The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-06-24
Safeguarding the Banking Business

George a. Bangs or Grand FORKS spoke TO the
bankers in state convention without mincing mat
tcrs using any weasel words to gloss stu
alton that has been generally known for years. He
pointed way out of the present slipshOd methods
Of banking to more solid ground. The legislature
well his as a guide to remedial and
constructing legislation to protect the deposors Of
the state
Pointing out defaton the chief contributory
cause Of financial condition, he then tackled fea-
tures in the banking situation which be con-
1Eed by the state through the passage of proper
legislation. For years many of the main props Of
safe-asld banking have been swept away
through unwisc legislation and slovenly supervision
This system cannot be charged to any one admin
istration, has been gradual and cumulative in its
growth, largely due to the laws that supposed to
protect the banking structure of the state.
Banks with insufficient capital, frozen assets and
inefficient management struggled to keep open dur
ing the serious period of deflaton by dcfying many
OF the laws. 1t deemed inadvsabc prcc pitatc
panic by forcing the issue when defIation first
began, but the inevitable result followed in North
Dakota in every agricultural state in the union.
In North Dakota the capital and deposits involved
were insignificant compared to Iowa bank failures
and those Of other agricultural states IN number.
the closed banks presented rather an impressive
total. IN: the footngs were not rs much as three or
four ayte city banks that closed their doors in some
Vt tn middle wcs, cities. In other words North
Dakota. fr,m closed bank situation is net so
badly off as many ncighboring states, except our
failures have been better advertised Other states
have seen to it that very little crept into the news
columns about their closed banks A political stu
al on here most destructive in its tactics broadcast
rth Dakota bank closings in the. hope Of making
thcns political issues Fortunately the tide has
turned. North Dakotans realizing that COM
pared to other states their state one Of the bright
spots on the agricultural map and that every day
in every way, the banking situation is becoming
vastly improved. Such frank speech as that uttered
by Mr. Bangs will aid rather than retard complete
recovery.
he points out. too, that dishonesty played a very
small Part IN the closing IF banks. In most cases
eva;' On of the law was mistaken attempt to save
the bank and to protect rather than injure the de-
pOsitors.
IN closing this editorial is most fitting to give
;udt.oaal emphasis to Mr. Bangs excellent sum-
mary by repeating the antidoe he prescribes to as
slst banking back to more stable conditions:
Inc success CT banking institutions depends
largely Gu the intelligence and ability of those
Entrusted with their management There is
suggested then for consideration and discussion
the proposal that sort of an examination
ana licensing law be evolved, modelled to some
extent at least upon the laws applicable to the
professions.
With the thought that conditions may bc
made more favorable the following suggestions
are offered:
non olitical banking board selected from
nominations made by the State Banking Asso
cation with long terms and very ample a,-
thority.
Ins alflce OF state examiner should be non
polltRaia7 aHe should be we'll paid and his term
should be heightened The examiners force and
'nc'r compensation should be materially in
creased.
Excessive competition should be eliminated
ny the consolidation of many of the present
banks, and ample power should be given to the
state banking beard to accomplish that purpose.
- wen as TO prevent the excessive granting Of
charters in the future
"A commission Of experienced bankers should
DC selected to revise, codify, and recommend con-
servative, reasonable banking laws"