Omaha daily bee., 1909-06-27

perienced by depositors in psnics, which
we're wildly portrayed with great %oratori-
cal force and power, we're to be abolished
under this beneficent law.
All that the depositor was called upon
to do was 10 present his claim TO the state
treasury and 1t would DO Immediately paid.
Every one who listened to the debates
upon this subject last fall cannot fail to
recall that these were the promises made.
But the most enthusiastic supporter Of
the guaranty idea cannot claim that this
immediate payment feature has any ex-
lstence 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 dc.
posIts in Nebraska state banks of about
$50, 600, 900 would realize the respectable sum
of 81, 2OO,0 900, which, however, would not be
too much for the protection of &c., 00, 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 /, 1911, when
the maximum will be reached aside from
the nominal annual tax thereafter. All
additional or emergency levy of l per cent
is provided for, but no more than this car
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, OOO,OO o.
deposits must be admitted by everyone.
1t would be entirely insufficient to NEE
the demands arising during the panics o.
the past under existing banking conditions
and these demands would certainly not b,
lessened under the extraordinary condition.
which it is believed the fictitious securit!
offered will foster and encourage unde
this guarantee plan.
But serious as this weakness OF the Law
must appear. It is as nothing compare
with the doubt which may Justly be enter
tanned as to the existence of any certali
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 cas-
securities, it operates merely as entire
upon the books of the banks affected
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, an
then 1t will be for the banks drawn upo
; to say whether they will pay or not. Their
is no promise or obligation whatever o
t their part and whatever defense they ma
have, can be postponed to this period
when all the damage the plan may caus
: will have been accomplished beyond re
l pair.
1t is true that under the law, the stat
3 banking board may close up banks whic
refuse to pay these drafts, but shoul
several hundred banks join in the refust
and demand a test Of the legality of tn
law, 1t would be a rather serious propos
ton on their part to arbitrarily undertake
= it's enforcement.
Q Banks could also avoid payment by goin
. into liquidation or by organizing under tn
national system.