, 1907-12-09
A PECULIAR

About the only argument that is be-
ing urged by financial writer's and cor.
ner grocery orators against a gov
nme guarantee of depositors IN
national banks is that the banks
would benefit thereby as well as
the depositors. Isn't that a funny
argument? They admit that the dual
benefit would Indirectly result in great
good to the entire people but swing
their arms to some extent and vocifer.
ate that there is no reason why one
business should be selected for protec-
ton II all other business ignored.
In making this argument the oppon-
ents forget that the banking business
takes on more OF a public nature than
any other business. 1t deals with the
currency OF the nation that is backed
by the government itself. The nation
al banks are chartered directly by the
national government. The government
makes five annua calls for a state
ment of their business. 1t sends govern
ment inspectors to inquire into their
business methods and assumes n su,
pervisory power over their affairs. it
everything and everybody connected
with them save n except the deposit
tor. This being the case, why in the
name of common sense should 1t not
take just one more step and protect the
depositor. so that he would have no
darhf about thA Sa,nrifu % hty p,Nna,,
in a national bank? And more par
ticularly when the banks are willing TO
pay the additional expense, which, as
a matter OF fact, would be so tritliag
as to be hardly worth considering.
With a government guarantee there
ure. Failure could only come through
dishonest practices or mighty poor
banking methods. In either case. bank
ers would SCOT become acquainted with
the les guilty of dishonesty or poor
business practices, and hasten to &C.
port them to the examining officers,
Having a little deeper interest than at
present, bankers would not hesitate
to weed out those who were inclined to
rob their fellow business associates.
1t is also urged by some that ore
dishonest men would rush into the
business, for the reason that they
would have no conscientious %scruples
about robbing bankers, whereas they
now hesitate to rob the people. The
argument Is silly. A thief would just
as soon rob the entire people as the
bankers. There is absolutely nothing
in that proposition. The passing of a
guarantee law would not remove the
penitentiary any farther from the thief
than it is today, and he would get there
Just as quickly. Perhaps his move
Inent In hat direction would be accel.
Grated by the fact that a few bankers
would make 1t a little hotter for him
than a large number Of depositors are
able to do at the present time. AS u
general rule they are brighter men and
would have no computations o get
ting a man who had deliberately plan,
ned to rob them behind he bars at the
first opportunity. Again, to prove that
there is no argument in the PROPOSE
ton, the stockholders n directors
would have just as great an incentive
to conduct a strictly legitimate and
honorable business under a government
guarantee as they have with nc guar
antee at all. As at present, their bust,
less would be conducted for the sole
purpose of making profits for them
selves. Such profits cannot be made
by stockholders who have as their Of
ticers men who deliberately plan 20
loot the bank. The argument is not
tenable.
Looking al the proposition from every
standpoint, there can be no question
but that the business conditions ano
general confidence of the people of the
nation would be UNNECESSARILY
strengthened by a government gnaran
tee of the deposits in national banks.
Perhaps, If those who are opposed
because they fear that he government
might get too deeply into the manage.
ment of private affairs muster great
strength, it might be well to get at
it in another way, and permit the gov
eminent to act merely as a custodian
of the fund raised for the purpose OF
guaranteeing deposits, but that would
simply be beating the devil around
the stump" Just as well come right
cot n back every deposit by the en-
tire strength of the national govern
menu, the cost thereof being placed up,
ON the national banks.