Evening journal., 1913-09-03
NEW NEWS OF YESTERDAY
How a Bank Was Kept Sol
vent by Oil Paintings
By Holland.

"When 7 look back upon some of
my experiences as a member of the COM
mittee OF the New York Clearing House
Association at times when panic was
prevailing and il was necessary to call
into use the great latent resources of
the clearing house in order TO prevent
general Generalization. 7 sometimes
think that the most extraordinary ex-
perience of all was one which occur
red in 1884" said the late Frederick
DIR. Tappen TO me at time when he,
as chairman of the clearing house com
mittee, had received on deposit from the
clearing house vaults a hundred mil
lions in gold which had been imported
from Europe in the second year OF the
/ first administration of President Nc
kinley.
"The panic of 1884 was very pecu-
! liar one" MI Tappen went on to say.
Everything had been going ahead at a
too-rapid pace for the four or five years
which followed the resumption of specie
payment in 1879. Railroad construc-
tion had proceeded all together too
rapidly We had borrowed enormous
amounts of money in Europe with which
TO build new railroads. American in
dustries. especially those based upon
/ electricity, were calling for vast
amounts of new capital. Some of Edi-
sons inventions. for instance. the cleo
trio lamps. were being promoted upon
a large scale. especially in Europe and
in the East Indies There was OK
cess of speculation and a good deal OF
it upon pure wind The failure of the
/ firm of Grant and Ward. in which ex-
President Grant was the special partner
and for crookedness IN the bubble. One
or two banks went down. and ] may
say they deserved THEN fate. One OF
two otrer banks which had been
unfortunately although not dishon-
orablv. involved seemed to the clear
] ing house members we'll worthy of saw
| ing, or at least Of so liqudating that
no one would lose a penny
Cone of these banks had been well
and very honorably managed by
/ George T. Sency He had a national
reputation. partly for his great phil
anthtopies in Brooklyn and partly for
his wonderful knowledge. which was in
tutve Tor he was entirely self taught
respecting great works OF art.
Mr.. Senov had bought in Europe a
large number of painti sys. some of
them by artists who were little known.
but whose great merits Mr. Seney dis
covered. and these were merits WI
were afterwnrd recognized by the world
~ was proposed that the Clearing
/ House Association should accept Mr..
Seney's collection of paintings. or con
siderable rrtion of H. as security for
certain advances or assistance which the
Clearing House Association was willing
20 give m order 20 liquidate satisfac-
torilv the affairs of this bank 90 that
every depositor would receive i'm full his
! deposits and, if possible. all stockbold-
ers be paid
"rhere were some queer expressions
Of ccuntenance INDUCED m by some Of
my associates of the clearing house,
when the proposition that the pictures
be taken as security was made.
II do not regard myself as very
loompctent cennnisseur, although | think
| know a good picture when I see IL. but
had learned to entertain the greatest
respect fer Mr. Seneys Judgment.
lfet pretty sure that these pictures
would 90 n long way toward extricatine
the bank from its difficulties. Well. we
tool, them. ! don't believe that in the
history of American banking a security
of TINT kind was ever before offered or
accepted although there may have been
individual cases when debtor TO n bank
who had no cash offered a valuable
lpainting as security for his debt.
"Wen. I was correct in my Judgment
Mr.. Seneys paintings. when tested. il
public market OF by the Judgment Of
competent connoisseurs. not only proved
the accuracy of his own view. but als'
served in great measure to provide funds
by means Of which this important bank
was pulled out of It's troubles
Copyright. 1913. by +. j. Edwards. Al
rights reservcdl