTON

NEW

Old Colony Trust Company
boston

CAPITAL, $2,500,000

MAIN

SURPLUS, $10,000,000

BANKING BUILDING, COURT

STREET.

In addition to

conducting a general banking and safe
deposit business the Old Colony Trust Company acts
as

trustee under railroad and other

mortgages and
agent for the transfer and registration of stocks.

The company is also authorized to act in the
administration of
estates in trust with all the
powers that are

given to individuals.

Authorized

reserve

agent for Maine,

Massachusetts and Rhode Island Trust

Companies.

Jefferson Coolidge, Jr., Chairman Executive Committee.
Gordon Abbott, Chairman Board of Directors.
Francis R. Hart, Vice-Chairman Board of Directors.

Philip Stockton, President.
Wallace B. Donham, Vice-President.

Julius R. Wakefield, Vice-President.
Frederic G. Pousland, Treasurer.
Geo. W. Grant, Cashier.
E. Elmer Foye, Manager Credit Department.
Chester B. Humphrey, Secretary.
Joseph G. Stearns, Assistant Secretary.
F. M. Holmes, Trust Officer.
F. M. Lamson, Manager
Temple Place Branch.

BRANCH OFFICE, TEMPLE PLACE.

Webster and Atlas National Bank
OF

BOSTON

Capital
Surplus and Profits

$1,000,000
1,000,000

JOHN P. LYMAN, President.
JOSEPH S. BIGELOW, Vice-President.
ACCOUNTS

BANKS,

CORPORATIONS,

JOSEPH L. FOSTER, Cashier.
ROBERT E. HILL, Asst. Cashier.

FIRMS

AND

INDIVIDUALS

SOLICITED.

The Second National Bank
of Boston
ORIGINAL CHARTER 1832

NATIONALIZED 1864

Capital - Surplus and Profits
Deposits THOMAS P. BEAL, CHARLES F. FAIRBANKS,
THOMAS P. BEAL, Jr.,

President

$2,000,000
2,800,000
23,000,000

Vice-President

T. HARLAN BREED,
JOHN H. SYMONDS,

Vice-President

FRANK H.

WRIGHT,

Cashier

Assistant Cashier
Assistant Cashier

Marine
National Bank
of Buffalo
ran if ai

capital

J Paid in

$500,000.00

Earned

x ,500,000.00

Surplus and Profits
Total Assets

$2,000,000.00

(Earned)

(Over)

1,250,000.00

28,000,000.00

OFFICERS
STEPHEN M.
JOHN J.
JOHN H.

CLEMENT, President.
ALBRIGHT, Vice-President.
LASCELLES, Vice-President.

CLIFFORD HUBBELL, Cashier.
HENRY J. AUER, Assistant Cashier.
NORMAN P. CLEMENT, Assistant Cashier.

DIRECTORS
John

Albright
Stephen M. Clement
Wm.

Chas.
Wm,
A.

Goodyear

Edmund Hayes

Wm.

Gratwick

Chas.

Hotchkiss

Rogers

Correspondence Solicited With
in New York State

Hutchinson
H.

Hugh Kennedy

Keep
George B.

John H. Lascelles
Mathews

View to Business

Canada

FIDELITY TRUST CO.
of

BUFFALO, N. Y.

Over 80% of Assets consists of Cash; State, Municipal and other bonds and Loans
payable on demand secured by collateral.
NO UNSECURED LOANS

GEORGE V. FORMAN, Pres.
ROBERT L. FRYER, Vice-Pres.

EDGAR A.

TAYLOR, Secretary.
HALL, Asst. Secretary.
JOHN M. SATTERFIELD, 2D V. Pres. WALTER L. CURTISS, Asst. Secy.
GEORGE D. SEARS, Trust Officer.
MYRON

Account* of SAVINGS BANKS and RESERVE
of Banks

most

Bankers

are

QUIET ACCOUNTS
especially solicited and will receive
or

Liberal Rates consistent with Sound

Banking

JOHN T. STEELE
FIDELITY BUILDING, BUFFALO

INVESTMENT BANKER
Government, Municipal, Railroad, Traction and Corporation Bonds
and Stocks Bought, Sold and Appraised

LOCAL SECURITIES A SPECIALTY
MEM

$ AMERICAN BANKERS’

ASSOCIATION.

STATB BANKERS’ ASSOCIATION.

First National Bank
ALBANY, N. Y.
CAPITAL and SURPLUS,

$800,000.00
DEPOSITORY
AND

THE

STATE

UNITED

NEW

STATES

YORK

OFFICERS:
FREDERICK A.
HORACE G. YOUNG, Vice-Pres.
JOHN

KEEP

DIX, Vice-Pres.

PART

MEAD, Pres.
JOHN J. GALLOGLY, Vice-Pres.
HUGH A. ARNOLD, Cashier

YOUR

WITH

CORRESPONDENCE

RESERVE

INVITED

dm Trust

(opy

UTICA, N. Y.
Capital, $300,000
Surplus, 200,000

Deposits, 1908, $1,700,000
Deposits, 1910, 3,200,000

WM. I. TABER, President
W. T. DUNMORE, 1st Vice-Pres.

Transacts a General

WM. P. WHITE, 2d Vice-Pres.
F. H. DOOLITTLE, Sec y

Banking and Trust Business

GIVES PROMPT ATTENTION TO COLLECTIONS

J. FRANCIS DAY

JAMES S. SHERMAN

Vice President & Secretary

President

UTICA TRUST &
DEPOSIT CO.
OF UTICA, N. Y.

The Leading Trust Company in
New York State
Resources

Central

Exceed $7,000,000.00

Canadian Investments
Government

Municipal
Industrial

The

enormous

development

in Canada has created

progress

capital,

industrial

very

The

much in

outcome

excess

now

demand for

of the supply.

of this has been the issue of

bonds by many
at rates

of the best industrial companies
yielding from 5% to 6%.

maintain

large organization for the
of investigating the security behind

purpose

Canadian
which

bond

issues and

only offer bonds in

have ourselves invested and have

implicit

confidence.
We solicit

correspondence regarding Canadian

investments.

ROYAL SECURITIES CORPORATIOIL LIMITED

164 St. James Street, Montreal
TORONTO

QUEBEC

HALIFAX

ESTABLISHED

Head Office

18 17

MONTREAL, CANADA

Capital paid

$14,400,000
Rest,
$12,000,000
Undivided profits,
$681,561
up,

BOARD

DIRECTORS

RT. HON. LORD STRATHCONA AND MOUNT ROYAL, G. C. M. G., Hon. Pres.
R. B. ANGUS, President.
SIR EDWARD CLOUSTON, Bart, Vice-President.
E. B. GREENSHIELDS, Esq.
SIR WILLIAM MACDONALD

SIR THOMAS SHAUGHNESSY, K.C.V.O.
DAVID MORRICE, Esq.
C. R. HOSMER, Esq.
A. BAUMGARTEN, Esq.
H. V. MEREDITH, Esq.

JAMES ROSS, Esq.
[ HON. ROBERT MACKAY
SIR EDWARD

CLOUSTON, Bart, General Manager.

The Bank of Montreal has Branches in the Principal Cities and Towns
of Canada, from
the Atlantic to the Pacific; in St. John’s and
Birchy Cove, Newfoundland; in
New York, Chicago and Spokane, and in

London, England

ISSUES

COMMERCIAL AND TRAVELLER’S CREDITS,
AVAILABLE WITH ITS
CORRESPONDENTS IN ALL PARTS OF THE WORLD, MAKES COLLECTIONS AT
ALL
POINTS, AND BUYS AND SELLS STERLING AND CONTINENTAL EXCHANGE AND
CABLE TRANSFERS.

NEW YORK OFFICE
R. Y.

64 WALL STREET

HEBDEN, W. A. BOG, J. T. MOLINEUX, Agents

LONDON OFFICE

F. WILLIAMS

47 THREADNEEDLE STREET
TAYLOR, Manager

The Canadian Bank
of Commerce
Capital $10,000,000

Rest $6,000,000

SIR EDMUND

WALKER, C.V.O., LL. D., D.C.L., President
ALEXANDER LAIRD, General Manager

Established

Head (Mite:

186?

Toronto

THE

CANADIAN BANK OF COMMERCE,
MONTREAL

Having 210 branches in Canada this Bank has un¬
excelled facilities for handling every description
of banking business
throughout the Dominion.
Accounts
received

NEW YORK AGENCY

of American Banks
on favorable
terms
16

SAN FRANCISCO BRANCH

California and Sansome Streets

MEXICO CITY BRANCH

LONDON, ENGLAND, OFFICE

Exchange Place

Avenida San Francisco No. 50
2 Lombard

Street, E. C.

ESTABLISHED

1864

THE MERCHANTS’ BANK
OF CANADA
Head Office:

Capital Paid Up, $6,000,000

MONTREAL

Reserve fund and Undivided Profits, $4,002,157

BOARD OF DIRECTORS
Sir H. MONTAGU ALLAN, President

JONATHAN HODGSON, Esq., Vice-President
C. F. SMITH, Esq.
HUGH A. ALLAN, Esq.
ALEX. BARNET, Esq.
F. ORR LEWIS, Esq.
K. W. BLACKWELL, Esq.

THOS. LONG,
C. M.

Esq.
HAYS, Esq.

E. F.

HEBDEN, General Manager

T. E. MERRETT, Sapt. of Branches and Chief Inspector

ONTARIO.

QUEBEC.

Toronto, Wellington St. West.

Montreal—Head
James Street.

14
“

Pnrliflmonf St
Parliament St.
Dundas St.
Acton
London
Alvinston
Lucan
Athens
Lyndhurst
Belleville
Markdale
Berlin
Meadowvale
Meaford
Both well
“

Brampton

Quebec

Mitchell
Muir kirk

“

Rigaud

Napanee

Creemore
Delta

Oakville
Orillia

Eganville
Elgin

Ottawa
Owen Sound
Parkdale
Perth
Prescott
Preston
Renfrew
Stratford
St. Eugene
St. George
St. Thomas
Tara
Thamesviile

Elora

Finch
Fort William
Galt

Gananoque
Georgetown
Glencoe
Gore Bay

Granton
Hamilton
Hanover

Kincardine

Kingston
Lancaster
Lansdowne

Leamington
Little Current

des Monts
St. Jerome

St. Johns
St. Jovite

ALBERTA.
Acme
Botha
Brooks

Calgary
Camrose
Carstalrs

Daysland
Edmonton,
“

Nam. Ave.

Fox Coulee

Killam
La combe
Leduc

Walkerton
W atford
West Lome

Lethbridge

Westport
Wheatley

Antler
Areola
Carnduff

Gainsborough

MANITOBA.

Gull

Oak Lake

Gladstone
Griswold

Russell

Macgregor
Morris

Napinka

Lake

Kisbey

Neepawa

Carberry

Stettler
Strome
Tofleld
Trochu

Vegreville
Viking
Wain wright
Wetaskiwin
Wolf Creek

(Edson)

SASKATCHEWAN.

Williamstown
Windsor
Yarker

Brandon

Mannville
Medicine^at
New Norway
Okotoks
Olds
Red Deer

Sedgewick

Castor
Clive

Tilbury

Hespeler
Ingersoll

St. Sauveur

Shawville

Chesley

St.

Montreal—1255 St. Cath. St. E.
Montreal—320 St. Cath. St. W.
Montreal—1330 St. Law. Boul.
Montreal—1866 St. Law. Boul.
Beauharnois
Sherbrooke
Laqhine
Ste. Agathe

Mildmay

Chatham
Chatsworth

Office,

Winnipeg

BRITISH

Portage la Pr.

Maple Creek
Melville
Oxbow

Saskatoon
Unity
Whitewood
COLUMBIA.

Elko

Sidney

Nanaimo

Vancouver

Souris

New Westminster

Victoria

Commercial and Travellers’ Letters of Credit

issued, available in all parts of the world. Travellers’
Cheques issued in convenient denominations, payable at par in all parts of the world.
Savings Department at all Branches. Interest paid on deposits at best current rates.

CANADIAN COLLECTIONS.
Having 149 branches in Canada, and very satisfactory arrangements at other points, this Bank’s facilities for making
collections throughout the Dominion are unsurpassed.
Canadian Cash Items negotiated at minimum rates at the New York Agency.
BANKERS IN GREAT BRITAIN.—The London Joint Stock Bank, Limited.
BANKERS IN FRANCE.—Credit Lyonnais.
BANKERS IN GERMANY.—Deutsche Bank.
BANKERS IN UNITED STATES.—New York—American Exchange National
Bank.
Boston—Merchants’
Bank.
St. Paul, Minn.—First National Bank.
Chicago—Northern Trust Co.
Detroit—First National Bank.
Bank of Buffalo.
San Francisco—Anglo and London Paris National Bank.

New York

Agency,

W. M.

RAMSAY,

National
Buffalo—

63-65 WALL STREET
C. J. CROOKALL, Agmtt

The Investment
Trust Company
LIMITED

MONTREAL,

—

CANADA

ACTS AS

Trustee
Transfer

Registrar

Agent

Executor

OFFICERS

DIRECTORS

K. W. BLACKWELL

President

J. P. BLACK

J. P. BLACK
Vice-President

JAMES R. WILSON

A. J. NESBITT

R. MacD. PATERSON

Man. -Director

W. M. DOBELL
N. B. STARK

A. J. NESBITT

Sec. - Treasurer

CANADIAN
Government, Municipal and Corporation

BONDS
To Yield from 4 to 6 per cent.

Bank
of British North America
Established in 1836.

Paid-up Capital

Incorporated by Royal Charter in 1840.

1,000,000

Reserve fund X520,000

HEAD OFFICE —5 Gracechurch Street, London, E.C.
A. G.

WALLIS, Secretary.

W. S. GOLDBY, Manager.

COURT OF DIRECTORS.
J. H. BRODIE, Esq.

FREDERIC LUBBOCK, Esq.
RICHARD H. GLYNN, Esq.

H. J. B. KENDALL, Esq.
G. D. WHATMAN, Esq.

E. A.

JOHN JAMES CATER, Esq.
C. W. TOMKINSON, Esq.

J. H. MAYNE

HOARE, Esq.

CAMPBELL, Esq.

HEAD OFFICE IN CANADA, St. James Street, MONTREAL.
H.
H.

STIKEMAN, General Manager.

MACKENZIE, Supt. of Branches.
J. McEACHERN, Supt. of Central Branches, Winnipeg.
JAMES ANDERSON, Inspector.
O. R. ROWLEY, Inspector of Br. Returns.
E. STONHAM and J. H. GILLARD, Assistant
Inspectors.

BRANCHES IN CANADA
Agassiz, B. C.
Alexander, Man.
Ashcroft, B. C.
Battleforrl, Sask.
Belmont, Man.
Bobca.vgeon, Ont.
Bow Island. Alta.
Brandon, Man.
Brantford, Ont. *
Burdett, Alta.
Cainsville, Ont.
Calgary, Alta.
Campbell ford, Ont.
Darllngford. Man.
Davidson, Sask.
Dawson, Yukon.

Duck Lake,

Sask.
Duncans, B. C.
Estevan, Sask.
Fenelon Falls, Ont.
Fort George, B. C.
Forward, Sask.
Fredericton, N. B.
Girvin, Sask.
Greenwood, B. C.
Halifax, N. S.
Hamilton, Ont.
Hamilton, Ont.,

Ituna, Sask.
Kaslo. B. C.
Kelliher, Sask.
Kingston. Ont.
Levis, I*. Q.
London, Ont.
London, Market Sq.
Longueull, P. Q.
Macleod. Alta.
Midland, Ont.
Montreal, P. Q.

Victoria Ave.
Hamilton. Ont.,

Street.
North Battleford, Sask.

Westingbouse Ave.
Hedley, B. C.

North Vancouver, B.
Oak River, Man.

Ottawa, Ont.
Paynton, Sask.
Prince Rupert. B. C.
Puunichy, Sask.
Quebec, P. Q.
Quebec, St. John’s Gate
Quesuel, B. C.
Raymore, Sask.
Reston, Man.
Rossland, B. C.
Rosthern, Sask.
St. John, N. B.
St. John, N. B., Union

Montreal, St. Catherine

Street.
St. Martins, N. B.
St. Stephen, N. B.

Saltcoats, Sask.

Saskatoon, Sask.
Semans. Sask.
Toronto, Out.
Toronto, Out., Bloor
and I.atisdowne.
Toronto, Ont., King
and Dufferin Sts.

Trail. B. C.

Vancouver, B. C.
Varennes, P. Q.
Victoria, B. C.
Waldron, Sask.
Weston, Out.
West Toronto, Ont.
Winnipeg, Man.
Wynyard, Sask.

Yorkton, Sask.

AGENCIES IN THE UNITED STATES, ETC.
NEW^ YORK, 52 Wall Street.

SAN

FRANCISCO, 264 California Street.

CHICAGO, Merchants Loan and Trust Co.
Foreign Agents—LONDON BANKERS—The Bank of England and Messrs. Glyn & Co.
LIVERPOOL—Bank of Liverpool.
SCOTLAND—National Bank of Scotland, Limited, and Branches. IRELAND—Provincial Bank of
Ireland, Limited, and Branches;
National Bank, Limited, and Branches.
AUSTRALIA—Union Bank of Australia, Limited.
NEW ZEALAND—Union Bank of
Australia, Limited.
INDIA, CHINA and JAPAN—Mercantile Bank of India, Limited. WEST INDIES—Colonial Bank.
PARIS
—Credit Lyonnais.
LYONS—Credit Lyonnais.
MEXICO—Banco de Londres y Mexico and Branches.

Drafts

South Africa and West Indies
Banks’ Branches.

may

be obtained at the

Issues Travellers Credits available in all parts of the World.
Agents in Canada for Colonial Bank, London and West Indies.

Agents in New York for the Banco de Londres Y Mexico, Mexico
City, and Branches.
Telegraphic transfers in Gold sold, and
bills collected on all points in Mexico.

THE DOMINION

COMPANY

BOND

LIMITED

Canadian

Investment Bonds
We have
we are

offering

cent, to

numerous

bonds

on our

list which

yield the purchaser from 4

per

6 per cent.

Owing to our having financed many of the re¬
cent important industrial mergers in Canada, we
are in a position to make special offerings of this
class of securities.
We invite

correspondence in regard to Mu¬
nicipal, Railroad, Public Utility and Standard in¬
dustrial bonds, and shall be glad to furnish enquir¬
ers with full particulars.

HEAD OFFICE: MONTREAL,

Merchants Bank Building

TORONTO, Royal Bank Building
OTTAWA, Citizen Building

The Royal Bank of Canada
INCORPORATED 1869

$10,000,000
5,000,000

-------

5,900,000
76,000,000

Capital Authorized
Capital Paid Up

------

Reserve and Undivided Profits

Total Assets

Head Office, Montreal
H. S.

HOLT, President

HON. DAVID MACKEEN

F. W. THOMPSON

T. J. DRUMMOND

G. R. CROWE

E. L. PEASE, Vice-President
WILEY SMITH
D. K. ELLIOTT

JAS. REDMOND
W. H. THORNE

HUGH PATON
W. B. TORRANCE

E. L. PEASE, General Manager
W. B. TORRANCE, Supt. of Branches

C. E. NEILL and F. J. SHERMAN, Asst. General Managers

STATEMENT TO THE

DOMINION GOVERNMENT
Showing Condition of the Bank

the

30th JULY, 1910
LIABILITIES
Capital,

$5,000,000.00

paid-up

Fund
Undivided Profits
Notes in Circulation

5,700,COO.00
228,393.94
4,435,443.65

Reserve

Deposits
Due

.....

59,151,919.14

..,

912,230.54

other Banks..

$75,427,987.27

ASSETS
Cash on hand
Notes of and Cheques on other
Banks
Due from other Banks.
Government and Municipal Se¬
curities

Railway and other Bonds,
bentures

Call Loans

$8,737,426.75
2,920,351.59
2,402,368.65
1,522,449.58

De¬

and Stocks
Stocks and Bonds

8,270,501.46

8,146,058.35

Deposit with Dominion Govern¬
ment for Security of
Note

235,000.00

Circulation

$32,234,151.38
and Discounts
Bank Premises
Loans

41,504,418.60
1,689,417.29
$75,427,987.27

Collections Receive

Special Attention
throughout CANADA and NEWFOUNDLAND
Branches in CUBA, PORTO RICO and BAHAMAS, also

120 Branches
13

NEW YORK CITY

LONDON, ENGLAND

68 William

2 Bank

Bldgs., Princes St., E. C.
JAS. MACKIE, Manager

Street

S. H. VOORHEES,

Agent

Every Department of Banking Business

CORRESPONDENCE
93

•

SOLICITED

(INCORPORATED 1855)

TORONTO, CANADA

Capital, $4,000,000
W.
D.

ONTARIO.
Toronto (9 Brs.),

Allandale,
Barrie.
Berlin.

Bradford,
Brantford,
Brockville,
Bnrford,
Cardinal,

Cobourg,
Oolborne,

Coldwater,

Reserve, $4,750,000
H. BEATTY, President.

W.
J.

COULSON, General Manager.
BRANCHES

Collingwood,
Copper Cliff,
Creemore,
Dorchester,
Elm vale,

Millbrook,
Newmarket,
Oakville,
Oil Springs,
Omemee,
Parry Sound,
Peterboro,
Petrolia,
Port Hope,
Preston,
St. Catharines,
Sarnia,

Gait,

Gananoque,
Hastings,
Havelock,
Keene,
Kingston,
London (3 Brs.),

Assets, $48,000,000

GOODERHAM, Vice-President.
HENDERSON, Assistant General Manager.

CANADA.

Shelburne,

Point St. Charles,
St. Lambert.

Stayner,
Sudbury,
Thornbury,

MANITOBA.

Winnipeg,

Wallaceburg,
Waterloo,

Benito,

Cartwright,

Welland,
Wyoming.
QUEBEC.
Montreal (3 Brs.),
Gaspe,

Pilot

Mound,
Portage la Prairie
Ros8burn,
Swan

River.
SASK.

Maisonneuve,

Kennedy,

Churchbridge,

Bredenbury,
Elstow,

Sask.
“

Glenavon,
Kipling,
Langenbnrg,
Montmartre,
Vibank,
Wolseley,
Yorkton,
B. C.
Vancouver.
New Westminster, 44
Calgary,
Alta.
Lethbridge,
44

AGENTS IN UNITED STATES.
NEW YORK, National Bank of Commerce.
BUF'FAI O. Manufacturers’ & Traders’ National Bank.
CHICAGO, F*irst National Bank.
ST. LOUIS, National Bank of Commerce.

Union Bank of Canada
HEAD

OFFICE, QUEBEC

190 Branches Throughout Canada
ESTABLISHED

1865

Capital Paid Up

$3,244,800

Rest and Undivided

Profits, Aug. 31,1910,2,466,000
Hon. JOHN SHARPLES

President

WILLIAM PRICE, M. P., Vice-President
G. H. BALFOUR
H. B.

SHAW,

General Manager

Asst. General Manager

PRINCIPAL

CORRESPONDENTS

LONDON—Parr’s Bank Limited
NEW YORK—The National Park Bank

BOSTON—The National Shawmut Bank

CHICAGO—The Com Exchange National Bank
SAN FRANCISCO—The Bank of California, N. A.

Winnipeg Branch Building

Excellent Facilities for making Collections on all points in Canada

THE DOMINION BANK
HEAD OFFICE, TORONTO, CANADA
CAPITAL PAID UP

$4,000,000

RESERVE FUND AND UNDIVIDED PROFITS
TOTAL ASSETS
.
.
.
.
EDMUND B. OSLER, M.P., President.
CLARENCE A. BOGERT, General Manager.

Branches and

WILMOT D. MATTHEWS, Vice-President
H. J. BETHUNE, Superintendent of Branches.

Agencies throughout Canada and United States

Collections Hade and Remitted
AGENTS IN LONDON, ENGLAND
THE NATIONAL BANK OF

5.355.000
61,200,000

for

Promptly

DRAFTS AND LETTERS OF CREDIT ISSUED
UPON ALL PARTS OF THE WORLD

SCOTLAND, Ltd.

Canadian

Our lists
dian

Municipal, Government, and

Corporation

Government,
Municipal and
Corporation Bonds

funds

THREAD NEEDLE

issues,

Bond

Banks,

of the best class of

some

for

suitable

investment

the

Trust and Insurance Companies, Estates
*

and

Private

the

two

The

Investors.

essentials

offer

combine

viz.,

investment,

satisfactory

securities

safety and good interest return.

Correspondence Invited.

WOOD, GUNDY
AG

comprise carefully selected offerings of Cana¬

COMPANY

STREET

KING

LONDON, Eng.

STREET

WEST

TORONTO, Can.
'

•■rtf

of Canada
CAPITAL And SURPLUS,
ASSETS over - -

$6,550,000
$44,000,000

CORRESPONDENTS
LONDON CITY AND MIDLAND BANK

LONDON, ENG.

NATIONAL PARK BANK
MARINE NATIONAL
FIRST NATIONAL

NEW

BANK

YORK

BUFFALO

BANK

CHICAGO

Collections Made

Throughout Canajda
Write

for

booklet

The Traders Bank of

Traders Bank

Building

entitled

To-Day.

Head Office
112 Branches

Toronto, Canada.

Toronto, Ont.
throughout Canada

INCORPORATED 1855

THE MOLSONS BANK
Head Office: MONTREAL

BRANCHES

Capital Paid Up
Reserve Fund
Total Assets Over

CANADA
$4,000,000
4,400,000
44,000,000

JAMES ELLIOT, General Manager
A.

General

Banking Business

Done

SPECIAL ATTENTION GIVEN TO COLLECTIONS
RECEIVED FROM THE UNITED STATES

ESTABLISHED

OFFICE:

HEAD

1874

OTTAWA, CANADA

THE BANK OF OTTAWA
Capital Authorized, $5,000,000.
This bank is in

Capital Paid Up, $3,487,550

Rest and Undivided Profits, $3,943,469

position to undertake any kind of Banking Business and has
special facilities throughout the Dominion for the collection of Commercial Paper.
a

NEW

YORK

BANK OF MONTREAL

AGENTS:
NATIONAL BANK OF COMMERCE

NATIONAL DISCOUNT COMPANY, LIMITED
35*

CORNHILLi

LONDON,

ENGLAND

NATDIS, LONDON.

Coble Address:

ESTABLISHED. 1856.

Subscribed Capital, $21,166,625.

Paid-up Capital, $4,233,325.
Fund, $2,200,000«

Reserve
In 169,333 shores of

$125 each, of which $25 have been paid

up.

Number of Proprietors, 3,419.

Directors
EDMUND THEODORE DOXAT (Dalgety & Co., Ltd.), Chairman.
W. MURRAY GUTHRIE, Deputy Chairman.
LAWRENCE EDLMANN CHALMERS.
WALTER JAMES HERIOT.

(Brown, Shipley & Co.)

(C. J. Hambro & Son.)

FREDERICK WILLIAM GREEN.

SIGISMUND FERDINAND MENDL.

(A. Diinkelsbiihler & Co.)

(F. Mendl & Co.)

FREDERICK LEVERTON

JOHN FRANCIS OGILVY.

HARRIS, M. P
(Harris & Dixon, Ltd.)

CHARLES DAVID SELIGMAN

(Ogilvy, Gillanders & Co.)
(Seligman Bros

Manager
PHILIP HAROLD WADE.
WATKIN W. WILLIAMS.

)
>-

FRANCIS GOLDSCHMIDT.

Bankers
BANK OF ENGLAND.
THE UNION OF LONDON AND SMITHS
PROFIT & LOSS ACCOUNT for the

Dr.

$5
To current expenses, including Directors’
and Auditors’ Remuneration, Salaries,
Income Tax, and all other charges..

Rebate of Interest on Bills
carried to New Account
Reserve

not

Secretary.

Joint Sub-Managers.

CHARLES WOOLLEY.

BANK, LIMITED.

Half-year ending 30th June,

Cr.

1910.

£1 sterling.

$67,041

balance

brought forward from 31st
December, 1909

Gross Profits

due,

$92,105

1,005,811

during the half-year

675,448

Fund

50,000

Six

Months’ Dividend at
rate of Ten per Cent,

the
per

free of Income Tax. .$211,667

annum,

Balance
carried
next account

forward

93,760
305,427

$1,097,916
BALANCE

Dr.

SHEET, 30th JUNE,
$5

To Subscribed

Capital—$21,166,625

Cr♦

1910.

£1 sterling.

$1,458,177

By Cash at Bankers

)

Securities—
and Indian
Government. City
of
London Cor¬

British

viz., 169,333 shares of $125 each.

Capital, paid-up, viz., $25

per

share....

Reserve Fund

poration

$4,233,325

Securities,
including
short

Other

77,400,897

Bills Re-discounted

20,572,731

Rebate
Amount

SSL

credit of

Profit

Account

and

“

2,129,754

Loans at call, short and fixed dates...
Bills Discounted
Interest due on Investments and Loans,
and Sundry Balances
Freehold Premises

675,448
at

le“c^me«TrU.rtee$l2,477,385

2,200,000

Deposits and Sundry Balances

Bonds,

Loss

305,427

14,607,139
8,739,743

79,544,076
538,693
500,000

$105,387,828

On behalf of the Board,
EDMUND T. DOXAT, Chairman.
W. MURRAY GUTHRIE, Deputy Chairman.
We report that we have obtained all the information and explanations which we have required.
We have examined the Securities representing Investments of the Company, those held against Loans
at call, short and fixed dates, and all Bills discounted in hand. We have also proved the Cash
Balances, and verified the Securities and Bills in the hands of Depositors. In our opinion the
Balance Sheet is properly drawn up so as to exhibit a true and correct view of the state of the

Company’s affairs according to the best of our information, and the explanations given to us,
and as shown by the Books of the Company, except that it does not state the amount of Invest¬
ments and Bills placed as security against Deposits.
J. GURNEY FOWLER, F.C.A.,

(Price, Waterhouse & Co.)

1
> Auditors.

FRANCIS W. PIXLEY, F.C.A.,
C
(Jackson, Pixley, Browning, Husey & Co.) J
Approved Bank and Mercantile Bills Discounted. Loans granted upon approved Negotiable Securites.
Money received on Deposit, and Interest allowed at rates advertised from time to time; and for
fixed periods upon specially agreed terms.
35, Cornhill, 6th July, 1910.

Hip

Standard Bank of South Africa, Ltd.
10 CLEMENTS LANE
Head Office—LOMBARD
Paid-up Capital
Reserve Fund
Reserve

STREET, LONDON, E.C.
£1,548,52501 $7,536,153
£1,goo,000 or
$9,246,666
£41645,575 or $22,608,468
£17,690,565 or $86,094,082
£26,509,190 or $129,011,391

.......

Liability of Shareholders

Deposits
Total Resources

Bankers to the Government
of the Cape of Good Hope
and the Britsh Govern¬
ment in the Cape
Colony
and Transvaal.
One

Hundred

and

Sixty
(160) Branches in Cape
Colony, Natal, Transvaal,
Orange River Colony,

Basutoland, Rhodesia,

British Central Africa and
East Africa.

W. H. MACINTYRE
AGENT

55 WALL ST., NEW YORK
Also representing

The Bank of New South Wales
with three
branches
Bank Premises, Cape Town, South Africa

The Yokohama

hundred and six

(306)

throughout Austral¬
asia, Fiji Papua (New Guinea).

Specie Bank, Limited

YOKOHAMA, JAPAN

Capital Paid-up, Yen24,000,000=ReserveFund, Yen 16,600,000
BRANCHES AND
AGENCIES:
Antung-Hsien

Bombay
Changchun

Lyons
Nagasaki
Newchwang

Darien

New York
(Dalny)
Fengtien (Mukden) Osaka
Hankow
Honolulu

Peking
Ryojun (Port Arthur)

Hong Kong

San Francisco

Kobe

Shanghai

Liaoyang

Tiehling

London

Tientsin

Tokyo

HEAD OFFICE: YOKOHAMA

DEUTSCHE

BANK

BERLIN, W.
Behrenstrasse, 9 Ito 13
CAPITAL,

$4-7,4519,000

RESERVE,

M. 300.000.000

$25,172,895

M. 105.736,164

Dividends paid during last

11, 11, 11, 11, 12, 12, 12, 12, 12, 12^

ten years:

cent.

per

BRANCHES

BREMEN,

HAMBURG,
FRANKF0RT-0N-M.,

NUREMBERG,
DRESDEN,
LEIPSIC,
AUGSBURG,
MUNICH,
BRUSSELS,
WIESBADEN,
CONSTANTINOPLE,
and the

DEUTSCHE BANK (BERLIN) LONDON AGENCY,

4 George Yard, Lombard St.,

LONDON, E. C.

Banco Aleman Transatlantico
(Deutsche

Ueberseeleche

Subscribed Capital, $7,143,000
M.

30,000,000

Bank)

Paid Up Capital, $5,357,000

Reserve

Head

22.500.000

Fund, $1,625,000
6.827.000

Office

BERLIN

BRANCHES
ARGENTINA:

BOLIVIA: La Paz, Oruro.

Bahia-Blanca, Buenos Aires, Cordoba, Tucuman.
PERU: Arequipa, Callao, Lima,
URUGUAY: Montevideo.
SPAIN: Barcelona, Madrid.

CHILI:m Antofagasta, Concepcion, Iquique, Osorno,
Santiago, Temuco, Valdivia, Valparaiso.

Bills sent for collection, negotiated or advanced
upon.

Trujillo.

Drafts, cable-transfers and letters of credit issued.

LONDON

AGENTS:

DEUTSCHE BANK (BERLIN) LONDON AGENCY. 4 George Yard, Lombard St., London, E. C.

ESTABLISHED

1836

DIRECTORS:
SIR EDWARD H.

HOLDEN, Bart., Chairman and Managing Director.
BRADSHAW, Esq., London, Deputy-Chairman.

WILLIAM GRAHAM
The Right

Hon. LORD AIREDALE, P.C., Leeds.
Sir PERCY E. BATES, Bart., Liverpool.
CHARLES G. BEALE, Esq., Birmingham.
ROBERT C. BEAZLEY, Esq., Liverpool.
Sir WILLIAM BENJAMIN BOWRING, Bart., Liverpool.
JOHN ALEXANDER CHRISTIE, Esq., London.
Sir G. F. FAUDEL-PHILLIPS, Bart., G.C.I.E., London.

Joint General Managers
Secretary
-

FREDERICK HYNDE FOX, Esq., Liverpool.
SIMPSON GEE, Esq., Leicester.

JOHN HOWARD GWYTHER, Esq., London.
ARTHUR T. KEEN, Esq., Birmingham.
The Right Hon. LORD PIRRIE, K.P., London.
THOMAS ROYDEN, Esq., Liverpool.
WILLIAM FITZTHOMAS WYLEY, Esq. Coventry.

J. M. MADDERS

EDWARD J.

MORRIS

City

MURRAY.

Manager

F.
A.

HYDE.

RUTHERFORD.

Head Office: 5, THREAD NEEDLE STREET, LONDON, ENGLAND.
Telegraphic Address:

PAID-UP CAPITAL

....

“Cimidho, London.”

$19,946,187

RESERVE FUND

DEPOSITS
The

$17,951,568

$358,362,253

Bank has Branches and Sub-Branches in London, the
the principal Cities of the world.

suburbs, and throughout the country.

It also has Agents in all

THE FOREIGN EXCHANGE DEPARTMENT
Telegraphic Address: “Cinnaforex, London.”
ISSUES Currency Drafts on all Cities, Circular Letters of
Credit and Circular Notes payable all over the world:
also
makes
Mail
and
Telegraphic Transfers to all

ESTABLISHES Commercial Credits
available anywhere against the

COLLECTS Foreign Bills.
PURCHASES approved Foreign Bills.

Drafts, &c., may be obtained direct from the Head Office or
Branches, which are always ready to give quotations.

ments.

Cities.

behalf of customers

usual

shipping docu¬

THE SHIPPING DEPARTMENT
Telegraphic Address: “Cinnaship, London.”
Is specially organized to look after Shipowners’ Freight Remittances from, and Disbursements
to, all parts of the World

by mail

cable.

99.

52 William Street, New

York

ORDERS EXECUTED FOR ALL INVESTMENT SECURITIES.

ACT AS

AGENTS OF CORPORATIONS AND NEGOTIATE AND ISSUE LOANS

BILLS OF EXCHANGE, TELEGRAPHIC

TRANFERS, LETTERS OF CREDIT ON
Union

of London & Smiths Bank, Limited, London
Messrs. Mallet Freres & Cie., Paris
Banco Nacional de Mexico
AND ITS BRANCHES

Agents for the Bank of Australasia, the British Guiana Bank, Demerara, etc., etc.

TRAVELERS’ LETTERS OF CREDIT
AVAILABLE THROUGHOUT THE UNITED STATES

THE COMMERCIAL BANK
OF SCOTLAND, Ltd.
Established

1810.

Head Office:

Paid-up Capital,

Reserve Fund,

Pension Reserve Fund,
ALEX.

BOGIE, General Manager.

LONDON OFFICE:

EDINBURGH.

£1,000,000
£900,000
£110,000

JAS. L. ANDERSON, Secretary

62 Lombard Street, E. C.

ALEXANDER ROBB AND GEORGE S.

COUTTS, Joint Managers

General

Banking Business transacted. Circular Notes, Drafts, and Letters of Credit
issued, payable at banking houses in all parts of the world.
With its

168

Branches

located all

over

Scotland, the bank is in

a very

favorable

position to deal with remittance and all other banking transactions on the best terms,
v The bank undertakes
agency business for Colonial and Foreign Banks.

The Union of London & Smiths Bank, Ltd.
HEAD

2 Princes

OFFICE

Street, London, England
STERLING.

AUTHORIZED CAPITAL

£25,000,000

SUBSCRIBED CAPITAL

£22,934,100

PAID UP CAPITAL

£3,554,785

RESERVE FUND

£1,150,000

DEPOSITS & CURRENT ACCOUNTS, 30

SIR FELIX SCHUSTER, BART.,

JUNE, 1910. .£39,724,612

JOHN TROTTER,
Deputy Governor.

Governor.

H. H. HART,
Country and Foreign Man ager

J. E. W. HOULDING,
Manager.
H. R.

HOARE, Secretary.

Agents in all the principal Cities and Towns in the United
Kingdom and Correspondents throughout the world and undertakes the Agency of
Country and Foreign Banks, whether Joint Stock or Private, issues Circular Notes and
Letters of Credit for all parts of the Continent of Europe, America and elsewhere,
effects purchases and sales in all British and Foreign Stocks and Shares, collects divi¬
dends on Stocks and Shares and the half-pay of Officers, Pensions, Annuities, etc., and
undertakes Executorships and Trusteeships.
The Bank has Branches

101

102

THE PATERSON NATIONAL BANK
PATERSON, N. J.
STATES

AND
1

STATE
—"

Capital,
Surplus and Profits,
Deposits, -

■

DEPOSITORY

UNITED

$300,000
375,000
2,400,000

JOHN W. GRIGGS, President
JOHN S. COOKE, Vice-President
ELMER Z. HALSTED, Cashier
DANIEL- H. MURRAY, Ass’t Cashier

Collections

Specialty

Accounts and Correspondence Invited

ESTABLISHED

CAMDEN SAFE DEPOSIT
30,

TRUST COMPANY

™

CAMDEN,
June

1873

1910
LIABILITIES.

RESOURCES.
Time

demand

and

Mortgages
Real
Other
Cash

real estate

and

Bonds

$2,061,400.84
2,110,863.78
2,626,097.63

loans

stocks

$1,000,000
1.020,287.38
6,585,599.29

142,870.59

estate

37.070.2S

interest accrued
deposits in banks

assets,
and

Capital
Surplus and undivided profits (earned).
Deposits

727.374.55

$7,705,886.67
Trust

funds

not

included

the

above,

$7,705,886.67

equipped for the settlement of estates,

Well

of trust

care

funds and other

financial business.

ALEXANDER 0. WOOD, President.
S. SCULL, Vice-President.

JOSEPH LIPPINCOTT, Secretary and Treaiurer.
GEORGE J. BERGEN, Solicitor.

WILLIAM

EPHRAIM

Transacts

ing

and

Interest
Liberal

Bank¬

General

Trust Business.
paid on deposits.
terms

offered

TOMLINSON, Trust Officer.

COMMERCIAL TRUST CO.
of NEW JERSEY

JERSEY CITY, N. J.

for

the collection of out-of-town
checks.

able

are

New

York

change.

avail¬

Deposits

CAPITAL, SURPLUS and PROFITS over $3,000,000.00

Ex¬

OFFICERS

JOHN W. HARDENBERGH, President

ROB’T. S. ROSS, Vice-President
WM.

CORRESPONDENCE SOLICITED

J. FIELD, Secretary and Treasurer
JAY S. PERKINS, Asst. Treasurer
J. RICHARD TENNANT, Asst. Secretary
^

THE

PLAINFIELD
OF

$300,000

0. T. WARING
A. V. HEELY
HENRY A. McGEE

DIRECTORS.

J. HERBERT CASE
Vice-President Franklin Trust Co.,

President
Vice-President
Vice-President

WEINVTTE

FREDERICK GELLER
Attorney and Counsellor-at-Law,

NEW JERSEY

AUGUSTUS V.

JAMES W.
WE

PROMISE
PROMPT

SERVICE.

Farmers’

JACKSON

Loan

Plainfield, N. J.
New York.

New

York, N. Y.

New York.

HEELY
The

COMPANY
DEPOSITS, $2,900,000

OFFICERS:

Vice-Prest.
York.

TRUST

PLAINFIELD, NEW JERSEY

CAPITAL AND SURPLUS,

BUSINESS.

—gggP--—J

■'

Plainfield, N. J.
Trust Co., New

Plainfield, N.
Hoyt Estate, New York.
EDWARD H. LADD, JR
Plainfield, N.
Ladd & Wood, Bankers, New York.
CHARLES W. McCUTCHEN
Plainfield, N.
Holt & Co., Commission Merchants, New York.
HENRY A. MoGEE
Plainfield, N.
Standard Oil Company, New York.

Executor of Jesse

J.
J.
J.

J. HERBERT CASE
H. H. POND
DE WITT HUBBELL

Vice-President

Secretary and Treasurer
Asst. Secretary

WALTER M. McGEE
Standard Oil Company,
CHARLES A. REED

Plainfield,
New York.
Plainfield,
Reed & Coddington, Attorneys.
ISAAC W. RUSHMORE
Plainfield,
Dairy Products, New York.
FRANK H. SMITH
Plainfield,
Register Union Company, Elizabeth, N. J.
SAMUEL TOWNSEND
Plainfield,
President People’s National Bank, Westfield,
CORNELIUS B. TYLER .............Plainfield,
Tyler A Tyler, Attorneys, New York.
LEWIS E. WARING
Plainfield,
Edward Sweet & Co., Bankers, New York.
ORVILLE T. WARING
...Plainfield,
Standard

Oil Company,

New York.

N. J.

N. J.
N. J.
N. J.
N. J.
N. J.

N. J.
N.

C HAST! BED 1804

THE TRENTON BANKING COMPANY
TRENTON,

IN BUSINESS OVER 105 YEARS
Statement June 30, 1910
RESOURCES.
Loans, Discounts and Invest-

LIABILITIES.
±

$3,771,092.14
663,197.47
198,994.11

ments
Due from Banks
Cash and Cash Items

Capital Stock paid in
Surplus and Profits
Due to Banks
DEPOSITS

$4,688,288.72

All business intrusted

promptly made.

$500,000.00

538,484.40
121,363.67

3,473,435.65
$4,688,288.72

this bank will receive the

most

Correspondents in all principal

careful attention. Collections
towns of New Jersey.

OFFICERS:
JOHN A. CAMPBELL. President
ROBERT W. HOWELL, Cashier
Interest

Paid

HENRY W. GREEN, Vice-President
IRA FROST, Asst. Cashier
on

Deposits

WEST SIDE BANK

ORGZlzED

EIGHTH AVENUE AND 34TH STREET, NEW YORK CITY

•

Capital,
$200,000

DIRECTORS
CHRISTIAN
JOSEPH

TIETJEN

STERN

FRANCIS

THOMAS

Surplus,
$1,000,000

LELAND

EDGAR

PRUDEN

STOKES

CHARLES

Please
close

ROHE

GEORGE
THEO.

KARSCH
M.

ity

BERTINE

AUGUSTUS

TIETJEN

banking facil¬

TIETJEN,

Deposit Estab¬

LELAND.

lishment

VICE PRESIDENT

CHARLES
2D

THEODORE
3D

WALTER

new

ROHE.

VICE

proximof this

ities and Safe

PRESIDENT

FRANCIS

the

institution’s

OFFICERS

CHRISTIAN

note

Pennsyl¬

vania R. R.

PRESIDENT

BERTINE.

the
sta¬

tion on Eighth
Avenue and
33d Street.

PRESIDENT

WESTERVELT,

CASHIER

NEW HOME OF THE

WEST SIDE

BANK.

Modern Safe Deposit Vaults
SEPARATE COUPON ROOMS INSURING SECURITY AND PRIVACY
Safe Deposit Boxes for Rent at a Moderate Yearly charge. Storage for Silverware and other Valuables.

Bonbright & Hibbard
ROCHESTER, N, Y.
Members New York Stock

Exchange

Investment Securities
REPRESENTING

WILLIAM SALOMON & CO., NEW YORK

GEORGE LEASK.

JULIAN W. ROBBINS.

EDWIN M. LEASK.

GEORGE LEASK & CO.,
MEMBERS NEW YORK STOCK EXCHANGE,

Bankers,
37 WALL STREET, NEW YORK.
Stocks, Bonds and Investment Securities Bought and Sold

Commission.

INTEREST ALLOWED ON BALANCES, SUBJECT TO DRAFT.

DEALERS IN COMMERCIAL PAPER

106

New York

County National Bank

Comer 14th Street and 8th Avenue, New York
V

City

OFFICERS

Capital, $500,000

Francis L. Leland
President

Surplus and

Christian F. Tietjen
Vice-President

Undivided Profits

James C. Brower

$1,600,000

Vice-President

E. J. Stalker
Cashier

Organized

Lawrence J. Grinnon
Asst.

Bank

State

1855

Cashier

Entered

the National
Bank System 1865

DIRECTORS
WILLIAM CARPENDER
CHRISTIAN F. TIETJEN
FRANCIS L. LELAND
PEDRO R. DE FLOREZ
JESSE ISIDOR STRAUS
JAMES C BROWER

Safe
NEW

YORK

COUNTY

NATIONAL’S

NEW

Deposit Vaults

HOME

Accounts of Banks, Bankers, Firms, Corporations and
Individuals,
Both Large and Small, Invited on Favorable Terms
National, New York State and City Depository

LINCOLN

TRUST

COMPANY

208 FIFTH AVENUE, NEW YORK
BROADWAY and LISPENARD STREET

Capitol and Surplus, $1,500,000

BROADWAY and 72D STREET

OFFICERS
ALEXANDER S.
ABRAM M. HYATT, Vice-President
HORACE F. POOR, Treasurer

WEBB, JR., President
OWEN WARD, Vice-President
BRECKENRIDGE CARROLL, Assistant Treasurer

UIKt^IUKS
«»

Baldwin

Robert Goelet

George C. Boldt
George C. Clark
William C. Conklin
Robert B. Dowling
Stuart Duncan
William Felsinger

Samuel

Iselin
Bradlsh Johnson
Clarence H. Kelsey

V. Hoffman
Abram M. Hyatt

De Lancey

Kountze

George Leask
William G. McAdoo
John P. Munn, M.D.
James Quinlan

Arthur

Irving E. Raymond

107

William Salomon
B. Aymar Sands
Isaac N. Seligman
Louis Stern
Frank Tilford
Owen Ward
Alexander S. Webb,

Jr.

ISLAND LOAN & TRUST
INCORPORATED 1883

CAPITAL, SURPLUS AND PROFITS

$3,000,000.00
TEMPLE BAR,

BROOKLYN, N. Y,

OFFICERS
EDWARD MERRITT, President
DAVID G. LEGGET, Second Vice-President

CLINTON L. ROSSITER, First Vice-President
FREDERICK T. ALDRIDGE, Secretary

WILLARD P. SCHENCK, Assistant Secretary

CHARLES R. GAY, Assistant Secretary

THE PEOPLES TRUST COMPANY

FLATBUSH
TRUST
COMPANY

BROOKLYN, NEW YORK CITY
Capital and Surplus, $2,600,000
Resources

over

$22,000,000

i 8PI \

MAIN OFFICE-FLATBUSH /NO LINDEN AVES.
BRANCH—NEW UTRECHT AVE. AND 54TH ST.

BROOKLYN,] N. Y.

Offers Unexcelled Facilities for
All Banking and Trust Business

SAFE DEPOSIT VAULTS

TOTAL ASSETS $590009000
Officers:
JOHN Z. LOTT

WARREN CRUIKSHANK
ALEXANDER C. SNYDER
HARRISON S. COLBURN
FRANKLIN SCHENCK

JOHN EGOLF
FRED A. UPPOLD. JR.

President
Vice-President
Vice-President

CHARLES A. BOODY
G. DETTMER
HORACE J. MORSE
CHARLES L. SCHENCK
HENRY M. HEATH

Vice-President
Secretary
Assistant Secretary
Assistant Secretary

3rd

WILLIAM A. FISCHER
J. FRANK BIRDSELL
CLARENCE I. McGOWAN

Invites

PRESIDENT
VICE-PRESIDENT
VICE-PRESIDENT
VICE-PRES. & SEC’Y
ASST. SECRETARY
ASST. SECRETARY
..ASST. SECRETARY
ASST. SECRETARY

1st
Jtid

deposits from individuals, firms and corporations, and
seeks appointment as Executor and Trustee.

BICKMORE
BANKERS

CO.

BONDS OF PUBLIC SERVICE CORPORATIONS
CAREFULLY SELECTED FOR CONSERVATIVE
INVESTrtENT TO NET 3i% TO 3|%

30 PINE STREET

NEW YORK

108

OF THE CITY OF NEW YORK
■

,,V

East Side Branch, 122 Bowery

•

*3$ :
fc:

.fegg
>.'&
■;

786 Fifth Avenue

^v'

>1 ‘

-;.;*'

> A'>?

tv v

•

|-if L

A*'^

4 ■

Capital and Surplus, $1,800,000

*
1
>

•? ■

*■&

OFFICERS

/'•V.<

WATKINS CROCKETT, President.

and Treas.
ROBINSON, Secretary.
CHAS. A. FISHER, Ass’t Sec’y and Ass’t Treas.
GEORGE H. BARTHOLOMEW, Trust Officer.
BRADLEY MARTIN, JR., Vice-Pres.

WILLIAM W.

DIRECTORS
J. B. Reichmann

Henry F. Shoemaker
Bradley Martin, Jr.
Tompkins Mcllvaine
Edward R.
Wm.

Samuel H. Kress
Charles Arthur

Watkins

J. Cummins
J. Condon

Moore, Jr.

Baumann

Gustav

Finch

Crockett

Miartin

accounts of firms, corporations and individuals,
assuring all of perfect service and courteous treatment.

•J Invites the

ISSUES TRAVELERS’ CHEQUES
AND LETTERS OF CREDIT
€J Acts

Receiver.

THE

Executor, Administrator, Trustee, Assignee and
®[ A General Banking Business Transacted.

MUTUAL

BANK

Broadway at 33rd Street, New York
CHARLES A. SACKETT, President.
JOHN C. VAN CLEAF, Vice-President.

HUGH N. KIRKLAND, Vice-President A Cashier.
EUGENE GALVIN, Asst. Cashier.

Capital and Surplus

DIRECTORS
RICHARD DELAFIELD,
A.
C.
E.

Andrew J. Connick.
Thomas Dimond.
Otto M. Eidlitz.

$560,000

Chairman.
Lee Shubert.
James Thomson.
John C. Van Cleaf.

Samuel McMillan.

P. W. Kinnan.
W.
A.

Stephen McPartland.
Charles A. Sackett.

Luyster.
McAlpin.

Cornelius Vanderbilt.

Hudson Trust Company
CAPITAL AND SURPLUS OVER $1,000,000

BROADWAY

AND

THIRTY

NINTH

STREET

(METROPOLITAN OPERA HOUSE.)
ELVERTON

CHAPMAN,

president.

LOUIS H. HOLLOWAY, vice prest.
HENRY C.

STRAHMANN, vice prest.

JOHN GERKEN, vice prest.
HENRY G. LEWIS, treasurer.
RICHARD A.

PURDY, secretary.

Accounts solicited on the most
liberal terms consistent
with conservative

Banking

COUNSEL

HOLM, WHITLOCK & SCARFF.

Depositary for New York State and City Funds
109

SAFE

DEPOSIT
VAULTS

FIRST

NATIONAL BANK
Euclid

Avenue

CLEVELAND

The

FIRST NATIONAL BANK
of CLEVELAND
has been assigned by the Comptroller
the number seven, its original charter

number, which designates this institu¬
tion as one of the oldest national banks
in the country.

IF.It has had

uninterrupted period

of healthy, permanent growth since
its organization in 1863, from which it
is safe to conclude that the service
rendered to its customers has been

agreeable and satisfactory.
FI Now ranking as one of the
strongest
financial institutions in the
Middle

West, and with an organization and
equipment that embraces the latest
and best methods of transacting all
branches of business
pertaining to
banking, this bank solicits the accounts
of banks, bankers, firms and
corpora¬
tions.

FI It has

capital of $2,500,000. Sur¬
plus and profits of $1,350,000 and total

resources

$34,000,000.

9
«
«
*
«
$

9
$
9
9
9
$
9
9

ESTABLISHED 1888

Franklin Truft Company

«
9
&
&
*
«
9

140

166 Montague Street, Brooklyn
569 Fulton Street, Brooklyn

Broadway, New York

CAPITAL,

3*1,5500,000

depositary for the inactive funds of individuals, firms, estates
and corporations. Authorized by law to act as Executor,
Trustee, and in every other fiduciary capacity.

«
9

Accounts and

trust

business invited.

HUGH

WILLIAM G. LOW

Bros.,

Co.,

Lines

EDWIN S. MARSTON

Bankers

WILLIAM ALLEN BUTLER
Wallace,

Butler

Brown,

President, Farmers’ Loan & Trust Co.

ALBRO J.

Lawyers

Albro

CHARLES B. DENNY

«
*
9

Treas.

American

Locomotive

HENRY HENTZ
Henry Hentz & Co., Cotton Com.
Merchants

OLCOTT

STEPHEN S. PALMER
President, New Jersey Zinc Co.

Vice-Pres., Manhattan Life Ins. Co.

HENRY E. PIERREPONT
216 Columbia Heights, Brooklyn

CHARLES A. PEABODY
Mutual Life Insurance Co.

President,

JAMES H. POST

9
9
9

Howell, Son & Co., Sugar

GEORGE H. PRENTISS

9
9
9
9
9
9
9
9
9
9
9
9
9

George

Prentiss

MOSES
30

LOWELL M. PALMER
Pres., E. R. Squibb & Sons, Chemicals

The Pullman Co.

WILLIAM B. LANE, M

Newton Co., Lumber

Pres., Long Island R. R. Co.

B. H.

EDWIN PACKARD
241 Henry Street, Brooklyn

HENRY C. HULBERT
Director,

NEWTON

President, Dodge & Olcott Co., Drugs

CROWELL HADDEN

9
*
«
«
*
&

GEORGE

Co.

Vice-President, Brooklyn Savings Bank

Gulf & W. Indies S. S.

Pres. Atlantic,

JOSEPH E. BROWN
Bros.

RALPH PETERS

HENRY R. MALLORY

President, N. Y. Telephone Co.
Blake

Spencer Trask & Co., Bankers

Merchants

UNION N. BETHELL

«
*>
«
9
*8*
«

9
9
9
9
9

CHARLES J. PEABODY

Lawyer

AUCHINCLOSS

Auchincloss

9
9
9
9
9
9
9
9
9
9

TRUSTEES

9
9
9
9

Co.,

TAYLOR

Pine

Street,

New

Brokers

PYNE
York

WILLIAM H. WALLACE
William

Wallace &
Iron

Co., Steel and

ROBERT B. WOODWARD
Hathaway, Smith, Folds & Co., Bankers
ARTHUR KING WOOD
President of the Company

##*******************!»*#«>**&*****#**********<&*********»»*

MANHATTAN
TRVST
COMPANY

Temporary Offices
Offers

services to banks and bankers
seeking a strong reserve connection.
With its large number of Direct Connections
and a modern and well equipped Transit De¬
partment, this bank is thoroughly prepared to
handle Texas collections.
its

FOUNDED

113

BROADWAY

IQ *7 3

CAPITAL AND SURPLUS
TWO MILLION DOLLARS

WALL
J. B. WILSON, Chairman
TENISON, President
R. H.
C. R. BUDDY, Vice-Pres.
J. H.
L. P. TALLEY, Ass’t Cashr. H. P.
E.

STREET

of the Board.
STEWART. Vice-Pres.

ARDREY, Cashier.
MAY, Ass’t Cashr.

FRED HARRIS. Ass’t Cashr.

CORNER

NASSAV

CHARTERED 1822

The Farmers’ Loan & Trust Co.
NOS. 16. 18.20 and 22 WILLIAM STREET
\

•

BRANCH OFFICE. 475 FIFTH AVENUE

NEW YORK
LONDON

PARIS

15 Cockspur St., S. W.
18 Bishopsgate St. Within

41 Boulevard Haussmann

The

Company is a legal depositary for moneys paid into Court, and is authorized to act
trator, Trustee, Guardian, Receiver and in all other fiduciary capacities.

Acts

Executor, Adminis¬

Trustee under Mortgages made by Railroad and other Corporations, and as Transfer
Agent and Regis¬
trar of Stocks and Bonds.
as

Receives deposits upon Certificates of Deposit, or subject to Check, and allows interest

Aanages Real Estate and lends
Will act

Agent in the transaction of

daily balances.

any approved financial business.

Depositary for Legal Reserves of State Banks and also for
Fiscal

money on bond and mortgage.

moneys of the

City of New York.

Agent for States, Counties and Cities.

Foreign Exchange, Cable Transfers.
Letters of Credit Payable Throughout the World.
Statement

at the close of

business

August 31, 1910.

RESOURCES.
Bonds and Stocks, at market value
Real Estate
Bonds and Mortgages
Loans
Cash on hand and in Bank.
Accrued Interest

$32,690,944.09
3,256,433.66
3,421,443.40
56,909,559.61
32,596,219.99
952,953.88

$129,827,554.63
LIABILITIES.

Capital Stock

$1,000,000.00

Undivided Profits

5,984,106.54

Deposits
Interest accrued,

121,983,372.58
860,075.51

Unpaid Dividends, &c

$129,827,554.63
BOARD OF DIRECTORS
HENRY A. C. TAYLOR,
CHARLES A. PEABODY,
WM. WALDORF ASTOR,
OGDEN MILLS,
FRANKLIN D. LOCKE,

J. WILLIAM CLARK,
GEORGE F. BAKER,
A. G.

AGNEW,

SAMUEL SLOAN,

CLEVELAND H. DODGE,
HUGH D. AUCHINCLOSS,
D. H. KING, Jr.,
PERCY A. ROCKEFELLER,
WILLIAM ROWLAND,
EDWARD R. BACON,
AUGUSTUS V. HEELY,

MOSES TAYLOR PYNE,
STEPHEN S. PALMER,
ROBERT C. BOYD,
HENRY HF.NTZ,
H. V. R. KENNEDY,
FRANK A. VANDERLIP,
TAMES A. STILLMAN,

JOHN J. RIKER,
JOHN W. STERLING,

ARCHIBALD D. RUSSELL,
EDWIN S. MARSTON.

OFFICERS
EDWIN S. MARSTON, President. ;

SAMUEL SLOAN, Vice-President.
AUGUSTUS V. HEELY, Vice-Pres. and Sec’y.
WILLIAM B. CARDOZO, Vice-President

CORNELIUS R. AGNEW, Vice-President.
HORACE F. HOWLAND, Asst. Secretary.
ROBERT E. BOYD, Asst. Secretary.
WILLIAM A. DUNCAN, Asst. Secretary.

Bankers’ Convention
section
OF THE

(Commercial

Copyrighted in the

year 1910

pinancial Chronicle.

by William B. Dana Company, in the office of the Librarian of Congress, Washington, D. C.

Vol. 91.

NEW YORK, OCTOBER 15, 1910.

THE CHRONICLE.
The

Commercial

Financial

and

weekly

newspaper of 80 to 96 pages, published in time for the earliest
mall every Saturday morning, with the latest
news by tele¬
graph and cable from its own correspondents

relating to the

added

Sections

Supplements, issued periodically, and which form exceedingly
valuable

adjuncts of the weekly issues.

The Railway

and

furnished without
the Chronicle.
The

Railway

Industrial

Section, issued quarterly, is
charge to ever5r annual subscriber of

extra

Earning

Section, issued monthly, containing
returns of earnings and expenses filed each month
with the Inter-State Commerce
Commission, is also furnished
without extra charge to every annual subscriber.
The State and City Section, issued
semi-annually, is also
furnished without extra charge to
every subscriber of the
the

sworn

Chronicle.
The

Bank and Quotation Section, issued
monthly, is like¬
furnished without extra charge to every subscriber of the
Chronicle.
wise

The Electric
is

also

scriber

furnished

Railway

without

Section, issued three times
extra

year,

charge to every annual

sub¬

Commercial and Financial Chronicle.
these Supplements, others are published from

time

the

Besides

might be at hand, for which the exist¬
ing banking system would be inadequate. The
Committee then appointed, under the chairman¬
ship of Mr. A. B. Hepburn, drew up its recom¬
mendations, which were subsequently submitted
to Congress by Mr. Charles N. Fowler.
In general, the proposals of the Committee’s
emergency

Chronicle

various matters within the scope.
The Chronicle comprises a number

time, like the present Bankers’ Convention Section.
Terms for the Chronicle,
including all the Supplements, are
Ten Dollars within the United
States, Thirteen Dollars (which
includes postage) in Europe, and Eleven and a Half Dollars
in Canada.

report

were

complete index to the advertisements ap¬
pearing in the present issue of the Bankers’ Con¬
vention Section will be found on pages 119 and
120.
BANKERS

AND

THE

CURRENCY

REFORM PLANS.

Currency Committee appointed by the

American Bankers’ Association at its St. Louis

Convention, in October, 1906, carried on perhaps
the most aggressive work in the direction of
currency reform that has been witnessed in the
recent history of the Association.
The subject
itself was uppermost in mind, not
only because of
a number of
years of more or less futile legis¬
lative discussion which had preceded, but because
of the manifest signs, that year, of an overstrain
bank

resources,

because of the exorbitant

figure to which call
Street market

rose

money rates on the Wall
in the last days of 1906, and

because of the general

amount

equal to forty per cent, of their respective bondcirculation, subject to a tax of two and
a half per cent,
per annum; that a further issue,
up to twelve and a half per cent, of each bank’s
capital, should be authorized, subject to a tax of
five per cent.; and that the same reserves as are
now required
against deposits should be carried
against the credit notes. This plan was sub¬
secured

mitted to the Bankers’ Convention held at Atlan¬
tic City in September, 1907—a memorable period
in

our

after

recent

financial

history. Only

few weeks

the

adjournment of that convention, the
panic of 1907 swept over the country.
From one point of view, the grave derangement

of credit which ensued created

feeling that

situation favor¬

reform; from another point of
view, the moment was really unfavorable. Plans
for currency reform,
especially in the field of
bank-note circulation, heaped up on the desks of
Congressmen, of banking and currency commit¬
tees and of

able for currency

INDEX TO ADVERTISEMENTS

The

that the national banks should be

authorized to issue credit notes in

October

WILLIAM B. DANA COMPANY, Publishers
Front, Pine and Depeyster Streets, New York

THE

No. 2,364

critical

the Government’s fiscal officers. The

Currency Committee of the Bankers’

Association

itself reported, at the Denver Convention of

tember, 1908, that

Sep¬

less than ninety-six different
bills had been introduced in
Congress during the
no

preceding session, amending the national banking
law..

Obviously, the difficulty created by such a
was of
getting Congress or any other

situation

body to agree on
Aldrich-Vreeland

single plan.
The so-called
Emergency Currency Bill was
put through as a makeshift, on the professed
ground that another money panic might ensue in
the

following autumn. In its

report to the Den¬
Convention of 1908, the Association’s Cur¬
rency Committee pointed out, as a result of their
ver

knowledge of banking history, that “no financial
panic could immediately follow the crisis of last

CONVENTION.

BANKERS’

114

which would guarantee that no one of
three elements of politics, bankers or special

the
in¬

the part of wisdom to enact
no makeshift legislation, lest such an enactment
for the purpose of supposed temporary relief

nors

serious stumbling-block in the
way of legislation for a comprehensive and care¬
ful correction of the grave defects of our bank¬
ing and currency system.”
Congress, however, took a different view. It
enacted the emergency currency bill, which up to
this date has had no practical results. The pre¬
diction of the Currency Committee, as to the
lethargy which would follow in the discussion of
the subject, was realized.
But Congress did
follow up its makeshift emergency legislation by
naming a Monetary Commission, on which it
placed the task of devising a comprehensive plan
of currency reform. That commission, consisting
of Congressmen, and headed by Senator Aldrich,
has now been in existence for something like two
years. Reporting to the Bankers’ Convention at
Chicago in September of last year, the Chairman
of the Currency Committee stated its hope “that
the National Monetary Commission may suggest
a plan that it may be able to endorse,” and ad¬

day, President Rhett, of the
People’s National Bank of Charleston, S. C.,
urged the expedient of an asset currency limited
by the amount of the issuing institution’s capital,
and protected by a 25 per cent, gold reserve. “The
best bank note currency for this country,” he de¬
clared as his belief, “does not lie in a central
bank, nor in any other organization where power
and discretion vests in any man or body of men
to discriminate in the issue.
It is against the
genius of our government; it is a step towards
centralization that no ingenuity can ever safe¬
guard.
Moreover, it is entirely unnecessary.”
Senator Burton, of Ohio, a member of the Mone¬
tary Commission, in his address to the Los An¬
geles Convention, was much more non-committal
as to the ideal plan than were the other Conven¬
tion speakers, and some of his colleagues on the

fall, and that it

was,,

should prove a

vised that the Bankers’ Association should con¬
tinue its

Currency Committee “for the pur¬

own

pose of representing it in watching developments,
and in conferring with and affording such assist¬
to the

ance

may

National Monetary

Commission

be within its power.”

This review of the National Bankers’ Associa¬
tion’s efforts to stimulate the movement for

cur¬

reform, during the three or four past years,
explains the attitude of this year’s convention at
Los Angeles.
The report of the Committee
frankly states the present year that the matter
must necessarily be left for the time being in the
hands of the Government’s Monetary Commis¬
sion. This attitude seems to us proper and indeed
rency

With the election

inevitable.

over

and

new

Congress assembled next December, the Mone¬
tary Commission may reasonably be expected to
outline its own position in the matter, and, if it
does not at once propose a definite plan of cur¬
rency reform, at all events to engage in thorough
and practical hearings on the question.
The
attitude taken by the Committee of the Bankers’
Association was reflected this year in the pro¬
ceedings of the Convention itself. Speeches made
to the Convention on the subject displayed wide
range of opinion as to the proper expedient for
reform; indeed, it may be said that the discussion
was in the nature of a symposium on the various
shades of opinion.
Mr. Irving T. Bush, Chairman of the New
York Merchants’ Association

Currency Commit¬

tee, expressed his individual conclusion that
“control of our currency by a modified form of
central bank will be the best, and that such a
control can be made to meet all the objections
which have been raised
tem.”

The matter,

itself “into
bank and

against the present sys¬
he thought, seemed to resolve

limitation of the functions of the
method of selecting a board of gover¬
a

terests could

tion

the

control.”

Addressing the Conven¬

same

commission who have hitherto voiced their in¬
dividual

opinions. He laid emphasis on the prin¬
ciples which must be observed, “whatever method
is adopted”; these principles being, first, pro¬
vision for reducing a redundant bank note cur¬
rency as well as for supplying a sufficient one;
second, provision for adjusting amount and life of
outstanding circulation to the needs of trade;
third, provision for “the nearest possible ap¬
proach to absolute security”; fourth, recognition
by bankers of the fact that note issues should be
a service to customers and not a source of profit.
Here is left open a sufficiently wide field for
debate as to the actual plan of reform.
It is
sometimes asked, what is the attitude of the
banking fraternity itself on the question? So far
as can be seen, opinion is divided.
Since the per¬
sonal declaration by Senator Aldrich and Mr.
Vreeland, a year ago,, in favor of the plan of a
central bank, and especially since the partial en¬
dorsement of that plan last autumn by President
Taft, the central bank expedient has undoubtedly
held the center of the stage. To what extent that
particular solution of the question has gained
ground in banking opinion is another question.
Perhaps it would be fairest to say that the ma¬
jority of thoughtful bankers have not yet made
up their minds, and that they are not likely to do
so until a definite and concrete report on the ques¬
tion is before them.
Even in New York

City, there

can

among important bankers is divided.
Some of them strongly favor the central bank

that

opinion

plan. Some of them appear to be opposed to it
in principle. Most of them prefer to maintain a
non-committal position. So far as can be judged
from the various State banking conventions, in¬
terior bankers, in the West at any rate, are in a
general way adverse to * the central bank plan,
unless their objections can be removed by definite
modifications in the plan.
Such considerations
as possible concentration of the country’s banking
reserve in a single place, or the introduction of

doubt

BANKERS’

CONVENTION.

branch

banking into fields already occupied, have,
reasonably or unreasonably, influenced opinion
very widely.
But this throws little light upon the future. It
is easy enough to say that the plan of currency
reform has reached

deadlock for the moment.

But to argue from this that nothing whatever will
be done, would be to stultify one’s self; because
even the hardiest opponents of the central bank

plan

in the opinion that the present sys¬
tem is gravely in need of reform, and that the
existing plan of bank note circulation on the basis
concur

of Government bonds is

for the

peculiar needs of

imperfect and unfitted
our

industrial system.

If it be asked, whether the aggressive move¬
ment for currency reform is shown

by the recent

convention

proceedings to have been abandoned,
decidedly should be that
nothing of the kind has happened. On the con¬
the answer, we think,

trary,

serious
ever

believe that the problem is under more
intelligent consideration to-day than

and

before.

believe,

that its con¬
possible in a much more deliberate
and judicious way, now that popular discussion
moreover,

sideration is

has left behind it the

haphazard and
fantastic theories which sprang into
publicity after
the troubles of 1907, as they always do in
sequel
to

credit crisis.

numerous

For the present, as

the Com¬

mittee of the Association admits, the matter is in
the hands of the National Monetary Commission.
The time has nearly arrived when positive action

by that body will be called for. Whatever their
report, we may depend upon it that the discussion
will at

once

be resumed with all
necessary ac¬

tivity, and that tangible results may be antici¬
pated all the more hopefully, because the discus¬
sion will converge on
a

definite

approval of

opposition to

plan.

115

protection against the hostile aborigines and for
social advantages, quickly followed the founding
of the missions.

In 1781 the Pueblo of Los An¬

founded, its site having undoubtedly
been selected because of the advantages offered
by fertile soil and an abundant supply of water
both for domestic and irrigation purposes. While
raised by the Mexican Congress in 1835 to the
dignity of a “ciudad” (city), its form of govern¬
geles

•?

was

ment

continued that of the Pueblo until 1850,

after the American conquest, when an
Act was passed by the State Legislature incorpor¬
ating the City of Los Angeles.
While Los Angeles became an American city
in name in 1850, it was not much of a city after all;
its population was only 1,610, largely Mexicans
and Indians, and there was not a graded street, a
sidewalk or a water pipe within its boundaries.
The growth and development of Los Angeles
down to 1880 was slow, and the history of the
city and of Southern California during that period
would recount many disasters and disappoint¬
some

years

ments.

Land had little

or no

value.

The cattle

and

sheep industries, the chief industries of the
country, each in turn was practically destroyed
as the result of successive droughts, and a severe
financial depression was experienced.
INFLUENCE OF

RAILROAD

CONNECTIONS.

In 1880 the

population of the city had increased
11,183, and the assessable value of its property
was $7,000,000, the greater increase both in
popu¬
lation and wealth having taken place during the
years just preceding the year 1880, and largely as
the result of the completion of the Southern
to

Pacific Railroad between San Francisco and Los

Angeles in 1876, which

gave the city rail com¬
munication with the outside world for the first

time.

HISTORICAL SUMMARY OF LOS ANGELES
AND LOS ANGELES BANKS.

By Stoddard Jess, Vice-President First National
Bank of Los

Angeles.

Inspired by missionary zeal and with the ob¬
ject of converting the natives to the Christian
religion, the Franciscan Fathers, headed by that
man
of indomitable will and
courage, Father
Junipero Serra, established the first mission in
Southern California at San Diego in 1769.
It
the first link in

a chain of missions after¬
wards located, extending northward to the mis¬
sion of San Francisco Solano, it being so
arranged
that each mission should be separated from its

was

nearest
to

neighbor by one day’s ride on horseback,
provide the traveler passing north and south

safe and comfortable accommodations in which to

spend the night.
The mission of San

Gabriel, just east of the
present city of Los Angeles, founded in 1771, was
the fourth mission founded in the State of Cali¬
fornia. The Pueblo plan of colonization so com¬
mon in Hispano-American countries,
adopted for

The true

awakening of Los Angeles and the be¬
ginning of its rapid growth and development may
be said to have occurred about 1885, on the com¬
pletion of the Atchison, Topeka and Santa Fe
Railroad, the second transcontinental line to build
into Southern California; since which time the
city has forged ahead at a rapid pace, with con¬
stant gain in population and wealth. In 1900 the
population had increased to 102,000 and the total
assessment to $67,000,000.
The census returns
for 1910 will give Los Angeles about 318,000
population, and the assessment value of property
is now $332,000,000, showing an increase in popu¬
lation of 211 per cent., and in assessment value
of property of 394 per cent, in the past ten years.
The Los Angeles of today is an up-to-date
American city, its population is very largely from
the States east of the Rocky Mountains, foreign¬
ers and even native sons being decidedly in the
minority. The people who have been attracted
to

Southern California and have made Los An¬

geles their home are, generally speaking, people
of culture and refinement and fairly well off finan¬

cially, averaging

well

the communities

BANKERS'

116

from which

The men of Los Angeles
are, as a class, active, energetic and loyal in the
last degree to the city and its interests.
The
civic spirit of its citizens is among the best as¬
sets that the city has.
You rarely hear of an
Angeleno contemplating a change of residence;
being satisfied here, he leaves a change to the
ruthless hand of time, and would undoubtedly
stay that if he could.
The building improvements of the city com¬
pare favorably with other cities of the same size.
This is particularly true of the residences; while
not pretentious, they are of varied and pleasing
architectural designs. Lots in the residence sec¬
tions are of good size, and all residences have for
a setting a grass plot and a flower garden.
Los
Angeles is distinctly a city of homes; even the
poorer classes have homes of their own and but
very few are lodged in tenement or apartment
houses. Los Angeles has challenged the admira¬
tion of the world by the courage and spirit of
determination shown in reaching out a distance
of two hundred and forty miles to the eastern
slope of the Sierra Nevada Mountains in Inyo
County for an unlimited supply of pure mountain
water, at a cost of twenty-three millions of dol¬
lars, which will not only provide a supply of
water for a city many times the present size of
Los Angeles, but will incidentally allow the de¬
velopment of over a hundred thousand horse
power of
conduit.

they

CONVENTION.

came.

electrical

energy

along the line of the

By the consolidation of Los Angeles with the
Wilmington, Los An¬

cities of San Pedro and

geles has become a harbor city, and will develop
at a nominal expense one of the best harbors in
the world, securing all the advantages of ocean
transportation.
HISTORY OF BANKS.

history of banking and its development in
Los Angeles has been along similar lines to the
development of the city in general. The first
bank in Los Angeles was organized early in 1868
by Alvinza Hayward of San Francisco and John
G. Downey of Los Angeles, afterwards Governor
of the State, under the firm name of Hayward
& Company and with a capital of $100,000. Later
The

the banking house of Heilman,
Temple & Company was established. Heilman
afterwards became associated with Downey in
the Hjayward & Company bank, which took the
name of the Farmers* & Merchants* Bank.
The Heilman, Temple & Company Bank was
reorganized as the Temple & Workman Bank,
and in 1875 it closed its doors, having made a
lamentable failure owing to gross mismanage¬
ment. The Farmers* & Merchants* Bank nation¬
alized in 1903 as the Farmers* & Merchants’ Na¬
tional Bank, and has continued down to this
day a bulwark of financial strength. Its founder
and President, Mr. Isaias W. Heilman, is also
President of the Wells Fargo Nevada National

in the

same

year

Francisco, and is still regarded as
of the ablest financiers in the State. The sec¬

Bank of San
one

point of age in Los Angeles is the
National, organized as the Commercial

ond bank in

First

Bank in 1875.

banking institutions has gradu¬
ally increased to meet the needs of the city’s
growth in population and in expansion of busi¬
ness, and in 1900 the capital and surplus of all
the banks in the city had increased to $5,000,000,
with a combined deposit of about $23,000,000. At
the present time there are twenty-eight institu¬
tions in the city proper doing a banking business,
including nine National banks, five banks doing
a Commercial business under State Charters, nine
Savings banks, and five doing a Trust business.
The combined capital and surplus of all is $21,350,000, and the deposits now aggregate $120,432,000, showing the phenomenal increase in
capital and surplus of 327 per cent., and in de¬
posits of 423 per cent., for the decade. This
leaves the ratio of capital and surplus to deposits
well within the requirements of the wise pro¬
vision of the new California Bank Act, that the
total deposits of any bank shall not be greater
than ten times the amount of its combined capital
and surplus.
The Farmers’ & Merchants’ National Bank
The number of

its predecessor,
the Farmers’ & Merchants’ Bank, is the oldest
bank in the city, and by the last Comptroller’s
report was shown to have $3,419,826 capital, sur¬
plus and undivided profits, and a total deposit of
$10,749,629. The First National Bank, with a
capital, surplus and undivided profits of $3,018,980, and a total deposit of $14,998,851, has the
under the same management as

most

active business of any

Commercial bank,

doing about 25 per cent, of the business passing
through the Clearing House. The Savings banks
in Los Angeles are growing rapidly, and the city
bids fair to come into prominence as a Savings
Bank city. The two largest Savings banks—the
Security and the German American—show de¬

posits of $27,921,397 and
ly, on July 1, 1910.

$13,926,052, respective¬

THE CLEARING

HOUSE.

of Los An¬
geles was established in 1887, and now has ten
members, the nine National banks and the Broad¬
way Bank & Trust Company.
The Savings
Banks, Trust Companies and the other Commer¬
cial Banks clear through the Clearing House
banks, but maintain a separate organization to
control matters of mutual interest. The records
of the Clearing House show that the clearings for
the yeard900 amounted to $113,000,000, for the
year 1909 to $673,065,726, and for the first six
The

Gearing House Association

$406,599,444, or on
of $813,198,888 for the entire year—a gain

months of the present year
a

basis

cent, for the ten years. The Clearing
House Association employs a special Examiner

of 619 per
to

regularly , examine all

Clearing House banks

BANKERS’
and all banks that clear

banks.

through Clearing House

The results obtained

are

considered to

be of great value in protecting the financial wel¬
fare of the city as well as safeguarding the inter¬
ests of the banks.

Believing that the provision of the National
Bank Act, requiring that National banks should
have a paid-up capital of not less than $200,000
before receiving a charter to do business in a
city the size of Los Angeles, to be wise and
proper, the Clearing House Association made an
arbitrary rule not to grant any bank, whether
operating under a National or a State Charter,
the privileges of the Clearing Hlouse unless the
bank has a paid-up capital of at least $200,000.
The banks of Los Angeles are universally
prosperous, are conservatively managed, and
make fair returns in dividends to their stock¬

Owing to the rapid growth and the
steady expansion of business in all lines, money
is always in active demand and at fair rates. The
development that is taking place in Los Angeles
seems to be measured by the amount of money
available to finance it, and the main responsi¬
bility resting on the bankers is to counsel con¬
holders.

servatism and
too

rapid

use

their influence to prevent a

crude enough; buyers of gold dust,
brokers; private banking firms, then in¬
corporated banks. The national system took root
slowly, for the very fact that California was on a
gold basis made the people look askance on any kind
of paper money, even on the gold notes specially
prepared for their benefit.
Savings banks were started at an early date, and
the deposits grew to proportions sufficient not only
to care for the building demands of San Francisco,
but to finance farm and irrigation enterprises
througout the State, while some of the banks loaned
extensively in the States of Oregon and Washington.
beginnings

COMPARISON OF THE CONDITION OF THE BANKS
APRIL 1906 AND JUNE 1910.
Tot.

April 1906.
14).
6)..

Capital 6k

No.

Clast.

Surplus.

Tot. Assets6k

Bank
Premises.

Loans 6k
Discounts.

Deposits.

Liabilities.

State (Apr.
Nat'l (Apr.

43
10

20,642,361

6,340,314 186,446,291 270,316,937 326,749,104
1,328,807 54,782,780 66,444,584 101,114,750

Total
June 30 1910.
State.
National

59,659,203

7,669,121 241,229,071 336,761,521 427,863,854

42
11

31,564,113 12,282,594 133,431,287 205,451,581 237,165.981
49.256.789 4,381,724 103,736,167 135,412,735 204,087,772

80,820,902 16,664,318 237,167,454 340,864,316 441,253.753

Total
Ine. since 1906.
*

21,161,699

8,995,197

*4,061,617

4,102,795

13,389,899

Decrease.

Bank Clearinos.

14 1906
16 1910

Increase

Balance.

$43,989,807
47,199,342

$4,246,951
4,718,155

$3,209,535

Week ending April
Week ending April

$471,204

gain of nearly thirteen and a half million assets
in four years, is not so important until we remember
that, within a few days after the April, 1906, bank
statements were rendered, there occurred the most
destructive fire of which we have record. Practi¬
A

BANKING IN SAN

FRAN¬

CISCO SINCE THE FIRE.

By James K. Lynch, Vice-President First

National

Bank of San Francisco.

History in San Francisco naturally divides itself
periods: before and after the fire of April
18. 1906, so that, in reviewing the banking situation,
it is instructive to compare the bank statements of
April, 1906, with those made on June 30, 1910. Be¬
fore doing so it may not be out of place to touch
briefly on the growth and development that brought
about the conditions existing on that smiling April
morning when the old San Francisco was blotted out
to make room for a newer and greater city.
into two

cally the entire business section of San Francisco,
including the theatres, hotels, churches, public build¬
ings and banks, was wiped out. Every bank was
burned; the buildings being utterly destroyed, except
in the

frame

SAN FRANCISCO.

that capitalized the San Francisco
large measure from the soil; at first
in actual gold, and then in the products of farm and
forest.
The growing commerce of the city contri¬
buted its share, and the banks were owned and di¬
rected by its citizens. At an early date in its history
San Francisco became the financial center of the Pa¬
cific Coast to which it supplied coin, fresh minted
from the gold dug from the California hills. This
constant supply of gold, together with the machinery
for producing coin, kept California on a gold basis
while the rest of the country struggled with a flood
of irredeemable paper of constantly changing value.

The money
banks came in

It is not to be understood that the San Francisco

into being fully grown and developed.

by which banks have been evolved
through commercial needs was gone through with,
but the time required was much shortened. The

case

of six institutions located in modern steel

buildings, which

were

restored, though at

heavy

expense.
The total loss has been estimated at five hundred

amounted to two

property destroyed
hundred and twenty millions, of

which

than

millions, and the insurance

lions

EARLY HISTORY OF BANKING IN

banks sprang
The process

$
39,016,842

OF SAN FRANCISCO

GROWTH SINCE THE FIRE.
V

were

then money

pace.

GROWTH

117

CONVENTION.

little

one

hundred and

ninety mil¬

paid. Not all of the insurance money was
used in rebuilding; much of it was spent recklessly
by the insured, who found themselves in possession
of more money than they had ever seen before; much
of it was invested in other channels, and a good deal
was used in temporary building.
The actual re¬
building was paid for by the remainder of the insur¬
ance ; loans by three life insurance companies aggre¬
gating about twelve millions of dollars, and the rest
came out of the general resources of the community.
Remembering this, and also the fact that during the
year after the fire came the panic of 1907, and that
since that time We have experienced an active specu¬
lation in country land; that the oil development and
exploration has absorbed a great deal of capital, the
increase in bank assets is really a remarkable evi¬
dence of the prosperity of the people.
was

At the time of the fire the banks were, for the
most

part, housed in old-fashioned buildings of

composite character, in which wood played

im-

118

BANKERS’

Now the bank buildings compare fav¬
orably with any in the world, and are a decided fea¬
ture of the New City, which is as well built and has
as large
a proportion of fire-proof construction as
any city in the country.
The folly of allowing a
city that is surrounded by never failing water, on at
least 85 per cent, of its borders, to be destroyed by
fire has been fully realized, and the auxiliary salt
water fire protection, combining pumping stations
at intervals along the water front, powerful fire boats
and ample reservoirs excavated at street crossings
in the elevated portions of the city, is already so far
completed as to preclude a repetition of such a dis¬
portant part.

aster.
THE NEW BUILDINGS.

The Bank of

California, N. A., the Mercantile
Anglo & London Paris Na¬
tional Bank, among the commercial banks, have
erected buildings of so-called monumental character,
which are beautiful examples of architectural design.
The German Savings and Loan Society, the Hi¬
bernia Savings and Loan Society, the Savings Union
Bank of San Francisco, the Security Savings Bank
and the Union Trust Company own equally beautiful
buildings of the same character.
.

National Bank and the

The First National Bank and the First Federal
Trust Company occupy offices in a combined bank
and office

building of special design, as does also the
Humboldt Savings Bank and the Metropolis Trust

Company.

The Wells

Fargo Nevada National Bank, the
Crocker National, the American National, the West¬
ern National, and the Mutual
Savings Bank are all
well located in steel frame buildings erected before
the fire, and restored and improved since.
Special attention is perhaps due to the French and
Italian Banks, which own and
occupy buildings that
are distinctive and in
every way a credit to their
builders.
INCREASED STRENGTH

OF THE

BANKS.

Without

exception the banks have convenient, well
arranged offices for which, it is true, they paid a
heavy price, not only in money but in the work and
worry of four strenuous years.
Of more import¬
ance than the buildings,
for the strength and security
of the banks, is the increase of capital and the con¬
solidation that has taken place; the
tendency here,
as
elsewhere, being towards fewer banks and
stronger
A

Still

ones.
CLEARING

HOUSE

BANK

EXAMINER.

important is the employment of a Clear¬
ing House Examiner, for which responsible position

CONVENTION.
the banks

fortunate

enough to secure the serv¬
gentleman whose natural capacity, discre¬
tion and training qualify him for. the work in an
unusual degree.
He has been given a free hand in
organizing and conducting his office, and the results
obtained are most satisfactory. The bankers know
that such a disgraceful failure as that of the Cali¬
fornia Safe Deposit and Trust Company, which oc¬
curred during the panic of 1907, and did much to
increase the feeling of unrest, cannot come again.
Any bank that might become temporarily embar¬
rassed, through unusual demands on the part of its
depositors, would receive prompt assistance from the
associated banks, which would be given with a full
knowledge of conditions. The examiner (acting
with the State Superintendent of Banks) has also
much improved the situation by eliminating several
weak and badly managed institutions, which were
started during a lapse of the State banking laws, and
had neither adequate capital nor competent direction
to justify their existence.
ices of

were

PRESENT CONDITION SOUND.

The present

financial condition of San Francisco
is sound; loans for speculation or permanent invest¬
ment have been generally refused, the result
being
that there has been money for all legitimate com¬
mercial needs, and that the harvesting and
marketing
of the abundant crop of grain and fruit has been pro¬
vided for.
Barring the absolutely unforseen and un¬
expected, the deposits in the San Francisco banks,
and those throughout the State, should show a very
substantial increase during the month of October.
THE PROGRESS

MADE.

Contrasting the present outlook with that of four
years ago, the bankers of San Francisco have reason,
to congratulate themselves on what they
have ac¬
complished, and still more have they reason to be
proud of their city and of its citizens for one achieve¬
ment which has received but little notice.
In spite
of the overwhelming nature of the disaster which
overtook the city, the borrowers from the banks
neither failed to pay, nor sought to avoid their debts.
Failures and

compromises were few, and the per¬
centage of losses charged off for the four years fol¬
lowing the fire, has not been much above the aver¬
age. Time was, of course, needed, and was freely
granted; but the proportion of slow paper has been
steadily reduced, and is now not much above what
might be considered normal. Viewed purely from
the commercial side, it is an achievement which
bears eloquent testimony to the character and finan¬
cial strength of our mercantile community.

Index

Advertisements

First National Bank

Atlanta, Ga.
Atlanta National Bank

. f.

Hathaway, Smith, Folds & Co..
Holtz (H, T.) & Co.

Canadian Bank of Commerce...

Commercial

Hornblower & Weeks

Fourth National Bank

Kuhn (J. S. & W.

Hillyer Trust Co

....

Merrill, Cox & Co
McMullin (F. R.) & Co

Baltimore, Md.

(Alex.) & Sons

Continental Trust Co.

Fidelity Trust Co

First National Bank

Maryland Trust

Brown

National Union Bank of Md...

(Wm. A.) & Co

Safe Deposit & Trust Co

Read

Berlin, Germany.
Banco Aleman Transatlantico.

Deutsche Bank

80
80

Birmingham Trust & Savings...

First National Bank

Boston, Mass.
15

Burr

"(Jas. H.) & Co
Randolph (H. H.) & Co
Read (Wm. A.) & Co
Rickards (W. T.) Co
Rollins (E. H.) & Sons
Russell, Brewster & Co
Shoemaker, Bates & Co
Slaughter (A. O.) & Co
Speer (H. C.) & Sons Co

Oliphant

234
1

58
49

58
17
49

Western Trust & Savings Bank

(Rudolph) & Co., Inc.

Kleybolte

229

Hathaway, Smith, Folds & Co.

National Union Bank

83
38
82
1

First National Bank

Old Colony Trust Co.
Read

Rollins

Stone & Webster

233

Webster & Atlas National Bank

83
108

Franklin Trust Co
.

People's Trust Co

Marine National Bank

Camden, N. J.
Camden Safe Deposit & Trust.

30
30

25
25

Louisville, Ky.

76
76

Union National Bank

Des Moines, Iowa.
Des Moines National Bank....

Milwaukee, Wis.
First National Bank

Milwaukee Trust Co

Minneapolis, Minn.
First National Bank

45
45

108
108

Northwestern National Bank..

Union Trust Co

104

Edinburgh, Scotland.
Commercial Bank of Scotland;
Ltd

55
5°

58
236

Fort

Bank...

Com.

Bank

78
33

Rapids, Mich.
Child, Hulswit & Co
Old National Bank

Sav. Bank

Corn Exchange National Bank
Inside Back Cover

Cowan, Kennett & Co
Cutter, May & Co
Devitt, Tremble & Co
Farson, Son & Co

55
55
53
57

Farwell Trust Co
Fort Dearborn National Bank.

57
.

Dominion Securities Corp

Royal Bank

Bank

Molsons

......

101

95
93

First Savings Bank & Trust
Hermitage National Bank

First National Bank

228

105

Orleans, La.
(Isidore) & Son
World's Panama Exposition.230
New

Newman

City.
Babcock, Rushton & Co..,

Transatlantico.

Bank

British North America

Montreal

London, England.
Banco Aleman
Bank

British North America

Bank

Montreal..

Bickmore

Blake Bros. & Co

235

Bonbright

(Wm. P.) & Co

77
231

New York

52
.

Union National Bank

Knoxville. Tenn.
Holston National Bank

Fidelity Trust Co

104

City, Mo.

United States Trust Co

Newark, N. J.

Jersey City, N. J.
Commercial Trust Co

Co.

National Bank

Hanchett Bond Co

Corp., Ltd

Nashville, Tenn.

Fourth

(The)

First National Bank

Canada...

Canada

Royal Securities

Houston, Texas.

Kansas

(N. W.) & Co

Harris (Sanford F.) & Co
Harris Trust & Savings Bank.

Merchants Bank

Havana, Cuba.
Cuba

Montreal

Investment Trust Company

Hartford, Conn.
Hartford National Bank

Bank

Montreal, Canada.
British North America

46
46

Michigan Trust Co

National Bank

Dominion Bond Co. Ltd

First National Bank

48
Trust

Worth, Texds.

Fort Worth National Bank

80
80

People's Bank
100

Commercial

Mobile, Ala.
Central Trust Co

Grand

Colonial Trust & Savings Bank

(Wm. R.) Co
Stilson (Fielding J.) Co
Wilson, J. C
Woodside, C. E
Staats

Halsey

National Bank of California.

People's State Bank

Chicago Savings Bank & Trust.

Fresno, Cal.

Chicago, Ill.
Babcock, Rushton & Co.
Becker (A. G.) & Co
Burr (Geo. H.) & Co
Byllesby (H. M.) & Co

Continental

Minneapolis Trust Co

T.)

National

Savings

84
84

Fidelity Trust Co

and

Hornblower & Weeks

Buffalo, N. Y.

Continental

Trust

Angeles

Long Island Loan & Trust Co.

Steele (John

Los

American National Bank

Detroit, Mich.

Flatbush Trust Co

Hutton

(E. H.) & Sons

Brooklyn, N. Y.

Bank

Otis & Hough

Angeles, Cal.
(James H.) & Co
Los

Denver, Col.

Second National Bank

Africa, Ltd. 98
Union of London &
Smith's
Bank, Ltd
101
Wood, Gundy & Co
95
Yokohama Specie Bank, Ltd.... 98
Standard Bank of S.

Dallas, Texas.

(Wm. A.) & Co
Rollins (E. H.) & Co

Royal Bank of Canada

(N. W.) & Co
(E. F.) & Co

City National Bank

Nye & Turner Co

13
99

Col.

Otis & Hough

Co., Ltd

National Discount

Columbus, Ohio.

Merrill, Oldham & Co

112

Trust Co
International Banking Corp. ...
London City & Midland Bank..
Guaranty

First National Bank

(Wm. P.) & Co

Hornblower & Weeks..

Corp
Farmers' Loan & Trust Co
Dominion Securities

Halsey

Otis & Hough

Bonbright

Deutsche Bank

Citizens National Bank

Cleveland, Ohio.

Colorado Springs,

100

Adams

Fifth-Third National Bank

Bank of Scotland,

Ltd

Cincinnati, Ohio.

(Geo. H.) & Co

71
50
59

First National Bank

Blake Bros. & Co

Eliot National Bank

S.)...........

Northern Trust Co. Bank

Birmingham, Ala.

Page.

Albany, N. Y.

(A. H.) & Co

55
91

87
108
15

120

INDEX TO

ADVERTISEMENTS.—Continued.

Page.

Bonbright (Wm. P.) & Co
Brown Brothers & Co

Brown-Walker-Simmons

...

Page.

Stephens (T. W.) & Co

Union Trust Co
United States Mtge. & Trust Co
United States Trust Co.

Wade, G. K. B
West Side Bank

106

Co.....

Chase National Bank
229
Clark, Dodge & Co
5
Coal & Iron National Bank....
23
Coler (W. N.) & Co

105

Cook (Geo. D.) & Co
Edwards (A. G.) & Sons

Equitable Trust Co

Fisk

112

57
22

(Harvey) & Sons

Fourth National Bank
Franklin Trust Co

111

Halsey (N. W.) & Co

Hodenpyl, Walbridge

Oakland, Cal.
Oakland Bank

Hornblower & Weeks
Hudson Trust Co..

102
10

■*

Omaha, Neb.

Nye & Turner Co

Omaha National Bank

Ottawa, Ont.

Quebec, Canada.
Union Bank

96
92

Knauth, Nachod & Kuhne

19
102

101

Knickerbocker Trust Co...

Ladd & Wood.

Lamarche & Coady

Co.

102

103

16
106

Liberty National Bank
Lincoln National Bank
Lincoln Trust Co
&

Pasadena, Cal.
First

National Bank

Staats (Wm. R.) Co
Union National Bank

103
:

107

Mont¬

gomery

First National Bank

Williams (John L.) & Sons

Rochester, N. Y.
Bonbright & Hibbard
St.

National

Bank

104

Philadelphia, Pa.

Biddle (Thos. A.) & Co

Bodine, Sons & Co
Burr (Geo. H.) & Co

Cassatt & Co
Clark (E. W.) & Co
Commercial Trust Co
Corn Exchange National Bank
Cramp, Mitchell & Shober

Devitt, Tremble & Co

66
61

67
67
53

Ervin & Co.

First

National Bank
Fourth Street National Bank.
Franklin National Bank

60
229

National Bank....1
229
Girard Trust Co. .Inside Front Cover
Halsey (N. W.) & Co
31

Madison Trust Co

109

Maitland, Coppell & Co

100

Independence Trust Co

111

Jones (E. B.) & Co
Kuhn (J. S. & W. S.)
Lybrand, Ross Bros. &

Bank

43
43

Hathaway, Smith, Folds & Co..

Merchants' Bank of Canada.
Merchants' Exchange National
...

Bank

89
23

Muller, Schall & Co.

103

Mutual Bank

109
107

Cuba

101

National Reserve Bank
79
New York County Nat. Bank.
107
New York Life Insurance &
Trust Co
9
.

Oliphant (Jas. H.) & Co

Phenix National Bank
Read (Wm. A.) & Co

22
1

Redmond & Co

Canada

Russell, Brewster & Co

Bank

103

St. Louis Union Trust Co
Third National Bank

ances

Salt Lake City, Utah.
McCornick & Co.

San

Adams

National Bank
Anglo & London Paris National
Bank
Bank

Co.

for

Brown-Walker-Simmons Co

91
32

Canadian Bank of Commerce...
First Federal Trust Co..
First National Bank.
Halsey (N. W.) & Co....

88
29
29
31

Hutton (E. F.) & Co

Rollins (E. H.) & Sons...
Sutro & Co

Wilson

(J. C.)

Seattle, Wash.

