The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-09-22
BANK CRASHES
ARE LAID TO
LAX METHODS
Poor Business Practices,
Not Crop Failures, Blame,
Says Lakewood.

crop failures ana QeIlaClOn were
freed of responsibility for twenty
bank failures in Indiane this year
by Craig B. Lakewood, Chicago
banker and American Bankers AS
ISOLATION vice president, who applied
verbal scalpel to the situation in
an address before $50 Indiana
bankers at the Claypool Hotel to-
day.
Addressing the thirty-first annual
convention of the Indiana Bankers
Association, Hazelwood cut straight
to the causes of bank failures in the
Hoosier State and asked his hearers
this question:
Review in your minds all of these
failures. Was there not in every
case evidence of bad management
in those banks? If so, you can't say
crop failures or def1ation is the an
swer to ban kfailures in Indiana"
States Record Not Bad
"Indiana's records is not so bad
as in some other States. Here
thirty-five banks failed between 1920
and 1926. and twenty this year, two
of which have reopened.
This situation grow out of lax
conditions and soft mel .val con-
ditionS bankers had during the in
fiation period.
"Fifty-five failures in seven years
is too many. AS bankers you must
study this situation and prevent a
recurrence of any such record"
The speaker declared failures are
most likely to occur in Sparsely
settled communities or in centers
lacking diversifcation of industry or
products.
Urges Clearing House System
"a third bank in a two-bank
town is ridiculous mistake and a
crime against good judgment" he
said. Indiana has a bank to
every BIOS persons. Failures are
fewest where there is one bank to
every 1000"
Setting out a code of ten rules
for safe guidance of bankers Halle
wood stressed the importance of "di-
versification of loans as well as the
diversification Of crops" you have
been advising.
The bank with its loans all to
farmers is in a dangerous position
all the time"
He strongly advised establishment
of the clearing house examination
system and the taking of outside
paper as a form of insurance"
"As banking officers, i'll the last
analysis, the responsibility of run
ming the banks is up to us. Don't
allow yourself to Just sense that
responsibility, but he alert con-
stantly to the drift Of things"
Condition Is Sound
Luther F. Symons, Indianapolis,
State banking commissioner, greet
ed the convention and reviewed IN
diana'S banking situation briefly
Banks that have closed in Indi-
ana" he said, "are, with but few ex-
ceptionS, banks which should not
have existed in the first place.
Those failures, while unfortunate
for depositors, effected a healthful
and needful elimination of unnec-
essary institutions.
Indiana is economically and
financially sound and the banking
business now is. in the hands of sea-
soned and Conservative bankers"
The city's welcome was extended
by Dick Miller, Chamber of Com
merce president, with response by
D. A. Coulter, Frankfort, president
of the Frankfort Farmers Bank.
Association President H. G. Rothert
of Huntingburg, presided.
Committee reports were pre-
sented before noon adjournment.
Afternoon addresses were: "Tax-
ation," by Philip zoercher, member
State board of tax commissioners;
"a Leaf From Business for the Re-
lief of Agriculture" H. L. Russell,
Madison, Wis, dean college of agri-
culture, University of Wisconsin,
and What Are We Bankers Sell
ing?" BY c. H. Henderson, Cleve-
land, National Financial Advertis-
ers' Association president.
While visiting bankers attended a
smoker and entertainment at the
Athenaeum Wednesday night their
wives were guests at a style show
at the Claypool, given by Miss Flor
ence Seiders, fashion copy-writer for