Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1911-01-12
for their productiyeness of .agricul-
tural commodities.
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SUPREME COURT AND GUARAN.
!, TEE LAWS.

ing for the compulsory cooperative
guaranteeing of bank deposits, irres-
pective of the question of the wisdom
of those or any similar laws. It
would, of course, be a mistake to
attribute to the supreme court the
purpose of passing on the actual
economic merits of the policy en-
bodied in the bank guarantee laws
whose constitutionality 1t has affirm
ed. What it passes upon In any
such case is not the question OF
whether the state legislature has or
has not exercised good judgment in
its treatment of the matter upon
which it has legislated all that the
court affirms is that the purpose the
legislature had in view Is one that
is within its constitutional province,
that the law has bona fide relation
to that purpose, and that It does not
offend against any prohibition OF the
Constitution. Y
In the present instance, the end
aimed at by the law is declared by
the court to. fall within the police
power of the state, which "in a gen
eral way" says the opinion delivered
by Mr.. Justice Holmes, extends to
all great public needs" 1t covers,
therefore, the promotion of anything
that lis sanctioned by usage or held
| by the prevailing morality or strong
and preponderating opinion to be
greatly and Immediately necessary to
the public welfare" The security
of "the currency of checks" and the
safety Of the practice Of depositing
lin banks, fall under this description.
And the position of the court on all
three of these cardinal aspects Of the
matter commends itself quite as
strongly in the light OF practical
common sense as in that Of legal
opinion.
But to say that state legislature
has right to enact law compelling
all the banks chartered by that state
to contribute to fund which shall
guarantee deposits made in any one
of them is only to say that in this,
as in other matters, legislature has
tie right to make mistakes, provided
it acts in good faith. If the legisla-
tnre thinks that a provision Of this
kind, while imposing only a very
small burden on the banks, conters
upon the whole people immunity
from great danger, it is not for
the supreme court to say that the
provision shall not be enacted-this
is all that yesterdays decision set
ties.
That the guaranteeing of deposits
would not only fail to make panics
imncesible, but would in more than
one way tend to make the danger of
nanics more serious, is the opinion,
we feel sure Of the great majority
of competent judges of such matters.
The peculiar qualities that go to the
making of good banking have hith-
erto been ihdisolubly bound up with
the fact that to the bank reputa-
ton for soundness is a possession OF
vital importance. II a bank is to
be regarded as absolutely safe not
because of the excellence. of its own
MANAGEMENT, but because 1t has the
strength of all its rivals, either there
will be a vast amount of loose bank
ing or there will have to be intro
dueed an amount of mechanical con-
troll and a system of espionage which
would 60 far toward taking away
the benefits to the community OF
sound banking enterprise. And after
all your precautions had been taken.
the system would still be subject to
strains OF unforeseeable intensity in
times Of universal optimism and ex-
pansion Of credit. The guarantee sys-
tenn would then operate to proven,
the weak places from giving way;
it would stave off the panic. but the
breakdown would he far more SER
Ious when II did occur. II happens,
Indeed. that there was another OF
yer wendell Holmes who. half a cen.
tury ago. gave Us a BIT Of wit and
wisdom which touches off the bank.
guarantees idea exactly. The wonder
Ifrl one-hoss shay vas built to get
over the trouble thai arises FROM the
uncomfortable circumstances thcl Tho
weaker place mus utand' the strain,
Innf wf an know what happened RI