Full text of Commercial and Financial Chronicle : September 16, 1899 : Bankers' and Trust Supplement, Vol. 69, No. 1786

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BANKERS' MSTRUST
SUPPLEMENT
TO THE

ommercial &

f iNANCiAi

hronicle.
(][

GENERAL INDEX:
EDITORIAL ARTICLESBUSINESS PROSPECTS
WORK OF CONVENTION
THE PAPERS READ
TRUST COMPANY PROCEEDINGS
-

Page.
23
26
27

BANKING SECTIONREPORT OF SECRETARY
REPORT OF TREASURER
REPORT OF PROTECTIVE
COMMITTEE
REPORT OF COMMITTEE ON
EDUCATION
REPORT OF COMMITTEE ON
FIDELITY INSURANCE
TRUST COMPANY SECTIONORIGIN AND DEVELOPMENT
OF TRUST COMPANY IN
NEW YORK
TRUST COMPANY MOVEMENT IN PENNSYLVANIA
-

UNIFORM BLANKS AND
Credit methods

BANKING SECTION-

46
48
51

Paob.

WHAT CAN BE DONE TO PER-

FECT OUR CURRENCY?
THE EFFECT OF BANKS ON

THE. PEOPLE'S PROGRESS

STATES CAN
BECOME WORLD'S CLEARING HOUSE
CONVENTION PROCEEDINGS
IN DETAIL
-

INVESTMENT OF TRUST

FUNDS
DETAILED PROCEEDINGS

HOW UNITED

PRESIDENT RUSSEL'S
ADDRESS

WILLIAM

76
79
81

REPORT OF EXECUTIVE
COUNCIL

DANA COMPANY, PUBLISHERS.

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

18«9,

by William

NEW

Dana Company, in office of

YORK.

Librarian of Congress, Washington D.

GIRARD TRUST COMPANY
CHARTERED

1836.

CAPITAL, $1,000,000.
Acts as Trustee of
Registrar and

Corporation
Transfer

Assumes Entire Charge of
Interest

SURPLUS, $2,000,000.

Mortgages,

Acts

Agent.
Real

Assignee and

Estate.

Depositary

Allowed on Individual and Corporation

under

Financial

Receiver.

Plans of Reorganization.
Individuals or

Agent for

Accounts.

Trustee,

Administrator,

Executor,

Corporations.
Safes to

Rent

Burglar-Proof Vaults.

OFFICERS.
EFFINGHAM B. MORRIS, President.
WM. NEWBOLD ELY, Treas. and See'y.

HENRY TATNALL,
N. B.
A. A.

EDW. SYDENHAM PAGE, Ass't Sec'y.
CHARLES JAMES RHOADS, Ass't Treas.

CRENSHAW,
JACKSON,

Vice-President.

Peai Estate

Officer.

Ass't to Pres. &»

WM. E. AUMONT,
GEORGE TUCKER BISPHAM, Solicitor.

Vice-Pres.

Manager Trust Department.

MANAGERS.
EFFINGHAM B. MORRIS.
JOHN A. BROWN, Jr.
BENJAMIN W. RICHARDS.
JOHN B. GARRETT.

WILLIAM

GEO. H. McFADDEN.

H. JENKS.

GEORGE TUCKER BISPHAM.

PEMBERTON

WILLIAM
FRANCIS
HUTCHINSON.

H.
I.

HENRY TATNALL.

GAW.
GOWEN.

ISAAC H. CLOTHIER.

JOHN
JOSIAH M. BACON.

Noftk East Corner Broad and Chestnut

PHILADELPHIA,

PA.

W. H. THOMPSON, Pregt.
B. F. EDWARDS, Cashier.
VAN BL^VRCOM, Vice Prest. C. L. MEERELL, Asst. Caahler.
JNO. NICB:ebson, 2d Vice Prest. W. B. COWEN, 2d AMt. Cashier.
J. C.

THE
National

Bank

Commerce

IN ST. LOUIS,
WITH CAPITAL OF

FIVE MILLION

DOLLARS

SURPLUS AND PROFITS OF

THREE MILLION DOLLARS
AND DEPOSITS OF

TWENTY-SEVEN MILLION DOLLARS.
Solicits

Accounts of Banks, Bankers, Merchants and Cor-

porations.
B. ^.

EDWARDS,

Cashier.

SIMS.

Streets,

BANKERS'andTRUST
SUPPLEMENT
TO THE

P inawcial ^ hronicle.

C ommercial

[Entered according to Act of Congress in the year 1899, by William B.

VOL.

NEW

69.

Dana Company,

in office of Librarian of Congress,

YORK, SEPTEMBER
A

Cbe ebronicle.
The Commercial, and Financial Chronicle

16,

scope.

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

periodically,

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 Chronicle.
The Quotation Supplement,

issued monthly, is likewise fur'^jfthed without extra charge to every subscriber of the Chronicle.

The Street Railway Supplement,

issued semi-annually, is
also furnished without extra charge to every annual subscriber of
the Commercial and Financial Chronicle.

fiscal

NO. 1786.

1899.

brief review of the events

United States

a weekly news
paper of 61 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 within its
is

Washington, D. C]

and

results of the

year ending June 30th

last, is

from the data thus furnished, much
men as to trade and
the money market will be based.
The Treasury statistics for the year ending June
30th, 1897, showed an excess of merchandise exports
over imports, in round numbers of $287,000,000^
and, the year ending June 30th, 1898, an excess of
$615,000,000. To these remarkable figures, which
first in

order, as

in the conclusions of business

much

excited so

have

now

excess in

favorable

comment

last year,

add the extraordinary statement of an
1899 of $530,000,000, footing up a grand
to

total for the

The

three years of $1,432,000,000.

from
Bankers' and Trust Supplement.
Terms for the Chronicle, including all the Supplements, are Ten
Dollars within the United States and Twelve Dollars (which includes

very natural conclusion formed at this period last

postage in Kurope.

the

time to time

Besides these Supplements, others are issued

like the present

WILLIAM

DANA COMPANY,

Pine

St.,

corner Pearl

Publishers,
St.,

New

'Vork.

year was
could

phenomenal trade balance
expected to continue, as, under

that such

not

more prosperous conditions of the country, we

should be liable to a large increase in our imports,
while more abundant harvests in Europe would be
likely to diminish exports,

grain and other food products.

BUSINESS PROSPECTS.
By

O. D. Ashley, President

Wabash

in the

and Electricity, when
commercial situation, as well as in the

political affairs of the world, exercise their influence

with startling rapidity, no
value, but

it is,

human

forecast

much

nevertheless, useful to study the gen-

guard as much as possible
is all we can do in the
way of foresight. The merchant who takes an account of stock at the close of a year and ascertains
from his balance sheet the results of his business,
will, if intelligent and careful, study the markets and
the prospects of trade, and thus enlarge or diminish
his operations according to his judgment of the situation and the trend of commerce.
It is in this point
of view that an exchange of ideas, based upon preeral indications

and

against contingencies.

vailing conditions,

This

useful even

a matter of fact

the imports have increased about $81,000,000, but

Railroad.

In this age of Steam

changes

and especially those of

conclusions dif-

exports have increased in

volume,

although

am.ount realized has been diminished by the
$4,000,000.

This

diff^erence in price of

sum

more than accounted

for by the
wheat alone, which brought an

average of about 23 cents per bushel
In short, these statistics prove
1898.

same

the

less

than in

that, at the

wheat as that realized in 1898, the
figures would have recorded an even larger excess
of merchandise exports over imports than in 1898.
It is worthy of notice at this point, as an indication of further remarkable development in foreign
price for

trade, that July, the first

year,

month of the new

fiscal

shows an excess of merchandise exports over

imports of $34,983,000. This is a gain of about
62^/2 per cent, over the excess of the last fiscal year.

To count upon

the continuance of such an extraor-

dinary gain would be an oversanguine expectation

;

Whoever ventures positive predictions assumes
superhuman knowledge, but it is quite within our
power to discuss the probabilities and to form opin-

but the fact proves that the trade currents are

whether favorable or unfavorable, founded
upon accomplished facts and their natural influence

be,

upon future

conclusions from such palpable evidences of pros-

fer.

ions,

transactions.

still

flowing in our favor.

However fallacious some of the calculations may
when founded upon an apparent trade balance,

would be

difficult to

draw other than

optimistic

24:

BANKERS' CONVENTION.
The dawning

perity.

visible in the

of better times

became plainly

of 1897, and the fruition of
hopes then entertained has only been
delayed by the
war with Spain, which, during its brief
continuance,

i^iNANciAL Chronicle
significance.

ed debt, $1,040,975,000 in
preferred
$1,981,075,000 in common stock.

and awakened
To the timely warning
which this statement conveyed, and
to the distrust
which had been gaining ground in
Wall Street, we
may ascribe the wholesome check given
to this' dewell founded apprehension.

scription of enterprise, as well
as to the wild speculation which had been spreading
at stock exchange
centers throughout the country.

its

Or, in other words, what are the contingencies against which we should guard ?

twelve months shows a vast expansion of trade
and
industry and a material advance in the prices of
raw
materials, as well as of manufactures, while, at
the
same time, the products of agriculture have found
well sustained markets.

Mining

industry, also, has been stimulated by an
extraordinary demand and large profits. Thus, for
copper, zinc, lead, iron and coal, the wants of

con-

sumers have appeared

to be largely in excess of the

productive capacity of mining industry, and the
whole country teems with bustle and activity in all
departments of trade and industry. Thus far there
is no indication of over supply, but,
on the contrary,
the

demand continues unabated and

of industrial enterprise

still

the development

in progress.

worthy of notice, too, that this extraordinary movement is not confined to this country, but seems to
have extended throughout the civilized globe. It
seems not unlike an awakening of trade and industry from a long sleep, and the sudden
application of
this dormant power is displayed in the record
of results, available to all

who

seek for information on

this subject.

But perhaps the most conspicuous feature in the
business evolution of the period is to be found in
the
rapid increase of so-called Trust Combinations,
but
more correctly designated as industrial companies.

Such combinations have been more or less popular
for some years, but the movement in this
direction
has lately been of such magnitude as to attract especial notice.
The number and variety of the industries and the extent of the capitalization
have bewildered the community, and something like the multi-

schemes during the South Sea Bubble
times seemed to be in contemplation. This peculiar
development has naturally excited the fears of pruplication of

dent

men and

This phase of
undertaking has undoubtedly been the
most
dangerous feature developed in our

and famine, or calamities which

indications furnished by the conditions of trade
and
the money markets, and in an examination of
precedents, draw, perhaps, some wisdom from
the lessons
of experience.
superficial view of events in the
world of commerce and finance during the last

the unfavorable

comment of cautious

bankers, as well as the denunciation of politicians.
An extended list of such organizations, during

and

exhibit of this character brought
the subject
to public attention in
concrete form,

no human foresight can anticipate, cannot be taken
into consideration.
These unwelcome visitations
are beyond human calculation, but we may study
the

stock,

guine expectations of hopeful men. The
most interesting and the most important question,
therefore,
which presents itself, is that of permanence or
continuance of these prosperous conditions.
Prosperity is with us.
How long can we count upon

pestilence,

in July last, was of startling
Here were companies, said to be in proc-

embracing an aggregate capital of
?3,i40,85o,ooo, of which $119,800,000
was in bond-

conditions upon which those anticipations
had been
founded. In short, the country has enjoyed
an era
of prosperity, during the two years ending
June 30th
last, quite equal to, if not in
excess of, the most san-

War,

30th. published in the

ess of formation,

suggested a possible interruption of the
favorable

stay

months ending June

six

t^ie

Autumn

financial

and manufacturing

expanding trade

industries, and, if its recognition

leads to

more conservative and prudent methods
the situation will be much
improved and the

country
be saved from the disastrous
results of a prodigious inflation.
will

It is not,
trial

however, to the organization of induscompanies, perse, that opposition is
well found-

The objections offered to the consolidation
of
trading, manufacturing, or mining
industries upon
the score of extinguishing
competition, or of diminishing the number of employees,
are not tenable
against the arguments in favor of
ed.

greater

economy

and the concentration of skill and
energy, not to
mention the advantages of an increase
in working
capital.
There is nothing in the organization
of the
body politic or in the character of
our republican
institutions to prevent the
association of
industrial or trading companies,
if

men or of
such associations

are considered by the interested
parties more conducive to their success, provided such
organizations
are not clearly opposed to the
public good.
If such
combinations, however, are formed
for the purpose
of extorting higher prices from
the consumers, complaint,

and perhaps

But no such
tions.

restriction, might be justified
result has yet followed these
organiza-

the contrary,

two conspicuous examples
furnished in the Standard Oil and
Sugar Refining

Companies, prove that consumers have
had the beneof lower prices than would have
been possible had
the industries remained under
individual managefit

ment.

this score, therefore, opposition

is unreasuppose that any combinations
of this character can monopolize
industries.
Competition is by no means extinguished
by the union of
producers and the regulation of supply.

sonable.

It is idle to

Whenever

any of these concerns attempt the extortion
of unreasonable profits, a powerful rivalry would
be stimulated with an abundance of capital to
support it.
A movement, therefore, on the part of industrial
companies in that direction would be extremely
stupid.

more forcible objection to these combinations
can be found in the extravagant
over-capitalization
adopted by the promoters. In most of the
schemes
offered to the public for subscription
debt and preferred stock are fully equal

the bonded
to.

and often

BANKERS' CONVENTION.
in excess of, the real value of the property repre-

common

sented, while the

which

simply a bonus

divided between the promoters and the orig-

This

inal proprietors.

projects,

stock

and

all

the

weak point

in all

such

more dangerous on account of
Sugar and Tobacco combinations,

the

the success of the

which have given large returns to the holders of
common stock. These two concerns deal in articles
of universal consumption, and have not only been
shrewdly managed, but, the Sugar Company especially, have been favored by circumstances.
Now

Higher rates for money at financial centres in
Europe and the more active demand, and a corresponding movement in Wall Street, have led to much
discussion and some foreboding as to the near future of the market, but it is not probable that any
serious apprehension of real stringency has been entertained by intelligent bankers.

to conclude that similar results are likely to follow

There is not, at
the present time, nor has there been during the summer, any indication of what can be called a tight
money market. An advance in rates of interest from
the low figures quoted in Wall Street on call loans
during the first six months of the calendar year is

niunerous projects announced would be ex-

but the natural result of the greater activity in trade

some
com-

and in all departments of industry. If the consequence of this increase in the volume of business is
a moderate advance in the current rates of interest,
it is a sign of greater prosperity, instead of a symp-

in the

tremely foolish.

of course, possible that

is,

of these concerns may earn dividends on their

mon stock, but a year or two of exceptional activity
and abnormal demand cannot be safely taken as
Exaggerated valu-

proof of permanent prosperity.

tom of adverse

conditions.

glut in the supply of

ation, therefore, as illustrated in over-capitalization,

capital at 15^ or 2 per cent,

furnishes the strongest argument against industrial

dence of business stagnation, while

stocks.

Legislation can doubtless reach this abuse

of excessive capitalization, but, at

all

events, a clear

employment

at 4, 5, or

6 per cent,

a healthy expansion of trade

tinderstanding of the facts would enable investors to

inferences to be

form a correct judgment for themselves.
The growth of these industrial companies has
"been largely stimulated by the surfeit of money and
the scarcity of good dividend investments. It has
been impossible for some time to buy strictly firstclasS; or even fairly acceptable, bonds or stock which
would yield an income of over 3^/^ or 4 per cent, on
the market prices, and to many 5 or 6 per cent, is a
necessity.
Hence the temptation to buy industrials
which promise an income of 6, 7, or 8 per cent, on
preferred stock, and even larger on common stock,

call loans, is

an evi-

its

active

equally proof of

The

and industry.

the

Rather than to be limited to an

very great.

come of 3 or 4 per

cent.,

in-

people are naturally inclined

to take the chances of a better profit in business affairs.

Industrial

stocks

the

offer

opportunity of

indulging this fancy, without subjecting the investor
to the danger of copartnership

liability.

Under

the

drawn from

the recent pulsations in

money market are not in the direction of real
stringency, but may point to a higher range in the
In other words, while the supply

rates of interest.

may

be equally abundant, a higher price must, per-

Spasmodic movements
centres, but no indications of a curtailment in the supply of capital have
been developed. This country has undoubtedly a
large credit balance in Europe, and while it can be
employed at more profitable rates than in the home
market, it will remain there but, on the other hand,
haps, be paid for

may

its

occasionally visit

use.

money

;

needed here

at better rates of interest,

will flow

across the Atlantic promptly and in ample volume,

The

according to demand.

financial relations be-

tween the United States and European money centres are so intimate that an adjusting and equalizing
process frequently takes place, in obedience to eco-

peculiar circumstances which render the profitable

nomic law, which

employment of

vorable markets.

capital difficult

would be hard

This country has, beyond question,

devise a better method for the investment of capital
in business enterprise,

where the investors are una-

ble to take personal charge of details, than is provided
in these industrial organizations

;

but

it is

manifestly

unsafe and dangerous to introduce these schemes at
greatly inflated valuations.
Honestly and fairly
capitalized, substantial advantages

might be gained,

not only by investors, but by the original proprietors.

The

floating of

enormously

many

inflated

of these concerns, however, at

valuations

and

.the

issue

upon such fictitious bases, cannot be too
strongly condemned.
The check already given to

stocks

these gigantic speculations
not, they will

become, by

may

far,

be effective, but,

the strongest

menace

in the future of our business affairs.

The crop

conditions of the country, in regard to

which a trustworthy opinion can now be formed,
must be considered, upon the whole, very satisfactory.

The

indications point to another large cotton

attracts capital to the

large

amounts of money

have been higher there than here.

This peculiar

—peculiar because never much of a factor
the money market
during the
two or
the
three years— has led
much floundering as
condition

until

last

financial future, suggested

foreign exchange.
that,

when any

market,
capital,

erratic course of

It is tolerably safe to

will not

any crop yet harvested.

money

come from a diminished supply

but from a shock to public confidence, which,

and

its

inevitable collapse, will

startle the business world.

of such an event

evidence

yet visible above the financial

horizon.

The transportation interest, as reflected by railway traffic, shares in the general prosperity, so far
as the gross earnings of the lines prove such partici-

The

show handalthough comparing with a pe-

some gains over 1898,
riod of improvement over the previous year

largest yield of

conclude

serious revulsion threatens the

with over-speculation and
thrill

by the

ception of winter wheat, an abundant supply. Corn,

probably give the

for

the simple reason that the average rates of interest

pation.

late estimates, will

fa-

employed

London and Berlin

crop, and our cereal products promise, with the ex-

according to

most

returns of the year thus far

A contin-

uance of the present conditions promises for the

fiscal

BANKERS' CONVENTION.

year ending June 30, 1900. the largest aggregate in
gross earnings in the railway history of the country,
but, in consequence of the low rates, it would be

over-sanguine to expect a corresponding gain in the
net proceeds.

Very large outlays

for rolling-stock

also tend to a reduction of pres-

and betterments

such expenditures are charged to operRailway property is, nevertheless,
ating expenses.
entitled to more favorable consideration, in view of
ent profits,

the growing volume of traffic and the diminishing
severity of competition.

may

be suggested
in the probable agitation of the silver question dur-

remote cause of uneasiness

ing the ensuing year, when

the political parties or-

ganize for the Presidential campaign, but the silver

and

were perfectly plain. The early leadwho had been so active in directing its affairs, and who by their papers and addresses, in which was displayed an insight into
banking and financial questions uncommon in those
days, had given the body a high place in public esti-

ity referred to

ers of the Association

mation

—men

—

the late George S.

Coe were
New leaders were slow in coming to
At the same time the Association aplike

passing away.
the front.

peared to be losing coherency because of a failure
to undertake sufficient practical work relating to
the every-day affairs of the banks and in which

members

the

all

had a common interest.
Secretary, Mr. James R.

necessarily

Furthermore,

the

Branch, pomts out in his report, sharp differences of

not a serious threat

opinion had developed as regards the relations be-

The fallacy
to the financial affairs of the country.
" free silver " has been clearly demonstrated.
Its
of

tween the various State Bankers' Associations and
the American Bankers' Association, many holding

issue has lost

its vitality

revival will be a

huge

political blunder.

possible to carry the " 16 to

But even

" proposition

from the
membership

that to obtain satisfactory results delegates

must be admitted

were it
by the popular vote, the enforcement of such an absurdity would be found to be utterly impracticable.

in the national association.

years have been a period of continued progress.

administration elected with such a plank in

its

platform would be forced to abandon it. No legislation can compel confidence any more than it can
control taste and appetite

;

and nothing short of an

insupportable tyranny can force the people to accept

a false valuation of metallic money.

Whatever may

State Associations

But

all this

has

now been

The new stimulus came

The

changed.

in 1894.

was

last

few

at the an-

nual Convention of that year that the celebrated

scheme for the reform of our currency, known as the
Baltimore plan, was promulgated by the assembled
bankers.

This,

coming

critical

juncture in the

be the result of the next Presidential election, gold

country's history, attracted great attention, as will

remain the only real standard of value in spite of
the absurd theories of the free silver school. To

had the effect of confirming the
Association in the prominent position it had previously held. No matter whether one entirely agreed
with the scheme proposed, the bankers were devotingthemselves to consideration of one of the most pressing problems of the day, that was the important fact.
It was in 1894, too, that the Protective Committee
began its work in its present form. This Committee
undertakes to protect the banks from the operation
Great success has
of swindlers and other criminals.

will
all

adopt any other conclusion would be to assert that
controlling

numbers of the people are steeped

in ig-

norance.

Labor troubles are also possible as the natural result of an increased prosperity, of which working-

men

will

demand

a share, but judicious treatment of

questions of this character should eliminate

them

Reasonable consideration of matters in dispute between employers and
employed will save hard feelings and severe losses to

from the

list

of contingencies.

both.

be remembered.

attended

work

of that committee.

Here, then,

—

was development in two directions along the
of theory and public policy, and along the line

there
line

Summing up

the evidence furnished by the past,

of dealing with practical questions relating to the or-

and weighing the probabilities of the future, it is
difficult to form other than favorable anticipations

dinary business of the banks. Furthermore, in 1895,
the question of the relations with the State Bankers'

Excessive enterprise, over-

Associations was also settled, a fule being adopted

speculation and inflation in values are the principal

permittingthe State Associations to send one delegate

of business prospects.

dangers to

be feared and

to be avoided,

possible.

THE CONVENTION AND ITS WORK.
The American Bankers' Association
not losing any of

its

evidently

usefulness, but developing aug-

mented strength, industry and authority with each
added twelve months of existence. There was a
time, only a few years ago, when it seemed as if this
great guild, which had had such a long, such a distinguished and such an eminent history, was living
more on past traditions than in an effort to maintain
and continue the old record of progress. Some
apprehensions consequently were felt concerning
Now no one any
the future of the Association.
longer entertains any doubts. The last four years
have been the most prosperous in its career.
The reasons for the temporary period of inactiv-

members to the American BankThe effect of all this is seen in the
ers' Convention.
expanding membership of the Association. Last year
for each fifty of their

James R. Branch, reported that
1894-5 the number of delegates had in-

the Secretary, Mr.

from

1,71

creased to 3,350 in 1897-8; this year he reported a
further increase to 3,915, and in the Convention Mr.

Alvah Trowbridge, the chairman of the Executive
Council, stated that if the Secretary had stayed at
home a day longer he would have had 3,930 memMr. Branch computes the capital,
bers to report.
surplus and undivided profits of the 3,915 banks
(not counting the 372 private bankers included in the
number, who make no public reports) at $1,230,000,000,

and

their

combined deposits

$4,501,-

000,000.

The proceedings at the present year's Conventionshow that the Association's usefulness continues to

BANKERS' CONVENTION.
Among

make room for the
Though the Convention is

with, so as to

usual quota of

important things accomplished at this Convention,

papers.

in session three

we should enumerate

days, there

developed along broad

ibe

lines.

the most

unanimous adoption of
the resolution offered by Mr. E. O. Leech, urging
•Congress at its next session to enact a law unequivocally establishing the gold standard and making all
the obligations of the Government and all paper
( i )

the

:money, including circulating notes of national banks,

redeemable

in gold,

and providing furthermore that

when paid

United States legal tenders,

the

into

Treasury, shall not be reissued except upon the de-

an equivalent amount of gold

This
Another
important step was (2) the indorsement by the Convention of Mr. James G. Cannon's proposition of a
uniform property statement blank and also approving his system of Credit Departments for banks.
posit of

coin.

was appropriate as well as timely action.

There can be no doubt that this last will prove of
great service to the banks. Mr. Cannon has devoted
many years of his time to the development and perfection of his system of Credit Departments, working it out to the smallest details, and the banks owe

work

the

nearly always difficulty in completing

The

laid out.

present year

all

the prepared

addresses were crowded into the third day, though

one at least had been assigned to the previous day.
The omission of the call of States would mean a very
important saving of time. The persons who speak
By far the most nuat this call are of two classes.
merous class consists of those who have nothing to

who boldly admit the fact, but who feel called
upon to make a few remarks, so that it may not appear that their States are unrepresented. The other
class consists of those who have prepared themsay,

selves for the occasion.

In a few cases this leads to

something worthy, but the general tendency is towards undue length. The representative from Kansas, as will be seen from our report of the second
day's proceedings on a subsequent page, prepared a
contribution embracing over 2,400 words. This

was supposed

to be

crowded

into the space of five

minutes, the time allowed under the rules.

We need

hardly say the matter prepared

often too lengthy

this call of States

The Conven-

seems to us
could be omitted no one would

tion (3) also voted in favor of the adoption of the

afforded for more useful things.

liim

debt of gratitude

for

disinterested-

his

ness in placing the results of his labors so completely

and unreservedly

at their disposal.

bond for employees copyrighted by
the Committee on Fidelity Insurance.
It is only
•proper to say here that this Committee on Fidelity
Insurance (Mr. Arthur C. Anderson, chairman) has
rendered very efficient and valuable services. Its
report is published on another page, and contains a
great deal of information which it must have taken

to be delivered.

suffer,

and time be

"form of fidelity

much

pains to collect.

There was one departure in the proceedings of
the Convention this year which should not pass unnoticed.
What some of the members are pleased to
term the " literary " feature of the proceedings, was
decidedly less prominent than heretofore. By " iit•erar)' " feature

dresses

meant, of course, the prepared ad-

—the portion of the Convention's work which

comes most

Those opposed

public notice.

these addresses seem to have had their way largely.
Last year there were eight of these papers, nearly all

The

thoughtful, scholarly efforts.
•official

programme provided

regard

the

present year the

for only four altogether.

elimination

these

addresses

Admitting that pleasure and the
•social features must necessarily always have a prominent place at such gatherings, and that humorous
as a distinct loss.

THE PAPERS READ AT THE CONVENTION.
As

stated in the preceding article, the papers

addresses occupied a

much

less

and

prominent part than

heretofore in the proceedings of the Convention.

Only four papers were provided for altogether.
Three of these were of decided merit. In the other
case, that of Mr. William R. Trigg, who had assigned
to him the subject of " How Can the United States
Become the Clearing House of the World ? " the
speaker evidently did not have notice enough to do
either himself or the topic justice, he

having received

his invitation, according to his own statement, while
he was " summering " with his family. This sug-

gests that

would be well always

to allow

ample

time in the preparation of these important contributions.

They

require and should receive

much

care

and thought on the part of the authors, and it seems
to us that six months would hardly be too long for
the purpose.

In speaking on the subject of " Uniform State-

short speeches are certain to hold the attention of the

ment Blanks and Credit Department Methods," Mr.
James G. Cannon, the Vice-President of the Fourth
National Bank, spoke on a subject which he is pe-

auditors where longer ones frequently

culiarly

yet be

remembered that

it is

fail, it

must

the prepared addresses

that appeal to the public at large.

The American Bankers'

—namely,
world —
ship

its

own member-

the thinking public throughout the

financiers, bankers, economists, public

and students everywhere.

The

men

Association owes

to itself to present to this constituency each year the
best thought of the best minds.

We went

into a dis-

cussion of the matter a year ago, and will not dwell
tipon

further now.

whether the

call

It is

no one else has made such a complete
and thorough study of it. For years it has occupied a large share of his attention, and he has devoted himself to it with a painstaking care which is
rare even in bank officials.
The credit methods
which he urges upon the banks in general have been
in force in the Fourth National Bank, as the result
of his effort, for some time, and they have proved
eminently practicable and eminently successful. In
authority, for

Association has a con-

stituency wider and broader than

competent to discuss. No one else could
have spoken on this subject with the same force or

pertinent to ask, however,

of States could not be dispensed

seeking to procure the adoption of the same safeguards by other banks he is simply endeavoring to

BANKERS" CONVENTION.

Inno-

secure a wider application of these methods.

no matter how needful or useful, almost invariably require a good deal of proselyting, but Mr.
Cannon has presented the system in such a clear and
intelligent manner that it is difficult to see how any
one can fail readily to comprehend it. He went to
vations,

the trouble of setting

Credit Departments

even the proper

office

at great

the

expense three model

upon a plan of mutual co-operation and belongs to
all of the depositors), and in stentorian tones exclaimed, There is the source of all your troubles
and misfortunes.' " But though some were deluded
in that year, the majority of the people were not deceived by the false reasoning of these irresponsible
'

agitators.

showing

Convention,

furniture with which to equip

Referring to the

five millions of depositors hold-

ing two thousand millions of deposits in the savings

army which buys

them.

banks, Mr. Herrick says

His paper is devoted to outlining the features of
the system and the need for it.
There can be no
question that the system if generally adopted will
prove advantageous and minimize losses. Mr. Cannon well says that the accumulation of wealth in this
country and the rapidly lowering rates for money
make it incumbent upon all the banks to scrutinize

the bonds, v/hich builds our school houses, bridges

with the greatest care their loans and discounts, for
they cannot afford to take the chances of loss as in
the past, because of the diminishing returns for the

use of their funds.

refers to

some recent

in-

;

stances of bankruptcy involving great losses to the

rise
at

the banks had had properly

equipped credit departments these losses could in
all probability have been averted.

to the other papers. Col.

Myron

T. Herrick,

President of the Society for Savings, Cleveland, discoursed interestingly on " The Effect of Banks on

Mr. Herrick possesses not
only a clear conception of the true functions of a
bank, but also a perfect understanding of the rela-

tions between
ress

and

banking institutions and human prog-

industrial activity.

pointed out that

by tracing the deposits of the bank to their source,
one may discover the hidden origin of its power.
Its

fountain head

the strongest of

that of self-preservation.

human

instincts,

Every home, every home

and every individual interest is involved therefore, unlike a government or other partisan organization, the bank has for its foundation a constituencv

tie,

;

without class distinction, for

all

it is

built

and supported

the people. Mr. Herrick well says that the best

have obtained where banks have been conducted essentially as individual enterprises, though
he accepts governmental supervision as a proper
function of government.
As has been the case with all useful institutions,
it sometimes happens that demagogues
wishing to
results

gain the favor of the unthinking people seek to play
upon their prejudices and dissatisfaction by pointing
to the vast aggregation of

money

banks as dishon-

accumulated, disguising the fact that it is the
and industry of the people. Mr.
Herrick related an incident which occurred during

estly

result of the thrift

the last Presidential campaign, fought out on the silver issue, when he said that in 1896 the spectacle was

presented of these glib-tongued demagogues holding forth on the street corners of the principal cities
of the Ignited States, offering their spurious wares.
" In

our Public Square at Cleveland, I remember
there stood a pretending Moses with his finger
pointed to one of our institutions which for fifty
years has been a faithful custodian of the people's

money

(essentially a people's bank, since

it is

based

or sink as he

may

He may

hand.

Our

wastes.

see

fit

to use the opportunities

be of the class

family

ties

that

earns

run clear to the bottom,

measured by worldly prosperity. Between the mechanic and the millionaire there is no distinctive title
save that which nature and good fortune have conferred."

Mr. William C. Cornwell, of the City National

People's Progress."

tlie

this

and asylums; our court houses, jails and water
works which paves our streets, builds our roads and
railways, and finances all our industrial enterprises,and which has practically converted the country
from a debtor to a creditor nation. " These are the
real plutocrats of America whom the doors of bank
vaults hide from the lurid vision of the agitator, and
these are the doors which he would batter down.
The existence of class in America is in fancy only.
Every American has an equal opportunity, and may

banks, and shows that

it is

Bank of Buffalo, gave his views as to What Can Be
Done to Perfect Our Currency. In the same way we
have done so many times in the past and in the same
language, he review-s at length the weakness and defects of the existing system,
it

fails to

and shows how utterly

respond to or accord with trade require-

He enumerates three main things that need
done to perfect the currency,
(i) To estab-

ments.
to be

gold standard by law; (2) to cancel or impound the greenbacks; (3) to retire bond-secured
lish the

bank notes and substitute properly safe-guarded
bank notes against assets. He repeats the arguments

we have
trade,

so often ourselves used

if left

to itself,

when he

always provides

its

says that

own ma-

chinery, and the best possible machinery, for con-

ducting

its

safer than

operations.

human

The laws

of trade are

much

laws, because each individual en-

on the alert to see that his own interests are protected, and he is w'orking at it on an
average of ten hours a day. Trade has established
a system of currency of its own, which is perfectly
safe, and satisfactory to the business community,
and that is Check Currency, or Deposit Currency, by
means of which fully 90 per cent, of all business is
done.
This has been perfected without the operation of law, and is just so much more perfect because
of the absence of political bias and legislation on the
premises.
But this Check Currency is used and can
be used to any degree only in the cities and larger
places.
The country, the farming community, the
sparsely settled regions, are unable to use it, and are
deprived by law of their legitimate part of the currency namely, bank notes, which the laws of trade
would long ago have provided if not unjustly restricted by legislation which was designed to aid

gaged

in trade is

—

BANKERS' CONVENTION.
the

Government

an emergency and has been cruel-

should not both flourish, each in

ly kept in force for thirty years after the

the present at least

had been safely passed.

Francis

emergency
Mr. Cornvvell emphasizes
the statement that there is no question that a system of Credit Bank Currency can be devised which
will be absolutely safe, and in its very nature it will
respond to and build up trade instead of pulling it
back and forth and down, as the present system does.
Mr. Cornwell shows that the Administration and
the political party which it represents are pledged,
by their promises on behalf of sound money, to at
least two things
namely, to firmly establish the
gold standard by law, and to divest the greenbacks of
their dangerous power of depleting the Treasury

—

gold.

now

Congress,

adoption of the

for the first time since the

Louis platform,

we need

Bangs, who,

own

its

not go as far
closing his

For
as Mr.

field.

paper,

]^rompted to ask whether the proper development of
both banks and trust companies

may

not lead to the

assimilation of their functions, their regulations

methods of business,

their

and

not to their consolida-

tion.

In view of the foregoing remarks, the reader

need hardly be told that the Trust Company Section
has entirely justified its existence. The present was
only the third annual gathering like the preceding
;

two meetings

was a complete

success.

Mr. Anton

G. Hodenpyl, in his report as Chairman of the
ecutive Council, gave interesting statistics to

Exshow

both branches by this political party, with a good
workin.g majority. That majority has no decent
reason for delay in carrying out its pledges.
It is

growth that has occurred, and we think every one
will agreee with him in the statement that the new
'
Section " " is now a healthy and prosperous child,
with a future growth in strength and power and

good

everything that tends to usefulness

St.

and good business,

politics

The
and Currency Reform are

needful legislation.

controlled in

too, to enact the

friends of

Sound Money

therefore earnestly urged

to direct their energies and their efiforts to
securing
action by Congress in these particulars.

To William

R. Trigg, the shipbuilder at Richas already stated, the topic,

mond, Va., was assigned,
"

How

House

Can

the United States

of the

World

Become

the Clearing

the

Mr. Hodenpyl

absolutely as-

membership
comprises 190 trust companies, having a combined
capital of $94,622,145, with surplus and undivided
profits of $67,838,100, making a total working capital of $162,460,245
and that these 190 companies
sured."

states that the

;

hold cash deposits of $610,113,688.

during the

last

states that

twelve months trust companies with

Mr. Trigg confined himseff
mainly to affirming that the wished-for result was inevitable.
The export of our grain, our cotton, our
lumber, and, by far the greatest of all. our manufactures, is determining, he thinks, the question
where
settlements will be made.
In his estimation the flow

a capital and surplus of $42,000,000 and holding cash

tive.

Mr. Francis

of gold that has heretofore gone to England
will in
the main come to ihe United States and
here the
clearing of the world will be done.
He urges that
it should be the endeavor
of all members of the

Trust

Company

American Bankers' Association to the full extent of
their power and influence to see that all
foreign business, sales, purchases, exchanges, should
be made in
dollars, and not in pounds, invariably in
both, so as
to familiarize the world with our standard
and

meas-

ures.
if

does not strike us that such a course even
feasible would contribute toward making
the
It

United States the world's clearing house.
Trigg speaks glowingly of the part the South

Mr.
is

play in the country's future, and in this no
one will
differ with him, for the South is
endowed with advantages second to those possessed by no other
section of the countrv.

deposits of $210,000,000, have

was

PROCIiliDfNGS.

a wise thought that suggested the organ-

ization of the trust

into the Section.

three papers that were specially prepared for the oc-

casion were interesting as well as decidedly instrucS.

Bangs, formerly of the State

of this city, sketched the " Origin

and Development of the Trust Company in the State
His paper is evidently the result of
of New York."
much research and he has managed to crowd a great
amount of material into a comparatively small compass.
He traces the movement back to the incorporation by the Legislature of 1822 of the Farmers'
This subseFire Insurance and Loan Company.
quently became the present Farmers' Loan and Trust
Company, which is the oldest trust company in the
It will

State.

be observed that insurance against

by fire was one of the original functions of this
company, and Mr. Bangs shows that in some other
loss

methods of the trust comremote period were different from what

respects the functions and

pany
they

in this

now

are.

The word

" farmers " in the title in-

dicates sufficiently the class

these institutions

THE TRUST COMPANY

come

to the proceedings at this year's meeting, the

whom

was intended

the earliest of

to serve.

makes

Mr. Bangs
companies

a facetious reference to the trust
of to-day in their dealings with the " farmers " of

Wall

Street.

The second company incorporated

(in

companies as a distinct branch or
department of the American Bankers' Association.
The trust companies have some of the same func-

1830) embraced and still embraces the words
insurance " in its name, ijeing the New York Life

tions as the banks, but also

separate and dis-

of these institutions in recent years, and their great

Moreover these companies have

magnitude to-day, are facts familiar to our readers.
In a similar way, Mr. Charles K. Zug, Trust Offi-

tinct functions.

had very rapid growth

many

and they consecond only in
importance to the banks themselves. There has
sometimes been friction between the banks and the
trust companies, but there is no reason why they
in recent years,

stitute a class of financial institutions

" life

Insurance and Trust Company.

cer of the

Company
Growth

multiplication

Commonwealth

Title Insurance and Trust
of Philadelphia, traces the " Origin and

Company Movement in PennHe brings together many interesting his-

of the Trust

sylvania."

The

BANKERS' CONVENTION.

toncal facts.
Like Mr. Bangs he is obliged to
note
the association that originally
existed between the
trust and life insurance
business.
Nor is such an
association to be wondered
"
at,

he thinks.

The

transaction of the insurance
business by corporations
was preceded by individual underwriting,
just as the

corporate

management of trusts has been preceded
by individual trustees. When,
however, it is once
recognized that the best provision
against the uncertainties of life is in corporate
insurance, and that the

method of providing an estate with
which one's
obligations can be met after death
is by a life insurance policy issued by a corporation,
the suggestion
best

but natural that perhaps that
estate would be best
administered by a corporate trustee.
Nor can it
be considered strange if the officers
and directors of
a life insurance company should
find a proper expansion of their business in caring
for the estate
which the wise forethought of procuring
a policy in
is

company had provided."
At all events, Mr. Zug finds that in
Pennsylvania
the trust company movement originated
in a successful life insurance company;
that the first grant of
trust powers to a corporation
was by amendment to
the charter of that life insurance
companv; and that
for over thirty years the trust
company business in
Pennsylvania was conducted by life
insurance comfpanies.
The Pennsylvania Company for Insurances
their

•on Lives

and Granting Annuities, chartered
March

10, 1812,

was the

first of these companies.
rard Life Insurance, Annuity
and Trust
was the second company chartered.

enter upon trust

The GiCompany
They did not

company business

until 1836. Both
companies have long since abandoned
the life insurance and annuity business, and
the Girard Company
has changed its title to the Girard
Trust Company.
The address of Mr. John W. Barr,
Jr., the Vice-

President of the Fidelity Trust
and Safety Vault
Company, of Louisville, deals with the
subject of
the Investment of Trust Funds.'
He points out the
duties and responsibilities of
trustees, and speaks in
a careful conservative way.
The difficulties that beset the trustee in making
investments are enumerated.
The different classes of investments
are
passed in review and the opinion is
expressed that
for a permanent, safe investment,
yielding a fair incom.e, prior lien bonds
conservativelv issued for a
long period, by water, gas, traction
or other corporations

performing quasi-public functions,
located in
large cities and with practically
exclusive privileges,
offer many advantages.
Prior
lien

mortgage bonds'

issued within the last few years by
some of the great
railroad systems, he classes as
belonging in the same
category.
He emphasizes the need for very extensive investigations and examinations
preceding the
making of investments, and urges that
such investigations can be made more efficiently
by a well or-

ganized trust company than by an
individual.

BANKING SECTION
American Bankers' Association.
Twenty

fifth

Annual Convention, Held

September

5th,

6th,

and

7th.

Pages
Pages
Pages
Pages

44 to 45
46 to 48
51 to 53
55 to 57

INDEX TO CONVENTION PROCEEDINGS.
Uniform Blanks and Credit Methods What Can be Done to Perfect Our Currency
The Effect of Banks on the People's Progress
United States the World's Clearing House Detailed Report of Proceedings

Pages
Pages
Pages
Pages
Pages

3J to 33

33 to 38
38 to 39
40 to 42
43 to 74

President Russel's Address Report of Secretary Report of Protective Committee
Report of Committee on Education
Report of Committee on Fidelity Insurance

Pages 57

Uniform Statement Blanks and Credit Depai4ment Methods..
By James

Cannon, Vice-President Fourth National Bank, New York.

Mr. President and Gentlemen:
The methods of conducting business have so changed
in recent years that merchants now find it necessary to
sell their goods largely upon open account, instead of taking notes in payment of merchandise indebtedness, and
having the obligations discounted at bank; hence, credit
extended to the merchant must be predicated upon his
solvency. This being the case, it is essential to have at

hand

definite

knowledge as

to the financial responsibility

of the applicant for credit; and this information can be

secured from no better source than the applicant himself. A third party may give valuable impressions, ideas
and opinions; but the facts which will place the creditor
in i)osition to do justice to himself and to the party to
whom he loans money or sells on open account, can only
be obtained from the credit seeker.
In order to have this information in such shape that it
may be referred at at all times by the party who extends
credit, either for money or merchandise, there has been
devised the property statement blank, which has come
into such extensive use during the past ten years. The
property statement blank provides for a tabulated balance sheet with a set of questions so arranged as to
clearly reveal to the bank or the seller of merchandise
such facts concerning the assets and liabilities of the
party seeking credit, as will readily indicate the true condition of his affairs. Such information as is provided
for by this blank, I contend is the only true basis for
the extension of credit. It is time that banks realized
the necessity for insisting on the receipt, at stated intervals, of signed property statements from all their customers who seek accommodation. When a loan without collateral is applied for, it should be established, as a principle of banking and good business usage, that the borrower should make a clear and comprehensive statement
of his financial condition. It is our duty, handling as we
do money belonging to our stockholders and depositors,
to insist upon such protection for our unsecured loans,
and we should have no hesitancy in applying for exhibits.

fect of educating the

borrower to higher standards of

business methods, as many applicants for credit fail to
realize their own precarious condition until their cases^
are carefully diagnosed by a painstaking, conscientious
bank officer from facts revealed by a detailed statement.
By means of these statements, and their careful analy-

unbusinesslike practices are brought to light and the
borrower, if properly advised, is diverted from a dangerous course to one of safety, conservatism and prosperity.
When an applicant for credit makes a showing of his affairs, and unreservedly discloses his financial conditionto his banker, he should then be afforded credit facilities
commensurate with his responsibility and the average
bank balance maintained. This places the whole matter
of borrowing upon a business basis and favoritism is
eliminated. Banks are not private enterprises, but public institutions, whose doors should be wide open, and
whose legitimate facilities should be placed at the disposal of worthy depositors. The obtaining of accommodation sJiould not be as it often is a matter of partiality,
but a right to which every customer is entitled who can.
show that his financial condition warrants his borrowing.
sis,

Good credit contributes largely to a borrower's business success; it gives him greater capital, enables him to
carry a larger stock, and increases his sales and profits.
It should be understood that a request for a statement
does not imply a reflection on the borrower's character,
honesty or business ability; but it is made simply to
secure such information as will enable the banker intelligently to transact his business with his customer.

Some one has
serve his

own

The merchant who desires to
best interests should recognize that his

well said, "

most valuable possession, apart from his actual assets. Is
a sound, substantial and unquestioned reputation as a
credit risk; and that under the prevailing conditions and
demands of business the most effective and eminently
the best way 1o prove his basis for credit is to be willing
to submit a statement of his financial condition."

The subject of a uniform property statement blank
was first brought to the attention of the bankers' associ-

Credit is based on possessions, but abundant assets
are not always requisite for the creation of credit. It is
very desirable, however, that the credit given should

ations of this country by the adoption of a resolution by
the Council of Administration of the New York State

be proportionate to the actual assets of the borrower.
The grantor of credit is a contributor of capital and becomes, in consequence, interested in the success or failure of the debtor; and as such he is clearly entitled to
complete information as to his financial condition at all

recommended

times.

The making

of property statements also has the ef-

Bankers' Association on February

1895, In

which

members of the Association that
they request borrowers of money from their respective
institutions to give them written statements, over their
to the

own signatures, of their assets and liabilities. In such'
form as the committees on uniform statements of the
various groups should recommend. As a consequence of
the passage of this resolution uniform statement blanks-

BANKERS' CONVENTION.

were adopted by all the nine groups of the New York State
Association; and from this beginning, over four years
rapidly until uniform
statement blanlis have been adopted by many other State
The National Association of
bankers' associations.
Credit Men. a large and powerful organization of 2,700

ago, the

movonent has progressed

members, after a year's investigation of this subject, has
also adopted uniform proi>erty statement blanks, and
they are now being widely used. The action of the National Association of Credit Men and of the various State
bankers' associations, has enabled their members to present this subject of statements to their customers in a
proper and persuasive manner; and I believe that the
more general the custom of using the blanks becomes, the
greater will be the savings to banks and merchants securing them. The New York State Bankers' Association,
recognizing the importance of a statement blank, and
having demonstrated its effectiveness, passed a resolution at its last convention, requesting that the American
Bankers" Association adopt uniform statement blanks
for the use of its members. I shall present to you, at the
close of this address, a resolution covering this question,
which I hope will be adopted. I shall also exhibit to

you, from the platform, a chart illustrating my idea of
what a uniform statement blank should be. It is practically a copy, with one or two additions, of the form

used by the

members

of the

New

York State Bankers'

Association.

must not deceive ourselves by thinking that when
procured signed statements we have performed
our full duty and accomplished all that is essential in de-

we have

termining the true condition of the borrower's affairs.
We should not overlook the fact that statements must be
analyzed and every item given the benefit of a careful
consideration. Many statements will show at a glance
such evidences of weakness as to require no further investigation. This information in itself is invaluable to
banks, and they will at once decline to extend any accommodation to applicants making such statements.
After a signed statement is received and analyzed, if
the applicant for credit is not thoroughly known to the
bank, further investigation of a confirmatory nature
should be made; and the result of this investigation, as
well as all data pertaining to the loans and discounts of
a bank, should be properly collated and filed in a Credit
Department. This department should be under the supervision of a Credit ilan, or one of the junior oflicers of
the bank. The Credit Department affords a fixed place
for preserving information relative to the financial standing of individuals, firms and corporations doing business
with the bank; and this data should be kept in such shape
as to be readily accessible to the officers. A good Credit
Man can relieve the officers of an immense amount of detail which involves both time and physical labor.
It is
quite impossible for the oflicers, especially in a large
bank, to personally canvass the trade for details concerning the affairs and business methods of houses in which
the bank is interested, or to personally dictate the letters
of inquiry which in some cases must be written to secure
this information. By assigning a bright, intelligent clerk
to these matters, under proper supervision, the desired
results may be reached with dispatch and with a degree
of accuracy otherwise impossible for the bank's officers
to attain, with the multitude of their responsibilities. It
is the general custom for bank officers to endeavor to remember the facts they learn regarding their customers
instead of committing them to definite records. Experience
has proven that this is very unsatisfactory, as the best
memory becomes hazy as time advances, and the facts
and impressions regarding a depositor's standing and responsibility, if not preserved bj- careful records, become
confused and sometimes lead to losses.
Every bank should have a thoroughly organized and
properly equipped Credit Department. The personnel of
concerns and trade conditions are so constantly changing
that it is almost impossible for a bank officer to keep in
close touch with the variations of business, without having some systematic method of following them.
The

Credit Man who does this work can make his services in
valuable to the bank officer, as he will often see and
bring to the olficer's attention details which might otherwise escape his notice. It is frequently the little things
that give the first inkling of trouble, and an efficient
Credit Man, Avith a properly equipped Credit Department, will keep the bank's unsecured assets in first-class
its losses to a minimum.
Man, carefully instructed in his duties,
should scan the morning papers, especially those giving

shape and reduce

Credit

particular attention to commercial affairs, for the purpose of getting a general idea of business conditions, and

mark and bring

to the attention of the officers of the

judgments, assignments, petitions in bankruptcy, conveyances, niortgages, etc., which may be of
interest to the bank, or its customers. He should prepare
a detailed memorandum of the paper discounted or purchased by the bank maturing each day, and no note entered upon the discount book should have a place in the
pocket book of the bank, until some record is made by
The
him in his department concerning the borrower.
Credit Man should peruse and mark the reports of the
commercial agencies covering the financial standing of
firms about which the bank has sought infoi'mation, underscoring with different colored pencils, the favorable?
and unfavorable comments in the reports. The Credit
Department of a bank should take charge of all applications received for discount, and prepare the proper memorandum concerning ihe same. It should investigate inquiries received from correspondents and customers, as
well as all new accounts which are opened. The Credit
]Man should compare and analyze statements received
covering discounts as well as purchased pai)er.
He
should take for the personal use of the officers a private
transcript of the discount register, and prove his books
with the general ledger independent of the Discount Department, rhus making .a continual check upon that department. All checks returned for insufficiency of funds,
or notes presented and protested in which the bank is interested, should be entered upon the records of his depai'tment. All bills receivable taken by the bank should
be thoroughly investigated, and the files of his department should constantly be up to date. His department
should also have the custody of the average balance
cards showing the average monthly balances of customers. In short, the Credit Department should be the confidential department of the bank. It is also the proper
place for the handling of all past due matter, and it
should be the duty of the Credit Man to see that the
bank's claims are kept before the officers in such a way
as not to be overlooked.
There is not a large mercantile house of any consequence to-day in the United States, that has not a. thoroughly equipped Credit Department, in charge of a competent man; and yet, strange to say, the number of
Credit Departments in banks thi-oughout the United
States can be counted almost upon the fingers of your
two hands. The time has come for the introduction of
this feature iuto the banking business. The accumulation of we.alth in this country, and the rapidly lowering
rates for money, make it incumbent upon us all to scruiinize with the greatest care our loans and discounts, for
we cannot aftord to take the chances of loss as in the
past, because of the diminishing returns for the use of
our funds.
In the momh of August there was filed in New York
City a voluntary petition in bankruptcy and the liabilities of the debtor were .S740,000, with assets of $200.
Among the unsecured creditors were seventeen banks,
who were interested to the extent of ,$2-30.000. Eleven of
bank,

all

these banks

were

New

Y"ork City

and

six outside of

Sixty-three judgments had been obtained by
This exhibit
banks against the insolvent debtor.
these

the city.

speaks for

itself.

