Monroe City Democrat., 1908-10-08
GUARANTEED BANKS.
By William Jennings Bryan, Topeka, Kansas, August
II, 1908.

date not only does not advocate a COM
pulsory system, but specifically and en-
| phatically opposes It. He SAYS:
"The Democratic platform recommends
| tax upon national banks and upon
such state banks as may come In, In the
nature of enforced insurance to raise a
| any bank which falls"
And then he questions the right Of the
government to enact such law, saying:
How state banks can be included in
| is left In the twilight zone of state rights
and federalism so frequently dimming
the meaning and purpose of the promises
| of the platform. If they come in under
such system, they must necessarily be
| brought within the closest national con-
troll, and so they must really cease to be
state banks and become national banks" I"
HIS solicitude for the state bank will
hardly impress the country, for he Is
quite indifferent to states and their re-
| served rights when he deals with other
troll of those who want to legislate for
| the whole people rather than for the
few, it will not be difficult to frame a
law under which state banks can avail
Themselves Of the advantages of a fed
eral Saw guaranteeing the deposits of
national banks, just as it was easy in
Oklahoma to frame a law which permit
ted national banks to take advantage
L l
be easy to enact q federal law which will
permit national banks to avail them
selves OF state guaranty systems until
a national system can be secured. At
torney-General Bonaparte's ruling,
whether is correctly interprets the law
or not, would not bring such consterna-
tion as 1t does If the Republican candi-
| date favored a law allowing national
banks to take advantage Of state systems
for the protection of depositors, but Mr..
Tafts hostility to all guaranty sys-
tens is shown in the objection which
he offers:
'grhe proposition is to tax the honest
| and prudent banker to make up for the
dishonesty and imprudence of others.
No. one can foresee the burden which,
under this system. would be imposed
upon the sound and conservative bank
ers Of the country by this obligation to
! make good the losses caused by the
who would be enabled to secure deposits
| under such system on the faith Of the
| proposed insurance; as in its present
shape, the proposal would remove all
ing, and the chief, and, in the end,
probably the only benefit would accrue
to the speculatqr, who would be de-
lighted. to enter the banking business
when it was certain that he could enjoy
any profit that would accrue, while the
risk would have to be assumed by his
honest and hard-working fellow
He even pictures dire disaster and de-
/
exactly as the Democratic platform sug-
gests, 1t would bring the whole banking
system of the country down In ruin
| As an after thought, he suggests that
a voluntary system might be tolerated,
but as his objections to a compulsory
system apply just as well to a voluntary
all legislation which has for its object
the guaranty of depositors.
As Mr.. Taft's argument Is that pre-
sented by the big banks which put their
/ nCN n tNNy Nt1A lrv11f fa,-
of the depositors and the safety of the
/ community, 1t Is worth while to answer
the several propositions which he ad-
) vanceS.
/ Let US take the first sentence, that
| ''the honest and prudent banker would
be taxed to make up for the dishonesty
| true of all restrictions on banking?
Does not the honest and prudent banker
| under existing laws, suffer in order that
dsnoe fhe depositor III may be protected from the
| no banking laws at all, and banking
was done by private individuals, the
honest and prudent banker would save
the money that he now pays for enforced
examinations Of this bank, and he could
at times make interest on a part of the
money which he Is now required to keep
in his vault as q rigid reserve. But be-
| cause some bankers are not prudent,
| these laws place burden upon the good
a., as well as upon the bad, it being difficult
to distinguish the prudent banker from
the imprudent one until bank actually
fails.
In like manner It might be said that If
| all people were careful about fire, fire
insurance rates need not be as high as
higher rates than they should, because
| some are not careful. Life insurance
rates are higher than would be neces-
sary to cover the actual risk If every
| body took care of his health, and here,
| too, the cautious are burdened because
some are careless OF their health. All
| insurance Is open to the same objection,
and yet insurance of all forms Is grow
ing, and the insurance of depositors is
growing in popularity more rapidly than
any other form of insurance-and, I
may add. it yields the largest return on
| the investment.
Mr., Taft complains that mo one can
foresee the burden which, under this
system, would be imposed upon the
sound and conservative bankers. Of the
the losses caused by the reckless, specu-
lative and dishonest men," etc. We have
the past to guide US, and we have rea-
son to believe that the loss will be less
in the future than in the past, because
| when banks become mutually responsible
| for each others deposits they will be
sufficiently interested in each other to
favor better regulations and greater re-
| strictions.
What has Mr.. Taft done to protect de-
positors from recklessness and specula-
ton? While he refuses to protect depos-
law, which invites speculation and stock
jobbing. In declaring that the system
/ proposed by the Democrats would re-
in banking" Mr. Taft betrays an ig-
norance Of the subject, for the plan
does not propose the removal Of any
safeguards. In fact. it contemplates
| stricter regulations of the banks, and
Oklahoma has already made the banking
regulations stricter.
He declares that "the only benefit
would accrue to the speculator, who
would be delighted to enter the banking
business when 1t was certain that he
could enjoy any profit that would ac-
crue. while the risk would have to be
| assumed by his honest and hard-work-
ing fellow" The present banking law
requires that certain amount of capital
| shall be invested in the business, and
that law would still stand. To enter the
| banking business, therefore, a man
| would either have to have the capital
himself or secure the confidence of men
| who had the capital And this capital,
together with the 100 per cent liability,
| would be guaranty that the stockhold-
| ers would not Intentionally select care
less officials. Why would "speculator''
be delighted to enter the banking busi-
ness" under the guaranty system? He
| is not relieved from pecuniary obliga-
| ton, nor is he relieved from criminal
| liability. He would have nothing to gain
| by care!essness, nor would the stock
holders have anything to gain by indif-
ference.
The chief cause of bank failures is the