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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Nov. 12, 1909)
jnHfmfrffp! ''WXftf? ?WIKW5',-f' 1 I 2 The Commoner; r ' 3? ! ittrri ft' a P J it EDUCATIONAL SERIES - i Guaranteed Bank Deposits in Oklahoma ""'' , St. Louis, Mo., October 18, 1909. Editor The Commoner: There is aa impression abroad that the recent Oklahoma bank failure demon strated tho -weakness of the guaranteed bank deposits law. My conviction is tho reverse. Can't you give us a series of articles showing its beneficial effect? R. B. HAUGHTON. Govornor Haskell's letter on this very subject to tho editor of tho Wall Street Journal will answer Mr. Haugh ton's question: Guthrie, Okla., October 11, 1909. Editor Wall Street Journal, New York City, N. Y. Sir: In your issue of October 1, referring to . tho closing of tho Columbia Bank and Trust Company of Oklahoma City by our state board, I extract the following: ''The bank is confronted with the necessity of paying its depositors in full, irrespective of the indebtedness of the depositors to the bank, and to do so it is necessary to call upon the other banks of Oklahoma, who do not show that alacrity in paying up that Governor Has kell would doubtless like." Tho above statement is false. Depositors are paid only the balance of their account after deducting their Indebtedness to the bank, which Is the same as a solvent operating bank would do. The state bankers pay assessments prompt ly on sight draft. Again you say: "It has been said in these columns before that the guaranty of1 bank deposits is either a premium on bad banking or a humbug. In Oklahoma it is a premium on bad banking. The suspended institution actually had on deposit one-sixth of the guaranty fund," etc. Oklahoma has over Bix hundred state banks. Our .'present banking law was passe" d tw .yejars ago next December, during which time we had a small bank failure in May, 1908. The credi tors were all paid within forty-eight hours. The draft on tho guaranty fund was replaced within five weeks, and within seven weeks the stock holders had fifty-five cents on the dollar on their stock, and thus that incident was closed. The closing of the Columbia' Bank and Trust Company took place on September 29 this year. Immediate payment was, began, and every claim presented and sworn to was paid in the order in which it has been presented during the ten banking days that have ensued, and the Co lumbia Bank and Trust Company, under charge of the Btate banking board and commissioner, has been open regular banking hours or longer every, day, and will so continue to the end. -That gives you two bank failures in twenty-two . months. Now kindly advise me on what theory you claim that the Oklahoma' banking law is a hum bug, and promotes bad banking? Have you got any record anywhere else where out of over six hundred banks you have less than one fail ure per year? If you are analyzing banking for the purpose of finding reckless bankers or hum- bugs, I beg that you will begin by explaining the Walsh failure in Chicago and the Bigelow failure and dozens of others within the shadow of your own printing office, where a bank fail ure means a riot on the street, a locking up of patrons' funds, a depression of business, and wide-spread disaster throughout the entire sphere of influence of your failed institution, ,' The examples to which I might refer under your present national banking .Jaw (which Aa a relld of barbarism, grown stale with age, and proven inefficient by a hundred examples), is certainly not a model that you would recom mend to tho state of Qklanoma or any other state or nation. Your reference to a portion of the guaranty fund being on deposit In this bank was either purposely or ignorantly unfair, and ignorance of the facts does not excuse an editor who takes the freedom of discussing a question of fact. You should have told your readers the truth, that what guaranty fund there was on deposit in this bank, In compliance with our law, had its legal protection which enabled us to con vert it into cash in six hours. 'Again you say: "A bank which needs a guaranty has no title to bo in business at all." This is unworthy of space fpr answer further than tp ask your readers to reflect on the mis erable failures that have occurred under the national law you have attempted to sustain. Again you state: "A dishonest director, exercising the neces sary power on the finance committee, could discount his worthless note of hand, maturing a year ahead, with his bank, credit his deposit, account with tho amount, suspend the bank and receive in full tho amount of his fictitious de posit from tho other banks," Now, Mr, Editor, under separate cover I am, sending you a copy of the Oklahoma bank law. No such condition could bo accomplished under, our law. You have simply been reading the national banking law and have gotten our state law mixed in your mind by comparison. Of course, men can rob a guaranteed bank just as they can rob any other clasB of property, but under the Oklahoma law they have to do it on very short notice to even get started away with tho goods. Your general statement that the Oklahoma law encourages weak banking, I would ask you to advise yourself. There are a class of people, among whom there may be some editors, who form the habit of speaking first and thinking1 afterwards. This is a bad practice. You should quit it. You will discredit your newspaper. There haB never been a quarterly report since the Oklahoma law was passed that does not show conclusively that the state banks of Okla homa are stronger than any other class of banks in the state. I do not mean to say that the other class of banks are not sufficiently strong, but I do mean to say that the Oklahoma state banks are exceptionally strong. ..In your issue of October 7, you have the following: '-" nfrnfrnfnir, ksw m.q v UV WA. WV WU1VVU UtUdWO VVUA j tlt tine: at GUthrle. in feirard ttf nftVihi tifcnbsitork of the failed Columbia bank, may in the end acquire a very wholesome respect for the fed eral court. Disobeying an order of the United States court is dangerous," r You have obviously copied this paragraph from the petition filed in the United States court and the motion for citation