Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1908-10-23
MONEY IN TaE BANK. =

Under the above caption Gen. a
B. Nettleton, former minnesota
who was assistant secretary Of tn.
treasury under WINDOW, contributes
to the Chicago Evening News {
luminous and convincing discussion Of
the guaranty of bank deposits il
which he protests against the attempt
to- make the proposition campaign
issue, to rise or fall according to the
result of the campaign. A lifelong
republican, he says that no one has
been authorized to array the repub.
lican party or republican voters
against the plan.
Says Gen. Nettleton: "Bank de.
posit guaranty is primarily and
centrally intended, not to protect a
relatively few bank depositors against
the possible fractional loss which
statistics indicate, but, by protecting
them at slight cost, to protect the
entire community, including the
banks themselves, against the devastat.
ing and enduring evils of recurrent
bank and business panics. These al.
ways originate in the sudden fear OF
depoeitors that their bank deposits are
not safe and the reciprocal panic fear
of banks that their own solvency is
about to be endangered through an
excessive withdrawal of money by
scared deposltors. The guaranty pro.
position is justifiable and important
just In proportion to its practical
efficacy in accomplishing this alb.
solutely Unreasonable benefit to all
interests and all classes. Much of the
current adverse comment misconceives
the real purpose of any such measure,
and is directed against imaginary
impossible projects. Straw men are
being numerically pommelled.
Taking up the chief arguments
against the plan, Gen. Nett]eton dis
cusses the objection that the scheme
would take money from one bank to
pay the default of another which it
does not control. As to this, ''our
20, 900 banks, being mob of detached
and unrelated units, and not a COM
munity OF mutually helpful nelghbors,
have disastrously failed to discharge
the functions and perform the service
for which they We're created. If act
ing in harmony, on some workable
plan of cooperation, they would
themselves be virtually impregnable !;
~ 10 VAO O1A 0GOA VI CA0 "0dhuCoS VI
the separate twlg and the unbreakable
strength of the bound fagot. Our
mass of dissaclated banks, instead of
being in times of financial disturbance
the powerful bulwark to the public
which they might and should be, in
fact become an active menace to the
community by suddenly becoming the
breeders of panic and revulsion. The
banks depend for their solvency on a
confidence existing between
themselves and their depositors, and
on this confidence the fabric of bust
ness depends. When that confidence
is displaced by reciprocal. fear, panic
and deperression result
Following out this logical and
line of reasoning, Gen.
Nettleton comes to the conclusion that
a reasonable and pr actical guaranty
plan would tend strongly to preserve
that mutual confidence which is so
essential to industrial security. w. j.
Bryan and the democratic party have
also come to that conclusion; the re-
publican party seems to have definitely
determined that the plan would be too
irritating to the bankers, so it opposes
it. That situation will have lot to
do with determining the presidential
choice OF many voters.