The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1926-11-05

ed balance OF SZ,9O4.99. No salaries
were drawn. The commission is au-
tomatically discharged with the fill
ing of its report.
Recalling the conditions preceding
the states difficulties of 1919 and
1920, the commission expresses the
opinion that something other than, or
at least in addition to bad banking
laws and poor banking was respOn-
sible for the condition. 1t character
ICES as NEARLY beyond belief" the
manner in which the state recovered.
Climatic Conditions Blamed
eff the fault had been with our
state banking laws, or with the gen
eral character and manner of doing
banking business in the state of
Montana, then the conditions would
have been local and should have been
confined to our own state" the COM
mission declares. Indeed, if such
had been the case, the failures should
have been confined to state banks,
but the fact remains that the pro-
portion of state bank failures with
in our state was no greater than of
national banks. All Of this in pro-
portion to the numbers existant at
the beginning of the depression. The
further fact remains that other sec
tions of the country, wherein finan-
cial institutions and banks were OPP
Grated under other jurisdictions, suf-
fered as seriously as did we. Taking
always into consideration the fact
that very few regions were subjected
to the unfortunate climatic and crop
conditions which we experienced in
Montana in 1919 and 1920.
ct is interesting to record that the
banks of Montana at one time in this
period owed the banks of rediscount,
their outside correspondent banks,
the Federal Reserve bank and the
War finance corporation the stupen-
dous sum of S35,O00,00O. This was
money that was borrowed by the
banks really for the use of their
customers, but very largely on the
credit of the local bankers and on
their faith in Montana and her peo-
pie and resources. 1t is nearly be-
yOnd belief that such a vast sum of
money could have been realized in
this state at such a time and under
existing conditions, and diverted from
the channels of trade to the payment
of old diets, and yet admit of the re-
Mobilization Of business in a substan-
tial way at the same time. That
such has been the case is irrefutable
evidence Of the fact that our state
not only possesses resources of I'M
doubted value but of the further fact
shat our people of all classes, in
GLIDING the bankers, were possessed
of courage, fortitude and intelligence
and at least a fair degree of bust
ness ability and acumen.
No New Code Recommended
Cali of the foregoing observations
bring US to the conclusion that it is
not possible for this commission to
evolve and recommend or for the
legislative assembly of the state of
Montana to enact a law, or a set Of
laws that will protect the people of
this state from crop failures, hard
winters, Debated prices and general
unfortunate financial conditions. We
have not seen fit therefore to rec
ommend that our state banking code
be scrapped and thrown on the waste
dump, or that an entirely new code
be adopted for the regulation of
banking in the state of Montana
hencefOrth. x
'By a study of the provisions of
the codes of the different states, this
commission was enable to make COM
parsons and, In the bill which the
commission has drafted and is sub
hitting herewith, there are changes
suggested which, to the commission,
seem proper. We we're able to find
in the banking codes of other states
certain provisions and sections that
seemed to this commission to be
more workable and to offer better
safeguards than provisions existing
in our own code. Wherever we have
found such provisions or sections, we
have carried them into the offered
bill. Wherever our attention wa s.
called to deficiency or uncertain and
unfair provision in our code, we
have recommended that they be
changed, or that additional provi-
siOns be enacted.
Most Drastic Change
''The bill which we offer is not
therefore a departure from the exist
ing law in every respect. 1t is not
revolutionary but it has preserved
the general principle and theory of
the present state banking law and
offers such amendments, changes and
additions as this commission deems
essential and proper.
perhaps the most drastic change
presented by the proposed bill is
contained in the provisions for the
liquidation Of state banks. Hereto
fore, state banks, when forced to
liquidate, accomplished their Iquida-
ton through receivers appointed by
the district courts. This plan of IL
quotation has not been satisfactory
in any state. 1t was long ago aban-
donde in the national system and in
nearly all the states of the union.
National banks are hquidated thru
the comptrOller's office, that is, thru
the banking department of the gov
eminent. In most states, state banks
are Hquidated through the depart
ment of banking. Your commission
studied the various methods of liqui-
dation in effect In the different
states and has worked out a plan
which the commission believes will
prove to be more economical and eff
ficient than the present receivership
plan. The plan recommended con-
templates the liquidation of state
banks in the future under the direc-
bs5p9ly of the state superintendent Of
~ -, i, - dapartment IT is to