The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-04-30
CALDER PROPOSES.
NEW BANK SYSTEM
Would Grant Perpetual
Charters to Every
National Bank
snccInltn The wnrld.

recommended in report just tiled
by Senator calder or New NorN,
from the senate committee ON bank
ing and currency,
In u report from the committee,
which Calder presented TO the sem
ate, he called attention to tho fact
| that within the next is months the
charters of about 1000 national
banks will expire, ana In the alb
sence of some legislation authori1-
Ing the extension of those charters
1t will be necessary for these banks
to close up their affairs and re-
organize.
Under the act OF 1868. national
banks were TO have succession for
| the period named in tho articles Of
| Incorporation but not to exceed 20
| years. In the revision and re-en-
aCtmcnt OF tho banking law in 1854
the period of succession was fixed
at 30 years from the date OF organi-
2ation. Under the act OF July 12c
| 1882, provision was made for the
extension OF bank charters for an
additional period OF 20 years. Again
| this 20-ycar period was removed
| April IL, 1902. There is now need
| for further legislation to continue
| the corporate life of national banks.
Crissingcr Favors Plnn.
| Both the comptroller Of the cur
rency and tho federal reserve board
| have expressed themselves as favor
| ing perpetual or iudctCrminatc char
| teIs for national banks Tho federal
reserve board, In Il letter written TO
/ the chairman OF the committee on
! March 90. 1922. pointed out that
most of the states grant charters TO
| banking institutions for periods in
excess of 20 years, many states, In
| Guiding New York, granting char
| ters, which automatically continue
| forever unless revoked or forfeited
| or unless the corporation In dis
solved: and the fact that IL IS prob
able to obtain charters from the
states which are more favorable in
this respect than the charters
granted to national banks not only
Is u deterrent to organization under
the provisions OF the national bank
act, but operates also as, an induce
ment to existing national banks TO
convert into state institutions.
An analysis OF the state statutes
relating to the duration Of charters
of state banking institutions shows
that duration OF charters Is unlim-
tied in 2t states of the union az fol-
lows: Arkansas. Connecticut. Flor
ida, Illinois. Kentucky, Maine, Mas
sachusetts, Minnesota, Nebraska,
New Hampshire, New Jersey New
York. North Carolina, Ohio, oregon,
Rhode Island, South Carolina, Ten
Virginia. In Utah the duration OF
charters is limited to 100 years;
Louisiana, 90 years; California.
Idaho, Iowa tsavings banks), Kan
sas, Mississippi. Missouri (savings
banks). Montana. Nevada, New
Mexico. Crust companles), Okla
homa Urust companics), Texas,
Washington, Wisconsin (banks and
trust companics) and Wyoming 80
years. The Limitation In Maryland
is 40 years; in Georgia and Michigan
80 years; North Dakota except trust
companies) and Oklahoma, 81 years;
Alabama, Colorado, Indiana. Iowa
Pennsylvania commercial banks)
and South Dakota, 20 years.
Desirable for Banks.
The federal reserve board in It's
letter TO the senate committee
pointed out that the proposed legis-
lation is particularly desirable from
the standpoint of national banks
exercising fiduciary powers granted
to them under the provisions OF the
federal reserve act. The fact that
national bank has TO apply for
periodical renewals of its charter
seems TO be consideration which
handicaps national banks in their
competition with state institutions
for fiduciary business. Federal ro.
serve act distinctly authorizes ma.
tional banks. with the approval OF
, the federal reserve board, to exer.
/, else fiduciary powers and with the
provision of the federal reserve act
has been upheld by "a decision of tn,
supreme court of the United States
= There are numerous instances where
national banks have surrendered
their charters and have reorganizof
under state law. The committee Il
Informed that many important ma,
tlonal banks throughout the coun,
try are now considering the surren,
, der OF their charters, and as con,
crete example mention may be mad,
OF the liquidation and reorganization
; or large national bank in Cleve
l land recently, which reorganizeC
. under state law because of its inabil
= lty to take over the trust and fidu
| ciary relations which are so i'm
} portant and which are continulnl
and subsisting ana might last lOt
years.
/ Section IS of the federal reserv,
= act contemplates the ultimate re
| N'iNHiNHt VI an IdtlDDdl Dhnk nOtci
5 in circulation, which at one tim,
Q yielded a substantial profit to tn,
; national banks issuing them. Ther,
| Is question whether the nationa
4 banking system will be porpotuate,
r unless national banks are able 4
: compete on more equal terms will
. banks and trust companies doinj
= business under state laws. The rca
e sons which existed in 1853 and 1856
! 10. the Limitation on the life of
national bank charter do not appen
TO exist at the present time in tn
opinion OF the senate committee.
The acts OF 1882 and 1902 rcduir
q that circulating notes issued TO an
by a bank subsequent to extensio
shall be OF design making thcr
}, readily distinguishubie from note
A issued prior thereto. The law ais
requires that within three year
:, from the date of extension a nationa
bank shall deposit lawful money 10
the redemption OF old issues the
outstanding.
What the Records Show.
There seems TO be no good rea
= son for this requirement at IN
u present time. The records sho,
: that compliance with the require
3 ment has entailed unnecessary rx
2 pense both to tho government an
n TO the banks--to the government /
@ that IL has been necessary TO do
: stroy all incomplete national ban
q circulating notes OF the old issue