The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1925-01-30
Larson Makes Speech TO Cut High Rate OF Interest
REP. a. T. LARSEN GIVES FACTS AND FIGURES ON
BANK DEPOSITORS' GUARANTEE LAW-DE-
SIGNED TO PROTECT SAVINGS OF PEOPLE OF
MONTANA. al5aAazF|

share in the losses. If you borrow
money YOU must give ample security /
to the banker. This is as one should /
do. When you deposit money in the
bank it is a loan to that bank. The
relation Of debtor and creditor is like +
wise affected. Security should then
be given you to protect you in the
same ample manner. Under existing
laws one does not have this security.
We sometimes hear it said that
these kinds Of laws will proCE-ce ''Wlld
cat" banking. Such has not been
found to be the case in the many
states were such banking laws have
been In successful operation for a.
number of years. In fact, quite the
contrary has been evidenced, due to
the stricter supervision, and the
watchful eye Of the neighbor banker
over that of another When fire IN
surance was first proposed, critics
said there would be more fires. Ia
fact, there have been less fires. 1t is
lust as reasonable to say that there
ale more crimes of arson, murder,
etc, because we have laws furnishing
fC such crimes. There will be better
and stricter banking with the strong
arm of the law netting cBt punish
ment to the sO-called reckless wild
CATER"
The contention that the guarantee
plan taxes the honest banker for the
acts of the dishonest banker does not
maintain. Quoting a recent governor
in one of our guarantee bank states
where he says: The claim is made
that the fact that dep0sitors in
bank are assured against loss will
tend to make bankers reckless, and
that safe and conservative bankers
will be held for the improvident and
| dishonest practices of the bad bank
er-this argument has no more
weight against bank insurance than
it Gees against loss by fire, because
some policy holder may set fire to his
building.
1t is also true that the policy hold
er who has no fire pays his pro rata
of the losses. The good citizen is
always taxed for the acts Of the dis
honest fellow. He is taxed 60 pay for
the police, to maintain the iails and
| penitentiary. The successful man
pays to support the pauper. Official
inspectors are hired to inspect dis
eased hogs for fear the other fellow
will sell diseased hogs, and bank ex-
aminers are now hired to inspect
banks, because the dishonest banker
needs inspection. Under our prcpos-
ed law of guaranteeing deposits, there
Will be no assessments if the bank
ing system is perfect The cost will,
! therefore, be in accordance with the
standard of banking, if there are no
! failures there will be nothing to pay.
There are many other arguments
that might be advanced, but the fore
going which have been stated in con
. else form will suffice, We believe to
convince the reasonable and unpre-
: JUDGED mind. And in conclusion, I
believe that such a law will secure
your deposits for when a bank closes
: It's door, every cent will be paid back
= to you thru a guarantee fund main
5 tanned by the banks coming under the
5 law. 1t will stabilize business, fol
( deposltors often become insolvent anC
: business hampered if not wrecked. Il
will prevent runs on banks" and al
least keeping the withdrawals down
to the minin9um for depositors dcn't
/ become alarmed through rumors Oil
{ insolvency, they being insured agains-
l loss. And it viii increase bank de
S posits, bringing money out of socks
a safety deposit boxes, ''tin cans" etc.
, thereby increasing the circulation o.
: money May we net have its bene
e fits in Montana.
Facts and figures taken from tn,
q State Examiners Office from Octobe
: is, 1920, to June 80, 1924; ITO Stat.
e banks actually failed with deposit
e amounting to $17327 283.OO; on,
e state bank failed since June so, 1872
t with deposits of $204,879.32.
{ We are unoficially advised that i
! same period of time Al Nationa
q Banks failed, 80 of which had demos
Y its amounting to S12,606.376.O0 &
a not reporting); 5 National Bank
: have failed since June 80, 1924. Thi
y makes a loss to the public of tn
{ State of Montana for the last fou
z years of $30,139, $500.