The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1858-08-05
The Banking Law =.

Banking Law when We puDilshed yesterday
will be welcome TO those who do not wish
to wade through the elaborate details Of the
document itself. Except the wide door
opened for fraudulent issues by section 2,
which permits any banker TO procure his
own plates and dies, the Bill affords the am
plest guards for the security Of the bill-hold-
er, while the restrictions are not, in general,
OF such a character as to discourage the
free competition of capital under its auspices.
1t is in many respects an Improvement
upon the old bill passed last session, which
was repealed by the passage of this act.
That bill created the needless Office Of Bank
Comptroller, whose duties by this bill, are
transferred to the Auditor Of the State.
The provision Of the thirty.third section
which limits the rate Of interest on loans to
fifteen per cent, is the most exceptionabe
feature Of the bill-but, apart from the fact
that any such restriction upon the free CON-
petition of capital, must necessarily prove
imperative in the numerous expedients for
evasion which the ingenuity Of sharpers has
devised-it is at most to be regarded only
temporary compromise with the prejudices
which happened to be in the majority, and
it is to be hoped that another session will
abolish legal interference with the laws of
trade.
The synopsis which follows gives the main
features Of the law:
Sec. authorizes the Auditor Of the
State to procure dies or engraved notes.
Sec. 2 accords the same power To any Bank
er. Sec. 3 fixes the denominations of notes,
from one to five hundred dollars, which Sec
4 requires to be countersigned, numbered
and registered.
Sec 5 requires as security FOR a given
amount Of notes, a deposit in the Auditors
hands of United States or State stocks, Of
class producing six per cent, and on which
interest is paid semi-annually, the stocks to
be estimated at the average New York val
uation for six months preceding, no stock to
be taken above par and further provides
that in case Of depreciation of these ST.
curities to the extent of ten per cent the
defect must be made good by the banker by
an additional deposit Of stocks, or restora-
ton of bank notes.
Sec. provides additional securities for
the bill holder in requiring that before any
bank notes are issued to any bank for circu-
lation, the stockholders shall either give the
Auditor approved bonds to the amount Of
one-fOurth of the notes which the bank is to
receive, or deposit in lieu Of such bonds ten
per cent. more stock.
Sec. 9 provides for the taxation of the
assets Of the Bank.
Sec, 10 fixes the lowest capital basis Of
banks organized under this act at $4,000
and prohibits their establishment in any
town containing less than two hundred in
habitants.
Secs IL, II, and ID, relates to the organ
ization and business Of banks.
Sees IA and q establish the individual
liability of the stockholders. by the first
every new purchaser succeeds to the labili.
ty OF the assignor and by the second nc
stockholder can divest himself OF RESPONSE
lily for the debts Of the bank for which he
is made liable in amount double the amount
of stock owned by him, such liability "a
continue for one year after the transfer Of
stock.
Sec. Is contains the law relating TO pro-
tests, the expense Of which is imposed upon
the bank, unless protest il waived by the bank
er. Ifno,es presented for payment are not re.
deemed in forty days after protest, the Au-
ditor is required to put the securities OF the
bank in liquidation, the proceeds to be ap'
piled to the redemption OF its outstanding
notes, pro rata. The Bank is also liable for
damages for non-payment.
Sec. II. imposes a penalty OF $1,000 for
fraudulent or over issues by the Auditor
also, Imprisonment for one year, or both fine
and imprisonment.
Sec. 20 prohibits any bank from holding
real estate, except place for the transac-
ton Of business, and such as shall be OBJ
tanned by mortgages, or in satisfaction Of
debts, or by sale execution or decree Of
court.
Sec. 22 gives the bilLholders preference
in case OF the insolvency Of the bank.
Sec. "a to q. provides for the retirement
OF the circulation and corresponding with
drawal Of the securities Of the bank. No
bank can run with q less capital than
$4,000.
Sec. 30. If capital is reduced no dividends