Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-06-26
SCORES GUARANTY
DEPOSITS SCHEME
A. B. A. Official Raps Law
Passed by States-0iVi-
dendS Voted.
BY EDWARD G.. STONE.

WUoG springs inttdN df thc rapid d'
cline of the movement throughout tn
United states. as brought out Ivy :.
survey made by his organization.
'So-called state guaranty Of deposi,
laws have been tried out ana fount
wanting" MIR. Simmons said Til
plan was wrongly christcned ut the
start 1t IS not a guaranty. but az,
insurance plan without the elemen,
of sclective risk. entirely dependents
upon the SuffiCieuCl Of the premium
paid. Experience has shown thu
premiums are not sufficient and thu
insured are unable to afford hiShe:
premiums. The plan seemed So easy
50 simple. 50 promising. that it rt
minds one of the allurement of the
mirage.
Guaranty Plan Is Passing
The consensus from all sections
shown by u survey Of the State bank
division of the American Bankers
Association is that the State guaranty
Of deposits is passing into eclipse So
far as the extension of the idea is
concerned. Notwithstanding thai
guaranty laws were recommended
last year by governors Of two States
and introduced in several others, all
Ntit utlCdtCd III Sttitl III, tIit lcliVl-
ency appears distinctly toward the
repeal of this legislation.
During the past 20 years eight
States enacted guarantee laws. begin
ming with Oklahoma in 1907 and fol
lowed by Kansas in 1909. Texas in
1910, Nebraska in 1911. Mississippi in
1914, South Dakota in 1915 and North
Dakota and Washington in 1911.
oklahoma rescinded her law three
years ago, leaving large unpaid
deficit. Last year South Dakota re
pealed its law and referred the re
peat to the people for ratification at
the next general election. Texas has
modified her law, on account of State
banks changing into national banks
to escape the burden. SO that they
may choose between the guaranty
system or IL bond security plan.
Best Banking Safeguards
THE fundamental weakness of the
guaranty of deposits plan is that il
is an attempt to create integrity
and financial ability by Legislative
fiat. 1t tends to penalize prudent
banking and To encourage reckless
practices by reducing in the public
mind all bankers, honest and dis
one common level.
Bank failures are public Calami-
ties. and all agree banks must be
made safe by some feasible means
based on sound principles. Ranking
experience has taught that the best
safeguards are: Banking intelligence
plus unyielding integrity. supple
mented by careful supervision, Super
vision that prevents failures is far
more valuable to both depositors and
stockholders than any plan of guarau-
tee of liquidation after failure.
Local Dividends Declared
AT a meeting of the directors o.
the Washington Market Co., held
Yesterday afternoon. the regular quar-
terly dividend of Sl.50 per share was
declared. This action is in conform
ity with the per cent rate which
has prevailed on this stock for some
time.
At a meeting of the board Of di
rectors of the Federal Storage Co..
presided over by the president. E. n.
Morris, the regular quarterly divl
dend of per cent on the company's
preferred stock was declared. This
dividend is payable on July Is to
stockholders of record of June 80.
Bank Clearines Increase.
In contrast to the tendency last
week. when Il small decrease was
shown, bank clearinSs in the United
States this week considerably exceed
those of u year ago. Thus. leading
cities report an aggregate OF $S,SS2,
$4,000 to Dun's Review, which is o.
per cent above the figures for the cor
period of 1925. Last week
there was a reduction of IL per cent.
The current weeks statistics show
clearings of s.. 439 900 900 at New York
city. a gain of 70 per cent. and the
total at the outside centers is S3,443.
144 900. an increase of 5.3 per cent.
expansion in the ClearinSs
is noted at Philadelphia, Detroit, ST.
Louis, Kansas City. Louisville, Dallas.
San Francisco. Los Angeles and
Seattle. For June to date. average
daily bank clearings are IL per cent
above the average for similar period
of 1925.
Fewer Failures i'm South.
The number of failures in the
United States this Week-400-iS the
same as that reported last week. and
is only slightly above the 800 defaults
of a year ago. The increase over
the number for the corresponding
week of 1925 is due 10 larger totals
in the East, the West and on the
Pacific Coast the South showing
moderate decrease. OF the current
weeks failures 235 had Utilities of
more than s. 900 in each case. against
215 similar defaults last week and 220
a year ago.
f.,i1 -cT1i in
this week. a total of IS. This com
pares with A. last week and 50
year ago.
Better Business Trustees.
The business affiliations of the 81
trustees elected by the Better Bust
ness Bureau at yesterdays annual
meeting are shown to be:
T.. G.. Addison. jr.. secretary. Saw
ipgs and Commercial Bank; Edward
c. Baltz. Perpetual Building Associa-
ton: Isaac Behrend. Philipsborn &
Co.: Thomas w. Brahany. T. W.
Kann Sons Co.: Joshua Evans. jr..
Kann's Sons Co; Joshua Evans. Jr..
District National Bank: A. G. Father.
J. l.. Edwards e Co.; William G.. Gal
liner, 1910 Vermont avenue; NJ. G..
Gibbs. Peoples Drug Stores; NJ. Gold
enberg, NJ. Goldenberg' /. l.. Gold
helm, Goldheim's: Harry W. Hahn,
William Hahn & Co.; II. G.. Hoskin-
son. Riggs National Bank; j. Fl.
Johnson. jr.. Barber & Ross; Bernard
NJ. Kaufman, Hub Furniture Co.:
Sylvan King, Kings Palace; Stanley
Lansburgh & Bro; NJ.
A. Leese, Leese optical Co.; John ID.
Leonard. Washington Savings Bank;
II. H. Levi. the Hecht Co. Louis
Levay, F'razee- Potomac: f. II. Lowe.
Palais Royal; f. B. II. Lyon. Lyon
& Lyon: I. Meyer. the Louvre; Howard
Moran. American Security and Trust:
George E. Ostermayer. Woodward &
Lothrop: Herbert j. Rich. Is. Rich's
Sons: L. +. Rubel. Underwood & I'm.
lerwood; ri. l.. Rust. II. l.. Rust Co;
tJo-l~nr+ c, 7 ,,chc