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JANUARY 3, 1908
The Commoner.
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GOVERNMENT GUARANTEE OF DEPOSITS
Charles N. Crewdson, author of Tales of the
Road, has this to say about the Bryau plan to
have the United States government guarantee
payment of deposits In national banks:
The Great Power lets the sun shine; It
lets the rain fall; It sprouts the seed planted
in the earth. Man wants to work. A few finan
ciers are now saying, man must stop work and
that the sun must shine and the rains must fall
upon many unplowed fields, that when the grain
be harvested the people shall have no money
for their crops, and that many men -who want
to work must stop work and that every business
man and nearly all bankers themselves must
Buffer.
Mr. Bryan can stand pat on imperialism,
tariff and the trusts, but the present livest
question before the American people and the
question of more importance to them than any
other question in our nation's history is: How
shall the government provide money for the
.people?
The plan Mr. Bryan suggested seems to mo
a business man a sane, definite solution of
this questioli.
Mr. Bryan's plan as I understand it is this:
First The United States government shall
guarantee that every man who puts his monoy
in a national bank can go to that bank and get
his money when he wants to.
Second That not the stockholders, but the
depositors shall, upon demand, have the return
of their money guaranteed by the government.
Third That the government shall lightly
tax the national banks to pay losses brought
about by national bank failures.
Fourth That this tax charge, which would
doubtless be less than one-tenth of one per
cent per annum of their average deposits, should
be used for two purposes: First, to pay for
thorough examination of the national banks,
so that the losses to the government and to
sound banks would be as little as possible; and
second, in case of a national bank failure to at
once pay the depositors in that bank, their
money in full.
Fifth To punish severely bank examiners
and bankers themselves, who might be dis
honest. BENEFITS
This would benefit:
First All people, because it would give
them a safeplace to put their monoy; because
it would keep" all money in circulation; because,
the people having safe banks in which to put
their money, would not lock it up or bury it in
the ground.
Second This would benefit all business
men in all kinds of business because, when they
were doing a sound business and had legitimate
assets, they could at all times borrow a reason
able amount from the banks. This plan would
give stability to business and prevent either
rapid increase or decrease in prices.
Third This plan would benefit the man
ufacturer, because the wholesale merchants,
feeling that their orders would not be cut off,
would not cut their orders at the factories.
Fourth It would be a good thing for the
wholesale merchants, like Claflin & Co., of New
York, or Marshall Field & Co., of Chicago, or
the Simmons Hardware Co., or the Hamilton
Brown Shoo Co., of St. Louis, or any wholesale
dealer in any city, because the retail merchant
could borrow reasonable amounts from their
local banks, would not be scared to death a"bout
having to pay the money back on short demand
and would not cut oft their orders.
Fifth It would benefit traveling men, who
work for manufacturers and wholesale mer
chants, because their sales would not be cut off,
but would keep right on. Tens of thousands
of traveling men, right now, are having their
1907 income cut down one-third or more, be
cause their sales are cut off. If you do not be
lieve it, ask any traveling man you meet.
Sixth This plan would be a good thing for
the retail merchant, because manufacturers and
-wholesale merchants would not be so tight on
their credits. Next, they could, with less danger,
borrow reasonable amounts from the banks;
next, their business would be bigger because
people who farm would get stable prices for
what they raise, and men who earn wages would
have jobs. It would benefit the clerks who work
in retail stores, because they would not have
their salaries cut down and not bo thrown out
of their jobs.
SeventhThis plan would bo a good thing
for real estate owners, because real estate
values would not take sudden drops, and be
cause the money they owed to banks would not
be suddenly called in.
Eighth This plan would be a good thing
for builders, for the same reason it would bo
a good thing for owners of real estate.
Ninth This plan would be a good thing
for farmers, because there would be plenty of
money, that would safely circulate, to niovo
their crops. It would also be good for tho
farmer, because tho prices of his crofts would
keep more or less even, instead of falling down
all at once because money got tight.
Tenth This plan would be a good thing
for people who work for wages, because they
could always have jobs.
Eleventh This plan would be a good thing
for bankers themselves. First, because if tho
people who had their money in tho banks knew
that the government guaranteed that they could
get it whenever they wanted It, they would not
want it, and there would be no runs on banks.
Tho banks could do a safer business. Second,
tho banks could loan a greater percentage of,
their deposits, because they would not bo scared
all the time, because they were afraid of a run.
Third, the amount of business that tho banks
would get from the greater percentage of de
posits they could loan, would, many times over,
pay the amount the government would tax them
for tho purpose of guaranteeing deposits and
for establishing a system of thorough bank ex
amination. Twelfth This plan would not bo a good
thing for stock gamblers, because if tho gov
ernment were guaranteeing depositors they
would see to it that no money was loaned on
stocks with too much water In them. But this
plan would not be a bad thing for the man
who wished to buy stocks for a legitimate in
vestment. Thirteenth This plan would not bo a good
thing for over-capitalized trusts, because they
could not borrow more than they ought to have,
and because no one bank should be allowed to
loan more than a reasonable percentage of their
capital stock, which amount they could lose and
still be sound.
