Thursday, October 2, 2008

On bailouts of the banking industry c. 1908

The economists at Division of Labor seem to be as fun a bunch of econobloggers as you're likely to find (excluding Haab and Whitehead's Friday Beer Posts).
From time to time DoL trolls the archives at the New York Times. What they find is often entertaining and usually instructive. From Division of Labor:

The irony discovered reading the paper from 100 years ago is sometimes too much, even for me. The October 2, 1908 NYT reports on the banking industry's take on a "bail out" plan, of sorts, proffered by William Jennings Bryan (and others):

The American Bankers' Association to-day adopted the following resolutions opposing the policy of guaranteeing bank deposits now being advocated by Mr. Bryan:

Resolved. That the American Bankers' Association is unalterably opposed to any arbitrary plan looking at the mutual guarantee of deposits, either by a State or the Nation, for the following reasons:

1. It is a function outside of State or National Government.
2. Is is unsound in principle.
3. Is is impracticable and misleading.
4. It is revolutionary in character.
5. Is is subversive to sound economics.
6. It will lower the standard of our present banking system.
7. Productive of and encourages bad banking.
8. It unjustly weakens the strong and unfairly strengthens the weak banks.
9. It discredits honesty, ability, and conservatism.
10. A loss suffered by one bank jeopardizes all banks.
11. The public must eventually pay the tax.
12. It will cause and not avert panics.

Later in the story we hear from Nathan Straus, "Chairman of the Business Men's Committee of the Democratic National Committee:">>>MORE