Albuquerque citizen. [volume] (Albuquerque, N.M.) 1907-1909, 1908-09-25
HE SCORES ADVOCATES
OF BANK GUARANTY
SCHEMES
James j. Hill and Professor
Laughlin Point Out Holes
in Bryan'S Pet
Project.
TWO INTERESTS ARE
BOUND Up TOGETHER
Scheme to Set DepOSitorS Against
Stockholders for the Purpose of
Providing Political Issue Is
Being Worked. Says
Ldughlin

Alncoln, sept. Zo.-A communlca-
ton from James j. Hill and the ad-
dress of Prof. James L. Laughlin Of
Chicago university were features of
the Nebraska bankers convention to-
day. Hill declared the bank guar
anty scheme the latest financial fad.
He asserted that for several years the
railroad business had been the object
of incessant attack and said the effect
had been bad for business.
Professor Laughlin spoke on ''The
Guaranty of Bank Deposits" and in
opening his address said:
'"The argument in favor of insuring
deposits is addressed to two classes
of persons, first, the depositors; seq
ond, the bankers and stockholders II
banks.
I'm this country there are persons
who are willing to set class against
class, to stir up antagonlsm between
interests which are really bound to-
gether, provided they can thereby cre-
ate political issues on which they can
be voted into office. Now an attempt
seems to be made to set the interests
of 15,000,000 depositors of our coun-
try against those of the 100000 OF
sta ck4ioldS9s Il banks. In truth, thelr
interests are bound up together; the
loss of one is the loss of the other.
No antagonism exists between them;
and the only explanation of an at
tempt to create such an antagonism
must be due to the supposition that
there are 100000 votes among the
depositors and only 100000 among
the bank stockholders-a supposition
so inconceivable to a loyal American
that we must dismiss ii at once. The
solvency of a bank Is dependent on
the solvency of the business men who
are its customers and borrowers, and
the depositors whose funds are loaned
are no more interested in the solvency
of these business men than the bank
Itself. The passenger on a steamer
and the owners of the steamer are
equally interested in not having the
steamer sink. SO it is with the de-
positor and the bank.
1T is said that it is the depositor
who makes banking profitable. Here
appears a misconception as to the
banking business. In reality the de-
posits are only the raw materials for
profits; they must be wisely and skill
fully managed and invested or there
would be, not only no profits, but
even losses. TO have a profitable re-
suit, we need skilled labor to work up
the raw materials, not only in indus
try, but in banking. There mere ex-
istence of capital does not insure
profits; everything depends upon
what is done with the capital IN
banking, we shall see that practically
everything depends upon wise, hon
est and capable management.
'PeODle ugDOSll IN hanks Vplnntar r.
lily because they get privileges in re-
turn. The banks provide the most
convenient, least expensive and most
generally used medium of exchange
ever devised, by which payments can
be made anywhere in the land, and
all the expense Of tn ) bookkeeping is
usually given free to the depositor
All the monetary services of TIE gem
eral government, all the issues ol
every kind of paper money, do not
begin to compare with the work Di
exchanging goods done by the banks
and clearing houses through cheeks
drawn by depusitors on their ac-
counts. Take that away from the de-
positors for twenty-four hours ant
the whole trade of the country would
be paralyzed, and yet there are per
sons so ignorant as to say that de-
positors are not gwen anything in re-
turn by the banks.
''The ignorance of commercial
banking shown by the advocates of {
guaranty of deposits goes still further
when they demand such a guaranty
on the ground of justice to depositors
that they ought to have plac,
wherein they could leave money anC
get 1t again whenever they want 1t
If a depositor wishes these thing
without the privileges of a CONNER
cial bank, he can put his money II
safety vault. In a commercial banl
it Is never pretended that If all de
positors wanted their money the
could get II. Why? Because a com
mercial bank could not exist If it di,
not invest funds deposited with Il
A solvent bank can always meet casl
demands if given suitable notice o
what is coming. Yet the agitatoI
VINO does not seem to know the diff
ference between safety vault an
a commercial bank, asks for what |
humanity impossible-as a matter q
Justice. He asks that banks shoul,
receive the deposits, but in the sam
breath he asks that they should reve
do anything with them. Justice