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In my report of last year, I called your attention to private banks and bankers, doing business in this State without restriction or supervision, and asked that some measures be taken that would at least give the customers of these so-called banks the same opportunity of obtaining a knowledge of their condition, that the depositors in incorporated banks now have.

I would again call your attention, and the attention of the Legislature to this subject.

I ask it, not to oppose or antagonize these institutions but because I have, during the past two years, been repeatedly urged to bring this matter more prominently before the Legislature, by customers of these so-called banks in villages, where there are no other than private banks, and the farmer, the mechanic, the laborer and merchant are compelled to use them. in the transaction of business.

A banking law with the supervision it provides, is supposed to stand between the people and banking corporations, protecting the interests of all alike; and as the law as it now stands does not give that protection to depositors in all the associations using the name "bank" or "banker" it seems to me it should be amended in the interest of, and for the protection of the public.

The people cannot safely keep their money in their houses, and therefore for safe keeping are almost compelled to deposit it in a bank, and if a private bank is the only bank in the place, then of necessity they must patronize it, and take the banker's "promise to pay" without other security. Now the question is, do the people ask too much when they urge the passage of a law compelling these banks, when called upon, to publish a sworn statement of the amount of capital, the amount of deposits and the disposition of the same, and submit to an examination to verify the correctness of the report?

The public at least have a right to know the amount of capital in these institutions, in the interest of equal and just taxation.

It is hardly just that a merchant, who has invested his money in goods that are seen and estimated by any one who cares to estimate their value, or a farmer, the value of whose property is easily appraised, or that incorporated banks whose capital is known, be taxed for the full amount of their capital stock, while a private banker with more money invested in his business than either, could, if he so desired, pay but half the amount in taxes, simply because there is nothing in sight.

And it certainly is not desirable to allow a banker to return a larger amount of capital for taxation than he possesses, for by so doing he deceives the people, for a purpose which is only too apparent.

Those bankers who mingle their private funds with their public busi ness and then claim the whole as private, should at least be content withtheir private firm, or individual name, and not use the name "bank" or "banker" which implies a corporation.

Some claim that, as their business is that of private bankers, the public have no more right to investigate it than they have to examine into the affairs of the merchant or farmer.

This argument would hold good if the business was really private, but we insist that when they advertise for deposits, the business ceases to be private, and becomes a public matter, and the using the name "bank" or "banker" on their signs, drafts, checks or letter-heads, is prima facia evidence that the public are invited to deposit their money with them. If this were not their intention, they would use their individual or firm name only, the same as does the merchant or farmer.

I think when the word "bank" or "banker" is used in connection with any business, the State should step in and protect the name, in the same way that the United States protects the word "National," as will be seen by referring to section 5243 of the National Banking Act, which in substance is as follows: "All persons or corporations doing the business of bankers, brokers or saving institutions, except savings banks authorized

by Congress, are prohibited from using the word "National" as a part of their corporate name, and any violation of this prohibition shall subject the party chargeable therewith to a penalty of fifty dollars for each day during which it is committed or repeated."

The government must of necessity protect the name "National" as applied to banking corporations, else by its frequent use by irresponsible parties the public would soon cease to respect a name that to-day has the confidence and respect of the civilized world.

So the State should care for, and by strict laws protect and make honorable the name Bank that implies so much, and allow it to be used only by those corporations organized under State or United States laws, which provide for the greatest publicity.

Our State law protects those who patronize insurance companies. Twelve of the richest and most honorable men in the State cannot individually or collectively engage in the insurance business, unless they incorporate under the law which controls and regulates insurance.

Equal justice demands that the much larger class who patronize banks should have the same protection.

It is not sufficient that private bankers advertise their "responsibility" as so much. What the people want is to know what amount of capital they really have, and who furnishes it, that they can draw their own conclusions as to the responsibility of the institution.

Perhaps the greatest anxiety that a customer of a private bank has, is that by the death of the banker, or one of the partners, the business might possibly be closed up, and that through the tedious process of the probate court; and experience teaches that no business could be thus summarily closed out without great inconvenience if not loss.

The Legislature of 1875 enacted a law calculated to prevent unincorporated banks using the name "bank" in connection with their business, as will be seen by turning to chapter 85, section 3133 of Howell's Annotated Statutes, but the proviso in said section nearly makes nugatory that which they sought to correct.

Two private banks have suspended during the year, viz.: Reeves, Patterson & Co., of Berrien Springs, who closed their doors February 10, 1890, and J. H. Schmck & Co., of East Tawas, who suspended payment December 11, 1890.

These, with the three so-called private banks which failed last year, make five banks which have suspended payment since the Banking Department was organized two years ago.

In a spirit of fairness, and with a just regard for the rights of the few who desire to transact a strictly private business, and in view of the failures of the past two years, I would suggest that a law be enacted forbidding any person or persons using the name "bank" or "banker" for business purposes of a financial nature, unless they are incorporated under the general banking laws of the State, or of the United States.

The sound, conservative private banker does not need the word bank printed upon his checks or drafts to make them negotiable, and the unsound, questionable, so-called banker who wishes public deposits to enable him to carry on outside speculations is not wanted, as he is a continual menace to the prosperity of the country.

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