The Butler weekly times. (Butler, Mo.) 1881-1918, 1908-10-01

The United States government reQuhes
the deposit OF specific security. wheh u
though Il can examine the bank at any
time: the state requires security when II
deposits money In bank the county
requires security and the city requires
security; even the banks REQUIRE sec onaS
from the officials who handle money,
Why should the depositor be LETT 10 take
his chances?
Not only is the depositor without pro-
lection. but the security given 70 na,lon'
state county and city lessons MS secur-
ity. They are preferred creditors; they
have n mortgage on the gilt-edged as
sets and the depositor must get along
as best he can with what remains. why
are the interests of depostors thus neg
lected? ~
A bank asks deposits on the theory
that the depositor is sure OF the return
of his money, and the laws ought 10
make the facts conform TO the theory.
The depositor, the community ana the
banker himself will be benefited by legis-
laton which will give to every deposi.or
the assurance that that which rs coim
mitted to the keeping of the BANK Will
be available to meet his needs AT any
time such is not the case today, Tor
while all banks are reasonably secure
they are not absolutely so. rms state
mcnt can be verified In several ways
First: The President has advocated u
general, in presenting an argument ~ lts
favor pointed out that many millions
are sent to European savings panks
every year by Americans OF foreign
birth, who prefer to trust the sta,e w,
situations of the nations beyond the sea
rather than the private banking institu-
tons here.
Second: 1t is known that CONSIDER
,1t,tr-,rrrrurrrt- money s-iH-hidiHsrC
amount increasing with the approach OF
panic or business depression. rms money
is not only withdrawn from actiVe use,
int is likely to be withdrawn Just at
the time when money is most needed ana
when the withdrawal will increase the
! financial disturbance. 1t is Impossible 10
reason with fear; 1t is futile 10 tel nleu
that they will probably get their money
| The moment the depoSitors suspect
| bank, they hasten to destroy its solNency.
| Dstrust, and distruSt alone, can explain
| the hiding of money. - -
Third: The increase in the issue OF
| money orders, payable 10 the orueI VI
| the purchaser. Is another evidence tnat
people are seeking greater security ior
| their money The banks VIII pay an IN
| terest upon deposits, and yet those VINO
buy money orders prefer to lose the IN
terest, and, in addition to that, pay the
price of the money order TO secure the
government guaranty.
| Fourth: National banks confess tnat
| their banks are not secure when they
| oppose the guaranty OF state banks on
| the ground that 1t would lessen the de-
posits in national banks and state bank
ers confess that their banks are not Sc
cure when they oppose national guar,
! anty system on the ground that IL VIII
| draw deposits away from state Dahks
If you want to find whether banks are
| absolutely secure, ask the directors tc
give YOU their personal note to secure
| your deposit and YOU will learn that they
will not bear the risk which they ask you
| to bear
| Fifth: The experience of Oklahoma
tors do not feel that their money Is SAFE
in unsecured banks. On the 18th OF De
cember, 1907, the Oklahoma legislature
| enacted q depositors' guaranty law
which became operative February 4tn
1905 BY the provisions OF THIS law. al
state banks, and as many national bank'
as desire to avail themselves of the law
are taxed one per cent on their deposits
and the money thus collected is put into
guaranty fund The banking board i
authorized to make additional assess
ments from time to time to keep TN
fund up to this amount and is directe'
to take possession of any insolvent bank
nav the depositors in full, and remburs
the fund by collecting the assets OF IN
failed bank Five hundred and ffty-fiv
banks, had come under the provisions 0
this law on the 14th of last May, leayy
ing but 1855 unsecured banks (all nationai
in the state. Statements are made b
the banks in December and May. BE
tween these periods the secured bank
gained in deposits 81. 2S7, 765 %, while tn
unsecured banks, all national, showed
r decrease in deposits of 81, l0l, S0i.S6
large part of this increase represente
D money brought from hiding or from VIII
out the state. but the decrease IN N
/ unsecured banks can only be explained J
\ one way. large number OF depositor
) withdrew their money from the unst
= cured banks, and deposited 1t In the SO
cured banks. and this. too. in spite.
the fact that in order to prevent VIII
drawals, the unsecured banks, in SON
instances. offered a higher rate OF intel
I est than the secured banks were permi
: ted to pay and it must be remembers
also that the banks which suffered a los
e of deposits were all national banks An
i to make 1t certain that the difference WI
: caused by the guaranty law. the 8
y cured national banks gained, while q
n unsecured banks lost. While the deposi
i were increasing in the guaranteed banl
d of Oklahoma, they were failing In u
j. sas-the decrease being 81. 153. o26.H
tween March 31st and June 18th.
+ No amount OF criticism of the tim
!, depositor can change the facts; the pc
|. pie who deposit money want more $
Fl curity than the laws at present 81
n more security. and. IL necessary, tn
will send their money to another state
IS For many years efforts have been ma
g. IN Congress and in the various states.
secure law guaranteeing deposits, b
the influence Of the great banking ms
tutions has been sufficient to prevent q
ton. Last fall. however. when I
banks, by a concerted action. suspend
PAYMENTS on checks. the depositors we
everywhere brought to realization
the fact that their deposits are In fa'
loans. payable on demand under OF,
nary circumstances, but payable at !
= will of the bank In emergencies. I
Y, depositors suffered a considerable Il
during the suspension of payments, a
they have not forgotten the lesson viii
thew then learned. The Democratic par
being more free than the Republic
party to respond to the needs of
masses Of the people. inserted the I
lowing plank in its national platform
I'VE pledge ourselves to legislation
vt which the national banks shall be
n uuired to establish a guaranty fund
tie the prompt payment Of the deposit'
nut az sny insolvent national bank. under
ed equitable system which shall be av'
g. able to all state. banking Institute
be wishing to use It"
This principle has been applied In {
he lahoma and the results have been "
lb- satisfactory. The average annual !
aw to depositors In national banks dur
he the last forty years has been less Il
ST. one-tenth of one per cent OF the depos
re and the loss to the fund In Oklahon
Ike has been absolutely nothing during
he six months in which the law has been
IL The Republican platform IL silent