Omaha daily bee., 1909-11-08
HASKELL IDEA IS WEAK
Oklahoma Bank Guaranty Law is Not
Working Well.
ITS ADVOCATES BACKING WATER
Governor and His Board and Bank
Commissioner Young in Column
bia Case Practically Adam
don state Law,

GUTHRIE, Okl., Nov. 7.-(Special)-Re
narkable IN connection with the nquida-
ton Of the Columbia Bank and Trust COM
pany of Oklahoma City, which failed on
September % last, is the action OF Gov
ernor Haskell, largely the author and
chief spokesman in Oklahoma of the law
guaranteeing bank deposits, in abandon
ing the guaranty law and the idea before
the liquidation was half completed and
proceeding as is done with national and
state banks where there is no guaranty
law, to pay the depositors .as rapidly as
the assets Of the bank are realized upon.
Governor Haskell was indicted into Of
flee during the financial strlngency in 1907
and Immediately recommended to the leg
~islature the enactment Of the law guaran-
teeing depositors in state banks by a fund
raised by assessing the banks on their
deposits. The law provides that when a
bank fails the bank commissioner shall
Immediately take charge and pay the de-
positors dhe law as it now stands includ-
ing all classes of deposits) from the cash
in the bank and the guaranty fund. II all
claims are not settled then the law pro-
vides for an emergency assessment Of 2
per cent of the deposits in all state banks.
Certificates bearing 6 per cent interest are
then to be issued IL the depositors are not
all paid, the certificates to be taken up as
rapidly as the assets in the bank are real
lied upon or money comes into the guar
anty fund by assessment. The trainers
of the bill expected that the certificates
would be good at their face value.
The theory is that the depositors should
receive their money at once from the cash
Items in the bank and the guaranty fund
and that the bank commissioner, as fast
as he could turn the assets Of the bank,
should replace the guaranty fund, return
ing to the state bankers the amount Of the
emergency assessment.
lHRskelIs Plan Impractical.
But in the liquidation of the Columbia
Bank Commissioner Young, the Banking
board and Governor Haskell, who is per-
sonally directing the matter, practically
abandoned the methods outlined in the
guaranty law within ten days after taking
charge and are paying the depositors from
the money secured on the bank assets in
stead Of from the guaranty fund The only
difference from the procedure in the liq-
uidation of unguaranteed banks is that In
stead Of applying the money secured on
assets pro rata to all deposltors Of the in
s%titution Bank COMMISSIONS Young is pay
ing certain depositors first, while others
are waiting willingly or otherwise.
The liquidation was begun under the
guaranty method. The guaranty fund on
hand was used and an emergency assess
ment Of three-fourths of 1 per cent was
levied. This met with much opposition
from the state bankers, a number OF them
favoring opposing the levy in the courts
Then came the Nebraska decision holding
the compulsory guaranty law unconstltu-
tional in that 1t takes property without due
process of law in violation OF the federal
constitution. No more emergency assess
ments were made by the Banking board,
as the law says shall be done until the de-
positors are all paid. Instead the banking
department devoted its energies to turning
the assets Of the bank quickly and induced
certain depositors to wait for a settlement.
Remarkably quick time is being made by
Bank Commission Young in disposing OF
the bank's assets. His statement of Octo-
Der 30, thirty-three days after he assumed
charge Of the bank, shows that at that
time he had paid ST. S9, 81. so to depositors,
Of which 81, 1856, 647. q had been paid from
the assets of the bank and only S5O3, CAT. q
from the guaranty fund. When Young took
charge deposits of all kinds in the bank
aggregated 2,9Ol, O47 SO. Approximately O.
per cent has been paid from the guaranty
fund.
Appeal to h Banks.
IThnNhaR NhnnA hoe Nan n -a,A.at, A--a