The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-08-28

lection which they must otherwise find
in a government bank.
Republican Plan Too Radical
The Democratic plan, therefore, con-
templates a less radical change than
the Republican plan. In his notifica-
Democrats with being socialistic in
some Of their remedies. The charge
was not well founded, but might re-
ply by charging him with advocating
an unnecessary extension of the gov
ernment's sphere Of activity in the
bank, when the guaranteed bank would
answer the same purpose without any
considerable increase in the number Of
government employees. I would rather
see the banks attend to the banking
business than to have it transferred to
the government. and because 1 prefer
to have the banking business done by
the banks rather than by the govern
ment. I urge the guaranty of deposits
as the easiest solution Of our difficult
ties.
There are only 10000 banks. while
there are 100000 depositors. and 1 do
not hesitate to declare that in a con-
f1ict between the two the depositors
have a prior claim to considerations.
II we estimate the average number of
stockholders of each bank at seventy
five-and that Is a liberal estimate
the total number of stockholders would
only be a million and a half, or one
tenth as many as there are depositors.
The stockholders is not compelled to
buy stock, while the depositor is COM
PEELED to use the banks. both for his
own sake and for the sake of the COM
munity, for only by using the banks
can he keep his money part of the
circulating medium. The guaranty
law, therefore. brings the greatest good
to the greatest number. as we'll as to
those who have the greater equity
upon their side.
There 10 another reason why the
claim OF the depositor is superior to
the claim of the stakeholder. The
stakeholder has voice in the selection
OF the bank officials; the depositor haf
not. If any one must lose. therefore.
as the result Of bad management, 1t
ought to be the stockholder rather
than the deposition. And, I venture to
ask, If the bankers will not trust each
other why should they expect the de-
positors to trust the banks?
We are fortunate, however, In that
we are not compelled to choose be-
tween justice to the depositor and JUS
tice to the stockholder. for as has
been shown before, the plan which we
propose not only does justice to both,
but brings advantage to both. More
than that, the plan which we propose
protects the banker-and 1t is his
only protection-against the establish
ment Of a government bank, with In
definite entertainments upon the bank
er's business. With the guaranteed
bank established, government savings
banks would only be needed in the
towns and villages where there were
no guaranteed banks.
- ~ to
terests of the bank end the interests
of the community, we would be COM
PEELED to protect the interest of the
community first; but here. too, we are
fortunate, for we are not driven to THIS
alternative. That which protects the
community protects the bank also. for
when there are several banks in the COM
munity, the failure OF one often causes
vency of one bank is such a menace to
the solvency of others that the solvent
banks often toin together and assume
their own protection. AS an illustration
of this. I point to the action Of the Chica-
Mass b In at fheHs oss the@
selves.
There is another advantage which the
banks-it protects the reserves deposited
in other banks. During the panic last
ss banHs t Wanted to
draw their reserves from the city banks,
and the big banks in the cities were not
prepared to meet the strain. With de-
posits guaranteed there would be no runs
on local banks and no sudden withdraw
And he ADDS stdu another advantage,
the guaranteed bank. by drawing money
from hiding and by preventing runs on
the bank would greatly lessen the need
for 81 emergency currency.
why He Spoke I'm Topeka
have selected the capital of the state
Of Kansas AZ the most appropriate place
for the delivery OF q speech upon this
subject, because your neighbor upon the
south has been q pioneer In this reform
Her plan. as you know, has been such
a signal success that deposits have been
drawn across the line from your state
into Oklahoma. The alarm caused by
! this invasion Of your banking territory
caused your governor to include in his
call for q special session q recommends
ton OF the passage Of . law similar 70
that Of Oklahoma When the legislature
met however. the influence OF the large
banks ives sufficient to prevent the
needed legislation. and your state still
suffers. The people of Kansas have had
an object lesson: they know the neces-
sity for a law guaranteeing deposits
a sister state: they have seen fifty-four
state system and reaping a rich reward
They have heard the echo of the blow
that has been struck at the national
banks of Oklahoma by the attorney gen.
erai's ruling which denies to such banks
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