The daily sentinel., 1908-09-29
HE TELLS
OF THE
PANIC
1By Associated Press. !

ipthNtls sept D. he iOilOM
| is a portion of most interesting
address on New York City Trust
companies by Lawrence l.. Gillespie.
vice-president of the Equitable Trust
company of New York. delivered at
the annual meeting of the American
Bankers Association today.
g., When We parted after our success :
any positive convictions as to what the
coming year would bring to us Of eX-
pertence and trial. embracing the most
violent and far-reaching financial dis
turbauces that this or any other coun-
try has probably ever seen Yet now
we must all admit that there were at
that time innumerablc signs indicating
/ that the conditions under which we
were living and thriving We're not all
that they should be. one of our lead
ing bankers. in a wcll-directed speech
before the Chamber of Commerce of
New York. had referred to the curren-
cY laws Of the United States as dis
graceful. and characterized the lack of
elasticity IN the currency as 'barbar-
Necessity not having as yet pointed
the way. we were very slow in com
ing to the point where some remedial
change was "A thing Of the near future
and much time was being devoted TO
most eNpedient method OF revision Of
our financial laws. when an acute
about immediate action.
How serious the disturbance IN
nhltN was EblHk 70 ne wis strongly
brrought home when, on August II
1907, New York city offered $l5ooo,o0Q
f, Of Us bonds at Per Gent cent and received
THE trust companies of New York
city We're to large extent depositor-
les Of the funds active aud inactive of
banks. bankers and financial institu-
tions throughout the United States
and I should like every member of this
promptly and fully these trust com
panics fulhlled their obligations to
their depositors under conditions which
have never been equalled, From their
high record Of 1907. namely $1.O1TS13.-
34i on June {, their deposits dropped
to $5S7.06a.3lS on December 49, 1907.
In other words these trust companies
paid out To their dcpositors during this
period the enormous sum of $3.50 153,-
ooo or ~ per cent of their total de-
ii must not be supposed however
that such an extraordinary strain
passed without classification of the
closing some conditions which pros
porous times had protected from view
After the financial storm had passed
obscrNallon' Just as Jagged rocks ap-
pear on ihc beach after an ocean storm
has washed back the sand which had
companies had thus receded. aud in
some cases had left bare methods and
practices. perhaps not wholly rcconciI-
able with good principles Of banking
or trust company business. These con
ditious did not rest alone with such
trust companies as developed weak
ness. but were present also in some OF
the national and state banks
The laws with regard to trust com
panies In New York are directed to
prevent abuses and to frustrate efforts
use their resources for purposes not
tending to strengthen the security Of
depositors aud further to restrain in
Ncstmcnt IN ways clearly unwise. These
laws. good Ind snlutarN and we'll
thousht out IS they are and in every
intending To develop their trust COM
panN and banking Legislation to follow
are after all Of prime Importance chief
" to the weaker brethren. Good bank
ing cannot he created by law: bad
banking may in many ways be thus
When we study the laws Of New
York ON this subject we are apt to
the real state of annirs ns they exist
in the conservative aud well-governed
institutions OF the city which are the
most universal rule. These institutions
have weuthercd every storm aud for
many decades have protected and
wisely managed the many estates and
trusts In their hands and have been
the safe repository of huge volumes of
the deposits Of all the clearing house
banks of New York by upwards of SIS
900 'ooo The proof of the pudding is in
the eating thereof
we have seen how magnihccntly
the trust companies of New York CITY
their dcpositors during those times of
anxiety aud disturbance which marked
Nilf 'llu OF lnt year lNOi. We have
seen that they have paid out $3.50 900
600. reducing their deposits to $4,000
600. and we find after the battle is
over moro strongly entrenched than
ever before in the public confidence.
and with duties aud responsibilities
towards thcr clients and the financial
world which, in their past and their
present. they have shown no inclina-
tion to shirk.
The lesson that has been taught by
last years experience will last as long
as the present generation of bankers
remains in the field of activity. The
Nindicatton of sound banking has never
been 50 complete and sweeping and
has only been accumulated by the dis
trcSSing handicap of "A most anomalous
currency system. which we must houe
Will in the near future he placed upou
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