Mexico Missouri message., 1908-10-01

oniciair Of the bank. This IL the fruit
fui cause Of disaster, and 4 has been
Impossible 20 secure legislation protect
Ing banks from their own officials and
been no mutual responsibility. When
all banks become liable for the deposits
Of each, the stockholders win insist upon
criminal ofrense for a bank OFFICIAL 90
loan more than the prescribed amount
to one individual. a. present We have
than one-tenth OF the capital and sur
plus TO one person or corporation, but
the law g only directory. OF course,
Il violates the law, but the law il not
enforced, because the enforcement OF
upon ipnoeen mono Sw S sn2 nna shs
community, since the suspension OF
city or town In which the bank Is To-
Gated.
The law should make II a criminal Of
dsnoe 70 loan more than ths prescribed
| probably be able TO secure the passage OF
law prohibiting market speculation by
bank officials.
Tho Oklahoma plan Is working salts
| factorily. a bank recently failed IN Ok
lahoma; within forty-eight minutes after
e hs notice Ss OF Spenson' sne officer IN
itors, and then the banking board pro-
ceeded 70 collect the assets OF the bank
anu 10 HfOHttuke OFFICIALS GrlnA1nHitYs
| When the business was closed up, the
stock holders passed a resolution thank
ing the state board for It's prompt ac-
tlon. the action OF the board being a
protection to the stockholders, as well
generally.
anty system with a failure where there
/ In no guaranty. In Oklahoma the bank
commissioner telephoned the farmers to
SSa%er IN w @SG set tnsr bTsg ds AND tss
my crop; win be in in a day or two"
In Cleveland. Ohio, bank failed about
n noe ss Wsive ana SundPed psRfsrs sa
Italians stormed the closed doors OF the
busted banking house OF costan Liopea,
S on Orange ans street, today. The police
An objection is sometimes made TO the
guaranty law that new bank would
able 20 promise its depOsitora absolute
4 security through the guaranty law. could
draw the deposits away from conserva-
higher a rate 81 intsres. than Ihe Iatter
could pay. This objection In urged as II
II were an unanBwerabio one. But let
the law NOV makea All Of ah the hnn S iIa hSs
for the obligation Of each bank, the law
should prohibit any abuse OF this security
Ssnking board has Slrendy tsxed the r she
OF Interest that can be paid to depositors.
According TO the rules OF the banking
board. no bank IL permitted TO pay
deposits or more than four per cent on
time deposits running for six months or
more.
II has also been urged as an objection
that under the guaranty system a big
bank would have no advantage over a
little bank. Even II this argument were
I sound, II could not weigh against the
advantages OF the system. for bankH
are made for the people, not the people
Tor the banks. While there are advan.
/ tnKaa In having hins hnnEa al
tages are not SUFFICIENT TO Justify the
! teopardizing OF the depositor or OF the
business interests OF a community.
But, as a matter OF fact, the big bank
! would still have several advantages over
/ the small one. In the first place, II could
make larger loans than the small bank.
/ For instance, n bank with 81. 900. 900 capt.
| tai and surplus could. as at present loan
| 10000 to one person, while a bank with
$780, 600 capital and surplus could only
tage would in itself draw TO the large
bank the large deposits and the men do
ing business upon large scale, for de-
poslts follow accommodations.
Then, too. there Is n certain business
advantage In depostinR with a big bank.
/ II Is worth something to be able TO re-
! fer TO big bank when ones financial
| standing IL being investigated and worth
| still more to have the advice OF n man
OF large business experience when busl-
ness enterprises are being considered.
Besides these. there Is social advan-
taRe In being on good terms with the
| men who are prominent In the banking
win be worth enough 10 Il under the
guaranty system Il should not begrudge
/ the smaller banks the advantage which
the guaranty OF deposits will bring to
| them.
I can not pass from this subject with
| out referring TO the fact that the big
little one. for big banks faii as as wen as as
small banks, and the bigger the bank
the greater the calamity 10 the COM
munity when II falls. No hank II 80 big
as 20 be absolutely beyond danger, and
| n community needs protection against
the big banks failure even more than
h has sometiSnes been objected that
the guaranty system would bring into
the banking business n lower class OF
on the contrary, the guaranty of depoalts.
submit, would. II II made any diner-
ence In this respect. bring into the bank
ing business q better class OF men and
character. It IL not 20 a mans dlscredit
| that he IL not willing that one OF his
fellow men should lose money on his
account. Is II not mark OF character
that man should be careful OF his good
| name and confederate OF the esteem OF
his feliowsf Al present successful far
take stock IN bank. II may be that
his name is desired to give standing and
credit 70 the bank, but such n man IL
bank OFFICIAL may be guilty OF criminal
conduct which win bring the bank into
insolvency. II is even possible that the
| banks assets may be entirely dlaaipated.
and that the honest citizen. who has be-
come stockhoider: may either be con-
PEELED to so beyonn his legal liability or
| meet the bitter criticism OF the deposit
/ tors who have suffered by the failure.
Would It not be worth something TO the
stockholder. n peace Of mind. to know
| that the maximum OF his loaa would be
| the value OF hIa stock and the 100 per
/ cent liability. and that no deposition
| that che guaranty Of deposits would not
lead 10 Degeneration IN the personnel Of
| the bankers.
Il tors. II IN not necessary TO show that the
i advantage TO the bankers would amount
L 70 more than the tax. The examination
/ OF the banks would continue 90 be made
/ at the expense Of the banks, even II Il
were certain that the exaInlnatiOp was