The weekly chieftain. [volume] (Vinita, Craig County, Okla.) 1905-1913, 1909-05-14


familiar with the law of evolution of
human society-frst the individual,
then the family, then the tribe and
the alliance among tribes, then the
modern state, and finally federation
Of states--each step impelled by the
instinct that united we stand, diyid-
ed we fall''-those who know these
things also know that all human in
stitutions obey similar law; fnan-
cial institutions among the rest In the
case of banking we have had in this
country the wildcat period, along in
the S0s when each bank took deposits
made loans and issued bills without
the effectual regulation. Ii was the
period of extreme indiydualism in
banking the pioneer period Then,
after the war, came the national bank
ing system with is strict regulations
by a central authority and the abso-
lutte security Of bank circulation, but
without a similar security for deposits
although the pass book and the bank
note stand exactly on the same foot
ing as bank obligations. After that.
with each successive panic, there de-
yeloped close and still closer organi-
zatlon and cooperation among banks
aud bankers, in the shape of National
Bankers associations and clearing
houses in large cities. all for mutual
help and to guard mutual interests.
The New York Clearing House asso.
citation, by close cooperation, has
averted many panics in times of trou-
BILE. and has been instrumental in nit
igating others. II is in effect a step
In the direction of a mutual insurance
association, but Of couse 1t can only
operate In large cities whore such as
sociations are possible In foreign
countries this is accomplished by hav-
| ing a great central bank like the
Bank Of England aud the Bank Of
France, or by system of branches
like that of the London and Westmin-
ster bank, and Of the big banks In
Canada In this way the great mother
banks takes care of the children in
times Of trouble. aud tne branches
take care Of each other, as Il is all
but impossible that the branches at
remote points from each other will ex-
perience the same trouble or neces-
sity at the same time Il will be re-
called that during the panic Of 1907
a Canadian bank was driven to sus-
pend operation. thereupon one of its
fellow.banks took charge of the assets
and paid off ali the depositors. It
is in reality a system of mutual pro-
lection. and works SO we'll that bank
failures IN those countries are ex-
tremely rare. In recent times they
have been altogether absent
But in this country. under our pres
ent system, each bank is an isolated
institution and must take care Of itself
in time Of trouble, practically IN the
same way that each man or family was
isolated in pioneer times. Even the
ciearing house system, where il ex-
listed. broke down during the last pan.
ic except as a means Of cooperation in
putting on the lid Hence the neces.
sity of another step in the evolution
of banking analogous to the central
bank aud branch banks system of for.
eign and older countries, only more
progressive, more perfect and better
adapted 10 the genius Of our instih.
tions. And the next step is the in.
surance or guaranty OF bank deposits,
step that will in time make the co
operation OF all the banks for mutual
protection more elfectua than ii any
other country. and will afford abso-
lutte safety to depositors. at the same
time that Il will afford a greater de
gree of security and more profit to
stockholders For Il has been demon.
strated that panics and the lid are
neither safe no profitable experiences.
When we consider all this it be-
comes clear that the deposit lnsuanee
idea has not only come to stay, but
is inevitable-as inevitable as the law
Of evolution itself and as little 70 BE-
resisted by any set Of men That the
ferment is working is shown by the
fact that both great parties prom.
lsed the people protection for their
money The postal savings PROPOSE
tion Of the republicans Is just as much
a guarantee measure. as far as It goes.
as the deposit guaranty Of the demo
cratic platform
Hugh McCulloch. one OF the most
! distinguished flnanciers this country
ever had and who was twice secretary
Of the treasury. foresaw the defect
Of the national banking system In fail
ing to secure the deposits as well as
the circulation lie was one of the
Na.a .a..a a..