The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1908-08-28

higher rate of interest than the Sc
cured banks were permitted to pay;
and il must be remembered also that
the banks which suffered a loss OF de-
posits were all national banks And
10 make it certain that the difference
was caused by the guaranty law. the
secured national banks gained. whiie
the unsecured banks lost While the
deposits We're increasing in the guar
anteed banks OF Oklahoma. they were
failing in the state banks and trust
companies of Kansas-the JeCrea Sc
being $1,153, O26-27 between March
31st and June 18th.
No amount of criticism of the tim-d
depoSitOr can change the facts; tie
people who deposit money want more
security than the laws at present
give them They will change banks
to get more security. and, if neCes-
sary. they will send their money to
another state.
Efforts to Obtain Laws.
For many years efforts have been
made in congress and in the various
states to secure a law guaranteeing
deposits, but the influence OF the
great banking institutions has been
sufficient to prevent action Last fan,
however, when the banks by a CON
certed action suspended payments on
checks, the depOsitors were every
where brought to a realization of he
fact that their deposits are in fact
loans, payable on demand under Ordi-
nary circumstances, but payable IT
the will of the bank in emergencies.
The depOsitors suffered a considerable
loss during the suspension of pay
ments, and they have hot forgotten
the lesson which they then learned
The democratic party, being more
free than the republican party to re-
Spond to the needs of the masses OF
the people, inserted the following
plank in its national platform:
Democratic Pledges.
I'VE pledge ourselves to legislation
by which the national banks shall be
required to establish a guaranty fund
for the prompt payment of the de-
posltors of any insolvent national
bank, under an equitable system which
shall be available. to all state banking
institutions wishing to use it"
This principle has been applied in
Oklahoma and the results have been
very satisfactory. The average annual
loss to depositors in national banks
during the last forty years has been
less than One-teRth of one per cent OF
the deposits, and the loss to the fund
IN Oklahoma under better regulations
and restrictions has been absolutely
nothing during the six months in
which the law has been in operation
The republican platform is silent on
the subject, and the republican candi-
date not only does not advocate a COM
pulsory system, but specifically and
emphatically opposes it He saws:
The democratic platform recon
mends tax upon national banks and
upon such state banks as NAV come
in, in the nature of enforced insur-
ance to raise a guaranty fund to pay
the depositors of any bank which
fails"
And thea he questions the right OF
the government to enact such a law,
saying:
How state banks can be included in
such scheme under the constitution
Is left In the twilight zone of state
rights and federalism so frequently
dimming the meaning and purpose OIL
the promises of the platform. If they
come In under such a system, they
must necessarily be brought within
the closest national control. and so
they must really cease to be state
banks and become national banks"
Republican Position
His solicitude for the state hanks
will hardly impress the country. for
ne is quite Indifferent TO states and
their reserved rights when he deals
with other subjects. When congress |
Is in the control of those who want TO |
legislate for the whole people rather |
than for the few, il will not be difficuit /
to frame a law under which state |
banks can avail themselves of the ad- /
VantaGes or federal law guaranteeing
the deposits of national banks inst /
as 1t was easy in Oklahoma to frame 1
a law which permitted national banks |
TO take advantage of the state guaraD- /
" system 1t will also be easy TO /
enact federal law which will DprmIr
national banks TO avail themselves OF /
state guaranty systems until q nation |
al system can be secured. Attorney !
General Bonaparte's ruling, whether
II correctly interprets the law OF not. |
would not bring such CONSERVATION /
as II does If the republican candidate /
Favored a law allowing national banks |
10 take advantage of state systems for /
the protection of depositors. but Mr.. /
IaftS hostility to all guaranty systems /
Is shown IN the objection which he /
offers:
The proposition is to tax The hon
est and prudent banker To. make uD /
TOT the dishonesty and imprudpnce OF /
OtheFs. No one can foresee the bur
den which under this system would be
imposed upon the sound and couSer-
vatlve bankers of the country BY this
obligation to make good the losses
by the reckless, speculative
and dishonest men who would be en-
abled TO secure deposits under such i
system on the faith of the proDosPd
insurance; as in its present shane the
would remove all safeguards
against recklesSHesS in banking ana
ne chief, and in the end. probably the
'nly, benefit would accrue TO the
Spectator, who would be delighted
% enter the banking business when
{ was certain that he could enjoy
any profit that would accrue. while
he risk would have to be assumed
~ his honest and handwriting fell
ow.'-
He even pictures dire disaster and
declares that If the proposal were
!1opted exactly as the democratic plat
OTm II u-o.-I1