New-York tribune., 1909-01-14
STATE BANKING REPORT
NEUy CLEARING HOUSE.
HMiams Says N0n-members OF Old
Bodv Should Consider Plan.

v-iifs-rs sta+a Srperjntendent of Banks says;
The panic Of 1907 so emphasized the need 81
remedial LEGISLATION aTecn9S mon me institutions
der the supervision OF the 6ai.AiiS irS5mHtssiop Of
bankers to consider The subject in genera END
report its recommendations. lions of this
commission. It's recemmendations "Te "Te,tW i hills
which 1ere ID drawn in the department and int&Eo &
duced as committee neassfssSS, sS, ~ suTes affect
ing banking Institutions scrutinizea ~ 'o Of
supeTntendent or his deppaey msx be noted that Of
this vast volume Of propose ba termed panic
legislation received the approval OF '''e
The remediaI legislation was SO thorough a. ana ,
far reaching that taken with the aets fect az bodt
our statute books we have the most peFisfH ab p1g
Of banking laws of any state In the union AlthonsH
minor faults may become apparent tIl - test
thoroughly their provisions before contempiattus t
radical amendment thereiore sessiop Of your
banking legislation at the pTesstb i,',5Tn believe
honorable body be held at ]mitiiIitiI ] ins coipjed
with reasonable business Judgment nndeI iH'e,..- @
gent and helpful supervision, VIII aps9lI.iS
generally stronger than those Of any Other NERAL s1'S sub
jects, however, to which should difect a'te"@
HIGH INTEREST DANGEROUS.
,,,radao of the general conditions through
olf the state compels the conclusion that sIeat
offence TO economic principles and SOUND pahk'Ie -
depositors Where such rates obtain the eglI- g
mate b9foWeT a86sney payS more TO b' seek larger return
from less secure investments follows This evil rs
the result of improper competition between me
different classes of our financial institutions. a9
is by no means limited 10 the smeIer rd4ths @ otj9e
followed by some of the larger institutions oi tie
state. 1t is inexpedent in my lnagtnt' to be paid
on deposits But this considers tton of conn @
resulting in the payment of high interest rates sHs
gests an additional reason for statute pTol.oSS
The payment of interest balances of iess eI ma.
specified amounts fixed aecordlng 10 ioc0' iseu''0
She events Of the last year have clearly demon
fIle irllt,I of
ing power of New York city. IL IS 10 pc -
that up to The present Time nearly one-haf OF tnls
banking power is still represented by instituion' ions
outside the New York Clearing Honse i must
Whatever be the reason OF TINS GolI,ti;t, i;, 81 the
be admitted that in the past the poIicE. 1 % - -
Clearing House though f smoImIIs tH 80 enacted
last year in reference 10 state banking lns,ltnuoS
lions on the character of business permitted "ou!1
seem removed ali reasohaoie op1s oap1st,,,Itions
WI NJ ss,Inerysion over banking institutions can be
more effective than that exercised by Gommiiltee i
of members of a voluntary association 1hertIUie -
I believe that proper restraint and discipline
through such an Organization would produce re
speCt for the regulations of the assoSlat!oh anu
should be pointed that the present system t nE
which institution clears for anoaiet, ai eTio,,s
dangers for both dangers which would be e; eiip m
mated if one association comprised al worm! III
no INSTITUTION LOST
u may he that some members of the New York
Clearing House Association regard tnaf
snip jealousy as to lead t9ei nrereSaves Ie even
though thereby sacrificing the public good III u,is
hanking ' power Of greater New York in one asso;
citation, the formation Of another assoGIa'n %
Der banks and trust companies Ing as -
Ja,oted tn the relief Of conditions resulting from
the heavy liquidation neCesstated in nte{ine a.
nsf+ors. demands during the fan Of 1901 Thorough
3onse-ceaning and at the same time extreme for,
baaranCe have been necessary IN many CHS'S. pl
speeiac mention The result IS that no such ms /
tution has lost 10 the community II was III
tended while number nave peeh ppitt53 pa
ueutlv strengthened not only In monetary posl'lo"'
hut In character Of management .. ,
A feature of great value to the department ana
10 the banks and trust soInPanies uIpep ts s ~
redits " On the occasion Of each semannuaI ex-
smnafiGn Ra6e4 TO by ake s @ rom the books bank
trust company @ st rs 90 an 'CSs of al, - borTorIngs
Of corporation firms and indyidnas are sent eJa 10
The New York @Gs OF OF the aras of the names f
the borrowers by which the cards are &c
her % secured or unsecured Excessive borrow
fng, is 1II1s revealed and an opportunity AFFORDED
10 the Superintendent 10 be helpful 10 the iehoHg
institutions IN preventing loss
YEAR OF ACHIEVEMENT.
Discussing the recovery OF banking interests from
the financial panic a year ago the report says:
The last year has been most eventful in its effect
upon The banking interests OF me stare ~ @ laS
been essentially year of achievement our !rhn-
cal panic came with It's contribution Of experience
and The answer to mat s reserIng The sogics
n
steps of real progress rather than selfish interest
;,,5veI aNpe~in,ent We bore the shock Of
the sJlsnension thirteen institutions. with sggTe
gate liabilities Of S17,S93A Through the reha6ili-
tation Of many Of these institutions and through a
nroner conservation Of the assets OF all there -
rot in rrospect the loss Of dollar 10 depostnrs
The return Of public confidence IN our general
barking institutions Is shown ~ their total re-
sources. follows:
Trust companies 81 Aas s5s 5 s5 81
Banks .......... 64l ooiS49 6o96So"IS 5l47o'G
Totals oo4 e7ooe2 $L01.5ss O2s 81 o41 asc $50
The decrease in resources from August to De-
canher 1897 of about 1870 10000 has been than
frll- recovered through increase in the last
twelve months of $3.50 Ooo ,ooN. The contribu-
ton of the year to the history OF banking in
this state may he summarized as follows:
The panic. the suspensions, the assumptions. the
general house-cleanirg the remedial legislation the
material increase Ia reserves. the increasing ap-
prectation OF trusteeship, tie growing conservatism
and The complete Of public COnf6ence-thASe
factors together with the reorganization of the de-
Dartment. have contributed to place the general
banking system Of the State Of New York upon
basis Of which your honorable body may be justly
proud.
In the attainment of this result the officers Of
the institutions under supervision have largely
contributed through their helpful cO-Cpera ton. and
7 deSire 10 eX publicly sincere