The Idaho scimitar. [volume] (Boise, Idaho) 1907-1908, 1908-03-07
THE IDAHO SCIMITAR.

to receive an invitation from the Republican egis-
lature of Ohio to and address that legislature
guaranteed bank. Possibly, | was invited be-
some fourteen years ago | tried to secure the
enactment of such a law by Congress- We had a
failure in town and many poor people suffered
the loss of their savings and the hardsh1pS visited
upon our community caused such cry OF distress,
that someone came to mel wish L could remember
his name-and suggested a guarantee fund.- and
introduced in Congress bill that provided for the
collection of small tax each year until guarantee
fund was provided The bill provided that when a
bank failed, the comptroller should from this fund
pay every deposition immediately that there would
be interruption of business to the community
and no loss to the depostor, and then proceed to
collect the assets of the bank and reimburse the
fund as far as the assets would go.
Now that was some thirteen or fourteen years ago.
What the objection raised? That if all the banks
good, the big banks would not have any adj
should all be unsecured that the big banks might
have advantage the little banks. Where is
the patriotism that we have been hearing about in
fnanciers? Do they insist upon system that re-
qures that depostor shall have his interests jeop-
ardized and that the community shall ,uer that the
big banks may have advantage over the little
banks?
went out to Nebraska and got that bill introduced
there | thought, surely if not have it in the
United States, we can have it in Nebraska. G4augh-
ter.) But when the bill came up there was lobby
of national bankers to oppose it. "Why,' they said
If state banks are safe people will not deposit in
ton now? Mr.. Forgan, the head of one of the
largest banks in Chicago, stated his objection
that it would make all banks (Laughter)
What an objection He said that under such sys-
tenn, you could just step in any bank and deposit
your money! That would be awful! daughter ask
you this question, my friends, must we leave the de-
positor helpless? Must leave the community
helpless rather than have all banks secure? What is
important than have all banks secure? What
is important than the security of the depostor?
Why not look at this question once from the stand
point of eighty millions of people who have lost
hundreds of millions of dollars in this particular
crisis that they get back? Is that not
sufficient reason for different plan, shall sit
back and say mo, it would not not do to make all
banks secure, for then the big banks would not have
any advantage the little banks The big banks
will still have advantage the little bank 1t
does not need to rest upon the insecurity of all The
fact that it has large capital and surplus enables it
to loan more to one individual than the small banks
can. A bank can only loan one-tenth of its capt.
tai and surplus to one person, and bank that has
ten times the capital and surplus of another
accommodate the man who wants to borrow large
sums Isn't that advantage? And there is
other advantage. 1t has an advantage resting upon
vanity. People like to do business with the big
banks; they like to go in and have the president of
the biggest bank bow to them and smile Oaugh-
teri Isn't that some advantage? Wouldn't that
remain, even when all banks were safe?
What is the other objection? They say that if
all the banks are secure and the depostor can not
lose, the banks will be recklessy managed. [ am
glad that that argument is made now, when we have
seen the extreme that is exercised under present
conditions. daughter and Applause.) My good
friend here Chairman Stetson, suggested that diff
ference as large as an ocean separated him from
some of the speakers, and thought could notice
slight inclination of the head in my direction.
Gaughter.) I wonder if there can be large gulf
between us this subject The manager becomes
careless! Why, my friends, the officers of the bank
are selected by the directors and the directors
chosen by the stockholders and the stockholders
would lose all of their capital all their surplus and
then they would have to respond to the 100 per cent
liability before any other bank could lose anything
wouldn't that be enough to make the officers careful?