Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1913-03-20
ATLANTA BANKING
MEN OPPOSE
GUARANTEED
Dislike Democratic Plan to
Apply Scheme to National
Institutions.

Bankers at lIlS H0db VI 10 AlOAAdA
hanks in Atlanta do not take kindly to
the plan of the Democratic administra-
zion 10 father law guaranteeing bank
deposits.
They point to Oklahoma as an in
stance of what effect a guarantee sys-
tenn has. and while they are unwilling
On 60 into detailed discussion of the
protection until it is more fully out
lined from Washington, they are, to say
the least, unenthusiastic.
Joseph B. McCOrd, vice president of
the Third National bank, headed the
Aght against a guarantee system when
the proposal was before the Georgia
legislature five or six years ago. Mr..
McCord is the most outspoken of the
Atlanta bankers against a guarantee
plan.
1T simply means taxing brains, con-
srrvatism. prudence, skill and honesty
to help incompetence, wildness, rash
ness, inexperience and dishonesty" says
Mr. McCord
ct makes Atlanta banks responsible
for conditions in Maine, and San Fran
cisco responsible for conditions in At
lanta. 1t is unfair to ask that or to
ask strong. conservative institution
on one corner to stand responsible for
the antics of a crowd on another street,
over whom he can exercise no surveil-
lance.
Failed in New York.
The thing is not new. New York
state Instituted a state guarantee plan
IN 1919. By 1881, nearly every state
bank in the commonwealth had sus-
pended payment The state had to is
sue S20,O00O0O bonds to pay losses, and
It was not until 1855 that these bonds
we're redeemed.
Now, look at this" said Mr.. Nc
Cord. as he picked up the Blue Book of
Banks, and turned to Oklahoma. Okla
homa has the guarantee system, but
Mr. McCord pointed out that in every
instance where there are both state and
national banks in an oklahoma city,
the national banks. unguaranteed, have
the preponderance of deposits. in many
cases viii less capital.
That shows what the public thinks
of it," said Mr.. McCord. AT first the
tional banks out of business, but the
tide has turned, and now the state
banks are suffering and many of them
have taken out national charters"
Robert F. Maddox, vice president of
the American National, said:
Il have not heard full discussion of
the Democratic plan as now before the
congressional committee. However,
experience has shown that wherever
bank guarantee systems have been tried
they have proved very unsatisfactory.
ottIey Waits Silently.
John X. Ottley. vice president of the
Fourth National bank. said:
Il would not care to express myself
until the plan is fully outlined. If the
plan is no better than some that have
been tried, would condemn It heartily.
But perhaps this administration, which
H. l believe, unusually able, will sue
coed in drafting a scheme free from
Objectionable features. l want to walt
before giving my views"
B. G, Forbes, the noted New York
writer on financial and commercial top
les has his eye on the situation, and
declares that the Democrats headed by
Bryan, are determined to push a de-
posts guarantee plan for national banks
through congress. He writes
The government will not itself guar
antee deposits, but will compel the ma
uonal banks to shoulder the burden.
Democratic leaders, l am told, have
sounded the various factions at Wash
l1EtOn nd bor hat he
VIII be supported by the extreme radi-
Gals, AS well as by the regulars in
congress
The intention is to carry through
me measure at all costs.
Banks Must Bear Burden.
As already stated. the Federal gov
eminent will not undertake payment of
losses but will throw the whole respon-
sIolllty upon the combined banks. For
administrative purposes the country
VIII probably be divided into a number
ol zones, or bank associations.
The national banks will fight the
pan with all their might, but that the
administration has irrevocably made UP
us mind to place this enormously i'm
portant innovation upon the statute
DOCKS is conceded.
From inside banking sources l re-
CelVed this statement:
The proposed legislation to guar
antee all national bank deposits will in
aA probability be damned through. The
.hIng Is almost unthinkable, but that
uoes not alter the situation.
Guaranteeing deposits places a pre-
mum upon reckless banking, for de
posts will go to those who offer the
"'snest rates of interest and who. in
'ohsequence. must use the funds thus
obtained in risky way in order to
earn a profit. The outlook is most dis
turbng'
Inc latest return of the comptroller
VI me currency, showing conditions on
eoruary 4, gives the number of ma
''hal banks as 1925 Individual de
poSits aggregated $685., 100000 and
'laI assets s11, 1S5, 600, 900"
ONE 0P0MMc HDOccIMH