Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1905-02-01
SUPERVISION OF
PRIVATE BANKS.
I, ", Wilson OF Salt Lake Dis
cusses the Anderson Bill
Governing Question.
IN FAVOR OF PROPOSED LAW.
Says More Private Banks Failed Than
State Financial lnstltutons--Pu Puts
1t Down to System,

II. w. Wilson who WAS a member Of
the Legislature eight years ago in dis
cussing the II. 70. No. introduced by
Representative j, A. Anderson and per-
talning 10 private banks and their ex-
animation by the state examiner this
morning in an interview with the
News" said
"The bill now before tho Utah Leg
stature authorizing the examination
OF private banks by bank examiner,
brings up anew this question; For
many years there has been a growing
sentiment In favor OF state supervision
over these Institutions. Tho improved
condition Of state banks as the result
OF state examinations has suggested
the way for Improvement of private
banks. There are but few states left
that do not examine state banks and
each year is added numbers to the list
that are requiring examination and
supervision Of private banks as well.
AS an evidence OF the satisfactory re-
suits from these examinations bill
to reape,l such a law Is an unheard Of
thing. The private bank is as much n
public Institution as a state bank
When state permits corporation or
individual to write bank" over it's or
their business house, II should MS
sumo the responsibility OF seeing to Il
that there Is sufficient capital behind
the institution and such management
as TO warrant a safe and conservative
institution, In which the public may
deposit funds.
STATEMENT NOT SUFFICIENT.
"A published statement which can
not be checked, Is not sufficient IT
does not answer the logic Of the situa-
tion to say that the private bankers
of Utah are men OF great means and
In every way above reproach. 1t 10
all the more Important that we put our
house I'm shape while It can be done
without loss TO the deposltor and with
out Inconvenience to private bankers.
The future as well as the present
should be leglslated for on this sub
ject,
"Thc argument is used that the Gus
toners Of private banks do not want
their business inspected, yet so far as
/ have ever known, 10 committee OF
depositors has ever appeared before
a legislative committee In Utah to ad-
wise against making private banks sub
ject TO examination. The proprietor
however, is always on hand and pur-
ports to speak for the depositors by
reason of an unwritten proxy
is A GOOD SYSTEM.
The text Is and should be; Is bank
examination right2 does Il tend Il
make banks more safe? Upon the
question Of results, no sane man who
| has watched bank examinations, ma
| tional and state will question It's Nd-
! visibility As bank examination has
| been improved, failures have been les.
sened until the safety Of banks meas.
ured by failures Is without question as
| follows
First National banks.
Sec1nd--State banks.
Thrd--Prlvate banks
"In other words, more private banks
have failed than state, and more state
banks have failed than national, al
on account Of the superior examina.
| ton by the government OF natlona,
| banks.
WILL LESSEN FAILURES.
mo bank OF standing whose nstitu.
ton has been subject to examination
can be found who will not approve OF
tho system. The private bank that Is
sound should have no objection to bI
examined, and the state should not wal
for permission of the private bank II Il
| is not solvent. The bank that IL goOC
| without examination is better with ex
animation. Bank examination VIII mo-
| prevent failures, but II VIII and does
lessen them materially
ut is a natural weakness of all bank
ers to believe that their particular in
| stltuton is In first class shape and fire.
quently do not discover the contrary
until Il is pointed out by someone o.
authority as he examines It's notes ant
colaterals from the standpoint OF {
| dislnterested public servant.
"The first published statement mad,
by Mr., Schettler after the receiver tool
charge of the bank was that his assets
would pay 100 cents on the dollar Thu
| receiver, however, after two months IN
vostigatlon suggests that % per cen
on the dollar might be nearer right,
National and state banks are re
qulred 10 keep in reserve, a certail
per cent OF their deposits They ar
prohibited from loanlng to exceed /
and 10 per cent respectively OF thei
capital to one individual, firm or cor
| DUIhAlpIt ~ lllNhNN Rallh - NV ~
quired 10 keep any part OF its deposit
on hand, neither Is It prohibited iron
loaning its entire capital or its entlr
deposits to one individual firm or cor
poratlon.
PERFECT BANK SYSTEM.
"The perfect bank system is one 1
which the entire public has confidence
This can never be (here or elsewhere
unless the public has representatiy
who can verify published statements
count the cash. and check up the col
laterals Of the private banks as wen a
the state and national banks. Persona
pull and personal interest should not b
permitted to stand longer In the wa
OF public welfare.
1.-THE governors message to the Leg
lslature recommending that puyat
banks be made subject to state super
vision the same as state banks, Is time
ly ana his arguments ore unanswel
able"
Mr. Wilson Is greatly interested !
this proposed measure and eight year
ago introduced a similar bill In N
Utah Legislature.