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banker that were denied to another would create confusion and work greater evils than those sought to be corrected.
BUILDING AND LOAN ASSOCIATIONS.
I have repeatedly urged that building and loan associations be under State supervision. Although they are all incorporated under one law, there are hardly any two who are doing business alike, and we have reason to believe that some have not complied with the law in their incorporation or in the management of their business.
These may successfully carry out all their promises without supervision, but it is a doubtful experiment and one the State can hardly afford to try. Where the opposition is strong and the competition sharp, temptation to take chances and try experiments is so great, I fear for the result.
While supervision will not prevent the failure of mismanaged associations, it can provide for uniformity of business methods in the conduct of the business and, what is of more importance, see that the associations are incorporated in accordance with law.
I fail to see the value of a building and loan association law, unless there is some one to whom those incorporating under it are accountable for any infringement or infraction of its provisions.
In concluding this report I desire to acknowledge the efficient services of deputy and clerks, who have labored with me to make successful the department charged with the execution of the banking law.
There perhaps is no department in the State where the duties are so onerous as those of the banking department. With nearly one hundred and thirty banking institutions located in different parts of the State, with diversity of interests, and varied management, many situations arise that are not clearly defined by law, which require the most delicate consideration.
There is no business so sensitive as the banking business. It is built up and operated principally on the faith or confidence one person has in another. As each bank is dependent on other banks for the successful transaction of business, it requires constant attention, and the exercise of the best judgment in the rulings made, and a hasty, injudicious or over officious act of this department might easily precipitate a run on one bank, which, being transferred to others, result in a panic which would paralyze every business interest in Michigan.
The banking business is so closely allied with other business interests, and the machinery of each so delicately adjusted, that the least friction in the one class is sure to affect the other.
The change from the old system of banking, which was without any clearly defined restrictions, to the new system with its limitations and necessary supervision, has been accomplished without creating financial disturbances or business uneasiness, and is a matter of gratulation, and the Commissioner has reason to believe that the same was accomplished by, and his thanks are due to the officers of the different banks of the State for their prompt and hearty acquiescence in the requirements of law, and the requests and rulings of this department.
THEODORE C. SHERWOOD,
STATE BANKS AND TRUST COMPANIES
As made to the Commissioner of the State Banking
MAY 4, JULY 9, SEPTEMBER 25, AND DECEMBER 2
THE COMMERCIAL SAVINGS BANK, ADRIAN.
W. J. COCKER, President; S. HOWELL, Vice President and Cushier; A. BENNETT, Secretary. DIRECTORS--W. J. Cocker, Seymour Howell, C. R. Miller, Norman Geddes, A. Bennett, A. M. Stephenson, Chas. Bowerfind, D. Metcalf, E. C. Sword.