Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1908-10-13
Former Secretary Gage and Con.
gresham Fowler Favored
Bank Guarantee.
THE WALSH FAILURE CITED
Guards Against Honest Bankers Suf.
fering Runs-5ank Book Should
Be Worth Face Value.
TBy John f. Lathrop.l

the treasury, may be regarded as suf-
ficiently conservative" to obviate
fears that he would he Unsafe" in his
banking views. Before the house COM
mittee on banking and currency in
Washington Mr.. Gage discussed ma
tional finances and particularly the ma
tonal bank. He sought an illustration
of tie idea he was expressing. which
in general was in support of the guar
antee plan. AMI like many others
found it in the Walsh failure in Chi
cago.
After explaining how the clearing
house banks took over the assets of
the failed institution. guaranteed All
depositors, and prevented runs on 9TH
er banks, Mr.. Gage said:
MFR. Cages Statement.
"Weil. they learned another lesson
and they adopted another principle. a
principle provided for in this (the
Fowler BILL BY the vote and vol
untary compliance of all tie members
of the Clearing House association.
they authorized the clearing house at
any time and at stated periods to act
upon its own volition and on it's OVID
account. and for the information of
the clearin" house committee itself to
have full complete and comprehensive
investigation of each member of the
association, and not only of each mem
Der. but of every institution that car
rlcs the name OF bank over it that is
cleared or represented in the clearing
house by any clearing house bank: and
L can tell you as n safe prophecy that
we are at the end Of disastrous fan
ure in the city of Chicago by clearing
house banks. since this regime has
come in. Il am told that Kansas City
has the same thing, and other cities
| will eventually adopt it,
Representative Fowler, Republican.
Charles y. Fowler, Republican. Of
New Jersey. chairman of the house
| committee on banking and currency.
| appears in the Congressional Record
| with a house speech in support of his
bill Which provided for guarantee OF
bank deposits. He specially answered
the assertion that such guarantee
would induce reckless banking, say
ing:
| mfr. Chairman. we are occasionally
met with the statement that guarantee
| of deposits would lead TO unsound
banking. Can you think OF a
banker, because he had insured his de
posits, going into the directors room
and saying: Gentlemen, we have in
sured our deposits today. Now LET IT'S
proceed to make some rotten loans?'
as it not possible that it will occur
to those directors that their losses
must Gene ont of their profits. out of
their reserves. out of their capital. and
out Of their regulations? Will they
not realize that they can get nothing
out of the guarantee until the last do!-
ilar CT their capital, surplus and
!. profits has been wiped out, and stock
holders have been assessed double the
amount of their stock?
The Bankers Reputation.
"Until their regulations have been
injured. if not ruined, and possibly
some OF them have been started on the
road to state prison? Can anybody
think that any board of directors of
any bank would be less solcitious
anxious and honest and wise after
they had guaranteed deposits than
they were before?
81 assert again. after the most ma.
ture deliberation, that # there is ono
reason for insuring life and home
there are more than a thousand good
reasons-more than ten thousand good
reasons-why the depositors Of the
i. banking institutions of the United
States should be insured"
Two Valuable Contributions.
These two men have offered, valua
, BILE contributions to the diseusson OF
the proposed guarantee of bank de
posts. Mr.. Gage has set forth ths
; present trend of bankers towards q
closer watchfulness over all institu
, lions which accept the peoples money
in trust, and has indicated the exac
| means whereby, under guarantee,
law, bankers would do as now they d,
, maintain an association empowered
/ to look sharply into financial concern.
J which seem TO be departing from
sound methods.
+ His reference to the John r. Walsl
, failure in Chicago was doubtless be
, cause it was Known TO tie countr,
: generally. having been given wide pub