Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1908-08-28
Bank euaran.ee Speech

Continued from page One)

WIG udnhlus business than to have
oceuase | prefer to have the bank
ing business done by the banks rath-
er than by the government, l urge
the guaranty of deposits as the cas-
lest solution of our difficulties.
There are only 10000 banks, while
there are 100000 depositors, and |
do not hesitate to declare that in
conflict between the two the deposi-
tors have prior claim to considera-
tons. If we estimate the average
number of stockholders of each bank
at seventy-five-and that is a lib
eDal estimate-the total number of
stockholders would only be a million
and a half, or one-tenth as many as
there are depositors. The stockhold-
er is not compelled to buy stock, viii.
the depositor is compelled to use
the banks, both for his own sake and
for the sake of the community, for
only by using the banks can he keep
his money part of the circulating
medium. The guaranty law, there
fore, brings the greatest good to
the greatest number, as well as to
those who have the greater equity
upon their side.
There is another reason why the
claim of tn deposition is superior to
the claim of the stakeholder. The
stakeholder has a voice in the selec-
ton of the bank officials; the de.
,positor has not. If any one must
lose, therefore, as the result of bad
management, it ought to be the stock
holder rather than the depositor. And
! venture to ask, if the bankers will
not trust each other why should moi
they expect the depositors to trust
the banks?
We are fortunate, however, in that
we are not compelled to choose be
tween justice to the depositor and
justice to the stakeholder, for as haI
been shown before, the plan which W
propose not only does justice to both
but brings advantage to both. Mor
than that, the plan which we propose
protects the banker-and It is hi
only protection-against the estab
lishment of a government bank, witt
indefinite encroachments upon thu
bankers business. Witch h guaran
teed bank established, government
savings banks would only be needed
in the towns and villages where Their
were no guaranteed banks.
If we had to chose between the in
terests of the bank and the interest!
.'of the community, we would be com
PEELED to protect the interests of thu
community first; but here, too, VT
are fortunate, for we are not driver
to this alternative. That which pro
tects the community protects thu
bank also, for when there are sever
al banks in the community, thu
failure of one often causes a run up
On the others, and the insolvency o.
One bank is such a menace to the
solvency of others that the solvent
banks often join together and assume
the liabilities of the insolvent on.
for their own protection. AS al
illustration Of this, l point to the &c
ton of the Chicago banks in assum
ing the liabilities of the walsh banks
at heavy loss to themselves. =.
= There is another advantage which
the guaranty of depositors brings to
the banks, it protects the reserves de
=, posted in other banks. During the
panic. last fall the reserves caused
the most of the trouble. The small
banks wanted to withdraw their re.
serves from the city banks, and the
big banks in the cities were not pre-.
2 pared to meet the strain. With de.
posts guaranteed there would be no
runs on local banks and no Sudden
withdrawal of reserves.
! have selected the capital of the
state of Kansas as the most appro.
pirate place for the delivery of a
speech upon this subject. because
your neighbor upon the south has
been a pioneer in this reform. Her
plan, as. you know has been such a
signal success that deposits have bee
drawn across the line from your state
Into Oklahoma. The alarm caused BY
this invasion Of your banking terri.
tory caused your governor to in.
clude in his call for special ses-
Sion a Recommendation of the pass.
age of a law similar to that of Ok.
lahoma When the legislature met
/. however, the influence of the large
banks was sufficient to prevent the
needed legislation, and your state
still suffers. The people Of Kansas
have had an object lesson; they
know the>necessity for a law guaran.