Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1914-01-16
GColumbia State, January 15l.

To the Editor of the State:
In your issue of the 10th instant, /
notice B. ]. Rhame has made certain
recommendations in regard to the state
banks, for the consideration Of the gen.
eral assembly, and, in my judgment,
these recommendations Of the state
bank examiner are i'll advised and un-
necessary and should be considered
carefully by the members Of the gener-
al assembly before adopting them and
enacting same into law.
Mr.. Rhame's first suggestion, requir-
ing bank directors to take oath before
entering upon their duties, while possi-
bly, all right, would not result in the
board Of directors being any more eff
cient than they now are without such
ton is not Objectionable 1t is simply
unnecessary and will do no practical
good.
The second recommendation, requir-
ing frequent directors meetings and
that state bank directors direct, would
simply be enacting into law what Is al
ready the law, as the directors Of state
banks already direct the management
Of the institution, just as much SO as
the directors Of national banks or the
directors Of any other corporation. Ii
the state bank examiner means that the
directors shall take charge OF the de-
tail working Of the bank, then 1t would
require the entire time Of the directors
and their presence in the bank on all
occasions, and as directors generally
give their services gratis the practical
effect would be that 1t would be impos-
sible to get business men to serve as
directors.
The third suggestion, that a board be
created to charter banks exclusively,
and recurring proof that the manager
of the bank is competent, seems to me
unnecessary for the simple reason that
the directors who put their money into
a bank elect the officers Of said bank,
and they are not fools enough to put
the institution in charge Of an incom-
petent man who would waste tnfir
money. In fact, directors are very care
full to secure the right man Ia be at
the head Of their institution, and this
Is a matter that regulates itself with
out any legislation; and whenever the
officer Of q bank shows incompetency
the directors soon deprive that oft1cer
of his position for fear they will lose
their money, so common sense would
show no legislation Is necessary along
this line. Bankers are not the only men
who abuse the confidence Of the people
and believe our laws now are entirely
sufficient, If enforced, to protect depos-
itors in banks without the aid and as
sistance Of any special board to Sit In
solemn judgment on the question
whether or not the people Of a commu-
nifty shall or shall not have bank and
have a written examination on the
competency Of the proposed president
and cashier. -,
But the most serious objection to all
of the recommendations Of the state
bank examiner Is found in his sugges-
ton that state banks be prohibited
from loaning directly or indirectly to
it's own officers, directors or employees
The law now on the statute books is
sufficient protection to every one inter-
ested in a bank or having money de-
posted in a bank, that the officers OF
the bank will not borrow all Of its cap
ital. No director can borrow from ms
own bank sum Of money exceeding lO
per cent of it's capital stock; and he
can only borrow on good security, anc
that only by two-thirds vote of Il
whole board in writing, and no director
is allowed to become indebted to his
bank, either by Endorsement or other
wise, than above provided.
And now for the general assembly OF
this state to pass such law as our
state bank examiner recommends
would simply mean any director who
wanted to borrow money would have
to go to another bank to get his own
money and thus produce an impression
on the public mind that his own bank
commodate him. 1t would necessarily
cause the directors Of state banks to
carry their accounts with other banks,
because when banks loan money they
require you to carry your account with
them, and certainly this would have no
tendency to increase confidence in the
directors own bank. The practical ef-
feet and result of such law would be
to drive state banks all into the ma
tional bank column, for national banks
have no such restrictions in regard to
their officers, for they can borrow from
their banks just as any one else can.
it's capital and 10 per cent of its sur
plus to it's directors, and it's no use in
the little state Of South Carolina at
tempting to be more stringent in her
banking laws than Uncle Sam In his.
In so far as my knowledge and ex-
perience go, our state banks are now
giving entire satisfaction to the public.
The farmer who borrows money Is sat-
isfied. The depositors and stockholders
are satisfied. Then why should there
be legislation on this subject, simply
because some dishonest men here and
there have deceived people?
On the question Of preventing over
drafts no legislation Is necessary. All
bankers admit overdrafts are a great
evil, and banks everywhere are doing
all in their power to cut out oVerdraftS
and in their own way, which is the best
way, this is being largely accomplished.
On the question Of curtailing in bor-
rowing money, I have nothing to say,
except the lender Is generally able to
take care of himself without any legis-
lation. The rule is, unless bank is
very safe and secure. there Is little
danger Of the bank being able to bor-
row too much money.
So far as outlawing private banks
are concerned I do not think the legis-
lature should enact laws forbidding
any community from establishing a
private bank, if the people so desire it.
S. NJ. McNeel.
President of the Loan and Savings
Bank.
To,