The Birmingham age-herald., 1908-08-28

the fnanciers prevent the carrying out of this demand?
 The republican platform does not go into detail, but it is fair to assume that the postal savings bank plank is in- tended as an indorsement of the posta, savings bank system proposed by the President and Postmaster General. Un-
 der this plan the federal government would invite the deposit of savings, limit being placed upon the amount that each person or each family could deposit. According to this plan, the business man would not be protected, for he uses a ch ecking account instead of a savings account; but no one can doubt that the successful operation of
 a government savings bank would ulti-
 mately lead to an extension of the plan until the government bank would include the ordinary checking account and be open to deposits without limit.
 It would mean a long contest between the depositors and the bankers, but d
 contest which must in the end be de-
 cided on the side of the depositors. The
 banker must decide therefore, whether he will favor postal savings bank which, in the absence of the guaranty
 bank, will grow until 1t absorbs the banking business, or preserve the pres ent system of banking by giving to the l people, through a guaranty law, the protection which they must otherwise , find in a government bank.
 Less Radical Change.
 The democratic plan, therefore, con- templates a less radical change than
 the republican plan. In his notification speech MT Taft charged the demo- crats with being socialistic in some of [ their remedies. The charge was not well founded, but I might reply by l charging him with advocating an un- necessary extension of the governments 1 sphere of activity in the esta blishment ! of the postal savings bank when the 1 guaranteed bank would answer the
 same purpose without any considerable | increase In the number of government | employees. I would rather see the
 banks attend to the banking business 1 than to have it transferred to the gov 1 ernment, and because I prefer to have ! the banking business done by the banks
 rather than by the government, I urge | the guaranty of deposits as the easiest
 solution of our difficulties
 There are only 10000 banks, while l there are 15,000.000 depositors, and do | not hesitate to declare that in i conflict between the two the depositors |
 we estimate the average number of ! stockholders of each bank at 75-and 1 that is liberal estima te-the total
 number of stockh olders would only be
 million and a half, or one-tenth as 1 many as there are depositors. The 1 stockholder is not compelled to buy l stock. while the depostor is compelled l to use the banks, both for his own sake and for the sake of the community. for | hpp pL bo To
 his money part of the circulating | medium The guaranty law, therefore 1 brings the greatest good to the greatest number, as well as to those who have
 the greatest equity upon their side. There Is another reason why the i claim of the depositor Is superior to
 the claim of the stockholder The
 stockholder has voice In the selection | of the bank officials; the depositor has
 not. If any one must lose, therefore. as l the result of bad management it ough L 1 to be the stock holders rather than the | depositor And, venture to ask if tn @ bankers will not trust each other why i should they expect the depositors to
 trust the banks?
 i Protection for Banker.
 We are fortunate, however, in that | we are not compelled to choose between l justice to the depositor and justice to l the stockh oledrs, for as has been shown l before, the plan which we propose not | only does justice to both, but brings l advantage to both. More than that, 1! the plan which we propose protects the
 banker-and 1t is his only protection
 against the establishment of a govern ment bank with indefinite encroach- ments upon the bankers business. With | the guaranteed bank established gov ! ernment savings banks would only be
 needed in the towns and villages wh ere l there were no guaranteed banks
 | If we had to choose between the in- | terests of the bank and the interests of 1 the community, we would be compelled to
 protect the interests of the community first but here. too we are fortunate. for
 we are not driven to this alternative.
 That which protects the community pro-
 tects the bank also, for when there are
 several banks In the community, the fail
 ure of one often causes a run upon the
 others, and the insolvency of one bank is such a menace to the solvency of others
 that the solvent banks often join to- gether and assume the liabilities of the in solvent one for their own protection. As an illustration of this, I point to the ac-
 ton of the Chicago banks in assuming
 the liabilities of the Walsh banks, at a heavy loss to themselves.
 There is another advantage which the l guaranty of depositors brings to the banks-itp rotects the reserves deposited in other banks. During the panic last fall
 the reserves caused the most or the
 trouble. The small banks wanted to with
 draw their reserves from the city banks
 and the big banks in the cities were moi
 prepared to meet the strain. With de-
 posits guaranteed there would be no rum