Amongst other functions and duties, it is "up to him" to look ahead, so that such offspring may always be provided with nouriture, i.e., with funds to conduct their business. If for one reason or another they find themselves short of means in difficult times, it is his task and care to find ways and means to obtain what is needed, sometimes at great financial risk to himself.
It is perhaps significant that almost all the railroad companies now in receivers' hands were among those for whose financial policy no one amongst the leading banking houses had a continuous and recognized responsibility, though I must not be understood as meaning to suggest that there were not other contributory causes for such receivership, involving responsibility and blame, amongst others, also on members of the banking fraternity.
II
Without going into shades of encyclopedic meaning, I would define, for the purpose of this discussion, a financier as a man who has some recognized relation and responsibility toward the larger monetary affairs of the public, either by administering deposits and loaning funds or by being a wholesale or retail distributor of securities.
To all such the confidence of the financial community, which naturally knows them best, and of the investing public is absolutely vital. Without it, they simply cannot live.
To provide for the thousands of millions of dollars annually needed by our railroads and other industries, would vastly overtax the resources of all the greatest financial houses and groups taken together, and therefore the financier or group of financiers undertaking such transactions must depend in the first instance upon the co-operation of the financial community at large. For this purpose such houses or groups associate with themselves for every transaction of considerable size, a large number of other houses, thus forming so-called syndicates.
But even the resources thus combined of the entire financial community would fall far short of being sufficient to supply the needed funds for more than a very limited time, and appeal must therefore be made to the absorbing power of the country as a whole represented by the ultimate investor.
Now, let a financial house, either through lack of a high standard of integrity in dealing with the public, or through lack of thoroughness and care, or through bad judgment, forfeit the confidence of its neighbors or of the investing public, and the very roots of its being are cut.
I do not mean to claim that high finance has not in some instances strayed from the highest standard, that it has not made mistakes, that it has not at times yielded to temptation—and the temptations which beset its path are indeed many—that there have not been some occurrences which every right thinking man must deplore and condemn.
But I do say and claim that practically all such instances have occurred during what may be termed the country's industrial and economic pioneer period, a period of vast and unparalleled concentration of national energy and effort upon material achievement, of tremendous and turbulent surging towards tangible accomplishment, of sheer individualism, a period of lax enforcement of the laws by those in authority, of uncertainty regarding the meaning of the statutes relating to business and, consequently, of impatience at restraint and a weakened sense of the fear, respect and obedience due to the law.