The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1908-09-24

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security. The closing of the bank saved
the stockholders a greater loss which
they would otherwise have suffered. The
depositors were instantly paid, and it
cost the guarantee fund nothing what
ever, the losses of the bank falling upon
the banks own funds; moreover, the
business people of the town were not
disturbed.
Even the guaranteed fund is redepos-
tied with the contributing banks in Ok
lahoma, where they deposit with the
state statutory collaterals. "
The guarantee fund plan is beuefi.
cial to the state banks as follows:
First: 1t has increased their deposits
several million dollars, a considerable
part of which is money previously
boarded by people afraid of any bank.
Second. The depOsitor being guaran-
teed, the banker has no fear of run.
He therefore need not carry an unusu
ally large cash reserve. He may thus
make larger loans, accommodate more
borrowers and increase his earning pow.
! err.
Third: The guaranty plan gives the
banker greater peace of mind, prevents
his pressing weak creditor unduly, en-
courages him to extend accommodation
required by commerce. for he has no
fear of his frightened depositors calling
him TO sudden settlement,
Fourth: There being no danger of
financial panic under this system the
| banker would never fear the reserve cit
les refusing to deliver his reserve on de
maud.
Fifth Panics being thus avoided, the
stability of our National commerce
would not be disturbed and the banker
would be benefited both by stable line
of deposits and stable line of demand
for creditors of which the banker is the
purveyor.
Sixth: The bank deposits would be
| increased under this system from thirty
to forty per cent Every dollar in cur
rency in the national banking system
means ten dollars of deposits and ten
dollars Of bills receivable, rs appears
from the reports of the Comptroller of
the Currency for the last thirty years
The money in hiding or in boarding
outside of pocket change, is estimated
at between thirty and forty per cent of
the currency actually in bank, and if
this money were brought out of hoard
ing, as it would be by the guarantee plan
and digested by the banks, it would
mean an increase of deposits of about
thirty per cent, and an increase of bank
credits extended to commerce Of as
much more. This would mean renew
ed prosperity and what is Of more i'm
portance it would mean stability.
The theory that a corrupt banker
could profit by the guaranty fund has
no foundation. In Oklahoma only n
man Of good precedents, of good reputa
ton and of good association Is permitted
to have state charter. He is not per
mitted to borrow from his own bank nor
make excessive loans. Before the guar
anty fund could be injured by his fail
ure every dollar Of his own money, of
his directors money, and their double
liability must have been exhausted.
A big banker from Chicago has OPP.
posed the guarantee plan on the theory
that this plan would make the depositor
in small bank ~ safe ~ in big bank,
and would be more advantageous TO the
small bank than to the big bank. The
present line of deposits in big and little
banks alike is composed of depositors
each of whom Individually feels entire
ly safe now. And the guarantee plan
wonld not change these depositors 1t
would, however, prevent their making
run in the future But the guarantee
alike by bringing ont boarded funds, es.
pecialy the small banks The big banks
would benefit also because their addi-
tional funds would be redepOsited by
the small banks in the larger banks nc
Cording to their usual custom.
The ordinary depositor is influenced
by his environment, by his acquaintance
with the officers of bank, with its dir
ectors with its depostors, or some such
personal reasons The larger the bank
the greater these attractions, and the
more the bank will benefit.
The bankers of all the people in the
world should cordially favor the guar
antee plan.
The advantage to the ordinary citizen
whose cash is deposited is too obvious
TO need argument. There are fifteen
million depositors in the United States
and this safeguard and guarantee is
Of the greatest Importance to the bus
mess life Of the humble citizen. Why
should not the citizen depositor be safe2
1t costs the bank nothing Why should
he be left unprotected against the posi-
BILE folly or actual crime of an occasion
nj bank officer His protection il benc-
| fetal to the honest banks. Why should