The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1902-05-24
and subject the latter to unfair and unjust

and SUBJECT the iAtter 70 unfair ana UNJUST
I'm answer to the second question, 10
seems to be the prevailing rule with those
states having the most com 'rehensive and,
perhaps. best, laws Oh the subject, to re
quire not less than four official statements
annually, which are published. and one re-
quired annual examination, with the right
OF inspection, as often as desired by 4 bank
examiner. The examiner Is required to
have all statements conform to u uniform
rule. 10 see that a certain percentage of the
assets be at all times available; that over
drafts be altogether prohibited. except On
Immediately available collateral; that no
loan I've allowed as an asset which Is more
than six months past due; tha; only a GER
tain percentage of capital and surplus be
loaned TO an individual or firm; that no
bank ne allowed to borrow, either by re-
discount, note or otherwise, more than ona
and one-half times its capital; that officers
and directors be prohibited from overcheck-
ing, and that the former be prohibited from
borrowing OF their respective banks.
These rules or requirements could not
be Objectionable, and should, l think, with
penalties for enforcement, be about the
limit of supervision.
In answer to the third question: A
very forcible argument in favor OF the
proposition Is that all of us who have bank
ing experience can testify to the fact that
governement inspection does create ron.
idence, for who is there among us, when
having a collection to send to a remote city,
out OF the usual course, does not turn 10 a
bank DIRECTORY anu select the name of some
national bank, and why? Not because a
national bank Is known to be better, bur
rather because government inspection IN.
spires greater confidence. Again, why e
1t tnat. out of more than 1924 banks In Mis-
slssippi all have one or more national bank
correspondents, while only twenty four
have each n state bank correspondent Why
Is II, as a rule there are a few exceptionsL,
mat national banks have larger deposits
ana receive more items for collection? The
answer Is obvious, because of confidence
created by official bank examinations. Evil
IDENTITY the argument is convincing, and we
are committed by our own acts to not onlv
state bank supervision, but to official exam
ination as well; and those Of us who Object
evidently do so from a selfish motive, or
possibly through a desire to continue the
practice OF unbusinesslike methods, as state
ton would assist. rather than interfere.
with legitimate banking transactions. by
preventing. as far as possible. unbusiness.
like methods and other abuses.
III 1t were generally known that each Of
our states had good and wholesome bank
Ing laws. and enforced them. under the
strict supervision of bank examiners, It Is
possible that our state banks would. aud
perhaps rightfully should, excel national
banks In deposits. as well rs in general bus
mess Such laws would inspire gxeater
confidence, and bring deposits, and depos-
Its swell profits.
I'm conclusion. we have a good insurance
law; why not go one step further in prog
Tess ana ask Tor a conservative, yet effect
I've, banking lawf II the banks will take
the Initiative by drafting a proper law,
they can avoid unwise and perhaps danger.
Gus legislation. They can put into opera
ton a law devised out of the wisdom, ex-
perlence. honesty and patriotism of the
bankers: and while the ignorant NAV sns-
pect their motives. we know the law would
be good. for the very existence and prosper
ny or the well-managed sInk Is founded Oh
honesty and patriotism"