The Wenatchee daily world. [volume] (Wenatchee, Wash.) 1905-1971, 1910-09-26
too MANY BANKS
N STATE
State Bank Examiner Says
Fifty in This State Should
Go Out of Business.

Examiner j. l.. MOhundrO, on his
return to Seattle yesterday from the
national convention of state bank
examiners recently held at Washing
ton, d. c., and at which he was hon
ored by being elected first vice.
president, outlined what he declares
in the future will be the policy of
the state banking department in is
suing charters to new state banks.
The new ruling will make it more
difficult to get state bank charters.
THE policy of the department in
the future will be to discourage the
organization of small banks in COM
munities where the need of new
bank cannot be easily demonstrate
ed" said Mr.. Mohundro 1.-The best
interests of the state lie in seeing
that the banks we have are not
crippled by the organization of
weak banks"
One Charter Refused Already.
The determination of the bank ex-
aminer to make it harder for new
bank charters to be obtained, while
under consideration for some time,
came to a climax Saturday when Mr..
Mohundro found on his return that
a group of men in a southwestern
Washington town had made ar
rangements to start a bank, even
going so far as TO buy their fixtures
and fit up the banking rooms, and
after everything was ready came to
the examiner for a charter. Mr..
Mohundro refused to issue one.
Will Raise Minimum Capital.
Not only has the state bank ex-
aminer decided to issue no more
charters for small banks until the
need of the bank has been demon
strated, but he has decided to rec
ommend the passage of an amend
ment to the banking laws which
will make it impossible for new
state bank to open unless it is capt.
talized at least for $4,000 instead
of $4,000, the minimum capital un-
der the existing laws.
Favors Eliminating Fifty Banks.
without reflecting in any man.
ner upon the security of the state
banks in Washington, said Mr.. Mo-
hundro. ''for the state banks, as a
whole, are stronger here than in
many other states, I believe that if
fifty financial institutions of the
state would go into voluntary liq-
idation the banking conditions
would be materially strengthened.
THE influence of this department
in the future will be so directed
that when banks have dragged along
for three or four years without MAX
ing a showing they will be induced
to liquiiate. The history Of bank
ing has been that most states are
overstocked with small banks. We
have but $50 state and Is national
banks in Washington, which is in
finitely less than found in some of
the middle western states.
Minimum Capital $4,000.
Il do not believe that any bank
should be authorized at less than
$4,000 capital stock. A commun-
ity that cannot support bank OF
that size should do business else
where. The bank examiners at the
national convention held to this
view
Il take the position that one good
bank in community that can pay
dividend to it's stockholders is
better than three banks that cannot
earn enough to justify their being
in business.
Il will refuse to grant charters
to banks where | think the new
bank will cripple the existing insti-
tuition. The whole tendency should
be to make stronger banks and dis
courage the formation of small in
StitutionS -