Omaha daily bee., 1908-10-28
BREEDER OF WILDCAT BANKS
Oklahoma Plan Fails to Show Good
Results Claimed by Advocates.
GIVES OPPORTUNITY TO CROOKS
Conservative Binanciers Say They
would BE Driven Out OF Busi-
ness by Those who Abuse
Public Credit.


How is the Oklahoma experiment in guar
anteed banking coming on? And It is
undeniable there is a widely prevailing i'm
preston the scheme is a success.
The fact is the bank guaranty law has
not been in operation long enough for any
definite results. The state authorities
have made every possible effort to make
a showing in its favor. Statements have
been given out claiming the state banks
have profited in a marked degree by a
transfer of deposits from national banks;
also that there was noticeable movement
in deposits from adjoining states, attracted
to the guaranteed banks in Oklahoma;
likewise that there was an important move
ment out OF the national banking system
into the state system.
At the date of the last statement Of ma
lonsl banks for which returns are obtain
able. July Is, 1903, there were 3Os national
banks in oklahoma, with aggregate de-
posits OF $96,s2O,9 9S9
On the same date there were 499 banks
operating under state charters, and their
aggregate deposits were s21, 6,52696, show
ing that the national banks are still far
ahead OF the state institutions in volume
of business inquiry of the controller of
the currency elicits the fact that from
January l, this year, up to the 10th of this
month. fourteen national banks in Okla
homa have surrendered their charters, and
during the same time seven new national
banks have been organized In the state.
Between the statements of February Is
and July 10 the national banks lost $1,521-
S63 in deposits. and the state banks gained
$S,1s4242. These changes are accounted
for by several reasons
Public Funds Manipulated.
First, a manipulation of public funds.
The extent to which this has been done
cannot be told, as the state authorities
are extremely secrerve. That they have
done all they can cannot be doubted The
following is a copy of letter sent out by
the state treasurer to national banks hold
ing state deposits;
State of Oklahoma Treasurers Office.
Guthrie-Gentlemen: After June / next
this department will not carry deposits of
ave1led itself of the benefits of the de-
posltors guaranty fund. Yours very
truly, j.. A. MENAFEE
State Treasurer.
Second, by conversion of national banks
into the state system. For example, the
Enid National bank, with deposits of ap-
proximately 10000. changed to the state
system. thus decreasing the total deposits
In national banks and increasing those of
state banks by that amount.
Third, the Withdrawal of actual cash
from the national banks oy state authori-
ties and itszredeposlt in state banks would
affect the showing of deposits In the two
classes of institutions by more than the
actual amount of money withdrawn. The
possession Of actual cash by a bank en-
aoles 1t to make loans. which in turn create
deposits Thus, while the deposits of the
national banks in Oklahoma on July 15
were as given above. the cash holdings
were Sl2,3H949, or only about one-third the
amount; and any reduction in cash hold
inss necessitates a correspondingly greater
reduction in deposits.
No Loss in NeiEhboring States.
An extended inquiry among bankers in
the states bordering on Oklahoma, notably
Kansas and Missouri, shows that while
these bankers were apprehensive at the
Time the law was passed that they would
lose business to their Oklahoma rivals. they
/ nave recovered from their alarm having
experienced no serious results. William e.
OTIS president of the Winfield National
bank at Winfield, Kan. makes the fol-
| lowing statement:
! our town is near the northern border
OF the state of Oklahoma and many of
| the politicians OF Kansas were much ex-
ercised last winter for fear all the de-
posts OF Kansas would immediately be
transferred to the banks of Oklahoma. So
Tar as / know, our bank has not lost a
dollar In deposits to the Oklahoma banks
and on the contrary, we have several
parties in Oklahoma who are depositinp
with U.S.
! Il nave made considerable inquiry of
bankers as l have met them from time
10 time, who are located like ourselves
near the border of Oklahoma. and l have
only heard OF one deposit that has beer
take out of the state on account of tn,
guarantee law, while / have heard of q
number of deposits coming from Oklahoma
10 this bank already referred to-
i have also taken pains to inquire o.
parties from Oklahoma as to the effect o.
the law upon the deposits of banks oper
atlng under the provisions of the law anc
national banks in the same towns whiel
nave not seen tit to take any action in IN,
matter. Where conditions are normal an,
each bank has practically the same stand
ing in the community l find there has bee,
no chanSe in deposits from the insecure,
TO the secured banks. This is admitte,
by the officers OF both institutions
There are other localities where condi
tions are different. Where the state ban
has better acquaintance Is more aggres
sive and offers practically the same
Icurity in the way OF capital and surplus
the state bank has made some gain. L
other localities where the national bank
are the stronger and better managed In
reverse is the case.
Educational Campaign Needed,
The president OF one of the nations
J banks in an Oklahoma town, near IN
] northern border, told me recently that hi
bank had gained over $4,000 in deposit
since the law went into effect while IN
I only state bank in the town had game
Z about $4,000 in deposits.
My opinion is that the majority of IN
voters do not understand the question an
Y that II the republican party would inauEu
; rate a campaign OF education similar
' that Of 1896 the people would cease
7 clamor for such a law. ! was located
+ this place and was an officer of this ban
. in 1898 when Mr.. Bryan was advocating III
/, free coinage Of silver at the ratio of
: TO l. and I remember distinctly that III
a people were more insistent upon it tina
they are now upon the guarantee law an
! that II was almost impossible to keep HI
s. Kansas republicans from stampedin0 Wiz