The Winslow mail., 1926-08-13
ELL|NWOOD IN
ADDRESS SAYS
ENFORCEMENT
BANK LAW LAX

outstanding features OF the address
of E. e. Elinwood, Democratic can
didate 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.
Elinwood, who for number of
years has been actively engaged in
banking in Arizona, declared that if
- aken 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 enforce
ment of the banking laws.
1.-THE deposition is the biggest
partner in a bank" Elinwood said,
land it is the depositor for whom
the laws are made. They are draft
ed to protect the funds which the
depositor places in the banks care
''The relation of the bank to the
depositor is that of a trustee, the
same 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 relation
ship of the bank to the depositor.
He seems never to have compre-
hended the judiciary 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, we found loans on cat
tie had been on the basis of 40
cents on the dollar that were per-
fectly solid and secure, but on ac-
count of the drouth which caused
the death of many of the cattle,
and a forced sale of the remainder,
the securities sunk until they were
( worth forty cents on the dol
L. with the cattlemen of this state
bankrupt and in distress. Had the
superintendent of banks closed
those institutions, he would have
played safe, but he would not have
been fit to hold the office. We
nursed the banks and brought
many of them from insolvency to
the condition where they were
sound financially
"This is the most amazing state
ment I have ever heard from any
one who pretends to know anything
about banking. 1t is not the func-
tion of the banking department to
nurse" with depositors money
any bank. The banking department
is the agency of the depositors and
not of the stockholders.
~ The idea of superintendent of
baG&hs, in effect, placing his seal of
approval on a bank which his ex-
animation disclosed to be insolv-
ent, and allowing the depositor to
place money in that institution and
permitting the bank to continue in
business, hoping that it would pull
through, it is nothing more or less
than a gamble with the money of
the depositor and future deposi-
tors.
'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
depositors. The only ones who had
anything whatever at stake. In
his speech Governor Hunt failed to
say anything about the thirteen
banks that he failed to return to
financial solvency, the thirteen
banks which were beyond ''nurs-
that the depositors were permitted
to remain in ignorance of the sit
uation and in those banks it was
the money Of the depositors that
was lost in an attempt to nurse"
them for the benefit of the stock
holders.
Gas deplorable as the case may
have been the depositors were not
desponsible for the drouth and the
cattlemen's loss. 1t was loss to
the cattlemen themselves. Had the
.th2tlemen made millions it would
not have profited the depositors
and shown what theory should the
cattlemen's loss be shifted by the
banking department to the should
SIS Ol JLG OCpOoiIOlo WuCu ny
playing it safe" it could have
been avoided. Governor Hunt had
ignored the relationship 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 entrusted
tSSem with their money.
THE National banks observe the
law as written. They put the eX
animation reports in operation in
stead 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 relation of the bank
to the depositor should not be in
charge of the banks of the state.
He is not capable of holding the Of
flee for he will not enforce the
banking laws in spirit and in fact.
Governor Hunt said he might
have played safe Don't you de-
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