The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-01-19
THE BISMARCK TRIBUNE

Fund Commission and the receivers
were very limited and that unless
the law is amended, every one OF
these closed banks must We be TAX
en- into court, adjudicated and final
ly administered, involving much ex-
pense and delay with further loss
to the creditors and to the Guar
anty Fund.
1.-THE State Banking Board consists
Of the Governor, Secretary Of State
and Attorney General, and generally
these officials are not expert and ex-
perienced in banking problems; they
are members Of many other boards.
Their time is more than taken up
with important State affairs, and for
these reasons are unable to properly
supervise the banks of the State. We
believe that had preceding legisla-
lures given our Banking System
more constructive consideration, pro-
vded and required more vigorous
and constructive supervision, that
many of the closed banks. would
never have been in trouble and that
generally, banks would now be in
better condition. The situation is
now that by reasoned the many fea-
lures referred to herein, neither the
Banking Board nor the Guaranty
Fund Commission can properly func-
ton, and immediate and thorough
consideration at your hands is neees-
sary.
"There appears to be no DISPOSE
ton on the part Of the average
state bank to evade any responsible
ity on account of the Guaranty Fund,
but they do think that better super
vision should be exercised; that the
guaranteeing banks should have
something material to say as to what
sort of bank, not only comes into
| the system, for which the other banks
are responsible, but particularly to
have something to say as to who
continues in the system.
Causes of Failure
One of the principal causes for
the many bank failures and for the
unsatisfactory condition of num-
Der Of open banks is by reason of
the fact that the State has greatly
more banks than it can support.
Banks have been opened in towns
which were already we'll and SUI
ficently served. The result has been
an era of vicious banking practices;
making loans larger than the credit
or security of the borrower would
prudently warrant; overriding for
deposit money; overborrowing from
city banks; loading up with real es-
tate and other immovabfe assets; be-
coming interested directly or indi-
rectly in the sale and promotion OF
tractors, automo biles, etc, and gen.
orally the overhead expense OF
maintaining these unnecessary Ii
censed institutions has been direct
and heavy charge upon the com
immunity wherein they are located.
"For your convenience and definite
information, we will summarize some
Of the conditions as follows: 9.
Receivers have no powers; tley
can only receive. They cannot com.
promise debts; they cannot satisfy
mortgages; they cannot sell assets
either singly or in bulk, except pos
slbly for face value.
There is no recognized authority
over a receiver. The supervisor OF
receivers may direct one thing, The
State Examiner another, and the
Banking Board may rescind one OF
both orders according to some more
or less convincing argument at thu
time presented.
"The Guaranty Fund has no defin'
lite legal direction as to the meth cd
of paying out the money in its hands
Shall it pay the claims in banks ir
full in order closed? If so, what
about two or more which may have
been closed the same day? Shall al
claims of all banks be paid pro rata
by dividends? Or shall they pay or
such banks in the year during which
the assessment was paid? And how