The Columbus journal. (Columbus, Neb.) 1874-1911, 1908-09-23
(By George q. Roberts. former d.
rector OF the Mint.

For years the advocates Of c0mpre-
hensive currency reform have pointed
out that with $4,000. 100000 Of bank
deposits in the country and only about
$4,000. 100000 Of money all told In the
country, both in the banks and out,
there should b some method provided
by which. on the basis Of good assets,
the supply Of lawful currency could be
readily Increased TO meet exceptional
demands, whether such demands were
due to seasons Of unusual business nc
tivity or to alarm among depositors.
Their foresight and arguments did not
avail, but they are hardly to be swept
Of their feet now BY impatient zeal for
this new, and. AZ they regard 1t, ILL.,
considered scheme. They stand for a
complete and scientific treatment Of
the subject.
The guaranty Of deposits IL a crude
and imperfect remedy at best 1t does
not recognize or attempt to cure the
defects In our banking and currency
systems. but aims only at persuading
depositors not to draw their deposits
The losses to depositors BY the failure
Of national banks has become an insig-
nificant percentage. and Is growing less
every year, a. q result of natural. svo-
luti0nary progress In banking. The
standards are being constantly raised.
and the efficiency Of ofhcial inspection
and supervision constantly improved.
The true line Of Development is not by
any revolutionary policy. but by hold
ing individual bankers to yet
stricter account, and at the same time
enabling every properly conducted
hank to readily obtain a supply Of cur
rency to meet all demands upon It.
The fundamental weakness in our
currency system II in the fact that 1t is
not readily responsive to the needs Of
the country. The legitimate demand
for money varies from year to year,
and from season to season In the same
year. 1t il a familiar fact that there
Is a great deal more business to be
handled from September LIST to Decem-
Der S1st each year than in any other
four months Of the year, but there is
no more money in the country unless
gold is imported for the purpose.
Would Lead to Reckless Banking.
As remedial measure the guaranty
Of bank deposits is not only inadequate.
but it is worse than inadequate, for 1t
proposes to Overturn the principle Of
individual responsibility BY means Of
which the banking business has been
raised to its present high standards.
and upon which all individual and 90
cial progress il based
The proposal contemplates that the
public shall be relieved entirely from
the exercise Of judgment and dis
crimina ton In the choice Of banks. and
while 1t is highly desirable that all
banks shall be made safe, to the end
that even the most ignorant and con-
fiding may be protected, 1t 10 still true
that an alert public opinion has great
influence In maintaining proper bank
ing standards. We cannot afford to do
without that influence.
Under present conditions the invest
ments. the personal habits, the general
character and abilities OF the banker
are under the constant scrutiny Of the
community, and q matter Of public in
terest. Notwithstanding occasional in
stances in which the public has been
deceived. 1t may be stated as q general
proposition that an unblemished char
acter and a reputation for good bust
ness ability and conservative judgment
have been necessary to success In the
banking business. The public looks
over the individual who is to receive,
and invest and be responsible for its
money with some discrimination, and
the elimination Of the unfit by the
scrutiny and composite judgment Of the
community Is a factor Of the highest
value in maintaining the standards Of
the banking business. 1t is, however,
a factor entirely overlooked by the ad-
vOcates of this scheme.
They calculate the Insignificant per-
centage Of loss to total deposits under
present conditions, and assume that no
greater losses would occur after char
acter ceased to be factor In the busi-
ness. and all deposits were given blind
ly to whoever would bid highest for
them. To the objection that this elm
nation Of character AZ q factor in the
acquisition Of deposits must tend to
promote reckless banking. reply Is
made that bankers will be deferred
from recklessness by fear Of losing
their own money. The reply misses the
point All men are not deferred from
recklessness by fear Of losing their
own money. but reckless men are now.
% a rule, kept out Of the banking busi-
Ness by the unwillingness Of the public
to entrust money to their care.
Careful DankinG Best.
Cnder present conditions there are
In favor Of careful and
banking. There are peo-
pie who are not Influenced in their &C.
lection Of bank b the highest rate Of
interest offered On deposits, and who
have their Suspicious aroused By the
tender Of exceptional Inducements.
They know that such OFFERS put .
strain upoa The busineR. and they de-
liherately pceeee q place thQiI QeneL