The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-11-22
BRYAN HAS A PLAN.
To Give Immediate and Permanent
Financial Relief.

| Washington. Nov. 22.-William j
| Bryan arrived here yesterday and at
tended the wedding of the daughter OF
a friend, Cutter P Bride. He held q
conference with several friends.
To reporters Mr.. Bryan said: The
| administration is prepared, SO we are
informed, to recommend postal saw
| fngs bank. While this would doubtless
| encourage deposits and while these de-
posits could in turn be handed over to
| the banks, it does not furnish complete
| relief, because the plan as presented
limits deposits and does not con template
the opening of circulating accounts.
The business community therefore can
not use the postal savings banks to any
great extent and besides 1t would take
some time to inaugurate postal saw
ingS system and secure the necessary
number of employees to make the plan
| effective throughout the country. 1 be-
| lieve it is possible for the government
| to give immediate relief by an act of
congress providing for the guarantee by
the government of all deposits in all
national banks, the banks thus guaran-
teed to agree to reimburse the govern
ment for any loss SO incurred and to
make this reimbursement In proportion
to their deposits. The advantage of
this plan is:
First-That every depositor in such
guaranteed bank will feel secure.
Second-The expense of it will be paid
by the banks which get the benefit of it
and this expense will be small COM
pared with the benefit gained.
Third-It can be put into effect I'M
mediately, thus restoring confidence
and enabling business to be resumed.
1t is probable that all Of the national
banks would be willing to take adVan-
tage of this guarantee because the ad-
ditional security given to their deposit
tors would be of great advantage TO
the banks. During forty years the aver
age annual loss to depos1tors has been
small less than one-tenth OF one per
cent so small that 1t would be an 1ns1g-
nificant tax upon the four or five billion
dollars of, deposits The government
would have ample security in the cap
ital and surplus for the banks which
would voluntarily join in the plan. AS
each bank will become interested in the
proper management of every other
guaranteed bank IT, would be easier to
secure the legislation necessary Tor the
correction of such abuses as exists
banks-for instance, legislation pre-
venting over borrowing by directors
and officials of the bank and leglsla-
ton preventing speculation py oH1clals.
IT seems to me what the plan sug-
gested ought to be acceptable to the de-
positors. all of whom desire security
and it ought to be acceptable to the
bankers who will be we'll paid by the
increased deposit for any tax that may
be collected from them to reimburse
the government and I don't see any OBJ
lection can be made to the use OF the
government as guarantor when it is
amply protected from. loss. The only
objection that occurs to me Is that
Stete hanks might be less attractive to
denositors If national banks are guar
anteed. But there are two answers to
this objection. In the first place, state
banks are likely to suffer If this hnan-
ciaI stringency continues and they are
therefore, Interested in restoring conf
dence; in the second place, there is no
reason why state banks should not be
protected by a similar system under
which the state would guarantee de-
in state banks and collect the
expense from state banks guaranteed.