Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1908-08-28

would start up across the street" and
Deing able to promise its deposi.
tors absolute security through the
guaranty law, could draw the depos-
Its away from conservatively manag.
ed banks, by offering a higher rate
OF interest than the latter could pay.
This objection is urged as If 1t were
an unanswerable one. But let us see
how easily 1t can be met. Since the
law makes all Of the banks liable
for the obligations OF each bank,
the law should prohibit any abuse of
this security by any bank, and in Ok.
lahoma the banking board has al
II ready fixed the rate of interest that
can be paid to depositors. Accord
Ing to the rules Of the Banking
Board, no bank is permitted to pay
more than three per cent on short
time deposits or more than four per
cent on time deposits running for
six months or more.
1t has also been urged as an objec.
ton that under the guaranty system
a big bank would have no advantage
: over little bank. Even II this ar.
gument we're sound, 1t could not
weight against the advantages Of the
system, for banks are made for the
people, not the people for the banks.
While there are advantages in hav.
ing big banks, the advantages are
not sufficient to justify the jeopardiz.
Ing Of the depositor or Of the bust.
ness interests Of a community.
I But as a matter Of fact, the big
bank would still have several advan.
tages over the small one. In the
first place, 1t could make larger foans
than the small bank. For instance,
bank with 100000 capital and SUR
plus could, as at present, loan $780,
600 to one person, while a bank with
100000 capital and surplus could
only loan $4,000 to one person. This
advantage would in itself draw to the
large bank the large deposits and the
men doing business upon a large
scale, for deposits follow accommoda-
tions.
Then, too,there Is certain busi-
ness advantage in depositing with
big bank. 1t is worth something TO
be able to refer to a big bank when
ones financial standing is being in.
vestigated, and worth still more to
have the advice Of man Of large bus
mess experience when business en-
terprises are being considered.
Besides these there is a social ad-
vantage in being on good terms with
the men who are prominent in the
banking world. Surely the big banks
prestige will be worth enough to it
under the guaranty system; 1t should
not begrudge the smaller banks the
advantage which the guaranty Of de-
posits will bring to them.
. l cannot pass from this subject
without referring to the fact that the
t big bank needs the guaranty as well
/ as the little one, for big banks fail
] as we'll as small banks, and the big
= fger the bank the greater the calam.
' ity to the community when 1t fails
e No bank is so big as to be absolute
{ ly beyond danger, and a community
t needs protection against the big
banks failure even. more than agains
). the failure of the small banks.
It has sometimes been objected
r that the guaranty system would bring
into the banking business a lower ella
OF men and reduce the average In
character. On the contrary, the guar
anty Of deposits, / submit, would, l
/ it made any difference IN this respect
; bring into the banking business bel
e ter class Of men and raise, IL that !!
Q possible, the average Of character. I
;. is not to a mans discredit that he Il
not willing that one Of his fellow mel
should lose money on his account. Il
It not a mark of character that
, man should be careful Of his goot
name and considerate OF the esteem
of his fellows? At present a success
full farmer or business man may b
induced to take stock in bank. i
(. may be that his name is desired t
!, give standing and credit to the bank
but such a man Is constantly haunt
4 ed by the fear that bank officia
!, may be guilty Of criminal conduc
:. which viii bring the bank INTO insol
vency. It is even possible that tn
banks assets may be entirely dissI
pated and that the honest citizen wh
e has become a stockholder, may eitf
. or be compelled to 60 beyond hi
. legal liability or meet bitter cri
4 icism Of the depositors who have suI
"a fsred by the failure. ould It not b
y worth something to the stockholt