There is no question in my mind that if any of these
banks had asked for a detailed statement and made the
proper investigation of the same, they would have saved
themselves from these fearful losses. The time has come

BANKING SECTION.
for a radical reform in

tlie matter of mailing loans by
banks, anil shareholders of banks shonld insist that the
institutions in which they are interested should have
]>r(iperly equipped Credit Departments.
There has been considerable discussion of the ques-

tion of ostablishinn

a Bureau

centrally located ottice, through

of Information,

with a

which could be given

the members of this Association information concerning
parties who are unworthy of credit, or who are continually changing their accounts from bank to bank if they
are refused credit, and also regarding the amount of paper a concern )ias outstanding, as well as vai'ious other
items of this nature. How this can be accomphshed is a
question which I am not as yet able to answer; and concerning the formation of a Bureau, or Association of
Banks, having for its object the protection of its' members by giving to all certain knowledge possessed by eacli
individually, I think much can be said both for and
against. The extent to which members of such an Association should be called upon to impart information to
others is a matter not to be decided hastily. It may be
said here that weiv sucli an Association formed, it is
more than probable that reciprocity betAveen its members would steadily increase, so that in the course of
time it would far exceed the limit of any preconcerted
plan which would primarily meet the approval of its

For example, a bank learns that parties,
are heavily indebted to it, are not solvent; or at least
has reason to fear insolvency in the near future. No

originators.

uniform statement blank for the use of its members, and
by the establishment of the system of Credit Depart-

ments in banks.
I have prepared and

set up, in

room

at the ex-

pense of considerable time and labor, three model Credit
Departments, which I desire to exhibit to the members

These Credit Departments I have
designated as A, B and C. Class " A " is for the use of
banks, with a capital and surplus of $500,000 and over;
Class " B " with a capital and surplus of $100,000 to
$500,000. and Class " C " $25,000 to $100,000. I have also
had printed for distribution to the members present,
blanks as suggestions for each one of these Classes; and
I have carefully selected the proper office furniture with
which to equip them. These Departments will be open,
to inspection during the time of the Convention, and I
will be present, with one or two representatives, to giveof this Association.

such information to the members of the Association concerning them as they may desire. In order that you
might have placed before you some of the important
blanks and cards which are in use in these Credit Departments, I have had prepared for exhibition here today a few of them, which I will show you rapidly from
the platform, after which 1 will offer for your consideration

two

resolutions.

Mr. Cannon here exhibited from the platform, on large

who

charts, eight of Uie principal blanks used in the Credit

Departments, beginning with the opening of an account
and showing the various stages of its progress during the

one would or could expect the bank to voluntarily disseminate this information among the Association members, as it would be fatal to the interests of its stockholders so to do; for in a great many instances its ability
to protect itself is in direct ratio to the debtor's ability
10 shift his indebtedness to some other quarter.
Of

a Bureau of this sort would materially lessen the
number of such cases: but a plan of this kind must not
be entered into hastily, or without a definite knowledge
coui-se,

of the

number and location of the banks which would be
Of course, there ai-e many banks which

interested.

would not be
business

Bureau of this kind, as their
character; and they could not in

interested in a

is local in its

justice be called

upon to bear as much of the expense incurred in the establishment and maintenance of this
Bureau, as banks which would be using its facilities con-

I am Jieartily in favor of co-operation among
banks, but the foundation for that co-operation must
first be laid by the adoption, by this Association, of a

tinually.

What Can Be Done
By William

m'ki.nley's attitude.

The election of 1896 recorded the solemn verdict of the
people in favor of Sound Money.
The campaign was one of the most earnest in many
years. The Sound Money advocates were convinced of
the terrible disasters which would follow defeat, and the
business and thinking men and women were aroused to
great determination in their efforts. The result meant

more than a mere political decision one way or the other.
It meant that outside of politics the people insisted that
a platform meant what it said, and tliat sucli legislation
must be enacted as would save the nation from future
danger of financial dishonor and destruction of the property of the citizens by repudiation or

l)y

involuntary

bankruptcy.

said:

first

HIS FIRST MKSSAGK.
message after election President McKinley

this

finally placed to

exhibit

the

Convention

adopted the following resolutions:
Resolved, That the Secretary of this Association be and hereby is requestpd to confer with the Vice-Presidents from the various States, and prepare a uniform property statement blank
which can be used in each State of the Union by the members;
of this -Association, the same to be designated as the Standard
Form of the American Banlcers' Association the statement
blanks to be supplied to members for their use at cost price,,
;

upon application at the Secretary's office.
Reaolved, That the American Bankers' Association, in Convention assembled, approves the system of Credit Departments for
banks, and that the Secretary of this Association be and hereby
is authorized to prepare and set up in his office a model Credit
Department and to furnish such information as he may be called
upon from time to time to give, to the members of the Association, regarding the workings of the same
and also to prepare
and furnish to the members of the Association at cost price any
and all blanks which are needful in connection therewith.
;

Perfect

Our

Cornwell, President The City National Bank

President McKinley has been criticised for not doing
more than he has for Sound Money.

In his

application for discount until the loan

the borrower's credit.
At the conclusion

C^irrency?
of Buffalo.

" We ought not to hesitate to relieve our financial laws'
from ambiguity and doubt. The situation from 1893 to
1897 must admonish Congress of the immediate necessity

of so legislating as to

impossible; "

make

the return of such conditions

" authority be
given to the Secretary to sell long or short term bonds at
any time to replenish the gold reserve, that greenbacks
once redeemed should be paid out only for gold, and that
National Banks redeem their notes in gold."

and he recommended that

While these are not sledge-hammer statements and exenactment of them— relieving the laws
from anil)lguily and doubt by a square declaration for
the Gold Standard, and impounding the greenbacks to
stop the endless chain -would have inaugurated the initial steps for Currency Reform.
The President is not the law maker. Congress alone
could cai-ry out his suggestions. Owing to an adverse
Senate, it Avould probably have been impossible in 1897
to get a law, embodying the President's wishes, through
both houses, except under pressure of a crisis such as
pedients, the legal

BANKERS' CONVENTION.

34
that of 1893,

when

the

Sherman law was

crisis.

In his message in December of 1898, President McKinley again advocated action. After stating that the operations of the Treasury during the year had given increased
confidence in the purpose and power of the Government

maintain the present standard, he renewed his recommendations as to the greenbacks. He said:

SECOND MESSAGE.

recommendation was made a year ago in belief
That such provision of law would insure to a greater degree the safety of the present standard and better protect
our currency from the dangers to which it is subjected
from disturbance in the general business conditions of
" This

the country.
" In

ury amply
lation

judgment,

tlio

present condition of the Treas-

justifies the imuiediatc

recommended one year

when once redeemed, should

not thereafter

be paid out except for gold.
" It is not to be inferred that other legislation relating
to our currency is not required; on the contrary, there is
an obvious demand for it. The importance of adequate
provision, which Avill insure to our future a money standard related, as our money standard now is, to that of our
commercial rivals, is generally recognized.
" The companion proposition that our domestic paper
currency should be kept safe and yet so related to our
industries and internal commerce as to be adequately responsive to such needs, is a proposition scarcely less important.

The subject

in all its parts

commended

to the

wise consideration of the Congress."

SOUND MONEY?

Clearly only as far as the President ever since his
That is to say, they must

firmly establish the Gold Standard by law, and they must
rob the greenbacks of their dangerous power of depleting
tlie Treasury gold, or, in other words, of throwing us ofi£
the Gold Standard.
If tliese two things are dune -no matter how clumsy
or inadequate or illy adapted or ridiculously antiquated
and unscientific our currency and other financial arrange-

ments may be— the pledge for Sound Money will have
been kept by the President and the Republican party,
and the Gold Democrats, without whom the victory could
not have been won, will have been justified in their action
in voting for McKiuley. Because, whatever may be said,
no matter how strongly the President might have publicly urged it, up to the present time no bill of the kind
could have been passed.

enactment of the legiswhich a portion

from wliich greenback.s should be redeemed upon pres-

election has been advocating.

REi'UULlCAN ACTION

ago, under

of the gold holdings sliould be placed in a trust fund,
entation, but

WHAT

repealed, not-

There was no such

withstanding an adverse Senate.

NOW NECESSARY.

clearly be necessary for the Republican party
do this much before election, not only to honorably
carry out its pledges, but to avoid antagonizing the Gold
Democrats, as well as a large body of Sound Money Republicans, who feel that this is the most important mission of the Republican party— in other words, they must
It will

take this action in order to insure victory at the polls in
1900.

To repeat: Congress, for the first time since the platform of St. Louis, is Republican in both branches with a
good working majority. That majority has no decent
reason for delay in cari-ying out its pledges. It has the
power, and if it fails it means that Republican promises
are not to be trusted. It means that the party will receive the' condemnation of the rank and file who fought
so hard to

win

in '9G,

and

means grave

peril for

Repub-

licanism in 1900.

I.EOISLATI0N IMrOSSIBLE.

And now once more

The adverse Senate was still with us in 1898, and no
was possible.
Those who blame the President must still remember
that Congi-ess alone can legislate. During the last Congress we had a Sound Money majority in the House, and
it might have been well for the House alone to have
passed a bill to show its attitude. One was introduced
from the Committee on Banking and Currency in the
latter i)art of May, 1S!),S, known as the McCleary Bill,
which was an able and comprehensive measure, but it
was lost in the card shuffle called " good politics." The
Hill Bill from the Committee on Coinage, for the firm
establi.shment of the Gold Standard, met with a similar
actual legislation

fate.

Still

with the Senate as it was, nothing
have been accomplished.

in actual

legislation could

FIRST REPUBLICAN

MOVE FOR SOUND MONEY.

The first serious indications of intention by the Republican party to carry out the will of the people for
Sound Currency was manifested one month before the
adjournment of Congress last spring, in the appointment
of a Caucus Committee from the Ilou-se and a Finance
Committee from the Senate, to consider the subject of
Currency Reform, and to report at the fir.st session of the
This move pledged tlie party to
action on this great question in December of this year,
and was inaugurated with the full concurrence of the
President, and, in fact, he was largely instrumental in
bringing it about. It is the first time the Republican
party in Congress has made an otRcinl move to carry out
the expressed will of the voters who elected them. And
the fact is, that the coming Congress will be the first one
through whif-h such action cm be completed.
The Republican party is distinctly pledged by the election of 1896 in favor of legislation which will place us on
a sound financial basis.
How far must they go, and just how far, to carry out

York speech

M'KINLEY'S strong

Money?

In his

New

ARGUMENT FOR SOUND MONEY

LEGIS-

LATION.
"

Duty requires that our Government shall regulate
the value of its money by the highest standard of commercial honesty and national honor. The money of the
and must foi-ever be, unquestioned and
doubts remain, they must be removed.
If weak places are discovered, they must be strengthened.
Nothing should ever tempt us— nothing will ever tempt
us— to scale down the sacred debt of the nation through
a legal technicality.
" Under existing conditions, our citizens cannot be excused if they do not redouble their efforts to secure such
financial legislation as will place their honorable intenUnited States

is,

unassailable.

beyond dispute and insist upon the settlement of
this great question now, or else face the alternative that
it must again be submitted for arbitration at the polls.
This is our plain duty to more than 7,000,000 voters, who,
ten mouths ago, won a great political battle on the issue,
among others, that the United States Government would
not permit a doubt to exist anywhere concerning the stability and integrity of its currency, or the inviolability
tions

its

P'ifty-sixth Congress.

the ple<lge for Sound

as to the President.

in January, 1898. he said:

obligations of every kind.

This

interpretation of that victory.

Whatever

effort, therefore, is required to malie the settlement of
this vital question clear and conclusive for all time, we
are bound in good conscience to undertake, and, if possible, realize.
That is our commission, our present char-

ter

from the people.

THE people's PURPOSE MUST BE GIVEN THE VITALITY OF
PUBLIC LAW.
" It will

not suffice the citizens nowadays to say sim-

ply that they are in favor of sound money. That is not
enough. The people's pui-pose must be given the vitality
of public law.

Better an honest elfort with failure than
commanding a duty.

the avoiding of so plain and

BANKING SECTION.
"

The diffii-ultios iu the path of a satisfactory reform
must be admitted, neither few in niiraber nor slight
degree, but progress cannot fail to be made with a fair

are,

trial.
An honest attempt will be the best
proof of sincerity of purpose.
" rrogress will naturally be slow, but let us not be
impatient. Rather let us exercise a just patience and one
which iu time will surely briug its own high reward.
" For us to attempt nothing in the face of the present

and thorough

and the constant

effort to spread them, is to
ground already won, and practically wealjen the forces of soimd money for their battles of the
fallacies,

lose valuable

future.

THE GOLD DEMOCRATS.
" The tinaucial plank of the St. Louis platform is still
as commanding upon Republicans and those who served
with them in the last campaign as on the day it was
adopted and promulgated.
" It says.

•

and paper currency must be
with gold, and we favor all meas-

All our silver

maintained at a paritjures designed to maintain inviolably the obligations of
the United States, and all our money, whether coin or
paper, at the present standard, the standard of the most
enlightened nations of the earth.'
'•

This

in reality a

gave the administration

command from the
now in

people

who

power, and
who are still auxiously waiting for the execution of their
free and omnipotent Avill, by those of us who hold commissions from that supreme tribunal."
to the party

THE PRESIDENT WITH

power

not at
the

smash

The
is to

first

values then that

by the defeat of Bryan

fought so hard

avoid

in 1896.

thing to do, then, in perfecting the currency

so firmly place ourselves on the Gold Standard,

law, that no adverse election or accident can lower the
standard.
DRAINING THE TREASURY GOLD.

But there is another danger to which the Standard is
and that is tlie draining of the Treasury gold.
This danger was all around us from 1893 to 1897. and in
189-5 we were so close to depletion that the Assistant
Treasurer in New York notified the Secretary at Washington that he could uot hold out more than two days
subject,

longer.
It was only by good luck and haphazard that we were
saved then. We are having the good luck now, but no
one can say positively how long it will last, and the hazard next time may " hap " the other way.
The Government's great credit to-day depends upon its
keeping good the promise whicli you may read on every
greenback, to pay on demand in coined dollars, and (although it is not on the greenbacks) to pay those dollars

in gold, if the holder

credit

known

would not

demands

it.

And

minutes

last five

the Government's

that promise were

be broken.

ALL DEPENDS ON POLITICS, NOT ON LAW.
depends upon who

in the

Government, and

that depends upon Politics.

You may say there is no danger now.
remember that less than three years ago

But you must
six million five

hundred thousand people voted against the Government"
keeping the px-omise, and were willing, most of them not
knowing what they were doing, to hurl us down the em-

bankment

And we

of national repudiation to destruction.

are in just as

much danger now

far as the actual existing tools

be paid out again,

is still

with

as then, as
to do the

and machinery

work over again are concerned.
The greenback, which must be paid

in gold

and must

us.

THE REMEDY.

rency.

IMPORTANCE TO CURRENCY REFORM OF THE PRESIDENT'S
RECOMMENDATION.

The importance of them and how they should be supplemented later is the subject before us at this time.
And first as to the important bearing on Currency
Reform and the national welfare of the two steps to be
taken at once.
DOUBT ABOUT THE STANDARD.

There are two Avays of relief. One is to wipe out the
demand notes as you wipe out other debts. The other is
to pay them out only in exchange for gold, when they
have been once redeemed— to make gold warehouse receipts of them— almost exactly in character like the new
Gold Certificates which are being issued by the Secretary..
is adopted there must be estaba department of Issue and Redemption in the
Treasury, entirely separated from the fiscal department.
To this department are to be intrusted all matters pertaining to the issue, redemption and exchange of coin,
certificates. Government notes and bank notes, its principal business being to maintain a reserve large enough
to redeem all greenbacks presented in gold, and to pay
them out again only in exchange for gold. In other
words, the legitimate business of the Treasury, collecting
and distributing revenue, is to be done as at present in
the regular bureau, Avhile the other functions, the illegitimate ones, which consist mainly in supplying and redeeming currency for business, and which in all other
countries is done by banks, is relegated to a separate
department.
These operations, given the vitality of law, complete
the two steps which, when taken, will redeem the Sound
Money pledges of tlie Republican party.

If the latter course

lished

basilar

doubt about the

weakness of our Monetary
stability of the Standard.

System is,
Not many of

now about it, but neither did many in
the prosperous times of 1889, and yet four years later,
and for three years after, we went through a period of
destruction of millions and an era of hardships, all produced by the .same instability, which, as much as it ever
us are trembling

did, exists to-day.

other end of reunsylvania Avenue at that
would have been redeemed in silver or

and we would have had the 50-cent dollar and

all,

It all

The

tlie

time, the notes

US.

Gentlemen, the President has not changed his mind.
Progress has been slow, but effort has been wise, and
now at the supreme moment I am sure we will have the
President with us, and that this winter there will be expressed in action the sound sentiment and earnest resolve
which his words that I have read to you imply.
Will anything more be done to perfect our currency
than the establishment of the Gold Standard?
Perhaps, and probably, not, because of the political
caution prevailing before a Presidential election.
The
friends of Currency Reform need not, however, be discouraged on this score, because these two steps are the
first steps in any event to be taken in perfecting our cur-

That is to .say, the Government of the United States
not to be depended upon to redeem its obligations in

gold.

THE secretary's DANGEROUS

I'OWER.

does redeem them now in gold, but the Secretary of
the Treasury has the authority to redeem them in silver,
and he has the silver to do it with, and the silver dollar
is a dollar in law.
"We have always had a Secretary of
the Treasury who was above reproach.
We have one
It

now who

broad-minded and far-seeing, whose skill,
and good judgment peculiarly fit him
for the successful conduct of the financial affairs of his
office, and who is entitled to. and has. the entire confidence of the people in his ability day by day and in any
crisis.
But if the I'resident and Secretary in office in
1893 had been of the same stripe as the Congress in
is

training, honesty

OTHER REFORMS NECESSARY.

The other things necessary to perfect our currency are
only second in importance. They relate mainly to the
bank note part of the system.
Consider the system under which we are working today. It was originated under the stress of civil war, not

BANKERS' CONVENTION.

36
to

meet the deuiauds of business,

liut to

supply the im-

perative needs of the Government at that time. Its expedients Avere not wise, much less scientific, and it had
to he eh.iucod in many particulars before the close of the
war. AAith this olum.sy and antiquated machine, thirty-

we are required to perform the vastly increased operations of the business of to-day, which retiuire the most modern and smoothly adjusted machinery.
five years old,

WHAT WE HAVE AND WHAT WE

NEED.

have prospered not because of our currency sys-

tem but in spite of it, and we bear, without knowing it,
the most enormous handicap, compared with what Ave
might and would have if the matter had not gotten into
national politics.
In the course of business, especially in the business of
this country, on account of the immense harvests, there
are certain times of the year when more paper currency
is needed than at others, and a currency that will come
out for use at such times and disappear when it has
done its work is exceedingly desirable as a matter of
facilit.v and economy in cai'rying on business.
Our paper currency will not do this.

THE GKEENBACKS, WALL STREET MONEY.
The greenbacks are a fixed, immovable mass. They
•congregate in the large money centers where trade is
dull in summer. They unqustionably at these times foster

By making money easy, they cause
to advance. With money easy and stocks

speculation.

prices of stocks
going up, the temptation to borrow and buy is great. As
a 25 per cent, reserve, the greenbacks may become the
basis for four times their own amount in proceeds of
loans credited as deposits. They become, then, tied up in
speculative operations on the street, so that when really
needed for legitimate business later on they are unavailable. Greenbacks are essentially Wall Street money, and
yet the people who have such a wholesale dislike for that
celebrated avenue are mainly the ones who are said by

the politicians to " love the greenbacks." We see this
every year during the crop moving season. The available
reserve lied up in Wall Street, country banks drawing
currency for local use, street loans called in, making tight
luoney; the country districts asking for loans and finding
them hard to get—interest rates going up—prices of prodticts in first hands squeezed down for lack of funds to
handle them, and general financial discomfort, and all
because the currency tools to do the business with are
wholly unfit.

This inflation at the dull time, as Avith the greenbacks, is
apt to induce speculation. The most recent proof of these
facts lies in the present situation. The expanding business of the country since the first of the year has created
an urgent need for more currency, evidenced by repeated
requests of the Treasury for small bills, and lately partially answered by issue of Gold Certificates.
Latterly,
Avith the crop moving season approaching and tightening
bank reserves, the Government has been looked to to
increase funds Avith the Depositary Banks.
Another illustration. A fcAV weeks ago the corn crop
of Nebraska AA-as in doubt. Thousands of farmers would
not undertake to feed stock until they knew the crop
was safe. All at once the safety is assured. Immediately there is an enormous demand for currency to move the
old corn crop and to get cattle to feed. An Omaha banker
saj's: ' I never saAV anything like it.
On all sides I hear
the demand for cash, money, currency, to handle the
great increase of business in the State. The banks cannot begin to suppl.v the demand for currency. They are
loaning all they can spare to the country banks, and they
in turn to the farmers and cattle feeders, but there is not
near enough to go around."
How do our bank notes respond under these circumstances? In their usual contrary fashion: while all business has been expanding, their volume has actuall.v decreased since January 1st of this year.

NO HELP TO THE AVEST AND SOUTH.

the opposite.

About

their only merit

touch to say that
them.

we would

their safety.

much

It is not too

better off without

The banks will, of course, only issue these notes (beyond what is mandatory under the National Bank Act)

when

profitable to do so.

only profitable to
issue when the premium on bonds (which have to be purchased and deposited Avith the Government to secure the
notes) is Ioav. This only happens when trade is not exit

It is

When trade is not expanding the notes are not
needed, and that is just Avhen they are issued and in-

])anding.

When

premium on bonds is high, it become.s
more profitable for the banks to withdraw their circulation, get back their bonds and sell them.
The premium,

creased.

the

most apt to rise Avhen business is active and
and that, too, is the time when bank notes are
most needed by the business community. But it is the
time, also, as I have shoAvn, when banks cancel their

moreover,

increasing,

notes.

DISAPPEARS AVHEN NEEDED.
In other

Bond-Secured currency contracts
business and expands when not needed.

Avords,

Avheu needed in

profitable

tively useless.

And

only recenllj-, after Aveeks of doubt iu Wall Street
as to whether money was to be tight or not, a little new
circulation has just

rHE WORST MONEY IN THE WORLD.
But we have another class of paper representatives of
money. These are the Bond-Secured National Bank
notes, which are sometimes spoken of as the best currency the world has ever known, but are in fact quite

where interStatistics show that
est rates are low than where high.
the circulation of National Bank notes is much more
largely availed of in the New England States, where interest rules low, than in the West and South, where rates
arc high. So that just where they are needed to make
rates loAver and money easier, bank notes are scarce, because it is not profitable to issue them there.
Another defect is in the clumsiness of the arrangement for getting currency out under the national system.
During the currency famine of 1893 the banks that endeavored to increase their note circulation were enabled
to get only a small amount out before the famine was
over, after Avhich time the notes began to increase in
great A'olume, until by November 1st of that year they
had expanded .$::>2,000,000, and Avere by that time posi]^ond-Securv?d Currency

begun

come

out.

TRUE BANK NOTES.
Credit currency issued by banks, if made absolutely
it can be by Guarantj^ Fund of all other banks, is

safe, as

entirely difl;erent in character.

can be manufactured

needed, by reason of
Avhen more money
increase in the business of a special district, or of the
Avhole country, and the very day that need begins to lessen the notes begin to disappear by natural law. That is,
they begin to be deposited In banks instead of passing

at the

moment

from liand

to hand,

and the banks send them home

them just as if they Avere checks. Under
a proper system they cannot live one minute longer than
they are needed, any more than a check can. Think what
get the cash for

Nebraska at this time.
Wliy shouUl not such Bank Credit Currency be used
and banks alloAved to issue notes as people do?
a blessing they

would be

SIMILARITY OF

No one

will

BANK NOTES AND OTHER

NOTES.

deny that the notes of a solvent individual,

firm or corporation, given in the ordinary course of business operations, serve a good purpose. They enable the
solvent corporation, firm or individual to do more busi-

ness at certain seasons Avhen his or their capital is not
A bank is an
sufficient to carry the increased volume.
corporations, made
aggregation of individuals, firms and
possible and profitable because such an aggregation facil-

very marked degree the business operations
community Avhere it exists.
the
itates in a

BANKING SECTION.
of enactinjj laws restricting busi-

Nobody ever thinks

ness people from giving notes.
There is no better reason for restricting a banlc, which
represents an aggregate of business people, from giving
notes than there is for restricting individuals, except that
the
tJie bank's notes should be made absolutely safe,
reason for this being that while no one is compelled to
lake the notes of other people unless he is satisfied that
they are good, people who accept bank notes in payment are semi-involuntary recipients of them, and the
law should consequently protect them— should provide
that the notes will surely be redeemed in good money

Bond-Secured Bank Notes and Substitute
Properly Safeguarded Bank Notes Against Assets.
There are other details, important, but not immediate:i.

lletire

ly essential.

should, of course, be included in complete Curhands
rency Reform. If the subject was placed in the

They

all could be
of a competent Commission, with power,
for instance, as the
Such a Commission,
at once.

done

is a
Indianapolis Monetary Commission, whose report
landmark in the linancial literature of this country, and
level-headed
will always stand as a monument to the

business

men

when demanded.

Now

the

same use

bank notes
larger amount
re-

sources of the community will take care of.
Individuals sometinies issue notes for other' reasons

than the temporary increase of their business, and for
larger amounts than they can eventually pay.
It is not expected that banks will be permitted to do
this, and the Law should provide against it, as it does in
a\\ the countries where such bank notes are issued.
AVith the law providing for the absolute safety of bank
notes, issued when needed by expanding business, and
their ultimate quick redemption in gold when not so need•ed, and for the prohibition of issues except for the purposes of increased legitimate business in the community
or whole country, it must be admitted that such issues

enormous and incalculable value

will be of

to the busi-

ness public.
If these safeguards can be provided, is there any reason why this great material advantage, which would
affect every citizen of the United States favorably, should
not be made use of? It is urged that in other countries

where bank notes are issued, the issuing bank is an
agent of the Government. This is precisely the character
of the National Bank each one is an agent of the Government.

—

TR.\DE'S

own

CXJREENCy.

Trade, if left to itself, always provides its own machinery, and the best possible machinery, for conducting
its operations.
The laws of trade are much safer than

human

laws, because each individual engaged in trade

on the

alert to see that his

and he

working at

own

interests are protected,

on an average of ten hours a day.
Trade has established a system of currency of its own,
which is perfectly safe and satisfactory to the business
community, and that is Check Currency, or Deposit Currency, by means of which fully 90 per cent, of all business is done. This has been perfected without the operation of law, and is just so much more perfect because of
the absence of political bias and legislation on the premit

CITY CUIJUEXCV A>"» COTTNTEY CURRENCY.

But this Check Currency is used and can be used to
any degree only in the cities and larger places. The counfarming community, tlie sparsely settled regions.
are unable to use it, and are deprived by law of their
legitimate part of the currency— namely, bank notes,
Avhich the laws of trade would long ago have provided,
if not unjustly restricted by legislation which was designed to aid the Government in an emergency, and has
been cruelly kept in force for thirty years after the emergency had safely passed.
There is no question that a system of Credit Bank Currency can be devised for this country that will be absolutely safe, and in its very nature it will respond to and
build up trade instead of pulling it back and forth and
<lown. as our present system does..

try, the

PERFECTINC. THE CURRENCY.

Three main things, then, need

be done to perfect our

currency:
2.

and not
But, unfortunately, this is a political question,
of what is most desirable for
tested by the touchstone
business, but

most feasible for a
control the most votes.

by what

political

party desiring to
thing at a time,
It has consequently to be done, one
the voters. The action which
under stress of educating
The mathe largest number favor must be taken first.
of firmly estabjority, and a large majority, are in favor
sting out of
lishing the Gold Standard, and of taking the
harm to the
the Government notes so that they can do no
credit of the United States.

WHAT THE VOTE FOR SOUND

MONEY' MEANT.

The voters were educated up to that in 1896, and that
It
in that year meant.
is what the victory at the polls
have
was a victory for Sound Money, and we would
Sound Money if—
pii-st-We were firmly on a gold basis by law, and
Second—If the gold-draining character were taken out
of our Government notes.
In my opinion, the best thing for the friends of Sound
Money and Currency Keform to do is to get these two
is with
steps taken by the next Congress. The President
The Repubus— the majority of both houses is with us.
lican party is with us. It is good politics and it is good
business to pass such a measure. With politics and business agreed, there should be no difficulty about legislaor a
I do not believe there is a thinking banker
tion.
thinking business man in the United States but believes
that these two things should be done. Let each convey
this idea to his Congressman and the thing will go.
Our most eminent living humorist, in a light and witty
speech in London the other day, said he desired to finish
with something serious, something that his hearers could

take home with them and profit by, and he would for this
purpose close by imploring them to follow the old adage,
" When in doubt, speak the truth."
admoniI cannot do better than to close with the same
business men. Do your duty, speak
tion to bankers and
the truth on this subject, forcibly and earnestly, to your

ises.

VOTES, NOT BUSINESS.

arises for the issue of

as for those of business people— namely, a
of busmess at certain seasons than the ordinary cash

of the United States.

To Establish tlic Gold Standard by I>aw.
To Cancel or Impound the Greenbacks.

representatives in Washington.

MAKE PROSPERITY

EAST.

sweeping over this country.
It cannot be
"\A e want it to be as permanent as possible.
or even assuredly long-lasting if the basis of
permanent
all business, the soundness of the currency, is not definitely established; adverse crops, adverse elections, any
one of a number of things may put us in danger again, as
we wore in danger in "yS-D-l-'OS and 'OG. With the currency on an absolutely sound basis, prosperity is more
liable to continue, and if it does slow up, the element of
r(>al danger will not be there to make things worse.
A few slight changes in the law, working harm to no

A wave

of prosperity is

one and benefit to

all,

will put us out of danger.

NOW OR

IN 1900V

upon the intelligence of our peoabout this great
ple, expressed
success and to our
public benefit, essential to our own
perfect credit-standing among the nations— to demand
I

believe

we can

rely

to the legislators, to bring

that the verdict of 189(5 be carried out in law.
The I'lesident himself has said that this

the com-

BANKERS' CONVENTION.

mission of the Republican party under which he and they
hold their present charter from the people, and that " our
citizens cannot be excused if they do not redouble their
efforts to secure such tinancial legislation as will place

honorable intentions beyond dispute, and insist
upon the settlement of this great question now, or else
face the alternative that it must again be submitted for
their

arbitration at the polls."

The Effect of Banks on
By Col. Myron

The

T. Herrick, President Society for Savings, Cleveland.

you a thrice told tale,"
honorable profession, served
a story of an ancient and
with remarkable fidelitj' and a fair share of benevolence
throughout: created by the people by vii-tue of their
necessities and accepted by them as one of the fixed conditions of society, and withal so satisfactory in its workhistorj' of banlving is to

ings as to excite

little

the People s Progress.

•"

speculation as to

its

caixse

and

effect.

Yet to the casual student of beginnings this remarkable scheme of finance has an origin of unusual interest whicli is suggestive of the vast power and influence
exerted over mankind.
The bank is the embodiment of the instinct to preserve for future needs the fruits of human activity; an
instinct originally awakened by hunger and the struggle
for life, and its history is practically the historj^ of the
highest civilization, which in its development has more
nearly readied perfect balance in the Temperate Zone.
Civilization of itself is the ability of man to control and
to utilize the forces of nature. It has beeu said that the
highest type of civilization cannot originate " where the
banana grows;" where primitive man gathers breadfruit from the tree, and pulls the cocoanut from the palm
and the taro from the ground; he neither reaps nor
sows, nor gives thought for the morrow, for his supply
is as boundless as the air he breathes— and even the air
is tempered to his naked skin.
A climate of recurring
seasons seemed necessary to the best development of
mental activity. The pangs of hunger and the struggle
for existence were the moving causes of the evolution
of the mind, and as the mental horizon was thus extended, intelligent foresight provided from his surplus
products a reserve for the proverbial " rainy day," or
non-fruitful season. Soon exchanges Ijeeaiue necessary,
and a medium of exchange representing values; then in
natural sequence, in crude form, came the bank, which
soon became the warp of the fabric of civilization.
Banking as an embodiment of this powerful force
has beeu going on for these hundreds of years, and today, though perhaps full of imperfections and yet incomplete, is steadily carrying on the commerce of the
world. Nations, governments and parties have arisen,
flourished, declined and disappeared— and while the
growth of the bank has from time to time been arrested,
no opposing force has yet arisen sufficient to destroy it.
Every decade has found it more full and comprehensive,
a proof of an underlying principle greater than most
human conceptions. You trace the deposit of the bank
to its source, and there may be discovered the hidden
origiD of its power. Its fountain head is the strongest
of human instincts, that of self-preservation.
Every
home, every home-tie and every individual interest is
involved; therefore, unlike a government or other partisan organization, the bank has for its foundation a constituency without class distinction, for it is built and
supported by all the people.
As the confluence of
streams supplies the mighty reservoir of the ocean and
this in turn through clouds and carrying winds supplies
the streams with their power-giving currents and Niag-

aras, so this concentration of the small deposits of savings and accumulations in banks creates that vast re-

serve of influence and financial resource which directs
and sustains commercial enterprise and industrial activity, and serves as the medium by which the business of
the world is carried on.

As with the movement of all positive forces, the advancement of the bank has met all along the way retarding forces of greater or less magnitude.
It seems incredible at this distance of time that Andrew Jackson, President of the United States, appreciating

and understanding our form of government— so
government of the people, should

truly designated as a

have failed to understand that violent disturbances of
values must necessarily ensue from his antagonism to
the Bank of the United States and his interference with
even non-political banking institutions throughout the
States, and must inevitably result disastrously, and
prove to be a direct blow to the best interests of the
people, and a serious check upon the national prosperity;
that he should have been so willfully blind as to ignore
the voices of both Houses of Congress and the earnest
protest of the people, unswayed by partisan feeling, and
should have persisted in launching his untried and illfavored experiments, is beyond comprehension. The influences which he summoned came like a pestilence upon
the country, destroying all confluence and resulting iu
the panic of ISriT, which was followed by years of hardship, suffering and doubting inactivity. After a time,
notwithstanding all the remembered disaster, the confidence of the people in the possibility of safe banking
was gradually restored, and upon it was built anew a
financial system on firmer and broader foundations, no
longer a branch of the government — in harmony wiib
the views of the majority of thinking men of to-day who
believe that government conduct of banks is not consistent with either the interests of trade or our idea of
the puiiiose of governments. The best results have ob-

tained, thus far,

where banks have been conducted

sentially as individual enterprises.

es-

in discussing

Mill,

pleased to term " government interference,"
offers three objections, and says:
" First, when the thing to be done is likely to be better done by individuals than by the government, speaking generally, there is no one so fit to conduct any busi-

what he

ness or to determine how or by whom it shall be conducted, as those who are personally interested in it.
This principle condemns the interference, once so common, of the legisla(ure, or the officers of the government,
with the ordinary processes of industry.
" Second, in many cases, though the individuals may
not do the particular thing so well on the average as the
officers of government, it is nevertheless desirable that
it should bo done by them rather than by the government, as a means of their own mental education a mode
of strengthening their active faculties, exercising their
judgment and giving them a familiar knowledge of the
subject with which they are thus left to deal.
These are not questions of liberty, and are connected
with that subject only by remote tendencies, but they
Without these
are questions of development.
habits and powers a free constitution can neither be
worked nor preserved; as is exemplified by the too often
transitory nature of political freedom in countries where
it does not rest upon a sufficient basis of local lib.

—

erties.

" Third, the

most cogent reason for restricting interference of the government is the great evil of adding unnecessarily to its power. Every function superadded Lo
those already exercised by the government causes its
influence over hopes and fears to be more widely dif-

RANKING SECTION.
and converts, moi'e and more, the active and ambitious part of the public into hangers-on of a government or of some party which aims at becoming the go^'-

fused,

ernment. If the roads, the railroads, the banks, the insurance companies, the universities and the public charities were all of them branches of the government; if in
addition the municipal corporations, and local boards
with all that now devolves upon them, became depart-

ments of the central administration; the employes of all
these different enterprises were appointed and paid by
the government and looked to the government for every
rise in life: not all the freedom of the press and populaaconstitution of the legislature would make this or any
other country tree otherwise than in name."
Governmental influence and governmental supervision
are accepted as the proper functions of the government.
As has been the case with all useful institutions,
demagogues, anxious to appear as leaders and actuated
solely by self-interest, wishing to gain the favor of the
unthinking people, have sought to play upon their prejudices and dissatisfaction by pointing to the vast aggregation of money in banks as dishonestly accumulated,
disguising the fact that it is the result of the thrift and
industry of the people. At different periods in the history of our country the political parties have directed
campaign discussions to financial questions, and
these discussions have invariably resulted in good, since
their

they invite a mature consideration by a well-balanced
people of a subject in which they are all interested; and
as a result they bring under the public search-light the
impossible theories held by the impractical and dishonIn 189G the spectacle was presented of these glibest.
tongued demagogues holding forth on the street corners
of the principal cities of the United States, offering their
spurious wares. In our Public Square at Cleveland 1
remember there stood a pretending Moses with his finger
pointed to one of our institutions which, for fifty years,
has been a faithful custodian of the people's money (essentially a people's bank, since it is based upon a plan
of mutual co-operation and belongs to all of the depositors), and in stentorian tones exclaimed, " there is
the source of all your troubles and misfortunes."
Though some were deluded that year, the majority of
the people Avere not deceived by the false reasoning of
these irresponsible agitators. Instead of advocating the
destruction of the T)anks by the use of force and legislation, the direct method of these agitators, had they been
sincere, should have been to call upon the artisan to
quit his bench; for all to cease saving; for none to provide for old age and misfortune; and the business of the
banks would have ceased, furnace fires would have been
drawn, factory gates would have been closed, and commerce and trade annihilated.
Aside from periods of political and financial convulthe triumphs of the banker are essentially " victories of peace; " yet when England, in her efforts to obtain the necessary funds with which to carry on her
war with Fi*ance, sought relief from the high interest
rates exacted by the goldsmiths, it was given to Petersen
sion,

the Government support could be obtained, ample funds could be secured at advantageous
rates— and the outcome of this was the establishment of
the Bank of England. Robert MoiTis, while Superin-

to suggest that,

tendent of Finance, rendered his country signal service
in the dark days of the War of the Revolution by suggesting a M'ay for financing government loans through
the medium of a bank, which led to the establishment
of the pioneer Bank of America. What victory of our
Civil War was of greater import than the united action

of the Associated Banks in loaning to the Government,
without hope of profit and with great likelihood of loss
staring them in the face, sums greater than their entire
capital; at a time when the nation's troubles over-

whelmed

Who

it V

can adequately measure the extent of the

in-

upon the progress of the people of these isolated
patriotic acts which stand so boldly forth in history ?
These are our Deweys, our Sampsons, Schleys, Roosevelts and Funstons, and the grand army, daily increasing, which they lead, is triumphantly advancing to the
conquering of new worlds; the men at the guns who
make admirals and generals possible, consist of the merfluence

chant, the manufacturer, the laborer, the widow with
her mite, the friendless and fors.aken who may be earnestly striving to save from daily earnings a pittance
sufficient to keep his body from the potter's field. The
deposit of the millionaire for the benefit of his new-born,
the savings of the old Grand Army pensioner; of the
sailor departing on a voyage; all in their unified power
constitute the irresistible civilizing force which has
moved like the benign influence of the Gulf Stream,
silently tempering and converting the lands of snow and
ice into waving fields of golden grain; waste places into
humble homes; homes into palaces; and general doubt
into general security.
It is this army that owns in the United States $5,696,-

252,836 of deposits, .'5991,591,683 of capital, and $740,336,702 of surplus and undivided profits. It is an ag-

gregation of 5,385,746 of this army which owns $2,06.5,631,298 of deposits in all the savings banks in the country, having $187,475,971 in surplus and undivided profits
—and of these, 4,835,138 were depositors in mutual or
non-stock savings banks, representing $1,824,936,410 of

The average amount of each savings account
reported as $383.54, an average increase for the current year for each depositor of $10.66; and the amount
per capita of such deposits is given as $27.67, a per
capita increase for the fiscal year of 1898, as for the
entire population, of $1.11, represented in the savings

deposits.
is

and odd savings bank depositors.
bank deposits
And
savings of these
for the fiscal year 1898, the accumulated
five millions of savings bank depositors, was available
of the five millions

this increase of $126,255,263 savings

to all our seventy-five millions of people.

which builds
and asylums; our court
houses, jails and water works; which paves our streets,
builds our roads and railways, and finances all our industrial enterprises, and whicli has practically converted this nation from a debtor to a creditor nation.
These are tiie real plutocrats of America whom the
doors of bank vaiilts hide from the lurid vision of the
agitator, and those are the doors which he would batter
down. The existence of class in America is in fancy
only. Every .Imerican has an equal opportunity, and
It is this

army which

our

school

may

rise or sink as

houses,

nities at hand.

biiys the bonds,

bridges

may
He may be
he

see

fit

to use the opportu-

of the class that earns or

Our family ties run clear to the bottom, measured by worldly prosperity. Between the mechanic and
the millionaire there is no distinctive title save that
which nature and good fortune have confen-ed. We in
America observing the lines upon which older civilization has progressed, and which with mental work and
mental influences has created civil society and material
wealth, which has raised the people from savagery,
wastes.

well hope to extend our civilization in the Western
"
Hemisphere— even to the " land of the banana

may

BANKERS' CONVENTION.

Hozv Can

the

United States Become the Clearing Honse of the
World.

By William

Wm.

R. Trigg, President

Mr. Chmt^iun and Gentlemen of the American Bankers'
Association

received the very flattering invitation from
your secretary to malce you an address, I had just returned from New York to that beautiful spot on the rocky

When

coast of Massachusetts, Magnolia,

where

was summer-

my family. The message was transmitted to me
from my home in Richmond, Va., and being uncertain

ing wllh

of the address, I instructed them there, by wire, to thank
Colonel Branch for his courtesy and say that my engage-

ments, leaving me no time to prepare, prevented my accepting the proffered honor.
Now this, gentlemen, was in the face of the fact that
I had not an earthly thing to do for several weeks, but

you must not for this doubt my sincerity, when I am now
so frank and when I propose to tell you truly the reason
for my then condition of mind. As stated, I had just returned from New York, where for three days I had been
waiting on bankei's. and as to bankers, especially a whole
room full of them, I was, as we say in Virginia, a trifle
" guushy."
I do now protest
the most kill-spiriting tliiug in all the Avorld. I
confessed to an old friend whom I met in Wall street
about the middle of the third day of waiting that I felt
humble enougli to shake hands with a dog. That a man

AVaiting upon a banker, gentlemen,

to you.

might be e\ev so much of a centurion at liome, and give
orders and have them obeyed, but the outside room, or, to
speak more properly and descriptively, the waiting room

would soon take all the starch of authority
out of him. Therefore, not in anger, perish the thought,
for the first lesson I was taught in finance was never to
of a lianker.

quarrel with a bank, but in humbleness
my declination be sent.

The day

instructed that

following, to continue this recital,

went

into

Boston and on the train, reading the news, and as is my
habit, saving the editorials for the last, I was startled to
find the leader in the Glohe echoed my sentiments and it
was, I thought, as though I had written the article myself—the writer must have been a good one, for we know
that the good orator is one who makes the speech that we
all think we could make, and the same rule must apply
to the editor.

However, thus expanded

self-es-

teem, I hastened to the telegraph office upon reaching
Boston, and wired other directions to Richmond, and told
them to say to Colonel Branch that I was relenting, and
when, upon my return to Magnolia, I found another tele-

gram

of invitation, direct

from your sercetary,

an-

swered, so that 1 am now before you. Indeed, I reminded
myself of the man whom Senator Mason, of Illinois, described in an interview I had just read, as resembling the
farmer's calf. The boys had to pull his ears off to make
him take nourishment, and then had to pull his tail off to

make him

stop.

The article in the Globe in part was this:
" The best way to comprehend the real meaning
pansion

to study the

map

of ex-

with fair
knowledge of what is going on, it will not take a person
of ordinary intelligence long to grasp the situation.
He
will find that the United States, the richest, the most resourceful country on the globe, is nearest, as regards
geographical contact, with myriads of human beings,
possessed of stomachs and brains, and wear clothes, who
are just being graduated from the primary schools of
civilization and will soon require a full equipment of
what belongs to more advanced grades of national development.'*
This statement, without going into the
politics of it, induced a favorite thought of mine doubtless a favorite thought with us all— namely, how great is
is

of the world;

—

Trigg Co., Shipbuilders, Richmond, Va.
this our country, how grand its destiny. Why should it
not " clear " for the world, and answering therefore the

which I am to speak, " How can the United
States become the clearing house of the world?"
I
would say it cannot be helped, it is inevitable; and being
inevitable, I might close my remarks, for what profit is it
to us to discuss the foregone- but I will continue, and
demonstrate, I hope, to your satisfaction, why it is inevitable.
It is so, gentlemen, because our people, our
men of affairs, our bankers, our merchants, our manufacturers, our planters will continue to follow up their great
advantage of location.
A familiar argument with me, brought up among free
traders, is that we have the trading station of the world,
and should, therefore, control the world's ti'ade, and it is
true that we have it, as is now appreciated by all.
query

The vision that has over risen before me
gold that flows ceaselessly to England from

all

the tide of
parts

and

world borne in hundreds of ships, but it is
overshadowed by a greater vision, the settlements that
are being made now, with this country by all other countries, that grow each year, becoming larger and larger,
until past figures and statistics are worthless— we simply
have to abandon them.
The export of our grain, our cotton, our metals, our
lumber and by far the greatest of all, our manufactures,
is determining the question of where settlements will be
made. The flow of gold that has heretofore gone to England will in the main come to the United States and here
the clearing of the world will be done. We can bring this
about, or rather hasten, for we cannot in my opinion stop
it, in no better way than encouraging the enterprises of
our people, not necessarily by governmental aid, but by
sympathy, which is most necessary in business. Encouragement, however, we must all admit, is in order when
report shows that this country has fallen from the first
place in gold production, which it held for fifty years up
to and including 189G, to the third place. Africa passed
This would seem to
us in 1897, and Australia in 1898.
prove there is progress elsewhere, but, after all, what
care we where the gold is digged, if its final lodgment is
our own coffers ? And I ask, shall London, or Paris, or
Frankfort prevail when Ncav York, with Boston, Philadelphia and Baltimore; when Chicago, with St. Louis, St.
Paul and Cleveland; wlien San Francisco, with Omaha
and Denver; when Richmond, with Atlanta and New Or(luarters of the

otherwise, representing the trade they do,
more important, a tremendous aggregation of

leans, decide

and what

hon)ogeneous people made one in the determination that
The day not yet
our country shall outstrip all others ?
passed, but passing, is at hand, when the American Eagle
shall be as well known as the English Sovereign, and
then the pound shall give first place to the dollar— and
then we shall clear the world.
We are a greater people to-day than ever before in our

own

estimation,

and

in the estimation of the world, for

the world has seen the sections shake hands, not in recanting, but to meet a common foe, and I say to you,

gentlemen, the South, which I represent, stands in her
prowess and her resources a very bulwark of strength for
all

that she espouses.
It is known iioav that the policies of a party she fought,

that the great destiny of the nation she will never thwart,
'i'his the world sees and admires and will soon entrust
" the balances " with us.

In the meantime it should be
endeavor of each member of this association to the
the
full extent of their efforts and influence to see that all foreign business, sales, purchases, exchanges, should be
made in dollars, and not in pounds, invariably in both;

BANKING SECTION.
familiarize the •world with our standard and
measures, for It is most important that our weights and
quiiutities should be familiarized. When we quote, we
should use our methods, and when we buy, we should insist that accounts should be stated in the same way, and
the desire to sell will educate quickly; when the world
knows our methods of computing and recognizes us at
the same time to be as we will be, the largest exporter
and Importer, our wish for the clearing house will be

and thus

realized.
I

say

will excel in exports.

The word already

comes from Washington that our exports to Japan have
increased to a greater extent than any other nation in the
world; and hear the recent admission of the London
After giving the figures to demonstrate
" Practically, then, the United States
export trade has now about an equal aggregate value
with our own, while the more valuable home market is
in her case roughly twice as large as ours. The significance of this comparison is heightened by recollection of
the circumstances that— taking a series of years and a
per head basis— our export trade is, despite the recent
spurt, marked by retrogression rather than by progress,
and that our rival represents prodigious growth—
gi'owth showing no signs of diminution.
' The big American increase— and it may be regarded
as the central fact in the situation— has been in manufactures. It can hardly be necessary to tell our readers
with what special force American development In this
direction strikes at E}nglaud, or to discourse to them on
the comparative value of an export trade in manufactures over one in raw materials and primary articles of
merchandise; but it Is important that they should bear
these facts in mind, to illuminate their reading of the
continued expansion of the exports from the United
States of articles other than the four staples— breadstuffs,
raw cotton, provisions and petroleum."
May 1 be excused for drawing attention to the stress
laid upon a home market, as an accentuation of the point
I am about to make, that we should build up by just
laws every portion of this country ? For Mr. Chairman
in naming the cities of the South along with those of
greater renown in commercial circles, it was done advisedly; it was done to accent and draw your attention
to a fact that I claim to be demonstrable, that Cuba,
Porto Rico and the Philippines and all that is expected
of them, as agencies of greater prosperity to this country,
can rest in the shadow of the good that awaits us, upon
the complete rehabilitation of the South, that will bring
our common country greatness, if our forefgn conquests
vanish (which, by the way, they will never do), and,
therefore, this rehabihtation you should strive to bring
about from selfish, if not higher motives, for her coming
in full panoply brings the command of the world's trade.
We need in the South a just currency law, as they do
in the West. I ask no law that disregards the first of all
mercantile requirements, the gold standard, the sine qua
Financial News.
the fact,

says:

uon of international exchanges, the stability of home
affairs, but it must, however, be a law that restores the
use of credit (but I fear from appearances and information, or rather

non-information, it will be long before we
get it). Secure this legislation to us, build an Isthmian
canal, and the cornerstone of the world's clearing house
will be laid, and we will locate it south of the Mason and

Dixon line ;f you of the wealthier, but not more resourceful sections, do not have a care. And the South desei-ves
aid, for she is hclpmg herself, as witness her growth, and

name the difficulties she has overcome and is
overcoming; see what she has done in the last ten years.
It is scarcely to be believed, and, therefore, I may be
pardoned for testifying to what 1 know myself, at the
I

will not

risk of the cliarge of

bad

taste.

When, as president of the Ilichmond Locomotive
Works, just ten years ago, I was given the contract to
build the machinery of the

ship Texas,

was advised

now
to

justly celebrated battle-

import Scotch pig

iron,

or perhaps use the
further,

when

Thomas iron
came off,

the trial

and
and import

of Pennsylvania;
to be sure

Welsh coal.
Now, the fact was, that I used Virginia iron and with
such success that the work had not proceeded far when
the authorities at Washington wired me to know the
brand, purchased a large quantity and incorporated it
in the machinery of the Raleigh, the Cincinnati and
other vessels; and long before the trial the Pocahontas
coal had taken the first place for marine service, and
Welsh coal is heard of no more. Although, when I went
to Washington with our then Governor, Gen. Fitzhugh
Lee, it could not be l)elievod that we wanted to build machinery in the South, and we were referred to the department for the purchase of naval stores, the supposition being that we essaj'ed only to furnish tar, pitch and turpentine, and yet since then I have seen Scotland and Wales
yield to Virginia in the great essentials of trade, iron and
coal.

