The Ocala banner. (Ocala, Marion County, Fla.) 1883-194?, 1914-06-19
THIS DEPOSIT WAS GUARANTEED

Yesterday the city of Pensacola
received a check for $4,000 from a
surety company, which had guaran-
teen the city's deposits to that amount
in the First National bank.
"The cost of this guaranty to cover
a period of one year was $125, or one
half of one per cent, which the bank
paid to the surety company as pre-
MUM for its guaranty before the mon
ey was deposited by the city.
'If a surety company can make
these guarantees, and profit by the
business, at a cost of cne-half of one
per cent. per annum, why should not
the government itself guarantee de-
posts for all depositors, little as well
as big, and require all banks to pay
the premium to cover all of the de-
posits just as this bank paid the pre-
MUM to cover this one deposit?
"The guaranteed deposit is nothing
more nor less than an insured depos-
it, of the same character of protec-
tion as is your house insurance or
your life insurance. When your
house burns, you get the amount for
which it is insured. When yUu die,
your heirs get the amount for which
your life was insured. Why isn't it
equally reasonable to have bank de-
posit' insurance, so that should your
bank fail you would be paid the
amount of your deposit?
''The present session of congress
can do no more important work than
to put a bank deposit guaranty sys-
tenn into effect. 1t will come in a
short time anyway. Why not have it
at e?"-Pensacola Journal.
The foregoing article refers to a
deposit of $4,000 which the city had
on deposit in the First National bank
of Pensacola, which failed about two
weeks ago, and we quote the Journals
article as giving q concrete instance
of the application of the principle of
the guarantee of bank deposits, it's
reasonableness and it's absolute fair
ness to all parties.
In all transactions between individ-
uals, involving the loan OF money, a
guarantee of its payment is required
but in transactions between banks
and individuals, the advantage is all
on one side. The individual must give
gilt-edged security for what he Dor
rows, even on very short time, while
he receives no interest for what he
deposits in a bank for less than a.
specified time, usually six months or
more, and only four per cent. in that
case; and in either case with no Sc.
curity except the stability of the bank
itself, which it is we'll known depends
on many contingencies. Common fair
ness requires that both parties should
fare alike and that there is no hard
ship involved in the requirement of
guarantee on the part of the banks,
is clearly and forcibly shown in the
case cited by the Journal.
When Oklahoma was admitted to
the Union, about eight years ago,
bank deposit guarantee law was en-
bodied in its constitution, which was
the subject of many dire forebodings
of financial evil. The howl came, of
course, from the banks, which were
properly shocked by having one of
the old barnacles of special privilege
Knocked off the hull of their none too
sea-worthy craft. But time has .vindi-
Gated the wisdom of the Oklahoma
constitution makers. In all the fail.
ures of Oklahoma banks that have oe-
Cured since it's existence as a state
not a single depositor has lost a dol.
lar, and it is claimed that some of
the state banks of Oklahoma have de.
posts from as many as thirty differ
ent states. Is there any higher evil
dence of the soundness of the system
and the confidence it inspires in the
investing public?
We say with the Journal: ct will
come in short time, anyway. WHY
not have it at ?"-Bartow Con.
rier-Informant.
The above articles are somewhat
debated, but as we have recently held
an election and new public servants
Will soon be clothed with the power
OF making laws. it seems to us that
1t would be well for them to consider
the argument contained in the above
editorials.
One is from the pen of Frank
Mayes, editor of the Pensacola Jour.
nal; the other from the pen of Gen
eral E. M. Law, editor of the Barlow
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