The Detroit times., 1910-08-26
''CH0O[MATEs, SNOW
IN BITTER FEUD
\ As BANKERS
6tor,1of Years Is Continued in Law
Suitin )Ionia Which Involves the
Standing Of Certified Check
/ of One.
incidentally There Is Discovered
Some Laxity on the Part of State
Bank Examiner.
tFrom a STAR Correspondent .

(From a staff corrsspondent).
IONA, Mich, Aug. 25-When Ia a
ceruned check not a certified check
HOW many lospholes can you find In
the state banking law and its admin.
istration?
These are questions soon to be
tnreshed out In the circuit court In
Ionia.
Under the undressing title of
Preston vs. The National Bank OF
Ionia there lies the outcropping of
feud between the banking interests
OF the Reformatory City that goes
pack into the years, has colored ev-
cry political contest In the city
and has lined up the business men
OF the town into factions siding with
the different banks
Behind the bank feud there Is a
personal one, too, that goes back
to barefoot days in the little red
school-house.
Incidentally there Is raised the
question as to how closely the state
banking department keeps track OF
the affairs OF the banking institutions
In the smaller cities OF the state.
AS the case of Preston VS. The
National Bank OF Ionia now stands,
the plaintiff has secured an injunc-
ton restraining the National Bank
| OF Ionia from turning over money
to the other defendant the National
Bank OF Traverse City. the sum Of
$2'7s7 collected upon a check issued
by the plaintiff
oh a..
one.
So far as is known II is unique in
banking.
II purports to be certified. In fact.
II says that II is, with the important
provision that the conditions of a
| certain letter of the maker, T. B.
Preston. should be fulfilled. The GER
LITIGATION, so alleged. Is signed by
A. j. Hemingway, the assistant
cashier of the State Bank OF Ionia.
Mr. Preston. the maker of the check.
Is president OF that institution and
one OF the leading high financiers of
Michigan, being largely interested in
western timber lands, besides manu-
featuring lines nearer home.
The question that the state banking
commission seems 10 have slid over
is the nature or the liability created
by check OF the sort described. Is
II certified check in the accepted
definition. or is il merely blum at
Fertilization that Is good enough to
get by the bank TO which IL was pre-
scented, but not good enough to hold
the Ionia bank liable IL 1t happened
TO be sued upon 1t.
This particular check does not ap-
pear on the sworn statements OF the
bank as liability under the heading
of certified checks, as called for in
the reports TO the state banking COM
missioner.
Mr.. Preston says that il is not re-
hurried by law that certified checks,
Especially "contingently' certified
checks, such as the one under con-
federation, should appear separately
In the bank report, and further that
it had never been the custom OF the
state bank of lonia to do so.
The bank commissioner says, how
ever. that II is most certainly re-
hurried of all banks and that II de-
feated the purpose OF public state
ments OF banking institutions II they
did not so appear.
Mr.. Preston admitted that it was
the general practice to report such
checks publicly and that 1t was prob
ably bad banking not to list them,
and. further, that in view of the stir
that is now being created about this
particular check. the State bank would
probably list them in the future.
One thing seems TO be pretty we'll
nsta blished. The checks. whatever
khey-were,- and however deal in
which they were given out, became
liabilities of the State Bank OF Ionia
N soon as the cashier put his sig
nature to them. If that was the case.
vhy did they not so appear in the re-
norris TO the state banking commits
Homer? That official says that ii Is
reouired. The State bank says that
Il IA not required and did not do II.
In other words, is the state banking
NV administered by the commissioner
4 the interests OF the depositors. or
Z II administered as the individual
anks see At TO suit the convenience
the principal stakeholder?
From unprecedented standpoint
hs seems a pretty important ques-
Ion for the public to investigate.
There is no suggestion in any
iuarter that the State Bank of Ionia
in any way embarrassed Mr.. Pres
ION has ample funds on deposit and
hmple collateral in addition to meet
hny demand that may come out of
The case. II Is not a question Of sol
Eency, as the bank ia perfectly sound.
II Is a question OF enforcement of
The banking laws.
II is much better to discover such
methods and properly punish them be-
lore the depositors have lost money
han il is TO .deplore them after the
Ease has been aired in the bankruptcy
bourts.
Lax bank inspection should not be
overlooked merely because a failure
. not involved. FINANCE.
JAILED ON THEFT CHARGE.