The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-08-28
". J. BRYAN DECLARES
FOR GUARANTEED DEPOSITS
Continued from Page I.

amount Increasing with the approach Of a
panic or business depression. This money
Is not only Withdrawn from active use.
put is likely TO be withdrawn Just at the
ume when money is most needed and
when the withdrawal will Increase the
financial disturbance. 1t is impossible to
reason with fear; II Is futile to tell men
that they viii probably get their money.
The moment the depositors suspect a
bank, they hasten to destroy its solvency.
Distrust. and distrust alone can exnIaiD
the hiding of money.
Third: The increase I'm the issue of
money orders, payable to the order of the
purchaser. Is another evidence that people
are seeking greater security for their
money. The banks will pay an interest
upon deposits. and yet those who buy
money orders prefer to lose the interest,
anu IN addition TO that, pay the price Of
the money order In order TO secure the
governments guaranty.
Fourth-National banks confess that
their banks are not secure when they op-
pose the guaranty OF state banks on the
ground that IL would lessen the deposits
in national banks; and state bankers con-
Tess that their banks are not secure when
they oppose a national guaranty system
on the ground that il will draw deposits
away from state banks. II you want to
find whether banks are absolutely secure
ask the directors to give you their per-
sonal note to secure your deposit and you
VIII learn that they win not bear the risk
which they ask you to bear.
! nc OkidnOnd fIdn.
Fifth-The experience of Oklahoma =
furnishes conclusive proof that depos- y
ltors do not feel that their money =
is safe in unsecured banks On the b
y seventeenth of December 1907 the b
Oklahoma legislature enacted a de- .
= positors guaranty law, which became y
= operative February f. 1905 Bv the +
= provisions of this law all state banks b
y and as many national banks as de- 3
= sire to avail themselves of the law, y
y are taxed ! per cent on their de- +
= posts and the money thus collected b
y is put into q guaranty fund The J.
y banking board is authorized TO make !
4 additional assessments from time TO !
\ time to keep the fund mp to this =
amount, and Is directed to take nos i
y session of any insolvent bank. nav ;
y the depositors in fun, and reimburse +
y the fund by collecting the assets of J.
\ the failed bank Five hundred and !
y fifty banks. including fiftV-fOur ma b
= tional banks. had come under the pro- =
y visions or this law on the fourteenth \
\ of last May. leaving but 255 unsecured =
= banks TALL nationaD in the state \
y Statements are made by the banks in b
December and May. Between these y
y periods the secured banks gained in =
y deposits A.237, 1872. while the unse- =
y cured banks. all national showed a +
y decrease in deposits Of 81, 1Ol, S07 Sc A y
y large part of this increase represented y
y money brought from hiding or from y
y without the state, but the decrease in b
y the unsecured banks can only be ex- y
= planned IN one way. large number y
y of depositors withdrew their money 4
y from the unsecured banks and depos- y
y tied IL in the secured banks, and this y
y too, in spite of the fact that in order =
y TO prevent Withdrawals. the unse- \
\ cured banks, in some instances, Of y
y fered a higher rate of interest than \
the secured banks We're permitted to y
y pay: and ii must be remembered also y
y that the banks which suffered a loss y
Il e 1E.z -Hf Ill
4 And TO make it certain that the diff y
y ference was caused by the guaranty y
y law. the secured national banks y
y gained, while the unsecured banks y
y lost. While the deposits were increas- +
y Ing in the guaranteed banks of Okla y
y hOma. they were failing In the state +
4 banks and trust companies of Kan y
y sas-the decrease being 81, 1888 O26.27 be- +
\ tween March 81 and June 13 \
No amount of criticism Of the timfd
deposition can change the facts; the peo-
pie who deposit money want more Sc
curity than the laws at present give them.
They will change banks to get more Sc
curity: and, If necessary, they will send
their money to another state
For many years efforts have been made
in congress and in the various states to
secure a law guaranteeing deposits but
the influence Of the great banking insti-
tutions has been sufficient to prevent ac-
tion. Last fall however, when the banks
by concerted action suspended payments
on checks, the depositors were everywhere
brought TO a realization of the fact that
their deposits are in fact loans, payable
on demand under ordinary circumstances
but payable at the viii of the bank IN
emergencies. The depositors suffered a
considerable loss during the suspension of
payments. and they have not forgotten
the lesson which they then learned. The
Democratic party. being more free than
the Republican party to respond to the
needs of the masses of the people. insert
ed the following plank in its national
platform:
The Democratic Pledge.
\ 1--WE pledge ourselves 10 legislation y
y by which the national banks shall DO y
\ required TO establish a guaranty fund !
\ for the prompt payment of the de- y
y positors of any insolvent national =
y banks, under an equitable system =
y which shall be available TO all state ,
\ banking institutions wishing to use y
\ H."
This principle has been applied in Ok
lahoma and the results have been very
satisfactory. The average annual loss TO
depositors in national banks during the
last forty years has been less than one
tenth of per cent of the deposits and the
loss TO the fund in Oklahoma under bet
ter regulations and restrictions has been
absolutely nothing during the six mouths
IN which the Law has beer in operation.
The Republican platform is silent on the |
subject and the Republican candidate not |
only does not advocate u compulsory sys-
tenn. but specifically and emphatically op-
poses IL lie says
THE Democratic platform recommends !
a tax upon national banks ana upon such |
state banks as may come in, in the nature
OF enforced insurance to raise a guaranty |
fund TO pay the depositors OF any bank |
which falls
And then ne questions the right Of the I
government &c enact such a law. saying: |
How state banks can be included in |
such a scheme under the constitution is /
left In the twilight zone of state rights |
ard federalism 50 frequently dimming the
meaning and purpose Of the promises of !
the platform. II they come in under such /
system, they must necessarily be I
brought within the closest national CON |
troll, and so they must really cease to be |
state banks and become national banks - /
His solicitude for the state bank will |
hardly impress the country, for he Is quite 1
Indifferent to states and their reserved /
rights when he deals with other subjects. |
When congress is In the control of those |
who want TO legislate for the whole peo- |