The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-20
ONE OF THEIR OWN.
Bankers Planning a Company to In
sure Deposits.

Bankers of the state opposed
| 10 the bank deposit guaranty scheme
| nave devised a clever scheme to cir
| cumVent the passage of a pank deposit
guarantee law at the present session
| OF the legislature, and nave set all
| the machinery in motion to carry out
| their plan, with all indications of
| success.
| The bankers are planning to send
| representatives here this week for a
| meeting on Wednesday night with
the members of the banking COM
mittees of house and senate in the
senate chamber. At this meeting it
Is expected that the bankers will an
| nounce that they are about to or
ganize a mutual guaranty associa-
t1on, under the provisions of the
bill introduced in the senate by Sen
ator Waggener and in the house by
Representative Ham of Rocks This
! Dill allows banks to cooperate for
| the organization of mutual insurance
| organization for the protection of
bank deposits. All the banks in the
organization pay a certain rate to-
ward settling up the affairs of banks
which fail without enough assets to
pay their depositors. When a failed
bank has been settled up as far as
| possible, the orga nization Of bankers
agrees to step in and pay all the
rest due to depositors by means of an
assessment on the members.
A schedule Of assessments will be
arranged SO that a panN with small
capital and large deposits will pay a
higher rate than the bank with large
capital but not proportionately larger
deposits. The small bank is deemed to
be greater risk than the large bank.
1t is very likely that this plan pro-
posed bY the bankers will be approved
by the legislature, and the necessary
laws enacted. The bankers object to
I- -fc - I-<@ f,,,,I
for guarantying bank deposits be-
cause they think it is bad business to
tie UP a large amount Of money or
securities in the state treasurer's Of
f1ce. Besides they prefer to be their
own judge of what banks shall be in
to be able to practically bar out
wild cat bank from the benefits of
the law.
The objection to the plan proposed
by the bankers. is that it may fail of
the very purpose which was intended
by the bank deposit law intro duced by
Senator Fred Quincy, and similar laws
by other members of the legislature.
That purpose is simply to give the
public such confidence that there will
never be any need for calling on the
fund to make good losses. If the de-
positors feel sure that there is no
danger of losing their money, the risk
of bank runs is entirely gone. Whether
this object will be secured if the
bankers themselves insured their
own deposits is a matter OF dispute.
The arrangement to hold the meet
ing of the committee on banks and
banking on "Wednesday. means that
the bank deposit law will be saved un
til the last end Of the special session,
provided theosession ends ON s.-vSatur-
day The plan Of the readers of the
house and senate is to have the pri-
mary election fight out of the way by
Wednesday, and a bill of some sort en-
acted into law. If the fight on the
primary law becomes too stubborn, it
may mean that the special session will
continue over into next week.
There are some things which in
dictate now that the sessfuon will not
adjourn until the middle of next week,
or possibly the end of next week.
This would not be entirely unpleasant
to the members, because many Of
them want to stay until January 20
for the banquet of the Kansas Day
club, and by continuing the special
session they would stay on the states
pay instead of at their own expense.