The morning journal-courier., 1908-01-15
A PANIC PANACEA
Suggestion Has Be- come Law in Ok
 lahona.
MAY BE LAW IN KANSAS
Government Guaranty of Bank De- posits by Means of a Fund Con-
 tributed by the Banks.

William J. Bryan stated that while in Congress back in the times of the 1893
 crisis he had presented bill which
 would prevent runs on banks II en-
 acted. He referred to a plan of gov
 ernment guaranty of bank deposlts
 through the employment of a fund
 contributed by the banks. It was to
 be in effect a joint bank guaranty or
 their deposits with the government
 standing back of the arrangement and
 enforcing it. Such financiers as ex-
 pressed themselves were inclined to
 ridicule the suggestion, and it called
 out a particularly bitter expression Of
 ridicule from Judge Alton E. Parker,
 which was of interest chiefly in exhib-
 iting his personal feeling against
 Bryan.
 Now, as we have heretofore noted. | the Oklahoma legislature has embodied 1 the Bryan suggestion into State law
 This requires all Oklahoma State
 banks to pay into a fund in the cus-
 tody of a State banking commission
 one per cent of their deposits aver
 aged apparently for the first year un-
 der the law, and when a bank falls the State commission will pay depos- itors from the fund and take charge
 of the banks assets. If they are not sufficient to repenish the fund the
 other banks will be assessed After this law had been enacted Bryan was
 asked to address the Oklahoma legis
 lature, which he did on Dec. 21, and
 in this address he said that the sug-
 gestion grew out of bad bank fail- ure in his home town when he was in
 congress. He tried to have congress enact such a plan for the national
 banks, but the bill stuck in committee
 and was no more heard of. He then
 tried to have the Nebraska legislature enact a similar bill for the State banks, and failed. Now he says that the Commercial club of Lincoln, Neb., : composed wholly of business men, is taking vote on the subject and of : 800 replies so far received those in } favor of the plan are as 10 to 1 to those against
 But this aside. The action of Okla : homa promises practical consequences . of considerable moment, It has forced
 upon bankers all through that section
 of the country an active discussion of
 the subject. It is not theory. but a l condition, that now confronts them
 Many people in Oklahoma, distrusting the territorial banks, have been carry , ing deposits in the banks of Wichita , and other Kansas towns along the ' |. lz. ,ra, } of the new State law they are now l withdrawing these deposits, and Kan Q sas bankers are accordingly agitating 5 for a special legislative session to en- act a similar law for that State. This
 in turn disturbs the Kansas City :. (Mo.) bankers, who fear that their de-
 posit accounts will suffer from with s drawals in favor of Kansas banks just Q over the State line.
 A dispatch from Kansas City to the Q New York Evening Post says that present indications are that Kansas a will have law like that of Oklahoma c to take effect at the same time (F'eb. f Is next), and that this will force Mis-
 souri into similar action. In that , case other adjoining States might fol-
 low suit in self-protection. and so the a plan might grow into adoption through
 all the States and then through the
 national government in relation to the :, national banks: for the Oklahoma na-
 tional banks want to come In under
 the State law in this particular. The s Kansas City dispatch says that bank 7, CTS of the Middle West are talking ot v little else just now than the Oklahoma
 plan and adds
 Ut is held by the advocates of the y plan that it will bring back to the 7 banks the millions that have beer " withdrawn, and that 1t will create 2
 stability heretofore unknown among the bankers of the new States. Many v bankers who were unfriendly to tho " plan when 1t was introduced into tho " western legislatures two years ago '. have been converted by the experienc, sl of the past few weeks and are nov U it's earnest advocates. At any rate, it i, U the most important feature of thu I- most important feature of the westeri Y financial situation at this time. : It needs to be said at this point tha . the plan involves by no means as rad IL ical an extension of governmental func e tions as may appear, Public examina 5 tion of banks and regulation of thei d affairs are now common both in tn States and in the nation respecting ma u tional banks; and a government whic 'o undertakes to protect depositoi le through public examinations, restric u tions upon loans and requirements a at to reserves, might seem to be takin T. no more than a logical step forwar
 when ii undertakes to provide guar ! anty of the effectiveness of its reguls '' tive provisions
 We have, however, a departure fror 'e' existing policy in requiring sound an II solvent banks to bear the consequence .ie of the misdeeds and bad judgment :! other banks, and here we find groun 10 for serious discussion. The step pro l posed in a measure wolud destroy thi individuality and independence in banl Ing which has been characteristic I the American financial system or lat d.