The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1909-07-22
A LETTER ON DEPOSIT INSURANCE.

JOnn Scnuette was puDuSlltu III tue
Bank ing Journal:
Manitowoc, Wis, July Q, 1909.
Senator w. G. Owen,
Maiden Rock, Wis.
My dear Senator:
When | read your very able address
on deposit insurance" delivered at the
Wisconsin Bankers Convention held on
board the steamer, while rocking on the
bosom of old Lake Michigan, | was re-
minded of my first venture along the
same line. | launched this subject at
Wisconsin Bankers Convention ia Mil
waukee over a decade ago. AT that
time | was not given an opportunity to
knock out any opposition or criticism
such as you were favored with. | sup
pose this was because the subject was
considered so vague and visionary that
it was not deemed worth while to dis
cuss it. | predicted then that if the
bankers would not insure their deposi-
tors the government would DO it for
them, and this prediction is now on the
way of being realized in the form of
Postal Savings Banks.
But | was not discouraged. kept
pegging away, at conventions and in the
press, and wherever opportunity present
ed itself. The demand for more detail.
ed arguments inGuced me to prepare
and issue booklet, showing the losses
from the time the National Bank was
established, and containing the draft of
a bill to be enacted, and also other argu-
ments in favor of the plan. This book
let was sent broadcast to bankers
throughout the country.
In 1905, Mr.. E. b. Cockrell, Cashier
of the First National Bank of Hennes
sey, Oklahoma, wrote me for a thousand
copies of the booklet, which he intended
to distribute in his state. | complied
with his request, but fear he may re
gret having distributed them, as the
state adopted the plan but barred him,
as national banker, from its benefits,
The decision that National Bank can
not avail itself of the insurance feature
seems to me very unjust.
Now, if you continue to advocate de-
posit insurance as you have started out
presistently and constantly, and earnest
| ly, you will not only succeed, but will
be entitled to the thanks Of the people,
and of the majority of bankers as well.
Do not be discouraged because single
| banker tries to condemn and ridicule the
| plan. for only few iarop BANKERS a
mere corporals guard is with him.
Three fourths of the medium and small.
er bankers, and nearly all the people
are with you.
Personally | prefer national law
which will be the same in every state
and will inspire more confidence. But
since the National Bankers seem TO op-
pose the plan so strenuously, and are so
short sighted about it, why, leave them
ont in the cold, If compulsory insur-
ance should encounter such strong OPP
| position as to endanger its passage, pass
an enabling act, and state banks will
soon seek its protection. This will
silence the opposition which unlimbered
its batteries against you in the follow
ing preamble and resolution: That the
taxing the good to pay ior the bad, to
tax knowledge to pay for mistake, lack
of training and ignorance, is unsupport-
ed by any theory of political experience
save that of the socialistic therefore we
oppose any plan of insuring deposits.
In support of this, one of the bankers
stated that insuring deposits would be
unjust, that it would lower the standard
of banking that it would lead to wild
cat banking, that the desired results
would be better attained by wise legis,
lation and more rigid inspection. Right
here the opposition exposed its weakness
and gave you chance to strike the
fatal blow. You very effectively took
advantage of this when you asked, you
assume then that we can pass laws that
will practically do away with bank
failures. If so, how would it work any
injustice to any bank to require it to
contribute to fund to cover losses
when no losses will occur?' Feeling he
was cornered, he admitted that so long
as banking business continues there will
always be some suspension of banks
Realizing his discontinue and seeing
himself deserted by his fellow bankers,
he beat a hasty retreat and Withdrew
the resolution.
That the large and successful bank
ers are opposed to deposit insurance, is
but natural, as all banks would then be
on a common level as far rs credit is
concerned. These are the ones who are
heard most at conventions. Mr.. Anton
Schaefer, superintendent Of Banks of
Minnesota, in an able article in the New
York Chronicle, entitled Deposit In.
surance Must Come, calls attention to
this fact, that the discussion ut bankers
conventions does not disclose the real
sentiment of the bankers, as such con
ventions are usually dominated by few
large bankers who oppose the measure.
But even these objectors do not deny
| tb,+ ;,e,ropaa ,f Iapnuito ,riIl ,,oto,A