Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-10-26

have to say: THE new risk injected
into NY business by this underlined re-
sponsibilty ccnpels me to lower the
rate OF interest to those who deposit
with me-"
This consideration is especially I'M
l,ortant to the banker with regard to
deposits because in proportion as his
deposits increase his risk increases in
any system involving insurance of de-
posts Naturally and normally the aim
and desire of the banker is to increase
his deposits--that is the basic adj
vantage which Will lead to success
but under such a scheme as Mi. Bryan
proposes ne would not only be moved
to hesitate about getting too large q
volume OF deposits in his own bank
but the deposits in the banks of his
competitors would be the legitimate
cause of the keenest concern on his
Iart because of the liability involved
Then there is another i'll result in
grained in this scheme While has not
teen much exploited and which is. to
my mind, really the worst OF all; in
surance of deposits without regard to
the degree of care exercised by those
vino receive them would stimulate the
injudiciOus opening of enterprises
The banker is necessarily a conser-
vative element in our business life
at least he is so if he transacts tho
banking business according to normal
regulations. AT the same time it is
known there are those in that Occupa-
ton who are themselves interested
in more or less speculative enter
prises, and that there are many others
who are eager and ambitious to obtain
higher rates of interest than they are
entitled to and that d proper regard
to the element of security would per-
nit
In cases where there are land pro-
motion schemes and mining ventures,
where the risk of disaster is great
and perhaps more notable than any
where else, in Wall street, where thera
is lively speculation in stocks-there
would be Willingness to pay higher
rates of interest for loans, and CORE
spondingly, banks and bankers would
be tempted to pay higher rates of in
terest on deposits than in places where
conservative enterprises are the order
of the day.
What would this mean? Money
would go from localities where it
ought to stay. would be taken away
from legitimate enterprises that are
sound and sane, and sent to specula
tive centers to be invested-and IN
many instances to be lost.
This would be the result: Perma
nent, legitimate enterprises would re-
ceive a setback; factories which ought
to be established and enterprises which
ought to be undertaken could not OBJ
tain money because the capital of the
communities in which they are located
would have been diverted to other To-
caltes where the risks are more num-
erous and extreme and where higher
rates of interest would be paid.
Under Mr.. Bryan's scheme the temp
tation would constantly confront the
overambitious and unconservativa
banker to make loans which should
not be made or to back enterprises
which ought not to be undertaken-in
other words to plunge into speculation
as we had it under the greenback
craze.
You cannot make the business OF
banking normal and as it should be
unless there is an adequate sense of
personal responsibility on the part of
the individual banker. unless he knows
he cannot lend or invest injudiciously
without involving the failure of his
bank and the reproach and loss and
shame which go with it. Now, if he
feels that the deposits OF his bank will
be repaid to his depositors whether
he manages the bank we'll or ill he
will not renounce speculation, and he
will be constantly open to the temp
tations of reckleSSnesS and perhaps of
dishonesty.
Again, what the depositor wants is
the immediate payment of his de-
mands at the moment it is made. He
wants his money then. on the spot
not at some later time. No system OF
guaranty that can be devised would
provide for the actual and immediate
payment of all demands in a bank
situation such as that which we had
last year.