['Volume XXVII
THE CHICAGO BANKER
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STATE BANK OF CHICAGO			THE FARMERS’ AND MECHANICS’ NATIONAL BANK OF PHILADELPHIA, PA. 427 CHESTNUT STREET Capital $2,000,000.00 ־ Surplus and Profits 1,348,000.00 ORGANIZED JANUARY 17, 1807 Dividends Paid $12,847,000.00 ־ OFFICERS Howard W. Lewis, President Henry B. Bartow, Cashier John Mason, Transfer Officer Oscar E. Weiss, Assistant Cashier ACCOUNTS OF INDIVIDUALS, FIRMS, AND CORPORATIONS SOLICITED PRESENT NUMBER OF STOCKHOLDERS 930
ESTABLISHED 1879 S. E. Corner La Salle and Washington Streets Capital - $1,500,000 Surplus and profits (earned) 1,500,000 Deposits over - - 20,000,000 OFFICERS L. A. GODDARD, President FRANK I. PACKARD, Asst Cashier JOHN R. LINDGREN, Vice-President C. EDWARD CARLSON, Asst. Cashier HENRY A. HAUGAN, Vice-President SAMUEL E. KNECHT, Secretary HENRY S. HENSCHEN, Cashier WILLIAM C. MILLER, Asst. Secretary			
YOUR CHICAGO BUSINESS RESPECTFULLY INVITED			
			
AÄK IN CINCINNATI A, With Resources of TWENTY-ONE MILLION DOLLARS And every facility for the satisfactory handling of Bank Accounts sBr CORRESPONDENCE INVITED			
The Basis of
Credit by Edwin T. Coman
wheat is just a trifle a preferred creditor over the holder of the first lien on the land, upon which it was grown ?
Granting the basic resources of the country in which you are to bank are staple and readily convertible, your attention should next be given to the laws of the land. There comes a time with every concern dealing in credit, when the legal process must be invoked to bring to settlement an unfortunate or recalcitrant debtor. It is important, therefore, that the legal processes be direct and efficient. It can be asserted emphatically that in no section of the United States is the law more reasonable toward capital and the enforcement of the same more sure, with impartial justice to the debtor and creditor class, than in the Northwest. There a stalwart integrity and a sense of justice pervades the people to such an extent that erratic confiscatory and populistic legislation has been kept from the statute books. There has been some very decided banking legislation passed in some of these Northwestern states, and banks outside of the national system are subjected to more rigid supervision. These laws should be welcomed by every banker who is seeking to worthily administer his trust, and who is not seeking to use his position and his institution to further his private ventures. Railroad legislation has been passed in all of the Northern tier of states from Minnesota westward, but of a moderate and reasonable character, fair to the investor in railroad securities, and to the patron who furnishes the revenue. Since the passage of these laws, the most marvelous railroad development in the history of the country has gone forward in the Northwest, despite the fact that we were assured that the enactment of regulative measures, and the establishment of railroad commissions would bring railroad construction to a standstill, if they did not abandon the lines already in operation. Some have criticised the acts of one of our legislatures, which required governmental sanction before authori-
The Spokane banker delivers an able and timely address before the Montana convention at Missoula
or share of stock issued by any company, corporation, or government. Note how favorable crop reports send the price of stocks of the Granger railroads skyward, and make more certain the interest on their bonds. See how the revival of manufactures immediately follows, and the “Coalers” respond to the breath of life that first got the impetus from the Western prairies, or the home of the Chinook. It is because the form of our security is not the familiar stock certificate or the regulation four per cent bond, that the Easterner shies a little. He might look askance at single name paper, or two or three name paper, of men whose assets consisted of cattle roaming a thousand hills, or of sheep in the valleys of the Gallatin in the winter, and lost in the gulches of the Tetons and Bitter Root ranges in the summer. Millions of bushels of golden grain each week are pouring from threshing spouts in a dozen valleys of Montana, and all through the vast expanse of the Inland Empire. This grain in the warehouse becomes the subject of a negotiable receipt, the best collateral in the world. The cattle, hogs and sheep will some day be on the road to Armour or Swift where, as quarters, sides, shoulders, hams, bacon, or tierces of lard, your Chicago banker recognizes good collateral. That very wool raised in this valley may travel East and furnish material to their factories, to be returned to cover the back of the sheepherder who stalks yonder hillsides. In all its rounds it has been the basis of some bank’s loans, and just as good at this end as at that.
Did it ever occur to you that the banker who had made an advance on a carload of matte or concentrates had just a little better security than he who held the underlying first mortgage bond ; or the man who holds warehouse receipts for
When your secretary did me the honor to invite me to address your body, my subject was already selected for me by a suggestion made by a Chicago merchant, my neighbor at a banquet recently tendered the Chicago Business Men’s League on their last excursion through the Northwest. He seemed amazed that an interior city should have grown up at Spokane, with over one hundred thousand people, five millions of dollars of banking capital, sixteen millions of loans, and twenty-five millions of deposits. “What is the basis of all these figures ? What is behind your loans ? I see no smokestacks, such as convert what might be a garish day in Chicago, into a murky twilight, but which indicate that manufacturing is going on on a large scale; that hundreds of thousands of laborers were earning a regular wage, and products were being finished for shipment to wide distant marts, soon to bring a return stream of coin flowing into the banks of the great manufacturing centers.” My fellow diner went on further, to comment on the fact that no exchanges quoted prices on local stocks (other than mining stocks), and bonds which might furnish readily convertible collateral for use at the bank.
From an Eastern business man and banker, these queries are reasonable, and as contrasted with the condition existing in the East, the implied strictures are well founded. To us who are in actual contact with the banking business of the Northwest, we can rely on the assurance that the banking credits of this section rest on the soundest of all foundations, the natural products of the soil, and the simpler manufactures originating immediately therefrom, such as wheat and flour, logs and lumber, lead, zinc, copper, and the precious metals. From old Mother Earth come the first-fruits of industry, and every element of wealth relates back to that origin, and the application of labor to fashioning that product, or of transporting it to favorable markets. These are the underlying security on every bond,