The Eureka sentinel. [volume] (Eureka, Nev.) 1902-current, 1910-04-16
the strike lasts.

1t having come ito the knowledge of the
| State Banking Board that by reason of its
having closed the Eureka County Bank. and
| the attendant criticism Of the Board, public
| confidence in the banks Of this State has
| been considerably shaken. as Chairman of the
| Board l desire to make the following state
ment:
Taken as a whole. the banking institutions
Of the State have never been in as good con-
dition as they are to-day.
The great majority Of them are in splendid
condition. By actual count 80 per cent OF
them are practically beyond criticism. They
are carrying large reserves and conducting
heir business on the most conservative lines.
There is no comparison between their con-
dition to-day and a year ago. Their percent
age Of reserve carried is practically double;
capitalization notes largely eliminated. excess
loans wiped out or reduced to within the legal
limit, and secured as provided by the new Law.
Most OF the banks of the State to-day will
measure up to the standar of National banks
in this and neighboring States.
When the law went into effect creating the
present Board one year ago. a different state
Of affairs was found to exist. There were
eight or 10 banks in the State in fully as bad
condition as that of the Eureka County Bank
and some of them were in q worse condition.
A strict application OF the new law would
have closed every one of these, and coming as
it would on top of what the State had so re-
Gently undergone, fully one-half the banks OF
the State would have gone down, working un-
told distress on its citizens and making Neva-
da an object of scorn to the balance OF the
country.
After much careful consideration, the
Board resolved to build up instead Of tearing
down. With the one exception of the Eureka
49, h--l ~ - 80
successful. and that bank to-day will pay more
to its depositors than if closed a year ago. As
to the banks that were saved, they are among
the largest ADD strongest in the State. de-
seryedly enjoying the respect and conhdence
4 their depositors and reaping the legitimate
profits to which they are entitled.
The Eureka County Bank was one OF many
in which we found excessive loans which Grip
pied the institution. None of the large loans
now on the books of the Eureka County Bank
were made subsequent TO this Board assuming
supervision of the banks Of the State. These
loans, while Gripping the bank. did not neces-
sarily render the bank insolvent. The sol
vency or insolvency Of the bank depended
upon the goodness or badness Of the securi-
| ties hypothecated for the loans. Immediately
after the Examiner mad his first examination
If the bank the Board earnestly endeayored
TO determine the value Of these securities and
| TO that end the Examiner made repeated re-
quests Of the Smith brothers to furnish him
with q list of the assets Of the Eureka Live
Stock Company, of the Smith BulIfrog In
vestnent Company and of the Smith Brothers
Investment Company. whose stocks were
pledged for loans, and ordered that the loans
be reduced at once to within. the legal limit.
Failing to receive a list of the assets Of the
companies above named. the Board called
Oscar j. Smith and Bert L. Smith before
them at a meeting in Carson City and de-
manded that these lists be furnished, which
the Smith brothers promised to do at once.
Later the following letter WAS sent to the
Smiths:
October 7, 1909.
Mr.. Oscar J. Smith, President,
Eureka County Bank. Eureka, Nevada:
Dear Sir - The State Banking Board from
the examination Of the affairs Of the Eureka
County Bank, has found it necessary 10 be
! specifically advised - to the assets and liabil-