The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-03-14
THE BANKS AND, THE LEGISLATURE


suspension of the County Bank and the Commercial
Bank OF San Luis Obispo and the Bank OF Paso
Robes. The real or fundamental reason for these
| failures was a loose method Of conducting business
unchecked through the defective organization OF the
Bank Commission of this State and nefciency on
the part offthe present Commissioners. few figures
will, establish these propositions. AS appears by
a communication from Mr.. Evan ]. Coleman, first
president of the Bank Commission, published IN an
other column in the case OF the County Bank OF Dan
Luis Obispo as far back as May Is, 1895, the dis
proportion between its available and convertible as
sets and its liabilities inexcusable But its cond
ton on August 81, 1893, was serious. At that
time its investments in bank premises in real estate
taken for debts and in loans real property aggre
gated $4o7,I7o 81. Its loans on stocks, bonds and
| other personally amounted to S32,72o o8; and on
personal security" which individual credit 1t
had outstanding the large OF S162,3o0 81 Its
money on hand and due from banks looted UP only
$2514o &C. Its liabilities to depositors and banks
were $385o6o a. Obviously from these figures, taken
from the report of the Bank Commissioners more
than six months ago. while the ultimate sovency of
the bank might have been assured if real estate had
not proved inconvertibe, the disparity between its
debts and its credits was so wide that 1t was not IN
condition to transact ordinary banking business and
was at the mercy of any run" that might be pre-
ciptated by local or transtory conditions. These
facts should have been comprehended by the Com
missoners and the bank at once forced to stop or
to increase its Immediately available funds. Its OF
fetal statement of December 81 18o8 printed in The
Call of Yesterday showed that it had proceeded from
! bad to worse The amount OF money tied up in the
bank premises in surrendered real estate and in pend
ing loans real property had then increased to $780,
$50 TO- and the loans personal security to SI78-
2z2 2I, while the money hand and due from banks
was reduced to $I2776 70, and the deposits and in
debtedness to other banks had been enlarged to S9
473 81.
The County Bank of San Luis Obispo is the chief and
originating factor in the financial disturbance in that
county but under proper supervision and control its
bad management might have been arrested and the
injury liable to result from its suspension averted
Apart from the criticism that may be justly directed
to the Commissioners, in its issue OF February II,
$780, The Call specially invited the attention OF the
Legislature to practical remedy for unsafe banking,
! then suggested by Mr.. Coleman, who proposed that
the present statute should be amended to
large the number of Commissioners to FIVE to reduce
the salary of each to the original figure of $4,000
per annu and to compel the disclosure to the public
and to the Commissioners of all assignments and hy
pothecations of securities The provision for public
ity was essential because the law directing advertised
m-annual statements from each bank had been re-
pealed which deprived depositors OF official ntorma
ton without which they were IN constant danger.
The additional expense of this economical measure.
only $4,000 in each year, would have inflicted no add
tiona burden upon taxpayers because 1t was provided
that the cost and the restricted expenses of the Com
mission should be collected by assessment trans
ferred from the deposits the entire of the
banks that would not exceed cents in $1,000
! AS usual however, private interests and private in
f1uences in this important matter have SO tar over
balanced the public welfare, and the end of the leg
isative session has been almost reached without the
adoption OF the improvements in the law that at least
! temporarily until better system could be devised,
would have prevented loss and ruin to thousands OF
industrious and economical citizens Bills covering
! the proposed amendments introduced both in
the Senate and in the Assembly For inexplicabe
purpose the Assembly bill was Withdrawn. The SEN
ate bill was retained and is ready for the third reading
but it has been njudiciousy amended so as to fix the
! office of the Commissioners at Sacramento instead
of San Francisco, where the principal banks are 10
Gated and the salaries of the five Commissioners at
the present rate $1,000 each per year. while necessary
travelling expenses placed by Mr.. Coleman at $1,000,
are raised to $1,000 per annum Meanwhile one of the
items for printing useless reports crammed with
Ineligible statistics which it intended to op off,
has been illustrated in the general appropriation bill,
az we are informed to the tune OF $4,000
The question of protecting the earnings and depos-
its of the people in savings and in commercial banks
is not political has no connection whatever with the
Senatorial deadlock with the defunct State Harbor
Commission bill, and should not be considered in
lation to patronage under the advice pressure
of interested parties Its deep significance has been
painfully manifested within the past week. A Com
mission of FIVE in which more than three should
be of the same party, could attend its duties and
examine the condition of the banks without strain
undue procrastination For travelling expenses $1,000
iy an ample annual allowance. Three thousand
dollars per for each Commissioner is
sufficient compensation and equals the sal
airy of many of Superior Judges. The
entire cost of the Commission should be
betrayed not by the depositors but by the banks,
to which the amount would be mere bagatelle And
there reason whatever for any upon the peo-
pie for bulky printing that conveys available in
formation and actually dwarfs the annual reports of
the National Comptroller OF the Currency