iiiiiiiiiilBi iiiiiii' '■f. .^^ v*^ 0> ■fr'. ,^ ■^*. ^■,s-.<^"- . \ ,0 c 5 •/;, \^' '-y^ V v>- /-. <^j. n" \ /■ .^^^' ^/•. ■>'. ■X^ , -^ •• „ ''' c \ ^ -?= .^^' ' % / s^ %■ ' "" » aN^' ■V w 0~ .«!>' » s- ^ ' -f- V' 'O'^ '"fj^ V^' -" ■''^. <^ °^. "T- c> 1 . 0- . « ^ 7 ■ . ^ ' "/ \^ '■^^. .^^ .\' v^ "^ X '• '^ 0^ ,0^, ■^# <.•■ .<.^ ■^'o.' >r>^ .^ .,^'- ,0 o. 'OO' '^^_ « ., . o > .0- .A^ %^.v^ .x-^- aV ,X^' '-.r A^"V .V ."-'■«. ^^.. s^^ ,a .0 C, 'V- V? a' ', -'b -s-. aV ■/-, .A^' u^ '\ v' - > »S' ^^ '^^ ''>- y xO^c. '.,,.* .,x ,^ ■'^. ' ■J \^^ >;:;^^- ^ \ »■ . s •<= 0^ M> -'j. •y- .\\ , » "^ ' ^ '-'i V' .0- > V . . . J ,x>^^' -V ^- X' ./ V. vO O. 0. '> 0^ v>- ,A ^■ "b- S.S- -o . .^iCV '. ,0 o. ,.^^^- "V/-, ,a'<' .<-^' vX' .P ^..^ A" o o O JZ < O >- U u- o ■^ m , ■At, ^' .Mi, fW.^'^^ %• /' of •^^ mn'mmm^ ^r \ 'mW iVmmiitt-,p.mtk^)f^J\a0itr!atto .^^ J n-^, ;<; *.-** '// 5!*. «/ ■^^ -t,^- '^^• t-J '•■^- .-^r. K t •< »■ i» a •♦»- •i4s^'- P H. ^^' /- ^^, C'-- <■ ^ ^>'*. ^^/, *)' h. ■f^^ -fr# x %.^ -V v> e ■#^ %- s ■■^ f*"'?r* ^: AMERICAN BANKERS ASSOCIATION SOUVENIR VOLUME OF THE WASHINGTON MEETING COMPILED AND EDITED BY WILLIAM VAN ZANDT COX PRESIDENT, SECOND NATIONAL BANK CHAIRMAN, COMMITTEE ON SOUVENIR VOLUME Presented by Bankers Association of the District OF Columbia to the Accredited Delegates to the 31ST Annual Convention, October 10-13, 1905 [I] USRARVor ,iONOf»ESS Two Coprtu rtouxvoM : .:r'i'- tnif» I /n 7 f y I copr B. (Umiunittrr nii *nmirnir tUilmnr, JJriutimj a^l^ yrnpram WILLIAM V. COX, Chairman W. P. VAN Wir.KLE, Secretary MILTON E. AILES JOHN B, I.ARNF.R MARCUS BENJ^M1N THEODORE W. NOYES W. C. CLEI'HANE ANDREW PARKER JOHN F. CROWELL EDGAR D. SHAW JOHN C. ECKLOFF JOHN B. SLEMAN, Jr. JAMES F. HOOD J. KENNEDY STOUT THOMAS HYDE J. ShLWIN TAIT JOHN F. WII KINS COPVRIQHTKD, lOOS, BV BAK-'KEItn A.t3»OCIATIUN OF THE Tn HTRI C-T O K Co I, V M HI A PRESS or W. F. Roberts Company Washington City INTRODUCTION WHEN the preparation of an appropriate souvenir for the Washington meeting of the Bankers Association was assigned to me by my colleagues in the Bankers Association of the District of Columbia, it seemed desirable, as the National body was to meet in the Capital city of the United States where the great tlnancial transactions of the Nation are so elaborately conducted under the man- agement of the Treasury Department, that a volume to consist of a series of chapters each of which to be written by the most competent authority in the Government on the various functions of the Treasury Department would be most appropriate. This sug- gestion was submitted to the Executive Committee of the Bankers Association, the members of which gave it their hearty approval, and that cordial IV Introduction endorsement made it soon possible with the friendly assistance of Secretary Shaw to secure the able series of papers that constitute the section on "National Finance" in this volume. No visitor to Washington should ever leave our city without acquiring some knowledge of the many phases of the special life at the Capital, and accord- ingly under the heading of " Washington, City and Capital" there is presented a series of papers, intro- duced most appropriately with one written b\' the President of the Board of Commissioners of the District of Columbia, devoted to those characteristics which are peculiarly our own. These papers have been prepared by well-known writers whose names will be recognized as those fully qualified to discuss the subjects on which they have written. The local "Financial Institutions '" are properly worthy of consideration and we are proud of them. Five papers, therefore, are contained in a final section in which is given an account of the beginnings, development, and present condition of such institu- tions in the District of Columbia. An important feature of this volume is the illus- trations. These have been selected with great care ; some of them are from private collections whose owners have kindl\' permitted their reproduction for Introduction our guests, others are from official sources and their use allowed only for special events; while still others, representing well-known views, have been taken specially for this work. This is particularly the case of the panoramic view of the White House, the negative of which was immediately destroyed after the print was made. In conclusion it is a pleasure, as well as a duty to express my hearty thanks to the numerous friends who have helped to make this hook so attractive. To the members of my Committee 1 am under many obligations, and especially to Mr. Milton E. Ailes whose friendly suggestions have been most valuable; to Mr. J. H. Edwards, of the Treasury Department, whose interest in its success secured many official favors not usually available; and finally to Dr. Marcus Benjamin, whose skill and experience has in a large measure made possible the production of this volume in the short space of time available. w. V. c. PAGE INTRODUCTION mi TABLE OF CONTENTS vu LIST OF ILLUSTRATIONS xi NATIONAL FINANCES THE PUBIIC CREDIT j By Leslie Mortier Sh*w, Secretary of the Treasury THE TREASURY DEPARTMENT AS A BUSINESS INSTITUTION . ii By Horace A. Taylor, Assistant Secretary of the Treasury GOVERNMENT RECEIPTS AND DISBURSEMENTS .... 15 By Charles Hallam Keep, Assistant Secretary of the Treasury THE CUSTOMS REVENUES 21 By James Bronson JdwuoLDS, Assistant Secretary of the Treasury THE INTERNAL REVENUES 25 By John Watson Yerkes, Commissioner of Internal Revenue THE NATIONAL BANKING SYSTEM AND ITS SUPERVISION . By U'illiam Bakrei Ridgely, Comptroller of the Currency THE MINT SERVICE By George Evan Roberts, Director of the Mint THE MAKING OF SECURITIES AND CURRENCY . . . . By Vv'illiam Morton Mekediih, Director of Bureau Engraving and Printing 51 37 41 VIII Table of Contents PAGE LOANS AND CURRENCY 45 Bv Andrew Tyler Huntington, Chief of Division of Loans and Currency THE ISSUE OF UNITED STATES PAPER CURRENCY ... 51 By J»mes Anthony Sample, Chief of Division of Issue THE REDEMPTION OH NATIONAL RANK NOTES .... 55 By Thomas Eckstein Rogers, Superintencic'nt National Bank Redemption Agency REDEMPTION OF CURRENCY 59 By Franklin Winfield Lantz, Chief of Division of Redemption I'UBLIC DEPOSITS IN NATIONAL BANK DEPOSITARIES ... 63 By Eugene Benjamin \)kSK\M, Chief of Division of Public Moneys THE SECRET SERVICE 67 Bv John Elbert Wilkie, Chief of Secret Service Division WASHINGTON, CITY AND CAPITAL THE NATIONAL CAPITAI 73 Bv Henry Brown Floyd Macfaki.and, President, Board of Commissioners, Pistrict of Colutiihia NATIONAL POLITICS AND INTERNATIONAL DIPLOMACY IN WASHINGTON 79 Bv HtNRY LiTCHFihLii WtsT, Co)nmissioner of the District of Colinnbia HISTORIC WASHINGTON 83 By William Van Zandi Cox, President, Washington Board of Trade WASHINGTON AS A POLILICAL AND SOCIAL CLNTIiR . . . .S7 By Gah.laki) Hi'Ni, Aul/ior of " Life of fames A/adison ," etc. WASHINGTON AS AN EDUCATIONAL CENTER .... 91 By |omn Bell Larnfr. Counsellor at I.a7v, Washington City WASHINGTON AS A LITERARY AND SCIENTIFIC CENTER . . 95 Bv Marcus Bfnjamin, Editor of '' Washington During War Time" Table of Contents IX WASHINGTON AS A FINE ART CENTER By Glenn Brown, Secretary, Aniericati Institute of Architects PAGF. loi WASHINGTON AS A CONVENTION CITY 107 By Walter Collins Clephane, Attorney at Law, Washington City IMPROVING AND BEAUTIFYING THE NATION'S CAPITAL . . in By William Eaton Chandler, President, Spanish Treaty Claims Commission FINANCIAL INSTITUTIONS EARLY BANKS AND BANKING IN THE DISTRICT OF COLUMBIA . 119 By Charles Elder Howe, Assistant Secretary, American Security and Trust Company THE BANKS OF THE CITY OF WASHINGTON 123 By Milton Everett Ailes, I'ice-President, Riggs National Bank THE TRUST COMPANIES OF WASHINGTON CITY . . . .129 By William David Hoover, Vice-President, National Safe Deposit, Savings and Trust Company SAVINGS BANKS OF THE CITY OF WASHINGTON . . . .135 By John Ely Herrell, President, National Capital Bank FOREIGN COMMERCE AND INTERNATIONAL BANKING . .139 By James Selwin Tait, Manager, International Banking Corporation APPENDIX Oyfrrz/f^r ,.■■■..,.„.»■■. J.9... g j^ fjrc/taiti/f tirif/ttr^ t\'adhintli»n.h.(\ PAGE / View of City of Washington in 1905 Frontispiece Headpiece showing Gilbert Stuart's Head of Washington Tailpiece showing East Corner-stone of District of Colunnbi Headpiece for Table of Contents Headpiece for lllustralions ni ia ... V Old Staffordshire Plate showing White House and Portraits . . . vi From the collection of Mr. James F. Hood. VII Tailpiece Five Cent Bank Note '" From the collection of Mr. James F. Hood. Old Staffordshire Plate showing the Capitol Building . ■ . . . x From the collection of Mr. James F. Hood. XI Five Dollar Bank Note of Columbia Bank, 1852 xvi From the collection of Mr. Charles E. Howe. The Treasury Building from Lafayette Square .... facing ?, / Facsimile of Check for Forty Million Dollars Used in Settlement of French Panama Canal Company's Interests 3 From a photograph obtained through the courtesy of Secretary Shaw. The Mint Medal of the Present Secretary of the Treasury ... 9 Credit is due to Mr. C. N. Cruikshank and to Mr. Paul Brockett for designing the headpieces, and also to the firm of Leet Brothers for the use of many copyright photographs. XII Illustrations TAGE cut '■^'^'"g " United States Treasury Building about 1S53, from a contemporary Wood From the collection of Mr. James F. Hood. Portrait Headpiece showing Secretaries of Treasury Tliomas Ewing (1841) and Thomas Corwin (iSso-'oj) '' Wagon Unloading Chests of Coin on East Front of Treasury Building . 14 Exhibit of Treasury Department, Louisiana Purchase Exposition facing 15 From a photograph by Mr. E.J. T.iylor. Portrait Headpiece showing Secretaries of Treasury Daniel Maiming (i885-'87) and Lyman J. Gage (1897-1902) '5 Facsimile of Treasury Seal ......••• '9 United States Custom House, New York City . . . facing 21 - From a photograph of the accepted plan. Portrait Headpiece showing Secretaries of Treasury William A. Richardson (i873-'74) and Hugh McCuUoch {iS65-'69 and iS84-'85) . 21 A Polariscope used in Custom House for Testing Sugars ... 24 Portrait of Alexander Hamilton facing 25 From a steel engravin,? by H. B. Hall, Jr. Portrait Headpiece showing Secretaries of Treasury, George S. Boutwell (i869-'73) and Salmon P. Chase (1861-64) 25 A Mass of Currency Ready for Condemnation 29 The First Bank of the United States facing 31 ^ From an old engiaving in the collection of Mr. \Villi.im V. Cox. Portrait Headpiece showing Secretaries of Treasury, Charles J. Folger (i88l-'84) and W.ilter Q. Gresham (18S4) 31 Engraving National Bank Notes 3^ Melting Furnace in United States Mint facing 37 Ingot Moulds from United Stales Mint 37 Assay Mint Medal of 1901 4° facing PAGE 41 ^ 41 44 facing / 45 ristow 45 49 Illustrations xiii Bureau of Engraving and Prinliig, Wasliington Printing Bank Notes, Bureau of Engiaving and Printing An Engraver at Woik, Bureau of Engraving and Printing Exhibit of Engraving Processes of Treasury Department . Portrait Headpiece showing Secretaries of Treasury, Benjamin H. Bristow (iS74-'76) and William Windom (iSSg-'gi) View of the Treasury Building in 1804 ..... From an old woodcut in the collection of Mr. James F. Hood. Exhibit of Mechanical Printing of Currency .... facing 51 ' From a photograpll by Mr. E.J. Taylor. Portrait Headpiece showing Secretaries of Treasury Levi Woodbury (1834- '41) and Oliver Wolcott (1795-1S00) 51 Medal Struck by U. S. Mint in Honor of First Steam Coinage in 1836 . 54 Maceration of Old Bank Notes ...... f.icing 55 J Portrait Headpiece showing Secretaries of Treasury Richard Rush (i825-'29) and Robert J. Walker (iS45-'49) The Macerater in which Condemned Bills are Reduced to Pulp United States Mint Building, Philadelphia .... Portrait Headpiece showing Secretaries of Treasury Lot M. Morrill (i876-'77) and Chailes Foster (i89i-'93) The First United States Mint in Philadelphia From an old woodcut obtained tlirougll the courtesy of Hon. Robert E. Preston Counting Cash in Treasury Vaults ..... Portrait Headpiece showing Secretaries of Treasury Charles S. Fairchild (i887-'89) and John G. Carlisle (iS93-'97) 63 Capital of a Column in Treasury Building ...... 66 A Counterfeiter's Outfit ........ facing 67 Portrait Headpiece showing Secretaries of Treasury William P. Fessenden (i864-'65) and John Sherman (i877-'Si) 67 03 53 facing 59' Morrill • 59 1. 62 facing 63 / XIV Illustrations TAGE Safe of Secret Service Oflice ......... 70 Plan of the City of Washington matie in London in 1793 ... 72 From an original engraving taken from the Literary Magazine for 1793 in the collection of Mr. John B. Larner. View of the City of W.ishinglon in 1838 .... facing 73 From an engraving in the collection of Mr. James F. Hood. View of the Capitol taken at Arlington 73 Seal of the District of Columbia 78 The cut for this illustration was obtained through the courtesy of Mr. Robert I,. Stone. The Capitol of the United States facing 79 ' View of the Washington Monument t.iken at Arlington ... 79 The Obverse of the Diplom.itic Medal ....... 82 Map of Washington during War Time with vignette of President Lincoln under fire at Fort Stevens in 1864, by James E. Kelly . facing S3 From the collection of Mr. William V. Cox. Headpiece showing outline of White House and Monument ... S3 Faciniile of Autograph of Robert Morris ...... S6 From the col'ection of Mr. James V. Hood. The PeiTiion Building at President Roosevelt's Inauguration . facing 87 Headpiece showing Stature of Daniel Webster ..... 87 Ticket to Inaugural Ball of President Roosevelt 90 The f^arnegie Public Library of Washington .... facing 91 Hea^dpiece showing Toweis of Georgetown University .... 91 Law Department and School of Diplomacy of George Washington University 94 The Cosmos Club, Devoted to Literature, Science, and Art . facing 95 Porlr.iit Headpiece showing John Hay and Joseph Henry • • • 95 Sntithsonian Institution .99 Illustrations xv PAGE / South Front of the White House, 1905 facing loi ' From a photograph taken specially for this volume. Headpiece sliowing Design of Justice from the IJbrary of the Supreme Court loi Ground Plan of Mall System ....... facing 104 The Apotheosis of Washington by Brumidi, the Painting that Forms the Canopy of the Rotunda of the Capitol ...... 106 Mount Vernon, the Home of Washington .... facing 107 ' Headpiece showing Arlington and Mount Vernon ..... 107 The Corcoran Art Gallery . ..... ... 110 The Library of Congress ........ facing \\\ ■'' Headpiece showing the Municipal Building of the District of Columbia . iii From a photograph of the Accepted Plan. The Medal Commemorating the Establishment of the Capital in the District of Columbia 116 One Dollar Bank-note of Potomac River Bank, 1855 .... iiS From the collection of Mr. Charles E. Howe. Bank of Columbia, Chartered in 1793 ..... facing 119 -" Facsimile of Stock Certificate of Bank of Maryland, 1792 . . . 119 From the collection of Mr. Charles E. Howe. Old Building of the Bank of Washington 122 From a photograph obtained through the courtesy of Mr. W. F. Mattingly, Old Building of the Metropolitan Bank ....... 122 From a photograph obtained through the courtesy of Mr. E. Southard Parker. A Banking Center, Junction of New Yoik and Pennsylvania Avenues and Fifteenth Street ........ facing 123 Portrait Headpiece showing George W. Riggs and W. W. Corcoran from Oil Paintings 123 Old Riggs Bank 128 XVI Illustrations lAGE A Vii'W of !■ Street, Looking Tow-iril tlie Treasury . . facing 129 Headpiece showing Union Trust (Company and American Security and Trust Company .......... 129 One Dollar RanU-note, Bank of the Union 134 From the coUcclion of Mr. Cluirles E. Howe. Natiiinal Savings Rank, 1S70 facing 135 Headpiece showing Kntrnnces of Home Savings Bank and Union Savings Bank 135 Tailpiece showing Hntiances of Washington Savings Bank and Merchants and Mechanics Savings Rank ........ 13S AUicrt Gall.itin 139 From an Kngr,iving. Headpiece showing facsimile of Foreign Coins ..... 139 ()bt.iin(?ii through the courtesy of Mr. J. Selwin T.iit. The State, War, and Navy Building 143 Clock in House of Representatives ........ 144 Washington National Banks; Farmers and Mechanics, Metropolitan Citiizens, American, Commercial, and Traders Appendix Wasliington National Banks; Capital, Second, Washington, Columbia, Lincoln, and t^entral Appendix Private Banks of Washington; Bell \- Co., W. B. Hilibs & Co., Crane, I'ariis & Co., International, and Lewis Johnson & Co. . . Appendix m^ no^ OOWJMBIABANK i<;VH ii nRf..1ll-t <5 V National Finances (2] , '-^-^i' i§^ ' "'^$s<% ■V' ■»"''^^^i3^«i '•^j^ 7-^ j£H^ " <^-^^ yi-^0>-%^^L,.s£^ ■ ■ - T -^■'''iS>f^'' ■ ^J LU < O I/O LU I- < o u_ o 3 OQ ->- ad. < LU ^ ^ ^s^siji'/LCLaZJLa6'r^^^^^^ THE PUBLIC CREDIT PUBLIC credit, as used in the subject assigned, is not synonymous with national credit. The Treasury Department can do little to affect the credit of the nation, but it can do much to con- serve public credit. It is not the province of admini- strative officers to prevent the payment of the fixed charges incident to the maintenance of the govern- ment, or to defer expenditures specially authorized by Congress, and they are equally pov/erless to increase revenues. By the exercise of proper care the Treasury Department can circumvent smuggling and undervaluations and other gross frauds against the revenues, but it can neither increase nor dimin- ish the rate of duty fixed by law, nor the internal revenue taxes imposed. s/ There is nothing known to man so sensitive as public credit. It is dependent upon sentiment as well as upon fact, and the existence of sentiment will produce facts sufficient to justify a sentiment before unwarranted. Dealing, therefore, with subtle undefined, and indefinable conditions, on which the The Public Credit prosperity, the contentment, and the happiness of eighty millions of people depend, the Treasury Department is confronted with a task at no time insignificant. It has been the fixed policy of the Treasury Department for more than half a century to antici- pate monetary stringencies, and so far as possible prevent panics. It should not be necessary to defend such a policy. Extraordinary measures to prevent the spread of epidemics are always commended, though this country has never witnessed a pestilence which has left in its wake so great an aggregate of suffering and sorrow as mark the presence of epidemics of financial disorder and industrial stagnature. Not only does private revenue, private subsist- ence, and private credit suffer from public distrust, but national revenues are also materially affected thereby. Should any of our great cities be forced to issue clearing-house certificates, whatever the cause, cablegrams by the hundred would countermand existing orders for merchandise, and customs receipts would reflect the calamity in thirty days. Independ- ent of individual suffering and disaster, the actual and immediate loss of one hundred million dollars from the government treasury would not equal the contraction of public revenues incident to a panic such as this country has witnessed several times in the last fifty years. And what can be done by the Treasury Depart- ment to relieve stringencies in the money market, and to restore normal conditions, so that whoever deserves credit can get credit, and none will hesi- The Public Credit tate to incur liability, lest circumstances over which he has no control will prevent meeting the same at maturity? It is generally conceded that our monetary system is non-elastic. Those who, in proof of the contrary, cite the ability of national banks by co-operation to increase circulation at pleasure, and to contract it at will, lose sight of the fact that when money is scarce and dear, it is ever unprofitable to maintain circulation ; and when money is plentiful and cheap, it is unprofitable to retire it. The slight element of elasticity possessed by our system as at present constituted works inversely to the needs of the public. Bank circulation does not respond to the varying needs of the country, and it should be borne in mind that national banks are under no more obligation to increase circulation at a loss, than are state banks and private corporations under obligation to borrow in Europe, and import gold for the com- mon relief. In the absence of this much needed automatic elasticity, the Treasury Department of necessity must bear the responsibility of doing all within the limits of its power to supply its place by relieving not the national banks, not the banks in the large financial centers, — but, by relieving the public, and thus, conserving public credit. Those who lose sight of the retlex infiuences of the money market, and note only its effect on bank and bank customers, are as ignorant of the true situation as those who think the banks are benefited by panics and resultant high rates of interest. Experience demonstrates that it is impossible for Congress to enact revenue laws that will exactly The Public Credit supply the needs of the government. There has been no year in our history that has not shown either a surplus or a deficit— though neither is desir- able, and both subject to wide-spread criticism. Had the American people produced, imported, and consumed during the last tlscal year per capita, as they did in the corresponding year of the previous decade, the deficit v^ould have been, not twenty- four millions, but ninety millions. Customs receipts for the first two months of the current fiscal year are tlfteen per cent above what they were in the corre- sponding months a year ago. How long these condi- tions will continue no man can tell, and 1 cite them merely to show that universal contldence, and universal distrust, are alike retlected in revenues. During periods when revenues exceed expendi- tures, the most natural way to relieve a temporary tension in the money market has been to purchase government bonds for the sinking fund account, or to make deposits in national banks. By allowing a surplus to accumulate in the treasury during months when money is undesirably plentiful and rates of interest undesirably, if not dangerously, low, and then restoring it to the channels of trade in times of stringency, by purchasing bonds, or making deposits, some slight measure of elasticity can be accom- plished. Care must be taken, however, that the deposit of public money secured by government bonds does not advance the price of bonds to the point where it is unprotltable for banks to maintain their circulation, for in that event national bank circulation will be certain to contract, and the effect of the deposit will be counteracted. The Public Credit Fortunately the law authorizes the acceptance of any security which the Secretary of the Treasury feels justified in taking. There is no doubt on this point, and instances can be cited where collateral of every kind has been waived and individual, personal guarantees accepted. The Statute reads: "Shall give satisfactory security, by the deposit of United States bonds and otherwise." Certainly it is not intended that deposits shall be secured by govern- ment bonds increased by something else. Beyond all legal question the provision is not cumulative, but alternative. The authority given is to accept security in government bonds, and to accept security "otherwise." By the judicious exercise of this dis- cretion, the price of government bonds can be kept normal, or reduced as occasion may require to a point that will stimulate national bank circulation. These deposits can then be called at seasons of the year when money is plentiful, lest its cheapness encourage unwise speculation. During periods when expenditures exceed re- ceipts, it is not so easy for the Treasury Department to anticipate conditions and effect an element of elasticity. The Treasury must be in a deplorable condition, however, when ten, twenty, or possibly thirty millions can not be spared for a month or more in times of acute stringency. No one would criticise the depletion of the government's bunkers to the limit of safety to relieve an acute coal famine; and admittedly, the loss of public credit, if long con- tinued, causes inevitably the loss of employment, and the loss of employment entails not only coal famines, but food famines as well. Then too there The Public Credit are always means at the command of the depart- ment by which circulation can be stimulated at appropriate times. There are some very good people who contend that the government should not meddle with the private tlnancial affairs of the citizen ; though the same people commend governmental watchfulness to prevent war and disease. These critics insist that the government must not concern itself with financial conditions as they effect the public, at the same time admitting that santitation is an appro- priate subject for governmental solicitude. They urge that the banks should be taught to rely upon themselves, forgetful, it would seem, that the people must of necessity reJy upon the banks. As well might they urge that springs, and wells, and supply streams be let alone, and authorities content them- selves with teaching the people the desirability of an abundant supply of pure water. Again, 1 say it is not the banks alone that are involved in this question of public credit, for the laborer on the street sutlers about as promptly, and quite as severely, from the effects of a panic, as the banker in his office. 