Tonopah bonanza. [volume] (Butler City [i.e. Butler], Nev.) 1901-1909, 1908-10-10

danger lurking in the act that has
aroused thinking minds against it.
We have always had periodical panics
and financial s~tringencies. These may
never occur again with the Aldrich
bill in force and such amendments
and changes in it as the future will
disclose, but any banking act must
be judged in the light of what bene-
fits or evils it would contain during
panic times until all danger of flu
ture financial stringencies is set at
rest.
1t has been shown that if New
York last fall had had a law similar
to that of Oklahoma, every bank in
the state would have been compelled
to close its doors. The imagination
can picture what effect that would
have had on the balance of the coun-
try. There was not enough available
cash in the sound banks Of New
York state to have promptly met the
demands of depositors on the Knick-
erbocker Trust company and other
financial institutions that went down
within the short space of a week
without weakening the cash reserves
of the sound banks to such an ex-
tent that they would have been be-
low the legal reserve limit and caus-
ed them to close or have precipitated
a run which would have brought
them down in a general crash. Then
what becomes of the depositors. I'm
der such a state of facts does it not
appear that the depositors in the
weakest, frailest. worst conducted
banks have the best chance of get
ting their money promptly on de-
mand, while depositors in strong,
conservative banks are the ones least
likely to get anything? Manifestly
the weakest bank will fail first and
the first bank failing has the best
chance of getting it's depositors paid
in full. The bank holding out long
est must under the Oklahoma act
see its cash withdrawn to
meet the obligations of other banks
and when its turn comes there is no
money to meet its own.
Imagine what would have occur
red in Nevada when the State Bank
and Trust company closed its door a
year ago. Could the solvent banks
of Nevada have made good the inn
mediate demands of the depositors
on the State Bank and Trust COM
pany in excess of a million dollars
and not jeapordized and forced to the
wall every bank in the state? Think
over it. If you can come to any
other conclusion your reasoning
would be interesting. If you agree
with this statement of facts do you
want the Oklahoma law enacted in
Nevada?
We don't want it. 1t is a danger
and a meanace. 1t not only is unjust
to those banks which have stable
regulations back of them which the
people have learned to trust, but it
adds a constant, threatening, always
impending danger overhanging every
bank and every depositors' money
that is al infinitely greater evil than
the questionable guarantee it gives
to the depositor. Every bank is tied
up in a chain and if one or more
close their doors owing depositors a
sum in excess of what the remaining
banks can with safety make up, all
go down in the abyss. You can't
have the APPARENT merits of the Okla
homa law without with it this ex-
IRENE danger and menace.
And then again. When a man de-
posts his money in a banking insti-
tuition he is performing an act in
which discretion plays a part, for the
should exercise reasonable prudence
in selecting which shall be his deposit
tory. The state or the government
alone, which alone can exercise di-
rectory supervision we all banks
are the only rightful and proper
powers or institutions to guarantee
depositors. Neither the government
nor the states have been willing as
yet to do this, preferring that the de-
positor when he exercises his free
discretion ssume the risk.
The Republican plank If enacted
into law adds a large item to safe
guard the depositor. 1t first pre-
vents the organization of new banks
without adequate resources and puts
the private fortunes Of the stock.
holders in the status of an ultimate
resource to the par value of the stock
they hold. That will 10 as far to-
wards insuring sound banking in this
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