Ligonier Banner., Volume 43, Number 30, Ligonier, Noble County, 15 October 1908 — Page 5

$2.00 PER YEAR.]

:; » : Questions Before the People. Honesty and Fair Play Form the Subject Matter of an Xlnteresting Address Beforé the South Bend Branch of the Indiana State Alliance of Ger man Societies by Mr. Philip Rappaport, a Prominent Attorney of Indianapolis. - A few days ago the Germans of South Bend held a meeting at Turner Hall for the purpose of organizing a oity branch of the State Alliance of German Societies. The meeting was of political importance, for the State Alliance had, at its recent convention, - passed a strong resolution on the temperance issue and in favor of the Democrats of Indtana as the more liberal party. One of the speakers was Mr. Philip Rappaport, a prominent attorney of Indianapolis. He spoke as follows:

: ; Republican Dishonesty. It is one of the usual practices im times of a political campaign to deceive the public and slander the adwversary, but it is exceedingly doubtful whether in the political history of our country this practice has ever been carried as far as the Republicans of Indiana carry it this year. If one reads their papers and their campaign literature it would seem that there is ~ only one gquestion before the public, and that is whether in Indiana the Anti-Saloon League or the. brewers shall rule. It would seem that there is no such thing as a panic with its complement of millions of unemployed and stagnation of tusiness, eaused by an iniquitous tariff and grafting stock manipulation. It would seem that the trusts and the big corporations are nothing but charming and philanthropic benefactors of the people, impoverishing thenfselves for the sake of the _nation. It would seem that there is no such a thing as the Democratic par- . ty, nor any such thing as f:ﬁ'e people, . but only the brewers, and that the Republicans’'and their faithful ally, -the . Anti-Saloon League, are the only righti eous upon earth, sent by a kind provi- . dence to save the state and the nation '} from the powers of darkness and sure ~ perdition by the only means that can possibly save them, namely, County Prohibition. _ . , ] It is a mean and miserable deception by which they hobe to mislead the ignorant and unihinking. But the inteHtigent people of the state should not allow themselves to be influenced by such a dishonest policy. .

The Democratic Party the Party of the People. In the first place the great economic and political questions of national import which mark the distinguishing] line between the Democratic party and the Republican party have not disappeared, but are, on the contrary, still present and are of the same weight, as they ever were. The Republican party is still the party of Wall street, ‘ still the party of the multi-millionaire, | of the Standard Oil company, and other trusts, of the rebate-giving, far-mer-despoiling and middle-class-ruin- | ing railroad corporations and the grasping, exploiting plutocrats. And _the Democratié party is §till the party of the common people; the workingman, the toiling farmer, the large middle class of business and trades men, who now suffer acutely by a panic that has been brought about by the interests protected by the Republican " tariff, a Republican administration and the Republican party in general. In the second place, leaving national guestions alone, the Democratic party s not controlled by the brewers or the lHquor interests. It is ridiculous to suppose that a political party consisting of hundreds of thousands of voters can be controlled by a few brewers or saloon keepers. If, for business interests, they prefer Beiocratic rule to Republican rule, they do no more than any other class of business men would ydo under similar circumstances and with certain legislation, affecting them, in view. But if the people at large ‘were not interested, the brewers and the saleon keepers could not influence the sélection of even a constable. The Fight for Personal Liberty. The fight in our state, so far as the femperance question is concerned, is not the fight of the liquor interests, ~ but it is the fight of-that part of the - people “which believe in personal lib- ~ erty and practical morality against the _party controlled by an element which ‘believes in coercion and sham mor- ~ ‘who drinks a glass of beer in an open - Baloon a sinner, but crowns him who Bets beastly drunk 'ﬁmgaﬁm <’«§«fa§g e o g R LG o s e SRR e

The Ligonier BDanner.

