Full text of Commercial and Financial Chronicle : October 26, 1901 : Bankers' and Trust Supplement, Vol. 73, No. 1896

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BANKERS'anTTRUST
SUPPLEMENT
TO THE

ommercial &

f inancial C hronicle.

CONTAINING REPORT OF THE

CONVENTION OF AMERICAN BANKERS' ASSOCIATION
AT MILWAUKEE; OCTOBER

J5th,

J6th

and

J7th,

i90U

GENERAL INDEX:
Paqb.

EDITORIAL ARTICLESMR. STICKNEY ON BANKING
MR. GAGE AND MR. ECKELS
THE BUSINESS SITUATION
WORK OF ASSOCIATION
iROWTH OF N. Y. TRUST CO'S
TRUST COMPANY SECTION

33
36
38
40
42
44

BANKING SECTIONDEFECTS OF TREASURY SYSTEM
MEDIUM OF EXCHANGE & B'K'G
ASSETS CURRENCY
FUTURE OF PACIFIC COAST
FEDERAL BANKRUPT LAW
ADDRESSES OF WELCOME
REPORT OF PROCEEDINGS
PRES. TROWBRIDGE'S ADDRESS
REPORT OF SECRETARY
REPORT OF TREASURER
REPORT AUDITING COMMITTEE

47
50
55
58
61
64
64
65
60
66
67

For Index

WILLIAM

Page.

BANKING SECTIONREPORT EXECUTIVE COUNCIL
PROTECTIVE COMMITTEE
REPORT ON INTERN. REV. TAX
FIDELITY INSURANCE
COMMITTEE ON EDUCATION
EXPRESS COMPANY TAXATION
COMMITTEE ON UNIFORM LAWS
TKUST COMPANY SECTIONFOREIGN TRUST COMPANIES
FIDUCIARIES OUTSIDE STATE
TRUST COMPANY FORMS
DETAILED PROCEEDINGS
ADDRESS OF WELCOME
REPLY TO ADDRESS OF WELCOME
REPORT OF SECRETARY
REPORT OF EXECUTIVE COMMITTEE

to Advertisements, see

67
69
71
72
75
80
83

100
104
105
107
107

107
107
108

page 46.

DANA COMPANY, PUBLISHERS.

PINE STREET, corner PEARL STREET,
[Bntered according to Act of Congress in the year

1901.

by William

NEW

YORK.

Daw a Compact, in office of Librarian of Congress, Washington,

D.C.]

GIRARD TRUST COMPANY
CHARTERED

1S36.

CAPITAL, $2,000,000.

SURPLUS, $5,000,000.

Acts as Trustee of Corporation Mortgages,
Registrar and Transfer Agent

Assumes Entire Charge

of Real Estate.

Interest Allowed on Individual

Acis as Executor, Administrator, Trustee,

Assignee and Receiver.
Depositary under Plans of Reorganization.

and Corpo-

Financial Agent for Individuals or

ration Accounts.

Corporations.

Safes to Rent in Burglar-Proof Vaults.

WM. NEWBOLD ELY, First
CHARLES JAMES RHOADS,

NATHANIAL

OFFICERS.
EFFINGHAM B. MORRIS, President.
Vice-President.
ALBERT ATLEE JACKSON,
Treasurer.

WILLIAM
B.

CRENSHAW,

EDW. SYDENHAM PAGE,
AUMONT, Trust Officer.

MINTURN T. WRIGHT,
GEORGE TUCKER BISPHAM, Solicitor.

Real Estate

Second Vice President.

Secretary.

Ass't Real Estate Officer.

Officer.

MANAGERS.
EFFINGHAM B MORRIS.
JOHN A. BROWN, Jr.
BENJAMIN W. RICHARDS.
JOHN B. GARRETT.
WILLIAM H. JENKS.
WILLIAM H. GAW.

FRANCIS I. GOWEN.
GEO. H. McFADDEN.
HENRY TATNALL.
ISAAC H. CLOTHIER.
PEMBERTON S. HUTCHINSON.
THOS. DbWITT CUVLER.
C.

JAMES SPEYER.
RICHARD A. McCURDY.

GEORGE G. haVEN
AUGUSTUS D. JUILl IARD.
EDWARD J. BERWIND.
RANDAL MORGAN.

HARTMAN KUHN.

North East Corner Broad and Chestnut

PHILADELPHIA,

Streets,

PA.

Receives the Accounts

Banks, Bankers, Corporations, Merchants, Firms and Individuals

And Pays
Acts as

TRUSTEE

for Street Railway,

2 % Interest Thereon.

BOND ISSUES and REGISTRAR of STOCK
Railroad and ALL other CORPORATONS.

STATEMENT OF CONDITION, SEPTEMBER 30th,

LIABILITIES.

RESOURCES.

Loans and Discounts
Bonds
Cash and Sight Exchange

rgoi.

$1,000,000.00

Capital Stock paid in
$8,812,986.37

930,350 00
6,607,022.96

Surplus Fund

Undivided

Profits

300,000.00

119,405 50

t4,93°.953-83

Deposits

*i6,35°>359-33

*i6,35°.359-33

OFFICERS.
EDWIN

POTTER,

G. B.

President

SHAW, Vice President.
JOY MORTON, Vice-President.
CHAPMAN, Cashier.
J. R.

JOHN JAY ABBOTT,
O. C.

Asst. Cashier.

DECKER,

FRANK

Asst. Cashier.

H. JONES,

BANK ORGANIZED JULY 29, 1889,
UNDER THE GENERAL BANKING ACT OF THE STATE OF

Secretary.

KOPF, Asst

ILLINOIS.

Secretary.

BANKERS'MdTRUST
SUPPLEMENT
TO THE

ommercial &

inancial

[Entered according to Act of Congress in the year 1901 by William B.

VOL.

NEW

73.

Cbe

Chronicle.

.ithln its scope.

The Chronicle comprises a number of Supplements, issued
periodically, and which form exceedingly valuable publications
in themselves.

The Investors' Supplement, issued quarterly, is furnished
without extra charge to every subscriber of the Chronicle.
The State and City Supplement, issued semi-annually, is
also furnished without extra charge to every subscriber of the

Washington, D. C]

in office of Librarian of Congress,

YORK, OCTOBER

The Commercial and Financial Chkonicle is a weekly
newspaper of 64 pages, published in time for the earliest mail
every Saturday morning, with the latest news by telegraph and
cable from its own correspondents relating to the various matters

Dana Company,

Q hronicle.

26,

NO. 1896.

1901

On the contrary, says
become parts of a whole.
Mr. Stickney, they are a mass of independent corporations, each of which is compelled by its very isolation, at a time of panic to prey upon every other,
scrambling to increase its cash reserve and reduce
virtually adopting in action David
its liabilities
Harum's version of the golden rule, " Do unto other
banks what you know they will do unto you, but do

—

The

fust."

result, of course, is

an industrial

aster requiring years for recovery.

These

The Quotation Supplement,

issued monthly, is likewise furnished without extra charge to every subscriber of the Chron-

and

preventable.

icle.

The Street Railway Supplement,

issued semi-annually, is
also furnished without extra charge to every annual subscriber
of the Commercial and Financial Chronicle.
Besides these Supplements, others are Issued from time to
like the present Bankers' and Trust Supplement.
Terms for the Chronicle, including all the Supplements, are
Ten Dollars within the United States and Thirteen Dollars

time

ought, perhaps, to say, for the guidance of

Mr. Stickney 's address, that the dewe have given
them in the opening portion of the speech, nor are
they collected in any single part of it in the form
we have gathered them but our statement, we be-

the reader of

ductions arrived at are not found as

;

(which includes postage) in Europe.

lieve, indicates substantially the defects in

WILLIAM

DANA COMPANY,

Pine

St.,

corner

Pearl

tional

PUBLISHERS,

St.,

Ntw

York.

bank law the address

have corrected.

we have

and seeks to

discloses

among

these

the deduction

stated, that

—

is,

complete index to the advertisements ap-

pearing in the present issue of the Bankers' and

Trust Supplement will be found on page

Chief

our na-

our national bank system produces what a bank system is devised to avert that

INDEX TO ADVERTISEMENTS.

catas-

trophies, the address claims, are unnecessary

Chronicle.

dis-

46.

creates panics instead of serving, as

should, to

mitigate and even arrest them.

Furthermore, according to his conception the source of this disturbing influence is found stated in the fact given above,
that our banks are a lot of individual repellant units
instead of a kind of social compact of interdependent

MR. STICK NEY

ON THE BANKING

The address

Mr. Stickney, President of the
Chicago Great Western Railway, on the " Medium of Exchange and the Banking Function,"
is a thoroughly interesting study.
His chief object
of

seems to have been to prove that panics,

not abso-

lutely preventable, can be materially mitigated

and that this situation added to the general
features of the law makes them in the struggle for
existence at any hour of danger absolutely hostile
and selfish in their methods. It also follows that
this condition is a forced development out of an
environment the enabling act has provided and not
a result of bank management.
Other than the foregoing Mr. Stickney does not

entities

FUNCTION.

and

;

contracted in their deranging influence by a prop-

state in detail the precise features of the existing

bank system.
He defined the ideal
bank system to be a scheme consisting of many parts
connected in such a manner as to create a chain of
mutual dependencies and supports.
The body of
American financial institutions, formed under the
National law, tested by this standard, falls very wide
of the mark that is, the system fails to conform to
the requirement the banks do not under that system

United States law which bring about the unfortunate result.
The author's study appears to be
rather to show what a bank system should be and

erly devised

;

do, leaving the reader in

respects the existing law

With

deficient

to infer in

and

what

unscientific.

that purpose in view he undertakes to prove

medium of exchange is not money per
but credit.
No man has money in the bank. A

first

se,

good part

that the

BANKERS' CONVENTION.

34
credit

on a bank lodger

not

money

—

simply

an evidence of the bank's indebtedness to merchants,
Money is seldom used
bankers, manufacturers, etc.
as a

medium

of exchange, except in petty transac-

But as a general

tions.

rule in all large transac-

medium

These
and
merchants
credits are obtained ^ i ) by the few
others who do not go into debt from those who have
previously created them; (2) by all others, through
tions credit

the

of exchange.

Analyzing the sources of legitimate credits
they are found to be the proceeds of buying for the
purpose of selling, and are extinguished by buying
for the purpose of consumption. Their creation thus
loans.

has reference to production, and their extinction to
consumption. It is obvious that such credits ex-

pand as production and commerce expand, and contract as production and commerce contract.
The conclusion follows as an inevitable sequence
that an increase of one and a half billion dollars
in the bank deposits since a given date is not evidence that the money in the country has increased,
but that the trade conditions have been so active

and are so promising that the public has added to
its indebtedness, which has in that amount been exIt is the general underchange for bank credits.
standing that the deposit comes first and then a loan
This is not so in the main the reverse is true. Mr.
Stickney illustrates the situation by an ordinary
transaction of a merchant borrowing $100,000 at
;

the bank.

This would increase the bank's deposits

$100,000, not before, but at the same instant the loan
was effected. It would not increase the money the

merchant or the bank had; neither of them would
have any more money nor any less by reason of the
loan the result would simply be a credit on the
bank's ledger " not a borrowing of money, but a
swapping* of credit." The borrower " may trans-

—

;

fer the indebtedness of the

banks by check, but

that case his check will be deposited in the

some other bank, and

same or

the proceeds of that $100,000

note will remain a part of the so-called deposits of
the banks, either in the original or in some other

bank, until

it is

finally

The foregoing

that "

redeemed."

a mere prelude to the statement

swapping credits
ern commercial bank.

" is the function of the

When

a bank

therefore

" fails continuously to exercise this function

to perform

its

part and

its

duty, and

mod-

fails

does incal-

culable mischief, because the normal value of products can be only maintained " by the banks carrying
these credits until the products are required for conrefusal by the banks to " swap credsumption.
" compels merchants to stop buying, which forces
its

hold stocks of goods to send them to the
auction room and anticipate the demand for consumption. Some who do this early may unload upon

those

who

those with less foresight, but passing credits from
one merchant to another does not reduce the volume of credits. " It only affects the individual merchant, and perhaps his individual bank, by trans
" I 'Ike the word
swapping,' because
• Mr. Stickney says
expresses my meaning, and even boys know what it meant.
The boys swap Jackknlvea and swap marbles. The banks swap
'

credits."

ferring the burdens to other merchants and other

banks.

But the

a large

way

attempts once commenced in

futile

force values lower

and lower,

until

some of the merchants and producers are ruined."
When that happens laborers are deprived of employment and their ability to consume is curtailed.

need hardly

relate, for

how

quent experience,

has been such a fre-

thereafter the circle of the

disabled goes on widening until a large portion of

wage

the

class

unemployed, and a large number

of merchants are ruined, a general collapse in val-

ues has occurred and numerous banks have failed

subsequent event

;

a general prostration of our in-

dustrial forces continued during several years while

liquidation
It is

thus

in progress.

made

evident that the requirement for

tiding over a commercial or financial disturbance

without precipitating a very disastrous panic

continuation by the banks of their credit granting
function.

found

Evidence that

this

can be safely done

the circumstance that

Bank

has been done.

England and the Scotch
They have on many
system of banks is cited.
occasions in modern times met and passed through
a formidable crisis, and yet have prevented a wide
" In the great panic of 1837-38 more than
collapse.

The

history of the

a thousand banks, practically all the banks in the

United States,

In England and Scotland

failed.

not a bank failed.

In 1856 nearly every bank in the

United States closed

its

doors and went out of busi-

There
and but few of them ever resumed.
was a great commercial crisis in Great Britain, but
Again,
not a bank in England or Scotland failed.
in 1873, many banks in the United States failed;
there were no bank failures in Great Britain, except
the City of Glasgow Bank, which had been pracIn the panics
ticing fraudulent methods for years.
of 1 890- 1 893, which are now fresh in memory, when
bank after bank failed in the United States and all
the banks in New York City suspended payments
and only certified their customers' checks, there was
And more,
not a bank failure in Great Britain.
there was not a day when any bank in Great Britain
ness,

refused to extend

its

usual credits without unusual

about a week in 1890, at the
time of the Barings failure, when they put the
restrictions, except for

brake on to the extent of raising the rate of interest
to six per cent."

The comparison the foregoing citations make
may be criticised, because conditions in the United
States, outside of our National Bank system, in the
important matter of the currency standard, puts the

bank systems of Great Britain and the United
States out of parallel in an essential particular.
That circumstance, it will be noticed, however, does
not take from the force of the facts given with reference to Great Britain and Scotland. Besides, Mr.
Stickney might have gone a little further and selected a much more recent illustration, from events
in the United States, which occurred after the country was free from the danger of silver monometalism, and from the distrust caused by the silver currency agitation. We refer to the panic which was

BANKERS' CONVENTION.
Northern Pacific corner, in May
last, when money immediately rose to 60 per cent,
and could not be procured even at that rate until a
syndicate was formed offering 20 million dollars
later, and on the same day, a
at the market price
private banker loaned 6 million dollars at 6 per cent.
Thus a few timely credits offered through individual

an incident

to the

;

action arrested the panic and averted a threatened

Another objection

disaster.

to citing the

European

banking situation as illustrative of the needs of this
eountry Mr. Stickney himself suggests and anHe says it may be claimed that the situaswers.
tion

different in a vast area of sparsely settled

In reply, he recalls

country, like the United States.
the

" that

fact

boundary

northern

our

along

from ocean to ocean, much more
than the United States. In Canada

" the

stand

bank

banks,"

situated

the

comwould

chief central city, with branches at the chief

bank
banks and of the nation there could be no contest for reserves at any
"
time of distrust, hence the " swapping of credits
centers;

mercial

the

since

central

reserve of the

carry the

would continue and the rottenness which was the
source of the derangement could be rooted out without causing a collapse of, and indeed in most cases
without affecting, general trade or general values to

any extent. Second, all the banks in this system would
be free to have or not to have branches an author-

—

which would enable it to extend to every small
and remote center of trade the superior advantages
that an institution of large capital can grant for supity

stretches a country

plying the needs of the people in obtaining credits,

sparsely settled

etc.,

same commercial conditions existed during the
last panic as in the United States, but only two unimportant banks, of the isolated and independent
order, went into liquidation, and not one of their
the

while removing the danger of having com-

modity and other values, as well as banking
ties,

facili-

contracted just because of overspeculation or

fraudulent disclosures in some other perhaps very
distant trade center.

Besides the foregoing the Sub-Treasuries would

system of banks excited suspicion as to its solvency,
and at no time during the panic did any of them

be abolished and our

suspend the banking function of swapping credits

ever threatening danger of having

with customers."

up in Government vaults a fear
which has time and time again kept business operations during the most active seasons of the year in a
state of more or less severe depression. Finally, restrictions on the size of loans would be removed,
the indefensible character of which is well brought
out by a little incident Mr. Stickney relates.
In
olden days of small affairs in banking business one

funds

only remains to give the outlines of the bank-

system for the United States which Mr. Stickney advocates, and which he thinks would work an
absolute cure from the weakness that he has shown
ins-

formed under our present

institutions

to legislation, he says
be required, except " the repeal of

in practice disclosed.

nothing would

statute have

the Sub-Treasury law and of

provisions con-

all

bank law which
any manner restrict the business of swapping credits and which prevent banks from conducting the
banking function in more than one locality." This
statement, in itself, might be considered a little obscure.
But other portions of the address serve to
make more explicit the summary of the changes
proposed. Evidently he would have the revision of
the law thorough in all particulars affecting the
So far as any uncerfunction he is discussing.
tainty remains on that point in the reader's mind the
following extract from the address will clear it up
tained in the present National

The commercial bank," he remarks,

a co-

worker with the merchant, and in the conduct of its
legitimate business of swapping credits should be
as free as the merchant."
terpret the above.

With

It is
it

not

and the

difficult to in-

special features

we have previously cited, the system suggested is revealed when we add that Mr. Stickney further proposes (1)

central

bank with a head

in the chief

and with a branch in each of the
other leading commercial centers;" and (2) that
commercial

" the central
all

city,

Bank

hold the reserve," not only

the banks," but also (the Sub-Treasuries being

abolished) " of the nation."

These
tion,

put into shape by proper legislawould give the United States, Mr. Stickney
ideas,

forming " a chain of

thinks, a system of banks,
mutual dependencies and supports,

present

isolated

thought

briefly.

entities."

First

and

Let
at

in place

us
the

fill

of the

out

head

this

would

of the

money market

its

supply of

—

locked

New York

banks, having increased

to the then exceptional
lars,

freed from the

a customer

made

amount of

its

capital

five million dol-

application for an unusually

After some days of consideration the

large loan.

directors declined

it,

not because the collateral was

unsatisfactory, but because the loan

was too

large.

The customer, when informed of the decision, remarked that in his opinion that bank needed either
an act of the Legislature reducing
capacity of

its

directors, or an act of

the capacity of

its

directors to the

capital to the

God

increasing

measure of

its

capital.

Thus stated we have a clearer view of the principle made active by means of Mr. Stickney's plan
and of the method by which it becomes possessed
of the faculty for keeping a trade derangement,

whenever and wherever it develops in the
organism, local and not only confining it
;

bringing

rower
upon.

also as speedily as

limits

its

may become

by giving

may

little

industrial
there, but

be within nar-

as possible to feed

nature such a derangement by neglect

epidemic and contagious, and hence re-

same treatment as any disease with those
characteristics.
Of course, Mr. Stickney disclaims
the expectation of preventing periods of undue
speculation followed by crises in which the immequires the

diate speculators are ruined.

does expect, and
if

the other hand, he

think he has demonstrated, that

the banks can be got into a shape which permits

of their continuing in a crisis the function of "swap-

ping

credits,"

the

crisis

stamped out within the

can

circle

restricted

where

and

has origi-

BANKERS' CONVENTION.

36
nated, and

other values and

all

other trades and

GAGE AND MR. ECKELS ON THE
TREASURY SYSTEM.

MR.

industries and labor will retain normal relations.

There

certainly no excuse

heedless speculation in

for permitting a

New York

industrial depression throughout the country.

private hanker
corner,

—

at the

not easy to get at that
cent,

that

If a

time of the Northern Pacific

when money was

ruling at 60 per cent, and

—could loan

millions at 6 per

and thereby stop the panic, a system of banks
becomes paralyzed at such crisis and utterly

unable to come to the help of the public obviously

needs to have

its

loaning function reconstructed.

Says Mr. Stickney if I were to mention classes
of property which have steady intrinsic value by
reason of a constant demand and requirement I
would name the homes which give shelter, and the

and manufacturing plants which produce
food and clothing, and the labor, the basis of all
wealth.
But it is notorious that these parts of
fabric had practically no market
industrial
our
value during the panic of 1893 and that every man
farms

who had

all

his savings invested in equities in such

properties and

was forced

was

realize

while the two million idle laborers

ruined,

who were

starv-

ing and in rags had the capacity to consume everything their labor would have produced
tains of industry
to

had been

The speeches on

be followed by

the cap-

in position to set

them

ury system, delivered at the Milwaukee Convention, possess considerably more importance than
such addresses usually do, because they undoubtedly

foreshadow at least some initial effort by Congress
to reform the evils pointed out.
There has been no
occasion, in

reaches New York

the draft

may
annum or

for rediscount

meet a current rate of two per cent, per
a quarter of one per cent, per day, or a refusal by
the banks to rediscount at any rate. On what terms
could the Manila banker reimburse himself by sellThe
ing to importers drafts on scared banks "
principal reason why Great Britain is the market
!

" because every

place of the world's

commerce

banker and merchant

knows within two or

three per cent, per

every quarter of the world

annum

the

exact value of a draft for rediscount in London."

There

one matter mentioned

in the

address

and made a part of Mr. Stickney's plan which we
would be slow to approve. We refer to the " Central

Bank

in the chief trade center, with branches

at other leading trade centers."

objections to that feature.

device

intended to

wise provided for

we have

already

fill

made

There are serious

Besides the office that

could,

desirable way.

when analysis, before
the weak points of the

years past,

the most strongly on the question of reform

felt

were usually the first to admit its impracticability.
This fundamental objection does not exist at the
present juncture; or

form of doubt as

exists

only in the

That
discussed
by
Congress seems to be hardly questioned, and this
is more than could have been said at any similar moment in this generation. What will be the result
matter

the

to the nature of the

will

of such discussion

remedy.

seriously

a matter of broader conjecture.

But taking the situation as it is nothing could be
more wise and proper than the frankness with which
Secretary Gage and ex-Comptroller Eckels have laid
the problem before the public.

Mr. Stickney
makes. He says very truly that the wares of commerce follow the drafts of commerce. You may subsidize ships to sail the seas, and build navies to carry
the flag to every continent and island, and yet you
never will control the commerce nor the wealth of
the world until you have a banking system which
can manage the exchanges of the world during commercial crises and maintain at all times a fairly
uniform rate of interest. Ask those statesmen who
seem to think that carrying the flag changes the
course of trade, " at what price a banker in Manila
will
buy time drafts on New York against
consignments as long as he knows that by the time

many

a bankers' convention, of
note issue and Sub-treasury system would not have
appeared a mere academic discussion. People who

work.
Finally, note a single other point

the currency and on the Treas-

wish to express

first

our approval of the

by Mr. Eckels to the possible influence of the proposed reforms. There is always
limitations set

more or

discussion of these questions, based

less

on the notion of a sort of financial Utopia attainable through remedial law.
We have had currency
statutes proposed which were to put an end to the
alternations of financial depression with financial exaltation,

and

which were to act as a positive
money market derangements. Such

preventive to

assumptions we cannot help regarding as not only

The reforms proposed

rash but mischievous.

do very much

to allay the violence of such shocks

as periodically visit the
will

will

money markets.

That they

almost wholly avert some irritating disturbances

which our markets now are subject may be pre-

dicted confidently, because, as in the case of use of

a public surplus, our

own

troubles do not exist at

countries where the proposed plan

all in

ation.

But no

fiscal

utes will reconstruct

in oper-

reforms and no remedial

human

nature.

stat-

In so far as

Mr. Eckels's words, " the
result in the first instance of undue extravagance
on the part of the Government or of the people," we
agree with him that no fiscal system and ho refinancial troubles are, in

medial legislation can wholly prevent the consequences.

advert to this phase of the question, because

we have no wish
than

to claim for

any measure more

But when

this is said the fact

can perform.

remains that the financial markets

in this

country

are subject to certain severe disturbances and strains

believe, be other-

which are wholly needless, and the endurance of

But

which, year after year, without an intelligent effort

this article so

long that

at relief, is

nothing

common

less

than discreditable to

Amer-

cannot enter upon that discussion on the present

ican

occasion.

of the legal tenders and to the continuance of the

sense.

refer to the keeping alive

—

)

BANKERS' CONVENTION.
present so-called Sub-treasury system, with both of

which

evils the speakers at

Secretary

Milwaukee

advance.

It practically

forced the hand of half-

a-dozen Secretaries of the Treasury to the adoption

dealt.

Gage handles

the Sub-treasury problem

He shows

exactly what this system

what was much worse, it induced the conservative
banking community to condone, if not directly to
encourage, extravagance in public appropriations
which had at any rate the merit of stopping a limit-

very adroitly.

of managing a public surplus has done and leaves it
to his hearers to say, as practical business men, ( i

whether the locking up of this money in the vaults
of the Treasury has not been a needless precaution
;

(2) whether

has not involved the sacrifice of a

very considerable income which the Government

might have enjoyed, and (3) whether it has not deprived the money market of resources to which it
had a right.
Mr. Gage answers each of these questions with
the directness and conclusiveness of an expert ac-

which were

expedients

less

really

wasteful

;

and

drain on the resources of the markets.

what extent the markets of this very autumn have
been threatened by the actions of this financial
Frankenstein,

Secretary
tion

known

well

Gage

offers the simple
" I

of the difficulty.

" that the public

to everybody.

moneys

and single solu-

believe," he concludes,

in excess of a reasonable

had been adopted during the three past decades not
a dollar would have been lost.
If the banks had

working balance for daily use should be deposited
That a simple and safe sysin the national banks.
tem of distribution of funds can be devised, I have
no doubt." Mr. Eckels, endorsing to the full this
suggestion by the Secretary, adds that he " would
like to see the complete abolishment of the SubThere
treasury system of the United States.

paid 2 per cent, interest on current accounts of this

never was any excuse for the establishment of that

Government would have been the richer by
thirty-two million dollars.
If the banks had in the
same period had the use of all these funds they
would have been enabled to increase legitimate

system, except a bare political necessity, and there

countant.

the

practice

depositing

public

moneys with banks of clearing house cities in proportion to each institution's capital and on the security of a prior lien on the assets of the depository

sort, the

credits extended to the

market by two hundred mil-

lion dollars.

The

truth of the matter

no possible reason why it should be continued.
It stands as a menace to the trade and commerce
of the people of the United States, because each
day takes out of the channels of trade and commerce much of the money of the country which
is

the Sub-treasury sys-

could be used legitimately for the purposes of trade

tem is an awkward and primitive makeshift, worthy
of Turkey or China as a measure of Government
practice and adopted in the first place only as a
refuge from a bank deposit system which the Government itself had at the time demoralized by the
most flagrant violation of all sound banking rules.
The system was in fact ridiculed at the time of its

and commerce, and locks it up there, in wasteful
idleness, a menace to business and a source of recurring danger to the financial interests of all the

earliest

The plan of

people."

Whether complete
device

abolition of the Sub-treasury

not practicable,

may

be a valid ques-

But we understand Mr. Eckels to mean, as
did Mr. Gage in the paragraph cited from his

tion.

a Government
and administer its own money was
twice voted down in Congress after President Van
Buren proposed it in 1837, it wa s finally adopted by
a narrow vote in 1840, repealed outright in 1841
and finally re-enacted in 1846, not because anybody
was particularly anxious for it, but because there

the petty cash, so to speak, of the

was absolutely nothing

would

agency

discussion.

to hold

re-establish a central

else to be done.

national

The

bill

bank had been

to
re-

speech, that the abolition policy should extend to

the entire system of keeping on

for six years carrying out the

in idleness

a great part of the country's circulating medium.

Provision for the deposit in the banks of

all

the

surplus outside of the necessary working balance

reality

Government-

be the abolishment of the Sub-

treasury system.

peatedly overthrown, and by virtue of necessity the

Government had been

hand

This cannot be effected under the present plan
of requiring

Government bonds as

collateral secur-

now

principles of the Sub-treasury Act, because there

ity.

was no other way

the Treasury to turn over customs revenues to de-

to handle the public moneys.
It
could hardly be expected that a measure adopted as
a result of such a situation would provide with much

foresight for the exigencies of the future.
Yet, as
a matter of fact, this is to all intents and purposes
the law under which the six or seven hundred million dollars

now

annually taken

and disbursed by

Government

the

We
this

is handled.
hardly need to dwell on the extent to which

method of

finance,

its

practical operation,

has been a nuisance and a menace to the markets.
It has had the anomalous result of making the
Treasury a danger to the financial situation in exact
proportion as national prosperity increased, and
with it national revenues. It was a factor whose
disturbing- influence

could not even be measured

In the

positaries,

first place,

this

the law does not

rule being a relic of the days of

depreciated paper currency,
port taxes

permit

was required

when payment of imIt is now very
specie.

nearly twenty-three years since this discrimination

became completely needless yet the exception of
customs revenue from the bank deposit funds continues.
This is a fair sample of the whole obsolete
;

outfit of fiscal

machinery.

Moreover reform of the system cannot well occur
under present statutes, because of the bond deposit
proviso.

The law

declares that " the Secretary of

the Treasury shall require the associations [national

banks] thus designated to give satisfactory security

by the deposit of United States bonds and otherwise."
There has been some debate as to whether

BANKERS' CONVENTION.

under

Secretary might not claim the power,

the

most or

this act, to accept other securities for

all

But the question is immaterial
under present conditions; no Secretary, unless explicitly empowered, is at all likely to strain the interpretation of the law in favor of such enlargement.
The very least, it seems to us, that Congress can do,
of this collateral.

to authorize distinctly the acceptance of other than

and

security for such deposits,

I nited States hond
the inclusion of customs revenue

The reasons

posited.

in the

funds de-

for this extension of col-

lateral are perfectly manifest.

anomalies of the situation

one of the many
with the supply of

It is

that,

outstanding Government bonds necessarily limited,
banks are often unable to accept such public de-

moments when
and when the Treasury

the market needs the

posits at

money

anxious to provide

it.

bond rethe market as com-

that the United States

is another anomaly
quirement brings the banks into

petitors against the

Treasury

itself in its

redemption

trade, will naturally furnish the basis of opinions as

to the near future, always subject, however, to
ifications

wrought by unforeseen

The Treasury

statistics

mod-

conditions.

of foreign trade for the

year ending June 30th present another re-

fiscal

markable showing in our favor. The exports of
merchandise show an excess of $664,900,011 over
the imports

—the largest yet reported.

amount of gain

to the

in the

Adding

this

four preceding years

and we have an aggregate excess

round num-

bers of over $2,621,000,000 in the five fiscal years,

1897 to 1901 inclusive.

These interesting statistics, subjected -to analysis,
seem to prove that while the manufacturing industries and mineral products of the country have been
favored in the foreign demand, the agricul-

less

tural interest has profited

by the short crops of Eu-

rope more than enough to compensate for the re-

The

duction in mining and manufacturing exports.

home demand

has, meanwhile, been active

and

in-

operations, thus

creasing, and probably sufficient to neutralize the

ceptionally

decrease in these particular products.

making sinking-fund purchases excostly at the hour when they are heaviest.

The whole

judged by

position,

tangible results,

its

trust

that

Mr. Gage's discussion of

this

question, as well as of the general question of cur-

with the greatest care.

Neither topic

can be avoided by the Congress which meets six

weeks from now.

THE BUSINESS SITUATION.

is,

O. D. Ashley, Chairman

Wabash

Railroad

forecast of the business future of the country

many

respects, similar to the predictions of

the weather bureau, which, although founded

upon

meteorological conditions at the time, are often neutralized

by sudden and unexpected changes in the
and yet the probabilities are always

trouble.

With

but without

ble,

its

which encourage the expectation of another record
breaking year in the business conditions of the country, disquieting events at home and abroad cannot

avoided.

make no pretension
able to

all

business

Hence

ignored with safety, but should be carefully

weighed and examined in order to determine their
immediate or ultimate bearing upon the present and
their possible influence upon the near future. Early
in the year it became known that the Great Northern and Northern Pacific Railway Companies had
acquired joint control of the Chicago, Burlington

& Quincy

system by purchase of a majority of

its

is falli-

the par value of their stock, or four per cent, on a

foresight

dinary precautions and be liable to errors which
possibly be

these evidences of national prosperity,

should neglect or-

Human

exercise

all

This was followed by a deal with the C, B.
& Q., under which the two companies guaranteed
to the stockholders of the latter eight per cent, on

air currents,

worthy of consideration.

which were probably affected by the Chinese

cloths,

events,

there are no indications of a serious interruption of

rency reform and extinction of the legal tenders,
will be read

all

industrial prosperity, except, perhaps, in printing

has almost the air of opera-bouffe finance.

these

yearlv

to foresight which

men who study

may

papers

not avail-

the trade cur-

and the financial events of the time, and claim
no exemption from the common liability to error.
It was patent to impartial observers, for example,
rents

before the Presidential election of 1900, that success to the party which advocated the adoption of

stock.

valuation of $200 per share.
cent,
cific

issue of four per

bonds by the Great Northern and Northern Pacompleted this arrangement and secured full

control of the

May

Q. stock.

In the month of

following Wall Street was startled by an ur-

gent demand for Northern Pacific stock, and

became

evident that control of this

claimed by two parties

soon

company was

one representing the Great

of prophetic utterances, but the quick response to

Northern and Northern Pacific directors, and the
other the Union Pacific, the object of the latter company being, apparently, the acquisition of an influence which would prevent the use of the C, B. &
Q. system by its Northern rivals to the prejudice or

the favorable verdict of the people, in the renewal

disadvantage of the Union Pacific.

and continuance of industrial activity, after a significant pause, proved the importance of the decision
and the necessity of the warning. The removal of
this dangerous proposition from the arena of poli-

this

the silver basis

would have completely neutralized

the prosperous business conditions of the country.

The

notes of alarm then sounded were in the nature

should be highly gratifying to the business community.
tics

outline review of events during the year,

which exert an influence

in the field

of finance and

The

result of

buying competition was an abnormal, not to say
absurd, advance in the market price of Northern
Pacific stock, and, accidentally, a close corner which
threatened the unfortunate " shorts " with financial
ruin.

The

effect of this startling exposition

temporary panic
prices of

many

from ten to

at the

Stock Exchange, which sent

of the leading stocks rattling

fifty

was a

down

per cent, in twenty-four hours.

BANKERS' CONVENTION.
Brief and unwarranted as this disturbance proved to
be,
in

was a

striking illustration of the

weak

points

the speculative market, and although the recovery

was

quite as rapid as the decline

required prompt

and powerful influence from the magnates of finance

The

to avert serious consequences.

incident re-

magnitude conducted in secret in the consummation of far
reaching schemes and a counteracting movement.
Quickly following this exciting episode in the stock
market came the issue of a large block of four per
cent, convertible bonds by the Union Pacific, partly
in payment for Southern Pacific stock, the control of
which had been acquired by the former, and partly,
it is assumed, to cover the purchases of Northern
vealed, prematurely, transactions of unusual

can Sheet Steel Companies, brought

all

of these im-

portant industries under one corporate management.

The magnitude of

this transaction naturally aston-

ished the business community, while the boldness of
its

conception and the immediate success of the

scheme have caused surprise, as well as admiration
of the broad intelligence displayed in its execution.
The underlying principle which governs this
combination of industrial works is the same as that

came with bewildering effect
The formation and quick execu-

which is bringing the transportation lines into harmonious relations. During the strike which followed under the direction of the Amalgamated Association, it has become evident that the single control of the United States Steel Company has been
of great advantage in meeting the combination of
workmen by united action on the part of the employInstead of divided councils and indecision, the
ers.
Steel Company have been able to meet the emergency promptly and intelligently. If the strike had

tion of such gigantic plans, without preliminary no-

occurred while the Steel Companies were under sep-

Pacific stock.

These bold measures carried out by the powerful
syndicates in control

upon Wall
tice,

Street.

caused astonishment, but no unfavorable

criti-

arate

management the

situation

might have become

satis-

complicated by the possible concessions to unreasonable demands by some of the companies but the

too early to form

policy adopted to govern the whole has baffled the

any trustworthy opinion as to the wisdom of these
important movements, but the inference is that the

A strong
schemes of the Shaffer amalgamation.
side has
the
one
combination of working forces on
been met by an equally strong combination of employers on the other, and as no actual grievance ex-

cisms followed, and the presumption

that the as-

surance of good profits in the transactions has
fied all parties interested.

It is

interest " policy,

adopted by many
of the leading railway companies, meets thus far
with tacit approval. Its extension to other large

"community of

systems

will, in the ratio

of control obtained, dimin-

which

ish the rate cutting evil,

trouble

railway transportation

the most serious

heretofore

en-

countered.

;

isted

doubtful.

control

of competing lines

The poor workingmen who have been

misled will be the principal sufferers.
Nearly all of the industrial companies, originally

The permanent

the result of such a struggle could not be

organized as

Trusts," have become incorpo-

rated under general State laws, and are

although

lar corporations,

and maintenance of schedule rates are
concerned, and to that extent it is a substantial advantage.
The same combination of interests can
easily cause the adoption of measures for the more

current references to such concerns.

the regulation

regu-

called " Trusts " in

practically equivalent to a consolidation, so far as

still

now

Agitation in

the field of politics against such combinations will

probably suggest hostile legislation on the part of
Congress at the coming session but except in the
;

economical administration of all the lines within the
sphere of influence. A very large amount may thus

way of supervision and regulation it is not easy to
see how Congress can interfere with State corpora-

be saved in the condensation of expensive offices and
agencies, and in various ways the machinery of

tions legally authorized, even

transportation can be simplified and regulated.

velop the resources of this country than

such results can be obtained under the policy indicated, the gain to the railway

companies involved

and satisfactory. Whether the
which may accomplish this object
has been too great or not is a question which time

will be substantial

ence desirable.

were such interferCorporations have done more to de-

They have

all

other

our railways,
opened our mines and stimulated manufacturing
industry.
What individual effort could never have
influences combined.

built

cost of a control

accomplished has been wrought by corporations in
an incredibly short space of time. The only nov-

only can decide.

elty in these industrial corporations is in the

This

first

year of the

new century promises

to be

tude of the combinations, and in the concentration

a record breaker in the development of colossal

of the controlling power.

schemes

rection

in the

domain of industry and

well as in transportation.

finance, as

The organization

of the

United States Steel Company, with a stock capitalization of $1,100,000,000, and a debt of $304,000,000, representing together a liability of

$1,400,000,000,

more than

the largest capitalization ever as-

sumed by a corporation in
world. With its five per

this country, if

not in the

bonds the company
secured control of the Carnegie works, and with the
stock, exchanged for that of the Federal and National Tube, American Steel & Wire, the American
Tin Plate, the American Steel Hoop and the Americent,

magni-

may

The movement

be called world wide

;

in this di-

has been high-

a rule, in Great Britain and in Germany and the reaction now progressing in the latter country is probably due partly to the error of excessive capitalization and partly to the competition
ly successful, as
;

of the United States.

Progressive intelligence ap-

proves the policy of union in control for the mutual benefit of the associated companies, and, thus

consumers have been the gainers in cheaper and
probably better products. If any measures can be
devised within the constitutional powers of Confar,

gress to supervise and regulate these corporations

BANKERS' CONVENTION.

-to

which are the protection of business enterprise and the safeguard of
property, no reasonable objection can be offered;

a peril from which conservative banking should pro-

but the popular voice will not sanction aggressive
measures designed to hamper business enterprise

damental support

without attacking

and perhaps

vital principles,

affect injuriously the value of corporate

which
manufacturing corporations are subject under

property
all

The

and conditions

restrictions

The overvaluation

State laws should be sufficient.

oi these consolidated corporations, in the issue of

equal

when

amounts of

preferred

and common

stock,

tect the

community.

Public confidence

the foun-

dation of credit, and any sudden shock to this fun-

may

any time create widespread
disturbance in financial affairs; but an intelligent
and judicious management of the machinery of
at

credit will be a strong safeguard against such con-

tingencies.

large shortage in the corn crop

table fact,

and

it is

an indispu-

too early to form a trustworthy

estimate of the cotton yield

;

but with these excep-

the preferred stock alone represents the true

tions the crop conditions should be considered satis-

market value of the property is the real objection to
these organizations.
It encourages a vicious policy
of inflation, which the managers of such concerns

Railway traffic continues to show large
gains, although comparing still with the heavy inIf any loss is to
crease of the previous fiscal year.
be expected from the deficient corn crop, it will not
appear before December, when new corn should begin to move.

themselves discover and correct as far as possi-

will

With

ble.

this defect

removed, and with a reason-

able publicity as to business operations, the objec-

companies will be reduced to a
minimum. The fear of a removal of competition is
an ignis fatuus, which will disappear whenever untions to industrial

reasonable profits are demanded.
this

Competition

country cannot be prevented so long as the peo-

ple are at liberty to invest capital in
ings.

new undertak-

This fact alone will exert a salutary influence

upon the policy of these great industrial corporations.

The

failure of the

Seventh National Bank,

fol-

lowed by that of two small banks in Buffalo, w ere
disquieting events during the summer, not that the
r

were of much importance,
but because the failure of the Seventh National was
the result, apparently, of careless and injudicious
banking, suggestive of an extraordinary extension
institutions themselves

of credit in aid of speculative projects.
this light

the exposure should exert a

Viewed in
wholesome

influence.

Except in the temporary disturbance caused by
the withdrawal of currency from New York, to aid
in the crop movement, and in the locking up of surplus revenue by the United States Treasury, there
is

nothing

in the situation

to excite fears of real

money market.

stringency in the

upon which the structure of

The

conditions

credit rests are all fa-

The

vorable to the continuance of monetary ease.

tendency to higher rates of interest

ment of

capital

legitimate

in the

the natural result of the

employ-

growth of

as well as speculative enterprise, stimu-

abundant supply of available funds and
the rapid advance in market valuations which has
lated by the

taken place.

The

credit balance of the country,

ing due allowance for

its

mak-

from Europe and its investment in
must still be very large, and this will

be available for use in the

home market,

if it

can be

employed than in foreign money
centres.
If any danger lurks beneath the surface
it is in the speculative mania which this abundance

profitably

money

excites.

At such periods innumerable

careful survey of

all

the conditions essential

to prosperity fails to develop cause of disturbance

which may not be removed by judicious and conservative action on the part of the great financial
agencies in control of our credit system.
An overwhelming sorrow has fallen upon the
heart of the nation in the loss of its honored President but the prompt and intelligent administration of our national affairs, already initiated by his
;

successor, will speedily

remove

mourns an irremediable

tion

apprehension of

all

Thus while

disturbance in that direction.

loss,

the na-

people will

its

gratefully acknowledge the consolation brought by
the timely and judicious acts of the

new

President.

THE WORK OF THE ASSOCIATION.
That the American Bankers' Association is each
year growing in efficiency and usefulness admits
of no question.

—that

The statement

true in a double

both as concerns the practical work
in which the banks alone have an interest and in
that broader capacity in which the Bankers' Assosense

is,

on imthrough
portant banking and financial questions
intelligent discussions of the same or through wellciation acts to enlighten public sentiment

matured essays or addresses.

regard the latter

function as hardly less important than the former,
and it is gratifying therefore to find that this funcnot being neglected, while the practical work
of most immediate interest to the banks is each year
being looked after, as it should be, with increasing
tion

care and thoroughness.

absorption by the return

of our securities

foreign loans,

factory.

The

distinctive

feature of the proceedings of

Convention has been the papers and adNot
dresses read before the assembled delegates.
in many years have these addresses excited such
this year's

universal and widespread interest.

The reason

for

must be patent to every one. In the first place
They were all
the subjects were well selected.
within the scope of the work of the Bankers' Asso-

this

and they related to matters of concern not
alone to the banks but to the whole community. In

>chemes present themselves to tempt capital from its
temporary idleness by the promise of large returns,

ciation

which too often lack confirmation.
The expansion of credit and the inflation of market values, resulting from these speculative operations, constitute

the second place, the speakers to

whom

these sub-

were assigned were men of ability, fitted by
training and experience to handle them, and the
jects

—
;

BANKERS' CONVENTION.
outcome oi whose efforts was certain to be something worthy of the occasion and worthy of the
men. What, for instance, could be more appropriate or more to the point than Mr. Gage's thoughtful discussions of the Treasury situation and the
currency problem in his so-called '"Informal Talk,"
or more pertinent or more

accord

with

the

promptings of sound sense than the observations
of Mr. James H. Eckels, ex-Comptroller of the
Currency, on " Assets Currency," or of wider interest or of

deeper concern than the theme so ably

handled by Mr. A. B. Stickney, the President of
the Chicago Great Western Railway Company
namely,

The Medium
As to

ing Function."

Exchange and the Bank-

the other topics discussed,

Bankrupt Law touches the interest
of every bank and every business man in the community, and Mr. Walter D. Coles, Registrar in
Bankruptcy at St. Louis, Mo., certainly possesses
the Federal

many

qualifications

for

dealing intelligently and

understandingly with the subject

and the Finanand Commercial Future of the Pacific Coast,
which was the subject of a discourse by Mr. P. C.
Kauffman, Cashier of the Fidelity Trust Company
of Tacoma, Wash., is a matter which no one in this
wide country would be willing to ignore.
It is a significant commentary on the conten;

cial

tions of those

addresses,

who

are constantly belittling the set

— calling them

" literary " features

which

should be accorded only a minor place in the yearly
proceedings or be eliminated altogether, that while

—

these

persons were

tirely

oblivious of the experience of other recent

years, there should
tion as

still

urging their views, en-

come such a

we have had within

signal demonstra-

the last

week

that

the public at large these addresses are held in higher
esteem than any other portion of the work of the
annual Conventions.
To-day nearly every paper

from the Atlantic to the Pacific, and
from the Canadian to the Mexican border, is discussing the remarks of Mr. Gage, Mr. Stickney.
Mr. Eckels and the other speakers, thereby making
the name of the American Bankers' Association a
household term. Except for these addresses the
proceedings of the Convention would have passed
without notice, for there would perforce have been
in the land,

nothing of general interest to comment upon, since
the various committees, which are rendering such
admirable services in their several capacities, work

and effectively all through the year, not
merely on Convention day alone. We imagine it
will be a long time before the " literary " feature
will be dropped.
Passing this point, however, every one will resilently

joice to see the multiplying evidences of the prosperity and success of the Association now visible

on every side. We need hardly tell the reader that
the American Bankers' Association has had a useful and an honorable period of existence.
As Secretary Gage in his excellent address well said, " the
Association was inaugurated by men who were the
hest representatives of the banking profession men
who stood for the highest ideals and best practices
;

men who had

a sense of public duty

and who were

and helpful in all the great financial questions which touched our national interests."
Mr.
Gage was right, too, in saying that the growing influence and usefulness of the Association proves that
the efforts of these men were wisely directed. Every
one will agree with Mr. Gage when he places the
late Mr. George S. Coe in the front rank of those
who, in the early years of the Association, gave
their best efforts to its advancement and to founding it on a broad and enduring basis. Some of the
other names which Mr. Gage recalled were Mr.
Hall, of Boston; Mr. Buell and Mr. Vermilye, of
New -York Mr. Patterson and Mr. Comegys, of
Philadelphia; Mr. Tyler, of Boston; Mr. Simons,
of South Carolina Mr. H. H. Camp and Mr. Van
Slyke. of Wisconsin
Messrs. Barrett, Sneed and
Murray, of Kentucky Mr. Yates and Mr. Millard,
of Omaha, and Mr. Hollister, of Grand Rapids.
With such men guiding the early affairs of the
Association and lending their time and their influence to its advancement, it is not strange that
the Association from the beginning exercised great
power upon affairs, although the number of members remained comparatively limited. It is not surpatriotic

;

prising, either, that in the

more recent

years, with

an appreciation of the useful purposes which the
Association could be

made

to serve

from a

practical

standpoint numbers should have greatly multiplied

under the energy and activity of the officers and
committees of the Association. It will be admitted
too, we think,' that the application by Mr. Caldwell
Hardy, of the Executive Council, of the phrase
"

community of

the Association

The

interest " to the
is

aims and work of

highly appropriate.

Mr. James R.
Branch, to which we alluded in our article on the
Financial Situation in last week's Chronicle,
report

the

Secretary,

speaks eloquently of the progress of the Association.

Nothing could indicate more forcibly the im-

portance of this bankers' guild,
it,

its

strength, or the

we may

magnitude of the

so term
interests

by it, than the bare statement that
since the Convention of 1900 the paid membership
has further increased from 4,391 to 5,504, and that
the capital, surplus and undivided profits of the
represented

5,504
their

members aggregate

$1,718,727,441, and. that

combined deposits are $6,288,955,200, making

a total of assets in the prodigious

thousand

million

dollars

sum

of over eight

— $8,007,682,641,

these

being irrespective of the assets of the
551 private bankers who do not make reports. Six
years ago, in 1895, the membership was only 1,500,
figures, too,

and the addition of 4,000 members since then affords
striking testimony to the growth of the Association
The addition of 1,113
in favor and in influence.
members during the late year was the largest of
any similar period in the history of the organization.
We have dealt in previous articles with the
address of Mr. Stickney and with the remarks of
Mr. Eckels and Secretary Gage. As to the working of the Federal Bankruptcy Law, Mr. Coles
points out the many advantages and virtues of the
law, and he also shows its defects. These defects,
however, he contends, while oppressive and unjust

BANKERS' CONVENTION.

4-2

in their action, are not

fundamental or irremediable
Kauffman's paper on " The

another body which has done good and effective
work, particularly in having the Negotiable Instru-

and Commercial Future of the Pacific
Coast
furnishes a glowing account of the progress and development of the Pacific section and its

ments Law passed in quite a large number of States.
The Convention endorsed the recommendation of
the committee that the Executive Council make
an appropriation for the continuance of the work.
Mr.. Hardy, of the Executive Council, paid a
deserved tribute to Mr. A. C. Anderson, Cashier
of the St. Paul National Bank, of St. Paul, Minn.,

Mr.

character.

Financial
"

splendid prospects.

Mr. Kauffman laments the fact
our growing trade with South America and

that

the Orient

settled almost entirely with bills of

exchange on London, and he urges the establishment by Congress of an international bank with
headquarters in New York and branches in all the
leading commercial cities of the globe. He thinks
that if this were done and the development of our
merchant marine looked after, the people of this
country ere the close of the twentieth century
not only see the United States the unquestioned
" will

mistress of the Pacific and the vast

commerce that
celebrated
Old Lady

burden its bosom, but the
of Threadneedlc Street walk with equal step with
her famous kinsman.
Brother Jonathan, of Wall
will

Street.' conscious that they

twain control the finances
and commerce of the world."

few words

will not

be out of place with refer-

he gives credit as the moving

spirit in the

exertions of the Committee on Fidelity Insurance.

This body, as
of

its

well

existence has

known, during the three years

made an exhaustive

investiga-

bonds for employees,
both in this and in other countries, and has been
instrumental in securing the adoption of a form
of bond devised bv it and copyrighted in the name
tion of the subject of fidelity

of the Association.

The

whom

report of the Committee on Express

Com-

pany Taxation (composed of F. W. Hayes, Percival
Kuhne and Chas. R. Hannan) was somewhat
briefer than heretofore, but the Committee had gone
very thoroughly into the subject in their report of

The

ence to the reports of the various committees, upon

last year.

whom

ties that

was

ceedings to compel the express companies to pay

and the active officers of the Association, as
Chairman Caldwell Hardy (President of the Norfolk National Bank, of Norfolk,
Va.), of the Executive Council, the burden of the
well said by

work of the Association naturally falls. The Protective Committee has continued its labors along
the lines which have become so familiar, and its
work constitutes one of the best known and most

present report sets out the difficul-

way

stand in the

of instituting legal pro-

taxes the same as banks for the privilege of con-

ducting a banking and brokerage business.

Committee should certainly be empowered
tinue

work

its

The

to con-

for another year.

The Executive Council and the Convention are
be commended for having refused to adopt reso-

Mr. A. B. Hepburn. Vice-President of the Chase
National Bank, of this city, in his report as Chair-

Congress in favor of
the reorganization of the United States Consular
Service and the creation of a Department of Com-

man

merce and Industries.

useful features of the activities of the Association.

of the Committee on Internal Revenue Taxa-

speaks modestly of the results accomplished
by that committee. Nevertheless, if the committee
tion,

lutions

supporting

bills

The ground wisely taken
was that action along those lines would be foreign
to the general work of the Association.

has not been successful in securing the repeal by

Congress of the internal revenue tax on capital and
surplus of the banks,

has at least rendered im-

portant services to the customers of the banks in

having the two cent tax on stamp checks removed.
The Convention adopted a resolution petitioning
Congress for a repeal of the taxes referred to.

The

feature of the

work of

the

Committee on

Education has been the organization, as authorized
by the Association at its Convention last year, of

American Institute of Bank Clerks. Colonel
Lowry's report as Chairman and Mr. Kittredge's

the

report as Secretary arc devoted entirely to the eluci-

dation of the functions and purposes of the Institute

and

showing what progress has been made

establishing chapters thereunder.

The

creation of

promote the education and the
advancement of bank employees, is, as every one
will admit, a step in the right direction, and should
prove of inestimable advantage to such employees
and to the banks as well. The Association at its
this

Institute,

present session acted wisely in again endorsing the
idea and

repeating last

year-

appropriation

Si 0,000.

tional

The continued expansion

the business and

operations of the Trust Companies of

New York

State constitutes one of the most remarkable de-

velopments of modern times, and has no parallel
We have referred to this
in financial history.
growth on many previous occasions, but it becomes

and with
Moreover, the

striking with each further addition

the appearance of every

movement

ing reached
totals,

new

return.

a progressive one, and instead of havits

culmination

some had thought

the previous large

likely,

establishing

new high records with every succeeding statement.
Notwithstanding the enormous increases already
made, present gains are actually on a larger scale
than before.

The aggregates

semi-annual returns for the

as disclosed in

first

been furnished from Albany, and

markable
able of

series of results this

the

of July have just

whole rethe most remarkin the

all.

Starting with

the

resources,

found that

these resources were enlarged during the last six

The Committc- on Uniform Laws, of which
Mr. Frank

THE GROWTH OF THE NEW YORK
TRUST COMPANIES*

Bank of

months over 168^2

million

dollars.

Noteworthy

Tracy, President of the First NaSpringfield,

111.,

Chairman,

•Reprinted from
is

of July 27. 1901.

tin-

Commbbcial and Financial Chiionh'le

—

BANKERS' CONVENTION.
though previous additions have been, the amount of
this gain surpasses the best previous record.

With

now comes

pretty

AGGREGATE DEPOSITS OF THE
July

1901
$802,518,096
January 1, 1901. 638,121,771
January 1, 1900. 523,541,570
July 1, 1899
594,462,708
January 1, 1899. 467,1S4,258
January 1, 1898.. 383,328,725
January 1, 1897.. 305,354,637
1,

the present addition, the total

close to a thousand million dollars, the exact figures

being $966,528,398, as against but $797,983,513 on
January 1 last. In the following we carry the com-

The bulk of

parisons back for a few years in order to indicate

how

phenomenal the growth has been. It
will be observed that as recently as January 1, 1898
that is, three and a half years ago
the total was
no more than $483,739,926. In other words, in the
really

—

short interval since then the
rising

from

less

amount has doubled,

than 500 millions to nearly 1000

millions.
AGGREGATE RESOURCES OF THE TRUST COMPANIES OF NEW YORK

Ni:\v

youk

tiu

January
January
January
January
January
January

1,
1,

COMPANIES.

si-

1896 .$307,351,893
1895
285,741,794
1894
266,092,055
1893
264,295,048
1892
234,466,697
1891
211,320,275
.

the six months' increase in re-

sources and deposits has been employed in the mak-

ing of loans upon collateral.

than

139

million dollars has been put out in that way,

and

less

the aggregate of the collateral loans held by these

now

Last

reaches 527 million dollars.
January they had out only 388 millions in
institutions

loans,

such

and on January 1, 1897, the total loaned on
was less than 170 million dollars. Here

collateral

STATE.

July

1901
$966,528,398
January 1, 1901.
797,983,513
January 1, 1900.
672.190,672
July 1, 1899
722.356,523
January 1, 1899. 579,205,442
January 1, 1898. 483.739,926
January 1. 1S97.
396,742,948
1,

January
January
January
January
January
January

1890. .$392,630,046
365,419,729
1894.
341.466,011
1893
335,707,780
1892.
300.765,575
1891
280,688,769

1, 189.")
1,
1,
1,
1,

remarkable than the gain in the grand
aggregates is the wide and general nature of the
growth, it extending to the old and the new comless

panies alike.

devote

In our Investment Department

pages to a presentation and comparison
of the returns of the companies of this borough and
Brooklyn. The periods compared are those for the
five

semi-annual dates, and examination will

last three

disclose that in the

whole long list there are only
two or three companies that fail to record -very
decided increases.
We cannot enumerate all the
gains where there are so many, but taking only
the most conspicuous instances, the New York
Security
creased

Trust during the

last

months has

in-

resources from $24,795,331 to $37,035,-

its

Morton Trust Company from $39,272,282
$63,497,583, the Union Trust from $56,549,440
$71,191,138, the United States Trust from $76,-

316, the
to

063,429

$84,271,060, the

Trust

LOANS ON COLLATERAL BY TRUST COMPANIES.
January 1, 1896. .$169,161,348
January 1, 1895
148,953,820
January 1, 1894.
147,794,024
January 1, 1893.
196.321,422
January 1, 1892.
173 552,829
January 1, 1891.
166,685,758

Not

are the comparisons

Company

America from $17,857,384 to $22,299,703, the Mercantile Trust from $53,318,845 to $68,854,926, the
Guaranty Trust from $28,596,070 to $40,575,949,
the Farmers' Loan & Trust from
%SZ^ 2 776^7 to
$61,125,647, the Knickerbocker Trust from $24,317.618 to $32,473,592, the Central Trust from
$52,995,254 to $62,529,369, the Colonial Trust from
$19,401,610 to $24,328,504, the Merchants' Trust
from $6,022,673 to $12,190,395, and the New York
Life Insurance & Trust from $34,112,569 to
$39,-

1901
$527,040,175
January 1, 1901. 387,911,415
January 1, 1900.
328,143,588
July 1, 1899
378,218,698
January 1, 1899. 283,402,822
January 1, 1898. 230,581,708
January 1, 1897.
169.894,938
July

need hardly say that with such a large

crease in resources the last six

in-

months there has

;

Besides the $527,040,175 loaned on collateral,
the Trust Companies had at the same date $42,524,-

584 of loans on personal security, bringing the

total

of their loans close up to 570 million dollars.

This

shows what a power these institutions are becoming in the money market and what competitors of
the banks they are.
LOANS ON PERSONAL SECURITY BY TRUST COMPANIES.
July

1901

January 1, 1901
July 1, 1900
January 1, 1900.
January 1, 1899.
January 1. 1898 ..
January 1, 1897 ..
.

January
January
January
January
January
January

$42,524,584
39,840,066
47.937,934
31,101,271
29,930.376
31,183.292
25,788,188

1,
1,

1,
1.

1,
1,

1896.
1895.
1894.
1893.
1892.
1891.

.$29,369,703
-22,791,215
.. 22,636,957
19,698,925
17,210,145
9,755,643
.

Another way in which the Trust Companies
have great power over the money market and over
the banks is in the large amount of available cash
they have. Their total of cash on hand and on deposit July

own

901,

$116,183,077.

was over 116
this

million dollars

only $8,814,223 was in their

on deposit

vaults, the other $107,368,854 being

banks subject to

all

these

Companies
and not New York City alone, but the
make up the bulk of the whole.

latter

in the

call.

course,

figures relate to the Trust

of the entire

State,

CASH ON HAND AND ON DEPOSIT.
1901
$116,183,077
January 1, 1901.
105,702,416
January 1, 1900
81,366,288
January 1. 1899.
71,734,621
January 1, 1S98.
55,034,451
January 1, 1S97.
54,642,344
July

060,976.

