The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-12-10
.DOLLEY ON BANKS
Compares Guaranty With Postal
Savings Bank.
He Finds That They Both Come
to Same Thing.
STATES BEHIND THEM.
Postal Savings Bank Takes
Money Out of Circulation.
While Guaranty Leaves 1t in
Channels of State Business.

ed in the last issue of one of the big
financial periodicals of the west:
There is a feeling among Chicago
banks that the next legislature proposes
to pass some drastic legislation look
ing toward the guarantee of savings de-
posits. 1t is believed that some such
action can be expected in the near fu-
ture not only for Illinois but Wisconsin
as well. Bankers who are in close touch
with affairs :: Springfield maintain
stoical silence on the matter but are
credited with expressions which indi-
cate a grave. apprehension lest some
radical move be made that VIII not
only disrupt present methods OF bank
ing but perhaps cripple the entire sys-
tenn.
Reports from Washington would in
dicate that the senate is unanimously
in favor of postal savings banks ana
that the bill introduced by Senator car
ter of Montana is practically assured
of being passed in it's amended form.
Therefore, the prospects are that some
sort of guarantee legislation VIII snort
" be enacted. either by the Illinois
state legislature or the government The
hope is generally expressed that what
ever action is taken will come through
the government.
Fasteners Not Consistent.
In comment on the above article,
State Bank Commissioner J. n. Dolley,
who is regarded as an authority on the
guaranty question IN this section OF the
country. said:
After all, this sentiment of eastern
bankers and financiers in favor of the
postal savings bank plan and against
the state guaranty scheme places them
on record as both Tor and against the
same thing.
eff the government guarantees individ
ual deposits through the medium of
postal savings banks then the state or
Kansas and the state of Illinois, and
every state in the union each take their
individual part in a national system OF
guaranty. The government is COM
posed of the union of the states. Theirl
representatives form the government
and their resources go to make that
government rich and powerful If the
government guarantees anything the
property in each one of the states
stands as a surety for that guarantee.
"There is this disadvantage, however.
in the postal savings plan of guaranty
of deposits. The money placed by IN
dividual KanSans in a postal savings
bank practically goes out of circulation
so far as the business life and enter |
prise of the state is concerned. 1t is
guaranteed, this money. and the owner
thereof is full of confidence, but not |
penny of the millions of dollars Kansas
would be sure to place in such system |
of banks would be used in the upbuiid- |
ing of the state and it's business and
resources.
"The depositors could not borrow |
cent of money from postal bank nor |
could any other Kansan as compensd-
ton for the millions of Kansas money |
placed in that bank and reverting to |
the uses of the government.
Therefore, the postal bank system
is guaranty on a large scale with the
advantage of safety and the disadvant-
age of the accompanying drain on the
monetary resources of the state with
out any compensation whatever
Two Systems Are Alike.
1.-The state guaranty system, against
which the easterners proclaim so loudly
is exactly the same system as the
postal bank plan only it is on state
scale instead of a national scale. The
state guarantees the deposits without
taking the money outside of The state
or outside the channels of state trade
and enterprise and business. If postal
banks are good thing for the nation at
large, then state guaranteed banks are
a better thing for the state itsel+- The
latter offer surety to their deposltors
and at the same time loan money 20
customers to be used in the channels VI
business for the development of the +
sources and business of the state. TIE
state plan may not be perfect ut tnls
time, but it can be made perfocc by
future state legislatures as its faults
kansas, as new and western
state. is borrower and not lender.
Therefore postal savings bank
would tend to increase the sum she !
would have to borrow from year to
year in about the proportion that her
people patronized that institution.
believe that the western bankers and
fnanciers as a rule favor the Central I
bank plan rather than that of the
postal savings bank. When the state
guaranty of deposits is worked out to
2 successful fulfllment and operated
In connection with central bank
plan that does not license too much |
centralized financial power, then, in
my opinion, will exist an ideal fin
ancial system from a western stand
point.
But I allege, in all sincerity, that
the eastern financierS are unfair when
they condemn the state guaranty of
hold the postal savings bank or ma
tional guaranty of deposits by the
states as a whole instead OF separate
y as individuals. They are worse
than unfair, for they seek to apply
the same remedy for national ills un-
der another system of healing which
will serve the personal ends of one
section of the country as opposed to
the good of the country as a whole.
Postal savings banks may be and
doubtless will be a good thing for the !,
Did and richer sections of the country,
but I maintain that state guaranty
which keeps the money of the state |
At home and in the channels of bust
ness is better thing for the rev and
states of the west, and
yet at the same time can work NJ
hardship on the older states of the |
east