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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (March 6, 1908)
PW? The Commoner. VOLUME 8, NUMBER 8 4 Hi M I W'V. I1' if) I "IK I'!!; TWO BANKERS ON THE GUARANTEED DEPOSIT PLAN A WISCONSIN HANK Kit ON GIJAIIANTMKD HANKS Tlio Chicago Uoeord-llorald prints tho fol lowing: ... lt , Manitowoc, Wis., February 18.-To the Ed itor: When moil In high places Kay a thing It Koch, politically, financially or otherwise. If theso BiuiiP men were of tho common herd, al though poHHCHHlng tho Hiuno ahllltlcH, their doc trliH'H would not lmvo much weight. Although opinions ought not to ho measured hy position, or wealth, or the rIko or a hank, yet the.so things carry a great pro.stlgo with them. I reallxo that, owing to this difference, what .1. H. Korgan, tho president of the largest bank In the northwest, with deposits of over one hundred million dollars, lays down as a truism, carries with it a certain conviction, and n small hanker Is at a disadvantage in contra dicting him. The only way to do so and smooth out tho harmful dents ho may havo made in a single stroke is to persistently and repeatedly hoop pegging away at 11, and thereby eradicato tho errors he may have made. Mr. Morgan has written an open letter to Bryan, complaining of misrepresentation and re iterating his argument against deposit insuranco that the depositor would not sharply look to select tho safest hank to put his money in. Now what does this sharp look amount to? Nothing, as I told him before. I looked sharp when I selected my reserve hank In Chicago, which was ono of tho largest, had the best reputation, its slock sold at three times its faco value, and yet it failed, and not owing to Intentional dishonesty either. Our financial congressman, Mr. Fowler, In his Albany address the other day, said: "Not ono person In ton thousand has any idea what ovor about the true inwardness of tho bank with which ho is doing business. It is abso lutely a matter of faith, and a blind faith at that." Tho bank 1 represent stands as high in the estimation of the community where it is located us his bank stands in his locality, and yet ho knows as well as I do that our depositors havo worried more or less for the safety of their de posits, in spito of having selected our bank as tho safest. Mr. h organ takes exception to tho accusa tion that he is arguing from a selfish motive, and says: "If it is selfish to defend one's self and one's bank, then I admit I am selfish." So ho admits that tho application is not misplaced. There is nothing wrong in it, for selfishness is ongrafted in all of, us. Forgan is selfishly act uated to guard against anything which might frustrate his chorlshed hope of attaining tho highest pinnacle In llnanco. T, too, am selfish, and my selilshness is also based on ambition, and alms at tho realization of my fond hopes to at tain a banking system which will prevent finan cial disturbances, relievo our depositors of worry, and give us tho best banking system on earth. I ho realization of such an Ideal system would givo mo more pleasure, and be worth more to mo, than the gift of Forgan's hundred million dollar bank, and by it 1 would acquiro tho good 11111110 which, as Forgan cites from Solomon, "is rather to bo chosen than great riches." As tho attainment of my deposit insurance plan is worth more to me than a hundred million dollars, I might be considered more selfish than Mr. For gan, who is only striving to conserve and add to what ho holds. Tho question now arises, which selfish mo tive should be most encouraged Mr. Forgan's, who admits that it is for the benefit of himself and his bank stockholders, or mine, which is for tho general welfare. Any insurance expert will admit that bank depositors' insurance is less haz ardous than any other, and tho reason why no companies were organized sooner is because of tho fear of a government insurance system which would at once drive them out of business. But nevertheless, insurance companies have entered this field, and more are ready to enter as soon as thoy know what congress will do. When these companies are once firmly established Mr. Forgan's bank, in spite of its high standing, will bo forced to insure its depositors. In the face of these conditions, why not do it at once, at the least expense and in the most effective, safe and practical manner? JOHN SCHUETTE, President Manitowoc Savings Bank. t?- t i& o GUARANTEED BANKS M. It. Collins, president of the Douglas, (Wyo.) National bank, recently received from a Chicago banker a copy of Mr. Forgan's reply to Mr. Bryan. Mr. Collins sent to his Chicago correspondent the following letter: Douglas, Wyo., February 21, 1908. Mr. C. N. GUlett, Cashier First National Bank, Chicago, Illinois. Dear Sir.: Your favor of the 16th in closing printed copy of Mr. Forgan's reply to Mr. Bryan received. Mr. Forgan's argument seems to me to bo unsound in many particulars. Great stress is put on tho value of the good will of a bank. The value of this good will is due almost wholly to the depositors. Your good bank is used as an illustration. Mr. Forgan has undoubtedly selected one of the very best banks in the United States, however, what assurance have we depositors in the First National bank of Chicago that the bank will not pass into tho hands of some of these "frenzied financiers" at any time. Mr. Forgan is now gen erally supposed to control. the bank. A few years ago it was Mr. Gage. How do we know but that a few months hence it will be a John R. Walsh? I believe your bank not only guaran teed but helped to pay the depositors of tho failed Chicago National bank. Suppose that fail uro had been a few years later say on October 30, 1907 would not the depositors in that bank havo had a perfect right to question Mr. Forgan's line of argument? The shares of the Chicago National also sold at a large premium above book value up to tho very day it failed; its stock very likely, was also held by "estates of deceased persons, trusts for widows and orphans," etc and its president was considered, by its deposit ors at least, as able a financier as Mr. Forgan