Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1909-02-22
DEMOCRATS NOT PLEASED.
Bank Bill Does Not Make the Hit It's
Framers Anticipated.
STANDARD OF RANKING LOWERED
Nebraska Measure Lacks Many of the
Good Features of Law In Force
in oklahoma, Accord
ing to Bankers.
CFrom a staff Correspondent


From a Staff Correspondent)
LINCOLN. Feb. H.--(Special.) )-Great dis
appointment prevails among democrats over
the work of the Joint committee which
drafted the guaranty bank measure. The
bill will be out Of the hands Of the printer
early in the coming week, but number
OF interested persons have read It over
and there is scarcely one who does not
find some flaw in the work of the mem
bers and their $500 attorney. who spent
two weeks trying TO get up something
that would be court-tight and staunch
enough to Withstand legislative jolts Judg-
ing from the amount of criticism heard. the
measure will be shot full OF holes and in
stead OF going through the legislature like
cannon ball. with the whole democratic
majority helping it along, as one senator
promised would be the case, so many
changes will be demanded that It may be
unrecognizable before the time of final en-
rollment IL that time is reached at ALL
The bill had rough shedding in the joint
committee. II was drafted and redrafted
and then made over and portions eliminated
and additions we're made until some who
profess to know a little about banking
think II will prove one OF the most un-
! popular acts, IL passed, to which the demo-
cratic majority could devote its attention.
The Immediate payment provision is de-
| clared IA farce. The provisions with regard
] to rights OF stockholders to borrow money
are said to throw down the bars for in
discriminate lending. The tax upon bank
ers is declared exorbitant Generally recog-
nized standards of security for loans are
not fixed as compulsory upon all banks.
Bank examinations are not made in a nom
partisan manner. but, on the contrary, the
insistent demand of the administration was
for partisanship and when the bill was
once drafted. with a few nonpartisan fea-
lures, Governor Shallenberger forced the
committee TO accept the opposite theory.
The only safeguards added to the present
banking system, it is declared, are pro-
hibition of loans to bank officers and en-
ployes and requiring the approval of the
banking board OF banks selected as re-
serve repositories.
Bank Standards Lowered.
One criticism is that distinct lowering
of the standard of banking In Nebraska
will result by the removal of the limita-
tion Of the present law that aggregate loans
of stockholders of state banks may be 50
per cent of the capital. which will permit
stockholders to borrow all of the banks
funds IL desired, subject to the 20 per cent
of capital limitation applicable to ell bor-
rowers.
| The bill is declared to be not up to the
Oklahoma standard In thuA stockholders
are there limited to 80 per cent of the
capital stock, fidelity bonds are required
| from bank officers, speculation by bank
officers on boards of trade and stock ex-
| ChanQQa Ia nrOhfhifan xvh
does none of these things and besides,
omits to bestow the power Of removal of
delinquent bank officers by the banking
board, and does not prohibit loans to bank
stockholders upon the security of bank
stock A friend of the Oklahoma bank
law in pointing out this difference between
the act just introduced and the one in
force in the southern state, said the senate
banking committee is only waiting a favor
able time to recommend the postponement
of the Hatfield banking BILL s. f. 2, which
is copy OF the Oklahoma law. So much
have Mr.. Bryan's ideas changed since he
fathered the proceedings OF the Oklahoma
legislature that he has publicly expressed
his satisfaction with the bill just intro
duced and sanctions the intent of the leg
islative leaders in postponing a replica of
the Oklahoma act
few more pt:tions of the proposed
guaranty law are pointed out as in conflict
with the spirit of good banking All of
the safeguards of the present law are not
retained, as has been shown, and in addi-
tion, on the capital stock required for or
ganizing new banks is not raised or the
alternative Incorporated of limiting the
number OF banks to the size of the towns
to prevent the organization of a host OF
! new institutions as soon as the provisions
Of the law becomes effective. Besides this
generally recognized standards of security
for loans are not fixed by statute as com
pulsory upon the banks.
Security on Bank Loans.
1T is a matter OF surprise to me-" said
a leading member OF the legislature, that
the new bill dots not attempt to fix the
matter Of security on bank loans The
present law is silent on this. In several
eastern states there are provisions of this
kind and 1t was expected that a guaranty
deposit law requiring one bank to become
surety for another would prescribe tho Sc
curities In which a bank could invest its
funds, or at least the major portion of
them"
The feature Of partnership in the general
makeup of the law caused a big rumpus
In the committee that drafted the bill. but
on the practical demand OF Governor Shall
lenberger that he be given full power To
name all officers created by the act the
committee yielded. In so doing, It has
been declared that provision for complete
examinations has been overlooked and the
bill. II 1t becomes a law as ratified will
permit the appointment OF host of ex-
aminers with little OF the compulsory ma
ture determining their duties outside of
banks One complaint now is that ex-
aminations are incomplete while under the
new law. with an army OF examiners r.,s-
sible. there is no provision for their duties
to be extended-in other words, the bill
gives unlimited political power and the
banks are made the excuse for its exist
ence.
An ExOrbitant Tax.
The guaranty fund tax is bound to meet
with opposition from many sources and
this was also matter of dispute in the
committee.
"The way I read the bill " decla-aa .