The Detroit times., 1908-08-28

the banks liable for the obligations OF
each bank, tire law should prohibit any
abuse OF this security by any bank and
In Oklahoma the banking board has
already fixed the rate or interest that
can be paid TO depositors According
ttte-tA4a-f t44-s-tek tha-AaA -hea+a7-ffe
bank is permitted to pay more than }
per cent on short time deposits or more
than I per cent on time deposits run
ming for six months or more.
t-4thas alse-keeR- urged as an ebjee-
ton that under the guaranty system
big bank would have no advantage over
a little bank. Even IL this argument
were sound. II could not weigh against
the advantages OF the, system. for
banks are made for the people. not the
peonle for. the banks. While there are
advantages In having big banks the
the jeopardizing OF the depositor or OF
I the business interests Of a community
But. az matter OF fact. the big bank
would stlll have several advantages
over the small one In the first place.
/ ~ could make larger loans than tho
small bank. For instance. a bank with
1900. 900 capital and surplus could, as
at present, loan 100000 10 one person.
while a bank with 100000 capital and
surplus could only loan $4,000 TO one
person This advantage would in 1t
self draw 20 the large bank the large
deposits and the men doing business
upon large scale. for deposits follow
accommodations
An Aid 10 business.
Then. too, there Is a certain business
advantage in depositing with big
oank Il is worth something To be able
to refer to a big bank when ones hnan-
cial standing is being investigated and
worth still more TO have the advice OF
a man OF large business experience
+lraaa-Aite4f4ess- psises- afe-te4He
con sidered.
Resides these there Ia n social advan-
tage In being on good terms with the
men who are prominent In the banking
world. surely the big banks prestige
VIII be worth enough TO IL under the
guaranty system. IL should not be-
I grudg5 rrr srTarrer- OdnKy tfrG urtvar-
tage which the guaranty OF deposits
viii bring TO them.
! ] cannot pass upon this subject with
/ out referring 10 the fact that the big
/ bank needs the guaranty as well as the
little one, for big banks fall as well as
small banks, and the bigger the bank
the greater the calamity TO the com
! munity when IL fails. No bank is so
! big as TO bee absolutely beyond danger.
and Il community needs protection
against the big banks failure even
] more than against the failure OF the
/ small bank
/ To Justify law guaranteeing deposi-
\ tors. Il Is not necessary to show that
/ the advantage 10 the bankers would
amount TO more than the tag. The
examination OF the banks would con-
/ tinue to be made at tho expense OF the
] hanks, even ~ IL were certain that the
examination was OF no pecuniary al
I continue to require a certain amount OF
| reserve 70 be kept on hand even Ii IL
were certain that such a law brought
[ nN pcCAalary gain to the bank, and so
tie banks ought TO be compelled TO in
sure thelf depositors against loss, even
III a. could not be shown that such In
. adv autage 10 tho bank The bank char
! ter has q value, II IL were not valuable
the bank would not be organized The
bank charter Is gift from the people
T I..rs a. 10
authorize the establishment OF a bank
: L-L1--- - ri2hl IL demand return that
the bank shall keep the pledge which
/ 10 gives when IL Invites deposits and
Those who deal with u.
Gain More From LAW.
/ Bat as q matter Of fact, the banks
VIII. as a rule, gain more from the law
! than they viii lose by the tax imposed
~ the law The experience or the okla
hpma tanks shows this. The interest
collected upon the Increased deposits
VIII far more than pay the losses occa-
E stoned by insolvency. But two banks
l--a-- ~ e.--%-ts hat both
cases been sufficient to reimburse the
fund
Then. too, the banks must remember
that the question IS not merely whether
dcpositors shall be made secure but
whether the security shall BE- given by
/ the banks themselves or by the gov
eminent through postal savings bank
TIE refusal 81 the banks\ to permit
the passage OF law granting security
toy depositors II responsible for the
Lgr0wtn OF the sentiment I'm favor al the
government savings bank. and the sem
timent VIII continue to grow unless
----frr--t rfurr- --Trtt-fV-++r~--ri,.-
lnandh OF tic leople- unQn- this sAhlecL
A. to Postal savings Hanks.
The -lsepuhlican party proposes the
establishment OF postal savings bank
la-lal-l-.t -yIat--rs
the guaramteed bunk because Il is bet
Ter Tor the dtposItor and better Tor the
banker-it gives the dcpositor tho Sc
curtty which he needs and yet leaves
the banking business ia the hands OF
the banks. But the Democratic plat
form declares FOR postal savings bank
IL the guaranteed bank cannot be Sc
cured and w November more than 80
per cent or The voters Will by their bal
lots demand either the guaranteed bank
or the postal savings bank. Can the
ilnanciers prevent the carrying out OF
this defnandY
flights OF Depositors.
WOW1d faTTIcF see me banks attend
to the banking business than 10 have 10
transferred 10 the government, and be-
cause 4 prefer TO have the banking
business done by the banks rather than