Why Certain Laws Can’t Be Enforced. It is not to be dénied that there exists in our country a great deal of lawlessness and disrespect of law. But whose fault is it? The brewer’s or the saloon keeper’'s? Would it be fn their power to cause any violation of law, if there were no people approving its violation? If there is a general violation‘of law, it is the fault of the lawmakers who make laws to which a large part of the people do not readily yield, because they do not consider wrong whag the law fox;bids. Mr. William Travers Jerome, the wellknown district attorney of New York, in a little book of his, entitled “The Liquor Tax Law in New York,” says: “Under democratic forms of government, based upon universal suffrage, a law is not permanently enforceable by authorities locally elected or appointed, when the _ acts prohibited are of such a character that a considerable number -of inhabitants of such locality do . mot consider the prohibited acts immoral in themselves, and do not yleld willing obedience : to the law.” : In South and Central America laws of this character would probably cause riot and revolution. But the Americans, being a peaceable. order-loving people, simply hold the law in contempt and violate it -openly or glandestinely. But the danger is that contempt of one law may lead to contempt of .other laws, and contempt of law must, in the end, be of a demoralizing effect.” The average American citizen is inclined to be law-abiding. Whenever signs to the contrary appear it is ‘the fault of the law-maker, who makes laws of which he knows, or should know at least, that one-half of the population consider them tyrannous and- will violate them without conscientious scruples. And the worst of it is that the lawgivers themselves have no scruples in violating them or causing them to be violated; that they are well aware of the evil effect of such laws, but are cowards in politics and sacrifice their conscience and their honesty to' political interests of their own or their party. L& me again quote. Mr. Jerome: “When a large. portion of the community look upon an act for- . bidden as not immecral or of very minor immorality, and the pun- . Ishments imposed by the law are very severe, blackmail and perjury: b&ome appalling in amount and character upon any attempt to enforce the law. In addition, if the law affects. a eonsiderable number in the community, either in their pecuniary interests or becausecontrary to their habits of life and thought, the local political life of the community is degraded and complicated, the public service isdebauched and even the courts and Jury system, both grand and petit, are seriously affected.”

- It is well known that disrespect of one law causes disrespect of other and. eventually all laws, and if this inevitable effect appears, then those who made the laws which were sure to be violated have the temerity to lay the blame on others. . The real parties that are- to be blamed for disorders, disrespect: and contempt of law are the Prohibitionists, the Anti-Salooh League, and the Repubiican party. controfled by them. Conceding even to them good intentions as far as temperance is concerned, still they may say, like Mephistopheles in~-Goethe’s Faust, “I am a part of that mighty power which wills the good, but ever creates evil.”

The Brewers and Liquor Dealers in Politics. Equally hypogritical are their acclamations against the ‘brewer and the liquor interests in politics. Whose fault is it that they dre in politics? Can it be expected that these men will stand idly by .and see their business interests constantly attacked aad endangered? The average hardware dealer does not busy himself with pol‘ftics. You can easily make him do so by attacking and endangering his business interests. The average drygbods merchant does not dabble in polities; attack his business interests and he will make politics a part of his business. What reason is there to demand of the wet goods merchants to act differently under such circumstances? Is there any justice, any honesty in it? There is a way to rid politics of the liquor interests, and that way is very plain- and simple, but it requires the application of good sense and honesty. Make a law that is fair and reasonable, duly considering the wishes of all the people without ignoring those of a part of them, harmentzing different views in consonance with ._human. nature and social conditions, a law that the people are ready and willing fo obey, and will, therefore, be enforceable; then let it stand unchanged and suppress all attempts at violation with an iron hand. “But if you want to keep the liquor element in politics, if you want to make every brewer and every liquor dealer an out-and-out pelitician, make unreasonable and unenforceable laws, never let up in dickering with them under the influence of that branch of the Republican party called the AntiSaloon League, and make it an end-: less chain of changes and amendments, always intending to do. good and al_The Republican Wg‘ lﬁ%:fv, ‘the Anti-Saloon m&"ﬂm _, g Tquor W%m“ﬂ are SR e B A T D R R ;’ OIS, I 8 SHOLINE _Seh »s&fm&ﬂ:

LIGONIER, NOBLE COUNTY, INDIANA, THURSDAY, OCTOBER 15, 1908.

preacher. I cannot help thinking that neither the people, nor good governe ment, would lose anything by thelr staying out of politics. If you will obgerve closely you will notice that the preachers and the churches meddling in politics and constantly appealing to legislation and the strong arm of secular government for the enforcement of their particular views are such who belong, or whose members mostly belong, to the Republican party. Church and state have separate and distinct functions and the enlightened spirit of our time is opposed to the invasion of one by the wther. Mr. Thomas R. Marshall, the Democratiae nominee for governor of Indiana, said in his keynote speech: N

