The midland journal. (Rising Sun, Md.) 1885-1947, 1933-10-13
FOR FAILURE PROOF J
BANKING STRUCTURE
Speaker Outlines Threefold CO.
operation Between Bankers,
Government officials and
the Public to Maintain
Bank Standards

the Public to Maintain
Bank Standards
TWO elements beside the bankers
4 themselves are required in order to
give the nation universally the type of
banking 1t should have, Francis H. Sis
son, president of the American Bank
ers Association, declared in a recent
address. He said that the efficiency Of
government officials upon whom the
people rely to supervise the banks
properly, and the patronage of the
people themselves are factors in the
kind of banks community shall have.
There can be no question that the
people of the United States should have
banks immune from failure and wholly
free from bad or questionable banking"
Mr.. Sisson said. ut is not enough, as
President Roosevelt has said, that
while some bankers had been incompe-
tent or dishonest, this was not true in
the vast majority Of our banks. A sit
uation should exist in which there is
not even small minority of bankers
open to question. There should be no
room for dishonesty or incompetency
to exercise any influence in banking
anywhere.
ment enter the human factor in all
types of business, their effects in bank
ing should be surrounded by such spe-
cial safeguards as to render them no
longer factor in bank failures. The
responsibility for bringing this about,
however, cannot rest upon the bankers
alone, for the means to accomplish it
are not wholly in their hands. There
are other essential elements.
zone is the efficiency of government
supervision. Since we rely so greatly
upon supervision, it may, unless it is Of
the highest order in safeguarding the
public interest, create sense Of false
security. Supervision should render
bad banking impossible, but it has
failed to do so. There was super
vision by presumably the highest type
Of bank supervisors in every one Of the
instances of questionable banking that
has shocked the attention of the coun-
try during the past three years. There
fore thorough Strengthening of super
vision is clearly called for if the people
are to rely on it to the fullest extent
for the protection of their interests.
The Public's Part
another essential factor in main
tanning good banks involves the part
played by the public in banking. There
| is certainly responsibility on the peo-
pie themselves to support that type Of
banker whose rigid adherence to sound
principles makes a sound bank, rather
than to give their patronage to the easy
going banker who may be easier to do
business with, but whose methods Gre
ate weak bank.
Bank customers are charged with q
great responsibility in protecting the
safety Of their banks in respect to their
utilization of the assets of the banks as
borrowers. Banks have failed because
many Of their loans and securities, Gre
ated in good faith by bankers in COOP
Grating with the business interests Of
the country, proved unsound under SUBJ
sequent conditions. An unsound loan is
created by the borrower as well as the
banker. A bank is only as sound as its
community, and this applies also to the
banking structure as whole in rela-
ton to the economic condition of the
nation as whole.
"A bank is truly a semi-public insti-
tuition, but in a reciprocal sense-it has
its obligations to the public, but so has
the public equal obligations to the
bank. No one who has not sound bank
ing principles at heart has any business
in bank whether as banker or as
q customer.
1.-THE banker is a semi-public servant.
He is charged with the heaviest Of re-
sponsibilities and obligations that occur
in our economic life. But he can meet
these fully only through the coopera-
ton Of good laws, good public officials
who are empowered to exercise au-
thority over his bank, and good bust
ness methods on the part of business
men generally who utilize his bank.
Only through such cooperation by all
elements in our nations community life
can we be assured Of failure-proof
banking structure.
"The Administration at Washington
has taken hold of this problem with
firm grasp of essentials and is exercis-
ing splendid leadership toward the de-
sired end. The strongest feature Of the
government program will be found in
recognizing the joint responsibility Of
the public, of business and Of govern
ment officials together with the bankers
themselves in creating the kind Of
banking the nation should have"
Improved Pasture Pays