The Cairo bulletin., 1908-10-02
ALao POSTAL SAVINGS BANKS AS
SUPERFICIAL AND
FALLAClOUS.
EVIL CONSEQUENCES
Wou'd Be Sure to Follow Overturn;ng
Conservative Management of 43
Yeara--chicagoan For
President.

Denver Oct | The convention o
TIC American Bankers Association
came to an end this afternoon with tn
election Of George M Reynolds, 0
Chicago, president The conventio.
placed itself sauarely on record al
against beth propositions to guaranto
bank deposits and to establish pcsta
savings banks. Addresses were mad'
on beth subjects during the day
Guarantee of Deposto.
VIM C. CornweIl, Of J. S Bache
Co., New York, spoke on the propose,
government guarantee of deposits
concluding as follows:
The result thus far under the on
system the losses have been infinite
sinai 1t is planned by the govern
ment guarantee of deposits to get r,a
0 flhis small loss. But it would be tie
opening Of the dam. The life Of a
banker is a life of conflict against loss
All the qualities which have fought
losses conseryatively for 43 Yeas
would be rendered objectless as far rs
deposits are concerned. With this
great incentive for conservative abil-
ity removed, these faculties would by
reason of uselessness become largely
absolete The unframed and reckles )
would rush in to reap the benefits of
Of depositors nloneY,
without experiences aud ability to
work out success. Does anyone doul t
that the ratio Of loss woull be great.
y Increased? 1t is argued that ser
interest would deter the new, bankers
from placing their capital in jeopardy,
but the selfinterest of reckless finan-
ciers has never yet deferred them
from risking their own and other peo-
pies money in uncertain, highly spec.
ulatiye or questionable ventures.
The reward of conservative conduct
in banking heretofore has been the
of depositors. Discrimina-
tion on the part Of the depositor has
placed premium on character. ability
and upright conduct in banking. This
weight of public opinion has been
Of pronounced value in sitting out the
unfit and building up a body of care
ful able bank officers to whom the
enormous deposit funds CT the coun-
try may be safely entrusted To cut
away this safeguard of character abol.
shing the necessity for discrimination
making one bank as good as another
the weaker at the expense of the
stronger. is to weaken and dissipate
me CT the bulwarks Of sound business
and to endanger the whole commercial
structure
The argument may be condensed rs
follows:
The adoption Of a plan for govern
nent guarantee Of deposits, based up.
IN fund contributed through a tax
ipon all banks. would introduce into |
/ great bushes of trust a principal
unsound and sure to be 4
productive of disastrous effects in the
uturc.
The method Of building mp depos-
IS is by conservative and capable
of the banks affairs. A
government guarantee Of deposits
would induce unwise, If not reckless
iberality in loans. rates of interest
nd other indulgences in order 10 win
deposits. The conservatism. which /
haracterizes present bank manage
nent would no longer obtain.
A tax guaranteeing deposits woult
ventually be paid by the borrowers.
he number Of banks in which loss t.
epositors ensues. amounts to a very
mall percentage. The very large per
e1tage Ct people. who are not re-
poHsible, would have to pay the tax.
{ is a tax levied upon ability to con-
ensate ineficiency.
Discrimination by depositors as to
haracter Ct bankers now deters in
nicient and dishonest people froa
agaging in the banking business.
-nder universal guarantee this restiic-
ION would b. removed
Because Of the high character and
baility Ct bankers at the present
me. losses are kept to a minimum
EuTe. a great increase in specula-
I've loans and resulting losses wouli
ecessariiy follow the operation Ct
lcapahle ana unframed people under