The Kadoka press and Kadoka reporter. [volume] (Kadoka, S.D.) 1910-1923, 1915-10-01
Guaranty Law
Is Supreme

opportunity to present their objec-
tlons to the order requiring state
banks to keep fifty per cent of their
reserve in state banks within the
state the stale banking department
stands by its ruling, which is nov
in effect, and which the state banks
are required to comply with on or
before the fifteenth day of Novem-
Der next.
The department gives among the
reasons for the order an insistence
upon compliance, several reasons,
among them: The prime object OF
the ruling is to throw about the
banks every safeguard possible with
a view of ultimately eliminating
bar k failures among the state banks
in South Dakota. This result is
expected to be accomplished in part
by reason of the fact that if 50 per
cent of the reserve of the state
banks is required to be kept with
banks in South Dakota, the public
examiner will have knowledge of
the condition existing in both the
depositing and the depository banks
and accordingly may take such
steps or such percaution in the in
terest OF the depositing banks as
the conditions may warrant.
"A second principal object Of the
rulings is to require the actual de-
posits and money, bringing to the
citizens of the state to be deposited
within depositaries or reserve agent
banks within South Dakota, and
as result the aggregate deposits
of the state will be increased and
accordingly the loaning capacity OF
the banks in the state will be in
creased in the same proportion.
Since we have a Depositors
Guaranty Law it is essential that
every avenue of protection be used
for the protection of bank deposits
and thus make failures impossible
and eventually as result, invite
or entce hundreds Of thousands or
even millions of dollars from Sc
clusion or dormant places, either
in this state or other states, into
the banks of South Dakota"
Thirty five of the larger banks
of the state have no deposits OF re-
serve in either state or national
banks in the state of South Dakota.
Two hundred seventy-six state
banks in South Dakota have no
state bank depository within South
Dakota.
"Sixty-two banks have reserves
slightly under 20 per cent of their
deposits.
One hundred sixty-two banks
have more than so per cent of their
current reserve outside of South
Dakota.
Under the ruling 4o3 banks
would be required to readiust their
reserve accounts and as a result
there would be returned to state
bank repositories in South Dakota
s., ,5oS, 334. This adjustment would
increase the loaning capacity of the
state banks at the minimum figure
* per cent of the above amount or
So, $50. 900. The loaning capacity
would be further increased by re-
deposit of funds by any bank act
ing as a reserve agent for another
Ddnk, anu mus dS iCSuit vi tiC
return of the money from outside
repositories, the actual loaning ca
pacity would be increased 81, $780,,
600 and as additional $IS,75o for
each re-deposit of s25, 200.
"One result OF requiring 50, $685. :
334 of the reserve OF the state
banks returned to be deposited in
state banks within the state of
South Dakota, the deposit guaran-
ty fund would be increased ~ per
cent or $50, o75, which in fact is a
saving of this amount to the state
banks with the guaranty system.
South Dakota state banks are
depositing in large banks, in clear
49, ~.rxo~a -, tho. east e. rh OoC