The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1908-04-14
EBANk Deposits
Growing Sentiment Of Including
This Feature In Proposed Finan-
cial Legislation Business Men Re-
gard 1t Az Application Of Insur-
ance Idea.

new state Of Oklahoma has inaugu
rated in guaranteeing bank deposits
Is reported by Mr. Irving 7. Bush
President Of the Bush Terminal Com.
lpany, who has just returned from 4
tour through the West Mr.. Bush
went out partly for the purpose ol
presenting, for the Merchants AS
sociation Of New York, the merits Of
the Fowler Currency Bill to other
commercial bodies Of the country,
and In this capacity delivered ad.
dresses before the chambers Of com.
mercc Of Pittsburg, Los Angles, San
Francisco and Omaha.
"All over the country, at least that
portion which have visited, the pub
lie is greatly interested in the ques
ton Of the guarantee OF deposits ?
said Mr.. Bush today. "T'he provi-
sion made in Oklahoma seems to be
popular with the majority Of deposi.
tors, and the subject is under very
general discussion in other parts Of
the West Unfortunately, those op-
posed 10 guarantee Of deposits have
created IN many quarters an impress
sion that the Fowler Bill and the
Oklahoma plan Of guarantee are wild
and radical. AS a matter OF fact, they
are simple and conservative The
guarantee feature is merely everyday
mutual insurance applied to bank de-
posts. The State or Nation does not
guarantee, 1T merely holds the guar
antee fund as trustee. The Okla
homa act Is more conservative in
some respects than Our national bank
ing laws II requires twenty per-
cent reserve in towns having a popu-
lation Of less than $500, and twenty
FIVE per cent in communities larger
than 2,500. Our national laws re-
quire only fifteen per cent, outside OF
reserve cities. II is an old device to
discredit a proposed law by calling
il too radical, and by cloaking crit
icism in apparent conservatism.
"'rhe Fowler Billlbases its note
issue upon the same underlying prin-
ciple-a gold reserve and liquid assets,
upon which rests the notes issued by
the Bank of France. usually admitted
to be the best example Of central
national bank, The bill divides the
country into banking districts, and
places the responsibility for banking
methods in each district upon the
banks in that district, and insures
care and watchfulness by assessing
twenty-five per cent OF local losses
upon each district 1t offers induce
ment to the state banks and trust
companies to take out national char
tiers and thus unity our banking sys-
tenn and strengthen bank reserves.
1t gradually substitutes gold for our
three hundred and forty-six million
OF legal tenders now only partly
secured, Surely these measures are
not wild and radical"
"But, do not some or~the bankers
object to guaranteeing each other@
was asked.
"Yes," replied Mr.. Bush, Some Of
them are very decidedly opposed to a
mutual guarantee | discovered this
in Omaha, where one Of the leading
bankers spoke in opposition to my
views"
"Why do the bankers object to the
provision? Would it not strengthen
their position with the public and
prevent bank runs|
II believe most emphatically that
it would" was the reply "Of course
those bankers who oppose the guar
antee have several very plausible ar
guments, One is that the risk in
volved is great; another is that a
guarantee would encourage bad bank
ing, ! do not believe myself that
either argument is we'll founded. The
risk, when reduced to mathematical
basis, is almost in6nitesimal. Comp
.troller Ridgley in his last report
shows THAT on the average the losses
to creditors of insolvent national
banks from tthe beginning of the ma
tional banking system until October
3lst, 1907, were approximately one
thirteenth Of one per cent Of the an
nual average of individual deposits
His figures show average deposits OF
81, l,s2o,33o,3ll with annual average
losses on claims proved of $l,ll4223
That figures out at percentage to
deposits Of 0l073, which is approxim-
ately one-thirteenth Of one per cent !
"Do' you mean to say that failed
banks have shown losses equal to
only onc-thirteenth Of one -per cent;