THE CHICAGO 'BAJVK.E'R
Founded in 1898
Volume xxv	CHICAGO, SEPTEMBER 12, 1908	Number n
Banking Conditions in Pennsylvania
thought of practical minds to bring about improvements in methods for our own administration and for the interchange of business the world over.
The older a country grows the more conservative it becomes, the more averse to changes and innovations.
Usage in many cases seems to have the force of a supreme court decision and yet many of our fellow bankers are standing aloof from adding strength to this and similar associations by their presence and advice and joining in the interchange of experience. Trades and professions have their oft recurring meetings and such an important branch of business as banking ought to have every bank and trust company on its roll of membership.
John J. Mitchell
John J. Mitchell, president of the Illinois Trust & Savings Bank of this city, says there is general improvement in the business situation. “I have talked with several railroad officials during the past few days and they invariably report better conditions. The Illinois Central people tell me traffic is increasing steadily, and I am in receipt of the same information from the Burlington and St. Paul roads, the latter in particular, where crops are beginning to move. The officials of the latter companies say that if the gains keep up there will not be an idle car on their lines in thirty days.” Mr. Mitchell declared that the grain business will lead to a considerably larger merchandise tonnage on the railroads and that earnings will increase from now on.
W. G. Edens
W. G. Edens, chairman of Group Committee, Illinois Bankers Association, is in receipt of information from Chairman James A. Easley, of Group Seven, that the annual meeting of that group will occur at Spring-field on Tuesday, September 15th. This will complete the group meetings for this year in Illinois and the Springfield meeting should be well attended.
H. W. Lewis
Col. H. W. Lewis, president of the Gold Savings and State Bank, Wichita, Kansas, spent Wednesday in Chicago. Col. Lewis reports crop conditions as being very favorable in Kansas and predicts they will have a good average crop. Also that bank deposits are running high at this season of the year with every indication that we are to have an early return to prosperous times.
V»
Pittsburgh Bank is Closed
Pittsburgh, Pa., September 5.—The Cosmopolitan National of this city suspended to-day. The bank was capitalized for $500,000, and, while important, was not among the leaders in Pittsburgh. Its deposits were less than $1,000,-000, according to recent reports. The Mount Washington Trust Company, an allied concern with $125,000 capital, and $60,000 in deposits also closed. Several of the officials in the two banks were the same individuals.
John B. Jackson of Pittsburgh reviews the year’s progress in the ¿reat Keystone Commonwealth — One of the ablest state financial papers of the year
of the senate and the house, and men having daily and practical experience in this most abstruse and delicate branch of mercantile life. Usually bills of this kind are prepared after hearings had in committee rooms and which are necessarily formal and wanting in that free and sociable discussion which may be given the subject by a body of men removed from the restraints of official life, and meeting in a way to promote the freest interchange of views, uninfluenced by partizanship, as the laws requiring revision are not now party ones but the gradual evolution of a system that had its origin in 1863, more than a generation ago. The legislature not having been in session during the past winter, there are no new laws to report governing state banks and trust companies, and the amendments made at last session seem to be satisfactory. Old as banking is, new questions are constantly presenting themselves or old ones reappearing in new guises, or men ignorant of the experience of other times urge the adoption of oft tried expedients or methods. Every country perhaps must pass through an experimental period, as witness the fiat money of France, or our own colonial depreciated currency, or the narrow escape we had from a flood of greenbacks.
Now a question of governmental guarantee is coming to the front and being urged with considerable force. It would be out of place for the chair to express an opinion on this or any other subject to be presented at this meeting of the association. The question is to be fully discussed by papers, and it is hoped a subject so important will be most carefully considered before being enacted into laws. Hasty legislation is always to be deprecated, and a matter involving such enormous responsibility upon the past of national and state governments demands most careful and thorough investigation before action be taken.
We were greatly startled this year by several serious defalcations in this commonwealth, and as usual the finger of scorn was pointed at bankers or men employed in banks, but these incidents only serve to show the honesty of men of our class. Thousands handle millions of dollars yearly whose accounts are silent witnesses of the fidelity of officials and employees, but of whom nothing is ever heard. Indeed it seems fitting at this time to pay a tribute to the thorough integrity of our clerks who discharge their duty year after year and who always present a clean sheet. Strive as we may for good systems and thorough examinations, after all is said and done it is the personal equation upon which we must depend. With the best methods ever devised, we yet want men about us with clean lives, men who can greet us in the morning with a clear bright eye and an honest smile.
Trust companies are not the only institutions that may claim the word “trust” as applicable to them alone, for banks are trust companies as well, to which the people commit their millions. Banks are as necessary in our commercial life as the mails and the subject of constant study and evolution, and to those annual meetings of this and similar associations is brought the best
Wm. Sumner in his work entitled “American Currency” stated that panics might be expected every twenty years, citing the panics of 18x7, 1837 and 1857 as proofs of his belief in the periodic recurrence of these disturbing events. He gave as the assumed reason (I quote from memory) that it required about twenty years to recover from the effects of one and for the oncoming generation to realize how much wiser it is than the one gone before, and in the madness of egotism to enter upon another period of speculation only to find the path of the speculator is a hard one. We, who have to do with financial conditions more intimately than some others, realized last year that we are living in a more active age than that reviewed by Sumner following the panic of 1893 and in fourteen years experienced a panic the worst of its kind that many of us can recall. It is only fair to say that to many engaged in banking there had been signs of coming trouble for some months, but the storm proved a heavy one and the shores of the financial sea have strewn along them many wrecks and much more jetsam.
As in previous panics there was a great scarcity of currency, depositors hoarding their money in safe deposit vaults, in cupboards, the traditional stocking or in some imaginary safe hiding place. To meet this shortage resort was had, as you all know, to clearing house certificates and to other unlawful expedients. Necessity knows no law and fortunately the courts have been spared the unpleasant duty of enforcing a law, the violation of which certainly did much to mitigate the severity of the panic. It is hardly necessary to add that reference is here made to scrip or shinplasters issued by large firms or contractors and which I believe served their purpose admirably. More forcibly than ever before was demonstrated the need for greater elasticity in our currency. Good as our banking system may be, it has been found sadly wanting in this one particular to a very marked degree. Congress was implored to legalize clearing house certificates and to pass a law to enable banks to use change or currency that would meet the heavy withdrawals of bank notes or specie when the people were seized with a dread of being without the absolutely necessary money for daily demands. The two houses of Congress were not in harmony and the hope that immediate relief would be afforded was not realized. Under our form of government, the lawmakers being the representatives of the people and charged with the duty of enacting laws expressive of the people’s will, it is not strange that action was so long delayed, for there was, and doubtless is, great diversity of opinion as to the best method of meeting the demand for greater elasticity. Late in the last session there was enacted the “Aldrich-Vreeland Bill,” a compromise, of course, between the two branches of Congress, and a bill which has been harshly criticised, but whose merits or demerits can hardly be judged of till tried. Before, however, a trial may be had, it is possible—and let us hope probable—that a law will be on the national statute books that will have the endorsement and support of a very large majority of bankers throughout the country.
To get the views of thoughtful men away from the excitement of congressional debate, a committee was appointed consisting of members