EXTENSIONS OF CORPORATE EXISTENCE. Acting under the provisions of Act 143 of the Public Acts of 1899, The People's Bank, of Leslie, by its stockholders, voted to extend its corporate existence for the period of thirty years from and after December 31, 1906. OTHER AMENDMENTS TO ARTICLES OF INCORPORATION. By a vote of its stockholders, March 6, 1906, the Michigan State Bank, of Eaton Rapids, voted to amend its articles of incorporation so as to provide for the transaction of a savings bank business. On May 10, 1906, the stockholders of the Niles City Bank, Niles, voted to amend the articles of incorporation of said bank in order to permit of the transaction of a savings bank business. GROWTH OF STATE BANKS. Since the organization of this department, 1889, the increase and growth of business has been very great. Loans show an increase of $159,513,584.12, and deposits, $172,844,539.30, as will be seen from the following statement: The following table will show number of commercial depositors and savings depositors in the 301 State banks and 88 National banks, together with amount of deposit and average amount to each depositor: *This includes certificates of deposits; several certificates issued to one person counted as one. NUMBER OF DEPOSITORS. The total number of depositors in the 301 State banks and 88 National banks on December 1, 1906, was 748,189, as follows: State banks, individual deposits subject to check.... State banks, savings certificates of deposit.. National banks, individual deposits subject to check. RESERVE CITIES. 93,822 36,175 380,254 73,675 101,837 62.426 In accordance with the provisions of sections 24 and 27 of the banking law, I have designated for the year 1907 the following as reserve cities, viz.: Detroit, Grand Rapids, Bay City, Saginaw, Kalamazoo, Jackson, Port Huron, Adrian, Benton Harbor, Muskegon, Ann Arbor, Houghton, Marquette, New York, Boston, Philadelphia, Baltimore, Buffalo, Cleveland, Cincinnati, St. Louis, Chicago and Milwaukee. REPORTS OF RECEIVERS. The following reports from the receivers of the several insolvent banks in Michigan were received during December, 1906: City Savings Bank, Detroit. Union Trust Company, Detroit, receiver, under date of December 1, 1906, reports as follows: Liability to depositors at date of suspension, Feb. 10, 1902. .$3,378.121 20 Other liabilities Total Total assets at date of, and received since suspension... Disposition of collections: 662,937 50 $4,041,058 70 416,667 29 2.464,947 48 Clarence Tinker, receiver, under date of December 1, 1906, reports as Liability to depositors at date of suspension, June 14, 1897. $88,703 19 14,141 30 Total Total assets at date of, and received since suspension.. $102,844 49 141,757 18 72,775 19 $16,960 65 42,293 62 1,619 42 6,000 00 5,401 50 500 00 72.775 19 People's Savings Bank, Mt. Pleasant. Charles T. Russell, receiver, under date of December 1, 1906, reports as follows: Liability to depositors at date of suspension, Aug. 20, 1897. Total Total assets at date of, and received since suspension. $65,491 80 16,896 90 $82,388 70 236,876 78 123,520 43 $80,522 70 30.043 02 1,772 69 8,216 15 2,965 87 123,520 43 State Bank of White Pigeon. J. Murray Benjamin, receiver, under date of December 1, 1906, reports as follows: Liability to depositors at date of suspension, July 30, 1904. $127,545 34 Other liabilities 1,168 09 Total $128,713 43 Total assets at date of, and received since suspension.. 173,621 86 The fees collected by this department for the examination of banks, according to the provisions of section 40 of the General Banking Law, amounted to $24,277.12. And there has been turned over to the Secretary of State for franchise fees on capital stock of new banks and from banks increasing their capital, $778.00. This amount, together with $24,252.12, examination fees, makes a total of $25,055.12, received from banks during the year. The expenses of the department for the year were as follows: Salary of Geo. W. Moore, Commissioner.... $2,500 00 Salary of Wm. Donovan, Deputy Commissioner. 2.000 00 Salary of Harmon Wendell, examiner (resigned June 19, 1906) 798 64 Salary of Charles M. Turner, examiner... 1,700 00 Salary of H. E. Johnson, examiner. 1,700 00 Salary of Frank W. Blair, examiner (resigned March 1, 1906) 425 00 1,700 00 Salary of James I. Van Keuren (appointed January 1, 1906).. 1,700 00 1,275 00 850.00 73 91 1,500 00 565 01 Salary of extra clerks ... 1,174 78 Expenses incurred in examination of banks... 7,072 14 Miscellaneous expenses, viz., printing, stationery, postage, etc. 3,556 39 Total $28,590 87 The foregoing shows that the department actually cost the State $3,535.75. OPINION OF ATTORNEY GENERAL. On account of the importance of the subject of excessive loans I deem it advisable to again publish the construction of section 52 of the banking law in this regard as submitted to this department by the Attorney Lansing, Mich., May 23, 1903. Hon. George W. Moore, Commissioner of Banking, Lansing, Michigan: Dear Sir-I am in receipt of your communication of the 19th inst. referring to the General Banking Law of this State, and requesting my opinion upon the following questions: "First, How much money may the directors of a bank loan to any person, or company, or corporation, or firm, by a two-thirds vote of its board of directors? "Second, How much money may any bank loan on any one line of commercial paper? "Third, May a bank increase the first named line by the bond or personal endorsement of the officers or directors of a firm, company or corporation, or by the assignment of value as collateral?" In considering these questions I desire to call your attention to section 6141 of the Compiled Laws, being section 52 of the General Banking Law of this State, which provides in part as follows: "The total liabilities to any bank of any person or of any company, corporation or firm for moneys advanced, including in the liabilities of the company or firm the liability of the several members thereof, except special partners, shall at no time exceed one-tenth part of the amount of the capital and surplus of such bank; but the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed: Provided, however, That the foregoing limitations shall not apply to loans on real estate or other collateral securities authorized by this act. Provided, however, That by a two-thirds vote of the directors the liabilities of any bank of any person, or company, or corporation, or firm may be increased to a sum not exceeding one-fifth of the capital and surplus of the bank." It is evident that this limitation was borrowed from the National Banking Law, section 5200 of the Revised Statutes of the United States, providing as follows: "The total liabilities to any association, or any person, or of any company, corporation, or firm for money borrowed, including in the liabilities of the company or firm, the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in; but the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial or business paper actually owned by the person negotiating the same, shall not be considered as money borrowed." This provision, as found in our General Banking Law and also in the National Banking Law, has never been construed by the courts in so far as it relates to the particular question submitted by you. The Supreme Court of Pennsylvania, in the case of O'Hare v. Second National Bank of Titusville, 77 Pa. St. 102, referring to this provision in its application to National banks, makes use of the following language: "Evidently the limitation of the indebtedness to the one-tenth in the 29th section, was intended as a general rule for conducting the business of the bank; a rule laid down from experience to regulate its loans for its own best interest and those of stockholders and creditors, not a rule |