The daily sentinel., 1908-08-28
BANKS SHOULD PROTECT
DEP0SIT0RS FROM LOSS
Last g Topeka Before Vast Audience William Bryan Most Convincing
Manner Showed Why the Bank Deposor Should Have More Protection
From Loss Than the Present Laws Troublesome Startling
Questions Asked Mr. Taft and the Republican Party

fact that in order to prevent with
drawals, the unsecured banks, in
some instances, offered higher rate
of interest than the secured banks
were permitted to pay; and ii must
be remembered also that the banks
which suffered a loss of deposits were
ali national banks. And to make it
certain that the difference was caus-
ed by the guaranty law, the secured
national banks gained, while the
unsecured banks lost. While the de-
posits were increasing in the guar
anteed banks of Oklahoma they were
failing in the state banks and trust
companies of KansaS-the decrease
being 81 ,153 3,026.27 between March
31st and June 18th.
mo amount of criticism of the
timid depositor can change the facts;
the people who deposit money want
more security than the laws at pres
ent give them. They will change
banks to get more security, and, il
necessary, they Will send their money
| to another state.
''For many years efforts have been
made in Congress and in the various
states to secure II law guaranteeing
deposits, but in the influence of the
great banking institutions has been
sufficient to prevent action. Last
fall, however, when the bnuIks by II
concerted action suspended payments
on checks, the depositOrs were every
where brought to II realization of the
fact that their deposits are in fact
loans, payable on demand under or
dinary circumstances, but payable
at the will of the bank in emergen-
cies. The depOsitors suffered con-
siderable loss during the suspension
of payments, and they have not for
gotten the lesson which they then
learned. The Democratic party, be-
ing more free than the Republican
party to respond to the needs of the
masses of the people, inserted the fol-
lowing plank in its national. plat
form:
We pledge ourselves to legisla-
tion by which the national banks
shall be required to establish a guar
anty fund for the prompt payment
of the depositors of any insolvent ma
tional bank, under an equitable sys-
tenn which shall be available to all
state banking institutions wishing TO
use it
This principle has been applied
in Oklahoma and the results have
been very satisfactory. The average
annual loss to depositors in national
banks during the last forty years has
been less than one-tenth of one per
cent of the deposits, and the loss to
the fund in Oklahoma under better
regulations and restrictions has been
absolutely nothing during the six
months in which the law has been in
operation
The Republican platform is silent
on the subject, and the Republican
candidate not only does not advocate
compulsory, but specifically and
emphatically opposes it. He says:
The Democratic platform recon-
mends tax upon national banks and
upon such state banks as may come
in. in the nature of enforced insur-
ance to raise a guaranty fund to pay
the depositors of any bank which
fails
and then he questions the right of
the government to enact such a law,
Saying:
How state banks can be include d
in such scheme under the constitu-
tion is left in the twilight zone of
state rights and federalism SO infre-
quently dimming the meaning and
purpose of the promises of the plat
form. If they come in under such a
system, they must necessarily be
brought within the closest national
cease to be state banks and become
national banks
His solicitude for the state bank
will hardly impress the country for
he is quite Indifferent to states and
their reserved rights when he deals
with other subjects. When congress
is in the control of those who want
to legislate for the whole people
rather than for the few, it will not be
difficult to frame a law under which
state banks can avail themselves of
i hn adu MT nf q a T.
anteeing the deposits of national
banks just as it was easy in Okla
homa to frame law which permitted
national banks to take advantage of
the state guaranty system. 1t will
also be easy to enact federal law
which will permit national banks to
avail themselves of state guaranty
systems until national system can
be secured. Attorney General Bona
parties ruling, whether it correctly
interprets the law or not, would not
bring such CONSERVATION as 1t does
If the Republican candidate favored
law allowing national banks to take
advantage of state systems for the
protection of depositors. but Mr..
Taft's hostility to all guaranty sys-
TENS is shown in the objection which
he offers:
he proposition is to tax the hon
est and prudent banker to make up
for the dishonesty and imprudence
of others. No one can forsee the
burden which under this system
would be imposed upon the sound
country by this obligatshrdleutaoin
and conservative bankers of the
country by this obligation to make
good the losses caused by the reclS-
less speculative and dishonest men
who would be enabled to secure de
posits under such a system on the
faith of the proposed insurance; as