The Montgomery advertiser., 1908-08-28


 bank needs the auarsnty as well as the little. one, for big banks faii as well as
 small banks. and the bigger the bank
 the greater the calamity to the com.
 big as to be absolutely beyond danger. and a community needs protection
 against. the big banks failure even
 more than against the failure Of the It has Sometimes been objected that the guaranty system would bring into the panking business a lower class or
 men and reduce the average In char acter. On the contrary. the guaranty of .desposits. submit. would, if 1t made any difference in this respect.
 bring into the banking business
 better ..Ih, class 1f men and raise 1T rhat tsr
 IL is not to mans discredit that ne Is not willing that one of his fellow men should lose money on his account
 man should be careful, of his name and eonsidefate Of the esteem of his fel- lows At present a successful farmer
 or or business man may be induced to that his name Is desired to give stand | ing and credit to the bank, but such man Is constantly haunted by the fear that q bank. official may be guilty of criminal conduct which will bring the bank into insolvency. It is even possible that the banks assets may
 be entirely dissfpated. and that the
 honest citizen, who has become 2 stockholder. may either be compelled to go beyond his legal liability or
 meet the bitter criticism of the de- posftors who have suffered by the failura Would ft not be worth some
 thing to the stockholder, in peace of mind. to know that the maximum of his loss would be The value of his stock and the 100 per cent liability. and that no depositor could lose any thing? I am convinced that the guar anty of deposits would not lead to de- generation in the personnel of the tors. 1t Is not necessary to show that the advantage to the bankers would amount to more than the tax. Tn c examination of the banks would con- banks, even if it were certain that
 the examination was of no pecuniary advantage to the banks. The law would continue 10 require certain even If 1t were certain that such a law brought no pecuniary gain to the bank; and so the banks ought to be compeiied to insure their depositors shown that such insurance would bring compensatfnR advantage to the bank. The bank charter has a value: I If It were not valuable the bank would l Is a gift from the people through the | law and the peeople who auth orize the establishment of bank have a right to demand. In return. that the bank | when 1t invites deposits. and make | good it's promises of security to those who deal with 1t
 But as a matter of fact the banks VIII, as a rule. gain more from the
 law than they will lose by the tax imposed by the law. The experience of the okiahona banks shows this :. The interest collected upon the in- a 1u&. 4 L E-.-za N~m A. pay the losses accustomed by in- solvency. But two banks have failed
 and the assets have in both cases been sufficient to reimburse the Then. too. the banks must remem- Der that the question Is not merely
 whether: depositors shall he made se-
 sufe but whether the security shall by the Government through a postal
 The refusal of the banks to permit
 the passage of law granting secur- fty to depositors Is responsible for the growth of the sentiment in favor of the. Government savings bank and the sentiment will continue to grow un- less something is done to satisfy the ject
 The Republican party proposes the
 esIao llshme ent of postal savings bank the guaranteed bank because if is bet ter for the depositor and better for
 the banker--it gives the depositor the the banking business in the hands of me banks. But the Democratic plat form declares for "a postal savings bank 1T the guaranteed bank cannot be ninety per cent of the voters will by their ballot demand either the guar
 anteed bank or the postal savings bank Can the financiers prevent the carving | out of this denand2 The Republican platform does not go into detail but it is fair to assume l mat the postal savings bank plank is 1 intended as an endorsement of the pos- | tai savings bank system proposed bv the President and postmaster general.
 Under this plan the Federal govern ment would invite the deposit of say
 ings, limit being placed upon the amount that each person or each family could deposit. According to this plan. tno business man would not be pro tected, for he uses a checking account instead of savings account; but no one can doubt that the successful oper- atlon or government savings bank would intimately lead to an extension
 or the plan until the government bank
 would include the ordinary checking account and be open to deposits with out limit. It would mean a long con test between the depositors and the
 bankers, but contest which must in l the end be decided on the side of the depositors. The banker must decide. tnSI eAuIe, Wnetner ne VIII favor a pos | tai savings bank which. in the absence | of the guaranty bank, will grow until I It absorbs the banking business, or l preserve the present system of banking l by giving to the people, through a | guaranty law, the protection which
 they must otherwise find In a govern =
 ment bank.
 The Democratic plan, therefore, con-
 templates less radical change than the Republican plan.- In his notifica- | ton speech Mir. Taft charged the Dem
 ocrats with being socialistic in some
 of their remedies. The charge was not
 well founded. but might reply by
 charging him with advocating an un-
 necessary extension of the govern
 ments sphere of actiivty in the estab- | lfshment of the postal savings bank. when the guaranteed bank would an- | sWer the same purpose without any | considerable increase in the number | Of government employees. would rather see the banks attend to the banking business than to have 1t trans | ferred to the government, and because | 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 l difficulties.
 There are only 20 900 banks, while
 there are 15.000,000 depositors, and do not hesitate to declare that in a
 conflict between the two the depositors