The Globe-republican., 1908-01-23

mirably. Statesmen and financiers
are everywhere seeking cause and
cure. An asset currency, more
flexible system Of finance, an IN
crease of circulating medium through
otherwise unnecessary bond issues
and various other remedies have been
suggested by the savants, but with
remarkable rapidity the thinkers are
turning to the simple remedy known
as the depositors' guaranty fund
proposition, and partly to consider
the specific proposition you have
been assembled In extraordinary ses-
sion.
DeposItors' Proposition.
It Is not primarily a bankers
proposition. It Is a depositors'
proposition, because there are hun
dreds of deposltors to every banker
and their interests are really para
mount. Banks are a modern neces-
sity. They are essential not only to
modern commerce, but they touch
government at vital parts. 1t Is there
fore governmental problem. But
while the guaranteeing of deposits is
primarily a depositors' and govern
mental proposition, it will contribute
immensely to the peace and happi-
ness. To strengthen and Increase
this mutual confidence they have
called In their balances from reserve
centers, collectly closely outstanding
loans made new loans sparingiy and
reluctantly, and piled up in their
vaults a reserve unprecedented in the
history of the state.
A depositors' guaranty law, 1t Is
believed by many of the ablest finan-
ciers, will give depositors perfect con-
fdence in banks and permit the bank
ers to liberate these boarded millions
into the channels of commerce, where
they are greatly needed. When the
individual borrows money from a
bank he is properly required to give
satisfactory security for it. When he
loans his money to the bank, which
he does when he makes deposit
why is he not also entitled to ample
security? He has the security, OF
course. which the character of the
bank and its managers and certain
provisions of the law give him, but
this is not sufficient. This is not con
sidered sufficient by the national gov
ernment which requires deposit Of
bonds to secure bank note circula
ton; this is not considered sufficient
by the state, which requires munich
pal bonds. dollar for dollar, to secure
all of its deposits; this is not consid
cred sufficient by the counties, which
take similar precautions to protec1
themselves; and this does not satisf!
the intelligent depositor, neither does
1t any longer satisfy the thougntfu
banker.
Confidence Not Currency.
Certainly what the country ha'
needed in this recent emergency ha
been confidence and not currency
There is plenty of money in the coun
try. but it has been withdrawn from
legitimate channels of trade. Mort
than 200 millions of dollars have beel
: withdrawn from the national bank
alone of the country, and the expert
ence of the national banks has beel
shared also by the state banks every
where. What we need, therefore, i
a policy that will bring all this none
out of hiding back into the bank
and into the channels Of trade, tc
gether with the countless million
which for similar reasons have a
, ways been boarded by timid people
I believe the depositors' guaranty LAY
will do this.
Should congress pass derositor'
guaranty law, 1t would, of course, r.
: late only to national banks, and |
I Kansas would benefit only 200 Of ou
: 900 banks, while the proposed stat
+ law would include national as well
! state banks. The chief oppositio
! among the bankers of this state, 8
! the correspondence Of this office wi
! show. has come from national ban
q ers. This is indirectly very stror
u argument in favor of the propose
Il legislation, for such a law could giV
5 the state banks an advantage unle'
n it strengthened the confidence of d
0 positors in them. Suppose congre'
Q should pass a law for the exciusi'
u benefit of national banks. In VIII
a predicament would the state banl
u then find themselves? Is not o.
u proposition far more just and fair,
!, asmuch as 1t proposes to admit n
q tionaI as we'll as state banks to pa
Ie ticipate in its benefits? have
J. rect information from the comptr'
y ler, bearing date Of January l3, IN
Y the right Of national banks to par
a cipate in state guaranty law b
not been decided and that no ruli
of this kind has been made by t
IS comptroller Of the currency, and
re have received a long letter, und
k date Of January IL, from ex-com
Se troller Dawes, favoring this guaran
f. proposition 1t is my desire II
le both national and state banks sh
" equally share the benefits.
o. Necessity Demands.
Il. The necessity for immediate acti
Ne lin this matter, creating an emergen
ic alone justifying this extra session,
n addition to the financial conside
u 49,. ainn,,aand ahnra Il found In