The Leon reporter. (Leon, Iowa) 1887-1930, 1910-09-01
1NsUR1NG BANK DEPOSITS.
d. L. Heinsheiner, President Mills
County National Bank, Glen
wood, Iowa.

what we nave. me puDllc grants Cne
banker greater credit on his repu-
tation than banker would grant
to manufacturer or merchant.
A statement for credit from one of
these, with showing of $4,000
capital, and 100000 Indebtedness
nearly all of which is due on demand
would not be regarded by a banker
as strictly "gilt-edge," and security
would be asked for loan in any
amount, and yet this is better state
ment than the average banker offers
ol his condition to the public.
There is no good reason why the
banks, and through them the COM
merce of S5,000,000 of people should
be so radically disturbed at time
when other conditions and resources
were never equalled, because of the
action Of a few high-grade promoters
and gamblers.
These we shall always have. but
their power to injure ought to be kept
down to the minimum, SO that they
would not be able to create distress
beyond tnelr own associates and i'm
mealate connections. But under our
present system this is impossible.
When it requires SO per cent Of
confidence and 4 per cent of currency
to do the business of the country,
why take up so much of our valuable
time in discussing the kind of securi-
ties necessary to bolster up the
per cent? Why not devote more time
10 the more important feature, and
insure the stability of Sc per cent?
We keep on discussing currency
and more currency, when it is only
through a lack of confidence that
we have been deprived of the cur
rency that rightfully belongs to u.s.
An emergency currency based on
furnishing sufficient confidence for
the SO per cent used in business,
will be failure and a disappoint-
emergency currency would be locked
up as it was issued, and would not do
the business expected.
There have been many plans sug-
gested to improve and remedy our
financial system, but all, except the
guarantee of deposits, are based on
the issuance Of more currency in times
of stringency, and not one without
a guarantee, OR else backed up by the
government, or both. Then why
should the friends of these measures
cry socialism, "paternaliSm and
other bad names at the believers in
the guarantee of deposits, when we
are willing to furnish the funds for
the payment of depositors, and do
not ask the government or the state
to act otherwise than as depository
for the funds.
Look at it from any standpoint,
and carefully analyze all the proposed
remedies, and you will find the gov
eminent will have more to do with
the banking business under these
plans, than under the insurance of
deposits.
Unless the bankers come to their
senses and do business, we will have
the government in the banking bust
ness on grand scale, and our strong
est competitor, so much so, that
when we look backward, the friends
of the insurance of deposits will be
looked upon as extremely conserva-
tive, and not as socialists and de-
stroyers of the regulations of banks
that f1atter themselves that they are
able to do business regardless of the
rest of the world.
l fully appreciate the personal
worth and reputation of the honor
able banker who has, and is deserv-
ing of the confidence of the people.
This is generally true Of most banks
and the undeserving are few in COM
parison.
During the recent unpleasantness,
many of the country banks, deprived
of their deposits as they were, and
Notwithstanding the advice and action
of the correspondents, paid out cash
in unlimited amounts to their Gus
toners, while during the same per-
iod, their correspondents locked up
everything in sight and gave as their
afraid of the country banker"
There are many more of the coun-
try banks than of the large city
banks, and if their deposits are not as
great, neither are their liabilities.
Yet in times of stringency, as in 1907,
their reputation will compare favor
ably with the larger banks, and it is
for the stability and protection of
their profits and in their business
that the insurance of deposit senti-
ment has been growing among them
like the city bankers, they are in
cllned TO look at the question from
selfish standpoint.
The insurance fund could be used
only for paying deficiencies, after all
assets are exhausted and assessments
have been made against the stock
holders as provided by law, therefore
l am unable to see where. there can
be any inducement on the part of
anyone to do reckless banking, when,
as now, their own capital is involved,
and only depositors' deficiency is to
be paid from this fund
AS it is now, if there is a failure
in his town, the banker will discover
that his deposits will shrink from the
effects of loss and general confidence,
while on the other hand under the
insurance plan, the depositor will find
ready market for his claim. So the
remaining banks will receive the
benefit and business of the failure.
And the community in general, will
not find their funds, which are neces-
sary, tied up and unavailable for an
indefinite period.
Did the Chicago clearing house ap-
ply this method of reasoning at the