Omaha daily bee., 1899-01-29
PROPOSED NEW BANKING BILL
Outline Of a Measure introduced in the
House by Evans,
TO CREATE RESERVE AND GUARANTY FUND
Requires All state and incorporated
hanks to Deposit five Per Cent
of Average Deposits with
state Treasurer.

introduced in the present Legislature is being
more generally discussed than II. X. 40,
the Evans bill, to create and maintain a
reserve and guaranty fund for the protection
OF depositors in banks" The bill requires
all state and incorporated banks to deposit
5 per cent of their average deposits with the
state treasurer for such purpose. If based
on the last report Of the banks, made Ds-
cemoer 1, 1898, and which showed total de-
posits in the state banks amounting TO SIS
225, 1901 such a per cent would create n
reserve fund Of $911 $50. To readers of the
bill who desire 10 Inform themselves as to
the availability of such a fund the following
ngures. showing the amount Of deposits tied
up by state bank failures for the last five
years. will be OF interest.
1894. s197. 2S3.25: 1895. 1854. 655.S 30: 1896.
s1,156. 0Ss.s1: 1897. s144.5O7,34 1898. sS5
1900
1t will be noticed that while the fund
would DE large FOR the average year. in 1896
1t would have been insufficient to cover the
deposits tied up. The full text of the new
bill is as follows:
Section I. Every bank, except national
banks, doing business in the state OF Ne
braska. shall keep on deposit with the state
treasurer at all times a sum equal to 3 per
cent Of It's average deposits, including irdi-
aec thiiS ohh liia uVDosils. blli VT
posts OF other banks, the average deposits
to be determined from the official reports
made to the state banking department for
the year 1898 and from the reports OF each
successive year thereafter
Sec. 2. 1t shall be the duty Of the state
banking department to furnish the state
treasurer within ten DAYS of the taking ef-
feet OF this act and not later than the tenth
day OF January in each year thereafter. with
a certified list Of all banks doing business
under itS authOrifv topptbar with flo oyar-
age amount Of deposits held by each during
the preceding year. On receipt OF such
list the state treasurer shall Immediately
notify each bank by letter to the cashier
thereof, informing him Of the amount of
deposits required to be made by his bank.
Sec. 3. 1t shall be the duty of each bank
to make the deDosit with the state treasurer
required by this act within thirty days after
receiving the notice from the treasurer as
provided for In section 2 Of this act. and at
such other tines as 1t may be required to do
so in order " reimburse said bund for pay
ments made on account of any failed bank.
or by reason OF increased deposits. it being
the intent Of this act to maintain at adj
times tne fun amount OF 5 Der cent Of the
deposits held by state banks as a reserve
Tor the protection Of the depositors therein.
Sec. 4. The deposits herein provided for
may be made in cash or may consist OF a
certificate OF deposit OF the depositing hank.
which certifirare shall be made payable to
the stare rrea1urer on demand and shall
draw interest at the rate OF 212 per cent per
annum. payable semi-annually. In advance.
and shall be secured by surety company
bond, running 20 the state Of Nebraska. to
be approved by the state treasurer or by
government bonds. at par for the full
amount or said deposit.
Sec. 5. The state treasurer shall place the
amount deposited by each bank to its credit
upon his books and shall publish the amount
TO the credit VI each bank in his annual
statement: sucn deposits to be known and
designated as -bank reserve deposits"
Sec. 6. The FUNDS and certificates so de-
posted shall oe carried on the books Of
the banks making the same under the head
or Deposits with the state treasurer and
shall be considered and held to be a part OF
the banks legal reserve in the same manner
as deposits IN other banks.
Sec. 7. The state treasurer shall cause
the funds SO deposited with him in accord
Gnce with this act ana all interest arising
from the deposits therein provided for.
whether Of certificates or Of cash, to be de-
posted in such Nebraska banks, other than
national banks, cs snail apply for the same,
IN sums not exceeding $40, 900 in any one
bank Counting certificates issued in accord
ance with section 4 OF this act), the bank
receiving such deposits to accept the same
for 4 period OF not less than six months
ror more than one pear, to pay interest at
the rate Of 23 per cent per annum, semi
annually. in advance, and furnish a surety
company bond, or United States bonds at
par, for the full amount OF the deposit, as
surety therefor, such bond to run to the
state Of Nebraska and to be approved by
the state treasurer. These deposits shall
be made in the order In which application
for the same shall be received by the state
treasurer; provided, that no deposits shall
be made In any bank to an amount exceed
ing 40 per cent OF It's capital. The state
treasurer shall provide a form Of certificate
to be executed by all banks in which said
funds are deposited.
Sec. 8. Should the applications for deposits
from banks be insufficient to cover the entire
amount OF said funds in his possession from
time TO time, that state treasurer shall in
vest the remainder in bonds of the United
States or in state, county or school district
bonds Of this state. on the best terms oh
tainable.
Sec. o. All interest received by the state
treasurer from deposits In banks or from in
vestments In bonds shall be set apart in a
separate fund, to be known and designated
as bankers guarantee fund interest
thereon to belong to said guarantee fund"
Said guarantee fund" shall be held and
used only for the payment Of the lawful
claims of all depositors in insolvent Ne
braska banks. other than national banks,
which have been authorized to transact a
banking business by the state banking de-
partment OF Nebraska.
Sec. 10. When a receiver Is appointed for
an insolvent bank he shall. as soon rs he
is qualified, proceed to the collection of all
claims due TO such bank and to the con-
version Of all it's assets into cash as rapidly
as possible. He shall require all depositors
to make proof Of their claims in such form
as shall be provided by the state banking
department and shall issue q certificate for
all claims approved by him., setting forth
the amount due, and at the expiration of
ninety days after taking charge OF the bank
he shall declare and pay 2 dividend OF the
funds In his possession, endorsing the
amounts paid to each depositor Upon his GER
tifcate.
Sec. II. Any depositor In such bank who
holds assets Of the bank as security for his
claim may participate In such dividend ny
surrendering the security held by him. The
receiver may, by order of the court, pay
secured claims In full, when the value of
the security is In excess Of the claim, upon
the surrender of security.
Sec. IL. The state banking department
shall notify the state treasurer when a re-
ceiver is appointed for any insolvent bank
and shall inform him OF the probable amount
that will be necessary in addition 10 the
amount that will he collected within ninety
days, to pay all claims Of depositOrs against
said bank. II he has not sufficient funds on
hand. in the guarantee rund, to pay the
same, that state treasurer shall call uD1 n
all banks holding a deposit Of said funds
for the payment OF such a percentage OF the
deposits held by them as will produce the
required amount. each bank holdina d de-
pcsit being required to pay only its pro rata
DrODortiOn OF the amount TO he raised. such