The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1909-01-08
OKLAHOMA GUARANTEE LAW
SOME OBJECTIONS NOTICED

ing forced 'o change their methods
to meet the competition Of the loss
carefully managed Institutions The
principal answer To this argument is
that such condition Of affairs can
b" prevented by careful supcr,l
sion Of the banks and the enforce.
mcnt of proper regulations relating
10 the organization and conduct Of
banking institutions
This objection raises the most vl.
tai question encountered In a study
Of The whole bank guaranty system.
u forces the conclusion that lcav.
iug ail other minor questions ont Of
consideration. the success of Gr-
posil guaranty system must be- de
pendent upon the ability of the state.
TO enact ana enforce stringent laws
regulating the organization and man.
agomont Of the banks without such
safeguards there could bee no defense
Of tho guaranty system for the ar.
gumcnt advanced by some friends Of
the system that bankers as class
are men Of high character and stand.
ing and can be- relied upon to keep
mp the present high standards Is
admittedly too weak 10 deserve much
consideration.
The actual results Of the past
year will furnish some means for
Judging the merits of this argument
against the guaranty system. but
there is another important question
which is less tangible. and which is
more largely matter for spccula.
ton This relates To the possibility
that large number of banks might
fail within a short period Of time
thereby depicting the guaranty fund
and forcing heavy assessments upon
the remaining banks To pay the loss.
cs sustained by the dcpositors in
the dofunct institutions.
These are the two vital problems
involved In the successful operation
Of deposit guaranty law. There
are numerous minor problems, but
they are OF secondary Importance as
compared with the main questions
involved
In looking for actual results from
/ the operation of this law, which has
been in force about ten months. at
| ten'iou Is drawn first 10 the effect
which the law has hal upon the or
/ ganlation and management Of IN,
state and national banks and upon
IN, relative increase or decrease h
/ the amount or deposits carried lbs
! these two classes of institutions \
distinct line i, drawn between the
! state and national banks. since all
state institutions are forced To avail
themselves of the protection offered
hy the guaranty fund, while national
banks are prevented by % decision
lof the controller of the treasury from
taking advantage of IN, law. even q
they desired 10 DO So
There were on December /. forty
nine more state banks in Oklahoma
than there We're in February, when
the guaranty law went into effect
/ while The number of national bank,
remained practically the same. There
has not been a national bank organ
lied in oklahoma since the law be
cam" operative. Three state banks
have been uatioualizcd during that
! time. but no new banks have been
organized Between Nov lG. 1907
and Nov L. 1905. fiuy.clght new state
| banks were organized and eighteen
national banks were couyprtcE into
state institutions. During The sam,
time tWoutyfour banks were liquidat
ed ana three state banks were ma
ionalizri leaving atoral mcrras, oft
,uuyuiuc state banks
During the time that has elapsed
since th, law went into effect. ,h.
total deposits Iu state banks i'm OK
hhowa. both state and national. hay,
Increased about $5Uo00oO The dr
poSi's Zoo 'ho state banks have I'm.
creased about S,oooOoo. while the
deposits in the national banks have
decreased about $4,000 0o0. OF the I'm.
crease of S5.OOoooO lu total drposir.
about $2,OoOOoo or $1,000 600 might
n' accounted for by the recovery
from tho panic conditions which cx.
listed a year ago and by the natural
! increase that might be- expected in
the course of a year The remainder
undoubtedly represents money which
has been drawn from its hiding
places by the security offered by the
/ guaranty law or the $1,000. 600 which