The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-01-16
Bergen Senate Bill Provides
State Reserve System.
Institutions Would Join or Lose
Their Charters.
LIKE THE FEDERAL RESERVE
Would Keep Kansas Money in
Kansas, Says Author.
To Establish Banks in Cities of
More Than 10000.

Kansas state banks that are not en- !
joying the privileges and advantages
os the federal reserve banking system
will have a reserve bank system of /
their own if a bill to be introduced
in the senate by Bergen, of Marshall,
becomes a law. Not only will they en-
joy these privileges, but the state
banks that are members of the fed
eral system will also be required to
make use of them or lose their char
ters.
The state reserve bank bill, accord
ing to its author and sponsors, is
modelled after the federal reserve law
and is intended to give relief to the
small state institutions that do not
have large enough capital stocks to
belong to the federal reserve Also,
one of its purposes will be to keep
Kansas money in Kansas, they assert
Contrary to the general belief. there
may not be one big state reserve
bank located in the apital city thru
which all business shall be handed.
| but, the system will be opera ted under
| the supervision of the state bank COM
| missioner, and state reserve banks
may be esta blished in any city that
has a population of not less than 40,-
| 900 habitants-which means that re-
serve banks may be eSta blished only
| in Topeka, Wichita and Kansas City,
| Kansas.
The State Reserve Plan.
Here is the way the new system will
| be put into operation if the legisla-
| ture deems it financial scheme wor-
| thy of adoption:
! Upon petition of not less than ten
state banks, including trust companies,
with a total capital and surplus of not
| less than one million dollars, the state
| bank commissioner shall at once ap-
| sta tn hal l<ar of xzrf7A
! owns stock in other than state banks
| and trust companies, who, with the
| bank commissioner, as chairman, shall
constitute committee to be known
as the state reserve bank organiza,
tion committee. This committee shall
serve until the organization work has
been completed.
4 The organization committee will
designate the city. or cities. of not
less than 10000, to be known as state
reserve bank cities. If more than one
city is named each shall have fixed
geographical boundaries.
Every state bank and trust company
within the district so designated will
be authorized and required within
, thirty days after notification to SUBJ
scribe to the capital of its state re
serve bank per cent of it's paid cap
ital and surplus. This money will be
paid to the state treasurer who will
turn it over to the reserve bank as
soon as it is ready for business.
Banks Must Join.
IF any state bank fails to become a
member of the state federal reserve
: system within one year it will lose its
franchise and all rights to do business
upon order of the state bank commits
sioner.
Each state reserve bank will be
governed by a board of thirteen direc-
tors, with the state bank commissioner
! n oh No hi
; district will have eight SUBJ districts
and each sub-district shall have reg
ularly prescribed organizat ton with
officers elected by the banks in the
sub district The directors of the sub.
districts will meet and elect four di-
= rectors at large for the reserve distric
1 bank. Directors will be paid theil
t actual expenses and nothing more.
The bill provides that the state re
: serve banks and their stocks and in
1 comes shall be exempt from taxation
= by state, county and local officials.
The state treasurer will be required
to do all his business thru the reservt
, bank if the proposed bill becomes {
y law: 1t requires that all state fund
: be deposited in the state reserve bank
: and all payments by the state be mad,
= by checks drawn upon them.
!! The proposed reserve state bank il
= | required to pay a least per cent in
j terest on deposits, and at least 8 oI
deposits from the state treasury. Th
y state Is required to deposit all it
= moneys in the reserve bank or banks
/. How the Plan Works
e Semi-annuaIly 10 per- cent of tn
e net earnings of the state reserv
banks will go into a surplus fund un
It'll 90 per cent of the capital has thu
# been laid aside. One-third of tn
e balance of the net earnings will b
: turned over to the states general fun
IS as interest on state deposits and two
j. thirds to the stockholders as dividend:
!. If the one-third of profits turned owe
n to the state does not constitute an in
d terest of 3 per cent on daily balance
l. on state funds held. the dividends G
It Confined on Page TwoJ