With

January
January
January
January
January
January

1,
1.

1,
1,
1,

1896.
1895.
1894.
1893.
1892.
1891.

.$50,804,137
61,206,703
74,365,761
35,033,016
33,932,847
26,564,978
.

reference to the other investments,

been a corresponding increase in the deposits of the
Trust Companies. As a matter of fact the addition

only necessary to say that both the so-called stock

to deposits

gages keep slowly but steadily growing.

during this period has been no less than
164 million dollars, and the aggregate of these deposits is now over eight hundred million dollars,
being $802,518,096. On January 1,
this same
1897,

aggregate was only a

little

over three hundred mil-

lions ($305,354,637), so that in the

4^ years there
has been a gain of almost 500 million dollars. The
magnitude of this total of $802,518,096 will perhaps be better appreciated when we say that
the

deposits of

banks

all

at the

the

New York

City Clearing

same date were $971,382,000.

House

investments and the holdings of real estate mortSTOCK INVESTMENTS OF TRUST COMPANIES.
July 1, 1901
January 1, 1896. .$104,512,839
$209,624,054
January 1, 1901.
January 1, 1895.
97,555,798
196.852,582
January 1, 1900.
January 1, 1894.
168,195,642
65,998,230
January 1, 1899.
January 1, 1893.
57,185,649
136,561.066
January 1, 1898.
January 1, 1892.
113,525,798
51,132,239
January 1, 1897
January 1, 1891.
101,983,600
47,180,478
,

HOLDINGS OF BONDS AND MORTGAGES.
July 1, 1901
January 1, 1896. .$25,114,077
$43,862,482
January 1, 1901.
January 1, 1895. .. 21,569,504
40,730,576
January 1, 1900.. 38,143,145
January 1, 1894
17,451,674
January 1, 1899.
January 1, 1893.
34,855,023
15,062,290
January 1, 1898. .. 32,624,995
January 1, 1892.
13,373,463
January 1, 1897.
January 1, 1891.
28,692,428
17,537,008
.

BANKERS' CONVENTION.

THE TRUST COMPANY SECTION.
The Trust Company Section shares

gen-

in die

and growth of the American HankIt
was a happy thought that

eral prosperit)

Association.

ers'

Companies have lent material aid in developing, and which is already the most extensive
the Trust

Erom

the world.''

conclusion that the relations between the banks and

originally suggested the organization of this Section

the Trust

branch and department of the Bankers" Association.
The Trust Companies have many
points in common with the hanks, but they also have

friendship, not of rivalry.

distinct

At one time there was
siderable jealousy between the two classes of
institutions, and also more or less friction between
them occasioned by the fact that their interests touch

a separate sphere of action

number

at a

But this has in great measure passed away.
The Trust Companies have had
such a wonderful growth and their operations are
of such magnitude and the number of such institutions has

come

of points.

grown

so fast, that the fact that they

had

and that they would have to be reck-

to stay

oned with as factors

in the financial affairs of

ern times could no longer be doubted.

mod-

Hence,

American Bankers' Ashad not voluntarilv. five vears aero, ac-

the far seeing spirits in the
sociation

corded a place to the work and

activities of these

new financial undertakings, the concession would,
we may suppose, have been wrung from them by
this time, the interests of the Trust Companies having risen to such magnitude

demand

the interval as to

recognition.

Entirely apart from

this, however, banks and
Trust Companies are working much more harmoniously together than they did a few years ago. While

was, as above indicated, a feeling that

at first there

Companies were encroaching upon the
field of the banks, and hence that the interests of
the two were inimical, gradually a better under-

the Trust

standing of the functions of these new creations
has arisen.
It is now recognized that Trust Com-

of this he deduces the

all

Companies must be those of harmony and

The growth

ing the brief period of

noteworthy.

first

The banking

tion.

Company

of the Trust
its

Section dur-

existence has been very

attracted very

little

publications ignored

our Bankkrs' and Trust Suppliment for 1898, and in the
succeeding annual numbers of the same Supple-

accorded to the work of

ment, served

this Section in

wide publicity

to give

to its doings,

thereby bringing the organization to the notice of

community who were previously unaware that such a useful body had come inSince then the growth of the Trust Comto being.
pany Section has been rapid. In 1897 the memberIn 1898 there was an increase to 150.
ship was 114.
At last year's
in 1899 to 190, and in 1900 to 253.
session an innovation was introduced in the matter

many

in the financial

of filling the Secretaryship of the Trust

Company

had been a temporary
one, a new Secretary being appointed by the ExecuBut last year the office
tive Committee each year.
was, in effect, made permanent by the appointment
Previously the

Section.

office

James R. Branch, who has been for so many
years the Secretary of the American Bankers' AssoMr. Branch set to work with characteristic
ciation.
energy to increase the membership of the Trust
Companies, as he had previously increased that of
of Mr.

The

the banks.

members

result

that the accession of

new

for 1900-01 surpasses that of any previous

Company
total mem-

vear since the organization of the Trust

Mr. Branch is able to report a
bership now of 348, which is an increase

often promote and advance their interests

of nearly 100.

that they

annual

But the prominence

proceedings almost entirely.

panies, instead of being antagonistic to the banks,
;

its

atten-

Section.

since 1900

a distinct field of usefulness, and at the same
time supplement the work of the banks, and there-

In the papers read before the Section this year
there was somewhat of a blending of the theoretical

with the practical.

fill

uncommon

Hence it is not
nowadays new Trust Companies

progress of both.

facilitate the

to find

being organized, promoted chiefly by bank officials.
The mutuality of the interests of the two is plainly

brought out

a pamphlet, or brochure, which has

recently been circulated by the Knickerbocker Trust

Company, of this city. The writer shows how inevitable it was that with the increase in the country's

wealth

banking

capital should find

an addi-

tional channel for that portion not actively

engaged

its

The

was

theoretical side

pre-

sented mainly in the very thoughtful discourse prepared by Mr. Charles Francis Phillips, President
of the Corporation Trust

Company, of Delaware,

which he made a comparison between our Trust
Companies and the large banks and financial inThe title of the paper was
stitutions of Europe.
" The Business in Foreign Countries Analogous to
that of Trust Companies in the United States," and
the aim, of course, was to derive useful hints and
in

growth of Trust Company deposits

suggestions for ourselves from a study of the operaThe title
tions of the financial institutions abroad.

in recent

of the address

trade.

also

shows that the extraordinary

in this State
years has not been at the expense of the

was evidently framed with the same
taken in preparing the body of the dis-

banks, which have coincidently increased their deits in a very striking way during the same period.

care as that

Trust Companies

thinks there

siders that

good fortune

an ample

and con-

monstrous offense against
complaint of encroachment should

would
if

field for both,

be " a

be heard on either

sid<-

well

says that "

Companies are to-day entrusted with
private funds of almost fabulous amount, on the
other hand the banks have the handling of a commerce which is growing by leaps and bounds, which
the

Truft

course, and

suggests at once that there are no
in

Europe;

that,

confined to institutions "

study was
those of Trust Companies.

to think, too, that the Trust

therefore,

the

analogous

" to

Mr. Phillips

Company

inclined

we know

remain for a long while a distinctiveHis study
ly American form of business facility.
leads him to the assertion that our own country

here

likely to

"has proven

itself to be. in

respect to the

common

BANKERS' CONVENTION.
who must work

financial needs of all

hood with

for a liveli-

citizens of each State are entitled to all the privileges

and immunities of

head or hands, the least democratic
By this he has
of the great civilized powers."

Accordingly, a citizen of one State

reference to the facilities afforded in Europe to small

own and

borrowers and small investors, by the mortgage

as can a citizen resident in that other State,

either

—

banks and other large financial institutions the
Credit Fonder, the Credit Lyonnais, and the SoGeneral which have no parallel in the
ciete

—

United States.

Mr.

Phillips'

paper should be care-

citizens

the several States.

may

acquire,

dispose of property in another State just

and Mr.
Vierling points out that the U. S. Supreme Court
has decided that this provision applies equally where
the property is conveyed to a nonresident trustee
in Trust.

With

reference to fiduciaries appointed

fully read.

by the Courts, Mr. Vierling shows that such legal

Bearing on the practical side of Trust Company affairs, Mr. Frederick Vierling, Trust Officer
of the Mississippi Valley Trust Company, of St.

representatives are considered officers of the Courts,

Louis, had a well considered paper on the Powers
of Fiduciaries Outside the State of Their Appointis one requiring legal knowledge
Vierling handled it with much
Mr.
and training, and

The

ment.

skill.

subject

indicated quite clearly the nature of the

powers referred to and the qualifications and modiHe divided his
fications to which they are subject.
viz., (i) where the
subject into three classes
fiduciary is a natural person;
(2) where the
fiduciary is a corporation, and (3) where the
property of the Trust is personalty and where it is

—

real

estate.

The

first

of these classes he further

subdivided under two heads
the Trust

—namely,

(a)

where

created by act of the parties, such as

trusteeships and assignments,

and (b) where the

appointment of the various
As far as assignments are concerned, they
courts.
are still permitted under the State laws, but under
the national bankruptcy law an assignment is an
Trust

created by

act of bankruptcy,

plication

and the debtor's matters, on ap-

of any person interested, will be taken

charge of by the bankruptcy court and the asMr. Vierling well says, theresignee be ousted.
fore, that questions relating to

assignments are no

In the case of other Trusts created by act of the

the

the general

power of the

another

may

made

that

trustee over Trust property in

.State is the

trustee resides.

statement

same as

Under

;

provide for corporate fiduciaries.

The paper

Mr. Arthur Heurtley (of the
Northern Trust Company, Chicago) on Trust Company Forms was also of great practical interest, relating to the every day business of the Companies,
though, as Mr. Heurtley well said, it is not a topic
that one can deal with in rounded periods or over
which one can indulge in any flights of rhetoric.
It is eminently one of details, and Mr. Heurtley
of

goes carefully over the subject.

from quoting with approval

longer of greatest importance.

parties,

and as these Courts have complete jurisdiction only
in their own States, they can give their officers no
greater territorial power than their own.
The particulars in which this general rule is modified to
some extent are set out at length.
All this relates to cases where the fiduciaries
are natural persons.
Mr. Vierling goes into a
careful analysis of the powers of corporate fiduciaIn some respects these seem to be at a disadries.
vantage as compared with the natural person in
others at an advantage.
In a number of States corporations are not permitted to hold real estate, and
in such States a corporate fiduciary cannot take and
hold title. Mr. Vierling finds that practically all
the States permit foreign corporations, under restrictions, to do business generally, but all do not

in the State

where the

the Federal Constitution the

cannot refrain

his statement that

should never require the services of a chartered
accountant to check a proper system of Trust accounting, or his further statement that there is

no particular mystery about
keeping generally.

accounts

book-

INDEX TO ADVERTISEMENTS.
NEWARK,

AUGUSTA, GA.
GEOBGIA R ui.road

1 >a ge

Bank

19
113
19
18

)

BIRMINGHAM, ALA.
First National

Bank

BOSTON, MASS.

American Loan ft Trust Co
Boston Safe Deposit ft Trust Co
Lee. Higginson & Co
Mason, Lewis & Co
Old Colony Trust Co
Rollins (E. H.) & Sons
BROOKLYN, N. Y.

3
22
10
10

31
ILL.

American Audit Co
American Trust & Savings Bank.

•

.Inside Front Cover.

Audit Company of Illinois
Becker (A. G.) & Co

•

Chicago National Bank
Continental National Bank
Devitt, Tremble & Co
Equitable Trust Co
Mason, Lewis & Co
MlDDLETON (J. W.)
Northern Trust Co
Otis, Wilson & Co
State Bank of Chicago

Inside

•

116
23

Back Cover.
23
20
116
22
20

Inside

2G
26

Cincinnati Trust Co
Kleybolte (Rudolph) & Co

CLEVELAND, OHIO.
Bank

26
26

Guardian Trust Co

DENVER, COL.
Rollins (E. H.) & Sons

1°

DETROIT, MICH.
Detroit National Bank
State Savings Bank
Union Trust Co

GRAND

115
115
115

RAPIDS, MICH.
6

Michigan Trust Co

HARTFORD, CONN.
Hartford National Bank

28
15

)

15
13
32

99
115
113
31
113
12
12

26
28
14
7
3
13
Cover.

9
12
1

29
11

8
30
112

NORFOLK, VA.
Citizens'

Bank

18
19

PHILADELPHIA, PA.
D.) & Co

Barney (Chas.
Commercial Trust Co
Farmers' and Mechanics' National Bank
Fourth Street National Bank
Girard National Bank
Girard Trust Co
Inside Front
Pennsylvania Co. for Insurance on Lives
Philadelphia National Bank
Smith (Edward B.) & Co

16
17
17
16
113
Cover.
17
14
17

PITTSBURG, PA.
Diamond National Bank
Hill (George B.) & Co
Mellon (T.) & Sons
Safe Deposit & Trust Co
Union Trust Co
Whitney & Stephenson

116
114
31
114
114
114

PROVIDENCE,

HOLYOKE, MASS.
20

Whiting Paper Co

INDIANAPOLIS, IND.
American National Bank
JERSEY CITY, N. J.

116

Rhode Island Hospital Trust Co

Williams (John

L.)

& Sons

Second National Bank

Rollins (E. H.) & Sons

LOUISVILLE, KY.
2?
2?

WIS.

Ftrst National Bank
er C. Fuller & Co

Milwaukee National Bank
Milwaukee Trust Co

Wisconsin National Bank

SAN FRANCISCO, CAL.
10

ST. LOUIS, MO.

American National Bank
umbia Finance & Trust Co

SAGINAW, MICH.

KANSAS CITY, MO.
United States Trust Co

RICHMOND, VA

29
2J

Commercial Trust Co
BWfflUI & Transfer Co

MILWAUKEE,

Canadian Bank of Commerce
Central National Bank
Chemical National Bank
Colonial Trust Co
Farmers' Loan & Trust Co
Fourth National Bank
Floyd, Augustus
Gallatin National Bank
Hanover National Bank
Hurlbutt, Hatch & Co
Irving National Bank
Kimball (R. J.) & Co
Kleybolte Rudolph & Co
Knauth, Nachod & Kuhne
Knickerbocker Trust Co
Latham, Alexander & Co
Liberty National Bank
Market and Fulton National Bank
Morgan (J. P.) & Co
Outside Back
National Bank of North America
Phenix National Bank
Redmond, Kerr & Co
Registrar & Transfer Co
Seaboard National Bank
Union Trust Co
United States Mortgage & Trust Co
Winslow, Lanier & Co

Norfolk National Bank

CINCINNATI, OHIO.

Euclid Avenue National

13
12
2

Back Cover.
21
22

CITY.

Audit Co. of New York
Bank of the Manhattan Co
Brown Brothers & Co

(

People's Trust Co

CHICAGO,

NEW YORK

Maryland Trust Co
Mercantile Trust & Deposit Co
MlDDENDORF (J Wit & CO

Fidelity Trust Co.

BALTIMORE, MD.
Farmers' and Merchants' National BANK
:n AiioNAL TRUST Co. of Maryland

American Exchange Bank
Mechanics' National Bank
Mercantile Trust Co
Mississippi Valley' Trust Co
Third National Bank

25
24
25
24
25

TORONTO, CANADA.
Bank of Toronto
Canadian Bank of
Dominion Bank

Commerce

28
28
28

BANKING SECTION
American Bankers' Association.
27th Annual Convention, Held

Milwaukee, October

6 and

INDEX TO CONVENTION PROCEEDINGS.
The Defects of our Treasury System
Medium of Exchange and Banking Function

47 to 49

Annual Report

50
55
58

Report of Auditing Committee
Report of Executive Council -

Addresses of "Welcome
President Alvah Trowbridge's Address

Pages
Pages
Pages
Pages
Pages
Pages
Pages
Pages

Annual Report

Page 66

Assets Currency

Future of the Pacific Coast
The Federal Bankrupt Law

Detailed Report of Proceedings

...

of the Secretary

to 61

61 to 63

64 to 99
64 to 65

65 to 66

of the

Treasurer

Report of Protective Committee Report on Internal Revenue Taxation
Report of Committee on Fidelity Insurance
Report of Committee on Education Report on Express Company Taxation
Report of Committee on Uniform Laws -

Pages 66 to 67
Page 67
Pages 67 to 68
Pages 69 to 71

Page 71
Pages 72 to 75
Pages 75 to 78
Pages 80 to 81
Page 83

The Defects of Oitr Tteasury System,
By Lyman

Gage, Secretary

Most of you have experienced that peculiar emotion
which rises in the breast when one who has been for
some time separated from friends and associations
returns again to the old surroundings. His sensations
are half painful, half pleasant. He discovers changes;
old landmarks gone, faces once familiar are not to be
seen, while in their places others appear to former time
unknown. Such are the feelings I experience in standFor there was a time in the
ing before you to-day.
earlier

days of your Association when,

active participant in its councils
least a faithful

was not an
I was at

if I

and doings,

and interested observer. And

for a

moment

want

to refer to the first stages of

look backward, as old

men

can

like to do, I

your honorable organ-

which is so respectably represented here to-day.
Perhaps thirty years will cover your history. Its early
growth was slow and doubtful. The banker, as a rule,
ization,

hard subject to

enlist in anything.

views with

which may possibly commit
action with anybody else. He prefers to stand

suspicion any proposition

him to joint
upon his own responsibility, to manage his own affairs,
and is not naturally friendly to suggestion from the outside. Especially is this true if there be any prospect
that these suggestions will be forced upon him by any
moral or other pressure. The innate disposition of the
banker furnishes the very highest guarantees that the
powers exercised by the bank as a unit can never be
associated or centralized under the control of any one
man or any coterie of men. If, then, those eloquent

men who

talk so glibly of the "

money power " have

mind the great banking interests of the country, as represented by the ten or twelve thousand banking institutions scattered over the land,

each acting independently
environment, these orators

within the limits of its own
are very wide of their mark.
So strongly does this characteristic prevail that your
organization

when formed, though based upon

purely

of the United States Treasury.

Nevertheless,

small.

the Association

was inaugurated

by men who were the best representatives of the banking profession; men who stood for the highest ideals and
best practices; men who had a sense of public duty, and
who were patriotic and helpful in all the great financial
questions which touched our national interests. It is
well that these men be remembered. The growing Influence and usefulness of your Association proves that
their efforts were wisely directed, and, in my opinion,

more completely illustrate the truth of
say in this regard. I was not one of that honorable group. As a younger man, I could only be what I
gladly became, a cheerful follower. Let me name some
of these men. To many they will be familiar; to most
of you they will be hardly known. In the front rank
I would place Mr. George S. Coe, of New York, then a
veteran in finance. A close second to him were such men
as Mr. Hall, of Boston, an early, if not the first, president. I name a few others without regard to precedence
who were wise in council and prominent in influence:
Mr. Buell and Mr. Vermilye, of New York; Mr. Patterson and Mr. Comegys, of Philadelphia; Mi-. Tyler, of
Boston; Mr. Simons, of South Carolina; Mr. H. H. Camp
and Mr. Van Slyke, of Wisconsin; Messrs. Barrett, Sneed
and Murray, of Kentucky; Mr. Yates and Mr. Millard,
of Omaha; Mr. Hollister, of Grand Rapids. But the
list grows, and I cannot name them all.
If time permitted, it would be gratifying to me to
speak with detail of the public service performed by
some of these in the great exigencies which have from
time to time appeared in national finance incidental to
and subsequent to the Civil War. In every country
there is a more or less intimate relation between government finances— debt and taxation— and the general commercial or industrial affairs of such country- In our
own country that intimacy has been and is injuriously
close. Does this need any demonstration? I think not.
the future will

what

voluntary lines, failed to receive the general co-operation
to which its laudable purposes entitled it. While thirty

The

years or more have passed, the ratio of membership
to the total banking fraternity is yet comparatively

industrial progress has been severely checked while
great questions relating to the condition of the Treasury

and memory readthose periods where our whole financial and

facts of history are too familiar,

ily recalls

VNKERS' CONVENTION.

the standard of money have awaited decision, it
has been the effort of your Association from the beginning to assist in establishing the Government finances
on secure foundations, and at the same time to reduce
td the smallest degree possible the dependency of commercial affairs upon Treasury operations. While under
OUT system the Government in a broad sense is the people, and the people constitute the Government, yet in its
or

organisation

personal

a legal entity, separate, distinct, Im-

a corporation

with rights, duties, obliga-

and defined in the Constitution
Within its proper sphere of action it
is supreme, but ih> proper sphere of action is limited,
and it cannot transcend these limits without harm to
itself and injury to the people. In other words, there
arc laws superior to the Government— laws which if
cannot defy and escape penalty. They are not written
laws, but are discoverable. They are varied in form:
but I refer now only to the higher economic laws, which
have a way of self-operation, blessing the obedient and
banning the violater. Of these all men and all governments should be afraid, and to their mandates respect
should be shown. The thought I have in mind will
be the more distinctly presented by a contrast between
the expressed principles of a neighboring State and our
own governmental methods as they have been made
familiar to your knowledge and experience.
Some time since I had the pleasure of a long talk
with the financial minister of a South American republic, one of the most securely established in its political
life and most advanced in the elements of material
growth and industrial prosperity. Desiring to know his
Government's methods, and their points of view in certain economic particulars, I asked him a series of questions, to which he made the most gracious and frank
replies.
I confess that 1 was surprised and not a little
humiliated, as a citizen of this great republic, at the
clear perception of economic relationships, and the evident willingness he displayed to forego tempting advantages in the present, out of obedience to the requirements of higher considerations. I do riot believe that
I can do better than to repeat the substance of that
conversation. It throws some clear sidelights on our
tions, all clearly set forth

statute law.

tern of finance.

asked him, " some sort of banking
I
your country?"
" Oh, yes. We have a system operating under federal
authority, governed by- federal law, and subject to inspection and control by federal agents. We have eight
large banks, each with several branches, so that all
sections of our country are supplied with banking fa"

You have,"

system

cilities."
'

do you allow banks with branches? Why not
entirely independent of each other, the same
"
as we do?
M Well, we believe that a fagot of many twigs is
safer
and stronger than the separated twigs could be. It has
worked w<ll. We have had no bank failure for many

Why

make them

years."

they issue notes to circulate as money? "
" Yes, limited in amount by their relation to capital,
'•

business affairs should be involved to the smallest decree possible with Government finances. If we should

become engaged

in a protracted and exhausting war,
the price of our bonds might fall. The value of the

upon which the safety of the bank note was
supposed to rest thus declining, distrust and panic might
set in at the most inopportune time— an inopportune
time, because it is precisely in time of war that the Government must make the severest financial exactions
from its people. It is therefore doubly important that
general business should be protected from, rather than
exposed to, the perturbations in Government finances
when the latter are under stress and strain. It is just
then that we need the greatest strength and the most
steadiness in the personal affairs of our people, for it
is from them that we must draw resources and supsecurities

plies."

One more question," I urged. " You have, I know,
revenues somewhat in excess of expenditures, and necessarily carry a working balance on hand. Where do you
keep this cash, in your strong boxes, as we do?"
"

No," he answered, " we are a small country, not
rich, like you.
If we locked up this money, amounting
sometimes to thirty millions of dollars, it would be an
economic crime. We deposit our idle funds among the
eight banks, and they serve as an important aid to industrial activities, while they are always subject to our
call when needed."
It is noticeable that on three particulars legal tender
paper money, bank note issues, and the keeping of the
public moneys— we pay no regard to the opposing argument. Nevertheless, the reasons set forth by that Finance Minister for adhering to a policy so radically at
variance with our own are deserving of deep consideration. Having found, as we believe, that legal tender
Government paper money supplied an imperative need
in a time of war, we cannot persuade ourselves to
abandon the use when the emergency is passed.
In this country the bank note, while safe to the people, is the most valuable instrument by which the credit
of a bank can be made available to the borrower for the
uses of industry and commerce. With us the bank note,
while a good medium of exchange, is as costly to the
borrower as capital, since an investment of capital equal
to the bank note itself is a condition precedent to its
"

—

issue.

In this country the moneys taken from the people by
taxation are not actually withdrawn from commercial
uses; they are merely transferred from public ownership in the

payment

of public expenditure to the private

With us the proceeds of
taxation are entirely withdrawn from commercial uses
and held in idle hoard in the public Treasury until
actually distributed for public expenditures.
Has our Government's course been a wise one? Takcreditor of the Government.

ing the last thirty years,

what sum on

excess of an ample working balance, has the Treasury
kept under lock and key and away from all current use
in the fields of industry and exchange? The amount
is

found
If

average

fifty millions of dollars.

these surplus millions had been deposited with

and by the percentage of specie which they are required

national banks in the clearing house

to carry against note issues."

portion the relative capital of each

Why

do you not make the banks secure their notes,
By
e do, by the pledge of your Government bonds?
requiring them to do this, you would enlarge the market
for your securities, and thus lower the rate of interest
on your Government debt. At the same time you would
make the hank note absolutely secure to the holder."
" Yes," he replied, " but this apparent advantage
might prove to be fallacious in the end. in the first
place, we consider the bank currency entirely safe to
the holder as it now is. In the next place, to require
whnt you sustrest would involve a tie-up of so much of
he bank capital, all of which we think ought to be
available to the uses of industry and trade.
" A train," he added, " we think general Industries and
"

the average, In

cities,

in the pro-

bank bears

to the

and if, secondly, the only security to the
Government had been, in case of bank failures, a prior
lien on such bank's assets, not a dollar of loss would
the Treasury have suffered.
Next, if under these conditions the banks had paid
interest to' the Government at the rate of 2 per centum
upon the funds so deposited, how much would the Treasury have been benefited? Answer: Thirty-two millions
whole

capital,

of dollars.

Lastly, with this fund as an aid to their general operations in the field of trade

and commerce,

what

extent,

on the average, would the banks have been able to Increase credit accommodations to the people? Answer:

Two hundred

millions of dollars.

BANKING SECTION.
Have we

increase of $135,457,744 between April

an enormous economic
waste by reason of our peculiar Treasury system?
1 could pursue into detail the faults with which our
financial system may be justly charged. But the matter
has been presented over and over until the theme is badPermit me, however, to summarize into sevly worn.
eral brief propositions an expression of my own financial

$985,470,000;

convictions.

interest bearing debt,

not been guilty of

most desirable that the deGovernment, known as legal
tender notes, should be put in the way of retirement
and cancellation.
Second: I believe that this can be accomplished without any burden of interest cost to the public Treasury.
Third: I believe that our system of bank note circulation can be and ought to be so modified as to make it
more responsive to commercial and industrial requirements, without any increase of risk to the bill holder.
Fourth: I believe that beyond acting as a guardian
and trustee for the people in relation to national banks,
the Government's guarantee to bank note issues should
First: I believe

mand

liabilities

to be

of the

Fifth:

believe that the public

moneys

in excess of a

reasonable working balance for daily use should be deposited in national banks. That a simple and safe system of distribution of funds can be devised I have no
doubt.
Sixth: I believe that in periods of national peace and
prosperity the public revenue should be somewhat in
excess of public expenditure, and that the surplus rev-

enue should be applied to the reduction of the public
debt.

Time
of belief

will not permit

to support these statements

by argument now, and

the subject of your

own

will leave

them

to be

reflection.

remarks I expressed the opinis too close an intimacy between the Government's finance and our commercial affairs, and appealed to your memory of our history in support of that
proposition. It is a comfort and satisfaction to note
that at the present moment the injurious effect of such
In the beginning of

ion that there

intimacy appears to be at a minimum.
The public
Treasury is strong, the public credit is high, and at the
same time the situation of general finance, as represented by banking and commercial interests, is most
satisfactory.

want

to close

talk

by presenting some facts

comparison which will at least illustrate the strong and
satisfactory condition of the national finances.

While

drawing 2% per cent, per annum are
quoted at 92, German Imperial 3 per cent, bonds at 88%,
Russian -4s at 102, and French 3s at 102, United States
2 per cent, bonds are quoted at 107, and United States
4 per cent, bonds of 1925 at 138.
British consols

and No-

1898,

1901, the interest bearing debt stood at

less

cash

the

Treasury, $327,308,877;

making debt, less cash, $058,107,183, a reduction of $98,550,297; or having now no regard for the increased cash
the
in the Treasury, we find that the face amount of
which stood on November 1, 1899,
now stands (August 1) at $985,470,000,

at $1,010,049,020,
a reduction of $00,572,900.
But this is only a partial statement. Concurrently
with this reduction of the face of the debt, there has

been a reduction almost equally great in the amount of
Interest which then burdened the future. Of the moneys
coming into the Treasury during the short period under
review, $43,582,005 has been used to settle and discharge
interest which would likewise have been a charge upon
the Treasury during the next four to eight years. By
the use of something more than forty-three millions,
interest to the amount of $54,548,424 was settled, the
difference of nearly eleven millions being a nominal
Treasury.
This operation was, as you all understand, incidental
to the refunding of a portion of the public debt into the
new 2 per cent, bonds. To briefly summarize: Within
two years the principal of the public debt has been reduced by the sum of $00,572,900; the interest has been
profit to the

cease.

vember 1, 1899.
On August 1,

may throw some

light

upon

this

comparison so

favorable to us if I particularize a little. On April 1.
1898, the interest bearing public debt stood at $847,300.680. Deducting from this the cash then on hand in the
Treasury, amounting to $226,100,944. leaves $621,199,730.
Incidental to the war with Spain, bonds were issued
to nearly two hundred millions, so that on November 1,
1899, the interest bearing debt

had risen

to $1,030,049,-

deducting cash in the Treasury, amounting to
$289,391,540. the debt, less cash, stood at $750,057,480. an
020. or

anticipated and settled to the amount of $54,548,424, a
total reduction of $115,121,384, while the annual cost for
carrying the debt in the future has been reduced from
$40,347,884 annually, where it stood on November 1, 1899,
to $29,723,019, a net saving annually of $10,024,865. The
cash in the Treasury has been increased from $289,000,-

000 on November 1, 1899, to $327,000,000 on August 1,
1901, a gain of $38,000,000. On November 1, 1899, of the
money in the Treasury, $100,000,000 in gold was regarded
as a traditional reserve for the redemption of the legal
tender notes.
$150,000,000

On March 14,
was specifically

and abundant power placed

of the Treasury to restore the

1900,

by solemn

statute,

pledged to this purpose
the hands of the Secretary

amount should

become

impaired.

These facts go far to explain the superior credit of
the United States in the world's markets, as illustrated
by quotations on the public bourse. The facts show a
condition of unparalleled strength in the public Treasury.
Nor has this strength been gained by exhaustive taxation
of individual or corporate resources. Every evidence
exists of a general well-being in industry and trade.
Looked at from the standpoint of true statesmanship,

would appear that the present is the most propitious
hour in all our history, and as favorable as any period
we may hope for in the future, to enter upon reasonable
and judicious measures to eliminate all elements of
financial weakness which experience has brought to
light, and to perfect our now faulty system of currency.
We need judicious, careful reform; we do not need
it

revolutionary measures. In these directions, looking to
a more perfect status in our public Treasury, and to
better conditions in banking and currency, no body of
men are better situated to bring the influence of careful
thought and patriotic study than those who constitute
the

American Bankers' Association.

BANKERS' CONVENTION.

The Medium of Exchange and
By
ilr.

sociation:

Mr. Motley in a preface to bis admirable bistory says,
in effect, that before any man sbonld address an audience on an important subject be sbould make it clear by
what right be ventures to discuss the subject. Accordright

becomes my duty to show by wbat
audience
of experienced bankers upon
address an

tbe subject of "

The Medium

Exchange and tbe Bank-

ing Function."
1

Banking Function,

Stickney, President Chicago Great Western Railway Co.

President and Gentlemen of the American Bankers' As-

ing to this rule

the

speak, gentlemen, by the right of investigation, as

and varied experience in the banking business. It may surprise you when I say that I bave been
actively engaged for nearly a quarter of a century in
the banking business in many of the principal cities of
this country. The difference between j our experience
and my experience is tbat your experience has been on
tbe inside, wbile mine bas been on the outside of the bank
well as a long

The most which can be said about money as a ined.uin of exchange is that it may be used as such, but, as
a matter of fact, it is seldom, practically never, used as a
medium of exchange except in petty transactions.
THE MEDIUM OF EXCHANGE

CREDIT.

Stating the fact affirmatively, the medium of exchange in some petty transactions is money, and in
many petty, and in all the larger transactions, it is
credit.
Legitimate credits for use as a medium of exchange are produced by buying for the purpose of selling, and they are extinguished by buying for the purpose of consumption. In short, their creation has reference to production, and their, extinction to consumption.

Such credits expand as production and commerce expand, and contract as production and commerce con-

counter.

Tbere are two points of view; but the fundamental
principles of the function of tbe bank must be studied
from a broader point of view than tbe experience of any
Tbe modern
one person, be he customer or banker.
commercial bank has been evolved from tbe experiments and experiences of more than two hundred years,
and he who would have a clear conception of its possibilities must add to his own experience a knowledge of
the history of

its

In preparing

evolution.

address

have availed myself of the

history of banking by standard authorities.

Tbe medium of exchange is an essential part of commerce as distinguished from barter. The necessity of a
medium of exchange grows out of the fact, which cannot be too often repeated because so often overlooked,

—

that the ultimate purpose of all commerce is to use the
unique and rather satisfactory expression of the present Secretary of the Treasury—" to exchange things for
things." When " things " are exchanged for money the

Whatever commodity is willis only half done.
ingly accepted to represent " things " during the process

process

of the suspended exchange

WHAT COMMODITY

IS,

IN FACT,

medium

of exchange.

THE MEDIUM OF EXCHANGE?

is the medium of
but a small fraction of the fact. The word
" money " has a definite meaning, and in the late
" campaign of education " the subject of money was so
much explained (chiefly by people who had no comprehension of its meaning), that it would seem like wasting
time to consider its meaning, were it not a patent fact
that the word is so constantly misused.
In common parlance the word money is synonymous
with wealth and capital. It is said of certain men that
they have " lots of money," meaning that they possess
great wealth; again, that certain merchants have " large
amounts of money," meaning that they have large capital, while the fact is that rich men and great merchants
have very little money. It is probably no exaggeration
to say that the average poor man possesses more money
than the average rich man.
But it may be said that this is a mere play upon
words that tbe rich men do not cany their money in
their pockets, but have money on deposit in banks. This
proposition presents another popular misuse of the word
money. No man has money in the bank. A credit on a
bank ledger is not monry— it is simply an evidence of the
bank's indebtedness, which may or may not be redeemed, like any other indebtedness. Whatever money
a bank may po
(which i> alwayfl less than its inbelongi to the bank.

The usual statement that money

exchange

—

The merchant who creates a credit deposits it in
bank and uses it first, then it is transformed by
check time after time, effecting exchange after exchange,
until it is finally redeemed. The intermediate exchanges
tract.

his

are said to be made with cash. Therefore, while it is
true that all the larger transactions of commerce are effected with credit as the medium of exchange, it does not
follow that all merchants go in debt for their purchases.

The few merchants who do not go
by others.

in debt use credits

Avhich have been created

THE BANKING FUNCTION.
The modern commercial bank is a most useful

insti-

but it has no independent function. It is a coworker with the merchant.
There are many misconceptions of the banking function, growing out of the technical but unnatural meaning which, in banking parlance, is given to the words
" deposit " and " borrow." When the public is told that
the bank deposits have increased a billion and five hundred millions of dollars since the panic, it is regarded as
evidence of an enormous increase of money. The increase of bank deposits simply means that conditions of
trade are such that merchants have increased their indebtedness, which indebtedness has been exchanged for
bank credits, and by this means the indebtedness of the
banks has been increased. It is an increase of indebtedness which is available as a medium of exchange, instead of an increase of money. There has been but a
comparatively slight increase of money. During the
period in which the so-called deposits of the National
tution,

banks have increased $1,500,000,000, the money in the
banks has increased only $207,000,000.
Regarding the banks as money institutions, in connection with the use of the words " deposit " and " borrowing," confuses the mind as to the real nature of the
and borrowings. It is the general understanding that the sequence of the banking business
is first a deposit, then a loan, and therefore the bank's
so-called loans are limited by the amount of the so-called
so-called deposits

deposits.

Let us examine these apparently self-evident, but, in
connection with an ordinary
so-called borrowing. Suppose I borrow in the usual way
$100,000 from a bank. The transaction would increase
the bank's deposits $100,000, not before, but at the same
instant of the loaning, and, although it would increase
the bank's deposits $100,000, It would be no evidence of
an Increase of wealth in the form of money or otherwise.
Alter I had borrowed the $100,000, the bank would
have no less money and I would have no more money. I
would have only a credit of $100,000 on the bank ledger.
It was not a borrowing of money but a swapping of
I
have traded my note as evidence of my incredits.
debtedness to the bank, in exchange for a book entry as
evidence of the bank's indebtedness to me. It is true I
fact, false propositions, in

BANKING SECTION.
may

transfer the indebtedness of the bank by check
(which is miscalled drawing the money from the bank),

but in that case my check will be deposited in the same
some other bank, and that $100,000 note would remain

or
a

part of the so-called deposits of the banks, either in

the original or in

some other bank,

until

was

finally

redeemed.

bank increased its deposits by inand if the deposits of all the banks be

In this case the

creasing

its

loans,

the volume of credits. It only affects the individual merchant, and perhaps his individual bank, by transferring
the burdens to other merchants and other banks. But
the futile attempts once commenced in a large way force

values lower and lower until some of the merchants and
producers are ruined. When some of the merchants and
producers are thus ruined, some of the laborers are deprived of employment. When some of the laborers are

unemployed

their ability to

consume

curtailed,

which

considered as a whole, it will be found that the deposits
increase when the loans increase. The deposits, in the

further reduces the demand, which still further reduces values, ruins still other merchants and producers,

main, are produced by the so-called loans.
The fact is that in most of the bank transactions
thero is no borrowing, or lending, or depositing. They

deprives more laborers of employment, which still further reduces consumption and values and ruins still
other merchants and producers, and finally ruins many

are simply credit transactions,

which

a swapping of

credits,

matter of bookkeeping increases both the

lie

still

of the banks themselves.

WHY BANKS

STOP SWAPPING CREDITS IN COMMERCIAL

and the so-called loans in the same
amount and at the same time. Practically all the socalled deposits are made by swapping the bank's credit
for other credits, in the form of promissory notes,
checks, drafts, etc. There are small streams of money
flowing in and out, but the. incomings and outgoings are
so nearly equal that a writer has said, " a bank's cash
resembles a column of gold with a slight ripple on the

given the subject special consideration believe that the
withdrawal of balances by customers compels the banks
to restrict their loaning during commercial crises, and
that many withdraw money which they keep in safe

surface."

money from

In this country the greatest ripple on the surface of
the reserve is produced by the daily clearances. With a

of holding

so-called deposits

properly organized system of banking no

money what-

ever would be required. The daily balances at the London Clearing House are settled without the use of a
penny of money.

Swapping

credits

mercial bank.

the function of the modern com-

Its business consists in scrutinizing in-

and in giving its own credit in exchange
such
individual
for
credits as are acceptable and thus
furnishing an abundant supply of the medium of exchange of commerce. To regard the bank as a mere
money lender is to belittle its important and useful func-

dividual credits

tion.

say that I like the word
swapping," because it expresses my exact meaning,
and even boys know what it means. The boys swap
jackknives and swap marbles. The banks swap credits.
In this connection

want

METHODS OF EXERCISING THE BANKING FUNCTION
Having stated, as clearly as my ability permits, the
nature of the banking function, I shall now venture to
speak of the methods of exercising it, and of some of the
difficulties, owing to the restriction of the laws, of a
proper exercise of the banking function during commercial crises. To present my propositions clearly, I must
repeat that the creation of commercial credits has rela-

production and their extinction to consumption,
and there is always a lapse of time between production
and consumption. As consumption cannot be unnaturally accelerated, and as the medium of exchange once issued cannot be ultimately redeemed until products are
demanded for consumption, a vast volume of such currency must be always outstanding, and as production
and consumption are continuous processes the function
of the bank is also continuous.
The bank, therefore, which fails to continuously exercise its function of swapping credits, fails to perform
its part and its duty, and does incalculable mischief, because the normal value of products can be only maintained by the merchants with the assistance of the banks,
carrying them with a steady hand until they are retion to

quired for consumption.

When the banks, from whatever cause, refuse to perform their part by refusing to swap credits with the
merchants, the merchants are compelled to stop buying
and to vainly attempt to force their stocks upon the consumers by lowering prices. Such attempts must always
be futile, because the consumption which produces the
ultimate redemption of credits is necessarily a uniform
hand-to-mouth process. The merchants who do it early
may unload upon less foreseeing merchants, but passing
credits from one merchant to another does not reduce

CRISES.

Probably a majority of bank managers

who have

not

deposit vaults.

While

a well known fact that a few withdraw
the banks in times of panic for the purpose
in their own possession, an examination of

the accounts of the National banks, as compiled by the
Comptroller of the Currency, is convincing that in the
panic of 1893 such withdrawals were inconsiderable; in
fact, less than the hard times forced out of the pocket

money

of the people into the banks.

Otherwise, at the

pinch of the panic, there would have been less money in
the banks than before the panic commenced. But the
Comptroller's statistics show the astonishing fact that
at the pinch of the panic, when the so-called deposits
had decreased $314,000,000 and had reached their lowest point, the National banks possessed $26,000,000 more
money than in 1892, when business was brisk and the
banks were swapping credits more freely than ever before.

This would seem to prove that, whatever else may
have been the cause of the panic, it was not a shortage of
money in the banks, and that it is a mistake to suppose
that the difficulties of the banks during the panic years
were due to withdrawals of money for the purpose of
hoarding.

The enormous decrease in so-called deposits was about
equal to the decrease of the so-called loans, and was due
to the refusal of the banks to continue swapping credThe

its.

difference

between the decrease of deposits and
was only $13,000,000—less than

the decrease of loans
four cent.

THE LAWS ARE RESPONSIBLE.
prepared to repeat and stand by the
statement that the reason of the enormous contraction
While

medium of exchange, or, in other words,
the enormous decrease in so-called deposits and the consequent destruction of normal values, followed by bankruptcy of merchants and distress of the unemployed,
of the available

was

the action of the banks in contracting their so-called
am not prepared to say that it was the fault of
the banks or their managers. That the American bank,
as at present organized, should falter at every minor
commercial crisis, and stop, as far as possible, the swaploans, I

ping of credits in a major panic seems inevitable.
is due to the lack of a banking system.

The

necessity

The American system

of banking
about, but, in fact, there is no system.
defines the

word

system

" as

meaning

often talked

The dictionary
"

a whole plan

or scheme consisting of many parts connected in such a
manner as to create a chain of mutual dependencies and
supports." The banks of this country are not parts of a

whole plan connected in such a manner as to create a
chain of mutual supports, but they are local and independent institutions. In times of commercial crises each
must depend upon itself, and as it is evident that one
bank, without the co-operation of the other banks, can-

BANKERS' CONVENTION.

not support the enormous credits of a commercial nation like the United States, each begins to scramble to
Increase its cash reserve al the expense of the other

banks— for where
reduce

bank

come from?— and to
weakness compels each
prey upon the other banks, and to adopt David
else

its liabilities.

the cash to

Its isolated

Harum's version of the golden rule, "do unto the other
banks what you know they will do unto you, but do it
fust."'
This unseemly scramble after money to maintain
never witnessed in any other commercial nabecause all commercial nations except the United
States have systems of banks so connected that each
bank constitutes a mutual support to each other bank.
Practically all commercial nations except the United
States have adopted the Scotch system of branch banks,
with a connecting link— a central bank— which is the

reserves

tion,

bank

banks and holds the reserves of all.
where this system of banking has been
most highly developed, the Bank of England holds the
gold reserve of all the banks, and of the nation itself.
The reserves of the other banks are credits at the Bank
of England Under this system, instead of all the banks
scrambling and competing with each other for the money
to maintain their individual reserves, the Bank of England alone does the scrambling with no competition.
Under this system gold which is withdrawn from any
bank is obtained from the Bank of England, and after
circulating for a short time in domestic exchanges is returned in the ordinary course of business, through the
of the

In England,

same

or some other bank, to the vaults of the Bank of
England. Therefore, practically the sole leakage of re-

serve

for exportation

when

the conditions of foreign

exchanges are adverse. The duty of
eign exchanges is delegated solely to
land. England has no treasury— no
United States has a treasury.
If you examine the statements of

managing the
the

Bank

for-

of Eng-

nation except the

the various banks

of England, outside of the statement of the Bank of England, you will not find among their liabilities any " in-

debtedness to other banks." which constitutes about onehalf of the liabilities of the banks in the reserve cities of
this country, for the reason that their country correspondents are but branches of their own bank.
This
eliminates one of the most dangerous features of American banking in times of extreme panics.
Such systems of banks can, and have, for more than

swapping credsame as in booms.
banks during commer-

half a century, exercised the function of
its

with their customers

The

panics the

repression exercised by the

cial crises
It

don

was

effected through the interest rate.

this

system which enabled the banks

Lon-

at the time of the Barings' failure, the largest sin-

known to history, to not only continue the exercise of the banking function, but to increase
gle commercial failure

their liabilities $125,000,000 by

assuming the

liabilities

of the Barings. In London the bank rates advanced to
six per cent, for a few days— in New York the outside
rate advanced to eighty-six per cent., and the banks quit
business altogether.

THE BANKING LAWS.
Now,

it is interesting to inquire as to the banking
laws under which these systems are organized. I have
been unable to learn that there are any laws in England
or Scotland especially relating to banks, except the laws

restricting the issue of

bank

notes.

respects the
Banking corpora-

defiance of the law, have stood together for a few days
as a system.
There is no English law requiring any reserve whatever to be held against so-called deposits. But the Bank
Act of 1844, passed with great public favor, names a
minimum of reserve to be held by the Bank of England
against its outstanding notes. This act was expected to
correct everything which was wrong, and especially it
was to forever prevent speculations, bank failures and
panics.

reits

required the bank, whenever that
limit was reached, to stop discounting.
But history says that within three years the law. in-

circulating notes.

stead of preventing, produced every economic disturbance which it was expected to prevent, including a currency panic. The legal minimum of the reserve was
reached, and, in obedience to the law, the bank stopped
swapping credits, and merchants who had received loans
Avere called

upon

new them. The

to pay, without being permitted to re-

greatest distress followed.

Merchants

could pay the loans only by selling their merchandise.

London merchants are said

have walked the streets
at midnight, offering their goods at any price. Values
disappeared. Consols and exchequer bills were offered
at enormous discounts but could not be sold. The most
extravagant rates were offered in vain for the use of
money.
to

Finally, in the midst of universal distress, on peti-

by tens of thousands, the very ministry
which had procured the passage of the law was compelled to ask the bank to disregard the law. The bank
resumed swapping credits, and history recites that " in
ten minutes after it was known the panic was ended."
Merchants who had been clamoring for discounts, as
soon as they could get them, did not need them, and
the smart ones, who had borrowed early and withdrawn
actual money, brought back the gold which they never
needed and begged to be relieved from the payment of
tions signed

interest.

instance

two million pounds

recited of one firm returning

sterling ($10,000,000) gold,

which

it,

foreseeing the inevitable, had borrowed early, and beg
ging the bank to relieve it from the further payment of
nine per cent, interest.

Again, in the panic of 1857, the same history was repeated, except that the ministry refused to act until the
total gold reserve in tne Bank of England and its
branches was reduced to only 358,208 pounds sterling, a
This was practically the total agtrifle over $1,700,000.
gregate reserve of all the banks of England at the close
of business November 12th, 1857. I ask you. gentlemen,
to think for a moment what it would mean in this country if the aggregate reserve of all the banks and the
United States treasury was reduced to $1,700,000!
Starting with a total reserve of only $1,700,000 on
the night of the 12m of November (the day the permission was given to disregard the law), the bank made
new loans— that is, swapped credits, besides renewals,
in the sixteen remaining days of November, amounting to
$30,000,000. That is to say, with only $1,700,000 reserve, the Bank of England expanded its loans in eighteen days $36,000,000, and its reserve increased day by
day: Following the example, the other banks expanded
their credits.

Here are

all

banks are as free as the merchants.
tions are organized under the same general acts as mercantile, manufacturing and other corporations.
The
American laws require certain minimum percentages of
reserve, and compel the banks when that percentage is
reached to do the very thing which banks should never
do— viz., arbitrarily suspend the exercise of the banking
function. This provision of the law was intended to be
a safeguard but opon several occasions the observance
of the law would have brought ruin upon all the banks.
On thes'
the New York City banks have boldly d
_
ded the law in respect to the reserve, and, in

The clause most relied upon fixed the gold
Bank of England definitely, as against

serve of the

the

facts well

bank stopped loaning,

worth your consideration: When
in

reserve decreased; as soon as

order
it

to protect the reserve, the

resumed loaning, the reservi

increased.

A writer says: " This great crisis of 1857. far exceeding in intensity that of 1847, added another proof upon
proof that, in a great commercial crisis, the restrictive
practice will bring about universal failure of merchantand bankers, and that the expansive practice is the only
one which can save both."

THE '93 PANIC AGAIN' roNSIDERFD
Before making further citations of history, I desire
recur to the conditions which prevailed in the panic

BANKING SECTION.
1893. As I have said, tiie medium of exchange was reduced by the action of the .National banks in refusing to
swap credits to the extent of more than three hundred

There is no way to tell how great a
.reduction was produced by the action of the State banks
and the trust and other companies which exercise the
functions of commercial banks. If their reduction was
the same as the .National bunks (and there is some evidence that this estimate would be correct), the aggregate reduction of the medium of exchange was the enormous amount of six hundred millions of dollars. This
produced an apparent shortage of money to the same exmillions Of dollars.

tent.

Now, gentlemen, it 1 were to mention the classes of
property which have intrinsic value, and which by reaBon of their prime necessity should naturally maintain
fairly uniform and normal values, I would name the
homes, which give shelter; the farms, which produce
food and clothing: the manufacturing plants and the
warehouses and buildings necessary for trade. But it is
a notorious fact that these classes of property had practically no market value during the panic, and that every
man who had all his savings invested in equities in such
;properties, no matter how large the equity, was ruined.
1 would also name the products of the farms— the food,
the cotton and the wool— and the products of the factories, as property of necessity, entitled to maintain a
fairly uniform and normal valuation, approximately
equal or exceeding the cost of production. But if I were
:asked to name the commodity of the most obvious intrinsic value. I would name labor, because it is the basis
•of all

wealth.

market value of the products of the farms and the factories was abnormally low,
and it was estimated that there were more than two million laborers in the United States who were unable to sell
their labor at any prioe and millions more who were comYet, during the panic, the

pelled to sell their labor at a reduced price.

The commonly accepted explanation of these phenomena is that market values are governed by the relation of supply to demand, and that the panic had been
preceded by activity in production to such an extent that
there was overproduction. It is my contention that the
•extraordinary relation of supply to demand was not due
to overproduction, but to under consumption. There was
not a minute during the panic in which all the homes of
this country would not have been in demand for occupation, and there was no time during the panic in which
•the products of the farms and of the factories would not
have had their normal consumption if all the consumers
of the country had possessed the means of obtaining
them. The two million laborers who tramped the country, clothed in rags and with insufficient food, had capacity to consume everything their labor would have
produced had the captains of industry been in position
to set them to work, and thus the normal equilibrium between supply and demand would have been maintained.
The reason why the captains of industry were not in
position to set these laborers to work was apparently the
lack of money, but, in fact, it was the shortage of six
hundred millions of dollars of the medium of exchange,
resulting from the banks unduly restricting the function

swapping credits.
There are no classes of the people so much interested
in the introduction of a system of banking which has
•capacity to continuously exercise the banking function
of

as the debtors

and

laborers.

These are prosperous days. The conditions of trade
are such that the merchants and banks have expanded
their liabilities beyond all precedents. It is a period of
confidence, in which everything goes, and there is no
lack of the medium of exchange. But I warn you not
to believe that the country has grown so rich that there
will never be another period of distrust.
Substantial wealth is created by the slow processes
•of industry, combined with skill and the use of capital.
Bubble wealth is created by the rapid process of placing

one piece of paper

in the possession of

as collateral security for

a trust company

Some of
bubble wealth which is now

two pieces

of paper.

the enormous quantity of
being created will sooner or later collapse. Such collapse should affect nobody but the bubblers. But without a system of banks which can sustain legitimate credits there will follow a panic which will again destroy the
market value of intrinsic values, ruin debtors, deprive laborers of employment, and create general distress.

PANICS PREVENTABLE.

Would

that

had the

ability to arouse the

American

people to the importance, of a banking system! In panic
after panic they have suffered, but their minds seem to

be possessed with the fatalism of the Turk—" it is the
will of Allah! " But I say it is not the will of God which
produces panics. History abundantly proves that such
panics as occurred in this country in 1837, 1857, 1873 and
1893 are preventable by a known system of banking.
This system of banking originated in Scotland, separated by only an imaginary line from the then independent and isolated banks of England. The superiority
of the system was demonstrated through commercial
crisis after crisis, in all of which the Scotch banks remained solvent and continued the exercise of the banking function, while the independent banks of England
suspended the banking function and fell like rows of
bricks.

In 1825 a Parliamentary Commission developed the
fact that in the panic of 1793 upward of a hundred English country banks had failed. In seven years, 1810 to
1817, six hundred failed, and in the panic of 1825, up to
the date of the inquiry, twenty-six failures had taken
place. The banks which failed paid but a small percentage of tneir indebtedness. Before the same Commission Mr. Gilchrist, a manager of one of the Scotch
banks, testified that within his recollection only one
Scotch bank had failed, and it immediately paid fourteen
shillings on the pound, and ultimately paid all its liabilities.

The

superiority

the

system

having been thus

proven, by a gradual process of amalgamation of independent banks the system was introduced into England, and the superiority of the system over the want of
system in the United States has since been demonstrated.

In the great panic of 1837-1838 more than a thousand
banks, practically all the banks in the United States,
failed. In England and Scotland not a bank failed. In'
1856 nearly every bank in the United States closed its
doors and went out of business, and but few of them
ever resumed. There wr as a great commercial crisis in
Great Britain, but not a bank in England or Scotland
failed. Again in 1873 a great many banks in the United
States failed, but there were no bank failures in Great

Glasgow Bank, which had
been practicing fraudulent methods for years.
In the panics of 1890-1893, which are now fresh in
the memory, when bank after bank failed in the United
States, and all the banks in New York City suspended
payments and only certified their customers' checks,
there was not a bank failure in Great Britain. And
more, there was not a day when any bank in Great BritBritain, except the City of

ain refused to extend its usual credits without unusual
restrictions, except for about a week in 1890, at the time
of the Barings' failure, they put the brake on to the extent of raising the rate of interest to six per cent.
This system has been adopted by the countries of continental Europe. The United States is the only nation in

the world of commercial importance which has not
adopted it. It is a remarkable fact that during the last
panic, while the commercial crisis was universal, there
were no bank panics except in the United States. In no
other country was the commercial crisis continued so
long, and in no other country did the people distrust the
solvency of their banks, and in no other country were

bank failures.
But it may be objected that the

thsre

situation

different

HANKERS'

54
in a

CONVENTION.

vast area of sparsely settled country like the United

States, lu reply

will say that along our northern boundcountry from ocean to ocean, much
more sparsely settled than the United States. Canada
ssesses R system of banks, lu Canada the same commercial conditions existed during the last panic as in
the United States, but only two unimportant banks of
the isolated and independent order went into liquidation,
and not one of their systems of banks excited suspicion
as to its solvency, and at no time during the panic did
any of them suspend the banking function of swapping
credits with customers.

ary

stretches

In 1893, 1S94 and 1895, wheu the great banks of New
York City dared not extend their credits a cent, the Canadian banks advanced millions to move the wheat crops
of my own State of Minnesota and the State of Dakota.
Little Canada, with scarcely five millions of people, occupying the stingy fringe of perpetual ice, with meagre
agricultural resources, few mines and only rich in her
forests of timber, was able to loan the credits to move
the abundant harvests of Minnesota and Dakota, solely
bj nason of her system of banking.

lu the olden days of small affairs in the banking business of New York City one of the banks having in-

creased

its

capital to the then

unheard of amount of

millions of dollars, a customer

made

five

application for an

unusually large loan. After some days of consideration
the directors declined, not because the collateral was
unsatisfactory, but simply because the loan was unusually large. Upon being informed of the decision of

remarked that, in his opinthat bank needed either an act of the Legislature

the directors, the customer
ion,

to reduce its capital to the capacity of its directors, or
an act of God to increase the capacity of its directors to
its
capital.
"When this great and rich nation has
reached the humiliating condition of playing second
fiddle in the banking business to Canada, it would seem
to need both.
It would seem that nothing short of a special act of
Providence would enable our lawmakers to investigate
the banking problem free from that political bias which
is an inheritance from a squabble between the Democratic and Whig parties over a petty appointment in the
Portsmouth, New Hampshire, branch of the Bank .of the
United States. The only question involved at the outset of the squabble was whether the bank or the Democratlc politicians of New Hampshire should appoint the
petty officials of the bank.
But Andrew Jackson and
the Democratic party cunningly magnified it, in the
minds of the people, into a contest to " preserve the liberties of the people against the encroachments of the
money power." And from that day to the present time
the legislation of Congress has been based upon the
supposed necessity of making the banks inefficient in

order to preserve the liberties of the people.

LEGISLATION.

banking system for a great nation like the United
States requires a central bank, with a head in the chief
commercial city, with branches in each of the commercial centers, which shall constitute the head and the
backbone of the system. This central bank should be
the bank of the banks, and the bank of the Government.

The Sub-Treasuries should be
bank should hold the reserve

abolished.

The

central

banks and of
the nation. The reserves of the other banks should consist of credits on the ledger of the central bank.
Subshould be formed, consisting of beads in important commercial centers, with branches scattered over
of all the

the country, thus carrying the facilities of great, strong,
solvent banks to every hamlet and cross road in the
country.

