The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1917-07-06
PREDICTS
SUCCESS
FORPLAN

j.. II. CnllDefS, PRESIDENT Oh ms
Scandinavian American bank of
Tacoma and Seattle, who is mem
Der of the state guaranty fund
board. organized in Olympia last
week. predicted today that the
operation of the law passed by the
recent session OF the legislature
for the guaranteeing of deposits in
banks would cause an enormous
increase in the deposits in banks
that join the fund.
"In Nebraska under the opera
tion of similar law" said Mr..
Chilberg, deposits in state banks
received additions of more than
rs million dollars in three months.
In South Dakota deposits in state
banks increased very fast under
the operation of a law guaran-
teeing the deposits in the state
banks.
1.-THE reason for this is that
state guarantee laws such as the
one now in force in this state are
the only bank legislation to insure
depositors against loss. Aside
from such laws the deposition and
the banks themselves have no as
surance of safety except examina-
tions.
Preferential Right.
with national banks the gov
eminent of the United tSates Is
the only party in a position to
know the condition of the banks,
thru the inspections made by its
examiners. And yet the govern
ment will not deposit any of its
own money in these banks except
against the very best of security,
preferably the bonds Of the United
States, in addition to the capital
and surplus of the bank and the
liability of its stockholders.
1.-THE same thing is true of the
state of Washington and its coun-
ties and the various municipalities
therein with respect to state
banks. In all cases, outside of the
officers of the bank, the state only
Is In a position to be absolutely
certain of banks solvency.
AT the same time the public Is
invited to place all of it's conf
Qence in the bank-and in most
instances justly. But the state
and government take preferen-
tial right over the citizens whom
they are supposed to protect.
Not Always Dishonest.
THE depositor is entitled to the
full measure of protection that the
law can give him. The Washing
ton bank depositors' guaranty fund
is the means by which this can be
done.
Banks do not always fail by
reason of bad management or of
the dishonesty of officers or en-
ployes. 1t has been frequently the
case that banks have failed be-
cause of business conditions which
they could not control or for other
reasons.
Industrial insurance has proved
a success in this state. 1t was OBJ
jected to at the start. Everybody
believes in fire and life insurance.
tho houses do not always burn and
most people live their allotted
time. Insurance of bank deposits
seems just as feasible and Just as
necessary.
Expects Many Members.
THE Washington bank deposit
tors guaranty fund is essentially
guarantee by all the banks that
assume membership that no de-
positor in any one of these banks
will lose any of his money. Sc
curities and cash will be deposited
with the state, under the super
vision of the guaranty fund board.
When a member bank, which is to
be known under the law as a guar
anteed bank, fails, depositors will
be paid their claims out of the
cash and additional assessments
Assessments that will be made IL
necessary against member banks.
II believe that practically all
the state banks will become men,
bcrs of the fund. and as time goes
on | look for great many of the
national banks to do the same
thing. Probably the system will
not be In full operation In much
less than a year, as 1t will take
time for the right ex-
limitations that the state bank ex-
! miner fs required by the law toll