New-York tribune., 1908-01-06
ANOTHER LAWHAKING CRUSADE.

Governor Hoch of Kansas is sounding lhe
legislators of that state in regard 10 Two ques
tions which be is revolving IN his mlnu as iui-
nishinp reasons for calling special session.
One of these is the Bryan scheme for guaran-
teens bank deposits through fund 10 De
formed by state tax upon them. ii'eE
agitation is being carried on In Kansas 10 nave
this plan put into effect there, not primarily pe
cause of anv great merits in the plan itself, but
because Oklahoma has passed law proVluihs
for the guaranteeing Of deposits, and hansas
bankers on the border line fear that Okia-
homaus who have hitherto kept their funds In
Kansas feeling that the banks there were more
secure than in the territory. Will transfer theif
accounts to the guaranteed institutions ID the
new state when the new law goes INTO enec'-
1t is impossible to predict the result OF GOV
erpor Hochs poll. but good many guessers say
that Kansas will be ready to meet Oklahoma
connection Oh the very day when IT'S Dank III
surance goes into effect
Then if is asked what Missouri will do VIII
Kansas City. Mo. wo,ry for fear its banks will
find their most important Kansas accounts
lured AWAY bv the superior attractions OF the
Guaranteed institutions across tie border: VIII
this in turn drive Missouri TO insurine deposit
ors whether the scheme is good or BAD:
GREAT agitation is being carried on III the lexis
na,ers for the same scheme Whether that
state is inpelled by the same motives as MIL
sas or is merely moved by the same oeNou'
LOYALTY TO Mr.. Bryan which seems TO nave hlr
ried Oklahoma into adopting the scheme we 90
rot know but unless the agitation dies away
before the Texas Legislature conFenes lhat
state seems fairly certain to JOIN tne lisI Vi
banl- op.rsntors. and through competition or
otherwise. is likely TO affect its nelghbors- DE-
fore this winters sessions are well under way
4atn in
rusbing the passage Of bank guarantee laws. as
last wear they hurriedly enacted --cent rare
measures And there is every reason 10 eA-
meet that this years pet legislation VIII De just
rs hastv and i'll considered as last winter WIS
Moreover if the guaranteeing of deposits realiF
proyes popular and attracts customers, 1ne ma
tionaI hanks may keenly feel the competftlon OF
th. state institutions and want to have their de-
roSi+s Guaranteed so that it is not unreasOn-
able to expect some pressure at Washington io'
federal abortion Of the same scheme
The guaranteeing of deposits Is certain 10 w
resisted by the stronger and better established
h.rI,c No Convincing answer has been made to
tho two criticisms offered against it-namcIy-
that II Is taxing the safe t0 protect the unSale
Ievvipc on banks whose credit in their respec
tive communities is practically aS S"oo dS 'ndI
of the cities or the states themselves IN order
+o holster lIp institutions managed by amateurs
or by- snccul3tors: and. again, that by permit
tinp The weaker hanks TO lean upon the others
if Is giving encoura cement to recGlessnesS' LII
otbnr words bank managers now generally nave
IN he circumspect in order to avoid public dls-
,rpst whereas under the Bryan system Pubic
v-atchfu1ness might be allayed by the knoWl-
edge that depositors were guaranteed against
loss That would seem to be the probaole
tendency though to be sure. the advocates OF
tho nIan say il would have the contrary ehect'
that indeed the stronger and more conservative
hanks knowing that the losses through bank
failures would he paid out of a fund to when
+hev were the chief contributors would exercise
a salutary supervision over the weaker ana lesS
well conducted.
This LEGISLATION is suggested primarily as
preventive of boarding. but 1t may he doubted
whether the existence OF a fund of a few mill
ions TO protect depositors against losses would
II, a time when confidence was badly unSeltled
rroyo an effective check to panic Inc ue-
nositor with Il disposition to hoard would say
ia himself: Il need my money to use IN my
..husiness and I cannot afford t. wait II the
.hanlz fails until its business is settled up,
..oven though there is no possibility OF loss III
..the end Fear of ultimate loss is one mouVe
for boarding Fear of great temporary NEON
yaniencc IS at least potent a motive 10
maintain fund adequate to pay at once In fuii
depositors of all institutions suspending III
nanic would he mpracticable. Like most OF
the hapny thoughts that have been suggested Ior
making uanics forever impossible, this one would
,,rohahlv nrove Of no considerable value.