The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-05-22

as it were, to meet with you and con-
that have been for a long time contro-
verified questions even in your own
househ old since the beginning of bank
ing in this country, shows an honesty
of purpose and generosity of spirit
that merit and will receive the appre-
citation and approval of thinking men
everywhere, and augurs well for the
future of banking in this state.
1.-THE subject assigned to me on the
| programme is Alabama Banks and
Their Branches but the subject as l
wish to consider it is State Banks and
Their Branches and not simply as
applied to those banks chartered and
doing business under the laws of this
state, and I am sure that this body
of broad minded bankers and business
men will pardon me the DEPRESSION it,
for this reason 1 seemingly depart
from my subject and give first a brief
resume of the early history of state
banking in other portions of this coun-
try This to my mind seems absolute
ly necessary If we would clearly and
thoroughly understand state banks as
they exist today in the state of Ala
bama.
1T will hardly be denied that some
sort of safe and sound system Of
banking Is as essentis, to. the health
and growth of commerce and the COM
mercfal activities of community or
country as are the heart and the
arterial system of the body to the life
and health of the man. Through the
channels of the banking system flows,
and of necessity must flow and circu-
| late, the vitalizing current that sus-
/ tains the brain of the business world
| gives strength and power to the arm
of labor and maintains the integrity OF
| the state and the nation; and withou;
which all business would soon stag
nate, the wheels of commerce would
soon cease to revolve and the indus
tries of the country would soon dwarf
and die.
Idea About National Banks
"At this time there is an idea preva-
| lent that there is sort of govern
ment guaranty behind national banks,
which state banks do not have and can
not give. Whence this fiction Is uncer-
| tain, but that it does exist and that
1T is fiction we all know. The ma
tional government, however, does un-
dertake to hold national bankers to
conservative rules of banking, but
nothing more, and states can and ought
to do the same for state banks.
| Proper statute laws are very i'm
portant, but statute law canot supply
a lack of capacity in the part of those
| to whom is entrusted the control and
management of a bank. The personal
equation cannot be entirely eliminated
| There are a few fixed rules Of bank
ing which have been so thoroughly test
ed by experience that they may well be
enacted into law, but as a general prop
osition it may be safely laid down that
no bank Is safer than the men who
have 1t In charge. Greater prof1ts or
greater losses usually result from
greater risks, but the depositors and
| creditors of the bank who do not share
in the profits ought not to be forced
to share In losses and the burden of
risk. and yet this must necessarily
follow as banks are now constituted
and as the law now stands. To the
| end however, that the public may know
whether those in charge of the affairs
| of the bank are assuming unusual
risks, or have lost as result of those
unusual risks, the lawmaking bodies of
| the country have established a system
of examination and publicity for the
benefit of the depositors and those do
| ing business with the banks. 1t is true
as has been said many times before
| that no system of examinations can
be made sufficiently thorough or suf
| ficiently accurate to determine wheth er
those In charge of any specific bank
are demanding and receiving sufficient
security for the loans they may make
and it is unfortunately on this very
rock-that of insufficient security
that so many otherwise good banks are
stranded. but the fact still remains
that safe banking laws can be enacted
| by state legislatures just as well and
just as easily as by the Congress of
the United States.
| THE present banking system of the
] country and the legal limitations with