Fourteenth This plan would be a good
thing for every legitimate business, for all of
these above reasons and it would prevent any
panic that might otherwise arise, because the
country would not be subjected to 'the will of a
few financiers who, under the present banking
system can cause a panic any tlmo they want it,
by refusing to give to their depositors their
money, upon demand.
STATE BANKS
Mr. Bryan's solution of the state bank prob
lem is an easy one. Tho states would have to
guarantee the depositors in state banks, just
the same as the government would guarantee
depositors in national banks, otherwise the peo
ple would put their money in national banks in
stead of state banks, and furthermore, the state
banks could share in the national guaranty by
putting themselves on equal footing with na
tional banks.
This plan would not prevent any privato
Individuals from loaning their money to any
body they wanted to, at whatever hazard they
wished to risk. Stock gamblers could get their
money from private people if the private people
would let them have it, but they could not get
the people's money, deposited in banks and
gamble with "that." Buyers of stocks, however,
could borrow money on legitimate stock Invest
ments, just tho same as a merchant could bor
row money on his merchandise or a farmer could
borrow money oh his farm.
POSTAL BANKS
Tills plan is better than our having postal
savings banks, because the people and business
men would have greater use of the volume of
money if it were in banks where private indi
viduals who owned the national banks could
loan money on legitimate enterprises.
The postal banks would have to deposit
their money in other banks and then we would
have all the dangers that we now have, and
while the postal bank plan would be some im
provement upon our present plan It would not
bo as good as tho plan of Uio government's guar
anteeing all depositors in national banks against
loss.
EMERGENCY ASSIST CURRENCY
This kind of money would moan simply
this: that tho banks could Ihkuq money upon
their assets, buy more assets with this money
and Issuo mora monoy and, on a given amount
of capital make their liabilities so groat that
when tho top-heavy top quit spinning it would
fall over and smash to ploecs.
Thero is Just as much monoy In the country
as thero was six months ago and yot all business
Is tied up and senrcely a man In America Is not
suffering a loss right now; and everybody under
our presout banking system will keep on being
in dangor of having a panic como any tlmo that
a few financiers may say bo.
I believe Mr. Bryan's plan to bo a sane,
easy, quick solution of the proHont monoy prob
lem and I believe, as a business man, that If his
plan Is put to work it will bo kopt at work and
that America will never again fool another panic,
CHARLES N. CREWDSON.
Paragraphic Punches
The Haguo conference having adjourned,
Mr. Taft is loft alono In tho pacification bus
iness. Milwaukeo Sentinel.
"Wo must walk In tho light,'' says Brother
Rockefeller. All right, but don't raise tho
price of it! Atlanta Constitution.
They are putting U2.000.000 of safety ap
pliances along the Harrlrnan roads. And at tho
moment a few on Harrlrnan. New York World.
Mr. Roosevelt Is going strong on honesty
these days, but he continues to dodge the ques
tion about that campaign fund. Florida Times-Union.
Perhaps It Is true that all of John D. Rock
efeller's Jokes are old. Like his monoy, they
are merely appropriated. Louisville Courier-Journal.
If the price of paper continues In Its pres
ent direction, it won't be long before even paper
railroads are worth somewhere near what they
ask for 'em. Ohio State Journal.
.
It was all right for Mr. Roosevelt to turn
on the light. The trouble was that in doing
so he fell against the burglar alarm and woke
up tho baby. Richmond Times-Dispatch.
' t
A man in Wisconsin was shot in mistake
by a neighbor who took him for a rabbit. Evi
dently, nature study Is too much neglected in
the schools of that state. Baltimore American.
-
Tho tariff on lumber gives the treasury
little revenue, but it puts a tax on every man
who builds a home, and authorizes lumber men
to pocket it themselves. Los Angeles Express.
The plaint of foreign markets Is that Amor-,
lean merchants do not pack goods rightly. They
ought to sec how some of our distinguished citi
zens pack whole conventions and ship then
through. Detroit News.
The man who will stand In line all night
to draw his money out of a solvent bank may
show determination and endurance, but thoy
aro so unprofitably directed as to be worse
than wasted. New York Tribune.
If somebody tapped Stuyvesant Fluh's tele
phone, as alleged, high finance has more in com
mon with porch-climbing than had been be
lieved. Philadelphia Public Ledger.
Mark Twain confesses that he lost ?17,000
by being "let in on the ground floor of a good
thing" by kind friends. He ought not to com
plain. How many literary men would havo
?20,000 to lose. Chicago Record-Herald.
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