027-9] [J?564-f unctions of the Library of a Banking Institution Guaranty Trust Company of New York Functions of the Library of a Banking Institution I'/BSITY CF ILUKOIS U3JURY JUL 24 1919 "'Rale / fh S- riif-e Functions of the Library of a Banking Institution ►KlYEPiSITY CF IllSSOiS UmRY JUL 24 1918 !> .gU 3 r Guaranty Trust Company of New York 140 Broadway FIFTH AVE. OFFICE MADISON AVE. OFFICE Fifth Ave. and 43rd St. Madison Ave. and 60th St. Capital and Surplus Resources more than - $50,000,000 - $700,000,000 O'KI* ? Functions of the Library of a Banking Institution From an address by Raleigh S. Rife, of the Bond Statistical Division of the Guaranty Trust Company of New York, before the an- nual meeting of the Special Libraries’ Associ- ation, Asbury Park, N. J ., June 25, 1919 . W E have been called a nation of “eco- nomic illiterates” — because we have been provincial. The investing public must be made to see the significance of investment of capital in other countries. Our finan- cial press and our financial and business lead- ers will need broader and wider sources of in- formation. While our business was mainly within the confines of our own country, much of the general information needed as the basis for financial investments was a part of the at- mosphere in which we lived, but for foreign investments the sources of general informa- tion are outside of ourselves and it becomes necessary for us to build up adequate sources of information so that the public may be in- formed of conditions in other countries; may start to think in international terms, and con- sider the opportunities for growth and devel- opment of enterprise in other countries. Information Investor Desires In making foreign loans it is necessary to assure the American purchaser that he can get information and that he has back of him the banking strength of his country and, in turn, the power of the United States Govern- ment. The first task is 'to present essential information to the American public, so that it may come to understand the conditions in other countries; that the element of distance between countries is not relatively important; and that the American banks, with their bran- ches established abroad and through affiliated institutions, are in a position to render ad- equate service in supplying information. Specific Facts Needed The investor wants to know about the char- acter of the people of the country in which he is placing his capital. He wants to know their industrial character, their inventive qualities, the development of the spirit of thrift, the degree of regard they have for faithfully fulfilling individual obligations, and the strength of their national self-respect. He wants to know about the stability of their government, and the attitude of their govern- ment, and the political elements making up that government, toward foreign capital. He wants to know about the social structure of the country, and whether it has for years maintained a class of people in an exploited condition. He wants to know about the state of economy existing in that country; as to whether it is in the pastoral, agricultural, or industrial state of development, and the stability of business life. The foreign investor wants to know about the variety of natural resources, the extent to which they have been developed, and the opportunities for further expansion. He wants to know about the currency and the stability of monetary values and exchange values. The prospective investor must get an un- derstanding of how the people live in the country in which he is making the investment; characteristics of their life and the relation- ship that we have had with them in a trade and investment way. These are all general ques- tions that the American public must come to appreciate and about which they must be informed. Specialized Sources In the case of a particular investment the American investor will want, in addition to this, information of a more varied character. If he is making a loan to the government he will want to know about the state of govern- ment finance, the national debt, the reven- ues, the diversity of revenues, the extent to which budgets balance, how the government spends its money, the relation of debt service to net revenues, the amount of property that the government owns as an offset to the public debt, the extent to which the govern- ment is engaged in business undertakings, and a multitude of other questions. In the case of a railroad, he will want to know about the past history of the road, the opportuni- ties in its territory, and the character of its management. The growth of this type of business has drawn upon leaders of finance and leaders of industry the gigantic problem of acquiring sources of information, of accumulating knowledge of conditions in foreign countries, of getting the international point of view so that the investor may appreciate the other man’s viewpoint as well as his own. This problem is pressing upon our banks, and in view of the fact that this is a meeting of special libraries I have endeavored to point out in a general way the type of information that you will need in your libraries to fulfill [ 7 ] the growing call of our financial and business leaders for information relative to foreign countries. The best way that I can give an appreciation of what can be done along these lines is to refer briefly to what the Guaranty Trust Company is doing in developing its library and files of information to assist the investor. Facilities of this Company for Supplying Information The Guaranty Trust Company has four separate divisions concerned to a consider- able extent with the gathering of foreign in- formation for investors. The Foreign Credit Division collects credit