The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1910-07-08
Savings Account Provision

requires that such deposits be invest
ed In certain securities and they b.
segregated and be kept apart from
all other assets. 1t also provides tina
all such savings investments shall b,
held solely for the benefit of the say
ings depositors and cannot be pledge,
as security for or used to pay any 9th
er obligation of the bank, until aftel
the payment in full of all depositor.
of the savings department.
''The savings depositors' money
would be amply protected and this
fact should increase the savings de.
posts of every bank within the state
Experience has shown that the say.
ings depositors are the panicky ones
With notice of withdrawal required
and knowledge that their savings are
invested In proper securities and
Withdrawals from the commercial de-
partment could have no effect on the
assets of the savings department, the
savings depositors will go about his
business and quiet down.
Under the proposed law the re-
quired reserve has been changed
somewhat. Banks are now required
to carry not less than Is per cent of
their demand liabilities. It is very
hard to determine just what its de-
mand liabilities may be. Time GER
tificates are not demand liability OF
until maturity, but very often
such certificates mature without be-
ing presented or paid. They immedi-
ately become a demand liability, but
the bank continues to carry the same
In time certificate account, and there
fore does not carry the required de-
serve. 1t is impossible for the bank
to keep in touch with
the date of maturity of certificates
If deposit of each particular bank.
Reserve Should Be Required
Il believe bank should be re-
luired to carry a certain reserve on
is apparent demand liabilities.
10 not consider it good practice for
)anks to purchase, to any great ex-
ent at least, and carry as an asset,
took in any other banking corpora
ion.
I'm the case of failure the bank
gliding stock in the failed bank
yould be very apt to become involved
self.
Section A, of the proposed law,
mits the amount of any person or
Indebtedness to 25 per
ent of the capital, surplus and undi-
ided profits of any bank. l con-
der this wise provision. This
initiation does not, however, apply
} real estate Or other amply collat-
raled loans. l do not approve of
anks borrowing money and issuing
S certificate of deposit for such loan.
his is not legitimate deposit and .
published reports is misleading to
lie general public.
"a bank in borrowing money ,
ould issue it's bills payable or re-dis-
'unt some of it's paper. No bank,
any event, should be permitted to
PROV an amount in excess of it's
lid in capital. The National Bank f
6 law and banking laws of most t
ates have this limitation. i
Overdrafts, Serious Question
"The question Of overdrafts seems
be very serious question with our +
INKS. On October 8, 1909, the date +
my annual report, the 1873 banks f
ported overdrafts of over $4,000. O
lis is very excessive and in my opin- f.
4 out of all reason. find in most
although not all, that the q
mixer himself does not encourage ri
erdrafts, but the depositors seem to b
efer to carry loan in the rArm AZ I,
overdraft rather than g.ss, q: note. 9,
has always borrowed money in that II
". II
While it is next to immpossible for
bank to get along without having l.
y overdrafts, still think in most $,
ses the banker could keep them m
wn considerable by the proper Ia
ndling of his customers. While n
customers overdraft may, in many W
stances, be as good as his note, l q,
nix the banker who tried to re- is
count ledger containing red fig O,
IS would be likely to find there m
S some difference after all. sr
Under the proposed law l think IN
provision for the placing of insol-
1t banks in the hands of the bank in
missioner very good one. This of
uld do away with the great ex- er
Use now necessary when a bank is nj
ced in the hands of a raceivar i =,