Mr. Chairman and Gentlemen, is all this irrelevant ?
all so.
It bears upon the query to which I am addressing myself. I>o not follow Mrs. JeUiby and look
abi-oad alone, but, as they say in cards, " Play the one
next to your thumb." Give us the laws we want and before the closing of the first decade of the coming century,
when our population Avill have reached 100,000,000, there
will be none to nuike us afraid commercially in all this
world, as there is none we fear in arms to-day, and then
Avill not the clearmg hou.se be ours, for how can it be
helped ?
The day of settlement is coming when Vienna
asks Paris for exchange to pay her debt to us, and finds
that Paris, too. is indebted to us, and then applies to Ber
lin and St. Petersburg and all the great Continental capitals, always receiving the same answer, and finally, too,
when it comes from Loudon, and all have to ship us gold,
the sceptre will have passed into our hands and the clearing house is ours.
This last note I jotted down at Magnolia, and in order
to show you that my contention is correct, and that sta-

Not at

tistics

are

now

valueless,

and that there

no " lamp " of

the past to light our steps in the future, and that now in
this progressive age we can only prophesy, I will repeat

here a telegraphic communication I read while on my
York, in the Washington Post of
August the 3d, as follows:

way South from New

ENGLAND SENDING GOLD HERE.
Director of the ilint G. E. Roberts, who is in New
York, estimated the gold output of Australia for the present year at ten millions in excess of that for 1898.
He
said:
" Australia will doubtless

continue to have trade obligations to settle with England. Since the prospects point
to a continuance of the balance of trade between this
country and Europe being in our favor, it is my opinion
that England will go right along sending us consign-

ments of Australian gold direct. We shall have all the
gold we need. Our position is that of a creditor, but if
other countries are willing to malie it worth our while,

we may make
I

other terms."

will also read

an extract from Dun's weekly mer-

cantile report that appeared in the

Richmond papers the
next day. as follows:
" London again recognizes the financial
power of this
country. The Bank of England virtually admits that it
cannot draw from New York the gold it needs; exchange
moves up to the importing point; over one million dollars
starts from Sydney to San Francisco. London's net buying of stocks has been forty thousand shares and bills
against produce to be shipped are very heavy."
And, Gentlemen, to say the truth,- I was somewhat
startled to see the rapid confirmation of my beliefs.
I
began to fear that the clearing house would be established before your convention met, leaving my address
with only the interest that attaches to a thrice-told tale.
Australian gold direct to the I'nited States on London

BANKERS'

CONVENTION.

not this confirmation of our hope, strong as

million dollars a day, giving us a credit of (actually)

•luly last, gives Lloyd's

which must be accounted for, save the
amount of specie named above.
Ocean freights, foreign travel and insurance are usually charged with disappearing balances. They are indeed enormous factors, especially the first named, but
they fall far short in the accounting, and would call for

tonnage 27,673,529 tons,

large returns to this country of our securities; indeed, the

accouut;

Holy Writ

May we

claim, do

not demonstrate "

pent-up Utica confines our powers ? "
And, Gentlemen, to secure these balances and hold

them we must build and own more ships.
A statement from London, no later than the 27th of
estimate of the world's shipping
England owning 29 per cent,
(and that figure is disputed as being too small) and the
United States but 9 per cent, just the least rise of Germany's proportion. We should rectify this disproportion.
Mr. Chairman, I feel that 1 should stop. I have counted
my words, if, perhaps, I have not sufliciently weighed
them, and the limit of j-our attention has been exceeded,
which the large experience of your able and tactful secretary wrote me is comprised in 2,000 words.
Nevertheless, and although I have avoided statistics,
it is but proper to draw attention, in a few comments, to
a most admirable article appearing in the New York
Chronicle of July 22d, 1S99. It sets forth the fact that
the year ending .Tune 30th, 1899, was the most remarkable in the history of merchandise exports. It seems that
only twice had our exports reached 1000 million dollars,
when 1898 showed 1231.5 million, but only exceeding this
year (which amounted to 1227.4 million) 4 million dollars.
Notwitlistanding that breadstuffs were reduced
60.5 million, cotton, 21 million, by reason of low prices,
provisions and dairy products, however, increased 9 million; so the decrease of the great staples amounted to 73
million dollars.

Therefore, 09 million represents the augmentation of
general and manufactured articles, which increased from

287 million in 1892 to 514.5 millions in 1899, a most remarkable showing, indeed.
And none were quicker than the English to recognize
what that means, as you have seen in the extract from

one of their papers, which I have just read.
The Cheoniclk says this showing is not the result of
increased price but of increased quantity; that the products of iron

and

steel are the principal features.

The excess of exports over imports for 1898 amounted to 615.5
million dollars, and for 1899, 534.5 million, a balance in
It is also interesting to note the net results.

our favor of 1145.8 million dollars for the two years.
It is pointed out that the reduction in 1899 was due to
special causes, reducing imports in 1898.
With one more comment I will recommend the reading of the article to every member of this Association.
It seems that our exports of silver for the two years just
passed amounted to 50 miUion dollars, while we imported 156 millions in gold; a net gain in specie of 106
million dollars.

This, though gratifying in itself, suggests an inquiry,
why is there not a greater quantity? Discarding Sun-

and holidays and using round numbers, our exports
mount to 4 million dollars a day, exceeding imports 2

ilays
.•1

$1,150,000,000,

Chronicle suggests

but

my own

is, that the
foreigners are reinvesting fully. Confirmed by Dun's report just I'ead.
Have we not large balances there?
Have we not invested a large portion of this money

abroad?

this,

belief

subscribed to a good share of the Mexican

why not other investments? Mr. President, speakas a member of this Association, would it not be well

loan,

ing

for us to ask from some competent person a full elucidation of this question— what has become of our 1,044
million dollar balance?
And, gentlemen, this balance is as existing as the
etei'nal hills.

ores in those

that

was

hills.

much
It

created as are the auriferous

money, and the real money

in request in primitive times,

posit days,

kind a

It is as

when

old stockings

before safe-deit is of the

were used;

dog can't chaw," but its disappearance is
cud
chew. If it has gone in
ocean freights, we should hr.stir ourselves and do the carrying trade; if in interest, we should hold our own Government obligations; if in travel, it will advertise our
resources; if in foreign investments, our great influence
is broadening; if in buying up our securities, what can
denote greater prosperity? If in income remittances to
wealthy absentees, it shows they cannot carry their investments with them; if in dividends and coupons to
foreigners, it shows we are using their money in developing, and all is well; only if it goes in insurance, it is an
unmitigated di-ain. But to cast a faithful horoscope, we
should know where it has gone, and if it was in my
province, I would move that the Chronicle article, with
our compliments, be referred back for this needed infoi'mation. The paper in another article admits a mys"

" for the statistician to

tery in the settlement of balances.

Gentlemen, this is not a digression. How can the
United States become the clearing house of the world, if
we disregard the disposition of our credit balance? We
should exercise the closest censorship upon it, and we
should handle every dollar of it that is possible. I don't

mind people traveling in foreign parts, and those that
have it spending their money, and spending it luxuriously; what I want is that we shall collect the freight and
insurance moneys and all such charges on our expanding trade. England has been doing this, and what is the
consequence? It is a surprise to everybody. She gets
richer and richer with the trade balances against her.
We base our prosperity upon them, she prospers in utter disregard of them. It is easy to account for, she has
the rake-off.

Detailed Report of Proceedings*
TWENTY-FIFTH ANNUAL CONVENTION, HELD AT CLEVELAND, SEPTEMBER

FIRST DA

Y'S

PROCEEDINGS.
5,

i8gg.

The President: The Vice-Presidents will please take
seats upon the platform, and the proceedings of the
meeting will begin, as the honr set for calling the Convention to order has already long since passed.
Gentlemen of the American Bankers' Association. By
me vested as your President I

virtue of the authority in
call the

Twenty-tifth Convention of this Association

The Reverend Dean Williams, of Trinity Cathedral,
upon the deliberations of our

will invoke God's blessing

assembly.

was made

to dispense

which was carried.]
The President: The Mayor of the City
present to welcome us this morning, and,

with the

roll call,

unable to be

in his absence,

Mr. T. H. Hogsett, Director of the Law Institute of
•Cleveland, will deliver the welcoming address to the delegates to this Convention on behalf of the City of Cleveland.

Address of Welcome by T. H. Hogsett.
{jcntlcmen of the Amn'lmn Bankers' Association:
On account of illness in his family. Mayor Farley
ASked me yesterday

to represent him at this meeting, and
here in his place.
Heretofore I have imagined that if I could successfully cope with one banker at a time I would be doing
reasonably well, though I might not be able to say so
much for the banker. Now that I am called upon to meet
more than one, I give you warning in advance that if the
interest account against me when I shall have finished is
to be in proportion to the numbers I see before me I shall
at once resort to the bankruptcy court for relief.
I believe that as a rule lawyers are fond of the society of
bankers—at least, until the loan has been obtained, and
then, as I understand it, the banker rather seeks the

therefore

lawyer at intervals.
undoubtedly be interested to learn that in
our profession I quite frequently hear complimentary

-society of the

You

will

comments upon these meetings, called
bankers' conventions, and particularly upon the worthy
motives which bring you together. We understand, of
course, that one of your chief purposes is to reduce the
references and

But

seriously, gentlemen, the

meeting in convenbody of men who occupy the most important place in the business affairs of this country must
in its objects and purposes mean much to the industrial,
•commercial and financial world. I am not one of those
rate.

tion of that vast

who deprecate

the existence of banks.

believe the time

has come when the banker provides the conduits through
which the life blood of the vast interests of this country
flow, and that banks are the power houses of the Ameri•can industrial and commercial institutions; each banker
the governor on the engine, and each bank is or should
be a bulwark of safety behind which the credit of the entire country may seek shelter from the storms of the
radical and reckless.
We often hear it said that there

many

banks, but it is just as frequently said that
there are too many lawyers, too many grocers, too many
dry goods stores, and the like; and my observation has
led me to the conclusion that the variety is less in the
banking business than in any other. I believe the vast
majority of those in the banking business are of that
careful, cautions and conservative disposition which is

-are too

so essential to the stability

and permanency of our instiThose of us who seek credit apply to the banker.
Those of us who seek letters of recommendation or certutions.

and

7th.

character apply to the banker. Those
seek aid in time of need apply to the banker.
are worthy we receive what we ask for, as a
rule. Of course, there are exceptions. Sometimes you
will find one ot those close fisted niggardly souls, claim-

tificalcs of gofid

who
When we

ing to be u banker, who will never under any circumstances loan yoii a dollar unless you give him two dollars
to hold as security, and with the right reserved to him to
keep one of them for what he is pleased to term the
' accommodation "' to you, and who thinks that no man
is

to order.

[After prayer a motion

6tti

of us

Tuesday, September

now

5th,

honest or of any moral character who is not engaged
But I venture the assertion,
the banking business.

gentlemen, that you never saw that kind of a man at a
bankers' convention. They wouldn't attend unless they
could get transportation for the round trip for one fare
and could board for nothing with some relative.
In my opinion the influence of the banker upon things
most vital to the interests of the people cannot be overestimated.

the force of their calm

judgment, supported

by that

well

and deliberate

directed action of

which they are so capable, be exercised in favor of those
measures most conducive to the welfare of the people,
good results must follow, and the banks and the bankers
be a blessing to the countrj-. If, on the other hand, they
neglect to carry their able judgment and discretion into
all the things over which they necessarily have much influence they do an injury to themselves and their countrymen almost Irreparable. They injure themselves by
destroying their rights to the confidence of the people;
they injure the people by destroying the confidence reposed in them, to say nothing of the destruction, disaster
and distress which may follow in the wake of such neglect of duty or the wrongful exercise of power.
I believe in what I shall term the banker's conservatism in all things, and such conservatism can be no more
wisely or judiciously exercised than in the matter of the
aggregation of capital.
While I am not opposed to a
reasonable combination of capital and skill in industrial
pursuits, it is my opinion that great trusts and monopolies are a menace to American institutions, and that the
bankers of the country can and should do much in the
way of restraining them, and thereby avert the consequences that must inevitably follow an era of successful
promotions in this line. All aggregations of capital and
of property, or either, should be under such restrictions
and control as will best serve and protect the interests of
iill concerned, and no greater influence can be brought to
bear by such restrictions than that which the American
hanker is .so capable of exercising. Gentlemen, I do not
wish you to imderstand that I subscribe to the proposition that the American bankers are greater than the
American people. 1 simply say that their opportunities
for doing good or promoting evil are many, and great indeed: and I hope the time will never come when the true
American citizen will have cause to say that the American banker is no longer entitled to confidence because he
has exercised his judgment and directed his power in
support of policies detrimental in any degree to the best
interests of the people.
I have spoken thus briefly of the esteem in which the
American bankers are held, and of some of the causes
which merit that high regard.
I only desire further to
say that no more practical demonstration of their greatness could have been exhibited than the choice by this

As.sociation of the City of Cleveland as the place for

holding this Convention; and, gentlemen, while the citizens of our city could but deplore the coming of those
who might bear with them that type of ignorance which
begets callousness they hail with delight that good citizenship which Is born of intelligence, and recognizes and

BANKERS' CONVENTION.

yieUls obedience to the law.
peoph',

Therefore, on behalf of our

bid you welcome.

The President: On behalf

of the Cleveland bankers

Mr. E. H. Bourne, "S'ice-rresident of the Clearing House
of Cleveland, will also welcome us. I take great pleasure
in introduoiui;- Mr. Bourne.

Address of Welcome by E. H. Bourne, Vice-President Cleveland Clearing House.

Clearing House Association, it has become my pleasant
duty to extend to j'ou a most cordial and hearty welcome
to our city, and to express to you our sincere thanks for
your acceptance of our invitation to hold your Twentyhfth Annual Convention with us as the guests of the
banks and bankers of Cleveland.
To the ladies here we express our pleasure and appreciation at their presence, knowing, as we do, that the
noble and elevating influence which they exercise in our
homes cannot but prove the same great incentive and
help to you in your deliberations in this Convention.
Wo appreciate the honor you have shown us, and are
glad indeed to meet and greet you here; and we sincerely
hope that your visit here may be so pleasant and fraught
with enjoyment to you as to insure your return before
another quarter of a century shall have rolled by.
We confide utly express the hope that the work of your
Convention here Avill evidence the same wisdom and
careful foresight as in the past, and that you may accomplish much of benefit to yourselves and the banks and
bankers of the United States.
Such accomplishment
means much, not only to the banks, the bankers and their
customers, but more, far more, to the vast and varied in-

and enterprises of the entire country. You hold
the pulse of trade, and diagnose its needs; it throbs and
thrills in answer to your touch and your action.
Let that
dustries

action be wise.

AVhen we remember that the members of this Convenand agents of the financial in-

tion are the active otficers

stitutions of the couutry, controlling not alone their

capital

and means, but the

own

and accumuwhen we remember

deposits, savings

lations of their customers as well;
that these deposits represent, in thousands of cases, the
accumulations of a lifetime of industry and thrift; when
we remember that in handling these funds we are providing the life-blood of trade, the means that maintain the
farming, mining, manufacturing, mercantile, shipping

and railroad

interests of the country, which support toiling millions of our people, we cannot but realize to the
full extent and appreciate the trust reposed in us, and the
obligation to perform to the utmost of our ability the du-

we have assumed. Not alone are we responsible for
the preservation of these trillions intrusted to our care,
but we are bound to see that they are judiciously used to
further the wishes of the community as well as our own.
As an evidence that they are so used we believe you will
see here, among the thousands of varied industries of
our city, many instances of a business nursed from feeble
infan<;y to a strong and profitable maturity by the careties

and considerate aid of the bankers of Cleveland. The
rapid changes that have been going forward during the
past year in the methods of transacting business; the vast
and varied combinations of capital; the concentration and
consolidation of numerous industries and branches of
trade under one head; and the consequent change in
business and banking methods, may render necessary important changes in our methods, to meet the new and
changed conditions. I have no fear and no doubt that
ihe same foresight and wisdom which have characterized
your actions during the past twenty-five years will be displayed in solving the problems before us, and in anticipating and meeting the requirements of the new conditions.
I have no fear and no doubt you will continue in the fuful

and great

no longer trespass on your time or your good
Avill close by again extending to you a most
cordial and hearty welcome to our city and to the hospitality of our people, and by expressing the hope that
your visit may be one fruitful in pleasant recollections
of the " Forest City," as well as of its banks and bankers.
I will

Response to Addresses

Welconne by George H.

Russel, President of the Association.
I

On account of the une.xpected but unavoidable absence
Mr. Thomas H. Wilson, the President of the Cleveland

in the past, a useful

for tJie good of the country.

nature, but

Mr. President, Mciiihvrs of the American Bankers' Associaiion. and. I niaij saij. Ladies of the American Bankers'
Associ'ition

you have proven

ture, as

power

desire first to

make

grateful acknowledgments to

whose favor I
and have the honor and pleasure to
answer and accept these most kindly addresses of welthe American Bankers' Association, by

stand

in this place,

come.

And now

such representative capacitj', on behalf
of the American Bankers' Association
here assembled, I say to you, Mr. Hogsett and to your
good citizens, and to you, Mr. Bourne and the bankers of
Cleveland, that y\c accept with great pleasure and joyous anticipation your most hearty welcome and proffered
hospitality. This is the only Association that makes parof the

members

ticular boast of the total of its liabilities

can, therefore, accept easily

ther obligations

and obhgatlons.

and graciously the

fur-

your kindness and generous hospitality

heap upon us.
Your city was the first choice of our Council for the
Convention this year, and we all agree that no better
place could have been selected. At this season, too, it is
particularly pleasant for the tired banker to visit so fair
a city, upon the border of this Great Lake. I congratulate you upon having the largest attendance of any Convention in the history of this Association. Last year we
met at Denver at this same season. Then peace was assured, and the beginning of better times, after the preceding lean years, seemed to be established and the prospects for the future brighter for the people.

But now we

can mutually felicitate ourselves that we meet at a time
of the most unexampled prosperity in the history of our
great country. Again Providence smiled upon our broad
fields and the Avorld took our cotton, corn and wheat and
gave us great wealth. But the dawn of a new commercial prosperity and business activity is always first evidenced by the increased manufacture and use of iron and
steel, and here we meet in the very heart of that industry.
Here is infused the iron into the blood of our
rapidly developing commerce and manufacture.
Upon
your wharves and in the harbors of your great lake is
gathered and distributed ten millions of tons of iron ore
from the Northwest, and from it is converted a trade that
has no limit of boundary nor fear of future foreign competition. Into your ports come and go the magnificent
ships of our unequaled commerce.
It seems to me that it is peculiarly fortunate that the
banking interests of this country should meet at Cleveland at this time, where they can best feel the throb and
impulse of an industry that demands no further protection, but can successfully compete with all the nations of
the Avorld.
I am proud to represent this great Association, and I
bear to you the thanks of all here present and the regrets of the manj' members who unfortunately cannot
be present to hear your welcome and accept your courte-

sies.

Annual Address of President Russel.
Members of the American Bunkers' Association
will pardon me, 1 am sure, if I depart from the
tisual custom of a formal address upon some subject of
financial and banking interest, and let me in a few words
speak to you of our Association and the changes that
have come to us and that confront us for the future in
To

the

You

our business as bankers.
It would be proper, and I should like to review at this
Twenty-fifth Convention of the Association, the history
of its growth and the development of the banking interest
in this country for the past quarter of a century.
But

BANKING SECTION.
would weary you. My first oxiu'rieiice in practical
banking and Ihc sympathy I ha\e for bankers runs back
less than a decade. Before that time I met the banker
on the other side of the countei", and now I publicly express my regrets for some unjust and undeserved criticism 1 have passed upon the fraternity of which I am
now a member and seek at all times to defend. However, from either side of the bank counter, we must
recognize the changes that have come during the life of
this

In the past twenty-live years there has
in the number of banks and conseqiiently greater competition in the banking business, a
decrease of fully 50 per cent, in discount rates, much better facilities are given the depositor, and the old ex-

this Association.

been a large increase

cliange and collection charges are well uigli abolished.
There is much larger capital invested and much smaller

banking, more work and responsibility, less
returns and appreciation. In the past two or three years
we note gi'eater resources and a growing independence
of the money centers on the part of the South and West.
profits

But we must accept

tlie

conditions that

now

exist,

and

recognize the fact tiiat with the age and greater wealth
of this nation, the rates of interest will gradually and
naturally decline.

recovered slowly from the financial disturbances
of 1893, but during the following five years, by enforced
economies, the lesser cost of living, the sale of our surplus crops, the large production of our mines, we awoke
to the fact that we were a rich country, and will hold our
place as a creditor among the nations of the world.
To this change of condition the banker must accustom
himself and perhaps largely change his methods. The
business of the country is being done upon a cash basis.
The annual and semi-annual settling days of the older
States are not upon the calendar. The jobber finds his
pi'ofits within the discount of the manufacturers, and tlie
country merchant 4ias learned the lesson, buys more
carefully and pays cash, and so we see business paper
surely disappearing. Banks must invest in other good
securities, which under this new demand appreciate in
value. Under this process and the growing wealth of our
nation hish grade securities will be absorbed, and the
banks will lend their aid to the development of our industries and trade with all nations. Ah-eady we are purchasing the bonds of foreign countries. The savings depositor

must

satisfy himself with a lower rate of interest.

It is to

be ho]jed that this condition will not again

stimulate a fever of speculation, which when it breaks,
as it did in 1S03. may reduce us to a long and anxious
period of convalescence. We must not forget the lessons
of the past. In times like these, we take our reckoning
and set our course. With clear skies and favoring winds,

we know

that storms

responsibility of

of such prosperity as

many
ised.

must come, and we should feel the
and cargoes we carry. In times

tiie lives

tliis,

bankers will be tempted with

visionary schemes, in which large profits are promTlu'Se must be avoided, while we must not too con-

servatively deny aid and encouragement to the development of our most wonderful resources.

lower

Central and far Western cities than

York City

New

In the matter of collection charges, the Clearing House
New Yorlc City has set an example which

Association of

be hoped other Clearing Houses in the larger
cities may promptly follow, and that the members of
this Association may not longer conduct and advertise
the Great American Free Express and Collection Comit

exchange and collection
would partially reimburse the larger banks for cost of
stationery and stamps. In other countries these exchange
or commission charges go far tow^'ird paying the entirepany.

reasonaljle cliarge for

administration nccount.

no tlieory of currency reform to propose. I
recommendation of the Congressional Committee appointed for that purpose Avill declare unequivocally in favor of the Gold Standard, sift and reconcile
the diffeiences of theorists, and propose such moderate
reform measures as will commend themselves to the
united support of this Association. I am a State banker,
yet I desire a currency under National regulation, and it
may be th;it under the policy to which we seem committed we shall likely have bonds enough to secure sufficient issue of currency and reserve gold enough accumulated by the banks to meet any probable call for redemption of currency.
And an Association like this, with a
membership of nearly four thousand, representing a total
deposit of foui- and one-half billions of money, largely
the savings of wage earners, can and should not fear to
use a conservative influence in favor of a monetary system best adapted to our new conditions.
Consolidation and combination are the order of the
day, and in many instances it Avould be desirable to consolidate banks, where the smaller banks separately cannot
use their deposits with safety to their depositors or profit
to the stockholders, after paying the cost of administration. We have looked with alarm upon industrial comI

liave

trust that the

and yet many of them, conservatively formed, will remain with us, and by intelli-

binations or Trusts, so called,

gent and economical administration and a lessening of
the cost of selling to the consumer, may serve to largely
expand our home and foreign trade. Bankers after a
time Avill need to investigate carefully and discriminate

among these gigantic industrial organizations. Like
the department store to the small merchant, these large
corporations will seriously affect the business of the
banks in cities which are not favored with the location
of their head offices and finnucinl management.

fairly

We enter under tlie most auspicious circumstances
another year, which will probably show the greatest development of the resources of this country. However,
let us realiz(> our responsibilities, put a curb on wild
speculation,

and

Gentlemen,

in all things choose a " golden

mean."

congratulate you upon the growth and
influence and interest and education evidenced by this
large attendance.
I thank you for the distinguished
I

honor of presiding over the deliberations of such an assembly. Under your excellent constitution the President
has no other duties. I can therefore commend to you

I have referred to the growing wealth and financial
independence of the South and West. I can best give
you an mstance by citing statistics from my own State
For
of Michigan, which are easiest obtainable to me.
year ending .Tune 30th, 1899, in the one hundred and
the
eighty-five State Banks, eighty National Banks and three
Trust Companies of Michigan, there was an increase in

the administration of your affairs by the Executive Council and its most efficient and untiring Chairman.
I can
praise the work of your Secretary, whose report shows

the total deposits of .$20,949,795.53; of this amount .$8,.Tanuary 1st, 1899,
344.623.77 was in savings deposits.

approval and strike terror to the evil doer. The Special
Committees have given much time and care to the subjects committed to them, and their work will certainly
l)rove advantageous to the Association.
The Chairman of the Council has prepared a pro-

a total deposit in the banks of Michigan of
.$127,975,498.75, and on .July 1st, 1899, a total of .$140,-

there

was

showing a gain for the first six months of this
year of over .$13,000,000. It is probable that this proportionate increase may obtain throughout the great States
of the West. Do you wonder, then, that this year and
probably for the future, we can handle our crops without
financial aid from the great money centers, and tliat for
tlie past two months inteicst rates have been actually

311,.5.j8.29,

progress in every line and figure. The report of your
Treasurer shows a sound condition of our finances and
an increasing balance in the treasury. The report of the
Protective Committee will, I am sure, meet with your

gramme

you and invite your discussion.
coinjiosed of bankers, know that
bankers are sometimes social beings, and have provided
in bounteous measure for your entertainment and enjoythat

Avill

interest

The Local Commiftof^s,

ment.

The President: The next business in order
nual report of the Secretary.

the an-

RANKERS' CONVENTION.

sions about banking,

might not

This being the twenty-fiftli anniversary,
here briefly
be reganled as out of phice to refer
it

liaul<ers' Association.

ting National

to the

The

steps was given
ciation. The story of the preliminary
of 1895. The first
by this gentleman at the convention
F. Baker,
meeting\vas attended by the following: Geo.
Y.; Arthur
York. N.
cashier. First National Bank, New
Dry Goods Bank. New York, N.
cashier,

Sherman,

\V.

Y Edward
Y

York N.

;

New

Bank,
Skillen, cashier. Central National
cashier, Importers
Edward II. Perkins. Jr.,

York, N. Y.; George W.
New York, N.
Perkins, ca.shier, Hanover National Bank.
Leather
Y John M. Crane, cashier. National Shoe &
Harburger, cashier,
Bank Ne^^- York, N. Y.; John S.
Y.; Charles
Manhattan Company Bank, New York, N.
John S.
E Upton, cashier. City Bank. Rochester, N. Y.;
Saratoga Springs.
Leake, cashier. First National Bank.
Albany City National
N Y Amos P. Palmer, cashier,
cashier, Eliot NaBank,' Albany, N. Y.: Royal B. Conant,
Morton McMichael, Jr.,
tional Bank, Boston, Mass.;
National Bank, Philadelphia. Pa.; John D.

Traders- National Bank,

New

•

cashier. First

First National

Scully,

cashier,

.loshiia

W. Lockwood,

cashier,

Bank,

Pittsburg,

National

Bank

cashier,

Pa.;
Vir-

Ken-

Richmond, Va.; Logan C. Murray,
Charles C. Cadtucky National Bank, Louisville, Ky.;
National
man" cashier. Merchants' & Manufacturers'
Howenstein, cashier.
Bank, Detroit, Mich.: James T.
Mr. Hall, of BosValley National Bank. St. Louis, Mo.
secrewas elected president and Mr. Howenstein
ginia,

banks

tlie

clearing house system, permit-

to loan

money on

i-eal

estate, etc.,

In 1880 the association again met at Saratoga. In
1881 the meeting took place at Niagara Falls, returning
to Saratoga in 1882. The variety of the topics which
came under review gratlually widened, including the history and operation of the banks of different States and

etc.

sen-

history of the American
organization,
timent wliich led to the formation of this
of the constitubeing embodied in the preamble
18T.->
ot
.T. T. Howenstein,
tion, is familiar to us all. To Mr.
assoaccorded the credit of founding the

Washington,

and the National banking system, popular delu-

Soutli

Branch.
Report of the Secretary, Mr. James R

the status of foreign banking. The currency question, of
course, came up in all these meetings. At the convention
of 1882 a good deal of attention was given to Southern
credi'

and industrial progress.

In 1883 the convention was held at Louisville, at which
a paper was read on the appreciation of gold. At this
meeting our present Secretary of the Treasury was
elected president of the association. A notable increase
of valuable banking literature signalized the convention
of 18S4, which was held at Saratoga Springs. It was at
this meeting that the still unsolved question of the collection of country checks came up for the first time, as
also the possibility of a clearing house for interior paper.

At the convention

of 1885 the

main feature was a

dis-

cussion of the silver question, brought about by the introduction of a rc-solution demanding the suspension of
the coinage of silver dollars, then going on under the
Bland-Allison act. It is of intei'est to note that this reso-

which was adopted unanimously, declared that
suspended until an " international
agreement with leading commercial nations shall give

lution,

this coinage should be

substantial assurance as to the future relations of gold

and silver as money." The advance of the association
from this rather vague and bimetallic position to its
present firm adherence to the single gold standard is in
accordance with sound reason and accumulated experi-

There were also papers on defalcation, bank deand panics, uniform legislation regulating commercial paper, relations between interior banks and their
city correspondents, extradition laws, bonds for officers
aud employees and banks as collection agencies.
In 1886 the association met at Boston, on which occasion the noteworthy papers discussed the financial situation, that topic being treated by the Controller of the
<]!urrency, Mr. W. I. Trenholui, branch banking by Mr.
Hague, the well-known Canadian banker, and bills of
lading as collateral for loans. The convention of 1887
was held at Pittsburg, and that following at Cincinnati.
The labor question having become prominent about that
time through the rapid groA\ th of the organization known
as the Knights of Labor, a papt-r was devoted to that
subject by the late Elliott F. Shepard. of New York
city, at the convention of .1887.

ton,

ence.

tary.

posits

convention was held at Saratoga, N. Y. The
were the taxquestions of chiefest interest at the time
banking capital and deposits and the usury

The

first

ation of

Overshadowing these was the problem of the reusury are
sumption of specie payments. Taxation and

laws.

opportunities
matters will still afford the association
specie payments is
for debate, while the resumption of
ail accomplished fact.
Philadelphia,
In ISTO the convention was held at
was in progress. The
where the Centennial Exposition
temporary clmirmnn of that meeting referred to the fact
on Conthat a committee of the association had waited
and
gress to urge measures for the benefit of the people
the relief of business.

lamented that the commitvain: and yet when we look back

had been in
from our piesent far off point of vantage,

tee's v.-ork

was not

al-

In that convention the then ex-Secretary of the Treasury, Hugh McCuUoch, delivered an
address on the " Financial Condition of the Country,"
aud Mr. Coe, late president of the American Exchange
National Bank, discoursed on the currency, all of which
seems like a leaf torn out of one of the reports of our

together fruitless!

recent conventions, so perennial seem these questions.
In the convention of 1877, held at New York city, the
cnly convention, in fact, that New York has been honored
with, the discussion of the resumption of .specie payments and the silver question took up a good deal of

tical charity, etc.

time.

The convention of 1878 was held at Saratoga, This
meeting was signalized by a larger number of addresses
than that of any previous one. The familiar questions
" greenbacks " over
of the alleged public preference for
against banks received
bank notes and the prejudice

some attention after the reading
these topics. At the convention

In 1889 the association met at Kansas City. A large
its time was taken up with a discussion of the
policy of the Government towards silver, and a resolulion was referred to the Executive Council urging members of the association to use drafts of uniform size.
Papers were read on the questions of preserving the National banking system, a National clearing hotise for
banks, collections. State securities for National bank circulation, the coinage of the silver dollar, mortgage loans,
bank examinations, deposits of National banks with State
banks, and the influence of bankers and banking in pracportion of

two able papers on

of 1879, held at Sara-

toga, the secretary was able to congratulate the delegates
A
on the successful resumption of specie payments.
prominent feature of the meeting was an exhaustive paper by the thon Controller of the Currency, John Jay

Knox, on the operations of the National banking system
aud the currency question in general. There were papers on silver as money, losses by bank failures, the

prominent feature of the conveution of 1800. which
held at Saratoga, ^^as an address by Prof. James on
" Schools of r'inance and Economy." and a notable ar-

was

as the main factor in making prices, by
Mr. Atkinson, of Boston. Mr. Torrey. of St. Louis, read a
paper on a National bankruptcy law. and there were pa))ers on the bonding of bank oflicers and clerks, clearings
ticle

cre>dit

of country collections, banking on the Pacific coast, the
functions of clearing houses, safety paper as a protection

against fraud, etc. The next convention was held at
New Orleans, at which Prof. Hadley, now president of
Y'^ale University, read a paper on recent railroad legislation and its effects on the finances of the country. At
that convention the Executive Council brought in a report advising the association to talvc steps toward

tlio

BANKING SECTION.
institution of a scliool for the thorough training of young
men in the theorj' and practice of banlcing. At the same

convention an important question arose respecting the relationship between the State Banliers' Association and
ihe American Banliers' Association. A serious crisis had
in fact been developing in the history of our organization.
There was a feeling that the work which it was doing
could be better done by an organization, made up of delegates from the State associations, nineteen of which had
already been organized. Happily, a solution was afterwards found whereby the delegates from the State associations were accorded a representative place in the

American Bankers' Association. The discussion culminated in the following convention, which was held at San
Francisco, where a resolution was introduced providing
for a radical reorganization of the association, the preamble of that resolutioji embodying a severe criticism of
the manner in which the affairs of the association were
being conducted. That the matter had become serious is
obvious from the reports of the secretax*y- In 1891 the
membership was 1,993, while in 1895 there were but 1,527
members who paid their dues.

The convention of 1893 was held at Chicago, under
circumstances of gravest import. The convention was to
meet in August, but on account of the panic did not take
place until October. In the circular letter announcing
the postponement of the convention, signed by W. H.

Rhawn,

president,

ecutive Council,

and

chairman of the Exwas urged that an immediate and unE. H. Pullen,

conditional repeal of the

Sherman

silver act

was

of the

greatest necessity, and that the association should do
what it could to promote this end and strengthen the

hands of the President, who had CQUvened an extra session of Congress for that purpose.
In 1894 the convention was held at Baltimore, under
more favorable auspices. At that convention a resolution
was adopted favoring a change in the banking system,
now known as the Baltimore plan. Addresses were read
on the influence of the public press on finance and the responsibility of bankers to the general public. The panic
of the year before had left indelible impressions, and the
need of spreading correct views of the true functions of
banks was felt more than ever, owing to the slander
which had been spread in the West and South to the effect that the American Bankers' Association had deliberately brought about the panic. A noteworthy paper
was presented on the protective features of the association and proposals for rendering the committee more
efficient were adopted. The clause " and for protection
against loss by crime," which appears in the declaration
our constitution, was not included in the original draft,
but was added to it in 1881. The possibility for good
which lay in it did not really become manifest to the as-

Efforts were made to proof the association against the operation

sociation until recent years.
tect the

members

were too crude to be effective. In
1888 the secretary reported that he had endeavored to
communicate with the police authorities of the country
in order to procure early information of the operations of
bank robbers and forgers, but that he had not been successful. In the convention of 1890 Mr. Van Allen, of Albany, offered a resolution appropriating $5,000 towards
making the protective feature of the association's work
effective, and a plan was proposed to aid members who
had been defrauded or robbed in the arrest and prosecution of the depredators. In 1891 a resolution .was passed
appropriating $2,500 for the use of the Standing Pro
tective Committee, and a plan of operation was adopted.
This was more fully elaborated in the report of the next
year. In 1894 the chairman of the Executive Council,
the late, and, I may well say, widely Lamented Eugene
H. Pullen, suggested earnestly that the work of the Protective Committee should be greatly extended and more
attention devoted to it. The amount of money appropriated for the use of the committee was increased to $5,000,
and this proved to be the beginning of that remarkable
of forgers, but they

series of

triumphs for the safety of the banks with which

you are now

47
all familiar,

which has resulted

ture of 199 criminals since 1895.
The convention of that year

was

in the cap-

held at Atlanta.

There a rule was adopted permitting the State Bankers'
Association to send one delegate for each fifty of their
memliers to the American Bankers' Convention, entitling
such delegate to all the privileges of the same. The Executive Council was increased from 21 to 30 members,
and other amendments were added to the by-laws of the
association calculated to facilitate its work and extend its
usefulness to the banking fraternity. INIost of the addresses of that convention were devoted to the currency
and banking questions in anticipation of the issues which
were to threaten the business and banking communities
in 1896. The convention of the Presidential year was
held at St. Louis, where but a few months before the Republican party had declared for the gold standard. The
report of the Executive Council referred to the competition which the express money order exercised against the
banks, thus recognizing a problem in practical banking
which several of the State bankers' associations had already attacked with varying success. A luminous and
noteworthy report from the Pinkertons' National Detective Agency, co-opei'ating with the Protective Com-

was also presented. The secretary's report showied
a large and encouraging increase in membership. There

mittee,

was a thoroughly

practical discussion of the question of

payment and on the
A report from the
American Warehousemen's Association, showing its work
in improvii'g warehouse interests and the interests of
those dealing with such business, was read and referred
to the Executive Council. Other practical questions were
debated, among them the collection of interior checks and
the safeguarding of checks and drafts against fraudulent
alterations. At this convention the Trust Company Section of the American Bankers' Association was organized.
Although the convention avoided any definite reference
to the issues of the presidential campaign then pending,
the Executive Council had adopted a resolution some
months previous to the meeting in which it stated that
" The Executive Council of the American Bankers' Asdiligence in presenting checks for

abolition of restrictive indorsements.

declare unequivocally in favor of the maintenance of the existing gold standard of value." and all
members of the association were urged to do their utmost, as citizens, to promote that end.
The convention of 1897 was held at Detroit. The currency and banking questions were discussed, cuiTency
shipments by registered mail under proper insurance, the
organization of National banks of less than $50,000 capital, the present limit; express money orders, and other
matters of practical interest came up. In 1898 the convention met at Denver. The Spanish war had come and
.sociation

A report favoring a Congressional inquiry as to
the banking systems of our newly acquired territories
gone.

was

adopted. Mr. Pullen, in a remarkable address, de
the experiences and observations of his thirtyseven years of service in the National Bank of the Retailed

public, New York. Other subjects were: the Need of
banking facilities in Rural Neighborhoods, the treatment
of bank Clerks, uniformity of law for holidays and days
of grace, Banking and its relation to industrial develop-

ment.

The membership and resources

of the Association have

increased as follows:

1880—
Paid membership
Annual dues

1,325
.$10,597

1885
Paid membership
Annual dues

1890—
Paid membership
Annual dues
November 1st, 1895
I'aid membership
Annual dues
September 1st, 1890
Paid membership
Annual dues

1,395
jf

lo 940
1,828

.'$14,490

1,711
."514,145

3,915
$53,240

BANKERS' CONVENTION.

48
.S.'!<»,0(»0

was

tiansferrt'd as per order of the Executive

Membership to the Staudiug Protective
the Treasurer holds !f24,000 Government

Council, from the

And

Accouur.

bonds, the value of which is $26,4t)0.
lu the past year 211 members were lost through

fail-

and withdrawal from the Association,
leaving the membership at the beginning of the fiscal
7-11 members have joined from September
year o,174.
1st, IS'JS, to September 1st. IS'JU, a net gain over last
year's total memberslup of 530.
liiiuidatiou

ure,

The

roll

now embraces 3,910 members, whose

cap-

surplus and undivided profits aggregate.
Combined deposits
ital,

This

46,225.00

$125,151.64

DItiliURSEMENTS.
Disbursements as per accompanying vouchers
$70,641.74
Drafts charged back account dues for year 1898-'99
111 at $10.00
$1,110.00
61 at 15.00
915.00
:

.$1,230,192,191
4,501,367,328

Total

Drafts deposited in Continental National Bank, Chicago, i^or dues for membership for the ensuing
year (subject to deductions for unpaid drafts)
1,672 at IjilO.OO
$16,720.00
1,249 at
15.00
18,735.00
225 at 20.00
4,500.00
209 at 30.00
6,270.00

8 at
8 at

$5,731,559,519

$841,211,025 mere than the

same

160.00
240.00
2,425.00
52,084.90

assets of last
Balance on hand close of business, August 31st, 1899.

year's membeis.

These figures do not include the capital and deposits of
372 members who are private bankers and make no statements.
Want of space and time has forced me to make this
imperfect review of the history of our Association as
brief as possible, but a careful perusal of our published
proceedings will show that they are an almost perfect
history of the linanclal affairs of this country for the last
quarter of a century. No transaction of moment to the
financial world has occurred in that period but Avhat it
has been discussed and debated at our annual Conven-

The Association, which was practically started to
induce the Government to resume specie payments, has
never ceased to work steadily and openly for the benefit,

tions.

not only of the banking fraternity, but the country at
large.
One thing stands out clearly, and that is the

American Bankers' Association has become what it was
intended to be— an organization of utility for banks and
bankers, and an autho;^'itative exponent of the highest
aims and purposes of the banking world. To-day, long
.since emerged triumphant from the vicissitudes which at
one time threatened the Association's welfare, if not its
actual existence, it has a membership of nearly four
thousand, and looks forward with confidence and enthusiasm to a still larger recognition of its usefulness.
The Secretary desires to thank the officers and members for their uniform courtesy and cheerful efforts to
assist in the upbuilding of the largest Association of
banking men the world has ever seen. Very respectfully,
J AS. R.

Branch, Secretary.

The President. Gentlemen, you have heard vhe report
of the Secretary. Wiiat Avill you do with it ?
Joim H. Leathers, of Louisville, Ky.: I move that it
be received and printed in the ])rocecdiugs of the Convention.

$125,151.64

STANDING PROTECTIVE ACCOUNT.
Balance on hand, August 15th, 1898
Transferred to this account from General or Membership Account as instructed by resolutions of
Executive Council

$1,649.84

30,000.00

$31,649.84

Disbursements to September
.*
vouchers
Balance, September

per accompanying

1st,

22,709.14

1899

1st,

$8,940.70

The Treasurer holds for the Association as an investment the following United States Government bonds:
$14,000 par value 5 per cents, of 1904, valued at

$15,610.00

$10,000 par value 3 per cents, of 1918, valued at

10,850.00

Respectfully submitted,
(tEO.

M. Reynolds, Treasurer.
and take

Tlie President: This report will be received

the
I

same

now

course.
call

upon Mr.

C. A. Pugsley, of Peekskill, N. Y.,

to present the report of the

Auditing Committee.

Report of Auditing Committee.
Cleveland,

O.,

September

no objection

Balance on hand as per last report
Iteceipts during the current year

$65,286.81
59,864.83

Total

$125,151.64

Disbursements as per vouchers at close of business,
August 31st, 1899, including unpaid drafts returned

73,066.74
52,084.90

will t.nke

STANDING PROTECTIVE ACCOUNTS.

that course.
in order

comes the annual report of the Treas-

Balance on hand, August

1st,

1898

1,649.84
30,000.00

Ueceipts

urer.

George M. Reynolds.
Cuwxco, Septeml.er 1, IS'Ji).

Ffeport of the Treasurer. Mr.

To the American Bankers' Association:
Gentlemen.— I have the honor to submit the following
report of receipts and disbursements since the beginning
of the current liscal year--viz., August l.j. 1898:

GEXERAL MEMBERSHIP ACCOUyT.
IJalance on hand, August 15th, 1898
Kebate. account bond issued Walker Hill, Treasurer
.

Interest on bonds

Dues from members, 1898-'99
4.-)0

22:5

1900
116 at .^lO.OO
106 at 15.00
10 at 20.00

advance for 1899-

6 at

22.50
30.00

1899

$8,940.70

of the Association are in good condition.

Respectfully submitted,
C. A. Pugsley,

I'resident: This

will

$1,160.00
1,590.00
200.00
22.50
180.00

be received and take the

usual course.
The next business in order, gentlemen, is the report of
th<; Executive Council, which will be presented by its

chairman, Mr. Alvah Trowbridge, of

1 at

1st,

Your committee has examined the accounts and
vouchers and find the same to be correct. The books
and papers haA'e been correctly kept, and the finances

The

4.50.00

9,477.33

members paid

$31,649.84
$22,709.14

1899

hutton,
John IL Leathers.

062.33
old

Balance on hand, September

!i;4..

Dues from

1st,

20.00
30.00

5 at

65,280.81
10.00
1,000.00

500.00
3,345.00
520.00

15.00

26 at

Total

Disbursements to September

at .$10.00

1899.

To the American Bankers' Association:
Gentlemen.— The undersigned committee, appointed
to audit the accounts of the Treasurer, beg leave to make
the following report:

Balance on hand

Tlie President- If tliere

20.00
30.00

New

Y'ork.

Report of Executive Council.
Trowbridge: Mr. President and Gentlemen of the
The progress of this
.Imerican Bankers' Association.
Association for the past year is no less encouraging than
.Mr.

3,152.50

BANKING SECTION.
during the two previous years upon which I had the
As you have learned from the rehonor of reporting.

members

port of the Secretary, from 1.911

in 1S9G, 2,800

we have now
and if the Secretary had stayed at home
r>,915 members,
another day there would have been 3,930 members to remembers

in 1897, 3,400

port in 1899 (applause),

members

and

in 1898,

ican Bankers' Association is
tion in the world holds good.

statement that the Amerthe most important Associa-

As the years go by we are taking up the most important questions of banking and general business and
discussing them from practical points of view, and the
reports of our committees will show that we are making
an advance on every line. Our protection from swindlers,
our progress in the establishment of uniform laws regarding commercial paper and the successful relationships
which have been established among the fraternity are all
of the greatest value and well worth the labor and
The
thought which we have given to these subjects.
protection, uniExecutive Council has its committees on
form laws, education, credits, fidelity insurance and
warehouse receipts, and all these reports, which will be
presented, will give you the results of active discussion
and investigation. Hence, one by one we are bringing
every branch of trade into harmony with sound prinfiples. and bankers everywhere are taking their place as
<onser^ators of public credit.
Twice I have reported that every member should en<1eavor, in ihe interim between our annual Conventions,
to bring in at least one new member of the Association
in order that we might include the whole fraternity in
our body, and this recommendation I present again for
the last time, as my term of office as a member of the
I beg to
Executive Council expires with this meeting.
<>xpress to the Conned and to the Association my grateful
thanks and my appreciation for the imiform courtesy
which has been extended to me as chairman during the

is authorized to prepare and set up in his office a model
credit department, and to furnish such information as he may
be called upon for, from time to time, to the members of the
Association, regarding the workings of the same, and also to

hereby

prepare and furnish to the members of the Association at cost
price any and all blanks which are needful in connection with
the same.

Robert

Lowry, of Atlanta, Ga.:

move

the adop-

tion of those resolutions.

George M. Kej'uolds, of Chicago, 111.: I second them.
James H. Willock, of Pittsburg, Pa.: One moment,
Mr. President. I should like to know what this proposed
Credit Department is. This is something entirely new to
me, and I would like to hear some one, who knows something about the subject, explain it in a two or three
minute speech.
1 am not prepared to vote upon it one

way

or the other.

James G. Cannon,

New

York:

Convention

If the

and action upon these resolutions to remain open until to-morrow, after I have made
my speeches laid do^vn on the programme, I will then
give full information to the gentleman, and think I can
satisfy him and every member of this Association of the
wisdom of adopting these resolutions.
The President: With the consent of the Association
will kindly allow discussion

that course will be followed.

any

There not appearing to be
by

objection, the matter will lie over, as requested

Mr. Cannon.

EXPRESS COMPANIES DEALING IN EXCHANGE.
Mr. Trowbridge: The following communication was
received by the Council, approved by
tion contained therein

recommended

it,

and the

resolu-

Convention

to the

for adoption:

Whereas, The several express companies are actually carrying on the business of buying and selling domestic and foreign

exchange and
Whereas, Under Section II. of the War Revenue Law persons
and corporations dealing in exchange are deflhed as brokers,
and are required to pay a special annual license tax of $50 and
Whereas, While banks and bankers are each required to pay
such United States license tax, the Commissioner of Internal
Revenue for some reason has decided that the express companies are not sublect to such war tax as brokers, either for
their principal offices or for their numerous and various branch
offices in which exchange is bought and sold
and
Wliereas, Such decision is not only an injustice, but a great
injury to the banks and bankers throughout the country, and, in
our opinion, a manifest violation of the strict interpretation of
the War Revenue Law
Therefore, Resolved, That a committee of three be appointed
:

;

past three years.
The Executive Council held a meeting last evening
at the University Club, in this city, and there are several
matters which I, as chairman, was directed to submit
to this Convention to-day. The first is the following

;

resolution:
Renolred, That the Executive Council recommend the adoption of the form of bond drawn for the Association by Messrs.
Butler. Notman, Joline & Mynderse. and copyrighted by our
Committee on Fidelity Insurance.
Reaolvcd, That any company doing a fidelity business who
may file with the Secretary a statement that in consideration
-of the privilege of writing our copyrighted form the said company will not furnish this- form to any bank not a member of
the .-Association be permitted to write said copyrighted form of
bond during the pleasure of the Executive Council.
V\'c

recommend the adoption

of this resolution

by the

Convention.

ACTION OF CONVENTION ON FOR.M OF BOND.

The

President:

What

the pleasure of the Conven-

tion in respect to this matter

G. D. Abel, of Mississippi:

The

resolution

UNIFOKM

AND

was

111.:

consideration, and to report to this Convention recommendations
for the correction of any violations of the letter or intent of the
War Revenue Law, and the resulting damages and loss to the
banks and bankers with whom the untaxed express companies
and their thousands of industries are now competing in the
business of buying and selling exchange.

F. W. Hayes, of Detroit, Mich.:
of that preamble and resolution.
D. B. Cooper, of Helena, Mont.:

move
second

the adoption
its

adoption.

The resolution was adopted.
The President: I will name as the committee under
that resolution the following gentlemen: F. W. Hayes, of
Detroit, Mich.; Charles H. Hanan, of Council Bluffs,

second the resolution.

Iowa; Ferdinand Kulme, of New York City.
This is an important subject, gentlemen, and the Chair
feels that it has committed it into good hands.

adopted.

STATEMENT
DEPARTMENTS.

I'ROrERTV

by the President of this As.soeiation to give this subject careful

the adoption of the

move

resolution.

John Farson, of Chicago,

;

ULANK.— CREDIT

PROPOSED AMENDMENTS TO THE CONSTITUTION.

Trowbridge: The Executive Council also approves, and orders submitted to the Convention, the following resolutions, prepared by a member of the Executive Council, Mr. James G. Cannon, of New York:
Mr.

Mr. Trowbridge: Mr. Bradford Ilhodes, a member of
the Executive Council, presented to the Council last evening certain proposed amendments to the constitution, as

and the Council directed me as its Chairman to
same to the Convention to-day, with the recommendation that they be not passed:

follows,

report the
HcHOlved, That the Secretary of this Association be and hererequested to confer with the Vice-Presidents from the vari•ous States and prcpar'- a uniform and property statement blank
which can lawfully be used in each State of the Union by the
members of this Association, the same to be designated as the
titandard Form of the American I'.ankers' Association the statement blanks to be supplied to members for their use at cost
price. up»n application at the Secretary's office.
Resolved, That the American Hankers' Association, in convention assembled, approve the system of Ci'edit Departments
for banks, and that the Secretary of this .-Association be and he

;

Mamauoxkck, Nrw York, August

3d, 1899.

Mr. .James R. Jlranch, Secretary Kxecutice Council of the American Bankers' Association, 20 Broad Street, New York
City. N. Y.:
SiH.
I herewith beg to submit proposed amendments to the
constitution of the American Hankers' Association, as provided
l)y -Vrticle IX,
Section 1 of the said constitution, to go into
etTect iniinedliitely upon adoption by the Convention.
Ani'.'iu; -Article III, Section 2, by inserting the following para-

—

BANKERS'

in sa'd Section immediately before the wording of the
Section as printed in the Proceedings of the last Annual Convention
" The order of procedure to he observed in nominating candidates for the office of President and First Vice-President shall
be as follows: Immediately before the first adjournment that occurs in the session of the Annual Convention, the Convention
shall resolve itself into a Committee of the Whole for the purpose of nominating candidates for the office of President and
The usual parliamentary order shall be
First Vice-President.
observed in the proceedings.
" The Chairman of the I'^xecutive Council shall preside, and
appoint three delegates to act as tellers, and also three delegates to act as ballot clerks, distribute blanks and collect the
ballots.
After the Clerks have distributed blank ballots, the
Chairnian will state that nominations for the office of President
are in order, and direct the Secretary to call the roll of States
and Territories in alphabetical order for such nominations, each
State and Territory represented in the Convention to be entitled
Upon the
to present a candidate for the office of President.
completion of the roll-call and presentation of candidates, the
ballot clerks shall proceed to collect the ballots, delivering same
Upon completo the tellers in tho presence of the Convention.
tion of the count, the tellers, by one of their number, shall announce the total vote cast, and the vote for each candidate reand the two candidates receiving the highest numspectively
ber of votes shall be declared to be the candidates before the
Convention for the office of President.
" Candidates for the office of First Vice-President shall be

CONVENTION.

graphs

;

selected in like manner."
In Article III, Section 2, as now printed, at the end of the
first sentence, after the words " Committee on Nominations,"
add " for members of the Executive Council."
At the end of Article III. Section 2, as now printed, after the
words " unless otherwise ordered," add, " the election for officers
and members of the E.xecutive Council, as herein provided, shall
occur under the proper order of business at the final session on

the last day of the Annual Convention."
Respectfully submitted,
(Signed)

Council.

