Omaha daily bee., 1912-03-06
Nebraska
ROYSE SAYS BANKS DO WELL
Secretary of Banking Board Makes
Annual Report.
ONE FAILURE IN EIGHT YEARS
Finds Some Ambiguities In Guar
anty Law and Makes suggestions
where Legislature Might
Change Ii.
fFfom a staff Correspondent

CFfom a staff Correspondent
LINCOLN, March 5-tspecial Tele-
gram )-Secretary Royse OF the State
Banking bO&rd has just made his annual
report 10 the governor, and in Il. en-
bodies the bank statements OF the year
and in his view OF the same says that
the period has been one OF marked sue
cess for banks in spite OF the seperal
slowing down of general business.
Two banks are in the hands Of receiy'
ers. but the failures are old, there not
having been fasure In five years aud
only one in eight years. Tie calls atten.
ton TO some friction caused by the in
terpretations Of the new banking law
and which in some instances Is indefinite
leading TO arbitrary rulings. and In some
others TO litigation. He expresses the
hape that these ambiguous features may
be remedied by the next legislature.
Secretary Royse sites the conflict OF
the law regarding the guaranty fund. one
section Of which says IT shallNbe levied
on the average OF deposits exclusive Of
public money otherwise secured. and an
other which puts public deposits on the
same basis as private and secured by
the guaranty fund.
He says he has, under the decision OF
the courts which held banks need not
give security for public funds. ruled that
public deposits. shall be included with
private in computing the amount TO be
levied for the guaranty fund.
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Defect In Guaranty Law.
Mr.. Royse also calls attention to a pro-
vision for levying the guaranty fund for
new banks at the time OF organization,
and calls attention to the fact there Is
money II experience shows that the
amount originally set aside is in excess
Of the amount required TO meet the de-
mands OF the guaranty fund for such
bank. and asks that the Legislature rem
edy that defect. Another amendment sug-
gested is more clearly TO define what
shall be done with the guaranty fund OF
q bank which Voluntarily llquidates,
whether II shall be covered back into the
assets OF the bank when II ceases to par
ticipate in the guaranty or whether the
law means that when once placed In
that fund IT is permanently alienated from
the funds OF the bank 10 be drawn by
the state only for the purpose for which
il is levied. Mr.. Royse also suggests that
the law limiting the amount OF loans OF
a bank is too drastic and forces money
into the great money centers. He also
urges the passage OF a law defeated In
the last legislature giving the banking
board authority to refuse charter to
a bank where It is evident the commun-
ity in which It Is to be located already
has ample banking facilities.
Secretary Royse calls attention to what
he deems an Inconsistency in the law
which prohibits banks from paying more
than 6 per cent for deposits, while BUILD
ing and loan associations, competmg un'
der the Jurisdiction or the same board
for the money of.the people, are permitted
to pay any rate their'dircctors
deem fit. He says that either the limit
should be removed from the one or'piaced
on the other.