Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1914-05-21
REGULATE PRIVATE BANKS.

L-ESc are -&--N --4---3 80 -------~-
:: ;s during ne Storm that the weak
mss .: unseawo--hy craft Is disclosed
hence We ar6 business enterprises that
were spread ou- 100 thin making as
ssgn7a-ts ara banks that have loaned
cnv:s=ly 20 uod=-. The wonder IS
however. ira: so very Il" banks fan
70 Withstand the test and me explain
axiom can be found n ne care Win
which most banks are examined ny d.
rac.o-s ana by government examiners.
safe supervision 9: the barking ous!-
ness 5 proving its worth
TIE failure al Radcliffe, however
shows 10 the one g3a-ing weakness IN
ou- banning system. A.T --a- csn 2nF
IN sign calling himself banker and
people viii loan their money 10 MIN
without collateral He may cali him
self the Farmers Bank, as al Radcll.s
or the Peoples or the Citizens Bans
50 as 20 disguise the fact that none!
handed in over his counter - N tec'
!oa7ed 20 him. the ind:vid ua.. Il ms
Individual IS personally strong aaan-
cia.lv and proves 70 De wise in lis II
yes--e,-s the aeposi-ors in his private
bank never suffer but il is all LEFT Il
.az sn5ividuaI No board 0: directors
scr3I-:nize what has been done Win
the rorer. No state eXa miner looks
/ into the banks affairs 20 see thai no.
more han 10 per cent Of the capita
! has been loaned 10 one person for Z
/ private hank IS no. required 20 observe
1 ~ rules and regulations 0: SAFE bank
ling IS prescribed ~ law. = private
/ hank 5 not 2 STATE bank nor 4 uat!oaa
ba-.E. II il just an individual. OF part
! rs-s1.9 which takes the 1loneT l'ecI!:
BRING IL 70 il and does what i please:
With the funds. Il bcrroTSs from IL
, cepcstto-s without giving collstera
and pays its depos:iors on demand j
1t can.
/ 4 state or 2 national bank borrow,
from It's depositors, 700. for al none!
! lie posted, in bank IS in effec
loaned 20 the bank az no ban!
2re-en5s to lock those paTuc
ula- funds up for delivery when callet
fo-, but the difference is that stat
g~ national bank has an invested cap
:;a. which must be kept invested IN n
bank as security with which % --a-gil
the money borrowed from depos!lo-
and then Il has several stockholder
wao are personally liable as eadorser
for an equal amount in addition. Thi
gives a depos;tor in a state or ma
ctocal bank the banks capital and sur
plus as margin or security in exces
% the amount Of the deposit and
gives him all the stockholders as per
sonal endorsers as we'll. The bank
promise 20 pay out his deposit upo
demand is thus secured, whereas in
private bank the money is turned Owe
to Jhe private banker and his promiE
10 pay it out upon demand is just q
good as his own ability 20 pay an
tina. is MS business about which r
examiner or board Of directors ever il
iquire.
People who deposit money in priva
banks loan their money TO priva
bankers without collateral altho the
. may believe that there is a bank bac
Of their loan. In most cases the loa
Is safe because the private banker
sound, but there is no way Of KNOWN
the unsafe from the sound and here
our banking laws fall short. For I.
same reason that lawyers are not pc
. nitted to use the professional title
"attorney at law without permissit
, from the state, bankers should not
permitted TO call themselves bank
unless they had fulfilled all the r
auirements of state law and have o
come state banks. There should be
such thing permitted in Iowa as DO
rowing money under the disguise
. the name bank Private bankers. Vi
! are sound, should be glad to get