to liquidate said bank through The Dime Savings Bank, Detroit. This liquidation did not take effect until early in the year 1905. The Central Bank, Kalamazoo, by a vote of its stockholders on March 14, 1905, decided to go into liquidation following the provisions of section 53 of the law. This liquidation is being effected by the Kalamazoo Trust Company, Kalamazoo. OTHER AMENDMENTS TO ARTICLES OF INCORPORATION. On the 16th day of August, 1905, the stockholders of the State Bank of Sanilac Centre, voted to amend the original articles of said bank, changing the title to "The State Bank of Sandusky," This was necessitated by the legislature changing the name of the village of Sanilac Centre to the village of Sandusky. The Farmers' & Merchants' State Bank, Lakeview by a vote of its stockholders on May 13, 1905, amended the original articles of incorporation so as to provide for 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 $135,973,465.90, and deposits $149,515,096.07, as will be seen from the following statement: The total number of depositors in the 277 State banks and 88 National banks on December 1, 1905, was 665,140, as follows: State banks, individual deposits subject to check. State banks, savings certificates of deposit.. National banks, individual deposits subject to check. 81,569 32,390 337,209 63,519 95,289 The following table will show number of commercial depositors and savings depositors in the 277 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. RESERVE CITIES. In accordance with the provisions of sections 24 and 27 of the banking law, I have designated for the year 1906 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. One receivership has been closed up during 1905, that of the People's Savings Bank, Lansing. The following reports from the receivers of the several insolvent banks in Michigan were received during December, 1905: City Savings Bank, Detroit. Union Trust Company, Detroit, receiver, under date of December 1, 1905, reports as follows: Liability to depositors at date of suspension, February 10, 1902.$3,378,121 20 Other liabilities.. 662,937 50 Total..... $4,041,058 70 Total assets at date of, and received since suspension.. 4,394,494 35 2,355,121 26 State Bank of Fenton, Fenton. Clarence Tinker, receiver, under date of December 1, 1905, reports as follows: Liability to depositors at date of suspension, June 14, 1897.... Total..... Total assets at date of, and received since suspension. Amount collected by receiver to date... $88,703 19 14,141 30 $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, 1905, reports as follows: Liability to depositors at date of suspension, August 20, 1897.. Total.... Total assets at date of, and received since suspension.. Amount collected by receiver to date... $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, 1905, reports as follows: Liability to depositors at date of suspension, July 30, 1904.... $126,366 89 Other liabilities.. Total.... Total assets at date of, and received since suspension... 1,178 45 $127,545 34 168,770 73 RECEIPTS AND EXPENSES OF THE DEPARTMENT. 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 $21,272.51. 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 $660.75. This amount, together with $21,272.51, examination fees, makes a total of $21,933.26, 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. Salary of W. T. Bradford, examiner (resigned February 1, 1905). 2,000 00 146 40 1,700 00 Salary of E. E. Ford, examiner (resigned March 9, 1905) 321 10 1,700 00 Salary of H. E. Johnson, examiner (appointed January 11, 1905) 1,652 77 1,553 60 Salary of E. R. Morton, examiner (appointed March 15, 1905) . . 1,350 57 1,500 00 Salary of special examiners. 579 75 Salary of extra clerks... 1,145 57 Expenses incurred in examination of banks.. 6,508 16 Miscellaneous expenses, viz., printing, stationery, postage, etc. 1,910 69 Total.... $24,568 61 The foregoing shows that the Department actually cost the State $2,635.35. 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 General in the year 1903: 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 "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 liabil ities 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 vs. 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 to regulate its customers. It was, as remarked in Fowler v. Scully, a regulation to prevent these associations from splitting on the rock which has ruined so many banks, to wit, that of lending too much of their capital to one person or firm. The intention being to protect the association and its stockholders and creditors from unwise banking, we cannot suppose it was meant to injure them by forbidding recovery of the injudicious loans." In Vol. 29 of the Amer. & Eng. Ency. of Law, 2nd ed. p. 382, we find the following with respect to the limitation found in the National banking law: "The object of this provision of the statute was to guard National banks from the hazard of speculative loans, but it contemplated and permitted to an unlimited amount the discount of paper used and required in facilitating |