"~ “While Thomas Jefferson was the author of the bill for religious freedom in Virginia and thus brought about the dis-association of church- and state in America, I presume that there are not yet - many Americans who are desirous of reuniting church and state. It may be that our distaste of this idea arises, to @a certain extent, from the fact that we are not quite sure that our ‘own -particular branch could be made the state religion.” ? If the state uses its power at the behest of a church or its ministers, it makes itself their servant. Centuries ago this was considered proper, with what result is_shown by history. But the spirit of the twentieth century\‘m decidedly agaihst it. :

The Failure of Prohibitive Legislation. I frankly state it as my opinion that it would have beeen a decided gain for the cause of morals and temperance if the church had always -confined itself to- the proper sphere of moral suasion, and if tige state had kept itself free from its influences. The church is most generaßy guided by dogma, but the state is guided by experience. The church is doctrinal, the state prac.tical. A people cannot be ruled by naked doctrines with utter disregard of natural and :social influences . ,of human needs and desires. Yet that is precisely the method:of, the church, ,and it follows it regardless of effects ‘and consequences. As in the eyes of the church and its representatives the doctrine cannot be false, they must necessarily see the failure of the effect in its insufficient or false appll—l cation. As a consequence there is.a never ending rush of legislation, of changing and amending old and mak; ing new laws, always with a view of applying the same doctrine, with al- - ways the same result, to-wit: stupendous failure. For sixty years they have had prohibition in Mainé. = With the Sturgiss law, which puts enforcement in the hands of state officers, - where the local authorities are unable or unwilling to enforce them, liquor can be had everywhere and the num- | ber of arrests for drunkenness accord- | ing to reliable statistics, is over 25 per thousand inhabitants annually, while it is only 19 in Illineis and 17 in Indiana. Need we wonder then that the late Bishop Henry €. Potter, bishop of a church that dees not favor any particular political party, cried out in despair in ‘his book, “On the Drink Problem”: : :

“You will gather from all this how superficial, . how utterly inhuman, inconsiderate and unreasonable I regard a great deal of that doubtless often well-inten- - tioned zeal which seeks to make men and women virtuous and temperate by a law of indiscriniinate repregsion. Tdo! I do! Andifl am sent here of God for nothing else, I am sent here to tell you that; and to entreat you to discern that most of our methods for dealing with the drink evil in our day and generation are tainted - with falsehood, dishonored by essential unreality, and discredited - by widespread and consistent failure. There is a drink evil; and you and I must not . ignore it. There is a task for Christian men and women, just here, to perform, . and you and I must not shirk it. But let us begin by trying to rec- . ognize the facts, and then .let us strive to deal with them in a way ‘worthy of “their portentious sig-| nificance.” : : False Doctriffes. . Y It is a false doctrine to make people virtuous by the force of law. It 'lfas‘ never been possible, it is not possible. now. To some people the law is a. fetish which they worship with- blind zeal.. They think that if anything is wrong anywhere, all that is necessary is to have a law passed. If it does not work, have another law, and so on indefinitely. They forget -that they have not to deal with things, but with ‘human beings that cannot be treated as automata, but have a soul, a mind and a will of their own and each of ‘them his individual conscience, If that" ‘conscience is not in harmony with the law, there is no power on earth strong ‘enough to enforce the law. The state of Kansas had prohibition for twentyfive years until the first attempt was made toward its enforcement, and then it could only be enforced in spots, while in other places the attempt was. a miserable failure. e T R God knows, intemperance is a great evil and there are abuses in the liquor trade, but it is a false doctrine to fon bid use altogether, merely because there is abuse. It is a false doctrin w"%kefr;m mmuwﬂ ~ trol and subject him in the ex. Srci of his perional ights and habig of living fo the control of government. If it is aftempted’to treat him s x{* »‘~ " »{ﬁ“’ %}w ’ . ""‘éﬂ‘}‘“mgﬁ'&; ;;L V:i ’~;

g of “dry” territory, while the sale of liguor zoes merrily on, not omy without any zi’&pareut diminution, but with a positiv®é increase of drunken ness. It may be that the saloon is 2 temptation, but prohibition in remov ing that one temptation, which: is un. der the public eye, substitutes a great many temptations infinitely worse, because hidden and econcealed. It substitutes the-blind tiger, the kitchen bar, the secret club, the boot-legger, for the open salobn, whisky in place of beer, the bottle for the glass, and lays before the young all the temptations of secrecy and mystery. '