The only legislation required is the repeal of the subtreasnry laws, and of the provisions of the present National bank law which in any manner restrict the busiOf swapping credits, and which prevent banks
from conducting the banking function in more than one
locality.

would not be necessary,

or, Indeed, desirable,

bank a special charter, with or
without special privileges. The banking business is a
part of commerce, and commerce is an individual, not a
governmental, function. The commercial bank is a coworker with the merchant, and in the conduct of its legitimate business of swapping credits should be as free
as the merchant. Grant the banking business this freedom, and the system, including the central bank, will
form itself along the lines of the economic laws to
which alone commerce by right owes allegiance.
Such a system, history conclusively proves, has the
capacity to continue exercising the banking function,
and thereby sustaining normal values, during the fiercto grant the central

crises.
A system having such a capacconnection with the genius for trade possessed by
the people of the United States, and the wealth of its
natural resources, may make New York, instead of London, the chief exchange city of the world, and the United
States, instead of England, the creditor nation of the
world— without it, never.
The creditor nation fact is not altogether a matter of
superior wealth or capital. England is the creditor nation, but it may well be doubted whether she has as
much wealth or capital as the United States. It is a
matter of organization of capital. Let me illustrate: If
I have $1,000,000 of capital, as an individual I can only
loan $1,000,000. But if I organize a banking business
with my capital and exercise the banking function of

commercial

est

ity, in

may

many

swapping

credits, I

lions, just

as some of your banks with a million of cap-

ital

loan

five, ten,

collect interest

twenty and even more

millions.

mil-

Eng-

land has so organized her capital by means of her magnificent banking system that she is the banker of the
world and collects tribute from all the nations of the
world in the form of interest, not for the use of her
wealth or capital, but for the use of her credit. Paradoxical as it may sound, it is literally true that by means
of her splendid banking organization England collects
interest upon millions and millions of her own indebtedness to other nations. It is a very profitable business
to collect interest on what one owes, and it is this which
makes England the creditor nation. The United States,
as its capital is now organized, can only loan to foreign
nations actual capital, and as long as these conditions
last cannot compete with a nation which can loan all it
dares to owe. It is not more capital, more wealth, or
more money which the United States needs in order to
become the creditor nation, but a better organization.
The fact that approximately a third of the money of the
United States is locked up idle and useless in the Treasury is evidence that we have money enough.
The capital engaged in banking in the United States
is much larger than the capital engaged in banking in
Great Britain. I investigated this point a few years
ago and found that the paid-up aggregate capital of all
the joint stock banks of England, Scotland and Wales,
including the Bank of England, was only $345,000,000,
while the capital of the National banks alone of the
United States at the same date was $(548,000,000. The
medium of exchange produced by the banks of Great
Britain was $3,822,000,000, while the medium of exchange produced by the National banks of the United
By their superior
States was only $2,000,000,000.
organization the banks of Great Britain, with approximately half the capital, produced nearly twice the
amount of the medium of exchange.

was a dream

of Sir Walter Raleigh, as

whoever controls the seas
will control the commerce of the world, and whoever
controls the commerce of the world will control the
wealth of the world, and therefore the world itself. But
I venture to suggest that you may subsidize ships to
sail the seas, and your armies and navies may carry
the flag to all the islands of the seas, but you will never
control the commerce of the world, nor the wealth of
the world, nor the world itself, until yott have a bank-

pome

of our statesmen, that

BANKING SECTION.
which can manage the exchanges of the
world during commercial crises, and maintain at all
times a fairly unitorm rate of interest.
I would like to ask those statesmen who seem to
think that carrying the flag at the tail end of ships
changes the course of trade, at what price a banker
in Manila will buy time drafts on New York against
consignments, as long as he knows that by the time
the draft reaches New York for rediscount the current rate of interest may be. any rate between two
per cent, per aunum and a quarter of one per cent, per
day, or that the banks of New York may then refuse to
rediscount at any rate because they are scared; and on
what terms could the Manila banker reimburse himself
by selling to importers drafts on scared banks!
1 would like to ask them what they propose to do in
the next panic. Perhaps they expect that the President
ing system

historical facts

A ssets
By Hon. James H. Eckels,

of industry in notion,

gettiug to be a very old story with
of the American Bankers' Association.

feel that I

members
Many times heretofore

the

have had the pleasure of addressing this Association upon public questions and
undertaken to discuss before them questions of banking
interest. I do not flatter myself that, upon this question
which I am this day asked to discuss, I can elucidate it
beyond a knowledge which you already have upon the
subject, or bring to bear any new arguments or enunciate any new facts. At the best all I can accomplish
is to restate some old things, and if possible, press with
a little force upon you the necessity of looking into
and inquiring as to whether or not the note-issuing
functions of the national banks of this country are
what they ought to be. I have read with the greatest
interest the papers presented to this Convention on yesterday, by the distinguished Secretary of the Treasury
and by one of the leading forces in the railway world.
Both were thoughtful in suggestion, and may well be
considered from the standpoint of economic science by
each member of this Association, as well as by the
citizen at large.
I agree with the Secretary of the
Treasury that the financial and economic system of this
country has not reached that point of development
where a people of so much progress, a people of so much
1

much force as the people of the
United States have a right to expect that it should. It
is faulty, largely because of circumstances, and not because of a desire on the part of the people to have a
faulty system.
energy, a people of so

would

much

and labor

fully

to see the lesal tender issues of

employed at norbanks is
compete

also claim that such a system of
this country to successfully
enable
necessary to

mal wages.

commerce of the world.
stand upon these propositions.

in the

in no respect resembles a
does not restrict competition. In a visit to a
town of only 4,000 population in British Columbia, I
found branches of five of the great Canadian banks. Besides, loss of a life's savings by the insolvency of banks,
bankruptcy of solvent debtors, distress of families reduced from comparative affluence to want, lack of labor,
a bed on the bare ground in summer and on the bare
floor of a police station in the winter, soup kitchens,
and other incidents of the panic, are no part of the lib-

Such a system of banking

trust.

erties of the people.

appeal to you as representatives of the banking inand as patriotic citizens, to give this important
matter more than a passing thought. This subject is incomparably of more importance than any detail of internal bank management. Have the courage to at least discuss it, and if thought wise, put the machinery in motion for another campaign of education. The subject
only needs to be properly presented to receive the supI

terests,

port of the people.

Cm rren cy

President Commercial National Bank, Chicago,

Mr. President, Ladies and Gentlemen:

in support of the

the capacity to so support legitimate credits during such
crises as to maintain normal valuations of property, and
thereby preserve the legitimate traders, keep the wheels

merchants of the world, stating that there is a panic,
that half of the banks are " busted," and the remainder
are so paralyzed that they will be unable to do business
for probably three years, but that he hopes foreign merchants will consign their goods to the United States, but
mnke their drafts on Canada
The wares of commerce follow the drafts of commerce, instead of a flag, and the principal reason why
Great Britain is the market place of the world's commerce is not because the union jack flies at the tail end.
of so many ships, but because every banker and merchant in every quarter of the world knows, within two
or three per cent, per annum, the exact value of a draft
for rediscount in London.

Gentlemen, I fear that the length of my address has
already wearied you, but I have stated only a few of the

which are available

proposition that the periodical panics which occur in this
country are preventable. I hope you will not misunderstand my proposition. I do not claim that a system
of banking has been devised which will prevent periods
of undue speculation, followed by commercial crises in
which the speculators will be ruined, but I do claim that
there is a tried and proven system of banking which has

of the United States will issue a proclamation to all the

111.

Government not only imprisoned, but canceled and
removed permanently from the monetary system of the
country. There is always a possibility of their reissue
in a form that will be dangerous to the financial and
monetary interest of the country. I would like to see
not only that done, but I would like to see the complete
the

abolishment of the sub-treasury systems of the United
States. (Applause.) There never was any excuse for
the establishment of that system, except a bare political
necessity, and there is no possible reason now why it
should be continued. It stands as a menace to the trade
and commerce of the people of the United States, because each day it takes out of the channels of trade
and commerce much money of the country which could
be used legitimately for the purpose of that trade and
commerce, and locks it up there to lie in wasteful idleness, a menace to the stability of business and a source
of recurring danger to the financial interest of all the
people. It hoards money in great sums, or the representatives of money, disbursing it in large sums upon
the one hand, causing a possible stringency by the locking of it tip for a period of time, and, on the other
hand, causing an undue inflation by the possible throw-

ing of
So that

out in large amounts at unexpected -times.
believe the legal tender ought to be canceled,

the sub-treasury system ought to be
abolished. I believe that the business of the Government, so far as its fiscal undertakings are concerned,
ought to be conducted as is the business of the private

and

believe

individual or the large corporation, through the properly
provided channels of business, the banking interests
of the country, and when the Government's business is

HANKERS" CONVENTION.

56
so transacted, the legitimate functions

ot'

will bo restricted to the bare collection

Government

the

«>f

and

the

ot'

the Treasury
the revenues

disbursements

proper

thereof.
I
would go a step further than the Secretary of the
Treasury in dealing with the surplus revenues of the
Government of the United States. 1 agree with him
perfectly that the Government should hold no surplus
over and above a small working capital. If the Government needs any working capital at all, it ought to
be with the banks to go through the channels of trade
and commerce and to be an aid instead of a detriment
to the proper conduct of business. But I would go still
further. 1 would see to it that the surplus of the Government be restricted to the very smallest point possible.
Instead of taking unnecessary revenues from the
people to swell the surplus, I would leave those revenues
with the people, uncollected. (Applause.) I would restrict the revenues of the Government to a bare point,

where the credit of the Government nt all times could
be properly maintained, and the rate of taxation reduced to the very smallest point possible, because in an
excess revenue in an overflowing Treasury you have
always presented to you the dangers in the administration of Government, the great extravagance, and, on the

undue speculation; and when you
have extravagance on the part of the Government,
caused by unnecessary revenue, and when you have
undue speculation on the part of the people, you must,
of necessity, no matter how complete may be your banking system, whether it be a system of one great central
bank, or a system made up of many banks, have the danf a panic, which your banking system cannot prevent.
I am not in favor either of preventing panics by law, or
by law made banks or law made money. Panics are the
result in the first instance of undue extravagance upon
the pari of the Government, undue extravagance on the
part of lie people: and the "Be it enacted" of any
legislative body, whether it be the central Congress at
Washington or the attempted act of some State legislative body, cannot prevent the thing which the people
themselves have created.
There is, undoubtedly, much of good in the suggestion
of Mr. Stickney that there ought to be some one institution through which the fiscal operations of this
Government omrht to be conducted. Whether or no all
these operations should be conducted through a single
bank and the branches thereof is a subject that is open
liscussion, and where there may be honest differI
aces.
believe in great banks, and I believe in a
branch system of banks. (Applause.) Because, when
you have great banks, with great branch systems, you
necessarily have in the control of them not one, but
part of the people, of

•

many

policies.

believe in

them as

believe in great

combinations of capital being neither harmful to the
people nor detrimental to any political or personal rights
of the people. Great banking institutions in their derelopment in this country have, at no time, worked out

barm

to the people, either in the Individual or in their

Even the United States Bank, with
with all its introduction of political methundertaking to control political interest,

collective interests.
all its faults,

ods,

and

with

all

its
its

greal powers,

was

never, as

fiscal institu-

harmful to any business interest of this country,
or detrimental to the rights of any individual. The bttsiInterestfl of the country were conserved by that
irreat institution, and if it had been allowed to exist
on, despite its faults, it would have worked out to the
people more good than has ever been worked out by
the sub-treasury system which took its place.
(Applause.) For it would have given a uniformity of operation in the conduct of the financial operations of the
eminent It would have been the means of pretion,

Hng the doctrine

currency being engrafted
fiscal policy, and we should have had throughout this country a bank note issue uniform in character
and always redeemable, not in something that is suponto our

of a

fiat

posed to be of value because back of it is the legislative
enactment of the United States, but which would have
had value because in and of itself it had value.
There is no harm in great banking institutions, and,
thank God, the people of the United States have at last
recognized the fact that the best interests of the people
in all their monetary and financial operations are conserved by the banks and not harmed by them. The peo
pie have at last recognized the right of the banker toassert his right as a citizen, to discuss with force and
advise with reason upon every fiscal policy which it is
propesed shall be adopted by the people of the United
States. 'What has been the result? The result has been
that no longer any great political party will dare to
stand up and advocate it dollar which is not accepted
by the banking and commercial world as a dollar, proper
for labor or any other class of people engaged in the
daily pursuits of

life.

(Applause.)

They recognize the

fact— it is recognized beyond question— that as banks
have grown, as the instruments of credit have multiplied,
as economic policies of wise consideration and scientific
thought have entered into daily operations of the business of the American people, credit has grown cheaper,
financial operations have become more stable, and instead of harm being worked to the individual or to the
public, we have seen good. When was credit ever so
cheap as it is to-day? When were operations of so large
a character carried on with so much certainty, and so
much stability, as to-day, when the bank has become
the recognized financial institution of the country, and

guided by conservatism, by wise
and by a proper regard for the rights and
powers of the institutions themselves. And to that end
this Association has contributed its full share, and I

its

operations,

thought,

trust that in the future, in the discussions of other ques-

must present themselves in the eliminating
and monetary errors which still exist, this
Association, strong in its numbers, splendid in its makeup, representative in its membership, may add the full
force of its honest thought and its honest belief.
tions that

of financial

There never was a time when economic questions of
great interest could so well be discussed as at present.
There never was a time in the history of the country

when

there
was such great prosperity, so far
reaching in its character and so stable in its makeup.
There never was a time when the credit of the country
stood higher, or the credit of the individual at home
and abroad was greater. We have entered, not only
into the politics of the w7 orld, but we have entered Into
the world's greatest financial and monetary operations.
We have for our manufacturers the markets of the
world, and where once American enterprise has gathered to itself a market American genius always retains it. (Applause.) We have entered upon the world's
financial operations, and this country, rapidly passing
from a desert nation, sees the nations of the Old World
seeking her, and asking that we, a people not long since
in dire distress, aid them in undertakings upon which
they entered. We have, in addition, an administration
which commands the confidence of our people and the
admiration of the world. (Applause.) With an administration strong in the affections of the people, wise In
the policy it adopts, conservative in its utterances uponpublic questions, and careful of its acts, there is no
reason why we might not well, within the period of

the immediate life of that administration, discuss with
care and conservatism and frankness every public
for in such a discussion, always having In
mind to do the right thing, must rest the stability of
our Government and the preservation of the rights of

question,

our people.
Abolish the sub-treasury, keep the revenues of the
Government to the lowest point consistent with credit

and maintenauce of the dignity of the country, make

means of carrying on the fiscal operations
of the Government, carry with them the unnecessary
revenues of the Government, always maintaining the
the banks the

BANKING SECTION.

monetary system, and there remains
but a single thing to add to the advancement and the
prosperity of the American man of commerce, of the
man of labor, of the merchant, of the manufacturer
and of the farmer, aud that is in having engrafted onto
Ute national system a note-issuing power which, in
and of Itself, does not depend upon the deposit with
the Government of any bonds for the purpose of se-

cannot raise the revenue with which to meet the obligations of the Government. (Applause.)
L. V. F. Randolph, of New York: You are entirely
wrong, sir.
Mr. Eckels (.continuing) It is a contingency. The
note of the Government, whether it takes the indefinite
term of a legal tender note or the definite term of a
bond issue of the Government, is no better than the

curing that circulation.
(Applause.)
The suggestion
It was an old thing before the nationis not a new one.
al bank note of to-day was dreamed of or came into

financial stability of the individual citizen,

integrity of our

It was so well thought of before that more
one conservative banker of this country hesitated
a long while as to whether or no it was wise to adopt
a note secured by a deposit of Government bonds, as
against a note issued by the bank and secured only by
the assets thereof. It is criticised by many as a note
that might lead to danger, and speculation and harm.
But the man who so criticises it either does so because he
has only a remembrance of what occurred in the days of
wild-cat banking, in the days of small banking transactions, in the days when intercommunication was
hard, and where the interests of the banker, or the interests of the people, could uot be kept track of. But
all that has passed away.
It may be safely said that when the bankers of this
.country are prepared to accept as a necessity in the
.conduct of business a promise to pay, issued by their
bank, secured only by the assets of the bank, that that
note will be as safe in the hands of the holder as is
The national bank note, secured by bonds held by the
Treasurer of the United States, to-day. For no great
financial interest, no great business interest, will go
into any scheme until the assurance of its safety to all
concerned has been worked out to a proper degree. It
may be safely said further that it is impossible to have
an asset currency issued to-day which is not a safe
currency. It may be further said that by proper restriction, by proper care, by the accumulation, if you
please, for the present of a safety fund, as suggested by
,one of these Conventions, the note so issued restrained by
a proper tax would never be issued in such amount as to
cause undue speculation, or to bring about harm to
any interest. A note secured by the assets of a bank
composed, as they are, of commercial paper, having
value back of them, certainly is as safe as a note secured
by a bond of the United States, founded for its value
upon the property which the people possess.

existence.
f-hau

(Cries of

No, no, no," from various parts of the

house.)

For, if the bonds of the people of the United States
only rest upon the property of the United States, the

must be of equal value, as
they rest upon the property of the great financial and
agricultural interests of the country. (Applause.) If
the banks' assets are of no value, then your country is
bankrupt. (Again the speaker was interrupted with
cries of " No, no,") and the individual citizen is bankrupt
because the holdings of the banks of this country are the
great majority of the assets of this country.
(Applause.) Who holds your railroad bonds? Who holds
your mortgages? Who holds the note promises to pay
.of the merchant and of the manufacturer?
Who holds
assets of the banks, as a rule,

showing the savings of the individual citizen,
If you wipe out those things as of no
value, what value is a promise to pay issued by the
Government of the United States, which must find its
payment in the levying of taxes by the Government of
the United States upon the supposed property of the

the deposit

but the banks?

citizens of the

United States? (Applause.) I say that
note secured by the assets of a commercial bank is as
stable in the hands of the holder thereof, and is as likely, nay, is more likely, of redemption than is a promise

pay issued by the Government of the United States,
which depends upon the levying of taxes, which in turn
depends upon the importation of goods, and unless there
to

•is

importation of goods or internal revenue tax, you

and

there

on his part, then a promise
is no financial
to pay of your Government, in whatever form it takes,
(A voice: " You're away off.")
is a worthless thing.
(Mingled with applause and some demonstrations of disstability

approval.)

Well,

maybe

or patron of the

am away off; but where is the banker
bank but what to-day is willing to ac-

cept the certified check of the bank, or is willing to
accept the check of a citizen upon the bank, and, as
against the bank note, the check of the banker is so
infinitely greater that they are not to be talked of in

same breath. The bank note is but an incident of
banking. It is not the principal thing. It is the smallest instrument of credit almost that the bank issues,
and if these great financial institutions are of sufficient
stability, and have sufficient worth, to issue checks as
they do, to accept checks as they do, to put out drafts
as they do to keep in circulation, they keep of value
the great instruments of credit which make up the
transactions of the world, why, then, indeed, they must
be poor and bankrupt if they cannot maintain a small
part of their capital, at least, in the form of promises
the

pay on demand

made up

circulate as notes.

(Applause.)

what your banks posses, as
what your people possess, that makes their

In the last analysis

promises to pay of value, whether it is in the shape of
a check or in the shape of a bank note, as such, just as
it is the value of the holdings of the people and the
general honesty of the people that makes of value the
obligation of the Government of the United States,
whether it be a legal tender issue or a bond of the
United States. (Applause.) And you may put it down
as a certainty that if we ever had a bank note issue
secured by assets, made a first lien thereon, that bank
note will be as staple as the present national bank note
and a good deal more stable than the legal tender issue
of the Government was for a great many years. (Applause.) There will never be a suggestion on the part
of the bank issuing such notes that that note issued
for the value of 100 cents will be redeemed by the
bank issuing it in the shape of a repudiated metal of
only fifty cents value. (Applause.) Of course, there
may be dishonesties; there are dishonesties to-day. But
neither the power of the United States through a legal
enactment nor the power of the State, through its legislative body, can make honesty exist where there is inborn
dishonesty, and if a banker wants to be dishonest, you
cannot prevent him. If he wants to be dishonest, he
will be dishonest in issuing his drafts, and in his checks,
and in his handling of deposits, as much as he would
be dishonest in issuing notes which he knew he could
not redeem.
Don't measure this question by past traditions. The
bankers of this country and the people of this country
ought, in the discussion of every economic question,
rise above mere traditions and see the present situation
as it is, and deal with the present as the circumstances
of the present require. It does not make any difference that fifty years ago there were bad banking and
bad bank notes. We are a long way from fifty years, in
all our powers as a people, in all our wealth, in all our
occupation of new fields, and in our standing before
the world as a great power in financial undertakings,
and you cannot say that because fifty years ago there

were bad bank notes issued, that therefore there is
danger in the issuance of bank notes to-day. Fifty
years ago there were good bank notes issued by conservatively and honestly managed banks, and in the

BANKERS' CONVENTION.

years to come it may be safely put down that the conservative, wise and honestly managed banks will issue

no note, whether it be a covered or an uncovered one,
that will not be promptly redeemed at the value of
100 cents on the dollar when presented for redemption.
(Applana
We have got beyond petty views in politics. We
have seen eliminated the narrow partisanship of the
We have seen the wisdom and conparty adherent.
servatism and patriotism of a great people find expression

when

a great question

at issue, irrespective

(Appast party affiliations.
of party
quesWe ought, in the discussion of economic
plause. 1
tions, then, to test the question of what we are now,
traditions

and what our necessities are, and not what we were,
and by such discussion and by such patriotic attempts

may

be set down
that we will deal with this as with other economic
questions—with the sole purpose of arriving at the
If we have
right conclusion and doing the right thing.
an
overissue,
bean asset currency there is no fear of
cause the business interest of the country will not take
a single dollar more than the needs of the business
If it is regulated by a tax, not a dollar will
interests.
be kept out upon which taxes is paid, except as there
is use for that dollar, returning to the man who puts
it out a proper income therefor; but we will be relieved
of a pressing necessity which every banker meets with
to arrive at a

right conclusion.

each recurring

fall

Chicago, at least, we cannot get a single dollar of small
bills, except as we have them deposited in our banks

and draw them from

New York

Kauffman, Cashier

distinguished Senator of the United States in 1825,
when discussing the value of the territory lying west
of the

Rocky Mountains, made this most remarkable
"The ridge of the Rocky Mountains may be

utterance:

named without
ural

and

offense as presenting a convenient nateverlasting boundary. Along the back of this

ridge the western limits of this Republic should be drawn
and the statue of the fabled God Terminus should be

highest peak, never to be thrown down."
continued
for years to be the settled opinThat this
ion of many of our most distinguished statesmen is
shown by the unchallenged speech of Mr. McDuffie, over
the ratification of the Ashburton treaty, delivered in the
United States Senate January 25th, 1843, in which he
said: M What is the character of this country? Why as
I understand it, for seven hundred miles this side of the
Rocky Mountains, absolutely uninhabitable— a barren
and sandy soil— mountains totally impassable except in
certain parts, where there are gaps to be reached only
by going hundreds of miles out of the direct course. The
wealth of the Indies would be insufficient to construct
and maintain a railroad across the continent. Even if
this region was secured, of what value would it be? For
agricultural purposes, I would not give a pinch of snuff
for the whole territory. I wish it was an impassable
I
barrier to secure us against the intrusion of others.
the
Rocky
Mountains
in
placing
mercy
his
thank God for
raised upon

its

What has been

the answer

made by

the past fifty

remarkable speeches— a rapidity
growth
never before equalled in
and
of development
that section of the
world.
From
any section of the
despised territory lying west of the Rocky Mountains
that borders on the Pacific Ocean have been formed
three magnificent Commonwealths. California, oldest
and largest, with unequalled resource., containing the
financial and commercial metropolis of the coast, situated on a harbor renowned throughout the commercial
world. Oregon, commanding the valleys of the Columyears to these most

embarrass the

situa-

Why

ought the great banking interests of this coundependent upon such a system, and be confronted by such a recurring embarrassment?
The
question is worthy of thought and capable of a right
solution, and if this body in its wisdom and in Its extry be

and possessing the confidence of the people,
and trusted with all their financial and money bearing
interests, has but the courage to lead, you may be
assured that the business interests of the country and
the great mass of the people will follow.
(Applause.)
perience,

a country that we all may well boast of. Great
wealth, splendid in its history, magnificent in its
past achievements, all its interests, its well being, may
well enlist the patriotic thought and the best effort of
This

in its

every individual citizen, and
as

we owe

to ourselves

to the future, to, in all these questions, deal

with them in such manner as to still make this Government of ours more glorious and the American people a
still greater factor in the undertakings of the whole
round world. (Prolonged applause.)

Fidelity Trust Co.,

the Pacific

Coast.

Tacoma. Wash.

bia and Willamette rivers, with soil so fertile that
"

you

with a hoe, it laughs back a crop," with
magnificent harbors at the cities of Portland and Astoria, as well as Coos and Yaquina bays. Washington,
youngest of all, the Pennsylvania of the Pacific, with a
wealth of coal, iron, forest and agricultural land that
constitutes it an empire in itself, containing within its
borders Puget Sound, that matchless inland sea, the
Mediterranean of the Northwest, a harbor unsurpassed,
with two thousand miles of shore line. From the day
when the tidings of the discovery of gold on the South
tickle

Fork of the American River, at Sutter's dam, thrilled
the entire world, and, like a mighty loadstone, drew the
of intrepid " Argonauts of '49 " through
and hardships indescribable, across plains and
over mountain, almost every mile of the journey marked
with the headstone of some unfortunate adventurer, to
the Pactolian banks of California's auriferous streams;
and from the time that Dr. Whitman's " Old Wagon "
rolled through the passes of the Rocky Mountains down
to the valley of the Columbia River, demonstrating Irrefutably that Oregon was open to overland immigration, the development of that vast territory has never
flagged. Even the great cataclysm of the Civil War,
which reft North and South asunder, and for years

thousands
perils

plunged our country into the horrors of desolation,
scarcely even checked the remarkable development of
the Pacific Coast.

there."

tion there.

The Financial and Commercial Future of
By

having for the time being the

means at hand for moving the crops in the Northwest
and the cotton in the Southwest.
Your sub-treasury
takes all the money and locks it in idleness, and in

In those fifty years the territory for

which Mr. McDuffie would not give a pinch of snuff
has added billions of dollars to our national wealth. The
Pacific Coast States proper have a population to-day of
Dearly four millions, constantly augmented by a steady
stream of immigration, so that while they may never
be as densely populated as the Atlantic seaboard States,
we may confidently expect to see the census of two
decades hence show a population of fully twenty millions and a commercial development that will be the

wonder of the world.
That It is Impossible

the limited time at

dis-

BANKING SECTION.

The staidest and most consultative merchant and banker has time and again lost his conservatism and embarked his venture, mainly by reason of

give any adequate idea of the resources, products aud commerce of that region is evident when you
consider that its foreign commerce in 1900 was over
$200,000,000, and domestic commerce attained figures

the open sea.

equally large; that California alone shipped East over
fifty thousand carloads of deciduous and citrus fruits;

oceanic commerce.
There is no study more interesting or important to
the statesman, political economist, merchant prince or
financier than the growth and development of a nation's
commerce. Commercial history has shown us that the
greatest seaports have always sought the Northern latitudes. The relative position and accessibility of a State
to other States and nations has much to do with its
rapid development aud future greatness. Cities as well
as States have for a time grow n into prominence and
importance by virtue of being on some line or terminus
of commerce. There was a time when the gold and
jewels, the silks and rugs, the pearls and perfumes, the
spices, sandal wood and precious stuffs of the Orient
moved westward to the eastern shores of the Mediterranean, and thence by water to Italy, Spain, Portugal
and France. Along this line were situated the then great
commercial emporiums of the world. Alexandria, however, surrendered the palm to Athens; Carthage gave
way to Rome, Rome in later times to Venice, the Queen
of the Adriatic, which, in turn, yielded the sovereignty
of commerce " to the right little, tight little isle," whose
flag to-day is on every sea and whose ships are in every

2h.su

States of Oregon and Washington each required over forty thousand cars to transport their output
of lumber to the various sections of the Eastern States
aloue; that the wheat crop of the latter States for 1000
the

that

which California added
twenty millions more, the greater part of which was exported around Cape Horn to the markets of Liverpool
or to Hong Kong aud Shanghai, in the shape of flour;
that the bank clearings of San Francisco for 1900 were

was over

forty million bushels, to

considerably over $1,000,000,000; while those of Portland,
Tacoma, Seattle and Spokane, the leading cities of the

Northwest, approximated $400,000,000.
It will probably astonish some of our Eastern bankers to know that the bank deposits of California are
over $330,000,000, three savings banks in San Francisco
alone having over $100,000,000, while the deposits of
Oregon and Washington are over $60,000,000, having
more than trebled since 1893. To all this should be
added the wonderful development of Alaska, Seward's
famous " ice box," which is pouring millions into our

and creating a trade of immense prothe bulk of which is handled by the merchants

coffers annually,

portions,

of our Pacific Coast States.

Wealth is being created everywhere, industry flourand resources utilized for the benefit of mankind.
This rapid advance, which has been specially marked in
the past few years, is confined to no particular locality,
but is developed and supported everywhere by conditions that fully warrant our confidence in its continuance. It has resulted in the establishment of hundreds
of new and important manufacturing enterprises, and
in the harnessing of powers that have never before felt

ishes

the controlling touch of science.

has been infused into our mercantile life, and with
magic strides commerce from Pacific Coast seaports is
encircling the globe, laying the foundations for a prosperity the like of which has not been dreamed. It has
struck the mountain side, and the golden treasure is
It has
pouring forth in a stream that will not end.
redouble
caused the farmer to take heart, the artisan to
Ins energies, the merchant to enlarge his facilities, and
has put millions of dollars in the pockets of the people.
Such prosperity is always permanent, because it is
founded on substantial development; being built up
step by step, the foundation for it is firmly and securely
It

laid.

Recognizing, then, the present magnificence of their
development, what is to be the future, both commercial
and financial, of the States of the Pacific Coast?
Has the star of their prosperity already reached its
zenith, has it even begun to decline, or is it only first ap-

pearing above the horizon?
To these questions there can be but one answer.
With activity like this in all lines, the future of the Pacific Coast, even as to continued internal development,

the glamour of romance that tinged Oriental or trans-

port.

When Columbus crossed the Atlantic and Magellan
circumnavigated the globe, the eastern route to India
lost its importance and its great caravansaries and emporiums began to decline, and to-day they are scarcely
shadows of their former greatness. Yet India, China,
Japan and the Malayan Archipelago are no less rich,
nor their products less desirable, than in the days of
Ferdinand and Isabelle.
The movements of commerce have been hitherto from
the East to the West, but the inexorable logic of events
has established the truth of the theory of the Genoan
sailor that the wealth of the East Indies can be reached
more readily by going west than by going east.
The most important historical event in recent years,
at least to the people of the United States, was the destruction of the Spanish fleet, in Manila Bay, May 1st,
1898, and the consequent establishment of the United
States as one of the first class sea powers.
The Orient, with its teeming myriads just awakening
from their thousand years' sleep, offers to-day the richest prize ever presented in the struggle for commercial
supremacy. With scarcely a thought of the United
States even proving a factor in that contest the great
nations of Europe have been for years partitioning the
Oriental trade among themselves, each one striving to
obtain the strongest vantage. The foreign trade of the
Orient for 1899 was over $2,000,000,000, that of China
alone approximating $330,000,000; yet of that vast com-

merce the United States has

than ten per cent.
In the settlement of the recent war, the readjustment
of the " spheres of influence," the enlargement of the.
open door policy, the United States must take and will
take a most important part, for it is the only great

power that looks out upon the

most glowing promises.
Reason compels all to admit

offers the

that development
founded in the prosperity of all the people results by
natural sequence in a still greater prosperity until the

activity.

opportunities of nature have been exhausted. This being true, it follows that the people of the Pacific Coast

are only on the threshold of their destiny. If to this be
added the possibilities presented by a proper development of Oriental commerce, it will be impossible to over-

estimate the probable growth of the future.
There is nothing in history, poetry or romance so
thrillingly interesting as the legends and tales that
have as their "motif" the development of commerce.

The galleons of Spain and

richly freighted

Indiamen

have attracted others than pirates and buccaneers of

less

Pacific, the scene of future

The opening of the door of the " Far East " has
shown to the world a wealth of commerce and trade that
almost incalculable.
Old tales of wealth and luxury are found to be no
fables, but actual facts, and at this latter day, after centuries of inactivity, the products of these old nations are
flowing westward to a newer and more progressive
world.

who

give the subject the slightest investigation that in this struggle for commercial
supremacy the United States, by reason of her great reIt is

admitted by

all

and the vast extent of
destined to take a pre-eminent place.

sources, the fertility of her soil

her territory,

The twentieth century opens

'.A

X K ERS'

CON VENTK

)

United states
the producIndustrial machinery adjusted
tion ol wealth on a scale of unprecedented magnitude.
The nations of Europe and the world at large are constantly becoming more and more dependent upon us

of our trade with the South

raw materials, but also for manufactured
products; and it may i>e confidently asserted that because of our central position between the Atlantic and

New York

with

for the

not only for

Pacific seaboards, because of our excellent transportation facilities, our varied and inexhaustible resources,
ami the steadily increasing dependence of the world
upon us for the necessities and even many of the luxuries of life, the United States is destined to become the
greatest commercial power of the commercial age, the

twentieth century.
To obtain this pre-eminence, the United States must
enter this field of commercial activity through her Pacific

Coast.

With Hawaii, the key to the commerce of the Pacific,
ami the Philippines, the gateway to the Orient, both in
our hands, fan- or a kind Providence has given us two
most important and valuable aids for the attainment of
this glorious goal.

The question

of the

wisdom

sion has been settled forever;

of the policy of expanis

no longer even a de-

Our flag has been raised in the Philippines,
and thank God it is there to stay. Under its benign influences will come all the blessings of a civilized free
batable one.

government, the enlightenment of education, the establishment of equal rights for man and woman, the devel-

opment

of the latent riches of these islands

and the ex-

pansion of a Christian civilization that ever follows the
flag of the Anglo-Saxon race.
Christianity and Christian teachings are just as real
factors in the mental and moral equipment of the highest civilization as any of the philosophical or scientific
processes that have gone to build up the general result.
It takes, then, no prophet to state that if the people of
the United States will but awaken to a full realization of
the grandeur of their destiny and the greatness of their
opportunities they will settle down to a development of
the commerce of the Orient that will ere many years
re-establish our merchant marine., cover the Pacific with

our white winged birds of commerce, establish on the
:fic Coast commercial emporiums that will rival any
in the world and pour into our treasuries the riches of
Golconda.
N ,Vf!
DEPENDENCE OF OOMMFBCE UPON
It would be. indeed, a work of supererogation on my
part to attempt to demonstrate to you the importance of
the part the banker must play in this great commercial
expansion.
If transportation facilities constitute the
on.- [eg with which commerce strides from nation to nation, banking facilities constitute the other, without
which commerce would be lame and halting indeed.
That the assured development of our Oriental commerce will see a most remarkable enlargement of the
banks and banking facilities of the Pacific Const is a
wish, however, to take advantage of this opportunity to state again what I have frequently urged In
other places. It seems to me that the most important
I

should be taken by Congress to enable the
all the advantages arising out of
a constantly expanding commerce, is to enact the ueclation authorizing the establishment of an international bank with headquarters in New York and
branches in all the leading commercial cities of the
globe. Such a bill has been pending in Congress for
ye.-irs. but owing to the fact thai many Congressmen
think that any measure tending to extend banking fa
that

United States to attain

dill

station

favor of a privileged chiss.

slumbers in the committee to which it was referred,
would seem as if sues a measure should be especialdeterring of the support of Congressmen and Senaof the Atlantic seaboard states, when the rolume
:

American States and

the-

considered, for its passage will at once sigintend no longer to be dependent upon European banks for our international monetary transacis

nify that

tions.

A competent

authority writing to the Times of
accurate knowledge of the sit-

states in his

uation, that it costs a merchant in Rio de Janeiro,.
Buenos Ayres, Valparaiso, Hong Kong and Yokohama)
from two to three per cent, more to place funds in New
York than in London, Paris or Berlin. Every pound of
raw material imported and every manufactured articleexported to the countries south of us, pays more or less
tribute to the European bankers, who make a handsome
profit out of the American people, because we have not
had a sufficient enterprise to do our own banking.
That there is room for abundant profit is evidenced
by the fact that fully ninety per cent, of the total banking business between the United States and the Orient
and South American countries is done through London,
bankers, and the average commission on this is threequarters of one per cent., which is made by these London houses with scarcely a penny of expenditure. When,
we, on the Pacific Coast consider that every cargo of
wheat that departs for the United Kingdom, every cargo
of lumber for South America, Australia and South Africa, every cargo of flour for the Orient, pays tributeto foreign capital,
seems that the proposed internanational bank should receive not only our cordial, but
most active support.
It was well said by Mr. Charles Conant, that it is a
striking commentary upon the closeness with whichAmerican banking has been kept at home, that almost
all our trade with Latiu America is settled by bills of
exchange on London, and that even the Government of
it.

the United States does its business in our new possessions in the Orient, through the great English institutions,

the

Hong Kong and Shanghai Bank and the

Chartered Bank of India, Australia and China.
In the Financier of August 19th of this year we aregiven an account of what is termed " an interesting exchange transaction," whereby the Government of the
United States, transferred $1,100,000 to Manila for
the

payment

of troops

and other purposes, the trans-

action being effected in the following manner:

Two

war-

rants for $000,000 and $500,000, respectively, were drawn
and placed in the New York Sub-Treasury to the credit

War Department, who
checks payable to the Canadian Bank of

of the Disbursing Officer of the
issued

his

Commerce and Hong Kong and the Shanghai Bank in
New Y'ork, the transfer being consummated through caLondon, and the branches or correspondents at Manila of those two foreign banks.
ble orders via

Consolidation of capital, the authority to establish
foreign branches, the extension of long credits on foreign trade and the application to banking of the highest
organizing ability of the American mind, are the shar<
of the American banker in the task allotted to our captains of Industry

and kings of finance

conquering the

trade of the world

s<lf evident proposition.

step

Orient

The

America and the Orient
do not encourage American trade, but either from patriotic motives or for other reasons favor European nations to the disadvantage of the United States and the
results are seriously felt in our higher mercantile cirforeign banks of South

cles.
It is nol enough to say that our foreign export trade
increasing regardless of poor banking facilities. It is
more exact statement of existing conditions to say that
is

measure of their growth is greatly retarded by
reason thereof. In order to most advantageously compete in the world's markets, the United States must be
prepared to give the same facilities to encourage trade
by the same liberal system of international exchanges
that other countries offer, otherwise our trade will be
hampered to just that extent.
If. then, the people of the United Slates have the wis-the full

RANKING SECTION.
don) to seize the golden opportunity thai is now presented to them by legislation favorable to our banking
necessities and the development of our merchant ma-

tide

which taken

portunity,

human

wake

If sleeping,

Brother Jonathan of Wall Street." eonscious that
twain
they
control the finance and the commerce of the

to fortune."

Op-

destinies

;

feasting, rise before

turn away it is the hour of fate,
And those who follow me reach every state
Mortals deserve, and conquer every foe
Save death but those who doubt or hesitate,.
Condemned to failure, penury and woe,
Seek me in vain, and uselessly implore.
1
answer not, and I return no more.
I

world.

we do

at the flood leads

rejected, will never call again.

Fame, love and fortune on my footsteps wait,
Cities and fields I walk, I penetrate
Deserts and seas remote.
And passing by
Hovel and mart and palace, soon or late
I knock unbidden once at every gate.

In the slang vernacular of the day.
" It is up to us."' It rests upon ourselves, the opportunity
is here. For nations as well as individuals, "there is a
Will

.Master of

long ere the twentieth century closes, they will not
only see the United States the unquestioned mistress of
the Pacific and the vast commerce that will burden its
bosom, but the celebrated " Old Lady of Threadneedle
Street" walk with equal step with her famous kinsrine,

man.

;

it?

The Federal Bankrupt Law.
By Walter D. Coles.

Registrar in Bankruptcy, St. Louis,

Bankers, perhaps more than any other class of business men, are vitally concerned in the development and
maintenance of a sound and stable credit system. Few
laws have so important a bearing upon credit as those

which have to do with the relation between the creditor
and his insolvent debtor. In the case of the debtor who
the
h; s the means with which to pay nil his debts
creditor seldom finds it necessary to invoke the aid of
the law. and when such a resort is necessary the remedy
is usually simple and obvious.
But in the case of the
insolvent debtor the due fulfillment of pecuniary obligations becomes impossible, and the adjustment of the
;

Mo.

Prior to the enactment of the present bankrupt act
the entire body of law having to do with the relations
between creditors and their insolvent debtors was, and
had been for nearly twenty years, under the exclusive
control of the several States and Territories. In estimating the value of the present bankrupt act as a
scheme of insolvency law and administration we should
compare it, not with some ideally perfect code of laws
of whose existence we may perhaps conceive, but with
the actual State laws which the bankrupt law has replaced.

laws

examination of the State and Territorial
which were in force on
when
1898,
the bankrupt law was enacted, dis-

relating to insolvency

insolvent's affairs almost invariably requires the inter-

July

vention of some legal process.

closes the fact that in thirty-three States

At the present time the law, which

meas-

the failing or insolvent debtor

ure determines the reciprocal rights of creditors and
their insolvent debtors, and defines the character and
scope of the remedies available to the creditor, is the

to secure such of his creditors

Federal Bankrupt Act of 1898; and

it is

to the consider-

now

construed and
propose in this paper to ad-

ation of the provisions of that act, as
practically applied, that

in a large

dress myself.

The

essential legal ideas

bankrupt law
character.

are by no

A system

which find expression

means novel or tentative

a
in

of laws, the substantial equivalent

bankrupt laws as known in the United States,
lias been in force for a great many years in England,
France. Germany, Austria, Hungary, Belgium, Spain,
Italy. Portugal, Denmark, Norway and Sweden and in the
leading countries of South America. The bankrupt laws in
force in the countries mentioned all proceed upon the theory, that when a debtor is manifestly insolvent, or by his
acts evinces a disposition to defraud his creditors, his
control over his property should cease, and such property should thereafter be regarded as of right belonging
to the whole body of his creditors. For the purpose of
working out these legal conceptions appropriate remedial process is provided by means of which the property of the debtor is sequestered under judicial authority and distributed ratably among all creditors. Of
all the progressive commercial nations of the world the
United States alone has for the most part been content
1o disregard the legal principles underlying bankruptcy
legislation and to leave the disposal of the property of
the insolvent debtor to be determined by his own caof the

price or self interest or by the fortuitous results of
competition among creditors. Prior to the enactment of
the present bankruptcy law there have been three bankrupt acts in force in this country. The failure of our

previous bankrupt laws to achieve

what was expected

them cannot be attributed to any defects inherent in
the nature of bankruptcy systems but must be ascribed
entirely to particular defeats in the provisions of those
of

laws which Congress did not
amendment.

see

fit

to rectify

by proper

and Territories
to pay or

was permitted
as he saw fit,

to the enexclusion of the rest, and in only eighteen jurisdictions did the State laws compel an insolvent debtor to
make a fair and proportionate distribution of his property among his creditors. In view of the direct bearing
of insolvency laws upon the conduct of business and the
course of credit, it is difficult to conceive of a more un-

tire

satisfactory condition of ihe law on this subject than
that which results from the existence of fifty-one distinct and diverse systems, under thirty-three of which
the rights of the creditors are so inadequately 'protected

and the

dictates of justice so

little regarded as to permit the insolvent debtor to distribute his estate precisely
as his oAvn interest or caprice may dictate. Furthermore, at the time the bankrupt law took effect the
State laws in twenty-eight States permitted an insolvent
to distribute his assets by voluntary conveyance and
through a trustee of his own choosing to such of his
creditors as he saw fit; and unless litigation ensued the
administration and distribution of the assets proceeded
without any judicial or other official supervision whatever. In the case of a debtor who sees that failure is
inevitable the temptation to commit fraud is at all times.
great. Even when the administration of an insolvent's
estate takes place under the closest judicial scrutiny ami
is safeguarded by the most stringent penal laws, frauds
are frequently committed or attempted.
In view of
these facts it is hard to imagine a state of the law
which would more strongly invite to fraud or under
which fraud could be more readily perpetrated than
that presented by the State laws in the twenty-eight
jurisdictions to which reference has just been made.
Looking at the matter from the point of view of the
general public good, there can, I think, be no question
but that laws which permit failing debtors to prefer
particular creditors are unwise, dangerous and inimical
to credit. Such laws have loDg been condemned by the
almost unanimous voice of the commercial world as
arbitrary and inequitable. Where the creditor in gooill
faith demands and receives security from the debtor at

BANKERS' CONVENTION.

fix the amount of his bond; they
receive notice of, and have a right to be heard with respect to, all Important steps in the course of the ad-

the time of extending the credit the strongest considerations of public policy demand thai the right of the
creditor to such security be jealously maintained; but

choose the trustee and

where

ministration of the estate which affect their interests.
The law, and the practice under it, is uuiform through-

Dumber

extend purely peral credit to debtor, neither demanding uor receiving
security at the time of giving credit, every dictate of
justice and fair dealing requires that when the debtor
becomes insolvent all creditors, standing as they do iu
the same situation, should share alike iu the distribution
a

of creditors alike

of his property.

Banks, because of their peculiarly close and confidential relations with their patrons, are perhaps more
frequently than other classes of creditors the beneficiaries

preferential assignments.

In view of this

fact it may be asked whether banks, as a class, ought
not to favor a condition of the law which will recognize
the right of the falling debtor to accord preferences to

particular creditors'; This inquiry. 1 think, admits of
a perfectly satisfactory answer.
The prosperity of the

banker rests upon the general prosperity and welfare of
the business community', and the success and development
of the banker's business is promoted by sound and conservative laws which tend to the stability of credit and
In
the betterment of general commercial conditions.
view of these considerations the banker may well afford
to forego whatever there may be of special advantage
to him in laws permitting preferences in order that the
business world generally may have the benefit of an
equitable and generally beneficial statute.
Furthermore, it must be borne in mind that a condition of the
law which permits an insolvent debtor to prefer his
bank also permits him to prefer others, so that the very
law which sometimes operates for the special benefit
of the bunk will often be turned against the bank itself
in common with other creditors and employed as an instrument of fraud. Although I am in possession of no
statistics on the subject, I venture to assert that it is
not banks but relatives and confidential friends who are
the chief beneficiaries of preferential failures, and

when

a debtor fails, making over everything he has to his
wife or a friend, the murmur of disapproval which goes

around the

directors' table at the

bank shows that banks

themselves are able to appreciate the injustice resulting
from preferences. There seems to be no sound reason
why a bank, in extending purely personal credit to a
borrower, should not be required to do so under the
same risks and with the same responsibilities which attend the giving of credit by others who do a credit business. The result of compelling a bank to transact its
business upon this basis is salutary in so far as it tends
to a conservative course of business, having regard not
alone to the debt due to the hank, but to all the debts
of the debtor.

The present bankrupt law has now been in force upward of three years, and we are therefore able to conalder its provisions in the light of a somewhat extended
experience of their practical operation and effect. The
law unquestionably embodies many of the essential provisions necessary to a sound

and

insolvency Bystem. Some of these meritorious features may be briefly
enumerated. Ii provides for a proportionate distribution
of the asset! of the bankrupt among all creditors and
<rontalns well guarded provisions to prevent preferences
being secured or awarded through transfers, levies or
ichmentfl

provide*
Liton

chinery

made

machinery
ail

col

efficient

anticipation of bankruptcy.
for discovering and securing

for

the property of the bankrupt. Such mathe right of creditors to choose an
(

impartial trustee, who will scrutinize all past acts and
the bankrupt, and is vested with power to

deal

tret

property concealed

right to

fraudulently

examine the bankrupt and

all

conveyed;

other persona

for the purpose of compelling the disclosure of concealed
property, and the right to invoke criminal penalties for

the concealment of
or perjury in relation thereto.
ad further provides for the active participation of
IHon In the administration
ite.
They

Tie-

out
a

all

the State's and Territories of the union. Whether
is to be proved in Texas, California or Maine the
of proof is identical, and as the form of proof is

claim

mode

any creditor is able to secure the
allowance of his claim in any jurisdiction in the United
States without being required to employ professional
aid or local counsel. The expenses of administration are
less than they have been under any Federal Bankrupt
or State Insolvency Law, and such administration takes
place under responsible judicial control in this respect,
presenting a strong contrast to the irresponsible and
extra judicial administration under chattel deeds of
trust and similar devices known to the State laws.
While the present Bankrupt Law has all the foregoing virtues it would be far from the truth to consider
it as free from defects.
Apart from certain minor faults
not very serious in their consequences and to which we
shall make no reference, there are in the law certain
grave defects operating with particular hardship upon
tanks to which 1 propose to refer. Payments of money
received by a creditor from a debtor in good faith and
officially

prescribed

without reasonable cause to believe that the debtor was
insolvent when the payment was made are not recoverable from the creditor under the Bankrupt Law. The
act provides, however, that the claims of creditors who
have received preferences shall not be allowed until such
creditors shall surrender their preferences, and further
provides that a bankrupt shall be deemed to have given
a preference if, being insolvent, he has transferred property or mouey to any creditor, and the effect of such
transfer is to enable such creditor to obtain a greater
percentage of his debt than any other creditor of the

same
to

class. The two provisions of the act just referred
have been so construed by the Supreme Court of the

United States as to require a creditor who desires to
prove a debt against a bankrupt estate to surrender, as
a condition of making such proof, all payments received
after the actual insolvency of the debtor and within
four months preceding the commencement of proceedings iu bankruptcy, notwithstanding that the creditor
may have received the payments in good faith and without any knowledge whatever of the debtor's insolvency.
The correctness of this decision as a judicial interpretation of the terms of the act

not questioned, but the

result of the construction thus given the
it

law is to make
upon which

run counter to the essential principles

business interccurse is and must always be founded. I
can conceive of nothing more necessary to the stability
of credit and the safe and proper conduct of business
than that payments, when received in good faith, should
be unassailable. When the law renders the status of a
payment contingent and uncertain there is no definite
basis

upon which a banker or a merchant can predicate

determine his course. It is true that
present
law the creditor is not directly deunder the
prived of the payment which he has received, but in
forcing upon him the alternative of surrendering the
payment or foregoing a dividend from (he bankrupt

his transactions or

the creditor

deprived, entirely

or in part, of

payment through the loss of the unthe debt. It must be borne in mind, too,

the benefit of the

paid balance of

that 'his penalty is inflicted upon the creditor, not because of any fraud, misconduct or lack of foresight on
his part, but merely because of (he subsequent occurrenceof anevenl which he could neither foresee nor pre\ ent.
it is one of the anomalies of the construction given
the present act thai while a creditor who has received
part payment of his debl cannol prove the remainder
without res toting to the bankrupt estate the payment
received, yet a creditor who has been paid in full is, in
the absence of actual or imputable fraud, under no obligation in restore anything. This consequence of the in-

BANKING SECTION.
terpretation given the statute is so grossly inequitable
that it demonstrates the utter impracticability of treating a payment as a preference, save in those instances

know

be
such at the time he receives it. An artificial standard
of preferences, having no relation to the creditor's knowledge or intent, should never be applied under a
bankrupt law. When the law makes the knowledge
of the recipient creditor the test by which to de-

where the creditor knows or ought

termine the fact of preference, it applies a real as distinguished from an artificial standard, and the creditor
is thereby afforded an opportunity at the time of tender
of payment to intelligently determine his course of action and to guard himself against the consequences of
prohibited acts.

As a

result of the necessity for surren-

dering partial payments, as a prerequisite to proof of a
claim for the balance of the debt against bankrupt estates, a situation frequently arises, as between a bank
as a creditor and a bankrupt estate as debtor, which
it is worth while to notice as one of the most inequitable
and oppressive consequences of the provisions of the

law respecting preferences. The situation to
refer can perhaps be best indicated by the
which
statement of a concrete case which has recently come
under my notice. A bank in St. Louis loaned a corporation $25,000 on its notes indorsed by its directors, who
had no other means than their stock in the corporation.
present

The bank afterward, and while the loan just referred
to was still outstanding, made a further loan to the corits notes, indorsed as before by
and also by two other indorsers, who were
capitalists of large means and undoubted responsibility.
The borrowing corporation then paid off the notes secured by the solvent indorsements and within four
months of the time of making such payment was declared bankrupt, leaving its notes, indorsed by its directors, in the hands of the bank, unpaid. When the
bank offered the unpaid notes held by it for proof
against the bankrupt estate it was held that the bank
was not entitled to prove the debt evidenced by such
notes until it had first surrendered the $25,000 it had received in payment of the secured notes. It will be observed that although the payment of the secured notes
by the bankrupt operated in no way to benefit the bank,
since the solvent indorsements upon them made those

poration of $25,000 upon
its directors,

notes good at all events, nevertheless the reception of
such payment by the bank operated to deprive it of its
right to receive any dividend whatever from the bankrupt estate uupon the unsecured notes.
In addition to the defects in the law arising from the
provisions which define partial payments as preferences,
the act is, in my opinion, seriously defective in respect
of those provisions which determine the right of the
bankrupt to be discharged from his debts. Since a discharge in bankruptcy in effect extinguishes lawful debts
and nullifies the most solemn obligations, obvious considerations of justice and sound public policy imperatively demand that the grant of such a privilege should
be surrounded by such safeguards as will prevent its
employment for dishonest and fraudulent purposes. Under the present act the bankrupt's estate may pay no

dividend whatever; the bankrupt may have recklessly
spent, dissipated or given away his money or other
property prior to or even in contemplation of bankruptcy; he may have conveyed property with intent to
hinder, delay or defraud his creditors, or with a view to
giving a preference to a particular creditor; nevertheless, under the terms of the law, none of these acts will
justify the court in refusing him his discharge, and such
discharge, when granted, will absolve him from all his
debts, except those which fall within certain excepted
classes enumerated in the statute. In the light of the
foregoing statement it takes no great wisdom to see that
the safeguards thrown around the grant of a discharge
are inadequate, and that amendments of this feature of
the law will be required to render the operation of the
law satisfactory. The discharge of an honest bankrupt
is doubtless dictated by sound public policy, since the
grant of such discharge is beneficial to him and to society, and is not generally harmful to the creditor, as
there is little probability of the creditor's realizing anything on the debt even though the discharge were withheld. There is no sense in keeping a man enthralled by
debt, and thereby deprive society of the useful activities and productive faculties of one of its members,
where no advantage results to any one from so doing.
While the wisdom of granting a discharge as a measure
of public policy is not denied, it must be said that no
bankrupt law nas ever been in force in any country
with such liberal provisions for discharge as are contained in the present law. The nearest approach to it is
the Federal Act of 1841, and that act was very soon discredited and repealed largely because of dissatisfaction
with the discharge provisions.
The defects in the present bankrupt law to which we
have referred, while oppressive and unjust in effect, are
not fundamental or irremediable in character. Organized and systematic effort is now being made by the
National Association of Credit Men and by other influential commercial bodies to remedy, by proper amendments, the evils resulting from the faulty provisions of
the law. At the last session of Congress a bill, known
as the Ray Bill, looking to certain changes in the law,
was favorably reported to the House of Representatives
by Mr. Ray, of New York, Chairman of the Judiciary
Committee. The Ray Bill is a very carefully framed
measure, and w ill, if enacted into law, give relief against
the present unjust provisions of the act concerning the
surrender of partial payments, and will also throw additional safeguards around the granting of discharges.
The Ray Bill will certainly be pressed for consideration
at the coming session of Congress. It is confidently believed that the enactment of the Ray Bill will give us a
bankrupt law which will prove socially advantageous
in restoring to useful activity insolvent debtors held in
the thrall of debt; in providing for creditors a just remedial process tending to promote conservatism in business and in establishing throughout the Union an equitable and uniform method of administering the estates of
insolvents, thereby fostering trade and strengthening
credit among the mercantile classes.

Detailed Report of Proceedings*
TWENTY SEVENTH ANNUAL CONVENTION, HELD AT MILWAUKEE, OCTOBER
E/RST DA

V'S

Tuesday, October /£, igoi.

mention

called to order at Pabst Theatre at 10
by the president.
President: The twenty-seventh annual Convention of

o'clock

a. m.

the American Bankers' Association will come to order.
Vice-Presidents and members of the Executive Council are requested to take scats upon the platform, and I
shall be glad to see the ex-presldents there also.
Prayer will be offered by the Rev. Dr. Burroughs, of

Marquette College.

The audience

will please stand.

rit.WEi:.
all things, Thou who hast weighed,
measured and numbered the grains on the seashore, and whatever the universe doth contain O Thou who dost weigh in the
balance our every thought, word and deed, grant this assembly
the guidance of Thy holy spirit, that It may weigh, measure
and number the subjects under consideration, that it may deliberate wisely and justly, that what is decided here may be for

God, Thou that rulest

d
that while private Interest Is sought the
the unh
greater welfare of the whole nation may be paramount, that
our word of honor may be held sacred throughout the whole
world, that each individual citizen may look with confidence
for that stability which insures a just remuneration for his
labor and a firm hope in the continuance of our institutions
that, in fine, all may be for Thy greater glory and the glory of
:

;

the whole people, through Christ,

Thy

Son.

Amen.

We will now be welcomed to this beautiMilwaukee by His Honor, Mayor Rose.

President:
ful <ity of

and

17th.

now

a struggling suburb of Milwaukee (Laughter
and applause), go out and look at our beautiful city hall;
study its architecture, pass through its commodious
offices, lighted by God's sunlight and well ventilated,
and say, have we builded well. You gentlemen from
Boston, professing to be the city of American learning,
art and science, go view our beautiful school buildings.
our art gallery, our magnificent library and museum,
and answer, are we keeping pace with you. Upwards

but

PROCEEDINGS.

J5th, 16th

we appropriate
each year for the maintenance of our public schools—
that splendid public school system that has made Wisconsin to stand forth as one of the leading States of the
Union in educational matters, that are a part of that
grand system that carries to the threshhold of the poor,
as well as to the portals of the rich, the opportunities
for obtaining elementary and even the higher classics in

of three-quarters of a million of dollars

education.
regret that you come at so late a season of the year.
would afford me pleasure to invite you to visit our
parks, for while our park system is young in years, it
is old in beauty and attractiveness. "We were confronted
by the same problem that at some time or other in the
history of every municipality confronts those upon
I

whom rests the responsibility of shaping the course of
municipal government and municipal problems— namely,
whether it is better to have one or, perhaps, two large
parks, such as you have in Boston, in New York and Philawhether it is better to have a large number
parks equitably distributed throughout the
territory. Those who were vested with that authority
and clothed with that responsibility, in the exercise of
what I esteem to be most excellent judgment, decided
upon the latter plan, and, as a result, Milwaukee has a
large number of small parks, affording to the poor the
opportunities of outdoor exercise, and the blessings of
delphia, or

Address

Welcome by Mayor David

Rose, of

Milwaukee.
Mr. President and Gentlemen:

Milwaukee appreciates the distinguished honor that
you have conferred upon her by holding this session
of your national Convention within her borders.
You men of tinanee may be interested in knowing
something of what we ar<\ of our industries, of our
products, of our people, of our social customs and of our
eminent.

Milwaukee has a population of upwards of 300,000
inhabitants, a cosmopolitan population, more cosmopolitan, perhaps, than that of any other city in these
ed States.

have represented here

our splen-

did citizenship people of every civilized nation. Outgrowth has been rapid, yet sturdy and strong. In our
last census decade our population increased by 39.54 per
cent.

Ours is a great manufacturing city, for, in truth, our
manufactured product last year exceeded in value $175,000,000.

The assessed valuation

of the taxable property

of our city is upwards ol si 65, 000,000, and it is our
proud satisfaction to know that our percentage of taxation is the lowest of any large city in this Union. These
great manufacturing industries, more than 3500 in num»kt. _'ive employment to more than 85,000 operatives,
There is one
th»» bone and sinew of our population.
and that is
proud,
exceedingly
fact of which we are
tenement
house
that we have within our borders no
•i.t, no breeding place- for crime and filth, but, on
the contrary our people own their own homes, and out
,

outskirts you will find the humble cottage of the
lnlorer, the more pretentious residence of the artisan:
out there, amid healthful surroundings, under sanitary
in tlu

conditions,

they

rear

their

children

healthfulness,

strength and rigor.
Milwaukee undertakes to keep pace with
dries in the rapid march of progress. You
from \>w York, the Eastern metropolis; you
from Chicago, once the proud metropolis of

her sister
gentlemen
gentlemen
the West,

small

free air and the pleasures of the beauties that are presented by our parks, privileges which only the rich
enjoy in too many of the large cities of our country.
Our government is of the liberal character. The
puritanical who visit our city for the firsl time may
receive a shock when they discover the liberality that
It is based upon that grand
is granted to our people.

old principle that that
least,

and we grant

government

best which governs

to every citizen the greatest liberty

consistent with good order and good morals, and while
it is true that we maintain a liberal policy of govern-

likewise true that good order prevails in our
city and our percentage of crime is the lowest of all
large cities of this nation.

ment,

it is

have a magnificent police department. You genmay not be interested in being told anything
about our police department (Laughter), but when you
stop to think for a moment that we are located almost
tinder the overhanging eaves of the sin-stained city of
Chicago, and consider how perfectly easy it is, were the
opportunity afforded, for the criminals of Chicago to
come to Milwaukee for the purpose of committing their
depredations, yet notwithstanding that fact we still
maintain the lowest percentage of crime, it is proof
positive of the efficiency, honesty and integrity of our
police department.
We have a splendid fire department; we yield to no
other city of this Onion, and our methods of fire fighting have become celebrated over this nation, and the
chief of our fire department is frequently consulted by
the chiefs of the Eastern cities of the United States.
A popular delusion has existed in years gone by—
popular fallacy— that Milwaukee produced only one
tlemen

BANKING SECTION.
firoduct, a product

waukee famous
.beer industries,

which

asserted

(Laughter*.

lias

made

Mil-

are proud of our great

that give employment to an

army

.honest hands; that turn into the hoppers of the world a

.product amounting to upwards of 10,000,000 of dollars a
year; and yet that great product is insignificant when

.compared with the other grand industrial products of
our city. We have a number of the largest manufacturing institutions of their hind in the whole world. Our
iron working institutions, our leather producing institutions, our enameling plants, In the distribution of their
products, have carried the name of Milwaukee, branded
upon those products, to the uttermost corners of the
•

civilized world.

wish

to say a

profit to its

in behalf of

members and that you

will

have oppor-

tunity to obtain pleasure and enjoyment, so that when
you return to your respective homes you will carry

with you only pleasant memories of your visit to the
Queen City of the Lakes. I thank you. (Great applause.)

now

an address of welP. Lombard, presithe Bankers' Club of Milwaukee.

