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 LIBRARY OF THE 
 
 UNIVERSITY OF ILLINOIS 
 
 AT URBANA-CHAMPAIGN 
 
 IN MEMORY OF 
 
 STEWART S. HOWE 
 
 JOURNALISM CLASS OF 1928 
 
 STEWART S. HOWE FOUNDATION 
 
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 SKETCHES gf SPEECHES
 
 
 
 SKETCHES 
 SPEECHES 
 
 David R. Forgan 
 
 
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 Privately Printed ^ 
 
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 TO 
 MY WIFE 
 
 WHOSE DEVOTION, EFFICIENCY AND 
 
 CONGENIAL COMPANY, THROUGH 
 
 SHADOW AND SUNSHINE, IN 
 
 SICKNESS AND IN HEALTH, 
 
 MORE THAN ALL ELSE, 
 
 AND DESPITE ALL 
 
 ELSE, HAVE MADE 
 
 MY LIFE A 
 
 HAPPY 
 
 ONE
 
 PREFACE 
 
 IT is fitting that I should offer an excuse for 
 the making of this book. My excuse is that 
 my family urged me to do it. They desired 
 something by way of autobiography, and they 
 wanted to preserve a few samples of my speeches 
 in permanent form. Its circulation will be con- 
 fined to members of the Forgan Clan, and a few 
 friends who may be trusted to read it with a 
 friendly and not too critical eye. As the reader 
 will readily discover, I have put little labor into 
 the writing of it. My aim has been to do it as 
 simply and easily as possible. This, indeed, has 
 been my method in all my undertakings. By not 
 atte?npting too much one avoids the danger of too 
 
 great a failure. 
 
 David R. Forgan 
 
 XI
 
 CONTENTS 
 
 CHAPTER pAOE 
 
 I. St. Andrews i 
 
 II. Early Life ii 
 
 III. Strathkinness 27 
 
 IV. Golf 41 
 
 V. Banking Experience in Scotland and 
 
 Canada ^^ 
 
 VI. Banking Experience in the U. S. A. 71 
 
 VII. St. Andrews, New Brunswick . . 83 
 
 SPEECHES 
 
 I. Grip and Grit 89 
 
 II. The New Federal Reserve Banks .113 
 
 III. St. Andrews Society Winnipeg An- 
 
 nual Dinner 143 
 
 IV. Golf and Banking 157 
 
 V. Introduction to General Dawes . 179 
 
 VI. The Duty of The Banker and The 
 
 Business Man in War Finance .183 
 VII. Introducing Marshall Joffre . .195 
 VIII. Theodore Roosevelt, The American 
 
 Citizen 203 
 
 IX. War and Credit 209 
 
 Xlll
 
 SKETCHES AND 
 SPEECHES 
 
 CHAPTER I 
 
 ST. AND HEWS 
 
 "To fair St. Andrews bound 
 Within the cave to pray. 
 Where good St. Rule his holy lay, 
 From midnight to the dawn of day, 
 Sang to the billows' sound." 
 
 Sir Walter Scott. 
 
 iPi^Pi^"^ ^^^^^^ ^^^^ °^ ^^* ^"d^^ws sit- 
 ^gfe^sj^g^^^ uated on the east coast of Scot- 
 
 =@3 np^ !®i! land in the County of Fife has a 
 1^^ 31 population of less than eight 
 
 ^gg^^ggg thousand. In America a town of 
 that size, as a rule, would con- 
 tain little of general interest. When the visitor 
 had seen the Post Office and the Court House, 
 
 I
 
 2 Sketches and Speeches 
 
 and the stores on "Main Street" his host would 
 have nothing more to show him, and nothing of 
 historical interest to tell him. Not so St. An- 
 drews. That ancient and royal city has been a 
 religious and educational center for more than 
 a thousand years. Its story teems with char- 
 acters and incidents prominent in Scotland's 
 stormy history. For its beginning we must go 
 back some fourteen centuries. Then the rocky 
 promontory on which it stands was wild and 
 wooded — a haunt of the wild boar, and a 
 hunting ground for Pictish Kings. A neighbor- 
 ing village is still known as Boarhills, and the 
 City Arms show a boar tied to a tree. Probably 
 an Irish missionary monk or hermit took up 
 his dwelling in a lonely corner of the forest or in 
 one of the caves on the coast. A little later a 
 rude monastery arose and its religious history 
 began. Unfortunately religious history is usual- 
 ly stormy, filled with bitter and often bloody 
 quarrels between various sects, creeds, and 
 authorities. So we read of struggles between 
 the Columban and the Roman Churches, and 
 the expulsion of the monks of the former by the 
 King of the Picts who sided with the Roman 
 authority. Later a body of irregular monks ap- 
 peared, known as the Culdees, who fought in- 
 cessantly with the more regular canons ol the
 
 St, Andrews 3 
 
 church. This went on for several centuries until 
 these mysterious Culdees finally disappeared. 
 Towards the end of the eighth century the bones 
 of St. Andrew, or what purported to be these 
 holy relics, were brought to the monastery, 
 greatly enhancing its sanctity and importance, 
 and thereafter it took the name of Scotland's pa- 
 tron saint. Who brought the saint's bones is a 
 matter of legendary obscurity. Some claim it 
 was St. Regulus — the "good St. Rule" of Sir 
 Walter Scott in Marmion — whose tall square 
 tower in good repair, and little chapel in ruin, 
 are still picturesque ornaments of the City. 
 
 Miracles were now wrought, and pilgrims 
 attracted by the sacred relics. Its fame in- 
 creased, and in 908 the Bishop of Alban, or 
 Scotland, made St. Andrews the seat of his 
 primacy. Then followed two centuries of rather 
 discreditable church history during which re- 
 ligion languished. Towards the beginning of 
 the twelfth century some reformation was 
 brought about by the influence of a good wom- 
 an — Saint Margaret — called "the sweetest 
 Christian soul alive." Being the English wife of 
 the Scottish King Malcolm, her opportunities 
 were equalled by her power and her will. She 
 took a deep interest in the church at St. An- 
 drews presenting it with a beautiful crucifix
 
 4 Sketches and Speeches 
 
 set with precious stones, and she insisted on re- 
 form in Lent and Sunday observance, in strict- 
 er marriage laws, and In the restoration of 
 regular services by the monks. New churches 
 and chapels arose, a town of considerable com- 
 mercial importance for those times began to 
 grow and St. Andrews started on its way to- 
 ward the ecclesiastical capital of Scotland and 
 center of national and even international poli- 
 tics which It ultimately became. 
 
 For the following three hundred years the 
 City was ruled by a succession of bishops, gen- 
 erally men of noble and sometimes of royal 
 blood. None of them had a peaceful or happy 
 time. Quarrels between the Scottish Kings, the 
 Pope at Rome and the different candidates ac- 
 companied every appointment to the See of St. 
 Andrews and left hatred and jealousies to 
 worry the successful contender. Among these 
 bishops four stand out preeminent, Bishops 
 Arnold, Roger, Wishart and Lamberton. 
 
 Bishop Arnold ruled less than two years, but 
 it was he who laid the foundation of the famous 
 St. Andrews Cathedral the ruins of which still 
 adorn the City and render the surrounding 
 cemetery impressively beautiful. It was built 
 In the form of a cross three hundred and sev- 
 enty feet in length. It had numerous towers
 
 Sl Andrew f 5 
 
 and turrets, and was covered by a copper roof 
 which on a sunny day was a landmark for sail- 
 ors far at sea. It took one hundred and fifty- 
 eight years in the building, but it was ruined in 
 a day — a striking example of how much hard- 
 er it is to upbuild than to destroy. 
 
 In the year 1200 Bishop Roger built the 
 Castle as an Episcopal residence. It was on a 
 rocky promontory washed on two sides by the 
 sea, and guarded by a moat and draw-bridge. 
 In it James I of Scotland spent his early years, 
 and James III was born within its walls in 
 1445. In a corner there may still be seen the 
 famous dungeon hewn out of the solid rock and 
 shaped like a bottle, the narrow neck making 
 escape from it almost impossible. It was fre- 
 quently taken by the English and re-taken by 
 the Scotch, and once it fell in an assault by the 
 French and among the prisoners captured was 
 the Scotch Reformer, John Knox, after which 
 he spent two years in the "galleys." Its pictur- 
 esque ruins are still a show place for visitors to 
 St. Andrews. About the year 1874 ^ secret 
 passage was discovered leading below the moat 
 to the Cathedral some two hundred yards dis- 
 tant. The existence of such a secret means of 
 escape from a Bishop's residence is a striking 
 commentary on the insecurity of those old
 
 6 Sketches and Speeches 
 
 times. Bishop Wishart founded the Black 
 Friars Monastery in 1274, and in 1559 it was 
 torn down by the followers of John Knox after 
 three days preaching by the Reformer who is 
 said to have told them to "pull down the rook- 
 ery, and the rooks (meaning the Black Friars) 
 would flee awa." There remains only a lovely 
 ivy-covered ruin in the playground of Madras 
 College — another interesting spot for the 
 visitor. After the battle of Bannockburn had 
 brought a time of peace, Bishop Lamberton, 
 then in power, had an opportunity to repair his 
 castle, out of which the English had been driven, 
 to add many churches and chapels and, best of 
 all, to finish and dedicate the great Cathedral in 
 1318. That must have been a great day in the 
 history of the City. Lamberton had crowned 
 Bruce as King, and the hero of Bannockburn 
 was present with his Knights. Seven bishops 
 and fifteen abbots clothed in their gorgeous 
 robes, and many nobles and "great gentlemen" 
 with their followers graced the occasion, and 
 doubtless the pomp and ceremony were im- 
 pressive. 
 
 The next great event in the story of St. An- 
 drews was the founding of its famous Univer- 
 sity (the oldest in Scotland), in the year 141 1, 
 by the then reigning Bishop Wardlaw. It has
 
 Si. Andrews 7 
 
 survived while all other Catholic institutions 
 have perished from the City. It is, of course, 
 Catholic no longer. It celebrated its five hun- 
 dredth anniversary in 191 1 with great pomp 
 and dignity, and distinguished scholars gath- 
 ered for the occasion from all quarters of the 
 globe representing the universities of all lands. 
 The oldest living graduate present was, I be- 
 lieve, the uncle of the present writer, John Ber- 
 wick. The University has been the home and 
 the producer of many distinguished men to 
 whom space will not permit further reference. 
 From the first it had a Lord Rector. He began 
 by being the real head of the institution, but 
 now he is only a figurehead. His election is an- 
 nually fought over by the students, and it now 
 means a passing honor for some literary or 
 political celebrity who visits St. Andrews and 
 delivers a rectorial address. Sir James Barrle 
 and Rudyard Kipling have been two of the lat- 
 est, the former delivering a remarkable and 
 characteristic address on "Courage," and the 
 latter an address on "Independence," not up 
 to the standard we should expect of him. 
 
 When the Reformation of the Sixteenth 
 Century came along St. Andrews naturally 
 was in the thick of it. The story would be out 
 of place in this brief sketch, but all of the chief
 
 8 Sketches and Speeches 
 
 actors in that glorious and tragic time frequent- 
 ly appeared on the streets of the old City. Here 
 John Knox thundered from a pulpit still shown 
 to the visitor. Here is still to be seen the 
 house where poor Mary, Queen of Scots, often 
 tried to find a rest from her turbulent enemies 
 and advisers. These two were bitter enemies, 
 but modern Scotch people manage to sympa- 
 thize with both of them ! Here Cardinal Beaton 
 burned the martyrs, Patrick Hamilton and 
 George Wishart, viewing the latter's agonies, 
 it is said, from his castle window, from which 
 window, a few months later, the reformers ex- 
 hibited his own murdered form in terrible re- 
 venge. That body still lies in the ruined Black 
 Friars' Chapel around which boys of Madras 
 College play heedlessly, and a monument to 
 the martyrs is a prominent object to be seen by 
 the modern golfer as he finishes his round of the 
 links in more peaceful days. During this period 
 the great Cathedral, several chapels, and the 
 picturesque castle all became bare and tragic 
 ruins. The Reformation finally resulted in re- 
 ligious liberty for Scotland, and such results 
 apparently have always to be fought for and 
 died for, but a lover of St. Andrews could 
 well wish that the methods used might have 
 spared these beautiful and richly historical
 
 Sr. Andrews 9 
 
 buildings to still adorn the ancient City. But 
 the fight for religious liberty was a long one. In 
 the Seventeenth Century it developed into the 
 sad, bloody and cruel struggle between the 
 Covenanters and the King. Montrose, the per- 
 secutor of the Presbyterians, was a student of 
 St. Andrews. He was a good golfer, paid I2.50 
 for golf balls, and when sick he was nursed by 
 the daughter of the club maker, bearing the 
 rather suggestive name of Pet. 
 
 Many scenes of the struggle took place with- 
 in the City's gates. Archbishop Sharpe was 
 murdered near St. Andrews by a party of Pres- 
 byterians, but a monument representing him 
 as a martyr was erected by his sons in the Par- 
 ish Church where it still stands — a curious 
 shrine in a Presbyterian Church! In 1773 Bos- 
 well took Dr. Johnson to the famous City. It 
 had then lost much of its importance and he 
 left "filled with mournful images and inef- 
 fectual wishes." 
 
 A more recent resident was Dr. Thomas 
 Chalmers, the famous Scottish pulpit orator. 
 He was a student at the University in his youth 
 and was addicted to golf and football. After- 
 ward he was Assistant Professor of Mathe- 
 matics for a brief period, and twenty years 
 later when he had become a noted preacher, he
 
 I o sketches and Speeches 
 
 was appointed Professor of Moral Philosophy. 
 But like St. Andrews' divines before and after 
 him he did not find residence or duty there 
 either peaceful or easy. He flourished in the 
 first half of the Nineteenth Century, and dur- 
 ing that period Sir Walter Scott also visited 
 the City more than once. On his last visit he 
 lamented that he was getting old, evidenced by 
 the fact that he did not feel Inclined to climb 
 the long, winding stairs Inside the square tower 
 of St. Regulus in order to enjoy the view from 
 the top. The chairs of the University and the 
 pulpits of the City have been filled from time 
 to time by eminent scholars and preachers, and 
 there are several other boys' and girls' schools, 
 so that the modern City is still distinguished 
 for religion, education and golf, and is besides 
 a popular summer resort. 
 
 In this Ancient City so intimately associated 
 with Scotland's stirring story, so bleak in win- 
 ter, when the North Sea mists prevail, so 
 charming In summer, when its famous golf 
 courses and bathing beaches are crowded with 
 happy visitors — In this metropolitan and 
 royal burgh, so long turbulent, but now so 
 peaceful — on April i6, 1862, 1 was born. Like 
 St. Paul, who was Saul of Tarsus, I claim to 
 have been born"A citizen of no mean City."
 
 CHAPTER II 
 
 EAI(LY LIFE 
 
 " At first the infant 
 
 Mewling and puking in the nurse's arms. 
 
 And then the whining school-boy, with his satchel 
 
 And shining morning face " 
 
 Shakespeare 
 
 ('^=)i^^(W'^'^^^ MOST remote recollection goes 
 ^gg^tj^^jtj^^ back three score years. I see a 
 S©5 1% /T ®i! puny child on his mother's lap 
 i^ ^1 who, although in his third year, 
 
 ^®^ffl is not yet able to walk. The 
 ^^^^^ 'fe^ puniest part of him is his legs 
 which, in response to the coaxing command, 
 " Show your little leggies" he obediently holds 
 up to the pitying admiration of the assembled 
 adults. The little leggies are clothed in little 
 stockings with a MacGregor tartan border. 
 That child was myself, and the pride I had in 
 that bright bit of color is the foundation for 
 my belief that this incident is a genuine recol- 
 
 II
 
 I 2 Sketches and Speeches 
 
 lection, and not merely a memory of what I 
 was subsequently told. That I was born a 
 twin; that my brother was twice my size; that 
 he endured this life for only a few minutes, and 
 that I, the frailer one, was pulled through by a 
 loving and competent mother are not recollec- 
 tions. They are facts often told me by my 
 elders. When I had grown to a fair-sized man- 
 hood and happened to be presented to anyone 
 who had known me as a child, but had been 
 out of touch with me since, the remark was al- 
 most invariably," Eh, laddie, if ye had'na had 
 a gude mither, ye would 'na be here the day." 
 The "little leggies" never grew to be big, but in 
 after years they served to carry the body to 
 which they have long been attached with more 
 than average speed and endurance. When 
 about five years old they carried me to the In- 
 fant School, but my attendance of only one 
 year there has left only the faintest recollec- 
 tion of the fact. They next conveyed me to 
 Madras College — an imposing name for a day 
 school — where I received all the education 
 I ever got from teachers. It was an excellent 
 school. Its graduates did well when they en- 
 tered universities, because it was very thor- 
 ough in the fundamentals. It exalted the three 
 R's to an extent that I think modern school
 
 Early Life 1 3 
 
 systems have sometimes failed to do — greatly 
 to the loss of their pupils. 
 
 My earliest recollection of my school days is 
 of a lady teacher who punished us by striking 
 our little out-stretched hands with a hard- 
 wood stick about the thickness of a golf club 
 shaft. She struck with such force that the little 
 hands showed the welts for hours afterwards. 
 But I have no recollection of objecting par- 
 ents! In fact "cruel and unusual punishments" 
 now forbidden by law were not unknown in 
 my school days. For example, another boy and 
 I (when about fourteen) got into a fight which 
 had scarcely started when the janitor came 
 along, stopped the engagement and haled us 
 before the teacher who was "Convenor for the 
 week" and in charge of the discipline. He asked 
 us for what crime we had been sent up and we 
 replied "for fighting." "Well, and who beat?" 
 he demanded. We told him that we had been 
 interrupted by the janitor before we had found 
 out. "Too bad, too bad," he replied, then turn- 
 ing to the assembled class he announced, with 
 a smile, "These boys have been fighting but 
 did not have time to find out who beat. Now 
 we will find out who beat. I will give them the 
 *Tawse' until one or the other cries, and the 
 first to cry will be the one who was beaten."
 
 1 4 Sketches and Speeches 
 
 Having thus put two Scotch laddies on their 
 mettle he got out his thick leather belt and 
 ordered us to hold out our hands time about. 
 He then struck our hands right and left alter- 
 nately with all his force, and kept at it until 
 the perspiration streamed down his face. Of 
 course neither of us cried. Finally, he gave up 
 with the remark, "Well, I am beat." That 
 night our hands were so paralyzed that we 
 could not feed ourselves, and it was several 
 days before either of us could hold a pen. Such 
 punishment for an offense involving no moral 
 turpitude was a disgrace to the school and to 
 the teacher, but I have no recollection of ob- 
 jecting parents. Parents now-a-days would 
 have such a teacher arrested — and rightly so. 
 
 I could describe worse cases than this where 
 I was only a witness, but the parents involved 
 made no protest. Were parents harder-hearted 
 in those days ? I think not. The custom and the 
 point of view have changed — that is all. 
 
 I can recall but two experiences of physical 
 punishment from my own parents. They were 
 neither cruel nor unusual, and I know I de- 
 served them, and many more which I escaped. 
 
 I would not like to leave the impression that 
 I look back on my school and school-masters 
 without affection. Even the punishments, as a
 
 Early Life 1 5 
 
 rule, were of a moderate kind. I mention the 
 severe cases merely by way of contrast to mod- 
 ern ideas. I could make other contrasts in favor 
 of old Madras College. I left it in my sixteenth 
 year. I was not further advanced than other 
 boys of my age, but I was sent into commer- 
 cial life able to write a legible hand, to do al- 
 most any problems in arithmetic — many of 
 them mentally, that is, not putting down any 
 figures but the answer — and to write simple 
 English clearly and grammatically. In addi- 
 tion to these solid accomplishments, I had had 
 Latin as far as Caesar, Euclid and Algebra in 
 moderation, and I could read a French or Ger- 
 man book rapidly enough to enjoy the story. 
 Nor was Art neglected. We had an excellent 
 drawing teacher, and all kinds of drawing and 
 painting were taught — engineering, mechan- 
 ical, landscape, in water colors, oils, etc. I still 
 have hanging on the walls of my home the 
 large French Crayon drawings of dogs and 
 horses, after Landseer, which won me the first 
 prize in that department. No one notices 
 them because they look just like engravings. 
 So far as I have been able to judge, the 
 average American boy of fifteen would have 
 difficulty in showing a better educational 
 foundation.
 
 I 6 Sketches and Speeches 
 
 The education and the up-bringing of Scotch 
 children of my generation were conducted 
 along somewhat different lines than are now 
 fashionable. Like most men of advancing years 
 I incline to the idea that the old lines were the 
 better. They taught boys self-reliance and self- 
 restraint. Boys learned to stand on their own 
 feet and to do without. The stories and jokes 
 on Scotch Thrift are innumerable, and no one 
 enjoys recounting them more than I. But I 
 wish there were some stories illustrating the 
 vice of modern extravagance. College and high- 
 school boys driving their own cars, parties 
 every night of the week, three entertainments 
 in one evening — dinner, theater and dance 
 — Sunday differing from week days only in 
 longer hours in bed — these may be better for 
 boys than the restraint of former times, but I 
 doubt it. Those young men who, in City life, 
 attain success in business or profession and 
 establish a virile character in spite of these al- 
 luring distractions have my profound admira- 
 tion. 
 
 In my day parents demanded respect and 
 obedience from their children. Now parents 
 are lucky who are not mere slavish sources of 
 supply to their children. Parents used to run 
 the family — now the family runs the parents.
 
 Early Life 1 7 
 
 Probably Scotch parents of the Victorian era 
 erred as much on the side of repression as 
 Twentieth Century parents err on the side of 
 indulgence. While my boyhood was a happy 
 one, I look back upon it with the conviction 
 that my parents themselves and their con- 
 temporaries got too little out of life. They had 
 too much hard work, too much monotony, too 
 little amusement, too little social life. Almost 
 their only relaxation was Sunday with its 
 grave, but to them enjoyable, church services. 
 How much of life shall be devoted to having a 
 good time is one of the many problems in which 
 the via media of the Romans is the path of 
 wisdom. But that path is always hard to find 
 and harder to keep. 
 
 There were tragic incidents on the rocky 
 coast on which the "Gray Old City by-the-. 
 Sea" was situated. In a winter storm sailing 
 vessels in the carrying trade between Norway 
 and Sweden and England were apt to mistake 
 the entrance to St. Andrews Bay for either the 
 mouth of the River Tay or the Firth of Forth. 
 The two latter were havens of refuge for a 
 storm-tossed ship while to head in to the Bay 
 was almost certain destruction. A lookout was 
 kept, and when a sailing vessel was observed 
 entering our Bay three guns were fired to warn
 
 I 8 Sketches and Speeches 
 
 her of her danger. Consequently we boys knew 
 what it meant when on a stormy day we heard 
 the guns. "A ship in the Bay!" was the cry, 
 and away we went to see the probable wreck. 
 It was only on such occasions that many of us 
 ever played truant from school. We knew we 
 would get a licking next day — but the excite- 
 ment was irresistible, for if the ship were un- 
 able to beat her way against the Easterly wind 
 back out of the Bay, she was doomed. St. 
 Andrews' boys, therefore, often witnessed the 
 heroic launching of the lifeboat, her perilous 
 trip to meet the ship; the risky transfer of the 
 crew to the lifeboat, and the triumphant re- 
 turn with the rescued men. Sometimes, alas, 
 the ship reached the rocks before the lifeboat 
 could reach her, and we saw scenes of drown- 
 ing men too harrowing to describe or to forget. 
 The crews of the lifeboat were selected from 
 our fishing population, and were well qualified 
 seamen. As a rule they were brave and efficient. 
 On one occasion, however, I witnessed a mu- 
 tiny among them. I never knew the reason un- 
 less it was because of the absence of their usual 
 leader and their lack of confidence in his sub- 
 stitute. At all events, they refused to launch 
 from the beach and were followed by an angry 
 crowd until they reached the mouth of the
 
 Early Life 1 9 
 
 little River Eden. Here they launched, rowed 
 out about seventy-five yards and there lay on 
 their oars refusing either to proceed across the 
 bar to the drifting ship or to return to the 
 shore. The crowd was furiously indignant, but 
 could do nothing but shout abuse at the crew. 
 Finally a little, old retired Admiral of the Navy 
 appeared on the scene and ordered the crew 
 to return to shore. They were under Navy con- 
 trol, and recognizing his authority they pulled 
 into the shore where they were roughly thrown 
 out of the boat, their cork jackets pulled off, 
 and their places taken by a volunteer crew of 
 citizens. Under the command of the little 
 white-haired Admiral who had donned several 
 overcoats, loaned by onlookers, and who 
 promptly took the helm, the lifeboat soon 
 crossed the bar of the Eden, reached the ship 
 in time, and saved some thirteen souls. To us 
 boys such heroic scenes were well worth a lick- 
 ing the next day! 
 
 I suppose it is always easy to note contrasts 
 between one's early and later days. 
 
 When I was about fourteen I suffered from a 
 toothache. On complaining to my father he, 
 without a look at the offending tooth, calmly 
 said "Better an empty house than a bad tenant. 
 Go over to Johnnie Duncan and get it out."
 
 2 o Sketches and Speeches 
 
 Johnnie Duncan was a watchmaker whose 
 knowledge of dentistry was confined to the 
 possession and use of a " forceps." He was a 
 little wiry man, and when I presented myself 
 he promptly fastened his instrument to my 
 tooth and hung on — dragging me all over the 
 room — until the tooth came out. I thought 
 my head was coming off, and Johnnie was 
 quite worn out when he finally succeeded. 
 Holding up my very large and quite sound 
 tooth to examine the little pin-point of decay, 
 he told me never again to come to him — he 
 wanted to pull no more of my teeth! I never 
 did! 
 
 My native City — St. Andrews — was a Sum- 
 mer Resort, and although the water was very 
 cold, sea-bathing was popular. The men did 
 their swimming in the Witch Lake — a small 
 portion of the ocean formerly used by Chris- 
 tians to drown old ladies in. The approach to 
 it down the cliffs was by a long flight of steps 
 hewn out of the rock. Women were never seen 
 anywhere near the Step Rock. They did their 
 bathing in the surf a mile away on the East 
 Sands. A number of bathing coaches was pro- 
 vided. They looked like caravans, with steps 
 leading to the door at the back, and one small 
 window to let in a little light. Into these went
 
 Early Life 2 i 
 
 the ladies to undress. Meanwhile an old man, 
 nearly blind, driving an old horse wearing 
 ''blinders'* carried the coaches out into the sea 
 until the water was about two feet deep, when 
 the ladies, clothed in skirts reaching to their 
 ankles, timidly opened the door and modestly 
 moved down the steps into the protecting 
 water. When they had had enough they 
 climbed back into the coach and did not re- 
 appear until fully dressed. I refrain from pur- 
 suing the contrast by attempting a description 
 of promiscuous bathing at modern resorts. My 
 modest pen is quite unequal to such a task. 
 
 Someone has remarked that every genera- 
 tion thinks that the second after it is heading 
 for destruction. I might be inclined to that 
 view if I did not believe, in spite of much 
 superficial evidence to the contrary, that good 
 is slowly conquering evil, and will, in God's 
 good time, surely prevail. 
 
 Religion had a very definite place in the life 
 of young people in my early days. It was 
 taught daily in the schools to the extent of 
 Bible reading and the learning of the Shorter 
 Catechism, and Sunday was almost wholly 
 devoted to it. Many families observed the good 
 old custom of "family worship" the descrip- 
 tion of which in Burns' ''Cotters' Saturday
 
 2 2 Sketches and Speeches 
 
 Night" is immortal. Burns claims that "From 
 scenes like these old Scotia's Grandeur springs" 
 and most people will admit that it is good for a 
 family to recognize God in their daily life, and 
 that children should not be brought up as 
 Pagans in a Christian country. As my father 
 was an Elder in the Free Church and my moth- 
 er was a very religious woman the custom was 
 regularly observed in my home. 
 
 Church attendance was practically universal. 
 All the people whom I knew went to church 
 regularly and took their children with them. 
 For many years I attended five religious serv- 
 ices every Sunday — Y. M. C. A. at ten 
 o'clock, Church at eleven. Church again at 
 half-past one, Sunday School at three, and 
 Bible Class at seven. I have met Scotchmen on 
 this side of the Atlantic who had completely 
 dropped church attendance, and their excuse 
 invariably was that they got too much of it in 
 their youth. But I have no such recollection. 
 We had a very able preacher and teacher in 
 Rev. Lewis Davidson, and none of these serv- 
 ices failed to hold my intellectual interest. I 
 cannot join with Beecher who declared that 
 theSabbath of his youth was his'^pet aversion." 
 I have always been very susceptible to the 
 moving power of good English and oratory
 
 Early Life 2 3 
 
 thrills me to the backbone. To this day I re- 
 member the Impressions of certain sermons I 
 heard in my boyhood. For example, Dr. Whyte, 
 the great preacher of Free St. George's, Edin- 
 burgh, once preached at St. Andrews on Jona- 
 than who, he claimed, was the noblest charac- 
 ter in the Old Testament. Describing Jona- 
 than's unselfishness in giving place to his 
 friend David, Dr. Whyte, in his rich tones, 
 finished a fine paragraph with these words: 
 "Oh Jonathan, wert thou here, methinks it 
 would be honor for these selfish lips to kiss thy 
 feet!" I was only about twelve, but the thrill 
 that reached my spinal column is still clear in 
 my memory. 
 
