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STATE BANKING DEPARTMENT

REPORT OF THE COMMISSIONER.

Hon. A. E. Sleeper, Governor of Michigan :

STATE OF MICHIGAN, Banking Department, Lansing, December 31, 1919.

Herewith is submitted the thirty-first annual report of the Commissioner of the Banking Department for the State of Michigan, as required under the provisions of Section 43 of the General Banking Law, for the year ending December 31, 1919.

During the past year a continued growth is noted in Michigan state banks, as evidenced by a comparison of the total resources as shown by the call of November 1, 1918, and the call of November 17, 1919. The November 1, 1918, call showed total resources of 509 state banks, 2 industrial banks and 9 trust companies were $729,841,920.92, and on the call of November 17, 1919, total resources of the 516 state banks, 2 industrial banks and 10 trust companies were $942,899,109.20, showing a net increase for the year of 29 per cent, or approximately $213,057,188.28.

A review of the calls herewith submitted would indicate that this growth signifies a prosperous condition in Michigan, inasmuch as the principal item of increase was in the deposit account, and also that there was a very large decrease in rediscounts and bills payable.

On all calls made during the year it was shown that reserves were met in a satisfactory manner, and that conservative business methods were adopted in placing the excess funds which have accumulated in our banks through their depositors.

Some two years ago a financial plan was inaugurated in this Department for the purpose of maintaining its accounts in proper condition. The budget system which was adopted July 1 last does not differ materially from the plan heretofore in operation in this Department, consequently it has not been difficult to adjust ourselves to the plan suggested by the budget commission.

Michigan state banks continue to interest themselves in the Federal Reserve System, as is indicated by the increased number of banks securing membership during the current year. According to our report of December 31, 1918, there were at that time 117 member banks, and at this date there are 145 members, an increase for the year of 28 members. So far as we have been able to determine, membership in the Federal Reserve System by our state banks has been generally satisfactory, and we look for a continued increase in membership.

During the year the Attorney General advised that it was the duty of this Department to supervise and examine trust departments of national banks operated under the Federal Reserve System, and the work has been given attention along the same lines as our state trust companies are examined.

At the close of the war considerable activity was shown among dealers in foreign exchange and by steamship ticket agencies which are under the supervision of this Department. There are at present sixty licensed, all of which have been examined according to the provisions of the statute as it applies to agencies of this nature. With two exceptions I think all of the amendments suggested in our annual report to you in 1918 received favorable consideration from our legislators and are now in effect. Other amendments have also been made to our banking law which materially strengthen the banking situation within our state, and they are all operating satisfactorily.

There have been no failures of Michigan state banks during the current year, and an examination of the reports made by our examiners and reports from banks on calls made would indicate that the conditions in Michigan are entirely satisfactory

The following schedules, attached hereto, detail the activity of the Department and the condition of Michigan banks during the past year:

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