The midland journal. (Rising Sun, Md.) 1885-1947, 1930-03-14

FINDS STATE BANKS
WELL SUPERVISED
Bankers Body Sees Less Politics
In Banking Departments With
Better Facilities in the Hands
of the Responsible Officials.

A survey of state banking depart
ments by the State Bank Division,
American Bankers Association, dis
closes distinct tendency the past five
years to take bank supervision out of
politics, to increase the discretionary
powers Of bank commissioners, to
lengthen their terms Of Office, to sup
ply them with adequate forces of
qualified examiners and to relieve
banking departments of duties foreign
to banking, says a recent statement
issued by the association.
1--WE have consistently urged that
the Office Of bank commissioner be as
free from partisan politics as the ju-
dietary itself and that 1t be divorced
from all other functions of state gov
ernment," the statement says. EUR
ther. that his term of Office be made
more secure and lasting, with suffi.
cient salary and power granted to at
tract and retain the services of men
Of outstanding executive ability, cour.
age, resourcefulness and successful
banking experience"
"Five years ago the first survey Of
state banking departments by the divi.
sion demonstrated the need for i'm
provements. On the basis of data
now in hand it is evident that, through
the revision Of statutes in many states,
rapid steps are being taken in the
right direction. One by one the states
are coming to recognize the primary
Importance Of strong, competent bank
ing departments. The demand for in
creasing the effe, tiveness of banking
departments is beginning to be met"
How Bank Commissioners Are Chosen
The office of bank commissioner is
now operated as an Independent de-
partment Of state government in thir-
ty-four states. the bankers find. In
two states the bank commissioner is
elected at general elections: in one he
is appointed from eligible lists of the
civil service and in another he is Sc.
lected by the banks. In one state the
bankers ASSOCIATION elects a list of
five names from which the governor
appoints one as superintendent of
banks: in another he is appointed by
the State Corporation Commission and
in another by the State Banking
Board.
Terms Of Office of bank commits.
sioners have been heightened in sew.
eral states during the last five years"
the report says. "In % states the
term is four years. in one, five years.
and in three it is six years and in
some the term indefinite. A short
term is condemned on the grounds
that the commissioner has insufficient
time to become thoroughly conversant
with his field work. A longer term
permits his rendering useful service
through capitalizing his experience.
Five years ago the average length of
service was less than three years,
while now 1t has risen to five years.
Higher Sta dards Required
"Signs of an awakening to the me-
cessity of making successful banking
expert nee a qualification for bank
commissioner are evident. While elev-
en- states report no banking expert
ence necessary. the majority RET
experience Of this sort, ranging H.,
two to five years. Twelve states now
have banking boards, with powers
ranging from acting in an advisory
capacity to iull power over all state
banks 10 issue and reject charters.
"A healthy sign is the number of
reports which t''sclose that the com.
missioners have full power to appoint
hank examiners or that these appoint
ments are made from civil service
lists. This power is now granted to
the commissioner by twenty-seven
states. Three require that selection
be from civil service lists. Complaints
are still made in few states Of po-
litical pressure in the appointment OF
examiners, but the contrary seems to
be true in growing number Of states.
The most capable commissioner can
not successfully perform his duties
unless he is able to command the
services of efficient, honest examiners.
The safety Of depositors is dependent
on their work. and their appointment.
fitness and compensation are highly
important. The number of examiners
has increased Of per cent in the last
five years."