, 1907-12-03
FAvoRs GOVERNMENT GUAR.
ANTEE.

Hon. j. DeForest Richards. president
of the First National bank, Douglas,
and son OF former Governor DeForest
Richards, favors n law providing for
, the protection Of depositors by the ma
tional government. He also fayors a
great central bank that would perform
many of the functions now performed
by the treasury department. In the
course of his excellent letter Mir. Rich.
ards says;
81 believe that, considering the re.
markably small losses to depositors
from failures of national banks and
further that there is no successful
banker who does not ant to use ev.
cry means possible to protect his de.
positors, | am in favor of government
guarantee of deposits and n tax levied
upon banks TO amass n fund out Of
which to pay the losses. AS a general
proposition. however. l do not favor
too much government.
81 believe our financial system,
which requires such large sums to be
locked up In the treasury. rendering
them unavailable except at the option
OF the secretary of the treasury, is
wrong. The present system of depos.
tories in a measure relieves this, but
IL Is "a crude system and too rigid. /
believe that a central bank could be
established so as to carry on properly
the government finances and at the
same time avoid much that Is to be
criticised in the present system. The
board of managers could so be appoint
ed as to avoid political influences. as
the supreme court of the United States
now Is. Much could be accomplished
through n central bank to relieve
financial strains that now is quite diff.
icult. In time OF stringency, the fact
Is always heralded that the secretary
of the treasury had to come to the as.
sistance of banks. This in itself is I'M
settling"
Judging from the replies received by
The Republican to its queries sent to
bankers. those not received and the
attitude of journals in large financial
centers, 1t Is fair to presume that the
financiers of the nation. and more par
~ticularly the bankers, will divide be.
tween the reserve centers and the
country bankers. We mean by "coun-
try bankers those who carry reserves
In other banks and do not have depos.
its from other bankers themselves.
Harper's Weekly, published in the
home of the clearing house of America,
opposes a government guarantee for
deposits, That was to have been ey-
pected 1t has opposed everything cal
culated to better the condition of the
common people of America since it
o its big flop in 1884. The DenverRe.
publican also speaks slightingly of the
suggestion, as If 1t did not amount to
anything. Possibly that paper is in
fiuenced by two OBSERVATION-DISCLOSURES.
because Mr.. Bryan favors the plan,
and. second, because Denver is the
clearing house of Colorado and has re-
serve deposits from a large number of
banks beyond the limits of that state.
h bankers of the large cities can
hardly be looked to for any aid in
~furthering a proposition that means n
depletion of reserves or a breaking
down to any degree of the large aggre.
cations of capital built up by the small
reserves carried with them by the lit
tie banks of the nation.
One thing seems certain, unless the
bankers of America are almost a unit.
1t is hardly probable that congress will
take action upon this or any other
important legislation concerning the
money OF the nation.