The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1907-12-06
GUARANTEE OF SAFETY
FOR BANK DEP0SlT0RS.
Mr.. Bryan's Safe and Sane Plan for
Security to 0epositors Would Re.
store Immediate Confidence.

| dUu lut DarfOW MINUS VI tue pro-
posed postal savings banks, sets
forth Il plain, safe and sane policy
that would effectually protect de.
pOsitors, restore confidence and
prevent boarding. He says:
It Is too early to say what the
effect Of the new bond issue will be
but the relief ought to come from
other directions. The plans so far
have been intended to furnish gov.
eminent money to the banks,
whereas the most important thing
now is to restore confidence in
bank depOsltOrs, aud thus not only
prevent Withdrawals, but secure de.
posts. While the banks are good
and while the depOsltors are not
justified IN being frightened, some
depOsitors are unreasonable and
their excessive timidity may EN-
barass the banks II the money
that is being hidden and boarded
can be brought back INTO circula-
ton the present strlugcucy will
disappear at once 1t does no good
to supply money from the treasury
if an equal or greater amount is
drawn out by depositors.
The administration is prepared,
so we are informed, to recommend
a postal savings bank. While this
would doubtless encourage deposits
and while those deposits could in
turn be handed over to the banks,
it does not furnish complete relief
The plan as presented limits de
posts to $3.50 for one person for
one year, and does not contemplate
the opening Of checking accounts.
The business ommunity cannot
therefore use postal savings bank,
to any great extent, and besides it
would take some time to inauguratc
"A postal savings system and secure
the necessary number of emplOyrS
to make the plan effective through.
out the country.
1t 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 national banks, the
banks thus guaranteed to agree to
reimburse the government for any
losses incurred, and make this re.
endorsement in proportion to their
deposits. The advantage OF this
plan is:
First-That every depositor in
such guaranteed bank will feel Sc
cure.
Secoud-The expense of it will
be paid by the banks which get the
benefit Of it and this expense would
be small compared with the benefit
gained.
Third-It can be put into effect
Immediately and thus restore conf.
dence, and enable business to be
resumed.
1t is probable that all the ma
tioual banks would be willing to
take advantage Of this guarantee.
because the additional security
given to their depOsltOrs would be
of great advantage to the banks.
During the past forty years the
annual loss to depOsitors has been
small (leSs than one tenth Of one
per cent on the deposits) SO small
that it would be an insignificant tax
upon the "a, 900, 900, 900 to So ,000,.
600, 900 of deposits. The govern
ment would have ample security in
the capital and surplus of the
banks which would voluntarily Join
in the plan. AS each bank would
become interested in the proper
management of every other guaran.
teed bank. it would be easier to Sc
cure the legislation necessary fol
the correction of such abuses ms
may exist and for the better man
agement of the banks-for in
stance, legislation preventing over.
borrowing by directors and officials
of the bank and legislation pre-
venting speculation by officials
The plan suggested ought to BIT
acceptable to the depositors, all Of
whom desire security, and it ought
to be acceptable to the bankers
who will hp we'll mid hy tha in