Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-01-31
WARNING TO BANKERS
New York Clearing House Pres
ident on Speculation.
CONFLICTS WITH BUSINESS
Conservatism Keynote at Banquet of
Financiers.
MORGAN JOINS IN APPLAUSE
Speaker Dwells on Fast Pace Of Pres
ent Day as Compared to Forty
Years Ago.
JOINS IN APPLAUSE

NEW YORK, January 31.-Alexander Gill
bert president of the New York Clearing
House, told the bankers of the city last
night, assembled for the annual banquet
Of the associated banks of the city, that
back in 1862, when he went into the busi-
ness, there was a disposition to recognize
the fact that the credit Of the country
could not finance a period Of phenomenal
business activity and a period of phenome-
nal speculation at the same time.
Hence Mr.. Gilbert related that in those
early and unenlightened days, when the
extremes of business and speculation came
along together and caused financial dis
comfort,-there was no disposition to blame
it on the currency. He believed that the
same philosophy might profitably be
availed of today to explain present con-
dtions.
The bankers and their friends present,
some 500 in number, applauded generously.
Seated at the head table were ]. P. Morgan,
George F. Baker and Controller Rtdgeley.
They applauded, too. In the company Of
500 on the floor were H. H. Rogers and
John D. Archbold of the Standard OIL
Company.
It could not be learned last night
whether they joined in the applause of Mr..
Gilbert's sentiment The dinner was emf
nently successful. The speakers. besides
MI Gilbert were Commander Peary'
perintendent Of banks in this state; the
Rev. Howard Chandler Robbins and Will
fred T. Grenfell.
Distanced by Morgan.
Mr.. Gilbert was introduced as the first
speaker by Chairman Stephen Baker, who
presided, and Mr.. Baker reminded the bank
ere present that Mr.. Gilbert went into the
banking profession in 1854, the same year
that J. P. Morgan went into business. Mr..
Gilbert referred to this as he began, for,
turning to the f1nancier, he remarked:
"And look how far he's left me behind In
the race"
Then Mr.. Gilbert spoke of the mission
of the New York clearing house as the
conservative banking force OF the country
in times Of prosperity ana the railyine
point for any defense Of its business IN
terests in times Of danger. He predicted
that this influence would increase as the
years went by, until eventually the clear
ing house would become the most potent
financial factor In the civilized world.
But" he added, I'VE feel ourselves being
hurried along at too fast a pace, and 1t is
to the clearing house that we must TOOK
for the correctives. The magazine writer's
tell us that we are in an age OF excessive
business expansion an age Of over-capital-
ization that chokes the sunlight OF human
tty out of our daily walks and out or our
hearts, because it develops greed. This
may be true, and some of US think that II
is true but what are we going to do about
I'VE cannot escape from this busy world.
We cannot isolate ourselves from the con-
ditions that surround us. Let US then take
the position that 1t is primarily due to
the restless energy Of the country, and as
associated bankers let US remember tnat
the business prosperity of the country 70
day and for all time must rest upon the
conservatism with which the business OF
banking is conducted in New York city.
In Other Days.
81 can remember when banking in New
York city was delightful pastime-when
the interest rate was 7 per cent all the
year around, when bank presidents were
elected for their gray hairs and for their
ability to sit at the desk and look wise.
Those were the days when every applicant
for a loan was referred to the discount
box, and when every discount that went
in had to come before the board.
I'm those days we had directors who
earned their fees. except that we didn't
pay them anything because 1t was es-
teemed an honor worth all the work to be
done to be a director of New York
city bank.
Bank, then the largest in the city, had
but 100000 deposits. and when our
friends of the Hanover over here
had but Inc FlTSt NdllOIdl
Gilbert turned to George F. Baker, who
sat near himl wasn't founded, and great
colossus. the National City, had but 3d.
300, 600 of deposits. Yet we prospered in
those days and made our profits &c.,
haps as satisfactory dividends are paid
today. And 1 would suggest that if the
banks Of today were to stand shoulder to
everlastingly reaching out after each
others business we would have great
deal better time and would make money,
too.
1--WE had our troubles in those days, OF
course We had our crop-moving times,
when money was scarce. We had our
periods Of extraordinary business demands
and our periods of great speculative &C
But we never blamed it on the currency.
We realized that the combined credit Of
the country could not finance phenomenal
business activity and phenomenal Wall
street speculation at the same time, and
1t is just as true today as 1t was then.
Abnormal Conditions.
1--WE have had now three or four years
of great business activity, eoincident with
great speculative movements. The result
has been high interest rates and abnormal
business conditions Now. whenever we
have abnormal business conditions we will
always have high money. and the best
! currency system that was ever invented
could not prevent 1t.
I'm those earlier days." said Mr.. Gill
bert finally, I'VE did not hear the state
ment that the currency system was de-
vised as a means to enable the govern
ment to market it's bonds. We did hear
that it was method Of enabling the gov
eminent to support an army and navy, to
put down the greatest civil war in his
tory, and at the same time to give to the
country a reasonably stable medium of
exchange that would be secure through
all time. This test of security our cur
rency has stood and no one of US has seen
the time since then when 1t would not
pass at its full value in gold in any OF
the markets of the world"
Charles H. Keep said that as he had
hardly been in Office twenty-four hours,
he could not very well discuss In great
detail the work of his office, except to