The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1909-02-09
EASTERN WEALTH is WATCHING
BUT FEAR AMENDMENTS TO
BANK GUARANTY LAW.
Department OFFICIALS MUM
Pending Measure in Kansas Legisls-
ture Also Increases Alarm, and
Treasury Officials Have Been Ap-
peaed TO.

Washington. Feb. S.-The attention
of the treasury officials is again call
ed to the bank guaranty question inI
the southwest as affecting not only
the existing law in the state Of Okla.
homa. but the problem pending before
the legislature Of Kansas intended toI
produce n similar law in that state. A
new situation is presented as a result
of agitation of plans for amending the
Oklahoma law. which 1t is expected
will result in raising important legal
questions involving the rights Of cor.
porations in that state. and perhaps
banks in different parts OF the coun-
try
Letters have been received at the
departments from banks in New York
and in the southwest, inquiring
whether the proposition involved in
the proposed amendment TO the Ok.
| lahoma law would be in violation of
the provisions of the United States
constitution The suggestion is made
that the proposed amendment 10 the
Oklahoma bank guaranty law would
make 1t Illegal for any corporation
organized under the laws Of that state
to make deposit in any bank that
is not operated under the bank guar
/ g N .fa N
no bank in Oklahoma under the
guaranty system shall be permitted TO
maintain deposit with any national
bank outside of that tsate.
These questions coming to the de
partment are not answered because
the officials do not regard 1t as wiCh-
| in their province to answer questions
regarding the constitutionality of
pending legislation in any state. The
officials have also seen the bill pend.
ing in the Kansas Legislature intend.
ed to create in that state a bank de.
positors' guaranty fund, but they de.
cline to express opinions regarding il
except to say that the provisions OF
the pending measure intended to in
vite national banks of the United
States TO accept the terms OF the pro.
posed law cannot he made effective
sO far as national banks are concern
ed without amendments 10y congress
to the national bank act The attitude
of the department Officials towards
the bank guaranty question, IL is as
serted. Is the same as It was a year
ago. when a written opinion was Civ
on by the attorney general of the
United States that a national bank
may not be a participant in a system
TO guarantee depositOrs without-viola
ton of the national banking act. The
officials of the treasury are practical
ly unanimous also in expressing The
opinion that the bank guaranty sys
TEN is fundamentally wrong, and tina
It is not only impolitic but impracti
cal from an economic and bankinl
standpoint for one bank TO guarante,
the depositors of another. or be par
ticipants in such a system by the pay
| ment into the common fund To pa!
| the creditors of failed banks.
The officials also call attention {;
: what they believe to be serious de
feet I'm the guaranty system, which, s,
/: far as national banks are concerned
; would make 1t practically impossible
I: 70 rthcm, even If they We're permittet
!: 20 do so under the law, to participate
I'm II. Attention is called TO the Pre-
!: visions of the guaranty bills In tn
!: states of the southwest requiring tha
, reserves must be maintained by bank
in the state that are working nde
the guaranty system. The nationa
l. law requires that banks operating M
}. der it shall maintain reserves in M
# tional banks in the reserve center'
d Participation in the guaranty syster
& would require the maintenance of tw
+. such reserves.
The treasury officials have take
occasion to examine banking cond
tions in Oklahoma and Kansas sine
the establishment of the bank qua
anty system in the former state Som
Interesting figures are shown in N
COMPARISONS Of the existing condition
/, win those just previous to the esta
lishment of the Oklahoma system
February of last year. 1t appears thi
G about thirty five Oklahoma nation;
banks have relinquished their feder
n. charters to become state banks u
n der the guaranty system On Febr
AIRY u, 1905 there We're 3l2 nation
C. banks In Oklahoma with capital
m sl2,2l5 5,O00 These banks has indiyi