The Bon Homme County independent. [volume] (Tabor, S.D.) 1904-1913, 1908-10-01
Former Secretary Gage and Con.
gressman Fowler on the pc.
posit Guarantees.
TIL WALSH FAILURE CITED
Clearing House Action Like Plan Pro-
posed by Democrats.
Guards Against Honest Bankers SUI.
fering Runs- Modern system OF
Credits-Bankbcok should
he worth Face Always u
tBy John e. Lathrop.y

lMM.H M~aL
lyman j. Gage, FORMER secretary OF
the treasury, may be regarded as suf-
ncientiy conservative" to obviate
fears that he would be unsafe in his
banking views. Before the house com
nittee or banking and currency IN
Washington Mr.. Gage discussed ma
ticnaI finances and particularly the ma
tcnal bank. He sought an illustration
OF TIE idea he wss expressing. which
in general was In support Of the guar
antee plan. and like many others
found II in the Walsh fsilure 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.
E r banks, Mr.. Gage ga.d:
Mr.. Cages Statement.
swell. they learned another lesson
and they adopted another principle, a
principle provided for In this (the
Fcwler) 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 SIS 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.
ries the name OF bank over IL that Is
cleared o represented in the clearing
house by any clearing house bank; and
! can tell You as a safe prophecy that
we are at the end Of disastrous fail
ure in the city OF Chicago by clearing
house banks, since this regime has
come in. l am told that Kansas city
has the same thing, and other cities
will eventually adopt st.
Representative Fowler. Republican.
Charles N. Fowler, Republican, OF
New Jersey, chairman 81 the house
committee on banking and currency,
appears in the Congressional Record
with a 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:
"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 de-
posts. going into the directors room
and saying: Gentlemen, we have In
sured our deposits today. Now let as
proceed 10 make some rotten IoansT
'Is 1t not possible that IL VIII occur
to those directors that their losses
must come out Of their profits, out OF
their reserves, nj OF their capital, and
out OF their regulations? VII they
not realize that they can get nothing
out Of the guarantee until the last dol
lar OF their capital, surplus and
prohts has been wiped out, and stock
holders have been assessed double the
amount OF their stocka
The Bankers Reputat.or.
"Until their regulations have been
injured, II not ruined, and possibly
some OF them have been started on the
road b state prison? Can anybody
think that any board Of directors OF
any bank would be less soliciticus,
anxious and honest and wise after
they had guaranteed deposits than
they were before7
II assert again. after the most ma
ture deliberation, that r there IL
reason for insuring life and home,
there are more than a thousand good
reaecns-more than ten thousand good
reascns-why the deposltors OF the
BANKING institutions OF the United
STAIRS should be insured"
Two Valuable Contributions.
These two men have offered valuas
BE contributions to the discussion OF
the proposed guarantee Of bank de-
posts. Mr.. Gage has set forth ths
present trend OF bankers towards a
closer w~atchfulness over all inst.tu-
tIons which accept the peoples money
In trust, and has indicated the exact
means whereby, under a guarantee
law, bankers would do as now they do
-maintsin an association empowered
70 look sharply into financial concerns
which seem to be departing from
sound methods.
His reference to the John r. walsh
failure in Chicago was doubtless be-
cause II was known TO the country
generally, having been given wide pub
licity and therefore most likely to az
tract attention as an illustration.
However, there IL scarcely a i1cx%%
~ wherein bankers in late years have
mct zone nnder topping banks and mp
it'd them by guaranteeing deposits
rAaclly or in part, in order to help In
the quelling OF popular distrust and
the undermining OF confidence in all