The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-02-23

the big banks might have an advantage
over the little banks. Where is the pa
triotism that we have been hearing
about in our financiers? Do they insist
upon system that requires that the
depositor shall have his interests ieop-
ardiZed. and that the community shall
suffer that the big banks may have al
advantage over the little banks?
Why Bankers object.
went out to Nebraska and got that
bill introduced there. | thought, surely
if we can not have it in the United
| States, we can have ii in Nebraska
Daughter) But when the bill came UT
there was a lobby of national bankers
to oppose it, Why" they said, If
state banks are safe, people will not
deposit in national banks?" daughter
What is the objection now? Mr.. For
gan, the head of one of the largest
banks in Chicago. stated as his objee-
ton that it would make all banks Sc
cure. GaughterD What an objection.
He said that, under such system, you
could just step in any bank and de-
post your money, That would be aw-
full (Applause.) ! ask you this ques-
ton, my friends. must we leave the
community helpless rather than have
all banks secure? What is more impOr-
tant than the security of the deposit
tor? Why not look at this question
once from the standpoint of eighty mill
lions of people who have lost hundreds
of millions of dollars i'm this particular
crisis that they never can get back? Is
that not sufficient reason for a different
plan, or shall we sit back and say. mo
it would not do to make all banks Sc
cure, for then the big banks would not
have any advantage over the little
banks. The big bank will still have
an advantage over the little bank. II
does not need to rest upon the insecur-
ity of ALL The fact that it has a large
capital and surplus enables it to loan
more to one individual than the small
banks can. A bank can only loan one
tenth of its capital and surplus to one
person, and a bank that has ten times
the capital and surplus of another can
accommodate the man who wants 70
borrow large sums. Isn't that an adj
vantage? And then there is another
advantage. 1t has an advantage rest
ing upon vanity. People like to do bus
mess with the big banks; they like to
go in and have the president of the
biggest bank bow to them and smile
Qaughter) Isn't that some advantage?
Wouldn't that remain, even when all
banks were safe?
Sly Dig at Bankers Caution.
What is the other objection? They
say that, if all the banks are secure
and the depositor can not lose. the
banks will be reckleSsly managed.
am glad that that argument is made
now, when we have seen the extreme
care that is exercised under present
conditions. daughter and applauseD
My good friend here, Chairman Stet-
son, suggested that difference as large
as an ocean separated him from some of
the speakers, and / thought l could no
tice a slight inclination of the head in
my direction. Laughter) I wonder
If there can be a large gulf between us
on this subject. The manager becomes
careless! Why, my friends, the officers
of the bank are selected by the direc-
tors and the directors are chosen by
the stockholders. and the stockholders
would lose all of their capital, all their
surplus and then they would have to
respond to the 100 per cent liability be-
fore any other bank could lose any,
thing: wouldn't that be enough to make
the officers careful? If that isn't
enough, suppose we try the criminal law
and see if that will make them careful.
What has been the difficulty with our
banks? Our financiers will tell you
that the banks have failed in almost
every instance because the officers of
the bank have Violated their trust and
used the money of other people to ad-
vance their own private interests! Isn't
that true, Mr.. Gage?
Mr.. Gage: Yes, sir.
Mr. Bryan: Isn't that true, Mr.. Ba-
ker?
Mr.. Baker: Yes, sir.
Mr.. Bryan: Why hasn't it been rem
edied? Because the managers of the
bad banks don't want to be restrained
and the good bank isn't anxious to have
the other ones restrained, because the
good bank can point to the recklessness
of the other and draw away deposits.
Sore Place in Banking System.
am not supposed to know anything
about banking, and yet these distin-
guished men, who have shed iuster on
the banking business, admit that have
put my finger upon the sore place in
the banking system. Now when we
make all the banks responsible for each
bank. then they will be interested in eff
fective legislation that will protect the
public from a misrepresentation OF
funds We have been asking for this
regulation all the time. | introduced a
bill in congress to increase the penalty
was large; I supposed that would have
unanimous support. I supposed the
stockholders would be glad to hold over
their officers the danger of longer
penal term if they were dishonest and
took money. but / could not get that
through. Uaughter.)
l welcome the prospect of guaranteed
banks. because / think it will enable
us to get some regulation that we
need. For instance, I think it might
help us TO pass a law TO make more
than directory the rule that bank
shall not loan more than one-tentiI of
its capital and surplus to one person
A man testified in the case of Chi
cago banker last summer that that
law was merely directory; that if an
examiner found that a bank was loan
ing more than 10 per cent to one man.
the department would send him a for
NAL letter calling his attention to 1T,
and then if he did not correct it By
the next examination. he might expect
to be forcibly reminded by another