The Butler weekly times. (Butler, Mo.) 1881-1918, 1908-10-01
GUARANTEED BANKS.
By William Jennings Bryan, Topeka, Kansas, August
~, 1908.

pnutlCdlly OPPOSES IL. ne says
THE Democratic platform recommends
a tax upon national banks and upon /
such state banks as may come In. In the |
nature OF enforced insurance to raise a /
guaranty fund to pay the depositors Of
any bank which fails" y
And then he questions the right Of the |
government to enact such a law, saying; |
How state banks can be included in |
such scheme under the constitution |
is left In the twilight zone Of state rights |
and federalism so frequently dimming |
the meaning and purpose OF the promises
of the platform. IL they come In under |
such system, they must necessarily be |
brought within the closest national con- |
troll, and so they must really cease to be
state banks and become national banks"
His solicitude for the state bank will
hardly impress the country. for he is
quite Indifferent to states and their re-
served rights when he deals with other
subjects, When Congress is In the con-
troll OF those who want to legislate for
the whole people rather than for the
few, it will not be difficult TO frame a
law under which state banks can avail
themselves OF the advantages of fed
eral law guaranteeing the deposits of
national banks, just as 1t was easy In
Oklahoma to frame a law which permit
ted national banks to take advantage
of the state guaranty system. II will also
be easy to enact a federal law which will
permit national banks to avail them
selves OF state guaranty systems until
a national system can be secured, At
torney- General Bonapartes ruling,
whether Is correctly interprcts the law
or not, would not bring such constcrna-
ton as II does II the Republican candi-
date favored law allowing national
banks to take advantage of state systems
for the protection of depositors, but Mr..
Taft's hostility to all guaranty sys-
TENS is shown-in- objection which
he offers:
1.-THE proposition Is to tax the honest
and prudent banker to make up for the
dishonesty and imprudence of Others.
No one can foresee the burden which,
under this system, would be imposed
upon the sound and conservative bank
ers of the country by this obligation to
make good the losses caused by the
reckless, speculative and dishonest men.
who would be enabled to secure deposits
under such system on the faith Of the
proposed insurance; as in its present
shape, the proposal would remove all
safeguards against recklessness in bank
ing, and the chief. and, In the end.
probably the only benefit would accrue
lighted to enter the banking business
when 1t was certain that he could enjoy
any profit that would accrue, while the
! risk would have to be assumed by his
honest and Woodworking. fellow"
| He even pictures dire disaster and de-
clares that IF the proposal were adopted
exactly as the Democratic platform sug-
| gests, 1t would bring the whole banking
system Of the country down in ruin"
| AS an after thought, he suggests that
a voluntary system might be tolerated.
but as his objections to n compulsory
system apply just as well to voluntary
system We may fairly count him against
all legislation which has for its object
the guaranty Of depostors.
As Mr.. Taft's argument Is that pre-
scented by the big banks which put their
own selfish interests above the welfare
| of the depositors and the safety of the
cSfffmSpiK 1t is worth while to answer
fhe several propositions which he ad-
vances.
! Let us take the first sentence. that
| ''the honest and prudent banker would
be taxed to make up for the dishonesty
and imprudence of others" Is not this
| true of all restrictions on banking
Does not the honest and prudent banker
under existing laws, suffer In order that
the depositor may be protected from tn,
dishonesty and imprudent? If we hat
no banking laws at all, and banking
was done by private individuals, tn,
honest and prudent banker would saw,
the money that he now pays for enforced
examinations of this bank. and he coul,
at times make interest on part of tn,
money which he Is now required to kee,
In his vault as a rigid reserve. But he
cause some bankers are not prudent
| THESE laws place II DuTutU upon the RuOt
as well as upon the bad. 1t being Difficult
to distinguish the prudent banker from
the imprudent one until a bank actual.
. fails.
In like manner 1t might be said that |
all people were careful about fire, fir
insurance rates need not be as high a
!, they are, but the careful have to pa,
higher rates than they should, becaus
some are not careful. Life insuranc
rates are higher than would be neces
sary to cover the actual risk IL every
body took care Of his health. and here
: too, the cautious are burdened becaus
. some are careless of their health. A
insurance is open to the same objection
and yet insurance of all forms is grow
ing, and the insurance Of depositors
any other form OF insurance-and.
may add, 1t yields the largest return o
5 the investment.
4 Mr.. Taft complains that mo one ca
$ foresee the burden which. under TIL
system, would be imposed upon tn
$ country by this obligation to make goo
the losses caused by the reckless spec,
e lative and dishonest men," etc. We ha,
: the past to guide us. and we have ret
: son to believe that the loss will be les
in the future than In the past. becaus
d when banks become mutually responsib
= for each others deposits they will
= sufficiently interested In each other
e favor better regulations and greater r
y What has Mr.. Taft done to protect d
positors from recklessness and specul
e ton? While he refuses to protect depo
o itors, he praises the Aldrich-Vrtslar
IT law which invites speculation and stot
l. jobbing.. In declaring that the syste
G. proposed by the Democrats would r
le move all safeguards against recklessne
d in banking" Mr.. Taft betrays an |
re norance of the subject, for the Pill
Of does not propose the removal Of al
t. safeguards. In fact, 1t contemplat
T. stricter regulations Of the banks, al
he Oklahoma has already made the bankil
he regulations stricter.
IS He declares that ''the only bene
n would be delighted to enter the banki
Y, business when It was certain that
in could enjoy any profit that would @
he crue, while the risk would have to
H. assumed by his honest and hard-wor
ing fellow" The present banking ID
BY requires that a certain amount Of capi
or that law would still stand. To enter I
RS banking business. therefore, q m
an would either have to have the capi
H. himself or secure the confidence Of m
ms who had the capital. And this capit
together with the 100 per cent liabilil
would be guaranty that thu I ssockno
,ss less officials. Why would speculate
ne be delighted to enter the banking bu
an ness under the guaranty systemf
Is, IL not relieved from pecuniary oblll
"a, ton, nor 10 he relieved from crimil
is. liability. He would have nothing to q
in holders have anything to gain by Ind
on The chief cause of bank failures 10
al making of excessive loans to direct