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which we think would tutes of this kind of situation. We make no here say that the except general mendation which we have made to the hereafter relative governor perintendent banks partby the condition above shown in this chapter. Attorney Fees The matter of legal expense of liquiconsiderable attention investigating complaints tee. made this department We made special subject on that Our records that account. subject total date our show each bank show the other footings of banks' assets and liabilthat with other tems. the different banks, percentages of legal expense time and values readily made. sheets available for the legislature, required. We deem to forth these detail in this this but simply set forth our and the subject The of legal (this item besides attorneys' fees, court traveling expenses legitimate items disbursement) has unreasonably large in proportion the periods amounts liquidation. cording statement furnished banking department aggregate amount such expense paid between April 1925 1926 280 closed banks. of these banks no legal expense been paid during that period. The legal for 24 others had been than legal period such closed banks in the aggregate amount of legal expense connection with of banks examined date examination Note the following with spect first twelve banks fee sheet: this 1-24-24 1-8-24 6-8-29 6-26-29 1-19-24 6-30-29 16,883.22 14,363.99 4-9-24 5-31-29 5-3-24 5-31-29 1-19-24 6-29-29 2-13-24 7-31-29 10,618.71 10-16-23 5-31-29 5-12-24 9,524.04 9,009.91 the other closed banks between seven eight about $6800 each; between five and thousand each: four five thousand each; tween three and four each; three each; ter and had paid one dollars The first 12 banks with items shown the dates of paid the statement furnished by the banking partment accordfollowing $1,428.78; $2,776.76; of the data given how proportion the total shown the dates expense examinations had been incurred dates after December 1926. There still remains and will remain for ample opportunities for these totals to the legal expense closed banks with closed national far by available of the comptroller that the comparacurrency amounts of legal have been the liquidation banks in the liquidation state banks. been impossible to investigate complaints cases of payments excessive fees and report have served useful thereon could once approved purpose. be may be whether not matter opinion given all the On whole attorneys have probably true larger than would other clients for been paid by them has been state large the system. work and pays salary. the be done cheaper viously this than by out the items general done more efficiently since the claims other clalists free their time upon elected as the The attorney general the officer such officer he stitution. the legal handle supervise the state, its departments. work of Hc should handle, the legal work closed control number of cases handled by the The and fair index the the other done just of handled the supreme the special bankby all for closed banks fair index the of other legal work for closed banks. the Northwestern Reporter Look that 1925 and 1926 and you Dakota cases which had been and his four in time the assistants; decided which been court cases handled the counsel for by special various banking department counsel for closed banks. During same two year period the work the rural credit the legal having balance department such footings 1171 of the whole work done We have above that during 1926 the made cover legal banks reached total of largest amount appropriated available months of the during any above stated. We evidence coordination between borrowings and the deposits of state money other than the facts We do know there do know that state there for of such when some the holding of large trusts appointive officers not anything the kind involved in the matters reported every person the facts well able judge report, however, that the adoption of the election superintendent banks by the people tend eliminate public picion of such being case, bank We have cited the foregoing special they portray They not all the worst cases. are ready submit committee your many other emphasize conditions support tions On lack of funds have been able trace other such sale of assets of the Tea bank, Vienna bank cases, American State bank Burke which have brought our Many these matters the personal controversy rather than being illustrations We deemed advisable apply our funds toward for of than ward prosecution of personal controversies. Bankers' Association Lobby Considerable made by members the 1929 session of the legislature regard activities the lobby conducted by the Bankers' association state South Dakota. secretary the association, Mr. the Thomas of Hoven, president the of the time and other the association there for different lengths time the Varithe association came time time affectinterests being voted upon legislature. principal the was directagainst passage of bills under which different the investigation the banking system were tempted be The tendent deeming duties his required his fidelity to the banking business stead for the benefits and the public, cooperated ably the lobby; its were his office. That the banks cooperates lobby illustrated by of his reports to Senator chairman of the joint committee the the legislature, which paragraph begins by the lobby the South Bankers' association, the introduction of This chapter is not devoted to the association any other for upon legislature. In fact the legislature must depend extent, the public will. upon arguments before through lobbies. far have been able to carry investigation found dishonorable tactics kind by