[Volume XXV
THE CHICAGO BANKER
8
THE FARMERS’ AND MECHANICS’ NATIONAL BANK
OF PHILADELPHIA, PA.
427 CHESTNUT STREET
Capital .	.	$2,000,000.00
Surplus and Profits 1,270,000.00
Organized January i7, 1807
Dividends Paid . $12,637,000.00
officers:
Howard W. Lewis, President
Henry B. Bartow, Cashier	John Mason, Transfer Officer
Oscar E. Weiss, Assistant Cashier
ACCOUNTS Or INDIVIDUALS, FIRMS, AND CORPORATIONS SOLICITED PRESENT NUMBER OF STOCKHOLDERS 830
Your
Chicago Business
will receive prompt, careful and intelligent attention if intrusted to the
STATE BANK OF CHICAGO
ESTABLISHED 1879
Capital, ONE MILLION DOLLARS Surplus (earned) ONE MILLION DOLLARS
Active and reserve accounts of state banks and bankers especially solicited
H. A. Haugan, President	Leroy A. Goddard, Vice-President
John R. Lindgren, Cashier	Frank I. Packard, Asst Cashier
Henry S. Henschen, Asst. Cashier	Henry A. Haugan, Ass. Cashier
Samuel E. Knecht, Secretary	William C. Miller, Asst. Secretary
currency to the extent of 40 per cent of its capital, may take out emergency circulation against state, city, town, county, or other municipal bonds, or commercial paper, subject to a tax of 5 per cent the first month, and 1 per cent for each additional month until 10 per cent is reached. The total amount of notes outstanding including those based upon government bonds, shall not exceed the amount of the capital and surplus of the banks. Such banks must also have a surplus of at least 20 per cent. Notes issued against commercial paper cannot exceed 30 per cent of the unimpaired capital and surplus of a bank, and the paper must be double name running not more than four months. These will be accepted as collateral to the extent of 75 per cent of their cash value.
I will admit that in times like those of last fall and winter, the new emergency currency bill would tend to prevent hoarding because of the possibility of getting more money in circulation, but as a cure for the evils of our inelastic system, it is a failure. This was recognized by the astute senator whose name will be forever associated with the measure, and had the currency commission bill been so formed as to include in the commission, bankers and financiers, the inchoate movement among business interests outside of banking for a currency convention never would have started. I am informed that the project of these business interests is to call such a convention if dissatisfaction exists as to the performances of the currency commission. The question is well worth watching, and I would recommend that not only our members of the American Bankers Association, but the entire membership of this organization keep in close touch with developments in order that united and intelligent action can be taken if necessary to protect the interests of Michigan.
When you protect your banks you protect the people for your interests are theirs. Bankers point with pride to large capital and surplus. The true worth of a bank is not in dollars and cents so much as in the ability, (Continued on page 14)
printed in the Congressional Record—were mere partisan harangues.
We realize that our representatives in Congress are too intelligent to really believe that the bankers of the country would recommend a measure inimical to its welfare, yet the legislators carried their political methods so far as to fail to include in the currency commission bankers and financiers. The same spirit that turned down the well considered and carefully prepared currency plan of the American Bankers Association, dictated the formation of the currency commission. Amends were partially made, according to Senator Smith by the determination to associate the bankers with the work of the commission, but you will notice that it is in an advisory capacity solely. They will have no actual voice in framing the law that will revolutionize, if it does not reform our currency system. This clearly demonstrates the power of politics, and is a salutary lesson admonishing us that it is unwise to entrust the great interests of this state and of the country to politicians whose business education is not broad enough, or along such lines as to prepare them to conserve the great constructive forces of the country. Banks are recognized as public institutions and as such, they must fulfill their functions and serve the commercial needs of the nation.
I hold that the Aldrich-Vreeland measure inures principally to the benefit of the larger financial centers. It is true that if the individual national banks without the magic circle of the territory eligible to form national currency associations, have 40 per cent of their unimpaired capital in circulation, they can under the new law take out circulation on state, county, or municipal bonds to be approved by the Secretary of the Treasury. The clearing house feature of the bill shuts out all but the greater cities. Summarized this portion of the law is as follows:
National currency associations may be formed consisting of ten national banks, each with an aggregate minimum capital of five million dollars; any member of the association having outstanding United States bond secured
acute ever known, has carved for you a niche in the hall of financial fame. Not only did you weather the storm without a failure, but the deposits of the banks of Michigan between February 14th and May 14th of the present year show increases aggregating more than four million dollars over the same period of 1907, a remarkable record in the face of the business depression following the financial crisis. This demonstrates the fundamental soundness of business conditions in this commonwealth, and the solidity of its financial institutions.
Congress has left us as a legacy an imperfect, incompetent piece of financial legislation, permanent in no respect save the feeling created that congressmen and senators have become so saturated with muckraking antagonism to all things capitalistic, as to fear to pass any measure advocated by the bankers of the country, and to oppose a bill for no other reason than because bankers favor it.
It is unnecessary for me to emphasize the statement that the currency system of the country, practically untouched by legislation for 45 years, is defective. We all know it too well. It is a sad commentary on the efficiency of Congress to point to the fact that only through a panic and subsequent disaster and suffering can that body be induced to consider legislation that will remedy financial evils from which the whole country suffers. From out of the panic of 1893 came the adoption of the gold standard, and out of the panic of 1907 came the so-called emergency currency bill, which would have been more objectionable than it is, had it not been for the able speech in Congress made by our distinguished senator from Michigan, Hon. William Alden Smith. It was his clean cut, masterly presentation of the matter that caused to be expunged from the Aldrich bill the eligibility of railroad bonds as bases of emergency currency circulation. Facing a presidential campaign, Congress could not be persuaded to pay earnest attention to needed legislation. Following the custom of sessions preceding national elections many of the speeches made—or supposed to be made and