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Clarence Tinker, receiver, under date of December 1st, 1908, reports

as follows:

Liability to depositors at date of suspension

Other liabilities

Total

Total assets at date of, and received since suspension.

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$101,710 04

1,134 45

$102,844 49

141,257 18

72,775 19

$16,960 65

42,293 62

1,619 42

5,401 50

6,000 00

500 00

$72,775 19

Litigation now pending prevents the closing of this receivership.

State Bank of White Pigeon, White Pigeon.

J. Murray Benjamin, receiver, under date of December 1st, 1908, reports as follows:

Liability to depositors at date of suspension.

Other liabilities

Total.

Total assets at date of, and received since suspension..
Amount collected by receiver to date

Disposition of collections:

$127,545 34

1,168 09

$128,713 43

177,623 08

122,912 85

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Charles T. Russell, receiver, under date of December 1st, 1908, reports as follows:

Liabilities to depositors at date of suspension..
Other liabilities

Total

$65,491 80

16,896 90

$82,388 70

Total assets at date of, and received since suspension.
Amount collected by receiver to date

236,876 78

123,520 43

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The closing of this receivership depends on pending litigation.

The City Savings Bank, Detroit.

The Union Trust Company, Detroit, receiver, under date of December 1st, 1908, reports as follows:

Liability to endorsers at date of suspension

Other liabilities

Total.

Total assets at date of, and received since suspension.

Amount collected by receiver to date

Disposition of collections:

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$3,378,121 20

662,937 50

$4,041,058 70

4,482,056 37

2,640,104 10

$82,482 13

1,964,686 69

78,651 73

91,233 74

100,000 00

Deposits and collections returned.

57,885 11

Balance in hands of State Treasurer

263,968 16

Balance in hands of receiver

1,196 54

$2,640,104 10

Loans paid and other disbursements

Pending litigation prevents closing this receivership.

The Athens State and Savings Bank, Athens.

Frank Wolf, receiver, under date of December 1st, 1908, reports as follows:

Liability to depositors at date of suspension

$106,227 50

Other liabilities

1,877 68

Total.

$108,105 18

Total assets at date of, and received since suspension...

127,388 59

Amount collected by receiver to date

...

39,142 00

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There has been collected by the department on accounts of fees for the annual examination of banks, in accordance with the provisions of section 40 of the General Banking Law, $25,959.79. The department has turned over to the Secretary of State for franchise fees, on account of new banks and increase of capital stock, $955.50, making a total of $26,915.29 received from banks and trust companies during the year. A list of the State banks, showing the dates on which they were examined and the amount of the examination fees, will be found in the latter part of this text. I would also call your attention to the certificate of the State Treasurer, showing that he has checked over the amounts collected by the department in this regard and finds that the fee received from each bank is in compliance with section 40 of the banking law.

The expenses of the department for the year were as follows:

Salary of H. M. Zimmermann, Commissioner

Salary of W. Donovan, Deputy Commissioner
Salary of Chas. M. Turner, Examiner

Salary of H. E. Johnson, Examiner

Salary of Jas. I. Van Keuren, Examiner

Salary of E. R. Morton, Examiner (resigned Aug. 1, 1908).

Salary of Chas. H. Ayers, Examiner

$2,500 00

2,000 00

1,700 00

1,700 00

993 20

1,700 00

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Salary of Grant J. Brown, Examiner

Salary of Chas. E. Toms, Examiner..

1,700 00

1,700 00

Salary of Chas. H. Adams, Examiner

Salary of A. E. Manning, Chief Clerk and Examiner

1,700 00

1,700 00

Salary of extra clerks

Salary of Carl E. McAlvay, Examiner (appointed Sept. 1, 1908)

Salary of Geo. S. Anderson, Examiner (appointed July 1, 1908)

850 00

563 60

2,969 58

Expense incurred in the examination of banks
Miscellaneous, viz.: Printing, stationery, postage, etc.

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The receipts of the department for the year have been decreased somewhat on account of the shrinkage in the total volume of business of the State banks, especially noticeable the early part of the year, when all the examinations were made for which fees are charged. Yet owing to the extra work connected with the organization and examination of the thirty-three new banks, the consolidation and closing of the banks heretofore mentioned, the necessity of hiring new and untried men

the purchasing of new equipment, has caused the expenses for the year to be increased. This increase, however, amounts to but $800.08.