Tacoma, Wash.
Osborn, S. C

Lives

Philadelphia National Bank..
Philadelphia Trust, Safe De¬
& Insurance Co..
Real Estate Trust Co
posit

78
63
62

Redmond & Co
Smith (Edward B.) & Co
Third National Bank
Trust Co. of North America
West End Trust Co

Toronto
Canadian Bank of Commerce.
Dominion Bank, Ltd
of

Dominion Bond Co
Dominion Securities

94
.

88
94
92

Corp

65
68

96
96
96

Traders' Bank

Wood, Gundy & Co

Ballard & McConnel
Kuhn (J. S. & W. S.)

Trenton Banking Co

Second National Bank

Canada

Trenton, N. J.

Mellon National Bank
People's National Bank

105

Utica, N. Y.
Citizens' Trust Co
Utica Trust & Deposit Co

85
85

Washington, D. C.

Plainfield, N. J.
Trust

Commerce.

Toronto, Canada.
Bank

Pittsburgh, Pa.

Plainfield

Metropolitan Bank.
Osler & Hammond

104

6.
98

Morris Bros.,
Portland Trust Co
United States National Bank..

36
36
36

Insur¬

Ladd & Tilton Bank

British North America

Standard Trust Co

American

Portland, Ore.
Brown-Walker-Simmons

Africa, Ltd.

Francisco, Cal.

(Jas. H.) & Co

Osborn, S. C.

Paul, Minn.

Magraw, F. E

Shoemaker, Bates & Co
..

National Bank

Smith (Edward B.) & Co
Speyer & Co

38
38

Seaboard National Bank

Mississippi Valley Trust Co..
Inside Front Cover
National Bank of Commerce... 40

Bros

Standard Bank

National

Dexter Horton National Bank.
First National Bank

Mont¬

Market Street National Bank.
Mellor & Petry

Pennsylvania

Morgan (J. P.) & Co
Outside Back Cover

Schafer

gomery

Louis, Mo.

Edwards (A. G.) & Sons

Manhattan Trust Co
Market & Fulton Nat. Bank...
Mercantile Trust Co....
Mechanics' & Metals National

Royal Bank

106

Burr (Geo. H.) & Co
Compton (William R.) Co

St.

Girard

Richmond, Va.

Paterson, N. J.

Paterson

Kimball (R. J.) & Co...
105
Kleybolte (Rudolph) Co., Inc... 21

Nassau Bank
National Bank

Canada

Mechanics'-American

Bank of Ottawa.
Dominion Bond Co., Ltd

109

Hutton (E. F.) & Co
International Banking Corp.
Irving National Exchange Bank
Kidder (A. M.) & Co

Lybrand, Ross Bros.

Savings

Rhode Island Hospital Trust Co.

& Co

Latham, Alexander &
LeAsk (Geo.) & Co.

National Bank of Commerce....
Norfolk National Bank

Hathaway, Smith, Folds & Co..

137

Guaranty Trust Co

Merchants' National Bank....
Miller (Albert P., Jr.)..
17 *
7

Winslow, Lanier & Co
Yokohama Specie Bank, Ltd....
Norfolk, Va.

Farmers' Loan & Trust Co
Farson, Son & Co
Fidelity Trust Co

Providence, R. I.

102

Burr (Geo. H.) & Co
Canadian Bank of Commerce.
Central Trust Co.

Page.

National Savings & Trust Co..
Plant (A. G.) & Co

Riggs

National

Bank

74
75
75

Winnipeg, Canada.
Union Bank

Canada

Yokohama, Japan.
Yokohama Specie Bank, Ltd....

BANKING

SECTION

American Bankers’ Association
Thirty-Sixth Annual Convention, Held
i?

Los Angeles, Oct. 4, 5, 6 and 7, 1910

■,

INDEX TO CONVENTION PROCEEDINGS
Commercial View of

Currency, I. T. Bush Reform, F. B. Anderson

Pacific Coast’s Needs for

Bankruptcy Law, Harold Remington Banker as Public Servant,
Benj. I. Wheeler
Southern View of Currency, R. G. Rhett Work of Monetary
Commission, Theo. E. Burton
Annual Report of the Secretary Annual Report of the Treasurer Report of Protective Committee
Report of General Counsel
-

Page 121
Page 123
Page 125
Page 128
Page 130
Page 134
Page 138
Page 143
Page 144
Page 140

Report of Executive Council
Report of Bill of Lading Committee Report of Committee on Express Companies
Report of Federal Legislative Committee Report of Standing Law Committee Detailed Report of Proceedings Addresses of Welcome President Lewis E. Pierson’s Address Report of Currency Commission Report of Committee on Fidelity Bonds

Page
Page
Page
Page
Page
Page
Page
Page
Page
Page

148
149

153
155
154
157
157

158
154

146

Currency Reform from the Business Man's Standpoint
By Irving T. Bush, Chairman

Currency Committee of The Merchants’ Association

When

discussing our currency system and its needs—a
subject which is as yet but little understood by the gen¬
eral public—it is a
temptation to begin at the very begin¬
ning, when the idea of a bond-secured currency was con¬
ceived to make

a market for the bonds of the
Government,
then difficult of sale,* and show
how, from this false start,
the system has developed its all too

apparent defects. In
speaking today, however, I realize that I have before me
an audience
of trained minds who are not
only familiar
with the history of
currency legislation, but who have suf¬
fered from its defects—1907 is too recent to have been for¬

gotten, and
who

argument is necessary to convince those

then

conducting banks that something is wrong
with the present system, and a
change is needed. I will as¬
sume, therefore, that in asking me to speak to you upon
the currency problem from the
standpoint of a business
man, you do not desire a repetition of arguments
already
were

familiar to you as to

why and where our present system is
fault, but wish to know what the business man wants,
and what he is doing to get it. I am here
to-day as Chair¬
man of the
Currency Committee of The Merchants’ Asso¬
ciation of New York, but
during the last three years that
Committee has had extended correspondence and
repeated
interviews with the representatives of a
large number of
business organizations in other cities and I have some
knowledge of their views, and the work that they are
at

doing.
I wish it

clearly understood, however, that I undertake
speak only for the Association which I represent. I have
decided that the best way to give you
our views and our

reasons

for them is to tell you as

simply

possible how

the

Committee, of which I am Chairman, began its study of
currency, convinced that a central bank could not be suc¬
cessfully adopted for this country, and how three years of
hard study has forced us to the conclusion that a modified
and restricted form of central control will best

classes.

We have been

serve

long time in coming to this

all

con¬

clusion and I wish to make it very clear that I am not
going to argue for a central bank in its usual form, or as
it is

generally understood, but in favor of

bank

limited

in its

of New York.

functions and

safeguarded in its control as to be
acceptable to the American people—and yet a central in¬
stitution which will be recognized by other nations as
rep¬
resentative of this country, and worthy of their
respect.
Such an institution must have some name and I
prefer,
in what I have to say upon the
subject, to call it what it
most resembles—“A Central Bank.”

The

name

makes little

difference, perhaps. So far as I personally am concerned,
other name will do and a great variety have been
suggested, but do we not owe some thought to our inter¬
national relations?
They are becoming each year more
important. We have many interests and investments in
other countries, and their peoples have
many here with us.
They marvel at the progress we have made, but our various
experiments in currency are a source of wonder and some
anxiety to them. If we are to have a central bank, even
with its fangs drawn, do we not
strengthen its position in
the eyes of the world, and thus
help ourselves, by giving it a
name which will be understood at once abroad ?
Today I
will, therefore, use the name “Central Bank,” but the Asso¬
ciation which I represent cares little about the
title, pro¬
vided sound principles are adopted,
will accept any
and
name
satisfactory to this country, which will .command
the full respect of our foreign friends.
Our Committee began its study of the problem in 1907.
We found we were not facing a theory, but the hard fact
that the business man cannot suspend payment and remain
solvent, and that the final stress in time of panic is borne
by those conducting the industries of the country. We made
up our mind at the outset that the acute stage of the panic
of 1907 was because money had been invested in fixed
securities, which should have been held liquid to meet the
requirements of trade. Some financial institutions were
any

loaded

down

with

securities

and

underwritings which
sold, except at ruinous loss, and—remember
this—the very attempt to sell them to relieve the
panic, only
intensified it. It did not take us long to realize that such
a situation was
improper, and that we did not wish a bondsecured currency. We have continued our studies for
nearly
three years, and for a long period held
daily meetings after
could not be

122

BANKERS'

the close of

regular business.

We have entertained

a con¬

ference of business associations from all

parts of the coun¬
try, and have sent out several hundred thousand pamphlets
and circulars.

Two of the members of

our

written

Committee have

monographs for the National Monetary Commission
by invitation. I recite these facts at the direct request of
your Chairman, in order to show to you that business men
are
becoming alive to the importance of this vital question.
After

CONVENTION.
not whether the institution be National

State—a bank

trust company—we

need them all, and the various changes
operating methods which must from time to time be
made to perfect the service, are no part of our currency.
Let us keep our banking system, but provide those con¬
ducting it with efficient machinery to create the currency
which the business man may require in the conduct of his
business and payment of labor.
a

We finally began to ask ourselves what are these ob¬
bond-secured cur¬
rency, we endeavored to find out what basis was used by the
jections to a central control, which cannot be overcome?
One by one, by-process of elimination, we cleared the less
great nations of Europe. We discovered—as you all have in
looking into the subject, that, resting upon a redemption
important objections, and in the end were left with four
fund of gold, the banknote of Europe is largely secured by
which we could not dismiss, and which must be reckoned
forms of commercial paper and bills of exchange represent¬
with.
They were as follows: First, a clearly defined ob¬
ing merchandise in the process of production and manufacjection on the part of many to any central control in the
ture, until it reaches the consumer. Up to this pointNJJhe— hands of the general Government, or in any way subject
to politics.
process is very simple and practically all students travel the
Second, an equally decided fear on the part of
same line of
others to a system which might pass under the control of
thought, and must arrive at the same con¬
clusion. When, however, a remedy for our own troubles is
so-called special interests.
Third, a fear on the part of a
sought, the difficulty begins. We learned that the nations
smaller, but important part of the community that a cen¬
of Europe had adopted a central bank as the best method
tral bank would be a creature of the present banks, and
of control of their currency, but were
used to exact an additional toll of interest.
told that such con¬
Fourth, a
trol was impossible in this country, because of political and
natural doubt
on
the part of the bankers themselves
whether a central bank would not become an important com¬
geographical conditions. The arguments advanced seemed
to us sound.
We dismissed the central bank idea as un¬
petitor for business. We were not content to accept as final
the verdict that these objections could not be overcome.
desirable, and in common with many others began a search
for some form acceptable to the American people. We held
The fact that a central system had been adopted by all
repeated meetings, and invited the authors of various sys¬
progressive nations influenced us to further study if cer¬
tems to meet with us and discuss the methods which they
tain modifications could not be adopted to assure to us the
advocated. As I look back, I remember with hardly an ex¬
best features of all systems, under conditions which would
meet the objections recited. It seemed to resolve itself into
ception, these gentlemen prefaced their remarks by saying,
“Of course, a central bank is the best method, if such a
a limitation of the functions of the bank and a method of
thing were possible in the United States.” We still ac¬
selecting the board of governors which would guarantee
that no one. of the three elements—politics, bankers or
cepted this view. Finally, I said to one of the most emi¬
nent of these authors of currency reforms, “Why, what
special interests could control. I will not weary you with
the details of our discussion, but will ask you to picture to
you have is a central bank under another name.”—“Cer¬
tainly,” he replied, “the greatest central bank ever devised.”
your minds as we have succeeded in doing, a central bank
'‘Why not call it what it is, then?” I asked, and was again
governed by a board composed^ of bankers, a limited num¬
silenced by the statement that the American people
ber of Government officials, and the balance men engaged in
would
not stand for that name.
When I consented to speak here
business, and not identified with either banking or politics,
with its functions limited absolutely to dealing in foreign
today, I asked what I should talk about and was told to
talk to you as a business man, but to avoid the name
exchange in order to protect or build up our gold reserves,
“Central Bank.”
I answered that as a business man and
rediscounting certain approved forms of short-term com¬
representative of an association of business men, I have
mercial paper, and bills of exchange for regularly organ¬
ized financial institutions, and the issuing of banknotes.
patiently studied all sorts of currency schemes, and am
forced to the conclusion that a control of our
All profits above some fixed percentage—say 4 per cent.—
currency
to go to the Government, or be used for some public pur¬
by a modified form of central bank would be the best, and
that such a control can be made to meet all the objections
pose. We wrould like to add the duty of financial agent for
which have been raised.
The assumption that a central
the Government, but that is really another question and it
bank has something to do with crowned heads is absurd.
is my desire to avoid details today, and urge your considera¬
It is the method selected by the
tion of such simple principles as all should agree upon. The
great nations with whom
are
we
engaged in industrial competition.
details are really of less importance, and can and will be
The details
vary, but the general underlying principles are the same.
argued at the proper time. I shall not even attempt to sug¬
It has proved itself a good, piece of
machinery, and as
gest methods of assuring that the board of governors can be
business men, we know that good work cannot be done
selected in the manner I have described.
I can think of
without proper tools. The bankers of the country are not
several, but surely we are not going to admit we cannot
to blame for the recurring currency
devise a system of selection which will accomplish the re¬
stringencies. We have
not given you good machinery for
sult desired. Membership on such a board will be as highly
currency, and our diffi¬
culties would be even greater, were it not for the marvelous
esteemed by the banker and the business man as a position
system of unrecognized currency which you have made pos¬
on the bench of the Supreme Court of the United States
sible by your machinery for the collection and
redemption is by the lawyer today. The one safeguards the final ad¬
of our bank cheques. No country has such a perfect
ministration of our laws by the numberless courts of the
cheque
system, and no nation transacts so large a part of the
country, and the other will supervise the use of our cur¬
business by means of cheques as the people of this
country,
rency.
Place the board in the limelight of public opinion
and when I consider the work of relief which
and make membership worthy of the ambition of any man.
they have
effected, I take off my hat to the American bankers. Are
The limitation of the functions can be absolute.
The
we, however, to be satisfied with anything short of the best ?
rediscounting can be limited to other institutions. The
If we have methods better than those of other countries,
class of paper accepted can be prescribed, and certain en¬
let us keep them, and if other countries have methods bet¬
dorsements required. The issue of notes can be completely
ter than ours, let us acquire them. Build a system con¬
safeguarded and an adequate gold reserve maintained. I
taining the best features to be found here and abroad. avoid details, for they mean discussion. What we need
First, let us protect what we have, and our best asset is
now is agreement upon principles.
I am, however, going
our system of banks.
A central bank operating as a bank,
to answer one question which will rise in the minds of
and dealing directly with the business community, can never
many. It is—why we should adopt even a modified central
take the place of the existing banking system in its close
bank, if the name and form is objectionable to the people,
touch with every merchant in each small community. I care
if some other method of control can be devised? There are

deciding that

did not want

BANKING
number of reasons, but I will give just
had great weight with us: First, a central
success in many countries and any other

two which have

bank is a proven
form will be an
experiment, and we have had enough experiments tried upon
■our currency system.
The advocates of other systems point
to Canada today, and the Suffolk system of long ago, as
proof of their theories. Canada has a limited population,
-and its problems of international finance are insignificant,
compared with those of the United States. The Suffolk
system was in operation in a small territory in early days,
and many

of the present-day problems were then unknown.
systems have in them much to admire, but they are
as yet untried by any great nation.
The second objection
is: Who will exercise the necessary intelligence and power
to protect or build up our gold reserve, unless some central
body be given that right? A machine can be made almost
automatic in its operation, but perpetual motion has never
quite been achieved. The countries of Europe protect and
increase their gold reserve primarily through the variation
of the discount rate. Occasions will arise when somebody,
or some body
of men, must exercise judgment for all. This
means central control.
"Without that exercise of judgment,
the system will fall short of its full usefulness. Another
point of the first importance is the centralization of the
reserve against notes issued.
Scattered among thousands
of banks, they may be as large in the aggregate, but they
cannot be so effective in preserving public confidence as
centered in one great reservoir, where all can see and realize
Both

what stands behind the American banknote.

In times of

peace, an army may be garrisoned at many points, but in
time of danger, the army is mobilized and the confidence
of the people increased by the sight of a vast and effective

force

ready for instant

use.

Nothing inspires public confidence

which can
great reservoir ready
for instant use in time of fire, an army mobilized in time of
war, and a money reserve centralized where all can realize
its immensity in time of panic.
I should like to discuss

be measured in

great

one

as a reserve

mass—a

123

SECTION.
with you many

features, which I leave untouched today—
that this great problem, instead of being intensely
complex, as is popularly supposed, is really based upon
the most simple rules of business.
Let us make up our
minds to clear away our present false foundation, by the
only direct course—a refunding of our Government bonds at
an interest rate which will make them sought as an in¬
vestment.
We cannot get something for nothing and the
people must pay the market rate of interest for the money
the nation borrows.
Today they pay it by increasing the
cost of their currency, just as certainly as by an increase in
the rate of interest upon the bonds of the Government.
Let us be done with so-called “Clever Finance,” and go
back to simple methods of paying a fair rate of interest
for money we borrow, and have a currency as nearly taxfree as may be—a tax upon currency is a tax upon in¬
dustry. The geographical extent of the country will of
course
compel the administration of the bank through
to argue

branches located at convenient centers.

Each branch will

act under the direction of the central board

bank for

central

tributary to it. The function of these
by the powers given the central
institution and the branches will exist in your midst, not as
competitors, but as pieces of machinery controlled by a cen¬
tral station, by means of which you can, in time of need,
convert your sound assets into currency to meet the trade
requirements of the communities which you serve. Some
power of central control is now included in nearly all plans
for reform—either through a central board, or a general
committee, and as a last word, I ask if it is not straining
at a gnat and swallowing a camel, to attempt to
develop
an untried system for the control of our currency—the life
blood of our industrial world—and then to put at the head
of this system a committee, against which can be advanced
all the objections which are urged against the board
of governors of a central bank?
If we cannot safely
delegate the necessary power to one, we cannot to the
a

zone

branches will be limited

other.

The Need of Banking and Currency Reform.
By Frank B.

Anderson, President Bank of California, N. A., San Francisco.

I have been asked to talk to you on
need for

banking and

the Pacific Coast’s

reform.
Our need of a better banking and currency system is as
keen as that of the rest of the country—in some respects
we feel the need more
keenly than those of you who have

your

currency

strain during the fall months, for the

reason

that

we are

called upon

to finance moving crops throughout the entire
Strikes, delays in transportation and other causes
year.
often complicate the situation seriously—one crop getting
in the way of another, in spite of the utmost ingenuity
the banks are capable of exercising under the present bank¬
ing system. The crops must be moved, consequently the
merchants and other clients must at times be curbed in the
exercise

worries

and

their

legitimate business while the banker
a
over
system which turns what
should be his most liquid assets (drafts against moving
products, sold and on their way to market) into fixed
assets—as firmly fixed, for the time being, as though he
wonders

he had loaned the money on real estate.

Your cotton bill

lading situation is threatening to turn a liquid asset
into fixed one and is causing the same anxiety that we
patiently struggle under in connection with the move¬
ment of products to domestic points.
You are moving
heaven and earth to retain the liquid nature of your cot¬
ton drafts, but apparently fail to see that we can provide
machinery to use our products, which are sold and moving
within our borders,
in just as intelligent a manner.
The cotton shipper can sell his drafts because of the dis¬
count system in London, not by reason of any note issu¬
ing power of the Bank of England.

For

years

have been

aware

that there

was

some¬

thing radically

wrong with our banking system, and your
association from time to time, has appointed committees
to evolve some plan which would make the
system more

responsive to the demands of business, and better able to
exercise controlling influence on those demands so as to
curb inflation before it
and

another,

and

none

reached

crisis. For

one

reason

of the suggested plans has been adopted,

have drifted

along with the old system, period¬
ically getting into trouble, and invariably abandoning the
system when the crisis came. In desperation, with nothing
on the statute books to
justify us, we have turned our
houses into crude central banks and saved the
Clearing
situation. It is true that we have forced ruinous
liquida¬
we

tion and allowed many solvent clients to fail—I say solvent
for the reason that many of us can call to mind con¬

which have to

suspend, resuming after the crisis had
passed, and paying dividends within six months or a year.
There is no question, however, that by throwing our re¬
strictive banking system overboard and adopting an ex¬
pansive one, we have restored confidence, put an end to
the competition between the banks and the public, in
which each had been trying to see which could lock
up
the most money—the one in its vaults and the other in the
safe deposit boxes—and we have done so by
supplying a
circulating medium to replace that which has been locked
up, and by giving ourselves the ability and courage to re¬
spond to the absolutely necessary demands of our clients.
As far as I know, no one has suffered any loss from
these so-called Clearing House certificates;
they have been
cerns

124

BANKERS'

used between the banks and

by the public, have performed

their work and been returned to be cancelled in
few months.

Perhaps the

the statute books

their

very

strongest safeguard,

long

are

satisfied that

was

very

nothing

authorizing their existence has been

that fact has driven them

home the minute their work
I

fact that there

have

done.

was
a

sufficient circulating medium

as we have confidence, and we have confidence until
forced to stop loaning to our clients.
Our circu¬

lating medium is unquestionably improper, because it does
not

respond to the demands of business, and too large a
proportion of it is based on debt, with no reserve of gold
back of it. It is true that the Government is pledged to
keep all forms of money on a par with gold, but it is also
true that the great increase in National bank note circu¬
lation will jeopardize the Government’s ability to re¬
deem this pledge in any great international crisis, if, in¬
deed, it has not already done so. If the National bank
notes sought redemption when the strain of the fall de¬
mand throughout the country was over, they would cease
to be

it is

menace,

but the banks take out the notes because
so. The margin of profit is very nar¬

profitable to do
and

be made only when the notes

are kept in
circulation, consequently every ingenuity of the executive
officers is employed to keep them from being redeemed.
row,

can

Elasticity in National bank circulation can be accom¬
plished, but the result would be further shrinkage in the
value of Uunited States bonds,
entailing great loss on the
National banks, and these banks have already been called
upon to assume a loss of many millions on their holdings.
To my mind the question of emergency
currency or any
additional currency is secondary to the main
What
lar

need is

return

some

the

plan that will make

central

reserve

cities

necessity.
every idle dol¬

bank, where it will naturally be sought by

any

central

section of

the country that has work for it to do.

We need

lending power to be called into use,
panic is in full swing, but to meet legitimate
borrowing demands which, if not met, will lead us into a
panic, and I believe we can obtain this power by taking
steps to encourage and build up a discount system, which
can be done without
establishing a central bank, and with¬
out interefering with the banks now in existence.
not when

reserve

We bankers who have to sit out

the

firing line want the

privilege of dealing with the central reserve cities, and
particularly New York, with the same facility that we
deal with
cities

London, Paris and Berlin.

The central

reserve

not

performing the functions of financial centers
they
merely giving us safe places to keep part
of our reserves and paying us 2 per cent, thereon.
To
earn this 2
per cent., they sometimes get our funds locked
up so that they make the whole country feel uneasy when
we begin
to use our balances for the very purpose for
which they were kept idle.
Many writers deplore the
fact that interest is paid on these balances,
saying that it
attracts money that would otherwise
stay at home, but
idle money will seek rewards where it can do so
safely, and
I do not criticise the central reserve cities for
paying in¬
terest on balances, but for paying too much at one time
are

to us;

are

and too little at another.

discount market

were

I believe that

by an amendment to the National Bank
Act, allowing National banks to accept time paper (con¬
fining this power, if you wish, to National banks in re¬
serve

the

cities and central

central

reserve

cities

cities—and I believe that

would

sufficient),

you

will

lay the foundation on which will spring up a large dis¬
count market, and at one stroke put New
York and the

the other central

they will
throughout the
country, State and National, will provide the largest mar¬
ket for first-class acceptances and discount companies will
spring up in New York and Chicago as soon as the oppor¬
tunities which will be developed are recognized, and I be¬
lieve will attract money from England, Germany and
France. The National Discount Company was established
in London about 1856 and was received very coldly by the
London banks as an unnecessary competitor; however, it
grew and now has a paid-up capital of £850,000 and an
reserve

cities

become real financial centers.

earned

basis where

The banks

£430,000. The Union Discount Company,
large factor in the London market, was established

reserve

another

in 1885 and has, under able

paid-up capital
In addition
to these powerful companies, there are
large discount
houses like Samuel Montagu & Co., Brightner & Co. and
many others, who contribute as much, if not more, than
the joint stock companies to the efficiency of the
system.
Re-discounting goes on from day to day and the facilities
which they afford are of inestimable benefit to the com¬
mercial world and to the joint stock banks.
of

£750,000 and

Why, gentlemen,

earned

management,

reserve

of £500,000.

have millions of dollars locked up in
all parts of the United
markets) subject to all
the vicissitudes of transportation, and placing
us in a
position where each year we are worrying and wondering
if we are going to be able to find the means to
keep these
crops moving without forcing our merchants to curtail
their legitimate business.
This thought never enters our
minds in connection with the same character of products
when they are shipped to a foreign port.
During the
panic of 1907, we were forced to refuse to accept as cash,
drafts against these products when moving to any part of
we

crops and merchandise, moving to
States (actually sold, not seeking

the United

States, but

never

hesitated

second when the

products were going outside of the United States. Some
will remember that there was a period when it was
difficult to sell sterling in spite of the fact that the
pos¬
session of it meant the power to draw English
gold. We
had to contend with this difficulty and cut the central
reserve cities
out of the circuit temporarily when confi¬
of you

dence

was

sold, and

impaired that but few sterling bills could be
succeeded because

had the power to draw

gold from England, the Continent, Japan, Australia and
Central America and to pay for it in London with the
sterling bills which could not be handled through our finan¬
cial centers.

Give

the power

to accept time drafts, and we will
gradually cease to pay the tremendous tribute which we
pay each year to London in connection with our commer¬
cial letters of credit.
We are obliged to force London
credits on many merchants who could use domestic credits
and prefer to use them wrhen they can, as it saves them
from
may

the

uncertainty

be when they

Gentlemen,
wealth

ports

pays

creates

are

we are one

what the sterling quotations

called upon to make their payments,
of the greatest contributors to the

and power
a

exchange
built up

and the central re¬
serve cities or a central bank
adopted a discount rate, the
banks could then adopt a rate on reserve balances of
say
one to one and a half
per cent, below the official rate. If
some other
locality made a better bid for the money and
the* owners of it felt that it could be safely
employed, it
would go there.
The ebb and flow would be controlled
by the rate.
a

CONVENTION.

of London. Every pound of our im¬
tribute to that center and every letter of credit

supply of exchange
on

London and

demand for

that center.

making of a handsome discount market in
Our banks (especially our country banks)
in employing their funds in what we all
term liquid assets.
They do not understand commercial
paper, know nothing of the responsibility of the makers,
are dependent upon their correspondents or upon the note
brokers, and at best never feel comfortable over this form
of investment, particularly as, should they want to use
it, they would have to endorse it and lean on their corre¬
spondents and publish to the world and their competitors
that they were using their credit to borrow money.
They
would jump at the chance to buy acceptances of wellknown banks, especially when they found they could sell
them and not be held up to the community as borrowers,
as such acceptances would be sold on the credit of the acWe have the

this country.
have difficulty

BANKING

125

SECTION.

ceptor rather than on that of the endorser. I could name
banks in the interior towns who are at this moment run¬

bankers, large and small, that a central bank would

ning with from 25 to 40 per cent, reserve, partly because
they do^not know how they can invest it and get relief in
.an emergency without being looked upon as a borrower,
and partly because they have not been able to get

their power to secure

1907.

over

Many of us are strong believers in a central bank, and
will continue to ‘do what we can to educate sentiment to
point which will ultimately give us one, but we feel that
or after we get such an institution, we will
have to encourage the issuance of bills of exchange, in
order to use it intelligently.
I have faith in the Monetary Commission, and believe
that it is performing a wonderful work in educating the
bankers of the country—and as a class we need the educa¬

either before

money,
and while
a

believe that

tion—but
of

for the present, we have plenty

too many kinds of money, but plenty of it;
we are

talking about the best method of getting

central bank

one

(or something that performs the functions
without the necessity of calling it one), we need some¬

thing that will help us maintain sufficient confidence among
our clients to keep them from locking up what money we
have, and from stampeding us into locking up more of it.
The Aldrich-Vreeland bill has not met with any great
favor among bankers, and in my opinion the country banks
of the United States (under which head I include all out¬
side of the large cities) will have to lean on their city
brethren, as they do not possess either the bonds or the
proper character of notes to take advantage of the relief.
By far the greater number of their bills receivable have
maturity dates, but no definite times for actual payment,
and in addition to that fact, paper money cannot be forced
over the counters of the Pacific Coast banks.
Any attempt
to do so would emphasize an emergency.
The authorities
have been obliged to change the wording in the National
bank note so that the emergency currency will not be de¬
tected

when

makes

its

bow

the

Western and Southern

Eastern, Middle

bank note looks like
people insist on gold.

public, but
gold piece, and our
The comptroller of the currency is alive to his responsi¬
bilities and can keep the reserve city banks in strong shape
by using the power he has to exercise care in approving
reserve agents.
The power to exercise this control should
make the acceptances of the reserve city banks all the
more desirable, and I believe that your association would
have the support of the comptroller in an effort to have
the law amended to allow acceptances, if the advantages
of the discount system were properly brought to his notice.
In my contact with the country banker and the public,
I find that both fear that “Wall Street” or “politicians”
would gain control of a central bank and that the country

twentv-dollar

banker feels that he would have

standing with the

cen¬

in charge would
have no sympathy with them and no knowledge of the se¬
curities which they had to offer.
Convince the country
tral bank

any

of its branchesthe

men

banker that he would continue to deal with the same corre¬

spondent he
or

reserve

the

now

has and convince him that

central bank

bank could be formed which “Wall Street”

“politicians” could not control.

In addition, teach

our

“The Bankers and
By Harold

President

Mr.

and

Members

the

American

doubt there

Bankers’

are

many among you

are

urally antagonistic
Let

banks.

under

our

men

the friends of the small banks and nat¬

to the growth of large

and powerful

get to a point where we can go before the

public agreed among ourselves, for until we can do that,
we will not make much progress in any direction.

faith of the United States Government demands
protected in their United States
bond holdings.
Future bonds need not be given circulation
privileges and the National bank notes can be retired as
the present bonds mature.
In the meantime we can formu¬
late plans to replace them with a currency which will do its
work and retire in answer to business needs. We recognize the
evils of a bond-secured currency. Why perpetuate it by con¬
tinuing to issue bonds with the circulation privilege?
But few of us have what really should be used as a
pledge for emergency currency and what it is necessary
we should have to make any central bank a success, and that
is “bills of exchange.” Give us the machinery to encourage
them and a bank act which will recognize their value ahJ
encourage the building up of a discount market and the
needs for emergency or additional currency will not bother
The good

that the National banks be

very

often.

opinion, gentlemen, Clearing House associations,
currency associations, or associations embracing
the banks in certain geographical zones will never accom¬
plish what we need; it will take a panic, and one that has
had considerable growth, to make the banks go to their asso¬
ciations for aid, their clients will have been pretty badly
pinched, and every method of building up again that twentyfive per cent, reserve will have been tried before the banks
will be willing to appear before a board, composed of com¬
petitors, for the purpose of taking out emergency currency
—for the reason that the competitors will see that the pub¬
lic knows of the application unless they are sufficiently
scared to keep it to themselves.
The country banks need legislation that will provide a
quick asset which they can buy and sell, and they need the
ability to go to their correspondent in a reserve city as
quietly and as freely as they make remittances, and the re¬
serve city banks need the ability to go to their correspondent
in the central reserve city in the same way.
In time a Na¬
my

emergency

tional discount market will enable the central

city
perform the functions of a financial center, and all the
time quiet and effectual education toward the necessity of
a strong central institution will be
going on.
In closing, gentlemen, I wish to urge upon your honorable
body that you take up seriously the question of having the
National Bank Act amended, so as to allow the banks, at
least those of central reserve cities, to accept time drafts,
and above all, so amended that it will encourage the build¬
ing up of a discount market, and that if it meets with your
approval, you take the necessary steps to have it done.
This legislation will not in any way interfere with the
formation of a central bank later on.
In my opinion it
will give adequate relief and educate the bankers and the.
people to a point where they, will realize the necessity
reserve

for

one.

Bankruptcy Law.”
tional Association of Credit
it in times of

who will be

skeptical when I say that there is no subject of more im¬
portance nor of more real interest to the bankers of
America than precisely that of the National Bankruptcy
Law.
I appreciate that you have come to consider this
law somewhat as the property of your brethren of The Na¬

central banks

minimize

have it within
present system, and that

of wealthy

Remington, New York.

Association:,I have

the influence which a group

Men, whose staunch defense of

attack, whose persistent advocacy of it from

the very beginning, and whose recent triumphant efforts for
the betterment of its administrative features by Congress

might be considered by you perhaps as vesting in them
some proprietary right, were such a
thing possible. But it
is no more their law than it is your law. It is the law es¬
tablished, by the wisdom and foresight of our forefathers,

126
in

the

BANKERS’
Constitution

itself, for the regulation by national
authority of the vast subject of the relations of insolvent
debtors to their creditors and to their respective communi¬
ties throughout the United States. And when one comes to
consider that the great bulk of litigation in which bankers,
as well as other business
men, are interested is caused by
insolvency occurring somewhere along the line it becomes
at once manifest of what transcendent
importance this law
is to you as well as to all other business

men

in the United

States, and how proper it is that you should have right
regard to its place and function. It is the great

views in

business law of the United States!
Bankers have to do with the business world.

agricultural

communities,

not

It is not in

the farmers, but
teeming with population,
smoky with manufacture, noisy with the din and hubbub
among

rather in the cities and towns,
of trade and commerce,

that the banker finds his most ap¬
propriate field of action, the widest scope for the exercise
of his talents, the greatest rewards for his skill and labor.
Business today, throughout the length and breadth of thee
civilized world, is conducted on the credit system. Men buy,
men
sell, on credit, in reliance upon a future market de¬
mand which may or may

not arise, in expectation of pay¬
ing and of receiving pay out of the proceeds of the sales
in

the meantime made to

the ultimate

It is

consumers.

essentially a system of risk and venture—of guess work,
if you will. The merchant is
essentially a speculator upon
the honesty and capacity of his fellow men, not to men¬
tion upon the erratic behavior of that
mighty though in¬
visible being he terms “future market demand.”
The banker is the expert credit man of the
community.
Though he may not belong to that class whom we denomi¬
nate “producers”—any
more than does the doctor, the min¬
ister, or the lawyer—yet he, like them, has most impor¬
tant functions to perform.
It is his function to be the
guardian and protector of the credit system in his com¬
munity. More than that, the banker is the father con¬
fessor of the business

Secrets which ordinarily are
only in the privacy of the domestic circle are all

known

laid bare to him.

man.

has, locked up in his vaults, his ac¬
in his memory, an accurate diagnosis of the
credit condition of each and
every business man in his com¬
munity. His fingers are ever on the pulse of the business
count

books,

world about him.

So it

is, by virtue of his position of trust

and confidence among
his fellows, his power in the determi¬
nation of the credit due to each of
them, that the

banker,

in every

community, occupies a unique position of trust,
prominence, dignity, power and responsibility.
There is no place to-day for the narrow-minded
banker,
for the banker who, seeing some immediate, selfish advan¬
tage accruing to himself or to his bank, loses sight of the
broader welfare of the community about him; who fails to
realize that the business world is
which he and his bank

one

vast organism—in

component, organic
part of which is connected, by throbbing and
and arteries, with every other
part, and that a
part is felt in every other part. There is no
for any but the broad-minded banker, the
rises

the full

are

stature

parts—every
vital

nerves

harm to any

place to-day
banker

who

of his

commanding position of
the guardian and protector of
the credit system about him.
Bankruptcy law is a business law. It is taken up with
the relations of men in business life, in the world of com¬
trust and

merce,

responsibility

manufacture and trade.

cultural communities.

are

that there have been several

It has little to do in agri¬
often reminded of the fact

previous bankruptcy laws in

the United States, and that each of them has been of

com¬

paratively short duration; the first of them, of a little
more than a hundred years
ago, having been repealed after
scarcely two years of existence upon the statute books,
and without a single case under it of sufficient
importance
to have come down to us lawyers of the
present generation
in the law books; and, from this, it is
argued that bank¬
ruptcy law in the United States is a mere temporary ex¬
pedient! But I would remind you that, one hundred years
ago, there were only four per cent, of the people of the

CONVENTION.
United States

gathered together in the cities and towns—
only four per cent, of them who could be considered in any
way dependent upon trade or manufacture or commerce—
business

still

for

their daily

living and support!

nation of farmers and had

need of

law—and not much of bankers, either!

But,

are

bankruptcy
as

each

suc¬

ceeding decade unrolled its census figures before us, we
found this ratio
continually increasing, until the last census
showed us that nearly forty
per cent, of the people of the
United

States had left the farms and had crowded into

the cities and towns!

And I venture to

predict that the
being taken at the present time,
nearly one-half of the people of the
United States are in the cities and towns;
nearly one-half
of them are
directly dependent on trade and manufacture
and commerce, upon business, for their
daily living and
support, their welfare inextricably interwoven with the
welfare of the credit system of
doing business! And so it
came about in these later
years, quite naturally, that there
came to be felt a need and want
among business men for
some
great law adequate to take care of the growing busi¬
next census, that which is
will show us that

ness

world and its credit system.

Thus

was

enacted the

present bankruptcy law.

And I venture to say that that
law will remain upon the statute books of our
country, as
a
permanent part of our jurisprudence, as long as business
shall continue to be conducted
as

that

the credit

system, and

system’s chief defense and bulwark.

I have been
or

astounded, particularly during the last eight

nine months

while engaged in

the active work,

at¬

torney for the National Association of Credit Men, of aid¬
ing in the betterment of the bankruptcy law, to learn the
profound ignorance—for no lesser term is adequate—that
prevails among our citizens, our men of prominence, our
business men, our lawyers,
yes, even among some of those
who have been elected to make our laws
themselves, con¬
cerning the true scope and function of bankruptcy law in
our midst.
The prevalent idea of it is that it is a mere
arbitrary statute, an invention of recent years, devised for
periodical application after times of crisis and depression
for the relief of the multitude of insolvent debtors found
stranded upon the rocks of business disaster;

thereupon to
repealed and not again to be re-enacted until similar
occasion arises.
This is the prevalent, the
wrell-nigh uni¬
versal idea.’ And yet it is a totally
inadequate idea. Were
bankruptcy law mainly or essentially a law for the re¬
lease of debts, why is it, I would ask, that that class of our
citizens to-day who are the most earnest in its
support,
who are the most insistent upon its
being retained as' a
permanent part of American jurisprudence, are precisely
the credit men of our country, whose
very name implies
that at any rate they would not be
particularly interested
in a law whose chief function was the
discharge of debtors
from their obligations?
Were the chief or essential idea
of this law the release of debts,
why is it, again I would
ask, that in nearly one-half of the bankruptcies to-day
where there are any assets, a
discharge is not even asked
In corporate
for?
bankruptcies (and I would remind you
that nearly all business to-day is coming
to be done under
corporate form) a discharge is seldom, if ever, applied for,
and a discharge would be a vain and useless
thing for a
corporation denuded of all its assets! Were this law a
mere poor debtors’ statute, I would ask
you, finally, why is
it that during nearly the entire first half of its four cen¬
turies of existence as a jurisprudence
among English-speak¬
ing peoples there was no provision to be found in it looking
to the discharge of the bankrupt, but, on the
contrary,
there were provisions always to be found there
declaring
that nothing therein should be even construed to work a
release of the bankrupt from the unpaid
remainder of his
debts?
No, release from debts is not the main, nor the
essential, idea of bankruptcy law!
be

To be sure, one of the wisest and noblest of the
pro¬
of modern bankruptcy law is precisely that one

visions
which

grants to the honest bankrupt a discharge from the
unpaid remainder of his debts. It makes a rift in the
gray and sombre clouds of business disaster and lets the

BANKING

It brings new hope to the heart
who, perhaps past middle life, with
the gray already tinging his hair, after years of earnest
effort with such capacity and with such opportunities as
God may have granted him, finds himself at last face to
sunlight filter through!

the business man,

face

with

the

terrible doom

of the business man, “bank¬

ruptcy,” staring him in the face! It brings new hope into
his heart that, notwithstanding all this, he may yet keep
his familiar

place

the head and support of his little fam¬

aga^n,

may, perhaps, once
ciates in business enterprise! '

ily;

take his seat with his asso¬

The statisticians tell us that,
according to the tables of business mortality, one out of
every four or five business men must expect, at some time
or other during his business career, to fail, so terrific is the
stress and strain and strife of business warfare—a rate of

casualty greater than that of the bloodiest war of history!
The bankrupt is as much entitled to his discharge as is the
soldier to

be carried from the field of battle to the hos¬

pital—be it only that his wounds be found in front and
Let us never be found scoffing or sneer¬
ing at the discharge of bankrupts!

not in the back!

But,

I have said, discharge is not the main nor the

essential idea of

bankruptcy law\ The more adequate con¬
ception of it is that it is a great system of jurisprudence,
naturally developing out of the wants and needs of men
in business life; originating in the credit system of doing
business itself; originating back in the very beginnings of
that system, when men first began to produce great quanti¬
ties of goods for the open market in reliance upon a future
demand that might or might not arise, when they first be¬
gan to entrust these great quantities of goods to other
men, retailers, by way of sales upon credit, for more minute
distribution among the ultimate consumers; a system of
jurisprudence originating in the beginnings of the credit
system of doing business and developing along on down the
generations with that system, ever expanding and readapt¬
ing itself to the changing wants and conditions of business
life; a system of jurisprudence whose chief function it is
to take care of the credit system of doing business when
that system has broken down at some particular point,
when, owing to miscalculation of future market demand,
or to lack of capital or of capacity, to sickness or other
untoward accident,

that credit has been
which l fear is

ever

to the not seldom

misplaced and that that phenomenon,
the credit system of do¬

to accompany

ing business, has occurred that
a

fraud, it is found

men

term “business failure”:

system of jurisprudence whose function it also is to pro¬

tect that insolvent

fund which is the sole legacy left by the

failing debtor to his creditors, protecting it not only from
depletion through fraud, but from depletion through the ef¬
forts of some creditor to gain advantage out of t the in¬
solvent fund over his fellows; a system of jurisprudence
furnishing a code of remedies, swift, efficient, searching—
more so than any other system of jurisprudence ever given
to man; a system of jurisprudence, which, in the United
States, was planted by the wisdom and foresight of our
forefathers, as I have said, in the Constitution, in the
very first article of it, as being one of the things on which
all were agreed, North and South alike, namely, that the
central government, the nation, should enact uniform laws
on the subject of bankruptcy throughout the United States;
planted there at a time when the United States was nothing
but a narrow strip of real estate lying along the Atlantic
coast—as if our forefathers saw, in vision, a vast continent,
filled with populous cities, busy with the hum of trade
and enterprise, bound together with the thousands of inter¬
lacing bands of railroads, telephones, telegraph and post
roads, into the one huge business world of America; a
system of jurisprudence which, in the United States, has
superimposed upon the forty-eight differing and confusing
systems of State jurisprudence its one vast, uniform net¬
work of rights and remedies, making it possible for men to
deal together in business in the most distant parts of the
land, in the full confidence and knowledge of what will be
their rights and remedies in the event of business failure;
a system of jurisprudence that is bringing credit and con¬

127

SECTION.

putlying parts of our country, bringing added
strength to the new South in its manful struggle towards
prosperity, for which so such it needs credit and confidence
—such is the better conception of bankruptcy law!
And now let me bring your attention to some of the par¬
ticular features of bankruptcy law in which you might
have special interest.
First of all, bankruptcy law is the most democratic of all
laws. It is not a law simply for lawyers. It recognizes that
a business failure, a bankruptcy, is something more than a
lawsuit; that there is something more to it than the law¬
yer’s work; that there is the work of the business man
also, the conducting of the business, the selling out of the
assets, which are the duties of business men, not of
lawyers. And it invites the business men to participate.
To this end it requires that notices be sent to all creditors
of each and every important step taken in the progress of
bankruptcy administration, from the election of a trustee to
the selling out of the assets. And the business men of the
United States are coming more and more to understand
and appreciate that it really is, as it was intended to be,
their law—the business men’s law.
And I am confident
enough to say that today, after its twelve years of serv¬
ice upon the statute books, it is more firmly established
than it has ever been before, and that no Congress will
ever venture to repeal it.
fidence to the

Again, bankruptcy law believes in letting in the light
truth.
It believes in “investigation first and lawsuit
afterwards.”
It believes in “fishing expeditions,” as the
opprobrious term of the lawyers expresses it, by which
they designate the investigation of facts before the framing
up of the issues in the litigation.
Such investigation is
unattainable in any other court. If you try it in another
court your opponent will quickly rise and object, and say,
“Your honor, this is nothing but a ‘fishing’ expedition.”
And His Honor will look over his spectacles at you and
say, “How is that?”
And then you will reply, “We are
trying to find out what the facts are. We think there is
fraud, but we want to be sure before starting a lawsuit.”
Thereupon His Honor will gather about him his robes of
ermine and sententiously declare, “Fishing expeditions are
forbidden.” But, in bankruptcy, the very first thing that
happens is that we are all invited to go “fishing,” to go
fishing for the truth. The bankrupt is put upon the stand,
so also are his wife, his relatives, his friends, everybody
who can tell us anything about his acts or his affairs.
Bankruptcy law believes in investigation first and lawsuits
afterwards; believes that in this way wrong, improvident,
improper, unjust lawsuits may be avoided and righteous
litigation be promoted. In short, it believes in the rather
unique doctrine for courts of law, that the “discovery of
the truth can hurt no just man.”
There is one provision, however, of bankruptcy law, with
which I know some of you bankers sometimes find fault.
It is that provision which prohibits preferences. One dear
old banker acquaintance of mine once said to me:
“That
bankruptcy law is a great, good law, but it has one serious
defect: it will not permit bankers to keep their preferences.
Now, it is the banker who supplies the money with which
the business man is kept running, and he ought to have a
right to keep whatever preferences he may get out of the
insolvent estate.” Charming candor! Would that all bank¬
ers
who advance reasons for opposition to the law were
equally as frank! But let us see. Bankruptcy law proceeds
upon the theory that as long as a man is solvent he is
doing business on his own money, and may do with it as he
will—may pay one creditor in full and let the others wait
and draw interest—so long as there is plenty to pay all in
the end; but that, as soon as he becomes insolvent he has
ceased to be doing business upon his own money and has
begun to do business on his creditors’ money, and that the
insolvent fund left in his hands has thereby become a trust
of

fund in which each and all his creditors

equal bene¬
proportion to their respective claims, like chil¬
dren of a common father. So arise the peculiar provisions
of bankruptcy law for the protection of the insolvent fund,
ficiaries in

are

128

BANKERS’

CONVENTION.

for its

protection from depletion, not only through fraud,
through the giving of preferences to one creditor over
the rest, qr through the
attempts of some creditors to ob¬
tain by legal
proceedings advantage out of the insolvent
fund over their fellows. But is there
anything wrong in
this prohibition? Has it not rather the
ring of Eternal
Right? To be sure, the banker loans money and does not

“The law favors the
diligent creditor” was the specious cry
of the courts,
which, translated, simply meant, “the law
favors the favored
creditor, the wife or friend.” “First

but

first served,” the “Devil take the hindmost,” were
the real rules of conduct in those
days. Into this realm of
come,

savagery and barbarism

bankruptcy law, and all was
changed! Under the protecting arm of bankruptcy law,
prohibiting one creditor from getting an advantage over

sell goods, but the goods have money
value, and that money
value is quite as precious to its owner as is the
money
itself to the banker! And,
moreover, it must never be for¬

other creditors out of the insolvent
fund, and granting to
the honest debtor a
discharge from the unpaid remainder
of his debts, mutual confidences became

gotten that, all the time, the banker does have a natural
advantage over other creditors, for all the time he has
known, or has had the means of knowing, the accurate
credit condition of the
could

possible.

failing debtor, which other creditors

only

trust and

day. Particularly during times of
depression has the beneficient effect of bank¬
ruptcy law been felt in ways like this, in sustaining credit
and bringing about sensible
settlements.
Utopians have pictured to us a society whose laws were
so
clearly written, so plainly just that they had become
self-executing. So here, bankruptcy law, without court
action, without the waste of litigation, is
silently and
powerfully working in every community today, tending to
bring about settlements of business failures and promoting
concord among men—a
quiet, mighty influence towards
crisis

responsibility,

as the guardians and protectors of
system, that you say, manfully, We ask no
special privileges over other business men?
And then, finally, bankruptcy law tends towards indus¬
trial peace, towards doing away with wasteful
litigation.
You know how it used to be before there was
any bank¬
ruptcy law! No mutual confidences were possible between
the debtor and his creditors, nor
among the creditors them¬
selves. The debtor dared not breathe to
any one a suspicion
of his failing condition lest it
bring down upon him an
avalanche of creditors and bury him under a
life-long load
of debts. At the first breath of
suspicion began a mad race
for priority among the creditors—creditors with attach¬
ments, executions, receiverships vying with assignees and
chattel mortgages to see who could
get hold of the assets
first.
It was the reign of the
unmitigated law of the
“survival of the fittest”—the law of
savages and brutes!

credit

The Banker
By Benjamin Ide

neither

banker

nor

the

son

banker.

1 have

life a teacher, and my tangencies with the
banking business have been accordingly inconsiderable and

transitory. My acquaintance with bankers also has been
regrettably limited, though it has been my regular practice
for many years

to loan them

of money at

sum

ginning of each month on short time.
banking business has been limited to
in that

department of arithmetic

these

branches

liberal

vigorous schooling

known

ments, and to certain instruction in
of

the be¬
My training in the
as

partial pay¬

bookkeeping.

Neither
has, however,
The system of par¬

education

proved of much practical value to me.
tial payments has appeared to involve no
ultimate advan¬
tage, but only a certain postponement of the evil day with
added bitterness; and I have never
kept books, except my
cheque-book—and that only to learn, with the accumulating
and painful experience of the
years, that the banks, on
the whole, keep books more
reliably than I do.
Being charged, therefore, with the honorable duty of
giving counsel to the assembled bankers of the nation, I

must from the outset

deny myself all right to speak from

your common point of view with the voice from within,
but must rather take the
position of the onlooker from
the outside and assume the voice of one
crying in the
wilderness. How do bankers and
the out¬

banking look to
sider, and what have he and public opinion to say about
them?

Perhaps the bankers do

not care to know. They deal
complicated interests and recondite problems which
plain people of the general public cannot be expected to
understand. They have acquired
by long experience insight
and skill which make them
judges unto themselves, with
the possible right to resent and
reject the interference
of alien opinion.
By a sort of semi-inheritance they may
with

and

Commercial Peace!
This

the

message

of the

bankruptcy law which

bring to you, bankers of America! May I have the
right
to hope that from this time
forth, whatever may have
been the feeling of some of
you heretofore, the bankers

this Association

may

be counted

to be staunch defenders and faithful
friends of

law!

solid

unit,

bankruptcy

Public Servant.

Wheeler, President of

been all my

The

debtor could assemble his creditors and
they and he could
talk together, like men of
sense, about the common dis¬
aster, and could consult together* as to the best
way of
lifting themselves out of it. And this, indeed, has come to
be the order of the

guess at. You bankers of America do not want
to ask to be put on a better
footing than other creditors!
Is it not more in conformity with
your high position of
the

came

the

University of California.

have established themselves into

a
guild or profession or
priesthood with its own standards and rules, which
they
may feel the uninitiated are bound to accept and
regard
as the solemn
mysteries of an order. They may even have

come

to consider themselves in the

possession of certain

recipes for health, welfare, and salvation, which the public
may use on payment of a fee, but whose ingredients the
public must never inquire into, and whose health-giving
virtues the public must never
question. Or, to make it
concrete, Wall Street knows what is good for the country;
and if only those miserable
interlopers, the socialistic soci¬
ologists who write articles for Muck and Slum; the college
professors who write books about finance, without having
any finance of their own, and those godless profaners of
the temple, the windy
insurgents from Wisconsin and
Kansas, the long-haired advocates of parcels-post, postal¬
saving, rate-regulation, bank-guarantee, trust-control and
conservation—if only these men might
be muzzled, and
everything referred to the care and keeping of a safe and
sane Wall
Street, then all would be well with the State,
and all the people w7ould be more or less
saved, and a cer¬
tain few still
These

all

so.

well-recognized earmarks of the guildThey are as old as the medicine-man, the augur,
the soothsayer and the dervish.
The chief stock-in-trade
or
capital of these rudimentary “professions” was full and
complete ownership of the orthodoxy patents. The old
Roman college of augurs
interpreted the flight of birds
according to rules of its own, and its complete possession
of the oracles of
orthodoxy consisted in this, that no one
outside the college ever ventured to raise a
question of
why or wherefore. When a man held the seat of supreme
authority so securely that no one quite knew why, or
would even think of asking
why, he called himself king
sense.

are

BANKING
by divine right. The business of being augur or king was
largely dependent for success upon the other fellows not
raising the question.
This is

principle of wide validity in human affairs—
especially is it fundamental in determining the institutions
of the early world.
The myth-maker was the one who
asserted so surely and well that no one thought of asking
a

him how he

manded

knew; and the leader

confidently that

no one

was

the

one

who

com¬

thought of asking for

SECTION.

society. The law which issues from their interpretation
application of legislation and from their unfolding of
the principles inhering in the historical structure of social
life constitutes the body of rules according to which the
game of life in human society must be played.
If there
are no rules, there is no game.
The bottom goes out from
under society.
It must therefore be evident that any
toleration of disrespect for the law or for the agency which
brings it to statement must lead directly toward anarchy.
and

prophets, the associations of dervishes,
of rhapsodes, of healers and of diviners I have called rudi¬
mentary professions. They were bound together by the
supposed possession of mysterious knowledge and powers
and by the exclusion of the rest of the public from the
right of visitation, inspection and criticism.
The so-called professions have in some form continued
this down into the broadening daylight of modern life,
but in a steadily losing fight against the two great influ¬
ences which create the
spirit of that modern life; namely,
(1) the spread and establishment of objective scientific
tests, i. e., real knowledge, and (2) the democratization of
intelligence in human society.
We can still remember when the guild of the
physicians
was
believed to be in possession of certain mysteries of
therapeutics, and when the doctor was not expected to give
account to

others, and for that matter could not to himself
either, of what disease really was or what his medicines
actually did to it. The old order survives in the quack
and

the

fakir and the

patent medicine

science of medicine based

man,

but

new

pathology and physiological
chemistry has banished the mystery, brought in the objec¬
tive test, and made the individual physician open and
responsible to the question why. The wide diffusion of
on

scientific

knowledge throughout the community makes it
possible for the average man to understand in sub¬
stance the answer of the physician to the question why.
Now and then even among the best physicians we find the
old guild-sense surviving, when another physician is called
in consultation who feels it in courtesy to the profession
necessary to shield his colleague and cover up some partial
error of
diagnosis by some statement like, “We find the
condition of the patient as stated, but would suggest some
changes in the treatment.” Enough of this all too cus¬
tomary and baneful usage survives in the practice of the
profession so that at least we may appreciate what is
meant by the “guild-sense.”
The profession of teaching has been only in late years
escaping from the limbo of this guild-sense. The tradition
that certain subjects were pre-eminently or exclusively
also

suited to the nurture of the mind and that certain tradi*►

tional methods

the

divinely appointed way of effecting
it have gradually yielded to what we may call a new
physiology and pathology of education. Direct scientific
tests as to what we wish to accomplish and why a certain
course will do it
have slowly pushed their way forward
to dispel the haze of traditional mystery.
And the new
education has made its way largely through pressure from
outside.
It was often a pain and a shock to the staid
respectability of the old guild-sense to hear the old edu¬
cation vehemently criticised by insurgents and outsiders,
by men who knew no pedagogy and perhaps had little edution themselves, but only knew what they thought they
wanted their own children to learn in the schools; and
much of it was forthwith branded as demagoguery.
But
the rapid democratization of intelligence has made it pos¬
sible for enlightened public opinion to establish a victory
over the
guild entrenched behind its mysteries. Public
opinion knew better what it wanted the guild to accomplish
and what it ought to accomplish than the guild knew
were

itself.
It is

much mooted

question whether a good citizen
may venture to criticise the courts. The courts constitute
our ultimate assurance for the right of
possession, and
their decisions offer the only attainable basis for order in
a

When

his credentials.
The schools of the

129

court

comes,

however, to individual decisions of

hardly be expected, and is not in fact by the
judges themselves expected, that the intelligence of the
community shall be estopped from forming an opinion
can

concerning them. The decision of a court can no longer
regarded as a voice issuing from out behind the clouds
of Sinai. It would be a peril to society to seek to give it
such a value. A decision is supported by argument and is
subject to definite objective tests. It is not an arbitrary
statement issuing from mysterious sources.
It is not, or
ought not to be, a merely technical product fabricated
from exclusive recipes in possession of a guild, but will
conform to good and righteous usage and good and com¬
mon
sense.
In the long run it will assert its validity,
though indirectly, by its appeal to a final public opinion.
To deny the laity all right of opinion, to take from them,
for instance, the right of reading and estimating the
minority opinion rendered perhaps by four judges against
five, involves an artificiality not to be contemplated in
these days of public intelligence and public opinion.
It
involves a return to the college of augurs, when it was
only an augur who might wink at an augur.
be

now

remains

to be considered

whether

plain and

unfinancial citizen may venture to have an opinion about
banks and bankers.
It may be reasonably inferred from
what has just been said regarding other professions, and

particularly the teaching profession, that the bankers are
being gently led toward the perception that it might be of
value also to them to

see

themselves

I made in that direction

others

see

them,

at least to

give the outside world a hearing now and
then, seeing that the proceedings of banks and bankers are
of large importance to the well-being of society and men.
Last winter, during a five-months’ residence in Berlin,
I kept an account at one of the leading banks, and on the
basis of my experience there I felt myself in a position
to give the officers of the bank some very serviceable sug¬
gestions and advice. Such tentative movements, however,
utter lack of desire

seemed to reveal to

the

part of the bank to profit by
opportunity. I may then tell you, who do not need
them, some of the things I would have feign told them,
who I am sure did need them.
On presenting a draft or
drawing by letter of credit there was no way provided
for transferring the proceeds to my call account than that
I should receive the amount in cash and carry it boldly
a
over to
distant wicket-window to be there deposited.
After the money had been carefully counted by being laid
out in a great rectangle of five twenty-mark pieces to the
row and checked off on the
large and elaborate sheet upon
which I had made my entry, accompanied by the number
of my account, my name, and other personal allusions, I
was
very courteously asked to retire to a seat in the
on

the

centre of the hall and await events.

duly awaited them

five to ten

minutes, when my name was called out
loudly from behind the wicket. I went over there, con¬
fessed to the name, and received, I think it was from
another clerk, an elaborate and thoroughly signed and
some

stamped receipt, which after being twice folded fitted into
my large pocketbook.
Whenever I drew money from the
account I was obliged to go through a similar
process,
always waiting for five minutes or more until my cheque
had been to the bookkeeper and been
duly entered on the
books. My cheque-book, which was far too
large for any¬
thing but desk use, I had purchased at the time of opening
the account and receipted for under
explicit mention of
the number of cheques it contained and their inclusive

130

BANKERS’

numbers.

When I

came

closing

my account at the end
that as the amount reported as stand¬

of my

stay I found
ing to my credit was too large, certain of my cheques had
probably not been presented for payment. There was,
however, no mechanism provided for giving me a copy of
my account, and the only recourse was for the bookkeeper
to bring to the window the
ponderous ledger and cast it
up so that I could read it through the wicket, and make a
rude copy of the entries.
This was done for me; I mean
the ledger was supported,
very patiently and courteously.
I have no reason to
suppose the arrangements any more
convenient in England. A friend of mine who had a draft
on the Deutsche Bank in London
sought to cash it at a
well-known
been
of

bank

Bartholomew’s

doing business and

credit; but there

was

Lane

where

had

fully identified by his letter

other way than for him to go
in person to the Deutsche Bank—where he was not “identi¬
was no

fied.”
But you

Will say, “None of these inconveniences would
happen at an American bank.” That is precisely what I
want to bring out; and the reason for the difference is
that the American banker has gone much further in
adopt¬
ing the point of view of the public than has the German or
English banker, who, hobbled by the traditions of the guild
and swathed in the bands of
self-sufficiency, refuses to
learn from the needs
without the

the demands of those who stand

pale.

is, in a very large and real sense, a
public institution. Its capital stock is, of course, private
property; it is itself a private corporation; it is, as the
legal phrase goes, privately controlled. But still, in its
relation to the life of its
community, in what we might
call its social relation, it is a
public institution. The
typical conditions can be found best in the smaller cities,
there the

bank

ranks

with

the

post office and the

public library.
One chief purpose of a bank,

perhaps its chief purpose,
cognizance of existing property values in its
community, with a view to being able at need to transfer
these values from their special form to the universal form
of money.
If this task of taking cognizance is not to be
fulfilled in a very mechanical,
gross and wholesome man¬
ner, the bank must be closely adjusted to its
relatively
narrow
community; its officials must have wide and inti¬
mate acquaintance with the
living beings of that com¬
munity; the bank must be close to its constituency; it
must be near the people.
It is of great importance to this nation that the
bankers,
and especially the representatives of the
great metropolitan
institutions, whose constituency is wider than the city and
practically national, should know their constituency. The
is

take

Riiett, President of

the

Forty-six

Washington to face

to solve which seemed

years

ago

Congress assembled in

stupendous task.
insurmountable.

It had difficulties
It had

financial

system to devise which would uphold the credit of the
tion and cement it

it did its work.

result

today than

devise

system

na¬

that it should part no more.
And
And no one is more happy in that

who live in the South.

which

made

Not only did

impossible

any further
but if succeeded in raising the
credit of the nation beyond the wildest dreams of its advo¬
severance

cates.

of this country,

The debt of the Government at that time

seven per

cent., and

was

about

it went until the system has actually
caused the United States two per cent, bonds to sell
at
one hundred and ten; at
least, I should say, twenty points
beyond what they are intrinsically worth.
on

Now, gentlemen, if the

to their desire and intention in these mat¬

ters.

They will get what they want. But there is no
for gloom in the premises.
A certain portion of
the governmental mechanism does not work
right, and the
people propose to change it. The result they wish to attain
by the change is the result that was originally sought in
the mechanism about to be
discarded—nothing more or
less—namely, the plain and accurate expression of the pub¬
lic will.
It goes not further.
Property rights are not
menaced; the pillars of the State are not undermined.
They are both being rendered more secure. It will only
be when the government does not express the
people’s will
and the people cannot change it that real
peril will arise.
We are, as compared with all the other
great nations of
the world, a conservative people.
We seek after a state
and an order of society in which the
family, based on
cleanliness and the assured possession of goods, may thrive;
in which the individual man
may establish the highest pur¬
poses of his single life and being, and in which the light
and the truth may in all their
simplicity increasingly pre¬
reason

vail, and we shall find it in a state where farmer and
artisan, banker and teacher shall live and work together,

abasing the rule and maxim of the guild and craft before
high, all-human doctrine: The welfare of the people
is the highest law.
that

People’s National Bank of Charleston, S. C.

Mr. President and Gentlemen of the American Bankers’

well

Southern Banker’s View of the Currency Question.
By R. G.

Association:

intimately they know and understand the American
people, West and East, the better it will be for all concerned.
To those who do not understand this
people, its
moods, especially its pre-election moods, are often discon¬
certing. One who knows only certain classes of the popula¬
tion, especially the wealthier classes, may well be pes¬
simistic, and generally is. But one who knows a good
mixture of farmers, laboring men and
shopkeepers in a
mixture of localities, for instance in California,
Wyoming,
Nebraska, Indiana and New York, will always, I venture
to say—always, unless he be some sort of a sick man—de¬
clare his faith in the soundness and
right-mindedness of
the American people. No one who
really knows the people
will gather any solicitude from the
prevailing unrest con¬
cerning tariff, trusts and conservatism, or the demands for
direct legislation and direct election. It is true the
people
are
just at present somewhat “on the rampage.” The
recent tariff measure was a
disappointment to them. They
refuse to be governed by consolidated
wealth, and have no
idea of giving money in
any form a vote.
They oppose
burning up the resources of the country under forced draft,
where the gilded phrase “development of the
country”
hides a concentration of vast wealth and
power into single
hands at public cost.
They are not satisfied with the
present representative system as giving proper effectiveness
to the popular will in
party and nation. There is no pos¬
more

sible doubt

The American bank

and

CONVENTION.

men

who proposed that bill and

carried it through were here today, none of them would
be more astounded than the most astonished of us that this

temporary

measure

should still be held

on to by the Ameri¬
for which it was given to the
Government had been accomplished. They say this currency
is not elastic, that it does not expand and contract.
Gen¬
tlemen, that is a mistake, i It does expand and contract,
but it expands and contracts exactly in the opposite direc¬
can

people after the

tion from what

purposes

sound currency should do.

Mr. Alexander

Dana Noyes prepared a

history of this in a pamphlet issued
by the Monetary Commission in which he reviewed the
expansion and contraction of this currency since its incep¬

tion, and he demonstrates that that is exactly what took

place. Between 1883 and 1891 there was a period of great
prosperity. • Business expanded 54 per cent., but in the
period, on account of the fact that the Government
accumulated funds and‘bought bonds and raised the
price; '
same

BANKING
the currency
actually
it! While trade was
contracted

and prepared

cent.,

per

panic of 1893.

contracted 53 per cent.
Think of
expanding 54 per cent., the currency

And yet in

the

for the

way

1893, exactly the

hap¬

reverse

pened.

Business began to decline after the panic decreased,
and just the opposite was the result.
Bonds went down.
The banks
and

bought the bonds for the profit there was in it,
was decreasing 26 per
cent., the cur¬
increased 18 per cent. He winds up:

while business

rency

“The

immediate sequel

impressive,

the panic of 1907

apparatus again turn out to

was

even

clumsy and inelastic did the
be, that at the end of May,

1908, the outstanding bank notes actually showed an in¬
crease of $8,000,000 from the
unprecedented total reached
at the end of December,
1907, and exceeded by no less than
$86,500,000 the figure reported at the end of May, 1907,
when trade

activity had fairly been at its maximum.”
Gentlemen, I think we all agree on that. The time
when

come

some

change must be made.

has

Why, this is only

of the troubles.

The United States Government
to-day
is tied hand and foot by this system.
It cannot pay up its
debts, because if it does it contracts the currency and will
cause another panic.
It cannot engage in any great project
such as has been proposed by the
Deep Waterways, an
one

issue of four

five hundred

gentlemen, the threat

millions

of dollars.

issue of four

Why,

five hundred

million dollars would bring the bonds below
par and cause
every bank to get rid of them and bring on another panic.
This country is actually limited in
up

paying

by this

its debts, and

currency system it is tied hand and foot.

There is

question that something must be done, and
we all agree on this,
the great question is a question of
construction—what shall
we put in its place?
Naturally we turn to the old country.
no

something must be done quickly. While

We go over to the mother
country, England, and there
find the Bank of England, the foundation for the

currency

system of that country, and yet
currency is almost as inelastic as

They

obliged to have the

are

that is issued after
to

seem

we
our

own.

certain amount.

almost entirely in checks.

There, indeed,

WT|e

find

But that does not

them, because they deal

cross

over

the channel

country which deals large¬
We find the Bank of France for a half a
a

ly in currency.
century has been dealing out currency.
It seems to be
very satisfactory.
We go to Germany, and it has a central
bank; Belgium has another central bank.
But when we
examine

into

business

are

this

find

that

their

methods

doing

not the same as ours.
We have not been
trained up into a way of doing business for a
century. They
will form habits of doing business which are
exactly the
reverse of the habits we have
formed, and we have to

change

all of

habits in order to adapt ourselves to that kind
system.
Then we look around.
We come across the
our

waters and

there is

look to

our

neighbor

country with about the

the north.

We find

same expanse as our

but having about one-tenth the population.
at the countries in
Europe,

When

wTe

own,

look

Germany with its sixty-six

million

people has only two hundred and eight thousand
square miles, only about thirty per cent, larger than Cali¬

fornia.

France

has

two

miles, only about thirty

hundred

seven

thousand

square

larger than California, and
not as large as one of our States,
the State of Texas. Bel¬
gium is not as large as one of our smallest States. You
can get from one portion of that
country to another over
per cent,

night. And yet, there is the Bank of France with
dred and eighty-eight branches.
Their deputies
tinually compelled to
branch there.

one

hun¬

are

con¬

branch here and another

That is important for us to

consider, whether
things are going to adapt themselves to our con¬
dition.
Here is Canada doing business in a great many
respects on the same lines on which we have been brought
up to do business. We have never been brought up to have
these methods changed.
Our banks take promissory notes;
we have been dealing with them since we were
born, since
our children were, born.^cEverythiiigMs on a bilk!of ex¬
all those

change.
look

131

We would have to begin all

again.

over

Let

Canadian system.
What do we find there?
We find there that they have a free banking system.
Any
bank that wants to perform and comply with the conditions
at

the

imposed by the government
to ourselves: Do

say

issue currency.

can

want

come

Now, we
central bank

accomplish the purposes of a central bank in any
way? We cannot help but look back on the fact that

we can

other

twice before

had

central bank and twice it has been

destroyed by political parties.
bank

The last time the central
great period of prosperity, being
would think it ought to be governed, yet it
We talk about putting safeguards about it.

in the midst of

was

governed as we
was destroyed.

We have laws to prevent consolidations and prevent com¬

petition from being stifled. We have laws which require
to be put in jail if they do such things, and yet
we know they do them every day.
We have a limitation

persons

stock in

order to

prevent its being sought after, espe¬

cially Equitable life stock—$100,000, with a limitation of
seven, per cent, dividends, and yet bought for $9,000,000.
Because it controls $500,000,000.
Why?
I do not care
what safeguards you throw around central banks.
If it
is to the interest of any party or any set of men to con¬
trol

that central

bank

before the wind.

they will
have to

other system which is

sweep
come

it aside like chaff

going to give

it, if

we can get

expansion, or
of the present system, I say:

which is going to relieve us

Yes, do it. If we can secure for ouselves a currency tliat
is sound, a currency that is secure, a currency that is
elastic, a currency that is as good in one part of the country
in another part

of the country, and if we can secure it
by giving to each the right to issue that currency within
as

certain

limitations

that

can

serve

the needs of the

community, then why should we want a central bank?
Now, let us see if it can be done. What is the system that
Canada

has?

of which
rency up

cold gold for every dollar

make much difference to

France.

find that the English

SECTION.

Any bank that has a capital of $500,000,
fifty per cent, has been paid up, can issue cur¬
to the amount of its capital stock. That currency

first lien

safety fund to be put in the hands of the Canadian

its assets.

It contributes five per cent,

government to further protect that currency.
Is that prac¬
ticable?
It is further to be called on for not more than

cent, to fill that five per cent, fund in case it is
That is all. No reservation required, no further
restrictions.
What has been the result?
Not a single dol¬
lar has ever been lost since that system was
put into effect;
one

per

depleted.

not

single dollar has

ever

come

out

of the safety fund

since it has been put into effect twenty-five years ago.
Let us go back to the history of the Canadian
currency.
They have had their troubles. They first started issuing
this kind of currency to the

then
of

all

central

there
the

specially chartered banks, and
Every time there was a proposal
bank they looked to the mother country. Then
proposal of currency based on the system of

other

was

United

banks.

States.

Each

time it

was rejected,
and they
perfecting the system which they had, because
they felt its advantages. They felt that it expanded and
contracted automatically again.
They actually did pass
and the government forced through a currency based on
our assets.
They tried their best to force it. The bank
would not adopt it.
They offered bonuses, and after five
years they repealed it and they came back simply to per¬

continued

fecting their system, simply allow them to increase this
issue from

fifteen

per

of their capital and surplus

cent,

during the period when they
to

meet

were

gathering their

crops,

that

necessity.
But these banks have branches.
They are required to see that their notes circulate at par
everywhere in the country, and branches are opened at cer¬
tain
let
any

points to

see

that they do circulate at

par.

Now,

little supposing ourselves.

bank which had

paid

Suppose we allowed
capital of $250,000 and a

surplus of twenty per cent, to issue currency to the extent
of its capital, and more in cases of emergency, and fix
the same stipulation that it shall be a first lien on the
assets of the

bank, and that it should bear five per cent,
Let us look back at atir'history. Out

interest at maturity.

132

BANKERS'

of the 508 banks that have

into effect 41

CONVENTION.

failed since the system went

that

issue; of these, eight were re¬
solvency and went on with business, twelve paid
their creditors and stockholders in full,
leaving only twentystored to

the

suppose that

they had been issuing the notes to the extent^
capital stock at the same time for the first year;

examination

shows

that

there

would

not

have

been

single dollar lost in all the forty-five years—not one
single dollar. It seems remarkable, but it is a fact. That
one

very significant fact for
good starting point to make.
a

But let
is

to start

with, and

very

currency?

What is money?

Now let

Money is that commodity which a govern¬
ment has adopted as its medium of
exchange, and which is
intrinsically worth that which is stamped upon it. In this
•country it is gold.
It is gold 25.8 ounces, nine-tenths fine
to the dollar. What is
currency? Currency is that repre¬

sentative, that credit representative, of money, which cir¬
culates for the convenience of the
public; and in order for
ito the dollar. What is
currency? Currency is that repre¬
sents.
Nothing more and nothing less.
If money was
wheat, why, it must be based upon a reserve and a cover
of wheat, so that when a man who holds its
representative
wants wheat he can take it to the
proper

depository and
So in this country We must have some cover or
reserve of gold
somewhere, to some extent, to have that
representative redeemed. That is the foundation.

get it.

Now, let
I

us see

where

should have it, in order to have

strong system. We are trying now to work out a system.
think it is the strongest in the
world; I think it will be

ten times

stronger than a central
banks of the United States behind

liability.

Where shall

be the amount?

bank, because it has the
it, and without risk and

keep that reserve?

But I

when

man

comes

should

you

the

It is

same

and

if he should ask you to give him ten thousand
It is just the same
thing, so far as you

concerned.

So far

you are

concerned, that may be the

the bank check is also taken with

some

case;

but

feeling that if it

don’t turn out

good you can redeem it. But when these
currency notes get to passing from hand to hand over the
country, you cannot trace them, and it is essential that
every one of those notes everywhere in this country and
everywhere else should be worth par at all times. In

order to do that it is essential that the

government should
protecting hand. Therefore I say that
the reserves should be such as to
protect us in these ways.
By a deposit of five per cent, in the treasury of the United
States, you accumulate a great fund, a reservoir, which

come

can

in and have

throw out

the other

sources.

Then

establish

many currency districts as may be necessary to bring
the issue to the bank in twenty-four hours of the sub¬

treasury funds. Or maybe you can bring them in fifteen
or twenty.
Have the sub-treasury
clearing house also hold in hand
the currency of every bank of its
capital stock ready to be
sent to that bank when
twenty per cent, in gold is sent
back. There you have your twenty per cent, in
gold within
twenty-four hours of you, and your central reservoir
standing ready at all times to flow where it may be
needed.

Now, where, then, would your currency be payable?
Payable at the sub-treasury clearing houses and not in
your bank. In the first place, there is where you preserve
it.
The public have no confidence in
anything that the
government is connected with paid out of a government
office. In the second place, the
government will see that
there is no overissue.
In the third place,
your govern¬

not content at all with the
a

first lien is very

two per cent.
I would have
government lay one-fourth of that aside as a
primary guarantee fund, to accumulate two and three
million dollars a year, upon which you should call first
in case by some accident, which had not
happened in
forty-six years, the assets of the bank on which this
guarantee is a first lien do not prove sufficient to pay it.
I would have piled on top of that the five
per cent,
guarantee which every bank has put in Washington—
$50,000,000. I would have on that that every bank that
issues currency would be obliged to contribute toward that
five per cent., if that is depleted, to the extent as it is
depleted, one per cent of the currency which has been is¬
sued by it in the past year. Why, then you have a cur¬
rency based first on twenty-five per cent, reserve held
by the government; on top of that a first lien on its
assets; then on top of that a primary gaurantee fund
accumulating at the rate of two to five million dollars a
currency,

say,

the

says,

one-dollar bills.
are

that

tax

“I want $10,000,”
his book give him credit for $10,000, just
you

The fact that it is

Suppose

do?

run

security on that.
little security in
preparing a system which I would prepare so as to put
it at the head of the currency of the world.
I would

What shall

we make it 25 per cent.
What
well-known fact in respect to credits
that the bank note should represent a fixed
value, so that

shall

sub-treasury clearing houses being within
twenty-four hours of each bank, are every day in com¬
munication with every bank in the district. The
govern¬
ment will furnish you with a
currency envelope marked
with c-very day of the year for
your currency district.
Every night you put into that every bill of every other
bank in the district. It will
go to the currency clearing
houses through the mail without
expense to you. It goes
to your credit on your gold reserve. There is a clearance
next morning, and you are sent the checks which come
in from other banks, and you are informed
by every mail
what your gold reserve is, and the government insures
the currency at the expense of the bank that issues it.
Now, that insures this currency at par everywhere, be¬
cause it does not matter where it is in all this
country.
The moment you put it in the bank and
put it in the
mail, it moves at the expense of the bank that issues it.
There is nothing which so insures this
elasticity, which
so
prevents inflation, as quick redemption. Here is a
system where every bank is trying to get the notes of
every other bank out of its hands in order to make a
place for its own notes on which it can earn a profit.

What
just get straight

to start with.

per

Now, these

stop and ask ourselves the question:

cent, which may be needed.

It don’t
your bank. The credi¬
tors of the bank holding the notes won’t be able to
get
the notes from you at your bank. They have to go to
the government clearing house, which, irrespective of any¬
thing happening to the bank, will simply pay out as long
as your
twenty per cent, lasts and the reservoir lasts.
Nobody can accumulate your bank notes and hand them
over your counter to embarrass
you. They have to go to
the sub-treasury and
you still have an opportunity.
It
is a great safety valve.

out of the 508 from whom
any creditor lost a dollar.
The full extent of that loss in the forty-six years was
$9,600,000. That is all the depositors lost. Now, just

twenty

matter whether there is

one

of their

has your reservoir and has the power to draw on
central reservoir whenever your reserve goes below

ment

banks of

were

year; then on
United States

top of that, $50,000,000 deposited with the
government in Washington; then on top of
that the guarantee of the banks that are in the banks of
issue, that they should contribute if it happened to be
used up. Now., can you get anything stronger than that?
A billion and a half of capital behind these notes ulti¬
mately, if by some accident it should pass over some four
or

five stations.

Now, I would go further than that.
first lien

the assets of the bank.

I don’t like that

I would like to

see

way in which there would be some guarantee for the
depositors, provided it did not work any liability on the
primary guarantee. When that primary guarantee fund
reaches a certain point, say three per cent, then you can
some

release that first lien.
find that if in the

What does that amount to?

forty-six years there had been no prior
bank, the loss would have been on the guar¬
antee $2,000,000 in forty-six years.
A bank with a mil¬
lion dollars would only have a loss of $100.
That is all
lien

the

BANKING
that would have had to

come

out of the central reservoir.

Now, you have $30,000,000 to protect it. The greatest
loss that would happen in any one year would be some¬
thing like three or four hundred thousand dollars, and
you have $30,000,000 for protection.
When that fund
accumulated—it is a fund gradually accumulated by the
tax, and it is a benefit that the banks and the people are
all

sharing—when that accumulates to five

cent., the
guarantee deposits that draw no In¬
If any panic comes, and the people
want to take their money out of the banks where
they
have it drawing interest, instead of
locking it up in the
safety vaults, they would have a place to put it out
until things were allayed, and it would not be long
until they could get it back, and it would be where they
could get it.
Now, there is one other feature which is
very important.
I would add a little more. I would not
only make this currency of the bank with a deposit of
twenty-five per cent, reserve; I would give the banks the
right to increase the twenty-five per cent, twenty-five per
cent, more provided they put up a fifty per cent, reserve.
That would strengthen it. That makes you feel that you
cannot go too far. At the same time it puts
up a stronger
safeguard against the currency. I would give them the
right to increase it to sixty-six and two-thirds per cent.
Then in case a panic came on the country, in case we
could not get the gold from abroad, then there would be
per

should go to
terest.
And why?
excess

this reservoir to draw

on.

ment of the United States.

should lie in the govern¬
It should be for the admin¬

istration, in charge of the President and his cabinet, to
say, ‘Ts this country in such a condition that
authorize the banks to have a further fifty per

can

cent, in¬
crease upon the pledge
sub-treasury,
of its assets to the
satisfactory to the sub-treasurer, who is there, and to the
committee in that district?”
That means $350,000,000
for which no gold is gotten.
That is an emergency cur¬
rency if a crisis comes on the country and it becomes
necessary to devise something in order to take the place of
the clearing house certificates.
Now, how are you going to get your gold? In ordinary
times I find in ©hnada that there is an expansion and
contraction in quantity of about twenty per cent, between
the spring and winter season, $66,000,000 lowest last year
and $80,000,000 was the highest.
That in our country would
mean $125,000,000.
It is very easy in ordinary times to
get this $125,000,000 to put up as a reserve. But the
question is, when times get tight, when the threat comes
to the country, you must have some large central force to
get that gold. How are you going to get it? I would get
it from the Secretary of the Treasury of the United
States. He is in touch with what is going on. He knows
how much the banks have issued. He knows just exactly
in all portions of the country how tight money is and
how much necessity there is for it.
Let him invest his
primary, funds. Let him draw on the foreign exchange.
Let him invest all of that accumulating primary fund
in what they call prime foreign bills of exchange.
That
is what the foreign banks do in order to get in the gold
when they find that the currency is expanding.
You can
discount that short paper and bring the gold in.
I would go still further than that.
I would say that
the government deposits of these United States, instead
of being based on government bonds, as they are now, let
them be based on prime foreign bills of exchange in the
hands of the Treasurer, which he at any time can call in.
There is nothing safer than commercial paper at short
time.
We know in times of panic bonds we cannot get
rid of. They go down and down and we have no market
for them. But bills of exchange mature themselves. Let
him put in place of it foreign bills of exchange. You can
create a bureau, and let that bureau buy for him and
hold for him

against that reserve prime bills of exchange.
gold is needed, all he has to do is to
substitute for it such assets of the bank as may be taken
in place of it and free that
gol4*K l
>
>o ^ *,
Now, gentlemen, that would secure the currency in a
When he finds the

SECTION.

13T

way that I don’t see how any central bank
it. You have it elastic. Any community can

could secure'
organize its
own bank by
fulfilling the conditions, and issue its own
currency for its own needs.
If it needs more currency
there, it can add to its own capital. It has to ask no
board or bureau anything about whether money is tight
in other parts of the country, whether we should cut down
the issue of currency, whether your town should be held
down to what another town is because
a

rule that

only

have to have

much

currency
so
the dictation of no

allowed to issue currency,

start to make

should be issued.

You

are

one.

simply

which is permitted here by pay*

ing the tax and putting up the reserve.
But, gentlemen, I don’t think that yet would be safeenough, and there is one thing in our banking system
which ought to be improved, and which it is necessary
should be improved, and that is the bank examination.
All of you know that the bank examination is today noth¬
ing but a mater of form. I would have each of these subtreasury districts pay bank examiners on a paid salary,
who would have to report on the substance just as well
as on the bonds, who would have to make a
report that
he has examined the bank and that he can certify that
its capital has not been impaired, and if it is impaired,
and it is discovered afterwards that it was not reported
by reason of his failure to attend to his duty, he should
be discharged from government service and never employed
again. I would have this examination made three times
a
year, and never made twice by the same examiner, so
that a corps of expert examiners could be formed in each
of these currency districts who would know the condition
of

banks

within that district.

You would

have

all the

elements of

a good currency, security, elasticity, stability
circulation.
par
Now, gentlemen, as to the effect upon three people—
the public, the government, and the bank.
But before I
take that up, I want two or three minutes of explanation
as to the
manner of the transition, which will be
very
simple, in this way. After a fixed date the present bondsecured currency will be reduced fifty per cent.
Every
national bank will be only allowed to issue fifty per cent,
as
against the present bond-secured currency, and each
year a reduction of ten pet* cent, until it is wiped out.
The capital of the banks of the country is about a billion
dollars.
There is only about $675,000,000 worth of cur¬
rency notes now issued. A great many banks won’t issue
them because they fear the two per cent, government
bonds may go down.
Make your provision for retiring
the bonds, and then all the banks will be willing to get
the one per cent, profit there is in the change.
If they

and

have- five hundred million dollars of

bond-secured

cur¬

rency, each year it will
it is wiped out. That will

be reduced ten per cent, until
leave a difference of $150,000,000
of bonds which they will have to resell.
Now, just sup¬
pose they have resold those bonds at three per cent. We
want to get rid of this threat which hangs over the banks,
that is, that through war or any disaster which may come
to the country a large portion of those securities would de¬
preciate in value.
Now, here is one per cent. Let us see what it would
mean.
The government would get two per cent, on $700,000,000, or $14,000,000, which would lose one-half per cent.,
and would still

come

out three million and

than the expense
from half a million to

half ahead—

of operating the clearing houses,
a
million, and the government
would still come out two millions ahead. There is
nothing
for the government to lose in this.
Now, how about the people? Why, gentlemen, every
fall in our part of the country, and I
suppose this extends
clear across the land, we are
sending into New York an
appeal to send us thirty or forty or fifty thousand dollars,
and of course we are obliged to
charge up the rate which
we have to
pay; the farmer has to pay the outrageous rate
because we have to charge them with it, and
they are
obliged to throw their product on the country and get
out of it what they can
get.
more

134

BANKING

Now, suppose we can get
that amount of
currency

into every community just
that they need. Instead of send¬
ing $106 on and getting $100 back, you send $25 of cur¬
rency and you get $100 back.
The resources of every
portion of the country are expanded seventy-five per cent.,
and in the other case
they are decreased six per cent.
What would be the result? You are
expanding your re¬
sources just that much.
When the people don’t want it,
you can keep it out. Talk about inflation! You send your
currency out into one district, and if they don’t want it
they send it to another district, and if they don’t want it
they send it to another, or send it back, and the insurance
is added to it all the time that it has been
out, between

eight and ten per cent. You get it out, and unless the
people of the country want it, you can’t keep it out, and
that is the experience of every
country—France, England,
everybody else.
Now, gentlemen,

far

the transition in detail works

SECTION.
out, it is all

going to

say

explained here in this pamphlet, and I am not
ar^thing ’more on that, because anyone who

is interested to know how the details will work out
find it all explained there. Now,

can

gentlemen, I have worked
plan because it has seemed to me that the central
was not
just in accordance with the genius of our

out this

bank

government, and it seemed to

that

some

other system

could be worked out, and if

anything which I have sug¬
gested here can form the foundation in any way for the
working out of a system whereby each community is al¬
lowed to get its
currency just as it is required, without
the supervision of any bureau or
any central organization,
I think that the
government of this country would like
to see it done, that the
people of this country would like
to see it done.
Therefore I have made these suggestions
in the hope that they
may form the foundation for en¬
abling us to get another system than the central bank in
this country. I thank you,
gentlemen. (Applause.)

Work of the United States

Monetary Commission.

By Hon. Theodore E. Burton, United States Senator from Ohio.
Gentlemen

the

American

Bankers’

Association,

thank you for your very
It is my desire to ask

cordial invitation to address you.
your earnest co-operation in the
work of the National
Monetary Commission, and then to
add a few suggestions upon
topics of interest to you. I
appear as a member of that Commission, but in no sense
as its
mouthpiece or representative. Any views I may ex¬
press upon controverted questions must be understood to
be personal to myself.
Whatever reports may have been

circulated, whatever opinions any individual member may
have expressed, the Commission,
as a body, has made no
recommendation; nor has it reached any conclusion.
The Monetary Commission was created
by the act ap¬
proved May 30, 1908, under the provisions of what is
commonly known as the Emergency Currency Act or the
Aldrich-Vreeland

Bill.

This

act

passed when the
panic of the autumn of 1907 was still fresh in the minds
of the people and the
necessity for reform in our currency
system and banking laws was very generally recognized.
Hence Congress provided for a Commission to be
composed
of eighteen members, nine to be selected from the Senate
and nine from the House of Representatives. It was
thought
best to restrict the membership to
those who were in
touch with legislative procedure, men more
readily quali¬
fied to formulate practical legislation which would command
general approval, and who would be able to explain and ad¬
vocate
of

measures

was

any recommended before the two branches

Congress to which they belong.

was,

however, in¬

tended that the very best expert opinion
and assistance
should be obtained from the
banking profession as well
from every

other source which might be helpful. Sen¬
Aldrich, of Rhode Island, was chosen Chairman and
Representative Vreeland, of New York, Vice-Chairman.
as

ator

The duties of the Commission

succinctly stated in
and report (to Congress)
what changes are necessary or desirable in the
Monetary
System of the United States, or in the laws relating to
the

are

act, namely, “to inquire

banking and currency.”
For the accomplishment of this
object ample authority
was given.
The Commission, either in Committee of the
whole, or by sub-committee, has held numerous meetings
and conducted many
hearings. Some of its members have
visited Europe, and by personal contact with the
leading
bankers of England, France and Germany, have obtained
information at first hand. Prominent political
economists
and experts in banking have
prepared articles giving the
past history of banks and banking operations and Betting
forth all

tative

prevalent theories

committee

from

upon the subject. A represen¬
this association appeared before

the

Commission, in response to a request, to state their
Not only this Committee, but other members of
the Association and bankers of the
country, either in re¬
sponse to inquiries or on their own initiative, have given
the Commission the benefit of their
experience and sug¬
gestions in relation to banking and currency problems. A
working library1 upon banking has been prepared and
printed, for which the claim may confidently be made that
in practical value and
completeness it surpasses any ma¬
terial available along these lines.*
The criticism may have arisen that the Commission has
made tardy progress in its work, because for more than
two years now no concrete
proposition for legislation has
been presented.
But when we consider the magnitude of
the interests involved, and the
contrariety of opinions
to be harmonized, the time is not
long. It is better to be
assured that projected legislation will be
helpful, and will
command popular approval, than to enact
ill-digested laws
and regulations which would have to be
changed within a
few years.
Thus far the time has been usefully occupied
in obtaining a basis upon which to act.
One feature assumes especial importance to
anyone who
has had experience in Congress—the
exceptional difficulty
in legislating upon any subject which has to do with
finance or banking.
Senator Sherman, after a long career
in which he had framed many financial
measures, once re¬
marked that no one of them met with his entire
approval
because concession and compromise had been
necessary in
every case in order to secure their passage.
The insistent
of visionaries in finance, oftentimes supported
arguments
selfish interests, as well as the clash of different theo¬
ries concerning the part which the State should perform
in relation to banking and currency, have alike
prevented
needed reforms in the past, and will render ideal
legislation
views.

difficult in the future.

The

co-operation of the bankers of the country, to¬
gether with that of all who have given intelligent attention
to financial problems, is indispensable in this situation.
No suggestions will be thrown in the waste basket.
Every
student of public questions realizes that he can
occasionally
glean an idea of value from what to the hasty observer
He can at least obtain
may seem a mass of rubbish.
from this kind of material a knowledge of what
people are
thinking about and of the arguments which he must meet.
I trust there will be unity in the recommendations of
the bankers, that your propositions may be so well ma¬
tured and so carefully confined to changes which will
bring
manifest benefit, that no* difference* of opinion U;an exist
among yotil*
**
<
r
1
*♦
1
-

BANKING
Again, while it is your privilege to urge your side of
is hoped the changes you advocate will be
presented with a full sense of your responsibility not alone
as bankers, but as citizens of the United States.
Every
experienced legislator has seen much of the insistent,
though intelligent, selfishness of men who desired favors
in legislation; much more than is agreeable or helpful to
him. That participation in legislation will assuredly most
commend itself to each of you which recognize that the
regulation of banking, the issuance of currency, the safety
of private and public funds, the sufficiency of credit, are
subjects which vitally affect the whole people and not one
profession alone. Whatever is done should be for the
the case, it

SECTION.

135

of the Aldrich-Vreeland Act, was limited to notes
by bonds of the government.
Second, their management is subject to frequent ex¬
amination and constant supervision by officials of the gov¬
ernment.
The Comptroller of the Currency may close a
bank, and when it is closed, he appoints a receiver to take
passage
secured

care

of its assets.

form in their

Third, statutory regulations control many methods of
transacting business. These regulations pertain to the
loaning or disposition of their funds upon the theory
that there are certain rules essential to safety which should
be enforced by law, such as the maintenance of a fixed re¬
serve, and a prohibition against lending more than a speci¬
fied proportion of its capital and surplus to one borrower.
In these respects the degree of governmental supervision
and of regulation by fixed rules is much in advance of
established practices in other countries.
Yet it must be
said that these rules have accomplished salutary results,
and there is no probability of their repeal. It is possible
that some flexibility in the maintenance of reserves might
be beneficial, but no sweeping changes are probable or

is not desirable.

desirable.

welfare of all and not for the enrichment of the few.
I make

especial appeal to the officers of State banks
banking institutions for co-operation. Congress can
only pass laws directly affecting the National banks.
Legislation, of course, might be adopted similar to the
10 per cent, tax on the notes of State banks which would
compel them to incorporate as National banks, or to con¬
an

and

methods., But drastic action of this nature
In order, however, that any reforms may
be effective, it is desirable that so far as the different
functions and various

spheres of activity of State banks
allow, State legislatures should frame the same gen¬
eral laws as those enacted by Congress. The necessity for
uniformity emphasizes the necessity for an even greater
degree of co-operation by those who have the manage¬
will

ment of State institutions.

Before

passing to the general work of the Commission, I
appropriate to impress you with the great possi¬
bilities which may be made actualities by personal initia¬
tive and by co-operation among yourselves without politi¬
cal action or the passage of any law.
Let there be a
constant realization of that community of interest which
•exists among you, a general desire to succor those institu¬
tions which are threatened by runs or adverse conditions
together with an insistent demand that all those who have
the custody of the funds of the peop]f shall maintain the
highest standards of care and honesty. These will do
much to solve troublesome problems of banking. Without
legislative action it is in your power to adopt the sug¬
gestions in the excellent address of your President for a
uniform system of accounting and for more perfect co¬
operation in detecting those who are engaged in “kiting
paper” or obtaining loans by fraudulent representations.
think it

period in which too much reliance is placed
law, and when people wait for the
that which they should accomplish
themselves.
This statement will, I am sure, evoke a
hearty response from all of you because the bankers of
the United States have in the past few decades wrought
We live in

upon substantiative
State to accomplish

little

less

than

revolution in results which make for

greater safety and more perfect provision for the demands
industry. This, too, has been done without
entering in any large degree into those mammoth com¬
binations which are characteristic of the business of
manufacturing and transportation.
of trade and

The Commission has the

duty of considering laws relat¬

ing to banking and currency. The admission must be
made that the National Banking Act of 1864 has worked

been found necessary occasionally to
remedy the defects in its original pro¬
visions, and partly to meet new conditions created by the
phenomenal growth of the country. The system for which
it stands, as distinguished from others preceding it in the
United States and those of Europe, has several prominent
features, all of which involve an exceptional degree of
governmental control, and of connection with and depend¬
ence upon the government.
First, National banks are compelled to hold a certain
quantity of United States bonds. They may act as fiscal
.agents for the collection or disbursement of government
moneys. Their right to issue circulating notes, until the
very well.
It has
amend it, partly to

Some

propositions relating to administrations are pend¬
ing, none of which assume the highest degree of impor¬
tance.
Among them is proposed the appointment of bank
examiners by Civil Service examinations. The argument
for this proposed change is the elimination of political in¬
fluence and the securing for these very important positions
of men of ability as examiners and accountants.
On the
other hand, experience and certain moral qualities are
requisite, and no Civil Service examination can determine
the fitness of applicants along these lines. What is essen¬
tial is, that those having the selection should recognize
their responsibility by choosing good men, and when men
are once appointed and prove faithful and competent they
should continue in office and receive deserved promotion ir¬
respective of political or other changes.
Proposals have been made for a change in the compensa¬
tion of examiners from a fee to a salary system and for
changing the basis of assessments upon banks for their
compensation from a percentage on capital of banks as
now, to a percentage on capital and gross assets.
There is, no doubt, room for stricter rules to regulate
the lending of the funds of a bank to officers and directors.
It will not, therefore, be contended that an absolute rule
be enforced against accommodations to directors of banks,
for this would, in many communities, deprive the institu¬
tions of their best customers and would diminish the in¬

terest of directors in their

management.
important reform, if I may suggest, would be to
require the directors to give closer attention to the man¬
agement of the banks with which they are connected, so
that they may not be mere dead-heads in determining its
policies.
A

The courts have decided that the

making of false re¬
ports to the Comptroller of the Currency is not a mis¬
It

demeanor.
the

law

false
ment

seems

clear that it

was

the intention

inflict

punishment for the making of any
reports, and there is no good reason why an amend¬
should carry out this intention.

There

are

other

tion of banks

suggestions relating to the administra¬
organized under Federal charters which will

receive attention.
of every member
bers of this body

And I

sure

that I voice the desire

of the Commission in inviting the mem¬
to exercise the utmost freedom in making

suggestions.
of

I shall not enter upon the discussion of the desirability
a central bank.
It is altogether improbable that any

institution will be
the bank

advocated

which shall be similar to

banks chartered in the early history of the
The United States Bank was in direct competi¬
Republic.
tion with the other banks and possessed great advantages
because of the prestige afforded by reasqn, of its relation
with the National Treasury. In any proposition for such
or

136

BANKERS’

institution

CONVENTION.
has there been the single intention to establish
and sufficient currency system.
At the very threshold of this discussion, it should be
stated that some very able financial writers maintain
that too much attention has been given to the question
of currency issues.
They maintain that the proper
method for the prevention of panics and securing an ade¬
quate monetary supply must be secured by the utilization
of deposits in banks for the settlement of balances and
by the management of bank reserves. It is their con¬
tention that the object sought could be attained by a
systematic mobilization or massing of reserves.
The use of checks and similar devices has vastly in¬
creased.
They are employed not only in the payment
of very large sums, as in purchases of stocks and bonds
and wholesale transactions, but in payment of small
bills and settlement of retail transactions, even to
pay¬
ment by students at school and to bills due at the barber

pronounced popular opposition must be

money

taken into account.

be said, in comparing our banking operations
Europe, that vital differences exist between
them, both in commercial and industrial conditions, and
in the habits and customs of the people.
Ours is an ex¬
panding country, in which there is rapid growth in popu¬
lation and wealth; profits are greater; risks are greater;
rates of interest are higher.
The same difference exists
in a measure between the older and the newer portions of
our
country.
The volume of speculative operations is
greater in the United States and for a manifest reason.
Speculation is not explained by the temperament of the
people. Its prevalence and extent are determined by op¬
portunities for profit from increased value. In seeking to
pattern banking operations in the United States after
those of European countries, all these facts must be taken
may

with those of

into account.
No doubt the

shop.

question in which you are most interested
How shall the circulating medium be

is that of currency.

