The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-17
DISAGREE ON LAW
FOR PRIVATE BANKS
Some Bankers Oppose State
supervision: Department
stores For 1t.
ELEVEN WITNESSES HEARD
Senate Committee Finds Clash
Of Opinion Deepens Legis-
lative Problem.
ELEVEN WITNESSES HEARD

Inc senate committee on BANKING got
an idea of the difficulties Of drafting leg
islation to regulate private banks while
II was examining eleven witnesses yes
terday. No two witnesses quite agreed
when 1t came to suggesting a way by
which legislation could be framed which
would not injure one or another variety
Of the private bank. Four Of the wit
nesses were from the Wall Street district.
three were department store men. three
were private bankers outside Of the finan-
cial district. and one was a depositor in
a private bank that failed a year ago.
Summed up, Paul NJ. Warburg Of Kuhn.
Loeb 4 Co. suggested that all private
banks that allow interest on balances
less than $500 or $1,000 should be super
vised. 1t would be a protection to a
class Of depositors In a class Of banks
where supervision IL necessary
Wilbur c. Fisk Of Harvey Fisk 4 Sons
thought supervision within limits would
be a good thing, but he thought that In
some private banks wide inQuisitofial pow
ers might sometimes reveal purposes Of a
banker which would cause great loss to
the banker and the depositor as we'll.
Wants Some Exempted.
Marion Hauser of Zimmerman 4 For
shay agreed that regulation would be n
good thing. but he did not believe that the
law should consider all alike. The de-
positors OF some varieties Of private banks
need protection, he said. while the deposit
tors of others do not.
L. Perera OF Perera. Lionella 4 Co.,
SO Wall street. believed that the State
should prescribe the class Of investment
for certain classes of private banks. Per
sonaliy no was opposed to investing bank
| fnn do in, n ooCnpA mn y "a Pa
j. Il. Greenhut OF the Greenhut- Siegel
Cooper Company saw no reason why there
should not be supervision under the State
Banking Department. He welcomed any
such legislation.
Jesse straus OF r. II. Macy 4 Co. though,
State supervision Of private banks would
be beneficial. 1t was In accordance with
the paternalistic policy Of the times
Banks have come to be regarded as semi.
public institutions.
Samuel j. Bloomingdale Of Blooming.
dale Bros said that he would gladly well
come any regulation. He believed the
State should regulate all the banks.
Suggests Penal Law Instead.
Meyer Jarmulowslty Of 1876 East Broad
way. member OF the largest banking
family on the East Side, was opposed
to supervision or examination OF private
banks although he believed laws should
be passed limiting the form OF the In
vestment private bankers could make. HI
thought a very severe law in the Pena
Code would have better effect thar
an examination.
James X. Clarke Of Clarke Bros. wa,
also opposed to supervision and regula
ton which would curtail the business o.
private banks. He thought that limiting
| their scope would destroy their oppor
tunities.
Morris Deiches favored some regulation
while Meyer Persky, who lost money II
the failure of the Rosett Bank, though
the Post Office banking system was thu
best
Mr. Greenhut was the first witness o
the morning and described the bank rui
by n copartnership made up OF men Wit
are stockholders in the corporation con
Quoting the large department stores a
Sixth avenue and Eighteenth street. Thu
bank is conducted entirely separate from
| the store business. Mr.. Greenhut testified
The deposits are segregated. placed II
! depositaries and invested independent!
Of the business.
| 81 see no reason why there should no
be supervision under the State Banking
Department" he said. II welcome It,"
Jesse Straus Of r. H. Macy & Co. sai'
| that his Arm did not conduct a bank. !
receives prepayments from customers 10
merchandise in order to facilitate the pur
chase OF goods. Mr.. Straus explained tina
his firm did not give credit. nor ask 1t 70
that matter. For years so many person
endeavored to obtain credit. he said. tina
about eleven years ago the present system
was worked out.
State supervision would be beneficial, h
thought.
| Marion Hauser OF Zimmerman
Forshay followed Mr.. Straus. lie wa
willing that the State Department Q
Banking should have some charge owe
all concerns. but he did not think IN
stitutions of his kind should be sui
jected to regulation on tho same plans q
other private banks.
"The East Side banks with their elias
OF depositors are more In need OF super
vision than the Wall Street bank with II
men of intelligence who have come ther
for the purpose Of investing a surplus.
| he said.
Mr.. Jarmuiowsky. who conducts on
bank under the title Of M. 4 l.. Jarmulow
| sky and participates In the managemer
| of another founded by his father, 3. jar
mulowsky, had no objection to sayin
that he was not In favor Of giving tn
Bank Superintendent power to examin
private bapkA Put strong law In tn