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


ton to father a law guaranteeing bank
deposits.
They point to Oklahoma as an in
stance of what effect a guarantee sys-
TEN has and while they are unwilling
TO go 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
fight 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-
servatism, prudence, skill and honesty
to help incompetence, wildness. rash
ness. inexperlence and dishonesty" says
Mr.. McCord.
1T 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 a strong, conservative institution
the antics of 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 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.OOO,0OO bonds to pay losses, and
it was not until 1855 that these bonds
were 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 win less capital
THAT shows what the public thinks
OF it." said Mr. McCord. AT first the
guarantee law bade fair to put the ma
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 Ot1ley, vice president of the
Fourth National bank, said:
IT would not care TO express myself
until the plan IS fully outlined. II the
plan Is no better than some that have
been tried, would condemn II heartily.
But perhaps this administration, which
Is believe, unusually able, will sue
csed in drafting scheme free from
Objectionable features want to wait
before giving my viewA"
B. c. 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-
posits guarantee plan for national banks
through congress- He writes:
The government will not itself guar
antse deposits, but will compel the ma
4ional banks TO shoulder the burden
Democratic leaders. I am told, have
sounded the various factions at Wash
iugton and have found that the proposal
will be supported by the extreme radi-
calls, as well as by the regulars in
congress.
THE intention is 10 carry through
the measure at all costs.
Banks Must Bear Burden.
"As already stated, the Federal gov
eminent VIII not undertake payment Of
losses, but will throw the whole respon-
sibility upon the combined banks, For
administrative purposes the country
will probably be divided into a number
Of zones, or bank a ssociations.
The national banks will fight the
plan with all their might, but that the
administration has irrevocably made up
It's mind to place this enormously i'm
portant innovation upon the statute
books Is conc eded.
From inside banking sources I re
ceived this statement:
The proposed legislation 10 guar
sntee all national bank deposits viii i'm
all probability be damned through. The
thing IS almost unthinkabIe, but that
does not alter the situation.
Guaranteeing deposits places a pre-
MUM upon reckless banking, for de
posits will go TO those who offer the
highest rates of interest and who, in
consequence, must use the funds thus
obtained in risky way in order to
earn a profit, The outlook is most dis
turbing.'
The latest return Of the comptroller
of the currency, showing conditions on
February 4, gives the number Of ma
tional banks as 1925. Individual de-
posts aggregated $5.985.OUO, coo and
total assets $11,1S5, 900, 900"
ONE BROWNS CROSSING
RRI0GF 0lIRING Fl nm