The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1908-09-27

WY bahh fH tuS hhiNtfltHh ~ ~ tHt
voluntary feature 81 The Kansas pro-
posal that makes the radical differ
encc between II and that of the demo-
cratic platform. II II entirely CON
ceiyable that banks III the same neigh
borhood and within the observation
Of each other may pro6tably and
safely accept and guarantee the se-
curity Of all for the benefit Of each,
especially when they can select their
partners.
"Onc of the great merits claimed
for the enforced guaranty Of deposits
Il that It viii prevent panics II Is
sufficient TO say that the plan pro.
posed cannot prevent panics. A panic
Is not stayed by the promise that
money will ultimately be forthcom-,
ing II can only be stayed BY the
production Of money itself When
financial siringency is on, II Ii the
cash the man needs and to say that
he will get il mex, week certainly does
not assist him. No one who has heard
that his bank was going TO fail will
delay in Immediately applying for his
money merely because he II assured
that At some time In the future he
will gt Il. Therefore. the system could
not stay the panics unless the funds
were large enough TO enable the banks
TO pay all OF their deposi,ors at the
time Of the run a tax Ii proportion
cd only TO the loss sustained after
liquidation and payment, SO that the
funds would be utterly inadequate TO
meet the demand for ready money
which would prevent a panic. The
total deposits OF the national banks
arc Ss,00O,000000. Onc-half Of one
per cent upon that, and this Is much
large percentage than proposed would
make fund OF $25.000,000. The
amount OF money that was needed TO
stay the late panic in New York
banks alone was many times this
sum. In other words, the cash need
cd to stay panic Il u impossible to-
accumulate in any other way except
by such emergency measure as Is
provided in the Aldrich.Vrecland bill
in which banks are given an oppor-
iunity upon proper security TO issue
$500,nD0.000 TO meet such an emer-
gcncy, and are prevented from over
issuing BY the imposition Of heavy tax
OF five per cent. The proposed guar
anty plan also invites the co-opera-
ton OF state banks and proposes that
they shall have an opportunity 70
come into the same guaranty, The
practical objections and difficulties do
not frighten Mr.. Bryan At all He pays
no attention 10 the difference between
state banks and national banks, or to
the fact that state banks are author
lied TO lend money on real estate
whereas the national banks are pre-
vented from so-doing The difference
from the business and The sieing up
OF assets between the systems II
radical. II would be impossible 10
bring in the state banks without
making the supervision OF them as
strict as on the national banks, and
II that supervision is TO be strict, il
must be under national auspices, and
therefore in effect they must become
national banks, This will entirely
destroy the system OF state banks and
will introduce into the national bank
ing trust companies and savings
banks.
"Mr. Bryan says that as the gov
ernment has the security Why should
not the individual depositor have the
security The government usually
has large fund. The law requires
that it exacts security for its depos-
its. II is so large a fund that the
banks can afford to give good secur-
ity to obtain il, II is to be observed,
however, that the security given to
the government is the security Of the
banks which get the deposits and not
the security of every other bank in
the community, II, as between the
banker and his depositor, the deposit
is OF sufficient benefit to make il an
object Of the bank 10 give security
that Is one thing; but 70 require every
other bank TO give security to that
dcpositor is an entirely different