Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1908-10-09
Former Secretary Gage and Con-
Crcssman Fowler on the Do.
posit Guarantee.
TIE WALSH FAILURE CITED
Clearing House Action Like Plan Pro
posed by Democrats
Guards Against Eonest BANKERS Suf-
fcring Runs Modern system Of
CreGits-Bank book Should
BE Worth Face Always
IBy John +. I.athrnp.l


the treasury. may he regarded as suf-
fciently conservative" to obviatp
fears that he would hc unsafe" in his
banking views. Before the house com
mittee OF banking and currency in
Washington Mr.. Gage discussed ma
tional finances and particularly the na-
tional bank. He sought an illustration
Of the idea he was expressing which
In general was in support of the guar
antce plan. AMI like many others
found II In the Walsh fai.urc In Chi
caGo
After explaining how the c'carin:
house banks took over the assets OF
the failed institution. guaranteed all
dcpos!tors. and prevented runs on 9th.
or banks. Mr.. Gage said:
.ir. Cages Statement.
We'll. they learned another lesson
and they adopted another principle. a
principle provided for In this Uhr
Fowlcrl 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 voliticn 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 mem
Der, but OF every institution that car
ries the name OF bank over if that Is
cleared or represented In the clearing
house by any clearing house bank; and
l can tell you as safe prophecy that
we are at the end Of disastrous fall
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 a house speech in support OF his
bill which provided for guarantee Of
bank deposits. He specially answcrc
the assertion that such 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.
posits. going into the directors room
and saying: Gentlemen. we have In.
Sured our deposits today Now let Us
proceed to make some rotten loans?
us 1t not possible that II 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? 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. II 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 solicitous
anxious and honest aud wise after
they had guaranteed deposits than
they were before?
II assert again. after the most ma
ture delihcration. 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 depostors Of the
banking institutions OF the United
States should be insured"
Two Valuable Contributions.
These two men have offered valua
bic contributions to the discusson OF
the proposed guarantee Of bank de
posts. Mr. Gage has set forth the
present trend of bankers towards a
closer watchfulncss over all institu-
tions which accept the peoples money
In trust. ana has indicated the exact
means whereby. under Il guarantee
law. bankers would do as now they do
-main'6n an association empowered
to look sharply INTO financial concern
which seem to be departing from
sound methods.
His reference to the John X. Walls
failure in Chicago was doubtless be
cause it was known to tie country
generally. having been given wide pub
LEFTY and therefore most likely to at
tract attention as an illustration.
However. there is scarcely a local.
ty wherein bankers in late years have
not gone under topping banks and up
held them by guaranteeing deposits
wholly or in part. in order TO help Il,
the quelling Of popular distrust and
the undermining OF confidence in al
banking Institutions.
No Delay for DepOsitors.
1t is quite apparent that undel
guarantee Of deposits there would b,
no alteration Of conditions affectins
banks now. 50 far as concerns cspion-
age maintained by one over another.
Tie Important difference. however,
would lc that dcrU>itors would not Q
subject to the annoying, often disas-