The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1913-01-12
Man Who Controls $500, 600, 600
Began AS a So Grocery Clerk
George E. Baker, the Money
King, Has Had Remarkable
Career in Financial World.

A little known Irminary In the financial
horizon came to washington during the
hearings of the Pujo committee last
week, and for the first time curious
world got peek at George T. Baker,
New York money king. about whose
life the world knows little.
Baker. from, a $2-a-week clerk In
grocery store. and later as a s5-a-week
Waterman, has amassed fortune OF
between $S5, 100000 and $90.00o,0oo. He al
ways has remained in the background.
has declined to discuss his past life or
his present undertakings. and his ap-
pearance on the stand before the PuJo
committee was as sudden and practical
W as barren of results as could have
been expected.
Baker controls something like 100000.
COO, yet he Is loath to speak of II. He
told the committee that the public had
no more right to delve into his past
history and to examine his bank ac-
counts than to see his tailor bills.
This is the same George F. Baker
who became the ruling power Of the
First National Bank of New Mork by
approving a bad credit granted to
Jay Cooke back In 1872. For this he
was In danger. as cashier, of dismiss
sal. In more vulgar terms, George
F. Baker. now the head OF the most
spectscuisrly profitable financial in
stttution in the world-past or pres
ent, not excepting $50 Per Cent"
MiIler's less fortunate Franklin syn
dicate-was on the ragged edge Of
being canned by his boss for a bad
break.
Bought Up The Bank.
What did George F. Baker do. know
ing then. undoubtedly. as well as he
does now that "the fundamental prin-
ciple of banking is credit?" Did he
get his hat and coat and drop into the
presidents office to say an apologize
good-by? He did not. Instead he con-
suited with Henry Fahnestock, the clerk
who was directly responsible for the
buying Of the bad drafts, and then he
bought the bank He bought It with
only few hundred dollars to his name.
His purchasing leverage was his per-
suasive. suave manner. and his chilled
steel of self confidence. He still has
both at seventy-two years of age.
The incident throws a brilliant shaft
of light on the fact that his bank has
in fifty-six years made $s6,000.00o on
500, 900 capital John Thompson was
then president of the First National
Bank. He was old He was tired Of
banking Mr.. Baker knew Thompsons
state of mind.
Mr.. Fahnestock had charge of the
foreign exchange department Of the
bank To oblige a friend he bought a
lot Of London drafts Of jay Cooke &
Co. Three days later Jay Cooke failed.
Mr.. Fahnestock ran In dismay to Mr..
Baker. who hadu approved the put-
chase.
To Save Themselves.
1T looks as though we would have
to buy the bank to save ourselves,
said Mr.. Baker with placid smile
He left Mr.. Fahnestock sasping and
went into the office of the elderly and
weary Mr.. Thompson, who did not as
yet know that the Cooke failure had
affected the First National
Sympathetically, gently he dwelt on
Mr.. Thompsons advanced age and his
growing inclination to get out of active
business With calm and convincing
confidence he assumed that Mr.. Thomp-
sons only reason for not getting out
was his INABILITY to find men who would
be kind masters to the good old bank
and treat It gently and honorably. Mr..
Baker realized that 1t was very dinf-
cult to find men of sufficient means to
undertake so large purchase who We're
OF the type Mr.. Thompson wanted as
successors. Why not, then, sell 1t 10
comparatively young men OF small
means who had the character and the
backing to pay Tor II on long time. Mr.
Baker got wha. he wanted. 1t was a
six months option. Before II had ex-
pired he mad used fundamental credit"
to ouch good advantage that there were
any number of very rich men who were
willing to finance his purchase OF the
bank If they could be In the good books
Of the new young banker.
Marvel of Wall Street.
For twenty years the conduct of the
bank was the marvel of other Wall
Street fnanciers who followed more
conservative ideals of money making. |
Under the blandest and most sanctimon-
ious appearances the bank devoted
nearly half its assets to Wall Street
speculation. The Government did not
interfere. The other banks did not COM
plain. II wasn't chubby to complain
also 1t might have been financially I'M
healthful. And so 1t was, as the head
of one of the most important institu-
lions In Wall Street that the First Ma
tional became known as house of mys-