The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1907-12-26
JOHN SCHUETTE RE-
PLIES TO OBJECTIONS.

cohh oShoStpS' PiSoaNShA "a VIZ Ah"hi
towoc Savings bank. in Rng letter in
the Milwaukee Sunday papers, replied
to the objections raised to his plan of
bank deposit insurance and makes an
other strong argument in support of his
views on the financial question. He
says:
The main objections encountered to
deposit insurance were: First, the larger,
stronger and moIe influential bankers
saw in this plan that the advantage they
now have over their smaller competitor
would be lost. This | admit is true.
But there are now insurance companies
insuring deposits in banks in small
way charging ! per cent premium and
others are being organized to insure
bank deposits broadcast. Then the small
ler banks will insure their deposits in
such companies. Will not the stronger
banks do the same?
In such case the cost would at least
be three times that of the government
plan, and would not inspire that conf
dence with depositors rs the insurance
under the government control. So the
larger banks can not escape the equality
of safety in any event, and aside from
this would it not be more pleasant, more
heroic honorable and patriotic to com
ha 1ax,alD | 20.
member when boys were called towards
if they attempted to wrestle with one
below their size. Aside from this, it
would help to create banking system
excelling any on earth, prevent recur-
ring panics and ingratiate he bankers in
hearts of whole nation. =
Secondly, that all state savings and
private banks would lose il.eir deposits,
because the insurance would apply only
to the national banks. This can easily
be arranged by an amendment to the ma.
tlonal bank act, under which real estate
mortgage loans will be permitted. If
this is done, all can easily reorganize rs
national banks. AS to purely savings
banks, these could be ALLOW ed to contin.
ue to operate under the same safe rules
as now, excepting that theJ would have
to organize under the natona' system
and control and to be ren, ne national
savings banks.
Thirdly, that bankers would be more
reckless and negligent if their deposits
were insured. | cannot see why. Nei-
ther the bankers own capital, his double
liability nor his reputation and honor
are insured These he would be liable
to lose in either case, and besides, the
examination would be stricter than
has been, which would guard against
reckless banking
'Fourthly, that the banks would
greatly multiply, thus giving the banker
keener competition. This | admit, but
in case deposits are not insured, we will
have to compete with the postal savings
banks sooner or later, which will be a
far stronger competitor than any addi-
tional banks can be,
'As safeguard against multiplica'
ton of undesirable banks, lies in the
power of the comptroller, who can re-
fuse charter, in case he finds already
sufficient banking facilities, in place
where new bank is proposed, and also
may refuse charter when he has rea.
sons to believe that the pesounel of n
new bank is not responsible,
Therefore, we may be assured, that
the banks will be on the alert, to inform
the comntroller, OF all the objections to
a new bank
Fifth, the opposition of those bank
ers who consider themselves above the
possibility Of failure, and do not pro.
pose to pay their neighbors incompe'
tence, misfortune, or rascality, To
these my answer is, that all of us, more
or less, have contributed our mite to
this class, and we will continue to do so
to the end of time.
Sixth, the word tax The objec.
tors never stopped to investigate fur.
ther, and condemned the plan, unseen,
unheard, and without thought or con.
sideration
AS TO POSTAL SAVINGS BANKS.
The benefit of postal savings banks, he
says, would be only to the small deposi.
tors, and the national banks which hap.
pen to get these deposits. Business men
and large depositors would not be pro-
tected. Another objection, he urges,
is that postal banks would only pay 2
per cent, while other banks pay more,
and Furthermore, postal banks would
not prevent panics.
''By deposit insurance the reserve now
held in banks, preparatory for run,
which may come tomorrow or not for
twenty years, this immense idle, hoard
ed amount, about one thousand million
dollars, could be reduced to one. half,
which would put five hundred million
more into the channels of trade.
''By deposit Insurance we would not
be subject to recurring financial hurries,
which disturb and paralyze every branch
of our commercial, industrial and agri.
cultural interests Deposit insurance
would, aside from the monetary benefits
crpata and stimulate the habit of aav.