And.

members

move

the adop-

and recommendation of the Executive
may have been misunderstood by

lest I

Council in the course I tools at its
meeting last night, I desire to explain my position here.
At the meeting of the Executive Council I moved that
Mr. Rhodes' proposed amendment, which has just been
read, be brought before this Convention for its action
to-day. I did that not to stifle and kill the amendments.
I voted simply for
I did not vote for or against them.
here, because I thought it proper and
their presentation
the only right thing to do. This is a matter of such extreme moment that I thought the whole Convention
should dispose of it instead of having it disposed of by
the Executive Council. I wanted the matter decided on
its merits.
The Constitution of this Association says
that its otlicers shall be nominated by a nominating
committee, which nominating committee shall be composed of representatives from every State in the Association. When that committee reports to the Convention
the Convention can either approve or disapprove the action of the nominating committee or substitute other
nominees. That is the present method imposed. Now,
Mr. Rhodes' proposed amendments would take that duty
from any nominating committee and throw the whole
matter open to the Convention in a more or less confused manner. I think it is a decidedly wrong thing to
do. In the nominating committee as constituted every
State has equal representation. The nominating committee get together in private, without confusion or disorder, and pass upon and consider the qualifications of
men for these high oflices. The method proposed would
change all that, and would make our Convention a political gathering, where the mass of the delegates would
be liable to be swayed by an elocjueut speech, and where,
besides. States like New York and Pennsylvania, having
a larger attendance of delegates than any other States,
would be able to nominate the President and other high
officers every time, and States without so large a representation would never get a representation in the
the

tlie

offices.

M. M. White, of Cincinnati. O.: I second the motion
that has just been made by the gentleman from Texas.
Gentlemen, it is not the object of this Association to
make these meetings of a political character, and we do

methods

to prevail.

It is

unbecoming

methods. There is no danger in following the plans we
have followed that we shall get an improper man elected
President, or get somebody who is not qualified to sit as
member of our Executive Council.
I regret very much that this proposition
has been
presented.

Bradford Rhodes, of New York: Mr. President and
gentlemen. On behalf of the minority of the Executive
Council I wish to take your time for a very few minutes, to giv(^ you some facts in regard to the rise and
progress and present conditions of the American Bankers' Association from the standpoint of the men behind
the guns.

glad to see over the platform here the word
It is a good omen for this Association.
We
have progressed in numbers remarkaJbly during the last
five or six years, but we have not progressed in good old
fashioned Amei'ican methods of doing business. When
I

" Progress."

friend from Cincinnati (Mr. White) was made President the Committee on Nominations consisted of five
men appointed by the Chair. At Detroit, two years ago,
we succeeded in amending the Constitution, admitting
into equal membership in our Council the delegates from
State Bankers' Associations. So that now one-half of
them are elected directly by the several State organiza-

Now, the members

man from Arkansas

the

Bradford Rhodes.

political

the dignity of these American Bankers' Associations.
We believe in the principle of the offices seeking the men,
not the men the offices. Let us get down to practical

tions.

A. P. Wooldridge, of Austin, Texas:
tion of the report

want

not

ward politicians, and
Alabama or from Cali-

are not

or from

fornia has and ought to have the right to say in the Convention Avho he wants nominated to fill the offices. According to the plan I have proposed it will not occupy

more than

thirty minutes of the time in the Convention:

from Alabama to Wyoming,
and allowing each delegate to stand up and nominate
calling the roll of States

whom he pleases. I claim that we cannot delegate to
a committee consisting of one from each State the full
behests of our wishes. It it not democratic, it is unAmerican and

unfair, and we are too big and too wise,
hope, to go back to such antiquated methods. Therefore I move, as an amendment to Mr. AVooldridge's motion, that the report of the Executive Council and its
I

recommendation be not agreed

to.

E. Kniseley, of Toledo, Ohio.: I desire to make a
suggestion. I am opjiosed to disposing of this question
I.

to-day.

main

settled.

now the matter won't rebest policy to pursue is to let the

vote upon this

The

members who have come here understand what this
amendment means, and understand what the old method
Executive Council stood eight to seven upon
this matter this Convention may stand just as nearly
even as that, and I do not think it right to dispose of
this question hurriedly. Due consideration ought to be
given to the sentiment that actuated the minority of the
Executive Council. This question has been up before,
and it will be up again unless we settle it now in a fair
and amicable manner for all time.
The President: You mentioned a vote of eight to
seven in the Executive Council
Mr. Kniseley: I simply inferred so from what I have
is.

If the

heard.

The President: It so appeared in the public press this
morning. I desire to say that there was no minority
of the Executive Council authorized to make a report.
No minority report was noticed in the Council. How
the deliberations of the Council appeared in the morning papers I can best leave you to imagine. As to the
vote of eight to seven, there were twenty-six members
present at the Council meeting; several of them did not
vote.

Richmond, Va.: That vote of eight
come up as might be Inferred here.
There were eight who were in favor of reporting the
proposed amendment to the Convention without any
recommendation and eight who wanted to report the

John

P. Branch, of

to seven did not

BANKING SECTION.
matter to the Conventiou with the recommendation that
it be not passed.
The President: That is right.
Mr. Kniseley: I move that the further consideration
of this matter be postponed imtil tlie next meeting of
the Convention.
The President: Yon cannot amend an amendment.
Breclcenridge Jones, of St. Louis, Mo.: In disposing
of an important question of this liind I tliinl< there
should be a clear understanding of the point at issue.
Until two or three years ago, so far as nominations were
concerned, a committee was appointed by the Chair.

There were various State' associations which had no
voice in the Convention, and the Constitution was
amended so that the various associations should name
one-half of the Executive Council, and tlieu in order to
see that there should be a fair consideration of the qualifications of various candidates a

nominating committee

was made— not to be selected by the Chair, but it was provided th.at each State bankers' association should name
one man, or the delegate from each State should name
one man. and that a nominating committee constituted
report to the Convention.
the State of Alabama has as much voice
In that
as the State of New York, and Rhode Island has the
same power that Texas has. It has never been charged
in that

way
way

should

make

its

that that is not democratic or that it is un-American,
and I believe the Constitution as it stands is wise and
that it ought not to be changed, and I therefore move to
lay the last amendment upon the table.
J. B. Finlay, of Pennsylvania: I second that motion.
Bradford Rhodes: That would carry with it the whole

matter and I therefore raise the point of order that the
question cannot be put in that form.
The President: The Chair IJiinks the point of order
.

well takeii.
Mr. Finlay: It has been said that this matter should
not be considered hastily, but if we act upon it now it
is

are acting hastily, because every
member of this Association has had a printed copy of
these proposed amendments in his possession for the last
thirty days and knows what it means. So that point

cannot be said that

not well taken.

Then, again, the several State dele-

members of the Nominating Commithave the power to instruct those men, and they can

gations
tee

who

elect

go forward in their meeting as a nominating committee
and discuss candidates pro and eon. I think it would be
disastrous to the Association generally to adopt the proposed amendments, and I do hope—no, I won't say hope,
I am sure you will vote them down and keep the Constitution as

it is.

John Farson. of Chicago: Mr. President, the world
does move, and no more forcible illustration can be
found than the fact that the P]xecutive Council of this
Association is willing to permit a question that they do
not approve of to be discussed in this Convention. I
believe that every gentleman who has spoken on this
question has either been an ofRcer of the Association
or ex-officer, or a member of the Executive Council or an

ex-member

it.

For a great many years

was thought

that the

mem-

bers of this Association generally could not have much
to say about the affairs of the Association. Whether
that

was

true or not,

the Executive Council

was a

fact that a

few men

dominated the Convention en-

tirely.

Gentlemen, this Association should be exceedingly
democratic. Every delegate on tlie floor should have a
voice here. There have been half a dozen men who have
got together and arranged matters. Gentlemen, before
you vote these amendments down permit me to suggest

them your most careful consideration.
The President: Mr. Rhodes called for a rising vote in
the Executive Council on this matter, and therefore the
fliair calls for a rising vote now on Mr. Rhodes' amendment to Mr. Wooldridge's motion.

that you give

Mr. PMnlay:

What

Mr. Rhodes'

amendment

The

I'resident: Will Mr.

Mr. Rhodes:
tion,

which

is,

moved

Rhodes

state

it ?

amend Mr. Wooldridge's mo-

recommendaby saying that the recommenda-

of course, the committee's

tion—I move to amend it
tion of the Executive Council do not pass.
Mr. Finlay: That is just the same as voting in the
negative on the original moticm— that is, to vote it down.
The amendment does not amount to an amendment, beTo vote the motion
cause it is only a negative motion.
down is to do what Mr. Rhodes wants.
The President: This would simply be calling for the
negative.
Jlr. "NVooldridge: I
I

moved

want

to state

motion clearly.

that the recommendation of the Executive Coun-

Now Mr. Rhodes
be approved by this Convention.
in and moves to amend my motion by substituting
comes
You have got to put the question
his minority views.
first on Mr. Rhodes' amendment, and every delegate who
is against Mr. Rhodes' amendment will vote aye on that
cil

proposition.

Mr. Rhodes: No, no; you have got it all wrong.
Mr. Kniseley: I think Mr. Rhodes' amendment is out
of order, and that there is nothing before the house but
the adoption of the Executive Council's report.
N. B. Van Slyke. of Wisconsin: I do not thinlc, gentlemen, that we can afford to quarrel, and I hope this question will just be put aside until our next session. Let us
adjourn and get our dinners and vote upon it this afternoon.
E. C. Curtis, of

Grand Park,

111.:

Mr. President,

think the easiest way to dispose of this whole matter is
to lay it on the table. Therefore, I make that motion.
The President: That motion is out of order, because
we have got to vote upon Mr. Rhodes' amendment first.
Mr. Curtis: I submit that the Chair is in error.

Mr. Jones: There is a motion before the house to approve the report of the Executive Council.
Mr. Rhodes
has moved to amend that motion by moving that the Convention disapprove of the report. Thei-e is no minority
report from the Executive Council. The question should
be: Shall the report of the Executive Council stand approved V That will dispose of the entire matter.
Mr. Wooldridge: I will accept the suggestion that
there be an aye and nay vote on the action of the Executive Council. Let all who are iu favor of the action of
the Executive Council rise.
Mr. Rhodes: That is just the reverse of what should
be the procedure. My amendment takes precedence in
the voting. You must vote on my amendment first.
The President: The Chair rules that Mr. Rhodes has
not made an amendment to the motion, and therefore
that the question is on the adoption of the report of the
Executive Council that the proposed amendment be not
passed.
Those in favor of that will please rise— those
opposed will now rise.
Carried.

The President: The report

the

Protective

Com-

mittee is next in order.
Mr. Hayes: 1 would suggest that the chairmen of the
various committees be given an opportunity to make such

remarks as they wish, and that their reports be received
without reading and ordered printed in the proceedings.
Tlie I'resident: The Convention may decide as to that
later, but now we will have the report of the Protective
Committee read.
Peter White, of Marquette, Mich.: I move that the
Convention take a recess imtil half past two o'clock.
The President: I hope Mr. White will not press that
motion.

Mr. White: Very well; I withdraw it.
The President: Mr. S. G. Nelson, of New York,

now

will

present the report of the Protective Committee:

Report of Protective Committee.
The Protective Committee begs to submit the followwork committed to its care by the

ing report of the

Executive Council for the year 1898-1899:

BANKERS' CONVENTION.

b'2

hand per Trcnsuier's

lialante ou

report,

August

Appropriated by

i:.\ecutive

Council

$31,649.84

$351.28
22,357.86

Paid account expenses 1S06-1897-1898
Paid account expenses 1898-1899

$22,709.14
$31,649.84
22,709.14

Tolal receipts
Total expenditures

$8,940.70

lu the past year the committee has continued tlie
policy heretofore adopted and sanctioned by the Association with tiic gratifying results which, in past years, have

demonstrated the efficiency of a compact organization
^^ ith ample executive power for the protection of
members of the Association. The committee started out
upon the principle that, if gangs of expert forgers and
burglars were thoroughly broken up and their members

clothed

sent to prison or driven out of the business of defrauding banks, the new organization of such gangs would be
It takes years to bring together an
rendmed ditlicult.

band of burglars or forgers. So many men, bent
upon crime, have to put themselves in the power of each
other thiit e^ en the selection by a skillful forger or burglar of the men to operate with him, and each other, is a

effective

When this protective work
matter of great ditliculty.
was inaugurated it was developed upon the theory which
was embodied in the contract with the Pinkerton National Detective Agency in these words:
" It

being the purpose of this Association to relentlessly pursue bank criminals, to keep persistently upon
to see that they are never forgiven
their track,
they are punished for every
that
forgotten,
or
offence and kept in prison as long as the law
and returned there as promptly as
allow
will
possible after release,

relies

upon your agency to repkeep up an un-

in this imitortant worlc. :ind to

tiring vigilance in behalf of tlie

bankers

who

are our

members."
In previous reports tlie committee lias .shown Ilo^^.
through the agency of detectives wlio could reach the
dangerous forgers and burglars and tlieii- associates,
ample notice had been given to every one known to practice such offences that, so far as the American Bankers'
Association was concerned, nothing Mould be left undone
to rid its members of their attacks. Our policy has been
strengthened by experience, and the committee is able
to make report at this convention, based on many facts

which

has in

possession, that there

its

not outside

of prison to-day a forger or burglar of tlie grade of skill
as great as the skill of those we have placed behind prison
Tliere are a

bars.

some

them

way

its

number

of skillful

men

in prison,

and

will be at large in the course of tlie next

year or two, but

and

nearly three years.
In one instance during

will be the fault of this Association

Protective Committee

if tlicy

malce mucli liead-

band of forgers or burglars
depredations upon our members. l"he class of cases
or in
which we have been called upon to handle during the
in the organization of a

ago, have been minor in their ciiaracter.
Following are a few brief statements of results:
1. So far as linown, there is not an organized band of forgers
operating on banks in this country.
2. Only one old hand at the forgery profession has operated
on a member during the year. The agents of the Association
secured his arrest and he is now serving a ten-year term in the

penitentiary.
3. From Alay 1st, 1895. to August 1st, 1899, members of
the American Bankers' Association have lost by the operations
of burglars, robbers and sneak thieves, $12,738.
4. From May 1st, 1895, to August 1st, 1899, banks not members of the Association have, in the same way, suffered reported
losses of over $;t00,000.

In our report of last year we announced that, after being sentenced to life imprisonment forgers Charles Becker
and .lames Creegan had been granted a new trial. The
continued prosecution of this case during the pre,sent

The new

year just ended a

member

hands
an old and clever professional forger. This is said to
have been due to the misplacement of the membershipsign. From October, 1897, to November, 1898, A. J.
Conover, leader of a band of forgers, had planned attacks on banks in the Unital States, and had operated
during that time on twenty-six banks not members of the
Association. In November, Conover selected for attack
the PMrst National Bank, Itock Rapids, la., and on Nov.
15 Robert King, a member of his band, passed at the
bank a fraudulent draft for $550, purporting to be the
draft of the Partridge Banking House, Seneca Falls, N.
Y., on the First National Bank, New York City.
The
bank is a member of the Association, and the agents of
the Association accomplished the arrest of Robert King
at Walkerton, Out., Dec. 24. 1898, and the capture of A.
.J.
Conover, Jan. 13. 1899, at Fort Huron, Mich., and
secured their extradition. On April 22 Conover wjis sentenced to ten years and King to seven years in the peniof

Anamosa, la.
With the growth of the Association has come an increased volume of reports for the attention of the Protective Committee. More than twenty-six hundred let-

tentiary at

ters

and reports have been carefully considered during

Information selected therefrom, giving photographs of active criminals, has been issued in pamphlet form to each member of the Association every few
months. Members are requested to read these pamphlets
and preserve them.
Referring to the operations of a
swindler described in our December bulletin, a banker
writes: "'Tlie value of your publication is demonstrated,
and had we examined it earlier we might have been of
some service." The committee has continued to issue to
new members the booklet Avith general advice and instructions, entitled " The Confidential Book of the Prothe season.

Committee."
In conjunction with Bulletin No. 4, issued to the members of the Association in May, 1899, there was sent a
special bulletin containing the photograpli of Timothy
J. Hogan, describing his appearance and methods, and
requesting members to be on the watch for him. In 1898
the Association co-operated with the Post Office Department and the police in running down Hogan, who had
rifled the United States letter boxes for checks, altered
them and passed them at the banks on which they were
drawn. He was sentenced in .June. 1898, to a five-j'ear
term in the Columbus Penitentiary, and in May, 1899, he
escaped from the prison. In July the agents of the Association located Hogan in New I'ork, and he was arrested and transferred to Columbus to complete his un-

tective

finished term.

FORGERS AXn SWINDLERS.

past year, like those referred to in our report of a j'ear

year has made

tlie

of the Association, as stated, suffered loss at the

Balance, September 1st. 1899

resent

were obtained from botb
men, and on Dec. 9, 1S98, Becker was sentenced to seven
years" imprisonment and Creegan was sentenced on
March 25, 1891), to two years in the penitentiary, marldng
the completion of a case which had been in hand for
of the third trial confessions

1st,

$1,640.84
30,000.00

IS'tS

the most expensive case of the season.

trial resulting in a disagreement, a third trial

was promptly urged by the committee.

At the approach

From Aug.

1898,

forgers and swindlers of

to
all

Aug.

1899,

eighty-seven

descriptions have defrauded,

members of the Association.
number have been placed under arrest,

or attempted to defraud,
Fifty-five of the

and thirty have been sentenced. Four forgers have been
incarcerated for crimes committed in previous, years, and
in four instances forgers have Ijeen rearrested at thf expiration of their terms of imprisonment and have been
transferred for trial on other charges. A. L. Alford.
transferred from Los Angeles to San Francisco, charged
Avith defrauding the First National Bank of San Francisco Avith a bogus draft for .H;200, was acquitted on a
technicality. W. H. Geer, transferred from Richmond,
Va., to Salt Lake City, Utah, was sentenced to tliree years
defrauding the National Bank of
the Republic, Salt Lake City, with a worthless check for
C. F. Beatty, who was transferred from Pennsyl.f.3G5.
vania to Florida, pleaded guilty to SAvindling the First
National Bank. St. Augustine, Avith worthless drafts, arid
in the penitentiary for

BANKING
released ou paj-ineiit of a fine. George B. Henry,
transferred from York, Neb., to Denver, Col., was ac-

was

quitted on a teclmicaliry.

Pending a

final disposition of

SF'XTION.

which is distributed among the members in
printed form and will follow this report in the proceedings of the convention.
Association,

the case be escaped and made his way to Hampton, 111.
He Avas located by the agents of the Association, who

secured his arrest and transfer to Grand Ilapids, Mich.,
whei'e he is held for trial on the charge of defrauding the
I'eople's Bank of Grand Rapids out of $250 on a bogus
check.

BtJRGLARS

AND

TTIIEVES.

Bank

the streets of San

Francisco.

Tramp

burglars attacked the First National Bank, Ashburnham.
^rass.. and secured $1,278. About the same time they
committed a series of attacks in New England on banks
not members of the Association. An investigation of the
only recorded instance wliere bank burglars used the

during the year shows that it was made
use of merely to arrange a warning signal in the bank
with a connection outside.
Following is the detailed financial statement of Proelectric current

tective

Committee from

1898, to Sep.

close of

fiscal

Protective Committee,
American Bankers' Association.

The President: Gentlemen, you have heard the report of the Protective Committee, and, unless there is
objection, the report will take the usual course.

Mr. Frank

Reports received during the past year show tlaat fiftyeight attacks have been made on banks not members of
the Association by burglars and thieves, who have done
considerable damage with heavy explosives and have gotten away with more than $117,000 in money. From the
same class of depredators, members of the Association
have lost during the same period $3,8G3, the result of
sneak thefts and one burglary. Of this amount $2,500
was secured by a sneak thief who, without being seen,
abstracted the money from the wagon of the Anglo-Calilornia

Respectfully submitted,

year,

Julj'

31,

1899:

RECEIPTS.
Balance on hand, August 1st, 1808
Appropriated by Executive Council

.$1,649.84

30,000.00

Tracy, Chairman of the Committee on
Uniform Laws, will now present the report of his committee.

Committee on Uniform Laws.
To the American Bankers' Association:

Your Committee on Uniform Laws would respectfully
The committee has had many suggestions as to laws it should favor.
The importance of the work it engaged in, in trying to
report their proceedings for the past year.

enact uniform laws for negotiable instruments in the
seemed to be so great that it turned
down all these suggestions, though many of them were
very valuable. Our first duty is to get the same uniformity in our credit circulation as we have in our currency. There should be no State lines in rules regarding commercial paper.
As an illustration, a banker Avas desirous of knowing
how to treat a certain kind of paper in his daily business. He applied to his attorney for advice. The attorney advised him that the decision 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
Courts of twelve States and the Supreme Court of the
United States had decided just the opposite."
With the law of commercial paper in such a jumble
how are we laymen to safely conduct our business
Large sums of money are involved every day in such,
transactions, and were not the bankers of the United
States men of such Large faith in the integrity of theircustomers, A'ery little business could be done.
The law, however, is made not so much for men of
integrity as to catcli rascals, and there occasionally appears among the customei's of a bank such an one, and
for him we must have legislation. We need not repeat
the history of our bill for negotiable instruments. It
was sired in England and has had eigliteeii years of
successful operation. The great business men of England approve it. So much so that they have had it enacted in all their colonies.
The American Bar Association in 1895 presented a
revision of this bill adapted to American ideas. It immediately met the approval of the business men of the
country, and your committee in 1897 was entrusted with
the task of presenting it to the different Legislatures
for tlieir approval.
different States,

$31,649.84

EXPE^WJruliES.
Paid Pinkerton, expense incurred prior to August 1st,
1898
$351.28
Paid Pinkerton, expense incurred August 1st, 1898.
to September 1st, 1899
18,943.86
Salaries and expenses, as per vouchers
3,170.00
I'aid Stewart & Co., 500 aluminum signs
65.00
Paid American Writing Machine Company
10.00
Paid American Bank Note Company, 6,175 booklets.
144.00
Petty cash
25.00
Balance, September 1st, 1899
8,940.70
.

$31,649.84

The committee frequently

and urgent letters asking assistance in a class of cases upon
which they have no authority to expend money. These
petty swindles are usually due to imperfect vigilance on
the part of bank officers, and no protective system could
be expanded so as to take them in without an expense
that would be burdensome, without adequate results.
The casual sliarper, confidence operator and dishonest
borrower belong to a class with which every bank officer
is, or should be, competent to deal.
To pay checks upou
receives telegrams

the identification of ministers, doctors, hotel clerks, or indulgent citizens who, acting upon imperfect information,
rely chieiiy upon the representations of the swindler and

expect the bank officer to take all necessary precautions,
to violate a primary rule of banking. The committee
regrets that its function is sometimes misunderstood,

and that the bank officer sometimes expects the elaborate
and expensive machinery of the American Bankers' Association to he set in motion to catch a fly-by-night
swindler who has found a .good-natured, easy-going
l)anker who cashes checks without an indorser of known
financial responsibility. The rule of the committee also
prohibits the expenditure of money to pursue and prosecute dishonest borrowers.
Bankers should know the
genuineness of the obligations they invest in, and no system can supplement their failure to take due precautions.
In conclusion, the committee begs to tender its cordial
thanks for the valuable assistance rendered by individual
members who have extended their active co-operation.
We append the report of the detective agents of the

Our

first

report

was made

Denver

last year.

When

we commenced

our work Ave found the laAV had been enacted in four States New York, Connecticut, Colorado
and Florida. In 3898 but few of the Legislatures AA'ere
in session.
We Av^orked with five States. Maryland,
Massachusetts and Virginia passed the bill. Ohio and
(Georgia created commissions, which, AA'e think, will rel)ort favorably this coming Avinter.
This year many
Legislatures met. We got a hearing in most of them,

—

and

in the

main were

passed

of ('olumbia,

enacting the

successful.

eight States and the District
more than doubling the number of States
tlie

bill in

laAv.

Review! n,g our Avork.
alphabetically,

The
eration

bill

Ave Avill report

on the States

commencing with Arkansas.

passed the Senate

was postponed

in this State,

indefinitely

tlie

but considHouse. Mr.

(Jeo. W. Rogers, cashier. Bank of Commerce, Little
Rock, has so well expressed the reasons for its defeat
tliat Ave take the liberty of quoting them, as expressing
the opposition we found in all the States.
Mr. Rogers says: "The only three objections I heard

BANKERS' CONVENTION.

who said that
against luy interests personally; this thing
is clear and plain, and anybody that can read can know
what the laAv is, and it Avill prevent litigation and knock
me out of fees, and I am in this thing for what is in it.
I
am against the bill ami will vote against it." "
That was a member of the Senate. In the House the
urged against the bill—one was by a lawyer,
•this thing

was too long— it was thirty-six pages long. They
They didn't seem to consider that
said it was too long.
hill

the law. as ai present laid down, covered more acres of
paper than that did pages. Then there were other lawyers in the House that had to make a living too. But
the principal objection, men said, " I don't understand
the bill; I am not versed in the law, and I
business: 1 have no negotiable paper; I don't
thing about it. If this bill is such a good law.

my banker write to me and
has not done it."

tell

not in
know any-

why

to vote for

don't

it ?

In Alabama Gen. .1. C. Whiting, President of the
People's Bank. Mobile, lent his strong influence to the
bill, but the Legislature refused to consider it.
R. M. "Welch. Secretary of the California Bankers'
Association, did very etticient work in that State. The
bill passed both houses of the Legislature, and there

In North Carolina our friend,

.Jos.

G. Brown. President

of Citizen's National Bank, Raleigh, put his shoulder to

the wheel, and all who know him
move or something must break.
the Bill became a law.

know the wheel must
The wheel moved and

in North Dakota C. B. Little, President of the First
National Bank of Bismarck, gave the Bill such powerful
support that it became a law in a very short time after
the Legislature met. Knowing, as we do, the sentiments
of the NorthAA estern States towards bankers in legislation, we think the achievement of Mr. Little wonderful.
In Oregon the Clearing House of the city of Portland

assumed charge
all the banks of

and the united influence of

of the Bill,

that progressive city soon bore fruit in

the passage of the Bill by the Legislature. Could
united effort be made by the Clearing Houses of the
ferent cities of the United States for the passage of
law, this committee Avould soon be able to report to

work as

its

this
dif-

this

you

finished.

In I'ennsylvania the Senatorial election occupied so
friends of the Bill could not

much of the time that the
make any headway. They

approve it.
it was found that bill had not been approved, it having
failed, with many others, to receive the Governor's approval, because of some little friction which arose beWe are
tween the Legislature and the Governor.
however, that the Governor has manipleased to learn,
fested no hostility to the bill, and undoubtedly it will
meet his approval should it reach him at the next

however, that a good
foundation is laid. Educational work has been done,
and at the next session of the Legislature they look to
have this great State serving under the workings of the
best commercial law ever presented to the law making
power.
In Rhode Island the law was passed, though with the
same amendment made in Massachusetts, allowing grace
on sight drafts. The Bill was promoted in this State by
Hon. Amasa Eaton, of Providence, who is an attorney
largely interested in good laws. I am sorry to say the
bankers cannot claim much credit for their work in this

session of the Legislature.

State.

In Delaware and Idaho we could get no hearing, not
being able to interest any of the bankers in these States.

In South Dakota a very pretty battle occurred. Mr.
A. ^Nlackay, of the Banking House of Mackay Bros.,
of Madison, was the manager for the Bill. It was believed the Bill would pass. It had got through the Senate
and was pending in the House on third reading on the
last day of the session. The length of the Bill prevented
it from being considered, and it was postponed until the
next session.
In Tennessee we think the most systematic work was
done. J. W. Faxon, Secretary of the Bankers' Association, .ind Mr. F. O. Watts. Cashier, First National Bank,
Nashville, proved themselves generals. Mr. Faxon looked
after the preliminary work among the banks, and Mr.
^Vatts gave his attention to the Legislature.
At Mr.
Faxon's request your committee sent a personal letter,
with a copy of the Bill, to the bank at the home of each
Legislator, with a request that such banker would see
his member and ask his personal support to the Bill.
Consequently, the Bill became a law in Tennessee. Your
committee refrains from doing this kind of work in any
State, believing it is the province of the State Association. The committee will be pleased, however, to repeat
this work in any State in the future, on the request of the
Bankers' Association of that State.
In Texas and Vermont we could get no hearing.
Utah passed the Bill promptly, through the influence
of S. S. Hills. President of the Deseret National Bank, of
Salt Lake City, and .1. K. Dooley, Cashier, of Wells,

seemed

why the Governor should not
the Legislature adjourned, however,

be no reason

When

In Illinois we had a battle royal. Governor Tanner's
strong influence was given to the bill, and in the Senate
Hon. O. S. Berry pushed it through without opposition.
In the House, however, every inch had to be fought.
We carried it to third reading, only to meet its Waterloo,

through the infltience of a few lawyers, who were afraid
they would lose some fees should the bill become a law.
Mr. Geo. E. Lyon. Vice-President Security Savings
Bank. Waukegan, was Chairman of the Banking Comjnittee, and under his guidance the battle was fought.

We must give him credit for his skill in getting so many
votes for it under all the circumstances. It was beaten
by only a feA\ votes. At the next session there should
be no ditficulty in passing it.
In Indiana we met a similar result, and the opposition was for the same reasons as before stated. Mr.
S. M. Morrison, of Indianapolis. Secretary of the Indiana Bankers' Association, looked after it. We dis
tributed, through him, five hundred copies of the bill
in that State.

In Kansas and Maine we failed to get a hearing.
In Michigan we did not succeed. The bill passed
the House, but failed in the Senate. Our worthy President had the bill in charge. The committee has not
heard from him since the action of the Legislature.
Your committee is inclined to think from his well-known
habit of snatching victory from defeat that he is still
expecting to report the success of the bill.
In Minnesota the bankers did not desire to agitate
the question this year for some local reason, but give
its passage in the future.
In Missouri Geo. B. Harrison. Secretary of the Bankers' Association, made an effort to get it passed by the
Legislature, but there was so much indifference manifested by the bankers of the State that he could do

good promise of

little,

failed.

In Montana

could not get a hearing.

In Nebraska, Mr. Henry

W. Yates undertook

to get

the Bill before the Legislature, but after feeling the pulse
of that body decided it was not a favorable time for ac::

ion.

report,

Fargo

Co.

Bank

same

city.

These gentlemen gave

the Bill their strong support and the Bill soon became a
law.
W. A. "Vincent. Cashier of the Old National Bank of
Spokane, Wash., brought the Bill to the attention of the
Legislature of that State, and through his watchfulness
and care it became a law.
In Wisconsin, Mr. F. C. Bigelow, President of the
First National Bank of Milwaukee, set the Bill in motion, and our old friend, N. B. Van Slyke, President of the
First National Bank of Madison, kept his eagle eye upon

The main power in
it to see that no rights were lost.
pushing it through the Legislature Avas Speaker Geo. H.
Ray, whose strong influence rescued it from defeat, and
that it is now a law is Decause of his powerful support.

BANKING SECTION.
In West Virgiuia J. F. Sauds, President of the Bankers' Association, did noble work in behalf of the Bill.
He did not succeed in passing our Bill, but he did succeed in abolishing days of grace, which is a step forward.
AVe have thus passed in review the work of tlio past
year. We have given in detail the names of the gentlemen in each State who undertook the work. We have

doue this because we think these men should be honored
by the American Bankers' Association as heroes as much
as the people honored oflicers who led in the Spanish
Men who
war.
Peace has its heroes as well as war.
achieve great tilings in civil life are probably not honored
in song and verse, but the qualities needed are as great
as those needed in war. and we believe the Association
could do no better thing than to pass a resolution of
thanks to each of tliese gentlemen and send it to them
through the Secretary's ofl^.ce.
Your committee has doue a laborious work. Has written over 1,000 personal letters, and has sent out 3,500
copies of the law.

The

results achieved are, in our opin-

The following States are now working under the law:
York,

Mai-yland,

Massachusetts,
Colorado,

Florida,

North Carolina,

Rhode

Wisconsin,
North Dakota,

Tennessee,

Utah,

Connecticut.

A'irginia.

Island,

Washington,
Oregon
District of Columbia.
One-third of the States have been conquered in three
years. The remainder can easily be conquered in five
years more, as the momentum given by getting each State
quickens the movement in every other State. Indeed,
the project, which was pronounced chimerical by many,
three years ago, and entirely too Utopian for success,
now begins to assume the condition of actuality, and in
a few years more the bankers and business men of the
country avIU probably see commercial paper passing State
lines as freely and with as little friction as the national
currency now does. The whole civilized world will then
probably enjoy one universal law, so that whether we
deal in commercial paper in New York, in San Francisco,
in London, in Hong Kong, in Manila, in Honolulu, or in
Havana, we will have the same rule governing all.
This report is respectfully submitted, and your committee asks for further time to canvass the remaining

and

fore,

that the couvention do not assemble until eleven

o'clock to-morrow.

James G. Cannon: I move that when the convention
adjourns to-day it be to meet at eleven o'clock to-morrow
morning, instead of ten, as announced on the program.
The motion was carried.
The Convention then adjourned to Wednesday, September

Gth, at 11 A.

SECOND DA

Y'S

PROCEEDINGS.

Wednesday, September

i8gg.

will be in order. Our
be opened with prayer by the Rt Rev.
Monsignor T. P. Thorpe, of the Church of the Immacu-

The President: The convention

exercises

-ndll

Rt. Rev. Mon. Thorpe: Mr. President, ladies and
gentlemen. Before attempting the solemn and pleasing
duty assigned me I desire to say that I feel highly honored, as I am deeply editied, to stand before this assembly
representing the brain and business enterprise of the

country, and, in your name, to ask

God

reso-

lution.

The motion was adopted.

a number of men from different parts of our
common countrj^ filled with zeal, not only for the material development of the land and physical progress and
a desire for God's glory, as is manifested by your joining
with a Christian minister in asking God's blessing on
jour work. And it shows your broadness of views that
you have disregarded the faith of the minister that invokes that blessing upon you; to-day it is my privilege,
yesterday it was another's, and to-morrow it will be still
another's, and, though we differ from one another in many
things, yet we can stand on that grand platform that our
Lord laid down for us in his prayer.
find here

[Prayer was then said.]
The President: We will take up the program

daw where we

left off

and dispose of that

DELEGATES FROM STATE ASSOCIATIONSADJOURNMENT.

The President: In the Council meeting last night, on
the motion of Mr. Rhodes, the President was requested
to give notice to-day that the delegates from the various
State associations sliould meet at 3 o'clock this afternoon,
in this building, and the Committee on Nominations at
9 o'clock, on Wednesday morning, at the same place.
That was an excellent suggestion, and I give the notice

members

meet as requested.

of the committees

The

that from the

Report of Committee on Education.
Your committee, by direction of the Council, has had
turned over to it the petition of a large number of bank
clerks in Louisville and Buffalo, requesting the Association to form an Institute of Bankers, similar to the one in
The request,
very successful operation in England.
follows:
which is voluminously signed, is as
We, the undersigned Bank Clerks, desiring a higher development of banking as a profession in this country and enlarged,
facilities for its thorough study, respectfully show the American
Bankers' Association
That there is not in this country at the present time an Institute of Bankers, nor any sufficient means for securing an
education in the profession of banking, available to all those desiring such an education.
That banking is not practiced as a profession in this country as it should be.
That much of the ill-will shown toward banks arises from
ignorance of their economic value and true function.
That with the facilities for special training in banking and
finance, and the laws relating thereto, the standard of the profession will be greatly raised, banks conducted upon safer and'
more scientific principles, and the people in general better informed of and In harmony with an institution which is so essential to the business of the country.
This will lead to more
economic and scientific banking and currency laws, and we may
hope some time to lead other countries in our financial system,
instead of follow.
Believing that the future of banking in this country demands
better training than it is now possible for bankers to acquire;
and with the desire on our part to use all available means
which our circumstances will permit for qualifying ourselves for
our profession
we, therefore, respectfully petition that the
American Bankers' Association will father a movement toward
the founding of an Institute of American Bankers, opening to.
;

that the

of yesterfirst.

Mr. Hayes: Will that present committee be continued?
If not, I move that the present committee be continued.
Mr. Lowry: I second that motion.
The motion was adopted.
William C. Cornwell, of Buffalo, N. Y.: In the interests
of all here I move that the remaining reports on to-day's
program be put over until to-morrow's session.
The motion was carried.

your de-

It is

I of-

fer the following resolution:
Resolved, That the thanks of the American Bankers' Association be extended to the gentlemen who have given such eflfective assistance to the passage of the Negotiable Instrument
Law in their several States during the past two years.
Resolved, That the Secretary be requested to communicate
this vote to each of the gentlemen named in the report of the
Committee on Uniform Law for two years past.

Mr. Lowry: I second that resolution.
The President: I am very glad indeed to put that

to bless

pleasingly significant at this time when
anarchy is found in the land and the rights and liberties
of individuals assailed, even God himself blasphemed, to
liberations.

be submitted,
Committee on Bureau of Education.

Fred Heinz, of Davenport, Iowa: Mr. President,

now

first report, therefore, to

States.

MEETINGS

There will be a meeting of the representatives of
clearing houses to-morrow morning at ten o'clock, in the
room at the left of the platform. I would suggest, there-

late Conception, in this city.

ion, great.

New

named

will

BANKERS' CONVENTION.

all in this country who follow our profession, the
for study and training similar to those afforded in
Kugland and Scotland, and elsewhere, and which shall be adequate to our needs, and an honor to our country and the American Bankers' Association,

us.

and to

facilities

In accordance witli this request the committee have
the operation of tlie Institute of Banlcers in

exammed

practice of banking to be acquired otherwise only by experience, or individual investigation.

As a means of education and training the proposed
must be as valuable to the banking houses as to
the employees who enjoy its benefits. The per capita

Institute

would be

value immeasurable.
systematic local organization in each American city,

cost

London, and have on file the various documents and is
sues of same, being in correspondeute Avith Mr. W. Talbot Agar. Secretary of the Institute.
The committee beg to report the following as to the

operations of the London Institute:
Since its organization in Loudon in 1879 the Institute
of Bankers has spread all over Great Britain. It con-

this country.

sists of Fellows, Associates and Ordinary Members forming a body of more than 3.000 members. Tlie number
of candidates for membership in 1899 was 808. Its Fel-

slight, the collective

Ireland, India and the
Examinations in Banlcing
Colonies and in America.
were held under its auspices in 70 provmcial towns this

lows include

many

in Scotland,

year.

person connected with the various branches of
bauldng is eligible to member.ship, the primary object of
the Institute being to facilitate the consideration and dis-

Any

matters of interest to the profession and where
advisable to take measures to further the discussions arrived at. Its second object is to provide opportunity for
the acquisition of a knowledge of the theory of banking.
At the ordinary meetings of the Institute, which are
held monthly from November to April, papers by members and others dealing Avith questions akin to banking
are read, and these, together with the discussion thereon,
are printed in the Institute's .Journal, which also contains, under the head of " Questions on Points of Practical Interest," a variety of carefully considered infor<-ussion of

mation on subjects of daily interest to the profession.
Lectures on subjects connected with Banking, and
usually bearing on the examinations are held during the
winter in London and the provincial towns, and these are
printed in the .Tournal. which is distributed free to members. The examinations for the certificate of the Institute, for Avhich many of the leading banks of England

now

offer prizes, are held early in

May

London and

the provinces.

The annual

may

membership and infiuence

attain large

within a year. Its aim must appeal to those Avho believe
in a more intelligent application of banking practices in

The committee

desire instructions

from the Associa-

whether it would be the wish of the Association
have the matter taken up actively with reference to
forming such an Institute of Bankers in the United States
as exists in England, or to have preliminary steps taken
under direction of the Executive Council.
Appended to the report herewith will be found a
printed outline of the objects and work of the Institute
of Bankers, London, with names of executive officers,
trustees and council.
tion as to

OTHER WORK OF THE COMMITTEE.

The active work of the committee during the year has
been devoted mainly to the distribution of the pamphlet
•'What Is a BankV" through the personal co-operation
of hundreds of bankers throughout the United States.
Upon application from these bankers, the pamphlets
have been sent in lots of one hundred each, with request
for report from the various bankers as to how distributed
and how received. The bankers have taken a personal interest in the matter, and we believe that each copy has
been carefully placed where, in the judgment of the bankers distributing them, they would do the most good.
This is evidenced by the receipt of hundreds of the return postal cards prepared by the committee. In most
cases the bankers have gone into particulars of the distribution, and in this way 200,000 pamphlets have been
placed this year in the hands of farmers, laborers, mechanics and small trades people throughout the West
and South. Nearly 2,000 bankers have aided in this distribution this year.

Out of the hundreds of reports received from these
bankers since the second year's distribution began, the

subscription

the

Institute

two

guineas for Fellows, one guinea for Associates, and ten
shillings sixpence for ordinary members, payable in advance.
The examinations which make a prominent feature of
the Institute, are intended principally for jtmior meml)ers. Tlie subjects are Practical Banking, Political Economy, Commercial Law. Arithmetic and Algebra and
Bookkeeping. They are divided into two parts, preliminary and final, and candidates who have passed both
examinations receive the certificate of tlie Institute.
French and German may be taken as additional subjects.
Prize.'< of .SlOO and .$.50 are given annually for the best
essay oa some banking or financial subject. The comis ojien to members of all grades.
In London the Institute maintains a library and reading room, which is open daily for tlie use of members.

petition

The

the Institute

library consists of 3.000 books on banking

and

kin-

-dred topics.
It is quite natural that

this one is should

show

an organization as complete as
infiuence in promoting the in-

its

The Bills of Exchange Act,
and the Factors' Act, 1888, whch were drafted on
its instructions and passed tlirough its instrumentality,
are instances of its power in legislation. The Institute
terests of the profession.

1882,

has also been able on several occasions to facilitate arrangements between bankers and the Internal Revenue
and Post Office authorities.
The formation of an Institute of American Bankers,
on these lines, should be a comparatively easy matter.
That the working forces of our banks are willing and desirous of entering such an association is shown by the
petitions to this as.sociation.
The proposed Institute
Avould bring to them much knowledge of the theory and

following, selected at random, will give

care in distribution and the

Memphis, Mo.

—

will

efl:ect

some idea

them where

distribute

of the

of the work:
in

judg-

do the most good. 1 shall mail a part of them
at least to children in our county, thereby insuring their presence in the homes of our farmers, and I think when once read
and talked about by the boy in the family that the book will be
read by the father and with a better result than if sent direct
Koodhousb:, Ii.i>. Think them a line education. Banto him
DENBUKG, Ky. It is a good thing. Greencastle, Ta. I believe
it will have a good effect and e.specially to educate persons who
Ft. Recovery, O.
are ignorant on a bank's mission.
They all
seem interested in them, and we think the little book, " What is
Kbntland, Ind. Our patrons are largea Bank':' " is all O. K.
ly farmers, and we will endeavor to place the little pamphlet
with as many as we can. We have no manufacturing interests
here but quite a number of laborers and mechanics, and we are
sure we can place them with those that will be benefited, for it
is a benefit to that class of people, and a little education on this
line will do a great work, for the little pamphlet is certainly a
good educator. Great Bknd, Kan. We are handing same to
Clio, Mich.
farmers " pops," and think they will do good.
About the time of receipt of pamphlet a Farmers' Institute was
There was a large attendance of farmers, and
in session here.
we took occasion to place a copy in the hands of as many farmers as we could, and where they would do the most good they
were received with evident interest and many assurances that
Hillsboro, Ind. We find them quite a
they would be read.
The move is a good
help to our business.
St. James, Minn.
Carrollton, Ky. Believe the
one and should be continued.
pamphlet will do much good as an educator. Van Wert, Ia.
We consider the book a grand plan to make banking plain to
farmers and those not used to banks. The books were read with
1 think they are just what the
great interest. Candor, N. Y.
Keyport, N. J.- They seem much pleased
people should see.
I think they are a good
with our catechism. Lake City, Ia.
thing.
Mexico, Mo.. I believe they will be very instructive.
ASHTON, III. We consider the idea is very well taken and
This kind of literature has
should do much good. Cadiz, Ky.
been ranch needed in this part of the State. Harmony Grove,
Ga.
Think it will do much good toward a better understanding

ment they

will

—

—
—

—

;

—
—

—

BANKING SECTION.

—

Ebbnsburg, Pa. A genthem among a certain class of people can't
help but make an excellent impression and remove many prejuBreda, Ia.— Several who have
dices against banks generally.
read them pronounce the pamphlet as being instructive and givI heartily coning points not before thought of. Geneva, Inu.
between Populist farmers and banks.
eral distribution of

—

Such circulars cannot fail in
Bisitt, 1a.
cur in your efforts.
doing good in any community. New Casti.e, Ky. Your pamSuperior, Wis.
phlet, " What is a Bank?" is just the thing.
They are a very good idea. Midway, Ky. They contain much
Black Rock, Ark. Has been
plain and valuable information.
complimented from all sides as being simple and instructive. Gordon, Nkb. Distributed in the vicinity of this town among
Effect
farmers and working men who are mostly " Pops."
good.
They say it is an eye opener. Deert Station, Pa.
We have distributed copies "What is a Bank?" among a good
they seem to
class of men, being railroad men and farmers
The little " Pamphlet "
think it a good thing. Canton, Miss.
Milton, Ore.
is unique, and we think many vrill reflect over it.
Centreville, Md. Pamphlets, " What
It's a • Good thing."
is a Bank?'' received and are distributing them among our
best farmers, meclianics, laborers, merchants and their clerks.
We also when lianding a pamplilet urge recipient to read it
We believe they are
carefully and then hand to some friend.
Florence, Wis. We have
being read and not thrown aside.
aimed to place them in the hands of people who are in the dark
on the subject of "What is a Bank?" and think it should be
pi-oductive of some good results, not necessarily in the direct
increase of our business to anj' considerable extent, but a better
undersfar.ding of the iiuestion, which is what will count in the
" long run."
Harrishurg, Pa. The booklet well suited for the
purpose intended.
We shall place the remainder to the best
advantage. Attica, Ind.
I believe your book is a good educaMarshall, Mo. I consider it a good thing. Juneau,
tor.
Alaska. "What is a Bank?" are being distributed among the
miners and business men of Alaska. These pamphlets are written in such plain language that they cannot help to be understood by everybody and will certainly have the desired effect.

—

;

—

The eagerness with which bankers

in all parts of the
country, especially in the interior towns, and in the West
and South, have taken hold of the matter (large numbers having applied for additional copies which the committee has been unable to furnish), leads us to think that
the work of the Association thus far has yielded very
large proportional results.
Respectfully,
^

llOBT.

CoKNWELL, Chairman.
LOWRY,

,T.

Harvey

have been presented by its Chairman, Mr. Anderson, of St. Paul, but he was called away from Cleveland
within an hour or two after his arrival here by reason

Hollister,

Committee on Education.
ACTION or CONVENTION ON REPORT.
Mr. Whiting, of Mobile, Ala.: Mr. President, in connection with that report I am requested to submit the
following resolutions, and move their adotion:
Resolved, That the committee be continued in oflice and the
work continued as heretofore.
RcaolLcd, That the Committee on Education present to the

Executive Council a plan for preliminary steps in the formation
an Institute of Bankers in connection with this Association.

The resolutions were adopted.
The President: We will next hear from the Committee on Credits, by the Chairman, Mr. Robert McCurdy, of Youngstown, Ohio.

Report of Committee on Credits.
To Executive Council, American Bankets' Association:
Gentlemen.— Your temporary Committee on Credits,
appointed at the meeting in March last, respectfully re-

of the serious illness of his sou.

The report

will, there-

be presented by Mr. Caldwell Hardy, of Notfolk,
Ya., a member of the committee.
fore,

—

was

Report of Committee on Fidelity Insurance.

At the Convention of

this Association held in

Denver,
Executive Council recommended " That a committee of this Association be appointed to inquire into the rates of surety bonds and
to recommend a standard form of policy, and to consider
an3^ plan or plans that may be submitted." (Page 51 of
the Minutes.) Pursuant to this resolution the President
named as such committee: A. C. Acderson, Cashier St.
Paul National Bank, St. Paul, :Minn.; Caldwell Hardy,
President Norfolk National Bank, Norfolk, Va.; W. P.
Manley, President Security National Bank, Sioux City,
la.: E. F. Swinney, Cashier First National Bank, Kansas City. Mo., and John L. Hamilton, Jr., Cashier Hamilton and Cunningliam, Bankers, Hoopeston, 111.
Your Committee has given the matter careful and
diligent attention, and begs to report.
It will be seen from the form of resolution that our
work was divided into three heads: First, Rates; second.
Standard Policy, and, third. General Plans.
in

Col.,

August,

the

1898,

RATES.
Inquiries

with) to the
roll.

were sent

members

replies

(see

Exhibits

and

filed here-

shown by the 1897 membership
were received from a considerable numas

ber of members who are private bankei's and brokers in
the large cities and do not bond their employees.
We find from 2,28G replies that 1,282 banks do not
use corporate fidelity suretyship, while 1,004 of our members carry such insurance, and they are at present covering between 9,000 and 10,000 bank employees, whose
bonds aggregate $54,814,310, that there was paid for
such insurance during the j'ear 1898 $213,552.43, while
the cost of such protection for the six years 1893 to 1898,
inclusive,

has been approximately $1,281,314.58.

The

total losses reported for these six years, including $40,-

now being contested b.v the companies with our
members, amount to $171,084.96, or an average of less
than $30,000 per annum return on an annual outlay of
000

over $200,000. It will be seen that these figures indicate
a loss of 52 cents per annum on each $1,000 of insurance
in force, whicli is a sm.iUer percentage of loss on bank
risks than we had been led to expect, but no other statistics have been placed before us discrediting these figures.

In this connection the following
prove of interest:

An
The

official

of the Canadian

fidelity of

Bank

will,

feel sure,

Commerce

states:

the officers of this bank is guaranteed by a
in existence since the 1st

fund within the bank, which has been
of October, 1878.

The

insured therein for amounts varying with
and responsibilities, and they contiibute to the fund
annua! payments of one-half per cent, each on the amount
officers are

their rank

port as follows:

First.— That a Committee on Credits be made one of
the standing committees of the Association.
Second.— That the Association establish in the city of
New York an agency to be known as the " Bureau of
Bank Credits," whose duty shall be to collect information in regard to standing of all parties who either as
makers or endorsers sell their paper on the market, and
such other duties as the Association may frt)m time to
time prescribe.
Respectfully submitted,
R. McCURDY,
A. P. WOOLDRIDGE,
.T.

Hunter,

H. L. BURRAGE,
J.

B. FiNI-EY.

Committee.

The President: The next report in order is the report
of the Committee on Fidelity Insurance. This report

five

of their bonds.
When the five years are paid no further contributions are required, although there is a provision for their
resumption in the event of the fund becoming depleted, which
it has never yet been necessary to enforce.
The ordinary contributions, with a moderate contribution from the bank at the
outset and the accumulations of interest, have been so much
more than we have required to meet losses, and maintain a
proper reserve fund, that we have been able to take .?100.000
from the Guarantee Fund as a foundation for the Officers' Pension Ii'und, which is now in existence.
The guarantee bonds outstanding on 1st June, 1870, amounted to .'«847,000. On 1st June, 1897, they amounted to $1,732,000.
Judging from our experience, a payment of a single premium
of
per cent, on all the bonds of the staff would cover our
losses for a long series of years, but we might of course at any
time meet with c series of defalcations which would sweep away
a small fund. The present contributions are not felt to be unduly burdensome as compared with the rates paid to Guarantee
Companies they are. of course, extremely light, and the surplus

;

goes back to the officers through the Pension Fund.

BANKERS' CONVENTION.

The Bank of Montreal

writes:

insure the fidelity of the bank's staff to a limited extent

each with a Guarantee Company, and in addition to that we
have a Guarantee Fund of our own to which the banlt contributes a proportionate sum annually. Although our staff numbers
upward of Ave hundred, we have only had occasion to malce a
claim on the Guarantee Company or on our own fund once in
twenty-five years.

are reliably informed that a prominent express
company has had for years the fidelity of its employees
mutually insured, at the cost of the insured, some years
as low as 44 cents, and on an average in the last six
years at -less than 75 cents per $1,000.
The Bankers' Guarantee and Trust Fund of Great
Britain, whose thirty-fourth annual report has been
kindly furnished us, shows that it has 15,854 policies in
force; that it has an- accumulated fund of £171. 8G5 (see
Exhibit C). The secretary informs us that a payment
equal to three annual premiums at ?4 per $1,000 (our
approximate annual rate) has proved sufficient to insure
the employees permanently without ftn-ther contribution.
The Colonial and Foreign Banks' Guarantee Fund,
whose head office is in London, and whose business conducted on similar lines extends to British possessions,
has had an experience of 33 years, and has been equally
successful. (See Exhibit D.)
We were specially directed to investigate the question of rates, which we find upon inquiry vary from $2 to
$5 per $1,000, a few scattered bonds being wautten above
the higher rate and a considerable number at less than
the lower figure.
Among the rates per $1,000 we find the following:
$5, $4.50, $4.30, $4.25, $4; $4, 2 per cent.; $4, 10 per cent;
$4, 20 per cent.; $3.80, $3.75, $3.50, $3.33, $3.30. $3.20, $3,
$2.70, $2.50, $2, 81.80, $1.66

2-3—i.

e.,

$5 for 3 years— $1.50,

$1.40.

than any fidelit.v bond yet issued. Your committee has
spent weeks of labor with its attorney and the representatives of fidelity companies in studying and discussing the varying provisions and technicalities of fidelity bonds.
A careful consideration of the subject has
brought us irresistibly to the conclusion that it is absolutely necessary for the reasonable protection of the insured to radically amend and modify many of the pro-

visions of such bonds.

have found no form of bond

to-day furnished to banks which
to our

members, nor

could

to the institutions

recommend

with which

are severally connected, for adoption.

