Connecticut western news., 1907-12-19
URGES BANK REFORMS
Special Banking Commission Re-
ports to Governor Hughes.
WOULD RESTRICT BRANCHES.
Thinks Institutions In New York
Ought to Have $500,oo0 Capital Be-
fore Opening and Trust Companies
Reserve of 25 Per Cent.

0uSnL TO nave poOU,UOO IdPlIai De-
fore Opening and Trust Companies
a.Reserve of % Per Cent.
Albany, N. Y, Dec. 18.-Governor
Hughes made public the report of the
commission headed by A. B. Hepburn
appointed by the governor to suggest
amendments to the state laws govern
Ing financial institutions with a view
of remedying defects uncovered by the
recent financial panic All the mem
bers agree on every recommendation
made except as to the reserve trust
companies should hold. There is diff
ference Of opinion between the trust
companies and banking representatives
on this point.
The commission, which consisted, be-
sides Mr.. Hepburn, of Presidents Ed
ward s. Marston of the Farmers Loan
and Trust company, Edward w. Shell
don of the United States Trust COM
pany, A. S. Frissell of the Fifth Ave-
nue. bank, Stephen Baker of the Man
haitian company and Andrew Mills of
the Dry Dock Savings institution, all
of New York city, recommends first
be given veto power upon the estab-
lishment of bank or trust company
or a branch of any existing bank or
trust company or the purchase of the
control of one banking institution by
another.
''It should be within his province to
prevent the organization of such insti-
tutions by improper men or their estab-
lishment in localities where business
conditions do not reasonably assure
their success
To Restrict Branch Banks.
The committee believes that banks in
New York city should not hereafter
be permitted to have branches unless
they possess a capital Of 100000, and
we think that both banks and trust
companies should be required to fur
nish an additional 100000 capital for
each branch opened"
The committee disclaims any opposi-
ton to the organization of small banks
believes they are necessary and ben
eficial-"it is only the organization of
banks by people without banking ca
pacity or without proper motive for
seeking such organization"
The report, as whole, is practically
unanimous. All the recommendations
are concurred in by Messrs. Hepburn,
Baker and Mills. Mr.. Frissell would
increase the requirement for trust COM
pany reserves still more than recon-
mended by the majority, and Messrs.
Marston and Sheldon would have
scale Of reserve requirement governed
by amount Of deposits.
In general the committee would in
crease and make more direct and init
mate the supervisory power and con-
troll Of the superintendent over all mon
eyed institutions, including banks of
discount and deposit, trust companies,
savings banks, safe deposit companies,
mortgage loan or investment compa-
MES and building loan associations, so
that he could directly direct the dis
continuance of unsafe practices"
To Guard Loans.
In the matter of loans and invest
ments the committee details at length
some of the methods more commonly
resorted to for evading the restrictions
of the law, recommends that it be
made compulsory that "all loans, dis
counts and purchases of commercial
paper shall be read to the directors or
submitted in written form, and inten-
tional concealment of the making of
such loans, discounts or purchases
should be made misdemeanor;;"
would penalize the interchange of de-
posits by which directors and officers
or others loan indirectly to themselves
or "are enabled to obtain control of a
chain Of banks" and of this practice
says: "Of course no reputa BILE bank
would be party to such transaction,
and the penal code should prevent such
practice on the part of any And in
this connection, we think, the law linn
iting loans is too liberal, and we rec
ommend that the amount which any
institution may loan upon collateral to
any one interest be reduced from 40
per cent to % per cent"
Trust Companies Reserves.
Concerning trust companies reserves
the commission finds that reserve
of rs per cent should be maintained
by the trust companies in the city of
New York proper borough of Manhat-
tam, of which Is per cent should be
cash on hand and 10 per cent cash in
some bank or trust company approved
by the superintendent of banks"
The committee recommends also that
in 'the reserve cities" of Brooklyn and
Albany state banks and trust compa-
MES should keep the same reserve (25
per cent? required of national banks
and in other places should keep Is per
cent.
Cuban Strike Is Ended.
Havana, Dec. 1S.-The Western rail-