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George F. Baker and his bank 1840 - 1955


giofranchi

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For ninety-one years he wrote his record, looking forward and always building. He was in no hurry and very patient, but every day he was on course, sustained and motivated by his invincible optimism and faith in the future of his country. His resiliency enabled him to view each setback as but temporary, and a stepping stone to the next advance.

 

 

Gio

 

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Gio,

 

What edition did you purchase?  I'm wondering if one is better than the other.

 

Thanks for the recommendation.

 

I have bought the 1994 edition… But have no idea what’s the difference between the 1994 edition and the 1981 edition… One thing I know: the 1994 edition costs little more than half the 1981 edition! ;)

 

Gio

 

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A simple and modest man, he instinctively avoided the limelight, ostentation, and show. Nothing could have been farther from his personal code of behavior than retaining the services of a public-relations counselor. He believed that his work would speak for itself. He preferred the background and reality of strength to the façade of power. His methods were slow but he had enormous patience. Someone once observed that he seemed to enjoy doing things the slow way.

 

 

Gio

 

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His point of view was a very long one. He recognized the basic strength and future growth of our country and its business structure. His faith never wavered. Yet, at the same time, he was always aware of the short-term hazard of life and the necessity of strength to ride  through them safely. This balance was expressed completely in his investment stance. He was a great believer in and long-term holder of business equities. At the same time, he maintained the most conservative and solid bank in the country. Its assets were always of top quality and what it owed to its depositors was protected by what it owned itself to a much higher extent than any other bank in America, if not in the world. His investment philosophy was the straddle, with top quality in both departments.

 

 

Gio

 

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Two types of leaders have always stood out in the business as in the political world. One is the brilliant, magnetic, fascinating kind – the man filled with dash and daring, able to capture the popular imagination. The other is the steady-going and sure-footed man, known more for sagacity and sound judgment than for glittering display, who keeps his poise in the midst of turmoil that affrights others, and is looked up to, especially in times of crisis or peril, as to the shadow of a great rock in a weary land. To which class George F. Baker belonged, one has only to read the descriptions of his career and the tributes to his character in order to understand.

--The New York Times, Monday, May 4, 1931

 

 

Gio

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  • 2 weeks later...

Gio,

 

I'm about half way through this book and I am really enjoying it.  Thanks again for mentioning it. 

 

I will have to go back and look at the House of Morgan (chernow) that I read, because I want to see if Mr. Baker is mentioned in that book and I just don't remember. 

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Gio,

 

I'm about half way through this book and I am really enjoying it.

 

Ah! These days it seem that every collaborator I have is trying to bother me and distract me from my reading pleasures… Of course, I keep reading the story of Mr. Baker, albeit at a much slower pace than you are doing! :)

 

Gio

 

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  • 3 weeks later...

Gio,

 

I have so enjoyed this book.  Thanks again for the recommendation.  One of my favorite quotes, among so many was right after the crash of 1929.  Mr. Baker was never willing to sell and this was said:

 

"Mr. Baker, wouldn't it have been wonderful if you had sold out in 1929.  With cash, you could now buy back twice as much.' The Old Man replied: 'Frank, if I had started selling things, I would have lost my position years ago.  You see, you never know when you've reached the the top.' 'But, Mr. Baker you know more about these swings than anybody else.' 'No, Frank, you can't know, because EVERY TIME IS DIFFERENT.'" 

 

Later in a conversation Mr. Baker was mentioned saying, "I was a damn fool." referring to his having held on. 

 

Things to ponder.  I love history.

 

 

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Gio,

 

I have so enjoyed this book.  Thanks again for the recommendation.  One of my favorite quotes, among so many was right after the crash of 1929.  Mr. Baker was never willing to sell and this was said:

 

"Mr. Baker, wouldn't it have been wonderful if you had sold out in 1929.  With cash, you could now buy back twice as much.' The Old Man replied: 'Frank, if I had started selling things, I would have lost my position years ago.  You see, you never know when you've reached the the top.' 'But, Mr. Baker you know more about these swings than anybody else.' 'No, Frank, you can't know, because EVERY TIME IS DIFFERENT.'" 

