Missouri Valley times. [volume] (Missouri Valley, Iowa) 1874-1931, 1908-09-03
BRYAN SPEAKS
ON GUARANTY OF
DEPOSITS PLAN
Democratic Candidate Goes
After Taft in Talking on
Banking Plan at
Topeka. Kan.

Topeka, Kan.
dience which filled the auditorium to
overlooking, w. j. Bryan democratic
candidate for president. spoke or the
subject of guaranty of bank deposits.
He explained what he called the adj
vantages of the guaranty system, and
then answered the objections made to
it by MIR. Taft and others
He began by asking why tho depos-
itor should be left unsecured when the
national government demanded a Sc
curity of any bank With which it depos-
tied money. He pointed out that the
choice was between the postal savings
bank and the guaranty bank and ac-
cused MIR. Taft of favoring an unneces-
sarN extension of the sphere Of govern
meEt in advocating the postal savings
bank instead of the guaranty bank.
Mr.. Bryan declared that ha pre-
ferrcd the guaranty bank proposition.
which would allow the banks to attend
to the banking business and yet compel
them to give their depositors necessary
security. He said in part as follows,
MIR. Chairman, Ladies aud Gentr.nen:
Why not make the deposition secure The
United States government requires the de-
money to Il national bank. although II eau
examine the bank at amy time: the state
requires security when ii deposits money
In a bank: the county requires security and
the city requires security. even the banks
require security from the officials who
handle money. Why should the deposit
tor be left to take his chances?
Not only is the deposition without pro-
lection. but the security given to nation,
state county and city lessons his secur-
ity. They are preferred creditors, they
i,.,,
and the depositor must got along as best
he can with what remains. Why are the
interests of depositors thus neglected.
a bank asks deposits on the theory that
the depositor is sure of the return of his
money, and the laws ough, to make the
facts conform to the theory The deposit
tor. the community and the banker him
self will be benefited by legislation which
will give to every deposition the assurance
that that which is committed TO The keep
ing of the bank will be available to meet
case today. for while all banks are rea-
sonably secure. they are not absolutely so.
This statement can be verified iii several
ways.
OkIahoma's Example.
The experience of Oklahoma furnishes
| conclusive proof that depositors do rot
feel that their money is safe in unsecured
banks. On the Eth of December. 1901, the
Oklahoma legislature enacted deposit
tors guaranty law, which became oper-
of this law all state banks. and as many
national banks as desire to avail them
selves of the law. are taxed one per cent
on their deposits. and the money thus COLI
lected is put into guaranty fund. The
banking board is authorized To nake atid-
tlonal assessments from time to time to
| keep the fund up to this amount and is
directed to take possession of amy inso-
vent bank. pay the depositors in ful aud
reimburse the fund by colectin. the as
sets OF the failed bank Five hundred and
mol yfIi "a la, Al
| banks, had come under the provisions OF
this law on the 18th of las, May, leaving
but 253 unsecured banks tau natonaD In
the state. Statements are made by the
banks in December and May. Between
\ these periods the secured banks gained in
deposits s42S71 y. white the unsecured
deposits OF Sl,101s07 Sc. A large part of
| this increase represented money brought
| from hiding or from without the state, but
the decrease in the unsecured banks car
| only be explained in one way. A large
number of depositors withdrew their
money from the unsecured banks. and de-
posted 1t in the secured banks. and this
| too. In spite Of the fact that In order 10
prevent Withdrawals. the unsecured banks
in some instances. offered a higher rate
Of interest than the secured banks were
bered also that the banks which suffered
a loss of deposits were all national banks
| And to make 1t certain that the difference
was caused by the guaranty law. the Sc
II
unsecured banks lost. While he deposits
| We're increasing in the guaranteed banks
of Oklahoma, they were falling In tlt
state banks and trust companies of Kan.
sas-the decrease being $ll53,02627 be
1 tween March 81 and June 13
Criticism Doesn't Help.
No amount of criticism OF the ,inid de
| position can change the facts the people
who deposit money want more security
| than the laws at present give them The,
will change banks 10 get mole security
and. If necessary, they will se.id ,heii
| money to another state
4 As Mr.. Taft's argument is that present
ed by the big banks which put their owt
| selfish interests above the welfare OF tn.
depositors and the safety of the eomInun
| ity il Is worth while to answer Tho sever,
proposition which he advances
Let US take the first sentence thu: 9Th.
honest and prudent banker would be take,
to make up for the dishonesty and i'm
prudence of others" Is no, this t,9le o
all restrictions on banking? Does not IN,
/ honest and prudent banker under cxistltl,
laws suffer In order that the deposito
| may be protected from the dishonest an,
/ mprudent? If we had no banking laws a
all, and banking was done by private Ia
dividuals, the honest and prudent hankc
| would save the money that he ,,ou, n;,ya
/ for enforced examinations of his bank am,
he could at times make interest ON 3; par
of the money which he is now required {,
keep In his vault a. rigid reserve i,u
because some bankers are not prudent
these laws place a burden upon the goo,
as we'll upon the bad. 1t being diftc,ll
to distinguish the prudent banker from
the iinprudent one until bank actual
fails
In like manner it might be said tnat i
| all people We're careful about fire. fire In
surance rates need not be as high as the,
are but the careful have to pay highe
rates than they should because some ar
not careful. Life insurance rates are high
er than would be necessary to cover tn
actual risk III everybody took car Of hi
health. and here, too, the caut ous ar
burdened because some are careless o
their health All insurance Is open to tn
same objection. and yet insurance of al
forms Is growing. and the insurance o
depositors is growing in popularity NOR
rapidly than any other form of INSURANCE
and, may add 1t yields the largest re-
turn on the investment.
Mr.. Taft complains that ''ro one ca
foresce the burden which under this sys
ten would be imposed upon the sound an
conservative bankers Of the country b
this obligation to make good the osse
caused by the reckless. speculative an
dishonest men," etc. We have the past /
guide US. and we have reason to bellev
that the loss viii be less in the future tina
in the past. because when banks becoln
mutually responsible for cach others re
posits they will be sufficiently intereste
nAcrNo ammo cnnOAiihn