Omaha daily bee., 1908-09-23

his operations and efforts 20 obtain bust
ness. Tho law enforced ~ II IS now bclns
enforced adds greatly to these difficulties
and supplies the means to expose and ex
pei them from the business. But the Rreat-
est impeachment such men meet with comes
from the depositors themselves; to a large
extent these make the successful and safe
banker by extending or Withdrawing their
confidence. Their fears and apprehensions
lead them to scrutinize closely the banks
to whom they entrust their earnings. The
banker favored with this confidence does
not dare practice any grossly irregular bus
mess methods or offer unreasonable induce
ments to obtain deposits. He does not dare
to engage in questionable or speculative
enterprises. All such things will become
known in due time and will lose him the
confidence OF his depositors and without
this confidence he cannot exist as a banker.
Mr.. Bryan's plan would change all this.
Banking upon the security Of the guaranty
which would give them a credit they could
never acquire upon their own merits. II
would be easy for Adventures to get bus
mess and It would be impossible to drive
them out, until a catastrophe occurred
which would destroy the business. Depos-
itors relying upon the guaranty would nat
urally put their money in banks which Of
fered the greatest inducement-they would
cease to scrutinize closely II they scruti-
nized at all. But II deposits did not come
fast enough in the ordinary way, such men
would find a way to increase their facili-
ties by the issue Of credit m
such as promissory notes and certificates
Of deposits. There would he practically no
limit to this kind OF expansion and thous-
ands of banks doing the same thing would
bring on an era OF speculation whose end
could only be ruin and desolation.
The practical effect Of the scheme and
its injustice and inequality can best be
shown by ar illustration.
The national banks forming the Omaha
Clearing House association. exclusive of
South Omaha, are all very old institutions.
One of them was among the first to be or
ganized under the national currency act,
and all have existed from twenty-five TO
forty years.
There has never been a national bank
failure in Omaha or a suspension Of any
kind unless the affair of last fall can be
so called. II a guaranty law similar to
that Of Oklahoma should become effective,
these banks would be required to put up
$3Sl.S6c, being l per cent on deposits of $685.
$4,000, and what for? Not to guarantee
thtl oNH utpOsllOIs, lot THESE are dlTeauy
sufficiently guaranteed by the safe and
conservative manner in which these banks
transact their business. This large sum
of money would be taken from these banks
and from the business community depend
ing upon them for the sole purpose of pay
ing losses incurred from another class Of
bankers operating in a community where
some speculation has run wild, such for
instance as the stock speculation in New
York last fall, and with which the Omaha
bankers have had no connection whatever.
Not only is this scheme originating in a
brain fertile in political expedients and is
sues unnecessary in the present condition
of banking, but 1t is full of dire potential
tiles for evil. And further than this it can
l think be plainly shown that this, the lat
est of Mr.. Bryan's propositions, il no
more in the interest of depositors than his
Is to l proposition was in the interest of
bi-metallism. He seeks only TO persuade
some depositors to believe in him to the
extent of their votes, just as he induced
thousands under the pretense of bi-metal-
lism to flock to his standard in 1895.
The scheme he puts up to depositors has
to the banker of experience the appear
ance of a stupendous gold brick PROPOSE
ton which the law should stamp out, in
stead of encouraging.
HENRY w. YATES.