The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-03-13

supsyinteneent KiIburn@s Fropositieps ana
Obieolrena Thereto.


Obieotiens Thereto.
To THE EDITOR OF THE SuN-Sir: Tho State
superintendent Of Banking, in his report to the
Legislature, recommends, among other things,
that the law governing tho operation OF build
Ing and loan associations should DO revised 80
as to define tho circumstances under which tho
Superintendent should DO allowed to intervene
and close such corporations.
Tho Superintendent now has power to take
possession Of the property and business OF any
bank In case he shall find that It's capital Is i'm.
paired or that IL is In unsafe condition. and to
retain possession Of the same until tho ternina.
tion Of an action to DO instituted by the Attor.
noy-Goneral for the appointment OF q receiver,
and other relief.
The question raised by the Superintendent
recommendation 10: Should this power bc ex-
tended 80 as to apply to building and loan asso-
c~iationsi
1t will be conceded that to take the property Of
q corporation out OF the hands OF the agents
selected for Its management by the shareholders.
and put IL In the possession of an official. without
ajudicial settlement of the facts upon which such
action is based lin other words. without duo
process Of law y. Is an extraordinary exercise Of
authority, which cannot BIO justified except upon
the strongest reasons Of public concern.
Banking corporations arc subject to this
bS"Vts "bAhS ibfs otothSs ~ W.
road corporations and financial institutions
other than banks are not, because tho proper
conduct Of the banking business is the founda-
ton Of sound credit in all business transactions.
1t IL not for the sake OF the shareholders, or
oven the depositors in banks deemed by the gu
perintendent to be unsound, that he is author
lied summarily TO take control OF It. Pntornal.
tho thor Il np' to one act St'' So Sl nas G%aH9s'i lola hs subject eet
to check tho fundsnpon which tho business com
munity relies for the transaction of its affairs:
and they arc so closely related among them
selves that to permit ono deemed, to be nnsonnd
to continue in business, pending judicial action.
But the public has NO such concern in the af-
fnirs OF building and loan associations.
funds Of the community, but of savings which
have been withdrawn from the active business
operations Of those who sgbseribe to their
without doing any direct injury to tho commcr-
cial credit: and tsinco they have little or no ma
1t nearly as much as would a failure OF business
or manufacturing concerns with equal capital:
shall have ample facilities for exa"ining the
rffairs OF these corporations and that In cnsc he
f andS that tn they SnT are Se SiSlSt tPgt their r. r G nn.ass 10, or
them, TO continue in the conduct OF their husi-
ness he shall report tho fact to tho Attorney.
General, who shall proceed to. the appointment
OF a receiver and the dissolution Of the cor
These provisions amply protect the public and
tho State against tho serious abuse OF corporntc
privileges. bnt they do not ~interferc with the
enjoyment Of property rights until the fact Of
the existence Of nm abuse has been judicially
determined. There In no good reason for an
%amcndment OF the law as It stands.
If any moro strict or sweepinU powers Of
euporvision can he devised. they will meet with
no reasonable objection from any ~pronerly con.
Quoted association. provided snch association
have it's day In court before being deprived Of
the control Of It's business.
sn up ri EGrhaRs q GFG RSnk i0 nG IS no eHe' the sse Press iHss
ident of a company which was placed In
the hands OF n receiver during his torn OF
office. His chief Of the Building md Loan Do
partmcnt is also President of one Of tho largest
associations of this State. and other instances
might be mentioned where gentlemen have gone
out Of the banking department. and into control
Of corporations which had been heretofore sub
iect tn their supervision. This Is stated. not for
the purpose of in my way rejecting upon the
gentlemen referred to. who were doubtless
elected to their positions with reference to their
fitness solely. hut in order to- show that It might
not no iudicious 70 place In the hands of any in
divldual q summary authority. tho exercise of
which might be used to influence corporations
to take action for his advantage, 4.
MARCH Q.