 The religion of those days was both dogmat- 
 ic and evangelical. Adam was created in a sin- 
 less state, but fell by eating the forbidden 
 fruit — an apple, we believed. We all "sinned 
 in him and fell with him." This estranged us* 
 from God, made us "liable to death itself, and 
 to the pains of hell forever." But we could be 
 reconciled to God through being "converted" 
 — that is, through repentance for sin, and 
 faith in Christ as our Saviour. This salvation 
 was freely offered to all, but there was another 
 doctrine rather contradictory to this free offer, 
 namely, "Election." The Catechism taught
 
 2 4 sketches and Speeches 
 
 us that God "out of his mere good pleasure, 
 from all eternity, elected some'' and it was a 
 very serious question with some of us, even 
 after we had been converted, whether we were 
 of the "elect." This "scheme of salvation" was 
 at least simple. Child-like faith was the chief 
 requisite for its acceptance. It worked in many 
 cases. I myself knew of conversions that 
 changed wicked, foul-mouthed men into quiet, 
 prayerful Christians who led exemplary lives 
 to the end of their days. 
 
 But what has become of these old doctrines ? 
 It is years since I have heard a minister in the 
 pulpit refer to the fall of man, original sin, the 
 pains of hell or the need of conversion in the 
 old sense of an instantaneous change. What we 
 get now are lectures and discussions in moral 
 philosophy. I believe that the example and 
 teaching of Jesus Christ applied to every ex- 
 perience of life is the best preaching. He taught 
 little doctrine, except the Fatherhood of God 
 and the brotherhood of man, and there is scope 
 enough in these for any preacher. We may be 
 His humble followers without being able to 
 subscribe to all the man-made doctrines. But if 
 we are His followers — however laggard — 
 we should ally ourselves with His church and 
 attend it regularly. The church, with all its im-
 
 Early Life 2 5 
 
 perfections, stands for what is highest and best 
 in human life. In large measure it is the salt of 
 the earth saving society from degeneration, 
 decay and disintegration. Christ himself set 
 the example of church attendance for we read 
 "He entered as was his custom into the Syna- 
 gogue on the Sabbath day." Morally and spirit- 
 ually every one who is not an insufferable 
 egotist is conscious of failure. We may not need 
 five services every Sunday, but we certainly 
 need one. Against soul-shriveling materialism, 
 and as a help in the trials, temptations and 
 tribulations that come to us we need all the 
 inspiration available. 
 
 Dr. Harry Emerson Fosdick in his Farewell 
 Sermon said recently: "They say that Brittany 
 fisher-folk have a legend that off their coast, 
 deep-buried in the seas is the ideal City of 
 Atlantis, and from it on quiet nights, when the 
 winds are still, if a man's heart is right he can 
 hear the pealing of the bells. Such is the soul of 
 man with sacred things deep sunken, which 
 life's storm makes us forget, and here, often- 
 times on a Sunday morning, we have been 
 quieted in worship until we heard the pealing 
 of the bells." 
 
 I, for one, still strive to hear, and need to 
 hear, the pealing of those bells.
 
 CHAPTER III 
 
 STJ^A T//K/NNESS 
 
 "Where village statesmen talked with looks profound, 
 And news much older than their ale went round." 
 
 Goldsmith 
 
 {Published in the '^Scottish American" 
 November 24, 1886) 
 
 ^Ol'^^if^^^'^?^^^^^^ back over the winding 
 g?^;i^^^ pathway of my past life, there 
 
 Ljj^ is to me no better remembered 
 
 ^p scene than one which occurred 
 W^i^MfM^ annually during the years of my 
 boyhood. The session at school 
 is ended, and the eight weeks of holidays stretch 
 out before my young imagination as an almost 
 endless vista of fun and freedom. Our family 
 are preparing for their summer sojourn at our 
 country house, a few miles distant from our 
 City home. The trunks containing the linen, 
 cutlery, cooking utensils, etc., required to sup- 
 
 27
 
 2 8 sketches and Speeches 
 
 plement the permanent stock at the little coun- 
 try house, are packed. The half-worn clothes 
 and boots belonging to us boys — no longer 
 good enough for city wear — are all carefully 
 stowed away by our thrifty mother, to be worn 
 out in the woods or on the harvest fields. My 
 elder brothers are carrying boxes and bundles 
 to the front of the house, under the direction of 
 our mother, who prides herself in making this 
 annual "flitting" without breaking a bowl or 
 scratching a chair. I, the youngest, with a new 
 whip, built specially for the occasion, have 
 mounted guard on our movable effects, and 
 am defending them against the encroachments 
 of small boys and dogs who like to poke their 
 inquisitive noses into anything unusual. 
 
 But now I suddenly scramble down from my 
 fortress and rush into the house with the start- 
 ling intelligence that the cart which is to carry 
 us and our personal property is in sight and 
 coming round the corner. This news, I find, ex- 
 cites no one but mother, who is perhaps scarce- 
 ly prepared for the shock and, rushing back to 
 my duty outside, I am not a little disappointed 
 to find that the carrier has not brought my 
 favorite horse — old Dick — who, according to 
 my firm belief and frequent declaration, was 
 able to draw as much as two ordinary horses.
 
 Strathkinness 29 
 
 For me the glory has departed from the scene 
 for a time because of the horse, but when every- 
 thing is at last securely loaded on the cart; 
 when my parents and brothers have mounted 
 to positions where they can hold on themselves, 
 and at the same time prevent some article 
 from falling off; when, after handing up my 
 pet cat, I am lifted first on to the horse's back 
 and from thence pulled up beside the driver; 
 when, above all, I am given the lines and al- 
 lowed to drive, the cup of my earthly happiness 
 is full. Ah! those happy days of our boyhood! 
 Can any scenes in after-life give us such un- 
 alloyed joy? 
 
 As we slowly move along the country road, 
 my father has a quiet chat with the carter 
 about the various crops in the fields; my moth- 
 er's mind is set chiefly upon getting to our des- 
 tination without anything falling off on the 
 way, and she says little, but keeps a vigilant 
 eye on her household property; my brothers 
 plan holiday excursions, or recount the ex- 
 ploits of former years, while I am perfectly 
 happy with the present responsibility of driv- 
 ing the horse, under the guidance of the carter. 
 I said perfectly happy, but we are never so in 
 this world. In the present instance my bliss is 
 slightly curtailed by my not being allowed to
 
 3 o Sketches and Speeches 
 
 use my new whip as freely as I would wish on 
 the horse's flanks. This again leads me to re- 
 gret the absence of my old friend "Dick," who 
 was one of those patient, plodding fellows who 
 take their time in spite of all the whips in 
 creation, and who might, therefore, be whipped 
 as often as I liked without danger to the fur- 
 niture. 
 
 Arrived at the village — Strathkinness by 
 name — our house is easily distinguished by 
 its being more than one story high (a butt and 
 a ben being the common style) — a fact of 
 which I am not a little proud. The shutters are 
 soon drawn back and the windows opened. 
 Then follows the unloading of our stuff, to the 
 view of the gaping village urchins who have 
 collected at a little distance in silent awe. To 
 their minds we city folks are quite grand — a 
 fact I am all conscious of, as I ostentatiously 
 hold the horse's head, and view their ragged 
 clothes and bare feet from the altitude of a 
 tweed suit, a straw hat, and a pair of boots. 
 This feeling of superiority is enhanced when a 
 neighbor's boy comes along upon whose back I 
 recognize one of my own left-off coats of the 
 previous summer. I cannot recall such vain 
 thoughts ever passing through my mind in the 
 City — a fact which shows me that a man's
 
 Strathkinness 3 1 
 
 opinion of himself, and people's regard for him 
 depend upon the size of the place wherein he 
 lives. It is far better to be a big man in a small 
 place than a small man in a big place — at 
 least so I felt as I stood, amid the circum- 
 stances described, in that peaceful Scotch vil- 
 lage of which I am about to write. 
 
 Strathkinness had little of the picturesque 
 within its bounds, it was not the "loveliest 
 village of the plain," but the beauty of the sur- 
 rounding country, with its wooded hills and cul- 
 tivated slopes, its peaceful valleys, and rippling 
 burns, made it a pleasant spot during the sum- 
 mer months. There were probably 500 inhabit- 
 ants whose main support was drawn from some 
 fine sandstone quarries, owned and worked 
 by the one man in the place who was mak- 
 ing money. Strathkinness had two churches, 
 the Free and the Auld Kirk, and although it 
 would be difficult for a stranQ;er to tell wherein 
 lay their difference in doctrine or worship, still 
 there was plenty of scope for religious secta- 
 rian feeling, for my folks were Free, and I 
 remember I had little hope for the eternal wel- 
 fare of the worshippers who gathered round 
 the door of the Auld Kirk on Sunday, waiting 
 for the last stroke of the bell before they slowly 
 stepped inside. One might suppose that the
 
 3 2 sketches and Speeches 
 
 ministers of these slightly divided churches 
 would be warm friends, drawn together by pro- 
 fessional feelings, kindred aims, and mutual 
 responsibilities for the spiritual welfare of the 
 village. But that was not the way the Strath- 
 kinness divines exemplified their Christianity. 
 I have no reason to suppose that ill feeling 
 existed between them, but I never saw them 
 together in public or private. 
 
 The Auld Kirk minister was a genial, good- 
 looking, middle-aged man, easy-going and, 
 therefore, popular. He seemed quite contented, 
 but although he had lived long among the hum- 
 ble villagers hislife was not without its romance, 
 for it was said that he had fallen in love with 
 his young wife when she was an infant in her 
 cradle, and he a student boarding at her 
 mother's house; that he had waited for her, 
 and that his patient fidelity had been fully 
 rewarded. The Free minister, on the other 
 hand, was a plain-looking, short-sighted, spec- 
 tacled scholar, who was rarely seen during the 
 week except on the road to or from the City 
 with library books under his arm. He was a 
 good man, whose heart was in the right place, 
 but he was too fond of the seclusion of his 
 study ever to be a successful pastor. Occasion- 
 ally he would astonish his sleepy hearers with
 
 Strathkinness 3 3 
 
 a really powerful discourse, but as a rule his 
 sermons were rather monotonous. His favor- 
 ite subjects were St. Paul, whose virtues he was 
 never tired of extolling, and the devil, whose 
 devices he was never done denouncing. He 
 preached extempore, and so fond was he of his 
 two favorites that when he got the length of 
 naming either of them he need try to get no 
 further that day for it was then hard for him to 
 stop. I recollect that he had a most uncom- 
 fortable way of speaking of Satan, as if he were 
 ever at our elbow, which rather frightened my 
 youthful fancy. What the good man might 
 have accomplished with his scholarly abilities 
 in a better field, I cannot say, but there he was, 
 with a small salary, a large wife, and a numer- 
 ous family, firmly planted in lonely Strath- 
 kinness, as dry as any dead oak in the place, 
 and as unlikely to be transplanted. 
 
 Besides its two churches Strathkinness pos- 
 sessed two public houses, and two schools, so 
 that the in teres ts of rum, religion and the " three 
 R's" were about equally represented in the 
 little community. 
 
 Like all Scotch villages, it had its characters. 
 Its oldest inhabitant — a wrinkled old woman, 
 nearly a centenarian — lived alone, and how 
 she kept the breath of life in her was a mystery.
 
 3 4 Sketches and Speeches 
 
 Its never-failing idiot was a huge red-haired 
 fellow, whose mind had never got past the 
 stage of infancy. Its "crier" was a wheezy old 
 chap, who could make his bell better heard, 
 and as well understood, as his voice. Its repre- 
 sentative of natural genius was a common 
 quarryman, but at once a handsome man, a 
 skilled botanist, and a minor poet after the or- 
 der of Burns himself. Its most famous charac- 
 ter, however, was its miser, whom I shall des- 
 ignate Miss Hardscrew. 
 
 Miss Flardscrew's house was one of the best 
 in the village. It contained perhaps ten rooms, 
 all well furnished — at least so it was said — 
 but no one ever saw their interior, for their 
 shutters were always securely fastened, and 
 allowed not a ray of sunlight to enter and fade 
 the carpets. They were only opened when Miss 
 Flardscrew paid a visit to them to see that 
 nothing had been stolen. Every door in the 
 house was securely fastened by strong locks 
 and bolts, the keys of which hung at the miser's 
 girdle. She, herself, occupied the kitchen. This 
 cheerless apartment, with its cold stone floor, 
 was both parlor and bedroom to the miserable 
 old creature, who had hundreds of pounds in 
 the bank. In front of the house was an orchard 
 surrounded by a high stone wall, with broken
 
 Strathkinness 3 5 
 
 glass on the top as a protection against the 
 boys. Through the bars of the strong iron 
 gate you might see her exchanging goose- 
 berries for the school children's half-pennies, 
 which were intended by their parents to be 
 spent on a more solid lunch. As she stands 
 with one hand holding the small measure 
 barely full of gooseberries, which she will not 
 empty into the purchaser's pocket until her 
 other hand closes over his half-penny, she is 
 not an attractive specimen of her kind. Her 
 race of life is well nigh run, and she cannot 
 long hold on to the half-pennies. Her dress is 
 threadbare and shabby. Her figure is thin and 
 shriveled. Her face, wi'th its small sharp eyes, 
 its dry, twitching lips, and its innumerable 
 wrinkles, is hard and ugly. I have heard that 
 she was a belle in her youth, but not one trace 
 of feminine grace or womanly tenderness re- 
 mains. All that was ever good in her has been 
 crushed out by the absorbing love of money, 
 and as she stands before us now she has not a 
 spark of affection for any living thing — not 
 even a cat — and no living thing cares for her. 
 This genial creature, I regret to say, was a 
 distant relative of mine, a fact which she rec- 
 ognized by a biennial call upon my mother, 
 accompanied by a gift of about a dozen apples,
 
 3 6 Sketches and Speeches 
 
 which were always windfalls and which she 
 could not sell, nor we eat. Taking advantage of 
 this relationship I used to venture within the 
 iron gate occasionally at gooseberry time, and 
 after a while I was allowed to help her to pull the 
 gooseberries, and this gave me a disinterested 
 object for many subsequent visits. While thus 
 engaged I was informed that I might eat the 
 berries which had fallen to the ground, and 
 which my kindly relative assured me were the 
 best of all ; but I was generally to be found with 
 a good thick bush between me and the owner 
 thereof, and I rejoice yet to think that she 
 parted with the choicest of the fruit without 
 money and without price. 
 
 In later years the old lady began to get too 
 feeble to attend to her own wants, and after 
 some diplomacy and negotiation a bargain was 
 arranged with one of her nieces whereby the 
 niece agreed to live with and nurse her aunt 
 in consideration of sundry benefits to be de- 
 rived from the death of her patient. This ne- 
 cessitated Miss Hardscrew's sending for her 
 lawyer to make her will. The lawyer was a City 
 gentleman, and many a drive to Strathkinness 
 did he have before that will was executed, for 
 Miss Hardscrew, besides being greatly exer- 
 cised over the division of her property, shared
 
 Strathkinness 3 7 
 
 a very common feeling among the Scotch, 
 namely, that signing a will and sending for the 
 undertaker were about the same thing. The 
 will, however, was executed at last, and the 
 niece sat down to wait and long for it to be 
 administered. She was an honest, decent 
 woman, and faithful to her aunt, but it was 
 hardly to be expected that she would pray 
 that her life might be long spared. But al- 
 though Miss Hardscrew took to her bed, many 
 a year passed and still the niece waited. 
 
 I remember visiting the dismal mansion with 
 my father and mother, after I had grown to be 
 a young man. Passing through a spacious hall, 
 where a man's hat was conspicuously displayed 
 as a deceptive intimation to tramps that there 
 was a man in the house, we entered the kit- 
 chen, and found Miss Hardscrew sitting up in 
 bed. Her body was wasted but her mind was 
 clear, and as much exercised about worldly 
 things as ever. Seeing this, my mother con- 
 ceived it to be her duty to speak religiously to 
 her. 
 
 "Strathkinness is the warst hole onybody 
 ever put their foot in" Miss Hardscrew ex- 
 claimed; "they would rob me o'a I hae if they 
 daured. \Yould ye believe it, I had twa pair o' 
 blankets taen oot o' my very hoose, an' apples
 
 3 8 Sketches and Speeches 
 
 an' berries mair than I can tell. Od, they'll 
 suffer for't yet — if no in this warl, they wuU i' 
 the neist." 
 
 "We are all sinners, deserving nothing but 
 punishment from the Righteous Judge, "began 
 my mother, "but if we confess our sins He is — " 
 
 "Ou aye! I ken that weel enough, but ye 
 needna' preach to me, I niver wranged a livin' 
 bein', an' I've been an honest an' respectable 
 woman; deny it wha may!" 
 
 "We are all sinners before God, no matter" 
 — again interposed my mother, but Miss 
 Hardscrew was deaf to good advice, and seeing 
 it was hopeless mother rose to depart. 
 
 "Hoo do ye think she looks?" anxiously 
 whispered the niece at the door, "she surely 
 canna last muckle langer?" 
 
 "Don't deceive yourself, Jean," said my 
 father with a twinkle in his eye, "she will last 
 ten years to come yet, and see you out," and 
 with that comforting assurance we left. I never 
 saw her again, but I will not soon forget the 
 impression her character and condition made 
 on me. 
 
 The inhabitants of the Scotch village were 
 hard-working, honest folks. Their religion, as 
 a rule, was confined to a stolid but regular 
 church attendance, although there were doubt-
 
 Strathkinneff 39 
 
 less a few to whom religion meant more. The 
 simple trust of two ladies who had barely 
 enough to support them with their needles, 
 and who had little to look forward to in old age, 
 made a lasting impression on my mind. The 
 moral tone of the place was very lax, chiefly 
 because of the lack of a salutary public opin- 
 ion. In this respect it was quite the opposite 
 of the neighboring City of St. Andrews where 
 moral lapses were as severely condemned as 
 they were carelessly tolerated inStrathkinness. 
 Why this was so I do not know. 
 
 I spent many happy summer days in Strath- 
 kinness, and if ever it is my good fortune to see 
 again the land of my birth, there is no spot in 
 "bonnie Scotland" that I shall visit with more 
 pleasure, for no spot will awaken more varied 
 and happy memories.
 
 CHAPTER IV 
 
 goLF 
 
 'Health is the vital principle of bliss, 
 And exercise, of health." 
 
 Thomson 
 
 Published in ''Golf Illustrated'' October^ 1924 
 
 oD'^^if^^^^^^^ ^" ^^* ^^drews — the an- 
 ^^^^^^^ cient capital of the golfing 
 Sc world — my golf recollections 
 ^ naturally start there. They 
 ^@^ffl begin with a wee Scotch laddie 
 of five, bearing a dim but un- 
 mistakable likeness to myself, playing on 
 the edge of the historic links with a small 
 club specially made for him. About that 
 time gutta-percha balls had supplanted the 
 old feather-filled, leather-covered kind, but I 
 can recall seeing specimens of the latter lying 
 about. In those far-off days old Tom Morris — 
 the Nestor of thegame — was the leading profes- 
 sional. But, of course, he had rivals, of whom 
 
 B
 
 4 2 sketches and Speeches 
 
 Willie Park, of Musselborough, was the chief. 
 The professional match of those days was 
 usually arranged for three to five days' play 
 over several courses. It was a continuous affair, 
 beginning at the home of one player, covering 
 several neutral courses, and finishing at the 
 home of the other player. If the "stakes" for 
 such a match were as high as one hundred 
 pounds sterling they seemed large to us ! 
 
 On one occasion a long drawn-out match of 
 this sort between Tom Morris and Willie Park, 
 having started at Musselborough, was being 
 finished at St. Andrews. After various ups and 
 downs it reached the thirty-sixth hole at St. 
 Andrews with the players "all even." Playing 
 the last hole Tom reached the edge of the green 
 in two, but still thirty or forty feet from the 
 hole. His opponent was in the grassy hollow 
 short of the green in two, and electrified the 
 crowd by holing his approach shot. Old Tom 
 only smiled — nothing in the game ever made 
 him swear! Taking out his old wooden putter, 
 he calmly studied his putt, and while the crowd 
 held its breath, he played and holed it! Those 
 were not the days of extra holes. The match 
 was halved, and Tom's St. Andrews admirers 
 carried him off the green on their shoulders in 
 triumph.
 
 Golf 43 
 
 Passing a decade, I see the wee laddie — now 
 bearing a much clearer resemblance and more 
 definite relation to myself — a lad of fiften at 
 work in a bank and very proud of it. He still 
 played golf, but not as often as he should have 
 done. Like many another, he failed to appre- 
 ciate his advantages or embrace his opportuni- 
 ties. Consequently he missed the best years 
 and left Scotland permanently at eighteen 
 without having become a first-class player. 
 
 At that time, young Tom Morris was su- 
 preme. I think he won the championship three 
 consecutive years before he was twenty. He 
 passed away at twenty-three. How would he 
 compare with the top-notchers of to-day? 
 Comparison is difficult and futile. The clubs, 
 the balls and the courses have all been greatly 
 improved since then. All I can say is that he 
 was easily the best player of his day. Those of 
 us who knew him can never forget his brilliant, 
 dashing style as a player, nor his captivating 
 personality as a man. He was king of his golfing 
 world — but it was a small world. Even Eng- 
 land did not belong to it at that time, although 
 some old gentlemen played at Blackheath, near 
 London. Some clubs were indeed shipped from 
 St. Andrews to foreign parts, where a few 
 Scotchmen had found themselves and had
 
 44 Sketches and Speeches 
 
 started the grand old game in a modest way. 
 But, practically speaking, the golfing world 
 was confined to Scotland. 
 
 Passing another decade, I find myself in 
 Minneapolis with a few clubs and balls brought 
 with me on my return from my first visit home. 
 Explaining their use to my friend, C. T. Jaf- 
 fray (then a banker — now a railroad president) 
 we went several times to a farm where there 
 was some grazing land, selected certain trees 
 as "holes," and banged the balls about, thus 
 playing (I believe) the first golf in Minnesota. 
 I am proud of having initiated Mr. Jaffrey into 
 the game, for he later became, and still is, one 
 of the best players in that section. 
 
 A few years later — 1896 — I found myself 
 in Chicago (still working in a bank and still 
 proud of it), where two golf clubs had recently 
 been organized. Charlie Macdonald (to whom 
 American golf owes as much as to any other 
 single man) J. H. Whigham, the late Wm. R. 
 Stirling, my brother, James B., and other 
 Scots had inspired some Americans to join 
 them, and had launched the Chicago Golf 
 Club, first at Belmont, and later at Wheaton, 
 west of Chicago, where it still flourishes. But 
 this location was not convenient for Chicago- 
 ans whose summer homes were on the north
 
 Golf 45 
 
 shore of the Lake, therefore Onwentsia was 
 started at Lake Forest. I joined, and the de- 
 lightful thrill I experienced to find the game of 
 my youth established in Chicago and ready to 
 my hand has remained with me in ever-increas- 
 ing force. I often wonder whether I could have 
 endured life in Chicago all these years without 
 it. 
 
 We who had learned the game in Scotland 
 had a brief period of fame and glory before the 
 Americans caught on, and some of us won 
 honors and reputations which have been hard 
 to live up to since. But it was fun while it last- 
 ed. For example, I remember visiting a city in 
 the early days where golf had been played for 
 about a year. Strolling up to the shanty of a 
 clubhouse, I asked if I might play. Permission 
 was at once granted and I then inquired if 
 there was anyone about who would join me in 
 a game. This was met with the question as to 
 whether I knew the game, because, said the 
 attendant, "Our best player is here looking for 
 a game, but he does not like to play with begin- 
 ners." I replied that I knew something of it, 
 and the best player was at once produced — a 
 fine-looking young lawyer. We played, and 
 doing my usual "low-eighty" against his 
 hundred and twenty, I won every hole! My
 
 46 sketches and Speeches 
 
 opponent was one of the right sort, however, 
 and next day he played me again in the pres- 
 ence of quite a crowd which he had collected 
 to see the ''wonderful player!" He gave a din- 
 ner for me that evening. He is now a better 
 player than I, and we are still friends. 
 
 But other experiences soon followed. Going 
 a little later to La Crosse, Wis., to play with 
 my old banker-friend, George W. Burton, he 
 introduced into our game a student lad named 
 Hixon, from whom I narrowly escaped defeat. 
 A few months later young Hixon came into 
 my office, and asked me if I could arrange 
 a game for him with our professional at On- 
 wentsia, explaining that he wished to see a 
 "pro" play. I did, and my young friend played 
 Onwentsia in seventy-six and beat the pro- 
 fessional! Thus early did we old-timers learn 
 to fear the boys! 
 
 Among all my recollections of early Ameri- 
 can golf there is only one of an unpleasant na- 
 ture. Two men, always playing together and 
 keeping each other's scores, had won several 
 cups. They were beginners and suspicion arose 
 as to thecorrectness of the scores they returned, 
 and when they entered for a tournament at 
 Onwentsia, it was arranged that two of our 
 best players should play behind them and keep
 
 Golf 47 
 
 their scores. The result was that the two 
 worthies promptly and permanently disap- 
 peared thereafter from golf competitions! Ver- 
 ily, human nature is a queer thing! Fancy tak- 
 ing a cup home, receiving the congratulations 
 of family and friends, and knowing all the 
 while that it was stolen ! One would think that 
 such a cup on the mantel would be a constant 
 occasion for blushing confusion instead of 
 pleasurable pride! But to the honor of Ameri- 
 can sport be it said that such cases have been 
 exceedingly rare. 
 
 In all recollections there must be an element 
 of sadness as we remember those with whom 
 we worked or played, and who are no longer 
 with us. For myself I find that it is as golfers 
 that I recall them, no matter how prominent 
 in other directions they may have been. For 
 example, no man who has passed from Chicago 
 for some,fifteen years is more frequently recalled 
 by his friends than the late John H. Hamline. 
 He was a fine man, an able lawyer, a public- 
 spirited citizen whose professional and^ro bono 
 publico achievements are well remembered. 
 But it is as a golfer that I love best to think of 
 him. He had a most deliberate style, but such 
 a true love for the game and so earnest a con- 
 centration thereon, that it was a delight to play
 
 4 8 Sketches and Speeches 
 
 with him. He had also a keen sense of humor, 
 many instances of which I could relate. Perhaps 
 one will suffice, as it is at my own expense. I 
 had offered two sets of golf clubs as prizes for 
 a mixed foursome competition, and it was usual 
 at Onwentsia in such games for the women to 
 ask the men to play with them. On the day of 
 the event I was asked by a woman to be her 
 partner, but declined because I was giving the 
 prizes. "Oh, come on," said she, "we won't 
 win, anyway." So I played, and as luck would 
 have it, we did win. My partner took her prize 
 but I, of course, allowed the man's prize to be 
 competed for again. In the newspaper, how- 
 ever, appeared a squib under the heading — 
 "Wins His Own Prize," which, of course, did 
 not contain all the facts. Next day John 
 Hamline walked into my office and engaged 
 me in conversation as to the great depth of 
 meaning in some Scotch words. Explaining 
 that he was studying Burns he asked me the 
 full meaning of the word "pawky," spelling it 
 out most carefully. I told him that "pawky" 
 meant "canny, shrewd, a little over-reaching, 
 sure to get the best of it in any possible way." 
 "Thank you, D. R.," replied John, without a 
 glint of a smile. "I thought a man who would 
 win his own prize could explain the meaning of
 
 Golf Ar^ 
 
 'pawky/ " and he marched away without an- 
 other word. 
 
 Golf's conquest of America was as rapid as it 
 now bids fair to be complete. But it had some 
 old prejudices to overcome. When I had com- 
 peted in a few tournaments in Chicago the 
 chief stockholder of my bank proposed to sell 
 his stock on the ground that I could not be "a 
 sport and a banker at the same time." But he 
 later repented, kept his stock (greatly to his 
 financial advantage), was conquered by the 
 game and enjoyed many a round before he 
 passed away. Today anyone who objected to 
 golf in moderation as recreation for the "tired 
 business man" would be generally laughed at. 
 In the past three decades the Royal and An- 
 cient game has certainly won its way! I look 
 back to the time when the one course at St. 
 Andrews was never crowded. Now there are 
 four courses, and in summer they are constant- 
 ly crowded. 
 
 I look around in Chicago and find over a 
 hundred courses — some as fine as any in the 
 world. Millions of dollars have been invested in 
 golf clubs all over the country, and American 
 life has been transformed and enriched there- 
 by. Some American-born players are the equal 
 of any in the world. A constant evolution in
 
 5 o Sketches and Speeches 
 
 clubs, balls and courses is going on with the 
 aid of American inventive genius, and about 
 ten strokes have been cut from the best scores 
 thereby. My old club, Onwentsia, now numbers 
 among its members such champions as Robert 
 Gardner and Miss Edith Cummings, and can 
 put a team of players in the field which could, 
 as I believe, hold its own with a team from any 
 club in the world. But while I love Onwentsia 
 of which I am proud to have been champion 
 more than once (before the boys came along), 
 I do most of my playing on Old Elm at Fort 
 Sheridan. This is a course on which no woman 
 has ever played, and it admirably suits the 
 limited number of men of advancing years who 
 own it. The ground is rolling and the holes 
 have picturesque variety and individual charm. 
 Under the able administration of President E. 
 F. Carry and Chairman of the Green Commit- 
 tee W. A. Alexander, the course is always in 
 perfect condition. There is never congestion, 
 nor any waiting, and the members get terribly 
 spoiled for the ordinary links, with women and 
 children cumbering the ground ! I suppose we 
 are a selfish lot at Old Elm, but if there is any- 
 thing this side of paradise nearer to human 
 happiness than four congenial golf-afiinities all 
 playing well on a June day on that course, I
 
 Go/f 51 
 
 know not what it is ! Gentle breezes from Lake 
 Michigan temper the atmosphere; the cares of 
 business and the worries of life ''fold their tents 
 like the Arabs and as silently steal away"; 
 forgotten the rheumatic aches and other ills 
 that prey on increasing years; the mind puri- 
 fied of all sordid or material considerations 
 generates a spirit of youthful camaraderie; 
 jovial badinage and mock sympathy for oppo- 
 nents' misfortunes form the conversation; the 
 happy hours speed away on the spirit-wings of 
 mutual understanding and joyous friendship. 
 The grand old Scotch game, so circum- 
 scribed in my youth, has, in my day, conquered 
 America. Who shall undertake to measure its 
 contribution to the health and happiness of our 
 people, or to estimate the benign influence of 
 the friendships local, national and inter- 
 national, which it has created and cemented? 
 
