6o UNIVERSITY OF COLORADO STUDIES 



appointed largely through pull.' Each examiner makes 150 perfunctory 

 examinations a year. Hence, the contempt for them which is so preva- 

 lent among the bankers. Probably the best way to secure a bank exam- 

 iner or superintendent of banks whose position will not in any way be 

 dependent upon pohtical pull will be to have him appointed by the gov- 

 ernor on the recommendation of the state bankers' association. In this 

 way a capable man will be secured and his efficiency will not be injured 

 by the machinations of the professional politician. 



When a superintendent of banks has been appointed he should have 

 sufficient power to make his influence effective. He should be empow- 

 ered to examine banks at any time and on his own initiative. His 

 examination should be thorough enough to make him famiUar with the 

 class of loans and their security. Unless he becomes reasonably famihar 

 with the loans of the institution, his examination is of little value. The 

 state superintendent of banks should also have the power to close a bank 

 and apply for a receiver when it is conducted in an unsafe, dangerous, or 

 unlawful manner. In some states this officer has the aforesaid power, 

 though it is not general. The federal officers can close a bank only 

 when it is insolvent. When the state examiner can close a bank if it is 

 conducted unlawfully, a force is set in motion that makes for good 

 banking. Knowing the state officer had this power, the banks would be 

 careful in the management of their business. 



Trust Companies 



Whatever system of regulating banks may be instituted by the state, 

 it should be applied equally to the regulation and examination of trust 

 companies. These institutions have grown up among the banks for the 

 purpose of meeting the demand for certain financial operations which 

 it was impossible for the banks to perform. In most states the powers 

 given to them are somewhat vague and generally the charters have been 

 construed to give to these corporations banking powers. As a result 

 these companies are generally engaged in the banking business. In 

 many states these institutions are more favored by the law than are 

 banks. This is the case in Colorado as has been pointed out. No 



' Bankers' Magazine, New York, Vol. LXXII, p. 57, 1906. 



