Coeur d'Alene evening press. (Coeur d'Alene, Idaho) 1907-1929, 1908-09-29
Former Secretary Gage and Con.
gresham Fowler on the De.
posit Guarantee.
THE WALSH FAILURE CITED
Clearing House Action Like Plan Pro
posed BY Democrata
Guards Against Honest Bankers suf.
fertng Runs- Modern system Of
Credits- book should
he Worth Face Always
ny John z. Lathron.l

the treasury, may be regarded as suf-
hclently conservative" to ObViate
fears that he would be unsafe" In his
banking views. Before the house com
mlttee on banking and currency In
Washington Mr.. Gage discussed ma
tional finances and particularly the ma
tional bank. He sought an Illustration
Of tie idea he was expressing. which
In general was In support OF the guar
antee plan, and like many others
found Il In the Walsh fsllure In Chi
cago.
After explaining how the clearing
house banks took over the assets Of
the failed Institution, guaranteed all
depesitors, and prevented runs on 9TH
er banks. Mr.. Gage said:
Mr.. Cages Statement.
well, they learned another lesson
and they adopted another principle,
principle provided for In this (the
Fowler bill. by the vote and vol.
untary compliance OF ali the members
Of the Clearing House association,
they authorized the clearing house at
any time and At stated periodO to act
upon Its own volition and on lts own
account and for the information OF
the clearing house committee itself to
have full, complete and comprehensive
Investigation OF each member OF the
association, and not only Of each mem
Der, hut Of every Institution that car
rles the name or bank over II that IL
cleared or represented In the clearing
house by any clearing house bank; and
] can tell you as a safe prophecy that
we are AZ the end OF DISASTROUS fail
IRE in the city Of Chicago BY clearing
house banks, since this regime has
come In. am told that Kansas City
has the same thing. and other cities
will eventually adopt It."
Representative Fowler. Republican.
Charles N. Fowler, Republican. OF
New Jersey. chairman OF the house
committee on banking and currency,
appears IN the Congressional Record
with house speech In support Of his
bill which provided for guarantee OF
hank 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 be had insured his De.
poalts, going into the directors room
and saying: Gentlemen, we have liz.
sured our deposits today. Now let as
proceed to make some rotten loansY'
us it not possible that 1t will occur
10 those directors that their losses
must come out Of their profits, out OF
their reserves out Of their capital, and
out OF their reputatlonsl WIN the,
not realize that they can get nothing
oat Of the guarantee until the last dol
lar Of their capital. surplus ana
PROFITS has been wiped ont, and stock.
holders have been assessed double the
amount Of their stock?
The Bankers Reputation.
"Until their regulations have been
injured, II not ruined, and possibly
some OF them have been started on the
read 10 state prlsonl Can anybody
thlnk that any board Of directors OF
any bank would be less solIcitlous.
anxious and honest and wise after
they had guaranteed deposits than
they were before3
Il assert again. after the most ma
ture dellbcration. that r there Is one
reason for insurlng life and home.
there are more than thousand coed
reasons--more than ten thousand coed
reasons why the depositors OF the
banking institutions OF the United
states should be insured"
Two Valuable Contributions.
These two men have offered vaIua,
bile contributions TO the dlscusson OF
the proposed guarantee OF bank de-
pests. Mr.. Gage has set forth the
present trend OF bankers towards
closer wNtchfulneas over all lnst.tu.
items which accept the peoples money
In trust aud has indicated the exact
law, bankers would do as now they do
-matntsin an association empowered
TO look sharply Into financial concerns
which seem to be departing from
sound methods
His reference to the John r. walsh
failure Ia chicago was doubtless be-
cause II was known to the country
generally, having been given wide pub
LEFTY and therefore most likely to az.
tract attention as an illustration.
However. there 10 scarcely q local.,
y wherein bankers In hate years have
net gene under toppllng hanks aud mn
held them by guaranteeing deposits
wholly OF In part. in order to help In
the quelllng Of popular dlstrust and
the undermining Of confidence in all
banking Institutions.
Ne Delay sor Depoaitora.
u - quite apparent that under
guarantee % deposits there would Be-