d state legislation. Canada requires the reports but not
the inspection by public officials, on the ground that the latter
cannot be thorough and efficient, and is, therefore, likely to mislead
the public and cause it to be less vigilant than it otherwise would be
in the use of other means of safeguarding its interests.

Legislation in this country has also concerned itself with the duties
of bank directors and the enforcement of their performance, and with
the relations of bank officers to their banks, particularly those
involved in borrowing for their own uses or for firms or corporations
in which they are interested.

A recent legislative experiment along quite a new line has been
undertaken in this country in the form of laws providing for the
mutual insurance of depositors. Oklahoma started this experiment, and
her example has been followed by other states. The essence of the
experiment consists in the provision of a fund out of which is paid to
the depositors of failed banks that portion of their claims which
cannot be met from the liquidation of the assets of the defunct banks,
such fund to be contributed by the other banks belonging to the
system.

The protection of depositors against loss is a commendable aim of
legislation, but this method of attaining this aim is open to the
serious objection that it removes from depositors all concern
regarding the proper management of the bank with which they do
business, and thus gives the unscrupulous, dishonest, and plunging
banker an advantage. Attraction of depositors is the chief field in
which competition between banks is carried on, and when the power of
good management in this direction is removed, high rates on deposits,
high lines of credit, low or no rates of exchange, extravagance in
equipment, etc., remain the only attractions, and in the offer of
these the unscrupulous and plunging banker will always outdo the
conservative.

It is impossible to overcome this objection by public supervision, and
more frequent and rigid examinations. No public officer can equip
himself to pass judgment on the relations of a bank with each
customer, or to detect secret contracts and unwritten understandings,
or to keep unscrupulous people out of the banking business. There can
be no doubt that a reputation for conservatism, good judgment, strict
integrity, and careful management is, at the present time, the most
valuable asset a banker can have, because customers know that