The Montgomery advertiser., 1901-07-16


 custom. They delayed meeting large draft against them by the Clearing House on a certain day.
 MT. Malone-Isn't it the fact that the bank failed because they loaned one concern, in violation of law, H,600,O00?
 Mir. Henderson--I will answer that in time. Now because this bank was late in meeting it's obligation for some thing over LOCO .000 through the New York Clearing House upon particular day, not because they did not meet it, for they did meet it. but because they delayed in meeting 1t. contrary to their usual custom. the State bank examiner was sent to make an investiga- ton, and when he made his ex- animation he found that this particular bank, the Seventh Nationaal Bank of New York had loaned one firm in the city of New York $I .600.0 900 when its capital was only s30O.000. Under the banking law it should not have loaned this firm but s3o,o00. and in fact 1t did lend them S1.600,O00. I say this to show you that it was not primarily because of the examination of the off, cer that it was discovered the bank had violated the law, but because he was sent there to examine this bank. the bank having failed to meet it's ob- ligations. as was it's usual custom.
 The President--The time of the gen. tleman has expired.
 M:. O'Neal Nauderdale)-I do not think the purpose of this amendment is to strike down the interests of the private banks. but rather to increase their efficiency and usefulness. Now the gentleman says in his argument that the system of examina tion of the Nationa! Government for National banks has proven utterly inefficient. It is strange to me that If the system which now prevails has been as ineffi- cient as the gentleman claims. that Congress still retains it.
 The experience of every man who has any familiarity with National banks shows that it is safeguard against fraud and corruption and insolvency. That is all we seek. What is pri- vate bank? This amendment just says that a private bank must be put in tho same category as the incorporated bank. The private banker asks the public to deposit money with him; they invite the widow, the orphan. the helpless aIul ignorant. to come and de- posit their money with him, and we simply ask that the same safeguards and same protection should be ac- corded to the depositors in a private bank. that are guaranteed to the de- positors in an incorporated bank The experience of every community shows the necessity of this action. In my own town. a bank that did the busi- ness of the whole valley, that had been insolvent for over twelve months, re- ceived deposits up to the very hour 1t closed its doors If this examina- tion had been made and the fact that 1t was utterly insolvent had been known thousands of poor, helpless peo- pie would have been saved from ruin and penury, and yet. as the gentleman from Greene says, that banker had the confidence of the entire community. He was a man of standing and had the confidence of the business public. They deposited their money there. on account of their implicit confidence in his high character and integrity and knowledge of the business. and yet that bank failed and men deposited their money there up to the very last moment. Private banks were organ ized in our communities up there with out a dollar of capital, and who be- came the victims of these Institutions? Not the shrewd business man. but the ignorant and the unwary. the poor working man. and 1t is our duty to throw safeguards around that class of people in this State. That Is our pur- pose. The shrewd business man may ascertain the condition of the banker, when the bank doors are swung open inviting the public to make deposits, but the poor and the ignorant go and make their deposits when in fact the bank may at the very time be abso- lutely insolvept. simply Spreading a net to catch the Anwary. I say that not single argument can be made here in favor of exempting private banks from this examination. The same ar gument which applies to an incorpor- ated bank would apply to a private bank.
 Mr. Coleman (Greene)-Don't you know that with private association not incorporated the parties are liable for every dollars worth of property they have?
 they are liable. They may be liable, but they may be insolvent, and if the fact of their insolv- ency were known, the public would not make deposits. and the public would not be robbed as is sometimes the case. l have known instance after instance where the public was simply robbed. because the condition of the bank was unknown. If these reports are made and the public are informed of their condition, then we take it out VI lhCi. pONCE tO pClpclIdlS d lIduu OL | that character. So the principal pur- pose of these examinations by the na- tional government, is not to see that the officers have compiled with the laws on the subject of banking, but it is to acquaint the public with the fact of whether or not the institution is solvent or insolvent. Let the pri- Vate banker make known his resources and then the public can determine whether he Is solvent or insolvent, and then if they do not want to deposit they need not do so, and if they make | a deposit they do it with their eyes open.
 MT. Coleman (Greene)-Did you ever hear of National Bank Examiner making any report on a bank? MT. O'Neal-He does not make a re- port, but he makes the examination. and he ascertains its condition, he knows if 1t is insolvent or violates the law, and makes it known to the Comp troller of the Currency, and if the banking institution Is violating the law, or if it is insolvent. it is closed, and so if a private institution is insolvent, it ought to be closed. and closed by the State of Alabama. MT. deGraffenreid-Dont you know that a National Bank Examiner does not pass upon the value of the securi- ties of the bank the notes and other evidences of debt that they hold? Mir. O'Neal-Why, I think that the National Bank examining system can be improved. and ought to be improv- ed. and l am satisfied that the legis-