Albuquerque citizen. [volume] (Albuquerque, N.M.) 1907-1909, 1908-09-11
WOULD PLACE PREMIUM
ON WILD CATT|NG
SAYS KANE
Deputy Comptroller Takes
Occasion to Give Bryan
Guaranty Plan
Hard Knock.
BARS CONSERVATIVE
BANK MANAGEMENT
Scheme Outlined in Democratic
Platform and Carried Out In
Okldhoma'S Laws Would
Increase Failures and
Hurt Banks.

Washington, Sept. 1.-THE Bryan
plan for a law guaranteeing bank de-
posits receives a hard whack in a
statement issued by Thomas p. Kane
deputy comptroller of the currency.
Mr.. Kane's statement Is ostensibly di-
rected against the new Oklahoma
statute, and no mention Is made of
Mr. Bryan's banking plank in the
Democratic national platform, but 1t
assails the Nebraskan's scheme un-
mistakably with a strong series of
arguments. Mr.. Kane declares that
a national law guaranteeing deposits
would place premium on wildcat
banking, would increase rather than
decrease the number of failures, and
would strike a killing blow at con-
servatism In bank management.
Mr.. Kane's statement follows:
The opinion recently rendered by
the attorney general of. the United
States to the effect that it is unlaw-
ful for any national banking associa-
ton to enter into such an agreement
as in contemplated by the Oklahoma
deposit guaranty law disposes of this
question, so far as the legal right of
national banks under existing laws to
make contract of this nature is
concerned.
Thrs opinion, however, does not
deal with nor settle the basic prin-
ciple involved in this latest monetary
problem which has been suddenly in
tected into our complex banking sys-
TEN and into state and national poll
tics.
The questn is in no sense a politi-
cal one, in the common application
of that term, and cannot be cor
rectly solved by party politics. 1t is
an economic problem which appeals
strongly to a considerable number of
our people, as well as to some well
known students of finance, and Is at
tracing enough attention to call for
Thoughtful consideration and intelli-
gent discussion by experienced bank
ers and financial scientists.
The principle itself is believed to
be ethically and fundamentally un-
sound. but it's baneful tendencies
should be demonstrated by impartial
and logical reasoning, devoid of sell
fish considerations, and not by pas
sionate political strife.
This movement did not originate
with the bank depositor. 1t is the
Adlutdl sequence VI d Keen anu more
or less selfish competition for bust
ness between the banks in the newly
settled and rapidly developing sec
tions of our country, and has been
seized upon by the politicians as a
popular tenet with which to obtain
for their party candidates the votes
OF the unwary and unthinking. I'm
less its fallacy is intelligently ex-
posed it is likely to extend TO other
sections of the country.
The most persistent advocates of
this modern financial heresy among
the banking fraternity will be found
in those sections of the country where
liberal or excessive rates of interest
are offered by banks as IN induce
ment to secure deposits, and high
rates are charged for loans.
The local rate Of interest IN the
state Of Oklahoma is per cent The
contract rate is II per cent. Next
to Texas oklahoma leads the states
of the union in the number of ma
tioual banks of the small capital class
that have been chartered since the
passage of the act of congress Of
March IA 1900, providing for banks
with a minimum capital Of $4,000.
There are IN Oklahoma at this writ
ing 3O7 national banks, 217 of which
have q capital each of less than $50
600 Competition among this class
OF banks is keen. A large number
o. these banks pay per cent on de-
posits and receive ~ per cent per
annum on some loans, and from Q
&c per cent per month on others.
The payment of liberal or excessive
rates of interest as an inducement to
secure deposits attracts funds to a
bank which would not otherwise be
received. The natural tendency OF
such a policy Is toward injudicious
and speculative banking. Because, in
order % find profitable employment
for such deposits at a higher rate OF
interest than that paid, the bank is
compelled to seek investments for
such funds n loans or securities of
more or less speculative or hazard
Gus character.
Such a policy makes a depositors'
guaranty law essential to a bank OF
this class as a means OF maintaining
itself in the community in competl-
ton with the conservatively managed
institution which pays no interest on
del osits subject to withdrawal on
demand. but relies principally upon