Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1908-08-28
BANKS FOR THE PEOPLE
| IS BRYAN'S KEYNOTE IN
/ ADDRESSAT TOPEKA, KAN.


itors; they have mortgage on the
gilt edged assets and the depositor
must get along as best he can with
what remains. Why are the interests
of depositors thus neglected?
Supposed to BE Safe.
"A bank asks deposits on the the
ory that the depositor is sure of the
return of his money, and the laws
ought to make the facts conform to
the theory. The depositor, the COM
munity and the banker himself will
be benefited by legislation which will
give to every depositor the assurance
that that which is committed to the
keeping of the bank will be available
TO meet his needs at any time. Such
is not the case today. for while all
banks are reasonably secure, they are
not absolutely So This statement can
be verified in several ways.
First: The president has advocated
a postal savings bank. and his post
/ master general, in presenting an ar
gument in its favor, pointed out that
many millions are sent to European
savings banks every year by Ameri-
cans of foreign birth who prefer to.
trust the state institutions of the ma
tions beyond the sea. rather than the
private banking institutions here.
Much Money Hidden.
Second: 1t is known that a CON
j siderable amount of money is in hid
ing. the amount increasing with the
approach of a panic or business de-
preston. This money is not only
withdrawn from active use. but is like
ly to be withdrawn just at the time
I when money is most needed and when
the withdrawal will increase the finan-
cial disturbance. 1t is impossible to
reason with fear: it is futile to tell
, men that they will probably get their
money. The moment the depositors
, suspect bank, they hasten to de-
stroy its solvency Dstrust. and dis
trust alone, can explain the hiding of
money
Third: The increase in the issue
of money orders, payable to the order
of the purchaser, is another evidence
that people are seeking greater Sc
curity for their money. The banks
will pay an interest upon deposits,
and yet those who buy money orders
prefer to lose the interest and, in ad-
dition to that. pay the price of the
money order in order TO secure the
governments guaranty.
/ Confession of Weakness.
| Fourth: National banks confess
| that their banks are not secure when
they oppose the guaranty of state
banks on the ground that it would
lessen the deposits in national banks
and state bankers confess that theiI
banks are not secure when they op
pose a national guaranty system on
the ground that it will draw deposits
Iaway from state banks. If you want
to find whether banks are absolutely
secure, ask the directors to give you
their personal note to secure your de
IpCsit and you will learn that they viii
not bear the risk which they ask 20,
TO bear.
Fifth: The experience of Oklahom;
furnishes conclusive proof that depos
itOrs do not feel tnat their money il
safe in unsecured banks. On the 17tt
of December. 1907. the Oklahoma leg
islature enacted a depositors' guarant.
law. which became operative Feb.
1908. BY the provisions of this law
all state banks. and as many nationa
banks as desire to avail themSelve
of the law, are taxed / per cent o.
their deposits, and the money thu
collected is put into a guaranty fund
The banking board is authorized t
| make additional assessments fror
time TO time to keep the fund up t
this amount, and is directed TO TAX
possession of any insolvent bank, pa
the depositors in full, and reimburs
the failed bank Five hundred an
fifty-five banks, including "a nations
banks. had come under the provision
of this law on the 18th of last May
leaving but 255 unsecured banks Ia
nationalD in the state. Statement
!, are made by the banks in Decembe
and May. Between these periods tn
SSCuiSu DduhS Sdihtu III ucDOSitS ~
765.22. while the unsecured banks. a
national. showed decrease in d,
lposits of 81, 1,101, ,S07S6 A large pal
S of this increase represented none
l. brought from hiding or from withor
t. the state, but the decrease in tn
II unsecured banks can only be explaine
e in one way. A large number of d
e positors withdrew their money frol
d the unsecured banks. and deposite
# ii in the secured banks, and this, to-
n in, spite of the fact that in order
lprevent Withdrawals. the insecure
O banks. in some instances, offered
y higher rate of interest than the S
s cured banks were permitted to pay
and it must be remembered also tn;
the banks which suffered loss
!, deposits were all national banks. Al
= to make. it certain that the different
= was caused by the guaranty law, Il
. secured national banks gained, whi
the unsecured banks lost. While Il
y deposits were increasing in the qua
- anteed banks of Oklahoma. they we
- failing in the state banks and tiu