It has been said

by an advocate of this theory
the evolution of trade there are three well-defined

rendered elastic and sufficient in volume without redund¬

Two important facts in the history of our cur¬
rency go far to explain the absence of comprehensive
laws on this subject.
First, the issuing of greenbacks
in the time of the Civil War was followed
by great
activity in business and the accumulation of many for¬
tunes.
A period of great expansion and prosperity con¬
tinued both during and after the Civil War.
Thus the
existence of an abundance of currency became associated
in the popular thought with prosperity and
individual
opportunity.
It has been demanded of the party in
power that such policies shall be adopted as will promote
business activity.
The predominant public opinion has
favored the greatest abundance, yes, a superfluity of
money.
The retention in circulation of $346,000,000 of
greenbacks and the limitation upon the withdrawal of
National bank notes, both illustrate this.
On the other
hand, every rational plan for the management of the
currency has included a provision for a decrease in vol¬
ume whenever
necessary to check inflation or to respond
to changed conditions.
In view of these conflicting ideas
it has been almost impossible to frame laws carefully

those of

ancy?

and

dispassionately.

is, in the second place, an important fact that, for
fifty years, plans for the issuance of currency have made
the monetary supply subordinate to some other object so
that the problem has not been wrought out as an inde¬
pendent proposition. For instance, the issuance of the
greenbacks was authorized in 1862, not because this form
of currency was regarded as the best, or even as a good
one, but to meet the urgent necessities of the govern¬
ment for the payment of troops and the
purchase of
supplies.
The government had made no satisfactory provision
.for borrowing, and in addition there was no adequate cur¬
rency supply, and a currency system could not be ex¬
temporized on short notice.
The

provision for

supply of

currency was a prominent reason, but coupled
with it was the very commendable desire to get rid of

hybrid

including the issues of many banks
These banks were of unequal solvency,
and their bills were subject to constant danger from
counterfeiting. Another primary object, here again, was
to increase the borrowing power of the government by
affording a means for the sale of its bonds which were
a

in many

currency,

States.

made the sole basis for the issuance of the National bank
notes.
Third:

Laws for

coinage of silver and the Silver Bul¬
were advocated by those who
desired what was called “Bimetallism,” and were
promoted
by those who were interested in silver mining and in
securing a cheaper medium with which to pay debts.
Thus in legislation for neither of these three kinds of
lion Purchase Act

of 1890

barter, money and

and that

that in
periods:
clearing of balances,

a mere

have reached the last in which the

use

money will be gradually superseded by the use of deposits
in banks.
The use of checks, which make available de¬

posits in the bank
the increase.

as a

substitute for currency, is greatly

But for that fact

much

larger volume

of metallic and paper money might be
necessary.
It is also maintained that in times of stress
-

adequate

properly mobilized are sufficient to ward off the
I would not minimize the importance
of the methods advanced by the supporters of this safe¬
guard against danger. There has probably never been a
panic in this country so severe that if the total mone¬
tary supply was available, in the ordinary channels, it

reserves

threatening storm.

would

not

have been

sufficient to meet the

demands

the time.

But, however adequate the aggregate or total
supply, we have to deal with the efficiency of money as

determined
est

increase the

use

The great¬

availability of

of substitutes for currency.

apprehensive that under the habits which

obtain among the American people, and, in view of
occasional distrust of financial conditions, the date

when

deposits in banks can provide a substi¬
has not been reached. Con¬
payments by the settlement of balances are

reserves

tute for

ditions
not

taken to

and to extend the

reserves

But

by its ^affability for circulation.

should be

care

now

Take next the National bank notes.

secure

for

elastic currency

favorable here

elsewhere.

There is

not

here,
countries, notably England, a bank in
every village.
Our population is more widely scattered.
Those who spend money spend a larger share of it in
as

some

older

localities remote

from their

homes

and in

places where
might not be readily received. The unequal
demands for money at different seasons of the
year more
keenly affect the situation. All these facts require a
their checks

greater and

But the most

variable volume of currency.

potent reason why elasticity in the cur¬
should be provided still remains. In a time of panic
money is withdrawn from banks and located we hardly
know where, no doubt largely in safe
deposit boxes. Far¬
mers draw their hoards from banks.
At any rate the fact
is painfully manifest.
Comptroller Knox, in his report for 1873, gives some
startling figures. The total amount of outstanding bank
currency, legal tender notes, and fractional currency on
October 13, 1873, was $756,315,135. The total amount held
by the Treasury and by banks on that day was $116,496,957, or less than one-sixth of the total amount outstanding.
On the same day the national banks of New York
City held
only six millions of legal tenders as against thirty-two
millions thirty-one days previous. Any system which does
not provide for such a situation is defective.
In support of the theory that reserves constitute the
solution of the problem reference is made to the Bank
of England.
It is said this institution has no power to
rency

BANKING
provide elasticity in the currency. Every additional note
must rest upon gold in the issue department.
It is to be
noted, however, that most important differences exist in
the English banking system as compared with ours.
In
the first place, the Bank of England raises the rate of
discount which attracts gold in large quantities from
nearby money centers. Second, and more important, it
is the depository of the reserves" of the joint stock and
other banks which regard a deposit in the Bank of Eng¬
land as the equivalent of cash and (it should be carefully
noted) receive no interest upon such deposits, nor doesf
the Bank pay interest upon any deposits.
In times of
stress there is an increase, rather than a decrease of the
deposits of the joint stock banks with the central bank.
I may remark in passing that the decided tendency in
other countries has been toward
issue in

centralization of note

single institution or agency. It will, however,
agreed that whatever method is adopted the
four following principles should be observed in any plan
for regulation of the currency:
a

I think be

The

tion

same

care

should be observed for the cancella¬

withdrawal of

circulating notes when they are re¬
scarcity or stress.
Great pains should be taken to prevent the utilization of
note issues for the promotion of speculation or injudicious
enterprise.
2. In regulations for the issuance of currency the deci¬
or

dundant

sion

the

for their increase in times of

amount

should rest upon
be assets upon

There should be

and

continuance

its

circulation

the demands of trade. The basis should
which there can be prompt realization.
the greatest possible divorce from arbi¬

trary control or political influence.
3.
Circulating notes should possess the quality of abso¬
lute security, or at least the nearest possible approach to
absolute security.
The pleasing fiction written down by
some

writers

finance that

bill intended for universal

circulation and

acceptance as money is only one form of
the obligations of a bank, and should be possessed of no
greater sanction than other debts, cannot be accepted.
The time will not and should not come when after reading
of the failure of a* bank the reader will anxiously search
his pocketbook to see if he has any bills of that institution.

THE

4.In

SECTION.

case bills are issued by banks, profits should not
expected from the exercise of the privilege, but rather
from the added ability to provide for their customers and
the advantages which accrue from their ability to meet any
and all emergencies. I do not understand that the banks
have sought profit in this direction.
Gentlemen of the American Bankers’ Association, I con¬
gratulate you upon the results which your association has
achieved. I trust that your usefulness as an organization
may continue in increasing measure.
The model citizens in this Republic is the man who mas¬

ters

some

the

branch of useful endeavor and

development of his

of the

common

welfare.

tasks with

fidelity to his employment and with loyal at¬
country.
its bene¬
ficial purpose.
Whatever promotes the conservation of
property or the encouragement of thrift promotes the pub¬
lic good.
The function of the banker is by receiving deposits and
extension of credit, to so utilize the capital of a community
that commerce and industry may grow in volume without
check.
The banker bridges the chasm between the diffi¬
cult and sometimes unpromising beginnings of enterprises
and their successful accomplishment. He makes the hopes
which look to to-morrow the realities of to-day. He en¬
ables the deserving man, bereft of opportunity because of
limited means, to share the richest prizes of fortune. He
exercises

conservative influence

business undertak¬

represses the recklessness of speculation.
The bank encourages thrift, and gives to those desiring
to make a provision for later years or for posterity secur¬

ity for their savings, and such increase
for their

use.

equivalent

It renders the accumulation which passes

from hand to

hand, or from the dead to the living, safe
generations.In the performance of these most helpful tasks may each
of you do his duty in accordance with the highest ideals
of your chosen occupation and thus contribute to the up¬
building of the communities in which you live and to the
lasting benefit of our common country.
for

NATIONAL

NEW YORK OFFERS TO

DE¬

THE

POSITORS EVERY
THEIR

BUSINESS

over

ings, and

WHICH

his skill for

own capabilities and the promotion
It rests with him to perform his

CITY

BANK

uses

tachment to his home, his fellow-citizens, and his
In our complex civilization every occupation has

FOURTH
OF

137

AND

FACILITY

BALANCES,
RESPONSI¬

BILITY WARRANT.

Committee
Annual

Reports—Banking Section.

Report of the Secretary, Fred E. Farnsworth.
New

York, September 1, 1910.

To the American Bankers’ Association:
It

with

much

pleasure that I submit herewith

report

General Secretary of the American Bankers’ Association for
the fiscal year ending August 31, 1910.

With

the present large membership in the Association, the
activity of the various departments, the growing and prosper¬
ous
Sections, the active, alert and resourceful committees, it
would not be possible in the short space of time allotted to me
to do full justice to the vast machinery which now moves the
wheels of this organization.
I can only allude briefly to the
salient points in our work, and point out that the past year
has distanced the preceding year in growth, activity and results,
in distinction, and to the satisfaction of the large membership.
EXECUTIVE

The

COUNCIL.

of Chairman Livingstone deals generally with
accomplished by the Council. The May meeting
of the Council was largely attended, and the business trans¬
acted by the committees as well as the Council occupied three
full days’ time.
The amendments to the. Constitution passed at the May meet¬
ing, which were recommended to the Association for approval,
will place our committees on a much more sound basis, and
will bring them closer to the main body and the Executive
Council, and avoid conflict between the Sections and the Asso¬
report

what has been

future

The wisdom of this

might bring forth.

movement is

apparent, and has been for some years.
It is one of the
important features of the Association’s work, and one which
is probably more appreciated by the general membership than
any other.
The year’s work has been successful; the change
now

made in

the detective agency has proven a decided advantage
the Association and its membership.
The exhaustive report

the

Standing Protective Committee will enlighten you fully

this subject.
The Standing

Protective Committee, which has just com¬
pleted its year of service, has responded to all calls for meet¬
ings, and for the consideration of matters which have required
its attention.
The members of this committee have been pains¬
taking and careful in the performance of their duties, and have
on each and every occasion given of their valuable time to the
interests of the important work entrusted to them.
It is
gratifying to report that, regardless of the malicious attacks
made by the Pinkerton Agency, after the severance of our re¬
lations, and their untiring efforts to establish their own agency
and to withdraw the support of the members of our Associa¬
tion, our membership has steadily increased; there have been
no complaints of the action taken in making the change,
and
only the heartiest approval of the work of the Burns & Sheridan
National Detective Agency; and in the collection of annual
dues, commencing with the 1st of September, 1910, the Treas¬
urer has received a much larger sum, in fact very nearly
three
times as great, as during the same period one year ago.

ciation in the future.

COMMITTEES.
SECTIONS.

This has been

successful year

for the Sections. The mem¬
bership of the Association having been so largely increased has
also increased the membership of the Trust Company and the
Savings Bank Sections.
The new set of “Trust Company
Forms,” which has been completed during the past year, has
met with general approval by members of the Section, and has
been liberally purchased.
The Savings Bank Section continued its fight, through its
Special Committee, against “Postal Savings Banks,” and though
active and aggressive and carrying on an extensive educational
work, the measure became a law; not so much, however,
through its merit as the fact that it was a party measure, a
political expedient, and had to become a law to redeem party
pledges.
The Clearing House Section has made rapid strides during
the year in its limited field, and the various measures, proposed
in the past, have met with approval in many quarters.
The American Institute of Bank Section, which represents
the Institute, has now about 10,000 members and 56 chapters.
The action taken by the Council at its last meeting in con¬
solidating the Journal and the Bulletin, and in providing for an
associate membership has proven a wise move, bringing as it
did, this great educational body closer to the parent organiza¬
tion, and will evolve educational features which can now be
extended to the clerks of country banks.
The foresight of bringing the various Sections together into
offices in conjunction with the general offices is more apparent
each day.
The advantages of having the annual proceedings of the
various Sections combined with the general proceedings of the
Association have been many times apparent since the inaugura¬
tion of this plan last year.
The members of the parent organi¬
zation in this way are apprised of the workings and accom¬
plishments of the Sections, to which they are entitled, and, on
the other hand, it is a convenience to have the complete con¬
vention proceedings in one volume.
a

I wish to commend the work of the Section Secretaries—
Messrs. Babcock and Hanhart—and that of Educational Director
Allen.
During the year just closed there has been hearty co¬
operation between these departments and the general offices,
which has been of advantage to all concerned.
CURRENCY

There
active

the

was

occasion

during the past

National

for

Monetary

Currency Commission to be
outcome of the work of

Commission

committees

the

of Congress.

When this

and

currency

legislation,

without

doubt

our

owes

many

vote

for

thanks

their

STATE

We
There

have

now
are

three

the

States

ASSOCIATIONS.

Union

forty-six

State

Associations.

without Associations—New

Hampshire,

Rhode Island and Delaware.
I have followed

closely the reports of the State Associations;
correspondence with the various State Secre¬
taries, and I have attended conventions or meetings in the fol¬
lowing States: Washington, D. C., Texas, Oklahoma, Kansas,
Iowa, New York and Pennsylvania; and from information
gathered from all sources I am convinced that the State Asso¬
ciations have been most successful, and have held better con¬
ventions this year than at any other time in their history. The
successful group meetings, which have been held everywhere,
the splendid State conventions, and the great interest on the
part of members all have a strong tendency to create a greater
I

have

been

interest in the American Bankers’ Association.

Having been identified with the Organization of Secretaries of
Bankers’ Associations as
its
Secretary since it was
founded, I have been brought very closely into contact with
the State Secretaries, and know what firm friends of our own
great organization they are.
I wish to state most emphatically
that I believe this organization should be made a Section of
the American Bankers’ Association, with a representation of one
member on the Council, and that the Secretaries should be
recognized as delegates to our annual * conventions.
At the
present time they have no standing, and unless they are bankers
and can come representing their banks, they cannot sit with
their State delegations, but must take seats in the gallery.
This proposed amendment would bind the two organizations to¬
gether and form a link which would be invincible.
State

LEGAL

DEPARTMENT.

Our Legal Department is now firmly established, and Is more
and more appreciated each year by our members who take ad¬

Mr.

of the excellent legal advice furnished
Paton, whose opinions are published in

Paton’s

committees,

services

are

also

invaluable

our

General

Journal.
Section and

our

and he is earnest and interested in every phase

of the work.
"the journal.”

Currency

Commission will be called into conference.
STANDING PROTECTIVE COMMITTEE.

When, sixteen years ago, the Association, with a small
membership and in its swaddling clothes, took up the work
of protecting the banks of the
country from criminal opera¬
tions, it was a failMSIghted, keen and businesslike action; amt
at that time the promoters could scarcely realize what its

had

Association

Monetary Commission begins its deliberations, for future bank¬
ing

have

loyalty, interest and for what has been accomplished.

Counsel

year, pending the

time in the

history of the
live, active and pro¬
gressive committees, the members of which have been willing
to give the necessary attention to the requirements of com¬
mittee work.
Great results have been obtained, and to these
when

vantage

COMMISSION.

the

do not believe there has been

Association

The Journal completed its second year on July 1.
Its popu¬
larity has increased monthly. It is one of the Important fea¬
tures of Association work, and we are having continual evi¬
dences of the appreciation of this feature by our large mem¬
bership.
Its consolidation with the Bulletin will make it an
even more valuable publication than it has been
the past,
and will keep our members informed as to the Institute as well
as

the Association.

BANKING
ASSOCIATION

SECTION,

OFFICES.

MEMBERSHIP.

The

register in the general offices shows that there has been
an increase in the number of visiting bankers
during the past
.year.
I wish to impress on our membership that we maintain
at headquarters in New York City a library and
reading room
which is at the disposal of our members at all times.
The headquarters has also been frequently used for commit¬
tee meetings, and for this purpose it has proven not only
^convenient but desirable.
To

sary

and employs some

twenty people.

ROUTINE

efficient than

-day

has

been

Arkansas

California

Connecticut
Delaware

Georgia

...

Idaho

Illinois

Indiana

Iowa

for

ease

custom,

reference purposes.

General

State

class

in every respect, well handled, and
convention
transacted with
the ability

During the year I have also attended
meetings and Chapter banquets.

the

business

veterans.

some

the

Chapter

Maine

MEMBERSHIP.

Erased

10,682

the

rolls,

Minnesota

Missouri

781

Nebraska

year,

including regained..

Aug. 31,

1910, Total membership
increase for the fiscal year of....:

A net loss

for

A net loss

for the

the year

New

Hampshire

...

Mexico

New

York

151

145

220

453

186

158

110

206

.15

311

117

293

221

807

148

120

350

143

114

411

Carolina

North

Dakota

....

year

in failures, consolidations, etc
in delinquents....

“....

Rhode

Making the actual gain in
STATISTICS

and regained

new

MEMBERSHIP

members
FOR

1,021
SECRETARY'S

THE

REPORT.

South Carolina

The

150

147

390

Virginia
Washington

Virginia

Wisconsin

164

131

246

174

342

162

174

342

144

229

379

147

130

191

149

250

349

203

185

329
29

•

*903

131

127

210

213

101

501

315

131

254

483

151

124

115

190

125

196

309

184

139

242

144

166

303

Vermont

Utah

Dakota

West

241

Texas
298

31, 1910.

Island

South

AUGUST

Private Tr. Co’s Sav. Bks. Total

Tennessee

168

State

Oregon

J30

ASSOCIATION

1,504

723

Oklahoma

11,405

loss

net

ADDITIONAL

Nevada

Pennsylvania

Total

9,901

1909,

Membership
Aug. 31, 1910, Members joined during

A net

Montana

North

through failure, liquidation, consolidation

withdrawal

:■...

Ohio

-Sept.

152

Massachusetts

Michigan

New

1909

from

and

Maryland

New Jersey

31,

141

142
.

Mississippi

The new forms of credit blanks which were published in the
May Journal, and which were prepared by a special committee,
headed by James G. Cannon of New York, have created wide
interest, and very many of them are being used by our mem¬
bership in obtaining statements from their customers.

Aug.

Nat’l

Territory

Louisiana

the

BANKS

Kansas

ciation, I attended the annual convention of the American In¬
stitute of Banking in Chattanooga in June last.
This con¬
vention, like the former annual meetings of this body, was
of

MEMBERSHIP.
DIVISION

Kentucky

first

Arizona

Secretary of the Asso¬

31, 1910.

Private Tr. Co’s Sav. Bks. Total

be carried with

can

State

AUGUST

Alaska

believe will prove much more convenient and
that used in the past.
We are also issuing each

ASSOCIATION

Nat’l

Territory

Alabama

complete registration list, conveniently arranged, which

BANKS

Florida

WORK.

During the fiscal year just ended there has been sent out
the General Offices about 236,000 circular
letters, docu¬
ments, codes, etc.
This does not include the several thousand
letters of our regular correspondence.
We have introduced at this convention a new system of
regis¬
which

State

District of Columbia,

from

tration

DIVISION

Colorado

provide for the increase in departments and the neces¬
work the Association now occupies a suite of fourteen

rooms

139

128

792

delinquent loss is the smallest in the history of the As¬
sociation in proportion to the membership—less than 1%
per

Wyoming

cent.

Canada

The aggregate capital, surplus and deposits of our member¬
ship amounts to almost $14,000,000,000.
The membership and resources of the Association have in¬

Cuba

Hawaii

creased as follows:

Porto

4,172

892

1,025

830

11,405

Paid Membership

Annual Dues.

September 1, 1875
September 1, 1885

1,600

1,395
1,570

12,975.00

August 31, 1905
August 31, 1906

7,677

Pines

113

Rico

Mexico

10,940.00

September 1, 1895

Isle

127,750.00

$11,606.00
4,486
MEMBERSHIP

STATES

AND

TERRITORIES

HAVING

LESS

THAN

100 MEMBERS.

8,3S3

137,600.00

August 31, 1907

9,251

150,795.00

August 31, 1908
August 31, 1909

9,803

162,507.00

Alaska

Vermont

10,682

175.352.00

Arizona

Wyoming

Canada

Cuba

Maine

Hawaii

Nevada

Isle

New

Hampshire

New

Mexico

August 31, 1910

11,405

Interest

Bonds

Interest

Bank

Making

the

total

and

Corporate

Balances

(estimated)

Stock

(estimated)

income

Loss

YEARS.

5,930.00

Rhode

Gross

211

Gain.

741

4,500

234

819

585

1901

5,504

200

1,313

1,113

1902

6,354

186

1,159

973

1903

7,065

313

1,139

826

1904

7,563

500

1,120

620

1905

7,677

1,038

1,152

114

1906

8,383

337

1,043

706

1907

9,251

434

1,302

1908

9,803

691

1,243

1909

10,682

760

was

reduced

868
“

552
879

1,639
?'f

1,504'

tpio/l

723

by regained members to 298.

1910.]

Porto

Pines

Rico

Mexico

49
49

Total

628

APPRECIATION.

530

1900

1910
' •
11,405
The loss shown in 1910

Island

It would not be possible to conduct
as

i ui

Columbia

Net

Gain.

Merger and
Delinquent, etc.

Utah

By Fail-

ures,

3,915

Delaware
District

$192,972.00

MEMBERSHIP

1899

187,042.00

$4,650.00
1,280.00

[As Of August 31,

ours

kind

successfully, and to

vast

organization

progress as an Association of this

should

progress, if your General Secretary did not have
hearty support of his associates, and I desire to express
my sincere thanks for the uniform courtesy and able assistance
received from the Executive Council, the Vice-Presidents of the
various States and the Secretaries of the State
Associations,
as well as from the officers of the
Association, and especially
Treasurer Kauffman, who has always co-operated with us in
handling efficiently the finances of the Association.
He has

the

been

energetic and enthusiastic official.
To all those above
is due largely our handsome in.ecease in member¬
To Assistant Secretary Fitzwilson and to our efficient

enumerated

ship.

•

140

BANKERS’

CONVENTION

office force much credit is also due for expeditious work and
their willingness at all times to contribute to the success
of the administration by faithful services and uniform
courtesy.
With this convention President Pierson ends three years of
active service as
of the Executive

Secretary.

official. Mr. Pierson
Council when I was

with

elected Chairman

was

first

elected

yoUr

keen

regret that our official relations
are now to be severed.
For the past two years the Chairman
of our Executive Council residing in Western cities has made
it necessary for Mr. Pierson to act as a resident representative
of the Chairman;
During all of his administration he has
shown utmost interest in the Association and its work; he
has been indefatigable in his labors; he has shown the initi¬
ative ; is resourceful, energetic and conservative yet broad, and
through all of this period of time perfect harmony has pre¬
vailed.

Added to all of this is Mr. Pierson's service as Chair¬
man of the Bills of Lading Committee for a number of
years,
the work of which committee is now being brought to a suc¬
cessful culmination.
to

broken and

look

can

back

Now that the bond and the close ties

our

relations

are

severed

officially, I
with unalloyed pleasure.

are

these three years

only recently that some new history became known
through Mr. James T. Howenstein, formerly of St. Louis, Mo.,
in

connection

with

the

organization of the American Bankers’
Mr. Howenstein gave me
the facts which led up to this action.
He said: “It was
women who gave us the inspiration.
At that time the bank¬
ers of the country were very much depressed over conditions.
Mr. Breck (also of St. Louis) and myself were on our way
home, and passing the auditorium noticed crowds of women
coming out of the building. It was a suffragists’ meeting. The
idea came to me that if women could get together to heal their
sorrows and woes, why couldn’t bankers get
together to shoo

Association in 1875.

A short time ago

their sorrows?”

Mr.

Howenstein issued

which

was

held

the

New

call

for

the preliminary meeting
City May 24, 1875, and from

York

this

meeting of seventeen bankers emanated the call for the
Saratoga in July, 1875.
It is a fitting tribute to this great organization and to our
bankers that with each succeeding convention the attendance of
convention at

ladies increases.

just entering the deliberations of our Thirty-sixth
Months of preparation on the part of the
local Committee of Bankers in Los Angeles and the executive
are

Annual Convention.
officers
to

of
the

our

Association

most

have

successful

culminated

convention

in
the

what

bids

fair

history of the

Association, entertained as we are going to be in the beautiful
city of Los Angeles—the pride of the Western coast; a city of
prosperity and energy ; of wonderful growth and resources.
I
would like to take this opportunity to pay a tribute to the
manner
in which the various committees have arranged the
details

this

convention

and

the

entertainment

which

store

for us.
This convention, with its unqualified success,
which I know will be the verdict when it will have adjourned,
is the forerunner of what we can expect in the future.
To
stand still means to retrograde.
with the increased interest of

We
our

be other than most brilliant and
All

of which

bound to advance, and
members our future cannot
are

promising.

is respectfully submitted.
Fred E. Farnsworth,
General Secretary.

Report of General Counsel, Thomas B. Paton.
In the administration of the affairs of the office of General
Counsel during the past year, the policy has been continued of

framing and promoting legislation which will afford better pro¬
tection against criminals as well as uniform legislation on com¬
mercial subjects and the procurement of laws to provide more
adequate safeguards in relation to a variety of banking trans¬
actions. Much has been accomplished along these lines during
the last three years ; much more remains to be done ; and, aside
from the field of legislation, the active and advisory work in
behalf of committees and the membership in general has cov¬
ered a wide range.
’
PROMOTION OF

STATE LEGISLATION.

In the criminal branch of the

legislative work it is not alone
burglar with sledge, jimmy and explosive, nor the robber
with mask and pistol, who must be reckoned with, but the edu¬
cated, polished villain, the commercial fraud, who, by varied
trick and misrepresentation, too often succeeds in causing a
loss of bank funds.
Measured by extent of pecuniary damage,
crimes of force and violence, Injurious as they are, are second¬
ary in importance to crimes of deception and to frauds which
only touch the borderland of crime.
In the constant warfare
against evil and the efforts of society to protect itself against
wrongdoers, it is unfortunately true that criminal laws do not
keep pace with the new inventions of fraudulently disposed
persons, and while the Penal Codes of the different
States cover
generally such crimes against property a$r burglary, robbery,
larceny and -t.be, obtaining of money or property by false pre¬
tence, they do not adequately, or at all, define as crimes and
the

have

number

commercial

frauds

which, of late years,,

been

successfully perpetrated with increasing frequency.
beginning has been made towards improvement in the pro¬

motion of

bills to

punish the making or use of false state¬
credit, a kind of fraud not adequately covered
by false pretence statutes, and to punish the giving of checka
our

ments to obtain

drafts against insufficient funds; and the work before Gen¬
Counsel in this relation, in addition to the further exten¬
sion of our present criminal measures (which also include bills
to punish bank slanderers and the crime of
burglary with ex¬
or

eral

plosives) is the obtaining and classification of information of
the different kinds of injurious, fraudulent practices, not now
punishable, and the framing and promotion of legislation which
will make such acts criminal.

Apart from criminal legislation the work of promoting the
State enactment of the Uniform Acts on Negotiable Instruments,
Warehouse Receipts, Bills of Lading, Stock Transfers and Sales
of Personal Property, as well as the special Association meas¬

relating to limit of time of liability for payment of forged
checks, the payment of deposits in two names and in
trust and the competency of bank notaries is progressing satis¬
ures

raised

factorily.

PROSPECTIVE.

punish

the

selection

subjects of proposed legislation General
advice and co-operation of
the Standing Law Committee, and their approval of drafts of
laws as prepared, and the promotion of all our State legislation
Counsel

has

had

the benefit of the

has been due to the efforts and active work of the officers and

legislative committeemen of State Bankers’ Associations.
Last year, when forty State legislatures held regular
sessions,
no less than
thirty-seven enactments of our Association bills
made in the different States ; this year, with only thirteen
States holding regular sessions, the number has naturally been
much less, yet substantial progress has been made.

were

Ohio has

enacted

our

Association

measures

False

State¬

ments for Credit, Derogatory Statements affecting banks and
Payment of Deposits in two names.
Maryland has passed the Uniform Acts on Bills of Lading,
Warehouse Receipts, Stock Transfers and Sales of Personal
Property; these with the Negotiable Instruments Law pre¬
viously enacted give the State of Maryland the record as being
the

first

have

Commercial Acts.

its

statute books

all

five of

the

Uniform

addition, Maryland has passed a general
banking law, establishing a banking department, and this con¬
tains among its provisions our Association measures relative to
payment of deposits in two names and in trust.
The Uniform Warehouse Receipts Act has also become a law
in the District of Columbia by signature of the President on
April 15.
Virginia has passed an act to punish the obtaining of money
upon fraudulent checks, but not in the form recommended by
.

our

Association.

The State of

Texas, at a recent special session, has enacted
comprehensive bill of lading law which, while not the
Uniform Act recommended by our Association, gives full pro¬
tection to the holders of bills of lading.
a

very

Aside

from

ticularly

the

measures

interested, there

which

has been

our

Association

par¬

other

legislation relating
to banks in these and other States during the present year.
Georgia passed an act relative to the establishment of lost
or destroyed certificates of stock of banks
and other corpora¬
In Kentucky an act has been passed authorizing
tions.
the
formation of corporations to do a trust, banking and title in¬
surance
business, and Columbus Day has been made a legal
holiday in that State. Maryland has also amended its Holiday
Law by adding Labor Day to the list of legal holidays.
Massa¬
chusetts has amended the Maturity Section of the Negotiable
Instruments Law by adding a proviso exonerating the holder
of a demand instrument from negligence for not presenting the
paper on Saturday, and has passed certain amendments to the
Savings Bank Law; also an act, which was substituted for our
Association measure to punish the making of false statements
to obtain credit, punishing one who with intent to
defraud,
obtains by false pretense the making or indorsement of com¬
mercial paper, the release or substitution of collateral or an
extension of time for the payment of an obligation.
New
Jersey passed an act respecting deposits by infants with banks
and trust companies, which makes it lawful for infants to
make deposits and withdrawals by check or otherwise, the same
adults.

New

York has passed a private banking bill which applies
only to cities of the first class and provides for the licensing
of individuals or partnerships engaged in the business of receiv¬
ing deposits and the filing of surety bonds and deposit of
securities with the Comptroller.
The law exempts from the
licensing provisions of the act private bankers where the aver¬
age of each sum received on deposit during the preceding year
is not less than $500, and exemption may be had from all the
provisions of the act by filing a bond with the Comptroller, in
New York City in the sum of $100,000 and in Rochester and
Buffalo in the sum of $50,000.
Ohio, in addition to the laws
already specified, has amended Section 8301 of the General
Code relating to holidays, and also passed ,an act authorizing
the

Smiexiptendent of ^Insurance

pall

officers of banks such information

upon and receive from
he may require relating

BANKING
to the financial transactions of Insurance
companies, penalizing
any bank officer or director for non-compliance.
Ohio also
amended its general banking law in a number of

particulars.
Rhode Island enacted certain amendments to the general law
for the incorporation of savings banks and also
provided a
penalty for delay in the making of returns of banks, savings
tanks or trust companies; also a provision as to the issue of
duplicates for lost or destroyed savings bank passbooks.
Vir¬
ginia has amended certain sections of its Code relating to
banks and added new sections, which provide for the examina¬
tion of banks and relate to certified checks, checks of
drunken
persons, deposits of deceased persons, persons under disability
and minors and prohibit private banking
except by those en¬
gaged In business prior to January 1, 1910.
For the year 1911, when a large number of State
Legisla¬
tures meet, an active and aggressive campaign is
being planned,
and
to

there will

govern

also be worked out and drafted

bank collections.

The

uniform

law

questions presented by mem¬

bers for

solution, arising out of controversies regarding liability
correspondents, diligence in presenting items by
mail, responsibility for lost items, right to proceeds in event
of iusolvcncy and other disputed points as to
collections, are
very numerous, and the law on this subject Is in such con¬
flicting and uncertain condition as will make a uniform and
simplified code most desirable.
There are also certain amend¬
ments to the Negotiable Instruments Law which seem
needed,
and it is also proposed to prepare and present these amend¬
for defaults of

ments

for

consideration

Commissioners
fected

and

Uniform

recommended

the

State

the

five

annual

Laws.

conference

This

Uniform

the

body has per¬

Commercial

Acts

which have been indorsed

by this Association, the last of these
having been perfected and recommended in 1909, and it has
been the privilege of your General Counsel, representing this
Association, to participate in the deliberations of the Commis¬
sioners during the last four years.
It is deemed the proper
course in matters of amendment to the Negotiable Instruments
Law, which originated with the Commissioners to first present
such amendments to that body for discussion and obtain their
indorsement, in addition to obtaining the approval of our own
Association.
The National Civic Federation last

January, at a three days’
Washington, which was attended by the
President and General Secretary of the Association, as well as
your General Counsel, also took up the subject of promoting

conference

held

SECTION

141

safeguarding of savings deposits in banks and trust companies.
This draft

submitted

to the committee, as was stated at
of my duties as General Counsel, part
of which are to render legal advice and assistance to the vari¬
ous officers,
sections and committees of the Association when
called upon, and in so doing I am not to be regarded as either
advocating or opposing the wisdom of the policy underlying the
the

was

time, “in

pursuance

enactment of such

law.”

The

general propositions underlying proposed State legisla¬
tion of this character have not, as yet, been submitted to the
Association for discussion and action.
RAILROAD

BILL AND BANKRUPT LAW.

Congress, also, at its last session, passed the Railroad Bill
creating a Commerce Court and amending the Interstate Com¬
merce Act relating to the practices of carriers and the super¬
vision of the Interstate Commerce Commission; and also im¬
portant amendments of the National Bankruptcy Law regulat¬
ing the compensation of receivers and trustees, permitting the
voluntary bankruptcy of corporations, permitting compositions
with creditors before adjudication and permitting trustees in
bankruptcy to oppose the discharge of the bankrupt at the
expense of the estate.
INTERNATIONAL

CONFERENCE

There has been held this
tional conference
tries

relative

summer

BILLS

at The

EXCHANGE.

Hague

interna¬

the unification of the law of foreign coun¬
to bills of exchange, the delegate of the United
on

States

being Mr. Charles A. Conant.
Preparatory to this con¬
a number of preliminary questions were formulated for
consideration dealing with the issue and form of the bill of
exchange, the obligations and rights of parties, indorsements,
acceptances, guaranties by third parties, maturities, payment,
recourse
upon non-payment, loss, forgery, protests and other
pertinent detailed provisions. These questions were gone over
carefully at a series of conferences held on the call of the
American Commissioner, attended by American bankers inter¬
ested in the subject, and participated in by your General
Counsel as representing this Association, and these meetings
developed the American view as to what the uniform law should
contain.
As a result of Thfe Hague conference a uniform law

ference

has been
for

framed

referred

back

consideration, and the subject will

the

come

different
up

powers

again at the

conference to be held next year.

uniform

laws, indorsed certain of the Uniform Commercial
Acts and provided for the continuance of their work.
Since
then, meetings have been held and State councils organized in
Maryland, Connecticut, Ohio, Illinois, Indiana, Wisconsin, Mis¬
souri, Kansas and Nebraska. Your Counsel is keeping in touch
with

this movement.
DEPOSIT

GUARANTY

LEGISLATION.

States have passed deposit guaranty laws this year, and
Interest in the subject has been transferred from the domain of
the

legislatures to that of the judiciary, where there must be
determination of the validity of the laws already
The status of the different cases is this: The case of
passed.
Noble State Bank vs. Haskell, in which the State Supreme Court
sustained the Oklahoma law, is on the docket of the Supreme
Court of the United States and likely to be reached quite early
in the October term.
The case of Shallenberger vs. First Na¬
tional Bank of Holstein, in which the United States Circuit
Court at Lincoln held the Nebraska law unconstitutional, Is
also on the Supreme Court docket, but not so far advanced.
It is quite likely that these cases may by arrangement be heard
together.
The Kansas law, which differs from that of Oklahoma and
Nebraska in being voluntary and not compulsory, has been de¬
clared constitutional by the United States Circuit Court of
Appeals, Eight Circuit in Dolley vs. Abilene National Bank, 179
Fed. 461 (reversing 175 Fed. 365), in an action by 150 Na¬
tional banks of the State, who, not being able to participate,
contended that they were discriminated against and affected
injuriously by the operation of the law. I presume this case
will also be taken higher.
I have not heard that the Texas law, which requires the
banks at their option to protect depositors either by a guaranty
fund or a bond security system, has been as yet taken into the
courts, nor that the South Dakota Act of 1909, to authorize
the forming of State associations of incorporated banks and the
creation of a depositors’ insurance fund has been questioned
as to its constitutionality.
ultimate

SAVINGS BANKS.

Notwithstanding determined opposition, the Senate, on June
22, passed the Postal Savings Bank Bill as it came amended
from the House, and the bill was approved by the President on
June 25.
It is unnecessary to state the provisions of the meas¬
ure, as its full text was published in the Journal of the Asso¬
ciation for July, and it will be referred to in other reports.
Last spring, at the request of the Committee on Savings
Bank Laws, General Counsel prepared a summary of existing
State laws fel&ting to segregating and safeguarding of savings
deposits and also an outline draft' b*f act tt> prdVidfe for the
establishment of savings departments and the “segregating and

CHECKS

December

and

the

CORPORATION

TREASURERS.

the

Appellate Division of the New York
Supreme Court rendered a decision in a case of Havana Central
Railroad Company vs. Knickerbocker Trust Company, holding in
substance that checks drawn by the treasurer of a railroad cor¬
poration on the Central Trust Company to his personal order
which were indorsed by him and deposited to his individual
credit in the Knickerbocker Trust Company and checked out, by
means of which checks the treasurer misappropriated the rail¬
road company’s funds, carried notice to the depository from the
mere form of the checks that the transactions were irregular
and put it on inquiry as to the treasurer’s right so to with¬
draw

use

corporation’s

funds.

This

decision

was

viewed with considerable alarm by the officers of a number of

large banking institutions, as it established a doctrine
never before held, which would have put the banks on
concerning each and every one of the hundreds of
checks and of this and similar character, legitimately
daily received on deposit to the credit of the drawing
It was felt that the decision of the Appellate Division
case

carried the

doctrine of

constructive notice to

of law,

inquiry
official

drawn,
officers.
in this
extreme

and

impracticable length, and that an attempt should be made
to have this dangerous rule of law overturned and prevent its
spread to the jurisprudence of other States.
Accordingly, by
the authority of your officers, General Counsel petitioned the
New York Court of Appeals for permission to intervene and
be heard on behalf of the Association on the argument of the
appeal; this petition was granted to the extent of allowing the
filing of a brief, and a brief was prepared and filed!;
Similar
action was taken by the New York State Bankers’ Association.
On May 17, by a unanimous bench, the New York Court of
Appeals rendered a decision overruling the decision of the Ap¬
pellate Division.
BURGLARY

the

INSURANCE.

the Committee on Fidelity Bonds and
Burglary Insurance, General Counsel has prepared a tentatiye
draft of a bank burglary and robbery policy, the end in view
being a standard form to be written by the companies for mem¬
bers of the Association.
This draft will, as I understand, be
considered by the committee at Its next meeting, and will then
be taken up and discussed with representatives of the different
surety companies.
In preparing the draft General Counsel ex¬
amined all the bank burglary policies now in use, incorporated
what in his Judgment were their best features, made certain
additions, changes and omissions designed to increase the pro¬
request

tection of the banks and certain modifications in the provisions

exempting the
1

companies from liability.

A standard form Is planned, which it is tiotied the companies
will agree to, that will give the banks increased protection and

142

BANKERS’

simplify the conditions surrounding the contract..
considerations

uniformity

Upon

on the market, no two of which are alike as to provision.
No small part of the work of General Counsel in the last few
months has been in replying to questions of members concern¬

now

ing the merits of different forms of burglary policies offered
to them by different companies.

result of

FIDELITY

BONDS.

investigation made last spring, your Coun¬
number, but not all, of the surety companies
were
requiring banks, preliminary to the renewal of fidelity
bonds, to sign a certificate to the effect that the books and
accounts of the employees had been examined and found cor¬
rect in every respect; that all money and property in their
control or custody had been accounted for, with proper securi¬
ties and funds on hand to balance all accounts; that none of
them were in default, and that they had performed their duties
in an acceptable and satisfactory manner.
sel

found that

“expenses and loss and damage sustained,” but coupled withprovision that it did “not release the American Bankers’

mere

standard form is greatly to be
desired, as it reduces the contract with every bank to the same
single set of provisions in place of the dozen or more policies

RENEWALS

CONVENTION.

the

Association or their detectives, the Burns & Sheridan National
Detective Agency, on account of any part they took” in the
arrest.
Upon his return to California Schneiderman immedi¬
ately entered suit, naming as defendants the American Bankers’

Association, the Burns & Sheridan Agency, E. R. Mills, their
local superintendent, and R.
Stone, the city marshal of Fuller¬
ton, Cal., demanding damages in the modest sum of $100,000,
and also including as defendants the two bondsmen of th<^
city marshal, from whom he demanded $5,000 each additional
damages.

Without serving any of the other defendants, the
complaint were served on the Merchants’ Na
tional Bank of Los Angeles as a member of the Association,
and this, it was contended, was a sufficient service on the
Association to give the court jurisdiction under the California
statute which provides that when two or more persons asso¬
summons

and

ciated in business transact such business under a common name
the Association may be sued by the common name and the
of

certifi¬

behalf of the

has advised members not to execute

true

a number of

necessary affidavits were prepared
showing that this Association was not of the character contem¬
plated by the statute and forwarded to California, and a.
motion was made to quash the service of the summons.
The
motion was argued and briefs submitted, and on
July 23 the

Court granted the motion.
This ended the case so far as our
Association is concerned without the necessity of going into
the merits or of establishing its non-liability on other grounds.
THE

A number of

upon renewal of fidelity
certificates from certain

others;
to

not

to the best of

the

bonds, and
classes

but wherever

some

insist

upon

banks

while

not

executed,

members

renewal
requiring

have

been

certify to such statements absolutely but only
their knowledge and belief.
THE

Since

and

PROTECTIVE WORK.

efficient

Protective
General
Counsel has been in close touch with
depart¬
ment, and has been constantly called upon for advice concern¬
ing criminal laws, penalties and procedure.
A notable case is that of one Charles M. Meeker, to which
considerable attention has been given.
Meeker, during last fall
and winter, was engaged in issuing time drafts upon The Lon¬
don Commercial Banking Company, S. A., so-called, against a
pretended credit, the drafts being negotiated by various payees
and invariably
proving worthless.
The scheme, admittedly
fraudulent, was a cunningly devised attempted evasion of the
criminal laws, the drafts being issued in each instance under a
contract with the payee that the latter would himself make
them good before maturity, none of the proceeds going to
Meeker, but only a commission for the use of the drafts, and
they were generally issued in one State and negotiated in an¬
new

management of the

Department of the Association, inaugurated

a year ago,
the work of that

other.

Meeker

connection with

Jersey

CORPORATION

TAX

LAW.

involving the constitutionality of the Cor¬
argued before the Supreme Court of the
United States last spring, but no decision was rendered, and
on May 31 the Court restored the cases to the docket for re¬
cases

poration Tax Law

were

argument at the October term.
took

interest

Last January General Counsel
with the Treasury Department the question whether

received

Government

bonds

could

deducted

ascertaining net income and presented an argument in favor
of such deduction, but his contentions were overruled.

false.”

them

Los Angeles banks, was retained on

Association, the

BILLS

Some companies do not require the execution of any certificate

advised

The

Gray, Barker, Bowen, Allen, Van Dyke & Juten,

attorneys for

containing such absolute warranties, as should they be in¬
correct in any respect, because of undiscovered defalcations, the
courts would hold they constituted false representations which
would nullify the renewal insurance.
The Supreme Court of
Illinois, in Fidelity & Guaranty Company vs. First National
Bank of Dundee, 84 N. E. Rep. 670, said of such a certificate:
“The law is well settled in its application to insurance con¬
tracts that a misrepresentation of a material fact, in reliance
upon which a contract of insurance is issued, will avoid the
contract, and it is not essential, in equity, that such a repre¬
sentation should be known to be false.
A material misrepre¬
sentation, whether made intentionally and knowingly, or through
mistake and in good faith, will avoid the policy.
We think
there can be no doubt that the representations upon which
appellant relies were material. The points covered by the cer¬
tificate of the President were particularly required by appel¬
lant’s letter.
The request of appellant for information upon
these points makes the answer material.
The rights of the
parties therefore depend upon whether the representations were

General Counsel
cates

be served upon one or more of the parties.

summons may

law firm

and

was
a

arrested

New

York

draft issued in New York to

negotiated

March
payee

in New

New Jersey bank, but no crime
transaction, the payee apparently
believing the draft to have been good, and Meeker was dis¬
charged. Having been indicted in the interim in Texas, jointly
with others, because of similar operations, he was immediately
re-arrested in New York, and has been ever since fighting extra¬
dition to Texas, an array of legal counsel having appeared in
his behalf at a number of hearings both before the Governor of
New York, who honored the requisition, and before the Supreme
Court where the case is still pending on appeal.
Throughout
Meeker has remained in jail, not having furnished the required
could be made

out from

LADING.

The

past year has been a busy one for the Committee on
Bills of Lading, and in their various acts and proceedings your
General Counsel has actively participated.
A new bill was
drafted

behalf of the committee and introduced in the House

Congressman Stevens of Minnesota on January 7.
This
measure was designed to make a bill of
lading in the hands
of a bona fide holder good and enforceable against a carrier,
notwithstanding it had been issued without receipt of the
goods or had not been taken up when the goods were deliv¬
ered, as well as to make an altered bill valid as originally
drawn, and it also provided certain requirements as to form.
The measure was given a hearing by the House Committee on
Interstate and Foreign Commerce on
February 7. This meas¬
ure was designed to make a bill of
lading in the hands of a
bona fide holder good and enforciable against a carrier, not¬
withstanding it had been issued without receipt of the goods
or had
not been taken up when the goods were delivered, as
well as to make an altered Mil valid as originally drawn, and
It also provided certain requirements as to form.
The measure
was
given a hearing by the House Committee on Interstate
and Foreign Commerce on February 7 at an all-day session
which lasted well into the evening, and was opposed
by a
number of railroad attorneys.
On May 3 the House Com¬
mittee agreed to report the bill, with certain amendments, only
two of the eighteen members dissenting, and on June 7 it was
reported to and passed by the House of Representatives by an

almost

unanimous

vote.

this

Senate

Committee

hearings

The

bill

Interstate

was

then

Commerce

referred
and

given

the

three

June 16, 20 and 21, but the time was too short
consideration, and the final action of the com¬
mittee was postponed until next winter.
The report of the
Committee on Bills of Lading will inform the members of the
Association more at length, not only with regard to the
prog¬
ress of legislation but also the work done
by a sub-committee
in the obtaining of validation certificates upon export cotton
bills and in relation to the foreign situation, as well as con¬
cerning the various other activities of the committee.
for

its

proper

bail.

Turning to

of a different nature, concerning which
brief mention should be made, on June 4 an action was brought
in the Superior Court of Los Angeles by one Louis Schneiderman, against the Burns & Sheridan National Detective Agency
and others, including the American Bankers’ Association, asking
for damages by reason of an alleged false arrest in connection
with the forgery of certain drafts which had been cashed by
two banks in San Antonio, Tex.
Schneiderman was arrested
in California and taken to Texas, and was released because the
San Antonio banks failed to identify him as the person who
cashed the drafts.
When released
from
custody, the two
San Antonio banks settled with Schneiderman
by paying him
$168, for which he executed a release to those banks for

GENERAL

case

SERVICES

FOR COMMITTEES

AND

MEMBERS.

During the year General Counsel has been called upon by a
number of committees for the performance of a variety of serv¬
ices which need not be detailed, and many articles have been
written and contributed to the pages of the Association Journal.
The work in the promotion of legislation has included attend¬
numerous
conferences and official hearings, as well
preparation of a number of legal arguments in support
of particular measures.
Throughout the year the correspond¬
ence and opinion branch of the work of the Counsel’s office has
been very extensive.
Information has been furnished to mem¬
bers in all parts of the country, uupon t requests concerning
statutes, ’decisions, customs and a variety of subjects connected
ance

the

BANKING
with

banking.
Written opinions, many requiring much time
research, have been rendered upon numerous questions of
banking law. In all, 188 such written opinions have been pre¬
pared and forwarded during the year.
A very large part of
the time of General Counsel has been occupied in work of this
character, and from many sources comes evidence that this
exacting and technical work in behalf of the individual mem¬
bership is appreciated.
and

APPENDIX.—THE SCHNEIDERMAN CASE.

(Statement by General Counsel.)
be interested in a more detailed statement of the facts
proceedings in this case than is made in my general report
the Association, and I have been requested to make such

may
and

statement.

The

facts

brief

giving his name

are

follows:

On January

11, 1910,

A. J. Van Houten opened an account
with the Alamo National Bank of San Antonio, and about the
same time a man, giving his name as O. H. Nance,
opened an
man

account in the State Bank and Trust

Company of San Antonio.
along in a small way for a couple
of months, when on March 8, 1910, Nance presented to the
State Bank and Trust Company a draft for $300, dated March
1, 1910, purporting to be drawn by the Grapevine National
Bank of Grapevine, Tex., on the Hanover National Bank of
New York, payable to the order of O. H. Nance, and drew
$180 on it,- leaving a supposed balance of $120 to his credit at
the bank.
This draft was sent to New York, and on the 11th
the bank was advised by telegraph that it was a forgery.
About the same time another draft dated March 1, 1910,
purporting to be drawn by the Central National Bank of Boonville, Mo., on the Corn Exchange National Bank of Chicago
to the order of A. J. Van Houten for $250 was deposited in
These accounts

the

Alamo

were

National

carried

Bank

by Van Houten which was also a
forgery and on which the bank sustained a partial loss.
These cases were reported to the American Bankers’ Asso¬
ciation

and referred to the Burns & Sheridan National De¬
tective Agency for investigation.
That agency had an investi¬

located at Houston, Tex., go to San Antonio for the
making a thorough Investigation.
There was no
the forgeries had been committed by one person,
using the names of Van Houten and Nance, as the descriptions
given by each bank of such person closely tallied. A thorough
investigation was proceeded with, the former residence of
Van Houten in San Antonio located, and it was learned that
he had a wife and two small children and had recently de¬
parted for Mexico, husband and family going independently.
The trail was followed into Mexico, where it was established
to the satisfaction of the investigator that Louie Schneiderman, whose description corresponded with that of Van Houten,
and who had a wife and two children of corresponding ages
and appearance, and who had also gone from San Antonio to
Mexico, his wife and children likewise traveling there inde¬
pendently, was the person wanted.
This being established
(whether rightly or wrongly is still under investigation, as the
Texas investigator still maintains that he is right), the trail
followed the movements of Schneiderman and his family, and
Schneiderman was finally located in Fullerton, Cal., where he
was pointed out to the city marshal by the Los Angeles
agent
of the Burns Agency as the person for whom a warrant had
been issued in Texas and was thereupon arrested.
Schneiderman, while declaring his innocence, consented to
accompany the officers to San Antonio without extradition.
Upon arrival in San Antonio and spending a night in jail, the
tellers of the two banks were unable to identify him, and ex¬
pressed the opinion that Schneiderman was not the man who,
under the names of Van Houten and Nance, had defrauded
their respective banks.
Schneiderman was thereupon released
from custody and settled with the two banks, they paying
him $168 and taking from him a release for all expense, loss
and damage sustained, the release, however, expressly providing
gator,

purpose of
doubt that

that

did

the Burns &

not

include

the

American

Bankers’

Association

Sheridan National Detective Agency for the part
they took in his arrest.
Upon Schneiderman’s return to Fullerton, Cal., he immediately
entered suit on June 4, 1910, in the Superior Court for the
County of Los Angeles, naming as defendants William J.
Burns, William P. Sheridan, E. R. Mills (the local superin¬
tendent), R. Stone (the city marshal of Fullerton), the
American Bankers’ Association, the Burns & Sheridan Nationat
Detective Agency and Charles E. Ruddock and D. S. Linebarger.
the last two being bondsmen of the city marshal, asking as
damages $100,000 against all the defendants, except the two
last named, and from them asking $5,000 each.
The summons and complaint in this action were not served
on any of the defendants, except that service was made
upon
the Merchants’ National Bank of Los Angeles as a member of
the Association, under the California statute, which provides
that when two or more persons associated in business transact
such business under a common name, the Association may be
sued by the common name, and the summons may be served
upon one or more of thepnrties.
u*
) 9in
q
lia
Notice of this ;action was immediately wired to headquarters

143

in New York, and the law firm of Gray,
Allen, Van Dyke & Jutten of Los Angeles
were retained to represent this Association.
Our California attorneys were advised that even if a mis¬
take had been made, this Association could not be held respon¬
sible in the matter, as while the general rule of law is that the
master is liable for the negligent act of his servant committed
within the scope of his employment, the rule is different where
the one employed is an independent contractor; that in such
case the rule is that the employer is not liable for the negligent
of

Association

the

Bowen,

Barker,

acts

It has been suggested that many members of the Association

SECTION

the

contractor

carries

ciation

exercised

his

servants

independent business,

where

the

contractor

doing his work
does not act under the direction and control of the employer.
The legal relation between the Association and the Burns &
Sheridan Agency was explained, and the latter was shown to
be an independent contractor, over whose specific acts in point¬
ing out particular persons who should be arrested the Asso¬
an

furthermore questioned
acquire jurisdiction in the
case by service upon a single member bank, and the California
attorneys were requested to do nothing which would waive the
point of no jurisdiction.
Our California attorneys acted with promptness.
Upon their
request affidavits were prepared in New York and forwarded
to California, showing that the American Bankers’ Association
was not a business organization such as contemplated by the
California statute, and they thereupon made a motion to quash
the service of summons.
This motion was duly argued, and a
brief filed, and on the 23d of July the Superior Court of Los
Angeles rendered a decision granting the motion.
This ended
the case so far as this Association is concerned, the effect
being to leave the Association in the position of not having
whether

control.

and

California

the

was

could

court

been sued.
Should

of this kind

ever come to the point of requiring
the merits, it seems quite clear that there
would be no responsibility on the part of the Association for a
mistaken arrest of this kind which was not made pursuant to
the personal direction of any of its officers, but through the
acts of an independent agency upon their own responsibility,
and furthermore, from the standpoint of responsibility of all
the other defendants in this particular case, the giving by
Schneiderman on payment of $168 of a release to certain but
not all of the parties whom he sought to hold responsible,
looking to the others for the disproportionate amount of
$100,000, raises the interesting question whether he could ap¬
portion his damages between all such parties in this way, and
whether he did not thereby release all from responsibility.
If a mistake has in reality been made and an innocent man
arrested, the case is one of most remarkable coincidences. Ac¬
cording to investigator’s reports the man arrested and the
man wanted were both Russian Jews, of same age and general
a

a case

defense

upon

appearances; both were married and had two children of corre¬

sponding age; the wives of both were of the same age and
general appearance, and both lame in the right hip; both at
about the same time left San Antonio and went into Mexico,
their families also going there, but separately; the wives of
both men formerly lived in Indianapolis or vicinity; Schneider¬
man, it was reported, had been engaged in selling check punches
and illustrating how easily checks could be raised, while Van
Houten had had a printing press at his San Antonio residence
which he was supposed to have shipped out of San Antonio,
but which could not be afterwards located.

Report of the Treasurer, P. C. Kauffman.
Tacoma, Wash., Sept.

Mr.

15, 1910.

President and Gentlemen:

You

will

find

financial

report as Treasurer printed on

page 12 of a pamphlet which has been distributed throughout
the hall.
There is no necessity, therefore, for my reading
the report in

full, but I wish to call your attention to a few
important items.
The cash balance on hand September 1, 1909, was $2,107.86.
The total receipts for the current year were $186,021.47.
Owing to the increasing activity of the Association in all
lines, the expense of operation for the yehr was $186,850.43,
leaving a cash balance September 1, 1910, of $1,278.90.
On August 6, 1910, the Secretary forwarded to the Treasurer,
for collection, 10,987 drafts on account of the current member¬
ship dues, amounting to $178,297.50.
These drafts were at
once
sent out for collection, and up to this writing over
$125,000 has been collected, and the Treasurer expects to
have the collection completed by the last of October.
For investment, the Association holds the following stocks
and bonds, which are deposited with the Bankers’ Trust Com¬
pany of New York, as per instructions of the Executive Coun¬
cil.
Interest on these securities is regularly collected by the
Trust Company and forwarded to the Treasurer,
and by him
of

the

most

credited

the

Association

account.

The

securities

are

follows:

$10,000 Government 4% Bonds of 1925.
30,000 Atchison, Topeka & Santa F6 4% Bonds of 1995.
50,000 Chicago, Burlington & Quincy Illinois Division 4% Bonds
||1<U
of 1949.

•

30,0C0 New York City Registered Corporate Stock, 3%%, due 1940.

144

CONVENTION.

BANKERS’

sincerely- trust that every member of this Association, cer¬
tainly every member present, will analyze the Treasurer’s report
carefully, especially the Financial Statement appended thereto,
showing the appropriations made to and expenditures made by
the several Sections and Committees, as it is only by a careful
persual of these reports that you will be enabled to gain
to clear insight into the activity of this great organization,
and appreciate fully the magnitude of the work it is doing.
In my report at Chicago last year I explained fully the mari¬
ner in which the financial accounts of the Association are kept,
and I would like that portion of last year’s report, which is
found on page 99 of the Report of the Chicago Convention,
to

be considered in

liow

connection

herewith.

It is difficult

to see

improvement could be suggested, as the work is so

any

This

being my last term as Treasurer, for I take it that the
^‘unwritten law of two terms” will prevail at the Convention,
I will turn over the cares and responsibilities of my office
to my success, whoever he may be, congratulating him that
on
account of the splendid organization that prevails in Sec¬
retary Farnsworth’s office in New York, he will find the cares
■of the office to be but few and the responsibilities light.
I desire to express my sincere thanks to Secretary Farns¬
worth and the assistants in his office for the uniform courtesy
I have received from them during my tenure of office.
It has
been pleasant indeed to have been associated with such com¬
petent officials.
To the members of the American Bankers’ Association, who
have twice honored me by election to the high office of Treas¬
urer ; to the officers of the Association and of the several Sec¬
tions ; to the members of the Executive Council, collectively
and individually, I desire to express my deep appreciation of
the high honor conferred upon me, assuring you that one of
the happiest and pleasantest experiences of my life has been
my official connection with this great Association, and I am
it

will

ever

remain

of my brighest recollections.
juvabit.”
Respectfully submitted,
P. C. Kauffman,

Treasurer.

Report of the Standing Protective Committee.
To

the Executive

Gentlemen

New York, September 1, 1910.
Council, American Bankers' Association:

Your

Standing Protective Committee submits
31,

herewith its annual report for the fiscal year ending August
1910.

The past year has been an eventful one for the Protective
Department of the Association, in view of the necessity for
changing our detective agents to the Burns & Sheridan Na¬
tional Detective Agency, which change, we are glad to report,
thus far indicates a decided advantage in the prosecution of
cur

work.
1900

In
for
per

Association

the

services

was

retainer, on
contract, as follows:
as

paying the Pinkerton Agency
a

basis of 4,326 members,

1,500

members

$3.00

250

members

250

members

2.00

members

2.50

2,326

1.50

average of $2.10 per member.
When our membership was 6,500 we were paying a retainer
fee of $3.00 per member to our former detective agency (The

Tinkertons).
tion

would

and

Believing that the general cost of administra¬
proportionately increase with the membership,

with

not

10,000 members there should be a reduction in re¬
the Protective Committee, in December, 1908, acting
■on the suggestion of the secretary, asked for a reduction, which
the Pinkerton Agency rejected.
It seemed impracticable to

tainers,

relations

that

time, and the Pinkerton Agency pro¬
former contract, which was for one year;
but this contract was not made, and the entire matter was
referred to a Special Protective Committee created by the
executive council in May, 1909.
This Committee, composed of
Mr. F. H. Curtiss of Boston, Mr. D. S. Culver of St. Paul, and
Mr. E. K. Smith of Texarkana, held several meetings and met
the representatives of the Pinkerton Agency, the agency mak¬
ing a proposition for a new contract for three years.
The
Special Committee reported this proposition to the council at
the time of the Chicago convention, and the executive officers
were authorized to make a three-year contract on former terms
—$3.00 per member retainer.
On the return of the general
secretary to New York City he was notified by the Pinkerton
Agency that they would not make a contract for less than
five years, no plausible excuse being given for this action, ex¬
cept that the agency had changed its mind.
The Standing
Protective Committee, executive officers and the Special Pro¬
tective Committee met and notified the principal of the Pinker¬
ton Agency that they had no authority to make a contract
for more than three years.
The principal, after making clear
his belief that their own organization was the only one that
could handle the Protective Committee's
work, abruptly, and
sever

posed to

renew

with

whom a contract was immediately executed to carry on
protective work of the Association, without prejudice to
its interests, contrary to the expectation of the former agency
in its abrupt action.
The new contract covers in a general
way all of the work and details as provided for in the former
agency’s contract, and with a very liberal reduction from the
amount paid the former agency in retainer.
For several years succeeding, Protective Committees and offi¬
the

of the Association had been

cers

dissatisfied with the methods

employed, results obtained, compensation exacted, and attitude
assumed by the Pinkerton Agency in handling the protective
of

change

the

Association; so much so, that four years ago a
considered necessary and an arrangement verbally
and tentatively agreed upon with another agency,

was

discussed
which

for

obvious

reasons

that

time,

failed

continue

negotiations.
Since
has

the

been

termination

Pinkerton Agency

Association

the

American

efforts

Bankers’

organization, which is in

Protective

our

the

contract

secure

tenance of their

whose

its

members
to

persistent in its efforts to

Committee

and

the support of the
for

the

main¬

antagonistic
present agency, and

every way

their

they have harassed and hindered in every way

possible.
*'
The following paragraph is taken from a letter sent to the
American Bankers’ Association by the Pinkerton National De¬
tective Agency :
‘‘The little personal benefit, if any, that the agency receives from
being advertised as your agents is more than nullified by the loss of
understand

that

the

agency

ciation,

which

through

the American

was

back of the members of your Asso¬

Pinkerton

professional

criminals

Bankers’

now

Association

generally
sign.”

very

recognize

one

*‘Forsan et hoec olim meminisse
o

proper notice, refused to handle new work for the
Association.
Your Committees had fortified themselves against
this situation through an understanding with W. J. Burns,

work

thoroughly systematized.

aure

without

the

Agency meant what is said in this state¬
its unusual activity in endeavoring to secure thebusiness of the members of the Association through the estab¬
lishment of its own bank detective agency?
In spite of this guerrilla warfare, in spite cf gross mis¬
representations, and in spite of repeated predictions by the
Pinkertons in articles prepared by them for the press to the
effect that the bankers would be made a target of attack by
ment, why

the criminal classes

account of the withdrawal of their

own

services,

the work of the Association has never been better
handled than during the past few months, and it is remark¬
able to note that since the Burns & Sheridan Agency took up
the work, there have been five burglaries and twelve attempted
burglaries, classified as follows:
Burglaries by professionals,
five; eight arrests in three cases.
Attempted burglaries by
professionals, six; two arrests made in one case.
Attempted
burglaries by amateurs, six; five arrests made in four cases,
making in all fifteen arrests in eight cases.
In classifying professional and amateur burglary cases, a
professional operation is where explosives are used, and an
amateur operation is where no explosives are used.
The above statistics cover the period from November 22, 1909,
up to and including August 31, 1910—283 days actual time.
During the period from September 1, 1909, up to and includ¬
ing November 22, 1909—83 days under the Pinkertons—there
were four burglaries and five attempted burglaries.
All these
operations were of a professional order, with the exception of
one attempted burglary.
No arrests were made, directly or in¬
directly, by the Pinkertons, or anyone else in connection with
these operations, that is, during the period referred to, but
the St. Louis, Mo., police arrested one party in connection
with one of these burglaries who was trying to pawn a watch
taken from the vault of one of the banks; he was later ac¬
quitted.
For two years prior to the termination of the contract with
the Pinkerton Agency, as well as during the past year, the
sphere of protection has been extended, covering all classes
of crime against banks, which policy was always vigorously
opposed by the Pinkerton Agency, as it would deprive them of
private business they might otherwise obtain direct from the
banks, and consequently our members have been receiving and
are
receiving to-day more in the way of protection against
crime than ever before in the history of the Association.
This work can only be made fully successful by being com¬
pletely and entirely entrusted to one authority; a conflict of
authority in handling cases cannot but fail to prevent achieve¬
ment of the best results.

With this in

mind, your Protective Committee feels justified
suggesting that In their judgment your Interests would be
best served by loyally supporting with all your influence the
work of the Protective Department and its agents, Burns &
Sheridan, and avoiding entanglements with any other protective
in

service.
The Protective Department was established in 1894.
The
expenditure for this work has aggregated a half-million dollars,
of which about $450,000 was paid the Pinkerton Agency.
Since the establishment of our Protective Department, An-

BANKING
gust 2, 1909, and placing in charge thereof Manager L. W.
Gammon, it has been proven beyond question that this was a
wise move.
Mr. Gammon is particularly well adapted for this
work.
His training of sixteen years in the Secret Service
has fitted him to cope with all conditions
surrounding his De¬
partment.
Since its establishment this Department makes up
its own criminal records, based on actual reports.
We are now
advertising our own Department and not a detective agency,
and neither our Agency nor our Department are
taking credit
for work done which rightfully might belong to State asso¬
ciations, municipal criminal departments, or to sheriffs.
In
this plan our new Agency, the Burns & Sheridan, is
entirely
in sympathy with our Department.
The appointment of Mr. Gammon appears to have been re¬
sented by the Pinkerton Agency; they did not relish his sur¬
veillance
Our

their work.

over

former

the statement that the
records

new

Pinkertons)

has

frequently made

agency and the Association had

pictures of criminals.
In our own offices and our
new Department we have sixteen
years’ records of criminals,
which were furnished us by the Pinkertons.
We have a rogues’
gallery of over 1,200 live criminals, and an up-to-date cabinet
for displaying and preserving these pictures, with a
complete
or

card-index and in many cases Bertillion measurements.
We have eliminated in all reports and in our
publications
all allusion to banks that are depredated
upon,

believing that

our

member

banks would prefer that

their banks not be

men¬

tioned by name in these reports.
We

have

had

evidences of approval of

many

May

3, 1910,

145
By

Appropriation

Executive

Council

25,479.35

$62,479.35
By refund of Pinkerton’s National Agency
By amount received from Merchants* National

Indianapolis,

action

our

49.42

Bank,

Ind

4.41

$62,533.18
DISBURSEMENTS.
Rent

$416.60

.....

Salaries

4,953.93

Telephone,

telegraph and cablegrams...
National Detective Agency,

♦Pinkerton’s

262.93
account

special work

fPinkerton’s

15,837.77

National

Detective

Agency,

account

retainer

(the

agency

SECTION.

16,425.95

Burns & Sheridan National Detective
account

Agency, Inc.,

special work

16,483,60

Burns & Sheridan National Detective Agency,
Inc.,
account retainer

6,295.88

Establishing agencies

531.96

Books, stationery and printing
Extra help
Executive Council Meeting at Atlantic City, N. J..
{Texas Bankers’ Association, Austin, Texas, ac¬

141.70

count

pro-rating

25.00
112.08

Department’s expenses—ice, water and towels
Sundries, storage chests, press clippings and wit¬
fees

ness

39.75

18.65

45.95 $61,591.73

the

changes which have been made.
State associations have
endorsed the Burns & Sheridan Agency, and letters have been
received

from

officers

various

State

associations

and

from

members in all parts of the United States,
commending
changes and expressing the utmost loyalty.
In May last it was alleged that the Burns & Sheridan
Agency

our

the

made

false arrest in California.
The man wanted was one
The man arrested called himself Schneiderman.
The clues were followed and the evidence produced was
very
Van

Houten.

strong, but the tellers at San Antonio, Tex., failed to identify
the man.
This case will be covered in detail in the
report of
the general counsel.
The full financial report of the Standing Protective Commit¬
tee with information regarding the operations of the Protective
Department, are covered exhaustively in the financial reports
and in that of Manager L. W. Gammon of the Protective De¬
partment, and are published in the annual pamphlet following
this report.
The Burns & Sheridan Agency is also making a detailed re¬
port of the work accomplished by them since November 22,
1909, to the end of the fiscal year, August 31, 1910. This re¬
port will be published in the annual proceedings and is also
furnished in pamphlet form for distribution at this convention.
The following figures are given for your information,
being
the reported burglaries and attempted burglaries on banks since
the inauguration of the protective feature:
Non-members

1,143

Members

220

Difference

Lost

$1,535,709.84
165,484.14

923

All of which

“

$1,420,225.70

respectfully submitted.
The

Standing

Protective

Committee.

Report of Manager Protective Department, L. W. Gammon.
I have the honor to

submit this, my first annual report, con¬
of the work of the Protective Department
during the fiscal year ending August 31, 1910, as submitted
and approved by the Standing
Protective Committee.
The arrests made by our former detective
agents, our present
detective agents, and other qualified officers in cases where mem¬

taining

summary

bers of this Association were interested number

follows:

Forgers and swindlers

173

Sneak thieves

Hold-ups
Burglars

7
17
199

Of the above total (199) 40 arrests were made
during the
period prior to November 22, 1909, and in the closing days of
the work of our former detective
agents, and 159 arrests have
been made during the period covered
by our present detective
agents.

Of the

arrests above

mentioned

awaiting trial;

convicted; 57 are
fugitives from justice;

were

committed suicide.

were

killed

acquitted;

are

From Sept.

3, 1910,

Appropriation

Council

$25,000.00
of

Executive
12,000.00

the

partment

1910,

from

amounted

September 1, 1909,
to $61,591.75.
Of

up
the

the

to and including August 31,
$16,425.95 retainer fee paid

Pinkertons, $9,758.00 was paid for the months of May,
and August for the fiscal year ending August
31, 1909.
{The amount paid the Texas Bankers’ Association,

June, July

$112.08,

was

connection with pro-rating a case contracted for
prior to the close of
the

fiscal

The

ending August 31, 1909.

year

total

the amounts mentioned above, which were in¬
during the fiscal year ending August 31, 1909, but paid
during the present fiscal year, is $19,024.45.

curred

Prior

this year such items

as rent, salaries, books, sta¬
tionery, printing, telephone, telegraph, traveling expenses, extra
help, etc., were always paid by the General Secretary’s office,
and were not charged against the work of the
Protective Com¬
mittee.
These items amount to $5,904.51 this year.
The Protective Department was established under
my man¬
agement September 1, 1909. At that time the Pinkerton’s Na¬
tional Detective Agency were our detective
agents. On Novem¬
ber 22, 1909, a change was made
by the Standing Protective
Committee and the General Officers of the
Association, and a
new

contract

entered

was

National Detective

into

with

the

Burns

Sheridan

Agency, Inc.

The Pinkertons continued to
investigate all cases that had been previously taken up by
them prior to November 22d until December
20th, when they
ceased to investigate any cases for this Association.
Upon assuming the management of this Department the first
instructions I gave our detective agents were that all
daily
reports should contain itemized daily charges for each day’s
operations. My object in issuing such instructions was primarily
to decrease the possibility of excessive or
improper charges that
might be incorporated in the bills when presented at the end
of

each

month;

checking the bills

Formerly there

was

practically no

way

rendered, and by having the charges em¬
bodied in each day*s report it is a very simple and sure method
to determine if the charges were incurred or
not, and if they
were legitimate; also if any
errors occurred that could be recti¬
fied at once.
In this way it facilitated the checking up of bills
at the end of each month and saved a
great deal of time as well.
At the beginning of the fiscal year, September 1, 1909,
a new
system of filing was inaugurated, whereby each case reported to
the Department received a separate jacket with the proper nota¬
tion thereon, showing the name of the bank reporting same, and
the nature of the case.
In this way it lessened the chances
of reports being misplaced, and facilitated the
handling of same
and in keeping track of the progress made in each case; not
to

mention the amount of time saved.

filed

The various

cases

are

alphabetically by States, cities and towns in the States,

and banks in the cities and towns.

During the
from

year

this

Department

received

13,997

reports

former and present detective agents, and each report
read over, and the charges embodied therein were checked
our

In addition to the reports there were received 1,443 letters,
telegrams and cablegrams; and 4,439 letters, telegrams and
cablegrams were written in connection with the work.
The
above figures do not include communications received from
State Bankers’ Associations throughout the country, as well as
police departments, local authorities, sheriffs, etc., such as cir¬
cular letters, warnings, notices of reward, etc.

up.

1, 1909, to Aug. 31, 1910, inclusive.
Appropriation of Executive

Council

May

$941.43
$15,837.77 paid the Pinkertons for special work, $9,154.37
was on account of
special cases (unpaid bills) contracted for during
the fiscal year ending August 31, 1909.
|The disbursements on account of the work of the Protective De¬

was

FINANCIAL STATEMENT.

Sept. 17, 1909,

August 31, 1910, Credit balance

♦Of

CONVENTION.

BANKERS’

146

Under pur former detective agents this Association
receive the photographs of criminals with the exception

did not

pf those
contained in the bulletins which they issued quarterly to our
members.
Since our present detective agents have taken up the
work this Association has received photographs of all criminals
who have operated and are likely to operate against our mem¬
bers, with a result that we now have 1,197 photographs in our
gallery, none of which are “dead ones/’ This gallery will hold
approximately 6,000 photographs. Additional photographs are
being received daily which are of great value.
A complete
record is kept of each photograph by having a numbered card
corresponding to the number of the photograph, as well as a
criminal card giving the description and complete history of
each criminal.
In addition, a complete card record is kept of
the operations of all persons reported by our members, irrespec¬
tive of whether a member has been operated on, or a depositor
or individual.
In that way a record is kept and we can deter¬
mine that although a person may be responsible for a depreda¬
tion on a member of this Association, the evidence is not suffi¬
cient to secure a conviction for that particular crime, we have
our detective agents try and arrange for his surrender to other

All matters
monthly Journal which are reported by our detective

authorities in connection with some other crime.
for

the

ment where they had the necessary warrant sworn out and
agreed to prosecute the culprit should he be apprehended.
I hardly consider it necessary to call your attention to any
particular case, as mention has been made of the various cases
under the Protective Department in the monthly “Journal.”
In connection with legal matters appertaining to the Pro¬
tective Department I have had the able assistance and hearty
co-operation of the General Counsel of the Association.
The Protective Department is connected with the Burns &
Sheridan National Detective Agency, Inc., by private telephone,
thereby avoiding delays in transmitting messages and insuring
secrecy from the public.
This Department has all the reports that have been rendered
to the Standing Protective Committee by our former detective
agents for the entire period of their retention by the Associa¬
tion (15 years), and they are being arranged in keeping with
the present system jqf filing.
In conclusion, I wish to thank the members of the Standing
Protective Committee, Special Protective Committee, the Gen¬
eral Secretary, and various officers of the Association, as well
as
individual members, police and Federal officials for their
hearty co-operation and assistance rendered to me during the
fiscal year just ended, in furtherance of my efforts to obtain the

agents are verified by the Protective Department before being

best

published.

ciation.

For

^.,

detailed

statement

the

results

obtained

There
attention

Your Committee

“Yegg” burglars, which our former
agents predicted would commence their operations
when they learned that the Pinkerton Agency were no longer
the detective agents of the American Bankers’ Association.
prediction that the rates for burglary insur¬

would be increased.

Fidelity Insurance was
rate paid for Fidelity Insur¬
ance Bonds was $3.04 per thousand or 85 cents per thousand
less than at the time of the original appointment of the com¬
mittee in 1899.

Of the burglaries and attempted burglaries, which number 26

during the fiscal year just ended, under our former detective
agents, covering a period of 83 days (from September 1, 1909),
there were 9 cases, all being professional, with one exception.
They made no arrests, directly or indirectly, in any one of these
cases.
One arrest was made by the police of .St. Louis, Mo.,
after the Association had severed relations with the Pinkertons.
arrested

trying to redeem a watch from pawn
being part of the loot taken by those
who burglarized a bank member at Stronghurst, Ill.
This man
was returned to that place for trial, and later acquitted.
was

was

identified

Under our present detective agents’ contract, covering a
period of 283 days (from November 22, 1909), there have been
17 burglaries and attempted burglaries, 11 of which were pro¬

fessional

and

Fifteen arrests have been

amateur.

made in

during this period by the Burns & Sheridan National
Detective Agency, Inc., who are entitled to the full credit for
10 arrests in 5 cases.
(This includes one rearrest.)
The loeal
police and other officers are entitled to full credit in 3 addi¬
tional cases, with a total of 6 arrests.
So out of a total of
17 cases ,16 arrests have been made in 8 cases, and the prospects
are very good for other arrests.
It has been determined who
the responsible parties are in the above cases with the excep¬
tion of three, and it has so far been impossible to secure any
results in these three cases, for the reason that no one could
identify the parties implicated in those cases.
In the matter of arrests, I wish to state that they were made
in connection with operations against members of this Associa¬
tion.
Formerly the number of arrests included all those made
in connection with investigations made for the various State
Bankers’ Associations, Surety Companies, etc,
While the report
as formerly
submitted was misleading, inasmuch as a large
number of arrests were reported and carried on the records
when, as a matter of fact, they had nothing whatever to do
with this Association, as a number of these arrests were on
account of operations where our members were not interested.
They were carried under the title of “General” ; very few of
8

cases

our

members understood

the

distinction between

the titles of

“Special” and “General.” Our present detective agents, in mak¬
ing their annual report, only report the cases where our mem¬
bers are interested, and do not include private cases that they
have investigated.
For

some

amateur

time

back

the

Protective

where the persons

Committee

did

take

implicated were apt to become
In the past year we have devoted a great deal
of time and expense to investigations of amateur cases.
Of
course this broad view taken by the Protective Committee is
meeting with the approval of our members.
Heretofore the
amateur cases were not investigated by this Association, and
if one was made the expense had to be borne by the bank mem¬
ber interested; this year no member has been called upon to pay
for any investigation of a case they reported to this Depart¬
cases

professional.

us.

discontinued in

predictions have not come true, and it can be readily
seen that predictions of this nature are not only problematical,
and to say the least, dangerous.

man

appointed to report

At the time the former Committee on

These

which

Asso¬

Fiduciary Bonds begs to report that it has taken

detective

The

Bankers’

Fidelity, Burglary and
up the work
and has been seeking information on the three distinct forms
of insurance that have been assigned to it, and the task im¬
posed is a stupendous one.
A majority of this Committee
have previously served on a similar committee of the Associa¬
tion, so that some forms of the question are not entirely new

points that I especially desire to call your

to:

Second.—The

of the American

To the American Bankers’ Association:

First.—-As to the so-called

ance

interests

the

Report of the Fidelity and Burglary Insurance Committee.

case,

two

are

for

I respectfully refer you to the monthly
Journal of the American Bankers’ Association, published with
the Bulletin of the American Institute of Banking.
individual

each

results

1904 the

average

The members of the Association in 1904

were

carrying $145,196,528.00 of Fidelity Bonds and were paying
an annual premium of $434,475.12.
The number of employees
covered by such bonds -was $18,598, and of this number 5,579
bonded

were

under

the

American

Bankers’

Association

copy¬

righted form of bond.
The fidelity insurance companies in 1899 were paying only
about 20 per cent, of their liabilities.
At the time the com¬
mittee was discontinued
the
policy of the companies had
changed and they were paying 60 per cent, of the losses and
contesting the remainder.
In 1899 the Association had a
membership of 3,915 ; in 1904 a membership of 7,500, and to¬
day a membership of 11,500.
The number of banks in the
United States in 1899 was about 12,000, in 1904 about 19,000,
and in 1910 27,000.
We quote these figures or statistics on
banks and membership that you may realize the growth of the
banking interests and of the Association, and that you may
realize how the work of a committee in peeking information
has

also

increased.

OUR
We

find

that

the

surety

FINDINGS.

companies,

about

discontinued had formed
which still exists and holds regular meetings.

former committee was
We

find

that

the

about

the

same

$3.06
We

per

thousand

find that

the

the
an

time

the

association

average rates for Fidelity Insurance are
In 1904, the present average rate being

as against $3.04 per
amount of Fidelity

thousand in 1904.
Bonds carried by the

membership of the Association Is about $292,048,800.00, and
premium paid $895,000.00.
We find that many of the leading companies write the
American Bankers’ Association copyrighted form of bond when
required, and some of them defeat the provisions of the bond
by guaranties made in the form of application required and
signed by officers concerning the applicants for bonds.
We find that there has been a general change in the policy
of management of surety companies, and that they generally
the

pay their losses
We have not

without litigation.

had the time to study the cases that have
litigated so as to determine the merits of each, and be
able to determine as to whether the companies are justifiable
been

in their actions or not.

of rates on Fidelity
shortly after the appointment of this committee
but
there was a reduction of from 50c. to $1.00 per thousand.
We believe the interest taken in Fidelity and Burglary In¬
surance
by the secretaries and committees of the different
State Associations has been the means of keeping down the
advance in rates, and has also encouraged the policy of prompt
payment of losses on the part of surety companies. We can¬
not commend too highly the splendid work of the State Asso¬
ciation along this line.
We find that there had been an Increase

Bonds,

believe

that

considering the ever increasing volume of

BANKING
Fidelity insurance business, and the fact that the bank
ployes
that

the

rates

for

this

to 75 per cent, of the

form

bond

should

not

exceed

present rates or not to exceed $2.00 per

thousand.

have entered into a con¬
whereby they pay to the
agency a percentage of the premiums received from banks that
are
subscribers to their protective agency scheme, and claim
reduction to the banks that have entered into such

organization, yet the committee has failed to find a single
bank that has been benefited by such a membership, and we
wish to commend to the membership of this Association the
Fidelity Insurance Companies which refuse to become parties
of such an organization.
an

reported

that in three States the Banking Commis¬
accept the American Bankers’ Association
copyrighted form of bond.
We have not had an opportunity
sioners

refuse

to learn the cause.
It

has

been

reported to

that the Banking Commissioner
of the State of Missouri has prepared a special form of bond
that is not only objectionable to the surety companies that have
been asked to write it, but to the banks as well, and without
regard to the banking interests of the State, is compelling the
use of this pet scheme through the advantage he has
by virtue
of his office, and compelling the State banks to pay unneces¬
sary and excessive premiums.
In many cases the rates have
us

been doubled.

BURGLARY INSURANCE.
as applied to the banks of the United
subject to all members of this committee.
We
have endeavored to get definite information on this form of in¬
surance, but have not had as complete returns as we would
a

from

tives

new

the banks.

committee

Your
of

investigated the claim made by representa¬
detective agency, that if the Executive Council of

the American Bankers’ Association did not enter into
with

this

contract

the surety companies would cancel their
burglary insurance policies with the country banks.
We made special inquiry of each of the burglary insurance
companies doing business in the United States and they each
emphatically denied the authority of any one to make such
representations on behalf of their companies and the man¬
agement of the detective agency afterwards said that no com¬
pany had given them the authority to make such statements,
nor
had any representatives of the agency the authority to
make
We
ance.

agency

for them.

bined in

but

this connection

bonds to the State for the State deposit
all of the insurance companies have com¬

have

other

course

certainly commend the American Bankers’
“The

surety companies,

but to

submit.

Association for taking up

in
deposits of public funds,
fixed amount; that is to
upon

direction.
In giving bonds to cover
companies will furnish only a bond for a
say, if the balances in the account run from $20,000 to $50,000, we
w’ould have to pay premium on the full $50,000 instead of on the
average balance.
Formerly, policies were written at one-quarter of
the

cent,

the average balance; now we are required to pay onecent, and bonds are written only for fixed amounts.”
“The premium on our deposit bond for the year ending July, 1909,
was
$2.50. When it was time to renew it we found it had been
raised to $5.00.
We feel this unjust, and we would have refused to
one

per

half of

one

per

it but for

pay

contract with the city running for

our

another

year.

forced to pay it or break our own contract.
We reduced the
bond to the lowest possible limit and paid the unjust premium.”
were

The

rates charged by surety companies for Fiduciary Bonds
$2.50 per thousand.
This rate was doubled or Increased
$5.00 per thousand arbitrarily by the surety companies with¬

was

out any

satisfactory

accounted

for

reason or explanation given and can only
the supposition that these companies

through

their organization
or
association have a working
whereby their members are compelled to write at
such rates as are fixed by their executive
committees, and it
is a serious legal question whether or not many of these com¬
panies in such compact are not liable to a forfeiture of their
agreement

would

and

absolutely prohibited from doing busi¬

in several of the States.

ness

The Treasury Department of the United States through its
requirements has unwittingly been the means of helping this
association of companies force others to charge excessive rates
in order to obtain their share of the business.

American

The

Bankers’

Association, the State Associations,
country should all watch and
carefully guard legislation as to all forms of surety companies’
bonds, and see to it that such bonds may be given at the option
of the party, public officer or corporation, and not
mandatory
as was recently attempted in the Illinois
legislature.
Every State Association should instruct its legislative com¬
mittee to carefully watch and consider such measures as are
being prepared and systematically pushed by this association of
and the individual banks of the

surety companies.
CAUTION.
While
sirable

received 4,564 replies to our inquiries on Burglary Insur¬
The amount of such insurance reported is $64,133,565.00.

feel, have been imposing

another

charters

Burglary Insurance

States is

is entirely too high,

this question and trust it may bear fruit.”

We find that two surety companies
tract with a certain detective agency

to make

147

“We think that the rate

em¬

specially desirable risks and should be preferred,

are

SECTION.

surety bojids in many forms
it

and

permitting
should

is proper that

are commendable and de¬
should have State legislation

legalizing their

under

strict

use, yet this form of insurance
supervision by the different States

rate paid is $3.00 per thousand and the rates
from $1.35 to $11.66 per thousand, and the kind of bank
equipment used has practically nothing to do with the rates.
One hundred and thirteen losses by burglary were reported
during the year 1000.
Thirty-nine wTere paid $78,200.14. The
balance, with the exception of six, reported prompt and satis¬
factory settlements of their losses.
The six banks entering

required of life and fire insurance companies doing an
business, and above all the requirement for Indemnity
bonds should be optional and not mandatory, which they will

complaints have not given sufficient information to determine
anything about their cases.
Forty-four hundred and seventy-five banks report that their
policies protect them against daylight holdups.

notice

The

average

vary

different forms of burglary in¬
surance ; that while it
does not seem to be the general policy
of the companies to contest claims, yet the policies are so
drawn that the insured has practically no redress at law should
the policies be contested.
We find that the applications for burglary insurance should
be carefully read before signing, as there are many loop holes,
such as to the time of opening of safes, personal supervision
of officers, etc., and that would void the bonds if contested.
Mr. Thos. B. Faton, general counsel for the Association, at
the request of this committee, has prepared a form of Burglary
Insurance Bond to be .copyrighted for the use of the members
of the Association, together with forms of application blanks.
This subject your committee has not had time to consider,
and before doing so we wish to take it up with the different
Burglary Insurance Companies so as to get a bond that will
be acceptable and protect the insured, and one that will be
We

find that there

written at

are

find

reasonable rate.
that

the

FIDUCIARY BONDS.
We

have

bond.

Five

reports from
hundred

and

1,787 banks concerning this form of
seventy-two report that they give

private bonds amounting to $8,685,500. One thousand two hun¬
and
seventy-five banks
use
surety companies’ bonds
amounting to $49,522,450.00.
Seven hundred and seventy-one
dred

$5.00 per thousand and among the re¬
mainder rates vary from $2.00 to $10.0.Q per thousand.
The following quotations are from letters received pertaining
to fiduciary bonds :
of

this

number

pay

be if not wratched.
We want to

the banks of this

warn

country to not

surety

company mad and needlessly throw to these companies business
and

its

resulting profits that properly belong to banks, as
recently been recommended in connection with
international trade relations with foreign banks.
has

we
our

ACTION OF COMMITTEE.
This Committee has asked legal advice on the

many

Burglary Insurance Companies have an
association, and have their regular meetings the same as do the
bonding companies doing fidelity business.
We

interstate

various forms

insurance, but as a Committee has not met to consider the
legal opinions rendered, so the legal phases have not been in¬
cluded in our report.
We have under consideration a plan that, when put in proper
form, we believe will relieve the banks of the embarrassing
requirements of paying excessive premiums for Fiduciary Bonds,
but do not believe it would be advisable at this time to publish
our plan, as it would give parties interested an
opportunity to
defeat our movement or at least make a desperate effort to
do so.

RECOMMENDATIONS.
We would recommend that these different forms of Insurance

given further careful consideration by this Association.
a
special form of Burglary Insurance Policy be pre¬
pared for the exclusive use of the members.
That the present form of Fidelity Insurance Bond be further
That

considered.
That

special arrangements be made for Fiduciary Bonds.

That the American Bankers’ Association and the State Asso¬
ciations be brought together so as to work in harmony on all
the forms of
That

surety bonds.

the

various plans for pension or retirement funds for
of banks, members of the Association, be considered

employes
and reported upon.
We

would

of every
all

especially recommend that the managing officers
bank, a member of this Association, insist upon it that

communiciatlons from

upon

the officers

committees be placed

their desks, and not left to the discretion of

who does not realize

some

employee

the value of such communications

the

importance to the banking world; that they should be answered
promptly and not consigned to the waste basket without the

148

C.Q

BANKERS’

slightest knowledge on the part of the managing officers that
anything had been received. Owing to the fact that there are
27,000 banks in the United States, all communications must of
necessity be in circular letter form, yet they are of great im¬
portance to each bank when the information is obtained.

CONVENTION
Executive Council caused by the resignation of Mr. J. Fletcher
Farrell, he having removed to Chicago.
The following were unanimously elected as Vice-Presidents
for

their

respective States and Territories to fill vacancies:

This

negligence annually costs the Association thousands of dollars

L. T.

of unnecessary expense.

James P.

Respectfully submitted,
John L.

Caldwell

Hardy,
W. P. Manley,

cil has held two meetings; one immediately following the ad¬
journment of the Chicago Convention and the other was held
at Atlantic City, May 3 and 4, 1910.
The details of these
meetings were published in the Journal of October, 1909, and

May, 1910.
Immediately following the adjournment of convention in Chi
cago the present Executive Council met and organized and
elected the following officers :

Mich.

General Secretary, Fred. E.

Farnsworth, New York City, N. Y.
Treasurer, P. C. Kauffman, 2d Vice-President Fidelity Trust Company,
New York City, N. Y.
General Counsel, Thomas B. Paton, New York City, N. Y.

meeting in Chicago there were present 66 members,
City 65, the total membership of the Council

Atlantic

being 74.
full attendance

bers of

the Council

is conclusive

that the respective mem¬

thoroughly alive to the duties imposed
manifest a keen interest in the affairs
are ever ready to lend their usefulness
for the good of the Association.
At the first meeting of the Council
the recommendation of
the Chicago Convention that our convention for 1910 be held
in Los Angeles was ratified.
A committee of five was authorized to be appointed by the
Chairman to consider the subject matter of the resolution
offered to the convention by Mr. William Ingle, Vice-President
and Cashier Merchants’ National Bank, Baltimore, Md, which
related to surety bonds, and your Chairman therefore appointed
the following committee :
are

upon them, that they
of the Association and

John L. Hamilton, President Hoopeston National Bank, Hoopeston, Ill.,
Chairman.
Geo.

L. Ramsay*

President Union Bank & Trust Co., Helena, Mont.

Q. Chandler, President Kansas National Bank, Wichita, Kansas.
C. E. Batcheller, Cashier First National Bank, Fingal, N. Dak.
F.

Fries,

President Wachovia Loan & Trust Co.,

Winston-Salem,

request of this committee the following gentlemen
added, which action was deemed wise owing to their
connection and valuable experience with the old Committee on
Fidelity Insurance appointed some years ago :
Caldwell Hardy,

President Norfolk National Bank, Norfolk. Va.
Manley, President Security National Bank, Sioux City, Iowa.

The address of the

Comptroller of the Currency made at the
Chicago Convention was published in our Journal and distrib¬
uted to members of this Association as authorized.

following members of the Finance Committee were ap¬
pointed by your Chairman, as authorized by the Executive
Council:

George, President Old Second National Bank, Aurora, Ill.
McNider, President First National Bank, Mason City, la.
D. McK. Lloyd, President People’s Savings Bank, Pittsburgh, Pa.
William
H.

spring meeting of the Executive Council was held at
Marlborough-Blenheim, Atlantic City, May 3 and 4.
The
closest attention was given to business during the two days’
sessions, and a very large amount of business transacted bene¬
The

the

ficial
tees

to the

and

all

welfare of the Association.
its

Sections

held

sessions

The

various

commit¬

the

day preceding
the meeting of the Council; and during the sessions of the
Council each committee, through its Chairman, presented care¬
fully written reports of their respective lines of work.
At the meeting of the Council at Atlantic City, N. J., a
committee of local bankers and hotel representatives extended
to

this Association

in that

Mr.

Charles

invitation to hold

our

1911

convention

city.

Louis, Mo.,

was increased from five
members, Walter E. Frew, Vice-President Corn Ex¬
change Bank, New York City, being added to the committee.
The Chair was authorized to appoint a Committee of five,
composed of members from sub-treasury cities, to confer with
United States Treasury officials in an endeavor to devise a
more
simple method whereby customs and internal revenue
payments can be legally and safely made; to find some more
economical means whereby the banks can be furnished clean
money in place of unclean and mutiliated bills; and to find
a
more economical
method whereby funds can be transferred
from one sub-treasury to another.
The Committee appointed is

was

six

follows

H. Huttig, President Third National Bank, St. Louis, Mo.
George M. Reynolds, President Continental National Bank, Chicago, Ill.
A. B. Hepburn, President Chase National Bank, New
York, N. Y.

Levi L.

Rue, President Philadelphia National Bank, Philadelphia, Pa.

William

A.^ Gaston, President Shawmut National Bank, Boston,

Mass.

reports of the General Secretary, Treasurer, Gen¬
Counsel, Sections and committees were presented and the
necessary action taken accordingly.
All of these reports were
of particular interest to the Executive Council, and in most
cases reference was made to same in our
Journal, as previously

eral

stated.
At its Atlantic City meeting the Council authorized the ap¬
pointment of a Committee of three to make a report at the next
day’s session in connection with the amending of our Constitu¬
tion to cover more specifically the appointment of
standing
committees and committees in general, their methods, limita¬
tions of their term of office, etc.
The Committee so appointed comprised:
Robert

E. James,
Chairman;

Easton

President

Trust

Company,

Easton,

Pa.,

William George,

John

President Old Second National Bank, Aurora, Ill.;
Vice-President and Cashier First National Bank,
Richmond, Va.;
M.

Miller,

Jr.,

and their report was submitted

to the Council at Atlantic City
meeting, duly approved and recommended for adoption at this
meeting.
I would call your attention to the new forms of credit blanks
which have been published in our Journal, and which were pre¬
pared by Mr. James G. Cannon, Chairman of the Committee
Credit Blanks.
on
These new forms were duly approved by
the Executive Council at its meeting at Atlantic City.
The special committees appointed at our May
meeting were
follows

COMMITTEE

John

PRINTED

FORMS

NATIONAL

STATE

BANKS.

Miller, Jr., Vice-President and Cashier First National Bank,

Richmond, Va., Chairman.
Pierre Jay, Vice-President Bank

City,

FOR

Manhattan

Company,

New

York

N. Y.

Fletcher

Farrell,

Vice-President

Fort

Dearborn

National

Bank,

Chicago, Ill.
COMMITTEE

FALSE

STATEMENTS.

Sol.

The

E.J

officers with

Jr., Vice-President
Ltd., Mexico City,

was named for this vacancy.
The Committee on Bills of Lading

the

were

be referred to the executive

The usual

Tacoma, Wash.
Assistant Secretary, Wm. G. Fitzwilson,

Such

the matter

the

Charles

Chairman, William Livingstone, President Dime Savings Bank, Detroit,

the

ried that

Since the last convention of this Association, which was
held in Chicago, September 13 to 17, 1909, the Executive Coun¬

being made to fill the vacancy for ViceRepublic of Mexico, it was moved and car¬

for

Mexico,

Chandler,

Report of Executive Council, by William Livingstone,

nomination

President

power, and, therefore, Mr. K. M. Van Zandt,
and Manager, Mercantile Banking Company,

C. E. Batcheller,

and

Hamilton,

George L. Ramsey,
Col. F. H. Fries,

Chairman.

Peck, Cashier First National Bank, Honolulu, Hawaiian Islands.
Sawyer, President Battery Park Bank, Asheville, N. C.
Fred A. Irish, Cashier First National Bank, N. Dak.

Huttig, President Third National Bank, St.
unanimously elected to fill the vacancy on the

Wexler, Vice-President Whitney-Central
National
New
Bank,
Orleans, La., Chairman.
Buck, President City Bank & Trust Co., Mobile, Ala.
William A. Law, 1st Vice-President First National Bank, Philadel¬
phia, Pa.
A

special

Frederick
William

Charles

tute

II.

Huttig,

President Third National

Bank,

St.

