The Ocala banner. (Ocala, Marion County, Fla.) 1883-194?, 1908-09-18

Why not make the depositor secure
The United States government re
quires the deposit of specific security
when it entrusts money to a nationa
bank, although it can examine the
bank at any time; the state requires
security when it 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 depositor be left to take
his chances?
Not only is the depositor without
protection, but the security given to
nation, state, county and city lessons
his security. They are preferred
creditors. They have a mortgage on
the gilt-edged assets and the deposit
or must get 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 re-
turn OF his money, and the laws ought
to make the facts conform to the
theory. The depositor, the community
and the banker himself will be bene-
flied by legislation which will give
to every depOsitor the assurance that
that which is committed to the keep
ing Of the bank will be available to
meet his needs at any time. Such is
not the case today, for while all
banks are reasonably secure, they are
not absolutely so. This statement can
be verified in several ways.
First: The president has advocated
a postal savings bank, and his post
master general, in presenting an ar
gument in its favor, pointed out that
many millions are sent to European
savings banks every year by Ameri-
cans of foreign birth who prefer to
trust the state institutions of the ma
tons beyond the sea, rather than the
private banking institutions here.
Second: 1t is known that a consider
able amount Of money is in hiding,
the amount increasing with the ap-
proach Of a panic or business depTes-
sion. This money is not only with
drawn from active use, but is likely
to be withdrawn just at the time
when money is most needed and when
the withdrawal will increase the f.
nancial disturbance. 1t is impossible
to reason with lear; it is futile to tell
men that they will probably get their
The moment the depositors
suspect bank, they hasten to destroy
its sOlvency. Distrust, and distrusi
alone, can explain the hiding of mon
ey.
Third: The increase in the issue OF
money orders, payable to the order of
the purchaser, is another evidence
that people are seeking greater Sc
curity for their money. The banks
will pay an interest upon deposits,
and yet those who buy money orders
prefer to lose the interest and, in ad-
dition to that, pay the price of the
money order in order to secure the
guaranty.
Fourth: National banks confess
that their banks are not secure when
they oppose the guaranty of state
banks on the ground that 1t would
lessen the deposits in national banks;
and state bankers confess that their
banks are not secure when they OPP
pose a national guaranty system on
the ground that it will draw deposits
away from state banks. If you want
to find whether banks are absolutely
secure, ask the directors to give you
their personal note to secure your de-
post, and you will learn that they will
not bear the risk which they ask you
to bear.
Fifth: The experience of Oklahoma
furnishes conclusive proof that depos-
itors do not feel that their money is
safe in unsecured banks. On the 18th
of December, 1907, the Oklahoma legis-
lature enacted a depositors' guaranty
law, which became operative Febru-
airy 4, 1908. By the provisions of this
law, all state banks, and as many ma
tional banks as desire to avail them