Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-04-06
BANK STOCK REFORM
The Authorized and Working
Capital Stock Should Be
Practically the Same
AUDITOR cARRoLL's VIEW
AUDITOR
In, Other Words, He Does Not Believe
That Banks Should Be Permitted to
Organize Under Flexible Charter
So They May lncrease or Decrease
Working Capital at Will.
special to Times-Republican.

Special to Times Republican.
Des Moines, April Ga small reform.
but one which Is in the right direction.
is being worked out by state officials in
the matter of the capital stock of banks.
The state and savings banks have been
organized under articles similar to 9th
| er Incorporation articles with quite FREE
Qusntly an authorized capital stock far
above the actual working capital stock.
When organization has been effected
this way 1t is because the bank direc-
tors believe that the time may come
when they shall desire to increase the
capital stock, and If the articles admit
Of It this increase cnn be effected
quickly. But State Auditor Carroll is
disposed to take the view that the au-
thorized and working capital stock of
banks should be the same or practically
the same. or in other words, that banks
should not be permitted to organize
under q flexible charter so that they
may increase or decrease the working
capital at will. Tive banks are on a
different basis from other corporations.
The state auditor, thru his banking de-
partment, is required to Keep very close
tab on banks. They are subject to ex-
|aminations at any time. They are re-
Quired to have certain reserves, ETC.,
proportionate to the working capital.
LIT ;is the duty of the auditor to know
|abOut these things and see to 1t that the
law is not violated or ignored. But II a
bank may Increase or decrease its capi-
tai stock at will and without giving the
state auditor any, notice then he can
not very we'll be responsible If the law
lis violated under this arrangement. And
80 Ii is that the state auditor is insist
ing that the working capital of banks,
state and savings. shall be substantial
lS1aaangss tferei If rpfqA Id II there is to be
regular way. AS a result OF this policy
a state bank the other day hied with
the secretary of state an amendment
to its articles decreasing the capital
stock from $4,000 to $4,000. While
this was the purposa of the amend
ment the fact is that the bank at the
same time increased its working capt.
tai from $25, 900 to $4,000, thus making
the authorized and working capitai the
same. The policy of insisting on this
will be followed in the future, and In
the end 1t will put the banking busi-
ness. so far as the reports to the state
officials and the records are concerned,
in much better shape. 1t IS one of many
small but important reforms being ef-
fected in state affairs.
/ The problem in regard to the cost of
the law for inebriates, which confronts
the county officials In this county and
threatens the county treasury, is one
which must sooner or later reach every
county of the state in some form. Those
who are making some study of the mat
ter here believe that 1t threatens the
entire inebriacy law and may get II
before the courts in a way to compel
reconsideration of the constitutionallty
of the law The test suit brought here
which after long litigation was decided
in favor of the law has not been car
ried to the supreme court. as had been
planned, because the decision OF the
district court appears to be conclusive.
But the financial side of the law and its
Hoperation is quite a different thing. The
law places inebriacy cases on an exact
footing with insanity matters so FAR as
the payment Of costs and expenses are
concerned. The county stands the ex-
pense of the trial and commitment and
of sending both insane and inebriates
to the hospital. These expenses are
paid out of the insane fund. At the
state hospitals a charge of from $12 to
$l5 a month is made against the state
for support of the patients. This Is
certified UP to the state auditor quar-
terly. The state auditor places the
charge against the county and 1t is be-
tween the state and the county for
collection. The county may compel the
patient or his estate to refund the
amounts expended for support. but not
for the trial and commitment. AS for
the hospital superintendents and the
state board of control they are both re-
lieved of all responsibility for collection
of the casts of support. The state audi
tor certifies the bills and the counties
must liquidate. The 'hslls go 10 the
state auditor from the hospitals with
out any distinction as to whether the
inmates are insane or inebrlates. as IL
lis not required IIldl lIiCS sAaAi ~
treated separately. Now what Is be-
ing attempted in Polk county Is to
make a distinction between the two
classes and to repudiate the RESPONSE
|hility for support of one class by refus-
ling to pay the bills. County offic1ais
openly avow that this is taken with
view to testing the financ'a! nart of the
law and if possible to relieve the coun-
ty of the cost of the inebriacy colony.
If the county will not pay the bitls ana
can not be made to pay them then tie
whole law goes to the ground. 1t is
new form of testing the right of repu-
diation.
The state of Iowa is up against
little matter of competition with the
individual employers of labor at some
of the state institutions. Because of
the great enlargement of the state
farms since the last legislative session
and the increase of industrial work of
all kinds it has become necessary to
employ a larger number of skilled per-
sons for farm and shop work. But the
appropriations made by the legislature
contemplated about the same expendi-