The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-03-24
DOlIey Shows Advantages of
Kansas Guaranty Scheme.
st. Louis Capitalists Organize
Concern to Guarantee Deposits.
IN PROFITS, 100000.
Charge $3.50 for Each 500, OOC
i'm Bank Vaults.
Bankers Sheer at State Plan
But Praise Private One.

Oou AOA kCAOOA az k0OdO0 16M
But Praise Private One.
You know banks must give securi-
| ty for government deposits and an in
| dividual is certainly entitled to equal
protection write banker who is pro-
| bank deposits. Commenting on this
| frank statement J. N Dolley, state
bank commissioner. today made a
blackboard talk on the practical and
primary principles of bank guaranty
| and made it apply to the credit of the
Kansas idea of state guaranty.
The guaranty of deposits has now
come to be a part of the plan of the
banking world said Mr.. Dolley, "Just
the same as the electric burglar alarm
| and the new methods of bookkeeping
and the adding machine and the i'm
proved system of exchange. The bank
erS of Kansas CITY. st. Louis and Chi
cago recognize this fact and are max
ing arrangements accordingly and the
bankers farther east will have to fall
in line.
Ex-Governor David r. Francis, in
company with a number of big st.
Louis bankers, is organizing an insur-
aDce company to guaranty deposits and
they will charge one-fourth of 1 per
cent for this insurance. They have cap
italized at 2 millions of dollars and
will soon have a big company in ex-
istence doing an immense business at
80 per cent profit. One-fourth of 1 per
cent means $3.50 on the 100000. This
rev company is regarded as sane and
legitimate by the financial interests of
the west, yet the state of Kansas Of
fered to guarantee deposits at a charge
of only one-tWentieth of l per cent, or
about $50 on the 100000. The st. Louis
company Will have a private company
back of its guaranty. a company liable
to. disruption or disaster just as any
ether company in the business world is
liable. no matter how strong. The Kan
sas guaranty plan had the state of
Kansas back of it. surely a stronger
surety than any private corporation.
The Kansas plan cost the banker only
one-fifth as much as the private guar
anty company charges and gave better
security. Yet the Kansas plan is at
tackled ss being insane and unsafe.
Depositors Will Pay Cost.
Now in the end the depositor will
have to pay charge for insurance of
deposits A bank is conducted like a
must be figured inside of the selling
price-the rate of interest. 1t is the
average depositor who pays the fiddler.
The little fellow who either places his
savings on deposit or borrows money
from the bank with which to buy
home Or meet some obligation incurred
in his hard struggle for business sue
cess. These classes of depositorS and
and not the big fellows who make time
deposits at four per cent or who bor-
row large sums at a low rate of inter-
est for a short time only. So these lit
tie fellows are called upon to pay the
difference in the cost of insurance Of
deposits. Just a case Of back to the
ultimate consumer to get the money to
pay for all cost and carriage and all
expense. regular or irregular.
1T is claimed by this new Missouri
insurance company that government
certificates show percentage of loss for
3S years in the case of bank failures to
be less than one-twentieth of one per
cent This company is capitalized at
two millions and figures on 100000 per
year in fees for their guaranty of de-
posits. OF this sum they expect to
devote 100000 to payment of losses,
500 900 in payment of salaries and ex-
investment. 1 have figured all along
in connection with the Kansas guar
anty plan that one-twentieth of one per
cent would meet the losses from bank
failures and we based our Kansas
guaranty law on that fact. So instead
of realizing 100000 in fees from the
law we only charged one-twentieth of
one per cent for guaranty and realized
only 500, 900 for payment of losses. No
$780, 900 for salaries and no $500, 900 for
profits to be paid in the end by the
humble patrons of the banks. Remem-
Der the Missouri company proposes to
charge one-fourth of one per cent as
guaranty fees.
Public Demands Safety.
What is wrong with the Kansas
guaranty law as compared with this
big and reliable company of ST. Louis
bankers, who by the way, are organ
lied along the same lines as the Kan
sas insurance company promoted by
the national bankers of this state? The
guaranty of bank deposits is now a
condition that must be faced by the
banks and not a theory. 1t is demand
ed by the public, and the demands Of
the public are resistless. They must be
obeyed by the politicians and bankers
who are but servants of this great
patient public, after ALL
eff it is not wrong to offer private
company as guaranty, charging $500
on the 100000 that is guaranteed, l
then why should it be wrong to offer
the state of Kansas as guaranty,
charging only 500 on the 100000
guaranteed?
eff a bank is threatened with disas-
ter and it's depositors are lined UP in
front of that bank demanding their
money and a representative of a pri-
vate guaranty company appeared on
the steps of that bank and assured the
depositors that their money was safe,
how many would listen to him and
money in that bank? On the contrary,
if bank belonging to the state guar
anty association faced the same crisis
and the state bank commissioner ap
peared on the steps of that bank and
speaking to the people in his official
capacity, assured them that for every
dollar in that bank there was a dollar