The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-06-04
LACEY DEFENDS Elm SELF.
Ee Explains His Action in the Key
stone Bank Affair

ne Hxplaln5 His Action IN the Key
stone Bank Affair.
WASHINGTON, June 3.-Mr. Lacey, con-
troller of the currency, made the following
statement this afternoon in regard to the
Keystone National Bank of Philadelphia:
Il have noticed that Mr.. Etting of Phila-
delphia is disposed to criticise this bureau
for having allowed the Keystone National
Bank OF that city to remain open for busi-
ness after the discovery of President Lucas
defalcatlon. This arrives from failure on
his part to realize just what the duties and
powers OF the controller Of currency are.
POWER OF THE CONTROLLER.
"The latter cannot close national banks
except In accordance with the law. For in
stance, he cannot lawfully close bank be-
cause its capital has become impaired In
such a case the law provides that he shall
make an assessment upon the association to
make good the deficit, and three months is
allowed by law to pay in the amount neces-
sary to make good the impairment, failing
In which the controller may appoint re-
ceiver, in case the association does not, in
the meantime, want to go into voluntary
liquidation.
AN ASSESSMENT LEVIED.
"Now it is true that the bank examiner
die Of January last that the capital Of the
keystone National Bank had become im~
paired by reason of the defalcation of its
former president, but the fact as then pre-
sented did not satisfy the controller that it
was insolvent, and, hence under the law, he
could not close it, but did levy an assessment
OF S25O,00O to make good the
impairment, at which amount it was Off
cially stated to the bank examiner. It
ha harod hot ha
dition now apparent was unknown in jan
uary last, and has only been laid bare a
little at a time by long and searching inves-
legations before the United States commits
sloner and committee of councils.
AN UNFAIR CONCLUSION.
at is quite unfair to proceed upon the hy-
pothesis that the examiner, or controller,
could at first act upon facts which it has
taken four months to develop. The con-
trouer levied an assessment to make good
the impairment as soon as he was officially
informed of its amount. AS soon, how
ever, as the developments satisfied
him that the bank was insolvent
he closed it and put an examiner in charge.
During the period extending from the day
when he was first informed of the Lucas
defalcation to the closing of the bank, the
controller was advised by the examiner
that in his opinion the creditors of the
bank were amply protected, and that the
same view was entertained by leading
members of the clearing house association.
FORCED TO GO SLOW.
''The controller must of necessity depend
largely upon his local examiner, who is
always on the ground. knows all the facts
and can safely and freely consult with bank
managers most competent to advise, es-
pecally in clearing house cities. Com
plant has been made because OF
the delay in appointing a receiver.
This, however, is not well founded, as nc
interest has suffered therefrom, and for the
further reason that all the parties interested
in the bank asked for delay in the matter.
In short, whatever was done was with the
sole purpose Of best serving the interests OF
the creditors OF the unfortunate bank"