Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-11-22
TO PROTECT OEPoSITORS
BRYAN WOULD HAVE GOVERN
MENT BACK THE BANKS.
Declares That a National Guarantee
Would at Once Restore Confidence
to the Business World.

Mr.. W. J. Bryan, IN Celebrating a suG-
gestion made by him In an interview In
The Star yesterday for the protection Of
bank depositors. said:
Il believe it is possible for the govern
ment to give immediate relief by n act
Of Congress. providing or the guarantee
by the government of all deposits in ma
tional banks. the banks thus guaranteed
to agree to reimburse the government for
any losses incurred. and to make this re-
endorsement In proportion to their de-
posts. The advantage of this plan is:
First. That every deposition in such
guaranteed banks 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 compared
with the benefit gained.
Third. 1t can be put into effect i'm
mediately and thus restore confidence
and enable business to be resumed.
1T is probable that all OF the national
of this guarantee because the additional
security given to their depositors would be
of great advantage to the banks. Dur
ing forty years the average annual loss
one-tenth of 1 per cent on the deposits. so
small that 1t would be an Insignificant tax
upon the four or i've billion dollars Of
deposits. The government would have
dfhple security III the capital ana surplus
Of the banks. which would voluntarily
| Join In the plan. AS each bank would be-
come interested in the proper manage
ment of every other guaranteed bank 1t
| would be easier to secure the legislation
| necessary for the correction of such abuses
| as may exist and for the better manage
| ment of the banks-for instance leEisla-
| ton preventing over-borrowing by direc-
tors and officials of the bank and legisla-
| ton preventing speculation by officials.
Advantages Of the Plan.
| ut seems to me that the plan suggested
ought to be acceptable to the depositors.
all of whom desire security. and it ought
to be acceptable to the bankers. who will
be well paid by the increased deposits for
any tax that may be collected from them
to reimburse the government. and do not
see that any objection can be made to the
use OF the government as a guarantor
when it is amply protected from loss.
The only objection that occurs to me is
that state banks might be less attractive
to depositors IL national banks are guar
anteed But there are two answers to
this objection. In the first place. state
banks are likely to suffer II this financial
stringency continues. and they are there
fore interested 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 depositors in state banks
and collect the expense from the state
banks guaranteed.
| Il proposed when in Congress the rails
ing of a guarantee fund for the protection
of depositors. but the bill was defeated by
the larger banks on the ground that the
big banks would have no advantage over
the little ones. If all the depositors were
secured. but now that the big banks are
suffering as much as the little ones the
objection will hardly be made.
Can Be Operated at Once.
1.-THE plan which I then proposed would
furnish protection as far as the fund
would furnish 1t. but it would take time
to raise such a fund. and believe 1t is
better for the government to make the
security absolute by becoming guarantor.
for this system can be put into operation
at once, and that. too. without expense to
the government. inasmuch as the banks
would reimburse the government from
time to time in case the government was
called upon to pay the deposits OF any
failed bank"
Mr. BRYAN will deliver an address al
Alexandria. Va. tonight on the subject
THE Old World and Its Way" Tomor
row afternoon he will speak briefly from
the steps of the Treasury building undel
the auspices of the Y. NJ. c. A. Tomor
row night he will deliver an address q
George WASHINGTON University on 'Goee
Citizenship Sunday afternoon he will
speak in Baltimore ana on Sunday nigh
will address the Y. NJ. C. A. Of this city
Tuesday night he will deliver an address
at a banquet in this city, at which he Will
be the guest of honor.