The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-11-22
BRYAN EVOLVES
FINANCIAL PLAN
Would Have Uncle Sam Guar
antee All Deposits in Ma
tionaI Banks.
QUICK AND CERTAIN RELIEF
BANKS.
QUICK AND CERTAIN RELIEF

Washington, Nov. Civilian J.
Bryan arrived here today and attend
ed the wedding of the daughter of q
friend, Cutter P. Bride He held
conference with several other friends.
To reporters Mr.. Bryan said
The administration is prepared, so
we are informed, to recommend
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, because the
plan as presented limits deposits and
does not contemplate the opening Of
circulating accounts. The business
community, therefore, cannot use the
postal savings banks to any great ex-
tent, and, besides, it would take some
time to inaugurate a postal savings
system and secure the necessary num-
Der of employees to make the plan eff
fective throughout the country
Would Give Immediate Relief.
4 believe it is possible for the gov
eminent to give immediate relief by
an act of congress providing for the
national banks, the banks thus guran-
teed to agree to reimburse the govern
ment for any losses incurred and 20
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 here
fit of it, and this expense will be small
compared with the benefit gained.
Third, it can be put into effect i'm
mediately. thus restoring confidence
and enabling business to be resumed
Advantageous to the Banks.
1T is probable that all the national
banks would be willing to take adVan-
tage of this guarantee. because the
additional security given to their de
positOrs would he of great advantage
to the banks. During forty years the
average annual loss to depOsitOrs has
been small, less than one-tenth Of 1
per cent, so small that IT would be III
significant as a tax upon the four or
five billion dollars of deposits. Tile
government would have ample security
in The capital surplus Of the banks
which would voluntarily join in the
plan, AS each bank will become inter
ested in the proper management OF
every other guaranteed bank. il would
be easier to secure the legislati ton no
Cessdry for the correction OF such
abuses as exist and for the better
management of she banks-foT IN
stance, legislation preventing over
borrowing by directors and officials g
the bank. and legislation preventing
speculation by officials.
Should Be Acceptable.
1T seems to me that the plan sug-
gested ought to be accountable tc the
depOsitOrs. all Of whom desire secUri-
ty, and it ought to be acceptable 10 the
bankers, who will be well paid by the
increased deposits for any tax tnlU
may be collected from them to reim-
burse for the expense, and / don't see
where any objection can be made to
the use of the government as a guar
antOr when it is amply protected from
loss. The only objection that occurs to
me is that state banks might be less
attractive to depOsitors if national
banks are guaranteed. But there are
two answers to this objection. In the
first place, state banks are likely to
suffer if this financial stringency con-
tinues, and they are therefore inter-
ested in restoring confidence; 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 GepOsitors III
state banks and collect the expense
from the state banks guaranteed"