Fergus County argus. [volume] (Lewistown, Mont.) 1886-1946, 1897-01-21

away i'm old stockings than on de-
The remedy is simply t. have the
government guarantee the deposits
as it now does the circulation of all
national banks. Let the govern
ment tax all banks-say one-half of
one per cent-on all deposits. This
would e a a fund which would. i'm
all probability, enable the govern
ment to pay promptly and i'm full
all depOsitors of suspending banks.
over all losses i'm administering the
large revenue to the government.
Doubtless it will be urged that this
is pa~ternalism, but it is certainly i'm
degree only more 80 than i'm guaran-
teeing the currency of the country
and so long as the right of the
government to legislate for the ma
terial protection and welfare of the
people is recognized no serious objec-
ton could be raised against the leg
islatiOn proposed. Would the banks
oPIPoSt IL. tuilh not.
because the stability il would give
them would more than offset the
small tax. The assurance that there
would he no runs on their banks
would enable them to put in circula-
ton the large percentage of reserve
that they now must hold to meet
the demands of patrons who at
times become scared and rush i'm to
withdraw their funds. This would
all be avoided as the people. know
ing that the government was behind
their deposits, would only ask for
money as their actual necessities re-
quired.
Politicians tell us that there is
twelve hundred millions of dollars i'm
| circulation. This is not a fact be-
cause fully 40 per cent of this amount
is held i'm reserve by the banks and
must be SO held for their own pro-
lection.
Such a law as l suggest would
bring every dollar now held into cir
culatiOn and the aggregate deposits
would e immediately increased. The
banks not being compelled to keep so
large a reserve, could and would in
crease their loans, the interest from
which would more than offset the
tax they would pay the government
for it's guarantee. These additional
loans would greatly aid all branches
of manufacture and the vast reserve
now held by banks would, if put i'm
circulation. be the means to carry
forward and land many concerns ON
the high wave of prosperity that are
ability of the banks to assist them in
their time of need.
Money is not destroyed by use.
On the contrary it only fulfills its
legitimate functions. If the money
in the bank vaults at any particular
season was low you might be sure
were such a law in operation, that
it was out among h people stimu
lating trade instead of being boarded
owing to lack of confidence. Under
these conditions money would soor
flow to such sections of the country
as were in need and a capitalist
could, with equal safety, deposit hi
money in small banks in the west al
with large banks i'm the east, thereb.
sustaining home banks instead o
making them weaker.
i. 1t may be stated that this woult
lead to wild cat banking, but
think under a wise law it would b,
quite the reverse. The government
should, of course, insist on a capita
of at least $5O,OOO. paid up, and thi,
capital, whether large or small
would have to be consumed befor,
the guarantee fund could be drawn
upon to pay ~depositors. People d,
not invest i'm bank stock expecting
to loose and the managers of bank,
would have every inducement tocOn
duct their business properly thai
they now have. There would also
be "a more thorough system ofgovern
ment inspection to prevent unbusi
ness-like methods. Many failure,
would thereby be prevented that
now occur because of dishonest man
agement and millions would he saved
annually to the stockholders. who
would hail with delight such a law
If h coming congress wants to
distinguish itself by passing a
measure of more lasting benefit t.
the whole country than any bill eveI
passed it will lose 70 time in placing
such a law ON the statute books.
/ claim for such a law: 1st-That
SO long as h government exists
financial panics would be prevented;
2nd-it would at once put in circula.
ton vast sums Of none nov
boarded through fear; 3rd-it would
tend to equalize interest rates
throughout the land, by removing
the congestion of the east and sup
plying the demands of the west; 4th
lit would have an immediate effect
in settling the financial agitation.
restore confidence and start an era
of prosperity, and this is a condition
most devOutly to be wished. The
bankers are, Al a body, sufficiently
strong to command the attention of
congress and to bring about results
along this line. Congress of itself
will never do it, SO let common sense
take a hand. 1t can be done and
that successfully. Let us hear from
Others. -