The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-03-11
"A Gold Brick.

news! r
"A Gold Brick.
It looks as if the state senate COM
mittee on banking were very much more
concerned about the passage Of an act
to afford protection to some thirty or
forty private banking institutions than
they are to secure for the public rea-
sonable protection against unsound
banking principles and unsound bank
ing institutions. N
The compromise bill, introduced
Wednesday, is supposed to meet the re-
quirements of the resolutions adopted
by the Minnesota Bankers association;
and in few particulars it does. In
some other important particulars, how:
ever, it does not.
specifying the amount of capital ac-
cording to the size of the town in which
the bank is located and dealing with
certain other comparatively unimport'
ant or matter-of course things, it pro-
vides that the superintendent of banks
may require statement of the condi
tion Of all private banks on the first
day of May of each year, verified by
one of the chief officers or one or more
of the principal owners. Receiving
money into an insolvent bank is made
a crime just as in the case of state
banks, and it is provided that the SUI
perintendent of banks shall once each
year, or as often as he thinks it neces-
sary, make thoro examination of all
private banks. It provides for the ap-
pointment of receiver in the case Of
insolvency and makes false statement
of condition a felony, with imprison-
ment as penalty.
There is just enough in this act to
make it a source of mischief. It seems
to establish over the private bank just
supervision enough to create public
confidence in it. Apparently, however,
the Trainer of this bill forgot few very
important matters. While not less than
five people may start a national bank,
and not less than three may organize a
state bank, one man can start and run a
private bank at his pleasure. -.
No national or state bank may &C.
quire or deal in real estate except such
as is necessary for it's banking house or
such as it takes in. settlement of debts
previously contracted. This proposed
bill, however, puts no restriction on real
estate speculation by the private bank:
err. He may, if he sees fit, invest freely
of his funds, which means the money of
his depositors, in real estate specula-
ton. 80" "
Both national and state banks are re,
quired to make periodical reports to the
controller Of the currency, or. the
state superintendent of banks, and in
such reports must definitely answer Ger.
tain questions. This act gives the bank
Eexaminer, no, authority to prescribe a
particular form for the: report Of the
private banker - 49, .s...:.? -. ~:
Both national and state. banks are re-
|quired to keep ON hand certain cash
reserve, which is supposed to be q wise
Eprovision, but this private bankers : bill
does not require a private bank to KEEP
on hand one cent of. reserve. Both
national and state banks are limited as
to the amount of loans they may make
to individuals, to. firms or to corpora
tions, but this bill does not impose any
restrictions of that kind. A private
bank may loan every dollar it has,ci il
sees fit, to one person. Section nine OF
this bill provides that no more than Il
per cent Of the, actual capital and sur
plus of the private bank may be: loaned
i to any private banker, officer, servant
or agent of any private bank, but it i'm
poses no such restrictions as to. the
amount it may loan to any other Dor:
rover. A private bank may loan every
dollar Of it's capital if it sees fit to one
single person and no one may object.
l. The important provision of the state
banking law requiring state banks to
publish sworn statement of their
condition five, times each year does not
appear in this bill, nor is>there any pro:
vision requiring the private bank to
publish its excess loans, which would
indicate at once whether more. than
Is per cent of the capital stock had
been loaned to any one Individual or
concern.
| The bill appears to have been drawn
with a view to conveying the impress:
sion that the restrictions imposed are
similar to those of the state banking
law, but if the legislature will kindly
drop the matter altogether, it can do a
better thing for the banking business
of the state, the reputation Of Mime
sofa and the interests Of the public
than it will be doing by passing this
law. The effect Of this bill is simply
to create an impression Of security
where the regulations do not establish
it.. That ay.be a good thing for the
private banker, but it has no regard for
the interests of depositors.
Kuropatkin has not even time to regret
to report He is sprinting away over the
union schedule. !: Vs. .... "
Victory for Shippers.
The merchants and shippers Of Min
nesota have shown that they can exert
an influence on legislation, if they once
get together and make an intelligent
n m for ,x-bo% 4bov NH o,<