The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-05-23
he Addresses the Money Chang.
ers at a Dinner.
Law is NOT ENFORCED
ne Declares, in Regard to Loans
by National Banks.
HIS Words Are Resented by
Head of First National.

Chicago. May IA spirited tilt be-
tween w. j. Bryan and James B. For
gan, president of the First National
oank OF Chicago, was a feature last
night at the dinner of the Bankers
club OF Chicago, in the Auditorium
Annex. Mr.. Bryan, in the course of
an address to the bankers found oc-
casion to say:
1t appeared in the Walsh case here
In Chicago, that the law as to loaninR
by national banks, is directory only,
and that no penalty is attached for
the loan of more than 10 per cent of
Individual.
No penalty, at least except such as
may be imposed in the discretion of
| the comptroller. And what is the sit
| uation? If a bank loans more than
| the prescribed 10 per cent, it Is noti-
fed not to do it again. If the bank
continues to loan more than 10 per
cent, it Is again notified not to do it.
II 1t keeps on it keeps on being notifi-
ed. Am not right?"
| A coterie of bankers and business
men in the rear of the room laughed.
| This was too much for Mr.. Forgan.
The president of the First National
had indeed shown several indications
in earlier parts of the speech of not
being in accord with the speaker. Mr..
Forgan raised his hand deprecatingly.
| But the law has been changed"
said Mr.. Forgan, who apparently did
not hear Mr.. Bryan use the words
"capital and surplus" in leading up to
his point. 4
''The law now forbids loaning 10 per
cent on capital and surplus"
l. "And is there any penalty?" de-
manded Mr.. Bryan in an aggressive
voice. and turning to look at Mr.. For
gan, who sat to his right, four seats
IawaV the SDaa karS fa hle
There Is no penalty" said Mr.. For
gan, "but the law is now enforced
Mr.. Bryan gathered himself togeth-
Ter, leaned forward and extended his
arm into his fighting position.
/ An Awkward Question.
''Win any one tell me that the law
Twas enforced in New York during, the
1panic?" he cried. He waited but there
was no answer. Mr.. Forgan said moth
Ting. ct will stake my reputation"
tcried Mr.. Bryan, more vehemently
THAN before and speaking slowly, "that
the law was not enforced in New York
during the panic" Another pause. The
room was entirely quiet. Bankers
looked at Mr.. Forgan. Mr.. Forgan
looked at the pink carnation before
him b. Mr.. Bryan regarded the cham
delier. = @T
"And will say further resumed
Mr. Bryan smi1ingly, 'that if the law
had been enforced in New York dur,
ing the panic. the panic would have
been great deal worse"
/ Everybody laughed at that, includ-
| ing Mr.. Forgan, and the atmosphere
became clear again. ~
| Mr.. Bryan then proceeded to unfold
| his theory that the criminal law
should be applied to bankers who in
| fringe the 10 per cent provision.
/ In my most emphatic belief" no
said, at should be made a criminal Of
fense for a bank official to lend more
than 10 per cent of the capital and
surplus to one person. The criminal
law should be applied to such per-
son. Don't you agree with me?"t
| 'Well," he said, whether you agree
with me or not, let me tell you that Is
million depositors will agree with me
on the proposition" .ftf
| Mr.. Bryan declared for the guaran-
teed banking system, such as Okla
homa, has, where every bank stands
sponsor for every other bank. He said,
that unless such security were offered
| to depositors to prevent them from
banking with the government by buy
| ing postal orders. or from sending
| their money to Europe to be banked
! in one of the government banks there,
| this country would be forced to yield
| to the demand for postal savings
bank
On the subject of emergency cur
rency Mr. Bryan said he believed that
this currency should be issued by stne
federal government and lent to the
banks. One reason advanced for the
belief was that the state bank could
be given the same assistance in times
of need as the government institu-
tion. 'I do not know" he said. why
a state bank should not be thus aided
in the matter of relieving distress. In
NV opinion the state and the national
bank should be placed on the same
footing when 1t comes to the question
of securing emergency currency.
He said that he believed that our
present banking system, with 10000
independent banks more nearly
meets the needs of the people of this
country than a system like that OF the
Rank of England would do, but he
declared that the system needed
general overhauling.