The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-16
MESSAGE IS READ.
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any proposed amendments or changes
in this new, and as yet untried, sys-
tenn of taxation? Fourteen states have
state tax commissions very similar to
ours, viz: Alabama, Connecticut In
diana, Maine, Maryland, Massachus-
etts, Michigan, New Jersey, New York,
North Carolina, Tennessee, Vermont,
West Virginia, and Wisconsin. Several
other states manage taxation matters
through special commissions. Kansas
has taken position with the most
advanced states on this subject, and
1 am sure it will be your pleasure to
strengthen this splendid law.
Depositors' Guaranty Fund.
The events of the last few months
throughout the entire country have
emphasized the need of some banking
legislation that in times like these
shall inspire increased confidence in
depositors and prevent the unneces-
sary boarding of money by banker and
people alike. The so-called panic which
has disturbed business conditions in
every state in the Union has been a
bankers panic more than a peoples
panic Apparently they have had less
confidence in the people than the peo-
pie have had in them, and yet under
all the circumstances both have acted
admirably. An anomalous financial
condition exists in nation and in state.
With an abundance of money in the
country, with the products Of mine and
farm undiminished, with all the ele-
ments of unparalleled prosperity
Astounding on every hand, with no real
cause for it except the fictions of fin
ance, there is an unnatural and unnec-
essary depression of business. States
men and fnanciers are everywhere
seeking cause and cure An asset cur
rency, more flexible system of fin
ance, an increase of circulating medi-
UNI through otherwise unnecessary
bond issues, and various other rene
dies, have been suggested by the
savants, but with remarkable rapidity
the thinkers are turning to the sim
guaranty fund proposition, and partly
to consider this specific proposition
you have been assembled to extraor-
binary session.
1t is not primarily a bankers prop
osition. 1t is a depositorS PROPOSE
ton. because there are hundreds of
depos1tors to every banker, and their
interests are really paramount. Banks
are a modern necessity. They are es-
sential not only to modern commerce,
but they touch government at vital
points. Among the gravest dangers
of present conditions. when bankers
and people alike are boarding money,
is the danger of a wave of crime.
Such times multiply crooks and con-
tribute to robberies and murders,
making money and life alike inse-
cure. 1t is therefore a governmental
problem. But while the guaranteeing
of deposits is primarily a depositors'
and governmental proposition, it will
contribute immensely to the peace
and happiness and ultimate prosper
ity of the bankers as well. They
have learned in recent months, better
than ever before. 1 think, the vital
Importance to them of the confidence
of their depositors in the safety of
their deposits. To strengthen and in
crease this mutual confidence they
have called in their balances from
reserve centers, collected closely out
standing loans, made new loans spar
ingly and reluctantly, and piled up in
their vaults a reserve unprecedented
in the history of the state. This is
reassuring to depositors and has
largely restored confidence, but 1t is
an abnormal condition and can only
be continued to the serious detriment
of all manufacturing, agricultural
and large commercial interests. A de-
positors' guaranty law, it is believed
by many of the ablest financiers, will
give depositors perfect confidence in
banks and permit the bankers to lib
crate these boarded millions into the
are greatly needed. This guaranty
proposition is simple and funda-
mental one. When the individual
borrows money from a bank he Is
properly required to give satisfac-
tory security for it. When he loans
his money to the bank, which he does
| when he makes a deposit why is he
not also entitled to ample security :?
He has the security, of course, which
the character of the bank and its
managers and certain provisions of
the law give him, but this is not suf-
ficient. This is not considered suf-
ficient by the national government,
which requires a deposit of bonds to
secure bank note circulation; this Is
not considered sufficient by the state,
which requires municipal bonds, dol
lar for dollar, to secure all of its de-
| posts: this is not considered sufff-
cient by the counties, which take SIM
| liar precautions to protect themselves,
and this does not satisfy the 1ntell1-
gent depositor, neither does 1t any
| longer satisfy the thoughtful banker,
as the great mass Of letters and tele-
grams now in my possession from the
| bankers of Kansas asking for a de-
positors' guaranty law abundantly
proves.
Need Confidence Not Money.
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
the legitimate channels of trade.
More than 200 millions of dollars
have been withdrawn from the ma
tiona1 banks alone of the country and
the experience of the national banks
has been shared also by the state
banks everywhere 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 together with the countless
!
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