Pine Bluff daily graphic. (Pine Bluff, Ark.) 1893-1942, 1914-07-08

I'm Kansas, 25 per cent reserve il
required.
On Texas, rs per cent reserve is
required.
In Arkansas, banks are required
to keep 10 per cent reserve, except
ing the banks acting as reserve
agents for other banks are required
[ to keep 20 per cent reserve. Under
the present national banking act
| banks are required to keep Is pei
cent of their deposits as reserve. But
under the new federal reserve act
| which will become effective in few
months, national banks are only re-
CURED to carry IL per cent reserve;
and against savings deposits, only
per cent reserve.
Conditions In Arkansas.
You will see that in Arkansas
state banks are required to keep vast
" more reserve than national banks;
and in other states where bank guar
ahty' has been effective, the reserve
is much higher than in other states.
"The carrying of sufficient and
proper reserve Is correct in theory
and principle; and all well-managed
LdAho, lllCoPCCllNc VI law, N0Aly q
sufficient and ample reserve at all
times. But in making laws for the
management of banks, parties must
at all times keep in mind that banks
must be allowed to earn a reasonable
1eturn upon the capital invested-not
only a reasonable return, but suffi-
cient amount to accumulate reas-
enable surplus, and provide for the
losses which are sure to occur at
times.
Banks perform great service to-
the business community in transfer
ring credits and making loans, and
the transferring of funds from ore
part OF the country to the other. II
might say, almost as great service
as the railroads, in actually transfer
ring the commodities from one part
of the country to the other.
at has been said frequently in TIE
last few years that the banking sys-
TEN of the United States was the
worst banking system in the world.
But in spite of this worst banking
system in the world during the last
50 years the United States has madel
a more wonderful progress and devel-
orment than any country In the same
length of time thai history records.
Fayors Independent Bank.
II believe there is a wonderful lot
OF good in the banking system OF
the United States. l am not believ-
er in a central bank with branches.
| am a believer in the independent
bank am believer in individual
effort, individual initiative and ildi-
vdual responsibility and reward. II
cannot conceive that this country
could have been financed and the|
country developed as it has been
done, under any system of banking
other than the independent banks
which We have had.
"If you will for one minute stop
to consider that banks Sell service =
that the public wants this service. IL
you simply want your deposits guar
anteed, there is bank, the deposits
OF which are guaranteed by the Unit
Ell States government. So If pond
OF the United States government Isl
good, the deposits in that bank ar"l
guaranteed to the same extent. But
does the public deposit with that
bank. Does that bank furnish SER
vice? The result speaks for Itself.
This bank, the deposits Of which are
guaranteed by the United States gov
crament, is the Postal Savings BANK.
lie deposits are guaranteed by the
United States government and they
nav interest on deposits. How many
of you gentlemen have an account IN
the Postal Savings bank of the Unit
ed States?
I'm the guaranteeing of deposits
there must be some authority some
where to control 1t would be the
height of folly to let any one and. eV-
cry one enter the banking business,
conduct their business III an lgnot-
ant, careless or criminal manner, ana
still. have the other banks RESPONSE
bic for their acts.
"You must concede, if you want
guaranty, some authority somewhere,
that shall say certain men can. Or
cannot enter the banking business;
that certain towns can have additlon-
a, banking facilities or not. as SUITS
that board; the interest tnat can pe
paid by the bank, the interest ina.
can be charged by that bank; must
have absolute control over the loans
to be made by the bank; VINO can
borrow, or cannot borrow.in ere
a political control over the affairs
of the banks of the state without u
nancial liability, or the hope OF imam
eial reward.
Was Guarantee Best?
How has guaranty affected the
state banks of Oklahoma? You kno"
they say-the proof OF the pudd'hs
is chewing the string. So it is proper
t, see whether the guarantee Oh oes
aosits has worked ITO the beaefit oI
the banks Have they prospered OK
otherwise? Mess the banks prosper
the people can not prosper.
"The state banks OF Oklahoma
reached their maximum in NUMBER
and efficiency under the statement
rendered the commission on January
7, 1911. At that time there were 800
state banks. with deposits of $6o,i4''-
coo. On August 8. 1918, the number
of banks had been reduced to ooo'
with deposits of $42,305. 000-a loss
on deposits of approximately $ls,ooo'
COO to state banks. -.
"The national banks OF the state
o. Oklahoma have very different