The Chanute times. [volume] (Chanute, Kan.) 1897-1913, 1908-01-24

circumstances both have acted ad-
mirably. Statesmen and financiers
are everywhere seeking cause and
flexible system of finance, an in
crease of circulating medium through
otherwise unnecessary bond issues
and various other remedies have been
suggested by the savants, but with
remarkable rapidity the thinkers are
turning to the simple remedy known
as the depositors' guaranty fund
proposition, and partly to consider
the specific proposition you have
been assembled in extraordinary ses-
sion.
Depositors' Proposition.
1t is not primarily bankers
proposition. 1t is depositors'
proposition, because there are hun
dreds of depositors to every banker
and their interests are really para
mount. Banks are modern neces-
sity. They are essential not only to
modern commerce, but they touch
government at vital parts. 1t is there
fore a governmental problem. But
while the guaranteeing of deposits is
primarily a depositors and govern
mental proposition, it will contribute
immensely to the peace and happi-
ness. To strengthen and increase
this mutual confidence they have
called in their balances from reserve
centers, collectly closely outstanding
loans, made new loans sparingiy and
reluctantly, and piled up in their
vaults a reserve unprecedented in the
history of the state.
A depositors' guaranty law, 1t is
believed BY many of the ablest finan-
ciers, will give depositors perfect con
fidence in banks and permit the bank
ers to liber2te these boarded millions
into the CT lnnels of commerce, where
they are G eatly needed. When the
individual borrows money from a
bank he is properly required to give
satisfactory security for it. When he
loans his money to the bank, which
he does when he makes deposit,
why is he not also entitled to ample
security? He has the security, of
course, vi ich the character of the
bank and its managers and certain
provisions Of the law give him, but
this is not sufficient. This is not con-
sdered sufficient by the national gov
eminent which requires a deposit of
bonds to secure bank note circula-
tion this is not considered sufficient
by the state, which requires munich
pal bonds, dollar for dollar, to secure
all of it's deposits; this is not consid-
cred sufficient by the counties, which
take similar precautions to protect
themselves; and this does not satisfy
the intelligent depositor, neither does
it any longer satisfy the thoughtful
banker.
Confidence Not Currency.
Certainly what the country has
needed in this recent emergency has
been confidence and not currency.
There is plenty of money in the coun-
try, but it has been withdrawn from
legitimate channels of trade More
than 200 millions of dollars have been
withdrawn from the national banks
alone of the country, and the expert
encs of the rational banks has been
shared also by the state banks every
where. What we need, therefore, is
a policy that will bring all this money
out of hiding back into the banks
and into the channels of trade. to-
gether with the countless millions
which for similar reasons have al
ways been boarded by timid people.
believe the depositors' guaranty law
will do this.
Should congress pass a depositors'
guaranty law, it would, of course, re-
late only TO national banks, and in
Kansas would benefit only 200 of our
500 banks, while the proposed state
law would include national as well as
state banks. The chief opposition
among the bankers of this state, as
the correspondence of this Office will
show, has come from national bank
ers. This is indirectly a very strong
in favor of the proposed
legislation, for such law could give
the state banks an advantage unless |
it strengthened the confidence of de-
positors in them. Suppose congress !
should pass a law for the exclusive !
benefit Of national banks. In what |
would the state banks |
then find themselves? Is not cur
far more just and fair in
asmuch as it proposes to admit ma
tional as well as state banks to par
ticipata in its benefits? | have di-
rect information from the comptrol-
Ter. bearing date of January IS, that
the right OF national banks to parti-
cipate in a state guaranty law has
not been decided and that no ruling
Of this kind has been made by the
of the currency, and I
have received a long letter, under
date of January II, from ex-comp.
troiler Dawes, favoring this guaranty
1t is my desire that
both national and state banks shall
share the benefits.
Necs ssitY Demands.
The necessity for immediate action
in this matter. creating an emergency
alone justifying this extra session. in
addition to the financial consldera-
ions discussed above. is found in the