The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-01-03
Attorneys for State Make Sem
sational Reply.
National Banks Recognize Guar
anty Principle Themselves.
CAUSE FOR DAMAGES.
Suit Might Result in Event of
Failure.
Case Will Be Taken to Highest
Court.

The attorneys for the state today
filed their answer to the demurrer of
the national banks in the guaranty
suit in which they entered general
| denial to all the allegations of the
| national banks. But this action on
the part of the states attorneys does
not necessarily mean that the state
will not at once appeal the case to
the higher courts. 1t is likely that
the state will fight the case through
Judge Pollock's federal court at the
same time that an appeal is taken on
the temporary injunction against the
enforcement of the guaranty law.
The appeal will likely be decided by
next July.
| 1t was necessary 20 file an answer
to the demurrer upon which the case
was decided by Judge Pollock. The
attorneys for the state, in order to get
a hearing in the federal court, admit
ted all the allegations of the national
banks to the effect that the operation
of the guaranty law would put the
national banks out of business.
Now, everybody in Kansas knows"
said Judge G.. H. Buckman of Win
field, one of the states attorneys.
that such allegations are the silliest
/ kind of rot. The national bankers
have already organized a guaranty
system of their own and their busi-
! ness had not suffered to any extent
| by the operations of the guaranty law
as applied through the state to state
banks. We were compelled to make
answer to the demurrer in Judge
Pollock's court or have the case go
up on appeal without having disputed
these allegations at all. We today in
our answer denied all these allega-
tions in specific detail We claim that
the guaranty law does; not in any
way discriminate against national
/ banks, but was drawn up to apply to
all the banks in the state that desired
to take part in it's benefits. A ruling
by a federal official kept the national
banks out of the association. not the
guaranty law.
I'VE claim the state right to control
its own corporations. We claim that
/ the national banks are not in danger
Of having to close sNheir doors.
About the status ,-Rof the state
banks now in the guaranty associa-
ton? Well. as understand it. these
banks may stay in the association un-
til the case is finally decided. by the
commissioner, under the terms of the
temporary injunction, will not be al
lowed to levy any further assessments
to add to the guaranty fund. And ]
believe that it is for that reason that
Judge Pollock required the national
banks to- put up a bond of $4,000
pending the final settlement of the
case. This $4,000 bond is tG safe
guard the guaranty fund which the
action of the national banks has
1stopped the bank commissioner from
building up.
'It is my opinion that in case of the
failure of big bank now a member
of the guaranty association, we would
have a cause for action against the
: national banks and their bond in order
to insure guaranteed depositors from
!, loss as result of this failure. The
: national banks have by their action
, stopped the building up of a guaranty
fund. If the guaranty law is held tt
. be good in the court of last resort
the national as well as the state banks
! of Kansas will therefore have to stan6
behind the guaranty law during the
term of it's test in the courts.
There is no doubt but the attorneys
for the state expect to appeal the case
to the higher courts as soon as theil
answer to the national bankers de
murrer is filed and becomes a part O.
the case. Then the higher court will
have both the allegations and the an
swer to consider instead of just th'
will be fought through the fedora
court depends entirely upon Judg'
Pollock's ruling on the answer filel
y today. 1t may be that the state viii
submit evidence to bear out its an
swer to the national bankers. In tina
: case the complete trial of the cas-
: could later be appealed, as we'll tn
+ appeal on the temporary injunction.
The attorneys for the state appeared
T today to be as confident and deter
l mined as regards the guaranty Law
and its future as at any time sine
the law was passed last winter by tn
legislature