Jasper County Democrat, Volume 11, Number 31, Rensselaer, Jasper County, 19 September 1908 — PROTECT DEPOSITS [ARTICLE]

PROTECT DEPOSITS

GUARANTEE PLANK ONE OP MR. BRYAN’S WINNING CARDS. The Object Lesson in Oklahoma and Convincing Men that their Savings In Banks Should be Protected as Well as Government Ccpu.lts.

The Democratic National Platform favors guaranteed bank deposits; the Republican platform is silent on that subject. Mr. Bryan heartily champions the plan; Mr. Taft is strongly opposed to it. Mr. Taft and Guaranteed Deposits. In his speech of acceptance Mr. Taft puts himself squarely on record as being opposed to guaranteed deposits. He says: “The Democratic platform recommends a tax upon national banks and upon such state banks as may come in, in the nature of enforced insurance to raise a guaranty fund to pay the depositors of any bank which fails. The proposal Is wholly impracticable unless it Is to be accompanied by a complete revolution in our banking system, with a supervision so close as practically to create a government bank. If the proposal were adopted exactly as the Democratic platform suggests, it would bring the whole hanking system of the country down in ruin.” Why seek to confuse the people on a simple proposition? We are supposed to have Government supervision of national banns now. Supervision does not mean a government bank; it simply means that the national hank inspectors will do just as they are expected to do under existing law'—make their examination of banks thorough and make prompt and effective correction of any irregularities discovered. So it will be difficult to frighten the people by the claim that guaranteed deposits means thorough supervision of banks. That’s just exactly what the people want. It is absurd to say that guaranteed deposits would “bring the whole banking system of the country down to ruin.” What does “guaranteed deposits” mean? It means that the savings of the masses shall be secured so that when men and women deposit their hard-earned money in banking institutions, they need not worry for fear it will be lost, through the recklessness and dishonesty of hank officials. The Federal Government demands of these banks security for the money It deposits. As a rule state governments and county governments and municipal governments make similar requirements. But now that it is proposed that depositors generally shall have some such assurance for the safe keeping of their wealth, we are toSd by the Republican candidate for the Presidency that the adoption of such a ,plan “would bring the whole banking system of the country down te ruin.”

Oklahoma's Object Lesson. Oklahoma has the guaranteed deposit plkn and the following Associated Press dispateh tells of Its operation in the first hank failure since the law wont into effect: “Guthrie, Okla., May 2L, 1908.Within one hour from the time H. H. Smock, Oklahoma banking commissioner, had taken charge of the International Bank of Colgate he had authority to pay the depositors in fall, though the bank’s cash and available funds in other banks fell $22,000 short of the total amount of deposits. The commissioner was enabled to do this under the operation of the new banking law. and this is the first time it has been called into use. Under the operation of the guaranty banking taw of Oklahoma a tariff of 1 cent is levied upon the average annual deposits of the banks, and this money to used tn payment In full of all depositors of an' insolvent state bank, after the funds have been exhausted.” WIH the Banks Answer This? In addition to the arguments already presented in favor of the guaranteed bank, the following is submitted:

The “United States Government requires a deposit of specific security when it deposits money in a national bank; the state also requires security, and the county and city deposits an secured either by bonds or by the deposit of specific securities. Now the question arises, if the United States Government, which can at any time inspect a bank and find out Jnst what it is doing and how its business is being conducted, requires security for its deposits, why should not security be given to the depositor who cannot examine for himself and does not know anything about the bank’s solvency or methods? And loss to the national government, to the state, to the county or to the city would be borne by all the people and thus be small upon each one, while the loss to the individual has.to be borne entirely by himself and may wipe out his entire savings, is not the argument stronger In favot of the protection of depositors than it is in' favor of the protection of the nation, the state, the county or the city? But the case is even stronger when the bank is required to put up specific security for the protection of national, state, country, or city deposits. Its gilt-edged securities are thus hypothecated and the inferior securities are left for the security of the depositors.

so that, as a matter of fact, the public deposits are not only nroteoted. hut they are protected at the jxpense < f the individual dmiositors. Wbfct shall we say of ; ;onal bank which willingly gives the government specific security and then opposes the protection of depositors? And, Btrange to say, these big banks that get the long deposits from the government upon specific security are the very ones that have fought and are fighting the system for the guaranty of depositors, it is time that the depositors under stood the situation and got togethei for their own protection. Will any banker who is opposing the guaranty system answer this argument and ex plain why it is right to protect gov ernment deposits and wrong to protect individual deposits? When the International Bank al Colgate, In Oklahoma, failed, the following notice was posted on the door:

A farmer in 'the country, who had money in the bank, sent word that he was too busy to come at once, but that he would call in a week. What a contrast that is to the rush that is made by depositors in banks where deposits are not guaranteed? There the people almost beat down the doors to get their deposits.