The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-30
THAT DEPOSIT LAW
Attorney General jackson Tells Legis-
lature What 1t Can Do.

~
the Quincy guaranty bank deposit bill, |
Senator Waggener, on Tuesday after
noon, introduced a resolution, follow
ed few minutes later by another from
Senator Stewart. both relating to the
subject of guaranteeing the deposits of
banks and trust companies under the
laws of this state and calling upon the
attorney general for an official opinion
with regard to certain questions there
in contained.
The reply of the attorney general
transmitted to the senate was ordered
printed and was distributed this morn
ing and supplied the information called
/ Tor In time to be available in connec-
ton with the final consideration of the
| WhoIe subject of the protection of
oank and trust company depositors to-
| day.
| The attorney generals communica-
| ton says:
While there are five questions
! stated in resolution No. 10 and one in
| resolution No. II, it is quite evident
that all or nearly all of them are only
dlTerent ways of stating the same
| proposition. The form of these ques-
lions illustrates as clearly as anything
| could the importance of the statement
| OF a proposition, for it is evident that
| the resolutions were each prepared
from extreme opposite points of view.
| The first question in resolution No.
|
tive answer according to the interpre-
| tation placed upon it. The question is:
First-Has the legislature the
constitutional power to levy. or cause
to be levied, contribution, assessment.
| or tax by whatever name it may be
| called, upon the capital stock. or de-
| posits of any one bank or trust COM
pany, to pay the depositors. in any
| other bank or trust company in event
of its suspension p
"a possible reading of this question
| would be, Can the legislature take a
| part of the assets of one bank to pay
the depositors Of another? No one
1 would hesitate to answer such ques-
ton in the negative. On the other
| hand it must be. evident from the SUBJ
Ject of both resolutions and the dis
| cussion now going on before the legis-
| lature, that a reasonable and probabl
| reading of the question is Has the
legislature constitutional power to en-
act law guaranteeing the deposits of
state banks and making it compulsory
| upon banks as a. condition precedent
to engaging in business to comply with
/ such law. by making the contributions
| or assess ments necessary to carry the
same into effect
"An answer to this question involves
| a construction of the nature of the
| business of banks and banking. If it
is strictly a private business with
| which the public has no concern what
ever, then it is apparent that the pub
| right to impose limitations or restric-
| lions of any kind, or any tax or assess
ment upon the business, which 1t does
not impose upon other businesses or
other occupations. But If the public
has an interest in banking and the
conduct of the business carried on by
bankers, then a different rule applies.
1t must be admitted that there are at
present many businesses in which the
public interest, manifest through the
police power of the state. may consti-
tutionally interfere for the purpose of
the public good. Is banking such a
business? And if it is business which
the police power of the state may
regulate. would the imposition of the
| Socalled assessment or tax upon tho
deposits or capital stock for the pur-
pose Of guaranteeing the payment of
depositors in all the banks of the
state, be a reasonable regulation or
exercise of that power?
There can be no question at this
times but banking is a business which
is clearly with public interest. 1t is
SO regarded by both the national and
| state governments and so recognized
in the constitution Of our state. More
than this, the supreme court of our
state has thoroughly considered the
question and decided that the control
Of banks and the business Of bankers
is clearly within the power of the leg
islature. ea--i- ,stf7 stB
) within certain limitations the legis-
!, lature is the Judge of what is reason
able and just as to regulations Of lines
of business of a public nature. 1t can
not be presumed that the legislature
proposes to require an assessment or q
contribution, for the purpose of saving
the depoSitorS In banks from loss that
would make it impossible for any indi-
vidual or firm to engage in banking
1t seems to be a question upon which
, bankers as well as the people general
) ly of the state are somewhat divided
as to whether the levyfng of such ar
' assessment will not even contribute tt
. the benefit and profit of the bankers
t rather than to their injury. If it is 6
+ measure which will result In benefit tt
the business of banking by causing E
more universal feeling of confidence il
such institutions than now exists, ant
which will for this reason increase the
! deposits in banks and their genera
use by the people as financial institu
! lions and agencies, the Legislature
= should not be prohibited from adopting
!. such a measure because involved in 1
; would be the 1evying of a reasonabl,
1 fee ON a condition precedent to engag
!. ing in the business. This is a queS
ton, of course, upon which / express
tional power to impose regulations upol
But it must be evident that all Ques
: lions of general welfare, which relat
to the general public policy of the state
/ are questions for the legislature to de
) termine l am, therefore, of the opin
ion that the legislature has cOnstitu
tional power to impose regulations uuol
e the banking business of the state 70
4 the purpose of securing depositor
who have dealt with such banks an.
| that the imposition or levy of an as
| sessment as a condition precedent t
receiving deposits by such bank, 70
| such purpose, If reasonable and applied
r euuitably to all banks organized unde
| the state law, would be legal and with
in the powers of the legislature. Sue
a. regulation would partake both of tn
a qualities of insurance and assurance
0 and that the state has such power TO
f the purpose of protecting so importan
1 a public interest as that of bankin
: can scarcely be doubted, in view of tn
g decision of our supreme court cite
n | above,