in the case referred to. There is no other source from which you could have acquired any such statement of fact. In the first place ;the attorneys who 'brought the suit are the same, attorneys who have the case pending in the United States supremo court, appealed from our state court to destroy the state banking law. They secured a client, non resident of our state, with a twenty-five. thou sand dollar certificate of deposit on the Cb lumbla Bank and Trust Company. Protest against the payment of this certificate had been filed with me. We asked the holder to verify the genuineness of his claim under oath. His counsel did not see fit to do this, but proceeded to Guthrie and instituted their case not for the purpose of getting their money, but for the purpose of discrediting the law, a sentiment which imagination might attribute to you, but which we hope in your case does not exist. Learning that this action was contemplated, our attorney telegraphed the federal judge, ask ing a hearing in case any application was made to him. We feel that the governor of a state in the discharge of an official duty, particularly of this character, where great public injury might result, should have been accorded 'the courtesy of a' conference. It was not given. The court issued not such a restraining order as you Indicate, but a limited order,- solely at tempting to restrain the state authorities" from treating, different creditors, "unequally."' In , asmuch as there had been no unequal treat ment, the restraining order covering nothing that was not already being practiced by us, and again our attorney, at 9 o'clock that morn ing, was before the judge with the full, amount of the plaintiff's claim in cash to, deposit in tho hands of the clerk of the court, Bubject to tho final finding of the federal judge as to the merits of tho plaintiff's claim. I do not expect tp induce you to concede that the authorities of ,the state of Oklahoma have any rights whatever. We have come to know that you and the element in which you circu late can not accomplish your ordinary .purpose in life through the instrumentality of govern- ; VOLUME 9, NU"MBEH 44 mental machinery sOlected by the people, and therefore, your readiness to condemn us but t beg to assur5 you of one thing: I am proud of my record as' a public official for nearly throe years in Oklahoma. The people of Oklahoma aTe satisfied and the fact that the Wall Street Journal persistently condemns me is a sou mi of great satisfaction to me. There i but one thing ..to. add;, theorize all you will about the virtue of the national bank ing law; criticise all you like about the noliev of the Oklahoma banking law, but the fact re mains that in Oklahoma state banks, creditors can get. their money any day on1 demand in a failed national bank lip can't get his money anywhere in the union short of several months and in "many Instances in several years, and then usually in such small partial payments as to be the equivalent only of ordinary interest per annum on his deposits, with no hopes of ever getting the principal. Oklahoma can handle a failed bank without the slightest disorder on the street or in the bank; policemen are not required to preserve order. Local business is not suspended by the tieing up of bank funds. We need no antidote for fever throughout the ' state on such oc casions. You are not entitled to criticise the Oklahoma law' until you' can show that the law you favor produces equally commendable results. '" ! Very truly yours, C. N. HASltELL, Governor. 4 CONGRESSMAN. HARDY'S SPEECH Congressman Hardy's speech, published in a recent issUe'of Thef Commoner, will have a largo circulation It is a; very clear and forceful elucidation1 of a number of points involved in, the controversy over free raw material. The arguments which he presents are not only un answerable,1 but they illustrate the situation so plainly that no disinterested person can fail to recognize' the 'necessity for .free importation of those raw materials which lie at the foundation of our principal industries "' He very properly emphasizes the fundamental proposition that a tax on raw material ia really ai tax upon tho eonsujner of the article a&d npt upon the man ufacturer. This. is a; fact: which is always over looked, by those protectionist deniocrats who are demanding a itax on raw material The manu facturer not only cqllects all the tax that he pays to the. producer of raw material but a great deal more, for the consuiner at last reimburses him in an, overflowing measure. Free raw ma terial is in the interest of the consumer, not in the Interest. -of the manufacturer, and when the deniocrats pf Texas get this ;fact clearly before th,em they, will receive in. silence, if not with active disapprobation, the arguments of those who are trying to extend protection to a few producers. , of- raw material, such as the sheep owners and. the saw mill menp rn "PARTY SOLIDARITY .Referring to the effect ot President Taft's appeal for rarty solidarity, William Allen White writing in tho Emporia (Kan.)' Gazette, says: "There Is not in the west a,, free newspaper that has even flickered fpr a ,minute. Hundreds of papers that have been unswerving in their admiration and loyalty to the president are sad dened at his fearful mistake; but they are even more earnest in thejr. advocacy of their Ideas than, before. The insurgent congressmen and senators have not jost, a -supporter, lap people still are behind these 'men. The presi dential, rebuke has made thm more heroic in the eyes of .their, friends.'.' ,. M- v VISIONS OFBOYLAND W;iia,do!es a Uttle boy .dream about ..All through his laughing'jA years, .Are his casfles, really .safarhfn Spain . ...nq buht.by the hapd,;pffeors, Where only kings and .qpe'en command From gilded chairs the realm And golden coins twinkjfy $ow,n Tp tb.e thin wayfarer's hand 1 No, no a, little boy drearqs about The vflish .in the creek near, .by, The .trap he lays at th,q muskrat house And the rabbits hopping,,shy. A wi.Uovf, stick Is his scepter, A stuhi-bjado knife the; key , . That fits'. eaclr door of fancy- .. -. . And sets his dream folk$ reo. Jt wilSl clnaniberlain in e'rmiillonr S. D Republican. . ,. y y- ry .. U.i , .:ttA-,. ;r 'ly-tyrfv, tiiigJM.-.