Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1909-09-29
Defends Bank Guaranty

Der county bank, The Index has
folder issued bv the State Bankers
Association defending the state
bank guaranty law, and we take
pleasure IN publishln paragraphs
from it. The booklet is d very
strong presentation of the sound
ness of the bank guaranty principle
ann is doing much toward putting
to rout its opponents. If the leg
islature had only used wisdom and
made the law applicable and com
| pulSory, the 'knockers" would have
no weapon with which to fight it:
"The opponents of the Guaranty
Law, in conjunction with certain
newspapers, have been making un-
fair and untrue statements, recently
in regard to the Guaranty Law.
They state that on a recent date
forty-flve banks had qualified un-
der the Guaranty Law, and certif-
Gates issued, and $3,546.oo in as
sessments paid, and that the
amount of deposits guaranteed is
$7,5oo,ooo. The facts are, that
at that time there was the above
amount paid in, which, under the
law, could be increased to FIVE
times that amount by assessments
ordered by the Bank Commission.
er, should occasion require. There
were at that time also deposited
by these forty five banks $44,-
10000 of bonds and cash, as pro-
vided for under the Bank Deposi-
tors Guaranty Law.
"The records show that during
the past forty years the average net
loss to depositors through failed
banks has not been to exceed 20
per cent of the deposits at the date
of failure. or in other words, four
fifths of the deposits of failed banks
have been paid to dep 'sitors.
"The Legislature very literally
provided for the raising of very
much more money each year than
can ever possibly be needed. IN
der the law, the Bank Commission
er can levy five assessments in each
year Of one twentieth of per cent,
which is So. SO per 100000, or
$2.Io more per 81, 100000 than the
records of the past forty years show
would have been needed.
"To make the Fund absolutely
adequate beyond all question, the
Legislature provided further that
leach bank must deposita good and
sufficient bond of $500 90 for each
$Ioo,ooo.oo and fractional part
thereof of the banks deposits.
Should the banks books show that
it had an average per annum of
$1oo,ooo.oo and fraction in de-
posts, it would have to deposit
$Ioo, 10000 in bonds, which, it is
estimated, will amount to $500
per 81, 100000 additional security.
"The Bank Depositors' Guaran-
!y Law shows and provides for,
under it's straight assessments, six
times more money than the records
(for the past forty years. show
would have been needed, with an
additional security in bonds of IF
teen times the average net losses.
at is not a question with the
opponents of the law as to its pro.
visions and adequacy, but it is their
determination that the people of
the State of Kansas shall not have
that for which they asked and to
which they are entitled. They
shall not have a law which means
that when they deposit $500 in the
bank that afterwards fails that
they will get it back at 100 cents
| on the dollar, and not SO cents.
"The Constitution of our State
and Nation does not provide nor
intend that on public questions of
F. this kind IS per cent of the people
should rule over IS per cent.
| "Should all the State Banks par
ticipate under the law, and the law
provides for five assessments per
year, if needed, which would bring
in at least $I5o.ooo.oo, the Guar
lanty Fund would amount to six
times the amount required to pay
the net losses to depositors through
failed State Banks in Kansas as
shown by the records of the past
twenty years.
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