The Falls City tribune., 1911-01-20

countants, and two by directors finan-
cially interested in the good manage
ment of the bank.
In addition to these examinations
the state banking board requires ev-
cry bank in the state to make four
statements each year, to be published
in some paper of general circulation
in the county in which the bank is
located, which reports give a detailed
statement of the condition of the ban
1t is thought by many financiers
that the observance of these r~estric-
tons will make all banks doing bust
ness under the guaranty deposit law
absolutely safe and render such a
thing as the failure of a state bank
impossible.
But in addition to these restrictions,
which are intended to safeguard the
BUSINESS of banking, and to make all
banks absolutely safe beyond any
question, a guaranty fund has been
established.
All banks are required to pay into
a fund one-fourth of 1 per cent of
their deposits each 6 months until l
per cent has been so paid in. After
that has been done all banks are re-
quired to pay into such fund one
twentieth of 1 per cent of their de-
posits each year. The state banking
board has the authority to make a
levy of 9 per cent upon the deposits
of the banks in any one year.
This money is to be left in the
banks paying the same, and can only
be used by the state banking board
for the purpose of paying deposits of
failed banks, and is a preferred claim.
Experience teaches that one-twenti-
eth of l per cent of all the deposits
in all the banks will pay all the de-
posits of the banks that have failed
in any one year. This is the expert
ence of many years, where banks are
operating under the usual laws of
banking.
In Nebraska, one-forty-seyenth of l
per cent of the deposits in the state
banks would have paid all losses
which have occurred in 8 years.
Hence it is thought, that with a
start of 1 per cent of the deposits
paid in. and a future payment each
year of on%e-twentieth of / per cent
with the added power of a levy of 2
per cent in any one year it will make
the banks safe in the worst panic
which could ever occur.
But behind this the depositor has a
security the assets of the bank, and
the double liability upon the stock
holders and if he has the property it
can be collected from him.
Should it appear to the state bank
ing board from the examination of tn
examiners, or directors, or the re-
ports of the bank, that the bank is
conducting its business in an unsafe
or unauthorized manner the state
banking board shall communicate the
same to the attorney general, who
shall make application to the proper
court asking for a receiver to be APP
pointed.
Upon the appointment of a receiver
he shall give notice to all the credit
ors of the bank within 10 days to
come in and have their accounts veri-
fled. He will proceed to collect the
notes and assets of the bank, and II
at the end of 60 days he has not coli
lected enough to pay all the deposits
of the bank, the state banking board
will pay them from the guaranty de
post fund, and the receiver will ON
tinde to collect the notes and ac-
counts of the bank, and as fast as CO..
lected will pay itback into the guar
ranty fund thus replacing what had
been WITHDRAWN from it.
Heavy penalties result from the
violation q any of the provisions O.
this law.