Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1907-01-01
MAKING BANKS SAFE.

Chicago Tribune-The revision of
the state bankire laws is one of the
subjects that will be pressed upon the
attention OF the next general assem-
Lay. Recent scandalouS and disaS-
trous bank failures have made it the
imperative duty of the legislature to
give the people greater degree Of
protection against a loose or dishonest
banking methods than is given them
by existing laws
bill which Cook county member
is TO introduce contains some excellent
and needful provisions. One of them
Is that no officer or director of a
bank shall borrow from 1t either d.
rectly OF. indirectly. A firm or cor
poration in which any one of them is
interested must go elsewhere for ac-
commodation.
Several weeks ago the Tribune
quoted and agreed with the opinion Of
an experienced banker that there
would be few bank defalcations if Of
ficers and directors were forbidden to
play the antagonistic parts of borrow
er and lender. If SLensland had had
to o to some bank beside his own for
loans it is doubtful whether he would
have become entangled in the losing
ventures which wrecked him and his
bank.
Another provision is that state bank
examiners shall be required to anthem
ticate all securities and papers held
by bank as collateral for loans. If
that had been done in the case of the
Milwaukee Avenue bank Stensland
and Herring would not have dared to
palm Off dummy Or forged notes on the
examiner. Detection would have been
immediate Some bankers have said
that the examination of bank never
would be finished if the genuineness
of every bit Of col,teral were to be
verified. The proposition is a novel
one, and therefore seemed to them
impracticable. Other persons. more
ready to accept new ideas, have con
coded the feasibility of the project
and said that it was certainly worth
a trial
Another provision is that bank ex-
aminers shall be expert accountants,
with a special knowledge of banking
matters, and that they shall owe their
places to their ability to rank high in
civil service examinations, instead Of
ability to command political backing
There ought to be sufficient number
of examiners to do the work thorough
petent, hard working men are worth
in the open market. Otherwise it will
be almost impossibel to get such men.
1t is said that the bill may forbid
the use Of the word bank" unless the
person, firm, or corporation desiring
to use it shall comply with the laws
regulating state banks The word
bank" certainly should be guarded
against misuse. At present any ire
sponsible individual can lay hands on
it and use it to deceive the public
There was no law-though there
ought to have been one-to prevent
the man Atkinson from opening the
doors of the Lincoln bank" and invit-
ing deposftors to intrust him with
money for which they are now hunt
ing in vain.
The question of giving better pro-
lection to depositors and stockhold-
ers of state banks and of providing
for the supervision of private banks
should be taken up early in the SEES
sion, and be. disposed Of before ad-
journment. 1t is of much greater i'm
portance to the people than some
other questions that of direct primar-
les, for nstance-in whose discussions
the general assembly is likely to spend
considerable time.