Baxter Springs news. [volume] (Baxter Springs, Kan.) 1882-1919, 1908-03-12
DEPOSIT
!. INSURANCE.

NhsSebS @>>SSAN @A~AeANt ceJ - ssses
while Lyman ]. Cages statement
to a congressional committee that
he had, originally been against
guaranty of bank deposits, but
had changed. his mind and now
favors it, has had weight in Con-
gress; the strongest impression
that has been made on Congress
in behalf of guaranty of bank de-
posits. has been made by the ar.
guments of Alexander H. Revell,
the Chicago merchant. Mr.. Re-
veil has laid his arguments be-
fore Congress so lucidly, and has
met the contrary arguments with
so much force and fairness that
Wellman reports that already
he has many converts and follow
ers, and is sure to win more if he
continues his agitation. Senators
and Representatives, / find, are
now quoting what Mr.. Revell
says, some with full approval,
others in respectful, serious in
quiry. He has made a decided
impression"
Then what are Mr.. Revell's ar
guments? In the first place, he
points out that panics are finan-
cial, not industrial. They direct
ly concern banking. People simp.
ly become alarmed about the Sc
curity of their deposits and 60
pell NELL in a panicky crowd to
get them out before trouble oc-
ours. Sometimes there is no oc-
casion for panic, but panic is a
state of mind, and reason can not
reach it. Mr.. Revell makes the
point that the Comptroller or the
State Commissioner is bound BY
law. When the law is actually
violated he can do something.
but the reason the Chicago banks
got themselves in such excellent
condition last fall and this winter
was because the clearing house
banks got together and them
selves kept close watch of bank
ing methods, and they used their
moral influence, which was su-
preme, not merely to see that
laws. were obeyed, but that bank
ing was sound and conservative.
This is the merit, says Mr.. Re
veil, of the guaranty, or insur-
ance, plan advocated by him, a
compulsory plan, all the banks
being obliged to pay the iusur-
auce assessment on all deposits,
20 that all the bankers would
watch one another. when
bankers know" he says, that
the insurance fund would have to
meet all losses they would have a
vital interest in preventing bank
failures, and they would give
that advance information as to
unsound methods to the iuspec.
.tion department which would in
nearly all instances prevent such
failures as have occurred.
"The banks are the first to
know when one of their number
is straying from the beaten path
of conservative management. In
stead of putting the responsible
/ ty of watching against loss upon
depositors, who have no direct
means of knowing the inside dO-
ings of bankers, the guarantee
scheme would put the RESPONSE
bility upon bankers themselves,
who are the only ones who could
have inside knowledge of bank
ing methods and the sounduess
of loans. It would not, as now,
be left to them to be good, bat
they would be obliged to be good,
whether they wished to or not.
The guaranty plan is a plan of
prevention, not cure; II aims to
shut the stable doors before and
not after the horse Is gone.
II thus reach the proof Of TIE
|asssriion, already made, ? csa-
einaes Mr.. Revsll. that ny plan
wodld help to prevent panics.
a. stl-L-,I4 ~ fhsa IN fwn