Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1908-07-31
SHALL BANK DEPOSTTORS BE
INSURED AGAINST LOSSf

AEssss 51N0OnEO kadkA1XN0AsSsA ASIAoA9S5S 80 5s
TO the Editor Of The Duluth Herald !:
AS one Of those who attended the
late meeting Of bankers in your
thriving city, I wish to congratulate
you upon your statement that 'sThe
deposit guaranty system is for the
benefit of the public as well as that of
the bankers. -
L. I would put it a little differently
that is to say: A proper guaranty
system would be an absolute insurance
against all deposit losses in national
banks. Hence the depositors would be
the principal bene6claries and the
bank stockholders would incidentally
be benefited, for such things as
"panlcs, runs and "lockouts, I"
could not survive such 'system''.
It every deposltor knew absolutely
that the government would paw all
deposits, as it now guarantees and
redeems all bank bills, every man
would deposit IN the banks and leave
therein his deposits. A rotten bank
might fall, it's officers be sent to prison
and It's stockholders assessed to paw the
losses; but the innocent depositor who
knows and can know nothing of the
'inside" condition of every bank is
saved from loss.
Now, what is the proposition?
l. 1t is not the proposition put
forward by the Minnesota Bankers
association-a man of straw set up by
Prof. Laughlin to be easily knocked
down.
2. It is not (by those who COM
prehend the proposition) to be tax
on banks or on the people at large for
the protection of depositors. Nothing
Of the kind, as I understand it; and I
have given it much thought.
3. But it is proposition that all
deposits of depositors in National
banks for the benefit of the depositors
themselves shall pay tax of (say)
one-half OF one per cent to the govern
ment, through the banks, said funds
to be held by the government as
trustee to be used to pay losses
sustained by such depositors when
ever bank shall suspend payments
the insurance fund never to exceed
certain gross sum. In other words, it
is proposition that the depositors in
our national banks shall be permitted,
through the government banking laws,
to insure themselves at their own
expense agains floss by the failure of
any national bank
What is there wrong about that
proposition?,, president of one OF the
national banks Of this state, I welcome
the proposition as both :'safe and
sane.
l sincerely regret that the committee
Of the late Bankers association, in
Jour city Of Duluth fell into the error
Of building up man Of straw wall
street straw at that) and then destroy
ng it without the ''beneft of
,lergy.'
NO man OF sense, so far as have
observed, has, with sincerity,
advocated the passage of a national
law requiring honest and efficient
banks to make up to :'depositor in
a failed bank losses for which the
honest and efficient banks Qlke the
had no responsibility whatever!'
But the committee, or managers
back Of the committee, brought in the
report and grabbed the convention by
the nose with one hand and by the
chin with the other and made it
swallow the dose without time to take
breath.
think it was mistake, however,
unintent1onal it may have been, and
for one desire to enter this hastily
written but respectfully earnest
protest.
JAMES E. CHILD,
President, First National Bank,
Waseca, Mimi.
Duluth, July %.