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Prominent Citizens, Bank Examiners And Fellow Bankers, Put Confidence In Commercial State Bank's Integrity
Shortly after the Commercial State bank opened for business this morning, after withstanding a serious run, Saturday night, the lobby was comfortably filled with patrons, making withdrawals in diminishing numbers, and a much larger number of patrons making increased deposits.
Addresses Inspire Confidence
Addresses were made by state bank examiners' bankers of the other Iowa City banks, bankers from other important Iowa cities, and by large depositors, and by other leading business and professional men of Iowa City, generally.
All of these eloquently expressed their confidence in the bank, their faith in the integrity of the men back of it; as well as voicing their regret that such an uncalled for and unwarranted run should have been made on an institution of its solidity and solvency.
Officials of the state banking department, themselves, declared that the bank was absolutely safe and sound, and needed only sensible, calm, cool, reasoning conduct on the part of its depositors.
President Korab
President Paul A. Korab opened the series of addresses, by re-assuring the assemblage.
"The Commercial State bank of Iowa City is perfectly safe and sound.
"Mr. Grover S. Krouth, whom I recently succeeded as president, following the union of the Commercial and Iowa City State banks a year ago, now owns 40 shares in this bank, and he is a member of our board of directors.
"The state bank examiner examined our bank in December, and he found everything all right. If he hadn't, he would have closed the bank.
"The banking department of Iowa has spent the last 24 hours, looking over the affairs of the bank, and now declares we are sound and safe, if the people of Iowa City do not carry on a run that no bank in the United States could resist.
"Money deposited is loaned by banks for the purpose of earning interest to pay your interest on your deposits. Farm mortgages can not be called in at any moment, months before they are due, and thus a bank must wait for the funds, sometimes, just as depositors wait, until their certificates are due. Gilt-edged farm loans are perfectly safe, but money can't be realized until the proper time.
"Fourteen of Iowa City's foremost business and professional men, manufacturers, and others, with a combined capital of $2,500,000, are directors of this bank, standing firmly behind it, but their money is not lying in the vaults, of course, in liquid form, awaiting a foolish and useless run on the bank. Their assets can not be liquified in a minute. Yet these men are assuring you that your bank is absolutely sound.
L. G. Bein
Mr. L. G. Bein, cashier of the famous Iowa National bank, of Davenport, said:
"For about 30 years, our bank has done business with the Iowa City State bank, and we have always found it a safe, sound, and staunch institution.
"We have had it on our books for all those years, and it has met its every obligation on the dot.
"We have full faith in the institution, and know that it is up to the depositors to show their faith. Their confidence and their support are merited, and those two things will make or ruin any bank, by being given or taken away, as the case may be.
"If depositors in Iowa City act with common sense, they are as safe as any depositor could ask to be. If they are 'boosters', not 'wreckers', everything is bound to be all right.
"As to the old Commercial bank, we never did business with it, but we are friends of, and have full faith in, such splendid men as Henry Negus and George Dvorsky, and we assure you we are back of them, in this trouble, which ought not to have been brought about, at all."
State Examiners
State Bank Examiner L. G. Fuller, of Cedar Rapids district said:
"There is no doubt in my mind that this run is uncalled for.
"The bank is all right.
"It merits the confidence of the people of your community and ought to receive it.
"There is a quarter of a million dollars in cash back of the institution right now, ready to give it absolute support, and this means perfect protection for depositors, if they remain sane and sensible.
"Of course, no bank in the world can stand a run, if every depositor, great and small, demanded every dollar, in a moment.
"We have just gone over the affairs of this bank again, and have found it solvent, and it is the people's province to show their faith and good sense, and save the situation."
Special Examiner N. B. Shaffer, of the Iowa State Banking department, said to the deeply interested audience:
"It is a mystery to me why any people in any Iowa city can act as some of you have acted.
"This looks more like one of the Dakotas than Iowa, to me.
"Let reason prevail, and you will be absolutely safe.
