The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-07-27
new POINT RAISED
Bankers Insurance Company
May Meet New Condition.
Paid in Capital Likely to BE
Insufficient.
JACKSON TO DECIDE.
Superintendent barnes Refers
Question to Attorney General.
Application for the License is
Made Today.
JACKSON TO DECIDE.

or insurance CndS. barnes LOT pCt
mission for the Bankers Deposit
Guaranty and Surety Co, to do busI-
ness in this state under their charter
Supt. Barnes Will check the PROPOSE
tion of the legality Of this charter up
to the attorney general for an opin-
ion before making "A decision on the
application. This is the custom of the
insurance commissioner in matters
OF this kind.
\ new and important question has
arisen today in connection with this
effort of the national bankers to
guarantee deposits, that may over
. shadow that of the amount of inter-
H est to be paid upon deposits and
which was the cause of the contro-
Versy i'm the first place. This refers
to what the law under which the cor
poratiOn was formed meant in its de-
signation of what shall constitute
capital stock. The statute. in defining
what shall constitute the capital
stock OF an insurance corporation and
what amount of this shall he paid UP
leaves a wide margin for interpreted
tiOn as to its exact meaning
The bankers company is capitalized
at $500, 900 with 100000 paid UP
apital 1t is possible that the super
intendeut of insurance may refuse to
grant permission for this company to
do business in the state on the ground
that the capital stock must be paid
in fun, and not consider the question
of the amount of interest that shall
he paid upon deposits at all. Really.
the question of the Interpretation of
the law as it affects capital stock ov-
ershadovs the former veXatiOus ques-
tfon of the rate of interest on depos-
its entirely.
Tho Law in Question.
The law under which this company
was formed reads as follows:
THAT in addition to the purposes
Tor which corporations may he form
ed under existing laws of this state |
private corporations may also be I
formed for the purpose of qua rantee- J.
Ing the fidelity of persons holding Of I
ices of public or private trust to ex- /
ecute and guarantee bonds and un-
dertakinEs in judicial proceedings /
and to guarantee the faithful per- |
formance of any and all public. Of |
ficial or private duties.
NO such corporation shall Ia |
formed under the laws of this state /
unless the Same shall have paid I
I'M capital of not less than two hun 4
dred and fifty thousand dollars
pom being granted a charter hv /
rhe charter board. such corporation .
shall not transact any business in
the state until it shall have in addi-
ton thereto, complied with the laws
OF this state governing life insurance /
companies so far applicable and
shall obtain from the SUPERINTENDENT
of insurance authority to do business
in the same manner and upon paw
iAlSilt VI lIlt same lees required of
life insurance companies organized
under the laws of this state.
Foreign corporations. organized
under the laws of foreign states or
countries for the purpose of transact /
ing all or any of the kinds and classes
of business set forth in section of
this act may he admitted to transact
said business in this state upon the
same terms and by the same pro-
tedure by which foreign life insur-
anCe companies are permitted to |
transact their business in this state |
and such corporations shall be re- l.
quired TO pay to the superintendent of
insurance the same fees and comply
with the same conditions required of /
foreign life Insurance companies"
Up to Attorney General.
Now under. this law the superin-
tendent of insurance must decide
whether or not this surety cOnpa77v
must have its capital stock paid UD in
fun. or whether the $250.00O paid in 1
fun, as noted in the law will cover
the case, and whether or not this
company. shall, like foreign insur-
ance companies in which it is cIassed
by the law. put up 100000 with the
state or put up 100000 as being the
sum equal to its capital stock
The attorney general Will first pass ,
upon this question and render de-
cision containing his Interpretation Of
the law and the insurance commits
sioner viii pass finally on the
application with this decision or in
depreciation of the law to guide him
As to how closely he will follow the .
attorney generals decision Superin-
tendent Barnes declines to commit
himself. nor has he expressed him
self explicitly as vet regarding his
course on the question of the amount
OF interest surety company may pay
on deposits and come within the
provisions of the insurance law
IF the attorney general and suDerfn-
tendent of insurance both hold thai -be
law applies in its literal meaninz then /
the bankers will have to amend tbetri
charter and reduce their capital STOCK
or they viii nave to deposit a halfI
million in security with the Stlte and
raise still more money for d working
capital
The situation looks, to be Stfu NOR.
complicated since it has reached the
superintendent of insurance. The ma !
tional bankers now face a steeuA- b:I
in the matter of capitalization tbar
they did when they started IN the in
&rest on deposits hill.
= If there was a demand befor, for a
legislative special session to adilJst tho
matter by an amendment to the s.},er
ter law governing the rate of interest
to be paid by banks on deposits tt9rC 7
is a stronger demand now for -
amendment to the insurance IaU-e i,
those sections relating TO capita lizstion |
They should be made more explicit and !
this change in the law NAV he ,,,a51 - !
the interest OF the national bankers
deposit guaranty and surety CoD7ra,,1- =
or against 1t as the legislators sec 1T
If the bankers charter is t7,Tna-5 |
down entirely by the superintendent nf :
Insurance on the capitalization c1a,,se i
then the bankers viii have to amcy1-I ,