, 1907-11-27
AGAINST GOVERNMENT GUARAN,
TEE.

In RESPONSE to n letter from The Re.
publican. n of the most prominent
bankers in the state takes ground
against both n national bank of issue
II discount n government guaran-
tee of deposits in national banks. The
gentleman has forbidden the use of his
name, but has consented to the use
OF his letter without disclosing his
identity. 1t is as follows:
Dear Mr.. Chaplin:-Your letter OF
the cath pays me n compliment and !
appreciate n of the largest and most
influential papers of the state request
ing my views on what is best to be
done to cure the financial Ills OF the
country. This of course is n thing we
all want to know and, as you say, ma
ny congressman will put their ideas
into bills before congress. 1t is prob
able that the good points In each may
be culled out and one good bill present
ed. | think you will find congress
very slow to pass any currency bills.
as 1t is Il delicate thing to tinker with
the country's money, and the political
PoiiiVS Will NC oipW W SOlllulj lhtIl-
selves to any legislation, no matter
how good 1t seems TO look to them,
right in the face of a general election.
In the absence of currency legisla-
ton we shall have to urn to the only
other resource. liquidation. This will
cure our ills, but it will undoubtedly
work hurdshirs on some people and
put a decided check on the great gait
at which the oountry's business has
been travelling for several years. The
result will be good, but the cure may
be severe.
The business system, like the human
body, must at times be purged of its
undesirable elements and when this
process Is complete | believe the bust.
ness situation will be clean and sound,
a condition which is necessary for
healthy business.
The central bank idea is a good one
in countries like Germany and France,
but has failed here before now ana
might again meet a like fate If tried.
We must realize that our political sys-
tenn here is not favorable to the sue,
cess of such an organization n the
danger would be that the policy of an
institution like this, with it's tremen-
lltical parties and take from it its abil,
ity to aid the business interests of the
country to a great extent. Its greatest
function would be to give aid to the
business interests Of the whole and
there would be danger of its control
falling into the hands of persons nav
ing special interests to serve. 1t ia
probable. however. that the measure
might be so framed as to guard against
these dangers.
No law should go on the statute
books of this country taxing any bust.
ness to protec. creditors of others in
like business. AS far as it would ap-
ply to banks. l believe it would be the
worst kind of legislation, having a tend
cncy to encourage those who are dis.
honest to enter the business with the
knowledge that the good, honest, con-
servative banker is taxed to pay n
losses incurred through their. dishonest
VI Suduy Hleluous- Inc IepoItS vi lit
comptroller of the currency show an
astonishingly small percentage of loss
by depositors in national banks since
the passage of the act authorizing
these institutions compared with the
deposits handled by them. The losses
are so small that they are no worthy
of notice. This is due to the efic-
ency OF the law and its careful admin
istration. With constant safeguards
being thrown aroun the depositors'
money by the comptroller and his staff
of examiners, l expect to see the day
when no losses will be suffered by de-
p~ositors in national banks.
You may or may not know that Bryan
is not the originator of this idea. Such
a bill was introduced in the last con-
gress and was scarcely given any at
t~ention, not being regarded generally
as needed nor good legislation"