The Birmingham age-herald., 1907-12-18
BANKERS REPORT
 ID THE GOVERNOR Committee Suggests Changes
 In Banking Laws PENALTY FOR HIDING FACTS Suggestions Are Made That Loans Be Limited and That Banks Be AL
 lowed To Use Certain
 Stocks as Collateral.
PENALTY FOR HIDING FACTS

Albany, N. Y, December 1.-The com mittee of bankers appointed by Cover nor Hughes on November 1S during the severe days of the monetary panic, to recommend notifications of the existing banking laws of the state of New York, made its report to the governor today. The committee was selected from leading bankers and trust company managers and was called upon to suggest meas ures which would tend to prevent the development of pancs such as the one that Wall street has just experienced. The report, in general, expresses the view that in New York city, state banks should maintain the same cash reserves as na- tional banks. namely 25 per cent, and that trust companies should maintain also 25 per cent reserve, not neces- sarily all In cash, in It's own vaults. A strong presertment is made against the practice of promoters obtaining control of chain of banks to further their own financial schemes.
 While the committees recommendations can apply only to state banks and trust companies in New York city and state,
  bility on the part of the citys finan- cial institutions Is shown by the state ment in the report that New York is the empire state and New York is the financial and commercial center of this continent" It Is for this reason the com mlttee declares that New York cty's s cash bank reserves must not be permitted to become impaired.
 In the matter of investment and loans the committee recommends that it be made compulsory that all loans, dis counts and purchases of commercial pa- per shall be referred to the directors or submitted in written form at the meet ing next succeeding the making of the game and intentional concealment of the making of such loans, discounts or pur- chases should be made a mlsdemeanor : and would penalize the interchange of de- poslts by which directors and officers oi others who loan indirectly to themselves Pointing out that the capital stock of all banks and trust companies doing bus mess in the state of New York amounts in round numbers to s263, FOG. GOO and that the market value thereof is several times larger. the committee says that if would be clearly an invdious and unjust dis crimination against banking investments to prohibit the use of such stock as collatereal for loans.
 It is suggested, however that loans upon such capital stock be limited to 10 per cent of the capital of the cor poraton whose stock Is offered as col lateral.
 Of so-called "underwritings' the com mittee declares that while individuals and private banking houses may legiti- mately participate In such cases 'an in- corporated bank or a trust company as- sumng to discharge trusts of the highest fidelity natrally has no right to be en- gagged, through the instrumentalty of a syndicate or underwriting agreement in the construction of trolley lines. power plants or other enterprises of like char acter."
 It would also forbid any loan or ad- vance where the institution Itself Is lia- ble in any event for its repayment.