Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1908-05-16
LIMIT PER CENT
OF BANK LOANS
DELEGATES DISCUSS PLAN OF
RESTRICTION
SAVINGS AND COMMERCIAL
HOUSES MAY BE DIVORCED
legislative Committee of State Con-
vention at Pasadena Considers
important Me- pres - Big
Party on M Lowe

Probably the most important ses-
sion of what is declared to be the
most important financial convention OF
years was held this afternoon in the
Maryland hotel when the legislative
committee on reform in the state bank
ing laws, and which includes Senator
Leavitt and Assemblymen P. A. STAN
ton, Curtis and Wolf, sat on the plat
form with the president of the Cali
fornia Bankers association, George w.
Peltier, and took part in the discus
sion of momentous banking questions
which are frequently subjects of de-
bate.
AS the questions discussed were of
greater interest to state than to ma
tionai banks, most of those represent
ing national banks and most of the
women attending the convention went
to Alpine tavern over the Mt. Lowe
railway early in the afternoon, leaving
100 or more of the delegates to follow
on late cars.
In opening the discussion Mr.. Peltier
presented report of the committee
on reform in banking laws, in which
it was recommended that bank COM
missioners be automatically increased
according to the number of banks, by
having one examiner for each fifty
banks.
The discussion on this question re-
suited in overruling the report of the
committee. 1t was suggested as sub
stitute that the bankers association
appoint five men from which the gov
ernor would select one state bank con-
troller to govern the number of ex-
aminers to be appointed and to have
general charge of the work.
This suggestion was abandoned as
dragging the matter into politics, and
the recommendation was finally made
tV1f hQ nj
controller to assume entire charge of
the state bank examiners. There now
are four bank examiners of equal
power.
Limitation of Loans
On the question of limitation of the
percentage of surplus and capital
which may be loaned 1t was recon-
mended that the limit be placed at
the same figure as for national banks
10 per cent of the capital and surplus
provided never more than 30 per cent
of the capital is loaned out.
1t was recommended that directors
in state banks be not prohibited from
borrowing funds from their own banks.
but that active officers In the banks
be not allowed to borrow.
Many different opinions were ex-
pressed in the discussion as to divorcing
commercial and savings banking
finally was closed without decision
being reached.
At the morning session yesterday G.
F. Hamsher of San Francisco struck
at the suggestion for a guaranty of
deposits by the state legislature, by
which it has been proposed to protect
depositors by providing a fund to
which all banks should contribute ac-
cording to their resources. to be used
in having to depositors the losses sus-
tanned through the failure of any bank.
He declared such law would not
only be unwise, but pernicious, in that
it would open the way for incompetent
or unscrupulous bankers to open for
business and be protected as much
as legitimate bankers, while, at the
same time, such incompetent banks
would be patronized just as much as
conservative institutions. since in any
case the depositor would be protected.
Judge Magee Speaks
Judge H. w. Magee OF Pasadena,
formerly bank commissioner. and a
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