For certain reasons, conditions have not been favorable for experimentation with deposit guaranty in Oklahoma. For one thing, despite the fact that the banks of Indian Territory, which became part of Oklahoma upon its admission to statehood, had never had state supervision, and those of Oklahoma Territory not perfect supervision, they were forced into the guarantee system with a very superficial examination as to their solvency and practices. Political expediency rather than financial fitness weighed too heavily as credentials for entering. The risks were, therefore, not selected with caution from the very first.

Then, too, national banks, although permitted to join by terms of the law, were denied the right to join by opinion of the Comptroller of the Currency and the Attorney-General, on several counts. To enter the system, therefore, national banks had to surrender their national charters and become state banks. This was expensive and bothersome and was done reluctantly. The large banks were national banks and were in the larger cities; the state banks were of varying sizes and more scattered. The law, therefore, affected areas differently.

In addition, and almost inevitably, the law at once became the football and tool of political parties. To make the law work successfully, high-handed methods were resorted to and criminal bank officials were left unpunished. The evils from its political administration were much reduced, however, when in 1913 the State Bankers' Association secured representation on the State Banking Board.

The law was hastily drawn, without precedent to guide, and enacted by a new legislature, in a new state, without debate, and put into operation in an unduly short time - all in the midst of a financial panic when judgment was warped by public clamor. The result was a poor law, difficult of execution, and requiring many amendments.

The state had been and was in the throes of speculation and bank officials were active in speculative ventures; the real estate boom and the oil boom were led or facilitated by the bankers. Bank credit was unduly extended on tenuous security. The state was new, was growing at unprecedented rates into great agricultural, oil, and lumber wealth. Speculation, venturesomeness, and dishonesty were rampant; banks do best when nurtured in a more conservative soil. Bank morals were very lax.

There was a high concentration of risks. The guaranty system was in operation in only a single state, which outside its oil production was almost wholly agricultural, and as a result a crop failure such as fell upon the state in 1911 shook the banking structure with great severity. Besides, there was a great concentration of bank credit in Oklahoma City. Had the guaranty system been nation-wide there would have been prosperous states, areas, and industries to compensate for the defaulting states, areas, and industries, and the financial world would have had a more even tenor.