The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-02-13
Deposits Three Times Sum AL
lowed in a Topeka Bank.
A Loss OF INTEREST.
State Collects on $4,000 But
$4,000 in the Bank.
Treasurer Says Tt Isn't Practi-
cal to Obey Law Strictly.


sions OF the state depository law.
state Treasurer T. 7. Kelly has on de-
posit with the Bank Of Topeka at this
time about $4,000 of the states
money, while it is authorised to
handle only $4,000, and has only
S75000 worth of securities on deposit
with the state.
Section Of the state depository
law says:
I'm no case nor at any time shall
the deposit in such depository, either
in money. drafts. warrants, orders,
checks. or certificates OF deposit, be
IN excess Of the face value Of the bonds
so deposited
It is the distinct intention OF the
law to prevent the massing Of great
sums in one bank, as Kelly did In the
case OF the First National. Section
OF the law says:
no bank shall be designated as q de-
posltory for more than 100000"
Nevertheless, Kelly has over three
times the extreme maximum contem-
plated by the law on deposit in one
bank. and over four times the amount
which that particular bank IS author
lied to receive.
The business of the state with the
Bank of Topeka is very extensive.
Prior to the month of February it has
1 had as high as $685. at one time.
and has rarely gone much below the
$4,000 mark On February L it had
/ @S5,2O5, but on February 2 this
! Jumped up to s396,371, presumably
i because of the First National dividend
1t has been above the $500. 900 mark
since that time. The bank pays 2
per cent. on SIS, 600 or less.
OF course It is believed by everybody
! that the Bank Of Topeka Is as safe a
/ place Tor the money as could be found,
put kelly.s action is none the less con-
trary to law on this account
It would seem that a man who had
Just gone through the experience of
deposiuug $500 in one bank, con
trary to law, would be more ca' eful to
obey the law in the future But Kelly
IS an exception to the rule.
MI [ealy says il is not prac cticaI to
obey the law strictly; that the state
money can not be scattered to the
various depository banks without con-
siderable trouble and expense
Mr.. Kelly was asked today to make
statement concerning the matter. He
said; Z don't care to make any state
ment for your paper"
It is understood, however, that Mr.
Kelly assigns as a reason for his action
that the $4,000 dividend from the re-
ceiVer Of the First National bank was
paid all in one check; that the check
was on the government treasury, and
had to go to Washington for collection:
III II he place the check in the Bank Of
Topeka and has not yet been notified
not distribute the money to the other
depository banks.
Of course Kelly contends that he is
not the only one who has violated the
de. ospory law thac tne governor, the
treasury board, and everybody else who
has had anything to do with the law has
violated it, more or less.
It seems very peculiar however. that
the state has to wait two weeks for its
/ dividend check to be cashed, when ev-
erybody else had his dividend checks
cashed on demand.
So for convenience sake, Mr.. Kelly
allows an excess deposit Of s245,oOo to
accumulate in one bank, while there
are A other state repositories which
offer facilities for depositing over
100000 more Of state funds before
they reach their maximum.
State Losing Interest on S245. 900
Mr.. Kelly has been notified by the Of
ficiaIs Of the Bank of Topeka that the
bank viii not pay interest on more than
$4,000; that It was awarded only S75. 600,
and doesn't care to handle more than
that sum. It stated its willingness. how
ever, to handle in excess Of that amount
provided it was not required to pay in-
terest on the excess.
It would be natural to suppose that
a state treasurer would deposit the state
funds where it would draw the best rate
of interest Any good business man
j would do this. IF the state treasury was
conducted on business instead Of a Pc
litical basis, the treasurer would see to
, it that the banks which pay the best
, rate Of interest get their full share of
, the money. The rate Of interest paid
: by the state banks varies from 2 per
cent the minimum fixed by law. to 3ik
per cent, the highest amount bid.
The bank which pays 3ls per cent is
the -Northrup National bank Of lola,
which is an authorized depository for
J S25 GOO The amount actually on deposit
there is a little over $4,000. Why doesn't {
Kelly deposit 1000 more in that bank
( and get that 31A per cent, instead Of all
! lowing the money to lie idle2
The Eldorado National pays per
e cent It is authorized to handle $25,-
600 On last Saturday 1t had only
$4,000, but Monday Kelly gave il So
/ 600 more But it still has room for
: The Citizens National of Anthony
e pays II per cent It is authorized
l. to handle $4,000. At present it has
y about 5000. Why not give it $15,-
! 600 OF the states idle money?
d The Commercial National of Inde-
S pendence pay ? 7-10 per cent. and is
u authorized to handle $25,OO0. It has
o 1884. It could take care of $4,000
more
The National Bank of America al
Salina pays 2 y per cent, and can take
t care of S25,O0O. II has only 81. 600
il It could stand an addition of about
d $4,000
? These are a few examples Of banks
+ which could. with profit to the state
S take care of some Of this $245.00t
= which IS at present earning nothing fol
the state. And at the same time, they
would enable Treasurer Kelly to obey
the law.
. Weather Indications