The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1908-10-03
Guarantee of Deposits
Would Restore Good Times
Senator Owen of Oklahoma
Issues Strong Statement
In Favor of Democratic
Plan.


In Favor of Democratic
Plan.
CHICAGO, Oct. 3.-United States
Ssnator Robert L. Owens of Olxlaho-
ma, stopped over in Chicago on his re-
turn TO Oklahoma from Colorado,
where he has been for the past month.
Senator Owen thinks Colorado will en-
list as a democratic state this year.
Before departing for Oklahoma to take
part in the campaign he made some
interesting suggestions relative to the
operation and effect of the bank guar
anty law of Oklahoma. 1t will be- re-
nembered that he vigorously present
ID in the United States senate the pro-
position to guarantee the deposits of
the national banks of the United
States He favors guarantee fund
to be composed of the present tax on
national bank circulation which -
says is far more than sufficient
Senator Owen has been in the bank
ing business for IS years and his opin-
ion is from the bankers IN view
point
He said: 'The Oklahom- banking
law does not provide for q e guar
antea II does not impose an unlimited
liability on the banks. 1t only provides
a bankers guarantee fund equal to
the sum of one per cent of the, average
annual deposits of the state banks.
From this fund is paid instantly the
depositors of any insolvent state
failure since the state was established.
In this case the officers of the state
bank were borrowing it's funds without
security The closing of the bank
saved the stockholders a greater loss
which they would otherwise have suf-
fered. The depositors were instantly
paid, and it cost the guaranty fund
nothing whatever, the losses of the
bank falling upon the banks own
funds; moreover the business people
Of the town were not disturbed.
Even the guaranty fund is rede-
posted with the contributing banks
in Oklahoma where they deposit with
the state statutory collaterals.'
The guarantee fund plan is bene-
fical to the state banks as follows:
First: 1t has increased their de-
posits several million dollars, a con-
yiously boarded by people afraid of
any bank.
No Fear of a Run.
Second: The depositor being guar
anteed, the banker has no fear of
run He therefore need not carry an
JlN-
thus make larger loans, accommodate
more borrowers and increase his earn
ing power
Third: The guaranty plan gives
the banker greater peace of mind, pre-
vents his pressing a weak creditor un
duly, encourages him to extend ac-
commodation required by commerce.
Ior he has no fear of his frightened
depositors calling him to sudden set
uament
Fourth: There being no danger of
nnanclal panic under this system the
hanker would never fear the reserve
cities refusing to deliver his reserve
on demand
Fifth: Panics being thus avoided
the stability of our national COM
banker would be benefited both by a
stable line of deposits and a stable line
~ demand for credits, of which the
banker Is the purveyor
sixth: The bank deposits would be
increased under this system from
Wrty to forty per cent. Every dollar
Ii currency in the national banking
system means ten dollars of deposits
ana ten dollars of bills receivable as
appears from the reports of the comp
uoher OF the currency for the last
NHIty years. The money in hiding or
al hoarding, outside Of pocket change.
estimated at between thirty and for
per cent of the currency actually
Odnk, and If this money were
S''ught out of boarding, as it would
&c oy the guaranty plan, and digested
v the banks. it would mean an in
1ease of deposits of about thirty per
u1 and an increase of bank credits
attended 70 commerce of as much
1SoFe This would mean renewed
mosperity and what is of more i'm
''ance 1t would mean stability.
corrupt Banker Cannot Profit.
me theory that a corrupt banker
io profit by the guaranty fund has
foundation. In Oklahoma only
,.., i o' good precedents. Of good repu-
ms.. on and Of good association is per-
'eo to have a state charter. He IS
permitted to borrow from his own
,o nor make excessive loans Be-
The guaranty fund could be in
n. o by his failure every dollar of
as own money. of his directors
ha, and their double liability must
-. been exhausted.
n,sas banker from Chicago has op-
o,v me guarantees plan on the the
dsnoa..a' a' this plan would make the
aM. IN small bank as safe as in
srsnk, oank, and would be more advan-
~~s 20 the small bank than to the