Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1920-05-26
GUARANTEE OF BANK
DEPOSITS DISCUSSED

Sunburg Mimi. May Goth, 1920
Editor Willmar Tribune
Willmar. MINI.
Happening to be a member of an In
term Commission created by the last
Legislature to study investigate and
report to the next regular session on
the so-called Bank Deposits Guaranty
System, have given this question some
study and thought and if you have no
objection N to publishing it in your paper,
why Inclined to faner the ae adop paS5a
of such system in our state l shall
welcome criticism thru the columns of
with my views On the Subject. might
discuss the subject more in DETAIL than
I will attempt to do in this article but
Banks exist for the Accommodation Of
6 BUSINESS f -, # It is true that the Banks
have a right to be assured of the pro-
f feet99 of it's de6 depGs is For is
theory that it will be returned to the
depositor on demand. and surely the
for depositing money with a bank than
being able to get it out again when he
wants We WsI it. # he ca1not get it out when
Ing is all wrong and banks do not exist
for the accommodation of the public
b b}Sc;f for some 6; other reason: The most
simplest plan to secure deporitors is to
enable (preferably a voluntary system)
every state bank 4ko to subscribe certain
anty fund under the control of the State
1 Bank1 ne. Department. this fund to be
the Tor no ether than t. pay
ever bank fails this State Banking
Department. immediately takes charge.
to he dr nrSt 5nE the does is
sufficient amount to pay off every cent
t that is - due to depositors It then pro;
BIZ preVidinE for the 5s ad det tt h9 10
liquidate the affairs of the bank, collec-
tin tins as much Of the assets as is posi-
into the guaranty fund. If there is not
money enough in guaranty fund to pay
off the depositors in full, the Bank Be-
ment in every bank that have come e' in
under the law until he gets enough to
pay in full: In states where the guar
tional banks doing business in those
states. have surrendered their national
charters in order to become state banks
form of insurance that it not in general
use in the commercial world. IT is in
tbe G Unted in stltn teG sense M
ey into bank. that bank has i to put V up
mo neHd is to Mh m # that That nat
theory of insurance is that all who are
exposed exp sea- to a;e common DANCER shall bear
tune, falls upon, one of the other num-
PEI II every bank in the state
fand he oss py
reason Of the failure of one bank would
be borne by all, and the -depositors would
not not suffer fife -, This s would work work hard
would increase to such an extent that
the interest accruing to them on such
M9u funa S tg
TEN prevails; The argument is being
hankt that the prudent and
the, loss caused by the dishonest and
reckless banker. But this is not sound ;
rnS ieas0R that there is no Of
which he is managing fails. When the
banker hesitate to force the indorser to to
making a prudent man pay the debt of
ance of bank, deposits as before stated
is the only form of insurance that is
n not In general me5 use in the world of com.
his fs for e the %na a9e Of R9t
family after his death is looked upon
as as being very inprovident: The. owner
his vessel to put to sea. laden With a
valuable cargo, unless such was insur-
ed. The house that is not insured
a aga los loss by fire is the rare excep
| there. then. why people who deposit
their money in banks should not be pro-
tected Just the same as a mans widow
and children or his house Opponents
OF the guaranty of deposits must look
the ~ question te sauaIrely in the face; They
every instance where it has been tried
is has proven. success. In the state
of Oklahoma for instance after the law
500 banks had come under the provisions
Of the law fifty of which were national
banks that tms f the
lars and the deposits of banks which
had not complied with the law, decreas-
ed over one million dollars. A great
money from the unsecured banks and
put It in the secured banks. in spite of
| the. fact that a higher rate of interest
was offered by the unsecured banks
! Several states. notably South Dakota.
oklahoma Texas Kansas. Nebraska and
North Dakota have adopted the Bank
Deposits Guaranty System. The Kan
sas law with some notifications appeals
to me as being the most desirable to
adopt for our state. -