The Coconino sun., 1926-08-20
ELLINWOOD DISCUSSED
CAUSES BANK FAILURES
PRESCOTT WEDNESDAY

banks and the causes of the failure
of the banks within the state were
the outstanding features of the adj
dress Of Z. E. Ellinwood, democratic
candidate for governor as he talked
to prescott audience Wednesday
night and replied to statements made
on the banking situation by Gov. Geo.
w. P. Hunt.
Ellinwood, who for a number OF
years has been actively engaged in
banking in Arizona declared that II
taken in time the complete failure of
a bank was avoidable and that the
protection of the depositors lies in
the hands of the state by the early
and persistent enforcement OF the
banking laws.
1.-The depositor is the biggest part
ner III bank" Ellinwood said, land
i is the depositor for whom the laws
are lnade, they are drafted to protect
the funds which the depositor places
in the banks care.
THE relation of the bank to the
depositor is that of trustee, the
same as the relation of guardian to
his wards estate, wherein the banker
is responsible for the funds given TO
his care"
Governor Hunt in his address before
the Rotary club of this city, wholly
ignored the trust relationship of the
bank to the depositor. He seems
never to have comprehended the ju-
dietary relation of the bank to the
depositor. He seems to be blind to
the idea that the bank is guardian and
trustee
In his address here Governor Hunt
said, I'VE found loans on cattle had
been on the basis of 40 cents on the
dollar that were perfectly solid and
secure, but on account of the drouth
which caused the death of many OF
the cattle and forced sale of the re-
mainder. the securities shrunk until
they were not worth forty cents on
the dollar. With the eattlemen OF
this state bankrupt and in distress,
had the superintendent OF banks clos
ed those institutions he would have
PLAYED safe, but he would not have
been fit to hold the office. We nurs-
ed the banks and brought many OF
them from insolvency to the condition
where they were sound financially"
nent have ever heard from any one
who pretends to know anything about
banking. 1t is not the function OF
the banking department to nurse
with depositors' money any bank. Inc
banking department is the agency OF
the depositors and not of the stock
holders.
s'The idea of a superintendent OF
banks, in effect, placing his seal OF
approval on a bank which his exam.
nation discleses to be inSolvent and
allowing the depositor to place mon
ey in that institution and permitting
the bank to continue in business,
hoping that it would pull through,
It is nothing more nor less than a
gamble with the money of the depos-
itors and future depositors.
They were taking chance, not
with the money of the governor OF
the superintendent of banks, of the
stockholders (they had already LOST,
but with the money of the deposltors,
the only ones who had anything what
ever at stake. In his speech Cover
nor Hunt failed to say anything about
the thirteen banks that he failed 20
return to financial solvency, the
thirteen banks which were beyond
nursing along 1t was in these
banks that the depositors were per-
mitted to remain in ignorance of the
situation and in these banks 1t was
the money of the depositors that was
lost in an attempt to nurse lnem
for the benefit of the stockholders.
"As deplorable as the case may
have been the depositors were not
responsible for the drouth and the
cattIe1nen's loss. 1t was loss 10 the
cattiemen themselves. Had the cat
tlemen made millions it would mol
have profited the deposltors ana
on what theory should the cattle
mems loss be shifted by the banking
department to the shoulders OF the
depositors, when by playing 1t sate
ii could have been avoided!
Governor Hunt has ignored the re-
lationship between the bank and the
depositors, the trust which required
the bank to play safe and to protect
the rights of the people who had en-
trusted them with their money.
"The national banks observe the
law as written, they put the examin-
alton reports in operation instead OF
pigeon-holing them and hoping bank
will muddle through. The same plan
can be followed by any bank. ANY
man who is blind to the sacred rela-
ton of the bank to the depositor
should not be in charge of the banks
of the state. He is not capable OF
holding the office for he will not en-
force the banking laws in spirit and
in fact.
"Governor Hunt says he might have
played safe Don't you depositors
sincerely wish he had played safe 2"
Nearly 1000 voters crowded Elks
theater to hear Ellinwood speak.
Thirty minutes before the opening OF
his address, the house was full to the
door and ushers were placing chairs
for the overflow
Besides the speaker on the stage
there were about 80 representative
democrats of Yavapai county, includ-
ing in the number some of the Ari-
zona pioneers as well as group of
younger voters.
In addition to his address on the
banking situation the candidate sket-