President:

shall

listen to

come from the bankers, by Mr.
dent of

Address

of Welcome by J. W. P. Lombard, President Bankers' Club of Milwaukee.

Mr. President and Gentlemen of the American Bankers'
Association

In behalf of the bankers of Milwaukee, I have the
honor of bidding you welcome to our city. Mr. Poultney
Bigelow, in the June " Harper's," in an article entitled
" Wrecked on the Shores of Japan," gives the following
•description of their meeting with the natives: " They
came out rubbing their hands on their knees and smiling, and then sucked wind through their teeth to denote
that we were welcome." It would seem that the main
•difference between the American and Japanese custom of

welcome
'Laughter,

that

it is

largely

the

direction

the

wind.

as it were, within the shadow of n
cannot hope to equal her in the matter
no matter which way the wind blows.
(Laughter.) But we can in a small way imitate her by
asking you to hold up one hand while we do the same,
neither hand being empty—prosit! (Laughter and ap-

Milwaukee

rather fresh.

Milwaukee
conservative

was generally known as a
Some even went so far as to call her

the past

city.

But with the coming into action of the younger
generation she hus become progressive. In the earlier
days she was known as the Cream City, from the color
of the bricks manufactured here; with the lapse of time
brewing became the leading industry, and she was then
known as the city of breweries; for the past few years
the progressive element has been in the ascendency and
has succeeded in making our production known to
thousands previously strangers, and to-day she has a
well-known reputation as a Convention city.
In ac-

lies,

plause.)

seem that a welcome to be valued by the
some extent spontaneous, and
certainly should be fresh. (Laughter.) A young lady in
"New York who was interested in work in the slums of
that city, by her kindness had caused her class to become very much attached to her. They were in the
habit of bringing her small presents, such as fruits and
•flower*. One day the dirtiest ragamuffin in the lot
brought her four magnificent tuberoses. She was astonished at this and feared that he might, perhaps, have deAvould

recipients should be to

prived himself of necessities in order to obtain them.

name

she in no way bids farewell to the
they are still her mainstay. Whatever
enterprise they undertake, be it public or private, is
sure of success, for in the bright lexicon of the Brewers'
Association there is no such word as cannot— you see
they could uot for one moment allow a negative on the
" can." (Laughter and applause.)
In all her progress Milwaukee has retained the better
part of her conservatism, that conservatism that does
not antagonize progress, and it is to you, gentlemen, as
representatives of the conservative element of the country, that she gives the heartiest welcome.
When greenwas
backism
rampant the bankers were the active
poAver in preventing its spread, and there was no more
potent force exerted in the overthrow of free silver than
that of the American Bankers' Association. (Applause.)
The past two years have witnessed an era of wild
speculation that is still in progress. An important factor
in bringing this about has been the large increase in
the volume of bank currency, over one hundred million
dollars in two years, and now that numerous plans are
proposed for a still further increase, whether these
plans are attractive as being profitable to the banks or
are made to appear necessary by the specious plea for
an elastic currency, we look to you to consider them
carefully, and in such consideration to place the good
of your country above any personal considerations.
cepting this

brewers,

for

(Applause.)

The United

States

a favored nation.

has but

begun its conquest of the commercial world. Now is
no time for artificial stimulants; it is rather a time for
sedatives;
the whip.
It is

it is

beyond

a time for the use of the breeching, not

my power

come that the bankers

to express in

words the wel

of this city, in their heart of

To be characteristic
should be imbued with the
adroitness of the Yankee in avoiding all subjects of discord; with 1he canniness of the Scot, that while impressing you with its generosity, takes good care of the
ducats; with the good fellowship of the German, that
reaches the heart through the stomach; with the wit of
the Irish, that drives away dull care, and, above all.
with the fervidness of the Pole, for nothing less than
that could express the warmth of our real feelings.
Gentlemen, the bankers of Milwaukee bid you welhearts,

greater city.
of welcome,

She admired them, and frequently during the lessons
tested their fragrance. When the exercises were over
She called the boy to her and, thanking him heartily, inquired if he had not deprived himself of some necessity
to please her. " Oh, no," said he, " that was dead easy;
I stole them from the corpse."
(Laughter.) We wish
you to understand that this welcome is not a relic from
the departed days of September, when we originally
expected to meet you, but is a spontaneous feeling of the
immediate present, and we expect you will acknowledge

slow.

word

our bankers. They
have the unlimited confidence of our people (Applause).
They are liberal in then- support to all public enterprises,
progressive, patriotic, and filled with civic pride. The
many monuments that we have established in our public
institutions they have supported most generously and
loyally. Their work as advisers and supporters, as promoters of public enterprises, has contributed much to
make Milwaukee what she is to-day, the best city in the
United States (Applause).
In behalf of our people I extend to you, gentlemen of
this Convention, a most cordial greeting. We trust that
in the recesses between your sessions you will find opportunity to visit our public institutions, to visit our
manufacturing plants, to make inquiry concerning our
products and to familiarize yourselves with what we are
and what we possess, so that you may be able, on returning to your homes, to know from actual observation,
actual inquiry and experience precisely how much credit
you should give to this beautiful city of the lakes. I
trust that this Convention will be crowned with great
1

desire to extend to you.

of this cosmopolitan city,

come.

Address of President Alvah Trowbridge.
Tour Honor, Mayor Rose, and
Club of Milwaukee:
Personally,

the President of the

thank you more than

Bankers

can express

for putting in so terse a manner, as you both have done,
what I have been saying to the American Bankers' Asso-

—

——

BANKERS' CONVENTION.

some time, that Milwaukee
the place for our Convention. Being a

Mihvaukean my-

elation fox

know how

par excellence

Unfortunately for my brethren
in the Association, many of them did not know that
until the present moment
Were I to attempt to give
you gentlemen the thanks which are due from the American Bankers' Association, comprising 5500 bankers of
the United States, Including all of the most prominent
men in that business, you can see that the few words
1
could give would fail. Any one who knows of Milwaukee knows that it takes a very great orator to express the tlninks for what he Is sure to receive in the
way of hospitality, and I would say for the American
Bankers that you must judge how thankful they feel
from the aptitude with which they all have accepted
your generous hospitality.
The American Bankers are not narrowed In their
sphere of action by the portals of other business institutions. They have wide views of things pertaining to the
selt.

some

our members are International bankers, and they have,
as has already been said upon this platform, conserved
the interest of the general public.
So far as may be said in few words, we all tender
you thanks for your hospitality.
To you, ladies and gentlemen, I would say that:
We are gathered to-day whore we expected to gather
three weeks ago, in a business meeting of the Association. As we were preparing for meeting on the earlier
date, the world was shocked by the terrible crime at
Buffalo, which cost the life of our honored Chief Magistrate. There are no more loyal citizens than the Bankers; there are none to whom law and order are more
As we
important and precious than our fraternity.
his
murderers
stood over the bier of our dead, anger at
was softened into admiration and veneration for the
man who sleeps, while we thought of his great work
for this nation. In every condition of life a man above
his fellows by reason of his richer character, he has
done for us in the development of our commercial and
political conditions what no one man has done before,
and whether or no we have heretofore adopted his opinions, we all gratefully accept their results. To have
the world acknowledge that the United States produced
such a man (seeing the manner in which he has been acknowledged within the past month) adds immensely to
the glory of our country. Some of us enjoyed personal
friendship with the illustrious dead, and so are personally bereaved; to such we offer condolence, which might

be congratulation, in that they have had intimate association with so great a man.
Scarce had he need to cast his pride or slough the dross of
earth.

E'en as he trod that day to God, so walked he from his birth
In simpleness and gentleness and honor and clean mirth.
So, cup to lip In fellowship, they gave him welcome high.
And made him place at the banquet board, the Strong Men

ranged thereby,

Who had done

his

work and held

his peace

and had no fear

die.

Beyond the loom

New

is.

prosperity of the nation and of the world, for

'•

Report of the Secretary, Mr. James

of the last lone star, through open darkness

Further than reb*>l comet dared or hiving star-swarm swirled,
Sits he with such as praise our God, for that they served His
world."

to the present, it Is our duty
of this character become
crimes
to see to it that further
impossible in this land. The greatness of the Union
is so thoroughly established that even this great afflic-

Turning from the past

cannot hinder our progress, and the man who suc!s to our highest office for this cause has undoubtedly come into the world for such a time as this. Let
us render to him due loyalty even while we mourn the
tion

10, 1901.

September 1, 1900
Paid membership
Annual dues
October 10, 1901
Paid membership
Annual dues

4,391
$59,700
5,504

$60,850

members were lost through failand withdrawal from the Association,
reducing the membership to 4,191; 1,313 members have
joined since September 1, 1900, a net gain over last
year's total membership of 1,113.
In the past year 200

ure,

The

liquidation

whose
its

now embraces

roll

capital, surplus

5,504 members,
and undivided prof-

aggregate

$1,718,727,441

Combined deposits

6,288,955,200

Toal

$8,007,682,041

more than the same assets of
These figures do not include the
capital and deposits of 551 members, who are private
bankers and make no statements.
The annual income of the Association has increased
$1,150, although the reduction of dues at last convention
This

$1,420,823,447

last year's

amounted

members.

Respectfully submitted,

to $6,975.

Jas. R.

Branch, Secretary.

Report of the Treasurer, Mr. George M. Reynolds.
Chicago,

III.,

September

James

Branch; of the Treasurer, Mr. George M. Reynolds; of
the Auditing Committee, and of the Executive Council,
Mr. Caldwell Hardy, were then presented.

1901.

have the honor to submit the following report of receipts and disbursements since the beginning of the current fiscal year— namely, September 1st, 1900:
I

GENERAL OR MEMBERSHIP ACCOUNT.
DISBURSEMENTS.
Transferred to standing protective account
$20,000.00
5.000 00
J. D. Sayers, Governor of Texas, for Texas sufferers
Amount appropriated by Executive Council account
expenses of Richmond Convention
5,000.00
365.00
Expenses of Richmond Convention
315.00
Buttons for Richmond Convention
3,191.18
Proceedings 1900
Postage and express charges for distributing Pro873.17
ceedings
397.01
69,350 circular letters
Postage on circular letters from Secretary's office
1,848.28
and by various officers of the Association
520.22
Printing, stationery, etc
468.42
Sundry expenses
Salaries

Rent
Petty cash
Executive Council meeting, New York, April 24, 25,
1901
New York Telephone Company
Expenses Committee on Fidelity-Insurance
Expenses American Institute of Bank Clerks
Expenses Committee on Express Companies' Bills of

11,813.33
1.500.00
160.00

2,651.79
122.59
1,940.81
6,970.36
1,236.80

Exchange

Expenses Committee on Reduction of War Tax
Expenses Committee on Uniform Laws
Expenses Committee on Revising Constitution
Expenses Trust Company Section
Bonding officers
Stenographer's Report Richmond Convention
Traveling expenses of Secretary
September 4, 1900, arranging Richmond Convention.
October 23. 1900. Convention Ohio Bankers' Asso-

291.45
137.50
37.00
849.32
5(5.25

100.00

35.00

6000

ciation

June

1901,

Georgia Bankers' Association Con40.00

vention
.June 20, 1901,

New York

Dues returned, received
reports of the Secretary, Mr.

To the American Bankers' Association:

State Bankers' Associa-

tion Convention

ruler dead.

The annual

Yokk, October

Branch.

The membership and resources of the Association
have increased as follows:

•

hurled,

in error

Drafts (143) charged back account dues for year
1900-1901
Balance close of business August 31, 1901

70.69
15.00
1,725.00
63,084.09

$130,875.26

BANKING SECTION.
RECEIPTS.
Culance September 1, 1900
Account bills deposited Augusl
bership dues 1900-1901
Interest on bonds
Dues from members. 1900-1901

$63,936.3
31,

1900,

mem-

(or

105.00
800.00
:

$4-3.92

38
789 at $5
223 at $10

3,946.00
2.230.00
1.800.00
280.00
420.00

120 at $15
14 at $20
14 at $30

advance for 1901-02

52,680
:*.600

7.095
1.600
2.340

w<MirM
17,315.00
.

39,620.00

$130,875.26
$63,084.09

STAXDIXG PROTECTIVE ACCOUNT.
Balance.

September

$13,418.57

1900

Transferred to this account from general or membership account, as instructed by resolutions of
Executive Council

Disbursements to September

of this

have declared and carried on against professional crimand tells the story of immunity that our members
have enjoyed from these deft and light fingered gentry.
The expenses, while necessarily considerable, have been
Kept down to the minimum, and when considered in the
ratio to our membership and the work performed, are a
mere bagatelle to each of our members. Your warmest
thanks are due to this Committee for its energetic and
intelligent work, tne results of which are fully set forth

its report.

fidelity committee.

20,000.00

$33,418.57
29,956.26

1901

Committee has long been one of the
features
of our Association. Its report
most important
bristles with the details of the ceaseless warfare we

The work

inals

Bills for membership dues for the ensuing year (subject to the deduction of unpaid bills) deposited
with Continental National Bank, Chicago. 111....

Balance August 31, 1901

during the past year uave been heavy, but not out of
proportion to our income. On the contrary, they reflect
the great advantages which we are able to extend to our
members. Your council has pursued a liberal policy in
expenditures, absolutely, however, within the limits of
conservatism, thereby securing to members the best results of our " community of interest," and the best attainment of the greatest good to the greatest number.

protective committee.
9.098.92

Dues from old members paid
536 at $5
360 at $10
473 at $15
80 at $20
78 at $30

This Committee has been engaged for three years In
the careful study of the subject of insurance covering

$3,462.31
Balance, September 1, 1901
The Treasurer holds for the Association as an investment $20,000 4 per cent. United States regis$27,500.00
tered bonds of 1925, valued at

bank employes, and submits this year its
third annual report. Having served during the entire
three years on the Committee modesty would forbid my
saying too much about this work did I claim any per-

The Treasurer also holds for the credit of the Trust
Company Forms Account, account Trust Company Sec-

sonal credit for

tion of this Association, $1,716.

Respectfully submitted,
G. M. Reynolds, Treasurer.

Report of the Auditing Committee.
To the Members of the American Bankers' Association:

We, the undersigned committee, beg leave to report
we have examined the accounts of Mr. George M.
Reynolds, Treasurer, together with the accompanying
vouchers, and have found same to be correct, as re-

that

ported.
J.

Huston,

H. H. Applegate,
C. M. McNivebn.

Report of the Executive Council, by Caldwell Hardy,

Chairman.

the fidelity of

Mr. A. C. Anderson, of St. Paul, who
work,
has been the moving spirit, and
first conceived the
to him and his co-laborers we are indebted for our Association's form of fidelity bond, and the protection at
fair rates afforded those members who have adopted it.
The campaign of education carried on by the Committee
has elicited the deep interest of many members. I must
refer you to the report of the Committee and not usurp
its functions, but if every man within the sound of my
voice will stop one single moment and ask himself where
his bank would stand if one of its employes should default for $1,000 or $10,000, I think those of you who have
not studied the subject and protected yourselves in this
regard would realize that you could find much food for
thought in the reports of this Committee, and much
peace of mind if you followed its recommendations in
bonding your employes.
it.

Mr. President. Ladies and Gentlemen:

UNIFORM LAWS.

The burden of the work of your Association falls
naturally upon the various committees and upon its active officers, and the special reports of these committees
and officers informs you so fully of what has been done
during the past year that your chairman refers you to
them for details.
secretary's report and membership.
Your secretary's report will give you the exact status
of our membership at this date, which grew from about
1,500 in 1895 to 4,500 in 1900, an increase of 200 per
This remarkable record is eclipsed
this year, however, by the addition of nearly 1,000 members, the largest number we have ever added to our
membership in one year. What could attest so eloquently the expanding influence of our Association or give us

cent in

five years.

future?
The work of the secretary's office has received intelligent and faithful attention, and our increase in membership has been due in no small degree to the effective manner in which he has presented to the banks of
the country the advantages which membership in the

greater encouragement for

Association brings to those

wishes

its

who

thank him and his

join

staff for

Your chairman
their courtesy and

it.

co-operation in the discharge of his duties.

treasurer

The
cial

figures in your treasurer's report

show our

condition to be sound and prosperous.

finan-

Expenses

The report

of this

Committee by Chairman Frank W.

Tracy, of Springfield, 111., for 1900 (page 70 of proceedings) showed that the negotiable instrument law had
been passed in sixteen States in three years, and his report of this year shows that Pennsylvania has been
added to the list of States that have adopted it. The unremitting work besowed on this important matter by
Chairman Tracy merits your hearty approval and support, and I b<-;speak the assistance of each of you in
securing the adoption of the law in your several States.
Its advantages are too manifest and have been too ably
set forth in the reports from time to time to need any
elaboration at my hands.

COMMITTEE ON EDUCATION.

The volume and
this

detail of the

Committee, as most of you

work undertaken by

know from

the character

and wide distribution of its literature, has been herculean, and must impress you with the sincerity and
Its report tells you
deep interest of the Committee.
what has been done and what is yet to be accomplished.
The field is illimitable and the harvest great, and while
we should not overburden our Association financially
in the matter, if, with a reasonable subsidy the work
can be carried forward and sustained, it should be
pushed to a successful conclusion and put, if possible,
on an enduring bosis.

BANKERS' CONVENTION.

ER.N At. B B V

1
"

TAXES

You are all familiar with the efforts made at the iuBtance of the special committee on this subject last
winter through our members everywhere to secure the
repeal of the United States revenue tax on capital

and

The latter tax.
as you all know, was repealed, but the former still reu>ains an uujust discrimination against banking capital;
the only branch of business in which capital is so burdened. Argument on the subject before this assembly
is unnecessary, ami ought not to ho necessary anywhere
but to secure relief we must bring conviction home
Our efforts to secure the repeal
to the powers that be.
of this tax will be renewed at the coining; session of
Congress, end we hope each of you will take occasion
to point out to your Senators and Representatives that
capital iu uo other line of business is thus taxed, and
orge the repeal of the discrimination against us.
surplus of hanks, and on bans checks.

SUBJECTS FOB DISCUSSION.
Your council, at its spring meeting, considered a number of subjects of interest with a view to presenting
tut ui to the Convention, and your Committee on Program has arranged for an address on bankruptcy law
l>y Mr. Walter
Coles. Referee in Bankruptcy, of St.
Louis. Mo., which we feel assured will be found both instructive and Interesting.
I >.

also discussed the

Lovering

bill.

Overstreet

bill

and the questions of other legislation in Congress in
regard to the currency and other financial questions affecting banks The question of a suitable currency system, adapted to our needs and our banking system, is
one of the greatest importance and interest. President
Ileudrix presented it in his able address at Denver in
has continued as one of the living issues of
it
}, and
the day, and will so continue until it has been intelligently solved. The question has been placed on your
program, and we shall have the pleasure later of hearing
from Hon. Jas. I'. Eckels, ex-Comptroller of the Currency, on the subject

AMENDMENTS TO CONSTITUTION.
The amendment of Article 7, Section 1, simply

pro-

1 1 1

of this

amendment

therefore recommended.
II

sION

of our Association is typical of the times.
keeps pace with tin- expanding deposits, loans and
volume of business of our banks, pulsating through our
clearing bouses; the times are big with the increasing
wealth and prosperity of our country, and we ask the
CO-operatlon and hearty support of each and till of you

The growth

anil

wishing our association godspeed in the promotion of
-nind business principles, and all that is host iu our proSlon, noi forgetting that good fellowship which makes
all to be of one brotherhood.
in

Caldwell Hardy,
uiiiiaii

Mr. Wlllock notified the Executive Council that he
desired to offer an

Executive Council.

amendment

l" CONSTITUTION.

Mr. Har.lv: In accordance with the constitution, certain amendments have been passed opon by the Executive Council.

Hardy: The amendment first. rf(,-vi-ft] to lias
approved by the council, and T shall present ;t for

Mr.

hem

vot-r consideration.

the constitution, as-

Article VII, Section 1
Beginning with line four. " that the
fifteen' be substituted for the word
thirty.'
Resolutions

wind

•

or subjects for discussion (excepting those referring to points
of order or matters of courtesy) must be submitted to the Executive Council at least fifteen (instead of thirty) days before

the annual convention of the Association.
Referred to Council approved by Council.
:

REORGANIZING CONSULAR SKItVICE— RESOLUTION

REJECTED.

Mr. Hardy: At the Richmond Convention last year
Mr. Parker, of Quincy, Illinois, gave notice that hewould present to this Convention resolutions for con-

two

sideration upon

subjects.

These resolutions have

been drawn and submitted to the council, who in tunii
them to the Convention. The first of these I

submit,

will read:

Whereas, The National Business League of Chicago, and
other business organizations throughout the country supported
also by many prominent citizens of the United States
have
endeavored, for several years, to secure the passage in Congress of a bill providing for the reorganization and classification
of the Consular Service of the United States: and
Whereas, Bill No. S. 45<>:?. introduced in Congress by Senator
bodge, of Massachusetts, has been reported out favorably by
Senate Committee on Foreign Relations; therefore In' ii
Resolved, That the American Bankers' Association urgently
advocates the passage of Bill Xo. S. 4563, or a similar bill, providing for a thorough reorganization of the United States Consular Service. 1>.\ creating a body of officials to represent this
country abroad, who shall be chosen through examinations as
to special fitness and competency for consular duties; and who,
after acquiring valuable experience, shall not be subject to removal with every change of administration: and that the rulesand regulations necessary to carry out this reorganization be
left to the discretion of the President of the United States, excepl as otherwise provided in the act; and be it further
Resolved, That the Secretary of the American Bankers' Association be. and he is hereby, instructed to send copies of lliis
preamble and resolution to the President, the members of his
Cabinet, and the members of the Congress of the United States.

—

to this resolution the Executive Council

took the following action:
the resolution be presented to the Convenrecommendation, with the suggestion that, however
desirable the passage of such a resolution may be. suc'i actionis taken for the reason that the same docs not pertain to the
legitimate business of the American Bankers' Association.

Resolved, Thai

tion without

action of the Executive Council in this matter
vote, concurred in and confirmed.

The

was. by unanimous

FAVOR OF A DEPARTMENT OF
COMMERCE AND INDUSTRIES REJECTED.

RESOLUTION

Mr. Hardy: The second set of resolutions presented
by Mr. Parker is as follows:
Whereas, The National Business League of Chicago, and
other business organizations throughout the country supported
have
a'so by many prominent citizens of the United States
been endeavoring for several years to secure the passage In
Congress "f a bill creating a "Department of Commerce and
Industries/' with a Secretary who shall have a seat in the

—

and
Whereas, Bill X". 824 was introduced in Congress by Senator Frye (amended by Senator .Nelson, of Minnesota. No. S.
738) and has been reported out favorably by the Senate Committee on Commerce at the lasl session of Congress; therefore

'abinet

I,.,

;

Resolved, That the American Bankers' Assnriatlon hereby
nrges the passage of P.ill No, 624, or a similar bill, which shall
provide for the creation of the proposed " Department of Comi,n it., and
Industries," with a Cabinet officer at Its head, and
to which new Department shall i»' assigned (as proposed in
Hill No. 624) ih<- general jurisdiction over foreign and International commerce (except collection of internal revenue and
transportation facilities by land
administration of customs
or water (excepl cases under the Jurisdiction of tin- Interstate
i

AMENDMENTS

follows:

With regard

vides for the submitting of resolutions or subjects for
discussion to tne Executive Council fifteen days, instead
of thirty days, before the annual convention. The wisdom of this limitation of the constitution has been too
frequently demonstrated to need any extended comnt: but fifteen days Instead of thirty days would
seem tn he ample.
The phraseology Of Article 9, Section 1. does not
change the essence of this provision of the constitution,
but simply makes it more char that the secretary shall,
at least thirty days before the annual meeting, forward
to every member of the Association a copy of any pro
posed amendment to the constitution, and the adoption
1

as follows:

Survey, mining and
Other lisheries of
Alaska; manufacturing Industries, including the extension of
foreign markets, and increase of trade and trade facilities with
Also the followfng bureaus, divisions and
foreign countries.
I. ranches
of the public service, and ad pertaining to the same,
now under the jurisdiction of the Department of the Treasury—
T.ife
Saving Service, Mghthonse Board. Lfghfhotise
,1-iy.
imerce

fishery

Commission);

industries.

tin-

Including

Geological

fur

seal

anil

BANKING SECTION.
Hospital Service, and Steamboat Inspection
of Navigation and United States Snipping
bureaus
ServiceCommissioners of Immigration, including the control of Chinese Immigration; of Statistics and United States toast and
also the Department of Labor and the officii
Geodetic Survey
under the jurisdiction of the
at Commissioner of Railroads (now
Consular Bureau (now in
and
the
the
Interior),
of
Department

Service,

Marine
;

69)

Which had been stolen from the
mail, altered as to the payee and passed upon a member
of the Association. On July 2:i, William Miller, a third

a check for $2,520.09

member

was captured

of the band,

the Department of State).
Resolved, That the Secretary of the American Hankers' Association be, and he is hereby, instructed to send copies of this
preamble and resolution to the President, the members of his
Cabinet and the members of the Congress of the United States.

Repotted

with

council

recommendation

that

be not adopted.
Mr. Hardy: The council adopted a resolution recommending that these resolutions be not adopted by this
Association, and they were governed in that action by
the same feeling as in regard to the other matter, that
it

was

not part of the

work

of the Association to adopt

resolutions in regard to these matters.
Report of committee unanimously concurred

in.

President The report of the Protective Committee is
already printed and is in your hands. It is a voluminous
document and will be more intelligible to you if you
:

you listen to its hurried readComing here. We Mill pass on to the report of the
Tracy.
Mr.
mittee on Uniform Laws, by the Chairman.
(Owing to Mr. Tracy's absence, the reading of the

read

carefully than

report

was

deferred.)

Report of Protective Committee.
York, N. Y., September 15, 1901.
The Protective Committee begs to submit the followcare by the
ing report of the work committed to its

New

Executive Council for the year 1000-1901:
Balance on hand per Treasurer's report, Sep$13,418.57
tember 1. 1900
20,000.00
Appropriated by the Executive Council...

909.87
29,046.39

Paid account expenses, 1899-1900
Paid account expenses, 1900-1901
Total receipts
Total expenditures

Balance September

g g

$33,418.57
29,956.26
1.

$3,462.31

1901

subMore than 3.000 letters and reports have been
Protective
the
by,
mitted to. and carefully considered
Committee from September 1, 1900, to September 1,
119 items of infor1901. From these have been compiled
in pamphlet
mation which have been sent to members
photographs
by
accompanied
form every few months,
by the
selected
and descriptions of 48 active criminals
a
affording
and
detective agents of the Association,

warning and means of identification

every part of the

country.

issued as
In special instances circulars have been

fol-

was transferred

In January there

was

iss.ued a special circular

warn-

box thieves
in- members* to be on the lookout for letter
Peoria, 111.:
Ohio;
Cincinnati,
who had been operating at
in several
had,
and
Newark. N. J., and Memphis, Tenn.,
banks with checks which had been
done
from the mail and altered. The work was

instances, defrauded

Ohio for

trial

Havre. Mont., and
Cincinnati in Oc-

tober.

May

a circular

was

issued

among Western

cattle

dealers and wholesale butchers, bearing the handwriting and description of u forger, apparently professional,,
who operated to defraud a member of the Association
at Phconix, Ariz., in January,

1!R)0,

of $50 for information leading to

assumed name

and offering a reward
his arrest. Under the-

John Houser, the swindler successfully

passed as brother to a cattle dealer well known at
Phoenix and received an introduction at the Yalley Bank,
where he deposited a draft for .$1,250 to his order, purporting to be drawn by Rother, Zigler & Co. on the
National Bank of California, Los Angeles, drew $625 in
cash and directed that the balance be placed to his
credit. So far as we can learn this swindler has never
operated since that time and no clue to his whereaboutshas been discovered. During the same month a circular
was issued through several Western States offering a reward for the arrest, identification and surrender of the
outlaws who robbed the First National Bank, Winnemucca, Nev., on September 19, 1900, and escaped into
the mountains with $32,040. The agents of the Association were put on the trail, but the condition of the country at the approach of winter compelled a cessation of
this kind of work. In the spring operations were re-

mentioned circular was issued
American Bankers' Association!
and the First National Rank of Winnemucca, rewards

sumed and

the above

offering on behalf of the

aggregating $6,000 for the arrest of the three men implicated in the robbery, or $2,000 for either of them. The
robbery was conducted at midday, the men were not
masked, and they can be readily identified when captured.

The Committee has had to deal during the past season
with three old offenders in the persons of Maximilian
Schoenbein, Alouzo J. Whiteman and Charles Fryer.
Maximilian Schoenbein, whose extensive burglary operations led, in part, to the formation of the Protective
Committee, finished a three-year term at Dannemora
Prison during the fall of 1900. Co-operating with the authorities of New Hampshire the agents of the Association accomplished his transfer to the Concord State
Prison on November 8, 1900, to complete a term of ten
years, to which he was sentenced in 1865. In securing
the continued confinement of Schoenbein the Association
has safeguarded its members from the operations of the
most ingenious and daring burglar who has operated for

many

lows:

years.

J. Whiteman. an habitual offender, who has
frequently figured in the records of the Association, wasarrested in New York City on February 21, 3901, and on
April 17 was sentenced to Sing Sing Prison for a term of
two years and six months. On May 18 he was released

Alonzo

of Charles
in a manner to suggest the participation
descripand
photographs
Fisher or his associates, and
of
description
tions of Charles and Rachel Fisher, and a
forand
Prentice Tiller were- included in the circular
banks throughout the country. No further

under bail of $2,500, pending decision on appeal. In November, 1899, Whiteman was sent to Chicago, where a
sentence of two years' imprisonment and a fine of $2,000*
awaited him. He was unexpectedly released under the
Pauper's Act without payment of his fine. The agentsof the Association had a case which promised well for

Tiller
operations were reported until, in March, Prentice
regular
the
from
Munson. in a departure

Mass., the forged draft of the

stolen

warded

and Edward
method, attempted to defraud a bank at Hastings, Neb.,
with a worthless certificate of deposit and were arTiller
rested. The agents of the Association identified
Cincinnati
to
sent
was
he
and, in company with Munson,
en
for trial. Munson escaped from the officers while

but was recaptured at Buffalo, N. Y.. and transferred to Cincinnati where, on May 17, he and Tiller
pleaded guilty and were sentenced, Tiller to five years
route,

and Munson to three years
In the

in the

meantime Munson was

Columbus Penitentiary.

identified as presenter of

the identification of

Whiteman

for passing at Boston,

Lawrence National Bank.

Lawrence, Kan., on the First National Bank of New
York City. Arrangements were made to secure his rearrest and transfer to Boston. Just prior to his arrest in
New York City a good case against him there was discovered and was allowed to take precedence, with the
above result. Warrants from Boston upon three separate charges were lodged at New York City for service.
On August 30 Whiteman was arrested at Boston. Mass..
while operating a plan to defraud brokers by depositing
a large bogus check to open an account and receiving a

CONVENTION.

HANKERS"

advance

entail

beld for

several hundred dollars.

now

Earl;

on banks

1807, after a series of operations

which culminated at Somerville, Tenn., Charles Fryer
was arrested and sentenced to tbe Nashville Penitentiary
for ten years, On December 25, 1900, be was pardoned.
lu January, 1001, be

began operations ou members of

tbe Association with forged certified cheeks. Ou April
4 he was sentenced to the Penitentiary at Sante Fe for
three years. Warrants have been lodged to secure him

expiration of his tenn.

at the

Following are a few brief statements of the results
of the Protective work:
conducted by
1. Operations of considerable magnitude
been rehave
season
past
forgets
the
during
expert
amounttwo
checks
where
Cuba,
ported 'from Havana,
Canada,
Toronto.
ing to (10.000 were passed, and from

e two checks amounting
presented at the banks.

to 55,356

were successfully

September 15, 1901,
the Association have been robbed
only
by safe burglars, with a consequent loss of $S,300.39.
::.
During the same period forty-five banks not members of your Association have been robbed by safe

From September
three members of

15,

1000. to

burglars, suffering reported losses of $12S,351.G5.
4. From May 1, 1805, to September 15, 1901, members
of your Association have lost by the operations of bur-

and sneak thieve-. $65,972.
From May 1. 1805, to September 15, 1901, banks
not members of your Association have suffered reported
losses of over $004,000 in the same way.
have
G. Three organized bauds of bank swindlers
now
one
only
the
and
season
the
been broken up during
procurethe
in evidence Is under surveillance pending

glars, robbers
:..

ment

upon members of the Association by this class of burand in the ease of an attack which was planned
upon the First National Bank, Cobleskill, N. Y., November 20, looo, and was frustrated by the town watchman,
the agents of the Association have secured the arrest of
three of the offenders. In this case the burglars had
stolen tools from the railroad tool house and were challenged When near the bank. They lied after an exchange of shots, in which the watchman was killed. A
fourth member of this gang of burglars, while stealing
a railroad ride with a can of uitro-glycerine in his possession, was blown to pieces. It is the custom of this
class of burglars to secure dynamite or nitro-glycerine,
of which they, to some extent, understand the use, and
to start out upon a raid on small banks. They have in
a number of Instances avoided banks displaying the
membership sign. In several instances during the past
season the Protective Committee has been enabled to
warn members of attacks contemplated by burglars and
sneak thieves, owing to conditions of lax precaution.
glars,

trial.

of proof sufficient for conviction.

BANK SWINDLERS.
Since September 15, 1000, there have been reported
Committee cases covering the operalions of one huudred and twelve individual forgers and
swindlers and four organized bands. Of these forty-four
to the Protective

have been arrested and twenty-one have been sentenced.
during previous seasons,
eleven have been sentenced and one committed suicide
while awaiting trial. Of these, nine were arrested but
not tried when last year's report was submitted and
three were arrested during the season just closed.
In addition to the band of letter box thieves operating
on members during the past season, which has been
broken up by the arrest of its members and the sentence
In

During the period from September 15, 1900, to September 15, 1901. only five members of the Association
have been robbed by burglars, outlaws and sneak
thieves, the principal loss of $32,040 being caused by the
robbery of the First National Bank of Winnemucca,
Nev., by the band of Western outlaws for whose arrest,
as stated, rewards aggregating $0,000 have been offered
by special circular.

On March

10,

Bank

1901, burglars attacked the

Bell wood, Pa., secured $02 in nickels and the contents
of two private boxes in the outer vault, but were alarmed

without getting into the safe.
On March 25, 1901, the Somerset Bank, Somerset,
Ohio, was attacked by burglars who blew open the safe

aid

fled

On March 27 six men were placed
agents
of the Association presented
under arrest. The
convincing proof of their guilt, and on June 11, 1901,
Rogers and Harry J. Simmons were
:i, James
Penitentiary for ten years
Columbus
the
sentenced to

and secured

$4,243.71.

Harris John Williams and Joseph Hesentenced each for eight years,
on the night of April 24, 1001, the bank of C. J.
tcke A: Co., Brighton, Mich., was attacked by burbo blow open tie' safe and took $3,964.68 with
aped unobserved. The agents of the Aswhich
ation made a long and careful investigation, but are

each,

and

not prepared an yet to

July

make any

1901, during the

22,

arrests.

temporary absence of

the teller, a sneak thief inserted a pair of tongs into the
'•aire

of the City National Bank, Dayton, Ohio,

a bundle of bills

amounting

$100 and

made

drew out

his escape.

The Identity of this thief has not yel been established.
ptlon of the important robbery of the
With t!
bank at Winnemucca, Nev.. by Western outlaws, the
of

band-

<,'

burglary coming to the attention of the Protectevidently been committed by small

-ramp burglar* by which the banks
those not

members

the last

of the Associa-

have been considerably annoyed. The Committee
a number of unsuccessful attacks made
1

operations

for

two men

to the penitentiary and the imprisonment of
agents
a third, the
of the Association have been successful in dealing with two other organized groups. One, a
recently organized band of beginners in forgery, has
been broken up by the arrest in New York City of
Michael Farrell, Henry Greaves and John Nelson, after
operations in Philadelphia, Cleveland, Chicago, New
York City and Boston. The method of this band has
been to make small purchases and to secure small checks
of genuine issue in lieu of cash change, ostensibly for
mailing purposes, and to raise them to larger amounts
or use them as a guide for a forgery.
On April 5. 1001, J. Ilafelson, one of a band which
defrauded members of the Association at New York
City with checks ranging from $60 to $80, was arrested
at New York and on June 18 was sentenced to Sing Sing
Prison for three years. His associates are known to the
agents of the association, and are now in hiding. This
band operated with bogus checks drawn payable to
bearer, copied from small checks of genuine issue secured
from tradesmen to whom they sold small amounts of
goods at bargain prices.
There is another band in operation whose method is
to open an account at a bank on the introduction of a
customer and to establish confidence by beginning with
cash deposits in the name of a firm ostensibly commencing business in the vicinity. The swindler opening
the account manipulates it in such a manner as to draw
out. the greater part of it, while a portion is represented
by an uncollected check for a large sum. The check returns protested and the account appears largely overdrawn. By the operation of this plan bankers have been
defrauded at Brooklyn, N. Y.; Boston, Mass.; New York
city, Jersey City, N. .1.; Yonkers, N. Y., and Scranton,
Pa. The agents of the Association are at present at

BURGLARS AND THIEVES.

addition,

work upon the

ense.

The Committee

desires to

warn

all members against opening accounts which are not
thoroughly Investigated before drafts thereon are per-

mitted.

Following is the detailed statement of the Protective
Committee from close of fiscal year, August 31, 1900, to

September

Pi"!

BANKING SECTION.
Receipts.
Balance on hand September 1, 1900
Appropriated by the Executive Council

$13,418.57
20,000.00

which, while required as a means of carrying on the recent war
with Spain, is at the present time both arduous and unnecessary."

The response was general throughout

$33,418.57

Expenditures.
Paid Pinkerton expenses incurred prior to September
$009.87
1, 1900
300.00
Other expenses incurred prior to September 1, 1900..
Paid Pinkerton expenses incurred September 1, 1900,
23.S27.02
to September 1, 1901
4,95.'!. 00
Salaries and expenses, as per vouchers
150.00
Paid Stewart & Company, 1,000 aluminum signs
86.37
Paid Stumpf & Steurer, 1,000 printed pamphlets
30.00
Petty cash
3,462.31
Balance September 1, 1901
$33,418.57

The purpose and policy of the Association in maintaining the Protective feature is now generally well understood, but occasionally the Protective Committee receives an urgent call from some banker who feels aggrieved when he learns that we pay no attention to
petty swindles, which are successful because of imperdesire
fect vigilance on the part of bank officers.
protective
no
to repeat our statement of last year that
system could be expanded so as to take in the class of

cases with which every bank officer should be competent to deal.

The Committee again acknowledges the valuable assistance rendered by individual members of the Association.

append the report of the Pinkerton National Detective Agency, which is distributed among the members in printed form, and will follow this report in the
proceedings of the convention.

Respectfully submitted,

Protective Committee,
American Bankers' Association.

The report of the Committee on Internal Revenue
Taxation, by the Chairman, the Hon. A. B. Hepburn,
was then read by the Secretary, owing to Mr. Hepburn's absence:
Report of Committee on Internal Revenue Taxation.
The American Bankers' Association:

Gentlemen: On November 30, 1900, President Trowbridge appointed a committee to look after the interests
of the bankers of the country affected by the pending
legislation in Congress. The committee was composed
of the following gentlemen:

New
T.

York.
Dixon, President National Exchange Bank, Baltimore,

Md.
Jas. H. Eckels, President

Commercial National Bank, Chicago,

111."

John

Branch,

President

Merchants'

National

Bank, Rich-

mond, Va.
Savings,

Cleveland,

James R. Branch, Secretary of the Association,
Secretary of the Committee.

was made

Myron

Herrick,

President

Society for

Ohio.

Your committee immediately organized at a meeting
called in the City of New York, and issued the following circular, which was sent to every bank and banking
house in the country:
"

sented respectful consideration. We urged tnat the tax
be removed upon bank checks; that bankers' capital had
been singled out from all other capital in the country
for special taxation in the Spanish War revenue bill;
that

The undersigned were appointed a Committee by the PresAmerican Bankers' Association for the purpose of

bank

capital,

bankers' capital.
" If you will see or communicate immediately with your
Representative In Congress and your Senator, and any one else
whose influence will be of service, the favor will be appreciated.
It is only by prompt and concerted efforts that work in this
We would be
direction will accomplish satisfactory results.
pleased to receive notice from you of your action and Ideas on
the subject, as the efforts of the Committee will not cease until
they have proven successful.
" If you are not a member of this Association we extend you
a cordial Invitation to join and aid in the reduction of a tax

its

conspicuity,

was subject

exchange drawn in Toronto, Montreal or Quebec,
cities, might be sent to New York agencies for sale and escape taxation entirely, whereas bills
drawn in New York were subject to a very severe tax,
the result being that very little foreign exchange business was done by American banking institutions, and in
common fairness the tax should be removed.
Other features of the existing law were discussed and
criticised, and the matter was followed up by correspondence and by personal interviews with prominent
members and Senators, and an earnest effort made to
obtain for the banking institutions of the country proper
consideration at the hands of our legislators. The resulting legislation is well known, and while not all that
we desired, nor all that we think we were in common
fairness entitled to, still we feel that your Association
may well congratulate itself upon the results accomplished, and justly feel that we have exercised an important and controlling influence in bringing about such re-

bills of

or in European

Respectfully submitted,
A. B. Hepburn, Chairman.

sults.

Secretary:

The Secretary then presented the

follow-

ing notices:
NOTICE.
Delegates are respectfully requested to deposit their railway
receipts with the Secretary.
NOTICE.

Tuesday, October 15, 1901.
Reception given to visiting ladies at Athenaeum, corner
Biddle and Cass streets, at 4 p.m.
Carriages will be provided for visiting ladies.
Reception to delegates and ladies at the Deutcher Club, corner Grand avenue and Ninth street, at 9 p.m.
The Wells street and Farwell line of cars and the Twelfth
street line run on Wisconsin street and Grand avenue and pass
Entrance to club on Ninth street.
the Deutcher Club grounds.
Street car tickets for the use of guests will be found In the
book of tickets.
NOTICE.

Wednesday, October

ident of the

having a reduction made in the existing internal revenue laws.
" At a meeting held to-day it was the general opinion that
our efforts would be attended with measurable success if the
banking interests of the country will work in a uniform way
for the abolition of the stamp tax on checks, telegrams, express
receipts, negotiable paper, bills of lading, bills of exchange and

from

higher rate of taxation, both for local and general purposes, than any other form of property, either real or
personal; and therefore we felt that if the condition of
the Government's finances warranted a reduction in taxation, this discriminating tax upon bankers' capital
should be entirely removed; that the tax upon bills of
exchange, as the law was worded, was an unjust discrimination against our own corporate institutions, as
well as individual bankers and banking houses; that

Hepburn, Chairman, Vice-President Chase National Bank,

A. B.

Wm.

the country, and
must have produced a pronounced and favorable effect
upon our national legislators. Although no public hearing upon the pending bill was allowed, your committee
visited Washington and had long interviews with the
chairman of the Ways and Means Committee of the
House and other prominent members, and with the chairman and other members of the Finance Committee of
the Senate, who gave to us and the interests we repre-

16. 1901.

of the Convention and visiting ladies wishing to
take the drive this afternoon are requested to be at the Pabst
Theatre as near 2 o'clock as possible, and to arrange themselves
in parties of four, so as to avoid delay in starting.

Members

For the entertainment at the Exposition Building, corner
State and Fifth streets, at 8.30 p.m., take either Eighth
street cars going north on West Water street, or State street
cars going west on Wisconsin street and north on Third street.
In addition to the regular cars on the State and Wisconsin
street and the Eighth street lines, special cars will be placed
ou Mason street one block north of the Hotel Pfister, and on
Grand avenue one block east of the Plankinton House, at 8.15
The cars from
p.m., to take guests to the Exposition Building.
across Oneida
and
street
Mason
down
the Pfister will pass
Guests staying at the Kirby and St. Charles can
street bridge.
take the cars at the corner of East Water and Mason streets,
of

those staying at

the

Blatz at the northwest corner of East

BANKERS' CONVENTION.

Water and Oneida streets, and those staying at the Republican
ac the corner of lliird and Cedar streets.
Returning the special
will leave the Exposition Building about live minutes apart.
L1.30 p.m.. a;id will return the same way that they
are therefore requested to Inquire of the conductors which way they are going before boarding cars.
These oars
will make as many trips as may be necessary to take guests to
and from the Exposition.

hllimlin

'it

G uests

came.

Committee has therefore tended to establish
more uniform and equitable basis.
.Members arc informed that Companies
tioned standing arc

lay in starting.

Arrangements have also been made with a photographer to take a picture here, and if the delegates and
visitors will keep their seats, immediately after the
Convention closes to-day the photographer will try to
take a successful picture by flash light.
President:

Bureau
of the

Instead

receiving the

Education just now,

the
will have the report

report of

Committee on Fidelity Insurance, by the chair

man, Mr. A.

the

American Banker*' Association:

When

this Association

met

1898,

the

Executive Council found among the conditions affecting
the question of Bank Fidelity Insurance that rates
wore chaotic, that each Company was writing its own
forms of bonds, and the forms supplied our members
greatly exceeded in number the Companies issuing
them, while the provisions of different bonds written
even by the same Company would be greatly unlike, so
that there was an entire lack of uniformity; that losses
resulting from dishonesty were reported where the insured failed to obtain a satisfactory settlement from the
Insurers; that our members, while recognizing the need
of Fidelity Insurance, had a more or less widespread
distrust of the protection offered,

Association

the

appointment of

recommended
this

to the

Committee,

the

whose work was clearly set forth in the resoluthen adopted— viz., " That a Committee of this As-

scope of
tion

sociation be appointed to inquire into the rates of surety

bonds and

to consider

recommend a standard form

of policy,

and

any plan or plans that may be submitted."

Our two previous

reports are a part of the records of

and may be found in the proceedings
for the year 1899 on page " 98," and for the year 1900 on
page " 93."
this Association,

BATES.

found

that, three years ago,

rates ranged

have an experience

own

insurance, there was, so far as
could learn, no combined experience table on this

branch of insurance, and some Companies frankly stated
that they had not separated their bank risks from their
general busin>
In order to ascertain

what was an equitable and ade-

quate rate it became necessary to secure tables of the
experience of our own members, which have satisfied
us that the highest rates were not warranted by conditions, and that while the very low rates might be adequate in especially favorable years or possible for some
Company enjoying a particularly favorable loss ratio
for B -tries of years, they are probably too low to afford
trance of sufficient income to meet losses in full
over a period of years, and this, not because losses consume so much of the premium income, as because expenses take the major part of the receipts.
ed that the lowest rates then granted
We a:
in
fierce
competition for business, instead of
were made
as the result of deliberate judgment based on carefully
statistics.

that while no lower rates are obtalned than the lowest three rears ago, the high rates
It

then BO

to be noted

common have

The publication

Information

furnished

It is in the line of

Its basis is a

plication filed

The

uniformity.

premium payment and not an
with the Surety Company.

rights

It is

able but invisible portion of its terms.
5. It is a contract of insurance rather than of suretyship. Talk Oils point over with your attorney.
G. Each man is bonded as an employee, permitting
freedom of transfer without notice to the Company,
thus preventing any question as to his serving in a
dual capacity, or in case of a default any question as to
whether it occurred while he performed the particular
duties for which he was bonded, such as bookkeeper,

teller, etc.

a continuous bond, so long as the premiums
loss may be recovered years after the default, if the bond is still in force.
8. It insures not only the funds of the bank, but the
funds of others in the hands of the bank for which it Is
7.

It is

are paid.

responsible.
9. The theory of the bond is that the entire staff
should be covered under it, so that if a default occurs
where one of two or more men might be the guilty party,
it is not obligatory on the insured to say which one is

guilty.
10. It covers all men under
stead of having bonds expiring
11.

Employees
at

any

may

a definite date, inthrough the year.
be added to or taken from the
it

all

date.

12. It is absolutely free from any clause designed to
befog a clean cut contract.
We regret to be obliged to report that in some cases
Companies are writing this policy only after persistent
attempts to furnish their other forms, and some are insisting on the assured making warranties in the application blank as a basis of the contract. This makes a
conflict in the terms of the policy and is liable to involve the bank accepting such insurance in litigation
and possible failure to recover, in case of loss. Our
members cannot too carefully guard against any attempt to substitute an application blank containing warranties for a cash premium as a basis for the insurance.
For information of our members we give a list of the
Companies writing this bond, and quote briefly their
expressions in regard to it:

.Etna Indemnity Co., of Hartford, Conn.
" It seems to be fair both to the Company and the assured."
American Bondino & Tklst Co., of Baltimore, Md.
" Its terms are fair to both the employer and the surety."
City Trust, Safe Deposit & Surety Co., op Philadelphia:
" I have no hesitancy In saying that I regard the form of
bond as entirely fair both to the Surety Companies and
:

the Banks."
Fidelity & Deposit Co. of Maryland, Baltimore, Md.

The form, In main, Is satisfactory."
National Bubbtx Company, of New York:
this

ap-

and duties of both parties appear in the
the whole contract, so that statements, application blanks, etc., are not needed to make a considerbond.

practically disappeared.

the

was drawn

for the Association, under the direcCommittee, by the eminent law firm, Butler,
Notman, Joline & Mynderse, of New York.
1.

tion of this

bond

While some Companies claimed
table based ou their

prepared

and a comparison with contracts drawn for the
Companies by their attorneys.
Briefly some of its advantages over other forms are:
ions

from

$1.50 to $5.00 per thousand.

A very considerable percentage of our members using
corporate fidelity insurance has adopted the Association
form of bond, and many more have expressed a determination to do so at their next renewal. An even more
general adoption will follow a knowledge of its provis-

Denver

unques-

now accepting business on the As-

STANDARD FORM OF BOND.

Anderson:

Report of the Committee on Fidelity Insurance.

soclation form of bond at $3.00 per thousand, and on
forms affording less protection at lower rates.

NOTICC
Thursday. October 17. 1901.
ers of the Convention and visiting ladies wishing to
visit the breweries are requested to be at the Pabst Theatre
this afternoon as near 2 o'clock as possible, so as to avoid de-

rates on

" In

our estimation

It Is

the best bond In the market."

BANKING SECTION.
Pacific Screts Co., as san Francisco. Cal.
"It appears to be a bond fair to the bank and fait to the
Surety Company."
United States Fidelity & (Jiakanty Co.. op Baltimobh, Mix:
"The bond submitted Is indeed a most admirably constructed
instrument to safeguard the interests of the banks of
your Association."
Kmi'loyei;s Liability Assurance Corpokation, Ltd.. London:
" llie contract is very fair, and with as few technicalities
as

BRITISH FIDELITY INSURANCE.

possible."

Onion
"

Yours

butt & Guaranty Co., of New York:
is the most equitable form of bond yet devised."

be noted that the first loss occurring where
our form of bond was used was also covered by a bond
in another Company using their own form, and the
It is to

member communicating the loss reports: "The Company furnishing us the A. B. A. form say they will
settle, at any time, but the other seems disposed to resist."

BLANKET BOND.

blanket bond has been extensively advertised as
recommended by a Committee of Bankers, and that no
member of this Association may confound any such
bond with the bond approved by this Association, we

wish to state that we have not recommended any
Blanket Bond, nor have we seen one that did not contain
conditions that would preclude our either using it ourselves or

commending

to others.

GENERAL.

The work

of this Committee developed so rapidly
year that to properly attend to it a clerk became an
imperative necessity for this year.
With his aid a

last

knowledge of the work has been extended to every National Bank Examiner, Superintendent of State Banking
Department and Insurance Commissioner of the several
States. We have gathered a large amount of statistical
information for the year 1900, and have promptly advised all inquiring

members

of anything to their interest

within the scope of our work.
Numerous and heavy as were the defalcations for the
year 1900, it should be borne in mind that the combined
office force of our members exceeds thirty thousand, and
among those that were covered by corporate suretyship
for each bonded man that strayed from the path of rectitude there were over nine hundred that remained faithful.
It is to be noted that the heavy defalcations last
year were mostly by men not covered by surety bonds.
Without intimating that the companies do not, as a rule,
pay their losses, we regret to report that during the
year 1900 sixty-one per cent, of the losses reported to us
were resisted, contested, or otherwise unpaid by the
companies who had accepted the premiums and issued
therefore something that was called fidelity insurance,
the losses to our members from this source being in a
single year several times the average annual loss which
was reported by our Secretary as sustained by our members from the depredations of burglars, robbers and
" hold-ups " since 1894.
In marked contrast to this condition is the record of The Bankers' Guarantee & Trust

Fund

of London, a

mutual

fidelity

company

and

for

banks, whose Secretary recently stated to a
member of this Committee that in their thirty-six years
of experience not a single claim had been contested.
In spite of the dark record of defalcations last year,
British

and partially because of the failure of the companies to
pay the losses reported, our members will be interested
to know that for every dollar the companies returned
The banks connected with this Association in loss payments they received $7.81 in premium income, and that
in the last three years the excess of premium payments
made by our members to the companies over the losses
recovered is little if any less than one million dollars,
and that this is going on at nearly the same ratio, beause. while the rates are considerably lower than heretofore, the volume of business is increasing. The contributions coming from single banks connected with this
Association range as high as four thousand dollars,
and in one instance reaches six thousand dollars a year.
<

73.

A member

of this

Committee

visited

England and*

made, on behalf of the Association, an exhaustive investigation of the conditions surrounding insurance in
British banks, verifying every statement made in a most
important quotation appended hereto (see Appendix)
and to which the attention of our members, particularly
those employing a numerous staff, is called.
He found that, while there were large and successful:
surety companies, they wrote few if any bank risks,
because unable to compete with the Mutual Company,
whose expense ratio is so much less than theirs.
A great many of the banks accept the protection of the
Bankers' Guarantee & Trust Fund, to which reference
was made in our first report, for which the insured is
paying five annual payments at a rate of $2.50 a thousand, after which his insurance is permanently carried
without further contribution on his part, and instead of
finding this rate inadequate the Company has met all
losses and now has nearly a million dollars of invested
surplus.

Many of the leading banks, including the Bank of
England, and others employing large office forces, have
mutual funds of their own to which payment is made
until a maximum sum is reached, and then all surplus
earnings or payments into the fund from new employees
are returned to the force in the form of pensions, annuities, widows' benefits, or otherwise, and it is the
consensus of opinion among British bankers that this
manner of bonding their employees and establishing
either a pension or a widows' fund is of even greater
importance than the fidelity feature alone, it being
found that the mere bonding of an employee in an ordinary company does not encourage honesty in a clerk;
that he merely pays his money as a matter of form and
knows that if he should go wrong the penalty would be
no greater in robbing the bond company than the bank;
but the practice of having either a pension or a widows'
fund combined with the fidelity feature is a real safeguard, because then every employee is personally interested in the growth of these funds and one clerk is a
check upon another, knowing that if there is a loss thesefunds must suffer, thus affecting not only the staff as a
whole, but every individual member of it. This opinion also finds endorsement among Canadian bankers, as
evidenced by the report of the General Manager of The
Imperial Bank of Canada to the stockholders for the
year 1898. (See Appendix.)
We are thoroughly convinced of the wisdom of thus
interesting the whole staff in the honesty of every member thereof, and believe that an application of this principle to American Fidelity Insurance would be beneficial.
This could be accomplished by the insurer charging a rate somewhat higher than the net rate necessary,
and periodically returning an agreed dividend or bonus
to every member of the force in which no default occurred, and withholding the dividend from all members
of any force in which there had been a loss payment
during the year.
IN CONCLUSION.

Having now, as a Committee, performed the duties
imposed upon us by reporting the rates paid by our
members for their insurance; having provided a standard form of bond and secured nine surety companies
from whom it may be obtained by members; having
carefully considered all matters submitted pertaining to
this subject; having in the discharge of our duty not
only hung out danger signals upon some of the shoals
that had been proved dangerous to warn our members
from future bitter experiences, but having mapped out
courses of safety, we respectfully ask that this report
be received and we be discharged.
In so doing we are not unmindful of the importance
of the subject and the probability that the Association'
at some future date may need to give it further consideration.

BANKERS' CONVENTION.

are convinced that valuable as are the statistics
already obtained, their value Increases with eacb year

the year 1S41 the Bank of England took measures for discontinuing the system of requiring sureties

that they are gathered and tabulated.
We are alive to the fact that stub failure to settle

shillings per cent,

lalma as is reported this year cannot ions continue
without a demand from our members for more specific

Immediately

Information. We therefore recommend that this work
be referred back to the Executive Council, and that they
be granted power to take such action in the premises
all. in their judgment, be deemed best, either by the
establishment of a Fidelity Insurance Bureau or otherwise as they may determine.

committee:
A. C. Aniiersox. Chairman, St. Paul.

Paul National Bank.
('Ai.mvELL Hardy. Norfolk, Va.
President Norfolk National Bank.
W. P. Mam y. Sioux City, la.
President Security National Bank.
Jonx L. Hamh.tox, Hoopeston, 111.
Cashier Hamilton & Cunningham, Bankers.
F. H. Fries, Winston, N. C.
President Wachovia Loan ft Trust Co.
i

APPENDIX.
W. Gllbart, F. Et. S., formerly Director and General
Manager of The London and Westminster Bank, in his
work entitled "The History. Principles and Practice of
Banking." says. " It has become a common practice with
.1.

banks

inaugurate guarantee funds of their own,
thus obviating the necessity on the part of the employee-; of applying to personal friends or to guarantee
societies. It has been said that the charges of the latter
are on the whole moderate, but still, as they remain the
same from year to year, they are extravagant as compared with the rates charged by banks who have guarantee funds of their own, and whose sole object is not to
make profits, but to protect themselves at the least posto

sible cost to their employees.
" It is usual in establishing a

institute

subscribe to this fund.

every

officer

shall see

fit.

fund of this kind to

by a resolution by the board of directors,

who also frame rules for
compulsory upon every one

regulation.

The

directors take

made

the bank to

power

to rate

sum

as from time to time they
contributions on such a rating vary in

at such a

The

its

in the service of

some it is as low as 2s. 2d.
per cent., and in others as high as 5s. And in order to
give solidity to the fund in its infancy it is usual for the
directors to grant a contribution of £400 or £500 per
annum for the first four or five years. In some instances it is usual for the bank itself to pay the subscriptions of those officers whose salaries do not exceed a
The account of the fund is
certain limit— say £50.
credited witli the contributions and debited with the
but the latter only to such an extent as the Individuals causing such losses shall have been rated at.
When the balance of the fund reaches a certain amount
-an amount which in the opinion of the directors shall
be sufficient to cover all possible contingencies of losssay £10,000, then the older contributors may be safely
relieved from all further contributions, so long, at least,
the maximum balance of the fund shall remain intact. Should the balance be reduced by losses, then
those contributors who may have been relieved may be
o required to co n tribute until the balance be again

different establishments— in

made

up.

