[Volume XXV
THE CHICAGO BANKER
6
Pittsburgh has 31 National Banks, 25 State Banks and 38 Trust Companies, with total deposits of over $360,000,000. The oldest of all these
financial institutions, having been in continuous existence for 98 years, is
J. M. RUSSELL
1st Assistant Cashier
J. D. AYRES Assistant Cashier
Tt\e
Rank of Pittsburgh
-L/Natioiral A Association w
Surplus $2,800,000
“THE BANK THAT HAS GROWN UP WITH PITTSBURGH” ESTABLISHED 1810
WILSON A. SHAW President
JOSEPH R. PAULL
Vice-President
W. F. BICKEL Cashier
Capital $2,400,000
.	.	President
. Vice-President .	.	. Cashier
Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier
$31,000,000
C. H. HUTTIG .
W. B. WELLS
G.	W. GALBREATH J. R. COOKE
D’A. P. COOKE R. S. HAWES
H.	HAILL .
J. F. FARRELL .
3rd NATIONAL
OF ST. LOUIS BANK
Capital, $2,000,000	Surplus, $2,000,000	Deposits,
---------- ACCOUNTS SOLICITED -----
to judge of the financial needs of the country than men whose sole profession is politics. There is no conflict between the interest of the people on one side and that of the banks on the other. Their interests are absolutely identical. The prosperity of the people means the prosperity of the banks and vice versa. Those who preach a contrary doctrine are enemies of the country. Such crude and impossible devices as the plan of guaranteeing all bank deposits show the vague and absurd notions which prevail in certain quarters. The fallacy of this scheme will be fully explained to you to-morrow by an authority eminently qualified to deal with questions of this nature.
I now come to that feature of the panic which has been referred to as the credit crisis. Credit means confidence. Nothing is more essential to the prosperity of the community and the healthful pursuit of business than confidence in the soundness of banks and the integrity of their management. There is only one way to win it and that is to deserve it. No other calling is under greater obligations to follow the strict path of honorable conduct than the banker’s. On his faithfulness not only his own welfare but the welfare of the community largely depends. The sins of a few speculators who invaded the field of banking made the whole country suffer. All the more reason why we should jealously guard the honor of our profession. It will be to the lasting credit of the New York Clearing; House Association that they promptly applied the knife and cut out the foul parts before the cancer had eaten deeper into the body. In this connection I may, without impropriety, refer to the action of the clearing house of this city in employing an examiner whose duty it is to examine all the local banks and report to the clearing house committee any weak spots he may discover. That measure, since adopted in other cities, cannot fail to strengthen the whole body in character and financial position.
The public has, during the last panic, shown an admirable degree of confidence in the banks and has thereby contributed nobly to the passing of the crisis. It is our duty to strengthen this confidence by all means at our command, and thus counteract the pernicious efforts of those who try to sow dissension between the people and the banks.
The effects of the panic are gradually disappearing. The good sense of the American people has again asserted itself and prevented
our reserve that elasticity which consists in calmly letting it go below the established line, endeavoring again, with the turn of affairs, to bring it back to stronger proportions.
The reform of our currency is indeed a pressing need which unfortunately our legislators have hitherto neglected to meet. Few of them have grasped the principles underlying a rational note circulation and the result is that the advice and opinion of expert bankers does not meet that acceptance which in other countries guides the fiscal policy of the governments. Instead of that, we meet with an unreasonable distrust of measures advocated by leading bankers. An excellent plan has been submitted by the currency commission of the American Bankers Association, which embodies the almost unanimous views of those best qualified to judge. You are all familiar with it. Let us continue to exert our influence on behalf of the proposed reform in the hope that the nation will come to recognize that honorable and patriotic bankers are better able
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credits is automatically checked. Of course, the proportion of quick assets to liabilities varies in different branches of business, and no hard and fast rule can be laid down, but, ever and again, the available assets of a concern are the chief ground upon which bank credits can be granted. Where the capital of a borrowing concern has found its -way into fixed property, a danger signal should at once be hoisted. Then such disastrous failures as we have witnessed in recent times would become an impossibility; then the contraction of available capital would not disarrange the relation between loanable funds and mercantile demands; then a temporary stringency might take place, but its character would not be of a disastrous nature.
Again, if these principles are followed bank reserves will of themselves remain at a safe level. The enlightened opinion of the world does not approve of the arbitrary and fixed line which the laws of this country have marked for the maintenance of bank reserves. No other country has such a law. To some extent, the law aims to draw a distinction between the requirements of large centers and small towns. The distinctions, however, which should be drawn on other grounds, such as the requirement of certain localities or certain seasons, are lost sight of. A law compelling a fixed reserve at all hazards is one of the irrational features of our banking system. A prudent and conservative banker will always know what proportion of cash means he has to keep on hand; the intelligent banker will know when and how far to dip into his reserve to meet actual and legitimate requirements. If we had not this reserve spectre held up to frighten us our banking position would easily adapt itself to the changing seasonal requirements of the mercantile community. At present our reserve is an inflexible quantity, and when it is used for the very purpose for which it is designed we become nervous and run for shelter. We occupy the almost ludicrous position of having a reserve that must not be used as a reserve. And one of the most deplorable features of this artificial and inflexible condition is the fact that in case of impending trouble our numerous institutions all over the country withdraw balances from centers to strengthen their own so-called reserves, and thereby aggravate the situation. In times of stringency, in other words, of increased demand for loanable funds, we should impart to