Our form of bond (see Exhibit F). which we submit
herewith, has been prepared with the view to eliminating the difficulties referred to, and we feel that if our
members will devote themselves to a careful consideration and comparison of it with those generally in use, or
them to their attorneys for such consideraand comparison, they will readily recognize the advantages offered by our form.
Tlie adoption of our bond will be a step in the line of
will refer
tion

uniformity.

Its

terms are intended to be so distinct as

to prevent litigation, but should the courts be required

any of its profuture case would thus be
visions a precedent for any
for anjr reason to judicially construe

established.
It is

impracticable in this report for us to discuss in

form of bond and to compare
bonds in use, but we
wish especially to bring to your attention the fact that
our form is, if renewed annually, a continuous guarantee
of an employee, covering the entire period of his service,
and also that the bond itself contains all the provisions

detail the conditions of our

them with

the conditions of other

affecting the contract, there being no multiplicity of outside papers, such as application blanks, etc., signed by

made a part of the contract, as
the case under most of the forms in present use.
The form as drawn is intended to supply the bank
which prefers a schedule bond with a single bond covering its entire force, or, if any prefer, a separate bond
may be issued on each man. Either plan has some ad-

have endeavored to ascertain if there be any theory of rates in this wide diversity, but there seems to be
none. One of the large Eastern banks, whose entire
force is bonded to the amount of $200,000, is paying $5
per $1,000 for its insurance, while in an Iowa bank a
single clerk is bonded for $2,000 at $3 per $1,000. Perhaps the most marked variation in rates that has come to
our attention is that between two banks side by side in
a small Michigan city, one with $15,000 insurance paying $5 per thousand, while its neighbor with $10,000 pays
$1.40 a $1,000, and both banks are insured by the same
company.
We find banks in the following cities paying as high
as $5 per $1,000 for their insurance, most of it in very

the employer, that are

large blocks: Cincinnati, Providence, Dallas, Knoxville,

more, Md.

Boston, Springfield, Mass.; New York, Springfield, 111.;
Nashville, Washington, Brooklyn, BuS'alo, Philadelphia,
Harrisburg, Los Angeles, Fresno, Norfolk, Toledo, Cleveland, Chicago, Loui.sville and a number of smaller cities
that could not be named without indicating the bank
referred to.
We find other banks getting a rate per $1,000 of $2.50,
or less, in Boston, Los Angeles, Reading, Waterbury,
Philadelphia, New Orleans, New York, Des Moines, and
many small towns in Vermont, Pennsylvania, Virginia,
South Carolina, Florida, Massacliusetts, Missouri, North
Carolina, Michigan and other States.

UNIFORM nOND.

vantages and some drawbacks.
The following companies have expressed a willingness to write this form of bond for our members. Their
several comments on the foTm may prove as interesting to our members as they were gratifying to your
committee:
The JFAna Indemnity Company, of Hartford, Conn.
The American Bondmg and Trust Company. Balti-

The City

Trust, Safe Deposit

and Surety Company,

of Philadelphia.

and Deposit Company, Baltimore, Md.
National Surety Company, New York.
Pacific Surety Company, San Francisco, Cal.
The United States B^idelity and Guaranty Company,
Baltimore, Md.
GENERAL PLANS.
Fidelity Trust

not only recommend the uniform bond, but also
that banks do not allow one man to be insured in one
company, one in another, and so on. We deem this unwise, because should default come it is liable to be by
collusion, and no company will consent to pay what it

ler,

believes a competitor is liable for, and it may be exceedingly ditficult for the insured to prove which of the
companies should pay the loss. Where a division of in-

submitted, with the belief that it affords better protection and more nearly meets the requirements of banks

surance among two or more companies is desired we
would rocommend that each company carry a pro rata
on each man.
Our members are at present paying widely varying
rates for numerous forms of bonds, witli as widely
varying conditions, and it has been our thought, besides
securing a uniform bond, to recommend, if possible, some
plan for uniting the business of our members upon a
uniform and equitable basis. This naturally led us to
the consideration of a mutual plan upon which some
company would receive our business, keep it separate

Your committee retained the well-known firm of ButNotman, Joline and Mynderse, of New York, to carefully investigate the various forms of bonds that were
being offeied to our members, and to look up the decisions of the courts on bonds that had been litigated,
with a view to ascertaining what clauses had been
passed upon by the courts. After making these investigations they were instructed to draw a bond, plain in
Its language, clear in its terms, and at the same time
just to the insurer and insured. The form, as finally
drawn by Mr. Mynderse, of the above-mentioned firm,
is

BANKING SECTION.
from

their other risks

profit that

might

and share with those insuring any

result.

Several of the companies indicated a willingness to
this, and a contract could have been secured defining
satisfactorily the terms on which the business should
be handled. In order, however, to give any promise of
success to such a plan it would have been necessary
for us to have controlled absolutely a large volume of
insurance, which we had no authority to promise for our

members.
Some companies indicated a willingness
a

considerable concession in rates

would open a bureau of

its

may file with the Secretary a statement that in consideration
of the privilege of writing our copyrighted form, the said company will not furnish this form to any bank not a member of the
Association, be permitted to write said copyrighted form of
bond during the pleasure of the Executive Council.
" We recommend the adoption of this resolution by the Convention."
Therefore,

Resolved, That these resolutions are ap-

proved by this Convention that the committee be continued and
authorized to fill any vacancies among its members, and that
the thanks of the Association be tendered to the members for
;

their valuable work.

make us

our association

own through which

the busi-

ness of our members could be received, without expense
to either the Association or its members, and placed
with the companies without the intervention of agents.
This could only be done successfully after the plan had
received the assured support of at least a large portion
members carrying such insurance. Such a plan
of busmess would evidently effect a considerable saving
of our

in cost.

Tliroughout our investigation we have been confronted with the fact that, coveting a period of years,
55 to 5G per cent, of all fidelity and surety premiums of
American companies have been consumed in expenses,
while figures obtained from these companies' reports
of their fidelity and surety business to Insurance Departments show that of disbursements for expenses and
losses about two dollars goes for the former to one dollar
for the latter. And the returns of our members show
that they have not had paid back to them in losses quite
one doUar to six paid to the companies in premiums.
The contrast between these figures aud those of the
English Mutual companies referred to in this report is
striking, the latter more than reversing the American
ratio and showing only about 20 per cent, of receipts
consumed in expenses. The secretary of the English
companies concludes his letter to us (Exhibit E) by stating that " this Fund is a very liberal settler of claims,"
notwithstanding which fact the losses appear to be
small, and at the same time the expense account would
indicate that little or no money is spent in litigation, and
that claims are settled without contests.
Your committee wish to aclcnowledge the courtesy
and assistance we have received from the members of
our Association in replying to our inquiries, and especially to acknowledge our obligations to Mr. W. Talbot
Agar, Secretary of the Britisli Institute of Bankers, and
to Mr. .Tno. A. Allan, Secretary of both the Bankers'
Guarantee and Trust Fund and the Colonial and Foreign Banks' Guarantee Fund, of London, England.

And, personally, I desire to say, that no chairman of
any committee ever had four associates more willing,
more able, more helpful, than the four gentlemen who
have served with me on this committee; and for myself

and for all the members of the Association whom they
have served, I wish to place on record my appreciation
of their valuable assistance.

Your committee feel that the work, of which they
have made this beginning, can be advantageously pursued, and would recommend that this report be referred
to the Executive Council and that they be authorized to
appoint another committee to take up the work from
this point, and that our Association continue to gather
from its members fidelity statistics for tabulation and
report.
A. C. Anderson, Chairman.
ACTION OF CONVENTION OX REPORT.
P. W. Huntington, of Columbus, Ohio: Mr. President.
In connection with this report I beg leave to offer the fol-

lowing preamble and resolution:
Whereas, The Executive Council have adopted the following
resolutions approving the report and
ance Committee, as follows
" Resolved, That the Executive

work of the Fidelity Insur-

Council recommend the
adoption of the form of bond drawn for the Association by
Messrs. Butler, Norman, Joline & Mynderse, and copyrighted by
our Committee on Fidelity Insurance.
" Ucsolved, That any company doing a fidelity business who

The

resolution

was adopted.

Report of Committee on Warehouse Receipts and
Bills of Lading.
The President: Next in order is the report of the Committee on Warehouse Receipts and Bills of Lading, which
will be presented by the Chairman, Mr. M. M. White, of
Cincinnati, Ohio.
M. M. White, of Cincinnati, Ohio: The committee appointed on the subject of warehouse receipts and bills of
lading beg to report that they have no recommendations
warehouse receipts. In respect " order
bills of lading," the committee have to report that they
recommend that bills of lading attached to drafts which
pass through banks should carry a notation by the initial
bank, " Draft attached," with date of reception and name
of bank; also, that when the final bank receives payment
of draft the bill of lading should be stamped " Draft
paid," giving date and name of bank.
The advantages of this are these. The notations are
to offer regarding

a mercantile requirement; they exhibit the course of the
document; they carry identifications from shipper to delivering lines, thereby in a measure overcoming deception or delivery to a fraudulent holder of a bill of lading.
Besides this, they are a necessity from the fact that
other than initial lines are called upon to honor bills of
lading upon presentation.
It is only by mutual co-operation, gentlemen, that the
various interests of the shipper, banker, collection agency,
carrier and consignee are protected.
The President: This report, as well as the others previously presented, will take the usual course and be
printed in our published proceedings. The work of this
committee has been intelligently commenced, but it is
only begun, and I suggest that the committee be continued.

On motion

the report

was

received and the committee

continued.

The President:

have now finished

all

that

was

left

over fi'om yesteMay's program, and before beginning
with the business laid out for to-day Mr. E. O. Leech, of
New York, has asked permission to introduce a resolution.

Convention Adopts Resolution
Standard.

Favor of Cold

B. O. Leech, of New York: Mr. President and gentlemen: Probably every member of this Convention is aware
that a Caucus Committee of the House of Representatives and the Finance Committee of the Senate have been
in session this summer considering measures tending to
improve and strengthen the monetary and currency laws
of this country, and that in all probability a bill will be
reported at the meeting of Congress in December for
carrying into effect certain reforms in this dii'ection.
In view of that fact it seems that it is highly important thai this Convention should make some declaration
touching the subject, without trenching upon any of the

disputed questions of banking. I therefore offer the following resolution, believing it will commend itself to all
members of this Convention:

The bankers of the United States most earnestly recommend
that the Congress of the United States at its next session shall
enact a law to more firmly and unequivocally establish the Gold
Standard in this country by providing that the gold dollar,
which, under existing law, is the unit of value, shall be the
standard and measure of nil values in the United States; that
all the obligations of the (ioverument, and all paper money, Including the circulating notes of National banks, shall be re-

BANKERS' COX\"EXTION,

60
deemed

in gold coin, and that the legal tender notes of the
United States when paid into the Treasury shall not be reissued
except upon the deposit of an equivalent amount of gold coin.

move
Myron

the adoption of

tliis

resolution.

T. Tlerrick, of Cleveland. Ohio: Mr. President

and gentlemen

In seconding the adoption of this resolution I desire to say a word. If there is
any one thing on which the banlcers of the United States
can afford to speak it is that which pertains to the welof the convention.

Heretofore they have hesitated to
speak on this question, and often that has been because
it Mas a political qncstion; but, Sir, I take it that in 1896
the question
wliether Ave should be on a gold basis or
not was forever eliminated from the field of politics. Indeed. I do not think the two great political parties were
divided upon that (luestion because the bankers, who do
represent the people, spoke that year. Now I thinlc the
time has come when this Association should make itself
felt in the deliberations of Congress on this matter. We
have the power because we represent the people. In
1894, at Baltimore, this Association presented a plan for
the reform of the currency, and that resulted in the
monetary convention which was held at Indianapolis.
A plan was there formulated, the beginning of which was
in Baltimore. That plan failed, however, because the
bankers could not agree on measures.
The prominent
newspapers of tlie country took it up, and went forward
with it, but the bankers picked flaws in it, and did not get
together and were not united. But now the time has
come when we may declare ourselves on this question
without fear, because when we speak for the gold standard we are taking a stand for honesty, and if there is
any one thing that we mean to represent it is the honesty,
fare of all the people.

o.'.'

the integrity and the thrift of this country.
Caldwell Hardy, of Norfolk, Va.: Mr. President, I
am afraid tliis resolution cannot be adopted at this meeting without violating the Constitution.
The President: My attention has been called to the
fact tliat the putting of the question on this resolution at

would be in violation of our Constitualthough the resolution seems entirely germane to
the recommendations contained in the addresses and papers presented to the Convention.
Mr. Fentou, of Chicago, 111.: I move that the rules be
the present time

tion,

suspended and the resolution adopted now.
Mr. Hardy: I make the point of order that that cannot be done. There is no man here more hearcily in favor of this resolution than I am, but if this course were to
be followed now it would set a precedent that might come
up with disastrous results perhaps at some future ConI therefore move that the resolution
be referred
Executive Council with the request that it be reported upon immediately. Then the Convention can act

A-ention.

to the

upon

it.

J. J.

Sullivan, of Cleveland, Ohio: In

temper of

opinion the

Convention is decidedly in favor of the
adoption of this resolution now. In all deliberative bodies
there are ])rovisions for the suspension of the rules, constitutional as well as others. The banking fraternity of this
country is. in luy opinion, a power a little higher than the
Executive Council.
J.

this

B. Finlay, of Monongahela, Pa.: There

power

higher than the Executive Council, to be sure, and there
is a power liigher than this assembly, and that. Sir, is
the
Constitution of the Association. Now, there is a provision in that Constitution which provides for its amendment, but tliere is no provision for its suspension. I am
in favor of this resolution, but I am opposed to violating
the Constitution.

A. P. Wooldridge, of Austin, Texas: I move as an
that this resolution be referred to the Executive Council for immediate report.

amendment

Caldwell Hardy, of Norfolk, Va.

have already made

have heard read the resolution which has been referred
to us

The President: No, not yet. It has not yet been referred to the Executive Council by the Convention,
[The Convention then voted in favor of referring the
resolution to the Executive Council.]

Mr. Ti'owbridge: A majority of the Executive Council
over here, and Ave will consider it right away. Gentlemen of the Executive Council, what Avill yoti do Avith
is

tliis

resolution?

:Mr.

Findla:^': I

Convention

that

Gentlemen of

tlie

pjxecutive Council,

you

be referred back to the
recommendation of this

[The motion prevailed.
Mr. Trowbridge: Mr. President. I have great pleasure
in reporting, on behalf of the Executive Council, that the
resolution of Mr. Leech, of Ncav Yorlc, referred to us l)y
the Convention, has been considered by the Executive
Council, and we recommend that it be adopted by the
Convention.
The President: Gentlemen of the Convention, I am
very glad indeed to be thus unentangled from
the
parliamentary
knot
into
AA'hich
the
Chair
found itself, as I am afraid the Chair would have ruled
that a suspension of the rules was in order, though a suspension of tlie Constitution is quite another thing. The
|

]"esolution is before the house.

The

resolution Avas unanimously adopted.

Call of States.

The next business before the Convention, gentlemen, is
As the Secretary calls the roll of
States, gentlemen are expected to rise and give a brief

the Call of States.

statement, not exceeding five minutes in length, of the
general condition of business in their various States.
OAving to the length of the program and the limited time
at our disposal, the Chair Avill be obliged to strictly enforce the five-minute rule, although he is aware that he
may be compelled to cut off some brilliant orator, even
a Henry Clay or a William Jennings Bryan.
The roll of States was then called by the Secretary, as
foUoAvs:

ALABAMA.

(No response.)
(No response.)

AllIZONA.

Whiting, Mobile, Ala. Hold ou, before you pass AlaAlabama is never unrepi'esented.
The banking business of Alabama during the past year
Las been unusually prosperous. Deposits have increased by
many millions. Net profits have been large, Avhile losses have
been nominal.
Banks prosper as communities prosper, and Alabama has
shared in a full degree the business prosperity and activity
which has pervaded the entire land. For many years Alabama was regarded as purely an agricultural State, but latterly her mining and coal resources, her timber and lumber
business and her spinning business have been developed, and
she stands to-day among the great manufacturing sections of
the Union.
J.

bama.

AIIKANSAS.
Faulkner, of Helena, Ark. None of our industries
are lying idle evei-ything is booming. Our banking facilities have increased very largely.
We have a State AssociaWe
tion, which is progressive, conservative and successful.
have endeavored by introducing a reciprocal draft to meet the
competition of (he express companies, and Ave have arranged
to charge the same amount for those drafts that the express
companies do. This has proven a great benefit to the bankers in our State.
I Avish I had time to go on and speak of the immense
progress of our State, but, as the time is limited and I feel
that this Convention does not want to listen to any long
speeches, I Avill simply close Ijy saying that during the last
three years not a solitary bank in our State has failed, their
deposits have increased three fold, and not one member of the
Arkansas State Bankers' Association has died within that
S. S.

;

time.

CALIFORNIA.

Mr. Wooldridge: Then I will second it.
Alvah Trowbridge, Chairman Executive Council: As
Chairman I will call the Executive Council together

Council.

that motion.

right here.

move

Avith tlie favorable

(No

response.)

COLORADO.
Thatcher, of Denver, Col. Gentlemen, Colorado is
One year ago, just before the American Bankers'
Association met at Denver, we had not felt the slightest
I.

fill

ri?]it.

F.AXKIXG
day when you asYou seemed
iiembled tliere
You assured us
us with new life and activity.
to inspire
greatest country
that we were living in the very midst of the
could produce, and
on the globe you wanted all the gold we
which, prior to your visit, had not
it seemed that" our mines,
probeen yielding much, took a fresh start and doubled their
Trosperity seemed to
visited them.
duction at the time you

from

rustle of prosperity, but dating

SECTION.
DISTRICT OP COLUMBIA. (No response.)
FLORIDA. (No response.)
GEORGIA.

tlie

everything has been prospering.

;

come

witli you.

To-day our cotton mills arc running to the full, with orOur rolling mills are
<kn-s for more than six months ahead.
on orders from .Japan and Samoa. Our gold and
running
iron interests are largely on the increase.
This is not
I have not brought any statistics with me.
you that everything is on
But I can tell
the place for them.
Even our cattle on a thousand hills seemed to
the increase.
increase by the very fact of this .\ssociation meeting there.
Our calf and lamb crop has largely increased since you
visited us,

how

could

from
from

and the price

may

also, I

Well, gentlemen,

add.

when we had the brilliant Hendrix
come there we had the soldier banker

St.

be otherwise

New York

;

Louis there, with his uncontradicted statements of
what had been done all over the country where this Association had met, and, on top of all that, we had absolution for
our past sins and heresies, and a gentle benediction, by Reverend Alvah Trowbridge.

CONNECTICUT.

Robert J. Lowry, of Atlanta Georgia, as you know, was
ono of the original States. We grow in Georgia everything
that can be grown anywhere under the sun. We have in
the soil of Georgia every mineral in the world.
You cannot
find anything anywhere else that we have not got there.
We
commenced early, way back in the 30's. The first gold ever
minted in the mints of the United States came from Georgia,
and that industry has now within the past year or two opened
up again. Georgia can furnish marble to duplicate any
We've got great
that can be found anywhere in the world.
This is not a fairy tale it is the truth.
big mountains of it.
As to fruits, there is
I am a truth teller, as you all know.
only one State in the Union that can raise any better fruit,
and that is only of one kind, and that is the State of Colorado the Rocky Mountain melon but when you come down
to the good old fashioned luscious watermelon, why, Georgia
Georgia has a population of 2,200,is the place to get them.
In the
000, of which less than 20,000 were foreign born.
last twelve months there have been built in Georgia fifteen
new cotton factories. A large proportion of the cotton goods
manufactured in our State are exported to China. And that
reminds me, gentlemen, that in my opinion England and
America should saj' to the powers that are dividing up China,
China is the best customer we have in our Southern
Stop
country for manufactured goods, and we want China kept
:

;

—

Mr. Lewis, of Naugatuck, Conn.

Mr. President,

heard

a story, not long since, of a man who, after listening to a
very able and eloquent address, said, " Huh. I could make as
good a speech as that, if I only knew what to say." I find
myself in very much the same position at this time, for I.

have not the slightest doubt that I could make a fine speech
if I only knew what to say, but I am not endowed with the
gift of eloquence, and, therefore, shall attempt no flights of
oratory.

Connecticut, one of the smaller of the sisterhood of States,
She can boast no broad
sends you here her greeting to-day.
4icres of fertile plains, covered with waving grain, nor lofty
mountain peaks, yielding untold wealth in precious minerals
nor yet groat seaports, into which pours the commerce of the
world, as can some of the other and, it may seem to them,
more favored States but she is not disposed to be envious.
;

There are compensations, and what she lacks in size and in
the blessings enumerated she makes up in the enterprise of
her people, in turning to best account the advantages which
she does possess.
As agriculture became more and more uuremunerative,
through competition from the <rreat West, her citizens were
driven to turn their attention to manufacturing, till she has
became essentially a manufacturing State, developing from
the time

when wooden nutmegs were

turned out,

first

to the production of a vast variety of articles, more
honest and more useful, till now. all up and down her beautitold,

ful valleys, in

hum

hamlet and

village,

town and

city, is

heard the

of the wheels of industry merrily turning, and, as

sequence,

her people aie

well

employed, prosperous,

con-

tented and happy.
The factory operatives in receiving remunerative wages,
have money to spend with the merchant, and the prudent, a
residue to lay by in the savings institution, against time of
need.

The merchant

in turn becomes a larger depositor, and the
good loaning opportunities, though it must be confessed at not always very satisfactory rates, so that to sum
up, I feel justified in saying that the abundant prosperity
of a year ago has suffered no dimunition, but on the contrary has gone on in an increasing ratio.
Another thing we can congratulate ourselves upon, there
has been no bad bank failure within our borders, and we have
not directly suffered from those elsewhere so confidence remains unimpaired.
Speaking of bank failures reminds me of a bank in a
town in a sister State, which closed its doors some two years
or so ago, and the surprised and distressed people rose up in
indignation against the judgment, not to say the integrity, of
the bank president, on whom the populace emphatically laid
the blame. The wife of the president, loyal to her husband,
said that the people need not lay the calamity at her hus-

bank

finds

;

band's door, that it was the Lord's doings. A local wit,
hearing of Mrs. President's remark, said, " Well, if the Lord
is such a poor financier as that, what is the use of laying up

any treasures

heaven?"

DELAWARE.

(No

response.)

open.

IDAHO.

(No

response.)

ILLINOIS.
I do not know that I can
G. D. Boulton, of Chicago, 111.
add anything to the general testimony that has been given by
:

the representatives of all the States, north, south, east and
west.
There can be no doubt that prosperity is with us to

an extent never before experienced by our people. It is apparent in every walk of life. The farmer, the merchant, the
mechanic and the manufacturer all testify to its presence, and
It is evidenced by our large credit trade
it comes to all.
balance of six hundred millions due us from Europe, a balance so vast that it is diiScult for us to grasp its entire mean-

yearly surplus after bountifully supplying all the
own people in the way of food, clothing and
luxury, means wealth to a most abundant extent.
A nation is only prosperous when its labor is actively
employed at good prices. There, perhaps, has never been in
the history of the world a time when labor was so well employed as at the present. There is work for all who seek it,
and an assurance of not only bare subsistence for the wage
earner, but something besides for the rainy day, which I suppose is sure to come in the future.
In times of peace prepare for war, so also in times of
prospei'ity prepare for times of trouble.
Intense activity
breeds overproduction and overproduction breeds distress, if
not disaster. The lesson we have to learn to-day is to so
shape our affairs that when hard times come, as come they
will, we will be prepared for them.
Nature is very lavish toward us, and if we do not abuse
her gifts by extravagance, waste and carelessness we will
reap the full rewai-d, but if, on the other hand, we grow overconfident in the future and lax in our I)usiness methods, we
are only sowing the wind to reap the whirlwind.
I can only say in conclusion that Illinois is participating
to the fullest extent in the bounties that surround her, and
that rich and poor, master and man, are alike satisfied with
what I'rovidence has so freely outpoured over the land in the
closing year of the century.
ing.

wants

of our

INDIANA.
M. Levering,

La Fayette

anotlier year of prosperity in Indiana.

are pleased to report

If I were to put our
State in comparison with other States, as to what we have
that is better than all the rest, we may boast of the vast gas
fields and oil fields, which give us the control of the glass and
tin plate business of the country.
During the past year manufacturing capital has almost
doubled.
Our manufacturers have never enjoyed such a
good year of prosperity and profit. It has been so great that
the promoters of trusts have found it to their advantage to
pay from ten to twelve times the original capital of many of
our industries. The crops have beeii abundant. Wo failed
a little on wheat, but our corn crop is exceptionally good,
and, with its by-product of a liquid character, we are able
to bring up the deficit.
Our State Bankers' Association has
grown and is very useful.

BANKERS' CONVENTION.

[NDIAN TP:RKIT0RY.
IOWA.

(No

Through the

response.)

Fred. Heinz, of Davenport Mr. Chairman, Ladies and
Gentlemen. Iowa is still represented in the sisterhood of
States on our starry banner and being of the sisterhood it
would follow of necessity that Iowa is a female, and on her
:

;

behalf permit

to say

She

is all right.

This year her horn of plenty is larger than usual the
deposits of her banks are still increasing, so that money is as
plentiful as her agricultural products are, of which she has
;

an abundant crop.
During the year many new banks have been

new

school buildings erected,

many

miles of

started,

new

many

railroad

built.

supremacy of her children as to their
general education, in the large number of her banks, and in
the great value of her agricultural and other products.
She now has over nine hundred banks, of which over
four hundred are members of her State Association has inShe believes

in the

;

creased in business, in population, in wealth, in fact in almost
everything worth having, excepting only in calamity howlers and in the rates of interest, which have each decreased
CO per cent., more or less.
She is fast getting away from the withering influence of
the money sharks of Wall street, for she is commencing to
supply her children with all money needed to do their business with, and before long her own money sharks will be
able to furnish the gentlemen of Wall street funds and give
them pointers on financial matters. In the meantime the
most of her children are sufficiently educated to know what a
good dollar is when they see one, and what it is worth when
they get one, and will always insist that our money, like our
flag, must be good the world over.

corner

wont up into the five figures per front
few months later, when all the Jayhawkers had

foot.

efforts of a united people the price of

those days

lots in

climbed over the fence, the Eastern sufferer suddenly discovered that he could not dispose of his corner properties
at five cents on the dollar.
It was exasperating, of course,
to the man on the wrong side of the fence, but New York City
bankers even acquired a vast amount of valuable experience
and information after they had made a few haphazard investments in the eventful West.
The climate is indicative of the character of the people.
When there is a drouth in Kansas it is no mere suggestion
of dry weather.
At such a time the conditions of the Sahara
are mild in comparison.
If at such a time all the evil disposed people of the earth could be sent to the sand hills of
Southwest Kansas, with the assurance that, without repentance, the trip would be made eternal, the world would immediately become good.
On the other hand, when Kansas indulges in the Utopia
business, as she has during the past three years, all vulgar
and uninspired tradition concerning the celestial abodes sinks
into abject comparison.
When grasshoppers invade the State they come by companies, regiments and battalions, leaving a vaster progeny to
complete on the following year the work of devastation.
As soon as they fiy away nature invokes its mightiest
puissance.

It says.

Let there be

life,

and immediately Kansas is clothed with a mantle of glory.
Forthwith the midnight of sorrow is followed by the noonday

The

of joy.

the soil stripped of his wealth in the

tiller of

morning lies down at night to pleasant dreams surrounded
by an opulence warranted only by the eternal law of compensation.

KANSAS.
Scott Hopkins, of Kansas Kansas is a name to conjure
with.
It is a State of perennial surprise and profoundest paradox.
Its history is a kaleidoscope.
To predict its future is to ruin the i-eputation of a
prophet.
:

destiny by an introspection of its past is to
still miss the truth.
Coronado traveled thousands of miles over a trackless
desert to find on its boundless prairies nothing but disappointment and chagrin. On the other hand, thousands on those
same rolling plains h.ave found happy homes, wealth, luxury

opine

its

—and—guess—and

guess

and contentment.
Years ago the people

of the East with lavish generosity
sent indiscriminate aid to Kansas sufferers.
To-day Kansas
sufferers are buying commercial paper in Boston and Philadelphia, or are absorbing the stocks and bonds of the Great

Red Dragon

Wall

Republican administration with an overwhelming majority of 82,U00 or more assumes the responsibilities of State
government. At the earliest opportunity the facetious electors " turn the rascals out," and with a beastly majority
turn in a new lot from the hungry opposition, all of which
tends to confuse those who are not conversant with Kansas
character.

honor and distinction upon the State by sending a John J. Ingalls to preside over the United States Senate.
Then we convert our commonwealth into a three-ringed
hippodrome. We exhibit our long-bearded Senator drinking
his bowl of soup in legislative hall, between senatorial periods.
We bolster up the credit of the State by sending our Jerry
Simpson, the statesman of Medicine Lodge, to display his
sockless feet to an awe-sti-uck and enraptured multitude, or,
finally, to restore complete confidence, we commission that
distinguished female orator. Col. Mollie E. Lease, financier
extraordinary, to go up and down the earth in search of national bankers or other small game, and, so far as possible,
nullify their works of iniquity with fiery eloquence and fierce
denunciation. All of which is still more incomprehensible
to those who are not up in Kansas financiering.
The Sunflower State never does things by halves. She is
never on the fence. You will always find Kansas on one
reflect

side or the other of every proposition.

during the early nineties, the outlying additions to Topeka, the capital city, overlapped those of the windy wonder
of the Arkansas, better known to Eastern investors as
Wichita.
that,

hard

" in

Kansas the people enjoy
They drink the dregs

The banks are expected to close their doors,
business ceases and politics becomes the order of the day.
The milkman becomes a statesman. The air is full of fiat
money propositions, sub-treasury schemes and IG to 1.
Then, presto, and the times are good. The banks that had
been hanging by their eyebrows collect all overdue paper,
discount all obligations and resume business without loss of
The granger plants his bonanza crop,
confidence or credit.
receives a munificent check therefor, buys the quarter section of land next his own, erects a two-story, ten-roomed
house, purchases a W^eber grand for the eldest daughter, lays
in a new and full set of farm machinery, and concludes
his fondness for expansion by investing in a few shares of
paid up stock in the bank just organizing in the next town.
If amidst vicissitudes such as above narrated you imagine
the true Kansan ever becomes discouraged, you are far from
the truth.

He
then

sometimes becomes

—but

discouraged

The motto
signifies

tired.

of the State

—now and
aspera—which

takes a rest

NEVER.
astra per

something about reaching the stars through

diffi-

culty.

The Kansas man always takes

things literally.

event-

ually expects to hit the astral territory and bring it within
State jurisdiction still he fully expects to experience the
" per aspera " feature before he gets there.
;

always on the lookout for drouth, grasshoppers, hot

winds. Populism, cyclones and adversity. He knows, howHe knows
ever,, that they are mere incidents in his journey.
that Kansas stock is like that of the granger railways at the
present time. The market may slump a few points, but the
bonanza crops will in a short time force them up to a higher
record than ever, when everything bearing the Kansas label

must go above

man

—

par,

so he never loses faith.

The Kansas

always a bull on the market.
Nor is his faith and confidence without warrant.
Kansas is usually described as a 2 x 4 agricultural State
i. e., 200 miles across and 400 miles long, extending from
is

Its length
the center of the earth to the heavens.
York City, its width
tance from Cleveland to New

the disthat of
Its elevation above
is

the average width of the State of Ohio.
sea level ranges from 750 feet on the east line to 3,300 feet

along the Colorado boundary.

When

the citizens of that locality indulge in the boom
business everybody helps it along. Cities grow to prodigious
proportions on paper over night. It is currently reported

of misfortune.

street.

So when times are

the fullest realization of the situation.

Now. divide the
The eastern

parts.

State,

section

as Caesar did Gaul, into three
is a rich agricultural district,

unknown. In this section
conservative investments in
real estate mortgages have never lost a dollar of principal
In this section you will find diversified indusor interest.
where a

total failure of crops is

those of you

trj%

who have made

well kept farms in

some

localities selling for ten

and

BANKING SECTION.
twelve thousand dollars a quarter section. Here, in short,
you will find every evidence of thrift and prosperity. In
Brown County alone over a million of dollars are deposited
in our local banks, largely to the credit of the agricultural
classes.

The central section is of higher altitude. This is the
natural wheat belt of the State. Here cattle are fattened
Corn
to advantage for the Kansas City or Chicago markets.
The rain fall is a somewhat uncertain
is not a certain crop.
factor.
The conditions do not warrant the same kind of experimentation as along the eastern border of the State.
The western section of the State is the short grass counThis is a natural grazing region. The farmers who
try.
have heretofore failed as exclusive soil tillers are to-day obtaining most satisfactory results handling cattle and turning
their lands to uses subsidiary to this industry.
Each of these sections has its peculiarities. Each section
is capable of sustaining a high standard of activity, but that
activity must be in consonance with the geological and meWestern Kansas suffered temteorological Imws of the place.
porary defeat iu attempting to raise corn where nature intended cattle to flourish.
To-day the people of Kansas better understand local conditions.
They have revolutionized their methods and as a
natural sequence the State is enjoying a prosperity never
before experienced.
In proof of this compare the condition of the State in
1892, as evidenced by the bank statement of that year, with
the report of the present year
1892
Cap. and Sur.
Deposits.
Loans.
>'ational
142 $14,200,000
|21, 665,000
$23,466,000
State
447 ll,y46,905
20,143,881
20,761,195
589 $26,254,905

.?41, 808,881

$44,227,195

1S99
National
State

100
368

$9,60.5,821.34 $24,688,297.06 $21,926,087.35

7,439,538.85

24,091,745.05

18,107,072.92

468 $17,045,360.19 $48,780,042.11 $40,033,160.27

The deposits have increased, loans have decreased, reserves are larger, rediscounts are almost an unknown quantity.

The banks were never in better condition than
present time.
Money is plethoric.

the

Customers are paying their debts and increasing their
bank accounts. Kansas will this year move her crop, great
as it is, with her own money.
The Kansas farmer now knows when, where and how to
smite the rock to send forth the stream of plenty.
Kansas is not an agricultural State alone, nor does her
prosperity depend on the surface cultivation of the soil.
While the value of her farm products last year amounted to
$151,023,828.67 and the value of her live stock was $113,227,033, aggregating in all over $265,000,000, still this was
not all Kansas produced.
Her non-metallic products, such as coal, salt, clay goods,
gypsum stone, natural gas, refined oil, hydraulic cement, lime
and sand reached the munificent sum of $5,948,541.69. The
zinc and lead products came to $4,286,227.52.
Under the
head of smelting products the total output was $16,739,-

making a grand total of $26,966,472.76 for the year
of Kansas mineral output.
Last year Kansas paid to her citizens employed in coal,
lead, zinc and salt industries over $5,1-56,767 in wages.

803.55.
in the

way

need therefore occasion no surprise if in a few years
is grouped among the mineral producing
States,
with bonanza crops of wheat, corn and cattle as mere inciThe derrick and drill are bound to become as essendents.
tial to the Kansas ganger as his electric mower or automoIt

Kansas

is estimated to be upward of 300,000,000 bushels.
stands at 100 per cent, in the last official report.
In one county of the State it is estimated that the crop
will average 800 bushels for each inhabitant.
This means 4,000 bushels for each family, or at 20 cents
per bushel the snug sum of $800.
What is the matter with Kansas under present conditions'/
Corn is again KINC.
It is the yellow stuff wliich brings happiness, contentment
and prosperity to thousands of loyal citizens.
It nullifies the platform declaration that " we are on the
verge of moral, political and material ruin."

The crop
It

There

a feeling

among some Eastern

people, especially

who

cut their eye teeth during the boom, that nothing,
good comes out of Kansas and that her citizens are moral degenerates.
Kansas people are made of the same clay as other people.

those

The blood

and the Cavalier courses through
They have as high a regard for commercial

of the Puritan

their veins.

honor as any class of citizens in this nation.
They have
They have learned by severe experience.
profited by misfortune,
To-day they know the possibilities of their State as never
before.
They are not now working at cross purposes, but in
harmony with it. They know where to plant corn, where to
harvest wheat, where to raise stock. They understand the
value of kaf?er corn, the soy bean, sugar cane and that wondrous plant- the alfalfa.
They are self-reliant, resourceful and courageous. Kansas produces scholars, poets and statesmen in piping times
of peace, and in time of war soldiers like the Twentieth Kansas and generals like Fred. Funston.
Nb State boasts of a finer school system. No State can
rightly claim a higher standard of intelligence.
When you are inclined to criticise Kansas or Kansas people kindly recollect that their idiosyncrasies are not due to
any inherent weakness, but to a misguided energy which,
when properly controlled, can move the earth.
For some years the stereotyped letter of the Eastern correspondent was
Dear Sir. We have no more money to loan in Kansas.
The Populisiic tendencies of your people, aided by a revolutionary court and State administration, warrant discontinuRespectfully.
ance of further business relations.
Populist Legislature convened, talked, passed some resoA

—

lutions

and adjourned.

The wave

of radicalism spent its force

and no one was

seriously injured.

The evil report, however, went forth, and Kansas has
been the recipient of much free advertising throughout the
commercial world.
Bounteous crops and a night's repose have brought about
a wonderful change in public sentiment in the State. The
good sense of its people has again asserted itself, as every
loyal Kansan knew it would.
If any one is afflicted with Kansas nightmare let him
awake and in his Shakespeare find these words of authority
Hence, babbling dreams! You threaten

Shadows avaunt

Kansas

is itself

vain;

again.

The rights of the creditor are as certainly protected as
those of the debtor by the courts of our State.
There is a strong and rapidly growing conviction that 16
to 1 Is not a panacea for financial ills.
Kansas people understand that wealth comes from the
earth, the brain and the muscle, not from legislative enactment.

Some States are created great
Some States achieve greatness
Some have greatness thrust upon them.

the.se things and so many more.
would fill a book to name them o'er,
Are hid and held in these walls of corn.
It

morn

credit,
is

and to preserve that integrity and good repute
becoming men, States and Nations.

KENTUCKY.

.\1!

in the breeze of

Kansas stands forth to-day, the boldest advocate among
the States to maintain contracts, uphold private and pub-

which

This latter complaint is especially applicable to Kansas;
1897 gave her the great wheat crop, which on the folowing
year enabled her to pay off a large part of her mortgage indebtedness, and now a marvelous corn crop awaits harvesting
which distances all previous records.
It means,
Things of use for the lowly cot
Where (bless the corn) want cometh not,
Luxuries rare for the mansion grand,
Gifts of a rare and fertile land.

banners toss

all
lic

bile harvester.

W'liose

John H. Leathers, of Louisville: Gentlemen, the sun still
shines bright in the old Kentucky home.
I recognize the
greatness of this country, and they are all great States, but
I must claim for Kentucky that we have the finest soil and
the most splendid climate in America.
still claim to have the prettiest girls, the fastest
horses, the greenest grass and the best whisky in the world.

What more do we need to be happy?
I am not going to claim that our

politics are better than

any other State's, but, gentlemen, you may remember that I
told you three years ago, at St. Louis, that even in old Kentucky there were honest men enough to put the State in a
sound money column, and we did it. I thank God to-day
that in that State, as in

all

the States of this Union, there

BANKERS' CONVENTION.

64
are

men

and

wlio are williug to put country above party,

hold the bahince of power in
America.
is representative of a large class of men
in Kentucky.
I gave four years of my life to the Southern
cause as a matter of conviction, and, notwithstanding all my
prejudice for party's sake
and, gentlemen, you know what
that means I put country above party and voted the Rethat

tliose

are the
My case

men who

—

ticket rather than trail after William Jennings
Bryan. And let me tell you another thing, gentlemen, if the
war with Spain never accomplished anything else, it has
unified this country, and to-day a man is ashamed to talk
about the North and the South we are all one.

publican

LOUISIANA.
G. W. Bolton, of Alexandria This State has an area of
about 45,000 square miles, containing an acreage of 28,000,000 acres, of which about 13,000,000 acres are alluvial, remainder uplands and prairie. The alluvial region is only
cultivated along the banks of the rivers and bayous, mostly
protected by levees. Those are constantly being improved
and extended and when perfected with proper drainage will
add to the present arable area thousands of acres of the most
fertile lauds on the globe.
Under scientific methods the uplands can be profitably cultivated.
With only about 3,000,000 acres in cultivation the total value of farm products of
every description cotton, corn, oats, sugar, rice, oranges and
vegetables for early Northern market
amounts from .$75,000,000 to .$80,000,000 annually. The rice crop of the State,
chiefly grown in southwest Louisiana, is of great importance.
Lands in that section that ten years ago would not sell for
over $1.50 or $2.00 per acre now readily command $20 to $30
per acre where facilities for irrigation exist. For irrigating
purposes there are 350 miles of canals and over 100 artesian
wells in southwest Louisiana.
The estimated area of lumber is fifty to sixty billion of
feet.
Some of the finest long leaf yellow pine in the South
is found on the uplands of Louisiana.
Such lands a decade
ago would not sell for over $2.0Ci to $3.00 per acre, now
they readily command $8.00 to $10.00 per acre.
Lumber manufactures are in a prosperous condition, the
output of many of the mills being largely sold ahead. The
prices for some of our agricultural products being so low
:

—

tends to retard progress, yet the condition of the agriculturist is better than could be expected under the circumstances.
The geological position of Louisiana forbids the existence
of minerals, save salt and sulphur.
The facts mentioned
show the basis for banking, which has developed greatly in
the last ten years.
Outside of New Orleans, fifteen years ago
there were only three banks eleven years ago only five, all organized under the National system. We now have forty-four
banks under our State laws and twelve under National, with
capital ranging from $15,000 to $100,000, thereby demonstrating the feasibility of small banks in the rural districts
and small towns. Among all the banks thus organized there
has been only one failure. We have supervision of our State
;

banks by an examiner appointed for that purpose.
During the stringency of 1893 and succeeding years, when
many banks in larger cities declined to pay depositors but a
limited amount daily, our banks in the interior of Louisiana
invariably honored customers' checks as desired. The banking business in the entire State is reasonably prosperous, all
paying dividends regularly and adding something to the surplus fund each year, with steadily increasing line of deposits.

Another evidence of improved condition is the fact that all
State and city securities, that not many years ago were below
par, now readily command a premium, though bearing but a
low rate of interest. Our magnificent system of waterways,
together with railroads, must always furnish ready and cheap
transportation for the products of soil and factory.
With balmy climate, fertile soil and peopled by a brave,
generous and hospitable people, Louisiana offers rare inducements to the immigrant, also profitable return for investment

never expectid lo hear that invitation in any such fornii
it to-day.
My friend Burrage, whO'
is I'esponsible for the imposition of myself upon you at this
" Y'ou needn't mind in the least what you
time, said to me
say, nobody will hear a word of it."
It is not easy for a Bostonian, according to the illustrated
I
press, to condense his remarks into a five minutes' speech.
am not going to do it, however. We, in Massachusetts, 1
fancy, find our prosperity a little less buoyant, and there is a
little lower temperature, I think, with us, than I have observed out here.
Possibly as we are accustomed to the
slightly cooler water of Boston bay, it lowers our temperature
from what it would be if we resided out here on the great
lakes or in the central part of the country.
I have derived a
good deal of comfort, however, from finding that what I have
heard here has confirmed certain impressions that I had.
The gentleman from Alabama said that he noted the fact that
cotton mills are being built down there.
I have noted it, too,
as well as other gentlemen in our State.
The gentlemen
from Indiana said they had sold their property to trusts, and
sometimes for ten or twelve times its value. We in MassaWe
chusetts have sold some of our stocks to corporations.
have had a suspicion that the New York banks were really
paying for those by advancing money to syndicates, though
we do not know but we have the suspicion that the managers^
who have sold will organize new mills and go to work and
compete with the old corporations, for some of the treasurers
have had this one object, and that was to get rid Of the old
machinery and start entirely new and run the other fellowsinto the ground.
We have started a little scheme of our own in Massachusetts spurred on, doubtless, by the action of New York,
and yet on an entirely different basis. Our New York
friends, with their usual vigor, have taken the bull by thehorns.
We, on the contrary, are more modest in manner
and milder. T think you will all agree that the exchangequestion is a question of friction, and you know in machinery
friction is a bad thing, and so we have tried to eliminate it.
We have not got to an end yet, I am not at all sure that weare not paying more for exchange than we should, but at any
rate we have made a step in an original direction, and onewhich we hope will be productive of good results.
I

again, but I have heard

;

—

MICHIGAN.
Peter White, of Marquette I reside in that portion of theState of jNIichigan known as the upper peninsula, north of
I have resided there for something
the Straits of Mackinaw.
more than fifty years, and there are those who have thehardihood to say I have been there 400 years. We produce
:

copper.

manufacture pig iron and many otherAt no time during my

also

things that I won't stop to mention.

residence there has everything been so prosperous as it isEvery man who wants to work can get work. So can
every woman and every child, for that matter. As to the
lower peninsula of Jlichigan, I think you will all agree that
what he said in his address of yesterday shows that the en-

now.

tire State is prosperous,

both the lower portion as well as the

upper.

MINNESOTA.

(No

response.)

MISSISSIPPI.

W. W.

George, of Meridian, Miss.
It has been my fortune to reside in thelittle city of Meridian, in an extreme eastern portion of the
State of Mississippi, for the past twenty years, during which>
time I have been connected with one of her banking institutions.
When I moved there it wag a little village of about
3,000 inhabitants. Year by year I have sedulously watched'

Mr. President

MASSACHUSETTS..

her growth, until now she claims 17,000 or 18,000 inhabitants,
and with all the modern improvements and conveniences of
more pretentious cities.
It is in the midst of an agricultural country, though thelands are considered poor our chief product is cotton. During these twenty years I have watched the raising and marketing of cotton, since, to a great extent, the business of thebank with which I am connected has been dependent upon
Dui-ing this period, covering the fifth of a century, I have
it.
known no failure in the crop in fact, have never known
what might be called a half crop, whilst on the other hand,.
I have often seen an unusually large crop, and occasionally
a falling below the average crop but the general average has

A. L. Ripley, of Boston
I remember a long time ago
when I was in college that it was the custom of the President
to invite the seniors to the senior receptions, and, in order to
take the edge off the coolness of the plunge, he gave us the invitation in somewhat this fashion You never need mind what
you wear, nobody will notice it.

been good.
This is a wonderful statement, since it shows that we can
depend absolutely upon a fair crop every year, and one whicli
always commands the ready cash in any and every market.
This fact affords food for thought to the man with capital
Here he can find a couniry with a climate as near
to invest.

of capital.

MAINE.

(No

response.)

MARYLAND.
J.

D. Wheeler, of Baltimore

Our manufactures are

gressing, our banking capital has increased

ample, and our commerce

and seems

pro-

to be

doing very well.

;

BANKING SECTION.
perfect as oau be louiul anywhere, and a generous soil, and a
thrifty people, and where the great staple crop neccr fails.

For the few jears last passed, the cotton crops have been
so enormously large, and the price so low, we often think it
will not pay to pick it.
I well remember the first time after
the Civil War when cotton fell to 10 cents per pound plantbecame discouraged and said they could not produce it for
than that sum, and they stored their cotton and borrowed
all the money the banks had
but it has never recovered those
prices, but, on the contrary, the price has gradually gone
lower every year, while the amount produced is growing
greater.
If ten years ago 1 had been told cotton would go
to 5 cents per pound and remain at that price for two or
three yeai-s consecutively, I would have predicted utter financial ruin and bankruptcy for the cotton districts.
And yet
such is not the case. For three years the average price of
cotton has been about 5 cents per pound, and yet I have never
ers

less

;

seen the people in
condition.

Money

my
is

part of the State in better financial

more abundant, business generally more

satisfactory than for many years.
In fact, the banks
throughout the State have larger deposits, larger surplus of
funds, than ever in their history.
Our people owe less and
are more hopeful of the future than at any time in their history since the Civil

But

War

closed.

;

made of late years in the methods of
improved farm implements, but also in
fertilizing the soil.
Science has been invoked with her magic
wand to aid in this work. In many instances the soil is
great progress has been

cultivation, not only by

analyzed to find its constituent elements, then it is easy to
ascertain what fertilizer is best adapted to the soil to produce the best results.

and implements have been much improved, and cultivation thereby made easier and better.
Another and perhaps the most potential factor in the increased production conies from the improvement in the seed
tools

sown.

Strange that this subject was so long overlooked.
It was left for Dickson, of Georgia, who is justly entitled
to wear the honors of the " Cotton King " of the South, to
make the discovery and utilize it. He selected the best stalk
of cotton in the best field, and the best bolls therefrom, and
planted the seed. This process of selection was continued
from year to year, until he had produced a distinct variety
of very prolific cotton, and for several years sold the " Dickson Cotton Seed " at .$5.00 per bushel. This put others to

selecting

and improving

seed,

and the work

goes on.
Not only is the selection made with reference to the quantity, but the quality of the fiber, and length of the
staple.
All these enter now into the equation of the farmer's profit
and loss, and greatly to his advantage. Then the seed now
is as much an object of his care as the lint, since it
commands
a good price and ready cash, for the many useful products
made from them, of food, both for man and beast, as well as
for reclaiming thin and worn-out soils.
Hence cotton is
raised at a less cost than formerly, and in greater quantity.
And yet the cotton business is in its infancy. It is the cheapest and most beautiful textile in the world, and can be manufactured into more articles of utility and at less cost than

any

textile in the world.

Think

of a

still

woman buying

;

will be equal

to the emergency.
The State of Mississippi
alone can easily produce eight or ten million bales if put to
the test.

When we think of the enormous wealth concealed in this
industry, one is staggered at the possibilities of the cotton
States of the future.
Not only from the production of cotton
cotton

wealth come, but also from

mills

must come

its

manufacture.

The

cotton fields, because the
mill that is in the midst of the cotton fields can manufacture
the textile cheaper than the mills at remote points. This
has been so thoroughly demonstrated that no argument is
needed to prove it. All over the cotton Stales to-day the
question of erecting cotton mills is uppermost in the public
to

business sense in shipping our cotton seed to New England and to Europe to be manufactured and then purchasing back the manufactured product as there is in shipping the staple there to be manufactured and yet no man
is insane enough to think of so shipping seed to be manufactured.
With the profit of the manufactured product added
to the product of the raw material of both the staple and seed,
left in the cotlon States, it is easy to predict a great future
for the cotton States.
The only possible disturbing question that may arise is
the labor question.
We have the best labor in the woi-ld, and
if left alone free from outside influences it will so continue.
The colored people of the South are the freest and happiest
laboring class known to me, and are accumulating homes of
their own, and doing well.
There is another source of groat wealth in the State in
which I reside and that is its timber. All south Mississippi
13 practically one great long-leaf pine forest.
The New Orleans and Northeastern Railroad traverses this belt from
northeast to southwest the Gulf and Ship Island from south
to north through the center, and is building lateral branches
east and west to feed the main line.
The output of lumber
on the first 70 miles of this latter road is a million feet per
day.
It is lightered out to the ships at Gulfport, but the
United States Government has made a liberal appropriation
for dredging the harbor at Gulfport, and it is expected that
vessels drawing 20 feet of water will, in the near future, cast
their anchors in the basin at the pier near to shore.
This
will mark a neio era in the history of Mississippi.
Her millions of bales of cotton will seek foreign markets through
her own port, rather than through New Orleans, Mobile and
the East, as there will be a large saving in the cost of expor;

the

tation.

now commanding a good price and the demand
The yellow pine lumber of Misnow finding its way to every civilized country in
And when we consider the fact tliat the supply

Lumber
is

in excess of the sup])ly.

sissippi is

the world.

of standing pine is sufficient at the present rate of
tion

to last for thirty or forty years,

what a source

we can

consump-

easily imagine

it will prove to our State.
So Mr.
any wonder that our people are buoyant and
hopeful? The dark clouds which so long " lowered upon our
house " seem, indeed, to have been " buried in the deep bosom
of the ocean," " and the winter of our discontent made glorious summer."