 UBRARY U. or I. linSANA CJL^PJIIGIJ
 
 CHAPTER V 
 
 BANKING EXPEDIENCE 
 
 IN 
 
 SCOTLAND AND CANADA 
 
 "To business that we love we rise betime 
 And go to't with delight." 
 
 Shakespeare 
 
 i^^ii^0^]^^^ "> ^^ ^ believe, one of the 
 ^gg^i^g^g^ greatest blessings of this life is to 
 T S®? have a congenial occupation, I 
 i. WS. was singularly fortunate when I 
 chose Banking as a profession. 
 From boyhood there has existed 
 for me a kind of romantic glamour over that 
 business. After almost half a century in it I can 
 say that I have never had an uninteresting or 
 irksome day inside a Bank. I have had many 
 anxious, overworked and worrying days, but 
 never one when I watched the clock and longed 
 for the day to pass. I left the business once for 
 
 S2>
 
 5 4 Sketches and Speeches 
 
 a few months, and all the days of that period 
 were long, dreary and uninteresting. I was as 
 much out of my element as a fish out of water, 
 and like the fish I think I should have died had 
 I not returned to my chosen calling. This pre- 
 dilection for Banking probably came from the 
 fact that my most admired uncle was a suc- 
 cessful Scotch Banker in England, and from 
 the further fact that my older brother, Jim, 
 was meeting with success in that calling. As a 
 small boy I had looked up to his position in a 
 Bank as one greatly to be desired and distinct- 
 ly preferable to any other opening to be had in 
 old St. Andrews. Afterward, when Jim had 
 gone to America, his letters home indicating 
 his advancing career established in my mind 
 an ardent desire to follow in his steps. There- 
 fore when the time came for my Sunday- 
 School teacher — John Nicholson — to give 
 me the preference over other applicants and 
 take me into the Clydesdale Bank, of which 
 he was the Agent at St. Andrews, I was a 
 very happy lad. Impatiently I counted the 
 days which intervened before my acutal en- 
 trance like a child looking forward to Christ- 
 mas. I was fifteen and a half years old and was 
 in the highest classes at Madras College. My 
 father would have had me go to the Univer-
 
 Banking in Scotland and Canada 5 5 
 
 sity, and my English teacher, Dr. Armstrong, 
 also was flattering enough to urge me to do so, 
 and to adopt literature as my life work, but I 
 have never regretted my choice of Banking. It 
 is futile, but interesting, to speculate on the 
 different life the other choice would have 
 meant. There might have been the worries and 
 pursuits of a parson, or the London garret, the 
 struggle and possibly the final fame, or more 
 probably the flat failure of a writer. In any 
 case, I am sure, I have had a happier life in 
 Banking, and that is something. 
 
 My first day in a Bank stands out clearly in 
 memory over a lapse of nearly half a century. 
 I see the high mahogany desk and long-legged 
 stool that I took proud possession of — the 
 same desk and stool doubtless which some 
 other Scotch lad occupies today for things do 
 not change in St. Andrews. The branches of 
 Scottish banks sent weekly, monthly and 
 quarterly returns to Head Office, which were 
 practically transcriptions of the branch's books. 
 I have often wondered since what on earth the 
 Head Office did with some of them. The first 
 task set me by the accountant, Mr. Geo. 
 Smith, was to sum up in pencil the quarterly 
 return of the Individual Ledger. This involved 
 the adding of some fifty or sixty columns of
 
 5 6 Sketches and Speeches 
 
 figures, about two feet in length, and stated, of 
 course, in Sterling. As I had led my school in 
 Arithmetic no trial task could have suited me 
 better. I added them up rapidly, and only 
 once. When I returned them to Mr. Smith he 
 first glanced at the clock — he was evidently 
 timing me — and expressed surprise at my 
 speed. "Now," he said, taking down the grand 
 totals, "if you have made no mistakes this 
 column subtracted from that column will 
 equal this other column subtracted from that 
 other column." They balanced to a penny. Mr. 
 Smith said nothing to me, but taking the re- 
 turn with him he went into the Manager's 
 room, closing the door behind him. I do not 
 know what he said to Mr. Nicholson, but I 
 have no doubt it was complimentary to my- 
 self or Madras College, or possibly to both. 
 Thus happily began my work as junior clerk in 
 that office. My salary was $4.00 per month the 
 first year, |6.oo the second and $8.00 the third 
 year. At the end of the three years, however, I 
 was an experienced Bank clerk capable of fill- 
 ing any clerical position in a Bank. 
 
 Mr. Nicholson was also Agent for several 
 Fire Insurance Companies, and was several 
 times Assignee in Bankruptcy in commercial 
 failures. I helped him in these personal affairs
 
 Banking in Scotland and Canada 5 7 
 
 without any idea of pecuniary reward and was 
 glad to get the experience. I am not boasting 
 of this. I am simply recording the spirit which 
 then pervaded such matters. No Bank clerk of 
 that day would have felt or acted differently. 
 Mr. John Nicholson was a Christian business 
 man of the highest type, who left an impres- 
 sion on my youthful mind that is still fresh 
 and helpful. He afterwards filled a national 
 position in Scottish Banking and Church Life, 
 and died a few years ago, known and highly 
 respected by the whole country. Perhaps noth- 
 ing done in the Clydesdale Bank affords a 
 stronger contrast to present-day ideas than the 
 method of "Clearing" with the other Banks in 
 the City. As Scottish currency consists of notes 
 issued by the Banks, the clearings included cash 
 as well as checks. Part of the junior's duties, 
 therefore, was to take the checks and notes of 
 other Banks to their counters for redemption by 
 draft on their Head Office. In so doing we did 
 not even use a hand bag, but carried the money 
 openly (and rather proudly, for it lent an air of 
 importance) in bundles in our hands. Such was 
 the feeling of security that the idea that the 
 boys might be held up and robbed never en- 
 tered anyone's head. The same methods are 
 probably still in use in St. Andrews.
 
 5 8 Sketches and Speeches 
 
 Promotion in a Scotch Bank is a very slow 
 process, and at the end of my apprenticeship 
 in the Clydesdale I was eager to follow my 
 brother to Canada. He told me to write a 
 letter of application to the Bank of Nova 
 Scotia, Halifax, with which Bank he was then 
 connected, and to get a letter of recommenda- 
 tion from my employer. This was where my 
 friend, Mr. Nicholson, got even with me for 
 the work I had done for him personally, for he 
 wrote such a strong letter that the General 
 ManageroftheBank of NovaScotia authorized 
 my brother to cable for me at once. That cable 
 was Scotch, for it wasted neither words nor 
 money. It consisted of the one word "Come.'' 
 
 Again the romantic glamour of Banking 
 filled my mind, and after a short period of pay- 
 ing farewell visits to relatives, and of prepara- 
 tion in the way of supplies of clothing, etc., I 
 was ready to obey the summons. 
 
 To show the kind of mother I had let me say 
 that, although a busy woman, she knitted one 
 whole sock every weekday during that period 
 of preparation, and I left with fine woolen 
 socks enough to keep my feet cozy in cold 
 Canada for years to come. The wrench of part- 
 ing with that mother who, motherlike, felt it 
 the more, because of the trouble she had had in
 
 Banking in Scotland and Canada 5 9 
 
 pulling me through a delicate childhood, is as 
 fresh in my recollection as if it had occurred 
 yesterday. Although no longer delicate, I wept 
 in her arms and was not ashamed. After a 
 quieter good-bye to my dear father, who came 
 to the railway junction with me, I took pas- 
 sage from Glasgow in March, 1880, and after 
 a stormy voyage of fourteen days I arrived in 
 Halifax. As a side light on the circumscribed 
 life of a Scotch lad in those days I may men- 
 tion, in passing, that although beautiful Edin- 
 burgh was only forty-four miles distant from 
 St. Andrews, I had never seen it until I passed 
 through it on my way to Glasgow to sail for 
 Canada. On my arrival in Halifax I was for- 
 tunate in having a home to go to as it was 
 arranged that I should live with my brother's 
 mother-in-law, Mrs. Murray. The office of the 
 Bank having a staff of about twenty seemed 
 imposing to me, coming from an office with a 
 staff" of three. I went to work with eager enjoy- 
 ment, my first job being at the correspondence 
 desk. I liked Halifax and its people, and look 
 back upon my stay there with pleasure. 
 
 My brother Jim was then Agent of the Bank 
 at Woodstock, New Brunswick. Before I had 
 been long in Halifax he found occasion to be 
 there, and entering the Bank he walked all
 
 6o Sketches and Speeches 
 
 around me before I recognized him. He, of 
 course, knew where to look for me. We had 
 not seen each other for ten years, and it was 
 a happy meeting. 
 
 Soon afterwards he had me sent to Wood- 
 stock to relieve his teller, and I had my first 
 meeting with his good wife and family. Wood- 
 stock was only a little backwoods town. It had 
 no Bank until Jim opened the branch there. 
 The branch did well from the start. Jim was 
 very popular and quite contented. He after- 
 wards became one of the leading Bankers in 
 America, and accumulated a fortune; but I 
 doubt if he was ever happier in his whole ca- 
 reer than he was in Woodstock. 
 
 From Woodstock I was sent to St. John, 
 New Brunswick, to relieve the staff there 
 during the summer holidays. After that I was 
 recalled to Halifax and given charge of the 
 General Ledgers. This was considered the 
 hardest clerical job in the Bank. As illustrating 
 how a well-managed Bank grows, I may say 
 that the resources of the Bank of Nova Scotia 
 as I recall putting them down on the balance 
 sheet then were about $4,000,000. Now they 
 are $224,000,000. It was then a local institu- 
 tion having a few branches in the Maritime 
 Provinces. It is now one of the largest Cana-
 
 Banking in Scot/and and Canada 6 1 
 
 dian Banks having branches from the Atlantic 
 to the Pacific. 
 
 When I had been in the Bank about a year 
 it was decided to open a branch at Winnipeg, 
 Manitoba — then a booming town of the new 
 Northwest — and I was sent there as ac- 
 countant. I took with me $40,000 in cash, and 
 was seven days on the way, stopping a night 
 at Chicago and two nights at Minneapolis. 
 The cash was in a leather bag, and as I never 
 parted with it for a moment day or night it 
 became a great deal of a burden during that 
 long journey. By reason of missing connections 
 at Minneapolis I had to stay there over Sunday, 
 and was two days later in reaching Winnipeg 
 than I should have been. I resented the burden 
 of carrying the cash, and so I forebore to tele- 
 graph the General Manager from Minneapolis. 
 I thought I would give him a taste of the 
 anxiety about that $40,000 which he had laid 
 upon me, and I did, for when I reached Win- 
 nipeg the Manager, who had preceded me, 
 showed me several telegrams from the General 
 Manager inquiring if I had arrived ''with the 
 remittance." 
 
 We had difficulty in securing an office in 
 Winnipeg, but as soon as I arrived with the 
 money we started business. For a few days.
 
 6 2 sketches and Speeches 
 
 while a corner of an office was being prepared 
 for us, I paid checks out of the leather bag 
 attached to my person. After a while we se- 
 cured a fair office, but the security of the safe 
 being doubtful, it became my duty to sleep in 
 front of it on a shake-down and armed with 
 a revolver. Our books from Head Office were 
 expected daily, but owing to floods they did 
 not arrive for six weeks, during which period I 
 kept the records of the Bank on large sheets of 
 Manila wrapping paper. When the books came 
 I had to copy the six weeks' work into them 
 besides keeping up the daily records. This 
 kept me at work every night until midnight for 
 a while, and then I would prepare my bed in 
 front of the safe and sleep until seven a. m., 
 when I had to get out to make room for the 
 scrubwoman. This was rather strenuous work, 
 but I did not object. It was tinged with ad- 
 venture and romance to my mind. Was I not a 
 tenderfoot in the great Northwest, roughing 
 it like a man, and I so recently a boy in the old 
 Bank in the Ancient City by the Sea? 
 
 The Manager was an Englishman — a fine 
 fellow — but not very shrewd. As an example 
 of the difference between an Englishman's 
 point of view and that of a Scotchman, take 
 this: A wholesale liquor dealer had opened
 
 Banking in Scotland and Canada 6 3 
 
 an account with the Bank, and shortly after- 
 ward I was at the Manager's house for dinner. 
 After dining he said, "Come up stairs and see 
 
 the nice present Mr sent me." 
 
 Following him to an upstairs room he showed 
 me fourteen demijohns of various liquors all 
 standing in an imposing row. I said nothing, 
 but I must have looked something for the 
 Manager said, "Now, Scotty, what are you 
 thinking? Come on out with it." "Well," I re- 
 plied, "I was just thinking that these liquors 
 have cost you nothing and I hope they will 
 cost the Bank nothing." He roared with laugh- 
 ter, evidently thinking it a great joke. Never- 
 theless, the liquor dealer made a disgraceful 
 failure within a few months, and these liquors 
 cost the Bank exactly one thousand dollars a 
 demijohn, or fourteen thousand dollars. 
 
 The year I spent in Winnipeg was one of the 
 happiest and most eventful in my life, for it 
 was there that I met and courted my wife. I 
 fell half in love with her by looking at her in 
 church, and the first time I met her and walked 
 home with her, I fell the rest of the way. She 
 was then supposed (erroneously, as I after- 
 ward learned) to be engaged to a young pro- 
 fessor in Manitoba College — a man of fine 
 mind and character whom I greatly admired.
 
 64 sketches and Speeches 
 
 Nevertheless, on my way home that first night 
 I definitely decided that I would marry her if I 
 could. Unfortunately I soon found that I had 
 not made any such impression on her as she 
 had on me! But earnestness and persistence 
 count a lot in such matters, and when I left 
 Winnipeg the following Spring, we were en- 
 gaged. 
 
 On my return to Halifax I was made clerk to 
 the General Manager, a Scotchman of cranky 
 disposition, but great ability, from whom I 
 learned much. The following winter the Bank 
 purchased the Union Bank of Prince Edward 
 Island, and I was sent to Charlottetown to 
 break the staff into our ways. After a pleasant 
 sojourn of three months there I was recalled to 
 Halifax. The return journey gave me another 
 touch of adventure, for I crossed from Cape 
 Traverse to Cape Tormentine on broken ice 
 like Eliza in Uncle Tom's Cabin. Harnessed to 
 a boat, carrying the mails, the guides and I had 
 four hours' hard work alternately pulling the 
 boat over ice and rowing it in open water. On 
 broken blocks of ice our feet were often under 
 water, and when any one of us sank as deep as 
 the knees he saved himself by falling into the 
 boat while the others dragged it onwards. From 
 Cape Tormentine, without changing my wet
 
 Banking in Scotland and Canada 6 5 
 
 clothes, I drove to Amherst, a distance of forty 
 miles in a sleigh along icy roads, and in a 
 wintry storm, arriving about one o'clock Sun- 
 day morning. But I was young then, so I arose 
 for breakfast none the worse, and went to the 
 Presbyterian Church where I heard an excel- 
 lent sermon. 
 
 Arrived in Halifax I resumed my duties as 
 General Manager's clerk, and the following 
 summer, at the age of twenty-two, I got my 
 first chance at the Management of a Branch, 
 and the responsibility of loaning money. The 
 Manager of the little Branch at Digby, N. S., 
 being sick, I was sent to relieve him, and was 
 there for two months. On taking over the dis- 
 counted notes I put aside about a dozen, and 
 when I had finished the task the following 
 conversation took place between myself — 
 the smart youngster from the Head Office — 
 and Mr. Churchill, the shrewd old country- 
 banker who had been at it for thirty years in 
 Digby. 
 
 The youngster: "The bills balance, Mr. 
 Churchill, but I think that the endorsements 
 on these notes are forgeries. The maker of the 
 note forged the endorser's name in each case." 
 
 Mr. Churchill (taking the notes in question 
 and calmly examining them): "Well, young
 
 6 6 Sketches and Speeches 
 
 man, you are pretty smart. You did not pick 
 out all the forgeries in the box, but all of those 
 you did pick out are forgeries right enough." 
 
 'The youngster, \r\ astonishment: "Well, why 
 don't you have the forgers arrested? 
 
 Mr. Churchill: "Arrested? Not on your life! 
 These notes are the best loans in the Bank. The 
 makers know they are forgeries. I know they 
 are forgeries, but the makers don't know that 
 I know they are forgeries. If you are here when 
 these notes mature you will find every one of 
 them will be promptly paid. The makers are 
 farmer-fishermen. They are not running away, 
 and they will take good care that the endorser 
 does not get a notice of the non-payment of 
 the note." 
 
 I was there long enough to notice that these 
 notes were promptly paid — generally a day 
 or two before maturity! 
 
 Upon my return to Halifax I thought it my 
 duty to report this kind of business to the Gen- 
 eral Manager and to ask if I should write Mr. 
 Churchill and put a stop to it. "No, No," said 
 the General Manager laughing, "let him go on 
 discounting his forgeries — he has made no 
 loss in many years." 
 
 Shortly after this I was sent to Amherst to 
 take temporary charge so that Mr. H. C. Mc-
 
 Banking in Scotland and Canada 6 7 
 
 Leod, the Manager, might proceed to Winni- 
 peg to take the management there. Amherst 
 was a more important Branch. The first day I 
 was in charge, I remember, I discounted over 
 one hundred notes. I was there all winter. My 
 clerking days were now over, and I was slated 
 for the Management of the next vacant Branch. 
 This turned out to be Fredericton, the capital 
 of New Brunswick, a pretty little city on the 
 St. John River, containing a House of Parlia- 
 ment, a fine Cathedral, and pleasant society 
 but little business. 
 
 Feeling now settled, I was in a position to 
 marry — or I thought I was. Looking back I 
 now marvel at the reckless courage I displayed 
 in assuming the responsibilities of marriage on 
 the salary I was earning. But Agnes Kerr, the 
 girl in Winnipeg, had more courage, so I 
 journeyed there once more and we were mar- 
 ried on June 9, 1885. We took a cottage in 
 Fredericton and proceeded to furnish it by 
 degrees. When my brother Jim, then Inspector 
 of the Bank, later visited Fredericton officially, 
 our cottage was all furnished except the parlor 
 which contained nothing but a Brussels carpet. 
 On entering, Jim quickly took in the situation, 
 and after kissing the bride, he stepped into the 
 parlor and deposited his two hundred and fifty
 
 6 8 Sketches and Speeches 
 
 pounds squarely on the said carpet by sitting 
 down on it. 
 
 What happy days those were! We have fur- 
 nished various houses since, but all of them 
 combined have not meant as much, or yielded 
 as great a thrill, as the building of that first 
 little nest. By reason of many wedding presents 
 young people nowadays often start with more 
 things than they can use but, in my opinion, 
 they miss much by having no experience like 
 ours. 
 
 Marriage, no matter how happily mated the 
 pair may be, soon develops its responsibilities. 
 Within a year my wife had been literally with- 
 in the valley of the shadow in giving birth to 
 our oldest son, Robert. Thanks to a fine con- 
 stitution she recovered, and during the five 
 years we lived in Fredericton our two daugh- 
 ters, Marion and Ethel, were added to our 
 happiness, and they have continued to add to 
 it ever since. Those were five happy years. 
 
 We had many friends, and when we came 
 to the hour of leaving for the great City of 
 Minneapolis, it was with tears and tender 
 hearts that we said our good-byes. There was 
 a regiment of regular Canadian soldiers at 
 Fredericton, and I was an honorary member of 
 the ofiicers' mess. On the eve of my departure
 
 Banking in Scotland and Canada 6 9 
 
 they honored me with a fine dinner, at which 
 many kind speeches were made, while the mili- 
 tary band discoursed music outside. I have 
 never felt quite so important since! 
 
 Promotion, however, was slow in a Cana- 
 dian Bank, and with my growing family I was 
 forced to look to a wider field. Through my 
 brother Jim, who was then Cashier of the 
 Northwestern National Bank, Minneapolis, I 
 secured a job with the Pillsbury-Washburn 
 Flour Mills Co., there. I did not intend to give 
 up Banking and took this position only as a 
 stepping stone to an opening in an American 
 Bank. Selling our furniture, we set out for 
 Minneapolis with faith and courage, but with 
 nothing else.
 
 CHAPTER VI 
 
 BANKING EXPEHIENCE 
 IN TJ^E U. S. A. 
 
 " Forward, as occasion offers — 
 Be satisfied with success in even 
 the smallest matter, and think that even 
 such a result is no trifle." 
 
 Marcus Aurelius 
 
 ^m'^^N MY new job in Minneapolis, I 
 S? ^^^ ^"^y ^ high-grade clerk in a 
 M business which did not interest 
 
 ^m "^ ^p me, and the faith and courage 
 ^diSlflS referred to in the last chapter 
 were much m demand durmg 
 the next four months. At the end of that time I 
 was lucky enough to secure the position of 
 Assistant Cashier of the American Exchange 
 Bank, Duluth, and was once more happy in 
 my work. 
 
 As an example of how a word may change 
 the current of one's life, I may mention that 
 
 71
 
 7 2 sketches and Speeches 
 
 when I applied for this position I was asked to 
 visit Duluth so that they might look me over. 
 I had heard that several others had answered 
 the same request, but none of them had secured 
 the job. The Bank authorities were evidently 
 hard to please, so I combed the whiskers which 
 I then sported and tried to look as old as pos- 
 sible. After taking me before the directors Mr. 
 MacFarlane, a fine fellow-countryman from 
 Stornoway, proceeded to turn me down as gent- 
 ly as his kind heart prompted him. He said I 
 was all right in every way but one, and that 
 I was not responsible for that one defect — I 
 was too young. "How old," I asked, "do you 
 think the man you want should be?" "Oh, at 
 least fifty," he replied. "Huh!" said I, "he 
 would not be worth a damn. If he is looking 
 for such a job as Assistant Cashier of this 
 little Bank at fifty it will only be because he 
 has been a failure up to that time." "Well, 
 well," Mr. MacFarlane replied, "take a look 
 around the town and come in and say good- 
 bye before you go home." 
 
 I left his office with keen disappointment, 
 but returned in the afternoon as instructed. 
 On meeting Mr. MacFarlane again he smiled 
 genially and said, "Young man, you used rath- 
 er strong language when you were here." "Yes,"
 
 Banking Experience in U. S, A. 73 
 
 I said, "I seldom use such language, but I 
 meant it that time.'' 
 
 "Well," he said "after you left I got think- 
 ing it over and I saw you were right, so I sent 
 for the directors, quoted to them your lan- 
 guage, and they saw you were right. So we have 
 decided that you are the man we want." 
 
 I have seldom been more elated. I went out 
 rejoicing and sent my wife a telegram the 
 receipt of which caused her to dance a jig with 
 the children. 
 
 After a year in Duluth, where our son 
 David R. Jr. was born, my brother was called 
 to Chicago and I was appointed to succeed him 
 as Cashier of the Northwestern National Bank 
 of Minneapolis. The responsibilities of this 
 position were greater than any I had before 
 assumed, but I found that the principles of 
 correct banking are practically the same every- 
 where, and the amount involved makes little 
 difference. I now worried no more over a doubt- 
 ful loan of 1 1 00,000 than I had worried over 
 one of $500.00 in Fredericton. During the four 
 years I occupied this position the outstanding 
 financial event was the panic of 1893. The 
 Bank, however, as might be expected after 
 Jim's management was in a thoroughly sound 
 condition, and weathered the storm like a good
 
 74 Sketches and Speeches 
 
 ship at sea. Toward the end of my stay, the 
 Bryan Free Silver craze got under way, and I 
 attracted some notice by taking up the cause 
 of sound money with tongue and pen. Other- 
 wise my business experience in Minneapolis 
 wasuneventful. I gained, however, in knowledge 
 of the business of the country and in acquaint- 
 ance with some of its big business men. When, 
 therefore, an offer came from the Union 
 National Bank of Chicago to take its Vice- 
 Presidency and Management (the President 
 being inactive) I felt that I could qualify, 
 especially as the offer doubled my salary. 
 
 We left Minneapolis with regret, impelled 
 only by the greater remuneration and wider 
 field which Chicago offered. 
 
 It was from Minneapolis that I first returned 
 home to Scotland. My father desired a family 
 reunion, and all of us, with all of our children, 
 met again in the Ancient City. A family photo 
 of our parents, their children, their children-in- 
 law and their children's children showed a 
 group of thirty-eight. I played again on the 
 old links, swam again in the Witch Lake, met 
 again my former schoolmates, and so re-visited 
 the loved scenes of my boyhood. Best of all, I 
 was once again with my beloved parents, my 
 three dear aunts, and many others of my kith
 
 Banking Experience in U. S.A. 75 
 
 and kin. Of course they all admired my wife 
 and bairns, and I was a proud and happy man. 
 
 The Union National Bank of Chicago had 
 experienced large losses during the panic and 
 was not in good standing, but I satisfied myself 
 before agreeing to take the management that, 
 while the surplus was gone, the capital was 
 still unimpaired. Jim was ill at the time and 
 advised against it, but I thought I heard 
 opportunity calling. Two years later, acting for 
 my Bank, I bought all of the stock of the Hide 
 and Leather National Bank, a small but clean 
 institution, and merged it, overnight, with the 
 Union National. In connection with this pur- 
 chase Mr. Ellsworth, the inactive President, 
 kindly retired, I was elected President, and Mr. 
 John McLaren, formerly President of theHide& 
 Leather, became Vice-President. I was thus, at 
 the age of thirty-six. President of a Bank with 
 $2,000,000 capital but a run-down business. 
 When I took hold in 1896 the deposits had de- 
 creased to $4,000,000. During the five years of 
 my incumbency they increased to $15,000,000. 
 
 One of the happy memories of my connec- 
 tion with the Union National is my close asso- 
 ciation with its Cashier, August Blum, a 
 courteous and learned gentleman, an upright 
 business man, a good banker, a ready wit and
 
 7 6 Sketches and Speeches 
 
 a genial comrade. He is master of many lan- 
 guages, is familiar with the literature of many 
 countries, and has many friends among whom 
 I still count myself, although as he has retired 
 to spend the evening of his days in California, 
 I now seldom see him. 
 
 In the year 1899 we built and occupied 
 our present home in Evanston, and in March 
 1900 our youngest son, James Russell, was born 
 in it. Eight years had passed since David's 
 birth, and we were all very happy to have a 
 baby in the house again. 
 
 In the summer of 1900 my brother Jim and I 
 again visited Scotland to see our parents who, 
 we feared, were failing in health. We were al- 
 ways glad that we went, for they both passed 
 away before the year closed. They had more 
 than half a century of life together, and in their 
 death they were not divided, for they died only 
 four weeks apart. If, as a family, we have done 
 fairly well, we owe it chiefly to the fact that 
 we had parents who taught us by example and 
 precept that integrity of character is at once 
 more important than success, and the main 
 source of success. Father, although somewhat 
 easy going, had absolute honesty, good judg- 
 ment, patience and common sense, while 
 mother, in addition toother fine qualities, pos-
 
 Banking Experience in U.S.A. 77 
 
 sessed energy and ambition in abundance — 
 especially for the success of her children. Their 
 union produced these qualities in varied com- 
 binations in their children, but I shall not here 
 undertake to apportion them. Perhaps each of 
 us thinks he has them all! 
 
 On the return trip from Scotland Jim and I 
 drew up an agreement of absorption of my 
 Bank by his. Soon afterwards this was con- 
 summated, and I became First Vice-President 
 of the First National Bank of Chicago of which 
 my brother was President. I occupied this 
 position for six years, and during that period 
 this great Bank took three important forward 
 steps. It absorbed the Metropolitan National 
 Bank, with its deposits of $22,000,000, it start- 
 ed as an affiliated and jointly-owned Bank, the 
 First Trust and Savings Bank, which has been 
 a very great success, and it built its present 
 building at the corner of Dearborn and Mon- 
 roe Streets. 
 
 As an example of how well-managed institu- 
 tions grow in Chicago, I may say that Jim and 
 I felt we were building for fifty years' growth, 
 but now, after twenty years, the joint Banks 
 have acquired the large Fort Dearborn Bank 
 Building on their west side and are building an 
 addition thereto because they need the space.
 
 7 8 Sketches and Speeches 
 
 About the close of the year 1906 a group of 
 business friends suggested to me the starting of 
 a new National Bank. From boyhood I had 
 entertained an ambition to be the founder of a 
 Bank, and as the proposal was based on terms 
 that made it possible for me to become a con- 
 siderable stockholder in the new institution, I 
 agreed to it. I resigned from the First National 
 and left December 31, 1906, without having 
 made a move towards starting the new Bank, 
 and on February 5, 1907, the National City 
 Bank of Chicago opened for business with 
 $1,500,000 capital paid up, and myself as 
 President. The deposits taken in the first day 
 were over $2,000,000. This was quick work and 
 a good start. At this time I was fortunate in 
 securing the services as Cashier of Mr. H. E. 
 Otte, who had been with me in the old Union 
 National and First National. He set up the 
 machine, arranging all the details of books, 
 forms, etc., selecting a staff of about twenty 
 clerks and instructing them in their duties. The 
 result was, that as many remarked, the mo- 
 ment the doors were opened, the Bank began 
 running as smoothly as if it had been going for 
 years. Mr. Otte has been at my right hand 
 ever since. It was not long before he was made 
 Vice-President, and in January, 1924, he be-
 
 Banking Experience in U. S.A. 79 
 
 came President, while I became Chairman of 
 the Board. He is a man of the highest charac- 
 ter and a thorough Banker familiar with every 
 detail of the business, and possessed of shrewd 
 judgment in the loaning of money. He has 
 been a great support to me, and I am glad to 
 know that while faithfully serving the Bank he 
 has himself prospered. 
 
