The Montgomery advertiser., 1908-10-02
GUARANTEE
 IS OPPOSED Deposit Plan Discussed
 by Bankers. TAKES STAND AGAINST IT Postal Savings Bank Plan Is
 Condemned. Convention Comes to an End With the Election of Omcers--Georsc M.
 Reyaolds of Chicago is
 President.

Denver. Colo. Oct. I-The question of guaranteeing bank deposits was brought squareiy before the annual convention of the American Bankers Association today in a report of the Association's Federal legislative com mfttee, which takes a decided stand in opposition to such action either by the Federal or the State governments.
 The report in part is as follows.
 Your committee is opposed to tho guaranteeing of deposits by either State OF Federal governments; or the assumption of trusteeship by either of a guarantee fund, believing that it would be function wholly outside of any purpose for which State or Fed eral governments were organized, and for the further fact that the assuming of a trusteeship would be misleading to the general public as 1t is not a guarantee by either State or Federal governments and that such a law would work to t.-e detriment not only of the banks. but to the depositing pub lie as well.
 be insured against the usuaD mis- chance of business, why not all classes. and where is the Justice of levying depositor's loan for which he is not responsible, on other banks who are not responsible for his loss and who have no voice whatever in the selection of where he shall keep his accounts?
 Questions of Finance.
 "Depositors of a bank are guaranteed primarily by the character of the as- sets in which the depositor's money is invested. margined and fortified by the banks capital and surplus. If a banks assets. that is to say. its investments, are good, if its credits have been wise- lV an tixyaI itors are amply protected and need no other guarantee. Why should not the banks assets be guaranteed? Why not guarantee payment to the banks of the receivables of their various cli- ents This would guarantee deposits Both propositions are alike illogical and absurd.
 Deposits in bank are safe in just proportion that it's assets are good We should discourage unwise exten- sion of credit rather than open the way for reckless banking which would seem to be the Result of the proposed schemes.
 We are told that these plans will do away with panics. Are they not more likely to prove the mother of panics? A panic is business paralysis born of unreasoning fear on the part of the public. In such conditions, will depositors refrain from withdrawing their fundS2 VIII they not rather wtth-~ draw them at once because of the un- known danger resulting from each bank being compelled to guarantee the losses in 10000 banks?
 "To those who have had the gruelling experie nee of several panics there is but ono answer to this question, and no law could be spread on the statute books more fraught with mischief than a law for enforced guarantee of bank deposits. @+ sI
 ''Let Congress provide a means whereby perfectly solvent banks with good assets can obtain currency with the same facility as banks in other great commercial nations, and they will have gone far toward the preven- tion of panics." I
 The report of the Committee on Amendments to the Constitution and By Laws, was read and adopted
 Among the amendments adopted wa. one for the organization of a section os Inc American Bankers Association to he known Nas the American Institute of ranking Section. with reports on tbe Executive Council. The new section is made up of banking employees
 The Legislative Committee submitted the following resolution: