The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1909-01-26
HOW IT WORKS IN
OKLAHOMA STATE
Bank Deposit Guaranty
Law a Success
WITH DEPOs|TORs

view Concerning Oklahoma's Bank
ing Law and How 1t Works and
How 1t Takes With Bankers and De-
pOsitors.
Especial to News and Observer.)
Apex, n. c., Jan. 23.-Harvey NJ.
Holleman, of McAlestcr, Oklahoma,
arrived here today for a short visit
with his parents. Mr.. Holeman went
West about six years ago and is
growing up with the new country
While Interested in a number of in
dustries, most of his time is devoted
to The Jefferson Trust Company, with
Which he is identified. This
was established in 1902 and was a
success from the start, but Mr.. Holle-
man states hat its most remarkable
progress began with the adoption by
Oklahoma of the depOSitOr'S guaranty
Iund law, a year ago, since which
time they have been compelled to
enlarge their working capital several
times to take care of rapidly increas-
ing business.
Speaking of the guaranty law, Mr..
Holleman said:
Il notice North Carolina proposes
to pass a similar law. A wiser step,
the Old North State never cOntem-
tNS~NO' cAio L dSI II NC doofttu.
| feel a great interest in the welfare
OF my native State, and feel certain
that capital will thereby be attracted
to your State, the same as has been
the case in Oklahoma, by passage of
this law safeguarding and assuring
the depositor that his money is safe.
1t has created confidence and Okla
homa would have no runs or State
banks today, even We're Wall Street
to have a manic worse than thar of
1893. l remember that time we'll. I
was employed in the late Major
Winder's office in Raleigh, and decid-
ed to take q trip to the Worlds Fair
at Chicago. | went to Mr.. b. S. Jer-
man, who was then cashier of the
Commercial and Farmers Bank, and
he gave me New York drafts signed
by his bank, for surplus money hat
| Dol with me, and in Chicago they
refused to cash them, saying they
could not keep up with the numbe
of New York and North Carolina
banks that were failing and were not
taking chances on any bank except
their own. According to the Okla
homa idea, we win at all times have
confidence in our State banks, and
confidence viii prevent panic. In
fact it is the only absolutely sure
remedy financiers have yet submit
ted. This within itself is a good rea-
son to favor the guaranty law"
Continuing, Mr.. Holleman said: Il
came through Arkansas. Their Leg
islature is in session. A banking
bill identical with that of Oklahoma
has been introduced. Arkansas is our
next door neighbor and feels more
kccnly the banking business lost to
them and gained by Oklahoma banks
than States farther away.
The bank deposit guaranty law
= IL t. af~ lA1 ~ {1n =
fcers and stockholders of the State
banks n by the great majority of
depositorS, but for different reasons.
The State bankers are in favor OF the
law primarily because it is bringing
them business. The depositors sup
it they believe that the
law makes their deposits absolutely
secure.
The experience. of the Oklahoma
state Bank of Guthrie may be cited
TO show why the State ank are now
almost a unit in defending the law.
a. r. Eastman, president of that in
stitution, opposed the passage of the
as did many other State bank
officials, and he candidly admits tina
as a banker ne would probably now
be opposed to the laW if all banks,
both state and National, were subject
to its provision.
NIL. . piiIh nv N1"i dSo
had deposits aggregating only $4,000.
The statement published on Septcm-
Der 23rd showed the bank to have de-
posits amounting to ~$312,403.68, and
Mr.. Eastman states that the deposits
now exceed $400, 600. These deposits
been taken largely from the ma
banks ease tnffaTTfy EastpAanf
rnaranfT law. nder such conditions
t would naturally be surprising to
the State parks opposed TO the
Mr.. Eastmah. however. although
that,k as a banker, he may
e influenced ~ the fact that the law
enabled his bank to increase its
to- about six times what they
we're a year ago, declares tina he
believes the principles of guarantee
.ng bank deposits to be practicable,
md to. be very desirable from the
viewpoint of the depositors. He does
not pretend to say, however, that this
fact has been demonstrated beyond
at the present time.
1T will take years. Mr.. Eastman
declared a few days before / left
oklahoma, to proVe beyond question
the present system OF guarantee
bank deposits, or any system, tor
matter. IS q success. we nave
had no extraordinary conditions 70
GlV the system d uiOlouSl ttSI L.
will probably require four or five
experience before we can even
declare safely that the system is a
complete success under ordinary con
ditions. The first years experience
has brought to light certain weak
points which must be corrected. AID
this will undoubtedly be done at tine
session of the Legislature. We
are simply feeling our way. and SO
far nothing has occurred, L think,
which would justify the statement
that the law has not proved a sue
cess.
81 do not attach much Importance
to the contention that the guarantee
law encourages reckless and loose
banking, or that it invites lnco1npe-
tents or INSCRIPTIONS men to come
to Oklahoma and engage, in the bank
ing business. The best answer to this
argument is found in the stringent
banking law of this State and the
supervision which is exercised over
the management Of the State banks
This is the only safeguard agains
reckless and dishonest banking unde,
| any conditions, but, of course, it i
more important under the guarantee