The citizen. (Frederick City, Md.) 1895-1923, 1908-09-18
Guaranteeing Bank Deposits.

can nominee for President, in a
recently published interview, de
plores the bank depositors' guar
anty fund plank in the Demo
cratic National platform, on the
ground that tit puts premium OIL
reckless banking, and is an induce
ment to reckless banking" Post
master General Meyer, after 6
conference with Mr.. Taft, ex
pressed great grief at Mr.. Bry.
ans insistence upon the import,
ance of this plank in his party
platform, and denounced it as
>"one.step farther towards Social
ISM" From these utterances,
we are at liberty to conclude that
the Republican party is not ready
to insure depositors in the nat
ional banks, should that party
succeed in November.
Mr.. Taft's opposition is, of
course, the opposition OF his party.
Dominated by Wall street, and
yielding TO the demands of that
financial center in all matters of
Importance, the Republican party
is not willing to say that it will
cut down the bankers profits
by the small percentage neces
sary to protect the bank deposit
tors against the loss arising out
of misfortune or rascality on the
part of the bankers. In this, the
Republican party puts the profits
of the few against the protection
of the many, just as it so per-
slstently does in the matter of the
tariff, and as it did last session
in the enactment by Congress of
the Infamous Aldrich Vreeland
Currency Bill. and further. it
yields to the behests of those
who are seeking to avoid ade.
quate government supervision of
banking and other enterprises.
Mr.. Meyers interview is pre-.
cisely what might have been ex.
pected of one of the ultramarines
of the Boston Blue Stocking
crowd, which may always be dis
counted as Opposing anything
that savors of service to the peo-
pie. His arguments against in
suring depositors with national
banks against loss is that such a
guarantee would make honestly
managed banks responsible for
the debts of dishonesty man
aged institutions, and that it
would compel State and savings
banks to avail themselves of the
opportunity to insure their depos
itors. That the three and a half
millions on deposit with savings
banks should be taxed to s'pro
tect the "wage Garner and indi-
vidual of honest means," against
loss arising out of the misman
agement of banks is one of the
greatest injustices that Mr..
Meyer can imagine.
The arguments advanced by
both Mr.. Taft and Mr.. Meyer are
wholly specious. Earnings of
national banks during the last
forty years have averaged more
than 9 per cent. year ou com
bined capital and surplus. AS
surplus is, except in exceptional
instances, undistrihuted earnings,
earnings upon surplus are in re.
ality compound interest upon cap
ital. so that in reality bankers
profits during period of 40 con-
secutive years have been very
largely in excess of 8 per cent.
upon the actual money represent
ed by capital. A tax of less than
1-lOth OF per cent. year levied
against the average of deposits,
would absolutely have protected
depositors with these banks
against loss This profit would.
it is true, have reduced in a slight
measure the profits realized by
bankers, but as against such re
ducti0u, an enormous saving for
depOsitors would have been ef
fected, and national bank rece "
erships could have been wound up,
so far as the depositing public was
concerned, Immediately after sus-
pension, instead of dragging
themselves. in some instances,
over periods of 10 years, and then
failing to make 100 per cent. set
tlement with the depositors. That
the bankers should be forced to
surrender even small portion of
their profits In order that the
public may be given absolute pro
lection is the thing which Mr..
Meyer characteIizes as zone step
farther towards Socialism,
AS for the incentive towards
wildcat banking, which both Mr..
TAFT and MIR. Meyer see in the
guaranty proposition, there is
one uuauswerable argument. The
administration of the national
banking system is wholly in the
hands of the Federal Government.
Through his examiners, the Comp
troller Of the Treasury has it in