The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-08-31
NEW LAW NEEDED
Minnesota Should Require AL Pri-
vate Banks to Incor-
porate.
Public Examiner Agrees With Crit
cism Of the Financial
Age.

Public Examiner johnson agrees en-
tirely with the criticism voiced by the
Financial Age Of New York against Min
nesota's failure to enact laws regulating
private banks. The Age says to-day:
THE failures within week of six
private banks In Minnesota call attention
to the lax banking laws Of that state,
which permit these non-incorporated con-
Germs to carry on business In their own
peculiar fashion without even compelling
them to submit to the formality of period
ical examinations by the public examiner
who. by the way. has been the recipient
OF much unjust abuse because of the re-
cent failures. He, however, is helpless to
remedy the evil, which may be traced to
the doors Of the Minnesota legislature.
The solons Of the state have at last been
furnished with an object lesson from
which it is to be hoped they will profit.
Wisconsin had similar epidemic Of dis
aster and the result was the passage Of
the new banking law compelling these
concerns to either incorporate or go out
Of business. Most Of them chose. the
former alternative and those that did not
will not be missed.
1.-THE failures have, unfortunately, fallen
upon a class Of depositors who could i'll
afford the loss of their bank accounts,
and many Of whom are ignorant Of the
distinction between incorporated and
private institutions. The result has been
to shake public confidence in the Mime
sofa state banks, which are really in ex-
cellent condition. Altho several of the
private bankers who went to the wall
were heavily interested in number Of
incorporated banks, the solvency Of the
latter has not been affected in the slight
est degree by the failures-a fact which
illustrates the efficiency of Public Exam
liner Johnson and his assistants, and a
convincing argument in favor of placing
under his supervision all private banking
concerns turnout the state.''
When the article was shown to Mr..
Johnson he said: "
There have been seven Of these fail
ures, instead Of six, and there are 249
OF those institutions still doing business
In the state, with no regulation whatever.
The commercial agencies reports show
that four-f1fths Of them have no f1nan-
cial standing. yet they are are allowed to
! advertise as banks and receive deposits
at will There Is nothing to prevent them
from throwing depositors money In the
river. If they refuse to return his de-
post on demand, he can get a Judgment
against the bank, but that is the best he
can do.
"section 1924 Of the statutes Of 1894 pro-
hibits such banks from advertising or
holding out inducements to depositors, and
requiring them to incorporate. 1t is void
for the reason that 1t failed to get the
necessary two-thirds vote in the house,
and was thrown out by the supreme
court. We have regulations for every
other class Of business that comes In con-
tact with the public except private banks.
II do not mean to class them all to-
gether. There are some strong private
banks, but there Is no reason why they
should not incorporate, and the public has
a right to require it. We will eventually
have to pass such a law as they have In
Wisconsin, requiring every concern which
does a banking business to incorporate
either under national or state laws 9tsq