Chairman,

of wealth

is it

MISSOURI.
F. P. Neal, of Kansas City: In 3003 there will be celebrated at St. Louis the Louisiana Purchase, and we invite
the members of this Association to visit us at that time.

have 047 banks

with an aggregate capihave .$000,000,000 of deposits. That
is not equaled by any State west of the Mississippi River.
We grow in Missouri more of the necessaries of life, and
some of the luxuries, than are produced in the same area

anywhere

in Missouri,

tal of .$00,000,000.

else in the world.

After the verdict of the country was given for sound
money in 1S06 a return of prosperity was expected by the
friends of that policy.
It was a little slow in coming, but
it did come, and to-day we are all prosperous and happy.

MONTANA. (No response.)
NEBRASKA.

a dress

pattern of beautiful prints for 2Vi to 5 cents per yard. When
the Nicaragua canal is built, and the trade of the world
revolutionized, and the (hilf of Mexico becomes the Mediterranean of the New World, and our ships laden with the
fleecy staple of the South, and the golden grain of the West,
shall find their way to Central and South America, and to
Australia and India, China and Japan, 25 millions of bales
per annum will not supply the demand but the cotton States

will the

many mills are now in process of construction.
p]ven the colored people in my State have recently organized
a cotlon mill company and subscriptions are being made to it
from many quarters of the State. There would be as much
mind, and

;

becomes us as business men to inquire into the
causes that ha\e produced such marvelous and splendid results, that we may, by reasoning from cause to effect, see what
is in store for us in the future
for of all men, the banker
needs most a horoscope by which to forecast the future.
There are several reasons for the conditions existing in
onr State, as briefly referred to above. In the first place,
it

Then farming

C. S. Miller, of

Fairmount

The gentlemen who have

prethings to the credit of their
respective States.
Now, although I am enthusiastic about
Nebraska, I fee! somewhat foreclosed in ability to suitably

ceded

me have

proclaim

its

placed

many good

merits.

Banking conditions have never been

so good in

Nebraska

as they are to-day.
I have been actively engaged in banking
in the interior of that State for sixteen years, and, as an
evidence of the condition of the banks of that locality, I will
say that two years ago we invested our money in our own
local securities at five per cent.
we loaned to our farmers
on real estate security our own money at six per cent. we
loaned to cattle feeders at seven per cent. We paid no interest on deposits.
The banks are in a most excellent condition.
Thoy have increased in cajiital and surplus reserve
largely in deposits over last year.
The average reserve of the
banks in my State on the 10th of June this year was fortyfive per cent.
Never have the banks l)een so free from irregu;

;

larities.

This year Nebraska will produce 310,000,000 bushels of

BANKERS' CONVENTION.

Ill order that you may know wliar that means, let me
you that with a car crossing the Missouri Kiver every
minute, loaded with six hundred bushels of corn, it would
take a year to move that crop, and the train would be 2,935
miJes long, or as far as from New York to San Francisco.

corn.
tell

briel

comes

to this earth she will stand with one foot

NEW HAMPSHIRE.

the islands of the sea, singing
" Rally round the flag, boys, and shouting the battle cry of

freedom."

ORE(iON.

and prosperous.

liappy

Strikes are unknown.
Regarding
the banks, there are fifty-two National banks, with capital,
surplus and deposits, June 30th of the present year, amounting to ?!31,000,000. There are 57 savings banks in the State,
\^-ith deposits of over $53,000,000.

New Hampshire has not been unmindful of her Western
and Southern cities, for she has in the past helped and is today helping with brains and capital in their development.

NEW
NEW
W.

MEXICO. (No response.)
JERSEY. (No response.)
NEW YORK.

II.

its

New

York, and the great increase in the business
of its banks and the enormous volume of its
clearing house
exchanges indicate the magnitude of the commercial and the

ing interests and industrial pursuits, and business generally
is prospering.
In Scranton, where I come from, we are going to hold a convention of the Pennsylvania Bankers' Association in October, and we would like to have you all come
there at that time.
Scranton is the center of a population

The exchanges of its ClearHouse very frequently exceed the sum of one thousand
million dollars in a single week.
But along with the city we
have the State— the Empire Stale—and between our
two great
commercial cities. New York upon the sea and Buffalo upon
the lake, we have a great watei-way and
great lines of railway affording to commerce unequaled facilities for transporalong that section there are a series of strong,

growing cities, each one of which is the center of
a thriving
trade, and each of which is well supplied
with capital to meet
the needs of the people.

have a

New York

State Bankers' Association, with

large membership,

and of great usefulness.
I believe the farming interests
of our State are perhaps
the lea.st successful, while our manufacturing
and mercantile
mterests are sharing in the general prosperity.

NORTH CAROLINA.
F. H. Free, of Winston
I bring you the cordial greetings
of the North Carolina Bankers'
Association, which has recently been in its annual convention.
While the history of
our State is grand, she has not attained
that material prosperity which many of the other States
enjoy.
look forward, however, to great prosperity in the
future, through the
development of the splendid water powers
which abound in
the mountains of the State.
:

NORTH DAKOTA.

(No

largest silk mill in the United

having a

SOUTH CAROLINA.
Brock, of Anderson We are unfortunate in not
bankers' association in our State.
We share with
:

Union

the other States of the
perity.

in the general era of pros-

Tlie low price of cotton has been a detriment to

that industry, but our people are adapting themselves to circumstances and are growing other things to take the place of
that product.
Our banks have more deposits than ever before and our manufacturing interests are increasing.

SOUTH DAKOTA.

ing

T\'e

The

there and one of the largest locomotive
works.
have knitting mills, button works and many
other industries that are all prospering and all busy.
located

financial interests of that city.

And

of the earth contribute of what they have in produce and
in
merchandise to swell the vast volume of its foreign and domestic commerce. The surplus money of our land finds

tation.

response.)

Kock, of Scranton I have no statistics to give
can only say that we have everything in Pennsylvania that every other State has in the way of manufacturyou.

States

—

(No

PENNSYLVANIA.

of about 300,000 people.

Rainey, of Kinderhook, N. Y. I suppose when a
banker hears the name New York he thinks of the city the
<ity where he has an account, or where somebody
owes him
something. The city of New York, where the ships of the
World come and go. Every part of our land and all the ends
II.

Oklahoma and the other on

P. R. Bugbee, of Hanover
New Hampshire's industries
are largely .igricultural and manufactural. Her people are

home

assure you they are all right. We are expansionists, and
we are sorry that it is not fifty-two thousand miles around
the world, so that every Oklahomian could expand according to his feelings.
We believe that when the Angel Ga-

(No

response.)

TENNESSEE.
F. O. Watts, of Nashville To say anything to you of
Tennessee would be presuming upon your intelligence.
Banking business is good in our State and our people gen:

erally are prosperous.

TEXAS.
A. P. Wooldridge, of Austin The statistics of Texas are
In cotton we produce over three million
as large as her size.
In cattle, the year book of last year shows
bales a year.
:

we have 6,500,000 head grazing upon the plains.
are progressing in every way excepting in the interest
rate, but wealth is accumulating, and with that, I presume,
Texas is the only
will come a diversification of interests.
State that has a public domain subject to the school fund.
We have $12,000,000 in the school fund. We have 28,000.000
Our population is 3,500,000 and
acres of good land unsold.
our assessed valuation $1,000,000,000.
are a good and
prosperous people. While we invite all to come to us, yet
men who are prospering where they are better not come to
Texas. There are other States as good as ours. We have
one radical defect, and that is that we do not work up into
manufactured products any of the raw materials of our
that

State.

UTAH.

(No

response.)

VERMONT.

OHIO.

find

the location.

Our harvests have been good

in late years and our farmManufactures are prosperous. We
have over 700 banks, with deposits of nearly
$270,000 000
The deposits in the banks of Ohio have grown
within the
last three years more than sixty millions
and the loans have

ers are all prosperous.

response.)

VIRGINIA.

J. J. Sullivan, of

Cleveland: What shall I say for Ohio'
Some one recently in singing the praises of this
State said
that the territory lying between the
Ohio River and Lake
Erie was the most magnificent place
prepared by God for
man's abode. Some of us who live here believe
this literally
and w.> who live in Cleveland think the nearer
one approaches
the shore of Lake Erie the more
magnificent vou will

(No

John P. Branch, of Richmond I have listened with a
great deal of pleasure to all that has been said about various
Virginia
States, but, sir, from Virginia I can go one better.
is the oldest State in the Union and Richmond is the oldest
city.
I have had experience as a merchant and as a banker
for fifty years.
We have given to the great Northwest these
States and to these cities with a lavish hand, but it gives me
pleasure to say that we have more prosperity in Virginia
have more money
to-day than we have ever had before.
than ever before, and we loan money as cheap in Virginia
as it can be obtained in any other place in the Union.
:

I invite

you one and

all to

come and

see us.

increased correspondingly.

WASHINGTON.

OKLAHOMA.
J.

W. McXeal.

of Guthrie:

much can be expected from Oklahoma.
are only six years old.
have a population of 335,000,
but we cast more votes than the State of Nevada.
raise
30,000,000 bushels of wheat, 150.000,000 of corn and 200,000
bales of cotton.
have over 100 banks, National
ritories of course not

We
We have no limit on
charging. We have five males

territorial.

G. M. P. Richards, of Spokane Mr. President and Gentlemen.
In the State of Washington business is good.
:

the youngest of the ter-

and
our rates. We just keep
to one female, and I can

WEST

VIRGINIA.

(No

response.)

WISCONSIN.
W. K. Coffin, of Eau Claire Wisconsin has 1,000 lakes
within her borders, and if they were a thousand miles apart
the}' could not be contained in the State.
:

RANKING SECTION.
WYOMING.
Van

prepare and furnish to the members of the Association at cost
price any and all blanks which are needful In connection there-

response.)

MEMORY OF EUGENE

N. B.

(No

PULLEN.

with.

The President: Gentlemen, you have heard the

Slyke, of Madison, Wis.: Mr. President, I

desire to have entered

upon the records of

tion the following minute, in

valued members

memory

this Association

this Associa-

of one of the

sure that every

most

THIRD DA

Y'S

PROCEEDINGS.

Thursday^ September

The

"The

i8gg.

The President: Gentlemen, I call to order the Third
Session of the Twenty-fifth Annual Convention of the
Anderican Banljers' Association. Our proceedings, in
accord.ance with our usual custom, will be opened with
prayer.

[Prayer was said by the Rev. Paul F. Sutphen, of the
Second Presbyterian Church.]

The President: Colonel Lowry, the Chairman of the
Committee on Nominations, wishes to make an announcement.
Robert J. Lowry, of Atlanta, Ga. The Committee on
Nominations are unable to make a full report until they
can have the names suggested from the respective

put the question.

I therefore

hall.

resolutions were unanimously adopted.

Effect of

Banks on the People's Progress."

The President: Next in order will be a paper by Col.
Myron T. Herrick, of Cleveland, on " The Effect of
Banks on the People's Progress."

mem-

ber of this Convention will feel honored by the privilege
of voting for the adoption of this minute. Mr. Pullen
was the President of this Association, and he was one of
the most untiring workers for its success. All who are in
favor of the adoption of tliis minute will express themselves in its favor by rising.
Adopted.
The Convention tlien adjourned to Thursday morning,
at 10 o'clock.

res-

Are they seconded ?
" I second them," and " Yes
[Cries of
Yes "1
They appear to be seconded from all parts of the

olutions proposed by Mr. Cannon.

ever had:

Since our last meeting the American Banliers' Association
has lost one of its most valued members, one whose presence has
always been felt for good, whose services in the Executive
Council and as President of this Association we are ever grateful for, and I desire to place upon our records the name of Eugene H. Pullen, our departed member, as one to be remembered
with great respect and his character cherished as an example
of that which we should all emulate.

The President: Gentlemen,

[Colonel Herrick's paper complete appears on pages

38 and

31)

of this

Supplement.]

Parker, of Quincy, 111.: Mr. President and gentlemen. I desire to speak a few minutes on Mr. Herrick's
topic, -Svhich is " The Effect of Banks on the People's
Progress."
In responding to the call of States yesterday I heard
one gentleman, speaking for his State in the Mississippi
E.

.7.

were unusually good, and the
banks were prosperous, and there not being very much
interest on deposits. Yesterday I dropped into Mr. Herrick's bank here casually, and I learned some facts which
we must all take home and scatter broadcast over this
Union. The Treasurer of that institution— which, by the
way, is not called a bank, but is called a Society for Savings—told me that in fifty years the deposits had
amounted to $290,000,000; and the society has paid in interest ?19,000,000, its interest payments being on an average of $3,100 a day. Its depositors are one to every
valley, say that their crops

seventy of the population.

Now my friends, coming from
there;

are not

West as I did, where
many savings banks, I think we should enthe

courage the starting of savings banks in our

cities.

Let

the most sagacious, practical business men start them
and thus forestall the endeavors of weak, impractical

men who

for speculation or peisonal profit will gather

men desired for Vice-Presidents. A great
many States liave made the suggestion, and a great
many have not. Now, if all the names are not handed
in by twelve o'clock the Committee will make the best
States of the

selection they can.

The President: The Chairman

of the Executive Counhas an announcement to make.
Alvah Trowbridge, of New York: The Executive
Council will meet promptly upon the adjournment of
this Convention to-day in the room right off the platform. It is very important that every member of the
Council should be present.
The President: Gentlemen. It was arranged yesterday that the flrst order of business this morning
would be the address of Mr. James G. Cannon, of New
York. Accordingly, I now have the pleasure of introducing to tlie Convention Mr. Cannon.

cil

Uniform Statement Blanks and Credit Department Methods."

[Mr. Cannon's paper will be found in
of this SUPPT.EMENT.]

on pages 31

full

3.3

After the reading of his paper Mr. Cannon offered
the following resolutions:
That the Secretary of

Association be and
hereby is rcrjuested to confer with the Vice-Presidents from the
various States, and prepare a uniform property statement blank
which can be used in each State of the Union by the members of
this Association, the same to be designated as the Standard
Form of the American P.ankers' Association the statement
blanks to be supplied to members for their use at cost price,
upon application at the Secretary's oflice.
Ucxutrtd, That the American Bankers' Association, in Convention assembled, approves the system of Credit Dc^partments
for banks, and that the Secretary of this Association be and
hereby Is authorized to prepare and set up in his ofTice a model
Credit Department and to furnish such information as he may
be called upon from time to time to give, to the members of the
Association, regarding the workings of the same
and also to
RpH'tlrcd,

this

;

up the savings of the people.
I hope to see the United States set the example to the
world in the utility, practicability and wisdom of savings banks, and to make itself finally the clearing house
of the world.

"What Can Be Done

to Perfect

Our Currency?"

The President: The next paper is that on " What Can
be Done to Perfect Our Currency,'' by Mr. William C.
Cormvell, President of the City National Bank of BufN. Y.
[Mr. Cornwell's paper

falo,

this

printed on pages 33 to 38 of

Supplement.]

The President: Gentlemen, Mr. A. J. Frame, of Wisconsin, will follow Mr. Corn^^'ell in some brief remarks
on the same subject.
REMAPvKS BY ANDUEVV JAY FRAME.
Christ said, a wise man builded his house upon a roclj
hut the foolish man upon the sand. When the rain descended
and the Hoods came, and the winds blew, the wise man's
house fell not, but as to the foolish man's house great was
lie fall thereof.
Is not this a perfect simile to apply to the
building up of the superstructui-e of our great credit system
upon a sound metallic currency for a foundation as against
The pages of history are
the sands of a credit currency?
I

strewn with proofs tliat when the great instrument of exchange is deranged, all trade, all industry is stricken as with
a palsy. That instrument of exchange, recognized by the
world as the solid foundation that does not totter when the
storm rages in its severest intensity, is the only foundation
for a prosperous people to rest upon, and to-day our coffers
hold one thousand million dollars of it, being the largest
stock of any nation on earth. This gold has come to us in
the natural course of trade in response to the well-known
principles of the Gresham Law and Monetary Science, as expounded by Dr. Adam Smith, Ricardo, Jevons, Sumner and
many other eminent economists, and is also clearly set fortli
in what Professor Sumner dul)s the most important document
in financial iiteraturo, "The Celebrated Bullion Report of

—

BANKERS' CONVENTION.

68
1810

—

to the

House

Commons."

These principles summed

rich countries will have all the coin they need
providing no impolitic act of legislation interferes to force it',
out of circulation by the injection of inferior currencies.
When the coin in any country exceeds the effectual de-

That

'J.

mand, no vigilance

Government can prevent

its

exporta-

tion.

fjucstion

Bankers are thoroughly familiar with the operation of
the Gresham Law, but to give force and round out my arguwhich
ir.ent I venture to use a former illustration of mine
the case now.
" skim milk," and
will call gold " cream," and silver
" water."
Each nation has a large reservoir
paper money
containing these liquids. With easy and quick transportation these reservoirs are naturally connected by so-called

.soems to

fit

canals.

inject into our reservoir cream,

skim milk or

water to overflow the natural level, cream alone flows abroad,
as that is the only recognized international money.
Britain, after a campaign as long and as bitter as ours
over the operation of the Gresham Law and the expulsion of
lier gold by the injection of too many bank notes into her
circulation, unequivocally adopted the gold standard in 1816.

integrity of that standard has been maintained with a
commands the confidence of the whole world to

fidelity that

the extent that

the world's Clearing House.
the gold standard, the balance of

London to-day

When

Britain adopted
trade was against her, and her total wealth was but 2,4(X)
million pounds sterling, with an enormous debt of 31^2 per
To-day she
cent, of that sum, and much of it held abroad.
lias assets of 10,000 millions of pounds, with only 6% per

and practically all held at home. The world
pays tribute to her in a sum approximating 400 millions of
dollars annually for interest and dividends on the investment of British funds abroad. Were it not for this fact,
coupled with her great manufacturing industries (as population there ou the present scale of living has outrun subsistence), her power and prestige would be gone.
The United States from 1HC>'[ to 1S7!>, under the stress of
apparent necessity, overflowed her reservoir with water and
In 1879,
at once both the cream and skim-railk flowed out.
our inferior currency being sufficiently removed, cream began
to flow back again to our reservoir, confidence returned, and
the wheels of commerce began to move at an accelerated
j)ace.
We prospered for years till the insidious annual injections of skim-milk into the reservoir brought distrust to
our people and another panic resulted. Benjamin Franklin
described our condition when he defined the result of employing quack doctors: " I was well, I wanted to be better, I took
physic, and died."
Since 18!).'* we stopped doping and the
patient seems to be able to stand without hitching.
Like
David llarum's horse, conditions since 'J).3 have been a little
balky.
The unlimited skim-milk mint seems to have closed
and along with it the soup houses. The mills are again wide
open and the wheels of commerce are moving with alacrity.
The hum of buyers and sellers is abroad in the land. Employers are seeking labor instead of labor seeking employment. Money is cheaper than ever. Strikes are more frequent, but is it not a fact that in countries where labor commands a pittance a day for its service strikes are unknown
and in other countries as prosperity advances and the scale
of wages rise, then strikes become more freouent? Labor in
the United States to-day is better housed, better clothed and
better fed than in any age of the world's history. An automatic inflow of cream seems to have proved a panacea for
return of confidence and prosperity. And yet the wail of the
populist, pessimist and politician can be heard abroad in the
land. It is a sad calamity to the country that they are not in
office and the other fellow out.
Although all the quack doctrines and theories in the decalogue of human experience that
promise short cuts to universal ease have exploded, the
noisome pestilence of the weather cock i)olitician and the
sih-er tongued orator still reverberates throughout the land.
Woe! Woe! Woe! Everything that is, is wrong! Give
us the offices and we will right all wrongs.
cent, of debt,

THE QUANTITY THEORY.
As
money

there

loud clamor as to the quantity theory of

affecting prices, I wish to make a passing practical
reference thereto. Muihall clearly shows in his Dictionary of
Statistics that the world's quantity of money per head has
doubled in the past century. In the same time agricultural
products have risen 13 per cent, in jirice, and manufactured

money

These stub-

increases prices also.

rary conditions.
Again, the per capita crrculation
In Italy to-day is about
In Great Britain

.$10.00 per

In Germany
In France

Government to settle the quality
and the needs of commerce will settle the
of money,

quantity.

increasing the

born facts are world proof and not confined to local or tempo-

It is the province of

;j.

The

products declined 43 per cent. The average price of all products being materially lower instead of higher, as it would be

17.00
19.00
35.00

head
"

Comparatively how much does the quantity theory of
jnoney affect prices of products used in common in those
countries? Practically none, except cost of duties and transl)ortation.

Again, the per capita circulation in the United States,
according to the United States Statistical Abstract, was
about $5 per head in 1800 .$18 in 1873, the date of the socalled crime of the century, and now is $25, and yet general
prices of products are lower. This makes three more horses
that stand without hitching, so I'll turn the whole stable over
to the theorists.
;

WHAT

OUR PRESENT CIRCULATION, AND,
WHAT IS THE REMEDY?

NOT PERFECT,

Our circulation to-day, not counting certificates representing gold or silver deposits, approximates:
In
In
In
In

Silver coin and bullion

$100 Millions.
200
"
G50

Gold coin and bullion

1,000

U. S. notes over gold in Treasury
National hank notes

Total circulation

$1,950

Surely our reservoir lias a generous supply of cream in
it.
How can we keep it there?
1st. By an unequivocal enactment into our laws making
the World's standard ours, so that no " free silver without
waiting for any other nation on earth " President or Secretary dares disobey its mandates.
2nd. Enact a law in line with President McKinley's suggestion that a United States note once redeemed in gold shall
not again be reissued, except in exchange for a gold dollar.
The question of the retirement of the Legal Tenders
.seems to be a debatable one with many good people in this
country, but I am clearly of the opinion that they are in
error in their conclusions, as the history of the progressive
nations of the earth as well as our own experience proves.
Why does Germany not issue a Government currency to save
borrowing money? Why do not Britain with a bonded debt
three times ours, and France with a like debt six times ours,
issue currency to save interest on their debts?
Because these old nations have proved by practical experience that serious trouble is an almost certain result of
political bodies trying to regulate the quantity of money in
any country.
3rd. Compel all National banks to redeem their notes in
gold coin or gold certificates.
4th. The VioO millions of silver should be kept at a parity
with gold, and it is all the bulky inferior currency this country should be asked to maintain. Give silver certificates their
proper place in denominations under .$10, and cancel all other
note issues under that sum.
5th. As we have no great central bank, like those of Europe, for the benefit of its people the United States should
transfer to an issue and redemption division all its special
deposits of gold and silver on which certificates are issued,
and allow any one to deposit gold coin or bullion in this division in any amount not less than .$1,000, and receive therefor
an equal amount of gold certificates of $10 and over.
fiOI.D

CERTIFICATE.S.

although less bulky than silver, is subject to serious
inconvenience in handling, higher express charges and abraAccording to the New York Journal of Commerce, 25
sion.
per cent, of a deposit in the U. S. Sub-Treasury was returned
lately because of short weight. The question has been raised
that the Government should not be responsible as a warelioiisemau for gold.
If this is sound roasoning, then in our
charitable efforts to do something for silver, we should not
be responsible for 400 millions of silver which takes 16 times
as much space as an equal amount of gold. The question has
been raised that we should pay it out over the counters. East
It has been
of the Rockies that is easier said than done.
repeatedly tried, since confidence returned that our money
was as good as gold, but the people prefer a paper representative.
In view of these facts we should issue gold certificates
on a deposit of either coin or bullion and make them legal
(iold,

BANKERS' CONVENTION.
which they are not now. While this country is being
creamy gold, let us use it as a basis for the issue
of legal tender in unlimited quantities. Not to make provitender,

flooded with

largest possible use to serve as the best currency
It has of late been
people can have is unpardonable.

sion for

any

its

kicked about like a football. Nobody wanted it. Country
banks, asking their correspondents to send currency that they
Whereas
did want, often received gold that they did not.

Gold Certificates would make

all smile.

that Secretary

It is cause for congratulation

Gage has

reversed a former decision, and has resumed the issue of gold
Since this reversal a month ago the certificates
have increased from 32 millions to 72 millions, thus relieving
the over-burdened banks, and proving the soundness of his

certificates.

course.

The banks of England and France issue legal tender
notes practically to an unlimited amount with coin reserves,
and these rich countries are full of the yellow metal, and inferior currency is no nightmare to disturb their slumbers.
In these days of the greatest production of gold in the world's
history give the people of the United States the same opportunities and soon the channels of our circulation will be permeated with gold certificates, thus building up a solid metallic
foundation for the superstructure of general credit. If we
refuse to make a place for it. no vigilance of Government can
prevent its exportation.
As a conclusive proof that the trend of all European
banks is toward a metallic reserve for practically all note
issues, and that they are gradually eliminating the small
amounts of asset or credit currency now allowed, I respectL'Economiste European "
of Oct. 14tli, by Prof. Edmund Thery (or to Bankers' Magazine, N. y., for December. 180S).
He declares that all European banks of circulation
fully refer

you

article in "

In 1883 h.nd a gold reserve of.
"
"

silver "

total coin reserve of

.20 per cent, of circulation.

"
.

.45

" 1897 they had a gold reserve of. 57
"
"
silver
17
"

Total reserve of coin

The

gold coin increasing from 700 million dollars to 1,700
millions in 14 years. Further he says, " In all sound money
countries the bank note is in course of becoming a simple
cold certificate redeemable on demand."
That. I affirm, is
true currency refoi-m.

Let us follow in their footsteps and
the unquestioned confidence of the world for our
monetary system.

command

Some may

question our ability to retain gold enough to
keep the foundation intact.
It is not necessary that we
should be gold producers to do so.
Dr. Adam Smith says

"that in 1700 Spain and Portugal next to Poland were the
most beggarly countries in Europe, notwithstanding they
were the greatest producers of gold and silver." Witness the
decline of the State of Nevada and contrast it with the perennial founiain.s of wonderful prosperity still developing in
the great Mississippi Valley, which will continue till the end
of time.

Dr. Smith gives a pat illustration, to wit: "Money, like
wine, must always be scarce with those who have neither
the wherewithal to buy nor the credit to borrow it. Those

who have

either will seldom be in want of either the money
or the wine which they have occasion for, and a country
that has wherewithal to buy gold or silver will never be in
want of those metals." I am strongly impres.sed that the
United States has the wherewithal to buy all the gold and
silver we need for a basis for our circulating medium.
If
some of the poor sections of our country are short on circulation, is it not because they are also short on collateral, or

wherewithal to buy

it?

ASSET CURKEXCY.
have not referred to the issue of currency based on a
on assets because I thought that scheme practically
dead. If it is not, in my judgment it ought to be.
I iiave been from the very first opposed to the Baltimore
plan of issuing currency by banks secured upon a first lien
on their general assets. I have given the matter careful consideration, have studied the different monetary systems of
the enlightened nations of the earth, and after .37 years of
practical banking experience I unhesitatingly declare that
the proposition to give to our thousands of banks, large and
small, in city and country, authority to issue currency, secured l)y a first lien on assets, is unsound and has not a jmraliel on earth, the Canadian system not excepted.
I know I
I

first lien

far from being alone in my views on this subject. The
vigorous and telling arguments of Comptroller Dawes, in his
report, confirm it. Correspondence and personal contact with
high Government officials, eminent bankers and even mem-

Monetary Reform Commission strengthens my
The measure I call populistic, with only one
safety valve, the Government supervision of the banks. But
that is not adequate to prevent distrust and disaster. The
bers of the

convictions.

advocates of asset currency are continually quoting Canadian,
Scotch, English, French, German and other foreign systems,
as well as systems in the United States, to prove their arguments. What are the facts? Let us reason together a little.
The Sound Currency Red Book is a strong advocate of asset
currency and labors to prove parallelisms. In refuting its
arguments, 1 quote from its own pages. Under the head of
"The World's Bank Note Systems," by L. Carroll Root,
pages 189 to 204, 1896 issue, we find the following facts,
which facts are corroborated by the " Report of the Monetary
Commission," pages 277 to 308, under the head of " Instances
of

Bank Notes Based on Commercial

Assets."

GREAT BRITAIN.

The Bank

England issues £10,800,000 of notes on a
same amount of Government securities.
It
40 million pounds sterling in notes outstanding
of

deposit of the

has 30 to
constantly in addition, but every note has its value in gold
behind it. The large private and chartered banks of England, Scotland and Ireland in 1844 and 1845 were limited
to the amount of their uncovered notes to banks then doing
liusiness, and 70 per cent, of the right of issue of any of these
banks going out of business since that date has reverted to
the Bank of England.
Since 1844 this has reduced the maximum uncovered issues £4,000,000 and added £2,800,000 to
the Bank of England issues.
Of late the whole amount of
asset currency issued by all the big lOG issuing banks of
England, Scotland and Ireland has been approximately the
insignificant sum of six million pounds sterling or about onehalf of the maximum allowed, and all the rest of their circulaWhat is
tion has Government securities or gold behind it.
Unlimited liability of every bank stockholder
the secret?
for every note in circulation.
The people there have not forgotten that those words " Unlimited liability " cost a £1,000
stockholder in the great City of Glasgow Bank with its 131
branches (which failed in 1878 for seventy milliou dollars)
his whole fortune of more than a million pounds sterling,
as well as ruining thousands of families in the south of Scotland.
The clear intent of Britain is to entirely eliminate
bank note currency from her circulation, excepting only that
of the Bank of England.

FRANCE.

Bank of France has had the sole right of
Although able men have claimed this issue
as asset currency, I cannot understand the force of their reaSince 1848 the

issue in France.

soning in the face of the facts.

The Bank of France of late years has had approximately
$700,000,000 of circulating notes outstanding, and has kept
about 90 per cent, of its outstanding notes in coin in its
vaults.
That great reserve of coin naturally inspires confiThe balance of 10 per cent, asset currency even is
dence.
practically covered by loans to the Government, so the bank
could pay every dollar of its nol;es by selling its Government
paper without calling a dollar of its loans. The Bank of
France is more a bank of issue than a bank of deposit, as its
issues have averaged five times its deposits for the past five
jears.

GERMANY.

The Imperial

maximum
ijO

Reichsbank of Germany

issue of uncoxered notes to the

allowed a
of about

amount

million dollars, but docs not exercise the privilege.

ten years past

For

has had a metallic reserve of over 90 per
cent, on an average circulation of about 240 million dollars.
The otlier 32 large banks are allowed to issue asset circulation to the extent of the comparatively insignificant sum of
22 million dollars, any excess being covered by treasury notes
(which notes are fully covered by gold in the (Government
war chesty, notes of other banks or coin. On page 192, Root
says "The National or (Imperial) Bank is the center of the
system, with the evident intent on the part of the Government ultimately to traiisl'cr to it the " hole right of issue."
it

CANADA.
Canada has 38 banks with over GO
and 28 millions

millions of dollars of

They issue currency
based on a 5 per cent, deposit and first lien on assets.
These large banks are very conservatively managed,
largely by able British or Scotch financiers who know the
lienally of bad banking.
.\o bank with less than a half

capital

of surplus.

—

BANKERS' CONVENTION.

million dollars of subscnbetl capital is allowed to issue cur(Our proposition is to grant the rights to banks havreucy.

ing as low as $25,000 capital.)
The following countries have only one bank of issue, to

wit

Reserves required on
Capital.

The Bank

of Austria

mil. dols.

note issued.
40 per cent, coin and
(iO per cent, quick assets.

Bank

of Netherlands.!} 4-10 mil. dols.

Bank

Nat.

10 mil.

Belgium

Norway

Bank

3 1-3 mil.

Denmark. 7%

dols.

mil. dols.

per cent, coin on
notes and deposits.
33 V2 per cent, coin on
notes and deposits.
per cent, as to
r»0
notes in coin.
37% per cent, as to
notes in coin and l.W
per cent, assets be-

3:31/2

sides.

Bank

Imperial

of Russia. 20 mil. dols.

Over 100 per

cent.

The latter bank held July 1st, 1898, nearly 600 million
dollars gold (the largest single holding in the world, see U.
S. mint report, 189S, page 394) and for 15 years has constantly been accumulating

Russia announced

it.

June,

There are
1898, it would pay all its demand notes in gold.
three large banks in Italy and three in Greece.
Sweden has a large State bank and some private banks
'that issue currency based on a deposit of mortgages, etc., in

the much more rigid rules that governed the systems and
larger liability of the directors for their acts, than are the
regulations governing the present National Bank system.
I have the best of reasons for asserting that the rules now
governing the National Banking system are about as rigid

as the bankers will stand and maintain the system.
Banking systems are like the prohibition question.
When you
draw the lines too closely, the personal liberty temperate
drinker, who ordinarily votes to regulate the traffic, kicks
traces and then the bars all come down.
I affirm that our

present National Banking system is the best and safest all
around system ever devised, and a happy medium between
two extremes of too loose and too rigid banking laws.
I ask with all seriousness is there a parallel case on earth
to the present proposal giving the right to issue rurrency by
as many of the 3,600 independent National Banks in the
United States, covering big city and small .$25,000 country
banks as well as the thousands of others that may adopt
the National Currency Act, to the full amount of their capital
stock, secured by a 5 per cent, cash deposit, and a first lien on
assets?
I can find none.
T affirm it is simply a discarded
unsuccessful experiment of older nations.
As a prudent proposition, w ho would deposit a sum equal
to the capital of any bank asking it, even if you had a first
lien on the bank's assets?
Yet this in fact is the proposition
presented in the asset currency plan.

public custody.

DEPOSITORS LOSE.

SW'itzerland has lately settled a reformation of its banking system.
Is it not clear from the foregoing that the great centralized -institutions of

European nations are assuming the

issu-

ing functions of the currency, with a metallic foundation as
heretofore referred to in Prof. Thery's article?

What about former New England Banking. The Suffolk
system, The banks of Indiana and Louisiana and several
others quoted by the advocates of the Monetary Commission
plan? Simply this: On pages 302, 3 and 4 of the Report of
the Monetary Commission, under the head of New England
Bank Currency, we find that " in some States an unlimited
liability for both notes and deposits was enforced upon the
otlicers in case of mismanagement.
In some instances the
stockholders w'ere liable to the amount of their stock for the
ultimate payment of the notes and in Rhode Island they
were subject to unlimited liability." In the Sound Currency
Red Book heretofore referred to, in an article by Horace
White, pages 207 to 210, we find under the head of " State
Bank of Indiana " " On all applications for loans
;

—

above
a majority vote of five-sevenths of the board was necessary, and this must be entered on the minutes with the names
•$500,

of the directors so voting.
Directors were individually liable
for losses resulting from infraction of the law, unless they
had voted against the same and caused their vote to be entered on the minutes, and had notified the Governor of the

State of such infraction forthwith, and had published their
dissent in the nearest newspaper.
Any absent director be

deemed

.should

make

have concurred in the action of the board, unless he
his dissent known in like manner within six
months." This is oxteam and not 20th century progress.
"

LOUISIANA BANK ACT OF 1842."

find

1st.

Bank's)

specie reserve equal to one-third of all its
the public.

(the

liabilities to

2nd. The other two-thirds of its liabilities to be represented by commercial paper having not more than 90 days
to run.

NOTE ISSUES NOT A NECESSAKY FUNCTION OF BANKS.
By the time the Government bonds are all retired, and
bank currency entirely except for the 10 or 20 per cent, hereinafter
provided to cover the elastic problem, thus leaving all National, State and Private Banks on the same footing, and
wiping out the deep seated prejudice against National Banks.
By far a large majority of the banks of this country, as well
as of Europe, are doing business without the issue of currency, conclusively proving that it is not necessary for us
this is not at all unlikely, discontinue the issue of

3rd. All commercial paper to be paid at maturity, and
not paid, or if an extension were asked for, the account of
the party to be closed and his name to be sent to the other
banks as a delinquent.
4th. All

banks to be examined by a board of State

officers

quarterly or oftener.
5th. Bank directors to be individually liable for all loans
or investments made in violation of the law, unless they could
show they had voted against the same if present, etc.

The National Bank

rule for reserves is 6 per cent, cash
with reserve agents; total, 15 per cent, for
country banks and 25 per cent, cash for city banks. In a
comparative sense how much 90-day commercial paper do
country banks hold, or even city banks, that is paid when

and 9 per

cent,

due?
further made to the Massachusetts and the
systems, but for lack of time I refer any one
desiring further light to the pages in question.

Reference

Bank

I will

ing cause

simply say that I have no doubt that the underlywhy the systems were abandoned was because of

Long

before the bonds of the Governhave all the coin
it needs as a basis for all circulation, and the subject of
credit currency will be a bugbear of the past.
to cling to that idea.

ment

Suffolk

The forcible argument of Comptroller Dawes that asset
currency in case of failure of banks tends to reduce the dividends to depositors as compared with the present system
with a bond deposit, is perfectly clear to my mind.
Banks in trouble always strain every point to keep from
suspending by parting with quick assets at command to raise
cash, and in case of failure under the proposed law there are
no Government bonds on deposit to secure outstanding notes,
therefore the note holders having the first lien take the cream
of the assets and leave the dregs to the unfortunate depositors, under their second lien.
Under the bond deposit rule
the bonds can neither be spouted nor sold, therefore they take
care of the circulation outstanding and leave a handsome
surplus in addition to divide among the depositors along with
the pi'oceeds of the general assets.
Is it not clear under such
circumstances that distrust is sure to seize upon the great
army of depositors when financial troubles are pending, because
of the fact that in case of failure their claims are a second
lien on assets and their dividends will be abridged, and
coupled vvith the unreasoning demands of the note holder because of credit currency, great fear will fall upon all and
wdder panic is sure to follow?
The test of systems comes when confidence is shaken, not
when the financial skies are clear. When credit is shaken,
credit currency adds fuel to the fire, while no man loses sleep
with a U. S. Government bond or gold behind his Bank bills.

will be paid

this great country will

ELASTICITY.

Much has

been said of late about an Elastic Currency in
the fall crops.
In the earlier days of my
banking experience that plea had force, but of late has practically lost it.
In 1898 the country had bountiful crops and
they were moved with perfect ease, with very little assistance from our good Eastern friends or jar to interest rates.
We must not forget that Western banks, in competition with
Eastern, loaned $3,000,000 lately to Montreal.
That knotty Elastic problem like unequal taxation
has troubled the financiers and economists for ages, and it is
not satisfactorily solved yet.
Keep your credit good, and
with quick and easy transportation the world will lend to
you in need.
As to having cash enough to fill demands in
times of panic, that time will never come. Periodical panics
cannot be prevented, because in the language of the inimitable
Dr. Depew " The fool killer sleepeth not at all times."
order to

move

—

I'.ANKING
EMKKGKNCV CIKCULATION.
If

we should

issue credit currency at all to cover emer-

by Comptroller Dawes is eminently the soundest, and if a right to issue currency equal to
10 or 20 per cent, of a bank's capital is allowed, it should be
subject to a tax of Vt> of 1 per cent, per month while it is outstanding and no bank should keep out such circulation to
-exceed three months in any year without the consent of the
Comptroller of the Currency. This tax should be held as a
reserve fund to cover any losses on account of failures of
banks to redeem in full. Or, instead of this plan, legalize
•Clearing House Certificates and give tiiem form for general
use iu case of a panic, and the best business talent will ooou
-see them canceled after their temporary work is done.
gencies, the plan proposed

BKA>'CJI BANlvS.

simply say. If any
it to a conclusion,
"Nvith the feeling in this country against monopolies, the result
will be the doom of the country banker's individualism and
the downfall of the party responsible for the law.
IN'o man can charge me with bad motives for opposing
.asset currency, for if banks make more money under the proposed system the bank of which I am president will share
I oppose the plans because I consider them
in the beneOts.
.acts of inflation under unsafe restrictions, the result of which
is sure to be financial disaster.
The whole matter is now with our statesmen. Will they
rise 10 the dignity of the occasion by giving us True Currency Reform instead of giving the toper another drink and
calling that reform?
Let us not take a single step backward in an attempt to
Jay a foundation on the shifting sands of a ckedit currency.
Let us not be fainthearted that the noble army of gold
Democrats who joined so manfully with us on principle in
saving the country from repudiation and dishonor, will abandon that principle, when the wonderful object lessons in
prosperity prove conclusively the correctness of their position.
Let us write the world's standard upon our statute books
and any party attempting to repeal it will ride to a worse
defeat in '90. Let us press forward without flinching, disregarding the political trimmers and lay such a sure metallic
foundation for our future greatness that we shall soon see the
World's financial center planted in New York instead of London, where it has been since the adoption by Great Britain
of the Gold Standard in 181G.
When this is accomplished the United States will be supreme in Agriculture, Manufacturing, Mining, Internal
Transportation, Banking Power, Wealth, Annual Income
.and Humanitarianism as shown by the late war.
Great
Britain will alone then exceed us in Foreign Commerce and
>>hipping, which supremacy the indomitable Yankee is sure
to win before the 20th century has long run its course.

brand! banks in the U.

political party fatliers the plan

S. I will

and carries

"How Can

the United States Become the Clearing
House of the World?"
The President: The next pai>er is bj' William R.
Trigg, of Richmond, Va., which will be followed by some
remarks by General A. C. Barnes, of New York.
[Mr. Trigg's paper will be found on pages 40 to 42
of this Sui-PI.tMENT.]
The President: Gentlemen, 1 introduce General Alfred
Barnes, of New York.
A. C. Barnes, of New York City: Mr. President, fair
ladies, my lords and gentlemen of finance. I have been
asked to discuss Mr. Trigg's able paper. If discussion
means disagreement, there will be no discussion. I agree
with all that is in it. I will indorse every note he has
littered and take care of it at maturity, if he does not.
With regard to the balance of trade, the interesting
inquiry which he raised must be settled in committee, or

some other way, since such questions cannot be invesmoment. 1 have no doubt that every lady

tigated in a

here present will symjiatliize with him, if she keeps a
bank account, in the inciuiry. Where has that balance
gone? It is just as pertinent as What becomes of all the
pins? So that will have to be referred to a committee.
In listening to Mr. Trigg— who, you know, is the constructor of the famous buttle ship Te.\as which so valiantly carried our flag in the battle off Santiago— it
seemed as if we had been walking tlic (luarterdeck of that
splendid ship with her gallant shipwright, worthy descendant, as he is, of Noah, the great founder of his

SECTION.

As a modern mechanic, however, he understands
modern artillery, and, without closing his eyes or evincing any fear of a recoil, Mr. Trigg has pulled the trigger and tired off his gun of enthusiastic prediction. It
only remains for me to swab out the barrel, as it were,
and get it ready for another discharge.
We are called upon to consider the arguments that
craft.

make for establishing a clearing house of the world in
our own country. This is simply a matter of production.
Money is a token, the servant of more substantial things.
In the very early days, Avhen a herdsman wanted to sell
and did not want to take it to market he took with
him instead a little square disk of leather, on which the

his ox

sketched. This he exchanged
in the market for other commodities, and the new holder
of the currency eventually claimed the ox, or he passed
So it came
it along more probably for further barter.

picture of an ox

was rudely

about that whoever held a quantity of these disks in his
possession became a herdsman or a lierdsman by deputy,
lie Avas not a financier anj- more than he was u merchant. He was dealing in a token which represents intrinsic values. So now coin and notes and all the other
evidences of value are simply wheat and cotton and live
stock and clothing, and whatever it is that man requires
for his daily needs in a concrete form. Wherever these

money will alwaj^s center. Money will come
here to \my what we have, and, if we have more of
everything than any other country, then the money center will be right here in this great national department
store of ours, where Ave as the cashiers sit like spiders
Avatching the goods, Avhich are the flies, falling into our
clutches in one direction and the cash falling in another

things are

—and

the Avhole business.
They move these things as they do the overhead trolleys that you see in the department stores. This subject
of trolleys is, perhaps, a delicate subject to bring up
here in Cleveland. One of our members, Avho is a most
there

Whatever may be the
Cleveland, no doubt, is
claims of overgroAvn Chicago,
the me-trolley-polis of the West."
A man on the sidewalk Avas murmuring to himself:
abandoned punster, said that

HoAV much better it is to ride in a trolley car than it is
and as I came along he accosted me with: " I
perceive. Sir, you are a stranger. I regret to say that
"

to walk,"

my finances are in a very dubious condition oAving to the
recent strike, otherAvise I would be happy to take yoti
oA'er to our club and bloAv you off, but as it is. I will put
you on one of our cars and take you out
MoAV you up."

Brooklyn and

Well, it is a pity that beautiful Cleveland, and other
important cities of our countrj', should at times be paralyzed and be devastated, as it were, by the acts of socalled organized labor. Those poor fellows A\'ho bear the
dignified title of Knights of Labor are really crusaders
for a cause Avhich they believe to be a sacred one— the
great uniAersal and eternal cause of human rights, as
imderstood by them and by their leaders. The individuals, gentlemen, are not as individuals either unreasonable or vicious or cruel, but iu masses they seem to lose
all reasoning faculty and all qualities of mercy in their
mad zeal to avenge imaginary oppression. It Avas of a
mob far more offensiA'e than that Avhich assembled in
these streets that One has said in divine pity, "Father,
forgive them, they know not Avhat they do."
NoAV, these Avorthy fellow citizens of ours, the braAvu
and muscle of the land, are the people who are going to
help us to make America the clearing house of the
Avorld. And mighty allies they avIU be. Y'ou cannot get
along Avithout them. By a better education, by more pa-

and more generosity, by line upon line and precept upon precept, Ave must make them understand their
true relations to capital. They must be made to see that
iu paralyzing capital they are undermining their own
tience

they makeany kind of business unprofitable
they are stabbing that benevolent giant, General Good.
Sometimes he is only crij)pled by a flesh Avound, sometimes he is stricken in a vital part, and then in his down-

I)rosperity. If

;
:

BANKERS' CONVENTION.

he cruslies friend and foe -whom he would otherwise
gladly serve
rerhaps the motorman on the trolley car
may claim that iuasmucli as he is neither a producer nor
a distributer of goods, nothing worse than inconvenience
can follow his action in a strike. The recent history of

Nominatior.s ot Oificers.

fall

Cleveland tells a different story. On the contrary, he
brings suffering and loss to thousands by his refusal to
perform his allotted part in the great hive of inter-dependent lives. The first to suffer are those who are dearest to him, his own family; then laborers and other departments of labor cannot get to their work and their
wages; then people wlio liave money to spend cannot get
about to trade: the sliop keepers, who are boycotted if
they deal witli trolley passengers, lose their business,
and the small stockholders in the railroads miss their
dividends upon which they are dependent, for not all the
stockholders by any means are the creatures of wealth,
as they are so often depicted to us by demagogues. So
all of these classes, and many more, are wounded and
crippled when the mutiuoiis trolleyman sulks in his tent.
Such instances as these, my friends, postpone the fruition of our hopes that America may become the clearinghouse of the world; but the prophet of prosperity who
preceded me is not too sanguine it is coming. The dawn
Rosy visaged Aurora
is already above the horizon.
curtains of the night, and, mounted on
plucks back the
the car of day, laden with corn and wine, she comes,
whilst Apollo, scattering gold all over the earth, drives
his steeds before the coming.

—

The President: Gentlemen

This
finishes the addresses arranged by the Council for your
programme. It is to bo regretted that the limitations
placed upon our time have prevented the Chair from
of the Convention.

inviting further discussion.
I

notice Ave have omitted Unfinished Business,

was

come up

first

to-day.

unfinished business as there

which

therefore call for such
may be, or for any reports
I

that are yet to be presented.

EXPRESS COMPAMES AND EICENSE FEES.
AY.

the Committee that we consider the ruling unfair and
unjust against one class of business men and in favor
of another class engaged in the same line of business.

the opinion of your Committee that the ruling of
the Commissioner should be set aside: that efforts be
promptly made to secure a reversal of the ruling either
by application to the Attorney-General or other high
aiitliority. and. if it shall be found impossible to corIt is

way, your Coiumittee recommend an appeal to every bank and banker who is a
member of this Association to communicate with the
Member of Congress from his district, and also with the
Senator from his State, in order to effect such change in
the law as Avill prevent a continuance of the present

rect this injustice in this

condition.

Your Committee further recommend that a standing
committe<« be appointed with such i-easonable power
and authority as may be necessary to carry out these
recommendations and to remedy this evil.
The President: Gentlemen, you have heard the report of the Committee, .aid the recommendations they
have made.
M. W. O'Brien, of .Michigan; I move that the report
be adopted, and that the present committee be continued as the standing committee, with ample power
to carry out their own recommendations, and to secure, if practicable, a reversal of tlie decision of the
Commissioner of Internal Revenue.
Alvah Trowbridge, of New York: I second that
motion.

The motion was

carried.

in order.

Robert

Lowry, of Atlanta, Ga.: Mr. President,
J.
and gentlemen. At a meeting of the Delegates
from the State Associations the following gentlemen
were nominated for members of the Executive Council: Stewart G. Nelson, New York City; J. D. Powers,
Owensboro, Ky.; Daniel Annan, Cumberland, Md.; T.
B. Stevens, Blair, Neb.; C. T. Lindsay, South Bend,
ladies

Ind.

Committee on Nominations beg leave

Yoiu"

to report

as follows:

For President Walker Hill, St. Louis;, Mo.
For Vice-President Alvah Trowbridge, New York.
:

respectfully suggest that the Executive Council elect

its Chairman, and we hereby nominate
him as a member thereof.
Wo also nominate for members of the Executive Council
George F. Orde, Chicago, 111. Caldwell Hardy, Norfolk, Va.

ilyrcn T. Herrick as

;

.T.

W. Whiting.

Mobile, Ala.

;

II.

.T.

Ingerwessen, Clinton,

Iowa.

For Vice I'residents of the several States:

— E. Bock, MoArizona —
R. Hazeltine,
Tucson.
Arkansas— G. T. Sparks,
Fort Smith.
California —
G. Murphy,
San Francisco.
Colorado—
A. Thatcher,
Denver.
Connecticut — B. G. Byran,
Alabama

bile.

]M.

Waterbury.
Delaware-— Benjamin Neal,
Wilmington.
District of Columbia
J.
W. Johnson, Washington.

—

— John T. DisAugustine.
muth,
H. Reynolds,
Georgia —
Florida

St.

Rome.
Hayes, of Detroit, Alich.: On behalf of the
Committee appointed by the Convention yesterday to
consider the ruling of the Commissioner of Internal
Itevenue in exempting the express companies from the
payment of a license fee, I beg to report on behalf of
F.

Committee on Nominations

Tlie report of the

— B. Thomas,
Montana —John W. Moore,
Nebraska — E. R. Kearney, Laurel.
New Hampshire— P. R.
Bugbee, Hanover.
New
—F. B. Adams,
Newark.
New Mexico — M. Brown,
Missouri
Albany.

.Jersey

Deming.

New York— David CromWhite Plains.
North Carolina

well,

—

Wadsworth,

— E.
Grand Park.
Indiana — M.

Ohio

— Jacob

Frick,

Wor-

cester.

Oklahoma— J. M. McNeil,
(iuthrie.

Oregon— H. W.

—

H.
Idaho
Boise City.

Wiley.

Corbett,

Portland.

— Frank L.
Ithode Island — Wm. Goddard. Providence.
A,
South Carolina —
Pennsylvania

Illinois

Curtis,

Dan-

Carter,

Phillips, Scranton.

ville.

—

John
Indian Territory
Lacy, Ardmore.
E.
H. Hexford,
Iowa
Cherokee.
L.
Meyer,
Kansas E.
Hutchinson.
Kentucky C. G. Smallhouse, Bowling Green.
Louisiana G. W. Boulton, Alexander.

—
—

Brock, Anderson.
South Dakota— C. C. Bennett.

—

Tennessee .John
Chattanooga.

on.

— E.

Texas

Utah— W.

W. Fax-

Rodman.Waco,
Adams, Og-

den.

— Kenneth
Clark,
Paul.
Mississippi — R. F. Leon-

— Edward A. DaR. Trjgg,
Virginia— W.
Richmond.
Washington — H. C. Henry,
Seattle.
R. Van
West Virginia —
Wagoner, Wheeling.
Wisconsin — W. H. Leonard, Milwaukee.
Wyoming — W. J.Thomas,
Buffalo.
W. Dennison,
Hawaii —

ard, Natchez.

Honolulu.

Maine— .John Cassidy, Bangor.

Maryland

— C.

Hagei-stown.

Massachusetts
Grant, Boston.

