The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-10-29
Commissioner Says They Are il
Excellent Condition.
RESERVE FUND LARGE
Have Double What Is Required
by Law.
Lieutenant Governor Says No
Legal Holidays" Are Needed.

Kansas banks were never In pet
ter condition than they are today, ac-
cording to a statement which was is
sued late last evening by John @
Royce, state bank commissioner. The
reserve funds in the Kansas state
banks at the last time they reported,
two months ago, was forty per cent
of the total deposits. This is more than
double the reserve fund which is de-
manded by the law and it is doubtful
If there is anv other state in the union
where the banks, generally, have so
| large a reserve fund.
Mr.. Royce makes the suggestion to
| depositors in the banks to hesitate be-
fore rushing in withdrawing their de-
poSltS because OF the unsettled financial
conditions in the east, as despite these
conditions in the big money center OF
| the country, the Kansas banks are as
solid as rocks. The statement made ty
Mr.. Royce follows:
1.-THE financial condition of the coun-
try has reached a stage where a state
ment from this department, showing
| the condition of the seven hundred and
| forty banks, reporting to this office,
seems necessary. The last called state
| ment of the banks in Kansas was on
August % of this year, which statement
was remarkable in that it showed
| larger deposit of money and a larger
cash reserve than has been shown by
sage of the state banking law. The re-
| serve in the state banks of Kansas on
August % was forty-one per cent or
the total deposits, representing $64,096,-
Cos, being more than double that winch
the law requires these banks to have.
Th, examinations which have been
made since and the reports of the quar-
terly meetings of the board of directors
which nave been. hold during the month
of OCTOBER all show a very heavy cash
nd
even larger than at the date of the
called statement. All reports of KAN
sas banks in this department show
high class OF investments and they are
in every way in a very prosperous con-
dition.
"a great many of the Kansas State
banks are located in small towns and
ere not equipped in a manner to justify
them in carrying all of their reserve
in cash. consequently, much of it is de-
posted with the larger banks at reserve
centers.
"The recent financial disturbance on
Wall street resulted in the bankers of
New York city uniting in an agree
ment, that they would send no currency
west, under any circumstances. New
York being the principal reserve CEN
ter of the United States, her banks
contain a large portion Of the funds of
banks in other reserve centers and to
protect themselves against the agree
ment made by the New York bankers,
the bankers in such reserve cities as
Chicago ST. Louis and Kansas City
were compelled to take the same action,
so that at this time, while there is no
apparent danger of the insolvency of
any of the banks at reserve centers,
vet much of the funds of country
banks are tied up, as result of this
agreement, not to pay out or ship cur
rency.
mo person in this day or age of the
world expects any bank to carry suf-
ficient amount of ready cash to pay all
of it's depositors at a moments not1ce
But the business of the country has
been so conducted in the past that
their patrons have been able to secure
might require, when they had, as they
now have, the funds on deposit with
their reserve agents. The bank may be
perfectly solvent and in very pros
porous condition and yet be unable un-
der the present condition to secure
currency sufficient to meet the de-
mands of its depositors-
1.-The object of the agreement in New
York and in the other reserve centers
is to prevent money being taken out OF
circula ton by the withdrawal Of de-
posits and the placing of same in safe
ty deposit vaults. Arrangements have
been made by the various clearing
house associations, by which the busi-
turbed, on account of the failure to
ship currency by the issuance of clear
ing house receipts. The rules which
govern clearing house associations re-
ouire the balances each day to be paid
in cash. but since the agreement of
New York bankers makes 1t impossi-
BILE to transact business in this way,
the daily balances are settled by clear
ing house certificates, which are based
upon collateral furnished by the bank
to the clearing house officers.
arrangements have been made in
Kansas City and other reserve centers,
of q
banks is held, by which the drafts
drawn by Kansas banks against their
deposits in these reserve centers, will be
taken care of by the clearing house as
that even the failure to ship currency
will interfere in any degree with the
transaction of business.
1.-The Kansas bank, which has a good
class of investments, with plenty of
cash and sight exchange on hand to |
meet all of its obligations, is in per-
fectly solvent condition, and can only |
be injured by the depositor wishing to |
it is a physical impossibility for the
hank to furnish him cash.
'.It is therefore of the greatest i'm |
portance that depositors in banks, who
have always been satisfied with the |
condition of their bank, refrain from |
drawing upon their deposit, except to !
meet the daily demands of their busi- |
ness, and If the depositors in Kansas
hanks will look to their own interests /
to the interest of the bank of which |
they are patrons and the interest of
the state of which they are citizens, the
hanks of this state will be able to
weather the storm, which is now upon
them. without the loss of a single dol
lar either to the bank or to the deposit
tor"
Need No legal Holidays
Word was received at the bank COM
q