Oxford eagle. (Oxford, Lafayette Co., Miss.) 1876-current, 1902-05-22
!" STATE BANK SUPERVISION. y


oNltENlslou-
The principle Of state supervision snd
IN a great d~grre. oontrol Of business cor-
porattsn-. i not novel one In the Unifei
states and the rt<hf TO exercise u l. NJ
longer Op-u to disrussion We -. one ~
the chief and most striking manlfsrtations
OF this right Ia the national and state rail-
road commissions All great public cor
porations exercising stupcndous aud quasi
public functions. become. I'm time. -
Blended with and essential 60 the cvmmes.
eiai life aud exchanges of the country that
they seem almost governmental agencies
snd instrumentalities. But however great
the corporation. however far reaching and
powerful its service and functions. II l.
still only a creature. an ARTIFICIAL being
created either by state or national legisla
tion- Brought into existence by law. u
owes its every right. every rover. even lie
Itself. to the law. II possesses nothing ex-
cept what h delegated to IL. Therefore.
the creator. the law. has reserved the right
TO control. II need b.. the creature. the
corporation. and II Is difficult to attempt
to answer the proposition against th. au-
tkority. Especially has the right Of super
vision and control been asserted with re
spcct to the great corporate bodies public
interest. or Interests more properly speaN-
Ing. OF the whole public Therefore. We
see raIirosd eompanaieS. telegraph and ex-
press companies. fire AMI life Insurance
companies. hanking and trust companies
and like organizations subject to the opera
tiOn Of the principle.
II have wen asked. however. 70 discuss
only the right Of supervision ot banks by
the state. and am also expected 81 con
vince this serious and reflective body tha:
not supervision alone. but even official ex-
animation. with cuerctve or disciplinary
authority. shall be exercised by the state.
After conccding this right to the state.
the chief uiafters OF Interest 70 Us are era-
braecd In and may be emphasized by three
questions:
-First-why have state supervision OF
banks at allG
'-Second-lf had 10 what limit should Su-
perviSion cxtend7
Third docs government supervision
and examination inspire greater public con
rdencc and insure safer bankingl
In answer TO the nrst query. We may
reply that II supervision by the state over
corporations OF any character Is ever right.
then. la a greater deSrce than with any
other class. II Is right aud proper To su-
pervise banking institutions; a there are
no commercial corporations in the lana
which. In the exercise Of their powers. du-
ties and privileges. more vitality affect great
public and private interests than DO the
banks. The finances Of the world are man
aged through and dominated by the banks.
The banks of the world have become asea-
eies cf governments. not only in Countries
ike Great Bgitain. where the Bank Of Eng
Land is the direct arm of the government.
but a.so In free republics ike the United
States where they are nouiually separate
and apart Eighty per cent of the larger
public and private transactions are nesO-
tiated through banks Or with bankable pa
ger. Therefore. in this day. the nrst AMI
prime consideration u SOUND government Is
the question of sound finance. and the mat
ter 0i sound nnauce Il a matter more large
" determined by the banks themselves than
by all other agencies combined
In the nrst place. tneu. the question Of
proper ami sound banking Is a question Of
sound and pepper government. aud surely
the government itself should have some
voice Ia the exercise OF functions which IL
has created and authorized. aud which.
Aen sst ia motion, vif4lly reacts 0a itself.
IN the secvud Place, there Is no cvnIIn.r-
cial corporation which more vitality touches
ami affects serious and almost sacred pri-
yaIe interests than does the bank a he
nrst step taken 10y bank. after or-anizA-
tiou. Is to invite deposits. Ali eiasses Of
citizens. fiOEi the strong aud alert man OF
business to the weak and deIenseIess widow
and orphan. are invited aud expected 10 IN
trust tneir Iuouey. sometimes their all. ~
tine possession and custody of the bank. ~
- TIE cOnimusitys treasgrcF. dispenser
OF credit and a guarantee 10 delO-itors.
1t IS the channel through which tie meaI4s
Of all classes oT society must low. IL :
the guardian o. surplus capital aad one u
the most important faet0ts in Industrial de-
yelopnlcnt. - high 4 vocation should de-
ulaud sterling integrity and accuracy IL the
conduct Of business.
'-The baak hecvlaes. Ia 4 greater degree
than any other corporation htuciary.
a trustee. Even the life insurance com
pany. which more nearly approaches the
measure Of banks trusIeesIlp than any
other corporation, does Eot e4udl it.. IEe
insurance eVHlpdny 0uers business IL
duceIIent and counter benefit anu prOnt.
II blus for a mans surplus earnings; while
the bInk holds out 10 great prontable "
speculative returns 10 the depOsitor, Jet.
- has been stated. invites = deposit. R0I
Of 4 stated sum. but OF his whole account.
ais all PalI VI u mans earnings may :.
l0sL ~ the failure OF an insurance company,
while recklessness in the conduct OF the
zaalrs VI bank may easily tear down the
walls VI iadustEy, uissipate tie earnings
u years and destroy tue reputation " =
llIe. IateESOyen are lis Te-aIlols with =
community, and the nature VI its dealings
sUen. Ihat safeguards and Restraints
l1ay be demanded ami should be invited by
the bauks themselves.
We srant InaI the history OF banking N
Mississippi for the past ten or nfteen Years
coes n0t give rise 10 demand Tor closer
i1yeslsatt0a and inspection u the conduct
u its oaR2s. and IurtDeF, that supervision
wIlI hot absolutely prevent failure. as We
have sufficient eSIuence furnished W Othes
states and from the supervision vi national
oanks- This. however. Is 10 more an AK
Egnient against supervision than 1t Is 10
contend that no penalty should be imposed
because the death penalty has not prevent
cd murder.
The banks Of the land hold on deposit
more than - per cent of. all the money
owned by the peOp.e, and II Is out ot this
nloaey t1at nlOge than - per cent of the
Uank profits earned. Ilis being true,
and 1t being impossible 10 be otherwise &c
curately determined, the only recourse =
connolng puOllc could possibly have against
mistaken Judgment, excessive credit, FecA-
less banking and Improperly managed Dank-
ing corporations Is n0I oniy state superYi-
sion. but ofncial examination as well. \
better argument in favor VI the proposition
could lot be made than the assertion that
forty eight states and territories have lava
requiring supervision OF banks in some form,
while thirty-Ihree require oIlciaI exaulina-
tions, and only two or three nave No bank
lns laws At all \ strong argument in
favor Of state supervision and examination
Is the states not requiring o1ncial eX-
animation have an average of twenty-Six
state against tfty-three national banks.
while thOse requiring official examinations
have an average Of is0 state TO 10 national
banks The fact that for about forty
years the national banking system has
continued 10 prosper and the number OF
banks increase under the most rigid gov
ernment supel Vision aud examination Is !
forcible argument IN favor OF the policy,
even though such banks are granted some
extra privileges. Many claim that the bus
iness done with banks Is purely voluntary,
and that they have the right TO insist on
the same privacy In the conduct Of theiE
Affairs the individual. without the in
terference Of state supervision. and they
further assert that state bank examiners
would be Il menace TO success, for the reA-
son that the business secrets OF a bank