The Washington herald., 1915-03-13

THE first banking lesson arises irons
the immediate causes of the war-a lack
of politeness or courtesy. The states
men call it a lack of diplomacy.
Every German will tell you that his
government has blundered wocfully. in
diplomacy; in failure to establish pleas
ant relations with its neishbors. Ten ma
tons are on the boundaries of the Ger
man people of Europe. and not one OF
the ten can they call friend.
Military rule does not beget politeness.
neighborliness. or friendly trade.
Poor indeed is a nation with the good
will of no neighbor. In banking as in
business, goodwill may far outrank
apital account. Goodwill is not based
entirely upon efficient service, but some
what upon the manner of that service.
"Politeness which merits and invites
confidence Is the great asset of banking.
How John Perrin Succeeded.
when John Perrin, now OF the Fed
eraI Reserve Bank of California. select
ed Indianapolis as geographically the best
place in which to build bank. he was
told that no great banking success was
possible in that town; that thirteen fail
ures had preceded him: but that with
three years of hard work. lie might be
able to secure 500. SO in deposits But In
a few years Perrin had more than six
millions of deposits. And that was. Of
course, a liability, but his great asset
was banking politcness. II permeated the
entire institution from the uniformed
messenger at the door to the assistant
beside the presidents desk.
He became also the largest dealer of
all the national banks in the United
States handling government bonds. This
was due to his banking diplomacy. He
thought for every national banker from
Maine to California, told them how to
handle their circulation. and their gov
eminent bonds back Of it, and offered
to handle the circulation and the bonds
or them. lie would buy and sell, bOr-
row and lend either money or bonds. If
the bank were not big enough to figure
for itself. he figured for it. He i"rfOrm-
ed n service locally and nationally. po-
litely. diplomatiCall
Great Britain Wins Worlds Praise.
The praise Of the world today is for
the diplomacy OF Great Britain that not
only cements the ritish empire in ono
fifth of the worlds area betting the
globe. hut makes friendly alliance with
the leading nations. races. and continents
of the earth.
THE first line Of nations defense Is
in its diplomacy. in relations just and
right and true with all its ncighbors.
The second banking lesson from this
war is the Importance Of sound national
finance. Germany and England arc fight
ing in lines OF finance more than with
armies by land or ships ny sea.
Indeed. finance was the real and pri-
mary cause OF this war. Under the com
mercial treaties which Germany forced
upon Russia during the Japanese war the
financial exchanges had been against
Russia Germany could sell more advan-
tageously in Russia than Russia could
sell in Germany. Those treaties expire
next year. Germany and Russia had
fought it out automatically year or two
ago. Germany determined that they
should he renewed. Russia determined
they should not Both nations had. there
fore. been preparing for many months
for this war. But Russia would not he
ready for two years. Therefore, ii was
Germany's time to strike now. as You
will find fully set forth in my little book,
The Auda Cious War
Eject of Grrmany's Failure.
But here German diplomacy again
slipped. for she was not prepared for
EngIand's entry into the contest. Won
Tirpitz had told the Kaiser that the Ger
man navy could not be ready for two
years. The result is clear on the map
today: Germany's overseas colonies and
down before the big guns OF the English
warships. and the hope for a German
footing on the Persian Gulf and the road
| to India destroyed for many years to
come. Until recently Russian exchange
has been p per cent discount, even when
German exchange was only per cent
discount. Now German exchange is u
per cent discount. and with the Darda-
nelles opened to Russian wheat and rye,
Russian exchange will soon be in the
ascendant.
Sound finance must be based upon
free lines of communication.
THE third banking lesson from this
war is that American finance must
hereafter he of broader character.
less local and more International