Louis,

Mo.,

and duties of the Finance Committee.
embodied

Banking

consolidation
ciation

appointed, composed of:

the question of framing an amendment covering the

resolution
of

also

was

Curtiss, Cashier First National Bank, Boston, Mass.;
George, President Old Second National Bank, Aurora, Ill.;

to take up
powers

committee

and

the

Section
the

the report of

was

Journal

Bulletin

offered,
of

the

the American Insti¬
which referred to the

American

Bankers’

Institute

Asso¬
Bank¬

ing, which was in the form of a motion by Mr. Ralph C.
Wilson, and the same was adopted.
In part the resolution
called for the subject matter to be referred to the Institute Com¬
mittee in conjunction with the officers of the Association with
power to arrange details, and at a later date the arrangements
were
perfected for this consolidation, the first issue being
under date of July, 1910.

BANKING

was

offered by Mr. Wexler and adopted, which
effect that it was the sense of the

Executive

Council of this Association that a World’s Panama

form

the yellow uniform order bill-of-lading blank upon which the
“Order Bill of Lading” are printed, and not upon the white

upon

resolution

A resolution

was

the

Exposition be held at the most fitting place in 1915 to com¬
memorate the completion of the Panama Canal, and the resolu¬
tion recommended the passage of proper resolutions in favor
of same at this meeting.
The executive officers have held frequent meetings during
the past year in New York City to thoroughly
tion matters with the General Secretary.

consider Associa¬

149

SECTION

words

provided for “Straight Bills of Lading.”
the Order Bill of Lading is

Second.—That

original and not

duplicate.
the Order Bill of Lading is properly endorsed.

Third.—That

Fourth.—That

all

bills

lading,

Order or

Straight,

with draft

accompanying, be forwarded to destination promptly and by the most
direct route.
Fifth.—That Order Bills

of Lading bear the official stamp for the

the bills be filled out
quantity be Stated in writing

Our Association is to be congratulated upon the most excel¬
lent work of its several committees during the past year.
Their

issuing agent in addition to his signature; that

efforts have been continuous and as a whole

successful.

Their

reports will be found to contain a fund of valuable informa¬
tion, full of interest to all of our members, and a careful study
their

reports

fail

cannot

prove

both

interesting

and

profitable.
To the members of our Association we

commend most highly
Secretary and his subordinates during
the past year.
Their efforts have been unceasing, full of
energy, effective in results, and are entitled to great credit.
W. Livingstone,
Chairman, Executive Council.
the efficient work of your

Report of the Committee

Bills of Lading, by Clay H,

Hollister, Chairman.
The

work

American

the

Bankers’

toward

in the method of issuance of bills of lading and the
co-operative activity of their organization with others in urging
effective legislation is now beginning to bear fruit.
Even casual readers of the daily newspapers are now forced
to see references to the subject of bills of lading which formerly
did not cut much of a figure in news columns.

fact

these

that

articles

commerce

have

been under

suspicion, and that their character is shown to be not what
people had supposed it to be—this has been brought about not
alone by the agitation on the part of shippers’ and bankers’
associations, but by serious failures in both North and South
calling attention to many of the weaknesses now surrounding
their issuance.
It is therefore a pleasure to address you with
a report today which does not deal with a dead issue, but one
in which you have a daily interest.
We ask you to consider carefully all phases of this report,
and then take such action upon it as the need of the hour
to

seems

warrant.

refresh

your

minds, let us recall to your attention the

meeting of last year at Chicago, where a joint conference was
held, attended by bankers, representatives of carriers, shippers’
and receivers’ associations, mercantile organizations and other
interested parties.
This conference took place at the Auditorium Hotel on Mon¬
day, September 13, and was attended by sixty-nine representa¬
tives of the different interests.

all the various matters connected with
lading, practices concerning them and State
and National legislation governing these documents were ex¬
haustively discussed from the different standpoints, and the
conference adopted, as a result of its deliberations, five resolu¬
tions, which were as follows :
At

conference

this

of bills

forms

UNIFORM

BILLS

LADING

ACT.

Resolved, That it is the sense of this conference that the

Uniform

Act, approved and recommended for adoption by the
on Uniform
State Laws at their annual conference,

of Lading

Bills

Commissioners
held

Detroit, Mich., in August, 1909, should be enacted in every
of the Union, and that the representatives here

and Territory

State

present recommend to their respective associations or organizations the
taking of such measures as will aid toward the passage of this law
in

the

various

States

and

Territories.

CONGRESSIONAL BILLS OF LADING ACT.

Resolved, That it is the sense of this conference that

Congress be

bills of lading covering interstate
shipments, to embody the features contained in the “Bill Relating to
Bills of Lading,” which was pending before the House Committee on
Interstate and Foreign Commerce and made the subject of four hear¬
ings before a sub-committee last winter, and that we recommend to
our
respective associations or oganizations the taking of such steps
to

asked

pass

aid in

will

DUTY

the

law

governing

enactment of such measure by Congress.

INITIAL

BANK

BILL

OF LADING.

Resolved, That the conference recognizes the duty of

the bank first

of lading for a shipment to order with
drafts attached to see that the bill of lading is properly drawn on
the Uniform Order blank—not the Straight bill-of-lading blank; that
accepting

it is

railroad’s bill

original and not as a duplicate; that it is properly endorsed,
lading Is promptly forwarded to its destination.

and that the bill of

REQUIREMENTS TO BE OBSERVED BY INITIAL BANKS
HANDLING BILLS OF LADING.

Resolved, That the banks at the point of shipment be
insist

upon

requested to

the observance of the following requirements as a pre¬

requisite to their handling and financing of bills of lading:
First.—That all bills of lading for all shipments to order be drawn

indelible pencil, and that the

well

in numerals.
CHANGE IN FORM OF BILL OF LADING.

for this conference at the present
resolutions looking to a change of language in
the form of the uniform bill of lading, and that all resolutions and
communications offered or received for that purpose be referred to a
Resolved,

time

That it is impolitic

adopt

any

joint committee for further consideration.
The proceedings
of this conference were published in a
pamphlet of sixty-four pages.
Since then your Committee has been very active owing to
the fact that the meeting of Congress last winter opened an
opportunity for national legislation which has all the time
seemed most desirable.

7 the bill of lading measure drafted by our
Counsel, and reviewed by him in certain particulars
from the bill as prepared a year previous, was introduced
in the House of Representatives by Congressman Stevens, and
on January 10 in the Senate by Senator Crane.
On February
7 the House Committee on Interstate and Foreign Commerce
Your commit¬
gave an all-day hearing upon the Stevens Bill.
tee was represented by its Chairman and by Mr. Paton, its
counsel, and representatives of the New York Cotton Exchange
and of other trade organizations were present in support of
the measure.
Five counsels, representing different railroads,
spoke against the bill, and the sessions extended throughout
the entire day and lasted until 6 :45 p. m.
The House Committee took the bill under advisement and,
On

Association

reform

The

in ink

January

General

amending it in certain particulars, decided on May 3,
only two members objecting, to report the bill favorably.
On
June 7 the bill was reported to the House and passed by that
It then went to the
body by an almost unanimous vote.
Senate Committee on Interstate Commerce, who gave three
hearings to the measure on June 16, 20 and 21, but being on
the eve of the adjournment of Congress, there was insufficient
time and opportunity for the members of the Senate Committee
to give the thorough consideration which they desired to the
measure, and their report was therefore postponed until the
next session.
The session which opens in December next is
of the same—sixty-first—Congress, so that the bill will not have
to be again passed by the House unless amended by the Sen¬
ate, and your Committee has hopes for a favorable outcome
before the close of the present Congress.
The individual letters from bankers all over the country were
very effective in emphasizing the need of legislation to your
Congressmen.
In the few State legislatures where sessions were held, your
committee, through its counsel, has urged the enactment of the
Uniform Bills of Lading Act, and it has been passed in Mary¬
land.
This is the first State to adopt the uniform act, as it
was only perfected last year.

after

•

Next
of State

year

hope for greater results, as a large number

legislatures will meet in 1911.

has come forward with a remedial act
further than we have hitherto asked.
At a
special session of the Texas Legislature held this summer a law
has been passed making it the duty of carriers to issue bills
of lading, validated or certified as provided by the Railroad
Commission, and this law surrounds the document with all the
safeguards necessary to the protection of the commercial pur¬
chaser.
Section 6 of the Texas law provides that “each and
every bill of lading issued by the authorized agent of any
carrier or receiver thereof, affected by the provisions of this
act, shall be deemed and held to be the act and deed of such
carrier or receiver thereof, and the principal shall be liable
thereon in accordance with the terms thereof.
When any
such bill of lading shall be validated, authenticated or certified
in accordance with the rules and regulations herein provided
for, and as may be prescribed by the Railroad Commission In
accordance with the provisions of this act, and in the hands
of an innocent holder for value, it shall be incontestable as to
the matters and things therein set forth.”
This Texas legislation has been prompted by the immediate
need of dealing with the export cotton shipments this fall.
It has so happened that the spring of 1910 brought to a head
some huge frauds perpetrated by malicious shippers who, know¬
ing the present weaknesses of the situation, deliberately set
out to take advantage of the railroads, banks and purchasing
customers.
Knight, Yancy & Company, and Steele, Miller &
Company with cotton, and Durant & Elmore Company with
grain shipments, deliberately issued fraudulent bills of lading
with and without the assistance of local freight agents, or
Meanwhile

which goes

Texas

even

150

BANKERS’

CONVENTION.

made fraudulent use of
bills, in some cases getting bills signed
in blank by agents which were later
filled in by shippers them¬
selves and used for value at banks when no such
freight had
in reality been received
by the railroads ; and in some of the
grain cases, using genuine bills as collateral after,the
grain
had been delivered without the
taking up of such bills.
These
frauds, by means of forged and untrue and spent bills, will
total upwards of $5,000,000.

course,
to

arouse

immediate

one

effect

these

frauds

was

action

foreign bankers and cotton buyers who had
losers thereby, and this took definite form
in a meeting held July 21, when
representatives of sixteen of
the leading English and Continental banks
passed and cabled
to the American banks the following resolution:
been

tremendous

“That the banks

comprised in this Committee agree that in case of
banks against bills of lading for cotton negotiated
buyers in America, the banks will decline from

drafts drawn upon

through

exchange

October 31st onward

accept against the bills of lading relating to
of the bills of lading, both as to
signature and as to possession of the cotton by the carriers up to the
time of issue, be guaranteed by such
exchange buyers to the satisfac¬
such

drafts unless

tion

the

the genuineness

banks

concerned.”

In anticipation of some such action on the
part of the
foreign interests we had added to our numbers Mr. Walter E.
Frew, Vice-President of the Corn Exchange Bank of New York,

and

now

mittee

requested him to act

which

should

give

the chairman of

immediate

emergency and devise some method of
with the equal
responsibility of so

attention

sub-com¬

this

latest

preventing fraud, coupled

dignifying and improving the

Order Bill of

Lading

as to make it of real value

in its

use

could

held

a meeting and considered various
plans and decided that in their
opinion the best policy would be to confer with the railroad officials.

But

realizing that very little could be accomplished unless we had
plan to present to these gentlemen we considered the subject
carefully and adopted the certificate which is attached to this report
some

and

marked

Exhibit

the

railroad

officials

sub-committee

were

render.

marked
of

Second.—They must
carriers

issue

such bills.

at the same time obtain the consent of
and their earnest co-operation in
issuing

The result of the labors

of the sub-committee is incorporated
report made by Mr. Frew to this Committee
which we take pleasure in
presenting to you herewith. As you
will note, the emphasis so far has been laid
upon export through
in

admirable

cotton

shipments.
They alone involve perhaps $400,000,000
annually. There is no reason, in our opinion, why this action
need

stop

confined

with

them

the

nor

class

one

issuance

shipments.

validated

fact,

bills

may

desirable to your Committee to consider this
phase of
situation and its application through remedial
legislation.
believe that the railroads are
showing an excellent

seem

the
We

spirit

co-operation with us, and that
to

get

such

executives
We

concessions
realize

now

from

conference

with

invitation

our

further decided that

was

meet

with

special committee

the

representatives of all the
of considering this certificate

Having

secured

stated

the

railroads

form
the

marked Exhibit

adoption

this

important

document your Committee then deemed it advisable to
notify the com¬
mittee of the foreign bankers.
In order to explain to them the
details

the

secretary,

validation

system

cabled

Mr.

Simpson, their

follows:

“July 26, 1910.
of

with railroad

American

officials for

Bankers’

Association

time to

some

has

been conferring
safeguards in issuance

secure

lading.

They have succeeded in obtaining a form of valida¬
an agreement to a uniform
system as to issuance
of these validation certificates, which in our
opinion gives to the bill
of lading all the security that can
reasonbly be required, including
protection against forgeries.
Tn order to present this matter to your
bankers for their consideration, would It be
agreeable to you to send
tion

certificate

here

mediate
To

and

committee representing
action is requested.”

this

received

the

your

banks with power to act?

Im¬

following reply:

“July 29, 1910.
“Referring to Mr. Frew’s cablegram received the 27th, please inform
him committee of European bankers
regret they are unable to visit
New York, but they would welcome in London after
September 4th a
deputation from members of Mr. Frew’s committee.”
To

this

replied

follows:

“July 29, 1910.
“Think

essential

deputations of bankers
important meeting be held here and request

To this they replied as

should
your

meet,

but think

reconsideration.”

follows:

are

States, likewise, do what you can to urge the
passage of the Uniform Bill of Lading Act whenever the matter
is before your Legislature.
To sum up, we report our
accomplishment as follows :
your

“July 29, 1910.
being most central to all concerned, In¬
cluding continent of Europe.
Sorry cannot reconsider, my committee
having dispersed for holidays.”
“London

To this

advocated

by this Association, known

Bill.
2. The enactment by

the State of Maryland of the Uniform
Lading Act, and by the State of Texas at a recent spe¬

cial session of

To this

Southeastern and Southwestern cotton¬
a
validation system for through order
notify export cotton bills of lading.
We

add

now

the

of the sub committee, which brings
us down to the time of the
printing of this report.
If there
are
further developments before October 4,
they will also be
brought to your attention.
report

Clay H. Hollister, Chairman.
F. O. Wetmore.
J. A. Lewis.

Wm.

Walter E.

Bill

would
At

American
your

Bankers’

SUB COMMITTEE.

meeting

held

were

date

any

after

representation

convenient to
about

ready

all

loth

August,

this

to send

but

bankers

Europtan

and

side.”

committee to London

practically decided

upon the personnel of if. when the banks
buyers of cottou bills received a letter from their various

correspondents
banks

drafts drawn

confirming

concerned,

comprised

resolution

which

cabled

was

case

follows:

this

committee

agree

that

banks against bills of lading for cotton negotiated
through exchange buyers in America the banks will decline from 31st
October

upon

onwards

bills

unless the genuineness of bills of

of lading relating to such
lading, both as to signature

drafts
and

possession of the cottop by the carrier at the time of
issue, be
guaranteed by such exchange buyers to the satisfaction of the bank
concerned.”
Your

Committee, after careful consideration, decided it

to send

mittee

are

1910.

Association.

communication

appoint

the various banks

our

of June 2, 1910, in which you
sub-committee of our Bill of Lading Com¬
mittee to endeavor to devise some
system by which the bill of lading

authorize

time

can

fuller

secure

distinctly

were

English

meeting

will

this

and had

"In

Frew.

HOLLISTER, Chairman,
of Lading Committee,

Referring to

could

deputation to London, and therefore wired

the

was

useless

foreign

com¬

follows:

“August 2,

Wing.

September 17,
H.

request

your

they replied:

September

send

with

Ingle.

Daniel G.

REl'ORT

comply

essential

“The

adoption by
carrying railroads of

“July 30, 1910.
“If

good bill of lading law.

3. The

replied:

able

which

Bills of

earlier?”

Congress of the bill

of lading
the Stevens

selected

was

“July 30, 1910.
“If

own

The passage of one House of

measure

CLAY

hold

response

shall be able at an early date
them as their own far-seeing

We have not hesitated, as you well
know, to call upon the
Association membership for assistance by letters, circulars and
telegrams.
We ask you to continue to favor us in the same
way whenever you are called upon, for this is a work for the
whole Association, and not for a favored few.

should

covering its issuance

for the best interests of all concerned.

are

cotton-carrying railroads for the purpose
and arranging for the details
covering the issuance thereof. At this
meeting this form of certificate was adopted with the recommendations

striving still to make the railroads responsible for
the acts of their agents, and in so
doing we shall show every
disposition to co-operate in keeping those agents honest by
removing the temptation and ability to go wrong.

Exhibit B.

Committee

our

of bills of

plan of validating the bills which
would suit themselves and the
foreign bankers.
the

decided

was

this meeting was attended in addition to our
Committee by several
prominent railroad officials. At this conference Exhibit A was
carefully
considered and declined by the railroad officials
present.
After some
discussion it was finally agreed that the gentlemen
present would accept
the form of validation or signature certificate herewith
attached and

“Committee

First.—They must devise

July 12th, and in

appreciate, therefore, the two difficult services this

can

safeguarded against forgeries;

and in which letter you give
authority to handle the matter in any way in which I
saw fit.
Following out these instructions, I appointed as my associates
Mr. F. I. Kent, Vice-President of the Bankers’ Trust
Company; Mr.
J. T. Talbert, Vice-President of the National
City Bank; Mr. W. H.
Porter, President of the Chemical National Bank, and Mr. G. G.
Thorne, Vice-President of the National Park Bank.
This Committee

collateral with banks.
You

the proper

view of

the resolution conveyed

exchange buying bankers,
a
deputation to Loudon,
unacceptable.

mittee

and

others

The
must

our

your

letter

1910.

July 23d to

Committee deem it unnecessary to
the terms of that resolution

because

responsible
decline

bankers

represented

our

Com¬

give guarantees requested.”
Believing that our position should be clearly explained to the
foreign
bankers, we wrote them on August 9th and explained our situation
as clearly as we were able to do
so, which you will find attached to
this report and marked Exhibit D.
Nothing further was heard from
the foreign committee, excepting an
acknowledgment of the receipt
of our letter, and stating it would be
considered at their meeting

BANKING

September 7th.

September 2d, which was afterwards adjourned to
This meeting was held and no further word was received by
Committee until September 14th, when the following cablegram

Bill

WILLIAM

cotton

“Re

communicating w’lh the banks of New Orleans,
buyers of cotton bills,
feeling of these banks
giving a guarantee and we accordingly wired the English

after

proposition

Philadelphia, Chicago and New York, who are
and we ascertained that the almost universal
against

was

committee

follows:

“September 15, 1910.

cannot but feel that it was
reached through misapprehension. We have accomplished much in
securing the validation certificate, thus placing the business on a safe
basis.
Further consideration of bankers’ guarantee is absolutely out
of the question, being incompatible with correct banking principles.
This is final.
Situation could not be changed by our Committee going
deeply regret your decision and

“We

but,

London,

Lading.

Washington, D. C.

received:
scheme

course,

in
obtainable, and where
We are confident this

would welcome your deputation

where all data and information are
railway and cotton people also could be heard.
would lead to a better understanding with
mutually

New York,

stating

them acknowledgment of our cable and

from

considered next Thursday.
Texas Legislature has passed a bill, which has

provide

either inked or

tickets,

The

law,

This

understand

should
Lading.
Certifi¬

hands, and
they are used;
non-negotiable copy
of the Bill of Lading, should be forwarded by the agent ,to the
auditor, whose control over the Issue and use of such certificates
should be of the same character and as complete as that exercised
in connection with passenger tickets.
The Railroad Bill of Lading
should have also on its face reference to the number of the Validation
register the Certificates when and as placed in agent’s
regularly to audit them and require reports thereof as
the duplicate on the day of issue, together with a
to

Certificate issued in

connection with it.

thus validated, to be then guaranteed
sible surety companies by a stamp in the following (or
proved) form:
of Lading,

Bills

Fidelity Company hereby

National

American

The

Louisville & Nashville

the

portation the

by respon¬
other ap¬

guarantees

Railway has received for trans¬

merchandise described In the
AMERICAN NATIONAL

THE

become a law,
right to prescribe rules
lading by the railroads.
it, practically adopts the validation

If the former, the seal

perforated.

impressed partly on the Certificate and partly on the Bill of
If a perforator is used the perforation should go through the
cate and the Bill of lading with one and the same stroke or punch.
The auditor’s office of the railroad company should be required
be

it would be

giving the Railroad Commission of Texas the
and regulations for the validation of bills of

prepared in book form, with

certificates should be

should be
water-marks

that

received

NOTE.—These

GUTHRIE,

General Freight Agent.

original, duplicate and stub, and numbered serially. They
prepared by each company on paper bearing its own
or
color-tine protective devices. The original and duplicate to be attached
respectively to the Bills of Lading described above in such a manner
that any tampering or other irregularity in use would become im¬
mediately aparpent.
The best method to do this would be to
the agent with an official seal, or stamp, such as Is used on passenger

satisfactory

results.”

certificate accompanied by said

of this validation

return

upon

your
was

ladings.
After full consideration of your validation
sub-committee and full committee of European Bankers’
conference, the conference itself today decided they cannot regard
railway validation scheme as affording the protection desired by the
accepting banks.
Accordingly, and failing production of any other
guarantee, the conference confirmed and adopted the committee’s
resolution of July 20th already conveyed to you.
But the conference
is still prepared, through their committee, to meet a deputation of
We regret this reply has been unavoid¬
your association in London.
ably delayed.’’
Your committee met September 15th and carefully considered the

151

SECTION.

within Bill of Lading.

FIDELITY COMPANY.

By.

Agent.

(Seal)
.......1910.

agreed to by your Committee and the railroad
consider this is a very strong step in the right direc¬

scheme which had been

and we

officials,

and we have been assured by some prominent railroad officials
with roads operating in Texas that this measure Is satis¬

tion,

connected

You will find attached to this report a

them.

factory

the

regarding foreign bills covering grain and other commodities, as well
as the domestic
situation.
We feel assured that we have procured from the railroads all they

If further concessions are made by
them this Committee would welcome them.
I also append to this report copy of a resolution passed by the
Chamber of Commerce of the State of New York, marked Exhibit F.
Also a resolution passed by the Bill of Lading Committee composed
of the following commercial organizations, marked Exhibit G:
willing to give at this time.

Industrial Traffic

The

Boston

Chamber of Commerce,
& Shippers’

Receivers’
York

National

Association,

The Chairman desires to state

request

(Date)
EXHIBIT C.

Report of

Committee of Railroad officials and Bankers regarding tha
Notify Bills of Lading for Export Cot¬

adopted at a meeting of lines

that he is about to start on a vaca¬

that Mr. William A.
Bank, has kindly consented, at
of all members of the Committee, to act as Chairman
much pleased to be able to state

during his absence.

Resepctfully submitted,
WALTER

held

within

one

VALIDATION

following form and the following
.issuance of such

CERTIFICATE

uniform regulations In respect to

Chairman.

Bill of

Lading Signature Certificate

NASHVILLE

Agents of this Company.

COMPANY

Lading in accordance with the regulations
the signature on the attached order notify

covering

dated...
of

Issue

Agent
Bills

Date

his signature.

marked.....

recommend that certificates be

MASON

the

regularly

appointed Freight

sign
Com¬

evidencing the receipt of merchandise for shipment, and
signature on the attached Bill of Lading, No
dated Atlanta, Georgia. September 23, 1910, covering 100 Bales of
Cotton marked N. C. B., N. Y., constitutes a valid obligation of
this Company
for the transportation of said merchandise, the
receipt of which by the above-named agent, on behalf of the
Railroad
Company, is hereby acknowledged.
This Company
further agrees and hinds Itself that no part of the merchandise
described in the attached Bill of Lading will be delivered except
pany,
that

his

(Date)

Georgia, and as such is authorized to
In accordance with the regulations of this

Atlanta,

of Lading

sign Bills of

of this Company, and that
bill of lading No
Bales of Cot-

hereby

certifies that:
JONATHAN

certifies:

and as such is authorized to

Agent at

RAILROAD

Export Cotton

Railroad Company hereby
is Its regularly appointed

The

ton

LOUISVILLE

the

Bills of Lading.

(To be attached to Order Notify Bills of Lading for
Issued by Agents of this Company.)

Place
The

certificate to be
cotton and the
certificate in the

„

FREW,

Bills of Lading issued by

To be attached to

River,

week.

appointed to consider the form of
attached to order notify bills of lading for export
method of their use, recommends the adoption of the

That

EXHIBIT

east of the Mississippi

Your Committee

Nash, President of the Corn Exchange
the

is his signature.

marked

Poultry Association,
New York Cotton Exchange.
National

tion and is very

Date

of Issue

Place
ton

Spriugs, West Virginia, Tuesday, July 19th,
1910, and tentatively accepted by all lines west of the Mississippi
River represented at the above meeting.
It being understood that
the agreement will be adopted by all western lines at a meeting to

Association of Cincinnati,

Grocers’

Railroad Company hereby certifies:
is its regularly appointed
Agent at
and as such is authorized to sign Bills of
Lading in accordance wilh the regulations of this Company, and that
the signature on the attached order notify bill of lading No
Bales of Cotdated
covering
That

ton,

Mercantile Exchange,

Wholesale

Certificate No

The

held at White Sulphur

California Fruit Growers’ Exchange,
New

of Lading Signature

Lading for Export Cotton

of this Company.)

validation of Through Order

League,

Chicago Association of Commerce,
The

Order Notify Bills of

Issued by Agents
Bill

meeting of the Bill of Lading Committee held August 3d, 1910, that
we be empowered at our discretion
to continue further negotiations

are

(To be attached to

certified

of this law, marked Exhibit E.
Our committee are mindful of the instructions given to us at

copy

EXHIBIT

handled in the following manner,

wit:

That they

be issued in book form,

with original, duplicate and stub
be prepared by each com¬

numbered consecutively, and that they

and

pany

devices.

paper bearing its own water-marks or color-tint
It is suggested that a uniform size of four (4)

protective
inches ia

(6) inches In length be used. The certifying represen¬
tative will attach the certificate to the bill of lading with mucilage

width and six

paste or an Irremovable metal fastener.
certificates will be Issued to the agents in the same manner

The
as

passage

tickets and the same check shall be made of these docu¬
hards as of passage tickets.

ments In agents’

152

BANKERS’

CONVENTION.

On the

date of issue the agent will
forward to the accounting de¬
partment the duplicate
certificate, with a nou-negotiable copy of the
bill of lading.
The bill of lading, in addition to its
own number,
shall bear the number of
the Bill of Lading
Signature Certificate,

which is issued in connection
with it.
The agent affixing the
signature certificate to the bill of lading
shall, in addition to signing and
dating the same and keeping a record
of the number, the date and
the quantity of cotton called for
by said
bill of lading and
certificate, stamp the same partly on the certificate
in such manner that
tampering or irregularity would be aparent.
Spoiled certificates shall be
immediately cancelled and returned to
the auditor, with
report.
It

further recommended

issued upon the

Agents

are

that

through export bills of lading be

following conditions:

instructed not

sign bills of lading until the

companies

that

have

executed

the

usual

bonds with the

contract

and

railway company, but not otherwise.
Bills of lading will be issued
only by agents or other representa¬
tives of the company who are
duly authorized to do so.
Only

original bill of lading shall be issued for each
shipment.
The practice of issuing
duplicate and triplicate bills of lading will
one

discontinued, but as
issued, provided they
The

number

many
are

copies

are

reasonably required
endorsed “Copy, not
negotiable.”

bales of cotton and
pen and ink in the original bill of

the

marks

lading and

writer or any other matter.
There shall be no additions, erasures
Bills of lading will be issued in

No. 1

each

All

copies
original.

issuing station
bills

may

shall be written

not inserted with

type¬

changes in bills of lading.
numbers, beginning with

serial

the 1st of

lading shall bear

September

the

same

of each year.

number

the

of each bill of lading will be
forwarded on the date issued
to the agent of the water
carrier at the port of
export, in the case of
direct shipments, or at the
port of trans-shipment, in the
case of
indirect shipments.
The shipper is required to
accept the conditions of the bill of
lading
by attaching his signature or the
signature of his authorized repre¬
sentative to the original and
agent’s copy.

EXHIBIT I).

NEW YORK, August 9th,

1910.

SIMPSON, Esq.,
Secretary to the Committee,
c/o Bank of Liverpool, Ltd.,
Liverpool, England.

Dear Sir:

Referring to

Committee

numerous

has held

conferences with different bodies of
railroad men, shippers,
exchange men, bankers and legislators. It has
succeeded in having a
uniform bill of lading
accepted by the majority of the railroads in
the United States.

was

not

desired,

possible
a bill

to
was

obtain

in the form all the
protection
drawn up and introduced in the
House

Representatives by Congressman Stevens.

It passed the House of
but not until some changes had
been made in the bill,
which weakened it.
Prom the House it went to the
Senate Committee
having such matters in charge, but did not reach
this committee until
some ten days before
Congress was expecting to adjourn. The rules
of the Senate require a
unanimous report by every Senate
Committee
on every bill referred
to them during the last ten
days of the session,
in order to have it
go to a vote in the Senate.
It was, therefore,
necessary for a full Senate Committee of
twelve to agree to the
Stevens bill in order to have it
reported back before the closing of
the last session in June.

Representatives,

the

hearing before the Senate Committee it
developed that
matters had been stricken from the
bill as originally drawn
before it passed the House, which
were really
necessary in order to
make the bill thoroughly effective.
These matters could not be intro¬
duced in the Senate bill and
passed without a conference with the
House Committee and a
reconsideration by the House with the amend¬
ments desired.
At this time there were
only three days left before
the closing of
Congress, and it was, of course, impossible to
have the
bill corrected and
reported, particularly as one member of the
Senate
Committee was opposed to
letting the bill go through, and his opposi¬
tion was sufficient under the
rules mentioned above to
prevent the bill
from being reported back
to the Senate.
Congress meets again in
December as a continuation of the
same session, and the
Stevens bill
will then be
reconsidered.
certain

the meantime the cotton
crop

Bankers’
sort

some

Association,

with

agreement

instructions

from

give proper integrity to bills of lading.

the

A meeting was

Committee, at which the presidents of several of
cotton-carrying railroads were invited to appear. The situation
discussed, and it was finally agreed that a sub-committee of
special

committee

should

cotton-carrying railroads
of

purpose

with

mittee

drawing

detail

representatives

White Sulphur Springs,
form

validation.

was

Committee, with instructions

necessary

form

to be issued and

was

meeting for consideration
form

the

validation

sub-committee

draw

approval.

com¬

called

and

the

representative

the

general

The committee drew up the
enclose herewith.
It was

each

railroad

would bind his railroad to

adopt the system

agreed

all

River.

practically

the

was

roads

not.

east

the same

manner

The matter

the

to have

proper that it

should be

had

he
was

Mississippi

roads expected

that it

was

whether

certain that such roads would also

validation, yet as the Western
following week, he felt It only

to them in

stated

representative of the roads west of the
Mississippi

stated that while he

men

in such
and regulations under
up

applied, to be submitted to

and

the

Va., for the

The

the
was

all

and regulations,
copy of which we
presented at the general meeting, a list of the railroads

then

the

representatives of fifty-four railroads.
A special
appointed at this meeting, consisting of five railroad

bankers’

which it

with

the

was

the

meet

railroads

this

River

agree

meeting

presented

before the meeting at
White Sulphur Springs.
Later the meeting of the Western railroads
was held, but as a number of
the representatives were not authorized
to bind their roads the matter
was left with
come

the

each road should send its vote

principal roads

the

by letter.

understanding that

We know that

Mississippi have already voted

some

This

work

cabled

from

was

completed

their resolution

the

two

demand

days
a

exchange buying banks of America.

plaining the validation system in detail
you

invitation

before

guarantee

the
of

English

the

With

bills
the

of the

adopt the

system.

bankers
of

lading

idea of

to your committee

ex¬

cabled

meet

with the New York bankers in this
city.
this would be inconvenient for
you, but that
you would prefer to have the New York
Committee go to London, we
at first thought that it
might be possible for us to do so, and with
the desire of acceding to
your wishes we took the matter under con¬
sideration, and even went so far as to decide upon the members of
such a committee, provided
it ultimately seemed best to send one
abroad.
We were thoroughly
convinced, however, that it would be
far better to have a
meeting in New York, for reasons which will be
explained later.
While the subject was under discussion we
received
by mail a copy of your resolution and demand.
This called to

Upon receiving word that

would be of
our recent

make advances against
bills of lading.
About three years and a half
ago the American Bankers' Associa¬
tion appointed a Bill of
Lading Committee, which was instructed to
study the question of bills of lading with the
idea of recommending
new forms and new
legislation, or both, for the better protection of
all concerned, provided it
seemed necessary.
This

which would

held

American

obtain

our

upon to

the
to

attention

exchange of cablegrams, we wish
to make our position
clear, and in order to do so will give
you a brief
history of the various moves which have been made
by bankers in this
country for the purpose of giving better
protection to those called

which

endeavor

the

A copy

JAMES

mittee

and

lading may be issued on
loading certificates certifying that cotton is loaded
in cars designated
by initials and numbers; issued by duly authorized
agents of compress
warehouse

thought that all concerned should have some better pro¬
lading than they have had in the past.
Therefore, a special committee, represented by the gentlemen
sign¬
ing this letter, was appointed by the
regular Bill of Lading Com¬
tection under bills of

met

cotton is in possession of the
railway company.
It being understood that cotton
bills of

ican bankers

had to be moved, and the
Amer¬

adopted

particularly than ever that a meeting in England
real value, for such a resolution
could not have been

had

been

you

possession of

all

the

facts

financing of cotton in this country.

concerning the

We felt that it would be impos¬
sible to present such matters
properly unless we could do so in New
York, where experts in the several lines involved could
acquaint you
with the important facts
necessary to an understanding between our
committees.
Your committee having acted without
waiting for the
results of the work of the American
Committee really took your stand
somewhat in the dark,. and without
regard to any opinion as to the
justice or advisability as to the resolution
adopted by your com¬
mittee.
We think that your action should be
reconsidered, based upon
the new condition.
These conditions can best be
explained to your
committee in New York, as full
knowledge of the detail under which
cotton has and will be handled
by all who come in contact with it In
any way whatsoever in the States must be
known and
sidered

before

understood

the

and

effectiveness of

before

carefully

the

validation

certificate

the

unreasonableness of demanding
of the integrity of the bills of
lading can be explained.
You

are

has made
out

con-,

can

guaranty

probably aware that the looseness in
financing cotton, which
possible the recent heavy losses, has almost
entirely grown

the

carelessness

with which foreign buyers
of cotton have
this side to draw under their
credits.
The foreign
buyers, in their desire to obtain cotton
cheaply, have made purchases
from concerns who were
willing to sell them at low rates because
authorized firms

they had nothing to lose, having no
capital, and everything to gain
the market happen to
go their way.
Upon acceptance of the
rates of such sellers
foreign buyers have cabled the American seller
authorizing him to draw upon, we will say, certain
prime European
should

banks
are

side

all
of

bankers.

made

the

The bills which have

this

water

manner.

have

offered in the market.

The

absolutely

come

upon our cotton market

exchange buying banks
no

control

over

what

bills

this
are

Our representatives have
actually seen cable¬
grams from reputable houses in
England which have been received
by
sellers of cotton on this
side, authorizing them to draw
upon prime
English banks with bills of lading for certain
numbers of bales of
cotton attached.
Our exchange
buyers, requiring the exchange In
order to meet the demands of their
importers, have been obliged to
to take what was on the
market or turn down thousands
of bills of
exchange for hundreds of thousands of
pounds sterling, which they
knew represented bona fide
transactions where the risk, as far
as
they were concerned, lay entirely in the
honesty of the exchange
seller in shipping the cotton as
directed and authorized by the
foreign
purchaser.
In order to protect
themselves as far as possible under

BANKING
these conditions the lives and habits of the
side

have

which

been

and

studied

would accept

have

selling cotton

men

arranged

the

from each while the bills

were

this

lines

credit

“

SECTION.
in

it is sent and assuring you that we shall be pleased to hear

which

from you

in reply

meet your committee in New York,
Very truly yours,

the water

accordingly.

WALTER

For instance,
dred bales
and

from one seller we might be willing to have
the water

another five

time, another seller

one

ten thousands or

accepted by the English bankers

more.

the bills

one

buyer

seller.

and

American
interest

and that the transaction is

houses

credits

bona fide

one

the foreign buyers make purchases from
small standing, because they consider it to their

of
so,

authorize

and

such

concerns

draw

under

accompany the

chain

the

only

between

draft.

the

The exchange buyer is only

domestic

seller

and

the

foreign

link i:i

one

buyer.

Ills
nominal, fractional per cent, commission, which is not only
questionable insurance when ordinary risks are taken, but which

profit is

inducement

to American exchange buyers to increase or ex¬
particularly when by so doing they would be en¬
couraging the adoption of a principle which all must recognize who
no

those

risks,

analyze the matter at all
be

must

that buyers

assumed

contrary to

by the bankers,

and sellers

and justice.

reason

acting in good faith.

are

has

responsibility.

assumed,

Where they do not

A buyer has the

means

protecting

forgeries and other frauds by limiting his transactions
to persons of known or ascertainable responsibility.
Where he chooses
the sake of
rascal

risk

effecting

the banker

who

the

buyer,

saving in the cost of

commodity to deal
a person of unknown responsibility, he takes thereby
has a perfect right to take for himself, and which

which

may
case

be concerned has
of

loss

American bankers

that

has

right

under commercial

this

lading

to the enclosed

now

will

you

which

credits opened for American

protection

the

blank

observe that it throws

railroad

and

companies

handling passenger tickels.

form

the

even

afford

The

around

safeguards

proposed valida¬

efficient
in

the

certificate

the bills

than

matter

certifies

authority of the first agent to sign the bill of lading
and the genuineness of his signature.
The question of the delivery
of the goods was carried as far as it is j>racticable to
carry it, first

by bonding the agent and putting him under instructions
until the goods have been delivered

to the carrier,

sign

and second by

requiring the bill of lading and validation certificate each to give the
particulars as to car initials and numbers.
This validation will be
an

effectual

the
of

safeguard against

slightest chance for

forgery.

Under it

irresponsible

there

to put

person

will be
a

not

an¬

their intention hereafter to stand back of their genuine bills of

lading, whether they have received the goods
instances privately declared their intention to
lieve that there will

ever

validated

the

its

bill

arise

not,

where

case

have

so.

in several
do

not

be¬

railroad, after having

described, would make an effort to
responsibility by claiming the goods had not been received.
However, if any buyer who has been inveigled into dealing with a
person of unknown responsibility in order to get the advantage of
lower prices wishes to protect himself against the remote
possibility
manner

shift the

that

the

genuine

Lloyd's

seller

aud
or

will

not

validated

some

other

produce

bill

the

goods,

lading,

good company

he
at

although

can
a

the

purchase

very

modest

produces

assurance

price.

The

chances of loss would be very small and responsible guaranties
could
be bought at a price which would throw no burden
upon the trade and
which would afford abundant protection against that
vague
con¬
to

touch

detail

from

all

sides

we think that we have covered the main
points in a suffi¬
ciently full manner to give you an idea of our position, which is abso¬
lutely opposed to guaranteeing the integrity of bills of lading, and our
reasons for taking this
position.

YORK.

New York City.

Whereas,

adopted

officials

the

White

conference

between

Sulphur Springs,

the

Va.,

committee

unanimously approved:

were

The

result of

railroad

and

Bills of Lading

the following resolutions with reference

certificate

railroad

and

bankers

NEW

conferences of

the various

officials

the

adoption

July 19,

1910,

at
Sulphur Springs, W. Va., of a form of certificate to be at¬
tached to Through Order Notify Bills of Lading for export cotton and
certain uniform regulations in respect to the issuance of such Bills of
Lading, therefore be it
Resolved, That this committee congratulate the railroad officials
was

White

the

and

others

engaged in these negotiations

their

work,

move

made to restore the credit

and

Validation

will

of the Bill

issued

Certificates

the

approval

our

under

Lading all the safeguards that

Resolved

That it is the

further,

arrangements

same

record

happy result of
of

the

conditions

the

important

Lading, and

belief

our

agreed

upon

forgeries and place around the issuance of this class of

prevent

Bill of

desire

should

made in

reasonably be expected.

can

of this committee

sense

respect

that the

of Domestic

Bills

Lading.
I

have

also

been

instructed

advise

that

you

the

event

committee

being appointed to meet the foreign bankers abroad, it

the

sense

that

committee

our

Mr.

Henry

Hentz

was

appointed

represent it.

Very truly

yours,

CHAS.

GWYNNE,
Assistant

S.—I

Hentz
time

is
in

not

hether

know

already in

you

are

aware

Secretary.

of the fact that Mr.

Europe and exepets to remain there until

some

September.
EXHIBIT

“Resolved, That the validation certificate to be attached to export
order bills of lading, which has been adopted by the railroads east of
the Mississippi River, and which is under discussion by the railroads
west of the

“Resolved,
validation
to

adopted,

the

certificate for export bills of lading be earnestly requested
the same validation certificate on order bills of lading for

adoupt

domestic

Mississippi River, be heartily endorsed, and
That railroads of the country who have

shipments

as speedily as possible.
A copy of these resolutions be sent to Mr. Walter E.
Vice-President of the Corn Exchange Bank, New York City,

“Resolved,
Frew,
and

Chairman of the Bankers’ and Foreign Exchange
having In hand the validations of bills of lading.”

Report of Committee

Committee,

Express Companies and Money

Orders.
of the American Bankers’ Association:
Committee on
Express Companies
Money Orders beg to report that since the last meeting of
Association in Chicago we made the following report to
Executive Council concerning the status of the case of
American Bankers’ Association vs. the Express Companies:
Gentlemen.—Your

and
the
the
the

The

decision of Commissioner Clark on the two points which have
passed on by the Commission places the Association in a most
peculiar position.
The Commission admits jurisdiction in the case
been

has

and

refused

Express
that

it,

dismiss

Companies.

discrimination exists of

Companies
such

from

doing

discrimination

kind

banking

sufficient

mission

then puts it up to the
discrimination in dollars.

such

demanded by the attorneys for the
that the Association has proved

recognizes

which

should

warrant

such

Association

the Express

estop

provided

business,

the

action.

prove

the

extent
The

Com¬

extent

The

subject is too Involved

letter, but

form

July 19th inst.,

tingency.
The

Street,

meeting of the Special Committee

Chamber, held today,

hankers

YORK, July 27, 1910.

To the Members

loading railroad companies. ^ while not prepared publicly to

nounce

forged bill

lading into circulation.
The

this

that

second agent the

bill

manner,

direct abroga¬

issuance of

.themselves

validation

William

imports, and in almost

they read us an ultimatum which is
applied principle.

Referring
tion,

shape or

wTay,

breath

same

any

STATE

THE

demand

they wished it clearly understood that

they did not guarantee bills of lading in

tion

13
Dear Sir:

denying him, but

means

damage,

reparation at the hands of the banker, nor in advance of such loss
to demand protection against his owu folly.
Recognizing this principle as being correct, English bankers recently
advised

E. FREW, Esq.,
Exchange Bank,

Corn

concerning which the

himself against,

with

WALTER

that

and it is universally

abide by such faith it is a matter between them,
banker

COMMERCE

NEW

foreign
the

in justice be asked to guarantee the bills of lading

party who can
which

tend

CHAMBER

the

We do not claim that such authority

be ours, but as the risk is knowingly taken
buyer and the credit is knowingly extended by him,

offers

EXHIBIT

neither

should

the

be authorized to draw the drafts.

THORNE,
KENT,
PORTER,
Committee.

between

by such buyers with their foreign banks, it is
justifiable nor right to ask American bankers to
guarantee that the sellers will carry out their agreements with the
buyers in an honorable, straightforward manner when such American
exchange buyers cannot determine which American cotton sellers shall

for

WM.

established

certainly

We have felt, and do feel

obligation whatever, except for the general good, to do more
satisfy ourselves that the water risk which we are taking is a

conservative

Chairman,

than

the

FREW,

FREDERICK I.

were

have then purchased further bills

to the amount Of the lines decided upon.

under

soon

GILBERT

thousand bales

we are,

JOSEPH T. TALBERT,

hun¬

one

153

not

wish

to
understood as criticising or complaining of
committee, but in view of the mutuality of the in¬
terests of bankers on both sides, who are at most mere
middlemen,
and concerned only as such, the absence of
co-operation would be most

the action of your

unfortunate.

Hoping that

you will receive this letter in

the

spirit of co-operation

sion

Association has presented unrefuted evidence to the Commis¬
by witnesses from the States of Illinois, Minnesota, Wisconsin,

Kansas

and

also

presented

every

one

could

Arkansas

that

written

discrimination

evidence

that

existed

such

those

States.

discrimination

existed

State In the United States and in practically every county
Kansas.
This was as far as the Association

State, namely,
without

the books of the Express Companies,
banking transactions of these companies
could only be obtained from the Express
Companies’ books.
1
In order to get such information the
attorneys for the Associa¬
tion asked the Commission to have the books of the
Express Companies
as

the

total

presented

access

amount

of the

for examination.

The

Commission

refused

this

request of

154

BANKERS'

attorneys,

our

probably

because

did not

they

have

sufficient

CONVENTION.
State

money

investigation of the Express Companies’ books.
Whatever the reason may have been, it put the Association in this
position: its right of action is admitted; the discrimination claimed
by it is admitted, and it is only asked to state the extent of the
known wrong actions of the Express Companies in order to win its
case.

which

the information

then

refused

useless

lines

their

and

the

money in prosecuting the case along the
Your Committee has unanimously concurred
recommends that their advice be followed

spend more

judgment

that

Also,

to go

demanded by the Commission

originally planned.
suit

and
be

dropped for the present.

ciation

was

considered.

the

mittee

Trust

furtherance of this work

have

been

active

February 9 and 10 of this year the Committee by in¬
met in joint conference at New York with other law
committees of the Association to consider propositions advanced
by the Law Committee of the Savings Bank Section concerning
the segregation and safeguarding of savings deposits.
The fol¬
lowing resolution was the result of such meeting:
“Resolved
that the Law Committee of the Savings Bank Section be re¬
quested to formulate a complete report as to proposed plan of
segiegatiug and further safeguarding of savings deposits and
that copies of such report be sent to the presidents and secre¬
taries of the various Sections of the Association and to the Law

Committee
that
their

of the Trust Company Section, with the request
they each prepare and make a report on the subject to
respective executive committees for final report by the

latter to the Executive

Council of the Association at the next

May meeting; further, that copies of such report of the Savings
Bank Law Committee be sent to the
Chairman and Secretary
of the Standing Law Committee, the Federal Legislative Com¬
mittee

■

and

the

Cmrency Commission of the Association with

request that such committees also make a report on the sub¬
ject to the Executive Council at its May meeting.”
We

pleased to report that during the year your Com¬
materially assisted the
State of Maryland in in¬
augurating a Banking Department.
The new law covering this
department contains many of the provisions recommended by
are

mittee

this Committee.
Your Committee have issued a call for a joint conference of
•legislative committeemen of State bankers’ associations to be
held on Thursday, October 6, at Los Angeles, at which the sub¬
jects of new legislation desired in the different States will be
considered as well as other matters which are appropriate for
discussion at such a gathering.
William

J. Field, Chairman.
Dimse,P. C. Kauffman,
John K. Ottley,
Henry

Bankers’ Association travelers’ check than with any
similar system, no matter how long it has been established.
We bespeak the continued co-operation of the members of the

Bankers’

Association

travelers’

Very truly

check.

yours,

Joseph

Chapman, Jr., Chairman.

M. E. Ailes.
Thornton

Cooke.

E. D. Durham.
J.

Talbert.

Report of Standing Law Committee, William J. Field,
Chairman.
Prior
call

for

to
a

“

Henry B.

Wilcox,

giving their customers what we believe to De
the best medium of exchange ever offered to travelers by any
bank or any association of banks in the world.
We think it is a matter of congratulation to the American
bankers that this system has been installed in banks in Great
Britain, on the Continent, South America, West Indies, India,
China, Hawaii, the Philppines and other foreign lands as the
most perfect paper for travelers that has yet been devised.
Your Committee wishes at this time to express its deep
sense
of obligation to the untiring efforts manifested by a
former member of our Committee, who owing to stress of
business and large responsibilities placed upon him, has felt
it necessary to retire from our Committee.
The banks of this
country owe a great deal to the energy and help of Mr. Fred I.
Kent, without whose efforts it would not have been possible
to have worked out the happy solution reached in the Ameri¬
can

their

vitation

American

General Counsel of the Asso¬

submitted

the members of your Com¬
respective States and bave
conducted a* considerable correspondence and co-operated with
legislative workers in other States.

use.

Association

the

Chicago
this Committee issued a
joint conference with legislative committeemen of
Convention

of the

proposed drafts of laws upon a number of
subjects to be urged through the State associations for enact
ment
by the legislatures which held sessions during 1910.
The propositions presented were thoroughly discussed.
Sub¬
sequently a pamphlet containing such proposed laws was pre¬
pared and issued with the approval of this Committee and the
enactment of such laws was urged in a number of States.
In
the annual report of the General Counsel details as to the pro¬
motion of this legislation are fully given.

The

the occasion

respective States.

posed legislation

plan favored by j^our Committee is to have the Bankers’
Company of New York act as the fiscal agent for the
banks wishing to issue such orders, just as it now acts as agent
for those banks that issue the Association travelers’ check, and
the system will be operative along similar lines to that now
in use in the travelers’ check.
You will appreciate the amount
of work required to get such a system into operation, when you
realize that the business now transacted by the Express Com¬
panies and the Government in the foreign and domestic orders
amounts to more than seven hundred millions of dollars ($700,000,000) annually.
This amount is made up of money orders
whose average amount is under $10.
Due to the tremendous detail involved, we are not in position
to guarantee that the Trust Company will accept the proposi¬
tion, but the Council having instructed us arrange with them
if a mutually satisfactory contract could be drawn up, it is
our
intention to continue our negotiations with the hope of
inducing them to undertake this project.
Since the last meeting of the Association in Chicago the
work of introducing the American Bankers* Association trav¬
elers’ check has proceeded to the entire satisfaction of your
committee.
At that time we reported some 1,300 banks as
having adopted the system, and that some $2,400,000 (two
million four hundred thousand dollars) of the checks had actually been put into • circulation and cashed.
We now have
to report that some 1,980 banks are issuing the checks, not in¬
cluding some four or five hundred branch offices where checks
are being sold, with the result that since the establishment of
the system $10,000,000 (ten million dollars) of the checks have
been put into circulation and been cashed by the Trust Companyt
These checks have circulated and passed current in all
sections of the world to the entire satisfaction of the traveling
public.
We hear now only at long intervals where anyone
carrying an American Bankers’ Association travelers’ check
has any difficulty whatever in cashing it, no matter where he
may happen to be, and we have reason to believe that com¬
plaints of this character have been less with respect to the

On November 10, 1909, your Committee held a meeting at the
Association offices in New York, at which the subject of pro¬

beg to report that at the spring meeting of the
Council instructions were given this Committee to submit a
plan by which the banks of this country could issue a domes¬
tic and foreign money order similar to that now being sold
by the Government and the Express Companies.
We expect
within a short time to submit such plan to the banks for their
approval, and upon securing the agreement of a sufficient num¬
ber of banks to adopt such a system we expect to present a
contract to the Executive Council at its spring meeting for
its approval, after which it will immediately put the system
into

held

ing the banking interests accomplished during the preceding
year and considering the subjects on which legislation would
be needed in the respective States.
Such conference was held
in the Auditorium Hotel, Chicago, September 16, 1909, and was
largely attended by representatives of different State Bankers’
Associations interested in legislation.
The General Counsel of
the Association reviewed the legislative work of the past year
and representatives from various State organizations presented
a
number of suggestions concerning legislative needs in their

to the only source from.
can be obtained,
and such refusal is given by the Commission itself.
Under the circumstances, our attorneys, Messrs. John S. Miller and
George Packard, of Chicago, advise us that it will, in their opinion,
permission

Bankers’ Associations to

Convention for the purpose of reviewing legislative work affect¬

to carry on the desired

Committee.
Thomas B. Paton,
Counsel and Secretary.

Report of the Currency Commission.
Los Angeles, Cal., October 3,

1910.

To the American Bankers’ Association in Convention Assembled.
Gentlemen:

The

Currency

Commission

the

American

Bankers’ Association beg to report that no meetings have Deen

held, consequently no action taken during the past year, on ac¬
of the policy of the Commission to await the report of
the Congressional Monetary Commission on matters appertaining
to banking and currency legislation.
In view of the importance of the subject and the length of
time during which the currency legislation has been under con¬
sideration, it is the judgment of your Committee that the re¬
port of the Congressional Monetary Commission should be torthcoming at an early date, and from information in hand it is
expected that such report will be presented in the near future.
Carrying out the purposes for which this Commission was
appointed, it will co-operate with the Congressional Monetary
Commission with a view of securing such conservative legis¬
lation as will insure the reform necessary in our banking and
currency system.
count

All of which is

respectfully submitted.

American Bankers’ Association Currency Commission,
J. B. Forgan, Vice Chairman.

BANKING
Report of Federal Legislative Committee, Arthur Reynolds,
Chairman.
To the Members of the American Bankers’
Your Federal Legislative Committee begs

Association:
leave to report:

have continued the line of work heretofore pursued by
Committee, that of keeping in touch with all proposed
legislation affecting the banking business of the country, and
keeping the members of the Association informed as to legis¬
lation that was likely to be considered or passed.
We have kept in touch with the various Committees of Con¬
gress, as well as the* Committees of the Association and other
leading commercial organizations.
We have copies of all bills that have been introduced, and
We

this

the views of this Association have been presented to committee
members of the House and Senate, having such measures before

them,

and

believe that

influence

was

exerted

by this

method in their final determination.
The

Committee

conferences

has

been

Committees

represented
the

several

Association

Important

endeavor

produce harmonious action by your various committees on
any subject of interest to the different Sections which might be
consideration.

under
This

Committee has

exerted its

influence

and

expended its

efforts to

prevent unsound financial legislation, notably in its
opposition to the Postal Savings Bank law, but owing to the lack
of any spontaneous, energetic co-operation on the part of the
rank and

file of the membership of your

unable to defeat that

Association,

theory that it

were

from

one

source

LEGISLATION.

Currency

legislation is without doubt most important
subject has not been lost sight of by your Committee.
It is hoped and expected by the majority of bankers that the
report of the Mometary Commission will not be longer de¬
layed.
Indeed, this must be the case if any action is to be
taken by the Congress recently chosen, for a measure of such
importance should be presented at its first session in order to

and this

time for its due consideration.

that

reason

neither

the

members

this

Association

Committee has urged any legislation on this suoject
is due to the fact that all have been decorously awraiting the
action and report of the Commission.
The sooner this report
is made public, the earlier will the opportunity be afforded for
suggestion and discussion, and we earnestly urge all members

nor

your

this

and

Association

present

their

take

views

active

through

Interest

their

the

matter

Representatives

and

Senators.
recent formation of Clearing House Associations under
provisions of the Aldrieh-Vreeland bill, at the suggestion
of the Honorable, the Secretary of the Treasury, indicates the
necessity of the use of bank credits in our financial system
as opposed
to riietal money or its representatives solely, and
whether the advantage from this practice is derived from a
plan of asset currency, which will maintain the individuality
of our banks, or through the medium of a Central Bank, the
principle involved in their operation, to produce a like result is
one and the same.
In either case the relief to be obtained by
a bank
must be based largely upon its credit and the judg¬
ment previously exercised in the care with which its credit has
been extended; its loans must be liquid (that is to say, created
against movable existing values) and quick of realization.
If. under the Central Bank plan, a commercial bank, a de¬
positor in that bank desires to increase its reserve and thereby
increase its loaning power, it must have quick and unquestioned
The

the

assets to rediscount in order to obtain the desired result.

If,

now,

which is

the

one

same

bank requires relief and utilizes its credit,
by the issue of asset

of the most valuable assets,

currency against the same unquestioned assets that it
be required to re-discount with the Central Bank, the

would
same

object would be obtained.
It appears, therefore, that the credit of the bank is an im¬
portant factor in the transaction, and, if the same would be
made available, extra care and judgment should be used in
making such loans as wrould be acceptable to the Central
Bank in the one instance, and liquid enough to care for the re¬
tirement of the asset currency as fast as presented in the other.
If this reasoning is correct, it would point to the result that
credit is the great foundation in any financial system.
The principle practically applied in the foreign system of
banking has enabled them to pass periods of unusual stress,
such as have caused disaster under our inflexible plan.
For it

known that the foreign banks serving commercial in¬
continually keep in operation a system of credit extension
by means of their liquid commercial assets, which enables them
to serve their patrons satisfactorily and maintain at all times
public confidence in the business situation.
We have always maintained that the individuality of the
banks should be preserved, and that the banks, large and small,
should enjoy an equal privilege in any plan proposed for the
use of our bank credits as a basis for currency issues.
We be¬
lieve this may best be accomplished through an issue of notes
against assets which, under proper methods of handling as to
redemption and adequate reserve will adjust their volume auto¬
matically to the requirements of business.
In view of the temporary nature of the Aldrieh-Vreeland law,
there remains only about three years during which it is avail¬
able and which is at this time the only legally recognized means
of relief in case of difficulty, and regardless of the individual
preferences of the various members of your Committee as to
whether the asset currency plan or that of a central bank should
be adopted, this Committee feels called upon by the relation it
sustains to this Association, as well as the duty it owes to the
public, to recommend that you take some action which will
signify to the legislative branch of our Government j-our pref¬
erence with regard to the two plans.
We believe that a continuation of the policy of procrastination
with regard to financial legislation will be detrimental to all
branches
which

we are

business, and especially dangerous to the one in
engaged, and that the time for action has come.
SEGREGATION

SAVINGS

DEPOSITS.

was

CURRENCY

The

well

terests

urging or presenting the views of its
individual members and not those of the Association, while on
the other hand the membership as a body has not rallied to its
support to defeat a measure to which a large majority were
opposed.
The usefulness of a legislative committee under such cir¬
cumstances is questionable, for if the members of the Associa¬
tion do not have such a committee to rely upon, individual
effort on the part of bankers in various parts of the country
may be relied upon to accomplish more than any committee
which has a divided support.

secure

155

measure.

Your Committee has met with criticism
the

SECTION.

Your Committee in its last

report referred to the probability
legislation by Congress looking to the segregation of savings
deposits and the assets arising therefrom in national banks.
This subject has received careful consideration at the hands
of the Law Committee of the Savings Bank Section of this
Association, looking toward the same end, and while this Asso¬
ciation has heretofore given no positive expression with regard
to the proposal, the question is still a live one and is being
considered and canvassed by a great number of bankers through¬
out the country, and independent action may reasonably be ex¬
pected if this Convention does not see fit to act.
At the Chicago Convention last year the National Association
of State Bank Superintendents unanimously adopted resolutions
favoring wise seggregation, and they are urging legislation at
of

this time.

Already nearly one-fourth of the States of the Union have
passed laws restricting the investments and segregating the
assets arising from savings deposits in banks conducting a com¬
mercial and savings business combined.
It does not seem wise in the view of these facts to post¬
pone action in relation to the matter, and we consider it our
duty to recommend careful consideration of the subject and
that a special Committee, large enough to properly represent
the various sections of the Association, be appointed to thor¬
oughly canvass the matter in its relation to all banking Inter¬
ests, and to act in conjunction with the various legislative com¬
mittees to secure wise legislation.
Your Committee, now reporting, believe it would be wise
for Congress to enact a law to permit the separation of Sav¬
ings Deposits from all other classes of business, and the assets
created through such deposits should be invested under regu¬
lation of law, in loans on real estate and other high-grade se¬
curities and be segregated for the benefit of the savings de¬
positor. The banks availing themselves of this privilege should
not be required to carry a lescrve of more than 10 per cent of
such savings deposit liability.
Congress has already recognized the importance of such legis¬
lation, and your special attention is called to House Bill No.
27147 attached to this report and introduced at the last session
and referred to the Committee on Banking and Currency, which
applies to National Banks.
wash

to commend the energy and action of the Honor¬
Secretary of the Treasury in recommending the organi¬
zation of the currency associations contemplated by the AldriehVreeland Bill, and believe this course will be a potent factor in
maintaining business stability and popular confidence.
Our observation and experience in the various interviews we
We

able the

have

had with Committees of the

to the conclusion that without the

House and the Senate

lead

co-operation and assistance of

the

membership of this Association as individuals your Com¬
can
accomplish but little; whereas, we believe with
their active help any sound and reasonable legislation could be

mittee

obtained.

Many representatives of varieties of business are continually
pressing their claims for recognition in pending legislation af¬
fecting their interests, and the most persistent and numerous
are the ones to obtain what they desire.
At the present time are the bankers of the country going to
overlook the importance of proper financial legislation to main¬
tain our great growth and commercial development and sit idly
by and permit those of less experience to outline the future
course of legislation?
We appeal to the bankers of the country
to aid in the great work before us of improving our laws and of

156

BANKERS’

providing
tection

CONVENTION.

proper elasticity in our currency to afford the pro¬
much needed.
The business public demands that the

bankers lend their aid to this great and
important work, and
the exigencies of the case make it
necessary that something
be done at the next session of Congress.
A pall has been hang¬

ing
been

over

the business world.

slowing down.

The

Capital has

wheels

commerce

have

timid. Business of all
kinds lacks its wanted zest. No new enterprises are
being pro¬
posed.
Fear and uncertainty predominate.
What we need to¬
day is individual action by the bankers of the country.
Do
something practical. Do not rely upon associations heretofore
depended upon, in which nothing has been accomplished.
Con¬
gress alone can afford relief.
There is only one way to secure

grown

the co-operation of our Congressmen, and that is through our
individual effort.
Will we make the effort?
Will we assist in
the most

important financial legislation ever proposed in this
We hope the bankers may be depended upon to do
their full duty.
The future commercial supremacy of the coun¬
try demands immediate settlement of the currency question,
and if the
bankers generally will give the subject serious
thought, a proper solution can no doubt be speedily reached.
Arthur Reynolds, Chairman.
country?

John L. Hamilton,
J. F. Swinney,
'

Cox,

Jos. A. McCord.

Detailed

Report of Proceedings.

■?

THIRTY-SIXTH ANNUAL CONVENTION HELD AT LOS ANGELES, OCT. 4, 5, 6 and 7, 1910.
DAY’S

FIRST

PROCEEDINGS.

MORNING SESSION.

Tuesday, October 4, 1910.
’

LEWIS E. PIERSON, President, presiding.

The President:
will

A bad beginning makes a good ending.

please rise while

the Rev. Robert J.
Dr.

Burdette:

holier

than

Thine

its

Lord, our God, Thou mightier than the mighty,
holiest, wiser than the wisest, Thou only art God.
glory and Thine is the power, Thine is the honor and

majesty.

treasurers

fore,

Burdette.

the

The

and

earth

Thine.

are

is that

majesty

You
proceedings are opened by prayer by

our

praise

mankind.

their

souls

We
hour

purest ideals
we

Thy

holy

wisdom.

pray

only

from

through

them,

Convention

this

perity

all

and

wisdom

the

power

The President:
dress on

Thy

strength

blessing

visions

hour

ask

the

ascribe

with

sea

all.

unto

and

name

There¬

Thee

unto

Thy

them.

for

the

all

their

Thee.
that
and

land.

deliberations

Grant

the

results

this

And

Thy

were

the

land

deliberations
shall

our

endure

shall

name

through Jesus Christ,

divine

the

Association

and

Thou

before

noblest

Lord.

that

wisdom
this

blessing

and
to

actions

the

glory,

pros¬

honor,

Amen.

to have been favored with an

behalf of the State of California

and

Grant unto them,

men.

all

unto

Keep

highest

for the service of God and of

Thee,

pray

comes

and

fullness and

the

-givest

blessing upon this
assembly of Thy servants this morning, keepers of the treasures of
mint and mine, yoke-fellows with Thee in the distribution of good
to

glory

with

Thou

ad¬

by the Governor of

the

State, the Hon. James N. Gillett, but word has come to us
he is unexpectedly detained and cannot be here this
morning. I therefore take pleasure in introducing to you the
Mayor of the City of Los Angeles, the Hon. George Alexander,
who will welcome you on behalf of the city.
(Appluse.)
that

Address of Welcome by Mayor
Mr.

Geo. Alexander.

President, and gentlemen:

On behalf of the city, I ex¬
Angeles. The key
to the city is yours.
Make yourselves at home. We want you
to have a good time, and we want to convince you that we
have the best city in the world.
Our climate is unexcelled.
Facilities for manufacturing cannot be beaten.
Business is
good.
We will soon have a splendid harbor, with municipal
wharves, and we expect also to have a federal-owned line of
steamships on the coast, which, when the Panama Canal is
completed, will give us cheap freight rates between Los An¬
geles and the East. Two years from now we will have a great
abundance of the best of water, and our municipal water de¬
partment, already on a paying basis, will be a source of large
income to the city.
Very conservative estimates show that
our Owens River aqueduct will be the means of developing at
least 120,000 electric horse power, thereby furnishing cheap
power for manufacturers and a large revenue to the munici¬
pality.
We want you to see our city, to observe our business institu¬
tions, to study our growth and prosperity and the opportunities
tend

to you a most cordial welcome to Los

„

With a population of 103,000 in 1900, we
population of over 300,000 in 1910.
We want to con¬
vince you that our business men are active, substantial and
prosperous; that our municipality itself is all right; that you
can find no better place to live, to work, or to invest your sur¬
plus, than in Los Angeles.
It is a genuine pleasure to me to address this great gathering
of banking experts, assembled from all parts of the United
States—the brain of the banking world.
This meeting of the
master minds of the profession I am sure should result In
great development and much benefit to the banking interests
and to the various communities in which they thrive.
Banks are quasi-public institutions.
They are the trustees
to whom is confided the community’s cash.
A great part of
their working capital consists of the money of depositors.
No
other institutions are so closely in touch with all classes of
business and with citizens of every station in life.
If the
community is prosperous, the banks will prosper. If the com¬
munity is going down hill, the banks must go with it. Their
for Investment here.
have

prosperity is interwoven with the prosperity of the community.
and generally are leaders in
all great public enterprises.
Great public enterprises require capital.
Sometimes the very

For this reason bankers should be

future of a city may depend upon the success of such an
enterprise, as is the case with Los Angeles and her Owens
River aqueduct.
Without water our growth must stop.
With
an abundance of it our development is almost limitless.
Finan¬
cial crises sometimes arise in these great undertakings.
Then
it is that the banker has the opportunity to display his good
citizenship. I am proud to say that some of our local institu¬
tions have always responded promptly and liberally in the
time of our city’s need; and although at times the interests
of the city were directly opposed to the interests of some of
our largest concerns which were among the heaviest depositors
in our banks, we never yet have had to call upon our patriotic
citizens for popular subscriptions to tide us over a tight place.
One of the tendencies of recent times has been to give to
the possession of money too high a value in the affairs of men.
Money we must have. Without it the ordinary transactions of
life cannot be carried on, business would practically cease to
exist.
A tightening of the money market retards development
and brings disaster.
Money, however, is only one of the Im¬
plements of society, made necessary by the diversity of occu¬
pations. It is but a medium of exchange, which enables us to
obtain a share of that which is created by the genius and
It should be the means by which we
efforts of other men.
carry forward great and laudable projects, not the end for
which such projects are carried forward.
If we struggle and
work and plan, and sweat our brains and our bodies for the
mere
acquirement of money, no matter how successful our
quest may be, there can be no real satisfaction in it.
But
when we can look back at a great undertaking accomplished,
at something which we have created, the work of our brains
and the result of our well-directed energy, then we feel that
life has really been worth while.
Money has its uses and Its
abuses.
Properly used, it is a great blessing. Improperly used,
it may be a great instrument for evil.
Above all other things, we should value character and good
citizenship.
Nothing is sweeter in life than to win and hold
the esteem and confidence of one’s fellow citizens.
Such con¬
fidence, to be permanent, must be built upon character and
good citizenship.
Good citizenship means more than honesty in one’s dealings
with his fellowmen.
A man may be a good husband and
father; he may pay his obligations promptly; his word may be
gilt-edged security, and yet he may not be a good citizen.
Good citizenship implies public spirit.
It is the application
of the principles of morality to one’s conduct as a member of
The good citizen must be public spirited.
organized society.
He must take an active part in the affairs of his government.
He must bear his share of its burdens.
He must sacrifice suf¬
ficient time to perform his electoral duties intelligently.
In
time of war men gladly offer their very lives in their country’s
service.
There is also a patriotism of peace.
There are sacri¬
fices of time and money to be made when danger threatens
the financial and social welfare of one’s country.
The good
citizen must be broadminded and patriotic at all times.
And
I am glad to say that among our bankers we number some of
our most patriotic and progressive citizens.
Again I say, gentlemen, the key to the city is yours. Make
yourselves at home, and we will all join hand with our
Chamber of Commerce and other civic bodies to show you a
welcome so sincere that you will have a fine time while you
are here, stay as long as you can, and be sure to come again.
Our generous hosts and bankers of Los
The President:
Angeles will now officially welcome you by an address de¬
livered by the Chairman of the Clearing House Committee,
Mr. William H. Holliday.

Address of Welcome of W. H.
Los
Mr.

President

Holliday, President of the

Angeles Clearing House.

and Members

of the American Bankers’ Asso¬

ciation:

Angeles Clearing House
1 bid you welcome.
For many years we have cherished the hope of having among
the representatives of the greatest body of men, in the
us
greatest country on earth—men representing almost half of the
banking Interests of the world.
"We hope that there are many Missourians among you—as all
that we desire is an opportunity to show you what we have
in this glorious country.
Gentlemen:

In the name of the Los

and affiliated banks,

I will not take up your

time with statistics, concerning Los

Angeles and Southern California—as I have been here only
twenty-three years, and I have not had the time nor the oppor-

158

BANKERS’

tunity to master

tenth part of

speaking sincerely, not half has
All that

the facts.
And, gentlemen,
been told.

ever

ask of you is that you make

home. If there is anything
Just ask for it.

you

yourselves absolutely
wish that you do not see,

Personally, I should deem it a great pleasure to meet every
visiting member. And, if any member will stop me, any place,
I will do my utmost to
prove my assertion.
Your Associaton has done noble work for the
cause of good

banking throughout this land, and probably in foreign lands—

for, surely, the eyes of the world are upon you.
I have just one urgent
request to make of your Association,
and that is that you keep at the
currency question until you
succeed in giving to the United States a
currency system as
good, If not better than, any other system in the civilized
world.
Keep at it until you give us a real, elastic currency
that will meet all requirements.
I trust that your stay among us will be
pleasant, and that
each and every one of you will look forward to the time
when
you can come again.
Wishing you a prosperous and

pleasant

session,

again I bid

The President:
will

come

now

you welcome.

Our heartfelt thanks for this generous wel¬

be voiced to you

former president of

our

Association, Mr. George H. Russel, of Detroit, Mich.

Response to Address of Welcome by George H. Russel.
Mr. Russel:
Mr. Mayor, Mr. President of the Clearing
House, Citizens, Members, and Ladies of Los Angeles: The
pleasant duty has been assigned to me by your president to
answer

these addresses of welcome

behalf of the Associa¬

tion, the American Bankers’ Association.
programme that addresses were
of this State in all his majesty,

When I read in the

is this wonderful financial Association.

Many of us have visited your city before. Personally, I have
been here, I think, five or six times in the last twenty-two
years.
This last interval of over eight* years—I was here in
the wunter of 1902, now passing eight years—has
developed a
growth that is perfectly amazing.
I could scarcely believe
that the Los Angeles of eight years ago and of twelve years
and of twrenty years ago, could have projected itself into the
city of today. It is a deserved compliment to your city, gen¬
tlemen, that so many of our leading banking and business men
in the busy season of the
year have traveled two thousand,
twenty-five hundred or three thousand miles to visit this city,
and to understand that all is not east of the mountain range.
We approach your city over a desert in part, which we know
will in time blossom.
We came through the portal of San

Bernardino into this wonderful valley.
strewn

with

roses,

Our

Our path was literally
and fruit was spread upon our tables.
welcome began at San Bernardino and

reception and
Redlands, and has been with us ever since. When we came to
your city, we were met by your committee at the train—this
almost unexampled attention in the way of extending a wel¬
It

come.

was

satisfaction

sent

the

hotel

rather too

swiftly in an automobile made in the city of Detroit
(applause), but that very automobile, and a little sign on the
roadway at Redlands, is an indication of the general spirit
that has made possible such development as we see here.
We
were passing along at a pretty
rapid gait on the beautiful
roadway of Redlands, and crossing a viaduct I read a sign,
“Automobiles will slow down to twenty miles an hour in cross¬
ing this bridge.”
(Laughter.)
We have a speed limit of
fifteen miles an hour in our city, and I thought that you were
going some here.
(Laughter.)
Then as we rode about your
city yesterday and saw the beautiful homes and avenues and
fine streets, and missed the dust of the dryest period of the
year that wre were told we might see here, because it was
entirely free from that, I can say that you have a city of
homes, and that means everything to you.
It is hard for me to express myself in proper terms in
answer

have

the

extended

warmth
to

and
It

wealth
is

this

welcome that

you

not

unexpected.
I know your
hearts.
I have experienced your hospitality in the past.
I
know the people that constitute your city.
They are a selected
us.

class from the best country on earth.
We come here prepared to receive the welcome that has
been extended to us, to enjoy everything that you have put
before us; and, in visiting this Golden State, we see and read
its future.
We know that the Panama Canal, soon to be

opened, will build up your three or four maritime ports upon
the great Pacific, and make and build up for you a wonderful
commerce and a world-wide trade.
We hope and trust that
the State may retain its supremacy, its autonomy and its

majesty.

Your

city

here—although

census is not an¬
gain in population in
the last ten years of something over - three or four or five
hundred per cent.
(Laughter.) I don’t pretend to say exactly
how much.
But, at any rate, a hundred thousand people ten
years ago and three hundred thousand or more now, and ten
years from now, with the Greater Los Angeles spreading itself
all over the valley,
perhaps to the mountains on the east, we
will see a million or more people.
I hope that nothing may
check the growth that is upon you, and that all of the trade
and commerce from the East may pour its business into
your
harbor through your commercial houses and be financed by
the excellent institutions that are now organized here.
I cannot refrain from saying just a word about the unfortu¬
nounced—I

nate

understand

has

attained

your

of the past

occurrence

week.
I did not intend to.
But
that your sister cities of the United States
have looked upon that conflict of the past years in the inter¬
I

must

tell

you

ests of industrial freedom and the
open shop.
We have been
surprised and pleased and delighted that some journals, that
some
people, have had the courage to stand for industrial
freedom.
(Applause.) And while this contest or conflict has
lately culminated in this most unfortunate occurrence, perhaps,
gentlemen, the bomb gave evidence only of the bugle call of
victory. I hope, and sincerely believe, that these troubles are
past to you. and that you may go on doing right and fair by
everyone, as you have done in the past, but under the domin¬
ion and heel of no organization.
(Applause.)
We are here to enjoy everything in sight,
gentlemen, and
your welcome, overpowering as it is, is received by us with

heartfelt thanks; and on behalf of this greatest Association on
earth I tender you our appreciation, our thanks and our
delight
at being here.
(Applause.)

to be made

by the Governor
by the Mayor of this wonder¬
ful city, in all his pride, and by the Chairman of the
Clearing
House, representing so remarkable a history in the finances of
a
comparatively young city, I was somewhat appalled.
But
when I thought that behind me stood an Association of over
11,000 members, with total assets of over fourteen billions of
dollars, I took courage. I felt and knew that I had financial
backing of the strongest character; and like the good minister
that could always preach better and talk better with a ten
dollar bill in his pocket over Sunday, that he borrowed
regu¬
larly every Saturday night, I took strength and courage from
the fact that behind

CONVENTION

The President:

State

The

Vice-Presidents

take seats on the

members

and

the

of the

Executive

honorary guests

Council, the

are

invited

platform.

Annual Address of the President, Lewis E. Pierson.

this beautiful city and State which have so hospitably
welcomed us, we are assembled to hold the Annual Convention
of our Association.
Since the organization of the American
Bankers’ Association thirty-six years ago, and the
subsequent

organization of banking institutions in nearly all the States,
fruits of bankers’ meetings have been each year more
clearly shown.
The formation of friendships is eliminating local and sec¬
tional jealousies and bringing bankers together to
exchange
experiences, correct mistakes and understand how best to
strengthen the affairs of their own institutions in a manner
most helpful and beneficial to their depositors and communities.
the

POSTAL

The

past

SAVINGS

BANES.

has been an active one for our Association.
Savings Bank Committee strenuously opposed the
adoption of the law etsablishing such institutions, hut in spite
of its efforts and the active work of its indefatigable Chair¬
man, Mr. Lucius Teter, President of the Chicago Savings Bank,
Congress enacted such a law June 25, 1910, through the in¬
sistence of the Administration that the party’s pledge in its
campaign platform should be carried out.
The opposition of our Association was based upon the prin¬
ciples that it is as improper for the Government to extend
its paternalism and enter the banking business as it would
be to enter the grocery or any other business; that there would
always be a temptation on the part of succeeding administra¬
tions to regard the deposits so received as revenue rather
than obligations; that such deposits, if accumulated to a vast
amount and payable on demand, would, in any future war
crisis, weaken the nation’s credit when that credit should be
strongest; that, while adopted in other countries, it is a seri¬
ous question whether its ultimate result there will not be found
more harmful than beneficial; and further, that with our coun¬
try so completely and effectively served by savings institutions
—in the East operated under State laws and supervision of un¬
questioned stability, and in the West by savings departments
in National and State banks—thus offering every facility and
protection, such a departure by the National Government is
entirely unnecessary.
While the law, as passed, places its operations in the hands
of a committee somewhat as an experiment, it is reported that
there is being exerted the political pressure for individual
benefit predicted by our members and so repugnant to all prin¬
ciples of good government.
The attitude of our Association has been fully justified in its
opposition to the bank guarantee heresy by the reported fail¬
of that proposition in the State of Oklahoma where it
ure
originated, and it can only be hoped that Congress will heed
the unanimous warnings of our members as to the ultimate
consequences of a Postal Savings Bank system and at an early
date repeal the present law.
Your

year

Postal

BILL

During the
grain

concern

$10,000,000.

LADING

COMMITTEE.

the failure of two cotton houses and one
revealed Bill of Lading frauds totalling nearly*

year

BANKING
This condition, long predicted by your Bill of Lading Com¬
mittee, precipitated a loss of confidence in this document as
an
instrument of value to the extent that foreign bankers,
largely affected through these frauds, passed resolutions an¬
nouncing their determination to withhold acceptance of drafts
drawn against Cotton Export Bills of Lading after October 31,
1910, unless the American banks through whose hands they
passed would guarantee both the genuineness of the signature
of the railroad agent on the bill and the receipt of the cotton
by the railroad.
This stand no doubt was influenced by the failure of our
Senate to enact into law the Stevens Bill, drawn to hold is¬
suing carriers liable for bills of lading signed by authorized
agents whether or not the goods had been received, which bill,
by a vote suspending the rules of the House, was passed by
that body earlier In the session.
In view of these conditions and the necessity for action
have

there

been

numerous

conferences

between

commercial

bodies, representatives of railroads and your Bill of Lading
Committee, and a special sub-committee of New York bankers,
that have resulted in an agreement upon a form of validation
certificate, which is now being attached to cotton export order
bills of lading by nearly all the cotton carrying railroads.
By the adoption of this validation certificate it is believed

protection sought by foreign bankers has been at¬
the necessity for the guarantee stipulated In
their resolution, as the use of the certificate will tend to pre¬
vent forged bills as well as the issuance of bills where no
goods have been received, and, in the judgment of competent
authorities, marks another step toward the solution of this
vexatious and important problem.
It has been my privilege to closely observe the energetic
the

that

tained

without

Committee upon this perplexing question, and I
to express an appreciation of their services;
particularly those of the able Chairman, Mr. Clay H. Hollister,
and the sub-Cliairman, Mr. Walter E. Frew, as well as Mr.
work

of your

feel it but proper

Jos. T. Talbert and Mr. Fred I. Kent, for
selfish

PROTECTIVE

In
that

their active and un¬

work.

the
a

COMMITTEE.

report of the Protective Committee you will notice

during the
culmination of unsatisfactory
existing for several years between the former Agency

change was made in their Detective Agents

past

year
conditions

from

resulting

the

and the Association.
You will also motice in the report that since the termination
of their service the former agents have spent many thousands

campaign to secure support from our members
for the maintenance of an organization avowedly and actively
antagonistic to our own Protective Committee and its present
of dollars in a

Detective Agency.
In view of this

situation your officers feel justified in suggetsing that entanglements with any other service will surely
precipitate a conflict in handling cases and tend to hinder con¬
tinuance of the highly satisfactory results which have been
achieved by the new agents since their employment.
AMERICAN

The

Institute

officers

have

BANKING.

Banking formed by this

years ago has more
staunchest supporters.
Your

INSTITUTE

Association ten

than realized the fondest hopes of
been

much

interested in

its

observing the

splendid work of the Institute by attending Chapter meetings
and the Convention of the Institute at Chattanooga, and are

glad to report an intense interest shown by the young men in
their study courses, and to predict that the $80,000 contributed
by this Association since the founding of the Institute will
return untold dividends to the entire country through the train¬
ing of our future bank officers in both the science and technique
of their profession.
CONSOLIDATION

“JOURNAL” AND INSTITUTE

"Journal

of the American Bankers

question
with the

Association” was taken up

by the Executive Committee of the Institute, which formulated
and recommended a plan of consolidation to our Executive
Council, that was formally approved, with authority to the
officers to carry out its details so that Institute and Association
matter might be departmentized, edited and published along
the same lines as in the past.
As a result the members of the
Association and those of the Institute now receive under one
monthly Journal containing the current features of both
organizations.
Heretofore the Association Journal has frequently escaped the
notice of the officers of our large institutions, and it is con¬
fidently hoped and believed that the consolidation of these
two important publications
(the Journal and the Bulletin)
will result in creating a livelier interest in their contents on
the part of all bankers.
cover a

TRAVELERS’ CHECKS.
The

splendid system of Travelers’ Checks

initiated by your

energetic committee has surprisingly proven its value to our
members in the short time it has been in operation, as these

readily accepted in every part of the civil¬
Committee of the Association has ever done
better work for our members, and I feel that their labors and
accomplishments are worthy of both your thanks and ad¬
to-day

checks are
ized

world.

miration.
FEDERATION.

CIVIC

During the winter the National Civic Federation met with
States in Washington, D. C., and
in response to an invitation, your President, Secretary and
their session, and, with others,
General Counsel attended
recommended to the Governors the passage in their States of
the Commercial Acts drafted by the Commissioners on Uniform
State Laws,
including the Negotiable Instruments Act, the
Warehouse Receipt Act, the Bill of Lading Act and the Bulk
the Governors of the several

Sales Act.

glad to report that the Civic Federation has recently
as part of its future activities the organization of
State branches to carry on the work of securing this and sim¬
ilar uniform State legislation.
We are

taken

SUPERVISION.

BANK

other

countries

and

rectors

accountants

bank

rests largely with di¬
employment of public
examiners and the maintenance of a permanent

shareholders
as

supervision
through the

auditing staff.
In

National and most of the State Gov¬

the

country

our

strict supervision over banking institutions

ernments maintain

Association has been a con¬
in this respect, it is with
much gratification that we note the satisfactory results at¬
tending the efforts of recent years to bring about a highly de¬
veloped system of supervision of banking institutions through¬
under the
sistent

jurisdiction, and

advocate

out the

for

country.

better

as our

service

„

In this respect

the administration of the present Comptroller
of the Currency, Hon. Lawrence O. Murray, is a conspicuous
and commendable example of what can be accomplished in his
office, and I feel that he is deserving of the thanks of the
members of this Association for the high state of efficiency to
which he has brought the present system of National Bank
supervision.
The Clearing House Section of our Association has also suc¬
cessfully urged the employment of examiners by Clearing Houses
to make regular examinations of the banks in some of the large
cities, and we find an increasing number of banks each year
employing outside auditors to make independent examinations
for the benefit of their directors.
All this work, I believe, would be greatly aided by the de¬
velopment of a uniform system of bank accounting, as advo¬
cated in his quiet way by the Hon. Pierre Jay, formerly Com¬
missioner of Banking for the State of Massachusetts, and now
Vice-President of the Bank of the Manhattan Company, New
Such a system wrould be invaluable to the smaller banks
York.
and could be utilized to advantage by the larger institutions and
would provide a ready and sure means of verification by the
bank examiners.
I also believe that out of such a system there should be de¬
veloped a proper method of ascertaining the cost basis for hand¬
ling various items and transactions in the banks.

reduce

Manufacturers

the

smallest

fractions

the

cost

operation in producing goods, while bankers have too long
been prone to lump expenses and income and take chances on
coming out with a profit.
The expense end of any other modern business is under care¬
ful supervision, and in my judgment if bankers were to work
on a proper cost basis, as well as transit costs, they would not
only find their Analysis Departments would reveal opportu¬
nities to insure amazing savings, but would be less eager to

each

offer unusual

inducements

secure

new

business.

COMMERCIAL PAPER.

“BULLETIN.”

many advantages were found in its favor, the
merging the Bulletin published by the Institute

As
of

159

SECTION.

In recent years

the sale of Commercial Paper and its purchase
by the bankers through brokers has grown to vast proportions.
The purchase is made upon the representation of brokers,
on statements of condition of the
makers and upon credit in¬
formation obtained by purchasers from various sources, all tend¬
ing to show the ability of the makers to pay their borrowings
promptly at maturity.
Banks in the

chases
sold

cities also

are asked to make large pur¬
correspondents, and much paper is
option by traveling salesmen of the brokers direct to

for

the

reserve

account

the country banks.
The large banks

the

cities

maintain for the

benefit of

themselves and their correspondents extensive
reaus, which, in many
with each other in the

investigating bu¬
directions, are steadily working closer
exchange of credit impressions, so that

nearly every name is always under a glaring searchlight.
This method of determining the goodness of each name, while
it has many advantages, is never surely correct, and on the
other hand, out of the free exchange of opinions unjustified
prejudice often creeps in to the detriment of solvent concerns.
It would, therefore, seem to be a decided advantage to de¬
vise a regular system whereby true conditions may be absolutely
ascertained to justify both the sale and the purchase of com-

160
mercial

BANKERS’

CONVENTION.

and add to its availability as a desirable bank

paper

investment.

dance

The failure of several large concerns in recent
years have re¬
vealed statements of condition upon which the

purchase of their

paper
as

largely made to be erroneous, to say the least, and
result losses
aggregating millions and millions of dollars
was

have been sustained by the banks, although scattered in moderate
amounts among a large number of institutions.
The question, therefore, of regulating

and making safer

fair

some

been

way the growing amount of commercial
live topic among bankers for some time.

paper

has

Many sug¬
gestions for the purpose of ascertaining true conditions have
been made, including the registry
by Clearing Houses of the
notes sold and examinations of the affairs of the makers
by
public accountants of known standing.
These requirements would seem to be
greatly desired and
perhaps would best be accomplished through a Committee or¬
ganized for the specific purpose of recommending accountants,
the method of their examination and form of
report and, with
assistants, performing the function of registering each and
every note issued by concerns selling their paper in the open
market.
NOTE

During the past few
met severe

losses

KITING.

years members of

result of

our Association have
clever system of note kiting,

which, in spite of publicity, seems to be increasing.
The operations appear to be instigated and guided
by people
whose newspaper advertisements
offering financial support catch
many unwary, well-meaning and well-rated merchants and manu¬
facturers, who, yielding to the tempting offers set forth, face
inevitable bankruptcy, with shame to themselves as
dupes and
loss to their creditors.

These dupes are advised to open accounts in
ing institutions where the management may
more

for

designated bank¬
appear lax, or,
often, their own bank may be selected as a target, and
while good balances are
maintained, sometimes with funds

furnished for the purpose.
After

confidence

and

credit

have

been

established,

tions go

instruc¬

out to draw notes to the order of other concerns in
proper lines of business in exchange for a like amount of notes
made by others in a similar line of
business, and from each the
instigator of the exchange receives ruinous commissions.
These apparently legitimate receivables are then
offered for
discount, and, * having all the appearance of business
paper,
bearing two rated names, are accepted by the bank; and so it
goes on until the line of supposed receivables
creeps up and
finally one of the concerns goes under. The house of cards then
tumbles; those retaining some strength being carried down
by
the weight of their endorsements in addition to their
own notes
outstanding.
In view of the insidious methods
our

Aldrich-Vreeland Bill with provisions which were not in accor¬

members be

tions and at the

constantly
same

mittee in any manner
those instigating and

employed, it is essential that
their guard against these opera¬

time co-operate with the Protective Com¬
that will secure certain punishmtnt to

perpetrating this system of high finance.

with

BANKING

last few

years

AND

CURRENCY

have witnessed

remarkable

the views of many bankers and the entire
tion of banking and currency reforms.

country

change in

the ques¬

The

wild-cat and yellow-dog
currency issued before the war
by banks whose activities were unrestrained and
without ade¬
quate supervision remain so vividly in the minds of our
older

bankers and

merchants that until

few

years

ago all sugges¬
tions for currency based upon
anything other than the full value
of
gold
or
Government
bonds
met
with
immediate and
unanimous disapproval.
Likewise, the
of

demonstrated

banks

proved

operating honestly under the National
Banking Act
answer to arguments
favoring any change in

sufficient

the system.
The study
of

banking conditions by

bankers and

causes

stability

business men, stimulated
and effects of the panics of

increasing

number

by discussion of the
1893, 1896 and 1907, has,

however, been fruitful in efforts to crystallize
sentiment, so that
it is now generally conceded that
while our system of individual
local banking units has proven ideal for
the development of the

country, our great weakness lies in the lack of cohesion
between
these units, and our inability to retire the
surplus volumes of
currency as loans contract, and to
automatically expand both
currency and credit to tide over heavy seasonal and
unusual

sometimes

demands.

It is also

conceded, and history clearly
demonstrates, that

great weakness lies in

form of greenback and bond-secured
currency, which, having been generally
proven
unresponsive to the expanding and
contracting conditions of
trade, may be well accused of being one of the
prime causes
of the financial panics since
the Civil War.
The discussion and
suggested reforms prior to 190G led to
the appointment that
year by our Association of a
Currency
Commission, instructed to prepare a concrete, workable
plan,
which plan was formulated and
urged upon Congress without
result, although supported by the
Administration.
Following the panic of 1907, however,
Congress passed the
national

bank

our

Commission

and

other

members

possible angle in our own, as well as every other impor¬
country of the world, and the results, where permitted,
now being published, give us a library
of authoritative bank¬
ing and currency data which we have never before possessed.
With these reference books now available to all, it would
seem to be a duty to urge our business men to
carefully study
and freely discuss this great question which so vitally affects
every man, woman and child in our country.
The investigations reveal a few important points in the
banking systems abroad which are lacking here, one of which
is the method employed to avoid the improper control of central
and joint stock banks, and accomplished by
limiting the voting
and stock transfer power, often but one vote
being allowed a
shareholder, no matter how large the holding, while the transfer
of shares requires consent of the Board of
Directors, and, in the
cases of Continental Central
Banks, a voice in their affairs is
also exercised by more or less limited
governmental represen¬
tation.
These provisions aim to prevent the entrance of
specula¬
tive, political and other undesirable elements into the affairs
and control of banks, and insure not
only competent manage¬
but the retirement of those whose conduct
may be

ment

deemed

improper.
Other

points include the centralization of reserve, its econ¬
a system of rediscounting with its expansion and
contraction of credit and currency issues, to meet the
varying
requirements of trade; an ability to attract gold when most
needed and a system of acceptance of time drafts
by the
joint stock banks and private bankers.
Upon the question of reserve, rediscounting and currency
issues we have had much discussion, and I
shall, therefore,
only briefly allude to the acceptance system which forms the
basis of the liquid investments of foreign bankers.
Under this system foreign correspondents either draw direct
omical

use,

„

authorize

others

draw

drafts

their

banking

connec¬

tions in the large city at sixty and ninety days’ sight, or such
other time as may be arranged—the drafts are
accepted, in
cases on credit but more often on
collateral—and of what
is then two-name paper much is sold in the market for
account
of the drawer through discount companies whose

rare

operations

somewhat

similar

those

are

note

brokers.
In this manner the larger banks lend their credit to
their
correspondents and by their acceptance complete an instru¬
ment commanding an international
market, through the ready
our

sale of wrhich
tor

the drawer is placed in funds without the
accep¬
being called upon for any funds in the transaction except

default of the drawer at maturity.
daily use of this acceptance function, there¬
fore, permits the larger banks in the centers to expand and
contract credit facilities other than
through direct loans, with
upon

REFORMS.

views

every
tant

rare

The

the

Association, who in turn urged a provision which was
finally adopted and created a Monetary Commission to study
banking and currency conditions in this and other countries.
Under the able guidance of its Chairman, Senator Aldrich,
investigations have been conducted, perhaps more exhaustive
than ever attempted before upon any subject in this or any
other country.
These investigations have been made from
our

constant,

the

rising and falling demands of trade, and at the same time
provides in large volume an ideal form of short time invest¬
for

ment

institutions

our

declined,
amount

country,
we

have

both

upon

been

home and

abroad.

every occasion
when business has
unable to retire
any considerable

so that with our system of reserve cen¬
deposits pyramid rapidly, and especially upon the banks
in New’ York, Chicago and St. Louis, the three
central reserve

currency,

ters

cities.
Out

of this

condition

the

system of sharp call, Wall Street
developed for the employment and
quick return of these surplus deposits, and as these funds accu-s
mulate and cannot be otherwise used or
disposed of, they are
forced into such loans by banks in other
cities, as well as
New York, all aiding speculators to initiate wild
transactions
to be checked only when these stock loans are
called to meet
the withdrawal of deposits for trade
purposes.
This spectacle is regularly
witnessed, and, as the deposits
are withdrawn, competition for the use of
funds is precipitated
between legitimate commercial and speculative
borrowers, with
interest rates soaring at times to ridiculous
heights, until timid
depositors, who cannot understand the newspaper
comments,
withdraw’ their deposits and hoard cash.
collateral

loans

has

been

Mercantile as well as speculative loans are
then hard to
obtain, trade is checked and failures quickly follow.
Labor is
thrown out of employment and hard times
come, accompanied
by a shrinkage in the value of commodities as well as
secur¬

ities, entailing enormous and unnecessary losses upon both
cap¬
labor, rich and poor, but bearing down
especially hard
upon the small tradesman and wage earner, whose
families then
endure untold sufferings which in turn tend
to breed socialism
ital and

and anarchism.
In

framing the National Bank Act Congress endeavored
to
by requiring banks in the reserve cities to
carry a cash reserve of 12% per cent,
against 6 per cent,
required by banks in the country districts, and further
required
meet

this situation

BANKING
the banks in the three central

reserve

cities, New York, Chicago

and

St. Louis, to carry a still larger reserve amounting to 25
per cent, of their net deposits.
The

Act

also

permits country banks

rediscount custom¬

ers’ notes with their correspondent in the reserve city and the

SECTION.
been made that it

might

the

desirable, in order to strengthen
in every possible
manner
upon this important question, that this Convention authorize
the appointment of a new Currency Commission, with a mem¬
bership composed of those now serving on the present Com¬
influence

reserve

city banks to likewise rediscount with their central
city correspondent, but utterly fails to provide any
place where the central reserve city banks can turn for redis¬

mission and

reserve

ner

count in

order to give proper

support to their customers and

correspondents. '
Without an ability to convert their own resources and credit,
no matter how conservatively the affairs of the central reserve
city banks may be managed, there is always a point beyond
which they cannot go, even with the larger reserve, when many
millions of loans made by out of town banks direct to city bor¬
rowers are thrown back on the city banks and it is necessary to
endeavor to shoulder these loans as well as borrowing demands
from the entire country.
It IS, therefore, at this juncture that a crisis is
invariably
reached, and it is also plainly evident that at this point the
cure
should be applied.
Call it what you will—preferably
“The Bank of the United States”—we surely need a
large insti¬
tution for rediscount and currency issue to perfect our other¬
wise admirable banking system.
We have many advantages over the systems of other coun¬
tries, for we derive great benefit from our method of bank
supervision and the operation of individual local banking units,
but these units have no ultimate cohesion, and are like an
unorganized mob In time of war, presenting in each emergency
the same exhibition of an inability to obtain enough currency
and credit to tide
losses to

over

intense situations and prevent the usual

worthy and solvent

concerns.

In every

other nation of the world a banking and monetary
system heading up to an institution of discount and currency
issue has demonstrated its beneficial influence to aid in
keep¬
ing business conditions steady and stable by conservatively
controlling the expansion of credit through its rate of dis¬
count and automatically increasing and decreasing
the volume
of note issues with the requirements of trade.
It, therefore, does not seem reasonable that our business
men can longer tolerate the
handicaps under which their af¬
fairs suffer when they realize that the causes of these handi¬
caps emanate from weaknesses in our banking system which
can be easily cured, and it is also hard to believe that Con¬
gress will long be unmindful of the absolute necessity for a
proper revision of our banking and currency system.
My predecessor, Mr. George M. Reynolds, President of the
Continental & Commercial National Bank, Chicago, in his
address to you last year, ably argued for a bank of discount
and issue to round out our present system without disturbance
of other existing conditions, and I believe with him that a
plan along the lines then proposed will fully meet the require¬
ments and permit us to mobilize pur banking resources in a
manner which will achieve for our
country the financial lead¬
ership of the world.
It is true that many able bankers suggest the extension of
Clearing House operations to meet the exigencies we so fre¬
quently face, but why not try to make the cure complete, and
at the same time retain our Clearing House experience for addi¬
tional protection, which we hope may never be necessary.
I would suggest, however, the addition of an
acceptance
function to the banks in the central reserve cities, based upon
collateral, and limited, perhaps, to a certain proportion of
their capitalization.
The legalized use of such a function by the reserve city
banks would permit the utilization of their credit for the ben¬
efit of their correspondents, who, in turn, after
acceptance,
could readily obtain funds by selling in the open market on a
favorable basis of discount the drafts they could draw.