"A quarter of a million dollars is ready to protect your interests right now, but no bank in the world could stand a run that embodied a demand from every depositor for every cent he had deposited, the minute the depositors made up their minds they wanted money.
"This bank is sound, but you can injure it and yourselves by unreasonable conduct. It is up to you to decide. We have examined the bank and have found that it is solvent.
"If it were insolvent, we would close it.
"It rests with you, as to whether this institution in the University City of Iowa, where, if anywhere, common sense and reason ought to prevail, shall close or not.
"You can continue your absurd run, and force us to close it, ultimately, although it is perfectly sound and safe, if you act sensibly.
"If you force this bank to the wall, you are responsible, not its directors, who are able business and professional men, leaders in the community.
"Can't you see how foolish it is to expect a bank to pay you 4 per cent on your deposits, and yet keep these deposits lying idle in the safes and vaults?
"They must loan it out, and set it to working, to make money for you, and to make the bank flourish. Therefore, the richest bank in the world does not keep right in hand every dollar of its deposits. It couldn't, and live.
"Two local banks have come to the Commercial State bank with a generous offer of their willingness to support it—$100,000 has been tendered by them already.
"If you depositors act like thinking, sane people, your interests cannot suffer.
"If you force this bank to close, I tell you again, you are responsible for any losses that may come to you and to your friends, who are not even here today, but whose interests you are attacking, not protecting.
"If you drive us to name a receiver, then you may wait a long time, to get your money. If you behave like sensible people, you are in no danger, at all."
Hon. W. O. Coast
Hon. W. O. Coast, a prominent merchant, one of Iowa City's leading business men, and a former member of the Iowa legislature, said:
"If I had $50,000 in my possession right now, I would not hesitate to deposit it with this bank this very minute.
"I have been in close touch during the last two days with the greatest financial interests of the city, discussing and studying this problem, and they assure me the bank is perfectly solvent. I tell you the same thing, and I could not afford to say it, if it were untrue, or if I did not know what I am talking about. I do know."
W. J. McChesney
Extending a fellow-banker's hand of friendship, support, and confidence, President W. J. McChesney, of the First National bank, said:
"I can not understand this uncalled for, useless, nervousness and restlessness in Iowa City. In 35 years of banking, I have never seen anything like it.
"There is no occasion for it. The Iowa State bank examining department declared the bank safe, solvent, and sound, after examining it about a month ago, and after looking over the affairs again yesterday.
"Other banks in Iowa City have faith in this bank, and are glad to give it support with our securities. The state of Iowa endorses it, through its banking department. Depositors need not fear."
Dr. W. A. Jessup
President Walter A. Jessup of Iowa university, a director in the bank, spoke forcefully, and was warmly applauded. He showed the difference between ordinary business houses and banks, and he emphasized the need of the depositors to keep in mind that banks bear a special relation to the people, and the people, a special relation to the banks, that exists in no other lines of business.
President Jessup told of his personal investigation of the foolish rumors, and the trouble that followed, and he rejoiced that the bank examiners of the state of Iowa, whose duty it is to safeguard the public had examined the bank recently, and had looked over its affairs again Sunday, and found that everything was safe and sound.
President Jessup proved, in a brief, pertinent talk, that banks must not be expected, and are not expected to keep their depositors' money locked up in their vaults—but must have the deposits in circulation, earning money for depositors.
This showed how impossible it would be for any bank to answer the demands of all depositors, if they swept down upon that bank, all at once, demanding that their money, invested for their good by the bank, be called in, and paid over to them in a minute.
"'Don't rock the boat'" was Dr. Jessup's earnest exhortation, as he added, that the Commercial State bank was safe and sound, if the people just keep their heads, and act with the same faith and judgment that the other banks of Iowa City, and the state banking department of Iowa are displaying.
Attorney W. J. Baldwin
Attorney W. J. Baldwin said:
"The stockholders of the Commercial State bank are among the outstanding, high-ranking citizens of this community.
"Do you think for a moment that any such men as 'Billy'"}
