The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-01-27
AFRAID OF PANICS
SENATOR BALDWIN DISCOVERS
NEW DANGER IN PROPOSED
TAX LAW
BANK DEPOSIT PROVISION
Accounts Likely to BE Withdrawn
If Bankers Are Required to
List Individual Accounts
Every Year.

Senator Charles Baldwin sees in GER
tain provisions of the new tax law the
promise of annual panics throughout the
state of Minnesota This is the provi-
sion that requires bankers to LIST every
year depositors in their banks, together
with the amount of each individual de-
pcsit. He believes that this will mean
that before April of each year deposit
tors will withdraw their accounts to
escape taxation; that there will be a
run on every bank in the state and that
to prepare for that run bankers will have
to withdraw all loans and call in SO
much money that business enterprises
that are being carried on borrowed mon
ey will be jeopardized. Senator Baldwin
says:
Section 80 of the proposed law requires
all persons to list, besides his own prop
erty, all property controlled by him as
agent, attorney or banker Section s
says that the term person" shall be con-
strued to mean corporations. This is
practically the existing law, with the
term banker added, and with the COM
pelling provisions of the new law added
This means that every banker must list
the depositors in his bank, with the
the effect of this provision be? The
banker must make his statement as to
deposits on April l. This will mean that
before April 1 there will be run on
depositors may get their money out OF
the bank before the list is made out
We have in Duluth two principal banks,
which, according to their recent state
tween 100000 and $i0,0000OO. If the act
goes into effect the depoeitors, or a
great number of them, will draw their
money out, so that it will not be there
April /.
To anticipate such run, the banker
will have to begin some time prior to
call in his loans, and to refuse to make
new ones. No one will be able to get
any money, for the bankers first duty
is to the depositor and we may have Il
repetition of the times of 1898 when the
banks shut off all credits. And this will
happen every year SO long as the law
remains in force.
1t does not seem right to ask the bank
err to disclose his relations with his de-
positors, and how much money they have
with him. Their relations are somewhat
similar between the attorney and his
eient. No attorney can be asked to dis
close the business of his client and no
attorney that would do so could COM
mand any business. l do not see why a
banker should be called upon to disclose
the nature and extent of the busin MA
of his depositors. between whom and
himself there should be confidential re-
lations that should be protected by law
Personally | would not do business with
a banker who would disclose the condi-
ton of my bank account to anyone who
should ask him about 1t. It is a well
known fact that banks DO not disclose
such facts I can see how attorneys
might benefit by such a requirement, be-
cause when the lists were filed they could
look over and garnishee those who have
deposits against whom their clients have
claims.
The fact that bankers are required to
disclose the names of their depositors
and the amount each one has on deposit
viii cause an annual run on the banks
that will not only injure the banks. but
because of the necessity of curtailing
loans, it will create an injury to general
business, and that will repeat itself ev-
cry year. The banks might be able to
stand it, but in order to meet it they
would have to call off credits suspend
their loaning operations and imperil ev-
cry business enterprise that depends upon
the use of borrowed money to carry It
along.