[Volume XXVII
THE CHICAGO BANKER
14
Editorial Comment
can Trust. Only in the consolidations of the Continental and American Trust and of the Commercial and Bankers are the signs of the times indicated. They are eloquent of the growth and business requirements of this great financial center and a proof of the belief of our ablest men in the reality of our good times.
Nationals in California
The new superintendent of banking for California under their new law has set down his decision upon the question of national banks doing a savings bank business. He decides that, not being authorized bv the national bank act, they only can do a savings bank business under the state law, or they cannot do it at all. His notice to the nationals in his state reads:
“National banks being private in their nature, and the profits or losses resulting from their business being not shared or participated in by the government, the measure of their public benefit and the scope of their instrumentality in aid of the federal government must find its authority in the national bank act, and beyond the grant in that act national banks must obtain from state laws any privileges enjoyed which are not within the national bank act. Therefore, if any law enacted by the state shall prohibit a national bank from transacting a savings bank business without first complying with the law of the state, such prohibition in no wise affects these banks as instruments of the federal government, since every function that they perform that in any way relates to a public service to the federal government can be fully performed without engaging in the business of a savings bank, and it is manifest that the state can require of any national bank, when it gets beyond the purposes for which congress provides that they may be instituted and engages in a business that the state in its sovereign capacity has deemed necessary to regulate, that they must submit to this state regulation and be subject to its control.”
This decision is sure to attract attention and may be followed by banking commissioners in other states.
Holding Directors Responsible
Judicial decisions and public sentiment are drawing more closely about the directorate of banks their legal responsibilities. The comptroller, too. is on this lay and a era of better directors is in promise. Men of affairs are becoming more cautious about going in as dummy directors into new, one-man banks and the reason is plain. It likely will be a costly honor in the future. The Saratoga, N. Y., decision, last week, in which thirteen former directors of the Trust Company of the Republic are held responsible by Justice Van Kirk for losses sustained by the trust company through loans made in 1902 by its president, Daniel Leroy Dresser, from the company’s funds on securities of the United States Shipbuilding Company and for which restitution to the trust
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When in Chicago
If bankers are to be found who still are skeptical as to the reality of our boasted good times, they are invited to look about them while in Chicago next week attending the convention. The building record of this city will convince all observers.
If all the construction of the first eight months of 1909, was placed in a continuous line it would stretch away for forty miles without a break— one-half the distance from Chicago to Milwaukee. For the 7,856 permits covered 214,771 feet frontage. They represent an outlay of $61,532,380. In the same period of 1908 the permits numbered 7,277, the foot frontage was 189,632, the proposed outlay was $40,632,715. With a third of the year still to come, the possibility exists of a building record approaching $90,000,000.
The four building districts of the city all show activity. The permits for the south side are 2,754, the outlay, $26,000,000 ; for the southwest district the permits are 1,586, the outlay, $15,-000,000; for the north district figures are 1,427 and $10,000,000; for the northwest, 2,090 and $9,500,000. The great records of 1902 and 1905 have been eclipsed by millions, allowing for the remaining months of the year. Real estate operations have been upon an equally stupendous scale. In the first eight months of 1908, 19,266 transfers represented $88,000,000. In the corresponding period of 1909 there were 21,851 transfers, representing $93,500,000.
The doubting Thomases are invited to ponder these figures of construction and of real estate transactions which tell their certain story of growth, steady, solid, substantial growth. They are full of encouragement to every citizen. They strengthen the faith of all in the continued development of a municipality whose greater and more beautiful features are fast changing from dreams to realities. They tell why Chicago has required larger and stronger banking powers. Tell why the banking units can meet the larger field only by amalgamation. The Continental-American Trust was an ideal move. Splendid stafif, enormous capital responsibilities giving larger loaning power, and deposits to round out the whole. The Commercial has taken in an army of new accounts by absorbing the Bankers. In her field it became necessary to show greater figures. The Oakland National went in with the Drexel State; the Royal Trust with the Central Trust, and the Mutual Savings with the Ameri-
The Convention
No convention ever met under more favoring circumstances than will the American Bankers convention, to assemble in this city next week. No city can be more attractive to the visitor and certainly none has ever approached the preparedness of Chicago to entertain her guests. Never in its history has the association been officered more acceptably to its membership. All of its officials are young, are active bankers, and pardon us, all are handsome, talented, manly men.
George M. Reynolds is of the engaging personality type, and yet as an aggressive account getter and keeper probably holds the record. He has refused the secretaryship of the treasury at an age when few men have begun even to think of the station as the climax of a career. In the banking world to-day he occupies a position second to none. He is the president of the association.
Lewis E. Pierson, who will succeed Mr. Reynolds, and now is the vice-president, is a very similar man in all essentials. From small beginnings he has built up a big successful bank in New York where competition is the limit.
F. O. Wqtts, now head of the council, will succeed Mr. Pierson. He is an orator and has under his charge the leading bank in Nashville. All three are men of whom bankers are proud. They are men of affairs, whom the leaders of the house and of the senate are pleased to consult. The association under their management has advanced by bounds.
Frederick E. Farnsworth, Col. Farnsworth, is a born secretary. His administration has developed the real power of the association to advance the interests of its membership. When he took hold there was a “headquarters,” a barn-like room filled with dead printed matter and packing boxes. There wasn’t even a complete file of proceedings records. Now there is a thoroughly organized, able staff with a library, as complete as can be, and the business system has met the highest praise from those who know the possibilities. All sections’ headquarters, too, are at 11 Pine Street and the place is a busy place.
The printing and supplies are not “ordered” of favorites, but are purchased upon bids in open market. There has been some cavil and a few threats, etc., but they are cowards all who talk in this fashion.
The American Bankers Association is not yet at its zenith of size and power, but amazing progress has been made. Bills of lading, uniform in all respects; travelers’ cheques good all over the world; money orders of the real kind; better indemnity bonds are among the accomplishments. The committees of the A. B. A. are composed of hard working, purposeful men. Chicago has adequate hotels, many places of amusement, a fine ball room, a beautiful lake, fine parks and boulevards and many highly developed special industries. All of these the visiting bankers will see through the hospitality of the Chicago Clearing House.