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REPORT OF THE COMMISSIONER.

STATE OF MICHIGAN,
OFFICE OF THE COMMISSIONER OF THE
STATE BANKING DEPARTMENT,

Lansing, Mich., Dec. 31, 1890.

Hon. Cyrus G. Luce, Governor of Michigan:

In accordance with Section 43, of the General Banking Law of the State of Michigan, I have the honor to present you herewith, the second annual report of this department.

Michigan is to be congratulated upon having so good a banking law, which, after a trial of two years, has been found satisfactory to the large number of flourishing banks organized under it, and to the thousands of depositors who have patronized and been benefited by their incorporation. On January 7, 1889, the present State Banking Law went into effect. At that time there were eighty banks incorporated and doing business under State law, whose total assets were $38,963,417.19.

Today we have one hundred and seven incorporated State banks, whose assets are $56,648,415.75, an increase in two years of twenty-seven in number, and an increase of $17,684,998.56 in assets.

NEW BANKS.

During the year closing Dec. 31, 1890, I have issued authority to fifteen new banks to commence business, with a capital of $917,000.

The location, date of authorization and capital of each, is as follows:

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NATIONAL BANKS.

Of the fifteen new banks mentioned above, six were formerly National Banks, viz:

Plymouth National Bank, Plymouth, now, Plymouth Savings Bank; Citizens' National Bank, Flint, now, Citizens' Commercial and Savings Bank; First National Bank, Decatur, now, First State Bank of Decatur; First National Bank, Whitehall, now, Whitehall State Savings Bank; First National Bank, Holly, now, First State and Savings Bank of Holly; First National Bank, Mason, now, First State & Savings Bank of Mason. The high price of United States Bonds, the liberality with which our State law deals with the customers of State banks as regards the payment of interest, the loaning on mortgage security, and the amount loaned to individuals and firms, together with the publication of reports, examinations and individual liability of stockholders, which is the same as with National banks, has no doubt caused these changes, and induced other banks to correspond with this department, with a view of changing in the near future.

CLOSED BANK.

The stockholders of the Carson City Savings Bank of Carson City, being convinced that the place was not large enough to support two banks, applied to this department for permission to sell, transfer and assign to the State Bank of Carson City, their lease, furniture, fixtures and good will. The commissioner being satisfied that such a consolidation would be for the best interest of the stockholders and customers of both banks, gave his permission, and June 6, 1890, at a meeting of the stockholders representing a majority of the stock, it was voted to make the transfer as above stated and go into voluntary liquidation.

According to a report made to this department Dec. 19, it appears that the depositors have all been paid with the exception of $81.67, which, I understand is due to stockholders.

A dividend of 50 per cent has been paid to shareholders, and they have sufficient assets to pay the balance, if the same can be collected.

STOCKHOLDERS.

By referring to the report of December 19, you will see that the one hundred and six State banks and two trust companies reporting, have a capital stock of $8,460,835.

This amount is owned by 3,584 different persons as follows, viz:

Nine hundred and seventy-four owning $500 and less.

One thousand and thirty-five owning more than $500-up to and including $1,000.

Five hundred and eighty-one owning more than $1,000-up to and including $2,000.

Six hundred and eighty-eight owning more than $2,000-up to and including $5,000.

Three hundred and six owning more than $5,000.

SAVINGS DEPOSITS.

Sixty-seven State banks are savings banks or banks with savings depart

as $27,779,136.09, and the number of depositors in the savings department as 124,664.

The average rate of interest paid to these savings depositors is 3 76-100 per cent.

The savings deposits are made up largely of small sums, the savings of industry and economy, although in many cases large amounts are deposited by persons who cannot readily loan their money, for the reason that borrowers, as a class, prefer to deal with banks, rather than borrow from individuals, and this suggests the question, would it not be well to restrict the amount that any one person can deposit in a bank to their credit?

Is it not the experience of every savings bank officer, that large deposits by capitalists, are usually withdrawn in times of financial depression, the very time the bank needs their money most?

REPORTS.

As required by section 21, of the General Banking Law, four times during the year the Commissioner has called upon State Banks to report to him their condition.

These reports were dated May 17, July 18, October 2 and December 19, and are given in detail in the succeeding pages of this report.

Although these reports were called for upon a past day, unknown to the bank officer, they would be valueless, if they were not supplemented by a personal examination, which has been made of every State Bank in this commonwealth.

While it is impossible for an examiner to determine the value of all the securities the bank possesses, or detect all the irregularities that may exist, he can during his short visit at the bank, in a measure verify the correctness of the published report, ascertain whether the bank has loaned its deposits in accordance with law, and, what is of the greatest importance, determine the general character of the management, which after all, is the criterion of success.

The following is an abstract of the reports of the one hundred and six State banks and two trust companies in Michigan, as made to the Commissioner at the close of business December 19, 1890:

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Through the courtesy of Hon. E. S. Lacey, Comptroller of the Currency, I am able to give an abstract of the reports of the one hundred and nine national banks in this State, as reported to the Comptroller at Washington, December 19, 1890.

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Undivided profits.

National bank notes outstanding

Dividends unpaid.

2,425,116 44

508,262 57 1,881,316 00

134,882 50

31,655 46

$68,358,341 25

LIABILITIES.

$15,539,600 00

3,332,775 18

2,715,207 61

2,660,200 00

9,632 59

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In order that you may be able to note the increase in the banking business of the State, I present herewith an abstract of the reports of both State and national banks as reported December 11, 1889.

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