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information does not trace to irre sponsible rumor in shop, on street or in sewing circles, but comes directly from Mr. Hart Nora Springs, president of the Farmers' Mutual Telephone on the morning the bank at Floyd closed happened to be in the company's telephone office Floyd. Mr. Hart states he the notice the closing the bank posted and that in less time than car could have been driven the miles between Charles City and Floyd of one of the Charles City banks appeared before the board and offered to take all the assets of the closed bank at S0 cents on the dollar. it is putting mildly to say that this incident illustrates an sufferably abominable condition in banking affairs of the makes clear that the larger banks have been given decided as result the conditions which the Courier refers fact the noted that the big bank resentative had advance information of what was going to happen. Moreover. serious questions are arising in the minds of many whether the federal reserve banking system has been of as much to as has Funds have country been drawn from both state and national member banks for loan at large interest rates to stock gambling enterprises and there is good reason for behef that it was the scandalous, which in the crash in October. 1929. that is more responsible our present than any other single factor. The bank at Alden, long lished and apparently secure banking institution closed lis doors last Thursday morning. The unusual part of this transaction IS that the act was purely voluntary. had not been forced by losses "frozen as sets' and was not ordered the state banking department. was closed, fact, as protest against the theory of banking imposed on the country banks of Iowa by the state Any observer has known for the last two years the state banking department was pursuing policy that would the usefulness of the country banks, was not indeed designed to put them out business. This of requiring that they keep their assets 'liquid' and make loans except upon security that can be turned cash 4S hours. It has remained for Mr Birdsall the Alden banker. to make this strenuous protest against the practice. City banking is built on the theory of collateral security, which market value and can be turned into cash quickly This system serves the city well and is fairlv safe- that is, banks break under that system no more frequenty than have the country banks. But what will do in a city may not necssarily fit into country business practice and collateral banking does not fit. The farmer has one year, he is not gambling on quick action machine like the stock market. To do him any good loan must be for the period or year and must be based on some other curity than collateral which can be instantly cashed. If he had such collateral he would not ask to loan at The Iowa banking department is charged with one duty, see that the money of bank depositors is kept safe. The record of the last few years shows that as failing lamentably in performing that duty There is nothing to indicate that the new policy will do any thing but put the banks out of business in slower but no less effective manner than the old. And will tainly fail to perform one other duty of the to see that community has adequate banking facilities. The money in local banks is local money and should be used. so far as safety permits. financing local business enterprises. If the banking department insists. as seems to be doing. ID requiring that money to be used in financing big eastern businesses. it will work an irreparable damage to the state. will do away with local banks and will cripple