The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-01-16
A NEW BANK PLAN
Continued from Page one.)

Continued from Page One)
the stockholders will be reduced suf-
ficiently to insure the state 3 per cent
The bill gives the state reserve
| banks power to deal in certain bonds,
notes, securities and to issue and sell
bonds secured by first farmland mort
cages. Each bank will be required to
| keep a reserve of not less than 80 per
cent of it's demand deposits and Is
per cent of its time deposits, altho,
under certain conditions, the bank
| commissioner will be permitted to re-
duce this requirement.
| The bill states that any one or more
| of the state reserve banks may be-
| come a member of the federal reserve
| system.
| State bankers understand among
| themselves that a big reason for
this movement to create the reserve
thanks of the state of Kansas has been
created bya new, alleged Ubiquitous rul-
ing of the clearing house association of
the banks of Kansas City, Mo, by
which banks of this state are deprived
| of. or charged for, what the banker
| terms float Float" is the interest
on money represented by checks be-
| tween the time of the receipt of the
check by, for instance. the Kansas
| City, No, bank and the time when the
| check itself is actually paid at the
Kansas bank upon which it is drawn,
including the date on which the Kan
sas City bank receives notice of its
payment. This may be from two to
four days and the innumerable num-
Der of these checks, all of which have
been cashed Immediately by, say, the
Topeka or interior banker. makes this
loss of interest very large. Kansas
City banks formerly gave their Kan
sas bank correspondents immediate
credit for these checks, but not now;
hence the indignation against Kansas
City, Mo, banks and the effort for
relief and return in some measure to
former conditions by having a clearing
bank or bank in Kansas and under
Kansas control.
The particularly aggravating part of
this float" charge is the fact that the
Kansas City, Mo-, banks overcharge
for float" that is to say, if it takes
two days to collect and hear from a
check the K. c. banks charge for
three, if it takes three days, they
charge for four-the Kansas bankers
make this statement. that is say the
banks do that very thing.
OF course the shrewd Kansas bank
er avoids such penalizing. as he says
it is, by looking about him to save
this float" all of it. Some bankers
send their checks to st. Joseph,
some to a bank in Wichita and
quite a large number to the Kan
sas Reserve State bank, Topeka
which gives the state bankers doing
business with it full credit, without
charging any FLOAT" whatever, the
day such checks are received. This is
no secret and the Kansas Reserve in
vites this business and glories In It.
1t is a member of the Federal Reserve
system and it's deposits are all guaran-
teed under the guaranty law of the
state of Kansas. Strange to say, it is
the only state bank in Topeka in this
happy condition, but any state bank
in Topeka can go into the Federal Re
serve system, if it choose so to- do. on
exactly the same safeguarding con-
ditions that the Kansas Reserve of
Topeka complied with. to get this high
privilege and connection
Bankers in the senate and house |
l
provoke almost endless discussion and !
will merit and receive the utmost at |
tention and consideration. 1t is a rad
ical move and is sure to attract ma
tonal attention from the various |
states just as the Kansas )depositors' |
law under which bank deposits are
safeguarded and the blue sky law were
watched by and afterward adopted by
other states. The proposed measure is
a pace-setter and n adopted will
doubtless receive numerous changes
from the original draft or may be de-
feated as too radical banking limo
vation. The measure also receives a
decided impetus from the fact that
even the modified law of the federal
reserve system has not yet been made
generally acceptable to state banks
in SO much so that out of 1864
state banks of Kansas only seven in
he state are members of the federal
&c erve system, only one state bank in
Topeka, the Kansas Reserve State
bank, being affiliated with the great
FEDERAL system. Indeed as the federal
aw now stands over half the state
banks of Kansas are not entitled to
because, under the law,
hey. can not join if their capital is less
han $4,000.
Much opposition on the part of state
bankers has been developed to a bill
-lready introduced to create branch
ranks" in Kansas of Kansas City, Mo-,
,anks.
State bankers in Kansas are surely ,
worked up over conditions placed on
hem by Kansas City. Mo.