The San Francisco call., 1908-09-20
Bryan's Banking Scheme Is
Branded as Fallaci0us
United States Treasurer Treat Scores Plan for
Government Guarantee of Deposits
By Ira e. Bennett
SPECIAL DISPATCH TO THE CALL


/ WASHINGTON. sept 1s-Nowhere in
the country probably. IS there closer
student OF American financial affairs. or
z better posted man on the general
3 monetary question than Charles II.
! Treat. treasurer Of the United States
4 In common with nearly every person
i who has dealt with the practical as
distinguished from the theoretical side
Of the business Of banking. Treat takes
strong grounds against the new doc
! trLns OF William Jennings Bryan. for
! the government guarantee OF bank de-
posIts-
! Treat yesterday was asked by a rep
resentarive Of The Call If his official
position had not brought TO his at
tentiou the many bills introduced in
congress providing for the guarantee
OF bank deposits. etc. besides the re-
cent action OF the democratic national
convention IN including in It's platform
such e guarantee as just and neces-
sery thing in behalf NOT onlt OF the
depositors OF banks. but the public AZ
large
Yes said Treat. Il have been
deeply interested in the different meas
AnTes proposed by men notable in gov
ernmeut2l affairs as well as in posi-
+ tions OF Official trust and responsibility.
an greatly surprised that there IS
such lack OF clear point OF view
Of the real situation. for the reason that
the recent panic did not disclose any
serious condition CT insolvency among
the banks There never has been a
panic IN which the banks better proved
their soundness than they did in the
recent one The difficulty that led 10
the panicky conditions with depositoTs
was not that the banks did not have
good assets. but that they could not
meet the immediate requirements Of
the depositors to pay in currency. They
/ might have paid in checks. but that
would not take the place OF money.
CURRENCY WAS SCARCE
1T would seem that a guarantee was
more needed 10 keep a sufficient sup
needed emergency. I think this one OF
the most important features of the
( discussion-that there was no general
unsoundness in the banking situation.
only scarcity OF currency Therefore.
the simple guarantee Of deposits could
not be made effective on demand un-
less there was an adequate supply OF
currency It was the lack or the fear
/ Of the lack. OF an ample supply OF
money that increased the disrrist in the
banks
/ Nevertheless it Is a remarkable fact
that stands out from all other expert
ence in former panics, that never in
the history Of banking did the de-
positors show such unnounded conf
dence in the banker as in the recent
disturbance
/ Treat was reminded OF the fact that,
according TO newspaper report, the
democrats professed 70 be making many
converts by reason of Bryau's oft re-
peated query Why not make the de-
positOr secure" and was asked TO
point out the fanacy OF the democratic
e
Why asked Treat IN reply, is the
depositoF any more sacred in his rela-
ton 10 the bank than the investor In
other securities But Bryan went fur
/ ther and said that the United States.
/ the various states and municipalities,
make deposits and require specific col
lateral and receive interest from I per
cent up. Why should they, as ex-
traordinary depositors. receive this
privilegeE
MUST PROTECT BANKS
Bryan overlooks the fact that the
public funds deposited are in the Gus
tody OF officials who are simply the
agents of the government, who. being
responsible on theiS own bond. would
not deposit the public funds for which
/ they are responsible unless their safety
was guaranteed. II IL was the personal
money OF the Official agent he would
nave the right to take the risk and
choose such investments as seemed 10
him safe and profitable. But that is
not The case IL is the money of the
tax payers and il sacred trust II
these funds should be deposited in
bank without security and that bank
should fail. the official would be subject
to punishment under the charge OF eni-
bezzlement or defaultjag
One OF the points naade by Bryan and
/ suggested 20 Treat was that the gov
4 eminent always Is preferred creditor
and TO that extent at least would en-
I trench upon the funds that ordinarily
would go TO make good the demands OF
/ the depositors
That is one OF the arguments Bryan
/ advances. but ike several others ii IS
easily answered" responded Treat.
What are the revenues OF the govern
ment but COLLECTIONS taken from the
people through taxation? Il IS the in
| dividual money OF the people, in charge
OF custodian for specific purposes for
the benefit OF all the people Most men
| lose sight OF the fact that these off,