Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1908-10-01
Former Secretary Gage and Con.
gresham Fowler on tho Dc.
post Guarantee.
THx WALSH FAILURE CITED
Clearing House Action Like Plan Pro.
posed by Democrats.
Guards Against Honest Bankers Suf.
fering Runs Modern system Of
Credits-Bankb book Should
Be Worth Face Always
(By John r. Lathrop.l

Lyman j. cage, FORMER secretary OF
tAe treasury, may be regarded as suf-
Aciantly conservative" to obviatc
fsars that he would be 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
honal bank. Hc sought an illustration
Of the 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 Of
the failed institution, guaranteed all
depositors. and prevented runs on 9TH
er banks Mr.. Gage said:
Mr.. Cages Statement.
"Wcll. they learned another lesson
and they adopted another principle. Il
principle provided for in this the
Fowler 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 vollton 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 men,
Der. but of every institution that car
11cG the name of bank over ii that Is
cleared or represented in the clearing
house by any clearing house bank; and
can tell you as a safe prophecy that
VIC are ut the end Of disastrous fall
urc 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, Rrpubl cam 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 answerel
the assertion that such guarantee
would induce reckless banking. say
ing:
mfr. 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 do
posits. going into the directors room
and saying: Gentlemen. we have lr,
Surcd our deposits today. Now Lee US
proceed to make sonc rotten loans"
as ii 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 regulations? VIII the,
not realize that they can get noth 'rg
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 tie
amount of their stock?
The Bankers Reputation.
Until their regulations have been
Injured if not ruined. and possibly
some Of them have been started on the
road to state prison? Can anybody
think that any board of directors Of
any bank would be less solicitious
anxious and honest and wise after
they had guaranteed deposits than
they were before?
Il assert again. after the most ma
ture deliberation, that r there is one
reason for insuring life and home.
there are more than a 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 valua-
Bile contributions to the discussion of
the proposed guarantee of bank de-
posts Mr.. Gage has set forth the
present trend of bankers towards a
closer ,watchfulness over all institu-
tons which accept the peoples money
in trust, and has indicated the exact
means whereby, under guarantee
law. bankers would do as now they do
-mainl.iH an association empowered
to look Sharply into financial concerns
which seem TO be departing from
sound methods
His reference to the John Il. Walsh
failure In Chicago was doubtless he