Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1908-09-09
Discusses National Issues.
Editor Willmar Tribune:
is THE CAMPAIGN TO BE
FOUGHT ON THE MONEY
QUESTION?


FOUGHT ON THE MONEY
QUESTION?
1t seems so now. In 1896 the
question was how to relieve the
money famine, how to supply a
sufficient volume of real money,
how to stop the then worldwide
scramble for gold. The increased
production of gold in Alaska and
South Africa beginning in 1897 and
continuing to the present day has
for the time being supplied sufi-
cient volume of money. But while
this enormous increase in the
worlds supply of basic money has
revived business here and elsewhere
in the world, raised prices on COM
modities and labor, yet the expert
ence of last fall reminded us that
we may have money famines of
more or less severity just the same.
A year ago, about, there were
several heavy bank failures in New
York. The depositors of these
banks or trust companies got scared
and started run. Matters became
so serious that the New York clear
ing house suspended specie or
money payment and simply issued
a Il owe you.' Well, this was of
course an illegal and unheard of
procedure on the part of the New
York clearing house. Here were
hundreds and thousands of banks
all over the country having deposits
in the great New York banks, and
these country banks in need of the
money. but they could not get it;
only slip Of 81 owe you," which
was not money-not a legal tender
for debt.
The situation was serious for
while. Here was large precent-
age of the money of the country
locked up in the banks of New
York, and the banks refused to pay
it out. In the mean time there
were throughout the country, es-
pecially the West, hundreds of
thousands Of families who had
mortgages on their farm and homes
who, if this thing had continued
for any length Of time, would have
lost the savings of a lifetime for
want Of real legal tender money to
redeem it with. The clearing
house certificates no doubt stayed
the run and the panic, illegal as
they were, but it is one Of those
kill or cure financial remedies that
this country never wants to try
again, if avoidable.
The question now is, who can
these bank runs be prevented? The
answer is simple, provide some alb
solute guaranty against loss to bank
depositors. But how? Well, that
is the question. State and federal
government inspection of banks is
not sufficient. We now have that,
and still bank failures and loss to
depositors right along. No, the
government itself must step in and
guarantee the prompt payment of
every depositor. Nothing else will
answer to stop runs on banks IN
times of bank failures.
Two methods are proposed by the
two great parties.
The Republican party proposes
postal savings banks as the remedy.
The post office will, Of course, de-
posit the money in the banks to get
it into circulation. But as the gov
eminent steps in between the de-
position and the bank, it is directly
responsible to the depositors.
The Democrats propose a deposit
insurance scheme operated by the
government-that is, every bank
shall pay a certain small per cent
into fund in the hands of the gov
eminent to be used to pay deposit
ors without delay of all suspended
banks. The latter plan is not Dem
ocratic altogether, as the Repub-
lican party of Kansas and other
states has adopted this plan in their
platforms.
But it seems that Taft and the
eastern financiers are very much
opposed to the latter plan. And it
seems now that this question, Of
method of securing depositors, will
be the real issue of the national
campaign. DR.. G.. johnson.