Omaha daily bee., 1910-02-26
NO BANK FAILURE IN YEAR
Losses since 100

the record for the last nine years is even
more so.
Losses Since 1901.
Receivers reports since 1901 show the
losses from failed banks in this state.
compilation Of which shows as follows:
Average annual deposits in state banks
since 1871 mine years., $50 80 $40
Total deposits in failed banks, S451, ,557.
y Iotai 9npeid claims, less cash in receiv-
.,5 Average annual loss for last nine years,
Average annual loss on deposits is less
than AZ cents on each $1,000.
'The average deposits in the national
banks Of this state for the last nine years
are $sO10l,0 ,054 40, which, together with the
average deposits of state banks, $50 s79, $40,
aggregates total average deposits for the
state Of Nebraska amounting to $3.50 4S0,-
S6L4o, thus showing the average annual
loss to be 16 cents on each 81 900.
Value of Supervision.
mo better proof of the value Of super
vision is needed than is produced by the
foregoing record, for 1t is only fair to
assume that during a period marked by
such great activity in commercial lines,
with rapid advance in prices of every
thing, naturally leading to speculation with
all It's attendant dangers, incllnes to
hazardous investments
1T has been the aim of this department
to maintain as intimate a knowledge. as
careful conscientious examinations and
thorough and searching reports will per-
init, of the investments held by the banks
OF this state, and l believe that we can
truthfully assert in the main and as
whole they have been carefully made
1t would take a financial revolution, al
most cyclone in character. to imperial
the banking situation in this state.
"In view fthe high prices to which
lands have gone, and in fact all commodi-
ties, especially those of agricultural ori-
gin, the department is trying to Impress
the banks of the state that 1t is a time
when they must be especially conserva-
tive in their inves tments and that values
and prices are often only matters of opin-
ion, and we believe that bank manage
ments generally are taking this view of
the situation.
"The steady growth of deposits from
year to year shows plainly that the wealth
of the state is accommodating in a salts
factory manner, for no better barometer
rindication of the general condition can
be found than in the showing made by
the banks.
Amendment to Law.
This department has repeatedly recon-
mended an amendment to the present
banking act permitting banks to loan to
any one person, partnership or corpora
tion 20 per cent of the unimpaired capital
and surplus, instead of 20 per cent Of the
capital only as now permitted. This
would encourage a building up of a sur
plus fund, which is always a protection
to the capital invested, fortifying against
it's impairment and strengthening the in
tegrity of the bank. 1 believe the stabil-
ity of investments in Nebraska have
reached a point that fully justifies this
privilege.
There is one feature Of the present situa-
ton in this state to which desire to call
your attention, and for which there seems
at present no adequate remedy, and that is
the establishment of banks where banking
facilities are already adequate for the
needs Of the community. This often results
in tdo or three, more, weak or poorly
paying banks where fewer would be
stronger and safer and meet all the require
ments.
Discretion In Board.
your honorable board should have the
same privilege as the comptroller of the
currency in the supervision Of national
banks You should have a legal right, when
application is made for a charter for a
bank, to decide on the qualifications, the
financial ability the past record of the
proposed management, and to determine
whether or not the community where the
proposed bank is to be established justifies
the venture. Repeated instances coming to
this department clearly indicates the neces-
sity Of some step in this direction.
"At the last session of the legislature a
law was passed providing for the creation
Of a fund to protect depositors in banks
that fail. This law is now being contested
in the courts, having been tried in the
United States district court OF this state,
which court rendered an adverse decision,
and the case now stands appealed to the
supreme court Of the United States. Pend
ing a decision from that tribunal the de-
partm ent is enjoined from enforcing any
Of it's provisions and is complying with
such Injunction, This law provides for