The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1906-10-02
CHANGES IN
BANK LAWS
TERRITORIAL INSPECTOR MAKES
RECOMMENDATIONS.
Says the Penalty Is Too Mild and That
Defaulters Should Be More Sc
verely Punished Than Under
Provisions Of Present Law.

Guthrie, o. r., oct Some radi-
cal changes in the banking laws of
Oklahoma, and some especially string.
ent penalties for defaulting bank Of
Gcials are recommended in the bien-
nial report OF II. II. Smock, territorial
bank commissioner, which has just
been submitted to the governor. The
practical doubling of the number OF
banks under the jurisdiction of the
Oklahoma commissioner, through the
union of Oklahoma and Indian Terri
tory under statehood, makes IL es-
pecially necessary, in the opinion of
the commissioner, that the banking
laws should be revised providing
more stringent penalties for the viola
tion of law and clothing the depart
mcnt with authority to enforce these
provisions.
Perhaps the most noteworthy of the
recommendation is the one for an
Increase in the penalty for the crime
OF embezzling bank funds. Mr.. Smock
considers that a fine of 81 900 and i'm
prisonment for five years is wholly
inadequate punishment for the of.
fense, and would havc the penalty
raised materially. lie also recon-.
mends that the law repealed in 1903,
requiring the sale of bank stock on
which there has been default in pay.
ment, be re-enactCd
The present law, which does not al.
low the bank commissioner to close
an Institution and have a receiver ap
pointed until the bank Is known to be
insulvent, comes in for its share OF
criticism. II is held to be unjust both
- the bank and the depositors, and
to give depositol8 little chance to re
cover their money. 1t is recommendet
that the law provide for the appoint
mcut of a receiver at the instance ot
the bank commissioner, whenever If
is found that any state bank is bad
ly mismanaged and is In danger o.
becoming inaolvcnt, even though i
is solvent at the time.
In the commissioner opinion the
present provision of the Oklahom;
banking laws which requires that tht
total liability of any bank shall no
exceed 20 per cent of the capital stool
and surplus actually paid in, works
those engaged in moving the crops. II,
recommends that law he cnacte,
permitting a bank to advance fund
to assist in marketing agriculture
and manufactured products in al
amount not exceeding the paid up car
ital of the bank. The loans shoul
be limited to so per cent of the aC
tual cash values of the products, sc
cured by elevator receipts, warehous
certificates, yard tickets and insul
ance policies in sufficient amounts t
protect the bank against the losses.
Commissioner Smock points on
that in Oklahoma there are sti
eghty-one banks with only $4,000 car
ital stock These banks were organ
lied before the enactment of the LAY
OF 1905, requiring that the capita
stock should be at least $4,000.
new law should be enacted, in NJ
SmOcks opinion, requiring all bank
with less than $4,000 capital stoc
to raise their capital to that iigur
business.
TO correct the evil Of stockholdeI
with very little interest in a bank &C
ing as directors, the commissions
would have the law revised so as
require that any director should ow
at least 81 900 of the capital stoC
and make affidavit that this amour
is unincumbered. He ALSO recon
mends that the present law, whiC
requires that the stockholders sha
at no time contract an indebtedness
with their bank in excess of 80 p,
cent of the capital stock be revise
so that no part of the funds of al
bank shall be loaned to the Office
or directors thereof prescribing
penalty for violations.