Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1908-10-06
BRyaN's uNsouND BANK PLAN.

BRYAN's UNsoUND BANK PLAN
From the opening of the campaign
Bryan's bank deposit guarantee plan
has been made the leading issue OF
the Democratic party. Something had
TO be introduced to make the people
forget free silver the catch-phrase
issue of the past and to obscure the
free trade question still an issue,
but one kept well under cover owing
to it's frequent regulations in the
past. So the guarantee of bank depos-
its was taken up. 1t has a catchy
sound guarantee of bank deposits,
and it gave the Democratic ora
tors material for burning speeches
full OF oratorical clap-trap and red
fire,
But with the election still month
away, the bank deposit guarantee
plan has been, about as well repudiat-
ed as any chimerical issue ever con-
ceived by Democracy and advocated
by Bryan. Golfers takes fling at
it this week. After pointing out that
mo foreign government has ever
adopted il. though the countries of
the world have been busy with bank
ing and Insurance a long time and
stating that when an earnest but
not very thoroughly trained politician
comes forward with a revolutionary
proposition the burden Of proof lies
heavily on him. Golfers says:
Mr.. Bryan's scheme, which he calls
guarantee. is an insurance PROPOSE
ton, and it is entirely mutual in it's
nature. The government does not
stand back of it. There are no stock
holders who pledge their resources
There is nothing except a certain def
mite and limited fund. This fund is
TO be used to insure risks which are
not selected 1t is to insure all alike,
good or bad. and all at the very same
rate. The real working of the scheme
amounts to this: the stockholders of
an Indiana bank guarantee that the
assets (Which they are not allowed to
see) of, say, an Idaho bank are and
shall continue to be good: and that
the directors of the Idaho bank lover
whom they have no controD shall al
ways be men of rectitude and sound
Judgment. Mr. Bryan thinks that this
little idea of his will prevent panics.
In 1893 the existence Of a gold fund
to guarantee the payment Of govern.
ment currency in gold many times
larger proportionately than the de.
Dosit guarantee fund would be was of
no avail in preventing a gold panic.
In 1907 currency and specie reserve
fund in the national banks, equal to
about IL per cent of their deposits,
did not prevent one of the most fran
tic currency panics in the history of
the national banking system. What
reason is there to think that. in times
OF stress and uncertainty, fund Of
FEW millions to guarantee deposits
OF Sl3,OO0,O00,0 would have any
more reassuring effect? The scheme
is worth little or nothing as protection
It would greatly increase the number
of failures by the encouragement CT
reckless banking. 1t would not help
to meet panics. 1t would help greatly
to bring them about.
And then there is the judgment OF
the American Bankers association,
non-partisan organization. which had
no thought of making political capital
but was taking stand solely to pre-
vent the lowering of the present
banking system when it passed the
following resolution
Resolved, That the American Bank
ers' association is. unalterably opposed
to any arbitrary plan looking to the
mutual guarantee Of deposits, either
by state or the nation, for the fol.
lowing reasons:
1. 1t is function outside of state
or national government.
2. 1t Is unsound in principle
8. 1t is impracticable and mislead-
Ing.
4. 1t is revolutionary in character.
5. 1t is subversive to sound eco
nomics
g. It will lower the standard OF
our present banking system.
Z. Productive of and encourages
bad banking
s. 1t unjustly weakens the strong
and unfairly strengthens the weak
banks
9. 1t discredits honesty, ability and
10. A loss suffered by one bank
leopardizes all banks.
II. The public must eventually pay
the tax
u. It will cause and not avert
panics.
MR.. RRYAN's DILEMMA.