 The new Bank grew rapidly at first, and 
 steadily later, until it had deposits of $35,000,- 
 000, capital of $2,000,000 and surplus earnings 
 of $1,500,000. It paid dividends every year, 
 except the first, at the rate of six per cent, 
 later eight per cent, and the last three years 
 ten per cent per annum. These results compare 
 favorably with the history of any National 
 Bank in Chicago of similar age, and I believe 
 I may claim for the Bank with which I have 
 been most closely identified, a fair measure 
 of success. During the eighteen years of the 
 Bank's existence I have been very happy in my 
 business because I always had the full con- 
 fidence of the Board, and the loyal support 
 of the officers under me. Among the officers 
 (now officers of the Republic) the following 
 were with me when we started theNationalCity 
 Bank: F. A. Crandall, Vice-President, R. B. 
 Fuessle, Vice-President, T. R. Thorsen, Asst.
 
 8 o Sketches and Speeches 
 
 Vice President, and W. G. McLaury, Vice- 
 President, has been nearly as long. For all of 
 these men I have the highest regard, and they 
 have all contributed their full share to the suc- 
 cess of the Bank. 
 
 All the expenses of banking, including taxes, 
 have materially increased in this country dur- 
 ing and since the Great War, while the income, 
 composed chiefly of the discount on loans, has 
 remained the same. It is, therefore, now neces- 
 sary to do business on a large scale, and there 
 have consequently been many amalgamations 
 of banks In recent years. For this reason the 
 National City Bank and the National Bank of 
 the Republic have lately been consolidated. 
 The Republic being the older and larger bank 
 and a combination of the names being too long 
 for practical purposes, I reluctantly consented 
 to the disappearance of our name. In all other 
 respects the consolidation was on an equal 
 basis. 
 
 Our office is a handsome one. In a fine loca- 
 tion, and there is every reason to expect a suc- 
 cessful career for the combined banks. The 
 Chairman of the Board is Mr. John A. Lynch, 
 a courteous and experienced Banker, my senior 
 in years. He, and I as Vice-Chairman, hope to 
 take life somewhat easier In future. The
 
 Banking Experience in U. S. A. 8 1 
 
 younger and more active executives are Mr. 
 George Woodruff, also Vice-Chairman, a very 
 energetic and successful Banker, and Mr. Otte 
 before alluded to, as President. Under them 
 the Bank is well manned in all its depart- 
 ments. 
 
 Banking in the U. S. A. is done largely on 
 single name paper, the credits being based on 
 the statements of the borrowers. Practically we 
 become temporary partners in every kind of 
 business. It will be admitted that the business 
 is, therefore, varied and interesting — never 
 monotonous. Within one hour a city banker 
 may discuss half a dozen different kinds of 
 business, and decide whether to loan large 
 amounts in each case. Thus time passes quick- 
 ly in a busy Bank, and a Banker's years are 
 like the years of the wicked for they are 
 ''shortened.'' 
 
 I suppose every business man thinks he has 
 more than his share of worry and anxiety. 
 There is at least this great difference between 
 Bankers and other business men. Others, as a 
 rule, have only their own line to worry about, 
 whether it be steel, coal, grain or what not, 
 whereas the Banker is vitally interested in all 
 lines and has occasion for anxiety if there is 
 trouble in any business anywhere.
 
 8 2 sketches and Speeches 
 
 From this sketch it will be noticed that I 
 have in my time served eight banks. I hope I 
 served them well, but when I look at the recent 
 statements of some of them, and observe how 
 well they succeeded after I left them, I am not 
 inclined to boast.
 
 CHAPTER VII 
 
 ST, ANDREWS, NEW 
 BKUNSWICK 
 
 "How happy could I be with either 
 Were t'other dear charmer away." 
 Gay 
 
 {W^ii^0^i^^}^^^^ ^^ another St. Andrews, 
 ^gg^3%2i^^s less famous, equally delightful 
 
 'Hr^ ^^ ^s ^ Summer Resort, and even 
 
 ^^ ^p more beautifully situated than 
 
 ^B^^^^SfC^^J its ancient Scottish namesake. 
 It is a quaint village of less 
 than a thousand inhabitants, on the East 
 Coast of New Brunswick and near the River 
 St. Croix which is the boundary between the 
 State of Maine and Canada. It was settled by 
 some of the Royalists who had to flee from the 
 New England States at the outbreak of the 
 American Revolution. At one time it attained 
 some importance as a sea port, but that day 
 
 83
 
 84 sketches and Speeches 
 
 passed and now its chief support is drawn from 
 summer visitors, about four hundred of whom 
 from Upper Canada and the United States 
 spend July and August there. An excellent 
 hotel — the Algonquin — owned by the Ca- 
 nadian Pacific Railway cares for most of them, 
 and the others occupy their own, or rent 
 cottages. The place is not well known as yet, 
 but I notice that when a new visitor, or a new 
 family, has discovered it and spent a month 
 there they seldom fail to return again and again. 
 
 Its golf course, close to the seashore, while 
 good, is not equal to that of the ancient city, 
 but the surrounding scenery is more beautiful. 
 Indeed there are some "tees" on the course 
 that for situation and scenery could scarcely 
 be surpassed anywhere in the world. 
 
 While living in Fredericton — about sixty 
 miles distant — we spent a fortnight's holidays 
 at St. Andrews nearly forty years ago, and 
 after we had moved to Minneapolis and subse- 
 quently to Chicago, we yielded to the lure of 
 the place and returned to it again and again. 
 About fifteen years ago we bought and re- 
 modeled a cottage, started a garden, and made 
 it our regular summer home. We think there is 
 nothing to beat it for that purpose on this con- 
 tinent.
 
 Si, Andrew fy New Brunswick 8 5 
 
 The town of St. Stephen is about twenty 
 miles distant and the drive there along the 
 river bank reveals scenery of rare beauty and 
 charm. 
 
 In addition to golf there is good trout fish- 
 ing within reach, and plenty of sailing and deep 
 sea fishing for those who enjoy them. 
 
 Last summer the Presbyterian Kirk cele- 
 brated its hundredth anniversary with appro- 
 priate and dignified services. 
 
 We have a different set of friends there 
 whom it is a delight to meet year after year. I 
 and my family love it because of the memories 
 of happy days spent on the links, picnicking 
 in the pine woods, sailing on the bay, or mo- 
 toring through the lovely surrounding coun- 
 try. 
 
 * * * 
 
 These sketches are, of course, a mere outline 
 of my history. I have engaged in numerous 
 activities, both public and private, and have 
 had many experiences both pleasant and un- 
 pleasant which are not recorded here. Were I 
 to attempt to write my "life" I would be met 
 by the difficulty which Mark Twain tried to 
 avoid by making his autobiography a posthu- 
 mous one. But he found he could not avoid it, 
 for he says a man "cannot be straitly and
 
 8 6 Sketches and Speeches 
 
 unqualifiedly frank either in the grave or out 
 of it." 
 
 My life as a whole has been about an aver- 
 age one and I view it with mixed feelings. I 
 have had many blessings and also my share of 
 cares, troubles and disappointments. If in 
 some lines I can claim a fair measure of suc- 
 cess, I am conscious of such failure in other 
 directions that the net result is an inclination 
 both to thankfulness and humility. In this I 
 fancy I am like many others.
 
 NOTE 
 
 I HAVE made many speeches of which 
 thefollowing are fair samples. The 
 first of them ''Grip and Grit"" was 
 readfro?n the manuscript, The second 
 ''The New Federal Reserve Banks'^ was 
 never written; what is here pri?tted is 
 a stenographic report of an extempore 
 speech,Theother manuscripts werewr it- 
 ten merely aspreparation. The speeches 
 actually delivered^ while not committed 
 to memory^ closely followed the manu- 
 scripts with the addition of stories a?id 
 a little humor, 
 
 D. R. F.
 
 SPEECHES I 
 
 GKIP AND GKIT 
 
 Commencement Address 
 
 Lake Forest University, Lake Forest, Illinois 
 
 June 12, 1901 
 
 Mr. President^ Ladies and Gentlemen: 
 
 'LLOW me to express to you my 
 keen appreciation of the honor 
 your President did me when he 
 invited me to take part in the 
 First Commencement Exercises 
 of the Twentieth Century at 
 Lake Forest University. 
 
 I am sure that the century opens auspicious- 
 ly for this honored seat of learning, and I hope 
 that whatever changes may take place the 
 good record of the past will be excelled in the 
 years to come. 
 
 I suppose there is an atmosphere about uni- 
 versity life different from what we business 
 men breathe. You have mathematics instead
 
 90 Sketches and Speeches 
 
 of manufactures, philosophy instead of finance. 
 Dead languages give you as much trouble as 
 dead assets give us. Your quotations are from 
 the classics — not from the markets. Your 
 speculations are only scientific; your notes are 
 merely footnotes and your only checks are the 
 college rules. Bookkeeping is not unknown 
 among you, for you sometimes borrow and for- 
 get to return, but, generally speaking, I sup- 
 pose there is little in common between college 
 and commercial life. For that very reason I hope 
 it may not be amiss if I turn your thoughts to- 
 day away from the academic shades of Lake 
 Forest towards the turmoil of busy Chicago. 
 
 The century opens brightly for our country. 
 Its first year will probably be distinguished by 
 two achievements of world-wide significance. 
 In volume of exports we shall probably show 
 for the first time a decided lead to Great Brit- 
 ain — so long first in the commercial race of 
 the nations. Last year we closed the old cen- 
 tury just about even with her. This year we 
 expect to lead her by a substantial sum. We 
 shall also probably take the lead this year, for 
 the first time, as the greatest gold-producing 
 nation. 
 
 Something like regeneration has taken place 
 in our business conditions during the past five
 
 Grip and Grit 9 1 
 
 years. The United States has become a world 
 power — not only to be reckoned with in 
 world questions of diplomacy, but in the inter- 
 national struggle for commercial and financial 
 supremacy. 
 
 As late as 1893 we imported more merchan- 
 dise than we exported. By 1896 exports exceed- 
 ed imports by only $102,000,000; but in 1897 
 we almost trebled these figures, and in 1898 
 we doubled that again. For the past three years 
 the balance of trade in our favor has been 
 about $600,000,000 annually. We cannot col- 
 lect the total in gold, for there would not be 
 gold enough in Europe to pay it, so we have 
 loaned large amounts to the governments of 
 England, Germany, Russia, Sweden and Swit- 
 zerland, and bought back our own securities in 
 large quantities. We are thus becoming the 
 great Creditor Nation of the world. 
 
 In the production of coal, iron, steel, oil, ce- 
 reals, meats, the precious metals and manu- 
 factured goods we are forging ahead of all com- 
 petitors. The wonderful resources of our coun- 
 try, which are as yet merely tapped, give us 
 an advantage which the enterprise and energy 
 of our people are ever ready to emphasize. 
 
 We have emerged from our struggle against 
 the Free Silver fallacy a nation of financiers.
 
 92 sketches and Speeches 
 
 Our machinery is the best, our methods the 
 most direct. Our capital is ample, our credit 
 unsurpassed. The consolidation of manage- 
 ment and capital now going on is giving us a 
 weapon suited to our gigantic hands. It needs 
 no effort of the imagination, but only ordinary 
 business foresight to picture our country in the 
 near future as the greatest commercial nation 
 the world has ever seen, possessed of material 
 power and riches hitherto undreamed of. 
 
 Do not imagine that the good positions are 
 all filled; the fortunes all made, the successes 
 all achieved. The next quarter of a century in 
 our country will witness more commercial suc- 
 cess, national and individual, than any previ- 
 ous period. Will you, young man, be one of the 
 successes ? Will you be a private or an officer in 
 the great industrial army? Will you be one of 
 the multitude who obey, or one of the few who 
 command? Will you be a mere cog in the vast 
 machinery, or one of the engineers, or one of 
 the owners? The answer to these questions de- 
 pends chiefly upon yourself. It depends upon 
 how you will grasp the opportunities, over- 
 come the difficulties, and rise superior to the 
 defeats which the future has in store for you. 
 It depends in a word upon how you have been 
 endowed, and how you will cultivate the
 
 Grip and Grit 9 3 
 
 qualities of "Grip and Grit." By Grip and 
 Grit I mean what may be called the bulldog 
 traits of human nature. I have had great re- 
 spect for the bulldog ever since I had a misun- 
 derstanding with a half-drunk man who was 
 aided and abetted by one of that species; and 
 I believe the bulldog is generally respected. 
 His distinguishing qualities are his readiness 
 to take hold, and his reluctance to let go — 
 his "Grip and Grit." 
 
 It is impossible to classify many specimens 
 of the canine race, but the bulldog is always 
 recognizable. In the same way those of the hu- 
 man race who possess his qualities are easily 
 distinguished from the multitude by their 
 force of character, their success in life, and 
 their usefulness in the world. What then do I 
 mean by "Grip and Grit" when applied to hu- 
 man beings and human activity? 
 
 By Grip I mean that decision of character 
 which finds or makes an opportunity and then 
 takes hold of it with its whole might, and with 
 full determination to succeed. It is not weak 
 wishing — it is prompt acting. It is not hesi- 
 tancy or procrastination, or "Waiting for 
 Blucher to come up." It is beginning the strug- 
 gle in the meantime as W^ellington did when 
 he achieved Waterloo. It is not hoping, like
 
 94 Sketches and Speeches 
 
 Micawber, for "something to turn up" ; it is set- 
 ting to work to turn something up. Grip does 
 not wait for extraordinary opportunities — it 
 brings extraordinary application to bear upon 
 the present duty. And what Grip lays hold of 
 Grit carries forward to the end in face of dif- 
 ficulties and even after defeats. When Grip has 
 laid its hand to the plow Grit allows no turning 
 back. 
 
 We laud genius, but these great qualities 
 have accomplished more than genius, and 
 genius has never accomplished much without 
 them. Indeed, because of the results of energy 
 and perseverance many men have, with Locke, 
 doubted the existence of genius, while others 
 have held that genius is itself the power of mak- 
 ing and continuing efforts. We must concede to 
 a Shakespeare or a Newton the transcendent 
 gift of genius; but it is also certain that they 
 were tireless workers. Newton, when asked by 
 what means he had made his wonderful dis- 
 coveries, answered simply, "By always think- 
 ing unto them," and it is Shakespeare who says : 
 
 ^^ There is a tide in the affairs of men 
 Which^ taken at the floods leads on to fortune; 
 Omitted^ all the voyage of their life 
 Is bound in shallows and miseries.''
 
 Grip and Grit 9 5 
 
 Nearly everything we enjoy is the result of 
 the exercise of these qualities by some one. 
 Look on the fairest portions of our country to- 
 day and tell me what it was that converted the 
 "forest primeval" into these gardens of beau- 
 ty? Was it not the manly Grip and Grit of the 
 pioneers whom no difficulties could daunt, nor 
 discouragements dishearten? When would re- 
 ligious liberty have been ours if Martin Luther 
 had yielded to threats at the Diet of Worms; 
 or if the Scottish Covenanters had not with 
 heroic stubbornness faced inhuman cruelties 
 and suffered death rather than submit to what 
 their consciences declared to be wrong ? Do you 
 ask by what means numerous states formerly 
 unfriendly have within a generation been 
 welded together into the German Empire? 
 Look at the photograph of Bismarck — the 
 man of blood and iron — and there is your 
 answer written in the lines of purpose and reso- 
 lution so clearly that "he that runs may read." 
 
 Napoleon said that "impossible" was a 
 word found only in the dictionary of fools, and 
 Lytton makes Richelieu say, "There's no such 
 word as fail." 
 
 The military genius of Grant was only the 
 genius of sticktoitiveness. Did Vicksburg with- 
 stand his first six attempts to take it ? Thenjike
 
 9 6 Sketches and Speeches 
 
 the Scottish Bruce, he planned a seventh and 
 was victorious. Or where will you find a better 
 example of courageous perseverance than in 
 his famous dispatch when he proposed to 
 "Fight it out on this line if it takes all sum- 
 mer"? 
 
 If we turn from the field of battle to Litera- 
 ture, it is, with a few brilliant exceptions, one 
 long record of early defeats crowned with suc- 
 cess after years of persistent effort. And even 
 one of the exceptions who wrote with such fa- 
 cility that his popularity was immediate, furn- 
 ishes in his life a noble example of the qualities 
 we are discussing. 
 
 When Walter Scott was at the zenith of his 
 power and prosperity he was suddenly in- 
 volved in ruin by the failure of his publisher 
 with whom he had been a silent partner. Al- 
 though the amount for which he was liable ex- 
 ceeded $500,000 no thought of compromising 
 with his creditors seems to have entered his 
 mind, but with a fortitude seldom equaled he 
 determined to wipe out the debt by the fruit of 
 his pen. With wonderful Grip this man of 55 
 took hold of his gigantic undertaking, rising at 
 five every morning, and working 12 hours a 
 day, and in two years he reduced his debt by 
 $200,000. The remaining years of his life were
 
 Grip and Grit 97 
 
 full of sorrow. His beloved wife died. His chil- 
 dren were scattered. No longer were his ex- 
 pectations high and his spirits buoyant. There 
 was none now to cheer him on, and the debt lay 
 like a heavy burden upon his proud spirit. Still 
 he had the Grit to struggle on, publishing vol- 
 ume after volume, until both mind and body 
 gave way under the strain and he died in the 
 attempt. But his labors accomplished his pur- 
 pose although he did not live to see it, for from 
 the proceeds of a new edition of his works the 
 entire debt was liquidated shortly after his 
 death. 
 
 The world loves the name of Walter Scott, 
 and never wearies of the music of his verse, or 
 the imagery of his prose; but to me there is 
 nothing in any of his books so inspiring to 
 noble resolve, so enhancing to my veneration 
 for his name, as the picture of the man himself 
 with the stern purpose of paying his honest 
 debts in his declining years, sitting down with 
 nothing but his pen to accomplish his end, and 
 never relinquishing his task until released 
 from all his troubles by death. That was "Grip 
 and Grit." A noble purpose once formed — 
 then victory or death. These same qualities 
 have been particularly characteristic of great 
 inventors. The world soon forgets its benefac-
 
 9 8 Sketches and Speeches 
 
 tors in this direction and is content to succeed 
 to the inheritance they bequeath, while the 
 story of their patient labors is left unwritten. 
 
 The commonest articles we use might teach 
 us a lesson in perseverance if we knew the 
 patient labor required for their production. 
 Take, for example, a common piece of pottery 
 and look at the enameled glaze which renders 
 it so beautiful. The art of producing that glaze 
 was lost for centuries when Palissy, the potter, 
 resolved to rediscover it. He set to work at 
 once, and worked for many years making al- 
 most innumerable experiments, every one of 
 which was a failure; but he kept at it day after 
 day until his family were reduced to poverty 
 and he had actually taken his household furni- 
 ture to feed his furnace before he reached the 
 discovery which made him a rich man, brought 
 a source of industry and wealth to his country, 
 and placed his name among the enduring tri- 
 umphs of "Grip and Grit." 
 
 When we consider the work of a master in 
 painting, sculpture or music, we think general- 
 ly of the wonderful genius there displayed; but 
 in art as in all else. Grip and Grit are ever es- 
 sential to the success of genius. Sir Joshua 
 Reynolds believed that excellence in art may 
 be acquired by any one, and says: "Whoso-
 
 Grip and Grit 99 
 
 ever is resolved to excel in painting, or indeed 
 any other art, must bring all his mind to bear 
 upon that one subject." Michael Angelo be- 
 lieved the same thing, and was himself a tre- 
 mendous worker, who used to go to bed with 
 his clothes on that he might, as soon as he was 
 refreshed, spring up again to his work. And as 
 for music, any one who has ever taken lessons 
 in it knows that success in that line can only 
 come as a result of determined perseverance. 
 
 Hayden, speaking of his art, said, "It con- 
 sists in taking up a subject and pursuing it," 
 and Beethoven declared that, "The barriers 
 are not erected which can say to aspiring 
 talents and industry,'thus far and no farther."' 
 
 In a very true sense morality and even re- 
 ligion are matters of Grip and Grit. To live mor- 
 ally is to choose promptly between right and 
 wrong, and to have the courage to stand stead- 
 fastly for the right against all the temptations 
 of materialism, sensuality and organized evil; 
 and the older we grow the more clearly do we 
 see the worthlessness of mere passing spiritual 
 excitement and the value of that religion the 
 principles of which are exhibited in a consist- 
 ent life, constantly controlled by a will-power 
 which will not yield to man or devil, but which 
 has learned to conform to the will of God.
 
 I oo sketches and Speeches 
 
 In thus urging the exercise of will-power it 
 is hardly necessary to point out that the mo- 
 tive must be pure and the object worthy. 
 Strength of will is powerful alike for good or 
 evil. Conscience must hold the reins and drive 
 in the right direction or will power will only 
 make disaster more certain. It was chiefly by 
 the energy of his will that Napoleon carved 
 out his immortal career. But it all ended with- 
 out permanent benefit to France or to man- 
 kind because his motive was mere personal 
 "glory" and his object imperial power. A far 
 nobler character was that of Wellington, the 
 motto of whose life was "duty," and whose 
 aim was ever his country's good. 
 
 Let us now consider our subject in relation 
 to success in ordinary life. Success in life! How 
 the heart bounds at the thought of what the 
 words imply. The mind of youth leaps forward 
 to middle age, and visions rise before it of easy 
 circumstances, extensive travels, refinement, 
 elegance, perhaps public honors. Success is the 
 object of man's pursuit from the time he puts 
 his tiny foot on his mother-earth until he is 
 laid to rest in her bosom. It is the inspiration of 
 effort, the purpose of perseverance. Alas! how 
 often it is never more than a dream of youth. 
 In days gone by the wiseacres would have con-
 
 Grip and Grit i o i 
 
 suited the stars as the best means of ascertain- 
 ing whether blind fortune was to smile or 
 frown, but we know better than that, we know 
 that "man is his own star," and that fortune is 
 not so blind as many who seek her. 
 
 In exceptional cases what we call luck seems 
 to bring success, but as a rule success is the di- 
 rect result of the possession and practice of 
 Grip and Grit. 
 
 Some of you students have no doubt de- 
 cided to consecrate your lives to the work of 
 the ministry or teaching. You intend to forego 
 the possibilities of business and the attractions 
 of wealth and devote your lives directly to the 
 service of God and your fellow men. You have 
 chosen nobly. You are not to win money but 
 men. You look to God to bless your labors and 
 crown them with success. With all reverence I 
 think God's blessing will depend largely upon 
 the exercise on your part of the same qualities 
 which would bring you success in any worldly 
 pursuit. 
 
 A readiness to find opportunities for doing 
 good, and persistent work with well-defined 
 objects in view will win success. But God's 
 blessing cannot follow laziness, lost oppor- 
 tunities, or fickleness of purpose. The farmer is 
 dependent upon the blessing of God in the till-
 
 I o 2 Sketches and Speeches 
 
 ing of the soil; but it is certain that God never 
 gives bountiful harvests to lazy or incompetent 
 farmers. And in sowing the good seed of the 
 gospel in men's hearts the same rule is pretty 
 sure to prevail. 
 
 Others among you will enter the professions 
 of law and medicine. Success to you will mean 
 reputation rather than riches. Your triumphs 
 will be the accomplishments of your profession- 
 al skill. Your difficulties will not be small, nor 
 your disappointments few. The crowded con- 
 dition of your professions will probably call 
 for all the Grit you can command while you are 
 waiting for recognition. But if you keep up 
 your courage and do not neglect to study while 
 you wait, your opportunity will come and you 
 will be ready. 
 
 In speaking to those of you who shall enter 
 commercial life I feel more at home. Success in 
 your case can be measured in terms of money. 
 I should consider any business man who at ^S 
 has an annual income of ^5,000 as fairly suc- 
 cessful. From that up to millions is success in 
 different degrees. I make no apology for speak- 
 ing of success in terms of money. Money is the 
 common measure of success in this age. It is 
 also largely the measure of power. All good 
 works depend upon it. It is through the giv-
 
 Grip and Grit 103 
 
 ing of money only that most of us are enabled 
 to do anything for the good of mankind. Its 
 acquisition, therefore, within proper bounds, 
 is a perfectly legitimate object to strive for, 
 and all business is for that purpose. 
 
 What are the educational qualifications 
 which you will find most helpful in entering 
 upon a business life? 
 
 First: To be able to write a good, legible 
 hand; to make good figures, and to place them 
 correctly — the units below the units, the tens 
 below the tens, and so on. 
 
 Second: To be able to add, subtract and 
 multiply rapidly and accurately, and 
 
 Third: To be able to express yourself clearly, 
 briefly, and grammatically in a letter, and to 
 spell the words correctly. Very simple accom- 
 plishments, you say ! Yes, and very rare. I have 
 taken many young men into business in this 
 country and I can scarcely recall one who had 
 these accomplishments. Many of them were 
 graduates of the high schools, and, in my opin- 
 ion, there is something wrong with a school 
 education which includes physiology, myth- 
 ology, and biology and neglects the practical 
 things I have mentioned. The question is often 
 asked whether a young man entering business 
 life is helped or handicapped by a college
 
 I 04 Sketches and Speeches 
 
 course. I think that while much of what is 
 learned at college is of no practical use in busi- 
 ness, the mental training gained is of inesti- 
 mable value. I hope the day is coming when 
 there shall be more specialization in education 
 — when the man who is to manufacture soap will 
 have a different curriculum from the one who 
 is to make sermons, and the one who is to fol- 
 low finance will not be required to pass an ex- 
 amination in philology. 
 
 With regard to the choice of a business 
 natural inclinations should be followed if pos- 
 sible. If these are not pronounced I would give 
 the preference to a line of business in which, 
 after it has been mastered, it is possible to 
 start in a small way on one's own account with 
 unlimited possibilities of growth. Success in 
 railroading or banking, for instance, means 
 only a good salary, while the profits go to the 
 shareholders. 
 
 Success in merchandising or manufacturing 
 of any kind means that the profits go directly 
 into your own pocket. Do not seek the easiest 
 employment. The young man who goes around 
 looking for "a soft place" has got one already 
 — under his hat. It is difficulty — not facility, 
 which trains a fellow and makes a man of him. 
 With your first connection with any business
 
 Grip and Grit 105 
 
 comes your first great opportunity. Get in- 
 terested at once in your business. Let it get a 
 grip of you so that you cannot rest content 
 until you understand it. Ask questions, and if 
 there are books connected with the business 
 read them. You often hear it said, "There is 
 always room at the top." That is true. Mr. 
 Schwab said the other day that the great steel 
 corporation had been looking for three weeks 
 for a competent mill superintendent without 
 finding one. I am told it is the same in other 
 lines. As for banking, I have not known the 
 time for years when there were not some large 
 banks looking everywhere for a capable man- 
 ager. Why is this ? Simply because there is room 
 further down the ladder. Clerks show a marvel- 
 ous amount of mediocrity, incompetency, and 
 want of grasp. Managers are being constantly 
 amazed at the ignorance of things which should 
 have been learned the first year displayed by 
 clerks who have been ten or fifteen years in 
 their employ. 
 
 Not long ago a bank clerk of fifteen years' 
 experience had occasion to go to the president 
 and ask for a small loan. The circumstances 
 warranted the loan and the president, consent- 
 ing to it, handed the clerk a printed note-form 
 to fill up for the amount. The clerk handed it
 
 I o6 Sketches and Speeches 
 
 back politely requesting the president to fill 
 it up as he, the clerk, did not know how. You 
 see he had been keeping books in the bank and 
 could not be expected to know anything about 
 notes ! I have known clerks to work for years in 
 the same office within six feet of each other and 
 know no more about each other's work than if 
 they had never been within six miles of each 
 other. The great majority are content to do 
 their allotted duties by rote — to do them ex- 
 actly as their predecessors did, without 
 thought, without suggestion of improvement, 
 without understanding the principles which 
 underlie their duties, or caring to know more 
 than just enough to keep their job. How can 
 you elevate such men? Nothing short of dyna- 
 mite would do it. 
 
 The young man who succeeds is the oppo- 
 site of all that. He usually begins life with 
 nothing. That is the best way to begin. The 
 man who saves his first capital out of wages 
 through the years is likely to be the most care- 
 ful in handling it, and the most successful in 
 increasing it. Having made a beginning he sets 
 a definite object before his mind and resolves 
 to become an expert in his business. He has the 
 capacity to see that this is the day of the spe- 
 cialist — that the best judge of carpets, for ex-
 
 Grip and Grit 107 
 
 ample, commands more salary than the Chief 
 Justice of the United States. He resolves to 
 persevere, and he does persevere in his busi- 
 ness until no one knows more about it in all its 
 details than he. He feels competition but he 
 pays no attention to it. He sees one shoot past 
 him by dishonest means, but he knows that 
 such apparent success is really failure. He sees 
 others suddenly gain a fortune by lucky specu- 
 lation, but he lives long enough to see nearly all 
 of them lose it again by the same easy way. He 
 sticks faithfully to his work, never shirking re- 
 sponsibility, but welcoming it as an opportu- 
 nity — and gradually there develops in him that 
 self-reliance, that judgment of men and enter- 
 prises; that clear-minded way of seeing things 
 as they are and not as they are represented, 
 that courage, faith, and far-sightedness which 
 all go to make up the successful business man. 
 Perhaps I have spoken too much of "Grip 
 and Grit" as pertaining to man; but I believe 
 that woman, as a rule, possesses these quali- 
 ties in greater measure than man. She has at 
 least more need of them in her life. There is so 
 much against her if she has to earn her own 
 living. Her wages are smaller than man's even 
 for similar work, and the battle of life is harder 
 for her all along the line. Success in business to
 
 I o 8 Sketches and Speeches 
 
 her is usually of a limited kind, but so far as it 
 goes it will demand the same qualities which 
 are demanded of men. For you young lady 
 students I am old-fashioned enough to say that 
 the best success in life for you is to marry a 
 successful young man. To make a happy home 
 is the grandest success in life. And if you will 
 allow me I would suggest that you let him ex- 
 hibit some of his Grit as a wooer before you 
 surrender. Shakespeare knew a thing or two 
 and he says: "Too light winning makes the 
 prize light." There are two kinds of girls that 
 have small chance of making a success in life 
 by marrying the right kind of man — the af- 
 fected girl, and the cheaply-won girl! And the 
 strange thing is, that these two kinds always 
 imagine themselves attractive, and wonder 
 what the young men see in their more reserved 
 and natural friends. But I am persuaded better 
 things of you, and will only add that whatever 
 be your lot in life I hope it will be brightened 
 by many joys and saddened by few sorrows. 
 
