Evening star., 1901-08-01
A Subject That is Interesting Treas
ury officials.
CONSIDERING LEGAL REQUIREMENTS
Secretary Gage Suggests a Way
of Meeting the Law.
APPLICATIONS FOR CHARTERS


| eEdeavoring TO overcome a handicap which
has existed ever since the acquisition of
Porto Rico in the way Of the establishment
of national banking institutions in that
island
As the law bearing upon the subject is
now framed every discouragement is lent
to the investment of American capital in
this respect. and it is contended in many
quarters that something must be done to
furnish more favorable statutory provision
in order that capitalists of the country
meditating such investments may engage
In the national banking business in the
island without being obliged to live down
certain provisions Of the law which are OBJ
jectionable
National Banking Law Applicable.
Under the provisions of the Foraker act
all laws of the United States applicable to
Porto Rico may be enforced there. The con-
troller Of the currency recently wrote the
Attorney General for an opinion as to
whether the national banking law OF this
country could be considered as applicable
in the premises. A reply was received stat
ing that it might be enforced.
In the meantime flood of applications
had been received at the controllers office
by capitalists located at various points Of
the country expressing an intention to en-
ter into the national banking business in
the island and requesting information on
the subject for their guidance. In answer
to these letters the controllers Office was
obliged to reply in way that threw an eff
fective damper on the propositions. The
following provision Of the general banking
law was cited:
Every director must during his whole
term of service be a citizen of the United
States and at least three-fourths of
the directors must have resided in the
state, territory or district in which the as
sociation is located for at least one year
Immediately preceding their election, and
must be residents therein during continu-
ance in Office
This is United States law but is held to
apply also to Porto Rico. The stumbling
block furnished therein is the provision
that three-fourths of the directors must be
residents of the territory for at least one
year prior to their election.
Or the many applications for the estab-
lishment of national banks in the island
received at the controllers office-involvtng
many thousands of dollars of capital pur-
posed to be invested-only one is consider
ed still open, all the other applicants hay-
ing resigned their Intentions as soon as the
provision quoted was communicated to
them. The experience has been, therefore,
that none of the American citizens desr-
Ing to engage in the business in Porto Rico
has been willing to become a resident Of
the island for a year before the election
of the directing body of the proposed
banks.
The San Juan Project.
In one case, however-that OF the pro-
posed First National Bank of Porto Rico"
to be located at San Juan-the papers are
being held open until the exact status of
native Porto Ricans in the matter Of citi-
zenship shall be finally decided 1t is the
intention of the projectors Of this institu-
tlon to dispose of a great deal of it's stock
among natives. who will probably be elect
ed in the majority to the board Of direc-
tors. but until the citizenship question
shall have been settled conclusively this
cannot be done with any degree OF GER
tatnty to the future legal standing OF
the bank. All the other applications and
papers on file have died, however the pro-
vision In the matter of one years residence
being considered by the capitalists inter-
ested as too much of a handicap in the way
Of doing business.
Secretary Cages Suggestion.
In speaking Of the subject Secretary
Gage said to a Star reporter this after
noon:
This Is a question that has just been
called to my attention. 1t seems to me
that there are but two alternatives in the
matter One Is for Americans intending
to establish national banks in the islands
to live there for year before going upon
the board of directors and. the other Is for
those interested to elect native Porto Ri
cans-when their citizenship status Is fixed
conclusively-tO the directing board 1t
seems to me that this latter method may
be easy and practical Of adoption. Porto
Ricans might be selected to the board vet
the active management of the bank might
remain in the hands Of Americans Some
Of the principal officers might be Ameri-
cans, notwithstanding the selection of a
Porto Rican element upon the board of
directors. This, to my mind. Is the best
way to get around the objection stated by
those who do not care to live in the island
for period Of one year prior to the es-
tablishment OF the banks"