Salt Lake Tribune | 1919-09-13 | Page 18 | Bank Directors must Take Oath

mmm MUST TIE OATH Only One Salt Lake County Institution Satisfies Law, j Say Officials. Statute Requiring Qualification Qualifica-tion to Be Enforced, Declare De-clare Commissioners. There :is only one bank in Salt Lake county which has a full board of directors who are qualified to act. The other seventeen sev-enteen banks have directors listed who have not taken the oath of office of bank directors, according- to the records of the county clerk's office, which were submitted to X. T. Porter, state bank commissioner, yesterday. Walker Brothers' Bankers Is the only institution with all directors qualified, according to the county clerk's report. Says Directors Not Qualified-Five Qualified-Five hundred of . the thousand state bank directors are not qualified, asserts Commissioner Porter, who has reports from the clerks of the counties throughout through-out the state. Each of these directors lias been notified, he says, that he has not fulfilled the duty of a director and that unless immediate steps are taken to qualify the banks will be forced to name other directors who will act in accordance with the banking laws.' There are 100 state banks in the state and only twenty-eight of these are operating oper-ating with directors who have qualified according to law, says Commissioner Porter. Statute Is Quoted. The law requires that "each director of a bank when appointed or electted shall take an oath that he will so far as the duty devolves on him, diligently! and honestly administer the affairs of such bank and will uot knowingly violate or wilfully permit to be violated any of the provisions of the law applicable to such bank; that he be the owner in good faith and in his own right of at least $500 worth of shares in banks located in cities of the first and second classes and of shares valued at $200 in othor cities, and that these shares subscribed by him or standing in his name on the books of the bank are not hypothecated or in any way pledged as security for any loan or debt and that the stock further had not been pledged as a security for any loan or debt during his previous term. This oath must be subscribed by the director and filed with the county clerk." Law to Be Enforced. This law requiring a special oath of office of-fice for bank directors became effective July 1, 1912, but it has not been enforced, . according to Commissioner Porter, who says that he now proposes to see that the requirements of bank directors are fulfilled. "Directors," he says, "who are not j legally qualified are able to escape any liability in case the bank fails. They can deny that they are directors if they have not taken the oath of office. I am going to see to it that directors are just as liable for the managemen t of the bank as the president or any other officer, and if money is received in a bank known to be insolvent by the directors and other officials, they will be just as blameworthy blame-worthy and just as liable to criminal prosecution as a bank president." I The law requires that each bank will j have not less than three directors nor i more than twenty-five, and Commissioner Porter holds that it would be more desirable de-sirable to hav-e a smaller board interested in the workings of the bank than a large number of men who are merely using the directorship to further their financial or other personal interests.