, 1908-03-13
GUARANTEE
OF DEPOSITS
A WYOMING BANKER OF ABILITY
TAKES ISSUE WITH MR.. FOR
GAN OF CHICAGO.
The Man Who Saves for a Rainy Day
Should Have His Money When the
Rainy Day Comes-Twenty Things
In Favor to One Against.

NJ. r. Collins, president of the Doug
las (Wyo.) National bank, recently re-
ceived from a Chicago banker n copy
of Mr.. Forgan's reply to Mr.. Bryan.
Mt. Collins e to his Chicago CORE.
spondent the following letter:
Douglas, Wyo., February 81, 1905
Mr.. C. N. Gillett, Cashier First Nation
al Bank, Chicago, Illinois. Dear Sir:
Your favor of the 18th inolosing print
ed copy of Mr.. Forgan's reply to Mr..
Bryan received.
Mr.. Forgan's argument seems to me
to be unsound in many particulars.
Great stress is put on the value OF the
good will of a bank. The value of this
good will is due almost wholly to the
depositors.
Your good bank is used as an illus.
~tration. Mr.. Forgan has undoubtedly
selected one of the very best banks in
the United States, however, what as
surance have we depositors in the
First National bank of Chicago that the
bank will not pass into the hands OF
some OF these ~''frenzied financiers" at
any time? Mr.. Forgan is now general
L. supposed to control the bank. A
few years ago il was Mr.. Gage. How
do we know but that a few months
hence it will be a John r. Walsh? |
believe your bank not only guaranteed
but helped TO pay the depositors of the
failed Chicago National bank. Sup
pose that failure had been a few years
later-say on October 80, 1907-wouid
not the ~depositors in that bank have
had a perfect right to question Mr..
Forgan's line of argument? The
shares of the Chicago National also
sold ut a large premium above book
value up to the very day it failed;
its stock, very likely, was also held
by estates of deceased persons, trusts
for widows and orphans" ETC., and its
president was considered, by its dc
posiLors at least, as able a ~inancier as
Mr.. Forgan is now considered by the
depositors in the First.
The fact of the matter is that tie
depositors do not know, and have no
way of knowing, If a bank is safe Or
not. 1t may be safe today, the stock
may be transferred tomorrow to per
sons who will proceed to make it IN,
safe but the depositors do not know
when the change takes place. l be-
lieve there is no question but that ii
every share of stock in the First Ma
tional of Chicago changed hands to
morrow; if every officer was replaced
with a new man, the bank would still
retain a large part of it present bust.
ness.
IL this is not tue TIE good VIII
rests in the officers and stockholders
and not in the bank. In any event
somebody or something is holding the
business and otner banks equally safe
are unable to get the business away
from them,
The argument in reference to a pre-.
MUM on dishonesty" is also faulty, in
my opinion. 1t has been demonstrated
quite frequently of late that the dis
honest have little trouble in purchas'
ing n controlling banks in good
standing. 1t seems to me that the pres.
ent requirement that persons wishing
to start a national bank must first BIZ
indorsed by a public official land un
less the applicants are reasonably well
rated in mercantile agency reports
further evidence of their good financial
standing should be furnished can be
extended so that it will apply to all Iii.
~rectors in national banks. No person
should be a director in a national bank
until the comptroller is satisfied that
he is of good reputation and in good
standing. l do not wish to be under
stood as arguing that all rascals can
be kept out of the banking business
by rulings and laws. If they could be
there would be little call for govern
ment guarantee of bank deposits. The
deposits should either be guaranteed
Or no bank should be permitted to use
the word national as a part of its
name. Mr.. Forgan says: "The govern,
ment, being responsible for the de.
posits, puts all on an equality and
makes all equally good" The question
as to the safety will not bother many
depositors if they are equally good
L huOW VI uO SOOu pdLhS tudt dlG hoN
safe.
l believe a great many country bank.
ers believe as l do in this matter. If
a pamphlet giving a few of the argu'
ments for and against government
guarantee of deposits be mailed to ev.
cry national bank in the United states
with d request that they vote on the
matter it will be found that more OF
them favor it than are against it.
As a citizen l favor it because the
man whosavesfor the rainy day SHOULD
have some place to put his money
where he will have it when the rainy
day comes. AS a banker | favor it be.
cause l believe it will help the banking
business by bringing out the large
amount of money that is now in stock.
ings. Not only this it will have n
tendency to cause many more people
to save their money n become valu.
able bank customers.
At present there are a great many
people who will not put their money
in any bank. After one has lost ones
little all because some bank presiden.
has guessed wrong on steel CON-