Alma record. (Alma, Mich.) 1878-1928, 1891-05-01
AROUND THE STATE,
HAPPENINGS IN MICHIGAN OF
MORE OR LESS INTEREST.
Sank Commissioners Sherwood's Re
port 60 the Senate on the Subject or
Farm Mortgages.
About Mortgage Loans.

About Mortgage Loans.
". G.. Sherwood, bank commissioners,
as sent the following communication on
ne subject of mortgage loans to the senate:
q the Honorable, the Senate, of the State
Michigan. Gentlemen-I am this day
receipt OF the resolution adopted by
our honorable body April III asking that
40 commissioner Of the banking depart
rent report To the senate what amount of
rm mortgages are held by the banks of
ne state and tue rate OF interest thereon,
nd such commissioner is hereby requested
} advise the senate of such changes in the
lnkiug law OF the state as may be per-
,ctly safe to the investor and afford relief
the farmers. In response to said reso-
ition, | beg leave to report that on
ecember 10 last, the last report received,
)6 state banks, O. of which were savings
lnks or banks with savings departments,
nd two trust companies reported to this
apartment commercial loans Of SCI, 62S,-
IS. 10; stocks, bonds and mortgages, SIS,
iG, 637.0S. OF the latter 81, 353, 152 So
ere stocks and bonds and SIS, 492, SS4 %
ere mortgages. | am unable TO give
iparatcly the amount loaned on farm
nd business property, the two
ing combined in reports made 10 this de-
irtment; but from examinations made
lring the past year my opinion is, that
rye proportion of money loaned by the
ate banks on mortgage security, is loaned
! farms and homes of labOring men, and
at very small portion is loaned on bust
,ss property, as those loans are usually
ken by insurance companies, or eastern
pitalists, at lower rate Of interest than
estern banks charge. viz: 63l per cent,
hich is the average rate OF interest charged
our state banks. In this connection |
light say that the commercial loans are
Il all made TO bus. mess men. Banks in
+ farming districts loan 10 farmers more
adily than they do business men. ard
thout mortgage security. In complying
TIA your request TO ''advise the senate of
CHI changes in the banking law of the
ate as may be perfectly safe to the invcs-
: and afford relief to the farmer" will
that in our state we have three classes
banks. viz: private banks. national
nks aud state banks. Private banks not
Tag under supervision, am uuaoe 10 in
m you how, or in what manner, they
n their deposits. National banks are
,trcted TO commercial business and can
uu security. cbdIe
AXIS are permitted by law to trausac
th commercial and savings business.
numerical banks are especially for the ac-
nmodation of farmers and business men.
ey are, and should be, exclusively de-
led TO the collection, slfc-keeping and
ployment in temporary loans the float
capital of the country. Every farmer,
reliant and manufacturer is dependent
Su the commercial banks for funds to
Ible them 10 market the products of the
IN and the goods OF the merchant and
nufacturer. Our state banking law
mits commercial banks to loan on mort
&C security, an amount not exceeding 80
cent OF their capital stock, and in my
gment the law in this respect should
be changed. The savings department
our state banks receive aud care for the
plus money of the country that is not
ded in active business. They are re-
red by law to keep on hand Is per cent
heir deposits in cash TO provide for the
rent daily business demands. Thirty
rper ceut they can loan on negotiable
'er, secured by col.aterals and short
commercial paper that they may be
} 70 meet unusual demands without be-
compelled 10 dispose of mortgage Sc
ties. Fifty-one per cent they are
Ipelled to loan on bonds or real estate,
as farming lands are the
t real estate security known,
y are very desirable for these
manent loans. / cannot see how the
regulating loans could be more just
suitable, and at the same tine afford
per security to the thousands of
Ositors who patronize savings banks.
rider to benefit farmers and others who
re TO borrow on mortgage security.
ycsted in my last annual report pages
and ~ that the banking law be
uded 50 that certificates of deposit
d I've classed as savings deposits. The
ndment you wisely adopted, and when
l54, 124. 25-the amount of certihca ties
eposits reported last December, which
formerly classed as commercial
osits are required TO be loaned, | think
e will be no demand for change in
banking law, or complaints from
'Owers that they cannot obtain money
banks on suitable mortgage security.
Respectfully yours,
II. G.. SHERWOOD,
missioner Of the Banking Department.