The commoner. (Lincoln, Neb.) 1901-1923, December 25, 1908, Page 3, Image 3
mi&mmmmmwmnwwmwm55zzz. 'PlP(,?I'P'V5'W ',!"",Zri DECEMBER 25, 1908 The Commoner. 3 on Guaranteed Denn&ife Senator Owen A Timely Article by Hon. Robert L. Owen of Oklahoma The Oklahoma' bank deposit guarantee plan makes the following provisions: First: The law requires a fund equal to approximately one per cent of the averago annual deposits to be placed under the control of the state, out of which the depositors of any defunct bank can bo immediately paid. Second: It provides that any person in the banking business under a state charter shall be a person of good character, of good precedents, and of good conduct. It provides- that the money of the bank shall not be loaned to any of the active officers of the bank. It provides that not bver four percent shall be paidrfora bank de posit'of six: months. ttme;' or longer, -and not? over three per- cent for shorter periods, of time.' It provides that no excessive loans shall bo made to. any. individual or corporation. It pro vides for a substantial and safo reserve in cash. . It provides for"v frequent examinations of- tho state banks. It permits the redeposit with the bank of its own contribution to the guaranteo fund, provided such deposit is secured. ' The law is, skillfully drawn to prevent its abuse by speculation, by improvidence, or by oorrupt oflicers. The state bankers on December 7, 1908, held a convention for the purpose of considering this law and perfecting the law out of .their experience in its present' operation. . The first argument in favor of the guarantee v'jl ,:. 'plan is that .it. will have a powerful tendency to promote ana esuiuusn luu staunuy ui our national commerce by the prevention of panic. Financial panic, which is the basis of commercial paTalysis and disaster, is invariably caused by the withdrawal of deposits by frightened deposi tors for hoarding. Many causes may contribute to excite the distrust of the depositor, but if the state has available an adequate fund from which the depositor knows he will bo immediate ly paid, the effect of such knowledge is to pre vent the withdrawal of deposits for hoarding, and will prevent the more acute form of "a run on the bank." When a depositor is satisfied In mind his contentment goes far to establish the commercial confidence upon which our commer cial prosperity. must rest, and business will re- v f,'.r- '.re main stable and undisturbed when the fifteen million depositors of the United States feel se cure in their deposits. The comptroller's reports for thirty years shows that for every dollar In currency in tho banks there is $10 of deposits. In other words one dollar of currency in tho active American business lifo is turned over ten times, and be comes a basis of ten times that amount of bank credits; and the reverse is necessarily truo that if tho depositors become frightened and with draw a hundred million of currency for hoarding it would result In a corresponding shrinkage of credits approximately of ten times this amount. This.- moans commercial -paralysis, such" as wo witnessed in October, 1907. The second argument Is, that the depositors from whom tho banks make their dividends aro entitled to safety, and that since' this safety can be assured by a very small tax tho welfare of tho individual unit demands this protection Tho history of tho national banks for tho ton years past shows that only one dollar annu ally has been lost to tho depositors, out of $70,000,000 of deposits. In other words a tax of one-seven-hundredth part of one per cent would be sufficient under a system where tho bank examination was thoroughly well made. It would not only be inexpensive to1 the banks to provide this guarantee fund but would actually be profitable to them, because It would bring from hoarding probably from ono-flfth to one-third as much money as Is now in circula tion, and increase their deposits a corresponding amount, towlt, from one-fifth to one-third. This would Increase the earning power of the banks; It would make money more abundant for tho borrower; would enlarge the volume of our credits, and generally stimulate tho activities of commercial life in the United States. It would give peace of mind to the banker and savo him from unexpected and undeserved disaster, where perhaps a current rumor might cause "a run" and paralyze his institution. Before the war tho state bank of Indiana had a guaranteo plan protecting the depositor, which worked with entire perfection. The Now KING CORN The national corn exposition recently held in Omaha was a revelation to thousands of peo ple who entertained the idea that "corn is mere ly corn." A few years ago the uses of corn were confined to feeding stock, making corn bread and mush. Now this cereal is taking its proper place among the foodstuffs of tho world, and Its many by-products are being utilized to tho fullest extent. As a result the price of corn is enhanced, and the price of corn land grows dally. The corn raising area is restricted, and the fu ture enlargement of the corn crop is dependent upon intensified farming rather than upon the utilization of added acreage. Tho corn pro ducer no longer selects his seed haphazard, puts it Into the ground after hasty preparation and depends upon chance. Agriculture Is becoming an exact science, and state agricultural schools are doing a splendid missionary work Prepar ing the way for scientific soil culture. The Oma ha corn exposition will give an added incentive to further investigation and experiment, and tno results will be beneficial in many ways. It is not hazardous to predict that the days of ten cent corn are forever gone from tho west. A DEMOCRATIC PAPER LOST The Des Moines Daily Tribune, established less than two years ago as a democratic news paper, has been forced to abandon the field. The Tribune becomes the evening edition of the Des Moines Register-Leader, and is therefore no longer a democratic newspaper. George i . Rinehart, than whom there is no more loyal or able democrat, established the Trbnuemdoc it a strong and virile exponent of democratic principles. He devoted himself to the work with all the arcor of his intense natureYaa hne0a?n the Tribune one of the strongest weapons in the democratic arsenal. But the business strug gle was too great and the Tribune -was forced to abandon the field. Mr tafe'n 52!SSS Will not bo lost to the ranks of the newspaper workers. His splendid talents will be given an outlet in another direction, and he will con tinue to be one of the strong, able and tireless defenders of the principles of democracy. 