 I am trying to-day to bring you a simple 
 message from the business world. It is not new 
 — it is as old as commercial life. You cannot al- 
 ways make opportunities, but you can always 
 make the most of them when they come. And 
 come they surely will if you are ready for them.
 
 Grip and Grit 1 09 
 
 That remarkable man, the late Senator In- 
 galls of Kansas, has put this truth beautifully 
 in his personification of "Opportunity": 
 
 ^^ Master of human destinies am I; 
 < FamCy love, and fortune on my footsteps wait. 
 Cities and fields I walk; I penetrate 
 Deserts and seas remote, and passing by 
 Hovel and mart and palace, soon or late 
 I knock unbidden once at every gate. 
 If sleeping, wake; if feasting, rise before 
 1 turn away. It is the hour of fate. 
 And they who follow me reach every state 
 Mortals desire, and conquer every foe 
 Save death; but those who doubt or hesitate. 
 Condemned to failure, penury and woe. 
 Seek me in vain and uselessly implore, 
 I answer not and I return no more.'' 
 
 And it is equally true that the road which 
 ends in success is usually long, hard, and full of 
 set-backs, calling for the exercise of patience 
 and resolution. 
 
 But I would not have you think that I look 
 upon outward success as the greatest thing. 
 Character is more important than position. A 
 man is poor indeed who gains wealth at the ex- 
 pense of his own self-respect. A man is rich, in-
 
 1 1 o sketches and Speeches 
 
 deed, whatever else he lacks, if he possesses 
 nobility of character. Better to die a pauper in 
 purse than a pauper in soul. Better fail to get 
 money than allow money to get you. To reach 
 old age possessed only of money and a desire 
 to increase it is not success in life. It is a sad 
 and terrible failure. Let us rejoice, however, 
 that a very different spirit is manifesting it- 
 self more and more among successful men. For 
 the past year a million dollars a week has been 
 given in this country to educational and phil- 
 anthropic schemes, exclusive of what is con- 
 tributed to the support of the church. While 
 the altruistic spirit is thus growing among suc- 
 cessful men, I see no cause for a pessimistic 
 view of our commercial age. 
 
 On a dark night I once sat by a river across 
 which an electric arc lamp shot a shaft of light. 
 As the hurrying waters came out of the dark- 
 ness, were visible for a moment, and passed on 
 into the night, I thought of the flowing gen- 
 erations of humanity which come out of the 
 unknown, cross the narrow space of life and 
 pass on to an unrevealed eternity. As they pass 
 they ask the same profound questions: 
 
 "Whence come we?" "What do we here?" 
 "Whither do we go?" The same problems of 
 life, death and destiny continue to harass the
 
 Grip and Grit 1 1 1 
 
 mind and baffle the understanding of each 
 succeeding age. There is much we cannot 
 know. But in our perplexity we can turn to the 
 practical question, "How can we make the 
 most of life as we find it?" There is plenty of 
 light on this question to illumine the path for 
 us. It comes from the lives of all the great and 
 good who have left their "foot-prints on the 
 sands of time." It comes above all from Him 
 who scarcely lifted a corner of the veil from 
 the unknown, but who went about continually 
 doing good; who was so busy that He often 
 went without sleep, and had not time to eat; 
 who never missed an opportunity to help, and 
 whose whole life was filled with the holy pur- 
 pose of self-sacrifice for mankind. 
 
 The life of a successful business man, though 
 devoted mainly to making money, need not be 
 sordid. He, too, may have his ideal. Let me 
 
 suggest one. 
 
 * * * 
 
 ^0 be honesty making money honestly or not at 
 all 
 
 To be fair ^ refusing to injure a competitor. 
 
 To be just ^ remembering that all must live. 
 
 To be kindy regarding employes as something 
 more than an investment.
 
 112 Sketches and Speeches 
 
 'To be charitable^ giving liberally for the wp- 
 raisi77g of humanity. 
 
 To be healthy y exercising as a duty. 
 
 To be sociable^ having a side to friends not 
 known to all. 
 
 To be lovable^ being more to wife and family 
 than a means of support. 
 
 To be sympathetic, fearing littleness of soul 
 more than littleness of fortune. 
 
 To be broad y accumulating resources higher 
 than the material; above all, to be true to one's 
 self, condoning nothing in self which is to be con- 
 demned in others.
 
 SPEECHES II 
 
 THE NEW FEDERAL 
 HE SERVE BANKS 
 
 Stenographic Report of Address 
 
 Delivered Before 
 
 Detroit Association of Credit Men, Tuesday Evening 
 
 January 26, 1915 
 
 Mr. President^ and Gentlemen of the Detroit 
 
 Association of Credit Men: 
 
 i^^i^^(M^'^^ WISH to thank you very sincerely 
 ^^g^g^j^S^ for the honor you have done 
 5#3 T 5|^ me in asking me to come to your 
 
 great city, and m meetmg me 
 
 ^BdSSI^® ^^^^ ^^^^ ^ splendid body of 
 men as I see before me to-night. 
 I do not wish, however, to take that honor too 
 seriously, in case something happens to me 
 similar to that which happened to a fellow 
 countryman of mine. 
 
 It was related of the late Sir James Simpson, 
 the discoverer of chloroform, a great physician 
 
 113
 
 114 Sketches and Speeches 
 
 and medical professor of Edinburgh Universi- 
 ty, that in recognition of his services to hu- 
 manity, Queen Victoria made him Physician- 
 in-Ordinary to the Queen. Sir James was very 
 much pleased, and the next morning with great 
 dignity and fine solemnity, he announced to 
 his class of medical students the great honor 
 that had been conferred upon him, that he had 
 been made Physician-in-Ordinary to the Queen 
 and the class promptly struck up "God Save 
 the Queen." 
 
 Now, gentlemen, it may seem like carrying 
 coals to Newcastle to address the Credit 
 Men's Association on any financial subject, be- 
 cause whenever we begin to talk of anything 
 financial we at once get into the realm of credit. 
 The life blood of modern business is no longer 
 gold; it is credit. Credit starts enterprises, 
 moves wheels, builds railroads, wages war, 
 makes civilization. You gentlemen deal in 
 credit, and to you it is only the means — to 
 most of you, at least — it is only the means by 
 which people buy and buy, and pay by-an-by. 
 But, gentlemen, it is a great deal more than 
 that. It is a kind of element, closely allied to 
 water, in which modern business lives, moves 
 and has its being. In all business, some ninety- 
 five per cent of transactions are performed by
 
 Federal I^eserve Banks 
 
 I I 
 
 credit, and in a highly developed community, 
 such as a great city in Europe, ninety-nine per 
 cent involves credit. 
 
 You tell me, for example, that the banks in 
 New York have two billion of deposits and 
 some one says, "What a lot of money!" Noth- 
 ing of the sort. Bank deposits are not money. 
 Bank deposits are on the other side of the led- 
 ger. The money in the bank is an asset. The 
 deposits of the bank are its liabilities. Material- 
 ly, they are nothing on earth but figures on a 
 ledger — a mere memorandum of how much 
 you stand to lose when the bank fails! 
 
 Again you tell me that the banks in this 
 country have issued $750,000,000 of currency, 
 and again you say, "What a lot of money!" 
 And again I say, "No, not quite!" 
 
 Take a bill out of your pocket and read it. 
 It says such and such a bank promises to pay 
 bearer five dollars, or ten dollars. That is not 
 money. It is a promise to pay money. It is a 
 credit instrument. Yes, it is secured by the 
 bonds of the United States Government, but 
 they are another form of credit, and what you 
 call money is largely credit, either credit of the 
 Government, or the credit of the bank backed 
 up by the credit of the Government. Gold coin 
 is the only unqualified money.
 
 1 1 6 Sketches and Speeches 
 
 All the stocks and bonds, on all the stock ex- 
 changes of the world, all the great national 
 debts that are being increased so rapidly these 
 days, all the tremendous international bal- 
 ances — one way or the other — all the ac- 
 counts and bills receivable or payable on all 
 the ledgers in all the world, and a very large 
 part of what is called *'money" in the world, 
 are only various forms and expressions of this 
 wonderful modern thing* that we call Credit. 
 The whole world is bound together by invisible 
 though powerful mutual ties, by this great 
 modern system. 
 
 For example. A man came into my office a 
 few years ago, whom I knew, looking rather 
 pale and disturbed. He said to me, "Mr. For- 
 gan, you probably don't know it, but I have a 
 bad boy. I haven't heard from him for seven 
 years. I didn't know to-day whether he was 
 alive or dead, but I have just received a letter, 
 and he is in a little town in the middle of Af- 
 rica, and he is sick." Like the prodigal son of 
 old, being in a far country and sick, he had 
 thought of his father and had written for help, 
 and the father, with trembling lips, asked me 
 how soon we could convey the help of money 
 to that boy. I said, "Is there a bank there?" 
 He said, "Yes, there is a branch of an English
 
 Federal I^eserve Banks 117 
 
 bank there." I said, "We will pay it to him 
 this afternoon." x^nd we did. 
 
 That is an illustration of the wonderful 
 modern system of credit — of the ties that, un- 
 fortunately, are being snapped these days by 
 the terrible European war. 
 
 You gentlemen are the physicians and sur- 
 geons of the financial world. You direct this 
 life blood of modern business. You see that it 
 goes in the proper channel, and that it does 
 not go in a bad direction, and I — I am akin 
 to you, because I am a banker, for the banks 
 are the heart from which this great life blood 
 flows. 
 
 Did you ever think of the meaning of the 
 word"credit"? ItcomesfromtheLatin"credo," 
 meaning "I believe." So every transaction of 
 credit is based upon faith — faith in the charac- 
 ter and integrity of another man, or another set 
 of men; therefore the whole structure of mod- 
 ern credit is based upon the foundation of 
 character, and no business can permanently 
 endure that is founded on any other founda- 
 tion. 
 
 Now, up to a few months ago, this country 
 had what Andrew Carnegie called the "worst 
 banking system in the world," and, after hav- 
 ing done business in three different countries
 
 1 1 8 Sketches and Speeches 
 
 myself, I was pretty nearly ready to agree with 
 my fellow countryman, Andrew — in that, if 
 not in much else. Mark you, I did not say that 
 the banks were the worst in the world. I think 
 the American banks are the best in the world. 
 The American banks have the confidence of the 
 communities which they serve, and the Ameri- 
 can banker is, almost without exception, in 
 these various communities — big and small — 
 one of the most respected and trusted citizens 
 of the place. The banks are all right. It is the 
 system, or the relation of one bank to all the 
 others, that is wrong. Indeed, it would be more 
 correct to say that until recently there was no 
 system, for when financial clouds appeared in 
 the sky, we found our twenty-five thousand 
 banks separating into twenty-five thousand 
 units, each one standing for and by itself, find- 
 ing it almost impossible to get help, from any- 
 one else, and equally impossible to give assist- 
 ance to anyone else. 
 
 The great trouble was that without a sys- 
 tem that related all the banks to each other, 
 we had no means of taking care of panicky 
 conditions, and so we had what I considered 
 for many years — and I suppose you did — 
 nothing short of a national disgrace, namely, 
 that this country, blessed by God with the
 
 Federal Reserve Banks 119 
 
 greatest natural resources of any country In 
 the world, containing, I believe, the ablest 
 business men in the world, holding in our hands 
 as much gold — the only real, unqualified 
 money — as any three or four of the great 
 commercial nations of the earth combined; I 
 say it was nothing less than a national disgrace 
 that every few years these good banks had to 
 suspend cash payments. 
 
 In 1907, which is not so very long ago, all 
 these good banks, practically, in this country, 
 had suspended. I had just started a bank. It 
 was only a few months old. There was not an 
 asset in that bank that I would have sold for 
 ninety-nine and three-quarter cents on the 
 dollar — not then; I had not had time to get 
 Into any trouble. But do you think that made 
 any difference? It made no difference what- 
 ever. I, with my new bank, had to suspend, 
 just the same as all the others. It was not a 
 question of banks; it was a question of system. 
 
 We went on many years like that. We did 
 nothing during the panic, and we forgot it 
 afterwards. We had about half a dozen panics 
 within the memory of living man, always 
 sharply cut off by our national borders. 
 
 We went on that way like the farmer, the 
 hole in whose barn roof was never mended be-
 
 I 2 o Sketches and Speeches 
 
 cause when it was raining he couldn't mend it, 
 and when it was dry again, it didn't need mend- 
 ing, or like the Irish servant girl who couldn't 
 get married, because when Pat was drunk she 
 wouldn't marry him, and w^hen Pat was sober, 
 he wouldn't marry her. 
 
 And so we went along. It is true that the 
 bankers advocated reform, but while the legis- 
 latures passed hundreds and even thousands of 
 laws against the poor railroads, they would not 
 even mend one little law for the poor bankers, 
 and so we went along until some five years ago, 
 when the Republicans — then in power — ap- 
 pointed what was known as the National 
 Monetary Commission. That Commission was 
 practically told to go abroad, and find out 
 what the other banking systems of the world 
 had and we lacked, that enabled them to take 
 care of panicky conditions without suspension, 
 whereas when we have them, everything we do 
 seems to hurry the bursting of the cloud over 
 our heads. Well, they went abroad and they 
 studied the situation, and they came back and 
 consulted with the best financial minds in this 
 country, and, after publishing fourteen vol- 
 umes of books — that would take about as 
 long as that (indicating) on your shelf — they 
 exhausted the subject.
 
 Federal Bfiserve Banks i 2 i 
 
 Now what did they tell us? They told us 
 something like this. Suppose this country had 
 been the only country in modern times suffer- 
 ing from periodical epidemics of smallpox, and 
 a lot of doctors went abroad to find out why 
 the other countries did not have these epi- 
 demics, and what they did to prevent them. 
 The authorities over there said, "Why don't 
 you adopt vaccination? If you adopt it you 
 will have no more epidemics of smallpox.'" 
 
 They came back and told us there were sev- 
 eral things we lacked that all other great 
 countries had, and if we adopted them we 
 would have no more suspension. Not "no more 
 panics" — we may have httle incipient panics 
 — but no more panics leading to general sus- 
 pension. 
 
 What were these things, briefly? First, they 
 said, you have no elasticity in your currency. 
 Well, I don't need to illustrate that to you 
 gentlemen. You are all old enough to remem- 
 ber 1907. Those of you who were in the bank- 
 ing business will remember how you paid ^107 
 or $108 or 1 1 09 for a government bond, sent it 
 on to Washington, and in due course got back 
 a hundred dollars. There was great expansion 
 in that! And those of you who were not in the 
 banking business will remember the "milk
 
 12 2 Sketches and Speeches 
 
 tickets" for one, two, three, four and five dol- 
 lars, issued by the clearing houses all over the 
 country, because our national currency could 
 not be increased in volume when it was needed. 
 
 Another thing, in our system, until lately, a 
 gold dollar never stood for more than a dollar. 
 Wherever it was, it was only a dollar. Now in 
 Germany, for instance, a gold dollar in the 
 bank stood for three paper dollars, because the 
 Reichsbank can issue as much paper dollar 
 currency as it likes, so long as it has thirty- 
 three and a third per cent gold reserve against 
 it — just the same as we bankers have to keep 
 certain reserves against our deposit liabilities. 
 
 Well, after a great deal of trouble, the Dem- 
 ocrats passed the Federal Reserve Act. I want 
 to give them credit for it. I am not a Demo- 
 crat, but I don't forget that while the Republi- 
 cans sent that great Commission abroad, they 
 did nothing after it got home, but ignore its 
 fourteen volumes; and all credit to the Demo- 
 crats for at least putting something over! 
 
 Now, having given them that credit, I want 
 to tell you gentlemen that most of what is 
 good in their bill they took from the Republi- 
 can Monetary Commission's Report. 
 
 They met this first requirement, elasticity 
 of currency, by providing that the new Federal
 
 Federal I(e serve Banks 123 
 
 Reserve Banks may issue all the currency they 
 need, so long as that currency is secured by 
 one hundred per cent commercial paper — 
 short time paper, the best security for the pur- 
 pose in the world — and so long as they have 
 at least forty per cent gold reserve; exactly 
 in the same way as Germany does. That forty 
 per cent gold reserve may get down gradually 
 to thirty-two and a half per cent, by the pay- 
 ment of an increasing tax. That is a detail. 
 They have thus provided for that first neces- 
 sity, that first requisite of a good banking sys- 
 tem — an elastic volume of currency that will 
 meet the varying needs of currency in the vari- 
 ous portions of the country at the various sea- 
 sons. 
 
 The second thing we were told we lacked was 
 mobilization of reserves. Now what do we 
 mean by that.^ Just what we mean when we 
 talk, as we do so often nowadays, in military 
 terms. Suppose this country had a lot of re- 
 serves of soldiers for defense, and Detroit had 
 one hundred thousand, and Chicago had four 
 hundred thousand, and Podunk had one thou- 
 sand men in the reserves. And suppose we were 
 attacked somewhere, and instead of these re- 
 serves mobilizing and meeting the enemy 
 wherever he might be, Podunk commences to
 
 12 4 sketches and Speeches 
 
 get a few men for the protection of Podunk by 
 calling them from Detroit and Chicago, and 
 Detroit tries to get some men by calling them 
 from Chicago. And what about Chicago? Why 
 we would have no reserves left. It would not 
 be a reserve unless they could coalesce. 
 
 Now that is exactly the situation we were in. 
 Whenever we had trouble, our reserves scat- 
 tered. Any trouble that is national in char- 
 acter, that is big enough to frighten all the 
 banks, must happen in a center. When it does 
 happen, that is the time the center needs more 
 gold, more reserves; and, under our old system, 
 that was the time when every bank in this 
 country commenced to try to withdraw their 
 reserves from the center. 
 
 Now what actually led to suspension was 
 this: It was the relations between the city 
 banks and the country banks. The country 
 bankers were responsible for suspension, as I 
 have often told them, and I did not say it in a 
 blameworthy way, because if I were a country 
 banker, or you were a country banker, under 
 the old system, we would act just as they did. 
 
 What happened under the old law, which is 
 now being changed by the Federal Reserve 
 Act? We will say that the First National Bank 
 of Peoria, has one hundred fifty thousand dol-
 
 Federal B^eserve Banks v 2 5 
 
 lars reserves required by law. Of that, three- 
 fifths, or ninety thousand dollars might be kept 
 with the First National Bank of Chicago, or 
 any other national bank in a central reserve 
 city, and two-fifths, or sixty thousand dollars, 
 had to be kept in the First National Bank of 
 Peoria's own safe. Now some fine morning the 
 President of the First National Bank of Peoria, 
 picks up his paper and he sees that something 
 terrible has happened in Chicago — some 
 Scotchman running a big bank there has va- 
 moosed, or something else equally unexpected 
 and unheard of, has happened. So down he 
 goes in a hurry to the bank, and he says, "Mr. 
 Cashier, how much money have we in Chicago 
 this morning?" "Ninety thousand dollars," is 
 the answer. "How much in the safe?" "Sixty 
 thousand dollars." 
 
 "Well, I don't like the looks of things in 
 Chicago this morning. I don't want to seem 
 afraid; I don't want to discommode Chicago, 
 but I think you had better telegraph for twenty 
 thousand dollars." 
 
 Now, if the First National Bank of Chicago 
 had ninety thousand in cash of the Peoria 
 bank's lying in its safe, marked "property of 
 the First National Bank of Peoria," it would be 
 a very simple matter to send the twenty thou-
 
 12 6 sketches and Speeches 
 
 sand dollars, and they would have seventy 
 thousand left; but you know very well that is 
 not what the First National Bank has. It has 
 a credit on its books to the First National Bank 
 of Peoria of ninety thousand dollars, against 
 which the Chicago Bank has by law to keep a 
 reserve of just about twenty thousand dollars, 
 so when this telegram comes in and says, "Send 
 Peoria twenty thousand dollars," and they 
 send it, they have parted in Chicago with all 
 the reserve that was held against the Peoria 
 account, and they are left with a credit to 
 Peoria of seventy thousand dollars, against 
 which they now have no reserve. 
 
 That which happens in Peoria, happens in 
 Springfield, and towns all around, and so, 
 when things happen like that, in one short 
 week the reserves in the centers are depleted 
 by one-half, and before they lose the other half 
 they go on a clearing house basis, and stop 
 payment. 
 
 The Federal Reserve Banks have met that 
 situation by causing all the member-banks 
 gradually — in the course of three years — to 
 put all the reserves the law requires them to 
 carry, (except those that are in their own 
 safes) in the Federal Reserve Banks. Before, 
 we were just as if a fire law of the City of De-
 
 Federal I^e serve Banks 127 
 
 troit required each citizen to have one bucket 
 of water as a protection against fire, instead of 
 having a reservoir containing all the water, 
 with pipes in every direction capable of carry- 
 ing the force of all the water to a desired spot. 
 Now, thanks to this Federal Reserve Act, we 
 have got the reservoir, and we have begun to 
 fill it. 
 
 The third thing, gentlemen, we were told 
 we lacked, was liquidity of bank assets. In all 
 other commercial countries the banks had 
 short time paper which they could take to 
 some central institution, such as the Bank of 
 England, the Bank of France, and so on, and 
 have it at once converted into cash. We had 
 nothing of that sort. We, as a rule, took a se- 
 curity in our banking business, a note at three, 
 or four or six months, and we put it away in a 
 box and we never saw it again until the day 
 it was due. Not so, the English or French or 
 German banks. When they run short of money, 
 they take out a bunch of what they call 
 "prime discounts" and take it to the Central 
 bank and get the money for it. There is always 
 in these places a discount market, just the 
 same as on the Board of Trade in Chicago, 
 there is always a price at which you can sell 
 a bushel of wheat. And when these banks
 
 12 8 sketches and Speeches 
 
 want to put up the rate of discount to get gold, 
 it means just the same as if a man was short 
 of wheat in Chicago, and put the price up in 
 Chicago as against Kansas City and Minne- 
 apolis, and the wheat would pass Kansas 
 City and Minneapolis and come to Chicago. 
 
 We never before had anything of that kind 
 in this country, but, with these Federal Re- 
 serve Banks we have the privilege of re-dis- 
 counting. We take paper at thirty or sixty 
 days, and in some cases longer — but these 
 are details I need not bother you with — and 
 we have it placed to our credit in the Federal 
 Reserve Bank, and get back cash for it. 
 
 Now, here's a point I want you to under- 
 stand clearly. I have found that everybody 
 doesn't understand this point, and I want you 
 to get it clearly. How does it work? How do we 
 get the money? This is how it works. Suppose 
 that my bank for any reason whatever, general, 
 individual, or local, needs a million dollars. Be- 
 fore, I didn ' t know where to go to get i t. Now, I 
 take a million dollars of my good commercial 
 paper, given for commercial purposes, and I en- 
 dorse it, and send it over across the street, to 
 the Federal Reserve Bank of Chicago, and they 
 discount it and they put the proceeds of it to 
 my bank's credit — a million dollars, less a
 
 Federal I^eserve Banks 129 
 
 little hit of discount, the bank's rake-ofF — 
 another little detail we needn't talk about! 
 Well, that goes to my credit. Then I want the 
 money. My customers are asking me to ship 
 currency, or they are standing in line in my 
 office, and want the money. I want cash. So 
 I send over a messenger with a check on the 
 Federal Reserve Bank for half a million dol- 
 lars of cash. 
 
 Now, how does it give me that cash? There 
 is the whole point. It giv^es me its own promises 
 to pay. It simply transfers five hundred thou- 
 sand o^ deposit liability from my account to five 
 hundred thousand note liability in the circula- 
 tion account. It does not need togointoits vault 
 for a single dollar of what you might call "re- 
 serve money." It gives me its own promises to 
 pay, but that is cash, because when it does 
 that it puts up with the Federal Reserve Agent 
 representing the government in the bank, five 
 hundred thousand dollars' worth of the paper 
 that I sent over for discount, together with at 
 least forty per cent, of gold reserve, in case 
 these promises to pay, which I circulate as 
 money, may begin to come in for redemption 
 in gold. 
 
 Now, that power is unlimited. A bank with 
 the power to issue its own notes as cash can
 
 130 sketches and Speeches 
 
 take care of an enormous amount of such busi- 
 ness, so long as it has good paper for it, and 
 a proper gold reserve against contingencies. 
 That is what the Federal Reserve Banks are 
 now ready to do. 
 
 We have also begun under this Act, to have 
 a "prime discount" market, by allowing banks 
 to accept the drafts of their customers, or ac- 
 cept drafts drawn on their customers for their 
 customers. Perhaps you do not understand 
 that, some of you, and I will explain it in just 
 a minute. Take the business of importation or 
 exportation of goods. We will say that a whole- 
 sale liquor dealer in Detroit imports fifty thou- 
 sand dollars' worth of champagne from France. 
 He tells the French exporter of the cham- 
 pagne to draw on him at ninety days, with 
 the Bills of Lading attached, and to ship the 
 champagne. He does so. That draft comes 
 along drawn on the wholesale liquor dealer of 
 this city. Now, under the new system, the 
 wholesale liquor dealer can go to his bank and 
 say, "Will you accept this draft for me, and 
 let me take the Bills of Lading and get the 
 champagne?" and if he is in good credit, the 
 bank accepts it. That is, it loans its credit to 
 its customer in that form — in the form of an 
 acceptance, and the bank which holds the ac-
 
 Federal I(e serve Banks 131 
 
 ceptance now holds a prime bill, which any- 
 day can be readily discounted at the Federal 
 Reserve Bank. So we have begun to have what 
 all other great countries have — a real discount 
 market. 
 
 The last thing that these financial physicians 
 told us we needed was centralization of bank- 
 ing power, closely allied to the national govern- 
 ment. You don't need to know very much 
 about banking to understand what a wonder- 
 fully tranquilizing effect a great central in- 
 stitution closely allied to the national govern- 
 ment has, in troublous times. You know the 
 old story about the negro who didn't want his 
 money when he found it was there, but wanted 
 it very badly when he thought it wasn't there. 
 That is human nature! You remember when 
 Baring Brothers failed in '90, how a shiver 
 went through the whole world. What hap- 
 pened? The Bank of England announced the 
 next day that they had taken hold of the Bar- 
 ing Brothers' situation. The panic disappeared. 
 We learned afterward that the Bank of 
 France was behind the Bank of England in that 
 transaction. Again, when the old Comptoir 
 had a run on it, the Bank of France announced 
 that they would take care of the Comptoir's 
 obligations, and the panic disappeared. The
 
 132 sketches and Speeches 
 
 Bank of France being closely allied to the gov- 
 ernment was practically the same thing as the 
 government. Just lately, when war broke out, 
 the Bank of England undertook to protect 
 all acceptances, because the government an- 
 nounced that it would stand back of the Bank 
 of England. 
 
 Panic is unreasoning fear. We could have a 
 panic now if someone yelled "fire," perhaps, 
 and some of us might get hurt before we got 
 out, although there might not be any fire. 
 
 I think it is not too much to say that by the 
 passage of the Federal Reserve Act, and the 
 establishment of the Federal Reserve Banks, 
 the days of general suspension are over, in this 
 country. Had they been in operation when the 
 war broke out we would not have had recourse 
 to Clearing House Certificates, nor Aldrich- 
 Vreeland Emergency currency. I do not expect 
 to live to see general suspension again, and I 
 am very glad of it. The future, however, of 
 these banks depends very largely upon their 
 administration. I have tried to show you that 
 they have got the main principles right. These 
 are the four great main principles I have stated, 
 and I think we have them in this Federal Re- 
 serve Act. At present there is a little wobbling 
 going on because they are new. We have got a
 
 Federal I^eserve Banks 133 
 
 good Federal Reserve Board, but one on which 
 there are very few bankers, and they have not 
 just found themselves yet, so the banks are 
 showing statements where they have not made 
 very much money — not enough to take care 
 of their expenses — but that is nothing. That 
 will take care of itself in good time. We must 
 be patient. The Federal Banks should pur- 
 chase government bonds and other securi- 
 ties allowed by the Act, sufficient to pay 
 expenses. 
 
 There are two ways to run this Federal Re- 
 serve Bank. If the politicians get tired of seeing 
 that little debit there at expense account, and 
 begin to demand that this bank be run more 
 "for the people," and that the bank should get 
 into the banking business and compete with 
 us — its own members, stockholders, and de- 
 positors — why of course they might make a 
 little money, but that would not be the way 
 to run the bank. In the first place, it would be 
 grossly unfair to take our money that costs us 
 interest, give us no interest for it, and come 
 back into the street and compete with us, 
 with our own money, because all the money in 
 the Federal Reserve Banks belongs to the 
 members of the bank, except such money as 
 the government in the future may put in. If
 
 134 Sketches and Speeches 
 
 they did that, we would not have the bank at 
 the time we needed it. 
 
