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Show A Country Editor Looks at Banking LOS ANGELES. While the idea of the guarantee of bank deposits by some legally enforced plan seems to appeal to many people who give it casual thought, the fact is that it has not only failed in every instance in the eight states where the experiment was tried, but actually ac-tually produced unsound banking and increased the number of failure!, fail-ure!, it was declared by the recent convention of the American Bankers Bank-ers Association held here. "Guaranty of bank deposits carries car-ries an idea that naturally appeals to people In general on casual consideration," con-sideration," the declaration said. "However, in principle it is unsound and in 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 increas-ing the number of bank failures. Taxing properly managed banks to make up losses of failed banks is not only unfair and unreasonable, but it weakens the whole banking structure. Again, guaranty of deposits de-posits places the Incompetent ana reckless banker on an equal footing foot-ing with the able and conservative banker, which encourages bad banking bank-ing at the expense of sound banking. We are therefore opposed to the pas-. pas-. sage of any law carrying a guaranty i of bank deposits and believe that it is against the Interest of the peo-, peo-, pis of the United States to develop fd uch system." |