The Birmingham age-herald., 1905-01-15

to scheme having for It's object the sale of stock to the public at a fcticious value-in other words to skin the public for the benefit of a little group of shady adventurers. Added interest is given the story by reason of lie fact that the bank which is under fire carries government deposits to the amount of at least s15,- 0t0000. On account thereof the govern ment has been lugged in as a quasi partner to the skin game, on the theory that the government funds were loaned in the carrying out of the deal-govern- ment funds being in the jackpot out of which credits were extended.
 Bankers claim that undue prominence has been given the Munroe &Munroe bankruptcy proceedings. It is not unus- aul for both national, state and private banks to extend extraordinary credits to individuals and firms-credlts which might not be strictly within the legal limitations, but which are nevertheless part and parcel of banking. In illustra- ton of this fact the head of one of the greatest banking houses in the city re- oontly told & story, not In excuse of the Iioomls matter, but as a mention of not uncommon banking practices. "I knew O. case" this authority said 'in which very prominent bank in Chicago once extended credit to a Board of Trade house engaged in the almost sole hand ling of a cereal crop. This firm had ann pie capital for the normal handling of It's business. It was recogized as an hon orable house and hao high standing in the trade. The individual members of the firm were responsible for every dol lar they owed. For two months of every year, however, they were called upon to extend their credit to an extraordinary degree and the bank with which they did business accorded them every possible accommodation. They gave their notes for money required and these obligations were supplemented every day by a return to the bank of everything they had in the way of current assets-warehouse re- ceipts, bills of lading and all the odds and ends that might come along. It was the understanding that each days ac- count was to square itself, but on the morning of the following day a repre- sentative of this firm withdrew from the bank the envelope containing It's collat- eral, thus becoming custodian of the banks only visible security for the loans There had to be a shifting of memo randa which could not he done in the bank and which could only be taken care of by the firm itself and in It's own counting room. Grain received might be shipped or might be put in storage or might be on switch, and new stuff was CD0llHuduy COillilb illlO bi6his AhO P0AAtN could not keep track of these things and 1t had to rely on the firm to see that the goods were properly taken care of and kept going. This might have been in sense violation of the strict meaning of the law, yet 1t was good banking. The banks trust was not betrayed in the slightest degree. Every obligation of the firm was met. The bank made money by reason of its relations with the firm and the firm made money on account of the credit extended to 1t by tho bank. This kind of relationship is found in every bank in the United States in large and amall degree. Occasionally a bank officer may make a mistake in judgment. If things go wrong exposure follows and tho officer involved suffers. The bank may or may not stand by It's officer, but whatever may be the result the prao- tice will exist as long as there are banks and bankers"