New-York tribune., 1908-04-13
FAVORS FOWLER BILL
7 r. Bush Just Returned from Id
~oeating 1t Through the Vest.

Ing T Bush, president OF the Bush Terminal
-,a-v. who has just returned from trip in the
-. where he presented for the Merchants AS
f.,ion Of New York arguments the merits
-. Fowler currency bill before various com
.aI bodies. including those in Los Angeles. san
-isco and Omaha. said yesterday that he had
- growing interest in the question of the
.-,ntee az deposits by hanks. The provision
-. IN oklahoma seems to he popular with the
r1o.,,, Of depositors' ne said "and the subject
ns-5sr general discussion in other parts Of the
west
s,,osts have created in many quarters an i'm
-, thst the Fowler bill and the Oklahoma
are wild and radical. As a matter Of fact
- s-e simple and conservative. The guarantee
.--e is merely everyday mutual insurance ap-
- 70 hank deposits. The state nation does
= srsrsntee. IL holds the guarantee fund as
&c The Oklahoma act is more conservative
,-,s respects than our national banking laws
:, = -.,,rres % Ter cent in towns OF less
,s,n $500 population and = Per cent in larger
-,r-riss The national laws require only i
= cent outside Of reserve cities.
-Tss Fowler hill divides the country into bank
go districts ana places the responsibility for bank
= methods in each district upon the banks OF
-. district and insures care and WatchfuIness by
.sssiug = Per cent of local losses upon each dis
e.. found two objections 10 the measure
"a, the risk involved is great and that guarantee
.rorl6 encourage bad banking. I do not believe
ei-r
.7ontroller Ridgely's last report shows an aver
80, Ioss 10 creditors 81 insolvent national banks
a., The beginning Of The national banking busi-
rss. Until October 81 1871, OF approximately one
,ttrreeuth al ! Per cent Of the annual average OF
,s,,idual deposits. This is a percentage 10 de-
rosirs of O.e73. The percentage OF deficiency in
fsnities Of the institutions which have failed has
hssn ,sl7. What is pUrposed by the guarantee
:, seposts s 10 pay these losses from fund
rsissd BY 81 the national banks. When this IS
sis-ributed IT becomes small in relation TO the
,boe volume @ their assets that il shrives up TO
,bs one-thirteenth OF I per cent"
NJ Bush discussed the guarantee feature with
-sfe-snce The panic Of last fall. Individual de-
.osis il national banks at the time Of the October
s,s,suent he said. We're s43I9, ,035, ,402. He esti-
,stes the losses about s.. $50 000. II the Fow-
lsr bl had been a law. he said. one-Quarter would
beye been assessed against the banks OF the re-
ssr1ptien district where the failures occurred, in
order Is he explained. 10 give them motive for
c.ose scrutiny OF one another. The amount called
,or would have been $3.50 o00 paid without regard
70 the guarantee fund In the case Of the bank
with deposits Of million" said Mr.. Bush. the
assessment would be about 1922 so and bank
WITH only 10000 on deposit would be assessed
onlv SO .. This Is certainly not heavy burden.
..Nox in regard 10 the other three-quarters Of
ne Iosses-S2 100000. The Fowler bill provides
tnar tne banks shall receive 1 per cent interest
the deposits in the guarantee fund, which would be
about S25,60ooo COO. giving the banks SS,50o0o0 in
Interest Thus this single item alone would pay
al losses charged the guarantee fund and leave
q surplus o( 3 600 coo More than this. the guar
sn,ee fund is sweIed by the per cent tax proposed
by the FoW er bill the banknotes which il
authorizes. Al the present circulation this tax
would bring 10 the fund about $4,000. 600 annu-
sIy. more than FIVE times the losses chargea bic
IL r. Even with the charges for administration
income q the fund would more than meet all
charges and losses. and it would never be neces-
SAT- ,9 Lp into the principal Of the fund, except,
perhaps 10 meet temporary emergency. The
public would be guaranteed sixty-f1ye times over
ty the principal Of the guarantee fund because its
Der esrt of Tie deposits would be sixtyfve times
me average losses"
Ar Bush says the argument that the guaran-
Zee fund might make the bankers reckless is met
Big rH- fact that The Fowler bin does not make
Eao5 Tue losses Of stockholders OF a bank that
fails sad that the bin provides for local committees
viti The power Of visitation and scrutiny the
assets Of the banks OF the district. The public"
Dr. Bush said. under the system OF a mutual
guarantee Of deposits. with supervision of one
another ny the banks. we'll the direct super
vision u The Controller of the Currency, would be
getting rhe benefit of competition for conservatism
and sound mana cement and would have the whole
banking system Of the country practically under
Ire control Of its most careful and conserys tive
members