Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-10-12
RAYMOND SPURIOUS COIN.

objections to the insurance of bank
deposits which no ordinary mar would
discover unaided. Raymond is n OF
kthe great editorial correspondents OF
tn country and writes for a great ews
! paper, so that his wisdom will be
accepted rs authoritative by a great
many people. To those Of an inquiring
turn OF mind an Investigation OF Ray
mond's discovery in banking finance
$pvill prove Intensely interesting.
Raymond says that the insurance OF
bank deposits is impracticable and
ridiculous because the bank merely
acts as q broker when It receives its
depositors' money. It promptly loans
hhe money out again, and. according
i Raymond, Il the deposition wants to
insure the safe return of his money he
nad far better insure the loans the
sank makes. Then Raymond explains
he principle underlying the banking
businesa whereby the depositor loans
3 the bank on demand while the bank
setoans on time and takes its chance
IN keeping it's depositor creditors sat
shed by paying only a few demands
Ii a time.
.eThe root of the evil seems to lie
r. the fact says Raymond, that the
aepositor is a quick creditor, while the
borrower is a slow debtor. n h two
AhinEs must always prevail at the same
lime. because they date back to an
abnormal demand for money or to dis
trust.
ar The loans could be converted into
lash as rapidly as the demands OF the
llenositors are met, there could moi be
Inv trouble with an honestly nan
sged bank"
I Now, we have often heard u ex-
blamed that insurance Of bank deposits
would remove the business necessity
for bankers to be honest in order to
hold business and that 1t would thereby
encourage reckless banking but the
beautiful scheme Of insuring q banks
loans SO as to remove the business
necessity for the banker to- ask for
collateral or wen to be careful mas
never before beer suggested. It ought
sto make banking a picnic.
when Raymond talks with a country
banker some day he will learn that It
IL not Of the inability of a bank to realize
onsits securities so as to pay on de-
=. - $500 0---Y-
gmand that the public complains. Bank
erg everywhere learned in this last
panic that the people understood that
part Of the banking business fully as
ven as they did and We're patient about
iit. too. The thing that the public
wants insured is the loss of its money
when bankers make poor loans or steal
The funds entrusted to them. The bank
ar today asks the widow of no bus1-
ness experience and the wage worker
with no source Of information as to the
bankers Integrity to entrust their
money to him without security other
4hah his own ability to pay. Raymond
argues that It is ridiculous to talk
about insuring the depositor while it
2Kvould be far more sensible to Insure
Mia bankers loans when he makes 1t
his business to know how to loan
money safely and is already given the
privilege of demanding a guarantee OF
every loan in the shape of an extra
siener or endorser or the pledge Of
property. as collateral. He does not
suggest, tho, how the depositor would
anything out Of a dishonest bank
lers even tho the latter should have his
loans secured for him.
The facts Raymond talks as tho
he had never e a bank. The principle
nf making the depositor secure is
fundamental in u banking business.
there was a time when the govern
sept did not attempt it and we had
III era Of banking chaos. We have to-
lay a relic of it in the private bank in
which the depositor loans his money
10 the private banker without security
n3ad without interest. But most of u
inks are examined by the state or
sderal government to see that they are
Dnestly managed. This is to insure
se depositor. They are required by
~ to invest some capital in the bus
less SO as to margin the losses and
sure the depositor. The investors are
ZEN held liable for an equal amount
endDrsers so sls to doubly insure the
spositor. The whole scheme is to so
sure the safety of deposits as to
suse people to deposit all their spare
tnds In banks where the money can't
used by others. The new plan to
isess each bank for an insurance
md is merely an extension Of the
nmary purpose in government super
ssion Of banks. Its only innovation
les in the facts that it takes UP the
ankers' own clearing house plan of
standing together and makes it'll