Omaha daily bee., 1908-10-17
DEBATE ON BANK GUARANTY
.. M. Hitchcock and Henry W. Yates
Contest the Point.
ONE ON PANIC, THE OTHER ON LAW
lyric Theate FILLED by Audience
that Pays Close Attention
60 the Remnrks of the
Speakers,

system providing for the guaranty of
bank deposits under government control
was the subject OF a joint debate Thurs
day. night at the Lyric with @. NJ. Hitch
cock speaking in the affirmative and Henry
w. Yates, president Of the Nebraska Ma
tional bank, in the negative.
Mr.. Hitchcock opened by telling of the
harships through which this country had
passed because OF the financial furry of a
year ago, but did not talk much on the sub
Ject of deposit guaranty. Mr.. Yates took
up at once the topic under discussion and
showed how the guaranty system had been
made a law in Oklahoma under the direc-
ton ~ Mr.. Bryan and how 1t is working
badly, Just as other previous attempts at
such legislation had worked. The debate
waxed warm and the speakers we're roundly
applauded. Mr.. Hitchcock sidestepped the
issue under discussion. while Mr.. Yates ar
gued why a guarantee fund should not be
established. The theater was filled to its
capacity, the boxes being filled with women
and q considerable number of women being
seated in tn auditorium. DR.. George L.
Miller presided.
HitchcOck's OpenIng.
"a year ago the country was in the
throes Of the largest business activity of
any country on EARTH" said Mr.. Hitch
cock, in opening the debate.
suddenly the people were shocked, for
the 1000 national banks and numerous
state banks had refused to pay tho de-
positors on demand. 1 aid not criticize
the banks then and 1 do not now. 1t
was the fear of their customers-thelr
depositors-which had it's origin in the
city of New York Fear is the cause of
all these panics, and we can only make
the customers feel safe by putting up d
guaranty so the deposftors would know
they could get their money. An effort
was made 70 stay this contagion of fear.
but the lines at the banks became longer.
The banks resolved to issue clearing house
certificates. This is a deathbed insurance
when they meet and insure each others
deposits. We claim the banks should do
as other interests do-in the days of
their prosperity prepare for adversely.
Insurance is one of the first forms Of
cooperation, both life and fire and other
insurance. Why not insure against bank
panic7 If the premium was mountain
high the bank could afford to pay IT. The
government has already undertaken a GER
tain form of insurance, and in many
countries the banks are a part of the gov
eminent. The government makes a stock
uOAuGI AAdOAO " iva AhC NhAOhAhN - hNo
holdings. 1t also has inspectors which the
banks have to pay for. But the govern
ment does not go far enough.
This city has never been blighted by
bank disasters, but when such a blight
comes the city might be set back for
twenty years. This insurance will not only
make good the damage, but will also act
as a preventive. 1t has been estimated
that the check to this nations activity has
been at a cost OF 1900. OOO,o 900 by reason Of
the recent pam, We would not have had
this loss had the depositors been guaran-
teed that their money was secure. I
realize there are many good objections
which can be stated by the other side. ]
figure that II will cost the banks one
twentieth Of / per cent of the deposits to
provide an insurance. The bankers could
loan out all their money II this law is
, passed and would not be compelled to keep
n reserve which IL so much wasted money
which makes no return to anyone"
Position of Mr.. Yates.
'I expected to hear something from Mr..
Hitchcock or the guarantee OF bank de-
~posits,, said Mr.. Yates, "but he has spoken
to you on the panic. What depository law
would have stopped the rottenness of the
banks in New York last fall? They were
closed before there was a run. He has
wandered off into the field of insurance.
Insurance and guaranty are different. In
surance companies do not charge the same
rate on the strong as they do on the
weak; In fact, they won't insure a weak
man at ali. The same applies to fire irI
surance.
Every conservative banker in the coun-