New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-28
MORCAN RRIFF RI AMES POOR BANKING LAWS

ceiyabIe. Another example might De ii'e ,1
toned I'm the irrigation enterprises VI en-
West. II is estimated tnat there na a, Iass
expended i'm such development not iesS
than s2O0. 600, 900 How far would sue,
DEVELOPMENT have gone, how iar "oui''
those regions have been opened " r. H.
culture. had dependence for Obtaining .I 10
great sum been placed Ed, upon Tnan s"e Of public
auction) upon investors in New foIA y, y,
Chicago. who know little of the safety VI
such investments?
Persons who decry the close RELATIONS
existing between the bankers arc 'nI
great Transportation and indus'r'a'
businesses fail to perceive that as m
dividuaIs require tho advice or lawyers
and physicians, so great enterprises re-
uuire financial diagnosticians VINO ca"
dive counsel as to the worlds invest
nnent markets, as to what FORM OF
curities is best adaptable for any g'ven
time, as to what financial policy TOR
the corporation is best calculated 20
command the confidence and the STEADY
support Of tho investor.
Officers Are Independent.
one uhase of far different feeling at
present to be noted in America mas re,
heated expression In the preamble anu
resolution 10 the effect that financial
groups have control over the aroreSdid
railroads. industrial corporations ana
money Institutions" etc; that sucn az,
influence is exerted powerfully over tne
officers and management OF Such ihsu
tutions. and that such influence Is exeTted
primarily for the benefit OF the lhdiVlu-
uals. , .
Persons that accept such belief inus1
fail 10 realize that no corporation couIu
long survive If the operations OF the cor
poration and the freedom Of its ofilcerS
were nterfered with by directors deSIr-
Ing to serve selfish interests. Inc sue
cess of an enterprise depends IaIReS
upon the ability and zeal of its officers
eXerted independently Of any interest eX-
ccDt that OF the enterprise itself. ANY
attempt by directors working To their
own ends would result either IN the rum
ing Of the business. were the officers 10
yield up their independence. or in the
prompt resignation OF such officers IL
they We're men Of character. And since
when. II may be- asked. has the ownership
OF stock meant the ownership OF mem
A distinction which one line of your IN
quiry sought to establish was that as 70
the relative safety of banks and banking
houses as dcpositaIies. Your inquiries on
this point. although purely tentative and
without attempt to cite any records which
might bear upon the subject left the i'm
preston that YOU doubted the wisdom or
permitting corporations 10 select. a. de-
.positaries for their funds. private bank
crs as well as banks. This is matter
of less grave concern to the public than
many points having 10 do with the funda-
mental character of our bgnking laws.
and our opinions on this particular topic
are likely 10 be accepted with consider
able reserve.
Yet il may be- OF value 20 inquire Wheth-
80 experience offers any data EOing 10
SHOW that INCORPORATED banks have
proved themselves In structure or in
practice more Improbable from failure
than private banks. Incorporated banks
possess. from the depositors point Of
view. such safeguards az are extended by
existing methods OF state supervision.
And the national bank act wisely provides
that In the event of a banks failure the
shareholders shall be liable 10 the extent
OF TWICE the arnount OF the capital stock.