The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-09-27


Government Guaranty.
We should not deny. to our people
throughout the country opportunity 20
make the small deposits with the security
CT the government promise TO pay prfn-
cipai and interest Such a system will add
greatly TO the money savings Of the coun-
Try;
this would interfere with their business
the experience IN 9th y countries has
shown TO be utterly unfounded. Where
savings banks are established, they pay
eminent will pay for deposits in the postal
savings banks. and confer PRIVILEGES on
their depositors which it would be i'm
possible TO grant under a government
system.
"A significant fact in connection with
the postal savings banks of those coun--
tries where they have been most success
ful is that one-third OF the depositors of
ors and two-thirds of them are working
men.
Prevention Of Panies.
Tho postal savings bank would per-
form most useful function in case "
panics, because they are government In
government behind them, and would at
tract the deposits of those small depos-
ltors whose runs In panic times upon the
banks produce such disastrous conse-
government office and the power OF the
government to redeposit that money IN
the national banks in the neighborhc cd
would furnish means of meeting an ex-
igency that no other system proposed has
thus far offered.
This postal savings bank system, how.
ever. does not meet the unqualified ap-
prevail OF the Democratic party. 1t has
not the vote-catchins quality and involves
only the cld-fas htoned gradual movement
toward better things by MEANS of Industry
and thrift and saving. The party under
us present leadership must have some
at the cost of the honest and the indus
trious. The Democratic platform pledges
the party TO the support of a system by
which all the national banks Of the coun-
try are required to guarantee the depos-
its to the depositors IN every bank, and
this guaranty is to be performed by a
tax upon each bank in proportion to It's
deposits, the proceeds OF the tax to con-
stitute fund from which the depositors
of any falling bank are to be paid: and
II the amount of the tax Ii not suffi-
cient to raise the fund required, then II
Is to be raised by subsequent assessment
on all the banks of the country, and state
banks are to be allowed to come in and
get the benefit of the same guaranty
under conditions to be imposed by law.
While the Democratic platform does rot
from the fact that the precedent in okla
homa is relied upon, that the provisions
are to be like the Oklahoma law. and these
are as above stated.
National Bank Limitations.
mo one can dispute the Importance. of
making the deposits. of every national
bank as secure as possible, provided the
the evil to-be cured. The government
has imposed certains limitations upon ma
tional banks whichg have already tended
to reduce the losses of depositors.
THE result has been ito iptroduceainto
national banksaa class of men of high
character and great business and bank
ing ability. and the losses in the last for
ty years TO depositors in national banks
have been reduced TO an average annual
loss of .one-twenty-sixth of l per cent
OF total deposits. If the loss, even
though small could be ay-Slded. 1t would
be of great benefit and should be brought
about. for, while the percentage is small,
the individuals upon whom the loss falls
may be heavy sufferers. The question is
whether we are to bring about an avoid
ance of this loss by the proposed Demo
cratic remedy, or In more conservative
way by perfecting the examination OF
banks and by rigid prosecution of all who
violate the banking laws.
Question of Socialism.
|. The remedy proposed xby Ms. Bryan
for the negligence. carelessness. lack OF
confidence or dishonesty of the failing
banker. Itstakes from one man without
| fault on his part money to pay for the
default of another. That is socialistic in
the extreme and so violates all equitable
principles that the remedy should be
condemned for this reason.
To say. as Mr.. Bryan does. that the
postal-s savings bank system is more So
ciaistic than this is to give a curious
definition TO socialism. Postal savings
| banks take no mans money to make VI
| for the default of another. 1t merely
i -
not and cannot be discharged by private
enterprises. Whereas the enforced guar
| apty plan takes out of one mans pocket
engaged in the business of banking mon.
| ey to pay for another mans default. That
| is pure socialism.
Burden Of Expense.
Mr.. Bryan suggests the expense con-
nected with the examination OF banks i'm
poses a burden on one man for the de-
whatever between the reasonable require
ments for the examination of all banks
and the taking out of one mans pockets
money to pay for the fault OF another
IL is u reasonable imposition upon al
banks that their accounts should be ex-
amined. and that their methods of doing
business should be constantly under pub
\ lie supervision. and 1t is unreasonable tc
make the pro rata cost of general bank
examination a precedent for taking mon
ey out OF one mans pocket for another
mans default.
1T has been shown that In the state
of Connecticut that II this system had
been in force during the last ten years
and the tag had been only one-eighth OF
l per cent, more than $4.00o,000 would have
been paid out and but $4,000 would have
been received. This illustrates the un-
| just, inequitable and socialistic charac-
ter of a compulsory system most COM
pletely.
National Banking Act.
Now let us pass the socialistic and In
equitable feature of this system and come
| to the question whether ii will really
help matters. 1t is permissible under the
national banking act for banks to organ
ize with a capital of $4,000. The secur-
ity which banks offer the depositors de-
ponds upon the amount of capital, the
amount of surplus, and public confidence
| in the officers OF the institution. Under
the proposed system depostors in banl
with a capital of $4,000 and no surplus
and with officers OF little experience and
indifferent reputation can offer the pub.
lie exactly the same security for the pay
fnent of deposits as a bank with CAPT.
tai of 100000 surplus of $3.50 900 and with
officers known TO be honest and able
| in 70 ~