1 grant that the American banker is not always as conservative as one would wish. The desire for big dividends is altogether too potent with many boards of directors. The success of a bank should not be, — must not be, measured by dividends earned. Banking may not be a profession, but in ethics it should approach a profession rather than the avoca- tion of the speculator. We count the lawyer, the doctor, and the preacher most successful who best serve those who rel\- upon them. Fortunately the The Public Credit lawyer, the doctor, and the preacher who best serve their clients, their patients, and their parishioners are seldom forsaken, and their seed seldom beg bread. The bank that best serves the public, whose servant it is, may not pay the largest dividends, but in the swing of years it will build for itself a name; not the envy of the world, but the pride of those who have had to do with shaping its policies. So'while the banker must be taught self-reliance, and must be condemned for policies which result in public disaster, yet when banks through ambition, through avarice or through greed, tail in the discharge of the appro- priate functions of their great calling, the Treasury Department must not excuse itself and join in popular condemnation of those who of all should be the conservators of the public credit, but it must to the limit of the authority with which it is clothed, and at the risk of personal reputation, grant relief and prevent disaster. /^//-^^^ ,^^ ^6^ — V. to in CO o < d o 5 a21 a: < m < I- r) THE TREASURY DEPARTMENT AS A BUSINESS INSTITUTION IT is quite natural that in the public mind generally the Treasury Department is associated with financial transactions only, and that the Secre- tary of the Treasury is regarded as only the Minister of Finance. Very few people probably know what a vast amount of business is transacted by the Treas- ury Department having no relation to the manage- ment of financial affairs. Everyone knows that among the functions of the Treasury Department are the collection and disbursement of the public revenue, maintenance of the public credit, coining and printing money, bonds, stamps, etc. The organ- ization of the Treasury Department was mainly for these purposes, but from time to time, as the public necessities have required, new branches of the Government service have been established and been placed under the control of the Treasury Depart- ment. Among these may be mentioned the office of the Supervising Architect, known as the bureau 12 The Treasury Department of Architecture, the bureaus of Navigation, Steam- boat hispection, Coast and Geodetic Survey, Marine Hospital, Revenue Cutter and Life-Saving Services, control of the salmon and seal fisheries, etc. With the organization of the Department of Commerce and Labor, several of these bureaus were very properly transferred to that Department, as the Treasury Department had become very greatly over- loaded. As at present constituted, but a small proportion of the officials and employees of the Treasury Department are connected with the management of the financial affairs of the country. The customs division and the internal revenue bureau assess and collect the public revenues in accordance with law. The treasurer's office, through its various divisions, is devoted wholly to financial matters. The comptroller of the currency has to do with the management of the national banks. Aside froui the bureaus and divisions named, the various departments have little or nothing to do with strictly financial matters. There are six audi- tors, employing large forces of clerks, who pass upon all vouchers submitted from the various departments of the Government, but have no juris- diction other than to allow or disallow claims pre- sented. The comptroller of the Treasury is tlnal authority when the auditors are appealed from as to the payment of claims, but has nothing to do with the policy or details of financial management. The appointment division keeps all records and transacts all the business relating to appointments, dismissals, promotions, transfers, leaves of absence, etc. The AS A Business Institution 13 miscellaneous division is the medium between the bureau of internal revenue and the Secretary's office, and takes charge of all matters not directly per- taining to any special division or bureau. The stationery division provides stationery of every kind required by the Treasury Department and all its branches wherever located. The supervising architect's office, one of the great bureaus of the Government, has charge of the selection of sites for public buildings, their con- struction, repair, and preservation, and also assigns space in them to the various officials. This office employs a very large force, including many experts for technical work, and expends many millions of dollars annually. The office of the chief clerk and superintendent is one of the most important in the Department. The extent of its work is enormous and infinite in its detail. It has the custody of all public buildings ; designs, supplies, and keeps in repair, the furniture for them ; and furnishes them with heat, light, water and supplies of all kinds; appoints the custodian forces, employing an army of men, such as engineers, firemen, elevator con- ductors, janitors, and laborers. The public health and marine hospital service IS under the Treasury and its operations extend not only throughout this cojuntry, but it has official stations in nearly all the important ports of the world. It cares for sick and indigent seamen, and also maintains a strict quarantine service and guards the public against all epidemic diseases. The revenue cutter service, employing forty vessels, is engaged in preventing smuggling, in 14 The Treasury Department protecting the seal and salmon fisheries, carrying officials and supplies where needed away from lines of transportation ; assisting vessels in distress, and performing various other duties. The life-saving service, with stations all along our most dangerous coasts on sea and around the inland lakes, annually saves millions of dollars and many lives with its well drilled army ot heroic men. It will thus be seen that the Treasury Depart- ment is not devoted mainly to the management of the public finances, but, in addition to this most important work, is a great "business" institution, co-operating with the other executive departments in managing the vast concerns of Government. H. A. TAYLOR. o o I/O < u < o < UJ a I/O < O H r^'X'^'j::i:AU\4ix:'X:.*'f.-i^-L'X:^'^''x::'^'^'M)'^^^^^^^^ GOVERNMENT RECEIPTS AND DISBURSEMENTS MORE than usual interest attaches just now to the comparative receipts and disbursements of the National Government, because of the somewhat marked change in conditions that has taken place in the past two years. The Government fiscal years from iqoo to 1903 inclusive, were years of large surplus. In round numbers the surplus for the year ending June 30, 1900, was $80,000,000. It was about the same in 1901, increased to $90,000,000 in 1902, and in mo} dropped to $55,000,000. In 1904 the full effect of the repeal of the war taxes was felt, and there was also a sharp decline in customs receipts, so that the ordinary receipts of the Govern- ment exceeded its ordinary disbursements by only nine million dollars. During that year, however, the Government paid $50,000,000 for the right of way of the Panama Canal, and if this item is included the year of 1904 shows a deficit of more than 840,000,000. In 1905, with no extraordinary pay- 16 Government Receipts and Disburse ments ment of this character, the deficit was 124,000,000. While the most important factor bringing about this changed situation was the repeal of the internal revenue taxes imposed at the time of the war with Spain, numerous other factors have also entered into the case, and to understand what these have been we must examine the Government's sources of revenue as well as the character and extent of its expenditures. In the daily statement issued by the Treasury Department on the last day of the last fiscal year the total receipts of the Government were given in round numbers at $540,000,000. This sum does not include the postal receipts, as the postal revenues remain in charge of the Postmaster-General and are applied directly to the payment of postal expendi- tures. Exclusive of postal revenues, therefore, the Government income in 1905 was derived from the following sources: from customs, in round numbers, $260,000,000; from internal revenue, $230,000,000, and from miscellaneous sources, $50,000,000. Of these three classes of revenue the customs revenue is subject to much the greatest fluctuations. Changes in business conditions are reflected almost at once in the customs receipts. In forecasting the condition of the Treasury in his annual reports to Congress, the Secretary of the Treasury finds it more difficult to forecast the customs receipts than to determine with reasonable accuracy the other items of the Government's receipts and expenditures. Thus, in 1902, the customs receipts were $254,000,000; in 1903 they showed an increase of $30,000,000, rising to $284,000,000; in 1904 they dropped $23,000,000 Government Receipts and Disbursements 17 to $261,000,000; and in 1905 they showed no change from the previous year. For the first two months of the current fiscal year customs receipts have increased very rapidly and are now $7,000,000 greater than the receipts for the corresponding period a year ago. An interesting feature of customs receipts is the fact that their collection is concen- trated. Of $260,000,000 customs receipts last year, two-thirds was collected at the port of New York. There are 123 customs districts, but 90 per cent of the customs revenue is collected in six districts. For obvious reasons the internal revenue receipts show much less fluctuation than the receipts from customs. Thus for the three years 1903, 1904, and 1 90s, since the repeal of the Spanish war taxes, internal revenue receipts have remained practically unchanged at §230,000,000 a year, and for that portion of the present fiscal year which has already expired, the increase over last year is small. Among the principal items of the miscellaneous receipts of the Government are receipts from the sale of public lands, from profits on coinage, from the tax on bank circulation, and from the taxes and licenses in the District of Columbia. The receipts from the sale of public lands fluct- uate largely, but average about six millions dollars a year. Congress has set apart this portion of the national income for the reclamation of arid lands by irrigation. For twenty-flve years past the profits on coin- age have constituted quite an important item in the public revenue. As late as 1903 the seigniorage amounted to $8,000,000 a year, but for the current [3] 18 Government Receipts and Disbursements fiscal year it will hardly exceed one-quarter of that amount. Last year the profit on the coinage of pen- nies and nickels alone was about a million and a half dollars. The daily statement of the Treasury classifies the Government expenditures under seven headings, namely, civil and miscellaneous, war, navy, Indians, pensions, public works, and interest. Of these, pub- lic works is new, never having been used until the present fiscal year. It includes expenditures on rivers and harbors, irrigation, on public buildings not military in character, and on the Panama Canal. One other item of public expenditure might perhaps be given separately in the Treasury statement to advantage. When the postal receipts fall to equal the postal expenditures, funds are taken from the general Treasury, and advanced to the Post Office Department to meet the postal deficit. During the last fiscal year $15,000,000 was advanced to the Post Office Department in this way, and probably a greater sum will be advanced during the current fiscal year. This item is now included under the heading "civil and miscellaneous," but it might well be given in the daily Treasury statements under a separate head. The expenditures of the Government for interest, pensions and Indians change from year to year within comparatively narrow limits. The large changes in recent years have been in the two items, "civil and miscellaneous" and "navy." In 1903 the naval expenditures were $83,000,000; in 1904, $103,000,000, and in 1905, $1 17,000,000. The civil and miscellaneous expenditures have also shown rapid increase, due not only to the increasing Government Receipts and Disbursements 19 population of the country but even more to the extending scope of the Government's activity. Thus, the extension of free delivery of mail matter to rural communities, the construction of the Panama Canal, the reclamation of arid lands by costly irri- gation projects, a large increase in the number of public buildings under construction and the constantly extending held of the work of the Depart- ment of Agriculture have been and are potent intlu- ences in swelling the volume of the public expendi- tures. It might fairly be expected that the increasing scale of public expenditure, due to the growth of the country, would be met by an increase in public revenues from the same cause, but the increase in disbursements, due to the entry upon new fields of activity, can in the end only be met from new sources of revenue. CHARLES HALLAM KEEP. >- U oc O >- o X O U < 1/1 THE CUSTOMS REVENUES ^ WITH the theorist and the student who claim that a tariff is baneful and the system of protection an enemy of civilization the Treasury Department does not contest with their own weapons, for tine-spun argument and specious reasoning, have no place in its arsenal. It is condi- tion, not theory, that confronts the Department as it glances at its books of record. And it propounds the pertinent query, based on solid financial fact, of what today would be the situation of the country "^ had the ten billions of customs dollars never been collected for the benefit of Uncle Sam. To be precise and statistical: beginning in 178Q and con- tinuing to the time the custom houses closed on June 30, 1905, the customs receipts of the United States have been just $9,641,898,970.63. There is nothing that shows the growth of our country better than our customs revenues. While ocean commerce was passing from the small sailing vessel to the mighty ocean-liner, our population 22 The Customs Revenues increasing from tiiree millions to eighty-three, our travel facilities changing from horseback and coach to sixteen billions of railroad property, the customs revenues more than kept pace with this progress quickstep. It is now possible to collect on an average as much money from customs every four days as in a whole year in the days of 1790; over twice as much in a day as then in a month. In the fiscal year just closed there went into the Treasury coffers two hundred and sixty-two millions of customs dollars. From the port of New York comes the bulk of this revenue. The merchandise landed on its wharves pays two-thirds of the customs duties col- lected by the Government, twice as much as is taken from all the other ports of the country com- bined, and yielding an annual revenue of nearly $180,000,000. Boston comes second and Philadel- phia third, the former some distance over and the latter just under the twenty million mark. Then follow Chicago, San Francisco, and New Orleans, in order and in close rivalry, and next, Baltimore. Saint Louis is eighth, and Tampa and Detroit end the list of the ten ports at which at least a million dollars is collected each year. There are nineteen ports at which the annual revenue is between $300,000 and $1,000,000, headed by Cleveland ; and fifteen, led by Newport, Vermont, where the reve- nue exceeds $100,000. And besides, from out in the Pacific, Hawaii sends more than $1,000,000 each year to help pay the expenses of her new governmental parent. The Customs Revenues 23 Into the Treasury the customs receipts come from one hundred and fifty-seven different ports which Congress in its wisdom has established, scattered far and wide from the upper corner of Alaska in the north to the lower end of Florida in the south, from Honolulu in the west to the: Canadian boundary of Maine in the east. Two states have joint ownership over the lead in number of ports within their borders, New York and Maine, each with fourteen to her credit, while Massachusetts with her twelve is second and far ahead of her nearest rival. Of all these ports there are forty-six that are not self-supporting, where there is relatively large expenditure and almost infinitesimal revenue, where it costs more than a dollar to collect a dollar, which unbusinesslike condition the Treasury Department is powerless to remedy until Congress gives authority to undo what it itself has done. V The worst example of this in the last complete year of record is the port of Beaufort, North Carolina, at which two persons were employed at an expense of fifteen hundred dollars for the year— who collected the sum of $1.55 in revenue— making it cost $973-72 to collect one dollar. And Crisfield, Maryland, in the same time collected $22.70 at an expense of $2,700. ^ On the other hand, at New York, where seven thousand and more ships enter each year and an army of 2,700 persons are employed to do the necessary customs work, just two cents of each dollar collected goes for expense and the other ninety-eight to the profit of the government. In all 24 The Customs Revenues Tile country over, small ports and large, accessible and isolated, busy and inactive, it costs the Govern- ment a little over three cents to collect each dollar of customs revenue. Great as has been the increase in the customs revenues, the march has not yet stopped. The new hscal year is nov/ but two months old, yet in that time there has come into the Treasury six millions of dollars more than in the same months of the year that preceded, and a continuation of the rush of duty-paying imports with which the year begins means a new record in the customs revenues of the land. JAMES B. REYNOLDS. '+ THE INTERNAL REVENUES w lay along was the country HAT a bank-bill was at Philadelphia, or a shilling-piece at Lancaster, that was whiskey in the towns and villages that the bank of the Monongahela river. It money, the circulating medium of the A gallon of good rye whiskey, at every store a\ Pittsburg, and at every farmhouse in the four counties of Washington, Westmoreland, Alleghany, and Fayette was the equivalent of a shilling-piece." This, says the historian McMaster, was the status in Western Pennsylvania when the first excise or internal revenue tax law was enacted by Congress in 1791. Alexander Hamilton, then Secretary of the Treasury, probably drafted the bill, certainly approved and urged its passage. This new law levied a tax on distilled spirits ranging from 7 to 18 cents a gallon, according to strength. To the distillers of Pennsylvania it was a crushing blow. The noted "Whiskey insurrec- tion" followed. Revenue officials were tarred and feathered, beaten, driven away, and almost mur- dered. Malcontents and rioters defied the law. 26 The Internal Revenues President Washington issued warning proclamations to these defiant law breakers of the Keystone State, and fmally in 1794 he called into the tield fifteen thousand troops, largely veterans of the Revolution. They marched to meet the insurgents. Show of federal force was sufficient. Surrender was prompt. The insurrection collapsed and its suppression was virtually bloodless. The first internal revenue legislation was basis for the first arm.ed resistance to the power of the federal government and the due and full execution of its laws. Unfortunately, physical and armed resistance to the enforcement of the same laws has constantly marked the history of the internal revenue system and sometimes the illicit distiller or " moon- shiner" of today, as did his ancestor, resists to the death the attempt of revenue officials to enforce federal legislation. Albert Gallatin was in sympathy with the insurgents, intense in his antagonism to the levying and collecting of the taxes of lyqi. in 1802 he was Secretary of the Treasury and largely through his influence all internal revenue laws were abolished and customs dues furnished the national treasury with funds necessary to the support of the govern- ment. Debt incurred during the War of the Revolution caused the passage of these first statutes. Years of peace followed and all were repealed, but the second war with Great Britain forced their re-enactment in 1813. in 1817 they were once more abolished and there was no such tax imposed again until the enor- mous expenses of the Civil War demanded a prompt The Internal Revenues 27 and certain system for filling the money chest of the Government. In 1862 a most orderly, complete, and wide- reaching internal revenue taxing scheme was devised and adopted. The need was great and American statesmanship, genius, and patriotism were equal to the demands of the hour. To Governor, afterward Chief Justice, Chase, then Secretary of the Treas- ury, and John Sherman, also afterward Secretary of the Treasury, then Senator, is due largely the credit for the passage of the Act. Again two notable financiers appear in connection with the history of these laws. George S. Boutwell of Massachusetts, was appointed by Mr. Lincoln Commissioner of Internal Revenue under the law of 1862 and on him fell the heavy burden of organizing the bureau and enforc- ing laws which involved almost every conceivable V object of taxation, from a street-car ticket and a box of matches to a ton of coal and a railway locomo- tive. Under this law, as under previous internal revenue legislation, distilled spirits, beer and tobacco bore the heaviest part of the burden. In the peaceful days of the seventies, eighties, and the early nineties these laws were largely modi- fied as to the number of objects taxed and the rate of tax, so that the total receipts a year dropped from three hundred millions to a little over one hun- dred millions. In 1898 war was again declared and immediately Congress by its enactments laid upon the Internal Revenue Bureau the burden of gathering in the increased national income. One hundred millions 28 The Internal Revenues additional a year were needed. New objects of taxation were found, previous rates on old objects increased. The annual internal revenue collections grew from $146,000,000 in 1897 to $295,000,000 in 1900, and $306,000,000 in 1901. The war with Spain ended and Congress repealed the war legislation of 1898, and today on a peace basis, the Internal Revenue Bureau is collecting over $230,000,000 a year, being fully forty per cent, of the entire revenues of the government. Of the moneys collected as a result of the war with Spain enactments, the banks and bankers of this nation contributed $14,000,000. Under the internal revenue laws in force from 1791 to 1802 $6,500,000 were collected ; under those laws in effect from 1812 to 1817, $i5,soo,ooo; and from i8d2 to June 30, 1905, slightly over seven billions of dollars. Virtually all revenue taxes are paid through the sale by the government to the taxpayer of stamps which are affixed to the objects of taxation. These taxes are levied according to weight and volume, and not as a rule by value. The system may not be philosophic, but it is practical. The total internal revenues for the fiscal year closed June 30, 190s, were slightly in excess of $234,000,000. Of this sum the tax on distilled spirits (whiskey, alcohol, and brandy, $1.10 a proof gallon) produced nearly $129,000,000; the tax on beer ($1 a barrel of 31 gallons), $49,500,000, and the tax on manufactured tobacco, snuff, cigars, and cigarettes, $45,000,000. The total force engaged in this work aggregates The Internal Revenues 29 some four thousand persons and the average expense of the bureau is $4,soo,ooo. Its work covers all the territory of the United States except the Philippine Islands and Porto Rico. The leading States in the payment of internal revenues and in their proper order are Illinois, New York, Indiana, Kentucky, Ohio, and Pennsylvania. The lowest collection district in point of receipts is Hawaii, where the annual collections are $45,000. Historically, internal revenue legislation is con- nected with war, war times, and war inheritances, yet it is safe to predict that this system, so responsive to public need, so readily invoked, and affecting but little our trade relations with other nations, is a permanent part of our fmancial system and will be a part of that system until the United States become only history. JOHN WATSON YERKES. 1- < t- Q T. O v: z: < ^UIMMALJU ULMALALALi Tjzrnjjuu THE NATIONAL BANKING SYSTEM AND ITS SUPERVISION THE supervision of national banks by the comp- troller of the currency, while entailing great and frequently grave responsibilities from the beginning, has grown more onerous year by year, with the development of the system, the constantly increasing number of banks, and the amplitude of their undertakings. During forty-three years of existence of the national banking system, the currency bureau has been presided over by eleven comptrollers. It was organized by Hugh McCulloch, an able financier and experienced banker, who was appointed comp- troller. May 9, 1863, and continued as the executive head of the bureau until March 8, 186% when his recognized ability secured for him advancement to the more exalted position of Secretary of the Treasury. At the close of Comptroller McCulloch's administration there were, in active operation, 907 national banks. 