The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1908-10-10
GUARANTY OF BANK DEPOSITS

of national bankers to the guar
anty of bank deposits, as de-
clared at their convention in
Denver last week, sis strong
argument in favor of it," "If,"
asks the Mail, "the national
bankers haven't confidence in
their system and in each other,
how can they expect the people,
who make the deposits, to have
confidence in them?"
A Texas contemporary, the
FL Passo News, in an editorial
article on the same subject, says
there is but one reason why the
bankers are opposed to guaranty
of bank deposits, and that is, "the
old fear of competition in your
own inc of business" But, the
Texas paper goes on 10 state, the
fear is unfounded, as guaranteed
banks need not increase the
number OF banks, that no mora
banks can exist than the busi-
ness warrants. Our contempo.
rary adds:
''As long as the strong, established
institutions continue in the policy OF
secure and firm business they will not
suffer. There will be no need TO fear
the little man who wants to open a
lon rrhara ,,.;ll hn ,,n nnnI tn fnnr 81
wildcat bank. Why? Because it will
be to the interest of all banks to see
that no fake institutions do business.
And when bank is fake other bank
ers are the first to find it out
But the telling argument in the bank
guaranty plan from the bankers stand
point is this: Millions of dollars that
are now boarded will be put in the
vaults and give tremendous impetus
to the banking business"
We do not think, however,
that it Is so much he fear OF
competition thatis botht riog the
bankers rs the knowledge that
under the proposed system they
will be taxed TO maintain a guar
aniee fund. This objec'ion has
been urged by Taft and others.
In one Of his speeches the Re-
publican candidate for the presi-
dency characi erized the guaranty
of deposit business as "propn
sition TO tax the honest and rru
dent banEer to make up Tor the
dishonesty and imprudence of
oilers" But Mr.. Tait's argu.
ment is specious one, as was
clearly shown by Mr.. Bryan in
lis famous speech delivered a
few weeks ago on The subject of
guaranteed banks. Mr.. Bryan
then said:
Let us take the first sentence, that
the honest and prudent banker would
be taxed to make up for the dishonesty
and imprudence of others" Is not
this true of all restrictions on banking?
Does not the honest ard prudent bank
er under existing laws suffer i'll order
that the depositor may be protected
from the dishonest and imprudent? If
we had no banking laws at all, and
banking was done by private individu-
ais, the honest and prudent banker
would save the money that he now
pays for enforced examinations of his
bank, and he could at times make in
terest on part of the money which he
is now required to keep in his vault as
q rigid reserve. But because some
bankers are not prudent, these laws
place a burden upon the good as well
as upon the bad, ii being difficult To
distinguish the prudent banker from
the imprudent one until a bank actual
ly fails.
I'm like manner il might be said that
If all people were careful about fire, fire
insurance rates need not be as high as
they are, but the careful have to pay
higher rates than they should because
some are not careful. Life insurance
rates are higher than would he ncccs-
SarV TO cover the actual risk if cycry-