It is

the rule

some banks

of relief at those contributors

draw

who may have

from the

the line
subscribed

fund an aggregate amount of £1 per cent, on the
highest sum at which they may at any time have been
rated. Experience has shown that such a sum as £10.000
is ample to maintain as a permanent balance, and when
the balance ezceedl that sum it is customary, in addition

to the

exempting the older contributors, to transfer the surplus to the credit of another fund for the benefit of

former contributor-, or their widows or other dependents in needy circumstances, or otherw

clerks.

Every clerk subscribed annually two
upon the amount of his surety bond.

When

be had subscribed in the course of five years (or
if he chose), ten shillings per cent, the liability of his sureties ceased.
Every new clerk subscribed, when admitted, ten shillings per cent, on the

amount

These
of the bond he would otherwise give.
contributions are invested in the Three per Cent. Reduced, or Consols.

When at
" Clerks'
clerks,

.Minn.

Bhier St

•

" In

This fund

fixed at £6,000 stock.

given to the
is
amount the
Widows' Fund." a fund established by the
with the assistance and support of the bank.
interest

this

When the claims have reduced the guarantee fund below £0.000 the interest goes to this fund until it has increased to this amount. If the claims reduce the fund
so low as £4.700 then the clerks are required to make
a further contribution until the fund is again raised to
But this contribution is never more than two
£(5,000.
shillings per cent, per annum on the amount of their
respective bonds. Nor can any claim be brought against
the fund greater than the amount of the bond that
would have been required of the defaulter. The clerks
still give their personal bonds, which are for the full
amount of their deficiences. This is an admirable plan
for a large establishment. In adopting it the directors
have shown a sound discretion, as it makes all the clerks

interested in watching over one another. At the same
time they have manifested that kindness and good will
which have, Ave believe, at all times distinguished the
directors of the Bank of Eugland in their conduct

toward
" Mr.

their clerks.

Thomas Hankey. when

governor, delivered to
account of the

the following

the Banking
workings of the system:—
" With regard to the guarantee system, It appeared
to him that the principle adopted in the Bank of England in 1841, by his predecessor, was capable of extension, with great benefit to the clerks, to many of the
Institute

other banking institutions of the country. The principle
of that plan was that the compulsory payment of £1 a
year for five years, or £5 in one sum, was required from
each clerk on entering the establishment. These payments accumulated until they amounted to a sum of
to
£6,000, the interest of which was then to be applied
another purpose, for the benefit of the clerk; but in the
meanwhile the fund was applicable to all losses of the

bank which under ordinary circumstances would fall
upon the private sureties. Every clerk, upon entering
the establishment, was bound to give security to the
amount of £1,000. Well, he believed the lowest premium the guarantee societies would take was 10s.
per cent., or £5 for the £1,000, and this £5 premium had
of this £5
to be renewed every year. Now, the amount
of the 700 clerks of the Bank of
England would be £3,500 a year. Well, since the guaranestablished
tee fund to which he had alluded had been
England
in 1841, tbe total defalcations in the Bank of

premium from each

had only amounted to about £1,500. Now, if the 700
societies
clerks had paid the £5 a year to the guarantee
nearly
raised
have
would
for the whole of that period it
gone
have
as much as £40,000, the whole of which would
the exinto the pockets of the guarantee societies, with
necessary
been
have
would
which
ception of the £1,500
£40,000 had
to make good the defalcations. Now, if the
it
been paid In premiums, and £1,500 had been the loss,
show
would require very little argument from him to
great
that the guarantee societies would have been very
gainers, at the expense of the clerks."

FROM ANWTAL REPORT OF D. E. WILKtE, GENERAL MANAGER OF THE IMPERIAL BANK OF CANADA, 1898.
" Reference in the Report to a Pension Fund is.
however,
think, most timely. A Pension Fund is not,
would
exactly what the Board has in contemplation. It
Superanexpression.
use
the
of
make
be more correct to
I

BANKING SECTION.
Fund. The greater part of the Fund will be
made up from contributions from the employees themuuation

Bank contributing a reasonable amount anThe objects of the Fund are the maintenance

selves, the

nually.

of the personnel of the

stall*

as long as

be required, to provide an annuity for

its

services

them

may

in their old

remove the temptation to individual members to resign their positions for employment elsewhere
at a time when their services may be most needed by
he Bank. The proportions which will be contributed
to the Fund by the employees and the Bank, and the
management of the Fund generally, are matters which

age.

and

provided for executive supervision on the part of Mr.
Kittredge, and the services of himself and the members
of his staff equivalent to the full time of one duly quali-

man, together with suitable offices for the Institute
and such force of stenographers and clerks as might be
fied

necessary.

are very properly left to the Directors.

In this connec-

mention that some years ago you approved
of the establishment of an Officers' and Employees'
Guarantee Fund; that Fund now amounts to a considerable sum and is the property of the Bank; had it not
existed moneys now in hand to its credit would have
been the property of Guarantee Companies and would
be lost to the bank. I hope that the Superannuation
Fund will accumulate rapidly; I am confident that the
tion I should

expectation that it will solidify the staff and increase the
interest which they have always taken in the welfare
of the Bank, without occasioning more than a trifling
expense on the shareholders, will be fully realized."

Mr. Joseph G. Brown, of Raleigh, North Carolina:
This report very clearly indicates that this committee
have had before them a matter of far reaching importance
Only those who
to the members of this Association.
have watched their progress from year to year can have
any adequate idea of the amount of labor that it has
entr.iled upon the committee. This work has been done,
as is clearly shown by this report, with great patience
and fidelity, and with high intelligence, and 1 therefore move in recognition of this that this report
be received and adopted, and that the thanks of the
Association be tendered to the members of the committee for their excellent work.
(Motion seconded.)
President: It is moved and seconded that the report
of the Committee of Fidelity Insurance, presented by
the chairman, Mr. Anderson, be accepted and adopted
with the thanks of the Association for the very important work they have performed.
Motion unanimously carried.
Mr. Anderson: On behalf of the committee, I would
say that the thanks of this Association is ample compensation for the work that we have done. (Applause.)
Col. Robert .7. Lowry then presented the report of
the Bureau on Education:

Report of Committe on Education with Respect to
the American Institute of

Robert

Bank Clerks. By

Lowry, Chairman.
Milwaukee, October

To the American Bankers' Association:
Your Committee on Education has the honor to report
that in accordance with the expressed wish of the Association and the authority of the Executive Council it
has organized an institute of bank clerks and secured
the successful operation of the same up to the present
time. The name given the organization is the American
Institute of Bank Clerks. Its legal form is that of a
voluntary association under the laws of the State of New

From

the outset your Committee proceeded in a deand conservative manner, spending some time
in the investigation of educational methods and the consideration of ways and means. At a meeting of your
Committee, held in New York, February 15, 1901, a plan
submitted by Mr. A. O. Kittredge, President of the Account, Audit and Assurance Company, Limited, was
adopted, and the formal organization of the Institute
agreed upon and in due course effected.
A contract was made with the Account, Audit and
Assurance Company, Limited, for the formulation of a
general plan of educational work and the conduct of such
work up to October 1 of the current year. This contract

contract,

Committee

your

was

and willing to take into consideration the uncertain income from students and associates of the Institute in
panging expenditures and figuring remuneration for
their own services. Such chances your Committee, of
course, could not take.

According to the terms of the contract with the Account, Audit and Assurance Company. Limited, that corporation was to receive the sum of five thousand dollars
for the services specified, including services previously
rendered, together with the income up to October 1.

Your Committee was to pay the expense of preliminary
advertising in accordance with an agreed plan, together
with such disbursements for traveling, telegraphing,
telephoning and other incidentals as might from time to
iime be authorized.
After settling in full with the Account, Audit and As-

surance Company, Limited, up to October 1, and paying
all other expenses, there remains a respectable balance
out of the appropriation of ten thousand dollars originally made for the purpose of inaugurating the Institute and operating it the first year.
In the organization of the American Institute of Bank
Clerks and the operation of the same up to the present
time your Committee has guarded against creating any
•

obligation, financial or moral, actual or implied,

which

might in any manner forecast the policy of the American
Bankers' Association in the matter of educational work.

The members

of the Association

may

feel assured,

however, that a foundation has been laid upon which a
superstructure may be erected in keeping with the dignity, wisdom and pride of the bankers of America.'

The educational work

is more paraccompanying report of the
Secretary of the Institute, which has been duly received
and approved by your Committee, and is made a part of
this report.
Robert J. Lowry, Chairman.

of the Institute

ticularly set forth in the

Report of the Secretary of the American Institute
of

Bank Clerks.

New

York, September

30, 1901.

To the Committee on Education of the American Bankers'

—

Association

The preliminary work

of organizing the

American

Bank Clerks was completed on the 23d of
March, 1901, when the Articles of Association were duly
Institute of

signed by the following trustees:
William C. Cornwell, Buffalo, N. Y.
Robert J. Lowry, Atlanta, Ga.

Harvey
J.

J. Hollister, Grand Rapids, Mich.
B. Finley, Pittsburg, Pa.

George F. Orde, Chicago, 111.
.Tames G. Cannon, New York, N. Y.
A. C. Anderson, St. Paul, Minn.
Harry L. Burrage, Boston, Mass.
John F. Thompson, New York, N. Y.

York.
liberate

such,

prompted by a two-fold motive. First, Mr. Kittredge
and his company, through their equipment and connections, were manifestly able to furnish services equal to
any possible requirements; and, second, they were able

Col.

15, 1901.

making

Under the provisions of the Articles
ficers were elected as follows:
President
Wm. C. Cornwell.

of Association, of-

—

—James Cannon.
Kittredge.
—

Treasurer
Secretary

A. O.

In July Mr. Cornweli resigned the presidency, and at
the request of the trustees, Mr. Cannon, as ranking officer, acted as President until a meeting of the trustees
was held in New York, August 12, when Mr. Cannon
was formally elected to the presidency for the unexpired

term ending next March. "Upon assuming the office of
President Mr. Cannon resigned as Treasurer, and Mr.

John

Thompson was

elected to that position.

HANKERS' CONVENTION.

76
OBJECTS AND METHODS.

The objects and methods

of the Institute, as sel forth

iu the Articles of Association, arc as follows:

ami socially, through local chapters
engaged iu dlfferenl localities in the
banking business, or who Intend to become connected with it.
either as officers of banks, trust companies or savings banks, or
as bankers, or as clerks of banks, trust companies, saving banks
or banking booses, who desire to improve themselves by devoting
a portion of their time to the study of the matters connected
with the banking busl
tally train all who become associated with the
Institute in those branches of practical education which have
a direct bearing upon the business of banking.
3. To originate and circulate literature relating to the pract'ce and science of banking and of business administration.
4. To afford to those associated with the Institute the advantages of lectures upon business methods, the principles of banking, the science of finance, applied economics, commerce accounts
and other subjects of practical value to them.
5. To conduct for the benefit of those associated with the
Institute a Correspondence School of lianking, under the charge
of a competent faculty.
0. To conduct examinations of bank clerks and others associated with the Institute with respect to their technical quali1.

unite, fraternally

or otherwise,

those

all

fications,

and

issue certificates setting forth

the results of

such examinations.

accordance with the foregoing statement of the
-objects and methods if the Institute, its educational
In

work

conducted along three distinct lines:—

CHAPTERS.

The association

hank clerks

iu local chappurpose
of arters, chartered by the Institute for the
ranging courses of lectures and debates and the investigation of special subjects. Members of local chapters
become associates of the Institute. While chapter work
is done under the supervision of the officers of the Institute, it is expected thai members will arrange the details
of their programs, providing for lectures by local talent
and conducting the affairs of their organizations in such
manner as will best develop their own capacity for
management and stimulate self reliance.
The Bank
Clerks' Association of Minneapolis and the Bank Clerks'
Economic Society of St. Louis, which have been in successful operation for some time, have affiliated with the
Institute, and new chapters have been organized in New
York, Chicago. Pittsburg, Cincinnati and Louisville.
Progress has
n made in the preliminary work of
chapter organization in various other cities, and it is desirable that the work of forming chapters should be actively followed up throughout the United States during
the coming winter.
PERIODICAL.

First

Second— That portion
.providing

of the Articles of Association

and circuand science of

that the Institute shall originate

late literature relating to the practice

banking and of business administration is put into practical operation by the publication of The Bulletin of
the American Institute of Bank Clerks, a periodical
through which much of the educational work is conducted. The Bui.i.i iin is the official medium of communication iift ween the officers of the Institute and
members of hK-al chapters and students in the Correspondence School of Banking. It contains reports of
lectures before chapters and leading educational institutions, as well
articles on banking and kindred
subjects. 11 also contains the examination questions In
connection with the Correspondence School of Banking.
The I'.t eletix is whoiiv educational in character, and in
no way attempts tr, encroach upon the well denned field
of banking journalism mi ably filled by existing newspapers and ina_'ii/,iiies. The Bl i.r.i ji\ lias been cordially
veil by the banking fraternity generally, executives
as well ;i- clerks, and from 5,000 to 10,000 copies of each
issue have been circulated.
.

CORRESPONDENCE QTSTBUt

TIOIC.

Third -The courses of study in the Correspondence
School of Banking are so arranged ns to make up deflclenee^ in primary education, while also rounding out
and completing Ihe equipment for practical work. The

courses will ultimately embrace everything that can
be
advantage to the average clerk iu qualifying himself
for the highest responsibilities of banking.
At the present time they embody lessons, examinations
and cer-

tificates of

improvement and proficiency

Spelling, English

Penmanship,

Grammar, Composition and

Rhetoric,

Business Correspondence, Shorthand, Typewriting, Commercial Geography, Financial and Commercial History,

Bank

Arithmetic, Double-entry Bookkeeping, Bank
Bookkeeping, Practical Banking, Commercial Law, Gov-

ernment and Practical Finance.
PUBLICITY.

Immediately after the organization of the Institute
last March one hundred thousand copies of
an eightpage folder were issued and sent to banks throughout
the United States. This folder described the general
plan of the Institute and outlined the courses of study in
the Correspondence School of Banking. As showing in a

comprehensive way the character of printed matter circulated by the Institute, and also presenting additional
facts pertinent to this report, the following paragraphs
are quoted from the original folder sent out:—
Banking is a complex subject. The practical equipment of a banker
comprises everything there is In an ordinary education, and in addition
various mutters that are special to his requirements. To meet the needs
of bank clerks, therefore, It is necessary to furnish that which will
enable them to supply the defects of their elementary education, as
well as to carry themselves forward in their chosen calling.
The
Correspondence School of Banking has been organized In a broad and
comprehensive way, but wholly along practical lines, and Is adapted
to supply whatever the individual may demaud.
The courses of study
will ultimately embrace everything that can be of advantage to the
average clerk In qualifying himself for the higher responsibilities of
banking.

The American Institute of Bank Clerks has provided this comprehensive plan of education, and offers It to the rank and file of bank
employees at a uomlbal expenditure of their time aud money. It is for
them to make use of its facilities. The Trustees are convinced that a
large majority of American bank clerks will be disposed to avail themsome of the courses of study offered, If tbe matter is properly
presented to them for attention.
Those who desire to pursue a systematic course of reading, and not
attempt to master either of the required courses of study, will find
what they want in the Bulletin, conducted by the Faculty and published by the Institute.
Nearly eveiy banker, young or old, realizes some deficiencies in
his technical or general education. All such can find among the courses
of study provided an opportunity to repair their defects and round
out their attainments.
To the credit of bank clerks generally It must be said that very
few need any urging in the matter of self-improvement. Without aid
or suggestion they have in many places organized local associations,
which have been of material benefit to the membership In Increasing
their technical knowledge and broadening and elevating their professelves of

sional spirit.
It is suggested to bank officers and employees that they consider
the plan and ambition of the Institute aud select one of their number
to enter into correspondence with the Secretary, with the view of organizing a local Chapter and availing themselves of such courses of

study as

may

best

meet

their requirements.

Subsequently circular letters were sent to chief clerks
in banks soliciting the names and home addresses of
clerks. By this means direct communication has been
established with a large number of bank employees, and
the facilities of the Institute are now being brought to
their personal attention.

Sample copies of The Bulletin have been distributed
a WStem by which every bank, trust company
and savings institution in the United States has presumably received at least one copy every other month.
In addition, there have been sent out numerous letters
addressed to bank officers personally.
under

SCHOOL OF BANKING.

The Correspondence School of Banking is the medium
through which the most systematic and thorough instruction is given by the Institute. A brief description
of the different courses of instruction as presented in the
literature of the Institute may be properly incorporated
In this report,

showing, as

does, the character of the

educational work and the manner in which attention is
directed to it. The following paragraphs tire from circulars sent out since the school has been in active opera-

tion:—
Th'r

can

Correspondence School of Banking established by the Ameriof Bank Clerks differs from all other correspondence

Institute

BANKING SECTION.
-schools in several essential particulars,
Prominent among these is the
fact that it is restricted to the needs of a single division of business
•activity.
The instruction courses are confined to just those divisions of
knowledge that are conceived to be of prime importance to the banker.

mittee meeting a short time since, at which a number of eminent
bankers were present, one of the gentlemen said that he had long made

studies and which are furnished by the Institute, being covered In
the tuition ft os, are original, and have been specially prepared for this

a rule to employ no clerk. Irrespective of the capacity in which he
would work, who could not write shorthand.
Only a little while ago shorthand seemed so intricate that many
refrained from the study, fearing they could not become proficient.
As
a fact, properly undertaken, shorthand is readily acquired.
Shorthand, as a mere accomplishment, Independent of the use that
may be made of it, is well worth attention. It is considered by many
educators to be better than higher mathematics as a mental discipline.
The course In shorthand has been prepared by an eminent specialist,
and Is practical from start to finish. The intricacies and absurdities
of many of the systems now before the public are entirely omitted.
The student is rapidly and effectively Introduced into a shorthand
which has a considerable literature in print, thus putting at his command abundant exercise in reading.
How to practice at home, how to obtain speed and how to make
the shorthand available in practical everyday work, are important parts

school.

of the course.

In composition and rhetoric, for example, no attempt is made to Instruct In general literary Style, but instead the effort is concentrated
upon thr«e things which the banker is frequently called upon to do,
iud practical Instruction In which it is hard to find. Thus, as will be

seen by reference to the description In another column, particular
portance is attached to such matters as the report of a committee,
preparation of a set of resolutions, the account "f an investigation,
address advocating a business measure, an after-dinner Bpeech, the
laws of a company, and the anneal report of a business concern.

imthe

an
byIn

the description which follows there will be found an account of each of
several important branches of Instruction which bear upon the banking business.
The text-books or lesson sheets which go with these

rE.NMAXSHIP,

S4.

Hundreds of bank clerks are denied promotion because they write
poor hands.
Hundreds of clerks who write rapidly and legibly are
promoted beyond their deserts when measured by other standards. No
one writes so well but that he might improve. The instruction in this
course is along practical lines, omitting all flourishes and all attempts
at ornamental work.
Practical legibility, with ease of execution, are
the special objects in Tlew.
The directions for self-instruction are comprehensive. The methods
of practice are specifically pointed out, and are readily understood.
Particular attention is paid to materials to be used and the positions
-of body and arm.
After principles of letter formation have been thoroughly exemplified, a series of graded lessons follows, in which the
pupil's

improvement should be rapid and satisfactory.

SFELLING, $4.

What

more mortifying to a young and ambitious clerk than to
be found wanting ic the ability to spell? What greater blemish is
there in a business letter, than misspelled words?
How surely would
an application for promotion be turned down if there were misspelled
words in it?
There are well-defined rules for spelling, even in a language as
is

Irregular as English.

There are methods by which words of similar meaning and different
may be distinguished. There are likewise ways and means of
discriminating between words of opposite meaning but similar in
sound.
It is along lines such as these that the course of spelling is
conducted. The student's deficiencies are carefully inquired into, and
help is given him along practical lines.
spelling

ENGLISH GRAMMAR,

$4.

typewriter is to ordinary penmanship what a railway train is to
the old stage coach.
Modern business correspondence Is conducted
almost exclusively in typewriting. Typewriting machines are so abundant that no ambitious clerk has a reasonable excuse for failing to
acquire the skill to operate one.
The course In typewriting offered by the Institute Is along original
and practical lines.
The large assortment of machines now in the
market is analyzed, classified and described. The different keyboards
are illustrated and explained.
The student is advised how to choose a good machine, and, after
he has got it, how to take proper care of It.
Paper, carbon and ribbons are likewise presented in a practical manner, not from the standpoint of the local stationer, who is Interested in selling a special brand
or quality, but from the viewpoint of the user who wishes to produce
perfect work.
The eye method of using the keyboard is explained, and then the
advantages of the touch method are clearly set forth. Abundant provision is made for speed practice.
Taking dictation on the machine
likewise has attention.
8.

hope for promotion or advancement of any kind?
The course of instruction in English grammar is greatly simplified,
compared with ordinary school courses. Sentence-building is carefully
presented, parts of speech are discussed in a way to make the student
to understand them, and finally, common errors are pointed out.
The
student's correspondence with the Institute is carefully scrutinized
for the purpose of detecting his errors.
$8.

When

the student has become measurably proficient in penmanship,
spelling and English grammar, there still remains practical drill in the
preparation of various documents required in banking and in business
in general.

abundant drill In the construcsuch special but useful matters as the
of the report of a committee, a set of resolutions, the reinvestigation, drafting a set of by-laws, short account of
meeting for publication in a local newspaper, an address
a business measure, an after-dinner speech and the annual

in this course the student is given
tion of business letters,

preparation
port of an
a business
advocating

and

report of a business concern.
5.

BUSINESS CORRESPONDENCE,

When we have become

$8.

proficient in rhetoric, there is still

something

to learn in the special application of the principles to business corre-

spondence.
There are also to be considered the mechanical features
of correspondence.
In this course letter-writing is considered from
the standpoint of an art.
Specific instruction is given with respect to materials and parts
of a letter, even extending into such particulars as folding, inserting,
sealing and addressing.

business correspondence to keep a copy of each
letters, therefore, are next considered,
and Incidental thereto plans of indexing arc discussed.
The corresponding clerk Is frequently intrusted with opening the
mail, as well as sending it out.
How be?t to open and record the mall
is next taken up, and finally comes letter-filing.
How the letters are
put away, and how they are to be indexed, with copious illustrations
drawn from practical work, are among the lessons.
It

letter.

required

Methods of duplicating

SHORTHAND,

COMMERCIAL GEOGRAPHY,

$8.

This course is entirely practical.
It is Intended to contribute the
information that is of value and importance to those who are conducting business or have to do with financial transactions. The distribution
of natural wealth Is a leading division of the subject.
The channels
of trade and commerce come in for careful Investigation.
The history
of the development and decadence of the different channels of trade Is
considered.
Modern routes of domestic and foreign commerce, climatic
influences and political encouragements and barriers likewise receiye
attention.

quickly you judge of a companion by the phrases he utters!
If there is a lack of agreement between his verbs and nouns you
instantly detect it.
His faults of diction are quickly apparent to you.
\ ery possibly your friends are equally cognizant of deficiencies of your
cwn. If to the disgrace of poor penmanship there is added the vice
of misspelled words, and on the top of It the crime of bad grammar,
all exemplified in the letters which the bank clerk writes, how can he

COMPOSITION AND RHETORIC,

)j>S.

How

TYPEWRITING,

$8.

It was only a few years ago that a person who could write shorthand was a marvel to his own community. There were so few shorthand writers. Now the demand for shorthand is so general in business

Institutions that frequently applicants for positions are discriminated
against because they have not this particular qualification.
In a com-

FINANCIAL AND COMMERCIAL HISTORY,

$8.

not enough to understand the routine of banking, and to meet
daily requirements with respect to deposits, disbursements, collections,
It

exchange and the necessary accounts. There is a historical side to
finance, an acquaintance with which bears materially upon what Is
being done at the present time. History sets forth reasons for existing
conditions.

the light of the past that we forecast the future.
Periods
and periods of depression, periods of wild speculation
and periods of crazy panic, and all chronicled in the financial history
of modern nations.
The lessons of these successive periods are of the
greatest importance.
The student is taken along most interesting
paths to a familiarity of the historical side of his chosen profession.
The commercial development of modern times goes hand in hand
with its financial development. One cannot be advantageously studied
apart from the ether. The business history of the United States, England and the nations of Continental Europe is pregnant with facts
directly bearing upon the practical banking of to-day.
The history of
inventions and arts which have influenced economic activities serves
It is in

of development

as a foundation upon which to estimate the development of the future.
This course has been carefully planned along the lines thus suggested.
10.

BANK ARITHMETIC,

$8.

When

the young man in business has got far enough Into practical
work to be called upon to make a calculation, whether measuring for
a new floor covering in the private office, computing the discount on a

ninety-day note, averaging an account, or making a settlement where
partial payments are a feature, he begins to perceive more or less
clearly that much of what he was taught in the public school has to
be unlearned and something else substituted before he is strictly up-todate.
It is unfortunate indeed that there is such a gulf between the
authors of school books and the practice which prevails In business institutions.

The effort in the course is made to teach arithmetic as arithmetic
practiced in banks. The student is taken through certain elementary
divisions because they are necessary as a foundation to what follows.
Particular attention, however, Is given to those matters which come
Denominate numbers, perup most frequently In banking practice.
centage, commission, brokerage, interest, discount, domestic and foreign exchange, equation of payments and the averaging of accounts are
is

some of the leading
11.

divisions.

DOUBLE-ENTRY BOOKKEEPING, $12.
taught In the schools, and also, we fear, judging by

Bookkeeping as
some of their graduates, as frequently taught

in business colleges,

and

as very generally set forth in the text-books, differs widely
from the best commercial practice. The endeavor has been made In
the course of double-entry bookkeeping, first, to hold to correct principles, and, second, in illustrations to restrict the examples to what
has been proven by long experience to be the best practice.
The bookkeeping of banks is double-entry bookkeeping, but It is
further,

7fr

CONVENTION.

INKERS

°»*J

oi of duubWeotry b«x .
adaotatloo of double entry
A banker, hen
"•* *** b*nla*a* mast understand th.
otner a»bluf».
llf should be able to readl

bl.

with

)

in,.

an
k*

the beat

lit

i>oal-

his

bort o wnt a aad

411J

the atatcm uts

•

thla

All

be principle*, ol

»lta g»o

carefully explained, linun.lil .mil
finally, various theories of utiaiui

-lailon

reviewed, audv.

DTMtlgataa'.

•

The pubiiL it > of iiu> Correspondence School, aa \% *.'i>
as of the entire wort ol the Institute, has boon con
tinned in the MvereJ letuei ol Tmi Bullxtih.
This
m. -ans
communicating with banka end bank clerks,
which has been demonstrated to be quite effective, is oni
that wiii always u> available to the Institute,
.1!'

Tfcr

•

ttr*»

•

made acquainted with

Brat

the prtn-

me-

dian**, lajrlndlng books of ortgtna
different form*, aad th* au->

a it*

tag the amounts from the
kg
•f ortglual entry to the
Opening and closing books are the
\'
tlon
to the
loss statement, an.l to lb
toon use are discussed and tllust
aad the principle* of adapta
requirements are
r
r
Qj
1. aad.
The coarse Includes nnmerous praetloal
In ruling
blanks aad forma, somethlnf tha
In actU
'

•

preparation of the courses of study in the Cor11
baa been uecessarj to employ numerous specialists si considerable cost All such arrangements, ;iv well as the contracts for printing, bav<
tin-

respondence School

.•

lis.
>ne should undertsk.- bank bookkeeping, which sboul.l
as merely a apeclal adaptation of doable
ping, until he
la thoroughly grounded lu tb
and practice ol doobla.
t

him

that are
It

be done.
no part of the course In bsiu

msny

for

thlnga

ing to Instruct

the

with rebookkeeping

made

Invariably been

name

the

of the Account, Audit

and Assurance Company, Limited, thereby protecting
your Committee from all responsibility ami relieving
yon from all chances of annoyani
Burveylng the work accomplished up to the present
time, and not forgetting the comparatively late Mate at
which the Institute Mas formed a date at which alt.
every or., was beginning to plan for riie hot weather of
summer it would seem that tin- effort has been em-

•

mediums si
to what

spect to posting
utlot.-

the batik

banks snd financial

.11

Uistl-

accuotr
,.. n
ludlTlilual Isdgjf,
Unuslt
:.-ek». the s>
ivlng
the paying t<
na, collection departirtmeut. stocks snd bonda, ami tot
:inge are
the •rx-clal aubjecta In which the student
i^-lily
Inil

The student may be
employes,

entirely competent lu each of the routine
r- familiar with the duties of all the various
runner, clearing-house mes«
reiving t<
;

He may

from

eoUectloa clerk, correspondent,
;

resident

and

position of cashier or

be deficient

still

all

banking

aid* of the routine work of the several positions nam.. I.
la every community there sre several ^
Wh.
banks.
the question of organising s bank Is up f
ration there Is the
caosee between the State law and tl.
law.
A given group
'

;

:•

decide upon sn ordinary bank of deposit.
An
groap will prefer to launch a trust company.
Still other men In
the community
> organize a saTlt.gs bank.
The coarse In practical banking dlacoaaea all these questloi
oat bow organlsatloos of banka n
state laws and Nalaws, snd under special charters.
il
The administration of banks
la then taken up. the different departments
:.
and the
IBcers

and employees carefully

om bank

•>.

the l**Ainm dlvls:

among

are

anal,

nk accounting
Money, chirks,
surplus, dividends and bank exam-

and that Is that the number

offer coaraes

—

anslgne-

imply Hi

in*

The

like.

arbola

Bank

clerks will not flock to the Institute either as

TMi

course

Incl ud es

may
a

be s good cltlz
upon which the govcrnm.

There

nj
la

„•

respectfully submitted.

be put

uaea tha-.

<lge

good

You

loo

\JO

will

thai will be worth a great deal to
the banks thai employ them, and we have done, as
ii

think, yevy fairly well.
literature Hiat

he committee
read,

we have spread around
will

•Ionian

be very

and any sug

thankfully received.
\\'e nave with us this

i;iad

Indeed

in
if

these

each

made would

morning Mr. Klttredge, the
the Institute, and he
you more of the details than

rotary of

a few words, tell
there!
I.
ain able to in the abort lime alloted.
with the permission of the President and you. gentlemen,
if Mr.
Klttredge making some
would ask the
will,

[

also Included a cons!

tna rlne aad fall of gove r nment a.
Fir
;')w-r ami d-

Km RBT>

observe that the report of the committee
is on education with reaped to the American institute ,,f
BankClerka We have really been al work only aboul \
months, and we think we have done \ cry well, and
are thoroughly satisfied thai the work Bhould be
tinned. It la a cheap and easy way for our young men

a onaarlal and com rue re 1.
•r-.m.nt to l.'ialn-sa Interests

».

;.-

member would

found

re-

\". !.*:. 'p

them personally.
is

.Mr. Dowry: The printed report will give you a
will therefore
deal of information on this subject, and
make my remarks very brief.

Baa from legal forma.

anker should be a gokaowledg•)wo, county and State*

which

The
ilr

of students enrolled

chapter members or as students upon their own volition,
but they have shown themselves ready to be persuaded
Qgage in the work and to fall in with the overtures
of the Institute whenever its real advantages have been

said,

results

commercial law.

specific

j 12.

Local lecturers are
available wbo are ready to deliver covjrae* on commercial law.
The commercial law of the
and very generally a*>
plained by lecturers, la not exactly
mmerrlnl law Aaananded by bankers. Tbe one may It.
.mmerrlnl
law In which bankers sre Interested Is the smsller part.
In this coarse, after drilling the student In the underlying prln>-l'
of boalneaa law and getting before him a con
the com.ry law governing contract*, agencies and partnerships,
>blems as corporations, bow formed tod t
rued, together with leading feature*
ration law In the various States,
iken op aad exhanstlv
Tbe rights and dating of
tanad.
partlea to commercial paper sre very carefully Investigated.
Bills,
aad notes are likewise taken up. and th at* la finally
'
ited a d In
st
"f tbe
administrators, executor*,
s>-bor>ls

the

—

All of

Many

the Correspondence school

brought home

addition

and the chapters organised
have been iii direct proportion tothead\ ertlslng Conducted
by the Institute. What is meant by this is that with
more advertising, with more direct effort In the Held and
a still larger volume of correspondence the results to
date might have been greater than they are. Or, t<>
state still otherwise ami to give the fact that Interpretation which is of the (rrefltesl importance to your Committee, the pr"-i
and usefulness of the Institute for the
future, we believe, will depend largely upon the lib*
ality with which the movement is managed.
in

ttoss In a bank.

successful.

have beep, accomplished it is manifest that a fOUH
dtition has been laid broad enough and deep enough t«>
sustain anything which may be erected thereon.
One fact in particular which has been Impressed upon
us at ever] Step In this work Should be noted in thN con
section,

$ 12.

inently
thai

ma.

Into

*
-

D*M State.

upon

Klttredge, Secretary of the American inink Clerks, was then introduced.

Mr. a. 0.
;

Tbe

course In practical finance
bat of practical baaklog
age aad currency are consider^:
view, sa
'-'jo tb* viewj
a

and

point of tb* Inveetor.
-

nee

anktng
islaana

otr-

•

Inquiry

.•-...-••

'In.

•

la
.•

made
pr

ik'I

•nm!-

plea

underlying

taxation

Mr. Klttredge: Mr. chairman and Gentlemen: The
.\nz me to speak has
Object Of your commlttei
certain
you
atatlatica
of the work
before
to gel
:

If*

BANKING SECTION.
done, and to Indicate in some measure our
with certain illustrative incidents regarding
that which we have accomplished.
As you will see by the literature that is in the seats,
our work is divided essentially into three parts. There
are chapters of the Institute, meaning local organizations; there is a correspondence school of instruction,
and there is the periodical. The latter you have samples
of. therefore I need say the least about it.
that

we have

methods,

with respect to chapters: Chapters of the Inthe gathering together of the bank clerks
in a given locality in a formal organization, with stated
times of meeting, before which shall be given addresses
on any subject that the clerks composing the Institute
or the chapter shall be interested in. Chapters already
in existence are conducting lectures upon commercial
law and upon otber similar topics; other chapters are
devoting their time to discussion. Essays are presented
and a question box is maintained, and in general those
First,

mean

stitute

topics which are of the utmost interest to bank clerks
and which make them more efficient in their several
positions, are being considered.

Now

with respect to correspondence instruction,
a very important feature of the work: At the
outset we had to determine first what the bank clerks
wanted; second, how we could reach them with the supply. The various correspondence schools of the country
were very carefully investigated, their methods were
inquired into, and more particularly the scope of their
instruction was examined. We found it necessary to

which

strike out. in

some

did not do very

obliged to take up

respects, into entirely untried lines.

we were
which were
and which had

much

experimentation, but

some

of those methods

found advantageous in higher instruction,
been neglected by the correspondence school in so-called
elementary instruction.
The instruction offered by the correspondence department of the Institutiou at the present time is comprised
under some 16 different heads, all of which is carefully
explained in the pamphlet report before you. The instruction ranges from the most elementary kind, such
as penmanship and spelling, on and up to that which is
the most practical—bank book-keeping, practical finance,
political economy and government.
At the outset, as already indicated, we were obliged
to consider the methods of instruction, as well as the
subject matter of instruction, to meet the wants of bank
clerks. In our preliminary circulars we talked about
teaching not literary rhetoric, but business rhetoric.

Our

from various schools
more particularly from the practical

instructors have been gathered

of learning, but

to-day we have a corps that in our estimaadapted to meet almost any reasonable require-

fields, until

tion

ment.
idea of the way in which we are
from that which is done by the ordinary
school— for example, I have already cited rhetoric—an
incident that occurred only a few days ago may be interesting to you. One of our instructors, who comes
from one of the largest schools of the country, prepared
a very careful criticism of the answers of one of the
students who had sent in his examination papers on
rhetoric. The mistakes of the student were pointed out.
and illustrative examples were presented, and in
general he was instructed that all writings must be
punctuated. Now, we have another functionary who is

To give you some

differentiating

a cold-blooded business critic, belonging to the Institute.
Perhaps he could not show his college diploma; perhaps
he would not rank among the great educators of the
day; but we regard him as almost as useful as some
of the teachers. Whatever goes out comes before this
hard-headed man of business. He looked over this and
said: " All documents must be dictated. How about
telegrams? How about cablegrams? They are not dictated.
How about the mortgage of one of the leading Pacific
railroads for a very large number of millions of money,
in which there is not a punctuation mark from begin-

How

about the incorporation papers of u
formed in Massachusetts only a
short time since, in which neither charter nor by-laws
are punctuated V " I merely refer to that to show that
the instruction is fully up to date. That which went
forward to this pupil, accordingly, not only presented
what the literary man was doing in the way of punctuation, but also cited what business men had found it expedient to do. In other words, we are following merchant law, if such a term may be used, in instruction,
rather than literary law.
Now, with reference to what we have accomplished:
In the short time that we have been in operation, less
than G mouths, practically, we have come into correspondence with nearly 10,000 bank clerks. There are
gathered into chapters to-day not quite 2000 members.
There are regularly taking the lesson courses about
000. The little paper that we are publishing, called
ning to

end'.'

certain

organization

the " Bulletin of the

American

Institute of

Bank

Clerks,"

has had a circulation— or, rather, the total number of
copies priuted up to date amount to about 50,000 copies,
and we have over 2000 enrolled paid subscriptions.
Now, with regard to the wants of the Institute for the
immediate future: As you will see by the sentence in
the report of the Secretary in the little pamphlet in your
hands near the end, the clerks have shown themselves
willing to be persuaded to avail themselves of the opportunities which the Institute presents. They have
not flocked spontaneously into the school, nor as subscribers to the paper, nor yet as members of the chapters.
Accordingly, the effort to date has been measured
by the advertising publicity that it has had, and the
hard work that has been personally done among the
clerks themselves.
There is necessary, it seems to me, to make this thing
as useful as it should be, an organizer, who should be
available to go wherever there is a little interest excited, and show the bank clerks of that village or city,
as the case may be, how they may get together, and
upon the basis of our old-time lyceum or debating so-

do themselves some good.
There is the need of a paid corps of lecturers that

ciety,

shall be available to the chapters organized; that shall
go from city to city, either with lantern slide equipment
or other means of illustration, and deliver lectures which
will not only be useful to the bank clerks in chapters
organized, but will also attract popular attention to the

movement.
The little paper which you have in your hand is already representing a large amount of reward in the
shape of interest attracted. You will notice by the correspondent's columns, questions and answers, the character
of questions that are being sent in, and the character
being given. The increased
circulation of that will, in a measure, co-operate in the
other directions. It is easy, however, to edit a paper.
It is comparatively easy to get lessons in shape and conduct a correspondence scheme of instruction, but, on the
other hand, that which is of the greatest help to the
bank clerk, that which brings him into contact with
his fellows, that which instructs him and gives him
practice in getting upon his feet, and expressing his
ideas, learning his deficiencies and finding out what
he ought to do, comes only from organization, and that,
it occurs to me, is the greatest and most important work
before us the scheme of organization, the plan of organization, the work of regular organizers— and following
of the information that

—

that, the

work

of entertainers or instructors,

appear before these chapters.
Mr. Lowry:

what

would

thank you.

like to offer

who

shall

(Applause.)

a resolution some-

similar to the one offered a year ago in

Richmond.

Whereas, At the last convention of the American Bankers'
Association it was
" Resolved, That the Executive Council should authorize
the Committee on Education to organize an Institute of Bank
Clerks for the bank clerks of the United States, appropriating
such an amount as will be necessary to inaugurate and operate
sunn an institution for the first year, not exceeding $10,000."

BANK

NVENTION.

Report of Committee on Express Company Taxa-

» ktrxas. The t'otumltte*
:»n has organ iio«l such
an Institute and has operated the same to an extent t" dSmoaIts poaslhi:
falntM and In a way to
warrant Its continuation now N

tion
To the Anuricun

Hanke

uition:

remarke of

four Committee le unable to reporl any substantial
progress during the pasl year, as the result of its efforts
ompel the express companies and their numerous
license ta\ for the privilege of conductagencies to pay
ing a banking and brokerage business. The great injury which these companies are causing to the banks
throughout the country and the greal injustice which is
involved In allowing them to transact a banking husiwithout paying the tax imposed upon bankers and
brokers, were commented upon in our last report, and
were fully shown at the time this Committee was appointed two \ cars SgO.
The principal obstacle In the way of your Commltb
during the past year lias been the opinion of the Attorney General, holding thai the express companies are not
transacting either a banking or a brokerage business
within the meaning Of the war revenue law. That opinion has been universally condemned by bankers as Inconsequential and evasive. There is, however, unfortunately
no appeal from it, and the Commissioner of Internal
Revenue must, of course, be governed by it In his in-

estimation the resolution which
the Bdncatlona l Oommlttee

structions to the collect..!ihat be dues not regard it
as necessarily final, however, is evident from a letter

tulou that th.the »«
appropriate to the use of the Couiualt*uch an amount as may be necessary for
01 ClSffcS for
tlnulng the work of the American lustltut
the ensuing year, not exceeding the sum of $10,0

M—hrt*. That

:ld

idoptton of this resolution.

before tbi Bs
appropriate money, end

uncd, as n pn
II

to the council tot action, If nee-

rdec that

eeeat

Mr. Hill:

wish

may come

that motion.

Mr. Lowry: Thai

property before the

the conree that

took laal year,

and] took Immediate anion.
N

Mr. Betw]

tleman

who

fork:

that the per-

be granted to the
solution, and that the

memberi

the

has

lotloD be referred to the committee, and, In doing
wbjb to aaj that after reading the report of the BSdu-

and after

Duntttee,

Mr.

the

our

day
irk,

end

think

•

feel

bank
but throughout

muel say that 1 rej
was formed the title

oJaatJou

Bank

thatltutloii

greatly.

New

city

<|,

Qly in the

t).'

the

iranl of the education of the

ben

As the

this partlcnlar time.

chapter!

the

Clerks,

omitted the words " bank clerks,"
membership would bave been Increased
d 1 think that the approprta-

com-

the sdoptlon of the report of the

bat will be benefi ci a l, uot

mittee as subs

darks, but to the officers of banking instithe sdoptlon of the report

tuti.

and

itlon

itlve

thi

understand the constitution under thai

Messrs. Knauth, Nacbod A Kuhne, bankers, of New
York, who had written to him in the previous June to
Inquire whether their agents, Who sold their checks "U
foreign banks, were Bubjed to the payment of the broker-' tax.
In their letter of inquiry the bankers expressly
referred to the opinion of the Attorney-General, which
held that the agents of express companies who sold such
checks were not subject to the tax. The Commissioner,
to advise them thai their agents were
not liable, and plainly showed thai his department did
not consider the opinion of the Attorney-General

however, declined

be wrote as follows:
"Although there may be some warrant for it (namely,
the claim that the agents Were exempl from taxation) In
final, for

the published opinion of the Attorney-General, to which
refer, yet as there bas been no Judicial derision that

you

par
glad to
beilere that no work thai bai
b<ing done, is

the business of selling travelers' cheeks is not the Imsi
ness of selling 'exchange,' for which the special tax of
a broker is required to be paid under the second para

more fruitful of gi>od rethan the work now being done by this Committee
•Hint
-tabit showed

graph of section 2 of the aet of June 13, 1808, this office
would not advise you to give assurance to your correspondents, by circular, as you contemplate, of theii
niunity from speda] tax. in the event of their engaging
in such sales, unless you an- disposed to rely entirely
upon the Attorney <;, n. -nil's opinion, taking the risk of
a contrary decision by the courts, In the event of a
coming np hereafter for Judicial determination on this
point"
Moreover, prior to the opinion of the Attorney-General, ami in November, 1800, the Commissioner of Interna] Revenue had written, as appears In our previous
"ii. that "on the facts stated by
report to tl
yon in your former letters to this office there appeal
in- do reasonable ground for doubting thai the American
ompany has been engaged In the busluei
Ex]
change, and thai it is acbuying and selling for
pedal tal as a broker for
cordingly required to pay
very distinct and separate place of bus
at which such purchases and -ah-s bave been made."
And yet the Attorney General, in his opinion subsequent
ly written, found in favor of the express COmpanli

of Chicago:

Mr. John

by
;

th.

shall be rerj

tor n-

r in Chi
be public press of
Chicago, the bankers of Chicago generally, and the bank
1

written by him on October 10, 1900, shortly after the
meeting Of this Association, in reply to a letter of

last

work, and

that

commit
and

the

Ass

of the

motion,

mo*.

-.•:.

tin

and

the
that the

com-

mittee bo cout inn'

question

eal

thai

will

eport of

and
matter

come before
commj
thanks. The

tin'

Ith

of
will

take

Bxe< utlve

within

inin

are

toon a-

pr-

them, and as
.mil will bo

Mr.

Committee on

W.
I

his

report,

on
.,{

oar

we
i

Mr.

At tbo

sni.;

'hin

year we

will

lengthy
submit a
en In

wish b
connection wit:

whirl

ir,

fully

every point
ro

BBnta butt.

should long since have bad a suit instituted tothe question, bUl unfortunately, in a CSSS Of this
suit without
kind, it is Impossible to commence such
•

the concurrence

<'f

the

offi cers

of the

Government.

The

States Bevlsed Statute- permit an action to be
brought by the Governmenl to recover taxes, with the
ted

HANKING SECTION.
sanction of the Commissioner 01 Internal Revenue; but
one citizen, who has paid a tax. has do power to com-

mence a suit against another citizen to compel hiin to
pay a similar tax laid upou all citizens. As the Government acts in these eases :u the instance of the Attorney-General, and as the Attorney-General has rendered
an opinion against the liability of the express companies,
manifestly he is not likely to advise such a suit, except
for the purpose of settling an important public question.
It is because your Committee believes that this is an
important public question that it now asks the assistance of the Association and its members individually
in an effort to obtain a judicial decision.
Another method of testing the question would be to
have some one engaged in the money order or exchange
business pay the tax<under protest, upon the demand of
a collector, and then to bring an action against the collector to recover the amount paid, on the ground that
the tax was not payable. But such a suit cannot be
maintained unless an appeal shall first have been made
to the Commissioner of Internal Revenue to have the
tax refunded, and unless the Commissioner has refused
to order the repayment. Even, therefore, if a collector
could be found who would demand the payment of the
tax from a person engaged in the money order or exchange business (which is not probable under existing
circumstances), the Commissioner of Internal Revenue
would, if appealed to, undoubtedly direct the tax to be
refunded and thus make the commencement of the suit
impossible.

ONE OF THE DIFFICULTIES.

Owing

in the anomalous position of having a most serious grievance and of being excluded from the courts.
They
have what they firmly believe to be a legal rigid, but the
law does not provide them with a remedy. What they
now ask is that a test suit be arranged, so that the
proper remedy may be available. If they are wrong in
their view of the law the express companies will not
have to pay the tax; if they are rlghl the express companies should be compelled to bear an equal burden with

the banks in this class of business.

And

the courts

should hold tnat the express companies were not subject
to the tax under the existing law it will then be in older for this Association to promote such legislation as
will compel all persons and corporations who are en
gaged in what is clearly a banking business to pay the
tax imposed upon bankers, even though they may at
the same time be ostensibly carrying on some other
business.
All of

which

respectfully submitted,

W. Hayes, Chairman.
Percival Kuiine,

Chas. R. Hannan,
Committee.

Milwaukee, October
Mr. L. P. Hillyer:

15, 1901.

wish

to offer the following reso-

lution:
Resolved, That the report of the committee whose report has
committee
just been read be received and approved, and that the
take such steps
be continued for another year with full power to
express
and adopt such measures for testing the taxability of
companies under the war revenue law as may seem to them
advisable.

the difficulty of having the questiou decided in the courts without the concurrence of the Law
to

and Treasury Departments of the Government, your
Committee went to Washington in May last and called
upon the Secretary of the Treasury and laid the matter
before him. He suggested that an application should
be made to the Attorney-General for a re-hearing. But
inasmuch as the opinion was written by the former Attorney-General, and as the present Attorney-General
would, almost as a matter of course, adopt any opinion
given by his predecessor, your Committee has not
deemed it advisable to adopt this course, so long as there
was any possibility of having the question decided by
the courts. Your Committee, therefore, suggests that,
as the matter is one of such vital importance to the
legitimate bankers throughout the country, the Committee be continued for another year, and that proper reso-

urging upon the attention of the
Government the necessity of arranging for a suit to be
brought which may, if necessary, be carried up to the
Supreme Court of the United States. This could be
done without any expense or inconvenience to the Government, as the counsel for the Committee could take
special charge of the case in support of the contention
that the tax is payable by the express companies and
those engaged in the business of selling exchange.
lutions be adopted,

be
Resolved, That the executive officers of the Government
committee in having
respectfully requested to co-operate with the
companies judicially
the question of the taxability of express
lower court
determined by the court, and if the decision of the
to have the
should be against the contention of the Government,
United States.
case carried up to the Supreme Court of the

resoluMr. Orde, of Chicago: In connection with the
Educational
the
continuing
Farson
Mr.
by
offered
tion
have
Committee in force, I move that that committee
or
power to fill vacancies in its number. There are one

two vacancies now existing.
must be
President: The resolution of Mr. Hillyer
Council.
the
to
referred
be
to
voted upon here
Motion made

the development of the country, and such vast interests
are so closely dependent for success upon their continued
prosperity, that it is surely only simple justice to place
them on an equality with their competitors, the powerful express companies. The members of this Associa-

to refer resolution to

Executive Coun-

cil.

the moMr. Kauffman, of Tacoma: 1 wish to second
and the Pation in behalf of the State of Washington
There is probably no seccific Coast, for two reasons.

United States that has felt the burden in the
and bank excontest between the express money order
years
change more than the Pacific Coast. For many
practicable transmission of funds from one
tion of the

only
was by
small section to another of the Pacific Coast
with the inthe express money order. In later years,
is abunstitution of banks in almost every town, there
pordant means now of transmitting funds from any one
burden
the country to another. We have felt the
the

tion of

in this

EXCLUDED FROM COURTS.

The banks have been such an important element

unfair competition most particularly

the last

taxafew years since the passage of the war revenue
Coast.
Pacific
the
on
ways
two
in
tion act, which works
As all members of the American Bankers' Association

probably

are conducted in

specie.

for the transmis-

know the transactions there
The necessity then comes in

by express of specie into the large cities, where the
handled; for
express money orders are compelled to be

sion

law is so
framed that it imposes the tax on the express companies
which are engaged in the business of selling exchange.
They may be mistaken in that belief; but in the interests of justice they should surely be given an opportunity to have the question passed upon by the courts,
and not be thrust aside by an opinion which has failed
to convince a single banker who has read it.
It is a fundamental principle of our institutions that

any one of the
almost impossible, if they are
them cashed.
presented, to get the express agent to have
holder of
In point of fact, the express agent will tell the
handle
can
bank
"
your
bank,
your
Take it to
the order.

every citizen who has a legal grievance can obtain redress in the courts; that where there is a right the law
provides a remedy. But the bankers of the country are

cago,

tion believe in our opinion that the present

this reason orders are issued payable in

smaller towns, where

exchange payable in New York or other large cenbank, the loter," and the merchant puts it in his local
correspondent, and
cal bank, in turn, sends it to the city
and Chithe city correspondent sends it to New York
this

and so the bank pays the express company .$1.75
shipping
in order to have the privilege of

a thousand,

them the

coin to ensh their

own

orders.

Now

the ex-

BANKERS' CONVENTION.

company In that way makes out of it at both
ends. The company gets pay when tlu> express order Is
thousand wheu the bank ships
issued, aud get- v 1.71
press

feel as though the
the coin to cash these orders.
who has given an
states,
attorney-General of the United
iu

opinion that the express

why

company order

a piece of paper that

payable

another

not a

bill of

we cannot understand
drawn lu one town and

be mistaken, and

may

exchange,

not the

same

as the draft that

iu New York, and why, If
pay $2 OB a thousand on our capital for the
privilege of leaning that exchange, express companies
ihonld not either do the same, or pay a fee of $50 wherever an agent Is located. Therefore we feel that the
opinion of one man. even as eminent as the AttorneyGeneral of the United States is, may not be right, for
equally eminent attorneys have given, as I understand
from the report of the committee, opinions directly the
reverse. Who shall decide then when these eminent

drawn

we have

Tacoma and payable

doctors disagree? Certainly the courts of the country,
and we are entitled to have the case referred to the
courts and get the final determination.

The second reason

for seconding this motion

After the Convention

Richmond

is:

last year,

which

me the honor of electing me Vice-President as representing the State of Washington, I returned to Washington and endeavored to Increase the membership in
Washington as much as possible, and issued many circulars and letters, and we did succeed in getting in
about twenty additional members, and to-day about 62
per cent, of the bankers of Washington are members of
the American Bankers' Association.
(Applause.)
The
most Important thing that met me when I met the bankera of the State, asking them to join the Association,
was, what is the practical work of the American Bankers' Association, is it not a big junketing time, do you
uot go to these various assemblies to have a good
time, and is there any practical work or results?
I
did

pointed with pride to the work of the protective department, the work of the Committees on Taxation and Education, and particularly to the fact that a committee
had been appointed and was working on this question of
express money orders, a question that we felt was so
important in our State. Now I want to go back to that
State and

show

that there has been effective work, that

Convention and Association will uphold the hands
of Its committee and carry the work toa final conclusion.
If the question Is important enough to give to a committee, it is Important enough to carry it through, so
that we will not be like the fabled King of France, who,
with 80.000 men. marched up a hill and then marched
this

down

again.

Mr. Hardy:

feel that the members here should be
Informed on this subject in all of its bearings, and
in order that you may do that I feel it my duty to place
before you information as to what has occurred in the
I

fully

work of this committee. I understand
some of the bankers feel very keenly the

ouneil as to the

perfectly that

competition of the express companies in this matter of
money order business, and that, of course, is a practical

hanking question, and

Association could serve
doing away with that competition, the Association would by every means in its
power seek to do that
The work of this committee, however,* its entire efforts to prevent this competition, has been based upon
he Idea that the Government should enforce against the
express companies a taxation under the revenue bill that
would be prohibitive, so far as this business is concerned, by levying a tax of $50 on every express comoffice In leaning these orders.
Well, now, is that a
practical method of preventing this competition? Our
revenues are at present largely in excess of our expendi•*, In the Government and if the war revenue bill
if

this

their interests successfully In

repealed

mittee

Its

entirety

itely

the

ammunition of

exhausted along

the,

line

comon which
this

has been working, and it is a well-known fact that the
express companies all maintain more or less of a lobby
at Washington, and that they are interested in legislation there and are looking after their interests. If we
secured the enforcement of this tax against them their
first efforts would be directed toward a modification or
repeal of the clause of the revenue bill under which the
it

levied, and as soon as that was done the comwould be renewed just along the line on which
It now exists, so that to my mind the committee is compelled to look to some more efficacious way of fighting
that competition than by simply urging the levying of
this tax upon the express companies, and must devise
some business method of practical competition, by which
the inducement for the transaction of the business
through the banks will be greater than the inducements
offered by the express companies. This matter has been
thoroughly discussed in the council. At the meeting in
April, at which these companies made a report, there
was a recommendation from the committee that they be
authorized to eugage in this litigation, practically that
this Association furnish counsel for the Government to
fight this case. Well that is a pretty large sized proposition.
It might run up to $5,000, $10,000, $20,000 and $25,000 before you got through with it; and the council did

was

tax

petition

not feel that

was

justified in

launching this Associa-

any such litigation, and they therefore authorized the committee to continue its efforts to induce
tion

into

the Attorney-General to bring such a suit in the name
of the Government, if he saw fit to do it, but the com-

mittee absolutely declined, as

say, to launch the Asso-

and undertake

ciation into such litigation,

to furnish counsel for the

this Association
to tight the case.

Now,

it is

in behalf of

Government

a practical question, and

simply a question as to whether the attempt to enforce this taxation against the express companies will
have any permanent effect, so far as this competition is
concerned. My own personal belief is that it will not,
even if we succeed. The probabilities are that the internal revenue bill will either be amended or repealed
absolutely, long before we would get any decision on a
case brought to test this question, and I think the Association should think well before adopting any such
is

course.

President: In order to get this resolution of Mr. Hillyer before the Executive Council, it must be ordered by
two-thirds vote.

Walker

The resolution as
take the matter entirely
out of the hands of the Executive Council. It gives the
Express Committee power to enter suit whether the Attorney-General joins with them or not, and take it, if
necessary, to the Supreme Court of the United States. I
come from a section of the country that once fought the
Government, and we are sorry. (Applause.) I would
move as a substitute to Mr. Hillyer's motion that the
whole matter be referred to the Executive Council for
Mr.

of St. Louis:

Hill,

drawn by Mr. Hillyer seems

their action.

(.Many voices " seconded.")
Mr. Hillyer: I will second that motion myself.
President: It is now on tho joint motion of Mr. Hill
and Mr. Hillyer to refer this whole matter to the Executive Council.

Motion unanimously carried and so referred.
President: Mr. Tracy, Chairman of the Committee on

Uniform Laws,

will

make

very sorry that

his report.

'Applause.

Mr. Tracy:

was not here

this

morning when I was called. I have been traveling all
night and just got here. I always try to be prompt, but
sometimes the railroad trains do not get us where we
want to go nt the riu ht time; but as I said, I have been
traveling all night, and I have been very tired, and my
voice is very weak, and I will therefore ask Col. Branch
r

read

report,

will.

The Secretary then read the report

of Mr. Tracy:

BANKING SECTION.
Before dismissing Idaho,

Report of the Committee on Uniform LawsOctober

10, 1901.

Mr. President and Members of the American Bankers' AssoIn our report of last year at Richmond we save the
names of the different States which had passed the Negotiable Instrument Law, with tho amendments thereto,
it

became

Connecticut
Colorado

effective.

repeat them:

1807
July 15, 1897 (Notes falling due Saturday
are payable the same day,
except those failing due
In Denver on any Saturday during June, July
and August, N when they
are payable the following
Monday.)
August 3, 1897
October 1, 1897
January 1, 1898 (Sight drafts are allowed
Vril

Florida

New York
Massachusetts

,">.

three days' grace.)

Maryland

June

Virginia

July

March

North Carolina

1898
1898
1898 (Three days' grace on notes,
acceptances
and
sight
drafts.)

District of Columbia.. April 3,

1S99
May 15. 1899
May 12, 1899
May 19, 1899
June 7, 1899
July 1,1899
July 1, 1899 (Three days' grace on sight

Wisconsin
Tennessee
Oregon

Washington
Utah
Rhode Island

drafts.)

North Dakota

July

1899

was considered in many Legislatures the past
was successful in only one State— Pennsylvania, where it became effective July 1, 1901.
In Ohio it was thoroughly discussed, and we think is
now in a position to become a law at the next session
The

bill

winter, but

of the Legislature.

would recommend

tion the plan

pursued

to the State Bankers' Associa-

lows:
" I am informed that this bill is drawn by
the American
Bankers" Association and has been offered to the Legislatures of
all the States for adoption.
This is not legislation, but rather
the enactment into law of studied forms of particular and spe-

advantage to one interest at the expense of the business of

the public."

Such knowledge in a Governor's office about a law
which has been in successful operation in England and
her colonies for twenty-one years is lamentable, if not
criminal.

The American Bankers' Association had no part
forming this law.

