Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-04-08
STATE BANKING LAW
NOT WHOLLY INVALID

Not the entire Georgia banking
law. but only the section prescribing
the method of enforcing payment
py bank stockholders of an assess
ment to pay the banks creditors,
was involved in the injunction is
sued late Tuesday by banks credi-
Sors,s was involved in the injunction
ISSUED late Tuesday by Judge Pen
dleton,, of Fulton superior court, re-
stra1ning T. r. Bennett, state super
lntendent of banks, from enforcing
the stockholders of the defunct
American Trust and Banking COM
pany, Of Savannah.
One hundred stockholders of this
bank resisted the executions levied
against them, to force payment of
the assessment. They claimed that
the method provided by the banking
law for enforcing payment is uncon-
st1tutional because it deprives the
stockholders of due process of law.
They petitioned Fulton superior
court for an injunction restraining
the bank superintendent from ex-
ecuting the levies made against
them. After hearing arguments on
both sides of the case, Judge Pen
dleton held that the method of en-
forcing payment of stockholders,
assessments does deprive them of
due process, and accordingly enjoin-
ed the bank superintendent.
1t was explained Thursday by 7.
r. Bennett, bank superintendent,
that the identical question of con-
stitutionality had previously been
raised in a case from Americas, that
the Americas case has gone to the
supreme court and been argued, and
that a decision finally settling the
constitutionality of the disputed Sec
ton of the law is expected shortly.
Hence he will not appeal Judge Pen
dleton's Injunction.
Mr.. Bennett further explained that
the banking law as whole would
not be rendered void if the supreme
court should hold that the law is
unconstitutional in this one par
ticular. The legislature could rem
edy the defect at the next session.
Discusses Assessments
With regard to assessments which
he has made against stockholders OF
various defunct banks, Mr.. Bennett
on Thursday gave out the follow
ing statement:
For several weeks varied injunc-
tons have been filed with this de-
partlnent in the administration of
institutions held by it under article
of the banking act. That being
the article governing the liquidation
of banks and as wide publicity has
been given these proceedings
through the press, [ regard it adj
visable to bring to the attention of
the public the disposition and pro-
cedure of this department.
Article of the banking act ap-
proved ugust 16, 1919, is the law
which we are making an effort to
follow closely, and until the SUI
preme court renders decision on
the constitutionality of this article,
it Is the duty Of this department to
proceed in accordance Herewith. Z
1T is unnecessary to scy that it
Is not pleasant duty to issue as
sessments against stakeholder and
follow these assessments with exc
cutlons. During this period Of de-
preston, however, it his been our
liberal manner. Therefore, after
The executions have been issued and
recorded on the general execution.
dockets in the various counties, thus
protecting depositors of the bank
inst transfer of property, then
those stockholders who are disposed
to pay as rapidly as possible, we
have been inclined to accept partial
payment from time to time until the
entire amount is paid.
Stockholders Protection
"On the other hand, let it be re-
membered that while these proceed
ings are Objectionable to stockhold-
ers of failed institutions, there are
thousands of depositors who are suf-
fering and whose rights must be
protected in every way possible.
Let it be remembered that for
thirty years prior to the passage of
the banking act approved August
16, 1919, and effective January /,
1920, Georgia had no bank legisla-
ton, and up to that time depositors
had very little protection when an
institution failed. Then the law.
makers almost unanimously adopted
the present banking code for the
purpose of having an orderly and
SA04SobAC VI DdukS SO
that depositors could in a measure
have some protection. Therefore.
the section providing for 100 per
cent assessments against stockhold-
ers was inserted.
"I might say further that Geor.
gia's banking act was created large
ly from the national bank law, to-
gether with sections selected from
some Of the best state banking acts,
and is regarded by those who have
given it careful thought as being
the most modern act in the United
States today.
"Also, it is interesting to note that
all attacks on the banking act up
to this time are aimed at one sin.
gle clause in a single section, viz,
that which gives the superintendent
of banks the right to issue execu.
tions to enforce the stock assess
ment and the sustaining of all these
cases would not impair saveIin that
one particular the banking act, or
interfere with its usefulness, or the
operation of the banking department
functioning under it."
Work for 10000 Men
LONDON, April S.-Work for TO-
900 -.z. 4o,. 4xryo ~r,;lI - xo~o