Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1908-09-04
Cleaves. who refuse absolutely to treat
with employees as an organization.
MIR. Taft on Guarantee of Deposits.

Mr.. Taft on Guarantee of Deposits.
That extremely cautious and con-
servative eastern newspaper. the
Journal of Commerce. says editorial
ly tAug. PSI under the above head
ing:
at is greatly to be wished that Mr..
Taft, as a candidate for the presi
dency, would direct the undoubted
powers of his mind to an independent
study of financial questions that are
presented to him and form his own
judgment. instead OF repeating stale
secondhand statements, which on
careful examination he would find to
be without force. The question of
the guarantee of bank deposits has
been forced to the front to an extent
that is rather out of proportion to its
immediate Importance, but it is liable
to become an important matter for
consideration and it is we'll to have
clear ideas about it. Mr. Taft had
previously expressed some hasty con-
illusions ON the subject, but in re.
spouse to direct request for his opin-
ion he is reported as, debating a
somewhat formal statement.
I'm this he said that the 'funda-
mental objection to what he called
the proposed plan was that it would
be an inducement to and put a pre-
MUM on reckless banking He
thought that banks would be relieved
of responsibility to and fear. of the
SCI,
would be toward exploitation. manio-
| ulation and the use of the assets of
banks in a speculative way 1t would
promote speculation on the part of
one banker at the expense of his fell
lows which ultimately means at the
expense of the depositors.' He be-
lieved that any estimate of the neces-
sary tax based upon the present rate
of loss to depositors would be errone-
| Gus because the danger of loss would
be increased vastly by the proposed
! system
This indicates superficial view
of the subject if by the proposed
system is meant a really rationa!
plan The plan proposed in the Fow-
| Ter currency bill, for instance. would
| be feature of the organization of
| national banks in redemption dis
tricts with boards of management rep
resenting the banks and system of
examination. supervision and control
which would diminish and not increase
the chance of insolvency. One of the
purposes would be to prevent reck.
| less banking, and the check upon
| the use of assets in speculative
way would be much more effective
| than it has proved 10 be under the
| present law in several conspicuous
instances, like that of the Walsh
banks in Illinois.
| Under properly regulated sys
tenn the tendency toward exploitation
manipulation, etc, would be restrain
ed. 1t is apt to be overlooked that
the guarantee would apply only TO de
posts of banks after they have
failed. and the responsibility for sol
vency would not, certainly need not
be diminished and there could be M
resort to the guarantee fund until the
assets. which stockholders as well as
ldepositors are interested, in conserv
ing, had been exhausted. With a IA
tionally devised system this notion
that bankruptcy would be encourage;
is a mere bugbear, and Mr. Taft is
man of sufficient penetration not t.
be fooled by it if he would only de
vote some serious study TO a subjec
which is of growing Importance ant
which he may be called upon to hav
a well-considered opinion about
The Journal of Commerce, Aug. %
speech. says:
I'm his Topeka speech on Thursda
: night Mr.. Bryan enlarged upon hi
J notion of the guarantee of bank de-
posits AS usual he was effective i
attack upon the position of his oppt
nent and he really demolished tn
, chief argument of Mr.. Taft agains
| the principle of guaranteeing deposit!
But that was easy. The argumer
that banks would be more likely to b
recklessly managed and TO rush int
> Insolvency if they were mutually boun
, to make good losses to depositors
p case of failure is too shallow an
ridiculous to receive the countenanc
q that it is getting from that type {
conservative to whom any doctrin
novel to him is necessarily heretica
4 Those who resort to that argumeI
$ express their own weakness and al
Q throwing to. Mr.. Bryan popular i
v sue, of which he will make the mo!
that he ic canahIa nf