bankers' associathe of banks presenting exerting their legislature. They the pressure their the as any other lobby might This chapter devoted to the proposieffect such strong and efficient and the should an officer naturally inclined give his allegiance bankers instead the whole supportoriginal that every statute the legislature the subject has been statute favor private, the general safe serviceable banking of begins the 1915 that the legislature the first statute relating deposits 102 statute association created official authority nominate the group from whom must select members the depositors' This association official status make powerful factor legislation thereafter. banking legislation original the effect that all important since 1915 been the interests private banking One the first important Chapter 144 the Session laws. This reduced the required for reserve banks cent per cent the required for all other banks from per cent. The low shown preceding chapter Operate." The have been raised The banks make larger banksecurity business for The banks were thus to keep larger percentage their deposits loaned earning the public was lessened. laws 1929 the law was By chapter further amended as the banks invest of in United States the bonds. This enabled the banks realinterest from per cent such lafs of 1929, the law Chapter still further to provide banks shall be required no to hand at time portion the amount deposits belonging the to United or state, county, municpality, district, such by the bank posits by the said bank of banks, whenever appeared from that bank trust violated the was had capital, had refused its possession liquidate such bank or trust company. So require the superintendent banks deposit closed bank money state banks trust companies examination had been found be sound solvent; such deposits to be furthby compensation counsel examiners. require the payment of dividend closed bank whenever the funds hand sufficient, and funds to pay dividend bill failed to pass. The only practical recommendation which make connection with the situation this chapter that should informaherein furnished carefully. opinion that undue prominand solicitude has been given the interests banking private instead from its public service have standpoint, power situation. and lobby accomplish considerable bluffing, and dicting which occur, securing for purposes. independent private political considerations; and remembrance the the general public, distinguished from the of any particular the public, the primary object be obtained. Legislature time cover salaries of the attorpledged assets of the obligations be fully made and the depositors and consist handled, controlled, and his supervised assistants, including the of the United States the said banks fund the railroad of South that be paid full at the earliest Dakota; provided any possible (b) general should be special sistants, bank of date, and may carry employ than expenses, court costs, and United bonds, United this all office Furtmer that the assistants for work, other expense the Uniternor hereby and request- and counsel may office, and the certificates, any to between for the means accomplishing whole total treasury appoint interim essary amount propriated other or obli- this session not the legislature and saving. spent. other words gation of the United States government session 1927, Compensation of such assistants the committee, general four five owned bank and not which and special counsel, other the said shall be farmers, bankers, greater amount thecated reserve and business numbers, necessary expense should be paid work at part of men equal greatly reduced cost. the funds several closed banks The effect this act was to further devise officers the state, and the conclusion is the banking department and present upon basis be computed obvious. The attor- required reserve. ney general port the of the state attorney special of the legislature extra assistants, employed the session Remedies for Slow and Expensive salaries of 1920 was passed permitting thousand dollars year, with banks fee for best manner complete Liquidation an "charge more $8000 the claims against (a) Within days after any bank has for lecting and or special assistants. banks, that taken by the traveling other end the checks, could handled also banks paid to banks, the judge can handle monly cash items"; prothe legal ther will work for closed viding "that report such judges of the banks. the hands of any there may be which the bank checks on bank in that of special the fund heretofore created receiver be abol- single for an guaranty ished that be made for the of such liquidate exceeding and be There made to pervision the court in the manner bank's legal reserve required to kept was no appropriation the legal work of closed banks by the such prescribed by its vaults shall be presented compensation general; the have found Provide of attorney gen- an interim commission. liquidation date payment thereof eral be employ elect record appointment Equid assets such notes, bonds. the said bank may salaries made. This resolution appears rants. within stated period such payment in instead per such public thrown exceeding years collection may time time the guaranty and sale excuse repealing possible, and without refermeans fund law. the assets before expirato such old accomplishing saving; and that the have already referred in carlier tion the two years unless the and 8998 of the Revised such assistants and to the successive the chapter this report shall. good cause extend defining other of the pledgexpense the changes the law to the time. payment of all divibank making for torney general such assets banks in dends liquid assets rapficer an curred