The San Francisco call., 1908-09-15
All Day It's Provisions Discussed
by Judges, Legislators
and Bankers
Plans Strictest Supervision OF
Funds of Dep0sitors and
Provides Penalties
Some Violations Call for Fines
and Others for Jail Sentences
of Various Length

CALIFORNIA; proposed new banking
act, cohtaining radical changes from
the present code, has been drafted by
the legislative committee of the Cali
fornia bankers association. BY that
committee and by the joint legislative
committee on reform of state banking
laws it was discussed at length all day
yesterday.
The discussion will continue today
in the Offices of the state harbor COM
missioners in the ferry building. Judge
George A. Sturtevant and Attorney
General Webb took active part IN the
meeting and the latter especially
pointed out places in the proposed bill
which he believed might differ still
further than the draft from the pres
ent law.
A state banking superintendent.
whose Office shall take the place Of the
present bank commissioners. and de-
purtmental banks, whose commercial,
savings and trust divisions shall be
entirely separate. are the greatest
changes contained in the new measure.
Modelled in good part after the New
York state banking act. with portions
borrowed from the Michigan statutes.
il centralizes -California's supervision
over financial institutions 1t specific
ally restricts the handling OF deposits
and trust funds. to the end that these
may be used only for the purposes for
which they were intended. In it's en-
tirety il is a simplihcation OF the ex-
istent statutes.
PLANS LONG IN PREPARING
Yesterdays meeting was the result OF
months Of work. At its special session
last fall the legislature appointed a
Joint committee TO reform the banking
laws In May that committee attended
the California bankers association con-
ventiOn in Pasadena, and a result
OF discussion at that time the conven-
tiOn named a committee of IS bankers.
who should draw up a bill to be sub
mitted to the legislative committee In
its turn this bankers COMMITTEES named
subcommittee of six These drew the
bill and yesterday presented il in con-
ference TO the Legislators
At yesterdays conference were the
legislative committee. consisting OF.
Senators F. ". Leavitt OF Oakland. j. b
Curtin Of TuOlumne county. E. l. Wolfe
OF San Francisco: ASsemblymen =. A
stanton of Los Angeles. c. NJ Fisher OF
San Francisco, and A. p. Cutten OF Eu-
reka- The California bankers associa-
ton committee, consisting Of j. NJ Hen
dersOn Jr. (chairman). Sacramen4o; l.
A Moulton. Bank OF California; Lowell
White, San Francisco savings unions
Elliott McAllister. representing inland
banks J. Y Eecleston, Union savings
bank. Oakland; j. NJ Sartori OF Los
Angeles, along with F. II. COlburn. the
n .afz rnfo N n koru
committee were men from the three
classes OF financial institutions-com-
mercial. savings and trust banks
Instead of a penalty OF s100 fine for
every days violation Of the section for
bidding persons not Incorporated re-
ceiving money on deposit unless they
comply with the civil codes strict pro-
visions on the subject. Judge Sturte-
want spoke for Jail sentence.
DIVIDES BANKS INTO CLASSES
The draft OF the proposed act is a
code in itself. 1t is full of changes. de-
signed to prevent such banking as
caused last winters panic and brought
about the collapse OF the California safe
deposit and trust company 1t divides
banks into four classes-commercial
Individual bankers, savings banks and
trust companies
II provides a state banking DEPART
ment This department executes the
banking laws. Its chief officer is the
superintendent Of banks He is ap-
pointed by the governor and his term
| is FIVE years He must be 10 years an
active executive officer or employe OF a
bank. half OF which service must have
been in California Any national or
state bank examiner who has served In
California. however, is eligible. Hs
must not be directly or Indirectly In
terested in any bank. His salary shall
be $500 a year, and he shall be under
/ $50 000 bonds He shall appoint his
deputies and name their compensation.
save that of his chief deputy. which
shall be s4. 900 a year. The latter must
have had three years banking ex-
Derience- The superintendents ONCE
shall be in san Francisco
/ A state banking fund is created
Every bank in California shall pay $40
year toward this. and il more money
he necessary TO. carry on the banking
depa artment the banks shall be assessed
/ in proportion TO their deposits
| The powers OF the superintendent ars
great He shall examine all banks.
either personally or through examiners
whom he may appoint. The exaulfna-
tfons shall be made- commercial banks.
4 Individual bankers and trust companies
at least twice q year. savings banks
once a year. No examiner may be ap-
pointed receiver OF any bank he has en-
amined-
/ No bank can do business without .
certificate from the superintendent of
banks, given altar satisfactory az