Its only function

has been to assist
the American Bar Association in its pasage through the
several Legislatures. Both the bar and the bankers who
are engaged in

commerce recognize that the

of the several States

are so

much

at variance with each

other that uniformity becomes a necessity.
port of 1899

decisions

In our

re-

we gave

an illustration which we repeat,
hoping it will come to the notice of our learned friend,
the Governor of Idaho.
" A banker was desirous of knowing how
to treat a certain
kind of paper in his daily business, and applied to his attorney
for advice.
The attorney advised him that the decisions of the
Supreme Courts of thirteen States were so and so. The banker
said: "Well, that settles it, I will handle the paper in that
way." The attorney said, " No, for the Supreme Court of twelve
States and the Supreme Court of the United States have decided
just the opposite."

its

to congratulate the
quick acquiescence to

demands

of the business public for a law which will
business methods, especially in dealing with

promissory notes and like commercial paper.
Wo have been trying to educate the people in the different States in regard to tho law because we realize it
The
only needs to be understood to meet with favor.
great lawyers of the country are doing good work for it,
but we find latterly that the lawyers from the smaller
towns are opposing it, and we meet their opposition in
the Legislatures very strongly, as many of them become

members. As a member of the Illinois Legislature said
chairman of this committee: " The bill is a good
one. I have studied it and find it a perfect code reconciling the decisions of the various courts, so that any one
who reads it can be his own lawyer. Although I favor
the bill I cannot vote for it, as it would probably take
away my bread and butter."
to the

believe this sentiment in Legislatures

its

purpose

a Legislature for

one of the best laws ever presented to
enactment.

al-

such sum as they may deem proper to continue this
work. One of the means of education would be the cir-

among

culation

the business

men

of a pamphlet pub-

lished by Hon. Lyman D. Brewster, President of the
National Conference of Commissions of Uniform Laws,
in defense of the Negotiable Instrument Law. We had
intended to give some extracts from this in our report,
but we find it so good that we believe the better plan is
to publish it as a whole. There are very few States
holding sessions of Legislature this winter. We would
suggest that the members from such States pull off
their coats, roll up their sleeves, and try it again. SucFrank W. Tracy,
cess Is sure to come,

Chairman Committee on Uniform Laws.
President:

The report reminds me

of a little experi-

ence I had, which, if you permit me, I will give you.
Last winter I was invited to meet the association of
bankers in the State of Maine, and the Legislature was
in session. The bankers had their meeting on purpose
to advocate the passage of this law through the Legislature. I, with others, appeared before the committee
to urge the passage of this law. Our appeal came to
nothing because of this argument on the part of a member of the committee, who was a lawyer, and he held up
the pamphlet and said: " Mr. Chairman, here are 26
pages of new law, and every time I am consulted by
my banker clients I have got to study that whole 26
pages, and I object." It was not passed by the Stale
Legislature of Maine.
This report, calling for an appropriation of money,
will be referred to the council, if you so order it.
Motion made that it be so referred.
Seconded, unanimously carried and so ordered.

AMENDMENT TO CONSTITUTION.
Mr.

EL Willock:

up at this time
proposed some time
since by my colleague, Mr. Shumaker, of Pennsylvania.
The Executive Council presented it without
recommendation, and I would like to have the Secretary
read it, so that every one will understand it, and then
I desire to make a motion.
the

amendment

desire to call

to the constitution

New York, August 28, 1901.
Caldwell Hardy, Esq., Chairman, Norfolk, Va.
Dear Sir. Inclosed please find amendments to the constitution, proposed by Messrs. Jas. H. Willock, President Second
National Bank, Pittsburg, and S. R. Shumaker, Cashier First
National Bank, Huntingdon, Pa., respectively
" Article 7, Section 1.
Beginning with line four,
that the
word " fifteen " be substituted for the word " thirty."
Resolutions
or subjects for discussion (excepting those referring to points
of order or matters of courtesy) must be submitted to the Executive Council at least fifteen (instead of thirty) days before
"
the annual Convention of the Association.'
follows
Article IX, Section 1, to read as

—

This law has been discussed before the Bar and the
Bankers' associations and in the newspapers all the
time since 1895, and the consensus of opinion is that for

now

most prevalent, and the only way to overcome it is to
educate the people. We have not done this on a large
scale, as we have not had the funds. We would recommend the appropriation by the Executive Council of

The State Associathe hands of an attorney, and

by the Governor. The veto message showed such a thorough ignorance of the law that we quote it in full, as fol-

cial

the

in this State.

tion of Ohio placed it in
paid him a certain sum for his attention to It before the
Legislature until it became a law.
In Idaho it was passed by the Legislature and vetoed

we wish

Legislature of that State for
simplify

ciation:

and the date

BANKERS' CONVENTION.

This Constitution may be amended at any annual meeting
by a vote of two-thirds of the members present, notice of the
proposed amendment having been submitted to the Secretary
at least thirty days before the annual meeting, and the Secretary shall forward to every member of the Association a copy
of such proposed amendment, and shall submit it to the Executive Council, that they may arrange to bring it before the Convention under the regular order of business."
Very respectfully,

President:

•'

.Us. K.

BBANCHj Secretary.

Mr. Willock: I ain not giving away any of the secrets
of the Executive Council when I say that the reason
ii was laid before you without a recommendation was

because the council hesitated to incur the expense; but
they were quite willing to let the Convention decide
that for themselves.
Now, it seems to me that this
amendment is a very proper one. At the time Mr. Shumaker proposed it, it met with the unanimous indorsement of the people who were with him at that time, and
he is not here to-day, and I feel like speaking for him;
and I do not see why it should not be adopted, because
the members who do not have the opportunity to come
to these conventions are certainly entitled to as much
consideration as those who do; and, therefore, when so
important a matter as the amendment to the constitution is proposed, why should not the members in Washington, California, Florida, Maine and every other place
have the same notice? Now, the only reason that was
given or advanced from any quarter in opposition to
this was that it would entail a certain amount of labor
and postage.
Well, this Association is not short of
money, we are not short of clerks, and I do not quite
understand what the labor would be beyond the printing
and putting stamps on the envelopes, and when you
come to look at it, the labor will not be much, for the
reason that the Secretary has to send to every member
of this Association within 30 days, or about 30 days
previous to each Convention, his formal notices, and
why shouldn't he just include that with the other? Let
the printer print the proposed amendment on the regular
notices; and it has seemed to me that this amendment
is perfectly proper as it is, but a gentleman near me has
suggested that we might further explain it so that it
should read, " and the Secretary shall forward to every
member of the Association a copy of such proposed
amendment at the same time the other notices are sent
out," and in order to get this before the Convention in
proper shape, I move that we adopt this amendment.
Motion seconded.
Mr. Willock: This includes, of course, the suggestion
that has been made, that it be mailed at the same time
with the other notices, and that obviates any additional
«

xpense.

Repeal of

The motion

that the council be requested

this request of Congress.

Mr. Willock: The constitution provides that all resoimmediate
report, without debate.
lutions shall be submitted to the council for

President:

Then

it is

the customary reference to the

council.

Mr. Willock: Yes.
Motion seconded.
Mr. Sullivan: I am heartily in favor of the resolution,
and my object in rising was to ascertain whether or not
we should expect the Executive Council' to report this
resolution back to the Convention during this Convention.

President:

That

the understanding.

Motion unanimously carried and so ordered.
Colonel Powers, of Kentucky: I desire to offer

War Taxes.

I beg leave to offer this resolution, and
reference to the Executive Council, under the
constitution:

its

ReHolied, That we, the A. B. A. In convention assembled, do
hereby respectfully request Congress to repeal Paragraph 1, Sec.
2, of the War Kevenue Act of 1898, thereby removing the special
tar on capital and surplus of banks, also the tax of 5 cents for
$ 100 on bonds, certificates of indebtedness, etc.. also the tax
on original certificates of stock of 3 cents for $100, also the
tax of 2 cents for each $100 on transfers of certificates of stock,
also the tax of 2 cents per $100 on time drafts and bills of exchange.
It' k, h: til, That the Executive Committee of this Association
present this resolution to the proper committee of the next Congress, as we consider that the necessity of the above taxes no
longer exists.

You have be&rd the resolution of Mr.
hat this matter be referred to the Executive
for action— this requests Congress to repeal
practically the whole of the war revenue tax.
President:
I

Mr. .Sullivan, of Cleveland:

would

like for

informa

to inquire as to whether it is the wish of Mr. Willock
that the council report this resolution back to the Convention, or that they be instructed to act independently

of the Convention.

resolution here.

Colonel Powers: I move that these resolutions be referred to the Executive Council and take the regular
order.

Seconded.

EXTENDING CHARTERS OF NATIONAL BANKS.
was my intention to submit a resoluwish to say that within the next two years
the charters of more than 1700 national banks of the
United States will expire. Ex-Comptroller Dawes, in
one of his recent reports, recommended that Congress
Mr. Dimse: It

tion,

and

take some action at
these national banks

its last session,

so that the life of

would be continued.

Nothing was

lone. Congress will convene within a short time, and
it seems to me that the time is opportune for the delegates of this Convention to have some resolution on
record to the effect that the Representatives in Congress
of the various States should see to it that some legislation is passed in order that the life of the various nai

tional

banks

shall be continued.

that, whereas the charters of more
expire within the next two
banks
than 1700 national
I

therefore

move

years,
Resolved, That we, the delegates of the American- Bankers'
Association, assembled, recommend that Congress take such action whereby the charters of various national banks which will
expire be continued, as was done in 1882.

Motion seconded.
President: This vote will put

before the Executive

Committee.

Unanimously carried and so ordered.

BUREAU OF EDUCATION EMPOWERED TO FILL
VACANCIES.
I

move

that the Edu-

Committee have power to
Motion seconded.
Mr. Lowry: The report of the committee was received, and also the recommendation of Mr. Farson was
adopted, covering those points. Now, is it understood
that this committee is continued and that we have
authority to fill vacancies? I understood that that was

cational

Mr. Willock:

Willock
Council

make

Mr. George F. Orde, of Chicago:

Unanimously carried and adopted.

move

fill

vacancies.

passed.

think that that is included in the vote
and taken at the time of the reception of the report of
the committee.
Mr. Lowry: I would be very glad to have the resoluPresident:

tion placed in writing.

LOSS OF UNSIGNED BANK CURRENCY— REDEMPTION OF CHECK AND DRAFT STAMPS.

A document

and resolution by Mr. Clark, of Minne-

was then read.
They are as follows:

sota,

The National Rank of Montana, of Helena, Mont., having
made the requisite deposit of bonds, requested the Issue to It of
$40,000.00 of bank notes In pursuance of the National Banking
These notes were in due course printed, and by tne Comptroller delivered to the United States Express Company at WashThe notes consisted of 800
ington for shipment to Helena.
sheets of 10's and 20's from Nos. 1,201 to 2,000 Inclusive. On
July 1, 1»01, the package containing these notes was delivered
by the United States Kxpross Company to the Great Northern
Act.

—

BANKING SECTION.
and unnecessary

Express Company at St. Paul, Minn., for further transport, the
line of the United States Express Company, so far as Montana points are concerned, ending at that city. The rate charged
from St. Paul to Helena was the full bankers' rate— viz., $1.00
On July 3, 1901, at a point near the town of
per $1,000.00.
Malta in Montana, the train of the Great Northern Railway
Company was held up by three armed men, the express car entered by them, the safe therein burst open by dynamite, and
the notes in question, together with $50.00 redemption currency
In shipment to the American National Bank of Helena, Mont.,
stolen and taken away. Thereupon the National Bank of Montana demanded of the Groat Northern Express Company that
This at first was promised but
the loss should be made good.
afterward refused, the express company's position being stated

fore be

Resolved, That Congress

RESPONSIBILITY OF COMPANY.

" XI. That any loss or destruction, total or partial, of the
moneys or securities while in the course of transportation, occasioned by fire or water, or by the acts of the public
enemy, or persons in arms, or by any riotous assemblage, shall
be borne by the United States, excepting National bank currency
incomplete in transitu to a bank, when such loss or damage shall
be borne hy the bank and not by the United States Express Company or its constituents, unless such loss shall be occasioned by
the misconduct or neglect of the company, its officers or servants.
" In case of the loss or destruction of any moneys or securities while being transported under this contract, except as hereinbefore in this section otherwise provided for, said United
States Express Company shall be liable as common carriers to
the United States for the face valuation thereof. Provided, that
the said company shall, upon discharging such liability, be
treated as the owners of such moneys and securities, and entitled to the rights and remedies appertaining to other owners
of lost or destroyed moneys or securities.
And further provided,
that if any portion of the incomplete National bank currency
notes which may be lost and paid for by the said United States
Express Company shall be thereafter recovered, the said company shall, upon presentation thereof, be entitled to receive from
the United States the amount of such notes so recovered and
presented at their face valuation."
Demand for reimbursement was then made upon the United
States Express Company, which, however, declined responsibility
both by reason of the contract in question and by reason of the
delivery of the notes by it to the Great Northern Express Company, on whose lines the loss had occurred. The matter stands,

specified

therefore, as follows

The Department disavows

all responsibility because of
The terms of the Act of Congress of July 28, 1892, which makes
the provisions of the Revised Statutes providing for the redemption of National br.nk notes applicable to all bank notes that
may be issued, notwithstanding such notes may have been lost
or stolen and put in circulation without the signature or upon
the forged signature of the president, and cashier of the bank.
Second. The UDited States Express Company refuses payment on the ground stated i. e., its contract with the Government and the delivery by it to the Great Northern Express Company.
Third. The Great Northern Express Company declines to re-

First.

imburse the bank on the ground that the unsigned currency
" worthless paper."

Whereas, The banks of this Association have expended a
large sum in the preparation, lithographing and printing of imprinted checks and drafts, to conform to the War Tax Act of

June 14, 1898 and
Whereas, There remained on hand large quantities of such
Imprint checks and drafts at the date of the passage of the act
of March 2, 1901, under which act the Internal Revenue Commissioner was authorized to redeem the check and draft stamps,
free or imprinted, but no provision in said act being made for
the return for future use of such imprinted checks and drafts
after canceling the stamps thereon, and the same being valueless to the Government, their destruction would entail a heavy
;

be.

and

hereby, memorialized

an act or to so amend the act of March 2, 1901, as to
authorize the Commissioner of Internal Revenue to so cancel
the
the stamps on imprint checks and drafts as not to destroy
future use of said checks and drafts, and after the Commissioner shall have redeemed and made refund to the owners
imprinted he
for the amounts due by reason of the stamps so
owners.
their
drafts
to
and
checks
shall restore such
And to authorize and direct the Commissioner to redeem
to pass

as follows
" In the opinion of counsel of this company the unsigned
currency stolen while in transit is worthless paper and is not redeemable. The express company is not liable to you, but your
claim is against the Government." The matter was laid before
the Comptroller of the Currency, who in a letter to the bank
of July 11, 1901, stated: "This currency stands upon the records of this office against your bank as outstanding circulation,
and it or its equivalent in lawful money of the United States
must be returned to this office before your bonds could be reIn said letter it was also stated that under
leased as security."
contract with the department the United States Express Company was under bond to reimburse the bunk to the amount cf
the loss, and that its agent had been requested to make such reimbursement. Owing to the unsatisfactory condition of affairs
an. agent of the bank proceeded to Washington and was informed by the department that the Government declined all responsibility to the bank and that it must look to the express
companies for relief. A copy of the contract was also furnished,
which, so far as the matter in hand is concerned, contains the
following clause
"

upon the banks and owners thereof. There-

loss

such stamps without reference to the date of their purchase.
Whereas, Unsigned National bank currency shipped by the
risk,
Treasury Department to any National bank is at owner's
the
and
itself
between
Government
the
made
by
under contract
various express companies,
Be it Resolved, That this Convention requests the Treasury
Department to change the contract now existing between itself
of
and the express companies in such a manner that the owners
in
indemnified
fully
be
shall
currency
National
any unsigned

case of loss or theft in transit.
Be it further Resolved, That this resolution be brought to
the Presithe knowledge of the Treasury Department through
dent and Secretary of this Association.

cil

President: This will have to be referred to the counif you so order it.
Motion made and seconded that this be referred to

the Executive Council for proper action.

Motion unanimously carried.

THE ASSASSINATION OF PRESIDENT McKINLEY.
Mr. Willock:

offer the following pre-

beg leave to

amble and resolution:
Whereas, The assassination of President McKinley has again
emphasis the
brought to the American people with appalling
murderers of our
necessity of law to adequately punish the
and
Presidents and others in high official position
our country
in
foothold
gained
a
has
Anarchism
Whereas,
have orthrough the immigration of teachers and leaders who
if possible,
and,
rulers,
our
of
death
the
ganized to encourage
antagonistic
the destruction of our Government and so utterly
that their
institutions
American
are these to the very genius of
their associations
and
punishment
just
with
meet
should
authors
;

;

be banished from our borders therefore
that there
Resolved, By the American Bankers' Association,
of laws for punexists an imperative necessity for the enacting
anarchy in our land
ishing assassins and for the suppression of
;

by providing

punishment for those convicted of murder, or

First. Capital

attempted murder, of officers in high public positions.
or banishSecond. Adequate punishment, by imprisonment
authority.
in
those
to
violence
ment, of all persons counseling
Laws to prevent anarchists from entering into this
Third.
countryT
LegislaFourth. That we urge upon Congress and the State
of
charge
the
tures action that shall keep our land free from
lands.
foreign
of
rulers
the
fostering conspiracies against
presented
Resolved further, That copies of this resolution be
at their
Congress
of
by our Executive Council to both houses
•

next session.

Mr. Willock:

move

the reference of this preamble

and resolution to the Executive Committee.
Motion seconded and unanimously earned.
a
President: It is my opinion that this ought to be
if
popular movement and that it is not necessary for
it that it
to have such official sanction. I should take
opinion
an
passing
me
ought to have, if you will excuse
approval,
and
upon a resolution, the unanimous adoption
I
not only of this Convention, but of every citizen, and
out of its
shall, unless you order it different, take it
it as a
adopt
will
you
if
regular course, and ask you
popular resolution.
Mr. Hardy: That is a violation of the constitution.
Everybody is in favor of the adoption of that resoluwould be a bad
tion, and it should be adopted, but it
and I
committee,
the
precedent to take it away from
protest against that action.
President: Then I shall observe the law, seeing that
I

obliged

to.

Mr. Tracy: The constitution says that anything can
with
be done by this Convention by unanimous consent—
unanimous consent we can act on it.
Mr. Hardy: I would like to have that pointed out.
President: It is not there.
Mr. Hardy: These resolutions were presented yesterday evening at the meeting of the council, informally,

BANKERS' CONVENTION.

and

was understood

that the matter

would have

take the routine o( being referred to the council for Immediate action, and l proposed announcing that a meet;>.;u» o'clock to-morrow
more practicable to get

ing of the council will be beld at

morning, as

quorum

Hunk

will be

Mr. Caldwell Hardy: I wish to report on behalf of the
Executive Council some matters that were referred to
it yesterday for immediate action and report, the council haviug met this morning and acted upon them.

APPROPRIATION FOR AMERICAN INSTITUTE OF

than this afternoon. Six different resolutions have been referred to the council for
Immediate action, and it would suit the purposes of the
council to pass upon them at once and report them back
for the action of the Convention, and you will have this
lotion officially before you at your morning session.
understood that the matter will take that course
to-day and be reported back to you for your considera-

Resolved, That it is the sense of this Convention that the
Executive Council should appropriate to the use of the Committee on Education such au amount as may be necessary for
continuing the work of the American Institute of Bank Clerks
for the ensuing year, not exceeding the sum of $10,000 and
Resolved, That the committee be authorized to fill the va-

tion.

cancy on the committee.

at that time

President:

will observe the law.

Resolution of .Mr. Willock unanimously adopted and
ition referred to Executive Committee.

Mr. Farsou: 1 move that the Secretary be instructed
to send, on behalf of this Convention, a telegram of
greeting to the President of the United States.
Motion seconded.
Referred to Executive Committee.
President: The meeting of delegates to nominate five
members of the council to represent the State Associations will be here at 4 o'clock on the stage to-day, and
the genera] Nominating Committee will meet here at
5 o'clock to day.

Gentlemen, I congratulate the American Bankers' Association on having the largest first day meeting that I
remember. I wish to call your attention to the program me tor to-morrow, which is exceedingly interesting, and the day will be very full of interest.
The
meeting will be called promptly to order at 10 o'clock,
and I wish you might, every one, be in your seats.
Telegram from Breckinridge Jones was then read.
It is

as follows:

Hobabt, O. T., October
ah Trowbridge, President American Bankers'
Milwauk

Regrets at absence.
Best wishes
Council and for successful Convention.

1901.
Association,

15,

members Executive

Breckinridge Jones.

Kauffman: The President in his remarks this
morning referred very feelingly to the great loss we
have sustained through the death of the President, and
it seems to me, inasmuch as this Association adjourned
.a month ago out of respect to the memory of President
Mc Kinley, that we should place on record, by a series
of resolutions, the great affection we feel for his memory,
and I would move that a committee of five be appointed
by the Chair to submit to this Convention for apMr.

propriate action a memorial, or series of resolutions, for
proper action at a later meeting during the Convention.

BANK CLERKS.
The

first is

a resolution as follows:

;

The council favorably report the matter to the Convention for its action.

On motion

the report of the council

was

adopted.

CONGRESS PETITIONED TO REPEAL

WAK

TAXES.
Mr. Hardy: Next

the resolution offered by Mr. Wil-

lock, of Pittsburg:

Resolved, That we, the American Bankers' Association In
Convention assembled, do hereby respectfully request Congress
to repeal Paragraph 1, Section 2, of the War Revenue Act of
1898, thereby removing the special tax on capital and surplus of banks, also the tax of 5 cents for $100 on bonds,
certificates of indebtedness, etc., also the tax on original certificates of stock, 5 cents for $100, also the tax of 2 cents for
each $100 on transfers of certificates of stock, also the tax of
cents per $100 on time drafts and bills of exchange.
Resolvid, That the Executive Committee of this Association
present this resolution to the proper committee of the next
Congress, as we consider that the necessity of the above taxes
no longer exists.
'.!

The

council reports this favorably for the action of

the Convention.

motion the report was adopted.

CONGRESS ASKED TO AUTHORIZE RETURN OF
IMPRINT CHECKS AND DRAFTS AFTER
STAMPS HAVE BEEN CANCELED.
Mr. Hardy: The next is the resolution offered by
Powers, of Owensboro, Ky., reading as follows:

Whereas, The banks of this Association have expended a
sum in the preparation, lithographing and printing of imprinted checks and drafts, to conform to the War Tax Act of
June 14, 1898 and
Whereas, There remained on hand large quantities of such
Imprint checks and drafts at the date of the passage of the act
of March 2, 1901, under which act the Internal Revenue Commissioner was authorized to redeem the check and draft stamps,
free or imprinted, but no provisions in said act being made for
the future use of such imprinted checks and drafts after canceling the stamps thereon, and the same being valueless to the
Government, their destruction would entail a heavy and unnecessary loss upon the banks and owners thereof therefore be
large

;

Motion seconded and unanimously carried.
I 'nsident
then appointed such committee, connsr of Messrs. Kauffman, Herrick, Whiting, Pugsley
and Mulvane.
Adjourned to same place at 10 a. m. next day, October

The

lflth, 1901.

SECOND DA

Y'S

PROCEEDINGS.

Wednesday, October

f6,

igoi.

The President: The meeting will come to order, and
members will please rise while prayer is offered by Rev.
Dr. Charles Lester.

HUTU

BY REV.

DR.

CHARLES LESTER.

Almighty God, our ricavpnly Father, we ask Thy blessing
upon the bankers of this land and especially upon their representatlv»
mbled In Thy name and presence.
Give
them, we pray Th*e, Thy divine Inspiration, that with clear
p«-r'<-ption of the thing! that are right and a strong will to do
the same, they may be evermore teachers and guardians of
financial ritf:
and commercial honor to this American
people, making them a leaven of rlghteotuneM among all the
nations of the earth that Thy will may be done on earth as It
is done In heaven, and that Thine may be the kingdom, the
power and the g'ory for ever and ev<-r
Amen.

Resolved, That Congress be, and it is hereby, memorialized
an act or to so amend the act of March 22, 1901, as to
authorize the Commissioner of Internal Revenue to so cancel
the stamps on imprint checks and drafts as not to destroy the
future use of said checks and drafts, and after the Commissioner shall have redeemed and made refund to the owners for the
amounts due by reason of the stamps so imprinted, he shall
restore such checks and drafts to their owners.
And to authorize and direct the Commissioner to redeem such
stamps without reference to the date of their purchase.
to pass

The council recommend its adoption.
On motion the report was adopted.

TREASURY ASKED TO CHANGE CONTRACT
WITH EXPRESS COMPANIES SO AS TO MAKE
THEM LIABLE FOR THE LOSS OF UNSIGNED
BANK NOTES.
Mr. Hardy: The next matter was a statement presented by Mr. Kenneth Clark, of Minnesota, of the loss
of $40,000 of unsigned notes shipped by the Comptroller's
office to a bank In the West, claim being made by the
bank on the Government, which, in turn, referred the
matter to the express company, and the express com-

cil

The President: The Chairman of the Executive Counhai -'-me announcements to make.

pany denied

Its liability.

statement

as follows:

The

resolution attached to that

Whereat, rnsigned National bank currency sent by the
Treasury Department to any National bank is at owner's risk

;

BANKING SECTION.
under contract made by the Government between Itself and the
various express companies; therefore be it
Resolved, That this Convention request the Treasurer's Department to change the contract now existing between itself
and the express companies in such a manner that the owners
of any unsigned National currency shall be fully indemnified
In case of loss or theft in transit.

further Resolved, That this resolution be brought to
the knowledge of the Treasury Department through the President and Secretary of this Association.
it

This

to meet in the rear of the platform at once for the purpose of acting upon the resolution presented by Colonel
Herrick.

Call of States.

The President: The next business in order is the call
of States, the remarks being limited to five minutes each.
I will first call for a response from the State of Alabama.

also reported favorably to the Convention for

ALABAMA.

action.

its

On motion

was adopted.

the report

OFFICIALS.
Mr. Hardy: The resolution offered by Mr. Willock,
which was rend yesterday, and which provides for the
enactment of laws for the punishment of those convicted of murder, or attempted murder, of officers in
high public positions, and for the suppression of anarchy,
reported favorably by the council to the Convention

for its action.

On motion

the report

was adopted.

APPROPRIATION TO CONTINUE WORK OF COMMITTEE HAVING CHARGE OF NEGOTIABLE
INSTRUMENTS LAW.
Mr. Hardy: The council recommends the
tion by the Executive Council of such sum
deemed proper to continue the work of the
having: charge of the Negotiable Instruments
On motion the report was adopted.

appropria-

may

be
committee

Law.

MEMORIAL TO PRESIDENT McKINLEY.
M. T. Herrick, of Cleveland, Ohio: Mr. President and
gentlemen, I desire to offer the following resolution:
Whereas, An association has been formed, known as the
McKinley Memorial Association, for the purpose of erecting
suitable memorials in Canton and Washington in commemoration
of the life and deeds of our beloved and martyred President
therefore be
Resolved,

That the American Bankers' Association, through
members here assembled, earnestly commend this work and

its

desire to aid in furthering it to a successful culmination, and
to this end request the members of the association to receive
subscriptions at their respective banking houses and transmit
the funds to Myron T. Herrick, Treasurer of the McKinley

Memorial Association, at Cleveland, Ohio and the Association
further directs the Secretary of the American Bankers' Association to receive from the Secretary of the said Memorial Association subscription blanks and transmit the same, together with
a copy of this resolution, to all of the members of the American
Bankers' Association.
;

present this resolution and requtst

J. W. Whiting, of Mobile, Ala.
I regret that the gentleman appointed by our delegates to respond for Alabama
is not present, because I did not come prepared to make a
speech.
Before referring to the commercial interests of
Alabama, I desire to say a little, politically, as it were, in
regard to Alabama and the South. The Mayor of this city
in his excellent address of welcome yesterday referred, and
justly so, in glowing terms to three sections of this country
the North, the East and the West.
Now it occurred to
me that he had forgotten that the South was in the Union.
I desire to remind you all that we are in the Union, and that
we are there to stay. [Applause.] The records at Washington will show that the percentage per capita of the
whites of the South furnished more men in the army of
the war against Spain than any other section of the Union.
And when the time for heroes came the State of Alabama
gave you two Hobson of the navy, and that grand old man,
Joseph Wheeler, of the army. [Applause.]
I will say one
thing further, that if this Union is ever again assailed by
an enemy, be he domestic or foreign, and the bugle is called
for the assembly of men, the battalions of the South will
leap to their arms and touching elbow to the armies of the
North will rally around that flag and shed their blood liberally.
L Applause.]
Now, speaking commercially, we have not great temples
of art we have no great libraries, but I beg to assure you
that we have our eye on Mr. Carnegie.
The commerce of
the South is improving.
Some of its banks are increasing,
and their earnings are larger every year, and while we give
some dividends to the stockholders, we put in the reserve
more than we give, which strengthens us yearly. The factories of the State are increasing in number.
We have cotton mills now in Mobile. Montgomery, Eufaula, Huntsville,
Selma, and in various other small towns, and it is only ten
days ago that I saw a shipment of manufactured goods sent
from Mobile to China. The lumbering interest is growing.
We are indebted largely to men from Michigan and Wisconsin, who have come down to our State and with their
knowledge of the lumber business have increased the output
and have made it successful, and have benefited themselves
by so doing as well as us.
We have a great many opp.ortunities for men who understand business to come among
I can almost guarantee that with industry and with a
us.
proper knowledge of what they undertake there is no difficulty in their acquiring a competency in a short time.
[Ap:

PUNISHMENT OF THOSE ASSAULTING PUBLIC

its

reference to

an immediate report upon it.
The President: Gentlemen, you have heard the resolution presented by Colonel Herrick. If there is no objection it will be referred as he requests. There being
the Executive Council for

—

;

plause.]

ARIZONA.

no objection, it is so referred.
Henry Dimse, of New York: I have just heard the report of the Executive Council on several resolutions, and
I

will inquire if

what

have heard

supposed

be a

complete report? There were other resolutions introduced and referred to the Executive Council, if my recollection is accurate, and I have not heard any report
upon them.
The President: There were other matters before the
council which have not yet been reported on.
Mr. Hardy: What is the matter that the gentleman
has

mind?
Dimse:

introduced a resolution yesterday recConvention petition Congress to
take action on the seventeen hundred banks whose
charters expire within the next two years.
Mi-.

ommending

that the

The President: The chair remembers asking the gento put his resolution in writing, and meantime

tleman

the question was not put before the house.
sorry it was overlooked.

Mr. Dimse: Then,

sir,

will introduce

very

again

to-

day.

The President: And it will be acted upon.
Mr. Hardy: The members of the council are requested

ARKANSAS.

(No

response.)

(No

response.)

CALIFORNIA.
J.

K. Wilson, of San Francisco

this great assemblage

of representative bankers, the California Bankers' Association sends cordial greetings, and that portion of our State
whose watershed terminates at the Golden Gate also joins
in the same sentiment.
I regret exceedingly that there are
not other representatives of the banking and commercial interests of our State here to gather inspiration from your deliberation, for we all well know that the interchange of
thought and the closer persona! acquaintance which are the
outgrowth of occasions like this tend to broaden our views
and awaken new interests. Geographically when we think
of this great union of States which you all represent we
know that we are somewhat out of focus. But as the map
is changed with the new acquired possessions we may yet
become more of a central point of observation than in former times. California is prosperous because conditions have
been favorable to make it so. To enumerate many of those
reasons would make listening to me here tiresome. We are
the fourth seaport in the country, and California's commercial relations are largely benefited by the increased Oriental
trade.
We stand for expansion. California's fields and
orchards, her mines and her factories have yielded generously, and commensurate with the amount of capital and labor
employed. We have our labor difficulties as do other por-

CONVENTION.

BANKERS'

we may

expect them so long as labor takes counsel and accepts leadership from a class of fortions of the country) bat

ho teach anarchy.
Lei us hope that the prosperity that lias been vouchsafed
to us daring these last years under the leadership of him
who was one of the nation's host and greatest rulers may
\

continue unimpaired.

[Applause.]

I.OKA no.

(No

;

[Laughter.]

Gentlemen may have noticed that the little State of Conlies midway between the two great money centers
of New York and Boston, and for the past two years we
have been attempting so to manage our part of banking
business as to steer between the evil of one-tenth of one per
cent, of New York and the evil of Boston, which insists
upon immediate payment of all checks on Connecticut. You
necticut

thus discover, gentlemen, that not quite so classically,
but more accurately speaking, we lie between the devil and
the deep sea. and let me say, gentlemen, that we have not
Acting upon the suggesyet decided which is the deep sea.
tion of a gentleman last year we have established in various parts of the country, particularly in the West, and
also in the South, additions to our reserve banks, so that today we have incubators, as it were, where we send out
chicken feed, and to-day our reserves are held probably from
seventy to eighty per cent, outside of New York City. You
will thus see that we are extending our lines and strengthening ourselves, and are, we believe, making good friends
all over the country.
New York says it is a good thing to
will

and so we are happy.
business has enjoyed the greatest
year probably in the history of the State.
know we
touch you at every point almost, from the safety pin that
meets you at your entrance into the world to the close outfit
of coffin trimmings when you leave it.
[Laughter.]
There is no State. I venture to say, that furnishes so wide
a variety of manufactured articles as we do.
I might say in connection with our manufacturing interthat our savings bank deposits now amount to one hundred and eighty-five millions, or about two hundred dollars
for every man. woman and child in the State.
Our insurBoston

always

satisfied,

Our manufacturing

.mount to between two and three hundred
So we shall hope to overlay your properties with
insurance and underlay them with mortgages, and we assure you that if disaster comes, we will pay our insurance,
and, if the security is good, we will continue your mortgage.
[Laughter and applause.]
ance

inr

5.
6.

millions.

At the last session of our Legislature we established a
uniform law for the taxation of national bank stock, following somewhat upon the New York plan.
So that all the
stockholders of national bank stock in the State to-day are
ratio and upon the same basis
one per
d on t!i
So that a person
t on the market value of the stock.
living in a small town where the taxes are small has no advantage over the taxpayer in a large city. This we hope will
enlarge our list of stockholders.
Gentlemen I thank you for your attention. [Applause.]

—

FLORIDA.

though a resident of Florida
"
'''ive thought of making this resince I s
port, less than a month ago, and began the search for material therefor, that I realized how little I bad appreciated
her wonderful resources and material advances within recent
years.
I will preface my remarks by quoting nine leading
statements from a recent address delivered by Professor
for,
I

ckbridge, of the
1.

the

Florida

lnrt'"st

:,;ii;

the largest State east of the Mississippi
."..000

colonli

the world,

largest pineapple plantation in the world, 250 ac,res.
farm in the world, 500 acres.
largest peach orchard In the Gulf States, 18.000

fenced stock range east of the Mississippi,

largest

The

largest herd of cattle

owned by one man east

Mississippi, 50.000 head.
9. The largest orange grove under one

management

of the
In the

world, 350 acres.

Phosphate was discovered in Florida less than fifteen
years ago, and has grown to enormous proportions, and. although as yet but an infant industry, the output from her
mines in 1900 was 015,535 long tons, being 55 per cent, of
the production of the United States and one-third of the
world's output, and in value

amounted

to $2,012,803.

Phos-

phate is used in the manufacture of commercial fertilizer in
Few industries
the proportion of 1200 pounds to each ton.
have grown more than that of the manufacture of commercial fertilizer; one company employing a capital of over
S20.000.000 and new companies forming all the while. The
use of fertilizer has raised farming to the dignity of a science, and has increased the South's kingly crop from 3,000,000 bales in 1860 to over 11,000,000 bales in 1900. Now,
with the increasing demand for phosphate for the purposes
named Florida with her inexhautible beds has the assured
promise of millions of dollars annually from that source and
offers splendid opportunities for capital and enterprise.
Our fishing industry with one exception is larger than
In 1897, the
that of any State from Maryland to Texas.
latest data obtainable, 0,143 persons were engaged in the
the capital employed was
fisheries on the Florida coast
$1,300,417, the shipments amounting to 34,137,881 pounds,
and the value being $1,080,870. The sponge industry of
Florida was one of the greatest surprises to me, in its 182
;

men engaged and a capital of $300,000. The amount gathered in 1900 was 304,990 pounds, and was marketed for
$567,685.
Florida produces one-third of the long staple or sea island cotton of the United States, and, while this third is
only 30,000 bales, when one realizes the millions upon millions of spools of thread annually used in the world, made
exclusively from sea island cotton, some idea of the impor-

tance of our share in the product can be appreciated.
Tobacco is quite a growing industry, and of a quality
which was fully exemplified by being awarded the highest
No State in the Union has
prize at the Paris Exposition.
In fact, we make
as many factories making fine cigars.
more pure Havanas than any five States in the Union; the
total output in 1900 being 180,727,583 cigars, valued at
The increase of the business over 1896 was over
$4,500,000.

44,000,000 cigars.
About seven years ago Mr. Flagler completed the Florida
East Coast Railway to Miami, 305 miles south of Jacksonville, which opened up the finest fruit and vegetable section
That the lands and climatic condiin the United States.
tions are worthily appreciated, one has only to point out the
increasing business.
The naval stores business
try in Florida,

amounted

comparatively a

new

indus-

and yet during the year 1900 the shipments

to 331,311 barrels, valued at $3,000,000.
is a large and continually

The lumber and timber trade

I succeeded only in getting figures from
and Jacksonville, but be shipments
Fernandina
Pensacola,
in
1900 were over 580,000,000 feet,
ports
three
these
from

increasing business.

000;

was $350,000;

surplus. $680,000; in loans, $4,100,-

deposits, $9,140,000.

army

the

of people

;

has

contributed to make up
homes and peace of mind

who have

showing comfort marks their
makes possible the full enjoyment

this

of the fruits of the earth.

Gentlemen, I have stated thai Florida was a large State.
Tn behalf of her people I extend to you a welcome to her
Applause.
borders.
I

GEORGIA
is

Davis, of Albany, Ga.

my happy

The duty

of responding

but as grateful as I
to
feel over that fact, it is merely secondary at this moment
to
the
respects
the grateful sense that I have of paying my

for Georgia has fallen to

Florida Agricultural College:

•:l'l.

watermelon farm

largest cassava

The

capital

John T. Dismukes, of St. Augustine, Fla.: Mr. President and Gentlemen: In responding to the call of States in
behalf of Florida, I confess with mucb shame my inability
do the cause justice,

largest

valued at over eight million dollars.
From 51 banks in the State the following results are
shown: 1896, capital, $2,020,150; surplus, $644,919; loans,
In 1901 the increase in
$5,382,094; deposits, *0,093,420.

DELAWARE. (No response.)
DISTRICT or COLUMBIA. (No response.)

the

rees.

•

icut

do,

The
The
The

owned and man-

25.000 acres

Now Britain, Conn.: The State of ConS
and the Connecticut Bankers' Association, the rep>f the various bankers of the Union, who sit in
the shadow of one-tenth of one per cent, below par like ourp.d you cordial greetings, and to those who sit in the
shadow of the darkness of one-fourth of one per cent, below par we send our sympathy, and. as we say in Connecticut, the assurance of our most distinguished consideration.
I.

3. Florida has
2,300 acres.

response.)

Jersey dairy in the world

largest

woman. 100 head.

CONNECTICUT.
A.

The

lot,

;

BANKING SKCTION.
noble State of Wisconsin, which Georgia is proud to call
This splendid city, whose hospitality we arc now enjoying, is a noble exponent of her people's enterprise and
Its splendid public and private buildings illustrate
energy.
the spirit of progress that animates and strengthens the
sister.

hearts and hands of those devoted to a State's development.
here proves our faith in Milwaukee's resources,
Yet we
for the Elks occupied the State before we came.
find that the princely hospitality of Milwaukee is inexhausti-

Our coming

I shall tell my
to spare for us.
return home that the bright light we occasionally see in the North, and which we have called the
aurora borealis, is nothing but the reflection of the radiance
[Applause.]
of this bright and beautiful city.
Now, one word for Georgia. The old century passed
out with incidents that reflected its glow like the summer
clouds that make gorgeous the sunset, holding the promise
In no country does the moral and
of a bright to-morrow.
material status attest the history of past progress and encourage the hope of future greatness as in these United
States, in which fact every Georgian shows a universal

ble; they have

people when

enough and

pride, realizing that public prosperity is only the

sum

of in-

dividual successes, and her people are stimulated to activity
that Georgia may stand abreast of any State in the Union
in the march of progress.
The banking interest is as fair an index of the conditions that Obtain as any that may be had, and I am pleased
Their
to report that the banks of Georgia are prosperous.
interests are conserved by men who recognize their offices as
a quasi public trust, and seek to discharge the duties of
Thus prejudice against banks in
their offices with fidelity.

Georgia has been minimized, because the

officers

while lend-

of their institutions to the development of the

ing the power
State's resources have done so within conservative lines and
have maintained the confidence of the people. There is no

of decreptitude in Georgia, notwithstanding the fact
is one .of the thirteen original States, but her robust

sign

that she

everywhere in evidence, and the magnificent temsupported by four pillars agriculBut it would
ture, commerce, mining and manufacturing.
prove too tedious, and consume more than the limit of reasonable t'me should I mount my Pegasus and undertake to
traverse the whole field of Georgia's advantages and attracSuffice it to say that in no region of the globe do
tions.
sunshine and shadow combine to produce more pleasing or
perfect conditions, and fortunate is the man who has an investment or a home in Georgia among its happy and conI agree with General Whiting; I am sorry
tented people.
Mayor of this city should have fordistinguished
the
that
gotten that the South was an integral part of this nation. I
am glad to say that from the tideless waters of your lakes to
the swelling bosom of the gulf, from stormy Hatteras to the
Pacific waters of the Golden Horn, all of us standing in
the shadow of a great national sorrow, have sung but one
song. " My Country 'Tis of Thee, Sweet Land of Liberty."

activity

—

ple of her prosperity is

became so frequent, that it ultimately got reduced
Hoosier?" as it sounded so much alike. But
we are all there now, and we don't have to wrestle with bootjacks, and most of us wear fine shoes.
The conditions have all been favorable in Indiana during
Indiana has grown rapidly in wealth and in
the past year.
there'.''"

•"

to the cry of

Indiana leads all other States in the natural
In the manufacture of various
productions of gas and oil.
kinds of commodities no State in the Union can rival her.
Glass, tin plate, wire, pottery and like products.
We stand among the first States in the Union in the
amount of school fund; we stand first in railroad area; first
in cheap fuel
fifth in grain products, and fifth in the numWhile stabers of banks organized during the past year.
tistics are unnecessary, so important has been the growth in
bank deposits and surplus that if I had time I would like to
Suffice it to say that they
state them at length to you.
have been very remarkable. Indianapolis was made a reserve city in 1899, and since that time its deposits have
grown several millions of dollars. In conclusion, I will simply say that our people are all on the high road to wealth
and happiness. [Applause.]
population.

;

INDIAN TERRITORY.
IOWA.

(No

response.)

ILLINOIS.

KANSAS.

INDIANA.
Mr. Levering, of Indianapolis, Ind. Mr. President, Laand Gentlemen I have been asked since I came to the
Convention how the name of " Hoosier " came to be associated with our State.
Well, I will tell you. At an early
day all the roads leading across the country came through
Indiana, and the inhabitants at that time lived in cabins,
the doors being kept shut by a latch string only, and, after
dusk, the farmers started in to take off their cowhide boots,
and often while they were wrestling with the bootjack a
knock would come at the door, and they would inquire,
"Who's there?" and the man at the door would say, "I
want to come in let me in." So the knocking at the door
got to be so frequent, and, of course, the inquiry " Who's
:

dies

;

John R. Mulvane spoke as follows for Kansas Mr.
President, Ladies and Gentlemen
I am happy to have the
privilege of answering for the good State of Kansas.
The
good Lord has dealt generously with us in the crop year
:

Mr. President and
of Chicago, 111.
supposed that arrangements had been made
for some one to answer for Illinois.
I did so last year at
the Convention as a substitute, but I had a few hours' notice in which to prepare my remarks.
I am quite unable,
however, at this time to answer for the glorious" State of
Illinois on the spur of the moment.
It is entirely beyond
rr.y power, because one needs to study the subject and put
his thoughts into words that will do it justice, and I am
quite incapable of doing that on a sudden call like this.
Therefore, with this explanation, I beg to be excused.

James B. Forgan,

gentlemen,

response.)

Mr. Pasche, of Davenport, Iowa
Mr. President and
gentlemen, I can only say that the banks of Iowa are increasing in number, and that their deposits are increasing.
The total number of banks at this time is 1.26G, divided into
222 national banks, 220 State banks, 268 savings banks, and
During the past year a conthe balance private bankers.
siderable portion of our State has been troubled with too little water, and while there is a shortage in corn and hay in
some localities, yet, owing to the good prices generally prevailing, the receipts all' over the State will not fall below the
average in the last five years of about $500,000,000.
Incidentally it may be well to mention that our manufacturing industries continue to expand, and this year our
manufactured products will represent a value close to $200,000,000.
Our State and savings banks June 30, 1899, to
April 14, 1901, increased their deposits from $77,000,000 to
$112,000,000, and during that period not a single State or
national bank failed. There is plenty of money in Iowa to
put out on proper security and at as low a rate of interest
[Applause.]
For some time there was a conas anywhere.
troversy in our State as to what should be Iowa's favorite
flower, and, while it ended in adopting the wild rose, the
contest was bitter for several years between the silver leaf
and the golden rod, and while the golden rod triumphs the
silver leaf adherents are still somewhat active, and, unlike
some of the heads of the Iowa corn, which was damaged by
the hot winds of the summer, the adherents of the silver
leaf are still attempting to sprout tassels on the lifeless
heads.
[Laughter and applause.]

[Applause.]

IDAHO.

(No

1901, and has given us sixty bushels of wheat per capita
upon us thirty-three and one-third bushels
of corn for each of our million and a half inhabitants.
have a horse for every Jack and Jill, from the babies to
also has bestowed

and grandma, not counting the 90,000 mules and
own a milk cow for every two inhabitants and a
beef steer and a half to every man, woman and child in the
commonwealth. We have for every two persons, from the
babe to the oldest, three head of swine thus our pork for
winter is provided for. The average value of our last three
years' products, agricultural, stock and mining, has been over
$300,000,000 per annum.
The last of July came good rains and every plow was
put in motion, and all the available acres went into fodder
and forage crops wheat, rye, kaffir corn, sorghum, etc.,
were sown to replace our short grass crop. The continued
good season has insured us ample forage for the fall and fodgrandpa
asses.

—

;

der for wintering our large holdings of stock.
Our banks have deposits of our people's money of over
seventy-five million dollars, being over fifty dollars for every
inhabitant.
Our mortgage debt is reduced to about one-fifth
of its highest flood-tide, and the rate of interest on the small
unpaid balance has been reduced 33 per cent.
Yearly we have widened the range of our agricultural
products.
Our dairy interests are now competing with the

BANKERS' CONVENTION.

best.
Our horticulturists are now boasting that we bave
the largest apple orchard in the world
1,280 acres in one
orchard, the same man owning 1,700 aires of apple trees.

MAINE. (No response.)
.MARYLAND.

—

Mr. Oler. of the Citizens' Nat. Bank of Bait., Md. There
seems to be little left for me to say. when Maryland is called
upon, after all that has been so well said here.
Prosperity
seems to be so free and so general that I can hardly speak
of that.
Yet we are busy down in Maryland, in fact, we
have always been busy in Maryland. We were busy there
at the beginning of the century; we were busy
there in

have increased the quantity and improved the quality of our live stock.
Have painted our houses, built new
barns, tidied up our farms, own the latest improved agricultural implements, have bought our pianos and rubber tired
buggies, paid for all. and are now sending our Johnnies and

Sallii - I" college.

For transportation we have four of the best systems of
railways in the United States, giving to our people quick
and cheap access to the best markets of the world. East and
West, and all of Central and South America are at our
Southern doors.
With a poor house and a poor farm in ninety of our
We
counties one-third of them are without inhabitants.
drink less whisky and beer and spend more money for literature than perhaps any other equal population in the
United States. Our charities are as broad as from the Emerald Isle to India and include the " Heathen Chinee." And
we have more schools houses and less illiteracy in proportion.
In the late unpleasantness with Spain, we responded
promptly, and gave to our country Funston and a regiment
of soldiers, .very man of whom wrote his name on the muster roll and made his mark in the Philippines.
In conclusion, I assure you prosperity and contentment
are several inches deep all over Kansas, and we are now
singing, "Praise Cod From Whom All Blessings Flow."

KENTUCKY.

(No

Bolton, of Alexandria, La.:

too,

when Maryland "400" saved

the Continental
gave the title "400" to the country.
[Laughter.]
We were busy there in 1812 when we stopped
the victorious march of the British army at Baltimore and
when we shut off the British fleet in the Chesapeake.
We
were busy in the war of 1800— busy on both sides
[Laughter], for we were busy trying to keep the Southerners out on the one side, and we were trying to keep
the
Yankees out on the other. We did not succeed so very well
in either case.
We were busy in 1898 when that glorious
son of Maryland met Cervera's fleet at Santiago and
destroyed it, for Schley was a Maryland man.
[Applause.]
We are still busy. We are busy carrying baked beans
for Boston, and we are busy turning out Panama hats
for
the world at fifteen dollars apiece.
We are busy trying to
keep the wealthy and aristocratic young men of the country, who claim now to be members of the " 400,"
fr/>m carry-

thus

ing off and marrying our pretty girls. With all due
respect
my friend from Lonsiana, we claim to have all the prettyr
girls
present company excepted, of course.
e are busy
try to keep the capitalists from the East from
crossing
to

—

response.)

LOUISIANA.
<;.

177(),

Army, and

Mr. President and

Gentlemen of the American Bankers' Association I rise to
respond to the call of Louisiana with some diffidence. I have
been before this Association on previous occasions where
there were two very intelligent and bright young men presOne of them we recently captured from
ent from my State.
I had hoped for one of those
the great city of New York.
young men to respond, but I have not been able to see them
and make any arrangement.
I have no set speech for Louisiana, but I am never willing to remain silent when the State of my adoption is called
upon. The State where the sky has always seemed bluer,
:

the grass greener, the roses sweeter, and the ladies, God bless
them, present company excepted, the fairest of the fair. [Applause.]

Mr. President, for the resources of Louisiana and the
progress she has made I have no figures to present. Many
of you doubtless have attended the Pan-American Exposition
at Buffalo, and have seen the showing we there make of our
resources and the greatness of our State, which, I think, is
an exhibit no State need be ashamed of. The resources of
Louisiana have been wonderfully developed in the last ten
years, largely from the introduction of an honest and a
sturdy immigration from Iowa, from Kansas, and recently
from Illinois, attracted by the wonderful development of our

Mason and Dixon's line and getting
we claim that the South

to the

banking business,

The banks are increasing

We are the gateway of the South their products must
pass through Baltimore, and the products of the North must
pass through Baltimore in going to the South.
We are doiDg something in banking, too; I had almost
forgotten that.
I haven't any statistics to give you.
I al;

ways

like to see the total of

their surplus

and

in their deposits.

all

the time, both in

have money

many

portions of the State to spare, if any of our friends are
short.
In fact, we have more money on deposit in many instances than we can find a satisfactory use for.
have recently reorganized and revised the State Bankers' Association of our State, and I have the honor to represent that or-

meeting to-day.
ganization at
you
come
to Louisiana and investigate for
of
If any
yourselves you will see a magnificent fruitful soil which
needs only to be tickled with the hoe to laugh with the harYou will see the immense development in Southwest
vest.
Louisiana where the landscape; is dotted over with rice
farms yielding enormous returns to tbose engaged in that
you will see the immense development in our timtry
ber interest, in which men from Michigan and Illinois and
Ohio have in recent veins invested, and where they are today receiving returns of 500 per cent.
I invite any who may be present here to come to Louisiana, assuring you that you will receive a cordial welcome,
and that the latch string bangs always on the outside.
In conclusion, let me say that we have there a city nesta city that is likely soon, when
ling upon a broad Inland sea
this

many

ni'tion of the isthmian canal is completed, to equal
of the Northern cities of this great country.
[Ap-

plause.]

anything.

about banking anyhow, although
bank.

All I

I don't

know much

the President of a

know

is that I try to get as much money on deand then try to put it out at as high a rate
of interest as possible, and then sit down and look at the results.
[Laughter and applause.]
We are busy down our way in raising fine men and fine

posit as possible,

women.

For

its

men

need only say that after thirty years
by the war they were willing to

of a feeling engendered

break loose from party prejudices when the finances of the
country were threatened, and they turned old Maryland
into the Republican column and gave 30,000 majority for the
sound money doctrine. [Applause.]
It would be an invidious comparison, and so I refrain from making it, to call
your attention to the present delegation from Maryland.
Gentlemen, I thank you for your attention.
[Applause]

MASSACHUSETTS.

(No

response.)

MICHIGAN. (No response.)
MINNESOTA.

a very satisfactory

our particular section

to finance.

rice intere-

condition.

into our preserves in the

South, for

John R. Mitchell, of Winona, Minn. I regret, gentlemen,
that you are obliged to listen to a substitute, as I know that
our sponsor could give you a more interesting account of our
:

Slate than I can.
Upon examination of the annual report
find that Minnesota has not been heard from for several
years.
Just why there has been this silence I am unable
I

to say.

that

can

state,

however, that

we have not been favored with

the

not due to the fact

same wave

perity that has reached every other State, because
in the fullest sense of the word.

of pros-

have,

Conditions with us have changed to such an extent over

what they were a few years ago that the money market of
St. Paul and Minneapolis has become one of the chiefest
This is due, of course, to the rapid accumuin the country.
of wealth

within the State, as is evidenced by the
increase
in the combined deposits of National and
enormous
State banks as compared with what they were ten years ago.
lation

The aggregate deposits of our National and State banks today are about one hundred million dollars, while ten years
ago they amounted to only $50,000,000. Our increase in
cash resources has come entirely from the development of
our natural resources. It has not been made up of deposits
from other States. Yery few of the banks represented here
any credit balance with the bankers in Minnesota.
What we have belongs to us. You may have some money
loaned in order to help move our enormous grain crop this

BANKING SECTION.
year, but

not as

much

as you have been accustomed to

It is a reasonably safe predicIoau us in previous years.
tion to make that iti a few years Minnesota will be in a po-

sition to

move

its

own

80,000,000
5,250,000
30.000,000
55,000,000
4.000.000
7,000,000
Total

of wheat, valued at
of barley, valued at

of corn, valued at
of oats, valued at
of flax, valued at

of potatoes, valued at

$40,000,000
2,000,000
13,500,000
0.000.000
.-.
4.600,000
3,500,000

value

For the number

behalf of the Slates and Territories of
we bid you come to our city and go
happy and better people. [Applause.]
in

home

MONTANA.

bushels
bushels
bushels
bushels
bushels
bushels

and

the Louisiana Purchase,

crop.

Minnesota is a State of diversified resources, the most
important of which are its agricultural resources. From the
best information obtainable our crop statistics this year are
as follows

Of Missouri,

$71.S50,000
of inhabitants. Minnesota

to-day the

greatest dairy State in the Union, and one of the best evi-

dences of the good quality of our butter is the fact that it
won first prize at the Paris Exposition of 1900, and is in the
lead for the first prize at the Pan-American Exposition. It
is estimated on reliable authority that there is a total investment in our creamery industry and farm dairying industry
in the State of #1(55,925,000, from which an annual income
of #34,000,000 is produced.
The timber resources of Minnesota have been heavily
drawn on in the past, yet it is estimated that the standing
pine in the State amounts to more than thirty billion feet.
The purchase of cut-over pine lands has become quite a popular investment recently, the lands being resold to farmers
Thus it appears that our timber lands are
in small tracts.
being transformed into agricultural lands.
Our mineral resources are also a source of large revenue.
It is an undisputed fact that we are now mining more ore in Minnesota
annually than is mined in any other State in this country.
What the discovery of iron ore in our State has been to
Minnesota and the country at large would be difficult to
overestimate. The low cost of mining our ore and transporting it to the furnaces, together with the improved method of
manufacture, lias given our country the enviable position today of controlling the iron and steel situation of the world.
Quoting from a brief history of the iron ore industry which
I recently prepared, it can be said that " Since it is an established fact that the prosperity of our country depends so
largely upon the condition of the iron industry, the logical
deduction is that the commonwealth of Minnesota contributes more toward making this country the most prosperous
one on the face of the globe to-day than any other State in
[Applause.]
the Union.

MISSISSIPPI.

(No

response.)

MISSOURI.
Mr. Wade, of St. Louis, Mo. Mr. President, Ladies and
Gentlemen
Missouri in her agricultural resources, her
manufacturing industry and in her commercial business, is
happy and prosperous.
I have been instructed by the Missouri delegation to say
a few words apropos of the Louisiana Purchase Exposition,
which is the subject uppermost in the minds of all Missourians at this particular time. We have concluded to eclipse
every exposition that has been held on the face of the earth
at the approaching show in St. Louis. To do that we have
been provided with the funds, and doubtless many of you
will be surprised when I tell you that before one dollar is
received at the entrance gates for that show fifty millions
of dollars will have been expended. Now I do not want you
to accept statements of that character without some proof.
The great Government of the United States has come to our
rescue with five millions. The city of St. Louis has added
another five millions, and the citizens of St. Louis have contributed five millions more.
Those of us who are active in
the conduct of the exposition fully realize that we will get
another fifteen millions from the bankers before we open the
gates.
The States and Territories of the United States are
bound to expend ten millions in exhibiting and exploiting
:

their resources.
Then every great nation on the face of the
globe will be reached and they will furnish the rest of the

money.

We have as an exposition ground the handsomest p'ot
ever set aside for the use of such an enterprise.
We have
the exposition captained by one of the ablest men of the
world.
We have a steady hand at the helm in the great
banker of the Mississippi Valley, a man who is bound to see
that it is not only a social but a financial success as well.
We have a people in St. Louis that are overflowing with
hospitality, and in their behalf, and in behalf of the State

J. E. de Carle, of Miles City, Mont.
I had supposed Montana would have a much larger representation here than it
has. I believe there are only two delegates here to-day from
Montana. As it is, the lot has fallen upon me to speak in
:

behalf of the State.

I cannot enlighten you very much.
Monyou know, is one of the youngest States in the
Union, but she is one of the largest producing States in mineral wealth.
Last year Montana produced $70,000,000 in
copper, gold and silver. Montana is one of the largest States
in the Union, embracing a greater area than all of New
England, excepting Maine.
We also have a larger range of territory devoted to cattle
and sheep growing than any other State. Last spring from
the two towns which my colleague and I represent we shipped
over sixteen million pounds of wool, which came from Eastern Montana. A good many of you may not understand how
the sheep are ranged there.
I have had people ask me if
we allow them to range out on the hills without any care.
No, let me tell you that for every 2,500 head of sheep there
is a herder provided, and during the last few years the
ranches have put up hay to provide for a hard winter, and
they are cared for.
The cattle range very much at large,
but always in the spring our cowboys round them up thoroughly, branding all the calves and getting them into condition for shipment in the fall season.
Although at the last
election Montana went Democratic, and it was thought that
when Democracy was defeated and free silver was not put
up as the main issue that it would be a drawback to Montana, but I venture to say that if election was to-day, wheth-

tana,

banking,

er free silver was the paramount issue or not, Montana
would vote for sound money. [Applause.]
Montana claims to have one of the show places on earth
the Yellowstone Park and I think if any one wishes to
have a most enjoyable trip during the summer vacation they

—

;

cannot do better than take a trip through the Yellowstone
National Park.
I might add that we claim to have in our State one of the
greatest statesmen of the land
Tom Carter. [Laughter.]
We have recently sent to the United States Senate one of
the richest men in the world
William A. Clark. I won't
discuss the methods by which some allege he was elected it
is enough for me to say that he is there all right.
[Laugh-

—
—

;

ter.]

I feel that in coming here to this, my first, Convention, I
have been greatly benefited, and I wish to assure you all

that

it will not be the last as well as the first time, and although we have not a State Association in Montana, and
therefore Montana could not vote for members of the Executive Council, yet I trust that before another year goes around
you will have her vote in .the Council. [Applause.]

