Democratic messenger. [volume] (Snow Hill, Md.) 1869-1973, 1910-06-04
new BANKING
LAWS IN EFFECT
Statutes Include Many Import.
ant Safeguards For Public.
Penalty For Violation.

1
Maryland's new banking laws, which
place savings banks. State banks and
trust companies under the supervision
of the State Banking Department. went
into effect Wednesday.
j. Dukes Downs has been appointed
by the Governor to head the Banking
Department, and this appointment is
looked upon with widespread favor
among the officials Of the State financial
institutions. As State bank examiner
under the old system. MIR. Downs dem
onstrated himself to be man Of con-
siderable ability and a wide-awake pub
lie official.
The new laws include many important
features not provided for previous to
this time. In the first place restrictions
are placed on the use of the name
"bank." No concern can use that name
If organized hereafter unless incorpo-
rated under the new State Banking De-
partment. Those institutions that al
ready use the name, although not in
corporated, will have to Indicate the
latter fact.
The new law, first of all, provides for
the establishing of the new Department
and prescribes the manner of its man
agement. Regulations for the organi-
zation of banks are also included, and
it is provided that the Banking Depart
ment shall have the authority to grant
charters or reject them. Under the old
system it was necessary to go to the
State Legislature. In the event of
refusal of charter by the Bank Com
missioner the applicant has the privilege
Of appealing to that body.
| In the provisions regulating the man
agement of the various institutions, 1t
is stipulated that each bank or trust
company must keep reserve fund of
Is per cent. of total demand deposits on
hand. A part of this can be kept in the
vaults of the institutions themselves and
a part can be placed with other banks
and trust companies. The amount of
money that can be loaned to any one
person or corporation is limited to 20 per
cent. of the capital stock and surplus.
A vote Of two-thirds of the directors of
an institution can increase this amount
to 30 per cent.
All State banks and trust companies
must make five reports year to the
Bank Commissioner, and on each &C.
casion publish an abstract of the same.
Savings banks are to report once
year. All banks and trust companies
must be examined at least once year
by the Banking Department.
Such questions as deposits by minors
and married women, trust deposits and
joint deposits, which have always been
involved in complications. have been de-
fined in the new laws and future COM
plications will be avoided. From now
on any money deposited in the name OF
minor can be drawn by that person
without an order from parent or
guardian.
Any married woman who has money
in savings bank or State bank that
she deposited before her marriage can
draw the same upon assuring the bank
officials that she has been married since
the money was deposited.
Trust deposits can be claimed by
benefciaries upon the death of the
trustee without process of law and
joint deposits are now legalized. SO
that money from such deposits can
be drawn by either one or the other OF
the parties concerned, and upon the
death Of one the deposit goes under the
name of the other.
One of the most interesting features
of the new law is the provision that
any person who makes any statement
or starts any rumor that would do in
jury to the standing of bank or trust
company when there is no truth IN such
statements or rumors is guilty oil
misdemeanor and upon conviction liable
to fine Of not more than $1,000 and an
Imprisonment of not more than six
months. This is guard against un-
scripulous persons who might malicious
" attempt to start panic and run on
financial institution.
In the event of an effort to have
bank placed in the hands of receivers it
is further provided that the bank can be
turned over TO the State Banking De-
partment until the courts have decided
on the question of solvency.