The San Francisco call., 1908-08-24
BRYAN'S BANK IDEA
SCORED BY MEYER
Postmaster General Declares
Nebraskan's Panic Panacea
Would Foster Dishonesty
''Step Toward Socialism" De.
nounced as Likely to In-
crease Wildcat Schemes

HOT SPRINGS, Va, Aug. 23.-Post-
master Genera Meyer. who is here
conferring with Judge Taft. today ex-
pressed himself in an interview on the
general political situation and on the
democratic proposition of guaranteeing
national bank deposits, declaring the
latter 10 be "one step farther toward
socialism,.
There are" he said, thousands OF
voters in every state who do not get
out 10 the polls unless they feel there
is a real necessity for them to vote.
Therefore, If interest is not sufficiently
aroused and the Importance of this
coming election fully appreciated, sew
eral states may be lost by default.
IN the present campaign the demo-
cratic candidate is bringing forward
a short cut and plausible panacea
against panics. the guaranteeing Of
deposits in national banks. At first
sight this would appear to be sort
OF insurance. Insurance, however, is a
contract whereby one party voluntarily
pays TO another party a fixed sum for
indemnity against loss and not to eX-
ceed an agreed amount The guaran-
teeing proposition compels by law the
banks to pay unknown sums for future
losses and to an unknown amount and
subject TO unknown risks, over which
they have no control.
OPENING FOR DISHONESTY
"The democratic platform pledges
the party to compulsory guaranteeing
Of deposits for all national banks, with
its provisions available for all state
financial institutions desiring to use
them.
This guaranteeing Of deposits by
all national banks would mean moth
ing less than that the conservative and
honestly managed banks would have
10 pay the debts OF banks which have
been badly and dishonesty managed.
Under this system there would be
nothing to prevent a not over scrupu-
lous banking officer in the competition
of obtaining deposits from going to
parties and offering them per cent
for their deposits, claiming that they
had no risks, as deposits are guar
anteed. The bank in turn would have
10 make investments which would in
volve great risks in order to make
any money.
INJUSTICE TO BANKS
IF successful, this would tend to
increase speculation, which is one of
the misfortunes of the present day,
with the wildcat schemes and high
finance that have been so much in evil
dence within the last year.
The proposed system would result
in reyolutionizing the methods of
banks, and state banks and trust COM
panies would be forced to enter under
the same arrangements in order to
have their deposits guaranteed, which
would be an injustice to the national
banks, as the stock holders in the ma
tional banks are subject to double liza
biiity for deposits, which is not true
Of state banks.
The deposits IN sayings banks
throughout the country amount TO
about three and half billions. What
more injustice can be imagined than
these deposits, which are made by
wage earners and individuals of very
moderate means, should be taxed in
order to pay for the losses of misman-
aged banks?
FOR POSTAL SAVINGS BANKS
In New England and New York
there are no stock holders in the saw
ings banks All the money earned is
paid to the depositors. Therefore it
would result in a direct tax on the de-
positors and would decrease the returns
coming to them.
AS Mr.. Taft has said in his speech
Of acceptance, the republican party
prefers the postal savings banks as a
method tried, safe and known to be
effective, and as reaching many more
people now without banking facilities
than the new system proposed
In the postal savings bank the de-
posits are guaranteed by the govern
nent. because the government has re-
ceived the deposits and made itself re-
sponsible. They are led back into the
channels Of trade by depositing them
"a the national banks in the districts
where they have been brought to +ba
postoff1ce.
The system Of guaranteeing deposits
IN national banks as proposed by the
democratic party is one step farther
toward socialism"