The Ellensburg dawn. [volume] (Ellensburg, Wash.) 1898-1914, 1908-10-09
Former Secretary Gage and Con.
rrsssman Fowler on the De.
post Guarantee.
rHI WALSH FAILURE CITED
Clearing House Action Like Plan Pro-
posed by Democrats.
Guards Against Honest Bankers Suf.
fering Runs Modern System OF
Credits-Bank book Should
Be Worth Face Always
fBy John f. Lathrop.1

fBy John f. Lathrop.1
Lyman J. Gage. former secretary Of
the treasury, may be regarded as suf-
Aciently conservative" to obvlate
fears that he would he unsafe" in his
banking views. Before the house COM
mittee on banking and currency in
Washington Mr.. Gage discussed ma
tional finances and particularly the ma
Nenal 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 II in the Walsh failure in Chi
eago.
After explaining how the clearing
house banks took over the assets OF
the failed institution. guaranteed all
dspssitors, and prevented runs on 9th.
e. banks, Mr.. Gage said:
Mr.. Cages Statement.
swell. they learned another lesson
and they adopted another principle. a
principle provided for in this Che
Fswler) 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 to
have full, complete and comprehensive
investigation Of each member Of the
association. and not only Of each men,
Der, but Of every institution that car
ries the name Of bank over il that is
cleared or 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. 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
bill! which provided for guarantee Of
bank deposits. He specially answered
me assertion that such a guarantee
would induce reckless banking, say
ing:
MI. Chairman, We are occasionally
met with the statement that guarantee
Of deposits would lead to unsound
banking. $50 Can you think Of
banker, because be had insured his de
posits. going into the directors room
ana saying: Gentlemen, we have in
sured our deposits today. Now let Us
proceed to make some rotten loansT
'ls 1t not possible that it will occur
10 Nose directors that their losses
must come out Of their profits. out OF
tnear reserves, out Of their capital. and
out Of their regulations? Will the,
NOT realize that they can get nothing
OUT OF the guarantee until the last dol
M OF their capital, surplus and
prcdts has been wiped out. and stock
holders have been assessed double the
amount Of their stock?
Tho Bankers Reputation.
Until their reputa tons have been
injured, II not ruined, and possibly
ZONE Of them have been started on the
!oad to state prison: Can anybody
n'nk that any board Of directors Of
any bank would be less solicit'ous
anxious and honest and wise after
mey had guaranteed deposits than
they were before:
assert again, after the most ma
sore deiiberation, that Il there IL one
.eason Tor insuring life and home,
''sre are more than thousand good
.easons-more than ten thousand good
,.asons-why the depositors Of the
""""k'ng institutions Of the United
0'a'es should be insured"
Two Valuable Contributions.
1nese two men have offered vaIua-
e contributions to the discussion Of
-"e proposed guarantee Of bank de
pU''s' Mr.. Gage has set forth the
r'sent trend Of bankers towards
x"'eF watchfulness over all institu-
=. tO'.s which accept the peoples money
~ uu't' and has indicated the exact
,"us whereby. under guarantee
wv bankers would do as now they do
=. ''nt'ln All association empowered
- "ok sharply into financial concerns
s..N cn seem to be departing from
wound methods.
..n It's reference to the John r. Walsh
. n. In Chicago was doubtless be-
s u was kQoyn to tie country