information so that the American exporter as well as the American investor may have accurate credit information about the firms with which he is doing business. Our foreign branches and our affiliated institutions, hav- ing branches in other countries, enable us in turn to give better and more satisfactory credit information. Demand for American Goods Abroad Our Foreign Trade Bureau maintains a special research bureau which aims to keep in constant touch with markets in other countries. Its purpose is to put American business men and exporters in touch with associations and firms in other countries that have need of the products of American in- dustry. This bureau also makes studies of the present, as well as probable future, demand for American products in other countries, and disseminates its information through interviews, articles in periodicals and newspapers, and through a semi-month- ly pamphlet dealing with markets for Amer- ican goods in foreign markets. Foreign Need for American Capital The Statistical Division of our Bond De- partment is concerned in part with the study of economic and financial conditions and the opportunities for the use of American long- term capital in other countries. It gives in- vestment advice and information in regard to securities and investment opportunities in other countries. The Bond Department, through the Statistical Division, represen- tatives in other countries, and affiliated in- stitutions, is able to assure the investing public of careful investigation of foreign securities offered for public subscription. These three service divisions of the Com- pany rely to a great extent upon the Guar- anty Reference Library, which is the central source of information. The world war, in throwing America immediately into the midst of problems of international finance, placed a new and growing burden upon our banks, and we find many of them establish- ing libraries as sources of information. As New York becomes a more important inter- national finance market, the financial in- stitutions find a growing need for special financial libraries. Reference Library of the Guaranty Trust Company The Guaranty Trust Company has been cognizant of this responsibility and has been developing its Library for several years. Recently Babson’s Financial Library in New York City was purchased and consoli- dated with the Guaranty’s Reference Li- brary. The library at present consists of approximately 40,000 indentures, annual re- ports and circulars on railroads, public utili- ties and investment securities, and 20,000 books and pamphlets. The library staff is divided into three divi- sions for the collection of material. The Reference Library proper orders, catalogs, and indexes magazines, books and reports of government departments, and other general sources of information. The Clipping Bu- reau clips the leading daily and weekly news- papers of this country as well as many for- eign countries, and arranges these clippings according to subjects. The Statistical Files gathers the reports, earning statements, in- dentures, circulars, and other information relative to domestic and foreign corpora- tions. The library receives regularly about 300 newspapers and magazines, including the leading financial periodicals and eco- nomic reviews of many countries. Foreign Sources of Information I desire to make special reference to sour- ces of information concerning foreign coun- tries. The Reference Library endeavors to get a complete set of the government publi- cations of many foreign countries. Partic- ular emphasis has been placed upon South America. The official newspapers which contain decrees, laws and reports of the min- isters of finance and the treasury, as well as other departments, to the legislative branches of the governments, are received. Reports of departments dealings with public debts and revenues, with public works, commerce, trade, and industry are obtained. In this way we have collected as nearly as possible a complete set of official sources of informa- tion in regard to the financial and economic conditions of various countries. These files are supplemented by daily and weekly newspapers, financial periodicals, and reports issued by chambers of commerce and financial institutions. At present the library is receiving approximately eighty-five peri- odicals and magazines from foreign countries, which in their scope cover practically the entire globe. These sources are being added to as rapidly as we can ascertain the value of various publications and of the information that they publish. The Statistical Files division is building up a large collection of foreign corporate information. Reports and other financial information are obtained concerning rail- ways, public utilities and industrial corpora- tions in other countries. The quotation lists of the leading stock exchanges of the world are received. The effort is made to collect comprehensive information so that the vari- ous divisions of the Guaranty Trust Com- pany can give service to customers, to im- porters and exporters, and to investors. Service at Disposal of Public The financial library of a banking institu- tion, in fact, is becoming one of its most im- portant service divisions. Many persons seeking investments abroad much prefer to make a study of conditions themselves. Many corporations prefer that their own foreign sales departments make investiga- tions of particular foreign markets or companies. The Reference Library of the Guaranty Trust Company is open to those who prefer to make their own investigations. Library assistants will obtain the material bearing on the subjects under investigation, and will translate documents and other infor- mation printed in foreign languages. [ii]