The Leon reporter. (Leon, Iowa) 1887-1930, 1908-09-10
BANK INSURANCE WINS VOTERS in THE WEST
Walter Weman Chicago Record Herald Says that O. Managers
in thesEast are Hunting for Counter Move.

II the tradesman, the farmer or the
salaried man wants an object lesson of
the value of deposit guarantee or in
surance, he finds it in the Oklahoma
system. Down east here they sheer at
everything that comes from Oklahoma.
1t il a joke. 1t is "rube," has hayseed
in it's hair, and is wild OF eye and alto
gether peculiar But the people of the
west are not so cynical. Oklahoma is
young and progressive and enterpriz-
ing. Perhaps Oklahoma has gone too
fsst, possibly has made mistakes. But
it is American; it is a part Of US, of our
own people, and is entitled to be judged
on merits, on performance. The Okla
homa law has been in operation about
seven months. Five hundred and fifty
banks are subject to the law, fifty of
them being national banks. Five hun
dred and fifty national banks arc out
side the system. The banks which
guarantee depositors have gained S4,-
100000 in deposits, while the banks
which do not guarantee have lost ST.
100000 in deposits. National banks are
now giving up their charters and talk
ing out state charters. In Kansas and
other adjoining states bankers say
money is leaving their institutions and
going to Oklahoma, where it is secured
by state law. This probably explains
why many western bankers favor the
adoption Of the Oklahoma system in
their own states.
To make the object lesson even more
vivid bank recently failed in Okla
homa. Within an hour the banking
commissioners were in charge, prepared
to pay every depositor in full, and
| starting prosecution of the officers of
the bank who violated the law. The
commissioners sent word to all de-
positors to come and get their money,
and Governor Haskell, of Oklahama,
told me the other day At Chicago that
instead of rushing to town in great
panic as soon as they heard the bank
had failed the depositors took things
very calmly. Farmer Jones had $1,000
in the bank, and when they telephoned
out to him to come in and get his money
he replied: "Too busy now with my
wheat. Be in some day next week."
In the presence of such facts as these
one need not be surprised at the popu-
larity of the new idea. Nor need one
feel surprised that the phjlosophic argu.
ments against it make small impression
upon the masses. All who have studied
this question know that the fundamental
weakness of the system Of enforced
insurance guarantee is responsibility
without power and temptation to i'm
prudent banking, since the reckless
banker can offer the same security az
the careful banker. To make all banks
pay assessments to meet all losses, anc
then give every banker free hand al
to methods, might in the end do fal
more harm than good. Judge Taft's
objections to the system were based
on this solid ground.
But the Oklahoma law does give power
along with responsibility. That is, il
throws safeguards and restrictions
around all banks. 1t makes it practic
able for the careful banker to watcf
and detect and report for discipline the
reckless banker. 1t limits the interest
that may be paid on deposits.
A great majority of the people of the
west evidently believe in this system
and see no reason why it should not be
extended to the entire country by fed.
eral laws. On the whole it is one O
the most interesting questions nov
before the American people.