Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1908-08-28
We Will Make the Democrat the Best Weekly Paper State Watch Us Go Some

tne sound and conservative bankers
OF the country by this obligation tc
make good the losses caused BY the
reckless, speculative and dishones
men," etc. We have the past tc
guide US, and we have reason to be
lieve that the loss will be less in
the future than in the past, because
when banks become mutually respon
sible for each others deposits they
will be sufficiently interested in each
other to favor better regulation ant
greater restrictions.
What has Mr.. Taft done to pro
tect depositors from recklessness
and speculation? While he refuses
to protect depositors, he praises ths
Aldrich-vreeland law, which invite.
speculation and stock jobbing. In de
claring that the system proposed by
the democrats would remove al
safeguards against recklessness il
banking" Mr.. Taft betrays an ig
norance Of the subject, for the plar
does not propose the removal o.
any safeguards. In fact, 1t contem
plates stricter regulations of the banl
and Oklahoma has already made tn,
banking regulations stricter.
He declares that "the only benefit
would accrue to the speculator, who
would be delighted to enter the
banking business when it was Ger
tain that he could enjoy any profit
that would accrue, while the risl
would have to be assumed by his hon
tst and hard-working fellows Tht
present banking law requires that
certain amount of capital shall bt
invested in the business, and tha
law would still stand. To enter thu
banking business, therefore, a mai
would either have to have the capi
tai himself or secure the confidence
Of men who had the capital. And thi
capital, together whit the 100 PEI
cent liability, would. be a guarant,
that the stockholders would not In
tentionally select careless officials
Why would "speculator" be "de
lighted to enter the banking bust
ness" under the guaranty system
He is not relieved from pecuniary OBJ
legation, nor is he relieved from
criminal liability. He would have
nothing to gain by carlessness, mo-
would the stockholders have any
thing to gain by Indifference.
The chief cause of bank failures
is the making of excessive loans II
directors or officials of the bank
This is the fruitful cause of disaster
and it has been impossible to secure
legislation protecting banks from
their own officials and directors. Wh
Because there has been no mi
tual responsibility. When all bank
become liabk for the deposits 0
each. the stockholders will insist W
on the enactment Of a law making
Il a criminal offense for bank OF
ficial to loan more than the pre-
scribed amount to one individual. A
present we have a law prohibiting
the loaning Of more than one-'enu
of the capital and surplus to Oh
person or corporation, but the la'
lis only directory. Of course, Tn
comptroller can suspend bank If
violates the law, but the law is nc
enforced. because the enforcement Q
such law would throw the punisi
fnent upon innocent stockholders an
upon the community, since the SUI
pension of a bank inflicts gred
loss upon stockholders and disturb
the business of the city or town
which the bank is located.
The law should make 1t a crimins
offense to loan more than the pr
scribed amount to one person and W
would probably be able to secur
the passage Of law prohibiting ma
ket speculation by bank officials
The Oklahoma plan is better.
bank recently failed In okianoma
within forty-eight minutes after th
notice Of suspension, the officer
charge had authority to pay all d
positors, and then the banking boar
proceeded to collect the assets OF th
bank and to prosecute the ofilcia
criminally. When the business W.
closed up, the stockholders passed
resolution thanking the state ooa'
for It's prompt action. the action
the board being a protection to u
stockholders, as well as to the depo
itors and to the public generally.
Compare this failure under u
} guaranty system with failure whe'
there Is no guaranty. In Oklahon
the bank commissioner telephoned .
farmers to come in and get their M
ey and the answer was, Il am bu'