The Columbia herald. [volume] (Columbia, Tenn.) 18??-1935, 1908-05-08
citAsANrEE OF DEPOSITS.

No feature OF Senator Carmaek's
platform will appeal more strongly TO
sound conservative business men OF
all classes. farmers. merchants, me-
ehanies than the proposition for the
state to guarantee the deposits OF the
banking Institutions which it char
tiers. II the States and the govern
ment we're to guarantee all bank de-
posits disastrous runs" on banks
would never occur and the danger OF
a money stringency or panic would
be exceedingly remote.
If every bank depositor knew that
the State and the Federal govern
ment stood as a guarantor OF the
solvency of his deposit he would nev-
er lose one moments sleep or feel one
bit of anxiety as to the safety Of his
savings.
The notes or currency issued by the
National banks illustrates the truth
OF this statement. A note issued by
any National bank in any part OF the
country passes at its face value and
without question the whole world over.
Nobody cares what bank issues the
note. what its capital or surplus may
he those are matters that do not con-
tribute to the solvency of the obliga-
zion Rut the fact that the note bears
the guarantee of the United States
makes it good anywhere.
There seems to be a mistaken IDEA
as to the cost of guaranteeing bank
deposits and the payment of this ex-
pense. 1t is proposed to tax the
banks. not the depositors, fraction
of a per cent for the purpose OF Gre
ating a reserve fund to be used only
for the purpose of paying depositors
who may lose because of the insolv-
encv of the institutions in which they
NAV carry their deposits. This tax
will he a very small one and the banks
will benefit more than they will lose
by it's payment. Guaranteeing de-
posits would bring to the vaults OF the
banks millions Jof dollars that are
kept stored in cracks, corners and ola
stockings because of the fear of the
owner that the banks may fail.
| The cost Of guaranteeing the de-
nosits would, Judging the future by
the mast. be not more than one-thlr-
teenth of one per cent. Since the
national banking system was instr
tinted in 1866 to 1907, period OF forty
two years, this sum represents the
average losses from failed banks.
During that time the average deposits
in all national banks amounted 10
81 ,529 ,339 81 per annum, and the loss
es averaged $1,114,223, which is one
thirteenth of one per cent. That is II
would take seven cents on every $lOO
of deposits to create fund sufficlent
to guarantee all losses, sum that the
banks could pay and never miss
These figures include the loses
through bank failures during the long
period following the war before the
resumption of specie payments, the
loses in the panics Of 1873 and 1898
and 1894 and the long business depres-
sion that began in the late eighties
and did not end until the late nineties.
The banks would gain by the new plan
but the depositors would be the great
est benefciaries and the general bust
ness interests of the country would
be placed upon sound and safe foot
ing.
Oklahoma has recently Incorporated
IN its constitution provision for the
guarantee of bank deposits and MT
BRYAN is one of the first and ablest
advocates of the plan. 1t is one that
will appeal to the reason and SOUND
Judgment of every voter.