Evening star., 1933-05-23
BY the Associated Press.


to the Senate Banking Com
i mittee today before he was
questioned about his banking
operations, follows:
Our desire being to be Of use to the
committee, have ventured to frame a
brief statement Of my views on the
subject of the duties and uses of pri-
vate bankers, which I hope the COM
mittee will receive as an outline and,
If it so desires, discuss with me or with
some Of my partners.
I'm the first place, what the the DIFF
ferences between the rights and privi-
leges of a private banker and an in
corporated bank?
"As I see it, they consist chiefly In
the fact that an incorporated bank
receives from the Government, Federal
or State, from which its charter comes,
certain privileges, and for those privi-
leges it has to conform to certain laws
and regulations of the Government,
applying only to the incorporated banks
business.
THE private banker has none of
these privileges, but as he does not
have to conform to any special Govern
ment regulation, he has somewhat
greater freedom of action.
Bound by Ethics.
"The private banker is a member of
a profession which has been practiced
since the Middle Ages.
I'm the process of time there has
grown up q code of professional ethics
and customs. on the observance OF
which depend his reputation, his for
tune and his usefulness to the COM
munity in which he works.
Some private bankers, as indeed Is
the case in some of the other profess
sions, are not as observant of this code
as they should be, but If, in the exercise
of his profession, the private banker
disregards this code, which could never
be expressed in legislation, but has a
force far greater than any law, he will
sacrifice his credit.
This credit is his most valuable pos
session, 1t is the result of years of fair
and honorable dealing and, while 1t
may be quickly lost, once lost cannot
be restored for long time, If ever.
"The banker must at all times so
conduct himself as to justify the conf
dence of his clients in him and thus
preserve 1t for his successors.
IF may be permitted to speak OF
tllC lA Ia, Va hdNC biAC AOAAoA
to be the senior partner, should state
that at all times the idea of doing only
first-class business, and that in first
class way, has been before our minds.
Errors Of Judgment.
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.
"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 yearsO, but
our mistakes have been errors of judg-
ment 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 sufficiently
strong. knowing as he does that none
Of the aids provided by the Govern
ment for incorporated banks, such as
the Federal Reserve System or the Re
construction 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 clients to the best of his
ability II 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 ad-
vice Is q great part Of the credit of
which have spoken above, as being
the best possession of any firm.
WIs>. - prsva 4. na arkar~
$50 far as to the duties. I will now
pass on to the uses of private bankers.
These seem to me to be closely re-
lated to the fact that, as they are risk
ing their own money and doing their
own work, they may properly under
take certain responsibilities and busi-
nesses which the management Of an
incorporated bank might not be justi-
fed in dealing with.
Subject to the paramount need OF
keeping their banking position toward
their depositors sound and liquid, they
can In q very prompt and effective way
assist in the development Of the indus
tries and productions of this largely
industrialized world.
They can also come to the aid Of
general situation, or Of their friends and
clients, in times of panic and distress,
to an extent that an incorporated bank
might well feel it had no right to do
with its stockholders money.
Another very important use OF the
private banker Is to serve as channel
whereby industry may be provided with
capital to meet its needs for expansion
and development.
ITO this end the private banker
can serve well, since as he has at stake
not only his clients interests but his
own reputation, he Is likely to be
specially careful.
IF he makes q public sale and puts