Missouri Valley times. [volume] (Missouri Valley, Iowa) 1874-1931, 1900-11-29
banks under their management
loans and discounts Of the national

banks under their management
amounted to 1.75 per cent OF the total
loans and discounts OF the national
system.
The controller then says:
While these tables do not necessarily
indicate that national banking officers and
directors as a whole abuse their privi-
leses. and many of these directors loans
are among the safest owned by the cred
!tor banks, the controller believes the ta-
of properly framed law placing addi-
tional restrictions and safeguards around
these loans. In which, the experience of
the banking system teaches. is involved
lax use of banking funds
IN formulating provisions of law re-
strictlng loans to executive officers and
them so unreasonable as to drive from
such service the active. responsible and
honest business men Of the country. The
the safety of the depcsttors as Will dis
courage improper looming to directors
while not injuring the deposttors by dis
sumption OF the duties Of bank directors
ship by the active and responsible MEM
pers of the business community
safety OF Depositors:
Primarily. the law should have IN view
should be recognized that their safety Is
as much endangered b. the passage OF a
law which would drive good directors
q law which does not sufficiently restrict
the opportunity of dishonest directors to
abuse the powers of their position.
any law upon this subject should make u
distinction in the nature of the restric-
tioas upon directors who are not officers
WHICH win not involve as much of delay
IN the making of loans to them as In the
making OF loans TO the executive officers
OF bank. since the latter have the great
er 2pport y. and ia!itude for improper
The controller gives herewith copy OF
the bill introduced at the last session of
congress by Hon. Marriott Brosius, chair
currency ca. R: l2o43 Fifty-sxth corr
gress. first session., which has had his
careful eoHs'deraton and the passage Of
recommends. This bill has been drawn
SO as To insure a greater degree of safety
in loans TO directors and officers with
what Is believed to he q minimum of in
with the safety OF such transactions. 1t
pioper.y recognizes the distinction In. the
relations Of directors to a bank and those
sustained by executive officers.
1T will be noted that the provision
made by this bill for the fixing of line
OF credit for each director In advance re-
dnces to minimum the Inconvenience of
the. greater supervision proposed. After
such. line of credit has been fixed by
@he soard OF dlrsetors for an ndivdua
Within that limit under the proposed law
Than he is a. present.
Provisions of the Bill.
The text of this bill is printed in the
report. In substance, it provides that
no national bank shall loan to it's Off
GERS or employees until the proposition
for the loan shall have been submitted
in writing to the directors or executive
committee of the bank and approved
by the majority of them. A fine is
fixed for infractons of this section. 1t
provides that at any regular meeting
the directors of national bank may
fix by resolution the limit of credit
which shall be extended to amy direct
or. Within the limit of credit thus
fixed the executive officers, in their dis
oretlon, may loan TO directors without
ether action by the board. Unless the
limit of credit has been thus fixed an
application for q loan by director
must be in writing, approved by two
other directors. Such loan may be
made by an executive officer but must
be brought to the attention of the
board OF directors at it's next meeting
Tor purposes of record. A penalty is
provided for violation of this section.
The bill also contains the amendment
TO section 600, which, in his two for
MGR reports, the controller recon-
mended relative TO restriction upon the
general loans of bands.
Among other recommendations, the
controller strongly urges laws regu-
lating International and intercolonial
banking as distinguished from domestic
banking, ard prints in an appendix the
result OF Investigations into banking
conditions in Porto Rico, Hawaii and
the Philippines.