Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-02-25
MAKES BANKS SAFE
Senator Owen Praises Okla
h0ma Guarantee Law.
BIG INCREASE IN DEPOSITS
State Banks Gained 200 Per Cent,
National Banks Nothing.
BRINGS MONEY FROM HIDING
Oklahoma Senator Wants Plan
Adopted by the Federal
Government.
BIG INCREASE IN DEPOSITS
BRINGS MONEY FROM HIDING

On the ground that it would bring out
OF hiding many millions of dollars
Senator Owen of Oklahoma today urged
in the Senate the creation of a fund in
the federal treasury to pay losses to
depositors in national banks that fail
a plan for the federal guarantee of de-
positS in national banks
His speech was apropos Of an amend
ment to the postal savings bank bill
which he proposed yesterday. providing
that the controller of the currency
should set apart the annual tax on the
circulation Of national banks as a bank
depositor guaranty fund. TO be used by
the controller for the Immediate pa
ment of the depositors of nat ional banks
failing. The amendment specifies that
the Hquidated assets are to be repaid to
the fund as far as necessary Deposits
under contract bearing a rate of inter-
est in excess of per cent and deposits
on current account bearing more than
per cent are not to be insured in this
way.
Senator Owen cited the experiences of
oklahoma in the bank guarantee system
10 show the value of extending such a
system to national banks. Individual de-
posits in the state banks of Oklahoma
March j, 1908, he said amounted to s1S,-
OU,Om; November Is, 1909, they were
$40, 1I5.0O0. In. the eighteen and a half
months the deposits increased nearly o0O
per cent. he pointed out, In banks whose
deposits were guaranteed.
National Banks a Contrast.
Deposits in the national banks in the
new state, he said, were SIS, 600, 900 Feb
ruary IA, 1908, and We're s3S 100000 June
-, 1909. In that period, he continued,
seventy-three national banks took out
state charters. and the number of state
banks increased from 47O to Co.
The state of Oklahoma has the best
banking system i'm the United States" re-
marked Senator Owen. 1T is a model for
the other states of the Union. IT is a m,,-
tual insurance plan, administered by the
state, with every precaution possible
against reckless banking, providing every
reasonable safeguard and the greatest
stability and security possible
lie reviewed the limitations of the state
banking system. and continued:
The effect Of this law has been to bring
out OF hiding many millions of dollars,
coin and currency, to give greater bank
ing capital to the merchant, manufac-
turer, farmer and other business men.
1T has given greater stability to the
finances of Oklahoma. 1t was drawn by
the bankers Of Oklahoma, and will be by
them perfected should any weakness ap-
pear in any part of ii. To pass the pro-
posed amendment and give a like system
to national banks would serve the ma
tiOnal banks greatly by giving them sta
bility by preventing the fear Of the de-
positor in time of financial distress, and
make the repetition of such catastrophe
as the failure of the National Bank OF
Commerce OF Kansas City, Mo-, impossible
This failure was due to vicious rumor
and was a gross outrage on one of the
best banks in the United States and did
great harm to the whole southwest.
Fears of Big Banks.
'"The big banks of the United States
have condemned the bank guaranty plan,
believing II small banks had guaranty
fund to protect the depositor the big
banks would lose deposits to the extent
that the smaller banks would gain
II do not believe this to be correct
prognosiS, because the smaller banks
would obtain, and the large banks would
also obtain, moneys which are not now de-
posted with any bank, and the great in
crease of deposits in the smaller banks
would be reflected in an increase of their
reserves kept in the big banks, and the
big banks would be themselves protected
by the insurance fund against the coward
Ice of timid depositors, who frequently
brighten the big banks out of their wits
| and cause them to line up back to back
against their own depositors. refusing
payment and issuing cashiers checks and
clearinghouse certificates instead of cur
rency to those who have legal right to
| currency and compelling their country
correspondents to pay per cent per an
| mum for currency as they did in 1907