The Washington times., 1933-05-23

"Our desire being to be of
use to the committee, 1 have
Ventured to frame a brief state
ment of my views on the sub
ject Of the duties and uses Of
private bankers, which / hope
the committee will receive as
an outline and, If it SO desires,
discuss with me or with some
OF my partners.
In the first place, what are
the differences between the
rights and privileges of a priv
ate banker and an incorporated
bank? AS I see it, they con-
SiSt chiefly in the fact that an
incorporated bank receives from
the Government Federal or
State, from which its charter
comes, certain privileges, and
Tor these privileges it has to
conform to certain laws and
regulations of the Government,
applying only to the incorpOra-
ted banks business.
AN ANCIENT PROFESSION
"The private banker has none
Of these privileges, but as he
does not have to conform to
any special Government regu-
latiOn he has a somewhat
greater freedom of action.
THE private banker is a
member Of a profession which
has been practiced since the
middle ages. In the process Of
time there has grown up code
Of professional ethics and Gus
toms, on the observance Of
which depend his reputation, his
fortune and his usefulness to the
community in which he works.
"SOme private bankers, as in
deed is the case in some of the
other professions, are not as
Observant of this code as they
should be; but if, in the exer-
else Of his profession, the pri-
vate banker diSregards this code,
which could never be expressed
In legislation but has q force
far greater than any law, he will
sacrifice his credit.
CREDIT CHIEF ASSET
"This credit is his most vaIu-
able possession; it is the result
Of years of fair and honorable
dealing and, while it may be
quickly lost, once lost cannot be
restored for a long time, if ever.
The banker must at all times so
conduct himself as to justify the
confidence of his clients in him
and thus preserve it for his sue
ceSSOrs.
"Tf I may be permitted to
speak Of the firm, of which I
have the honor to be the senior
partner, / should state that at
all times the idea of doing only
first class business, and that
in a first class way, has been
before our minds.
1--WE have never been satisfied
with simply keeping within the
law, but have constantly sought
SO to act that we might fully
observe the professional code,
and so maintain the credit and
reputation which has been
handed down to us from our
predecessors in the firm.
ADMITS MISTAKES
"Since we have no more
power Of knowing the future
than any other men, we have
made many mistakes (who has
not during the past five years?)
but our mistakes have been er-
rOrS of judgment and not of
principle.
Another most important
duty of the private banker is
to take special care that his
banking position in regard to
his deposits is at all times Suf-
ficiently strong, knowing as he
does that none of the aids pro-
vided by the Government such
as the Federal Reserve system
or the Reconstruction Finance
Corporation, are at his disposal.
"The private banker has at
least one other duty: He must
be ready and willing at all times
to give diSintereSted advice to
his client to the best of his abil-
ity. If he feels unable to give
this advice without reference to
his own interests he must
frankly say so. The belief in the
integrity Of his advice is
great part of the credit of which
/ have spoken above, as being
the best possession of any firm.
TELLS THEIR USES
$50 far as to the duties. I
will now pass on to the uses of
private bankers. These seem to
me to be closely related to the
fact that, as they are risking
their own money and doing
their own work, they may prop
erly undertake certain response
bilities and businesses which the
management of an incorporated
bank might not be justified in
dealing with.
Subject to the paramount
need of keeping their banking
position toward ther depOstOrs
sound and liquid, they can in a
very prompt and effective way
assist in the development of the
industries and productions of
this largely induStrialiZed world"
"They can also come to the
aid of a general situation or of