Arizona republican., 1921-11-30
SPECIAL SESSION
OF LEGISLATURE
SET FOR JANUARY
Official Announcement Of
Meeting Made At State
Bankers Convention By
Charles w. Fairfield

Charles w. Fairfield
The first official announcement
that a special session. of the Arizona
legislature will be called and that it
likely will be called in January was
made at the state bankers conven-
ton at Castle Hot Springs by Charles
w. Fairfield, head of the state bank
Ing department The announcement
was made on no less authority than
Governor Campbell.
Mr.. Fairfield stated that the gov
ernor had directed him to inform the
bankers that unless there is a de-
cided change in plans during the next
two months, the special session viii
be called in January.
Although rumors of a special ses-
sion reached here as long ago as Sat
urday from Prescott and Nogales, the
news received from the bankers con-
yention yesterday was the first word
that carried authority.
THE legislature will be brought
together for the purpose of consider
ing purely financial measures" said
Mr.. Fairfield, following his state
ment that he was authorized by the
governor to make the announcement.
To Consider Banking Legislation
81 have the governors promise that
proposed banking legislation will oe'
considered for inclusion in his call"
Mr.. Fairfield told the assembled
bankers. Il do not know whether
this is the proper time to introduce
a complete banking code, as ordi-
harily a special session is prone to
attempt to confine its work to q short
period of time. However, l hope We
may meet with success in securing
cooperation and believe we should
a f,,r- y.
delay, as its necessity is sufficient to
justify the effort
Mr. Fairfield in his address de-
e1ared Arizona. is sadly lacking in
proper regulatory legislation for the
handling of its state banks.
Probably no class of institutions
should be more regulated by law and
yet in Arizona it is remarkable to
consider how little real banking legis-
lation has been passed in this con-
hection. During the time from state
hood up to and including the last
session of the legislature, bills toward
this end have been proposed and i'm
troduced with practically no change
In the situation" said Mr.. Fairfield.
in times past legislation not suited
to the needs of Arizona has been in
produced and has been characterized
by some of you as freak legislation
this regard much as you do but / am
forced to believe. more and more.
that the So called freak legislation
Is only the attempt of the depositor
who realizing that banks are an eco
nouiic necessity, is attempting to pro-
tect his interests, and / am also con-
WINGED that if a first class conserva-
tive code is not soon made effective
in this state, the legislators will
eventually take it or themselves to
regulate the banks without consult
ing your preferences.
Suggests Bank Guaranty Law
Il was greatly surprised at a meet
ing of the National Association Of
Supervisors of State Banks to find 9
growing sentiment in favor OF bani
guaranty law, and found as we'll that
the South Dakota code is finding
great favor. do not wish you to fee
that am advocating this legislation
but I have made the remark in the
past to some of you and now make
it to all of you, that if every baker
were required to be a bank examiner
before he could become banker he
would enter into his duties as q bank
official with different view point.
My experience during the shori
time have been in office has led me
to feel that one of the most sacred
obligations which a man can assume
is the obligation of the banker to hi.
depositor, and l think that every le-
Ultimate banker of the country feel.
much the same way. However. {
large partSof our financial stringenc,
was caused by granting excess loan'
of other peoples money to thos,
whose optimism enabled them to pu
one over on the banker. Some Law
should be enacted limiting the loan
of an institution to any one individ
ual, firm or corporation There is NJ
doubt that the granting of excessiv
loans is an injustice to the deposition
as it jeopardizes his deposit by plac
ing too many eggs in one basket.
''One of the needs of the state. i
my estimation, is that any propose
bank code should follow the preceden
established by our national and fed
eral reserve systems and establish
minimum capitalization of ban
based on the population and tn
needs of its community. We are suf
fering today from under-capitaliza
ton, and there is certainly an ethics
wrong toward the depositor when
bank with $4,000 capital stock ca
have deposits of a million dollars an
can make the depositor take practic
ally all of the chance when money
being loaned.
Laws Inadequate"
sour laws are also very inadequat
in stating what can be carried
stock, bonds and securities. The de
partments examiners have found til
very worst kind of wild cat oil an
mining stock carried in this accour
and it is an Injustice to the depart
ment to require it to pass on sue
waste paper Another injustice thu
has occurred in the past and ma
possibly be occurring now is II
placing of excessive collateral wit
correspondent banks, thus divertir
in case of liquidation. either enforce
or voluntary, assets of the bank whic
belong to the depositing credito
This diversion of security is nj
shown on the statement and it
only from the published statemel
that the bank customer is able
Judge of the soundness of an institl
ton.
I'm many of the smaller bank
and even in a few of the larg
ones, we find too much onem;
domination. The directors do n
direct and there is entirely too mu
assumeds or necessary authorit
vested in some one officer. The ne
code should, in my estimation, pr
vide for regular and frequent NEE
ings of the board; the directo
should assume an obligation und
oath, to be filed in the banking d
partment, and absence from two su
cessive meetings should cause T