Evening journal., 1909-10-04
GUARANTEEING BANK DEPOSITS.

friends, the Oklahoma law guaranteeing
the deposits in banks has been put to the test.
A large trust company of the State has failed,
but the reports say that there was no run on
the institution by the depositors. They believ-
ed their money was safe And so it proved to
be.
The depositors under the law are paid out Of
the available assets of the bank and the state
guarantee fund The depositors therefore have
no cause to worry.
AS result of the failure special assessment
has been levied against the other banks of the
State to meet the emergency, and naturally those
banks do not like the idea of being forced to con-
tribute to make up for the losses of other peo-
pie.
1t seems that the bank which closed its doors
was mismanaged and that the State Banking
Board should have prevented the mismanage-
ment but it did not do Although this criti-
cism may be made of the State Banking Board
OF Oklahoma it can also be made of government
officials whenever a national bank coapses. The
difference in result is that under the present gov
ernment supervision the dcpositors may lose
their money while in Oklahoma it seems that
depositors are to lose nothing.
Much of the success of the Oklahoma plan will
depend on the supervision of state officials. The
principal objection to the plan is that it is a
temptation to wild cat banking. But il may also
be said that i'll some parts of the country there
is at present wildcat banking With other
banks of that State liable for losses incurred by
would seem that the other banks should be par
ticulary concerned to sec that the State Bank
Board is vigilant in its supervision. To most
who have money on deposit in banks any
law that guarantees deposits to be safe is good
Notwithstanding the objections of bankers TO
the Oklahoma law, If it works we'll. If it pre-
vents depositors losing their money, the demand
for similar law OF protection will spread
th: y,1hout the country. The day will probably
come when depositors In banks viii want guar
antee by the State or national government
Following the lead of Oklahoma Texas has
a law guaranteeing the deposits in State banks.
The new law went into effect on the first OF
this month. Two plans are open to the banks
an assessment or a bonding plan. OF the 4o5
State banks doing business in Texas, 4so Sc.
lected the assessment plan and thirty-six the
bonding plan. One bank decided TO go out OF
business rather than submit to the law In Tex
as, by an assessment, fund of 100000 is to
be accumulated to be used in the even of failure
of any bank. The losses in Texas through bank
failures have been very slight, less than one
eighth Of one per cent. year, and It IS believed
that the guarantee fund will be ample for any
emergency.
In some states the guarantee plan is needed,
but in others like Delaware, for instance, where
we do not have bank failures, there appears to
be no necessity for guarantee banking law.
And the same may be said OF postal savings
/ banks. We have savings banks here, long es-
tablished, that are as solid as a rock If there
were government savings bank at the low rate
of interest which it is proposed to pay, such 4
bank would not be likely to do much business.