These drafts should command

international

well

domestic

market, and would, at the same time, increase the
supply of short time liquid investments for banking institu¬
tions, and also create a supply of exchange on the centers,
which would undoubtedly find its way at times into the hands
of foreign bankers, thereby aiding the development
of our inter¬
national trade and permitting our large cities to assume their
proper place as financial centers of the world.
After marking time for three years, awaiting the investiga¬
tions of the Monetary Commission of Congress, which are now
before us, it seems opportune for this Association, as well as
other business organizations, to become active in this
great
question in order that it may be solved before another crisis
can

come

When

upon us.

Association created its Currency Commission, the
importance of the membership being representative was given
careful thought, and a plan adopted by which the members of
the Executive Council, by their Individual votes, expressed
preferences, leaving to the Executive Officers the final deter¬
mination, based upon such votes, with the result that the Com¬
mission includes the best talent showing an active interest in
the subject at that time.
Since then, however, other bankers equally prominent and in
sections of the country now without representation on the
Commission, have shown an active interest in and comprehen¬
sive grasp of the subject, and the suggestion, therefore, has
our

161

appear

Association

few additional members to be chosen in

similar to that

Senator Aldrich has advised

the

man¬

previously adopted.
me

that he has called

meeting

Monetary Commission early in the Session and will
for conferences with the Currency Commission of our

arrange
Association and committees

appointed by commercial organiza¬
tions, so that it is our duty to be ready at the proper time
to put forth our best efforts to secure safe and sane banking

reforms.
The

past year has been an active one for our over ninety
of people; the volume of clearings for the eight
months past, according to Bradstreet’s, exceed those of 1909
by 5 per cent., and the percentage of idle railroad cars in the
month of August is 66 per cent, less than in 1909, all tending
to keep our institutions busy and fully employ the funds
millions

entrusted to
The

our

nation’s

care.

increasing power

consumption

without

apparent

corresponding increase in production has stimulated
the cost of living, and especially the cost of food prices, and
at the same time is tending to seriously weaken our export
power, which, in every financial stringency heretofore,
has
quickly brought gold to relieve the strain.
,

Throughout the nation we find waste everywhere, in the
kitchen, in the business man’s office and In the
farmers’ field, and our extravagance in living is tending to
exceed income and encroach upon capital.
As bankers I believe we owe a duty to our communities to
encourage thrift and economy in every way possible.
We
should get closer to our people, and encourage investment in
safe securities, arranging whenever we can to have bond issues
housewife’s

offered

denominations

that

will

attract

and

meet

the

re¬

quirements of the smallest investors.
Experience and observation place us in a position to give
advice to deserving men, helping them avoid mistakes and to
particularly escape the lure of the “get rich quick” schemes,
through the advertisements of which so many millions are
each year coaxed from and lost by small investors all over
the country.
These “get rich quick” schemes are an outrage
on business decency,
and it is hoped that the post-office offi¬
cials will soon place more of these criminals in the penitentiary.
Four years ago our Executive Council changed its policy of
holding the Spring meeting of one session in New York to
meetings at some quiet place away from the diverting influence
of a large city, three days being devoted entirely to meetings
of Committees and the Executive Council.
that

the

free and full discussion and much
been

The result has been

important affairs of the Association have since had

initiated,

is shown in

new

and valuable

work has

detailed reports the Sec¬
tions and Committees will make to this Convention.
These reports indicate a vast amount of important work
which has been accomplished for your benefit during the past
year, and it, therefore, is with a great deal of pleasure that I
thank the members of the Committees, as well as the officers
of the Sections for their loyalty and the valuable time they
have so freely given in working out the problems entrusted to
them, and only regret that time will not permit mention of the
as

the

detail of their activities.
I also wish to thank the officers of the Association and the
State Vice-Presidents for their support during the year, and

particularly to acknowledge the highly efficient services ren¬
the Association by your General Secretary, Mr. Fred E.
Farnsworth, and your modest, industrious and able Counsel,

dered

Thomas B. Paton.

ftt has been my pleasure to be closely associated with Mr.
Farnsworth in the work of the Association since he was elected
Secretary
observe

three

the

years ago, and to
faithful services which

have
he

has

opportunity
rendered

to
the

Association.

During all that time he has intelligently administered the
affairs of his important office in an industrious and painstak¬
ing manner, bringing its details and organization to a high
state of efficiency to effectually handle the immense amount of
business now being transacted and at all times fully justify¬
ing your confidence in his courtesy, fairness and ability.
The office of General Counsel was created by the Executive
Council three years ago, and the wisdom of that move, and the
appointment to that office of Mr. Thomas B. Paton, has been
amply demonstrated, as he has been of invaluable assistance
to

the

and

various Committees

in view

of the Association in their work,
of his recognized expert knowledge of points on

banking law, he has been freely consulted by members of the
Association, in some cases acting as arbitrator between mem¬
bers, thereby saving costly litigation.
In conclusion, in addition to strongly urging
active, energetic
work for banking and currency reforms, there are a few rec¬
ommendations which I would like to bring to your attention.
First—That in co-operation with brokers selling commercial
paper an active effort be made to formulate a plan by which
there may be ascertained the true condition of concerns offer-

162

BANKERS'

ing their

notes in the market and
of such notes before
delivery. -

CONVENTION.

providing for the registry

Second—That in co-operation with the National Association
Supervisors and the Comptroller* of the Currency there

of Bank

endeavor made to work out an effective, simple system
uniform bank accounting which will provide

for

all

checks and

proper

safeguards.

Third—Your Federal Legislative Committee, Savings Bank
Section and National Association of Bank
Supervisors are rec-

commending the segregation of savings deposits in National and
State banks, and as a few of the States have enacted laws re¬
quiring such segregation of savings deposits and their invest¬
ment in a certain and safe
manner, it
time for our Association to appoint a

might seem wise at this
Committee with a mem¬

bership composed of representatives from all classes of insti¬
tutions to carefully study this important matter and
report
back their conclusions to

next Convention.

our

Fourth—I would also strongly recommend a meeting between
the officers and the several Committees or their
Chairmen, soon
after the adjournment of each Annual

Convention, in order to
carefully outline work for the ensuing year.
Mr. Ramsey :
Mr. President, I move that the order of busi¬
outlined between the hours of eleven and twelve, ac¬
cording to the official program of the Secretary, he declared the
official order of business for today’s session, with the
exception
that after the report of the Bills of Lading Committee on
page 12 there shall be heard the report of the Committee on
Fidelity, Bonds and Burglary Insurance.
ness

(This motion

duly seconded and parried.)

was

President:

will now listen to
General Secretary, Mr. Fred EJ. Farnsworth.

Secretary Farnsworth:
accordance

with

the

wish

details

committees from the time of

ladies,

make

arrival

our

the

carried

report

the

announcement.

out

the

local

Friday night, the
active, and they wish
on

all know, have been most
that during the convention sessions this morn¬
ing and this afternoon and on Friday, that they will serve
lemonade on the Olive street side in the
foyer. All are cordially
invited to partake.
We will not feel very much offended if
you go out to take a drink while we are
reading these dry
reports.
(Applause.)
as you

me to

announce

Secretary.

[For report of Secretary Farnsworth
The President:
lot of business.

Gentlemen,

see

page

138.]

have come a long ways to do
a
We have invited
speakers from a long dis¬
tance to be with us.
The Chair- would therefore
very much ap¬
preciate your kindly remaining in your seats until
the close
of the session.
Mr.

resolution

Huttig:

Mr. President,

I would like to offer

Whereas,

The

LOS

ANGELES

American

“TIMES” BUILDING.

Bankers’

Association is enjoying
Los Angeles at a time when her

hospitality of the city of

citizens have been afflicted with

a terrible
calamity, be it
sympathy be shown by extending practical
relief in the sum of five thousand
dollars, to be added to the
relief fund, and that this sum be
paid to the Los Angeles Clear¬
ing House Association to be used for this
purpose; and
Resolved, That this subscription be made effective at once
through the officers of the Association.

Resolved, That

our

The President:

You have

heard the resolution.

second?

Is there

Mr. Watts:
it

Mr. President and
gentlemen of the Convention,
much pleasure to arise and second the
motion of
gentleman from Missouri.
Coming from the

gives

the
that

tiful

other

times

city when it

Great

East

sistance

that

when

has

was

the

other

great

the

assistance

times

State

have

received

beau¬

was

same

as¬

bereaved
which re¬

same

sympathy

suffering that is found in the hut or the cottage, I take
great pleasure, upon the part of all these bankers, whom I claim
to
represent,
in
seconding the resolution, and asking the
unanimous consent of this Convention for
its adoption.
I
thank you.
(Applause.)
The President:
Gentlemen, you have heard the resolution
Mr.

who

three

have

come

than

Auditing Committee.
Mr.

Livingstone: I move that a committee
as an Auditing Committee.

of three

pointed

be ap¬

(Motion seconded, put and carried.)
The President:
The Chair will appoint as such
Committee,
Charles E. Warren, of Neyr York; F. J.
Woodworth, of Cleve¬
land, and D. McK. Lloyd, of Pittsburgh.

Report of General Counsel, Thomas B. Paton.
The next order of business will be the
report of the General
Counsel, Thomas B. Paton.
Mr. Paton:
Mr. President, Members, Ladies and Gentlemen :
A lawyer’s report carries with it the
presumption of being a
very dry document, and yet there seems to be no other method
of presenting in a specific
way the character of the work which
the general counsel has performed
during the past year. As I
am quite anxious that
you should get some general Idea of this
work, I trust that you will bear with me for a few moments
while I read this report, which I
will, however, considerably
curtail.
I might say that since the last
year

glasses, or glasses have come to me.
[The report of the General Counsel

will

I have
found

come

140.]

page

The President:
Gentlemen, our speaker for the morning
session, Mr. Irving T. Bush, has arrived, twenty-two hours
late,
and he has not yet been to his
hotel, and we have suggested
to him. that, if it meets with
your unanimous approval to so
change the order of business, we would have him speak this

preceding the address
by Mr. Rhett, of Charleston, S. C. So at that time, and from
three o’clock, you will have three excellent
addresse,. one fol¬
lowing another, and we hope that not only will all be present
but bring with you other bankers, so that
they may also enjoy
these
the

addresses.

Chairman

We
of

will
the

have
Executive

now

very short report from
William
Council,
Mr.

Livingstone.

Report of Chairman of Executive Council.
Livingstone

:
Mr. President, so much has been published
business of the Executive Council, that I have deemed
it unnecessary to go into a voluminous
report, merely touching
on the important points
of interest which have been passed upon
and acted upon by your Executive Council
during the last year.
[The report of the Executive Council will be found on page

of the

148.]
Mr.

I therefore move that this amendment
Livingstone:
by the Executive Council be adopted.

recommended

CONSTITUTIONAL AMENDMENTS.
The President:

You have heard the motion, gentlemen.

Is it

seconded?

Mr. James : Mr. Chairman and Gentlemen of the Convention :
I would be very glad to take the motion as the Chairman
of the
Executive Council has stated it,* and
probably his statement
the

entire

matter, except in this, that either by typo¬
at the beginning of the first section or by a
mis-statement of some kind there has been an erroneous

covers

error

ing of this section.

ciation

and the General Counsel.”
It was erroneously stated
heretofore “five members of the Association, of which the Gen¬
eral Counsel shall be one.”
The General Counsel is not a mem¬
ber of this body ,and therefore that was an erroneous state¬
ment.

correct

at the General

geles, cannot remain seated in

thing to endorse the

motion would now be in order.

print¬
At yesterday’s session of the Executive
Council that correction was authorized, but probably under our
rules it will have to be again authorized by this
body before
action upon the general proposition, for the reason that the
condition of things as printed is that which comes before this
body. I therefore request that the gentleman incorporate with¬
in his motion, as an amendment to Article IV of the amend¬
ment, on the top of page 24, so that that clause shall read:
“A Law Committee, consisting of five members of the Asso¬

the

Pennsylvania

the heart of every American banker is that

and it has been seconded.
Mr. Dimse: (New York)

Such

this

by pestilence; coming from that

for

President,

our

of New

York,

thousand

miles to Los An¬
seats without saying some¬

motion and approve of the resolution which
has been presented.
New York has always come to the front
In a case as is presented to us
now; and I therefore, on behalf
of the delegates from New York, second the motion also.
The
President:
Gentlemen, you have heard the motion.
You have heard the seconds.
Are you ready for the question?

of three.

graphical

by its flood; coming from the American continent,
ceived assistance at a time when the Pacific
slope was in dis¬
tress in its great metropolis of San Francisco
; feeling, gentle¬
men, that a little suffering makes the world
akin; feeling that

Annual Report of the Treasurer.

Southland,

received

beset

Treasurer, Mr. P. C.

[Treasurer Kauffman’s report is printed on page 143.]
The President: r Gentlemen, at this
period, It is customary
upon motion for the Chair to appoint an Auditing Committee

Mr.

DYNAMITE

We hope

Kauffman of Tacoma.

SUBSCRIPTION FOR BENEFIT OF SUFFERERS
FROM THE DESTRUCTION
BY

of the

At 12 :15

afternoon after Dr. Wheeler’s address and

Annual Report of the

the

that all who can will listen.
We will now have the report

The

(Motion put and carried unanimously.)
To the gentlemen who are leaving:
we will have an
interesting address on the currency.
The President:

that a change was recommended
yesterday
Council, that it should consist of five members of

the Association and the General Counsel.

If the gentleman will
incorporate that in his motion, I shall be glad to second it.
Mr. Livingstone :
Yes sir, it was intended to do so. It went
into the record yesterday, and it was taken for granted that It
would be passed by the Association in conformity with the ac¬
tion of the Executive Council yesterday; in other
words, that

instead

of the General Counsel being a member of the com¬
ex-officio, he would become an active member, increas?
ing the committee from five to six.
mittee

SECTION.

BANKING
Mr. James :
Under the circumstances I fancy, however, that
it will be necessary to ask the unanimous consent of the Asso¬
ciation for that change to be made.

Commission has asked the courtesy of unanimous con¬
the report of the Currency Commission which will
be read by him, may be rendered to you at this time.
It only
covers about three paragraphs, and if there is no
objection it
will be so ordered.
J. B. Forgan, gentlemen.
rency

that

sent

The President:
You have heard the motion, which has been
seconded, relative to the change suggested in the constitution
of the Association.
Is there a unanimous consent to the adop¬
tion of that resolution

as presented?
President, I rise to a point of order. While
I favor the adoption of the amendment of the Constitution
as prepared by the Committee, and it will probably be
adopted
without dissent, at the same time in order to observe the or¬
derly proceeding, I call your attention to the fact that “Amend¬
ments to the Constitution” is made a special order of business
for Friday, October 7th, second day’s session.
It is proper for
the Chairman of the Executive Council to report as he has done,
but for the Convention to take action is probably improper.
It
occurs to
me that there may be some one
desiring to speak
upon this subject, and to speak upon this subject in order in
which it is presented on the program.

Mr. Watts

Report of Currency Commission.

Mr.

The President:
is well taken.

163

Mr.

Forgan then read the report as follows :
report of the Currency Commission will be found
154.]

[The

page
The President:

You have heard the report, gentlemen.

You
reports which have been rendered this
morning.
It will be in order for those reports to be received
and placed on file.
Is there a motion to that effect?
Mr. Hyde :
I so move.
Mr. Lloyd:
I second the motion.
(Motion put and carried.)
The President:
The time for adjournment according to the
order of business has now arrived, and I therefore declare the
meeting adjourned.
have

The Chair will rule that the point of order
adopted earlier in the session a regu¬

You have

heard

other

the

lar order of

business, which appears on the program, in which
subject of amendment to the Constitution is provided for
at the morning session on Friday, and the matter will then
properly come up.

AFTERNOON SESSION.

the

Mr. James

view of

this morning and

the

fact that

have

Bills

will be

busy on Friday, I move that the order of business be suspended,
that the approval of Constitution amendments be now au¬
thorized by this body.
Mr. Kauffman :
I support that.
Secretary E'arnsworth: The Chairman of the Council took
action

Atlantic
It is
I

recommended in

his

after
in

report, and I suggested to him that
to bring up his amendment was

proper time
finished his report,

making

this

tation, and when

being

allude to

tee.

The
of

President:

Gentlemen,

you have heard the
of this regular order

the

statement

Secretary.
The idea
coming in
Friday was that all amendments might be taken up, and
you now have before you a motion that the regular order, as
adopted earlier in the session be suspended, and that we now
take up the consideration of amendments to the Constitution.
That will require a two-thirds vote.
Are you ready for the
question ?
on

Mr.
nor

Watts

have

desire to

press

point of order,

have I

the

any desire to oppose any measure of the Chairman
Executive Council and the Chairman of this Committee

regarding

its disposition.
I shall vote for the amendment
and it receives my hearty approval; hut I candidly believe that
it is a bad precedent for a body of this kind to adopt an order
of procedure—an order of procedure that is published and pre¬
sented to every delegate, and every delegate at this Convention
bases his attendance at the Convention upon that order of

procedure—he bases his attendance
those

times

when

most

that he

interested.

attend at

may

not

desire

specifically to apply my point of order to this one amendment
to the Constitution, but I say again that it is an exceeding
bad precedent for such a body as this to open such important
matters as changes of its Constitution to change the program
In such a way that it may be taken up—those subjects may be
taken up when they are not expected to be discussed and not
expected to be passed upon by the membership.
The President:
Gentlemen, the Chair has been pleased to
allow the courtesy to Mr. Watts to make his statement an
argument, but the question Is not debatable. Are you ready for
the question?
(There were calls for the question.)
All those
in favor of taking up the amendments out of the regular order
and having them considered at this time, say aye.
Contrary,
no.
The Chair would say that the motion appears to be lost.
.

The motion is lost.

Annual Report of Standing Protective Committee.
The next

regular order of business will be the annual report
It is a highly interest¬
ing report and It Is not long. It will be read by the Secretary,
of the

Standing Protective Committee.

Mr. Farnsworth.

I do not believe it will take

than four

five minutes.

[The
found
The

think

report of the
page 144.]

Standing Protective Committee

will

President:

Gentlemen, the Vice-Chairman of the Cur¬

the

essential

[The report of the Bills of Lading Committee will be found
page 149.]
Hollister:

Mr.
,

include

would

like to ask the permission of the
part of the report of this Committee, to
paper prepared by Mr. Kent, entitled “Analysis of

Convention also,
Methods

advice.

I will

also read the report of the sub-commit¬
part of that report is the letter
which was drafted and sent to the
foreign bankers in response
to their action which was taken
declining to cash these drafts
under bills of lading on export cotton
shipments; and this let¬
ter is a very careful summing up
of the entire situation from
our standpoint

of his report.
Now,
suggestion and expec¬
the order of business in putting
a part

program, that was the

amendments, it had reference to the two amendments
which were passed on yesterday, and in our order of business
(owing to the meeting of the Organization of Secretaries which
takes place tomorrow).
The amendment to the Constitution
ar plying to the section of Secretary should should be acted
on on Friday instead of today.
That is the reason why that
was put in there,
to provide for the two amendments which
were acted on yesterday.
But I want to clear the Chairman
of the idea that he was wrong, because he was
acting on my

Report of Bills of Lading Committee.
Mr. Hollister

the

Express Companies and Money Orders.
That, I believe, is
presented by Mr. James, of Pennsylvania.
Is Mr. James
present?
(No response.)
We will come back to that report
then, and proceed with the report of the Standing law Com¬
mittee, Mr. Field, Chairman. Is Mr. Field in the room?
(No
response.)
Gentlemen, Mr. Hollister, Chairman of the Bills
of Lading Committee is here, and his report will be in order.

The amendment was passed at
The Chairman makes a report here today as
the Executive Council and reports this amendment.

thought the

Lading, by the Chairman, Mr. Clay H. Hollister.

to be

City.

Chairman of

we will come to order.
The
be the report of the Committee on

<*n

my suggestion.

Gentlemen,

business will

he is not present, we will call for the report of the Committee

and

this

President:

first order of

nothing else

losing time, and that

are

The

and

as a

Conditions

Under

which

Cotton

Bills

of Lading
help
complete our
record of the proper literature bearing
upon this subject.
The President:
You have heard the report of the Bills of
Lading Committee. What is your pleasure?
Mr. Hardy:
In regard to the report which we have just
heard read, I wish to offer the following preamble and reso¬
Are

Issued

lution

and

Accepted.”

This

will

We,

the American Bankers’ Association in
sembled have received report of their Bills of
tee

convention

as¬

Lading Commit¬

and

hereby ratify and approve of their acts.
We believe
principle laid down by them as fundamental that.the
•railroads of the country in issuing bills of lading shall be re¬
sponsible for the acts of their agents, is entirely sound.
We commend their efforts toward suitable legislation as ex¬
emplified in the Stevens Bill now before Congress, and empower
them to use all legitimate means for
having that measure finally
adopted and made into law.
We approve, as a well devised expedient in
dealing with ex¬
port shipments of cotton, the validating plan which has been
adopted to facilitate the handling of the cotton crop this fall,
and wre urge the extension of this practice for all bills of lading
that the

used

instruments of credit.

Now, Resolved,

that we continue our Committee and sub¬
committee with instructions to work for such permanent legis¬
lation, both State and national,- as will make the bills of lading
offered

banks

security for loans

advances

safe and

desirable collateral.
I don’t thiuk that the Association has a Committee that has
done more valuable and effective work for its members than this
Bills of Lading Committee.
The railroads have been a little
reluctant to accede to the wishes of the Committee as to their

responsibility for and the form of bills of lading. But a thing
of that sort cannot be accomplished in a day.
It has to be a
matter of a campaign of education.
So far as the expedient
which has been resorted to in regard to validating the bills of
lading is concerned, it should meet the situation fully.
It is
an admirable plan, and the trial of it will
result, I am satis¬
fied, in its general acceptance.
Those most closely in touch
with the situation so far as foreign banks are
concerned, are
satisfied that it will work itself out, and that we of the
South,
who are particularly interested in the financing and handling
of the cotton crop, will not have any serious
difficulty in mar¬
keting our commodity.
They need our cotton quite as badly
as we need their money, and we will have to
get together on
some mutual ground that will be
satisfactory on both sides.

164

BANKERS’

CONVENTION.

I move you, Mr. President, the
adoption of the preamble and
resolution.
Motion seconded, put and carried.
The President:
The next in the order of business will be

the

report

the

Committee, Mr. John

Fidelity Bonds and Burglary
L. Hamilton, Chairman.

Insurance

United

authorized by the Acts of July 17 and Au¬
The early issues of paper money from 1861
until 1876 were made under contracts with
various bank note
companies. After that date the Bureau of Engraving and Print¬
ing commenced the manufacture of United States paper money.
Our paper currency originated not from choice but as a

146.]

page

Mr. John R.

Lindsbury: (Kansas) Mr. President, I move the
adoption of the report of the Committee on Fidelity Bonds and
Burglary Policies, as read by Mr. Hamilton, with a vote of
commendation

the

Committee

for the considerable detail
continuance of the Committee as
one of the Committees of the American Bankers’
Association.
The President:
You have heard the motion.
Is it supported?
Mr. Bolton :
I support the motion.

work; this motion to include

(The motion
The
then

was

duly put and carried.)

President:

Gentlemen, there is one short report and
through with that order of business. It is the

are

necessity, essential to the very existence of

our

government

and necessary for its

Fidelity Bonds and Burglary Insurance Committee.
on

was

1861.

measure

[The report of this Committee will be found

States

gust 5,

of the Committee on Express Companies and Money
Orders, and will be read, at the request of the Chairman, by
Mr. James, of Pennsylvania.
report

salvation.
Since paper money became a
circulating medium there have
been many changes in design
and distinctive character of paper
used.
Bank note engraving as applied to our securities is

purely

American

comes

product, and

near

other

institution

the

world

furnishing, from artistic and mechanical
points of view, a perfect circulating medium as does our Bureau
of Engraving and
Printing at Washington.
Strange to relate, China recently decided to again issue paper
money, and after a thorough investigation of methods in use
in other countries decided to
adopt cur American bank note

engraving method as offering the best security in circumvent¬
ing counterfeiting, and the paper they use is made in the mill
where United States Government
paper Is made and is similar
to our paper, minus the silk fiber.
Thus what a transition from 1275 to 1910!
What a
ment to us as a nation and to the skill and
thrift

compli¬
of

our

artisans !

Report of Committee

Bank

Express Companies.

note steel engraving is the perfection of the
printer’s
applied to securities.
In no other form of
printing can
the beautiful soft and yet
strong effect in black and white be
obtained as in steel engraving.
The introduction of mechanical
process work aided by photography has made
counterfeiting of
our
notes
now
possible.
To circumvent and make more
difficult the counterfeiting of our paper
money, the Secretary
of the Treasury, who has given the
subject much thought
and
study,
recently appointed a
committee consisting of
the United
States
Treasurer, the Director of the Bureau
of Engraving
and Printing,
and the Chief of the United
art as

[The report of this Committee appears
Mr.

James:

on page

153.]

Mr.

Chairman, I move that this report be
ceived and filed and the Committee continued.
The President:
You have heard the motion, gentlemen.

re¬

it supported?

(Motion seconded, put and carried.)
The

President:
We are particularly favored,
gentlemen, in
having with us this afternoon the Treasurer of the United
States, and I wish to take this opportunity to introduce him
to you, particularly as I know that he has with him a
message
for you which you will all be glad to hear.
I would introduce
to you the Hon. Lee McClung, Treasurer of the United
States.

Address of Lee

McClung, Treasurer of the United States.

Mr.

McClung: Mr. Chairman, and gentlemen of the Conven¬
tion :
Nothing is great or small except by comparison. The
subject of my talk this afternoon, the suggested change of size
of the

United

States paper currency,

is small when compared
general monetary reform proposition.
At the same
time, any manner of scheme which will improve the currency
of any nation of the world and
bring about the possibility of
clean currency for the people of the
country to handle, is in
with

the

itself

no small matter.
Before speaking of that small matter, however, I should like
to read a friendly word of greeting from the President of the
United States.
Since arriving at Los Angeles I
(Applause.)

have

received the following telegram, dated the White
House,
Washington, D. C., September 30th, and signed William H. Taft.
i,

“Please

•

bankers,

present my compliments and
and express to them the hope

years we

may

have

ing laws, which is
SUGGESTED

a
so

good
that

satisfactory revision of
much needed.”

wishes
within

the

American
next

two

currency

and bank¬

UNITED

STATES

our

(Applause.)

REDUCTION

IN SIZE OF
PAPER CURRENCY.

Money is a standard by which wealth is measured, and is the
by which one kind of wealth can be exchanged for

means

another.

Money is older than history, and the kind of money employed
by a people is not an unfair measure of their civilization.
Originally skins secured in the chase served as money.
As
advanced cattle became a standard of value.
Among
ancient German codes fines were expressed in cattle, oxen were

man

units

value,

and

sheep

decimal parts.
From skins,
cattle and shells to metal was a big step and it took a
long
time to take it, but in time • metal took the
place of other
tokens.
Lead, tin, copper and iron have all been employed as
money, but in time the commercial world recognized that the
precious metals, gold and silver, were the ones best calculated
for

were

coinage.

Then

at last came paper, which, like the other kinds, has
been indifferent and good, but its
advantages are so patent that
It has become recognized as a
necessity.
Paper money is of

great antiquity and originated first in China.
Marco Polo de¬
scribes it as having then been used extensively since the begin¬
ning of the Ninth Century. The emission of bills by the Colo¬
nies and the banks was not regarded with
favor by England,
and the Provincial Governors were
generally opposed to those
issues.
Various acts were passed restricting their use, but with
little results.
Parliament in 1751 abolished legal tender for
paper money in the Colonies, and in 1763 declared
any issue
void.
The Revolutionary War brought about a
change, and the
second Continental Congress,
in order to raise funds—and lack¬
ing the power of taxation—naturally turned to issuing paper
money.
The first paper money ever issued

by .the Government of the

States

Secret

Service.

This

Committee

has

been

ac¬

tively at work for some months preparing designs which will
incorporate ail of the essential features, including legibility,
security, distinctiveness and artistic merit.
Our work has also
included

consideration of the reduction in the size of
notes,
and it is to this particular feature that I
today address myself.
The present dimensions of our
paper currency are approxi¬

mately 7%

inches long by 3 inches wide. This size the public
become accustomed to, and it is the only size, with the
exceptional fractional currency, which is no longer issued, that
has

have

'same

ever

time

thing

used in connection with our paper
money.
are not a nation to continue
indefinitely

At the

doing

certain way merely because it has always been done
that way.
I think our duty is rather that if an existing way
is the best way, to continue it; if for
good and sufficient reasons
a better way is conceived, to
adopt the better way. It is now
proposed to reduce the present size by 1% inch in length and
by % inch in width. This reduction in itself is really slight,
and yet when there are considered the
advantages that will re¬
sult we would surely be regarded * as a
prejudiced people if
we were not willing to give the
most open minded consideration
to the reasons put forth in support of the so-called reform.
Perhaps the keynote of the present administration is economy,
and in effecting a small reduction in the size of
paper currency
there will be afforded an opportunity of
saving to the Govern¬
ment $612,000 a year.
From time to time we hear criticism of
the operation of governmental affairs, based on the belief that
in many respects their methods are not
up-to-date, if indeed
they are not obsolete; and in the present case, when we of the
Treasury are endeavoring to improve business methods and sug¬
gest a plan whereby appreciable economy may be realized,
and bring forth such a proposition as this
one, we feel that we
should have the support of the public, provided the
public it¬
self is not to be adversely affected or
unreasonably inconveni¬
a

enced.

In this instance it is our belief that the
public will not
adversely affected or unreasonably inconvenienced. It would
not take long for the public to adapt itself to the smaller
sized
currency, and I feel justified in prophesying that if the small
sized currency is adopted and extensively handled it
will not
be twelve months before public opinion decrees that a
decided
change for the better has been made.
The proposed size is
smaller than a great many notes used
by some foreign countries,
and on the other hand it is larger than the notes of other
foreign countries.
I have with me some samples of notes
used by European countries and samples of some notes used
by
be

South American countries in support of my
The
statement.
size proposed for our currency is identical with that in use in
the Philippines, and in a recent conversation that I had
with

the Chief of Insular Affairs in the War Department I was ad¬
by him that he had never heard any complaint in the
Philippines because of the size, but on the other hand the
vised

adop¬

tion of the smaller size seemed to meet with universal
favor.

Since publicity has been given to the fact that the Govern¬
question of changing the size

ment had under consideration the
of paper currency the Treasury

Department has received many
business people expressing views on
the proposition.
Most of them have been favorable, but some
have been unfavorable.
There have been brought forward three
letters

from

bankers and

BANKING
alleged objections to the adoption of the new currency : first,
that the small size paper money cannot be as easily handled
by cashiers, tellers and others as readily as the present size.
Our own experience and our inquiries of local Washington
banks have tended to disprove this.
Second, that a reduction
in size will necessitate changes in cash drawers, money com¬
partments and tills of banks and business houses; but that
alleged objection fails to carry weight when it is understood
that there is no existing compartment which will not readily
contain the new or smaller sized money.
If the proposition
were to enlarge our currency instead of reducing it the situation
would naturally be different.
Third, it is claimed that for a
long time there will be in circulation two different sizes of
currency and that this will be very annoying.
It is true that
for a certain, or rather uncertain period, there will be in circu¬
lation two different sizes of money; but as it will be our inten¬
tion to prepare beforehand and have in stock an ample supply
of the new money it will not take long for the novel notes to
supplant the old or larger notes.
It is our belief that within
twelve months after, the inauguration of the scheme the pres¬
entation of large notes will be exceptional.
Naturally there
will be quite a desire on the part of the public to secure pos¬
session of the small, attractive notes, and within a short period
we will undoubtedly find old notes being turned in rapidly for
redemption and in many cases also withdrawn from circulation
by collectors. It should be remembered also that a number of
European countries not only have two different sizes of notes,
but actually have a different size for each denomination, and
this condition with them is not temporary, but permanent.
Even admitting, however, that there would be for us a slight
inconvenience in the handling of so few as two different sizes
of currency, I cannot refrain from expressing the opinion that
temporary inconvenience should never be allowed to stand in the
way of permanent economy and progress.
If we did permit such
a condition,
surely our advancement as £| nation would often¬
times be retarded.

might go into detail as to the basis of the estimated sav¬
ing to the Government of $612,000 a year, but this I shall not
do except to say that the economies are based on the saving
primarily in labor and in quantity of paper.
Under the pro¬
posed arrangement five notes will be engraved on a sheet of
paper from which now only four notes are made.
I

applied to United States notes.
however, that if any change is made in the
size of United States notes, a similar change will be made In
the size of national bank notes, so that as a permanent condi¬
tion all of our paper currency will be of the same dimensions.
There are in existence at the present time about 12,000 plates
for national banks, and if the same number of new plates with
new designs were to be made the cost, at $75 per plate, would
approximate $900,000. It would doubtless be a hardship for a
good many of the banks to assume this charge, and yet on the
other hand the aggregate amount would constitute a very large
charge against the United States Government if it should pro¬
vide for the manufacture of new plates.
In considering this
What I have said above has

expected,

phase the suggestion has been made that a uniform national
bank note be adopted which would do away with the name of
each bank of issue.
For the purpose of retaining some defi¬
nite mark of identification of the bank of issue the character

might be printed thereon by a process separate and dis¬
original engraving process. Such an arrangement
would permit the Government to retain on hand an ample sup¬
ply of uniform national bank currency, available at any time
for any banks of issue
Under our existing scheme the Treas¬
ury Department has on hand in its reserve vaults a large sup¬
ply of bank notes of every bank of issue, and it not in¬
frequently occurs that the Department is called upon to de¬
stroy notes which have been so prepared by reason of the fact
that a certain bank has gone into liquidation.
The loss to the
number

165

SECTION.
tion

the

public and the banks situated in cities and towns
is no subtreasury.
In those cases in order to
secure new bills for old it is necessary for the banks to ship
their unfit money to Washington for redemption, paying trans¬
portation charges both ways, when shipped by express, and in
addition, pending the return of the shipments they are with¬
out the use of their money.
The proposition is hereby sub¬
mitted that an improvement in this condition might be made
at the same time that there is adopted, if it is adopted, the
of

there

where

sized paper currency.
As before stated, the estimated
saving to the Government in the latter case is $612,000 a year.
If the Government should be willing to expend a part of this
saving in very materially improving the condition of paper
money and in circulating and maintaining a higher standard
through the assumption by it of transportation expenses on
redemption money, then it seems to me that a step will have
smaller

been

taken

which

will

redound

the

credit

the

Govern¬

and convenience of the public.
Your general co-operation in aiding the Government in solv¬
ing those interesting but perplexing problems is invited, will
be welcomed, and will receive every convenience.
The President:
I am sure we are greatly indebted to the
Treasurer for his enlightening remarks on the size of the new
bills as proposed, and the laundering of the old bills.
We
have this afternoon a treat in the way of speakers.
As ar¬
ranged this morning, you will remember, Mr. Bush, who was=
to speak this morning, will follow with an address immediately
after the address by Dr. Benjamin Ide Wheeler, President of
the University of California, whom it is my pleasure to intro¬
duce to you at this time.
Dr. Wheeler.
ment and to the advantage

The Banker

as a

Public

Servant, by Benjamin Ide Wheeler,
University of California.

President of the

[Dr. Wheeler’s address in full will be found
publication.]

page

128 of

this

The

President:

following telegram

This
:

Have converted three

morning your President received ti.e
“Nineteen hours late, but coming strong.
Indians and

Mexican.

Don’t

let

your

members escape.”

Before introducing to you the sender of that
telegram I wish to tell you also that immediately following his
address, which will be brief, you will be favored by an address
by one of the banker orators of the South, and that it will pay
you all to wait and hear him.
I now take great pleasure,
gentlemen, in introducing to you Mr. Irving T. Bush, Chairman
of the Currency Committee of the Merchants’ Association of
New York, and in introducing Mr. Bush I wish also to say to
you that the Merchants’ Association did in 1907 invite twentyother commercial organizations to appoint similar cur¬
seven
rency commissions, and that in that organization committee was
Mr. Bush, who has the honor to be the Chairman.
I introduce
to you Mr. Bush.
Mr. Irving T. Bush:
Mr. President and gentlemen of the
American Bankers’ Association:
If, amid the arid plains of
Arizona it has been possible for me to convert three Indians
and a Mexican, my imagination trembles at what I may do here
in this wonderful climate of California.
If I may depend upon
the truthfulness of my California friends—and I hasten to
say at once that I do—a tiny seed planted today should bloom
in a night into a currency reform system of ideal proportions
tomorrow.

tinct from the

Government last year in the manufacture of notes which were
never
used and cannot be used was $40,000.
There will be
various

important matters of detail to be

considered in connec¬

with the proposed adoption of a uniform national bank
note.
The suggestion has been made that the United States
Government should practically assume the issue of national
tion

by
deposits of United States bonds.
The Treasury Department
welcomes suggestions from bankers and others interested in
financial affairs regarding a proposed uniform national bank
currency.
Naturally this matter touches the Government’s
whole monetary scheme, and this now is the subject of a most
comprehensive and exhaustive investigation on the part of the
National Monetary Commission, and that body before making
its final report will doubtless give its fullest consideration to
all propositions and suggestions submitted.
There is one point more that I desire to mention.
There
is always a cry throughout our country for a cleaner paper
currency.
The people who are supplied with such currency
received from banks located in subtreasury cities have perhaps
little cause for complaint regarding the condition of money.
This is true because the subtreasuries are redemption agen¬
cies of the Government, and banks or individuals presenting at
the subtreasury unfit currency may receive in return therefor
new money.
The story is different, however, with that propor¬
bank notes

Needed

Banking and Currency Reforms, by Irving T. Bush.

[Mr. Bush’s paper will be found on page 121.]
The President:
Gentlemen, we will now be favored with an¬
other currency talk by the Banker Orator of the South to whom
I referred a few moments ago.
Before introducing him to you
I wish to say that he has probably traveled farther to attend
this Convention than any

other banker here, and I bespeak for
closest attention.
a great
deal of pleasure in introducing to you Mr.
R. G. Rhett, President of the People’s National Bank, Charles¬
ton, S. C.
(Great applause.)

him your
I take

A Southern Banker’s View of the

Currency Question, by

R. G. Rhett.

provided that it would be protected then as now

[The address in full of Mr. Rhett will be found on page 130.]

Gentlemen, there are a few announcements
Secretary wishes to make, which will detain you just
a moment, the first of which would be to let you know that on
Friday morning you will have a continued discussion of the
currency question.
Senator Burton, of Ohio, one of the most
prominent members of the Monetary Commission, has finally
consented to be with us at that time.
His address is placed on
the program for ten thirty; the chances are it will be reached
earlier than that time.
Mr. Secretary, I believe you have some
The President:

which the

announcements.

Farnsworth:
There is a letter here from the
Company regarding sleeping car accommo¬
dations.
What is stated by the Southern Pacific relative to
this matter may apply to the various other lines, as some of
the special trains I understand have been abandoned.
The
Secretary

Southern

Pacific

Southern Pacific says,

“Would appreciate the favor very much

166

BANKERS'

if you could
arrange at the close of this afternoon’s session to
notify visiting bankers who will return via our line individu¬

ally, to

their

secure

sleeping

reservations

as early as pos¬
couple of special trains
were released at this
point, and we will therefore have quite a
number to take care of, which we will
do, arranging for what¬
ever
extra equipment is
necessary.”
Now, in regard to the
certification of railroad certificates—that is an
important mat¬
ter.
Those of you who have railroad certificates that have
to be validated or
countersigned should give this attention.
This comes from Mr. Fitzwilson, who has taken
charge of the
railroad end of it, and has prepared the literature which has
been sent out from time to time.
“It is important that those
attending our convention hold railroad certificates which were

sible.

It is

our

car

understanding that

issued in connection with fare and one-third for the round
trip,
turn the same into registration

headquarters of this Association

promptly

as possible.
It is necessary to collect fifty of
certificates before the attendance of the parties holding
the same can be certified to.
When this is done the railroad

these

agent in this city will be advised, and he in turn will notify
all railroad offices that these certificates may
be honored, there¬
by allowing the holders of same to secure a rate of one-third
fare

for

the

return

trip.
These certificates were issued prin¬
cipally in the Pacific coast States section.”
All delegates from the States of
Washington, Idaho, Oregon
and California who hold receipts for railroad tickets
purchased
on the certificate plan,
are requested to leave the receipts with
Assistant Secretary Fitzwilson at the registration
office, Hotel
Alexandria, as it is necessary that fifty or more receipts be ex¬
hibited by him to the railroad authorities in order to obtain the
reduced rate for the return trip.
The local committee has asked

to state in connection

jvith

their

telegram to the effect that unusual facilities have been
extended by the United States Long Distance and Pacific Tele¬
phone Company, also Home and Pacific Telephone Companies
for local service, as follows:
“In your official program you
fail to give the Home Telephone Company any credit for what
they have done for us.”
I will say that if that information
does not appear in the official program it is because we did
not receive it, because we were very particular to have
every¬
thing incorporated. He further states, “Let me explain further
that we have in this city the Pacific Telephone
Company, usu¬
ally called the Sunset (The Bell) which owns both local and
long distance ’phones; also the Home Telephone Company,
which is a local opposition company operating local
telephones
only, and the United States Long Distance Telephone Com¬
pany, which is an entirely separate corporation and operating
in opposition to the Pacific long distance.
I make this long
explanation to familiarize you with the different companies.”
Remember, gentlemen, the business session of the Trust Com¬
pany Section all day tomorrow in Berean Hall, which is one of
the halls in the front of this building, and the Organization of
Secretaries, which is held in Choral Hall all day tomorrow.
The Savings Bank Section meeting Thursday, October
6th, in
Berean Hall in this building, and the Clearing House
Section,
which meets in Choral Hall on Thursday, October 6th—some of
the programs say Friday.
Whether you are delegates or not
you will be welcome there, and there will be some very excel¬
lent papers and addresses on the program.
That is all, Mr.
Chairman.
The

President

The next regular order of business

the

program is the roll call of States.
Mr. Pretson:
Mr. President, the

four is late, and I would
suggest that we dispense with that.
I move that we dispense
with the roll call of States, and request the vice-president of
each State to hand in his report, to be incorporated in the pro¬
ceedings of this Convention.
(The motion was duly seconded and carried.)
RESOLUTIONS

The President:
program,
seems to

but
me

THANKS.

That concludes all the business that is

would

the

bring

your attention that it
it is desirable at this time to have the Chair ap¬

point a Committee on Resolutions, so that proper resolutions
might be shaped up thanking the various committees in this city
for the magnificent entertainment which we have received, the
speakers, and other appropriate resolutions usually adopted on
occasions of this kind. The Chair will be glad to entertain such
a

motion.
A

Delegate:
appointed.
(This motion
The
Mr.

make

was

President:

the

motion

that

such

committee be

duly seconded and carried.)
The Chair will

appoint

that Committee

Gurney, of Fremont, Nebraska; T. R. Preston, of
Chattanooga, Tenn., and Mr. Alfred Spencer, Jr., of Hartford,
Conn.
Is there any further business?
If not a motion to ad¬
journ is in order.
On motion, duly seconded, the Convention adjourned.
Louis

Pierson,

will be
Pastor

Chairman:

President, in the chair.

Friday, October 7, 1910.

Gentlemen, our proceedings this morning
preceded by an invocation by the Rev. Charles E. Locke,

the First Methodist Church of

Dr.

Los

Angeles.

Locke:

Father,

Let

and

unite

Almighy God,

prayer.

our

Heavenly

into Thy divine presence in the midst of the radiant

come

beauties of this

day, recognizing Thee

new

perfect gift.

We have not the courage,

giver of

good

every

Father, to go into
the responsibilities of this day without
asking Thee for Thy guidance
and for Thy blessing.
We thank Thee for life and liberty and the
pursuit of happiness.
We thank Thee that we were born into this
world of beauty and of
opportunity.
But, our Father, we are not
our

equal to all these responsibilities unless Thou dost
and make

strong where

Father,

our

Tittle

We put our hand into

child

day will briug forth.
workmen; tomorrow the
slain.

Our

Father,

ask Thee to

that

makes

Thee,

our

would

help

for

disorder

spread

life, and

one

to Thee.

and

may

talent

Help

the

building in ruins, and

same

put

hand in

our

and

lives

our

in
men

Thine

of the

men

children,

and

many

little

for law and order and for

everythiug

happiness

and prosperity; and we pray
paralyze the arm of anarchy, that

wilt

the

midst

this

our

morning, that

consecrate

five talents,

into

we know not, our Father, what
This day a magnificent building, filled with

Father, that Thou

morning, teach these

character,

into

us to stand

peace

come

We look up into Thy face,
face of its father or mother.

weak.

are

Thy hand, for

republic.
money

Teach

this

is not the whole

ourselves

may

today; whether we are men
this day dedicate these talents

us to realize that money

unless it

service.

And

dear

God, Thou

thou

faithful

is
so

is not anything unless it buys
manhood, unless it buys privilege, sympathy,
help us to invest our talent that in the end,

canst say to us,

servant.”

Dear

to thy faithful sons, ‘‘Well done,
we thank Thee for this asso¬

Master,

ciation of business men, of honest
men, of successful men, who have
come from their distant homes to meet with
us here in this beautiful
land.
And may they, in the midst of the turmoil
of the day see
always before them the highest ideals of the Kingdom of
Christ, so
that we may all endeavor to
reproduce in our relationships together
as fellow men those
things that will make strong our lives and make
useful

characters.

Wilt Thou bless them while they continue to
and wilt Thou give them safe conduct back to their
homes far away.
So may we live, so may we consecrate ourselves in
the spirit of love and in the spirit of
sacrifice, that in the end we
shall assemble in the great congregation
which shall never break up,
on the green banks of the eternal Eden.
Forgive us all our sins, keep
us in peace and in service.
We ask it in the name of Jesus
our

work among us,

Christ,

Lord.

our

Amen.

The President:
be to

clean

The first order of

business, gentlemen would

the unfinished matter that was left over from
Tuesday’s session, namely, the report of the Standing Law
Committee, Mr. William J. Field. As Mr. Field does not seem
to be here, the next will be amendments to the
Constitution.
up

As Chairman of the Executive
Council, I would ask Mr. .Tames,
of Pennsylvania, if he will not,
kindly take charge of the
matter.

AMENDMENTS TO CONSTITUTION.
Mr. James
The

Mr. President and gentlemen of the Convention

amendment

proposed at the Atlantic City meeting of the
Executive Council, and by them recommended for
adoption by
this body, was duly printed under the
authority of the Consti¬

tution in the Official Journal.

It is also

program which
you have
in
amendment is somewhat long

your

printed in the official
hands, on page 25.
The
and carries with it a secondary
amendment which was also reported favorably at a
meeting
of the Executive Council at the period of this
meeting.
I do
not deem it necessary, sir, to read this, as
every member has.
it in his possession.
It merely supplants Article IV by a new
article upon the same question, outlining the
powers and duties
of committees, giving the appointing power of
committees, the
duration of their term of office, and the limitations of their
Heretofore the times

power.

existence

committees

and

all

things relative to them have been uncertain, vague and
indefinite, depending upon resolutions which, in some instances
in the years gone by, did not see the books of record.
And the
purpose of this amendment is solely to organize in a compact
committees of the Association
logical form the
and their
power and the appointing power.
I therefore, sir, in conse¬
quence of the action of the Executive Council taken at Atlantic
City, and also in this city of Los Angeles, move that Article
IV of the Constitution be amended by
striking out the entire
article of the present Constitution and inserting in lieu thereof
the draft of Article IV, as published in the official journal,
and as it stands published in the official program, with the
exception that on page 24 the clause commencing the last
clause on page 23, which reads as follows :
“Consisting of five
members of the Association, of which the General Counsel of
the Association,” be omitted.
I move the adoption of that
resolution.
Mr. Watts

I second the

motion.

(Motion put and carried.)
Mr.
tion

SECOND DAY’S PROCEEDINGS.
The

CONVENTION.

Watts:

Mr. President and Gentlemen of the Conven¬
In the absence of the Chairman of the Executive Coun¬

cil, I have been requested to present to this Convention the
following amendments to the Constitution:
First, an amend¬
ment to Article IX, Section 1, of the Constitution of the Amer¬
ican

Bankers

Association:

“A State Secretaries’ Section which shall be composed of the 3ecretaries

who

are

members

the

Organization of Secretariea of Stat*

BANKING

SECTION.' '
The

relating to State Bankers’ Associations.”
The

above

be designated

paragraph (d)

and to immediately

paragraph (c).
Paragraph (dj of Section 1 to be known as paragraph (e).
Amendment to Article II, Section 2, of the Constitution

Bankers’

American
“After

‘or

of the

and immediately preceding and add the fol¬

“and”

Omit the word

lowing, after “the Chairman of the Executive Council of the American
Institute of Banking.”
“And

You

President

the

organization

the

will

see,

these

State

gentlemen, from the reading of the changes,
the Constitution are made in order to

changes to

create what

is known

the Section of the

There is

Associations.

work of the American
to

closer

bind

the

Associations

State

organization

State

Bankers’ Association
American

than

Secretaries’

important work collateral to

ing performed by the State Associations.
which

Secretaries

Associations, known as the State Secretaries’ Section.”

Bankers’

than that be¬

There is

Bankers’

way

Association

and

giving due representation to the

Secretaries; and it gives

pleasure,

therefore, to present this amendment to the Constitution, hav¬
ing the endorsement of the Executive Council of the American
Bankers’ Association; and I move its adoption.
Mr. James

Mr.

Watts

The

The Treasurer shall receive and account for all moneys

only upon vouchers countersigned and approved by the General Secre¬
tary and by the President or First Vice-President or by the
the

Executive

Council, and,

case

Report of Federal Legislative Committee.
[The report of this Committee will be found on page 155.]

This

Secretary is sufficient explanation :

proposed amendment makes

change in the present

12, but amends and adds to it what is now Section 13.

The

vouchers

cluded in

by the treasurer, it is more appropriate that they be In¬

one

section.

The

expenses or

stituted,

made

for legal costs, the general word ‘expenses’ has been sub¬
in the place of the words ‘incurred by the Protective

Committee and other Committees’

there has been substituted

‘incurred

by a committee or a section.’ ”
bears the approval of the Executive Coun¬
Association, and I therefore move its adoption.
(Motion seconded, put and carried.)

The

amendment

your

President:

The

order of

Sections, and I will first call on the Trust
Company Section, Mr. Fuller.
TRUST
Fuller:

Mr.

Trust Company

COMPANY

the

of
What is

report

have heard

You

the motion

of Mr.

Batch-

be received and made a part of the min¬
utes of this Convention and that the committee be continued.
elder that the report

Chairman

and

seconded.

Motion

Gentlemen, you have heard the motion and
.ready for the question?
Mr. Campbell:
(Indiana) Mr. ’ Chairman, does that mean
that this Convention adopts the recommendations that are
contained in that report or will they come up for consider¬
ation by items?
The Chairman:
The Chair understands the motion to be
that the report be received and filed.
Mr. Campbell:
Without recommendation?
The Chairman:
Yes sir; that is the understanding of the
Chair; otherwise the motion would have been to receive and
approve the recommendations.
Are you ready for the question?
Motion carried unanimously.
.

The Chairman :
second.

its

Are

Gentlemen

work

then

Farnsworth

Secretary
cation

read

ACADEMY

following communi¬

POLITICAL SCIENCE.
New

of
The

the

THE

The

you

NATIONAL MONETARY COMMISSION.

SECTION..

Section during the past year is fully cov¬
ered by the report made by its Executive Committee, by its
Committee on Protective Laws, and by its Secretary, which
report will be published in the official book of proceedings,
available to every member of the Association, and I will there¬
fore not go into details at this time.
I will simply state, in
brief, that the membership has increased very satisfactorily
and now numbers 1,070 trust companies; that the work done
by the Committee on Protective Laws, the duty of which is to
protect the use of the word “trust,” has been successful in
procuring legislation in a number of different States during the
last year, prohibiting the use of the word “Trust” by any
corporation not organized to do a trust company business, and
also in a number of States it has procured the enactment of
lav/s relating to the punishment of persons and firms procuring
credit on false statements, and during the year we have pub¬
lished a valuable and exhaustive work on trust forms, at no
expense whatever to the general association, the expenses hav¬
ing been paid by the subscribing members to the book. We
have had a number of meetings and have done, we think, very
effective work, as will be shown by the reports to be printed.
the

heard

continued.
Chairman

business will be reports

of Committees and

Mr.

have

that the report be received and
part of the minutes of tjiis Convention and the Com¬

mittee

present

and

This

you

Is there a second to that motion?

Section 13 only covers approval of committee
vouchers by committee chairmen and is silent as to approval of section
vouchers: the proposed amendment includes the latter.
“(3)
The present Section 13 only relates to vouchers for ‘detective
and legal expenses and costs’ incurred by the protective and other
committees.
As the quoted words have application chiefly to the
Protective Committee and as the principal expenses of other com¬
mittees and of sections are not incurred for detective or for legal
“(2)

Gentlemen,

of the Federal Legislative Committee.

your pleasure regarding it?
Mr. Batchelder:
I move

The

As both of the present Sections 12 and 13, relate to payment

(Applause.)

gentlemen.

you,

Chairman:

The

changes and reasons therefor are these:
“(1)

thank

the Chairman

“Note:

(Applause.)

you.

Chairman

of vouchers for expenses in¬

Section.”

Section

thank

work

Chairman:
You have heard the report of Mr. Wexler,
retiring President of the Clearing House Section, and if
there is no objection it will also appear in the report.
We will now listen to the report of the Federal Legislative
Committee, by its Chairman, Mr. Arthur Reynolds.
Mr. Reynolds then read the following paper:

ceeding the appropriation set apart for the use of such Committee or

This note of the General

SECTION.

the

by the Chairman of such Committee or the President, Vice-rresident
or Chairman of the Executive Committee of such section, and not ex¬

cil

the

Clearing House Section has undertaken
during the past year, which will be
carried forward during the coming year.
This work is not only
of interest to Clearing House cities, but to bankers, State and
national, to trust companies and to savings banks throughout
the country.
The report of the proceedings of the Clearing
House Section you will receive in due course, and, as the pakt
President of that Section I would ask you to kindly ftay £dr<?ful attention to the report of the proceedings of that Section,
as you will find a great deal in it that will be of interest’ fb
your respective institutions.
You will find that the adoption
of some of the methods proposed by the Clearing House Section '
will reduce your expense, will facilitate your work, will afford
greater accommodation to your customers and will generally
lead to greater legitimacy in all lines of banking.
It would
be too lengthy to refer to these matters at the present time,
but you will find them fully stated in the Bulletin and in the
proceedings of the meetings.
of

amount

vast

curred by a committee or a section, only when additionally approved

The

next, gentlemen, is submitted by the Gen¬

belonging to the Associaton and collect dues; but shall pay out moneys

report

The

Wexler:

Mr.

Secretary on approval of the General Counsel:

“Section 12.

CLEARING HOUSE

motion.

I second the

(Motion put and carried.)

eral

will

of the

Constitution of the American Bankers’ Association.

the

verbal

the Clearing House Section, and

we will pass on to
hear from Mr. Wexler.

If not,

III, Section 2, first paragraph of (c)

to Article

Amendment

the

Section.’ ”

taries’

that

heard

president of the Trust Company Section. If there is no objec¬
tion it will appear in the record as rendered.
Is their any report from the Savings Bank Section?
(No response.)

Association:

private banker’ and ‘or a member of the State Secre¬

you.
(Applause.)
Chairman:
You have

thank

this Section to embrace all matters

Bankers’ Associations; the work of

167

York, September 26, 1910.

Thirty-sixth Annual Convention of the American

Bankers’ Asso¬

ciation.
Dear

Sirs:

National Monetary Conference will be held on the

occasion of the Thirtieth Annual Meeting of the

the National Monetary Commission. Senator
of the Commission will be guests of
The Chamber of Commerce and the Merchants’ Association of

discussing the
Aldrich

and

honor.
New

Academy of Political
for the purpose of

November. 11th and 12th,

Science in New York on

York

work of

the other members

will

co-operate with the Academy in this conference,

and

delegates will be present from the leading chambers of commerce and
boards of trade throughout the country, and the attendance will repre¬
sent

the

leading banking,

commercial, industrial and professional In¬

terests in the United States.
The

conference

called,

not

advocate

central bank or any

specific change in the present monetary system, and not in the
interests of any one section of the country.
The purpose Is the con¬
sideration and discussion of the work of the National Monetary Com¬

other

mission, with

view1 to

a more

general understanding of the numerous

reports which the Commission have had prepared and pub¬
lished at great cost of labor and expense.
There will be sessions on Friday morning and afternoon and Saturvaluable

168

BANKERS’

day morning.

The

banquet hall

of Hotel

CONVENTION

dinner

will take place on Friday evening at the
Astor, and there will be a reception ou Satur¬

this valley after you have concluded the work
of your convention will
be both pleasant and
profitable.
The Southern Pacific Company has
granted a stop-over of 24 hours at
Watsonville, on all tickets of dele¬
gates to your convention, and we trust that each will find
it possible
to take sufficient time to
accept this invitation to Watsonville and the

day afternoon.
A volume will be
published

by the Academy immediately following
conference, containing the chief addresses and a series of papers
by leading economists, lawyers, bankers, and statement
summarizing
and criticizing the
published reports of the National Monetary Com¬
the

Pajaro Valley.
Yours very truly,

mission.

WATSONVILLE APPLE ANNUAL ASSOCIATION.

Further particulars may be obtained
by addressing the Academy of
Political Science, Columbia

J. W. Kavanaugh, Secy.

University, New York City.

(Telegram.)

Yours very truly,
HEPBURN, President of the Academy.

A. P.

Ft.
American

The

President:
Mr. Reynolds, have you anything to say
on
subject of this communication?
Mr. Reynolds:
Mr. President and Gentlemen of the Con¬

Inasmuch

Los

Angeles, Cal.

The citizens of Ft.

Worth, through their commercial body, the Ft.
Worth Board of Trade, extends an
invitation to all delegates to your
convention to visit the city on their
homeward trip, that made a gain
in population of 174.7
We assure each of you a
per cent.
hearty and

the question of currency reform is the
prominent question, from a banker’s standpoint, that is
before the country at this
time, I believe we shold all show an
interest in the efforts of
any reputable organized body to bring
about this result; and I therefore desire to introduce a
as

most

warm

reception.

reso¬

lution

the effect that it is the
members of this Association

the

FT.

of this Convention that

sense

should correspond with

this

body with a view of having some one representing the currency
association, or some individual representing this Convention,
be present at their meeting.
I make that resolution without
in any sense wishing to commit the Convention or the
Associa¬
tion to any action which
they may take, but only with a view
of encouraging them, as I think we
ought to encourage all
civic

bodies

Gentlemen,

secutive

convention.
I hope the present
meeting will be successful
accomplish work beneficial to the entire country.
Kindly express

and

my regrets to

friends.

THE

Farnsworth:

MEDITERRANEAN.
have

another

communication

Keyser,
Fred E.

’»

arranged

excusrsion to leave New York

Jan.

24th, 1911,

the

Oct. 6, 1910.

A. B. A., Alexandria Hotel.
West Virginia members A. B. A. extend
greetings to the members
of the American Bankers’ Association in
convention assembled.

Angeles, Cal., October 7, 1910.
Express Companies and Travelers’ Cheques has

W. Va.,

Farnsworth,

Los

Committee

BRANCH.

(Telegram.)

The

you

onded and carried.

CRUISE

TRADE.

E. Farnsworth.

JAS.

President:

Secretary, American Association, Los Angeles.
fully intend to be with you in Los Angeles. I
regret that press¬
ing business made it impossible for me to attend
my nineteenth con¬

organizations to exert every effort and
looking to the ultimate settlement of this

Secretary

BOARD

and civic

have heard the resolution
offered by Mr. Reynolds.
Is it supported?
The motion for the adoption of the resolution was
duly sec¬

read

WORTH

(Telegram.)
Huntington, W. Va., Oct. 4, 1910.

Fred

influence possible
important question.
The

Worth, Tex., Oct. 4, 1910.

Association,

convention assembled,

the

vention

Bankers’

WOODS, V. P.

(Telegram.)
Salt
Const

Lake,

Ut.,

Sept. 29,

1910.

Banker

Publishing Company,
Montgomery Street, San Francisco, Cal.

17,000 ton twin-screw steamer “New Amsterdam,” of the HollandLine, for a seventy-five day cruise to the Mediterranean.
The idea being that this excursion will help to introduce the use of

Utah with other Rocky Mountain and Pacific
Coast States joins
greeting the American Bankers’ Association, and

the

welcome to the

new

Amerlca

American Bankers’

Association

also advertise them here.

The

ports in the Mediterranean

cheques in foreign countries and
itinerary includes the most interesting

and the Orient and the steamer is the best

put in cruise service.
Many rooms are now engaged, and those wishing to join the party
ought to take up the matter of reservation at as early a date as
possible.
ever

Mr. W. B.

Information
made

Chandler, the
Bureau

extending

timent for
National

a(| closer

and

Banks

and

Gentlemen, in connection with that an¬
nouncement, unfortunately none of the Committee are in at¬
tendance at this Convention, but I know that
they have been
working very hard to interest a number of bankers in this
cruise, which will in every way be an ideal cruise, and they
gratified if they could get together a truly
representative body of bankers to take such a journey down into
the Mediterranean, and I think it would
pay you gentlemen
to look carefully into the question of time and
expense and
feasibility of you all going.

wise legislation.

munications.”
on

The next order of business is

Mr.

Secretary,

have

you

any

‘‘Special Com¬

communications

(Telegram.)
Lewis E. Pierson. Prest. American Bankers’
Los Angeles.

Hearty congratulations and best wishes
regret inability to be with you.
FELIX

Los

American

tion

for

Dear Sir:

desire

Angeles, Oct. 7, 1910.

Canadian

Railway to
its line, and

reservations.

Officers
Los

ciation

are

to visit

and

The

truly,

Members

BENJAMIN, General Tourist Agent.
Watsonville, Cal., Oct. 1, 1910.

the

American

Bankers’

Association,

directors of

pleased to extend to

the

Watsonville

your organization

Apple Annual Asso¬
a

cordial invitation

the Watsonville Apple Annual
during the week following your
convention.
We can truthfully say that we will
have the largest ex¬
hibition of apples ever assembled,
and that it will be a representation
of all the apple growing sections of
California, and that a visit to

The President:
of

Secretary, Los Angeles.

BANK

Gentlemen,

WACO.

SECTION.

we now have with us a

the

gentleman

Savings Bank Section prepared to make that Section’s
report, Mr. Robinson of Baltimore, the President of the

Savings

Bank Section.
tion

Angeles, California.

Gentlemen:

Farnsworth.

Greetings to the American Bankers’ Association.

Mr.

C. E.

the

Waco, Tex., Oct. 3, 1910.
E.

SAVINGS
Pacific

care of the bankers returning over
view, respectfully request those not booked on special
the office, 609 South Spring Street, to make
sleeping

Yours

ROSENDALE, Speaker Committee.

FIRST NATIONAL BANK OF

This is quite important.

Association,
the

(Telegram.)

possible

with this end in
trains to call

the

Convention,

organizations of Institute.

Angeles, Calif.

take the best

car

Bankers’

York, N. Y., Oct. 6, 1910.

Opening meeting New York Chapter tonight.
Six hundred present;
membership now eleven hundred.
We are grateful to your Associa¬

Farnsworth,

Secretary,

opening of convention;

SCHUSTER, Union Bank, London.
New

WM.

Secretary then read the following communications:

Fred

Lewis E. Pierson, President American Bankers’
Association
Los Angeles, California.

COMMUNICATIONS.

Mr.

London, Oct. 3, 1910.
Association,

(Telegram.)

your desk?

The

more carefully
depositors through

WILLIAM SPRY, Governor of Utah.

would feel very much

The Chairman

growing tendency to

protect and thoroughly safeguard stockholders and

be obtained.

President:

hearty

affiliation between the interests and
supervision of

State

cruise, can be found at the
the Hotel Alexandria, where bookings can be
can

delegates in convention assembled.
The rapid growth
banking operations in the West finds Utah eager to keep abreast
the most advanced banking methods.
There is a well defined sen¬

manager of the

and full information about the cruise

The

454

Robinson

Mr.

President, and Gentlemen

of the Conven¬

just have a very brief statement to make to the effect
that the Savings Bank Section is
moving along in the even
tenor of its way.
We have no startling statistics to
report,
:

but the regular and constant increase in
membership and a
consequent broader field of usefulness.
Our Law and Auditing Committees are active and
each doing

commendable work.

Notwithstanding the energetic efforts of our Postal Savings
Committee, the Federal Postal Savings Bank Bill has been

Bank

enacted.
This bill is not yet in operation,
but we are not
apprehensive of any grave outcome; our banks will make no
attempt to discredit Postal Savings banks, notwithstanding our

BANKING
belief

that

their

establishment

economic

and

political

blunder.
A

attended

well

morning session yesterday was followed by
a
smaller gathering in the afternoon, due to the lavish enter¬
tainments provided by our hosts ; interesting reports and papers
were read, which will be published in full in our book of
pro¬
ceedings, and we respectfully commend them to your careful
examination.
The

You have

President:

heard the report.

If there is

objection, it will take the usual course and be placed in the
record.
We will now call for reports of Special Committees, Mr.
Charles H. Huttig of the Treasury Committee.

Before present¬
Mr. President and Gentlemen:
ing my report I wish to offer a resolution to this effect, that
the President of this Association transmit a telegram to the
President of the United States, to read as follows :
Mr. Huttig:

William H. Taft.

Excellency,

ciation

The American

with grateful appreciation your telegram pre¬
sented through the Treasurer of the United States, Me. Lee McClung,
containing friendly greetings.
It is exceedingly gratifying to us to
be

which

having

the

assured

legislation

interest

concerns

especial

as may

itself in

deep

your

directly

Please

the

attention

the

entire

and

cause

consideration

reform

currency

and

country,

which
our

now

readiness to be of active assistance

the National

Monetary

offer this

The
as

President:

Gentlemen, you have heard the resolution
offered by Mr. Huttig.
Is it supported?
(Motion seconded, put and carried.)

Report of Committee to Simplify Method of Paying Cus¬
toms and Internal Revenue.
Mr.

Huttig:

At the meeting of the Executive Council of the f
at Atlantic City, N. J., in May,
the undersigned were appointed a Committee pursuant to the
Resolved:
from

That

States

First, To devise

five

confer

with

appointed

the

officials

by
of

United

furnished

Third,

clean

transferred

find

from

some

money
more

economical

means

in place of uuclean

The

economical

method

can

mutilated bills.

whereby

funds

can

then

subject

held

the

brief

call

luncheon following

informal

the

session,

Chairman,

The

Committee of the American Bankers’ Association,

Huttig, Chairman, St. Louis,
Gentlemen:
ton

in June

Andrew

informal meeting of your Committee in
Washing¬
subsequent correspondence with Assistant Secretary
myself, you have suggested three propositions looking

and

toward
to

the extension of greater

the

Mr. Charles H.

Mo.

facilities

the part of the

First:

That collectors of internal

and

revenue

customs be

authorized

accept cashier’s and treasurer’s checks of any members of clearing¬
house associations in sub-treasury cities
where the collectors are lo¬
cated, provided that clearing-house members whose checks are to be
so accepted have
previously deposited with the sub-treasuries a sum of
sufficient to

Second:

That

checks

cover

the

cost

used.

redemption and re-issue, including trans¬
portation, of the Government’s own issues of currency should be
borne
by the Government; and that an adequate supply thereof should be
maintained in the various sub-treasuries.
Third:
That gold certificates payable
Act

to order, authorized by the
1900, issued at any sub-treasury, except San Fran¬
received in payment of any debts due the United States

March 14,

Government
.1 transfers

wherever

payable;

extended

and
to

that

include

the

system

transactions

telegraphic

between

one-half hours ;

this

meeting adjourned until 9 :30 o’clock the following morn¬
ing, and the general conclusions reached were then formulated
for tentative presentation to the Secretary at the Treasury
Department at 11 :00 o'clock, as follows :
Referring to the first clause of the resolution, the Committee
respectfully submits for your consideration the following:
collectors

authorized
members

internal

Cashier’s

revenues

and

customs

Treasurer’s

Checks

shall

be
any

Clearing-house associations in Sub-Treasury
cities where the collectors are located, provided that Clearing¬
house members whose checks are to be so accepted have de-'
posited with the Sub-Treasury a sum of money sufficient to
cover checks so used ; any unused balance of such sum deposited
by a national bank shall be available as lawful reserve for the
depositing bank.
The Department is already permitting the payment of custom
duties in this manner in a few of the Sub-Treasury cities, and
it is desired to have this system adopted generally in all SubTreasury cities and extended to include the payments of internal
revenues

the

well

customs.

Relative to the second clause of the resolution, we believe it
to be the duty of the Government to provide the people with

First:

paid

The

shall

law

gold

states

prescribes that all taxes

and

paid

that

silver

coin,

gold

customs

coin

other

importations shall be

certificates,

taxes and

clean

and

extended

and

silver coin, Treasury notes,
Statutes, Section 3473).
The law

thus

committee

your

asks that

this

other

resolution, we respectfully
Treasury Department permit the acceptance
of gold certificates payable to order, authorized by the Act of
March 14, 1900, in payment of any debts due the United States
Government wherever payable; and that the system of tele¬
graphic transfers be extended so as to include transactions be¬
tween all Sub-Treasury cities.
The usefulness to the public

include

the

payments

St.

Louis

the

made

method

and
in

ling the Government
revision

business.
this

internal

revenue,

system

New

Or¬

that it be

well

see

Cincinnati, but little
paying customs.

and

loss.

handled

use

would

whole

probably

allow

would

collectors

insure

would

allow

the

are

ask

Congress

customs

and

Second:
fresh

You

the

collectors

Government

revenues

money

of fresh

have

proposed

transporting uufit
exchange,

money of all

that
money

and

amend

internal

revenue

national banks, under such safeguard¬

would

This

and

the

revenues

Government
be

received

municipalities and states, in(jug.

trial and commercial corporations and individual
firms.
glad to recommend such legislation in my annual; report.
expense

system of hand¬

handling

proposition

regulations

against

The

money,

receive certified checks upon

ing

objection from the point of view of
important ports of entry,

of the less

however, is medieval and requires radical
into conformity with the practices of modern
inclined to believe that a wiser method of

3473

some

bring

particular

Section
to

cau

Treasury, although in

the

Government

should

to the Treasury

have

asked

that

shall

bear

the

and re-«hipping

adequate supply

kinds and denominations be kept in each of the

sub treasuries.

The proposal that the Government
from

the

intended
cities the

pay the cost of shipment to and
Treasury in the redemption and re-issue of unfit money is
primarily to extend to the banks outside of sub-treasury

same facilities in
regard to redemption which are now en¬
joyed by the banks accessible to sub-treasuries, inasmuch as it is the
present practice of the Department to give clean
money for unfit

time in

clearly

and

To this suggestion I
the

ditures

Relative to the third clause of the

notes

customs.

thereof should be maintained in the various Sub-Treasuries.
recommend that the

demand

debts to the Government

internal revenues must be paid in actual
In New York, Boston and San Francisco collectors of customs
receive orders drawn by hanks
upon funds deposited by these banks

sanitary currency, and we therefore respectfully
suggest that to accomplish this the cost of redemption and
re-issue, including transportation of the Government’s own cur¬
rency issues, should be borne by the Government.
In order to
facilitate the distribution of clean currency an adequate supply
a

other

sub-treasury cities, except San Francisco.
i Treating these three propositions serially and individually, I beg to
submit the following considerations:

such

That

Treasury

banking interests of the country, namely, the following:

recommendations

and

com¬

Secretary:

sub-treasury cities, namely, Chicago,
leans, Baltimore, Philadelphia, St. Louis and Cincinnati, and

for three

and
further

the

subjects referred to were given careful consideration by
each of us individually, and a conference was arranged with
the Honorable Secretary of the Treasury for June 18th.
Accordingly, a majority of the Committee met in Washington
on the evening of June 17th, the other members,
unavoidhbly
absent, having sent on their views in writing, and the several
discussed

ac¬

elaboration of the subject to be considered
by mail.
Under date of September 29th, 1910, the
following
munication was forwarded to us by the Honorable

daily at the sub-treasuries, and

The

were

cur¬

money.

Sub-Treasury to another.

one

Committee

national banks (Revised

whereby the banks
or

recom¬

ofllcials,

Treasury notes, and that all

simple method whereby customs and internal

Committee’s

prolonged the conference, through
formal hearing, until 3 :30 p. m.

the

Chair

the
the

endeavor,.

payments can be legally and safely made.

Second, To find
be

cities

Treasury in

revenue

Committee

Sub-Treasury

our

which

cisco,

American Bankers’ Association

following resolutions

the

money

resolution.

suggestions most courteous considera¬
tion, and gave assurance of hearty co-operation to the extent
practicable and compatible under the limitations of the laws
and the fiscal policy of the
Treasury. A number of collateral
questions were introduced into the discussion by the

Association.

hearty

co-operation in bringing about such
be needed, and that our Currency Commission holds
our

Commission.”

corded

acknowledge

assured

increased if

adequate supply of
rency at the Sub-Treasuries, should be adopted.
Secretary MacVeagh and Assistant Secretary Andrew

Asso¬

Bankers’

169

of this system would be greatly
mendation of the maintenance

adjourned

TELEGRAM TO PRESIDENT TAFT.

“His

SECTION.

the

money

sub-treasuries.

The

granting of this request would obviously
involve an appropriation which would have
to be made by
Congress,
and $300,000 would be a conservative
estimate of the amount so

in¬

volved.

tain

In
of

view of the efforts
the

become

Anfit

re-issuing
for

extended to
are

now

its

own

paper

circulation, and that

the

banks

smaller

money
the

when

same

towns

and

that

experiments

should like to call

being

made

the

this

trans¬

has

should

not

facilities
cities in

money

this

enjoyed by the banks in the sub-treasury cities.

this connection

mittee

expense

and

the expen¬

not feel justified at the
present
recommendation, although I am not at all cer¬
the Government ought not to bear the

ferring
be

being made to reduce

Government, I should

making such

that

now

regard

attention of your Com¬

Department

and

now

170

BANKERS’

CONVENTION
(2)

approaching what appears to be a successful termination, in
washing, ironing and rc-sizing of soiled currency.
According to
present prospects we shall be able in the course of the coming
year to install iu all of the sub-treasuries laundries for the notes,

rapidly

which

will

save

which

notes

and

circulation

return

present

destroyed

are

four-fifths

about

which will

and

the

existing restrictions upon the denominations of dif¬
money be further relaxed.
Respectfully yours,
FRANKLIN MACVEAGH, Secretary.

the

kinds of

paper

The Committee

make it

also

That

ferent

the

begs to submit the foregoing as its report.
C. H. Huttig, Chairman;
Li. L. Rue,
Geo. M. Reynolds,
A. B. Hepburn,

paper currency which is not yet soiled
being unfit for circulation, but which would otherwise
in an unclean and perhaps unsanitary condition.

possible to cleanse and re-issue
to the extent of

continue in
The

the

We
in

and

sub-treasuries

making

are

this

effect

In whatever
I

our

currency

paper

such that it is very diffi¬

are

at all sub-treasuries

money

denomination the depositor may desire.

There should be,

legislation allowing greater freedom in
several kinds of paper money.
A revision

denominations

the

of the denomination
But

this

which would allow national bank notes to be
and

one

change

would help in this direc¬

two dollars,

increase the

would

be likely to urge.
Third:
issued

You

able,

thus

asked

that

sub-treasury except San Francisco,

necessity

cross-shipments

seasons

nizing the economies which would
and

arrangement,

the

way

Government

practice.

order,

be received in pay¬
wherever

pay¬

reducing the cost to the banks of domestic exchange and

the

feasible

payable

the United States Government

debts due

of the couutry at different

parts

certificates

gold

operations

afford

can

The

though
to

and

banks,

the

adopt such

drift

natural

gold between different
of the year.* While recog¬

desirous

very

to the banks

accrue

plan

distribution

feel

not

every

that

Mr.

distribution

the

Government’s

the

financial

\yorld’s demand for gold. By
agreeing to redeem gold certificates payable to order at any sub¬
treasury, or by agreeing to receive them in payment of debts at any
sub-treasury, which is practically identical with their redemption,
the

Government might,

find itself

the

many

obliged to bear the
to another,

country

might prove to be entirely
actual

practice

these

cases,

expense

and

the

at the

in the future,

in the past,

of shipping gold from one part
economy

accruing to

the

banks

When

gold has accumulated in

one

the

and another sub-treasury

inappropriately supplied, we have not infrequently re-distributed
the surplus by the issue of exchange.
According to present informa¬
tion. however, I am inclined to think that it would be unwise for
Government

at this

offer

extend

these

facilities

without restriction

connection

have

you

also

asked

that

the

system

tele¬

graphic transfers be extended so as to include transactions between
all sub-treasury cities except San Francisco.
This has already been
accomplished.
By general orders issued by the Treasurer of the
United

States, July 6 and 7, 1910,

any assistant treasurer, except the
Francisco, is authorized to accept deposits
for telegraphic transfer for payment in any other sub-treasury to an

Assistant

Treasurer

amount

not

charges

at bankers’

New York

Governor of

and

will read

from

exceeding

As Governor
to

extend

for

your

Atlantic
better

you

$100,000

rates

and

day,

per

the

payment

upon

charge for

the

telegram.

New

limit.

position to do

without depleting too far its cash on hand. In
except those involving payments in San
Francisco, the depositor must pay the express charges and the charges
for the telegram.
For payment In San Francisco, however, deposits
of

case

all

The
New

transfers,

accepted at other sub-treasuries without requiring any charge for
expressage, but a uniform charge of $1.30 for the telegram.
If after
statement

have
be

been

met

does not

appear

with regard

that the desires of your committee

to telegraphic transfers,

I should like to

further informed.
If such action

glad

most

courteous

anuual meeting.
take

to
you

accords with the desires of your Committee,
for Congressional consideration the

recommend

assured

That Section 3473 of the Revised Statutes be
of

national

banks

under

such

revenue

regulations

collectors and the Government against loss.

place in the country
nor is there any

convention,

large

comforts and pleasures

many

meet.

Assuring

you

cordial welcome, I

am,

Yours very truly,

JOHN FRANKLIN FORT.
Atlantic

Bankers’

American

Los

Angeles, Cal.

Gentlemen:

ciation

affords

I should

will

Asso¬

1911, at Atlantic City.
in inviting conventions to meet here to explain the
many advantages possessed by our city as a convention center; but
Tt is customary,

memories

the

feel

that

that,

decide

you

welcome

members

our

is unnecessary

for

here

come

always

have

been.

have

received

when

here

into details.

year,

will

you

Anything

1907

just

within my
power to do for your comfort and convenience will be done, and I
know that our citizens will join with me in the effort to make
your visit an enjoyable one.
Trusting
I

you

that

you

will

find

possible

that

assure you

our

invitation,

Respectfully,

am,

STORY,

Mayor.

ATLANTIC

CITY

PUBLICITY
Atlantic City,

American

Bankers’

Gentlemen:
Atlantic

Assembled

Our

Convention

Los

would

obtain

your

convention

for

City and trust that at the proper

favorable action upon this,

take

N. J., Sept. 22, 1910.

California:

Angeles,

Association

BUREAU.

resort

surpassed

ideal

anywhere,

unlimited,

being

the

place in the world.
United States,

its

while

most
Our

being only

our

convention

time and place you will
hearty invitation.

city and its attractions

hotel

accommodations

are

un¬

practically
any similar

are

modern and reasonable of
railway facilities are the best

the

hour’s ride from Philadelphia and three
from New York City.
Transportation can be arranged far at as
low rates as any point in the country.
We would have no trouble
whatever in taking the best of care of the delegates who attend
your convention, and this Bureau will give you all possible assist¬
ance

desired

This

without

invitation

any

one

to you

expense

extended

not

only

for its services.

the Bureau of Publicity
City Board of Trade, the Atlantic
City Hotel Men’s Association and the Atlantic City Business League.
Should Atlantic City be favored with your next meeting please so
advise me and, if desired, I will be happy to co-operate in
making it
but

also

success

behalf of

the

Atlantic

to all interested.

Very truly

yours,

S. LENHART,

Secretary-Director.

certified

Insure

your

convention,

following

amended

to receive
as

pleasure to extend to

great

cordial invitation to hold your next annual

most

City, September 23, 1910.

Association,

GEORGE

allow collectors of customs and of internal
checks

and there is

you

care

can

propositions:
(11

Association;

it gives me great pleasure
invitation to come to our State

people of New Jersey will give you welcome.
Everything in
Jersey is solvent and it is just the spot for a Bankers’ Asso¬

ciation to

are

this

Executive Department.

there.

The

gives permission; this he is accustomed to do if his telegraphic in¬
quiry shows that the office which is asked to make the payment is in
a

Jersey,

the

figures given above are those within
which the assistant treasurers are given authority to make transfers
without communicating with Washington.
When larger amounts are
asked for, they may still be had if the Treasurer of the United States

the

State, from the Mayor of At¬
Atlantic City Publicity Bureau,

express

Philadelphia and Baltimore to the extent of $100,000 per day,
but they may be made for payment in Cincinnati, St. Louis and
New Orleans to the extent of $250,000 per day,
for payment in
Chicago to the extent of $500,000 per day, and for payment In San
without

convention

City will Invite

able

place where

Boston.

Francisco

of the State of New Jersey,

San

sub-treasury even greater latitude is allowed in this regard.
a series of orders, last amended on Sept. 12, 1910, not
deposits be made in New York for telegraphic transfer to

may

its

our

the

According to
only

hold

President and Members of the American Bankers’

the

with

time.

this

Association

September 27, 1910.
To

State

sub-treasuries

the

time

of the needs of that sub-treasury,

excess

invitations

Supplementary to that, I have further invita¬

the

City,

which

will

year’s convention?

Field

the

City.

from

tions
lantic

business

Are there any

facilities

from time to

demanded.
in

order

of exchange have been* extended to
according to what seemed expedient at
the moment; that is to say, according to the particular conditions
existing In the various sub-treasuries at the time when exchange was
the

The bankers of Atlantic City, N. J.,
meeting of the Council, appeared before the Council

invited

and

banks

of the Government.

expense

William

Atlantic

gold supply among its several sub-treasuries does not always coincide
with

The

be extended for next

the

matter of general

CONVENTION.

YEARS

through such

facilitating

President:

invitations for the next convention.

at the last

•

have

any
any

avoiding

The

President:

Gentlemen, the report will take the usual
course and be spread upon the record if there is no objection.
Mr. Hamilton :
In accordance with the wish of the gentle¬
man expressed, I
move you that the Committee be continued,
and that the report be spread upon the record.
(Motion seconded, put and carried.)

perhaps it is not the sort of reform which the bankers would

banks,

ment

INVITATIONS
The

borne by the

expenses

W. A. Gaston.

further legislation.

suggests

redemption of all sorts of

of the law, for instance,

tion.

also

further changes in

believe,

the

which

one

but the existing restrictions upon the denominations

respect,

special effort to meet the requirements of bankers

of different forms of
cult

Committee that au adequate supply of fresh
denominations should be maintained in each

your

of all kinds

money

use

proposal of

the

The

President:

from Atlantic

City.

Gentlemen, you have heard the invitation
What is your pleasure with it?

Mr. Sol Wexler (New Orleans) :

Mr. President, before action

BANKING
the invitation from any one city is taken, would it not

upon

be advisable

receive the invitations from

The President:

Mr. Wexler:

Wexler

CLEARING

HOUSE
New

The

Los

Angeles,
The

Gentlemen:
a

annual

the

Council may

entertainment

unique

September 2,

1910.

„

convention in the city

Executive

the

ASSOCIATION.

Orleans Clearing House respectfully extends

invitation to the American

cordial

California.
New

Bankers’ Association to hold its

of New Orleans at such time

decide, promising adequate facilities and
and hospitality for which the Crescent.

City is famous.

THE NEW ORLEANS CLEARING HOUSE ASS’N,

By Chas. A. Morgan, Secretary.
In view' of the

competition for the next meeting of the Asso¬
ciation, namely, the cities which I understand either have or
will extend an invitation to this Association, to wit : Atlantic
City; Richmond, Va.; San Antonio, Tex., and New Orleans,
La., I feel that it is almost unnecessary to have anything at
all to say in favor of New Orleans, as its facilities and its
opportunities for entertainment are so great as compared with
the other applicants, that it appears as if further remarks
would be superfluous.
However, there are a great many of the
gentlemen present here who perhaps have never been to the
great city of New Orleans, and who may wish to learn some¬
thing about its method of entertainment and what it has to
show the people of the United States.
New' Orleans, as you are aware, is one of the oldest cities in
this country, having been founded in the year 1700.
It suc¬
cessively passed through the possession of France, of Spain,
and finally to the United States.
Each of these foreign coun¬
tries has left some of its imprint upon the institutions of the
city of New' Orleans. You will find in the city of New Orleans
the original building in which the Louisiana Purchase was
consummated—the purchase of all this tremendous territory
west of the Mississippi River except those States immediately
bordering on the Pacific Ocean.
You will find in a portion of
the city of New Orleans—the oldest portion, which we are
very glad to say is the smallest portion—every resemblance to
a foreign
city.
Those of you who have never had the oppor¬
tunity of foreign travel, will have an opportunity of seeing
what an old French or Spanish city looks like, in that portion
of New Orleans.
In the new and modern part you will see a
residence district unsurpassed by any in the world, and I make
this statement with the full knowledge of the many beautiful
streets that exist not only in this country but abroad.
I say
to you, You will see villas surrounded by the most beautiful
gardens, parks, ferns, palms—everything that is pleasing to
There

another

feature

NewT

Orleans

for

which

famous, and that is its cuisine.
I don’t know
whether that will appeal to the majority of you or not, but it
is generally said that the way to a man’s heart is through his
stomach, and if that condition exists, I am sure the cuisine
of New Orleans will appeal to you all.
We have all kinds of
food unknown elsewhere in the world, game of all kinds,
sea
not

justly

a few drinks which you may like to
get anywhere else in the world.

imbibe which you will

to that, the people of New Orleans are famed
hospitality. They are in that respect like the people
of Los Angeles who have turned themselves loose so mag¬
nificently here.
(Applause.)
In

addition

for their

to you that if you hold this Convention in
Orleans you will probably have the largest
attendance that you have ever had at any meeting of the Ameri¬
can
Bankers’ Association.
After all, this is a business con¬
vention ; this is not a convention for pleasure.
This is a con¬
vention that should hold its meetings at the places that would
attract the largest possible attendance, and the city of New
Orleans is so thoroughly accessible to every part of the United
States, has such magnificent railroad facilities for entering it,
besides steamship facilities from the east coast, that I am cer¬
tain it will draw the largest attendance that was ever had at
any convention of our Association in any city of the United
States.
We say to you that we welcome you heartily.
Our
Clearing House Association met and adopted this resolution
Inviting you.
If you will come to New Orleans we will promise
to show you everything there is to be seen there.
We want you
to see our lands, of which we have hundreds of thousands
of acres as rich as the valley of the Nile.
Many of you in
the banking business will have opportunities for investment in
these lands, or for making loans on them, because we have
had a tremendous number of people, especially from Wisconsin,
Minnesota, Illinois and other States come South and purchase
these lands, and it will be an education to many of you to come
to that part of the country, and I therefore invite you most
And

the

and

city

can

say

of New

Council for their careful consideration

determination.

Motion seconded

by numerous members.
Gentlemen, you have heard the motion of
the gentleman from Philadelphia and the seconds.
Mr. McCaleb (Texas) :
Mr. Chairman, I rise to a point of
The

Chairman:

the

nominations

are

all

not

in.

I will be glad to

withdraw my motion, Mr. Chair¬
man, for the present.
I had understood that all these invita¬
tions had been presented.
*
The Chairman:
The motion has been withdrawn, gentle¬
:

Is it writh the consent of the second?

men.

A Member

It is.

The Chairman

It is in order

for the other invitations

now

presented; but the Chair would suggest that those pre¬
senting them kindly limit themselves to as short a time as
possible, as we have other pressing business to pass upon.
Mr. Miller (Richmond, Ya.) :
Mr. Chairman, I take it that
the orator from New Orleans having taken up most of the time

must

New

therefore

Orleans

brief.

After

all

that

has

been

said

and Atlantic

City, Richmond; Va., is the logical
I am delegated by the
place to hold the 1911 Convention.
Chamber of Commerce, the Clearing House Association, the City
Council
most

and

Governor

the

our

State

cordial invitation to hold your

mond.

There

are

extend

you

1911 Convention in Rich¬

doubtless hundreds in this audience who at¬

Richmond ten years ago.
The city
quite so much as Los Angeles, but it
some 127,000 people.
It is a city
of good hotels and hospitable homes, and I assure you that every
citizen of Richmond will be highly honored indeed If you hold
your 1911 Convention in our city.
(Applause.)
A Member from Texas (San Antonio, Tex.) :
Mr. Chairman,
Texas needs lots of
may I come forward to the platform?
tended

Convention

the

since then has grown, not
now
has a population of

room.

(Laughter.)

The Chairman:
Member from

We always understood it had it.
Mr. President, Officers and Gentlemen

Texas:

of the Executive Council, Members of the American Bankers’
Association, Ladies and Gentlemen: I have listened attentively
to what those gentlemen have said who have preceded me, and
I am going to be just as brief as I can, but I must agree with
all of them, and particularly with Mr. Wexler, that there is not
much to say about New Orleans, but if I were to talk about
Texas

should like

would

have to

consume

the balance

(laughter and applause) ; so I am going to be as
brief as I can, but I want to present to you a claim that is
going to appeal to you not from a sentimental standpoint but
from the standpoint of business.
I am not a banker, strictly speaking; I am a director in a
bank and have been one for several years, and I did not know
how important my office was untli the Comptroller of the Cur¬
rency began to ask me to sign letters, and then I knew I was
some pumpkins.
(Laughter.)
When I came here last Sunday one of the, places I visited
was the beautiful suburb of Venice, and a man met me there
and said, “Hello, Washer.
Do you belong to the Bankers’ As¬
sociation?”
And I said, “Yes.”
“Well,” he said, “Since when?”
And I said, “Ever since I went in business.” (Laughter.)
I
have always been a merchant, and when I want consolation for
being a bank officer I have always thought of the story of a
banker of New Y6rk who met a merchant friend of his, also a
director of a bank, and he said to him, “Isaac, I had a dream
about you the other night, and I want to tell it to you if you
do not object to listening to it.”
“Well,” said Isaac, “I will
be glad to do so.”
“Well,” he said, “I dreamt I died and went
to Heaven, and when I got there Peter met me at the gate and
he said, ‘Well, Mr. Banker, we have two kinds of Heavens here
—we have a Heaven for the banker and we have one for the
merchant.
Where do you want to go?’
‘Well,’ he said, ‘I
would naturally prefer to go to the bankers’ Heaven, but,’ he
said, ‘if you don’t object, Peter, I would like to look in on the
of the

eye.

and

matter to the Executive

Mr. Law

Respectfully,

most

(Applause.)

Law

order—that

Hoping for your favorable action, we are,

the

hold your next meeting in that city.

(Philadelphiaj :
Mr. Chairman, I am sure that
duly appreciates each of these invitations. Each
one of these cities has its attractions, as one star differeth from
another star in glory, but it seems to me that very careful
consideration should be given to the qualifications of your cities
and that this matter should, as heretofore, be referred to the
Executive Council for the selection of the next place of meeting,
and I therefore make that motion, that we refer this entire

invitations?

La.,

behalf of the Clearing House Association of New

thank you.

Mr.

which I will read.

Orleans,

171

this Convention

Association,

Bankers’

American

offer that as a resolution?

Do you

I have an invitation

cordially

Orleans to

all the cities?

I offer that as a resolution.

Resolution seconded, put and carried.
Are there any other
The President:
Mr.

SECTION.

day

merchants4

Heaven

way

there.’

‘Why, of course,’ said

Peter, ‘you will be perfectly welcome to do that.’ ”
And he
said, “Isaac, I looked into the merchants’ Heaven, and there
you fellows were selling clothes and peddling shoe strings and
selling all kind of merchandise and wares just about like y«u
did on earth.”
Well, that got away with Isaac, and he didn’t
know what to say or what to do; but he waited about & week
and he met Mr. Banker again and he said, “Mr. Banker, by the
way, I have had a dream and I want to tell you about it.”
“All right,” said Mr. Banker, “go ahead and tell it.”
“Well,”
he said, “I dreamt that I died and went to Heaven; that Peter

172

BANKERS’

CONVENTION

came to

but

and a

the gate and he said, ‘Come in, Isaac, you are
welcome;
have two kinds of Heavens—a Heaven for the banker
Heaven for the merchant.
Where do you want to go?’

‘Well,’ I said, ‘of course, Peter, I would rather go where the
merchants go, if you don’t mind, but I would like to look into
the bankers’ Heaven before I go there.’
Peter said, ‘All right,’
and he took me into the bankers’ Heaven.’ ”
And Mr. Banker
asked him eagerly,

“Well, Isaac, what did you see? What did
“Well,” he said, “I didn’t see anything; the place
empty.”
(Laughter.)

you see?”
was

Now, gentlemen, I come from and I speak for Texas, the
grand old commonwealth over whose domains there has floated
at

one

time and another six distinctive

flags, each emblematic
epoch in the wonderful development of that
great country.
But of all these flags, gentlemen—and Texans
have always been loyal to their standing—there is none more
revered in our State today than is the Stars and Stripes (.ap¬
plause), the grand, proud banner under which all Americans,
of whatever religious faith or political complexion they may be,
love to gather—the proud banner to which all vie in showing
historical

devoted and

want to tell you

We sent James Stillman from Fort Worth
to New York; we
have sent Joe Talbot from Fort Worth to
Chicago; we have
sent Hilliard and Tom
Randolph of Texas to St. Louis—and we
didn’t send the best bankers we had,
either.

(Laughter.)
A
give up the best he has got.
We have some good
bankers in Texas, and they want an
opportunity to associate
and affiliate with you.
But whatever we try to do, let me say,
in conclusion, that we never
hope to excel in loyalty and mag¬
nificence the entertainment that has been given us
by Los
Angeles.
(Applause.) In that regard we can only endeavor to
imitate.
But if you will come to Texas we will
give you the
don’t

man

best

ers—

The

people of Texas—and your Chairman tells me I must
hurry—five millions strong, are the proud inheritors of an

ton’s

historical record the like of which is not exceeded in the annals
of any State in this our great Union.
I don’t care what part

can.

country you come from you will find that redoubtable
courage and foresight of the pioneers of Texas, their genius and
their enterprise and untiring energy has enabled them to estab¬
lish there an empire to which the whole world, and particularly
the financial world, is now directing its eyes, and, gentlemen,
when I say that I must tell you briefly of some of the resources
of

the

that wonderful State.
Texas

has

1,125 bankers, with a capital and surplus of
$90,000,000, with deposits amounting to $265,000,000, with total
resources of nearly $4,000,000.
Of those 1,125 bankers only a
few

300 are members of this Association.
If you come to
for your next meeting—and 1 believe you are going to
there—you will find that the membership of Texas will
than double.
In addition to that we will make the meet¬

over

Texas
come
more

ing an international one; we will gather there the financiers
and the bankers and the leading men in finance of the Republic
of Mexico, of which we are the gateway, and we will bring
them there and you can make the meeting international in char¬
acter and you can get memberships from there.
Mexico is a
land flowing with milk and honey; it is covered with mining
and agricultural resources that have hardly been touched; and,
gentlemen, it will redound to the good of the Association if
you will come to Texas.
Now, just a brief word for San Antonio. Before we extended
the

invitation—and

has

been

extended

the

Secretary, and he told
modate them.

then that he thought

could

accom¬

Since then he has said that the hotels would not

give all of their rooms.
But I have a telegram in my pocket
signed by all of the hotel men in San Antonio in which they
agree to accommodate four thousand visitors.
Now, I want to
tell you that of those four thousand they can all come from
without the State, for the Texas bankers, doing what they have
done before, are willing to sleep out in tents or under blankets
in order to accommodate their visitors.

Now, just a word about the resources of Texas. The cotton
of Texas this year is worth $250,000,000 ; and, Mr. Presi¬
dent, you know we are interested in the bill of lading question,
and that is a question before the American Bankers’ Associa¬
tion.
The corn crop of Texas is worth $90,000,000 ; the wheat
and oats of Texas are worth $70,000,000; the hay, $60,000,000 ;
the products from lumber, $45,000,000; petroleum, $9,000,000 ;
cottonseed oil and other products of that character, $26,000,000,
making $500,000,000 in all.
The value of all the live stock in
Texas approximates $300,000,000.
I am giving you these figures
because finance and business are closely interwoven, the one
with the other, and they cannot be disregarded.
We raise some¬
thing else in Texas; we have increased the population there in
the last ten years a million and a half—and they didn’t immi¬
grate into the State, either.
(Laughter.)
crop

Now, gentlemen, cradled in one corner of this State lies the
city of San Antonio, the metropolis of the State and
the gateway to the Republic of Mexico.
It is a city around
which clusters everything that is grand, judicious and distinct
in the history of that imperial empire.
The Spanish monks
settled there in the 17th century and they established a civiliza¬
tion.
The first sprigs of civilization amongst a wilderness in
the South was established there, and it has grown into giant
oaks of financial, commercial and industrial greatness.
I could speak to you for hours upon these interesting features
of the growth and development of our great State, but I am
not going to do it, gentlemen ; but I am going to say to you
that no city in this country excels in hospitality the wonderful
city of San Antonio, Texas.
If you come there we will guar¬
antee that you will be profited, for we will guarantee that there
is absolutely not a city in the United States that will take
better care of you or that can take better care of you, and we
historic

Chairman

are

time, and I would ask

Mr.

Remmel:

Mr.

verging closely upon Senator
you to be as brief as you can.