32 The National Banking System The second Comptroller of the Currency was Freeman Clark, who held office from March 21, 186s, to July 24. 1866. Under his administration the nimiber of national associations increased to 1,654, or 80 per cent. H. R. Hulburd succeeded Mr. Clark, February I, 1867, and served until April 3, 1S71, during which period the number of active associations increased to 1,907, or It) per cent. Next in line of succession was John J. Knox, appointed April 25, 1872, who enjo>ed the distinct- ion of having served as head of the bureau longer than any of his predecessors or successors. He retired April 30, 1884, after twelve years' service. The number of banks at the close of Mr. Knox's administration had increased to 2,600, or 36 per cent. Henry W. Cannon succeeded Mr. Knox, May 12, 1884, and served until March i, 188b. The active banks at the close of his term numbered 2,768, an increase of 6 per cent. William L. Trenholm was next appointed comp- troller, April 20, 188b, and served until April ^o, 1888, on which latter date the banks in active opera- tion numbered 3,200, an increase of 15 per cent. Edward S. Lacey was appointed to succeed Mr. Trenholm, May i, i88q, serving until June 30, iSq2. The number of banks increased during his adminis- tration to 3.759, or 17 per cent. A. B. Hepburn succeeded Mr. Lacey, August 2, 1892, and resigned April 25, 180;. During the brief period of his incumbency the number of banks increased to 3,830, or 1.8 per cent. James H. Eckels was next appointed comptroller, AND ITS Supervision 33 April 26, 1893, and continued in office until Decem- ber 31, 1897. During the five years of his incum- bency, there were 143 failures of national banks, practically one-third of the total number occurring in the forty-three years of existence of the system, due to the panic of 1893. At the beginning of his administration there were 3,830 active associations, and at its close this number had been reduced to 3,607, a decrease of nearly 6 per cent. Upon the retirement of Mr. Eckels, Charles G. Dawes was appointed comptroller, January i, 1898, and served until September 30, 1901. During his administration the number of national banks increased to 4,221, or 17 per cent. This large increase was due principally to the Act of March 14, 1900, which authorized the organization of banks with a minimum capital of $25,000. Mr. Dawes was succeeded by the present comptroller. Thus it will be seen that with each succeeding comptroller, excepting Mr. Eckels, there has been a steady increase in the number of banks, and a corres- ponding increase in the responsibility of official supervision. The increase in the number of banks, however, is not by any means the principal factor to be con- sidered in measuring the constantly augmenting de- gree of responsibility involved in official supervision. Originally, national banks were intended to be simply banks of discount and deposit, and a medium for the issuing of circulation based upon a deposit of Government bonds. The law enumerates their corporate powers to be: to discount and negotiate [4] 34 The National Banking System promissory notes, drafts, bills of exchange and other evidences of debt; to receive deposits; to buy and sell exchange, coin and bullion; to loan money on personal security; and to perform such other inci- dental powers as are necessary to carry on the busi- ness of banking. The present is an age of consolidation, expansion and great fmancial undertakings. Banks are imbued with the spirit of the times, and the tendency to depart from the well defined limitations of powers conferred by the bank act makes official supervision vastly more difficult and entails responsibilities upon the supervising officer far more onerous than those resulting from a mere increase in the number of associations. Active competition, superinduced by the con- stantly increasing number of banks and trust com- panies, has wrought a gradual and marked change in the methods employed in the conduct of banking at the present time, as compared with the earlier years of the system, and many banks now undertake operations not contemplated by the national bank act as coming within their enumerated or inciden- tal powers, producing conditions which require more watchful care and the exercise of greater discretion on the part of those vested with super- visory powers. The total number of national banks organized from 1803 to September i, 1905, is 7,895, of which 5,807 are in active operation, 1,652 have closed by voluntary liquidation, and 436, (or 5)4 per cent) have failed and been placed in charge of receivers. AND ITS Supervision 35 In the statement of condition on May 29th, 1905, these active banks show the following : Capital stock, $791,567,231.32; surplus, $4n,- 436,145.71; undivided profits, $201,855,091.02; total capital, surplus and undivided profits, $1,406,- 858,956,468.05. Individual deposits, $3,783,658,- 494.42; United States deposits, $65,570,520.69; United States disbursing officers deposits, $9,727,- 823.57; total deposits, $3,858,956,838.68. Loans and discounts, $3,899,170,328.32. Total resources, $7,327,805,874.68. Of the insolvent banks, the affairs of 354 have been fully settled. Claims have been proved against these banks to the sum of about $105,000,- 000. Of these claims, 78. 1 1 per cent have been paid in cash or by offsets. The total loss to creditors of all the national banks in forty-two years on their deposits, now amounting to more than three and one-half billion dollars, has been less than thirty millions dollars. The cost of liquidation of all the failed national banks has been a little over eight per cent of the amount collected by the receiverships. The percentage of the failures among national banks has been five and one-half per cent; among the banks other than national, about seventeen and one- half per cent. The failed national banks have paid their creditors more than seventy-eight per cent, while the banks other than national have only paid about forty-five per cent. Whether this very creditable record of the operations of "The National Banking System and its Supervision," is due to conservatism and good 36 The National Banking System jiidiiment on the part of bank management in general, or to the effectiveness of the official supervision in particular, or both, awarding to each its just propor- tion of credit, the result, on the whole, is very gratifying. WILLIAM BARRET RIDGLEY. to UJ I- < Q Z Z < 3 O THE MINT SERVICE THE mint service of the United States includes four coinatre mints, located in Philadelphia, San Francisco, Denver, and New Orleans, and eight assay offices, located in New York, Char- lotte, North Carolina, St. Louis, Deadwood, Helena, Boise, Carson, and Seattle. The assay offices receive gold bullion and pay coinage value for it, less a local charge of one-eighth of one per cent for the service of the office. The bullion is paid for by drafts on the Treasury, becomes the property of the government, and is shipped at its expense to the mints for coinage. The original mint is the one in Philadelphia established there when that city was the seat of government. In 1901 a new building was com- pleted for it at a cost of $2,025,000, and it is today the largest, finest, and most thoroughly equipped mint in the world. The mint in San Francisco was established by act of Congress dated July 3, 1852, and ranks second in capacity and volume of output. To December 38 The Mint Service 31,1 904, the gold coinage of the San Francisco Mint aggregated $1,394,877,907 and the gold coinage of the Philadelphia Mint $1,152,322,352. The gold deposited in the San Francisco mint comes principally from the mines of the Pacific Coast States, Nevada, Alaska, and the Canadian Northwest, Mexico, and Australia. The receipts from Australia have been heavy of late years, a f:ivorite method of remittance from that country to London being by gold ship- ments to San Francisco, thence by United States Treasury transfer to New York, where the credit is converted into exchange on London or Paris, or gold is taken for shipment across the Atlantic. The United States Mint in Denver succeeded to a private coinage establishment conducted by Clark, Gruber & Co., a firm of Denver bankers. They made gold coins following the first discovery of gold in Colorado, and their coins bore a good reputation. The United States bought their coinage equipment in 1863 and conducted the establishment as an assay office until 1905, shipping the bullion purchases to the Philadelphia Mint. A beautiful new mint edifice has been constructed in Denver at a cost of about one million dollars, machinery is now being placed in it, and coinage operations will begin there this autumn. The Denver Mint will probably receive nearly all of the gold produced in the Rocky Mountain region. The mint in New Orleans was organized in 1818 by an act of Congress which also provided for mints in Dahlonega, Georgia, and Charlotte, North Carolina. The establishment of the latter two was due to the discovery of gold in the Appalachian The Mint Service ^ 39 range, the first gold discovery in the United States. These three mints were closed by the Civil War. The Nev/ Orleans Mint was reopened in 1879, the Charlotte institution was reopened as an assay office, and the old mint property in Dahlonega was voted to the State for an Agricultural College. The mint in New Orleans is the smallest of the present mints in capacity; and is occupied chiefly in the coinage of subsidiary silver for the territory tributary to New Orleans. The New York Assay Office is a very important institution. It is located in Wall street, adjoining its twin institution, the sub-treasury. The im- ports and exports of refined gold bars and gold coin, the medium of final settlement between the United States and Europe pass through this institution. Like the coinage mints it has a refinery. The most important assay office of the service, after the New York office, is that in Seattle, Wash- ington. It was established in 1898 to receive the gold from Alaska and the Klondike, and most of the product of that northwest region has found its way to this institution. Its receipts to July 1, 1905, prac- tically all from territory new seven years ago, have been: gold, $100,071,912.36; silver, $1,325,455.71; total, $101,397,368.07. The coinage of the United States exceeds in value and in number of pieces that of any other country in the world. During the calendar year 1904 the coinage of the United States was as follows: gold, $233, 402,428; silver, $15,695,609.95; copper and nickel, $1,683,259.35. The profits accruing on one and five 40 The Mint Service cent pieces aggregated $1,320,661.55. The total of the foregoing figures for new coin made last year, $250,781,567.30, doubtless exceeds any coinage record for one year ever made before by any country in the world. The mint service is organized under a bureau of the Treasury Department, with headquarters in the Treasury building. Besides the ordinary minting operations, the service supplies fme gold and silver bars for the use of manufacturing jewelers, manu- facturers of dental supplies, and for other industrial purposes. It sold in 1904 for these uses $22,278,204 of gold, and $2,917,386 fine ounces of silver. GEORGE E. ROBERTS. z: o o < o z: a; □_ O > < a; O O < LU THE MAKING OF SECURITIES AND CURRENCY THE making of the printed securities and currency of the United States is a matter of interest to those engaged in handling them in large quantities. According to law their prepara- tion and issue is under direction of the Secretary of the Treasury, and during the last twenty-seven years they have been prepared and completed exclusively in the printing bureau of the Treasury Department. When it is determined to issue a new form of security or currency, the subject of the general design is discussed by the oftlcials interested, and the conclusion is embodied by a trained designer in a model which is submitted for criticism to the same officials, and when satisfactory to the Secre- tary is approved by him as a basis for engraving. T!he design must necessarily be conventional in cer- tain respects, to admit of conspicuous placement of the title, and the wording of the legend, and the numeral counters which must be so located that the 42 The Making of currency may be readily distinguished and rapidly counted in large amounts. Then, there is the usual vignette, different for each denomination, to give to it individuality and obstruct counterfeiting. The approved design is placed in the hands of selected engravers to work out their respective specialties of engraving, and when completed the separate engravings on thin flat steel are assembled and transferred to another piece of steel of sufficient size to contain the entire model, thus producing one engraving of the whole design, or a completed plate for printing one-subject securities. Currency being of smaller dimensions the whole design is retrans- ferred and repeated on another and larger piece of steel making a completed plate to print several notes at one impression. The same process of transferring is applied alike to face, back, and tint plates, for printing different colors. Transferring makes every completed note a facsimileof every other note of the same issue and denomination, hence a counterfeit may be detected by comparison with any genuine impression of its kind. By transferring, which is performed with a steel roll under great pressure to take up in relief tiie sunken lines of engraving and by pressure reproduce them on a plate for printing, the original engraving or its assembled parts may be available to restore worn plates or make new ones. The distinctive paper used is held in the custody of another representative of the Secretary of the Treasury. It is manufactured for its single purpose and is an added obstacle to the counterfeiter. Its distinctive feature is a double line of colored silk fiber so located on the sheets to be conspicuous on Securities and Currency 43 both ends of the back of each printed note. When drawn for use, the paper is passed through the wetting processes to prepare it for printing. The plate and paper delivered to the printer, the printing is begun. Attached to each printing press is an automatic device that records every impression printed. The printed sheets are sent to the examiners, and after examination all the imper- fect sheets are eliminated and separately accounted for. After the face printing the sheets are put under hydraulic pressure, of five thousand pounds to the square inch, and the pressure, with the sizing to which the currency has in the meanwhile been subjected, gives smoothness to the sheets and crisp- ness and durability to the notes. The subjects on the sheets are then numbered by specially devised machines. The system of numbering the securities and currency, in connection with the characters affixed to the numbers, and the special quality of the inks used, add to the difficulty of counterfeiting, and aid in the detection of coun- terfeit currency. The bonds and national bank notes in sheets, are sealed in the printing bureau by surface printing. The former are delivered to the Secretary of the Treasury, and the latter to the Comptroller of the Currency. The United States notes and certificates in sheets, are delivered to the Treasurer of the United States under whose supervision they are sealed and separated, imperfect sheets being can- ceiled and macerated. The safe-keeping in the course of manufacture of the perfect and imperfect securities and currency, 44 The Making of Securities and Currency from the time of cutting the first line of engraving and the receipt of the first sheets of paper, is assured by such as efficient and practicable system of counts, checks, and guards, and method of accounting, as can be conceived possible to employ in handling engravings and sheets of great aggregate value. Periodically there is an official rigid examination and count of the balances of sheets of securities and currency in the bureau by a committee under direc- tion of the Secretary of the Treasury, which invari- ably concludes with satisfactory result. WM. M. MEREDITH. h- < □_ LU Q >- in < LU O I/O LU 1/0 I/O LU U O ac Q_ o > < o o X LOANS AND CURRENCY JAY COOKE, the Philadelphia banker, and most prominent of those who financed the Govern- ment of the United States through the miseries of the Civil War, is credited with the declaration that "A National debt is a National blessing." Those of us who accept this view will agree that our country was the most blessed of nations at the close of that war, for it owed the huge sum of $2,865,000,000. But great as was this indebtedness it was probably not so heavy a burden as that assumed by the young republic when it began its existence in 1789, the debt being then nearly $75,000,000 without a dollar to meet it or to meet the current expenses of the Government. In fact, Alexander Hamilton, the first Secretary of the Treasury, borrowed money from the Bank of North America in Philadelphia and the Bank of New York on his own responsibility, to the amount of nearly $200,000. The alternate decrease and increase in the debt from 1789 down to the present may be traced in the annual report of the 46 Loans and Currency Secretary. It will be found that on January i, 1835, we owed but $33,733. 3S, though on that day there was more than nine millions of dollars of cash in the Treasury. The United States has never been, tech- nically speaking, free from debt, for there have always been unpaid obligations outstanding ; but, as in the above instance, it has at times had money enough to pay off everything if it could only get its creditors to ask for the cash. During the Civil War the Government resorted to various expedients to obtain money. It borrowed from the banks, opened popular subscriptions to short term and long term obligations, effected tem- porary loans for both small and large amounts, gave six per cent certificates of indebtedness to contrac- tors willing to accept them in liquidation of their accounts and even borrowed several hundred mil- lions without asking the consent of the lenders. It was through this last named genial proceeding that the United States notes, otherwise known as green- backs and legal tenders, found their way into use. There were about four hundred fifty millions of them and there are still three hundred forty-six millions outstanding. All of the obligations issued during the Civil War were negotiated by the Government with its own people in the United States. At first they were issued for gold, but after the suspension of specie payments, about January 1, 1862, the Govern- ment accepted United States notes, generally at par. There were several hundred millions of United States bonds (five-twenties, sixes of '81, and ten- forties) sold to go abroad, but the negotiations for Loans and Currency 47 their sale were conducted by financial houses for their own account, and not by or for the Govern- ment of the United States. As soon as the war was over the Government set about the purchase of its short term obligations, or their consolidation into bonds of longer terms, chiefly five-twenties. Then it sold its surplus gold from time to time and devoted the proceeds to the purchase of bonds. When the sales of gold and purchase of bonds began, gold was worth about 140, and the first bonds purchased were worth about 1 16, both prices in currency. The gold value of the bonds first purchased was about 82^. Under the influence of these operations the price of gold declined while that of the bonds was maintained, so that their approach to par value in gold soon justified an attempt by the Government to refund them at lower rates of interest. Accordingly the refunding Acts of 1870 and 1871 were passed under which some fifteen hundred millions of five- twenty and ten-forty bonds were refunded at five, four and a half, and four per cent. The refunding began in 1871 and ended in 1879. Further operations along the same lines refunded other portions of the debt while simultaneously pur- chases and redemptions were continued, so that by January 1, 1894, the debt had been reduced from the twenty-eight hundred and odd millions in 1865 to about five hundred and eighty-five millions. At this time financial troubles that have been accounted for in various ways put a stop to the reduction of our debt and in the ensuing twenty-eight months it was increased by the sale of two hundred and sixty-two 48 Loans and Currency millions of bonds, for gold, to replenish the gold reserve held for the redemption of United States notes. In i8qS a further sale of bonds, in the amount of about two hundred millions, was made on account of the war with Spain, and in 1900 and subsequent years refunding under the Act of 1900 added a new loan of five hundred forty-two millions, at two per cent, which was issued in redemption of a like amount of bonds of older loans bearing higher rates of interest. The United States bonds issued before and dur- ing the Civil War contained in their text no state- ment of the kind of money in which they would be redeemed. Before the war, gold and silver consti- tuted the only legal tender money; but the issue of the United States notes gave rise to speculation as to whether the Government might not lawfully pay them in redemption of its bonds. It was said that they were legal tender for everything due from the Government except interest on the public debt. On the other hand it was contended that the bonds, by their terms, were payable in "dollars," and that legal tender notes were not dollars, but only promises to pay dollars. The latter view finally prevailed and was embodied in the Act of March 18, 1869, which pledged the faith of the Government to the redemption "in coin" of all its obligations except those specifically payable in something else. Congress held this controversy in view when it authorized the refunding bonds in 1870, for the Act provided that the bonds should be redeemable " in coin of the present standard value."' Loans and Currency 49 The Act of March 14, 1900, under which tlie two per cent consols of 1930 were issued, provided that the bonds should be redeemable in United States gold coin. These bonds are the only obligations, except gold certificates, that are specifically payable in gold. Before the Civil War the Acts of Congress pro- viding for the issue of securities vested the authority therefor in the President of the United States. The Act of July 17, 1861, however, gave such authority to the Secretary of the Treasury, so the division of loans and currency was organized in that year. During the intervening forty-four years it has had charge of all details growing out of the issue, exchange, and redemption of the interest bearing obligations negotiated by the Government. There has never been an important error in its accounts, and none has remained untraced. Not a dollar has ever been lost to the Government through its operations, and no creditor has ever suffered loss. A. T. HUNTINGTON. [5] u en O o z H Z a. < < X u o b THE ISSUE OF UNITED STATES PAPER CURRENCY THE distinctive paper for all United States and national bank currency is made in the Crane Mills, Dalton, Massachusetts, under govern- ment supervision, shipped by express to the Treasury Department in Washington, and delivered to the bureau of engraving and printing as required. The plates are engraved by the bureau and turned over to the custodian of dies, rolls, and plates, an officer independent of the bureau officials, who only issues them on the order of the Secretary of the Treasury. When the director of the bureau has received an order for the printing of a certain class of money, requisition is made for the necessary plates and paper, for which receipts are given, and the plate printers must account, at the close of each day, for all plates and paper issued. Backs and fronts completed, the sheets pass to the numbering division where they are trimmed to 52 The Issue of United proper width and numbers applied. After careful inspection for errors the sheets are put up in packages of a thousand each, four notes on a sheet, for delivery to the treasurer of the United States. ^ Prior to 1885 the sealing and separating of the United States currency was done in the bureau, but Treasurer Jordan wisely decided that the final touch should be given in his office, thereby avoiding the danger of carrying such large sums of completed money through the streets. In September, 1778, Congress appointed a com- mittee to devise a seal for the Treasury, and the device and legend adopted then are in use today. The seal now in use was cut by Edward Stabler, of Sandy Springs, Maryland, in 1849. The legend on the seal is an abbreviation of the Latin sentence "Thesauri AmericaniSeptentrionalisSigillum," mean- ing "Seal of the Treasurer of North America." The wording would seem to