Omaha daily bee., 1921-10-26
Changes In
Bank Laws
Advocated
Financial Crisis Discussed at
Meeting Of Group l Bank.
crs of Nebraska in SEES.
sion at Lincoln.
Defend Federal Reserve

Lincoln, Oct. SS.-(Special Tele.
gram. )-Nebraska's financial crisis,
growing out OF the war and drop in
prices OF farm products, was dis
eussed from every angle today a, tn,
annual meeting OF group one. Ne.
braska Bankers association.
Resolutions were adopted urging
an amendment to the state bank
guaranty law providing that before
the payment of any depositors' claims
the receiver OF the failed bank shall
proceed to collect the double liability
attached to stockholders and cx-
haust all reasonable means to
realize upon its assets. They
also asked that a report be
made on what steps are being taken
by receivers OF failed banks in the
collection OF assets.
Elect New Officers. -.
The following officers were elect
ed: C. S. Aldrich, Elmwood,
president; {. II. Wear, Verdon, vice
president. ,.
Attorney General Clarence A.
Davis, at the head OF the law en-
forcemcnt machinery OF the state,
explained weak points in the laws
which he believes may be mcndcI
to curtail bank failures.
Ex-Governor w. ]. Bailey of
Atchison. Kan, a director in the
Federal Reserve bank OF Kansas
City, which. it is charged, has failed
to give relief to the farmer in his
greatest need, defended the system.
+. w. Thomas, vice president of
the First National bank. Omaha,
sketchcd briefly the details OF the
war finance corporation organized
to aid the farmer. .
Six Failure Causes.
Davis outlined six contributory
factors to recent bank failures in Ne
braska. They are:
Onc-man or one family banks.
Dummy directors, who fail to as
sumo their rightful share of re-
sponsibility.
Lack of funds to examine genuine
ness OF notes held in. banks.
Nebraska's strictly agricultural
character calling for real estate loans,
slow in liquidation, particularly dan
gerous at time when inflated land
values begin to fall.
Deliberate dishonesty Of bank Off
cials. ~
Too many banks.
Great strides wcre taken by the.
last legislature in, giving power
necessary to lessen certain OF these
evils, Davis declared. He pointed to
tie discretionary power placed in the
department of finance and revenue
to deny charters for banks in towns
which it believed had sufficient
banks. The law forcing bankers to
get licenses and the law giving the
state department the right to ex-
anime receivers. also were mentioned
as safeguards for the public provided
by the legislature.
Embarrassed in Prosecutions.
Davis described embarrassment
and harassmcnt met by him in
prosecuting defaulting bankers in
communities where the depositors
had received their money from the
guaranty fund and after they got
theirs began to radiate sympathy for
the dcfaulting banker. He mentioned
the plan of ]. <. Hart, secretary OF
The department of trade and conf
mcrce, to defer payment of deposits
until collections on assets were COM
pleted asa means Of avoiding hero
worship Of communities for default-
ing bankers.
Then, too, after debtors to a
failed bank learn that the depositors
are paid and satisfied, they often be-
gin to think that their obligations
are settled" Davis said.
Davis told of how he had been
hampered by persons, mapy big busi-
ness men, who asked leniency for
technical offenders of the law be-
cause, they said:
''He did it to help out the COM
panyp
Call OF Jury.
One banker in Omaha, he declared,
asked him to call off the grand jury,
and "let business heal its own
sores.'
"a return to respect for the rights
OF the individual, less respect to the
rights of organizations and return
to an ideal of personal honor and
integrity and respect for the law is
fundamentally necessary for our
prosperity and a continuation of our
government" Davis said.
Ex-Governor Bailey treated his
audience to a two-hour extempor-
aneous address. He declared the
Federal Reserve hanL uas heino at.