The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-03-19
BANKING LAWS
AS AMENDED
Section Relative to Bank
Examiner Revised.
NO DAYS OF GRACE
Several interesting and Important
Changes Were Made, Beneficial
to the People, to Farmers,
to Bankers and to
Others.
Others.
BY s. A. WOODARD.
Chairman of the Committee on Banks
and Currency.

Chairman of the Committee on Banks
and Currency.
The work assigned to the Commit
tee on Banks and Currency OF when
l was chairman on the part OF the
House of Representatives was largely
Of the routine character. Very few
| changes in the present banking laws
were suggested, and not all OF the
| changes suggested were enacted into
| law. The most important change IN
| the banking laws, suggested, was
| bill introduced by Senator Webb. The
| main features We're:
1st To make the minimum capital
stock of a bank ten thousand dollars.
End. To amend section II of the
Public Laws of 1903, chapter 275,
| striking out the line of bank on its
shares of stock, for any debt or other
obligation due them by the stockholder
| of such shares.
3rd To allow the Corporation Conn
mission to appoint a receiver for an
| insolvent bank
This bill failed to pass, except the
amendment referred to in section II
/ of the Public Laws of 1903
To my mind this is a very impoT-
| tant change in the law Bank stock
| should be the best class of collateral
/ security, and under the law as amend
ed, such stock is made negotiable, di-
| vested of any lien, and will be of great
benefit to the holders of bank stock.
Another change in the banking laws
| is the abolition of the three days of
grace on notes. There is no reason
| why a note made payable q day GER
| tain should have three days grace, be-
/ cause the party who executes the
note knows when it is due. 1t was sug-
/ gested that the days of grace on sight
/ q nhOliChnH
/ this proposition, would not agree. 1t
| is probable that it would have been
| of some convenience to the banks, but
on the other hand, it would have
caused great hardship on good many
worthy merchants in the State, who
are using their best efforts to uphold
and maintain their credit.
The maximum fees for protesting
a paper was fixed by legislative en-
actment at one and 25-100 dollars.
I drafted. and had passed a bill
| to make warehouse receipts for cotton
and other commodities, valid in the
| hands Of purchasers for value without
registration.
This law will be of great benefit to
! our farmers who desire to deposit their
cotton in bonded warehouses and draw
| money thereon from q bank Under
| the law before this change was made,
| q warehouse receipt would have to be
recorded in the Register of Deeds
office in the same way as any other
chattel mortgage.
| This would have been very objec-
| tionable to most of our people, and
would have prevented the storage of
cotton by many of our farmers.
! A large number of bills for char
! tering and amending the charters of
| banks were presented to us. We had
| to carefully scrutinize each and every
one of them, in order that we could
| make them comply with the law
| In my judgment the. majority Of
! banks asking for charters wanted the
/ Legislature to grant them powers, out
| side of legitimate banking A great
many of them asked for power to do
an insurance business, to collect rents,
! to buy and sell real estate. In every
| instance we limited the bank, so that
| they could not hold more than one
| fourth of their capital stock in real
| estate.
A depositor, who carries his money
| to bank for safe keeping, is not adj
| vised of the fact that some banking
! institutions have the right, under the
| charter, to speculate in real estate,
| guarantee bonds of other corporations,
to engage in fire insurance, etc.
! Information has reached me that
certain corporations doing al banking
| business in this State under the liberal
| charter granted them, are lending
money for their customers, and guar
anteeing the payment of principal and
| interest by endorsation, and still are
| not required to report same in their
! published statements as a liability.
This is not fair to the people of the
State, and certainly not in keeping
with my conception of legitimate
| banking.
In the rush of legislative work it
is possible for a bank to obtain
charter granting dangerous powers,
which if observed would in all prob
ability work loss to its customers. and
undermine the confidence of the gen
eral public in banks generally.
Every bank failure affects more or
less every bank doing business in the
State
In my opinion, it would be wise
that when the next Legislature meets
the chairman Of the Senate Bank Com
mittee, and of the House Committee
together with the Corporation Cora
mission confer and formulate q gem
eral Banking Bill for the consider
alton Of the General Assembly giving
the Secretary of State the exclusive
right to charter all banks, and limit
ing the said act, the powers to be
conferred to all banks chartered UNI
der the act BY this means safe
guards would be thrown around every
banking institution chartered, the
powers granted them would be uni
form, and spirit of conservatism
would thereby be nourished.
S. A. WOODARD.
-
~ ~ ~ ~