The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-05-23
LETTERS TO
THE EDITOR

Editor Times-News:
Laws made by congress and
state legislatures are contradlc-
tory and inconsistent. They au-
horize individuals or groups OF
them to establish banks with in
sufficient capital to do a gen
eral banking business, depending
on individuals and business firms
for money volume with which to
carry on.
Laws require banks to accept
deposits from the public on basis
that all such money deposited be,
longs wholly to the depositors and
that same is to be returned on
demand. The laws authorize
banks to loan for variou time
periods up to So cents OF. each
dollar of deposits into channels
of commerce and industry; so, II
half, third or even less Of deposl-
tors demand return of their
money, or most of it, at the same
time. it is obvious the banks
could not pay it back, because
the money is loaned out by au-
thority of same law that requlr-
ed it to be paid back on demand.
This condition, a direct contradlc-
ton in law, could be remedied, or
greatly improved with safety to
depositors, by permitting banks,
under government supervision to
make repayments to depositOrs in
relation to repayments of loans,
when demand conditions warrant,
and until full payment could
safely be resumed. o..
The laws say money on deposit
belongs to depositors, but does
not say that depositor ownership
is only while bank is a going
business concern. The laws do
say that when a bank closes, the
.depositors money does not belong
to the depositors but becomes an
asset of the closed bank, to be
used for payment OF debts OF
closed bank, regardless of wheth-
er such debts were caused by bad
Judgment in loans, eXorbltant sal
aries to favored officials of the
usually small controlling group,
exorbitant rents, or other extra
VACANT expenditures. The laws
thus place the depositors on same
basis with stockholders as to
bank debt liability, save for dou-
BILE Indemnity. Depositors have
no voice whatever in bank man
agement; stockholders and Off
Gals get all the profits made
from loans and investments, yea
are required by law to be respon-
sible along with bank owners IN
sharing bank losses. Even stock
holders are never given knoWl-
edge of exorbitant salaries for
favored officials, with no thought
ever taken by officials and di-
rectors for lean years, or posi-
BILE failures, when stockholders
and depositors alike are required
by law to share losses of bank
officials gamblings and extravag-
,ances. The laws do not govern
or take notice of salaries and
fees that may be paid by and for
bank officials. The laws are not
satisfied with all this. but re-
quire depositors to help pay
state or federal liquidators, the
political hyenas, into whose saw
age hands the closed banks af-
fairs are placed for liquidation.
Depositors should not be pen
allied by law for the law viola
tions or short comings of bank
officials. The law gives the stock
holders of the banks all the prof
it's accruing through use of the
depositor's money. The same law
takes the depositor's money away
from him to pay for the losses
whether by wilful law violations,
mistakes, extravaganza and other
mismanagement by bank officials.
Law representatives characterize
the portions Of depositors money
returned to them from closed
banks as dividends" That por-
ton kept for paying off banks
debts and liquidators salaries and
fees is characterized by deposi-
tors as plain "loot." Depositors
who owe banks must pay the OBJ
legation regardless of their de-
posts. People are urged to re-
spect the law, even with such
violent contradictions and incon-
sistencies! A million depositors