The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-03-18
STATE LIABILITY UNDER GUARANTY

STATE LIABILITY UNDER GUARANTY LAW
Tho Okmulscc democrat which has oven a
moro peculiar relation TO tho notorious bank
failure at Okmulgco than appears In its oftllia-
lion with tho democratic party aud tho state
house crew is seriously putting forward tho
suggestion that tho state Of Oklahomn--that Is
The taxpayora-ls "morally responsible ana leg
ally iiabo 10 depositors In dcfuuct state banks
TO tho amount Of their deposits"
since II Is quito evident that what this ok
mulgco paper proclaims with enthusiasm is "a
rlft I'm tho clouds which overcast tho country
hcrcabouts' IL IN fact nothing moro than n
carefully planned scheme to shit tho burden
from tho shoulders Of crooked bankers and
crooked politicians TO tho shoulders OF tho al
rcady soroly-prcssod Taxpayers ana cannot
permit tho suggestion TO go unchollcngcd, even
though II does have the quasi support OF tho
sato bankcrs association.
AIN a nutshell and reduced TO It's simplest dl-
molslons this proposition Is. that the bank
wrcckago caused by tho mnladmlnIsiatIon OF
tho dcposltors' guaranty law, totollug from six
to eight million dollars. Is TO be paid by lcgsla-
two appropriation, thus indicating the guar
nnty law and. ns we said above, shifting the
burden from tho bankers and politicians to tho
shoulders OF the helpless taxpayers.
In the editorial referred TO, much ls made OF
former decision Of Judge Bob williams when
no was on tho supreme court, wherein tho
guaranty law was upheld on the theory that tho
legislature In cnactng 1t exercised the same
power that permits II to levy taxes upon people
and property for the maintenance OF govern
mcnt. and the maintenance OF common schools
and educational institutions"
This decision Is seized on To set up the frame
work for justlfying a tax levy to pay tho de-
linqucnclcs In tho state banking department.
The World submits that such solution of tho
banking problem would be injustice to the
people which should never be thought of It
Ia not true that tho state OF Oklahoma is
either morally or legally responsible for the
losses which dcposltors have suffered unless It
he on tho theory that the crmlnalty OF the
agent constitutes an actlonabo offcnso against
the principal. And even then, the action should
bo against tho bondsmcn and private property
OF every state official having to do with the
banking department, not overlooking the state
banking board itself; for tho state banking
board, composed OF private bankers, under the
law Is supposed TO he In fact tho supreme
authority with respect to the administration OF
tho guaranty law.
Tho existing law makes 1t clear that the
state does not guarantee deposits, This has
been set out so many times and so many ways
that Ignorance on the subject II without ex-
cuso. State bankers since tho last amendments
to the guaranty law. have been forbidden to
carry In their advertisements tho line, Deposits
guaranteed by tho state OF oklahoma" The law
only creates a limited fund for the satisfaction
OF depositors unfortunate enough to be caught
IN a state bank failure, ana specifically limits
tho assessment to be made against state banks
in any ono year.
The part the state plays I'm the enforcement
Of this law Is as clearly set out. II ia obligated
to exert a strict supervision over state banks
and to SEQ that tho provisions OF tho law are
compiled with. And, merely by way OF passing,
It may be said that the sole trouble arises be-
cause the functions assigned tho state have not
been properly dischargcdi that had the state
officials vigorously performed their duties in
an honorable and efficient manner bank fall
urcs would have been In fact as scarce in this
state as the guaranty law anticipated In theory
they would bo II there had been failures at
an they would have been so few. and firmly
controlled, that the resources OF the guaranty
system would have been easily capable OF lqul-
dating them according TO the terms OF the act.
We say again, II Is wcll-nlgh criminal to
even think OF passing this huge inlQulty on 20
tho sorcly-prossod taxpayers OF this state, and
only thoroughly desperate and cousclcnceloss
cabal would think of doing so, 1t may be that
a moral responsibility ana lcga liability rests
against the state bankers to pay tho depositors
in failed banks their losses. We say this in
view OF the fact that the law WAS set up to give
state bankers protection, that It designed
in such manner to give them instant and
intimate knowledge of its administration, and
when their interests demanded IT, either con-
troll Of that administration or the means OF lay
ing their failure to control before tho public In
such manner as would force the officials tc
tread the path Of rectltude and honor
1t requires no additional evidence to thor
oughly prove that the state bankers themselves