Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1908-09-17

been replaced with a set of incom
| petents.
Moreover as stated in special to
the New York Tribune of August "a
Oklahoma bankers have awakened Ia
the fact that the bank deposit guar.
anty law as it operates, has glar-
ing defect, which in times of panic
would make it useless. At the present
time the guaranty fund, as rapidly as
1t is collected by the state treasurer,
is being invested by the state officials
In state warrants which draw 3 per
cent interest. The money doubtless is
invested in improvements" unless
the politicians find some personal use
for it. This is well enough in fair
weather, but who will give money
for Oklahoma per cents when it
storms?
But, some will say, no panic is ex-
pected. Panic was the very condi-
ton that the law was made to prevent.
NO law can prevent panic for the
simple reason that no law can make
the fools wise
superficial observers, such as Mr.
Bryan, are liable to mistake the symp-
toms for the disease A panic is pre-
c1pltated, they say, by tight money
and want of confidence in the banks
See to it that money is always plenty
and that the confidence in the banks
cannot be shaken and no panic is pos
sible.
AS quick pulse and high tempera
ture, so tight money and distrust of
the banks are only a couple Of out
ward symptoms, but the disease lies
much deeper. The disease is. that
there are too many who owe more
than they can pay or, as Commodore
Vanderbilt put it, too many = fools
who have bought what they can't pay
for and sold what they haven't got
Make money abundant and easy to
get and this state Of affairs is sure
to follow. All this now is brought
about by the state guaranty of bank
deposits. Since character and skill
are no longer required to establish a
banks credit, the banks try to at
tract deposits by raising the rate of
interest paid on them. They must
earn interest to be able to pay interest
and SO they make loans on unsatisfac-
tory security. Easy money encourages
speculation; the price of all sorts of
property scars aloft; everybody is get
ting rich and everybody is head and
ears in debt; by and by the property
held for rise, no longer earns suffi-
cen profit, if any profit at all, to coy
er the interest on the money borrow
ed there on; default is made in the
payment of interest the principal is
called and the panic is on. Every
buy, the prices tumble and the bottom
drops out.
What can legislation do to avert
such madness? 1t Is not tight money. |
but holding property at unremunera-
tive prices that precipitated panic.
Last fall the premium on clearing
house certificates in Chicago and
New York. for current funds, never
rose above 8 per sent That would
have ruined nobody. The man who
could command clearing house GER
could take care of himself, |
and on the pledge of satisfactory col
lateral these could be obtained. But
he most solid securities ran down TO |
~ anu even ~ per cent OF the quota |
ions at which they had been recent
y bought and on the basis where. the
banks had advanced money on them.
Those which were not first class were
lnsalable. There was the rub.
All that breeds carelessness in
money matters, breeds panic and the
state guaranty of bank deposits will
cad to panic with the pitiless Sc
luence Of cause and effect
John Nollen, Pella, Ian the Des
Moines Register and Leader.