The Nevada County picayune., 1908-09-03

uepoSltors m national banks during the last 40 years has been less than one tenth Of one per cent of the deposits and the loss to the fund in Oklahoma under bet ter regulations and restrictions has been absolutely nothing during the six months in which the law has been in operation.
 The Republican platform is silent on the subject, and the Republican eahdi- date not only does not adVosHte a eum- pulsory system. but specifically and eTn- phatically opposes it. He 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 os any bank which fails"
 And then he questions the right or ths government to enact such law. say ing;
 How state banks can be included tn such q scheme under the constitution ts left in the twilight zone of state rights and federalism SO frequently dimming tho meaning and purpose of the promises ot the platform. If they come in under such system, they must necessarily be brought within the closest national control, and so they must really eease e. be state banks and become national banks"
 His solicitude for the state bank win hardly impress the country. for he ts quite indifferent to states and their re- served rights when he deals with other subjects. When congress is in the con trol of those who want 10 legislate for the whole people rather than for the few. u Will not be dlf1Cult 10 frame A IAN under which state banks can avail them selves of the advantages of a federal law guaranteeing the deposits of national banks, just as it was easy in Oklahoma 10 frame law which permitted national banks to take advantage of the state guaranty system. It will also be easy to enact federal law which will permit national banks to avail themselves of state guaranty systems until national system can be secured. Atty Gen. Bona parte's ruling, whether 1t correctly in- terprets the law or not, would not bring such consternation as it does if the Re- publican candidate favored a law allow ing national banks to take advantage of state systems for the protection of de, positors. but MT. Tafts hostility to all guaranty systems is shown in the ob- jection which he offers:
 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 bankers of the country by this obligation to make good the losses caused by the reckless, spec ulatiNe 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 banking, and the chief. and in the end, probably the only benefit would accrue to the speculator. who would be delighted to enter the banking business when 1t was certain
 
 accrue. while the risk would have to be assumed by his honest and hard-working fellow"
 He even pictures dire disaster and de- clares that Eff the proposal were adopt ed exactly as the Democratic platform suggests it would bring the whole bank ing system of the country down in ruin.
 As an afterthought he suggests that voluntary system might be tolerated, but as his objections to a compulsory sys- tenn apply just as well to a voluntary sys-- tom E.fx x.l, l,f. S.gf all legislation which has for Its object the guaranty of depostors.
 The chief cause of bank failures is the making of excessive loans to directors or cause of disaster and 1t has been impos sible to secure legislation protecting banks from their own officials and di- rectors. Why? Because there has been no mutual responsibility. When all banks become liable for the deposits of each. the stockholders will insist upon the en- actment of law making 1t criminal offense for a bank official to loan more than the prescribed amount to one in- dividual. At present we have a law pro- hibiting the loaning of more than one- tenth of the capital and surplus to ono person or corporation, but the law is only directory Of course the comptrol- Ter can suspend a bank if 1t violates the law. but the law is not enforced, be- cause the enforcement of such a law would throw the punishment upon inno- cent stockholders and upon the commu- nity, since the suspension of bank in hicts a great loss upon stockholders and disturbs the business of the city or town in which the bank is located.
 The law should make it a criminal of fense to loan more than the prescribed amount to one person and we would probably be able to secure the passage of a law prohibiting market peculation by bank officials.
 The Oklahoma plan is better. A bank recently failed in Oklahoma; within AS minutes after the notice of suspension. the officer in charge had authority to pay all depositors, and then the banking board proceeded to collect the assets of the bank and to prosecute the officials criminally. When the business was closed up. the stockholders passed reso- lution thanking the state board for it's prompt action, the action of the board being protection to the stockholders, as we'll as to the depositors and to the public generally.
 An object is sometimes made to the guaranty law that new bank would start up across the street. and being able to promise it's depositors absolute security through the guaranty law could lively managed banks, by offering a high rate of interest than the latter could pay. This objection is urged as 1T 1t were an unanSwerable one. But let us see how easily it can be met. Since the law makes all of the banks liable for the obligations of each bank. the law should prohibit any abuse of this security by any bank. and in Oklahoma the banking board has already fixed the rate of inter- est that can be paid to depostors. Ac- cordlng to the rules of the banking board, no bank is permitted to pay more than three per cent. on short time deposits more than four per cent on time de- posits running for six months or mere.
 Why has the Republican party been so quick to respond to the demands of Wall street and so slow to yield to the demands of the masses? There are two reasons: First, the Republican party has allowed itself to become the servant of the faVor-seeking corporations, and, sec ond, too many Republican leaders look at questions from the arstocratic stand point the standpoint of the many. They iegsate upon the theory that society is suspended from the top, and they fail, therefore. to understand either the evils that atilict the body polite, or the reme- dies that are needed. The Democratic party. viewing questions from the stand point of the whole people, easily sees that which Republican leaders do not discover. and it's remedies begin with the relief of the average man. This is the secret. If secret there be, of the pri- macy of our party in matters of reform.
 When Solomon was invited to choose what he would. he asked for an under. standing heart. that he might deseern be- tween the good and the bad, and he was told that. because he had chosen wisdom rather than riches or long life, he should