Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1908-08-29
ADVERTISING AGENTS:
OF ASSOCIATED PRESS
zz!&s 5|fh 6 IN
GUARANTEEING BANK DEPOSITS

The guaranteeing of bank deposits,
being urged by Mr.. Bryan in this
campaign, is at first consideration
appealing to the deposition, who is
thereby assured that, whatever may
happen to the financial institution
in which his money is deposited, his
losses will be made good from fund
collected from all the banks for the
insurance of all deposits. We do not
know that it is any more specious
than the original free silver propo-
sition, which proposed to double the
supply of money in the country by
legislating fifty cents into every dol
lar. But it is an attractive plan, and
the argument that thereby panics
would be forever prevented is allur-
ing. Mr.. Bryan is pushing it to the
front in his speeches, and this is we'll,
for it will bring about a careful
study of the whole qcestion, and out
Of that study we will arrive at, we
trust, a wise conclusion. ~
Bankers prosper when other peo-
pie prosper. They fail to prosper
when other industries lag, when
there is little demand for money for
the increase of business ventures,
when their securities are decreased
in value, and when there is general
depression. 1t is not true that banks
thrive upon the urgent necessities of
the people. They thrive upon legi-
innate demand for money and when
there are prompt and ready interest
payments.
So that the argument that panics
would forever be prevented and that
money would come out of all it's hid
ing places through compulsory in
surance Of bank deposits ought to
appeal to the bankers, for the reason
that their deposits would be largely
increased and their business aug
mented by the greater prosperity of
the country. They object to pooling
to a fund out of which their deposit
5ors will get no benefit, because safe
banks, well conducted, will not call
upon any insurance fund to pay los
SEES of depositors. They claim that
the insurance fund will go to pay the
depositors of carelessly managed
banks, speculative concerns, which,
by the system of insurance deposits,
will be placed on the same basis as
baTKs carefully and conservatively
managed. s
1t is claimed also by the leading
bankers of the country that under
the proposed system, merit and con-
seryatism in banking will be cast to
the winds. The methods of starting
ia bank are laid down by the law,
and persons complying with that law
cannot be kept out of the banking
business. If speculativelys inclined
persons can be insured as bankers
and obtain deposits on the basis OF
that insurance, the funds will natur-
ally be drained out Of the conserva-
tive banks and into the speculative
banks. For discrimination as to pro-
bity, industry and conservatism OF
management can be cast to the winds
Il by the depositor. The depositing OF
his money will be only a matter Of
convenience. since all banks are or
the same basis. Offers of tempting
interest rates and other concessions
to the depositor viii attract funds
and the quality of banking in the
country will go down and not up.
IT may be said that proper regu.
1ation OF banks will avoid speculation
and possibility of failure. We have
a system Of bank examinations now
that is as good as continuing sugges
ton can make 1t, and yet there arr
failures. There are no failures of The
sound and well managed concerns
But Of speculative concerns there ART
too many, and the insurance Of hanl
deposits would not change human
nature to prevent the violation Of tht
Law. Under the present system d
national banking. we feel safe il
saying that a disastrous failure i
impossible IT the law is obeyed. Whs
viii better obey the Iaw-the saft
banker whose life has been devoted
his business, ana who has the re-