The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-27
BANK TALK OPENS
Lively Debate in House on De-
pOsitOry Bill.
Committee Measure Is Taken
Up on Floor.
EN- ENRIGHTFORMEASURE
Recent Convert tOGuranty De-
posit Scheme.
Question About What Senate
Will Do Agitates Members.

The house this morning, in COM
| mittee of the whole. took up the sub
stitutes for house bills Nos. 13 and
123, reported by the committee on
banks and banking. and proceeded
with the consideration. first of No. 1 g.,
providing for the security of deposi-
tors in the incorporated banks of Kan
sas, creating a "bank depositors' in
demnity fund.- and providing regula-
tions therefor.
These bills had been printed and
were distributed Immediately after the
opening of the morning session, when
they were advanced to second read
ing under suspension of the rules and
referred TO committee of the whole,
Archer of Brown, being called to the
chair
This bill reported by the committee
appointed by Speaker Simmons to boil
down the six guaranty deposit bills
INTO one, conforms in general respects
with the bill introduced by Morgan of
Reno in the house and by Quincy of
Saline county in the senate. 1t pro-
vides that the fund shall be known as
the bank deposit indemnity fund In
IT the committee attempts to divorce
the state from its insurance of bank
deposits. The state will be known
only as the custodian of the fund 1t
will not be lawful for a bank to adver-
tise that its funds are guaranteed by
the state. Its deposits will simply be
guaranteed by a fund of which the
state will be the custodian. No bank
ers will be mixed up in the handling
OF the fund. The bill makes 1t volun-
tary with bank as to whether or not
it will participate and after it has once
come under the law it will be possible
n 70 =,
The bill provides for an assessment
of one-f1fth of one per cent on the
average daily deposits for the first as
sesSment Further assessments will
be made until the fund reaches one
million dollars, when the assessment
will cease. With all the banks partici-
pating it is expected that the first as
sessment would raise fund Of
100000.
The fund created in this manner
will be in charge of the state bank
commissioner and he may invest it as
he sees fit He may invest it in bonds
or deposit it in state repositories. The
interest will return to the fund itself
In all other respects the bill is
similar to the Morgan-Quincy bill
Bird, of Shawnee, moved to amend
the first line of section 1 to make the
bill cover "any bank authorized by the
banking department doing business in
the state" instead Of every incorpor-
ated bank doing business in the state"
but the motion was lost, q to 38.
Stone, Of Shawnee, moved to amend
section so as to provide that "any
bank not having been in business the
full preceding year shall be assessed on
the amount of deposits not secured by
collateral or bonds or deposits bearing
interest of more than 8 per cent per
annum, shown at the time of it's last
called published statement for the pre-
,a,,f
changed the original bill by inserting
the words "of more than per cent per
annum" after the word interest
The discussion on this proposed
change was an extended one, in the
course of which Enright of Wyandotte,
who claims to be a recent convert to
the guaranty bank deposit proposition,
said he anticipated that whatever the
house may do, there will be no guaranty
law passed this session. so that the
only thing this house need to do is
what the members think is right. He
expressed his belief that the measure
would be defeated in the senate, which
is welded to the insurance bill. Mr..
Enright made the statement that after
talking with 20 bankers in Kansas City
he was assured that so per cent of the
deposits in the banks of that city were
Withdrawn during the recent panic, the
money going-no one knows where.
This in answer to the assertion that all
wholesale for boarding in stockings,
and similar safety depos-
it vaults was 'tommyrot.'
1.-The time has come and now is
when the public has some interest
in these deposits declared Mr.. En-
right.
Stubbs took the position that
whenever you begin ito insure the
banks of Kansas it would make it
appear as If the banks needed to be
secured. And if you insure only a
part of the banks. won't it drive a
1.-The whole thing is wrong; the
whole thing is communistic," said
Bergman OF Clark.
Another amendment proposed but
withdrawn was to assess
the bank participating in the bank
deposftors' indemnity fund on it's
time deposits bearing interest at not
exceeding 8 per cent per annum and
payable at the option of the banker
not exceeding six months after the
deposit bearing interest as aforesaid.
Stone of Shawnee said the house
did not want to injure the bankers in
the least. but it is not passing a law
for the benefit of the bankers He
does not regard it as a vicious prac-
tice for commercial bank to pay
low rate of interest on time deposits,
say not to exceed or 3 per cent as
it encourages the people to save and
does not hurt the other banks where
the deposits vary from high to low
daily. and where there may be over
drafts. A steady average deposit is
what they want and on these it is not
wildcatting to pay a low rate of in
terest. a practice followed by MANY
banks of the state.
The noon hour having been reach
ed, the committee rose. reported pro-
gress and asked leave to sit again, af-
ter which a recess was taken until
o'clock.
The feature of the bill which seems
to meet with the most criticism, and