The labor world. [volume] (Duluth, Minn.) 1896-current, 1908-10-03
Former Secretary Gage and Con-
gresham Fowler on the
Deposit Guarantee,
SAFETY OF DEPosIToR
I DEMANDS THE REFORM
Present Clearing House Action .
Anticipates Plan Proposed BY
Democratic Statesmen.


Lyman ]. Gage, former secretary Of !.
the treasury, may be regarded as suf-
feiently CONSERVATIVE" to obviats
fears that he would be 'unsafe'' in his
banking views. Before the house com
mittee on banking and currency in
washington Mr.. Gage discussed ma
donal finances and particularly the ma
donal bank. He sought an illustration
Of tie idea he was expressing, which
In general was in support Of the guar
antee plan. and like many others
found it In the Walsh failure in Chi
cago. -
After explaining how the clearing
house banks took over the assets e
the failed institution, guaranteed all
depositors, and prevented runs on oth-
er banks, Mr.. Gage said:
- Mr.. Cages Statement.
swell, they learned another lesson
and they adopted another principle, q.
principle provided for in this (the
Fowier) bill. BY the vote and vol.
uptary 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 it's own volition and on It's 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-
Der, but Of every institution that car-
rfes the name Of bank over it that 10 {
cleared qr represented in the clearing
house by any clearing house bank; and
I can tell you as a safe prophecy that
We are aat. 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
bdl! which provided for guarantee Of
bank deposits. He specially answered
the assertion that such 4 guarantees
would Induce reckless banking, say
ing ,-i@ :s. ss.
''Mr. Chairman, we are occasionally {
met with the statement that guarantee
Of deposits would lead to unsound
banking. = Can you think OF q
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 ~
proceed to make some rotten loansr
"1s 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 reputattons? 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 stock
holders have been assessed double the
amount Of their stock?
The Bankers' Reputation.
until their regulations have been
injured IL not ruined, and possibly
some Of them have been started On the
road to state prison7 Can anybody
think that any board Of directors of
any bank would be less solicihous,
anxious and honest and wise after
they had guaranteed deposits than
they were before? .5
II assert again. after the most ma
ture deliberadon, that f there is one
reason for insurng life and home,
there are more than thousand good
reasons-more than ten thousand good
reasons-why the depositors Of the
banking institutions Of the United
States should be insured"
Two Valuable Contributions.
These two men have offered valuar
bic contributions to the discusson of &
the proposed guarantee Of bank de
posts. Mr., Gage has set fortk the
present trend Of bankers towards -.
closer watchfulness over ali inStitu-
tions which accept the peoples money
n trust, and has indicated the exact
means whereby, under guarantee
la1y, bankers would do as now they do
-maintain an association empowered
g look sharply into financial concerns y
which seem to b departing frsm
sound methods.
1ssreference to the John r. Walsh
feilsses In Chicago was doubtless IS
Olsef Sc was known u. tie country
generally. having been given wide pub
MciH and therefore most likely 70 at
ASct attention I % an illustration.
However, there % scarcely 8 slocali-
! ~ 30 ah.nkery IN late yearx haya