The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1898-12-09

plan were followed the examiner would
not depend on the banks for his salary
but would be a state or territorial Offices
and responsible 10 the state or territory
the same as any other officer, and l dc
not think it is the place of the bankers
to pay for the privilege of being watched
If the bankers are public servants and
subject to police surveillance. think they
should have the benefit of law that
would protect them against borrower:
who do not pay for money borrowed, and
money borrowed from a bank should be
@ first lien without any exemption on the
property owned by the borrower. and sub
ject to execution and sale, first, TO pay
the bank its money, and not subject 10
mortgage Indebtedness. In other words
money borrowed from a bank should be
a first mortgage on everything owned by
the borrower. This, / think, would place
the bank in the position of a public serv-
ant.
A stringent law should be passed for
the organization and running of a bank,
so thai all parties depositing money will
be protected against loss. to the end that
no bank can fail and depositors not get
the money intrusted for safe-keeping.
This is very important, as it Will do more
10 create confidence in the banking iEsti-
tutions Of the territory than any kind of
legislation that can be passed and make
The banks the solid financial institutions
they should be.
\ great deal has been said and written
about some plan Of the state or nation
guaranteeing depositors and thus stop ali
possibility of a run on banks. But all plans
proposed have serious objections to them.
either on behalf of the banks or in not
properly protecting the depositors; but
feel that some plan should and viii De-
devised that VIII not be a burden on the
banks ard yet give absolute protection
to the depOsitors. And I think It oppor-
tune 70 present som ideas on that line
for your consideration.
In order TO create a fund in the terri
torial treasury so the territory could guar
antee depositOrs say that each bank pay
into the treasury one-fourth or one per
cent per annum, payable quarterly, on
the average deposits of such bank, TO
create A fund to be used only for the pur-
pose Of paying off depostOrs IN a failed
bank This would create a sufficient fund
for all needs and when the fund reaches
TWO hundred thousand dollars no more
calls to be made until the fund is below
that amount. And let this fund be invest
Cd in school or state bonds, so that when
a fund Of two hundred thousand dollars
was created il would be about self-sus-
and l believe with the proper safeguards
in examinations, etc, the average failures
would be very materially decreased, and II
w1Iud stop all possibility of d run on the
banks.
In case of a failure, the territory to take
the entire effects of the bank and close
up the business in behalf of the territory,
and This with a double liability on the
part of the stockholders would in mos
AL cases meet the loss; and Il one or.
more stockholders are unable 70 pay the
assessments the stockholders VINO are
good should be made to pay the assess
ments so that If necessary he full amount
Of took of any failed bank could be col
tected off Of any responsible stockholder.
] believe that if this plan were adopted
and bill carefully prepared and passed
by the next legislature ii would be
very great advantage TO the territorial
or state banks Of Oklahoma. And L think
It WOULD be well for this convention 70
consider some such plan.
believe if this or some other plan on
the same line was adopted, and an exam
ihing board of three members selected
from the most experienced bankers of the
territory, TO pass upon the bang exam
.ners report and 10 advise and direct him
III his duties, would have a tendency 10
have none but good, healthy banks, and
avoid to a great extent the possibility OF
failure and loss and thus reduce the
guarantee reserve which in a few years
would be large enough to need no more
assessments, and would be a perpetual
fund for the protection of depostors. Al
any time a bank goes into voluntary Iqui-
dation. after the reserve fund has reached
Is limit, such bank should be allowed TO
Withdraw the amount paid into the FUND
but no bank in voluntary liquidation
should be allowed to withdraw the amount
paid in before the reserve fund has reach
cd the minimum amount.
/ am fully aware that this plan has
objections. But no law can be passed
tha- has no objections TO it or weak points
IN Il.
Some plan should be adopted to protect
the banks in crisis against a run, AMI
at the same time insure the greatest Sc
curity 10 the people and business inter
ests Of the territory.
The first paper read this morning was an
interesting resume of the banking history
o. Oklahoma. starting from April, 1890,
when the territory had three national
banks with a combined capital of 500. 900:
deposits $4,000; loans and discounts. $lS5,-
eo0 In 1892 there were four nationa, banks
in the territory. wit ha capital of $225,e0;
loans and discounts. SIS, 600: deposits. $3.50.
no0 Following these prosperous times came
the panic during which many banks failed,
and deposits in the national banks fell 10
S592 coo. while the number of banks had in
creased 20 six. In 1896 deposits reached the
lowest ebb Of S4i9.0o0 which was $2l5 600
lower than in the beginning Of 1899. In 1897
the legislature placed on the statute books
a banking law creating what Is known as
a banking department. which has supervi-
sion over ali but national banks. and re
qpiring al private and state banks 70 in
corporate and make reports. Since that
time the progress made IN banking has
been marve.ous In fact. unequaled and
urapproached by that OF any state or ter
ri,ory In 1897 the deposits of the national
banks increased from $40 600 to S579. 000. on
July % lS97. the banking department re-
ceived the first statement from the state
and private banks under the new law
which showed forty-eight banks I'm The
territory, with a paid in capital of S6l3-
HO0; deposits. 81 400 ono; loans and discounts
g. 100. and a cash reserve Of 40 per cent.
On December 81 of the same year the de-
posits had increased a per cent and on
September % 1895 there were hlty-one
banks. with an increase Of 81 per cent in
deposits since July. 1897. On the same date
the six national banks had deposits al
S9ll, go: loans. $40, 600; capital and surplus
s34',e0. with a reserve Of 40 per cent. Their
are now in oklahoma siNty-one hanks with
a total capitalization OF Se25ol0. and witt
loans and discounts amounting TO sl.S35..
II,
territorial banking law has been enforced
there has been one bank failure.