Chairman, I will try to be

brief

Bur¬
I

We have come three thousand miles across the continent

spend

few days in this magnificent city, and I will try to
give Senator Burton a chance; but I am a native
of Texas, and I want to say a word in behalf of
my State ; and
when I say this I do not want to tear or
pluck the laurels from
a

cut short and

the brow of any
next annual

city that aspires to the honor of securing the

Convention of the American

Bankers’ Association.
The capital of the Old Dominion has had it
once, the Crescent

City has had it twice, and I take it it is coming to the South¬
land, and if it is coming to the Southland why not go to the
imperial commonwealth of that Southland where there are four
millions of people eagerly waiting to throw wide
open their
gates to welcome
their

the

great American Bankers’ Association

State, where thirty

years ago the

long-horn native cattle
roamed over the prairies and which today have been
merged
into the short-horn white-faced cattle, typical of the broadness
of character and the aggressiveness of our
citizenship.
Mr. Law :
Mr. Chairman, I rise to a point of order.
The
hour of 11:30 having been fixed as the time for other business
we should confine our attention
simply to the receipt of invita¬
tions from these different cities which are seeking the 1911
Convention.
The Chairman

:
The Chair would rule that the point of order
taken, as the time is now 11:30, and we are all grateful
for the splendid speech of the seconder of San Antonio.

is well

Mr. Remmel:

Executive

Council by our Clearing House Association and by our Chamber
of Commerce—the city was visited by Col. Farnsworth, your

have.

The Chairman says that I have to
quit, and I always respect
the will of the Chair.
I thank you.
(Applause.)
The Chairman:
Are there any other invitations ?
Mr. Remmel (Arkansas) :
Mr. Chairman and Fellow Bank¬

loyal allegiance.

The

in addition to all of that that you will increase

membership, you will improve the possibilities of the
Association; and Texas has produced some bankers in her time.
your

The Chairman

That is
:

very

fine reception, Mr. Chairman.

The point of order—

Mr. Remmel:

The point of order, I presume, is well taken ;
try to show some courtesy to our neighbors in the
Southern country, and when we extend them an invitation to
say a word in which they are interested we usually take off our
hats and say, “Thank you, gentlemen ; we appreciate the cour¬
tesy.”
And I will be brief in what I have to say, because I'
have something to say for Texas, and I regret very much that
the Chairman of this Convention has recoghized that point of
I thought in this coutnry of ours and in this Conven¬
order.
tion particularly when we have only had two days’ session—
(Calls from many members for order.) "
The Chairman:
Gentlemen, you have heard the point of

but

order.
Mr. Miller

(Richmond) : Mr. Chairman, I move that
gentleman five minutes.
The motion was duly seconded and carried.

give

the

Mr. Remmel:

I will be brief in what I have to say.

I want
friends, Come to the State which twelve years
ago sent on her regiments of cowboys and college men, that
were led by as intrepid
a leader as ever faced the cannon’s
mouth in the midst of carnage, and who is today the foremost
private citizen in the world. I want to ask you to come to that
State and you will receive the welcome that will be equal to
anything that you have had in any of these other cities, includ¬
ing this great city of Iios Angeles, the memory of whose royal
and lavish entertainment we will carry down through the years
to say to you, my

our

remembrance.

Now, Mr. Chairman, I want to say this for San Antonio and
It is an imperial State, and as the
people of Texas:
gentleman has said about her cotton crop, it is worth the
bankers’ consideration.
Last year she raised one-third of the
cotton crop of America, and when her land is fully under cul¬
tivation will raise over eight hundred million dollars’ worth of
cotton a year, and it is worth while for you bankers to consider
Texas and her future possibilities and her future banking ac¬
counts.
It is worth consideration.
And you gentlemen that
for the

four hundred millions of dollars invested in her rail¬

have

over

road

bonds

in your strong boxes ought to come and see the
physical condition of those properties instead of sending a
representative there.
See them with your own eyes.
And-1
want to say just a word for my own State.
When you come
through Arkansas take a plunge in the healing waters of our
famous Hot Springs and be cleansed.
(Laughter.) That is our

BANKING
perpetual youth. And when you go into the Hot
Springs country remember you are crossing the greatest
fields in the world, worth twenty millions of dollars; and we
also want you to stop in and let us pin a diamond on your lapel
to present to your daughters, the purest of the earth, and re¬
member in your travels through Arkansas and Texas that you
are most heartily welcome, and that we are glad to have you
among us, and when your labors have been completed we will
bid you Godspeed on your homeward journey.
(Applause.)

fountain of

There are two other invitations.

Th$ Chairman:
A Member:

Mr. Chairman, I would like to have two minutes

word for Texas.

to say a

The Chair cannot

You are out of order.

Chairman:

The

recognize the gentleman. There are two other invitations: One
is from the Niagara Falls Bureau of Conventions, and the other
from the Convention Bureau of St. Louis, which will also go
with the others in the regular order that may be determined
by this Convention.
Mr. Law:
Mr. Chairman, I now renew my motion that the
consideration of these invitations be left to the Executive
Council; and in doing so I wish to disclaim any intention of
discourtesy to anybody.

I simply wish to conserve the time of
proceed with its regular business

this Convention so that it may

heretofore arranged.

Motion

duly seconded and carried.

Chairman:

The

motion is carried, and the invitations
the Executive Council.

The

will be considered by

CURRENCY
We

have

rare

with

treat this morning in a currency

discussion

the part of two very noted gentlemen, and before introducing
the first I wish to strongly urge you gentlemen to remain in

discourse, because I am
attention a number of
points which have not, probably, been brought before you in
the past and in which you will surely be interested, and I know
that his speech is brief.
I now take a great deal of pleasure
in introducing one of the foremost members of Congress, who,
after considerable urging, and only perhaps, after having a num¬
ber of his friends, on our behalf, ask him to be with us, was
able to make his arrangements so as to leave his State and come
this long journey to make this address to you.
I now take a
great deal of pleasure in introducing to you Hon. Theodore F.
Burton, United States Senator from Ohio.
(Great applause.)

your seats until the second finishes his
confident that he will bring to your

Monetary Commission.

[Senator Burton’s address in full will be found on page

134.]

Gentlemen, there is every reason why you
should remain in your seats.
The next speaker will not con¬
sume more than fifteen or twenty minutes, he assures me, and
as he will speak from the firing line of practical experience I
President:

will be interested in what he will have to say. Be¬
him, however, I have been requested to an¬
nounce that the photographer wishes to see you upon the ad¬
journment of this session; also that the Chairman of our
Executive Council has an acknowledgment of the $5,000 gift
to the sufferers from the explosion the other evening, which he
would like to read to you and which I know you will desire

know

fore

you

introducing

to hear.

Mr.

Livingston then read the following
THE

TIMES

MIRROR
Los

To the

Members of the American

communication:

COMPANY.
Angeles, Cal., Oct. 5, 1910.

Bankers’ Association.

its members with
effective action taken yes¬
terday in the form of voting a literal sum, to wit, $5,000, for the
relief of the stricken families of the faithful workers in the service
of the Los Angeles Times who fell at their posts of duty in the awful
holocaust of last Saturday morning.
I speak for myself, the Los
Angeles Times, and for all those engaged in producing it.
I also express my high appreciation of your prompt and significant
action in unanimously condemning the stupendous crime committed by
the conspirators and murderers.
Such action was to be expected of a
body of brave business men such as you are, and nothing less pro¬
Gentlemen:

have to thank the Association and

deep gratitude for its prompt, strong and

nounced

your

reaffirm

equal rights for all citizens under the Constitution. I now
and reassert the declaration which I have so often made,

personally and also through The Times, in the past: “We stand for
the doctrine that every law-abiding American citizen has the lawful
right to pursue, unhampered and undisturbed, any lawful occupation
his choice In a lawful way, aud to be protected in that right by

the whole power

of the State and of the nation, if need be.”

complete universal enforcement of this vital
principle can save the Republic and enable It to fulfill its true des¬
tiny; for true it Is that freedom in the industries is a principle no
less sacred than are religious freedom, political freedom or personal
Nothing less than

freedom.

the senti¬

Before Introducing the next speaker, there is

from the city of San Francisco which I know you
will all be glad to hear, which will be presented by Mr. Lynch,
Vice-President of the First National Bank of that city.

Gentlemen, my subject is a big one but my story
The year 1915 will witness the completion of
the greatest undertaking ever begun in the history of the»
world, the cutting through of the Isthmus of Darien, from
It has been deemed proper
which Balboa first saw the Pacific.
that that event should be celebrated by a great exposition.
The
city of San Francisco, backed by the State of California and
the whole Pacific Coast, is going to hold that exposition, and
the Clearing House of San Francisco, of which I have the honor
of being President, has passed unanimously a resolution inviting
the American Bankers’ Association to meet in San Francisco
Gentlemen, I tender you that invita¬
during that exposition.
tion, and I promise you our utmost endeavor to entertain you.
Thank you.
(Great applause.)
The President:
Gentlemen, it affords me a very great deal
of pleasure to introduce to you one of your own number, Mr.
Frank B. Anderson, President of the Bank of California, of
Mr.

Lynch :

short.

will

San Francisco.

Pacific Coast’s Need for

Banking and Currency Reform.

[Mr. Anderson’s paper is printed on page
Gentlemen,

President:

The

there

are

123.]

just

two

announce¬

remember the Executive Council
meeting—those who are members at present and the new
members as well—which will be held in Choral Hall this after¬
noon immediately after the adjournment of the afternoon ses¬
sion of the Association.
The other is the validation of your
railroad certificates by the agent at his office at 553 South
The time has arrived for adjournment; a mo¬
Spring street.
One

ments.

for

you

tion will be in order.

duly

Upon motion,
adjourned.

seconded,

the

Convention thereupon

AFTERNOON SESSION.
Chairman

The Convention

will come to order.

The

regular order of business will be the discussion of practical
banking questions, and the rule would limit such discussions
Is there any
under the five minute rule to all delegates.
gentleman that would like to bring up any topic at this time?
(There was no response.)
I don’t believe it is an absence of
There is
topics; I imagine it is an absence of attendance.
one Section report, omitted at the morning session, and that is
the report from the Institute of Banking Section.
Is this
Section ready to make its report?
(There was no response.)
That we will hold over until the proper officer comes into the

meeting.
Mr. Watts :

Mr. Chairman, in view of the fact that

the ad¬

journment was a bit late for the noon recess, and that the
delegates will probably be a little slower in coming to the
meeting, I move that we take a recess of fifteen minutes before
proceeding with the program.
(The motion was seconded and carried.)
(A fifteen minute recess was taken.)
The Chairman : Gentlemen, the recess period having expired,
you will please come to order.
We have with us this afternoon
as a speaker, a gentleman whom I am sure you will all be more
than glad to hear.
For twelve years he was the Referee in
Bankruptcy in the City of Cleveland, and perhaps it is of
special interest in that connection you may be glad
to
learn that he was the referee in the Cassie Chadwick case.
Further than that, he is now a special counsel for the National
Credit Mens’ Association, and during the past session of Con¬
gress he was the head and front of the changes in the bank¬
ruptcy law that were urged upon and accepted by that body.
I therefore take a great deal of pleasure in introducing to you
this afternoon Mr. Harold Remington of the city of New York.
Bankers and

its great print¬

ing and publishing equipment completely, in order that we may go on
with the battle for civil liberty and industrial freedom, for justice,
and

all American citizens who entertain

message

part could have been anticipated.

We will rebuild the demolished building and restore

law

for

The President:
a

The

and

expressed.
am, gentlemen,
Very truly your friend,
H. G. OTIS, President and General Manager.

ments here

DISCUSSION.

The Work of the

173

SECTION

Bankruptcy Law.

[Mr. Remington’s address will
Mr.

that

Hamilton:

be found on page 125.]

The President

in his address recommended

rendered to the Currency
Bankers’ Association in carrying

further assistance might be

some

Commission

of the American

work, that this was advisable in order that all sec¬
country might be properly represented, and the
conditions affecting those localities might be considered.
In
accordance with his views expressed, I present the following

their

tions

the

resolution

Resolved, That the Currency Commission of the American Bankers’
be and is hereby authorized to call to its assistance in

Association
the

consideration of banking

and others

from any

and currency deliberations such bankers

part of the country that it may deem advisable

174
to

BANKERS'

make

its

work

national

scope,

that

may

secure

CONVENTION.

proper

legislation.

EXPENDITURES.

Salaries of Educational Director and other
employees

The Chairman:
Mr. Hamilton :

you offer that

Yes sir, and

Motion seconded, put and Carried.
Mr. Hamilton:
Mr. Chairman, I have another resolution
that I believe will be of interest to all
the bankers throughout
the United States :

Chattanooga

.Authorship of study

shipment of silver to

this

Association,

tend

harmonize

the

Motion
The

Total

Are

there

communications

any

The

following is

from

extract

meeting of the Executive Council

the

following resolution

motion,
adopted:

seconded

from

May,

Mr.

Gurney,

mitted the

offered by Mr. Wexler, and on
several members of the Council

the

Resolved:

American

That

brated and

the

commemorated

said

sense

Association

City, New Jersey, that the

this

great

the

day

Executive
assembled

event shall

by the holding of

Council
in

be properly

exposition at

Atlantic

con¬

at which the products of our farms, fields,
and mines, of our manufactories and our
great mechanical achieve¬
ments, can be properly exhibited in conjunction with the
products of
rest

the

world, and particularly
Republics and the islands of

American

recommends
next

and

requests

the

American

most

favor

World’s

Panama

South

and

Central

Pacific

Ocean; and it
Association, at its

Bankers’

meeting at Los Augeles, California, the

tions

the

passage of proper resolu¬

Exposition,

held

years

Bankers’

Association.

Institute of Banking is now ten years old.
hazy, unformed idea has been nurtured and

of ambitious

scores

and

persevering bank clerks into

education, whose graduates
there is

has been

are

officers

banks

every

In that

developed
system of

these

spirit that animates Los
and such entertainment
Resolved:

addition

of Los
And

efforts

fix

and

maintain

graduates, 75 students have passed the required
“Banking and Finance” and 1&7 in “Commercial and

Executive Council of the American Bankers’ Association and
the annual
Com'ention of the American Institute of
Banking Section.
This
action makes all members of the American Bankers’
Association asso¬
ciate members of the American

Under

this

the

annual

Institute of Banking, and consolidates

the Bulletin.

arrangement

associate

member

appropriation

the

Association

pays

constituted

annual

heretofore

made

and

reduction

and

Finance”

and

tuition

Following is the

dues
for

fees

for Institute study

“Commercial

and

Institute

75c.

Institute
are

courses

for

instead of
purposes.

entitled to

“Banking

Banking Law.”

financial statement of the institution for the fiscal

year:

RECEIPTS.
Balance on hand September
1st, 1909
Chapter dues, including Bulletin, less exchange
Fellowship dues and per capita tax

Miscellaneous
American

Total

Income

Bankers’

receipts

about

the

American

meeting place,

our

and

Angeles, whose doors have been open to

Association

for

Bankers’«

the courtesies

us.

Resolved:
and
of

the

various

That

these resolutions be spread in full
engrossed copy thereof be transmitted
Los Angeles Clearing House.

the

clubs

suitable

SPENCER.
R.

our

the

JR..

PRESTON.
GURNEY,
Chairman.

Mr.

Gurney:

Mr.

President,

the

move

adoption

the

(This motion was duly seconded.)
President:
Gentlemen, jrou have heard Mr. Gurney’s
resolution.
It has been supported.
All those in favor of the
The

resolution

read

(The motion

by Mr. Gurney will

say aye.

unanimously carried.)

was

The President:
The next order will be the
report of the
Committee on Nominations, Mr. Radford Chairman.
Mr. Radford, on behalf of the Committee on
Nominations,
then

submitted

the

following report:

Report of Nominating Committee.
For

President:

ville,

$2,814.86
10,429.57
1,281.20
60.00

7,000.00

For

For members of
o?

Watts,

Vice-President:

1st

ings Bank, Detroit,
State

President First

National

Bank,

Nash¬

taries

Ihe

Alabama:

William

Livingstone.

President

Dime

Sav¬

Mich.

the Executive

Associations

and

Council

certified

nominated

this

Association

Conventions
the

Secre¬

Bank.

Birm¬

Commerce,

Little

respective State Association:

II.

Barr,

Vice-President

First

National

ingham.
Arkansas:

George

Rogers,

Cashier

Bank

Rock.

Colorado:

Gordon

Fletcher,
Jones,

President Bank of
President

United

Watsonville.

States

National

Bank,

Denver.

Connecticut:
ional

Bank,

Georgia:

New

Barlow,

Vice-President

and

Cashier

Yale

Nat¬

Haven.

Ilillyer,

Vice-President

American

National

Bank,

Macon.
Illinois:

Willson,

President Peoples’

Bank,

Bloomington.

Indiana: H. C. Johnson, President Seymour National
Bank, Seymour.
Iowa: E. L. Johnson, Vice-President Leavett &
Johnson Trust Co.,

Waterloo.

Maryland:

Albert

Graham,

Cashier

Citizens’

National

Bank,

National

B&nk,

Baltimore.

Michigan:

Emory

Clark,

Order,

Vice-President

First

Detroit.

Minnesota: George

$21,585.63

Tenn.

Calfornia:
the

Officers and employees of members of the Association
50c.

the

Correspondence Chapter (meaning members of the Institute
outside of Chapter Cities) has been
superseded by the new plan of
associate membership, recently entered into
by the joint action of the

each

members

The

and

possible.

the

Banking Law.”

the Journal

That

Baptist Church and the employes of the Auditorium

received

Institute Alumni.

examination

more than mere
language
mingled an admiration for the
Angeles, and which alone makes such

city

recognized standard of
banking education by means of official examinations and issuance of
certificates is evidenced by the list of 144 Institute
Graduates known
as

courtesies

along with this

them, and mention with especial gratitude the ladies of Los
Angeles,
the press, the automobile
owners, the Los Angeles Clearing House and
affiliated banks, the telephone
companies, the trustees of the Temple

city where

chapter and many outside of chapter cities.
There are now 56 chapters of the
Institute, with a membership of
9,552, all of which are conducting some plan of educating “Bankers in
Banking.”
To graduates of the courses certificates are
given.
The
success

and

has

it is unobtrusive.

Respectfully submitted.

The American

generous

resolution.

the American

ten

Association, assembled in their thirty-sixth annual convocation,
express
their sincere and hearty
appreciation of all that has been done for

AMERICAN INSTITUTE OF BANKING.
The Chairman :
Is there an officer of the Institute of Bank¬
ing Section present and ready to report? I will present Mr.
Downey, Chairman of the Executive Council of the American
Institute of Bankers.
To

Resolutions.

has

appreciate these numberless

President

move

hospitality

Therefore

the

its adoption.
Motion seconded, put and carried.
:

witnessed a rarely successful
Association, and its memories will never fade.
point and in every moment the hand of

express,

civic

Resolutions, sub¬

the

extended,

records,
Wexler

on behalf of the Committee

drawing to

every

been

fitting place in 1915.

Mr.

you have heard Mr. Downey’s
objection It will take the usual course

following report:

week

session

cele¬

venient and logical point,

the

The

can

it is

Bankers’

Gentlemen,

Report of Special Committee

was

Whereas: It is the intention of the Nation to
properly celebrate the
completion of the greatest and most beneficial work of this or
any
other age—the Panama Canal—
Be

1.903.87

and appear In the record.
The next order of business will be
the report of the Committee on
Resolutions.
Is its Chairman,
Mr. Gurney, in the room?

PANAMA EXPOSITION.
his

$19,681.76

August 31st, 1910

President:
If there is
report.

1910, which is self-explanatory:

The

1,477.67

$21,585.63

Executive Council?
Secretary Farnsworth:
the minutes of the

hand

The

seconded, put and carried.

Chairman:

150.00

($587.68)

expenditures

in the

its adoption.

move

765.00

416.60

sub-treasury

benefits of the Government.
I

1,215.12

>...

courses

($889.99), incidentals

Balance

appropriation would,

judgment

Postage

at its December session should

make sufficient appropriation to cover the free
various points in the United States;
And be it further resolved, that such

543.97

meeting

Rent of general office
Prize essay contest

resolved, by the American Bankers’ Association in thirty-sixth
annual convention assembled, that it is the sense of this
convention

Congress of the United States

663.36

convention

Executive Council annual

Be it

that the

7,342.89
1,048.00

Educational Director’s traveling expenses
Institute officers and committees

its adoption.

move

$6,059.15

Bulletin and other printing

resolution?

apolis.

Cashier

First

National

Bank,

Minne¬

BANKING
H.

Montana:

National

First

Cashier

Assistant

Yaeger,

Oklahoma: Jake

National

Caldwell, Vice-President United States

Victor B.

Omaha.

Oregon: E. A.

Vice-President Princeton Bank,

Howe,

Edward

Jersey:

Pennsylvania: Frank M. Horn, of Catasauqua.
South Carolina: T. B. Stackhouse, Vice-President

Bank,

York State National
President Fourth National Bank,

Ledyard Cogswell, President New

York:

G. Cannon,

James

Albany;
York.

New

Cincinnati; W. F.
Columbus.
Cashier American National Bank, Okla¬

Davis, Cashier First National Bank,

T. J.

Ohio:

President Commercial National Bank,

Hoffman,

W. Hogan,

Oklahoma:

President Susquehanna Trust &

Pennsylvania: John G. Reading,
Deposit Co., Williamsport.
South Carolina: W. D. Morgan,

Safe

President

Bank

Georgetown;

President Citizen’s National

Dunlap.

Waxa-

Bank,

100,

than

less

Council from States and Territories
in
American Bankers’ Association is
the total membership aggregating 629 members:

membership

the

where

Edward

For

the

National

Atlantic

President

Metcalf,

Provi¬

Bank,

member

Council

Executive

the

representing

Trust

the

For

North
of

member

Wacovia

President

Chairman;

Fries,

Winston-Salem,

Loan

Co.,

Trust

Executive

the

Council

Savings

the

representing

St.

Stephenson, Chairman;

member

For

Executive

the

representing

Council

Clearing

the

National

Commercial

member

For

Institute

the

Executive

American

Section:
Chairman;

Cashier

Downey,

Continental

National

nominated

the

Convention

Association

Secretaries

the

and

respective

the

State

Asso¬

Arkansas:

President First National Bank, Eutaw.
Reaves, Cashier German National Bank, Little

Barnes,

Alabama:

Alaska:

Cashier Prescott National Bank, Pres¬

Fredericks,

Arizona:

Cooper, of the Farmers’ Bank, Wilmington.
Wm. A. Mearns, of Lewis, Johnson &

Delaware: Ezekiel

Columbia:

International Banking Corporation,

Hanson, Manager

Mexico City.

Hampshire:

New

Ira
D.

Mexico:

New

President Bowman’s Bank & Trust

Bowman,

Chas.

Island:

Rhode

Westerly.

McCormick

& Co., Bankers,

Vice-President

Lamoille County

President

McCormick,

Utah:

President Washington Trust Company,

Perry,

Henry

Vermont:

Vice-President

Baird,

Jno.

Wyoming:

McFarland,

Hyde Park.

Bank,

Connecticut:

Cashier

Assistant

Houston,

National Bank,

First

Denver.

Georgia:

President Peoples’

Reese,

National Bank, Pensacola.

Lewis, Vice-President and Cashier Fourth

C. B.

National

Bank, Macon.

Cashier Coeur d’Alene Bank

Boyd Hamilton,

Idaho:

& Trust Co..

d’Alene.

Coeur

Vice-President

Russel,

Russel

Dunlap,

Co.,

Indiana:

President American Trust & Savings Co.,

Sonntag,

Bank,

Havana.

First National Bank, Honolulu.
Gerona-Neuva.

Hawaii: Cecil Brown, President
Isle

Pines:

Almute,

„

Rico:

Porto

Respectfully submitted,
RADFORD.

Chairman

Nominating Committee.

W. G. FITZWILSON, Secretary.

S.—There

are

several Stales having

ciation of less than

membership in this Asso¬

hundred members which the Nominating Com¬

nomination
the wish of this
Convention to make a nomination for such States, that action be
taken at this time authorizing the executive officers to furnish the
Your attention is also called to the fact that no
necessary names.

mittee of Vice-Presidents for these States failed to make a
for

Vice-President.

It is suggested if it is not

Vice-President for North Dakota has been made as

nomination

for

advice

Andrew

Illinois:

Jacksonville.

National

Vice-President Trust Company of Cuba,

Davis,

Norman

Cuba:

Grilling, Cashier City National Bank, Danbury.

First

Castle.

President of the Bank of California

San Francisco.

Association,

Colorado:

Head National

Indian

Cashier

Harris,

Bank, Nashua.

JOHN D.

Frank B. Anderson,

California:

Co.,

Washington.

Rock.

Florida:

100,

American Bankers’ Association is less than
membership aggregating 628 members.

total

Canada:

Territories as
the State Associations and certified to
States

different

ciations:

National

Kenosha.

and territories where the

membership in the
the

New

President; Sedalia, Mo.

Keyser,

Vice-President

For

Organization

Section:

Secretaries
F.

President First National Bank,

Brown,

0. C.

Vice-Presidents of the different States

National

the Executive Council representing the

member of

For

Wheeling.

Virginia,

Wisconsin:

Salt Lake City.

Indianapolis.

Bank,

this

Chicago, Ill.
Council representing

Bank,

the

Banking
B.

Indiana:

Continental

Vice-President

Chairman;

Vochten,

Van

Ralph

Trust Co., Tacoma.
National Bank of

Co., Las Cruces.

House Section:

Washington: Geo. B. Burke, Manager Bankers’
West Virginia: W. B.
Irvine, Vice-President

Nevada:

Second Vice-President and Treasurer
Joseph County Savings Bank, South Bend, Ind.

Bankers, Newport

Geo.

News.

Mexico:

Carolina.

Section:

Bank

Bank, San Angelo.

Schmelz, of Schmelz Bros.,

District

Company Section:
F.

Webb, President First National

Geo. E.

Texas:

cott.

dence,

the Executive

member

For

nooga.

For

hacble.

National Loan

Bank, Columbia, and President Bank of Dillon, Dillon.
South Dakota: F. C. Danforth, President Citizens’ Bank, Parker.
Tennessee: C. A. Lyerly, President First National Bank, Chatta¬
Exchange

West

Georgetown.
Texas:

Virginia:

City*

homa

Easton, President Citizens’ National Bank, Antlers.
Wyld, Vice-President Security Savings & Trust Co.,

Portland.

Princeton.
New

National Bank of Commerce,

Vice-President

Crane,

Toledo.

Nebraska:

New

Ohio:

Bank,

Lewistown.

Bank,

175

SECTION

not been received

has

ciation of

from the

North Dakota

Bankers’ Asso¬

same.

Evansville.

Kent

Iowa:

Cedar

Cashier

Ferman,

Rapids

Cedar

National

Bank,

Kansas:

City.
Kentucky:

President

Smith.

George

Lewis,

People’s

the

National

Farmers’

Bank,

National

Kansas

Bank,

Glasgow.
Louisiana:
New

Vice-President Hibernia Bank & Trust Co.,

Pool,

Orleans.

Maine:

Kennard, Cashier Rumford National Bank, Rumford

Edw.

Falls.

Maryland:

Rising

(Continuing) You will notice there are some
for instance, North Dakota has not yet certified a
member from that State, and when the Vice-Presidents met
from the
different
States, or Committees to nominate the
Vice-Presidents, some of these were not represented.
We
therefore present this in its incomplete form.
Authority can
be left wdth the excutive officers to fill out the number or it
can be
done from the floor.
I move you, then, the adoption
of the report, with authority to the executive officers to fill
in the names as they are submitted from the various States. *
The Chairman:
That motion is for the report to be adopted

II.

President National Bank of Rising Sun,

Haines,

Sun.
Jos.

Massachusetts:

Stevens,

President

First

National

F.
Geo.

Cashier First National Bank, Bay City.
Power,
President
Second
National Bank,

Browne,
C.

Mississippi: O. B. Quin, of the First National Bank, McComb City.
Missouri: Samuel Sharp, Cashier Montgomery County Bank, Mont¬

City.

Montana:

Dutton,

Assistant

Cashier

First

National

Bank,

Butte.
J. W. Welpton, President Exchange Bank, Ogellala.
Jersey: I. Snowden Haines, Cashier Mechanics National Bank,

Nebraska:
New

Burlington.
York:

New

Cornelius

National Bank,
North

Bank,

Carolina:

Dakota:

Pugsley,

President

Westchester

County

Peekskill.

Wilmington.

North

whole.

carried.)

If there are no other nominations, I move the
election of all those who have been reported.
Of course, this
Mr.

Campbell:

only placing them in nomination; I now move their elec¬
(Seconded.)
The Chairman :
Gentlemen, you have heard Mr. Campbell’s
motion, which is supported. Are you ready for the question?
(Motion carried unanimously.)
The Chairman:
The gentlemen named in the report are
therefore elected to their respective positions.
I now take a great deal of pleasure in introducing to you
your newly elected President, Mr. Frank O. Watts, President
of the First National Bank, of Nashville, Tenn.
(Applause.)
Mr. Watts, as an active worker in the ranks of the Associa¬
tion, latterly as a member of the Executive Council and a
general officer of the Association, you have at all times shown

Paul.

gomery

Radford:

(The motion was duly seconded and

Minnesota:

St.

as,

whole.

Mr.

Bank,

Greenfield.

Michigan:

Radford:

Mr.

blanks,

Rapids.

Henry C.

McQueen,

President Murchison National

tion.

active

interest

its

affairs

and

have

proven

yourself

176

BANKERS'

worthy of the honor
member

your

which

community

have been

you

elected.

standing is such that

your

fitting that

CONVENTION.
a

today; and I assure you that so far as within me
lies,
will endeavor In every
possible way, and to the very best of
my ability to fulfill the duties of the
high office to which you
have elected me, to your satisfaction.
me

this Association should so honor
you at this time,
me a great deal of pleasure in
pinning this badge
of office upon your
noble breast, and not only to
heartily con¬
gratulate you but also to congratulate the
Association.
I have been
requested, Mr. Watts, to read to you a com¬
munication which has come to hand and is
addressed to you in
and it

this

gives

Again

Mr.

reads:

again,

gentlemen

Hamilton

the

American

EX-PRESIDENT

PIERSON.

Before going farther with the
deliberations,
I wish to rise to ask a
personal privilege.
I wish at this time
to express to the
retiring President, Mr. Lewis C.

“We,

a few of your Nashville friends and ad¬
unable to be present on the occasion of
your
election to the presidency
of the American Bankers’ Association,
and who deeply appreciate the
deservedly high honor that is
are

appreciation

Pierson,

the

President

tender

our

best wish for your future

happiness

and success.”

It is

by about forty of your Nashville friends.
(Applause.)
(A silver loving cup was handed to the
Also several large bouquets
REMARKS

were

THE

signed

incoming president.
platform.)

placed upon the
NEW

PRESIDENT.

President Watts :
Mr. President, Gentlemen of
the American
Bankers’ Association, and Ladies:
I trust you will
not con¬
sider it as showing
any lack of appreciation or that it in¬
dicates iu the slightest manner
that I do not give the
greatest
possible importance to your
action

bearing and
I

upon

appreciate

this

even

today upon my present
that, however, much

future, when

honor

I say

have

you

conferred

upon

me,

yet

this unexpected tribute
paid to me in this
far away land
by the friends of my home.
(Applause.)
I have felt,
gentlemen, that the honor that you have con¬
ferred upon me was not
entirely personal. I have felt that
you were not unmindful of the fact
that in selecting me as the
president of this great organization
that you were compli¬
menting the great volunteer State of Tennessee.
I believe I
may say without fear of
contradiction, and with a pardonable
pride, that I believe there is not a banker in
the State of Ten¬
nessee that would not
today feel complimented at this honor
you
have conferred upon me if ho
were in your midst.
(Applause.)
I feel that
you have complimented that
great section of the
country, the sunny South, and last but not
least, gentlemen,
I feel that you have
paid a compliment to my life
companion.
more

Gentlemen,

the circle that brought about this
result was
few years ago a small one,
a small band of
friends,
close personal friends,
having a faith and having a deter¬
mination in the city of St.

only

Louis, presented

candidate

for

the

you

position of councilman.
Later, gentlemen,
in the
city of Denver, this band of personal friends was
en¬
larged, and as a result of their efforts I was made
chairman of
your Executive Council.
It has been said
oft, and possibly
within the sound of
every ear in this gathering, that
by an
unwritten law of the Association
there was a succession of
office.
There is such an unwritten law.
I

there is

believe, gentlemen,

good reason for it.
1 believe that the best
interests
American bankers can be subserved
by that training
that is
necessary to fit one for the position to which
you
have elected me; but if I felt that
was
of

the

today I

cause
of that law, because of
that rule
pleasure of this occasion would be marred.
contrary, that it is the result of a

ship,

succession,

the
hope, upon the
feeling of friend¬

broadening

increasing faith in my willingness to serve the Amer¬
bankers in any position at
any time to the very best of
my ability.
I trust that that circle of friends
(Applause.)
during my term of office may continue to
increase, and if I
know my heart today, no act of
mine, even after I have be¬
come a member of that
influential club, the Council Club, no act
of mine shall prevent that
circle increasing, and I shall- do
an

my power, even when I am beyond the.
magic
official life—I shall do
everything in my power to
advance the interests of the American
banker.
I thank you, gentlemen.
(Great
circle

Gentlemen

the

Convention, it gives

pleasure

beyond

my power of expression that the first official
act of mine shall
be the presentation to
you of your

Vice-President elect.
(Ap¬
in presenting to him this official

plause.)
I take pleasure
badge of the office.
My association with
that

have

feeling for him

him

has

been

such

runs

the

pathway,

Gentlemen, I present to
Mr. Wm.
Livingstone :

American Bankers’ Association

That
There
That

And

possibly

billows

are

never
are

will

of the

waves

can

find

far

break
of

the

very

the

financial

the

interests

that

dear mother

honor

the

United

presentation
silver

of yours,

States.

But

the

esteem

and

coffee

service

crowning
cause

our

feeble

sterling

appreciation of your services.
(Great
behalf of the Local Committee of the city of
also requested to present to you this token of

applause.) And on
Los Angeles, I am
their

who is here to witness

of this tea

you

token of

our

and

appreciation.
(The speaker presents to the
large floral offering.) (Great applause.)
Mr. J. M. Elliott (Los
Angeles) Mr. Pierson, I bear in my
hand this gold button, marked “President
1909,” and on the
reverse
“Lewis E. Pierson, New York City.”
No man who

retiring President

has

ever
served this Association deserves this button better
than yourself.
You retire from the position of President of this
Association writh the love, honor, and affection of all its
members.
(Great applause.)

Mr.
There

Pierson:
are

Mr.

times

Hamilton,

when

words

Mr.

fail

Elliott,

and

Gentlemen:

what the heart
desires to say.
I can only say to you that these tokens of
your esteem are more deeply appreciated than I can ever
tell,
and I can assure you, gentlemen, that
they will always, this
silver service

evidence
I

men.

what

thank

President

express

particularly, be treasured by

that

you.

Watts:

my loved ones as an
largely rested with you gentle¬
(Great applause.)
Gentlemen, the business as provided on
has

official program is at an end. It is most fitting that such
should end by such a tribute to such a
retiring
officer.
(Applause.)
What is your pleasure, gentlemen?
your
a

convention

NEW

Mr. Rhoades

ing
the

DETECTIVE

AGENCY

APPROVED.

Mr. President, I would like to offer the follow¬
resolution—that the action of the Executive Council in
selection of the Burns & Sheridan Detective
Agency be
:

hereby approved.
(The motion

was

President Watts
this

resolution

duly seconded.)
It

moved and

adopted.

seconded, gentlemen, that
to the Constitution

According

twro-thirds vote is necessary on a resolution of that
character.
What is your pleasure?
Are you ready for the question?
(Calls for the question.)
President Watts :
As many as favor that motion will indi¬
cate it by saying aye.

(The motion

was

President Watts

duly carried.)

It is unanimously carried.
Gentlemen, as a representative of the Los
Angeles Clearing House and associated banks, some two years

Mr.

Elliott:

ago I invited you to come to this city in 1930.
I am thank¬
ful, we are all grateful to you, for this long trip that you have
taken, and we wish you God’s speed on your return
and

safe arrival at your homes.
MEETING

President

Watts:

the

Executive

The

Vice-Presfdent, has

EXECUTIVE

Chairman
an

journey,

(Applause.)

COUNCIL.

the

announcement

Executive Council,
make on behalf

Council.

ocean

Livingstone:
The Executive Council will meet imme¬
diately after the adjournment of the Convention in Choral
Hall.
We desire every member of the Executive Council
to be
prompt, because there is quite a little business to do, and a
great many are anxious to take the trains this evening for
their respective homes.
ADJOURNMENT.

human emotion

high

beach.

President Watts:

expression in speech.

appreciated very much
express,

out

that

Mr.

Someone has said somewhere,
the author I do not
remember, that
There

served this
active not only

glory of it all is the feeling of gratitude that it must

you your Vice-President elect.
Mr. President and Gentlemen

been

committees, of the Executive Council, and of the
membership
the Association.
(Great applause.)
It is surely not only
a source of pride to
you, but it must be a source of pride to
that family of yours, that
you have so creditably served the

and

Never grows the grass
upon it.

has

doubt about the wisdom of
your action.
My
is such that I may use
the simile of Hiawatha :

Straight between

(Applause.)

affairs of his State Section,
having received the honors
Association of being its chief executive,
officer, but
has gone on and received the
honors from this Association.
His usefulness does not end with
his retirement as President
of this Association,
yet it is necessary that he must give way
to the coming of others to fill this
high position.
It must, Mr.
Pierson, be a matter of great satisfaction and
pride to you to know that you have the best wishes of all the

applause.)

faithfully and well.

the

from

ican

everything in

of the American Bankers’ Association.
is needless for me to
say that Mr. Pierson has

Association

being honored

our

magnificent service that he has rendered
the bankers of the United States
through his official acts as

being bestowed

upon one of our own, desire to record and to
congratulations to both the associations and
your¬
self upon the
As an evidence of our
accomplishment.
high
esteem, we present you with this loving
cup, and with it our

Bankers’

you.

APPRECIATION

city.

mirers who

and

Association, I thank

highly than
which

you

words

have

can

paid

Gentlemeu, what is your further pleasure?
A Member :
I move we now adjourn.
(This motion was duly seconded, and carried.)
President Watts:
I declare this Convention now adjourned.

-^JiVLZ

f*.V
:

r!g§B

Trust Company Secti ON
■?

■

„

’

American Bankers’ Association
Fifteenth Annual

Meeting, Held

Los Angeles, Cal., October Fifth, 1910

«?

INDEX TO TRUST COMPANY PROCEEDINGS

Should Bank

Ownership Be by Certificates?
Advantage of Loans on Marketable Collateral
Advisability of Auditing Departments
-

Interest of Life-Tenant and Remainder-Man

Responsibilities for Investment to Public—
Address by F. J. Parsons
Address by Dimner Beeber -

Page 177
Page 179
Page 180
Page 182
Page 187
Page 189

Shall There Be Charge for Small Accounts?
Personal Element in Trust Company Work
Detailed

Proceedings Address by President
Report of Secretary
Report of Executive Committee Report of Committee on Protective Laws

Page 184
Page 186

Page 192
Page 193
Page 196
Page 195
Page 196

“Should the

Ownership of Shares in Banks Continue to Be Repre¬
sented by Certificates Commercially Negotiable,
That Is to Say, Pledgable ? ”
By Stuyvesant

In order to include trust

and State

companies, as well as National
banks, in this discussion, it is necessary to use

the word “bank” in its broad sense, as

Fish, New York.
There is nothing, however, in the law which re¬
quires anything of this sort, nor is any such practice gen¬

of stock.

meaning a “moneyed
corporation.” Our laws wisely throw around moneyed
corporations many safeguards and restrictions, to which
other corporations for gain are not subjected. Among them
are the
requirements of our “national bank act” and of the
banking laws of nearly all of our States, that every
shareholder in a bank shall be held individually respon¬
sible and liable to its creditors, to the extent of the amount
of their stock, in addition to the amount invested in such

eral among our banks.

shares.

its

The

bank, exclusive of deposits, are there¬
its capital and surplus,
but by the sum of its capital, surplus and its stockholders’
In their competition for business our greatest
liability.
resources

fore not to be measured solely by

banks have not hesitated to advertise this
stockholders

On that basis
of

our

panies

find

that, in 1909, the total resources
22,491 National banks, State banks and trust com¬
we

$1,800,036,368
1,834,625,428
1,800,036,368

That is to say, the stockholders’
one-third of the net

nearly four-fifths the
mands

States.
some

only

as to

also

resources

sum

liability comprises about
banks, and exceeds by

our

total of the net funded debt of the

The vastness

the amount involved de¬

consideration by the banking community, not

the continued solvency of the shareholders, but
their capacity to meet possible calls; the fair

presumption being that those who have pledged their shares
are not in as good plight to meet such calls as are those
who own them outright, free and unencumbered.
It may
be that some of our banks provide by their by-laws—as
banks in other countries do—for a scrutiny by the officers
and directors of new names offered as potential transferees

the lender.

liability thereon, bank shares

loan may prove

If I remember

some
an

years

ago:

Ohio bank in

source

correctly,

servative banks in New York had

one

of added loss to

our

most con¬

bank, and acting from excess
New York bank transferred them into the
officers

experience of this sort
loan to the president of
his individual capacity, on the security of

Having made

shares of his

employees.

of caution, the
name

one

The borrower failed, his bank

failed, and its stockholders were assessed very heavily, pos¬
sibly up to the full par value of their holdings. It is only
fair to add that the New York bank (with which, I beg
you to believe, I was and am in no way related) stood
manfully by and protected its employee in this matter, but,
of course, had to face a large added loss in so doing.
My purpose is. not, however, to decry bank stocks as se¬
curity for loans, but to inquire whether there are not rea¬
sons

were:

Capital stock
Surplus and undivided profits
Stockholders* liability

United

liability of their

part of the bank’s resources.

In view of the holders’

collateral to

of business prudence and of

public policy demanding
longer

that the certificates for such stock should not much
be available as collateral for loans.

Experience in New York during the panic of 1907 affords
instance in point.
Despite differences of opinion as to the prime cause of
this our latest panic, no one can question that the
ultimate
cause
which precipitated it was the breaking down of
an

“chains of banks.”

Those chains of banks had been

cre¬

ated

through loans being made by one bank against the
pledge of shares of another in the chain, which in turn lent
on the stock of a third, and so on around
the circle. When,
toward the close of October, 1907, in a time of
general stress,
a close scrutiny was
made, those bubbles collapsed and crisis
ensued

immediately.
Legislature of the State of New York sought in 1908
to guard against a recurrence of this evil
by amending its
banking law so as to provide that, “No corporation to which
The

BANKERS’

178

CONVENTION.

hereafter make a loan, se¬
moneyed corporation, if by
the making of such Joan the total stock of such other
moneyed corporation held by it as collateral will exceed in
the aggregate ten per centum of the capital stock of such
other moneyed corporation.”
(Laws of 1908, Chap. 169,
Sec. 25.)
The effect of this law, however, is simply to require that
those who may now wish to create chains of banks shall
put up at least six links in their chain, whereby through
each bank holding nine per cent, of the capital of each of
the others, the group would collectively hold a majority of
all, *. e., fifty-four per cent. To cure the evil we must go

this chapter is applicable shall
cured by the stock of another

further.

what the situation is in Great
1855 the law was that all
shareholders in trading and banking companies were liable
in their persons and estates for the full amount of all the
debts of the corporation, except in the case of such com¬
panies (and there were very few of them) as had been char¬
tered by a special act of Parliament.
The only banking
company of that character of which we have any record is
the Bank of England.
It may

be interesting to

Britain.

Down

see

the year

of the act of 1855 the usual method
limit the stock¬
holders’ liability to the amount subscribed for by them re¬
spectively, to provide for a large capital—say a million of
Since the passage

with banks in Great Britain has been to

pounds—and to call in a certain proportion, say one-half
The

thereof.

called varies very considerably

amount

where one-half has been called the stock¬

different banks, but

position is substantially the same as that among
stockholders in the United States, except that calls may

holders’
our

be and
in

not

are

friend,

whom there is

tions

made,

they

with

are

growing busi¬

our

banks, solely

of insolvency.

cases

made to meet the exigencies of a

are

and

ness

Mr. Lloyd, of The London Statist—than
higher authority—in reply to these ques¬

(1)

joint-stock

your

stock

which are, or

banks issue certificates of
can be, made the subject of

hypothecation?
(2) Do banks and others in Great Britain lend on the
security of bank shares?
(3) About what time did the practice of issuing certifi¬
cates of stock in a commercially negotiable form
begin in Great Britain?
answers

follows:

“No British bank lends upon the shares of another
bank

matter of strict

has the first lien

bank
not

waive

that

lien

business, (1) because each

its

because

own

gets

shares
a

and

will

notice from

another bank that it has lent upon them, and (2) be¬
cause if to overcome that difficulty it registered the
shares

in its

own

for the uncalled

name

it would make itself liable

capital, which

London

tells

that

bank would do.
experienced bankers in

“One of the ablest and most
his

long experience he has
never known of a loan being made by a bank even on
the certificates of the Bank of England, and that in
me

the Case of other banks there may
case where a banker runs a risk to
whom he does not like to offend

be an occasional
oblige a customer
by any means; yet it

known of

unusual that he has

never

instance.

“With
of

regard to the issue of certificates, the Bank
England, I think I am right in saying, has issued

them from the
ficates

first, but other banks have issued certi¬
only since limited liability was introduced.”

The Act of Parliament

incorporating the Bank of Eng¬

land specifically provided that “tallies,” or certificates should

:'<•»

bank, and that such tallies should be transferable. It was
not, howTever, at that time (toward the end of the seven¬
teenth century) customary to charter companies of any
sort with transferable shares, but rather the exception,
and, if I mistake not, there are today, in England, cor¬
porations which do not issue any certificates of stock
whatever.
The custom in this

country is, however, of such long
standing with respect to the issue of stock certificates that
it would seem undesirable by statute, or by by-law, to dis¬
continue their issuance. All that one could suggest would
be that, for the present at least, the by-laws of the several
banks should provide that in future certificates be issued
in form not commercially negotiable—that is to say, not
pledgable—and that no future transfers be permitted, ex¬
cept subject to the approval of the board of directors.
Our banks do not, as the British banks do, hold a first
lien on their own shares, but the directors of our banks,
as

trustees

for the

stockholders in their

U, i * <'

;

whole

body of stockholders, and

right, are interested to see that
no weak, and especially no insolvent or
“dummy” stock¬
holders, be admitted as partners; and it is in order to
bring

own

for discussion

undertaken the

question of this sort that I have

writing of this

paper,

believing that the

reform should be

made, and made from the inside, well in
advance of any laws, Federal or State, which might be

proposed in that behalf.
If,

however, any

laws restraining the transfer

pledgability of bank stocks shall be enacted, it

goes

and

without

saying that in justice to stockholders who have bought and
practice now prevail¬
ing, such new laws should be made to take effect, if at
all, at some distant date, say two or three years in the fu¬
ture, so as to afford the present holders of bank shares
ample time in which to adjust themselves to any changes
hold their shares under the laws and

which may be effected by statute.
In so far as directors are concerned,
Act provides that

the National Bank
“Every director must own in his own

right at least ten shares of the capital stock,” except in
the very smallest banks where the requirement is five
shares, and that each director shall make oath “that he is
the owner in good faith and in his own right, of the num¬
ber of shares of stock required by this title, subscribed by
him or standing in his name on the books of the associa¬
tion, and that the same is not hypothecated or in any way
pledged as security for any loan or debt.”
If it is right to require this of directors, why is it not
both wise and prudent to require that the stockholders in
an institution which trades upon credit based upon the
stockholders’ liability, shall at all times own in good faith
and in their own right the number of shares standing in
their names respectively, and that such shares, or the evi¬
dences of them, be not hypothecated or in any way pledged
as security for any loan or debt?
The laws of the State of Illinois have for

than

twenty years required that banks organized thereunder
keep of record, in the office of the recorder of deeds
of the county in which the bank is situated, a complete list
of all stockholders, with the number of shares held by
shall

each,

which

lists

annually

are

published

the

news¬

papers.
As there is this vast

liability on the part of the stock¬
holders,
twenty thousand banks are in daily rela¬
tion with their depositors, with the holders of depositors*
as our

checks and with each
instruments

other, and

cannot be

the credits and credit

granted by, and passed between,

form the life’s blood of

our

„

our

banks

whole commerce, the question

inquired into too thoroughly,

.*v;
•f O

contributed toward the stock of the

be issued for moneys

or too soon.

TRUST

The

Advantage to

COMPANY

the

William

Poillon, Vice-President The Mercantile Trust Company, New York City.

Mr. President and Gentlemen:
We

are

amount sufficient to

familiar with the claim, of many years’

stand¬

ing, that no class of bank loans is so safe and desirable
as good, double-named
commercial paper, and this is al¬
most universally accepted as true by the bankers of the
country.
Nevertheless, I am of the opinion that, year by year, a
larger percentage of the total loans of the banking institu¬
tions of the United States will be made
upon marketable
collateral rather than upon unsecured
personal credit.
In the term “marketable collateral” I include loans
upon

commodities, such

grain, cotton, live stock, coal,

and metals, as well as bonds and stocks of
and corporations.
is

amount

that only a small percentage
of commercial paper discounted by

true

ores

municipalities
of the large
banks is de¬

faulted upon, yet the cause of the failure of hundreds of

banking institutions in the United States has undoubtedly
been the inability of these institutions to realize
upon their
discounts to customers at

maturity, even in times of no
particular monetary stringency; whereas, if only part of
these loans had been secured by marketable
collateral, pay¬
ment would have been made at
maturity, in most cases,
when required. This would have been
possible because the
borower, in all probability, would have been able to secure
a renewal
elsewhere, failing which a sufficient amount of
the collateral could have been sold to
liquidate the loan.
For the benefit of those
present who are not entirely fa¬
miliar with the customs
governing loans to banking and
brokerage houses by New York banking institutions, I
will say that such loans are made almost
exclusively upon
stocks and bonds listed on the New York Stock
Exchange,
having an aggregate market value of twenty per cent, in
excess of the amount loaned
thereon; so that a loan of
$100,000 would be secured by marketable collateral worth
at least $120,000, and this
surplus margin the borrower
•

agrees
in the

179

Trust Company in Making Loans Upon
Marketable Collateral Rather Than Upon Personal Credit
By

SECTION.

to maintain at all times.
market

In the event of

prices of these securities

the

decline

borrower

makes up the deficiency
by depositing additional collateral.
At the maturity of these
loans, if the

lending institution
the borrower can invariably do this by
securing a loan elsewhere, when necessary, even though a
higher rate of interest might be required by the lender.
The major part of such loans is secured
by mixed col¬
desires repayment,

lateral, partly railroad and partly industrial securities,
and loans of this character command a lower rate of in¬
terest than in the case of loans secured
by only one or two
classes of collateral, which
require a larger percentage of
margin, sometimes

high

fifty

per cent, in excess of the

amount loaned thereon.

As the result

an experience of
twenty years with
loans, I venture the opinion that it possesses
a great
advantage over double-named commercial paper,
in that it has much greater
convertibility, and the addi¬
tional advantage that, even though the borrower has be¬
come insolvent, his
security has not necessarily become im¬
paired because of this occurrence; or, if the security is
not adequate, the borrower has not
necessarily become in¬
solvent. There have, of course, been occasions when both

this class of

these

misfortunes occurred at once, usually in times of
panic. In this event, experience has shown that the most

advantageous

for the lending institution to
the loan until the market value
a point
where it can be sold

course

has been to carry
collateral reaches

pursue
of the
for

liquidate the loan without loss. I am
strongly of the opinion that fully ninety per cent, of such
defaulted loans can be liquidated without loss to the
lender, if such loans were made with reasonable prudence
in the first instance.
It is self-evident

that, each year,

a larger proportion of
being transacted by corpora¬
tions, which is not strange, in view of their advantages

the business of the world is

over

the limitations of individuals.

Chief among these advantages, I consider the opportunity
afforded investors to take part in the profits of these cor¬

porations, without entering upon their management in any
way, by the purchase of their bond and stock issues. This
makes such investors, to all intents, partners in these en¬
terprises, and affords the corporations opportunities to
secure larger amounts of
capital than would be otherwise
available.
In the
as

well

past few

years the Congress of the United States,
the various States, has enacted legislation
regu¬

lating the issue of corporate securities and requiring greater
publicity in the matter of corporate operations. This has
resulted in the stock and bond issues of the
public utility,
transportation and larger industrial companies finding
greatly increased favor with the .most conservative in¬
vestors, not only in this country, but to an even greater
degree with European investors.
As the growth of the country causes continual
expan¬
sion in the volume of business transacted
by these corpora¬
tions, frequent new issues of bonds and stocks become nec¬
essary,

and security-holders often find it desirable

pro¬

loans upon

their present holdings, in order to take
advantage of attractive new offerings. As there seems to
be no check in sight to this
growing tendency, the oppor¬
tunity will be afforded to bankers throughout the country
to make loans upon such securities, to a
greater extent in
future than in the past; and I welcome such
opportunities
as
of the utmost importance to conservative
banking, to
the end that a part of each bank’s loans will be more
liquid
cure

in character than heretofore.
I have not dwelt upon
loans on commercial paper, as
you are all thoroughly familiar with that side of this sub¬

ject, but have endeavored to place before you the advan¬
tages of collateral loans as I have found them in my
experience.
The security at the base of the
customary commercial
credits is subject to all hazards of
fire, flood, earthquake,
robbery and fraud to a much greater degree than is the
security behind stock and bond issues, largely because the
properties, plants or lines of railway securing capital issues
of large corporations are located at
widely separated
points, and a loss of the character mentioned at any one
place would represent only a small part of such corpora¬
tion’s assets.
In

proof of my assertion of the greater desirability of
loans, I quote the current market rates for such
loans in the city of New York:
Sixty days, 3Va per cent.;
ninety days, 4 per cent.; six months, 4yz per cent.; whereas,
the prevailing rate for choice, double-named commercial
paper is six per cent, for sixty days to six months.
My remarks are not intended to reflect in any way upon
the security of commercial credits, but
merely to present,
to those among you who have not had the
opportunity of
judging for yourselves, the many advantages afforded by
collateral

collateral loans.

BANKERS’

180

The

Trust Company Maintaining an Auditing Depart¬
Rather Than Having Periodical Audits from the Outside.

Advisability of

ment

By W. M. Baldwin,

Assistant Treasurer of The Citizens* Savings & Trust Company, Cleveland, Ohio.

Nowadays we hear much about the advantages derived
by a bank that has periodical audits by expert account¬
ants made of its accounts and business transactions, in
addition to the examinations conducted by the National
or State examiners.
We are told that these independent
examinations inspire the confidence of the public in the
financial institutions having them made.
It is my pur¬
pose in this paper, however, to demonstrate to you the su¬
perior advantages of an auditing department maintained
by a trust company over a periodical audit made by an
independent audit company.
primary function of an audit is to check over the
bookkeeping account and securities, not only of the bank
having the audit made, but also of every trust of which
the bank is custodian.
Of secondary importance is the
ascertaining that the methods used by the trust company
are modern and that all purchases and expenditures made
are upon the most economical basis possible.
With these
premises I am sure that you will all agree, no matter how
you may differ with me from the conclusions drawn.
Now, I ask you, is it not better that this checking should
be done by a man who can watch such transactions and
perform such work daily rather than at stated periods ?
True, if there have been mistakes made, the periodical
audit will disclose them, but it will only show that they
have been going on for some length of time and enable the
waste or loss to be stopped for the future. Had the insti¬
tution, in which such errors were discovered, maintained an
auditing department of its own, these mistakes would have
been found on the very day they occurred, and the bank
The

would have saved just so much.
It has been oftentimes

objected that the maintaining of
auditing department is nothing more or less than the
establishment of a system of espionage upon the employees
and officials of the bank.
No employee, however, who is
worthy of the name ever places opposition in the way of
the auditor.
He realizes that it is a check upon his own
work and for that very reason welcomes it. Moreover, it
must be remembered that no individual has yet been found
who is infallible, and if errors are discovered by the audi¬
tor they can be remedied before any serious results have

occurred.

There is

institution with which I have the honor to be
The

Citizens’

phase of the periodical audits, how¬

that must be considered; the relations between the
depositors and any financial institution are of the strictest
confidence.

Being bankers, you and I know that there
people who do not wish the nearest kin to have even
an inkling that they possess bank accounts.
Now, all the
auditing companies or expert accountants who are making
are

periodical

examinations,

course,

maintain

that

they work in confidence, and I have no reason to doubt
their statement.
Nevertheless, they do—provided they
conduct their work thoroughly and searchingly—have the
opportunity of learning the names of depositors in the
bank and of all financial transactions passing
through it.
Now, this is

ethical violation of the confidential rela¬

tions between the bank and its

depositor? if not

legal

one.

That you may have an idea of the extensiveness of the
work conducted by an auditing department in
checking up

about six years ago that our auditing
established and, I may say, none of the

department
officials has

Not only they, but the employees
a check upon their work,
and welcome the check in order that it may be established,
beyond peradventure, that their work is up to the stand¬
ard.
Moreover, the auditor, needless to say, has been the
means of suggesting many improvements and economies in

ever

regretted the

the bank,

move.

realize that it is

the administration of the bank’s affairs.
As

illustration of the economics effected I will cite

the

following instance:
Through the death of

of the rich men of Cleveland
large estate. In familiariz¬
ing himself with the details of this estate, the auditor dis¬
covered that the bills for coal used in operating a large
one
the bank became trustee for

excessive. Obtaining the bills paid by
practically the same purpose, he compared

office building seemed
the bank itself for

the two,

finding that the estate had been paying a very
higher price than the bank. He had a chemical test
made of the coal, extending over a period of four weeks,
which showed that though the estate was spending more
money for its fuel, it was not obtaining any more heat
units from the coal supplied. Armed with this data, the
auditor was successful in effecting a saving to the estate of
thousands of dollars each year.
This is but one of in¬
numerable instances that I could relate showing similar
savings to estates.
Now, this discrepancy between the bills rendered to the
estate and to the bank might have been discovered through
a periodical audit and it might not.
Moreover, the time of
the periodical audit might have been many months from
the date when this discovery was made. Thus the estate
would have been losing a large amount of money during
this time, whereas, by our auditing department it was dis¬
covered and stopped immediately.
In the auditing department of The Citizens’ Savings &
much

Trust Company we use

the card file system.

As each de¬

partment has separate files, we have cards for:
securities

de-

partment.
department.
Banking department.
Savings department.
Estate trust department.
Loan

Corporate
trust
department.
Real estate department.
Safe Deposit and storage departments.
Building.

At the risk of

tiring you, I shall go into details in de¬
scribing the operations of some departments, seriatim.
INVESTMENT

SECURITIES

DEPARTMENT.

irregular periods the bonds and stocks owned are
by the auditor and his assistants. When any se¬
curities are taken from the vault or others put in, mem¬
oranda are sent to this department and each day the
memoranda are verified. To show you what a close watch
we keep over our securities, I
may say it is impossible for
any stock, bond or other security to be taken from the
vault except by an officer when he is accompanied by the
auditor or his assistant.
And this very great care which
counted

the method of the

securities in

of Cleveland,

was

all accounts and other transactions daily, I shall explain

auditing department maintained by the

Savings & Trust Company

connected,

Ohio.

Investment
another

ever,

the

CONVENTION.

take of

our

own

our

securities is duplicated in the

estate trust and

care of
corporate trust depart-

TRUST
rnoiils, as well, of course, as
loans.

The

of the collaterals pledged for

The interest

turned

DEPARTMENT.

all collateral and

figured independently by our

practically the work of a registrar.
merely acting in one or the other ca¬
pacity, this precaution is not necessary, as the records are
compared with the reports from the institution which acts
in the opposite capacity.
REAL ESTATE

ers

Every day the rents due are audited and each three
a statement is sent to our patrons showing how
their accounts stand, which we request them to sign and
return stating as to whether or not it is correct. As these
statements are always sent to those who are tenants, we
find that it is instrumental in keeping the rent paid up, in
addition to serving as a good audit.

the

loan is taken out

SAFE DEPOSIT

lock

pledged, the amount of their loan, and any other nec¬
The majority of our borrowers appre¬
and all but an infinitesimal number
of the reports are signed and returned without any com¬
plaint on account of receiving the blank, whereas these
complaints were numerous when the blanks were sent out
by outside auditors.

essary information.
ciate this safeguard

given

renumbered and transferred to another box, thus

are

occupying an office in
building showing in brief the terms of lease, and the
reports of the manager are carefully checked up by means
of these cards. No item is paid for the maintenance of the
building unless it has met with the approval of the auditor
and the voucher therefore bears his signature.
A card is made out for each tenant

the

Savings & Trust Company has adopted the
using the statement system. All credits and
debits are taken by the statement clerks, who are under
the jurisdiction of the auditing department, and entered on
regular blanks, each morning the balances being called back
to the bookkeepers.
Not only does this prevent charging
of checks to wrong accounts, but it also puts an effectual
stoppage to the chance for any teller or bookkeeper using
an account to defraud.
These statements are ready for our
depositors on the first of each month and are handed out
by the auditing department to those calling for them. In
the event any remain on the tenth of the month, such
The Citizens’
of

are

deposit boxes showing those that
file by the auditor. As soon as a
and the key surrendered, the key and the

kept

BUILDING.

BANKING DEPARTMENT.

statements

are

making it impossible for anyone who has had a duplicate
key made of the one received from us being able to get
into the box which he has given up. The income from this
department is, of course, checked with our cards. For ar¬
ticles of bulk, which are placed in the storage section of
our safe deposit department, cards are made out and from
time to time all articles and packages are checked over and
counted to see that they agree.

These forms describe in detail the collat¬

eral

method

rented

box is

check, we send periodically to all borrow¬
collateral security forms for their signature to

reconcile loans.

AND STORAGE DEPARTMENTS.

Plans of all the safe
are

further

upon

DEPARTMENT.

months

executive committee.
As

auditor, who verifies them with the rec¬

When the bank is

vault which holds them, neces¬

during the day, a memorandum
slip is made and kept until the close of the day, when if
the loan does not show as paid on the loan register it must
be returned to the vault. In the event of its being paid,
the card on which it was registered is properly receipted
by the borrower. The auditor also reports all substitutions
and full memoranda of any collateral exchanged to the
a

to the

cate and does

loan teller.
When

over

When

auditing department from its

sitating the auditor going to the vault together with

only reversed, of course, is followed when
are
put in.^
The memoranda are

securities

department.
acting in both capacities of registrar and transfer
agent, the auditor inspects and countersigns the new certi-

real estate loans is

Thus the cards of this department

double combination on the

process,

ords of the

become
practically a balance sheet of the total amount shown on
the books of the bank. When any payments are made upon
loans or new loans negotiated, records are made from the
loan register and the auditor’s cards are balanced with the
general ledger at irregular intervals.
Moreover, the collateral of all new loans, as made day by
day, is compared with the notes themselves. We require
records.

own

same

additional

LOAN

181

SECTION.

COMPANY

ACCOUNTS OF BANKS AND BANKERS.

Each month
of New

audit of the balances shown

by the banks

York, Cleveland, Chicago and other cities is made.

and figured inde¬
pendently by this department. All drafts and checks are
returned direct to the auditor, and all accounts are recon¬
ciled independently of the draft tellers.
The interest from these banks is proven

mailed.

CERTIFIED CHECKS.
SAVINGS

DEPARTMENT.

signed by the auditor and listed
register which gives each check a number, and at the
end of each day the total amount is posted to the general
ledger. As the checks are paid they are checked off on the
register, in which there is a column for the date paid, after
which they are filed in numerical order and retained in
All certified cheeks

keeping savings accounts is by the card
system. Each day, as passbooks are presented to the tell¬
ers, these clerks enter on the journal sheet the balances
as shown by the passbooks.
At the close of the day these
journal sheets are audited and compared with the ledger
cards.
Should there be a discrepancy, notification is sent
requesting the holder of the passbook to bring it in for our
inspection and examination. The ledger cards are filled in
The method of

boxes of

one

ESTATE TRUST

DEPARTMENT.

The income of all estates for which the company

ecutor, administrator, trustee or in

acts,
as

No bills

are

‘

is ex¬

whatever capacity it

checked daily with the same care and strictness

the income of the bank’s

own

investments.

belonging to the different
auditing department, it is a sim¬
ple matter to keep track of the investments, and when
coupons are due, to see that they are credited to each ac¬
count.
If it is desired to take any of the securities from
the vault, one officer accompanied by the auditor must be
As

trusts

list of all the securities

are

file in

our

VOUCHERS.

paid for company expenses until they have
and approved by the auditor, and the
voucher issued for their payment must bear his signature.
That, in rough, is the method employed by The Citizens’
Savings & Trust Company to safeguard all its departments
and depositors.
And, as I said before, we have never re¬
gretted having instituted the department. Of course, in
order that the work may be of the very best, it is neces¬
sary to choose a man whose integrity is above suspicion
as auditor, and I am free to
say it is not always possible
to find a man with the proper qualifications. He must not
only be an expert accountant and familiar with all classes
been

kept separately and a balance is taken

AND

files.
EXPENSE

irregular periods.
CORPORATE

our

thousand each and the amount of credits and

debits to each box is
at

are

and

are

examined

descriptions of financial transactions,

lutely above the domination of

any

who is abso¬
influence whether exerted
a man

official of the bank or some outside agent, but he
must be a diplomatist of the finest water in order that
^hef’m&y carry out histdutie^-4fnd5w'hten there is a> possibility
by

182

BANKERS’

for

an
economy being effected having that economy put
into operation without arousing the
enmity, or even ill-will,

of any

of the officials or employees.
If, from my description of the working of the auditing
department of The Citizens’ Savings & Trust Company, I
have been able to convince any of you
of the advantages
afforded a trust company that has its own auditing de¬
partment, I shall feel well paid.
tion it is

For

any

financial institu¬

always of the first importance that

every

feature

CONVENTION.
of its

business, the safety of its securities, the genuineness
be examined
this true of
trust companies in view of the fact that
they carry so
much
responsibility to the estates of which they are execu¬
tor, or serve in any other capacity. And I venture to say
that any trust
company which institutes an independent
auditing department of its own will receive the maximum
of efficiency with the minimum of
expense.
of the paper
upon which its money is loaned,
and checked from time to time.
Especially is

Investment of Trust Funds and the Respective Interests Therein
Life Tenant and Remainderman.
By Isaac H.

The number of trust estates wherein

one

Orr,

Trust Officer St. Louis Union Trust Co;

person

receives

the income for life and the corpus or principal fund passes
at his death to another has greatly increased in recent
years.

The
such

advantage of having

estate

a trust company as trustee

is apparent and, as

for

result, trust compa¬
assuming charge of a large majority of the trusts
created for a long period of years or during life.
Aside from its continued existence and solvency one of
the great advantages of a corporate trustee is the fact that
it is required to keep, and does keep, permanent records of
all transactions.
It is of first importance that the records
relating to the investment of trust funds should be full and
nies

are

invest, or upon notes with two sureties of domestic
manufacturing corporations or of individuals with a suffi¬

may

cient pledge as collateral of any of the aforesaid
securities.”
(Massachusetts Laws 1902, Chapter 116.)
The statute of each State has its own
peculiar provisions,
but where particular securities are named and
approved for

investments they follow the general rules heretofore
applied by Courts of Equity. All of the States approve the
trust

investment of trust funds in bonds of the United
States,
States, counties, cities and other subdivisions of the State,
such as school, drainage and levee districts.
Loans secured

first mortgages

railroad

bonds

are

real

estate

generally

and

also

approved.

first

The

mortgage
Massachu¬

complete.

setts

From the experience of older companies we learn that
the best results have been obtained, not by
having one offi¬

incorporated within that State, whereas New Hampshire

cer

make

board of

such

investments, subject to the approval of a
directors, but by saving a group of men or a com¬

mittee selected from the roster of officers and directors who
are charged with the
special duty of investing the trust

funds.

This committee should meet in regular session and
a permanent record showing the members present, the

keep

investment authorized, the price paid, and from purchased.
When the individual members of such a committee realize
the fact that their personal judgment on the
investment is
registered for future reference there will be added appre¬
ciation of the responsibility assumed.
The first and most important question to be determined
is the character of the investment.
To determine

will, deed

other instrument

creating the trust.

This may specify the character of the
property or securities in which to invest the trust funds.
If so, such specification should be followed.
If the instrumenet itself fails to give instructions or limitations
concern¬

ing the investment, the trustee must look for guidance to the
statutes of the State wherein the trust is created.
Twenty-six States have passed laws relating to this sub¬
ject. In a number of cases the provisions of the statutes are
not

adequate to

Others
a

are

cover

all

the

contingencies that arise.

sufficiently comprehensive and explicit

trustee to

properly administer any trust.

interest to set out at length

one

to enable

It may be of

such statute:

Massachusetts, for instance/ in her statute relating to
trust companies, provides that trust funds
“Shall be loaned on or invested only in the authorized
loans of the United States, or any of the New
England
States, or the counties, cities or towns thereof, or of the
States of Illinois, Iowa, Michigan, Minnesota and
Wiscon¬
sin, or the counties or cities thereof, or stocks of State or
National banks organized within this
commonwealth, or in
the first mortgage bonds of railroad
corporations incorpo¬
rated in any of the New England States and whose
road is
located wholly or in part in the same, and which
has earned
and paid regular dividends on all its issues of
capital stock
for two years last preceding such loan or
investment, or

the

bonds

of any such railroad company
unencumbered

by mortgage, or in the first mortgages on real estate in this
commonwealth, or in any securities in which savings banks

approves

stocks of State and National banks
ex¬

pressly excepts from its list of legal investments stocks in
banking corporations and trust companies. It may be stated
as a safe general rule that a
trustee is rarely, of ever, justi¬
fied in investing trust funds in
corporate stocks unless he
is

given express authority so to do in the instrument cre¬
ating the trust or by statute.
Among other investments
authorized by different States may be noted the
following:
Collateral trust bonds of railroad and public service cor¬
porations under certain conditions (Delaware) ;
Car trust certificates and equipment stock
(Delaware) ;
First mortgage bonds of any corporation
(Illinois) ;
,

Debenture

(Minnesota)

stock

railroads

under

certain

conditions

;

Ground rents or real estate (Pennsylvania) ;
Loans secured by real estate or other sufficient collateral

this, the

trustee will first consult the

statute

(Texas)

;

Preferred stock of any steam
tions (Wisconsin).

railway under certain

con-

In many

instances, the statutes of the State attempting
regulate the subject of investment are rendered less effec¬

tive by reason of some general expression which may be so
construed as to modify or evade the restrictions imposed.
For

instance,

one

statute

board of directors of
United

(Colorado), after authorizing the

trust company to

States, State, county

invest its trusts in

city bonds, further pro¬
as they may
(Kentucky), after specifying real
estate, mortgage notes and bonds, continues, “or in such in¬
terest bearing or dividend paying securities as are
regarded
by prudent business men ab safe investments, and to make
vides, “or in such real
deem proper.”
Another

loans

with

such

Michigan, after
the

securities

personal property

collateral.”

The

State

most comprehensive statute enumerating

different

real

may

approved securities, concludes, “or in such
personal securities as they (the board of directors)
deem proper.”

It would not be
cuss

must

profitable even if we had the time to dis¬
in detail the statutes of the different
States, as each
become familiar with the law of his

own

bailiwick;

but it may be of interest to note the easy and
comprehen¬
sive manner in which some of our Western States
(Cali¬

fornia, Montana and North Dakota) have disposed of this
subject in a three-line enactment as follows:

TRUST

invest money received by him under the
fast as he collects a sufficient amount in such man¬
to afford reasonable security and interest for the

“A trustee must
trust as
ner

of the subject under discussion.
of the instrument creating the trust
or the strict provisions of the statute law governing the
same, there are a few general principles which the investing
trustee must ever have in mind.
The trustee may retain in¬
vestments received as a part of the estate.
Thus it often
happens that the trust estate is composed of property in
which the trustee would not, in the first instance, be au¬
thorized to invest, but having received it as part of the
Aside from the letter

principal fund, it is his duty to retain. But as any part
of the estate is reduced to cash, the trustee must assume
the responsibility of re-investment, subject to such restric¬
tions as may be imposed by the creator of the trust, by
statute or by the general law.
There must be in every in¬
stance the exercise of absolute good faith and reasonable
As one author states it, “Trustees are always to
employ such care and diligence in the trust business as
careful men of discretion and intelligence employ in their
own affairs.”
Both law and reason prohibit investments of
a speculative character.
If it is a success, the trust estate
gets all of the profit; if a failure, the trustee stands all of
the loss.
Hence, it is never justifiable to invest trust funds
in a trade, manufacturing or business enterprise.
The
trustee must also bear in mind that no profit to itself can
be retained out of or on account of a trust investment, ex¬
cept the usual and reasonable compensation allowed for its

diligence.

services.

respective interests of the life tenant and remainder¬
attention of the trustee. The one
wants the highest possible income and the other the safest
possible investment.
Both interests must, within reason,
be conserved.
Separate accounts should be kept from the
The

demand the constant

beginning, showing income and principal funds. This is
a simple matter, but as the administration proceeds, ques¬
tions will arise as to what constitutes principal and what
inoomc.

the proceeds or what the
property produces, the profit which comes from its use in
business, or what is paid for its use by another than its
owner.
Principal, or capital, is the property itself.
A
trustee
must
be careful to distinguish between real
income and that increase which comes from an increase
in the value of the property.
For example, if trust
funds are invested in a certain piece of real estate the
principal is not the cash paid, but the real estate itself. If
that is sold at an advance, the profit is a part of the prin¬
cipal and not income. In a series of able articles recently
published in the Trust Companies Magazine, under the head
of “Fiduciary Accounting,” Mr. Vierling has considered at
some length the perplexing problems of income and princi¬
pal. We can only mention a few of them in the briefest
Income of

property consists of

sort of way:

A trustee holds shares in a
distributes a stock dividend.

Stock dividends:
which declares and

principal?

be credited to income or to
There
may

are

corporation
Is this to

three well-defined rules on

this subject, which

respectively the Pennsylvania, the
the English rule. They lead to essen¬

denominated

Massachusetts and

tially contrary conclusions.
The

Pennsylvania rule proceeds on the theory that

■

.*»•

1. i\

■•a

t.»

inlf,

‘utllfM

•

*/irKC, !

the

'UiO

V-

time when the fund

new

If the fund

represents earnings

made both before and after
dividend should be ap¬

then the stock

the life estate began,

portioned between income and principal
The Massachusetts rule regards cash

'idOh.

ratably.

dividends, whether

large or small, as income, and stock dividends,
earned or however declared, as principal.

whenever

England an ordinary, or usual cash or stock divi¬
dend, belongs to income, while an extraordinary cash or
stock dividend belongs to the principal fund.
In

Special taxes for improvement of real estate,: A
abutting an unimproved street. The

trustee
munici¬
pality paves the street, greatly enhancing the value of the
real estate.
Query: Shall the special tax bill be charged
against the life tenant or the remainderman?

holds real estate

rule,

all taxes,

whether general or special, are
but whether the assessment

charged against the life tenant,

public improvement benefiting the property must be
borne by the life tenant or by the remainderman, or appor¬
tioned between the two, depends to a large extent upon the
circumstances of the particular case, and especially upon
for

improvement as compared with
of life of the life tenant.
Thus, if an improvement for which a special assessment
is levied is of such temporary character, requiring renewal
from time to time, then the life tenant may be said to reap
substantially all the benefits and the remainder is not en¬
hanced in value, and the life tenant should bear all the ex¬
pense ; but where there is a permanent improvement, increas¬
ing the value of the remainder, the assessment should be
borne ratably by the life tenant and the remainderman.
(L. R. A. (n. s.) Vol. 10, Page 342.)
Bond redemption premiums:
Trustee holds bonds ac¬
quired at or below par, which are subject to call before ma¬
turity upon payment of a premium by the obligator. Such
bonds are called and the premium paid.
Does the pre¬
mium belong to income or to principal?
probable duration of the

the

the expectancy

recently called upon to answer this ques¬
The life tenant claimed the premium paid as a part

A trustee was

tion.

that it belonged
to the principal fund. The lawyers searched the books for a
precedent, without success. Finally the trustee submitted
the question to a Court of Equity, which decided in favor
of the income;

the remainderman contended

of the life tenant.
The
trustee
come

the

foregoing examples illustrate the responsibility of
in properly ascertaining and apportioning the

and expenses

the
in¬

connected with the trust estate between
remainderman.
These questions fre¬

life tenant and

quently call for the advice of counsel, and occasionally a
trustee may be compelled to apply to a Court of Equity
for directions, but in the long run it pays to incur the
necessary trouble and expense of disposing of the matter in
the right way and at the right time.
Many phases of the subject assigned cannot be touched
upon in the time allotted, but it is hoped that what has
been said will serve to emphasize the importance of ac¬

ascertaining the limitations within which trust
invested, the care and diligence required, and
the necessity of properly disposing of all questionable points
as and when they arise.

curately

funds may be

-J

represented

stock was accumulated. If it represents earnings
made before the life estate began it belongs to the corpus
or principal; if after
the life estate begins, then to income.

by the

This contains the crux

man

should ascertain the

trustee

same.”

183

SECTION.

COMPANY

j(ac

„

17/

U.thf;*»qp

7Uf.

tom

ir097/aomca«y»

184

BANKERS’

Shall Trust
"

CONVENTION.

Companies Charge for the Care

of Small Accounts?

*
■

By Edward O.

Stanley, 2d Vice-President Title Guarantee

The relations between the bank and its
not

always

depositors have

conformed to the usual relations between

chant and customer.

they should not.

Yet there is

absolutely

no reason

why

The banker is buying the use of the

safe-keeping of the funds

the customer, and in the

until

interest, if

upon the customer’s balance.
would the merchant

wittingly

they
any,

permitted to loan, must further protect itself
against
extrordinary expenses by charging against credit of
foreign checks, the cost of collection of such checks, which
it is so
manifestly unfair should be distributed among

which he allows

pay

the

something where he

nothing in return; nor would the professional man
regularly and continuously perform a service for clients
entirely able to pay him and receive nothing therefor.

Vet

this is

cepts
ance

precisely what the banker

doing when he

an account which continues without
or

that is

one

considerable loanable balance, the proportion
the burden of expense which
the small account entails.

The abuse of

banking facilities by the small depositors
gradual growth. Before the competition for
accounts became so
fierce, when banks were not so numer¬
ous in the
cities, and were at an inconvenient distance in
the country, when, too, there was no
solicitation of ac¬
counts by banks and trust
companies, a much smaller
proportion of the entire financial transactions of the coun¬
has been of

paid by bank check than now is the
case, and
only dealers of some financial standing who carried

was

checking account in

bank.

Very small tradesmen con¬
Family settlements were

ducted their transactions in cash.

nearly all made in the same way. With the extension of
our
banking facilities, in the number of institutions, in
their location in
every part of our cities and in the smaller
country towns, with the advantage of the convenience and
safety of a bank account becoming more
fully recognized
and fostered by
advertising, the bank checking account has
been extended until it is used for
the

daily payments of the
by most families, though
of modest income, for
housekeeping and for personal expenses.
This development has resulted in
an enormous number
of small accounts
being handled by the banks and trust
companies. So long as no interest was credited to
any of
the checking
accounts, it did not seem to the banker so
important to correct the inequalities which existed in the
smallest of

businesses,

as well as

small

problem which the banker
line, is that of the care of

same

The first action taken

by the banks to bring accounts to
position was in the esablishment
of a system of
charges for collection of checks foreign to
the city where
deposited. It is to anyone so evident that
a check
calling for the payment in a distinct city of a cer¬
more

tain

accurate relative

amount

money,

the

dealer, cannot
his bank, but that

when placed in his home bank by
be used as loanable funds
by

once

several days must
elapse before it can
be collected and credited to the
depository bank, and that
this is an
expensive service which the bank is performing
for its customers, that it seems
ever

surprising that there should

have been any

objection on the part of dealers to the
of foreign checks. It was
simply that
they had not been used to the system. It is a
part of the
determination more closely of just what is and
what is not
profitable banking.

charge for collection

The dealer had for
many years

ing his checks collected

been accustomed to hav¬
cost to himself, the cost

along the
unprofitable

Now, it must be borne in mind that the
privileges which
bank extends to its customers are
of a positive value.
They are costly to the banker and must in some
way be
paid for by the depositor. If an analysis of an account
shows that,
deducting the checks out for collection and the
percentage required by the State law to be maintained as
a

reserve, there is left to be loaned
be of but little value to the
banker,

balance

some

to carry

such accounts in his institution.

way

small

seek for remuneration if he is

quire the withdrawal

to continue

Rather than to

of all accounts of this

lieve it to be the better
policy
to make a small
monthly or

class,

to continue the

re¬

be¬

account and

quarterly charge for the

of it.

it is quite evident that he

must in

care

It is

probably well known to you that it has long been
practice in England to charge for the care of small
accounts.
Our fellow-bankers there make it
somewhat
the

difficult

than

open

bank

account, being

extremely careful in their investigation of the credit and
of the moral and financial
standing of the proposed dealer.
The bank then
charges a definite sum for the care of the
account.

The custom has

vailed in Great

jected to
bank

quite

Britain, that

long and
we

universally

understand it is

and

pre¬

never

ob¬

being ususual or improper. The carrying of a
account there is
consequently in itself regarded as
as

a good recommendation of a man’s
credit, and
is, considering the careful examination before it is

accounts which he

be¬
the

has to consider
the small and

accounts.

carried, between the larger account of
comfdft^bie balance and the small account which
had but
little, if any, loanable balance.

wholly local and therefore collected
part of the loss of time and the cost of
are

foreign checks.
This point, however, is now
pretty well understood
tween dealers and
banker, and it would seem as if

loanable bal¬

has^a

with but

ac¬

as to be
absolutely negligible,
though he continues to perform the various services re¬
quired by the dealer in the care of the account.
The banker simply throws
upon the larger account, which

try

those whose credits

small

by the interest

the difference between the interest
allowed on the entire
credit and the interest received on that
portion which it

other branch of trade

received

Co., New York.

received by the banker
portion of his deposits, no interest on
being allowed to the dealer. Now that inter¬
is usually allowed,
thejmnk, finding its profits only in

est

be presented, in
are wanted by

met

from the loan of
the deposits

mer¬

customer’s money, and is
paying therefore in the collection
of the checks and other items which
may

the

having been

& Trust

the

There
accounts

opened,

conditions under which it is maintained.
in England two classes of
accounts—current

severe
are

they term them, which are subject to check,
deposit accounts, which as we understand it, corre¬
spond to savings bank accounts with us. These last are
subject to notice of withdrawal,
usually seven days, and
as

and

interest is allowed thereon at rates
as: advertised.
This is
quite in accordance with our custom. Current
accounts,
that is accounts
subject to check, dq not bear any interest

and

charge > is made, provided “a remunerative balance
kept at credit,” but should the balance not be consid¬
ered remunerative, a
commission is charged
according to
the
no

amount

work

the

banks also usually make
checks outside of London.

Speaking from

our

account
a

involves.

The

charge for collection

London
on

all

experience in charging for the
experience, we will admit, not of
long duration, as we adopted the policy only a few months
ago, we would say that due partly to the nature of
the
care

of small

own

accounts,

varied business which

our institution conducts
insurance and mortgage loan
company, as well
ing {1 trust > f company^,! iwe l found'- Hrre 1 were

as a

title

bank-’

^acctfmfilat-ihg

■

TRUST
in

COMPANY

banking department a large number of small ac¬
an
average balance of less than $200. It cannot
be conclusively maintained that the amount of the average
balance is an accurate test of the profitableness or un¬
profitableness of the account. The average loanable bal¬
ance, deducting out for collection and required for re¬
serve, is more nearly accurate.
our

counts of

account be

small and also very

SECTION.

policy which this institution may adopt has therefore the
advantage of being tried at once in all parts of our city,
with all classes of customers, under all conditions of bank¬
ing which may be presented, from the financial down-town
district to the up-town shopping district, among the fac*
tories of Long Island City, and among the suburban dwell¬
ers in various parts of the outlying sections of our now
widely extended city.

active, requiring
bookkeeping and much tellers’ and correspondence
work, in paying the debits and collecting the credits, with
a
very small actual balance, it is clearly unprofitable.
Furthermore, the need of careful watching of accounts by
bookkeeping and tellers, lest they be overdrawn or lest
payments be made against uncollected credits, lies almost
wholly in the small accounts. The large accounts need but
little supervision for overdrafts or drawing against un¬

for about two
month for
balance of
$200. Their distinguished president does not hesitate to
express his unqualified approval of the policy as wise,
scientific and eminently satisfactory in its practical work¬
ings. But he says that it must be enforced with much dis¬
cretion on the part of the officers and therein lies the

collected credits.

secret of its

Going carefully over our ledgers, and making some ex¬
ceptions in the case of desirable depositors, we gave ample
notice to all depositors of an average balance of less than
$200 of our intention to charge $1 per month for the care
of the account, beginning with a certain date.
The result
of these notices was very
interesting. A number regretted
their inability to meet the conditions and
accepted the
charge uncomplainingly. Many more, however, stated that
they would endeavor to bring the balance to the minimum
amount and so avoid the charge. A
very few made objec¬
tion to our policy, and a number of accounts were closed;

it,” says Mr. Nash, “to have resulted in
permanent diminution of our total deposits. The first
result was a loss of a very considerable number of deposi¬
tors, nearly all of whom were worthless to the institution,
so far as
profits were concerned; but their small aggre¬
gate balances were fully compensated for by the additions
which the small depositors who desired to continue their
accounts, but who wished to avoid the charge, made to

much

but the accounts closed

the

institution

were

of almost

value whatever

the

aggregate amount of deposits.
We think, though we have not
accurately determined it,
that more in amount was gained in the increase of the
average balance of those who remained with us than was
lost by the withdrawal of accounts.
on

Among the small accounts will usually be found nearly
the unsatisfactory and troublesome customers.
If
the adoption of this policy shall result in the elimination
of some of them, we think that the banker will welcome

all of

the

release

from

this

trouble

rather

than

regret their

departure.
Of course, so far as accounts were closed, by
so
was there diminished work on the
part of the office
This policy, we think, is further valuable in
from our institution some of those

keeping

impecunious but

much
force.
away

ever

hopeful individuals who believe that they have found a
new method of
obtaining credit by tossing checks on differ¬
ent banks from

one

another, without sufficient balance

to meet them when the check is drawn.

The

plan is quite
discouragement to the small check kiter.
We believe, really, that the real success of this plan de¬
pends very much upon the discretion of the officers who
are entrusted with
carrying it out. It cannot wisely be
a

made

giving

fixed, unchangeable rule.

Absolutely quiet accounts,
trouble, with but little bookkeeping on either

side of the

ledger, accounts hopeful of growth, especially
the dealers may have other and larger ac*
counts, should not be included in the list to be charged for.
The plan being novel, should be
explained with much care
those

where

and consideration
so

far

customers, and they should be urged,

possible, to bring their balances to the required

minimum.

It should be shown that the bank does not de¬
sire to make the charge, but does wish to change the ac¬
count from unprofitable to a self-sustaining one.

We believe, as the result of

experience, that this

our own

plan

may be instituted with success and quite to the satis¬
faction of bankers in many cities. The limit of the charge¬

able account and the amount to be
matter far local

from

determination, and

paid is, of
we

course, a

would not assume,

brief

This institution has had in

their balances.”

“We

presented,” he continues, “the argument to our de¬
positors that it was manifestly improper for us to per¬
form

considerable

of tellers and

collect and to

service for

them, both in the work

bookkeepers, as to carry their account, to
pay their checks, and with no compensation

in interest earned

used to be

their balance for the bank.”

held that

account

the bank
balance of about $1,000. While,
of course, accounts vary widely in the work required on the
same average
balance, yet we think this is still held to be
far from correct.
It must be readily seen, therefore, that
a balance of under $200 is
notably unprofitable. The de¬
positor readily recognizes the soundness of this argument*
He does not attempt to differ from it.
Mr. Nash does not think that where the plan has been
in operation alongside of other banks not
making such
charge that they have suffered in reputation, or in the dig¬
nity of the institution, or any unpopularity from the
course they have
pursued. Yet he could hardly be too em¬
phatic in saying that the success of the plan is dependent
largely upon the discretion of the bank’s officers who are
charged with its execution.
The charge should be sometimes waived in favor of those
who may be carrying several accounts, one or two of which
may fall below the minimum, or who usually have good
balances, but for a time may fall below the required
amount, or possibly for other reasons in an extremely
quiet account. Certainly, in explaining the plan, the bank’s
officers must be discreet and diplomatic
and obliging, and
an

pay

should carry an average

if that be

formly

done, he believes that it will be found

to be uni¬

a success.

Another

bank

city undertook this plan some
They have continued it since in a quiet way,
it apply arbitrarily to all accounts, but only
to unsatisfactory ones.
They express their satisfaction
with its working so far as carried out.
The strenuous competition for accounts which has arisen
among banks and trust companies during the past few
years has forced the rate of interest allowed to a point, in
many cases, not only unprofitable, but dangerous, in that
it brings a sharp pressure upon the institution to seek uses
for its funds at higher interest rates than are
compatible
our

years ago.
not making

ceived
tire

which, Mr. William A. Nash, is

success.

“We have found

President

now

experience, that we have hit upon pre¬
cisely the right amount in either case.
The largest State bank in New York State, in fact, we
believe in the country, is the Corn Exchange Bank, the
our

operation

years this plan of making a charge of $1 per
the care of accounts of less than an average

with

entire

safety.

ment of such rates upon

are

deposits

be forced to the pay¬
as

leave but

a narrow

margin for
on

our operation expenses between the rate re¬
the loanable balance and the rate paid on the en¬

of our
deposit, then we must certainly refine our methods to
a point where we can be sure that we are hot
having
carrying un¬
twenty-four branches located in all parts of- the city;1* Any u profitable accounts. 0
0!>
** h
**
best-known

bankers.

This

bank

notable

one

186

BANKERS’

CONVENTION.

We must note, in a different rate of interest allowed, in
difference in desirability of various accounts.
We must

charge where
should credit

have

we
no

loanable balance.

interest until the account has reached such

amount that it shows

proper

The point at which the minimum limit should be estab¬
lished will vary in different localities,
nor do we suppose
that we in New York are able to determine what these
limits shall be in other

proportion of the

expense,

the banker

profit

upon

its

the

and. the operation of these

charge; but the

account should receive

of desirability is correct and is scientific, we have
of doubt, and we believe that future
banking
is much more
likely to be done along these lines than in
the looser way of the past.
Why should not the banks and trust companies of cer¬
grees
no

interest,

and if

averaging above the higher limit, and if in other
respects the account is worthy, then it should receive in¬
terest at the agreed rate, with possibly a still
higher rate
for inactive accounts of large balance, which should
prove
the most profitable of any to the banker.
For ourselves, we have
placed, as we have before stated,
the limit below which accounts should be
charged, at $200;
the

limit below which

much

bank with their

deposits.
Banking methods are changing

commercial activities.
sons

great world’s work.
All the great facts of
history, every advance in the arts
and sciences, the marvelous
developments in agriculture,
manufacturing and commercial life, since the cradle days
of the race, bear the
impress of a personality, and are
stamped with the image and superscription of some man.
Emerson has well said, “that
every great institution is
but the lengthened shadow of a man.”
The world’s greatest
history has not been molded and
shaped by the masses—men in the aggregate—but by cer¬
tain individual personalities, such as
Moses, the great law¬
giver; Alexander, Napoleon, and down to the great per¬
sonalities of modern times.
In the up-building of our own
great country, the con¬
struction of the great trans-continental railroads, the mar¬
velous development of this great Pacific

Coast, trace each
personality, a man.
name of Cyrus W.
Field immediately comes to my mind.
“
The faces and forms of the great
captains of industry
of today are known to
very few; they make their impress
largely through other minds and hands. In the seclusion
of their private offices, surrounded
only by their trusted
lieutenants, they conceive and plan great things, leaving
it to their subordinates to
carry out the work, and in this
way, utilizing other men, multiplying themselves almost
indefinitely, but the master mind of a personality is back
and you will find a
When I think of an ocean cable the
source

all.
behind the guns are

all right provided Dewey

The- personality, however,, suggested by the topie, “The
Personal,, Element in Trust Company/Work,” is, in
,

as those in
remark that the

have failed to succeed in business because they fol¬
Commercial business
This is

of those which have

earning
of safe,

not

in themselves

sufficient

to make them profitable is along the line
proper and scientific banking.
power

Trust

Company Work.

Stark, Trust Officer, Union Savings Bank & Trust Co., Cincinnati.

Personality as defined by the dictionaries is the “Quality
state of being a person and not a
thing or abstraction.”
It is the originating and
impelling human power in the

men

rapidly

particular sorting of accounts and making charge for the
care

The Personal Element in

the deck.

common

more closely
figured, more scien¬
equally true of methods in banking. Compe¬
tition compels a more accurate determination of
just what
is and what is not profitable.
The accounts must be
analyzed to the closest degree. We must rely upon small
and carefully figured profits, and we think that the more

tific.

customers.

to be successful must be

plan which has been suggested of requiring a free
$500 in all accounts is really an admirable one.
It is absolutely correct in theory. The
only question of its
application is one of expediency in dealing with large

It is

lowed the methods of their fathers.
U

balance of

The

It would be

larger deposits, and thus to

The

of it

of accounts?

prevent the shopping about of customers from bank to

due.

back to its

their terms in respect to inter¬
care

dignfied to have uniform rates than to have the
cut-throat business which many have been
engaged in from
the unseemly scramble for

$500, though a number of banks in our city feel that
$1,000 is the proper minimum for interest-bearing accounts,
and the minimum of
average balance which should re¬
ceive interest above the lowest rate, at
$3,000.
With the plan of
charging small accounts in operation,
interest can be allowed on smaller balances than
otherwise,
for we are coming closer to
making each account pay for
itself.
By this arrangement one account is not leaning
upon another for support, and we can give to each its just

manner

tain localities agree
upon
est allowed and for the

interest should be received at

By Edgar

parts of the country. Presumably
higher limit than the country; but

principle which we have enunciated of a finer differ¬
entiation between accounts of varying
amounts and de¬

that, and below the next determined limit, there should
no

carry a

that the

rules should be automatic. If the account falls below the
determined limit, it should be charged for. Rising above
be

city may

dtp

workings, somewhat different, but none the less potent and
effective; it is the close touch and contact of one per¬
sonality with another; the influence existed ofttimes un¬
consciously.
You have all heard time and again
as an objection to
corporate Trusteeship that “A Corporation has no soul”—
in other words, the personal element is
This
missing.
charge is absolutely false. A Corporation is only an organ¬
ization, a combination of individuals, persons, and can and
only does live and act through the personalities of its mem¬
bers on those who manage its affairs.
It is their heart
throbs that give life, vitality and effectiveness to the cor¬
poration they represent, and its success is measured and
only limited by their ability and consecration, the extent
to which they put into the business their own
personalities
—their very selves.
The modern Trust Company is neither a “freak” nor a
“sport”—the off-shoot of some other business—but is, as
it were, a new creation, called into
being by the needs of
mankind, and it can and does meet those special needs as
no other method or plan can, for there is
scarcely a condi¬
tion or contingency in a man’s affairs, be it
large or small,
that cannot be met and covered by the modern Trust
Company.
It is in this branch of the business and that of Post

Mortem

Administration, that I, as a Trust Officer, am
intensely interested. While our Trust Department
also includes the transfer and-registration of Stock and
the certification of Bonds, these I rather look
upon as inci¬
dental, eagerly looking forward to the time when the busi¬
ness will justify their transfer to a
separate department,
and the Trust Department confined
exclusively to true
business, using the word “trust” in its highest sense.
A]1 byppess is based upon trust and confidence, but Life
Iiisuraria; Companies and Twist. <?omp*nies occupy a .pemost

TRUST
culiar and far

COMPANY

important position, for in them center
highest form. In the every-day
business of the world, a man is expected and expects to
take care of his own affairs; that’s his business in life, and
if loss or failure comes he can only blame himself.
But
where a man, by hard work and self-denial, carries a Life
Insurance policy or accumulates a fortune, be it large or
small—for the protection of his loved one dependent upon
him—the situation is entirely different; he must of neces¬
sity depend on some one else. True life insurance is pay¬
able only after the death of the insured; an estate is not
more

trust and confidence in its

-administrated until after the death of the testator; to be
false and untrue to such a trust is unpardonable.
The

responsibility is great, the work laborious and ofttrying, but is not, or at least, should not be slavish.
.A slave does not do the best work; his heart is not in his
work; he works because he is compelled to. No such spirit
•can accomplish the best results in
any business, particularly
in the strictly trust business; it must not only be sincere
and conscientious, but hearty, heart in the work, the work
in the heart—the personal element—until the work
really
becomes a joy and pleasure.
While Trust Companies are not organized and carried
•on primarily for charitable
purposes—for to be worthy to
be trusted with other people’s affairs they must show
themselves capable of handling their own affairs wisely
-and profitably—still I know of no other business where
there is such opportunity for unselfish service. And While
I admit that the dollar mark is the standard or scale by
which the great majority of mankind measure success, and
in that success expect happiness, say what you may, un¬
selfish service is the key, the only key, that unlocks the
•door to true happiness.
“He that loses his life—gives it out—-shall find it.”
But I have no desire or intention to weary you with a
lengthy discussion; what I have said in a crude and homely
way are but facts well known to you all. Integrity, ability
and industry are absolutely essential to the business—but
without the personal element, the putting in of ones’ very
self, the fullest results cannot be obtained. This is true
in active trusts such as Assignments, Receiverships, etc., as
times

well

Post

Mortem

The Duties and

Administration.

valuable

Responsibilities of

SECTION.

business, but in

187

bad way, may be saved or lost to its
community at large by the presence or
absence of the personal element. In the administration of
estates it is also absolutely necessary. If there is a mean
streak in a family it is very apt to creep out in the division
owners

and the

of “Father’s Estate.”

