Morgan County republican. (Versailles, Mo.) 1906-1914, 1908-10-01


Items before a deposition can lose .
cent.
For all the CTS national banks, "a.
| cordlng to the accounts Of May IA. 1904
this guaranty fund amounted to W.
3~34,47O,5S2.
As things now stand. the self intefS0
OF the bank is enlisted to do It's business
honestly, and thus insure tho deposit
or at a great risk to the bank II 1t goes
wrong. What more can be done for the
dcpositor? To this the depositor may
say: I'VE don't wish TO walt until the
| bank pays of Its depositors." But, II 10
wishes he privileges Of q commercial
bank. It must share the delays Of liQul.
| dalton.
II deDositors Wish the privileges OF 3
commercial bank, and yet DO not wish
to wait until assets Of q failed bank
are liqnidated, then they can resort to
legitimate insurance, and obtain I'm.
mediate redemption Of deposits. .
Anything can be insured II the pre-
MUM Is large enough TO cover the risk.
Since the guaranty Of deposits, obtain.
ed by making all the banks contribute
proportlonally, IL manifestly unfair
because 1t holds a bank responsible for
losses over which II had no control-
then let the deposltor 20 to a company
that insures such n risk. That Is a vol.
untary act, and perfectly fair.
The insurance company will charge q
premium based on the character Of the
banks management. II a man ignor-
antly deposits In a speculative bank.
up goes the premium and thus the
public will be driven by business rules
to deposit in banks which insurance
companies Will accept at q lower pre-
MUM. In such a way badly managed
banks would be driven from business.
1t may be said, however, that tho
bank bOrrows from a depOsitor when Ii
receives deposits and, as the bank ex-
acts collateral ana security from Dor.
row"rs, SO the bank should give the
same security TO the dcpositor az the
borrower gives the bank.
If the combined hanks. under q guar
anty law, are expected to guarantee all
dcpositora, then the parallel scheme
would propose that all borrowers
should qua ntce the banks. Thnt sort
OF guaranty by borrowers would never
he accepted for a moment by business
men, because good business men would
be held liill" for the notes given 10
bnrks by poor business men, and that Is
manif"S'ly unjust. II would be equal.
~ unjust that sound banks should guar
antce bad banks.
But the real Hnswc TO the demand
that the Individual bank not all banks,
good and bad together should give It's
dcposI'"r security by a guaranty
fund Is that the bank does now furnish
a large fund in its capital, surplus. etc,
and that provides n wording arrange
icnt between an Individual bank and
the deposition 10 whom II is directly
responsible, without bringing in a
chimcricnl general scheme, which Is
also manifcslIy unjust.
To put III" funds Of The country into
the hands Of less careful men than now
certainly would increase wild banking,
promotions Of speculative enterprises
ana intensity all financial crises. II Is
just III" "rp"Sil" Of what should be en-
phaSIzcI In our bHnklug in order to get
greater safety.
In truth, the safety OF the dcpositors
under any and Hll LEGISLATION primarily
depends upon what the bank docs with
The deposits. III oklahoma under tho
new law thor" viii be rood and bad
banking, just rs tl"r" will he without
a guaranty system. 1t would be we'll
not TO set the seal OF approval on tho
Oklahoma law until the Oklahoma
banks have successfully met a CONNER
cial crisis.
IT the banks, which rely on the In.
surance OF deposits to secure business
unduly expand, then no guaranty fund
Of ! per cent Of deposits viii he more
than n loaf before n cyclone when the
real crisis omr There IL certain to
be some bad banking In Oklahoma. II
not, why was the act passed. Solely
TO make the good pay for the bad.
Those who arc unwilling or unable
TO hold their wi in tho competitive
struggle wish to be helped out by the
State; 80 that the wise and careful
shall pay for tho foolish and rash.