Clarke courier. [volume] (Berryville, Va.) 1869-1997, 1908-09-02

might expect the Republican party
% accept a project 10 extend the
usefulness and increase the safety
Of "A banking system 10 which IL
has always pointed with pride"
But as the proposition has been
brought forward by the other side,
il Is seized upon as another Of Mr.
Bryan's wild and impracticable"
ideas. that must be tonight at any
cost as visionary. dangerous. and
sucialistic.
On the merits OF the proposal,
financial authorities differ. as they
10 upon nearly every other phase
of the banking question. How
ever. some very respectable stu
dents Of finance see nothing i'm
,t>>ible or dangerous in the guar
r'i'"o OF deposits. Il will be re-
,'ru.ier,d that Mr.. Fowler. chair
.-su 80 the House Committee on
'.sr. sag and Currency, incorporat-
81 hi~ bili for the reform of the
. ,i"nzi currency a scheme for the
gu5rsutee OF national bank deposits
'.iat was in 30 way iuBpracticable
ar visionary. Mr.. Fowler Is not
81 Gamer or a socialist. but one of
@ able>i aud p, >,-informed stu
a.n,s of finance IA public life. If
Mr.. Taft were looking about for a
Secretary of the Treasury really
competent to fiji that Office he could
find no better than Mr.. Fowler:
yet the New Jersey statesman saw
nothing perilous or impossible in
the guarantee of bank deposits.
His theory was that all banking
credits. whether note issues or de-
posts. should be placed on an equal
plane of safety theory that
sounds like common sense, as well
a. sound banking. His bill en-
bodied q we'll conceived plan of
currency reform. though somewhat
in advance OF Congressional as
well as Of public sentiment. and
was strongly supported, deposit
guarantee and all. in quarters
wholly free from any suspicion of
faint with so-called Organism,
visionary or otherwise.
Postmaster General Meyer offers
the same objections TO the Bryan
deposit guarantee scheme Is were
brought forward by opponents of
Mr.. Fowler smeasure. Mr.. Meyer
fears that the banks would be
obligated to pay unknown losses
and 20 take unknown risks under
a guarantee system. The losses to
national bank depositors. however,
are accurately known for a long
series of years. and the risk can be
closely computed. 1t amounts 70
but a minute fraction of the total
volume Of deposits fraction so
small. in truth, that its littleness
has been urged as an excellent rea-
son for not guaranteeing deposits
at all, it being argued that the
guarantee is unnecessary, in view
of the inconsiderable total loss to
depositors from national bank fail
ures. Mr.. Meyer further objects
that honest banks would have TO
pay the debts of dishonesty man
aged banks. That would undoubt-
ly occur: yet it may be plausibly
argued that the entire banking
community ought to bear the losses
due TO dishonest banking, rather
than the individual depositors. If
that were the rule, we may be sure
that the national banks, co-opera-
lively organized as they would be
under a guarantee deposit system,
would see 10 it that dishonest bank
ing was reduced to a minimum. 1t
IS by no means infrequent in the
banking world that honestly man
aged banks come to the rescue of
one that has been badly or dis
honestly managed, in order TO pre-
vent losses to depositOrs by the
failure of the bank The guarantee
of deposits would insure the safety
of all deposits as the rule, rather
than the exception, and by a sys-
tenn that would be eventually re-
duced TO scientific perfection. In
stead of placing a premium on dis
honesty, the guarantee of deposits,
by making it to the interest of the
banks to discountenanee risky and
Inscriptions banking operation,
would tend to promote honest
banking