Who of

have not met with such

experiences? But by the patient exercise of the personal
element Jong and expensive litigation may be avoided, in¬
terest harmonized and families kept together.
All this in
a way is a labor of love; it cannot be charged for in the
fee.
The statutes do not provide for compensation for
such services, it cannot be itemized in a bill, it does not
pay directly in Dollars and Cents, but aside from the satis¬
faction experienced from a duty well and faithfully per¬
formed it does pay materially in the long run, for a satis¬
fied client

is the best

and most effective sort of adver¬

tisement.
The company which I
from its organization has

have had the honor to represent
made it a rule never to decline a
small trust, believing as we do, that being a creature of
the State, and granted certain privileges thereby, it is a
duty we owe to society at large, to act as Administrator,
Guardian of estate, etc., even where the amount involved
is frequently less than $1,000 and the statutory compensa¬
tion insignificant, for otherwise such matters are left to
some inexperienced relative or worse, and the small patri¬
And here the
mony, but their all, is lost or squandered.
personal element comes in, in its highest form; by careful
attention and the exercise of a personal interest many an
orphan child is cared for, educated and fitted for life, all
from a very insignificant amount of money, where other¬
wise it would have become a public ward, dependent upon
charity.

topic I trust that many of
present will give us their experience in the line sug¬
gested and make the discussion a sort of experience meet¬
ing, for the scope of the business is so large and experiences
so different, that it will be mutually helpful to know how
the other fellow gets along. This, to my mind, has been
one of the many benefits the organization of the Trust
Company Section of The American Bankers’ Association
has brought to its members.
In the discussion

of this

those

Trust Company in Connection

with Investments to be Offered to the Public,
By F.

[Mr. Parsons

was

J. Parsons,

Vice-President of the United States Mortgage & Trust Co. of New York.

unable to be present and in his absence

his paper was read by
stated that the topic

the Secretary, who in introducing it
Mr. Parsons had chosen to present
•covers but one of the many classes of investments which
might be grouped under the general thought assigned for
■consideration, and the principles laid down, while applicable
in the main to mortgage operations in all cities, refer
more particularly
to the safeguarding of Western and
Southern investments of this character made by Western
institutions. The Secretary added that Mr. Parsons had
taken the liberty of using^in part, a paper
prepared for
delivery at a previous convention to which he had been
invited, but where circumstances made it impossible for
him to be present.]
It is an admittedly hazardous undertaking for a con¬
servative Eastern man to visit the expansive and enthus¬
iastic West. As one of the agents of the company which
I have the honor to represent has tersely stated it, “One
is in danger of having the partition between his brains
and his imagination worn away” by such ah experience.
So long as operations are conducted from the Eastern ■
seaboard, reasonable safety is assured, as the moist and

Eastern

corporation to part with its funds, and the methods
employed for its protection has been thus humorously

described:
“Between the desire of the Western representative for
the transfer of funds to his vicinity and his full realization
is an objection which, I am told, is as much a mystery to

Eastern conservatism as it is to Western enthusiasm.
I
allude to the mortgage committee of this company.
Just
what it is, and who compose it, is. one of the insolvable
problems confronting all the representatives of the company.
I am told that you can worship it without violating the Ten
Commandments, or damn it without incurring the penalties
of everlasting punishment.
Some have seen it, but whether
it works with a slot or by pushing a button, none know.
It is said to be impersonal, incorporeal, and mysterious.
If it can travel, and will come West, however, I
tee that while it may not act indifferently, it

will guaran¬
will be less
susceptible than heretofore to those peculiar attacks, the
paroxysms

of which

are

felt

severely by

than

itself.”

The

step has been taken. We have crossed the continent.
seen the West, and it is our earnest desire that
while false impressions^ if any existed, may have been cor¬
rected, and that hereafter we may look' at your splendid
country with open eyes, nothing of that true conservatism
which in the long run i&&8 necessary to the permanent
well-being of the W&t asTBf tfi&'T^kstfmay ha^e^ b^fi°tOsfi
We have

188
It

BANKERS’

CONVENTION.

appreciated that the duties and responsibilities
making of mortgages which are to be used
as a basis for
investments, bonds, are very great. Such
bonds are usually
purchased by individuals of limited
means
and with little opportunity of
judgment of the
merits of the
underlying security. Moreover, from the
standpoint of the lender, the margin of profit represented
by the difference between the rate of interest paid upon
the bonds and that received from the
mortgages securing
them, is so small as to make it essential that the business

be conducted in such

with

involved in the

manner

preclude the possi¬

bility of losses under foreclosure.
It

therefore

apparent that the factor of prime im¬
phase
will be principally
my remarks

portance involved is that of safety, and it is to this
of the problem to which

confined.
The first

requisite for safety in mortgage loaning is that
are distinctly unfavorable to the
lender be avoided. Under this head
might be mentioned a
heavy tax upon capital employed, burdensome foreclosure
requirements, and stringent homestead and exemption laws.
In certain States,
loaning companies are taxed upon
their entire capital stock,
despite the fact, easily sus¬
ceptible of proof, that but a small percentage of the same
those States whose laws

is invested within the State.
such

The manifest unfairness of

practice will be plainly seen when the result is
contemplated should all the States adopt a similar course.
'No better reason is
furnished, however, for such laws than
that the State is not in a
position to know whether the
companies’ statements in this respect are correct or not,
and therefore, the only safe course is to tax the
entire
capital.
Such taxation, as a rule, fails of its
object. Money is
a
commodity which seeks the highest return consistent with
safety, so that taxation beyond reasonable bounds in one
State causes it to seek other and more
hospitable fields.
Moreover, the borrower is ever the servant of the lender,
and even when the latter
nominally pays the tax, the
actual result is a direct tax
upon the former, in the form
of

The

increased interest rate.
taxation of

individual

mortgages, the mortgagor
having already paid the tax upon the property without
offset by reason of the
mortgage, is an especially objec¬
tionable form of double taxation,
tending as it does to
encourage subterfuge and evasion, and hindering the free
loaning of funds. The procedure in New York State,
whereby a special tax of one-half of one per cent, is paid
at the time the
mortgage is recorded, is probably as satis¬
factory as any system of mortgage taxation thus far
devised.
The borrower, of course,
usually pays the tax,
but thereafter the
mortgage is free from taxation for any
purpose within the State, and all doubt and
uncertainty
and consequent cause for
anxiety is removed at the outset.
In some States there is a
period, ranging from six months
to

two years,

within which borrowers may redeem their
property, after foreclosure has taken plaoe, while in others
certain classes of

property

tion under foreclosure

either exempt from execu¬
hedged about with technical

are

requirements, making it difficult to loan upon them with
safety; all of which tends to deter capital and is also
reflected in the interest rate charged
upon
It is also important to select

loans.
carefully, from the stand¬

point of location and natural
loans

are

to be made.

that cities

of artificial

resources

the cities in which

The

history of the past has shown
creation, those largely dependent

single industry and those whose growth is either
greatly above or below the normal, are bound to suffer
severely in times of depression and should therefore be
avoided as fields for mortgage loans.
Only those cities
should be considered which have natural
advantages for
shipping, distributing or manufacturing, or those with rich
surrounding territory or advantages of climate.
The
growth of pities such as Chicago, St. Louis, Kansas
City
upon a

ft™}'

City

cisco, Seattle

and Portland, on the Pacific
Coast; Detroit,
Cleveland, Minneapolis and St. Paul, in the Central North,
and such
thriving cities in the South as Atlanta, Jackson¬
ville, Houston, Dallas and San Antonio, is not due to
chance, nor in any large degree to the will of any man or
body of men, but is made possible by reason of the natural
advantages which they possess. Instances could be cited
of the
folly of attempting arbitrarily to locate a city

without regard to natural laws, and the deserted streets of
than one town whose activities
largely decreased
the

passing of the surrounding forests or the ex¬
necessity for
permanent growth
and safety.
“Boom” towns should be avoided, as in the
excitement of rapid growth there is no
opportunity for
judging of its soundness and permanency. During the land
haustion of adjacent mines, make clear the
diversified industries as a
requisite for

excitement of the early 90s
prices were inflated to a point
which in some cities has not
yet been reached by values

despite the actual growth of almost twenty years. On the
other hand, if the factors which have
created a town are
not sufficiently
strong to cause a healthy growth, a safe
and profitable
mortgage field cannot be expected. For
these reasons outside
capital should not be invested in a
city until a population of at least 40,000 has been reached,
by which time a reasonably accurate forecast of future
growth may be obtained.
Next in

importance, it is necessary to exclude such sec¬
city as are retrograding in value and locations
which, owing to topographical defects or nuisances, are un¬
desirable. The causes bringing
about the decay of certain
parts of a city are so complex as to make it difficult to
gauge the rate of recession in values, and the
presence of
unfavorable features is
automatically reflected in rentals,
and in the
convertibility of property, so that loans should
be confined to
improving locations which are well defined
and free from objections.
It is also essential to avoid
vacant land, and all
property devoted to special uses. In
the event of acquisition under
foreclosure, unimproved land
is simply a source of
expense, and there is for special
utilizations particularly in dull times, or in
the event of
the necessity for a
change from the original use, an un¬
certain income, a limited
market, and a consequent neces¬
sity for a considerable sacrifice in price if it becomes neces¬
sary to effect a sale.
tions of

Broadly speaking, loans should be confined, in cities of
least, to those classes of property in gen¬

moderate size at
eral

demand; such as retail business property, office build¬
ings and detached residence property, with exceptions in
the case of loans for a reasonable
percentage of the value
upon modern and well located wholesale property, and sub¬
stantially built and well arranged flat or apartment houses
in the larger cities,
provided, however, disproportion be¬
tween land and building values is not too
great. The
decided tendency to apartment house life
having, as such
movements usually do, an economic
impulse, will have to
be admitted, and must be taken
increasingly into account.
Any lender, operating over a wide area, cannot expect
over a period of
years to avoid losses except by keeping in
personal contact with the cities in which loans are made.
Frequent visits to the field of operations are essential and
a
systematic recording of the real estate and mortgage
transactions therein is necessary.
A comparative study of rentals and values in
situated cities of equal size is of the utmost

similarly
importance in

order that tendencies towards inflation in individual

cases

may be made apparent and avoided. The local representa¬
tive with a more limited field of observation to draw
from,
is sometimes misled
by excessive prices for

property, and
by mer¬
prosperity thus discount
the future.
The lender’s study of a wider field makes it
possible to avoid many of such errors. No principal, how¬
exorbitant leases entered into for certain localities
chants who in times of great

ever,

can

maintain that intimate touch with conditions

the Middle^est;, Denver and Salt

the mountainous country; Los Angeles, San Fran¬

tftfUt carefully

select^,, intelligent and responsibly Ipcal
,

TRUST

are a necessity of the business; men who
have lived for a number of years in their respective locali¬

representatives

ties, and who have kept themselves informed upon real
values and mortgage conditions.
In order that a

estate

thoroughly efficient and mutually satisfactory service may
be rendered, the representatives should themselves be stu¬
dents of the principles which make for safety.
The question of the net income over a period of years
is one of the greatest importance.
While there are excep¬
tions to the rule, in all cities there is usually an agreed
income basis upon which all improved property, aside from
high priced residences, is sold. For instance, in cities of
moderate size, well located and nominally improved office
or retail store property is expected to net from 5 per cent,
to 6 per cent, on the investment, and second class business
and residence property from 6 per cent, to 8 per cent.; so
that with the income basis in mind upon which a given
class of property changes hands, the value ascribed to it
should not exceed a figure upon which the net rentals have
paid such a return over a period of years. The return
which a purchaser is willing to accept is affected, of course,
by the anticipated appreciation or depreciation of the
neighborhood.
The mistake should not be made of assuming that be¬
cause a certain amount
of money has been paid for or
expended upon a property the value is equal to that sum,
or that a
property having at one time been worth a certain
amount is worth that sum at the present time, or will be
so necessarily in the future.
For safety, a property must
reasonably approximate the character and value of its
surroundings; for loaning purposes an expensive residence
in a neighborhood of small cottages is of but slightly
more value than its humbler neighbors,
and a retail store
on a quiet residence street may be almost valueless.
With
the growth of a city constant shifts and changes are taking
place, which, while enhancing the value of certain sections,
depreciate and render undesirable other locations. It is
true, that aside from times of great activity, or of unusual
depression, the price paid for property is the best indica¬
tion of its value.
Moreover, the great majority of build¬
ings are suited to their surroundings. It is the exceptional
conditions, however, under which losses occur that must be
guarded against.
,

It should be borne in mind that in the event of foreclosure

the

principal of the debt will probably be increased by
unpaid interest, taxes, insurance premiums, attorneys* fees
and court costs, and it is also reasonable to suppose that
before the end of the foreclosure and redemption period,
if any, the property will have depreciated in value by lack

The

SECTION.

COMPANY

Duties, and Responsibilities of

of care, so

189

that in all but the largest cities, a loan in

of 50 per cent, of a careful
not considered conservative.

excess

valuation of the property is

The instalment principle, whereby the loan is reduced
annually or oftener by a stipulated amount, is frequently
adopted by careful lenders and is a most valuable feature,
tending as it does to offset unfavorable changes in the land
value or depreciation by reason of the increasing age of
the building. Incidentally, the borrower is trained in habits
of saving and thrift.
Not infrequently, such payments,
made during a period of prosperity, have been sufficient to
bring a loan well within the margin of safety at a time
when general conditions were such as to have made it
absolutely impossible for the borrower to have then made
the necessary reduction.
The moral hazard is an important factor in this as in
other

forms

of business.

whose business habits

essential

that

borrowers

objectionable shall be avoided,
if not always to men of
large means, at least to honest and thrifty individuals
whose past record is favorable and future prospects are
reasonably good. The physical security for a mortgage
loan, however, should at all times be adequate aside from
the personal bond.
A bank, with its close and intimate
knowledge of the changing financial condition of its cus¬
tomers, can and quite properly does depend, to a large
extent, upon their general reputation and business ability,.
but a mortgage lender, parting with funds for a longer
period and being secured by fixed rather than by floating
capital, must be assured that such security in itself is
are

and that loans shall be confined,

sufficient.

So, long as new fields of endeavor remain open to the
enterprise of men, there will doubtless be in the future as
in the

past, those ever-recurring periods of “nervous pros¬
perity,” as some one has so aptly described them, and of
subsequent and inevitable depression. Wealth will con¬
stantly shift and change—sometimes disappearing, some¬

times
fore

reappearing
a

constant

and

new

and

different

form;

intelligent watchfulness

there¬

impera-

tive.

While

inhabit the earth,

however, homes will be re¬
quired for shelter and business buildings for the exchange
of necessities.
To those, therefore, whose loans are con¬
fined to a moderate percentage of the value of property
in universal demand, located in improving sections of grow¬
ing cities, and who will observe the other fundamental
principles herein briefly set forth, the changing conditions
men

of business need be less matters of

concern

than in any

other field of investment.

Trust Company in Connection

with Investments to be Offered to the Public.
By Dimner Beeber,

When

one

President of the Commonwealth Title Insurance & Trust Co., of Philadelphia, Pa.

considers the direct benefit that

bond and the

accrues

mortgage securing it, if it appears that the
mortgage is a trust company whose repu¬
tation for care, prudence, integrity and conservatism is
high, it is easy to see that there must be deep interest
in a discussion of the topic now under consideration. We
are not always apt accurately to appreciate the vital im¬
portance of the mere reputation of a trust company. But
we may be well assured that the public discriminates
with
great accuracy between the reckless and speculative and
the careful and conservative, and bestows its confidence
where it is most deserved, and this judgment is not neces¬
sarily determined by the size of its capital or the amount
of its deposits.
In the long run the characters of its directors and
executive officers determine the clkSs to which a trust
trustee in the

belongs much more effectively than the size or
frequency of its dividends. The truth of the statement as
to the importance of the mere
reputation of a trust com¬
pany is sufficiently evidenced by the promptness with which
promoters of a doubtful or uncertain enterprise seek to
engage in an alliance with a company to which they are
total strangers and of which they know only
by reputation.
It is a tribute to the trust company which has a
reputa¬
tion for conservatism, because their business
experience
has taught them that the mere name will lend much needed
assistance. All of us have doubtless experienced
the ready
introduction to our attention which a bond and
mortgage
with such a high class trust
company as trustee receives,
and it is not too much to say that
many a bond and its
obligor and the prospects of the enterprise secure aV least
a careful and exhaustive' examination
merely because of
company

190

BANKERS’. CONVENTION.

the fact that the trustee is a trust
company whose repu¬
tation forbids the
thought that it would lightly take on
itself the responsibilities and duties of a
trustee. •

as an

originally mortgaged, thereby
Bearing in mind
the conflict of interests between
the mortgagor and the
bondholders, it is not exercising the utmost good faith tothe latter to
agree that any one representing solely the
obligor is to decide the value of the additional
property
mortgaged. It is much better to provide, and usually there
is no
difficulty in securing the assent of the obligors that

Conceding then the importance of the public estimation

of the

standing and conservatism of a trust company, and
the undoubted attraction which such
companies have for
the promoters of new
enterprises, many of which are essen¬
tial to the material
progress of the
to what

are

“the duties and

country, the inquiry
responsibilities of a trust

company in connection with investments to be offered to

public” become acutely interesting. The duties and
responsibilities of a trust company in connection with such
is the real

are

best suggested

necessity for

trustee in

other securities.

This must not be construed into

an
argument in favor of
proposition that the trustee is obliged in the first in¬
stance, in the beginning of an enterprise, to
attempt to fix
the value of a
property mortgaged, because, in my judg¬
ment, this places an impossible burden upon
the trustee.

Nevertheless, it is of vital importance, before any con¬
are assumed, to have
it clearly understood
that the trust company is
unwilling “to assume the duties
of performing a contract whose sole
purpose is to attract
and protect investors, unless the contract is in
reality ex¬
pressed in a form that gives to the investors the greatest
security that the ingenuity of the writer of the deed of
trust or mortgage can construct. It is in vain
for a trust
company to hope to escape censure if, when disaster comes,
the bondholders, who are the real owners of
the property
involved, find that they have a contract to enforce their
rights so loosely and defectively drawn that in reality
they
have scarcely any security at all. There is too
much jus¬
tice in the claim, under the
circumstances, that it was the
duty of the trustee, pretending to represent bondholders or
security-holders, to see to it that every known device or
remedy or mode of procedure that could make more certain
the absolute rights of the bondholders
was
adopted, to
escape the imputation of gross negligence, if not, in
fact,
tract relations

bad faith.

It is often

place

should

remove

prime requisite is that the deed

all doubt

of trust

to what is the real

property
given as security for the bondholders. Every
species of
property, real, personal or mixed, should be described with
such detail and faithfulness that there
could be no ques¬
tion as to what was embraced in the
description. It has
not been at all uncommon for
bondholders to learn to
their great loss that
they did not have a lien upon any
such extent of
property as they were led to believe they
had when the bonds were

negotiated.

Preparation of mort¬
requiring the greatest
part of the draughtsman, and any one who

gages or deeds of trust is
care

the

work

chooses to compare some of the older
instruments with
those more recent and up
to date will be struck with the
immense number of additional remedies to
enforce collec¬
tion

being added from time

to time.

The modern deed of trust is
and rather crude instrument,

growth from a very simple
but it gives much more effi¬
cient remedies and speedier action to those who
have risked
their money for the benefit of the
enterprise. Nor has the
trust company done its whole
duty if it merely has pro¬
vided a clear description of the
property existing and mort¬
gaged, because almost all of these instruments
provide for
the mortgaging of
subsequently acquired property. The
application of such a clause to such subsequently
acquired
property is often a problem of considerable
a

difficulty. One
provide that mere repairs or sub¬
stitution of old property for new shall not
be considered

cannot be too careful to

impossible for

trustee

the bondholders to

a value upon

the mere physical property mortgaged
in a new
enterprise, because at this stage it is impossible
to tell what
may be the value of such property when as¬
sembled for the
purposes for which it is to be used, and

used in connection with

intangible rights such as licenses
patents. But when an enterprise has been in successful
operation for any period of time, a standard has been fixed
by which with reasonable accuracy the value of the whole
property can be fixed, and, when this time has arrived,
it may not be difficult to fix the value of
additions.
I also regard it as one of the duties of the
trustee to
or

be satisfied that the

corporation creating the mortgage and
issuing the bonds has been legally organized, and has the

power to create a mortgage, and issue bonds, because, when
trustee assumes its duties, it would not be clear
that it
had exercised due care if it
subsequently is established that
the whole contract which it made was void
because of the
a

inability of
This does

one of the parties to the contract to make it.
not, in my judgment, impose too great a burden

upon the trust company, for
learned through the aid of

it can generally be accurately
competent counsel having ex¬
perience in such matters whether such power exists. It
should bje remembered that the trustee in
making the con¬
tract involved in the trust
mortgage is representing a class
of people
generally all of them unknown at the time, and
this very uncertainty as to who will be the owners ulti¬
mately of the bonds would seem to make it clear that the
trust company in their absence, and
assuming to represent
them, should make sure of the fact that it is entering into
a

The first and

representing the bondholders should be con¬
fixing the value of subsequently acquired property.

the

The

borrow money.

increased issue of bonds.

someone

sulted in

consideration of what

mortgage securing
peculiarity of the trustee’s
situation is that it is chosen
by the promoters, founders
or conductors of an
enterprise to represent bondholders
or the holders of other securities
whose interests, in fact,
are antagonistic to those who choose
it. At the very be¬
ginning of the business, when the trustee evinces too great
anxiety to protect the interests of bondholders, it is apt to
disconcert, and perhaps repulse, the parties who bring it
business, because it is undeniable that some promoters or
managers of business are too apt to resent too much inter¬
ference with the plans which
they had prepared for the
protection of those from whom they expect or hope to
bonds

should be provided, that under such circumstances
at

least

the

investments

increase to the property

justifying

contract with

corporation competent to make it. It
the trust company to be
priority of the lien, but
frequently exaggerated. As
to the lien, however, the trust
company should not become
the trustee in a mortgage
describing it as a first lien, unless
it is satisfied that such is the fact.
Owing to the possible
uncertainty the additional obligation is imposed on the
trust company to be careful that the terms
describing the
lien of the mortgage should not be
equivocal.
Another phase of the question is this:
Should the trust
company, having done everything that it could do to make
the mortgage complete in all respects, undertake the sale
of the bonds to the public? This is a
comparatively novel
question, although its novelty does not necessarily mean
that the trust company might not under proper circum¬
stances undertake to sell the bonds secured
by mortgage
in which it is trustee. Speaking only as a
Philadelphian,
so far as I am informed, not one of its trust
companies
has a department devoted to such
purposes. Whether the
absence of such departments in the Philadelphia trust
com¬
panies is due to the general conservatism that character¬
izes the transactions of all their business, or whether it is
the deliberate judgment after a consideration of the ad¬
visability of such a department, I am not able to say,
but one can easily see many objections to it. At the same
time I cannot presume for a moment to criticise the
prac¬
a

may not be altogether easy for
able to satisfy itself as to the
the difficulty in this
respect is

tice because I

conservative and

aware

of the fact that many

reputable,
highly esteemed trust companies in the

adjoining States of New Jersey and New York have such
a
department. Without being hypercritical, however, it
seems to me that a trust company that undertakes to sell
for its own profit bonds secured by a mortgage in which
it is a trustee has made it almost impossible to defend
itself with the interests of the obligors that it will be easy
to consider it as personally interested in the way of profits
in the success of the enterprise.
And under such circum¬
stances, any disaster that reflects upon the honesty, or the
conservatism of the obligors is likewise apt to reflect in
the same respects on the trustee. Would it not be difficult
to escape the charge that it, as a trust company, whose
very name implied the trust relation, was engaged with
others in originating and promoting an enterprise whose
success was impossible because of inadequate conception of
difficulties plainly to be seen after disaster has arrived?
We ought not to forget that, originally, at least, the idea
upon which the foundation of the trust company was
planted is that of Agency. In its origin the trust company
did not pretend to be acting as an independent entity deal¬
ing with others as strangers and at arms’ length. It was
an
Agency to act for others and assumed a trust relation
towards all who confided their business to it.

was

Agent subject to the control of a principal under instruc¬

191

SECTION.

COMPANY

TRUST

clearly defined, and it is a universal rule
system of law of which the writer knows that
Agent can never have an interest antagonistic to
the interest of the principal.
A corporation mortgage or
deed of trust naming a trust company trustee makes it
the representative of the bondholders, and the corporation
deals with it as such. The purchaser of the bonds, in legal
effect, accepts, and, in fact, appoints the trustee his agent

tions

more or

less

in every
such an

for the purposes mentioned in
is a trust relation, and while
terms of the
contract

towards

different

each

it is defined by the written

trust, yet it is something more than a mere

involving

somewhat

other

confidence reposed in another, and
the relation two parties hold

from

because

contract between

written

prepared by them at arms’ length from each other.
a trust company under¬
take to sell bonds secured by a mortgage in which it is
trustee?
In either view, does it gain a special advantage
over other regular dealers in bonds because of its intimate
trust relation with the purchasers? If it does, ought it to
be willing to accept such an advantage, and does it not
expose itself to a charge of something more than mere
negligence, in fact of something like bad faith, if disaster

them

Under such circumstances should

comes

to the bonds ?

'•

•
.

•

J-'. '

r‘>n't iidt k>

- -CWS

Ifr.

ClTJBO^

f O'jii

This relation

the mortgage.

•jhjfc

ml
r*

9b1v&iq o;'
t*rr

■:

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Of t»u dotlttfiO
»|jr ^i 4**’

Detailed Report of

Proceedings.

Fifteenth Annual Meeting TRUST COMPANY
SECTION, Held
MORNING SESSION.

their

Vice-President Fuller in the Chair.
The Vice-President:
The fifteenth

annual meeting of the
of the American Bankers’ Association
will now come to order.
The proceedings will begin with
prayer by the Reverend J. Whitcomb Brougher, Pastor of the
Temple Auditorium of Los Angeles.

Trust

Company Section

PRAYER.
Dr.

Brougher:

Thee

for

the

Almighty God,

occasion

that

our

brings

Heavenly. Father, we thank
together this company of men

representing the great financial interests of our country.
Thou bast
promised to give unto us wisdom, and we pray that Thou
mayeat
give unto them wisdom in the conduct of aU the
business of this
day, not only in connection with this section, but with
other
every

section of this
will

increase
the

crease

association, that

and

confidence

positions in these banks.
character find their
and

day.

our

country

Direct and guide

take place as
country and in¬

who

hold

and

men

May

Let

transactions may

prosperity of
people in those
more

place at the

our

great financial relations.
this

such

the

head

become

may

these

ask

all

responsible

Integrity and

institutions,

firmly

Thy blessing rest
us.

our

upon

this

that

established

its

all that is done

for

Christ’s

sake.

Amen.

The

Vice-President:

announce

with

deep regret that I have to

the unavoidable absence of the President of this

Scott:

Mr.

sec¬

Chairman

and

gentlemen:
Bankers arc
than lawyers.
I was informed two or three
weeks ago that I was expected to
speak, and I gave my ad¬
dress to the printer that it might
be printed in various jour¬
nals of aspiring names, in order that
my name might go down
to posterity.
I therefore will have to inflict upon you the bur¬
den of reading this address to
you, and after that I am going
more

exacting

talk to

you.

Scott, President of
Angeles Chamber of Commerce.

becomes

Los

my very pleasing
to you, through

ilege, to extend

Commerce, of which
cordial

welcome to

have

duty and also my great priv¬
the Los Angeles Chamber of
the honor of being President,
a

this, the fairest spot

God’s foot-stool.
You will pardon my modest reference to
the climatic and other
advantages of this beautiful section, but inasmuch as it was
that which drew most of us
here, and which has kept us here
since, I desire to attract your attention to it also. You will
find not only evidences of nature’s
beauty, but likewise a
demonstration of the hardy efforts of the
pioneer who has gone
out on to the desert places and into the
desolate ranges where
only cactus and sage-brush thrive, and has renewed the face
of
on

the earth

by his energy, ability and scientific knowledge. These
have been made under severe conditions and
discourag¬
ing prospects. The water supply of this
section, where water
efforts

must always be king, had weakened
the efforts of the most
optimistic as to the future of Los Angeles and
vicinity, and
only the sterling American spirit, a spirit which
you and all
of us share in
common, has enabled us to battle with the
grim forces of nature by going 225 miles
away from here and
harnessing from the virgin snows of the lofty Sierras the
waters of the Owens
River, which will come through the long¬
est municipal aqueduct of the world to
free us, and
succeeding
generations, from the fear of insufficient water
supply.
For
this enterprise,
this city has burdened itself to an extent
which I am sure is
attracting your attention, and which, we

flatter

ourselves, has excited your admiration.
To the south
us, American genius has had to come to the
support
of Dame Nature by
building around our harbor, at San Pedro, a
breakwater long enough and
strong enough to give to us what
we believe is one of the
finest waterways in the world and
by
which we hope to
provide an outlet and inlet for commerce
between this thriving
community and every section of the com¬
west

mercial
We

world.

want

to feel, as you walk down our streets
and
faces of your fellow-citizens now
residing here,
that most of them have come from
dear old spots back
East,
which will always be near and
dear to them as the home
of

look

into

you

the

undiluted

for

the

devotion

scenes

for

but

coupled with
old, is

and memories of

this

new

and

lairer

even

life in this blessed
country.
that the inspiration which
brought us here and
kept us here may possibly produce a similar effect
upon some
of you, but. in
any event, whether you are just simply coming
and going, “as
ships that pass in the night,” please be assured
of our best wishes that
your stay may be productive of every
possible good, not only of the
important business which brought
you together, but likewise to
give you an opportunity for recrea¬
tion and relaxation in
what is the natural playground of
America.
on

hope

want

say

colloquially.
come

from

word

you

gentlemen informally and

Nearly everybody in the city of Los Angeles has

some

section of these United

States, and their expe¬
be worth while your
knowing. I hope you will take an opportunity
during your stay
here to rub elbows with the men who have
done things in this
community, and find out where they came from, how
they came
here, and what persuaded them to stay here.
They say all kinds of funny things about Los Angeles.
There
was a greenhorn
Irishman came out here in the boom
days of
1887.
In that day, the banker and the
lawyer were not con¬
riences

horn

this

much

met

city and vicinity

may

the real estate operator.
When the green¬
at the corner of First and
Spring, the
look at the greenhorn and he
as

old timer

old timer took

said, “Mike, what
brought you here all the way from the
Kingdom of Kerry?”
lie said, “Pat,
honestly I came out here to make an honest
living.” The old timer looked at him and said,
“Begorra, you
will

soon

competition in

millionaire if you do that.
line out here.”

You

will

find

that

But one thing, you will notice a
spirit of boosting in this
great city.
It may be tiresome and obnoxious to
you at first,
but I want to tell you that
every community boosts itself.
The
man
of New York is a little more
complacent about it: the
man
from Boston recognizes the historical
connections of his
city, and tells everybody about it.
So we go down the line,
some of us fellows that have
trod up and down

Broadway. I
going back to the East once myself and being some¬
what ashamed of my
boosting proclivities, I sat back in the com¬
pany—not of bankers, but of other people interested in
boost¬
ing other enterprises. And every one that got
up before me—
I was the lone delegate from
California, and I was about sev¬
remember

Address of Welcome by Joseph
It

warm,

and affection

land, which has responded so
nobly to their efforts and which
is prolonging for
themselves and their dear ones a still longer
lease

sidered

It is

tion, Mr. McIntosh. In the absence of the President it becomes
the duty of the Vice-President to
preside at the meeting.
I
have very great pleasure in
introducing Mr. Joseph Scott, the
President of the Los Angeles Chamber of
Commerce, who will
give us the welcoming address.
(Applause.)
Mr.

love

the

Oct. 5, 1910.

early manhood and earlier childhood,

this

WEDNESDAY, OCTOBER 5, 1910.

Los Angeles, Cal.,

enteenth

the program.

We got up about three o’clock in the

morning in that part of the world where they believe in
hibition by legislation, but not
necessarily by practical

rience of their
The

from

man

grand

old

the dawn

own.

And each

Boston

got

commonwealth
of civilization on

pro¬

expe¬
section.

man got up from his
up and said: “I come from the
of Massachusetts which witnessed

this great continent, when the Pil¬
Plymouth Rock,” and so on. And the
man from New York said: “I come from
the great Empire State
of New York, that holds in the hollow of
its hand the financial
destiny of this great republic.”
The man from Pennsylvania

grim fathers landed

got up and said :
“I come from the great Keystone State that
has in the bowels of the earth
enough mineral wealth to supply
the world for centuries.”
The man from Ohio got
up and said :
“I come from the place where the Presidents
have been manu¬
factured in the past, and will be manufactured in
the future.”
The man from Virginia got a little hot about
that, and he told
about the Presidents that
Virginia had

produced. Along about
end, about two o’clock in the afternoon, about the seven¬
teenth on the program, up came this
poor, lone, desolate dele¬
gate from California, who found out he was not the
only fel¬
low in the boosting business.
And I thought it was my time
to tell them where I stood.
I said : “Gentlemen, I come from
the grand imperial State of
California, larger than the whole
of New York, New England,
Pennsylvania and Ohio put together,
and if Christopher Columbus had landed on
the Pacific Coast
you fellows would not have been discovered yet.”
(Applause.)
Now, I want you to get around about our section.
I am
awfully glad you brought your wives and your sweethearts.
This is the country and the climate where man
breathes peren¬
nial youth.
If a man cannot love his wife in this climate and
the

under

ried.

these

circumstances

ought

never

have

been

mar¬

This is the country where romance and
(Laughter.)
chivalry have always been sustained. In the older days of the
Castillian, you must remember, politeness and respect and cour¬

tesy for the opposite sex was absolutely
necessary in any kind
of a social world; and when the
gringo came along from the
places where you have been thriving he became a confirmed
and

TRUST
lover

climate that

ardent

his

wife.

boost

is not because

COMPANY

come

it, but it is because we derive

to this

benefit
from it.
And I hope that the ladies will see that their hus¬
bands stay in this climate a considerable time, so when they
come back to the dear, charming place in the East they will be
sorry that they left the charming spots in California; and the
wives will do as they have done in the past, yank them back
to this most blessed spot of God’s green earth, right here in
this

(Applause.)

vicinity.

The Vice-President:

now

take pleasure in introducing Mr.

C. Drake, who will welcome us on behalf of the trust com¬

panies of California.

Address

the

Welcome by J.

C. Drake, President of Los
Angeles Trust & Savings Bank.

Members

Bankers’

the

Association

Trust

Company Section,

American

SECTION.

193

kept entirely separate from those of the commercial and sav¬
ings.
The use of the word “trust” by companies or corpora¬
tions can only be obtained hereafter by such institutions as
comply with the new bank act, and qualify for the perfor¬
mance of their duties by depositing approved securities with
the State authorities.
This will lend a desirable dignity to
the name of “trust company,” which has heretofore been used
as part of the name of
all kinds and conditions of associa¬
tions and corporations, doing any and all kinds of business.
Here you are, in southern California, a State with more
than a thousand miles of sea coast, a State separated from
the commercial center of the Union by two thousand miles of
In behalf of the trust com¬
mountains, desert and plain.
panies of this great empire State, I have the honor and the
pleasure to bid you welcome.

Response to Address of Welcome by Vice-President Oliver
C. Fuller.

If you

will place before you the map of the United States and
point out the position of Los Angeles, it will be seen that you
have assembled at one of the corners of this great Republic.
Indeed, had the Convention been called to meet in Eastport,
Maine, the distance to be traveled by most of you would have
been less than the long journey you have made in crossing the
plains and the Rocky Mountains to arrive in this city on the
Pacific Ocean.
To those who have made this journey for the
first time, and who, doubtless, have heard but little of this
city, it may be permissible to state briefly some historic infor¬
mation.
We are told that centuries ago this place was called “Yangna,” and its population consisted of three hundred creatures,
barely above the animal plane.
Then follows the period of
Spanish occupation.
Cabrillo, “the Christopher Columbus of
California,” entered the bay of San Diego in September, 1542,

and

little later sailed into the

bay of San Pedro, now a por¬
municipality.
But the real history of California
began in 1769, when Captain Gaspar de Portola came to expel
tion

this

the Jesuits from Lower California and to establish Father Junipero Serra, the
the expedition

Franciscan, in Alta, California. The same year,
reached the site of what is now Los Angeles.
They rechristened “Yang-na,” calling it “Pueblo de Nuestra
Senora de Los Angeles.”
Father Junipero Serra began to estab¬
lish

the

chain

missions

that

has

won

him

immortal

fame.

At the end of the

eighteenth century, Los Angeles consisted of
thirty adobe houses.
Mail came from Mexico once a month,
over El Camino Real—the King’s Highway.
In 1817, the first
record of a school appears.
In 1847, Mexico lost California and
this pueblo became a town of the United States.
Between 1850 and 1870, Los Angeles was known as one of
the toughest towns in the country—but it has improved since.
In 1870, the population was 5,000 with 110 saloons.
In 1880,
the population had increased to 11,000.
In 1890, to 50,000. In
1900, to 102,000, and today it is more than 300,000 and there
are only 200 saloons, while we have 37 banks.
It is estimated
that by the end of the next decade we will have a bank for
The original pueblo contained 36 square miles,
every saloon.
while today there are 101.
In 1860, the assessment roll was
$1,000,000 ; today it is $350,000,000.
It is the metropolis of Southern California, and therefore of
the citrus fruit'industry.
In 1856, one carload of citrus fruit
comprised the output. In 1884, it had grown to 400 carloads,
and this year it is estimated there will be 50,000 carloads, with
0

valuation of

Gold is

$25,600,000.

longer California’s chief mineral product.
Petro¬
leum, with a yearly output of sixty million barrels, has deposed
the

yellow metal.

The last material rain fall to visit Los

Angeles was the 11th
April—now six months ago. No doubt many of you observed,
in approaching the city, the arid condition of the soil, and as
your trains drew across the bridges over the Los Angeles River,
you could see only its banks and bed, with no water in sight.
Notwithstanding this, the agriculture is in a flourishing condi¬
tion, the green leaves are seen on the orange trees, the rose
of

(

bushes still bloom, and the lawns are verdant.

Water, the blood

of the soil, has been pumped from its percolating underground
streams and distributed over the lawns and orchards.

In the banking line, there are 37 institutions, with $23,000,000 capital and surplus, and deposits of over $120,000,000.
The bank clearings for 1909 were $675,000,000 ; being an increase
of $150,000,000 over the preceding year.
The population is now increasing at the rate of over twenty
thousand a year, and new buildings are being erected in excess
of a million dollars a month.
The city and interurban electric
railways, with nearly a thousand miles of trackage, dispatch
over twelve hundred trains a day.
San Pedro, now an integral
part of the city, is just beginning its career as a commercial
harbor, to promote the tide that will sweep along the Pacific
Coast upon the completion of the Panama Canal.
Within three
years, we hope to complete an aqueduct, bringing abundant
supply of domestic water from the Sierra Nevada Range, at an
outlay of $25,000,000.
In regard to the financial institutions represented by this
Section, the State of California can claim to date only seven¬
teen trust companies.
By recent act of the State Legislature,
the assets of the Trust Department of these institutions are

The

Vice-President:

the

absence

our

President

to our address of welcome
Section of the American
Bankers’ Association, representing a membership of more than
one thousand trust companies, with resources aggregating more
than four billions of dollars, and particularly on behalf of the
members present, most of whom have traveled long distances
to be with you.
I thank you, Mr. Scott, and you, Mr. Drake,
for your cordial greetings, and through you, their representa¬
tives ; we desire to thank the citizens of Los Angeles and the
trust companies of California for their generous hospitality so
delightfully extended to us.
The welcome you have given
us is
so warm, and the preparations you have made for our
comfort and entertainment are so perfect, that there is no
room for doubt that we shall enjoy ourselves to the limit of
becomes my present duty to respond
on behalf of
the Trust
Company

capacity while in your midst, and that when we leave we
carry away with us cherished memories of Los Angeles,
of her charming people, of her splendid institutions, of her
delightful climate and of her beautiful, picturesque surround¬
our

shall

ings, never to be forgotten.
The

primary

purpose

of these meetings is the benefit derived

through exchange of ideas, the accounting of experience. and
the discussion of practical methods for bettering the service
that we are all endeavoring to render to our Institutions
throughout our respective communities. Nevertheless, the oppor¬
tunity of making your acquaintance and cementing friendships
that come to us through these annual gatherings are not to
be counted among the least of the advantages gained from
these meetings.
Hoping that our sojourn here may prove of mutual interest
to you and to us, and that when we have departed you may
feel in some measure repaid for all your kindness to us, again
I

thank
The

you.
next in

order

the President.

the

program

is the annual address

Mr. McIntosh expected to be at this meet¬

ing and prepared an address.

When he found it impossible
with the request that I read
it, and with your permission I will do so.

to be here he forwarded

it to

Annual Address of the

President, H. P. McIntosh.

regret that it is impossible for me to be present at this
meeting, so have asked Vice-President Fuller to read a few
suggestions I have to make, which I trust may result in ben¬
efiting and improving the Trust Company Section.
It has been and is still customary at our annual meet¬
ings for the President of the Section, the Chairman of the
Executive Committee and others to suggest improvements and
I

reforms in trust company

business methods which I fear, in a
great many cases, are forgotten after the adjournment of the
respective meetings at which such suggestions are made, hence
therefore, it seems fitting
Section be reviewed to remind
you of some of the valuable suggestions that have been made,
in the hope that this may result in many of these suggestions
being made actualities.
At Denver, in 1898, Mr. Breckenridge Jones, the Father of
the Trust Company Section, suggested that “the Section or
the incoming Executive Committee cause to be prepared and
submitted at the next meeting a form
(fixing the powers
and duties of the trust company as trustee under corporate
mortgages) to be inserted in all such mortgages where a
trust company is trustee.”
I fail to find where this suggestion
was carried out, so I recommend that a Committee be appointed
at this meeting to prepare such a form and submit it at the
next meeting of this Section.
At the same meeting he also
suggested that the Executive Committee at the next annual
meeting submit to the Section “some well-considered views as
to the best way of keeping the accounts of a trust company.”
Doubtless the two books of Trust Company Forms that have
been prepared by the Executive Committee, one In 1899 and
the other last year, have accomplished considerable in this
line; but cannot more be done? Under the rules of the Inter¬
no

benefit

derived

from

them

that the annual reports of the

state Commerce Commission and the rules of the State Public

Service
under

Commissions, railway and other companies operating
have adopted a uniform system of accounting.

them

194

BANKERS’, CONVENTION

Their operations are just
of a trust company, so

diversified and intricate as those
if uniformity of accounts can be
employed by them and by banks, why can’t It be employed
by trust companies? I think it can; hence why shouldn’t we
do something to accomplish this?
Might it not be well to
also appoint a Committee to promote such a
system?
At New Orleans, in 1902, Mr. Clark Williams delivered an
address entitled “More Adequate Protection of Municipal Bonds
through the Certification of Trust Companies,” a very instruc¬
tive and valuable address.
The figures and facts contained in
this address make a convincing showing that the certification
of municipal bonds by a trust company is a subject to which
our Section
should give Its most careful attention, bending

Banking Statutes,” which every bank should have.
Without
going into a fuller description of It I will refer to the “Tabu¬
lar Summary of State Legislation
Governing Trust Compa¬
nies,” which I embody in this report.
It is too lengthy to
have read now, but I recommend that when
you receive the

report of this meeting you examine it, because from it you can
obtain in a very convenient form a synopsis of the trust
company legislation in your own respective States as well as
in others.
At New York, in 1904, Mr. Geo. W.
Young strongly recom¬
mended the forming of State organizations of trust
companies,

using these words:
“The perfection of the organization of trust
companies in
the various States is the best preventative of
any differences
between the banks and trust companies that
may affect the
interests and conveniences of the public.
The natural out¬
come of such organizations will be
co-operation between them
and the adoption of general rules for the
regulation of busi¬
ness in the
framing of which both institutions shall have a
voice.”

Its efforts to have statutes enacted in those States having none
on
this subject, providing that municipalities SHALL have
their bonds certified by a trust company, and if such a statute

cannot be

enacted, have one enacted that municipalities MAY
so certified; such a statute to
empower the
municipal officers to incur the expense of certification, thereby
removing the doubt that some of them have as to their right
to incur such expense without statutory permission.
It will
then be clearer sailing for the trust companies to
persuade
them to do it.
Ohio passed such a statute last winter, and
as
a
result the officers of one of the largest cities and
counties In Ohio are considering very
favorably having their
bonds certified by a trust company.
have their bonds

There

other

are

methods

for

safeguarding the

issue

municipal bonds, reported

on by the “Committee on the Bet¬
Protection for Municipal Securities” in their reports in
Volume 1904 to 1908 of the Proceedings of this
Section, pages
156 and 235, to which I respectfully refer
you.

ter

The

question of bank examination is one of which a great
deal has been said and written in recent years,
resulting in
the enactment of laws in some of the States
providing for
the examination and regulation of these
institutions, which
has

already had

a beneficent effect on the general situation,
beneficial to both the banks and the public.
It may be pertinent to inquire to what extent the
examina¬
tion of banks should go?
It would seem in this matter that

well

the

frequent and thorough such examinations

the

are

made

the

possible for

were

past

will

and

add

all banks shall be safe and sound.
the credit of trust companies to seek

such

legislation rather than to have it forced upon them.
Let us
continue to harp on the subject until
every State has State
examination of trust companies.
Another

law that should be enacted in
many States is one
providing that an insolvent trust company be liquidated
by the
State Superintendent of Banks instead of the
usual way of by
a
receiver appointed by a Court, which in
too many cases
results in the appointment of a
party more distinguished in
politics than in finances, resulting usually in a
very expensive
liquidation, while the expenses of liquidations by State Bank¬
ing Departments have demonstrated that these are
much

less

“I

than

very

the former.

Our Committee on Protective Laws
effective work procuring protective
ment

the

done and

doing
enact¬

laws above referred to will require the effort of
might it not be well to assist

where such laws
active

members

idents

said

has

legislation, but the

every member of this Section, so
this Committee by appointing a

mittees

Wade in

fully

are

wanting, composed of

this

States to

their

Sub-Committee in each State

Section
be

respective

such

some

the

most

State, the vice-presi-

ex-officio

States?

chairmen of said Com¬
These Sub-Committees to

was

heartily endorsed by Mr.

these words:

in everything Mr. Young has said looking
organization of State sections of the Trust

concur

the

Company Section of the American Bankers’ Association, and
in that is the strength of the future trust
company.”
These recommendations are well
worthy of our careful

con¬

sideration, in fact,

more than consideration, they are worthy
No matter how few trust companies there are

of fulfillment.
in

a State, if there are
only two, they should organize; thus
they become better acquainted and ascertain that their com¬
petitors In a very large majority of cases are trying to do
business under the same standards that
they are, thus remov¬
ing the antagonism that so often exists among competitors,
and giving an opportunity for the
exchange of information and
views that are mutually beneficial.
The State Vice-Presidents
can employ a part of their time to the
advantage of this Sec¬
tion in forming into a State organization the trust
companies

in their

respective States.

You will

banking department to make at least
three examinations a year, at irregular times, of
every bank
within its jurisdiction, the examiners spending sufficient time
to make a thorough audit and to become familiar with
the
affairs of such banks, checking over
every item of their assets,
investigating the paper and investments carried, and be able to
intelligently advise where mistakes had been made, and firmly
insist upon the laws under which such banks are
acting to be
observed, that would be a condition to be desired.
No bank operating under State or United States
laws, If it
is conducting its business as required
by the laws of such
State or the United States, need fear
examinations, however
frequent or thorough, but, on the contrary, will welcome such
examinations and lend its aid to the agents
appointed to make
the same.
I believe that all legislation
providing for the gen¬
eral bettering of the banking situation and
tending to give
more frequent and rigid bank examinations
should receive the
hearty support of every bank official, so that the day may
come when such a
thing as a bank failure shall be a memory
It

Young’s recommendation

forward

better.

If it

Mr.

Festus J.

the

notice that I

have outlined

less work for

State

Vice-Presidents, and while I realize that some of
them are very active in promoting the welfare of the
Section,
there are others very inactive, almost all the latter
having
reluctantly accepted the position and only did so on the under¬
standing that it entailed practically no work.
It

to me that at this meeting, and in
future, only
parties should be elected Vice-Presidents as will realize
that this position is more than a mere
honorary one, but
entails work upon its incumbent.
In other words, have all
seems

such

the

Vice-Presidents
will

work

instead

aggressively and

only a portion of them such
industriously for the Section.

During
Trust

the slightly over fourteen years’ existence of the
Company Section of the American Bankers’ Associa¬

tion

it has accomplished

ally

and

for

much for the benefit of banks gener¬

trust

companies specifically; however, there is
still much to be done, therefore we must continue to be
active,
alert and industrious, working ardently and
conscientiously
for the promotion and safeguarding of the best interests of
the companies, thereby promoting and
safeguarding the best
interests of their patrons, because the interests of the com¬
panies and the patrons are mutual.
It has been well said that eternal vigilance is the
price of
liberty; let us say that eternal vigilance of trust companies
is the price of their safety and success and their patrons’
confidence and esteem.
Mr.

Kauffman:

Mr. Chairman, is a motion In order now
suggestions made in the President’s report?
The Vice-President:
Yes, sir.
Mr. Kauffman: I then move that the suggestions made by
President McIntosh in his annual report relative to the appoint¬
ment of several committees for the purpose of
carrying out
the suggestions that have been made heretofore, be referred
to the executive officers of this Section, and if in their wis¬
dom such committees should be appointed, authorizing them
to appoint the necessary committees, and authorizing them
to

the

also to fix the number of such committees.
Motion seconded.
The

Vice-President:

Gentlemen,

have heard Mr. Kauf¬
It is not necessary
to repeat it.
Is there any discussion of that motion?
(Motion put and carried.)

man’s

motion.

Mr.

Cutler:

very

move

you

that

proper

one.

co-operate with the General

Committee, and as they are resi¬
respective States they would, for this reason,
not be charged with interference as the
General Committee
sometimes is.
No doubt such Committees as these could
aid
the General Committees
very materially, as any
dents

their

which this
to

Section desires to have enacted in

under

the

panies of such

control

the

vice-president

legislation
any State ought
and

trust

com¬

State.
compilation of the laws relating to trust com¬
panies of the United States, published and distributed
by your
Executive Committee last.
year, the .National Monetary Com¬
mission has prepared and printed
this year a “Digest of State
Besides

the

accepted and placed
of

the report of the President be
file and reported In the proceedings

the Section.
Motion seconded.
The Vice-President:

I will state that this Is not a report.
report is made by the Chairman of the Executive Com¬
mittee. This is merely the annual address and it is filed.
That is the natural order of things, and I think that it will
follow that course without the necessity of a motion.
Mr. Cutler:
I withdraw, then,
at your suggestion,
the
The

motion.,

V<1

•*,»

TRUST
The

Vice-President:

The

order

report

of the Executive Committee,
lespie, its chairman.
(Applause.)

COMPANY

business

the

by Mr. Lawrence L. Gil¬

Report of the Executive Committee, by Lawrence L. Gil¬
lespie, Chairman.
About 400 years
mercenaries

before the birth of Christ a band of 10,000
were
being led by Xenophon out of the
Minor where it had fought for Cyrus in his

Greek

interior

Asia

unsuccessful
After

effort

dethrone

his

brother.

Artaxerxes.

about

five months of hardship and privation they suc¬
plodding their way back until they had reached a
mountain called Theches, and it is then recorded that when the
men
who were in front had mounted the height and looked
ceeded

down

the sea

upon

great shout proceeded from

them,

and

those

behind, thinking it was some fresh attack, began to run
forward, the noise increasing as the number at the summit
augmented, and Xenophon says that he mounted his horse and
pushed forward thinking it must be something of very great
moment and presently he heard the soldiers shouting, “Thalatta!

Thalatta!

captains
their

and

The

Sea!

generals

the

Sea!”

embraced

one

and the

men

another

with

and

their

tears

eyes, for the appearance of the Euxine Sea reassured
and they knew that their journey was nearly over and

them
that

they would

The

fearless

Greeks

their wives and children again.
the sight of the sea stirred in these
repeated when we members of the Amer¬

see

emotions

which
are

ican Bankers’ Association who have had the privilege of tak¬
ing this long journey from the East through the fertile cen¬
tral regions of our country and over its wide-spreading plains
have

ascended that great chain of mountains which so rug¬
gedly guards the approaches to the coast and finally come in
sight of the sea in its magnificent tranquil splendor as we
view it here near Los Angeles.
It seems to remind us of the
ancient

speak

civilization

whose

shores

unites

with

ours

and

the feverish activities of the newly risen empire
amidst its waters, and of the progress of that great effort
toward
enlightenment, self-government and progress being
made by the greatest republic of modern times in its newest
and

most

dependent

of dependencies.
along its surface breathe no more
unmistakably of freshness and exhilaration than do the inter¬
course and enterprise of the citizens and business men of our
The

breezes

which

cities

which

are

blow

near

its

shores

indicate

the

ambitions

and

which dominate their activities.
It is good for
the bankers of other parts of the country to travel out here
in order to inform themselves of the great commercial strides
being so rapidly and effectively made in these regions.
If the
Trust Company Section of the American Bankers’ Association
subserved no other purpose, it would justify its existence in
the distribution of information concerning the several portions
of our country among its members as a result of our meet¬
ings from year to year in our principal cities.
When these meetings are over, however, it must not be lost
sight of that the organization is maintained through its cen¬
tral office at No. 11 Pine Street, New York, and that it has
an Executive Committee composed of fifteen gentlemen chosen
by the Section from among those who have shown the largest
degree of interest in the work of the Section at its conven¬
tions and in other ways.
This Committee with quite com¬
mendable industry devotes itself to the advancement of trust
company interests as far as it feels that it can go without
exceeding the bounds of its authority and jurisdiction.
It
has also other special committees having on hand particular
work such as, for example, the Committee on Protevtive Laws,
from which you will hear directly.
During the year preced¬
ing the last one our committee published as a result of exhaus¬
tive study a book on Trust Company Laws in the several
States and this year we have produced an equally valuable
volume of Trust Company Forms, a work of original compila¬
perseverance

tion and research.

the past year

also more has been done
than in the past to center interest and attention upon trust
companies and to emphasize their established importance in
the financial world.
Last autumn a special luncheon was'
given in New York at whiqh many prominent bank officials
and bankers joined with the officials of trust companies to
meet the newly elected officers of Trust Company Section and
hear reports on trust company growth.
Last Spring the Sec¬
retary of the Treasury, Honorable Franklin McVeagh did the
Section the honor of coming and lunching with its Executive
Committee, and gave it every assurance of his confidence and
expressed his warm cordiality towards this branch of our
national

financial

structure.

importance of the influence and the wideness of the
scope of usefulness of trust companies may be gathered from
the fact that it is estimated that there are upwards of 1,800
The

institutions

the

United

States

which

exercise

functions

usually recognized as pertaining to trust companies, and that
their
resources
aggregate about $5,000,000,000.
Of these,
1,065 are members of this Section with resources of upwards
of

$4,000,000,000.

This is a splendid showing, indicating that

SECTION.

oped under favorable conditions and have enjoyed the benefit
of a strict and detailed banking law which was especially
extended and amplified following the difficulties in financial
circles associated with the year 1907.
The resources of trust
companies in New York City were in December 31, 1907, $869,000,000 ; now they are (as of August 20, 1910) $1,338,000,000,
an
increase since that time of $469,000,000.
The resources
of the trust companies of the State of New York are, at the
time of this writing, $1,503,000,000, bringing them quite close
to the resources of the savings banks of New York, which
have

attracted

the

State of New York the trust companies have

de'vfel-'^

much

attention

and

aroused

much

dis¬

$1,676,000,000.
As com¬
pared to the deposits of the clearing house banks of New
York the deposits of trust companies of the State are nearly
on a par, the deposits of the former being at this time $1,280,000,000, while those of the latter are $1,245,000,000.
cussion.

The

latter’s

resources

are

There is every indication that the momentum gained by trust
companies during the past ten years is not abating, but that
we shall see their influence spread in broad, conservative and
useful

lines.

during the past six months experienced a new kind
panic which did not assume the gravity of a depression.
It was a panic spread over a considerable period and came
to us in a hesitating way, really consisting in a depreciation
of values more than in any actual apparent curtailment of
We have

trade

and

credit.

difficulties we are glad to note that the
of the United States have in no way been
involved.
With their strength and prudence demonstrated by
their history, and with judgment derived from experience and
self-reliance, it is a matter of congratulation that they have
approached closer to the banks of the country in a spirit of
friendly business intercourse and with a realization that
In

these

financial

trust

companies

most

their

conceive

interests

are

shared

common.

cannot

catastrophe to the banking interests of • the
country which would not be harmful to trust companies, and
vice

any

Their

versa.

successes

and

their

misfortunes

would

In this spirit of comradeship
the banks
meeting them more and more.
This has been shown in recent years very clearly in the
meetings of this Association when bankers and trust com¬
pany officers serve together on important committees, with the
common
object before them of establishing and extending a
sound and conservative banking policy throughout the United
inextricably

woven together.
are
observed to be

States.
At present there does not seem to be any cause for appre¬
hension that the banking situation is in danger of being under¬
mined.
The deposits in banks and trust companies in New
York

unprecedented figures and the required reserves
further fortified by the cash reserves of the
trust companies not required to be held when the panic of
1907 was upon us.
Hot winds may have blown, but our farm¬
ers
and statisticians promise us abundant crops.
Further¬
more, the people of the whole country have learned the value
of prudence and reasonable economy.
No one has been able
to escape the educational features of our recent financial
experiences, and we are all anxious to work on a more healthy
and sound basis than during the mad rush of four or five
are

of the banks

years

are

ago.

there is still need for promptings to
Acts by individuals in great public
office with widespread influence and authority may be farreaching in their effect, and when suddenly exerted have a
tendency not merely to effect the objects intended but also
to create a feeling of uncertainty and fear for the future on
the part of all property interests, certainty of considerate
action on the part of the government and the courts being
the greatest possible factor towards national and financial
development.
our

caution

political

and

life

reflection.

Undoubtedly the most important problem before the country
one which, as they say of the poor, we have always with
us.
It is the so-called currency question.
Since so much
labor and study has been expended on this subject by students,
financial experts and practical bankers, I shall not presume
specifically to advise any particular legislation.
Some enact¬
ment, however, looking to a change we must have, and it is
for us to devote our serious attention to this subject, and
to extend our support to those engaged in the work of reform¬
ation to the end that we shall not each year meet a situa¬
tion where we have either too much money for the reasonable
demands of business, thereby encouraging speculation through
low rates for loans, or have an expanding business handi¬
capped by a fixed and limited currency actually subject to
contraction through the process of reserve requirements when
brought into frequent use in credits and deposits.
I will
only put before you one thought on this subject: Shall we
always persevere in a required reserve against deposits which
makes that reserve practically dead money since it cannot be
used?
Would it not be well to encourage the retention of
much larger reserves than are now held by means of publicity
and notice,
but have the reserves free for use whenever
is

needed?
mcuiuciouip,

195

The' baftkei^( Kf the<&Hintry haVfe' ^hir^rehtest ’Cbhfidence in
th6; t^sultS ofs tlae labtfr' unsparingly devoted'Mtftbse subjects

196

BANKERS’

CONVENTION.

by the National Monetary Commission, who have devoted con¬
scientious, thorough and extended study and analyses to the
diverse financial requirements of our populous and extended
country, and when at length we receive from them the sub¬
stance of their work and recommendation we should be
ready
to give them a fair dnd temperate hearing.
The

Vice-President:

with

reference
Mr. Cutler:

Motion
The
of

What

this

move

seconded,

report
that it

put

Vice-President:

the

and

the

pleasure

the

Section

of the Executive Committee?
be accepted and placed on file.
carried.

The next

the program

is the report

Secretary, by Mr. Philip S. Babcock.

the

Trust

Company Section,

Bankers’

beg to submit herewith

September 1, 1909, to August 31, 1910,

follows:

Appropriation

“

Executive

Council

$8,000.00

Sale of 41

copies Trust Company Daws
Sale of 8 copies Proceedings, 1896 to 1903....

85.75

“

Sale of 9

27.00

“

Rebate

“

24.00

copies Proceedings, 1904 to 1908....
Insurance

16.34

$8,153.09
DISBURSEMENTS.

the

Chicago

expenses.

and disbursements,

expenses

fore the

learn

how

its

legislature before 1910.

under

which

directors

been

Departments’

preceding Assembly had enacted
required to make quarterly report,

was

believed that these laws had not

efficiency.

operation

Louisiana

passed

“Trust.”

mission

the

The

revising

long enough to
protective

Committee
criminal

tne

statute
also

was

code

the

536.85

18.64

25.00

general funds of the Asso¬

$1,519.64, notwithstanding the additional cost of publishing the
proceedings of our last convention in one volume with the
proceedings
the Association.

passed

that

part of

publishing the book of “Forms
The

our

for

appropriation has been

Trust Companies,’’

for entirely by subscriptions from

entire

cost

our

used

membership.

this

sold

(290 at $15 each and 9 at $20 each), with interest
the account, have been
$4,542.84, showing a net profit of $246.
While the affairs of the Section have thus been

satisfactory banking law on broad lines; this
1910.
The Banking Commissioner Is en¬

extensively used by

Esq., “Post-Mortem
meeting in Chicago,
fifty thousand copies

members; over
haviug been distributed throughout the country.
During the year I have endeavored to make the Section of continual
benefit to its members, both by
correspondence, by articles published
month

the

our

“Journal”

of the Association, and
by
Information to papers interested in Trust
Company matters.

furnishing

Vice-President

with

respect to
(It is moved

seconded
The

and

Committee

the

What

the

BABCOCK, Secretary.

pleasure of

that

the

report

accepted

carried.)
in

order

the

Protective

Laws,

Report of the Committee

the

program

by Mr.

filed,

report

duly

Lynn H. Dinkins,

Protective
Dinkins.
on

the

and

meeting

the

its

Laws, by Lynn H.

New Orleans, September
21, 1910.
Members of the Trust
Company Section:
Assemblies of fourteen States were scheduled to
meet

Chairman
General

and

supervise,

care of

the

act

tem¬

banking interests

matter

left

was

heretofore.

and

who has been

recently resigned,

years,

member

the

having severed his

Committee for

connection

with

Company work.

than

forty

1911.

year

The

confided

such

its

Whether

legislation,

it is desirable

securing

think

hold

has

legislative meetings during
already succeeded in securing
most

these,

should

additional
be

settled

extend

the

protective

was

the
originally

the

activities of the Com¬

legislation

Incoming

mittee.
We

the

care.

not

toward

which

States will
Committee

matter

Executive

Com¬

desire

rendered

the

express

Committee

appreciation

our

the

valuable

by'the Secretary of the Section

assistance

and

our

Respectfully submitted,
LYNN
F.

KAUFFMAN.

RALPH

The
of

Vice-President:

what

tion,

Gentlemen,

you

DINKINS.

FRIES.

W. CUTLER.

have heard the report

by far the most important committee of this

sec¬

committee the work of which has been of inestimable
value, not only to the Trust Company Section, but to the entire
American Bankers’ Association.
What is your pleasure
a

regard¬
ing this report and regarding the Committee itself?
Mi. Poillcn :
Mr. Chairman, I move that this Section vote
its thanks to
this matter
and

the Committee for its

during the past

interest and hard work

year, and that the report be received

placed

Mr.
mover

on file.
Shorrock :
I

would

suggest,

Mr.

Chairman,

that

the

of that resolution add to the motion that the
Committee

be continued.

Poillon

second the motion.

The Vice-President:

Secretary’s report?

Chairman.

the

Trust

Mr.

Respectfully submitted,
P. S.

examine,

General Counsel, Mr. Paton.

officers, it is felt that it has not been at any
lessening of the Section’s activities in the interest of its members. On
the contrary,
as pointed out by our
Chairman, Mr. Gillespie, much
has been done to emphasize the established
importance of Trust Com¬
panies in the financial world, and to increase the
knowledge of the
usefulness of this Section of the American Bankers’
Association.
That this is so is shown by the
present membership, 1,070, the
largest in the history of the Section and the largest net
gain in any
year since 1906.
You will find in your seats a
printed list of this
membership by States. States having five or more members are en¬
titled to a Vice-President.
valuable address of Daniel S. Remsen,
Administration of Wealth,” delivered at our last

powers

statute, and the

any

your

The very

June 1,

necessary

economically ad¬

ministered

The

Arthur Adams,

mittee

publication to date, covering 500 completed
printed but not bound, including express charges,
descriptive circulars, postage, etc., was $4,296.84, while the
receipts

has been

upon

Mr.

this haviug

books and 500 books

for books

all

Utah

enactment

also note

State

Georgia nothing was accomplished, other than to
bring needed legislation to the attention of a number of bankers and
to secure promises of more active
co-operation In the future.
Mr. Cutler represented the Committee at the
conference with the
Savings Bank Law’ Committee, held in New York on
February 10,
1910, upon the segregation of savings deposits.
The report of your
Executive Committee w’ill show the action taken
by it in connection
with that question.

$1,519.64

ciation

been paid

the

several

You will

the

attention.

39.86

back to the

use

having a com¬
provide therein for

Virginia passed the “Trust” protective act.
No financial legislature could be secured in South
Carolina.
The
Secretary of the State Bankers’ Association there, Mr.
Wilson, is
convinced that same is desirable, and has
agreed to visit the capital
when the legislature next meets in order
to give the matter his per¬

agree

Credit balance
note that we' turn

the
in

State.

$6,633.45

You will

covering

successful

value

their

Kentucky’s Legislature, after considering a number of proposed
bills, each strongly advocated by separate interests, was unable to

1,378.74

ice, water and towels......
Account transportation, Los Angeles Convention..

correctly

measure

receiver, and, in general, to take

25.10

expense,

not to

The

are'

oath, to State officials.

yet

felt about State super¬
bring the subject be¬

people
us

w’ith

252.20

Executive Committee meeting at Atlantic City....

investigation determined

Proceedings 1909

however,

confined

were

porary

Executive

new

Assembly,

Carolina,

dowed

250.00

Postage, stationery and printing
Traveling expenses

The

made

South

became effective

Committee),

Committee)

Committee

your

was

This

Maryland

80.46

1908-1909

Gold badges (retiring President and

each

Vermont

550.00

Petty cash, office supplies, etc
O. C.
Fuller
(Chairman Executive

The

October.

290.30

Rent

Maryland,

State

vision.

$3,186.30

Convention

session.

until

to Georgia, Kentucky,
Utah, Vermont and Virginia.
Mississippi has the necessary statute covering the use of the word
“Trust”; and before its legislature convened a thorough canvass of

sonal

Salaries

regular

proper enactments to punish the making or the use of false statements
to obtain property or credit.
The legislature postponed the considera¬
tion of this new
code; but, it is believed, when the code is adopted,
that this feature of it will meet the views
of General Counsel Patou.

CREDITS.
By

efforts

word

The financial statement from
as

the

Louisiana,

report for the year ending

August 31, 1910.
is

convene

Massachusetts, New Jersey, New York, Ohio and Rhode Island,
having already adequate laws protecting the use of the word “Trust,”
and statutes providing for State examinations of trust
companies,

under

American

Association:
1

1910

not

and

Members

Gentlemen:

does

laws

Report of the Secretary, P. S. Babcock.
To

during

Mr. Shorrock amends the motion to the
effect that the Committee shall be continued.

(Motion

amended, put and duly carried.)

Mr. Dinkins has called attention

to the fact that

vacancy on that Committee which will be filled

there is

by the Executive

Committee, if there is

no objection, and I take it for granted
of your motion, Mr. Shorrock.
Mr. Shorrock:
Yes, sir.
The Vice-President:
I regret exceedingly to learn that Mr.
Stuyvesant Fish, of New York City, who kindly promised to
give us an address at this hour, is unable to be present.
He
has forwarded a paper which I will ask Col.
Fries, of North
Carolina, to read.

that

was

the purpose

Mr. Fries :
It is a matter, ladies and gentlemen,
of sincere
regret that this able paper can not be presented by the able
writer
His subject:
“Should the ownership of shares in banks

TRUST
continue to be

represented by certificates commercially negotia¬
pledgable?” is ably discussed as follows:

Should the

say,

Ownership of Shares in Banks Be Represented
by Certificates?

[Mr. Stuyvesant Fish’s paper will be found on page 177.]
Mr.

Shorrock:

Tenant

opened by Mr. Isaac H. Orr, Trust Officer of the St. Louis
Trust Company of St. Louis, Missouri.
(Applanse.)

Mr.

order?

Vice-President:

The

motion

order

the

pleasure of the meeting.
It is customary—in fact this paper
with all the papers read here today will be printed in the regu¬
lar book of proceedings, which book is sent to every member
of the Section, and the suggestions made in such a paper as

naturally be taken up by the Executive Committee
unless otherwise directed by this meeting.
The motion is in
that would

is seconded.

order if it

of Trust

Investment of Trust Funds and the

President, might I suggest, if it is in
order, that this paper be accepted and placed in the record.
It appears to me that it is of so much importance that simply
hearing it read at first hand is not sufficient to give you a
full understanding of it.
My suggestion would be, and in
order to bring it before the meeting I put it in the form of
a motion, that this paper of Mr. Fish’s be referred to a special
committee to investigate during the coming year the procedure
or laws in effect in different parts of the country, and to make
a report at our next meeting.
The Vice-President:
I think it is well to explain that Mr.
Brougher informs me that this room was intended for meet¬
ings to be held only at night, and it is so arranged that hi
the daytime it is almost impossible for the Chair to recognize
a
face sitting with their backs to the light.
Therefore the
Chair will request that members, when they arise, will announce
their names, and I would be glad to have the gentleman state
his name who just made the motion.
Mr. Shorrock:
Is the motion in
My name is Shorrock.
The

The motion does not

seem

to be sup¬

ported, and I presume it is because it is customary to have
papers of that sort referred to the Executive Committee; and
I think if the gentleman will change his motion to accord with
the regular method of referring*it to the Executive Committee
for consideration, it will be better.
I move, Mr. Chairman, that this matter be
Mr. Brown:
referred to the Executive Committee.

(Motion seconded and duly carried.)
We will now have the pleasure of hear¬
ing an address by Mr. William C. Poillon, of New York City,
upon the subject:
“The Advantage to the Trust Company in
Making Loans Upon Marketable Collateral Rather than Personal
Credit.”
Mr. Poillon, kindly take your place on the stage.
The Vice-President:

Advantage to the Trust Company in Making Loans

Upon Marketable Collateral.
Poillon’s address in full is printed on page 179.]
“The Advisability of a Trust Company
Maintaining an Auditing Department Rather than
Having
Periodical Audits from Without,” is a subject upon which Mr.
W. M. Baldwin, of Cleveland, Ohio, has kindly consented to
[Mr.

Vice-President:

The

address

us.

[Mr. Orr’s

Advisability of a Trust Company Maintaining an
Auditing Department.

[Mr. Baldwin’s paper is printed on page
nation

180.]

President, in order to facilitate the nomi¬
of the five men who will serve on the Executive Coun¬

Fries:

Mr.

be appointed by the
in writing from dele¬
from which the nominating committee shall select five

members of the Executive Committee for the term
that this committee shall
.

(Motion
The

ending in 1913, and

report back to the Convention for

its action.

duly seconded, put and carried.)

Vice-President:

the Committee

after

The Chair will announce the names

few moments when he has had an op¬

portunity to decide upon that.
The address by Mr. Baldwin
is the last of the regularly prepared addresses.
The following
subjects have been suggested as of interest to the Section, and
it is hoped that they may promote active discussion by the
members' present, who are urged to speak freely upon them.
The first subject is “The Personal Element in Trust Company
Work,” and Mr. Edgar Stark, Trust Officer of the Union Savings
Bank & Trust Company, of Cincinnati, Ohio, has kindly con¬
sented to open that subject by a few remarks.
The Personal Element in Trust

Company Work.

[Mr. Stark’s paper may be found on page
The

Vice-President:

sure

that

186.]
every

member will

with me that both Mr. Stark’s subject and the address he
has given us are very interesting, and the Chair will be pleased
to hear from others on the same subject, and would invite a
agree

expression from any of the members present. The purpose
selecting these subjects is to bring out discussion and to
give everyone an opportunity to express himself.
free

Unless

there

someone

willing to say something further

is given on page 182.]

paper

Drake:

are

We have

fornia.

now

Bank Act referred to in my pre¬

new

liminary remarks, which, for the first time in California, has
tabulated into concrete form certain banking laws.
Under this
new
act, no funds in trust can be invested otherwise than
under the laws provided therein for the investment of funds
deposited in savings banks.
The law goes forward and states
specifically how funds in savings banks ought to be invested.
I will say briefly that they are all secured loans, and no loan
on real
estate can be made except it be a first lien thereon.

practice in the institution I represent in regard to trust
by order of the Board of Directors, to invest
them in municipal securities of this State, county, or school
districts, or in first mortgage loans on improved productive
Those
real estate of at least twice the value of the loan.
two classes of investment comprise the funds in our trust de¬
partment.
We are enabled in this State to place the invest¬
ments of trust funds in municipal bonds at a rate which will
bear the beneficiary at least four per cent, and very often five
per cent, as an income.
On our real estate mortgages of the
character described, we have invariably secured at least six
per cent.

The

funds has been,

should

talk

with

you

further on our State, but,

the President of the Chamber of Commerce has stated, we

get to boosting if we occupy
far

that

west

wish

all

the floor long; and we live so

be shown

how from Missouri and

(Applause.)

States.

other

The Chairman feels deeply grateful to
saying something voluntarily on the subject
upon which he has spoken, and hopes that other members will
follow his example.
It would appear as if the papers that
have been prepared and read have all been so excellent and
so
exhaustive that the members present hesitate to say any¬
thing more. But it would seem as if some one in the audience
might have something to suggest not fully covered by the papers,
Vice-President:

Drake

Mr.

for

grateful for any other discussion on
that might be suggested regarding
the
the papers that have been read.
Mr. Holliday :
Mr. Chairman, I would like to ask Mr. Orr
a question of practice, as to how he would treat a case where
a ground lease is made for a long term of years and a commis¬
sion is paid for negotiating that lease, to whom would he charge
Chair would be

the

and

or any corrections
information contained in

point,

commission?

that

The

remainderman

the

life

tenant or

equally?

Vice-President:

The

Resolved. That a nominating committee of five

Chairman, which Committee shall receive names
gates present,

divide it

cil, I desire here to offer a resolution :

Respective Interests

Mr. Chairman, in view of the fact that
reaching the luncheon hour, I wish to say in behalf of
the Trust Company officials of the State of California that we
have been exceedingly interested in the valuable remarks made
and the interesting topics taken up by this Section.
The re¬
marks of the last officer on trusts, are exceedingly interesting
to the California trust companies, which may be regarded in
comparison to those across the Rocky Mountains as in their
infancy.
I would like to bring a little discussion up as to the
present situation.
The broad clause cited in his address as to the scope for in¬
vestment of trust funds no longer exists in the State of Cali¬
J.

Mr.

any

The

Union

Therein of Life Tenant and Remainderman.

The

“Invest¬
we will go on to the next, which is :
Funds and the Respective Interests Therein of
and Remainderman.”
The discussion will be

subject,

this

ment

Life

ble, that is to

197

SECTION.

COMPANY

Mr.

Orr, will you kindly answer Mr.

Holliday’s question?
Mr.
that
to

Orr

counsel.

impress upon

experience I would refer
Really, the only thought I hoped to be able
the members present is the importance of in¬

that occurred in my

vestigating and deciding those questions when they arise. Or¬
dinarily all commissions paid to agents to perform the service
are
chargeable against the income.
But when you come to
negotiate a 99-year lease, in most of the States that is recog¬
nized practically as a sale of the land.
In other words, if you
sold a piece of property for $5,000 and paid a real estate agent
$250, that would come out of the principal fund. Now, if you
negotiated a 99-year lease, that would be a close question for
counsel to determine, having in mind the law of the particular
State.
Any property that will stand a ninety-nine years lease
will stand a reasonable counsel fee to protect the trustee.
Mr. Dinkins:
Mr. Chairman, I would like to inquire of Mr.
Orr:
What is the custom of this company in connection with
the maturity of bonds within the term of a life tenant that
have been purchased at a premium; whether he charges off
annually, or whether he waits until the time of maturity ?
And against whose account does he charge the premium?
Mr.
bonds

Orr:
at

The

custom of my company

is not to buy any

premium except for very large estates, which are

premium. The custom of any com¬
however, would not be a safe rule to follow. Any pre¬
paid on an investment for a. ttu^t estate must be amor¬
tized in some way, so that the principal ftmd is protected.
The
strictly accurate way would be to, when the investment is made,

able to absorb at once the

pany,
mium

198

BANKERS'

CONVENTION.

ascertain the rate of interest at which it is
made, and deduct
from each coupon the proportionate amount to restore the
pre¬
mium to the principal.
That is the legal way to do it. But in
these latter days we have been able to
get so many good bonds
at or below par that we will not consider
a premium.
In large

estates,

however,

where

the

premium is less than the first
sometimes buy a line of bonds and absorb the pre¬

coupon, we
mium at once.
The

This, you understand, is absolutely tentative and only for the
purpose of bringing the matter before the Convention
for
discussion

Whereas

Before proceeding further, this is the last
topic that we will
discuss this morning.
The Chair will announce the Committee
on nominations:
Col. F. H. Fries of North Carolina will be
the Chairman;
Mr. F. H.
Goff, of Cleveland; Mr. Edwin
Chamberlain, of San Antonio, Texas; Mr. Ralph W. Cutler, of
Hartford, Conn., and Mr. Benjamin Strong, Jr., of New York.
Mr. Strong seems to be sitting aloof and seems to be
enjoying
himself, and I am sure he will be glad to participate in the
work.
The Secretary will be glad to receive suggestions and

desirable that the Vice-President of the Trust

Com¬
thor¬

respective

Therefore, be it

to ask Mr. Orr any

recent decision in the District of Columbia
declaring that the
premium paid for bonds bought for an estate of which the in¬
terest went to a life tenant, that the premium
paid was the
premium paid by the trustees for their own protection and for
the protection
of the estate, remainderman, and that the
amortization of that premium was unfair to the remainderman.
It is a very interesting topic, and it is in
many cases within
recent days, and, as I say, is now under consideration in
many
Is there anyone else?
cases.

it is

Section of the American Bankers’ Association should
oughly represent the Trust Company members in their
States.
pany

Vice-President:

Is there anyone else who would like
questions? He seems to be able to answer
fluently, if not adoitly, the questions on any subject touched
upon.
The matter just touched upon by Mr. Dinkins is a very
important and interesting one, and one that is now in the
.courts in many cases.
The Chair is informed that there was a

Resolved:

Resolved: That it is the
the

Trust

of this

seuse

Company Section

should

meeting that the by-laws of
amended

accomplish

this

result.

Such amendment should provide that in States having trust
company organizations, a vice-president of the Trust Company Section
should be nominated and elected at the annual State convention.
Such
election should be certified by the

Secretary of the State Organization
Secretary of the Trust Company Section.

to the
In

States

having
such

members

Bankers’
in

not

State

the

having

separate

Bankers’

should, at the time

Association, elect

manner

provided

Trust

Association

trust

of the annual

Association,

company

but

members,

meeting of the State

vice-president, and certify his election,
in

for

Compauy

with

the

case

the

State trust

separate

company organizations.
Where
of

the

vice-president for

above

ways,

State has not been named in either

any

the election

such

vice-president shall be left
Company Section.
vice-presidents shall begin at the
convention of the Trust
Company Section

to the executive ofl3cers of the
Trust
The time of office of the State

time

the

annual

following such election, and

shall

continue

until

the

election

his

successor.

will pass some

Inasmuch as notice is required in advance of an
amendment
to the by-laws of the Section, I w'ould like to
submit that on
behalf of the Committee as a notice that at the
next

slips on which any of the members present will
privileged to suggest the names of anyone they may think
suitable for membership on the Executive Committee.
Mr. Fries :
Mr. Chairman, may I ask those who make sug¬
gestions to give not only tlie names of parties, but the com¬
pany they represent and the town they come from.
The Vice-President:
If you will permit me, Col. Fries, I
think they should name the position that they hold in their
company.
It should be borne in mind that out of the five men
nominated, whose office will expire three years bonce, according
to custom—not according to law, but
according to custom—
there will be selected a man who will perhaps be the future
president of this Section, and that should be borne in mind
by the members of this committee. The Executive Committee
selects its own Chairman, and although it is not a
by-law
and not necessary, it has been the custom for the Chairman of
the Executive Council to be advanced to the position of VicePresident, and so on. Bear in mind that matter in nominating.
Mr. Ralph W. Cutler:
Would it be proper at this time for
the sub-committee to report on matters of business?
The Vice-President:
Mr. Cutler, it would be proper if there
is no one else who would like to speak on any of the topics
that have been discussed.
Bear in mind that not only the topics
last discussed, but any of the topics that have been discussed,
are open for further discussion on the part of the
members, and
I would suggest that any motion other than that of the regular
order of business be deferred until

The

discussion.

Chair will

take

the

have

finished with this

liberty of breaking into

that order of business in order that this committee may get
work and the members may be nominating whom they choose.

Mr. Holliday:
I move we take a recess until 2 :30.
The motion seconded and a vote taken.
The

Vice-President:

The

meeting is not adjourned.

The

Gillespie:

If it is open to discussion, I would suggest
appended and that the discussion be closed
with the single exception of a resolution which Mr. Cutler has
from the sub-committee, and which he would like to report.
I
suggest that amendment.
The Vice-President:
The motion is not open to discussion,
having been put and apparently carried, in the opinion of the
that that motion be

Chair.

The Chair has not announced the result of the

The Vice-President:
and

If Mr. Holliday, the mover of the mo¬

members present are

the

willing to reconsider their

action by vote, or to have another subject introduced before the
result is announced, it can be done; and unless the Chair hears

opposition
temporarily.

some

that,

will give Mr.

Cutler the floor

Is that the decision, Mr. Chairman ?
The Vice-President:
That is the decision of the Chair.
has been stated by President McIntosh in
matter of election of the vice-presidents
from different States has not been wholly satisfactory, and the
Cutler

his address

that the

by the Executive Committee, of
which I am in charge, with the result that on Monday last,
day before yesterday, a sub-committee was appointed by the
Executive
Committee;*
consisting
ofc*> Colonel; Fries,. uJUr.
Chamberlain and myself, to draft a tentative plan for submission
to this convention, and with your permission I will read that.
matter

resolution

resolutions—such by¬
law in accordance with this outline will be
submitted, and I
will move you that a committee be
appointed to draft appro¬
priate by-laws for consideration at that time along
thees lines.
Mr. Gillespie :
I would like to say just a word in seconding
this resolution presented by Mr. Cutler.
The question of the
method of election of the vice-presidents
representing the Trust
or

Company Section in different States has come up for discus¬
sion several times before our
committee, and with the results
as substantially embodied in the resolution
;just read to you by
Mr.

Cutler.

with

the

eral

This

method

have had

resolution
of

speaks for itself.
It is in line
democratic representation that we

formerly in the Trust Company Section from the

States.

The

sev¬

States will get a good voice in the
Section of their vice-presidents.
The rule at present adopted
of allowing the representatives from the States that are
present
at this Convention to elect the vice-presidents
several

theoretically

is very good, but in certain cases it has worked out
bad, and
there has not been much representation from certain States.
In those cases it has devolved upon the officers of the Asso¬

ciation to

appoint these vice-presidents frequently.

We think

it will increase the influence of the different State
organizations.
In many States, organizations known as the State

Organiza¬
tions, whose banks are connected, will feel that they have a
right to select a responsible officer who is a part of the man¬
agement of this Trust Company Section.
I think it will bring
it to their attention much more than it has in the
past.
I
would say a word in connection with one line of Mr. McIntosh’s
address in which he speaks of vice-presidents

occasionally feel¬

There has been

a distinct
effort made in the past two or three years to make the officers
from the States think they have a real responsibility.
They

called

upon individually to prepare reports for this con¬
showing the work in their different sections; and
I want to say that we have received very
gratifying replies
to our requests along those lines.
The Executive Committee
cannot be too strong in recommending this resolution to the
members.
It will simply tell you the result of their deliber¬
ations which have been reported more than once, and they leave
it to you to decide whether this is for the best interests of
the organization.
were

has

Vice-President:
Gentlemen, you have heard the motion
by Mr. Cutler and seconded by Mr. Gillespie.
Is there
any further discussion of that?

made

(Motion put and carried.)
The Vice-President:
announce

Mr.

been

taken

•

The motion is carried.

The Chair

the names of the committee later in the

Edw.

President

Mr. Cutler :

Mr.

The

Gillespie:

vote.
tion

meeting

such

vention,

Holliday’s motion.

Mr.

Convention

ing that the office is unimportant.

Chair has not announced the result of the last vote upon Mr.
Mr.

the

H. Reninger:

will

day.

Mr. President, Mr. Dimner Beeber,

of the Commonwealth

Title Insurance & Trust Com¬

pany, of Philadelphia, is with us today to join in the discussion
of the topic which was postponed until this afternoon.
I think
that

made for
have been

had

members

heard
of

the

him

before

Executive

glad to have named him

the

suggestions were
we would all

Committee,
as

member

from Penn¬

sylvania.

I find that the only one from Pennsylvania now on
the list goes out this year.
Judge Beeber is here as one of
the representatives of one hundred and fifty of the trust com¬

panies ip, Pennsylvania, and I want to suggest to the members
here present that
for that

position.

lie, would be

very,.good man to nominate

COMPANY

TRUST
The

Vice-President:

The

Committee will

meet immediately

Responsibilities of a Trust Company in Connection with

at the

beginning of the recess which we will take under Mr.
Holliday’s motion, and will be glad to receive just such sug¬
gestions.
The motion to adjourn has been duly carried, and
we

AFTERNOON SESSION.
The meeting will come to order.
Secretary:
Mr. Chairman, the United States Mortgage
& Trust Company of New York publish every year a book of
the statistics of trust companies of the United States, and the
President has sent me the advance sheets of this publication
for this year, and it puts the trust company situation in such
a new and such an Impressive form that I think it would be
interesting for you gentlemen to hear this short preface, and
also to have it incorporated in our proceedings, if you approve
of having this read.
The Vice-President: If it is the pleasure of the meeting.
I
understand it is a quotation?
The Secretary:
Simply a quotation, but it gives a set of
figures of the trust companies of the United States in an
original form, which I think will be very interesting to all
trust company men here.
Unless I hear objection to the paper,
The Vice-President:
the Chair will authorize Mr. Babcoqk to read it.
Mr. Dimner Beeber:
Mr. President, I move that it be read
and made a part of the proceedings.
Motion seconded, put and carried.
(The secretary then read from the publication referred to as
The Vice-President:

The

follows:

Companies of the United States guard a treasure amount..

The Trust

Of this total over $5,000,and the
impressive sum of approximately $25,000,000,000 represents wealth
which they protect as trustees and administrators.
Those Trust Company operations which may be described as merely
banking functions have for many years been summarized in reports to
lng at the very least to $30,000,000,000.

000,000 represents the value of their own banking resources,

authorities and

State

voluntary

statements to clients.

These re¬

ports afford the public a basis for opinion as to the solvency of the
various companies, and, at the same time, furnish the data for accu¬
rately estimating the magnitude of their operations.
The results of the execution of other Trust Company functions, such
as

trusteeship of corporate mortgages, administration of estates, fiscal
custody of wills and securities, registration and transfer,
(with the exception of Pennsylvania and possibly of one
State) reported neither to State authorities nor to individuals,

agencies,
etc.,

are

other

and, consequently, the aggregate of such

operations, while surprisingly

large, has never been generally known.
The growth of this feature of Trust Company business has been
rapid and its present volume is enormous, exceeding many times the
banking feature.
This has been caused by general business expan¬
sion and, more especially of late years, by the organization of larger
commercial units whose requirements demanded new

facilities.

corporations borrowed needed capital by selling
mortgage bonds to small groups of investors, one of the individual
members of which generally acted as trustee of the mortgage; today,
these corporations borrow from one to one hundred millions of dollars
at a time, secured by mortgages to Trust Companies, and covering
Thirty

years

great bond

ago

issues

sold to the investing public of this country

and

Europe.
trust the mortgages against which
they also hold in trust great blocks of
securities pledged for collateral trust bonds; they act for holders of
equipment trust bonds; they are intermediaries In escrow transactions
between corporations; they hold in trust millions in stocks and bonds
deposited in connection with reorganizations, mergers, etc.
Although the total of the wealth so held In trust can only be esti
mated, yet on August 1, 1910, approximately 85 per cent, of the
bonds of corporations whose securities are listed on the New York
Stock Exchange is secured by mortgages under which Trust Com¬
Furthermore, while the great city institutions
panies set as trustee.
act as trustee for large issues representing many millions of dollars,
The

Trust

Companies

hold in

mortgage bonds are issued;

the Trust
act

mous

Companies in the smaller communities throughout the country
aggregate reach an enor¬

trustee for local issues which in their

total.

Today
resources,

better

the

Trust

Companies of

the

United

States control greater

stronger reserves, are transacting business under
and enjoy larger opportunities for usefulness than ever

have

laws,

before.

The Vice-President:
Gentlemen, I think that was a most
interesting statement to all of you. It is almost Impossible to
comprehend the magnitude of the business covered by it.
I
think It is not generally appreciated.
The next in order on the programme is a paper on the duties
and responsibilities of a trust company in connection with in¬
vestments to be offered to the public.
I regret very much to
learn that Mr. F. J. Parsons, Vice-President of the United
States Mortgage & Trust Company of New York, who had
consented to open this discussion, Is not present; but Mr. Par¬
sons sent a brief paper on the subject which, If there is no
objection, I will ask the Secretary to read, In order to open

this

qiiestloti for discussion.’

the paper.

Investments.
[Mr. Parson’s paper is given on page

187.]

Mr. Dimner Beeber, President of the
Commonwealth Title Insurance & Trust Company of Philadel¬
phia, has also kindly consented to say something on this sub¬
ject.
We will be pleased to have him come forward.
The Vice-President:

stand adjourned.

now

199

SECTION.

The

SecretAr^1'Will

kindly redd

(Applause.)
[Mr. Beeber’s address appears on page 189.]
The Vice-President:
Is there anyone who would like to add
to what has been said on this subject?
It is a most interest¬
ing subject, by the way. There being none, we will proceed
to the next topic:
“Should Trust Companies Charge for the
Care of Small Accounts?”
The discussion will be opened by
Mr. Frank L. Sniffen, of the Title Guarantee & Trust Company
of Brooklyn, New York.
Mr. Edwin O. Stanley consented to
say something on this subject, but, finding that he was un¬
able to be here, a member of his company, Mr. Sniffen, will
read his paper on that subject.
Mr. Sniffen:
Mr. E. O. Stanley wrote this article and asked
me to read it, with your Indulgence.
It is not very long.
Should

Trust

Companies Charge for the Care of Small
Accounts?

[We give Mr. Stanley’s
tion.]

address on page 184 of this publica¬

The Chairman would be very much
The Vice-President:
pleased to hear from anyone else on this topic.
Mr. Stewart: Mr. Chairman, it seems to me that we all have
a fellow feeling in that regard.
I know in the case of our
company we have at least one-third of the total of our accounts
which you might say do not pay.
I should for one be very
glad to hear from other gentlemen what their limit is, and
how they treat their accounts.
I guess we all agree that Mr.
Stanley has the correct theory.
The question is whether it
works out in practice.
I know in our case we limit ourselves
I would
to interest on accounts over one hundred dollars.
like to hear from some of the other gentlemen here what their
rules

are.

The Vice-President: The next on

the programme is: General
be proposed and may

discussion of such other topics as may
have

the approval

of the presiding officer.

The Chair would

that in case any of the members present should
like to discuss any of the subjects that were discussed this
morning, or any of the papers that were read this morning, It
would come under this present heading, and it is possible that
at the time some of these papers were read It was not fully
understood that the members were expected either to question
or criticise or to amplify the papers.
This part of our pro¬
like to

say

be a general discussion, and we would
it so. I trust that no one will hesitate
to recur to any subject that they were not quite satisfied
with this morning.
We would be glad now to hear any

gramme is intended to
like very much to have

suggestions.
Mr. Chairman, I would like, if I may, say Just
thought occurred to me while listening to the paper

Mr. McKee:
a

word. A

prepared by Mr. Baldwin in reference to the internal auditing
department in his institution.
Mr. Baldwin explained in a
very interesting manner the very elaborate and detail system
that is in vogue in his institution for the purpose of checking
To my mind, any financial institu¬
up and verifying accounts.
tion of magnitude should have approximately such a system
established as a part of its internal workings, covering the
verification, careful checking of cash received and paid out,
requiring countersignatures to checks and vouchers, keeping
accurate accounts and verifying of securities received and
delivered, requiring the custody, safe keeping of such securi¬
ties under the very best possible burglar proof conditions,
under the joint control of two or more trusted employees,
including at least one officer; all of those things are first class
and should be part of the internal arrangement, as I stated,
of any financial institution doing a business sufficiently large
to justify an elaborate system.
The auditor described by Mr.
Baldwin’s paper I would say Is neither more nor less than
an
officer of his Institution.
Such an officer, while human
nature is as it is, might be influenced to refrain from criticising
a superior officer,
in whose discretion might lie his term of
employment or the amount of his compensation, or he might
be moved to pass over what seemed to be a trifling error of
some employee with whom he had
established intimate rela¬
tions growing out of a dally contact for a number of years.
Such irregularity might develop in the future, if unchecked,
into a glaring defalcation.
In my judgment, every employee,
officer or servant of a financial institution should have, in
addition to the very best system that can be devised of check¬
ing accounts and securit’es, the checking and examination of
outside independent examiners—men whose business it is to
make such examinations, and whose chief asset in that busi¬
ness is the reputation of being fearless,
vigilant, analytical,
conservative investigators or auditors—such a man to be em¬
ployed by the ^directors and teu be responsible only to the
directors, 'Whese work should be gone over im detail by a com¬
mittee of the directors after each

periodical examination, and

200

BANKERS’

CONVENTION

his work then to be made a
part of the report of the auditing
committee of the directors to the full board.
Such a man
would not fear the
danger and be moved to refrain from
criticism through fear of his
superior officer or through favor
to a fellow
employee. Listening to Mr. Baldwin’s paper, there
came
to my mind at once the
question, who audits the
auditor? (Applause.)
Mr.

which the Farmers’ Loan &
Trust Company holds a
controlling
The deposits aggregate over five
millions of dollars,
and in nearly
forty years’ business in that State we have
never paid a
penny interest to anyone on an
open account
unless it was a deposit from a
State institution,
which, under
the laws of our
State, now require interest at two per cent.
Savings accounts pay interest at three per
cent., which is com¬
puted twice a year.
But this thought came to me on
little
accounts of one or two hundred
dollars, and taking care of
that account, and at the
same time
regarding such accounts
as being an asset
for a profitable
banker, that it appears to me
to be a dream.
It is not
always the small accounts that are
the unprofitable
accounts.
We have had to ask customers
to
close what we might term
large accounts.
These accounts
were made up
very largely of collections, where the
aggregate
amount of the collections in
transit would amount to more
than the average balance.
Now, there are many of those
accounts on the books of our
banks that if they were thor¬
oughly investigated would be found to be
very unprofitable—
quite as unprofitable as these little
penny accounts that we
are
complaining about.
So that it is not
always the small
accounts that are the most
unprofitable

interest.

Baldwin:

In reading my
paper this morning I had no
desire to cast any reflection on the work of
inde¬
pendent auditors.
I believe in having an
independent auditor,
but I believe you should have
both.
In addition to the work
as outlined
this morning, I might add that the Trust
Com¬
panies of Ohio are now under the general
supervision of the
State bank
superintendent, who makes a very careful exami¬
nation of the bank and of its assets and
checks its accounts;
and in addition to that we have the
semi-annual audit of our

intention

stockholders, who

are

appointed by the board of directors, and

the people making that audit are not
with the active management of the

any

way

connected

bank, either as members
of the executive
committee, directors or otherwise, and they
make their examination of all the
assets and securities, and
report directly to the Board of Directors.
I will simply add
that, as one of the things which is done in addition to
what
I outlined this
morning.
A Member:

recognize
but

In connection with the
remarks,
that there is an advantage in an

I think you all
auditor;

outside

neighbors

independent audit by

pro¬

outside company

twice
a year, and there did not
pass twelve months until they found
their trust officer was a defaulter for
a large amount.
The
auditing company, one of the most prominent in the

country,

was

communicated with.
They came down and went over the
affairs of the company a second
time, and stated that it would
have been impossible for them to have detected
the defalcation.
I was very much interested in
what the representatives from
the Citizens’ Savings Bank said in
connection with the check
which his company is now
maintaining as against savings
deposit withdrawals. That is a subject we have found a stum¬

bling block on many occasions with an outside audit.
A
great many savings depositors resent any
inquiry from the com¬
pany by an auditor with reference to their accounts.
Members
of the same
with

me,

tain

sented

family wish to have the fact of their connection
savings department remain a secret; and it seems to
Mr. Baldwin mentioned,
requiring the tellers to main¬
daily record of the balance shown on the books

the

withdrawals

pre¬

deposits, and a comparison of
that record by the auditor with the
ledgers in connection with
It—that sort of work I do not believe could be
accomplished
by an outside audit.
Mr. Foye:
Mr. President, it might be
interesting to say
that in Massachusetts it has become
the custom to employ
outside auditors. We have a
banking audit or examination
periodically, possibly twice a year, coming at any time we
wish.

