The Mena weekly star., 1911-03-16
IOGAN FOR BANK
GUARANTEE Law
c,..;d,rs II The Only Real Ssfsgua.d
FOR D.positOrs. and Says Il Will
Bring Thousands Of Dollars
Into Circulation.

ssnatar John P. Logan, Chairman
ofthe Corporations Committee OF the
csnate to which committee all bank
;no bills are likely to be re erred, gives
ont the following statement;
II am opposed, unequivocally 70
the massage Of any banking bill which
does not carry with it the guaranty of
denosits. Speaking further, he says:
"WhiIe it is true that the examination
~ hanks. as is practiced by other
states and by the United States, is
some protection, at the same time it
il very little protection to the deposit
tor AS an evidence of this fact. in
every state where they have a bank
;n6law and banks are examined regu
larly. they have bank failures much
more often. perhaps, than they do in
Arkansas, and. Notwithstanding the
fact that the government of the Unit
cd States has a very strict examina.
tion law for all national banks, yet
national banks fail in all parts of the
country and when they do, there is no
protection for the deposition; in many
instances there have been failures of
national banks where the depositors
were paid but very small per cent.
But. with the guaranty clause attach
ed to the banking law, coupled with an
examination feature, should a bank
fail the depositors are fully protected.
and will receive every dollar of their
money. Not only that. but in my
judgment the guaranty clause will
bring thousands and thousands of dol
lars out of hiding and put it into circu-
lation.
"We, who live on the borders of Ok
lahoma and have had some experience
in the banking business. readily see
the benefit of the guaranty law. not
only in Oklahoma, but we are face to
face with the fact that much of the
Arkansas money is being deposited in
Oklahoma banks ON account of the
guaranty clause.
There is still another feature that
think the banks Of the state have
lost sight of, and that is this: BY in
vestieation find that all insurance
companies doing business in this state
are compelled to make bond. The
aggregate amount of these bonds, as
per statement received from the au-
ditor's Office is 81 500. 900. Every in
surance company pays some bonding
company premium Of from SIS TO
perhaps $3.50. according to the size Of
the bond, to make this bond for them
Nov. II we pass guaranty bank
ing law, and at the same time accom-
pany it with a law that will allow the
state auditor to accept the twelve
months time certificates of a guaran-
teed bank in lieu OF the bond made
by the bonding company, the result,
in my opinion. would be that instead
Of the insurance companies going to
the expense Of paying the bonding
companies to make the bond, they
would deposit the 81. 500. 900 in the
Arkansas banks at 4 per cent, taking
therefor the time certificates of the
different banks and deposit them with
the auditor for their bonds.
This would not only save them the
premium paid the bonding companies
but would put in circulation this large
amount Of money. which would con-
tinue and increase as the insurance
business Of the State increases. Not
only that, but with the Guaranty
Banking Law. the money now in the
state treasury and in the county treas
uries could all be put in circulation
and put at interest without any risk
whatever to the state or to the tax
payers.
In my judgement. ! don't think
there is any law that the present ses-
sion OF the legislature can pass that
would be of more vital interest to tax
payers of the state of Arkansas, and
especially to the small depositors,
as the guaranty banking law.