Kansas Constitution Article Thirteen - Banks
Kansas Constitution – Article 13: Banks and Currency
Summary:
Article 13 of the Kansas Constitution governs the regulation and prohibition of banks of issue, specifically addressing how the state handles the issuance of currency and banking practices. This article was enacted in a time when states were cautious about banking institutions and private banks issuing their own currency.
Section-by-Section Summary:
§ 1. Banks of Issue Prohibited
No bank shall issue paper money or currency intended to circulate as money.
The section prohibits the legislature from establishing or authorizing banks that issue bills, notes, or other paper that circulate as currency.
§ 2. Legislature May Restrict Corporate Powers
The legislature has authority to regulate banking corporations and restrict their powers.
It may provide general laws for banking institutions, but must ensure strict oversight and safety for depositors.
§ 3. Bank Inspection and Reports
All banks are subject to examination by state officers.
Banks must report their condition at least annually and allow inspection of their books by the appropriate state authority.
Historical Context:
This article reflects 19th-century concerns about "wildcat banking", where private banks issued unstable currency, contributing to economic instability. Kansas prohibited such banks and tightly regulated state-chartered institutions.
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