is now considered by the depositors in the First The fact of the matter is that the depositors do not know, and have no way of knowing if a bank is safe or not. It may be safe today tho stock may be transferred tomorrow to per sons who will proceed to make it unsafe but the depositors do not know when the change takes place. I believe there is no question but that if every share oi stock in the First National of Chicago changed hands tomorrow; if every officer was replaced with a new man, tho bank would still retain a large part of its present business. If this is not true the "good will" rests in the officers ' and stockholders and not in tho bank. In any event somebody or something is holding the business and other banks equally safe are unable to get the business away from them. The argument in reference to a "premium on dishonesty" is also faulty, in my opinion. It has been demonstrated quite frequently of late that the dishonest have little trouble in pur chasing and controlling banks in good standing. It seems to me that the present requirement that persons wishing to start a national bank must first be indorsed by a public official "and unless the applicants are reasonably well rated in mer cantile agency reports further evidence of their good financial standing should be furnished" can be extended so that it will apply to all directors in national banks. No person should be a direc tor in a national bank until the comptroller is satisfied that he is of good reputation and in good standing. I do not wish to be understood as arguing that all rascals can be kept out of the banking business by rulings and laws. If they could be there would be little call for government guarantee of bank deposits. The deposits should either be guaranteed or no bank should be permitted to use the word "national" as a part of its name. Mr. Forgan says: "Tho government, being responsible for the deposits, puts all on an equality and makes all equally good." The question as to the safety will not bother many depositors if they are "equally good." I know of no good banks that are not safe. I believe a great many country bankers be lieve as I do in this matter. If a pamphlet giv ing a few of the arguments for and against gov ernment guarantee of deposits be mailed to every national bank in the United States with a request that they vote on the matter it will bo found that more of them favor it than are against it. As a citizen I favor it because the man who saves for the rainy day should have some place to put his money where he will have it when the rainy day comes. As a banker I favor it because I believe it will help the banking busi ness by bringing out the large amount of money that is now in stockings. Not only this, it will have a tendency to cause many more people to save their money and become valuable bank cus tomers. At present there are a great many people who will not put their money In any bank. After one has lost one's little all because some bank president has "guessed wrong" on "Steal Com mon" or wheat the "good will" of some other bank is not good enough to look good to him. I have sized this up that there are twenty things in favor of this to one against. Yours truly, M. R. COLLINS, ILLINOIS DEMOCRATS IN SESSION AT SPRINGFIELD oi-vcuiY-milU UUUlOCraUC CUIUS worn vrmvn seated by about ono thousand delegates at tho democratic rally hold at Sprlnglleld, 111., Feb ruary 21. Officers woro choson as follows President Adlal E. Stevenson, Blooming- Vlco-Presldont J. II. Graham, Springfield. Sccrotary J. T. O'Donnoll, Bloomington. Treasuror J. B. Mount, Jollet. Tho following oxecutlvo committee was namod at tho close of tho mooting: Hon. A. E. Stevouson, ox-olllcio chairman. McLean county. ' Carter II. Harrison, Cook county. Edward F. Dunne, Cook county. W. L. O'Conuoll, Cook county. l,iJlur,(l Dunla. Morgan county. Alfred Orondorff, Sangamon county Magoon Barnes, Marshall county Dr Walter Watson, Jefferson county. J. W. Yantls, Shelby county. Tho followlmr rnnnrf l fu. .. Illinois State Register, 'published t Spr ngfie W? ion thousand people gathered nt the Zil nal in this e.it.v insf nio-hf i, ttt.mi. , mi 88 Bryan discuss the political issues of the hour Pen thousand people clieered the Ne brnsknn to the echo. This ovation to the demo cratic, leader by such a vast audience moiUhs bolore the conventions for presidential nomi nations have been hold, is a most significant event It was an event which proved a f H i and brilliant climax to an eventful ?inv . g Springfield for Illinois aid folue aJ Yesterday in this city was shown ronclusiveW that Illinois wants Bryan for president and i? Illinois wants Bryan for pres dent t o also wants him for its chief? natl0n That such a vast audience gathered w night despite the inclement weather 1 " surprise to the most sanguine who hiS meeting in charge Earlv in . had tho the Watch Factory band was JlvKT While limlnary concert, the great a 2i h""6 PI? illl with hundreds of peonle T w be?a? to entire lower floor, and then the Sifln Vde,d UlG to fill. Soon every inch of avalKh i S began occupied and there VXrTonTVt The greatest and best audiences ever assembled in tho city or central Illinois. It was a vast, spon taneous outpouring of the people in tribute to the greatness of Bryan, and proving the won drous growth in his popularity. Cfr.-f.?d tj1 was only one of the many demon w f L?ry.an s DPularity yesterday. Else h? fm,n3 fi S iHSe of the State Agister will 2 d..,tlle details of thQ arrival of Bryan in tt?nyestf!lay morning at 10 o'clock from nul h7 HC i thQ recePtion at the St. Nich einHo oh i ihe meetinS of the Illinois demo ?inn nf h t0 oial. assocIatIon and of the forma Ti 5 2n?f AGf ate Fedetion of Bryan clubs of J1S a f.e sevoral events there was that PomioCltamlty of endorsement of Bryan, vpqtprf edlt0 and statesmen gathered here th TlJr0m,a11 parts of thQ state incident to clubf nn i ? f Gd tors and thG formation of n?f 'i f fr?,m a11 parts of "Hnois came the vmSr"?!1, that Bryan Is saining strength thf fannrf ' yhAle tUe peopla are recognizing their rights republican party to defend , -feM-Jt)1 .vtjdj