Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-12-06
BANK GUARANTY
LAW IN KANSAS
INSPIRES FAITH
Commissioner Says 1t Has
Done More Than Any
Other Agency to Create
Confidence in Business.


done more than any other agenc
to build confidence in state bank
| of Kansas and the six other state
which have n similar law, Waite
T.. Wilson. state bank commission
er, in a statement issued today an
nounced that 679 out OF the I'LL
state banks in Kansas are nov
/ members.
/ On September 1, 1920. he said
deposits in guaranteed state bank
amounted to $218,679 and il
unguaranteed banks to S88,832, 13S
on November l of this year tn
total assets of the guaranty funt
with the state treasurer were 81,
553,20S.53.
1.-THE guaranty law, now actual,
! at work in seven of our states, ha
proved beyond doubt that the Law
| is practical and that its benefits
are Unreasonable" said Commits
sioner Wilson. THE pioneer statei
! have blaZed the trail and most o
| the other states are considering
the law with a view to early enact
ment
| II contend that the law is found
| ed on principles of equity and JUS
| tice and that it is worth n place
among the very important laws Of
our country. 1t helps to prevent
pancs and economics upheava
| through the esta blishment of per.
manent confidence in our banks
and financial system, Lack of con.
fidenCe is the cause of panics and
the guaranty law provides security
more tangible than confidence
No Runs" on Other Banks,
"When a guaranteed bank fails
little concern is felt and the bust
ness world goes calmly on its way
There are no runs on other banks
There is no undermining of bust
ness through loss of large amounts
of capital Depositors know that
they will get 100 cents on every
dollar they have put in. Thousands
of dollars which formerly found
security in hidden places or have
been sent TO Europe for safety by
Americans of foreign birth are
now passing through the various
channels of trade and industry.
''As our state increased in popu-
lation, wealth and education, bank
failures will be of less frequency.
but an occasional failure is as in
evitable as the rotation of the
earth. For as long as our financial
system is the product of human
endeavor, just so long will we have
among us dishonesty and fraud,
and no one has ever discovered a
preventative. This IS the funda-
mental reason for the bank deposit
tors guaranty law"
Although the bank commissioner
of Kansas as early as 1899 outlined
in detail and recommended to a
passage of a guaranty law, it failed
of enactment by two votes and it
was not until 1909 that Kansas
with Nebraska, South Dakota and
Texas, passed guaranty law, n
year after the first law was passed
in Oklahoma. In 1908. 40S banks
became members under the Kansas
law. The annual assessments In
1912 amounted 70 S23,116. This
has been gradually increased until
in 1919 the amount reached $751;
379.
''Of course. under n voluntary
law MS in Kansas" said
Mr.. Wilson, mot all the state banks
take advantage of the law. The
more progressive banker, who
keeps his bank up to standard and
can easily pass the examination
to be admitted. is anx-
ious to have his bank guaranteed,
for he wishes to take advantage of
the increased volume of business,
the dignity and prestige, and the
atmosphere of satisfaction which
comes to his bank through the
guaranty law. But in spite of the
among the bankers
against the law. the bitter fight
that has been waged against 1t in
the courts and the large number
of those under the guaranty law
failing TO make the most of their
the Kansas member
ship has made remarkable
growth.
Law Has Some Opponents.
ppltlt Va Nlit 'fPttINIllS OI tue
law insist that the law is unjust
because a conservative and honest
banker has to contribute to\ the
guaranty of the Incompetent, dis
honest and reckless. II this is UNI
lust then all insurance Of any sort
IS unjust. for this is true of all
forms of protection of life or prop
arty.
THE very fact that the banker
for protection gives
lim q powerful motive for prevent
ng mismanagcment in any bank
he operations of which are known
10 him: for bankers are the first
,nes to know when one of their
lock is astray. In this way the
law takes the RESPONSE
,ility from the depositors. who
lnow nothing of the inside opera
ions of the bankers, and places It
where 1t belongs-upon the bank
RS themselves. who then have a
'ital interest in preventing bank
ailures They set to work to weed
tut the poor banker: they see to it,
Is far as possible. that officers of
nfallible character. reputation,
and sound business abil-
ty are chosen.
perhaps one of the most direct
md important advantages of the
aw is its ability to prevent indi-
,idual suffering and distress. When
nen and women toll. save and ac-
.umulate a few dollars which rep
esent the earnings of a lifetime.
/ should be the paramount duty
# the state and nation to protect
hose savings by providing a safe
,lace for them without loss or de-
,reciation in value. The guaranty
aw fills this need