Salt Lake Herald-Republican | 1919-03-02 | Page 17 | Carranza's New Banking Law is Called Drasic

1 CARRANZA'S NE NEW I BANKING LAW IS CALLED r j financiers Fear It La Elasticity Essential for for j 1 1 Development Work Wark 1 i iEl I El Paso Tex March 1 Copies t. Copies of ot th the proposed new Mexican banking 1 law liw I submitted by President Carranza t to replace replace replace re- re place the banking law lw of ot 1897 1891 have bee been received hero here and are being copied and sent to e eastern stern banks having Hons In Mexico The proposed new 1 law laws lawis Is s considered drastic especially in th the limitations imitations placed around the tho ba banking business In Mexico at a a time when ta the republic is most in need of ot an elius elastic ca financial system One of oC the tho most Important feature of ot the tha proposed law is that no ban banY may Invest In the stock of or y Institution but only in that of or the SOU soh bank of ot emission to be established Classification of or banks and other Institutions In of ot credit under tho the now law are arc Sole Bank d Sole bank banI of or emission to be established later in conformity with tho the pr pro visions of or the constitution Mortgage banks making loans S secured EC- EC cured by urban or rural real estate with the faculty of Issuing bonds bonds so secured so- so cured b by these same guarantees Int Interest interest inter Inter- rest r- r est bearing and redeemable under stat stated stat ed cd circumstances Banks Danks of ot promotion created especially to facilitate and encourage mining Industrial Industrial in industrial In- In and commercial activities by means of or priority loans granting s their guarantee for tor certain operations andis and Is Issuing suing term short-term cash or treasury bonds bearing Interest st and payable on ona ona I a D. fixed date Agricultural banks to make loans for tor forthe forthe the purchase of or equipment or bear the expense of oC operation to be secured by bythe bythe bythe the pro products and with the priority of rights conceded bv by law p- p Petroleum banks to make all aU kinds of loans and advances x vances for equipment and operation of ot petroleum exploitation en enterprises en- en such such loans to be secured bythe bYthe by bythe the actual products of ot such exploitation and with the prior rights conceded Banks Danks of ot deposit Including those thO banks having the thc faculty for carrying on any kind of or banking transactions under conditions determined by this law with the exception of ot Issuance or of notes treasury bonds or mortgage bonds It On R War nr The Tho stated purpose of or this classify cation is to promote the needs of ot different dif dlf- ferent lines of production and to guarantee guarantee guar guar- antee rca ready capital for the promotion of ot commerce and agriculture I In his message to the Mexican con gress President Carranza attributed his failure to establish a L banking system as provided for by tho the new tu I tion to the European war and the tho in advisability to obtain loans At a a. fair rates rate of ot interest for tor the establishment of ot the tho sole bank of or emission One Important modification of the tho tho banking law of or 1897 proposed i Is hi that tho the capital stock of ot agrIc agricultural deI deposit de de- I posit and promotion banks s must b bo be at least pesos or That of ot the mortgage and petroleum banks backs must be bo at least pesos or Under the proposed new law organizations organs organ now flow using tho the word bank which do not comply with the tho specifications specifications of or the new law will be given six Ix months In which to discontinue the use uso of ot the word The new law prevents prevent i all banks from rom charging penal Interest Limits Are ire Fixed Banks of or promotion will be limited to the emission of or treasury bonds certificates certificates cates and to loans in cash secured by real estate or orby b furniture fixtures and equipment Promotion loans shall not bo more than three-fourths three of the total capital of the bank plus the total of 0 treasury bonds or certificates In 11 lation Agricultural banks will wUl havo th the right to loan cash secured by real estate es estate estate es- es tate and chattels at nt terms not to exceed ex exceed exceed ex- ex five years They shall also have ha havethe havethe the power to make advances of ot cash at terms not to exceed one year for tor the equipment and operation of smaller en enterprises on- on cs than large e a agricultural and stock raising stock stock-rai enterprises The rhe proposed law requires that foreign for tor- sign eign banks hanks must comply with its pro pro- vial visions ons