The Paducah evening sun. [volume] (Paducah, Ky.) 1906-1929, 1908-10-29
OKLAHOMA BANKS
ALREADY SHOWING
GUARANTY FAULT
Town Of Thousand Has Four
Banks Some Paying 6 Per
Cent on Deposits.
Town af 100 Has TIVE Strugg.
ling Banks.
STATE CAN Nor LIMIT THEM

Guthrie, Okla, Oct. 29.-Accord-
ing to o. Z Grecian. president of the
First National bank OF McCloud
Okla, the political economists who
have discussed the bank guaranty
plan from a theoretical standpoint,
have made Inadequate forecasts of the
bad feature, which the scheme has
actually developed in the course of It's
short trial in this state.
"Our so-called state guaranty
law declares Mr.. Grecian. lis, in
my opinion. the most vicious ever
enacted by a state legislature. One
of the worst effects conspicuously APP
parent is the fact that new state
banks are being chartered at an alarm
ing rate, and we all know that there
are already entirely too many banks
in the state.
More than fifty new banks have
been started in Oklahoma since Jan.
1, 1905, and many of them, to my
personal knowledge, will be managed
by inexperienced. Incompetent, would
be bankers, who Imagine that under
the guaranty law banking will be
simply snap
There is no denying that, in the
eyes Of the average depositor, right
at the present moment. the guaranty
scheme looks good; 1t is popular with
Idepositors, for the depositor feels he
Is relieved of all responsibility in
selecting his banker. What is the
Inevitable result? That the would
be banker has the advantage over the
substantial. the conservative banker,
VINO has spent ffe BEST years OF ms
life building up a solid Institution.
"The little village Of Harrah, five
miles from here, with a population OF
something like $50 people-all 1t is
likely TO have for some years to come
how has two banks, with total local
deposits of less than SIS. 600. One
of these banks was recently organ
lied under the guaranty law and may
legitimately be regarded as a child
of that enactment.
Right here ] might state that last
fall the older of the two banks was
hard pushed and that | came to rs
rescue and at least helped to keep II
going. But now they are 'guaran-
teed' and in the eyes of many depos-
itors they are perhaps stronger than
my bank. The fact is they have
been paying per cent on time de-
posits-and paying that as normal
rate to some Of our own customers.
81 cite this instance of the situa-
ton in the little town of Harrah
with its $50 Inhabitants and its two
banks, not because of any personal
feeling have in the matter. but sim.
ply because It shows definitely and
concluslvely the extent to which the
Oklahoma guaranty law is Matching
more banks than the state has any
earthly need of or use for, and also
because il puts clearly before the eyes
of every fair man the fact that the
law is actually stimulating the pay.
ment of interest in order to attract
deposits.
Absurd TO Pay O Per Cent ON Deposits
'If you think that any bank car
afford to pay per cent interest or
time deposits without taking rash
and indefensible chances with the
money of the deposltors, then refer
the proposition to any banker or sci
OF bankers anywhere in America out
side OF Oklahoma. You will get but
one answer. and that is that the prop.
osition Is absurd and impossible.
mot far from here is another
town Of about 1000 inhabitants
which has four banks-two of which
have been organized since the enact.
ment OF the guaranty law. That q
town of only $1,000 inhabitants car
maintain more than two healthy
banks Is an absurdity on the face OF
1t. but this absurdity is emphasized
by the fact that the total deposits OF
the four banks altogether are less
than SrO0 900. IL is not too much
Ito say that this kind of thing is going
on all over the state. and that. plainly
by reason of the guaranty law. Okla
homa is being oyerbankei . q
alarming rate" p % y
In this connection thf % 81
not be overlooked th- - ~ ~.
pointed evidences ofS,4 s -sybiis.
score in the minds of s 81