The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-07-17
HOPKINS IS AGAINST RULING
He Says 1t Violates Spirit and
Letter of the Law.
Walter l.. Payne Gives Reason
for the Ruling.


with the state treasury in lieu OF de-
posts Of state funds with Kansas
banks shall be accepted only at mar
ket value quotations. That is the rul-
ing of the state treasury board which
by its action discounts the govern
ment securities.
The new ruling of the state board
threatens to arouse a big protest from
Kansas banks. What Is more the ac-
ton Of the board is unofficially held
by r. J. Hopkins, attorney general. TO
be in violation of the letter and spirit
Of the law. The course OF the state is
also counter to government requests to
aid in stabilizing these securities.
Action was taken by the board. ac-
cording to Walter L. Payne, state
treasurer in an effort to insure pro-
lection Of all funds in event a bank is
closed and securities are sold on the
open market.
seldom Get Maximum
Kansas bankers, however. declare
they rarely receive funds equal to
state allotment and securities on de-
pOsit. Under the law a bank which
may be designated a state depository
for stated sum is required to de-
post government, state or Kansas
mum cipal bonds equal to the maxi
mum allotment. Seldom. II ever. has
a Kansas bank received the maximum
apportionment Of funds. altho IL de-
posts securities for this>amount
II the new ruling OF the treasury
board Is enforced, IL VIII affect all
banks bidding for state funds at the
apportionment September 8. The or
der will require banks to deposit face
value securities in excess of their al
lotmcut or to offer bonds other than
government Liberty and Victory is
sue
The action was taken by the
boatd to protect the state in event II
vas forced to sell securities offered
~ a bank in lieu of deposits" said
tate Treasurer Payne. by accept
the state talSea the securities at the
price which would be paid for bonds
bought over the counter"
n letter which r. ]. Hopkins,
attc v1ry general, has written 10 a
Topeka banker, he stated that the
bonds at less than face value had not
bcan presented to him. He indicated,
tho. that ~ called upon to rule, he
would doubtless hold that il Liberty
arf Victory issues are accepted as
F-"';~ity by the state. such acceptance
must be at face value
What tho Law Says
Section 1O059 of the General stat
utcs Of 1915 recites that bonds de-
ported by banks in lieu of state de-
posts. shall be at the face value of
the apportionment of the bank. The
section covering this phase reads;
Each bank designated as a de-
pOsitory shall, as security for
the faithful performance of its duties
under this act. deposit with the state
treasurer, before any funds shall be
deposited therein bonds of the United
States. Of the state of Kansas. or of
some county, school district or munic-
ipality Of the state. equal in amount
and face value to the amount of funds
TO be deposited with such depository;
either in money, drafts. warrants
orders, checks, or certificates of de-
post, be in excess Of the face value
Of the bonds deposited"
Notices of the ruling, which many
state and national bankers feel is
contrary to the law, have been mailed
to all state repositories Members of
the board include: Henry J. Allen.
governor; /. !. Pettijohn. secretary of
state; and Fred w. Knapp, state
auditor.
Recently the State Journal assured
r. J. Hopkins, attorney general. that
this paper would commend his actions
when commendation seemed due and
would critic'se his actions when his Of
fetal conduct seemed to merit criti-
eism. While Mr. Hopkins has not
given an official opinion. his position
seems to warrant general commeada-
ton; Is in accord with the letter and
spirit OF the law and support of a
general policy TO stabilize government
securities. So far known the state has
never accepted bonds for state deposits
at less than face value And It is
within the time Of this generation
when Kansas accepted local bonds as
securities when the bonds not only
could not command face value. but
caused agents to wear out much good
shoe leather in trying TO market them