such work be paid out of the culminating Chapter Laws the direct. funds knowingly deposits an the several closed banks amount pledges in (c) the liquidation banking institution, Chapter on pro rata basis, the capital equal estate of all closed banks the Laws was with be and computed determined bank and much by the and the by judicial under emergency clause declaring attorney general. banks of force effect Pierre similar Peter Norbeck Notes might permit. date its approval. March school and public lands During last session legis- referendum and the vote This act authorized the Although the credits system, or in actually lature legislative request of banks, with ad- people junction with them. with the policy the of banks about of the direct appeal consent fund holding the estate the least guaranty by former now depositors' fund take charge of unsafe sible outlay and expense until shall any Peter being closed Laws of from bank Chapter acquire market value going There some delay in the accomplished, actual this final dividends out of the court requested and in that fund was strange of guaranty direct operating insolvtime Senator Norbeck in the early some banks lished the enactment, going concerns authorized Bankers' Association Lobby information 1927 Laws of upon subject the deposit banks Chapter We submit for moneys your convenience the Discontinue associasenate, which diverted from guaranty fund or some fund following guaranty legislative official body thereof. The established depositors failed alleged reason time exceed fifteen pay (15) and the fund certificates of indebtedness vestigating matter there the total amount carnest consideration them: tralize its duties the head the the fund, future annual assessments supposed some the (1) Head elected the nation against banks; and provided for the the borrowings of punishment (a) The the bank- (b) bank robbers ments future and deposits of state, the this should from the standpoint public state treasury benefit only for less than the banker closed rural money, not ten interested service public safety as first life creditors each the which he borrowed. years or in the discretion the any banks. consideration, and banking private, bank paying assessment. The The subject first by the (b) of superintendenterprise secondary: discontinued, Chapter 114 Laws of 1923 amended of banks should of the items be abolished by the imbue legislation Section 8980 that obligations any which interested, the prohibi- and instead was included either of substantive procedural the the against loan 20% lic among which our fieldmen of corporfund and the capital surplus of should be instructed investigate. Banking Laws any indi- up for The officer the head of the reason should report new code or banking should vidual' each bank with longer to loans to facts found them charge such enacted repeal depositors to present follows: supervision should be elected are jectionable failed Chapter 117 1923 reduced the people. In James Valley bank of Huron that might thereafter referred this called to made The state securities commission found note by Peter each the report. re-enact such prothe superintendent should be abolished Norbeck bank, and power an the lobby the banks visions of the banks. and published state newspaper duties be transferred this dorsement department payment July slip by and the from the obligation pay bank located, from (2) Reserve three. The guaranty changes herein same done That the minimum reserve be mortgage. In the depositors closed banks, companies by Chapter 214 Laws for banks and between the simply on grounds they to the Governor one-third per cent for and Under the general law, Section never be pay cannot the things 5364 and under but wonder far citizen inbefore referred Section The provision increasing required John superintend. would before the banking laws, get appeared the report attorney date banks, one to legislature and asked act repeal- His general advised the department of Excellency, passage and Ewert, treasurer rural his liability under and Bulow: finance and the ernor credit board, relative obtaining banks mortgage owing one of said banks That conducted exists for and Require publication called posits credit, solely he could office actions and proceed- the bank money the bank asking for therefor. pay By Chapter of funds listed erintendent banks, the governor. posits withdrawals made; promises That there to be other by lat- the to McMaster urging resolution quoted banks centages, showing putting end the state listened to defeatist some upon employ legal the and shown from bank. for the propaganda the lobby repealed these since that the reserve except such other duties fund and this, after According this bank been legal This the people had once rejected such responsibil- statute the regulate going banks for the 1920 for legal laws, levy collect and who about duct Chapter 56 Laws of authorized the penalty time the elected the people placed falls below of legal banks the benefit depositors this bank charge attorney bank such Many afford the superintendthe things might any active of state the length The banks the bank York closed bank the time the question of his removal tendent of banks been bank former- this would bank had serve examination paid early date conveniently may legal department that other its business. this, recommend possible; that officials truly has the those ruining Bank Brookings found and when he may By the legal- be that Peter Norbeck dated April Chapter Laws 1925. the deposthe premises itors' of the process, and disposition against October guaranty fund repealed 1923. for $10,000 before you the upon relieve ruins, bank be listed bank from the bank's records which foregoing