, 1925-01-17
More Conclusions


1t is needless to review the situation in South
Dakota. Suffice it to say that Minnesota and
North Dakota bankers and officials consider the
condition of the guaranty fund of that state 10
be as bad, if not much worse, than that of North
Dakota. Political manipulation and control OF
funds have brought chaos and many years will be
required, perhaps, to straighten out the Difficult
ties of that state. That depositors cannot be pro
tected under the law is conceded on all sides and
no hope held out for their relief.
ANY changes in Wyoming's banking legislation,
must be framed with a due consideration of the
conditions resulting from the operation of the
banking laws in midwest states and with a reeog'
milton of the vital relations between the banking
profession and the. entire industrial structure of
the state. 1t is also apparent that what may APP
pear as a solution of financial problems, may
prove only temporary relief, and in the end, bring
disaster 10 all concerned.
The outstanding facts connected with the oper'
alton of a law designed to prevent bank failures,
and losses TO the depositors OF a failed bank, are
the same wherever tried, Such a law has encour-
aged unsound banking, has placed a premium
upon crookedness and graft in the banking bust
ness, and has misled the depositor, in the matter
OF the safety of his or her deposits. The deposit
tors exercised little or no care, in the selection Of
their depository and labored under the mistaken
idea that the state had guaranteed their deposit,
The results were inevitable. When depression
came and reverses were encountered, greater dis
tress and loss were occasioned among depositors
and the financial structure of the states operat'
ing under such laws were called upon to undergo
greater strains than otherwise would have oc-
Cured without such laws.
While Nebraska, Kansas and Texas have 50
far avoided the collapse of their guaranty fund
law, there are certain economic conditions Dor
dering ON financial manipulations in a sense
which have made this possible conditions which
do not exist in or are not comparable with the
situation in Wyoming.
In Oklahoma, North Dakota and South Da.
kota, however, the misnomered guaranty law has
so weakened the financial institutions of the
state, and has so failed to maintain public conf.
dence in the ability of the law to guarantee, that
the banking and financial situations in these
states are found by consensus Of opinion TO be In
a worse condition than they would have been
without such laws, and depositnrs believing tho
guaranty law would guarantee their deposits
have occasiened greater losses than would have
otherwise been the case had they recognized the
tTIpT diN AalihFN w WIN VI NhNn lVBlcidhionf 70
pecially In times Of stress,
From the Information gathered 1t is the ppip.
ion that once the facts regarding the experiences
of our sister states, North and South Dakota and
Washington become generally known, the passage
of a Bank Guaranty law IN the state of Wyoming
would have "A most disastrous effect upon our
state banks by the destruction Of confidence in
the state banking system.
1t Is 4 desired TO call attention TO the certain fail.
ure OF a bank guaranty law in Wyoming, even
though II were possible to make such a law work.
able in more stable states Of larger population.
There is cnly one matter on which all state
officials and bankers have unanimously agreed,
Without exception these men have omphatically
expressed the opinion that the supervision OF
state banks and the enforcement Of banking laws
must be removed as far as possible from political
influences and interference. That. adequate super.
vision Is the "kernel Of the nut is unquestion.
ably true.
Strenuous efforts ARE being put forth in all
states 70 mako IL possible to avoid failures and
thus accomplish. the real purpose of all banking,
While every stata referred to has n banking
commission composed Of state bankers, most OF
Them still permit the appointment OF the superln.
tendent of banks by their governors, who, il is
generally admitted, rarely make wise selections.
The laws of these states do not grant sufficient
supervisory powers TO banking commissions. II
is claimed by all best informed mon that more
rigid enforcement Of the banking laws by super
intendents and commissions clothed with broad
discretionary power would SO vastly improve con