The Holly chieftain., 1908-10-02
Shalt Banks Be Made Liable fer
Oae Aaother's Debts3
Eecognized Authority on Financial
Questions Discusses Practical
Bearings OF Proposed Guar
antes Plan.
(By George f. Roberts. former d.
rector of the Mint.)

rector of the Mint.)
The proposal to require the banks of
the country to guarantee each Others
deposits owes Its present strength TO
the financial disturbance Of last fall.
1t is urged as means OF preventing
panics. AMI there is no disa greeinent
about the desirability Of accomplish
ing that purpose Most of us agree
that II repetition OF the conditions
winch existed last fall should he made
impossible. but this is by no means the
only way to do 1t. or the best way
For years the advocates of compre-
ha, sive currency reform have pointed
Gut that with x14.0OO,OOO.N0O Of bank
d,Iosiis in the country and only about
8 .oG.Gos.GD Of money all told in the
country. both in the banks and ou-.
there should he some method provided
/! which. on the basis of good ass. tS,
the supply of lawful currency could be
readily increased to meet exceptional
hemintls. whether such dennlntis were
due to seasons of unusual busine 81 ne
tl,ity or to alarm among dep siors,
Z lsir foresight and arguments did not
AVAIL hut they are hardly to be swept
cf III ir feet now by impatient zeal fer
tals "cw. and. as they regard it. Ill
cors,it red scheme. They stand for n
urlup,eie and scientific treatment If
II subject.
The guaranty of deposits is a crude
al imperfect remedy at best 1t does
iot recognize or attempt to cure the
defects in our banking and currency
s. eE,s. but aims only ut pprs lnding
dfp siters not to draw their deposits.
7 ,if lss,s to depositors by the failure
Of rational banks has become an inslg-
nifieant percentage. and is growing less
every year. as result of natural. evo-
lutionary progress In baIlkiEg The
standards are being constantly raised.
and The eff iency Of official inspection
and supervision cogstantly improved.
The true line of development is not by
any revolutionary policy. but by hold
Ing Individual bankers to vet
stricter account, and at the same time
enabling every properly conducted
bank to readily obtain supply Of cur
rency to meet all demands upon It.
The fundamental weakness In our
currency system IL IN the fact that II is
not readily responsive to the needs "
the country. The legitimate demand
for money varies from year to year,
ard from season to season In the same
year. 1t Ia familiar fact that there
is great deal more business to he
handled Ircm September LIST to Decein-
ber 31st each yeas than in any other
four months Of tht year, but there is
no more money in the country unless
gold is imported for the purpose.
Would head to Reckless Bankine.
Is remedial measure the guaranty
Of bank deposits is not only inadequate,
hut 1t is worse than inadequate, for 1t
proposes 10 overturn the principle of
individual responsibility by means of
which the banking business has been
raised to Its present high standards.
and upon which all individual and 80
cIal progress is based.
The proposal coifemplates that the
public shall be relieved entirely from
the exercise Of Judgment and dis-
crimination u the choice of banks, and
while 1t b highly desirable that all
banks shall be made safe, to the end
that even the most Ignorant and con-
ffding may be protected, 1t is still true
that an alert public opinion has great
influence in maintaining proper bank
ing standards. We cannot afford to do
without that influence.
Under present. conditions the invest-
ments, the personal habits, the general
character and abilities Of the banker
are under the constant scrutiny Of the
community, and matter of public In
terest. Notwithstanding occasional in
stances In which the public has been
deceived, 1t may be stated as a general
proposition that an unblemished char
acter aud a reputation for good busi-
ness ability and conservative Judgment |
ilave been necessary to success In the |
banking business. The public looks |
over the individual who Is to receive,
and invest and be responsible for It's
money with some discrimination. and
the elimination of the unfit by the
scrutiny and composite Judgment Of the
community is factor of the highest
value IN maintaining the standards Of
the banking business. 1t is, however,
I factor entirely overlooked by the nd.
RAsstAs Of til. achaaps