The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-12
Mr.. Van Tuyi's Ban king Bill.

All bankers doing business under
New York State charter should obtain
and proceed to consider carefully the
so-called Van Tuyl bill for the revision
Of the State banking laws which has
been introduced In the Legislature at
Albany. The bill IL result Of the
work Of q commission which Superin.
tendent VAN TUYL caused to be created,
and It IL evident from an inspection
Of the measure that a good deal Of
its work was thoughtfully done. 1t
10 also quite as apparent that the
labors Of the commission. which BY the
way were headed by q banker more
conspicuously identified with operations
In the national than in the State field,
are likely in turn to need revision.
Here Is a paragraph which one STUN.
bles on In Article ILL.,, devoted to State
banks:
within ten days after the date on
which the annual meeting Of stockholders
Ii held the directors elected at such
meeting shall. after their due aualifca-
ton. hold q meeting at which they shall
elect from their orn Humber a president.
a vice.president. . cashier and such other
officers as are provided for In the by
laws"
This paragraph 10 section 1928 of
Article Ill. Practically the same par
agraph constitutes section 213 Of
Article ", dealing with trust compa.
niles. the only difference being that the
words "a cashier" do not occur In the
trust company section. Merely to di.
rect attention to this peculiar provision
Is almost enough to demonstrate Its
absurdity.
If sections 1913 and 213 Of the Van
Tuyl bill should become law as they
stand they would operate almost auto.
matically to project the executive Of.
ficers Of all State banks and trust com
panies In New York into the boar ds of
directors Of their respective institu-
tons The responsible arrangements
of banking institutions know well that
this is neither necessary nor wise. II
1t were, II any advantages could ac-
crue therefrom. legislative compul sion
would not have been awaited.
All banking corporations have n SUI.
hcient representation Of their execu.
tive staff In their directOrates. To
from their boards Of directors could
not fail to bring about some very queer
results n It were a practical possibility
Boards Of directors are for the most
part composed of men Of large affairs
measured by the standards Of the com.
munities In which they live and do bust
ness. They have graduated from sal.
aired ranks as rule and would hardly
make the best material for subordinate
places In the roles Of bank ofncera Al
the same time the best material for
bank ofhcers is as rule that which has
hardly qualified itself for membership
In bank directorates, however promis
ing 1t may be.
Again. II the sections referred to
should take effect as law they might
oblige a number Of institutions either
to enlarge their directOrates undesir
ably or cut down their official staff.
undesirably. No one can pretend that
the executive officers Of n bank should
have control Of the board OF directors
which supervises the workings Of the
bank. Yet without other changes IN
relationship the foregoing sections OF
the Van Tuyl banking bill might, IN
many cases, have the effect Of placing
the officers Of a bank or trust company
in control Of the board OF directors.
1t IL possible that a strained read
ing OF the text may permit the con
struction that directors are to cleo,
from their own number only presidents
and vice-presidents. but the plain mean
ing Of the language Is that all the
officers are to come from the directO
! rate. The provision seems to be NO ri
diculous on it's face as to carry Its owr
certainty OF amendment. However, II
has u more important Significance, the
suggestion that II It could ind It's way
into bill for the wholesale revision OF
the State banking law the bill probably
calls for careful and interested scrutiny
in all Its parts.