The Owyhee nugget. ([Silver City], Idaho) 1905-1984, 1909-02-19
BANK GUARANTY Law.
representative Dunnins To Pre-
sent Bill In House.
Fund for Protection Of Depositors by
Its Provisions VIII Be Raised by
Assessment Plan.

A state bank guarantee law viii be in
troduced in the house by Representative
Dunning. The proposed bill provides
for the creation of state bank commits
sion to be composed OF the governor,
treasurer and auditor This board will
be empowered to levy an assessment
against the various state banks to accrue
into fund for the protection of deposit
tors against loss when bank becomes in
solvent
| Its provisions provide that this levy
shall be ] per cent of the daily average of
deposits, less the state and county funds.
In one year after the first assessment each
bank must report any increase in the
daily average of deposits for the year and
forward sum amounting to per cent
of this excess of deposits. For each sub
sequent year levy of one fourth of per
cent shall be levied until the guarantee
fund amounts to 5 per cent of the total
deposits of all state banks. If the fund is
depleted from any cause special levy
shall be made by the commission in order
to keep the aggregate up to per cent;
provided, however, that no such assess
ment shall exceed 2 per cent of the total
deposits in any one year.
Provision For New Banks.
New banks organized will be required
to pay into the depositor's guarantee
fund per cent of the amount of their
capital stock when they open for business
as credit fund subject to the adjustment
on the basis for assessments of deposits.
National banks, upon application in
writing to the commission, will be per-
nitted to avail themselves of the provis-
ions of the act and have deposits gnaran-
teed on an equal basis with the state bank,
but in the event of the enactment of
federal statute they viii be permitted to
withdraw from under the operation of the
state law
The state treasurer is designated as the
! custodian of the fund which shall be sub
ject to the draft aud order of the state
bank commissioner. In the event of the
insolvency Of bank the commissioner
shall take charge of its assets and settle
with depositors. The state assumes a
first lien upon all assets and liabilities
against stockholders and directors, and
such liability may be enforced for the
benefit Of the depositors' guarantee fund.
The billprovides that the commissioner,
or one of his assistants, shall visit every
bank in the state at least twice a year
and make thorough examination.
Rate of Interest.
No bank organized under the provis-
ions of the laws of the state will be per-
mitted to pay. or promise to pay as in
terest on money deposited more than 4
per cent per annum. The act further
provides that no person shall be eligible
as director of any bank unless the own
er of $500 in stock fully paid up, and
that it shall be unlawful for any person
to borrow money from banking institu-
ton in which he is managing officer.
The officer authorizing loan as well as
the person receiving the same shall be
deemed guilty of felony.
Limitation of loans is fixed at 20 per
} cent of the paid up capital stock of
bank; provided, however, that any bank
without imparing its reserve, may ad-
vance money to any firm or person en-
gagged in marketing the products of the
state in an amount not exceeding 75 per
cent of its paid up capital stock, limited
also to 70 per cent of the cash value of
such products marketed, to be secured by
elevator receipts, warehouse certificates,
Statesman.