11
THE CHICAGO BANKER
August 2Ç, 1908}
The Girard National Bank
Of Philadelphia
Capital,	$ 2,000,000.00
Surplus and Profits,	3,650,000.00
Deposits,		28,500,000.00
FRANCIS B. REEVES, RICHARD L. AUSTIN Vice-President THE0. E. WIEDERSHEIM Second Vice-President	President JOSEPH WAYNE, Jr. Cashier CHARLES M.ASHTON Asst. Cashier
Accounts of Merchants, Individuals, Banks, and Bankers Received on Favorable Terms
FOURTH STREET NATIONAL BANK
OF PHILADELPHIA, PA.
Capital ...	$3,000,000.00
Surplus and Profits 5,900,000.00 ־
UNEXCELLED COLLECTION FACILITIES CORRESPONDENCE INVITED
R. H. RUSHTON, President	E. F. SHANBACKER, 1st Vice-President
B. M. FAIRES, 2nd Vice-President
R. J. CLARK, Cashier	W. A. BULKLEY, Assistant Cashier
FRANK G. ROGERS, Manager Foreign Exchange Department
Is the Oklahoma Guaranty Law Seriously Defective
for a state charter for a savings bank, which would be managed in conjunction with the national bank. Depositors could choose in the same institution between the national bank and the state savings bank.
It was stated recently by a national banker that he believes the plan would not be prohibited by either the Comptroller of the Currency or the state banking board, as each bank would be maintained separately from the other. He said that in several Eastern states national banks were owners of state savings banks.
As above stated, the Guthrie National has already taken advantage of this plan by securing a state charter for the Security Savings Bank, with $25,000 capital stock, to be operated bv the same officers and stockholders as the national bank. U. C. Guss is president of both institutions and Robert Sohlberg cashier. They will be operated in the same building.
Lieut.-Gov. Bellamy, who is president of the i-tate banking board, is authority for the statement that the board has received letters from twenty-six of the fifty-seven national banks that complied with the state law advising that the}r would not give up the state law’s benefits and that unless they were able to buy out the state banks of their towns they would surrender their federal charters and become state institutions. The only bank thus far to take such action, however, was the First National of Duncan, in Stephens County, which is capitalized at $50,000 and has $25,000 surplus.
Bankers and promoters have been informed that the benefits of the Oklahoma guaranty deposit law cannot be extended over banking-institutions outside the state. President C. F. Elerick, of the First State Bank of Oklahoma City, had contemplated organizing a string of banks, locating one of them at Parsons, Kan., and guarantee the deposits there under the Oklahoma law. In his letter to Mr. Elerick Lieut.-Gov. Bellamy says :
“Under the present law it is impossible for the protection of the guaranty fund to extend outside of the state, except to deposits of Oklahoma banks.” In discussing this ruling Mr. Elerick says this probably will put an end to his Parsons project, and that the proposed Parsons bank will be located at Nowata, in the Oklahoma oil fields.
then make such assessment as may be needed to cover losses.
An amendment which bankers believe should be made to the present state guaranty law is one that will provide that at least two bankers of several years’ experience be designated as members of the board. At the present time the law simply provides that certain state officials, including the chairman of the state board of agriculture, compose the state banking board. It happens, by accident, that both Lieut.-Gov. George \V. Bellamy and State Treasurer James Menefee, members of the board, are bankers, but the next election might put farmers in as state treasurer and lieutenant-governor, and there would be no bankers whatever on the banking board. It is suggested that it is just as important that bankers be on the banking board as that farmers be on the board of agriculture and physicians on the board of health.
During the legislature, however, William H. Murray, speaker of the house, argued against bankers' being placed on the state banking board, although he personally led a demonstration for the purpose of forcing a provision for a farmer on the state board of health. At the present time, in fact, the state bank commissioner, who must be an experienced banker, is not a member of the banking-board, although from experience, he would make a valuable member.
Avoid Conflict with Law
Among the fifty-seven national banks in Oklahoma that had complied with the provisions of the state’s guaranty deposit law (and for this privilege these national banks paid into the guaranty fund $60,000), there are a number which are reluctant to lose such advantages as the guaranty law has given them prior to the time that Attorney-General Bonaparte held that national banks cannot comply with the state law excepting upon the forfeiture of national charters.
A new plan is contemplated, therefore, ana. in fact, has been put into operation by the Guthrie National of Guthrie, whereby conflict with both the Comptroller of the Currency and the state banking board may be evaded, by using the state guaranty law as an adjunct to national banks. Such national banks as might want to pursue this plan, would apply
Guthrie, Okla., August 27.—To make certain that the state’s guaranty deposit fund is safely and properly invested or deposited, so that in case of panics or of several banks failing in succession, the fund will be immediately available, the bankers of the state are discussing methods which will insure its safety. At the present time the fund is being deposited by the state officials in state warrants, which drew 3 per cent interest. The fund, as rapidly as collected, is deposited with the state treasurer, who is under bond for its safekeeping.
It is maintained, however, that the state, in time of panic, when it would be absolutely necessary to have the guaranty fund ready and available, will find itself loaded up with state warrants, a form of security that is good and acceptable here, but which would find no sale whatever on the market unless at a great discount during panicky times.
“The majority of banks fail,” said one prominent banker recently׳-, “for the reason that they are not able to realize upon their assets. The state warrants, in case the guaranty fund is invested in them, would become an asset of the state, and in time of need the state would find itself, as do banks, unable to realize upon such an asset. As a result the guaranty fund would amount to nil, and there would be no money to defray bank losses.”
It is suggested by a banker who has studied this phase of the question for some time that the guaranty fund should be deposited in the banks from which it is collected, all banks, of course, being protected under the state law. Whatever amount is collected from a bank should be immediately deposited with that bank in the form of certificates of deposit, drawing 3 per cent interest, and always subject to call. Let the banks carry the guaranty fund as part of their assets until used, then check it off. It is maintained that in this way the guaranty fund would always be safely deposited and available in time of need.
A Million Dollar Fund
It is also suggested that in creating the guaranty fund, instead of making a levy of t per cent on the average daily deposits, as is now the method in Oklahoma, the assessment on each bank should be one-tenth of 1 per cent until a fund is obtained aggregating $1,000,000,