The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-06-15
Fewer Banks in
Operation Would
Make Fewer ClOsings
(Continued from mo. one1

NOOHCluueO 1TOm page ONoJ
in January of each even-numbered
year instead of July of each odd
numbered year. Banks already dcsig-
until January, 1928, although new
bonds may be required by the gov
crning boards of political subdi-
visions to cover the period from July,
1927, to January. 1923.
In future, Mcmillan said, the ques-
ton Of the liability Of a bank when
used for the purpose Of collecting
checks, drafts and other items Of ex-
change will be determined by what is
known as the Massachusetts rule.
This question has been vexatious
one. he said, and will settle much
uncertainty as to the law governing
such cases. The new law places the
liability where it belongs, he said,
on the one seeking to have con-
verified into cash check on an out
of-town bank.
The Massachusetts rule, he said,
permits banks receiving paper for
collection to use the services Of any
reputable bank as agent in the COL
lection effort and permits it to re-
ceive payment in drafts issued by the
bank on which the check was drawn,
VI any WHIT UNHk receiving Tie lLcm
for collection.
Consolidation Made Easier
Consolidation Of banks was made
easier, Mcmillan said, by the law per-
hitting the merger Of two banks up
on consent Of two-thirds Of the stock
holders of each bank. The law re-
quiring the unanimous consent Of the
stockholders of each bank was un-
manageable, he said. In some cases
objecting stockholders held out for
big bonuses before conserving to
proposed mergers. The same law
permits the state banking depart
ment to bring together, after proper
investigation, two banks without de-
lay or needless publicity.
The law permitting banks to open
secured savings deposit departments
marks a new departure in North Da-
! kota banking circles, Mcmillan said.
1.-THE law permits banks to receive
money on deposit on savings account
and pay thereon rate of interest
not to exceed two and one half. per-
cent, and such deposits are required
to be invested in United States, state
and certain other bonds Of political
subdivisions within the state," he
Said.5
"The opening Of such department
lis not. obligatory upon any bank and
Els entirely within the province of
each bank IA decide for itself. The
restrictions Of the law are such that
no deposit in excess of $500 may be
received from any one person, and
notice Of withdrawal may be re-
CURED in much the same manner as
1.-The provision Of law relating there
ito in the case of savings banks. The
lawful reserve for such secured saw
ings deposits shall be not less than
10 per cent, and of this amount four
fifth's shall be kept with an ap-
proved reserve agent, and one-fifth
may be kept in cash in the CONNER
cial department. of the bank.
Must Make FREQUENT Reports
aside from one-fifth of the cash
reserve mentioned, all of the reserve
and the Investments must be kept
separate and apart from the other
reserves and Investments Of the bank,
and no such secured deposit invest
ments may be loaned. pledged or hv-
pothecatcd for any purpose. The
bank is required to make frequent
Sfeports to the state examiner show
ing the condition Of the department,
yet the reportstwill not be published.
excepting that the examiner may re-
sauire the items Of deposit. invest
and reserves belonging to this
department to be shown separately
upon the published report of the
bank. The law does not interfere in
any way with banks who now have or
who may hereafter desire to put into
operation q general savings deposit
department.
Severe penalties may be invoked
for the making Of false reports, or the
exhibiting of any false paper with
intent, to deceive the examiner. direc-
tors or other persons authorized to
examine into the condition Of the
bank.
s ID Experiment'
y "The law is frankly an expert
inent and enacted mainly to give to
small savera, in every community an