Arizona republican., 1922-02-16

adopting such q course at this time.
Therefore, some method must be de-
vised whereby such funds as the
State may have can be utilized for
paying current expenses pending the
collection Of the tax in toto.
No sound commercial enterprise
would countenance the borrowing at
interest of moneys with which to de-
fray running expenses while having
on hand sufficient cash funds to meet
such expenses, yet that is what the
state must and does do under our
present fiscal laws, largely due to in
adequate control of existing funds
and the number of special funds
which, while inactive, can not be
utilized temporarily for any other
purpose. This limitation compels the
anticipation Of tax collections and
materially increases the burden of
our interest charges.
Tax anticipation legislation, modi-
fled TO meet present and future con-
tingencies cannot well be avoided un-
less it is our desire TO drift along in
the same old, helpless and unsatis-
factory financial state of chaos We
must also strengthen our financial
structure in other ways. Continuing
appropriations have not only grown
to be a menace but have decentral-
ized financial control. In my judg-
ment all funds, except those estab-
lished in our grant OF statehood, and
funds collected for the interest upon
and redemption of, bonded indebted
ness should be abolished and finan-
cial provision made in lieu thereof
by direct appropriation. All such
money should be placed in the gener-
al fund and hedged about with defi-
mite limitations al to its withdrawal.
Standardization OF appropriation ac-
counts so that budgetary data sub
mitted to each legislature would be
uniform, and classification of the
various items, would make possible a
Sound system Of accounting. while
providing at the same time for the
elasticity necessary in the adminis-
! tTation Of these funds If the state is
to be relieved of the high interest
charges under which it now labors.
Appropriate legislation to give life
and effect to these suggestions will
be submitted to you.
State Banking Laws
1t Is generally realized. and has
been for some time. that there should
be new and additional legislation af-
fecting the state banking department.
Among questions Of major impor-
tance to come before this session of
the legislature are the changes nec-
essary in our banking laws. Business
has entered upon peculiar period of
reconstruction, and this period de-
mands that our banks shall have the
strength of supervision to meet the
requirements of the new period. At
my request the superintendent of
banks has been studying the situ-
a nd l1aG Il ltof hnl
to be important recommendation in
the form of a banking code to take
the place Of our present obsolete
banking laws. Among the matters
which impress me as having partic
ular merit are the following:
(a) The limitation OF loans TO any
one individual. firm or corporation.
(b) The prohibition of loans to Of
ficers and directors of a bank except
on ample security and then only after
same shall have been passed on by
the other directors and approved on
the minutes of the meeting.
(c) The establishment Of a state
banking department which shall
function under the control of the gov
ernor. and which shall be separate
and distinct from any other depart
ment.
Cd) Revision Of the present sched-
uie of examination fees so that the
banks shall bear a fair proportion Of
the expense OF maintaining the de-
partment. II cannot be hoped that
the banking department will be self
supporting. nor is 1t just to expect
II to be so. The state owes to the
depositors an obligation to see that
they are protected and part of that
expense is a legitimate state charge.
(e) The vesting OF the assets Of i'm
solvent banks in the hands OF the su-
perintendent of banks, wherever such
assets may be situated to prevent the
attachment Of deposit balances of
such insolvent banks by correspond
ent banks that are already protected
by a deposit of collateral security.
() The prescribing of proper in
vestments for both savings banks and
commercial banks and the defining
of the two classes of banks.
(g) The prohibiting OF banks invest
ing in stocks and bonds OF a specu-
lative nature.
(h) Definite provision that the
capital stock of new banks shall be
based on the population of the town
in which il is proposed that such new