The Washington herald., 1921-03-21
UTAH BANkER
PRAISES NEW Law.


The Utah legislature has Just
passed a law extending aid to the
State banking institutions by re-
moving certain limitations which
had been imposed on State and
commercial banks, according to
Henry w. Applegate, Salt Lake
banker. seen yesterday at the Ra-
leigh.
The omnibus banking law" as
the new measure IL called, will
strengthen the state banks and will
tone up the general banking busi-
ness of the State. in the opinion
of Applegate, for 1t puts on the
statute books a number of provi-
sions, the most important Of which
Is the one giving power to State
banks to perform trust functions.
Under the new law. regulatory
powers are givenJ the bank COM
missioner for procedure in the case
Of suspensions.
Senate bill No. III, passed at
the recent session OF the legisla-
ture. grants permission to State
banks having a capital and surplus
OF 100000 or more to perform
trust functions" said Applegate.
This is a right formerly given oniy
to national banks and trust com
panies organized for that purpose.
The new law gives commercial
banks the authority to act as as
sfgnees. agents, receivers. guar
dfans of the estates. of minors and
incompetent persons. executors and
administrators. registrars of stocks
and bonds. and to execute trusts of
every description not inconsistent
with law
The new law widens the field
of banking operations and removes
the restrictions which in the past
have been placed upon the state
banks, denying to these institutions
the right to transact business open
to national banks and to trust COM
panies which can carry on the
usual commercial banking busi-
ness"
Applegate says that the capitaIi-
zation Limitation placed on the State
banks to which the additional privi-
lege is granted was included in
the bill as a precautionary measure,
to prevent possible overlooking of
the functions of the smaller insti-
tutions.
RANK CAPITAL Is
HELD AS SECURITY.
The capital of the State hanks
will be held liable for the perform
ance OF any trust business which
they may undertake, he says, under
an ironbound clause which has been
incorporated in the measure as fol-
lows:
whenever such bank shall ac-
cept appointment as assignee, agent
receiver. guardian, executor or ad-
ministrator. or be directed to exc
cute any trust, the capital of the
said bank shall be held as security
for the faithful performance of such
duties, and be liable for any default
whatever. and no bond shall be re-
quired of it for tho faithful per-
formance of such trust"
The new law also lifts the $1,000,
900 capitalization limit which has
Kept some banks OF the State from
extending their business, places re-
strictions on the declaration of divi-
dends, provides for the assessment
of stock in a bank with impaired
capital. making the slandering of
banks or the circulation of false
rumors punishable. and calls for re-
ports by loan, trust and guaranty
associations on the same basis as
Sldte DdHhS-
The possibility OF commercial oil
production in Utah is attracting
many investors in that State. Apple
gate says. and several companies
are drilling or making preparations
to drill for oil in the Sanpete and
San Juan oil fields. The prospect
ing will be done mostly by wealthy
companies, Applegate says. and the
small investor has been discouraged
by reason of the doubt which exists
as to the actual depth of drilling
necessary to reach the petroleum
deposits.
Indications of oil in the Sanpete
field were first noticed when wells
dug for watering live stock showed
traces of oil.' said Applegate. Many
or the wells had to be abandoned
because of the gas flow. One one
of the tracts first taken over nean
Ephraim 1 was told that five barrels
of oil were baled out of a well in
three hours. The water was found
to be mixed with oil to such a de-
gree that clothes washed in 1t were
covered with an oily scum