Temperance a Question of Civilization. ~ True temperance is not a question of legislation, but one of progressing civilization. The human race s improving from day to day in habits, manners and customs. The time was and not long ago, when a man was admired for drinking the other fellow “under the table”; today the drunkard is ostracised from good society. Modern business methods and public sentiment demand sobriety, and coercive or prohibitive laws only hinder these agencies in having their full beneficial effect. e :

Liguor and Crime. ' _lt is a false doctrine that most crime is caused by liquor. TUfdoeubtedly many transgressions and “misdemeanors are committed in a state of drunkenness. Unquestionably it has happened that murderers have fortified themselves for the commission of their awful deed with strong drink, but such cases, excepted, all the, gpeat gcrimes require clear heads for their execution. The defrauding bank cashier; the note-forging bank president; the embezzling clerk; the thief; the robber; the skilled counterfeiter, who makes false notes or coins of the realm; the burglar, who stealthily creéps into habitations at night, careful not to awaken anybody; the gambler who plays with false cards or loaded dice; the briber and bribe-tak-ing official — these and others need strong nerves and steady hands and nothing-would render them less fit for their criminal career than indulgence in liquor. . I tell you Wall street causes more misery, crime and suicide in one day than all the liquor drunk in a whole year, yet nobody speaks of closing it. The state prisons of Maine ‘and Kansas are as well filled as those of any state, nay, even better than those of many a license state. During the year ending Nov. 30, 1907, the state prison of Maine received 71 convicts or 10 for each hundred thousand population; that in Kansas averaged 207 in 1905 and 1906, not ineluding prisoners from Oklahoma, or 17.2 per hundred thousand; in Ohio the number in 1906 was 652, or 14.6 per hundred thousand, and in Illinois in 1905 and 1906 the annual average was 841, or 15.5 per hundred thousand population. : How -that is possible if drink is the mother of all crime and if prohibition really prohibits, is certainly more than any human mortal can tell. : The Kansas City {Mo.) Journal of Dec. 8, 1907, contained the following: “The Kansas City (Kan.) council at a meeting last night passed a resolution instructing Chief of Police Bowden to i_r_xcrgase the present police force twelve men. The action was taken on

account- of the present epidemic of crime in the city. B “The department was reduced several months:ago on account of threats made by Assistant Attorney General Trickett to the effect that if the mayor andl council did not curtail the running expenses of the city enough to keep within revenue income he would bring ouster proceedings against them. At thetime Mr. Trickett argued that since he had closed the saloons of the city there waggno longer need for a big police department. His theory was that most of the crime was due to the existence of the saloons. However, the many robberies and murders c(_)mmit-. ted during \the past two or three months exceed in number and viciousness any reign of crime experienced in the city during the days of the dramshops.” | Prohibition the Cause of Increased i Taxation. e This alone is sufficient to prove the fallacy of the prohibition doctrine, and it also disproves the oft-repeated statement that the saloon increases municipal expenditures. As a matter of fact it is prohibition that does it. It costs more to watch the blind tiger than the saloon, it takes more police.to pre*'vent the illegal than to control the legal sale. Prohibition, besides, deprives communities of the revenues derived from liquor licenses, and so it comes ‘that municipal taxation is always much higher in “dry” territory. Of 1,139 towns, the average tax rate on $lOO in 1906 was $2.54 in 343 prohibition towns and only $l5B in 846 license towns, and the average per capita indebtedness of. the prohibition towns exceeded by 161% per cent that of the license towns, besides which public improvements in the former suffer in consequence o‘f empty .treasurThe Moral Effects of Prohibition, ' This, however, is quite insignificant compared with the evil moral consequences of the;stpplieiﬂgp. of the false doctrine of creating vﬂmby law, that is of the temperance movement as. a political movement.. As such it is used by crafty and Wilguwﬁﬂmmt for moral purposes, but only “to further their selfish political ends. For %#mﬂgsw s ?“u%wmg and the weltare of the people, if it tled the professional prohibition agt 3 ’““ ' Antihaloon Ledgie prasshe oF woull be outaf's Job. Bo thboi: SR e R s e B G I Tl atrtinhes DNIE T S

and enforceabls law that would put @ quietus on the movement is not te their taste and not in their interest. The pdsition on this question must remain a political asset of the agitator and the gmall politician. They want to keep their jobs. Thus they make a nefarious use of the credulity and the pious zeal of thosé earnest and well-meaning people Jhorreally beleve that they can cure evils by prohibitive legislation. ‘What then is the result? i

