Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1908-09-24
THE OKLAHOMA PLAN
OPINION OF SENATOR OWEN ON
GUARANTEED DEPOSITS.
Strong Statement in Favor of the
the Democratic Banking plank by
the Senator, Who Has Been in the
Banking Business for Eighteen
Years.

'Heresy' is what Postmaster Cen
eral Meyer calls the Bryan proposi-
ton to guarantee deposits in banks.
The Kansas Republicans endorsed
the plan and nominated a candidate
for Governor who stands on that plat
form.
United States Senator Robert l..
Owen of Oklahoma, stopped over in
Chicago on his return to Oklahoma
from Colorado, where he has been for
the past month. Senator Owen thinks
Colorado will enlist as a Democratic
state this year. Before departing for
Oklahoma to take part in the cam
paign he made some interesting sug-
gestions relative to the operation and
effect of the Bank Guaranty law of
Oklahoma. 1t will be remembered
he vigorously presented in the United
States Senate the proposition to guar
antee the deposits of the National
a guarantee fund to be composed of
the present tax on national bank cir
culation which he says is far more
than sufficient
Senator Owen has been in the bank
ing business for eighteen years and
his opinion is from the bankers view
point.
He said: THE Oklahoma banking
law does not provide for a state guar
antee. 1t does not impose an unlimit-
ed liability on the banks. 1t only
provides bankers guarantee fund
equal to the sum of one per cent of
the average annual deposits of the
state banks. From this fund is paid
instantly the depositors of any in
solvent state bank. There has been
only one bank failure since the state
was established.
In this case the officers of the state
bank were borrowing it's funds with
out security. The closing of the bank
saved the stockholders a greater loss
which they would otherwise have
suffered. The depositors were in
stantly paid, and it cost the guaranty
fund nothing whatever, the losses of
the bank falling upon the banks own
funds; moreover, the business people
of the town We're not disturbed.'
Even the guaranty fund is rede-
posted with the contributing banks
in Oklahoma, where they deposit
with the state statutory collaterals.' -
'The guarantee fund plan is bene-
fetal to the state banks as follows:
First: 1t has increased their de-
posits several million dollars, con-
siderable part of which is money pre-
viously boarded by people afraid of
any bank.
Second: The depositor being guar
anteed. the banker has no fear of a
run. He therefore need not carry an
unusually large cash reserve. He may
thus make larger loans, accommodate
more borrowers and increase his earn
ing power.
Third: The guaranty plan gives
the banker greater peace of mind,
prevents his pressing weak credit
or unduly, encourages him to extend
accommodation required by commerce
for he has no fear of his frightened
depositors calling him to sudden set
tlement
Fourth There being no danger of
financial panic under this system the
banker would never fear the reserve
cities refusing to deliver his reserve
on demand
Fifth: Panics being thus avoided,
the stability of our national commerce
would not be disturbed and the bank
er would be benefited both by sta
BILE line of deposits and stable line
of demand for credits, of which the
banker is the purveyor.
Sixth: The bank deposits would be
Increased under this system from thir-
ty to forty per cent. Every dollar in
currency in the national banking sys-
TEN means ten dollars of deposits and
ten dollars of bills receivable, as ap-
pears from the reports of the Com
troller of the Currency for the last
thirty years. The money in hiding
or in boarding, outside Of pocket
change, is estimated at between thir-
ty and forty per cent of the currency
actually in bank, and If this money
were brought out of boarding, as 1t
would be by the guaranty plan, and
digested by the banks, 1t would mean
! an increase Of deposits of about thirty