NEBRASKA.
Mr. Guernee, of Nebraska Mr. President and Gentlemen
of the Convention
In the absence of our Vice-President I
have been asked to respond for Nebraska, and you will find
my very excellent speech in that little volume of poem and
song by Colonel Branch, entitled " Proceedings of the Amer:

ican Bankers' Association, 1901."
[Laughter.]
I say, very
excellent speech.
I mean that it ought to be, because I
told the fellow who is getting it up for me that he should
give us the best he had in stock
I mean the best he had on

—

Milwaukee. [Laughter.] For nothing is too
good for Nebraska.
Several of the gentlemen who have spoken here have
talked about the prospects of their States, the Panama hat
industry, and other subjects.
Some of them have claimed
great things, as for instance the gentleman who preceded me
claimed Yellowstone Park. Now that is a part of Nebraska,
too.
There is something in counting on prospects. Now we
don't count prospects in Nebraska among our assets. We
are like the young fellow who after marriage came the first
baby, and he said that realization was so much more impressing than anticipation.
[Laughter.]
We have the corn, the wheat, the oats, the rye, and the
barley, all matured.
We have the cattle and the hogs and
the sheep and the horses and the goats, too
and we have
splendid schools and colleges, and tens of thousands of beautiful women and splendid men, and as much as seven hundred
or eight hundred bankers.
Everything is on the increase
with us. The products of our farms and our manufactures
tap, as I

;

—
BANKERS' CONVENTION.
onderfulh
Out wealth and our deposits and
our bank clearings are increasing in like proportion. Thehappiatul contentment and the prosperity of our people increase
every day- yes, everything hat 1 know of in Nebraska e.\tain blasted hopes and the interest question [laughtar] is on the Increa
must s.i\ to you who are gathered here how much we
1
are pleased to be with you. 1 came here by way of your suburb some ST> miles down the lake, and as 1 came along I was
pleased to observe some nice golf grounds, which reminded
me that the people back here are taking on evidences of civilization.
[Laughter.]
Then I noticed down nearer Chicago a city called Zion. Well, 1 declare I never expected to
see Zion anywhere around here.
I
thought it was a place
But
held in stoic for good bankers at some future period.
there it was, and the principal thing I wondered at was that
[Laughter.] Then the
they had located it so near Chicago.
sign posts alone the road interested me.
By the way, at
Zion the sign read. " The City of Zion, 0.G50 acres." Why
that would give to each truly good man in Chicago a whole
But this is digressing a little
section of laud.
[Laughter.]
from what I started to tell you. I saw some signs along the
way. Do you know, 1 believe in signs. For instance, if you
have got a poor promissory note you shove it off on a rich old
[Laughter.]
duffer and tell him to sign it. and he signs.
But this sign thai 1 -peak of said. " Fitly miles to Milwaukee," and then 4!) and 48 and 47, and so on, and the only
thing printed on that sign was that beautiful and touching
legend, "The beer that made Milwaukee famous." [Laugh.

—

ter.]

Well, gentlemen, we thank Milwaukee for her hospitalThe cup that she extends has no raised bottom. In its
contents there are no dregs, but rather it is the clear amber,
the pure golden tint, the nectar of friendship and hospitality.
And, gentlemen, I close with the good old couplet that we
ity.

"May

used to write in our girls' autograph albums:
joys be as deep as the ocean, your sorrows as
Laughter.
foam."
r

light

your
as

response.)

NEW MEXICO. (No response.)
NEW YORK.
New York

City

too.

opportunity thai these conventions
who do business with us in Now
York. A lady from Chicago came to me a little while ago
and wanted to know if she could get her check cashed. I
told her I thought she could, and I sent her to the paying
She replied,
teller.
He iid, " Madam, I do not know you.
Laughter.]
acquainted."
cet
I know that, but we want to
splendid
instruments
are
inventions
Now these bank
for acquaintanceship, and we New York bankers appreciate
use of the fact that they give us an
then.
with those with whom we do
acquainted
opportunity to get
with New York.
business
does
'very
one
and
you any figures. In
give
to
is
necessary
it
think
I
do not
Kansas, I found
from
gentleman
with
a
taSkiilg

are

triad

afford us to meet

the

those

all

confidence.

[Applause.l

We shall be obliged to suspend this
gentlemen, and take up other business.

The President:

MEMORIAL
Mr. Hardy:

PRESIDENT

McKINLEY

AP-

instructed by the Executive Council

report rocoramending the adoption of the preamble

and resolutions offered by Colonel Herrick this morning,
and referred to us for immediate action.
On motion, the resolution offered by Colonel Herrick,
of Cleveland,

Ohio,

relative

the

monuments
memory

erected at Canton and at Washington in

of the

McKinley was unanimously adopted.
The President: We shall now have the pleasure of

late President

hearing from Mr. A. B. Stickney, of New York, President
Chicago Great Western Railway Company, upon
the subject of " The Medium of Exchange and the Hanking Function."

of the

The Medium

Exchange and the Banking
Function.

[Mr.

Siickney's paper will be found in full on pages

The

might boast that all roads lead to New York. We
We feel that when
..:-;,
glad of it and grateful for it.
it is evidenl thai the country is prosprosperous
is
York
New
is,

NORTH CAROLINA.

50 to 55 of this Supplement.

Mr. President and
Gentlemen: Responding for the State of New York, I may
say that we do not care to boast of the great figures which
may be told. We rather boast that we are akin and nearlyrelated to all these other States which are reporting them-elves here so happy, prosperous and contented.
Bchenck, of

response.)

PROVED.

have been said here there does not appear to be much left
to say about New Jersey. Nevertheless, we are proud of
New Jersey in every way. New Jersey is a State containing
It is essentially a State
a peaceful and prosperous people.
We have within its borders a great college
of homes.
Princeton University, and we have an ex-President of the
United States. New Jersey is a State that is in a highly
prosperous -oudition. She is out of debt and does not owe
Her money is deposited with her banks, and is proor.
We are not like the
vided toward paying her school fund.
who
said
be was between the
from
Connecticut,
gentleman
we have Philadel
side
of
us
sea.
one
deep
On
the
devil and
and
when
we cannot get
Love,
of
Brotherly
city
the
phia,
what we want from New York, why, we turn to Philadelphia
and we can always get it. [Applause.l

15.

(No

Mr. Brown, of Raleigh, N. C. It was my privilege four
years ago in beautiful Detroit, and again a year ago in magnificent Denver, to answer to the call for North Carolina.
Epon those two occasions with becoming modesty, I hope, I
claimed for my State about everything of which any other
It seems necessary now, therefore, to
State could boast.
add only that if since then anything new or beautiful or useful has been developed, whether by invention, by discovery,
or by creation, whatever it is and wherever it is, it can be
found duplicated or improved upon in North Carolina.
[Applause.]
The new century presents a hopeful view to the
old State.
We recognize that divine wisdom guards the nation and the State as it does the individual.
In full sympathy with the spirit of progress, we hear with gratification
the expanding power and enlarging influence of our country.
We are a loyal people, and we deeply lament that
American soil ever gave fpothold and that the pure air of this
land ever gave the breath of life to one, unnamable let him
ever be, who lifted the hand of violence against so pure a
man as William McKinley. We rejoice to believe that President MeKinley's work was well done, and that in dying he,
perhaps, did more for the elevation of our people than many
years of added life might have accomplished.
We rejoice to
believe that his mantle has fallen upon worthy shoulders,
and to President Roosevelt we give the assurance of our

call of States,

Samuel II. Blackwell, of Princeton; N. J.: I cannot refrain from responding for New Jersey, although I did not
come here to make a speech. After a.l the good things that

NEVADA.

its

]

NEW HAMPSHIRE, No
NEW JERSEY.

that he Knew more aboul New York banks and New York
news ami Wall Street matters and the wealth of great men
in New York than I did myself.
Indeed, I find that every
banker all over the countrj reads the bank report, and they
know whether we have 10 per cent, or 25 per cent, reserve,
and it behooves us to be very circumspect when we go
abroad, therefore, for you know all about us.
[Applause.]

have enjoyed this address immensely. Ordinarily we should now adjourn for luncheon, but nobody will want to miss an address from the
Secretary of the Treasury, whom I now have the pleasure-

President:

of presenting to you.

(Applause.)

Address of Honorable Lyman
Mr.

President and

Gage.

Gentlemen of the American Bankers'

Association:

You perceive that I forgot to bring my voice with
I
left It somewhere between the summit of the
tne.
Rocky Mountains and the city of Milwaukee. Perhaps
will come to my aid a little later, but it will require
it
if you tolerate me during the
during
which
I will take your time.
fifteen minutes
It seems to me thai anything anybody is liable to say
after the magnificent and well ordered speech to which
you have just listened must be in the nature of an antiwas pleased to hear that cold, deliberate,
climax.
I

great patience on your part

He got at fundamental truths and fundamental principles, and he applied them with the skill and the calmness and the kind
Indifference of a surgeon amputating a limb. But I am
ruthless statement of Mr. Stickney.

BANKING SECTION.
and

think you are

from
had spoken from the inside of the counter he would have been suspected of
promoting some scheme in the interest of the money
power. He spoke truthful words on behalf of that great
glad,

outside of the counter.

multitude

and trade.

who

all

glad, that he spoke

If he

represent industry, enterprise,

commerce

glad he is outside of the counter boeause his voice will reach far, and it will carry with it
I

the spirit of sincerity and disinterestedness. I do wish
one thing more; I wish he represented Minnesota in the
halls of Congress. (Applause.) With the high respect
which I entertain for both of those legislative bodies I
do not think it is any aspersion on them to say that for

and political economy there is
and there is great need for the courage and firmness and clearness which has been evidenced by Mr. Stickney in his remarks to-day. I do not
true doctrine in finance

much needed

there,

should venture to come on at this time, if my
voice or my word did not in some way supplement to
some degree the thought which he has expressed; I
think they do.
[The rest of Secretary Gage's remarks will be found
under the heading, " The Defects of Our Treasury System." on pages 47 to 40 of this Supplement.
think

We have had an unusual meeting, parthe two formal addresses to which we have
just listened. I think we shall all consider it a privilege
to express our thanks to Mr. Stickney for his very able
The President:

ticularly

address, and to the Secretary of the Treasury for his soThe Secretary makes informal
called informal talk.

which require very formal attention.
Gentlemen, I will ask you to express your thanks to
these gentlemen by rising. (The entire house rose.) Mr.
Stickney and Mr. Gage, I have the pleasure to state that
the thanks of this Association are unanimously tendered
for your addresses.
Secretary Branch: I would announce to the Convention that the Local Committee has requested that the
fact be made known that the entertainment to-night
will be at the Exposition and not at Whitefish Bay, as
talks

was

the intention,

vention

was

first

when the time

for holding this Con-

fixed for September.

The President: Gentlemen, the Convention will stand
adjourned until ten o'clock to-morrow morning. I hope
every member of the Convention will be In his seat
promptly at that hour. Adjourned to Thursday, October
17,

10 A. M.

;

BANKERS' CONVENTION.

DAYS

THIRD

PROCEEDINGS.

Thursday, October

/-,

day, Ohio enterprise has been

igoi.

The President: The Convention will please come to
order aud members will Stand while prayer is offered
by Rev.

Beveridge Lee, D.D.

.1.

l'UAYEK.

most gracious God. as we assemble
In Convention this morning.
We Dnd in our hearts a desire to
worship Thee as the t;od of to-day's life. We liud In our minds
give Thee

thanks,

the Inclination to turn aside In a worshipful moment for the
blessing of God upon today's work.
O Spirit of the living God, energize each of our faculties
Tianquilize our spirits by
Into the largest possibility for Thee.
tbe calm of the divine pardon.
Subdue our wishes Into a will

and a resolve to do

all thiugs according to the will of God.
give Thee thanks,
God, for life and health. We thank

Thee for the power to live and power to think and power to
work and power to love. Make us more perfect. Make us more
the men we ought to become.
We want to be manly men. We
want to be Christ-worded men. We want to be men who are
praiseworthy

men who

winsome

are

business

men who

are

in all the social

earnest

relations of

religion

God, that Thou wilt lead us to recognize
our responsibilities.
Thou who dost know the hearts of men,
Thou who dost weigh the spirits of men in a balance, incline
our hearts to Thee.
We pray Thee to put the best men in the highest places.
Pnt the men of greatest trustworthiness in the places of greatImpress upon us the sense of our obligations.
est responsibility.
Make us to become responsive to all the trusts laid upon us.
Make us men of probity and integrity and honesty and exactness.
Make us to be those who realize not only a sense of dishonesty, but a sense of disloyalty.
May we be true to our
feelings that incline us to do that which is honorable.
May we
be true to that which inclines us to be honest in our dealings.
We pray Thee that Thou wouldst bless those before you,
and all those engaged in financial affairs in our country. Bless

pray Thee,

those who are in the lesser positions those who are the clerks
as well as those who stand at the head of the institutions.
We pray that all of them may be inclined by the teachings of
truth and righteousness to do rightly man for man.
We beseech Thee to bless our country. Bless those In authority in all Its affairs, executive, administrative and judicial.
We pray Thee to bless us in our civil affairs, and may we promote to highest positions men of Integrity and uprightness.
those homes from which so many
Bless us in our homes
of us are to-day separated.
Bless us in our individual lives, teaching us better and better the meaning of life, and how to make the most of life; leading us to know God and to live for God, and leading us out to
walk more largely with God in our dally life.
We ask the pardon of our sins in Jesus Christ our Lord.

Amen.

The President: A part
left

unfinished,

States.

and we

of yesterday's business

will therefore

was

the faces in this audience, that certainly

resume the Call of

Call of States.

an Ohio man

America should

feel

plause.]

OKLAHOMA.
Otto A. Schuttee, El Reno In rising to respond for Oklahoma, I would say first that she is only twelve years old,
yet she is large enough to wear long dresses.
What we want
:

Oklahoma

principally

statehood.

think

are en-

from the fact that the average population of the
States of this Union when they were admitted to the Union
was 59,000. We have to-day over 500,000, and twice the

titled to it

number of
Union had

school children that the several territories of this
as population when they were admitted as States.
raised last year thirty million bushels of wheat.

had a taxable wealth of $60,000,000.

have 38,000 square

miles of area.
A great many people think Oklahoma is too
small to be admitted to the Union.
If you stop to figure
you will find that we are as large in area as Ohio. We have
thirteen millions of bank deposits.
That is doing quite well
for a child twelve years old.
have 11,000 miles of rail-

way, 2,500 public schools and a dozen colleges, 800 post offices, 175 newspapers, and not a poorhouse in the territory.
[Applause.]

raised last year, as I said before, thirty
also raised fifty million bushels

million bushels of wheat.

of corn, twelve million bushels of oats and one million bushels
of fruit, half a million head of live stock, 150,000 bales of
cotton, 500 carloads of melons, 1,000 carloads of potatoes,
and a little of everything else, including almonds and bana-

want capital, labor and more people.
took the
gold medal and several diplomas on corn, cotton and vegetables at Chicago, and the highest award at Paris on cotton.
think for a child only twelve years old we have done renas.

markably well. There is not a State or Territory in this
Union which offers better inducements for the investment of
capital and for returns thereon than Oklahoma, and we invite you to visit us.
We have also had the honor of having
held within the borders of our territory the only lottery ever
conducted by Uncle Sam.
[Laughter.]

ask the Secretary to proceed with the

will

see

proud of the intelligence and ability displayed in the faces
of her bankers.
As the Secretary of the Treasury remarked
yesterday, the bankers of America are progressive men, and
I believe that when we go to our respective homes and take
up our tasks in our banks and come to consider what shall
be best, not only for our banks, but for the people of this
great country, because the bankers of this country are patriotic, I think we will follow the suggestions made by Mr.
Gage. Even if we do not get the principal bank in Ohio, we
will have an Ohio man managing it in New York.
[Ap-

;

—

You

life.

felt.

cannot go anywhere but what enterprise and success follows
in his footsteps.
[Applause.]
am pleased to meet this distinguished body of gentlemen.
I said to my wife yesterday, as we sat here and looked over

PENNSYLVANIA.
James H. Willock, of Pittsburg I have been so engrossed
by the interesting proceedings of this Convention, both in this
house and out of it, that I almost forgot that I might be expected to respond to this call.
The delegates here from Pennsylvania, as well as the much
larger number who have been detained at home by the exigencies of business, wish to join their voices with yours in
this grand chorus of prosperity.
We are very thankful for
the blessings we have received, as well as those we expect
to receive.
We know this Convention will do us much good.
We know from the experience of other cities that it will do
Milwaukee much good. Why, only last month, when we
were expected to assemble here, I noticed by one of the newspapers that the permits for new buildings to be erected in
this city were 3295 per cent, larger than for the corresponding month last year, and twice as much as for any other city
in the country on the percentage plan.
[Laughter and applause.]
So you see they are beginning to derive a benefit
from our visit already.
We have met the Milwaukee bankers and we know they
[Applause.]
If I had time to tell you
are good fellows.
about the great prosperity we have experienced in Pennsylvania the figures would be astounding.
No matter where it
is, in financial, manufacturing, commercial or any other department of industry. The shipyards on the Delaware Rivethave under construction at present ships of the aggregate
value of over twenty million dollars.
The freight that went
out from Pittsburg in the last twelve months foots up the
:

Call of States

NORTH DAKOTA.

(Continued.)

(No

response.)

OHIO.
Hughes, <>\ Columbus, Ohio: Mr. President and genwas not selected by the Ohio delegation to speak
for the State, yet at the same time I do not like to have the
modern mother of Presidents passed by in silence. Everybody knows that every one great has come from Ohio, and I
say reverently that Ohio, in the President whose death we
mourn, produced the greatest man this country ever had. If
it shall be the will of the American people the next time
when we meet to select a leader for the position of chief ex<> utive of our country
they can be found by the dozen in
no mistake if you select an Ohio
make
Ohio, and you will
this
without
being charged with having
man. I can say
because
egotism,
I have not the honor or
spirit
of
it
in
a
naid
born
soil.
on
Ohio
I come here
having
been
of
fortune
good
representing one of the principal banks in the capital city
I have not the honor of being an officer or a worker
of Ohio.
I can say,
I represent the bank as its counsel.
in that bank
lowever, that the banking interest in Columbus is, like every./'.

tlemen

\l.
:

;

And I want to
lo, exceedingly prosperous.
thing elsay for Ohio that I was pleased to hear yesterday the happy
reports from Kansas and from Colorado and from Nebraska
and from the other Western States, all children of the great
State of Ohio, [Laughter.] Who can go beyond the Mississippi,
who can pass the line of Eastern Indiana and not find in all
Western States the children of the greal State of
»>f these
'ntleman said yesterOhio'.'
Away down in Louisiana
.

enormous

total of sixty million tons.
I notice from a recent
report that the building permits issued for the construction
of new buildings in Philadelphia in the month of September

HANKING SECTION.
amounted to $1,500,000, and in Pittsburg daring the same
month it amounted to about the same sum. Under the act
of March 11. 1900, we have had eight; new national banks
formed in Pennsylvania. We have to-day some 525 national
banks in the State, with assets of about $770,000,000. We
have two hundred and seventy odd State savings banks and
trust companies, with assets of over one thousand million
We bankers who have been in business for some
of dollars.
time do not always look with complacency upon the organization of new banks in our neighborhood, but still we recognize that it is the great prosperity and demand of business
that encourages their organization.
Even philanthropy is
prospering in Pennsylvania.
We have one gentleman who
has given very largely along those lines, and within the year
he selected a committee of gentlemen and said to them that
he wanted to formulate a plan for a great industrial school
to be located in Pittsburg, and that he would pay the cost
of it.
Well, these were modest, intelligent, public spirited
citizens, and they went to work to see what they could do,
and last week their plan was perfected. It involves the expenditure, including the endowment, of about fifteen million
dollars, and we know the gentleman that I have referred to
will keep his word.
When we go back from here it will be to tell our associates that we have enjoyed the very able addresses we have
heard, and that we realize more than ever what a great Association this is and what a wonderfully prosperous, beautiful
and hospitable city Milwaukee is. [Applause.]

RHODE ISLAND.

(No

SOUTH DAKOTA.

(No

TENNESSEE. (No
TEXAS.
Edwin Chamberlain,
ness in Texas

response.)
response.)

response.)

San Antonio

The banking

busi-

steadily growing.

In the organization of
national banks under the new law Texas leads with 90 banks,
or over one-eighth of the whole.
Our farmers have had some discouragements in the partial
failure of their crops, but on account of their prosperity last
year it is not affecting the general conditions of business in
is

the State.

Texas is as rich in natural resources, in deposits of minand materials, in agricultural possibilities, as any State
in the Union, and vastly richer than many States.
It is theYe that nature has assembled more closely than
anywhere else in the world the raw materials which supply

erals

industrial enterprise.
It is there where you will find within the next quarter
century the center of iron, steel and cotton manufacturing
With cattle, cotton, rice, sugar, timinterests of the South.
ber, coal, iron, granite, marble, zinc, oil and other natural
The unexpected
resources, what may one say of its future?
has happened to Texas in the matter of developing her natural resources.
The recent discoveries within her boundaries
of vast quantities of fuel oil, which is of value in the developing of the world's industries, has given an impetus to her
manufacturing interests which is destined to make her a
formidable competitor in the field of industrial enterprise to
some of the older States, which must pay the freight on the
raw material to the factory and the return freight on the

manufactured goods.

With
village

this fuel

shall be able to start factories in every

and hamlet that

located near any natural product.
to the cotton field, the rice mill

The cotton factory has come

foundry to the iron mountain, the
packing house to the cattle on the ranges.
We are learning by time and experience of capital its
Public sentiment
right to protection and fair treatment.
is now taking a calmer view than a few years ago.
Texas is
beginning to realize that to develop her natural resources
she must have outside capital.
The business and conservative element are demanding conservative issues instead of
to the rice field, the iron

wild vagaries and irrational prejudices.
Even the celebrated anti-trust law, which was aimed at
nothing less than the total exclusion of all combinations of
capital from doing business in the State and has so injured
its credit, has failed to check the movement of consolidation,
the concentration of human effort on great undertakings.
Visiting capitalists are assured that combinations of capital

would be welcomed

in the State,

and that

this law,

mercial supremacy due her in accord with her vast extent of
[Applause.]

area.

UTAH.

(No response.)
VERMONT. (No response.)
VIRGINIA. (No response.)

WASHINGTON.
Miles C. Moore, of Walla Walla Mr. President and gentlemen of the Convention I once read a story of Mark Twain
and Bill Nye, who were going to speak from the same plat:

form one night, and Mark Twain said " Ladies and gentlemen, I expect to talk to you until I am tired, and after I
get through Mr. Nye will talk to you until you are tired."
:

[Laughter.]

Now if I had my voice with me I might talk to you until
you were all tired. I seem to have lost my voice somehow,
but that is an affliction common, you know, to distinguished
men. [Laughter.]
I suppose you realize that a man who hails from the
" is at a very great disState whose name begins with "
advantage on an occasion like this, where he speaks on alphabetical call.
You were regaled yesterday with all the good
stories and you have heard about most of the wonderful
things in this country, and perhaps there is not much left
for me to tell you.
We have been told that some men are
born great, and some are born in Ohio.
[Laughter.]
However, being an Ohio man myself, I appreciate that.
Yesterday,
after the speaking and when you all seemed dreadfully tired,
I made up my mind that I would borrow the opening sentence in the great speech of Webster in reply to Haynes, and
I am not paraphrasing it, when I say that I should enter upon
no encomium on the State of Washington. She needs none;
there she is, behold her and judge for yourselves.
But, reflecting that you have all had a rest and that it has not been
the privilege of all of you to behold our magnificent scenery
of fertile valleys and plains and snow capped mountains, or
to look out upon the western ocean, beyond which lie half
the population of the human race, I want to submit a few
facts and stuff you with a few statistics, because we have
statistics up in Washington, too. Last year our farmers raised
20,000,000 bushels of grain.
Our lumbermen marketed
1,100,000 feet of lumber.
Our fishermen caught $3,000,000
worth of salmon. Our miners mined 2,500,000 tons of coaL
But it is not of present conditions that I wish to talk to you
so much.
It is rather of the rapid expansion of Oriental
trade.
Already twenty-five great ocean steamships run in
and out of Puget Sound engaged in the Oriental trade.
Against this 25 per cent. San Francisco, where my friend
Wilson lives, has but nine per cent. We want you gentlemen
to know that the seat of empire is going to be on Puget
Sound. Our frontier bankers used to say that the star of
empire had been arrested in its western flight and would
stand over the State of Washington, and there it would cast
its brilliant light forever.
I regret to say, however, that
one morning in May, 1898, it suddenly shot out somewhere

over the Philippines.
[Applause.]
and will take whatever benefit

tion

accept the situa-

you gentlemen get home and have leisure to do

so, I

it.

When

want you

to take down a map of the Pacific Ocean and study it
Note the position of Washington. Then cast your eye down
the Central American coast, the great countries that surround the Pacific Ocean. Look at them all and realize that

nearly one-half of the population of the human race occupies
those countries.
I want you to reflect what the wonderful
trade possibilities are when we have succeeded in breaking
down by peaceful methods the Chinese Wall and have established trade relations with those countries beyond the teas.
There are a few things that we are very much interested
in in Washington.
want liberal shipping laws.
do
not want to pour money into the coffers of steamship companies already rich. But we want laws which will stimulate
the building of new vessels and put this country's flag in the
lead upon the high seas.
need an international bank.
Some one said yesterday that trade did not follow the flag,
but that it followed the draft. All this will give us a comWhile we accept the responsibilities that
pact republic.
come with newly acquired possessions, I would like to say
that proper expansion is expansion within the proper lines
[Applause.]
of our western republic.

WEST VIRGINIA.

which has

heretofore frightened these corporations, was designed only
to prevent consolidation for the purpose of controlling prices.
The Lone Star State is pressing forward, though, to take
her place with her sister States, to share with them that com-

we can from

Gentlemen, West Virginia senda greetings
Delegate
to this Convention, and its assurance that although we do
not claim all the wonderful things on earth, yet we are
prosperous.
We have unlimited courage, plenty of energy.
:

BANKERS' CONVENTION.

96
and

intellectual

want

pecially

and forceful meu among us. What we esa little more money to develop our indus-

tries.

we who are here from West Virginia, as
who are here from other parts of the South, will
tv much benefited by this gathering by the addresses

well as
.

sure that

—

the

intercourse afforded us.

social

WISCONSIN.
John Johnston,

unfortunately

absent.
I understand that you do not need to be told much
about Wisconsin. You are here and you can draw your own
I
notice that our friend from Pennsylvania
conclusions.
has been studying the building statistics in this city. Let
me tell him that that is merely a small illustration of the
Visitors to St. Paul in Loncondition all over the State.
don, when they stand before the tomb of Christopher Wren,
who planned that majestic building, read the inscrpition

you wish to look for a monument look around you."

building itself

Wren.

a sufficient

here

;

monument

for Christopher

just look around you.

I do not wish to eulogize our men or praise our women.
notice that gentlemen from most of the States brag that
I am
their women are the most beautiful and the best of all.
I

glad to observe that the men of this country are advancing
I long ago believed with the poet that
to that position.
while we speak of the lords of creation, a mightier power is
behind the throne, and that the hand that rocks the cradle
[Applause.]
A gentleman
is the hand that rules the world.
from Connecticut said the other day that in his State they
were situated between the devil and the deep sea Boston
and New York and perhaps that was some reason why
When I came to Wistheir bank deposits were not larger.
consin the bank deposits were three dollars per head to every
Now they are 850 per head. We have
adult in the State.

—

Paul and Minneapolis on the one side and Chicago on
we are in pretty nearly as bad a situation as
our friend in Connecticut. We get very little money from
I think
outside most all of our deposits is our own money.
If you look at
onsin is very well situated physically.
the map you will see that Wisconsin stands with her feet
upon that great, rich and solid State of Illinois, while its
right hand always faces beautiful Lake Michigan, and its
brain is always kept clear and cool by the waters of Lake
Superior.
So I think physically its location can hardly be
surpassed.
Wisconsin means the " Gathering of the waters."
St.

the other, and

;

the

it
may mean the gathering of the peowe have a more cosmopolitan population

think in time, too,

ples, for I believe

We have here people
than any other State in the Union.
from all the central and northern provinces of Enropc and
a large immigration of the Eastern States of this country,
and, although we have as much foreign population as any
State, I am proud to say that Wisconsin, in proportion to
its population, gave the largest majority for honest money
of any State in the Union.
[Applause.]
So if we are foreigners, we have not the crank notions that those in a great
many States have who do not have so many foreigners. Wisconsin, while increasing in material wealth,

is not forgetful
of the fact that mere wealth does not constitute a great peohave a wonderful school system, beginning with the
ple.
kindergarten and ending with one of the finest universities

And our school system pays, too and because
pays our Legislature is always liberal in voting ample
funds to sustain it.
Gentlemen, I need not occupy your time further. We
have been delighted to have this convention here, and for a
laid over convention we tried to make it as successful
We hope it won't be many years before you
as possible.
opportunity to entertain you, and then you
again gi
[Applause.]
will see just what we can do.
;

WYOMING.

(No respon

VIRGINIA.
Habliston, of Richmond Gentlemen, I am taken
by surprise in being called upon to respond for Virginia, and
\ can only say I am glad to meet the bankers here from all
over this country. We were glad to welcome you to Richmond last year, and we shall be glad to welcome you there
again.
Virginia is enjoying to the fullest sense the general prosManufacturing and other industries
perity of the country.
I
are prosperous. The banks of the State are prosperous.
do not know what further I can say. We would like to see
you in Virginia again. We will be glad not only to have you

W. M.

was

introduced, but

During
an important reso-

learn that

was not

some misunderstanding,

to the

pre-

Execu-

know

that our national bank
system is one that should be lathered. As I said two
days ago, the charters of more than 1,700 national banks
of the United States will expire within the next two
tive

Council.

all

and it seems to me— and I think I voice the sentiment of some members of the Executive Council—that

years,

a resolution treating on this question should be introduced.
I therefore present the following
resolution

and ask unanimous consent that

be referred to the
request that immediate

Executive Council with the
action be had upon

it:

Wliereaa, More than 1,700 national bank charters will expire within the next two years, and realizing that it is for the
best interests of this country that they should be extended,
Resolved, That we, the delegates to the American Bankers'

Association in Convention assembled, urge the various representatives in Congress from the different States to pass such
laws as will continue the charters and life of such National
banks, as was done in 1882
also further
Resolved, That a copy of this resolution be sent to every
member of Congress.
;

The President: Gentlemen, you have heard the
lution offered

by Mr. Dimse, of

New

York.

reso-

seems

be upon a subject that concerns vitally many of our
members. Is it the pleasure of the Convention that it
be referred to the Executive Council for immediate
report? If so, all in favor of that course will signify
by saying aye; those opposed, no.
Carried.

The President: The Executive Council

will please
take this resolution under immediate consideration.

EXPRESS COMPANY TAXATION.
Mr. Hillyer, of Georgia: I introduced a resolution on
Tuesday which by consent of the house was referred
to the Executive Council for action.
I would be glad
to know what action the Executive Council has taken
on that resolution. It was a resolution, you will remember, in regard to the action of the express companies, and asking that the report of the committee
be received and approved.
The President: Was not your resolution amended by
Mr. Hill?
Mr. Hillyer: It was referred to the Executive Council upon his motion, and I consented to that.
The President: The Chair would state that the resolution was referred to the incoming Executive Council
for action.

in the land.

session of the Convention

first

sented, through

Milwaukee: Gentleman, the speaker

the virtues of Wisconsin

selected to extol

" If

Henry Dimse,
lution

Applause.]

The

EXTENSION OF BANK CHARTERS.
of New York: Mr. President:

all

we have heard and
I

come yourselves for a visit, but we should be glad if you will
come and live among us. We will assure you always and at
any time a most hospitable welcome. [Applause.]

Mr. Hillyer: That
to get.

was not

exactly the information

wish

willing to have the resolution referred

incoming Executive Council, and I do not think
it was so understood by the members of the Convention,
although if I am wrong in this I would like to be corrected. I thought it was referred to the present Executive Council, so that it might be reported upon during
to the

this meeting.

The President: The Chairman
cil is

not at the

moment

of the Executive Counand if Mr. Hillyer

in the hall,

matter up again when Mr. Hardy comes
perhaps he can get the information ho desires more

will call this
in

accurately.

PROPOSAL TO PRINT MR. STICKNEY'S PAPER.
Mr. Chandler, of Kansas: After the reading of Mr.
Stickney's address yesterday

we were

somewhat

a hurry for adjournment and, while we passed a motion thanking him for his address, I feel we should
go a little further. We that heard the address were all
greatly edified by it. We were benefited by it. I feel!
however, that this address should be put in a form so
that it could get before the bankers of the entire coun-

BANKING SECTION.
and also before the members or' Congress. 1 think
one of the most important questions Ave have ever
bad before us. and I feel that this is an opportune time
to take up the question and that we should press it to

try

it is

final settlement.
I

therefore

move

that

the sense of this conven-

the association be and they
are hereby extended to Mr. Stickney for his masterly
presentation of a subject so important to every class
tion

and that the Secretary be and is hereby
have the address published in pamphlet
and distributed together with this resolution

of business,

form

thereon.

The motion was seconded from all parts of the hall.
The President: This motion would call for an appropriation and action by the Executive Council.
Mr. Chandler: Then I offer the resolution and rego before the Executive Council with diupon it immediately.
Herington, Kansas: I would suggest
of
S. G. Cooke,
that Mr. Stickney's plan may not only do away wita
bank crises in this country, but it may prove to be tht.
system that we are all looking for and have been lookquest that

rections to report

in the West have felt that
ing for these many years.
while we lacked any sort of a system, yet we did as

we could under the present laws, and that the
system had not yet been attained. On behalf of
the West I want to say that we heartily approve of the
plan outlined by Mr. Stickney, and I trust that the
campaign of education which Mr. Chandler's motion
contemplates will result in the adoption of a plan that
will greatly further the economic development of this
well as
ideal

country.

The President: Gentlemen, as many as are in favor
of this motion will say aye; those opposed, no.
Carried.
The President: The Executive Council

will

please

take this resolution in charge.

RESOLUTION REGARDING BANKRUPTCY LAW.
Davis, of Georgia: I have a resolution to present and I think its importance warrants the consumpJ.

tion of a

few moments

in this

meeting.

with

reference to the repeal of the bankruptcy law:
Whereas, The bankruptcy act has had time to serve the
purpose intended by Congress, to give relief to the honest, oppressed debtor and
Whereas, Its further operation will entail loss upon both
the creditor and debtor and the general public by reducing
lines of credit, restricting business and decreasing its general
volume, thereby checking the wonderful development of the
country promised through right conditions therefore be it
Resolved, That this Convention, through the
Executive
Council of the American Bankers' Association, memorialize Congress to repeal the bankruptcy law.
;

;

The President:
this

formerly Comptroller of the Currency of the United
States, and now President of the Commercial Bank of
Chicago.

Assets Currency.
[Mr. Eckels' paper in full will be found on pages 55 to 58
of this Supplement.]

that the thanks of

directed

the wish of the Convention that

resolution be referred to the Executive Council?

If so, as many as are in favor of that course will say
aye; those opposed, no.

Carried.

The President: We will now listen to an address by
Mr. P. C. Kauffman, of the State of Washington, on
" The Financial and Commercial Future of the Pacific
Coast."

The Financial and Commercial Future
Pacific Coast.
[Mr. Kauff man's paper will be found in

full

of the

on pages

58 to 61 of this Supplement.]
The President: We shall next have the pleasure of
an address by Mr. Walter D. Coles, referee in bankruptcy, of St. Louis, Mo., entitled "

The Federal Bank-

rupt Law."

The Federal Bankrupt Law.
[Mr. Coles' paper in full will be found on pages 61 to 63
of this Supplement.]
The President: Ladies and gentlemen, we shall now

have the pleasure of listening to our long time friend,
a gentleman who has for a considerable length of time
been a friend of the banks—the Hon. James H. Eckels,

RESOLUTIONS OF THANKS.
Le>wis V. F. Randolph (President of Atlantic Trust
New York: Mr. President, I want to utter

Company;,

one word of earnest protest against the doctrine which
we have just now heard promulgated of free and miscellaneous and dangerous banking. I do not think we
should countenance it. (Some applause, mingled with
hisses.)

Pugsley (Member of Congress from
Peekskill, N. Y.): Mr. President, I move you, sir, that
the thanks of this Convention be tendered to Mr. Eckels
for his eloquent and able address.
This motion was seconded from various parts of the
Cornelius

house.

The President: Gentlemen, all in favor of tendering
a vote of thanks to Mr. Eckels will please rise. I do
not suppose there are any who are opposed.
Mr. Walker Hill, of St. Louis, Mo.: Yes, Mr. President, put the negative also. There may be some who
are opposed.
The President: Those who are opposed to this vote
of thanks will please rise. (No one rose.) There, 1

thought so. It is an unanimous vote.
Mr. Randolph: I did not vote because I am opposed
to such a dangerous doctrine.
Mr. Hillyer, of Georgia: I move that the thanks of
this Association be tendered to the Milwaukee Club
for courtesies extended; to Mr. Frank G. Bigelow and
wife for the reception tendered to the members of the
Association at the Deutscher Club; to the Milwaukee
Bankers' Association for the provisions made for the
entertainment of the Convention; to the Chamber of

Commerce, the city officials, and the Milwaukee Electric
Railway & Light Company for courtesies extended to

members of the Convention; to the ladies of Milwaukee for the social enjoyment afforded the wives of
the

delegates, and to the press for its full reports of the
proceedings of this Convention.
The motion was seconded and adopted by a rising
votei

COMMITTEE ON INTERNAL REVENUE TAXATION
CONTINUED.
The President:

Is there any unfinished business?
D. Powers, of Kentucky: The Committee on
Internal Revenue Taxation made a report yesterday,
through Mr. Hepburn, but the committee was not continued. I now move that the committee be continued,
owing to the fact that some very important matters
have been passed by this Convention. The motion was

Mr.

seconded and carried.

MEMORIAL TO PRESIDENT McKINLEY.
The committee

whom was

referred the matter of

preparing a suitable memorial on the death of President
McKinley reported through Mr. T. C. Kauffmann, of
Tacoma, Wash., as follows:
We, the members of the American Bankers' Association, are
saddeDed by death's removal of our honored Chief Executive,
William McKinley. His fame rests securely in the nation that
he loved and helped to serve.
We acknowledge to the fullest our obligations to his memory, and desire to put on record this simple testimony to his
high character and pure life.
Most deeply do we sympathize with Mrs. McKinley and his
family, who have sustained a much greater loss, and may this
in some smail degree testify to our love and respect for him
and our sorrow for his death.
(Signed)

P. C.

Kauffmann,

Myron

Hbrbick,

R. MULVANB,
C. A. Pugsley,

W. Whiting,
Committee.

This memorial was adopted by a rising vote, and a

HANKERS' CONVENTION.

copy of the same, directed

be forwarded

Mrs. Me-

Kinley.

—
Cashier Harrisburg National
Rhode Island —
Wells, President Rhode Island Hospital
Trust Company, Providence.
South Carolina — W. Jones, Cashier Carolina National Bank,
Columbia.
Dakota — B. A. Cummins, Cashier First National Bank, Pierre.
Tennessee — N.
Le Sueur, Cashier American National Bank,
Nashville.
Texas—
Miller,
President Belton National Bank, BelUtah — John E. Dooly, President Utah National Bank, Ogden.
Vermont —
Smith, President Burlington Savings Bank,
Burlington.
Virginia — H.
Jones, President Dominion National Bank, BrisWashington — N.
Latimer, Manager Dexter, Horton & Co.,
Seattle.
West Virginia —
R. Warfield, Cashier Elkins National Bank,
Elkins.
Wisconsin — Geo.
Field, Cashier First National Bank, Ripon.
Wyoming—
Whipple, Cashier Stockgrowers' National Bank.
Hawaii —
Fisher, of Bishop & Co.
Pennsylvania W. L. Gorgas,
Bank. Harrisburg.
II.

REPORT OF COMMITTEE ON NOMINATIONS.
The President: The report of the
Nominations is now in order.

Committee on

Robert '. l.vury, Chairmnn.
The committee appointed to nominate officers of the American Bankers' Association respectfully beg leave to report as
:

rOB PRESIDENT

Myron

Herriek. President of the Society for Savings, Cleveland. Ohio.
T.

FOR FIRST VICE-PRESIDENT

roa members of the executive council for three tears
G. Mather, President American Trust Company, Cleveland,
:

Wm.

Ohio.
II.

Swiuuey, President First National Bank, Kansas City.
Pries, President Wachovia L. and T. Company, Winston,

Kauffman,
Wash.

Cashier

Fidelity

Trust

Company,

Tacoma,

for vice-presidents:

— B. Young, Vice-President Kufaula National Bank,
Kufaula.
Alaska —
M. Behrends, of B. M. Behrends' Bank, Juneau.
Arizona — Wm. Christy, President Valley Bank, Phoenix.
Arkansas — John G. Fletcher, President German National Bank,
Little Bock.
California — Jas. K. Wilson, President San Francisco National
Alabama

tol.

II.

Bank, San Francisco.
Colorado J. A. Hayes, President First National Bank, Colorado

—

N. C.
P.

Si\,

II.

Va.

folk.

Caldwell Hardy, President of the Norfolk National Bank, Nor-

1*.

ton.

follows

II.

The committee composed of delegates from the various State
associations of banks and bankers throughout the country beg
e to submit as their nominees for membership for three
years on the Executive Council the following names:
John L. Hamilton, Jr., Cashier Hamilton & Cunningham, Hoopston,
J.

111.

Sullivan,
Ohio.

President

Central

National

Bank,

Cleveland,

Ralph Van Veehten, Cashier Cedar Rapids National Bank, Cedar
Rapids, Iowa.
Cashier Franklin Nat. Bank, Philadelphia, Pa.
Frank G. Bigelow, President First National Bank, Milwaukee,
Wis.

J. R. McAllister,

Springs.

—

Jabez Amsbury, Cashier Danbury National Bank,
Danbury.
Delaware John II. Danby, Cashier Union National Bank, Wilmington.
District of Columbia
Chas. C. Glover, President Riggs National Bank, Washington.
Florida— I'. ('. Horton, Cashier American National Bank, PenConnecticut

—

sacola.

—

Walter, Cashier National Bank of Brunswick,
Georgia
I).
Brunswick.
Howard Sebree, President First National Bank, CaldIdaho
I'..

—

well.

— EL

Parker, Cashier State Savings L. and T., Quincy.
Eitel, Vice-President Union Trust Company,
Indianapolis.
Indian Territory Jas. R. McKinney, Cashier Durant National
Bunk, Durant.
Iowa J. L. Edwards, Cashier Merchants' National Bank, BurIllinois

Indiana

The President: Gentlemen,

—

lington.

Q. Chandler, President

('.

Kansas National Bank, Wi-

chita.

— Clifton Rodes, President Citizens' National Bank,
Knox, President Bank of Baton Rouge,
Louisiana — Wm.

Kentucky

II.

Louisville.

Baton Rouge.

—

Maine E. Stetson, President First National Bank, Bangor.
Maryland H. B. Wilcox, Cashier First National Bank, Balti-

—

more.
Massachusetts D. G. Wing, Vice-President Massachusetts National Bank, Boston.
Michigan I*. W. Briggs, Second Vice-President Bank of Saginaw, Saginaw.
Minnesota A. A. Crane, Cashier National Bank of Commerce,
Minneapolis.
Mississippi
C. R. Sykes, Cashier First National Bank, Aber-

—

—
—
deen.
Missouri —
Montana — M.
Nebraska —

Thomas, Cashier Bank of Albany, Albany.

A. Arnold, Cashier First National

Bank, Billings.
Bank, Grand

Bentley, Cashier First National

Island.

Nevada— H. M. Gorham,

President Bullion and Exchange Bank,

Carson City.

—

Wm. C. Walton, Cashier
tional Bank, Portsmouth.

New Hampshire

New Jersey— Samuel

II.

New Hampshire

Na-

Blackwell, Cashier First National Bank,

Princeton.

—

New Mexico

J. M. Cunningham, President San Miguel NationBank. Lai Vegas.
York- G. S. Whitson, Vice-President National City Bank,
al

New

York.

North Carolina— John
Will

Brnton, President First National Bank,

—

North Dakota C. B. Little, President First National Bank, Bismarck.
Ohio T. c. Stevens. Cashier Merchants' National Bank, Toled
Citizens' National Bank.
Oklahoma Otto H. Bcbnttee,

—

Oregon

—

necessary to vote

nominees named, and they were declared elected.
The President: Colonel Herriek, I present to you this
badge of your office, which is the most valuable gift
within the power of the American Bankers' Association
Gentlemen, I commend you to the best
to bestow.
(Applause.)
efforts of your able President.

— Henry

—

the Secretary cast the vote of the Association for the

REMARKS OP PRESIDENT-ELECT MYRON

Beno.
II.

land.

Cr,rb

ident First

National Bank, Port-

HERRICK.

—

Kansas

nominees by ballot.
On motion of John R. Mnlvane, of Topeka, Kansas,

for these

President-elect Herrick:
to express

difficult to

find

words

appreciation of this renewed expression

of your confidence and friendship.
We are most fortunate in this twenty-seventh meeting. I never have
witnessed any larger attendance. We have been fortunate also in being able to give expression to the country in this most signal manner through Mr. Stickney,
Mr. Gage and Mr. Eckel's addresses of the dangers
that are lurking in our financial system. It is often the
case with the banker who stands behind the counter
that he does not fully know what takes place on the
outside, as it needs, as Mr. Gage said, some strong hand
When we know, then the Assoto show us our defects.
ciation has the courage to lead, and if we have defects
in this system, as I am sure we have, we have the
courage and we have the ability when our attention is
called to them, as we have an opportunity through an
association of this kind, to bring the full power of the
Association to bear upon Congress to correct the evil.
We have had in the new responsibilities that have been
so well extolled to us, that are coming upon this country,
as bankers— those responsibilities have come upon all
of us as citizens— and we have had in the past four
years a lesson upon the duties of citizenship which is
a great blessing to this country and whose power and
force will be felt for generations to come.
We are
responsibilities.
assuming those
Wo have had a better
consciousness of the duties of citizenship which will
be lasting and will enable us to meet those obligations
which baye come upon us. We have a wise man presiding at Washington who is filled with Americanism
and patriotism, and who is able to lead us on to those
greater glories, and a man who has our confidence that
he will do it. (Applause.)
Gentlemen, what is your further pleasure?

BANKING SECTION.
PRESENTATION OF PUNCH BOWL TO RETIRING
PRESIDENT ALVAH TROWBRIDGE.
On motion of Mr. Johnston, of Milwaukee, the thanks
of the Association were tendered to the retiring President for his able performance of the duties of the office
during the past year.
Mr. Walker Hill, of St. Louis, in behalf of the Association, presented to the retiring President a handsomely engraved solid silver punch bowl.
Mr. Trowbridge returned his thanks in these words:
Gentlemen, I am too much overcome to be able to frame
a proper acknowledgment of this handsome gift.
I
can only say that as long as there are any Trowbridges
left they will say that in Milwaukee in 1901 one of
the family met a great many friends and he did not
know how to conduct himself, and this will be a memorial of the fact that he had more friends than any one

Gentlemen, again

else.

heart.

President Herrlck: Gentlemen, I present to you ViceCaldwell Hardy. Mr. Hardy, I present
to you the pin which I have worn for the past year,
and I can only say that if you are diligent in your duties
you will some day be President. (Applause.)
Vice-President Hardy: Mr. President and gentlemen: I thank you for the honor bestowed upon me. It
is beyond my deserts, but nevertheless it is a great
gratification to me, and I will endeavor to fulfill the
(Apduties of the office to the best of my ability.
plause.)

ADJOURNMENT.
President Herrick: If there is no further business
come before the Convention, I declare the twentyseventh annual meeting of the American Bankers' Assoto

ci.it

ion at

an end.

BANK OF THE CITY OF
NEW YORK OFFERS TO

DE-

POSITORS EVERY FACILITY
BALANCES,

BUSINESS AND RESPONSIBILITY

thank you from the bottom

1'ivsident-elect

THE FOURTH NATIONAL

WHICH THEIR

(Applause.)

WARRANT.

Trust Company Section
American Bankers' Association,
Annual Meeting, Held

Fifth

in the

City of Milwaukee, October

90 J

INDEX TO TRUST COMPANY PROCEEDINGS.
Abroad Analogous

Business

Powers
Trust

Pages
Pages
Pages
Pages

Trust Cos.

of Fiduciaries Outside the State

Company Forms

Detailed Proceedings

The Business

Address

104 to J05

J05 to 106

Report of Secretary
Report of Executive Committee

107 to 112

President of

which a casual observation of

its title in

the

lead one to expect.

As a matter of fact, and in the strict sense of the
term, there are no trust companies in Europe or the
Orient and none in the Latin -American countries, barring the

Mexican Trust Company, a purely American

foundation, and one or two others, all in a nascent state;
nor, so far as I am aware, have corporations anywhere

some portions of Canada yet undertaken to do. in a conjoint and aggregate
form, any substantial portion of the work which is customarily and regularly performed by trust companies
in our midst. Indeed, the ideas underlying corporate
outside of the United States and

tiduciaryship are the product of our special development, at once vigorous, rapid and intelligent, in the

realms of industry, commerce and finance, though the
sources whence these ideas have drawn their inspiration may be easily discovered not only in the teaching but
also in the practice, of the financiers of the Latin race,
to whose superb gift of analysis and co-ordination, and
to whose profound knowledge of basic principles the
modern business world of both hemispheres is indebted
for

its

But,

and its most successful methods of
management.

best theories

exploitation and
if

actual conditions

tute direct comparisons,

make
is

easy,

impossible to

and

let

insti-

us hope that

be somewhat profitable, to observe in what wr ay
the functions analogous to those of American trust companies are performed in the older world.
And here, on the very threshold of our subject, it
becomes necessary to remark that long centuries of sincere and enthusiastic devotion to the principle of concentrated, as opposed to divided or collective, authority,
and the sentiment, sustained as well by habit as by tradition, of respect for personal prominence and ability
and of confidence in the leadership of the specially
trained and experienced few, have operated, In substantially ever part of Euro])*', to cast upon chosen indiit

Address

Welcome

The Corporation Trust Company

asked to speak is one
abounding in interest, and concerning which a great deal
may lie said that is eminently suggestive and practically useful, tbough it cannot be treated in precisely

way

Page 107
Page 107
Pages 107

to 108

Page 103

Analogous to that of Trust
Companies in the United States.

The subject upon which

programme would

in Foreign Countries

By Hon. Charles Francis Phillips,

the

Welcome

J00 to 103

may

viduals those duties and responsibilities which more
and more each day become, within our own confines, the

of Delaware,

New York

City.

prerogative of associated effort and of combined obli-

Even in England, which has given us, along
with our language, so large a part of our laws and customs and so many of the components of our national
character, the individual trustee is in such esteem as to
make the success of corporate trusteeship on a very
gation.

large

scale,

at least

for

the

immediate present,

ex-

tremely doubtful. You all remember, I fancy, the effort
made by J. Spencer Balfour, about the year 1885, to
turn to account, through the Trustees, Executors and
Securities Company, the idea which finds so ample and
so profitable an expression in many of the financial institutions of our great cities; and doubtless you remember quite as well the absolute failure of that company
to realize its purpose, outside the field of simple promotion.
For a while it promised exceedingly much under
the auspices of those who had created it, and its founders' shares, whose par value was only ten pounds, were
sold, when they could be bought at all, for the enormous
sum of eight thousand pounds; but lack of achievement,
enforced modification of plan and complete reorganization followed only too soon.
In England, and, generally speaking, throughout
British territory, great enterprises are sustained far
more largely than here by credit, independently of direct security; and in all those sections of the world the
moral risk of an undertaking, which has always to do
with its promoters and managers, and the inherent merit
of the scheme itself as a basis of development or improvement, are more closely scanned and more seriously
weighted than the possible lien of the values emitted.
II' nee, English railroad and other industrial mortgages,
which, if these were very numerous, would suggest the
formation of trust companies on the American plan, are
scarce commodities in the market, various sorts of debentures and preference shares taking their place in obedience to the instinctive belief of the business community
that personal worth and responsibility, coupled with

thorough knowledge and wide experience, are, as elements of protection, superior to material and legal guarantees in the shape of fixed encumbrances. It may
therefore be said that the trust companies of the British
Empire are. in effect, its men of character, skill and
wealth, whose names mean more to the investing public

TRUST COMPANY SECTION.
than liens of any sort.
is

Much

fiduciary work, of a
doue by banks; but it
done as an incident to their general business and not

qualified character,

is,

of course,

as a specific undertaking.

In judging the situation as it stands in relation to our
Anglo-Saxon brethren, we must, however, remember
that England, which is the soul of British finance all
over the globe, is an ancient, a small and homogeneous
country, with traditions that are, in many respects,
more powerful than laws, and which has not to face, as
this country must, the problems arising from the absorption of foreign peoples, the rapid increase of population, the restless aspirations of the multitude, the
ceaseless development of a practically unlimited home
territory, the incessant creation of new enterprises, and

which are inseparable
from the freshly assumed responsibilities of a world
power. Ilence, although, everywhere and always, it is
the individual mind, moved by providential vocation,
that guides human destinies, whether they be material
or moral, and however they may be influenced by what
important political issues

the

call

general conditions,

nevertheless true that in

largely dominated as it is by the direct
the
masses,
the aggregate man and the aggreaction of
gate form of effort have a prominence which they nowhere else enjoy, whether in the domain of government
or in that of economies. Other countries may, sooner or
this country,

advantageous to imitate many of our instiand our trust companies among the rest; but

later, find

tutions,

we know

the trust

company

main for

a long while a distictively

here

likely to re-

American form of

business facility.
It is true that a few of our greatest trust companies,
as, for example, the Guarantee Trust Company of New

York, have established branches in London and some
other foreign cities; but the officers of these institutions
assure me that the operations of their branches are,
from necessity, confined mainly to the issue of letters of
credit and to the purchase and sale of exchange and of
current securities designed for investment. These transplanted financial models may, however, serve as educa-

and so. in the long run, do a work for
which they were not specifically or even consciously estional factors,

They have, in fact, helped to stimulate the
on a considerable scale, of safe deposit vaults
and like conveniences; though they have failed thus
far to give any noticeable impulse to the extension of
fiduciary work through corporate mediumship.
As to the provisions so necessary to be made, in an
active community, for the care of long time deposits,
both the English and Continental banks and similar institutions have, from time immemorial, done more than
tablished.
creation,

has ever been undertaken by either the banks or the

America, and have done it more
broadly, more efficiently, more cheaply and more satisfactorily, thus furnishing us Avith precedents eminently
worthy of respectful study.
In Germany, Austria and some other parts of Continental Europe there exist, in great numbers, what are
called mortgage banks, institutions created to aid agriculture, which must always need considerable funds for
trust

companies

uncertain periods, and to promote the interests of rural
and urban land owners, large and small; and these
banks, which subsist on their own capital and on deposits received under special conditions and paying a

undertake, to a certain extent, some classes
work which are commonly assumed by trust companies here, such as the receipt, exchange and distribufair return,

tion of securities in cases of

organization, reorganiza-

and consolidation; but their fiduciary activities are
It is in
numerous nor of broad application.
France that we find more fully developed than anywhere else the idea of such intervention as here constitutes the most beneficial function of trust companies
and kindred institutions; and, since the time allotted
to this paper is necessarily very restricted. I shall ask
you to permit me to confine myself almost entirely to a

tion

neither

101

view of what French finance has achieved in the field
which it is my present duty to hastily explore, it being
premised that trusts arising out of the private relatious
of life, such as those of executor, administrator, guardian, committee in lunacy and the like, are, in France
and in other parts of Continental Europe, even more
than in Great Britain, relegated to the individual, and
exercised by a limited class of persons, whose ability,
knowledge, experience and probity mark them as preeminently qualified for tasks where delicate and sympathetic appreciation are often as essential to ultimate
and thorough success as are business tact and watchfulness and careful legal procedure.

and in some other counboards of trade, chambers of commerce and
other commercial and quasi governmental bodies, often
render not only inexpedient or unnecessary, but even
impossible, certain trusts which, in our midst, constantly
arise from the exigencies of ordinary business, such as

The

tries,

role assigned in France,

those relating to bankruptcy receiverships and liquidation;

and so

happens that what

we have mainly

consider in the present case are those trusts, direct or
implied, which spring from economic development, the
alternate concentration and distribution of capital, and,
in

a particular sense, the regulation of credit, a thing

even more vital ya old than in new countries, in dense
and highly organized communities than in those of relatively scant population and less complicated formation.
And here it becomes imperative to remark that our own
country, so justly esteemed the model of liberal and
progressive government, the home of general and unstinted opportunity, and the friend of broad and vigorous initiative, has proven itself to be, in respect to the
common financial needs of all who must work for a
livelihood with either head or hands, the least democratic of the great civilized powers. To so large an extent is this true that one may safely assert that what
is somewhat difficult of attainment here by men of tolerable substance, is, in France, within the easy and constant reach of the most insignificant of toilers. Bet an
ordinary workman apply to one of our large trust companies for a mortgage loan of three or four thousand
dollars on his modest tenement, or let a petty trademan seek to secure from it in permanency such accommodations as will enable him to fully develop his
humble enterprise, and the truth of my statement will
be quickly confirmed. The fact is, that the whole machinery of higher finance in France, as represented by
public institutions, forms a single trust company of un-

bounded

responsibility, acting, in

many

respects, gratu-

itously for its beneficiaries, imprinting with its moral
miarantee the bulk of all the securities which constitute
the savings of the people and the reserve power of the
nation, and, by its highly ramified operations and by the
facilities and immunities which flow from them, making
useless many of the forms of procedure which give
rise to the work and assure the profits of the enterprising trust companies which are to be found in every
quarter of our own land. This will scarcely be believed
without illustration; but illustration is more than easy,
and it is likely to be instructive.
One of the most conspicuous functions of our trust
companies, apart from such as are technically fiduciary,
is to gather together, whether through interest bearing
accounts, certificates of deposit, debentures or otherwise, the long time funds of the community, and those
which are not regularly needed in the quick turn over
of daily commerce, and to lend them on the pledge of
securities, on mortgage or in some equally safe manner,
to those who require cash for legitimate speculation, or
who, in construction or development, or with a view to
family settlements, must expend an amount of money
which cannot be prudently withdrawn from business
operations or obtained, without inconvenience or disadvantage, from the outright sale of real property or of
special investments. This function is certainly a most
useful one, and in the performance of it an immense

BANKERS' CONVENTION.

102

volume of funds is wisely and beneficently employed;
but whether the trust company discharging it be ;i small
one, with two or three millions at its service, or a large

him the few thousand, or it may be only the few hunand upon terms as good as can
be got by the great proprietor who wishes to mortgage

commanding fifty or a hundred millions, or even
more, the policy pursued is. with Slight exceptions, always the same. .Money is taken and lent in blocks of
thousands; and the larger the blocks, consistently with
the Circumstances of the ease and the prudent conduct
of affairs, the more completely the management is satisfied.
Depositors and borrowers who deal in petty sums
are respectfully referred to the savings banks and the
building societies, admirable institutions in their way,
but frequently cumbersome, and, in the scientific sense,
always far from economical. But this is not the case in
France: and there, as the result of a more direct and
democratic policy, the corporations most analogous to
our trust companies, such as the Societe Generate, the

for

one.

