The Meeker herald. [volume] (Meeker, Colo.) 1885-current, 1908-10-17
Former Secretary Gags and Con.
Rressn,an Fowler on the Dc.
post Guarantee.
TN WALSH FAILURE CITED
tBy John e. Lathrop.l

fBy John e. Lathrop.l
Lyman J. Gage, former secretary Of
the treasury. may be regarded IN suf-
nclently conservative" to Obviate
fears that he would be unsafe" in his
Banking views. Before the house com
niittee on banking and currency in
Washington Mr.. Gage discussed ma
tionai finances and particularly the ma
tionaI bank. He sought an Illustration
OF tie idea he was expressing. which
In general was In support Of the guar
antec plan. and like many others
found 1t in the Walsh fsilure in Chi
cago.
After explaining how the clearing
house hanks took over the assets Of
the failed institution. guaranteed all
deposltors. and prevented runs on 9TH
cr banks. Ne Gage sid:
Mr.. Cages Statement.
''Weil. they learned another lesson
and they adopted another principle. a
principle provided for in this 1.-THE
Fowler, bill. BY the vote and vol
nntnry compliance Of ali the members
Of the Clearing House association,
they authorized the clearing house at
any time and at stated periods to act
upon itx own volition and on its own
account. and for the information OF
the clearing house committee itself 10
have full, complete and comprehensive
investigation OF each member Of the
association, and not only Of each MEM
Der. hut OF every institution that car
rics the name Of bank over 1t that 10
cleared or represented In the clearing
house by my clearing house hank; and
can tell you a. 4 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. I am told that Kansas City
has the same thing, and other cities
will eventually adopt It"
Representative Fowlsr. Rep.blican.
Charles N. Fowler, Republican, Of
New Jersey. chairman u the house
committee on banking and currency,
appears IN the Congressional Record
with q 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-
posits. going into the directors room
and saying: Gentlemen, we have In
aured our deposits today. Now let ~
proceed to make some rotten loansr
''Is 1t not possible that 1t 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 the,
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 stock2
The Bankers Reputation.
"EntlI their regulations have been
injured. IL 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?
II assert again. after the most ma
ture elaboration, that 4 there Ia one
reason for Inauring life and home,
there are more than 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-
bic 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.
tions which accept the peoples money
In trust, and has indicated the exact
means whereby, under guarantee
law, bankers would do ~ now they do
--maintaln an association empowered
to look sharply into financial concerns
which seem to be departing from
sound methods.
His reference to the John X. Walsh
failure 10 Chicago was doubtless be.
cause II was known to tie country
generally. having been given wide pub
lIcity and therefore most likely to at
tract attention ~ an illustration.
However. there 10 scarcely 4 local.,
ty wherein bankers In late years have
not gone under toppling banks and up
held them by guaranteeing deposits
wholly or In part. In order to help In
the queiling Of popular distrust and