The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1914-12-17
|7lEF 4N|VT 9l .EI.. 1-F--Tl =. TO-. r ~
BANKING ACTS
UP FOR VOTE
GUARANTY FEATURES MEAS.
UREs TO BE SUBMITTED.

- L
million dollar bank guaranty fund
is what is proposed by the new bank
guaranty act, which has been drawn
by the committee of the state bank
ers association to be built up at the
of $150,000 per year until the
maximum is reached, after which no
assessments are to be made
until the fund is impaired. Banks
are to be limited to the interest rate
they may pay. and subject to exam
nation by a bank guaranty commits
sion before being allowed to come
the provisions Of the fund, and
at any time thereafter.
One bank guaranty act has al
ready been filed with the secretary of
state under the initiative provisions
of the constitution, designated as
the "Coffev bill' and another, the
bankers bill. will probably also be
filed, both to be voted upon at the
next election.
The main essential differences be-
tween the two guaranty acts, is In
the amount of the fund, and the
handling of the same. an the
"Coffey" act. the fund is to be paid
into the state treasury, and is to
start with an assessment of one per
cent of the deposits, and a continu-
ing assessment of two mills on the
dollar per year from that time on.
with the provisions of special assess
ments in case of need.
The bankers say that with deposits
in the state banks of practically six
ty million dollars this would create
an initial fund Of 100000 with an
annual addition of 100000, which
would be a greater burden than ne
cessary.
In their act, they fix the assess-
ment at one-fourth of n per cont
each year until the total sum equals
one and one half per cent of the de-
posts. or $15O.O0O as the lannual
assessment until Tho fund.- reaches
5000, 900, after which assessments
cease until impairments OF the fund
requires further assessments 10 keep
it at the maximum. This fund in-
stead of being paid to tho state, is
to be set aside in a special fund IN
the banks themselves, and made u
first lien upon the assets Of the atf-s
ferent institutions. All assessments
to be on the date of February H.
to begin the first OF that month In
1916.
Before banks are to be allowed
to take advantage of the guaranty
act. they must be subject to exam
nation by the bank guaranty com
mission, and are bound not to pay
to exceed five per cent on deposits.
In cas- of a failure the funds are
drawn from the guaranty accounts
and all depositors paid in full and
the assets of the failed bank are adj
ministered by the state banking de-
partment for the benefit of the
guaranty fund, into which all re-
ceipts from such bank are paid.
Banks which have complied with
the guaranty act. are not to be re-
ouired to furnish bonds to secure
deposits of public funds. ss
,''hl The administration of the fund Is
to be in the hands of a banksgnnran-
ty commission. of which the public
examiner is to be a member, who
with three others selected by the
governor, are to constitute The COM
mission. Directors of banks which
ha-e placed Themselves under the
:. act. are to recommend to the COVER
nor a list of anne for the positions
of members of the commission. and
he is to make his selection from the
4 list endorsed. If at anytime there
is not enough money in the guaranty
fund to meet losses, the Guaranty
Commission is empowered to issue
five per cent certificates against the
fund to be due on the first OF March
following their issue, which Is to
be covered by the assessment which
may be made February first iof each
!, year.
Any new bank organized which
desires to come under the law, will
be requird to pay into the fund q
, sum equal to four per cent of its
: capital stock, which will be used rs
!, the basis until the daily balances
, for the year on which the regular
assessment is based can be learned.
Tho act also carries a complete
: new banking code, which provides
!, for a state department of banking
!, and finance with the public examin'
: err to be appointed for four veal
v terms at a salary of $4,000 q veal
i and with power to select a deputy a
a a salary of $2,400 per year. Tn
! YER is to appoint three others
: as a part of the state board OF bank,
ing and finance, who shall be entitled
to expenses but no salary, such mem
bers to be appointed for terms run
ming concurrently with that OF tn.
governor who appoints them. Z
I paid attorney for the department II
' also provided for.
Under the present plans. II thu
people of South Dakota want a bani
. guaranty act, they can blame no ont
but themselves If they do not get Il
The so-called "Coffey guaranty act
was submitted through the inittativ'
d over a year ago, and will go upo!
r, the ballot for the people to vote up
2 on next November. The bank qua
anty act which has been framed 2:
the committee of the State Banker
. association, will be submitted TO IN
: legislature for their direct action
:. and will also go upon the bailos 2
= the election next fall, n It is Y
: to the voters to take their choice 9
= the two.