Credit Lyonnals, and the Credit Fonder, have obtained
proportions so large as to make even the most pros-

perous of our trust companies, and of our banks as
well, seem very small indeed.
Let us examine for a moment the methods of the
Credit Fonder, an institution eminently typical, which,
alike in good times or bad, can easily furnish a hundred

moment's notice,
any enterprise or series of enterprises deserving it,
and whose mortgage loans amount to probably not less
than Ave or six hundred millions of dollars, scattered
all over France in sums varying from a hundred to sevmillions of dollars, at substantially a

This institution has, of course,
very large capital, but one wholly inadequate to its

eral millions of francs.
a

immense

however, so thoroughly
proven its devotion to the common good by aiding the
community in detail and the public as a body, and by
offering, year in and year out, to even the humblest
operations.

has,

dealer the most favorable rate for his

little

deposit,

and the readiest succor in his small wants, that, when
it needs money, as it often does, it can obtain it in unlimited supply by the mere issue of its long time debentures on no other security than its own reputation, and
thus stand prepared to advance the funds which build
up enterprises that must be slowly developed, like railroads and great industrial establishments, or to respond
the never ceasing demands of the great army of
workers whose systematic industry and thrift, thus supplied with capital, have made France, in a broad sense,
and in proportion to its population, the richest country
in the world, in spite of wars, a vast standing army,
heavy taxes and occasional commercial catastrophes
like that of the Panama Canal.
to

The

securities

virtue of

its

and which

which

are,

no matter what

conditions, scrutinized by
of a call loan
times,

come

this

institution

co-operation in the upbuilding of prosperity,

sells at

may

be the prevailing

as carefully as the collateral

would be scrutinized by us

critical

a slight profit to the great public, who,

moral guarantee, not only buys In a single
day the whole of each issue, but in the majority of
PS tenders impatiently from five to twenty times the
amount of the emission. Whoever, during a visit to
Paris, has chanced to enter the Rue des Capucines, on
an offering day of the Credit Foncier. will recall very
vividly the impression made upon him by an orderly
crowd of ten or fifteen thousand men and women, of almost every class and condition, calmly waiting, hour
after hour, in the hope of getting a small allotment of
tin- day's securities, either for themselves or those who
depend upon them, and confiding in the institution
which they know so well for that wise forethought and
positive protection Which widows and minors and
cestui* tin- trust would here bare a right to demand
from the fiduciary corporations, which are governed by
ourselves and our associates. When there is question
of borrowing instead of buying, the humblest city householder, or the remotest fanner owning a few bed
of land, is well aware that the highly perfected system
wonderful institution will promptly secure for
relying on

its

dred, francs he needs,

millions of francs

his vast factory,

his

luxurious

demesne of his chateau. He probably does not know what a trust company means, but
lie knows perfectly well, in his own way, what a trust
company is, for his knowledge is drawn from personal
experience, and, though the trust which operates in his
favor is not a legal one, but is voluntarily assumed and
hOtel,

or the wide

administered without direct authorization, he sees that
it gives to him
the best of securities as an investment
for his savings, the highest price when he wishes to
convert his holdings into cash, a constant market for
whatever he must sell, a borrowing capacity which, in
the measure of his wants, is as good and as certain as
that of the richest banker, and above all, that assurance
of their treatment and watchful interest which permits
him to get not only what he wants and when and where
he wants it, but to discharge his obligations quickly or
slowly as he may wish, and either in a single sum or by
that kindly process of amortization through which the
principal of a debt is paid while one seems to be paying only the interest.
When we approach other establishments than those
of which the Credit Foncier is the type, and enter a field
where banking, in the ordinary sense, presents itself as
the main feature, the same principles apply and the
same facilities exist. Institutions like the Credit Lyontiais and the Society General, in order to meet the wants
of all, maintain not only great central bureaus in the
principal cities but numerous branches all over the land,
as do many of the British banks, and deal as cheerfully and as courteously with a matter of a hundred
francs as with one of a hundred thousand, each branch
having all the facilities of the main office, and serving
as an automatic and costless distributer of capital, without those disturbances which are here incident to the
compulsory flow of currency which occurs whenever the
crops must be moved or some unusual condition be met
at points distant

from the

money

financial centers.

The

inces-

hands of these institutions, its elasticity and fluidity under their system of
management, surpass anything to which we are accustomed in this country; for, practically speaking, except
as against operations deemed to be unwise or dangerous,
no honest borrower in town or country is ever refused
sant turn over of

what he may reasonably
trying. Of course, such

in the

ask, be the times prosperous or

covering so broadly
the field here occupied in part by banks and in part by
trust companies, and administering, absolutely without
limit, to the needs of all classes, and to active and continuous as well as to casual and incidental business,
would not be possible if our methods were observed, for
at times the resources of any one of the typical institufacilities,

have named might be taxed to an extent which,
under our system of management, would bring about
either an abrupt curtailment of facilities or possible disaster. But in France even the largest financial institutions look upon rediscount and mutual accommodation
as a most proper and advisable source of relief under
all circumstances, and banks and similar establishments
whose capital, surplus and deposits range from one or
two hundred millions of dollars to twice this amount,
and which arc therefore stronger than any of the banks
of our own country, and are certainly entitled to be
jealous of their credit and standing, think nothing, at
any time, of rediscounting their loans with each other
or with the Bank of France to the extent of many millions of francs, thus giving to their resources a liquidity
and a responsiveness to passing conditions the lack of
which in our own system all of us have felt on many
tions I

This solidarity of operation and of policy,
with the system which makes the credit of
these Institutions equal to cash for operations large
and small, and throughout the country and all of its
dependeucies as thoroughly as in the heart of Paris, is
occasions.

coupled

TRUST COMPANY SECTION.
a

phase of economics demanding our most thoughtful

attention.

But

at the bottom of the whole fabric of French

com-

mercial and industrial sense, exhibiting so largely an
unsolicited fiduciary character, stands the Bank of
the very essence of the spirit of which we
This bank, by all odds the most powerful
in the world, and, at the same time, the most directly
itself

have spoken.

subservient of popular necessities, has never, even in the
times of war or revolution, refused to administer to the
honest requirements of the community; and yet, in
spite of its liberality, its losses are always insigniflcent,
never, so far as

have been able

to learn,

having risen

as high as the one hundredth part of one per centum of
its operations, and being, of course, wholly lost to sight
in the immense volume of its profits. The source of its
security lies always in the unbounded aid given by it to
legitimate business and in the confidence it thus inspires,
it being, in the last analysis and in virtue of its wise
generosity,

its

own

clearing house,

and

offsetting its

resources by the simplest processes of bookkeeping, without inconvenient dispersion of
funds.
In the same way in which the Credit Foncier has
obligations against

made

itself

pre-eminently a bank and not a trust company; but
do so in order to explain how it happens that other
from their very nature must do
institutions, which
much that is expected of trust companies here, can do
it readily and always, and without risk or even inconis

finance, so democratic in its character, and. in the

France,

103

its

a voluntary trustee for the long time opera-

tions of the country, the

Bank

France has, on

its side,

made itself a like trustee for the rapid operations of
modern commerce, securing, directly or indirectly, to
every worthy trader, however humble, constant and
by encouraging the habit of replacing open
acceptances,
and thus making each man's
accounts by
bill case, instead of his ledger, the stronghold of his
business. It demands two names on every commercial
bill, so as to secure the record of a legitimate transaction, but it will discount any good bill that is not less
than forty francs, or eight dollars, and does, as a matter
of fact, discount in each day of the year, among the
numberless trading documents which pass through its
hands, from twenty thousand to fifty thousand inland
bills of exchange of which not one exceeds in amount a
hundred francs, or twenty dollars. As to loans upon
securities, where, of course, a single name suffices, it
will accept any collateral that is substantially solid,
whether it represents the shares of a street railway in
Milwaukee, the bonds of a water works company in the
City of Mexico, the stock of a bank in China, the consols
of England or Russia or the rentes of France itself. It
wishes to give to every Frenchman, so far as wisdom
may permit, the facilities necessary for the prosecution
of any legitimate business at home or abroad, and to do
this in a manner affording the utmost ease consistent
with ordinary prudence.
It may seem but little pertinent to my subject that I
should speak in so marked a way of an institution which
liberal credit,

venience. These other institutions kuow that in their
hour of need they can. with the certainty of prompt response, apply to the Bank of France for any relief they
may require, and that the Bank itself is safe in granting
such relief. But it is not its six hundred millions of
dollars of metallic reserve, coupled with other resources
just as boundless in their way, which give to the Bank
of France its wonderful strength, important as its cash
and securities are in the estimate of its influence. The
secret of its power lies in the fact that it has made itself the trustee of the nation's credit, and that, by perfecting a system which secures instant accommodation
on any scale, however large or however small, for every
proper transaction of industry, commerce or finance, it
has become the reservoir of the nation's wealth and the
adjuster of the nation's accounts, rarely making, or being expected to make, any other output of cash than that
which constitutes the small change of the daily life of

a great and energetic people.

have much to learn from our colleagues abroad,
we are disposed to profit by our opportunity, though young and vigorous peoples, temporarily
raised above the necessity of close economy, are somewhat prone to believe their own judgment the best that

and

believe that

exists.
I laid before many of the ablest ofour banks and trust companies all the ideas I
have advanced in this paper and many more of a kindred nature, and offered, with their co-operation, to put
them to a test, so far as circumstances might prudently
allow; but although I everywhere got a respectful hearing, and sometimes a sympathetic one, I was told that
my suggestions were in advance of the times. They
may have been; but some of them have, from the sheer
force of events, been since carrieu into effect, and others
are daily presenting themselves directly to the consideration of able and experienced students of finance, and
will not fail to command attention. Indeed, I am sure
that the trend of modern civilization and the ever growing unity of the human family, commercially as well as
socially, will bring us, in respect to the work of both
banks and trust companies, to adapt to our new and
somewhat unique conditions the plans and expedients
which have been evolved from the larger experience, the
profound thought, and, I repeat it advisedly, the more
democratic financial procedure of the older world,
which, though it may have learned some lessons from
us, has taught us, and has still to teach us, many more
than we are likely to be able to offer to it for very
many years to come.

Some years ago

ficers of

BANKERS' CONVENTION.

104

Powers of Fiduciaries Outside the State of Their Appointment,
By FREDERICK ViERUNG, Trust Officer of Mississippi Valley Tiust Co. of
hi this paper the consideration of the question indi-

the title will "be limited, relating only to express
legally created and not contravening the law

cated

trusts

against perpetuities and duly accepted by the fiduciary,
the discussion not touching in any way the many points
of difference arising out of implied trusts and illegal
trusts, so-called,

are

all

nor matters of agency.

familiar with the character of the different

kinds of trusts

and the

offices of the fiduciaries,

known

as executor and administrator, guardian or curator, receiver, assignee and trustee.
As a general rule, all natural persons capable of confi-

dence and of taking and holding either the

legal title or

comprehensive powers

execute trusts of every de-

scription.

The subject naturally divides itself into the following
three points of discussion, to wit:
1. Where the fiduciary is a natural person and the
trust is created: (a) by act of the parties, such as trusteeships and assignments,

and

lb)

where the

trust

cre-

ated by appointment of the various courts under the
law having jurisdiction in the premises, such as guardianships and curatorships, receiverships, administrations and executorships, the latter being under probated
wills nominating an executor, who is appointed by the
court to execute the will, and deriving his powers from
both the will and the law:
2.

Where

by law
3.

Where

where

the fiduciary

to accept

and execute

a corporation authorized
trusts;

and

the property of the trust

personalty and

real estate.
I

one of the attributes of the ownership of propthat
the owner has power to dispose of it as he
erty
chooses, so long as he does not trespass on the rights of
others nor act in a way contrary to law.

the foreign State without complying with the statutory

requirements and conditions, and if the assignee must
be a resident he cannot obtain recognition at all. Assignments are still permitted under the State laws,

though under the national bankruptcy act an assignment is an act of bankruptcy and the debtor's matters
on application of any person interested will be taken
charge of by the bankruptcy court and the assignee be
Questions relating to assignments,
are no longer of greatest importance.
ousted.

a well established right,

owner may by a conveyance

among

others, that the

in trust create a trust of his

property for the various purposes with which we are
familiar, to take effect during his lifetime, or by will he
may create a trust independent of the duties of his executor, to take effect after his death. Either of the
trus
reated la by act of parties, and the trustee
has all the powers over the trust property that may be
delegated to him by the owner, and the power of the
trustee over the trust property in another State is the

the State where the trustee resides. Under
our national Constitution the citizens of each State are
entitled to all the privileges and immunities of citizens
in the several States, and under this provision a citizen
of one State may acquire, own and dispose of property
in anoHier State just as can a citizen resident, in that
other State, and our national Supreme Court has repeatedly decided that this provision applies equally
where the property is conveyed to a nonresident trustee

same as

In tr

Another fiduciary relation created by act of party is
where a debtor assigns all his property for the benefit
of his creditors. As a general rule the assignee need
not be a resident of the State where the property Is
situate and takes the title to all property of his ask>r wherever found; the assignee becomes the legal
owner of the property and has the same power and control over it as If he were the absolute owner. This general rule must be qualified, as where the laws of the
foreign State where some of the property Is provide for

therefore,

I b.

Where

appointed by the various
courts under the law having jurisdiction, as trusts for
minors and insane persons, receiverships and administrations, the appointment in contemplation of law is
not by voluntary act of party. These are instances
where the courts step in and appoint legal representatives for owners to protect their property interests where
they themselves have no legal capacity, as guardians
the

fiduciary

and curators; or where there is danger of waste and
where conflicting interests are involved, as receivers; or
where the owner is dead, as administrators and executors. In law these legal representatives are considered officers of the courts, and, as these courts have
complete jurisdiction only in their

own

give their officers no greater territorial

States, they can

power than

their

own, and the appointment of such officers has no effect
on property beyond the territorial limits of the State in
which the appointment is made. (In some of the States
citizens of another State may be appointed, and in such
cases the foreign representative has the same powers as
a citizen of that State would have if appointed.) The
general rule

It is

Louis.

statutory assignments only, thus prohibiting general assignments other than statutory; in such cases the general assignee cannot assume charge of the property in

may

hold it in trust for
others; and corporations may hold property and execute
trusts where it is within the scope of their corporate
existence, such as trust companies, which are given
beneficial interest in property

St.

modified to some extent, as follows:

to administrators

and executors, by the

principle

that they, as such, are the legal representative of the

deceased owner of

all

his

property and

assets in a foreign jurisdiction
is

made

him

payment

may

collect

or delivery

voluntarily, so that resort to the foreign

is not necessary; or where the foreign statutes
a spirit of comity give the domiciliary administrator
or executor power to act.
As to guardians, etc., upon principles of comity the
authority of a guardian appointed in the State of the
ward's domicil will sometimes be recognized by the
courts of other States, and in some States statutes have
been enacted enabling foreign guardians of nonresident
wards who have property in the State to obtain authority to act in reference to such property or to remove it from the State.
As to receivers, it is well settled that they will be
permitted to sue ami act in jurisdictions other than
where they are appointed, where this will not result in
the violation of any principle of public policy or law.

courts
in

II.

fiduciaries we have spoken of in this general
arc natural persons. The general principles heretofore Indicated must be further modified when applied
to corporate fiduciaries. A corporation, so far as its In-

The

way

herent

power

charter

to do the business authorized by Its
concerned, can engage in business anywhere,
and is not limited by the bounds of the State of its organization, nor prohibited from doing business in other

laws or public policy of such other
State deny them the right. It has been said a corpora
tion can have no legal existence beyond the bounds of
the State by which it is incorporated and can exercise
States,

unless

flic

TRUST COMPANY SECTION.

105

none of the privileges conferred by its charter in any
other State except by comity and the consent of the
Comity is presumed to exist ami does exist until
latter.
a State expresses an intention to the contrary in some
affirmative way, by direct enactments on the subject or
by its public policy deducted from the general course of
legislation or by settled adjudications of its courts of
las! resort.
Our national Supreme Court has said that
corporal ions of other States arc not "citizens" within
the meaning of the clause of our Constitution above

permit foreign corporations under restrictions to do
business generally, but all do not provide for corporate
fiduciaries. "Where the State knows no corporate fiduciary under its own laws, it is almost sale to conclude
that foreign corporate fiduciaries will not be recognized,
as, on principle, a State will not allow a foreign corpora-

It follows that a State may discriminate
to.
favor of its own corporations against corporations of
another State. Our States have quite generally adopted
laws regarding foreign corporations, permitting them
to do business under restrictions more or less severe.

their trusts in the State under various restrictions,
usually requiring bond and proof of their appointment
in the domiciliary State, but sometimes permit them

referred
in

III.

In contemplation of law, personalty Is situate at the
domicil of the owner, though actually at some other
place, and if the property of the trust is personalty, it is
a general principle that a transfer to the fiduciary valid
according to the law of the domicil of the grantor will

tion to

do an act within

its limits that it does not percorporations to do.
Most of the States by enactments permit foreign
executors, administrators and guardians to represent

mit

its

own

only to do specific acts; there are but few States whose
statutes deny such foreign fiduciaries any recognition.
As to foreign assignees, receivers and trustees the
statutes are for the

most part

legislation there

From

silent.

the trend of

marked

cases the validity and effect of conproperty
is determined by the laws of
veyances of real
the State where the property is situate, and these vary

spirit of comity between
indeed glad to see. In many instances it means the proper business management of a
trust by ONE fiduciary familiar with all the affairs of
the estate. This is of great importance to the beneficiaries, saving double court costs and fiduciary fees
and enabling the ONE fiduciary to derive for the beneficiaries the incalculable benefits of a harmonious and

as to forms of conveyances and acknowledgments required, and the only rule is in each instance to follow

case of the former

be recognized in the State where the property
actually be.

may

all

requirements of the several States. In
some States corporations are not permitted to hold real
estate, and in such States a corporate fiduciary could
the statutory

not take and hold

title.

IV.

have looked over the statutes of the various States
for enactments regarding the several classes of foreign
fiduciaries touching upon their right to do business in
I

the several States.

I find

that practically

the States

all

Trust
By Mr. Arthur Heurtley.

our States, which

the other States of fiduciaries of sister States than we
find at present; and as no beneficiary or creditor of an
estate is denied the privilege of redressing his wrongs,
whether he be a resident or nonresident of the State,
is no sound reason why there should be any hoswhatever toward foreign fiduciaries properly adpointed under reasonable regulations as to giving bond
and the performance of his duties.

there
tility

Company Forms.

Secretary of the Northern Trust Company, Chicago,

I have been asked to address
one of interest to every Trust Company officer.
And while interesting in the abstract, it is a topic that
one cannot deal with in rounded periods, and over which
one cannot indulge in any flights of rhetoric. For it is

pre-eminently an every-day, practical question; and if
I fail to treat it as fully as I might or should do, I trust
my sins of omission and commission may be pardoned,

owing

because of circumstances beyond
time for preparing this paper has been

to the fact that

control

somewhat limited.
The first need of a Trust Company,

after it has been
duly organized and has found a suitable location in
which to transact its business, is to have suitable books
and blanks for preserving the details of its transactions

from day to day. The officers are usually men who have
had some experience in bank work or in the practice
of the law, but have seldom had an opportunity to
make any study of the forms of accounting suitable
to the business of a Trust Company, and, therefore,
have been obliged to either obtain assistance from older
Companies or to work out their own salvation as best

Company

meeting of the Section a committee was
prepare a set of forms suitable for a Trust

last

appointed to

to use, and the result of their labors is now
hands of many of our members.
The prime requisite Trust Company forms should
possess is simplicity. Too much stress cannot be laid
upon this point. Many a book or blank is made so complicated by rulings and headings as to mystify any one
except those who have been accustomed to using it couin the

stantlv.

Trust

Company forms should

tell

111.

their story plainly;

any one of average intelligence could
understand how they were to be used. Every book and
form should be planned with reference to the entire
system of accounting, so that the forms taken together
will make a complete and harmonious whole. Through
so plainly that

the books there should run a chain of entries, so
as to bind them together; cross references should
be made, and every entry should show on each book or
form from whence it was derived. It should never
require the services of a chartered accountant to check
a proper system of trust accounting. The errors that
will occasionally creep in should be found by an almost
automatic operation of the system itself, combined
with a careful checking of the entries each day. Every
entry made on one book should be capable of being
checked from at least one or two other books kept by
different clerks. If this plan is carefully followed up,
all

made

combined with the proper custody of securities and cash,
it seems to me that serious errors in the accounts, as
well as defalcations, will be prevented.

The cash and

securities

should

never be

the

custody or control of the same
"Where it is practicable there should be a double
custody of all securities. In any event, a careful record
should be made of every security, interest coupon or
valuable paper taken to or from the cash vault, and
receipted for by the proper officer or clerk.
There is no particular mystery about accounts or
book-keeping generally. Given a good practical system
of accounting, with simple forms handled by clerks of
clerks that keep the

they could.

At the

uniform management of the whole estate, just as in the
owner himself. I am an advocate of
even more liberal laws on the line of the recognition by

The subject upon which

you

books.

reasonable intelligence, whose work is carefully watched
by the officers, and whose efforts to improve the forms

BANKERS' CONVENTION.

106

they use are met by proper encouragement, the result
will be very satisfactory.

Perhaps it will be of Interest if I attempt to briefly
discuss the principal forms to be used by a Trust Company.

book required is a Register of Trusts. When
a trust is accepted by the Company it should be entered upon this book, which should show the name of

The

first

the date of acamount of the
total
the
ceptance, source of appointment,
estate or trust fund, the attorneys connected with the
In short,
trust, etc.; also the date it is dually closed.
the trust, the tiling

number given

it,

the Register should give a brief history of the trust,
and it is of great utility as a book of ready reference.
This book should have an index. At this point I desire
to

say

that

opinion the plan of giving every
it is known all through the

trust a

number by which

records
papers,

a good oue.

renders the correct filing of

much more certain, and from practical
experience I can safely recommend it. All papers referring to the trust should be tiled under the number
belonging to the trust, and
in the cash vault, should be placed under a similar

-rned
filed

etc.,

it,

and

all securities

number.
Next to the Register of Trusts conies the Cash Book,
The enthe General Journal aud General Ledger.
from the
then
books,
first
in
these
made
tries should be
same tickets the proper entries should be made in the
Trust Journal and posted in the Trust Ledger. It is
from the Trust Ledger that all statements of account
should be made, and the pages should be so ruled and
arranged that the stenographer can take the book and
copy the entries as made, the result being an account
in proper form for filing in Court or to send to the
beneficiaries in the tritst estate.

Stock and Bond Ledger should be kept, in which
all the stocks and bonds owued by the Company, or
held by it in any trust capacity, should be entered,
showing the amouut of each kind of security in the
possession of the Company. This book is not only an
additional check upon the Trust and General Ledger
entries referring to stocks and bonds, but is also a ready
reference book to turn to in case an officer of the Company desires at any time to know the amount of any
particular security under the control of the Company.
One of the important books that should be kept is a
later of Securities, containing not only bonds and
stocks, but notes as well, with full data regarding each
The securities held by each trust
class of security.
should be entered by themselves. The book should
provide for a record of interest or dividend payments,
so that from time to time when the book is examined
the information as to such payments can be readily obtained.

Daily Balance Sheet should be kept in which

all

the totals should be brought together for the information of the officers; also a Tickler showing the due dates
-of notes, etc., to be collected from time to time.

Memorandum Tickler is also a useful book
which should be entered sundry memoranda
relating to the various trusts that might otherwise be
forgotten at the time when most needed.
The Real Estate Loan Records should be very complete, as these books are being constantly referred to,
aud entries when made should be carefully checked by
Daily

to have, in

another clerk than the one making them. This rule
should apply to all books kept by the Company. Full
aud complete records should be kept of all matters
relating to rentals collected, insurance, etc., also of any
securities that are past due or are of doubtful value.

The expense account should be abstracted

a book
that purpose, and carefully compared and
checked with the General Ledger. It is also advisable
to keep for future reference in a book prepared for
that purpose memoranda of all conversations had with
prospective clients. All tickets from which the original
entries are made should be clear and concise in form,
giving in themselves all the information necessary from
which to make perfect entries on the books.
I have not attempted to deal with the many special
forms of books and blanks relating to bond trusteeships or to the registration aud transfer of stocks. The
large majority of Trust Companies handle very little
kept

for

of this class of business, as

naturally goes to larger
financial centers.
But I have endeavored to treat of
those forms which would prove useful to almost every
Company in the country doing a trust business.
1

am aware

that the Loose Leaf system of bookmuch attention in these days. And
prepared to admit that there are many minor

making
I

receiving

books in which
had, and

can be used to advantage.

But

have

use for books
of original entry, as it is not a difficult matter to take out
a leaf from a book made on this principle, while it is
almost impossible to detach a leaf from a book properly
made and bound in the regular manner. The book of
Trust Company forms referred to a short time since
contains the ideas of the committee upon this subject.
In closing let me suggest that it would be well for
every Trust Company to have one man in its service
whose duty it shall be not only to keep books in touch
with its system of accounting, but to constantly endeavor to improve and simplify its forme. Again, I repeat, make the forms as simple as is consistent with
full aud complete entries.
See that every account on
the General Ledger is checked by entries made on
another book or other books. For example, the stock
and bond account in the General Ledger should agree
with the balance sheet of the Stock and Bond Ledger,
and also with the totals of stocks and bonds shown in
Then the officers of the
the Register of Securities.
will
seldom
troubled
over their system of
Company
be
accounting. The business is eminently one of details,
which demand constant watchfulness and attention, and
the system that renders this work easy to the officers
and employees is the one to follow.
still

have, a prejudice against

its

Report of

Detailed
Fifth

Annual Meeting

TRUST COMPANY SECTION,

PROCEEDINGS' OF MEETING.
Meeting called to order by the Chairman, Mr. William G. Mather, of Cleveland, Ohio, at 10:20 a. m.
Chairman: Gentlemen, the fifth annual meeting of
the Trust Company Section of the American Bankers'
Association will now please come to order. The Rev.
Mr. A. A. Kiehle will make the prayer at the opening of
the session.
PBAYER.

Almighty God. our Heavenly Father, Thou
author of all life, the fountain of wisdom, we
would not enter upon any duty, we would not engage in any
undertaking, without imploring TTiy blessing.
Thou hast said,
if any of you lack wisdom let him ask of God, who giveth to all
men liberally and upbraideth not, and it shall be given him.
We pray that Thou wouldst grant wisdom to Thy servants who
have come to our city from different parts of our country to
discuss questions and make plans of great moment and of farreaching power. We thank Thee. O God, for the great banking
institutions of our country, that they are among us as towers
of strength
we thank Thee for what they have done to aid in
the happiness and prosperity of the people of our country and
In making us a power among the nations of the world.
We
thank tfhee that these great institutions are in the hands of
representative men, men high in character
and now, as they
are met in Convention, we pray that the discussions in which
they shall engage and the plans they shall make may be the
means of adding to the prosperity and the happiness of the
people and of advancing our civilization.
We ask especially for your blessing to rest upon this Trust
Section of the Convention
be with them in all their deliberations and a!l their plans, and out of it all may these Thy servants become even more efficient in the great and beneficent work
in which they are engaged
and so we pray that Thou wouldst
bless not only this Convention but all similar conventions where
men are met together to discuss vital questions not only to this
country but to humanity.
And unto Thy name we give the
praise forever more.
Amen.
Mr.

who

Kiehle:

art the

;

Chairman: The next matter on the programme is
the roll-call of the Secretary of the Section, but I think

we can dispense with that because we will have the
names of all those who are present, and

they will be published as being at the meeting.
The next matter, therefore, on the programme is the
address of welcome by Mr. Howard Greene, President

Wisconsin Fidelity Trust
Milwaukee, Wis.

Safe Deposit Company,

Address of Welcome by Mr. Howard Greene.
Mr. President and Members of the Trust Company Section
of the American Bankers'" Association:

very glad that the opportunity has fallen to me
to welcome you to our beautiful city.
We are proud
of Milwaukee. It is a clean city; it is a well governed
city, and it has a charm and character more peculiarly
its own than other American cities.
Half a century ago a general westward movement
from New England, New York and Pennsylvania scattered a thin settlement over the older States made from
I

Proceedings*

the Northwest Territory and settled sparsely the southern part of Wisconsin, giving us our early merchants,

bankers and professional men. Then followed some of
an alien race led by the stirring men exiled from the
Fatherland by the Revolution of '48. Some of these,
like Carl Schurz, soon
became leaders in American
thought and affairs; very many gave their lives freely
in the service of the country of their adoption.
I cannot emphasize too strongly the influence of these men
mingling with those of Puritan descent, learning free
government and an alien tongue, and giving to the
American life about them something of the German
cheerfulness and warm-heartedness. Then came a third
and larger wave of immigration; that brought us the
thrifty sons of Poland, Norway, Germany and Sweden.

held at Milwaukee, October 16.

To-day a major part of our population are of foreign
birth or descent, but in no case do they form a distinct
element of the community, as do the miners in some
sections of Pennsylvania or the French-Canadians in
parts of New England. Their pride it is to Americanize
in speech and manner as rapidly as possible and to own
They own their own homes.
their own homes.
No part or quarter of our beautiful city can be called
congested in the sense that word is usually applied. To
our city of homes you have received such a greeting as
can only be extended by a home owning, home loving
people.
No city whose hospitality you have enjoyed

has given you a more cordial greeting. We have had
the pleasure of entertaining many gatherings of representative men in Milwaukee, but never have we been
more highly honored than by the presence of this association in

Milwaukee

to-day.

In the name of the city and in the name of our hos(Appitable people I bid you a most cordial welcome.
plause.)

Reply to Address of Welcome by Mr. William G.
Mather.
Chairman: Mr. Greene, to you, as representing the
citizens of Milwaukee, I, on behalf of the Trust Company Section, wish to state our very great appreciation
of your kind words of welcome and of the very warm
and delightful hospitality with which you have greeted
It gives us great pleasure to come to this
us here.
flourishing city of the Middle West, inhabited, as you
have said, by this cosmopolitan population, which shows
the results of the influences of this diverse population.
Your city is a city of beautiful homes and of remarkable public buildings, it seems to me, for this section of
the country. I remember at a meeting in the city of
Cleveland, where we are trying to have a grouping of
public buildings, and to do more in that line as we
see them in Europe, in making them conform to certain
harmonious lines in the development of the city, that
among the achievements that were placed before us
in an illustrated lecture delivered by an eminent New
York architect were shown views of several public
buildings in Milwaukee, and your city was held up as
an example of civic development to the other cities of
the country. Particularly did we notice that beautiful

and your city hall.
Milwaukee, as we all know, is represented by its
commerce and manufactures all over the world. While
in Europe this summer I saw in England and in Germany and in Sweden, machinery and engines which
had come from Milwaukee, one of the greatest manubuilding, your library,

facturing cities of high-class engines in the world.
all know how celebrated you are for your beer, which
is an element which adds very much to the comfort of
the population of the country, and I believe some of it
is sent abroad- -at least you make what is called export

Your manufactures of leather are all over the
world, and all over this country.
As I say, Mr. Greene, we feel it a great privilege to
come to this city with its diverse population and influences, its magnificent example of the growth of the
Middle West in all that pertains to civic development,
and we thank you most heartily for the very cordial
and generous welcome with which you have met us.
beer.

(Applause.)

Report of the Secretary Mr. James Branch.
Chairman: The next order is the report of Mr. James
Branch, Secretary of the Trust Company Section.
The Secretary then read his report.
Motion was made, seconded and unanimously car-

BANKERS'

10S
the

that

rted

report

accepted

and spread on the

minutes:
it

as follows:

Ni:w Vouk. October 7. 1901.
$1,717..~>1
Balance September 1. 1900
2,000.00
Appropriation of Executive Council at Richmond
Received from sale of books of Trust Company Forms. 1,727.80
$5,445.31

Cost of Trust

Company Forms

$26:i.'.»l

593.96

Other disbursements

857.87
$4,587.44

Balance

Since September 1, 1900, special letters have been written
to every Trust Company in the United States not members of
the Association. Inviting them to join. At that date there were
two hundred and eighteen (21$) Trust Companies enrolled In
Kleven of these have withdrawn from the Associathe Section.
tion, but as one hundred and forty-one (141) have been added
to the rolls, the net gain is one hundred and thirty (130), an
Increase of GO per cent, over last year's membership.
Respectfully submitted,
Jas. K. Branch, Secretary.

Report of Executive Committee.
Chairman: The next order of business is the report
of the Executive Committee by the Chairman, Mr. John
Borne. I regret to say that Mr. Borne, owing to serious illness in his family, has telegraphed to us that he
cannot come, but he has sent to us a short report which
will read.

Report of Chairman of Executive Committee read,
received and filed.
It is

as follows:

To the Trust Company Section

of the

American Bankers' Asso-

ciation:

In presenting the report of the Executive Committee it
seems unnecessary to go Into details of the progress made by
the Trust Company Section during the past year, as these are
given In full by the Secretary, Colonel Branch.
The election of a permanent Secretary at last year's meeting was a wise step, as it has resulted in a systematic effort to
Increase the membership, as well as the revenue.
It Is agreeable, therefore, to note that there has been a
material increase In the former, which now numbers 348 and
that the Section closes the year with an increased cash balance
;

hand.

The beneficial Influence of these yearly meetings cannot be
overestimated.
Papers on topics of general interest are presented and customs and functions in vogue in various localities
are discussed, with an educational result
and the officers of
Altothe various Trust Companies meet on a social footing.
gether the effect Is to weave the entire Trust Company fraternity into harmonious relations which are bound to result in
the general welfare.
John E. Bokne,
;

Chairman Executive Committee.

Chairman: The first paper is entitled "The Business
in Foreign Countries Analagous to that of Trust Companies in the United States," by Mr. Charles F. PhilPresident of the Corporation Trust Company of
Delaware, New York City.
After each one of these papers the subject is thrown
open for discussion, and as you who have been present at
various meetings remember the helpfulness and interest
of those discussions, I hope that you will all participate
then, and anything that comes to your minds in connection with the papers as they are read, that you will
kindly present to the meeting, so that our discussions
can be full and beneficial, and I would also request
that when any one gets up to speak he will kindly
announce his name and the company that he repre.
lips,

gentleman delivering the welcoming address did not
mention in the tide of immigration the Frenchman.
This paper, philosophical and practical as it is, discloses a reason way the Frenchman does not emigrate
and therefore another reason why France is not the successful colonizing country which Germany and England have been.
We are all struck by it in going to
France, aside from the social and artistic graces and
love of home of the Frenchman.
1
think this paper
opens up something to us which almost comes to us
with the force of a secret disclosed. Contrast the operations of those two great French banks with the condition of the borrower in most of our American cities, I
mean the small borrower. Already we see parish
churches and some philanthropic citizens opening np
avenues for the small borrower to get a loan, but every
day almost we witness the hardship to the small borrower, knowing full well that he is paying from 10
Thereto 40 per c-nt. to the chattel mortgage lender.
fore the hardship comes in to the American laboring
man which the Frenchman does not realize at all. We
are too busy in our trust companies to take up this
matter of small mortgage loans, 1 think, and we turn
them aside, and I have thought for a long time in the
city in which I live that it is my duty as a man of
philanthropy to try to organize a small local mortgage
company to make these small loans which afterward
could be used in a trust company and add to the assets
of the trust company that of the mortgage loan company, so it may increase its work.
The paper has opened up to me one of the secrets
why the Frenchman stays at home and does not emigrate. He lives in a pleasant country and he gets accommodated if he is a poor man, while the small American
borrower does not, and I simply throw out the suggestion that we ought in some way as citizens, if not as
trust company officers, to put a check on these usurious
rates of interest and hardships suffered by the workingman and other men who are compelled to borrow
small sums on mortgages. (Applause.)
Mr. Phillips: The gentleman has spoken very much
regard to the main idea underlying my
In regard to the interest paid for
loans in France, I would say that it scarcely ever exceeds 3 per cent., even if the loan is a very small one,
and not only is the facility for securing small sums on
mortgage universally existent, but in the way of ordinary common business the smallest man can get as
readily as Rothschild himself all the accommodation he
actually needs, providing it is based upon existing
operations of an honest and proper character, and he is
an honest, law-abiding fellow. Suppose that in some
quarter of Paris there is a small grocer with a capital
of $1,000 or .$1,500, who deals with working people.
He can afford to give a credit of $5.00 to $20.00 as a
limit to those around him, if he knows them and considers them to be perfectly upright people regularly
employed, and what he does is this, and this is the
secret of his success.
If he trusts a workingnian who
is getting perhaps $5.00 or .$6.00 a week, for 40 or 50
to the point in

whole discourse.

francs worth of groceries, and

two or three months'

credit,

willing to give him

instead of putting that

account on his books he immediately draws a

bill

that workingman, who accepts the bill; the grocer keeps
he cannot keep it any
it as long as he can, and when

seir

The Business
That

CONVENTION.

of Trust

Foreign Countries Analogous to
in the United States.

Companies

be found on pages 100
Supplement.]
Chairman: The very interesting and Instructive paper is greatly appreciated by us all, and is now open
for
.on, remark or question.
Mr. Phillips has
evidently treated the subject so fully and exhaustively
that it seems to be satisfactory to us without further
question. However, I hope that there will be some dis[Mr. Phillips' paper in

full will

to 100 of tins

cussion on the paper.
Mr. Edward J. Parker,

Quincy,

Illinois:

The

longer he sends it to the grocery jobber. The bill Is
already accepted and has two names on it, and the
jobber takes it and puts on a third name and keeps It
as ]oir_

:i^

lie

can,

and he passes

some such

on to the sugar

re-

and these institutions
when
they have too many
banks
put the bills in the
and sometimes take 40,000 bills in a
of them
bunch and rediscount them in the Bank of France;
and so every day in the year there are one
or two thousand bills at least coming into the Bank
finery or

institution,

of France, each bill not representing over $10.00, with
endorsements Hint, represent perhaps two hundred or

TRUST COMPANY SECTION.

109

hundred miliums of dollars; and the Bank of
France is only too glad 10 get those little bills, and they
keep small trade going, and if it happens that a man
cannot honor his bill, he goes to the holder and explains the circumstances, pays something on the bill
and gets it extended, and he never fails to pay in the
long run, because if he does he will never get any more
credit from anybody at all, and honesty in business is
thus promoted, and the losses are practically nothing.
Even after the Franco-Prussian war, when the Bank of
France had to furnish si, 500,000,000 as an indemnity,
and had only $000,000 in the bank, yet not one of those
bills was ever passed up to profit and loss, and that
would not be permitted, and with the exception of

thing that ever can be done anywhere under such circumstances.
Paper on Trust Company Forms, by Mr. Arthur
Heurtley, Secretary of the Northern Trust Company,
Chicago, 111., was then read by Mr. H. M. Young, of
the Northern Trust Company, of Chicago.
Mr. Young: I am very sorry that Mr. Heurtley is not
able to be present, for the reason that he is familiar
with the subject and I am not, my connection with the
Company having been contined to its legal department.
Mr. Heurtley's paper is as follows:

$5,000 or $10,000 all that vast quantity of bills was
paid; so that you will observe that the loss even during

of this Supplement.]

three

that period was only $5,000 or $10,000 on bills amounting to ten billion dollars of our money; so that the loss
Is absolutely insignificant, and it is all explained by

system of lending assistance in a small way and at
a small interest and on the best security possible—
namely, the life work and possessions of every man in
this

the country.
ident the Minnesota

Merrill,

Minneapolis,

Minn.,

Loan & Trust Company:

Pres-

have been

much

very

interested in the paper read and the remarks
of our friend from Quincy, Mr. Parker, and I would

hardly like to interrupt the philanthropic thought which
is going out; but it strikes me that it is very different
doing business in different localities. I have known
New England bankers who were thoroughly good men

who would make a

failure in California.

If that is true,

not more true that methods which might obtain in
France or Europe would hardly be practicable in this
country? Those of us who have been offered credit
for our clothes in London, when we were unknown, and
for long time, realized that our Western merchants
would not do that sort of business and expect to get
is it

money.

their

a matter of fact,
try a transient population. The
move about; the American does.

we have

in this coun-

Frenchman does not

I will venture to say
loans were made in this country as has been
suggested by the reader of the paper, that in very many
cases, when they came to collect the loan made in Wisconsin to a party here they would find that the debtor

that

was

not

make

Texas or

in California.

loans in the

In other words, you can-

same way and with the same

degree of assurance of their being paid here as you can
in France.

Then

again, there are doubtless different laws

methods of

collection.

Of course

man

and
perma-

nently located in one place he can get credit, for if
he does not pay he loses his reputation; but if he is located one year in Chicago and the next in New York

and the next

much

affected

San Francisco,

his credit

not very

his not paying.

Again, in this country, where we have liberal homestead laws and similar laws, favorable to the debtor
class, there is no way of reaching the debtor.
I only throw these suggestions out to show that there
are certainly difficulties which will prevent the adoption of the ideas which have been so ably set forth. I
only wish to add that I am in full sympathy with my
friend Parker in his ideas regarding the hardship that

brought to our poor community, or those without
when they have to pay such high rates of interest to chattel mortgage brokers, and I would be glad
to do anything I could in the direction of relieving
them; but it seems to me that we have got many pracis

capital,

questions to answer and difficulties to solve before
here which are perfectly safe and
practicable in Europe.
Mr. Phillips: It might be applied very largely here,
tical

we can adopt methods

and

a person were likely to move away and were
getting a small loan without security, which might be
done here, but which would not occur in France, he
would get an endorser who is known—that is the only
if

[Mr. Heurtley's paper in full

given on pages 105 to

10(i

is now open for discussion.
Enright, Secretary Missouri Valley Trust
Company, St. Joseph, Mo.: I would like to ask if any

Chairman: The paper

Mr. A.

member present has ever proposed a docket used by
their Company for keeping a record of trusts arising
Probate Court?
Mr. Frank H. McCulloch, of Chicago (of McCulloch
& McCulloch, lawyers) I have prepared such a book for
our own use, and it has been used in several Chicago
institutions. I do not know just what the gentleman
wanted to know about it.
Mr. Enright: I wanted to see one of the forms.
Mr. Henry Eitel, of Indianapolis, Ind., Vice-President Union Trust Company: For our probate department we have had prepared a special book, and it is
practically a copy of the book kept in the court house
by the county clerk, and we enter the estate, the name
of the attorney, the general condition of the estate and
in the

Eugene A.

Mr.

Trust Company Forms.

whether

real estate or personal property,

it is

a notation of all court entries

a Trust
Trust,

and court

and make

orders.

When

we make an entry of the closing of the
that way have practically a synopsis of

closed

and

the court record, and

any time it is necessary to
refer to the original entry, we have the dates and can
go to the court house and look up the original papers.
In addition to this we have also found very useful in
our Trust Company a book in which we copy all wills,
or where there is a simple Trust created we copy a
synopsis of the Trust contained in the original will, and
in this way we can refer to any will that has ever come
into our office. It frequently happens that a Trust
is created where the carrying out of the provisions of the
will will extend over a period of from fifteen to twenty
years, and the will often gets misplaced or it is difficult
to refer to it, and in that event we find this record
very useful.
Mr. Orde:

was

was impressed with

the

first

remark which

read, that, the first essential of a Trust

Company

book was simplicity. I would like to make this one
suggestion. The gentleman inquires for a probate book.
Two gentlemen have replied that they have a probate
book.

Now, the information contained

the probate

book referred to by the gentleman from Indianapolis
is also contained in the Trust register described by Mr.
Heurtley in his paper, and I want to suggest that too
many books are very easily secured, and a great many
of them may be neglected. The trouble about Trust
Company books in my experience is that you have so
many books that they do not check one another, and
you cannot make them check one another. Now in the
Trust register, as has been suggested, you may call it
Trust docket or index, but in the original book of entry,
when a Trust is received, it matters not whether it
comes from the probate court or from a chancery court
or by private contract, you have one original Trust
register, and on that register you would set aside a
page or two pages, if necessary, and put on it the gen-

name of the
name
of
the
estate,.
the
attorney,
the
name of
your number, the court number, the terms at which
settlements are required, and if you have a will you
abstract your will right in that book, and I think that
eral information relating to the Trust, the

Trust, the

BANKERS' CONVENTION.

110

Instead o( having a separata book for wills or for the

probate court,

cannot conceive of any difficulty, especially under the laws of my State, .Missouri, why you
should have one hook to keep B Trust which conies
from the probate court, of the deceased person, and
another hook to keep a record of your Trust which
comes from a chancery court, or a Trust which is
created by private contract. You should have one general Trust register, and on that you put this general
information.

Whenever you

that on your Trust register;

tile

settlement,

enter

you submit an annual
Statement to your beuetieiary, you enter that on your
Trust register; and in our system we enter also claims
on this general Trust ledger. I find in an experience
covering three or four hundred Trust estates that there
will not be S per cent, of them that cannot be properly
recorded and carried on one good page of such a register.
When I say we enter claims, I mean claims upon which
if

receive notice, not of the ordinary transactions of
the Trust, etc. In the case of the estate of a deceased
person, the executor must be notified, and when you

make

a final settlement

you can refer to your register
claims have been paid, and I make
these suggestions for the purpose of saving some one
from getting too many books, for I have seen, from experience, that that can be very readily done.
Mr. Souther, of Springfield: I would like to ask if
the forms prepared by the Trust Company Section and
offered for sale are on inspection here?
Secretary: No. they are not. In fact, they are all
sold except one copy.
Mr. Souther: "Will there be another lot issued or
printed?
Secretary: I should think there would be if there is

and see that

all

any demand for

it.
It was originally intended to print
100 copies of those forms, selling them for $35, but we
found that by cutting down duplicate forms we could

book up cheaper, and we sold 150 instead of 60.
Mr. Parker: I should like to mention two points illustrating methods. I put this question to Mr. Heurtley
once: How do you carry the details of your business ?
lie opened at once one of the books referred to by the
reader as the daily tickler. Right here let me say, as
our business grows we cannot handle it properly unless
gel the

we adopt careful methods. To illustrate: The gentleman in charge of the Commercial Department stepped
into Mr. Ileurtley's office and asked him a question
pertaining to a Trust. Mr. Heurtley turns to his book.
" Why," remarks the officer, " Mr. Heurtley,
you should
remember that without taking up this time." " No,"
Mr. Heurtley replies, " my record is sufficient, and then
it is dismissed from my mind."
Two matters are facilitated by that daily tickler:
First, there is a complete record; when he walks into
that office in the morning and opens that book he knows
what he has got to attend to that day, whether it is the
collection of interest or the payment of insurance or
the clipping of coupons or the collection of rent or a
vacancy, and all that, it is all on that book.
Any

gentleman

Commercial Department who chooses
and keep the general run of the business

in the

to investigate

can see at a glance the condition of affairs
ministration by the use of this daily tickler.

in his adI

was

the office of the Mississippi Valley Trust Company when
Mr. Hays came into Mr. Breckinridge Jones's office, and
I said in his presence, " Mr. Jones, what is your method
as to the daily current of business?"
"I will show
you," he said. On his desk there were several sheets.

and pick

it out here and there, so that in the morning
the executive officers are in position to keep the run
of their business. If you have a new customer or have
lost an old one, there is the fact or there is the reason.

all

That is systematized, and I would like Mr. Hays to
supplement my remarks, because he can tell you more
than I can as to his particular form, because I think
right there lies the most important aid to all of us who
are doing a mixed business in our Trust Companies.
Mr. Frank P. Hays, Bond Officer Mississippi Valley
Trust Company, St. Louis: I have but very little to add
to what the gentleman has just stated.
We have different departments in our Trust Company, besides the
Trust Department. We have reports from the heads
of the different departments, that are

made

daily.

Mr. Frederick Vierling, Trust Officer Mississippi
Valley Trust Company, St. Louis, Mo.: On those daily
reports we do not enter into matters of detail, only
essential matters, to bring before Vice-President Jones
the main points of the transactions of the day.
One
thing we put on our Trust Department statement is the
question, Is a daily statement made? If that is made
it
means the books are up, but often books in such
institutions are behind.
We always try to keep books
tight up to date, and I think 'that one essential for
officers to know is that their clerks are sometimes very
lax, and if you do not keep after them they get behind,
and that is the first request that we put on our form
that we use: " Is the daily statement made? AnswerYes." Then, of course, we show cash receipts, etc.
Mr. Reninger, of Allentown, Pa.: It may be possibly
interesting to the first gentleman who asked a quest ion
in reference to the probate book for me to say that
just fifteen years ago we opened what we called a probate docket, and Trust No. 1 was entered and has been
regularly followed during that period, the book being
in form as outlined by the gentleman here.
There is
only one book which we call our Trust docket, and at
any time reference can be made to every Trust which
we have had in this period of fifteen years. It may be
interesting to know that that works out to our entire
Only one book for that purpose is resatisfaction.
quired, in which are noted facts pertaining to every
Trust from its beginning to its winding up, with space
set apart for copies of papers, such as the particular
clause in the will under which the Trust is being
operated. I will be pleased to furnish a form of that
book if desired. It is an old book, but onswers the requirements up to date.
Mr. Hays: I wish to add that if any gentleman present would like a copy of the forms we use we will be
glad to furnish them. I refer to the Mississippi Valley
Trust Company.
Chairman: The next paper will be on the subject
of " Toweis of Fiduciaries Outside the State of Their
Appointment," by Mr. Frederick Vierling, Trust Officer
Mississippi Valley Trust Company, St. Louis, Mo.

The

(taper

Powers

as follows:

of Fiduciaries Outside the State of Their

Appointment,
[Mr. Vierllng'8 paper in

Mr.

Beoinger:
be so thorough
attempts to write
of us keep silent,
to

Mr.

be found on pages 104
Supplement.]

full will

to 105 of this

out early in

desk of the Vice-President, Mr. Breckenridge Jones,
showing the business done for the day ended. Reports
come from the Trust Department showing all business
done there of any importance. From the Banking Department and from the Real Estate Department and
from the Bond Department similar reports are made.
We have a Bond Department that looks after the investments of the Company, and also provides investments for the customers of the Company. Reports are

They had

a mixed business, and every Trust that was
open and which required anything to be done concerning it was entered on those sheets on his desk. Every
box rented in his safe deposit is there, names of new
customers, account
and reasons given, all large
••iied aie on that sheet daily, and there is a
key to all mixed business on the desk for the next ten
" So," he says, " I have a complete key to the
days.
whole
daily."
Some clerk must go around
i

made

the morning or late in the evening and are sent to the

Vierling

known

St.

Louis

department that whenever he
paper
or make a talk the balance
a
because we always know he covers
in his

TRUST COMPANY SECTION.
the subject fully. His paper was exceedingly interesting and very instructive.
Chairman: We all appreciate the excellence of Mr.
Vlerllng's paper and the truth of the remarks just
mada Still I feel that we will be glad to have a discussion on the subject

and remarks upon

it,

and

if it

were

possible to pick a flaw in Mr. Vlerllng's paper and thus
to strike him. we would give him a chance to hit back,
is fully capable of doing it.
Mr. .John W. Taylor. Cashier City Savings Bank,
Pittsburgh, Pa.: 1 move that a vote of thanks be extended to the writer of the paper. Of course, many of
us who are lambs in the fold may feel timid, but next
year we will grow bolder.
Motion seconded and unanimously carried.

and he

NOMINATIONS AND ELECTIONS.
Chairman: The next business before the meeting is
the nomination and election of three members of the
Executive Committee to serve for three years. The
gentlemen whose terms expire this year are Frank P.
Gibson, of The International Trust Company of Denver,
Col.; Otto T. Bannard. of The Continental Trust Company of New York City, and Arthur Heurtley, of the
Northern Trust Company of Chicago, 111.
Mr. Bannard's resignation was offered to the midsummer meeting, and Mr. L. L. Stanton, of New York,
was appointed in his place temporarily. Those three
places on the Executive Committee are to be filled and
the Chair will entertain nominations.
The following gentlemen were then placed in nomination:
E. A. Potter. President

American Trust and Savings Bank, Chi-

cago.
Mord Carter, of the Danville Trust Company of Danville, Ind.
Louis L. Stanton, Vice-President of the Standard Trust Com-

pany. New York.
Mr. Reninger, of Allentown, Pa.
C. J. Rhoads, Treasurer of the Girard Trust Company, Philadelphia.
F.

Wade, President Mercantile Trust Company,

St.

Louis.

Motion made that nominations be closed and that
the Section proceed to ballot.
Mr. Enright: Before that question is put I would
like to second the nomination of Mr. Festus J. Wade,
of St. Louis, the President of the Mercantile Trust Company, a very able and self-made man, and a man of
large affairs.
My idea in doing this is to suggest that
we should pick very prominent men for these important
positions, and not simply to advertise some man less
well known.
Mr. Emerick: I would like to second the nomination
of Mr. Reninger. of Allentown, Pa.
I know the gentleman and know that he would make a good executive
officer.

Mr. Stanton's nomination was also seconded, and it
was stated that it had been the custom in cases of that
sort to re-elect the retiring member who has served for
the unexpired term.

Nominations closed.
Motion made, seconded and carried that the Section
proceed to elect by ballot.
President appointed as tellers Messrs. Thatch, of
Cleveland, and Hays, of St. Louis.
A motion was made, seconded and unanimously carried

that the three

men

Chairman: Very

not attend the meetings.
Mr. Reninger: I wish to make a statement in connection with the nominations.
closed.

As one

of the

nominees

wish to

well.

Mr. Reninger: So that there may be no mistake in
regard to geographical distribution, I would say that
one of the gentleman nominated is Mr. Rhoads, of
Philadelphia. I happen to live just 50 miles away from
that nominee, and I do not want to stand in the way
of Mr. Rhoads's election, if the election is to be territorially distributed, and I would rather withdraw as
one of the nominees if I would stand in the way of the
elevation of Mr. Rhoads.

What

say you, gentlemen

Voices: " Sit down."
.Mr.

Emerick:

Mr.

Reninger

Chairman

the

Trust Company Section of the State of Pennsylvania.
He has attended, I believe, all the state meetings and
all the national meetings for a number of years and has
always taken an interest in this work.
The tellers' report was then made, showing that Mr.
Stanton received 44 votes, Mr. Potter 38, Mr. Wade 25,
Mr. Reninger 24, Mr. Rhoads 16 and Mr. Carter 5.
The Chairman then declared Mr. L. L. Stanton, Mr.
Potter and Mr. Wade duly elected for three years.
Motion was then made that the election be made
unanimous.

Unanimously carried.
Mr. John Skelton Williams, of the Richmond Trust
Safe Deposit Company, was nominated for Chairman

for the next year.

Motion seconded.
Motion was made, seconded and unanimously carried that the rules be suspended, nominations closed,
Mr. Williams be declared elected by acclamation, and
that the Secretary cast the ballot of the convention for

Mr. Williams for Chairman for the ensuing year.

Unanimously carried and so done.
Mr. Williams: 1 desire to express my thanks and
appreciation for the high honor which you have seen
fit to do me on this occasion, and will say that I shall
take great pleasure in doing what I can to advance

and promote the interests of this Section, both during
the term of my office and afterward.
(Applause.)
Mr. Howard Greene, of Milwaukee, was placed in
nomination for Vice-Chairman.
Mr. John E. Borne was also placed in nomination for
Vice-Chairman.
Mr. Gibson: I have worked with Mr. Borne on the
Executive Committee, and know that he was a very
active

and

man and had the interests of the Section at heart,
am very sure that in that capacity he would serve

most acceptably.
Nominations closed.
Mr. Phillips: I desire to second the nomination of
Mr. Borne. He is a man of capacity and diligence and
of wide acquaintance and large influence, and I think
we almost owe it to him to continue him in a position
where he can be of service to the Association, and where
his ripe judgment and rich experience can be always
placed at our disposal, as well for our counsel as for
the formation of our plans.
(The same tellers were appointed.)

SUGGESTIONS REGARDING WORK.
Chairman:

receiving the highest votes

be declared elected.
Chairman: One word of suggestion and advice, and
that is, in electing members of the Executive Committee
we should bear in mind especially this qualification—
namely, that the men will attend the meetings and will
show enough interest to attend the meetings both of
the Convention and of the Executive Committee.
It
makes no difference how prominent a man may be in
financial circles, he will not do us any good if he does

shall

The nominations are

Mr. Reninger:
make a statement.

Ill

will be glad to receive suggestions as

and I trust that you will now
give free expression to your opinion in regard to this
work, and any suggestion for improvement.
Mr. Orde: I have this suggestion to make, and that is

to the

work

of the Section,

all

we devote more time to the work of the Section
during the Convention. My suggestion is that we have
our first session on the first day of the Convention, and,
if possible, at an hour that will not conflict with the
sessions of the general Convention. While our work
that

distinctive from that of the banking feature of the
Convention, yet a large majority of our members are
also interested in the technical work of the Bankers'
Convention, and want to attend both sessions. So far
is

BANKERS' CONVENTION.

11:

as the papers ami discussions are concerned, wo get
them in the printed report, but a very .meat advantage
of this Section is meeting together, and meeting each

other personally, so :is to facilitate future business, as
well as the matter of pleasure, and 1 think if we had

our meeting the first day of the session, and had a second meeting afterward, we would accomplish a great
deal more work, and that it would be more satisfactory
in every respect
Mr. Mauley: Mr. Orde's suggestion is a most apt one.
We could very readily divide up our meetings. We
could have a meeting on the first day of the Convention, and a shorter session each day during the Convention, which would make our sessions more profitable.
Mr. Phillips: I think it would be well to bear in mind
that much good fruit would come from an exchange of
ideas during the year. Many good thoughts may occur
to us after we have gone away, and if those thoughts
were promptly communicated to the Secretary of the

good results might follow.
Mr. H. L. Cabell, of Richmond: It seems to me that
one of the best things ever done by this Section is the
publication of that book of forms. I understand that
our membership increased 130 last year, and I think it
would be very well to recommend the proper committee
to have a second issue of that book made, so that our
new members can supply themselves with it.
Mr. F. J. Wade: I think a question box might be a
useful thing. I have been in the business only fifteen
months, and perhaps it is not necessary for me to ask
questions, but I believe a discussion on various points
would be of very great benefit to us, especially to those
who are new in the business. I think that even young
as we are we might also be able to make a suggestion here and there, beneficial to even the older members, and that some such method as that would make
these meetings a greater success.
Mr. Reniuger: It might be well to establish some
relation between this Section and the States, the same
relation as exists between the American Rankers' AssoSection, possibly

PennsylTrust
a
organized
its
in
vania,
Company
Trust
the
Company Section. In some States
Sections are not recognized in the State Hankers' Association, and in such States it might be well to form a
Section of Trust Companies. If that were accomplished
ciation

and the various State Associations.
Association,

would become closer and
membership increased.

the relations
find its

would

ELECTIONS COMPLETED.
announcement that Mr.
Mr. Green 14.
and
Rome has received 36 votes
The Chairman then announced that Mr. John E.-

The

tellers

then

made

their

Rome was

duly elected.
Mr. Merrill: If the Trust Company is to meet each
day. inasmuch as we would all like to hear the opening
proceedings of the American Rankers' Association, I
would suggest that the afternoon of the first day would
be suitable for our work.
Chairman: The Trust

Section nominates
each year one of its representatives to represent it, as
Ranka body, in the Executive Council of the American
Mr. Rreckinridge
ers' Association, for three years.
of this
representative
the
Jones, of St. Louis, has been

Company

His term expires this year, and it is
customary to have the nomination made, by the Execuwhich
tive Committee, and the Executive Committee
make
and
to-day
meet
will
has been recently elected
Section so far.

the selection.

Mr. Gibson: Refore we adjourn I should like to move
that the thanks of the Executive Committee and of the
Section be extended to Mr. Greene and the other officers
of the Milwaukee Trust Companies for their interest and
assistance in making this meeting a success.
Carried by rising vote.
Adjourned.

Co.,

Nassau Street,

NEW

this Section

Parker: Mr. Rreckinridge Jones told me
that when they commenced business in St. Louis they
went to Louisville and interrogated the Trust people
there, and he jotted down the points that he would like
St.
to inquire about; and by the time he had got to
questions.
some
70
of
list
a
he
had
Louis he found that

Mr. E.

Winslow, Lanier
17

has

YORK,

BANKERS.
DEPOSITS RECEIVED SUBJECT TO DRAFT.

INTEREST ALLOWED ON DEPOSITS.
SECURITIES BOUGHT AND SOLD
ON COMMISSION.
Act as Fiscal and Transfer Agents.
Also as Agents for Corporations, for the payment of interest and
dividends.

Foreign Exchange, Letters of Credit.

Full text of Commercial and Financial Chronicle : October 26, 1901 : Bankers' and Trust Supplement, Vol. 73, No. 1896

FRASER