The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1911-03-23
TOO MANY BANKS.
State Bank Examiner Wilson Dis
cusses the Situation.

cusses the Situation.
From the fifth annual report of
Giles L. Wilson, State bank examin-
er. made December 1st, 1910, we
learn a great deal about the banks
in this State. He says there are
too many small, weak banks, and he
recommends that the examiner be
given authority to force weak banks
out Of existence. Some portions of
the report are interesting, as will
be noted from the following para
graphs:
"I am pleased to announce that
we have had no failures during the
year. This does not mean that we
are free from weak banks, however.
At least one bank upon the recon-
mendation Of this office, has decided
to voluntarily liquidate. Had it not
agreed to do so while there was still
opportunity to pay off depositors
and creditors in full, it would have
been closed. The depositors will
lose nothing, burt the stockholders
will probably suffer. Poor judgment
in making loans was the cause.
"At least four other banks have
been dealt with most leniently and
are now on what might. be termed
probation, having been notified that
they will receive personal visits early
in the new year, and unless found in
improved and satisfactory condition
will then have the option of volun-
tarily liquidating or being placed in
receivers hands. A considerably
greater number than four are prob
ably in such condition as would war
rant similar treatment, but it is pos
sible with proper care and nursing
they may so shape their affairs and
improve their present status as to be
permitted to remain in business. To
the best of my knowledge and belief
the above conditions are not caused
through any dishonest or fraudulent
conduct, but result from poor judg-
ment, lack of ability or extreme
carelessness on the part of those en-
trusted with the active management.
"since November 18th, 1909, Al
new State banks have commenced
business and about IL more have re-
ceived commissions and are in pro-
cess of organization. In this connec-
ton, | am forced to ask where will
the formation of new banks end?
Should there not be limit placed on
the number of small, weak banks?
Their rapid organization is source
of anxiety to this Office. Such insti-
tutions are constant menace to ex-
listing banks of sound and conser-
vative management. The weak in
stitutions not only compete with the
older banks in more or less unfair
and illegitimate ways, but, owing to
their tendency to break down at criti-
cal moments, they threaten the SOL
vency of the other institutions in
their communities. 1t will not be
denied that the first consideration
of properly conducted bank should
be absolute safety for the depositors'
money. Thus it follows that one
strong bank in community is bet
ter for all the people than two or
more weak ones.
"The office of Bank Examiner, as
understand it, was created to have
some one look after the interest of
the people. The most careful and
thorough examination possible by the
Bank Examiner cannot make weak
bank strong. Under our present
law this Office has not power to close
a weak bank or force it out of busi-
ness merely because it is discovered
to be weak. 1t must be insolvent
or dishonesty or fraudulently con-
Quoted before it can be closed. If
1 had possessed the power, would
have closed a considerable number
of weak banks during the year.
banks that ought never to have been
formed; that have no real excuse for
existence; that have little or no
prospect of success, or that have in
experienced and in some cases in
competent officers. Until the Bank
Examiner is clothed with authority
to force such banks out of existence
he can do nothing to protect the de-
posits of the people at large who pat
ronize them. His present power
compels him to wait until the bank
has failed, the peoples money al
ready lost
Miss REM Graduates.