Los Angeles herald., 1908-10-26
BANK INSURANCE
IS BEST FOR ALL
OKLAHOMA'S GUARANTY PLAN
A MODEL.
DEPOSITORS CANNOT LOSE A
CENT
Rigid Examinations and Business
Methods Required and Result
Helps Banks and Gus
toners Alike

Judge D. P. Marum of Woodward,
Okla, who was delegate for Oklahoma
at the Transmississippi congress, is
in Los Angeles explaining to inquirers
the merits of the bank deposit guar
anty plan.
Judge Marum lives in the Panhandle
section of Oklahoma and is enthusiast
tic over the merits of the plan.
Saturday he made two talks from
the rear platform of the Bryan special
on its flight over the Kite route.
Discussing the much talked of law in
Oklahoma he said:
"The depositors in state banks can
never lose one cent in Oklahoma. Ihe
law provides first for a state banking
board.
The banking board collects from
each bank one per cent OF all deposits.
Ample Security
"There is the guaranty fund-hve
times enough to pay ten average bank
failures in the United States.
"The fund is invested in interest
bearing securities. The interest on the
fund pays the expense of the bank
board. also the corps of bank exam
iners.
.The examination of banks asking to
be guaranteed is rigid. Assets must
be gilt edged--so far the inspectors
have quickly found out any violation
of the bank laws and protected the
stockholders before the assets became
chips and whetstones.
"yrhe stock of each bank must first
be fully paid in cash before charter
issues.
1T is a felony for an officer of
guaranteed bank to borrow the money
for which he is a trustee. 1t is q
felony for a bank officer to loan any
person or corporation an amount in
excess of that authorized by law; this
amount is 20 per cent. A false report
by bank officers is a felony. Every
bank officer must furnish the bank
good bond for his conduct.
whenever the guaranteed fund is
diminished below one per cent of all
the deposits an assessment is made
on all the banks pro rata. The interest
that can be paid on deposits is reg
ulated by the bank board; at present
1t is per cent; it can be increased
to per cent This law works well.
when bank fails a notice Is posted
up on the door: This bank is in the
hands of the state banking board; de-
positors, come and present your claims
and get your money.
1.-THE only failure was a small bank.
The cause, the president and cashier had
nd borrowed $4,000, in violation of law.
They could not replace the moneys the
stockholders would not. Ninety per
cent of the depositors received their
money inside of twenty-four hours; the
other 10 per cent telephoned In that
they were too busy planting their crops
and would call later for their money.
In thirty days the guaranty fund was
reimbursed, the balance of the assets
turned over to the stockholders, who
realized nearly as much as they had
invested: the cashier and president un-
der indictment awaiting trial. The ex-
pense of disposing of assets is very
small and is not eaten up by receivers
fees, long drawn out attorney fees and
other incidents.
"rhe examination of assets is very
rigid; the inspector is disinterested; he
is also a state officer, sworn to per-
form his duties, and in Oklahoma they
do. They find the fraud at its incep-
ton. before the securities are stolen.
How It Works
"The next case was where the cashier
stole $4,000 from his bank. His bonds
men replaced the money within week;
a new cashier was hired and the bank
continued business with it's capital un-
impaired. The bond company is look
ing for the cashier.
",rhe third case was overloaning to
one person. The president and cashier
are Indicted; new ones employed; the
loans brought within the requirements
of the law.
"The result is that people have con-
fidence in the banks, the money is de-
posted there, stockings are put to the
uses for which they were made and tin
cans are used as appendages to yellow
dogs, and, by the way, yellow dogs give
Oklahoma wide berth.
MANY of the national banks have
surrendered their charters and incor~
porated under state laws. They had to
do this to save their deposits during