indicate that as early as 1778, before we had won independence, a majority in Congress favored expansion. The packages of currency received at the Treas- ury are tlrst counted, then taken to the press room where seals and denominational figures are applied. After sealing, the sheets are again counted and examined for imperfect or misplaced seals. At the close of the day the freshly sealed work is vaulted until next morning, when the ink is suffi- ciently dry for handling. It is then turned over to the separators, by whom the sheets are trimmed and the notes separated. They are put up in straps of a hundred notes each, the numbers being kept in sequence. This is the tlnal and responsible count, States Paper Currency 53 the counter being required to make good any claim for shortage that may be established to the satisfac- tion of the treasurer. The four thousand notes are next pressed, tied, wrapped in heavy paper, sealed with wax, and labelled. The resultant package is practically a cube, and is the familiar form in which amounts of the United States currency are shipped to banks. When the day's work is completed the finished packages are delivered to the vault clerk, who places them in the reserve vault, where they remain until required, according to numbers, to replace in the cash old notes destroyed or to meet other lawful demands. From the completion of the paper at the mill to the packing of the finished notes there are sixty-one counts. The national bank notes are sealed at the bureau and delivered to the comptroller of the currency, who forwards them to the banks of issue. During the fiscal year ended June 30, 1905, there were sealed, separated, and placed in reserve 905,000 gold certificates, having a value of $107,920,000; 15,240,000 United States notes, having a value of $152,400,000, and 139,184,000 silver certificates, having a value of $249,004,000, or a total of 155,- 329,000 notes valued at $509,324,000. On June 30, 1905, there were outstanding United States notes valued at $346,681,016, Treasury notes of 1890 valued at $9,413,000, gold certificates valued at $5 1 7,579,969, and silver certificates valued at $465,- 265,000, having a total value of $1,338,938,985. The chief of the redemption division reports daily to the cashier the amount of each class of 54 The Issue of United States Paper Currency notes destroyed, and a like amount is withdrawn from reserve and taken up in tlie cash. The only ways by wliich the volume of United States paper currency can be increased are through Congressional action, deposits of gold coin for gold certificates, or the exchange of silver certificates for standard silver dollars. in addition to being the keeper of Uncle Sam's strong box in Washington, it is the duty of the treasurer of the United States to have a finger on the financial pulse of the nation. He should know the wants of all sections as to currency, and endeavor to supply them. Knowing the advantages of proper seasoning of paper currency before it is placed in circulation, he must look far enough into the future to have his vaults stocked with a sufficient supply, that the notes may have become thoroughly dry before issue. In recent years it has been difficult to do this, since the demand for new currency has been greater than the bureau of engraving and printing or the force of his own office could supply. JAMES A. SAMPLE. v: z: < ca 1 o o z: O H < LU U < THE REDEMPTION OF NATIONAL BANK NOTES THE three important steps which hnve been taken in the evolution of bank note currency — restraint, ultimate security, and national uniformity, have given this country for more than forty years the best paper currency it has had. The follovv'ing extract from a sketch of The Suffolk Bank of Boston, published in 1878 for private distribution, interesting for its historical facts, pre- sents a sharp contrast between the old conditions of bank note redemptions and the new. The business man of today knows little by experience of the inconvenience and loss suffered by the merchant of sixty years ago, arising from the currency in which debts were then paid. The national bank notes which he now receives are current for their face value. He cares not by what national banks the notes are issued, where they may be situated, whether they are sound or whether they are insolvent. He receives them today in payment at their f:ice, knowing that to-morrow he can use them in any state of the Union without possibility 56 The Redemption of of loss. Not so with the merchant of 1818. Receiv- ing payment in bank notes, he assorted them into two parcels, current and uncurrent. In the first he placed the notes issued by the solvent banks of his own city; in the other the bills of all other banks. Upon these latter there was a discount, varying in amount according to the location and the credit of the bank issuing them, and he could avail himself of them only by selling them to a dealer in uncurrent money. He could neither deposit them, nor use them in payment of his notes at a bank. This unsatisfactory state of the currency, with its annoyances and risks, continued till the establish- ment of the Suffolk System, so called, in 1824, — a system of redemption identical with, and which served as a model for, the present National Redemp- tion Agency at Washington. The national law of 1864 required national banks to redeem their notes at their counters, to select a redeeming agent from among the banks located in one of eighteen designated cities, and to keep on deposit with the redeeming agent a certain portion of their reserves to be available for the redemption of notes. These provisions, sufficient as they prob- ably appeared to be, proved unsatisfactory. In a short time the number of banks and the amount of notes issued, made the labor and expense of assort- ing the worn out notes for exchange so great a burden on the banks, that many requests were received at the Department for a change in the law by which the notes might be assorted and returned to the banks at their expense. This condition as to worn out notes, and the periodical accumulations of bank notes at money centers unavailable for bank reserves, continued until 1874, when the passage of National Bank Notes 57 the redemption act of June 20 immediately brougiit to the Treasury for redemption bank notes by the millions in all kinds of condition and from all sections of the country. The radical change in the method of redeeming bank notes was the creation of a central redemption point in place of eighteen redemption points. Pro- vision was made for the return of the redeemed notes to the banks of issue, and for the assessment of the expenses on the banks in proportion to the notes redeemed. When the redemption agency was established there had been 2,200 banks chartered, 2,000 of which, with circulation of $338,^38,743, were still in existence. At the end of 31 years, June 30, 1905, the charters numbered 7,814, and the existing banks 5,750, with circulation of $495,719,807. Between 1864 and 1874, under the original law, bank notes to the amount of $154,477,731 were returned to the Comptroller's office for renewal. The notes presented for redemption at the agency during 1875, the first year it was in operation, amounted to $155,520,880, of which sum only $15,213,500 was found fit for circulation. In redemp- tions of $209,038,855 during the second year, the fit notes were $97,478,700. This showed a marked improvement in the condition of the notes in circu- lation as a result of the more active redemptions. More than one-half of the notes received for redemption are from banks in New York City, and inclusive of the notes received from Boston, Phila- delphia, Chicago, and Saint Louis, they are more than 80 per cent of the total. 58 The Redemption of National Bank Notes The requests for United States currency, mostly of the denominations of one, two, and five dollars, in payment of notes sent for redemption, amount to about one-half of the redemptions. These small notes are furnished by the Treasury. Checks and credits in accounts constitute the balance of the payments. Before the redeemed notes can be delivered from the agency, it is necessary to assort them into groups of states arranged geographically, into groups of towns arranged alphabetically for each state group, and fmally bank by bank. ' The expenses of the agency for the fiscal year 1904, the last made up, were assessed on the banks at the rate of 84.72 cents per $1,000 of notes redeemed. This was 36.96 cents for transportation charges, and 47.76 cents for all other expenses. In thirty-one years the redemption agency has redeemed upward of four thousand millions of dollars in bank notes. The fact that it has satisfac- torily served its purpose appears to be established, and that it has been an important factor in main- taining the high standard of usefulness deservedly ascribed to the national bank note can not reason- ably be doubted. THOMAS E. ROGERS. _J LU < X o" 2 _j CO Z < I- REDEMPTION OF CURRENCY UNDER regulations prescribed by the Secretary of tile Treasury, tlie Treasurer of the United States, in Washington, and the Assistant Treasurers, in New York, Boston, Philadelphia, Baltimore, New Orleans, Cincinnati, Chicago, St. Louis, and San Francisco, redeem United States notes. Treasury notes, and gold certificates in gold coin, and silver certificates in silver dollars. The same officers also receive these paper issues, when worn, mutilated, or otherwise unfit for circulation, in exchange for new currency. in 1862, Congress passed an act which contains the following provision: " When any United States notes returned to the Treasury are so mutilated or otherwise injured as to be unfit for use, the Secretary of the Treasury is authorized to replace the same with others of the same character and amounts." It is the function of the redemption division of the. Treasury to perform the first act in the replace- ment with the new, namely, the displacement of the old. 60 Redemption of Currency When paper money in a condition of unfitness for further use is received at the subtreasuries, the notes are assorted by kinds and denominations and forwarded to the redemption division by express. Such remittances are also receivable from any other holder; and many banks, particularly those in the larger cities where there is no subtreasury, are regular correspondents of the division, sending in a daily consignment prepared with the most punctili- ous respect for the regulations. Others, in all parts of the country, accept the right of presentation, without taking any trouble about the amenities of the arrangement, and produce an occasional parcel which is an example of all that is slovenly and unsafe in the handling of money. The routine of the division is very simple. The sealed packages of notes are delivered singly to counters, who give their receipts, it is the duty of the counter to examine the package, open it, pass upon and count the contents, to put up the notes in straps properly marked, to witness their cancellation, and to deliver them to a teller, with a signed report of the result. On this report, the money is taken up as an asset of the Treasury, and an order is issued for a return remittance, or for credit on account, as the case may require. Every precaution is taken to protect the counter, and at the same time the counter is held to an absolute and undivided responsibility. At the close of business the day's work is on the teller's desk, and from there, after settlement, is passed over to the delivery clerk and locked up over night in a vault. Next morning the notes are Redempt ion of Currency 61 divided into lots and packages, which are numbered serially. The straps in each package are also dis- tinctively marked. The notes are then cut in two lengthwise, and the upper halves are delivered to the Register of the Treasury and the lower to the Secretary, in whose offices they are independently examined and counted. After the Treasurer's work has thus been doubly supervised, and any errors that may be found are agreed upon and adjusted, the notes are delivered to a committee whose duty it is to see that they are destroyed by maceration, and to file a certificate to that effect. On an average, more than half a million notes are handled each working day. In the last fiscal year, the redemptions amounted to over 1550,000,- 000, or about half the outstanding volume. Not the least important part of the work of the division comes in the shape of notes which have been partially destroyed. Fifty or sixty small remit- tances are received daily, many of them containing the remnants of a single note. The Government is unusually generous in this matter, redeeming frag- ments, however small, on satisfactory proof of the destruction of the missing portions ; and the cir- cumstances set forth in the affidavits, are as various as the possibility of accident. Burning, however, is the chief cause of loss ; and strange as it may appear, the good housewives who secrete their purses in the stove, on which they afterward forget- fully cook a meal, are the most numerous class of sufferers. Mext perhaps come those of both sexes, who, in the solemn language of the notary "threw said money into said fire," in the pay envelope or 62 Redemption of Currency with w:iste paper. Dogs are sliown by the records to liave a remarkable appetite for paper currency ; while mice have at times had attributed to them degrees of discrimination which the Department has been unable to recognize in these vermin. F. W. LANT7 COUNTING CASH IN TREASURY VAULTS PUBLIC DEPOSITS IN NATIONAL BANK DEPOSITARIES FROM August 6, 1846, the date of the approval of the Organic Act establishing the sub- treasury system, until 1864, the public moneys were deposited with the Treasurer of the United States in Washington and the several sub-treasury offices. At the beginning of the collection of internal revenue much difficulty was experienced in obtain- ing in a community a sufficient amount of currency to pay taxes. Congress, by Act approved June 3, 1864, relieved this situation by authorizing the Secre- tary of the Treasury to designate national banks as depositaries of public moneys and requiring one to be established in each collection district. Since that time the bulk of internal revenue amounting to thousands of millions of dollars has been deposited with national bank depositaries and transferred by the banks to the sub-treasury without expense to the Government. Many of the large tax payers 64 Public Deposits in kept their accounts with the banks which were depositaries. Collectors were permitted to accept such checks as the depositary banks were wiUing to receive as cash and issue certificates for at once, and the banks were enabled to use their exchange on sub-treasury cities in transferring to the Treasury without the necessity of shipping the actual money. The banks receive no compensation as deposi- taries for transacting the public business other than the use of the amount of public funds authorized to be held, which in the past has ranged in amount from ninety per cent to one hundred and ten per cent of the par value of the United States bonds held as security therefor according to the market value of the bonds. At present no bank may hold funds in excess of the par value of its security. At first the deposits were almost entirely on account of internal revenue, but later deposits were made with the banks located at places remote from a sub-treasury on account of sales of public lands, surveys of public lands, patent fees, semi-annual duty, and other miscellaneous deposits, as well as funds advanced to United States disbursing officers under authority contained in the Revised Statutes. The number of depositaries has been limited to the necessities of the public service, that is, banks were not designated simply upon request therefor, but when it was clearly shown that a sufficient amount of revenue was collected in the immediate vicinity of the place where the bank that applied for designation was located, to warrent the Depart- ment in establishing a depositary, thereby saving the expense of transportation by express to the National Bank Depositaries 65 nearest depositary and avoiding risi< and responsi- bility of the collector in caring for the funds. In 1887 when there was a surplus of revenue accumulated in the Treasury, the department per- mitted more public funds to be held by the banks than had previously been held, thereby increasing the loaning power of the banks and relieving the stringency in the money market ; in this way the public balance was increased to $^2,000,000. As the accumulation continued it was decided not to ■confine the deposits to regular depositaries already established but to allow any national bank regard- less of its location or whether there was any revenue collected in its vicinity to become a special or tem- porary depositary to the amount of the security fur- nished. These temporary depositaries were per- mitted to receive only funds transferred to them by the Treasurer of the United States to hold tempor- arily; they were first designated in i8q8 and con- tinued until December 19, 1903, when the holdings of public moneys reached the largest amount ever held by the banks, namely $168,286,716.52. From that time there was no surplus, the disbursements being greater than the receipts, and it became nec- essary to withdraw a portion thereof to make the large first payments on account of the Isthmian Canal and other large disbursements, of which due and timely notice was given each bank. With- drawals have been made since then as follows: Under call of March 4, 1904,128,067,560; April 30, 1904, $11,967,981.77; May 14, 1904, $9,336,925.- 87; November 21, 1004, $22,488,300; April 7, 1905, $28,828,500; total, $100,689,267.64. [6] 66 Public Deposits in National Bank Depositaries The amount of holdings on August i, 1905, was to credit of Treasurer United States, $57,042,009.54 and to credit of United States disbursing officers, $8,673,109.78; total, $6^,715,119.32. The amount of holdings of public funds by the banks has varied from $6,919,745.59 in 1871 to $168,286,716.52 in 1903. On August I, 1Q05, there were 547 specials, 286 regulars, and 2 regulars for disbursing officers only, a total of 835. The department accepts as security for public deposits only United States bonds, except occasion- ally for special reasons and for temporary purposes other securities have been received, such as State and municipal bonds. About $20,000,000 of such bonds v^ere accepted on a basis of seventy-tlve per cent in substitution for United States bonds on con- dition that the latter were used to take out addit- ional circulation, and held for a year or so, but they have all been withdrawn and other bonds substi- tuted therefor. The department now accepts only United States bonds. District of Columbia bonds, Philippine bonds and certificates, and Hawaiian bonds, the last named are received on a basis of ninety per cent. National bank depositaries have been and are valuable auxiliaries to the sub-treasury system. E. B. DASKAM. H o U_I uu o THE SECRET SERVICE IF it be true— and our statistics would seem to indicate that it is true— that there are fewer counterfeits in circulation today than at any time during the last forty years, a large share of the credit for this satisfactory state of affairs belongs to the bank tellers of the United States. It is a pleasure for me to subscribe to this statement. As a matter of fact we have come to regard the bank tellers as the eyes of the service ; and of recent years no counterfeiter has proved himself sufficiently expert to produce a note which could successfully pass the inspection of the lynx-eyed gentlemen who perform their functions so modestly in thousands of our financial institutions. The public does not appreciate this, and our service receives much undeserved commendation for the discovery of dangerous counterfeits, when, as a matter of fact, the detection of new counterfeits forms no part of our functions. We have neither the opportunity, nor facilities for the inspection of our circulating 68 The Secret Service medium necessary to enable us to discover any new products of the criminal engravers' art. The chief function of the secret service division is not the detection of counterfeits, but the detection and prosecution of the makers of counterfeits, an entirely different proposition. It is only within recent years that there has been the right sort of co-operation between the banks and the secret service division of the Treasury Department. That section of the federal statutes which requires that officers of the national bank shall brand as "bad" or .'" worthless" all counterfeits which may come into their possession, was more honored in the breach than in the observance. Thus, through a ground- less fear that the ire of a depositor might be aroused and his account lost, counterfeits were returned unbranded and given a new lease of life by the very men who should be most concerned in their suppres- sion. It was the Detroit Clearing House Associa- tion which paved the way for harmonious and consistent local action on the part of the banks, and it is a matter of record that most of the clearing house associations have incorporated as a part of their rules and regulations that very important para- graph of the federal statutes. The bankers now realize that their interests and ours are one, that we are both striving to preserve the integrity of our circulating medium, and that friendly and complete co-operation with our service is essential to the speedy punishment of offenders. Counterfeiting methods have changed and im- proved during recent years. The introduction of photo-mechanical processes has made it possible to The Secret Service 69 closely approximate the beautiful line engraving which is characteristic of our currency. And the adoption of these methods has materially increased the difficulties of fixing the responsibility for a particular note. A quarter of a century ago, when the most deceptive coimterfeits were produced by graving tools in the hands of experts, there was an individuality about the work which would enable an experienced officer to say with a fair degree of certainty that a particular note was engraved by a particular individual. With the perfection of pro- cesses in which the camera was used to transfer the pattern of a note to steel or copper the sign manual of the maker disappeared. The camera has no indi- viduality, and the application of an etching fluid to a plate required only the skill which is possessed by thousands of engravers scattered all over the United States. This change of method in counterfeiting enormously increased the difficulties confronting the agents of this service in their endeavor to detect and prosecute skillful offenders against the counterfeiting laws. And it is a high tribute to the agents of this branch of the government service that counterfeiting as an industry is on the decline. During the last fiscal year there were but nine new counterfeit notes placed in circulation, only two of which could be classed as dangerous. Carefully tabulated returns from banks from all over the United States indicated that the proportion of counterfeits in circulation is less than one dollar in one hundred thousand dollars in notes,, and two and a half dollars in one hundred thousand dollars in coin. As a matter of fact more trouble is experi- 70 The Secret Service enced just at present with ''raised" notes than with counterfeits, and this trouble will undoubtedly be continued until the public has been educated to recog- nize the value of a note by its design, rather than by the denominational figures. When a community reaches the point where it knows that a "spread eagle" in the center of a silver certificate means one dollar, irrespective of the figures or lettering on a bill, the note raiser will find his occupation gone. JOHN E. WILKIE. Washington, City and Capital aUDDD LJIJDCD „_ w^, MOULl^iL Li Ig^ ^,, .c:caD^GDau UD«-Duraui^» j,aaaaaa.'cu pdi»uo uuctzxL ocr^ ^»:^y -(^v -C t'occcig; c ,^. CFCCCC •■(It yr. ADDDCCr.i'lC l».C Di\)DCCF£CP.'lC dcdS P □ CCC QDD, CD tZC C DDDC 4 c- aaoDocn to to o < O o < o t u X o < =0 to o I— o z: < o >- U LU H Ll_ o UJ > THE NATIONAL CAPITAL THE National Capital was founded by George Washington, who planned "the Federal City" which Congress named for him. Last of his great deeds, this interested him more than any other after the winning of the Revolution and the making of the Constitution. Like the Constitution itself, its creation was closely related to the finances of the infant republic. The very idea of a federal district absolutely under national control for a national capital was suggested by the attempt of the unpaid soldiers of the war of the Revolution to collect arrears in 1783, by an attack with arms which frightened Congress out of Philadelphia. The Federal District was placed on the Potomac as the price to the South of the assimiption by the Nation of the state debts of the Revolution as desired 74 The National Capital by the North, under the famous agreement between Thomas Jefferson and Alexander Hamilton. Robert Morris, the financier of the Revolution, linked by his personal speculations in the real estate of the new capital, the