The midland journal. (Rising Sun, Md.) 1885-1947, 1926-03-26
BANKERS SURVEY
STATE BANK LAWS
Find That Movement for State
Guaranty of Bank Has
Gone Into Eclipse.

New York.-A survey Of state bank
ing laws conducted by the State Bank
Division of the American Bankers AS
ISOLATION shows marked progress to-
ward greater uniformity and more eff
ficient bank supervision, it is declared
by Frank w. Simmonds, in charge OF
the division, in statement giving the
results of the investigation. He says
that the movement for state guaranty
Of bank deposits appears to have gone
into eclipse.
1.-THE division has urged that the
office of bank commissioner be freed
from politics and all other functions
of state government and tenure be
made more secure with sufficient COM
pensation and discretion to attract
men Of outstanding ability" Mr.. Sim
monds says. Gratifying progress has
been made during the past year in i'm
portant bank legislation in many
states. Idaho, Wyoming and Oregon
led the list by adopting entirely new
modern banking codes, while Texas
and Montana have new codes in prep
aration.
Uniformity Among State Laws
"The survey shows that it Is gener
ally agreed there should be high de-
sree of uniformity among the states
in laws dealing with certain funda-
mental principles of bank ,organiza-
ton, regulation and supervision, and
that there is strong tendency in this
direction. We find very definite
trend toward increasing the minimum
capital requirements of banks to $685.
600; creation of banking boards to act
in an advisory capacity with the state
bank commissioner, and legislation
empowering bank commissioners to
take complete charge Of insolvent
banks and to liquidate them as dis
tinguished from liquidation through
the courts.
"We find also a trend toward legis-
lation providing for closer supervision
and regulation of building and loan as
,sociations; more equitable taxation of
bank stock; legislation providing for
merger, conversion or consolidation of
banking institutions; the legalizing
and regulating of what is known as
departmental banking: broadening
the field for investment of funds of
saving banks and trust companies. and
increasing thefpower of the bank COM
missioner as to granting or denying
charters for new banks, and authoriz-
ing his making reasonable rules and
regulations governing bank manage
ment and prescribing penalties for the
violation thereof.
Additional general characteristics
of state bank legislation are for in
creasing the compensation of the bank
commissioner and lengthening his
term of office of fear, five or six years,
ties and examiners; legislation provid-
ing for the reduction of mandatory
bank calls to thee and reducing the
number of examinations required by
law annually to one; making issuance
of worthless checks misdemeanor;
limiting or prohibiting an officer or di-
rector of a bank borrowing from his
bank unless his collateral Is approved
by majority Of the board of direc-
tors, and limiting or prohibiting the
opening of branch banks.
Eclipse of Guaranty Movement
1.-THE question of state guaranty of
bank deposits appears this year to
have passed into an eclipse, so far as
the extension of the idea is concerned,
Notwithstanding the fact that state
guaranty laws were recommended by
the governors of. two states, and bills
were introduced in several of the
states, all Of which were defeated.
The general tendency, so far as state
guaranty of deposits laws are con
cerned, is distinctly the other way, the
indications being that several states
now having guaranty laws are trying
to free themselves from this legisla-
ton. Oklahoma has abandoned the
plan OF state guaranty Of deposits, and
this year the South Dakota legisla-
ture has repealed the state guaranty
law and has referred the repeal to the
people at the next general election for
ratification"