Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1905-05-04
Causes Given For Six Failures
Of the State and Savings
Banks In Two Years
cox EXPLAIN
WILLARD
Three of the Failures Duo to Defalca-
tions, One to Private Hazardous In
vestment, and Two Were Duo to
overloans to individuals or Corpora
ations-Beef Trust Not to Blame.
Special to Tlmes-Republlcan.

Special to Times Republican,.
Des Moines, May 4. - In discussing
the condition of Iowa banks which has
been the subject Of an attack in Every
body's Magazine. Willard Cox. chief
clerk In the banking department In
the office of the state auditor said to-
day: Controller of the Currency
Ridgley says that no national bank
whose officers strictly obeyed the
national bank laws ever failed, not
one, and want to add that the same
may be applied to state and savings
banks, together with the fact that 1t
may be truthfully said that not one
which has kept within the legal limit
of the amount Of loans to any one corr
poration. company, firm or individual
according to section 1870 of the code
has ever failed.
"Of course, in this case 1 would ex-
cept defalcations, cause OF failure
which would be included In Ridgeley's
statement. In a study of the causes
of bank failures during the years 1908
and 1905 find that out of six failures
Of state and savings banks three were
defalcations. one private investments
that didn't materialize, and two were
too heavy loans to individuals or COM
panies in which the officers OF the
bank were very closely Interested.
Therefore in Iowa at least for two
years the cause Of a majority of the
failures of incorporated banks was be-
cause some one connected with the
management Of the bank was dishon-
est. This is fact to be deplored be-
cause it affects to some extent the
credit of every bank in the state OF
Iowa, because the public does not think
of the hundreds of honest bankers
when the subject is brought before It's
mind. for the mind hungers after the
sensational.
TT does seem to be little sensa-
tional when out OF four failures In 1908
(the total number Of failures OF state
and savings banks) three should be
on account of defaulting officials. but
after years thorough examination
and reconciliation Of accounts only
three dishonest bankers We're found IN
a total of $50 or about one-half OF one
per cent or one banker In every ZIG.
"This is more than there should
be were this to occur every year. but
/ am pleased to note the fact that two
Of the defalcations that I have men
toned dated prior to 1904, one to 1908
and the other to the Phillips corn deal.
The ratio of one to 216 can only be
taken because their discovery was in
1904 But one defaulted In 1903 ana
should have been discovered and cred
tied to that year, and one defaulted in
1901 and should have been discovered
and credited to that year. This leaves
only one defalcation of a state bank,
which should be credited to 1904 or
one-sixth of one per cent of the bank
ers was dishonest.
1.-THE article in Everybody's lays the
blame for all the thirty six failures In
the past two years to the beef trust.
along with the suicides of bankers.
One banker committed suicide when
his bank was in good condition. And
any number Of the other banks failed
for clearly assigned reasons. The beef
trust may be to blame for many things
but the defalcations were surely not
due to It,"