Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1908-08-24
KSFLAWS|N
GUARANTY
SCHEME
HARSH CRITICISM FOR
BRYAN'S PET PROJECT
Postmaster General Meyer
Says Under Proposed Law
Honest Bankers Would Pay
Losses of UnScrupuIouS.

LOSSES OF UnSCfupul0uS,
IBy Morning Journal sDeeial Leased wIreI
Hot Springs. Va, Aug. 23.-Post-
master General Meyer, who is here
comforting with Judge Taft, today ex-
pressed himself in an interview on
the general political situation and the
democratic proposition for guarantee
ing national bank deposits, declaring
the latter to be zone step further to-
ward socialism"
There are, he said thousands of
voters in every state who do not get
out to the polls unless they feel there
Is a real necessity for them to vote
Therefore, If interest is not sufficient
ly aroused and the Importance of this
coming election fully appreciated. sew
eral states may be lost by default.
"In the present campaign the demo-
cratic candidate is bringing forward q
short cut and plausible panacea
against panics, the guaranteeing of de-
posits in national banks. At first sight
this would appear to be a sort of in
surance. Insurance, however, is a
contract whereby one party voIuntar-
lily pays to another party a fixed sum
for indemnity against loss and not to
exceed an agreed amount.
"The guaranteeing proposition COM
pels by law the banks to pay unknown
sums for future losses and to an un-
known amount and subject to un-
known risks over which they have no
control.
THE democratic platform pledges
the party to compulsory guaranteeing
of deposits for all national banks,
with its provisions available for all
state financial institutions desiring to
use them
This guaranteeing Of deposits by all
national banks would mean nothing
less than that the conservative and
honestly managed banks would have
to pay the debts of banks which have
been badly and dishonesty managed.
Under this system thers would be
nothing to prevent a not overscrupul-
ous banking officer in the competition
of obtaining deposits from going to
parties and offering them six per cent
for their deposits, claiming that they
had no risk as deposits are guaran-
teed. The bank in turn would have
to make investments which would in
volve great risks in order to make any
money.
"If successful this would tend to in
crease speculation which is one of the
misfortunes of the present day, with
the wild cat schemes and high finance
that have been so much in evidence
within the last year
1.-THE proposed system would result in
revolutlonizlng the methods of nation
al banks and state banks and trust
companies would be forced to enter
under the same arrangements in order
to have their deposits guaranteed,
which would be an injustice to the ma
tional banks as the stockholders in
the national banks are subject to dou-
bic liability for deposits which is not
true of state banks.
THE deposits in savings banks
throughout the country amo NJ to
about three and a half millions What
greater injustice can be imagine than
these deposits, which are ma le by
wage earners and individuals OF very
moderate means should be taxed in
order to pay for the losses of misman-
aged banks.
"In New England and New York
there are no stockholders in the saw
ings banks. All the money earned is
paid to the depositors. Therefore II
would result in a direct tax on the de-
pOsitors and would decrease the re-
turns which are coming to them.
'As Mr. Taft has said in his speech
Of acceptance, the republican party
prefers the postal savings banks, as a
method tried and found to be eff
fective. and as reaching many more
people now without banking facilities
than the new system proposed
'Tn the postal savings banks the
deposits are guaranteed by the gov
ernment, because the government has
received the deposits and made itself
responsible. They are led back into
the channels of trade by depositing
them in the national banks In the dis
the postoffice.
'The system Of guaranteeing de-
posits in national banks as proposed
by the democratic party Is one steT
farther toward socialism"
Charles p. Magoon, provisional gov
neror of Cuba, talked with Mr.. Taft
re regrrding conditions in Cuba.
That the people of Cuba are quail
fed for self government Is the positive
assertion Of Gov. Magoon. He said thG
complicated election law which has
Just been put into practical operation
In the island was a rigid but success.
full test Of Cuban intelligence. The
Cuban people, he indicated. are heart
ily in favor of government ownership
Of public utilities They now own the
telegraph lines and the test of the
popular will which has just beer
made on the question of private con
cessions for telephone lines, he be
lieves has demonstrated their desire
for government ownership. The tes
referred to was made at the sugges'
ton of President Roosevelt and con.
sisted In the submission to the eighty
two provdences of the draft Of Law
which, II approved and enacted, woulf
have resulted. according TO Governor
Magoon. In the telephone business OF
the island going into the hands Of thu