The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-11-12
UP IN OTHER THINGS.
Great Advancement in Mechan-
les and LOcOm0tiOn.
Believes All Deposits Should Be
Protected by Bonds.
Believes That Kansas Banks
Are Entirely Sound.


this country neither the bankers or the
people would be losing any sleep over
the present financial situation. Our
banking laws are a hundred years be-
hind the times"
This is the opinion expressed today
by Governor E. w. Hoch. Governor
Hoch has some positive ideas about
banking which will meet with general
popular approval. He said:
''Did 1t ever occur to you the injus-
tice to which bank depositors are sub
jected? When a depositor goes to the
bank to borrow some money, can he
get it unless he puts up the very best
kind of security? No, indeed. The
banker demands good collateral for
every loan. But when the depositor
takes a thousand dollars to the bank
and wants to put it on deposit, does the
bank give him any security? Not
thing. If the depositor would say,
Please, Mr.. Banker, won't you set aside
just little of my money-my tn ous-
and dollars, not your thousand dollars
in the form of a guaranty fund so
that I may have some reasonable ex-
pectation of getting my money back ? |
To which the banker would reply, No, |
indeed I WON'T want all of your |
money to invest and speculate with, |
and won't set aside any of it,
hanSaS bdnkS All
What say in regard to the need of |
improved banking regulations is not |
especially in criticism of the banks of |
Kansas, but of the banking system of i
the country at large. 1 consider that
the banks of Kansas in the present |
crisis are absolutely sound, but any
bank can be broken by a run. If the
proper system of banking was in use,
there would be no danger of run, and
no cause for worry. Kansas banks are
in splendid condition.
Now In the case of the state of
Kansas, it is required of all state de-
positories that they place in the hands
of the state treasurer good municipal
bonds to secure the states money
which is placed in their charge. A
bank which gets $4,000 of state
money may have $4,000 of bonds UP
here. The state is perfectly safe; as
a member of the board that approved
these bonds, I can rest perfectly Sc
cure in the protection of the state. All
the banks in the state might break, |
but the state money would be safe.
When the United States government
loans money it requires security, just
as the state does. But when a private
feels confident that he will get it
back-if the banker to whom he loans
1t is honest and competent, if all his
assistants are competent and honest, l.
if all the other banks with whom he
does business are competent and
honest, and if everything else goes
we'll That's all the security the pri-
vate depositor has.
so I say that the banking methods
of this country are behind the times.
We have the biggest battleships the
world ever saw, the finest automobiles
the most wonderful electrical inven-
tions, and we even seem to be about
ready to fly through the air, but our
banking systems have not improved
in proportion. Why can't we adopt
new methods which will safeguard
safe. there will not be any uneasiness !
on the part of depositors, and when
the depositors are not uneasy, the
bankers can sleep nights. If we had
been no necessity now for limiting the
Withdrawals of money from banks. ]
Should Deposit Bonds.
"I believe that for every dollar of
deposits, the banks should be requir-
ed to deposit with the state a certain
amount of bonds, which would be held !
In the treasury to the credit of the {
banks but as security for the peoples {
money. This should be supplemented
by a system of guarantee deposits on
the plan proposed by Bank Commis-
sioner John Q. Royce. Each bank in
the state should each year deposit a {
small sum of money with the state
treasurer. This money would be at
once invested in bonds, and the bonds
held and allowed to accumulate until
a fund of $10,000.000 or therea bouts
was obtained. This fund should
thereafter be simply maintained at the !
10. 600, 900 mark, except for its own
natural increase, and should be used
In case of need, to pay off the deposit
tors of collapsed banks With such
fund at the disposal of the state
there would probably never be any
bank depositors to pay Off Deposi- {
tors would never make a run on
bank because they would always be
sure of getting their money from the
state, no matter what happened to
he bank The only thing necessary G
would be for the state to so carefully G
inspect banks that there would be no I
possibility of crookedness on the part c
IF officials. /
"a bill of that kind was defeated at r
he last session Of the legislature, be- C
,ause of business jealousy of large a
,anks against small ones. One national t
)ank owner wrote to me and said: We v
lope you will oppose this proposed law C
because If it were passed, we would
ose all our deposits and people would
tut all their money in state banks
eplied to him that he had supplied lust |
he argument I needed; that If such a
Ian would make the state banks abso- {
utely safe and draw all the deposits it
'roved conclusively that this was Just
he kind of a plan needed.
1.-The time is certainly coming, and
oming soon, when we will get better /
regulations. and will be able I
o protect the Individual depos!tors of ii
anks as well as the deposits of the c
tate and nation n