8. Types Of Presidents

There are two types of bank presidents, - the conservative and the adventurous. The conservative president seeks to lend only on the best security; he feels deeply that he is only a trustee, an administrator of the wealth of others, and that the highest possible safety is a rule from which he must never depart. The other kind of president starts out with the familiar adage, "Nothing risked, nothing gained," and takes his risks. Who in the long run gains most for his shareholders? Numerous examples of both kinds can be easily found. No one can possibly find fault with the position of the conservative president; he is a trustee and therefore he is not justified in lending at high rates of interest on inadequate security, as he would be if the money was all his own. But shareholders sometimes are impatient and clamor for larger dividends, and when the cry becomes general, if he ventures far and loses, they can not justly complain.

9. A Dangerous Type

-There is a third type of presi dent, unhappily too numerous, who ought not to be at the head of a bank for a minute, - the president who is using it as a means especially for enriching himself. Speculators have long lived and doubtless will flourish and fail for many generations more, but they ought not to live inside banking institutions. They have wrecked more banks during the last forty years than all the other men who have attempted to conduct them. Every bank president should be wholly loyal to his bank; should serve it with singleness of purpose; should have no private business of his own conflicting therewith, or preventing him from giving it his undivided service. If his own business becomes entangled, as may happen with the most careful president, he should notify the directors; and if there is not likely to be a speedy end, he ought, either temporarily or permanently, to retire. In short, he should give the service that is expected of him, and have no entanglement which, if known to the directors, would lead them to feel that he ought no longer to conduct the business of their association.

A few years ago the president of a bank in New York became a warm advocate of bimetallism. He was a genial, tactful man, and under his management the bank, notwithstanding the presence of many strong competitors, made great progress. Yet the directors felt after a while that his incessant advocacy of the silver question was harmful to the bank and, much as they personally regretted to part with him, it was believed that the bank would gain by the severance of the relationship; accordingly this was done. Without question they were justified in thus acting.

10. In What Ways A President Can Advance A Bank

Not only does the president play a great part in lending the bank's resources, and in watching the movements of depositors, but he has a large duty to perform to advance the bank's business, particularly to increase the number of depositors. This duty, especially in a large city, is constantly felt by every president. In a small place, where only one or two banks exist, this is less important; but wherever a bank feels the keen breath of competition, next to lending this is the most important of his duties. Depositors die or move away, and if no effort is made to replace them, the reservoir begins to decline. It is ominous for a bank when deposits dry up so much that outsiders notice the shrinkage. As soon as they do they begin at once to inquire into the cause. "Dry rot" is the stock answer. Instinctively a man dislikes to deposit in a decaying institution. He has a feeling that sooner or later something will happen and he may lose. Unless there is some special advantage to be gained by remaining, he is very apt to withdraw his account as quietly as he can and open another with a more flourishing bank.

What steps does the president take to increase the bank's business? One class of business, which is eagerly sought after by the banks in New York, is the accounts of new banks. They employ persons to examine daily the newspapers and find out about projected institutions. As soon as they learn of them, efforts are made to secure their accounts. In doing this, a distant director may perform a useful service. He may be able to control or advise with what bank in New York the account shall be kept, and thus be able to direct the course of the stream into his own bank.

A method of gaining business that is attracting attention is by consolidating banks. This method is steadily making progress and will make more and more with the coming years. We doubt if one half the number of exist ing banks in New York City will be alive fifteen years from this date Consolidations are in order, and in these great movements the heads of the banks in many cases are the leaders. London has a smaller number of banks than New York, and within the last three years many consolidations have been effected in the United States to the obvious advantage of all concerned.

New accounts are doubtless gained by offering depositors some advantages, perhaps interest on their deposits, larger loans than they were able to get before, or lower rates of interest. Of course, all banks can play at these games, and all do play at them to some extent; and their successes are very varied.