The Birmingham age-herald., 1908-08-28

security. and. if necessary, they vii send their money to another state
 For many years efforts have been mad in Congress and in the various state to secure a law guaranteeing deposits but the influence of the great bankini institutions has been sufficient to pre- vent action. Last fall, however whei the banks by a concerted action sus pended payments on checks the depost tors were everywhere brought to real ization of the fact that their deposits are in fact loans payable on demand under ordinary circumstances, but pay able at the will of the bank in emerg ences The depositors suffered con siderable loss during the suspension oi payments, and they have not forgottef the lesson which they then learned Phe democratic party. being more free than the republican party to respond to the needs of the masses of the people. in- serted the following plank in it's national platform:
 We pledge ourselves to legislation by which the national banks shall be re- quired to establish guaranty fund foi the prompt payment of the depcsitors of any insolvent national bank. under ar equitable system which shall be availa- ble to all state banking institutions wish ing to use 1t.
 This principle has been applied in Oklahoma and the results have been very satisfactory. The average annual loss to depositors in national banks dur ing the last 40 years has been less than one-tenth of one per cent of the deposits, and restrictions has been absolutely nothing during the six months in which the law has been in operation.
 -tla Af, the subject and the republican candidate not only does not advocate compulsory system, but specifically and emphatical- ly opposes 1t. He says:
 "rhe democratic platform recommends a tax upon national banks and upon such state banks as may come in, in the na- ture of enforced insurance to raise a guaranty fund to pay the depositors of any bank which fails
 Right To Enact Law.
 And then he questions the right of the government to enact such law, say ing:
 How state banks can be included in such a scheme under the constitution is left in the twilight zone of state rights and federalism so frequently dim ming the meaning and purpose of the promises of the platform. If they come in under such a system. they must neees- sarily be brought within the closest aa- tonal control. and so they must really cease to be state banks and become na- tional banks
 His solicitude for the state bank will hardly impress the country, for he is quite indifferent to states and their re- served rights when he deals with other When Congress is in the con- trol of those who want to legislate for the whole people rather than for the few it will not be difficult to frame q law under which state banks con avail themselves of the advantages of a federal law guaranteeing the deposits of national banks, just as it was easy in Oklahoma to frame law which permitted national banks to take advantage of the state guaranty system. It will also be easy to enact a federal law which will per init national banks to avail themselves of state guaranty systems until a nation al system can be secured. Attorney Gen. eral Bonapartes ruling whether it cor rectly interprets the law or not, would not bring such consternation as it does if the republican candidate favored a law allowing national banks to take ad- of state systems for the protec- ton of depositors, but MT. Taft's hostility to all guaranty systems is shown in the objection which he offers:
 Taft's Objection.
 "The proposition is to tax the honest and prudent banker to make up for the dishonesty and imprudence of others. No one can foresee the burden which under this system would be imposed upon the sound and conservative bankers of the country by this obligation to make good the losses caused by the reckless. speculative and dishonest men who would be enabled to secure deposits under such a system on the faith of the proposed insurance, as in it's present shape the proposal would remove all safeguards against recklessness in banking, and the chief and In the end, probably the only. bepefit would accrue to the specu- lator, who would be delighted to enter the banking business when it was certain that he could enjoy any profit that would accrue, while the risk would have to be assumed by his honest and hard working fellow
 He even pictures dire disaster and de- clares that If the proposal were adopted exactly as the democratic platform sug- gests, it would bring the whole banking system of the. country down in ruin"
 As an afterthought he suggests that voluntary system might be tolerated
 
 tenn apply just as well to a voluntary system we may fairly count him against all legislation which has for its object the guaranty of depositors.
 As MT Tafts argument is that pre- sented by the big banks which put thelr own selfish interests above the welfare of the depositors and the safety of the community, it Is worth while to answer the several propositions which he ad vances.
 Banking Laws.
 Let us take the first sentence, that "th, honest and prudent banker would bt taxed to make up for the dishonesty ant imprudence of others Is not this tru, of all restrictions on banking? Does no, the honest and prudent banker under ex isting laws suffer in order that the de positor may be protected from the dis honest and imprudent? If We had nt banking laws at all. and banking was don, by private individuals, the honest an, prudent banker would save the none, that he now pays for enforced examina tions of his bank, and he could at time make interest on part of the none, which he is now required to keep in hi vault a rigid reserve. But becaus some bankers are not prudent, these law place a burden upon the good as well a upon the pad, IL being dlnlcult to dfstin guish the prudent banker from the i'm prudent one until bank actually fails.
 In like manner it might be said that i all people were careful about fire, fir insurance rates need not be as high a. they are, but the careful have to pa higher rates than they should becaus some are not careful Life insurance rate are higher than would be necessary f cover the actual risk if everybody tool care of his health, and here, too, the eau tions are burdened because some are care less of their health. AZ insurance i nnen to the same obiection- and vet in