eighteenth century with the nineteenth, as Jay Cooke, the financier of the Civil War, whose brother was the first Governor of the District of Columbia, linked the nineteenth century with the twentieth. The Federal Treasury, with its connec- tion first with United States banks and later with the sub-treasuries and the national banks, has been the center of the financial interests of the country. The young national government was penniless when George Washington established the National Capital. He had to beg personnally from the nine- teen original proprietors of the farms upon which "the Federal City" now stands, the land needed by the national government for its buildings and for streets and parks, and he had to sell some of this land and to borrow money from Maryland and Virginia, the mother states which had ceded the sovereignty of the ten miles square, to build the President's House, Congress House, and the other government buildings. The far-seeing Washington planned the city on a grand scale, according to his faith in the perpetuity and development of the United States, then so small, so poor, that the men who doubted whether the new government could long survive found many to laugh with them at the plans which the experts cannot now improve upon and which record Washington's genius as books can- not do. The first great expansionist, the only great American who had been west of the Alleghanies, The National Capital 75 the man of greatest vision in his time, and with the most confidence in the vitality of the young republic, he planned a national capital for the greatest country in the world. Washington died in 1799 without seeing the national government moved from Philadelphia to Washington, where it came, under President John Adams, the next year. The death of its founder prevented the national government from beginning, as soon as its increasing income justified the expendi- ture, the development of the National Capital, on the plans which he had laid down. By the time the United States could no longer plead poverty it had settled in a habit of neglecting its capital, and had thereby encouraged an agitation for the removal of the capital to the Mississippi Valley, which never ceased until after the Civil War, and, which in turn, prevented proper treatment of Washington. Indeed, for seventy-eight years, beyond building structures for its own use, improving their grounds, and build- an aqeduct primarily to supply them with water, the national government did practically nothing for the National Capital. The people who lived here had to bear all the rest of the expense of the making and maintenance of the National Capital. At times they went deeply in debt in the undertaking. The burden became so heavy by 1846 that Alexandria, George Washington's market-town, procured the retroces- sion of the territory Virginia had given south of the Potomac. The task of the nation was too great for the people of the District of Columbia. The Civil War, which made Washington as the seat of government and a prize of the strife at once far 76 The National Capital better known nnd far more precious to the victorious Union, ended all serious talk of removing the capital and brought the national government to realize its obligation. President Grant and a congress of like politics gave power to a new government of the District, with Alexander R. Shepherd, a native Washington- ian of talent and force, as its ruling spirit. In 1871 it took up the dust-covered plans of George Wash- ington, and began the general improvement of the streets and avenues of Washington City. The time was short and the work was done hastily and roughly, (the city was only plowed up,) but so thoroughly that it was easier to complete it than to undo it, and all the subsequent development has come from it. The protest of the District tax-payers, still expected to pay for such improvements and griev- ously overburdened, the panic of 1873, and a change in the political control in Congress, ended the "Shepherd regime," with its territorial form of government and its two Governors, Henry D. Cooke and Alexander R. Shepherd. This was the first executive government for the entire federal District. The cities of Washington, Georgetown, and Alexandria had had separate municipal govern- ments, with Mayors and Councils elected by quali- fied voters, while the counties of Washington and Alexandria had county governments. From 1874 until 1878 Congress was considering a permanent form of government, meanwhile con- fiding the administration to a temporary Commis- sion of three. Congress in the exercise of its con- The National Capital 77 stitutional power "of exclusive legislation " over the District of Columbia had to provide an execu- tive government; it had to provide for a just recog- nition of the duty of the National Government to its Capital, and of its obligation as the owner by gift of more than a half of the city of Washington. it determined that there should be an executive gov- ernment of three Commissioners, two appointed by the President of the United States from residents of the District, and the third an army engineer of high rank, and that the United States should pay annually one-half of the municipal expenses and should assume one-half of the bonded debt incurred by the territorial government. It made no provision for the Nation's arrears estimated at seventy-five millions. The property holders generally wished to relinquish the suffrage exercised until 1874, and Congress, appreciating their reasons and also regarding it as incompatible with the new tlnancial arrangements, since the United States could not submit to be taxed by District voters, abolished the privilege of voting, in June, 1878, the act which the United States Supreme Court terms "the Constitution of the Dis- trict of Columbia," was passed, and since then the entire District has been under the executive govern- ment of the Commissioners, which is actually a government by public opinion, as there is no partisan politics, no "boss," or "machine," or partisan news- paper, to confuse or defeat the voice of the people. Although there is general hope that som.e day Sena- tor Hoar's proposition to have the National Govern- ment bear all the expenses of the National Capital over and beyond what the District residents contri- 78 The National Capital bote under reasonable average taxation, the "half- and-half plan " is so ^reat an improvement on the conditions preceding it, that it has been generally acceptable both in Congress and in the District. Modern Washington and its suburban towns have practically developed under the present form of government. The progress made in twenty- five years is the sure prophecy of the progress to be made in the future. The National Capital, now that it has been fully taken into the life of the nation, must grow with its growth— as the country deserves. The population of the District, number- ing over three-hundred-twenty thousand, with a tax levy of about tlve-and-a-half million (under a dollar- and-a-half-a-thousand rate and a two-thirds assess- ment,) is doing its full share for the present and for the future. As it increases and spreads all over the hills of the District, until the city of Washington extends to the District line, it will do its part in making this more and more the most beautiful capital in the world. HENRY B. F. MACFARLAND < uj O o H a. < U NATIONAL POLITICS AND INTER- NATIONAL DIPLOMACY WASHINGTON is pre-eminently the political center of the United States. Every con- test which is waged in Congressional district or State legislature reaches its climax in the national capital, where, under the great white dome of the stately Capitol, the men who have been suc- cessful in their campaigns before the people assemble to enact the national laws. Most important of all, the quadrennial election for President determines who shall reside in the White House in Washington. In the halls of Congress occur the famous debates which outline the political issues of the leading parties. Within the White House occur the confer- 80 National Politics and ences which affect the political situation in the remotest corners of the Republic. It is difficult to write of the position of Wash- ington as the political center without indulging in apparent exaggeration, it literally breathes an atmosphere of politics. Its population, representing every State, is largely composed of politicians of greater or less degree, who observe the political barometer with the interest and anxiety attending financial quotations in the commercial cities. It is in Washington that the political leaders manoeuver for position in the months that precede a national campaign. It is from Washington that tons upon tons of literature concerning political issues are shipped to the voters throughout the land. One recalls, for instance, how the attempt to educate the country into the belief that the free coinage of silver was a panacea for every material ill was directed from Washington, while in the periods of tariff discussion the utterances of the polical leaders in Washington are heralded broadcast. In Washington the political heart of the nation throbs with intense eagerness. There was a time, happily long past, when the material interests of Washington were largely dependent upon the turn of political fortune — when, on the eve of a Presidential election, the fate of thousands of federal employees trembled in the balance. In those days a change in administration meant a clean sweep in the government departments. There was little permanency in the great mass of the population. With the stability which a carefully administered civil service law insured, the injurious International Diplomacy 81 effect of political change is no longer felt. In the olden days, the fact that Washington was the politi- cal center of the nation was a detriment to the city's progress. To-day, Washington develops in mag- nificent proportions, well knowing that no matter which party is in power, there can be no wholesale uncertainty or upheaval. Under these conditions, there is a steady rise in real estate values, a constant growth of mercantile interests, a gratifying increase in individual bank deposits. In other words, Wash- ington now enjoys all the benefits of its political importance without any of the drawbacks formerly experienced, a fact which it is worth while to emphasize in a publication intended to present the phases of Washington life to the leading financiers of the country. The conditions which make Washington the political center naturally operate to make it promi- nent in the diplomatic world. It is the abiding place of the ambassadors and ministers from foreign countries and it is here that the grave questions of international law, comity, and usage are decided. It is the city wherein treaties are made and ratified; it is the place where the policy of this government respecting other nations is formulated and then communicated to the world. Its importance in this regard has vastly increased since the war with Spain, being especially notable in the effort inaugu- rated by the United States Government to preserve the integrity of China. The forcefulness of President Roosevelt's character, assisted by the astuteness of the late Secretary of State, has given unwonted energy to our foreign policy, culminating in the [7) 82 National Politics and International Diplomacy splendid episode which marked the agreement of peace between japan and Russia. There have been man\' diplomatic events of noteworthy interest in Washington, but these pale into insignificance beside the remarkable achievement of President Roosevelt. With characteristic courage, he grasped a delicate and difficult situation and by the exercise of rare diplomacy, succeeded in securing the desired culmi- nation. This individual act has inestimably raised the importance of Washington from a diplomatic point of view. The city is no longer an insular capital, it is a factor in the determination of world problems. Every citizen of Washington has always had occasion to feel proud of his residence here, but in the future this pride can well be experienced in even greater degree. The city is a capital among capitals, not only in a political sense but in the wider and broader field of participation in inter- national affairs. HENRY LITCHFIELD WEST. ^ ^■'' €f WASHINGTON DURING WAR TIME HISTORIC WASHINGTON THE history of a nation's capital is the history of the nation. It is at the seat of government that learned men versed in statecraft meet, and there national politics and policies are deter- mined, and there laws are made, construed, and executed. For one hundred and five years Washington has been the arena in which political parties have risen, have fought and have fallen. The tlrst year it became the Capital, the Demo- cratic party triumphed, and the Federal party passed from power, never to be restored. It was in Washington that Chief Justice Marshall made an epoch in history by establishing the principles of American jurisprudence, and as a tribute to his memory, a street fronting the court house bears his name, and a statue in his honor is at the foot of the Capitol. The Louisiana Purchase in 1803, one of the most important events in the Nation's history, was conceived at the White House by Jefferson. 84 Historic Washington The successful war against the Barbary States was declared at Washington, and the house built by Stephen Decatur, "Hero of Tripoli," and in which he lived, still stands. The admission of Ohio to the Union added a new star to the Country's tlag, which has been followed by a galaxy representing peerless States in an indestructible Union. The embargo and non-intercourse acts, to com- pel recognition of American neutrality, the War of 1812, the capture and burning of Washington by the British— disgraceful alike to both participants, the Treaty of Ghent, were events in the second decade of the Nation's Capital. Monroe announced from Washington that "American continents were not to be considered as subjects for colonization by European powers. ' Here Calhoun boldly proclaimed nullitkation, and Andrew Jackson replied by ordering troops and a man-of-war to Charleston to enforce the law. It was in the old Capitol that Webster and Ha>ne met in fierce debate and Henry Cla>' by a compromise postponed civil war for thirty years. Here the Webster-Ashburton treaty was con- cluded, and later the treaty of Wasiiington. The first telegraph line was built by Morse between Washington and Baltimore, and over it flashed the words "What hath God wrought?" The Oregon Boundary dispute was settled in Washington. Here the Mexican War was planned. To our credit slavery was abolished in the Dis- trict of Columbia eleven years before the Civil War. Historic Washington 85 Intercourse was established between the United States and Japan in 18^4, and the wonderful collec- tions of rare objects brought by the Wilkes Expedi- tion are in the "National Museum. The controversy as to whether the people should decide for themselves that a state should be free or slave-holding was started by the Douglas-Kansas- Nebraska Bill. Chief Justice Taney rendered the opinion that "Negroes were not citizens of the United States and they could not become such by any process known to the Constitution," a decision that had much to do with the election of Lincoln. In the great Civil War, the campaigns for the Union were planned and directed from Washington, and the part that the troops from the District of Columbia performed before the arrival of the forces from the North still remains unrecognized. Few know that when Jubal Early was pounding at the outposts of surprised Washington, President Lincoln stood on the parapet at Fort Stevens, exposed to the fire of the enemy, thus encouraging the Union soldiers to deeds of valor. It was up Pennsylvania Avenue at the close of the war that the victorious armies of the North triumphantly marched. Over this same avenue have passed many inaugural and other processions, as well as the funerals of our three martyred Presidents. It was on this avenue that Admiral Dewey was escorted by President McKinley, and at the Capitol was presented with a sword, the gift of a grateful Nation. 86 Historic Washington It was in the White House and Capitol that exercises celebrating the One Hundredth anniver- sary of the establishment of the permanent seat of government were held, and in the White House President Roosevelt planned the peace conference between Russia and Japan. The active participants in these and other events equally important, have been our neighbors and friends, and \et the official history of the District of Columbia remains unwritten. Appreciating the desirability of such a work, the Washington Board of Trade has organized a movement and appropriated funds to assist in pre- paring such a history. Much labor has been saved the historian by the Columbia Historical Society, and through the splen- did work of the late Dr. J. M. Toner, Dr. S. C. Busey, Ainsworth R. Spofford, W. B. Bryan, John B. Larner, Allen C. Clark, Gaillard Hunt, Arthur J. Parsons, Dr. Marcus Benjamin, and other writers, also by William P. Van Wickle and his committee of public spirited citizens, who have placed tempo- rary markers on many forgotten historic buildings and sites that have given pleasure to thousands of Americans visiting their Capital. These markers should be made permanent and of bronze, for " The City that now bears the founder's name will be the Capital of the Universal Republic." w. V. cox. o < D O < z LU > LU o o Q LTi LU Qi Q- H < O 3 o z: LU Q_ LU ■X. WASHINGTON AS A POLITICAL AND SOCIAL CENTER SOME years ago an American Minister in Berlin, being asked by Prince Bismark whether the advisability of pkicing the capital of the United States in New York had ever been considered, answered, No, that the fathers of the Republic had placed the capital where it is, because they did not desire it to become a great business center. Now, of this reply, it must be said, as was said of a certain rule in Hebrew grammar, " Precisely the reverse is the state of the case." One reason why the banks of the Potomac were selected for the capital was that the situation offered great commercial probabilities. When the federal district was laid out it was made to include two thriving commercial towns, George- town in Maryland and Alexandria in Virginia. Past them the river flowed, and there was a water high- way to the Chesapeake and the sea, and the whole outside world lay beyond. Following the river to its source, it went nearly to Ohio, and with short / Washington as a Political portages tapped an unknown inside world — the West with its incalculable trade possibilities. The whole channel of commercial thought was a channel in the water. A stage coach carried only ten people when it was crowded, and its capacities for freight were insignificant; but there was hardly a limit to the amount of freight which large boats could carry. That city was destined to commercial greatness, our forefathers thought, which had advantages of water communication, and such advantages the capital had to an unusual degree. But with the coming of the throttle and the rail departed the hope of the fathers that the capital would be a great business center ; and undisturbed by the distractions of commercial life, it was left free to fulfill its real destiny. It was the political center of the new world from that hour on Saturday, November i, 1800, when John Adams, President of the United States, drove into it and took possession of the White House, and it became the social center two weeks later, when Mrs. Adams arrived ; for, although one may ordinarily separate social life from political life, to the head of the state attaches a general primacy, and his wife is a more important woman than any other man's wife. Although it was the political and social center from the beginning, few people took kindly to the budding town. The government had been sitting in Philadelphia, which was the most populous and the most luxurious city in America ; before that it had met in New York, which was an agreeable place with beautiful environs. Although nobody con- AND Social Center 89 tended that Mew York would ever be as fine a city as Philadelphia, it was a paradise compared with the new federal city, which was at first an abominable place to live in— a place where the hand of man had destroyed the beauties of nature and as yet erected nothing beautiful in their place. There was another difficulty with which the new city had to contend. It was by no means generally accepted as a final decision that the capital would remain on the banks of the Potomac. The power that made it could break it, and some day when the South might be in a minority Congress might pass a law selecting a new site for a capital at some more Northern point. Probably this very thing would have happened had it not been that a Virginia dynasty, which was, of course, unalterably opposed to moving the capital, held the supreme power for the first twenty-four years of the city's existence— from the coming in of Jefferson in 1801 to the going out of Monroe in 1825. But the public men were obliged to live here, whether they liked it or not, and they made up its life. There were some people here before they came busy, making ready for them, and after they came there grew up around them a community which ministered to their wants, and all of them made merry together. From these remarks it may be inferred that the social side of Washington has always been appur- tenant to the political side. Such was the fact absolutely; such is now the fact qualifiedly. More and more each year, with a force that acquires strength as it goes, the city is becoming a resort for people who merely wish for a pleasant place to live 90 Washington as a Political and Social Center in, and fmd Washington the most pleasant of American cities, and they constitute a circle apart from the political circle. They began to come soon after that marvelous change took place about a generation ago, when Washington ceased to be an ugly town with a problematical future, and suddenly appeared before the world as the most beautiful of capitals; then men of leisure, elegant and otherwise, came among us. Here, then, is the city: First, the President of the United States— first everywhere; second, the permanent high officials of the government who live here all the year around and are therefore Washingtonians; third, the passing throng of poli- ticians and statesmen who never become domesti- cated, who live in hotels or boarding houses, who come only when they must and leave as soon as they can; fourth, the people of the city who live here forever and toil and spin; and finally, the rich builders of palaces who neither toil nor spin and wear Solomon's robes. GAILLARD HUNT. - //- 9900 o [- o z X in < o >- < en y I Q- UJ o < WASHINGTON AS AN EDUCATIONAL CENTER THE Capital of every nation should be the great center from which should flow to all sections the knowledge brought together at govern- mental expense for the benefit and enlightment of all the people. So Washington, viewed from the stand point of higher education, should be the seat of learning of America. Our first President, the founder of the city of Washington, undoubtedly cherished this idea, as his speeches, letters, and messages aie full of the subject of a National University in the Capital City. In his last will and testament he provided that $25,000 from his estate should be set aside and used, "towards the endowment of a University, to be established in the District of Columbia under the auspices of the General Government." Congress has never taken up seriously the sub- ject of a National University, and it is believed that the idea of Washington will never be adopted by 92 Washington as an the Government. If a National University be estab- lished it must be through private sources. This subject is now freshly before the nation, and the work of The George Washington Memorial Associa- tion may, in the near future, be crowned with that success which it so richly deserves. Notwithstanding the fact that Congress has not taken up the subject in the manner proposed by Washington, that body has constantly recognized and materially aided in upbuilding the educational system of the Capital. Today it may truthfully be said that in every line of study may be found here the highest authority, and the greatest amount of data, all at the service of the student. The student, therefore, who desires an educa- tion on the most liberal and complete basis must recognize the great advantages of the city of Wash- ington, not only for his rudimentary and academic education, but especially for his post-graduate work. The early education of a man or woman should be with the future or life work in view. Whether such work is intended to be along the line of politics, law, medicine, or any branch of science, with rare exception, at Washington is to be found the greatest advantages for research, and especially for original research. Here the greatest men of the nation are to be found and not a few of them are connected as teachers and professors with our schools, colleges, and universities. These schools, colleges, and universities are of a high order and