The White Pine news. [volume] (Ely, Nev.) 1906-1910, 1908-10-03


received their money within ten days
after the bank closed its doors. The
defaulting bank. however had only
$3S. 900 of deposits originally and
after exhausting its available cash
the other banks only had to make
up $4,000. This very small failure
cannot be considered as any test
whatever of the merits or dement's
of the act
Mr.. Bryan in his campaign, has
advocated the Oklahoma act as one
that should generally be enacted by
both the government, in respect to
national banks, and by states with
respect TO state banks. His advocacy
of the measure has focused atten-
ton upon it 10 such an extent that
it mas been subjected 10 very
searching analysis The best and
most experienced minds of the
country have taken issue with him
on the act and pointed ont very clear
ly the positive danger that lie back
of il. 1t has been shown that:
Such a law makes sound. con-
servatiye. well conducted banks res
ponsible for the losses of mismanag-
ed or fraudulent banks, over which
they have no control or supervision
and possess no intimate means of
aseertaining their actual financial
status in order 10 take precautiOn-
airy measures in advance. 1t does
not take very deep insight TO per-
ceive that this is an injustice. If a
law We're passed requiring every
merchant to stand proiortionally
responsible for the obligations of
every other merchant that failed, or
every farmer TO stand his part of the
debts of any farmer that failed. and
SO on with each industry being made
responsible for the failure of its in
dividual members, injustice of such
a procedure would be brought home
to all
But it is the positive, inherent
danger lurking in the act that has
aroused thinking minds against 1t.
We have always had periodical pan
les and financial stringencies. These
may never occur again with the
Aldrich bill in force and such amend
ments and changes in II as the future
will disclose. but any banking act
must be Judged in the light of what
benefits or evils IL would contain
during panic times until all danger
of future financial stringencies is set
to rest
II has been shown that If New York
last fall had had a Jaw similar to
that of Oklahoma. every bank in the
state would have been compelled to
close its doors. The imagination can
picture what effect that would have
had on the balance of the country.
There was not enough available cash
in the sound banks of New York
state 10 have promptly met the de-
mands of depositors in the knicker-
booker Trust company, and other
financial institutions that went down
within the short space of a week
without weakening the cash reserves
of the sound banks to such an eX
tent that they would have been be-
low the legal reserve limit and caus-
ed them to close or have precipitated
a run which would have brought
them down in a general crash. Then
what becomes of the depositors.
Under such a state of facts does IL
not appear that the depositors In
the weakest. frailest. worst conduct
ed banks have the best chance of
getting their money promptly on
demand. while depositors in strong
conservative banks are the ones least
likely TO get anything? Manifestly
the weakest banks will fail first and
the first bank failing has the best
chance of getting its depositors
paid in full. The bank holding out
Ion u,tgf un1ar tho nh Ia
act see its cash resources withdrawn
to meet the obligations of other
banks and when its turn comes there
is no money to meet its OWL.
Imagine what would have occurred
in Nevada when the State Bank and
Trust company closed its doors
year ago. Could the solvent banks
of Nevada have made good the inn
mediate demands of depositors on
the State Bank and Trust company
in excess of a million dollars and not
ieapordized and forced to the wall
every bank in the state2 Think
over II. II you can come to any other
conclusion your reasoning would be
interesting. II YOU agree with this
statement of facts do you want the
Oklahoma law enacted in Nevada?
We don't want il. II is IA danger
and menace. II not only is unjust
10 those banks which have stable
regulations back of them which the
people have learned TO trust. but It
adds a constant, threatening, always
impending danger overhanging every
bank and every depositor money
that is an infinitely greater evil than
the questionable guarantee it gives to
the depositCr Every bank is tied up
in chain and if one or more close
their doors owing depositors sum
in excess of what the remaining
banks can with safety make up. all go
down, like an Alpine rope when the
point of resistance is overcome drags
all down the abyss YOu cant have
the apparent merits of the Oklahoma
law without this extreme danger and
menace.
And then again When "A man
deposits his money i'm banking
institution he should exercise reason
able prudence in selecting which
shall be his Depository. The state