The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-06-03
Governor Thinks Legislature
VIII Remember Salina Crash.
Enact Statute To Prevent Loot
ing of Guaranty Fund.
LEFFERDINK STILL FREE Man
No Arrests Have Been Made by
the State Officials.
Receiver Has Not Yet Reported
Condition of Bank.

Banking reforms in Kansas as
result of disclosures surrounding the
failure of the Kansas State bank of
Salina, were predicted today by Gov.
Henry j. Allen. The governor as
serted that in his judgment the next
legislature will take steps to safeguard
against plunging and reckless finan-
cial exploits by spectators who are
| permitted to engage in the banking
business.
Conservative bankers as well as the
banking public will demand laws pre-
venting a wanton loot of the state
serted. He said that the evidence dis
closed in the Salina failure had
proven the wisdom of a prophecy by
| bankers who fought the guaranty act
ten years ago. Generally prosperous
| conditions in the state. the governor
said, doubtless have prevented similar
| cases. 1t is not the purpose of Gov
ernor Allen to destroy the guaranty
! act Rather he wants to safeguard
, the fund by restricting the operation
| of a certain class of bankers.
New Law Is Needed.
1.-THE Salina failure has presented a
| situation not foreseen by the state
legislature" said Governor Allen. "It
shows the absolute necessity of statu-
tory provisions which prohibit the
| campaign for funds by unscrupulous
| bankers. When a bunch of crooked
| spectators get control OF a bank and
| offer bonus for deposits under the
| argument that the depositor can lose
nothing since the bank funds are
guaranteed, it is high time for the
| legislature to take some action.
This situation has proven that in
one Instance, at least, the opponents
of the bank guaranty act were good
| prophets. Their argument was to the
| effect that unscrupulous bankers
| would take advantage of the fund.
| That is just the thing which seems to
have happened at Salina. The legisla-
ture never drea med that such wanton
practices would be engaged in
Big Bonus Reported Paid.
according to one report, H J. Lef-
ferednk, cashier of the defunct bank.
paid bonus for deposits in certa in
instances. One report is to the effect
that a $4,000 deposit was secured by
the assurance that a $4,000 bonus
would be given for use of the money
for a ninety-day period. The depos-
itor was then assured that he could
not suffer loss since the deposits of
the bank were guaranteed. This de-
posit is said to have been secured but
a few days before tn state bank COM
missioner closed the doors of the in
stitution.
While no staten ,nt was made to
that effect today, it is quite certain
that Governor Allen will recommend
to the next legislature several decided
changes in the present bank guaranty
law. The governor is continuing his
investigation of the bank failure. He
declined to make q statement today as
to the policy of the state banking de-
partment in failing to order an earlier
closing of the bank.
Lefferdink Is Still Free.
Walter T.. Wilson. state bank COM
missioner, and R. J. Hopkins, attor-
ney general, were today in conference
with w. H. Litowich of Salina. an at
torney for the receiver. Wilson stat
ed that the receiver had not COM
pleted his check of the assets and liza
!, bilities of the bank. Nothing has beer
heard this year from Felix Broeker
alleged to have been associated with
Cashier Lefferdink in his financia
operations. Lefferdink is still a free
man. He left Salina the day before
: the bank was closed and after a war.
rant for his arrest is said to have
been placed in the hands of the Saline
county sheriff. No other arrests il
connection with the failure have beer
ordered.