The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-12-24
Resents Statement That He
Would Oppose Measure.
CRUMMER SPEAKS UP.
Says Proposed Reform Is Too
Socialistic for Him.
Mr. Brokaw Says Guaranteeing
of Deposits Is Inevitable.

has been called to an item appearing
in a Topeka paper, stating that NJ
would oppose in his message to th'
legislature the enactment of law FOL
the establishment of a guarantee func
10 insure the deposits of state banks
such as is proposed by John Q. Royce
In spea king OF the matter, Governor
%H0ch said today.
Il want to state that / never au-
thorized any statement as to what
would advocate in my message to the
legislature concerning this plan fol
guaranteeing deposits The articles
printed in the newspapers, purporune
to state my position in that matter are
entirely misleading Since these pa
pers have given out such information
I will say this. That I am heartily and
fully I'M accord with the plan Of guar
anteeing deposits as proposed by Mr
Royce. I believe it is the proper thing
and I believe it should be enacted into
law"
The support of Governor HOch will
tend to give the bill on the sup1ece
proposed by Senator Fred H Quincy a
strong backing q the coming session
of the legislature. Certain newspapers
which are said to be Influenced in their
attitude by the corporations Will
doubtless oppose the proposed law, but
the great mass of the people of the
state will probably demand the enact
ment Of the law. which will make loss
by depositors in case Of bank failure,
q very unlikely occurrence
s. c. drummer the private secre-
tary to Governor Hoch, and former
deputy bank commissioner under Jno-
O. Royce. is not in sympathy with
either Mr.. Royce or Governor Hoch.
He is opposed to the proposed Quincy
BILL He said in speaking of the meas
1T is too socialistic for me. 7 be-
iieve I'm letting every bank fight its
own battles A law of this sort would
simply encourage loose banking meth
ods and encourage scoundrels to wreck
banks."
one of the abIest presentations of
the question Is contained in a paper
which was read by c. L. Brokaw, Of
the Commercial National bank OF
Kansas City at the recent meeting of
the state bankers association. Mr..
Brokaw. being representative OF
National bank. and also of one OF the
largest banks in this part OF the coun-
try might be expected to oppose the
plan but after extensive Investigations
Mr.. Brokaw has come to the conclu-
sion that a system Of guaranteeing de-
posits is inevitable. He wrote to
number OF the leading bankers Of the
state whom he knew to be opposed
to the law. and asked them to
state their objections. He summariz-
ed the objections received under nine
heads as follows:
Objectionl to Guarantee Law
1. Bad men would engage and in
duce others to engage In banking for
fraudulent purposes.
q Incompetent bankers, feeling
that depositors were safe anyway.
would become reckless as to policies,
resulting in ruin.
s. II would put all banks on the
same footing. and the good banks and
bankers would have to pay for the
thefts or errors of the dishonest and
incompetent.
T. 1t is sociaHstic and wrong in
principle and smacks Of unionism.
3. The government should keep out
Of the banking business.
s. Unless such a law were passed
by the state and nation simultaneously,
st would put one or the other at a Sc
rious disadvantage.
= Bank credits should not be guar
znteed more than any other
s. It would be impractical unless
the capital was kept in proportion to
the deposits
g. lit would cause the disorganiza-
tion Of too many banks. and under
such a plan, the depositors would not
discriminate between good and bad
baukers-
Mr.. Brokaw answers these objec-
tions as follows
SIR BrOl1aW's Answers.
Concerning the first objection, it
may be answered. it would be no cas-
Ter for bad men to engage in the bank
ing business then than now. To pro-
tect the capital, the deposits would
need to be protected by safe banking.
we can count on human nature being
selfish enough to look out for No. 1. T
and in such cases. the capital would be
No J. and as I have just stated capi-
tai protected means deposits protect /
ed In this instance. the objector
makes no allowance for bank fnspec-
ton Under guaranteed depository +.
aN. every good banker would insist on
better inspection. audit and control by
state or nation Again. the comptroI-
er does not approve an application to
a national bank without the
endorsement OF a district judge. sena-
Tor congressman or some other re-
sncnsible man or men. Further not
many thieves. in the first place. would
lave sunicient capital to start bank,
1r could secure it. and if they could.
hey would be- unable 10 get the nee
.ssarv local support. directorate or en-
lorsernent. and beside all this. un-
icrupulous bankers and incompetent
eace even to rob a guaranty fund. all
- which seems to answer both OBJ
ections No. l and >
Objector No says, Tt would put
IN banks on the same roofing and the
-ood banks and bankers would have to
say for the thefts or the errors Of the
iishonest and incomp petent.' The an
vrer seems to be that. in a manner. it
Ioes put all banks on the same footing
,ut only as to the ultimate safety Of
Ieoosits. II IS not contemplated to
.1arantee the capital. Again. it is
ontended that there would be no in
.ividuaiity in banks. but. surely. per
onaIfty would count just the same
siven two stores alike in every parti-