The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-09-27

at all. He pays no attention to the diff
ference between state banks and national
banks, or to the fact that state banks
are authorized to lend money on real es-
tate, whereas the national banks are pre-
vented from so doing. The difference In
the business and the tying up OF assets
between the system is radical. 1t would
be impossible to bring in the state banks
without making the supervision OF them
as strict as on the national banks, and
IL that supervision is to be strict it must
be under national auspices and there
fore. in effect, they must become national
banks This will entirely destroy the sys-
TEN of state banks, and will introduce
into the national banking system trust
companies and savings banks.
Government Requires Security.
'.Mr. Bryan says that as the govern
ment has security, why should not the
individual depositor have security. The
government usually has large fund.
The law requires that it exact security
for its deposits. 1t is so large a fund
that the banks can afford to give good
security to obtain it. 1t is to be OBJ
served, however. that the security given
to the government is the security of the
banks which get the deposits, and not
the security of every other bank in the
community. If, as between the banker
and his depositor, the deposit is of suf-
ficient benefit to make 1t an object of the
bank to give security. that is one thing;
security to that depositor is an entirely
different thing. / understand that in
Oklahoma. under this very law which It
is proposed to make national, bonds are
,exacted by the state and county from the
secured banks to protect the public de-
posits. -
II think 1 have shown that the ten
dency of the system proposed would be
to destroy the high character of the pres
ent banking. This is not, how
ever, to be taken as an argument that
the security of deposits is not a good
thing. and is not to be brought about
only to show that the method here sug-
gested Is a plausible, but Sophistical,
method, that will not accomplish the pur-
l,pose. but will ultimately increase the
Hoses from bank failures.
| THE case OF Oklahoma has been cited
as an instance to justify the Democratic
|. platform. The system has been in opera
ton only since March of. this year. No
panic or othec financial disturbance has
tested its efficiency. The statement is
made that the public has so much con-
fidence in the banks that the deposits
in the unsecured banks are running down
and the deposits in the secured banks
are running up. If my correspondents
| in Oklahoma can be credited, this in
crease of deposits was due to the fact
that 50, coo 600 OF the state money received
from the government for public school
| lands was removed from the national
banks operating upon the guaranty
| which would explain nearly all the in
crease In deposits
Postal Savings System.
'"rhe postal savings bank system has
| a guaranty by the government under cir
| cumstances which Justify it, because II
receives. while another husbands the de-
! posits. This guaranty will, of course, at
tract deposits, but the interest fund is
so low that the usual customers of saw
ings banks will not be drawn away, as
experience in all other countries shows
The Democratic platform proposes, if the
| guaranty system cannot be put into
force. to then adopt the postal savings
banks, as the guaranty system supplied
the means met by the postal savings
banks. This is entirely untrue. No en-
| forced guaranty system will supply what
| the postal savings banks will supply II
merely attempts to make secure the pres
ent deposits 1t can. of course, have nc
effect to extend the bank into the re-
mote districts Of the country. where say
ings banks are needed, but are unprofit-
able and where the many proposed mon
ey order offices turned to the savings
banks. will induce thrift, and the gath
ering of the capital for the improvement
of the country"