 There was a man died once, and he left in 
 his will enough money to build a hospital, and 
 in the will he said that in that hospital there 
 must always be a bed kept for emergencies. 
 Well, after the hospital was going full blast, 
 there was a man nearly killed, badly hurt, and 
 they ran him up to the hospital, but it was 
 filled, and the superintendent said, "We can't 
 take him in." And the assistant superintendent 
 said, "Why, we have the emergency bed. We 
 can use that." But the superintendent said, 
 "No, we can't use that. Don't you know that 
 by the will of the late So-and-so, that bed has 
 to be kept for emergencies?" 
 
 That is exactly the way we used to handle 
 our reserves. We used to keep them, and when 
 the emergency came, the law would not allow 
 us to use them. Each one had to save up his 
 own bucket of water, because the law demand- 
 ed he should keep it full and forbade him to 
 use it. Now we do have, in these Federal Re- 
 serve Banks, banks for emergencies, but if 
 we get them full of loans and competing with 
 us, when the emergency comes, they will be 
 useless. The emergency bed will be full, and 
 there will be no place to put the new patient.
 
 Federal I^eserve Banks 135 
 
 There are several dangers that lie in the 
 path of this new banking system, and the 
 greatest of these is that politics may get into 
 it. Anyone who knows the history of the First 
 and Second banks of the United States, and 
 knows how they were both destroyed by poli- 
 tics cannot help but tremble a little for the 
 future of the Federal Reserve Banks, if politics 
 ever gets into them. We have had a little taste 
 of that in Chicago, already. I daresay some of 
 you saw it in the papers — it was a tempest 
 in a teapot. Our local senator made the dis- 
 covery that out of thirty-nine clerks not a 
 single Democrat had been appointed. What 
 he meant was that not a single Democrat rec- 
 ommended by him had been appointed! These 
 men were some of the best clerks in Chicago, 
 selected for their ability, and nothing else. We 
 were sorry to lose them from our banks. Well, 
 lately, someone took the trouble to find out 
 just what politics they had. Out of the thirty- 
 nine, thirteen were minors, who had no vote 
 at the election; twelve voted for Wilson; 
 twelve for Roosevelt; and only two for Taftl 
 
 I don't want to enlarge upon that, but I 
 would just like to say to you business men, 
 stand for all you are worth against politics ever 
 getting hold of this thing in any way. So far,
 
 136 sketches and Speeches 
 
 I am glad to say that the whole tendency of the 
 Federal Reserve Board, and of the Boards of 
 these Federal Reserve Banks is to resist that 
 to the last ditch, and I hope they will always 
 stand there. 
 
 Another danger that I see in the future is the 
 danger of these banks disappointing the people 
 by not doing what their promoters claimed 
 they would do. 
 
 There are two kinds of banking. There is in- 
 vestment banking and commercial banking. 
 Investment banking supplies capital to busi- 
 ness by long-term loans, or by large issues of 
 stocks or bonds. That is largely in the hands of 
 private bankers, the biggest of whom are in 
 Wall Street. The other kind of banking, com- 
 mercial banking, is represented by all the or- 
 dinary national banks and state banks. These 
 banks do not supply capital on long time loans, 
 or place issues of stocks. They augment capital 
 by short-time loans. Their business is not in 
 private hands, except to a very small extent. 
 It is in the hands of banks chartered by state 
 or national government, and all of them are 
 under the very closest governmental super- 
 vision. 
 
 Now for many years back, the commercial 
 banks advocated reform of the system of com-
 
 Federal I^eserve Banks 137 
 
 mercial banking, but a few years ago the poli- 
 ticians commenced to agitate reform of the in- 
 vestment bankers. I am not going to say any- 
 thing against the private bankers. It will be a 
 bad day for this country when we do not have 
 private banking houses big enough to take 
 care of the great issues of stocks and bonds re- 
 quired by our big enterprises, and the Federal 
 Reserve Banks are forbidden to have anything 
 to do with stocks and bonds. But here's the 
 point. All the speeches made by the promoters 
 of the Federal Reserve Act — from our Presi- 
 dent down — had in mind investment banking 
 while they proposed the reform of commercial 
 banking. The present Federal Reserve Banksdo 
 not touch the private bankers in Wall Street, 
 against whom all the speeches of the promoters 
 of this Act were made. It was the acts of in- 
 vestment bankers that gave any color at all to 
 this talk about divorcing speculation from 
 banking, and doing away with the issue of 
 watered stock, and stopping the enormous im- 
 proper commissions that had been earned. All 
 that referred to the business of investment, 
 private bankers, and they are not affected in 
 any way by this new Bill. So we had a little 
 confusion of thought there, and the people 
 were led to expect from this Federal Reserve
 
 138 sketches and Speeches 
 
 Act a great deal that won't happen along these 
 lines. 
 
 Another matter they were led to expect was 
 — and this will interest you business men — 
 that with these Federal Reserve Banks we 
 were somehow going to make all checks pass 
 everywhere at par. Gentlemen, I don't be- 
 lieve it can be done. I think they are going to 
 be disappointed, but that doesn't mean that 
 they are not going to modify the exchange 
 charges. They are already taking at par bank 
 drafts on their own members in each individual 
 district. Now what is the result already? One 
 Federal Reserve Bank lately reported over 
 fifty overdrafts. Instead of fifty of their mem- 
 ber banks having their reserve in the Federal 
 Reserve Bank, they had an overdraft created 
 by the Federal Reserve Bank charging to 
 these banks checks drawn on them, and not 
 waiting until they reached the banks on which 
 they were drawn. Now that is a difficult prob- 
 lem. I think they are going to modify the ex- 
 change charges, but I do not believe it is pos- 
 sible to make checks everywhere — big and 
 Httle — go at par. 
 
 I wish we had stuck to the original name of 
 these banks. You say, "What's in a name?" In 
 this case I think there is a great deal in a name.
 
 Federal Reserve Bankf 139 
 
 If we had continued to call these banks Fed- 
 eral Reserve "Associations" it would have 
 conveyed to the public mind a much clearer 
 idea of what they really are. They are a pool- 
 ing of the reserves of member banks, as I have 
 already explained to you, and they should not 
 have been called banks. That has been the 
 foundation of a great deal of misunderstanding. 
 Even our President has seemed to convey the 
 idea that these banks are going to do away 
 with the difficulties in obtaining credit. They 
 are not going to make it one bit easier for any- 
 one who does not deserve credit, to get it. I 
 have never known any one who deserved credit 
 who did not get it. I have known an awful lot to 
 get it who did not deserve it. It would also have 
 been better if only about ten per cent, of the 
 subscribed capital had been called in, because 
 the dividend to be earned would have been so 
 much less. 
 
 Then, I think it would have been much 
 better if our advice had been taken, and there 
 had not been twelve — there should only 
 have been one — with branches. If there had 
 been one it could have handled the exchange 
 situation much better than twelve. 
 
 If properly administered, however, I think 
 I have said enough to show that these banks
 
 140 sketches and Speeches 
 
 must be of great benefit to this country. When 
 my child is sick, gentlemen, I don't send for a 
 shoemaker; I send for the doctor — and if you 
 want these banks to be a success, they must be 
 run by bankers. I have the greatest respect for 
 all kinds of business men, but "to every man 
 his work." Again, the very essence of banking 
 is discrimination, and the very essence of 
 government is no discrimination, and the 
 government cannot run a bank. If these banks 
 are left to be run by the very able directors 
 elected by the members who own the stock 
 and the deposits, they will be successful. I 
 don't care how close the supervision is of the 
 Federal Reserve Board in Washington, but 
 allow the bankers to make the credits, and 
 manage the banks. They cannot be run suc- 
 cessfully by any one else. 
 
 I am very glad to say in conclusion that I 
 think the pendulum has begun to swing back 
 a little from the days of calling all great busi- 
 ness men malefactors, and trying to make out 
 that by some unfair means they all abstracted 
 their wealth from the pockets of the people. 
 I think the pendulum is beginning to swing the 
 other way. The press and the pulpit are be- 
 ginning to have a little more respect for the 
 honorably successful businessman. Gentlemen,
 
 Federal Reserve Banks 141 
 
 in these days, and with the present ideas of 
 things, what life is there, after all, better than 
 that of the honorably successful business man ? 
 To have endured early hardships with forti- 
 tude, and overcome difficulties by persever- 
 ance; to have founded or developed a large 
 business, useful in itself, and giving employ- 
 ment to many; to have achieved position, 
 fortune, independence and influence; to have 
 given largely of money to charity, and of time 
 to citizenship; to have established a character 
 above reproach; to have accumulated the ad- 
 miration, the confidence and the friendship 
 of his fellows, and to have gained all these of 
 the world, without losing the soul by avarice, 
 or starving the heart by hardness! The man 
 who has so lived has nobly lived and he 
 should find peace and satisfaction when the 
 shadows begin to lengthen, and the evening of 
 life draws on.
 
 SPEECHES III 
 
 ST. ANDREWS SOCIETY 
 
 WINNIPEG ANNUAL 
 
 DINNEIi 
 
 Toast: The day and all who honor it. 
 
 Mr. President, Sir Rodman Roblin, Sir William 
 Whyte and Gentlemen: 
 
 (Il5^(^j^ THANK you for this pleasant op- 
 ^gi^^V^fc^ portunity to return to your 
 5#3 J iiSf great city where in 1881 I paid 
 1^^ 1^ $7-Oo per week for a stair-land- 
 
 1885 I married the best girl 
 then in the town. I came here almost directly 
 from my native place — old St. Andrews, 
 Scotland, where, according to tradition, Saint 
 Regulus brought the bones of Saint Andrew 
 from Constantinople in the eighth century. 
 Immediately thereafter Saint Andrew became 
 the patron Saint of Scotland, and his festival 
 
 143
 
 1 44 Sketches and Speeches 
 
 has been celebrated on the thirtieth of No- 
 vember ever since. We are not now so particu- 
 lar as to the exact day, nor do we celebrate the 
 Apostle's sanctity in just the same manner. In 
 fact we drop the old Saint, and celebrate only 
 what he stands for — the hills and dales, the 
 history and traditions, the poetry and the 
 people of bonnie Scotland. 
 
 Scotland is but a little country — less than 
 half the size of Manitoba — a mere speck on 
 the map of the world. But the Kingdom of 
 Scotland, which is in the hearts of her sons, 
 extends o'er all the earth, and on St. Andrew's 
 day, in every quarter of the globe, Scotsmen 
 and their descendants gather, as we do here 
 tonight, to do honor to that little land. 
 
 With narrow natural resources, a soil in large 
 portion unproductive, and an uncertain cli- 
 mate, she is the stern but beautiful mother of 
 a rugged race — a race which has wandered 
 into every country, and held its own with all 
 comers. No spot on earth is too far away from 
 Scotland for Scotchmen to have reached it. 
 Go where you will, you will find them generally 
 doing well for themselves, and seldom doing 
 any one else. I knew of one called Brander, 
 who found his way to Tahiti, there married the 
 Queen, and in due time sent home his half-
 
 Si. Andrews Society Dinner 145 
 
 breed Princes to be educated at St. Andrews. 
 There are a dozen noble families in Sweden; 
 there are millions of Yankees and Canadians in 
 America; there are apparent Indians in your 
 Northwest jibbering Sioux; there are seeming 
 Frenchmen in Quebec, jabbering French, and 
 lately a freckle- faced, red-headed tribe of Es- 
 quimos is said to have been discovered near the 
 North Pole — but all of them answer to Scotch 
 names. The Scot is certainly a good mixer! 
 Perhaps it was this quality of getting on with 
 any people anywhere that led him to see the 
 vision of the Brotherhood of the race set forth 
 by the national voice of Burns: 
 
 ""Then let us pray that come it may, 
 {As come it will for a' that,) 
 That Sense and Worth o'er a the earth. 
 Shall hear the gree and a that. 
 For a that and a that. 
 It's coming yet jor a that, 
 That man to man the world o'er 
 Shall br it hers be for a' that.'' 
 
 But to those of us who were born there, 
 Scotland holds a special interest. To us it is, 
 and always will be, home. And beneath our 
 hilarity our hearts are tender as we think of
 
 146 sketches and Speeches 
 
 our parents, perchance still alive in the old 
 land, or more likely, sleeping peacefully in her 
 bosom. 
 
 To us, Scotland is largely a memory. We sit 
 down by the open fire, with no other light in 
 the room, and half dozing, our minds wander 
 back over the winding pathway of the past, 
 until there finally comes into view a little 
 Scotch laddie, trudging "with shining face" 
 and well-patched breeks to school — a laddie 
 who bears a misty but unmistakable likeness 
 to ourselves. We hear again the swish of his 
 lash as he whups up his top, or the slap of the 
 teacher's tawse on his poor tingling hands — 
 and in one or two cases of cruel injustice — 
 we wish we had that teacher now ! We accom- 
 pany the laddie's family to the village kirk on 
 the Sabbath, and, sitting on hard benches, we 
 hear them sing with full hearts — "Praise God 
 from whom all blessings flow," and we are al- 
 most startled out of our reverie by the sharp 
 contrast to our present custom of lolling back 
 on cushioned seats while a well-paid quartette 
 choir sings to us "Art Thou Weary, art thou 
 Languid?" We see the laddie again playing 
 "catty and doggie" or leap frog; fishing or gud- 
 dlin' for trout in the burn, or kicking up his 
 bare heels in the glad Springtime.
 
 Sl Andrews Society Dinner 147 
 
 Perhaps we can recall his delight as his 
 strong father throws him heels o'er head on to 
 his shoulders, and perhaps the tear dims our 
 eye as we hear again his mother calling him to 
 her knee to say his prayers, or as we again feel 
 her tenderly tucking him in bed for the night, 
 and we sigh for **the touch of a vanished hand, 
 and the sound of a voice that is still." 
 
 Or, perhaps we are fortunate enough to have 
 a nearer view by reason of a recent visit to the 
 loved scenes of our childhood. I myself spent a 
 few all-too-short weeks there a year ago. I saw 
 again matchless Princess Street, Edinburgh, 
 and I am sorry to say, equally matchless High 
 Street. I visited Lady Stairs Close, and saw 
 the winding stone steps up which Robbie Burns 
 made his way — doubtless sometimes with con- 
 siderable difficulty — to his lodgings. 
 
 I saw beautiful Abbotsford which Sir Walter 
 Scott gained — and lost — and re-gained by 
 sitting down at the age of fifty-five with noth- 
 ing but his pen to write off a debt of half a mil- 
 lion dollars for which he was legally, although 
 scarcely morally, liable. In these days of easy 
 compromise, to his everlasting honor be it said 
 that his heroic work wiped out the debt al- 
 though he himself broke down in the effort, 
 and did not live to see his aim accomplished.
 
 148 sketches and Speeches 
 
 I stood in grand old St. Giles Cathedral and, 
 not without emotion, as I thought of his poor 
 body buried in far-off Samoa, I read Robert 
 Louis Stevenson's own beautiful lines on the 
 tablet erected to his memory: — 
 
 ''Under the wide and starry sky 
 Dig the grave and let me lie^ 
 Glad did I live, and gladly die. 
 And I lay 7ne down with a will. 
 
 This be the verse you grave for fne; 
 Here he lies where he longed to be; 
 Home is the sailor, home jrom the sea. 
 And the hunter home from the hill!'' 
 
 But, as the Irishman said, everybody loves 
 his native land, whether he was born there or 
 not. Many of us are sons of the old land, while 
 many more are doubtless only grandsons. It is 
 remarkable how even stepsons, so to speak, 
 love to claim and proclaim their relationship to 
 Scotland. 
 
 On an occasion like this we are always twit- 
 ted sarcastically on our modesty — but surely 
 we Scotchmen may be allowed one night each 
 year in which to imbibe a little hot Scotch and 
 then give vent to a little hot air! And we do ad-
 
 Sr. Andrews Society Dinner 1 49 
 
 mire modesty — in its proper place. "Aye 
 keep your *eeon the ground," said a Scotchman 
 to his daughter departing for the great city — 
 "It looks modest-like, and ye micht find a 
 sixpence." 
 
 I shall no doubt be accused of boasting if I 
 recount the fact that four out of the last five 
 Prime Ministers of the Empire (before the pres- 
 ent one) were Scotchmen, — although by popu- 
 lation we should have only about one in ten; or 
 that both the Archbishops of the Church of 
 England are Scotchmen notwithstanding the 
 days of the Covenanters — or that the Bank of 
 England was founded and has generally been 
 managed by Scotchmen. Time would fail me to 
 enumerate the great positions in the Empire, 
 and in the world, filled by our countrymen. You 
 know the story of the Scotchman who claimed 
 even Shakespeare as a Scotchman, and when 
 challenged to prove it, replied, — "I canna' 
 just prove it, but we may reasonably infer it 
 from his stupendous abeelity." 
 
 The chief traits of Scottish character are well 
 known and easily recognized. The Scot is a 
 dour chiel. You cannot drive him. Neither 
 Rome nor England could ever subdue him. He 
 stuck to his independence and to his religion 
 to the death. But he helped to bring about the
 
 150 sketches and Speeches 
 
 religious liberty which the English speaking 
 race now enjoys. He is canny and holds on to 
 his money. He and the Jew are the subject of 
 unnumbered jokes on that score. Did you ever 
 hear the story of the Jew cab-driver who had 
 a Scotchman for a fare, and the Scotchman paid 
 him a quarter too much, and the Jew declined 
 to take it? No? No! and you never will hear 
 that story! 
 
 I hear that lately, at a church fair there was 
 a machine bearing the sign "Put in a penny 
 and if you push hard enough, you will get back 
 a nickel." The next day when they went to 
 clear away the debris of the fair, they found at 
 the foot of that machine a Scotchman — lying 
 dead. 
 
 Yes! these stories are all very funny. Joke 
 as you will about Scotch frugality, but let me 
 say that the oldest charitable society in Illi- 
 nois is the St. Andrew Society, and seeing that 
 this is your forty-first annual meeting, I judge 
 yours must be the first charitable society to 
 have been established here, and that the oldest 
 charitable organization on this Continent is 
 the Scotch Charitable Society of Boston. The 
 truth is, the Scot has always valued money 
 chiefly as a means to an end, — to get an edu- 
 cation, or as Burns has it —
 
 Sr. Andrews Society Dinner 151 
 
 '* Not for to hide it i?j a hedge y 
 Or for a train attendant^ 
 But for the glorious privilege 
 Of being independent.'' 
 
 And he is ready to subscribe to Kingsley when 
 he says — 
 
 '*/ wadna gie an auld bawbee 
 For ony man — wha ere he be 
 That didna hold 
 
 The sweetness 0' his mithers name. 
 The justice 0' his brither s claim ^ 
 
 ' The honor 0' a woman s fame 
 Far maer than gold'' 
 
 Some people who do not know him are fond 
 of saying that the Scotchman cannot see a joke. 
 It was Samuel Johnson who said that it re- 
 quired a surgical operation to get a joke into a 
 Scotchman's head, but the reply of the Scot 
 was both pawky and sufficient — "Dr. John- 
 son," he said, "being an Englishman, no doubt 
 referred to English jokes." 
 
 Max O'Rell, the witty Frenchman testifies 
 that the most responsive audience he ever ad- 
 dressed was in a Scottish village. It is true that 
 his humor is sometimes of a rather funereal
 
 152 sketches and Speeches 
 
 type, as for example, when the Scotch lover 
 finally managed to propose to his sweetheart 
 by taking her to the grave-yard, and after care- 
 fully pointing out the resting places of his fam- 
 ily asked "Wad ye like to lie there, Jean ?" 
 
 Again, I think it is remarkable that what- 
 ever emanates from Scotland has a distinctive 
 character of its own. Scotch theology, for 
 example, is a hard-headed, practical and logi- 
 cal system of belief. Granted the premises and 
 the conclusions are as sure as mathematics. It 
 is only fair to say, however, that theology is 
 becoming more liberal in Scotland, as it is 
 elsewhere, and harsh orthodoxy is being con- 
 fined to the smaller communities. This fact is 
 well illustrated by a story. The minister of a 
 summer resort — a liberal — found his church 
 well filled during the Summer months by the 
 visitors from the cities, but in Winter, the at- 
 tendance was very slim. "Tell me, John," he 
 said to the beadle, "why don't my own people 
 come out to hear me." "Weel, Sir," answered 
 John, "ye see, to Scotch folk there's nae com- 
 fort in a releegion without a hell." 
 
 Another religious tendency is illustrated by 
 the story of the minister who was visiting a 
 sick man when the doctor announced that he 
 had but a few minutes to live. "Mr. Macdon-
 
 St. Andrews Society Dinner 153 
 
 aid," said the minister, "what can I do for you 
 in these last moments, shall I pray?" "Na, 
 na," said Macdonald. "Then shall I read to 
 you from the Word?" "Na," said Macdonald 
 again. "Dear me," said the minister in distress, 
 "is there nothing I can do for you ?" "Ou, aye," 
 replied Macdonald, "ye can argie wi me." 
 
 Again, Scotch whiskey is quite as distinctive 
 as Scotch theology. It is also quite as logical. 
 You swallow the premises and the results are 
 certain! And their games — golf and curling — ■ 
 are they not as distinctive, as simple and 
 profound as all else about this peculiar 
 people? 
 
 I need not point out the distinctive qualities 
 of Scotch music. I do not refer to the Bagpipes, 
 which is distinctive enough, but rather to the 
 fact that there is a lilt and a rhythm to a Scotch 
 tune which is as recognizably Scotch as the 
 burr on my tongue. And I think no songs 
 ever written come so close to the life and the 
 heart of the common people as do the Scotch 
 songs. 
 
 "C^' the y owes to the knowes^ 
 Ca them whar the heather growes, 
 Ca them whar the burnie roweSy 
 My bonnie dearie y
 
 154 Sketches and Speeches 
 
 And even among the passionate love songs 
 of Southern peoples you will search far before 
 you will find an equal to Annie Laurie — 
 
 ^'Her brow is like the snow-drift ^ 
 Her neck is like the swan, 
 Her face it is the fairest, 
 That e'er the sun shone on. 
 
 Like dew on gowan lying. 
 
 Is the fa' o' her fairy feet; 
 
 And like winds in Summer sighing. 
 
 Her voice is low and sweety 
 
 Even in their qualities as fighting men, I 
 believe there is a distinctive character. There 
 are no more brilliant soldiers than the French, 
 provided they are winning, and there are no 
 more dogged fighters than theScotch when they 
 are losing. In their almost innumerable fights 
 with the English, by reason of inferior num- 
 bers and equipment they usually got the worst 
 of it. But they never stayed licked, and Scot- 
 land was never subdued. Neither are they in- 
 capable of the headlong dash. Indeed, their 
 impatience to get to close quarters with the 
 enemy sometimes cost them dear. But not al- 
 ways. It sometimes carried the day. At Water-
 
 St. Andrews Society Dinner 155 
 
 loo, when the British had withstood the brunt 
 of the French onslaughts all day, Wellington 
 finally ordered the Highland Brigade, and the 
 Scots Greys to charge. It is recorded that many 
 of the Highlanders on foot ran in between the 
 grey horses, and catching hold of the stirrup 
 straps of the riders, they charged Napoleon's 
 hitherto invincible heavy cavalry and swept it 
 from the field; and as they thus sped with eager 
 feet to meet the foe, a mighty shout rose above 
 the roar of battle — "Scotland forever." 
 
 And so, gentlemen, let us honor the day and 
 all that it stands for. Let us continue to boast, 
 at least once a year, that the blood of one of 
 earth's strongest races runs in our veins. And 
 whatever be our present allegiance, I am sure 
 we will be all the more loyal citizens if we con- 
 tinue to love the land from which we sprang — 
 the land of mountain and loch — of barren 
 moor and purple heather, — the land of tender 
 memories and leal hearts, the land of poetry 
 and romance, of stirring story and legend- 
 ary lore; the land of struggle and hardship, of 
 overcoming and achievement, the land of ever- 
 widening influence and everlasting glory!
 
 SPEECHES IV 
 
 GOLF AND BANKING 
 
 An address delivered at 
 the Detroit Bankers Club Dinner, January, 1917. 
 
 Mr. Chairman and Gentlemen: 
 i^^^^^^^f^^ ^^^ much easier to accept 
 ^^^^^ your kind invitation to dine 
 T Si^ with you and speak to you to- 
 1^1 1^ night than to select a subject 
 
 SI^ǤllESU suitable for the occasion. Upon 
 consideration, however, I de- 
 cided that instead of attempting to make a 
 speech on a subject I knew little of, I would 
 confine myself to the two things I knew most 
 about even at the risk of treating of trite sub- 
 jects. Having been addicted to golf for fifty 
 and to banking for forty years, it is at least 
 time I knew something of both, although I am 
 not so sure of my knowledge of either as I once 
 was — only the young think they know it all! 
 There must be some subtle connection between 
 
 157
 
 158 sketches and Speeches 
 
 these two pastimes for when golf, like myself, 
 emigrated from Scotland to find a larger sphere 
 in the New World, bankers took to it like ducks 
 (or Wall Street magnates) to water. They soon 
 discovered that as gold is the reserve strength 
 of the bank, so golf is the reserve strength of 
 the banker, — a store of health to be drawn 
 upon whenever the working balance is im- 
 paired. Golf and banking are each to the other 
 a means to an end. We do banking to earn the 
 money and the right to play golf — we play 
 golf to strengthen the body and clarify the 
 mind for banking. I have a theory that a bank- 
 er is worth a larger salary if he plays golf, be- 
 cause physical health is a great foundation for 
 mental alertness and hard work. Every bank, 
 however, should maintain at least one old- 
 fashioned, serious-minded officer who will stay 
 around until the cash is safely locked away, 
 while the up-to-date officers hurry oflF as soon 
 after closing hours as the next train for the golf 
 club demands! Every banker who plays golf 
 must have been struck by the analogy between 
 the Royal and Ancient Game and the honor- 
 able profession to which he belongs. In the 
 first place, both are characterized by an appar- 
 ent simplicity covering a complexity of require- 
 ments, and offering opportunities for study
 
 Golf and Ban king 159 
 
 that last through life. What could be more su- 
 perficially simple than the game of golf? It is 
 merely to knock a little ball into a little hole 
 with as few strokes of the club as possible. One 
 would suppose that all that could happen 
 would happen during the first few weeks that 
 such a game was played. Nevertheless, they 
 have been interpreting the rules to meet un- 
 usual occurrences for five hundred years, and 
 yet every year there are submitted to the 
 Supreme Court of Golf, at St. Andrews, ques- 
 tions covering new problems which the appel- 
 late court of this country (The U. S. G. A.) can- 
 not agree upon. To the mere on-looker the 
 game seems so simple that it appears too silly 
 for grown-up people to devote their time to. 
 But the cure for such a view is also simple, — 
 just let him try it! A trial will disclose the fact 
 that the game calls for numerous physical, 
 mental and moral qualities. The stance, the 
 grip, the swing, the follow-through, the direc- 
 tion, the pull, the slice, the judgment of dis- 
 tance, the tempering of force, the pitch that 
 falls dead, the pitch that runs up, the wrist 
 shot, the stiff-arm shot, the half shot, the full 
 shot — the control of the ball, the nerves, the 
 temper and the heart, — all these are subjects 
 calling for close study and long practice on the
 
 1 6o Sketches and Speeches 
 
 part of any one who hopes to master this 
 simple-looking game. A library might be filled 
 with the volumes that have been written on 
 golf, but no one feels that the last word has 
 been said, or the last lesson learned. 
 
 In the same way, banking seems so simple to 
 the uninitiated that a bank is considered a 
 good place to put a boy that is not much use 
 for anything else. And it must be admitted 
 that if the boy is merely going to learn to keep 
 a ledger no great mental qualifications will be 
 necessary. If, however, the boy is to be a suc- 
 cessful banker he ought to begin learning the 
 business by being a messenger — a very instruc- 
 tive department — and continue to learn 
 something about it by the experience of every 
 day of his life. Successful banking includes a 
 knowledge of accounts; of exchange, domestic 
 and foreign; of handling collections; of stocks, 
 bonds and securities; of bills of lading and ware- 
 house receipts; of commercial law and prac- 
 tice; of clear correspondence and of good man- 
 ners. But expert knowledge of these technical 
 subjects will not make a banker. The peculiar 
 qualifications of a competent banker can only 
 be acquired by experience, and some of them 
 only by sorrowful experience. The highest func- 
 tion of a banker is to understand and dispense
 
 Golf and Banking 1 6 1 
 
 credit, and knowledge of human nature lies at 
 the foundation of its successful operation. 
 
 To judge your applicant for a loan from the 
 way he puts it up to you requires a sixth sense, 
 developed only by experience. Terms of credit 
 are so constantly stated in terms of money 
 that few people clearly distinguish between the 
 two. But in these days of gigantic war opera- 
 tions the distinction should be plain to every 
 one. All the money in England would not car- 
 ry on her war operations for a month. But her 
 credit has carried them on for nearly three 
 years, and will carry them on for years to 
 come, if need be. Credit is the life-blood of all 
 modern business, and the banks are the hearts 
 from which it pulsates. To guide it into proper 
 channels, to keep it fluent and unpolluted so 
 that it may carry health to the minutest intri- 
 cacies of the complicated business by which 
 mankind lives — that is the task of the bank- 
 er. In short, he is a creator and dealer in credit. 
 
 Did you ever consider what a new bank 
 might do the first day of its existence? Let us 
 suppose that the bank starts with a paid in 
 capital of 1 100,000. And let us further sup- 
 pose that it has arranged to accept the ac- 
 counts of forty customers, granting to each of 
 them a line of credit of $10,000, and that all of
 
 I 6 2 sketches and Speeches 
 
 these customers come in the first day that the 
 bank is open and give their notes for 1 10,000 
 each to be placed to their credit. For the sake of 
 illustration we will suppose that the bank tran- 
 sacts no other business that first day. 
 
