The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-10-06
Davis Idea Taken Up by
Southern CONNER
cial Congress.
HOW 1T MIGHT
WORK IN VIRGINIA
Detailed Organization Proposed
Constitutes Valuable Contribu-
ton for Those Interested
in Subject of Agricultural
Credit and improvement
of Banking Facilities.
BY w. J. LAUCK.

By w. J. LACCN.
plan for a system Of rural or 49,
ricultural banks for Virginia has bee4
by Charles Hall Davis. -
Petersburg. Mr.. Davis's proposal haA
been worked out at the request OF the
Southern Commercial Congress. when
is engaged in an active campaign -
the advancement Of agricultural credit
The general scheme consists Of large
number Of local banks under loca1
control. with a central rural bank o
deposit and rediscount In the city a
Richmond. Mr.. Davis would also have
the central rural bank act s;s . ~.
cal agent and depository Of the State.
His carefully warked out plan VIII un.
meet with opposition from
those who are opposed to any connec-
ton or partnership between banks
ing institution or system and the state
but this connection =
more incidental than fundamental -
his scheme. Aside from the reiAftol
of rural banks to the State. the dstailea
proposed by M Davis
constitutes q valuable contrib ition ana
should be carefully studied by AL those
who are interested in the subject o1
agricultural credit and legislation for
the purpose OF improving the banks
ing and credit facilities Of the farmer.
The General OFEanfsation.
Virginia has 100 counties. With ~
average of four magisterial districtJ
in each county. The plan proposed by
Mr.. Davis would permit the establish
ment of a rural bank by the people Of
any locality provided the loans and
Investments Of each bank should b
confined to the magisteria1 district IN
which 1t Is located. THIS limitation IL
obviously q wise one, for the Dember4
OF any bank would thus be enabled 70
pass inteuigently upon any proposAN
or loans which would come before
them. There would be no Limitations
upon the number Of banks which might
be established In any magistsrial dis
trict and. a. . consequence. free bank
ing would be assured. In addition -
these local banks. there would be .
central rura bank in Richmend, the.
capital and largest business city In the
State, the capital stock OF which Gems;
trail rural bank is to be owned By the
local rural banks
There would be absolute freedom in.
the establishment of local ruf14
banks, according to the plan prop7se
by Mr.. Davis. Any number OF resi-.
dents or real estate owners In any
masisterIal district OF the state. n0e
less than ten. may on application g
the Rural Banking Department OF tae
state Corporation Commission. accoro-
ing to forms furnished in comphance
With the proposed Law. organize =
rural bank The capitalization OF no
bank IL to be less than 5000. divided
into shares Of a par value Of SIC. each.
Each share Of stock IL 70 be entities
to one vote, but In the event that one
person holds more than 10 per cent o.
the stock OF one bank. such HOLDINGS
OF stock are to be deprived OF vote
ing power in excess Of 10 per cenes
This provision, rs IL evideAt, wisely
prevents any monopoly control o.
bank or q chain or group OF rural
institutions. Dividends are to Be u4n3e<
ed to q maximum Of Is per cent -
annum, all profits above thas smeune
to be carried to surplus.
DeDesees sd Isans.
The liabilities OF stockhosdeee =
the same as stockholders In our ~
tioual banks, or. in other Words eee4-
suhscr,ber 20 the shares OF rural tonks
Ia to be liable for double the auouQe
Of his subscription until the bank hae
accumulated an earned surplus equel
to the amount Of its capital and Deso
in surplus
Both time and checking deposits sfo
to be received. the former 70 reeetvo
interest. Amounts deposited may -
as low as ten cents. Coupty. munt-
c;pal and state onlcials may also place
public funds with the Rur9l Lo0S
Banks. Every Local Rural Bank -
authorized to lend an amount eQual -
its capital. surplus and undivtdsd pro-
rits and nfty per cent Of its time g.
posits on the security OF nrse morep
cages or nrse deeds Of trust upon uoews
numbered real estate. iocsted - u
maR.sserial distr4cs where suca ruro4
bank 10 situated These loans aso -
run for q period not exceeding 49,
years The rate Of interest eoas9o4
c.nnce exceed by more than one -
cen: the rate offered BY the ssak tee
time depoei,a Each local bank - a.
30 au,Aorized 20 handle other real e.
tat. loans by euarantseing their Day~
rnene 10 the extent Of ten tines ~
surplus. capital and undtvjded prooea
such guaranteed loans are 70 run SoP
a minimum period Of three years 40
a maximum OF 50 yeora The c0ef0Y
for suartee;ne the soeas shall not e.
coed one per cent per annum on tne
priucipa! OF the loan, and the roea -
interest paad BY the borrower - -
20 exceed By move than one PEI Co.'S
the amount which the bank oaefe -
time depcosss All real estate 49,
made or guaranseed are not 70 sxeeey
50 Per cent % ne property speo vUso
they ere bosed acrerding - tho 49,
"a reeuyDo for taxation w the -
terssi AlserSes IN which ne beos u
located An real esssse tea3o -
Se 80 ~ gradual sad sesses,
meess % be prescribed - a. -
Banking Department q
osAeY shaa real esesse seoss - -
BE- pernsssed for the pUsoooe -
s,asspr agrscuIssrai ss1 - mDso
Of surm vredseta To 49,
ssse,a -Every tosnl 49, 49,
- a.shorssp6 - 1so1 - -
sorsy pes cot % - - (
1csssisssS . SssS11 =