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The Commoner
OCTOBER, 1913
Exist for the Accommodation of the
Not for the Control of Business"
President Moser: Ladies and Gentlemen
The American institute o banking Is highly,
very, very highly, honored by having as its
guest and as a speaker, the secretary of state
of these United States, Hon. William Jennings
Bryan.
air. Bryan: Ladies and Gentlomen I am
informed that this is a national gathering and
that the members of tho organization are con
nected with banks but are mostly in positions
below that of cashier. I suppose you have drawn
the line against cashiers, or they have against
you. I do not know just why this distinction is
made. But 1 am not quite sure but I feel more
at home talking to the clerks than I would to
cashiers; I have had more business, I think,
with clerks, than I have with cashiers, they ac
cept my deposits and cash my checks. And be
sides that, what I want to say will have more
influence upon young men than upon older ones.
It has been the joy of my life to come into con
tact with young men; it has been a part of the
plan of my life since I was myself young to keep
in touch with tho students of tho land, and I
am still cherishing the hope that the latter days
may bring me in even closer touch with youth
than the busier years have done.
This afternoon, in the very short time that I
have at my disposal, I desire to speak to you, and
I desire to speak upon a subject connected with
your work and in such a way as to be helpful
to you. As people grow old, they assume more
and more the right to give advice. As it is now
some thirty years since I finished my college
work and entered upon business for myself, I
feel that I have reached a point where I can
use my experience for the benefit of those who
are not so old.
First, I congratulate you upon the important
work in which you are engaged. Banking" is an
important work; It is a respectable business,
and respectable in proportion as it is safe, not
for the banker only, but also for those who deal
with him. And after I have congratulated you
upon the fact that you' are connected with a
business that is not only important but per
manent, not only one that has great influence,
but Is likely to have increasing Influence after
having done that, I hope you will pardon me -if
I give to you what I regard as a fundamental
proposition in banking. And for fear. you might
discredit it if I uttered It on my own responsi
bility, or gave it as my own opinion, I present it
to you as a solemn declaration of a great party,
a declaration made in the platform adopted by
a great convention. I suggest that you young
men take this proposition which I will submit
to you, frame it, and hang it up in your offices,
and let it be to you a maxim; let it be a guide
to your business life. I will read you a part
of the currency plank of the Baltimore plat
form, a platform which has the advantage of be
ing clear and explicit, and the still greater ad
vantage that it is being put ino operation.
(Applause.)
"Banks exist for the accommodation of tho
public." This is fundamental. Never make the
mistake of thinking that the people exist for
you; banks exist for the people. It is important
that we should have a correct understanding of
the relation of things, and especially of the re
lation of ourselves to society. If I were to tell
you that the people who eat, eat for the benefit
of farmers, you would see the ridiculousness of
the statement. But when I tell you that farmers
farm for the benefit of the people, tl at the people
may eat, yon recognize that as a very common
place and a very correct statement. Now it
would be still more absurd for you ever to
imagine that business communities exist for tho
benefit of bankers, and the sooner you get it
into your heads and the better yen keep it
there that banks exist for, the benefit of the
public, the less mistakes you are liable to make
in your dealings with the public.
But this platform does not stop with an
affirmative statement. It goes further and it
excludes an Idea that has prevailed in some sec
tions. Let me read the whclo sentence. "Banks
exist for tho accommodation of the public AND
NOT FOR the control of business." If any of
you imagine that banks exist for the control of
The Relation of Banking to the Public
Welfare; Banking Reforms and the
Pending Currency Legislation
An address delivered by Mr. Brynn, September 18,
1913, before the American Institute of Uankerw,
In session ut Richmond, Va.
business, you are likely to be a curse to your
community until the community wisely dlsponsos
with you and Eubstltutes-somo wiser person in
your place. This is tho ujntence I ask you to
remember, that "banks exist for the accommoda
tion of the public and not for tho control of
business." If that is the purpose of Its exis
tence, then tho more completely tho bank lives
up to its purpose, the better will It fulfill Its
duty and perform its functions. And If banks
do not exist for the control of the business of the
country, then the less inclination they show to
do that which Is not within tho proper purpose
of their existerce, the better they are off and
the better the public is off.
But our platform, dealing with a (.uestlon that
has not always been understood, has gone oven
further than the sentence which I have quoted.
Here is the next sentence: it follows as a logical
conclusion from the first. "All legislation on
the subject of banking and currency should hnve
for its" purpose the securlr? of these accommo
dations on terms of absolute tecurlty to tho pub
lic and of complete protection from tho misuse
of the power which wealth gives to those who
possess it."
Now the purpose of legislation on the subject
of banking and currency is to secure these
accommodations for tho public on terms of
absolute security to the public and of completo
protection from the misuse of tho power which
wealth gives to thoso who possess It. I regard
this plnnk of the Baltimore platform as present
ing a fundamental doctrine in a vory clear, con
cise and complete form; and if I wero to speak
to you for any length of time I could not make
this subject any more clear than this platform
makes it, and I could not present a truth of
greater Importance than is hero presented.
When you understand for what purposs the bank
exists and the purpose of legislation concerning
banks, you will then bo able to understand the
standpoint from which tho bill now pending has
been drawn. It is my purpose to call your atten
tion to a few of the features of that bill. But
before doing so, I desired to lay the foundation
bv showing you tho plan upon which the bill
was prepared, and I show it with confidence and
challenge any opponent of the bill now before
the house to dispute the correctness of the plat
form declaration which I have read to you.
