Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1908-10-02

ed of the present tax on national
bank circulation 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
unlimited liability on the banks.
1t only provides bankers guarant
fund equal to the sum ofone per ceat
Of the average annual de. osits of he
stae banks. From his 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 stat
bank we're borrowing its funds with
out security. The closing of the
bank saved the stockholders a great
er loss which they would otherwise
have suffered. The depositors were
instantly paid, and it cost the guar
anty fund nothing whatever, the loss
es Of the bank falling upon the bank
own funds; moreover, business PEG.
pie of the town were not disturbed.
Even the guaranty fund is rede.
posted with the contributing banks
in Oklahoma, where they deposit wit
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, a 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 NAV
thus make larger loans, accommodate
more borrowers and increase his
earning power.
Third: The guaranty plan gives
the banker greater peace of mind,
prevents his pressing a weak creditor
unduly, encourages him to extend &C.
commodation required by commerce,
for he has no fear of his frightened
depositors calling him to sudden set.
Element.
Fourth: There being no danger OF
financial panic under this system the
banker would never fear the reserve
cities refusing to deliver his re-
serve on demand.
Fifth: Panics being thus avoided,
would not be disturbed and the bank
ef would be benefited both by a sta.
bleline Of deposits anda stable line
Of demand for vredits, of which the
banker is the purveyor.
Sixth: The bank deposits would be
increased under this system from
thirty to forty per cent. Every dol
hr in currency in the national bank
ing system means ten dollars Of
deposits and ten dollars of bills re-
ceivable, as appears from the re-
ports Of the Comptroller Of the Cur
rency for the last thirty years. The
money in hiding or in boarding, out
side Of pocket change, is estimated
at between thirty and forty per cent
OF the currency actually in bank,
and II this monye were brought out
OF boarding, as 1t would be by the
guaranty plan and digested by the
banks, it would mean an increase of
deposits of about thirty per cent,
and an increase Of bank credits ex-
tended to commerc Of as much more.
This would mean renewed prosperity
and what is of more importance 1t
would mean stability.
The theory that corrupt banker
could profit by the guaranty fund
has no foundation. In Oklahoma
only man Of good precedents, Of
good reputation and Of good associa-
ton is permitted to have a state
charter. He Is not permitted to Dor
row from his own bank nor make ex-
cessive loans. Before the guaranty
fund could be injured by his failure e
cry dollar Of his own money, Of his
directors money, and their double IL
ability must have been exhausted.
A big banker from Chicago has op-
posed the guarantee plan on the the
DRY that this plan would make the
|depositor In small bank as safe as
in a big bank, and would be more a
vantageous to the small bank than
to the big bank. The present line Of
deposits In big and little banks alike
Is composed Of depositors each OF
whom individually feels entirely safe
now. And the guaranty plan would
49, nhonoa thoca dannoit0rq IN