Between November 16, 1907 and November 1, 1908, 58 new banks have been organized as follows: Kansas. Durant. Durant. Ft. Towson Hobart. Farmers State Bank..... . April 8, 1908.. Home State Bank. Oklahoma State Bank... September 21, 1908. 15,000 October 24, 1908. 15,000 February 21, 1908. 50,000 10,000 10,000 10,000 July 6, 1908. 10,000 January 23, 1908. 15,000 October 24, 1908. 15,000 First State Bank. Tillman County Bank... April 27, 1908. Bank of Millerton. Oklahoma City.. First State Bank. Oklahoma City...Oklahoma State Bank... September 15, 1908. . July 31, 1908. 10,000 10,000 25,000 10,000 25,000 10,000 Between November 16, 1907 and November 1, 1908, eighteen national banks converted to state institutions as follows: 10,000 March 26, 1908. 10,000 September 18, 1908. .10,000 March 25, 1908. 10,000 October 24, 1908. 15,000 10,000 15,000 10,000 10,000 15,000 15,000 Between November 16, 1907 and November 1, 1908, twenty-four state banks were liquidated as follows: Between November 16, 1907 and November 1, 1908 two state banks nationalized as follows: LOCATION Mulhall Newkirk NAME OF BANK Bank of Santa Fe. THE GUARANTY LAW. The first state legislature convened December 2, 1907. Just at this time the entire country was suffering from a money panic and banks were restricting in a large measure cash payments. On December 17, 1907, house bill No. 11A, known as the depositors' guaranty bill, became a law on approval by the Governor. The act created a state banking board to be composed of the Governor, Lieutenant Governor, President of the State Board of Agriculture, State Treasurer and State Auditor. It provided that within 60 days after its passage and approval the state banking board should levy against the capital stock of each and every bank, organized and existing subject to the laws of the state, an assessment of 1 per cent of the banks daily average de posits for the preceding year, less the deposits of United States and state funds, for the purpose of creating a depositors' guaranty fund. It further provided that upon the closing or failure of any bank organized or existing subject to the laws of this state, all depositors should be immediately paid in full, authorizing the use of so much of the guaranty fund as might be necessary for this purpose. The business of the bank to be liquidated thereafter by the bank commissioner and the proceeds applied to the reimbursement of the guaranty fund. Further provision was made empowering and directing the banking board to levy additional assessments on the banks upon the depletion of the guaranty fund from any cause and directing that said fund be maintained at 1 per cent of the average deposits of all the banks, to be determined at the end of each year. The act further provided that upon the organization of a new bank it should be required to pay into the guaranty fund 3 per cent of its capital and that this amount should be subject to adjustment at the end of one year on the basis of 1 per cent of its average deposits. The bill also carried several important amendments to the old banking laws, among these being: (a) Requiring Bank Directors to own at least $500 stock, free from pledge; (b) Prohibiting active managing officers from borrowing, directly or indirectly, of the bank's funds; (c) Limiting loans to any person, corporaation, company or firm to 20 per cent of the bank's capital, elimiinating from calculation the bank's surplus fund; (d) Providing for the removal by the Board of Directors upon the order of the Bank Commissioner any bank officer found to be dishonest, reckless or incompetent; (e) That the violation of any of the provisions of the Banking Laws by the Officers or Directors of any bank is sufficient cause to subject such bank to be closed and liquidated by the Bank Commissioner. SPECIAL EXAMINATIONS MADE. On account of the enactment of the depositors' guaranty law and no examinations having been made of the banks in the Indian Territory, it was deemed expedient to make a special examination of each bank coming under the supervision of this department. For this purpose thirty-one special examiners were employed, selected for the most part from the official staff of banks throughout the entire state. Considering their lack of special training for the work they did remarkably well. These special examinations were made between January 7, and February 14, 1908. In all 513 examinations were made, a number of banks being examined twice between these dates. The banks themselves assisted greatly by making special effort to meet the requirements of the new laws. On account of the unfavorable financial situation at this time it was extremely difficult in many instances to meet every requirement immediately. If the bank was solvent and showed a disposition to comply with the law as promptly as possible the department endeavored to be fair and gave them an opportunity. Those whose condition or pasti record did not justify a continuation of business were ordered to discontinue receiving deposits and liquidate, and they did so. So far as this department is advised no depositor suffered loss. At this time the question arose as to whether a bank could continue in operation without a certificate of guaranty under the depositors' guaranty law. The matter was presented to the attorney general by this office in a letter dated January 13, 1908, and he replied under same date holding that whenever the banking board levied the assessment as provided for in house bill No. 11A, the deposits in all banks in Oklahoma, subject to the laws of the state, would be immediately protected by the guaranty fund and that the bank commissioner had no authority to exclude any bank, except by closing it before the levy was made. While a large number of banks were technically not in harmony with every provision of the banking laws their general condition was such that the department did not feel justified in closing them and upon their promise to correct the objectionable features of their business they were allowed to continue in operation. But one bank, the International Bank of Coalgate, failed to make good. The banking board made the levy provided for in house bill No. 11A, on February 14, 1908, and thereupon the deposits of all banks operating under the state laws were protected by the depositor's guaranty fund, with but one exception, viz: the Noble State Bank of Noble. This bank enjoined the collection of the assessment against it and at this date the case is still pending before the supreme court of the United States. NATIONAL BANKS UNDER GUARANTY LAW. Section 4, of house bill No. 11A provided that any national bank in this state approved by the bank commissioner might voluntarily avail its depositors of the protection of the depositors' guaranty fund by entering into a contract in writing with the state banking board. Ninety-seven national banks were examined by this department and the fees collected for making such examinations were paid to the treasurer of the banking board. Of the number examined fifty seven, with a total capitalization of $1,900,000 and deposits of approximately $6,250,000, signed contracts and complied with the guaranty law. The following is a list of such banks: Subsequently, the attorney general of the United States held that national banks could not legally participate in the state guaranty of deposit law and upon the order of the comptroller of the currency these banks were compelled to withdraw. Ten of the number have since surrendered their national charters and reorganized under the state laws. INTEREST ON DEPOSITS. In February 1908, the legislature passed a bill, known as house bill No. 333, in which the bank commissioner was given authority to fix the maximum rates of interest which banks may pay on deposits. In accordance therewith a ruling was promulgated on February 26, 1908, and modified March 3C, 1908, fixing the maximum rates as follows: On bank balances, not to exceed Three Per Cent per annum. On time certificates for less than six months, not to exceed Three Per Cent per annum. On time certificates for six months or longer, not to exceed Four Per Cent per annum. This ruling is still in force and so far as the department is able to determine is being generally observed by the banks. INTERNATIONAL BANK OF COALGATE. Since the enactment of the depositors' guaranty law no bank has failed in the usual meaning of the term but one bank, the International Bank of Coalgate, was closed for violations of the provisions of the banking laws and for its failure to comply with the lawful orders of this department. This bank was organized under an Indian Territory charter and began business November 1, 1905. It was first examined by this department on February 4, 1908 At that time it had a capital of $38,000, undivided profits $1,737.11, total deposits $32,424.16 and a reserve of 39 per cent. The examiner reported officers' loans $9,922.86, stock loans $7,811.50, doubtful paper $91.50 and the furniture and fixtures carried at about $900 in excess of its actual value. His report was received February 6, and on the same day a letter was addressed to the bank ordering all |