The border vidette., 1926-08-14

for whom the banking laws were
made.
Both candidates in the guber.
Material contest have stated their
positions in regard to banking:
THE GOVERNOR SAYS:
when the administration as
sumed office in 1923, there were
Sc state banks operating in the
state of Arizona with deposits on
Decem Der 81, 1922, aggregating
$43, 197, 900. Since that time 13
banks have been closed by the
department, one bank was grant
ed a national charter, one bank
voluntarily liquidated and nine
we're merged with other banks.
leaving 80 state banks in opera
ton with net deposits of $44, 436,
600, or an increase of 81, 239, 900,
on deposit on April II of this
year than there was on Decem
ber 81, 1922. OF the banks that
were closed by the department.
the affairs of four of them have
been wounded up and the de.
positors were paid 100 cents on
the dollar.
AT the time this provision OF
law became effective there we're
36 state banks in operation, 26
Of these banks had excessive
loans ln them which the credit
ors were unable to reduce at that
time and which the banks assert
ed could not be refunded. Had
the state superintendent of banks
complied with the law, be would
have probably caused run on
the remaining banks of the state,
and many of them, both state
aud national. would have been
forced to close. The superinten
dent of banks, backed by the at
torney general and the governor
of this state, decided that such a
crisis could not be permitted to
occur and so advised the banks
we were going to assume the re
sponsibility and would answer to
the people of the state for the
assumption of power to delay
putting the act into operation
until such time as conditions i'm
proved and it was possible to re
duce these loans. We asked
their CO operation in reducing
the loans as rapidly as possible.
| The state superintendent was
able to bring about a reduction
of the loans in nearly every bank
in the state and instead off clos
ing doors, the banks continued
as solvent institutions. If that
creates bank issue. am per.
fectly satisfied to assume the re-.
sponsibility to the people.
The indictment of the state
superintendent of banks on the
ground that be failed to enforce
provisions of the laws that went
into effect in July, 1925, is prob.
ably teachnically warranted, but
the grand jury was advised of
the facts which we're these: The
provision of the bank code which
the state superintendent of banks
failed to enforce, is part of the
code that was enacted in 1922,
which provided that no bank
could make a loan to any indivi.
dual or corporation in excess of
25 per cent of it's capital stock,
and it provided that the exces
sive loans in the banks that were
then in effect would have to the
reduced to comply with this pro.
vision of law three years after
the banking code became effec
tive. This was purely arbitrary
measures fixed by the legislature
in the belief that economic con.
ditions would have adjusted
themselves that it would be that
these loans would be liquidated
or reduced.
I'VE found loans on cattle had
been made on the basis of 40
cents on the dollar that were
perfectly solid and secure, but
on account of the drouth which
caused the death of many of the
cattle and forced sale of the re
mainder, the securities shrunk
until they we're not worth 40
cents on the dollar. With the
cattlemen of this state bankrupt
and in distress, had the superin
tendent of banks closed these in
stitutions, be would have played
safe, but be would have not Leen
fit to hold the Office. We nursed,
the banks, reorganized condition
where they are solid financially.
The banks are new working to