The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1903-06-12
SHOULD AVOID PITFALLS.
Horton AIbaugh, Kansas Bank Come
missioner, Gives Salutary Advice
To Bankers at Topeka.

Topeka, Kan, June Cone of the
features of the convention of the
Kansas Bankers association was the
paper read by Bank Commissioner
Morton Albaugh on the subject of
1.-THE Imprudent Banker" His
| speech was in reality a lot of advice
to the bankers in regard to the best
| methods of avoiding ehe pitfalls
which confront the beginner and in
experienced men in the business. Hia
| address also dealt largely with the
present prosperous condition of Kan
| sas banks. He said in part:
There is no man so situated as to
be of as great help to his community
as the banker. If he is Elan of en-
| terprise, judgment and conservatism
| he viii know a good thing when it
comes along and not hesitate to as
sist and encourage the young man Of
good habits, intelligence and indus
try, and, particularly, the one who
desires to branch out and extend the
limitations of the business in which
! he is engaged. The judicieus banker
will do these things. The injudi-
cious one will loan a man the entire
amount of money he puts in a bunch
of cattle without first ascertaining
whether he has any feed on hand, or
whether there are any reasons for
supposing that he knows0 anything of
cattle raising or cattle feeding.
"The injudicious banker will pick
camille business in q neighboEing
town, and loan him the money to
start up anew, simply because the
fellow can put up good talk of his
| own capabilities. He will get so
anxious to have an ice factory in his
town, in order TO show up a new en-
ter9rise, that he will lend a stranger
the money for the purpose, regard
less of his want of experience or the
| distance it may be to water. The
/ injudicious banker veill fail to dis
criminate properly between az note
/ behind which the collateral is the en-
| tire issue of bones on Podunk town.
| ship representing one per cent. of the
| valuation, and another note secured
/ by bonds on patent medicine enter.
! prise, the product of which is to be
! introduced in toe future, simply be.
| cause.-the two sets of bonds are print
! ed in the same type and on the same
/ kind 81 paper. The banler veho puts
! up his money against the ether fell
| lows experience, who loans all that
| is to go int new enterprise, the
| banker to get the interest as his
! share of the returns, in case the en-
! terprise succeeds, and the other feG.
/ low to get the remainder of the
! profits, will barely be accused of De-
! ing judicious, for if a loss comes, or
| the enterprise fails, the bank suffers,
| for the other fellow has nothing Out
his experience, and any other bank
will probably refuse to take that as
! collateral.
statistics show that more banks
have come to grief through over-loans
to officers and directors than from
any other cause. Oft times it re-
| quires determination, diplomacy and
| courage for the managing officer, par
ticuYarly in country bank, to meet
situation of this character, but with
| the experience of others continually
before him, the judicious banker will
meet it bravely. He will not become
a party to it, as SO many have done,
upon the theory if others were utii-
izing the banks funds for o4tside en-
terprises he might as well enjoy the
came privilege. Unsecured loans to
relatives, pets and good fellows are
in the same category, but are so sure
to result in loss that the banker who
permits them may well be accused
of dishonesty rather than injudi-
| ciousness. He is using the banks
money to do that which, if he 6ees
at all, he should do out of his own
fundsS O.
Kansas has had seven years of uns
exampled prosperity. 1t would have
been enough to have taken even the
most conservative business men of
their feet had it not been preceded by
four or five years of unprecedented
depression. The determination with
whiche the strong men of the state,
financially, have stoodOut against the
tendency to speculate d4ring the past
few years has been most commend
able. They would have had a boora
of full guown proportions on the
states hands now had they pursued
a different course, but each succeed
ing month they have kept up &heocry
that the brakes must be kept on,
that prices aust not be enhanced be-
yond reasonable limits and that real
estate is only worth that upon which
| j. will bring reasonable returns. But
the crisis has not yet been passed.
The tendency is still on. The temp
tation to speculate may be even
greater still, and it is to the men
who have the peculiar interest in the
states Welfare that the bankers have
that we must look to ward off the
blow that another exploded boom
would bring"