The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-30

these institutions was S24, LIZA $40,
Depression and bank robbers
were included among other factors
causing 1854 per cent of the
failures, while bankers and failure
OF state supervision was credited
with 71.36 per cent.
The commission, headed by Wal
ter S. Greenough of the Fletcher
Trust Company, has its findings and
recommendations to the legislature
published in 174-page booklet.
The two-year survey was author
lied and the commission created by
the 1881 legislature.
A complete reorganization of state
control of banking in Indiana is
proposed in the report.
Depression Discounted
Discounting the depression as a
major cause of Indiana bank fail
ures, the commission found that
'less than 1854 per cent of these
failures are beyond control of the
banking industry"
They also found that small
banks, and banks in small towns.
are as safe or safer, than banks of
more than 100000 capitalization in
larger cities of the state.
Southern Indiana banks have
had smaller percentage of failures
than those in the district north of
Indianapolis. Greatest percentage
has been in the industrial areas,
particularly the Calumet district, it
was shown.
1T is believed that in most in
stances banks do not fail because
of economic conditions" the COM
mission concluded.
Test of SOundness
Trying conditions and depressed
economic situations merely serve as
the test for the Soundness and COM
prehensiveness of the management
policies of financial institutions. If
banks failed solely because of eco
nomic depressions, there would be
no banks left at the present time.
THE facts of the situation are,
however, that the majority of the
banks that were in operation at
the beginning of the depression per-
iod in Indiana still are operating
successfully"
Contending that better banking
can be brought about by improved
state control, the commission rec
ommends a non-salaried commits
sion, no more than two members of
the same POLITICAL faith. The Indi-
ana Bankers Association would rec
ommend a member the Indiana
Savings and Loan League, the sec
ond member, and the other two
would be appointed on a qualifics-
ton basis by the Governor.
Would Direct Charters
This board would have jurisdic-
ton over granting of charters and
select a commissioner qualified to
direct the department. The de-
partment would be sub-divided,
with various division heads and 2,
staff of examiners sufficient TO know
what is going on in the banking
field.
The department also would have
jurisdiction over liquidations and
seek to curtail excessive receiver
ship fees.
Charters now are granted by the
state charter board. It is COM
posed of the state banking commits
sioner, appointed by the Governor,
the Governor and secretary of state.
often, the report states, this trio
may be of the same political faith.
The commission found that grant
ing of charters has been abused
greatly and, in the past, have not
been examined often enough for
the state to have adequate knowl-
edge of their actual conditions.
Spite Chartering Charged
Chartering of spite banks" for
direct or indirect political reasons"
is charged.
This has resulted in "cut-throat
competition" and consequent dis
aster, the report sets out.
Instances are known in Indiana
Of new bank charters being sought
and obtained by church groups,
lodge groups, or political groups
antagonistic TO the church group,
lodge group, or political group in
control of the existing institutions
the report declared.
I'm numerous instances from 1920
to 1882, villages of less than 500
people had two or more banks
operating.
Competition Is Bitter
Competition in such commun-
tiles necessarily was bitter, because
it was nothing less than a death
struggle between the contending
business groups and, consequently,
desperate chances we're taken,
nearly always making for bad bank
ing practice.
In some instances, bankers with
long records of successful manage /.
ment we're driven by the ergency
in which they found themsci1es to
take long chances and to indulge
in practices not sanctioned by sound
banking management"
Hourly Temperatures