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Show i ,i i i Deposit 'Guarantee' Fails of Purpose LOS A Nil 101. KS. Wlillo (lie Idea of the guarantee of hunk deposits by onie legally enforced pin n seems to appeal to tunny people who Rive It casual thought, the fact la that It has not only failed In every instance lu the. ellit states where the experiment experi-ment was tiled, but actually produced uusouud banking and Increased the number of failures, It was declared by the recent convention of the Ainericun Hankers Association held here. "Guaranty of bank deposits carries an Idea that naturally appeals to people peo-ple lu general on casual consideration," the declaration said. "However, in prluclple It Is unsound and lu practice it is unworkable. It has been tried in eight States and it has not only failed In every case, but It has resulted in increasing the number of bank failures. fail-ures. Taxing properly managed bunks to make up losses of failed banks is not only unfair and unreasonable, but it weakens the whole banking structure. struc-ture. Again, guaranty of deposits places the incompetent and reckless banker on an equal footing with the able and conservative banker, which encourages bad banking at the expense ex-pense of sound banking. We are therefore there-fore opposed to the passage of any law carrius a guaranty of bank deposits de-posits and believe that it Is against the Interest ot the people of the United States to develop any such system." |