Omaha daily bee., 1909-06-27

psrienced by depositors in psnics, which
we're wildly portrayed with great oratori-
cal force and power, were to be abolished
under this beneficent law.
All that the depositor was called upon
to do was to present his claim to the state
treasury and It would be Immediately paid.
Every one who listened to the debates
upon this subject last fall cannot fail to
recall that these we're the promises made.
But the most enthusiastic supporter of
the guaranty idea cannot claim that this
immediate payment feature has any eN-
istence In this law. Legal proceedings
must be taken, a receiver appointed and
claims filed and proved, substantially in
the same manner as the present law pro-
vides. before any payment can be made
to a depositor.
The guarantee fund was to be an ample
sum-the figure generally named being that
In the Oklahoma law OF 2 per cent OF the
deposits. with power TO levy at any time
whatever additional sum might be required
This 2 per cent upon the aggregate de.
poslts in Nebraska state banks of about
$50. 900, 900 would realize the respectable sum
of 81, 200, 900, which, however, would not be
too much for the protection of SEQ, 900, 900
Of deposits.
Instead of this, the law provides for a
tax OF 1 per cent only-one-half of same to
be levied and credited by January l, 1910,
and the balance by January l, 1911, when
the maximum will be reached aside from
the nominal annual tax thereafter. An
additional or emergency levy of 1 per cent
is provided for, but no more than this can
be levied in any one year.
The maximum fund under this arrange
ment would be $500, 900, in 1911. The made
quacy of this sum to protect SEQ, 900, 600 OF
deposits must be admitted by everyone.
1t would be entirely insufficient to meet
the demands arising during the panics OF
the past under existing banking conditions
and these demands would certainly not BIZ
lessened under the extraordinary conditions
which 1t is believed the fictitious security
offered will foster and encourage under
this guarantee plan.
But serious as this weakness of the Law
must appear. 1t is as nothing compared
with the doubt which may justly be enter
tanned as to the existence of any certain
fund Of any amount.
Instead of the sum taxed being paid int
the state treasury and then redeposited il
banks only upon safe and approved casl
securities, II operates merely as entrie
upon the books of the banks affected
5 Drafts upon the so-called fund can only b.
? made when the occasion Of bank failure
call for them.
This may not occur for many years, AM
= then II will be for the banks drawn upoI
E to say whether they will pay or not. Their,
' is no promise or obligation whatever oil
I their part and whatever defense they ma,
have, can be postponed to this period
when all the damage the plan may caus
e will have been accomplished beyond re
pair.
1t is true that under the law, the stat
banking board may close up banks whicl
i refuse to pay these drafts, but SHOULD
several hundred banks join in the refusa
d and demand a test Of the legality of tn
law, 1t would be a rather serious proposi
ton on their part to arbitrarily undertake
it's enforcement.
g Banks could also avoid payment by goin
e into liquidation or by organizing under tn
national system.