The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1908-10-12
SOME GOOD AUTHORITY.

LYMAN j. Gage, former secretary of
the treasury, may be regarded as SUM-
GENTLY conservative" to obviate fears
that he would be unsafe" in his bank
ing views. Before the house commit
tee on banking and currency in Wash
ington. Mr.. Gage discussed natlonai
finances and particularly the natlonal
bank. He sought an Illustration of the
idea he was expressing, which in gen
eral was in support of the guarantee
plan. and like many others found 1t In
the Walsh failure in Chicago.
After explaining how the clearing
house banks took over the assets OF
THE failed institution, guaranteed all
depositors, and prevented runs on
other banks, Mr.. Gage said:
We'll. they learned another lesson
and they adopted another principle,
a. principle provided for in this (the
Fowler) bill BY the vote and voluntary
compliance of all the members of the
clearing house association, they au-
thorized the clearing house at any
time and at stated periods to act upon
it's own violition and on its own ac-
count, 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 but of every institution that car
ries the mamie of bank over it that is
cleared or represented in the clearing
house by any clearing hause bank;
and / can tell you as az safe prophecy
that we are at the end of disastrous
failure in the city of Chicago by clear
ing house banks since this regime has
come in. 1 am told that Kansas City
has the same thing, and other cities
will eventually adopt it,
Charles N. Fowler, republican, of
New Jersey, chairman of the house
COMMITTEES on banking and currency,
appears in the congressional record
bill which provided for guarantee of
bank deposits He specially answered
the assertion that such a guarantee
would indude reckless banking saying:
"Mr. Chairman. we are, occasionally
met with the statement that guarantee
of deposits would lead to
unsound banking Can YOU
think of a. banker. because
he had insured his deposits go
ing: Gentlemen, we, have insured our
deposits today. Now let us proceed to
make some rotten loans?'
'Ts it not possible that it will occur
to those directors that their losses
must come out of their profits, out of
their reserves out of their capital, and
out of their regulations? Will they
not realize that they can get nothing
out of the guarantee until the last dol
lar of their capital, surplus and profits
has been wiped out, and stockholders
havia been assessed double the amount
of their stock?
Until their regulations have been
injured, if not ruined, and possibly
some of them have been started on
the road to state prison? Can anybody
think that any board of directors of
any bank would be less solicitious,
anxious and honest and wise after
lHey HdQ SudTdHteeu ueIOSllS lli1A
they were before?
Il assert again, after the most
mature elaboration, that if there is
one reason for insuring life and home,
there are more than a thousand good
reasons-more than ten thousand good
reasons-why the depositors of the
banking institutions of the United
States should be insured
These two men have offered valu-
able contributions to the discussion of
the proposed guarantee of bank de-
posits Mr.. Gage has set forth the
present trend of bankers towards a
closer watchfulness over all institu
tons which accept the peoples money
in trust, and has indicated the exact
means whereby. under guarantee law,
bankers would do as now they 10
maintain an association empowered to
look sharply into financial concerns
which seem to be- departing from
sound methods.
PTTRT T(ITY OF FINDS