Lane,

—John

Michigan— M. W. O'Brien,
Detroit.

Minnesota
St.

Vermont

vis,

Bethel.

Finlay, of Pennsylvania: I

move

that the re-

port of the committee be receiviMl, and that the President and Vice-President be voted for separately; the

Vice-Presidents of the different States together, that is,
in one ballot, and then that the members of the Executive Council be voted for together.
Mr. Rainey, of New York: I second that motion.

The motion was

carried.

Mr. W^ooldridge, of Texas: If there are no opposing
nominations I move that the Secretary be instructed to

BANKING SECTION.
cast the ballot of the Conveutiou for the nominations
before the liouse in the order in which they are to be
voted for, as just provided.
Mr. Brown, of North Carolina: I second that motion.
In so doing permit me to say that South Carolina is extremely sratitic-d at the nomination of Mr. Hill for President.

The President: Gentlemen, you have heard the motion, which is that the Secretary cast the unanimous
ballot of the Convention for President.
that motion will say aye; opposed, no.

All in favor of

elected President of this Association for the ensuing
year.

suppose Mr. Wooldridge's motion
covers the mode of electing the Vice-President as well.
Therefore the Secretary will cast the ballot of the
Convention for the election of Mr. Trowbridge as VicePresident:

President.

have the honor to report that the
ballot for Vice-President has been cast and Mr. Alvah

The Secretary:

Trowbridge, of New York, is elected.
A similar motion was made in regard to the

elec-

and the members of the Exwhich motions respectively were carecutive Council,
ried and the gentlemen named declared duly elected.
tion of the Vice-Presidents

THANKS TO MUNICIPAL AUTHORITIES.
Mr. Wooldridge:
lieve,

The President: Mr. Trowbridge, gentlemen of the Asand ladies. I cannot say that I was totally unaware of this beautiful present, for I luifortunately ran
sociation

across

any delegate

come the longest distance, I behere, and am perhaps the most

obliged delegate to this Convention. I feel that we cannot leave this city Avithout expressing our grateful acknowledgments for our hospitable treatment while here.
I have never seen a more beautiful city, where the substantial is more gracefully combined with the artistic,
and where along with public life there is so much exemplified of beautiful home life, and I do not believe
that any one of us has ever experienced a more generous
hospitality anywhere. I therefore move that the thanks

of this Convention be tendered by a rising vote to the
municipal authorities for the freedom of the city which
they have so generously conferred; to the bankers and
to the representatives of the Clearing House, for the
hospitable entertainment given us; to Col. Myron T.
Herrick and his wife for their lavish and courteous entertainment, and to the Press for their very full and impartial reports of our proceedings.
Mr. Thatcher, of Denver, Col.: I second that motion.
The President: I am sure every person in the house
-will rise to vote in the affirmative on this motion.
The motion Avas carried.

LOVING CIP TO PRESIDENT.
Mr. Trowbridge: Mr. President. You know that as a
general principle bankers are careful about their socalled valuables.

They

rari>ly distribute

this

them

oxccjit for

value received. The principle, I think, ought to
hold good, and I believe does hold good in the present
instance, with the exception that the A'alue presented at
this time has no fair relation to the value received. The
American Bankers' Association has had the benefit of
your services on its Executive Council as its Vice-President and as its President. Tn y«>ars gone by we liave had
many men eminent for various qualities which go to make
the good and successful banker in the President's chair,
and I feel free to say for the members of this Association
that in no c.ise. at no time, has the President's chair b:>en
filled with more satisfaction to the Association or with
more benefit to the material interests of the country at
large than during the year now just closed.
On behalf of the Executive Council, who have more
intimately benefited l)y your wise counsel and your genial

loving cup.

It is not

l)eg you to accept this beautiful
I
very large, but it has two handles.

to the platform,

and

been thinking what

liave

to this presentation.

brain, for

lias

fear,

seemed urterly impossible for me

to ex-

thoughts in fitting words. I accepted this office at your hands, feeling that it came to me undeservedly. 1 came here with hesitation to preside over tliis,
the largest Convention in the history of the Association.
I desire to thank you all for tlie patience you have shown
me, and the kind assistance you have given me when I
have been just about tangled up in parliamentary procedure, in Avhich I am a novice. This beautiful gift the
Chairman of the Executive Council says is too small.
Well, it looks to me as though it was constructed in proportion to the size of your President, a most beautiful
thing. I can assure you that Avhenever any member of
this xVssociation visits me at my home this cup shall be
filled to overflowing, and when it is not put to such use
it will remain fllletl with tender recollections and delightful thoughts of my connections with this Convention,
and, although it is not needed to remind me of my obligations to the Association, yet it will ever incite my
warm interest in your affaii's and progress.
press

MINUTE TO

N. B.

VAN SLYKE.

J. R. Van Wagener, of New York: Before this Convention adjourns I think we ought to place on our minutes something to indicate this Convention as the anniversary of tlie silver wedding of our organization. There
is one member of this Association who is pi'esent at this
Convention avuo offered the resolution which resulted in
the permanent organization of this Association, and I
regard it as a privilege to mention this fact, as I was present at the meeting which initiated this Association. I

refer to Mr. N. B.

move, you,

Van

Slyke, Madison, Wis.

that a minute be entered upon our
records in recognition of this occasion and of the services
rendered by Mr. Van Slyke in starting this organization,
as he did when he offered a resolution in that little meeting twenty-five years ago. which resulted in the creation of the American Bankers' Association.
1

Sir,

The President:
Van Slyke.

should

all

lilce

hear from Mr.

Secretary Branch: He was here a few moments ago,
but I think he has left the hall.
The President: I am sorry he is not present. However, we will reach him with this token of our appreciation. All in favor of adopting tlie minute which has been
suggested will say aye; opposed, no.
Adopted.

-so-called

i)oaring in presiding,

my way

morning on

I might say in anhowever, that the
acoustics of this hall have affected the workings of my

swer

Secretary Branch: Mr. President, I have the honor
to report that the ballot has been cast as directed for
Walker Hill for President.
The President: I declare Walker Hill regularly

The

I
hope. Sir, that you will ;il\v;iys have a friend to
take hold of the other handle in case you do not feel very
thirsty. It gives me very great pleasure to have been the
messenger to bring you this testimonial of the very high
regard in which you are held by the Council, especially
as well as by the Association as a body.

and

since then

Carried.

THE NEW OFFICERS.
(ientlemen.
President,

Walker

pleased to present to you our new
Mr. Hill has b(>en associated

Hill.

very onerous duties, nnd has l)een my faithon the affairs of this Association. You do not appreciate, gentlemen, how much devolves upon us. We meet once a year, and then think
until the next Convention; in the meantime, the Chairman of your Executive Council does all the work. But
Hill has ])een such a good Vice-President that I know he
will be an excellent President. Walker Hill is one of the
products of our country; a boy in Virginia, a man and a
good citizen, and a good Ijanker, too. in Missouri, he
went to Colorado last year— and. I must sa.v, in that
liigli altitude he got a little frisky for a time.
However,
the only vice that comes from this Association was put
upon him, nnd he was ])ut under probation for a year,

witli

ful assistant in carrying

BANKERS' CONVENTION.

and now he comos to Ohio, only staj-s here four days,
and naturally ho becomes President of the Association.
I understand, though, that before we came here he had
the indorsement of the President of the Union National
Bank of Cleveland, and that was enough. I declare
Walker Hill President of this Association, and I pin upon
him this badge that 1 have worn for the past year.
And now. Alvah Trowbridge, I place this pin which I
have taken from my successor upon your manly, noble
bosom. Trowbridge is all right, gentlemen. He has
served three years as Chairman of the Executive Council.
He deserved promotion before this. Indeed, I fell
into his place at Detroit through the circumstance that
there was at that time a President and a Vice-President
from one city. Last year his modesty overcame him. and
It is only proper that this
Hill took advantage of it.
honor should come to him now. Gentlemen, I present to
you Mr. Alvah Trowbridge, your Vice-President, and in

me an

line.

honor of standing before the American Bankers' Association and thanking them, as I do now, for favors con-

President Hill:

Gentlemen of the

American Bankers'

I have always heard that it was necessary
come from Ohio to get an office, but I find that I had
come to Ohio to get an office.
The American Bankers' Association is the strongest
the world, and, gentlemen, you have conferred upon

honor, the greatest in your gift. I hope you will
never feel that you have made a mistake in my ability tO'
fill the office.
T gratefully accept the honor, knowing
my shortcomings, and I will always look back to this day
and this hour as one of the sweetest memories of my life.

were made for "Trowbridge, Trowbridge !"]
Vice-President Trowbridge: Mr. President, ladies and'
gentlemen. In one of the New England States a friend
of mine was traveling on foot along a country road, and
came to a family burying ground. He had a little curiosity about such things, and he took out his memorandum book, thinking possibly he would find some curious
inscription on some monument. He got over the fence
and found there was only one monument in the graveyard, a gray granite shaft, and on one side was the name
of the deceased, and on the other side was this: " I ex[Calls

pected

it,

but not so soon."

half as thankful as

am: and,

think that

man was

besides, he never

not

had the

Association.

ferred.

President Hill: What is the further pleasui-e of theUnless there is objection, gentlemen, I declare the Twenty-fifth Convention of the American Bankers' Association adjoxirned '<i)ir die.

Convention?

Trust Company Section
American Bankers^ Association,
Third Annual Meeting. Held

in the City of Cleveland,

September 6th. 1899.

INDEX TO TRUST COMPANY PROCEEDINGS.
Origin of Trust Company in
Pennsylvania Trust Company
Investment

Trust Funds

T/ie Oiigin

New

York
Movement

Pagts 75

Pages 79

fa.z s 76 to

76
78
80

New

Fr.^ncis

Address

Welcome

to Address

fitting,

recites that certain persons " associated as a

company

under the name of the Farmers' Fire Insurance and
Loan Company, as well for the purpose of accommodating the citizens of the State residing in the country with
loans on the security of their property (which cannot
now be obtained without great difliculty) as to insure
their buildings and effects, and tliose of other persons,
from loss by tire, and also for such other useful purposes as are hereafter specified, have prayed the Legislature for a charter of incorporation to be located in

the city of New York, which it is reasonable to grant."
'•
As well for the purpose of accommodating the citizens
of the State residing in the country with loans on the
security of their property, which cannot now be obtained
without great diiiiculty " How delicately are the
!

would-be borrower from out of town and his troubles
referred to in thi.s act of incorporation, which perliaps
sets the mark for the kindness and consideration which
so characterize the trust companies of this
dealings with the farmers of Wall Street.

day

in their

To the company then chartered, with an authorized capital of $1,500,000, was given power to loan upon farms, houses,
factories or real estate, to hold stocks or funded debts
as investments of moneys not otherwise loaned; to insure all kinds of property against loss or damage by
tire and to grant annuities; but the purchase or sale of
United States or State securities, or of goods, wares or
merchandise, Avas expressly prohibited, as well as receiving deposits or discounting notes, bonds, due bills,
drafts or bills of exchange, or the exercise of any banking privilege whatever. Within one year the corporation
Avas required to loan at least ^150,000

upon

real estate

within the State, but outside of the southern district,
and before there should be any increase of the .$500,000
of capital with wliicli it was to begin l)usiness it must
have loaned on bond and mortgage or like landed securities williout tlio limit'! of tlie city and county of
New York at least one-half of the capital previously
subscribed and paid. A later act of the same year gave
the company jiower to accept and execute all lawful
trusts created by deed or devise, the beginniiig of the
extensive powers of the present trust companies. This

Pages 82

Conipa?iy in the State

York.

Bangs, of

Mr. Cliairman, that I should
city, but tlie Adirondack woods, to
sketch hi part the origin of the trust company in the
State of New Yorli, for it was in tlie careful regard for
the needs of the rural resident that the first of the New
York trust companies had its beginning. In the courtly
language of early days, an act of the Legislature of 1822
It

Pages 81
Pages 81

Detailed Proceedings

and Development of the Trust
of

seems to be
come, not from a

New York

City.

company, now the Farmers' Loan and Trust Company, was followed by the New York Life Insurance
and Trust Company, chartered in 1830; the United
States, chartered in 1853, and the Union, chartered in
18G4. By 1884 the number had increased to sixteen, all
acting under special charters. In 1887 came the " Trust
Companies Law," a general law providing for the organization of trust companies with the powers which,
by a long series of enactments, had been given to the
companies previously chartered. Within the succeeding five years thirteen new companies were formed
under tliis act, and one company, with an old special
charter, began active business. In 1892, in the revision
of tlie corporation laws of the State, the provisions of
the act of 1887, with some improvements, were incorporated in the new Banking law, and by later amendments trust companies were placed upon an equality
with State and National banks in respect to loans and
first

discounts. From 1802 until July of the present year
twenty-two new companies have begun business, of
which eleven liave been organized since January, 1898.
Fifty-two companies reported to the Superintendent of
Banks on July 1st, 1899
Three others have since
opened their doors, five are in process of organization
and two more are in the hands of their promoters. Of

the fifty-five

now

business twenty-nine are in the
city of New York. I mean in the old city. In these
days of consolidations and combinations, of trusts commercial and political, the old city of New York has been
in

Borough of Manhattan. It is the Brooklynite
Avho has become the New Yorker, and on his travels, in
a bold hand, writes in full the name of his reorganized
lost in the

and adopted city, wliile the Manhattanite, with an overabundant tax rate, shrinkingly sets himself down as
from " N. Y.," as if doubtful of his right to use even
those modest initials. Brooklyn, though, adds nine companies to

New

Y'^ork's list, wliile seventeen are scattered
remainder of the State.
Banking companies are prompt to succumb to unsound or doubtful management or lack of public support, but they increase rapidly in number and in assets
as they serve the public use. But three trust companies

through

th(!

are upon the records of the Banking Department as
failed. In the quarter century from July, 1874,
to July, 1899, the number of trust companies has been
increased by forty-three, and their resources have grown
from .$57,000,000 to .$722,000,000. Within the same period

having

two hundred and
ganized.

State banks have been orhave withdrawn through voluu-

fifteen

Fiighty-eiglit

BANKERS' CONVENTION.

tary liquidation, failure or transfer to the national sys-

banking.

tem; the total number has increased from eighty-one to

to chance, to popular

from $108,000,000 to .'fiaSI, 000,000. The assets of 1874 were doubled in ]S8!), tripled in 1898 and multiplied by three and
a hall" in 1S99. The assets of the trust companies in
1874 were doubled in 1882. tripled in 188.5, quadrupled

The

two liundred and

in 1889,

fold in

eight,

and

their gross assets

grew to fivefold in 1892. sixfold
1898 and twelvefold in 1899. Of

in 1895, seven-

their earnings

1898 they distributed less than a fifth to their stockliolders in dividends, paid considerably more than a third
to their depositors as interest, and carried nearly ifG.OOO,000 to the account of surplus. That is the development
of the trust company. It has established itself in the
in

banking system of the State as founded upon wise principles and as rendering to its customers a service suIt is the development of
Ijerior in qualitj- and extent.

T/ie

Origin

and Growth of

Its

phenomenal success is not to be ascribed
whim, nor to ease of management.

legal requirement of large capital has brought to

and the active
and varied interests

administration the close attention

its

participation of

men

of importance

and valuable experience, and has compelled its location
in those active and thriving districts where money is
liandled by the cart load and call loans are paid when
called. While in their resources the banks and trust
companies have both been gainers, the trust companies
have led in the race. They have passed the point wherethey are apt to be kept doAvn by regulations intended not
to regulate, but to impede them. Will not the proper development of both banks and trust companies lead to
the assimilation of their functions, their regulations and.
their methods of business, if not to their consolidation?

Company Movement in

the Trust

Penitsylvania.
By Charles K. Zug, Trust

Officer,

Commonwealth

In studying the origin and growth of the trust comin Tennsylvania, a striking fact to be
noted is the association that has existed in that State
between the tnist and life insurance business. Nor is
such an association to be wondered at. The transaction
of the insurance business by corporations was preceded
by individual underwriting, just as the corporate management of trusts has been preceded by individual trustees. When, however, it is once recognized that the best
provision against the uncertainties of life is in corporate
insurance, an<} that the best method of providing an estate Avith which one's obligations can be met after death
is by a life insurance policy issued by a corporation, the
suggestion is but natural that perhaps that estate would
be best administered by a corporate trustee. Nor caji it
be considered strange if the officers and directors of a
life insurance company should find a proper expansion
of their business in caring for tiie estate which the wise
foretliought of procuring a policy in their company had

pany movement

provided.
it is

company; and

for over thirty years the trust

business in Pennsylvania
ance companies.

was conducted by

company

life insur-

While Pennsylvania can probably claim the honor of
having incorporated the first trust company, yet for the

we must

look to the far East. The Quaker
eighteenth and early part of the ninemerchant of the
teenth centuries was accustomed, like his English ancestors, to find in coffee houses the social intercourse
which is to-day furnished by the clubs of our larger
Will's famous institution in the ancestral city on
cities.
the banks of the Thames found its counterpart in the
Merchants' Coffee House in the younger city on the
banks of the Delaware, and it was there that the subscriptions were taken to the corporation which eventually
became the first and is to-day the leading trust company
in the State. Articles of association were signed in 1810
for the formation of a company, the business of which its
original idea

founders determined should be clearly indicated by its
name. " Tlie rcniisylvania Company for Insurances on
Appliciiliou was at
Lives and (iruntinji Annuities."
once made to rhe State Legislature for a charter, but the

was refused. The corporate management of
was yet in its infancy. Charters of incorpora-

application

were then, and for more than sixty years thereafter,
granted by special act of the Legislature and not under
any general law. And the Legislature was at this time
tion

and Trust Company, Philadelphia, Pa.

slow to grant these privileges. The application was,,
however, renewed and a charter obtained on March 10th,
1812.

The Pennsylvania Company entered at once upon^
the successful prosecution of the life insurance and annuity business. In 1829 an amendment to its charter

was asked and obtained, granting the company fuller
powers in the choice of securities for investment, but
not enlarging the functions of the corporation. In 1830,
however, the otficers and directors of the company found
a new subject for discussion at their coffee house, and
from these discussiims was eventually evolved a most
important expansion of the business and policy of the
company. This time the suggestion came not from England, but from India. The change in the policy of the
company, the reasons for it and the steps taken for its
accomplislunent may be best described in the words of
the company's historian, Mr. Harrison S. Morris:
" The great success of what in India at this time were
called

that in Pennsylvania the trust company
movement originated in a successful life insurance company; the first grant of trust powers to a corporation
was by amendment to the charter of that life insurance

Certain

business

Title Insurance

Agency Houses was

organized

transact

drawing the atThese were concerns

irresistibly

tention of financiers toward them.

business

for

trustees

indi-

moneys on deposit and to administer
and the advancement of the Pennsylvania Comits chosen work induced its oflicers to desire an

viduals, to receive
estates,

pany

new

... A

meeting of
the directors was called to consider the subject on February 4, 1830, with the result that a committee was appointed to go over the .ground and give its views of theadvisability of entering on the receipt of money from
expansion in this

direction.

persons, and, in consideration thereof, carrying out or
executing such trusts as the persons giving the money

should designate.'

was in harmony with the
a month later, pronounced
itself in favor of the venture, whereupon the President
and Solicitor of the company were requested to consult
"

The committee

selected

inclination of the Board, and,

Mr. Horace Binney and Mr. John Sergeant, the most
eminent counselors of their day, upon the right of the
company to conduct such a business under the terms of
the original charter and its single supplement.
" After a thorough investigation on the part of these
gentlemen they joined in giving an opinion favorable
to the new enterprise, and tlie directors accordingly
laid the subject before the stockholders at tlieir annual
meeting held on .lanunry 11, 1831, witli a recoiumendalion thai the company should engage in the new busiThe stockholders were enness of accepting trusts.
accord with this, and at the next meeting of the
tirely in
Board a resolution was passed in the following words:
" Resolved, That the Board will enter into the busi'

TRUST COMPANY SECTION.
ness of trusts agreeably to the resolution passed at a
meeting of the stockholders held ou the eleventh day of
January last, and that the President, in conjunction
with Horace Binney and John Sergeant, and C. S. Miller, bo requested to prepare the forms of documents that
may be required for conducting the business.'
" But it was not the fashion of our grandfathers to
enter upon an untrodden field even after so much deliberation as tliis. There seems to have been cause for
hesitation and delay. Perhaps, as has been suggested,
there were rumors of financial trouble among the parent

concerns in India; or, more likely still, as is indicated
by the subsequent action of the Board, the right of the
company to embark in the new order of business without enlarged powere from the Legislature was, in spite
of exalted legal advice, held in doubt; for, at an adjourned meeting of the Board held on November 3, 1832,
the promising venture was, for the time, put off by a
that it is inexpedient for the
I'esolution to the effect
company to go into the trust business, and that the sub'

ject be indefinitely postponed.'
" This was a sore blow to some of the

progress-

management, and they did not fail
a renewal of the project through the three

ive elements of the
to agitate for

years which followed.

Their repeated efforts failed of
1835, when a more direct step
taken in the appointment of a committee to mewas
morialize the Legislature for a supplement to the charter
of the company authorizing the establishment of the
long debated branch.
" On February 25, 1836, the most important advance
made in the affairs of the company since its organization
success until

November

consummated, when the Governor of the
whose honor the corporation was named approved a supplement clothing the Pennsylvania Company with authority to enter into the business of execut-

was

finally

State

ing trusts."

The same year witnessed the grant

of similar

powers

Girard Life Insuranct>, Annuity and Trust ComThe powers given to these original trust com-

to the

pany.
panies were as follows:
To accept and execute trusts of every description.
To be appointed trustee, assignee, guardian, committee

and

receiver.

receive

moneys

or other property, real or personal,

to accumulate the interest
and pay the same.
As trustee, assignee, etc.. they were not required to
give bond, the company's capital and assets being taken
in

trust,

deposit;

thereon, or to allow

as the security required by law.
Both charters contained a provision that any court
appointing the company to any trust position may from

time to time appoint a suitable person to investigate the
affairs

and management of said company, who

shall re-

port ' the manner in which its investments are made,
his opinion of the ability and integrity with which the
affairs of the company are conducted, of the prudence
and safety of its investments and the security afforded
to those by whom its engagements are held; the expense
of every investigation so made shall be defrayed by the
said company."

The Pennsylvania Company's charter also provided
that the company should pay a reasonable rate of interest upon sums not less than •'JIOO collected in its capacity as trustee, assignee, guardian, committee or receiver, and that it should accumulate the surplus income
of any minor's estate by adding interest annually on the
whole as a new principal.
In 1S53 the Pennsylvania Company was authorized
to act as executor and administrator, and in 1855 the

same power was conferred upon the Girard Company.
These two companies (^ivided the trust company busiin Pennsylvania for many years.
In 1856 the
agents of foreign insurance, annuity and trust companies were authorized on certain conditions to do business in that State, but the privilege to do a trust business granted by this act has never been taken advantage of by anyjforeign trust company. It was not until

ness

1805, twenty-nine years after the incorporation of the

two

companies, that they found other competitors.
In that year a charter was granted to the
Provident Company, and then followed in quick succession tlio Fidelity in 1866, the United Security in 1868,
the I'liiladelphia in 1869, the Northern and Guarantee in
1871, all in Philadelphia, while in 1870 the Safe Deposit
Company of Pittsburg was granted full trust powers by
a supplement to its charter. In fact, the Legislatures
in the years from 1865 to 1873 were kept busy granting
trust cornpany charters, the statutes of these years containing thirty or more such charters in addition to the
seven above mentioned. The powers granted in these
charters varied considerably, ranging from a full description of the powers the company could exercise as
trustee to the briefest possible expression of the power
in the words " To receive and execute trusts." None of
these companies engaged in the trust business, and of
the number only five are now known by the writer to be
in existence, and they are operating under their other
charter powers.
This period is not only remarkable for the number of
trust company charters, but also in this— that it marks
the separation of the trust company and life insurance
business, the charters of the Fidelity Company and
most of the other companies containing no life insurance
privileges. The charter of the Fidelity Company is also
peculiar in this— that it is the first charter containing
authority " To make insurance for the fidelity of persons
holding places of responsibility and trust." which power
gave to the company its name, Fidelity-Insurance Trust
and Safe Deposit Company. This marks the beginning
of the siu-ety business, which has since constituted an
important: department in most Pennsylvania trust comoriginal

panies.

Thus stood

tiie

trust

company business

Pennsylva-

nia at the time of the adoption of the Constitution of
That Constitution contained a provision that
1873.
"

The General Assembly

cial

shall not pass any local or spelaw creating corporations, or amending, renewing

or extending the charters thereof."

Immediately after the adoption of this Constitution
the State Legislature passed the General Corporation
act of 1874. and it is remarkable to note that, although
this act is very comprehensive, providing for so many
different kinds of corporations that one would think the
ground had been fully covered, it contains no reference
to trust companies. This omission was not due to any
ho.stility to the trust company idea.
It had stood the
test for nearly forty years and had proved beneficial.
Prior to the adoption of the new Constitution a charter
for such a company could be had for the asking. The
companies in existence Avere steadily increasing in prosperity. None had failed. It was about this time that
the Pennsylvania and Girard companies abandoned the
life insurance and annuity business and confined themselves solely to their trust powers.

was given by the

Special attention

Constitutional Convention to the prac-

companies when considerwhich they adopted, prohibiting the Legis-

tice of the Philadelphia trust

ing the clause

from authorizing the investment of trust funds
the bonds or stock of private corporations. And yet,
notwithstanding all this, there is no reference to trust
companies to be found in the minutes of the Legislature
lature
in

of 1874.

The

was no one sufeven ask that provision should be
made for their incorporation. Philadelphia, with its
eight companies, was fully supplied, and a number of
charters had been granted for similar companies in other
cities.
They, however, had not gained any foothold.
Outside of the city of Philadelphia the lawyer was still
the executor and trustee, and it is just possible that in
the absence of any demand for trust companies on
the part of his constituents he considered it unnecessary to provide them. As the President of one of our
oldest Philadelphia comi)anies has suggested, it is probable that "The only reason that trust companies were
real reason for this is that there

ficiently interested to

BANKERS' CONVENTION.

not provided for by the General Corporation act of 1874
was that our lawyer friends forgot us."
There was consequently no provision in Pennsylvania for the incorporation of trust companies until in
ISSl, when by an amendment to the General Corporation
act title insurance companies >vcre given the following
powers:
To receive and hold on deposit and in trust real and
pereonal property, including notes, bonds, obligations of

companies and corporations, and
same, but not engage in banking.

States, individuals,

purchase and

sell

insure fidelity of persons holding places of responsibility and trust, and receive on deposit jewelry,

bonds and valuable jiroperty of every de-

plate, stocic.

scription.

act as assignee, receivers, guardians, executors,

administratoi-s

and

to execute trusts of every descrip-

tion.

To
etc.,

act as agent for issuing certificates of stock, bonds,

and

and manage sinking funds.
where one or more
faithful performance of any trust, office,

sole surety in all cases

are required for
duty, action or engagement.

By subsequent amendments passed in 1889 and 1895
such companies are further empowered:
To purchase and sell real estate and take charge of
same.
To act as surety for the faithful performance of contracts.

To act as sole surety for any National, State and
County or :Municipal officer.
To become surety for fidelity of any clerk or employee.

To become surety

for

payment

damages

for lands

taken for public use.

To become surety in court proceedings.
To receive deposits of money or other personal
and issue

prop-

their obligations therefor; to invest their

funds iu and purchase^ real and personal securities, and
to loan inouej- on real and personal securities.
It is further provided that courts may order money
paid Into court deposited with such companies and executors, trustees,

etc.,

may

deposit any bonds, stocks,

securities or other valuables with such

companies for

safe keeping.

In order to obtain these powers it is required that the
companj- shall have a paid up capital of .$125,000, and
this capital is made bj^ the act the security for the

performance by the company of its duties.
Further, the courts may, in their discretion, authorize
an investigation of the affairs of such companies at the
company's expense, and all trust companies are subject
to an annual examinaliou l)y the State Banking Department, both as to the condition of the company's assets
faithful

and as

to the condition of its trust funds.

must keep
funds and investments separate and apart from
the assets of the comi»anies, and all investments made
by the said companies as fiduciaries shall be so designated as that the trust to which such investments shall
belong shall be clearly knoAvn.
The mere enumeration of these extensive powers
proves the confidence of tlie citizens of Pennsylvania in
the trust company idea. T'nder this legislation trust
companies have grown riii)i(liy in number and in imThey are no longer to b(> found iu Philadelportance.
phia only, nor is their influence limited to the larger
The idea is now so popular that the last report
cities.
of the State Commissioner of Banking shows that such
companies are to be found in over twenty different
It is

]89(i

there

were eighty-nine

In capital, surplus, undivided profits and in deposits
the trust companies not only exceed the State banks,
btit in all

these items they show a more rapid increase.
In 1898 the capital of the trust companies was four
times that of the State banks, their surplus was twice
as great, their undivided profits seven times as great and

more than double in amount.
In Philadelphia there are thirty-nine companies with
trust powers, of which all but seven are engaged in doing
distinctly a trust business.
Over .$25,000,000 are invested in theii- capital stock and they have deposits exceeding ,$100,000,000. By way of contrast, there are in
the same city thirty-three national banks, with $18,G25,their deposits

000 in capital and deposits of .$110,197,000.
No better idea can be given of the influence and power
of the Pennsylvania trust companies than by stating
that in 1898

to receive

To become

erty

panies in the State.

banks and ninety-two trust companies.

further provided that said companies

all trust

counties of the State. The same report shows that in
number of companies, amount of capital stock and
amount of deposits the trust companies exceed the
banks operating under State charters, and that they
are growing with greater rapidity. In 1892 there were
eighty- four

State

banks and seventy-two trust com-

Theu- capita! was
'i'heir surplus was
Their undivided profits
Their deposits

?36,689, 490.00
12, 26f, 966.99
10,924,594.80
123,850.804.17

while their trust funds, Avhich are separate and apart
from all otlier assets, reached the enormous total of
$406,744,427.94.

That the I'ennsylvania companies deserve the confidence reposed in them cannot be questioned. Notwithstanding their large and varied powers, they have been
and conservatively managed that their success
has been reinarkable. It is true that a few- companies
have gone into liquidation and a few have failed. These
failures have, however, been confined to the younger
companies, and until within the past two years I believe
it could truly be said that not a dollar of trust funds
had ever been lost when in the hands of a Pennsylvania
trust company. In 1897, however, a trust company did
fail, involving such a loss.
This loss may, however, be
traced to a special cause. In Pennsylvania trust companies are expressly prohibited from engaging in the
business of banking.
They have not, therefore, the
power to discount paper. There have been in consequence a few instances in Philadelphia where the same
people have organized a trust company under State law
and a National bank under the United States law and
engaged In business, the two companies having the same
so safely

management, occupj'ing the same building and working
in aid of each other, the trust

the bank both

its

own and

company depositing with

its trust

cash balances.

This

was found to be an advantageous arrangement for a
number of years. But recently several such institutions
have

failed,

and

every instance the failure has been

and bank. The State Commissioner of
Banking, iu his report for 1898, referring to a recent
failure of such a trust company, says:
' The intimate connection also existing
between the
Chestnut Street National Bank and the Chestnut Street
Trust and Saving Fund Company rendered it most difficult to keep these two institutions separate and distinct,
and inasmuch as I had no power to examine the bank,
it being a Federal institution, it was practically impossible to obtain knowledge of its inherent weakness,
of both compajiy

wliicli in

" In

the end pulled

my judgment

down

the trust companj-.
the Legislature should absolutely

company and a National bank occupysame room or even being upon the same floor of
any building. The ease with which securities can be
transferred from one institution to the other, unless they
are both examined at the same time by different officers,
prohibit a trust
ing the

recommendation."
day the connection of
trust companies with National banks in Pennsylvania
may be curtailed. But in all other respects they seem
to have before them only continued growth and prosgives point,
It is

lieritj'.

think, to this

possible that at an early

TRUST COMPANY SECTION.

Investment of Trust
By John

VV.

Barr,

authority in trustopsliii) has well said
investment of tfust funds is one of the most

important duties of a trustee, both as respects the
est of the

cestiiiti

que trust and his

own

inter-

security."

no duty which devolves upon a trust
company that is fraught with greater difficulties, and
where the duty, if unwisely performed, is more disastrous to the reputation and prosperity of the trustee.
With the liberal discretion allowed trustees, and with
the phenomenal growth and commanding influence of
trust companies, aided by the present prosperity of the
country, there never existed a broader field for investment, with the consequent opportunity for either unwise
or prudent choice.
Trusts are of early English origin. From the time of
In fact, there

Henry VII. until within recent years classes of investment were jealously limited. With the growth of trusteeships in the United States a more liberal rule has
prevailed. At present in many of the States there is no
statutory restriction upon trust investments, and in the
absence of such statutory restrictions or fixed rules of
equity courts, they are left to the integrity and sound
discretion of the trustee.

The

greatest ditflculties, there-

as also the greatest opportunities, exist where
neither the instrument creating the trust nor the law
of the State give specific directions regarding the investment of trust funds. If the instrument creating the
fore,

trust gives directions for investment,

these directions

follOAved. If the instrument creating the trust
gives no directions as to the mode of investment, the
trustee should be governed by the laws of the State or
In the
the rules of court in which it is executed.

must be

absence of such directions, laws or rules of court the
must be governed by diligence, intelligence,
sound judgment and good faith. Such duties required
of a trustee are best performed by a trust company organized with a staff of vigilant, faithful and competent
trustee

Among

selection of a trustee

of the first importance.

the thoughts that enter into the

some period

mind

of nearly

be he of large or of
every man, at
modest estate, none give greater anxiety than tlie question, " To whom shall I intrust my estate, that a safe
and regular income may be secured for my family or
those dependent upon me ? " Or when, by reason of increasing cares, failing health or advancing years, men
find it burdensotne to manage their own affairs, they
look for some person or eomp.iny in whose integrity,
ability and sound judgment they may safely intrust
in life,

and

classified.

trustee having qualified,

duty is to caretogether the estate and within a reasonable
fully gather
time to invest it properly and to yield a fair income.
It rarely occurs that an entire estate when delivered
its first

The weeding out
is satisfactorily invested.
A majority of men have
process must bo invoked.
among their papers evidence of property that do no
credit to their judgment. And many a man, did he but

to a trustee

know how soon
strangers' eyes,

his safety box would be opened to
would piomptly destroy or otherwise

dispose of them.

man may

use his property according
investments made by him are some
and
evidence that he had confidence in the investment. The
better rule, however, is to continue the investment only
when the trustee itself would have been justified in makIt is true that a

making investments a trustee should be watchful
be converted improperly into personalty or

lest realty

personalty into realty.

Formerly Government and first mortgage real estate
bonds were almost exclusively the form of investment.
And it is true that there was a time when Government,
State, County and Municipal bonds were issued in sufficient amounts to meet the demands of investors. Such
is not now the case.
The field has necessarily become
enlarged.

making such investments many circumstances are
be considered. Among others, what are the special
needs of the particular trust, for what period is it to
exist, what is the value of the estate, in what is it at
In

present invested,
tion affect
to other

it,

how

means

how
is

of revenue.

sometimes boldness

The

does the question of local taxa-

the beneficiary situated with regard
is

in other affairs of life,

required, prudence always.

different classes for investment open to trustees

without other guides than soimd discretion and good
faith may be said to include:
Stock in certain corporations.
Improved Real Estate and Real Estate Securities.
Government and Municipal bonds.
Other classes of bonds.
Investments by trustees in corporate stock have
almost universally been avoided. It is only in recent
years that courts of last resort have approved investin

standing.

bank and
While it

trust
is

company stocks

undoubted

true that certain classes of regu-

paying stories not overcapitalized and issued
such companies as are not engaged in trade have
by
])roven a safe and profitable form of investment, the
safe rule is for a trustee not to make such investments
without the proper direction or consent of the- benelar dividend

ficiary.

REAL ESTATE A^T) REAL ESTATE SECURITIES.

The most satisfactory form of real property investment is in well located city property under ground lease
and at a fair rental. Under
such conditions, with a clear title, with substantial
buildings erected tliereon by the lessee, and a lease embracing the usual conditions and providing for the
prompt payment of insurance, taxes and assessment,
and at the expiration of the lease with equitable provisions for the disposition of the improvements, the
owner of the land is assured a fair and permanent income.
In such investments the lessee, not the trustee, bears
the cares and annoyances. The brunt of losses from
vacancies, from increase of taxes and insurance falls
upon the lessee. At the expiration of the lease, after
having received a fair return on the investment, the
trustee is in a position either to demand a full price
for the land or to purchase the improvements at no more
than their value. Investments of this class are not often
to be had.
Investments of trust funds in well improved, cenfor a long period of years,

their estates for investment.

The

Neither should he involve them in speculation.
In times of prosperity he should prepare for adversity.
I'anics Avill surely follow.
The funds should be deposited in a strong bank. The account should indicate
the particular trust, separated from all other trust accounts. The trustee's books should set forth clearly the
investments and complete means of identification. The
securities should be deposited in vaults, properly marked
trials.

ment

officials.

The

I'linds.

Vice-President Fidelity Trust and Safety Vault Company, Louisville, Ky.

Jr.,

t'liiiiu'iu

that " the

to his pleasure,

ing sucli investment.
The greater the trustee's experience and opportunity
for the handling of funds the more cautious does he
become. He must not invest in notes secured by personal security, however solvent. He must not invest
the funds in trade. He must not invest them in indus-

trally located,

income i)roducing

real estate in

commu-

nities where taxation is not oppressive have for generations been accepted as a favorite form of investment
by many cautious men.

BANKERS' CONVENTION.

Such investuieuts are undoubtedly desirable

many

There

are,

however, under some conditions, such ob-

jections as practically prohibit this class of investment.
As, whore the estate is of limited value and regular

must be made for repairs, assessments,
etc.
Or where tliere is difliculty iu purchasing such
property at the e.\act amount seeking investment. Or
where the loss of rent for a few months cannot be borne
by the beneficiary.
o.xpenditures

Investments in laud or vendors' lien notes should be
made only after the most careful' investigation of the
title,

of the location of the property, its value

and

pro-

notes secured by well located
business property have proven by experience to be one
of the most desirable class of investment securities,
and at the same time one of the most difficult to procure.
ductiveness.

I'lior lien

Insurance, investment and trust companies have in
the past made large advances on farm lands, but these
have not always proven satisfactory, due, in part, to
the difficulties in preventing the lands from deterioi-ating and in keeping informed as to their condition, cultivation, value and prompt payment of taxes. One of
tlie most serious obstacles encountered is to obtain an
impartial, reliable valuation on such lands. With the
uncertainty of valuations for assessment purposes, with
the constant inclination of friends and neighbors to place
fictitious value on lands, and with the want of sufficient
acquaintance with the situation by persons residing at a
distance, an investor must indeed be cautious.

As a rule a fanner who mortgages his laud, unless
be for improvements, is rarely enabled to pay his indebtedness without a sale of his lands. The holder of

more or less dependent upon
the prompt payment of interest.

securities of this class

crop conditions for
in the event of default a lawsuit usually follows,
with the attendant delay, expense and often the necessity for j)urchase of undesirable property.
Notwithstanding the briefness of the period for which
such investments have to run, the legal expenses, delays and losses in case of foreclosure, the frequency of
application in case of sale of encumbered property for
a total or partial release and acceptance of the proceeds,
thereby destroying the permanency of the investment,

While

yet, for a short trust, real estate prior lien securities, on
account of the better rate of interest, the visibleness of
the security, its inability to take wings and its freedom
from great or sudden fluctuations in value, have received
much favor from investors.

BONDS.

One

had

twenty four years from $2,500 to $1,000.
In
the taxes had trebled.
1875 the tax rate was about sixty cents on the hundred
dollars .•ind in 1899 the rate was $1.85 on the hundred.
Here we are brought face to face with the unpleasant
fact that incomes are being constantly diminished and
taxes steadily increased. This applies to almost every
fallen in

To make

Instances.

of the most important questions confronting a

"What

annual income may I with reasonable certainty count on during the existence of the
trust ? " With those person.*, who, as a rule, are solely
di'l)endent on such income, the certainty rather than
Unless they can
tlie amount is the important matter.
with reasonable confidence know the amount of their

beneficiary

income their plans for the future are materially hampered.
At this point, then, appears one of the most
difficult problems regarding the investment of trust
funds. If the only consideration be safety and permanency, the investment would be made in long term U. S.
Government bonds or in the municipal bonds of cities of
the highest credit— such investments often producing
not more than two per cent, annuallj-.
Ii"'ew persons can a fiord to have their entire estate
so invested. And with incomes from the same value of
estate in the past decade having fallen from thirty-five
to fifty per cent, in amount, and with small prospect of
the rate being permanently bettered, the question of rate
becomes a most important one.
As illustration of the changes m income, we recall
a certain estate that in 1875 was invested on a ten per
When the securities matured the funds
cent, basis.
were reinvested at six per cent., and in 1899 they were
again invested in securities yielding four per cent, per
annum. Thus the annual income from the same estate

less profitable

State in the Union.

Hence

follows that for a permanent safe investment, yielding a fair income, prior lien bonds conservatively issued for a long period by water, gas, traction or
other corporations performing qitasi public functions, loit

cated in large cities and with practically exclusive privileges, offer many advantages. The prior lien mortgage
bonds issued by some of the great railroad systems
within the past few years are in the same category. A
choice of any particular issue or issues depends on many
conditions. Such securities should be purchased only
after the most thorough and intelligent investigation.
The trustee will not in the event of loss be justified
iu saying that these securities were highly recommended. Its duty is to investigate the history of the
company's earnings for past years, its resources for
business, the efiiciency of its management, the amount of
indebtedness, the legality of its bond issue, and to
become acquainted iu a general way with the territory
in which the property is located, and with such other
its

matters as affect
safety and

its

its convertibility,

its

permanency,

its

value.

This careful investigation can be made more efficiently by a well organized trust company than bj' an
individual. A trust company, with its corps of experienced officers, to whom a large vai'iety of securities are
constantly offered, and who are accustomed daily to
consider and make investments, aided usually by a large
body of representative men as directors taken from different walks of life, reduces to a minimum the danger of

mistake

in investment.

The expense attending such investigation is frequently a matter of much consideration. An individual
desiring to invest from five to twenty-five thousand dollars cannot well afford such an expenditure as would
reduce materially the net income from the estate. A
trust company, having htindreds of trusts requiring investment in large or small amounts, can well afford the
time and expense necessary for such investigation. In
the purchase of such securities in large amounts, aided
by the many resources at its command, the trust company makes prompt investments, often securing more
advantageous terms and giving the different trusts an
opportunity to be wisely invested— all of which inures
to the benefit of the cvstiti que trust.

Whatever may be the choice of the investments, be
they for large or small estates, the dictates of prudence
require that the entire estate should not be invested in
a single class of .securities. With constant changes and
witli coi3dltions over wiiich the watchful trustee has no
control, .sound discretion demands that the estate be invested in a number and variety of securities.
Nor does the duty of the trustee end with the prudent
investment of the funds of the estate, the placing of
them in a safety vault, the collection and payment of
the income to the cestvi que trust. The same careful inquiry regarding the property securing the investment
must continue, accurate information must be obtained
promptly, periodical statements regarding the properties
and securities must be tiled away and constantly referred
to; and if prudence requires, the investment must be
promptly converted into money and the proceeds reinvested. Eternal vigilance is the price of safety. Such
vigilance and such imperative obligations can best be
performed by a well equipped, Avell organized trust
com)>any.
When the trust is ended, with its day of final reckoning, the estate should either be converted into money
and delivered to the legal owner, or, should the owner
prefer the securities, they should be of such character
as to be readily marketed. At the expiration of every
trust the beneficiary has the right to anticipate that the
estate, be it monej% securities or other property, is no
less valuable than when placed in the hands of the
trustee.

Such a trust company will not
do will live after them.

officers

die

and the good

its

Report of Proceedings*

Detailed

ANNUAL MEETING TRUST COMPANY

THI.^D

PROCEEDINGS OF MEETING.
Company SecAssociation was held in

American

tion of the

Banljers'

the Library of the Chamber of Commerce. Cleveland,
Ohio, on the 6th day of September, 1899.
The convention was called to order at 10.20 a.m., by
the Chairman of the Section, Mr. Brecltinridge Jones.
The Secretary, Mr. Arthur Heurtley, thereupon called

showing the following Trust Companies repre-

roll,

sented:

OOLOUADO.

Denver

— lutermitional

Trust Co.
GEORGIA.

Marietta

—Marietta

Trust and Banking Co.
ILLINOIS.

Chicago

<iuincy

—

American Trust and Savhigs Bank.
Merchants' Loan and Trust Co.
The Northern Trust Co.
Security Title and Trust Co.
Chandler Mortgage Co.
Pearsons-Taft Land Credit Co.
Savings, Loan and Trust Co.

— State

INDIANA.
Indianapolis

— Union

Trust Co.

Marion Trust Co.
IOWA.
Clinton

—People's Trust and Savings Bank.
— Sioux City Safe Depesit and Tnist Co.

Hioux City

KENTITCKY.

—

MASSACHUSETTS.
7/oAfon— Old Colony Trust Co.

MICHIGAN.

—

Union Trust Co.
Grand Rapids Michigan Trust Co.
Detroit

—

MissorEi.

Kansas City
Louis

—

—Fidelity

Trust Co.
Lincoln Trust Co.
Mississippi Valley Trust Co.
St. Louis Trust Co.

NEW
Trenton

JERSEY.

—Trenton Trust and Safe Deposit Co.
NEW

Acic York City

YORK.

—Continental Trust Co.
Colonial Trust Co.
International Banking and Trust Co.
Trust Co. of America.

NORTH CAROLINA.
Winxton

—Wachovia

Loan and Trust Co.
OTIIO.

—
—

Cincinnati Union Savings Bank and Trust Co.
Cleveland State Banking and Trust Co.
American Trust Co.
Cleveland Trust Co.
Guardian Trust Co.
The Savings and Trust Co.
Painesville
Pioneer Trust Co.
Youngstown Dollar Savings Bank and Trust Co.

—
—

PENNSYLVANIA.

—Dollar Savings Fund and Trust Co.
Allentoucn — Lehigh Valley Trust and Safe Deposit Co.
Norristovn — Montgomery
D. Co.
Trust and
Philadelphia — Commonwealth Title Insurance and Trust Co.
Allegheny

Ins.,

nttshnrg—FUMity

—

RHODE ISLAND.
/^rovidcnce— Rhode Island Hospital Trust Co.

WASHINGTON.
Spokane

— Spokane and Eastern Trust Co.
WISCONSIN.

Milwaukee

—Milwaukee Trust Co.

Mr. Jones: Those of the gentlemen who have not registered we would be very glad to have register before they
leave the I'oom, and if there are any other companies represented whose names have not been called we would be
very glad to have them rise.
After certain corrections had been made the Chairman, Mr. Jones, said:
Gentlemen, I have th© pleasure of introducing to you
Mr. J. G. W. Cowles, President of the Cleveland Trust
Company, who will address you.
The members present were thereupon welcomed to
Cleveland by Mr. J. G. W. Cowles as follows:

Address of Welcome by Mr.

W. Cowles.

Mr. Chairman and Gentlemen:
In the absence of Mr. H. A. Garfield, who should have
spoken to you now. I am permitted to express to you the
welcome of your associate members, representing the
Ti'ust Companies of Cleveland, to our city and to the
Third Annual Meeting of the Trust Company Section of
the American Bankers' Association. I speak for Cleve-

and in particular for its Trust Companies.
We
have recently celebrated the first century of our city's
honorable and prosperous history. Cleveland has always
been a conservative city, and so, on the whole, of slow
growth. During its first half century it was little more
than a New England village in this new Connecticut of
the Western Reserve, and in 1860, sixty-four years from
its founding, the population Avas 43,838, whereas now it
closely approaches 400,000. It has never gone backward
by the collapse of booms, but steadily, though for periods slowly, forward in population, industries, trade
and wealth. Cleveland has always been fortunate in the
possession of financial resources of its own. Less foreign
or Eastern capital has been required here than in any
other Western city of its size. We have never been dependent upon outside money. With $24,137,.304 of active
banking capital and surplus, and $42,.517,638 more of
deposits in 14 national banks, and $75,115,248 of deposits
in 33 savings and other banks; a grand total of nearly 118
millions of deposits and over 140 millions of capital and
deposits together, the business of the city is on a secure
basis, assuring permanency and increasing prosperity as
the years go on. In the last nine years our bank deposits have increased 66 millions, and our banking capital
and surplus nearly 10 millions.
This healthy
growth has been gained through a series of years, including some very " hard times," and is indicative of the
vigorous vitality which pervades our civic, our industrial, our commercial and our financial life.
Savings
banks have been a conspicuous feature of our financial
institutions for more than tifty years. The fact that
there are more than 30 of them in Cleveland, while in
land,

Henderson- -0\\'.o Valley Banking and Trust Co.
Louisville
Fidelity Trust and Safety Vault Co.
Louisville Trust Co.

•^7.

—

AT CLEVELAND, SEPTEMBER

Reading Beading Trust Co.
Washington Title Guarantee and Trust Co.

third aunual meeting of the Trust

The

the

SECTION, HELD

Title and Trust Co.

Safe Deposit and Trust Co.
Equitable Trust Co.
Mercantile Trust Co.
Pennsylvania 'I'itle and Trust Co.

some other principal cities in neighboring States there is
none, shows the drift and tendency of our people to accumulate their savings in such banks. These 75 millions
belong to the people more than to the corporations, to
the poor as well as to the rich, so-called, to the many
rather than to the few, as evidenced by the 54,000 depositors who own the 31 millions of deposits in the Society
for Savings, and the p(>rhaps equal number who own the
larger aggregate of deposits in ilic other savings banks

—

BANKERS' CONVENTION.

82
of the

L-ity.

But Trust

of recent origin

Coiiipauii's, pinpeily so-called,

among

us,

are

but have had a prosperous de-

velopment in these few years. It was not until 1894 that
the State law authorized Trust Companies under special
provisions, to act. by judicial appointment, as trustees of
guardians of minors, administrators and asThe five Trust Companies now organized and
qualitied to do such business under this recent State
law have already in a large and emphatic way demonstrated their value to the business community and to the
estates,

signees.

public at large by their enterprise as well as by their
conservatism, by their progressiveness as well as by
their prudent management of affairs intrusted to them.
I think no two mutually compensating mottoes better
than these
fit the requirements of Trust Companies
progress and permanency, ino corporations have a larger
interest in what is permanent than ours. Their religion
should be that expressed in the prayer of David: " Lead
me in the way which is everlasting," that is, the right
way; and not in the other way which "He turneth upside down." Not only the present day, current events
and afl'airs, but the future, even future generations, are
within the field of our intentions and our obligations.
J'or we deal not with the transient only, but with the
fixed and permanent as well; not only in money and
names, in currency and credits, which are like the flowing streams passing in a night and they are gone; but
with realities, and with securities and with continuing
estates which descend without change from fathers to
their children, it may be for a hundred years to come.

This is one chief and most important attribute of Trust
Companies, tliat tJirij stay. As a Catholic Bishop once
said to me, concerning tlieir way of building churches,
now the foundation, in a few years the walls,
later

the

roof,

and

length

the

inside

conduct of business, and upon what I may call the moral
character and development of Trust Companies, which
resides not in the capital, not in the deposits, but in the
men that manage them. They are not adaped to nor intended for speculative procedures, but for the conservative methods of legitimate enterprise and business. Their
calling is to act wisely in the present, but with reference
always to the accumulation of the " far off interest " of
prudence and patience, rather than for the quick and
often fatal profits of the passing craze. Nine times out
of ten it is tlie haste to get rich that ruins; it is the speed
that kills; and the pace at which " prosperity " has been
going in the race since it got its feet again a year or two
ago is the peril of the hour.

not prophesying

evil,

but

beg to indicate the

re-

sponsibility of trust companies to restrain rather than to
incite the speculative fever

which prevails and

to limit

rage and ravages. The danger
" Trusts " which are not trusts at all, but giof so-called
gantic corporations formed by combinations into a large
unit, is less in the combinations and the magnitude of
them than in the over-bonding and over-capitalization
which become at length the millstone which drags them
and others with them to the bottomless sea of banki-uptcy. Nobody pretends that these capitalizations are
the equivalents of values; everybody knows the fiction,
but how pleasing the delusion in hopes of temporary
gain. How soon is forgotten the stress of '9.3 and the
stagnation and collapse of '9G. and the law of gravitation
which will bring the sticks of spent rockets and the baskets of exploded balloons to the ground, l)ut the reason is
plain. It was very long ago observed by a philosopher
that " there is in human nature generally more of the
fool than of the wise; and therefore those faculties by
which the foolish part of men's minds is taken captive
are most potent." But let us, and we shall if worthy to
be trusted, seek values, demand values, certify only values,
in true equation with their names and quantities, and of
rather than to enlarge

its

amid

Our office is to be trusted; our duty is to be worthy of
trust; our vocal ion is to execute trusts; our honor will
be to betray or to neglect no trusts; our success will be
to guard and keep, to advance and enlarge all confidence
reposed in us; observing in all regards the absolute obligation of disinterested fidelity, Avhich binds the trustee to
his ecsiui qui trust. " The greatest trust between man
and man," once wrote Lord Bacon, " is the trust of giv-

ing counsel," for he says. " in other confidences, men
of life, their lands, their goods, their
children, their credit, some particular affair, but to such
as they malvc their counsellors, they commit the whole;
by how much the more they are obligated to all faith and

commit the parts

integrity."

