The Eureka sentinel. [volume] (Eureka, Nev.) 1902-current, 1910-04-23
A Plan To Guarantee Banks

Editor Eureka Sentinel: Eureka is passing through a time OF
great hardship on account of tho closing of its bank ms ns'i'u
ton has been for years the mainstay Of the people. Old ana young
kept their savings there. Now that it has closed ithas not only caused
great difficulty TO the merchant. but it has tied up the widows mite
and the pennies of tie orphans and the school children.
The question naturally arises whether some method cannot be
devised by which such inconvenience and hardship can be prevented
The Oklahoma plan by which solvent banks are taxed and IS
sessed to aid insolvent banks is manifestly unjust 1t carries the
theory that the weak should support the strong too far.
We all realize that the Postal Savings Bank that is about to be
carried out in this country means for one thing, that the payments
of deposits when called for will be absolute, because the whole
fnancial. strength of the country will be behind it.
This State has made a step in the right direction when she
established a banking commission, although the law is weak in not
giving this commission more discretion, and in failing to provide Tor
a punishment in case of a manifest dereliction IN Office. Ihese
points can however be remedied in the future.
Quarterly inspection of all banks should be made obligatory
and all banks should be prohibited from taking such security as
mining stocks, which are subject to gambling fluctuations.
Now it seems to us that the State Legislature could make an
appropriation establishing a fund, which could be increased by a
small annual general tax until a certain fixed amount had been pro-
cured, and this fund kept S a security fund to aid in the immediate
payment of all depositors in full of any bank that might fail The
money thus advanced to be repaid, with interest, by the receiver
from the first funds derived from the defunct institution.
Such a law would prevent the hardships under which Eureka
is at present laboring and would certainly be for the public good
While objection might be made to this plan on the ground
that it would be class legislation. and that if banks are to be thus
aided there is no reason why other lines of business would not be
entitled to the same aid, 1 do not think this objection is good for
the reason that no other institution is SO much of a quasi-public
one as the local bank.
When a merchant fails little suffering is occasioned except to
his Immediate family. When a mine or factory closes none but
those working there suffer. But when a bank fails every depositor
suffers. The suffering being general, I see no reason why a general
tax to alleviate it would be a hardship, or be unjust. At the same
time one must remember that with a vigilant banking commission,
thorough inspection and the prohibition of questionable securities
the fund would be rarely If ever brought into use.
The writer does not propose this plan as the best that can be
devised, but simply suggests it for the purpose of having the papers
of this State take the matter up and argue it pro and con and thus
awaken enough public interest so that our legislators will act when
the next Legislature meets.
1t seems to me that a matter of such general Importance should
not be made a matter of party politics, but that all should work
tremendously to attain the greatest good for the greatest number.
r. A. DEAN.