I Volume XX¡7ll
THE CHICAGO BANKER
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WE HAVE VALUABLE PAR POINTS also a large volume of items to be collected. Our collection facilities are excellent. Correspondence Invited The National City Bank of Chicago Capital, Surplus and Undivided Profits $2,000,000 OFFICERS David R. Forgan, President L. H. Grimme, Cashier Alfred L. Baker, Vice-Pres. F. A. Crandall, Asst. Cashier H. E. Otte, Vice-President W. D. Dickey, Asst. Cashier R. U. Lansing, Manager Bond Department			Pioneer Pays Promptly /"NNE of the things that have made the Pioneer Life Insurance Co. grow so rapidly has been the promptness with which it pays its death claims. The business policy of the company is to make a careful medical examination, thus securing preferred risks, and then to stand by our hazards accepted. No quibbling, no delay; but always prompt and courteous with CASH IN FULL the day proofs of death come in. Annual Rates per $1,000 for Either Men or Women Age 20, per year . $10.00 Age 40, per year . $12.39 Age 25, per year . $10.22 Age 45, per year . $14.26 Age 30, per year . $10.64 Age 50, per year $17.08 Age 35, per year . $11.27 Age 55, per year - $21.78 Other Ages in Proportion The Pioneer Life Insurance Co. GEO. L. COLBURN, President, Pekin, 111.
			
A Challenge to its Defamers
"It is not a question with the opponents of the law as to its provisions and adequacy, but it is their determination that the people of Kansas shall not have that for which they asked and to which they are entitled. They shall have a law which means that when they deposit $i in the bank that afterward fails that they will get it back at one hundred cents on the dollar, and not eighty cents.
“I am pleased to say that three-fourths of the state banks are ready and willing to grant their depositors the benefit of the guaranty law.
“The constitution of our state and nation does not provide nor intend that on public questions of this kind 25 per cent of the people should rule over 75 per cent.
“The net losses to depositors through failed state banks in Kansas have not exceeded an average of $25,000 per annum during the past twenty years.
“Should all the state banks participate under the law, and the law provides for five assessments per year, if needed, which would bring in at least $150,000, the guaranty fund would amount to six times the amount required to pay. the net losses to depositors through failed state banks in Kansas, as shown by the records for the last twenty years.
“I challenge any business man or banker to prove or attempt to prove that the Kansas ‘bank depositor’s guaranty law’ through its provisions, is not sufficient in every particular and absolutely sound in principle, as to guaranteeing deposits.”
New York Scores
The very first train to arrive for the convention was the New York City and state special. It came on the tracks of the New York Central Railroad and carried 150 delegates. Later, delegates from California, Colorado, Wyoming and other western states came, and all day Sunday a steady stream of bankers from the middle western states poured into headquarters. During the afternoon a large number of representatives of southern financial institutions arrived. At the close of the convention the New Yorkers left for Yellowstone Park, over the Chicago and Northwestern.
The Gonzales County State Bank, Nixon, Texas, with a capital of $20,000 has filed articles of organization. D. M. Campbell and others are promoters.
The Guaranty Situation in Kansas
1-25 of i per cent, would cover the losses of depositors through bank failures each year.’ This is the amount required, so say the experts, to absolutely guarantee the full payment of all deposits held by failed banks.
“The records of the Kansas banking departments show that less than forty cents per $1,000 will pay the net losses of all deposits in failed state banks. I do not think a smaller amount would pay the net losses occasioned through the failure of national banks, as the records show that the net losses through failure of national banks in Kansas have been much greater than the losses through failed state banks.
“Now, as to the solvency and the absolute sufficiency of the provisions of the Kansas guaranty law, I will state that the first assessment of 1-20 of 1 per cent, which is fifty cents per $1,000 is 25 per cent more than the required amount as shown by the banking records for the past forty years to pay all of the net losses for that period of time.
What the Banks must Do
“In addition to this, the legislature very liberally provided for the raising of much more money each year than can ever possibly be needed. Under the law, the bank commissioner can levy five assessments in each year of 1-20 of 1 per cent, which is $2.50 per $1,000, or $2.10 more per $1,000 than the records of the past forty years show would have been needed.
“To make the fund absolutely adequate beyond all question, the legislature provided further that each bank must deposit a good and sufficient bond of $500 for each $100,000 and fractional part thereof of the bank’s deposits. Should the bank’s books show that it had an average per annum of $100,000 and a fraction in deposits, it would have to deposit $1,000 in bonds, which will amount to $6 per $1,000 additional security.
“The ‘bank depositors’ guaranty law’ shows and provides for, under its straight assessments, six times more money than the records (for the past forty years) show would have been needed, with an additional security in bonds of fifteen times the average net losses.
“No banker or business man in the state (yes, the nation) thinks for a moment that the losses to depositors will be as great during the next forty years.
C. N. Prouty, president of the Kansas State Bankers Association, organized to operate under the new Kansas Bank Depositors’ Guaranty Law, has issued a statement on behalf of the state banks of that state explaining the operation of the law and replying to attacks that are being made on it. Mr. Prouty’s letter is intended chiefly to refute the statements made in several newspapers as to the insufficiency of the fund created under the law to guarantee the deposits. The statement follows:
“The opponents of the guaranty law in con-j unction with certain newspapers, have been making many unfair and untrue statements recently in regard to the guaranty law. They state that on a recent date forty-five banks had qualified under the guaranty law, certificates issued and $3,546 in assessments paid, and that the amount of deposits guaranteed is J1/¿ million dollars. The facts are that at that time there was the above amount paid in, which under the law could be increased to five times that amount by assessments ordered by the bank commissioner, should conditions require. There were at that time also deposited by these forty-five banks $44,000 of bonds and cash as provided for under the bank depositors’ guaranty law.
“The records show that during the past forty years the average net loss to depositors through failed banks has not been to exceed 20 per cent of the deposits at the date of failure, or in other words, four-fifths of the deposits of failed banks have been paid to depositors.
The Percentage of Loss
“Charles G. Dawes, ex-comptroller of the currency, and Charles N. Fowler, chairman of the United States house of representatives banking committee, have spent much time investigating the subject of guaranteeing bank deposits and they (probably the best authority in this country on this subject) both agree that the average losses through bank failures in the United States since the organization of the national banking system, has been 1-25 of 1 per cent, or forty cents per $1,000 per annum.
“Charles N. Fowler, in his report, touches on the guaranty fund proposition, and after careful estimates makes this statement in his report: ‘An annual tax of 1-5 of 1-5 of 1 per cent, which is