 At the close of the day's work the new bank 
 will have the following balance sheet: 
 
 ASSETS 
 
 Loans and Bills Receivable . . . $400,000.00 
 Cash on hand 100,000.00 
 
 Total $500,000.00 
 
 LIABILITIES 
 
 Capital paid in 1 100,000.00 
 
 Deposits 400,000.00 
 
 Total $500,000.00 
 
 It will thus have cash reserves of 25 per cent — 
 a good condition — and it will have created 
 $400,000 in loans and $400,000 in deposits 
 without using a dollar of its capital. Its loans 
 will be pieces of printed paper with signatures 
 on them, and its deposits will be just what 
 deposits always are — figures on a ledger. It 
 will also have earned certain profits in a dis-
 
 Golf and Banking 163 
 
 count account — figures on a ledger — so 
 small, however, that I omitted them from the 
 balance sheet as of no consequence! Indeed, 
 after long experience, I wonder sometimes if, 
 after all, as a banker, I have done anything but 
 monkey with figures on a ledger! And this re- 
 minds me of some old gentlemen's scores at golf 
 which are sometimes merely figures on a card ! 
 
 Wide business intelligence is also required to 
 understand the variety of enterprises demand- 
 ing credit for all kinds of purposes. A lumber- 
 man is concerned with lumber, an elevator 
 man with grain, a steel manufacturer with steel, 
 and so on ad infinitum^ — but a banker is con- 
 cerned with every line of business effort. He is 
 also expected to be an authority on the business 
 out-look; to see into the future, to tell what 
 will happen after the war, and to have a saga- 
 cious opinion ready for the newspapers on the 
 high cost of living, or railroad regulation, or 
 the President's latest note. Of course he ought 
 also to be able to make a speech suitable to any 
 occasion! A business of such varied interests 
 may well be dignified by the name of a pro- 
 fession, and offers a field wide enough to be a 
 worthy life-work for any man. 
 
 In the second place steadiness is more de- 
 sirable than brilliancy in both games. In golf
 
 164 sketches and Speeches 
 
 we are all familiar with the man who plays 
 better than he knows how for a few holes, and 
 the moment something unforseen happens to 
 him, he goes all to pieces. We also know the 
 terrific driver who would be fine if he could 
 keep on the course. Against such players the 
 less brilliant but more steady golfer, who may 
 not drive a mile, but who is always on the 
 course, will win three times out of four. 
 
 In the same way, commend me to the con- 
 servative, steady banker as compared to the 
 Napoleon of finance. Every little while in 
 banking we see a Napoleon acquire a very 
 quick reputation, make a big splurge for a 
 while, and then meet his Waterloo! A banker 
 does not need to be a genius! What he needs 
 more than anything else is common sense, 
 shrewd deliberation, combined with courage to 
 go ahead after he has carefully investigated the 
 road on which he is asked to travel. 
 
 One of my earliest experiences in banking 
 was to look up to the Manager of a bank in 
 Winnipeg at the time of the great boom, who 
 used to have a line of people waiting to see him 
 and who turned them off, granting or refusing 
 their requests for loans, at the rate of about 
 one every two minutes. Every one in Winni- 
 peg, including myself, considered him a finan-
 
 Golf and Banking 165 
 
 cial genius of the first order, but he lasted only 
 a short time, and was succeeded by a solid, 
 slow-going, shrewd man who had to clean up 
 the mess made by his brilliant predecessor, and 
 it was a very bad mess. Such cases are common, 
 and I merely wish to point out that it is much 
 happier to be the second man than the first. 
 
 A third point is that a good golf course is 
 equipped with hazards for the purpose of lend- 
 ing interest to the game, and rendering it not 
 too easy for the player. 
 
 For many years I thought that Divine Pro- 
 vidence had given us a bad banking system so 
 as to keep this country from becoming too 
 prosperous and experiencing all of the moral 
 evils which attend too much prosperity. So we 
 had panics with general suspension on the part 
 of the Banks, and all the set-back to business 
 which accompanied it. The days of suspension 
 are over, I believe, but the banker still has 
 bunkers in his course. With money rates ruling 
 at a less figure than the money costs, a contin- 
 ual increase in expenses and taxes, and a spirit 
 of antagonistic control in Washington, there 
 is little danger of the banker's course being 
 made too easy for him for some time to come. 
 
 The Federal Reserve Banks have established 
 the great principle of concentrated reserves as
 
 1 6 6 Sketches and Speeches 
 
 a basis for an elastic currency and credit system 
 and I, for one, am thankful for it. They have, 
 however, singularly failed as yet to commend 
 themselves to the country banker, or to the 
 great body of State Banks, and until they do, 
 they cannot be considered a national success. 
 The chief reason for this, I believe, is the atti- 
 tude on the part of what — not to be too definite 
 — I shall call Washington. This attitude is 
 shown in a purpose to nag the banks about un- 
 important details, to minimize banking prof- 
 its, and to apply the kind of control that near- 
 ly ruined the credit of the railroads, resulting 
 in the lack of equipment and efficiency from 
 which they, and the country, suffer today. As 
 the people in Washington are there only tem- 
 porarily, however, I am in hopes that this 
 phase may pass, and I am sure that the Feder- 
 al Reserve System, wisely administered, will 
 prove a great national blessing, and a very 
 present help in time of trouble. 
 
 To return to our analogy. Both in golf and 
 banking there are the dangers of water hazards 
 and bad lies. Water hazards are the traps set to 
 catch investment and promotion bankers, and 
 through them, the public. The letting in and 
 squeezing out of "water" in Wall Street Secu- 
 rities forms quite a part of our financial history
 
 Golf and Banking 167 
 
 but, after all, it is only incidental to Banking 
 — one of the abuses which it is almost impos- 
 sible to control, and for which Banking is not 
 alone responsible. 
 
 Bad lies, on the other hand, are the cause of 
 most of our commercial banking losses. I sup- 
 pose this is to be expected so long as we base 
 our credits chiefly on the borrowers' own state- 
 ments of their assets and liabilities. 
 
 I know that a statement to induce the bank 
 to grant credit, and a statement a little later to 
 induce the creditors to accept a composition 
 settlement must be difl^erent because the point 
 of view is changed; but how seldom we have a 
 failure where the debtor has at least told the 
 truth! Experienced bankers know an unsound 
 financial statement when they see one, and if 
 borrowers who begin to go behind would tell 
 the truth, not only the bankers would be 
 spared losses, but the borrowers would fre- 
 quently be saved by timely advice and help. 
 False statements are a crying evil, and if they 
 could be eliminated it would be the greatest 
 benefit to our business. 
 
 Two things may be done: First, we should 
 encourage the business of Chartered Public 
 Accountants more and more. If borrowers' 
 paper is to be bought on the street with prac-
 
 I 6 8 Sketches and Speeches 
 
 tically no profit, surely the least they can do is 
 to furnish the buyer, through the broker, with a 
 certified accountant's statement. An insurance 
 company will loan its money only after weeks 
 of thorough investigation — and then only on 
 property worth at least twice the amount of 
 the loan. But a banker frequently loans money 
 without security after a moment's conversa- 
 tion over the telephone, on paper made by 
 people he never saw, basing his action chiefly 
 on a few figures furnished by the borrower 
 himself. 
 
 Second, we should work for legislation by 
 the various States which would make it easier 
 to punish the obtaining of credit by means of 
 false statements. 
 
 Before leaving this subject, however, let me 
 say that the constant wonder to me is not that 
 we lose so much money, but that we lose so 
 little considering our liberal way of doing busi- 
 ness, and the keen competition that exists in 
 banking. The losses of a competently managed 
 bank do not exceed one-quarter of one percent 
 of the total loans, — a fact that indicates, as I 
 believe, that the great body of average Amer- 
 ican business men are honest and reliable. 
 
 Once more, the most important of all golf 
 precepts is "keep your eye on the ball and fol-
 
 Golf and Banking 1 6 9 
 
 low through." In other words, concentrate on 
 the object in view, and follow that object to 
 the last ounce of effort. Play your own game. 
 Do not worry about the other competitors in 
 the running. If they play better golf, and beat 
 your score, well and good — but see that your 
 score is creditable to yourself. In this way you 
 will get honorable mention, even if the prize 
 goes to some one else. Perhaps in no other 
 business is there keener competition than in 
 banking in this country. Our system, forbid- 
 ding for the most part the opening of branches, 
 has resulted in a great number of individual, 
 competing banks, and the strange thing is that 
 the general public judges the success of a bank 
 by the size of its liabilities, — that is, its de- 
 posits. Even one's own directors, when they 
 compliment one (or the reverse) on the show- 
 ing made for the "call" just published, seldom 
 go deeper than the increase or decrease in the 
 deposits. This is natural. The size of the figures 
 is the first indication of success. But we all 
 know that real success is only to be found in 
 the Profit and Loss Account. Nevertheless, we 
 are all open to the temptation of the superficial 
 showing made by deposits, — and we are all 
 inclined to think sometimes that our competi- 
 tors are not so anxious to make profits as they
 
 170 sketches and Speeches 
 
 are to please their customers, — especially 
 those who have one account with them and 
 another with us. Here is where we may learn 
 something from the successful golfer. Let us 
 play our own game. Let us determine that our 
 object is to build up a clean bank, profitable to 
 the shareholders, and having "teed" that ball, 
 let us keep our eye on it and follow through. 
 Others may beat us in the race, but if we fol- 
 low that course the outcome cannot fail to be 
 creditable to us. 
 
 Among the blessings with which golf has en- 
 riched our American life there is none greater 
 than the stimulus it has been to the growth of 
 Friendship. Before the advent of golf it was a 
 standing criticism of our busy life that there 
 was little room in it for Friendship, and that 
 such as there was was prompted by business or 
 selfish consideration, which, of course, was no 
 friendship at all. Whatever foundation there 
 was for such criticism, it is certain that friend- 
 ship born of a common interest in the grand 
 old game, and cemented by the opportunities 
 for mutual understanding and esteem which it 
 affords, is now a prominent characteristic of 
 American business and professional life. Is 
 there anything nearer happiness in this world 
 than four congenial golf affinities — I am not
 
 Golf and Banking 171 
 
 referring to that abomination, the "mixed 
 foursome" — but to four male friends playing 
 a keen game on a good course on a day in June? 
 But what of our analogy ? Can the same benef- 
 icent influence be claimed for banking? Most 
 assuredly it can! I am aware that loans based 
 on friendship alone are usually poor loans and 
 that a banker who cannot refuse an improper 
 loan to a personal friend is a weak character. 
 But that is no reason why a banker may not 
 have a good customer and a good friend in one 
 person. Indeed the proper relation between the 
 two should always be of a truly friendly nature, 
 — frank, confidential, intimate, and mutually 
 trusting. And it is a pleasant part of modern 
 banking as well as of other lines of business 
 that associations and clubs such as this have 
 largely done away with the narrow rivalries 
 and jealousies that formerly existed between 
 competitors, and that they too find it possible 
 to be friends. 
 
 Still another point in our little analogy is 
 that in golf, so in banking, as well as in life 
 generally, a man's greatest danger of non- 
 success lies within himself. He will avoid most 
 of the hazards, or get out of them without 
 greatly affecting the score if he plays a straight 
 steady game. Luck has some place both in golf
 
 172 sketches and Speeches 
 
 and in banking, — but it in a minor place. I 
 have known many banks to make serious losses 
 by reason of the misrepresentation of others, 
 but I have never known a bank to fail except 
 by reason of the banker's own wrong-doing. 
 In every case that has come under my obser- 
 vation the bank would not have failed if the 
 officers had kept their own private interests 
 separate from the bank's loans. The danger 
 line in banking is crossed when the banker and 
 the borrower get into one skin. It takes two to 
 make a game of golf — a lone player has no 
 rights — and it takes at least two — a borrower 
 and a lender — to make a proper bank loan. 
 
 I have always advocated a law forbidding a 
 bank officer, under heavy penalties, from being 
 directly or indirectly interested in any of the 
 loans of his bank. Such a law, rigorously en- 
 forced, would in time silence the cry for greater 
 security to the depositors, and probably save 
 us from unsound or vicious legislation with 
 that object in view. 
 
 Finally, golf is a game of honor. Of course all 
 games are, or should be, games of honor; but 
 in golf you trust your opponent out of your 
 sight and do not watch him. If you should ever 
 discover that he cheated, you would have no 
 further use for him in any relation of life.
 
 Golf and Banking 173 
 
 In like manner, while all kinds of business 
 should be conducted in an honorable way, there 
 are special obligations in that respect imposed 
 upon the banking business. As already stated, 
 it is the heart of the great modern credit sys- 
 tem. If the heart is sound, and the circulation 
 good, general health is almost assured. Certain- 
 ly there is nothing so bad for general business 
 as bad banking. It breeds careless credits, and 
 slip-shod methods in any community, and it 
 is not too much to say that the soundness of 
 any modern civilization is largely dependent 
 upon the honor and integrity of its bankers. 
 They are the trustees to whom the poor entrust 
 their savings that they may be loaned to the 
 rich. The standard of integrity for such a busi- 
 ness cannot be placed too high. A banker's 
 honesty must not be a matter of question. 
 Nothing tricky, underhanded, or crooked on his 
 part should be condoned. Unless he is natural- 
 ly straightforward, he should not be in thebank- 
 ing business. In banking, as in golf, have no 
 dealings with the men you cannot fully trust. 
 For me, at least, there is no game better than 
 golf, and no business higher than banking. 
 Golf is a science, — the study of a lifetime, in 
 which you may exhaust yourself but never 
 your subject. It is a contest, a duel or a melee,
 
 174 Sketches and Speeches 
 
 calling for courage, skill, strategy and self-con- 
 trol. It is a test of temper, a trial of honor, a 
 reveal er of character. It affords the chance to 
 play the man, and act the gentleman. It means 
 going out into God's out-of-doors, — getting 
 close to nature, fresh air, exercise, a sweeping 
 away of the mental cobwebs, genuine re-crea- 
 tion of the tired tissues. It is a cure for care — 
 an antidote to worry. It includes companion- 
 ship with friends, social intercourse, oppor- 
 tunity for courtesy, kindliness and generosity 
 to an opponent. It promotes not only physical 
 health but moral force. 
 
 Banking as a profession is second to none in 
 importance and power within commercial lines. 
 It appeals to the ambition of great minds. 
 There is scarcely any limit to its possibilities. 
 Many of the most colossal fortunes in the 
 world have been honorably made in its pur- 
 suit. Its credit system binds the whole world 
 together by invisible cords of mutual interest 
 and confidence, and is a prime promotor of 
 peace. Alas these ties have been sadly broken 
 of late! In its humbler manifestations it en- 
 courages industry and thrift, opposes lawless- 
 ness and makes for good citizenship. 
 
 And so, busy brother bankers, our lives, if 
 not set to the very highest tasks, may at least
 
 Golf and Banking 175 
 
 be useful to our fellow men and honoring to 
 ourselves ! 
 
 The life of a successful banker, though main- 
 ly devoted to lending money and getting it 
 back again — naturally a hardening process — 
 need not be a sordid one. He, too, may have his 
 ideal which, however unattainable, is the mark 
 at which he aims, and to which he aspires. 
 
 An ideal may be constructed by assembling 
 the good qualities and eliminating the faults of 
 many men. Applying this formula our ideal 
 banker would be something like this: — A man 
 of good presence, — not so young as to be 
 ''smart" nor so old as to be stale — a man with 
 plenty of successful experience behind him, 
 but one who is still forward-looking. His face 
 has the lines of firmness and decision, but is 
 saved from hardness by kindly eyes and apleas- 
 ant smile. His manner is courteous, and indi- 
 cates rather an inclination to grant a request 
 than to refuse one. Even when he says "No" 
 he recognizes that special courtesy is required 
 to make it inoffensive. Any one can say "Yes" 
 courteously! He promises rather less than he 
 performs, — never more. His word may be 
 hard to obtain, but once given it is never 
 broken. He enjoys the absolute confidence of 
 his directors from whom he has no secrets. He
 
 176 sketches and Speeches 
 
 is the financial doctor and father-confessor 
 of his customers who consult him instinctively. 
 His employes look up to him with respect, 
 touched by affection. He stands in his commu- 
 nity for progress and integrity in business, civic, 
 and social affairs. He is devoted to business, 
 but not enslaved by money. He is captain of 
 his own soul, and keeps it above business — free 
 from sordidness and meanness. He knows that 
 a man's life consisteth not in the abundance of 
 the things which he possesseth, and he cares 
 for the more excellent things of the spirit. 
 
 *'The grace of friendship, mind and heart 
 Linked with their fellow heart and mind, 
 T'he gains of science, gifts of art, 
 'The sense of oneness with our kind. 
 A thirst to know and understand — 
 A large and liberal discontent. 
 These are the gifts in life's rich hand. 
 The things that are more excellent.'' 
 
 Lastly, our ideal banker plays golf — two or 
 three times a week at his prime. As the years 
 pass he does less business and plays more golf; 
 and old age — robbed of its terrors by the 
 grand old game — finds him looking back con- 
 tentedly on a well-spent life. And when the
 
 Golf and Banking 177 
 
 hour of "sunset and evening star" draws on, 
 and the shadows begin to lengthen about him. 
 he can look forward with the quiet courage 
 that has characterized his whole life, and say 
 with the aged Whittier — 
 
 "/ know not where His islands lift 
 Their fronded palms in air; 
 I only know I cannot drift 
 Beyond His love and care. 
 And so beside the silent sea 
 I wait the muffied oar 
 I know no harm can come to me. 
 From Him on land or shore.''
 
 SPEECHES V 
 
 INTKODUCTION TO 
 GENERAL DA WES 
 
 Following some other remarks; 
 Country Club, Evanston, 191 9 
 
 i^^^^i^^t^^^^ ^ '^^^ "*^^ come here to make a 
 ^pS^i^^^S speech. My very pleasant duty 
 
 BJ® is only to present to you the 
 
 .Ml ^~^ ^p three men who are to address 
 
 First: There is Charles G. 
 Dawes, engineer, lawyer, banker, gas-magnate, 
 philanthropist and public-spirited citizen. He 
 is one of the foremost men in the great city of 
 Chicago, and has a national reputation as a 
 financier and business man — having served 
 his country as Comptroller of the Currency, 
 made a huge success in private business, built 
 up from its inception one of our great Banks, 
 given largely of his time and money to philan- 
 
 179
 
 I 8 o Sketches and Speeches 
 
 thropy, and been a leader in many political 
 movements, both civic and national. 
 
 Then, second, there is Brig. Gen'l. Dawes, 
 — the man, who, when his country needed 
 him, dropped all of his manifold personal inter- 
 ests and offered his services for the Great War. 
 In that war we discovered that there are some 
 jobs that require military training, and some 
 that require business training. To know how to 
 handle men on the field of battle is one thing — 
 and a supremely important thing. To know 
 how to supply these men with food, clothing, 
 ammunition and all the numerous require- 
 ments of the modern soldier is another thing. 
 To do that requires some one who will cut 
 through red tape, make decisions, take respon- 
 sibility and get things done. And, therefore, it 
 was not long before General Dawes was found 
 to be the right man to fill the place of Com- 
 mander of the S. O. S. — the Service of Sup- 
 ply. The universal verdict is that he handled 
 that great task with comsummate skill and 
 ability, and that the American Army was al- 
 ways well fed and well supplied. And so he did 
 his great bit in the colossal struggle, cov- 
 ered his name with international distinction, 
 and earned the honors of which we are all so 
 proud and he is so modest.
 
 Introduction to Dawes i 8 i 
 
 And, Thirds there is Charlie Dawes — our 
 friend and neighbor — musical, jolly, generous 
 Charlie Dawes, who has done so many kind 
 things, who has helped so many young men on, 
 who has raised and reformed so many after 
 mistakes and failures, whose heart and purse 
 are ever open to distress or want. I don't know 
 what the "G" in his name stands for, but I 
 have often thought it stands for Bunyan's 
 character of "Great Heart." For this man has 
 never been narrowed or hardened by avarice, 
 and has always found time to do good. Even 
 at the height of his hard work, and under the 
 strain of his great responsibilities in Paris, he 
 found opportunity and time to do the kindest 
 things, as I, who had a daughter there in deep 
 distress, can testify. 
 
 These three men — all in one skin — make 
 a personality and a character for whom no job 
 within the gift of this nation is too big — and 
 it is now my great pleasure and honor to pre- 
 sent him to you as the Guest of Honor and 
 Speaker of the evening, 
 
 Mr. Dawes.
 
 SPEECHES VI 
 
 TJ^E DUTY OF T/IE 
 
 BANKEH AND TJ^E 
 
 BUSINESS MAN IN 
 
 WAH FINANCE 
 
 A Speech Delivered to the Convention 
 
 of the Chamber of Commerce of the United States, 
 
 Chicago, June i, 1918 
 
 m'j^vERY nation has three lines of 
 ^m defense. They may be called 
 
 W^ T7 W^ Wisdom, Might and Money' 
 ® ^ IS When Wisdom has failed 
 
 __ failed, 
 
 ^^S® through diplomatic means, to 
 settle a difficulty with another 
 country the relations with that country are 
 broken off, and recourse is had to the second 
 line of defense — Might, the Might of the 
 manhood of the nation. This resource of the 
 nation, however willing or patriotic, cannot 
 make a single move without the support of the 
 
 183
 
 184 sketches and Speeches 
 
 third line — Money. To wage war on a modern 
 scale, enormous sums of money must be raised 
 by any first-class nation engaged in conflict. 
 
 War is a great test of character. This nation 
 is being tested now. We failed in our Wisdom. 
 Our diplomacy which was exercised for the 
 purpose of keeping us out of the Great World 
 War failed of its object. It failed because of the 
 unscrupulous character of the enemy. But we 
 have not failed in our second line of defense. 
 Already we have an army in France, and 
 1,500,000 of our bravest and best, earnestly 
 training for what lies before them and anxious 
 to be there. We have not failed in our manhood. 
 
 The question now is, are we going to fail in 
 our third line of defense — Money? We have 
 not failed so far. The largest single loan ever 
 put out by this nation before the present war 
 was $198,000,000 for the Spanish-American 
 War. And now we have successfully put 
 through three Liberty Loans — the first of 
 $2,000,000,000 and the second of $3, 8000,000,- 
 000, while a third loan of $3,000,000,000 has 
 just been oversubscribed by $1,166,000,000. 
 
 Early Estimates as to War's Duration 
 
 When this war was started financiers were 
 generally of the opinion that it could not be
 
 War Finance 185 
 
 waged on the modern scale for more than six 
 months, or possibly a year. But here we are, in 
 the fourth year of the war, and there seems to 
 be no sign of it coming to an end from financial 
 exhaustion. The question naturally arises — 
 Where does all of the money come from to be 
 loaned in such enormous sums to the various 
 governments engaged in the war? An answer 
 to this question puzzles many minds. The an- 
 swer, however, is simple enough. The money 
 does not come from anywhere. It is not a 
 money transaction. It is a credit transaction. 
 Unfortunately the terms of credit are stated 
 and measured by terms of money. We bankers 
 constantly speak of loaning money to our cus- 
 tomers, whereas we really loan them the bank's 
 credit. For example: When a customer's note 
 for $1,000 is discounted by a bank, and the 
 proceeds placed to the customer's credit, that 
 bank's loans and that bank's deposits are im- 
 mediately increased by $1,000, but there is 
 not a dollar more or less money in the bank 
 than before the customer offered his note. The 
 bank, without the use of any money whatever, 
 has created a credit of $1,000, which serves 
 the purpose of money to the borrower. What 
 the bank's customer does on a small scale, the 
 Government is doing on an enormous scale.
 
 I 8 6 Sketches and Speeches 
 
 The bank customer's note is only a scrap of 
 paper, but it represents the property, the char- 
 acter and the honor of the maker. A Govern- 
 ment Bond costs only the engraver's bill to 
 produce, but it stands for all the taxable prop- 
 erty, the character and the honor of the 
 American people. But there will be neither 
 more nor less money in the country after the 
 present Government loan has been floated than 
 there is today. 
 
 Modern Credit System 
 
 The Modern Credit System deals in a kind 
 of element closely akin to water. This is why 
 we talk of liquid assets or the floating of a loan. 
 The modern credit system may, therefore, be 
 likened to a sea on which there are already a- 
 float many credit craft. All national debts, all 
 international trade balances, all the stocks and 
 bonds dealt in on all the stock exchanges of 
 the world, all bank loans, all bank deposits, all 
 paper money, all bills and accounts receivable 
 or payable — all of these may be said to be 
 vessels already afloat on this sea of credit. The 
 question, therefore, is not, where does the 
 money come from, but is there still room in this 
 sea of credit for another vessel of tremendous 
 proportions ? If there is, it may be safely floated.
 
 War Finance 187 
 
 Now the Credit System is in the hands of 
 the bankers — public and private. Just as 
 production is in the hands of the farmer, the 
 miner and the manufacturer — just as trans- 
 portation is in the hands of the railroad man, 
 so credit is in the control of the banker. In war 
 time this is a heavy responsibility. As a whole, 
 bankers — chartered and private — have so 
 far stood the test splendidly. And whereas the 
 farmer and manufacturer are being allowed at 
 least double their normal profits for anything 
 they do for the Government, the bankers have 
 given their time, their organizations and their 
 best efforts to providing the Government with 
 credit, not only without any remuneration, 
 but at considerable expense and loss. While 
 this is unfair, and quite at variance with the 
 practice of our Allies, it is all the more honor 
 to American bankers. 
 
 All Energies Devoted to Country 
 
 But with or without remuneration it is the 
 duty of all banks and bankers to devote their 
 resources, and bend their energies to the ut- 
 most in floating these enormous Government 
 loans. And this must be done without undue 
 restriction ot credit to their ordinary customers 
 so that general business may be active and
 
 I 8 8 Sketches and Speeches 
 
 profitable as a basis for the sound financial con- 
 ditions which must prevail if the war is to be 
 won. What is needed is the most extensive co- 
 operation between the public and the banks. 
 The banks cannot do it alone. The public, 
 aided by the banks, must take the greater part 
 of the bonds. If they do not, the banks will be 
 compelled to take them. But should that hap- 
 pen, commercial credit would have to be so 
 curtailed that the public would suffer greater 
 inconvenience and much greater loss than if 
 they took the bonds in co-operation with the 
 banks. The undertaking is a mutual one. To 
 the extent that the banker induces his custo- 
 mer to buy the bonds, the banks will be re- 
 lieved from taking them, and to the same ex- 
 tent they will be able to continue commercial 
 credits to their borrowing customers. 
 
 In accomplishing these great tasks which 
 lie before them, banks will be forced to great 
 expansion — inflation, if you like — of credit. 
 With costs doubled, business cannot be main- 
 tained and the Government supplied with ad- 
 ditional billions without great expansion of 
 credit. In a word, the war will be lost, and all 
 will be lost, unless we find the means for tre- 
 mendous expansion and are willing to use them 
 These means, thank God (I say it reverently)
 
 fVar Finance 189 
 
 are ready at hand. The Federal Reserve Sys- 
 tem, adopted since the war broke out, pro- 
 vides ample means. Can any banker imagine 
 where we would now be without the Federal 
 Reserve Banks ? Can any one imagine floating 
 a five or six billion Liberty Loan on a suspend- 
 ed banking system ? Then let us not only thank 
 God for the means — but let us not be afraid 
 to use them. One of the hardest-dying preju- 
 dices among bankers is that against showing 
 rediscounts or bills payable. It is dying in the 
 centers, but still very much alive in the coun- 
 try towns. It must be overcome if the country 
 banker is to do his full share in support of the 
 Government. Instead of a subject for crit- 
 icism it should be a badge of honor to show 
 rediscounts, or bills payable in connection with 
 the floating of Liberty Loans. 
 
 Use of Credit in Bond Purchases 
 
 On the other hand, the question which 
 every loyal American business man must ask 
 himself is not — "Have I, or has my firm or 
 my corporation, any money to spare for Gov- 
 ernment bonds ?" Few business men have much 
 idle money. The question is, "How far can I 
 use my individual credit and the credit of my 
 business with my bank in the purchase of
 
 190 sketches and Speeches 
 
 Government Bonds?" If he carries his share 
 for some time he may lose some difference in 
 interest — a small sacrifice for patriotism — 
 but if he will carry them long enough even 
 that loss will be regained by the premium the 
 bonds are sure to command after the war is 
 over. It is going to be hard to keep at par such 
 quantities of bonds as are being issued. Busi- 
 ness men may choose to take the loss of the 
 market discount which will never be severe by 
 selling their share of each issue, and thus being 
 ready for the next. I know that such a course 
 has been condemned in some quarters, but I 
 think unwarrantably. The final resting place 
 for Government bonds is in the strong box of 
 the investor. The funds of life and fire insur- 
 ance companies, of educational, charitable and 
 benevolent institutions, of rich estates and of 
 retired business men, and that part of the in- 
 crement derived from former investments 
 which the holders do not spend — these are 
 the final absorbers of Government bonds. 
 When a loan is floated by the Government, it 
 gets the money and its need is met. Now, if an 
 active business man chooses to sell his bonds at 
 a loss to some of the final absorbers above 
 noted, and thus be ready to take his proper 
 share of the next loan, I think he should be
 
 War Finance 191 
 
 commended — not criticised. This does not 
 apply to the small saver-investor, but the 
 same principle holds good with commercial 
 banks, whose funds should not be tied up per- 
 manently in Government bonds because they 
 are needed to carry on business undertakings 
 whose productions the war demands. It is as 
 important for the war that Chicago banks con- 
 tinue loans to the packers as it is that Liberty 
 loans should be floated. If $100,000 be the ex- 
 treme limit that a business man can take care 
 of through his bank, he furnishes the Govern- 
 ment with that amount and can do no more. 
 But by selling as above suggested, he can fur- 
 nish the Government with $100,000, every 
 time it needs it, and if he is willing to take a 
 loss by so doing, all the more credit to him. 
 
