The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1908-10-02
BEST CURE FOR PANICS
GUARANTEE OF BANK DEPOSITS WILL
:. PROMOTE PUBLIC CONFIDENCE

viii Prevent Concentration Of Money
in the Big Centres s 1e
Sc - e.
R. sE. Folk State Treasurer OF
Tennessee, speaking of the proposed
guarantee of deposits in banks, said
| The plank in the Democratic Ma
tional platform favoring the guaran-
tee OF bank deposits under govern
mental direction is the only feasible
remedy that has been suggested for
the panic evil. The importance of a
remedy is apparent when one reflects
that we stand in constant danger of q
decentralization of public confidence
as result of local financial disorder
especially If the disorder be in big
financial center. But the importance
of an adequate safeguard against the
disturbance of public confidence be-
comes vastly emphasized when the
fact is realized that under present
conditions it is possible for group
of great financiers to designedly bring
about a decentralization Of public con-
fidence either as rebuke to the pub
| lie OF for the cold blooded purpose OF
adding to the power and pocket of the
great financiers engineering it. Such
procedure would simply parallel
upon a large seal: the operations
that have frequently taken place on
the stock markets where single stock
has been manipulated up or down for
the profit both ways of the manipu-
lators. The panic last fall was
senseless one SO far as being based
upon any justifable grounds. 1t
came at time when the country was
prosperous and the general conditions
outside of Wall Street were healthy.
Whether it was. a manipulated panic
or not, l do not undertake to say; 1t
| is believed by many that it was. But
the fact that deliberately designed
manipulated panic is possible under
| the present order of things constl-
tutes a grave and overwhelming men
ace to the public welfare, and makes
| it imperative that safeguard should
be erected so as to place 1t beyond
the power of any set of men, no mat
ter how powerful to play battledoor
and shuttlecock with the public con-
f1dence The public confidence is a
thing of highly sensitive organism
and it's healthy condition is of vital
| Importance to the happiness and pros
perity and development of our people
1t is no less than a national crime to
permit public confidence to be made
the football and plaything of market
manipulatorS The guarantee of bank
deposits under the governmental di'
rection will throw adequate protec-
| ton about the public confidence. I'm.
der such a system bank in any To-
cality may fail without the danger Of
other banks in the community being
drawn into the vortex. Under such {
system big banks in big financial cen
tiers may be wrecked without the en-
| tire country being thrown into finan
cial convulsion; in other words
TROUBLES would be confined to theil
own area and could be viewed by the
general public with equanimity so fal
as their general effect should be con
cerned.
The guarantee of bank deposits un
der governmental direction would in
sure the free and healthy circulation
of money through the arteries of oul
commercial system, and relieve the
danger of stagnation of circulation by
reason of local causes. AS the free
circulation of blood is essential to the
we'll being of the physical man, so is
the free circulation of mOney-the life
blood of commerce-essential to Oul
commercial we'll being. 1t is the func
ton of the physician to see to it tina
the circulation of the blood of his
human patient be no, stagnated by {
local disorder So it is proper func
80 &ho RI tn /
that conditions are provided calculat
ed to bring about the free and health!
circulation of the blood of commerce
and to prevent stagnation of the cir
culation by a local trouble.
1t goes without saying that the de
tails Of the proposed system SHOULD
be carefully considered by our law
makers. I do not believe that de
posts bearing interest should be guar
anteed, for the reason that it is not :
function of the government to guar
antee success in any business venture
and money placed on interest becomes
akin to a business venture. But tina
phase is entirely different from tina
of non-interest bearing deposits, which
perform the functions of 1ifehood tt
trade.
I have heard objection made b!
some banks to governmental guaran
tee of deposits on the ground that thu
system proposed requires the goot
banks to pay for the losses incurred
by the bad banks. My answer to tina
is that the good bank now pays To-
the failure of the bad one and pay
much more heavily than it woult
have to pay under the proposed guar
antee system. Statistics show tina
the amount each bank would be call
ed upon to contribute under the guar
antee system would be relatively yer.
small. It is certainly better for thu
good bank to make these small con
tributions than to run the risk of pay
ing with it's existence for the failure
of the bad bank. 81
1t seems to me that bank failures
would be lessened under the deposi
guarantee system for the reason tina
each bank would be interested in thu
proper management Of all other banks
and this would inevitably result ii
more rigid inspection against fraut
and dishonesty.
want further to call attention tt
the plank in the Republican platform
relative to the establishment of posta
savings banks. If such a system
should be inaugurated it would prove
to be akin to the system of guaran
teeing bank deposits; but its unwhole
some effect would be the inevitable
tendency for these governmental!
IoII 70 fofo 70