Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1908-08-24
P|CKSFLAWS|N
GUARANTY
SCHEME
HARSH CRITICISM FOR
BRYAN'S PET PROJECT
Postmaster General Meyer
Says Under Proposed Law
Honest Bankers Would Pay
Losses of UnSCrupuIouS,

IBy Morning journal Special Leased WIreI
Hot Springs, Va, Aug. 23-Post-
master General Meyer, who is here
conferring with Judge Taft, today ex-
pressed himself in an interview on
the general political situation and the
democratic proposition FOR guarantee
ing national bank deposits declaring
the latter to be zone step further to-
ward socialism"
There are, he said, thousands of
voters in every state who do not get
out to the polls unless they feel there
is a real necessity for them to vote
Therefore, If interest is not sufficient
ly aroused and the importance of this
coming election fully appreciated, seV-
era states may be lost by default,
I'm the present campaign the demo-
cratic candidate is bringing forward a
short cut and plausible panacea
against panics, the guaranteeing Of de-
posts in national banks. At first sight
this would appear to be sort of in
surance. Insurance however, is a
contract whereby one party voluntar-
lily pays to another party a fixed sum
for indemnity against loss and not TO
exceed an agreed amount.
"The guaranteeing proposition COM
pels by law the banks to pay unknown
sums for future losses and to an un
known amount and subject to un-
known risks over which they have no
control
"The democratic platform pledges
the party to compulsory guaranteeing
Of oil hqDlyq
with its provisions available for all
state financial institutions desiring to
use them.
This guaranteeing Of deposits by all
national banks would mean nothing
less than that the conservative and
honestly managed banks would have
to pay the debts of banks which have
been badly ana dishonesty managed
Under this system there would be
nothing 10 prevent a not ovcrscrupul-
ous banking officer in the competition
of obtaining deposits from going to-
parties and offering them six per cent
for their deposits. claiming that they
had no risk as deposits are guaran-
teed The bank in turn would have
to make investments which would in
volve great risks in order to make any
money.
"If successful this would tend to in
crease speculation which is one of the
misfortunes Of the present day with
the wild cat schemes and high finance
that have been so much in evidence
within the last year
THE proposed system would result in
revolutionizing the methods OF nation
al banks and state banks and trust
companies would be forced to enter
under the same arrangements in order
10 have their deposits guaranteed,
which would bc an injustice to the ma
tional banks as the stockholders in
the national banks are subject to dou-
BILE liability for deposits which is NOT
true of state banks.
THE deposits in savings banks
throughout the country amo' " to |
about three ana a half millions What
greater Injustice can be imagine than
these deposits which are M le by
wage earners ana individuals oi very
moderate means should be taxed in |
order to pay for the losses of misman- |
aged banks.
"In New England ana New York /
there are no stockholders in the saw /
ings banks All the money earned is !
paid to the depositors Therefore it /
would result i'm "a direct tax on the de- I
positors and would decrease the re- |
turns which are coming to them.
As Mr.. TAFT has said in his speech |
of acceptance. the republican party {
prefers the postal savings banks, as a |
method tried and found to be Ft- |
fective. and as reaching many more
people now without banking facilities !
than the new system proposed.
I'm the postal savings banks the /
deposits are guaranteed by the gov
ernment. because the government mas /
received the deposits and made itscH |
responsible They are led back into
the channels of trade by deposItlng /
them In the national banks in the dis /
tricts where they have been brought to /
the postoffice.
THE system Of guaranteeing de /
posits i'm national banks as proposed /
by the democratic party is one step
farther toward socialism
Charles Z. Magoon, provisional gov !
neror of Cuba. talked with Mr.. Tart /
rt r0r1ing conditions in Cuba.
That the people of Cuba are quail 4
fed for self government is the positive /
assertion Of Gov. Magoon. He said the
complicated election law which has /
just been put into practical operation I
IN the island was rigid hut success
ful test Of Cuban intelligence. tn" (
Cuban people. he Indicated. are heart
ily in favor of government ownership +
of public utilities They now own the
telegraph lines and the test of the
popular will. which has just been
made on the question OF private con-
cessions for telephone lines. ne be-
lieves has demonstrated their desire
for government ownership. The test
referred t. was made at the suggcs-
tiun Of President Roosevelt and con-
sisted I'm the submission 90 the eighty
two providences of the draft Of "a Jaw
which. 81 approved and enacted. wouh
have resulted. according To- Governor
Magoon. Ia the telephone business of
the island going into the hands of the