The Topeka state journal., 1909-02-19

| senator Robertson moved an
amendment to section 3, that the mini
mum assessment against any bank for
the guaranty fund be increased from
$40 to $780, Senator Cambern explained
that the committee had considered the
minimum assessment and had agreed
on $40 a fair assessment against
small banks. The amendment was
lost
Senator Carey desired that the guar
anty fund be increased from $500,000 to
81. .000, 900. Senators Lower and Cambern
stated that before the fund can reach
$500.000 there will be another session of
the legislature and it is not deemed
best to make the fund greater than
half a million at this time.
The Carey amendment was lost.
Senator Lower recurred to the ques-
tion of minimum assessment and
wanted it raised to $25 Senator Carey
| moved as a substitute that the mimi
mum assessment be removed and that
all banks be assessed on the same ratio
| on the amount of their deposits. Both
| the substitute and amendment were de-
| feated
Senator Quincy made a fight for his
| proposition to issue to depositors GER
| tificates of deposit bearing 6 per cent
interest, instead of 3 per cent, in case
| Of loss by reason of bank failure. In
| support of his proposition he declared
| that it is only just to the depositor
| be good at any bank. He believed that
| a certificate bearing only three per cent
interest would be shaved if the hold
er were to endeavOr to realize on his
certificate of deposit.
This amendment was supported by
Senator Robertson who argued along
the same line as Senator Quincy.
Senator Potter opposed the amend
ment because he thought the PROPOSE
tion should be regarded as an insur-
ance and the depositor should not eX-
pect to get his money back with inter-
est. He thought per cent a good in
vestment.
Senator Quincy interrupted with the
suggestion that when a man depends
on his bank deposit as a means of sup
port he does not want a certificate of
deposit as an investment.
The Quincy amendment was also fav-
ored by Senator Hodges, who mention
ed the unpopular "shin-plasters'' issued
by the banks during the panic in Oc-
tober, 1907.
Interest Amendment Lost.
Senator Brewster thought it a pecu-
liar state of affairs if banks which
stand back of the guaranty will not ac-
cept at their face value certificates on
their own fund.
Don't you know that in cases of
financial depression even government
bonds sometimes are not accepted at
their face value?' asked Senator
Quincy.
That is probably true replied SEN
ator Brewster, but under this bene-
fcent law we will have no more f1nan-
cial depression in Kansas"
Senator Brewster did not favor al
lowing any interest on certificates. He
declared that to argue that the certifi-
Gates will not be accepted at their face
value is to admit that the bank guar
anty law is a failure. He thought
banks would not discount their own
paper. which would be the case if they
refused to cash q. certificate which they
guaranteed.
A similar position was taken by
T1rhn q
proposition to pay interest on the GER
tif1cate placed the depoSitor in the po-
sition of speculating on his own mis-
fortune.
to per cent was favored by Senator
Carey, who declared it is ridiculous
to suppose that in case of bank fail
ure the holder of certificate of de-
poSit could run across the street to an
other bank and have his certificate
cashed forthwith.
1.-The committee in considering this
subject said Senator Cambern, "did |
upon certificates issued because of a
bank failure" He declared that if |
per cent were allowed on certificates |
the solvent banks would be glad to ac- |
cept the certificates as deposit in |
order to get the holders business. In |
reply to questions he said as a banker |
he would accept the 8 per cent certifi- |
Gates at face value at his own bank in |
Neosho.
What is the purpose of this act; to /
protect the depositors, or to give the |
depositors in failed banks certificates |
for investment ?'' asked Senator Brew
ster.
ITO absolutely protect the deposit-
ors," replied Senator Cambern.
Senator Hamilton thought the bank
ers of the committee have acted gem
erously and with public spirit in franz
ing the guaranty law, although as
ha hpXy mis- I1f 1n{ I1a to r1ft
the idea. However, he thought the
Quincy amendment should prevail.
Il believe the per cent provision
should stand as it is declared Sena-
tor Lower. ct do not believe in putting |
a premium on reckless, dishonest spec
among banks which 6 per cent |
interest on certificates will foster"
Seator Ganse offered a substitute
that the certificates bear 6 per cent in
terest after the expiration Of IL |
months. This substitute was defeated.
A vote was then taken on Senator
vote of 20 to IS.
The purpose of the Quincy amend
ment was accomplished, however, in
an amendment offered by Senator Car
ey which was adopted, providing that |
in the case of checking accounts GER
tificates bearing per cent interest be
issued to depositors in insolvent banks
leaving interest on certificates for time
deposits at per cent.
Senator Fowler offered an amend
ment to section which had for its
purpose the elimination of all interest
bearing deposits. This amendment
was vigorously advocated by Senator
Quincy, who declared that it is not the
time deposits that cause panics be- |
cause such deposits can not be with
drawn on demand. These deposits,
he said, are rather loans of individuals
to the banks. for an interest consider
alton and it is not proper that they be
guaranteed.