The Montgomery advertiser., 1901-07-16


 then let us have all the safeguards we public examiner of all banks, trust | companies and banking institutions or bankers in the State.
 1e is very clear that the private bank CTS apparently and the State bankers are the ones who are kicking here to- day. We do not find the national banks kicking. AS has been said by my friend from Greene. they have found the good in this thing. and we big depositors, to the amount of five or ten dollars it may be do not mird having bank examiners know we have got that five or ten dol lyars in there, but we want it to be safe, or just as near safe as the State of Alabama can make it.
 Mir. Coleman (Greene)-I rise once more in behalf of the public interests. There are great many communities where you could not do a National banking business profitably at all. par ttcularly in agricultural districts. Under the National banking act any State bank can be converted into a National bank without any trouble The law is ample. but because of the re- moteness from commercial centers, and because of the necessity of supplying
 
 tue of the State laws, can take secur- ity upon his crop. upon his mules, or upon his lands. The bank can furnish him money to run his crop, and you cannot do that under the National banking system, without evading the law. and the State banker would do an honest. straightforward business under the State banking law. This is the first Convention I have read of. and I read a good deal on the subject. where the people of a State did not interfere to protect their own institutions. Here the purpose seems to be to strike down, as far as possible, your State banks, and elevate your National banks. The very purpose of the amendment offered by the distin- guished delegate from Montgomery is locking forward to a time when State banks can do business upon other lines. You could not carry on that kind of a business under the National banking system. You could not issue State bonds. Nothing but National bonds would do, and 1t seems to me it is time to call a halt. You now have your State examiner provided for. You have now duty imposed upon State banks, twice year to furnish a sworn state ment, and now you propose to hamper these country banks still further. I say. Mir. President, and delegates of this Convention, not only is this legis- lation, but if you desire to keep in a satisfactory condition, and perpetuate your State institutions it Is time to withdraw burdens from them.
 Mir. Henderson Pike)-I do not think there is any necessity of making an exception as to National banks, as proposed in the amendment. because the State has no authority over Ma tfonal banks in any way.
 Should this State adopt the system provided in this section, requiring ex- aminers for the banks, those examiners could not examine a National bank. notwithstanding 1t were not excepted | from this provision.
 Now there seems to be an erroneous idea upon the part of some of the mem bers of this Convention as to the pur- pose of the examination of National banks. They are examined to show whether or not the officers of the bank | have complied with the National bank ing law, which law prohibits the Ma tional banks from lending money to any one person.
 MT. Malone-Do you say that the prime motive is not to find out wheth- CT the bank is insolvent or not? MT. Henderson--I mean exactly what l said. that Is to ascertain whether there is violation of the National banking law by the officers of the Ma tional bank.
 That law provides that a National bank shall not lend more than one tenth of its capital stock to any one | firm, corporation or individual. The examination, in one sense, is for the purpose of seeing whether that law is | vii ioia tional banking law is that a certain percentage of the deposits shall be kept on hand in cash. The National bank examiner goes to the bank and the very first thing that he does is to tell the cashier to hand over the keys | to his chest or money safe, and the next thing he says is: Hand me your keys to your bills receivable The examiner never informs the cashier in | advance that he has come, and this is for the purpose of keeping the cashier from replenishing his cash from other sources. after he finds that the exam finer is in town, and in handing over his | keys to the bills receivable it is to pre- vent him from substituting or swapp- | ing notes in order to cover up some er- | TOT or some mistake or fraud, he is try | ing to perpetrate upon the government.
 Now we have no State banking law in this State except the general pro- vision that persons can associate them selves together and organize a bank under the banking law. The State does not provide that a State bank shall only lend a certain percentage of it's money or capital, to sny one firm, corporation or individual. The bank can, absolutely lend all of it's money, capital and deposits to one firm, cor poration or individual, and 1t is not in violation of any State law. Then, what is the purpose of the examina- tion?
 Speaking of the amendment, why should the State seek to investigate the affairs of a private bank any more that it should seek to investigate the affairs of any other private busi- ness? The private bank is not operat- ing under a State law, but is operating as any otl CT individual conducts his private business, and people put their money into private banks, State banks and National banks because of the confidence they have, and not because the banks are examined.
 As an instance I will read to this Convention some comments of the American Banker on the recent failure O fthe Seventh National Bank of New York. This is read for tine purpose of carrying out my argument, showing that it is not matter of examination which causes people to put their money in banks. but simply a matter of confi- dence in the mana cement, confidence l in the managers, OF because of personal or political influences.