compare favor- ably with those located elsewhere having the advantages of munificent endowments. The ad- vantages of the Capital greatly overbalance, so far Educational Center 93 as the student is concerned, the large endowments which are each year being given to the universities of the north and west. The various Departments of the United States Government, in which are employed large numbers of high class scientific men who devote their time to the study of their specialties, would seem, of itself, to demonstrate clearly that the center of scientific education, at least, is here in the city of Wash- ington. "No student of any subject is denied the benefit of the great scientific libraries owned by the Government — on the contrary every effort is made to encourage and stimulate such work. The great mass of information annually collected is at the service of the student and no where else can such advantages be obtained. The ability and success of men who have held important positions in the Government service and who have taken advantage of the technical knowl- edge surrounding them, is being constantly recog- nized, and such men as Knox, Cannon, Lacey, Eckels, Vanderlip, and Dawes have been called from Washington to occupy important positions with great financial institutions elsewhere. In the Universities of Washington, among which may be mentioned, The Georgetown Univer- sity and The George Washington University, are to be found students from every state and territory as well as from other nationalities pursuing with great enthusiasm graduate and post-graduate studies. Graduates will be found occupying positions of honor and trust everywhere in the professional, financial, and commercial circles. These universities 94 Washington as an Educational Center are known and respected for the high class of work being done in all departments, and deserve recogni- tion from patriotic citizens interested in the welfare of our great Capital. The public schools, managed by a Board of Education selected from the best and most respected citizens of the city, are of the highest order and doing the very best work possible in the common school system, in these schools there are over fifty thousand students and upwards of thirteen hundred teachers. In addition to the eduational institutions above referred to there are other universities, colleges, seminaries and private schools of all grades through- out the District of Columbia drawing, especially in the schools for young women, students in large numbers from all parts of the United States. The growth of all these schools during the past ten years has been phenomenal, and is a strong indication of the public opinion prevailing outside of the National Capital of the advantages of Washington as a Center of Education. JOHN B. LARNER. I- < z: < uJ U < O H Q UJ H o > =3 _j U o o u LXJ 11 WASHINGTON AS A LITERARY AND SCIENTIFIC CENTER GREAT libraries attract great students, and so the Library of Congress with its vast collection of books, numbering nearly a million and a half of volumes, is the library in the United States at which scholars speci- ally congregate to consult its numerous treasures. Largely among such students are naturally those who are devoted to the production of works requir- ing research into history and during the summer months and other vacation periods there are many persons who make Washington their home in order to prosecute their studies. The later historical works of Edward Eggleston received their finishing touches from the hands of their lamented author during a winter spent in our midst. Similarly the valuable contributions to the history of our country by John Spencer Basset have been prepared by him during vacation periods spent in Washington, ' ' The 96 Washington as a Literary Northwest under Three Flags" by Charles Moore is likewise typical of the kind of work that has received its highest development under the fostering influences of the Library of Congress. George Bancroft, perhaps the most eminent of all American historians, spent the last years of his long life in our city. "Through One Administration" by Mrs. Bur- nett, and "Senator North" by Miss Gertrude Ather- ton may be cited as examples of the works of tlction that have been published as descriptive of the politi- cal life of the Nation's Capital. The romances of Mrs. E. D. E. N. Southworth were mostly written in the well known cottage which was for so many years her home and where she died. Thomas Nelson Page, whose tine touch reveals itself in such masterly prose, makes Wash- ington his home, and Miss Charlotte B. Taylor is fast winning laurels among the younger set of writers. Mrs. Crowninshield's "The Archbishop and the Lady" and "Valencia's Garden," Miss Seawell's "A Virginia Cavalier," Frederic Emery's "A Maryland Manor" and Professor Newcomb's "His Wisdom, the Defender" should be mentioned as representative fiction of recent years. Poets are not common, but Francis Scott Key, John Henry Boner, and our much loved John Hay and his gifted daughter, Helen Hay Whitney, were residents of this city, and it would not be easy to fmd their equal anywhere. Distinguished offi- cials have always found time to contribute to literature, and memoirs such as James G. Blaine's "Twenty Years in Congress," S. S. Cox's "Three Decades of Federal Legislation," John Sherman's AND Scientific Center 97 "Recollections of Forty Years in House, Senate and Cabinet," and Simon Newcomb's "Reminis- cences of an Astronomer" may be mentioned. General Greely's "Three Years of Arctic Service," John W. Foster's "Century of American Diplom- acy," and Admiral Evans's "A Sailor's Log" should be referred to as worthy examples of a class of literature that is largely on the increase. Great works of reference requiring the best of literary ability for their perfection are now seldom made without the aid of many of the specialists who live in Washington. Dictionaries, such as the Cen- tury, the Standard, the International, and the New Worcester; cyclopaedias, such as the Universal, the International, and the Americana, and year books, such as Appleton's Annual and the International Year Book include among their most valued con- tributors such well known writers as Egan, Gill, Howard, McGee, and True. Able newspaper writers like Carpenter and Curtis, whose homes are in our midst, have collected their extensive experiences into volumes that have been published to their credit. Mary Clemmer Ames, author of "Ten Years in Washington," Grace Greenwood, and Kate Field were famous corres- pondents whose memories still linger among us. The dividing line between literature and science is easily crossed. For the development of mathematics and its applications, especially geodesy, review the publi- cations of the Coast Survey and the results achieved by Bache, Peirce, Hilgard, Mendenhall, and Wood- ward will at once demonstrate that these students [8] 98 Washington as a Literary were foremost among their contemporaries. The newer Bureau of Standards, under the able guidance of Stratton, is revealing to the world the possibilities of metrology. The splendid discovery of the moons of Mars by Asaph Hall while he was connected with the Naval Observatory, and the contributions to the science of Astronomy by Gilliss, Eastman, Newcomb, and Harkness are sufficient to indicate that the labors of the star-gazers have not been in vain. The many scientific bureaus of the various departments have also contributed extensively to the practical development of science for our modern daily wants, and especially has this been the case with the Department of Agriculture. More eloquent perhaps than a detailed description of the different bureaus is their simple enumeration. They are: Animal Industry, Plant Industry, Forestry, Chem- istry, Soils, Entomology, and the Biological Survey. See what they reveal. Animal Industry includes the study of the diseases of animals, their treatment, and their prevention, as well as the beneficent infiuence of pure milk. Plant Industry involves the study of plants and plant products in all its ramifications from seeds and fibres to new fruits and vegetables. Forestry means the saving of our timbered regions and the consequent staying of storms. Chemistry stands for pure foods and pure drugs — in other words, health and life. Soils means that the best methods available to science are pursued in order to learn and then to teach what soils will yield most abundantly. Entomology preserves life, both human and plant, from the ravages and poisons of insects. AND Scientific Center 99 Lastly, the Biological Survey gives us a practical knowledge of the life histories of animals. Great institutions like the Smithsonian and the Carnegie have exercised a beneficent intluence on the development of science. From the Smith- sonian has come the inspirations that have led to the Weather Bureau, the Geological Survey, the Fish Commission, the National Museum, and the Bureau of American Ethnology. In Meteorology the v^ork of Coffin, Ferrell, and Abbe are classic. The great Geological Surveys administered by Hay- den, Wheeler, King, Powell, and Walcott are evi- dences of the splendid work done in that direction. In the publications of these surveys are the marvel- ous paleontological studies of Cope, Marsh, New- berry, Ward, and others. The Fish Commission conserves the edible products of sea, lake, and rivers for our benefit. The National Museum is the great store house of treasures of all kinds that are dis- played for the benefit of the Nation. In Ethnology we have the valuable aboriginal studies by Mason on basketry, by Holmes on pottery, and by Gushing and Hough on folk lore. In the increase and diffusion of literature and scientific knowledge the city of Washington stands pre-eminent in the United States. MARCUS BENJAMIN. H FRONT OF T it WASHINGTON AS A FINE ART CENTER THE time is approaching when Washington will be an important, if not the most important, center in the United States of the fine arts, architecture, painting, sculpture, and music. Architecture, which includes buildings and land- scape, was carefully considered in the original plan of the City, and in the selections of sites and designs for Federal buildings. Presidents Washington, Jefferson, and Madison personally interested themselves in securing artistic expression and the most skilled men in their professions without reference to political or personal preference, to design the landscape and buildings. A dark period in Federal art began about 1850, and continued without a ray of light for nearly fifty years. This depreciation was due to lack of interest shown by the presidents of that period and to congressional legislation, which ignored the noble plan left to them by the father of the Republic. The Centennial Committee at the one hundredth anni- ■.its '., ■">. '^%^i4 1 J SOUTH FRONT OF THE WHITE HOUSE, 1905 102 Washington as a versary of the estnhlishment of the seat of govern- ment in the City brought forcibly to the attention of the country the Uici< and the neeci of a systematic art development in the Capital. Senator McMillan appreciated the unfortunate growth of the city with discord, not harmony, between its related parts, and without a general artistic composition. Acting upon a suggestion of the American Insti- tute of Architects, he, by a resolution of the Senate, appointed a Park Commission to report on the future artistic development of Washington. Their report received the unqualified endorsement of cultivated people in Europe and America. The Commission presented a scheme including the salient features of the plan of L'tinfant and Washington, and a develop- ment of new portions of the city in harmony with the original scheme. The following structures are already being erected in conformity with that report. The Union Railway Station, the National Museum, the building of the Department of Agriculture, the office buildings for the Senate and House of Repre- sentatives, the Municipal Building, the home of the Daughters of the American Revolution, and George Washington University Buildings. The continued development of the city on the lines suggested, will make Washington the most attractive city in the world from an artistic standpoint. Its buildings, parks and statuary will form an art composition in which the various parts will be in harmony, a place of residence worthy of, and attractive to, all who have artistic perception. The Federal Government should be the principal agent for disseminating the retining and educative o TO O c a 1— > O m ?o m > m a CO > n O O M Fine Art Center 103 influence of art among the people, through the character of work authorized in its buildings, parks, statuary, and paintings. This end will be most effectually accomplished by the various national art associations locating their principal offices in Wash- ington, where their influence for good will be most effective. In 1900 the American Institute of Architects established its permanent headquarters in Wash- ington, and through its endeavors much has been accomplished for the good of national art. The Tarsney Act, under which the Government has secured the services of many of the most capable architects of the country in design, construction, and execution, and under which many Federal buildings are being erected, was made a law by the efforts of the Institute. This society had much to do with securing the appointment of a Park Commission to report on the development of Washington City; with the assistance of those interested in art, pre- vented the remodeling of the White House and extension of the Capitol on lines which would have destroyed their beauty; and preserved the Mall, by demonstrating that an improper location of the building of the Department of Agriculture would destroy the future artistic development of the city. Under the Incorporation Act of March 3, iQo'7, the American Academy in Rome located its principal office in Washington. The American Academy in Rome is a postgraduate school which will select by competition, each year, the most capable applicants in architecture, sculpture, painting, and music, and send them to Rome. From the talented young men 104 Washington as a who secure these prizes, the Government may secure artists capable of executinu' future work of tiie highest character. The Public Art League is a national association organized in Washington to secure an Art Commiss- ion, who will have authority over art interests of the Government. The work of this society has to a certain extent been accomplished in the ruling by President Roosevelt, that "no buildings shall be erected in the future by any of the Executive Depart- ments without consulting with the Park Commission as to their location and design." There are several active local organizations, such as the Washington Society of Artists, the Washington Water Color Society, the Washington Architectural Club, which hold interesting and educative yearly exhibitions. The Washington Chapter of the American Insti- tute of Architects has taken an active interest in the artistic development of the city, and is frequently consulted by the local authorities. During the past year two local societies have been organized with very nearly the same object in view; one named the National Society of Fine Arts, the other the Society for the Artistic Development of Washington; these societies will begin actual work during the coming winter. What is needed for a continued development is a legalized Commis- sion or Bureau of Fine Arts, centralizing all branches of fme arts, under capable heads. By law the Smithsonian Institution is the cus- todian of art material belonging to the Government. They have never developed this branch of the work, Fine Art Center 105 but when the new National Museum building has been completed the management of the Institution propose to take active steps towards securing examples of tine arts. The Corcoran Gallery, endowed by W. W. Cor- coran, is an active institution with a large collection of statuary, paintings, and bronzes, many of which are valuable works of Art. The future seems bright for Federal Art when President Roosevelt's interest induced him to give expression to the following sentiments at the annual dinner of the American Institute of Architects: "Whenever hereafter a public building is provided for and erected, it should be erected in accordance with a carefully thought-out plan adopted long before, and it should be not only beautiful in itself, but fitting in its relations to the whole scheme of the public buildings, the parks and the drives of the District. * * * Now 1 most earnestly hope that in the national capital a better beginning will be made than anywhere else; and that can be made only by utilizing to the fullest degree the thought and the disinterested efforts of the architects, the artists, the men of art, who stand foremost in their professions here in the United States, and who ask no other reward save the reward of feeling that they have done their full part to make as beautiful as it should be the capital city of the Great Republic." Mr. W. B. King has kindly furnished the follow- ing account of the development of music as an art in Washington. The leading musical organizations are the Choral Society, the Georgetown Orchestra, the Saenger- 106 Washington as a Fine Art Center bund, nnd the Musical Art Society. The first of these is now twenty-three years old and has devoted itself to the larger choral works. The second, organized the same year as the Choral Society, is composed of amateurs with such professional players for public concerts as cannot be supplied from the amateur ranks. Its programs have been of a high character and its work has always reflected credit upon its conductor and members. Mr. Josef Kaspar is con- ductor of both organizations. The Saengerbund has a male chorus, conducted by Mr. Henry Xander, and gives a number of concerts in the club house every year and several public concerts. The Musical Art Society, a chorus of about thirty choir singers, under the direction of Mr. Sydney Lloyd Wrightson, devotes itself to the presentation of the lesser choral compositions. GLENN BROWN. o h- o z z: < O O O z LU > o WASHINGTON AS A CONVENTION CITY WHEN the people of the United States author- ized the Federal Government to accept the cession of territory for the establishment of a National Capital, they then and there deter- mined upon the foundation of "The People's City." They willed that their capital should not belong to any sovereign state, but that it should be owned in common by all alike, and be governed by their repre- sentatives elected to sit in the Federal legislature. It is the duty of the people therefore to frequently visit their own city, in order that they may see for themselves how their representatives have admin- istered the trust contlded in them, and to call them to account if they should permit the capital of the greatest nation in the world to be other than the fairest city under the sun. Nature herself has done much to make its site ideal. She has given it a noble river, for promoting the wealth and pleasure of its inhabitants ; hills and valleys beautiful with their mantles of green ; a 108 Washington as a stream meandering through one of the loveliest regions in the country ; a section set apart through tlie wisdom of Congress for a great National Park and cared for as sucli; and a climate mild and healthful. What wonder that when the people entrusted to the one man in whom they all had con- fidence, the selection of a site for the Federal City, he chose this spot, which a grateful Republic in his honor, named "Washington!" The shrine to which the American people natur- ally turn is Mount Vernon, an estate located pictur- esquely on the banks of the Potomac River, the home of our first President. This spot may be reached by boat after a ride of sixteen miles through pleasant scenery, or by trolley through the historic town of Alexandria. A short distance further down the Potomac is Indian Head where the United States government has established a testing plant for naval ordance. On the Virginia bank of the Potomac, opposite Washington, is Arlington, the former home of General R. E. Lee, now the final resting place of thousands of the distinguished officers and soldiers of the Civil War. Immediately adjacent is Fort Myer, the largest cavalry post in the United States. When the people determine to assemble in con- vention, where should they go but to their own city, where they are at home? Do they come to discuss literary matters or scientific problems? Here are thirty-four great libraries of the government con- taining over two and one-half million books and pamphlets; and its wonderful laboratories are freely open to aid them in their research. Is it the American lawyers who come to determine upon what lines Convention City 109 uniform legislation should be shaped? Here they meet tiie chosen representatives from every section of the land, ready to help and advise, and the mem- bers of the highest judicial tribunal in the world with the inspiration of their presence. Do the manu- facturers and business men wish to meet where they can have at tirst hand the fundamental facts and statistics which govern trade relations throughout the world? The experts at the command of the various Departments are at their disposal with the data which the people's money has been spent to collect. Or perchance it is the bankers who wish to decide the policies which shall govern the financial relations of their countrymen. Here they find the great Treasury Department and the men who control tiie National Banking System, to meet whom f:ice to face must promote a more thorough and cordial understanding of the needs of the Nation and the best manner of satisfying the wants of the people. The great public buildings which adorn our streets constitute an object lesson worthy the study of the American architect. The beautiful parks in the city limits, three hundred and two in number and comprising four hundred and seven acres, as well as the thousands of acres immediately adjacent to the city included in Rock Creek Park, Potomac Park and the Soldiers' Home Grounds, are a source of delight to the municipal engineer and landscape gardener and form charming retreats for those who, wearied with the labors of the day, seek rest in their shade, while listening to the music of the military bands. The naturalist loves to study nature through the great living collections at the 110 Washington as a Conven tion City National Zoological Park, and the many specimens carefully preserved in the Smithsonian Institution and Department of Agriculture And the student of history can find in the National Museum material for study and thought. For the accommodation of its visitors and their meetings, Washington has provided hotels which rival those of any city ; and halls and theatres abound. The status of Washington as the natural meeting place of patriotic bodies is determined in the erection of their Continental Hall by the Society of the Daughters of the American Revolution ; and now that the construction of an immense Convention Hall for the accommodation of the great political conventions, is assured, there can be little doubt that hereafter these gatherings will be held here, as they properly should be. The invitation is extended. Come to us ! See and know your own city. Bring to it your best; and receive at its hands the wealth of knowledge and entertainment which you yourselves have been storing here for the benefit of all the people alike, and receive too from its open-hearted residents a sincere and cordial v/elcome ! WALTER COLLINS CLEPHANE. 