Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-04-10
BANK Will PRESS SUI
Decision in Supreme Court to be
Followed BY Effort to Col
lect Monies
coph,Nf. RANK RESpONSIBLE
CORNING BANK RESPONSIBLE
Courts Ruling That Directors of Failed
institution Must Be Held RESPONSE
BILE for Forged Paper Sold to Another
Bank Results in More Suits-More
Nomination Papers Filed.
Special to Times-Republican.

Des Moines, April 10-The Iowa
National Bank will at once press to a
conclusion its suit against the directors
of the Corning Savings Bank for ne
slecr of their duty in not making prop
or examinations of the banks accounts.
They will seek to show that had the
directors obeyed the law as to their du-
ties of inspecting and auditing the
banks books the forgeries of the pres
ident. La. Rue, would not have taken
place.
against the directors OF the bank that
caused SO much interest and brought
so many attorneys into the case that
was decided by the supreme court tins
: week. 1t is doubtful IL the decision Oh
5 the courts in the case of taxing state
and savings banks on their capital IN
vested in government bonds is as i'm
portant as this suit decided by the SUI
preme court for contrary decision
would have prevented the state say
ings banks from buying and selling
commercial paper which is one OF thel:
sources of considerable income.
| The Corning bank bought school
/ bonds, city bonds and various kinds OF
| commercial paper and loaned money on
I notes. Some Of these 1t sold to the
/ Iowa National Bank Of Des Moines,
4 which was it's correspondent here. II
turns out that a considerable amount
4 that was sold to the Iowa National
was forged paper by President La Rue.
| The question was whether or not the
Corning bank was to be held respon-
sible for the payment of the paper
In all such transactions as the sale
! of notes by one bank to another the
/ bank selling guarantees the payment
] of the notes. After the Corning bank
went defunct suit was instituted to
7! force it to make good these notes. The
1 bank resisted on the claim that the
| state law provides that savings banks
cannot contract liabilities except to
| their depositors On the other side 1t
was contended by the Iowa National
| that the same chapter of the code pro-
vides that savings banks can buy and
sell commercial paper and by making
that provision the legislature made 1t
necessary for the savings banks to con-
tract other liabilities. The supreme
court took this view of the matter.
The decision of the supreme court
clears the way for action against the
directors of the bank and it also clears
+ the banking atmosphere as to the buy
ing and selling of commercial paper.
Large city banks are accustomed to
Investing large amounts of their sur
plus in notes and evidences of indebt-
edness issued by small corporations
such as school. township and villages.
They buy such paper on the guarantee
of the small bank thru which it is pur-
chased. Had the decision of the court
been otherwise they would have been
forced to stop buying such paper from
savings banks for the reason that they
could not afford to Investigate the
value Of the notes and paper before
the purchase. Savings banks conse-
quently would have been cut off from
lucrative source OF revenue.
Fl. c. Schroeder Of Schleswig, Iowa,
democrat, has filed his papers to be
placed on the primary ballot for rep
resentative from Crawford county, and
w. T. Wolcott, democrat. has filed
his papers to be placed on the primary
ballot for representative from Monroe
county.
Republican candidates for represen-
tative who have filed nomination pa
pers with Secretary Of State Hayward
are: D. F. Kulp OF Palo Alto county:
P. NJ Jewell OF Winneshiek county;
E. NJ. Rabcock OF Jones county; r. F..
Mitchell of Mahaska county; j. w.