Evening star., 1933-06-02

Progressive support for the policy of
insuring bank deposits can be observed
In the discussion which this plan has
aroused. State experiments are found
to have been inadequate by some, but
It is suggested that national Insurance
may tend to umihcation of banking in
terests and an improved system. Many
advise better supervision OF all banks
and good management as the best as
surance to depositors.
Distinction between Government
guaranty and insurance Is emphasized
by the Spokane Spokesman-Re Review, re-
ferring to the Presidents desire tnat
when the Government takes new Ia
bility, the money to pay for it must be
provided" The Richmond News Leader
holds that the Justification for such
risky step is the fact that virtually all
the banks that have been licensed 10
reopen since the holiday are IN good
condition, and already are insured, IN
effect, by the policy Of the Federal Re-
serve systenn." That paper feels that
an effect of the banking changes will be
to stop the shift Of deposits from small
and medium m-sized banks to the larger
institutions"
Describing it as "a cooperative effort
of the banks and the Government, tne
Louisville Courier Journal feels tnat
'the bankers should welcome the plan
as relief to them from lying awake
nights. fearing runs" The Asheville
Citizen finds sentiment that 'it is the
one thing that could certainly re-estan-
lish full confidence" while the Nash
Vile Banner records that public opin-
ion. which has been Indifferent, doubt
full or antagonistic, has experienced a
radical change since the bank deoacie.
The YOUNGSTOWN Vindicator points to
'sneeded restrictions" in banking that
are proyided, and adds that all
banks were required to belong to the
Federal Reserve System, 1t would De
better than direct guaranty. Inc
Rock Island Argus sees benent IN re-
lieying bankers "of fear OF their deposl-
tors" and removal OF the necessity lor
extreme liquidtty."
ion Of the Roanoke World-News. may
serve as the entering wedge for q really
unified banking system" and that pa
per suggests that "if properly admin
istered, only really sound banks Will
be admitted to the Insurance provision.
On the banking bill as whole the
World News comments: 1T nils many
of the holes in American banking prac-
tice even IL 1t does not promise for
this country as safe and secure sys-
tenn as is to be had In Canada or
Great Britain, neither Of which has
had a bank failure during the depres-
sion, To secure enactment Of much
needed reforms, Mr.. Glass has had to
yield his views on guaranty OF hank
deposits, for which Chairman SteagaH
Of the House committee has long con-
tended, o plan that penalties sound,
conservative banking for the protec-
ton of the wildcats who in such coun-
tries as England would not be per-
mitted in the banking business"
Nobody has yet suggested" accord
ing to the Jersey City Journal, "a more
practical or certain way Of winning the
confidence OF the average layman than
by insuring the money he intrustS to
the banks" Going back to efforts made
in the Wilson administration by Sen
ator Hitchcock, the Omaha World
Herald advises that had an insurance
fund been created at that time, largely
out Of the profits Of the Federal Re-
serve system, subsequent banking pan
les might have been averted. That
paper quotes Senator Vandenberg as
believing that under the proposed sys-
TEN "the smaller banks would be made
virtually 400 per cent sound and the
confidence CT small depositors would
effect q great release of credit" The
Lima (Ohiol News thinks 1t will
hasten economic recuperation."
Advising that at should be made
much more. difficult to start bank.
the Fort Worth Star-Telegram contends
that ''the public would generally pre-
fer a Tightening Of requirements rather
than q guaranty Of deposits" and con-
cludes Public assurance and deposit
insurance are two very different sub
jects. The former can more readily be
brought about by stiffening the bank
organization requirements than by the