 

Later in a conversation Mr. Baker was mentioned saying, "I was a damn fool." referring to his having held on. 

 

Things to ponder.  I love history.

 

Hi David!

That’s a great quote indeed! Because you truly never know when you’ve reached the top.

 

Yet, I wonder… is it actually a matter of “sell or hold”? Isn’t “sell or hold” too much… “black or white”? Instead, I like shades of many colors… I like to watch other people’s behavior and to adjust my own behavior accordingly.

 

Why do I think that general market prices are important? Exactly because they represent the best mean we possess to judge other people’s behavior: when they are reasonably low, the participant in the market are most probably behaving with prudence; instead, when they become very high, the participant in the market are most probably behaving with arrogance and recklessness.

 

You might never know when the top is coming, but I believe you should study other people’s behavior and act accordingly. When they seem to be behaving with arrogance and recklessness, you might bet something troublesome is brewing somewhere, even if you don’t see it, until it finally happens.

 

That’s why I am a great advocate of constantly letting your “cash reserve” expand or contract gradually, in accordance (or should I say discordance?) with other people’s behavior.

 

The notion of letting your “cash reserve” expand or contract gradually is something I much prefer to the “sell or hold” diatribe.

 

Gio

 

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Mr. Baker's reputation had grown by his performance in this crisis. James J. Hill at a later date stated: 'The thing that first made me a friend of George F. Baker was that when the Panic of 1893 came along currency was almost impossible to get, or credit either. I asked the First National for assistance and George Baker sent me this answer: "I send you by express tonight what you ask for - if you actually need more I'll take off my coat and go to work." The amount was $300,000 but it was like millions in plush times. That transaction and that reply won me to George Baker for life. I would rather have his friendship and his judgement in time of panic than of all the men between Trinity Church and East River.'

 

Another example of the power to have a substantial "cash reserve" in times of trouble. Don’t ask me how those people managed to achieve that. Just be aware that they did. ;)

 

Gio

 

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George F. Baker's confidence in the economic growth of the United States was never broken. On one occasion he wrote to his son that his friend, Mr. Morgan, had written to his son, 'Jack', that the man who was a bear on the United States would go broke. But George Baker had the point of view of the investor, not the speculator. He was patient and in no hurry. At the same time he had seen so much of the violent  and unexpected hazards of economic affairs in the short run that he knew the necessity of financial strength and liquidity at all times. In his letter to his son on January 26, 1918, he said: 'It is cheap insurance to keep strong'.

 

 

Gio

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It was natural that such a man, with such opportunities as were granted to him during the long life to observe his fellow men should declare in no uncertain terms as his days were drawing to a close that he was convinced that the fundamental basis of business and of credit is Character.

--A Memorial of John Pierpont Morgan, Sr.

 

 

Gio

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  • 2 weeks later...
Hardly anything in a corporation is more, if as, important as organization. The Telephone Company [A.T.T.] is a shining example. Its success is so largely due to Mr. Vail's work in that direction, of which he was so great a believer and exponent. I think the success of the Steel Company [u.S. Steel] is due to its 'perfect organization' for which Mr. Filbert is so largely responsible.

--George F. Baker

 

 

Gio

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...Parker remarked: 'Mr. Baker, it has been such a privilege for me to meet your father in this informal way. He is surely a most remarkable and able man.'

George replied:'Yes, he is remarkable and very able. But there are other able men. The unique quality that has made my father is his extraordinary faith. He has always been willing to hold on to a problem with determination to see it through, when most other men have given up.'

 

 

Gio

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  • 4 weeks later...
It is not, however, in Mr. Baker's direct financial dealings, large as these have been, that he has so greatly served. There are certain outstanding features in his character which have had an incalculable influence in the forming of our country's ideals. There has been his real service to America.

--Mr. Andrew W. Mellon

 

 

Gio

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