report to have than the doubtful ment annual assessment of cured at the time of clos- other material fourth not attempted to find (d) Provide statute making per their ing; and now listed what agent the bankthe payment 360 been proposed the legislative department wilfully violate the This land Grant This killed influence the neglect manner plain duty became $500 paid Huron Dental before being introduced imposed by statute upon and referred the rejected. This bank absence 1915 reference allowing banks Chapter 104 authorizel enactments special DR. credit money state calculated and secure the operate in unsafe condition banks permit closed ulation banks in the interests of Estate suspended (3) Other Real money time public solvent vocal That item other real estate corporation by having According organization work the the out the bank had been bankers' lobby of writing deposit the condition since its various cited its until the such that under which, obviously practice. other real the deposits have been closed 1920. had for the which passed than of its cent dividends the time of our banks per Chapter that repealing the and surplus: examination in We found no failed and shall be real this bank. House Bill introduced ter 100 asset the bank for more than First Trust and bank on the of other estate held the Norbeck and before the of the effect period five the the which ord the should be within four of each, that the the banking gen. the guaranty fund $3,000 each. one note of that Rediscounts and Bills Payable going banks (4) of banks bank one note and one should be from the payment should any The $5,000. notes annual having bill been renewed, merged, paid from (Chapter 1925) which amount excess taken and complete time that the total liability reads follows: report during than time surplus "Whereas, estab- and funds from the guaranty fund months calendar year, This bank carried lished for protection killed pledging assets the senate credit funds; positors the state banks South sensational fight either both amount rural ment unable this time to which superintendent times the funds. fully meet ceeding demands lobby of the South Dakota both items and to upon either "Whereas, expedient. proper helpers, (b) enactment change necessary that fund be flocking wielded their affect and should cent. the should one best most pressure influence made possible form kept shouting assets already found cept of failed banks unison: "Don't alarm the for the depositors public: takes effect renewals In the Sioux Falls Trust Savings be fully passage this will thereafter any, such pledges made. found open banks and more bank Public Funds dated 1923, due of the attorney general left make (a) should criminal sources the failed state with the fense official having paid the estate resolution of the house estate, equities real and public funds under This carried loans that collectible this time, without machinery assistance. permit them be deposited in any owing present conditions; funds. has made without bank which funds; conditions casioning and been closed bank the time money. public has known throughout the work not. 1924. date January reach fully going time. of banks June bank on said Senate 110 and House assets of Bill 213 should be the deposit funds cent dividends This paid the the real estate were the legal work of closed the sound bank held the cost for of and and should be criminal made 1922 nothing said dated banks to offense knowingly permit the time fund, and other paid done deposit them bank in unsafe bank by the bank attorney should also required 20 per that the the employment should funds pro-rata far Its down tinues for the years, under account of the pradetical. among sound banks most be the cent the the The should found different that Both bills of existence. from official the year son holding an with, SPRING substantial loans provided the percentage for position trust agent bank banks collected, the problem certain sections of the Dakota Trust Savings bank, holding any position found liquidation payment depositors follow: Sioux Falls note under which control the becomes easy require condition of the by Peter Norbeck of funds of public will two for this official bonds of the take probably years superintendent tion the will October 22, 1923, time he is holding position dated liquidation deputies and which nothing had been paid bank. 1924, that the and see our floral equi- enforcement the of our No of any public tics in real estate the laws this state relating banks bank carried body, down 16, 1929. town. fully said and banking" state protected increasing the funds; $9,322.53 of on deposit rural be liquidated that the best such and closed time in any one bank than treasurer's So terest guaranty fund of require the the of closing. of of the capital bank money, depositors banks to banks compel trust bank. investigation it had paid the date our Resolved Be by reduce loans Neither the his dividends. unable bondsin the Senate of State South limit cease should liable records this bank and any find the old the House of terms that tained from condition deposit its prior cannot give that Superinthe banks funds bank within the state closing. tendent the State South any bank trust failure bank, whether it has been our aim In this report Dakota, hereby and failing to make good bank has been designated the the small treat the rich poor, their efforts its capital stock for 30 after days positary the exactly same the of the great, for real notice. Legal Work for Closed Banks We therefore submit the and the assets So make clearer All legal work for the banking found this the closed institutions duty of the partment and for closed banks obGovthe supclosed heard general assist based,