The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-06-29
POLITICAL GOSSIP
Special Session Gossip Is Still
Going On.
Bone of Contention Between
State and National Banks.
INTEREST QUESTION
QUESTION
National Institutions May Not
Keep Within 3 Per Cent.
Talk Is Not Regarded Seriously
by the Conservatives.

The bone of contention between
the National Bankers Private
Guaranty association. or rather in
surance association. and the State
Guaranty association is the fact that
the interest paid on deposits to three
per cent as is provided for by the
state law authorizing the state
guaranty of bank deposits.
Out of this difference has arisen
the present talk of a special session
generally believed that the governor
will call such a session there is no
doubt but the foundation for the re-
ports of such a session originated in
now as a bluff. but it may possibly
turn out to be the real thing.
Still, if the governor could not con-
troll the regular session there is no
ground for the fond hope that he will
have any better luck with a special
session. 1t might take month to
get an amendment in the present
banking laws worked out and placed
on the statutes. Gov. Stubbs knows
this as we'll as any body and will
hesitate long before he calls back into
session the legislators who hammered
his utility bill into smithereens.
The new state guaranty law will
not permit state banks taking part in
its benefits to pay over three per cent
on deposits. The governor declares
that this restriction was imposed in
order to satisfy national bankers. Now
he thinks that they in their turn
should restrict interest payments on
deposits to three per cent also and
thus conform to the concessions they
gained in the passage of the state law
He thinks they should also adopt all
the other restrictions of the state
guaranty law.
The national bankers. however,
have kicked over the traces and re-
fuse to follow in this matter.
Speaking of their stand on this ques-
of national bank insurance said:
Banks, as rule, never fail on ae-
count of the interest paid to de-
positors. They fail on account of bad
loans or thefts. What this company
has decided to do is not to interfere
posits but to determine whether the
bank seeking insurance is managed
efficiently.
"Some of the most conservative
and strongest banks in the state, es--
pecially in western Kansas. pay
per cent on deposits. They will be
permitted to pay that amount by our
company. We have decided to face
the matter squarely and have it set
tied once for all.
Governor SluDbS WILL lIOI CNCil 0io-
cuss the probability of his calling a
special session, but a politician very
close to him in council is quoted as
declaring that there would be such
session called in the next thirty days
1t is a we'll known fact that the pres
ent guaranty law would not have
passed the legislature had it been
known at the time that national banks
could not participate in Its Dement'S
1t is given out that the primary object
inc ff1ic SnaPjQl session
is that it would prevent a war between
the national and state banks by
amending the state guaranty law so
that state banks will have the same
privileges as those granted by the
charter of the national banks protec-
tive association.
President Ames of the national as
sociation, speaking of the matter,
said:
s'The company will be ready for
business as soon as some of the details
have been worked out. and the insur-
ance laws complied with. A form of
indemnity bond has been agreed upon
which in substance provides:
'sThat the Bankers Deposit Guar
antv & Surety company obligateS itself
and agrees to pay to the depositors. or
some trustee named by them. all de-
posits of the bank.
ssThe condition of the obligation is
that if the said bank shall become in
solvent and be unable to pay it's de-
positors on demand, at maturity, then
in that case the Bankers Deposit
Guaranty & Surety company agrees to
nav all unpaid balances due depositors
within one year from date of suspen-
sion with per cent interest per an
mum. The depositors are to assign to
the company their claims against the
bank, and thereafter the company be-
| comes Subrogated 10 all the rights o.
| said depositors.
"Many state banks have come into
| the company for the reason that nc
| limit has been placed on the rate ot
| interest a bank shall pay on time de-
posits, the opinion of a large majority
| of the directors being that it would
he better to let the examination dis
| close whether or not a bank was pay.
ing a higher rate than it could afford
to pay. If it was, refuse to issue {
| policy.
son the other hand. if the bank wa
doing a prosperous business, and pay
ing a higher rate than per cent t.
give its depositors the protection o
the company. In a word, the examin
alton of every bank having it's de
posits guaranteed by a policy in thi
company, must disclose that the banl
| assets are clean and that the manage
ment is honest and conservative.
-un eul Io1 eplAoId IlIM kouod mo-,
conditional payment of the deposits o
a suspended bank with per cen
from date of SUSPENSION. 1t is not tn
intention to antagonize the state bank
or the state guarantee law. but to of
fer a plan that will appeal to the de
positors as affording as good a Sc
| curity as is offered by the state law
Shulxers Would Cancel a Parole.