There exists In . the city of New York an organization under the name of “The Committee of Fifty.” - Its obJect is the promotion of social science prineipally by practical investigations. It consists of such men of prominence as Seth Low, Dr. Felix Adler, Carroll D. Wright, Prof. R. T. Ely and others, It is divided into sub-committees, each working in a special field. The committee devoted much time and labor to a thorough investigation of the liquor problem in all its aspects, and published the results in several volumes, In one of them, bearing on’ its title page the following inscription: “The Liquor Problem in Its Legislative Aspects, by Frederic H. Wines and John Koreg; an investigation made under the direction of Charles W. Eliot, Seth Low and James C. Carter, sub-commit-tee of the Committee of Fifty to investigate _the lquor problem,” you will find on Page 5 the following reference to prohibitive legislation: ; “The efforts to enforce it during forty years past have had some unlooked for effects on public respect for courts, judicial procedure, oaths; and law in general, apd for officers of the law, legislators and public servants. The public has .seen law defied, a whole generation of habitual lawbreakers schooled in evasion and shamelessness, courts ineffective through fluctuations of palicy, delays, perjuries, negligence, and other miscarriages of justice, officers of. the law double-faced and’mercenary, leg{slators timid and insincere, candidates for office hypocritical and truckling, and officeholders unfaithful to pledges and to reasonable public expectations.” This is indeed a severe arraignment, but its justice is- demonstrated by an array of facts, and coming from suéh an honorable and uninterestéd source, it cannot be refused full credit and respect. e Local Option vs. County Prohibition.

What else could be expected? It is possible, though not always the case, in a small community, in a small town or. a city ward, where a particular class of people live together and where everyone knows everybody else, that there is such a unanimity of senti® ment that a prohibition law is enforceable without causing public and private demoralization and - corruption. ‘Such a unanimity, however,. cannot, and never does, exist in a larger territory, a coyunty or a state. This will always contain divisions where the sentiment is strong against prohibitive laws, and where, consequently, the people feel themselves tyrannized over by the people of other divisions. Then follow violation and disrespect of law with all their dire and corrupting influences. . Of course, county prohibition will not settle the drink question. If it would,

the prohibition agitators and the political adventurers would not want it. After a wfhile ftt—is discovered that drinking is going on as usual and a law is demanded to forbid ,shipping liguor into a “dry” county. When- it is discovered that that would not work, state-wide prohibition is demanded, and because that does not work either, congress is importuned for a laf to prevent shipping into what is humorously called a “dry” state. And so it goes-on. As no layw has the expected miraculous ' effect, no law ever proves satisfactory. It is an endless sourcé of {ribulation, irQitation, chicanery, molestation and corruption, all coming from the false doctrine that people can be made virtuous by law. We are on the eve of an election. The temperance issue is one of the most prominent issues in our state. The Democratic party has declared for what is generally known as local option, the Republicgn party for county prohibition. To be candid, I think not much of local option. But having, as it is, to choose between it and county prohibition, I, naturally, choose the former. 5 o The evils of prohibition must necessarily stand in a certain proportion to the size of the territory which it covers. With the ward or the township as a unit, the evil is reduced to-a minimum. I also have hopes that under a local option law prohibition by remonstrance, will come inte disuse and the citizens be enabled to make their sentiment effective untrammeled by pressure and intimidation. Under county option, however, the miserable and thoroughly undemocratic system of dividing communities into two hostile camps and compelling the citizens by pegponal solicitation and sometimes by threatening social or financial injury, to publicly enter the one or ‘the other, would continue, to the detriment of the peace, the harmony and the moral standard of communities. Ynder a system of local option which permits a man to ?tst his vote according to the dictates' of his conscience, at least no falsification of signatures, no forgeries, no repetitions, no other dishonest practices, no gereral demoraliation are possible. < % ounty prohibition is thoroughly undemocratic. Through it country dwelR Tore. 00 ' g‘; ﬁ‘lv j . ‘;? "f;» Xi&; Jé»aE ‘*}. ulation, It will wipe out city life and

