| Show LESSONS FROM THE PANIC during the inception of the mono tary panic governor hughes of new york appointed a commission of bankers whose duty it should be to arii quire into the causes of the flurry and recommend legislation calculated to avert a repetition the report as submitted merits the careful consideration of all those who think financial unrest perilous to nation and individual the first and perhaps most important point touched upon Is re senes tor state banks mr hughes committee thinks a new york bank should hold the 25 per cent cash required of national banks by the federal governments trust companies should also hold 25 per cent reserve although not necessarily in cash the report here distresses to condemn the methods of those shyster bankers aho by emp loyong stock in one bank to secure control of other banks precipitated the crisis through which the nation is passing the commission would empower the state superintendent of banka ba nka to veto the establishment of a bank or trust company or branch or the purchase or control of one institution by another upon goodband and sufficient reason banks in new york city should not be permitted to open branches unless their capital is or more and an additional capital should be for each branch opened closer supervision and con TI OI of all state monetary institutions Is recommended the commission advises that all loans discounts and purchases of commercial pa pershall be read to the directors or submitted in written form at the meeting next succeeding the making of the same and intentional concealment of the making of such loans discounts or purchases should be made a misdemeanor the interchange of deposits by which directors or officers or others indirectly loan to themselves or are enabled to control a chain of banks be made the subject of heavy remarking th atthe capital stock of all banks and trust companies doing business in tha state of new york amounts in round numbers to and the market value thereof Is several times larger the committee says that it would be clearly an invidious and against banking Investments to prohibit the uee of such stock as collateral for loans it js suggested that loans upon such capital stock be limited to 10 per cent of the capital of the corporation po ration whose stock la offered as collateral of underwriting the commission tays that while individuals and private banking houses may legitimately participate in such ventures an incorporated corp orated bank or a trust company assuming to discharge trusts of the ridell ty nature has no right to be on through the instrumentality of a syndicate in the construction of trolley lines power plants or other enterprises terp rises of like character in conclusion the commission rec commends that any loan or advance where the institution itself Is liable for repayment be prohibited |
