The Detroit times., 1908-08-28

from their own official. aud direct {
ors Nhyf Because there has been
-s.s,ttsal- responSibiiity-
TOPEKA. Kas, Aug 2S.-Wm. Jen-
nings Bryan argued for bank deposit
guaranty law before an immense
crowd at the Auditorium, last evening.
Prior 10 his main address. he had de-
livered three other speeches-two
from the hotel veranda ana the third
at Garfield park. where ne attended a
picnic OF the knights OF Pythias.
Here are some OF the telling points
made by Mr. Bryan In his principal
address,
Why not make the deposition secure :
The United states government requires
the deposit or specinc security Wheh -
entrusts money 20 national bank, al
though IL can examine the bank at any
time, the state requires security when
10 deposits money in q bank, the coun-
~ requires security and the city re-
quires security, even the banks require
security from tho officials who handle
money why should the depositor be
! left to take chances?
Not only is the depositor without
! protection but the security given to
| nation. state. county and city lessons
I hts sAatif4 ty-srAey- are preterred- cred
| itors; they have a mortgage on the gilt
4
! get along as best he can with what ra=
mains why are the interests OF de-
/ pnSltnrs- thus neglected.
| A bank asks deposits on the theory
I that the depositor is sure OF the return
lef-Ais- H4eney-aHa- tAeiaws- ought t.
make the facts conform TO the theory.
| The deposition. the community and the
banker himself viii be benefited by leg
! islation which will give TO every de-
positor the assurance that that which
| IL committed To the keeping OF the
bank will be available 10 meet MS
needs at any time. such is not the
case today. for while all banks are rea-
sonably secure. they are not absolute
! ly so.
Confess Banks Insecure.
National bankers confess that their
banks are not secure when they oppose
the guaranty OF state banks on the
| ground that IL would lessen the de-
| posits I'm national banks. and state
! bankers confess that their banks are
not secure when they oppose ma
| tional guaranty system on the ground
| that IT witt 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 ana
/ you Will. learn that they Will not bear
| the risk which they ask you to bear.
1 For many years efforts have been
| made In congress and In the various
states TO secure law guaranteeing de-
| posits but the influence OF the great
| banking Institutions has been sufficient
! TO prevent action. Last fall. however,
when the banks by a concerted actiol
suspended payments on checks, the ,C-
positions were everywhere brought 10 "A
I realization of ttrr-fuct tftat-tftetr- tie
posits are In fact loans, payable on de-
nand under ordinary, circumstances,
I but payable al the Will OF the bank In
emergencies. The depositors suffered a
considerable loss during the suspension
OF payments. and they have not forgot
-taI.- the-lessnn Mhich they then learned
Democratic being
than the Republican party TO respond
70 the needs OF the masses OF the peo-
pie. inserted the following plank In It's
national platform.
I'VE pledge ourselves TO legislation
by which the national banks shall be
required TO establish guaranty fund
for the prompt payment OF the depos-
itors of any insolvent national bank
under an equitable system which shall
he available to all state banking insti-
tutlons wishing 20 use IT,"
| t}tissfssYrffs.~
This principle has been applied In
Oklahoma and the results have been
very satisfactory. The average annual
loss to depositors I'm national banks
during the last 40 years has been less
than one-tenth of 1 per cent OF the
deposits and the loss 10 the fund in
Oklahoma under better regulations and
restrictions has been absolutely moth
Ing during the six months In which the
law has been In operation.
After replying 10 Judge Taft's crit
icisms on a tax on national and such
state banks as may come In. In the
nature OF enforced insurance TO raise
a guaranty fund 20 pay the depositors
OF any bank which fails. Mr.. Bryan
continued
Excessive Loans ". Failures.
The chief rause Of bank failures is
tho making Of excessive loans to direc-
lnrz o. ntticlals II lie hank This y l.
the fruitful cause OF disaster and "
has been impossible TO secure lcgisla
ton projecting banks from their own
officials and directors. Why2 Becaust e
there has been no mutual responsible
iy. When all banks become liable Tor
the deposits or each. tho srockholders
viii insist upon the enactment or a law
making IL a criminal offense for bank
oiucial 10 loan moro than the prescribed
amount 70 one Individual.
At present We have a law prohlbN
Ing the loauiug OF more than one-tenth
of the capital and surplus 20 one person
or corporation, but the law Is only al
suspend a hank n IL violates the law
but the law is not enforced. bechuse
the enforcement or such law would
throw the punishment upon innocent
stockholders and disturb the business
- the city or town In which the bank
is lVcated
TiNs Saw should make &c a criminal
uucuse Co loan more than the pre-
AsAI Ned amount, to one person and We
would probably be able 10 seCure- thv
passage of - law prohibiting market
t-.--A4tl - t4.a4.- hank nffiA InlS.A
The oklahoma plan ia better. bank
r-rr7Trrv -rTttrrf rrivtTfrurrrr-
minutes after the notice OF suspension.
the officer in charge had authority 10
pay All dspositots. and then the bank
sets ~ the bank and To prosecute the
officials criminaIiy. When the busiuess
was closed up, the stockholders passed
"A resolution thanking the state board
for its prompt action, the action % the
board being a. protection TO tie stock
holders. ~ well az To the depOsltors
and 60 the public generally
An objection Answered.
An objection Is sometimes made 10
the guaranty law that new bank
would start up across the street. and.
being able 10 promise Its depositors
absolute security through the guaranty
law. could draw the deposits away
from conservatively manaEed banks 10y
Offering a higher rate of interest than
the latter could pay. This objection IL
urged as II ~ were an unanswerable
one. But let va see how easily II can
be met Since the law makes all OF