Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1908-08-28
FROM JOHN PARDEE
ON BANK DEPOSIT INSUR-
ANCE.

Duluth Star: It is pity that this
declson against the government insur-
ance of bank deposits could not have
been made differently. It is pity
that it had to be made by one Of
Taft's cabinet associates. at a time
ewnn the matter is an issue in par
tisan campaign. It is a pity that it
could not have been made by non
partisan tribunal like an impartial
court, rather than by politician in
the mist of a political fight. It is a
thousand pitles.
For the people of this country will
not willingly admit the truth of Bona
parties decision to the effect that the
national banks of this nation cannot
mutually guarantee that the man who
trusts them with the money shall have
it back Aside from any political is
sue, this desis1on must be wrong.
Banks insure against every other sort
Of loss. They insure each other
plate glass windows. They insure each
other against burglary. They insure
each other against fire. They insure
each other against the crookedness OF
clerks, cashiers and tellers Any stock
insurance company, In essential, is
merely mutual combination to pass
the hat in case of loss. Many banks
are members OF mutual fire, plate
glass, burglary and fidelity companies
which are purely mutual hat pass
ers.
And now comes the attorney general
of the United States and tells the bank
depos1tors Of the country that their in
terests are the only ones that national
banks have no power to insure!
1t is a thousand pities that this de-
clsion could not have been made by
a different man or under different cir
cumstances- both. A thousand
pities
Mr.. Taft, In critlcising the plan for
government guaranty of bank deposits,
says: The greatest safeguard against
recklessness in banking is the deposi-
tors fear of losing his money.
IT this must always be so, then God
help the depositors, and God help the
bankers in times Of trouble!
1t leaves bank depos1tors with the
same q. protection that would be
afforded by fire department throwing
kerosene from the hydrants Fear Of
depositors?" Why, this fear is the oil
on the fire OF panic. This fear sta.
tions the long line before the bank
door, fighting for places, greedy for
small deposits, tearing down the other
wise solvent bank. When 1.-THE fear of
depositors is the safeguard for bank
Ing, the wolves may we'll be sta
toned on guard over the sheep. the
boy with the frecrakers left in charge
OF the powder magazine. Why, Mr..
Taft, the whole financial world is at
work year in and year out to allay
this fear Of depositors Fear of depo-
sitors IS the nightmare of banks. It
IS as unstable as insanity, as fierce as
a whirlWind as incalcuble as a pestl-
lence. This fear a safeguard? Think
it over, MI. Taft-and don t repeat it
The national banks Of Oklahoma
were not obliged to take advantage OF
state insurance. They wanted to do
so because the state banks are taking
away their deposits. That they have
no right to do SO seems strange, when
they insure everything else except depo-
sits now.
The greatest safeguard against reck
lessness in banking is the banks fear
of consequences.
Ism t that better, MI. Taft?