Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1908-09-21
BANK GUARANTY PLAN
Issue Is Sweeping Agricultural
States of the West.
KANSAS REPUBLICANS ACT.

State Convention Puts Proposition In
its PIatform--A Setback Fer Mr.
Taft-Frying the Fat From Corpora
tions-An Example Of G. o. p. Ef-
frontery--The Organized Labor Vote.
BY WILLIS j. ABBOT.
The real political sensation of the
week in Democratic circles has been
the wholly unexpected growth Of the
demand for the guaranty Of bank de-
posits as provided In the Democratic
platform. | think but few public men
aside from Mr.. Bryan himself had any
conception of the widfire way In
which this issue would sweep the agri-
cultural states Of the middle west A
prominent Washington official, Re-
publican, who was in my office the
other day said that he had been travel
Ing through Kansas and Nebraska and
found the people, including the bank
ers, earnest in their demand for the
adoption Of this plan. In Kansas the
Republican state convention has put
the proposition in its platform, thereby
presenting the phenomenal spectacle
of the party in the state taking sharp
issue with the position of the party in
She nation. Secretary Taft. who GER
tainly seems to have the courage OF
his convictions, bitterly denounced the
project in q speech which by a curious
coincidence was delivered on the same
day that the Republican convention IN
Kansas met and adopted it.
The fact of the matter is that the
operation of the law in Oklahoma has
been so exceedingly successful that the
Kansas banks are beginning to feel
the drain. Their depositors are with
drawing money from banks which Of
fer no security for 1t and sending 1t to
those in the neighboring state which
afford security prescribed by law. If
Kansas adopts the system, as it doubt
less will when It's next Legislature
meets, Nebraska will follow suit. The
plan will proceed from state to state
.nptil the whole tier Of agricultural
.d9tes bordering the Mississippi and
wv w. "~ "aye adopted il. This
q not mere idle speculation. but 1t Is
aehe we'll founded opinion of travellers
and correspondents who have visited
those states since the Denver cOnven-
fion. The Republican papers in the
2arger cities and In the east recognize
-ehe danger Of this issue and are con-
centrating their fire upon It, The Dem
-ocrats welcome these attacks and re-
1oice that the utterances Of both Sec
,rtary Taft and President Roosevelt
have made the issue squarely on this
point.
One Attack Confuted.
Recently through some political
agency most of the big city dailies
printed an article to the effect that the
system Of bank deposits had been
tried In New York state and failed.
The authority cited was a certain his
tory of the American banking system
which contained the statement that in
ASSOC the banks of New York establish
sed guaranty fund which resulted in
.overspeculation and In ultimate disas-
ter. Comparatively few people will
th'rt +h"t thc experience of eighty
years ago, before the banking system
had been at all perfected, should be
applied to conditions existing today.
But, even If it We're, investigation
shows that the cases are not parallel.
1T was not the creation Of a fund to
be held by the government as custo-
dian, a fund raised by tax upon the
deposits upon the banks, but was
rather a system of mutual underwrit
ing Of notes issued by the banks,
method which naturally would lead r.
oyerissue and overspeculation. Ye'
even as it was 1t worked successfully
for Il number Of years. And even in the
panic of 1897 none Of the banks In this
combination went down. About 1910,
however some OF them failed, and the
law was amended so that the accumu-
Eafcd fund could be used for the pay
? 1oent Of other creditors than the hold
O Els Of notes The fund proved insult
Accent for this purpose, and the whole
plan was abandoned The New York
Commercial, the daily exponent OF
Wall street views, Is curiously enough
the one paper there defending the
bank deposit plan. 1t was the agency
through which this particular canard
was explained away.
Frying the Fat.
recent occurrence in the western
headquarters of the Republican nation
al headquarters gives an illustration
for the need ~ complete publicity. The
assistant treasurer of the committee,
stationed at Chicago sent out letter
al.4 ~-.-,. - corporations all through
1l'00'' '"d AZ jGcant states soliciting
contributions With calm effrontery
and amazing frankness he Informed
the corporations that a law on the
statute books enacted by the Republic
an party prohibited the solicitation Of
funds from corporations but that indi-
viduals connected with the corpora
lions could contribute as they saw fit.
But these letters were not addressed to
individuals, not even to the responsible
presidents Of the corporations. They
were sent addressed to the corporation
Itself by name ana constituted de-
scrlption of the way In which the law
might be violated