New-York tribune., 1908-10-25
CONSERVATISM MEANS SAFETY.

- .r.-----,- ,.- investors IN national banks
--- --. insured and TO prevent failures anu
-.-.-..-- losses II Is necessary 10 cio1he lile
--.-.-- Department with power to enforce sue"
- congress may enact 10 prevent specu-s-
-5.- and Otherwise dangerous banking 11'S1i q
---- -..-zc=l banks DO nor Tail' anu lile 1'-e
.-. -fs- .-ve-Etf,-uS else beng equal eoi-se- g
- ..--.-- ,rs-a 1ae Increasing age ct a isllo-I -
-- This. country that fact = eFldehceu III
., -.--say smaller loss 20 creditors OF -l-7'l' en-
-z---as banks. uase5 on the T0-lHe oL te4'1s-l1 4
II 80. --.-.- hanks of the New England. Eastern
81. -..==-. western States Individual oeIusllS --l
- -.-.- -.a-S- en Nay -. 1$5,. amounted 10
...r- and. IS shown above, the loss 10 al
-...-- ..r -7~eIveur banks uQuidated was >SS'-
..... THE DEPOSITS the banks Of the Ne" Ll-e-
-..- STATES WEE So per cent OF the eesies4'7'
--. loss e-rs-a:re5 by creditors OF insolVeIt
-... .- these states was but Il per cent OF tIe
s-z--- loss To creditors of all laSoi'eilI 'el-h ~
g. -. Eastern states the percentages were 0e-o-
-- -.-. -yf.s1e IN the Middle Western states they
80 -- s-F 80 The relative proportions are
---.- an -1se other geographical DIVISIONS lIleI
. .- The Southern states The percentage OF HS-
---s-- -- solvent banks was rs NAlie lle iO7s ~
r-a=.---- NJ insolvenr banks vas 2o45- In the
Western states Tie figures were 80 anu --''' N-i
e. ne Pacific states 615 and 80
~ me eyes r the Treasury officials these hgures
e. themselves constitute one q t;ie strongest At
--s--z AGAINST NJ Bryan's theory Of the guarantee
r. hank s=7ose-s The conservative New fnglan1
,,.-gs-e 7-r,-l5 Be forced 70 pay share and share
.-r.z ne losses OF their more reckless western
hro-as-s and the shareholders IN the aDsolutely
solvent banks q the East would be lnVoLFeo 'ii
sxz-- -a-5o with those the Insolvent western
bzaks. while the depositors in the SOUND DslN ~
-a.grr suffer co--espondingly with those whose
money vas lost in unsound bank
II ne lagr report made by the Treasury Depart
r1e-- there we're no insolvent national banks IN
Mae Rhode Island, Delaware, Vest virginia ana
1-lze-a MARYLAND South Carolina, 1calo 1 I'LL
End Nevada had one each. Georgia ana F" -seOl-Sli'
txo. North Carolina. Kentucky and Arkansas
th-ee- There were twelve lLlso-Ee--' OS-- ~ -
E.sssc--set-s f0-1y-four IN New YORK I"enls
me n Pennsylvania tni-Ty-ons IL Texas, t"e1ly-
ta-ss = Oaio, twenty Il Nebraska and thiF'y-nFe
Il Kansas. These figures have not Ine1eT4a--s
CHANGED Z the last year. and a-tnooen TIE He u-e
70 -ss g-s not yet attainable 81 the Treasury De
-s---e-- = IS asserted that the ratio viii not be
E-ecle5.
- = proposed by M Bryan, says " =
FozIs- sf- Nurray's chief clerk and staasticlan'
IL; re entirely sound banks Of Rhode IsIano'
We v5-g+-ta and Maine shall be held equally re-
r-c-sE5s with the banks Of Kansas ano Neor1sANa-
-kzs scheme, instead ot putting e premium oi
co-sz-va-sve and sound banking. makes wild Epecu-
lstoc safer and mere tempting. and Will II II Is
PIT into operation cause tne Creates
have ever known
s----gsat laws 1ot required Tor the con-
te-vacsre banker who carries the required reserve
q Is Liabilities invests p-udeutly end lenos 70
Ecvs1t interests ample security, but these laws
hEv. proved themselves 70 be needful 70 irnpTu-
os-t sgnorsnt Or dishonest bankers, and Il IS ior
t1-z rvre that the Controller o1 the currency is
ever q the lockout Ny Murray Is satisfied that
locg IS business IS carried on there VII De N
czrs1-e business men and he REGARDS Il as inevl-
table ;azt these men VIII lose not only their own
money but that Of co-investors- he DeIieEes llae
lzw. however stringent VIII make me lsho-
rEct banker z wise man. but he also believes tnaI
= ne law IS r5gdly executed. tc bank of1clals are
Esrch.6 zn6 ~ one or two minor changes are
made 81 The law the dishonest banker VII soon
become almost obsolete and the inprudent BANKER
STATUTES NEED ENFORCEMENT
Under The federal laws e receiver may oe aP
pointed not only for insolvency but for violations
q Eyecsdc statutes but with one e1cepuon lHSo'
v.,ov -. been ths sole cause for the closing OF
bszks sud ne appointment Of receivers Inc 0cca-
Eio-zl deficiency II reserve or tae granting VI
los- = excess 81 statutory limit is o. 41selI
warrant fer a receivershD. but Nj A0i1Hy 1
belsyes TIA; 80 long ss there sTs sl@t1'eS o-
books recurring e specific reserve and !inAene INC
VolUE1e cf loans ouch statutes shoN1o DC S---N'0
and conservative banding Insured
The records OF the Treasury DepATl~H7n' ~ -
that bank failures have been due mainly 70 deial
cstions excessive loans, fraudulent management
and snjuc1cious banking and thai the 4Ast H14i-
cause rlay not be attended BY Violations OF spe-10
laws but oy v1olaricns solely OF CONSERVATIVE OoSi
ness p-.nc.pies equally disastrous to the DaaAeI
cre55t gE,e o<+oerz and directors Of bank VINO
lend specuIAtively shErsholders and oepositofs
rloney are Il the opinion OF NJ. Murray as galS
II violating the spirit Of the law a. they wound Oe
Z Violating its letter they not conducting
bpsinezs OF tie Character contemplated when they
o5szlneo authority 10 engage n The buElness OF
banking To curtzl this violation MI Murray
has srgTsSfe6 eu important Il not the most i'm
Dorzut change in the federal banking act re-
lstEg 70 bank examinations Under the law the
coroensario- OF examiners Is based the capital
Etock oe the banks. except with respect TO asso-
Gallons located IN reserve cities and in the terri
tories snd ss a result 81 examiner who IL not
ABSOLUTELY scrupulous Is more concerned In exam
ininK cae banks In the shortest time possible 10
obtain his Zee than IN fhs thoroughne1s OF his
Eoyk- Even fairly conscientious men reSa<n It as