The San Francisco call., 1908-08-28
BRYAN SPEAKS ON
BANK GUARANTY
Declares Making All Institutions
Responsible for Obligations of
Each VIII Be Protection
Shows Weakness in System of
Postal Savings as Advocat-
ed by Republicans

p y D
cfauc candidate for president, tonight
spoke on the subject Of guaranty of
Dank deposits. Previously he had de-
nFereo three other addresses, two from
tne Neranda of the hotel and the third
al Garfield park, where he attended
picnic by the Knights of Pythias, his
latter theme being Fraternity"
The democratic candidate and his
party arrived here at l O'clock and
We're at once taken in hand by a recep-
ton committee composed Of leading
democrats of the city and state and
conducted to the hotel in automobiles.
A great crowd greeted Bryan at the
station and at the hotel.
WOULD SECURE DEPOSITORS
As announced by him before his de-
parture from Kansas City Bryan, in
view OF the action of the Kansas re-
publican state convention, which In
dOrsed the guaranty of deposit PROPOSE
ton, made some remarks supplement
tary TO his prepared speech on that
subject. He took up the advantages Of
the guaranty system and then answered
the objections made to ii by Taft and
Others He began by asking why the
depositor should be left unsecured when
the national government demanded
security Of any bank with which it de-
posted money He pointed out that
the choice was between the postal saw
ings bank and the guaranty bank and
accused Taft of faYOring an unneces-
sary extension Of the sphere Of govern
ment in advocating the postal savings
bank instead Of the guaranty bank.
Bryan declared that he preferred the
guaranty bank proposition, which
would allow the banks 10 attend to the
banking business and yet compel them
TO give the depositors necessary Sc
curi1y.
BANKERS FAVOR GUARANTY LAW
Upon the conclusion Of the prepared
speech Bryan said:
asked Mr.. Briedenthal, a banker
of Kansas CITY 10 make INQUIRY among
what proportion Of them favored the
guaranty law. 1 learned that Of the
bankers that had expressed themselves
on this subject about three-ouarters Of
them favored a guaranty law and one
quarter opposed it. This is an excel
lent showing. Among the depoSltorS
there is no opposition Al all, and II is evil
dent that the Kansas bankers recog-
nize, hrst, that something must be
bank is better than the postal saving
bank. 1 also inquired OF Governor
Haskell in regard 10 the number of
national banks which have surren-
dered their charters and become state
banks in order TO have the benefits
Of the guaranty system have tele-
gram from him, saying that four ma
tiOnal banks have already made the
change and are operating under the
state bank laws, and that 16 other ma
uOnal banks have applied Tor state
charters This is conclusive proof that
the Oklahoma law IS a success
national charter is supposed TO have
some advantages over a state charter.
and the benefits of the guaranty law
must be admitted when 20 national
banks viii in short time change
from the national system to the state
system in order TO give their depositors
the advantage furnished by the guar
Since lie preparation of my speech
on this subject the republicans OF
Kansas have held a convention and
on the guaranty of banks is a recogni-
ton Of the necessity for security, but
the plank is so wOrded as to be prac-
tically useless so far as the protectlon
of the people is concerned. The repub-
Hcans propose TO enable the state
banks TO mutually and voluntarily
enough. Suppose that the banks mu-
tually agree not to do it Must the de-
pOsitors be left unsecured2
The chief cause OF bank failures is
the making of excessive loans to di-
rectors or officials Of the bank. This
is the fruitful cause Of disaster. and 1t
has been Impossible TO secure legisla-
ton protecting banks from their own
officials and directors Why? Be
cause there has been no mutual re-
sponsibility. When all banks become
liable for the deposits Of each, the
stock holders viii insist upon the
enactment Of a law making 1t crimi-
nal offense for a bank official
10 loan more than the prescribed
amount 10 one individual At
the loaning Of more than one-tenth Of
the capital and surplus to one person
or corporation, but the law is only di-
can suspend a bank if it violates the
law. but the law is not enforced, be
cause the enforcement Of such law
would throw the punishment upon in
nOcent stock holders and upon the
community, since the suspension Of a
bank inhicts a great loss upon stock
holders and disturbs the business of
the city or town in which the bank is
located.
The law should make it criminal
offense TO loan more than the pre-
scribed amount TO one person and we
would probably be able TO secure the
passage Of law prohibiting market
peculation by bank officials.
OKLAHOMA PLAN Is PROTECTION
The Oklahoma plan is better. A
bank recently failed IN Oklahoma;
within 4S minutes after the notice Of
suspension, the officer in charge had
authority to pay all depositors and
then the banking board proceeded to
collect the assets OF the bank and to
prosecute the officials criminally
when the business was closed up the
stock holders passed a resolution
thanking the state board for its prompt
action. the action Of the board being
q protection to the stock holders as
well as TO the depositors and 10 the
public generally.
Compare TINS failure uQQeT the guar
anty system with a failure where there
is no guaranty In Oklahoma the bank
commissioner telephoned the farmers
to come IN and get their money, and
the answer was, Il am busy today with
nv crop. I will be in in q day or two"
In Cleveland, O., bank failed about
the same time, and the papers an
rounced Twelve hundred infuriated
italians storned the closed doors of
the burst banking house of Costan
Ifopea on Orange street today. The
police drove the crowd back
LIABLE FOR OBLIGATIONS
An objection is sometimes made to
the guaranty law that a new bank
would start up across the street" and,
being able TO promise its depositors
absolute security through the guaranty
law. could draw the deposits away
from conservatively managed banks, by
oNering a higher rate Of interest than.
ne latter could pay. This objection is
urged as II IT were an unanswerable
one But let US see how easily 1t can
be met Since the law makes all Of
fhe banks liable for the obligations OF
each bank the law should prohibit any
abuse OF this security by any bank, and
a. oklahoma the banking board has al
-r.1v fixed the rate of interest that