The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-03-25
MEASURE GOVERNING BANKS
OF DISCOUNT
PASSED UNDER SUSPENSION.
TEXT OF THE BILL AS 1T PASSED
ITS THIRD READ
ING.
House DispOses of u Large Grist of
Business-Bills Advanced to
the Calendar.

The house put in a fairly busy day
yesterday, and was ready to quit when
nightfall came, despite the efforts OF
several Jealous persons to hold an
evening session. Probably the most
important feature of the days pro-
ceedings was the consideration given
by the house in a thorough, yet infor-
NAL, manner to the bill sent in as
substitute for the Mcdonald bill Oh. F.
8 to provide a recodification of the
law governing banks of discount and
deposit. The Mcdonald bill, as may
be gathered from the number, was put
in early in the session, and makes the
law very much more drastic than the
existing law. The various transac-
tiOns in which a bank or its officers
may participate are distinctly pre-
scribed and limited, and failure to COM
ply is defined and penalties therefor
fixed with no indirectiOn.
The substitute measure is much more
brief than the original bill and makes
but few alterations in it, These few
changes and one or two additional
amendments occupied considerable
time during the afternoon, and were
discussed at length for the benefit Of
the house, which finally, under a sus-
pension of the rules, gave the bill its
second and third reading and placed
it on it's final passake by a vote
of SO to 2. The text of the bill re-
duced from many to but five sections
is here given:
Section 1. No director or officer shall d.
rectly or indirectly, in any manner use or
borrow any funds of the bank or any part
| thereof, except upon his commercial paper
! secured by sufficient and proper cola eral or
other security, IT by Endorsement by other
financially respoI 5ible person or persons not
directors off -c-7 employees of such bank
and then only upon the approval of a ma
Jority of the board of directors, of which ac-
ton full and complete record shall be kept
and preserved by the said board of directors
NO such loan to any officer director shall
exceed ten (lO) per cent of the aggregate
amount of the capital stock and permanent
surplus fund of such bank actually paid in
No loan shall be made to any employee of the
oank. The term emp!oye shall not be con-
srued to include officers of the bank
Any director or officer violating any of the
! PROVISIONS of this section shall be deemed
guilty OF a felony, and upon conviction there
OF be punished by Imprisonment N the states
prison for a term of not more than ten Q0
years. Wv
pank authorized by this act, who willfully
and knowingly subscrbes or makes any false
statement of facts CT false entries in the
books of such bank, or knowingly subscrihes
OF EXHIBITS false papers with intent TO de-
celVe any person interested in or authorized
to examine the condition Of such bank will
IuIly or knowingly subscribe or make false
reports snail be deemed guilty Ct a felony
ana upon conviction shall be imprisoned at
hard labor in the state prison for a term Of
not less than two years nor more than ten
Sec. 8. The total liabilities to any such
Dank OF any person or Of any company cor
| porat!on, or firm, for money borrowed in
Guiding in the liabilities of a comnanv Or
| firm. the liabilities of the several members
or directors thereof, shall at no time exceed
niteen Q5) per cent Of the aggregate amount
or the capital stock of such bank actually
of such bank
The discount Of the following classes Of
paper shall not exceed the following amounts
at any one time, viz:
Commercial paper actually owned by the
person negotiating it, twenty-five (25) per
cent of capital stock
biIls OF exchange drawn in good faith
against actually existing values fifteen 05l
per cent of capital stock
Paper secured by warehouse receipts COW
erlng agricultural and manufactured products
IN store, in elevators, and warehouses; fifty
(oO) per cent Of the capital stock The
amount of said loan shall not however. ex-
ceed ninety 900 per cent of the market value
OF the property held in store and covered bv
the receipt ~
Any officer of the bank who by any act or
neglect, loans or permits to be loaned anv
money IN violation Of this section shall be
guilty of a felony, and upon conviction there
OF shall be punished by Imprisonment in
STATE prison Tor a period of not more than
ten years for each offense.
sec T. Each bank organized under the pro
VISIONS Oh TINS act, shall, at all times have
on hand in available funds with which to
meet the demands of depositors and creditors
an amount equal at least to twenty (2M per
centum of all its liabilities. One-half Of this
amount of available funds may consist Of
balances due to the bank from good solvent
Danks, and the remainder of such sum shall
De held in reserve in cash on hand LiabiIi-
ties shall include all deposits made and all
items in the nature of claims PAYABLE on de-
mand; in cash hand shall be counted sne-
Gle, legal tender notes and all bills Of solvent
banks. Whenever the available funds of anv
OF It's liabilities, such bank shall not make
any new loans or discounts otherwise than
by discounting or purchasing bills of ex-
ehange, payable at sight nor make any divi-
uenus OF Its profits until the required pro-
portion between its liabilities and its avail
able funds have been restored. And the presi-
dent or vice president and cashier shall i'm
mediately notify each director of It's condi-
ton.
Anv bank officer violating eny provision of
this section shall be guilty Of a felony and
upon conviction thereof be punished by i'm
prisonment in states prison for term Of not
more than two years.
Sec. s. On becoming satisfed that anv bank
mas refused to pay its deposits in accordance
with the terms which such deposits were
received, if received in accordance with the
provisions of this act, or that any bank has
become insolvent, or that It's books or ac-
counts are kept in false or fraudulent man
ner, or that any bank has violated any of
the provisions of this act the Superintendent
of banks shall forthwith take possession of
the books, records and assets of every de-
scriptiOn of such bank, and hold the same
and said books. records and assets shall not
| be subject to levy or attachment, nor shall
any application for the appointment Of a re-
cefver be entertained by any court during
such reasonable time as may be necessary
for further examination and to enable the
superintendent to apply to a court Of com
petent jurisdiction for the appointment of a
receiver for such bank. and under the d!rec-
ton of such court the receiver so appointed
shall take possession Of the books records
and assets of every description Of such bank
collect all debts, dues and claims belon e
to 1t and sell or compound all bad or doubt
full debts. dues and claims belonging to If
and sell all the real or personal property Of
such bank on such terms the court shall
direct, and may. if necessary. to nav the
debts Of such bank, enforce all individual liza
blity Of the stockholders. Such receiver
shall pay over all money so collected or re-
ceived upon the order of the court and make
report of his acts and proceedings when re-
| quired, to the superintendent of banks. in
such form and manner as the superintendent
shall prescribe.
Provided, that II. upon more detailed av
animation, the superintendent of banks And
that the condition of the bank is such that
all creditors Of the bank other than those
represented by the stock can be paid in fuII
nom the assets of the bank, the superin-
| tendent NAV in such case relinauish posses
10 H.