Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1910-01-20
LEGISLATIVE COMMIT
MITTEE ON BANKING DISCUS
SEES GUARANTY PLAN.
HAS A TENDENCY TO INVITE
INFERIOR MEN INTO
BUSINESS.
WOULD SEGREGATE SAVINGS
FROM COMMERCIAL
DEPOSITS.
Madison, Jan. II

The report of the special legislative
committee on banking, making its re-
port to the legislature, procla1ms at
the very opening that no absolute pre-
venttve or bank failures can be pro-
vided by legislative enactments. IL
the depositor, therefore, is to be made
absolutely safe and secure" says the
committee, 1T is essential that some
method be found by which his money
may be restored to him in the event
of the failure of bank IN when MS
money may happen to be deposited
Living. as we do in this day, in the
light of the twentieth century clVlllza-
ton, no scheme has yet been deVel-
oped and proved which affords to the
depositor absolute security. The most
recent suggestion looking to this end
is the plan commonly designated the
guaranteeing of bank deposits after
the manner exemplifted by legislation
enacted in a number of states. This
was one of the subjects which was
most diligently and exhaustively con-
sidered by this committee"
The committee discusses at length
the question of guarantee of bank de.
posits, taking for its text the Oklaho-
ma law which has been the source
of much discussion. Speaking upon
that question the committee con-
cludes:
I'VE are of the opinion that the
or, q ro1 t,- 10 Wy hoe n tapdoDcvy tn i'm vito
men into the banking business of in
ferior banking ability, and the extent
to which men of such inferior ability
will be able to secure the control of
banks and secure the management
and control of the funds belonging
thereto, depends to a considerable ex-
tent, on laws tending to discourage
men of inferior qualifications from en-.
tering the business and on the
strength and character of the commits
siOner of banking Or other officer who
administers the banking law"
The committee made a careful in
vestigation of the causes of the failure
of the Columbia Bank & Trust COM
pany of oklahoma City, which sus-
pended and was taken over by the
banking board on the day of the ar
rival there of the committee upon the
occasion of it's visit to that state
THE closing of the bank caused no
rifle in the business world of Okla
homa City says the report, the pub
lie was not excited, there was no run
on any other bank, state or national.
DepOsitors apparently had confidence
that they would get their money. Thew
acted in an orderly and we'll behaved
fashion. They drew their money out
of the defunct bank and placed it in
other banks. AS a matter of fact, at
the close of business on the day af-
ter the failure, the books of every 9th
er bank in the city showed an increase
in deposits. While the lobby of the
bank was quite we'll filled with de-
pOsitOrs, there was no excitement OrI
disorder, and so far as the street was
concerned, there was nothing to raise
the suspicion on the part of any
one that he was passing by a bank
whose doors had just been closed. MOI
business interests in the city we're
disturbed, compromised or embar-
raised in any manner.
"The committee came in contact
with great many of the people who |
had money on deposit in the bank, |
some Of. whom appeared before the
committee, and all gave expression to !
the sentiment that they were in no
e.
that they knew it was safe and that
they would call for it after the rush
was over"
A tabulated statement of the growth
of Oklahoma banks, state and national,
is given, covering a period of four
and an analysis of the state
ment indicates that the total deposits
of the state of Oklahoma, during the
time, increased 1873 per cent. in both
state and national banks; that the in.
crease in state banks, during that
time, was 1877 per cent, while the loss
in national banks was One-ha1f of one
9r cent; that during the period the
capital of both state and national
banks increased approximately 10 per
cent, and the increased capital stock
in state banks was rs per cent, while
the decrease in stock of national banks
was 20 per cent. February %, 1908,
the capital stock in the state banks,
was 80 per cent. of their deposits, and
on February II, 1908, the capital
stock Of National banks was also 90
Der cent. of their deposits. On June
Is, 1909, the capital stock of the state
banks was "a per cent. of their de-
posits, while the capital stock OF ma
tional banks, was 251a per cent. of
their deposits.
The Oklahoma guaranty law went
into effect February IA, 1908, since
which time 165 state banks have been
chartered, 70 of which were CONVEX
sions Of national banks, with $780,
10000 capital
Clearing House Association.
THE suggestion was made to this
by a number of bankers,
that country clearing house associa-
tons could be established for that
purpose with equally as good results,
and it may be said that a number OF
prominent bankers have written pa
pers on this subject in which the po-
sftiOp is taken that the country clear
ing house association may be success
fully formed and conducted and that I
ii viii serve very useful purpose,
not so much for the purpose of afford