The Greeley tribune., 1911-01-19
Bank Guaranty Laws vindicated

Bank Guaranty Laws NinNicN'eu
(Literary Digest.)
The opinion OF eastern financiers
that the bank deposit guaranty laws
of Oklahoma. Kansas and Nebraska
we're Unconstitutional does not seem
% be shared by the supreme court. SO
the financial organs have turned 10
the plea that the guaranty laws are
In condition of approaching des'
aetude." anyway. as the New Yorh
Times puts 1t. and the decision sus'
tanning them has therefore lost all
public and practical interest. the
eastern critics are also consoline
themselves by emphasizing the TACT
that Justice Holmes. who read the
courts unanimous deciison, did not
oass upon the wisdom or the eco
oomic merits OF the guaranty policy
1at based the verdict upon a states
sight. under its police powers, 10
protect depositors. Several papers
note that the court shows no evil
Aence of being "fossilized" In this
1Adorsement of Oklahoma's advanced
IDEAS in banking. and Washington
oorresrondent notes with Interest
<Aat ION one matter at least the
Highest court in the land and Will
liam Jennings Bryan are In accord.
The great objection urged against
4aese laws when they were first
framed was that the diversion OF
Ger cent OF the average daily deposits
Of the banks to make up the guar
snty fund deprived the banks o
Vroperty without due process OF law.
To this the court replies that long
series OF cases have established that
an ulterior public advantage may
Justify a comparatively insignificant
taking of private property Tor what
In Its immediate purpose is private
ase." Further:
1.-THE power to compel, before
hand, cooperation. and thus. 1t is be-
lieved, make failure unlikely and
general panic almost Impossible
must be recognized, If government
b to do its proper work. unless we
can say that the means has no rea-
sonable relation to the end. So far
II that from being the case, that the
device is a familiar one. 1t was ac-
eepted by some states the better part
Of q century ago, and seems never to
nave been questioned until now.
''In short. where the Oklahoma
legislature declares by implication
that free banking is public danger,
and that Incorporation, inspection,
and the above described cooperation
are necessary safeguards. this court
certainly can not see where it is
wrong"
II free banking Is public danger
declares the New York World, the
bankers and the bank directors are
responsible, and they may we'll heed
the lesson. and remember that mot
IN the w,st only do bank depositors
wish a guaranty that their money is
safe" The Springfield Republican.
which exrected this final outcome.
takes fing at the federal Judges in
the lower courts who declared enc Of
there laws invalid. and 1t THINKS
they must be little acquainted with
.'the principles Of the banking busi-
aess or the requirements Of the coun-
try in relation thereto"
On the other hand. like the New
York Times. the Boston Advertiser
Z certain that the bank deDosit ex-
periment has failed, and expects to
see the laws rerealed before long
labeled constitutional, they were al
ready marbed undesirable In a
1ong editorial review OF the decision
The Times insists that the recogni-
fion OF the power to make failures
unlikely" Is very different thing
from. an assertion OF its efficiency
This paper believes that banfing
operations ought to he more care
fully scrutinized by the state and by
members % the banking community
and concludes:
''It is the belief Of the most ex-
perienced men of finance that the
enforcement of sound banking by
thorough examination and by the
exercise OF unceasing vigilance az
fords better guaranty of safety
than the provisions Of the laws re-
Gently enacted in the west, and now
sustained, so far as their constitu
tionalty has been called in question
by the highest tribunal"
An important financial authority
the New York Commercial which
took pains to testify on the very day
Of the bank guaranty decision to the
Every general belief that it will be
declared null and void" proceeds af-
ter fhe event to ignore its own pro-
phetic fallibility, and to call atten-
tion to the manifest bearing OF these
sulings on federal legislation: