The daily sentinel., 1908-10-26
Former Secretary Gage and Con.
gressman Fowler on the De-
post Guarantee.
THE WALSH FAILURE CITED
Clearing House Action Like Plan Pro-
posed by Democrats
Gnards Against Honest Bankers Snf-
fering Runs Modern System u
Crcdits-BankbookS Should
BE Worth Face Aiways
IBy John E. Lathrop.l

the treasury, may be regarded as suf-
hciently 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 oa-
tional finances and particularly the ma
tional bank. He sought an illustration
OF the idea he was expressing. which
in general was In support of the guar
antee plan. and like many others
found IT in the Walsh tsilure In Chi.
cago.
After explaining how the Gearing
house banks took over the assets of
the failed institution guaranteed all
deposltors. and prevented runs on 9TH
er banks. Mr.. Gage said:
Mr.. Cages Statement.
"Well. 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 the 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 Its 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.
ber. but OF every institution that car
ries the name OF bank over it that is
cleared or represented in the clearing
house by any clearing house bank: And
i can tell you as a safe prophecy that
we are at the end OF disastrous fail
ure 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
bank deposits. He specially answered
the assertion that such n guarantee
would induce reckless banking, say
ing:
MIR. Chairman. we are occasionally
met with the statement that guarantee
OF deposits would lead to unsound
banking. Can you think OF
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 ms
proceed to make some rotten loansr
''ls IL not possible that II will occur
to those directors that their losses
must come out OF their profits. ont Of
their reserves. out of their capital. and
out of their reputations7 Will they
not realize that they can get nothing
out of the guarantee until tho last dol
lar of their capital. surplus and
profits has been wiped ont. and stock
holders have been assessed double the
amount OF their stock2
The BANKERS Reputation.
"Unti their reputa tons have been
Injured. If not ruined. md possibly
some OF them have been started on the
road to state prison7 Can anybody
nhink that any board OF directors OF
any bank would he less sollcitous.
anxious and honest and wise after
they had guaranteed deposits than
hhey were before?
Il assert again. after the most ma
ture delibcration. that II there is one
reason for insurlng life and home.
there are more than thousand good
ireasonS-more than ten thousand good
,reasons-why the dcpostors OF the
banking institutions OF the United
.StAtpS should he insured ."
Two Valuable Contributions
These two men have offered valua
shic contributions to the dlscussop of
the proposed guarantee OF bank de
posts MIR Gage has set forth the
present trend OF bankers towards n
krloser watchfulness over ali institu.
ltions which accept the peoples money
lin trust. and has Indicated the exact
lmeans whereby. under guarantee
law, bankers would do ns now they do
E-maintnin an association empowered
ITO look sharply INTO financial concerns
(which seem to he departing from
sound methods,
His reference to the John r. Walsh
failure In Chicago was Doubtless he
Cnuse it was known 10 the country
generally. having been given wide pub
tcity and therefore most likely to at
tract attention as an illustration
However. there is scarcely local
ry wherein bankers in late years have
not gone under toppling banks and up
held them by guaranteeing deposits
WHOLLY or In part. in order to help In
the queiling OF popular distrust and
fbe undermining OF confidence In oil
banking institutions.
No Delay for Depositors
II 10 quite apparent that undei
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