Omaha daily bee., 1909-11-08

The present fund. II IL is entirely reim-
bursed when the affairs OF the Columbia
are settled. will be little over 10000, while
the total deposits in state banks is t45,oOO,-
600. 1t is planned to build up a fund from
5 per cent Of all state bank deposits. hut
the law provides for an annual assess
ment Of o~ne-fourth Of 1 per cent Of the
state bank deposit average annually, and
at the rate deposits in the state and ma
tional banks in oklahoma increase this
assessment will no more than keep the
fund up to its present ratio to the total
deposits in the state.
To correct this weakness United states
Senator Robert l.. owen, one Of the trainers
Of the bill, proposes that only the individ-
ual deposits be secured and that all inter-
est bearing or investment deposits be p aced
in banks at the risk Of the depositor. This
would greatly reduce the amount Of LA
bility to the guaranty fund.
State Senator Roy Stafford, editor Of the
largest democratic paper in the state, has
suggested thai because of the recent Ne
braska decision holding the guaranty law
illegal, the legislature make the guaranty
law voluntary instead Of compulsory on
the state bankers.
Would Cut out Politics,
Amendments proposed by certain MEM
bers Of the state banking department are
that the bank commissioners be given SUI
pGeme Jurisdiction as well as ministerial
powers, to avoid creditors asking the courts
for the appointment of a receiver so the
assets will be pro-rated among creditors,
though such an amendment, II is thought
could not be drawn to escape the federal
court Jurisdiction, where Interested parties
live in other states; and to provide for
the closing of the bank for a period Of
ten days following the failure. This last
amendment is intended to permit the as
sembling Of the guaranty fund, the as
certaining Of the true conditions OF the
bank and the like, but 1t would be neces-
sary to couple with it a provision wehereby
banks having reserves in the defunct in
s~tltution might be assisted IL so short Of
funds that they would otherwise fail.
There is a strong sentiment in certain
quarters for state insurance of bank de-
posits. This is the only point in con-
nection with the guaranty idea, where
William Jennings Bryan and Governor
c. NJ, Haskell are known to differ. Bryan
announced for a state guaranty, while
Haskell is the father Of the idea for the
compulsory mutual bank guaranty fund
with nc liability on the state.
Law Won't stand Hard Test.
1t is of peculiar interest in connection
with Oklahoma's guaranty law that its
friends no longer claim that it is intended
to apply in times of financial stringency
such as brought it forth. Governor Haskell
recommended the law to the first legisla-
ture as a cure for panics. The second
legislature, with a view to correcting the
defects pointed out during the national
campaign, although there had been no &C
tual test of the law in Oklahoma, mate
rally amended It. In the second legisla-
ture 1t was considered as a law to take
care Of lame duck banks and spread
the loss in case of one or two failures over
such an area that the bad effect would not
be felt, but II was no longer claimed that
ii would work out during a panic, because
Of the smallness Of the fund and the i'm
possibility of keeping II where it could be
obtained when needed. If left in the banks,
as is now demanded by state bankers, it
could not be assembled at such a time; II
invested in securities there would be no
market for them in the time of financial
stringency, and IL put in a vault the state
would be enticing money from the private
sock to place it in a great public sock"
Enemies Of the guaranty idea most fire.
duently make the point Ethat the law en-
couraGes wildcat banks and then compels
the conservative to make good the losses
Of the wildcatter. The Columbia grew from
a bank with 1856, 900 deposits to $1,000, 900 in
less than a year. It's failure has had the
effect of starting agitation for a strict
enforcement of the state banking law and
an amendment also, if the law is weak re-
garding offenses or penalties.