The Kansas law has many elements of strength not found in the original Oklahoma law. The chief advantages are the following:
2. The rate of interest paid on deposits guaranteed by the system is limited.
3. Banks are prohibited from advertising that their deposits are protected by the state.
4. Entering Banks Are Rigidly Examined.
5. Banks Must Be A Year Old And Have Accumulated A 10 Per Cent Surplus.
6. The accumulation of surplus and the contribution of a large capital are encouraged.
7. The Bank Commissioner has power to remove incompetent, reckless, or dishonest bank officials.
8. The maximum time allowed a bank to correct any abuses the Bank Commissioner orders corrected is thirty days.
The Kansas act went into effect June 30, 1909. Since then the number of guaranteed banks has increased gradually, and on June 30, 1916, was 539 to 448 non-guaranteed. On that date the guaranteed banks had about twice the deposits of the non-guaranteed, the larger banks having joined and the newer and smaller banks being excluded by the requirement of a 10 per cent surplus. Only one guaranteed bank had failed to date, and this failure was due to reasons other than the existence of the guaranty law. In March, 1921, the number of banks operating under the guaranty law had reached 694 out of a total of 1,107 state banks.
The state banks of Kansas having adopted guaranty of deposits, the national banks of that state were constrained to meet the competition. Since they were denied the right to join the Kansas system, they organized in 1909 the Kansas Bankers'
Deposit Guaranty and Surety Company. This company, capitalized at $500,000, is owned by bank officers of the national banks and those state banks that did not join the Kansas system. Its head office is at Topeka. It issues policies to each member bank guaranteeing the deposits in case of bank failure; the premium rates are 50 cents per thousand dollars of deposits up to the amount of the capital and surplus, and $1 per thousand dollars of deposits in excess of capital and surplus. About a hundred banks took out policies. As there have been no losses, the demand for guaranty has declined, and many of the banks have let their policies lapse. The company now does a bonding, surety, and guaranty business in several lines.