personal liberty is violated by a yote to suppress the saloon altogether, but it is far worse to curtail the cizz right of suffrage by a system which t#rough tricks and intimidation ‘prevents_t‘ citizens from a free expression of sen timent. it ; For this abrogation of the -civil rights and the personal liberty of the citizen the Republican party stands. It stands in opposition to everygrinciplg of personal liberty, in opposition to truly democratic forms of government. Ido not plead the cause of the brewer or the liquor dealer, nor that of the saloon. .They must look out for themselves.- As far/as I am cornicerned, I have no heed-for the saloon. If all other people would visit the saloon not oftener than I do, one saloon would be sufficient: for the whole state of Indiana, and the rest of the saloon keepers would all starve. Nor am I afraid that I shall never be able to get my glass of beer in any of the clubs to which I belong. But I am not hypocrite enough, not dishonest enough, to advocate the closing of the saloon, the poor man’s club, as long as I am not willing to be a total abstainer.

The Effect of Prohibition on the Army. The Ameri¢an saloon has certainly some bad features. But it .is what Americans have made it. ‘lt has not made’the Americans. Asjithese have in course of time approved their drink habits, so they will, in course of time, approve the saloon® But be its features ever so bad, they can never be one-tenth agbad as those of the “blind tiger” and similar kinds of demoralizing resorts. ; So long as people desire to drink, the combined armies of the world cannot prevent them nor can they prevent the army from it. There is no army in any civilized country teday in which the general state of health is poorer, in which alcoholism and unspeakabie diseases prevail to a greater extent, in which desertions are more numerous than "in the _prohibition-blessed American army. If anyone-does not believe this, let him study the reports of the surgeons general, the advocates general and the inspectors ge’ﬁeral. And still the great reformers insist on prohibition. It is the dogma. they ocare for, the effects are. nothing to them. Save the dogma and let the world perjsh., That is their motto.

~ What the Republicans Stand For. I' accuse the Republican party of Indiana of falsely and maliciously misrepresenting the fight for personal liberty as merely a fight for the financial .and political interests of what is genierally called the liquor element. I accuse it of falsely. and maliciously misrepresenting the Democratic party of our state as being controlled by these elements. I accuse it of upholding a system of legislation that leads, according to the best minds of our country, to the destruction of public respeet for courts, judicial procedures, oaths and law in general, and for officers of the law, legislators and public servants, a system which has schooled a whole generation of habitual lawbreakers in evasion and shamelessness, made courts ineffective, officers of the law double-faced and mercenary, legislators timid and .insincere, candidates _for office hypocritical and truckling, and officeholders unfaithful to- pledges and reasonable public expectations. e And as I cannot believe the Republicans to be ignorant of these effects of the system, and as, according to a ‘wellestablished principle of law, everybody must be believed to intend the effects of his. willful act, I accuse them of willing such shameful and scandalous conditions and abuses. - !

It is well known that Rockefeller, Heilnze and other great capitalists have donated large sums of money to .the Anti-Saloon League. Do yaqu- believe they do that for moral reasons? They do it because the league is an auxiliary to the Republican party, the party of the trusts and millionaires, and I accuse the Republicans of converting a moral question into a political one and using it in support of trdsts, combinations and - gamblers with the wealth produced by the peo-\ ple. = : : !

~ I accuse the Regublicans of trying to destroy popular government. Although the leaders of the party were opposed to the calling of an extra session of the legislature, yet, after it was called they consented to its use for the purpose of determining a question which is an issue in the present campaign. It is something which, the Czar of Russia excepted, no European monarch would dare. On the contrary, | the European monarchs frequently appeal to the people by dissolving parliaments and ordering new elections to ascertain the will of the people and to act according to the people’s will as expressed by the result of the election. But the Republicans of Indiana Aare now trying to prevent an expres- | slon of the will of the people to take the settling of the temperance ques- . tion out of the hands of the people |and settle it "as dictated by their -branch organization, the Anti-Salonﬁ fYeague. g L ‘lt is & proceeding subyersive of poﬁJ ular government and destfuctive of the right of the people to settle its own |affairs. Such action betrays an ama-. zingly low standard of political hono;,v | politic@l honesty and political justice. | Therefore, in the name of the prin- | olple of personal liberty, which we :L highly cherish, in the name of civil Ifberty, in the name of justice and fair phrmthmu‘g{;odm nxnﬁ&mtihu 1 ;A,,,.i1: ; ;rﬁ% or+oency, and in the name of true. ? _perance, %}wmw at the ’g‘“ % 8l the canglaates

