[Volume XXV
THE CHICAGO BANKER
28
Deposits
$19,045,742
Surplus
$1,500,000
Capital
$1,000,000
The National Commercial Bank
ALBANY, N. Y.
Robt. C. Pruyn, President	Edw. J. Hussey, Cashier
Grange Sard, Vice President Walter W. Batchelder, Asst. Cashier
John E. Walker, Vice President Jacob N. Herzog, Asst. Cashier
Capital, $1,500,000. Surplus and Profits, $1,157,095
The Marine National Bank
Buffalo, N. Y.
GIVES special attention to accounts of banks and bankers. Collections sent us will receive prompt attention. Let us save you worry on troublesome items. Our service means less labor to you. We invite correspondence.
S. M. CLEMENT, President
J. J. ALBRIGHT, Vice-President J. H. LASCELLES, Vice-President CLIFFORD HUBBELL, Cashier	H. J. AUER, Assistant Cashier
Depositors* !^Guaranty by Legislation
Why should not the banking commission be placed on a civil service basis, so that once a man is on the board he should remain there regardless of elections and the political pie-counter? It is a poor banking department that has in its service men who have secured their positions through politics, and must be building political fences as they go over the country, and toward election give practically all of their time to furthering the political interests of some one “higher up.” The clerk in the bank is expected to earn his salary, and why not the examiner?
Chicago banks went through the recent panic in splendid shape, and this is attributed to the fact that after the Walsh failure of two years ago they organized their own system of examinations and supervision, and that it has been so successful in the time of panic is a strong argument for supervision free from politics. They found it advantageous to employ their own examiner; St. Louis followed the lead of Chicago; San Francisco has also fallen in line; and soon most of the large cities will have their own system. Why has this been found necessary? Because the present system has been found inadequate, and forced them to take measures for their own self protection. And self protection will drive all bankers to something new pretty soon.
The Georgia Bankers Association some time ago, realizing the weakness of their own system of supervision especially owing to the lack of sufficient examiners to thoroughly do the work, offered, as an association, to defray the additional expense necessary to add sufficient examiners, and this offer was refused.
A bill has recently been introduced in the legislature of Kentucky to have their board headed by two men, one from each of the two political parties which received the highest number of votes at the last previous general election, the appointment to be made by the governor. This is an admission of the taint of politics which has formerly entered into appointments.
Some few states have taken steps to make the governor, the secretary of state, the state treasurer, and in an instance or two an additional officer, the banking board, to the extent that they will as a body select the examiners.
But why should this not go even further?
In Three Papers
By C. F. Hamsher, Cashier of the Bank of South San Francisco
vised, that other states will realize the excellency, and the enactment will be held up as a model for future legislation.
Why cannot California be the state to shake off the shackle of politics and legislative red tape and frame such a bill?
It remains yet for some state to enact a bill framed by bankers who are fair-minded enough to want good, just and equitable laws, which will make banking safe and sound, and eradicate the speculator and the gambler, and which will protect the depositor in such a way that a bank failure will be unknown.
A California banker said to me when asked if the state association had ever endeavored to frame a banking bill,—“No, it’s too dangerous.” It is too dangerous for bankers to want good banking laws for self protection? Is it not too dangerous for them not to take this matter up ?
When the bankers association of some state becomes fearless enough to arise as one man and demand that politics be eliminated from the banking department, and that sane laws, wise laws, and just law's be enacted, then will that state get them.
It is dangerous? Why? Because politicians will oppose? Does not public opinion cut some figure? I will venture the assertion that if the California Bankers Association would go before the people of this state and ask for a complete abolishment of the present banking act, and for a new act, and by a campaign of publicity through the press educate the people to the need of new laws, it would result in a new and better law within another session or two of the legislature.
The banking interests of California with their total capital of nearly sixty-four million dollars, and total deposits of more than four hundred forty-three million dollars, can well afford to pay high salaries to good men,— bankers, not politicians, to systematize and thoroughly revise our present system of examinations.
(PART TWO.)
It looks at the present time as if the banker was between the devil and the deep sea; the devil on the one hand being the probable installation of postal savings banks which will vitally affect deposits in all savings institutions, and to a large extent the smaller accounts of commercial banks ; the deep sea being the present agitation for deposit insurance, with all of the complications which will necessarily arise. If we have postal savings banks thrust upon us the money will not be re-deposited in banks without adequate securities being put up for the safe return thereof ; and if we have deposit insurance each banker will be forced to be his brother’s keeper.
Much argument pro and con is advanced for and against the scheme, but we can well afford to consider whether it will prevent and free us from illegitimate and destructive practices of speculative or careless banking.
If it will prevent injurious competition, unsafe loans, speculative investments, and will provide for the observance of proper laws which have been or will be enacted, the personal attention of directors to the affairs of their institution, the proper use of commercial paper, the keeping liquid of the assets of a bank and not tying them up in long time investments, if it will result in a uniform banking law throughout the country, harmonizing state and national laws, and if it will result in a system of examinations non-political, and by competent examiners, then it would be a good thing; but will it do it? Many practical bankers will say “no.” If it will not result in these features we are no better off than we are at present, and we will each one have to contribute our proportion of losses for which we are in no wise responsible.
If the establishment of the plan would result in all of these splendid features, and they in turn will be the means of keeping losses at a minimum, why can not we have a uniform law covering these features without the deposit insurance string tied to it?
Sooner or later some state is going to come to the front with such a thoroughly excellent banking system, perhaps devising a uniform system of accounts which would enable an examiner to properly comprehend the bank’s affairs, so free from politics, and so wisely de-