The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-09-29
TRUST COMPANIES OF NEW YORK
Address of L. L. Gillespie. Vice Presi-
dent of the Equitable.

Denver, Sept. 29.-Lawrence L.
Gillespie of New York, addressing the
Trust company section Of the Ameri-
can Bankers association spoke as fol-
lows:
When we parted after our success
full convention in Atlantic City last
autumn perhaps very few if any. had
any positive convictions as to what the
coming year would bring to US of ex-
perience and trial, embracing the most
violent and far reaching financial dis
turbances that this or any other coun-
try has probably ever seen. Yet now
We must all admit that there were at
that time innumerable signs indicating
that the conditions under which we
were living and thriving were not all
that they should be. One of our lead
ing bankers, in a well directed speech
before the chamber of commerce of
New York had referred to the cur
rency laws of the United States as
disgra cefuP and characterized the
lack of elasticity in the currency as
'barbarous Necessity not having as
yet pointed the way. we are very slow
coming to the point where some re-
medal change was thing of the near
future and much time was being de-
voted to reconciling conflicting views
of the most eXpedient method of re-
vision of our financial laws. when an
acute emergency interviewed and
How serious the disturbance in
money was going to be was strongly
brought home when on. August 18th
1907, New York city offered $4,000
600 of its bonds uatss4 per cent and re-
ceived bids for only $2,713,4s5.~.
THE trust companies of New York
city were to large extent deposifaries
of the funds active and inactive of
banks, bankers and financial institu-
lions throughout the United States,
and 1 should like every member of this
association to appreciate just how
promptly and fully these trust COM
panies fulfilled their obligations to
their { depositors under conditions
which have never been eQualed. From
their high record of 1907 namely ST.
OF. S13.344 on June 4th, their deposits
dropped to $5S7. es9.31S. on December
10th 1907. In other words these trust
companies paid out to their depostors
during this period the enormous sum
of $43O,753,OOO ou42 per cent of their
total deposits. +. crr. @-il 7-s ---1
at must not be supposed. however.
that such an extraordinary strain
passed without classification of the
strong from the weak and without dis
closing some conditions which pros
porous times had protected from view.
After the financial storm had passed
the danger points were left bare to OBJ
servation. just as Jagged rocks appear
on the beach after an ocean storm has
washed back the sand which had COW
cred them. The deposits of trust COM
panies had thus receded and in some
cases had left bare methods and prac-
tees, perhaps not wholly reconcilable
with good principles of banking or
trust company business. These con-
ditions 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 Illustrate efforts
on the part of those having control to
use their resources for purposes no,
tending to strengthen the security of
depositors and further to restrain in
vestment in ways clearly unwise. These
laws. good and salutary and well
thought out as they are, and in every
way fit models for other communities
intending to develop their trust COM
pany and banking legislation to follow
are, after all, of prime Importance
chiefly to the weaker brethren. Good
banking cannot be created by law, bad
banking may in many ways be thus
prevented. When we study the laws of
New York on this subject we are ap5
to have our attention drawn away
from the real state of affairs as they
exist in the conservative and well gov
erned institutions of the city, which
are the almost universal rule. These
institutions have weathered every
storm and for many decades have pro
tected and wisely managed the many
estates and trusts in their hands and
have been the safe repository of huge
volumes of funds; on January LIST, 1905
exceeding the deposits of all clearing
house banks of New York by upwards
of $SS, 600, 900. The proof of the pudding
is the eating thereof.
I'VE have seen how magnificently the
trust companies of New York city
acted in responding to the calls of their