I believe I am safe in saying that the closing of banks found to be insolvent, and the attendance at court as witnesses, has caused the department to lose the services on the road of one examiner for nearly six months. The opening and examination of new banks and the loss of the services of an experienced examiner during the year has resulted in the loss of another six months for one man.

While the volume of business reached the lowest point the forepart of the year, it must be remembered that the number of items in the banks-and that is what consumes the time in the work of examination— has steadily been on the gain, as is evidenced by the increase in the number of depositors and the increase in loans.

It will be noticed that the net cost to the State is $8,283.72, an increase of little more than $2,000.00. I believe this increase is fully warranted and am frank to say that the people of the State of Michigan are today receiving more for what it actually costs them for bank supervision than are the people of any other State.

AMENDMENTS TO BANKING LAW.
Salaries.

The force employed by the department consists of the Commissioner, Deputy Commissioner, nine bank examiners and an office force of four people. In order to perform the duties imposed by law in accordance with the requirements of a practical supervision, and not add to the number of examiners or employes, the department must retain such examiners who are by their experience in the field, peculiarly fitted to accomplish their work in a thorough yet expeditious manner.

Successful bank supervision must have for its foundation honest, competent and experienced examiners. The Commissioner must, of necessity, rely on their report as indicative of the course he must pursue in righting dangerous conditions and infractions of the law. Everything being equal, an examiner's worth increases according to his experience, as the average examiner cannot render the best service to the department the first year or two of his employment.

I would recommend, therefore, that the examiners' salaries be graduated according to years of service: For instance, for the first year a salary of $1,500.00; for the second year, $1,700.00; the third year $2.000.00, and for the fourth and every year thereafter, a salary say of $2,500.00. In this manner it would be possible, I believe, to retain the services of men whose term of employment has made them familiar with the conditions existing in the various communities, who have had the actual training and become so proficient as to render maximum service for a moderate compensation.

If the law were amended in this direction, I believe the department would be able to keep identified with it for a longer period men who are valuable on account of their technical experience. As it is, at the present time, the department is exceedingly fortunate if it can retain its examiners for three or four years. A successful system of bank supervision cannot be expected until it is possible for the State at all times

A civil service plan has been suggested. Such a system would be desirable, but in the event of it not being adopted the placing of examiners' salaries on a graduated scale would certainly be a great step in the direction of building up a system based on the merits of those employed.

It is obvious that a commissioner with the best interests of the department in mind would be loath to part with the services of a man who has had years of experience. None of the examiners connected with the department ten years ago now remain in its employ, all having left of their own volition, taking positions affording far better salaries in nearly every case.

Enforcement of Assessment.

While the Michigan Banking Act is, as a rule, a good law, especially when compared to the statutes of a majority of the other States, there are needful provisions which should be added. The more important amendment is that which relates to the enforcement of an assessment on stockholders in case of impairment of capital stock. Section 42 of the law should be amended in this regard. As at present constituted, this section provides that upon the discovery of an impaired condition of the capital the Commissioner shall give ninety days notice in which to make such impairment good. In default of such restoration of capital, the only alternative remaining is to take possession of the bank and apply to the court for the appointment of a receiver.

This section should be amended specificially conferring upon the commissioner the authority to order and enforce an assessment upon the stockholders, in order to restore an impairment of capital, and it should specifically prescribe how such an assessment might be levied, when and in what manner it should be enforced.

Commissioner given Discretionary Power.

Section 55 of the Banking Law would seem to be out of harmony with section 42, in that the latter provides that the Commissioner shall give ninety days notice to make good in case of impairment of capital stock before taking possession of the bank, while the former provides that on discovering such impairment he may take charge of the bank forthwith and ask for the appointment of a receiver.

The provisions of these sections should be harmonized, and all apparent conflict now existing removed.

Temporary Receiver.

As the law now reads, after a receiver has been appointed upon petition of the Commissioner and Attorney General, no provision is made whereby a receiver may be released and the bank revert to the stockholders, in case they are willing and in a position to re-establish and rehabilitate the bank.

The National Association of Supervisors of State Banks at their last meeting recommended that the several commissioners of banking should have authority to take charge of a bank temporarily, and in case of the capital being restored, and other conditions being such that the bank

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