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Editorial
May 28, 1931
White Bluffs Spokesman
White Bluffs, Benton County, Washington
What is this article about?
An editorial criticizes bank deposit guaranty laws as illusory and harmful, quoting a banker who argues they encourage irresponsible banking, create false security, and have historically failed. It advocates for competent supervision and territorial restrictions instead.
Clipping
OCR Quality
98%
Excellent
Full Text
An Illusory Law
The bank deposit guaranty law in any form is a snare and a delusion, declares a banker in a state where it has been tried, adding: "It is a license and encouragement to irresponsible banks and banking and penalizes capital solvency and prudent banking. It creates a sense of security in the minds of the unthinking and uninformed that is false and impossible to be realized on ultimately. To compare it to legitimate insurance is without reason and absurd. It jeopardizes the solvency of all banks and the safety of all depositors for the theoretical safety of a few. Guaranty schemes always have been, are and always will be impotent, futile and disastrous. It is not new. Has been tried, failed and discarded at intervals for more than 100 years in this country. No well-informed, honest and intelligent mind can accept it in principle or practice. Competent bank supervision and restriction of banks to territory that will warrant sufficient capital investment and accounts is the only sane and honest course and will afford all the guaranty the depositing public is entitled to as compared with all other human affairs."
The bank deposit guaranty law in any form is a snare and a delusion, declares a banker in a state where it has been tried, adding: "It is a license and encouragement to irresponsible banks and banking and penalizes capital solvency and prudent banking. It creates a sense of security in the minds of the unthinking and uninformed that is false and impossible to be realized on ultimately. To compare it to legitimate insurance is without reason and absurd. It jeopardizes the solvency of all banks and the safety of all depositors for the theoretical safety of a few. Guaranty schemes always have been, are and always will be impotent, futile and disastrous. It is not new. Has been tried, failed and discarded at intervals for more than 100 years in this country. No well-informed, honest and intelligent mind can accept it in principle or practice. Competent bank supervision and restriction of banks to territory that will warrant sufficient capital investment and accounts is the only sane and honest course and will afford all the guaranty the depositing public is entitled to as compared with all other human affairs."
What sub-type of article is it?
Economic Policy
Legal Reform
What keywords are associated?
Bank Deposit Guaranty
Banking Criticism
Economic Policy
Legal Reform
False Security
Historical Failure
What entities or persons were involved?
Banker In A State With Guaranty Law
Editorial Details
Primary Topic
Criticism Of Bank Deposit Guaranty Law
Stance / Tone
Strongly Opposed
Key Figures
Banker In A State With Guaranty Law
Key Arguments
Guaranty Law Is A Snare And Delusion
Encourages Irresponsible Banks
Penalizes Prudent Banking
Creates False Sense Of Security
Not Comparable To Legitimate Insurance
Jeopardizes All Banks And Depositors
Guaranty Schemes Historically Failed For Over 100 Years
Only Competent Supervision And Restrictions Provide True Guaranty