 War Savings Stamps, etc. 
 
 But Liberty Loans are not all of War Fi- 
 nance. There are greatly increased taxes to be 
 paid. War Savings Stamps to be sold, and war 
 benevolences to be supported. 
 
 Increased taxes are derived from increased 
 incomes and increased business profits — the 
 larger the incomes and the profits, the greater 
 the taxes for war purposes. Yet some voices 
 are raised in favor of poorer general business.
 
 192 sketches and Speeches 
 
 They say everything not necessary for the war 
 should be cut down or cut out. I do not think 
 so. About the worst thing that could happen at 
 the present time would be a fit of the blues 
 among business men generally. We cannot 
 have ''business as usual." Business must be 
 modified to suit conditions; some kinds of 
 business must suffer, and some must be aban- 
 doned but, speaking generally, "better busi- 
 ness than usual" would be a fine thing, and 
 after we get over our funk I believe we are 
 going to have it. Business better than usual 
 that we may pay larger taxes, that we may the 
 more easily absorb Liberty Loans, that wages 
 may be higher and saving easier for the mass- 
 es, that the huge funds for the comfort and 
 help of our fighting men may be freely given! 
 You cannot finance a war on a psychology of 
 gloom. Whatever may be necessary in individ- 
 ual exceptional cases, therefore, I think every 
 effort should be made for the encouragement 
 of business as a whole. 
 
 Business is never the most important thing 
 in life. It should never be more than the means 
 to an end. The all-important thing now is to 
 win the war. All business must be subordinated 
 to that end. The banker's duty is clear. He 
 must give himself, his bank, his influence, his
 
 War Finance 193 
 
 credit to the Country's Cause. The duty of the 
 business man is equally clear. He must use the 
 means offered him by our new elastic banking 
 system and be willing to go into debt, at least 
 temporarily,to the limit of his resources in order 
 that the Government's necessities may be 
 promptly met. His part can never be as glo- 
 rious as that of the soldier who offers his all, 
 but it is splendidly practical and patriotic, for 
 without it the soldier's heroism would be in 
 vain. This is no time to take counsel of timid 
 prejudices. We must go forward boldly with 
 broadened minds and enlarged vision if we are 
 to carry our share of the great task which 
 confronts our country and its Allies — the 
 task of destroying the spirit of autocracy, con- 
 quest and oppression and establishing on 
 lasting foundations self-government, justice 
 and liberty.
 
 SPEECHES VII 
 
 INTI(ODUCING 
 MAKSJ^AL J OFFICE 
 
 Dinner in His Honor 
 Commercial Club, Chicago, February, 1922 
 
 Fellow Members^ Ladies and Gentlemen: 
 
 ^^Vmi^m^ from the President of the Club, 
 
 P^ii Mr. Samuel Insull, explaining 
 
 fe^ ^ ^p ^^s absence tonight. While we 
 ^(|g^^ all regret Mr. Insull's unavoid- 
 ^^^^^ able absence, I accept with 
 
 pleasure the duty which he has laid upon me 
 of appearing in his stead on this occasion. 
 
 I should like to say in the first place that 
 the selection of a Scotchman to welcome a dis- 
 tinguished Frenchman is not at all inappro- 
 priate, for readers of the History of France and 
 Scotland know that a friendship of a very real 
 kind has existed between the two countries for 
 
 195
 
 196 sketches and Speeches 
 
 centuries. In the days of long ago they fre- 
 quently made common cause against England, 
 and when "Knighthood was in Flower" and 
 the only profession worthy of a gentleman 
 was that of Arms, young Scotchmen frequently 
 offered their swords to France so that they 
 might learn their business and possibly achieve 
 distinction in their profession. Sometimes they 
 were accompanied by bands of ragged, but 
 sturdy, followers who could fight like the dev- 
 il, and subsist for weeks on a little bag of oat- 
 meal! Inter-marriages between the two coun- 
 tries in those days were of frequent occurrence. 
 The first marriage of Mary Queen of Scots to 
 the dauphin (afterwards the King) of France 
 was one of the links between the two countries, 
 and her tragic story still appeals to romantic 
 hearts in both. The result of all of this was, as 
 I have already stated, that a very real and en- 
 during friendship was established between the 
 French and the Scotch. 
 
 It may interest you to know what more than 
 one Frenchman has told me — that there is a 
 proverb common in France "Genereux comme 
 un Ecossais" which (as you probably do not 
 follow my French) means "Generous as a 
 Scotchman. " Whether the French are more dis- 
 cerning than other people, or whether they
 
 Introducing Marshal Joffre 197 
 
 are given to satire in their proverbs, I have 
 never cared to ascertain! 
 
 There is another international friendship, 
 however, more pertinent to this occasion — the 
 friendship between France and the United 
 States of America which was established at 
 the birth of this nation, and which has now 
 flourished uninterruptedly for a century and a 
 half. 
 
 It is true that some slight misunderstand- 
 ings at the recent Conference on the Limita- 
 tion of Armaments beclouded this friendship 
 for a moment, but this has passed away. The 
 treaties have been agreed to, the sun of inter- 
 national friendship again shines brightly, and 
 while we must not expect too much from the 
 results of the Conference, I think it is not too 
 much to say that a step forward has been 
 taken looking to the time when Conference and 
 Conciliation shall take the place of blood and 
 iron in the settlement of international dis- 
 putes. 
 
 At this moment another International Con- 
 ference of equal importance is being held at 
 Genoa. Its difficulties are almost insurmount- 
 able, but we may hope that some practicable 
 business-like way may be discovered that will 
 make it possible for the transfer of some of
 
 198 sketches and Speeches 
 
 America's surplus gold to some European 
 countries who are badly in need of its stabi- 
 lizing qualities. 
 
 Let me say that in my opinion the recovery 
 and re-construction that have already taken 
 place in France are not generally appreciated in 
 this country. France cannot pay her debt to 
 America at present — nor can Great Britain 
 — but she is at work, and is now taxing her 
 people, and facing her problems with the same 
 courage she showed in fighting the war. France 
 will pay in time, and the sooner a way is found 
 for us to help her now, the sooner will she be 
 able to liquidate her foreign debts. 
 
 Friendship is the key-note of this happy 
 occasion. Our Guest of Honor is not in this 
 country in any official capacity, and we are 
 simply entertaining him as one of our most 
 distinguished friends from France. Friendship 
 includes confidence in each other and admira- 
 tion for each other's qualities. We Americans 
 believe that the French people are great in 
 every department of human endeavor. In art, 
 music, and literature, or in thrift, industry, 
 and finance they have few equals and no su- 
 periors, and they would all rather die for their 
 country than leave it. We are fortunate indeed 
 to be the friends of such a people.
 
 Introducing Marshal Joffre igg 
 
 But, "A friend in need is a friend indeed," 
 and it was the happy privilege of America to 
 re-pay the help given to us by France in 
 achieving our independence by sending two 
 millions of our bravest and best to help France 
 and her Allies in the recent war. 
 
 While America's losses were light compared 
 to those of France, still a goodly number of 
 American Boys now lie asleep in the bosom of 
 the country they helped to save, constituting 
 a sacred pledge of a friendship which should be 
 everlasting. 
 
 This is not the first occasion that the dis- 
 tinguished guest of the evening has honored 
 us by his presence in Chicago. None of us who 
 were present at the great meeting in the Audi- 
 torium when the Marshal was accompanied by 
 Mr. Viviani, will ever forget that historic occa- 
 sion. 
 
 We members of the Commercial Club are 
 proud to remember that it was one of our 
 own number, Mr. Edgar A. Bancroft, who so 
 eloquently and felicitously expressed the heart 
 of Chicago at that time. Mr. Viviani held the 
 audience spell-bound, although most of us did 
 not understand the language, and who will ever 
 forget the thrilling moment when the great 
 French Orator saluted thegreat French Soldier ?
 
 2 o o Sketches and Speeches 
 
 But in our minds there is another time and 
 scene which are indelibly connected with the 
 name of the Great Soldier we are here to honor. 
 We must turn our minds back to September 
 1 9 14 — seven and a half years ago. Belgium 
 had been martyred in a heroic but vain at- 
 tempt to stop the mighty German host. The 
 British "Contemptibles" had fought and re- 
 treated and fought, and died in vain. The 
 Germans were at the gates of Paris, the French 
 Government had withdrawn to Bordeaux. It 
 seemed that the enemy was about to succeed 
 in carrying out his long-planned short and 
 triumphant war. Our hearts were filled with 
 fears and forebodings. When suddenly we 
 learned in a laconic message from the man we 
 honor tonight that he had rolled the green- 
 grey hosts back sixty miles, that they had been 
 driven across the Aisne and had been compelled 
 to dig themselves into the mud where they 
 were destined to remain for many months. 
 Paris was saved, France was saved. The Allied 
 Cause was saved — Government of the people, 
 by the people, for the people had not perished 
 from the earth. 
 
 It was the result of a stroke of strategic 
 genius of the first order. How it was accom- 
 plished is still so much of a mystery that it has
 
 Introducing Marshal Joffre 201 
 
 been well named the "Miracle of the Marne." 
 It is now my great honor to present to this 
 company the man whose name will be forever 
 enshrined in History as the Author of that 
 glorious Victory, 
 
 Marshal Joffre.
 
 SPEECHES VIII 
 
 T/IEODORE ROOSEVELT— 
 THE AMERICAN CITIZEN 
 
 One of Several Speeches 
 
 made at Memorial Service for Theodore Roosevelt, 
 
 Presbyterian Church, Evanston 
 
 '||^^^|HE part of this service assigned 
 to me should have been given to 
 a preacher, for no better text 
 for a sermon on Citizenship 
 could be found than the life of 
 Theodore Roosevelt. 
 Few of us can hope to follow him as a "schol- 
 ar in politics," and probably none of us will 
 get the chance to imitate him as President, 
 but we may all — to the extent of our ability 
 — try to follow his shining example as a 
 Citizen. 
 
 He was the greatest American Citizen of his 
 generation, as well as one of the greatest 
 Citizens of the World. We loved him as an 
 
 203
 
 2 o\ Sketches and Speeches 
 
 American Citizen and we were proud of him as 
 a Citizen of the World. As a Citizen of the 
 World he made friends among many of the 
 earth's great ones. Emperors, Kings, and 
 Statesmen made much of him, but he remained 
 always, and in all circumstances, distinc- 
 tively an American — the most representa- 
 tive American known to the Great World. 
 
 As such we honor him, but it was for his 
 more ordinary qualities as an American that he 
 was so greatly beloved. First, he was thor- 
 oughly democratic. Born of one of the old 
 Dutch Knickerbocker families, he was as near 
 an aristocrat as this country produces. But 
 college professors, literary people, and forward 
 looking reformers were no more ardent in their 
 admiration for him than the Plainsman, the 
 Cowboy, and the Common Soldier. He could 
 be at home with all sorts and conditions of men 
 and make them feel at home with him — and 
 there is no truer mark of a gentleman than 
 that. The relations between the different 
 classes of our citizens is one of our great prob- 
 lems. What a help it would be to a proper un- 
 derstanding of each other and to a fair adjust- 
 ment of all our disputes and jealousies if all 
 American Citizens could cultivate the spirit of 
 Theodore Roosevelt!
 
 Theodore 1(00 seve/t 205 
 
 Second: He was ardently patriotic. People 
 might differ on his policies. Indeed, everybody 
 was enthusiastic about his actions as a public 
 man — either for them or against them. He 
 was the kind of character that one had either 
 to follow or oppose — and his opponents some- 
 times outnumbered his supporters — but in all 
 his career, no one ever questioned the purity of 
 his patriotism. He would gladly have died for 
 his country at any moment of his life. As he 
 grew older he lost none of his fiery enthusiasm 
 for any cause he believed in, but he gathered 
 wisdom with the years, and in the troublous 
 times of the Great War, I think his was the 
 truest American voice, and his fearless leader- 
 ship appealed to all red-blooded patriotic men. 
 The word "neutrality" was not in his vocabu- 
 lary, and he was the first of our leaders to 
 recognize the moral issues involved in the War. 
 Having recognized them, nothing short of 
 actual participation in the fighting would sat- 
 isfy him, but disappointed in that he had to al- 
 low his four fine sons to do his fighting for him. 
 
 His patriotism was marked by unfailing 
 courage and sublime faith. He never shirked 
 any problem and he never lost faith in the 
 United States of America. In the difficult pe- 
 riod of reconstruction and readjustment upon
 
 2 o6 sketches and Speeches 
 
 which we are now entered, may we all be 
 guided by a similar spirit! 
 
 Third: He was clean and true in his private 
 life. So many great men in history have not 
 stood the test of private morality that this 
 common virtue is worth emphasizing in honor- 
 ing a great man dead. It used to be considered 
 that so long as a public man was publicly hon- 
 est, it was impertinent for any one to inquire 
 into his private life. /\nd even after we had 
 outgrown that notion, how many public men 
 have had private skeletons in their closets 
 which had to be closely guarded by their 
 friends. 
 
 But the man whom we honor tonight stood 
 with all the force of his great personality and 
 his commanding position for whatsoever things 
 were pure, lovely, and of good report in Amer- 
 ican life. He was a far-seeing Statesman and he 
 knew that any nation stands or falls by what 
 its homes mean to it — by the way it regards 
 womanhood — by the decency of the average 
 life of its citizens. 
 
 And so by pen and speech, and above all by 
 personal example, he stood for the sanctity of 
 the x^merican home. Perhaps no virtue is more 
 conspicuously needed in American life than the 
 virtue of reverence — reverence for authority,
 
 Theodore Roosevelt 207 
 
 for Law, for Home, for God. And in this direc- 
 tion, no influence in our day was more helpful 
 and beneficent than the private life and char- 
 acter of the Great American Citizen, whose 
 passing we mourn tonight. 
 
 There are many other attributes of our dead 
 hero which might be enumerated, but they are 
 known to all. I have touched lightly upon 
 what seem to me to be the fundamental ele- 
 ments of his noble character as an American 
 Citizen. When a man stands right with his 
 home, with his community, with his country 
 and with the world, you may be sure he stands 
 right with his God. During the past four years, 
 this world has lost and The World Beyond has 
 gained many of our bravest and best. Yet I 
 think there was some excitement in Heaven 
 last Monday morning, and that myriads of 
 spirits rushed to meet Theodore Roosevelt, 
 saying to each other, "Here comes a Great 
 Soul!"
 
 SPEECHES IX 
 
 WAH AND CREDIT 
 
 An Address Delivered at 
 
 Luncheon of the Canadian Club, Montreal, 
 
 January, 1923 
 
 My Lord Shaughnesseyy Mr. Chairman and 
 Gentlemen: 
 
 i^^t^iW^}^^^^ ^^ ^^y ^^^^ ^^^^ -^ keenly ap- 
 y^^m^H^^^^ preciate the honor and privi- 
 
 lege of being your guest today 
 ^ As I have been a Member of the 
 S®^fcS Canadian Club of Chicago for 
 
 many years, I feel that I am al- 
 most one of you and I can, therefore, speak to 
 you very informally. I want you to know that 
 I did not travel all the way from Chicago to 
 make this speech. My egotism would hardly 
 carry me so far! I am here primarily on a very 
 pleasant mission; namely, as a Member of an 
 American Bankers' Committee to confer with 
 a Canadian Bankers' Committee on Canadian- 
 
 209
 
 2 I o Sketches and Speeches 
 
 American Relations and to see what can be 
 done by Bankers to improve and cement them 
 into an abiding friendship. I do not know 
 what can be accomplished by these Commit- 
 tees, but I can assure you that we are glad to 
 be here and anxious to try. The business done 
 between the two countries runs about a billion 
 and a half dollars per annum. You are our 
 second best customer, our best being the 
 Mother Country. I think we are your best 
 customer. About two-thirds of your imports 
 come from the United States, and fully half 
 of your exports go there. Surely there is occa- 
 sion for the friendly and cordial relations which 
 already exist between us, and if these can be 
 still further improved it ought to be done. 
 
 Bankers' Speeches are nearly all on one sub- 
 ject these days — the financial aftermath of 
 the Great War — how far the world has re- 
 covered from it and when, if ever, it will get 
 back to stabilized conditions. 
 
 General Sherman truly said that "War is 
 Hell," and if I remember my early training, 
 Hell was supposed to last a long time! One of 
 War's characteristics is that it does not stop 
 when it is over. Financially the Great War is 
 still going on, and no one here is going to live 
 long enough to see the last of it. Financially,
 
 War and Credit 211 
 
 war is a debauch. Conservatism, which usually 
 rules finance, is thrown over. No extravagance, 
 no borrowing, no inflation of credit is too great 
 if only it will help win the war. To understand 
 what war does to finance we must see clearly 
 the distinction between money and credit. To 
 illustrate: If a needy acquaintance comes to 
 me with a hard-luck story and asks for a tem- 
 porary loan of fifty dollars, and if I am soft 
 enough to grant it, I take fifty dollars out of 
 my pocket, kiss it good-bye, and hand it to 
 him. That is a loan of money. But if a custom- 
 er of mine comes into my bank, and asks for 
 a loan of fifty thousand dollars and I grant it, 
 no money is involved in the transaction. He 
 simply makes a note and my discount clerk 
 makes an entry or two on the books, and be- 
 fore my customer has left the bank its loans 
 and its deposits are each increased $50,000.00 
 but there is neither more nor less money in 
 the bank than when he came in. That is an 
 expansion of credit. By the use of a mere scrap 
 of paper and a few figures on a ledger the cus- 
 tomer and I have created a credit which, so far 
 as meeting his requirements is just as good as 
 cash. Perhaps next day my bank needs to in- 
 crease its reserves in the Federal Reserve Bank, 
 and then I endorse my customer's note for $50,-
 
 2 12 Sketches and Speeches 
 
 ooo.oo send it over to the Federal Reserve Bank 
 and they re-discount it and place the proceeds 
 to the credit of my bank. We now have bank 
 deposits increased $100,000.00 and credit ex- 
 panded a similar amount by that scrap of paper 
 and further figures on a ledger. Or perhaps my 
 bank needs cash, and at my request the Feder- 
 al Reserve Bank takes that customer's note, 
 puts with it at least forty per cent in gold 
 ($20,000.00) and issues to my bank $50,000.00 
 in Federal Reserve Notes — another form of 
 credit. We now have an expansion of the cur- 
 rency of $50,000.00, but the only real money 
 that all this has required is the $20,000.00 gold, 
 and it is hidden away in the vaults of the gov- 
 ernment as a reserve. All the banks are doing 
 this kind of thing all the time. If business is 
 brisk they do it on a larger and larger scale. 
 Under the stimulus of war you can easily see 
 that the expansion of credit goes on most 
 merrily! The Government needs enormous 
 sums of money to carry on the war, and when 
 it borrows it asks not for fifty thousand dol- 
 lars, but for one, two or possibly five billions of 
 dollars at once — and gets them promptly. 
 
 The question is often asked "Where does all 
 the money come from?" The answer, of 
 course, is "It does not come from anywhere."
 
 PVar and Credit 213 
 
 It is not a money transaction. It is a credit 
 transaction, and goes through the same 
 processes as my customer's note. Now so long 
 as my customer's note is good and for a legiti- 
 mate purpose, and so long as the currency is 
 fortified by a gold reserve sufficient to make it 
 redeemable, all is well. That is modern finance 
 in its simplest form. In times of peace such 
 credits are created, used, and redeemed with 
 perfect regularity. But war puts a terrific 
 •strain upon the system. The expansion which 
 takes place is accompanied naturally by rising 
 wages, rising prices and enormous paper prof- 
 its to business. This is well named "In- 
 flation" suggesting the expansion of a gas 
 balloon. And after the fighting is over reaction 
 is certain and, strange to say, the reaction 
 comes so suddenly that it still resembles a 
 balloon — a busted one. The Great War, last- 
 ing over four years, and being a struggle be- 
 tween the greatest commercial nations, pro- 
 duced an expansion of credit that no one would 
 have believed possible. When it started you 
 remember we all said it could not last Kitch- 
 ener's three years because the money would 
 give out. But it lasted over four years, and it 
 was not brought to an end by financial ex- 
 haustion on either side. On the side of the
 
 2 14 sketches and Speeches 
 
 Victors the war boom on prices and profits went 
 on of its own momentum for nearly two years 
 after the Armistice. But then, along about 
 August, 1920, in England, in Canada, in the 
 United States, in Japan and in other countries 
 only indirectly affected, almost over night, 
 the reaction came and came with a crash! 
 Then followed the cancellation of orders, the 
 fall in prices, the diminution of trade, the con- 
 sequent non-employment, the writing down 
 of inventories, the wiping out of profits. A try- 
 ing experience, but perhaps it is as well that 
 few people should make permanent profits out 
 of war! But while, as I have shown, credit is 
 easily expanded and enormous Government ex- 
 penditures are easily made, the reverse is not 
 true. The debts thus created are as real as if 
 actualmoneyhadpassed in theirmaking andean 
 only be paid slowly and painfully. Consequent- 
 ly, the people not only awaken to hard times 
 but have to face unheard of taxes. I said war 
 was a debauch, and its aftermath is like the 
 cold gray dawn of the "morning after." I need 
 not dwell on it. All our experiences are so re- 
 cent that we have not forgotten them. Rather 
 let me now ask "How far has the world re- 
 covered normal peace-time financial condi- 
 tions?" My answer is that the further off we
 
 War and Credit 215 
 
 look the more pessimistic is the picture and the 
 nearer home we look, the more optimistic do 
 we become. Look at that great world in it- 
 self — Russia. There war and revolution have 
 completely destroyed credit both internally 
 and externally. The currency would be a joke 
 if it were not a tragedy. Orderly government, 
 individual freedom, decent living conditions 
 have almost disappeared. Tyranny and semi- 
 starvation are the lot of the majority. Civili- 
 zation has broken down, and the once great 
 Russian Empire is disrupted and digraced. 
 That is the worst picture. Come a little nearer 
 and we have Austria — bankrupt, and in the 
 hands of a Receiver — conditions only less 
 frightful than those of Russia because Com- 
 munism was overthrown. Then we come to 
 Germany, and we are at once confronted with 
 the greatest financial puzzle of all time — the 
 Reparations Question. I could discuss that 
 question all the afternoon, but I shall confine 
 myself to a few brief observations. 
 
 First: Germany cannot escape the financial 
 chaos which reaction from the inflation of her 
 currency must bring. Fiat money manufac- 
 tured by the busy printing presses always 
 creates a fictitious "boom," and is inevitably 
 followed by a crash. A trillion marks cannot be
 
 2 1 6 sketches and Speeches 
 
 stabilized — except by cancellation. I believe 
 Germany deliberately planned financial chaos 
 for the purpose of making the payment of 
 cash reparations impossible. After making a 
 better bargain on reparations she would begin 
 upbuilding her finances from the ruins. 
 
 Second: While my sympathies are all with 
 France, my judgment is against the likelihood 
 of success for the course she is now pursuing. 
 There is indeed to my mind only one chance 
 of France collecting any great sum by taking 
 Germany by the throat, and I am afraid she 
 will have to occupy Berlin before that chance 
 becomes a possibility. It is well known (al- 
 though seldom referred to) that rich Germans 
 and German Banks have still a large amount 
 of foreign securities and own large balances in 
 foreign countries such as England, Switzer- 
 land, United States and South America. The 
 sale of their paper marks to speculators in 
 these countries helped them to create these 
 foreign balances. Now if France can compel 
 Germany to force her nationals to turn over 
 these foreign securities and balances to the 
 German Government and take German Gov- 
 ernment Bonds in payment — just as England 
 did during the war — then Germany could 
 pay to France possibly four or five billion
 
 War and Credit 217 
 
 marks on a gold basis, and France would thus 
 get something worth taking home. I would be 
 delighted to see France do that, but if it be im- 
 possible then I can see no hope that France 
 will collect anything worth while. 
 
 I confess I am extremely pessimistic on the 
 Continental situation. I am afraid it must get 
 worse before it begins to get better. Perhaps an 
 economic conference called by the United 
 States might accomplish something for a work- 
 ing basis of improvement, and I am not without 
 hope that this may come about. Most intel- 
 ligent Americans are far from proud of the 
 role their country is now playing with regard 
 to Europe, but the vast majority of ordinary 
 voters — "the man on the street" type, say, 
 "Why should we mix in Europe's troubles and 
 quarrels?" Our voters are not homogeneous. We 
 have the German vote, the Irish vote, the 
 Italian vote and so on to be considered by our 
 politicians who are mostly about as courageous 
 leaders as a bunch of rabbits. 
 
 I can only hope that some way may be found 
 to use the surplus gold and abundant credit of 
 the United States for the financial rehabilita- 
 tion of the world. It is a difficult, if not a 
 hopeless task, for it must be done on a business 
 basis — not a sentimental one.
 
 2 I 8 sketches and Speeches 
 
 But now we come nearer home, and cross- 
 ing the channel we take a glance at old England. 
 And in spite of her problems, her anxieties and 
 her world-burdens, I, for one, drop much of 
 my pessimism. Here, although she bore the 
 chief financial burden of the long war, and 
 loaned huge sums to all of her European Allies, 
 there is no mad resort to the printing press, no 
 whining for cancellation of just debts, but with 
 dogged British courage she faces her colossal 
 problems of financial and industrial recovery. 
 
 Slowly but surely the British pound sterling 
 regains its preeminent place in the finances of 
 the world. As an example to other nations she 
 has, amid all of her perplexities, begun pay- 
 ments on account of her debts to the United 
 States. I am far from being blind to the long, 
 difficult road Great Britain must travel before 
 anything like normal financial peace condi- 
 tions can obtain within her shores, but my 
 faith in her solvency, her integrity and her 
 ultimate triumph is unshaken and I have little 
 patience with some of her own citizens who 
 prophesy failure and disaster. 
 
 Drawing the circle of our vision narrower 
 now we come to this continent, and here in- 
 cluding Canada with the United States, if I 
 could forget the European situation I could be-
 
 War and Credit 219 
 
 come quite optimistic. We have only to re- 
 member conditions in 192 1 to feel certain that 
 great progress towards financial recovery from 
 the war has been made. All fundamental in- 
 dustries are on the up-grade. The farmer with 
 us in the United States has worked out of his 
 debts and difficulties about half way. Last 
 year's good crops and the rise in the price of 
 farm products have helped him greatly. Unless 
 the foreign situation clears up I am rather 
 afraid of a relapse in prices for farm products, 
 but if that can be avoided, I do not see any 
 reason why the up-trend of general business 
 should not continue through the year on which 
 we are now entered. Financially, the United 
 States may be considered over the effects 
 of the war. While some things are yet out 
 of line — such as coal and railway freights 
 — and while taxes are still too high, there is a 
 general feeling of conservative optimism with 
 us. Labor is fully employed, the people are as 
 extravagant and as good spenders as ever, 
 money, or rather credit, is abundant, and on the 
 whole we should be very thankful for the 
 measure of prosperity we are enjoying. I imag- 
 ine, and I hope that your experience in Canada 
 runs parallel to ours. With her comparative- 
 ly small population and her great natural re-
 
 2 2 o Sketches and Speeches 
 
 sources Canada should be about the first coun- 
 try to completely recover from the financial 
 effects of the Great War. No one who loves her 
 as I do can fail to foresee her brilliant future 
 and rejoice. And this brings me in conclusion to 
 where I started. I believe not only in the con- 
 tinuance of the friendliest and most neighbor- 
 ly relations between you and us, but in a 
 closer union of all the English speaking people 
 of the world. I believe that the destinies of 
 mankind, the salvation of civilization and the 
 hope of permanent peace are by God's provi- 
 dence largely in the hands of the English speak- 
 ing people. I assure you that appearances to 
 the contrary notwithstanding, that is the sen- 
 timent of the best Americans. Indeed, I have 
 no hesitation in saying that the character, the 
 education and the culture of Americans may 
 be accurately determined by their response to 
 that sentiment. All the English speaking 
 peoples were on one side in the War. Surely 
 that unity welded in the fiery furnace of war 
 should be continued until conference and con- 
 ciliation have taken the place of blood and iron 
 in the settlement of international disputes. 
 Nowhere else on earth is there even a vision of 
 Permanent Peace. What could be more natural 
 than the warmest friendship and co-operation
 
 TVar and Credit 221 
 
 between these peoples? They are one in lan- 
 guage, law and literature — one in love of free- 
 dom, justice and opportunity for all. All have 
 experienced the beneficent results of ordered 
 freedom, the foundation of which was laid at 
 Runnymede, and the capstone put on at York- 
 town. They are admirers alike of the three great- 
 est declarations on individual freedom, Magna 
 Charta, the Declaration of Independence and 
 the American Constitution, all written in one 
 language. They are equal followers of Black- 
 stone and Marshall, co-heirs of Shakespeare 
 and Carlyle, of Longfellow and Emerson and 
 all the other great ones of English literature. 
 They are today more than ever in the van- 
 guard of light and leading. They look with 
 longing but hopeful eyes to the time which 
 prophets have foreseen and of which poets 
 have sung, when the ideas of the Napoleons and 
 the Kaisers will be discarded and the teachings 
 of Jesus Christ shall have been adopted by 
 mankind and applied to the Government of 
 the World.
 
 'Then let us pray that come it may 
 {As come it will for a that) 
 'That sense and worth o'er a the earth 
 Shall bear the gree and a that. 
 
 For a that and a that. 
 It's coming yet for a that 
 'That man to man the world o'er 
 Shall hrithers be for a that."
 
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