The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1925-01-30

Law, winch is now Alt4 CfLuNCu III e4lC
House, with the view OF giving the
Honorable Members of the 18Th AS
sembly OF Montana an opportunity
TO debate the subject and eventually
to vote upon it at this Session, IS
similar to the bin introduced IN our
State Senate du ing the last session
0f cur Legislature by Senator c. w.
Demel, Cf Billings, who has made
considerable study Of the aIbjecJ.
The Bankers Association of the
State through its extensive lobby de-
feated the measure in the Senate by
a narrow margin of ten votes, and III
the house by about five votes. l be-
ieve that this assembly after full
knowledge and discussion Of the
measure, viii enact this measure into
law, the same to become effective at
ter July /, 1926.
The bank guarantee law is not an
innovation in our country. 5{any Of
the state of the union have SUcn or
simjloT laws on their statue books
which have been successfully Oper-
ated Why cannot Montana do what
Kansas, Texas, Nebraska, Oklahoma,
South Dakota and other states have
done in the protection of the individ-
uals' deposits? Not one dollar in
these states have been lost to The in
nocent depOsitor,
The measure provides fer the ere
alton Of a Guarantee Fund, by making
semi-annual assessments of One-hfth
of one per cent on the average guar
anteed deposits of the banks coming
under the law, deducting the capital
paid up and the surplus. Out of the
fund so created, together with the
assets of the insOlvent banks, will be
paid the depositors. This fund and
operation eff the law will be under
the supervision of the Superintendent
of Banks of the State Banking De-
partment. When the guarantee fund
reaches two per cent of the average
guaranteed deposits of the banks,
then such assessments may cease.
The central idea is to create a fund,
maintained by the bankers, together
with the assets of the defunct bank,
that is ample and sufficient to pay
you, Mr.. Deposition, every cent that
you have placed in the bank.
William Jennings Bryan said-"A
bank asks a deposition to deposit his
money on the theory that the deposi-
tor is sure of the return of his money,
and he says that the laws ought to
make the facts conform to the the
ory." The big banks should not put
their own selfish interests above the
welfare Of the depOsitors and the
safety of the community. Suffice it
to say, that if Montana had been fore
sighted enough to have had a Bank
Guarantee Law on the statute books
years ago, much suffering, losses anC
poverty might have been eliminated
May we not look ahead and secure
this much needed piece Of legislature
The banker today is required under
our banking laws to secure through
bonding companies, the county, stat,
and city deposits, for money deposit
ed by such municipalities The gov
eminent requires approved aecUrltie
for money deposited in United Stale
repositories. liz there be any BAN
that cannot give these securities I'm
der now existing laws, The money
are forthwith withdrawn. Any los
that might be sustained by a city
county, state or government woul
be negligible as compared to an indi
vidual's loss. Sometimes it is al
that the individual has and the los
would mean utter ruin, destruction
and bankruptcy No so with the city
state or government. Are the indi
viduaPs deposits less important? w
leave it for you to answer.
A bank guarantee law put upo
our statute hooks will increase de
posits of cur banks and the negigibl
cost to the banker in maintaining tn
fund win be more than offset, by tn
increase i'm business. 1T is said thu
in the state of Oklahoma the guarar
teed banks doubled their deposits.
viii bring money out of hiding frol
the deposit boxes, and prevent none
being sent to other states where sue
guarantee laws prevail and to Eunt
pean countries that have municip,
and government backing. TT is est
mated that possibly one-f0urth of oil
money is cut of circulation Il wi
m short, restore confidence in banl
which is much needed i'm these tryin
times and financial stress.
Our state leads all other states
the Federal Reserve System i'm II
northwest section In the purchase
government treasury certificates. 3
of which money went to Washingto
The people bought these certihcat,
because they felt secure in their d
posits. A great deal Of money h;
been put into postal savings also.
considerable amount of this none
might have gone into our banks if ii
depositor had the assurance of /
safety and its return when desired
Runs" on banks are due to a fec
ing of insecurity. started many tim
by idle l1mor and many times u
founded, with the result oft times
the closing and liquidation of &
bank. Under q guarantee law t
banker can go to bed and feel seer
from runs" for the reason that t
depositor knows that If the baI
closes its doors he win be paid L
cents on the dollar for all money
the bank I'm other words, there w
be fewer runs on the banks. due
the security that the depositor fee
Thus it is of advantage to the ban