’ ; ‘- n» X ; Former Secretary Gage and Cons - gressman Fcwler on the Deposit Guarantee, THE WALSH FA}LURE' CITED s ——— ——— Aty Cleariag House Action Like Plan Pro- ~ pesed by Demoerats, Guards Against Honest Bankers Suffering Runs- Modern Systemn of - Credits—Bankbook Should Be Worth Face Always ~ [By John E. Lathrop.] - Lyman J. Gage, former secretary of the treasury, may be regarded as sufficiently ‘“conservative” -to obviate fears that he would be “unsafe” in his banking views. Before the -house committee on - banking and’ currency in Washington Mr. Gage discussed national finances and particularly the national bank. He sought an illustration of the idea he was expressing, ‘which in general was in suppert of the guarantee plan, and like many others found it in the Walsh failure in Chieago. * : oay e e Af¥r explaining how the clearing house banks took over the- assets of the failed institution, guaranteed all depositors, and prevented runs on other banks, Mr. Gage said: . : Mr. Gage’s Statement. : “Well,, they learned another lesson and’ they adopted another principle, a principle provided for in tnis (the Fowler) bill. By the vote and vol, untarfy 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 volition and on-its ownacocunt, 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 member, but of every institution 'tl;a\t carries the name of bank over it that is cleared or represented in the clearing house by any clearing house bank; and I can tell you as a safe prophecy that we are at the end of disastrous fallure in the city of Chicdgo by clearing house banks, since this regime has come in. I am told that Kansas City has the ss‘a,? thing, and other cities will eventuilly adopt it.” ' Representative Fowler, Republican. Charles” N. Fowler, Republican, of New Jersey, chairman of the” house committee on banl;ing and currency, appears in the ‘Congressional Record with a house speech in suppoxt of his bill which provided for guarantee of bank deposits.. He specially answered the assertion that such a guarantee would in'd'uce reckless banking, saying: ; “Mr. Chairman, we are occasionally met with the statement that gnarantee of deposits would lead ito unsOund/ banking. * * * ‘Can you think of 4« banker, because he had insured his deposits, going into the diréctors’ room and saying: ‘Gentlemen, we have insured our deposits today. Now let us proceed to make some rotten loans? “Is it not possible that it will occur to these directors .that their losses must come out of their profits, out of their reserves, out of their capital, and out of their .reputations? Will they not realize that they can get nothing out of the guarantee until "ihe last dollar of- their capital, surplus’ and profits has been wiped out, and stockholders have been assessed double the amount of their stock? . -

| The Bankers' Reputation. = ’ “Pntil their reputati_oxis 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 solicitiousy anxious and honest and wise after they had guaranfeed ‘deposits than they were bef,oi{? : “I assert again, after the most mature deliboraﬁ:&;a&, that :f there is ome 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 TUnited States should be inmsyred.” - - Two Valuable Contributions. - These two men have offered valuable contributions to the discusson of the proposed guarantee of bank deposts. = Mr. Gage has set forih the present trend of bankers towards a ‘closer watchfulness over all institu--tions which accept the people’s money in trust, and has indicated the exact means wheréby, under a guarantee law, bankers would do as now they do —maintain an association empowered to look sharply into financial concerns which seem to be departing from sound methods. o e His reference to the Jobn R. Walsh failure In Chicago was doubtless because it was known to the country RUIER Y. B ig DSy ivets wide b licity and therefore Ynost likely to at‘tract attention as an illustration. ~__However, there is scarcely a locallty wherein bankers in late years have ot goue under toppling banks and up/the andermining of confdence ot o) g %‘lf T i LG Kﬁgw‘;‘?l‘wﬁi&‘{*’“ﬁ“%“g%‘»& e R -2 TS ‘L‘;‘“«’g‘} o R

