Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-04-01

UsVIsE and DANGEROUS BANK LEGISLATION

Senator Browns bill seeking to give to banks
the right to act as administrators, executors
and guardians - in s6ert, TO do a trust company
business, presents the extraordinary spectacle
! Of a measure opposed by every bank and trust
company in Honolulu except that with which
the senator himself is connected, and advocated
by. himself alone.
TO be frank, it presents the ilnweeome spec
tacle of measure apparently seeking to pro
mote individual and personal legislation. This
same bin was up two years ago and defeated
Then, ais now, all the banks and trust companies
but one opposed it. Senator Brown has been
practically its only advocate, and the only man
who Is now openly appearing for it. There is
no general demand for such law; on the con
trary, there is a very general opposition to it
and rightly So.
The laws of the territory have been SO framed
that the business of banks and trust companies
shall be kept separate and distinct. The present
banking act was passed in 1884. At that time
the duties and trusts OF administrators, execu
tors and guardians we're performed and under
taken almost without exception by individuals
On the mainland the plan was evolved ;of having
these duties performed by q company or corpor
alton When it was thought advisable that this
plan should be adopted in Hawaii, It became
necessary to frame laws for the government Of
Corporations exercising these powers The re-
suit was the act of 1905 providing for the forma-
|tion of trust companies Certain safeguards as
TO preference of assets and other provisions we're
adopted regulating this business No endeayor
was made to amend the bank act and give these
powers to banks as it was deemed Inherently
wrong as banking legislation.
The present bill offered by senator Brown
seeks to change Fundamentally the laws Of the
territory and give to the banks the right to act
as administrators, executors and guardians,
thereby changing the whole theory of the law
governing banks and trust companies. This
bill, introduced by Senator Brown, is quite need
less, as his purposes may be accomplished by his
organizing trust company under the trust com
pany act. BY so doing he viii conform to the
laws of the territory now existing and avoid the
unpleasant position of seeking the passage of an
act that looks as if for the benefit Of one insti-
tuition.
Senate Bill No. 10 sought to be passed in this
session Of the legislature was defeated in the leg
islature of 1911. All of the banks and trust
companies in Honolulu, save one, realize the I'm
soundness and financial improperly of the act,
and last year as well as this year unanimously
opposed the passage Of this improper legislation.
The territory has been exceptionally foTtu-
nate in that during the whole history of local
financial institutions no failure or suspension of
any bank or trust company has been recorded.
No legislation should be passed affecting the
financial institutions which has noe received the
most careful consideration. Four years ago the
state of California passed a radical bank meas
ure and the Legislature this session and last
sion has been busy making amendments. to this
act realizing the error of its radical action there
tofore taken.
In brief, to revolutionize the banking and
trust company business in Hawaii for no more
reason than has been shown is unwise legisla-
ton; it is needless legislation; and it may be
very dangerous legislation.