The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-12-16
He Appears Before the Banking and Currency
Committee and Presents Number of Pro.
posed Changes in the Banking Laws.
POstmasters of Presidential Offices Must
Not Engage in Other Business.
A Half Million Dollars Wanted for Repairs"
on the Charleston Custom House Congress
man Reid's Dishonest Transactions.
THE NATIONAL BANKS.
Comptrol1er Trenholm Suggests Important
Changes in Existing Laws.

Changes in Existing Laws.
WASHINGTON, Dec. 15.-Comptroller Trenholm
appeared before the House committee on bank
ing and currency to day. by request. to state his
views touching the national banking system.
The Comptroller stated to the committee that he
was not yet fully prepared to suggest scheme
of reorganization of the present system. but be-
eyed he would be able to suggest practical
plan some time in January next Meanwhile he
submitted for consideration of the committee a
draft of bill amendatory of the laws relating to
national banking associations. A summary of
the draft is as follows:
The first section Of the bill provides that oaths re.
9uired to be taken by officers of banking associations
may be administered by United States commissioners
notaries public ard other officers using official
seal.
The second clause authorizes The assistant cashier to
make certifcations and velfcaons in the absence
disability of the cashier The signing of certified
is however excepted from the duties that may
be so transferred.
The third section provides that if any person desig
mated by the Comptroller to examine the affairs of
bank shall make any false entry in any statement
made to the Comptroller with intent to deceive he
shall be deemed guilty of msdemeanor and punished
by imprisonment.
The fourth section proposes to amend Section 5209
Revised Statutes. by adding after the word associa-
ton. in the eleventh ne the words or the Comp
troler of the Currency"
The fifth section requires hat the bonds REQUIRED to
be kept deposit in the Treasury basis for cir
cuation shall be interest bearing, and when such
bonds called they must be replaced, within three
months after notice. by interest bearing bonds and
il default the Comptroller is authorized appoint
receiver to close up the affairs of the bank In case
the bonds deposited to circulation exceed the
minimum amount required by law. the excess may be
plae ed with other uterestbearng bonds, or the crcu
ation secured by the shall be surrendered by
the association whereupon the shall be deiv-
by the Treasurer of the United States to the Secre
tary Of the Treasury for redemption. with instruc
1nr IN fha with fNraaS
lawful money to the amount of tho outstanding
circulation secured by such bonds and hold the resi-
due account of the association holding the bonds.
The sixth section provides that boards of directors
shall be constituted of not less than FIVE directors
exclusive of the vice president and the cashier il he
be member of the board
The seventh section makes it unlawful for bank TO
take, either ia its that of any corpora
ton person. for its benefit any mortgage upon real
estate security for contemporaneous loan for
advances but association is prohibited from dis
counting bill Of exchange or promssory note not
having than foAr months 10 run, although the
may be secured by real estate, when discounted
for an n0orser in the ordinary of business
and when the mortgage or lien is merely collateral.
The eighth section provides that Section $500. Re-
vised Statutes regarding total liabilities shall not ap
ply to loans MADE collateral security least equal
IN value to the amount payable but is stipulated that
the total liability OF any person or firm to banking
association including loan collateral kali not at
any time exceed 10 per cent, upon the aggregate of
its paidn capital stock and surplus fund minus the
20 per cent capital required by law to be retained
The ninth section provides that associations making
which is not specified in the draft.
The tenth section provides that all penalties pro-
vided by the act shall be assessed against the offend
ing association by the Comptroller; subject to ap-
peal TO the Secretary of the Treasury and in default
of payment shall be withheld by the Treasurer from
the interest of the bonds deposted and if that be not
sufficient the balance shall be recovered through suit
The eleventh. twelfth, thirteenth and fourteenth
sections relate to surplus funds. They provide that
whenever the surplus fund of any bank shall exceed
by 20 per cent. The amount of its capital stock the
shareholders may be relieved of the individual re-
sponsibility imposed by Section 5151, Revised Stat
utes and every association may be relieved of snch
liability in the proportion which the surplus after de-
Quoting the 20 per cent reserved bears to the whole
amount of capital stock. No exemption. however.
can be obtained through any process by which any
portion of the capital stock may be converted into
surplus. In the surplus is reduced by loss or
otherwise below the amount required for exemption,
the association is required after notice to pay the
deficiency by assessment upon the shareholders and
if the deficiency be not made good the bank is to be
placed in the hands of a receiver.
The fifteenth section provides that banks designated
by the Secretary Of the Treasury repositories of
public money which have deposited bonds for it's safe
keeping shall not be required to keep on hand any re-
serve allow The amount of such deposits
The sixteenth and last section'empowers the Depu-
ty Comptroller to perform such duties as may be as
signed to him by the Comptroller.
A supplement to the bill relating to failed
banks provides that where the assets of any insol
vent association, for which receiver has been
appointed, shall be sufficient to pay all the cred
itors in full, the association shall not be deemed
to be dissolved but after the delivery of the as
sets to the agent of the shareholders the asso-
citation shall be entitled to resume business, If
shareholders owning two-thirds of the capt. al
stock shall decide to do so. Before resuming
business however the association is required to
restore the entire amount of its capital stock.
Upon the approval of the Comptroller the
amount of the capital stock may oe reduced be-
fore restoration.
The Comptroller took occasion to suggest to
the committee the advisablity Of taking some
action for the relief of depositors of the dcfunct
Freedman's Bank, and it was arranged that he
should appear before the committee again on
Saturday to explain his views on that subject.