The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1908-10-30
BANK GUARANTY IN PRACTICE

| BANK GUARANTY IN PRACTICE
Oklahoma has bank deposit guar
anty law similar to what Mr.. Bryan
proposes for the country generally
I and though it has been in operation
only short time there is conclusive
evidence that it opens the way to
! grave abuses. Already in that state
/ 1t has made at least one bank the
| football of politics, and doubtless
other instances will be Forthcoming
as the exigencies of Democratic poll
tics require. The case referred to
was the International State Bank of
Coalgate, whose doors were closed by
! Bank Examiner Smock under per-
emptory orders from Governor Has
kell, for no better reason than to
make demonstration of The practical
workings of the guaranty law before
the Democratic national convention in
order to ensure the endorsement of
Mr. Bryan's pet hobby by that gath.
ering. Immediately following the
closing of the bank this notice was
posted on its doors Bank closed
by order of state examiner. All de-
positors will be paid by the state"
The facts in the case, as recently de-
veloped by the grand jury, are thus
stated in late issue of the Oklahoma
City Times:
This was the first failure in Okla
homa since the Depositors' Guaranty
law became effective. When the first
flash of the failure died out, it was dis
covered that less than 5000 of the
states money had been required to
satisfy all depositors, and not an out
standing note was collected. A state
ment of the banks assets made two
days prior to the. failure and which
showed that there We're in the hands
of the bank officials $1,000, and that
the bank was perfectly solvent.
But demonstration of the guar
anty law had to be made before the
Democratic convention, and Mr.. BTy-
ans pet hobby had to be lantern
Sided, and the old gray-haired presi-
dent DR.. Conner, was led up to
slaughter
The grand jury recommended the
removal of Mr.. Smock
I'm that they made mistake. They
recommended the removal of the
wrong man.
Mr.. Smock did not want to c-ose
the bank and SO stated. He was sat
isfied with its solvency. and so report
ed to the governor. However, he was
again dispatched to Coalgate, and
after telephone communication with
Governor Haskell he closed the doors
and posted the states notice.
'The grand jury should have rec
commended the removal of Governor
Haskell who caused the ruination of
the bank
THE failure of this bank took on
national interest. The Democrats all
over the country pointed it out as
demonstration of the argument for ma
tional adoption of this Bryan fad.
The Republican press of the state
claimed thaht the bank was solvent at
the time it was closed and that it was
closed for no other purpose than to
make showing.
The report of the grand jury shows
that the Republican press was right,
and that the Democratic slaughter-pen
methods of demonstration were not
only wrong. but criminal
The report of the grand jury, print
bears out every statement made above
as to the condition of the bank at the
time it was closed for political effect.
For the purpose of strengthening Mr..
Bryan's candidacy and giving a GER
tain degree of prestige to his bank de-
post guaranty fad a perfectly sol
vent bank was put out of business
on telephone orders from Gov
ernor Haskell after he had been Off
cially assured by one of his own ap-
pointees that the bank was all right.
Tie history of banking in this or any
other country may safely be challeng-
ed to produce more high-l.anded
and outrageous proceeding under COW
er of law What was done in Okla
homa could just as easily be done in
the country at large if Mr.. Bryan's ma
ticnal guaranty scheme should be
adopted. And it would be just as like
ly TO occur in the country at large as
in Oklahoma, if thereby the political
fortunes Of some Democratic politician
could be advanced by such an illus
tration of the practical workings of his
theories
The Bryan bank deposit guaranty
scheme has hitherto been opposed
mainly on the ground that it would
encourage incompetent. irresponsible
and dishonest men to enter the bank
ing business and make capable, hon
est responsible bankers liable for
losses needlessly and perhaps criminal
ly incurred. The revelations in the
case of the Coalgate failure So
called, show that there is another OBJ
lection of net less weight and mo-
nent, to-wit: that under such an ar
rangement, If the Democratic party
happened TO be in power, the banks
Of the country would be made the foot
BAH OF politics, thus depriving them Of
every opportunity to win and enjoy
public confidence. The basis banks
would be on under such conditions