In addition to that

have

our

tion.

stockholders’ examina¬

They examine twice a year or more frequently if
they
desire, and each time they come in they bring with them a
firm of public accountants,
anywhere from ten to twenty men.
They make an unbiased report, and they criticise not
only

books but our officers.
Therefore the officers are very
anxious to make everything look
pretty near right, even to an
outside accountant.
Of course bank
people feel that outside
accountants or certified public accountants
don’t know banking.
our

Many times they don’t. A great many times when
they do,
or when they think
they know it, they make unjust criticisms;
but nevertheless it is all along the
right line, and we always
take if in the right spirit.
We get a great many valuable
hints from them, and I think it is in the
right direction. We
have twenty-five thousand deposits and over
350 employees,

and

have

internal audit; but we look forward to those
after the examination is made that we
have got a clean bill of health.
In connection with small
accounts, I might say for the benefit
of my friend who spoke, that we have felt
that accounts under
$200 should be carried for possibly six months or a
and
we

visits

and

feel

that

run

has

the bank

Mr. Foye:

do not

anything, interest being payable semi¬
We believe an account of less than $500 does not

annually.
We believe

pay.

lars is

pay

account of from three to five hundred dol¬
fair personal account to
carry for a while, in the hope
an

may get other business from it.
Toy (Sioux City, la.): Do I understand the gentleman
to say that they
pay interest on open accounts?
Mr. Foye:
Only on the average balance. We pay only once
in six months.
We carry the average right
along from day
to day, and in every six months’
period figure back interest
we

Mr.

that average.
Mr. Toy:
I will

the State of Iowa.

say that that custom
I am interested in

not

prevalent in

twenty-four banks, of

the

auditing wmrk that

aggregate

successfully.
Allow

to add that wherever

from

corporations or firms where
they do not receive interest.
I did
it now for fear you
we allow interest.

might have

The Vice-President:
discuss this

allow

have

deposits

line of credit,
not state that, and I state
wrong opinion as to the way
a

Is there anyone else who would
like to

of the preceding topics? If not, we will
pass on the regular order of business, the roll call
of States,
to be answered by the
vice-presidents of the section in brief
written report dealing with the
history of the trust com¬
panies in the several States during the preceding
or

any

with the conditions under which they
are now
other matters of interest

pertaining to them.

year,

and

operating, and
The vice-presi¬

dents may be heard from in brief addresses
amplifying or ex¬
plaining any topics contained in their reports by giving
pre¬
vious notice of their intention to the
I will add
secretary.
to that that we will be
very glad for
any

vice-president

handing in his report to make any brief remarks he wishes In
connection

therewith.

It is not the intention to shut off
to prevent anyone from making
remarks, but to
matters.
The vice-presidents will hand in their re¬

discussion

expedite
ports to be presented and make only brief remarks
upon them.
CALL OF STATES.
The roll call of

thej show no signs of increasing, we write them a letter
asking them if they cannot increase, and at the expiration of
another six or eight months, if we find
they do not, then we
politely ask them to either increase or close. It is our policy
to pay interest on balances of $500
or over, and under that
amount

deposit or a deposit of, say, two or
three hundred thousand dollars, or
four or five hundred thou¬
sand dollars.
They will go in the morning and go out in the
evening, and report that they have made an
examination of
that bank.
Necessarily their time is limited, because their
compensation is regulated at about
twenty or twenty-five dol¬
lars a day.
Hence they cannot give
very much time to the
bank, and when they leave the bank
they know but little more
about It than they did before
they enter. So it appears to me
that these examinations are
very largely unreliable, so that
the examination that we make or
have made by these audi¬
tors or competent accountants
employed by the Trust Com¬
pany, go in not only to the accounts, but
into the merit of
every note and every account in the bank. They examine
the records and know all it is
possible to know by making
inquiry as to the value of each account. I think the
time is
coming when every institution will have a trusted
employee in
their own organization that will
investigate and report those
accounts to the officers.
It is certainly very
embarrassing
to have an outside accountant come
in and criticise the
officials of banks when the accountants
themselves could not

year,

that

say in regard
which I have

in those
banks to
called your attention we
have two
auditors who make an examination
each six months; that
is,
the banks are all examined
twice each year, in addition to
which the regular
examinations are made by the national
bank
examiners, and the State bank
examiners, as the case may be.
But I think we all
agree that the State and national
bank
examinations do not amount to much.
They go into a bank

in my judgment the
auditing companies in the United
States have not kept faith with the
development of the Trust
Companies of the United States. One of our

vided for

accounts.

would

States

was

then proceeded with

follows:

Alabama,
Arizona,
Arkansas,
California.
When

California

called, Mr. Drake took the floor and
follows:
Mr. Drake:
Mr. Chairman. I beg to state that the State of
California about a year ago passed its first
banking act.
Previous to that such legislation as to the
spoke

was

banking institutions

the

State operated under were of a
fragmentary nature.
It became my duty to be one of the members of
the committee
which co-operated with the State
Legislature in framing that
act, being the one member of the fifteen to represent the Trust
We took up and presented to the State
Companies.
legisla¬
tors a draft of a bill following very much the lines
of the
New York State laws.: We soon found ourselves in
some diffi¬

culty among ourselves

well

the legislators, but

eventu-

TRUST

ally got through an act that is certainly a good starter, if
nothing else.
First of all, it defined the word “bank,” in¬
cluding three classes of institutions—a commercial bank, a
savings bank, and a trust company. This is the first time the
trust company received official recognition as a bank.
How¬
ever, in the operations of taking care of funds and receiving
deposits, etc., a trust company was not permitted to mingle
trust funds with those it would receive on deposit subject to
check or on time agreements.
This brought forth the necessity
of what was called a departmental banking clause.
Hence, to
do any one of the three, financial institutions, complying with
certain agreements can do one, two or three kinds of busi¬
ness; but it must show on its checks, it must show on its
windows

its

itself the different kinds of business

name

the

capitalization of a trust company is
$200,000, before it can accept any trust whatever, it must de¬
posit approved securities with the State Treasurer of one
hundred thousand, and when its trust funds exceed half a
million, it must place five thousand additional, and when
these reach to something like five millions, its maximum de¬
posits with the State Treasurer are $500,000.
There is no reason from this time on, as the State develops
the necessity of the trust company as a valuable adjunct to
that development,
and with the restrictions now thrown
around it. and the examinations required by the new bank
examination act, which is parallel to that of the State of New
York, with an official at the head of It with a compensation of
$10,000 a year and all expenses, that we should not prosper
and the trust company have its proper footing on the Pacific
Coast.
(Applause.)
(The secretary called the roll of the States, and the reports
of the vice-presidents were filed with the secretary.)
Mr. Poillon :
In connection with the report from the State of
New York, I was anxious to say that as a result of the panic
of 1907 the legislature of 1908 of the State of New York passed
a large number of laws
in connection with the better super¬
vision of State banks and trust companies, particularly along
the line of increasing cash reserves, limiting loans to corpora¬
tions and to syndicates particularly, and increasing the powers
of the Bank Superintendent.
Sufficient time has now elapsed
to demonstrate the wisdom and the practicability of these laws,
and they have since been adopted in some States in full, and
in manjr other States In part, and it would seem to me that
the
Hon. Clark
Williams, Superintendent of Banks of our
State during the panic, under whose supervision the revision
of the banking law was prepared, is entitled to the credit for
having initiated the movement, and that the present superin¬
tendent, Mr. Cheney, should be accorded all the satisfaction
that comes from having fulfilled his predecessor’s policy.
it

transacts.

The Vice-President:

Is the committee on nominations

ready

report?

association that it was a
pleasant and yet difficult duTy imposed on us today.
Never,
perhaps, have there been so many good men offered for the
different places, and not one but what had rivals proposed to
the ones we have at last selected.
The geographical situation
of the gentlemen, the services on the committee by others
heretofore from the same town or institution, various condi¬
tions have led the committee. to recommend the following
names.
I would desire to say that those names are offered
unanimously by the committee after a very hard and laborious
two hours’ work on the whole situatioif.
Mr. J. C. Drake, President of the Los Angeles Trust and
Savings Bank, of Los Angeles, Cal.
Mr. W. C. Poillon, Vice-President, of the Mercantile Trust
Company, New York City.
Mr. Roland L. Taylor, President of the Philadelphia Trust,
Mr.

I want to say to the

Fries:

Deposit and Insurance Company, Philadelphia.
E. E. Foye, of the Old Colony Trust Company of Bos¬
ton, Mass;, and
Mr. Isaac H. Orr, of the St. Louis Union Trust Company, of
Safe

Mr.

St.

Louis,

Mo.

all indebted to the
of this subject and
for the list of very excellent names which they have handed
in.
But it must be understood that the nomination of these gen¬
tlemen by the committee does not exclude nominations from
the floor.
If anyone wishes to make an independent nomina¬
tion, other than those named by the committee, they are at
The Vice-President:

committee for

sure

are

their careful consideration

liberty to do so.
(It was moved that the nominations be closed, which motion
was duly seconded and carried.)
(It was moved that the secretary be instructed to cast the
unanimous vote of this section l’or the gentlemen named by the
report, which motion was seconded and duly carried,
secretary cast the ballot for the gentlemen named.)
The Vice-President:
The next order of business is
tions for

ana tne

nomina¬

president.
Mr. Chairman and gentlemen of the convention,
place in nomination a most worthy and estimable

Mr. Cutler:
I desire to

gentleman, a man who,? to whatever position we have elected
him, has filled It with honor and credit to himself, faithful
always, in season and out of season to the welfare and success

of the

201

Our future would

Section.

be safe

his

hands.

gentlemen, to place in nomination Mr. Oliver

have the honor,

C. Fuller of Milwaukee.

(Nomination seconded.)
Mr.

Cutler:

desire

move

that

the

ballot of the association for Mr. Fuller as

Secretary cast the
our

president.

Mr. Cutler, I will have to declare your
last motion out of order.
The nominations are still open and
will be until the meeting desires them closed.
I will be glad
The Vice-President:

hear other nominations.

(It was then moved that Mr. Gillespie take the chair, sec¬
onded, and Mr. Gillespie took the chair.)
Mr. Cutler: Mr. Chairman, I move that the nominations be
closed and that the Secretary be instructed to cats the ballot.
(The motion was seconded, put and duly carried, and the
•Secretary cast the ballot for Mr.
Oliver C. Fuller for
President.)
The Secretary:
Mr. Fuller, in the absence of Mr. McIntosh,
I have the pleasure of presenting you with the badge of
office. (Applause.)
The President-elect:
Gentlemen, it is impossible for me at
this moment to express the depth of my appreciation for the
honor that you have conferred upon me.
I thank you from
the bottom of my heart, and I trust that I may be able to
serve
you faithfully and to your satisfaction and to mine
during the ensuing year.
(Applause.)
The next is the nomination of the first
Mr.

Fries:

vice-president.

Mr.

Chairman, perhaps the Association has but
a faint idea of the work that devolves upon the chairman
of
the Executive Committee, and all of the members know how
faithfully that duty has been performed by Mr. Gillespie dur¬
ing the last twelve months.
The success of the institution
has rested in his hands, and you yourself have seen today
how creditably he has discharged those duties.
I therefore
know I voice the sentiments of everyone when I nominate
for the position of Vice-President, Mr. Gillespie.
(The nomination was seconded, and it was moved that the
nominations be closed and that the Secretary be instructed to
cast the ballot for Mr. Gillespie, which motion was carried;
whereupon the Secretary cast the ballot for Mr. Gillespie as
First Vice-President.)
The President-elect:
I will ask Mr. Gillespie to step for¬
ward and receive his badge of office.
I take great pleasure in
presenting to you this badge. I have no doubt you will wear
it with great pleasure to yourself and to the Association.
Mr. Gillespie:
T wish to thank you very much, Mr. Presi¬
dent, and the members of this Section, for the great honor
they are conferring upon me, and I will continue to do the
best I can in the work of this Section.
(Applause.)
The

NOMINATIONS AND ELECTIONS.
to

SECTION.

COMPANY

President-elect:

The

order

the

election

Under our present rules the
Vice-Presidents from each State.
Vice-Presidents are nominated from the floor, and we would

glad to hear nominations.
(Whereupon the Secretary called the roll of the States, and
nominations were made from the floor or left to be made by
submitting the names to the Secretary; and it was moved and
seconded, and the motion duly carried, that the Secretary
cast the ballot for the gentlemen named as Vice-Presidents.
be

THANKS TO CALIFORNIA AND LOS ANGELES.
Mr. Gillespie:
I would like to make a motion for those
attending this meeting to show their appreciation of the great
courtesy and cordiality which they have received at the hands
of the bankers of California and of Los Angeles, and to show
this by a rising vote.
The President-elect:
The motion is unanimously carried, ex¬
cept that the members from Los Angeles keep their seats.
Before we adjourn, it seems to me it would be
Mr. Stark :
only fitting to take some action in regard to the book forms
Anyone who
adopted by the Section since the last meeting.
will compare the book issued in 1909 with the one just put
out will see that this committee deserves the hearty thanks
of this Section for the work that they have done.
I move
that the thanks of this Section be extended to the committee
for this

work.

(Motion seconded, put, and duly carried.)
The

President-elect:

of the fact that,
to

stay

attractive

away

Chair

The

its

expresses

appreciation

in spite of all the inducements for members

from

this

entertainment,

Mr. Drake informs me,

meeting

today—in

the

shape

not only a trip to the Island, but,

that provision has been made to carry

1,100 people on automobile rides in addition, I believe, to the
excursion

Catalina

Island—the

attendance

been

has

very

And the pationce of those who
have attended has been fully demonstrated when it is seen
that so many have remained throughout the day.
Notwith¬
standing the difficulty of the hall, the demolishing of the
building across the way, and the setting of the table for some
banquet that seems to be in progress in the other room, we
have had a very interesting meeting.
I thank you, gentlemen,
for your attention during the entire day.
Is there any business

good under these conditions.

that

should,fiqme before this meeting?;»

(It was moved that, the meeting adjourn,
onded, and duly carried.)

t,:?y

-<■

the motion

sec¬

American Bankers1 Association
Ninth Annual

Meeting, Held in Los Angeles, Cal., October Sixth, 1910
INDEX TO SAVINGS BANKS

The Future of Bonds
Amortization of Bonds

-----

Segregation of Savings Deposits, J. H. Johnson
Segregation of Savings Deposits, R. M. Welch
Savings System in Public Schools
-

Thrift

Building and Loan Movement in United States
Address of Welcome

Page 202
Page 204
Page 206
Page 207
Page 209
Page 211
Page 213
Page 220

Report
Report
Report
Report
Report
Report

PROCEEDINGS
of Executive Committee
of Secretary
of Committee on Savings Bank Laws
of Committee on Auditing
of Postal Savings Bank Committee of Committee on Membership -

Page 216
Page 216
Page 217

Detailed

Proceedings

Address by President

Page.217
Page 216
Page 219
Page 220
Page 221

The Future of Bonds.
By Edmund D. Fisher,

The future of bonds

Deputy Comptroller, City of New York.

investment is bound up,

to a
every question
which affects financial and industrial activity. It is mani¬
festly impossible, within the appropriate limits of an ad¬
dress, to deal in more than a general way with some of
the fundamental causes which produce from time to time
greater

lesser extent, with practically

marked and sometimes violent fluctuations in the value of
investments with fixed maturities, and to point out some
of the weaknesses in

business which

are

Interest return

general methods of transacting
responsible for these fluctuations.
our

the market value of characteristic

se¬

curities

during the past three decades has undergone a
marked change.
This return on railroad bonds was, in
1879, 5.90 per cent.; in 1889, 4.93 per cent.; in 1899, 3.95 per
cent.; while in 1909 it

was

basis of 4.18 per

cent.
high-grade municipal securities during this
period has averaged about 1 per cent, lower than these
rates, except in the last decade, which has been character¬
ized by a change in the general movement of bond
prices.
It is quite evident, therefore, that from the broad stand¬
point, the usual law involving interest returns has pre¬
vailed; namely, that as wealth and capital have increased
the interest return on invested
capital has declined.
Economists have been endeavoring to ascertain the chief
reasons
underlying the more recent and startling change
in bond values.
The large increase in the production of
gold since 1890, the extraordinary increase in commercial
transactions, the broadening of the opportunities for in¬
vestment by larger and more
frequent issues of railroad
and industrial securities,
extravagance and the greater use
of luxuries throughout the world, the maintenance of
large
standing armies, the building of powerful navies, the capi¬
tal waste through three
disastrously expensive wars, the
The return

inflation from the increase of national bank-notes in this

country, the expansion of the scope of savings bank in¬
capital loss due to the San Francisco
earthquake have all been causes for the marked lowering
of bond prices
during recent years.
The abnormal increase in the
supply of gold, followed by
higher commodity prices, 1 has recently been
frequently
ascribed as the main reason for this *?
change. There'is,
however, a serious question whether increased
gold pro¬
vestments and the

duction has been the dominant factor.
able that the stimulating effect of

While it is

prob¬
gold has been a con¬
tributing element in the increased activity of the world's
business, still, the outlook over a long period of years
tends to approve its quantitative force in
materially affect¬
ing prices. Gold production has more than trebled in
amount during the last
thirty years, but it is very doubt¬
ful whether the much smaller increase in
commodity prices
during the same period has been mainly due to this cause.
The truth is that gold cannot be classed as an
ordinary
commodity. It is a law unto itself. The demand for it is
constant.
It always has value and its holder is
quite as
frequently satisfied with its latent worth as with the ad¬
vantage of its actual use. It is therefore true that gold in
use, either in bar or coin form or its equivalent, is the
only
gold that has an influence as a commodity in affecting
prices. As this is an inconsiderable portion of the world's
store, and as the amounts used are largely for reserve pur¬
poses and are so employed under definite banking regula¬
tions, it would seem that the effect of its use upon com¬
modity prices is inconsiderable in long periods of time,
but may be acute during short periods.
Business is, after all, only the mechanics of distribution.
It began with the barbarian, who seized what he could to
maintain life.
Civilization now compels a man to earn his
living by serving others. Radical departure from the prin¬
ciple tends to unsound business methods. There is, of
course, the broad period of transition from barbarism to
civilization, passing through the various phases of seizure,
oarter and exchange.
Exchange was first based upon sim¬
ple and restricted mediums of value, which gradually
broadened until gold became the standard. But with the
expansion of business activity even gold, with its equiva¬
lent, the bank-note, became cumbersome as a general me¬
dium of exchange and was
supplanted by the check, the
draft and bill of exchange—all
expressive of the confidence
between

man

and

man

and the close touch between the

banking system and the business world. This really means
that credit is fast becoming the chief medium of
exchange,
with gold for reserve
purposes and for the adjustment of
domestic and international balances.' r
f
As the momentum of a period of business
■

activity de-

SAVINGS

velops credit expands and ultimately works into a condi¬
of inflation which temporarily depreciates the pur¬
chasing power of the unit, namely, the dollar; with a re¬
sultant increase in commodity prices.
Then, after the
crisis of inflation is reached, the reverse process takes place,
credit automatically contracts and gold quietly retires
to its position as a latent rather than an active force,
giving the business world a period of needed rest. The
measure of inflation
which remains after such a period
continues to be a force in maintaining a higher level of
prices until the credit on which it is based has been liqui¬
dated. For instance, the volume of liquidation was much
greater after the panic of 1903 than after that of 1907,
with the result that the amount of capital released for in¬
vestment in the former period was larger than the amount
that lias been released since 1907. As a consequence, the
average level of bond values has not yet recovered.
The
amount of gold, or its equivalent, that remains
continually
circulation,

in active

questionable practices in corporate management.
In the past ten years there has been a distinct advance
in public knowledge of what robbery in high finance
really is. Thus, the time has now come when a change in
method is demanded, and there is evidence of an impetus
towards general corrective tendencies.
The time will
shortly come when, through governmental control of the
issuance of securities and oversight of the business meth¬
ods of large corporations, bondholders will have greater
assurance

political world, how¬
point to a period of quietude in business, when the
recuperative powers of the country for investment will re¬
turn.
Necessity, growing out of business difficulty, stimu¬
lates periods of thrift which tend to reduce commodity
prices, increase wealth and consequently the investing
power of the people.
Furthermore, the bond markets are
not likely to be flooded with the great volume of com¬
peting securities which has characterized the last decade.
In this country the need for improvement in our currency
system is attracting much public attention, and the neces¬
sity for the establishment of a central bank for this pur¬
pose is becoming more apparent. The creation of such an
institution would go a long way in reducing the severity of
recurring crises which have so often disturbed our trade,
for under our present system there will
always be the
need, occasionally, for clearing the cumulative force of
error which
develops with every period of business activity.With this reform in our banking system bond values would
quickly return to a basis more nearly commensurate with
our growing national
wealth.
Before these various and vexed questions, which involve
social, financial and business changes, are settled, there
will inevitably be continued confusion in the
public mind
as to
uthe proper relative values of all securities. During
this period it is quite clear that the
higher grade bonds of
well-managed corporations and municipalities will hold the
first place in the regard of the investing
public. The ex¬
tent to which banking reform is a great national
necessity
was
amply proven during the panic of 1907, when the credit
of New York and other
large cities in the country was

reserve

growth of this country, and its consequent increase
importance among the nations of the world in its finan¬
cial and commerical relations, has emphasized some of the
defects that have long been inherent in both our
banking
and business methods, and which have also tended to de¬
preciate bond values. An unsound currency has placed us
at a great disadvantage in our relations with other coun¬
tries, especially during times of readjustment following
periods of undue business inflation. European financiers,
with their ability to raise money
at all times through the
medium of well-established centralized banks, have been
enabled to absorb much of our capital in times of business
stress, when we are helpless through lack of similar facili¬
ties.
They sell to us when our prices are high and buy
from use when our prices are low.
The expansion of business in the last years of the old
century and during the first years of the new, largely in¬
duced by the growth of capital during the several
years
of economy following the panic of 1893, was coincident with
the new tariffs and the organization of
powerful corpora¬

used to

previously unheard-of degree. The public felt that a new
in business prosperity had come.
Active demand for
capital stimulated our credit expansion. New issues of
Real estate

activities began to develop, diverting capital to non-liquid

older

advances

commodity

income

came

coincidental increase in the cost of living to
the individual.
Corporations were forced to bid higher
rates to satisfy their needs and the
buying power of the
of

and

lower rate bonds

declined, through
competition with securities bearing a more attractive rate.
This change that has come over the bond market in recent
years has also been due to the gradually decreasing sup¬
ply of investing capital on account of foolish extravagance
and needless waste.
During the period under discussion the
non-producing class in the United States has increased
from 28 to 40 per cent, without the loss
being
material increase in economic efficiency.

offset by
This has
operated directly as a factor in increasing prices. The so¬
cial unrest, growing out of the undue diversion of
earning
power to monopolistic corporations, has accentuated the
question as to the ultimate integrity of their securities.
Supreme Court decisions, interstate legislation,; legislature
investigations, have all indicated that the recent period of
any

Government returns

over

the United States

situation,

compelled
advantage of permission from Washington to de¬
posit high-grade municipal and railroad bonds as collateral
security for Government deposits.
It is very pleasing to me to make
specific reference to
a
security with which I have had some personal experience.
Comptroller Prendergast, since assuming the management
of the Department of Finance of the
City of New York,
has been setting an example to
municipalities throughout
the country by
introducing sound economic principles and
efficient business methods into the
management of the
city’s financial affairs. These important reforms are pro¬
ducing results which will stimulate interest in municipal
securities generally.
The successful development of great
public improvements by private capital igl an important ele¬
ment in enhancing the value of the bonds of
any large city.
Within the past few weeks a gigantic
underground transit
system, constructed by the Pennsylvania Railroad Com¬
pany at a cost of $110,000,000, has been opened to the New
York public. Another
great transit improvement of equal
magnitude and importance is being developed by the New
York Central Railroad at an estimated cost of
$125,000,000.
Such expenditures of
private capital, and the additional
facilities which the improvements
afford, must necessarily
bring added business to the city, thereby enlarging its tax¬
ing power and relatively increasing the value of its securities* i‘> The value of New York’s bonds >as a reinvestment of
the highest grade
depends not only upon an added taxing
to take

era

all

the stress of the crisis.

national banks all

ease

show that at that time in order to release the

tions which extended control in their various industries to

With

past

ever,

The

prices and

intrinsic value of their investments.

Recent events in the financial and

investments.

the

larly shaken.

maturities.

„

years the conservative capitalist did not care to
his money in stocks because of the continuous
fluctuation.
His confidence in bonds has also been simi¬

of the normal increase

bonds—railroad and industrial—were offered.

invest

form, in excess
required by a growing population,
is the only gold that can
permanently affect prices. Any
increase in credit caused by the growth of the
deposits of
banking institutions, which are required by law to keep
minimum reserves, tends also to inflate
prices. The de¬
crease of the
average reserve in this country during recent
years from twenty to about twelve per cent, indicates a
strong tendency to such inflation. It is evident, therefore,
that gold must be given a not too important place as a
cause, both in the increase of commodity prices, and the
interrelated depreciation of bonds as investments with fixed
or

203

extravagance has been burdened with the excresence of

tion

in active

SECTION.

BANK

were

204

BANKERS’

growing out of this and the city’s large and continu¬
ally increasing population as shown by the last census,
hut also upon the efficient administration of its business
and the undoubted evidence of
good faith exhibited by its
power

administrative officers.
The

future

unite in

bonds, then, is bright. Bankers should
plan for a sane and sound currency. Corpora¬

tions should conform to the Federal and State laws
guar¬

anteeing fair play.

Cities will be better governed.

The

CONVENTION.
productive power of the country will increase, and wealth,
which is dependent on all these
things, will seek invest¬
ment.
And gold?
Why, that will continue to pour into
the world in
varying quantities as in the past; always in
demand, yet always stored away; a latent and an active
force. As that
portion of it which is a factor in this coun¬
try will always be in the hands of the members of the
American Bankers’ Association, the ultimate solution of its
problem may be safely left to them.

Amortization of Bonds.
By John Haesen

Rhoades, of Rhoades & Co., Bankers, New York.

It is my purpose

to explain briefly, at the outset, the
theory of amortization, and the justice of the process in a
proper field—the administration of an estate; and there¬
after to dwell upon its powers for
good and for evil when
applied to the management of a savings institution.
A moment’s thought to the term itself.
The word
“amortization”

death;

and

is derived from the Latin

the

the reduction of

French

ad, at, mortem,
amortisement, means

equivalent,

debt

through the agency of a sinking
fund.
When used in a banking sense “amortization” im¬
plies the charging off of premiums or the crediting of dis¬
a

counts

upon securities purchased above or below par, or
below par, in order that the price of a bond at
maturity

be brought to par, its redemption value.

may

handling an estate one must exercise care that in¬
and principal are
segregated, for income should be
paid to the life tenant, and principal preserved intact for
come

the

remainderman; the fact that both life tenant and re¬
mainderman may be one and the same
person does not alter
the

case.

When the life of

bond purchased above par

method
come,

optional, premiums should be charged against in¬
for the reason that the life tenant is entitled

interest earned upon the money
invested, not neces¬
sarily to the interest received upon the face value of the

bond.
Premiums may be amortized or written off in two
ways—
in whole and at once
upon the purchase of a

Once and for all time

income is

method which is

bond, or grad¬
charge them against

unjust to the life tenant,

es¬

pecially so with a bond commanding a large premium, for
the charge may then be so
great as to consume for a num¬
ber

of years

mortgagor.
which he

the semi-annual interest received from the
The life tenant is thus deprived of income to

rightfully entitled.

The

theory of scientific
gradually ex¬

amortization presumes that premiums will be

tinguished by reserving at each income period a small por¬
tion of the interest
received, the amounts reserved being
such that, at the
maturity of the bond, they will total the
premium paid.
For example, if a thousand-dollar
bond, redeemable at
par at the end of twenty years, bearing interest at 4
per
cent, payable
semi-annually, were bought at 110, or for
$1,100, it would be purchased upon a 3.31 per cent, basis.
The basis

table of bond

investment cost

can

be ascertained from any

values, and is used to distinguish the rate of
interest earned upon sums invested from the rate of inter¬
est received
upon the face value of the bond. In the above
the

semi-annual interest received is at the rate of
cent, per annum upon a thousand dollars, or
$20, but
the interest earned for the first six
months

case

4 per

upon the money
invested, viz., $1,100, is at the rate of 3.31’
per cent, per
annum, or $18.22.
Hence, the life tenant is only entitled
to $18.22—the interest
earned—and the difference, $1.78—
the amortization—should be
considered principal, to be set
aside by the trustee to take care of
the original $100
prem¬

the end of the first six months the interest
earned upon
invested, viz., $900, is at the rate of 4.78 per
cent, per annum, or in fact $21.51.
In the management of. an estate the
purpose of scientific
amortization of premiums is

clearly apparent. But the

ad¬

ministration of an estate is quite
a different
from the management of an institution for

proposition
savings.

merely

to the

ually.

expiration of
period the in¬
per cent, per
annum, but should be computed upon $1,098.22.
If this
process be continued until the maturity of the bond it will
be found that the total amortization will
equal the prem¬
ium paid.
It would seem as if, in common
justice, the theory should
work both ways, and we should amortize
discounts as well
as
premiums, but here is where theory and practice must
needs part, as it is
impracticable for the trustee of an
estate to amortize or credit
discounts, because the interest
earned is greater than the interest
received, and he has not
the funds, nor may he invade
principal, to pay over the
excess of the life tenant.
For instance, if a thousanddollar bond, having 20
years to run, bearing interest at 4
per cent, payable semi-annually, were purchased at
90, or
for $900, the semi-annual interest received is
$20. But at
the money

through
redemption becomes extinct, the premium paid is lost.
Equitably, this loss must be charged against either income
or
principal. Where the wording of the will leaves the
its

ium, which would otherwise be lost at the
the life of the bond. At the second interest
terest earned is still at the rate of 3.31

when

already explained, it is the business of the trustee
estate—the will
permitting—to pay the life tenant,

feasible, all income earned and to preserve the prin¬
cipal for the remainderman, and it should be emphasized
that

the

trustee

estate

responsible to the re¬
merely for securities, not essentially for their
cash value at the time of
receipt or purchase.
In the management of an institution for
savings the
paramount duty of the trustee or director is to
keep the
invested principal of each and
every depositor as if it were
cash—for deposits are a cash
liability—to the best of his
knowledge and belief intact, and be ready, however remote
the contingency, to make a cash
payment in full to each
mainderman

and

every

depositor

upon

reasonable

immediate

not

demand.

With the stock

savings banks, such

as,

with

rare

excep¬

tions, characterize the West, the director is
privileged to
reserve out of earnings as much as
he desires for stock

dividends, and hence the
is

amount

of actual

interest earned

of minor

importance. But with the Trustee Savings
Bank there is no
stock, and such net earnings should be
paid to depositors as are consistent with the
stability of
the institution, and, inasmuch as
they are not money¬
making concerns, competing with one another for deposits,

it is obvious that the banks should
unite

dividend

policy subservient to the best interests of each and all, for
only on such lines can they best serve the
philanthropic
purpose for which they were founded—the
encouragement

of trift.

Perhaps the merits and demerits of amortization, in its
application to the management of a savings
institution, can
best be demonstrated
by carefully

scrutinizing a law re¬
cently enacted in the State of New York. It is but fair
to say in its defense that the
Savings Bank law governing

SAVINGS

205

SECTION.

BANK

I wish to point out

that the amorti¬

Investments is

the intent of the law.

securities

unwisely fails to provide that any fixed
to deposits shall be maintained, and ex¬
plicitly states that, after the expenses and the amortiza¬
tion of premiums and discounts have been duly provided
for, all interest earned, as nearly as may be, shall be paid
to depositors, abandoning the matter of increase or reinforce¬
ment of surplus completely to the discretion of the trustee.
Such being the case, a bank striving to pay larger divi¬
dends has merely to sell those securities purchased upon
low bases, viz., at high prices, charge the loss to profit and
loss account, and repurchase the same, or others equally
good, upon high bases. Thus a new basis or investment
cost is established, and the amount of interest earned,
appplicable to dividends under the law, is increased. Do

rigid, only the purchase of the highest grade
being permitted.

January 1, 1908, the country had not wholly recov¬
panic; bonds were much depressed in price;
and many of our savings institutions discovered the start¬
ling fact that, if they appraised their securities at their
estimated market, or probable liquidating worth, they would
be unable to show a surplus.
Assuming that all invest¬
ments were gilt-edged, and certain to be paid at maturity,
and thinking purely of dividend payments, to the exclusion
of conservation of principal, they persuaded themselves and
the legislature that the old law, which demanded a semi¬
annual report of their condition, based upon market values,
should be abrogated, and that mortgages upon real estate
should be appraised at par, and bonds at basis or invest¬
ment cost, adjusted to date by the gradual amortization of
premiums and discounts. For illustration, a bank which
purchased ten years ago a 3y2 per cent, bond of forty years’
life upon a 3 per cent, basis, or at 111, should be permitted
to value that bond today, with thirty years’ life remain¬
ing, upon the same basis, or at 109, despite the fact that
it might be marketable only upon a 4 per cent, basis, or
91.
In a similar manner, a bank which purchased ten
years ago a 3 per cent, bond of forty years’ life upon a
3 per cent, basis, or at par, should be allowed to value
the bond today at par, although perhaps marketable at
On

ered from the

not above 82.

can

seen

that under such

law no

report a deficit, for to all intents and pur¬
all securities would be appraised at cost. Neverthe¬
less, ignoring its powers for evil, a law permitting this
procedure, and called the amortization law, ,was enacted.
To be sure, under the general banking law of the State,
the Superintendent of Banking has the legal right to de¬
mand from the banks a report based upon market values.
This, however, is not mandatory, and places entirely too
much responsibility upon the shoulders of the Superintend¬
ent. Bank superintendents are but human; many owe their
appointment to banking interests; and, with the amorti¬
zation law behind him, a man with political aspirations
might be sorely tempted to shape his conduct so as to keep
in good grace with the banks.
could

bank

poses

Gentlemen, this law, enacted at a time of stress, was

laudable, the other not.
Many a savings bank man thought it expedient that in¬
terest earned for a six months’ period should be accurately

advocated

for two purposes, one

for the purpose of determining the proper
applicable to dividends, or interest credits, as they
called iuMhe East, since the law has always held that

ascertained,
amount
are

regular dividends should be paid out of earnings, and not
to the detriment of surplus; and many men were of the
-opinion that a uniform method of computing earnings was
highly desirable. The amortization law partially serves
this purpose, for if we appraise semi-annual mortgages at
par and securities at basis or investment cost, and adjust
this basis to date by a semi-annual amortization of prem¬
iums and discounts, we obtain the actual amount earned
upon the moneys invested for a six months’ period; but, in
amortization discounts, although theoretically it is pre¬
sumed that premiums and discounts offset one another,
practically we are compelled to draw upon surplus. How¬
ever, when we get at the heart of the matter, the ques¬
tion arises, in the management of a savings bank, what
-essential purpose is served by knowing the actual interest
earned for any given period? I do not deny that it is of
academic interest and a conservative procedure; but there
are times when the Trustee
Savings Institution would be
-entirely warranted in paying a portion of its regular divi¬
dends out of surplus—which belongs to depositors—pro¬
vided the surplus be larger than necessary, and, on the
other hand, there are times when the bank would by no
means be justified in paying anything like the actual in¬
terest earned or even received, for the instability of the
institution might demand a reduction of the dividend rate.
It may
serve

how

be amusing, it certainly is humiliating, to ob¬
some of our savings institutions have defeated

zation law very
ratio of surplus

not

misunderstand

banker

me.

There

are

times when

shrewd

quite properly sell and buy bonds to advan¬

can

of a mischievous jug¬
gling of securities and a consequent manipulation of earn¬
ings proves the futility of the law even for a proper pur¬
pose, the computation of earnings as a basis for a proper
tage, but the possibility here opened

dividend disbursement.

Now, if the old law, demanding a periodical report of
assets and liabilities, or the true condition of a bank, was

abrogated, and the amortization law knowingly enacted
for the purpose of hiding the deficits of the future, the
proceeding was and is, so long as we supinely acquisce,
a disgrace to the State of New York.
Let us charitably
assume that this violation of the principles of sound bank¬
ing was born of ignorance at a time of fear.
For the purpose of
stitution in the land,

establishing solvency no financial in¬

barring the life insurance company,
right to appraise its bonds at basis, or investment
cost, and this single financial institution is excepted only
because, by means of its mortality tables, it can ascertain its
liabilities, not only their amount, but their due date, with
almost mathematical precision, for they are based upon
a
certainty—death—but the cash liabilities of a savings
bank are subject to the whim of the living.
If it be said that, in the propositions here laid down, I
am theoretical and ultra-conservative, I answer that many
bankers would do well to put more sound banking theories
into practice;
and, as for ultra-conservatism, in the
handling of other people’s money ultra-conservatism is a
has the

virtue.
I

have

set

before you

these facts and possible delin¬

quencies in no spirit of captiousness or ill-will, but merely
to exemplify the indifference that exists among directors
and trustees towards the principles of sound banking;
men who are no less immune from their responsibilities
than

are

the heads of the institutions.

Gentlemen, apathy

his igno¬
need not
assume them, but if,, assumed, for the sake of those who
have placed their trust in us and for our own sake, let us
comprehend them. Directors need not always direct, but
they should at least know how.
We are not here today, I take it, for the purpose of
glorifying the banking methods of this country, but rather
seriously to discuss the financial problems of the hour.
For, if not here, where should they be discussed? A just
pride in our achievements should not blind us to our faults
and weaknesses.
If there are weak spots in the financial
structure, it is our duty to expose them, not only for our
own good, but for the benefit of others.
If you will permit me to discuss further, we who have
at heart the welfare of the savings of the poor, are now
to have a worthy and—if feeble ourselves—a powerful
competitor, the postal savings bank, and greatly as we
may regret to see politicians with little or no financial ex¬
perience enter the banking field, the postal bank ultimately

is the shield behind which many a man shelters
rance.
If we do not care for responsibilities we

will appeal to the people.

ing for safety, not income.

The savings depositor is look¬
Should any weakness develop

private institutions, fear and anger, justly
aroused,^!!) spread like contagion, aud pur,? bankers, one

among

our

206

BANKERS’

CONVENTION.

and

all, will be not only victims, but offenders. Of all
times this is the time to be
strong, standing ready, if our
services are no longer
required, to

amortization of premiums and discounts, if that
purpose

solely the determining of earnings, is scientifically cor¬
as a guide for the declaration of
dividends, such
earnings at best are of little value, and of absolutely none

liquidate dollar for dollar.

rect, but

I have called your
attention to some faults at home. One
word more. The stock
savings bank of the West, although
often
admirably managed, is not, on general principles, a

unless
as

depository for savings funds, unless such funds are
segregated and restricted as to investment. Had our bank¬
proper

stability of the institution,
by the market value of its assets.
Three things are certin.
Basis or investment cost for
measured

the

of establishing solvency is dangerous, for
be used to conceal the truth. Estimated market
or
probable liquidating values are ignored at our
peril, for
they best express the facts. The absolute truth, or the
positive knowledge that we can meet our
obligations, can
only be learned if called upon to face them.

foreseen the

ers

know the condition of

imperfections of this service, and avoided
or rectified
them, the postal savings law would never have
been enacted. If
today our national bankers do not take
more sincere,
thorough and active interest in banking re¬
form, and demand of Congress a Central Bank of Issue—
the PEOPLE’S BANK—to be conducted
under the joint
control of bankers, merchants and the
Government, the
time will come when the
people will demand of Congress
a
Government Bank.
Shall we, the bankers, surrender
banking duties, rights and privileges to politicians? Is it
possible that our American bankers have no other ambition

purpose

it may

From all of which we can but
conclude
its usefulness in other
fields, in its

institution

that, whatever
application to such an
savings bank, where deposits are a cash

liability, the process of scientific amortization may be,
and,
as performed under the
present savings bank laws of New

York State, it is both

than the accumulation of wealth?
In closing, I desire to revert to the
main

Gentlemen,

subject and to
repeat that, with the savings institution, the
purpose of

poor.
them.

It is

delusion and

have in

noble

snare.

keeping the savings of the
responsibility and a privilege to guard
our

Segregation of Savings Deposits.
By John H.

The

Johnson, President

subject, Segregation of Savings Deposits, is

of Peninsular

mis¬

understood by many bankers that I deem it
proper to make
at least
passing reference to the business of our section,
which may be summed
up in
brief

the

Care of Savings Deposits.
The modern savings bank

institution, which
and

its

policy

first

was

sentence—Proper

originally

philanthropic

light in England about 1810,
by educational methods, to promote

was,

saw

provident habits among the laboring classes. Its
character
was purely
mutual; its first and only concern—safety.
It
•was

comparatively easy matter in those and even later
days for a few public-spirited citizens to start and to make
a

successful

mutual

savings bank, because the earnings on
their investments were much
larger than on the same classes
today, and their cases were few, since they invested
mostly
in government and
municipal bonds, safe and easy of selec¬
tion, only moderately in mortgage loans, and rested
there.
As time went on, the
country grew in population

wealth; its people became
demanded

up-to-date

provident,

and in

as we had

facilities, and.

prayed,
result, we

have the State bank and the trust
company, each
system in itself, gradually

great

absorbing the savings business

and affording facilities far in excess
of those permitted under
the mutual plan, but in
many States without the regulations
and restrictions which
experience had proven wise and
pru¬
dent.
Only in recent years has any concerted effort
been
made to unify and
strengthen our banking laws, and if this
section accomplishes no more than it
has already done, the
time and efforts of the. American
Bankers’

its

Association,

inception, will have

been well spent.
Our progress recently has been
very marked; our
law committees and the State
vice-presidents

from

aiding

very

materially in passing reasonable laws,
organizing depart¬
ments

and

bringing about more effective supervision, with
resulting better condition, and having made a
fairly good
start on our side, with firm
denial of any
a

egotism,

the bankers of the other
systems to join with
ther strengthening the

doing this,
mend

banking situation,

we,

with

we ask
in still fur¬

whole.

positively unselfish motives,

of the cardinal
necessities,
the benefit of one
class, but for all.
as one

recom¬

Segregation—not

for

Ex-President Geo. M. Reynolds, at our last
annual con¬
Chicago, voiced strong approval of such
action,
as have
vention in

many of our

leading bankers; State superintendents

banks are,
unanimous.for it; in fact,, we have had-no
marked opposition *
except from some of our trust
company

friends, wffio say our motives are “selfish”;
ous,” and that under it “modern
"

plan “nefari¬
banking would be impos¬

sible.”

our

Segregation of Savings deposit is is not a theory, but an
accepted practical and desirable feature of the
banking busi¬
ness.
I take kindly exception to the
flowery reference of

that
of

vigorous opponent of segragation,

Pennsylvania, that I

theory and that

years

“live

feet ne’er

On the contrary, since

and

revel

good friend James
in

the

midst of

touch the ground of

practice.”

leaving commercial life

some

twenty
I have been in continuous and active service in
department of the bank, but ever mindful of my

ago,

every

earlier

experiences that to be successful you must meet
the reasonable demands of your
customers; for in no form
of professional or commercial life has the
client more claims
than on his banker, a quasi-public
official,

enjoying valuable
rights and franchises for which he should render
compen¬
sating service. I also come from a State that has put the
idea
not

into

practical workable form, and has demonstrated,
only its feasibility, but its desirability as well, where

ninety per cent, of its banks operate under the dual charter,
where, in the commercial line, the National banks are

and

dwarfed by their State

competitors, the latter holding

two-thirds. of the commercial

business

monw’ealth; official reports for last

year

$12,000,000 in commercial deposits,
$18,000,000 in savings, or 12 per cent.;

our

great

showing
or

over
com-

gain of

per

an average on

cent.;

total

of 13 per cent., as compared with an estimated
loss to Na¬
tional banks of about $3,000,000, or about 2
per cent., the
exact

officers,

Savings Bank of Detroit.

mate

figures not being obtainable at the moment, this esti¬
being based on figures already published.

Segregation in some form has already been adopted in
nine States, seven of them in the last five
years.
In Texas,
it was the result of a failure which
practically took aw?ay
every dollar of assets from the savings
depositor; a bank
and trust company, operated both commercial
and saving de¬
and taking advantage of the
savings, demanded notice on these deposits,

partments, became involved,
time
and

limit

then, to provide funds to pay the demand commercial
deposits, pledged all of the best assets, first at two for one
and then at a greater ratio, with the result
that while com¬
mercial depositors were nearly all
paid, the bank was event¬
ually forced to close, and the savings depositors, with their
hands legally tied, were left with the
undesirable and ques¬
tionable (assets, and suffered almost total loss.
The injustice
was soi
apparent that f;the Legislature of that State silbse-

SAVINGS
quently made short work of passing a segregation law,
taining that if deposits could be legally withheld,
should be protected.

BANK

main¬
they

Having shown some of the desirable features, let us take
the other side, as voiced by the opposition.
It is claimed that “Segregation makes a preferred credi¬

tor,” and yet in the recommendation of the very gentleman
mentioned, of an equitable plan, he provides “That such in¬
vestments shall in liquidation be for the exclusive use of
such deposits”—a preference, it is true, but in his own
admission, a fair one.
That “a savings deposit can be clearly defined,” I ad¬
mit there is a diversity of opinion on this subject, and that
it is difficult to make

hard and fast rule to

cover

all

sec¬

of us in our hearts knows
savings deposit is without being told, and most of

tions of the country, but every one
what

us, at

least, feel the necessity of a fair and reasonable defini¬
and are broad enough to decide the ques¬

tion of the term,

tion, particularly if assisted with reasonable legal defini¬
tions, more particularly as to time, payment of interest and
the use of the word “Savings.”
That it would tend to force the active or commercial de¬

positor “to transfer his account to a bank not under its
operation.” From personal experience, it is quite the re¬
verse.
We found this so in the late flurry; merchants and
manufacturers were entirely satisfied, and freely deposited
their currency and their availbale funds, because they knew
their assets could not be diverted from the channels of busi¬

by the panicky fears of the depositors of a savings de¬

ness

On the other hand, a remarkable feeling of con¬
to prevail with the savings depositor be¬
cause he also
knew, first, that no savings depositor had
any advantage over him, and next, that none of the assets
of his department could be diverted or used in the payment
of the daily demands of the merchant and manufacturer.

partment.

tentment seemed

That “there would not be

negotiate loans

commercial

sufficient

ers

think it

wise

available funds to

outside of that required

paper

to be invested in fixed securities.”

that in the smaller

Most conservative bank¬

provision that savings deposits shall not
but our experience is

be invested in commercial securities,

communities this is desirable, provided

restrictions, which should ema¬
leading bankers
of the different States.
It is unqeustionably advisable that
there should be a secondary reserve for savings, and none is
better than high-grade collateraled or well-selected commer¬
cial paper. But there should be a limit, and where possible,
such loans should be restricted to collateral. This may take
the form of metal in one State, cotton in another, farm or
manufacturing products in another, as the particular dis¬
trict may be able to offer.
In our State we are permitted
to so loan not more than 34 per cent, of our total savings
deposits, restricted by limitations as to class and amount,
and even the bank with a capital of $20,000 is not handi¬
capped nor is the community which it serves. If the farmer
or the laborer knows that only a limited amount of his de¬
posit at most can be invested in the mill or the factory, that
may be the very life of the town, he is nbt worried, because
he knows that in the event of trouble in either, the bank’s
possible loss is limited and his reduced to a minimum.
That “it would entail a hardship on small banks in re¬
quiring extra books and extra clerks.” This again, from
practical experience, is not so. Where a bank is not large
enough to afford the actual separation of its departments,
the work can be carried on by one and the same person,
and as the records of the different deposits and investments
are from their very nature kept in separate books, these fea¬
tures automatically take care of themselves.
The division
of cash and reserve is a matter of only a moment in the ad¬
justment of a day’s business on the general ledger or daily
it be done under reasonable
nate from

207

SECTION.

the banking departments and the

statement.

that I have not referred to the laws
California, where our idea is developed in its most upto-date form, but I have only refrained that their merits
might be presented to you first-handed by the other speaker
on this subject, Mr. R. M. Welch, treasurer of the San Fran¬
cisco Savings Union. As they are the result of close appli¬
cation of the experiences of years in many States to the
demands and requirements of the hour, I would ask for him
your kind attention.
It may seem strange

Segregation of Savings Deposits.
By R. M. Welch,

Cashier Savings Union Bank of San Francisco.

subject, there has arisen
question as to the proper definition of savings de¬
posits. What are those deposits of a bank that should be
invested in securities of a prescribed character segregated
and set apart from the other assets of the bank?
For present purposes a savings deposit may be sufficiently
defined as one which the depositor has designated as a sav¬
ings deposit that he intends to leave it with the bank for
an
indefinite length of time—one concerning which he
waives the right to require of the bank payment on de¬
mand, in accordance with certain conditions as to notice
of withdrawal prescribed by the bank—a deposit on which,
in consideration of these understandings or agreements, the
bank has undertaken to pay a higher rate of interest than
could or would be paid were the deposit to be only so in¬
In recent discussions

of this

some

vested that it could be returned

demand.

Here it may

suggested that this definition does not cover interest-

bearing certificates of deposit payable at
does not, and it is not intended
cate of

fixed date.

that it should.

A certifi¬

deposit payable at a certain date is not a savings
deposit in the sense now under consideration. This is rec¬
ognized by our California banking act which provides that
time certificates of deposit issued by a savings bank shall
be subject to the same limitations and conditions as apply
to other deposits, and notice thereof shall be given by the
words, “Subject to conditions of agreement with deposi¬
tors,” printed) on the face of the certificate. The effect of
this provision is that a savings bank cannot be thrown into

insolvency for failure to pay its matured certificates of de¬
posit, if in times of stress or panic it is unable to realize
sufficiently on its investments to meet the demands of its
depositors.
Having determined what we shall class as savings de¬
posits we will now proceed to consider whether it is desira¬
ble that such deposits, when held by other than the
exclusive savings banks, should be put into investments of
a
specified character segregated from the other assets of
the bank, and the methods of so doing.
Banking is a business in which all persons are free to
engage; the unqualified can be eliminated only after they
have tried the experiment, and failure results rather from
errors of judgment than from misappropriation .of funds.
The average individual who desires to save a portion of
his earnings cannot determine for himself the relative
qualifications of those persons or association of persons
who, having obtained the necessary capital and the sanc¬
tion of the State, invite the deposits of the people.
It is
entirely consistent with the duty of the State to its citi¬
zens that it should, so far as
possible, by prescribing the
protection that shall be given to certain funds, minimize
the chances of loss through errors of judgment on the part
of those persons it has licensed to deal with other people’s
money.
It may

be suggested that with the establishment of the
postal savings banks the need of degislation to protect sav¬
ings rfeank depositors is past ; thatUhe ^postal Savings banks

208

BANKERS’

CONVENTION.

intended for just those classes of persons, incapable of
thinking for themselves in matters financial, for whose pro¬
are

tection

legislation is supposed to be necessary, and that
they intrust their funds to any but the postal
banks they do so at t;heir own risk and must take the con¬
sequences. No other term than “silly” is properly applic¬
able to the supposition that on the
opening of the postal
savings banks all savings deposit will be transferred to
them, and all future savings carried to them. The savings
banks of the country, both mutual and
capitalized, as well
as those commercial banks and trust
companies that have
received savings deposits, have
discharged their functions
in far too satisfactory a manner to either lose their de¬
posits or fail to receive further patronage.
Statistics gathered by the Comptroller of the
Currency as
of April 28, 1909, for the use of the
Monetary Commission,
being the most recent returns available, show the total sav¬
ings deposits in the United States to be roundly 4,926 mil¬
lions of dollars—figures less than a million are excluded.
Of this amount 3,507 millions are held
by the exclusive
mutual and stock savings banks, 576 millions
by loan and
trust companies, 451 millions
by State commercial banks,
376 millions by the National banks and 15 millions
by pri¬
vate bankers.
The deposits in the exclusive savings banks
may be 'dismissed from consideration as being amply
pro¬
tected, and there remain the 1,042 millions of savings de¬
posits in the State bank and trust companies, and the 376
millions in the National banks,
for which segregation is
asked. These figures are
something less than those gath¬
ered by our secretary, Mr.
Hanhart, about the same date,
but they are
sufficiently accurate for our purposes, though
it is proper to say that the
report of the Comptroller of
June 30 last shows
nearly 574 millions of savings deposits
in the national banks. How much of this amount
may be
interest-bearing certificates of deposit, payable at dates
if

certain, which we have elected not to consider in this con¬
nection, it is impossible to say. The National banks in
California report roundly ten millions of
savings deposits,

but for
be

reasons as

hereinafter stated these

are

believed to

largely time certificates.
With

definite statistics in

assumed that the

hand, it may yet be safely
great bulk of the so-called savings de¬

posits in the State and National commercial banks are held
by the country banks in localities where no exclusive
savings
banks exist, and these
deposits have proved a most

potent

factor in the

development of the industries of the respec¬
tive communities in which
they were accumulated. Their
further accumulation should be
encouraged and there should
be legislation
regarding them to protect the depositor and

also the banker who receives them.

Segregation of savings deposits in the State banks of
through the Banking Act passed

California has been effected

by the Legislature of 1909.

It divides the banks into three

classes—commercial, savings and
are

termed

than

Department Banks.
one

for each class.
must not be

class of

trust—and creates what

banking, it

bank elects to conduct

must have

The assets of the

mingled.

department

respective departments
Each must keep its assets separate

and distinct for the benefit of the
creditors of that
ment. This law went into effect

depart¬

July 1, 1909.

The reports
made to the
Superintendent of Banks June 30 of this year,
after a twelve months’
experience with the law, show that

of the 491

State banks

(including 36 branches), 143 have
savings departments with department
aggregating 128 mil¬
lions of dollars. The 123
single class savings banks of the
State hold 204 millions of dollars of
deposits. Incidentally,
it may be stated, as an item of
interest, that of these sin¬
gle class savings banks, one only, but the
largest, holding
fifty-three millions of dollars of deposits, is a mutual bank.
The others are all
capitalized stock banks. The report to
the Comptroller of the
Currency, compiled as of the same
date, shows that of the 185 National banks in the
State,
46 hold
$9,954,000 of savings deposits. Further reference
to these will be made later
The earliest

on.

legislation in California relating
specifically
savings banks was adopted in 1862, and
being inspired

persons who were

that

forming a capitalized savings bank,
particularly contemplated banks of that character, of which
States.

time few, if any, existed in the
The restrictions as to investments

entire United
were

well de¬

vised, and all subsequent legislation has been calculated to
give abundant protection to depositors in savings banks.
In all the period of
apprehension and distrust which to¬
tally followed the San Franbisco disaster of 1906, and which
the universal panic of 1907 further
accentuated, no California savings bank defaulted to its
depositors. The most
noteworthy failure of that period in California was a San
Francisco miscellaneous
banking and trust institution
which, by offering an abnormally high rate of interest, had
attracted $4,200,000 of
savings deposits. In thp absence
of any restriction as to the investment of
these deposits,
they went into the common pot and with the funds of other
depositors were dissipated in transactions which, when
characterized as reckless and ill-considered, have received
the most charitable
expressions applicable. It was this dis¬
tressing occurence coupled with the failure of three similar
minor institutions which had also attracted
of savings
deposits, that
and introduced the

fornia.
Under

(

small line

inspired the existing legislation
segregation of savings deposits in Cali¬

our

present banking law the aggregate of the
paid-up capital, together with the surplus of a bank, must
equal ten per cent, of its deposit liabilities, and its de-:
posits must not be increased when this proportion of paidup capital and surplus is wanting; ten per cent, of net

earnings must each half year be added to the surplus until
it equals 25 per cent, of the
paid-up capital, but no savings
bank is required to have a
paid-up capital and surplus of
more

than

one

millions dollars.

These conditions

are

alike

applicable to the savings department of a department bank.
The investments legal for
savings banks are clearly defined
in the banking act and are based
largely on the provisions
in this respect of the New York
Savings Bank Law.
The assets of a department are held for the
repayment
of the depositors of that
department until all are paid;
any surplus then remaining is applicable to the other lia¬
bilities of the bank. By this
system it is believed that a
complete and satisfactory segregation of savings deposits
has been effected.

But however admirable the

proposition may appear that
receiving other classes of deposits, savings de¬
posits shall be segregated and their safety assured by in¬
vestment in securities of a prescribed
character, it would
be unfair to a proper consideration of the
subject if we
ignored the question whether in the liquidation of a bank
all the creditors,
meaning thereby the depositors, would
in

bank

not be entitled share alike in the distribution of the

and that

assets,

particular assets could be set aside to pay
certain depositors unless the
remaining assets were suffi¬
cient to pay all other depositors. This is a
question which,
so far as known to the
writer, has not yet been judicially
determined in any State where the
system of segregating
savings deposits exists. If the assets of an insolvent bank
must be distributed in the
proportion to all depositors,
then segregation is meaning less as
an additional protec¬
tion to the savings depositor,
except to the extent that it
injects a higher class of securities into the assets of the
bank, thereby raising the average value of the whole. In
answer to this it
may be suggested, cannot the contractual
right be relied upon to protect the depositor? When a
bank receives a deposit designated
as a savings deposit,
does it not contract with the
depositor to invest and hold
the deposit for his benefit in accordance with the law of
the State for the
protection of savings deposits?
Iteferring now to savings deposits in the National banks,
it will be
interesting to consider the position taken by our
Superintendent of Banks towards those in California hold¬
ing such deposits. In August of last year, shortly after
lie had taken up the duties of his
office, he addressed a
letter to each of the National
banks, callings their atten¬
tion to the provisions of the new law
relating to savings
deposits, and stating that he believed it to be his duty to
no

SAVINGS

BANK

bring under the provisions of the savings bank laws of the
State all institutions conducting or advertising as
savings
banks, or having savings departments, and directing any
such to immediately comply with the provisions of the
State Bank Act by applying to his office for a certicate to
do such business, and by otherwise
qualifying under the law
to conduct a
savings bank business. In support of his posi¬
tion he quoted an opinion obtained from an eminent
jurist
and coincided in by others, which is as follows:
“The question involves the all-important one of the re¬
lation between the State and Federal Government as well
as
a
construction of the National Bank Act.
National
banks are instruments designed to aid the Federal Govern¬
ment in an important branch of public service, and be¬

yond the point of aiding the Federal Government in the
manner and
by the exercise of the functions prescribed in
the act, Congress has not sought to
legislate and has not
limited the States from legislating upon affairs
bearing
on the business of
banking and which affairs can be best
administered upon by the States in their
sovereign ca¬
pacity; and while Congress, in the exercise of an undis¬
puted constitutional power to provide a necessary currency
for the whole country,
may secure the benefit of it to the
whole people by appropriate legislation in the creation of
National banks, yet those banks are none the less
private
corporations, organized under the general laws of Con¬
gress by individual stockholders, with their own capital for
private gain, and managed by officers, agents and employees
of their own selection, and
they constitute no part or branch
of the Federal Government, and whatever
public benefit
they contribute to the whole country in return for those
grants and privileges conferred upon them by Congress,
that benefit is of a general nature
arising from them by
their relation with the people through individual citizens
and they do not act as a direct representative of a State
as a
body politic in exercising any function. Being private
in their nature, and the profits or losses
resulting from
their business being not shared or participated in
by the
Government, the measure of their public benefit and the
scope of their instrumentality in aid of the Federal Gov¬
ernment, must find its authority in the National Banks Act,
and beyond the grant in that act National banks must ob¬
tain from State laws any privileges enjoyed which are not
within the National Bank Act.

“Therefore, if any law enacted by the Statq shall prohibit
National bank from transacting a savings bank business
without first complying with the law of the State, such pro¬

The

public schools of this country have not in general
teaching children the art and
habit of saving.
The example of France in that regard
with the resulting frugality, thrift and prosperity of its
people, raises the question whether it would not be proper
and profitable for the schools of this country to inaugurate
such instruction.
The tendency of American life is to
spend rather than to economize. This can be checked prob¬
ably only by a long system of education. Will not the
training that provides for the welfare of the family have
sufficient importance even when compared with the ordi¬
nary studies to warrant the making of some effort in this
direction? Is the home always able to give the necessary
training?
some

may

wise affects these banks

instruments of the

Federal Government, since every function that they perform
that in any way relates to a public service to the Federal
Government can be fully performed without engaging in
the business of a savings bank, and it is manifest that the
State can require of any National bank, when it gets be¬

yond the purposes for which Congress provides that they
may be instituted, and engage in a business that the State
in its sovereign capacity has deemed necessary to regulate,
that they must submit to this State regulation and be sub¬
ject to its control.
“I, therefore, am of the opinion as the commercial world
recognizes the distinction between a commercial bank and
a savings bank, and as that same distinction is
recognized
legislatively and judicially, that Congress had that distinc¬
tion in mind at the time of the passage of the law provid¬
ing for the creation of National banks, by the omission to
include in the scope of power granted to National banks
any provision relating to savings bank business, and its omis¬
sion so to do was intentional, leaving the bank subject to
State control if it gets beyond the limits granted to it by the
act of Congress, and that Section 49 of the Bank Act of
California, as approved March 1, 1909, applies with equal
force to a National bank as it does to a bank organized un¬
der the laws of the State of California.”

to my

answer

ment, I

inquiries at the State Banking Depart¬

told that the National banks in this State gen¬

erally have discontinued advertising savings departments
and receiving savings accounts, except in the form of
interest-bearing certificates of deposit which they have
the unquestioned right to issue.
This is the basis of the
opinion I have elsewhere expressed herein that the savings
deposits credited to the National banks in California by
the recent report of the Comptroller
represent largely, if
not entirely, interest-bearing certificates of
deposits.
It is not desirable, however, that the status of
savings
deposits in the National Banks should remain thus unde¬
termined.
Congress should recognize and legislate for
them, providing for their proper segregation and invest¬
ment.
With the deposits of a like character in the State
banks distributed throughout the
country, these savings
furnish the capital to plough and water the waste
places
of our vast domain.
Everything should be done to encour¬
age their further accumulation; nothing to drain them
away from the localities where accumulated.

Hawley, Treasurer Farmer & Mechanics’ Bank, Minneapolis, Minn.

undertaken the function of

While

hibition in

209

Savings System in the Public Schools.

By Newton F.

hesitate to add another subject to the pres¬

ent over-burdened curriculum of

SECTION,

our

schools, yet there

are

and

the

family, and to the prosperity of the community,
same time so proper
a part of a child’s educa¬
tion, that private enterprise in more than a hundred Ameri¬
can cities is already
undertaking the work, until such time,
if ever, as the public schools shall generally adopt it.
How this work was started and is being operated in the
public schools of Minneapolis may be of interest.
The Associated Charities of Minneapolis, about five years
ago, with the consent of the Board of Education of the city,
introduced into the public schools the stamp system for
saving. The Board of Education had been advised by the
city attorney that it did not have the legal right to estab¬
lish and maintain such a system, principally on the
ground
that the work was a banking and not an educational func¬
tion, and not permissible under the School Board’s charter.
and is at the

The Associated Charities

operated the system for about

many considerations in favor of such a course. The schools
bestow upon all, however poor or alien, not only teachers,

three years, and with one collector introduced it in about
a dozen grade
schools out of five times that number in that

buildings and books, but also supplies, playgrounds and
even food.
May it not be wise for the schools also to at¬
tempt to inculcate at least one habit pointing into other
directions, and which will tend to make self-sustaining men
and women out of more or less helpless children?

city. But the work became so great and the funds received
so
large that in 1908 the Association sought to be relieved
of a work which was somewhat alien to its own
primal
purpose. It requested that the work be taken over by the
Farmers & Mechanics Savings Bank of
Minneapolis, which
is a strictly mutual savings bank with over
fifty thousand
depositors. Such an institution being somewhat educational
in its purpose, such a work was,
therefore, not greatly for¬
eign to it. The Clearing House Association of the city

Instruction in thrift in order to

thriftlessness,
saving in order to meet the tendency to waste, in ac¬
cumulating slowly rather than in getting rich quickly, is
overcome

necessary, means so much to the benefit of the individual

210

BANKERS’

joined in the request.

Thereupon, in September, 1908, this

bank with the express
authority of the Board of Education,
took over the system and is now
operating it in about

forty-seven of the grade schools of the city, in which there
is

a school attendance of about
39,000 children.
The method under which it is operated is the

The

following:

bank

employs for its' work five bright, intelligent
and enthusiastic young women as collectors. They go to the
various schools

once

week, explain to the children, when

CONVENTION.
21,000 out of a total school population in the
47 grade schools of about 39,000, and the total amount
was

over

deposited during the year was over $39,000. Of the amount
withdrawn nearly one-half was taken out and put into
regular savings passbooks in this or some other savings
bank.
A few words

to results.

Two years

is too short a time
satisfactory test of a system involving so many indi¬
viduals. Already, however, the great educational value of
the plan seems apparent. Teachers and parents by the score
for

necessary, the system and its purpose, as well as the bene¬
fits of learning to save. These collectors receive the money

and by the hundreds commend it and volunteer many

specific

presented by the children.

cases,

showing benefits to their particular children.

Many

Not exceeding five dollars in

the aggregate is the amount received from any one child.
The collectors attach to a stamp card furnished by the
bank variously colored lithograph stamps equal in amount
to the money
to the child.

offered by the child and the card is returned
Accounts can be opened and money can be

withdrawn only upon the written request of the parent or
guardian of the child, and money can be withdrawn only by
the surrender of the stamps attached to the child’s card.
are

plainly printed

Rules

the card.

But little bookkeeping

is necessary.
Few cards are lost.
with the interest of preserving the

The child is impressed

upon

card and is thus taught
carefully safeguard at least one thing among its many
possessions.
No bonus or reward of any kind is offered for accounts.
No interest is paid until the account is transferred into a
regular passbook in some savings bank. No appeals are
made except those which are purely educational and which
suggest the right uses for which money is to be saved, and
those things which children naturally want to buy and,
to

therefore,

be induced to

their money for.

The col¬
lectors incite the children to earn money in the various
ways which appeal to children, such as selling papers, doing
odd jobs, raising flowers and vegetables, saving the allow¬
ances and money given to them as
presents, and money
which they usually spend for candy and entertainment.
The children are encouraged to save for the specific
thing
they want—for baseball, football and tennis outfits, sleds,
skates, canoes, books, presents to others and a hundred
concrete things. We trust to the tendency that in doing
these specific things the children will
unconsciously acquire
the saving habit and with it the strength of character to
resist, economize, to accumulate and to plan ahead.
A few statistics may be of interest. The number of chil¬
dren depositors when the bank took over the
system in
June, 1908, was 1,735; in June, 1910, the number was
12,728. The amount on deposit in June, 1908, was $2,025;
in June, 1910, $22,639.
The total number of children who
made deposits during the last school year of 1909-1910

can

save

dime and dollar is earned and saved where otherwise it
would not have been; but better
still—many a child learns
a

frugality and the habit of economy and saving. Seemingly
the effects well establish the benefit of the
system.
The expense of its operation is, of course,

greater than

interest

income that
lected—being about three to
any

tified

possibly

on two
which the trustees of

can come

one.

from the funds col¬

This expense can be jus¬

grounds:

First, the purpose for
savings bank give their
service is philanthropic and educational. In an institution
such as the bank in question, in which there are about
50,000 depositors in a city of about 300,000 inhabitants,
there is on the average one depositor for
every six men,
women and children in the
city. Such a bank in such a
city is really a public educational institution. It has not
been deemed improper, therefore, that the bank should lend
itself to some of the purposes to which the trustees in
founding and maintaining the bank' have devoted them¬
selves.

mutual

Then also, while it is not the custom of the bank

advertise, yet there can be no question but that this sys¬
tem which sends its literature in a form to be
prized and
safeguarded into nearly every home in the city will become
in time, if not at once, of value from
simply an advertis¬
ing standpoint.
small for
some

But whatever the

expense

large bank—much smaller in any

commercial banks of

may

be, it is
than

one year

greater deposits spend in a
advertising, and is amply justified in practice by
the benefit bestowed upon the great numbers of children
and the ultimate prosperity and character of the depositors
in the bank and of the community in general.
Whether it
is possible to trace back to the bank in dollars and cents
the comparatively small amounts which it spends on this
system may be difficult. But that the people of the Ameri¬
can city need education in thrift and
economy, and that
this system gives such an education to the children in the
most plastic time of life there can be no doubt, and in my
own
opinion the bank itself as well as the community will
profit by it.
month for

SAVINGS

SECTION.

BANK

211

Thrift.
By Rev. Robert J.

Thrift—it
or

phrase

itself

defines

better

than

“The condition of

can.

one

word

other

any

Burdette, of Pasadena, Cal.

who thrives,”

says

that

safety deposit of human knowledge, the Century Dic¬
tionary. That’s what I thought it was, but that isn’t just
all of it. * “Luck,” says the omniscient lexicon, trying
again, “fortune, success, prosperity.” Then it pauses for
breath and reflection. Learning that it has another guess
coming, it adds, “Frugality; economical management;
economy.” A long silence, and the silence of dissatisfaction
among the judges, and the dictionary makes a final and a
good shot at it—“good husbandry.”
Now, after all, what is thrift? Just thrift.

It is

old

English word, and, like most old words, has rustic associa¬
tions.
The word brings to one’s mental vision a clean
farm, not over-acred, but without a weed or mortgage on
it;

wife

farmer who has
with servants

to do his work and

men

the

house and leisure

farmer’s

afternoons

for

herself, in spite of all which the man does more work
than any two of his hired men and the woman does a lit¬
tle

than half the housework.

and reads it without

aloud; is

He takes the paper

spelling the words of two syllables

church member;

school trustee;

owns a

mysterious dividend-paying stock, which the neighbors
always mention in the plural; loans a little money on cut¬
throat security and compounds all the overdue interest; is
kind-hearted and slow spoken; forecloses a mortgage with
a smile and an encouraging
prophecy of better times just
for

the

mortgagor.

Pays

every

obligation

envelope; enough to patch
to provide for the “rainy
roof”; enough for the little holiday once in a while; enough
for a new book, and an evening at “the show”; enough
for the dreary days of sickness.
Enough to pay every bill when it is presented. Enough
to take up the note when it is due.
Enough to save a
man from becoming the unmitigated nuisance that is al¬
ways borrowing quarters and halves, knowing they are
obligations too small to justify a dun.
Enough to save the humiliation of walking home because
you haven’t the car fare.
Enough to enable you to fear¬
lessly meet the eye of the deacon as he comes down the
church aisle with the basket.

Enough to make you sure of finding the dime in the cor¬
of your pocket when you dive after it. Just enough
in the bank so that when your wife needs a little extra
money for little emergency demands in the household, she
ner

won’t

the

minute and to the penny,

to you

come

with the air of a woman who has made
or murder, and doesn’t care very

her mind to suicide

much which.
That makes

That’s thrift.

lit¬

tle

ahead

A little bit out of every pay
the leak in the roof; enough

the habit of thrift
much the

rich

man

on a salary, and
But he can acquire
salary, and that is

yet got rich

no man ever

thing

on a salary.
the smallest

wealth.
more—just enough to send the chil¬
dren to school; enough to teach the boy a good trade or
start him in the way of good business; enough to marry
the girls well and happily; enough to keep an extra loaf
“Just

same

little bit”

takes advantage of every holi¬
day and Sunday, and always waits for the change. Waits
till he gets it, too. But if the odd penny in the transaction
is coming your way, he hesitates and gazes at you with a
pathetic note of inquiry in his expectant eyes. If, with
half an eye on that penny yourself, you mumble over so
indistinctly, “0! that’s all right!” he fades out of the
scenery so swiftly and completely that you think you must
have dreamed you saw him standing there a minute ago.

table for a friend who
for the waning strength
and shortening hours of old age; enough to maintain the
little sinking fund of non-transferable debentures to meet
the last expenses on earth.
“Every little bit added to what you’ve got makes just
a little bit more.”
That’s all good.
It’s excellent. It’s

Never wronged any man out of a

sound

did him out of

dollar, and

no man ever

in the larder.
And

comes

a cup and a crust on the
out of his journey; enough

policy.

It’s

practical

wisdom.

thrift.

It’s

in an oldwallet, with more and tighter folds than a boaconstrictor, with which he wraps up his wad very rapidly
when he has received a payment, and unwraps it with the
deliberate motions of a man working by the day, when
he is getting out money to pay over to you.
When his

ought to learn it ourselves and teach it to our children.
good judgment, sensible foresight. Earn, save, lay
by enough to keep the wolf away from the door when
the hearse, with its sable plumes, halts to receive its
freight of nothingness. And then
?

wife wants

nickel.

Carries his money

fashioned

It is

You see, a man sort of hates to close his account and
name off the books of the bank of which he has

dollar for shoes for herself and the five chil¬

take his

dren, it takes him longer to unroll that wallet than it
did to unveil the Washington monument.
When he dies,

been for

which he does very

to die.

spected customer.

reluctantly, he leaves his family well
provided for. Well, that’s thrift.
The family then proceed to cut the thong off that wallet,
close up the leather and rip it up the back, preparatory to
giving a practical demonstration of spendthrift.
There is a vaudeville song which had great vogue a few
years ago, which embodies a most excellent philosophy of
thrift. Being a minister I had to learn it from my sons,
but they say I sing it very well, for a preacher.
The

ute ago

He hates to die.

refrain line

honest and honorable and re¬
Any man, thrifty or shiftless, dislikes

many years an

runs

like this:

For, in all God’s world, there is nothing quite
less

dead

man.

A minute ago

the grave in which he is interred.
a

was

the Honorable Dives Midas,

That is the

dest and most insignificant of all

A little tin

savings bank

the mantel for the baby; a
little iron one on his table in the boy’s room; a big vault
of chilled steel for father; a little corner in the bureau
drawer, where everybody else can get at it, for mother.
All good training in saving.
Lay by a little of it as it
comes

in.

sleeps,

nor

monetary value. The body has none. It hasn’t even the value
individuality. No wonder a thrifty man hates to die. A min¬

poleon Centerfire.

is the best school of the best thrift.

worth

The shroud and casket have

little bit more.”

philosophy of wordly prudence and thrift,
excellent^ so far as it goes. The savings bank

man was

which he is clothed, nor the casket in which he

erend Melchizedek

and it is

worth¬

fifty million dollars. Now, he is poorer than the poorest
pauper in the almshouse.
He doesn’t own the shroud in

“Every little bit added to what you’ve got makes just
a

that

been,” for

He used to be
he isn’t

even

little “i.”

the Very Rev¬

Boanerges,

or Major-General Julius Na¬
Now he isn’t anything. He is the sad¬

human things,

“has“The Late Mr. Soandso.”
a

speak of him as
somebody. He is less than nothing.

“he”

or.

nor

sever

“him,”

any more.

For

He is “it” with

his last connection with

the human

and classify him among things, taking away even his
personal pronoun. No wonder a thrifty man. who has been
somebody—anybody—in his day, hates to die.
race,

And he doesn’t have to die.

There’s

need of

thrifty

212

BANKERS’

forehanded
man

will

If,
“The

dying.
Only the thriftless perish.
If a
begins in time, the cultivation of a habit of thrift
he

saves

his money, he adds to his deposits in

Department of Mercy,”

beautifully described by
paper read before a previous
association; if, as he saves his wages, he

Mr. Edward M. Robinson in
session of this
saves

his

And

man

keep hime alive forever.
as

CONVENTION.

sympathy, his patience, his kindliness; if,

time he adds

every

little bit of his money

the

books

than the de¬

haven’t entered at all.”
man’s book of “givings-away”
the gate wider than Sunday with

than the other.

thousand transactions you
And holding the thrifty

little “red ink” reminders of

everlasting overdraft.

any

man, your book of Forgettery is an eternity out
balance with our book of Remembrance.
There’s a

agree,

“Why,
of

to what he has al¬
ready got, he adds a little bit to his generosity, his neigh¬
borly helpfulness, his unselfishness, his charity, he5!! have
just a little bit more every pay day.
Then when he appears at the little wicket in the big
pearly gate and says, “Well, here I am at last. There’s
one thing,
you can put off only so long”; St. Peter will
say, “Have you your deposit book?”
And the thrifty man will hand it over with an anxious
face, wondering if he is going to get one of those pleasant
a

won’t

positor’s book ever agrees with the cashier’s account down
here. And just as the man is growing nervous, the saint,
who has been
comparing the two books, with a smiling
face, will say:

hand, he will open
other, and say:
“Come in, man, come in, you’ve got a balance here you
one

the

can’t

spend in

million years.”

You see, down here we measure

by what he leaves.

thrifty man’s fortune
Up There, they count it by what he

gave away.
These are two
the other.

systems of thrift. One is just as thrifty
Only, one lasts a few million years longer
That’s all.

SAVINGS

Building and Loan Movement in the United States.

The

By James M. McKay,

Secretary of the Home Savings and Loan Company, of Youngstown, Ohio.

everywhere may be divided into

Financial institutions

great groups of classes known as the capitalized and
The capitalized institution is the one that is
familiarly and commonly known, especially to people west
of the Allegheny mountains.
It is a private corporation,
pure and simple, with a certain amount of permanent paid
up capital stock, which is owned and held as private prop¬
erty and which can pass from one owner to another only
by purchase and sale. Such an institution deals with the
general public by contract only, and the gains and losses
two

the mutual.

of its business inure to the benefit or the detriment of the

capital stock. To the capitalized class belong
private banks and national banks the country over, all
trust companies and all State banks that do a commer¬
cial business and also practically all of the State banks
that do a savings business in the Central and Western
of its

owners

all

States.

might fairly
semi-public corporation; that is to say,
in any community where such an institution exists any
citizen of the community may become a member of the in¬
stitution by complying with certain reasonable rules and
regulations, and while he is a member he receives his pro
rata share of the ultimate profits of the business, accord¬
ing to the amount of money he has invested. He may
likewise terminate his membership under certain other rea¬
sonable rules and regulations, receive his money back and
The mutual institution

be described

the other hand,

retire from the institution.

In the mutual group there are

the Mutual Savings
England States and the CoOperative Building and Loan Associations, which exist in
varying numbers in practically every State in the Union.
Building and Loan Associations had their origin in Eng¬
land about one hundred years ago.
The original associa¬
tion was nothing more nor less than a home-builders’ club,
where each man paid into the common treasury a certain
sum per month.
The aim was to secure enough mem¬
bers to make the monthly payments aggregate a sum suffi¬
but

two

sub-classes, and these

are

Banks of the Eastern and New

cient to build

modest home for

stance, if the club had
ber

into the treasury a total sum of

would be allotted to

one

member.

For in¬

hundred members and each mem¬

paid the equivalent of $10
one

per

month, it would bring

$1,000 monthly. This money

member after

another for the

of buying or building homes, and the society would
mortgage on the home so procured to secure the
future payments, each member continuing to pay until all
had been supplied with homes.
The object of the club
having thus been accomplished, the association would dis¬

purpose
take a

solve and
At
tions

cease

very

the

to exist.

early period in the history of these associa¬

idea

was

introduced.

means

these, the man who wanted to invest more money and
thereby be enabled to build a better home than his fellow
members, could be accommodated. Thus if the ordinary
fund to be allotted for building purposes was $1,000, a
member could, by doubling his payment, receive an ad¬
vancement of $2,000 and have his payments cease at the
same time as those of his fellow members.
Or by increas¬
ing his payments fifty per cent, he could receive $1,500
to build his house, and other sums in like manner, the
amount of money he could borrow from the society depend¬
ing on the number of shares subscribed for. The face value
of the shares would, of course, vary in different associa¬
tions.

In the Eastern

pert of the United States, especially
Pennsylvania, shares of the face value of $200 each have
always been the rule, while west of the Alleghenies $100
shares are common. In the matter of shares the Building

213

SECTION.

BANK

directly opposed to the Mutual
Savings Banks. These latter have no capital stock at all,
while in the former, as a rule, there is nothing but capi¬
tal stock, and the person who places his money in a Build¬
ing and Loan Association does so in the payment of one
or more of its shares of stock.
Whenever his payments,
together with his share of the profits, makes his stock
worth its face or par value, the shares are said to be
and Loan Associations are

matured.

nature of the organization
regularity of payment for a series of years must, in
some way, be secured, and in order to secure such regu¬
larity, a certain penalty was assessed against members
who became delinquent. These were called fines, and while
the original purpose was to secure regularity of payment,
it cannot be denied that in some instances, the power to
assess fines was abused and the penalty charged was out
of all proportion to the delinquency.
This feature some¬
times worked a hardship, and had a tendency to bring the
It will be

from the very

seen

that

associations
State of Ohio

into

disfavor

a case

certain

localities.

In the

involving the assessment of fines went

Supreme Court in 1875, and that court arbitrarily
imposed certain limitations on the fining power of the asso¬
ciations. At first this decision was regarded as adverse to
the interests of the associations, but now it is consid¬
ered one of the best things that ever happened to them.
As a result of it, the associations of Ohio were compelled
to adopt a more liberal policy, and this liberality proved to
be the means of attracting new members, until Ohio has
become one of the leading Building and Loan States of the
to the

Union.

The official records of the State show that the

amount of money

collected for fines is steadily decreasing,
having fallen from something like $80,000 in 1895 to about
$20,000 at the present time. It is believed that in time a
similar liberality will obtain in other States, and that fines
will gradually be eliminated from the Building and Loan
system. At the same time it cannot be denied that there
should be some special reward for the man or woman who
continues his payments with strict regularity through a
series of years.
It requires fortitude and self-denial to
carry on such payments, and these qualities should be re¬
warded; but this can probably be accomplished better by
adding an extra profit to the man who persists rather than
by withholding part of the profits from the

one

who does

not

persist.
early associations
determining who should first
the society.
Practically all
and would be willing to pay
In the

there were various modes of
have the right to borrow from
the members wanted to build
the customary rate of interest
for the funds, and there were always some who would be
willing to pay more, hence the method which finally ob¬
tained the most favor was to put the money up at auc¬
tion at the regular monthly meetings of the society and
let the one who would pay the most for the funds have the
use

of them.

The amount that any member bid in excess

legal interest

went into the

all the

was

called

common

premium, and

the premium

fund and inured to the benefit of

members, the legality of the premium has almost
universally been upheld by the courts. In theory, this was
a fair and reasonable way to determine who should take
precedence in the right to borrow, but it cannot be denied
that premiums, like fines, became the subject of abuse and
worked a hardship in many cases. The National associa¬
tions that exploited the country from fifteen to twenty
years ago, seized on the fines arid premiums as two import¬
ant features of their system and made them the means of
mulcting thousands of individuals throughout the country.

214

BANKERS’

Premiums, I am glad to say, are like fines, a vanishing
quantity. Referring again to the official records of Ohio,
we find that in 1895 and 1896 with
mortgage loans aggre¬
gating about $90,000,000, the associations collected over a
million dollars in premiums, while in 1909, with mortgage
loans of practically $140,000,000, the amount collected as
premiums, had fallen to about

hundred thousand dollars.

The time is not far distant when both fines and

premium
disappear entirely from the Building and Loan sys¬
tem. In principle, there is no reason why a Building and
Loan Association should charge either more or less for
its money than other money lending institutions are charg¬
ing in the same community at the same time.
The payment of interest on the money advanced for
home building, the premium bid by members over and
above the legal rate of interest, and the fines assessed
will

against delinquents constituted from the

very

first

hand¬

profit to these associations, hence, early in
history there were inducements to people to become
members, not only for the purpose of acquiring homes, but
also on account of the profits that accrued; and thus
arose
the two classes of members, depositors and bor¬
rowers, which still exist in every healthy, successful asso¬
ciation.
The introduction of the depositing member was
in no sense a departure from the original purpose of the
association, but was rather an additional means of securing
the same end, as the depositing member paid into the com¬
mon treasury the
same amount in proportion to his shares
that the would-be borrower paid, thus increasing the
some

source

their

amount of the funds to be allotted to home builders and

making it easier and speedier for them to get their homes.
The investing or depositing member has always been an im¬
portant factor in these associations,

and in

our

crowded

industrial communities

today the chief problem of many
associations is to attract enough of them to supply the
demand for loans. In order to attract depositing members
certain privileges are allowed in the way of withdrawal of
shares before they mature, but while the depositor is a
member he pays regularly on his shares.
In the

CONVENTION.
wait until the next series

pay back
opened. This was
not always convenient or advisable, and the permanent
plan allowed a person to become a member at any time
and take as many shares of stock as he would. Each mem¬
was

opened

dues from the time the last series

ber could thus mature his

he must

was

independently of
anybody else, and each borrower could likewise pay, off his
own debt in the same
way. Fines and premium were re¬
duced; more liberal provisions for withdrawals were made,
and members were permitted to retire at
any time, taking
their share of the net profits with them. The
liberality of
this plan appealed to the general
public, and it has super¬
seded the terminating and the serial plans almost entirely
in Ohio, and many of its features are
being adopted in
other States. It is still a battle royal whether the serial
own

plan is the better, and arguments on this
at practically every meeting of the United
States League of Local Building and Loan Associations.
It is worthy of note, however, that while
many associations
have changed from the serial to the
permanent plan, the
writer has yet to learn of one that has changed from the
permanent to the serial.
or

permanent

point

occur

In every

association, whether terminating, serial or per¬
manent, at certain stated intervals the profits of the busi¬
ness

are

aim to

ascertained.

In the older associations it

keep these profits in

was

the

fund until the time
society. Any losses that oc¬
curred were paid out of these accummulated profits, and
the payments of the members were continued until the
amount of such vlosses was made up to the society again.
At a later date, and largely for the purpose of accommo¬
dating withdrawing members, it became the custom to ap¬
portion the profits more or less fully among the members
as a dividend.
At first these dividends were usually de¬
a common

for final dissolution of the

clared annually, but now semi-annual dividends have become
the almost universal rule.
In the terminating societies, how¬

of the profits is still withheld until final dissolu¬
tion, in order to be safeguarded against loss. Likewise,
in most serial association, the profits of each series are
ever, a part

partly withheld until the series matures. In the perma¬
association, however, the society is secured against
loss by means of a reserve fund, which is now obligatory

early associations it will be seen that as soon
man was provided
with the funds to build his
home, the object of the club had been accomplished and

nent

the

the last

organization

was

ready to disband.

after the introduction of the
ciation

ran

the investors
rowers

from
cause

nated.

certain

course

In like

manner,

depositing member the asso¬
its affairs,

and then wound up

taking their shares in cash, while the bor¬
mortgages released and their homes freed
These were called terminating societies, be¬

had their

debt.
in

certain definite time their affairs

were

termi¬

often

found, however, that after the original
association was started that others in the community
wished to become members at a later date.
Originally, this
could not be done, and the only recourse was to form a
new association, but as this was cumbersome and
expen¬
sive, it was not long before associations were formed which
allowed members to join at certain stated intervals, these
intervals being sometimes a year apart, sometimes six
months and sometimes three months,
according to the
number of

was

members that could be secured.

These

were

associations, and each group of members

con¬

new

called serial

stituted a series. Each series was in reality a
terminating
association, having its loans and its shares distinct from
those of any other series. As the shares of each series ma¬
tured, the borrowers had their mortgages cancelled and the in¬
vesting members received the value of their shares in cash. The
serial association had many

advantages over the terminat¬
ing society; it became more of a feature of its community,
better methods of accounting were introduced and its offi¬
cers

became

experienced and, consequently,

more com¬

petent.

city of Dayton, Ohio, there
modification of the serial plan, which has since
become known as the Dayton or
permanent plan. In the
serial association the man who wanted to
join at any time
between the regular dates for
opening a series, must either

Each

association

required

lay

certain

percentage of its net profits each year for
this fund and the fund can be used for the payment of
losses only. In this particular the associations are in line
with the Mutual Savings Banks of New
England and the
a

East.
These

associations

form

important factor in the
savings business of the country. They not only afford an
opportunity for the saving of small sums at regular inter¬
vals, but they enforce the saving of such sums as far as
it

possible to do

some

From

modest beginning,
eighty years ago, their business has increased until
so.

very

according to the best information obtainable, their
resources aggregate
$850,000,000. Pennsylvania

now,

combined

heads the
the

list, both in the number of associations and in
of resources, with Ohio as a close second.

amount

Wherever there is

large class of wage-earners there is a
good field for these institutions. An investigation of cer¬
tain typical associations by the Department of Labor at
Washington, some eight years ago, developed the fact that
fully seventy per cent, of the membership is made up of
working people.
Hence, we find them not only in the
steel and iron mills of Pennsylvania, but also in the fac¬
tory towns of Massachusetts, the cotton spinning districts
of the South and the growing cities of the Great Northa

West.
In

enabling people to provide homes for themselves, these
are rendering a service at once
unique and in¬
valuable. There is nothing that gives the average man or
woman quite so much satisfaction as the possession of a
associations

About the year 1870 in the

appeared

States.

many

aside

few square

been

rods of Mother Earth.

considered

Anglo-Saxon

one

race,

but it

the

chief

seems

Land hunger has long
characteristics of the

to characterize the Italian,

SAVINGS
the Roumanian and the Slovak as well as the

Anglo-Saxon.

foreign immigrants are hungry for homes and will
great sacrifices to obtain one. Wage-earning people
are accustomed to pay rent, and it is not difficult for them
to add a few dollars to the monthly rental and apply it
on a home.
Loans are made by the associations up to about
two-thirds of the value of the property loaned upon and
such loans are usually repayable at the rate of one dollar
Our

make

month on each hundred dollars borrowed, with the
privilege to the borrower to pay more at any time. If
the borrower should sell his property the association will,
as a rule, accept payment of the balance due and release
the mortgage.
If he does not sell, his regular payments
will in time extinguish the debt. Paying a debt in instal¬
ments is like attacking an army in detail; you conquer

per

one

instalment after another until the whole debt is anni¬
On account of the

great amount of clerical work
never found favor with
banks and trust companies, but it does find favor with the
wage-earning public. As a rule, the borrowers pay more
than the required payments.
Our own association makes
a loan which allows the borrower ten years’ time in which
to pay his mortgage off, but the average duration of these
hilated.

involved, this form of loan has

loans with

is but little

The Mutual

than five years.

Savings Banks are managed by a board of
sometimes by a court, but more fre¬
quently by the board itself filling vacancies as they occur.
The Building and Loan Associations are managed by the
trustees, appointed

215

SECTION.

BANK

members

themselves, who convene at their annual meet¬

ing, choose their Board of Directors, listen to reports of the
officers and amend their own regulations when necessary.
In this way a certain amount of business training is had
which is not without its value.
It has long been recog¬

by social workers that one cannot directly help peo¬
ple upward.
All that can be done in such cases is to
provide a way in which people can help themselves.

nized

The writer

earning people
afforded

agency that furnishes to wageopportunity for self-help equal to that
well-regulated Building and Loan Associa¬

knows of

tion.

In their relation to banks these associations

have always

occupied a subordinate position. Where the permanent
plan prevails it is usually provided by the statute that
the funds of the association shall be deposited in some
bank or banks, to be checked out in such manner as may
be provided by law or by the regulations of the society.
Under the terminating and serial plans, whenever the asso¬
ciation dissolves or a series matures the depositing membehs receive a considerable amount of cash, which is ready
for investment through regular banking channels. I would,
therefore, bespeak from the American Bankers’ Association
your kindly consideration of these associations, partly on
account of the business which they produce for the banks
themselves, but mainly on account of the service which
they render in providing American homes for American
citizens.

Committee Reports— Savings Bank Section.
Annual Report of the Executive Committee.
To the President and Members of
the Savings Bank Section:
A
of

meeting of the Executive Committee

the American

Bankers’ Association

of the

Savings Bank Section

held

was

Chicago, Ill., Sep¬
16, 1909, immediately following the adjournment of the Con¬
vention.
There were present:
Messrs. Creer,
Robinson, Johnston,
Ravenscroft, Teter, Johnson and Hanhart. Mr. Alfred L. Aiken, of
Worcester, Mass., was elected Chairman for the ensuing year. In the

William

voted to ask from

was

$7,500 toward the
and

that

voted

was

the Executive Council

of the

expenses

Section

during the ensuing

mittee be authorized

The

total

Expenses,

appropriations made during the

total expenditures were

1909

the

$234.00
723.00
144.55

54.00
556.96

3,151.74
105.42
97.40

Expenses,

Executive Committee
Book of Proceedings
(Convention,
Rent (Paid to General Secretary)
General
Postage

meeting of the Executive Committee was held May 2,
City, N. J. There were present: Messrs. Aiken
(Chairman), Creer, Robinson, Hass, Wood, Johnston, Ravenscroft,
Henschen, Remmel, Stephenson, Latimer, Johnson and
Secretary Han¬
Atlantic

763.80

1909)

1,410.28
468.64
36.00

Sundries

38.50

hart.

It was voted to hold the next Convention
at Los Angeles, Cal., the
time and date to be fixed by the Executive
Council of the Association.

The reports of

Secretary and the

various committees

read and

were

duly filed.
It

voted

wTas

appropriation

$3,500

toward

the

expenses

the

additional

Postal

Savings

Bank Committee.
It

voted that

was

accounts

the

pointed such
There

was

the

Secretary.

the

matter

cision

matter

the
and

taken up

was

full discussion

voted

was

with

that the matter be

request

that

Segregation of
referred to the

Committee be

appointed

report at the Convention at Los Angeles.
at the meeting of the Council, but no de¬

reached at the time.

was

After

Committee to audit the
Byron Latimer was thereupon ap¬

the

various Committee

reports the meet¬

ing adjourned subject to call.
The third meeting of the Committee
3d inst.

This leaves

held at Los

was

Angeles

the

Expenses

$9,034.29

net balance

$965.75, which will

revert back

to the

general Association.
usual,

all vouchers

duly audited by the Chairman of the
special committee appointed at the May
meeting of the Executive Committee has audited all the financial ac¬
Executive Committee,
counts of the

extended discussion upon the matter of

Council

consider

The

Mr.

appoint

Committee.

Savings Deposits and it
Executive

Chairman

Total

from the Executive Council

request

follows:

1,250.00

Printing and Stationery
Expenses, Vice-President’s
Expenses, Law Committee..
Expenses, Postal Savings Bank Committee
Expenses, Membership Committee...
Expenses, Auditing Committee

second

the

$10,000, and the

Secretary’s Allowance
Stenography and Typewriting

Committee of the National Association of
Supervisors of State Banks
to be present at the next meeting of the Law
Committee.
No other business having been
presented, the meeting adjourned, sub¬
ject to call.

1910,

finances,

our

amounted to

Convention

Savings Bank Law Com¬
invite, not exceeding five, members from the

direction.

same

regards

year

appropriation be asked for later.

Chairman

the membership, and I would recommend that such Com¬
continued, or another one appointed, to continue working

in the

year,

additional

the

that

increase

mittee

appropriation of

necessary

by our Association. The Membership Committee has done
good work this year in assisting your officers in their endeavors

very

Mr.

Aiken, Mr. Robinson acted as temporary chairman.
Hanhart, of New York, was unanimously re-elected
Secretary for the ensuing year with an allowance of $1,500.
Mr.

offered

tember

absence of

We should have at least 2,000 members and could
easily reach
that figure if every member would endeavor to
bring in some ^friendly
neighbor bank who has not yet wakened up to the great advantages

The

book

were

and

Secretary.

Printed Forms has sold fairly
The total sales up to date amount to
$7,704.10;

$6,196.73, leaving

net balance of

and at least

$1,507.37.

Some expense, however,
have but very few books left,
hundred books must be kept ready to meet the continued

will have to be incurred

demand

well during the year.
the total cost has been

shortly,

for this excellent work.

Since the removal of the office of the Section

to the headquarters of
everything has moved very
smoothly and all our wants and requests have been promptly, pleas¬
antly and satisfactorily met by Colonel Farnsworth, the efficient
General Secretary of the Association.
the

Association

No.

Pine

Street,

Very respectfully,

‘
.

accordance

asked

for

with

the

votes of

Executive

$2,500 (instead of $3,500)
and

the

ported

to wrhich

uses

you

audited by Mr.
Your

Council,

granted.

were

Secretary.

The finances of the Section

appropriations
Secretary, whose

put will be fully re¬
have been duly

were

Report of Postal Savings Bank Committee.

accounts

By LUCIUS TETER,

voted.

specially called

Committee, reports of which will

your

WILLIAM HANHART,

Committee appropriations were
and one of $7,500 and one of

these

your

Latimer

attention

the

conscientious

activities of

be made to you in

due

course.

accordance

September,

with

1909,

The attendance at Committee meetings has
been

this

Committee

Chairman.

was

the

Chicago

continued

Convention

without

change

membership.

and excellent results have been
accomplished
tion being due to the Postal

decision

your

large and enthusiastic
by them, special recogni¬

Savings Bank Committee

ings

Bank

upon

them during the past year.

Law

mittee

was

Postal

Committee

Savings

mittee’s

because

the

The

Sav¬

The work of the first named Com¬

highest order and the enactment into
Bank bill was not from any failure on

part in placing
of

the

extraordinary labors put

the

before the public
affecting the proposed legislation.

facts

and

the

economic

law

and

Com¬

your

business

General conferences in reference to the work
the Committee

were

during the Chicago Convention,

ing of the Committee

held

was

November 15,

held

and

by members

1909,

formal

meet¬

in New

York.

There were present at this meeting Messrs.
Herrick, Sprague, Morison,
Latimer, Creer, Robinson, Secretary Hanhart and the Chairman.
It was decided that the plan of general
publicity, including circular
letters
the

bankers

country

and

during

addresses

the

year

1909

Bankers’
had

Conventions

covered

that

throughout

particular

field

Savings Bank Law Committee, looking toward a
greater uniformity of laws governing savings
deposits, speaks for
Itself in the remarkably complete and clear
comparison of the laws of
the various States governing such
deposits compiled by them under the

quite thoroughly. The information which we had concerning possible
postal savings bank legislation led us to feel that the educational

admirable

work

upon

were

work

the

direction of

is but proper

special

notice

Section.

the

Chairman.

that there should be embodied in this
report some
the labors and activities of the
Secretary of the

has

been untiring in his devotion to
and interest
activities, and the Section owes no little of its present success
untiring industry in its behalf.

its

to his

ALFRED

AIKEN,

Chairman.

October 6,

the

President

and

Members

the

Savings

Bank

Section

the

American Bankers’ Association:
The

ing

tional

membership
1,773,

of
as

our

Section

against 1,636

net increase of 137 members,

New

the
the

which

first

increase

September

last

date last year, show¬
increase is as follows:

same

members

Lost by merger,
Net

work

Committee

192

failures and non-payment of dues

137

very

largely by your Com¬
by hard personal

supplemented

the

several

would

furnish

communities.

material

for

was

also

decided

that

this

work, including peti¬
tion forms for the securing of names in
opposition to postal savings
bank legislation.
The Chairman and Secretary of the Committee were
appointed a sub-committee to handle the details in this matter.
The
worked

continuously on this matter and on December
a trip to Chicago for a conference
with your
Chairman regarding all of the literature to be sent out
by Committee.
As

were

amounted to

carried

have

the

15th Mr. Hanhart

1910.

been

would

be. defeated.

sub-committee

Report of the Secretary.

had

heretofore

part of individual bankers if the proposed legislation
The Committee decided, therefore, that the
situation should be explained to all bankers, and that each
one should
be urged to devote as much time as
possible in carrying on the educa¬
the

Respectfully submttted,

which

campaign
mittee

result
sent to

House

made

this

conference,

Members of

Associations,

approxima