We have had for nearly a generation legisla
tion on the banking question, but it has been
too larcrely from the standpoint of tho men
pecuniarily Interested in tho banks. I had some
experience with this subject some twenty years
aro. I introduced a bill then, tho purpose of
which was to protect the depositors in banks.
We have had a bank failure in Lincoln, moro
than one, in fact, and many of our peoplo
suffered greviously as a result of those failures.
Some one suggested to me that thero ought to
he somo way in which to make depositors safe.
It seems to mo that it was a plausible nronoid
tion. and T saw no Injustice in It, FOR CER
TATttrr.Y THERE CAN BE NO REASON FOR
PTTTTTNO MONEY INTO A BANK EXCEPT
THE EXPECTATION OF BEING ABLE TO GET
IT OUT AGATN. If any of you know of any
other reason, suppose you present a paper on
tho subject and enlighten thoso who are, like
myself, in darkness. But when I proposed this
measure, I could not even get it out of com
mittee. T asked them why, and thev said, "If
all the banks are good, the hie: banks will not
have any advantage over tho little banks." I
asked them whether It was the purposjs of bank
ing, to give the big banks an advantage over
the little ones if thero was not a higher pur-,
pose. T asked if the protection of the millions '
of depositors was not of more importance than
the giving of a special advantage to the com
paratively few connected with the big banks.
But T falied In my efforts then, and when I went
back, to Nebraska, r said, "Well, the national
banks may not be willing to adopt a system that
will protect their depositors, but I will prosont
it lo tho legislature of Nebraska and hco if wo
can not protect tho depositors in our utato
banks." When tho bill caino up thoy had a
committco from tho nationul banks thero to
object. "Why," thoy said, "if tho stato bank
aro safo tho people will not deposit in tho na
tional banks!" That was a sufficient reason to
thorn why tho stato banks Bhould not bo secure.
Those wero some of tho nrgurncnta 1 mot whon
I attempted to sccuro legislation. Then I tried
again. 1 said, "We ltavo had a very disastrous
failure in Nebraska, and tho man who was re
sponsible for it, who caused tho loss of so mo
th lag like five hundred thousand dollars, wan
sent to tho penitentiary for five years." Wo had
In tho same city a hack driver who was sent to
the penitentiary for seven years about that tlmo
for stealing less than fifty dollars from a pas
senger. It seemed to mo that tho two scntoncon
wero very unfair. So I introduced a bill provid
ing a minimum punishment for embc.zlomont,
to increase at certain stages with tho amount
taken; but I could not oven arouso enough in
terest in tho punishment of criminal offenders
to got tho bill through to protect depositors.
That was my experience many years ago. Whon,
a few years ago, wo had a great panic that
spread over tho country in a night this plan
was suggested, and four states adopted it- Wo
havo four stutes now which havo protection of
depositors, Nebraska, Kansas, Oklahoma and
Texas. There were somo pooplo who thought
that an attempt thus to protect depositors wan
a violation of fundamental rights and tho ques
tion was carried to tho supremo court of the
United States. You may bo Interested to read
a unanimous decision of the highest court of
tho land to tho effect that there is nothing un
fair about compelling a bank to protect Its
depositors.
So much upon tho fundamental proposition
that banks exist for tho peoplo and that legis
lation should havo for its object tho securing
of tho accommodations which banks provido on
terms of absoluto security to dopositors and with
protection from tho abuse of power that wealth
gives to thoso who possess It.
I shall not discuss tho question of bank se
curity, but I desiro you young people to know
that thero is an argument that can be mado
from tho bankers' side as well as from tho sldo
of depositors. Before I entered congress I had
somo stock in a bank; I sold It when I beeamo
a member of congress; and I did not take stock
in a bank afterwards until wo secured tho in
surance of deposits. Then, for a short time, I
held a little stock in a stato bank. I would
not today buy ono dollar's worth of stock In any
bank which did not sccuro its depositors. I havo
a littlo money saved up for old ago; and I am
not willing that that which I havo saved for
myself and family shall bo taken away entirely
because somo man connected with a bank may
be guilty of criminal conduct; neither am I will
ing to be a stockholder in a bank and take ad
vantage of tho limited liability law whilo deposi
tors lose their deposits In that bank. To my
mind a sufficient reason for insurance of deposi
tors can bo found In tho fact that a man having
stock In a bank may havo the satisfaction of
knowing that no ono will ever lose by putting
money in a bank to which his namo has given
standing or sense of security. And I am not so
old but that I expect to llvo to seo tho time when
thero will bo no man In this country who will
defend any banking system that will not mako
the depositors as safe as the holder of a govern
ment bond. Such a system will go far toward
preventing panics.
When we como to tho discussion of tho system
hy which this security can he secured, there Is
room for difference of opinion, but I you tell
mo that you have no plan, that you care for no
plan, and that you have no desire to glvo abso
luto security to tho depositor, then I tell you
that it 1b not necessary to discuss the difference
In plans; there is a more fundamental proposi
tion, namely, tho definition, of honesty that will
permit ono to defend a system which does not
give that which it holds itself out to give, abso
lute security to those who trust it.
But my tlmo Is passing and I desiro to call
your attention to tho prominent features-in the
bill now before congress. And, before I do that