The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-03-01
IS IT A SCHEME?
State Depository Law Strikes a
Snag Today.
Senate Wants to Know About
Some Changes.
SURETY BOND FEATURE
This Was Stricken Out by Con.
ference Committee.
Hint That Purpose Is to Defeat
Bill Altogether.

The senate this morning refused to
rush pell nell after the bellwether of
the administration and adopt the report
Of the conference committee on the
state depository law. The house adopt
ed the conference report by a vote of
80 to 0.
The conference committee recommend
that the provision of the bill requiring
banks holding state funds on deposit
give surety bonds for the protection of
the state. The demand that the surety
bond provision be stricken out was
made by Speaker Stubs. The house
did not even offer a whisper against
this but adopted the report this morn
ing.
The senate, however, refused to blind
ly adopt the report of the conference
committee. Senator Waggener ques-
toned the reason for the surety bond
feature being stricken from the. bill by
the conference committee.
The conference committee consider
ed this feature of the depository bill"
said Senator F. Dumont Smith THE
senate members of the conference COM
mittee favored this surety bond feature
but the house members on the commit
tee opposed it, We asked the house
members to talk it over. Before we
held a second session of the conference
committee we talked with the leaders in
the house and these leaders said that
this surety bond feature would not
pass the house and that unless it was
left out the house would not pass the
bill and we were advised that it would
be better to pass the bill without this
surety provision than TO have no de-
pOSitOry law
Senator Simons did not agree with
this sentiment. THE senate should
pass a strong depository bill and check
the measure up to the house." said Sen
atOr Simons.
Senator Noftzger moved that the con-
ference committee report be printed
and the bill and the report be made a.
special order for Thursday morning at
1920 o'clock and the matter was adopt
ed
This Juggling with the depository bill
looks queer and it has the appearance
of being a move to get the house and
senate at loggerheads over the bill and
thereby defeat the passage Of any de-
pository law.
The bill as passed by the senate pro-
vides that the banks holding state
funds on deposit should give surety
bond or deposit collateral security.
Senator Waggener has raised the
point that the law governing state
banks is that they shall not give pref
erence to any creditor by depOsiting
bonds or collateral to secure funds on
deposit, and that the law governing
national banks is that they can de-
post government bonds only to secure
loans from the government and that
without a provision allowing banks to
give either collateral or surety bond
as security that they could not hold
funds of the state on deposit, as they
could give no surety.
Speaker Stubs, it is told, stated
that he would rather defeat the bill
than to allow it to go through with
the surety bond clause as a feature
The smaller bankers favor the
surety clause. as they could buy
surety bond and thereby secure state
funds for deposit, but they could not
put up collateral security.
The senate this morning passed
Senator Quincy's bill which. if it be-
comes a law, will allow state banks to
pledge the assets of the bank as col
lateral security for deposits of the
state funds
The bill provides that:
mo bank. banker or bank officer shall
give preference to any depositor or cred
itor by pledging the assets Of the bank as
collateral security, except that municipal
bonds issued within the state Of Kansas
as security for the deposit of state money;
provided, that any bank may borrow
coed in amount 50 per cent of its paid up
capital. and may pledge assets Of the
bank not exceeding % per cent in excess
of the amount borrowed as collateral Sc
curity therefor: provided further. that
whenever it shall appear that bank is
borrowing nabitually for the purpose OF
reloaning, the bank commissioner may re-
quire such bank to pay OF such borrowed
money. Nothing herein shall prevent any
hank from discounting in good faith and
indorsing any of its negotiable notes. 1t
certificate of deposit for the purpose of
borrowing money
If this bill should pass the house and
become a law state banks would be able
to put I'D security for state funds on de-