Monroe City Democrat., 1908-10-08

| The Unlte0 states government ISquh
the deposit of specific security when II
entrusts money to a national bank, al
| though 1t can examine the bank at any
| time; the state requires security Wnen IT
requires security and the city requires
| security; even the banks require security
| from the officials who handle money.
Why should the depositor be left to take
| his chances?
Not only is the depositor without pro-
| lection, but the security given to nation,
state, county and city lessons his secur-
| ity. They are preferred creditors; tney
have a mortgage on the gilt-edged as
| sets and the depositor must get along
as best he can with what remains. Why
are the interests Of depositors thus neg
lected?
| A bank asks deposits on the theory
that the depositor is sure OF the return m
| make the facts conform to the theory.
| The depositor, the community and the
| banker himself will be benefited by legis-
the assurance that that which is COM
| mitted to the keeping OF the oank VIII
be available to meet his needs at any
time. Such is not the case today, Tor
while all banks are reasonably secure
they are not absolutely so. This state
| ment can be verified in several ways.
| First: The President has advocated
postal savings bank, and mis- posImasIGer G
general, in presenting an argument IN It's
| favor, pointed out that many millions
are sent to European savings banks
| every year by Americans OF foreign
birth, who prefer to trust the state IN IN,
| stftutions of the nations beyond the sea
rather than the private banking mstitu-
| tions here.
| Second: It is known that a consider
| able amount of money is in hiding, the
amount increasing with the approach Oh a
| is not only Withdrawn from active use,
| but is likely to be withdrawn just at
the time when money Is most needeo ana
when the withdrawal will increase tne
reason with fear; it is futile to tell men
that they viii probably get their money.
| The moment the depositors suspect
bank, they hasten to destroy Its solvency.
| Distrust, and distrust alone, can explain
| the hiding Of money.
| Third: The increase in the issue OF
money orders, payable to the oroer OF
| people are seeking g-eater security Tor
| their money. The banks will pay an IN
terest upon deposits, and yet those who
| terest, and, in addition to that, pay the
price of the money order to secure the
| governments guaranty.
| Fourth: National banks confess that
| their banks are not secure when they
oppose the guaranty of state banks on
| the ground that II would lessen the de-
| posits In national banks; and state bank
ers confess that their banks are not Sc
/
/ anty system on the ground that 1t VIII
| draw deposits away from state banks
| If you want to find whether banks are
absolutely secure, ask the directors to
give yoT their personal note to secure
| your deposit and you viii learn that tney
will not bear the risk which they ask you
Fifth: The experience of Oklahoma
| furnishes conclusive proof that deposi-
tors do not feel that their money Is safe
in unsecured banks On the 1Ith OF De
Akn Tah q
enacted a depositors' guaranty law,
which became operative February 4th,
| 1908 BY the provisions OF this law, all
state banks, and as many national banks
are taxed one per cent on their deposits,
and the money thus collected Is put into a
| guaranty fund. The banking board Is
| authorized to make additional assess
ments from time to time to. keep the
| fund UP to this amount, and Is directed
| to take possession of any tnsolvent oank,
pay the depositors In full, and % Ieim2urse e 1Se
failed bank. Five hundred and fifty-hVe
banks, including f1fty-four national
| banks, had come under the provisions OF
ing but 255 unsecured banks (all national)
| in the state. Statements are made by
| the banks In December and May. Be
tween these periods the secured banks
unsecured banks, all national, showed a
decrease in deposits of 81, 101, S07.So. A
| large part of this increase represented
money brought from hiding or from with
| out the state, but the decrease in the
| unsecured banks can only be explained IN
one way. A large number Of depositors
| withdrew their money from the unse-
cured banks and and .h too 1t in m sDts 5ds Of
| the fact that in order to prevent with
drawals, the unsecured banks, In some
| instances, offered a higher rate OF inter-
est than the secured banks were permit,
/ ted to pay; and It must be remembered
also that the banks which suffered loss
| of deposits were all national banks. And
| to make 1t certain that the difference was
cured national banks gained, while the
| unsecured banks lost. While the deposits
were increasing in the guaranteed banks
/ of Oklahoma, they were railing IN tne
state banks and trust companies OF Kan
| sas-the decrease being 81, 15S. 026.N be-
| tween March 31st and June 18th.
| No amount of criticism OF the ttmid
pie who deposit money want more Sc
| curity than the laws at present give
/ them. They will change banks to get
more security, and, II necessary, tney
| will send their money to another state.
| For many years efforts have been made
| in Congress and in the various states TO
secure a law guaranteeing deposits, but
| the influence Of the great banking inst-
| tutions has been sufficient to prevent ac-
| tion. Last fall, however, when the
hanks by a concerted action, suspended
payments on checks, the depositors were
| everywhere brought to a realization OF
| the fact that their deposits are, in fact,
| loans, payable on demand under ordi-
| nary circumstances, but payable at the
| will of the bank in emergencies The
| depositors suffered a considerable loss
during the suspension Of payments, and
| they have not forgotten the lesson which
they then learned. The Democratic party,
being more free than the Republican
| party to respond to the needs Of the
| masses of the people, inserted the fol-
| lowing plank in its national platform:
| 1--WE pledge ourselves to legislation by
| which the national banks shall be re-
ouired to establish a guaranty fund for
/ the prompt payment of the depositors
| of any insolvent national bank, under an
equitable system which shall be avail
able to all state banking institutions
| wishing to use II"
| This principle has been applied in Ok
lahoma and the results have been very
| satisfactory. The average annual loss
| to depositors in national banks during
| the last forty years has been less than
| one-tenth of one per cent Of the deposits,
and the loss to the fund in Oklahoma,
| under better regulations and restrictions,
| has been absolutely nothing during the
six months In which the law has been in
| operation.
The Republican platform is silent on
the subject and the Republican candi-