The Birmingham age-herald., 1910-12-16
DISCUSS PROPOSED
 BANK LAW CHANGES
Bankers Committee Goes Over
 the New Law
SOME OF THE CHANGES
Is Modelled After the New York Law Which Is Regarded as Best in Co1n- try-Bankers Believe People
 Will Indorse It

mittee of the Alabama Bankers associa- ton was ~considered section by section
 yesterday morning at meeting of the
 committee with the officers and execu-
 tive council In Birmingham.
 | The following well known bankers and
 others attended the meeting: McLane Til
 ton, Pell City; Jack Cranford, Jasper; w. T. Brown, Ragland; E. J. Buck, Mo- bile; E. C. Melvin, Selma; George Searcy, 1 Tuscaloosa; Guy Gerald, Thorsby; W. L.. Lancaster, wetumpka; Lieutenant Cover nor Henry B. Gray, W. P. G. Harding, W. A. Porter, Chappell Corey, T. H.
 Motion, Walker Percy and Frank P. | Glass.
 | Every provision was carefully scruti-
 nized, with a view of making any minor | changes in the original draft that might seem desirable or necessary, so that the I final bill as introduced may be one on which the bankers can take their stand. l For some 10 years the more progress | sive state bankers have been striving to | place upon the statute books system of | bank supervision as good as the best in | any state of the union. They have made progress and have so far succeeded as to get certain principles well established | in the code. Up to date the laws pro- vide for supervision, for examination and | for publication of reports; regulate the minimum capital required and the max imum of loans allowed, and provide for a minimum cash reserve. They also give the governor authority to proceed against bank that is unsound or insolvent These are all points gained one by one through a succession of legislatures. Results of Compromise But up to date every article of super vision provided has been the result of compromise between opposing forces. Now that the principal duty of supervision by the state has been recognized and estab- lished in the law, its advantage proven by experience; and the weak places in the present system pointed out by the failures of speculative bank schemes In
 the recent past, the people as well as the
 bankers feel that the suspicious moment
 has come for a complete and enforcible
 code of banking laws
 | Heretofore the burden of pushing bills through the legislature has been on the banks. The sound and conservative bankerss of the state now believe that | the representatives of the people will | get behind their efforts, and taking les | sons from the losses recently suffered | among the people from failures made possible through weak laws, will pass 1 without delay banking code that means | business. Such a code Is the one consid- cred by the special meeting on yester- day.
 | The bill may be divided into those sec | tions which merely change and strength | en existing laws, and those which intro-
 duce new features.
 Creates Banking Department Under the present law supervision is confided to a chief examiner and two
 assistants appointed by the governor,
 who work under the state treasurer, to
 whom they report and who In turn re- ports to the governor, who alone can take any serious or effectual action. The new bill creates a banking department in charge of superintendent of banks with three assistants and a clerk, and the banking department is elevated to the
 
 other departments of the state govern
 ment The superintendent is to be ap- pointed by the governor and confirmed by the senate, and he employs his own as- sistants and clerk, just as other depart ments do now. He Is clothed with all the authority conferred by law on the present examiner, and in addition the responsibility is placed upon him directly to enforce the laws and to proceed against any banks that may be insolvent or conducting their business in violation
 of law. He is paid the same salary with
 other state officers instead of the clerk
 wage now paid the chief examiner, who
 is supposed to look after the safety of over s2P,ooo,ooo of the peoples money The present law provides for the pub- lication of two bank statements on the call of the state treasurer, the new bill provides for four.
 The provisions of the present law regulating the capital of banks and the cash reserve are left untouched. No alteration Is made in the essential prin- ciples of the method for paying the ex- penses of the department or in the limit on loans to any one individual or cor poration and to bank directors and of- ficers.
 Larger Authority Conferred
 The new features of the bill lie In the larger authority conferred on the superintendent to enforce the laws ample penalties, wholly lacking un- der the present system, being provided Another is the extension of the duty and authority of the department beyond the regulation of existing banks so as to cover the formation of new ones The old law that an ounce of preven- tion is worth pound of cure is here invoked to the end that our banks shall at least be sound to the core in their beginning, whatever sores may develop later.
 One of the most important new fea- lures relates to branch banks. The written approval of the superintendent of banks is required as preliminary to the opening of a branch bank and each such branch must have the capital and cash reserve prescribed for independ- ent banks in the town or city where it operates. Existing branches are given year within which to comply with the law.
 Another feature of vital importance is that which limits the amount of stock which may be held in any other bank. A bank may accept stock fin other banks as collateral but if taken under foreclosure limited time Is given in which such stock must be dis posed of.
 Provision is added for safeguarding the emergency certificates which banks use in time of panic Such certificates can only be issued when backed by collateral In the hands of trustee who certifies the issue and all such iss-es hall he under the direction and supervision of the bank superintendent. All increases and decreases of can