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from 21 per cent to 22.7 per cent in the average reserve held by state banks. If this high standard for the adjustment of credits is maintained, the financial outlook for Wisconsin is most encouraging.

NEW BANKS

Thirty-two new banks and one trust company bank were authorized to commence business in Wisconsin from November 10, 1915, to November 17, 1916. The average capitalization of these banks was $26,424.24, and the total capital $872,000. One trust company voluntarily liquidated and paid off its depositors.

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Twenty-six banks have voluntarily increased their capital during the period covered by this report.

The method now in force of taxing banks upon their capital and surplus has discouraged many banks from voluntarily in

creasing their capital stock, and I am of the opinion that if the tax was levied on the income instead of the capital and surplus, it would result in a very marked increase in capital.

The unprecedented increase in deposits during the past year leads me to emphasize my previous recommendation that in order to safeguard more fully the depositors, an increase in capital should be required prorata with the increase in deposits.

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The Wisconsin Loan and Trust Company of Superior, on April 8, 1916, voluntarily passed a resolution to pay off its depositors and dissolve the organization.

The Salem State Bank, on March 14, 1916, went into voluntary liquidation under section 2024-28 of the statutes. On May 8, 1916, this department was notified that all depositors had been paid in full and a sixty per cent dividend paid to its stockholders, and that the balance due the stockholders would be paid as soon as all collections were made and the furniture

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The following is a summary in gain and loss in capital of state banks and trust companies:

Capital, November 10, 1915
Capital, 32 new banks

Plymouth, Wis.

Westby, Wis.

Less Capital:

$22, 898, 250

Capital, 1 new trust company.
Capital, 26 banks increased

822,000
50, 000
384, 300

$24, 154, 550

$25,000

7,200

50,000

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COMMERCIAL AND SAVINGS BANK OF RACINE

In Liquidation

I am pleased to report that, by virtue of the power and authority vested in me as commissioner of banking, and by order of the circuit court for Racine county, I have sold all of the remaining assets of the Commercial and Savings Bank of Racine, in liquidation, to the American Trades & Savings Bank of Racine, a duly authorized state banking corporation with a paid up capital of $200,000.

This purchase was made upon the condition that the said American Trades & Savings Bank should pay in full the claims. of all the creditors of said Commercial & Savings Bank by the issue to its noninterest bearing time certificates of deposit to each and every such creditor, whereby payment in full of said claims should be assumed by said purchasing bank, absolutely and without condition, in seven (7) equal annual installments, the first series of which said payments should mature on the first day of February, 1917, and the last of said series matur

ing on the first day of May, 1923; except, that in case of claims less than seven (7) dollars in amount, the entire balance due thereon should mature and be payable with the first series of payments, to wit: on the first day of February, 1917.

If liquidation proceedings had continued in the affairs of the Commercial & Savings Bank, it would have required several years in which to effect a final adjustment of all claims. Continued litigation would have resulted in forcing many of the larger concerns into bankruptcy, with a consequent shrinkage in the value of the assets. The settlement of claims in a closed institution is slow and expensive and causes a corresponding reduction in dividends for the depositors.

The American Trades & Savings Bank is a going institution, and, consequently, can realize a larger percentage from the remaining assets of the Commercial and Savings Bank. It is, also, in a position to assist many of the large manufacturers to liquidate their old indebtedness and reëstablish their credit.

Since this bank opened for business in July, it has received, in the aggregate, almost $200,000 in new deposits, which indicates that it commands, in a large measure, the confidence of the people.

The first series of certificates, not due to the depositors of the Commercial and Savings Bank until February 1, 1917, was paid by the American Trades and Savings Bank during the week of December the 18th, 1916, thereby supplying funds to many at a season of the year when money is most needed.

IN THE HANDS OF THE COMMISSIONER

An examination of the First State Bank of Campbellsport disclosed that the president of the institution had invested funds of the bank to the amount of $100,000 in doubtful securities.

On September 6, 1916, this bank placed its affairs and assets under the control of the commissioner of banking in accordance with section 2024-29 of the statutes. Under section 2021 of the statutes an assessment of two hundred per cent was levied by the board of directors upon all of the stock of said bank to make good such deficiency. This assessment was duly collected and the doubtful assets replaced with cash and bankable securities. A new board of directors and new officers were elected and the bank was turned back to the stockholders on October 21, 1916,

having been in the possession of the commissioner of banking for a period of forty-five days. The fee of ten dollars a day was collected, as provided by section 2024-29 of the statutes, making a total cost to the bank of $450.

On October 23, 1916, the bank reopened for business, and is now making very satisfactory progress.

CITIZENS SAVINGS & TRUST COMPANY

In Liquidation

Liquidation proceedings continue slowly, yet some progress has been made.

No further dividend has been ordered by the court since the one of twenty-five per cent paid in March, 1914, owing to the fact, as stated in my 1915 report on page nine, that numerous lawsuits have not yet been ultimately decided. Our supreme court has passed upon a number of these, and the United States appellate court has decided certain questions relating to the bankrupt Clark Realty Company in connection with the claim. of the Citizens Savings & Trust Company. In most of these cases our contentions were not sustained. The ownership of our safety deposit vaults, which was strongly attacked, was, however, decided in our favor by the supreme court, but in the others we were not successful, and some were ordered back to the lower court for re-trial and ultimate adjudication.

Some of the loans and securities, upon which we expected quite a loss, turned out favorably, and, in a few instances, we recovered the full amount of our claim, but others proved a total loss, principally on account of alleged fraud and collusion by certain officers of the trust company and the so-called Pereles corporations.

Suit has been commenced against the directors of the Citizens Savings and Trust Company to recover losses sustained by their inattention and negligence of duty, and another suit has been filed against the stockholders of record for the purpose of establishing and recovering their contingent liability.

LEGISLATION

Certain conditions have arisen from the operation of the banking law which demonstrate the necessity of further legislative action for the purpose of strengthening our banking statutes.

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