1/1 O O u O >- en. < IMPROVING AND BEAUTIFYING THE NATION'S CAPITAL VISITORS for the first time to Washington who come for a short stay and with a special sub- ject to occupy their time can quickly see the out-door objects of interest which are the finest as well as the nearest; in nature, the lawns and groves of the Capitol, the White House, the Smithsonian Institution, the Agricultural Department, the Botani- cal Garden, the Soldiers' Home, Arlington, and Fort Myer, the Riverside Drive and Potomac Park, and above all of the Zoological Grounds and Rock Creek Park; in architecture, the Capitol, the Washington Monument, the White House, the Congressional Library, the Peace Monument, the Department Buildings, the Smithsonian, and the National Museum, within which edifices are to be found books, statues, pictures, and governmental works, various and most absorbing; in art, the statues of Presidents Washington, Jackson, Lincoln, and Gar- field, Chief justice Marshall, Marquis de La Fayette, 112 Improving and Beautifying Count de Rochambeau, the Emperor Frederick the Great; Generals Greene, Scott, McPherson, Thomas, Sherman, Hancock, Logan, and Rawlins; Admirals Farragiit and Dupont; Professors Henry, Gross, and Hahnemann; of Benjamin Franklin, Daniel Webster, and Martin Luther. Those visitors who are able to give more time can extend their out-of-door visitations to Mount Vernon, and to Cabin John Bridge and the Great Falls of the Potomac, making trips long to be remem- bered, and can linger in the Patent Office, the Government Printing Office, the Bureau of Engrav- ing and Printing, and the Gun Factory at the Navy Yard, the Fish Culture Exhibit, the Botanical Garden, the Lincoln Museum, and the Halls of the Ancients. Every true American who may thus see the most attractive features of his capital — its natural beauties and its imposing edifices — will feel rejoiced at the work which has been done here in a single century— a short period compared with the life of the capital cities of the old world. But he will also realize the many deficiencies and be clearly con- scious of the additional work which is yet to be done to make Washington a national metropolis, worthy the country which it represents. The Park Commission — Messrs. Burnham, McKim, St. Gaudens, and Olmstead — planned a grand scheme for improving and beautifying the city by a parkway eight hundred feet wide from the White House and the Washington Monument to the Capitol, and by other far-reaching changes. Perhaps it is too much to expect that Congress will at once adopt this plan in its entirety. But what THE Nation's Capital 113 may be fairly asked is that nothing shall be done which will prevent improvement and development along the lines proposed, by successive movements from time to time directed by Congress. What should be authorized and done immedi- ately may be stated as follows: I. The removal of all private buildings from the south side of Pennsylvania Avenue from the Capitol to the White House — this being a part of the plan of the Park Commission which everybody com- mends and which will not be expensive if carried out before more buildings are erected. II. The removal of all dwelling-houses and other objectionable structures in alleys in the centers of the squares of the city. The alleys as originally laid out seemed unobjectionable, but they were not intended as now used for dwellings, and as now used they are blots upon Washington which should be quickly suppressed. This should be the fust part of a careful system for improving the few local- ities which can be called slums and constructing model dwelling houses for the poor. III. The completion of embankments on lower Rock Creek, of the Eastern Branch, and of the Potomac River proper, including the Virginia shores. There should be obtained, if necessary, the cession once more from Virginia of that part of the original District of Columbia south of the Potomac. IV. The improvement and beautification of Riverside Drive and Potomac Park, which embrace 600 acres of land just above and below Long Bridge. V. The adornment in every possible method known to modern landscape architecture of Rock [9] 114 Improving and Beautifying Creek Park, whose present beauties are most impressive. VI. The opening of more parks and play- grounds for children; the adoption of the best plan for the growth of the city outside of Boundary Street, the proper treatment of streets and avenues, including the limitation of the heights of buildings; and above all the unrelenting and persistent enforce- ment of the present law against the emission of black smoke. In pressing forward tliese and other plans, every friend of the capital should be inspired by reading the following: (i) The resolution of the American Park and Outdoor Art Association, now the American Civic Association, indorsing the plans of the Park Commis- sion and asserting that the beauty and grandeur of the National Capital "are matters of national impor- tance of deep interest to every citizen of the Union." (2) The admirable letter to Speaker Cannon written by Mr. E. J. Parker of Quincy, Illinois, on July s, 1904, asserting that "in the District of Columbia is the nation's opportunity to illustrate the gospel of beauty with utility on an imperial scale." (3) Professor L. H. Bailey's book on The Out- look to Nature advocating "landscape architecture" on a grand scale, "art out of doors," "great pictures out of doors;" urging that "we shall assemble the houses, control the architecture, arrange the trees and the forests; direct the roads and fences, display the slopes of the hills, lay out the farms, and remove every feature that offends the sensitive eye;" that these shall be among "the great art efforts of the future." THE Nation's Capital 115 The foregoing measures for making Washington attractive and beautiful and all otiiers which should accompany or follow them should be authorized by Congress and paid for with the nation's money, and only those taxes should be paid by property owners in Washington which are not above the average of those paid in other American cities. The present rate is $1.50 for each $100 of a fair valuation of the property. Such taxes being collected and placed in the national treasury the United States should pay all the expenses of carrying on the local government and of beautifying and adorning the city; which should be much more than double the amount of the taxes annually paid by the property holders. There is no reason why the nation should expend its money to adorn and beautify any other one of its great cities. There is every reason why it should so expend its money in Washington. A nation's capital is an exception to all its other cities. For the nation to help any other city would be invi- dious and unjust; for it to help its one capital is fair and right. All the other cities are interested in mak- ing the capital what it should be; all suffer if it is a discreditable capital; and the citizens are willing to contribute their share towards making their capital a joy and a delight to all the people of the nation. it is true that the plan thus advocated may tend to make Washington the most desirable city for residence which the country can offer; may cause people of culture and wealth to com.e here in abounding numbers. But such a result will arouse no jealousy; the beauty and prosperity, attractive- ness and renown of Washington will help one sec- 116 Improving and Beautifying the Nation's Capital tion of our common country no more than another; and equality of benefit to the whole country being secured, all sections will rejoice and be benefited by such improvements and adornments as will make Washington the noblest capital city of all the nations; created by the willing gifts of the most prosperous country of them all. Every citizen of our Union living outside of the District of Columbia should have at least three localities which he dearly loves and to aggrandize which he is willing generously to give his influence and his money ; namely (i) his Home Town or city, (2) the Capital City of his state, and (3) the Capital City of his country ; the city founded by the leader of the struggle which made us a nation — the city of George Washington. WILLIAM E. CHANDLER. Financial Institutions ( nr OIRC f T0R4 h -10 Qt iPPXPMACmVER BANK fiiS^ NT Q LU < u < ca d u O z: t£ EARLY BANKS AND BANKING IN THE DISTRICT OF COLUMBIA THE first bank established within the present limits of the District of Columbia was the Bank of Columbia, chartered by an act of the General Assembly of Maryland, December 28, 1793. This bank enjoyed the distinction of being the second bank ever chartered by the General Assembly of Maryland. Its capital was $1,000,000. The bank was authorized to have succession until Congress should have jurisdiction over the District and until they should by law annul the charter. It was located on the north side of M Street, near Thirty- fourth Street. This institution was the first and only bank ever permitted in the history of the government to main- tain for a number of years a branch office located in the United States Treasury Building. When the Capital was partially destroyed by the British in 1814, the branch office was removed to Ninteenth Street and Pennsylvania Avenue. The business of the 120 Early Banks and Banking branch was largely that of a fiscal agent and a depository of the government funds. Its affairs were finally liquidated about 1828. The second banking institution to be organized in the present District and the first in the city of Washington proper was the Bank of Washington. It was originally a co-partnership concern organized under articles of association on September 1, 1809. In the Intelligciucr of December 20, 1810, can be found a copy of a Memorial of sundry citizens of Washington praying Congress for the incorporation of the Bank of Washington. This was the first appli- cation with the exception of the Bank of North America and the Bank of the United States, ever presented by sundry citizens to the Congress of the United States or to the Continental Congress requesting them to incorporate a banking institution. It was also the first banking institution with the exception of the United States Bank required by Congress to furnish at regular intervals a complete report of its affairs to the Treasury Department. The Union Bank of Georgetown was incor- porated by an Act of Congress in 181 1. In Section 28 of the Act, the Secretary of the Treasury was, with the exception of the United States Bank, authorized for the first time in the history of the government, to make a complete examination of the afHiirs of a banking institution. Previously the only information required to be furnished was the annual statements of the several local banks incorporated by Congress. On Marcli 3, 1817, Congress incorporated the Farmers and Mechanics Bank of Georgetown, organ- IN THE District of Columbia 121 ized in 1814, and the Bank of Metropolis of Wash- ington, now known as the National Metropolitan Citizens Bank, which was also organized the same year. By subsequent acts the charters of the local institutions were extended to 1844, after which date Congress refused to renew the charters of the local banking institutions. The affairs of these banks then passed into the hands of trustees under whose management for the benetlt of stock- holders, they were carried on. Of the various local banking institutions incor- porated from 1792 only four survived until iSso. In addition to the incorporated banks in 1850, there was the banking house of Corcoran and Riggs, afterwards known as Riggs and Company, estab- lished in 1840, and now The Riggs National Bank. Another institution, engaged in banking at that time, was the Washington City Savings Bank, established in 1847, which was succeeded by the banking house of Lewis Johnson and Company in 1858. Although there was no provision in the charter of the first Bank of the United States to establish a branch bank in this city, nevertheless the directors, at the request of the Secretary of the Treasury, shortly after his Department was transferred to Washington in I So 1 , established a branch here for the convenience of the government. To the credit of the Washington branch of the second Bank of the United States it can be said that it always paid its proportion to the parent bank on dividend account, and finally when wound up paia back its capital of $500,000 and nearly $200,000 additional. 122 Early Banks and Banking That the local banks during this early period were earnest supporters of the government, and especially during the war of 1812 to 1814, is clearly shown in the report of the Secretary of the Treasury to Congress for 1812, in which he points out that Washington was the fifth largest money lender to the government during that year, being only excelled by Boston, New York, Philadelphia, and Baltimore. From iSso to 1803 a number of private bankers established themselves in this city to carry on a general banking and brokerage business. There were also a large number of local " wild-cat "" banks, organized about this time, whose sole object was to issue currency for foreign circulation. The currency of all the local Banks on a number of occasions was brought into disrepute by reason of the worthless currency of these fictitious concerns. What was true in the District of Columbia, however, in regard to these paper manufacturing concerns, known generally as Banks of Issue, also prevailed in many of the States. CHARLES E. HOWE. UJ UJ z: LU UJ Z < LU :d z UJ > < < Z < > 1 >- I/O Z z UJ Ou Q Z < v: o >- UJ Z u_ o z O I- u UJ UJ U O Z z < v^r j ^i^" j^y^'f y^j^Mte^-^w^^v -ij^ ' THE BANKS OF THE CITY OF WASHINGTON THE past ten years have witnessed a develop- ment of banking power in the United States without parallel in our country's history. An enormous increase in national wealth has taken place as the result of a decade of uninterrupted prosperity. The figures of commercial and indus- trial growth are astounding in their magnitude, and perhaps in no other manner can this great advance- ment be so clearly shown as by a comparison of the resources of national banks according to the state- ments of the Comptroller of the Currency for 189^ to 1905. Between these years the totals have more than doubled, the September statement of the former year having given the resources of all national banks as $3,423,000,000 and that of May, 1905, as $7,327,000,000. Where has there ever before been an instance of such remarkable growth ? Looking into the causes thereof it can easily be demonstrated that two great factors exercised a potent intluence 124 The Banks of the in this increase of wealth, one the final and conclu- sive settlement of the vexed and disturbing ques- tions relating to our money standard, and the other a gathering of strength and a husbanding of material resources during the lean years following the panic of 1893. With the restoration of confidence all the pent up energies of a country rich in men and means burst into activities, varied and stupendous. Small wonder is it therefore, that the banking statistics of cities and sections are dazzling in the picture they present of universal good times — of a prosperity so far beyond our dreams of riches as to make this literally a golden age. Washington lays little claim to pre-eminence as a manufacturing or trade center, although its com- merce is by no means inconsiderable; but, wanting, in a larger sense, these factors in the production of wealth, the city might naturally be expected to lag somewhat behind other communities of equal popu- lation more favored in these respects. And yet, within the last ten years, the banking institutions of the capital have shared in full measure v^'ith other cities in the general growth. Within this brief period the resources of our national banks and trust com- panies, not including savings and private banks, have nearly trebled, having increased from $2b,ooo,- 000 in 1895 to $70,000,000 in 190s. Without the benefit of extensive manuf;ictures or a great trade, Washington has about kept pace with the prosperous commercial cities of Louisville, Minneapolis, St. Paul, New Orleans, Detroit, and Omaha, it hardly seems possible that with a population largely dependent upon fixed incomes that so great an advancement City of Washington 125 could have been accomplished. Nevertheless, the figures speak for themselves, and now it is proper to accord the capital the reputation of being one of the important financial centers of the country. Singularly enough, for some years Washington was slow to appreciate the advantages of the national system. Quite a number of our leading national banks of this day are the successors of old and conservative nouses that clung tenaciously to time honored names and reputations and were loath to make a change in name, even after the undoubted benefits of Federal supervision became apparent. Of our present national organizations only one accepted membership in the sixties, three in the seventies, three in the eighties, three in the nineties, and two since 1903. At present there are twelve national banks in Washington. Their combined capital is $4,827,000, surplus and undivided profits, $3,750,000; individual deposits. 122,51 1,000; loans and discounts, $18,347,- 000; total resources, $41,880,000. These banks and their geographical distribution are as follows: The Riggs National Bank, successor to Riggs & Company, the National Metropolitan Citizens Bank, The Commercial National Bank, and the American National Bank are located in what may be termed the uptown financial district, and convenient to the United States Treasury; the Columbia National Bank, near Ninth and F Streets, the Traders National Bank, Tenth Street and Pennsylvania Avenue, the Lincoln National Bank, Seventh and D Streets, the Central National Bank, Seventh Street and Penns>'l- vania Avenue, the National Bank of Washington, 1^^ The Banks of the Seventh Street and Louisiana Avenue, and tlie Second National Bank on Seventh Street, between E and F Streets, are in what may be described as the retail sections of the city; while the business of Capitol Hill is taken care of by the National Capital Bank, Pennsylvania Avenue, between Third and Fourth Streets S. E., and that of Georgetown or West Washington by the Farmers and Mechanics National Bank, Thirtieth and M Streets. All these, representing as they do more than $40,000,000 out of $70,000,000 banking strength, manage to live together in harmony, although, like the various tribes of ancient Gaul, they "differ from each other in language, customs, and laws." The higher ethics of banking are cultivated, conservatism is fostered by all, and generally the common good is sought as eagerly as it is in other well regulated communities. Altogether, twenty-one institutions in the Dis- trict of Columbia have entered the national system since its inauguration in 1861. Of the nine which are not in existence, six have surrendered their charters either through voluntary liquidation or con- solidation, and three have failed. Of the failures, all occurred during the early history of national banking in the District, there having fortunately been no dis- asters of this character to record for more than a quarter of a century. Recently in a public state- ment, Thomas P. Kane, the Deputy Comptroller of the Currency, declared as follows: " Bank failures are disastrous and demoralizing to any community. Fortunately Washington has been free from such a calamity for a good many years. City of Washington 127 There has not been a national bank failure in the District of Columbia since November i, 1878, and only three since the inauguration of the national bank system, forty-three years ago. There was neither a failure nor a suspension during the trying panic of 1893. At the present time the national banks of Washington are the approved reserve agents of ninety-seven other national associations, and for conservatism and efficiency of management our home banks and trust companies compare favor- ably with the best regulated banks of any city in the United States." While the past, both as to stability and progress, has thus been highly satisfactory, there is no reason to doubt that the future will be less so. If on the one hand the capital has not been favored by nature or the inclinations of its citizens as a place for the development of a great trade, on the other it may be said that it is free from the vicissitudes usually visited upon cities of greater commercial pretensions. A reasonable explanation for the mighty financial strides which Washington has made in recent years is to be found in an enumeration of its residential advantages and its civic virtues. The beauty of the city, the stability of its government, its freedom from municipal disorders, its immunity from strikes, the solvency and regularity of its great paymaster Uncle Sam, the delightful salubrity of its climate — all these serving to drav/ hither those whose fortunes have been won in less peaceful and more precarious marts— are doubtless among the leading causes of its progress. More and more the country at large is learning these advantages, and everywhere among 128 The Banks of the City of Washington the people of the United States there is a growing realization that Washington is worthy of the republic and destined to be, if indeed it is not already, the most attractive capital city of the world. MILTON E. AILES. o z Q _j ca >- ZD in < < o O v: O O LU LU O^ H u_ o :^ LU > < THE TRUST COMPANIES OF WASHINGTON CITY FOR a number of years prior to 1890 charters authorizing corporations to perform the func- tions of trust companies in the District of Columbia were eagerly sought from Congress but without success. In consequence of failure to obtain appropriate legislation from Congress a number of prominent local financiers sought charters elsewhere. The Washington Loan and Trust Company, at the corner of Ninth and F Streets, began business in the District of Columbia in September, 1889, with a capital of $1,000,000, under a charter obtained from the State of West Virginia. Three months later the American Security and Trust Company, at No. 1405 G Street, began business with a capital of $i,2So, 000, under a charter obtained from the State of Virginia. On October 1, 1890, an act of Congress was passed entitled "An act to provide for the incor- fi-i 130 The Trust Companies poration of trust, lonn, mortgage, and certain other corporations within the District of Columbia." This act marks the beginning of Congressional legislation in behalf of trust companies in the Dis- trict of Columbia and makes it impossible for any foreign corporation to operate as a trust company within the District unless it shall first re-incorporate under the provisions of the act. The act referred to provides for the incorporation of companies for the purpose of carrying on any one of the three following classes of business, namely: First: A safe deposit, trust, loan and mortgage business; Second: A title insurance, loan and mort- gage business: Third: A security, guarantee, in- demnity, loan and mortgage business. The required amount of capital is fixed at $1,000,000 with the provision that any trust com- pany organized under the act may also do a storage business when its capital stock amounts to not less than Si ,200,000. Immediately after the passage of this act the two trust companies above mentioned were reorganized under its provisions. On November i8, 1890, the certificate of the Comptroller of the Currency stating that the American Security and Trust Company had com- plied with the requirements of the act in respect to its organization was filed for record in the office of the local recorder of deeds and on December 15, 1890, a similar certificate in respect to The Wash- ington Loan and Trust Company was filed for record in the same office. OF Washington City 131 No change was made in the amount of capital stock of either of these two companies when the reorganization took place. In 1903 the amount of the capital stock of the American Security and Trust Company was increased to $3,000,000. The success of each of these companies was assured from its first day of active business. During the spring of 1891 The National Safe Deposit Company, located at Fifteenth Street and New York Avenue, which was originally organized in 1867 and which had been very successful, was reorganized in conformity with the provisions of the act of October i, 1890, under the name of The National Safe Deposit Company of Washington. immediately upon its reorganization the new company absorbed The National Savings Bank, which was organized in 1870, and which at the time of its absorption was operated under practically the same management as The National Safe Deposit Company and in the same banking house. The certificate of the Comptroller of the Cur- rency in respect to this company was filed for record on April 10, 1891. On February 18, 1892, the com- pany's name was changed to The National Safe Deposit, Savings and Trust Company of the District of Columbia. The prosperity of this company in its new and larger tleld has been very marked and uninterrupted. During the autumn of 1S99 the last one of the four trust companies now doing business in the District of Columbia was organized under the name of the Union Trust and Storage Company of the 132 The Trust Companies District of Columbia with a capital of $1,200,000, and on February 3, 1900, the certificate of the Comptroller of the Currency in respect to this com- pany was made a matter of record. This company in its present location at No. 14 14 F Street, under its new name of The Union Trust Company of the District of Columbia is in a prosperous condition. All of these companies were organized for the purpose of carrying on the class of business set out in Subdivision First mentioned above, with the addi- tion, however, of a storage business in the case of the American Security and Trust Company and The Union Trust Company. No serious efforts have been made to organize a trust company to carry on a title insurance business under Subdivision Second. This may be regarded as singular in view of the fact that this field is but poorly covered by the six title insurance companies now doing business in this District. On several occasions efforts have been made to interest capital in the formation of a trust company to do a security, guaranty, and indemnity business under Subdivision Third, but such efforts have not been successful and no such company has yet been organized. The local trust companies are authorized to accept and execute trusts of almost every character, such as receiver, assignee, executor, administrator, collector, guardian, and trustee. No bond is required to be given by a company conditioned for the due and proper performance of any trust conferred upon or vested in it, but its OF Washington City 133 entire