Salt Lake Telegram | 1934-08-08 | Page 11 | Hoge to Return Securities on Sate's Funds

HOGE TO RETURN SECURITIES ON STATES STATE'S FUNDS Banks to Turn Back Public Money Money if They Fail to 10 J Get Colla Collateral eral Stare Stale Treasurer Enos Hoge said laid Wednesday he had no alternative except to to return to banks bank securities held by him as collateral for approximately approximately in state tate funds fund deposited deposited de de- de posited In the banks bank His declaration followed a II meeting of ot local banks all qualified a. a as depositories de de- under the state depository law law Tuesday night at which it was agreed the institutions would ask for return of ot the securities by Au August 15 or turn turnback back public funds to the vanous varIous various vari van ous treasurers Th The bankers' bankers decision was based on onan onan onan an interpretation by Attorney General General General Gen Gen- eral Joseph Chez that under the new de depository law which became effective effective tive live July 1 banks are arc not required to put up security for public funds fund In Banks City Treasurer Milton E. E Lipman and other treasurers have kave declined to return the securities Observers said aid that if it the banks banc returned the state funds to Mr Hoge there would be no place to deposit the money and that as 33 a result the state treasurers treasurer's bondsmen might be beheld beheld beheld held responsible for tor 1 per cent interest in terest which is paid on such deposits The law says ays the state treasurer must collect current interest rates on public fund deposits Mr Hoge said there Is approximately approximately in state money in Salt Lake City and Ogden banks with more In fri other No Formal Action The state depository board which administers the new law and qualifies qualifies fies banks has estimated that there is a total o of about in instate instate instate state municipal and county funds deposited deposited deposited de de- de- de posited In Utah banks bank It was pointed out that if It all treasurers treasurers treasurers treas treas- followed a 3 lead of ot Mr Hoge in returning securities this sum would be unsecured Despite my attitude regarding collateral collateral col col- col lateral on state funds which differs from that of Mr Chez and the depository depository depository de de- de- de board I can do nothing but comply with the demand of ot the banks when it is made Mr Hoge said No formal action was taken at the bank meeting but It was agreed a uniform course would course would be followed by byall byall all aU institutions institution Banks Brnik Within Rights Eights Otherwise Mr Hoge said aid if the banks follow ollow the procedure they say they will and return state funds the state will be faced with the problem of ot guarding the money John A. A Malia state banking commissioner commissioner com corn missioner and chairman of ot the depository depository tory board said there was no cause for or alarm or public apprehension The banks are within their rights in demanding return of the securities ties he explained The law was designed to spread public deposits among all banks rather than favor a afew afew few tew large ones one It is true the law prohibiting banks from tram putting up collateral puts put the state and taxing units in the game class as the ordinary depositor with deposits up to protected by the Federal Deposit Insurance corpora corpora- tion