Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1908-03-26
IRONTON. MO. THURSDAY, MARCH 26. 1 9OS. NUMBER

that you enjoy and underestimate the
advantage that you derive from the
law; and, second, that our laws should
be made for tae benefit of all the peo-
pie and not sor the benefit of few
of the people While l can admire
the interest which you feel in the wild
ows and orphans who are stockhold-
ers, l must remind you that the wild
ows and orphans who deposit money
in banks are also entitled to consid-
Grafton. 1t is supremely selfish in you
to forget the interests of the larger
number Of depositors who make bank
ing profitable. Banking would not
be very advantageous If you only
loaned the money of the stockholders
The real profit of banking comes from
the loan of depositors' money and it
is little heartless in you to look at
the question entirely from the stand
point Of those who get the benefit of
the deposits
Your second argument is, that the
guarantee Of deposits would lead to
reckless banking and that the busi-
ness communities would protest
against the guarantee system on the
ground that it would make all banks
insecure and drive the better class Of
people out of the banking business.
That, Of course, is a prophecy and
prophecy is more difficult to answer
than an argument based upon history.
Insofar as experience teaches any
thing, it teaches just the contrary A
guarantee law has been passed in
Oklahoma, and the result is that the
bankers Of southern Kansas have
joined with the depositors in asking
for special session of the legislature
in Kansas to consider a guarantee sys-
tenn, and they have done so because
they fear that deposits will be with
drawn from Kansas and carried into
Oklahoma. Instead of driving men
out of the banking business, the Okla
homa law has led number of ma
tional bankers to take steps toward
changing their banks into state banks
in order to take advantage of the
state law, in case national banks are
not allowed to enter the system.
when tried to secure the passage
of bill in Nebraska, providing a
guarantee fund for state banks, it
was opposed by the national banks on
the ground that people would remove
their deposits from the national banks
to the state banks, if the state banks
were made absolutely secure; and it
is to avoid injustice to either class
Of banks, that have urged that ma
tional banks ghould be permitted to
take advantage Of guarantee systems
established in the states and that
state banks should be permitted to
take advantage Of any guarantee sys-
tenn established by congress.
"The guarantee of deposits will not
produce recklessness In management.
You are selected by the stockholders,
not by the depositors. You will en-
deavor to manage your bank in the
interest Of the stockholders, and your
argument shows that you consider
their interests paramount. Under a
guaranteed system of banks, you would
still be responsible to your stockhold-
ers. They would lose all that they have
and be subjected to the 100 per cent
liability In addition, before other
banks could lose anything on account
of your banks failure. Would this
not be sufficient to make you careful?
"Do you think we could improve the
character of our bankers by repeating
all laws providing for regulation and
inspection? If not, why do you think
it would lower the character Of bank
officials to increase the security of de-
positors?
"The fact Is, that the country is suf-
fering to-day from lack of confidence
in banks more than from any other
cause. The money can not be drawn
from hiding and boarding unless the
| depositors are assured of the safety
Of the banks. The amount of the tax
on each bank would be little compared
| with the benefit which it would re-
| ceive from its shore Of the increased
deposits, and as for making banks un-
safe, the guarantee system will insure
safer banking
Nearly every bank failure is due
to the appropriation of the money by
| the directors or officers.
"Why have we not been able to
secure better regulation Of banks? ?
The answer is simple. The bad banks
don't want any regulation and the
good banks. prefer to make business
advantage out of the recklessness of
other banks. When banks become mu-
tually responsible for each others
| depositors, 1t will be easier to secure
the proper regulation of the banks.
1T all depends upon the point of
| view. II legislation is to have for it's
| object the welfare OF, the whole peo-
pie, then the guaranteed bank ought
to come and come to stay. If, how
| ever, the legislation is to have for its
object the securing Of privileges to
| few of the community at the ex-
pense Of the rest of the community,
your argument Is sound,
II believe that 1t would be perfectly
safe for the federal government to
guarantee deposits in the national
banks, collecting from alP the banks
in proportion to deposits the amount
| that 1t would have to pay out to the
depositors of banks that fail, and be-
lieve that 1t would be safe for states
to adopt similar system to guaran-
tee the depositor In state banks. In
that case. the government would have
back Of it the assets of all the banks,
| Rut n ohiaction ia mada to an abso