The Bridgeport evening farmer., 1911-01-06
GUARANTEE OF DEPOSITS WOULD
 PREVENT PANICS
Senator Owen Makes Explana- ton of Important Measure
 Opposed by the Ignorant
Especial from United Press.)

Washington, Jan. 5.-As one of the leading opponents of bank deposit guarantee idea, Senator Robert l.. Owen, of Oklahoma, to-day, prepared for the United Press, the following statement of the effect of the dec g. ions, yesterday, of the United States Supreme Court, establishing the con st.tutionality of the guarantee laws of Oklahoma, Kansas and Nebraska. Copyright, 1911. by the United Press
 Associations.)
 (By Senator Robert L.. Owen.)
 The decision of the Supreme Court of the United States on the bank de- posit law of Oklahoma, Kansas and Those who opposed this law guaran- teeing the safety of bank depos ts did so on the theory that to compel one bank to contribute for the safety of the deposits of another was taking property without due process of law. this argument invalid. And the Okla homa position was confirmed as good also. k
 The Oklahoma opinion is that the banking is public business, that the banker invites the public to deposit it's money and that the state. in is- suing a charter, places the proper
 
 the public as well as the banker.
 In Oklahoma we believe that the banker who demands security for money he lends to the public should give security for money he receives from the public, and the cheapest form of insurance is the guarantee fund. contributed by the banks in proportion to the deposits, and wh oh practically gives insurance at abso- |. tely cost and this cost is almost negligible quantity.
 The fact is that the banks contrib uting this insurance fund have had their deposits so greatly increased by the addit ;onal safety offered that 1t has been very profitable to them as a financial proposition, the increased deposits earning many times the cost of the contribution to the guaranty fund-the deposits of the state banks being nearly three times what they were three years ago, thus multiply ing the earning power of the banks.
 Twelve years ago in the public press I urged the guarantee of bank depos- it's, not so much to benefit the banker Or for the benefit of the depos' tor, as for the stability of commerce-the pre- largely due to the timidity of cer- tain class of depositors who, upon the least alarm in tue public press. security withdraw deposits for hoard- ing.
 Taking the banks and trust com pan:es as whole, their deposits will average ten times their total cash. When the banks become frightened, there Is a panic in the land, which tremendously disturbs every line of business, paralyzes commerce and flinders the productiveness of the country. Now the depositors will have the guaranty in back of them. <Je Af Nf rlol. l.. lars not now deposited in any bank that would come in handy under this system. It would add several thous ands of millions of increased capital to the banking system to establish this method because it must be re- membered that every dollar in cash measures ten dollars in deposits and credits as is proved by the history of comptrollerS' reports.
 If the amount paid by the National banks of the country as taxed on cir culation were converted 'nto a guar antee fund until it should amount to $50, 900 0GO, rem aiming invested in two fund would cost the banks nothing, would give them security and peace and greatly strengthen the financial and commercial stability of the na- tion.
 The real opposition to this system comes IrOIU the ignorant OIIlCerS or the banks of the big cities, who stu pidly believe that the guaranteed safe ty of the depositor in a small bank would diminish the deposits in the big banks by increasing the deposits in the small banks; the big banks for. getting that a large part of their de- posts is the surplus fund of the small banks.
 The opinion of the big banks has been reflected over the Treasury De- pertinent. The former United States treasurer MT. Treat, and former Unit ed States Comptroller of the Curren- cy, MT. Ridgely, and others, having disproved and severely criticised the Oklahoma system, the attorney gen. eral held against the national banks of Oklahoma, taking advantage of the Oklahoma system which the Oklaho- ma law offered the national banks.
 It was amusing to see MT. Ridgely, as soon as he came to be comptroller of the currency, organize company for the guaranteeing of bank depos- itors of the national banks, artfully contrfved under the guarantee of their assets (to the extent of protecting de- positors- which the attorney general said was lawful. In other words, the former comptroller of the currency MT. Ridgely, undertook to do indirect ly what the Oklahoma law did di- rectly.
 For either acute or chronic kidney