Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1913-12-09

Tor one Of his own investment. but his
liability does not stop until he has lost
twice his Investment.
II people generally understood this
fundamental in the banking business
there would be far fewer banks OPP
Grated by trustees upon the capital OF
widows and minors AZ was the case At
Colfax.
This experience also illustrates the
| necessity for reform In our banking
laws which shall require the stock
holders Of every bank to qualify for
their double liability. That is, the reg
ular examination Of banks should not
only inquire as to whether the capital
| invested Is intact, out whether the
or double liability 20 the extent OF
| their holdings Of bank stock is also
! sound and adequate. II we are to rely
upon stockholders double liability as
one Of the guarantees to deposNorS,
| and it Is supposed to equal in extent
the capital Of the bank, we should
see to it that the double liability is as
sound as the capital.
This. in most cases. would compel
widows and trustees of estates to dis
pose Of bank stock to active business
b1 ~, ha
bank and it ought to be done. Bank
stock when it comes into the posses
sion of people incapable Of scrutinizirg
loans for themselves becomes as
hazardous an investment as an indus
trial and it would be an act of kind
ness as well as OF state guardianship
for our laws to effectively eliminate
! such investments from the holdings Of
! widows and minors.
The mysterious disappearance OF the
coffax cashier, too. brings to our at
ten,ion the enormous load OF respon-
sibi.ity which every banker takes to
bed with him and which sits at table
with him every day. persisting in
| stalking besides him upon the streets
and down to his desk. The man who
manages a bank, the banker. borrows
money from his depositors payable up
on demand. Most Of this money he
loans again to other men at a profit in
the rate of interest. Blu. the banker
guarantees the depositor and takes his
chances on the loans he makes. When
he loans 1t is usually for a definite Pc
Rod Of time and until the date Of ma
turity the borrower does not intend to
pay. The depositor, however, must be
paid upon demand.
It Is this obligation to pay the de-
positor on demand with the funds
loaned out to others on time that
makes the banker hustle SO when bus
mess becomes SO active that more than
the usual amount OF money Is needed
to move 1t TO market. AS soon as de-
positors begin to draw out their money
for their business needs and perhaps
ask for more at the bank, then it Is
UP 20 the banker to hustle to get 1t
back in again from those who have
borrowed before Hence loans are
called In and other loans turned down
at the very time whan legitimate busi-
ness needs money the worst. The pres
, sure became too great for the Col~
FAX banker. He allowed one man to
overdraw so deeply as to strain the
banks ability to pay its Gepositors and
the banker disappeared. In despair he
drowned himself. He was the captain
Of a ship Ia a storm with women and
children on board and his nerve failed
him
1t is this inadequate adjustment OF
banking capital to the legitimate needs
OF business that makes money so
tight" today. 1t is the thing that has
caused factories to curtail employment
when they should be running TO fil or
ders and It Is the economical break
down which congress is trying to re-
pair in a banking law which will con-
federate the banks in one great mutual
protective association with power to
help one another meet their demands
by all collectively giving the other q
lift in times Of need.