But the

for the one advised

trust of giving counsel ends there;,

may

not take the counsel given, but
go contrary to it on liis own judgment, disregarding
yours, while for uiiuors and widows, for the incapable
and dependent, for the absent and the dead in the long
procession of the years, the Trust Company not only
counsels but acts, stands alone responsible within the
range of the vast trusts reposed, and is by so much still

more obligated

" to all faith

and integrity," as has been
are here to-day in order that by conference
with one another we may learn how better, or rather
how best to discharge these high and vast and long continuing fiduciary obligations. And our success in busisaid.

And we

ness as Trust Companies will depend not so much upon
our selfish shrewdness and aggression, as upon our ex-

perienced intelligence and conscientious faithfulness in
the conduct of our own business and the affairs of others
intrusted to us.

Reply to Address of Welcome.

finish-

" we don't
" Oh, "
said he,
have to hurry,
ing
the Church lives forever." So the Trust Companies; or
so will they, if they are what they ought to be. Such a
purpose must have a controlling influence upon the

such substance as to promise survival of values
the changed conditions which must come.

Mr. Breckinridge .Tones, the Chairman, in reply tO'
the address of welcome, said:
On behalf of the Trust Company Section of the American Bankers' Association, representing in capital, surplus and deposits nearly a billion of dollars, and representing in trust funds in their charge more than a billion dollars, it is my pleasure to acknowledge the courtesy that has been extended to us on behalf of the bankers of Cleveland. The words of wisdom that have been
spoken by you could be brought to us. and take root
in our minds, in no more appropriate place than in thewealthy and beautiful city in which we find ourselves.

Cleveland is known from one section of the country to
the other as a solid and wealthy city, a city that knows
how to use its wealth, and a city that has accumulated
by reason of the progress of the country at large. As
we are here in charming weather, when the news from
our homes brings word that our people are suffering
there from greater heat, we can better enjoy your cordial hospitality. But we are here now, and I speak for
this section in thanking you for the open hearted hospitalities which have been and will be extended to us,
thanking you that your homes have been thrown open
to us, thanking you for the opportunity that we have,
not only to meet the business men, see your substantial'
buildings and other evidences of prosperity and wealth,
but also to meet the charming women of Cleveland. As
this section grows, in a generation from now when the
Trust Company Section has become itself one of themomentous financial aggregations of the world, we willlook back to the words you have spoken here to-day, and
I trust that the histories of Trust Companies will then
be such that it will be a promise of your city that the
Trust Company is the representative of progress and
stability. We tliaiik you for your kindness.
Mr. Breckinridge .Tones: Being supported, gentlemen, by officers who have given devoted attention tothe work of the Trust Company Section during the past
year, and whose reports will embody matters of interest to you, I shall not worry you with any extended address on the general affairs of the Trust Company Section, but leave the words to be spoken by my associate

TRUST COMPANY SECTION.
aud go

your records as a
I have the pleasupon Mr. Anton G. Hodenpyl, the Chairure of calling
man of the Executive Committee and Vice-President of
the Michigan Trust Company, of Grand Rapids, Mich.,

officers in their reports

permanent

into

expi'ossion of our wishes.

to malco his report.

ihc

have an opportunity
study at their leisure a system that is well nigh
perfect, and the exhibition is in line with the plan of the Sec-

fully performed, in order that all miglit
to carefully

tion

to be of practical help to its members.
notice that many companies are represented at this

meeting, not only by officers, but by detail men as well, and
you will all give the exhibit the careful study it deserves.
It will be open for your inspection during the entire
three days of the Convention, and the exhibit of each company is in charge of a representative of that company, who
will gladly explain any of the forms and methods.
Respectfully submitted,
I trust

Report of Mr. Anton G. Hodenpyl, Chairman of the
Executive Committee.
To

Members of the Trust Company Section of the
ican Bankers' Association:

Amer-

The attendance at this meeting, and the character of the
representatives of Trust Companies present this morning, is
an assurance to your committee tliat tlie original plan conceived at the time of the birth of this Section was wise and
it has appealed to you, aud that you find the Section of use
and of practical help. This is encouraging, and although this

Antox

(1.

Hodenpyl. Chairman.

"Investment of Trust Funds," by John W. Barr.

;

only the third birthday of the Section, it is now a healthy
and prosperous child, with a future growth in strength and
power aud everything that tends to usefulness absolutely
is

assured.

Consider for a moment the financial strength of this threeyear-old child.

190 Trust Companies comprise the membership,
having a combined capital of
With surplus and undivided profits of

Making a total working capital of
These 190 companies hold cash deposits

iS9-t,G22, 145.00

07,838,100.00

$162,460,245.00
of. .$610,113,688.00

In the past year the advantages of the Section have been
carefully explained by the Secretary to companies not heretofore members, and during that period Trust Companies
with a capital and surplus of $42,000,000, and with cash deposits of .$210,000,000, have come into the Section.
In considering the deposits of Trust Companies it must be
borne in mind that the figures represent only the deposits of
the banking departments of the different companies and that
in addition each company has under its control trust funds
for investment, or trust funds actually invested, of an amount
probably equal to or in excess of its cash deposits. The figures are startling in their magnitude, when the comparative
youth of Trust Companies is considered, and are useful in
showing the wonderful and rapid growth of this unique and
very useful class of Amei-ican corporations, which have taken
such a position in finance in this country as to astonish the
world. And, indeed, it would be difficult to imagine how the
great financial transactions of America could now be carried
on, or how the many existing trusts of enormous magnitude
could be administered, without the assistance of the Trust

Mr. Breckinridge Jones: One of the first Trust Companies organized Avest of the Alleghany Mountains, and
I think the very first company, was the Fidelity Trust
and Safety Vault Company, of Louisville, Ky., represented at this meeting by Mr. John W. Barr. In the
City of Louisville it looks strange that there should be

a company with $40,000,000 of trust funds. The fact
that there is such a company there shows that the officers have at least had considerable experience, and has
led us to invite ^Nlr. Barr to write a paper on the investment of Trust funds, and I want to say that not only in
that particular is the Fidelity Company, of Louisville, a
most excellent company, but it is in other respects as
I remeiiiber when starting my owm company ten
years ago, I went over to Louisville, and went over their
books to find out how the business was done, and you
can judge, when I tell you that after being there I had
to write back a letter to Mr. Malone and ask sixty-three
Avell.

how

Notwithstanding its magnitude and importance, the business of the members of this Section has all come into exist€nce in recent years, and the Trust Companj' idea was originated within the memory of men now living. This thought
suggested to your committee, at its last meeting in New York,
the idea that the present is the time to preserve for history
the facts and data of the origin of the very important movement which brought into existence the Trust Companies of
this country.
In a few years, it is quite possible, there will
be no one living from whom this information could be
gleaned. It was therefore determined that two papers on the
origin and growth of the Trust Company movement, in Philadelphia and New York respectively, should be presented to
you to-day, not ouiy for your entertainment and instruction.

complicated the business was
gentlemen of the Trust
Company Section that labor now by presenting the
books here so yoti can see them.
Mr. John W. Barr then said: I thank you most sincerely for those very kind words of commendation to
our Trust Company. Personally, I feel very much embarrassed; for, as far as I am personally concerned, they
are not merited. It has only been within the past year
that I left the practice of law to take up the duties of
the Trust Company, and therefore the growth of our
Trust Company has been due to older and abler heads
than my own.
[Mr. Barr's paper will be found in full on pages 79
and 80 of this Sui^plement.]
Mr. Breckinridge Jones: We have two papers on the
growth and origin of Trust Companies in two of the
States, and as Philadelphia has been considered the
home of the Trust Company, I take the liberty of calling for Mr. Zug's paper first.
Mr. Breckinridge Jones: Some one may desire to ask
Mr. Barr some questions in reference to his paper. If
you do he will, I know, be pleased to answer before
passing from that subject. If not. we will proceed at
once with Mr. Zug's stibject, " The Origin and Growth
of the Trust Company Movement in Pennsylvania."

b'.il also to the end tliat the record of those important events
should be preser\-ed for history, and in this the committee believes that it is fuHilliiig a portion of the mission of the

"The Origin and Growth of the Trust Company
Movement in Pennsylvania," by Charles K, Zug.

;

Company.

different questions,

then.

Section.

have tried

[Mr. Zug's paper

plans for the work of the
Section, conceived at the time of its I'irth. These plans were,
that the Section should be of practical benefit and of assistance to its members, in addition to bringing about an acquaintance and feeling of close friendship between Trust
I liave .spoken of the original

Company

officials.

has been the aim of the committee to
give to those in attendance practical instruction on practical
subjects, to the end that the knotty problems constantly arising in this intricate class of Imsiness might be made easier,
and that all should have the benefit of the experience of the

At each meeting

others.

You

will find

number

of Trust

on the programme notice of an exhibit by a
Companies of the various books and blanks
used by them in keeping tlieir records and accounts. These
books and blanks are intended to exhibit the whole internal
machinery of a well-condiutod Trust Company office. Their
proparation has been a difiicnlt task, but it has been cheer-

to save the

given on pages 70 to 78 of this

Supplement.]
Mr. Breckinridge Jones: Is there any one who desires
ask Mr. Zug any questions with reference to Mr. Zug's
paper?
Mr. I'roston T. Kelsoy, of the Marion Trust Company,

Indianapolis. Ind., then said:
I would like to ask Mr. Zug if the failures he refers to
have been Banking and Trust Coiupanies, or whether
any of them have been exclusively Trust Companies?
Mr. Zug: There has only been one failure in Philadelphia of a Trust Company. It was subsequently reorganized, and is now doing business.
Mr. Preston T. Kelsoy: What was the cause of its fail-

ure?

Mr. Zug:
securities of

regret to say

some kind

was

investing in W^estern

or anotlior.

know

this,

that

BANKERS' CONVENTION.

they were attempting to finance certain Western underand I believe they became very heavily loaded
with stocks and bonds of street railroads and other companies of the West, and in ihe course of time they could
not stand it. That was the cause as far as is known. I

BEST

WAY

TO ADVERTISE.

takings,

was the only one case.
Mr. Breckinridge Jones: They had some stock in a
paper company in Philadelphia, didn't they?
Mr. Zng: No, sir, that was the Chestnut Company.
Mr. Breckinridge Jones: We next have a paper on the
Origin and Growth of the Trust Company Movement in
New York, by Mr. Francis S. Bangs, of New York City.
I know you will all listen to Mr. Bangs with interest.
He was formerly Chairman of this Section and well
believe that

known

to all its

members.

Or'gin and Development of the Trust ComIn the State of New York," by Francis S.
Bangs.

"The

pany

[We

print Mr. Bangs' paper on pages 75 to 76 of this

SUFPLEMENT.]

One

of the delegates suggested that

would add

the historic value of Mr. Bangs' admirable and comprehensive paper if he would add the names of the four first
Trust Compannies in New York State.
Mr. Breckinridge Jones: I trust Mr. Bangs will comply
with the suggestion.
Mr. Bangs: My paper, gentlemen, was merely intended
as a sketch of the origin and growth of the Trust Company movement in the State of New York and not for
advertising purposes, but if desired, I will insert the
names.
Any questions, gentlemen,
Mr. Breckinridge .Tones
you would like to ask Mr. Bangs in reference to matters
in New Y'ork connected with Trust Companies?
Mr. Breckinridge Jones: Now then, gentlemen, we are
through with the formal papers, and we will now have
for discussion some general topics that can be either as
:

to the subjects of these papers, or

any subjects that may

be suggested. Some one has requested that there be put
The best method of proon the program this subject:
moting Trust Company business." I take it that is something we are interested in. We would be glad to hear
from any of you on this. That subject is open to any of
"'

and in order that we may start the ball rolling, we
would like to hear from Mr. Holliday on that, or any

you,

other subject.

The Best Method

Promoting Trust Company

Business.
H. Holliday, Union Trust Company, Indiancome with the expectation of
making any remarks on this or any other subject. I have
a subject that I have been very much interested in, and
should like to know the experience of other members,
and that is the savings account business of Trust Companies. I have long wanted to know what the experience
of companies has been in reference to that, which is a
branch of a great many of them.
As regards the best method of promoting the business
of a Trust Company, I think it is only a question of principle, which can be very briefly defined, and that is, do
your very best and do it honestly. You have got to be
wide awake, and you have got to meet your competitors,
but in the long run you have got to depend upon that
principle for your success. There are so many different
forms of business. We have three Trust Companies in
our city and are shortly to liave a fourth. Their lines
of business are different, and it is best that they are.
One, say, will devote itself directly to the purchasing
and handling of bonds. Another perhaps to the administering of estates, another to the savings bank business,
and so on, and as far as my ol)servation has gone that
While they all do a
is the case in a great many cities.
general trust business, they run more into specialties, and
it is a very difficult matter, unless you come down to
the details of these specialties, to advise and consult how
.vou are going to promote that business.
.Tohn

apolis, Ind.: I did not

Mr. Breckinridge Jones: Mr. Holliday, how do you
is the best way to advertise a Trust Company ?
Mr. J. H. Holliday: That is also a question of detail,
depending on what business you are doing. I think the
very best method of advertising the business is first in
tlie daily papers, especially in communities where the
business is new. You have to make people understand
what it is. They have very eiToneous notions about
Trust Companies. We lost a very valuable trust some
years ago on account of the prejudice of some of the
heirs to trusts in general. They had heard so much of
trusts in the newspapers, about the illegality of trusts,
and it had been used as a political argument so often,
that they could not be convinced that a Trust Company was a proper thing. We won over several of the
heirs, but one man who appeared to hold the control
and who was quite ignorant said he had heard toa
much in the newspapers about these trusts and he
would have nothing to do with the Union Trust Company, or any other Trust Company, and advertising in
the daily papers would be a good thing if only to obviate that condition of affairs and relieve the ignorance
of such people. I have found that the best method of
doing that, at least of attracting their attention, was
through the daily papers. You have got to hammer it
in, and keep on hammering it in, point by point, by
iteration and reiteration, and then follow that up with
literature of various kinds, circulars, letters and pamphlets on the different points. One very successful
method or one very admirable method, I think, has
been in the printing of papers that were read before
this Section, especially last year, on different topics.
We advertised at that time a few of the different parts
of the business, and those papers bearing directly on
think

these were printed and distributed about, to give per.sons -Riio did not understand a compreliensive idea of

what we were

doing, but each

to itself I thinlc.

cultivate

Y"ou

have got

along certain

company must be a law
to know your field, and

lines.

Mr. Anton G. Hodenpyl:

probably is not known
Mr. Holliday, the last
speaker, is about to retire from the Trust Company
business, and go again into the newspaper field. This
possibly may acount for the advice he has just given us.
Mr. J. H. Holliday: I think that is the very unkindest
cut of all. First to invite me and urge me to speak, and
then to make it known that I am going out of the business simply in order to make that drive at me. It is
a well known fact, I thinlc, that proper newspaper adIt

to all of the parties present that

vertising always pays.

Mr. Arthur Heurtley: We have advertised more or
newspapers, particularly in the
earlier years of our corporate existence, and I must honestly coufess that we have never been able to directly
trace any especial benefit to newspaper advertising. In
that our experience is different somewhat from Mr.
Holliday. The best advertising we have found has been
the issuing of little pamphlets from time to time on various topics, on Trust Company management and Trust
Company work, and send these out to selected lists in
the city of Chicago. This and little folders, giving the
ideas in brief form, have been the best methods of adless extensively in the

vertising

we have

-Mr. Taft,

yet found.

of Chicago:

have monkeyed

Jiave been

Avith advertising,

and

one of those

who

think the great
mistake, at least I think the mistake of one advertising man I had to deal with, was in not discriminating
in advertising for men's money in large amounts and
in small amounts. A man gets up in the morning, puts
on his shoes and finds a hole in the bottom of one of
them. If he is not acquainted with some shoe shop an
advertisement in a street car will make or help make
up his mind for him. If, however, he has a few thouI

sand dollars which he has acquired by hard work and
honest toil, you ai-e not going to catch him with one
shot. You have got to keep it up a long time. When he

TRUST COMPANY SECTION.
a position to have his miiul niach^ up you perhaps
can hope to influence him.
I started out about eight years ago with a mailing
That cost what seemed to
list, a monthly mailing list.
money to get out every montli. I
be a great deal of
think it was three years before there was a single indication that that list was doing any good, and there
was nun-e than three times during that period that I
had to explain what I hoped to accomplish by it. But
it began to show tinally, and every once in a while some
one would mention the fact tliat they had got that old
circular again. In about five years it commenced to
show. The last three years it has shown very much,
and I think it has simply been for the reason that when
a man happens to be in the mood to think about the
thing and you have had your circular before him for
a good while he remembers it. He thinks of it and
reads it, and you will get a chance to talk with him
about it. :My experience has been the same as Mr.
Heurtley, and I have never had an indication that newspaper advertising has ever paid us. I am certain, howis iu

by means of

ever, that constant advertising

circulars,

with a well kept up mailing list, will pay every time.
Mr. Kelsey: I would like to ask Mr. Heurtley
whether or not in his circular which he sends out more
or less irregularly, whether each circular is confined to
one branch or whether he combines them all, and what
are the best results he has obtained ?
Mr. Arthur Heurtley: The first pamphlet we issued
was more of a general character, giving an idea of the
Trust Company business and treating it in a general
way. After that we sent out a series of pamphlets, taking each subject by

The

itself.

first

pamphlet was

pre-

paratory more in its idea, the others were simply following up the various lines as suggested by the first
pamphlet. That has proven to us to be more successful in reaching the general public than in any other pos-

way.
Mr. Kelsey:

What

your rule; do you use an inclosed envelope, two-cent stamp, or do you use a oneis

cent stamp ?
Mr. Heurtley:

A two-cent stamped envelope.
Mr. Kelsey: Always V
Mr. Heurtley: Always.
Mr. Charles K. Zug, of Philadelphia: Mr. Chairman,
in Philadelphia, the best clients the Trust Companies
have are the lawyers, and our advertising there has
been made to reach members of the bar. It occurred
1o me that perhaps three different methods that are in
use there might prove interesting to those present. The
first was adopted a number of years ago and consisted
of a legal calendar, published by all the Trust Companies in Philadelphia. It is a small book that you can
slip ii'to yoiu" vest pocket,

and gives

tlie

name and

ad-

dress of every lawyer in Pliiladelphia, and I do not believe there is a lawyer who uses any other means of
getting the name of a member of the bar, or his address

know

Another company issues what
which you hang in your office,
the various information that a lawyer
and w hich gives
needs as to the day certain wrils will issue, the last
days in which you are required lo file your papers, accounts and things of that kind, and 1 question very
much if you could go into a lawyer's office in Philadelphia without seeing such a calendar displayed.
Another company issues a small diary which gives
the same information, and that is issued by tliat comif

he does not

called a legal calendar

l)any to every

it.

member

tlie

liis

like to
.Mr.

advertising,

know

would and

liow he does

thinlc

you

all

would

it.

Case: Mr. Chairman,

not sure

tliat

compliment conferred upon me by Mr.
and then the answer which ]\Ir. Bangs gave as

entitled to the
.Tones,

why lie left tliose four names out keeps runthrough my mind. I'ossibly, Mr. Bangs, you were

his reason

ning

little selfish in

liole

urally.

As I say the field is too large. These powers that
have been named here are too broad, and it is almost impossible for any of us to occupy the entire field. Even
my friend .Tones, with his five or six millions
How
.

many

millions of capital

Mr. Jones: One hundred millions.
Mr. Case: I have been awa.v for a few weeks' absence, and I don't know just where Brother Jones is.
Now, I see that he can't even take all there is in St.
Louis. He is going to leave enough for us, but I am not
the least bit jealous of him. We could carry on this talk
all day with profit, I assure you, but on this question
each company has finally got to use its good common
sense in its particular field, and the advertising expert
is the fellow that we should look to to do the work and
make the suggestions, and wa can pick out those points
that apply to the particular work we want to do. Speak
to a number of them, and make them furnish the suggestions to you,

and when you want

to push one parThis talk is general. It
is not specific.
But I take it that each company must
advertise difi'erently in order to cover its special work,
and according to its particular field and ability.
Mr. Richards, of Spokane, Wash.: Mr. Chairman, I
came from a far off part of the United States, I came
from the State of Washington, I came to listen and to
learn. Of all the suggestions as to advertising I have
heard. I have not heard one tliat was not good. It is
true I have heard that sometimes in the West people
take a very direct and short method. We have tried
riewspaper advertising moderately and successfully, and

branch you can do

so.

circular

advertising moderately and successfully, but
most successful advertising is to acquaint
our depositors frequently with the fullest particulars of

find our

anything and everything connected with the institution, and ask their support, and we have received
a

most satisfactory business through that channel.
Mr. Breckinridge Jones: It has been suggested that
should not keep these things to ourselves. About a
year and a half ago I was in New York, and they were
just launching a Trust Company there, and it has
grown
since then until it occupies now one of the largest rooms

in the city.

You remember the story
was asked the population

who

route and

of the old st;ige driver who
of a small town along his

replied that he did not

know

its

popula-

had not been there since last week. Now,
about that kind of growth has been going on with the
Colonial ^I'rust Company of New York ever since its
ortion as he

ganization.

bar.

Breckinridge Jones: Mr. Case is here from St.
Louis, and, as I have had occasion to feel the effects
.Mr.

that respect, and we had better let a
out in our belt and tell what we know. But this
occurs to me. We all have our own field. The Trust
Company business is so wide that none of us can occupy it all. We have to select that field or part of that
field for which we are best adapted, and where the
field is most active and best cultivated, and then we
inust do our work according to our ability, and the
measure of oui- financial strength, and as for reaching
the people, that is a question of good common sense and
the amount of money you want to spend. That has
seemed to me to be the largest problem, to know how
to apply the special amount of money which you may
choose to set aside so as to best reach the people that
you wish to do business with, or that will come to you
from some field of the trust business that you are trying to work, and come the most easily and the most nat-

ticular

sible

'I'lie

E. Borne,

jicrc

president of that institution, Mr. .John

and we would like to hear from him.
Mr. J. E. Borne, of New York City: Mr. Jones, it is a
very difficult matter to reply to the question as to the
best nietliod of promoting Trust Company business.
This discussion seems to have launched into the specialty of advertising almost entirely. Of course that
is
only one of the branches. I cannot formulate in words
tile best way of conducting or promoting a
Trust Comis

pany business, so much depends upon the personal ac

BANKERS' CONVENTION.

86
tivity of those interested, but

things, let the Trust

may

should say above all
itself popular. This

Company make

be a very diffcult thing to do, but get good

men on

your board of directors, get men of influence, and then
make those men vrork. Treat such depositors as you
have liberally. Do not be too technical, that is, overlook
small matters of detail. One man will tell another, and
before you know it your one depositor may influence

many

other depositors.

AVhen it comes to advertising, we have done considerable newspaper advertising, ^^'hen we first began we
advertised very liberally with the one idea of keeping
our name before the public. I do not know that we expected to do anything by our advertising except to advertise our name. We did that for a year. We not
only advertised in the newspapars, but we sent around
circulars and when we were able we began to publish a
financial statement and we sent that around. We duplicated that from time to time. We sent out special
We
circulars to business men, to lawyers and others.
have issued a Trust Company manual which reviews the
financial situation, etc. But we keep ourselves before
the public by special advertising in two or three of the
principal daily papers, not with the idea of saying too
much, but simply that the people may see the name, the
Colonial Trust Company, the Colonial Trust Company,
again and again. We try to keep ourselves before our
friends by hustling— by persistent hustling—the same as
the manager of any business would hustle. If he hears
there is a large account which may be had, he pulls his
strings through his directors, sees the parties interested,
and secures the business if he can. He keeps all his associate officers at work and they never let an opportunity slip. When any special or particular kinds of business come up, as for example that which is vei*y much in
vogue at present— namely, letting us act as—what shall
I say — Avet nurse in connection with the consolidation of
various industries, or, in fact, when there is any business
that we can possibly secure, we use all the influence we
possibly can. I do not hesitate to use any director. I
make him use his influence, and he is always glad to do
it.
We try to do it in a delicate way. We do not go to
the extreme in working for business or according to the
At the same
i-ule adopted by the commercial traveler.
time we keep hammering away, and the only thing I can
say is, hammer away the best way you know how.
VALtTE OF SAVINGS DEPOSIT BRANCH.

Mr. Breckinridge Jones: One question of very much
interest to a number of Trust Companies, not so much
to all of you, but a question that has been raised a
number of times, is as to the value to a Trust Company of having a savings deposit branch for savings accounts, and running it practically as a savings bank.
Mr. Gibson, of Denver, has looked into that question
considerably, and I think as a result of his investigation
he has organized a savings department. I know that
some of the gentlemen here would like to hear from Mr.
Gibson.
Mr. Frank B. Gibson, of the International Trust Company, Denver: Two years ago at the Detroit Convention
I investigated this subject thoroughly, as we were then
thinking of establishing such a department. We of the
far West were having as many irons in the fire as possible.

were suffering from too much

sult of the investigation

was

that

field.

The

re-

established a savings department about a year and one-half ago, and we

have found

it a very profitable adjunct to our business.
say that with the exception of the first announcement, wliich was made ver.v general, through an attractive booklet of original cuts and illustrations, we
have not done any advertising of the savings department whatever, except through our general pamphlet,
but in our city of ir)0,000 people there has drifted to us
within a year and one-half $400,000 of savings deposits
which was valuable not only directly, but through other
business which they have brought to us. We have a
safety deposit department, and a bond department, and

may

all tliis has helped very materially also.
Quite a number of our savings department customers have rented a
?5 or .^lO box, and not only put into it their papers, but
through fears of impaired credit resulting from the public expressions of the last few years, they have put a

money in as well. Now we have been able to trace a
good many deposits out of the safety deposit department
into the savings department, and out of that into bonds
and mortgages, and from the bonds and mortgages into
Jittle

the trust department, so that

are very well satisfied

and very well pleased and are thoroughly convinced
that the savings department is a good thing.
James W. Day, of Reading, Pa.: Mr. Chairman, I did
not expect to make any remarks here to-day. I have
only been in the Trust Company business for a year,
but I have had a little experience in the savings bank
business. We are in a little town of but 18,000 people.
Of course we struck first the panic of 1892, and then of
189t>, but by that time we had about $190,000 of deposits,
and about a year ago this Trust Company, of which I
am a member, was organized. Our trustees have become very liberal in regard to the withdrawal o( deposits in our savings department, and now the question in
my mind is whether our directors are not making a
mistake. A savings banli should have very stringent
rules about withdrawing deposits. I know that in 1896
there was a run on our savings bank and the withdrawal
rules were in force, but we paid out about 20 per cent,
of oiu" deposits in three months. Before the end of six
months we had recovered all but about 10 per cent, of
that amount. There was so much said in the campaign
speeches about the savings bank depositor that people
became alarmed. That is the trouble with a savings
bank.

deals with a class of people very easily fright-

and they follow like sheep in many cases. Very
stringent withdrawal rules should be applied. I think
our directors are malcing a mistake as they are making
very liberal rules about withdrawals, and when they
ened,

need a stringent rule

will be too late.

Now
we

as to advertising, we follow both methods, but
use tlie newsdo not use circulars very much.

we use them with liners and news items and
contract by the year
advertising columns.
at so much a line and change the reading matter very
frequently. At the time of our organization the newspapers, but

not

tile

papers were as full as we could get them, and then, being
a town institution, our newspapers gave us a great deal
of attention for some little time. As I have said, we
have only been in the Trust Company business for about
a year, and the discussion we are having will be of great
service to me. We find our attorneys are a little shy because they do not realize that they retain their position

They think they are giving
and that the attorney of the
Trust Company takes their place. We have been trying
to dispel their idea that we take the work from the attorneys and are successful. The savings department, if
properly managed, is a good thing.
There is another branch of trusteeship which has
as attorney for the Trust.
up a part of their business

A gentleman has
been suggested to me in one case.
payable in ten years.
taken out a life insurance policy
He came to me and said what sum will you take to guarantee me each year enough to pay this insurance policy,
including principal and interest, so that at the end of the
time the amount due will just be the amount due on the
policy ? Of course it is a qVicstlon of what contract you
want to make. We as an experiment took this at 2^4
per cent. He said the life insurance company would
take it at 3 per cent. I would like to know whether any
others have begun doing that branch of business and
what they think of it.
Mr. Breckinridge Jones: I Avould like to say a word
on the savings bank question, as we have in our company about eight to ten thousand depositors in that department. There is one great advantage. It is a great
political argument, and when we come before the Legislature on any matter, why we stand up before them,
and

tell

them we are the

institution of the people

and

TRUST COMPANY SECTION.
not the rich men's institution. We try to show them that
we are a popular institution and as a matter of fact we
are. Our institution is in sympatliy with the people, we
give employment to labor, we tal^e their deposits, and
in other ways in toucli with the concerns
of the people, and in such a way that we are protected

keep ourselves

it comes to any adverse legislation, and we have
found our savings department a benefit to us in this
way, in addition to the other ways which have been

wlien

mentioned.

PRINTING THE FOIIMS A^D BLANKS WHICH WERE ON
EXHIBITION.

Mr. Breckinridge Jones: I would like to draw your atmatter of these forms that are
here. Thej' represent a great deal of work on behalf of
the gentlemen who brought them here and are of great
value to you, gentlemen, as well as those who are absent.
It will be impossible for all of you to examine
these forms, because it is a matter of a week's work to go
through and examine them singly. The suggestion has
been macje that it would be of great advantage to the
members of the Section if we could have these forms
jjrinted, and the copies belong to the section, and then
tention, gentlemen, to the

sell them to members of the section at stich a price as
would make the enterprise take care of itself and leave
a sufficient number on hand for members who may hereafter come in. Of course it would cost very little more

one thousand copies than to print live hundred.
do not knoAV what it would cost. Until they were
gathered here we had no opportunity of getting any
printer to make an estimate. But for my own part, and
my own company, T should be very glad to have printed
copies of these forms, whether it cost $10.00 or $20.00, or
$50.00, or even more, and I think it would be money very
well spent. In starting our company I spent over $100.00
in going around to find a system adapted to our work, and
found there were no two institutions who had books kept
in the same way, practically none of them were very
comprehensive, they simply represented a beginning, and
a growth, wiih little things tacked on from time to time,
and had not been systematized on some general plan that
would be satisfactory and suitable to a large and small
business. At the same time I think the books of the
Northern Trust Company, of which Mr. Heurtley was
and still is Secretary, were the most complete set I saw.
That is taking it all through in all its varying details.
The books of the Fidelity Company, of Louisville, were
also very complete in their system.
Now 1 would like to have some expression as to what
your wish is.
to print
I

First, to get

some general expression, how many

you gentlemen would favor the idea of having these papers printed with the understanding that you could have
a copy of them in your office at home. All in favor of

that—
Mr. Borne: I would like to ask whetlier it Avould not
be well to ascertain whether the companies who have
been kind enough to liave these brought here for examination would be agreeable to having that done.
Mr. Breckinridge .lones: Some talk has been had on
that subject, Mr. Borne. There has been no ob.iection
urged. The idea is if t'.ies(> forms are printed the name
of the

company

will be left out in the printing, so that

would be merely a form

of books

and

entries, etc.

Mr. Heurtley. your company is represented here, would
jou have any oljjection to these forms Ijeing printed?
Mr. Arthur Heurtley: No, sir.
Mr. Borne: I make a motion that the matter be left in
the hands of the Executive Committee, and let them exrrcise their discretion in the printing of these forms and
distributing them, if they find it can be done on terms

make the venture self-supporting.
Mr. Breckinridge Jones: It was looking to that, Mr.
Borne, that I would like to get some expression from the
gentlemen here. It would be quite expensive to do the
whole work, and I would like to get some idea as to
whether it would be self-supporting or not. What would
that will

the work could be gotten, at,
do not know that it would cost
say, $25.00 a copy?
that. We merely want to save the time and expense of
having to write around.
How many of the gentlemen would be willing to subscribe at $25.00 a copy if these books were printed?
;Mr. A. G. Hodenpyl: I would like to offer an amendment to that motion, to the effect that the Secretary be
instructed to receive an estimate of the cost of having
these forms printed and then communicate with every
member of the Section, those present and those not present, and if he receives a sufficient number of orders, that
he proceed to have the forms printed, otherwise not.
Mr. Borne: I accept the amendment.
The motion was duly seconded and unanimously caryou, gentlemen, think

ried.

Mr. Breckinridge Jones: It is understood, of course,
gentlemen, that these exhibits will remain here all day
to-day and all day to-morrow, for you to look at.
Mr. Breckinridge Jones: Is there any other general
business to bring before the Section? If not we will proceed.

James W. Day: I have seen this morning at Cleveland
here in the Guardian Trust Company the most complete
system that I have ever seen, and if the Secretary will
get suggestions from the various members of the Section
as to the best system, so that the system printed will be
the latest, it would probably be better. This is merely a
suggestion.
Mr. Breckinridge Jones: Yes, I think it would be well.
I met this morning with several gentlemen who told me
of a trust ledger which is very different from the one we
have, and so we would be glad to ask you all, if you have
any suggestions in reference to this matter, if you will
kindly address a letter to the Secretary, he would be
very glad to follow your suggestions, so the book when
printed, if it is decided to have it done, will be as complete as possible.
I take it the idea would be to have these books printed
and distributed only to members of the Section. The
books would not be for sale or distribution to any outsiders but only to the members, so that we can strengthen the Section in that way.
I presume the Secretary can also look into the matter
and see if the form can be copyrighted. I think, however, that this is a matter that can be left entirely to the
General Secretary.
Mr. E. E. Foye, of the Old Colony Trust Company,
Boston: Mr. Chairman, Why would it not be well at the
same time the book is printed to have the special forms
for registering of stock, also deposit slips, loan accoimts
and such things as that, printed separately, so that if a
man did not want to buy the whole book he could buy a
portion of it. A man may have a special department,
and there might be some things that he would like to
have a form of to put in that especial department. As
for ourselves we have so many departments that with
only one book we perhaps would not know where it was
and would not be able to find it. Now if there were different forms for the different sections of the business gotten out, it would be much preferable to us, and it occurred to me that it might be so to the other members.
We have forms in our transfer department tliat are
someAvhat different from the forms on exhibition here,
especially for stock transfers. We have some 2S men in
our transfer department, so that we have shoitened our
forms there considerably. So it simply occurred to me
that it might be well to have at the same time and with
very little additional expense these special forms bound
separately. I would be very glad for tlie Old Colony
Trust Company to furnish any of our forms at any time.
AVe have a special form of transfer book, we have special forms for deposits of securities and reorganization

and subscription agreements and all the dillerent forms
that are in vogue to-day, and we would be very glad to
furnish lliein at any time.
Mr. Breckinridge Jones: I think that is a very valuable suggestion, and we would be very glad if you would

BANKERS' CONVENTION.

furnish iliose forms of the Old Colouy Trust Compauy to
the Secretary. It is possible that the Secretary may have
certaiu parts of the book bouiul separately, so that they
could be distributed auioujj the different departments of
the business. I think Mr. Ileurtley, who is the Secre-

« am
i'*'

not going to make one. I have only to say that I
appreciate the compliment and the honor, and I am
glad to be connected with you another year. My term

was

up,

and

suppos(Kl

duties were over.

can very easily attend to that matter, in connection

Mr. Breckinridge Jones: Nominations for Vice-Chairman are now in order.
Mr. Arthur Ileurtley: I would lilvc to place in nom-

with the Executive Committee.
A\'. F. Comstock. of the Fidelity Trust Company, Kansas City, Mo.: I want to ask if it would not prove confusing if all the systems were published, particularly if
they are duplicated, or what is the idea of the gentlemen V
Mr. Breckinridge Jones: I presume where they are
duplicates reference can be made to them. Where they
are different systems the idea would be to publish them
all, but where they are merely duplicates reference could
be made to some other part of the book.

ination as Vice-Chairman of this Section a man who is
not only well known to every member of the Trust
Company Section, but also to every member of the
American Bauk(n-s' Association, a former President of
tliat Association and a man who has always taken a
great deal of interest in Trust Company matters. He is
at present Cliairman of tlie Executive Committee of the
Fifth Avenue Trust Company of New York Cit.v, and I
talce great pleasure in placing before you the name of
Mr. Joseph C. Hendrix.

tary of the Trust
here,

Company whose work

on exhibition

Mr. Breckinridge Jones:

Nomination and Election of Officers.
Breckinridge Jones: Anytliiug further, gentlewe will proceed to the next in order on
the programme, which is the nomination and election
of three members of the Executive Committee to serve

Mr.

men

If not,

for three years.

Chairman.

The
tion

first

and

order of business then will be the nominaChairman of the Section. Nom-

election of a

inations are

now

in order.

Mr. John H. HoUiday: Mr. Chairman, I nominate
for that position Mr. Anton G. Hodenpyl, and it gives
me great pleasure to do so. Mr. Hodenpyl has been
very active in bringing the Trust Company Section to
its present prosperous condition, and I think it will be
for the liest interests of this section and a source of
gratification to the individual members to i-etain Mr.

Hodenpyl's active connection with it.
Mr. Breckinridge Jones: Are there any other nominations ?
If there are nr) other nominations a motion
will be in order instructing the Secretary to cast the
ballot of the entire Section for Mr. Hodenpyl as Chairman.
Mr. Borne: I move that the Secretary be instructed
to cast the ballot of the Section for Mr. A. G. Hodenpyl
as Chairman of the Section for the ensuing year. This
motion was duly seconded, and the motion was unanimously carried.
[Cries of Speech, Speech.]
Mr. A. G. Hodenpyl: The Secretory and

kind friends say " Speech," but our time

some
short,

and

may

not be

Known

to all

ganization in Detroit three years ago suggestions had
been made to the Executive Council that a section of
the Trust Companies be formed, but it had not met

with very

Mr. Breckinridge Jones: We have to elect a Chairman of the Section, a Vice-Chairman of the Section, and
The Exthree members of the Executive Committee.
ecutive Committee consists of nine members, and the
Chairman and Vice-Chairman are cr oificio members of
this committee. The nine members are divided into
three classes, and three are elected each year, and those
elected serve for three years, so that two-thirds of the
committee are the old committee at all times.
Possibly it would be well for us to proceed first to
the election of a Chairman, and then to the election of
a Yice-Cliairman, and then elect three members of the
Executive Committee.
Three of tlie retiring officers are not eligible for reelection. The members of the committee for the one
year, or those expiring at this time, are Messrs. John H.
HoUiday, George H. Southard and Anton G. Hodenpyl.
Their terms expire, and they are not eligible for re-election. The two-year class contains the name of Mr.
Francis S. Bangs, who has tendered his resignation, by
reason of severing his connection with the State Trust
Company, and this has created a vacancy and which
must be filled at this time.
The other members of the Executive Committee who
ha\e still a year to serve are Mr. Henry M. Dechert
and Mr. Gordon Abbott. Those having two years longer
to serve are Mr. Frank B. Gibson, Mr. Otto T. Bannard and Mr. Arthur Ileurtley, of the Northern Trust
Company, of Chicago. Mr. Bannard is also the Vice-

of us that the existence of the Trust Company Section is largely due to Mr. Hendrix. Prior to the or-

much encouiagemcnt,

so no thirty days' noby the constitution. Mr.
Hendrix was Chairman of the Executive Committee at
that time, and, as such Chairman, he brought this matter up, and secured the unanimous consent of the Convention, and it was all done in about three minutes. It
was because of his cordial co-operation with the Tiust
tice

was

given, as provided

Company men

tliat

this Section

was formed. He was

the organizer of one of the Trust Companies in Brooklyn,
then going over to one of the national banks of New
York: since which time he has been connected, as Mr.
Ileurtley lias said, with the

pany

New

P^'ifth

Avenue Trust Com-

York.

motion was then made, seconded and unanimously carried that the Secretary be instructed to cast
the ballot of all present for Mr. Joseph C. Hendrix as
Vice-Chairman of the Section for the ensuing year.
;Mr. Breckinridge Jones: We will now elect three
members of the Executive Committee. It has not been
the custom to appoint a Nominating Commitee, but as
our body was small, that these things might be taken
up in the general meeting and be subject to discussion.
Nominations for three members of the Executive Committee to serve for three years are now in order.
Mr. Anton G. Hodenpyl: I desire to name as one
member of the Executive Committee, to serve for three
years, Mi-. William G. Mather, President of the American Trust Company of Cleveland, Ohio.
Mr. Breckinridge Jones: Mr. William G. Mather, of
Cleveland, is in nomination. Any other nominations ?
Mr. John W. Barr: Mr. Chairman, I desire to place
in nomination as one member of the Executive Committee Mr. Aniilla Cox. of Louisville, Ky.
Mr. Breckinridge Jones resigned the Chair at this
time temporarily to the Chairman of the Executive Committee, Mr. A. G. Hodenpyl, and took the floor. He said:
I should like to nominate, gentlemen, for one member
of this committee, Mr. James B. Case, of St. Louis.
When the Trust Company Section was formed there was
a letter sent out to the various Trust Companies Avith
the names of about fifty Trust Companies signed to it.
Among them was Mr. Case. It has been my desire and
feeling that in the history of the Trust Company Section there should be found in the names of the committees and officers, some time or another, the names of the
gentlemen who signed that original letter. Most of them
have been represented at this time. Among those who
liave not yet been honored is the gentleman whom T
liave mentioned and Avhom I again name, Mr. James B.
Case, President of tlie Lincoln Trust Company, of St.
Louis, Mo.
:Mr. James B. Case, of St. Louis: Mr. Chairman, I
greatly appreciate the courtesy on the part of Mr. Jones,
coming as it does from a competitor in my own city,
and I know it is made in good faith, and in a kindly

TRUST COMPANY SECTION.
but there are otlier considerations tliat enter liere,
have a nomination to malvo myself. Mr. Jones
has alluded to the formation of the Trust Company Section in connection with The American Bankers' Association. A few here know that it was not an easy task
to have had this Section formed as a part of the Bankers' Association. Many of us know that there was a
feeling of antipathy against Trust Companies, and that
antipathy came from the banks. They felt that their
preserves were being encroached upon. I mention this
matter without going into detail, as there is no hard
feeling about it. I simply allude to it in this connection,
that it required delicacy of handling, and while we had
the co-operation of that broad-minded man, Mr. .Joseph
C. Hendrix, yet the quiet, delicate handling was done
by Mr. Breckinridge Jones, of St. Louis.
Now, gentlemen, our work is not done yet. and we
want to have the same delicate hand on that Executive
Committee. He has traveled over the road, and he
knows every stump and stone in it. and he can be of
great assistance on that committee, simply as a member

spirit,

and

it.

sure of that.

the representative

whom

want from St. Louis, because he can be most effective,
and the personality can afford to stand aside. In other

words, as far as the Lincoln Trust
cerned.

Company

con-

young and can wait.

AVe want Mr. Jones on there for the sake of this Aswork there is to be done, and for the
St. Louis representation of it; in all he is the proper
person. Xow let us lay aside all questions, and please
accept it that way. There is nothing behind it, and I
mean just what I say. It is the right thing to do. The
other members of the Committee know it is the right
thing to do, and as I say, I do it witli the greatest cordiality, and I do it for the sake of this Association and
I therefore decline in favor of Mr.
its best interests.
Breckinridge Jones.
The Chairman, Mr. Ilodenpyl: Mr. Case has positively declined the nomination. We would like to have Mr.
Case be with us and we would work together, and his
advice and assistance would be of much service to us.
At the same time, it is just as Mr. Case has said, we
can't part with Mr. Jones. He must stay with us.
As Mr. Case has withdrawn, and Mr. Jones has been
nominated, you have before you the names of three
members, who have been nominated as members of the
Executive Committee to serve for three years. If there
are no other nominations, it will be in order to have a
motion directing the Secretary to pass the ballot for the
three candidates as named.
A motion was made, seconded and unanimously carried that the Secretary be directetl to cast the ballot of
all present for Messrs. Mather, Cox and Jones as members of the Executive Committee to serve for the next
sociation, for the

three years.

Mr. Breckinridge Jones: I am very much obliged,
gentlemen, for the honor, at the same time it was not
anticipated. 1 wanted very much to have Mr. Case on
the Committee. By reason of my past association with
ycu, my interest in the Trust Company Section will
never cease. I shall look upon my connection with this
Section, and the gentlemen in it, as one of the best parts
of my life. My connection with this Section has been of
much enjoyment and benefit to me. There is no city
where a Trust Company exists in which I cannot go

and

feel perfectly at

home.

appreciate the honor you have conferred upon me,
and feel it is something I should be proud of, to have
been placed among tlie leaders in this great movement.
I believe that in years to come when one of my little
boys comes to looking back, and finds in the great organization of the financial interests of this country his
I

father's name connected with its early days, he would
have reason to be proud, and if he is in the Trust Company business, he Avill meet, I am sure, the sons of
many of the gentlemen here to-day.
Mr. Breckinridge Jones: Mr. F. S. Bangs, who was at

one time Chairman of the Section, and who is a member of yovn* Executive Committee, having severed his
connection with the State Trust Company, of New York,
has offered his resiguatioia as a member of such Committee. I regret to say that Mr. Bangs is in ill health and
lias been for a long time and even now is in the Adirondack Mountains. Having severed his connection with a
Trust Company, he, of course, by that reason, severs
his connection as a representative, and has offered his
resignation. We regret exceedingly to part with Mr.
Bangs. He has left the room now, I believe, and I can
say that he has impressed all of the members of the
Section as one of the most charming gentlemen we have
met. He is a representative of the very highest class of
the American citizen. His resignation was tendered and
brought before the Committee last Spring. We held it
over at that time, hoping that there might be some action
by which we might consider Mr. Bangs as still with us,
but now I think it would be in order to accept Mr. Bangs'
resignation, and 1 very much regret to say that a motion
to that effect would be in order.
A motion was then made, seconded, and carried, that
the resignation ofLered by Mr. F. S. Bangs as a member
of the Executive Committee be accepted, with much regret.

Mr. Breckinridge Jones: That leaves a vacancy on the
Executive Committee that ought to be filled now, and
nominations are in order.
Mr. Frank B. Ciibson: I would like to put iu nomination Mr. .John E. Borne, of the Colonial Trust Company
of New York. I believe he would be of valuable assistance in the work of this Section, through the Executive Committee.
This nomination was duly seconded, and there being
no other nominations, by vote of the Section, the Secretary was instructed to cast the ballot of all present
for j\Ir. J. E. Borne, to fill the vacancj' caused by the
resignation of Mr. F. S. Bangs.
Mr. J. E. Borne: I beg to express my sincere thanks
for the honor you have conferred upon me, and for the
privilege of sitting with the Executive Committee. I
consider it a privilege to come here. This is the first
time I have had the pleasure of participating in the
proceedings, and I consider it a great honor to be elected
to serve as a member of the Executive Committee.
Mr. Breckinridge Jones: I want to say, gentlemen,
that while we have a separate Section of the American
Bankei's' Association, we are still a member of that Association. We desired this more so that we could discuss matters pertaining particularly to the Trust Company business. We have felt, however, that our Section should be represented on the Executive Council,
and last year it was suggested and an application was
made to the Executive Council of the parent body to
instruct the Nominating Committee that they should put
upon their list of nominations for members of the Council
some member of the Trust Company Section, such
member to be suggested by the Trust Company Section.
I had the honor to be suggested last year and have tried
to see that anything affecting Trust Company matters
was properly taken care of. Our idea was that as they
have ten men to be elected each year, we would like to
have a representative of the Trust Company Section,
selected by the Section, and be ready to bring to the As.sociation the interests and infiuence of the gentlemen
who selected him. In other words, we would like each
year to nominate one of the ten, so that we would have
three members out of the thirty. We felt it was a courtesy to the Section. Tills matter was brought up before the Executive Council night before last, and the Executive Council passed an order of that character, suggesting to the Nominating Committee that they should
put upon the list a gentleman selected by this Section.
As the Section was not to meet until this morning at 10

and the Nominating Committee were to meet at
9 o'clock, after conferring with a number of the Trust

o'clock,

Company gentlemen, we suggested

name.

But the

BANKERS' CONVENTION.

Nomiuatiiig Committee, so 1 have beeu iuformed during
this session, has seen fit to put upon the list two other
Trust Company gentlemen, Mr. Alvah Trowbridge, of
^ew York City, being nominated as Vice-President.
Theyconsidered he would be a representative of the Trust
Company, and also Mr. George F. Orde, of the Northern
Trust Company, of Chicago, was nominated. Neither of
these was the gentleman suggested by the Section as

our representative, but the Nominating Committee has

made

tnose nominations.

1 thinlc this

Section

entitled

have that representation, and that next year Ave ought
to see that we meet in sufficient time and numbers to be
able to make a strong effort to see that we get what we
are entitled to. and that if any man is put on to the
to

Coimcil as tlie representative of tlie Trust Company Section, he is the one selected by the Trust Company
Section, and will stand as our repi'esentative. I merely
make this report to you because it is a matter you are
entitled to know.

When we have adjourned, the Executive Committee,
most of Avhom are in the room, will please come to the
table here. The Executive Committee are to select their
Chairman and the Secretary of the Section.
Is there any other business?
SUGGESTIONS AS TO TOPICS FOR NEXT YEAR'S MEETING.
Mr. B. G. Witt, of Henderson, Ky.: I trust the members of the Section have listened, as I have, with a great
deal of pleasure and interest to the two papers read before the Section on the origin and growth of the Trust
Company movement in Pennsylvania and New York, but
there are other States tliat we would like to hear from,
and perhaps it might be proper to suggest to the Executive Committee that they take steps to have this subject
covered next year. We are malcing history now, and it
would be a matter of a great deal of interest to me to
have a history of the Trust movement of the whole
country to go into our records where it can be presei"ved
by the members of our Section.
Mr. Breckinridge .Tones: I think you will find that
that

tne ]TOlicy of the committee, but

we want

also

a few other ]>apers of general interest. An effort was
made to have the growth of the Trust Company move-

ment

in ^Massachusetts at this meeting,

possible.

Our

puij)ose

is,

was im-

out

you
from

will,

time to time, give tliese reports, so as to preserve the
liistory of tlie Trust Company movement all over the
country.

Breckinridge Jones: All of you gentlemen who
will i)lease register before you leave
the room. Mr. Fleurtley tells me that some members of
the Association have not enrolled themselves as members of the Section. If there be any such, we will be
glad to have you put your names upon the roll of membership in the Section. There is no extra charge, and
we simplj' Avant your name on tlie mailing list. And it
is possible that there are some Trust Companies here
Avho are not members of the parent organization, and if
so, we Avould be very glad to liave them join the American Bankers' Association, and then become members of
the Trust Company Section. We hope that next year we
Avill liave a very large and enjoyable meeting.
If there
is nothing further, gentlemen, a motion to adjourn will
be in order.
The Section then adjourned.
INIr.

liave not I'egistered

jrEETING OF TUK EXECUTlA'E COMMITTEE.

The Exe<

Committee Avas called to order by the
Chairman, immediately after the adjournment of the
Trust

utive

Company

Section.

motion, duly seconded, Mr. William G. Mather,
of the American Trust Company, of Cleveland, was

unanimously chosen as Chairman of the Executive Committee for the ensuing year.
On motion, duly seconded, Mr. Arthur Heurtley, of

was unanimously
Committee for the en-

the Northern Trust Company, Chicago,
elected Secretary of the ExecutiA'e

suing year.
There being no further business, the Executive Committee adjourned subject to the call of the Chairman.

BUSINESS

BASED ON BALANCES

AND

but

will find

will read the report of the committee, that

THE FOURTH NATIONAL
BANK OF THE CITY
OF NEW YORK

WANTS

and you

RESPONSIBILITY.

Full text of Commercial and Financial Chronicle : September 16, 1899 : Bankers' and Trust Supplement, Vol. 69, No. 1786

FRASER