Morgan County republican. (Versailles, Mo.) 1906-1914, 1908-10-01
MONEY IN THE BANK.
How Depositors Arc Secured
Against Loss Of FUnds.
A Careful Student Of Finance Writes
About Banking Methods
and Principles.
(From the Chicago News.)

III tuC ,Hl'uBO aN'"o')
1t IL held by advocates Of the guar
anty Of bank deposits that banking Is
a ouasi.public business and therefore
that the State should have charge over
the banks in the interests Of the people.
Grant this but that Is no reason for
forcing one bnnk to guarantee the de-
positors in another bank.
How Ii II with railways? The State
controls the railways, and even claims
the right to fix the rates charged. So
with banks; the State eYacts reports,
governs Investments, and even eStab.
fishes usury laws. which fix the maxi.
mum rates Of interest. But 1t would
never occur to a reasonable man to
obllge one railway to pay damages to n
traveller who met an injury due 10 cal re-
lessness on another railway under
wholly different management. But that
is exactly what the guaranty OF bank
deposits means. It means that one well
managed, careful, small country bank
shall be called on to help pay the losses
Of depOsitors In a large speculative
Wall street bank, and yet the former
has no control whatever over the latter.
The recent panic scared some depOs-
ItOrs, and they wish absolute safety In
the future. That is what Is wanted,
even though they do not altogether
know whether guaranty ~ deposits Is
the right thing or not. Very we'll ; If
n drpo~itOr wishes absolut" security he
can find it by drpositing in a safety
vault.
"Oh," says the d"posltor. ~ want
som" little interest on my deposit, and
the right to draw checks, and yet get
absolute security, too" In short, he
wishes the privileges granted by II com
m"r"laI bank.
THAT is, the bank gives in return for
the deposits: % A checking %ar"ount,
hy which he can make payments with
Uit risk Of carrying money about ca
usually interest on average" deposits;
60 the collection Of cheeks and drafts
on distant cities; a. bookkeeping Of
the account without expense, and 90
the chance TO borrow from the bank
where the deposits mr." made. In other
words, the public has chosen agHimS,
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can give It.
~ the very fact Of being a CONNER
rInl Lrrk nm itgtfiuiiru utIGI loan li1
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IT ~" iilulh h"irSIt"r Wishes 10 get
a' III" center 81 the w'ip." question OF
~" safety "t Ms deposits ~ Il '"lIiIh'F
"iai h'tnn, let h'!h ""h"'h'r"'" AL ms
criticism, argument ANA time on lhr
means Of inspecting bank loans ANA or
preventing doubtful or speculative op'
eratipus by Danhs.
Yet, when small ncpoSi'ors zee the
national and state governments exact
bonds as security for deposits lhey
wonder why they should not have equal
protection.
There are two reasons why public
End private deposits should have differ.
cut treatment: First, public deposits
are more valuable to a bank, because
they are called upon usually at regular
md foreseen dates and thus a larger
percentage can be loaned during the in
~tcrvaIs than IL the case with private
dcposIts subject to daily checking. In
addition, it should be remembered that
public moneys are deposited by officials
who mr.. undrr bond to account for ev,