The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-08-28

1t certain that the difference was
caused by the guaranty law, the Sc
cured national banks gained. while the
unsecured banks lost. While the de-
posits were increasing in the guaran-
teed banks of Oklahoma. they were
falling in the state banks and trust
companies of Kansas-the decrease be-
ing $1,153.026.27 between March 81 and
June>13.
No amount of criticism of the timid
depositor can change the facts; the
| people who deposit money want more
| security than the laws at present give
| them. They will change banks to get
more security, and, If necessary, they
will send their money to another state
For many years efforts have been
made In congress and in the various
states to secure law guaranteeing
| deposits. but the influence of the great
| banking institutions has been sufficient
| to prevent action. Last fall, however
when the banks by concerted action
suspended payments on checks, the de-
| positors were everywhere brought to a
| realization of the fact that their de-
posits are in fact loans, payable on de-
| mand under ordinary circumstances,
but payable at the will of the bank in
all such emergencies. The depoSitorS
suffered a considerable loss during the
suspension of payments, and they have
not forgotten the lesson which they
then learned. The Democratic party,
being more free than the Republican
party to respond to the needs of the
masses of the people, inserted the fol-
lowing plank in it's national platform:
I'VE pledge ourselves to legislation
by which the national banks shall be
required to establish guaranty fund
for the prompt payniSi.. Of the deposit
tors of any insolvent national bank.
under an equitable system which shall
be available to all state banking instf-
tutions wishing to use It,"
TI1f r1rfv, @fVl1- hn- rtn1 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-tenth of one per cent of
the deposits, and the loss to the fund
and restrictions has been absolutely
nothing during the six months in
which the law has been in operation.
Compares the Platform Pledges.
The Republican platform is silent on
the subject and the Republican can
didate not only does not advocate a
compulsory system, but specifically
and emphatically opposes it. He says:
The Democratic platform recon-
mends a tax upon national banks and
upon such state banks as may come in,
in the nature of enforced insurance to
raise a guaranty fund to pay the de-
positors of any bank which fails"
Anu lIleH lie QutSllOHS Tie tight VI
the government to enact such law,
saying:
How state banks can be included in
such a scheme under the constitution
is left in the twilight zone of state
rights and federalism so frequently
dimming the meaning and purpose of
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"
His solicitude for the state bank
will hardly impress the country. for
he is quite Indifferent to states and
their reserved rights when he deals
with other subjects. When con-
gress is in the control of those who
want to legislate for the whole peo-
pie rather than for the few, 1t will not
be difficult to frame a law under
which state banks can avail them
selves of the advantages of a federal
law guaranteeing the deposits of ma
tional banks. just as 1t was easy In
Oklahoma to frame law which per-
mitted national banks to take adj
vantage of the state guaranty system.
1t will also be easy to enact a federal
law which will permit national banks
to avail themselves of state guaranty
systems until a national system can
be secured. Attorney General Bona
-
terprets the law or not. would not
bring such CONSERVATION as it does If
the Republican candidate favored a
law allowing national banks to take
advantage of state systems for the
protection of depositors, but Mr.. Tafts
hostility to all guaranty systems is
shown in the objection which he
offers:
1.-The proposition is to tax the hon
est and prudent bankers to make up
for the dishonesty and imprudence OF
others. No one can foresee the burden
which under this system would be i'm
posed upon the sound and conserva-
tive bankers of the country by this
obligation to make good the losses
caused by the reckless. speculative and
dishonest men who would be enabled
to secure deposits under such a sys-
tenn on the faith of the proposed in
surance; as in its present shape the
proposal would remove all safeguards
against recklessness in banking, and
the chief, and in the end, probably
the only. benefit would accrue to the
Spectator, who would be delighted to
enter the banking business when it
was certain that he could enjoy any
profit that would accrue. while the
risk would have to be assumed by his
honest and Woodworking fellow"
He even pictures dire disaster and
declares that eff the proposal were
adopted exactly as the Democratic
platform suggests it, would bring the
whole banking system of the country
down in ruin"
AS an afterthought he suggests that
a voluntary system might be tolerated
but as his objections to a compulsory
system apply just as we'll to vol
untary system we may fairly count
him against all legislation which has
for its object the guaranty Of de-
positors.
AS Mr.. Taft's argument is that pre-
scented by the big banks which put
their own selfish interests above
the welfare of the depositors
and the safety of the COM
munity. it is worth while to answer the
several propositions which he ad-