The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1897-06-15
At THE STATE HOUSE.
State Bank Commissioner Brei-
denthal Replies
To Criticisms of the New Bank
ing Law of Kansas.
News of the State Departments-Per-
sonals and Notes.

Some newspapers have been CRITICS.
ing Bank Commissioner Breidenthal
and the new banking law which he pre-
pared and was instrumental in hav-
ing passed at the last session of the
legislature. One of the statements
made with reference to the law is that
it's provisions requiring that suits
against stockholders, in recovery, shall
be commenced only by the receiver,
does not protect the depositors, but
protects the stockholders.
When shown that statement today,
Mr.. BreidenthaI said:
This statement is so pernicious and
calculated to injure the banks of the
state by creating the impression that
our new banking law does not afford
protection to the depOsitors, that 1 will
not let it pass unnOticed.
1t mas also been claimed that the
law of 1891 was a sufficient and all
wise banking law and that it was pass
ed after due elaboration on the part of
the legislature. As related to me by
the author of the bill, w. NJ. Rice of
Ft. Scott, it was hurriedly prepared
and rushed through without considera-
ton.
Under the provisions of the law of
1891 the bank commissioner could not
close a bank until its capital was all
lost; in other words the commissioner
had power to lock the stable after the
horse was stolen.
linen there is another statement to
which 1 wish to call attention. said
Mr.. Breidenthal, land that is that the
law of 1891 did not suit the bank COM
missioner. That is absolutely true. It
did not suit anyone else, either, except
some anarchistic fellows who desired
to handle other peoples money with
out any restrictions whatever. Our
new law has the approval and indorse-
ment of every intelligent banker, not
only in Kansas, but in every other state
that has had an opportunity to become
familiar with its provisions. Missouri,
Wisconsin, Minnesota, Oklahoma and
Texas have adopted many of its pro-
visions entire.
Under the provisions of our general
corporation law any creditor could
commence an action against any or all
of the stockholders of a bank or insOl-
vent corporation after the expiration of
a year from the time of failure. Sec
ton So of our new law provides: If,
after the expiration of one year from
the closing OF an incorporated bank it
shall appear to the receiver thereof
that the assets of such bank are in
sufficient to pay its liabilities, it shall
be the duty of such receiver to immedi-
ately institute proper proceedings in
the name of the bank for the collection
of the liability Of the stockholders of
such bank; all sums so collected to be-
come a. part of the assets of the bank
and to be distributed pro rata to the
creditors thereof in the same manner
as other funds. No action by any cred
itOr against any stOckhOlder of such
bank for the recovery of such liability
shall be maintained unless it shall ap-
pear to the satisfaction of the court
that the receiver has failed to COM
mence action as herein provided
This is very plain English" remark
ed Mr.. Prudential. and even a com
mon cIOd-hopper ought to be able to
understand the provisions of the law.
The effect of the old law with reference
to banks was that a large creditor who
has a claim sufficient to justify him in
mourning expense of litigation would
look upon the responsible stockholders
of the closed bank and be prepared to
commence an action Immediately upon
the close of the year. The effect of
this was that the large creditors only
secured the benefit of the double LA
bility of stockholders. Our new law
provides that the receiver shall com
mence action against all stockholders
for the benefit Of all creditors. The
business and equity of this proposition
is so clear that it needs no explanation
or discussion before a fair minded PEG