The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-24


bank would get behind that bank and
prevent its failure.
C A. Stannard said that he thought
the insurance plan would be useless
without a state guarantee bank de
posit fund. He moved to take up the
state guarantee fund bill and consider
IT.
81 believe" he said "that nothing
would ever be done under this insur-
ance law unless we have a. guarantee
deposit law. 1 do not oppose the in
surance bill but 1 want the other
one first"
"It Is very doubtful" said w. R.
Stubbs. whether the national banks
could take advantage of state
guarantee fund law"
Mr.. Bergman thought it would be
best to finish up the consideration of
the insurance bill before going to the
other bill.
''Will you favor the general PROPOSE
ton of a guarantee deposit bill If we
pass this insurance bill ?" asked Rob-
ert Stone of Bergman.
"I'd want to see the BILL" said Mr..
Bergman.
81 mean the general proposition" !"
said Stone.
81 am not ready to say what I'd
do" said Bergman.
The motion to take up the con-
sideration of the other bills was
passed on standing vote, "a to 20.
The committee then rose to adjourn
for dinner.
The committee on banks and banking
made a favorable report on the Ham
bill, and all the other bills were, by
that committee, sent to the scrap heap.
But the house wouldn't stand for that
and ordered that all the bills be printed
and placed on the calendar.
following is the report of the
banking committee:
Your committee on banking have
had under consideration the various
bills referred to 1t respecting the guar
anteeing. or insuring, of the deposits
of the banks of the state and beg leave
to report that, in the Judgment of the
committee, it is unwise to enact a guar
anty deposit law at this session of the
legislature for the following reasons:
"First-That the impression appears
to prevail among the people that the
state itself has power to guarantee de-
posits in state banks, and quite gen.
orally that they may guarantee also the
deposits in national banks. We are
convinced that the state has no power
Of this kind and could not constitution
ally engage in the business of guaran-
teeing the obligations of banks to their
depositors The best that could be done
would be to provide means whereby
state banks themselves might provide
fund to be used for paying the losses of
depositors occasioned by the failure of
some of them.
"Second-Your committee has decided
that the state banks only could parti-
cipate in any such arrangement and
that the national banks would be ex-
cluded entirely therefrom, even as vol
untary participants.
"Third-The national banks hold as
much as one-half of the deposits of the
cfnaLhn1dorG
tfcally all residents of the state. They
pay taxes in the state, and we feel that
any provision that this legislature might
make for the guaranteeing of deposits
should be such that all the banks of the
state could participate in alike.
"Fourth-The only plan which your
considers available is that
of bank insurance, through a company
having ample capital and provisions
for creating an ample surplus to pro-
vide fund of sufficient magnitude to
insure the deposits in all banks volun-
tarily availing themselves of its pro-
lection.
'This plan would enable every bank,
whose condition justified the company
in accepting the risk, to participate in
its protection.
1--WE believe that such a company
could be organized in the state of kan
sas speedily, which could provide as
large a fund as would be practical un-
der any plan for the protection of bank
depositors, as any that could be de-
vised
Upon the principle of insurance
each bank participating would be pay
ing a consideration for the protection
of its own depositors, and the premium
so paid, having been fully earned by
the company insuring the depositors,
could be justly and equitably used in
paying. the losses to depositors occa-
stoned by the failure Of any parttcipat-
ing bank.
"Fifth-Your committee is of the
opinion, further, that the capable,
honest and efficient management of the
banks Of the state should be IeYt free
to enjoy the rewards of their labors
That a guarantee proposition which
proposes to tax the efficiently and hon
estly. managed banks to pay the losses
occasioned by inefficient, dishonest and
reckless management would have a
tendency to bring down to the level
the poorer class Of banks, instead of
raising the poorer class to a higher
standard
I'VE realize that the individuality OF
the management of every business
concern is the surest guarantee of sue
cess. That guarantee plan would
nave a tendency to weaken the feelings
OF responsibility that every banker
must possess.
Therefore. your committee desires
to report back house bill No. Ill, with
the recommendation that it be
passed.
nPR