The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-02-21

LII the senate a bill is pending re-
hitting the claim of the state for some
$4,000 interest on it's deposits in the
Bank of New England, one Of the Min
neapol1s banks that went into a re-
ownership. If this sum is RENTED it
is stated that the other depositors will
receive about 10 per cent on their
claims; If insisted on they will get lit
tie II anything. Another measure is
proposed that will surrogate the bonds
men Of this or some bank to the states
prior lien on the assets Of the bank
permitting them to have a preference
over the depositors. In the course Of
the debate on the abatement of inter
est Senator Morgan expressed the
nope that the session would see a bill
enacted into law waving the prefer
ence of the state as a creditor and
leaving it to take it's chances with the
other depositors.
And why not? The state is sovereign
ana the sovereign can do no wrong"
But does 1t do right when it. with its
boundless riches, refuses to share pro
rata in the assets of bank in which
1t is a depositor with it's citizens but
insists upon it's pound of flesh, thus
diminishing the shares Of it's fellow de-
positors? 1t has not only the assets
but also the resources of the bonds
men whose assurance it requires in adj
dlt1on to the legal responsibility Of
the bank, a resource the citizen de-
positors have not. Would it not be
nearer justice did the state exhaust
the bond security before depriving the
citizens of their share? Is this RIGHT
or does might still make right? VIII
the real interests Of the commonwealth
be better served by the state getting
the uttermost farthing of it's dues
though it bring ruin to numbers Of its
citizens? Where some must suffer. is
it the better policy that the individual
or the state should? If preferences
are to be shown, does not public policy
incline to the citizen rather than to the
state?
But it is not question whether there
should be preferences but whether the
state should not stand equal with the
citizen who is also. a depositor, each
bearing his proportionate share Of the
loss. Were it question whether the
citizen should not be first paid there
are equities that might be urged
strongly in support Of it, but they are
even stronger in advocacy Of the equal
standing of the state and the individ-
ual depositors Fhe very fact that the
state is a depositor gives credit to the
bank, and induces individual deposits.
The citizen is aware that the state
possesses means of informing itself as
to the solvency of the depository that
he has not. It has it's bank examiner
| and his staff whom it can send in be-
hind the counters to examine the
books, the securities and assets. No
individual depositor has this right. He
only has the reports required by law.
and all know how unsound
condition they can be made to
cover with the appearance of
solvency. Is it not equitable then
that the state, having these means of
knowing the condition of the hank #
deposits with, and neglecting to use
them, should, at least, stand on COM
mon ground with the citizens whom #
has misled?
! Again, if the money of the citizen or,
deposit is to ber used to refund the
money deposited by the state, does the
law not make each one Of them an
unconsenting guarantor of the bank as
to the states fund? lis it just thus to
exact an unwilling security from the
citizen? Is tit good public nol-
| icy to thus add to the ele
ments of distrust ofssour banks? VIII
it not be accepted as. one Of the condI-
tons Of trade that state deposits weak
en- a bank, and, when doubt arises Of
the stability of banks,w will not depositors
| accelerate the crisis by rushing TO
withdraw their funds from banks pa
tronized by the state? Will men take
chances then Of losing all because the
state has the power, not the right. to
take all? This is the present cues
tlon because or past poncy and results.
The larger question is, whether 1t is
not wiser that the state have no sur
plus for deposits; that this money be
left as long as possible with the men
who need and will use it in their own
affairs, and whether 1t is not better
! that the payment of taxes be made in
installments, say quarterly. or even