1 its fcT BLISTERS! Out of the great mass of words employed by President Roosevelt in his latest message to congress, the Omaha World-Herald selects tho following as some of the phrases and adjectives used In declaring that there is no need to in vestigate the charges respecting the purchase of the Panama canal: "Scurrilous and libelous." "False in every essential particular." "From Individuals known to be of bad char- acter." "The wickedness of the slanderers." "For campaign purposes." "Concocted with a view of possible black mail." "Need no investigation whatever. "String of infamous libels." "Lying and libelous editorials." "Real offender is Mr. Joseph Pulitzer. "He should be prosecuted for libel by tho government authorities." n "Encouragement of iniquity. "Infamy of wrong doing." "Guilty of blackmail." j "Vllllfier of the American people. "Wantonly and wickedly." "Blacken the character." "Wrongdoing of the basest and foulest INVESTIGATION NECESSARY In his latest message to congress, referring to the Panama canal affair, Mr. Roosevelt said: A member of congress has actually Introduced a resolution in reference to these charges. I, forelay all the facts before you Now the stories, as a matter of fact, need no Invtigatlon whatever. No shadow of proof York ante-bellum plan did not fail to protect the depositor, but the state banks, twin? pormlt- . ted to issue money without ndoquato control got into difficulty because of this fact. Wo have In forco now even a guaranteo plan that works to perfection In guaranteeing every bank note Is sued by ovory one of over six thousand national banks, which hns thoroughly perfected tho pe culiar deficiencies of the old Now York plan. Tho objections made to tho bank deposit guarantee plan aro the objections offered by tho big city banks, who bollove that perfect safety to tho depositors of small banks will deprive tho big bnnks of aomo deposits which tlioy now enjoy. For this reason the big bankB have been vigorously oducating the people ngarnst tho bank: guaranteo plan, using- numerous Ul-consldored arguments against it. First: Tbat it will promoto speculative banking, the offer of high rates of interest for deposits, the loaning of tho deposit so obtained to tho bank oflicers, tho establishing of banks by corrupt aud unprincipled people Those in considerate charges ure fully mot by tho Okla homa law, which does not permit a man of had charactor to run a bank; does not pormlt him to lond tho inonoy to himself; docs not pormlt him to offer over four per cent for money, and forbldH him lending the money at exceeding ten per cent, so that ho can not. jeopardize tho bank by dangerous loans. - . It really Is a conflict of intorostfl. Tio Utg banks have a quasi guaranteo ot thofr bank de posits, which they Ingeniously and properly call "the guarantee of character." It Is the purpose f of tho Oklahoma plan to put tho "guarantee of character" of a well-organized stato adminlstra- tlon behind every state bank, with a guaranteo fund sufficient to protect every depositor who, trusting In the good charactor of his stato, puts his funds with a bank chartered by that state. The state has no general liability, but only tho liability of custodian of the fund, and tho faith ful administration of tho law. Tho plan has worked excellently woll In Oklahoma, and if any defect should appear in the statute it would bo promptly corrected. ROBERT L, OWEN. has been or can bo produced in behalf of any of them. They consist only pi a string of in- ' famous libels." Let us hope that the president of tho United States Is not mistaken. But the serious charges made Involve Mr. Roosevelt's administration and ho is not tho one to say that they "need no In vestigation," Indeed, he should be the first one to demand an investigation and to Insist that it should be made by such men and under such circumstances as will preclude the suspicion that investigation, in tho event ot a verdict of acquit tal, has not been thorough. . v 5 tJ t LAUGHTER! .. Following Is an extract from a Washington dispatch to tho Denver News: "President Roosevelt's message on tho Panama scandal was read in the senate today and was received with loud laughter. Few of the senators seemed to take the message serious ly, and those who did were apparently paln6d and surprised at tho general levity. But frown as they would, their colleagues cast aside august reserve, lay back In their seats and laughed. Some of the laughs were derisive, some good natured, some boisterous. Never before had a president been so laughed at in the upper cham ber of congress, and what made the situation acutely painful for Roosevelt's close friends waa that the message itself showed that the president was deadly in earnest. Senator Bailey started the merriment at 'the very first paragraph of the message. As the secretary read the presi dent's statement that the canal charges were 'false in every particular,' the Texas solon just screamed. Other senators on both sides of the chamber joined with him and the chorus became a roar. When tho secretary read that 'unfor tunately Ill-informed people would believe tho charges even though they read them In 'a paper published by Mr. Pulitzer there were repeated peals of laughter, and this time tho merriment was somewhat at the expense of the newspaper publisher." i i il i m & mm