New-York tribune., 1918-05-14
B anks Protest
A ain st Bill to
Guarantee Deposits
Stamp Proposal as Discrim-
ination Against Conserva-
tive Institutions

The banks which are members of the
New York Clearing House yesterday
announced they were unalterably op
posed to the passage of Senate Bill
No. 1926, which is framed to guaran-
tee bank deposits under $4,000 in ma
tional banks through fund raised by
taxing the institutions affected. The
text of a letter which has been sent
to the United States Senators and Rep
resentatives from this state and the
members Of the Banking and Currency
committees of both houses was made
public by Walter E. Frcw. chairman
of the Clearing House Committee.
According to the terms of the bill,
which has been favorably reported
upon in the upper house by Senator
Owen, cha;' man of the Senate Banking
and Currency Committee, all national
banks would be taxed at a rate not in
eXcess oil one-tenth of one per cent of
all the deposits averaging $4,000 or
less, including tax on $4,000 of each
of the deposits averaging more than
$4,000. Deposits which bean more than
per cent interest are not 10 be pro-
tected by the proposed fund to make
good the obligations to those who have
placed their money in banks that be-
come insolvcnt.
Would Hurt Good Banks
Senate Bill No. 4426, now pending
in the United States Senate, puts pre-
MUM upon incompetence" says the
circular letter of protest of the Clear
ing House Committee eft prop0ses
that the government of the United
States guarantee all deposis in ma
tlonal banks of $4,000 and less and the
government guarantee up to $1,000 on
all deposits in excess of that amount.
or course, this guarantee is to be made
good at the expense Of the conserva-
lively managed and successful banks
SHOULD such proposition be en-
acted into law, any national bank, how
ever inexperienced it's official man
ayers; however limited it's capital re-
sources compared to the field of it's
activities; however given to risky ad-
ventures; however venturesome in buy
ing deposits by paying excessive rates
O. interest; however wanting in the
proven qualities which time and expert
ence have shown to be indispensable
to successful bank management, such
bank would, nevertheless, be able to
.CiiNio OuollcSo, VI uINlullV Claiming
that its deposits were protected by
the combined financial strength of the
whole national system. Good banks
would thus be compelled to give of
their strength to induce the creation
OF and then to support incompetent
rivals.
"Such proposition is in violation
OF common justice and common fair
ness. The stockholders in q bank in
one locality would be mulcted in loss
to compensate for the mismanagement
of banks hundreds or even thousands
of miles distant and over which no
mutual control or relationship exists.
Urges Laissez Faire
"Our people should be allowed to ex-
ercise wholesome discrimination in the
banks they select, as we'll as in their
business activities in general Individu-
ality and individual initiative are car
dinal qualities Of success, and these
qualities would be impaired if people
are to be taught by legislation to rely
upon the government to help them in
their ordinary individual transactions
and in the exercise Of ordinary judg
mcnt"