The Marion daily mirror. (Marion, Ohio) 1892-1912, 1908-09-28
Former Secretary Gage and Con.
gresham Fowler on the De-
posit Guarantee.
THE WALSH FAILURE CITED
Clearing House Action Like Plan Pro.
posed by Democrats
Guards Against Honest Bankers Suf-
fering HUNS Modern system Of
redits-BankbookS Should
BE Worth Face Always
tBy John Il. Lathrop.1 ]

fclently conservative" TO Obviatc
fears that he would be unsafe" in bis
banking views. Before the house com
mIttee on banking and currency in
Washington Mr.. Gage discussed ma
tional finances and particularly the ma
tional bank. He sought an illustration
OF tie idea he was expressing. which
In general was in support OF the guar.
sntee plan. ana like many others
found It in the Walsh feilure in Chi
cago.
After explaining how the clearing
house banks took over the assets OF
the failed institution, guaranteed all
depositors, and prevented runs on 9th
er banks, Mr.. Gage said:
MIR. Cages Statement.
"Well, they learned another lesson
and they adopted another principle,
principle provided for in this dhe
| 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 70
have fun, complete and comprehensive
| Investigation of each member Of the
association, and not only Of each mem
Der, but of every institution that car
rlcs the name Of bank over il that Is
cleared or represented in the clearing
house by any clearing house bank; and
| can tell yUu as n safe prophecy that
we are ut the end Of disastrous fall
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
win 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 a guarantee
would induce reckless banking, say
ing:
"Alr, Chairman, we are occasionally
met with the statement that guarantee
OF deposits would lead TO unsOund
banking. -" Can you think OF L
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 us
proceed to make some rotten loansT
'ls ii not possible that II will occur
20 those directors that their losses
must come out of their profits, out "
their reserves, out of their capital and
out Of their regulations? VIII 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 stock,
holders have been assessed double the
amount of their stock?
The Bankers Reputation.
"Unul their regulations have been
injured, If not ruined, and possibly
some of them have been started on the
road TO state prison? Can anybody
thlnk that any board OF directors OF
any bank would be less solicltious
anxious and honest and wise after
they had guaranteed deposits than
they were before?
! 81 assert again, after the most ma,
ture dellDcratlon, that 4 there is one
reason for insuring life and home
there are more than n thousand good
reasous-more than ten thousand good
reasons-.why the deposltors OF the
banking institutions OF the United
States should be insured"
Two Valuable Contributions.
These two men have offered vama
bic contributions TO the discussou OF
the proposed guarantee of bank de
posts Mr.. Gage has set forth the
present trend Of bankers towards q
closer watchfulness over all msttu
tions which accept the peoples money
in trust, and has Indicated the eXac
means whereby, under guarantee
law, bankers would do as now they Dc
TO look sharply into financial concern,
which seem 10 be departing from
sound methods.
His reference TO the John Il. Walsl
failure in Chicago was doubtless be
cause ii was known to the countr!
generally, having been given wide pub
licity and therefore most likely to at
tract attention as an illustration.
However, uhere is scarcely a local.
~ wherein bankers in late years hav
not gone under toppling banks and M
held them by guaranteeing deposit
wholly or in part, in order to help il
the quelling Of popular distrust ant
the undermining OF confidence in al
banking institutions.
No Delay for Depositors.
1t is quite apparent that aunde
guarantee OF deposits there would
NO alteration OF conditions affectin