The Emmett index. [volume] (Emmett, Idaho) 1893-1925, 1908-01-30
DEPOSIT GUARANTY.

started the discussion as 10 tne De
means of preventing runs on bank
and losses to depositors. Will
il is stated with great conhdenc
that depositors will not lose cent
nevertheless inconvenience and los
will occur from the fact that it viii
take months and possibly severa
years to r, alise on the banks Sc
curities and loans sufficient to SETTLE
with its creditors.
There seems to be a very strong
sentiment abroad in the land il
favor of some kind of law thai
Will guarantee TO depositors the
money which they place in banks.
Banks receive large deposits and
give no security in return except
the name Of the bank and the law
under which they operate, and it is
no wonder that upon the slightest
breath of suspicion every deposition
wants to be the first to withdraw
his money until it becomes wild
scramble of first come first served
and the devil take the hindmost.
We speak of our Banking System,
but there is no Banking System.
Each bank stands alone and in case
of a panic each one struggles 10
fortiiy and protect itself. even to the
embarrassment and destruction of
its neigbboring banks.
Nearly everybody seems to agree
that there ought to be some method
adopted that would give to deposit
tors absolute security that their
money will be available whenever
they call for il some plan that will
give them such an assurance as to
the safety of their money and that
they can get it whenever they want
it,that will prevent a run on any
bank.
One plan suggested is TO have
great central bank, a sort of king
or imperial ruler over all the other
banks, An objection to this is that
the selhshness of men might make
such bank great monopoly and
with the great power it would
possess itmight eventually control
the government instead of the gov
eminent controlling the bank.
Another plan is to have the gov
eminent guarantee all deposits in
national banks, and the state guar
antee all deposits in state banks.
But this might too often leave the
government or state 20 hold the
bag, as the saving is, after the bird
had flown or the rabbit had run
away.
Another plan is for some kind of
all emergency credit currency,
permitting the national banks to
issue relief currency i'll case Of
necessity to meet urgent demands
for money. But this does not reach
the root of the evil, nor remove the
cause for panics, and it might dis.
criminate against the state banks
and drive them out of existence.
Another plan is for great in
surnnce company to insure the pay
lnent of depositors But this would
require the payment of large sums
In salaries aid expenses, and iii
he end might require another ON
Dany TO insure this company, and
he premiums would have to be paid
~ somebody. The banks would
lot want to pay them N | the de-
1ositors would not want TO pay
them, but they would have to be
)aid by somebody. Mark Twain
aid that he would not insure his
life because he could outlive any
Insurance company that he had
yer heard of, and he is still alive.
What The depositois want in case a
,ank fails is their money without
ny trouble. discount or delay.
None of these plans seems to be
preventive but only remedial. 9,
What depositors want is prevention
{ trouble, delay and loss, and what
he banks want is prevention of f
anics and runs. &C
Perhaps one of the best plans ec
'ould be to provide by law that ID
o bank should receive in deposits or
lore than four times the amount co
it paid-in capital stock, and eli
lat Il the banks in state should
and behind all the individual
anks of that class; that is all the pr
ational banks stand behind each at
ldividual national bank, and all
lie state banks stand behind each is
ldividual state bank in that ne
ate. and in case of the failure 1t
any bank thea all the sti
INKS of that class i'll the state to pa
once pay an assessment i'll ak
to the amount of its uSC
pital stock to make good the liv
Efficiency. if any, of the bank a t
at failed. The national banks So
the state and the state banks
uld each have their own examin-
S, in addition TO those provided goo