The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-06-21
HOW BANKERS MAY
LEARN FROM PANIC
In Address Before State Associa-
ton Mr.. Addison Draws Some
Practical Lessons.
MAINTAIN GOOD RESERVE
Failure to DO So May Bring
Needless Embarrass-
ment.
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,,c,1II sPssisl.o The Times pi.pa.eh.l
HOT SPRINGS. VA, June 20.--The
address delivered before the Virginia
Bankers' Association yesterday by Mr..
w. Meade Addison. OF Richmond on
Some Lessons OF the Late Panic" wa.
one OF the very interesting features
OF this session. Mr.. Addison is cashier
OF the National Bank OF Virginia, and
has won high reputation as an observ-
ant. thoughtful and thorough banker.
In opening his address. Mr.. AddIaon
emphasized the importance OF the bank
ing business, and of thorough aualifl-
cation by those entering It. and briefly
touched upon the marvellous indus
trial development OF tho last few years
Continuing. he said:
Ranks play wonderful part In the
worlds development and. consequent
". good banks will constitute always
ono OF the most useful elements in
society. You ard / now better realize
that henceforth our responsibilities arc
1ncreasing. Our duties demand to a
greater extent a liberal education
greater insight into ecoHon1!n cond,.
tions-political and commercial-a
broader knowledge OF our system and
finances.--in fact OF all conditions af-
fecting. directly or indirectly. our pro-
may be felt and our voices heard In
behalf of sound principles. Some of us
find ourselves now. as indeed we
should, more or less dependent upon
the. advice and counsel OF superior
minds. OF men who have stood the test;
of those who know that time and again
in the very fulnefs OF the prosperity
OF our country. dangers have even
been present. snd that. with peculiar
regularity and striking consistency.
like a bolt from clear sky. the blow
has fallen. and Just az suddenly the
country has found itself in chaos and
confusion. with disaster overshadow.
ing.
Critical Periods Come.
Such. indeed. are the times that try
the souls of men: bankers and f!nan-
oiers particularly. who then realize that
the eye of the nation looks to them
10 gave q desperate situation, belieS-
ing in their abilities. in their resource
fulness TO stem the tide Of adversely,
but you cannot deny that their re-
sourcefuness has been taxed TO tre-
,neudous degree and that desperate
remedies ilav eb1en time and sgain re-
sorted 10.
WHO ia IT to NEE. thes. emersen-
cies in the future2 may not be able
DO know that tho recent additions to
the banking profession Will be expect
sd to. and should play their part. but.
II we are to profit by the abilities OF
our predecessors we must cultivate a
true End comprehensive Interpretation
OF the functions OF n banker. The
banker must appreciate that through
The agency of a variety OF specific
causes II Ia yet possible for this coun-
~ al hre "a "
downs, commercial crises, and that In
the twinLl1>y of an eye. conditions
rAr undergo such remarkable adverse
changes that no time 1. afforded to
prepare for the resulting 7rivatton and
suffering to its people
The instrument possessing the magic
power to so adversely change the con-
hltions last year. We term the panic
OF 1907. concerning which l wish to
speak briefly. believing that no other
medium should so stimulate broader
ttudy among bankers.
The forerunner of the panic of 1907
was period of wonderful prosperity.
In the brief span OF the last ten years
the New York ciearinss increased from
TN, ty-nine Billions to ninety-fire bil-
lions. while for .tie country at large
the increase for the same period was
from fifty-two to $50 billions. There
was apparently no limit for capital
The troubles of 1893 -S9ere apparently
fading from memory, as year succeed
ed year. until by 1907 disregard for
the conservatism .eemed to prevail
universally. The practice of eytrava-
Eance became amazing in its audacity,
and a general taste for speculation In
tensified the situation.
The concentration OF the money of
the South and West in New York in
the dull periods. when 1t was not
needed for crop moving purposes,
greatly stimulated this speculative
tendency. While there were several
unfavorahle observations to be made
in 1907, notably in the decline of Sc
curities, not until October when the
call for currency from the South and
West continued. did the country seem
to awaken to its condition of inflated
credit. Prior to that time there was
no important bank failures. and hut
little apparent indication OF serious
disaster. Then came the shock to pub
llc confidence.
The banks began to call their loans.
borrowers In endeavoring to meet
their obligations were making enor-
nous sacrifices. but to no avail and
with the failure of number OF the
banks and trust companies Of New
York City. the panic was precipitated.
Why? If there Is one single men,
her OF this association present to-day
who has not allowed this question to
engage his constant attention, then
am grateful to the secretary of this
association for his invitation to pre-
pare some remarks for this evening,
The banker who cannot enumerate his
specific beliefs (whether correct or in
correctly as to the causes which brought
on this panic, makes an unqualified
confession that he is with absolute
certainty doomed to failure in pro-
fession (which he has so unwisely
chosen. The banker who does not
qualify himself through this expert
ence can never meet the requirements
of his profession IN the future.
The banker is. of course. alive to the
fact that there did not exist a cause
to produce the panic. He witnessed a
shrinkage of nearly five billions of
dollars In the market values OF stock
exchange securities between the Pc
RODS OF December 1906. and January,
1908. These securities represented the
savings of many Of his own people.
ia witnessed a marked and consistent
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