VOL. 43--NO. 30

banks now, so far as concerns esplone age maintained by one over another. The important difference, however, ‘would be that depositors would not be ‘subject to the annoying, often disastrous, delays in getting their money which now they experience 'when banks fail. : o e But, that fewer failures would 00~ cur surely would be-one of the results of such a law. 'Everyone knows that many runs are precpitated om banks ' which are absolutely sound. Many a man, faithful, safe, conservative, conscientious._in caring for the money of his depositors, has suffered runs. caused by some rumeor started through malice. Many an honest banker has had his heart broken by senseless runs, and has groaned in Bpirit as he realized that gross injustice has been done as reward for earnest and able keeping of the trust reposed in him by his depogitors. -~ : The'Baring' Failure. e ‘When a dozen years ago, ; Baring Brothers, of London, suspended, it was ‘due to that very espionage by other bankers to which Mr. Gage refers. The Barings had embarked in many South American enterprises, 'some of -which were manifestly unsafe, ; The governors of the Bank of England, sensing the danger, refused to accept securities backed by them as basis for the issmance of bank notes under the custom of that country; that action never has been adversly criticized in any country, although‘it has jbeen discussed ever since the world QVer. il : - Modern business is conducted on the basis for the issuance of bank notes tle actual money passes from hand to hand. : Eonsns e > 3

. Modern System of Credits. You go to your bank with.a bundle of checks and drafts and deposit them to your credit. Against that account thus opened. you draw checks. They pass into the world of business, are accepted at face value, .and <ircnlate virtually as does gold, silver and cwrren¢y. If you pay your bills im checks, often you pass through weeks at a time when you have only a trifie of loose change in your pecket for street car fare and the small things you need from day to day costing too little to bother to draw a check. ' ~ “A check cancelled is a voucher,” has become a maxim in the business ‘world. : Complications of the System. ' This complicates business and forces all banks to associate themselves In clearing Louses, and probably the pablic would be amazed were they know at times how sharply the clearing house committee looks into methods employed by its members. ‘ln the panic that began last October, funds were carried from bank to bank, takén ostentatiously through the fromt doors, that depositors might know that other banks believed in the soundness of the institution which had been attacked by a run, and performed almost every essential of the guarsmtee system. - o Why? “ - Simply because the modern business system is so complicated and so little actual money passes current that each bank must know that ¢he others are properly safeguarding themselves and also that they are permitting the carrying of accounts by depositors whose paper may always be depended om as worth face value. * Wi Sl Beneath the Surface. .

So beneath the surface, one could witness the clearing house associations examining epllateral, securities and assets, and often sérving mnotice on a given bank that the associatiom will require some change in methods on penalty of refusal longer to clear for that bank. . = A - Banks Out of the Association. How about banks not in the associaton? Many perfectly sound banks sre not directly in the clearing house. They clear through another bank: which does belong. o Precisely the same rule applies <o them, fgx; when need_arises, the association ‘serves notice on “he member bank which clears for the non-asse-clation bank as to what will have '&l4 be done; and it is dene prompiy, toa, in every instance. i Lo-Bank-Book Should Be Worth Face. The essence of the guarantee plam is that a bank book should be worth its face always. Aun eniry in a pass book should not-constitute the assumplion of a risk by the depositor and the giving of fwide latitude to the banker. Sueh entry should be recognized as Just as actual an asset as a bank note. Also; proper arrangemeits must be mage for the continued espionage of banks by other banks. o T Lastly, and~quite as limportant banking laws must be enforced: over‘certification must be stopped; loaning of funds in—national banks on obvicusly speculative schemes must cease; and other reforms must be wrought t invest the banking system of the country with that complete confidence ‘which, if induced would put a stup to all nervousness by depositors.

:.......C..........‘.C.”: * NO SCARES THIS YEAR. @ & AT > : “No one fears that Mr. Bryan's ® e eclection would provoke an indus- : : trial, commercial and financial : : cataclysm.”—New York Evening » : e soboootbonsbonotobbocOOOßD

Just That Long. The New York Evening Pest, (Bepublican), asks: “How long sre the trusts to enjoy their preseat licemse to pick our poekets"y = -