capital stock, an adciitional stockholders' liabil- ity equal to the amount of the capital stock and all of the property of the company are taken and con- sidered to be the security for the proper performance of the duties charged upon the company and are absolutely liable in case of default. The relations existing between the local banks and trust companies are entirely harmonious and no friction whatever has ever occurred. There is ample business for both classes of institutions and without exception both banks and trust companies are in an excellent condition of prosperity. Under the provisions of the act of Congress under which the local trust companies are organized, each of such trust companies is under the direct supervision of the Comptroller of Currency and is required to make an annual report to him not later than January 20, of each year. Such report must contain the amount of the company's capital stock and the proportion thereof actually paid, the amount of debts and the gross earnings for the year ending December 31, then next preceding, together with its expenses. In addition to this annual report each company is required to report to the Comptroller ot the Currency in the same manner as national banks are required to report under the provisions of sections 5211, 5212 and 5213 of the Revised Statutes of the United States. The reports to the Comptroller are not less than five during each year and each report must be published in at least one newspaper issued in Washington. Each trust company is carefully examined by a 134 The Trust Companies of Washington City federal bank examiner twice during each year in tlie same manner as are national banks. It is perhaps doubtful whether the patrons of the local trust companies fully realize the extent to which their interests are protected by the excellent laws governing these companies. As a matter of fact their protection is practically absolute for the reason that their transactions are with institutions having large capital and enjoying the proud distinc- tion of being the only trust companies directly under the supervision and scrutiny of the Federal Govern- ment; an advantage not existing in behalf of the patrons of any other trust company in the United States. WILLIAM D. HOOVER. BANKOFTIIEUNIQ3f ^^^*H o No CO z < I/O O Z > < I/O < Z o < SAVINGS BANKS OF THE CITY OF WASHINGTON To seek the origin and trace the development of the early savings banks of Washington would be pleasing and instructive. The task would lead us through interesting periods of the develop- ment of the Capital City, and the broader tleld of national affairs would be traversed before the record was ended. Lack of space however forbids con- sideration of banks that no longer exist, and the subject must be ended with the statement that in the year 1891 Washington could boast of only a single savings bank. Liquidations and changes to other systems of banking had cleared the field. Two trust companies, recently organized, and the one then existing savings bank, since incorporated into a trust company, were the only institutions at that time which received savings deposits subject to the payment of interest. The seven savings banks in Washington now operating as such are of recent origin. The oldest was organized in 1891. The 136 Savings Banks of the youngest began business in mo5, of the otliers, one was incorporated in 1898, one in 1899, two in 1903, and one in 1904. The laws of the District of Columbia permit any three or more persons who desire to form a company for the purpose of carrying on any enterprise 'or business which may be lawfully conducted by an individual, excepting banks of circulation or discount and certain other enterprises specifically referred to, to execute a certificate in writing and file the same with the Recorder of Deeds. After this certidcate shall have been tiled in the manner prescribed by law the persons who signed and acknowledged it become a body politic and corporate in fact and in name. Under this section of the code of laws savings bank corporations may be formed, but the reference to banks of circulation and discount implies that sav- ings banks organized under the laws of the District of Columbia cannot do a mixed banking business, they must confine their transactions to such as are implied by the nature of a savings bank. This feature of the incorporation laws caused six of the Washington savings banks to become foreign corpo- rations, because the organizers desired to conduct banks that should be both savings banks and commercial banks. These banks solicit two classes of accounts: First. Commercial deposits, which are received subject to payment on demand, and on which interest is not allowed. These depositors demand and receive the same consideration that is granted depositors in commercial banks. Their checks are paid on demand, their paper is discounted and taken City of Washington 137 for collection, and money is advanced for their needs if they are engaged in business enterprises. Second. Savings deposits, the withdrawal of which is subject to the right of the banks to demand thirty, sixty, or ninety days notice of the intended withdrawal as their by-laws may provide. These deposits earn interest at the rate of three per cent compounded semi-annually. Among the savings banks the favorite form of investment is the loan secured by first deed of trust or mortgage on real estate in the District of Colum- bia and the nearby counties of Maryland. Some loans are made on collateral, the stocks and bonds of local enterprises and those listed on the exchanges of Baltimore, Philadelphia, and New York being accepted as security. Another line of investments which is highly regarded and sought by the banks as a measure of safety by keeping part of their assets in a readily convertible form, comprises muni- cipal and railroad bonds. Although the return is small the security is good and adds to the strength of the institution. Owing to frequent demands from commercial depositors the percentage of avail- able cash is higher than that usually carried by sav- ings banks. Careful analysis of published state- ments indicates that as a whole the savings banks of Washington compare favorably with the national banks in the matter of strength and conservative management. "Nearly S6oo,ooo is invested in the capital of the savings banks actively engaged in business. The deposits, commercial and savings, are $3,500,000. At least three-fourths of this business has been 138 Savings Banks of the City of Washington developed during the past seven years. Since July i of this year one of the most successful savings banks has decided to establish two branches, one in the northeastern part of the city and another in the southwestern section. The rapid growth of these banks and the fact that they are not subject to governmental or muni- cipal supervision have caused the Commissioners of the District of Columbia to prepare, with the aid of the Comptroller of the Currency, a bill to be sub- mitted to Congress at the coming session which, if enacted into law, will place all incorporated banks in the District of Columbia under the supervision of the Comptroller of the Currency and give that officer power to make examinations and to make such regulations as he may deem proper for their management. JOHN E. HERRELL ALBERT OALLATI FOREIGN COMMERCE AND INTERNATIONAL BANKING As the center of our national life Washington is vitally concerned in the development of the country's commerce, foreign as well as domestic, and it is to Washington that the country looks for legislation that will foster the foreign trade which is yearly becoming more necessary to the country's welfare. The present time is opportune for the consider- ation of the subject of our foreign trade, for we are rapidly approaching the period when our domestic supplies will exceed the capacity of our home and the demand of our foreign markets. The internal commerce of the United States to-day amounts to twenty-five billion dollars, while its foreign trade is equal to only one-tenth of that amount, and its exports of manufactured goods to less than two per cent. With seventy per cent, of the banking power of the world, with unlimited credit, with an immense population, whose working units are more numer- 140 Foreign Commerce and OLis, more intelligent, and more competent than those of any other country; with a superabundance of raw material and the cheapest transportation; with all these factors, tending irresistibly to an enormous output, and with, in addition, an unrival- led geographical position, it is discreditable to this country that its natural markets should be taken from under its eyes by more distant and less fiivorably conditioned countries. The termination of the Russo-Japanese war. The digging of the Panama Canal, and the closer proximity to the world's markets which it will bring, the extraordinary rate at which the Orient is being gridironed with railroads and opened up to trade, the steps proposed for putting the different Asiatic currencies on a stable basis, and the rapidly approaching time when the Orient's eight hundred millions of population, instead of earning from ten to fifteen cents a day will begin to earn fair wages — all these portend an era, by no means distant, of abnormal business activity and of great reward for those countries that capture the Eastern Trade. The value of these foreign markets can be measur- ably determined by the efforts made to secure them, and there is perhaps no better way to estimate Europe's opinion of the importance of her foreign trade than by observing the banking capital she has embarked in it. The indefatigable way in which Germany fosters her gigantic trade by means of her great "mother" banks is well known. Aside from the enormous capital which England, like Germany, has devoted to the e.stablishment of steamship lines to foster her foreign trade, the banking power of the International Banking 141 United Kingdom in her sixty colonial and foreign banks, with two thousand seven hundred and fifty branches, is two and a half billion dollars, or pre- cisely one-half that of her domestic banks, while the foreign banking capital of the United States, as represented by incorporated establishments, is less than one four hundreth part of that of its domestic banks. That the British international banks find the business profitable is apparent by the high premium commanded by their stock, and it is fair to assume that when banks prosper, the trade they represent, and of which they are the concrete manifestation, prospers also. it may be of interest to know that while these British international banks accept long-time deposits from the mother country to aid in the development of its foreign trade, they do not compete with home banks for domestic business, and so far from there being any rivalry between the two, there is the heartiest co-operation. The international bank supplements the domestic bank by taking up the work of commerce where the other lays it down. It is recognized that a country's foreign trade can no more flourish without banks and steamship lines of its own nationality than an army in the tleld can exist without transport and commissary departments, and that without the foreign commerce which these have supplied the United Kingdom would have remained financially what she is physically, a dwarf among giants, instead of the greatest of them all. In entering upon a keen competition with such old established rivals as England and Germany, the United States would be at a disadvantage at the 142 Foreign Commerce and outset, for they have already gained a great head- way. Still even as things are American capital and enterprise have developed considerable American trade, and if national, state, and international banks work together in the United States as banks do else- where, there is no reason why the important work already done should not be made the basis of a foreign commerce commensurate with our vast internal trade. It is manifestly worse than useless to spend lumdreds of millions of dollars on irrigation works for the purpose of increasing the area of our farm lands unless we take steps to widen the narrowing markets for our agricultural produce; and it is a waste of good capital to develop our water-power electrical plants by hundreds of thousands of horse- power, if we permit the markets for our manufactures to be shut in our face. Nothing would so appropriately crown our present Administration as tliat the executive and legislative bodies should unite to promote foreign commerce by every means in their power. Our present Bureau of Commerce and Labor is doing excellent work in promoting foreign commerce, and our consuls are constantly urging upon the country the necessity for special effort to occupy the held so rapidly being covered by other countries. These, however, are but index fingers pointing the way which the country should lollow. Prompt action is needed to-day if we would not take up a long and hopeless stern chase in the wake of Germany and England. Let our banks decide that the United States International Banking 143 shall take its proper and commanding place among the world's exporters, and the thing is half accom- plished. With the growth of exports remittances would come to this country from all parts of the globe until our increasing commerce made New York the money center of the world, where all differences would be settled, and bills upon New York would take the place of bills on London, to the great gain and advantage of this country as well as of its banks, if our foreign markets are not adequately developed, the limit to our banking prosperity is within sight; if it is promptly and properly developed there is no limit to it. Foreign commerce multiplies domestic banking power just as much as domestic trade. J. SELWIN TAIT. Appendix PROGRAM OF THE 3Jst ANNUAL CONVENTION OF THE AMERICAN BANKERS ASSOCIATION AT WASHINGTON, OCTOBER 10 TO J 3, 1905 (§rhtv of l^vanthhi^s alniat (Cnmpaiia ^prtinn Convention held in the Assembly Hall of the New Willard Hotel, Tuesday, October 10th Called to order at 10 o'clock A. M., by the President, Mr. E. A. Potter. Prayer by Rev. Robert M. Moore, Washington City. Address of welcome by Mr. E. J. Stellwagen, President, Union Trust Company of the District of Columbia. i'ahtnga Sank i»frtimt Convention held in the Banquet Hall of Hotel Shoreham, Tuesday, October 10th Called to order at 10 o'clock A. M., by the President, Mr. Charles E. Sprague. Prayer by Rev. J. M. Schick, Washington City. Address of welcome by Mr. B. Frank Saul, President, Home Savings Bank, Washington City. 148 Program Atttprtrau IBaukfrs AHsariattmt Convention held in New National Theater FIRST SESSION Wednesday, October 11th Called to order at 10 o'clock A. M., by the President, Mr. E. F. SWINNEY. Prayer by Rev. Randolph H. McKim, D.D., Washington City. Address of welcome by Hon. Henry B. F. Macfarland, President of the Board of Commissioners of the District of Columbia. Address of welcome by Mr. John Joy Edson, President, District of Columbia Bankers Association. Address of welcome to the American Bankers Association and foreign visitors in behalf of the United States Govern- ment. Reply to addresses of welcome and annual address by the Presi- dent, Mr. E. F. Swinney. Annual reports of officers and committees. Discussion of practical banking questions. Address by Mr. Frank A. Vanderlip, Vice-President, National City Bank, New York City. Address, "The Examination of Banks," by Hon. William B. RiDGELY, Comptroller of the Currency. SECOND SESSION Thursday, October 12th Called to order at 10 o'clock A. M. Prayer by Rev. Teunis S. Hamlin, D.D., Washington City. Discussion of practical banking questions. Address, "Commercial Education," by Prof. Joseph French Johnson, Dean, New York University School of Com- merce, Accounts and Finance, New York City. Program 149 Address, "The Scotch System of Banking," by Mr. Robert Blyth, General Manager, Union Bank of Scotland, Limited, Glasgow, Scotland. Address, "Practical Benefits of Membership in the American Bankers Association," by Mr. Walker Hill, President, Mechanics-American National Bank, St. Louis, Mo. Statements by bankers on the general condition of business in their respective sections of the country. THIRD SESSION Friday, October 13th Called to order at 10 o'clock a. m. Prayer by Rev. D. J. Stafford, D.D., Washington City. Discussion of practical banking questions. Address, "Our Commerce," by Mr. Harvey D. Goulder, Cleveland, Ohio. Address by Hon. Leslie M. Shaw, Secretary of the Treasury. Election and installation of new officers of the American Bankers Association. iEutrrtatumrut Tuesday, October 10th During day. Trips to Mount Vernon by trolley. 7 P.M. Banquet tendered by the District of Columbia Bankers Association to the general officers and the council of the American Bankers Association. Wednesday, October 11th 3-4.30 P.M. Reception by the President of the United States at the White House. 150 Program 9 a.m. 4 p.m. Visits to the Treasury Department; (also between these hours on following days of Convention). During day. Trips to Mount Vernon. 8.30 11 P.M. Reception by the Secretary of the Treasury and Mrs. Shaw at the Arlington Hotel. 8-10.30 P.M. Special view of the Corcoran Gallery of Art tendered by the Trustees of the Gallery. Thursday, October 12th 3 P.M. Trip to Arlington and Fort Myer, Virginia; complimentary drill and exhibition by the 13th Regiment of Cavalry and the 3d Bat- talion of Artillery, United States Army, at Fort Myer. 2 P.M. Trip down the Potomac River. 2 4 P.M. Visits to public buildings. During day. Trips to Mount Vernon. 8 P.M. New National Theater: William H. Crane in "The American Lord." 8 P.M. Chase's Theater: Vaudeville. Friday, October 13th 2 P.M. Trip down the Potomac River. 2 4 P.M. Visits to public buildings. 3 P.M. Trip to Arlington and Fort Myer; complimen- tary drill and exhibition by United States Cavalry and Artillery at Fort Myer. During day. Trips to Mount Vernon. 8 10 P.M. Visit to the Library of Congress. 8.30 P.M. Reception by the District of Columbia Bankers Association at New Willard Hotel. Each Day. Visits to the U. S. S. "Puritan" and other naval vessels in Washington harbor. laitkrrs Assnrtatwit nf tl|r itBtrirt of (Uolumbia iUcmbrrH : AMERICAN NATIONAL BANK AMERICAN SECURITY AND TRUST COMPANY BANK OF WASHINGTON BELL AND COMPANY CENTRAL NATIONAL BANK COLUMBIA NATIONAL BANK COMMERCIAL NATIONAL BANK CRANE, PARRIS AND COMPANY FARMERS AND MECHANICS NATIONAL BANK W. B. HIBBS AND COMPANY HOME SAVINGS BANK INTERNATIONAL BANKING CORPORATION LEWIS JOHNSON AND COMPANY LINCOLN NATIONAL BANK MERCHANTS AND MECHANICS SAVINGS BANK NATIONAL CAPITAL HANK NATIONAL METROPOLITAN CITIZENS BANK NATIONAL SAFE DEPOSIT, SAVINGS AND TRUST COMPANY RIGGS NATIONAL BANK SECOND NATIONAL BANK TRADERS NATIONAL BANK UNION SAVINGS BANK UNION TRUST COMPANY WASHINGTON LOAN AND TRUST COMPANY WASHINGTON SAVINGS BANK 152 District of Columbia Association ©ffirpra JOHN JOY EDSON, President C. F. XORMENT, First Vice-President \V. V. COX, Second Vice-President WILLIAJI A. MEARNS, Secretary F. H. SMITH, Treasurer (Couttril nf AbtniniatratTon S. Thos. Brown W. J. Flather B. F. Saul Chas. E. White Srlrgatc to Cnnurntion C. J. BELL Alternate: A. K. PARRIS Convention Committees 153 (Uommittofi uu Arrangrmputa far (Eouuruliuu ^? lExeruttop (Uammittep JOHN M. E. AlLES C. J. BELL Geo. W. Brown S. Thomas Brown W. V. Cox Lewis J. Davis P. A. Drury A. F. Fox C. C. Glover ROBT. N. Harper joy EDSON, Chairman Geo. C. Henning J. W. HENRY John E. Herrell W. B. Hibbs Thos. R. Jones Wm. a. Mearns jno. h. moorb C. F. Norment James L. Norris E. S. Parker A. K. Parris B. F. Saul E. QuiNcv Smith F. H, Smith O. G. Staples E. J. Stellwagen F. c. Stevens J. Selwin Tait Jesse B. Wilson WASHINGTON NATIONAL BANKS CAPITAL SECOND WASHINGTON COLUMBIA LINCOLN CENTRAL Convention Committees 155 (dammittrf an SrrrptiBit CHARLES C. GLOVER, Chairman MILTON E. AILES, Vice-Chairtnan Charles J. Bell John Biddle Arthur T. Brice George W. Brown S Thomas Brown W. V. Cox George C. Henning Theodore W. Noyes J. William Henry Andrew Parker John E. Herrell Christian Heurich William B. Hibbs E. A. Hitchcock E. Southard Parker A. K. Parris J. B. Reynolds W. B. Ridgely George B. Cortelvou Frank H. Hitchcock B. F. Saul Walter C. Davidge L. J. Davis Elmer Dover P. A. Drury Geo. T. Dunlop John Joy Edson J. H. Edwards Henry H. Flather William J. Flather Albert F. Fox Daniel Fraser Thomas M. Gale Jules Guthridge RoBT. N. Harper Geo H. Harries James F. Hood Thomas L. Hume Thomas Hyde Charles A. James Thomas R. Jones Thos. p. Kane S. H. Kauffmann C. H. Keep Edgar D. Shaw J. Henry Small F. H. Smith E. J. Stellwagen Fred'k C. Stevens John A. Swope J. Selwin Tait H. A. Taylor H. B. F. Macfarland Joseph S. Waters Henry L. West Charles E. White S. J. Masters Fred'k B. McGuire William A. Mearns John F. Wilkins C. P. Minnigerode a. a. Wilson W. L. Mover Jesse B. Wilson Lawrence O. Murray Benjamin Woodruff C. F. Norment John C. Athey Augustus Crane, Jr. Geo. E. Fleming fflommittrr on iFittanrp A. F. FOX, Chairman R. H. Lynn E. Quincy Smith J. Gales Moore Fred'k a. Stier Albert b. Ruff (Bommittep ait lamiurt WILLIAM A. MEARNS, Chairman M. E. Ailes J. William Henry Arthur Peter George E. Fleming W. B. Hibbs J. B. Reynolds Geo. H. Harries C. F. Norment F. C. Stevens Andrew Parker WASHINGTON NATIONAL BANKS FARMERS AND MECHANICS METROPOLITAN CITIZENS AMERICAN COMMERCIAL TRADERS Convention Committees 157 Milton E. Ailes C. E. Howe Qlnmmittcp on iEntprtaiiiuifnt C. J. BELL, Chairman C. F. NoRMENT Andrew Parker Edson B. Olds E. J. Stellwagen John C. Athey E. p. Berry Arthur T. Brice J. Kendall Cain Clarence Corson V. B. Deyber John C, Eckloff C. W. Edmonston H. H. Flathkr Wm. J. Flather A. S. Gatley (fiontinittrr an National lanka JOHN H. MOORE, Chairman . W. WOODWARD, Vice-Chairman D. Agnew Greenlees J. Gales Moore B. W. Guy W. F. Ham Walter Heiston J. T. Hendrick Henry Hurt J. Miller Kenvon R. H. Lynn H. H. McKeE B. .S. Minor David Moore W. Wallace Nairn W. W. W. Parker A. B. Ruff Jacob Scharf F. A. Stier Chas. E. White Geo. W. White R. E. White John F. Wilkins Charles P. Williams Qlommtttre ait ®ruBt (Eam^aHtra EDWARD J. STELLWAGEN, Chairman THOMAS HYDE, Vice-Chairman GEORGE E. FLEMING, Secretary M. E. AlLES H. F. Bloont R. A. Chester J. J. Edson, Jr. Wm. J. Flather Daniel Eraser B. W. Guy R. N. Harper W. B. HiBBS James F. Hood T. L. Hume H. H. McKee W. A. Mearns Andrew Parker A. K. Parris J. Selwin Tait J. H. Small, Jr. A. A. Wilson A. G. Clapham Chas. H. Davidge Wm. F. Gude (Eommittfp nn g>amnga IBanka B. F. SAUL, Chairman ;. QUINCY SMITH, Vice-Chairman Wm. A. Hill James F. Oyster Francis Miller T. W. Smith Brice J. Moses Geo. Truesdell PRIVATE BANKS OF WASHINGTON W. B. HIBBS & CO" BELL & CO. CRANE, PARRIS & CO. LEWIS JOHNSON & CO. INTERNATIONAL Convention Committees 159 (Hflininittrc an Stnrr iExturatan ALBION KEITH PARRIS, Chairman M. J. Adler Benjamin Alvord C. E. Bright L. S. Brown R. A. Chester C. H. Davidge W. Riley Deeble P. V. DeGraw F. L. Denny H. RoziER Dulany John C. Eckloff John H. Edwards John L. Edwards C. D. Galloway Louis Garthe F. B. Gilmore J. H. Gordon Wm. a. Gordon James m. Green J. Wm. Henry S. J. henry W. F. D. Herron Wm. Corcoran Hill James F. Hood W. D. Hoover Thos. L. Hume Ralph Jenkins T. P. Kane Wm. Ker L. c. Kerr J. C. Lawrence Ralph W. Lee F. E. Leupp Thos. Marshall, Jr. Henry S. Mathews H. H. McKee J. H. MOORB Hrice J. Moses S. G. Nelson R. E. Pairo John D. Patten G. W. Pearson John Poole Frederick W. Pratt F. H. Stier W. McK. Stowell S. W. Stratton A. L. Sturtevant Corcoran Thom G. A. Townsend Geo. O. Walson John L. Weaver C. E. White S. N. Whitwell Chas. p. Williams B. B. Wilson Downs Wilson ffiDHtmittrf OH iE.\riiratmi to iForl iHyer John Biddle Aldis B. Browne E. C. Brandenburg Alexander Britton John Callahan J. O. Carter E. B. Cassatt T. M. Corcoran S. M. FooTE Daniel Eraser Thos. M. Gale CLARENCE F. NORMENT, Edw. Graves Geo. H. Harries C. A. P. Hatfield W. B. HiBBS C. W. Howard B. B. Hyer T. W. Jones J. Wm. Lee P. D. Lockridge Frank P. May Edw. A. Millar Jay J. Morrow Chairman G. W. Moss Wm. H. Moses Harry Norment Andrew Parker Guy H. Preston A. li. Ruff Odell S. Smith Edw. Stevens W. M. Whitman A. A. Wilson Levi Woodbury Claminittce on lExruraion to £Mount Urrnon W. B. HIBBS, Chairman W. A. Mearns C. F. Norment 160 Convention Committees Scott C. Bone h. a. colman (Uommittrr mi tijr JPrrBB Charles E. Howb E. L. Keen Thomas C. Noyes r. v. oulahan Edgar D. Shaw (Cnmmittrc mi ®rlrgraplj an^ Srlrpljonp J. SELWIN TAIT, Chairvian F. H. Bethkl George Howard F. C. Prindle G. S. GiBBS J. H. Moore J. D. Prosser A. W. Greely J. M. Morgan H. F. Taft QIammtttrp mt ISaligrs ROBERT N. HARPER, Chairman J. H. Cranford Chas. a. Douglass P. A. Drury T. C. Dulin Stephen B. Elkins W. T. Galuher J. T. Hbndrick J. Whit Herron J. Miller Kenyon C. J. Rixey Blair Lee Irwin B. Linton C. H. Livingston R. H. Lynn B. S. Minor David Moore F. D. Owen CuNO H. Rudolph Wm. H. Saunders JAS. F. Shea Geo. F. walker N. Wallerstein J. C. Weedon Simon Wolf AuMtiitg (Unmmittrr S. THOMAS BROWN, Chairman George W. Brown William J. Flather Edward McC. Jones Chas. P. Williams 82 5 -<'^. s .■\ ^'- %^— .^' ^.. 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