The Guaranty of Bank Deposits (Classic Reprint)

Excerpt from The Guaranty of Bank Deposits

The guaranty of bank deposits is a part of the larger ques tion of the guaranty of bank credit. Bank credit is an ele mental thing consisting of purchasing power which a bank manufactures. This credit manifests itself in two forms, namely, bank notes and bank deposits. The first chapter of this essay deals with the nature of bank credit. In this chapter no attempt is made at an exhaustive discussion the attempt being made simply to show the general na ture of this phenomenon and its significance in the modern world. The second chapter deals with the guaranty of bank credit. In this chapter the characteristics of the two forms of bank credit are set forth and a description is given of the safeguards that have been thrown around each. With this broad view of the nature of bank credit and the relationship existing between bank notes and bank de posits, the way is cleared for a better understanding of the strength and the weakness of the foundation upon which bank - deposit guaranty rests.

In succeeding chapters a statement is given of the frame work and the operation of the guaranty laws in the various states. The narrative endeavors to present what has oc curred ih each state. But attention is especially called to the fact that as each state is considered no attempt is made to weigh, in the light of the experience of that state, the much-mooted questions of bank guaranty. The discussion of these questions is deferred to chapter vm, where the testimony, gathered from all the states, is brought together and collated for the purpose of showing what light is thrown on these issues.

Finally, the reader is warned that this subject is still surcharged with controversial heat. It yet gets vitriolic attack or sublimated adulation. Time having not yet furnished a perspective, no one can be certain that he is free from that bias which is so fatal to scientific work.

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